New Delhi: Pakistan and China have decided to widen the scope of the China Pakistan Economic Corridor (CPEC) including expansion of activities in the Gwadar Port. The development could mean a headache for India which already has concerns regarding the CPEC as it overlaps with Pakistan-occupied Kashmir.

The CPEC is China's flagship project under its belt and road initiative, which aims to link China with economies in southeast and central Asia.

People familiar with the CPEC plan told ET that China recently signed new agreements with Pakistan to launch industrial, agriculture and Socio-economic projects under this initiative. The corridor also plans to promote the petrochemical, hydrocarbon, as well as maritime sectors through Gwadar Port, they said.

The decisions were taken at a recent meeting of the CPEC’s Joint Cooperation Committee (JCC) in Beijing. The industrial cooperation with China would help relocate industry and operationalisation of four special economic zones (SEZs) in Rashakai, Dhabeji, Faisalabad and Islamabad in Pakistan, the country's Planning, Development and Reforms Minister, Khusro Baktiar, told reporters in Lahore on Sunday.

China has reportedly agreed to give a grant of $1 billion for development of education, health, irrigation and less-developed areas of Pakistan. Islamabad had also urged Beijing to set up light engineering and manufacturing units in the country to boost the local economy, which is facing a crisis due to foreign exchange shortage.

The Imran Khan-led government is understood to have prepared a master plan for the Gwadar Port, which has been built with Chinese assistance, and could also work as a naval base for China. China is in the process of creating a colony only for Chinese nationals at Gwadar. Pakistan wants to develop hydrocarbon and petrochemical complexes in Gwadar, besides boosting the fisheries sector through the port.

However, India-backed Chabahar Port in Iran, which is close to Gwadar, has the potential to rival Gwadar. The Chabahar Port is functional and being used for transporting goods to Afghanistan. Also, an international conference in Chabahar city next month would help in drawing a road map for Eurasian countries to have footprints in Chabahar.

Besides, Pakistan wants to promote the agriculture sector under CPEC by inviting Chinese companies to explore investment opportunities and leverage agro value chains. Khan, in a recent internal meeting, is understood to have made it clear that early completion of CPEC projects was in Pakistan’s interest and stressed that he wants to follow the Chinese model for poverty alleviation.