CPEC 2.0 and the Kabul talks: Why India cannot ignore China’s moves in the neighbourhood

Chinese Foreign Minister Wang Yi met Taliban Foreign Minister Amir Khan Muttaqi and Pakistan Foreign Minister Ishaq Dar in Kabul as part of the 6th Trilateral Meeting aimed at discussing regional connectivity and possibly narrowing the gap between Pakistan and the Taliban regime in Afghanistan. Beijing’s broader objective, however, was to explore strategic closeness in Afghanistan and push for Kabul’s formal inclusion in the Belt and Road Initiative (BRI), which remains President Xi Jinping’s central pillar for expanding China’s global influence. The talks also explored potential security cooperation against terror groups and attempts to foster political trust among the three countries.

According to an analysis by China’s state-run media outlet, Global Times, the very existence of a trilateral dialogue indicates that all parties recognise the importance of peace and development. In this context, Wang Yi emphasised China’s commitment to enhancing trust with Afghanistan and Pakistan, advocating mutual understanding and support on issues related to each other’s core interests, while condemning external interference in the region.

The Question of CPEC 2.0

Although the dialogue was positioned as China playing mediator to preserve the so-called “iron brotherhood,” Beijing’s priorities were clear. At the heart of its agenda was the extension of the China-Pakistan Economic Corridor (CPEC) through transit routes via Kandahar and Kabul. This fits into China’s larger strategy of leveraging Afghanistan’s vast natural resources and pushing its integration with the BRI.

China and Pakistan also reaffirmed their resolve to upgrade the CPEC by focusing on developing special economic zones, accelerating industrialisation, launching livelihood projects, and strengthening their “ironclad” ties. While the initial phase of CPEC largely focused on road and highway development, its second phase — dubbed CPEC 2.0 — has become Pakistan’s economic lifeline. However, it could also mark the last vestiges of Islamabad’s economic sovereignty. Given Pakistan’s dire economic conditions, depleted foreign reserves, and dependence on recurrent IMF bailouts, Islamabad appears set on deeper reliance on Beijing under the upgraded framework of CPEC.

The problem, however, is that CPEC’s momentum has slowed in recent years due to political instability in Pakistan, persistent security threats, and Beijing’s growing reluctance to deploy large-scale financial resources in the region. Since 2021, at least 20 Chinese nationals have been killed in targeted attacks in Pakistan, mostly orchestrated by separatist groups in Balochistan, who accuse China of exploiting local resources.

For Beijing, the trilateral meeting served as a platform to address these security concerns and push forward its larger CPEC agenda. Chinese officials have repeatedly stressed that CPEC’s success depends on Islamabad’s ability to guarantee the safety of both infrastructure and Chinese personnel.

Pakistan, however, has shifted part of the responsibility onto Afghanistan, citing the presence of Tehreek-e-Taliban Pakistan (TTP) militants operating from Afghan soil and the activities of Baloch insurgents, which complicate Islamabad’s ability to function as a fully compliant client state for Beijing. In this context, the trilateral diplomacy gains significance as China attempts to leverage its political influence to improve Pakistan-Afghanistan ties while advancing its wider BRI objectives.

Can China Act as a Mediator Between Pakistan and Taliban?

Beijing has positioned itself as a mediator between its uneasy “ironclad partners,” but the trilateral summit exposed deep rifts between Pakistan and Afghanistan — fissures that Beijing cannot resolve overnight. Pakistan entered the talks demanding strong action against the TTP and the Baloch Liberation Army (BLA). Kabul, however, unequivocally rejected the idea of military action against the TTP, insisting that it remains Pakistan’s internal problem.

An emboldened Kabul, strengthened by Beijing’s overtures, has reduced Pakistan’s political and economic leverage. However, one point of convergence did emerge: a shared concern over the Baloch insurgency and its attacks on CPEC facilities. Beijing pressed for stronger measures against such insurgencies, reflecting its immediate priority of securing economic interests rather than resolving Pakistan’s broader security dilemmas.

China’s ambitions, however, go far beyond crisis management. Its deeper interests lie in Afghanistan’s vast mineral wealth and integrating the Taliban regime into the BRI framework to secure strategic access to Central Asia. Still, scholars like Stella Hong Zhang caution that Chinese state-owned enterprises and banks remain sceptical of the risks involved in expanding their footprint in such a volatile environment. Without addressing Pakistan’s insecurities vis-à-vis Afghanistan, CPEC risks remaining an underutilised project.

In reality, both the Taliban and Beijing view the challenges posed by the TTP and BLA less through the lens of Pakistan’s sovereignty and more through the prism of safeguarding China’s investments and economic ambitions.

Should New Delhi Be Worried?

For now, much of China’s rhetoric remains aspirational. While statements suggest that CPEC’s expansion into Afghanistan is inevitable, its success depends heavily on ground-level coordination. Pakistan hopes that deeper integration with China’s economy will help salvage its financial crisis, but persistent gaps between Pakistan and Afghanistan make the dream of CPEC 2.0 a distant one.

That said, New Delhi cannot afford complacency. A stronger Chinese presence in the region could cement the Taliban’s legitimacy and tighten Pakistan’s economic dependence on Beijing, creating new strategic challenges for India. India, however, has its own bilateral channels of communication with the Taliban. If managed carefully, these ties could provide New Delhi with critical leverage in balancing China’s growing influence.

China’s simultaneous engagement with both New Delhi and the Pakistan-Afghanistan axis is complex but offers India opportunities. As Beijing attempts to reconcile Islamabad and Kabul while overextending itself economically and diplomatically, India could accelerate its development of Chabahar Port in Iran as an alternative trade route for Afghanistan. This would reduce Kabul’s dependence on the China-backed Gwadar and Karachi ports.

India must remain vigilant, however. Beijing’s efforts to integrate Pakistan and Afghanistan into CPEC directly challenge India’s sovereignty, particularly concerning Pakistan-occupied Kashmir (PoK), through which CPEC passes. China’s strategy also strengthens Pakistan’s capacity to leverage state-sponsored terrorism against India, tying New Delhi down in the neighbourhood while Beijing expands its influence.

China’s intentions were evident in Wang Yi’s statements during his Pakistan visit, immediately following his trip to India. He declared, “As a staunch friend, China will, as always, firmly support Pakistan in safeguarding its national sovereignty and territorial integrity, support Pakistan in exploring a development path that suits its national conditions, and support Pakistan in resolutely combating terrorism.” The choice of words — “staunch friend,” “as always,” and “safeguarding national sovereignty and territorial integrity” — sends an unmistakable message to India.

The Chinese envoy to India, Xu Feihong, echoed similar sentiments in New Delhi, stating, “Terrorism is the enemy of the global world… So not only China and India but in fact Pakistan are also victims of terrorism. So, what we should do now is a joint effort to fight against the terrorists.”

India’s neighbourhood remains its most critical line of defence, and Beijing’s intentions are increasingly transparent. New Delhi must remain cautious of China’s overtures and step up its strategic and diplomatic engagement in Afghanistan.

Dr Sriparna Pathak is a Professor of China Studies, and the founding Director of the Centre for Northeast Asian Studies at O.P. Jindal Global University, (JGU) Haryana, India. She also serves in the capacity of a Senior Fellow, at the Jindal India Institute. Upamanyu Basu is an Assistant Professor of Politics and International Relations in Manav Rachna International Institute of Research and Studies.