India bid to halt Pakistan projects fails

Besides China, Islamabad should also focus on Central Asia

ISLAMABAD: In the current year, there have been some major developments on the trade and investment front. Among these, the friendship between Pakistan and China has entered a new phase of expanded cooperation as Beijing pledges investment of $46 billion in building an economic corridor.

According to the plan, Pakistan may become a trade hub in the region after Gwadar Port starts functioning fully and duty-free economic zones are set up. Many Central Asian states have also expressed interest in becoming part of the corridor.

This strategic partnership between Pakistan and China has upset India that openly voiced its opposition and even premier Narendra Modi pressed the president of China during a visit to Beijing to drop the plan of developing the corridor. However, China did not cave in to the pressure and vowed to push ahead with work on the project.

This prompted India to find new strategic partners in the region, which took Modi to the United Arab Emirates (UAE). Recently, Pakistan’s relationship with the UAE has been affected by the former’s refusal to send troops to fight alongside Saudi and UAE forces with Houthi fighters in Yemen. Now, India and UAE appear to have become new strategic partners in the region.

Read: China defends CPEC, hits out at India's oil exploration bid: report

The other major development of the year is a nuclear deal between Iran and global powers, which forced Gulf Arab states like the UAE to search for new strategic partners and India seems to be an obvious choice.

During Modi’s visit in mid-August, India and the UAE were able to establish an infrastructure investment fund, with the aim of reaching the target of $75 billion, to support investments in the rapid expansion of next-generation infrastructure in India, especially railways, ports, roads, airports, industrial corridors and parks.

Also, they agreed to facilitate the participation of Indian companies in infrastructure development in the UAE and promote strategic partnership in the energy sector.

Strategic alliances

Saudi Arabia and the UAE, which are old rivals of Iran in the Middle East, feel that Pakistan has made Iran a strategic partner. The UAE may be thinking that it has given a strong message to Pakistan by entering into a strategic alliance with India, but it must realise that Delhi has multiple choices available and it will not sever relations with Tehran, which has been a major oil supplier.

Observers feel India is trying to send across a message that it is not lagging behind and in response to the $46-billion China-Pakistan Economic Corridor (CPEC) project, it has won promise of $75-billion injection from the UAE.

India is also not happy with the handing over of Gwadar Port development and its operations to China. There have long been reports that Delhi is fuelling insurgency in Balochistan, which is rich in oil and gas resources, but poor law and order conditions have halted work on exploration activities there. Experts believe the India-UAE nexus will try to fail the Gwadar Port development project and create hurdles in the way of exploration activities in Balochistan.

The Government of Pakistan should frame such policies that mainly focus on trade and investment partnerships.

Read: China-Pakistan Economic Corridor 'unacceptable', Modi tells China

Exports from the country have declined and measures need to be undertaken to search for new trade partners in Central Asia. Only Russia has the potential to export food products valuing billions of dollars, but quality issues arise.

It is time to focus on the agriculture sector as the world has a lot of potential to absorb food commodities. Following the lifting of sanctions from Iran in the wake of the nuclear deal, it would be a big market for Pakistan. We have no significant technology-based products to ship to overseas markets but have agricultural goods, which may be a huge source of foreign exchange earnings.

The writer is a staff correspondent

Published in The Express Tribune, August 31^st,  2015.

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