BAKU – Realpolitik depends on the ability to exploit every available option without the constraint of ideology. India and China have been fighting like cats and dogs over influence in Asia. Both are trying to corner markets, but in the past decade, China has gained the upper hand with its economic projects along the Eastern Hemisphere. India might be a large trading partner in its own right, but China’s Belt and Road Initiative has fuelled fears of encirclement. Now, India is taking the bull by the horns and launching several ambitious commercial corridors in all directions. If successful, the blueprint could reconfigure trade across the region. India would transform into a pillar of the globalized economy, giving it economic influence and political say. It is a grand strategy of enormous geopolitical weight.
North-South Transport Corridor
Since joining the World Trade Organisation in 2001, China has sought for ways to reinvent regional connectivity in Eurasia. The best-known example of this policy is the Belt and Road Initiative, which contains two components. The overland corridor consists of a cluster of Chinese-constructed rail and road infrastructure that extends westwards from Central Asia towards Europe. Some are calling it the New Silk Road. The second component is a maritime route that consists of Chineseconstructed ports that spread westwards across the Indian Ocean. Chinese lawmakers call it the String of Pearls.
Connectivity projects are often seen as tools for exercising influence, which is why the Belt and Road Initiative bypasses India as a means of marginalizing the competition. In fact, some of the projects, such as the Karakoram Highway, Gwadar Port, and the ChinaPakistan Economic Corridor, outright relegate India from entering the markets in Central Asia.
It’s fair to say that the Belt and Road Initiative strengthens Beijing’s hand while undermining New Delhi’s sway over its neighbours. The fear is that the new ports, highways, and railways could one day aid China in the event of a military conflict, and when looking at the map, it’s not difficult to imagine that India is being encircled by China. That is unacceptable.
India’s answer is the International North-South Transport Corridor. First signed in September 2000, the corridor looks to develop India’s connectivity in reaching European markets. Starting at Mumbai, a multi-modal route would link with the Iranian port at Bandar Abbas. From there, rail infrastructure would link to Baku, Azerbaijan, and then to Astrakhan in Russia. The corridor would go further still to Moscow and finally resting at Saint-Petersburg. With a length of 7,200 kilometres, the North-South Transport Corridor would stop at various hubs, creating value chains in the process. For clarification, value chains are commercial corridors where large infrastructure investments are coupled with an industrial base. So, a route going from point A to point B steadily develops additional hubs within those two points, creating a dynamic manufacturing belt that stretches nations and regions.
In 2014, a trial was conducted. It revealed that the North-South Transport Corridor is 40 per cent faster and 30 per cent cheaper than the traditional maritime route going through the Suez Canal and the Mediterranean Sea. The distance between Mumbai and Moscow would be reduced from 16,000 kilometres to a little over 7,000 kilometres.
Everything about the North-South Transport Corridor is revolutionary in terms of international trade. The trouble, however, is Iran. Being a mountainous country means that the Iranians are lagging on rail infrastructure. There are still places that need overhauling. This wouldn’t be a problem were it not for the fact that Iran is under international sanctions, making economic collaboration difficult and risky. India has spent two decades tweaking and adjusting the technical aspects of the corridor, but it has made no headway whatsoever. As long as Iran is beset by sanctions, the North-South Transport Corridor will remain a questionable venture.
If at first you don’t succeed
In 2014, India came up with a more modest policy called Neighbourhood First. The aim was to resolve India’s differences with its smaller neighbours, thereby curbing China’s influence in the region. New Delhi opened its chequebook and extended generous lines of credit, commercial contracts, and foreign aid. Bhutan, for instance, received a sum of about 350 million in foreign aid in 2019. There was some success in the early phase of the program, but those advances have reversed over the years. The Maldives, Sri Lanka, Nepal, and Bangladesh have, in fact, grown closer to China. Ironically, Afghanistan was the only real success story in the Neighbourhood First policy, but every ounce of Indian influence dissolved with the Taliban’s takeover.
The lack of success compelled India to take on a new grand strategy in 2017, this time teaming up with Japan. The project, dubbed as the Asia Africa Growth Corridor, was the brainchild of Prime Ministers Narendra Modi and Shinzo Abe.
The idea was to link India with Africa through new shipping lanes. India has strong ties with Southeast Africa through trade and diaspora, and Modi has visited nearly every country in Africa during his political career. So, the plan made sense and served a strategic motive. However, the Asia Africa Growth Corridor was designed as a bottom-up process. Its blueprint held no concrete implementation plan. Even the African nations that were supposed to partake in this corridor were never disclosed. As of 2021, there has been no progress regarding the corridor. In point of fact, the stunning lack of progress leads many to believe that the whole project was merely a PR-stunt to bolster Indian-Japanese relations on a political level. Business-wise, the Asia Africa Growth Corridor can be considered dead on arrival. Neither Indian nor Japanese lawmakers even bring it up.
Thus far, with the North-South Transport Corridor being frozen, the failure of the Neighbourhood First policy, and the PR-stunt of the Asia Africa Growth Corridor, it seems like India has been grasping at straws. But, if at first you don’t succeed, try, try again.
India’s latest commercial belt is aiming for Europe, and it seems to be more practical than previous programs. Coined as the Arab-Mediterranean Corridor, the project looks to connect India to European markets via the existing road and rail infrastructure in the Middle East. In a policy report published by the Institute of South Asian Studies at the University of Singapore, Professor Michael Tanchum examines a paradigm shift in India’s Eurasian connectivity.
