By: Anuraag Khaund, Guest Author

Along with the Himalayas and Eurasia, the Indian Ocean has also emerged as an important hot-bed of geopolitical rivalry between India and the People’s Republic of China (PRC) or China. The Indian Ocean is the third largest ocean and covers some 20 per cent of the global water surface. Its heightened importance stands from its geographic location as a key trade and energy supply conduit straddling between the economic engines and commercial ports of North Atlantic and the emerging and high energy consuming economies of Asia- Pacific. The Indian Ocean Region (IOR) encompasses international shipping lanes connecting the economies of East Asia and South East Asia, South Asia, West Asia, and the East African states. The IOR is home to an emerging market of 2 billion people in 32 littoral states and is a rich reservoir of resources in terms of huge deposits of rare earth elements (REE), 15 per cent of fish deposits and around 40 per cent of the world’s offshore oil production. The real value of IOR lies in the presence of critical Sea-Lanes of Communication (SLOCs) located in its expanse notably the Straits of Hormuz, the Bab-el-Mandeb and the Straits of Malacca which saw around 39 per cent of the global energy maritime trade pass through its spaces in 2017. Among these straits, the Straits of Hormuz and Straits of Malacca are quite significant. A major portion of the oil and energy supplies originating from West Asia passes through these two SLOCs before reaching their destination in the East Asian economies of China, Japan, and South Korea and in the Malacca alone, the global trade value passing through its waters are valued a US$ 3.5 trillion. This includes two-thirds of China’s trade volume, 40 per cent of Japan and a third of global maritime trade. For China, the Malacca becomes crucial as around 80 per cent of its energy imports including oil and Liquified Natural Gas (LNG) are shipped through this narrow SLOC which are vital for the functioning of the world’s second largest economy.

Given the above situation, it is no surprise that the IOR and especially the need for control over the SLOCs especially Malacca has emerged as high agendas in the Chinese strategic perception. In the case of Malacca, considering its role in terms of energy supplies mentioned above, there has emerged anxieties about the SLOC being used as a chokepoint by powers such as the US and increasingly India by placing a naval blockade on the same−a sentiment highlighted by then Chinese President Hu Jintao as the ‘Malacca Dilemma’.  This anxiety or dilemma has led Beijing to search for alternative routes to secure its energy shipments through projects such as the China Pakistan Economic Corridor (CPEC) connecting the city of Kashgar in Xinjiang province through an overland route to the Pakistani port of Gwardar and the laying out of pipelines between Yunnan in Southern China and the port of Kyaukphu in Myanmar as part of the Chinese led Belt and Road Initiative (BRI) of global infrastructure development and connectivity initiative announced in 2013. This search for alternative routes has also sparked Chinese interest in the long-buried but recently re-emerged idea of the Kra Canal− a canal across the narrow Kra Isthmus in Thailand joining the Gulf of Thailand with the Andaman Sea and thereby offering an alternative route to the Straits of Malacca. While the arguments in favor of the proposed Canal range from reducing the burden of traffic in Malacca and providing a shorter route in terms of time taken and cost reduction to boosting the Thai economy, concerns have also been raised over Beijing’s participation in the Kra Canal which could allow the latter to bring Thailand under its ‘debt trap’ thereby eroding Thai sovereignty as well as the Canal’s potential as a shorter route for Chinese naval ships to enter the Indian Ocean. For India, the latter part is crucial given its own security and strategic interests in the Indian Ocean, especially the Andaman Sea which abuts the Union Territory of Andaman and Nicobar Islands as well as the eastern Indian seaboard. However, if India plays its cards well, it can turn the potential strategic disadvantage of the Kra Canal into an opportunity to increase its influence in the IOR. This constitutes the central theme of the paper which begins by outlining the history and basic features of the Kra Canal followed by the potential ways through which India can engage with the Canal to its own advantage.

The Kra Canal/Land Bridge

The Isthmus of Kra is a narrow strip of land in southern Thailand linking the Malay Peninsula with mainland Southeast Asia. As mentioned above, the Kra Canal is a proposed man-made canal across the Isthmus which plans to connect the South China Sea (SCS) via the Gulf of Thailand to the Andaman Sea in the Indian Ocean. It would be located 500 miles south of Bangkok and 120 miles north of Thailand’s border with Malaysia. The principal motivation driving the construction of the Canal has been its potential to reduce the sailing time as well as provide a shorter connectivity route between eastern Asia and the Indian Ocean. As per certain studies, the canal if and when constructed would reduce the distance between the two regions by 700 miles or around two-three days of sailing time as compared to the conventional routes around the Straits of Malacca.

