RESEARCH PAPER

BRI: IMPACT ON SAARC NATIONS

Ajay Bhardwaj (19IB303)

Mishita Jain (19IB329)
Srishti Gwari (19IB329)

Somya Chhibber (19IB367)

Utkarsh Singh (19IB358)

Vinamra Ramawat (19IB359)

TABLE OF CONTENTS
1
Contents
ACKNOWLEDGEMENT.................................................................................................................................3
DECLARATION..............................................................................................................................................4
ABSTRACT....................................................................................................................................................5
INTRODUCTION...........................................................................................................................................6
OBOR CURRENT PROGRESS IN SOUTH ASIA................................................................................................6
LITERATURE REVIEW....................................................................................................................................9
IMPACT OF BRI ON SAARC NATIONS.........................................................................................................11
INDIA.....................................................................................................................................................11
PAKISTAN...............................................................................................................................................14
BANGLADESH.........................................................................................................................................17
NEPAL....................................................................................................................................................19
MALDIVES..............................................................................................................................................21
SRI LANKA..............................................................................................................................................22
BHUTAN.................................................................................................................................................24
AFGHANISTAN.......................................................................................................................................24
CONCLUSION.............................................................................................................................................27
REFRENCES................................................................................................................................................28

2
 ACKNOWLEDGEMENT
We wish to sincerely thank all those who have contributed in one way or another to this study.

We would like to take this opportunity to express our profound gratitude and deep regard to Dr.

Monika Jain, for her exemplary guidance, valuable feedback and constant encouragement

throughout the duration of the research. She has been kind and generous throughout. Her

valuable suggestions were of immense help throughout our research work. Her perceptive

criticism kept us working to make this project in a much better way. Working under her was an

extremely knowledgeable experience for us.

3
 DECLARATION

We, members of Group 8, students of PGDM International Business of Birla Institute of

Management Technology, Greater Noida hereby declare that the Research Report “BRI:

Impact on SAARC Nations” submitted by us under the guidance of Dr.Monika Jain in the

partial fulfilment of requirement for the award of the degree of PGDM International Business

is a genuine and complete work of ours.

Date: Members of Group:

Ajay Bhardwaj (19IB303)

Mishita Jain (19IB329)

Srishti Gwari (19IB352)

Somya Chhibber (19IB367)

Utkarsh Singh (19IB358)

Vinamra Ramawat (19IB359)

4
 ABSTRACT

The Belt and Road Initiative (BRI) is a conceivably transformational geopolitical improvement
activity, propelled by China, which includes 65 nations, representing approximately 32 percent
of worldwide GDP, 39 percent of worldwide merchandize exchange, and 63 percent of the total
populace. The BRI, additionally alluded to as the Silk Road Economic Belt (SREB) and the
twenty-first century Maritime Silk Road (MSR), is a geopolitical activity advanced by Chinese
President Xi Jinping, which goes well past building foundation along the antiquated "silk street."
The activity looks to build up a wide system of network and participation spreading over the
whole Eurasian land mass and parts of Africa, including Central Asia, Southeast Asia, South
Asia, the Middle East, Europe, and North and East Africa. The extent of ventures foreseen under
the BRI is enormous.
Taking in account the future effect of BRI on the worldwide economy, we have related the
effect, results and choices for the major developing nations in region of the proposed BRI viz.
India, Pakistan, Afghanistan, Bangladesh, Bhutan, Sri Lanka and Maldives. The papers would
edify you with the Political and Economic effect, on and by these nations on BRI.

5
 INTRODUCTION

ABOUT ONE BELT ONE ROAD INITIATIVE

Chinese leaders are overwhelmingly dedicated to the living standards of their people. As a one-
party political system, this policy goal is a result of the Party's effort to maintain stability in
government and to underline the credibility of the structures it has built over the decades.
The OBOR is a multi-faceted technique for growth. The OBOR aims at fostering economic
cooperation between countries along the Belt and Road on the international level. The project
aims to link Asia via five routes with Europe and Africa. Such five routes comprise:
(i) China to Europe via Central Asia and Russia
(ii) China to West Asia via Central Asia
(iii) China to Southeast Asia, South Asia and the Indian Ocean
(iv) China to Europe via the South China Sea and the Indian Ocean
(v) China to the South Pacific Ocean via the South China Sea.

OBOR CURRENT PROGRESS IN SOUTH ASIA

According to the study, the China Belt and Road Initiative in South Asia comprise four sub-
projects: The China-Pakistan Economic Corridor (CPEC), The Bangladesh-China-India-
Myanmar Economic Corridor (BCIM), The Trans-Himalayan Corridor and China's collaboration
under the 21st century Maritime Silk Road with Nepal, Sri Lanka, and the Maldives.
CPEC
Due to the speed of its progress, the $62 billion CPEC is considered the flagship project. The
signing of the Memorandum of Understanding between China and Pakistan in 2013 was
followed quickly by the creation of the Joint Cooperation Committee (JCC) and the development
of the' 1+ 4' cooperation framework (with the central Economic Corridor and Gwadar port,
electricity, connectivity and industrial partnership as the four key areas). Now, with more than 20
of the 30 early harvest projects under development and finished CPEC has finally entered the
early harvest level. The Gwadar East Bay Expressway is under development along with the
Gwadar International Airport.
The transport network currently being built by China under the CPEC would link Kashgar in
China to Islamabad and Lahore via Karakoram Highway (Phase I and II), Multan via the M4 line
and Karachi via the M5 line. On the other side, most of the 16 priority energy projects planned,

