Journal of Indian Studies

Vol. 1, No. 1, January – June 2015, pp. 21 – 36

Importance and Implications of CPEC in South Asia:

The Indian Factor
Shoukat Ali
University of the Punjab, Lahore, Pakistan.

ABSTRACT

CPEC has become an important concern in South Asia with special reference to Pakistan-China
relations. Pakistan and China are very close friends and history shows that both of these countries
helped each other in all circumstances. Currently both of the countries are coming closer again
with the development of China-Pakistan Economic Corridor. China proposed this corridor in
2013 which was accepted by Pakistan later and formally memorandums of understandings were
signed between the representatives of Pakistan and China. CPEC will be beneficial for both
Pakistan and China. It will develop the backward areas of Pakistan like Baluchistan and in return
China will get a straight and shortest road to bring oil from the Middle East. On the other hand,
India is totally against the development of CPEC and putting hurdles in different ways to halt this
corridor at any way. India is speaking firmly against China-Pakistan Economic Corridor at every
forum and trying to derail it politically, diplomatically and through terrorism.
Key Words: CPEC, China, Pakistan, India, Gwadar Port, Xinjiang, Baluchistan

Introduction

21st century is very important era a rapid changing process is taking place on the
globe almost in all spheres of the life. Many unions and organizations are being
made all over the world some of them are economic while others are cooperative.
NAFTA and European Union are the examples of these changing processes.
According to these organizations the member countries cooperate and interact with
one another. The developed countries are already experiencing the benefits and
challenges of these organizations. On the other hand, the developing and the less
developed countries are new born countries in the regard of these organizational
structures (Mariam, 2015).
The developing countries are not bound tightly with the chain of regional
organizations. South Asia is among the less developed regions of the world. There
is only one regional organization South Asian Association for Regional
Cooperation (SAARC). The only organization is not giving fruitful results to the
SAARC countries. There are eight member countries of SAARC Pakistan, India,
Sri Lanka, Nepal, Bhutan, Maldives, Afghanistan and Bangladesh. Out of a few
Nuclear Weapon States (NWS) two nuclear states exist in South Asia. Pakistan
and India are two nuclear weapon states and both are enemies of each other that
oppose each other in any global stage (Xie & Li, 2015).
51 MOUs were signed between Pakistan and China to construct a corridor that
Journal of Indian Studies 21
 Shoukat Ali
will pass through the whole Pakistan from south to north. It will start from Gwadar
and link it to China from Gilgit Baltistan. The corridor is known as China Pakistan
Economic Corridor (CPEC). This economic corridor will connect East Asia, South
Asia and Central Asia. Chinese President Xi Jinping and Pakistani Prime Minister
Nawaz Sharif initiated CPEC. The initial investment of 40 billion U.S dollar was
announced to construct the infrastructure and energy development of CPEC (Xie
& Li, 2015)
There are five major dimensions of China Pakistan Economic Corridor.
Whole of the project is encircled among these five components. These five
components are following (Aqeel, 2016):
 Gwadar (Includes port, city and Gwadar region socio-economic development)
 Energy (Coal, Hydel, Wind, Solar, LNG)
 Transport Infrastructure (Road, Railway and Aviation)
 Investment and Industrial Cooperation (Gwadar Free Zone and other
industrial parks)
 Any other area of mutual interest.

History of China-Pakistan Relations

Pakistan and China are enjoying cordial and friendly relation since 1950. At the
start of bilateral friendship, the relations were not so close as today. The initial
years of Pakistan-China relationship were not so fruitful because both of them did
not know very well each other. But with the passage of time, the time changed and
there was a shift of capitalism and communism in Pakistan. Now China and
Pakistan are all weather friends. China-Pakistan friendship is now considered very
important due to their close relations and especially due to recently launched
project, China Pakistan Economic Corridor (Chaudhri, 1987).China Pakistan
relation were strengthened after the devaluation of Indian currency in 1949. It
impacted on Pakistan’s economy. Pakistan was importing coal that time for its
emerging industry in a new born country. There was no choice except to tie
relations with China. So an agreement was carried out with China on barter trade
of coal for cotton. Further, Pakistan also supported for the permanent seat of China
in Security Council (Arif, 1984).
During Ayub Khan’s era some tussles were created in bilateral relations but
Bhutto handled this situation. Bhutto further played very active role to strengthen
China-Pakistan relations. China also helped Pakistan during 1965 war. This put
these relations on progressive track (Javaid & Jahangir, 2015).After 1970, the
relations of Pakistan and China strengthened in all fields. China has generously
favored and supported Pakistan in technology, economy and the nuclear program.
Pakistan made its nuclear program with special assistance of China. During the
sanction imposed on Pakistan by US, China supported Pakistan. This led both of
the countries to smooth way of relationship. As the result of this long lasting and
reliable friendship, a big achievement is going to be fulfilled in the form of China
Pakistan Economic Corridor.

