Commercial and logistical realities, rather than formal political declarations alone, are reshaping the strategic landscape across Eurasia and the northern Indian Ocean. The hypothesis examined here is that China may be willing to let the China-Pakistan Economic Corridor (CPEC) atrophy in return for eventual transit access to India’s Eastern Dedicated Freight Corridor. On this reading, Beijing secures a balanced advantage by several means at once: it uses the vocabulary of competition rather than enmity in its dealings with New Delhi, it expands industrial and transport options in Bangladesh, it benefits from BRICS payment arrangements that reduce reliance on the dollar, and it retains the advantages of existing routes while alternatives mature. Each element is separately observable; the linkage between them is an inference rather than a documented bargain.
The bilateral setting
Recent bilateral developments provide the immediate context. In late August 2026, External Affairs Minister S. Jaishankar met President Vladimir Putin in Moscow during the 27th session of the India-Russia Inter-Governmental Commission. The two sides reviewed an economic relationship in which trade in goods has risen more than fourfold in four years, to nearly $60 billion in 2025-26, with India flagging a deficit above $50 billion as its principal concern. Russia indicated a readiness to increase fertiliser supplies and to deepen cooperation in the energy and nuclear sectors. Both sides pointed to leader-level meetings that have since taken place, at the Shanghai Cooperation Organisation summit in Bishkek on August 31 and at the BRICS summit held in New Delhi on September 12-13.
National Security Advisor Ajit Doval held the 25th round of Special Representatives talks with Chinese Foreign Minister Wang Yi in Beijing on August 25, 2026, and the two delegations recorded eight points of outcome and consensus. Formal declarations from both parties characterise the mechanism as the principal avenue for the boundary matter and as a significant forum for wider bilateral, regional, and global concerns. After 25 rounds spanning more than two decades, the boundary remains unsettled. The talks have instead developed into a vehicle for managing the overall relationship, for confidence-building along the Line of Actual Control, and for pre-summit coordination, with the 26th round to be hosted in India.
Corridors and cargo
The International North-South Transport Corridor (INSTC) illustrates how commerce drives trajectory. Volumes reached 26.9 million tonnes in 2024, a 19% year-on-year increase, and forecasts run to between 30 and 45 million tonnes by 2030 as the Rasht-Astara railway, the corridor’s critical missing link, progresses. Several drivers work in the same direction:
Western sanctions have pushed Russian cargo southwards, chokepoint risk near Hormuz and in the Red Sea has risen, multimodal routing can cut transit times against the Suez alternative, and political alignment among India, Russia, Iran, and the Central Asian states has held. Container volumes remain small relative to bulk commodities such as grain, coal, metals, and fertilisers, so the corridor’s expansion is best read as a thickening of north-south bulk connectivity rather than as a shift in containerised trade.
The Bay of Bengal turn
In the Bay of Bengal, Chinese economic statecraft has advanced largely because earlier Indian initiatives stalled. Bangladesh and India agreed in 2015 on economic zones at Mongla and Mirsarai under Indian lines of credit, and the Indian government nominated the Hiranandani Group to develop 110 acres at Mongla, through its subsidiary Evita Constructions, while a separate arrangement with Adani Ports covered related work. Line of credit terms that required Indian contractors and a high proportion of Indian-sourced material deterred competitive engagement. The developers did not begin construction within the stipulated period, kept spending minimal, and left the projects at the planning stage. After the 2024 political transition, the interim administration delisted the Mongla site in October 2025. In June 2026, during Prime Minister Tarique Rahman’s state visit to Beijing, the Bangladesh Economic Zones Authority signed a memorandum of understanding with China Civil Engineering Construction Corporation for a China-Bangladesh Mongla Port Economic Zone on that same land, and exchanged a developer agreement with China Road and Bridge Corporation for a Chinese Economic and Industrial Zone at Anwara in Chattogram. Mongla lies 188 km from Kolkata, within reach of India’s eastern ports and of the Eastern Dedicated Freight Corridor, which terminates at Dankuni in West Bengal. The Kaladan Multi-Modal Transit Transport Project remains a separate Indian initiative linking Kolkata to Mizoram through Myanmar, and it does not alter this eastern dynamic.
CPEC under strain
CPEC itself continues to face problems of utilisation and security. Gwadar handled only about 8,300 containers in the whole of 2025. A spike to roughly 11,000 containers in April 2026 alone, together with some 200,000 tonnes of transit break-bulk over three months in mid-2026, reflected crisis-driven Iran-related traffic after disruption at Hormuz rather than sustained commercial scale. Berth depth and crane capacity cap what the port can absorb over the longer run. Against this background, the proposition that Pakistan-occupied Kashmir could emerge as a transit hub for goods and gas from Central Asia, notwithstanding prolonged instability, remains speculative. It becomes plausible only if alternative corridors mature and security costs on existing routes persist. China’s access options would then diversify across maritime-industrial nodes in Bangladesh, residual CPEC capacity, and potential Central Asian linkages, without requiring the formal renunciation of any single project.
The commercial arithmetic
Trade figures underscore the commercial logic. China-Arab trade reached $407 billion in 2024. India’s trade deficit with Russia has widened even as absolute volumes grow. Chinese market openings for selected Indian goods, and the progressive development of BRICS payment and settlement mechanisms that move towards reduced dollar dependence, offer practical offsets. India’s Dedicated Freight Corridor network became fully operational across 2,843 km in September 2026, against railway freight loading of 1,670 million tonnes in 2025-26, which provides domestic capacity that could in theory absorb additional eastern inflows. Large-scale Chinese strategic transit across Indian territory nonetheless remains politically constrained.
What follows
The anticipated development therefore follows a stepwise and parallel course rather than an immediate transformation. China expands near-shore industrial and logistics capacity in Bangladesh while protecting existing corridors. India deepens the INSTC and its own multi-modal networks while managing the China relationship through structured dialogue framed as competition among development partners. The trade volumes that emerge will determine which routes acquire lasting significance. Over time this dynamic cultivates a multipolar order in which Chinese economic presence in South and South-East Asia advances through trade bases, settlement arrangements, and diversified channels, without recourse to antagonistic language. Economic motive encourages Beijing’s prudent diversification of options alongside India’s continuing strategic autonomy. The outcome is not yet settled.
(The author is a practising Radiation Oncologist and founder of Agravaani Research. Views are personal.)