NEW GEOPOLITICAL CHALLENGES FOR INDIA WITH THE LAUNCH OF CPEC 2.0

NEW GEOPOLITICAL CHALLENGES FOR INDIA WITH THE LAUNCH OF CPEC 2.0

7-SEP-ENG 2

RAJIV NAYAN AGRAWAL

DELHI---------------------------In the current global geopolitical scenario, two major focal points of tension between China and the US have emerged: US tariff policy and China's strategic expansion. While the Trump administration is embroiled in a trade war, China has strengthened its geopolitical hold through strategic partnerships with countries like India, Russia and North Korea. In this context, the launch of the second phase (CPEC 2.0) of the China-Pakistan Economic Corridor (CPEC) has posed new challenges for India.

Expansion of the project: China and Pakistan have signed 21 new agreements worth $8.5 billion, including five new economic corridors under the second phase of CPEC. The project connects China's Xinjiang to Pakistan's Gwadar port, which is a direct threat to India's sovereignty as it passes through the disputed Gilgit-Baltistan region.

India has consistently opposed CPEC, calling it a “sovereignty violation”. This project not only gives strategic advantage to Pakistan but also provides an opportunity for China to make military inroads into the Indian subcontinent.

Trump's Tariff War: After the US imposed a 50% tariff on Indian goods, India decided to increase trade relations with China. Trade between the two countries reached $136 billion in 2025, with India's trade deficit being $73 billion.

China's Dual Strategy: On the one hand, China is increasing economic cooperation with India, while on the other hand, it is trying to surround India by giving military-economic support to Pakistan through projects like CPEC.

Strategic Balance: India will have to prioritize its security and economic interests while maintaining a balance between the US and China. Counteraction to CPEC: To reduce the impact of CPEC, India will have to rapidly advance initiatives like Chabahar Port (Iran) and Indo-Pacific Partnership.

Considering China’s “dagger hidden behind friendship” strategy (as seen in the 1962 war and the Galwan Valley dispute), India has to be cautious about projects like CPEC 2.0. Also, there is a need to revive relations with the US and increase alliances with allies in South-East Asia (such as Vietnam, Japan).

The question arises whether India is prepared to counter China’s “debt and diplomacy” strategy? The answer lies in India’s multi-pronged foreign policy and self-reliant economy (“Aatmanirbhar Bharat”).