Internet Terrorism – Use and Abuse

Internet Terrorism in the new world order are like hand in glove. The forces of internet have engulfed the entire globe within its epiphany as the world descends into a new era of social media and Governments are increasingly focusing on the idea of e-Governance. But there are certain issues attached to the use of internet besides cybersecurity and breach of privacy. The most dangerous of them all is the use of internet for terrorist propaganda. Let us look at the issue with a deep contrast and how it affects India and its internal as well as external security architecture.

Internet Terrorism

Internet and Terrorism

According to a Report from the House of Commons Home Affairs Committee, United Kingdom, social media has been consciously failing to combat extremism and not doing enough to stop online radicalisation. The radicalised people are actually those citizens who can be easily be brainwashed based on a certain ideology and are prompted to take certain terrorist acts. Individuals pick up this ideology and get radicalised within 1-2 months. Earlier it took 1-2 years to pick up persons, assess them, know their inclinations, train and evaluate them as per a certain ideology.

Internet Terrorism | Radicalisation

Internet and Terrorism

  • Social media provides certain form of anonymity for propagation of ideologies. It also acts as a platform for early recruitment of youth in terrorist organisations.
  • Technological information can be provided in a very rudimentary manner. For example: Getting information about making explosives at home can become very easy after watching a certain type of video. A common person has access to this information as well.
  • Terrorist groups work as a dispersed network. If some websites are closed or shut down for their posts, they can easily access some other social media platform for propagating their ideas because social media platforms have instantaneous and worldwide reach. For example: When Twitter removed tweets related to terrorism, IS moved to Diaspora. Diaspora is a social media platform that provides total anonymity and security and once something is posted, the website cannot take it away or remove it.
  • These days the basic use of internet is done by terrorist groups for two purposes: propagation of ideas and communication. Communication is end to end encrypted now and there is no practical way for any intelligence agency to decrypt these communications in real time.
  • Organizations prefer for decentralized planning of terrorist attacks and the reason lies in the fact that if the planning is done from one centre or in centralized manner, they can be easily targeted by those against them. It is easier to open a franchise operation for them because it gives the attacker a sense of belongingness and identity that they are working on terrorist organization’s behalf and serving its purpose. For example: The recent attacks in France, Belgium and Germany were of this nature and it is very difficult to control every individual.

Internet Terrorism | Indian Scenario

Internet and Terrorism

As far as India is concerned, there have been cases of youths from Maharashtra and Kerala who wanted to join IS. There was a case of a corporate executive in Bengaluru who had lakhs of followers for his ideas supporting IS ideology.

  • Section 79 of the Information Technology Act 2000 says that Intermediaries, like Google, Yahoo, Facebook and Twitter are not liable for third party information if they observe due diligence while discharging their duties. Further if the companies take action within 36 hours of complaint made to them for content, then one cannot move to court against them. There are other provisions in this Act but they are not applied in a stringent manner.
  • If there is a complaint regarding any content, there is no institutional mechanism where a user can put forward his complaint. Institutions such as Counter Terrorism Internet Referral Unit (CTIRU) are there in UK to counter online extremism and India needs to have such mechanisms. Although there are some police patrolling pages on Facebook but are not very popular yet. Most of the people don’t know about it.
  • An inclusive and transparent approach to community outreach is necessary. Citizens need to be aware of any suspicious person or activity and report it to the concerned authorities. Their involvement will also help to put a check on these activities up to some extent at least.
  • There is a need for the Indian agencies countering terrorism to link up with international agencies like Europol or Interpol as they make considerable contributions in combating extremism and terrorism.

Internet Terrorism | Other Issues


  • The servers are located outside India and therefore, they are beyond the control of the Government of India.
  • Whenever social media is touched, the response from civil society is terrible. They don’t want to be restricted in any way unmindful of the actual problems.
  • Attitude of US Government on putting restrictions on social media by India is taken as efforts to curb freedom of speech and expression. It is a medium of soft power for US.
  • Technically there are no algorithms, neural networks or artificial intelligence mechanism with which these social platforms can put a check on the bulk of posts being made every day.

Internet Terrorism | Conclusion

Although no company wants to wilfully promote terrorism but terrorism, radicalisation and extremism are something that has taken a gigantic shape. It needs simultaneous efforts both nationally and internationally to eradicate this disease.