6
which account for 76 percent of the total corridor budget are under development and are
expected to be completed by 2020. Meanwhile, among the 29 planned industrial parks, the
Gwadar Port Free Trade Zone for which Pakistan has given China Overseas Port Holdings Co.
Ltd. over 30% of the land use right (nearly 280 hectares) for a 43-year lease period has already
become operational. Industrial Park Haier-Ruba is planning to expand and spend further. On the
Chinese side, Xinjiang, Sichuan, and Guangxi's provincial-level economies are planning to be
combined with Pakistan's.
Although China is ready to extend CPEC's reach outside Pakistan including other important
regional players. The Chinese long-term dream is to create a China-Pakistan-India-Iran-
Afghanistan-Kazakhstan Corridor–a mega-connectivity regional network that will control the
heartland of Central and South Asia and even the Eurasian peninsula. Ironically, while India is
one of the Chinese CPEC's harshest critics, India tends to feature in the CPEC dreams of China.
BCIM
Under the umbrella of BCIM in southwestern Yunnan province China is currently building three
railways and three highways. The China-Myanmar Railway (the Trans-Asian Railway's Western
Line) segment is expected to be completed and opened for traffic by 2020. In addition, their
preliminary work is being carried out by Baoshan-Tengchong-Houqiao Railway and the Dali-
Qingshuihe Railway. Work on the China-Myanmar Highway has also gained momentum
(including Kunming-Ruili, Kunming-Tengchong and Kunming-Qingshuihe).
Certain major Chinese ventures under the BCIM umbrella include the Bangladesh-based Padma
Multipurpose Bridge Project, the Kunming-Dhaka freight transportation route, and the
Bangladesh-Myanmar Railway, which has either been built or is underway. The 2,800-kilometer
long Bangladesh-China-Myanmar Economic Corridor was opened for traffic with the exception
of certain parts and in 2011 and 2013 two car rallies were held from Kolkata, India to Kunming,
Yunnan.
China has a wider dream for the BCIM axis through which it aims to link and incorporate South
Asia, Southeast Asia, and East Asia's three strategic sectors. Nevertheless, disillusioned with the
slow pace of its growth so far, China has recently proposed a China-Myanmar Economic
Corridor (CMEC), beginning from the province of Yunnan and stretching to Mandalay, central
Myanmar, then east to Yangon and west to the planned Special Economic Zone of Kyaukpyu.
TRANS-HIMALAYAN CORRIDOR
Since the visit of Nepalese Prime Minister K.P. Oli to Beijing in March 2016, China and Nepal
have increased collaboration under the Belt and Road Initiative and improved interconnection
through commerce, transport and telecommunications. Significant progress has been made in the
development of main projects such as the Karnali River highway bridge at Pulan / Yari port
Hilsa, the Kathmandu Ring Road rehabilitation plan, and three economic corridors, including the
Koshi Economic Corridor, Gandaki Economic Corridor, and Karnali Economic Corridor.

7
Additionally, a transport deal has also been concluded between China and Nepal under which
both sides have decided to increase the number of mutual foreign road freight lines from the
current 3 to 12. In addition, the latest road and rail lines linking Guangdong, Tibet and Nepal
have been officially opened and commodities are being shipped along this path to and from
China. The prospect of a China-Nepal Free Trade Zone is also being discussed by both sides.
There, the wider Chinese dream is to leverage the Indian market as a direct land crossing across
Nepal. According to the Chinese scheme of things, the "Trans-Himalayan Road" actually starts
from Chengdu, Sichuan where the Sichuan-Tibet Highway or the Sichuan-Tibet Railway is
planned to stretch further from Tibet to Kathmandu, Nepal, Ya'an, Qamdo, Lhasa and Shigatse,
and then to India where it is linked to the Indian railway network thereby creating a large land
corridor between China and Myanmar.
The Chinese side is optimistic that the Trans-Himalayan Grand Route along with the China-
Pakistan Economic Corridor and the Bangladesh-China-India-Burma Economic Corridor will
fully open up South Asia joining 10 countries on both sides of the Himalayas. The Chinese side
believes that this interconnection and intercommunication would unleash the promise of a true
"Trans-Himalayan economic growth zone."

8
 LITERATURE REVIEW
Capital-output ratio has increased rapidly since the 1990s. China initiated ‘going global’
policy in 2002 mainly to promote its overseas investment activity. After 2007 global
economic crisis, the Chinese government launched a bailout plan of 4 trillion yuan in
November 2008 and expressed its desire to move from export-led growth to promoting
domestic demand and expand internal markets. Now China is a ‘global trade power’
[Naughton, 2007]

 OBOR has been designed to reshape the economic and political order in Central Asia and
the Asian Pacific region by encouraging a network of trade routes, political cooperation,
and cultural exchange [Zimmerman, 2015]

 A positive aspect of the AIIB, in comparison to other, more established international

financial institutions such as the ADB and the World Bank, is its willingness to finance
infrastructure projects for which it would normally be difficult for low-income countries
to secure funding from the Bretton-Woods institutions [Lim, 2015]

 The Belt and Road initiative has common approaches to infrastructure development and
regional cooperation by institutions, particularly the development banks. [Wolff, 2016]

 Another strength of the BRI, in contrast to its predecessor projects, is the institutional
framework supporting it. This includes the new Asian Infrastructure Investment Bank
(AIIB) and the Silk Road Fund (SRF), the European Bank for Reconstruction and
Development (EBRD), which China has recently joined [Nazarko et al. 2016]

 Some major challenges of OBOR are complex natural features, mismatched resources,
shared ecological issues, and diverse socioeconomic conditions [Yanget al., 2016]

 The Making of One Belt, One Road and Dilemmas in South Asia. “…From the South
Asian point of view, OBOR presents multiple opportunities as well as dilemmas. The
puzzles need to be addressed to shape the connectivity agenda of the region and to
harness the benefits of integration, which may require joint development and sharing of
responsibility among economically stronger countries. Greater cooperation among South
Asian countries will be critical in shaping the connectivity agenda, through OBOR or
otherwise, in the South Asian region” [Das, Khanindra, 2017]

9
 One mitigating measure that may help avoid conflict and alleviate tensions is to pursue
positive engagement and convergence and synergies between initiatives, thus creating
opportunities for collaboration. For example, the Bangladesh–China–India–Myanmar
initiative demonstrates opportunities for the merging of regional initiatives with the BRI
[Das, 2017] that could lead to win-win collaborations.

