India has so far stayed away from China’s Belt and Road initiative (BRI) and its stand was once again reiterated by External Affairs Minister S Jaishankar in October.
Jaishankar had said India will not be rethinking its position on participating in the initiative.
The project, which intends to improve trade routes between China and other countries, has been criticised for burdening other nations with debt. Critics also say it gives China unfair leverage over other countries, and eventually expand its military presence.
So far, China has invested over $100 billion in the BRI, according to a report by the South China Morning Post.
What exactly is the BRI?
The project was officially launched in 2013 in Kazakhstan, and was initially called the One Belt One Road Project. Often called a new “Silk route”, it consists of maritime corridors and shipping routes to connect China with crucial ports and cities in Asia and Europe.
Chinese construction companies are given contracts, which are funded by Chinese banks, for development of ports and trains.
Jin Liqun, President of the Asian Infrastructure Investment Bank (AIIB), recently defended the project against claims that it created debt for poorer countries.
The mammoth project has not progressed as well as originally planned, with the value of the projects dropping from 2018, the report added.
Chinese state banks are taking a cautious approach while issuing loans for projects under the initiative.
The World Bank has noted that the BRI can help boost trade and reduce travel time in the economic corridors. But it also highlighted risks to the infrastructure projects, such as debt risks, governance risks (corruption and procurement), stranded infrastructure, environmental risks and social risks.
Why has India not yet joined the initiative?
Some of India’s neighbours – such as Pakistan, Sri Lanka and Bangladesh – have received funding from China. India has resisted joining the initiative over fears that it will boost China’s strategic presence in the region.
The possibility of being laden with debt is the main reason why India has stayed away from the project so far.
“Connectivity initiatives must follow principles of financial responsibility to avoid projects that would create unsustainable debt burden for communities,” India had said in May 2017 while rejecting an invitation to join the BRI.
Another concern for India is the proposed China Pakistan Economic Corridor (CPEC), which passes through Pakistan occupied Kashmir, (PoK). China has invested over $60 billion in the CPEC.