Indo-American Defence Ties

Indo-American ties will see a major shift this week. National Defence Authorisation Act of 2017 which allocates funding each year to the US military is scheduled to be presented in the US Congress this week. The amendment is entitled – “Enhancing Defence and Security Cooperation with India”. It is a major budget bill that will formalise and consolidate India’s status as a major US partner.

Indo-American | Provisions of the Bill (for India)

Indo-American Bill

The India Amendment which forms the Section 1292 of the NDAA mandates: “Not later than 180 days after the date of the enactment of this act (the NDAA), and annually thereafter, the Secretary of Defence and Secretary of State shall jointly submit to (Congress) a report on how the United States is supporting its defence relations with India in relations to the actions described. . .”

Indo-American | History of such bills in US

Although India is a non-NATO ally of the United States but the elevation of this ‘special’ relationship is unprecedented. The current NDAA is in line with the Naval Vessel Transfers Act, 2008 which has legislatively committed the US to ensuring Israel enjoys a “qualitatively military edge” over every potential adversary. The United States has been openly supportive of a militarily and economically stronger Israel for obvious purposes.

 Indo-American | What does this Act bring for India?


  • US Congress is virtually binding the future American Presidents, whatever their alliances or foreign policies are in real, to nurture India-US defence ties.
  • India amendment directs the US Department of Defence (the Pentagon) and Department of State to sustain and prioritize defence cooperation with India through a specified series of policies and actions.
  • These include: recognizing India’s status as “a major defence partner of the United States”, designating an official to ensure the success of the “Framework for the United States-India Defence Relationship”, to “approve and facilitate the transfer of advanced technology”, and to “strengthen the effectiveness of the US-India Defence Trade and Technology Initiative (DTT) and the durability of the (Pentagon’s) India Rapid Reaction Cell”.
  • The passage of the India amendment makes it obligatory for all US administrations to do so.

 Indo-American | Ramifications on India-US defence ties


  • India recognized as a “major defence partner of the United States” which includes ambiguity but a positive connotation to it.
  • The act has designated US defence officials to ensure success of US-India Framework Agreement on Defence. This clause acts as a confidence building measure between the two partners.
  • It also mandates to support combined US-India military planning for non-combat operations which calls for close and deeper coordination between the two armed forces.
  • It calls to promote US-India weapons interoperability which is essential to boost a cooperative defence framework between the two countries.
  • An important clause calls for boosting cooperation with India “to advance US interests in South Asia and greater Indo-Asia-Pacific regions.” This is a strategic manoeuvring to converge India-US interest in the South China Sea and the broader Asian region.
  • Strengthening of “Defence Trade and Technology Initiative (DTTI)” would ensure sharing of defence technology and help in realisation of our mission of ‘Make in India’.
  • The clause which calls for the development of “mutually agreeable mechanisms” to verify security of US-supplied defence equipment and technology would ensure quality transfer and predictability in procurement.
  • Annual report to Congress on how the US Government is supporting defence ties. This would ensure a consistent and predictable future for the security ties with a new seal of accountability attached to it. This would reduce deviations in approach towards India with respect to change in administrations in the US.
  • For the last decade, a consensus has been growing among America’s soldiers, spies and diplomats that a stronger and more capable Indian military is in America’s national security interest.
  • The introduction of such an act underlines bipartisan Congressional consensus that India-US relationship is a defining partnership of the 21st

Indo-American |  Criticism

  • There has been criticism that the India amendment makes no change to the US Arms Export Control Act, which places India in the category of countries to which arms sales require a 30-day notification to the US Congress; rather than the more favoured nation that require only a 15-day notification.
  • Hence, there would be a problem for India in case of high volume procurement of arms from the US in case it cannot wait for an extra 15 days’ approval period (events such as war).

 But the US officials have confirmed that this distinction has absolutely no effect on the level of technology transfer.


In the light of a growing bonhomie between the United States and India, this amendment to the NDAA is another stamp of appeal to the military and government circles of India to approach proactively towards the US overtures towards India. America understands that India is the most potent ally in the Asian region to contain China and without taking India into confidence, it would not be an easy task to promote the ‘pivot to Asia’ that it desires. But for both India and the US, the interests converge only at the East, whereas the positions and interests in the West of India are divergent and inconsistent.