 The AIIB is predominantly funded by China but with the help of regional and non-
regional stakeholders [Das, 2017]

 China’s overseas direct investment (ODI), especially whole or majority-ownership

mergers and acquisitions, rose significantly in the belt-road countries. [Du & Zhang,
2017]

 Under China’s Belt and Road (B & R) initiative, Carat Canal, a potential new channel of
the Century Maritime Silk Road, will have a great impact on the shipping networks and
the evolution of hub ports. [Zeng, Wang, Qu, & Li, 2017]

10
 IMPACT OF BRI ON SAARC NATIONS

INDIA
Although several nations have become part of China's ambitious Belt and Road Initiative (BRI)
conference Australia, the United States of America, Germany and other European countries have
boycotted it. They are reluctant to sign the agreement citing concerns that the document's draft
was strongly in favor of Chinese firms hijacking BRI ventures without any scope for Europe's
equal opportunity to participate in the projects.

To India this is not just an economic issue, but it has serious ramifications on its territorial
integrity and security issues. It's because there's a commercial bridge going on between two of
its hostile neighbors. It is recognized as the Economic Corridor of China-Pakistan (CEPC),
which is key to the BRI plan. The CPEC includes highway, rail and power plant building. This
ties China directly to the Gwadar port to Balochistan's southwestern coast in Pakistan across the
Arab Ocean which Pakistan has established with considerable Chinese assistance. The BRI
envisages significant new CPEC corridor investments.

It offers India two major worrying reasons. First, the CPEC project is going through the Pakistan
Occupied Kashmir (PoK) which India considers being its part. Second, China's currency influx
to Pakistan would boost its economic and strategic leverage on India's aggressive neighbor
indicating Pakistan's visa win-win situation viz India. BRI is not only an economic venture but
also retains its political control in the area through this China.

But BRI seems to be a bigger challenge for India to preserve its interest in the region. The
growing influence of China in Pakistan with which India through the BRI and China Economic
Corridor (CPEC), has waged four full-fledged wars since 1947, is a major concern for India.
When it boycotted the meeting of the BRI, it made its position clear and stood globally alone in
its hostility to the plan. But the fact is that most countries including many of India's neighbors
have a general agreement for the BRI. This support was apparent from the opening ceremony
attended by 29-state leaders including Russian President Vladimir Putin, India's close ally in the

11
past. The ceremony was also attended by delegations from over 100 countries. Apparently, most
eastern countries are excited about the prospect of future mutual benefits. China alone has
pledged $124 billion for BRI. In other terms, this cash will go as loans from China to ventures in
various countries along the corridor which in effect will improve exchange and jobs for them.

Among the three major areas of concern between India and China, India is most concerned about
the fact that apart from the other two, the CEPC is being put by PoK preventing India's entry to
the Nuclear Suppliers Group (NSG) and China's disinterest in endorsing the UN ban on JeM
chief Masood Azhar.

Besides PoK, India's other neighboring state Nepal is seen warming up its relationship with
China at various levels. Nepal and China decided to restore the ancient Silk Road from Lhasa to
Kathmandu. China aims to connect Nepal with the Eurasian Corridor of Transport. Nepal signed
a four-point agreement for the same reason in 2014. Beginning around 2000 years ago, the old
Silk Road was a complex set of trade route links that facilitated financial, political, and cultural
exchange through Asia, Africa, and Europe. As a consequence of this plan, the Nepalese
government and the country's economy will profit most in the area of South Asia as it links
Nepal directly to Eurasia for trade and investment unlike in the past when all the exchange took
place via New Delhi. This has prompted India's diplomatic relations with Nepal to shake off
India.

India's former foreign secretary S. Jaishankar refers to China's strategic infrastructural expansion
in the South Asian area as the ‘New Great Game’. Jaishankar thought Beijing's plan to dominate
the neighborhood is regarded by Indian diplomats as the emergence of political distrust.
Pakistan is another factor in the nature of terror among Indian decision-makers.

Options Left For India

The Chabahar harbor interpreted as "four springs” has been identified by medieval traveler Al
Beruni as the access point to the Indian subcontinent. Since, as far as international exchange is
concerned, India should not be troubled as it is already a participant in the Chabahar project
linking India to Russia, Europe, and Central Asia entering Afghanistan without Pakistan's help
and also enabling India to be part of the North-South Transport Corridor. The North-South
Transport Corridor (NSTC) greatly reduces shipping range to Central Asia for Indian Goods.

12
The Chabahar plan allows India to circumvent Pakistan, which is restricting its links to
Afghanistan and Central Asia. Indians for their part are mindful of their strategic location and
their ability to open a path to Afghanistan and Central Asia. In addition to aid from Iran and
Afghanistan on the Chabahar plan, India provided assistance from Japan. Both India and Japan
support a strategic alliance in Chabahar as it helps Central Asia's landlocked countries to find an
alternative route far from ports controlled by the Chinese, such as the Gwadar port. It is said that
the Chabahar is the best entry point for linking three continents: Asia, Europe and Africa. India
will move quickly to seize the opportunity which Iran provides not only to explore the land route
to Central Asia but also to link with the trans-shipment road routes that Iran is constructing to
enter Europe, one of which is the International North-South Corridor. Chabahar is better than
Gwadar in 2018 in many respects. It is a deep-water port connecting to the shore and the
mainland. It has ties to the Indian Ocean's global waters and a mild climate. In summarize,
exporting commodities in Afghanistan is the best way. It has off-shore facilities connected to
Sistan, Baluchistan, Kerman and Khorasan provinces. In addition, owing to its geographical
location and proximity to neighboring countries (the Indian port of Mundra is 900 km away)
with large markets and political stability, the free zone of Chabahar has enormous potential to
host large industries by joint foreign and domestic investment.

