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Hilal English

Analyzing India

December 2023

India's "Necklace of Diamonds" strategy, driven by hegemonic ambitions, has raised concerns for the region. This approach aims to counterbalance China, secure energy resources, and control trade routes. Given its pivotal role in South Asia, Pakistan has developed a comprehensive security approach to safeguard its interests in response to these challenges.


The Belt and Road Initiative (BRI) is one of the world’s foremost, most massive infrastructure and investment initiative launched by China in 2013. The initiative is designed with the objective of promoting connectivity and economic development across Asia, Europe, and Africa. The BRI involves the construction of transportation networks, energy pipelines, and telecommunications infrastructure to facilitate trade and investment between China and other countries. 
By March 2022, 149 countries including China had joined the BRI. The countries of the BRI are spread across all continents, which include 44 countries from Sub-Saharan Africa, 35 from Europe and Central Asia, 25 from East Asia and Pacific (including China), 21 countries from Latin America and Caribbean, 18 in the Middle East and North Africa, and 6 countries in the Southeast Asia region.
The BRI has given the world a new perspective, as it has been viewed by some as a new model of globalization that prioritizes cooperation, connectivity, and shared prosperity, rather than the competition and zero-sum approach of conventional globalization approaches. 
The BRI promotes cooperation by encouraging countries to work together on infrastructure projects that will connect them to China and other participating countries, creating a network of economic and trade relationships that will benefit everyone involved. It seeks to create a shared vision of the future that is based on mutual trust, respect, and understanding.


India's new approach is motivated by a desire to encircle China and Pakistan using strategically positioned interference points, commonly referred to as "diamonds." The connection of these points constitutes India's "Necklace of Diamond Strategy," which is designed to counter China's globalization efforts and more.


By promoting infrastructure development and investment, the BRI aims to improve connectivity and reduce infrastructure gaps between different regions, leading to greater economic development and integration. This has the potential to create new markets, increase trade, and drive economic growth in the participating countries. The phrase "win-win" was used by President Xi Jinping in 2017, where he described the BRI as a "project of the century" that would benefit all participating countries and lead to a "win-win" situation. The "win-win" approach highlights the benefits for China, participating countries, and the global community as a whole.
While China has successfully garnered the participation of 149 countries, including itself, it's noteworthy that several nations have opted not to join the BRI, citing their reservations, concerns, and critiques regarding the project. These reservations stem from various factors, such as differing perceptions, ownership complications, rights-related issues, environmental implications, and worries about debt sustainability. Notably, some nations express apprehension about the fiscal sustainability of BRI ventures. It's crucial to recognize that in this complex landscape, the Asian Infrastructure Investment Bank (AIIB) is emerging as a viable alternative financing source to traditional international financial institutions like the World Bank and the Asian Development Bank. Understanding these dynamics is essential for a comprehensive grasp of the current scenario.
Looking from India’s lens at BRI and particularly China-Pakistan Economic Corridor (CPEC) from a security perspective, it assumes connectivity and development as a threat to Indian prosperity. India views CPEC as a threat to its strategic and economic interests and has chosen not to participate in the BRI in part due to concerns about the implications of China's infrastructure development for global prosperity initiatives and for its own security and regional influence.
India has also expressed concerns about the CPEC project, a critical component of China's BRI, which encompasses the development of infrastructure projects in Pakistan, including ports, highways, railways, and energy pipelines. Military specialists at Indian High Commissions worldwide have labeled the CPEC as a 'red line' for India. It appears that, somehow, a more secure and stable Pakistan is not in India's broader interests.
India has expressed apprehensions regarding the strategic implications of this project, asserting that it amplifies China's presence in the Indian Ocean Region (IOR) and raises the prospect of potential military applications.
In addition to these concerns, India is also worried about the economic impact of CPEC. It perceives the project as granting China increased sway over Pakistan's economy, which could result in a shift in the power balance within South Asia.
India has thus far declined to participate in the BRI and, instead, has pursued its own infrastructure development initiatives. Examples of these initiatives include the International North-South Transport Corridor and the Chabahar Port in Iran. These projects are designed to establish an alternative route to Central Asia and Afghanistan that bypasses Pakistan.
India's new approach is motivated by a desire to encircle China and Pakistan using strategically positioned interference points, commonly referred to as "diamonds." The connection of these points constitutes India's "Necklace of Diamond Strategy," which is designed to counter China's globalization efforts and more.
The term ‘String of Pearls’ was initially coined by Western scholars to describe China's BRI expansion. This phrase was first introduced in January 2005 by Booz Allen Hamilton in their "Energy Futures in Asia" report, which was prepared for the U.S. Defense Secretary. Since then, Indian scholars have adopted this term to categorize the BRI project as a security and regional threat.
The Necklace of Diamonds strategy represents India’s maritime interests, which has raised concerns regarding its attempts to assert security and influence dominance in the IOR. This strategy involves the network of like-minded nations, infrastructure and strategic assets, which may become a potential threat or destabilizing factor in the region. The strategy emphasizes expanding India's maritime surveillance capabilities, strengthening its naval forces, developing strategic assets, and building regional partnerships. While this may ostensibly be for defensive purposes, it raises concerns among neighboring nations about India's increased surveillance capabilities and potential interference in their affairs. The ultimate goal is to position India as the sheriff of the Indian Ocean. The strategy is also seen as a counter to China's growing impact in the region and aims to counterbalance China's influence through India's own initiatives.