Nuclear Power and India

Nuclear Power is the talk of the town with the energy crises these days. The world is taking a sharp turn back to the 20th century when there was a ‘nuclear renaissance’. The reasons for this going back to the history may be many, but the most important among them is the stress on the renewable sources of energy that the world is paying attention to.

Nuclear Power | History

In 1945, generating electricity was one of a number of potential applications of atom-splitting technology developed in a hurry by the United States to help win a world war. Nuclear power thereafter became a reality because of government support, public confidence that it would be cheap, and absence of serious misgivings about proliferation, safety, and waste management. Enough resources were invested in this idea to set up more than 400 nuclear power plants in 31 countries that now produce 11 percent of the world’s electricity.

 Nuclear Power | The world acceptance

Nuclear Power Acceptance

Today, there are good reasons why nuclear power may continue to make advances worldwide.

  • At the top of the list are expectations for economic growth linked to urbanization and greater electrification, and the consensus of among almost all nations that they need carbon-free sources to generate most of their power and mitigate dramatic climate change.
  • The demands on electricity supply systems will be very different than they were a generation ago when most of the world’s nuclear power plant projects were initiated.
  • The shift from non-renewable energy resources indicate that if nations penalize power generated by coal, gas and oil — fuels that account for 67 percent of the world’s electricity production — a shift back to nuclear power could happen.

 Nuclear Power | Risks

Nuclear Power Risks

Besides large scale displacement of people and land acquisition problems attached with starting a nuclear project, there are many other issues involved too.

  • In case of a meltdown, a nuclear power plant could release radiation into the environment like in Fukushima disaster.
  • Biggest challenge is how to dispose radioactive waste.

Health concerns

  • If a person were exposed to significant amounts of radiation over a period of time, this exposure could damage body cells and lead to cancer.

Environment concerns:

  • Nuclear power plants use water from local lakes and rivers for cooling. Local water sources are used to dissipate this heat, and the excess water used to cool the reactor is often released back into the waterway at very hot temperatures. This water can also be polluted with salts and heavy metals, and these high temperatures, along with water pollutants, can disrupt the life of fish and plants within the waterway.
  • Terrorists and anti-national forces may target nuclear plants.

Nuclear Power | Safety Measures to be taken


  • Continuous check on control rods, lubricants so there remains no mechanical problem during operation.
  • Strict regulation guides for checking and measuring radiation level regularly.
  • More innovative security system should be installed with continuous up gradation.
  • Promoting Private or PSU companies to use nuclear waste for electricity generation so that over or unnecessary disposal can be minimized.
  • Setting up nuclear reactors in non-seismic zones to prevent possibility of nuclear disasters.
  • Regulating body should stay vigil and lay detailed guidelines.
  • Enhancement of the level of safety of the backup systems in reactors that are under construction in India.

Nuclear Power | India’s Measures


  • India has highly equipped nuclear plants with full safe shutdown system, early warning systems, combination of active and passive coolant system and robust containment to prevent releases.
  • Mechanisms to withstand extreme weather phenomena.
  • Periodic and unannounced safety reviews by NPCIL and AERB.
  • Coastal plants have appropriate funds to prevent shoreline pollution.
  • AERB lays minimum safety regulations that all plants have to follow.
  • Licenses are only given to operators with in depth knowledge and skill.
  • All nuclear plants have been made in seismically inactive zones.
  • The disposal of nuclear waste is as per standards of procedure and no violation has been found till date.
  • They are highly protected sites by our intelligence and armed forces.
  • All Indian plants have double dome built-up.

Nuclear Power | Alternative source of renewable energy

While nuclear power awaits government fixes, renewable energy technologies led by solar and wind power are jumping into the breach. They now provide a quarter of the world’s electricity. Their market penetration is currently favoured by the same kind of policy stimuli that governments after World War II used to favour nuclear power.

So far, renewables cannot replace the world’s nuclear power plants. But their success may lead decision-makers not to commit to nuclear investments that might become stranded assets. It is also well known that a nuclear investment requires a century-long commitment because of the trajectory for operation, decommissioning, and waste management.

Nuclear Power | Future


The ultimate litmus test for nuclear power in this century is how it will respond to the forces of globalization. So far, the record is mixed. Globalization has favoured procurement and safety standards. But the downsides could prove fatal.

