Trading blocks

OBOR: As Mamata seeks Chinese investment for Bengal, why is Delhi bent on playing spoilsport?

The Centre has reservations over China’s One Belt One Road project, which could greatly benefit the eastern state.

In June, China will hold a high-profile meeting of stakeholders, existing and potential, of its One Belt One Road project – the world’s largest logistics and infrastructure-building initiative that aims to achieve connectivity across the Eurasian super-continent that will be to the benefit of industry, trade and commerce for all parties involved. Beijing will host many heads of government from Eurasia and beyond. After much deliberation, the United States has also decided to attend, keeping aside its economic and strategic rivalry with China.

The Indian government, too, is unsure of its participation. It has cited security and sovereignty concerns over the under-construction China-Pakistan Economic Corridor as an excuse, while other countries like Vietnam who have long standing territorial disputes with China don’t have any problem with joining One Belt One Road with an active rail link between Kunming and Hanoi. And while Delhi drags its feet over One Belt One Road, it also understands that its sheer scale will make it the principal economic axis of Eurasia, irrespective of whether it signs on to it or not.

Amid India’s reservations, West Bengal Chief Minister Mamata Banerjee has shown a keen interest in attracting Chinese investment to her state. And various trade and industry bodies in that country have reciprocated by extending multiple invitations to Banerjee to visit and explore opportunities for Chinese investment. Therefore, when Ananda Bazar Patrika, Bengal’s leading Bengali daily, reported earlier in May that the Union government had refused Banerjee permission to attend the One Belt One Road conference in June, there was an outcry in the state’s political circles. However, the Union Ministry of External Affairs rebutted the press report, stating that “no reference for such clearance has been received and therefore, the question of denying it doesn’t arise”.

This whole episode exposes the tense Centre-state relationship between Delhi and Kolkata, thanks to a growing political rivalry between the Bharatiya Janata Party and the Trinamool Congress that has often resulted in a war of words between Prime Minister Narendra Modi and Banerjee. But beyond that, it also shows Bengal’s growing interest in maximising its economic development with opportunities that China might offer. In doing so, pre-existing issues of conflict between Delhi and Beijing are irrelevant. After all, even after China’s acquisition of Aksai Chin, a disputed region in Ladakh, and its infrastructure-building activities in Pakistan-administered Kashmir, no security or sovereignty concern stopped Modi, when he was chief minister of Gujarat, from visiting China to attract investment.

Historical connect

As West Bengal looks to China for economic cooperation, it retraces something it has done for centuries. The Himalayas, conjured up in Indian textbooks as an unsurmountable barrier, have hardly ever been a hurdle to trans-Himalayan international ties. The Sino-Bengal relationship predates the formation of the Indian Union by many centuries. In fact, the earliest mention of the name Bangla in print was in China.

The relationship was especially deep during the rule of the Ming dynasty (1368–1644), described as “one of the greatest eras of orderly government and social stability in human history”. Compared to the geo-political distance between Delhi and Beijing today, the geo-political distance between Bengal and China in that era was so close that Bengal sent 12 diplomatic missions to Nanjing, the Ming capital, in a period of 35 years, between 1405 and 1439. Some of these missions had more than 200 envoys. When a ruler of Bengal died in 1412, Zhu Di, the Yongle (perpetually happy) emperor of the Ming dynasty, sent his confidante Hou Xian to offer his condolences.

While these marked the deep relationship between two sovereign countries, China was the bigger power – the Middle Kingdom around which the international politics and diplomacy of this part of the world happened, similar to the role India unsuccessfully aspires to in South Asia today. Areas, ties and alliances were differently imagined a few hundred years before the British made Kolkata the base of their colonial grab. What they grabbed, they called India. The partitioning of this part of the world into East Asia, South Asia, Central Asia and South-East Asia reflects, more than anything else, the colonial imagination of the last three centuries. When threatened with an attack from the neighbouring independent Jaunpur sultanate, Bengal sought China’s intervention. China sent a high-level diplomatic mission to Jaunpur, again led by Hou Xian and ably supported by Admiral Zheng He. The matter was settled without conflict. Back then, Delhi was not a major player here.

