India dusts off own Belt and Road plans but risks 'destructive competition' with China

After initially treating China’s Belt and Road Initiative as a local venture, India has launched its own Project Mausam plan that experts say could be a “win-win” for the region at the risk of stirring tensions between the two powers

  • By Elliot Wilson
  • 12 Oct 2017
Email a colleague
Request a PDF
Jaitley: counteracting China’s influence © Some rights reserved Hervé Cortinat/OECD
India’s aim of building a new multinational trade project able to compete directly with China’s Belt and Road Initiative (BRI) risks causing tensions between the two regional powers, senior officials and analysts have told GlobalMarkets.
However, they said that Project Mausam, the working name for India’s proposed trade initiative, should, if handled properly, benefit every nation in South Asia. 
Project Mausam was first mooted after the election of Indian premier Narendra Modi in 2014, before being brushed under the carpet. But sources said it was revived during a two-day Indian Ocean Conference held last month in the Sri Lanka capital, bringing together officials from 35 countries including India’s external affairs minister Sushma Swaraj. 
Indrajit Coomaraswamy, governor of the Central Bank of Sri Lanka, tipped India’s hopes of re-establishing powerful ties with its ancient trade partners to be a “win-win” for states across the littoral of the Indian Ocean, from southeast Asia to Pakistan and eastern Africa to the Arabian Peninsula. 
But he admitted Project Mausam, named after the seasonal monsoons that sailors used to ferry trade across the Indian Ocean, would “ cause tension” between China and India. Relations between the two have been frosty since a brief border war in 1962. 
But he said having two rising superpowers competing for commercial predominance in the Indian Ocean arena “does not necessarily have to be destructively competitive”. “One can foresee a complementary outcome, where both sides co-operate to compete, that benefits everyone in the region.” 

Slow to react

India has been slow to react to China’s ambitious attempts to redraw the global trade map in its own image. At first, India viewed the BRI as a project limited to China’s sphere of influence in its immediate vicinity, stretching through the South China Sea to south­east Asia. 

But China’s funding of a host of major infrastructure projects across South Asia has forced India’s hand. During a visit to Bangladesh last week, finance minister Arun Jaitley made operational a $4.5bn line of credit with an annual interest rate of 1%, repayable over a 20-year period, to fund new railways, roads and ports — a direct attempt to counteract China’s influence on its doorstep. 
In Sri Lanka, firms from India, Japan and Singapore are working together to build new facilities at Trincomalee port in the island’s east — a handy counterweight to Hambantota, a deep water port on Sri Lanka’s southern coast operated by Chinese state firms. 
But Coomaraswamy said Indo-Chinese competition in the region benefited Sri Lanka as well as every regional state. “China’s blue water navy is here, and the Japanese, Americans and Indians don’t want them to have the map to themselves. The emerging geopolitics works to our strategic advantage.”
India has shown no interest in joining China’s BRI, a situation that is unlikely to change. “I don’t see that happening,” said Saurabh Mukherjea, chief executive of Mumbai-based Ambit Capital. “There’s no pressure to join the [BRI].” 

  • By Elliot Wilson
  • 12 Oct 2017

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 32,228.41 90 9.52%
2 JPMorgan 29,275.24 85 8.65%
3 HSBC 22,158.47 68 6.54%
4 Barclays 21,006.51 59 6.20%
5 BNP Paribas 19,552.53 45 5.78%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Bank of America Merrill Lynch 9,498.80 2 85.71%
2 Swedbank 160.81 1 1.45%
2 Sumitomo Mitsui Financial Group 160.81 1 1.45%
2 SEB 160.81 1 1.45%
2 Nordea 160.81 1 1.45%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 UBS 709.14 2 24.60%
2 Citi 693.55 2 24.06%
3 ING 220.22 2 7.64%
3 Bank of America Merrill Lynch 220.22 2 7.64%
3 ABN AMRO Bank 220.22 2 7.64%