Energy security: China has its capital but India can focus on partnerships

Rather than putting an end to what China is doing, India should try to come closer to reaching some degree of parity, says Michael Kugelman  

By Kundan Pandey
Published: Thursday 02 July 2020

As China, the world’s manufacturing capital, seemingly surrounds India with the help of its close neighbours, energy diplomacy may emerge as a tool for the Indian elephant to outsmart the Chinese dragon.

The energy sector has been a strong pillar of India’s relationship with its neighbours in the recent past. It has signed memoranda of understanding with Bhutan, Bangladesh, Nepal and Myanmar to inter alia improve power connectivity with these neighbouring countries.

In December 2016, Union Minister of State for Power RK Singh had come up with ‘Guidelines on Cross Border Trade of Electricity’. These were later substituted by the ‘Guidelines for Import / Export (Cross Border) of Electricity-2018’, that appeared in December 2018.

In the series of efforts to improve power connectivity with neighbouring countries, the Central Electricity Regulatory Commission (CERC) issued Cross Border Trade of Electricity Regulations, 2019 in March 2019.

Singh provided information about India’s power projects with its neighbouring countries at various stages of implementation while responding to a query in March in a Parliament session:

  • 400 Kilovolt (kV) operation of Muzaffarpur (India) — Dhalkebar (Nepal) 400kV dc line (operated at 220kV)
  • Baharampur (India) — Bheramara (Bangladesh) 2nd 400kV dc line
  • Alipurduar (India) — Jigmeling (Bhutan) 400kV dc (Quad) line
  • Gorakhpur (India) — New Butwal (Nepal) 400kV dc (Quad) line
  • Sitamarhi (India) — Dhalkebar (Nepal) — Arun-3 HEP (Nepal) 400kV dc (Quad) line

India already had regional power system integration with Bangladesh, Bhutan and Nepal through high-voltage synchronous (alternating current) and asynchronous (high voltage direct current) connections, Singh said. 

India can rely on this energy diplomacy to strengthen its relationship with its neighbours even as China seeks to isolate it among them, experts said.

“I would argue that energy and broader connectivity projects, can be a useful vehicle through which to attempt to push back against China's rising influence and presence in South Asia. India has quietly signed a number of energy deals with South Asian countries in recent years,” Michael Kugelman, deputy director of the Asia Program and Senior Associate for South Asia at the Wilson Centre, told Down To Earth in a detailed interaction on email. He added:

These happen to be countries — Bangladesh, Myanmar, Nepal — that have also been heavily courted by Chinese investors. New Delhi, by doubling down and building out these deals, and under the institutional rubric of the regional BIMSTEC organisation, can strengthen its ties with these countries and deliver a few setbacks — albeit modest ones — to Beijing’s own energy diplomacy.

BIMSTEC —  Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation — is an organisation comprising Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand.

However, China has a big share in manufacturing solar panels and batteries — the future of energy security. That means it has the potential to take a lead even in energy diplomacy.

Responding to this, Kugelman said that unfortunately for New Delhi, China was already making a lot of headway with energy diplomacy. It has the capacity, technical expertise, resources and an overarching strategy — the Belt and Road Initiative — that are the envy of many other countries, including India.

This is why India shouldn’t try to reinvent the wheel, but instead fully embracing the energy deals it already has with its neighbours. Further afield, India has energy deals with Vietnam and seeks additional ones with Indonesia and Australia. These are useful partners, because of their rising mistrust of China and their sizeable energy assets.

While India will struggle to deploy capital as quickly as China can overseas to stimulate energy investments, New Delhi does have energy-rich friends around the region.

There are also precedents for Indian cooperation with these countries on energy issues. This is what needs to remain the focus for India — not to try to put an end to what China is doing, but rather to try to come closer to reaching some degree of parity, Kugelman said.

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