22 Journal of Indian Studies

 Importance and Implications of CPEC in South Asia: The Indian Factor
Economic History of China and Pakistan

China became trading partner of Pakistan in 1963 but these trading ties continued
to grow with the passage of time. The bilateral trading cooperation continued to
strengthen and today they have become very close partner as both of them provide
trading opportunities to each other (MOF, 2014).Both of the countries are not
involved in the internal affairs of each other and limited to the economic fields and
other such opportunities for each other. The economic activities are evident that
they are taking part into fiscal matters in many fields but the most important
partnership is in diplomatic and political relationship. Now their economic
partnership has further established very close relations between these two nations.
Pak-China friendship is well known in the whole world especially for US and
India. High levels of visits are executed occasionally (Muhammad & Qi, 2015).In
2006, Pakistan and China signed a bilateral Free Trade Agreement (FTA) that
came into effect after a year in 2007. The agreement was in two phases; the first
phase was ended in 2012. After completing the first phase of FTA, the second
phase was started in 2013. The second phases targeted US$ 20 billion of trade
between Pakistan and China. China became second major importing partner of
Pakistan with the rating of 16.17% imports in 2013 (Muhammad & Qi, 2015).
The journey of trade and economic activities that was initiated in 1963
between Pakistan and China continued to grow. After fifty years, this journey has
entered into very progressing and strengthening way that now both of the countries
have become all weather friends of each other. In 2013, further an initiative was
taken between Pakistan and China to improve their economic, diplomatic and
political ties in the form of China Pakistan Economic Corridor. CPEC is a
proposed mega project that will connect Gwadar port (Pakistan) with Kashger
(China). The proposing of CPEC is not very sudden incident rather China had been
curious to improve the infrastructures between Pakistan and China since decades.
In 1982, Karakorum Highway was accomplished to connect Pakistan and China by
road first time. It linked Islamabad (Pakistan) to Kashger (China) through
Kunjerab Pass. The highway continued to face changes with time and continued to
be repaired according to necessities (Ali, 2015).Now Pak-China relationships is
not just based on economic matters rather it has developed and strengthened in all
important fields. Pak-China friendship is considered a counter to US-Indian
friendship. The proof of this friendship is going to be shown in the form of China
Pakistan Economic Corridor. This is the mega project of whole South Asia that is
directly linked with Pakistan and China. CPEC continued despite all hurdles in the
way. India and US put pressure and tried to halt this huge project but all in vain.
This project will further improve relations between China and Pakistan.

Journal of Indian Studies 23

 Shoukat Ali
Detail of CPEC Projects
Projects of China Pakistan Economic
Corridor
US$ 46 billions

Transportation Energy
US$ 12 billions US$ 34 billions

Railway Track
2000 miles
(Kashger to
Gwadar) Pipelines
(Transport oil and
gas to Kashgar )
Widening Koh
Karakaram
Highway

Upgrading Gwadar Iran-Pakistan Gas

Airport Pipeline

Building 125 miles

tunnels linking two
countries
Coal, Wind, Solar
and Hydro energy
plants

Upgrading existing
highways including
Karachi-Lahore

Source: (Irshad, Xin, & Arshad, 2015)

Importance of China Pakistan Economic Corridor (CPEC)

CPEC is important not only for Pakistan but for China as well because it will
physically connect Pakistan and China with trading companies and markets in
Asia, Europe and Africa. China is dependent on the Middle East regarding oil
demand. Almost 80% of China’s oil is currently transported through the Malacca
Strait and the distance of this route is almost 16,000 km. It takes 2-3 months to