The idea of exploiting this canal can be traced back to the 17^th century during the reign of monarch Narai the Great who in 1677 had mooted the idea of a canal connecting the western and eastern coasts of the Ayutthaya Kingdom (then Thailand) in order to facilitate the rapid movement of troops to counter the neighbouring Burmese kingdom. To that end, the monarch had sought the assistance of the French colonial power in order to transform his vision into reality; however, the idea was dropped as it was unfeasible. Yet, the idea of a canal connecting the Gulf of Thailand with the Andaman Sea was subsequently pursued by the British and French colonial powers who undertook studies in 1843, 1849, 1863, 1872 and 1883 respectively. Because of the number of studies taken during these years, several prospective routes for the Canal were identified, especially the one titled ‘9A’ was thought to hold the most promising potential. However, the plans for construction were scrapped until it was revived again by a Thai industrialist KY Chow in 1972 but it did not see the light of the day owing to the Arab-Israeli War of 1973 and the resultant oil crisis. At the same time, powers such as Japan, in the wake of the crisis, had shown interest in the Kra as an alternative route for securing oil supplies vis-a vis the over-crowded and pirate infested Malacca straits. The idea was revived again in 2000 by the then Thai Prime Minister (PM) Thaksin Shinawatra who constituted a committee to conduct a feasibility study. Again, the project was sent to the backburner by the military coup in 2006. However, the idea lingered within circles such as the Thai Canal Association (TCA) and the Thai-Chinese Cultural and Economic Association (TCCEAT). A Memorandum of Understanding (MoU) was signed in 2015 between the private entities of China-Thailand Kra Infrastructure Investment & Development Company and the Asia Union Group for constructing the canal, but both the Chinese and Thai governments later backtracked and denied any ‘official involvement’ in the project. Moreover, the government of PM Prayuth Chan-o-cha which came to power following a military coup in 2014, did not give much priority to the canal. Yet the potential of the Canal in bringing economic windfall to the tottering Thai economy led the Government to form an ad hoc committee in 2020 to re-examine the feasibility of the project whose report was submitted to the Thai parliament in 2022 but was rejected by the House with 144 votes against as opposed to 121 votes for the Canal. The latest re-iteration of the idea was done by PM Srettha Thavisin in the forums of the third Belt and Road Forum (BRF) and the Asia Pacific Economic Cooperation (APEC) but in a different avatar as a land-bridge instead of the old idea of Canal.

The proposed land-bridge over the Kra Isthmus, which seeks to replace the Canal, is envisioned as connecting the eastern and western coasts of Thailand through overland dual track rail and road links extending around 120 km. The multi-modal transport corridor would connect the deep-sea port in Chumphon province on the Gulf of Thailand with the upgraded port of Ranong on the Andaman Sea into a deep-sea port. The rationalisation for the project, whether in the form of Canal or Land-bridge has been the need to address the congestion of maritime traffic along the Straits of Malacca as well as the benefits of time and cost reduction to vessels plying between the Indian Ocean and the SCS. The Straits of Malacca is witness to 80,000 vessels transiting its waters on an annual basis[i] and by 2030, it is expected to rise to 140,000 vessels as per World Bank data[ii]. Hence, if realised the Kra project could potentially help re-route most of this traffic given its advantages such as reduction of distance and time in terms of 700 miles and two to three days.

However, there have raised serious issues and doubts regarding the feasibility of the project. Firstly, the benefit of time reduction by two-three days is not enough to induce large vessels to take the Kra route. Moreover, the construction cost of the canal would have to recovered through the levying of a transit fee upon ships, which, as per some estimates, would amount to US$ 115,000 per vessel, per transit. In such a scenario, it would make sense to use the International Shipping Lane of Malacca which does not charge any transit fee. In addition, the functioning of the Canal or the Land-Bridge would require the development of Special Economic Zones (SEZs), transhipment and bunkering infrastructure which would necessitate finding funding of around US$ 30-80 billion. Another major area of concern is the ecological and environmental impacts of the project due to the differing water level between the Andaman Sea and Gulf of Thailand. This would especially affect the livelihood of 40,000 fishermen in both the Andaman Sea and Gulf of Thailand given the project’s potential adverse implications upon marine ecologies and fishing reserves. Along with fishermen, the construction of the canal would also lead to the displacement of 65,000 villagers. The brunt of the Canal would have to borne by the Thai tourism industry in the Isthmus of Kra which is estimated to contribute around 40 per cent of revenue to the Thai economy. The third major concern about the project is its impact upon the neighbouring port and transhipment facilities such as Singapore and Port Klang in Malaysia which given their efficiency and other logistical advantages would be able to mount considerable challenge to the Kra. The fourth major factor hindering the realisation of the project is its potential negative consequences upon Thailand’s internal and external security. The construction of the Canal would lead to a physical bifurcation of sorts between Thailand’s northern regions and its southern parts which has been a hot-bed of Malay insurgency and separatism which has led to the loss of 7000 lives since the movement’s resurgence in 2004. In this context, the canal or any project in the Kra Isthmus would be interpreted as separating the ‘deep south’ from the rest of the country while the insurgency itself would hinder any efforts at construction[iii].