From Pakistan's perspective and the interest of concern, India's Necklace of Diamonds strategy can have multiple implications in the region as well as global perspectives for social, security, defense, political, and economic spheres. Pakistan has a 95 percent trade volume through the Arabian Sea. India’s security dominance in the IOR could lead to serious conflict triggered by the desire for control and dominance.


What is the Importance of the Indian Ocean?
The Indian Ocean covers at least one-fifth of the world’s total ocean area and is bounded by Africa and the Arabian Peninsula (known as the western Indian Ocean), India’s coastal waters (the central Indian Ocean), and the Bay of Bengal near Myanmar and Indonesia (the eastern Indian Ocean). It provides critical sea trade routes that connect the Middle East, Africa, and South Asia with the broader Asian continent to the east and Europe to the west. A number of the world’s most important strategic chokepoints, including the Straits of Hormuz and Malacca, through which almost 32.2 million barrels of crude oil and petroleum are transported per day (more than 50 percent of the world’s maritime oil trade), are found in the IOR, which itself is believed to be rich in energy reserves. Nearly 40 percent of the world’s offshore petroleum is produced in the Indian Ocean; coastal beach sands and offshore waters host heavy mineral deposits, while fisheries are increasingly important for both exports and domestic consumption.
The trade volume for countries in the IOR is quite significant, as the region is a major artery for global trade. According to a recent report by the Indian Council of World Affairs, the total trade volume of the Indian Ocean Rim Association (IORA) member countries was estimated at USD 2.7 trillion in 2018. This accounts for over 30 percent of the world's trade by value and nearly 50 percent by volume. The report also highlights that trade among IORA member countries has been growing steadily over the years and is expected to continue to do so, driven by factors such as demographic shifts, economic growth, and advancements in technology and infrastructure.
India’s Love for the Necklace of Diamonds 
Mr. Lalit Man Singh, the former Foreign Secretary of India from 1999 to 2000, and Indian Ambassador to the United States from 2001 to 2004, was the first Indian diplomat to use the term "Necklace of Diamonds" for the first time in 2011. He described India's strategy of building a network of strategic partnerships and military bases around the IOR.
The CPEC is the flagship project within China's BRI and holds significant importance for both China and Pakistan. The estimated investment for CPEC projects is around USD 62 billion. 
One of the most compelling aspects of CPEC is its role in providing China with a more direct and efficient route to the Arabian Sea and the Indian Ocean through the strategically located Gwadar Port in Pakistan. This alternative route effectively bypasses the Strait of Malacca, which has long been a potential chokepoint for China’s energy imports and overall trade. By doing so, CPEC offers the BRI a crucial alternative to the Strait of Malacca.
The strategic location of CPEC plays a crucial role in enhancing China’s energy security while reducing the complications surrounding the potential maritime disruptions. In light of India’s control over chokepoints in the IOR, notably the one near the Strait of Hormuz located on great Nicobar Island in the Andaman and Nicobar Islands, CPEC provides an overland alternative for China to secure its Sea lines of Communication (SLOCs) in the IOR. This connection links West Asia via the Gwadar Port in the Arabian Sea directly with China.
The inclusion of CPEC on the BRI map highlights the critical role Pakistan has to play as a partner country in connecting the Silk Road Economic Belt of the BRI. This transcontinental passage links China with Southeast Asia, South Asia, Central Asia, Russia, and Europe by land, as well as the 21st century Maritime Silk Road, a sea route that connects China's coastal regions with Southeast and South Asia, the South Pacific, the Middle East, and Eastern Africa, extending all the way to Europe. Thus, Pakistan assumes a central and pivotal role in the BRI network.
As part of the Necklace of Diamonds strategy, India has been investing heavily in modernizing its naval fleet and expanding its naval bases. This militarization of the region, including the acquisition of advanced ships, submarines, and aircraft, is viewed with suspicion and seen as an attempt by India to establish itself as the dominant naval power in the Indian Ocean. Such aspirations to become the "policeman of the Indian Ocean" are unsettling and contribute to regional instability.
The Government of India’s budget for 2022-23 shows that the Indian Navy has been allocated a share of INR 47,590.99 crores as a capital outlay in comparison to INR 33,253.55 crores from the previous year’s budget.1 The numbers reveal an increase of 43.11 percent in the capital outlay in 2022-23 in comparison to the allotted capital outlay for the Indian Navy in 2021-22.2



Table 1 suggests that for the years 2022-23, there is an increase in the Indian Navy service budget (revenue and capital) in comparison to the overall total sum of allocation to the three services (revenue and capital). In comparison to the previous year, there is an increase of 2.63 percent in the overall proportion of the Indian Navy’s share in the budget.



