CHINA-PAKISTAN ECONOMIC CORRIDOR (CPEC)

2.1. Objectives of CPEC

• CPEC aims to enhance economic cooperation between China and Pakistan by promoting trade, investment, and economic growth.
• It seeks to strengthen the economic ties between the two countries.
• Pakistan faces chronic energy shortages, and CPEC addresses this issue through the development of energy projects, including coal, hydro, and solar power plants.
• These projects are vital for meeting Pakistan's growing energy demands.
• CPEC includes the construction of new highways, railways, and pipelines.
• This improved infrastructure is essential for facilitating the movement of goods and people, reducing transportation costs, and promoting regional connectivity.

2.2. Components of CPEC

• Gwadar Port is a central component of CPEC. It is located in Balochistan and is being developed into a deep-sea port and regional trade hub.
• Gwadar's strategic location provides China with access to the Arabian Sea, which is significant for its maritime trade.
• CPEC involves the construction and upgrading of transportation networks.
• This includes the development of the Karakoram Highway, the construction of the Gwadar-Ratodero Motorway, and the expansion of railway lines connecting Gwadar to China's western regions.
• Energy infrastructure is a critical part of CPEC. Several power projects, including coal-fired, hydroelectric, and solar power plants, are being developed to address Pakistan's energy deficit.
• These projects enhance energy security and promote economic development.
• CPEC envisions the establishment of Special Economic Zones in various regions of Pakistan.
• These SEZs are designed to attract Chinese and other foreign investors by offering tax incentives, infrastructure, and a conducive business environment.

2.3. Strategic Significance

• CPEC offers China a shorter and more secure route for its energy imports from the Middle East, reducing its reliance on the longer sea route through the Strait of Malacca.
• This enhances China's energy security, a vital consideration for its economic growth.
• China's investments and presence in Pakistan through CPEC strengthen its geopolitical influence in South Asia.
• It provides Beijing with a stake in the region's stability and development.
• Gwadar Port gives China access to the Arabian Sea and the Indian Ocean, enabling it to bypass potential chokepoints in the South China Sea.
• This has implications for China's naval presence in the Indian Ocean.

3. Impact on India

• CPEC has been a source of significant geopolitical tension between India and Pakistan.
• A portion of CPEC passes through Pakistan-administered Gilgit-Baltistan, which India claims as part of its own territory.
• India views this as a violation of its sovereignty and has protested against the project, further straining Indo-Pak relations.
•  India perceives CPEC as part of China's broader strategy to encircle India by strengthening its presence in neighbouring countries.
• This perceived encirclement has led to increased security concerns for India.
• To counterbalance China's influence in the region, India has pursued its own regional connectivity initiatives.
• These include the International North-South Transport Corridor (INSTC) and the Chabahar Port project in Iran.
• India is also deepening its engagement with other South Asian countries to maintain its influence.
• India is concerned about the security implications of CPEC. The corridor passes through regions of Pakistan that have experienced instability and terrorism, raising fears that extremist elements could target CPEC infrastructure.
• CPEC's potential to boost Pakistan's economy and its strategic location as a trade corridor poses economic challenges for India.
• It has the potential to divert trade away from India and impact India's economic interests in the region.
• India has engaged in diplomatic efforts to voice its concerns about CPEC on various international platforms.
• However, these efforts have yielded limited results, as many countries have chosen to engage with CPEC due to its economic potential.

4. Way forward

• The China-Pakistan Economic Corridor (CPEC) has far-reaching implications for India, affecting both its geopolitical and economic interests.
• India's concerns about sovereignty, security, and the economic impact of CPEC have led to a complex and challenging dynamic in its relations with both China and Pakistan.
• As CPEC continues to evolve and shape the regional landscape, India will need to carefully navigate these challenges while seeking to protect its own interests and explore alternative avenues for regional cooperation and connectivity.