Vol. XLI No. 28 July 09, 2017

India Joins the SCO: Next Step OBOR!

Yohannan Chemarapally

INDIA and Pakistan formally became the latest members of the Shanghai Cooperation Organisation (SCO) at the latest summit of the grouping held in Astana, the capital of Kazakhstan, in the second week of June. The two countries had enjoyed observer status in the organisation for many years and have now been elevated to full membership. Iran is the next country that is expected to join the grouping in the near future. The original members of the grouping initially known as the Shanghai Five that was established in 1995 were Russia, China, Kazakhstan, Kyrgyzstan and Tajikistan. It was rechristened as the SCO after Uzbekistan joined the grouping in 2001. Originally, the SCO was viewed as a security pact and as an emerging rival to NATO. But in recent years it has evolved into an organisation more preoccupied with counter terrorism and the promotion of economic cooperation and trade.

With India and Pakistan now part of the grouping, the SCO has emerged as one of the biggest organisations of its kind in the world with three significant world powers, Russia, China and India under its umbrella. 44 per cent of the world's population, 25 per cent of the world's GDP and three out of five BRICS countries are part of the SCO. The primary focus of the grouping at this juncture is on counter terrorism and other security related concerns. SCO has established a Regional Anti Terrorism Structure (RATS) headquartered in Tashkent, the capital of Uzbekistan.  The Chinese president, Xi Jinping, speaking at the SCO summit, emphasised that “security is the prerequisite for development”. President Xi in a signed article written for a Kazakh paper, pointed out that the SCO has “put in place cooperation mechanisms on combating terrorism, separatism, extremism, drugs and transnational crimes”.

In recent years, militaries of SCO member countries have participated in joint exercises. Russian officials have talked of the Indian army joining such exercises in the future. With Pakistan too a member now, it would be quite a diplomatic feat to get the armies of all member countries to participate in military exercises organised under the auspices of the SCO. Both India and Pakistan were admitted under the strict unwritten condition that they keep their bilateral disputes out of the SCO arena. With Central Asia becoming the crossroad for pipelines and international trade routes, the SCO will be paying even more attention to its economic agenda. When the SCO was formed, the five original members had pledged to enhance regional economic cooperation. That goal has since become a reality in most of the Central Asian region.


The One Belt One Road (OBOR) initiative of the Chinese government has witnessed the enthusiastic participation of all the states in the region and beyond. Only one country, India, along with Bhutan, has given OBOR the pass. Bhutan has really no choice in the matter as its foreign policy is dictated from Delhi. All the leaders attending the SCO summit in Astana, barring the conspicuous voice of the Indian prime minister, supported the OBOR initiative. The declaration issued at the end of the summit “praised the results of the Belt and Road Forum for International Cooperation” that was held in Beijing in May this year. The leaders spoke “in favour of their implementation, including by means of coordinating international, regional and national projects aimed at cooperation in maintaining sustainable development based on the principle of mutual respect, equality and mutual benefit”. President Xi, has said that the SCO will put in place bilateral security mechanisms for OBOR to ensure the security of gas pipelines and big infrastructural projects in the region.

The Pakistan prime minister in his speech specifically welcomed the Chinese president's suggestion on a five year treaty of good neighbourliness to be signed by all the SCO members. The expansion of the SCO, Sharif said, has come at the “opportune time”, noting that it coincided with the launch of OBOR and the consequent transformation of the global economic landscape. “In Pakistan, we are diligently implementing the China-Pakistan Economic Corridor, which is a flag of the OBOR”, the Pakistan prime minister said. “What is more, these mega projects will benefit the entire SCO community”.

OBOR, also known as the Belt and Road Initiative, now has the backing of most countries worldwide. Even the United States and Japan, which were supposed to be India's all weather allies in their opposition to OBOR, sent high profile delegations to the Beijing Belt Road summit in May. Japan's prime minister, Shinzo Abe, has now declared that Japan is willing to cooperate with China on the Belt Road Initiative. The Japanese government, like its right wing counterpart in India, continues to be of the view that OBOR is a tool to advance China's strategic and economic goals. But at the same time, Tokyo has realised that by not climbing on the fast moving OBOR train, it would be left to play second fiddle to China in the Eurasian region, besides losing out on lucrative business opportunities in high speed rail and infrastructural projects. OBOR plans to connect Asia and Europe by both land and sea. India's membership of the SCO could signal the first step, albeit hesitant, to prepare for joining the Belt Road initiative.