India must note apart from an economic perspective that the Iranian authorities are more than
interested in making India part of the Chabahar plan. This plan can be more sustainable and
lucrative for India if given a chance than the BRI. One of the motives for suggesting this may be
the safety element that is undermined in CEPC as there is a significant security risk concerning
Pakistan providing security control in the border area with India.

Another choice which India must explore is to follow its own Look East Policy from
Bangladesh's point of view; it can provide a launch pad for the South East Corridor that could be
close to the CPEC that will link Indian quadrilateral to South East Asia's economic powerhouse
via Myanmar. In contrast, India draws foreign bodies’ attention to the violation of human rights
in PoK and helps citizens who are in harmony with India. Then put all the anti-Chinese
developing countries on board then force China to compromise on the agreement's agreed
conditions in the project's contentious regions.

13
PAKISTAN
China-Pakistan Economic passageway
China associate degreed Islamic Republic of Pakistan privilege to possess an “all-weather”
friendly relationship. Their geographical closeness enhances geo-economic value to their overall
relationship. To reinforce the advantages of their common border, the 2 sides in 1982
accomplished the legendary Karakorum route (KKH), linking China’s Kashgar to Pakistan’s
capital of Pakistan, through the Khunjerab Pass. Throughout the 2000s, the route was stretched
and progressive to form it functioning for every kind of traffic, year-round. An indoor network of
roads connects KKH with Pakistan’s Gwadar and city ports within the south of the country.
China Islamic Republic of Pakistan Economic passageway (CPEC) China has created
commitments to speculate around $46 billion in development deals, that is adore
roughly twenty per cent of Pakistan's annual GDP. China’s biggest foreign direct investment
deal to speculate in Islamic Republic of Pakistan. In total, the economic passageway project
aims to feature some seventeen,000 megawatts of electricity generation at a price of around $34
billion. The remainder of the money are going to be spent on transport infrastructure, together
with upgrading the railway line between the port megacity of city and therefore
the northwest town of Peshawar……………………………………………………...

Significance for China

14
More than 1/2 the world's verified oil reserves are set within the geographical area, the highest
region-based trafficker of fossil fuel to China. So far tankers dragging over some
10,000 transport miles to terminals on the east and southeast coast of China. Severally every
journey is beset with one amongst the world's supreme venturesome chokepoints - the Strait of
Malacca. China can discover a relaxed access to the middle East, Iran and extra to Africa and
Europe, because it is dominant region of the planet thanks to oil reserves and big markets. China
is already dependent on the oil from these regions. Moreover, this passageway will open routes
for China’s personal sectors and businessmen into world’s quickest growing economy of
Pakistan and to world via Pakistan. China will change use of technology benefits and different
benefits in enhancive cooperation of the event of biological resources, natural
resources exploration and different areas to upgrade China's relevant industrial structure, and to
push free-trade zone industrial fight

Significance for Pakistan

Pakistan has signed a currency swap with china in 2014-year, that marks Islamic Republic of
Pakistan the primary South land to sign such sort of agreement with China. China is that the
second largest trade partner of Islamic Republic of Pakistan and largest capitalist in
infrastructure, telecommunications, ports, energy sectors. What is more, Chinese government
and personal firms from China have sure to pay US$20 billion within the energy sector and large
quantity of higher than $30 billion indifferent sectors as an overseas direct investment in Islamic
Republic of Pakistan, which can be support for promoting mutual trade between the 2 countries.
The recent development in Pak-China passageway makes Islamic Republic of Pakistan the
primary transit hub for the world’s second largest economy among the South Asian
countries. Nonetheless, of political and military consequences of this major project, it's varied
edges for the folks of the body. Pakistan, littered with continued energy lacks and slim trade with
its abrupt neighbours, are going to be better-linked and can all being well become energy- ample.
A Pakistan- aligned road network can alter contacts among Pakistan’s neighbours on west and
east. India and Persia requisite this passageway for nearer incorporation with every other’s
economy. Albeit the CPEC simplifies movement of products and services within the region,
China’s contribution within the region’s economy turns rivals into stakeholders
in conserving peace and stability within the South and Central Asian regions.

Political and Economic Restraints

Even though Islamic Republic of Pakistan appearance China associate degree “all-weather
friend” and bilateral relations between the 2 nations have not been uncomfortable over the
progression of history, but it's vital to assess the variables which will upset Pakistan’s political
and economic capability and reaction to implement the elements of the good CPEC project over
intensive periods of your time. Very important among these variables stand:

15
1) Pakistan’s political constancy and policy uniformity

2) this state of affairs of Pakistan’s economy and forthcoming situations. 

With regard to the primary variable, associate degree encouraging fact is that there's nearly

accord amongst Pakistan’s political parties on sustaining hospitable relations with China that
recommends that in theory there ought to be no major political disability within the institution of
the CPEC. Similarly, Pakistani and Chinese geopolitics interests have historically remained
primarily converged around numerous common areas of strategic and bilateral interests. The
link between the 2 nations principally hinges on four communal areas of interest that comprise
‘economic cooperation, energy security considerations of each countries, shared internal security
concerns, and largely converging geostrategic interests.

