Is China's BRI failing despite COVID19 and India's Act East Policy?

Updated: May 26

Satyajith MS,

Research Intern (Indian International Law Project),

Internationalism Research.

Prafful Tonge,

Junior Research Analyst,

Internationalism Research.

The Belt and Road Initiative: An Introduction

The world has seen a transition in the late twentieth century where countries seek to dominate the world economically. With this, we see the rise of economic imperialism. China has left no stone unturned in taking initiatives to overtake the United States of America as an economic global powerhouse by 2049. (Wani, 2020) The Belt and Road Initiative (BRI) which was launched in 2013, was not the first time that China has been engaged in infrastructure development for improving connectivity between its neighbours. For instance, the Bangladesh-China-India-Myanmar (BCIM) Economic Corridor which predates the launch of BRI was initiated in the 1990s. (Baurah, 2018) While it is true that since the launch of BRI China has undertaken other bilateral and multilateral projects, it also stitches together various other projects which were initiated before 2013 under a single umbrella. It is said to be a global infrastructure development strategy adopted by the Chinese government to invest in nearly 70 countries and international organizations.

There are significant economic benefits which will accrue to the South Asian countries by the implementation of the China-led BRI. World Bank estimates suggest that the successful implementation of the BRI projects will result in boosting trade and cutting travel time in the economic corridors by 12 per cent. It also estimates that it will lift 7.6 million people out of extreme poverty, and increase their incomes by 3.4 per cent.

The Belt and Road Initiative is widespread and covers Europe, Asia, The Middle East, Africa and to be exact, the rest of the globe in one or the other. This is aimed to create a global economic trade route to strengthen the economies of the participating nations as well as to boost the international trade in all aspects as this initiative covers the road, rail and sea transport all in one. This is aimed to create a strong strategic and economic network of trade.

China’s role in the Initiative

China has led the whole initiative even in terms of its investments and economic resources spent. After significantly improving connectivity in its western provinces through the Great Western Development Strategy, which includes the Xinjiang region, China has now expanded to improving connectivity beyond its borders. BRI projects have been infamous for lack of transparency, nepotism and allegations of corruption. Data available in the public domain suggests that around 89 per-cent of contracts for BRI projects have been given to companies which have Chinese origins, 7.6 per-cent to domestic companies where the project is undertaken, and 3.7 per-cent to other foreign companies.

The initiative has been wildly speculated in developing a China-centric global market which will further enhance its capabilities in key strategic locations. It is opined that it aims to indebt target countries and then leveraging this to gain undue influence over it which may eventually threaten the sovereignty of the nation and the neighbouring countries as well.

Apart from this, like the way China systematically changed the demography of Xinjiang province through the mantra of economic development, we also see that China has been actively involving the Han population in the development of the infrastructure projects under the BRI as labourers. China has developing colonies for its workers in countries where the projects are undertaken. Estimates suggest that 10,000 Chinese are said to be living in Islamabad and another 35,000 in other parts of the country. It is reported that a gated ‘proxy colony’ is being constructed near the Gwadar port in Pakistan which is expected to exclusively house 500,000 Chinese Han nationals, who will come to work in the area, by 2022. China is infamously known for claiming territorial sovereignty over regions due to shared cultural history which has no basis in international law. So, two centuries down the line, one should not be surprised if China claims territorial sovereignty over Pakistan pointing out to these settlements as a basis of shared cultural heritage.

India’s Concerns regarding the BRI

India had always been sceptical about The Belt and Road Initiative as in suspicious about the aftereffects of the completion of a project of such a large scale, not only on the geographical but also on the economic impacts of the same. This is not in particular with India but also in general. As a project of such a massive scale is definitely going to alter the individual standings of the involved nations as and when a situation arises affecting the relationships between them. China may influence the decisions of the participating nations in one way or other which will only lead to unrest in the particular regions and will also have global implications depending on the situation at hand. India’s concern as far as the BRI is concerned related to four projects which has a direct impact- the CPEC, the BCIM Economic Corridor, the Trans-Himalayan Economic Corridor, and the MSR. The CPEC runs through Pakistan-occupied Kashmir, a territory over which India exercises sovereignty.

Apart from this, India also has apprehensions of the growing hegemony of China, which may be bolstered by this initiative. India’s concern does not primarily come from economic interests, but the strategic and security interests. China’s disregard of India’s territorial sovereignty, especially in the Kashmir region has been a major concern. Apart from the fact that the CPEC runs through PoK, since a long time, there have been disputes between China and India over Pakistan ceding a part of PoK much before the BRI initiated. Infrastructure development by a hostile neighbour in a region which has internal security issues and a strategic point militarily vindicates India’s apprehensions as far the CPEC is concerned.