India plans to increase the installed nuclear power capacity from the current 5,780 MW to 10,080 MW by the end of the Twelfth Plan (2017) and 20,000 MW by 2020. Also, India gave an assurance in Paris that by 2030 it would reduce carbon emissions relative to its GDP by 33-35 per cent from 2005 levels and also generate 40 per cent of the country’s electricity from non-fossil fuel-based sources, using among others the solar, wind and nuclear options. In this light efficient mechanisms need to be brought in the interest of humanity.

MTCR, NSG, Australia Group and Wassenaar Arrangement

What is the Missile Technology Control Regime (MTCR)?
Established in April 1987, it is a voluntary association of 34 countries — 35, once India is formally included — and four “unilateral adherents” that follow its rules: Israel, Romania, Slovakia, Macedonia. The group aims to slow the spread of missiles and other unmanned delivery technology that could be used for chemical, biological and nuclear attacks. The regime urges members, which include most of the world’s major missile manufacturers, to restrict exports of missiles and related technologies capable of carrying a 500 kg payload at least 300 km, or delivering any type of weapon of mass destruction.
How did India get into it?
Prospective members must win consensus approval from existing members. United States policy had been that members that are not recognised nuclear-weapon states — including India — must eliminate or forgo ballistic missiles able to deliver a 500 kg payload at least 300 km. The US, however, made an exception in 1998 for Ukraine, permitting it to retain Scud missiles and, in October 2012, South Korea was allowed to keep ballistic missiles with an 800-km range and 500-kg payload that could target all of North Korea.
For India, the US seems to have waived these terms, allowing it retain its missile arsenal. Therefore, India has formally joined the MTCR on 27th June, 2016.
How does the MTCR work?
Members must have national policies governing export of ballistic missiles, cruise missiles, unmanned aerial vehicles, space launch vehicles, drones, remotely piloted vehicles, sounding rockets, and their components. There are two categories of exports: Category I, which are basically exports of complete products and major sub-systems and are meant to be extremely rare — with guidelines instructing members that “there will be strong presumption to deny transfers”; and Category II, which includes materials, technologies and components whose transfers can be made more easily, since they generally have civilian applications, even though these too are done with caution.
Does joining the MTCR make getting missile technology easier?
There are no special concessions for MTCR members. But India hopes its MTCR membership will be one more reason for the US to consider exporting Category 1 UAVs, Reaper and Global Hawk, which have been key to counter-terrorism efforts in Afghanistan, Pakistan, Somalia and Yemen. These drones have so far been sold to only one country, the UK, though unarmed versions have also been made available to Italy and South Korea. The US has been rethinking rules on exports, aware that competitors in Israel, Russia and China are working on similar products — and India wants to be at the head of the queue when the Reaper and the Global Hawk go on the market.
Are there any sanctions for breaking MTCR rules?
Rule breakers can’t be punished. However, US law mandates sanctions for companies and governments that export MTCR-controlled items. The sanctioned entity can’t sign contracts, buy arms and receive aid for two years or more.
Does the MTCR actually stop the spread of missile technology?
Yes, and no. North Korea, Iran and Pakistan acquired ballistic missile technology from China. But then, China began to feel the pinch of US technology sanctions — and announced, in November 2000, that it would stop exporting ballistic missile technology. Four years later, it applied for MTCR membership — but has been denied entry because of suspicion that some companies in the country are secretly supplying technology to North Korea.
Many others dropped missile programmes because of MTCR pressure: Argentina abandoned its Condor II ballistic missile programme (on which it was working with Egypt and Iraq) to join the regime. Brazil, South Africa, South Korea and Taiwan shelved or eliminated missile or space launch vehicle programmes. Poland and the Czech Republic destroyed their ballistic missiles.
It is possible China may now seek some kind of bargain, whereby it is given entry to the MTCR in return for letting India get into the NSG, where it wields a veto.
Why does India want to be in the Nuclear Suppliers Group (NSG)?