On the external front, the nature of the Kra Canal and its strategic implications would draw Thailand into the midst of the increasing Sino-US rivalry thereby affecting its traditional ‘bamboo diplomacy’ or the flexible way of conducting diplomacy without bending to either side. It is to allay such concerns that the Thai government has also approached countries such as US, India, and Australia to fund the project. With regard to Chinese investment, anxieties have also been expressed over the project becoming ‘a white elephant project’ like Hambantota in Sri Lanka and Gwadar in Pakistan and making Thailand similarly dependent on China through the policy of ‘debt trap’. Meanwhile, the removal of Thavisin from the post of PM by the order of the Constitutional Court on account of ethical violation over appointment of a Cabinet member accused of bribe charges only serve to highlight the volatile nature of Thai domestic politicsand their implications on the fate of big projects like the Kra which now seems to be in limbo.

A Strategic Opportunity for India

Despite the speculations regarding its strategic value for the Chinese, the Kra Canal or Land-bridge has certain limitations which raises doubt as to its strategic utility. Given its geographic location, shipments destined to pass through the Kra Canal or from it to other parts of the IOR would have to navigate through the maritime space of the Indian Ocean and its chokepoints such as the Straits of Hormuz and the Palk Straits which could be interdicted by hostile navies. In addition, the ships bound for the canal would have to pass through the Andaman Sea which falls under the Exclusive Economic Zone (EEZ) of India and thus would not carry the immunity of ‘innocent shipping’ as in the case of Malacca or Sunda. In addition, the difficulties as well as the volatility of domestic Thai politics mentioned earlier would prevent Beijing from putting much impetus in the project for the time being.  

However, the apparent strategic benefits of the Canal also cannot be overlooked by Beijing, especially in a time of increasing pressure on its manoeuvres in the IOR due to the actions of countries like US, India, and groupings like QUAD and AUKUS. As pointed out earlier, the construction of the canal would provide the Chinese People’s Liberation Army Navy (PLAN) with a relatively easier gateway to the Indian Ocean and the Andaman Sea in particular as compared to the Malacca Straits from the SCS. Moreover, the construction of the Canal through Chinese funding and as part of the Maritime Silk Road (MSR) of the BRI would allow Beijing to wield considerable influence in the functioning of the project, especially in case it ends up increasing Thailand’s dependency on Beijing. In addition, the project would also allow the diverting amount of significant shipping activity northward towards Chinese controlled ports or ports with Chinese influence such as Kyaukphu and Chittagong.

The most important and crucial takeaway for Beijing regarding the Kra Canal is its strategic value in the larger scheme of ‘String of Pearls’ or Chinese controlled/ influenced ports dotting strategic points in the Indian Ocean. Along with the Chinese-upgraded Ream naval base in Cambodia situated at the entrance of the Gulf of Thailand, the control of the Kra Canal or the ports of Ranong and Chumphon would allow Beijing the ability to monitor the passage between the Andaman Sea and the SCS. Moreover, along with its control over the transhipment ports of Kyaukphu in Myanmar and Hambantota in Sri Lanka, the Kra Canal would ensure the smooth and safe passage of Chinese shipments bound for West Asia and Europe while also facilitating the unhindered movement of Chinese energy shipping.  Finally, from the perspective of India, the Chinese control of the Kra Canal or its ports would buttress Beijing’s encirclement of the Indian Ocean and allowing the PLAN power projection opportunities in the Andaman Sea close to India’s eastern coastline and strategic territories such as the Andaman and Nicobar Islands. More adversely for India, the Kra Canal in the ‘String of Pearls’ would also facilitate the unhindered movement of Chinese ‘research’ vessels mapping the Indian Ocean seabed destined for Maldives and Sri Lanka whereas the current route taken by these vessels through the Sunda Strait does not ensure a smooth passage given the patrolling by Indonesian Coast Guard.

