Myanmar, in Particular

Myanmar, under a military regime now, sits right on India’s path eastward. India-Myanmar relations are rooted in shared historical, ethnic, cultural, and religious ties. India and Myanmar share a long land border of over 1600 km and a maritime boundary in the Bay of Bengal. A large population of Indian origin (according to some estimates about 2.5 million) lives in Myanmar. India and Myanmar signed a Treaty of Friendship in 1951. The Government of India is actively involved in more than a dozen projects in Myanmar, both in infrastructural and non-infrastructural areas. These include upgradation and resurfacing of the 160-km Tamu-Kalewa-Kalemyo road; construction and upgradation of the Rhi-Tiddim Road in Myanmar; and the Kaladan Multimodal Transport Project.

However, China is another major country having long borders with Myanmar. Over the years, even before Myanmar became a member of China’s Belt and Road (BRI) project, Beijing had developed strong political, economic, and military ties with all the Bay of Bengal littoral states, primarily to secure access to energy from the Middle East and Africa, and secondarily to have a presence in the Bay of Bengal and the Andaman Sea. Of all these countries, Myanmar remains the most important to meeting China’s strategic ambitions in the Indian Ocean.

In 2013 China’s state-run China National Petroleum Corporation completed construction of a natural gas pipeline from Myanmar to China. Soon after, the pipeline started delivering gas from Myanmar’s west coast in the Bay of Bengal to Kunming. Next to the gas pipeline, another pipeline transporting oil from the Persian Gulf and Africa was completed in August 2014. The new route for oil and gas imports to China is a key factor in Beijing’s “two-ocean strategy”—achieving naval control in the Pacific and Indian oceans.

Allowing the use of its landmass has raised Myanmar’s strategic importance to China. But strengthening its grip over Myanmar also serves China’s other design, which is to dilute India’s traditional influence among its eastern neighbours. Beijing has historically cultivated cordial relations with both the military hierarchy and the erstwhile democratically elected civil administration of Aung San Suu Kyi. During the Rohingya crisis in 2017, when international pressure was exerted on Myanmar’s Aung Sun Suu Kyi government, China got closer, using its veto power to shield Myanmar from United Nations sanctions.

Following the 2021 military coup, which was widely condemned, China was careful to neither endorse nor condemn the new rulers. However, geopolitical interest has kept China firmly attached to the Myanmar military. A recent report by the Greek City Times indicates that China is using its close ally, Pakistan, as a conduit to supply weapons to Myanmar to avoid direct implication. That report said that in 2018 Myanmar`s armed forces bought 16 JF-17 Thunder multirole aircraft, a production of Pakistan Aeronautical Complex and the Chinese Chengdu Aerospace Corporation, from Pakistan for US $560 million. In September 2021, an unannounced high-level, 10-member delegation from Pakistan’s Defense Ministry, led by a Brigadier, met with Myanmar’s Defense Minister, and reportedly discussed the sale of upgraded JF-17 (Block III) aircraft. (Pakistan becomes China’s conduit to supply weapons to Myanmar: Greek City Times)

Simultaneously, to further alienate Myanmar from India, China began to lay the ground aggressively for a broad expansion of its Belt and Road footprint in Myanmar. In 2017 Beijing signed the China-Myanmar Economic Corridor agreement with Yangon. Despite delays in project implementation, the CMEC aims to promote several infrastructure projects that strategically connect the oil trade from the Indian Ocean to China’s Yunnan province via Myanmar. One of Beijing’s objectives was to curtail New Delhi’s effort to use Myanmar’s landmass to move eastward. Evidently, China calculates that if it succeeds in blocking India from establishing a direct land route through Myanmar, it will be free to assert its influence over most of the Southeast Asian countries.

Chennai-Vladivostok Maritime Route

Beijing’s ongoing, aggressive policy to contain India is now well understood in New Delhi. But India needed a way to break out of this containment. That opportunity emerged last December when Indian Prime Minister Narendra Modi and Russian President Vladimir Putin met at the 21st Annual India-Russia Summit. During the heads of state talks on that occasion, among other areas of cooperation between the two nations, discussion on increasing connectivity took an important place. The summit was followed by the “2 + 2” dialogue between foreign ministers and defence ministers, where they discussed forming the basis for a strong maritime trade link between Chennai and Vladivostok in eastern Russia. This is exactly what India needs to judo the Chinese plan.

Subsequently, Indian Foreign Secretary Harsh Vardhan Shringla told news media: “The role of connectivity through the International North-South Transport Corridor (INSTC) and the proposed Chennai-Vladivostok Eastern Maritime Corridor figured in the discussions. The two leaders looked forward to greater inter-regional cooperation between various regions of Russia, in particular with the Russian Far East, with the states of India.” Earlier, in 2019, Russian Deputy Prime Minister Yury Tutnev had met Indian External Affairs Minister S. Jaishankar prior to the Indian premier’s trip to Russia’s Far East and said that Russia was planning to launch a maritime connectivity route linking India’s east coast with Russia’s Far East, which is rich in fossil fuels and minerals, including diamonds.

Indian Prime Minister Narendra Modi had then extended a $1 billion line of credit for the Russian Far East, where strategic rival China had made inroads. The credit would be “a take off point for (India’s) Act Far East (policy),” Modi said then. People familiar with the matter said feasibility studies on the Chennai-Vladivostok route were to begin soon and would act as a “game-changer” in injecting much-needed momentum into economic ties.