Following India’s 1974 nuclear tests, the US pushed for setting up a club of nuclear equipment and fissile material suppliers. The 48-nation group frames and implements agreed rules for exporting nuclear equipment, with a view to controlling the spread of nuclear weapons; members are admitted only by consensus. India has been trying, since 2008, to join the group, which would give it a place at the high table where the rules of nuclear commerce are decided — and, eventually, the ability to sell equipment. Many countries that initially opposed its entry, like Australia, have changed stance; Mexico and Switzerland are the latest to voice support. India’s effort has been to chip away at the resistance, leaving only one holdout — China. But until China accepts India’s entry, there is no hope of membership.
Why does the US want India in the NSG?
The answer lies in the US effort to strengthen the global nuclear non-proliferation regime, whose centrepiece is the 1968 Nuclear Non-proliferation Treaty, or NPT. The NPT defines “nuclear weapons states” as those that tested devices before January 1, 1967 — which means India cannot ever be one. India — like Israel and Pakistan — thus refused to sign the treaty. From 2005, though, President George W Bush’s administration sought ways to deepen strategic cooperation with India. Nuclear energy was a key means to strengthen cooperation, but since India wasn’t a member of the NPT, the technology couldn’t be shared. Then, a way forward was found — the US-India Civil Nuclear Agreement. India agreed to separate its civilian and military nuclear programmes and put the civilian part under International Atomic Energy Agency safeguards. India also changed its export laws to line up with the NSG, MTCR, Wassenaar Arrangement, and Australia Group — the four key nuclear control regimes. The US agreed to shepherd Indian entry into these regimes, which meant India would for all practical purposes be treated like an NPT member, even though it wasn’t one.
Why doesn’t Pakistan want India in?
The Pakistani argument is that giving India easy access to fissile material and technology for its civilian nuclear programme means it would have that much more material for its military nuclear programme. Thus, Pakistan says, the move to give India NSG membership is fuelling a nuclear arms race. But this argument falls apart because Pakistan is resolutely opposed to a key international agreement called the Fissile Material Cut-Off Treaty (FMCT), which would cap the military nuclear stockpiles of all countries. The FMCT ought to put an end to Pakistan’s fears, but Islamabad has refused to sign.
And what is China’s problem?
Chinese diplomats say Beijing wants NSG entry to be norm-based — in other words, whatever rules govern Indian entry should apply to others too. Norm-based entry would, presumably, help Pakistan gain entry, something many in the NSG are certain to resist because of the country’s record as a proliferator of nuclear-weapons technology to Iran, Libya and North Korea.
Why then did China go along with the NSG waiver in 2008?
Geopolitics. The 2008 one-time waiver allowed nuclear commerce between NSG members and India — the agreement that now allows Westinghouse, and its competitors in France or South Korea, to bid to set up civilian reactors in India. The waiver came only after President Bush rang President Hu Jintao and called in a favour. Back then, US-China relations were riding high — on the back of surging trade, and a common vision of how the international order should be structured. Today, President Barack Obama and President Xi Jinping are at odds over Chinese muscle-flexing in the South China Sea. The odds of a phone call changing the state of play are next to zero.
What might tip the odds?
India and the US have cards to play. China wants membership of the MTCR — and to enter that club, and see an end to key technology sanctions, it needs US help. European Union states too have denied China exports of critical military technologies, which might be a bargaining chip. All depends on how well India bargains — and how much Pakistan’s NSG membership actually means to China. Either way, this is going to be long diplomatic haul.
Wassenaar Arrangement:
Wassenaar Arrangement was established to contribute to regional and international security and stability. It aims to promote transparency and greater responsibility in transfer of conventional arms and dual-use goods and technologies. It has 41 member states and was established in 1996 as an extension of Coordination committee for Multilateral export Controls (COCOM). The participating states ensure that transfer of materials do not contribute to the development or enhancement of military capabilities.
India is not a member of the Wassenaar Arrangement, but hopes to be one soon. The United States is likely to support India’s bid.
The Australia Group:
The Australia Group is an informal forum of countries that seeks to ensure that exports do not contribute to the development of chemical or biological weapons. It was established in 1985 and presently has 42 members.