24 Journal of Indian Studies

 Importance and Implications of CPEC in South Asia: The Indian Factor
bring this oil. But on the other hand, if Gwadar Port becomes operational it will
reduce this distance to 5,000 km only. After completing this project, the shortfall
of energy sector of Pakistan will be controlled.
China Pakistan Economic Corridor will further strengthen the bilateral ties of
Pakistan and China. It will bring closer the people of both countries. It is about to
provide more opportunities for investment in Pakistan. The Gwadar Port is
formally handed over to China to operate it in a progressive way.
In 2013, Chinese Premier Li Keqiang and other officials visited Pakistan and
proposed an economic corridor that would pass through Pakistan and connect
China. It will help both countries to set on the track of progress. During the visit of
Chinese officials both countries agreed upon the proposed economic corridor to
establish a joint working group between Pakistan and China. According to the
proposed project, Kashgar (China) will be connected with Gwadar (Pakistan).
Later in 2015, Chinese President Xi Jinping visited Pakistan and formally
signed 51 MoUs with Pakistani Prime Minister. Under this project, China is going
to initially invest 46 billion USD. Mainly two spheres were underlined where the
budget will be utilized; infrastructure and energy sector. Three routes will be
developed eastern, central and western to connect Gwadar and Xinjiang. This
project will help both Pakistan and China because China will get a new and
shortest road to bring raw material or oil from Middle East (Changqian, 2015). On
the other hand, Pakistan has innumerable resources but is unable to utilize these
resources. In this way, China will help Pakistan to develop better infrastructure
that will help to set the track of development for Pakistan. It will also help to
establish a progressive way for the betterment of the less developed province of
Pakistan Baluchistan. Gwadar port is situated in Baluchistan that is the largest
province of Pakistan area wise but the least developed due to some factors. Now
the destiny of Baluchistan is going to be changed because the main point of CPEC
is Baluchistan. It will provide jobs, better infrastructure and other valuable
opportunities to the people of Baluchistan that will be very beneficial for both
Baluchistan and Pakistan (Changqian, 2015).
China Pakistan Economic Corridor will be totally financed by China. China
has committed almost 46 billion USD. The uniqueness of this project is that whole
of the project will be financed by the private Chinese companies. China
Development Bank, The Export-Import Bank of China, the Industrial and
Commercial Bank of China are some major financers of CPEC. Major Chinese
Companies are investing in Pakistan in energy sector because the shortage of
energy has become the important issue of Pakistan ((GoP), 2014)
China Pakistan Economic Corridor is the game changer project that will
change the entire shape of trade of China, Pakistan, South Asia, Central Asia,
Africa and even the world. According to proposed infrastructure of CPEC, there
would be built 3000 km network of highways that will link Kashgar Dry Port with
Gwadar Port. The distance between Kashgar Dry Port and Shanghai Sea Port is
5153 km that is being used by China. But CPEC will provide road that is 2800 km
long which is almost half of the above mentioned route (Aqeel, 2016).

Journal of Indian Studies 25

 Shoukat Ali
Projects of CPEC

CPEC is a grand project that includes further many smaller projects. There are
different projects of CPEC like the energy sector, the development of
infrastructure and Gwadar Port etc. Here is a table that shows the distribution of all
major components of CPEC.
Table No: 01 All Major Components of CPEC
S.N PROJECTS US$ MILLIONS
1 Energy 33,793
TRANSPORT AND INFRASTRUCTURE
2 Roads 6,100
3 Railway Networks 3,690
4 Mass transit in Lahore 1,600
5 Gwadar Port 786
6 Others 44
Total 46,013
Source: ((BOI), 2015)
Energy Projects

Pakistan is a developing country and facing many issues. The energy crisis has
become very serious issue for Pakistan. In CPEC, the major priority is given to
energy sector in order to tackle the energy issue. A huge investment of 33,793 US
$ millions is reserved for energy sector. Further, the table below shows the
distribution of different energy projects and its investment.
Table No: 02 Distributions of Different Energy Projects
S.NO PROJECT MW US$
MILLIONS
1 Port Qasim Electric Company Coal Fired, 2X660, 1320 1980
Sindh
2 Sahiwal 2x660MW Coal-fired Power Plant, Punjab 1320 1600
3 Engro thar 2x330MW Coal-fired, Thar, Sindh Surface 660 1000,860
mine in Block II of Thar Coal field,3.8 mtpa.
4 Gwadar Coal Power Project, Gwadar 300 360
5 Muzaffargarh Coal Power Project, Punjab 1320 1,600
6 Rahimyar Khan Coal Power Project, Punjab 1320 1,600
7 SSRL Thar Coal Block 6.5mpta &CPIH Mine Mouth 1320 1,300
8 Quaid-e-Azam Solar Park, Bahawalpur, Punjab 1000 1350
9 Dawood 50MW wind Farm, Bhambore, Sindh 50 125
10 UEP 100MW wind Farm, Jhimpir, Sindh 100 250
11 Sachal 50MW Wind Farm, Jhimpir, Sindh 50 134
12 Sunnec 50MW wind Farm, Jhimpir, Sindh 50 125
13 Suki Kinari Hydropower Station, KPK 870 1,802
14 Karot Hydropower Station, AJK & Punjab 720 1,420

26 Journal of Indian Studies

 Importance and Implications of CPEC in South Asia: The Indian Factor
Total (Priority) 10,400 15,506
CPEC Energy (actively promoted projects)
15 Gaddani Power Park Project
A 4×660MW 2640 7,920
B Jetty + Infrastructure 1,200
C Transmission Line to Lahore and Faisalabad 3,000
16 HUBCO coal power plant, Hub Baluchistan 660 970
17 Chichoki Mallian Combined-cycle Power Plant, Punjab 525 550
18 Salt Range Mine Mouth Power Project, mining, Punjab 300 800
19 Kohala Hydel Project, AJK 1100 2,397
20 Pakistan Wind Farm II (Jhampir, Thatta, Sindh) 100 150
21 Thar mine mouth oracle, Thar Sindh 1320 1300
TOTAL (Actively promoted projects) 6645 18,287
TOTAL ENERGY PROJECTS 17045 33,793

