The North-South International Transport Corridor—a 7,200-kilometer trade route connecting St. Petersburg to Mumbai—has emerged as a major geopolitical and economic initiative led by India, Iran, and Russia. Conceived in 2000 and approved in 2002, the corridor aims to facilitate trade between the Indian Ocean, the Persian Gulf, the Caspian Sea, and northern Europe, bypassing traditional routes such as the Suez Canal. The North-South Corridor could reduce transit times by up to 40 percent and freight costs by up to 30 percent, making it an attractive alternative for regional connectivity. However, geopolitical challenges, particularly Western sanctions on Iran and Russia, and complex regional interactions, have hindered the corridor’s progress. While India presents the North-South Corridor as a response to China’s Belt and Road Initiative, China’s approach to the corridor has become a determining factor in shaping its future. This note examines China’s approach to the North-South Corridor and how China is managing its development amid regional ambitions and global competition.
China’s concerns about the North-South Corridor
China sees the North-South Corridor as a direct challenge to its Belt and Road Initiative, especially since it would strengthen India’s influence in Central Asia and beyond—a region in which China has invested heavily through the Belt and Road Initiative. The North-South Corridor’s ability to connect India to resource-rich Central Asia and European markets without reliance on Pakistan, China’s key ally—is seen as a threat to China’s regional dominance. Moreover, China’s concerns have been heightened by India’s alignment with the United States and other Western powers, which have made the North-South Corridor part of a broader effort to counter China’s influence in the Indo-Pacific and Central Asia.
The maritime section of the North-South Corridor through Iran’s Chabahar port, which India is developing with a $500 million investment, is particularly contentious. Chabahar acts as a rival to Pakistan’s Gwadar port, a cornerstone of the China-Pakistan Economic Corridor[2] and a key project of the Belt and Road Initiative. By providing India with a direct route to the markets of Afghanistan and Central Asia, Chabahar undermines Pakistan’s strategic depth and reduces Afghanistan’s economic dependence on Pakistan. The 2020 China-Iran partnership, which includes potential investments in Chabahar, reflects Beijing’s efforts to maintain leverage over this key node of the North-South Corridor.
China’s diplomatic and military interactions
China has actively engaged with the member states of the North-South Corridor to monitor and influence its development. In April 2022, then-Chinese Defense Minister Wei Fenghe[3] visited Kazakhstan, Turkmenistan, Iran, and Oman—key nodes along the North-South Corridor route—indicating Beijing’s intention to deepen its strategic ties with these countries. During these visits, he emphasized expanding military exchanges and joint exercises, and indirectly referred to India’s growing influence. For example, in Oman, a key node of the North-South Corridor with the Duqm Special Economic Zone[4], he avoided mentioning the United States by name and focused on strategic cooperation, which seemed to counter India’s commercial and logistical interests in the region.
These visits highlight China’s strategy to position itself as a reliable defense and security partner for the North-South Corridor countries. By strengthening ties with Iran, Turkmenistan, and Kazakhstan, China can indirectly influence the volume and nature of Indian trade that passes through these countries. For example, Kazakhstan’s role as a supplier of uranium and Turkmenistan’s vast gas reserves are critical to India’s energy security, and China’s presence in these countries could limit India’s access to these resources. Moreover, China’s growing ties with the Taliban in Afghanistan pose a challenge to India’s North-South Corridor plans after the US leaves in 2021. Especially since the Taliban has refused to participate in the Quartet, which includes India, Iran, and Uzbekistan, to expand the role of Chabahar.
China’s economic strategy and the Belt and Road Initiative
China’s economic approach to the North-South Corridor involves both competition and potential cooperation. While the North-South Corridor is not comparable in scale to the Belt and Road Initiative, its strategic importance lies in its potential to diversify trade routes and reduce dependence on Chinese-dominated supply chains, especially in the post-pandemic era and amid tensions. China has responded by bolstering its own Belt and Road Initiative projects in Central Asia, such as the China-Pakistan Economic Corridor, and considering synergies with the North-South Corridor. For example, Iran has expressed its willingness to accept Chinese investment in Chabahar. This could integrate the port into the Belt and Road Initiative, thereby challenging India’s monopoly. This move reflects China’s pragmatic approach to cooperating with competing projects in order to maintain regional influence.