Geostrategic Dynamics 
The CPEC is portion of China’ determinations meant to create stronger its trade and commerce
property with dissimilar regions of world. In Gregorian calendar month 2013, Chinese President
Xi Jinping highlighted stimulating the traditional trade ways in which connecting China, Central
Asia and Europe by developing 3 main corridors via southern, northern and central Xinjiang
Uighur Autonomous Region, that link China with West Pakistan, Russia and Europe. Similarly,
the Chinese have recently multiplied concentration on the Bangladesh-China-
India Burma passageway that may deliver China’s inland Yunnan province entree to the Bay
of geographic area Whereas China’s concentration in constructing theses corridors seems to
support its trade and economic engagement with nations within the region and primarily to fulfil
its rising energy necessities and enhance exports, it's anticipated that West Pakistan would
possibly seem as a hub of commerce and change the body with the creation of the CPEC that
may necessitate establishing various economic, industrial zones, physical roads, railways
linking West Pakistan and China. because the passageway conjointly expects having regional
link with Indian and Afghanistan–while it's quiet too early to comment whether or
not regional part of the CPEC can become operational or not–it may conjointly boost regional
economic and trade collaboration, that successively would contribute to regional peace
and stability.
……………………………………………………………………... 
Trade 
The sector that shows the sharpest reductions in import trade prices is crude and coal product,
however sectors like construction, trade services and transport sectors also exhibit high
reductions. As a result of trade prices reductions, imports of many product increase. the
largest will increase are recorded in agricultural product, textiles and crude and coal product.
West Pakistan is mercantilism less oil, chemical, rubber and plastic product and fewer transport

16
instrumentality than within the baseline. Lower prices of foreign inputs and better demand from
abroad cause growth of exports of West Pakistan in many sectors. 
The best will increase are recorded in chemicals, rubber and plastics, processed foods
and alternative producing, that consequently contributes to the best rates of output growth in
these sectors. On the opposite hand, the sectors that show the best reductions in
exports embrace agriculture and animal skin product.

BANGLADESH
The hint of Bangladesh-China connection isn't new, in spite of the fact that the two-sided
connection between the two nations has been an ongoing wonder in the diplomatic condition of
South and South East Asia. The Sino-Bangladesh connection goes route back to several years,
and through memorable timetable of occasions nexus between the two shaped by people to
people exchanges. People like explorers, specialists, scholastics, and statesmen contributed
enormously to improve the connection through the ages.
Diplomatic relations among Bangladesh and China were built up in 1976, five years after
Bangladesh's autonomy. Union and upgrade of China-Bangladesh companionship and
participation serve the central interests of the two nations, meet regular goals of their kin and are
helpful for harmony and improvement in the area and the world. This is the reason both chose to
build up a "Closer Comprehensive Partnership of Cooperation" from the key viewpoint, based on
standards of kinship, balance and common advantage.
In order to bridge the enormous trade gap, China has given financial guide to Bangladesh as well
as signed the Asia Pacific Trade Agreement (APTA) to expel tax hindrances from items
imported from Bangladesh
Under the system of the Asia-Pacific Trade Agreement (APTA), China expelled tax hindrances
on 84 kinds of commodities imported from Bangladesh, including jute and materials (major
exports of Bangladesh).
Significance for Bangladesh

 During the visit of Chinese president Xi Jinping in October, 2016, 34 MOUs had been
marked among Bangladesh and China worth $13.6 Billion in exchange and speculation.
Likewise, $20 billion in credit understandings have been completed by the two
governments. These ventures will invite future FDIs that will undoubtedly help
Bangladesh economy to get greater.
 AIIB (Asian Infrastructure Investment Bank) could turn into a significant source of
foreign loans for infrastructural improvement in Bangladesh.

17
 Bangladesh whose key statistic is between age 15 to 30 could turn into the prime goal for
China's developing cutting edge, high-margin industries, for example, IT, Aerospace, and
Telecommunication.

 It is foreseen that the proposed Silk Road Economic Belt and the 21st Century Maritime
Silk Road would get significant open doors accomplishing Bangladesh's objective of
turning into a middle income nation by 2021 and a developed nation by 2041.

 The foundation of rail connect among China and Europe is required to lessen the lead
time generously, and with OBOR, Bangladesh can also link the Deep Sea Ports and
Special Economic Zones. Bangladesh has been creating four ports - Chattogram, Mongla,
Payra and Sonadia remote ocean ports - so the nation can be associated with the OBOR
initiative. In the event that Bangladesh can contribute between $18 billion and $20 billion
in framework advancement, it will have the option to pull in $300 billion to $320 billion
of FDI in the following 17 to 18 years.

 The advancement of tasks connected to the Belt and Road activity could bring strength to
Bangladesh and improve relations with its neighbor Myanmar. Myanmar is encountering
genuine inter ethnic pressures in Rakhine State, which have constrained almost a large
portion of a million individuals from the Rohingya people group to look for asylum in
Bangladesh. This humanitarian dramatization has decayed relations among Bangladesh
and Myanmar, and compromises the infrastructure projects carried out by Chinese
organizations in Myanmar.

 While Beijing had recently kept up an arrangement of non-obstruction in the inside issues
of remote nations. The improvement of the Belt and Road activity will ask China to turn
out to be increasingly associated with provincial issues. In October 2017, Beijing sent
about 150 tons of aid to outcasts in Bangladesh. China additionally offers its intervention
benefits with the goal that Myanmar and Bangladesh control their contentions.

 Bangladesh the second largest garments producer and exporter in the world market after
china. While as of late, the production cost of apparel in china is expanding exceptionally
high and the opportunity cost of pieces of clothing creation is a lot higher than
Bangladesh. Such a large number of purchasers and makers are searching for another
destination for investments and apparel business. In this circumstance OBOR activity
could be a lucky opening as FDI particularly for RMG industry of Bangladesh.

 But the concern for Bangladesh will arise during talks of repayment of loans. China has
heavily invested in infrastructural development of Bangladesh on grounds of OBOR.
Bangladesh is under huge debt as of now.

18
NEPAL
Importance Of BRI
In Nepal, A lot of policies have been implemented to attract foreign investment. They also
provide several incentives on import and domestic use of raw materials. In order to become a
middle-income country from a low-income company it requires a lot FDI. Hence, The
government of Nepal has decided to join and benefit from the Chinese development of Belt and
Road Initiative (BRI).
Due to political instability, lack of resources, challenging terrain and poor infrastructure, Nepal's
development efforts are sluggish and insufficient. Land-lockedness and proximity to small
transport points has caused the nation from time to time to deal with trade and demand
disruptions. Nepal is expecting to benefit significantly from the OBOR program, as this could
help improve transportation infrastructure and provide access to multiple transit points. Nepal is
part of ancient silk routes with a history. This past is being renewed by the OBOR project. Nepal
has signed a preliminary.
Under the BRI several area of investment have been identified which include Infrastructure
development, commercial farming, tourism, International trade and investment sectors. Nepal
government has identified the list of 35 projects to be undertaken under BRI. The projects cover
several fields like infrastructure development energy, construction of targeted check posts, free
trade area and irrigation.
One of the most important project is the railway connectivity project.