Source: ((BOI), 2015)

Projects of Transport Infrastructure

The second important section of China Pakistan Economic Corridor is the

development of infrastructure. Through CPEC, there are going to be built different
roads in Pakistan from Gwadar Port (Pakistan) to Kashger (China). The
development of infrastructure includes roads, railway lines and extension of
already existing roads and railway lines. The following table reveals the
explanation of infrastructure development.
Table No: 03 Projects of Transport Infrastructure
S.NO PROJECTS KM US$M
1 KKH Phase II (Raikot – Islamabad Section) 440 3,500
2 Peshawar-Karachi Motorway (Multan-Sukkur Section) 392 2,600
RAIL PROJECTS
3 Expansion and reconstruction of existing Line ML-1 1736 3,650
4 Havelian Dry port (450 M. Twenty-Foot Equivalent 40
Units)
TOTAL 9,790

Source: ((BOI), 2015)

Projects Related to Gwadar

Gwadar Port is the main point of CPEC so it is also at the high priorities for this
project. Amount of 786 US $ millions is reserved for the development of Gwadar
port and city. The table below shows the distribution of amount for Gwadar Port.

Journal of Indian Studies 27

 Shoukat Ali
Table No: 04 Projects Related to Gwadar
S.# B Projects Us $ m
1 Eastbay Expressway 140
2 Gwadar International Airport 230
3 Construction of Breakwaters 130
4 Dredging of berthing areas & channels 27
5 Infrastructure for Free Zone & EPZs port related industries 35
6 Facilities of Fresh Water Treatment and Supply 114
7 Hospital at Gwadar 100
8 Technical and Vocational Institute at Gwadar 10
Total Gwadar Ports Projects 786
Source: ((BOI), 2015)
Infrastructure

China Pakistan Economic Corridor is directly linked with the infrastructure that is
proposed to be built in Pakistan. The project started in 2014 and would complete
by 2030. The infrastructure that is to be built the road in Pakistan is named “One
Belt, One Road” that is the extension of China’s 21st century Silk Road. The
projects of CPEC are divided into three main phases. Firstly, the short term
projects are projected to complete by 2017. Secondly, the mid-term projects will
be completed by 2025 and lastly, the long term and final projects are estimated to
be completed by 2030. The overall project is based on the network of the
construction of highways, railways and pipelines to transport oil and gas
(Massarrat & Ayesha, 2015).
During the first phase, the construction will be done on Gwadar Port and the
construction of international airport that will be completed by 2017. The
Karakorum Highway that connects Pakistan with China will also be widened so
that the transportation may be easy to pass. Further, the railway track that connects
Peshawar with Karachi will also be upgraded to fulfill the needs of modern times.
The two countries Pakistan and China have also planned of fiber-optic
communication links.
The infrastructure projects of CPEC have worth of US$ 11 billion. The
Lahore-Karachi motorway of 1100 km will be constructed to connect two big
cities of Pakistan. On the other hand, the Karakoram Highway will be totally
reconstructed to link Rawalpindi and Chinese border (Zhen, 2015). The railway
line of Karachi-Peshawar will also be upgraded so that the trains may travel on the
speed of 160 km/hour. The overall the railway network of Pakistan will also be
extended and upgraded to connect with China at Kashger. A pipeline system for
LNG and oil will also be laid down to transport gas and oil from Iran (Shah, 2015).

Geography of CPEC

CPEC is a mega project that includes the whole Pakistan. It will undertake almost
all of the regions of Pakistan directly or indirectly. This project has proposed

28 Journal of Indian Studies

 Importance and Implications of CPEC in South Asia: The Indian Factor
development in infrastructure and energy sectors in many parts of the country. It
will include the four provinces of Pakistan; Punjab, Sindh, KPK and Baluchistan
and Gilgit-Baltistan as well. There are basically two alignments of CPEC; the
eastern alignment and the western alignment.
Eastern alignment is planned to be constructed first. The eastern alignment is
almost 2800 km long. The Chinese companies are willing to construct eastern line
first as compared to the western. There are many reasons to develop this line first
as it is more secure than the western alignment. The eastern line will pass through
a few areas of Baluchistan, and KPK that will give advantage because Baluchistan
and KPK are more critical provinces in regard of this project. Many senators
complained that many parts of Baluchistan and KPK were excluded from the
proposed eastern. But Ahsan Iqbal the Minister of Planning and Development told
them that the Chinese companies were unwilling to work in those parts due to
security situation.