Moreover, China’s negotiations to link the Belt and Road Initiative to the Arctic Corridor, which could connect to the North-South Corridor via Finland, Estonia, and Latvia, indicate a long-term strategy to integrate regional infrastructure networks in line with China’s interests. Some reports point to discussions about synchronizing the North-South Corridor with European rail networks such as Rail Baltica,[5] which could strengthen connectivity between Asia and Europe. China’s interest in financing projects such as the Tallinn-Helsinki rail tunnel indicates an attempt to position itself as a key player in these networks, potentially overshadowing India’s role.
Geopolitical realignments and China’s strategy
In recent years, the evolving geopolitical landscape, exemplified by the war in Ukraine and Western sanctions on Russia and Iran, has changed China’s approach to the North-South Corridor. Russia sees the North-South Corridor as an economic escape route to circumvent sanctions. Freight trains from Russia to India that passed through Iran in 2022 can be seen as a piece of the puzzle. China’s close ties with Russia and Iran, both under Western sanctions, align with its interest in supporting alternative trade routes that challenge Western dominance. However, China’s growing ties with India’s rivals, such as Pakistan and the Taliban, add to the complexity. Some analyses suggest that China’s strengthening ties with Central Asia and its strategic partnership with Iran could disrupt the growth of the North-South Corridor by creating competing regional alignments.
At the same time, China must balance its competition with India against the potential benefits of regional connectivity. The eastern branch of the North-South Corridor, operational since July 2022 through Kazakhstan, Turkmenistan, and Iran, demonstrates the corridor’s potential to facilitate trade with India, which, if jointly managed, could complement the Belt and Road Initiative. However, China’s reluctance to fully support the North-South Corridor appears to stem from its desire to maintain the primacy of the Belt and Road Initiative and prevent India from gaining a strategic foothold in Central Asia.
Challenges and opportunities for China
The North-South Corridor presents both challenges and opportunities for China. The corridor’s potential to move 14.6 to 24.7 million tons of cargo per year by 2030 threatens China’s dominance of Eurasian trade routes. In addition, India’s efforts to digitize trade connectivity and develop industrial parks along the North-South Corridor could strengthen its economic influence and challenge China’s regional investments. The Taliban’s alignment with China and refusal to participate in Chabahar-focused initiatives gives China a further strategic advantage.
However, China also sees opportunities in developing the North-South Corridor. By investing in key nodes such as Chabahar or integrating the North-South Corridor with Belt and Road Initiative projects, China could reduce the competitive threat to the corridor. Synchronizing the North-South Corridor with European and Arctic corridors could create a transcontinental network in which China’s financial and infrastructure expertise could play a pivotal role. Such cooperation would require careful management of China’s competition with India. This could be achieved through multilateral frameworks such as the BRICS.
India’s response and China’s countermeasures
India’s proactive approach to the North-South Corridor, including a $500 million investment in Chabahar and the launch of TIR digital systems by 2022, demonstrates its commitment to the corridor. However, its delay in implementing it has become one of the recent challenges between Iran and India. India is also seeking to expand the membership of the North-South Corridor to include the Baltic and Nordic countries, with the aim of integrating the corridor with European rail networks such as Rail Baltica. This move challenges China’s influence in Europe and Central Asia and has prompted Beijing to strengthen its presence in the North-South Corridor member countries.
China’s countermeasures include deepening ties with Iran and Central Asian countries — as seen in Wei Fenghe’s 2022 visits — and exploring investments in Chabahar. In addition, China’s engagement with the Taliban and efforts to expand the China-Pakistan Economic Corridor into Afghanistan are aimed at limiting India’s access to Afghan markets. These actions reflect China’s strategy to maintain its regional hegemony while selectively engaging with the North-South Corridor to prevent it from becoming a fully Indian-led initiative.
Conclusion
China’s approach to the North-South Corridor is a complex mix of competition, strategic engagement, and cautious cooperation. China seeks to counter India’s influence by strengthening ties with key North-South Corridor member states such as Iran, Kazakhstan, Turkmenistan, and Oman, and by leveraging its engagement with Pakistan and the Taliban. But China recognizes the North-South Corridor’s potential to play a complementary role to the Belt and Road Initiative. Geopolitical realignments resulting from the Ukraine war and Western sanctions on Russia and Iran have increased the importance of the North-South Corridor, forcing China to balance its competition with India with the benefits of regional connectivity. For the North-South Corridor to succeed without escalating tensions between China and India, both countries need to explore frameworks for cooperation, possibly through multilateral platforms such as BRICS, to ensure that the corridor serves as a vehicle for regional integration. As the North-South Corridor continues to evolve, China’s strategic maneuvers will play a significant role in shaping its trajectory and the broader geopolitics of Eurasia.
References
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