The Maritime Silk Road (MSR) initiative also adversely affects India’s maritime security. With the initiative, the Dragon seeks to increase its presence largely in the Indian Ocean where India has strategic naval bases. With China already having its submarines in Sri Lankan ports, the militarization of the region has led to India’s apprehensions, even though China has denied any such goals.

When the BRI was announced, countries like Pakistan, Nepal and Sri Lanka spared no time in congratulating China for taking initiatives for the massive infrastructure development and welcomed Chinese investments in their countries. This was also seen as a limitation of India’s foreign policy since even Nepal, perceived to be a natural ally back then sided with China when India opted out of the BRI.

Through the BRI China has extended loans to weaker economies for infrastructure development and other projects. China has been using these debts as leverage to get control over strategically valuable facilities such as ports, natural resources and land. A textbook example of this can be demonstrated by looking at the Chinese takeover of the Hambantota port in Sri Lanka. Sri Lanka was forced to lease this port for 99-years since it failed to repay the loans credited by the Dragon.

Some commentators suggest that India should get on board with this collaboration with future prospects. and the economic opportunities which lay ahead. Once the inland trade starts there is no stopping it and with it, India may lose its position in exports to its neighbouring countries who (except Bhutan) are all member nations participating in this initiative.

However, it also seems that understanding the cons of completely relying on the Dragon for such collaborations, countries like Bangladesh have to take a step back. It terminated a contract with a Chinese company for a 214 km road project and has decided to develop the Payra port in collaboration with India, Japan and China, thereby not ceding its entire resource to one country.

Liberal theorists argue that Beijing is seeking to create a positive-sum game in which China and India will mutually benefit through increased trade capabilities, stronger financial institutions, and multilateral economic corridors. The main reason for the argument of India cooperating with the OBOR initiative stems from the Indian initiative which has been done until now to counter the BRI. India has been slow in identifying initiating and implementing a fast approach to connectivity in the region to counter China.

The project Mausam, India started (The Indian Express, 2017) and the commitments on building a port in Chabahar and rail-line from the port city towards Afghanistan have been moving at a snail’s pace (Bourse and Bazaar, 2019), Providing connectivity to the north-east through an Indian built port at Sittwe in Myanmar is half-done, as the final road link into Mizoram still needs to be done (Rajiv, 2018), and the partnership of quality infrastructure project, a Japanese initiative on which India joined to counter China still needs to achieve its targets.

However, recent developments suggest that India has actively initiated several infrastructure developments projects which is in line with the “Neighbourhood First” policy. India has collaborated with Myanmar and Thailand for the India-Myanmar-Thailand Trilateral Highway which boosts connectivity, trade and economic ties. (Press Trust of India, 2018) The expenditure data for the year 2016-17 also suggests that 86 per cent of India’s expenditure outlay for Bangladesh, Bhutan, Myanmar and Nepal comprises is for infrastructure development. (Sinha, 2020) Recently, (Press Trust of India, 2018) (Press Trust of India, 2018) (Press Trust of India, 2018) (Press Trust of India, 2018) with the successful trial transhipment of goods to the North-eastern region of India through the Chittagong port has also boosted India-Bangladesh maritime connectivity. (Bhattacharya, 2020)

Apart from this, the ‘Act-East’ policy of India has also led to increased cooperation and coordination with the South East Asian regions. For instance, India and Vietnam have a Comprehensive Strategic Partnership, which is sought to be strengthened further with China’s misadventures in the South China Sea and along the Line of Actual Control (LAC).

Hence, in order to restrain the growth of economic imperialism by China, it is necessary for India to use its soft-diplomacy tool and aggressively posture to the Dragon. Since India has no history of making unwarranted claims over regions and its respect for international law unlike Beijing, India can bolster economic ties with its neighbours and lure allies to counter China’s belligerence.


Baurah, Darshana M. 2018. India's Snswer to the belt and Road: A Road Map for South Asia. s.l. : Carnegie India, 2018.

Bhattacharya, Joyeeta. 2020. Bangladesh: New boost to maritime connectivity with India. South Asia Weekly. 2020, Vols. 13-32.

Press Trust of India. 2018. India-Myanmar-Thailand Trilateral Highway by 2019: Nitin Gadkari. Live Mint. [Online] January 23, 2018. [Cited: September 5, 2020.]

Sinha, Constantino Xavier and Riya. 2020. Land comes in the way of Modi govt’s Neighbourhood First and Act East, study shows. The Print. [Online] August 31, 2020. [Cited: September 5, 2020.]

Wani, Ayjaz. 2020. Invest, Indebt, Incapacitate: Is China Replicating Its ‘Xinjiang Model’ In BRI Countries? s.l. : Observations Reserach Standard, 2020. ISBN: 978-93-90159-81-9.

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