Table 2 suggests that the proportion of the capital outlay to the total capital outlay (of all three services) has also increased for the year 2022-23. For the year 2022-23, the percentage share is 31.23 percent in comparison to 24.62 percent for the previous year’s budget. 
The Indian strategy also includes the development of key strategic assets in the region, such as ports, airstrips, and logistics facilities. These assets not only facilitate and provide a trade and economic growth front but also provide essential support for India's naval forces, enabling them to project power and maintain a more consistent presence in the IOR.
The "diamonds" in this strategy are not specific installations but rather the efforts of India to establish its influence and attain the status of a dominating power in the region.
Concerns for Pakistan
From Pakistan's perspective and the interest of concern, India's Necklace of Diamonds strategy can have multiple implications in the region as well as global perspectives for social, security, defense, political, and economic spheres. Pakistan has a 95 percent trade volume through the Arabian Sea. India’s security dominance in the IOR could lead to serious conflict triggered by the desire for control and dominance. To protect its interests, Pakistan may need to adapt its own strategy and engagement with regional partners.
The Necklace of Diamonds strategy does not have a specific list of countries, but it involves India's diplomatic efforts to engage with key nations in the IOR and their vicinity to undermine Pakistan, counterbalance China, and enhance its own regional presence. The countries where India has focused on building strategic partnerships, investing in infrastructure, and conducting joint military exercises are mentioned in the Table 3.
One of the key impacts of the strategy is the potential for competition over energy resources as both India and Pakistan heavily rely on the IOR for their energy security. India's strengthened presence in the IOR could potentially challenge Pakistan's ability to secure energy resources for its growing needs.
Additionally, the increased presence of the Indian Navy in the IOR could lead to heightened security concerns for Pakistan. The Necklace of Diamonds strategy might compel Pakistan to allocate more resources toward its naval capabilities to maintain a balance of power and protect its trade and energy routes. There is also the potential for maritime disputes over resources or territorial claims, which could create tensions and contribute to regional instability. This may affect Pakistan's strategic interests as it seeks to protect its own trade and energy routes in the region.
Pakistan sees the Necklace of Diamonds strategy as an attempt to encircle it and/or limit its strategic maneuverability in the IOR, which could lead to heightened security concerns and tensions between India and Pakistan.
As a significant player in South Asia and a close neighbor to India, Pakistan has adopted a multifaceted security strategy to address these concerns and safeguard its national interests in the region. Firstly, Pakistan has aimed to strengthen its strategic partnership with China, a vital regional ally. The CPEC is a crucial component of this partnership and serves as a vital link between the two countries. The partnership is moving into more strategic cooperation including defense enhancement and cooperation. Pakistan's Ministry of Defense (MoD) ordered eight submarines from China in 2015, at an approximate cost of USD 4-5 billion, making it the largest arms export contract in China's military history. Of the eight ordered submarines, the initial four are being built by the China Shipbuilding Industry Corporation (CSIC) while the latter four are to be built by the Karachi Shipyard and Engineering Works Ltd. (KSEW) in collaboration with the CSIC, under a technology transfer agreement. The first four vessels, built by China, are expected to be delivered this year, while the latter four, which are to be built by Pakistan, are expected to be delivered between 2025 and 2028, at the rate of one delivery per year. 
Secondly, Pakistan has been working to strengthen its own naval capabilities to protect its interests in the IOR. This involves upgrading its naval fleet, developing new naval bases, and conducting joint naval exercises with friendly nations. By securing its Exclusive Economic Zones (EEZ) and safeguarding vital shipping lanes in the Arabian Sea, Pakistan aims to promote regional stability and protect its trade and energy security.
Lastly, Pakistan aims to promote regional stability by addressing non-traditional security threats such as terrorism, piracy, and illegal fishing. Collaborating with regional partners to tackle these issues helps to maintain a secure environment in the IOR, which is essential for Pakistan's trade and energy security.
Pakistan believes in a regional approach to maritime security that is based on mutual respect, trust, and cooperation. Any effort to enhance regional connectivity and cooperation must be inclusive and respect the sovereignty and territorial integrity of all countries in the region. Until all players in the IOR play their role for cooperation and understanding, the blue economies of the region will continue to fight for resources and opportunities.


The author is a global competitiveness, risk, and development expert. He is a leading strategic communication specialist. 
E-mail: [email protected], Twitter: @amirjahangir


1.  https://www.indiabudget.gov.in/doc/eb/sbe21.pdf
2.  Source: Observer Research Foundation