 At the Astana summit, Prime Minister Modi, once again raised the issue of “territorial integrity and sovereignty” while referring to the grand infrastructural projects being planned for the region. India has objected to the $50 billion China Pakistan Economic Corridor (CPEC) infrastructural project which is an important component of the OBOR project, as being intrusive on India's sovereignty. The only route possible for goods to be transported to and from China was through the road and rail network passing through the “disputed territory” of Gilgit/ Baltistan, which is part of Pakistan administered Kashmir. Beijing has repeatedly tried to convince India that the passage of the railway through the territory does not in any way signal a change in its Kashmir policy.

The International North South Transportation Corridor which India wants to develop can be much better done in coordination with OBOR. India's attempts at developing the Iranian port of Chabahar are reportedly facing problems, accentuated by the Trump administration's growing military and economic threats against Teheran. The nearby port of Gwadar meanwhile is all ready for business and is a key hub of the Belt Road initiative. Chabahar was supposed to be India's gateway to the Central Asian market. India had committed $500 million for the development of the port after the Obama administration had lifted sanctions on Iran last year. As of now only, Chinese firms are bidding for contacts to supply heavy machinery for the Chabahar project. European companies are reluctant to bid for the tenders fearing the future moves by the Trump administration against Iran.  

Though the prime ministers of both India and Pakistan were present at the summit. Narendra Modi and Nawaz Sharif did not meet for talks on the sidelines, like they had done during a previous SCO summit in Ufa, Russia in 2015. Surprisingly, the Chinese president also did not schedule a meeting with Nawaz Sharif, given the fact the two countries are the closest of allies. It has been speculated in the media that the Chinese side was conveying its displeasure over Islamabad's handling of terrorism, especially in the restive province of Balochistan. Two Chinese school teachers were kidnapped and later killed by Daesh (Islamic State) terrorists in the first week of June, just before the SCO summit in Astana. Peace and stability in Balochistan is crucial for the success of the CPEC/OBOR project.

Prime Minister Modi did however have “cordial” talks with the Chinese president, Xi Jinping at Astana. It was the first meeting between the two leaders after the Indian refusal to participate in the Belt Road summit in Beijing. The Indian government is still miffed with China's reluctance to give it entry into the exclusive Nuclear Suppliers Group (NSG). Modi conveyed to the Chinese president the important need to respect each others’ “core concerns”. According to the Indian external affairs ministry spokesperson, Modi told the Chinese leader that the two sides should strengthen communication and cooperation in international affairs.  He conveyed India's gratitude for China's help in India's ascension into the SCO. The prime minister acknowledged that it would have been difficult to get SCO membership without the backing of Beijing. China no longer expects reciprocity from New Delhi in the form of a membership in SAARC where India is the major power. China has observer status in the SAARC at present. The SCO, unlike SAARC, seems more cohesive. The SAARC is not even able to hold annual summits. The Indian foreign secretary, S Jaishankar, told the media in Astana, that the “entire spectrum of bilateral relations” was discussed during the talks between Modi and Xi.


President Xi speaking to the media after his meeting with the Indian PM, said that given the profound and complex political changes that the world is witnessing, China and India, as the world's fastest growing economies, Xi stressed, “should pay more attention to cooperation and go ahead with each other as partners”. The Chinese president said that the two countries should also boost trade and investment cooperation. It was a barely disguised invitation to India to rethink its reluctance on joining the Belt Road Initiative. President Xi was careful to avoid the impression that he was trying to arm twist the Indian government in any way. Xi said that his country would be willing to cooperate with India within the SCO format.  The Chinese side has said that it would not beg any country to join OBOR. “We are willing to see the initiative help build a cooperative platform for countries along the route, but China does not need to beg any countries, Japan and India included, to join the initiative”, said the Global Times, a newspaper that is known to be close to the authorities in Beijing.

The Chinese foreign ministry was slightly less diplomatic while describing the Modi-Xi talks. The Chinese foreign office spokesperson said in Beijing that both countries should “also address sensitive and major issues”. She went on to add that the two sides “should strengthen the complementarities of the development strategies and press ahead with major cooperation projects such as energy and railways. The spokesperson also stressed on the need for cooperation between the two countries to speed up connectivity and infrastructural development in the Bangladesh, China, India, Myanmar (BCIM) corridor. The OBOR has many important projects in the BCIM corridor. The logical next step for India should be to join OBOR and be part of the international mainstream.