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Saudi Arabia: Crisis of legitimacy

India-Saudi Arabia

Few days ago, the Financial Times published an article showing how Saudi Arabia had lost market share in more than half of its most important client countries for crude oil. An embattled Saudi regime is confronting a convergence of crucial challenges at the domestic as well as international levels.
Internal conflicts in the family?
The end of the process of the succession to the throne from one brother to another, and the nomination of the son of King Salman – Mohammad bin Salman al-Saud – as deputy crown prince, minister of defence and de facto head of the Saudi economy, has stirred internal turmoil and tensions inside the royal family. An unnamed Saudi prince, one of the grandsons of the monarchy’s founder, went as far last fall as asking for the removal of King Salman. Some of the initiatives of the new deputy crown prince – such as the possible listing of ARAMCO, as is rumoured- might affect the “comfort zones” of members of the royal family and generate resentment. If this leads to animosities and rivalries coming out into the open, it would open a new phase in Saudi politics with very crucial implications for medium-term stability.
Why the strife in the family looks dangerous?
This strife in the royal family comes at a time when the regime is confronting the frustration of a middle class increasingly eager to enjoy greater social freedom but still suffering under the straitjacket imposed by the Wahhabi clergy. However, the monarchy has an extremely limited margin to manoeuvre in fulfilling these aspirations: the regime is based on the alliance between the al-Saud family and the Wahhabi clergy, the latter providing legitimacy to the former in exchange for a quasi-free rein to impose the most fundamentalist version of Islam on Saudi society.
Are the recent reforms working in favour of the family?
• It is doubtful that the timid reforms taken by the king, such as opening municipal elections to women voters and candidates, will be enough to assuage the increasingly vocal aspirations of the middle class.
• Social media in Saudi Arabia has become an extremely vivid and lively channel for thinly-veiled sarcasm and criticism of the royal family and the status quo.
• At the same time, the monarchy has to deal with an increasingly restless Shia minority in the eastern provinces – where a great part of the kingdom’s oil reserves are located. This Shia minority – about 3.5-4 million people out of a native population of about 24 million – took to the streets during the “Arab Spring”, and there are regular occurrences of violent unrest in the east. The beheading of Sheikh Nimr al-Nimr, a vocal critic of the Saudi regime, was a warning not only to the Shia population but also to Iran.
Why the timing of the revolt is bad for the family?
• This rise of domestic tensions comes at a time when the regime has much less ability to use subsidies and handouts to assuage social frustrations.
• Taking into account the domestic budget expenditures plus the cost of supporting the al-Sisi regime in Egypt and anti-regime groups in Syria as well as the war in Yemen, Saudi Arabia needs a price of $110 a barrel – at current production levels – to balance its budget. But a barrel of Brent is now hovering around $40, with no prospects of a significant increase in price.
• The kingdom had a budget deficit of $98 billion in 2015. This year’s budget plans to reduce subsidies for water, electricity and petroleum products and is based on a restructuring of the economy – including privatisations, the introduction of a VAT and a diversification of activities to reduce the 90 per cent reliance on oil revenues.
• Nevertheless, the 2016 budget still assumes a deficit of $87 billion on the basis of an oil price in the low $40 per barrel. While Saudi Arabia’s ample foreign currency reserves still provide a cushion, they are shrinking too fast for comfort – at an average of $18 billion a month since last summer. In this context, it would not be surprising if the regime were to drop the peg of its currency to the dollar in the course of the year.
International pressures-
• The monarchy is also under increased pressure at the international level: It is now facing an Iranian rival for regional prominence that is buoyed by the lifting of sanctions and which will not be deterred by low oil prices from pumping crude oil out at maximum capacity. Saudi efforts to get rid of Tehran’s point man Bashar al-Assad are getting nowhere; in fact, the Syrian ruler has consolidated his position recently.
• In the meanwhile, the Saudis are stuck in a war in Yemen which is not only tremendously costly but which is not achieving the objective of destroying the Iran-supported Houthi insurgency. Even more alarming is the fact that there seems to be no endgame to the war and that pictures of the terrible casualties of Saudi bombings are now generating adverse reactions in the Arab public.
• More broadly, there is a growing international resentment against the regime’s blind eye to Wahhabi clergy proselytising the kind of Islamic fundamentalism which feeds violence and terrorism in different parts of the world. Harsh punishments for “offences” which would not be considered as such elsewhere, and the increased recourse to beheadings (157 in 2015) do not improve the regime’s image in the world.
What about US-Saudi alliance?
This comes in a context where the pact between the monarchy and the US sealed on the USS Quincy in February 1945, according to which the US would provide military security to Saudi Arabia against US access to oil supplies, is fraying at the seams. With the US close to energy self-sufficiency, increasingly reluctant to stay the world’s policeman, and embarking on a normalisation of relations with Iran, the Saudis consider that they might soon be on their own. They have noticed how Washington didn’t hesitate to ditch an old ally such as Mubarak in Egypt.
This combination of internal and external factors makes for a very jittery Saudi regime. While there is no underestimating the resilience of the monarchy, a regime under pressure might be prone to shed its traditionally cautious foreign and security policy.
As there is no abatement of tensions between Riyadh and Tehran, the explosive component of the Sunni/Saudi – Shia/Iranian confrontation will continue to fuel volatility and conflict in West Asia.