Trans Himalayan Railway Project

It is a project which aims to connect Nepal’s capital Kathmandu to Kerung Railway line china.
(KKR). The geostrategic dynamics is that aims to connect Nepal’s capital Kathmandu to Kerung
Railway line (China) in phase 1 and extend it to Lumbini, the birth place of buddha near the
Indian borders in Phase 2 construction.
“According to a pre-feasibility report, the Kathmandu-Kerung railway line will span 72 km with
98.5 per cent of the section consisting of bridges and tunnels. The line's initial cost has been

19
estimated at $2.5 billion” (source: https://www.business-standard.com/article/news-ians/full-
steam-ahead-for-nepal-china-railway-project-through-himalayas-119061300537_1.html)
The $2.5 billion trans-Himalayan railroad from Nepal's capital Kathmandu to Kerung on the
Chinese side of the outskirt will at that point connect to the Tibetan level, going along the
absolute most elevated goes on the planet.
The KKR line can will be of immense benefit for the economy of Nepal. Some of the
major benefits include

 It will be a new reliable alternate route for transit.

 It will reduce trade dependency of Nepal in India.
 It will give access of European and Chines markets to Nepal
 Nepal will also get access to Chinese seaports in Tianjin, Shenzhen, Lianyungang and
Zhanjiang and three dry ports in Lanzhou, Lhasa and Shigatse.

Opportunities

 Nepal will have the option to interface with different pieces of China (rail and road)and
the Chinese oceanic ports just as with the nations of North-Central Asia, for example,
Kyrgyzstan, Kazakhstan and Uzbekistan, that are as yet immaculate for Nepal's
exchange.

 Better network will be an open door for better mechanical advancement for Northern l
Nepal which is as of now at a nascent stage.

 With better network, Nepal can draw in progressively Chinese visitors uniquely
Buddhists pilgrims

 The achievement of the undertaking will bring tremendous political profit to Prime
Minister Oli specifically and the Nepal Communist Party when all is said and done.
Challenges

 Considerably after two years of the understanding the nations are still negotiating and
recognizing the particular tasks to be done under the BRI structure While Nepal has
submitted around 20 development ventures China is just keen on completing a couple of
significant undertakings in Nepal.

 China does not want to develop projects entirely on the basis of grants and aid. While
China is looking for one or two economically viable and strategically suitable mega-

20
 projects, Nepal focuses on medium to large-scale projects such as transmission lines,
railway connectivity, dams, Nepal-China border ICPs, internal highways etc.
 China wouldn't like to create extends altogether based on grants and rewards. While
China is searching for a couple economically reasonable and strategically appropriate
mega ventures, Nepal centers around medium to enormous scale tasks, for example,
transmission lines, railroad network, dams, Nepal-China border ICPs, internal highways.
US policy on the Himalayan region, India's stand towards BRI and China's hidden agenda behind
the selection of projects for Belt and Road Initiative keeping all these factors in mind Nepal's
desire to take advantage of BRI could be a far off vision. Nepal could explore other options to
achieve its developmental aspirations rather than depending entirely on the BRI.

MALDIVES
The Maldives is an archipelago situated 370 miles southwest of India astride key shipping lanes in the
Indian Ocean. It is the smallest and least populated country in South Asia. It is of huge strategic
importance because of it’s marine time geography.

BRI and Maldives

Maldives has a lot of strategic significance because of its closeness to international sea lanes
through which two-thirds of the world’s oil and half its container shipments pass. Maldives in
2018 entered into 12 agreements with china which include Free trade agreements and A pact to
jointly promote OBOR. Maldives was the second south Asian country to sign a FTA with China.
This will help it in deepening the bilateral cooperations in sectors like health, tourism,
technology etc.

Impact of China and BRI

Before 2011, Maldives was not a priority nation for China. It did not even have an embassy in
Maldives. This China-Maldives relationship has grown only after 2014.
China’s presence can be specifically scene in the tourism sector and infrastructure sector. “China
building mega infrastructure projects, including the Friendship Bridge linking Male to Hulhule
Island and a 1,000-apartment housing project on Hulhumale, a suburb built on reclaimed land.”
China Claims this “Friendship Bridge” as an example how BRI can lead to development of
smaller nations. With BRI the role and presence of china in the Maldivian economy will
increase.

21
Debt Vulnerability in Maldives.
According to the “Centre for Global Development, a Washington D.C.-based think-tank tracking
the initiative. Maldives is one of the most at-risk countries of any involved with the BRI to the
distress of debt”
Maldives is presently undergoing a political and debt crisis. The situation of instable and corrupt
governments and huge amount of Chinese loans by the previous government has created a
situation of debt trap for Maldives. According to the reports Maldives owes nearly $3.4 billion
dollars to China.
Internal investigation on the deals signed between 2013-2018 by the previous government and
exact debt amount is still under process. Because of above mentioned reasons the situation of
BRI in Maldives is quite unstable and under review.

SRI LANKA

Located at the heart of the Indian Ocean and in the close proximity to the traditional east-west
shipping route, Sri Lanka has the potential to be a regional export hub. Sri Lanka, with its small
population and developing economy relies heavily on its maritime trade.
Hambantota port: belt and road initiative
China imports two third of oil through shipping lanes south of the port. This makes Sri Lanka
strategically important point for its BRI initiative. They were aiming to build a second port in the
town of Hambantota to manage capacity and crowding concerns with the main port in Colombo.
The project was started in 2008 with Chinese funding the project. The original plan was that the
port will be operated by Sri Lanka. However, China took over the project by providing additional
funding and taking a 70% share in the project.