Bengal’s loss

China is the manufacturing hub of the world and has a positive trade balance with every country it does business with. The Indian Union has systematically impoverished its eastern states through decades of freight equalisation policy – under which it subsidised the transportation of minerals for factories being set up across the country but ended up hurting the economic prospects of mineral-rich states – and consequent de-industralisation. From time to time, Delhi has come up with public relations stunts like “Look East” and “Act East” to revive the eastern states. But reality sinks in when Delhi torpedoes an already agreed upon Sagar port project and denies permission to the proposed Tajpur port, both in Bengal – systematically denying the state the opportunity to develop its strategic geo-economic location.

The Indian Union’s much hyped Bangladesh-Bhutan-India-Nepal regional connectivity project is all but dead with Bhutan pulling out of it. It is in this context that One Belt One Road project can be an economic game changer for Bengal by ensuring market connectivity with the rest of Eurasia – a link the state has enjoyed historically.

Delhi and Beijing have border disputes. Beijing does not mix business and disputes, but Delhi’s antagonistic stance against One Belt One Road using the excuse of the China-Pakistan Economic Corridor shows that it is willing to disrupt the economic development of its eastern territories as some kind of strategic victory. For West Bengal, this is as good as forced economic harakiri in the service of Delhi’s supposed strategic concerns. Sadly, Delhi is not ready to cough up any compensation to Bengal, forget about matching China.

The China bogey that Delhi bandies about is a red herring. Strategic concerns have not stopped the Make in India mandarins from getting their giant statue of Vallabhbhai Patel in Gujarat largely manufactured in China. Nor have they been a hurdle to the $1-billion Chinese Industrial Park project near Ahmedabad. These strategic concerns also did not stop Union Transport Minister Nitin Gadkari from revoking a ban on e-rickshaws and inviting Chinese e-rickshaw manufacturers to form joint ventures with Indian companies – with the Gadkari-founded Purti group having a stake in the sector. Pure coincidence, right? China is India’s fastest growing foreign direct investment partner. West Bengal, due to its location, is poised to gain the most through a plug-in to the One Belt One Road project. Yet, while BJP-ruled states gain from huge Chinese investments, when it comes to a project that may benefit a non-BJP state like West Bengal, all kinds of concerns creep up. In Delhi’s narrative, the international project is a security concern while Chinese investment in BJP-ruled states is pure tricolour, even saffron. This double standard must end.

Prime Minister Narendra Modi hosts Chinese President Xi Jinping in Ahmedabad in September 2014. The Chinese Industrial Park project was signed during this visit. (Credit: PTI)
Prime Minister Narendra Modi hosts Chinese President Xi Jinping in Ahmedabad in September 2014. The Chinese Industrial Park project was signed during this visit. (Credit: PTI)

What China wants

China seems to be less choosy. It wants India in One Belt One Road. West Bengal stands to gain from this given its location and micro, small and medium enterprises sector excellence. Beijing wants to set up manufacturing units in Bengal for markets in China and the world. Recently, six large Sino-Bengal manufacturing joint ventures have been proposed in agro machinery, fertilisers, food processing, chemicals, pesticides and seeds. When Chinese Vice-President Li Yuanchao met Mamata Banerjee in Kolkata in 2015, Delhi circles were concerned that West Bengal might ask the China-dominated Asian Infrastructure Investment Bank for loans at rates lower than what Delhi offers. Delhi even offers credit lines to Bangladesh at rates lower than its loans to West Bengal. But economic dynamics is a sheer force of nature. The daily flight from Kolkata to Kunming (K2K in industry parlance) in China’s Yunnan province is always nearly full. China has proposed a K2K railway and road link. Delhi is again the spoiler.

This new K2K connection is closely aligned to the old Southern Silk Route – the trade route extending from Yunnan to India that dates back to the 2nd century BC – of which Bengal was a part. Bengal’s excellent historical international trade and commerce connectivity is evidenced by the gift the country of Bengal gave to the Ming emperor during a diplomatic mission in 1414 and then again in 1438 – a giraffe imported from East Africa on both occasions. Bengal imported things of scale from far-away worlds and exported them across the Himalayan barrier to China. Whether Delhi likes it or not, the present century belongs to China as it regains its rightful place in world industry, trade and commerce. The question is, will Delhi allow West Bengal to regain its rightful place?

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This article was produced on behalf of Abbott by the Scroll.in marketing team and not by the Scroll.in editorial staff.