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Asian Century: Should India Join the Belt and Road Initiative?
07.31.2024
India faces a complex decision on whether to join China’s Belt and Road Initiative.
The Belt and Road Initiative (BRI), hailed by Chinese President Xi Jinping as the “Project of the Century,” is a cornerstone of China’s foreign policy, central to its vision for a new world order in the so-called “Asian Century.” Despite facing substantial criticism, particularly from Western nations, the BRI has significantly bolstered China’s diplomatic and geopolitical influence, especially across the Global South. Amidst evolving geopolitical and economic landscapes, China is recalibrating its ambitions, focusing more on green initiatives and smaller-scale development projects. The success of China’s broader initiatives, such as the Global Security Initiative and the Global Development Initiative, hinges closely on the outcomes of the BRI.
India’s stance on joining the BRI is a subject of considerable debate, given the initiative’s potential benefits and strategic implications in the evolving Asian geopolitical context. The relationship between China and India is marked by a complex interplay of cooperation, competition, and occasional confrontation, spanning economic, political, and military domains. As two of the world’s most populous and rapidly developing countries, the dynamics between these nations are crucial not only for their own futures but also for the broader geopolitical landscape, particularly as the world anticipates the dawn of the “Asian Century.”
Economically, China and India are major trading partners, with China being one of India’s largest. However, this relationship is characterized by a significant trade imbalance. In 2024, bilateral trade reached approximately $118.3 billion, with Chinese exports to India comprising over $101.7 billion of this total. This disparity has raised concerns within India about the sustainability of such an economic relationship. Nonetheless, Chinese companies have made substantial investments in various Indian sectors, including technology, infrastructure, and manufacturing. Conversely, Indian firms are increasingly penetrating the Chinese market, seeking to tap into its vast consumer base. As the global economic focus shifts towards Asia, the economic interactions between these two giants will play a pivotal role in shaping the region’s economic landscape.
India’s economy continues to grow impressively, with a GDP growth rate of around 7% in 2022, positioning it as one of the fastest-growing major economies worldwide. Meanwhile, China’s economy, despite recent slowdowns, remains robust, with a GDP growth rate of approximately 3% in 2022. Both nations are integral to the global economy, collectively contributing significantly to global GDP. In terms of purchasing power parity, China ranks as the world’s largest economy, with India following closely as the third, underscoring their significant roles in the global economic order.
Politically and strategically, the relationship between China and India is equally nuanced. The longstanding border disputes occasionally escalate into skirmishes, with the most notable recent clash occurring in Ladakh’s Galwan Valley. Additionally, both nations are engaged in a broader contest for regional influence. The BRI is a critical element in this contest, as it seeks to expand China’s economic and strategic footprint across Asia and beyond.
The BRI is an ambitious infrastructure and economic development project spearheaded by China, aiming to enhance global trade and stimulate economic growth through extensive investments in infrastructure projects like roads, railways, and ports. The initiative promises to create new economic corridors and foster deeper economic integration among participating countries. As the global economy continues to recover from the disruptions caused by the COVID-19 pandemic, initiatives like the BRI are seen as vital for reinvigorating growth and connectivity.
India’s decision on whether to join the BRI is complex, requiring a careful balance between economic potential and strategic caution. On one hand, the BRI offers significant opportunities for infrastructure development, economic integration, and investment, which could spur India’s growth and enhance regional connectivity. However, the involvement of the BRICS alliance, which includes Brazil, Russia, India, China, and South Africa, complicates the decision further. While BRICS aims to foster economic cooperation and development among its members, India’s participation in the BRI could shift the balance of influence within the group, potentially enhancing China’s leverage. Therefore, while the economic benefits are clear, India must weigh these against the potential long-term impacts on its national interests and its position within BRICS.
India views the BRI as a strategic tool for China to expand its geopolitical influence, raising substantial reservations about joining the initiative. While the economic benefits of participating in the BRI are apparent, the strategic concerns are equally significant. India’s decision on whether to engage with the BRI will require a careful balancing act, weighing immediate economic gains against long-term implications for its national interests and regional influence. As these two Asian giants navigate their complex relationship, the outcomes will have profound implications for their future trajectories and the broader global order. In the context of the emerging “Asian Century,” the relationship between Beijing and New Delhi will significantly shape the economic and geopolitical contours of the region and beyond.
Mirza Abdul Aleem Baig is CAS-TWAS President's Fellow at University of Science and Technology of China (USTC).