Countering China’s Belt Road Initiative, Trump convinces India to join mega Blue Dot Network to connect Indo-Pacific region
India has nearly agreed to join the Blue Dot Network (BDN), a U.S.-led project aimed at developing an alternative to the China-led Belt and Road Initiative (BRI) -- a global infrastructure development strategy, covering nearly 70 countries in Asia, Europe, and Africa.
While media remained focused on the signing of a $3 billion military equipment deal and lacking of agreements on trade, sources in the Indian government said a convergence between the U.S. and India on the joining the BDN was a major takeaway of President Donald Trump’s recently concluded visit.
Backed by the U.S, the BDN is a G7 initiative involving Canada, France, Germany, Italy, Japan and the U.K. Besides G7 nations, Australia has also joined the initiative to promote “multi-stakeholder sustainable infrastructure development in the Indo-Pacific region and around the world.” The Indo-Pacific region, which stretches from India’s west coast to the west coast of the U.S., is the most economically dynamic and populous part of the world.
Observers believe that BDN -- part of Trump’s Indo-Pacific strategy to counter Chinese President Xi Jinping’s ambitious BRI -- is coming up at a time when Beijing's economy is showing vulnerability. Also, Trump said the two leaders had discussed the Quad, a grouping of the US, Japan, Australia, and India in the Indo-Pacific region. The grouping is seen weaving a string of pearls around China.
It also coincided with the U.S. recognizing India as a net provider of security, as well as developmental and humanitarian assistance in the Indian Ocean region, bounded by Asia to the north, Africa to the west, and Australia to the east.
Besides sovereignty issues, India along with the U.S. has always raised suspicion about the transparency and accountability issues related to the BRI. India has been fiercely opposing the $46 billion worth China-Pakistan Economic Corridor (CPEC), a flagship project of the BRI as it passes through the Gilgit-Baltistan region that New Delhi considers part of the dispute Jammu and Kashmir.
Senior U.S. diplomat for South Asia region Alice Wells also recently criticized the CPEC for not having any transparency in the projects. "By getting Chinese financing for the projects, Pakistan was buying expensive loans and as a buyer, it needed to be aware that what it was doing would take a heavy toll on its already struggling economy," she said.
Modi expresses interest in BDN
During their bilateral talks at New Delhi’s majestic Hyderabad House, Indian Prime Minister Narendra Modi expressed interest in the concept of the BDN mentioned by Trump. The U.S. side described this as a multi-stakeholder initiative, unlike the BRI. They said it will bring governments, the private sector, and civil society together to promote high-quality trusted standards for global infrastructure development.
The joint statement issued at the end of Trump’s two-day official visit also stated that India and the U.S. have recognized that in order to contain the build-up of sovereign debt in developing and low-income countries, it was important to ensure responsible, transparent, and sustainable financing practices for borrowers and creditors.
Indian Foreign Secretary Harsh Vardhan Shringla also confirmed that besides other issues the talks focused on connectivity to link countries by developing maritime, land and air routes. He said that both sides appreciated that connectivity was an important aspect of the Indo-Pacific region.
“But the connectivity should be linked to the respect for territorial integrity, sovereignty of states, good governance, transparency, accountability,” he said.
While confirming that there was a certain level of convergence between India and the U.S. on the issue of joining the BDN, Shringla said that India has asked for details of the project, which is still at a nascent stage. “This is a new initiative. We have asked the U.S. side to share details," he added.
BDN offers short-term projects
Officials in New Delhi point out that the BRI was not a grand success as it is being made out. They pointed out that due to political cronyism and overambitious infrastructure projects, it has created unsustainable levels of debt for partner countries.
A few years back, Sri Lanka had to leased out to China a Beijing-funded port as the government could not afford to finance. Many countries like Kazakhstan, Myanmar, Malaysia, and Nepal had to cut back certain BRI projects for want of transparency and fear of debt.
To compete with Chinese BRI, those behind the BDN -- the U.S. Overseas Private Investment Corporation, Australia’s Department of Foreign Affairs and Trade, and the Japan Bank for International Cooperation -- are offering more short-term projects, without risking long-term control by any other nation.
According to the BDN document, it stresses the importance of local labor rights, apparently referencing China’s tendency to favor its contractors and construction companies. It also noted the value of sovereignty “of property and resources,” likely playing on fears that projects of geopolitical significance like ports and dams could fall into Chinese hands if they become unaffordable, as happened in Sri Lanka.
The United States Agency for International Development (USAID) has already unveiled a $440 million package aimed at the Indo-Pacific region, which also mentioned infrastructure and energy projects as funding priorities. The U.S. International Development Finance Corporation has also decided to establish a permanent presence in India this year. It has also announced a $600 million financing facility for renewable energy projects in India.
Analysts believe that the China factor was visible all over talks between Trump and Modi. Trump, in his press statement, hinted at the American position on 5G networks in India. “We discussed the importance of a secure 5G wireless network & the need for this emerging technology to be a tool for freedom, progress, prosperity, not to do anything with where it could be even conceived as a conduit for suppression and censorship.”
The joint statement also took note of the efforts of India and the U.S. towards adhering code of conduct in the South China Sea to protect legitimate rights and interests of all nations in line with international law, referring to China’s exclusive claims on the waters.