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Transnational Corporations and sovereignty

In the last few decades the activities of transnational corporations aided by tax havens on one side and terrorists on the other side have destroyed the concept of nation state and its sovereignty evolved after the 30 years’ war in 1648 in Westphalia.
What is Westphalian sovereignty?
Westphalian sovereignty is the principle of international law that each nation state has sovereignty over its territory and domestic affairs, to the exclusion of all external powers. The principle of non-interference in another country’s domestic affairs, and that each state (no matter how large or small) is equal in international law is recognized. This doctrine named after the Peace of Westphalia, signed in 1648, which ended the Thirty Years’ War.
After that war major continental European states – the Holy Roman Empire, Spain, France, Sweden and the Dutch Republic – agreed to respect one another’s territorial integrity. As European influence spread across the globe, the Westphalian principles, especially the concept of sovereign states, became central to international law and to the prevailing world order.
What are the three core principles of Westphalian sovereignty?
The three core principles on which the consensus rested are:
1. The principle of the sovereignty of states and the fundamental right of political self -determination.
2. The principle of legal equality between states.
3. The principle of non-intervention of one state in the internal affairs of another state
Interestingly all three are questioned by contemporary leaders of West and radical Islam.
Role of transnational corporations and tax havens-
Interestingly we find global corporations transcending sovereignty in search of global profits. For this they use tax havens as a tool.
Tax havens–numbering more than 70 jurisdictions–facilitate bank facilities with zero taxes and no-disclosure of the names and in many cases anonymous trusts holding accounts on behalf of beneficiary. Basically lawyers and Chartered accountants will deal with such investment institutions. Sometimes a post box alone will be operative system. For instance, In the case of Bahamas one building seems to have had tens of thousands of companies registered there.
Impact on world economy –
• A simple method of trade mis-invoicing by global companies using tax-havens have impacted developing countries nearly 730 billion USD in 2012 says Global Financial integrity. Another interesting finding by GFI is about terror financing using Tax haven route.
• Because of the increasing wariness of MNCs using Tax havens for avoidance of taxes and the opaque ways of functioning of these off-shore structures, demands are growing about their activities and even closing down of these tax havens by European parliament etc.
Alternatives available –
• Due to relentless pressure from OECD as well as G20 many of these secretive jurisdictions are becoming more transparent. OECD-led project on Base Erosion and Profit Shifting (BEPS) lays out 15 action points to curb abusive tax avoidance by MNEs. The BEPS project takes note of the erosion of a nation’s tax base due to the accounting tricks of Multinational Enterprises (MNEs) and the legal but abusive shifting out of profits to low-tax jurisdictions respectively.
• There is another domestic solution for a country like India to check the menace of loss of revenue by the nexus of transnational corporations and tax havens – Offshore Financial Centres.
Emergence of Offshore Financial Centres-
The economist Ronen Palan defines OFCs as “markets in which financial operators are permitted to raise funds from non-residents and invest or lend the money to other non-residents free from most regulations and taxes”.
• It is estimated that OFCs are recipients of 30% of the world’s FDI, and are, in turn, the source of a similar quantum of FDI.
Learning from the international experience –
• United States set up International Banking Facilities (IBFs), “to offer deposit and loan services to foreign residents and institutions free of reserve requirements”.
• Japan set up the Japanese Offshore Market (JOM).
• Singapore has the Asian Currency Market (ACU).
• Thailand has the Bangkok International Banking Facility (BIBF).
• Malaysia has an OFC in Labuan island, and other countries have similar facilities.
Offshore Financial Centres are designed specifically to attract foreign investment by amending domestic financial laws.
• Such being the case, all India needs to do to attract FDI is to become an OFC, or create an OFC on its territory. OFCs are less tax havens than regulatory havens, which means that financial capital can do here what it cannot do ‘onshore’.
Conclusion –
But the fact of the matter is these Trans National Companies and Tax Havens together have significantly undermined the concept of sovereignty and territorial jurisdictions. It is ironical that Terror organisations on one side and Tax havens on the other have completely undermined Westphalia consensus. In that context countries like India have every right to exercise its freedom to pursue terrorists who are undermining its existence whether sponsored by foreign countries or home grown. The concept of territorial jurisdictions and sovereignty are no more valid in the context of terror organisations since they damage both India and its own host countries over period of time. India must protect its national interests and institutions by challenging inimical forces wherever they are located without worrying about Westphalia consensus.

