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Saturday 20

October, 2018 3:27 PM



India set to develop US and Russia infrastructure link

India set to develop US and Russia infrastructure link

India is in talks on a deal with the US and Russia that is set to build infrastructure in its country and beyond to counter China's Belt and Road Initiative (BRI).

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By Thomas Hudson 27.09.2018

India is in talks on a deal with the US and Russia that is set to build infrastructure in its country and beyond to counter China’s Belt and Road Initiative (BRI). The move will also encompass working with Australia and Japan, among others.

The partnership will span the Indo-Pacific region, and connectivity networks will be the major driver of the project as one of the most populous nations teams up with the US and Russia, who are becoming increasingly anxious to counteract the potential of the trade routes opened by China through the BRI.

The US government’s international development finance agency is leading talks for an agreement that covers energy, tourism, transport and technology with a call for joint investment in infrastructure in these sectors from partnering countries.

While this will cover the Indo-Pacific region, India is also negotiating with Russia to arrange a trade route connecting the two nations that will go through Kazakhstan, Turkmenistan, Iran and Oman.

Discussion on this corridor will take place further at the annual Indo-Russia summit. The route is set to link existing routes that connect Eurasia to Oman via the Ashgabat Agreement and India to Iran in Chabahar Port. It will also attach to the International North South Transport Corridor.

India will likely continue talks with all countries that this affects, particularly those in Central Asia. With an Indo-Uzbek summit set for next week, the talks will come at a convenient time.

An international transport conference also recently took place in Tashkent, Uzbekistan’s capital, where discussion of many of the logistics occurred. These included creating custom warehouses along the route, modern working conditions, customs and border checks and integrating information technology and digital systems into the supply chain.

India wants to develop specific trade corridors not connected to the BRI, despite both itself and China potentially operating in the same countries. To this end, India was the only nation present at the Shanghai Cooperation Organization Summit that did not vote to ratify the BRI.

At the same time, India is also adamant that its move for connecting trade routes must be completely transparent and without hidden motives, which is a dig at the BRI and China’s geopolitical intentions that come along with it.

India Foreign Minister Sushma Swaraj said that there cannot be threats to sovereignty in any way, nor will any participating country face financial pressure to cooperate.

The US is looking to counter China, its clear economic rival in recent months, in a bid to thwart the expanse of opposing trade routes. With US-China trade disputes increasing recently and showing no signs of subsiding, it will come as no surprise that the US wants a viable alternative to the BRI in place.

This will include a large financial package to create new infrastructures across the Indo-Pacific, which Australia and Japan will partly construct.

The Overseas Private Investment Corporation (OPIC), the US international development financing vehicle, has confirmed current discussions with India to deliver this initiative.

OPIC President and CEO Ray Washburne said that the deal “will reflect very much like the ones we have with Japan and Australia” and would therefore “allow the three countries to streamline the process of joint investments in energy, transport, tourism and technology infrastructure.”

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