The ministry is believed to have informed a Parliament panel that India is following a “demand driven process”... Read More

(This story originally appeared in on Aug 29, 2018)

(This story was originally published in the Economic Times on 29/08/2018.)

It will be suicidal for India to match China “port for port and airport for airport” in the region as that would mean entering into a USSR-US like arms race of the 1970s, besides pushing neighbouring nations into a debt trap, the ministry of external affairs believes.

Explaining China’s ‘One Belt One Road’ ( OBOR ) initiative and infrastructure projects in the region, the ministry is believed to have informed a Parliament panel that India is following a “demand driven process” which is agreeable to the partner nation as well.

Arguing that if compared project to project, China would show India “awfully behind” but that would not be the correct way to judge efforts. The ministry is learnt to have told the panel that efforts are made to find financially viable projects for friendly countries.

Unlike the Chinese approach, India believes that it is offering a mix of loans and grants to execute projects that are identified and politically agreeable. In the face of fast paced Chinese development, moderation can be achieved by stepping up slowly and delivering fewer projects on time.

The ministry is believed to have informed the panel that the OBOR initiative is not “as innocent as it appears to be” and that financially unviable projects are pushing nations into debt. Taking the example of Bangladesh, the panel is learnt to have been told that in 2016, China proposed $23 billion to the country but as a commercial loan which was not even subsidised.

The Hambantota port example of Sri Lanka has also been discussed. On India’s plans in Bangladesh, the panel is believed to have been informed that till three years ago, India had committed projects worth $800 million, a figure that has gone up ten times now to $8 billion.

The external affairs ministry is believed to have told the panel that there is now a sharper sense of the dangers of China and nations are seeing Chinese ships even in places where Chinese ports did not exist. Identifying neighbourhood connectivity as part of the process to counter Beijing’s growing influence, the ministry has identified the $500-million line of credit to Vietnam for defence purchases as an example.

India believes that nations in the region are realising a key difference that there is a big gap between what has been promised by China as part of OBOR and what will actually be taken up by the government.