What should India do? While some critics have labelled the Indian concern over the Kra project as ‘much ado about nothing’ given the uncertainties surrounding the latter and the lack of any official formal announcements regarding the same by either the Thai or Chinese governments, yet given the stakes involved India cannot ignore the potential consequences of a Chinese controlled Kra Canal/ Land-bridge. The re-iteration of the idea again in 2023 in the forums of APEC and the BRF, together with the Chinese search for overcoming the Malacca dilemma. Hence, as has been opined by former foreign secretary Vijay Gokhale, while much about the Kra project remains tentative, yet given the ‘emergence of the Bay of Bengal (encompassing the Andaman Sea) as new economic hub as well as arena of geopolitical competition, India should also start preparing itself. The following paragraphs will highlight the possible steps which can be taken by New Delhi to turn the Kra Canal into a ‘strategic opportunity’.

As a first step, the Indian government should ramp-up the development of naval and transhipment infrastructure of the Andaman and Nicobar Islands in order to utilise their strategic location straddling major sea lines of communication. Located around 700 miles southeast of the Indian landmass, the islands share Indian maritime delimitation zones with Myanmar, Bangladesh, Indonesia, and Thailand. Moreover, the islands are just a day’s sailing distance away from the Straits of Malacca and share proximity with strategic locations such as Sabang in Indonesia and the Coco Islands of Myanmar. Most importantly, the mouth of the Kra Canal would be 350 miles east of Port Blair the capital of the archipelago. Along with the steps taken to develop military infrastructure such as revamped airfields and jetties, focus should also be put on fast-tracking the development of the transhipment facility of the Galathea Bay in the Great Nicobar Island which plans to act as a feeder to the ports of Colombo and Singapore as well as handling cargo from Myanmar and Bangladesh. Given the proximity of the Galathea Bay to Thailand’s Ranong deep-sea port at the mouth of the Kra Isthmus, both these projects could be synergised to benefit each other thereby increasing Indian stakes and participation in the Kra project. This could be further explored as to how the Kra connection via the Galathea Bay could be further utilised to benefit Indian states along the Bay of Bengal.

Along with this the link between the Galathea Bay and the Kra Canal could also be synergised with the evolving Andaman-Aceh Initiative connecting the Islands with the port of Sabang in Aceh province. This triangular web of connectivity between the Andaman and Nicobar Islands, Sabang port at the mouth of the Malacca and the Ranong port at the Kra Canal would allow India not only multiple options for shipping its trade destined for the SCS but also could be utilised for its strategic value in enabling greater Indian naval presence in the Bay of Bengal. Such a linkage would fit well with India’s own ‘Necklace of Diamond strategy’ designed to counter Beijing’s String of Pearls. The ‘Necklace’ entails seeking access to strategic locations such as Duqm in Oman, Changi Base in Singapore, Chabahar Port in Iran and Assumption Island in Seychelles by entering agreements with the countries concerned while strengthening strategic partnerships with oceanic countries like Japan, Vietnam and Australia. The (informal) inclusion of the Kra Canal in the ‘Necklace’ is further enhanced by the interest expressed by countries such as US, Australia and Japan in developing the project, all of which are currently major partners of India in the Indo-Pacific. Along with Sabang, another potential connection which could be utilised is that between Kra and the developing Hon Khoai deep sea port in southern Vietnam. To be developed with mostly US financing, the port and its interest in utilising the canal could lead to greater Indo-Vietnamese engagement with Vietnam already being an integral part of the Necklace. Hence, before the potential transformation of the Kra into another Chinese pearl, India along with its partners should seize the initiative and include it as a Diamond.

However, a question arises as to whether India can generate enough capital on its own to able to unilaterally invest and influence the Kra project akin to China. This is all the more evident in the fact of the extent of availability of surplus capital in China which resulted in the BRI− such level of capital cannot be matched by the US nor major powers like Japan on their own. Hence, the ideal way would be to invest in the project through partnerships or through multilateral initiatives of which India is a part. Firstly, given the ambivalence among ASEAN countries towards the project, India should try to use its relations with the latter through the various ASEAN-India forums to bring them all, including Thailand on the negotiating table to discuss the collective costs and benefits of the project as well as try to promote joint India- ASEAN partnership especially with Myanmar, Thailand, Cambodia, and Vietnam to invest and develop the Canal/ Land-bridge. Following the Indian principle of emphasis on ‘ASEAN Centrality’ with regard to the Kra Canal would also prevent any form of total Chinese takeover of the project and its unnecessary tangling in major power competition with US. The interest of US, Australia, and Japan in the Kra Canal could be channelised along with India through the Quadrilateral Security Dialogue (QUAD) under the working group on infrastructure development. This is also helped by the fact that the Thai government had also invited investment from the QUAD countries as mentioned above in 2020-21.

