BRI taxation framework worsens threat for India

Panama’s recent withdrawal from China’s Belt and Road Initiative (BRI) amid United States (US) pressure over Chinese proxy control of the Panama Canal underscores the geopolitical tensions surrounding Beijing’s flagship infrastructure programme. China’s lending practices have pushed several of India’s neighbours including Pakistan, Bangladesh, Nepal, and Sri Lanka towards economic distress. With the Maldives now on the verge of sovereign default, China’s funding of infrastructure in these nations is clearly not purely economic and carries strategic implications that directly impact India’s regional security.

Indian firms operating in BRI nations, such as Nepal’s hydropower sector, lack access to Britacom’s arbitration framework, increasing legal risks (HT Photo)PREMIUM
Indian firms operating in BRI nations, such as Nepal’s hydropower sector, lack access to Britacom’s arbitration framework, increasing legal risks (HT Photo)
For India, the vulnerabilities of its neighbouring economies to Chinese debt and strategic lending are concerning. Sovereignty concerns have led India to consistently refuse BRI participation, particularly with respect to the China-Pakistan Economic Corridor, a $62-billion investment infrastructure and energy initiative that connects China’s western Xinjiang province to the Gwadar port in Pakistan, through Pakistan-occupied Kashmir. Bangladesh has committed to $24 billion in BRI projects, including the Padma bridge rail link, while Nepal is engaged in the Trans-Himalayan Multi-Dimensional Connectivity Network.