The opening of Gwadar Free Trade Zone on China’s new Silk Road disappoints New Delhi

The Pakistani port is the flagship project of the US$ 50 billion China-Pakistan Economic Corridor. Its annual output is expected to reach US$ 790.5 million when in full operation. India oppose the corridor because it runs through the disputed territory of Kashmir.

Gwadar (AsiaNews) – Pakistani Prime Minister Shahid Khaqan Abbasi yesterday inaugurated the first phase of the Gwadar Free Trade Zone (FTZ), in the southern province of Balochistan.

The FTZ in the port city is the step in the development of the coastal region, viewed as a bridgehead on China’s new Silk Road. Chinese goods destined for to Europe and Africa will transit through the port.

India has criticised the project. For New Delhi, the China-Pakistan Economic Corridor (CPEC), which includes the port, runs through the disputed territory of Kashmir.

After the inauguration, representatives from China and Pakistan signed five agreements and a memorandum of understanding (MoU).

Two agreements declared Pakistan’s Gwadar and China’s Tianjin as sister ports, and Gwadar and Piung as sister cities. An MoU for a poverty alleviation initiative was signed by the Gwadar district government and the China Overseas Ports Holding Company (COPHC), which operates the port of Gwadar.

The latter was chosen for its strategic position. The city’s name means ‘The Gateway to Wind’, halfway between the Middle East, Central Asia and South Asia.

The project includes the country's first deep water port, the free trade zone and 50 kilometres of docks. It provides China with direct access to the Arabian Sea.

Speaking on the occasion, COPHC chairman Zhang Baozhong said that with the construction of FTZ, the port city of Gwadar will become a big commercial hub in the region, and help to improve Pakistan’s overall economy and people’s lives.

According to the COPHC, some 30 companies in different businesses such as hotel, bank, logistics and fish processing are already in the FTZ with direct investment of about US$ 474.3 million and are expected to output annual value of US$ 790.5 million after full operation.

The “CPEC is turning into a reality today which will change the fate of the region,” Prime Minister Abbasi said.

The US$ 50 billion CPEC project stretches nearly 1,400 km and is the flagship project of the China’s One belt, One road strategy, which involves 65 countries.

The corridor will connect Kashgar in north-western China with Gwadar in southwestern Pakistan through a network of roads, railway lines, oil and gas pipelines and a fibre-optic cable.

Connectivity through Gwadar will bring prosperity not only to Pakistan but also to the Central Asian states, western China and Afghanistan, the prime minister said.

The signing of the agreements has triggered India’s immediate reaction.

India’s ambassador to Beijing, Gautam Bambawale expressed strong views in an interview with the Chinese Communist Party’s Global Times newspaper.

"The China-Pakistan Economic Corridor passes through Indian-claimed territory and hence violates our territorial integrity. This is a major problem for us," Bambawale said. “We need to talk about it, not push it under the carpet.”

By contrast, Chinese foreign ministry spokesperson Hua Chunying noted that “CPEC is merely an economic cooperation project. It has not targeted any third party. We hope the Indian side can put this in perspective and we stand ready to strengthen cooperation with the Indian side.”