The proposed Chennai-Vladivostok maritime link would enable cargo transfers between Chennai and Vladivostok in 24 days, as against the more than 40 days it currently takes to transport goods from India to Russia’s Far East via Europe. This proposed maritime route could be transformed into a corridor that would interface with the Indo-Japan Pacific to Indian Ocean Corridor, along China’s own BRI maritime routes. Taken as a whole, these would connect the entire Southeast Asian region through road, shipping and rail links. (Russia-India Trade To Get Back On Track With The Chennai-Vladivostok Maritime Corridor: Russia Briefing: Dezan Shira Associates: Feb 16, 2021)

Russia’s Far Eastern Federal District (twice the size of India) is the largest but least populated of the eight federal districts of Russia, with a population of roughly 6.3 million. In 1992, India became the first country to establish a resident consulate in Vladivostok. India’s current engagement with the region is limited to isolated pockets, such as the Irkut Corporation in Irkutsk, where the MIG  and Sukhoi aircraft are built; more than US $6 billion worth of investments by ONGC Videsh Limited in the Sakhalin 1 project; and, recently, the Eurasian Diamond Centre, where the Indian Group KGK, a global leader in gems and jewellery, expects to employ up to 500 people at a new facility to polish and cut Siberian diamonds before releasing them on the international market. The Sakhalin 1 project is a consortium for production of oil and gas on Sakhalin Island and immediately offshore that operates three fields in the Okhotsk Sea.

In addition, India is aware of the wealth of natural resources in great demand today that are present in the Russian Far East: timber, tin, gold, diamonds and oil and natural gas. The Russian government has announced several initiatives to attract investments in the region, including setting up an agricultural special economic zone, the Vladivostok Free Port Project; and it has invited participation in the timber industry, mining of mineral resources (coal and diamonds) and precious metal deposits (gold, platinum, tin, and tungsten). There are opportunities for collaboration for Indian companies in agriculture, mining, port development and infrastructure, diamond processing, and agro-processing. Further, the Chennai-Vladivostok maritime link connects Chennai to the Northern Sea Route, which is becoming increasingly attractive since shipping through Arctic has begun to open because of global warming’s effect in melting Arctic ice.

The proposed Chennai-Vladivostok maritime route will provide India additional strategic advantages. For instance, it will offer India another source in procuring its daily oil supply. At present, India is wholly dependent on the Gulf region for its oil, but the Russian Far East could become an important source. That area has perhaps one of the largest oil reserves yet to be explored. The route would also act as a strategic counterbalance to China’s growing economic influence in the ASEAN region, while bringing Russia in to play a role in the region’s defence and energy supply.

Conclusion

These two major infrastructure developments which would benefit India and South Asia immensely has now come under a cloud of uncertainty. A conflict has broken out between Ukraine and Russia. At the time of this writing, all indicators suggest that the conflict may not die down soon. Although the conflict is essentially a conflict in Europe, it nonetheless has cast a shadow of uncertainty on India’s two essential undertakings with Iran and Russia.

The conflict has engaged East European countries located west of Ukraine such as Romania, Bulgaria, Moldovia, Hungary, the Slovak Republic, and Poland, and it has the potential to draw in the Baltic Sea countries, as well. The uncertainty of this development does not bode well for INSTC in the immediate future. The smaller countries located between the Caspian Sea and the Black Sea will be cautious in pushing ahead with plans vis-à-vis the corridor project. Considering the realignment of alliances in the region brought forth by the Russia-Ukraine conflict, it is difficult to assess what Iran’s decisions will be as far as strengthening the northern segment of INSTC. What is certain, however, is that no matter what else happens, Iran will move forward with the developments of, and around, the Chabahar Port, the southernmost segment of INSTC.

There also is little reason to assume the Russia-Ukraine conflict will affect development of the Chennai-Vladivostok maritime route, unless the conflict broadens out to engulf countries located well beyond the region. What is essential for both India and Russia is to remain engaged in making this maritime route a reality.

Smooth operation of these two international trade routes is vital for India’s future. One could add more to illuminate the potential of these two routes. To begin with, both the INSTC and the Chennai-Vladivostok Maritime Route will allow India’s neighbouring South Asian nations—Bangladesh and Sri Lanka, in particular—to increase their exports to Iran, Afghanistan, and Central Asia, and seek investments from those countries using the Chabahar port as the crucial nodal point. Such a development will help integrate the maritime security interests of these nations with that of India. An article in the Dhaka Tribune last November said as much: Bangladeshi Foreign Minister Dr. AK Abdul Momen’s attendance at the “Central and South Asia: Regional Connectivity – Challenges and Opportunities” conference in Tashkent in July 2021 demonstrated Bangladesh’s interest in being an active partner of this development within South Asia and Eurasia (Why Bangladesh should use the international north-south transport corridor).

From the Indian standpoint, these two routes could revitalize bilateral trade and investments with Russia. Bilateral investments between India and Russia have reached $30 billion because of investments in oil and gas, but the two-way trade continues to languish at an abysmal level. As per Indian figures, bilateral trade from April 2020 to March 2021 amounted to US $8.1 billion. Indian exports amounted US $2.6 billion while imports from Russia amounted US $ 5.48 billion, a mere 1 percent of India’s overall trade.

Analysts such as India’s former Foreign Secretary Kanwal Sibal rightly point out that this stagnant, low level of trade is because of the lack of interest on the part of Indian private entrepreneurs, the structure of the Russian economy and the lack of information on the potential of the two markets. But another very significant factor is the cost in time and money of existing trade routes. Operationalizing these new routes will provide entrepreneurs of both countries an attractive alternative.

(Concluded)