Source: National Highway Network Pakistan

The eastern alignment initially originates from Gwadar and travels parallel to
Makran Coastel Highway to the east. It passes through interior Sindh and moves to
southern, central and northern areas of Punjab and is connected with Islamabad.
Later from Islamabad it further moves to different districts of KPK like Harripur
Mansehra and Abbotabad. Lastly, it will be connected with Kunjrab passing
through the areas of Gilgit and Baltistan. This corridor will also pass through
Pamir Plateau and Karakoram Mountains. Further a link road form Taxila through
Peshawar will connect eastern alignment to Jalalabad in Afghanistan. The eastern
alignment also designed to link with India through Wahgha Border Lahore,
Hyderabad, Mirpurkhas.
The western alignment is the basic line of China Pakistan Economic Corridor.

Journal of Indian Studies 29

 Shoukat Ali
It was to be built first before the eastern alignment but due to the security issues it
would be built later than the eastern alignment. The western alignment starts form
Gwadar and walks to southern and eastern districts like Khuzdar and Dera Bugti of
Baluchistan and further passes through D.I.Khan in KPK. From D.I.Khan, it
moves to Islamabad and Abbotabad and mixes up with the eastern alignment from
there. The western alignment has also link road like the eastern. It will connect
Afghanistan through the way of Chaman that will later connect Iran through
Quetta-koh-e-Taftan link.

Significance of CPEC for China

Middle East is an important region in the regard of oil. It is estimated that more
than half of the world’s proven oil is reserved in the Middle East. The developed
countries like US and China have a leaning strategy to this part of the world. China
is currently getting oil form the different countries of Persian Gulf. China has to
travel a long distance to bring oil and it also has to pass through many disputed
territories like Strait of Malacca (Cherng, 2013).
Almost 40% of the world’s oil is reserved in the Gulf region and the Persian
Gulf is used to transport this oil to the rest of the world. The hurdles in the
progressive way of China are the involvement of Indian and American activities in
Indian Ocean. China is very curious to complete CPEC as soon as possible
because it would provide it an alternative route to bring raw materials from Middle
East.
China wants to discover an opposite route that will enable it to contact Middle
East, Africa and Europe because these parts are dominant regions in the regard of
trade. CPEC will provide a shorter route for China than the long route that is
currently being used by China. The infrastructure of CPEC will provide
opportunities for the private sectors to participate more with other countries via
Pakistan. It will provide safe and disputed free way for the investors of China
(Irshad & Xin, 2014).

Significance for Pakistan

In 2014, Pakistan signed currency swap with China which made Pakistan the only
South Asian country who initiated such a unique step with China. China is the
second largest trade partner of Pakistan and both are all weather friends. China is
the biggest investor in Pakistan. There are multiple Chinese companies working in
different trading and economic fields in Pakistan. CPEC will prove a game
changer for Pakistan because it will change the entire shape of Pakistan. In the
regards of CPEC Pakistan will get better infrastructure facilities. It will also
provide job and investment opportunities in Pakistan. China Pakistan Economic
Corridor will make Pakistan a trading hub of the world (Memoona, 2014).
Although there are many social and political issues attached with CPEC but it
has numerous benefits both for Pakistan and China. Currently Pakistan is facing
many issues and the most important issue is energy crisis. CPEC will help to solve

30 Journal of Indian Studies

 Importance and Implications of CPEC in South Asia: The Indian Factor
the issue of energy crisis because a huge investment is reserved for energy sector.
This project will provide an opportunity for the Pakistanis to interact the people of
different races and colors. CPEC will improve the infrastructure of the whole
country like roads, railway lines etc.

