Make no mistake. From an economic perspective, China matters to Pakistan much more than India does. Yes, India is a hard to ignore constituent among the South Asian countries, both for political and geographical reasons. And as we saw recently, India has shown its clout in the Saarc grouping, by isolating Pakistan. To a certain extent, Pakistan too needs India to keep its relations with other Saarc members on good terms and, for water.
The reason why it is making panic remarks in the international fora against India's proposed move to cut the water supply to Pakistan under Indus Waters Treaty (IWT), is nothing else. Agriculture is one of the main pillars of Pakistan’s economy, which constitutes 19.8 percent of its GDP and is the largest employer (42.3 percent of the country’s total labour force), according to the latest data from the Pakistan government. If India acts on this front, upping its strategic offensive, there will be severe economic repercussions within Pakistan, which isn't easy for Nawaz Sharif government to handle. For political reasons, Pakistan's political leadership and army need to show India as a perennial enemy, but the irony is its economy can't sustain without India.
But, China commands a bigger place in Pakistan's strategic circles. The Chinese are the biggest trade partner of Pakistan. For 2014-15, the total trade between the two countries was recorded at $12. 299 billion out of which Pakistan’s exports were $2. 126 billion and imports were $10. 17 billion, according to a report in The Nation.
Pakistan exports cotton yarn/fabric, rice, raw hides and skins, chemical material, fish and fish preparations and crude mineral to China and imports machinery (all sorts) and its parts, fertiliser, chemical element, yarn and thread of synthetic fibre, iron and steels, chemical material and product, vegetable and synthetic textile fibre, road vehicles and their parts, non-ferrous metals, tyres and tubes of rubber, the report said. With India, Pakistan's trade is a minuscule, even after India awarding Most Favoured Nation (MFN) status to that country. In 2015-16, out of India’s total merchandise trade of $641 billion that to Pakistan stood at a mere $2.67 billion.
Reasons for Chinese interest in Pakistan isn't easy to understand. China needs Pakistan to check India's influence in the region, and Pakistan needs India for the same reason. India's relations with Pakistan is seemingly beyond revival at this stage and that with China has always been murky.
China's clout in Pakistan isn't just about trade. The dragon has been slowly and steadily increasing its stake in Pakistan's real economy over years. The biggest example of Pakistan economy's dependence on China to improve its fortunes through $46-billion China-Pakistan Economic Corridor (CPEC) projects. The value of this 'economic cooperation' is so high that a recent World Bank report warned that Pakistan's prospects of growing even at modest five percent a year are at risk due to delays in the implementation of the CPEC projects. Should India be worried about CPEC? Yes. Because the China-Pakistan economic corridor is passing through Pak-occupied Kashmir. India has raised its concerns on this already.
Even when signals emerged from India that it might curtail water supply to Pakistan under IWT, Pakistan threatened to take up this issue internationally put pressure on India — mainly with China. Besides trade and economic cooperation, China also plays a major role in aiding military support to Pakistan over a period. Pakistan has returned the favour saying it too will offer full military support to China on a boarder scale to assure safety to the China-Pak economic corridor. In short, there is a bonhomie getting stronger between the two countries that India cannot ignore.
It is in this context, Prime Minister Narendra Modi will have to approach the Brics summit in Goa. As Firstpost noted in an article, the Brics meet this time is even more significant for India in the context of the growing threat of terrorism originating from Pakistan and its impact on rest of the world. India, which managed to completely isolate Pakistan from the Saarc countries in the aftermath of a series of border terrorist attacks by Pakistan-based elements (the latest being Uri), will most likely take up the issue of the Pakistan factor in the Brics meeting. Can India call Pakistan's bluff on aiding terrorism at BRICS is a question.
As the Brics summit kicks off on Saturday, one of the major things to watch is how India will approach to the growing Pakistan-China bonhomie. A friendship is mutually beneficial for Pakistan and China to check India's influence in the region. But, it is a concern for India. How India will plan its moves to check this perceived, obvious threat at the Brics is a big question.