It’s a plan that was unthinkable just a few years ago. The game-changer is Israel’s recent normalization with its Arab neighbours. Rail connection is being established at a rapid pace, going from the ports in the United Arab Emirates to Saudi Arabia and Jordan to the Israeli port city of Haifa. From the Israeli coast, goods will be shipped across the Mediterranean to Piraeus, Greece, and from there further inland into continental Europe.
India’s goal is to tap into that emerging corridor and develop an arc of commerce extending from India to the UAE, Saudi Arabia, Jordan, Israel, Greece, all the way to Germany. The interesting thing is that India wouldn’t be alone in reconfiguring the ArabMediterranean Corridor; it would merely have to extend the belt from Abu Dhabi to Mumbai. Most of the infrastructure for this corridor is already in place. The UAE has several ports that can serve as connectivity nodes, and much of the railway network going to Israel is complete; only about 300 kilometres remains to be built in Jordan and Saudi Arabia. Once the Arab-Mediterranean Corridor is operational, Indian goods leaving Mumbai could arrive on the European mainland in as little as ten days.
But, it isn’t just Europe that would be the main destination. By linking into the existing infrastructure, India can help develop value chains along the corridor. India’s giant agricultural sector could emerge as an indispensable force in the regional supply and demand. To give some context, climate change is expected to affect the Middle East drastically in the coming decades. The region is warming at twice the global average. By 2050, there will be prolonged periods of heatwaves, desertification will accelerate, and droughts will last longer. Food and water will become scarce, precious commodities. India, being the fourth largest agricultural producer, could step up as the food basket of the Middle East.
Already, plans are set in motion. India is set to invest roughly 7 billion USD in creating new mega food parks, and it is working closely with Israel to enhance agricultural output. India has also signed a comprehensive strategic partnership with the United Arab Emirates, promising to boost bilateral trade by 60 per cent and new infrastructure investments worth up to 75 billion USD. That’s a hefty sum. Meanwhile, Emirati-based companies are currently constructing and acquiring new ports along the perimeters of the Indian Ocean. So, while the Arab-Mediterranean Corridor looks primarily at the markets in Europe, the agonizing situation in the Middle East opens new avenues for commerce.
However, as exciting as the Arab-Mediterranean Corridor sounds, there is a catch. Foremost, the plan is a geopolitical minefield. Going into business with Saudi Arabia and Israel would harm relations with Iran and inject India into the intricate power plays of the Middle East. It would be like putting the cat among the pigeons. Furthermore, the Greek port of Piraeus is owned by COSCO Shipping, which is a Chinese stateowned conglomerate. So, if India plans to counter China by creating alternative routes to Europe, going through Piraeus is a bad call. That means in the long run, India will either have to construct a port of its own somewhere in the Eastern Mediterranean or acquire an existing port, or possibly even diversify its export nodes. Still, in spite of the complications, an arc from India to the Middle East and Europe is a sensible, practical course of action. India cannot change China’s influence by fighting the existing reality. To introduce change, one must design a new configuration that makes the existing reality obsolete.
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- India’s Answer to the Belt and Road: A Road Map for South Asia by Darshana M. Baruah (Carnegie India, August 2018) https://carnegieindia.org/2018/08/21/india-sanswer-to-belt-and-road-road-map-for-southasia-pub-77071
- The Suez Canal Blockage Has Incentivized Multimodal Transshipment Development Throughout Russia (Russia Briefing, June 2021) https://www.russia-briefing.com/news/thesuez-canal-blockage-has-incentivizedmultimodal-transshipment-developmentthroughout-russia.html/
- India and Russia To Connect Supply Chains Via Iran’s INSTC (Silk Road Briefing, March 2020) https://www.silkroadbriefing.com/news/2020/0 3/24/india-russia-connect-supply-chains-viairans-instc/
- UAE $10b Israel fund will stress ports and railways (Globes, March 2021) UAE $10b Israel fund will stress ports and railways – Globes https://en.globes.co.il/en/article-uae-10b-israel-fund-will-stress-ports-and-railways-1001363975
- Asia–Africa Growth Corridor at the crossroads of business and geopolitics (East Asia Forum, November 2018) https://www.eastasiaforum.org/2018/11/08/asi a-africa-growth-corridor-at-the-crossroads-ofbusiness-and-geopolitics/
- Launch of Asia Africa Growth Corridor Vision Document (Asia Africa Growth Corridor, May 2017)
- Overview of India’s Development Partnership (Ministry of External Affairs – Government of India)
- Indian Development Cooperation Regions Momentum: 7 Main Take-Aways From India’s 2019-20 Union Budget (Centre for Policy Research, July 2019) https://cprindia.org/sites/default/files/IDCR_7% 20Main%20Take-Aways%20from%20India%E2%80%99s%20201920%20Union%20Budget_30%20July.pdf
- This Is How India Plans to Keep Its Neighbors Away from China’s Influence (The National Interest, September 2019) https://nationalinterest.org/blog/buzz/howindia-plans-keep-its-neighbors-away-chinasinfluence-80411
- Grading India’s Neighborhood Diplomacy (The Diplomat, January 2018) https://thediplomat.com/2017/12/gradingindias-neighborhood-diplomacy/
- India’s Arab-Mediterranean Corridor: A Paradigm Shift in Strategic Connectivity to Europe by Michaël Tanchum (Institute of South Asian Studies, National University of Singapore, August 2021)