Along with QUAD, multilateral platforms such as the Bay of Bengal Initiative on Multi Sectoral Technical and Economic Cooperation (BIMSTEC) and the Indian Ocean Rim Association (IORA) of which India and Thailand are both members as well as the multilaterals’ focus on infrastructure development, connectivity and trade and investment facilitation. Another forum for initiating Indian investment is the Indo-Pacific Oceans Initiative (IPOI) forum led by India where the Kra project could be covered under the pillar of ‘Maritime Connectivity’ of the IPOI. The multilateral and multi-partner nature of these investments as well as the emphasis on transparency, debt sustainability and respect for sovereignty in the official statements of India and US on connectivity would allay the Thai anxieties over loss and erosion of sovereignty compared to unilateral Chinese initiatives.

Finally, the strategic naval benefit of the Kra can be utilised through the Indian forum of Security and Growth for All in the Region (SAGAR) which entails maritime domain awareness, anti-piracy operations, Humanitarian and Disaster Relief (HADR) and naval cooperation and naval exercises with allied and friendly navies in the Indo-Pacific. The Thai Navy stationed in the ports or across the Kra Canal could be invited to be a part of the exercises thereby increasing Indo-Thai naval cooperation. At the same time, such exercises involving the Indian and Thai navies in the Canal or at the port of Chumphon, with participation from Vietnam would send signals to Beijing to not involve in any adventure across the Canal to Andaman Sea while highlighting Indian Navy’s ability to enter the SCS. Such signalling could also be buttressed with occasional joint Indo-Thai-Vietnamese patrols in the SCS thereby transforming the Canal’s initial disadvantage for India into an advantage.

Conclusion

The Indian Ocean has emerged as the new ground of Sino- Indian rivalry with Beijing and New Delhi jostling for influence in the maritime domain. It is in this background that the Kra Canal/ Land-bridge project rises to importance especially for India. The project, if realised under Chinese investment and subsequent control, would allow Beijing a smooth passageway from the SCS to the Andaman Sea and Indian Ocean bypassing the Straits of Malacca. Such a situation would be detrimental for Indian security which is intertwined with the maritime space of Andaman Sea and the Indian Ocean. Hence, despite the project’s apparent non-appearance as of now but given the stakes involved, India should be prepared with possible steps to be taken should the project see the light of the day or is able to garner enough attention from China to transform into a reality. On the first sight, India should try to seize the initiative through the developments of its assets in the Andaman and Nicobar Islands, seeking investment through multilateral forums like QUAD, IORA and BIMSTEC and even seek to include the canal in its ‘Necklace of Diamonds’ given the convergence of its major partners like US, Japan, Australia, and Vietnam in the project. Further strategic utilisation of the project to counter Chinese adventurist moves vis a vis the Andaman Sea and Indian Ocean could be done by including the Canal and the Thai Navy in the SAGAR activities.

Indian Minister of External Affairs (MEA) Dr S Jaishanker had noted, back in 2016, the ‘interactive dynamic between strategic interests and connectivity initiatives−a universal proposition−is on particular display in our (Asian) continent’ and warned against countries using connectivity ‘as an exercise in hard-wiring that influences choies’−evident in Chinese projects in South Asia and the IOR that has the capability to undermine our security and interests. At the same time, in The India Way, Dr Jaishankar emphasises on the Indian vision of connectivity which ‘underlined the importance of trust and respect for sovereignty, transparency, viability and sustainability’ which in ‘essence was a call for an Asia of cooperation, rather than of rivalry’[iv]. Hence, the definition of an India −defined Asia of cooperation could be realised in the Kra project.

In his latest work Why Bharat Matters Jaishankar draws analogies between the events of the epic Ramayana and its principal characters Lord Rama and Lord Hanuman with India’s current foreign policy experience. Just like Rama had to undergo various trials and tribulations to realise his warrior prowess, India too would have to pass through difficulties in the external environment to realise its potential. Similarly, like Lord Hanuman who was made unaware of His own divine powers as a result of a curse and would later realise it after being reminded of the same and by performing his role in the events of the epic, India too would realise its potential as it engages more with the world and its extended neighbourhood. Perhaps the Kra Isthmus provides an opportunity for both.