Implications of CPCE in South Asia

The China Pakistan Economic Corridor is almost 3,000 Kilometers long

transportation corridor between Pakistan and China. It will start from Gwadar
(Baluchistan) and connect Kashgar (China). Both of the governments are very
hopeful to complete this project despite the opposition of many other regional and
global countries. Basically India and U.S.A are not happy about this bilateral
agreement of Pakistan and China. India has not smooth relations with both
Pakistan and China that’s why putting hurdles in the smooth way of CPEC. On the
other hand, US also opposing CPEC indirectly because China in ringing alarms in
the ears of U.S as next super power. Both of them are blaming that this rout is
going to be built for military purposes not for economic benefits only.
The strategic location of Pakistan is very important because it is situated at
such important place that can connect South Asia with Middle East and Central
Asia etc. That is why China is investing such huge amount in this region because
due to CPEC it will get more benefits. It will provide the shortest route to China to
connect with the Middle East (Aqeel, 2016).
In 2015, a historical event took place in Pakistan in the form of CPEC that
will change the entire shape of South Asia as well as the global shape of the trade.
South Asia is the part of third world countries whose member countries are mostly
developing. The developed countries have set up industries here. They bring raw
material here and take the readymade items out of the industries to the most
developed countries where they earn a lot. The China Pakistan Economic Corridor
will change the entire fate of this trading system because there is going to be built
the best infrastructure ever in Pakistan that will connect the different continents by
roads and the movement of raw materials will be more comfortable. In return, the
businessmen of the whole world will be attracted to invest here. The issue of
shortage of energy is going to be handled as according to BBC News report, 15.5
billion US will be invested on coal, wind, solar and hydro energy projects to
control the problem of shortage of energy. It will add 10,400 megawatts energy to
Pakistan’s national energy sector (Massarrat & Ayesha, 2015).
China has many concerns in the return of the investment in the form of CPEC.
Through CPEC China will get access to the Indian Ocean directly while crossing
the territory of Pakistan only. China has already very stable relations with Pakistan
from very start that is the only reason that China is investing such huge amount in
the less developed areas of Pakistan. No doubt Pakistan will also get many
advantages from this huge investment. China is going to invest in Pakistan 20% of
country’s GDP and it is three times of the total direct investment that Pakistan has
received since 2008. This vast investment is much more than US has spent in
Pakistan. CPEC is the part of one belt one route that is planned to connect different
continents through roads. According to Planning Minister Ahsan Iqbal, CPEC is
Journal of Indian Studies 31
 Shoukat Ali
not just a project of two countries rather it is bigger than it. This project will give
benefits to all of the other South Asian and regional states (Aqeel, 2016).

CPEC and US

Pakistan is dependent on US from its inception that the first visit of Prime Minister
Liaqat Ali Khan to US shows that Pakistan was interested in US from very start
and United States of America continued to help and aid Pakistan form initial
stages. However, the calculations of the aid that Pakistan received count $67
billion during 1951-2011. Out of this aid only 30% is proposed on economic
activities and the large share of the amount of aid was invested on security and
military spheres. But on the other hand, China’s investment of 46 billion USD in
very short period of time is bigger than of US and the most important thing is that
this huge investment is directly linked with economic concerns not only with war
and security. CPEC project is directly linked with the development and
infrastructure of the country (Preksha, 2015).
The role of US is neutral regarding CPEC because it has shown neutral
strategy over this project. No clear opposition has been stated by US rather US
State Department has delivered encouraging statements regarding to CPEC.
According to an official of US State Department,
“The plan of corridor is one we very much support
and is aligned with a shared vision of regional
economic connectivity. Fundamentally, we hope that
in the end it will not only be Pakistan and China. We
hope eventually that will include other neighbors as
well, particularly Afghanistan, where we and Chinese
are also making common efforts” (Malik, 2015).

CPEC and Indian Factor

South Asia is at the choke point of the world attention since last a few years
because a plenty of the developmental work is going to be done in this region.
Two important ports are being prepared in this region. Gwadar Port is existed in
Pakistan and being operational by China that is predicted to change the destiny of
Pakistan and will be fruitful for China as well. On the other hand, India that has
not stabled relations with Pakistan and China is going to work at Chabahar Port in
Iran. The amount that is being used at this project is very short as compared to
Gwadar’s investment. India wants to prove herself as a competitor of Pakistan and
China at any cost (Ayaz Ahmed, 2015).
India is one of the largest trading partners of China. Both of the countries have
closeness and issues as well. They cooperate diplomatically with each other. But
with the construction Gwadar Port India is not happy. India has many concerns
over CPEC. To India, China will further dominate in South Asia and Indian Ocean
as she will be able to have great influence over the waters of Indian Ocean. It will
also affect the importance of India with the regard of trading route because CPEC
will diminish the Indian dominance over China (www.pakistantoday.com.pk).

