As the China-Pakistan ­Economic Corridor seems to be gaining ground, India may be stepping up its hostility, economic power and its influence in order to contain Pakistan as it starts walking on the path to growth.

Back-to-back meetings, last week, by Indian Prime Minister Narendra Modi to review the 1960 Indus Waters Treaty and Pakistan’s MFN status, before the commencement of hostile acts by Indian forces on the Line of Control, may just be an indication of the ‘Modi government’s decision to look for options beyond diplomatic measures’.

According to the Minister for Planning and Development, Ahsan Iqbal, around $18bn worth of CPEC-oriented projects were now under implementation and projects of another $17bn in the pipeline. “This means around $35bn worth of projects have been energised in two years”, out of the $46bn original framework agreement announced by President Xi Jinping and Prime Minister Nawaz Sharif, he said.

Back-to-back meetings, last week, by Indian Prime Minister Narendra Modi … may just be an open indication of the ‘Modi government’s decision to look for options beyond diplomatic measures’

At 7th position on the global map, with an economic size of over $2.2tn and a growth rate beyond 7pc per annum, containing an eight times smaller economy of around $290bn, with half its growth rate, is the new policy doctrine of India’s hardline prime minister. India has been boasting of its desire of ‘adding a Pakistan’ (the size of Pakistan’s gross domestic product) every year to its GDP in the near future.

Given Pakistan’s water and power shortages, playing around the decades old water treaty, without actually going to the extreme of revoking or suspending it, could be one of the weapons India uses against Pakistan.

Pakistan’s water availability per capita is way behind India’s, with the difference increasing. New Delhi believes it can double its irrigated land (from over 700,000 acres to around 1.3m acres) from Jhelum and Chenab waters (Pakistan rivers) without violating the water treaty.

Based on the pattern of the Baglihar and Kishenganga projects, and taking advantage of arbitration awards on them, India may already be on course to harnessing its 20,000mw of power generation potential. While most of the river flows in Kashmir, its waters stand divided between India and Pakistan.

In the same context, India has been cajoling Afghanistan, with funds and expertise, to help it build hydropower projects on the Kunar-Kabul river system. This move shall be to Pakistan’s disadvantage, and may not materialise with Islamabad suggesting it would divert the Chitral River before its entry into Afghanistan in the event of it being deprived of its due share. Not surprisingly, a move for a joint Kabul River Basin Management plan between Pakistan and Afghanistan has not moved forward.

Pakistan gets about 17pc of its water supply from the Kabul River when Indus flows decline in winter. Pakistan and Afghanistan share nine rivers with annual flows of about 18.3MAF. Out of this, the Kabul River has water flows of 16.5MAF, to which Chitral River, originating in Pakistan, contributes about 8.5MAF. After entering Afghanistan the Chitral River becomes the Kunar River, joins the Kabul River near Jalalabad and then re-enters Pakistan.

The average annual flow of the Kabul River is about 21bn cubic metres (BCM). The Kunar River, with a major contribution of 75pc in Kabul flows, draws more than 60pc of its water from the Chitral area of Khyber Pakhtunkhwa.

Almost half of Pakistan’s exports are based on textiles and cotton products, under pressure in recent years due to a host of reasons. The two countries already compete in international trade for textile and cotton made ups. As the cotton crop collapsed last year in Pakistan, there have been indications of trade barriers to restrict Indian cotton into Pakistan, with calls for a complete ban.

The Indian private sector has also been demanding an extension of interest subsidies for cotton yarn and mercantile exporters (Mercantile Exports from India Scheme) so that they may reduce Pakistan’s share in the international market.

In recent months, exports of Pakistan’s wheat and sugar surpluses, despite freight rebates, were short of expectation because of higher rebates and facilitation by India. Not only this, Pakistan has struggled to exploit its true potential of Basmati rice export — another major trade item — due to tight margins and indications that India proactively helped its rice exporters with, including but not limited to, a rail freight subsidy.

Indian ministers have also been seen actively engaging with countries in the Middle East in the aftermath of job layoffs. The Indian government is stepping in as a placement agency for state-run and royal family companies of Arab countries for the replacement of the existing expensive work force with low wage workers in order to maintain its diaspora, and at the same time, displace Pakistani workers in a falling wage market.

Early signs of this critical move might be there in the recent decline of remittance flows into Pakistan. This is a very critical area in view of the fact that robust remittances from overseas workers have been Pakistan’s strongest support in recent years.

These may be only a few apparent areas that our policy makers need to remain alert about while protecting the Pakistani market.

Published in Dawn, Business & Finance weekly, October 3rd, 2016