22
Relationship between Sri Lanka and China has grown rapidly during the last decade, making
China a significant economic partner of Sri Lanka. Although, many argue that China with its
financing has led Sri Lanka to a ‘debt-trap’. But these investments by China have also positively
helped the maritime sector as a whole. The Belt and Road initiative is closely connected to it.
The Hambantota Port project, which started back in 2009, is now considered to be part of the
Maritime Silk Road under the BRI.
BRI poses as both opportunity and risk for Sri Lanka. On one hand, Sri Lanka gains
infrastructure and capital, making it a leading trade facility, which will help in the development
of its economy, plus the added benefits include trade and investment promotion, establishment of
economic hub, participation in global supply chain and increase in employment. On the other
hand, sovereignty issues arises by partnering with China and taking on significant amounts of
debts.  
BRI has four main objectives: policy coordination, trade, connectivity and financial integration.
China has invested a large amount of money in a number of projects in Sri Lanka to establish
connectivity of Sri Lanka with BRI. Negotiations are also going on regarding free trade (FTA)
between the two countries.
Until 2011, Sri Lanka failed to attract FDI, with under USD 1 billion investments per annum.
Although, after 2011, there has been a rise in the FDI investments and a fairly large part of it
coming from China (as part of BRI), constituting 25% of the total investments in 2014.

Benefits of BRI for Sri

Lanka:
BRI has the potential to bridge the infrastructure gap and increase connectivity and thereby
increasing relationships between Sri Lanka and the world.

23
  China is Sri Lanka’s second largest trading partner in terms of total trade with the world.
BRI will only further enhance the trade between the two countries. The countries are also
in talks about FTA, which will boost bilateral trade.
 The project will attract foreign investors, boost employment, tax revenues and boosting
local economy
 Sri Lanka is trying to build itself as a hub in the Indian Ocean, because of its privileged
location that offers connectivity. This goal of Sri Lanka resonates with the BRI initiative.
BRI holds the potential for Sri Lanka to be a prime logistics and trading center.
 Sri Lanka’s current port i.e. Colombo port is ranked 30 th in the world. Major shipping
lines operating in Asia dock at Colombo port. The increased investment will enhance the
port’s capacities which will result in attracting more foreign investors.
 Sri Lanka is currently working on developing two ports- Hambantota and Trincomalee,
along with two international airports. These initiatives grouped with the BRI initiative
are likely going to transform Sri Lanka into logistics and transportation hub.
 Once the Hambantota port is operational, there will be an increase in the country’s basic
manufacturing. Sri Lanka will have access to new markets due to extension of the
maritime Silk Road covering as far as east Africa and Oceania.
 These initiatives will result in increase in tourism as China has made it clear that tourism
is a big aspect of BRI.

Potential concerns
 With the increase in funds by China, there is a concern of Sri Lanka’s increasing debt
and loss of sovereignty. This will also result in loss of autonomy.
 Si Lanka’s debt is equal to 81.6% of its GDP.
 Issues related to transparency and corruption.
 There is a possibility of low returns as there is a lack of commercial focus behind BRI.
 Concerns regarding environment and sustainability

BHUTAN
China and Bhutan has had a troubled past. Bhutan is the only country along the boundary of
China which is not collaborating on the BRI project. Bhutan is following India’s footsteps
and boycotting the BRI initiative. This also suggests that there has been no major change
in Bhutan’s foreign policy under the new government. Bhutan did not attend the second
meeting held in Beijing, China.

24
AFGHANISTAN
As indicated by certain sources, the Chinese form of the New Silk Road (the BRI) took off from
where the American adaptation slumped. China submitted 1.4 trillion US dollars to subsidize its
New Silk Road plan; to fund the responsibility, the administration made a New Silk Road Bank
and an Asian Infrastructure Investment Bank. The Chinese activity is by all accounts thoroughly
under way, in contrast to its American partner, which appears to be lethargic.
There is no common grounds between the two activities, be that as it may. The American activity
centers around foundation working inside Afghanistan, while the Chinese one detours
Afghanistan by crossing Central Asia (with the Silk Road Economic Belt) and Pakistan (with the
CPEC). The two activities do supplement one another as framework advancement in Afghanistan
of one arrangement pacifies the foundation shortage attempt while the other arrangement
prepares for Afghanistan's network inside the locale and past.

Opportunities and Offering

 Distance matters a great deal in trade and transit. Afghanistan offers China the shortest way
to the Middle East and ultimately to Africa. China has shown interest in reaching the Middle
over land in recent years. The first Chinese train reached Tehran in February 2016,349 but
through a detour from Central Asia traversing Kazakhstan and Turkmenistan. More recently,
China agreed to invest in the Five Nations Railway to reach Iran and the Middle East through
Kyrgyzstan, Tajikistan and Afghanistan, which is a much shorter route compared with the
one through Central Asia. China is willing to invest in projects to make condensed access a
reality, despite the obstacles of insecurity and the infrastructure deficits.
 Afghanistan can likewise give South Asia the briefest travel distance and time to Central
Asia, the Russian Federation and to Europe (through the Caucasus). It can give those regions
a similar access to South Asia. This is noteworthy for Europe and South Asia, given that the
flow route of the Indian Ocean–Red Sea–Mediterranean–Europe is excessively long and
subsequently, excessively exorbitant as far as cost and time.
 Afghanistan can encourage the reduction of energy gap between energy rich Central Asia and
energy deficient South Asia in the most limited manner conceivable. South Asia has required
gas and power since the late twentieth century. The possibility of a TAPI petroleum gas
pipeline has been around since the late 1980s. Presently, it has become a need for Pakistan
and India just as for Turkmenistan. There have likewise been comparable gas transport
activities, similar to the Turkmenistan–Afghanistan–Pakistan line and the Turkmenistan–
Uzbekistan–Tajikistan–Afghanistan–Pakistan power matrix, for which Afghanistan gives the
main travel route.
 Afghanistan can likewise offer information availability among Europe and Asia. As Qayoumi
laid out, information network will become undeniably more significant than the two prior
availability focuses (for energy, exchange and transport). A pleasing way through
Afghanistan could cut in excess of 40 milliseconds of the current 130 milliseconds that it

25
 takes for information development among Asia and Europe. As far as cash is concerned, each
millisecond compares to 100 million dollars of investment funds in a year. This implies
advanced network through Afghanistan can spare around 4 billion US dollars for each year.