32 Journal of Indian Studies

 Importance and Implications of CPEC in South Asia: The Indian Factor
Chabahar is only Iranian port that opens to the side of Indian Ocean. It is
located in the south eastern side of Iran. Recently India is establishing very close
relations with Iran due to its strategic importance. India is going to invest a
considerable amount on this port in order to get access to the other countries of this
region because it will open gates for India to interact with Afghanistan, Central
Asia, Turkey and Eastern Europe. Indian Prime Minister visited Iran on 23 May,
2016. During his visit to Iran, Modi signed 12 agreements with the Iranian
counterpart Rohani. On the other hand, a trilateral agreement was also signed
among India, Iran and Afghanistan in which India decided to invest $500 million
on the construction of Chabahar Port (Areeba. A, 2016)
Chabahar Port is being perceived as the counterpart of Gwadar Port of
Pakistan. India is very curious to complete the investment that has been decided by
agreements as soon as possible. Both countries India and Iran have signed MoUs
to increase their bilateral trade up $30 billion. The numbers of flights between
these both countries are also going to be increased to strengthen the air services
between both countries. India and Iran are also planning to cooperate through the
navies of both countries (Khalid & Anam, 2015).
During his recent visit to China, Modi spoke clearly against the construction
of CPEC that is passing through Azad Jammu and Kashmir that is a disputed
territory between Pakistan and India. Modi also stated firmly that India will use
any strategy to halt the development of China Pakistan Economic Corridor at any
cost. It clearly shows that the construction of Gwadar Port and development in
whole Pakistan is not being digested by India. India wants to stop this
developmental project while using any tactics (Saima. A, 2016).
Apart from the political agenda of Indian government, the special intelligence
cell of India Research and Analysis Wing is also planning to put hurdles in the
smooth ways of CPEC. RAW is investing a specified amount to break the chain of
construction of this mega project. This amount is going to be used in terrorist
activities and other miscellaneous efforts that may generate a streak of discomforts
between china and Pakistan (Imtiaz Ahmad, 2016).
In the light of all above references, it is estimated that India as an enemy of
Pakistan is not comfortable with the developmental projects of Pakistan. The
Indian government and intelligence agencies are playing their distinct role to derail
the project of CPEC because it is perceived as a game changer of this region.
Through CPEC India is feeling a sense of xenocenterism because she wants to be
superior in South Asia but the importance of CPEC will attract whole of the
attention of world. CPEC will become the reorganization of South Asia.

Security Concerns

There are many security threats attached with CPEC. This project has become a
serious issue for some countries especially India because it will further strengthen
Pakistan-China ties. It will provide development and better infrastructure for both
Pakistan and China. So, some hidden forces are disturbing this mega project. There
cannot be any conspiracy in any part, if the enemy does not find the internal
assistance. The external forces can perform terrorist act if there is the involvement
Journal of Indian Studies 33
 Shoukat Ali
of internal factors. So both China and Pakistan are not out of this phenomenon. In
both of the countries there are regions attached to this project that are least
developed like Baluchistan in Pakistan and Xinjiang in China. In both of these
regions there are some internal forces that give advantage to the external forces to
perform some harmful activities to stop this project any way.
Since the incidence of 9/11, Pakistan is at the hit list of terrorist attacks. There
are multiple outfits attached to different criminal and terrorist activities in
Pakistan. Karachi and Peshawar are the two most affected cities of Pakistan
targeted by the terrorist attacks. In accordance to all these incidents the security
situation is very concerning about China Pakistan Economic Corridor. Both China
and Pakistan are agreed to help in almost all spheres of life like infrastructure,
technology and security issues. Pakistan is using military for the sake of security
of CPEC (Jawad, 2014). But despite all of the surety, there are multiple terrorist
groups that may harm this mega project of the South Asia. Some of these outfits
are East Turkestan Islamic Movement (ETIM), Tehreek-e-Taliabn Pakistan (TTP),
Laskar-e-Jhangvi (LeJ), Balochistan Liberation Army (BLA), Balochistan
Liberation Front (BLF) and other militant group of some political parties. There
are some militant groups created by some political parties because they use them
for their own purpose. These pressure groups are used during election days
importantly because they are used as a pressure group; there are some motives
behind the creation of these groups because they want to fulfill some purposes
(Jawad, 2014).
There are some countries in the world that strongly oppose Pak-China
friendship and they are busy in some illegal activities to harm or break this
friendship because these both countries are very close together. Security concerns
are not only related to internal factors only but there are some external factors also.
India the bitter enemy of Pakistan is busy to halt any progressive project of
Pakistan at any cost (Bhutta, 2015). The intelligence agency RAW is very active in
this regard. RAW continues to send its agents to destabilize the functioning
process of any developmental project in Pakistan. On the other hand CIA and
MOSSAD are also against both China and Pakistan. CPEC in the biggest ever
project of South Asia. Pakistan will get huge benefits along with China because it
will make Pakistan strategically very important in world. One belt one road is
going to attract the attention of the whole world. Recently a RAW agent
Kalbhoshan Yadve was arrested by Pakistan who revealed that he belongs to RAW
and came for planning to perform terrorist activities in Karachi and so on. On the
other hand, the agents of RAW are now directly hitting the Chinese nationals to
disrupt the stable relations between these both countries (Bhutta, 2015).

