Explained National

India Not Reliant on Pumping Debt to Neighbors, Has This Proved to be the Right Approach?

Whenever the geopolitics of Asia is discussed, it will always have this element of who is ahead in the region between India and China in the power play. It is true that India appears not to be in a position to spend an equaling portion of the money that is being spent on the part of China for the Asian neighbors. But is this only the resources and the money that decides the balance of power, in which case India may stay behind? Some recent trends do indicate that things don’t work necessarily in that way. In our earlier article, we explained how India adopted a different method of dealing with its neighbor in more sustainable way than just pumping money in the form of debt.

Here are two noticeable events in the recent times that further backs the opinion that the relationship with other countries can’t be built only on economic terms.

  1. The stress emerging from China Pakistan Economic Corridor testifies the fact that pumping debt money may not be sustainable in the long run.
  2. Despite the investments and other influence of China on Asian countries, India’s strong emergence in global politics has made most of the neighboring countries to respect India’s interests. A very warm tone of newly elected Sri Lankan President Gotabaya Rajapaksa, who earlier perceived to be leaning on China, very much testifies this fact.
China’s Debt Model, Not So Effective?

The US entered into the CPEC debate by warning Pakistan about the debt trap it is entering. US South Asia Assistant Secretary Alice Wells said the multi-billion-dollar project would take a toll on Pakistan’s economy. He emphasized the CPEC was not an aid to Pakistan but a form of financing that guaranteed profits for Chinese enterprises, with little benefits for Islamabad.

According to another report, Pakistan is forced to look beyond China to make sense of the economic corridor. The reports quoted the officials saying, “We need all the revenue we can get to make this project financially feasible. Just Pakistan on its own cannot generate the revenues to afford the huge debt, which will come if all the CPEC-related projects are undertaken.”

In October 2019, writing in The Diplomat, a Pakistani journalist wrote “in a break from earlier feverish optimism, discussions about the CPEC have become more muted in Pakistan.”

Even the Pakistani media have highlighted in the past, how CPEC with many clauses over their resources tilts extremely in favour of China.

Shri Lanka’s Example

When Gotabaya elected in Sri Lanka, apprehensions were raised in the media that his administration lean more towards China.

But in an interview to the India-based publication Strategic News International, Sri Lankan President Gotabaya Rajapaksa categorically said that they will work with India as a friendly country and won’t do anything that will harm India’s interests.

Further, an important statement with regard to China was also made in this interview.

The President has said that the Sri Lanka’s involvement with China during the presidency of his elder brother Mahinda Rajapaksa was “purely commercial”, and also felt that the giving away the Hambantota port to China on a 99-year lease was a mistake by the previous government.


In both the examples of Pakistan and Sri Lanka, one common takeaway is that the model of pumping loans and thereby influencing any country is not really succeeding. India that never followed this model seems to be on the right path when it comes to dealing with neighbors.


You may want to read our earlier articles:

India’s Diplomatic Assertiveness – Dealing with Turkey and Malaysia Gives a Stern Message

PM Modi Attending the Swearing-in Ceremony in Maldives – Puts the Negative Propaganda to Dust

No Nation is Small – How India is Unique in Its Approach to Neighbours