Challenges
 Afghanistan's security circumstance has been breaking down for quite a long time. The
Taliban are more grounded than any time in recent memory since their ouster in 2001 and
practice or vie for power over almost 50% of the nation. The uncertainty hampers
Afghanistan's availability with and reconciliation into the more extensive locale from various
perspectives.
 Afghanistan struggles with an infrastructure deficit and the lack of resources to strengthen
the sector.
 The Afghanistan-Pakistan Transit and Trade Agreement (APTTA) has been at a halt since
2015, with Afghanistan requiring another concurrence with the incorporation of India—a
condition not satisfactory to Pakistan and Hence, Led Pakistan to withdraw from the
agreement.
China’s Role in Uplifting Afghanistan

 China’s interest in infrastructure in Afghanistan has been on the rise in recent years and the
Chinese government has pledged huge support to the country’s railway sector. It has pledged
to support the AFRA in the design of its railway governance system, in developing strategic
maps and knowledge and technical competence sharing, among other areas.
 Chinese government expressed interest to invest in marble and alabaster mineral extraction in
Afghanistan. Reportedly, only 16 of 60 marble and alabaster mines are in operation.
 On the political and diplomatic fronts, China is assuming more significant roles, particularly
in the peace talks with the Taliban as well as in the mitigation of tensions between
Afghanistan and Pakistan.

26
 CONCLUSION

China has led a strong growth and has shown itself prepared invest in projects on a huge scale
basis to build infrastructure, trade and other aspects of connectivity along BRI. BRI has an
impact on global trade, investment and financial situation. The initiative holds the potential to
transform Asia’s economy. China and south Asian countries need to work together for successful
implementation and smooth operation of BRI in the region.
Connectivity is a major factor offered by BRI initiative. If carried out successfully, it can
transform Asia’s economy and increase the continent’s connectivity with the world. However,
there is a lot of political fiction between some SAARC countries and China. Countries like India
and Bhutan are against this initiative.
Although there are benefits of BRI for countries like Maldives and Sri Lanka, like increased
connectivity, infrastructure, increase in employment etc, this initiative will drive these countries
towards crippling debt.
For Bangladesh, Pakistan and Nepal, this initiative is beneficial in numerous ways. The
relationship between these countries and China has played an important role. Some of the
benefits of BRI include- benefit Bagladesh’s apparel industry and make its relationship with
Myanmar better, increase Nepal’s tourism and better connectivity of Pakistan with other
countries.
Overall, the whole picture still looks a bit hazy, further complicated by the political friction
between the countries.

27
 REFRENCES
 http://csis.org/publication/building-chinas-one-belt-one-road
 http://thediplomat.com/2014/02/china-pakistan-flesh-out-new-economic-corridor/
 https://en.wikipedia.org/wiki/China%E2%80%93Pakistan_Economic_Corridor
 http://www.xinhuanet.com/english/2019-03/15/c_137896472.htm
 https://theasiadialogue.com/2019/05/24/sri-lankas-port-development-and-the-role-of-the-
bri/
 https://archivos.juridicas.unam.mx/www/bjv/libros/12/5550/19.pdf
 http://www.xinhuanet.com/english/2019-05/11/c_138051307.htm

 https://thediplomat.com/2019/03/chinas-vision-for-the-belt-and-road-in-south-asia/
 https://usiofindia.org/publication/usi-journal/the-one-belt-one-road-obor-belt-and-road-
initiative-bri-of-china-security-implications-for-india-and-the-indo-pacific-region-ipr-
and-response-strategies/
 https://www.oboreurope.com/en/bangladesh-bri/
 http://textilefocus.com/obor-journey-new-economic-era-bangladesh/
 https://archive.shine.cn/opinion/foreign-perspectives/Bangladesh-joins-Chinas-One-Belt-
One-Road-initiative-meeting-challenges-building-the-future/shdaily.shtml
 https://www.journalijar.com/article/22293/the-impact-of-one-belt-one-road-initiative-in-
the-garment-sector-of-bangladesh/
 https://thediplomat.com/2018/01/the-china-maldives-connection/
 https://www.vifindia.org/article/2019/october/11/chinese-investments-in-nepal-in-the-
context-of-bri
 https://www.chinadaily.com.cn/a/201812/15/WS5c14ae61a3107d4c3a001012.html
 https://www.researchgate.net/publication/336855145_Trans-
Himalayan_power_corridors_Infrastructural_politics_and_China's_Belt_and_Road_Initia
tive_in_Nepal

28
 http://timesofindia.indiatimes.com/articleshow/67713036.cms?
utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
 https://www.ft.com/content/c8da1c8a-2a19-11e9-88a4-c32129756dd8
https://www.reuters.com/article/us-china-silkroad-nepal/nepal-in-talks-with-china-to-
build-8-billion-cross-border-rail-link-finance-ministry-official-idUSKBN18A05F
 https://www.constructionglobal.com/infrastructure/china-agrees-finance-eight-major-
infrastructure-projects-nepal
 https://www.aidiaasia.org/research-article/nepal-china-bri-conundrumMariam Safi and
Bismellah Alizada, Friedrich Ebert Stiftung, Integrating Afghanistan into the Belt and
Road Initiative, August 2018

 Ahmad Bilal Khalil, April 24, 2017, Linking Afghanistan to China’s Belt and Road

29