China has been actively pursuing India’s participation in its BRI project.
In this context, if things go smoothly, the opening up of Indo-Pak cross border trade is also likely as a consequence.
How is the BRI influencing Indo-Pak dynamics?
India has always seen China as an irritant in Indo-Pak relationship.
But currently a number of factors might be at work in the north western region, to usher in a more positive “Indo-China-Pakistan” axis.
Context - Beijing is seeking to extend “China-Pakistan Economic Corridor” (CPEC) projects to India, in order to make it more remunerative for all.
Significantly, CPEC is part of Chinese President Xi Jinping’s ambitious and expansive “Belt and Road Initiative” (BRI).
Other countries in the region “Afghanistan, Iran, and the Central Asian Republics” have already responded very positively to the BRI.
Problem - Delhi has voiced against CPEC as a matter of policy as it passes through Gilgit-Baltistan (PoK), which is a territory claimed by India.
Further, India’s long standing view that projects under BRI are economically unsustainable is another major impediment for any compromise.
How can these issues be addressed?
Beijing led diplomacy to improve Indo-Pak ties may aid in addressing India’s political concerns with CPEC.
If China portrayed genuine neutrality on the Kashmir question, it could make it a lot easier for Delhi to become part of CPEC.
The differences on economics of the BRI project can easily be overcome by negotiating terms on specific projects alone on a case by case basis.
Further, despite strategic and historical reasons, Pakistan too has a lot to gain by admitting India into its infrastructural mesh.
What are the benefits for Pakistan from all this?
Pakistan is currently undergoing a period of extreme macro-economic stress and is on the verge of seeking foreign loans to support its budgets.
The incoming PM Imran Khan has stated that instead of borrowing international, he wants to revive the economy through indigenous means.
Letting India export its goods to Afghanistan and Central Asia through Pakistan’s territory is of the ways to boost Pakistan’s economy.
Apart from helping Pakistan earn a handsome transit fee, it will also open up more business opportunity for truckers and other industries in Pakistan.
Pakistan had been refusing to facilitate such trade with India for long, but the current situation seems conducive for opening up.
What is the way ahead?
Any such sub-regional economic integration will involve cross the Indo-Pak border (or Radcliff line) that divided the erstwhile Punjab on both sides.
Notably, Punjab was historically at the heart of trans-regional trade routes, but with partition in 1947, it has in effect become a complete dead end.
Over the last two decades, multiple governments had been making efforts to overcome the border to facilitate trade but will little success.
With China emerging as a major player in the region, there is indeed an enhanced thrust towards enhancing cross border businesses.
Quick Facts:
What is CPEC?
“China-Pakistan Economic Corridor” (CPEC) is a serious of infrastructure projects that are being planned in Pakistan.
The projects are predominantly funded by Chinese loan and is primarily to establish connectivity between China’s rural northwest and the Arabian Sea.
Further, CPEC is just one arm of China’s larger program called “Belt and Road Initiative” (BRI) that seeks to build multiple infrastructure and connectivity projects worldwide.
Notably, BRI has been criticised for its top-down approach and its economic imprudence which might trap host nations in debt.