Conclusion

CPEC is the game changer that will change the entire destiny of Pakistan and
China and it will marvelously affect the South Asian countries. Both of the
countries Pakistan and China are committed to complete it smoothly. But as it has
been mentioned above that there are also many issues and problems attached to
this project. Both of the governments have to show strong commitment to execute

34 Journal of Indian Studies

 Importance and Implications of CPEC in South Asia: The Indian Factor
this project despite so many hurdles. The Pakistani Government has to initiate
some strong steps to tackle different security, political, regional and provincial
issues. The Government of Pakistan has to achieve the political consensus at any
cost because the political collaboration only can insure the accomplishment of
CPEC. On the other hand, the Chinese Government has also to take some steps to
control the ethnocentric groups of Xinjinag that are also involved in terrorist
activities.

References

(BOI), B. o. (2015). Board of Investment Pakistan (BOI) . Retrieved from

http://boi.gov.pk/Home.aspx/CPEC Portfolio of investment
(GoP), G. o. (2014). Ministry of Foreign Affairs.
(MoF), M. o. (2014). Pakistan Economic Survey 2013-2014. Retrieved from
<http://finance.gov.pk/survey/chapters_14/08_Trade_and_Payments.pdf>
Ali, G. (2015, April 15). China and Pakistan prepare to establish economic corridor. Central
Asia-Caucasus Analyst.
Aqeel, M. (2016). Impact of China Pakistan Economic Corridor,. BBA International
Business thesis.
Arif, K. (1984). Documents on China-Pakistan Relations. Lahore: Vanguard.
Bhutta, Z. (2015, August 31). India bid to halt Pakistan projects fails. . The Express Tribune
.
Changqian, M. (2015). Research On Employment Opportunities Under The Framework Of
China Pakistan Economic Corridor,. Proceedings of International Conference on
CPEC (2015). Lahore: GC University.
Cherng, S. O. (2013). The Sino-Pak Trade and Energy Corridor- An Assessment,. 8th Pan-
European Conference on International Relations. Warsaw Economics University.
Dixit, A. (1987). Sino-Paki Relations and Their Implications for India. Strategic Analysis,
11(9), 1067-1080.
fmprc.gov.cn, . (2003). Retrieved Accessed 18 Jan. 2016, from China-Pakistan Joint
Declaration:
http://www.fmprc.gov.cn/mfa_eng/wjdt_665385/2649_665393/t40148.shtm
Irshad, M. S., & Xin, Q. (2014). A New Perspective of the China- ASEAN Free Trade Area
and the Story of Top Ten Products, . European Journal of Business and Management,,
18(18), 1-8.
Irshad, S., Xin, Q., & Arshad, H. (2015). One Belt and One Road: Dose China-Pakistan
Economic Corridor Benefit for Pakistan's Economy? Journal of Economics and
Sustainable Development, 6(24).
Javaid, U., & Jahangir, A. (2015). Pakistan-China Strategic Relationship: A Glorious
Journey of 55 Years. JSRP, 52(1), 157-183.
Jawad, F. (2014). CPEC: Internal Significance and Challenges. Retrieved from
www.stratagem.pk/strategic-pulse/cpecinteranl-significance-and-challenges
Malik, R. (2015). All-Weather Friendship The Diplomatic Insight. The Diplomatic Insight,
15(5), 8.
Massarrat, A., & Ayesha, A. (2015). CPEC: Challenges and Opportunities for Pakistan.
16(7).
Memoona. (2014). The growing economic ties between Pakistan and China and its impact
on the economy of Pakistan, . International journal of research in humanities, arts and
literature,, 2(12), 49-54.
Ministry of Foreign affairs, . (2014). Government of Pakistan.

Journal of Indian Studies 35

 Shoukat Ali
Muhammad, S. I., & Qi, X. (2015). Rising trend in imports and exports of Pakistan’s FTA
partners in recent years. Academic Research International,, 6(4).
Preksha, S. C. (2015). Political And Economic Dynamics Of CPEC Within The Larger
Framework Of China’s One Belt, One Road Initiative. Proceedings of International
Conference on CPEC (2015). Lahore: GC University.
Shah, S. (2015, December 6). China to Build Pipeline from Iran to Pakistan. The Wall
Street Journal.
Sial, S. (2014). The China-Pakistan Economic Corridor: An Assessment of Potential
Threats and Constraints.,. Conflict and Peace Studies, 6(2), 24.
Xie, X., & Li, J. (2015). Research On Employment Opportunities Under The Framework Of
China Pakistan Economic Corridor, . Proceedings of International Conference on
CPEC (2015). Lahore: GC University.
Zhen, S. (2015, December 11). "Chinese firm takes control of Gwadar Port free-trade zone
in Pakistan". South China Morning Post. .

Biographical Note
Shoukat Ali is Ph.D. scholar at Centre for South Asian Studies, University of the
Punjab, Lahore, Pakistan.
_______________________________

36 Journal of Indian Studies