During the G20 summit in New Delhi on September 10, 2023, Saudi Crown Prince Mohammed bin Salman (MBS) announced signing more than 50 Memorandum of Understanding (MoUs) between Saudi Arabia and India. The MoUs aim to establish a new economic corridor to build railways, pipelines for the transmission of hydrogen and electricity, and ensure a major contribution to global energy security. The corridor will interconnect India, the Middle East, and Europe, thereby facilitating enhanced commercial trade among these regions.
On September 11, 2023, Crown Prince Muhammad Bin Salman made a state visit to India. He was accompanied by a sizable delegation comprising ministers and business representatives. The visit was concluded by signing more than 50 MoUs/agreements worth $100 billion with Prime Minister of India Narendra Modi, among which a comprehensive energy partnership received particular emphasis.
Being a member of the G20 group, Saudi Arabia occupies a substantial position within India’s strategic outreach to the Middle East North Africa (MENA) region, alongside Turkey. Having the largest economy in the Middle Eastern World, Saudi Arabia plays a pivotal role in India’s strategic considerations. In the fiscal year 2022-2023, bilateral trade between India and Saudi Arabia reached approximately $52.76 billion, with India experiencing a trade deficit of $31.31 billion due to imports amounting to $42.04 billion and exports totalling $10.73 billion.
It is utterly illogical to assume that India, Arab nations, Israel, and European countries, which have opposed China’s Belt and Road Initiative (BRI), would rely on China for their own Belt and Road projects
Pakistani security and political analysts suggest that as Saudi Arabia is forging political and economic ties with Israel through a proposed economic corridor linking India with the entire Middle East, Pakistan should reassess its relationship with India for economic reasons and regional connectivity. They propose that Pakistan should pave the way for India to connect with the Arab nations through Gwadar port.
The regional geo-strategic and geo-economic realities are different. Saudi Arabia and Israel do not need Pakistan in either case. Additionally, India possesses far better ports in the Arabian Sea compared to Gwadar for connecting with the Middle Eastern world. India has even inked agreements with the United States for a strategic partnership to provide shipbuilding facilities and oil exchange to the US at its ports. PM Modi and President Biden have also hailed the signing of agreements to cooperate in the fields of Quantum Economic Development, Telecommunications, Space Technology, Semiconductor Supply Chain, and Artificial Intelligence.
Notwithstanding these facts, Pakistan has almost ceded control of Gwadar port to China, thereby leaving Pakistan devoid of authority over the port. It is utterly illogical to assume that India, Arab nations, Israel, and European countries, which have opposed China’s Belt and Road Initiative (BRI), would rely on China for their own Belt and Road projects. Furthermore, it would be irrational for China to relinquish its strategic port to India, Israel, and Europe for their economic and political interests.
The significance of Pakistan for India lies in its connection to Central Asia, particularly for access to the region’s oil, gas, and non-oil markets. India’s route to Central Asia entails linking with Iran through a pipeline and subsequently traversing Afghanistan. Pakistan falls on this route. However, following Russia’s cessation of gas supply to Europe, India has realized that it no longer necessitates Pakistan. India withdrew from the gas pipeline project due to American sanctions on Iran, and the Pakistan-Iran project is also on hold. Iran is even threatening Pakistan with an $18 billion penalty if it fails to complete the project.
Currently, India aligns itself with the West, where Iran is viewed as an adversary rather than a friend. Other Central Asian countries still maintain their ties with Russia, but they are gradually succumbing to China’s influence. Consequently, if geopolitical and geo-strategic scenarios are changed in the future, India will not rely on Central Asia, at least not via Pakistan but Iran. Additionally, India possesses its own port, Chahbahar, for trade with Afghanistan and the CARs. India also acknowledges that the ongoing conflict between the Taliban and Pakistan has disrupted trade routes and commerce with Afghanistan. Looking for alternate routes becomes essential for India.
During the fiscal year of 2019-2020, the trade volume between Pakistan and Afghanistan was around $4 billion, but this figure has decreased to $1 billion in subsequent years. Despite its dire economic situation, Pakistan has kept its business channels closed and is willing to bear the loss of the remaining $3 billion. It appears that the relationship between Pakistan and Afghanistan is deteriorating. The supply of coal from Afghanistan, vital for Pakistan’s power plants, has also been disturbed after heavy taxes were imposed on it by the Afghan Taliban. It has further impeded Pakistan’s capacity to generate affordable electricity.
Today’s Taliban are not Pakistan’s Frankensteins, rather they are rulers of Afghanistan. Their current role in governance is categorically distinct from their previous role
Moreover, Pakistan has blocked trade and business routes to Afghanistan to exert pressure on the Taliban government to act against the Pakistani Taliban (TTP). Compliance by the Taliban could lead to internal rebellion and the collapse of their own government. However, these sanctions imposed by Pakistan will impact the remaining $1.4 billion in trade. If the situation remains the same, India and Iran, through Chahbahar, are likely to meet Afghanistan’s needs instead.
Another consequence of these actions is that the interim Afghan Taliban government may gravitate towards India and Iran, distancing itself from Pakistan.
The untoward economic and security developments between the two immediate neighbours favour none. To add more, the Pakistani Taliban’s attacks on border areas and their attempted occupation of certain territories have deeply alarmed the Pakistani government and military, prompting them to reconsider their strategy towards Afghanistan and combatting militants in the borderlands.
Significant changes have already occurred in Afghanistan. This is not the Afghanistan of the 1990s. The polarization has not only affected the Afghan Taliban on ideological grounds but has also compelled ordinary Afghans to rethink in liberal terms. Religious fanaticism no longer holds sway in Afghanistan. Today’s Taliban are not Pakistan’s Frankensteins, rather they are rulers of Afghanistan. Their current role in governance is categorically distinct from their previous role, which brought Afghanistan to the brink of complete disaster.
Afghans also expect their government to deliver necessary services and functions. Similarly, the character of the Taliban has evolved over the past 20 years of the US presence in Afghanistan. They are reimagining the principles of governance and demonstrating a far better understanding of how to handle the crisis to ensure stability and security.
In the evolving regional geopolitical and geo-strategic landscape, Pakistan must reassess its political and economic policies accordingly. Losing Afghanistan and Iran means losing economic, political, and security interests in the region. Failure to implement effective policies and pursue goals will lead the country towards isolation and confront it with vibrant economic and political challenges.