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Moving towards a cashless society

With the recent move to demonetize higher denomination currency, it is clear that the Government wants Indian economy to move towards a cashless economy.
The US adopted a policy with similar goals in the 1930s, eliminating its citizens’ right to own gold so they could no longer “hoard” it. At that time the US was in the gold standard so the goal was to restrict gold. Now that we are all in a “paper” standard the goal is to restrict paper.
However, while some economic benefits may arguably accrue in the short-run, this needs to be balanced in relation to some serious distortions that could rapidly develop beyond that. So what are such distortions? Is it beneficial to move towards a cashless society? Is India prepared for a cashless society?
• Enhance the tax base, as most / all transactions in the economy could be traced by the government;
• Substantially constrain the parallel economy (black economy), particularly in illicit activities;
• Force people to convert their savings into consumption and/or investment, thereby providing a boost to GDP and employment;
• Foster the adoption of new wireless / cashless technologies;
• Security of transactions as it is very easy to shut down a digital wallet remotely if it falls into the wrong hands;
• Your biometric ID is yours and yours alone, and therefore very hard to copy;
A cashless system could be convenient for users who like to combine multiple functions onto one handheld device:
– It eliminates the need to carry cash or plastic.
– Digital payments can be made with a tap or wave of a smartphone, depending on the technology used.
– It would make it easier to loan or borrow money – as with digital payments, lending and borrowing can be reduced to a tap or wave of a smartphone.
• The government loses an important alternative to pay for its debts, namely by printing true-to-the-letter paper money. It is one of the reasons of Greece crisis.
• Paper money costs you nothing to hold and carries no incremental risk (other than physical theft); converting it into bank deposits will cost you fees (and likely earn a negative interest) and expose you to a substantial loss if the bank goes under. After all, you are giving up currency directly backed by the central bank for currency backed by your local bank;
• This could have grave consequences for retirees, many of whom are incapable of transacting using plastic. Not to mention that they will disproportionately bear the costs of having to hold their liquid savings entirely in a (costly) bank account;
• Ditto for poor people from the remote areas, many of whom don’t have access to the banking system; this will only make them more dependent, in fact exclusively dependent, on government handouts;
• Important to see if banks would actually like to deal with the administrative hassle of handling millions of very small cash transactions and related customer queries;
• If there is an event that disrupts electronic transactions (e.g. extensive power outage, cyberattack, cascading bank failures) people in that economy will not be able to transact and everything will grind to a halt;
• Of course enforcing a government mandate to ban cash transactions must carry penalties. This in turns means more regulations, disclosure requirements and compliance costs, potentially exorbitant fees and even jail time.
There is no doubt that there are huge merits in adopting a cashless economy over the conventional printed currency. But Government has to ensure that the marginalised groups do not further get alienated from the progress story of India. Moreover, India needs to build basic infrastructure required for the operation of a cashless economy (most basic of all – electricity). There is a long way to go to realise the dream of a cashless economy, but we have to start it from somewhere, so better start now.

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Contemporary issues between India and Pakistan

You cannot defeat an enemy whom you cannot define. If Pakistan is sponsoring terrorism against India, then Pakistan is an enemy state. Realpolitik says we should accept it without any mincing of words. Apparently, India has failed to realise this earlier but it has slowly started to make peace with this reality. India has been vociferously pushing across the same thought around the world diplomatically.
India’s diplomatic onslaught against Pakistan has been isolating Pakistan globally. US is shrinking off its shoulders from Pakistan quite often. On multiple occasions, the European countries have also stated it categorically that Pakistan should fall in line or face isolation.
Even many Islamic countries have abandoned their old policy of coming to the rescue of Pakistan. Faced with a crippling economy, unstable polity and proliferation of domestic dens of terror, Pakistan is being bitten by the snakes of its own backyard.
India’s objectives:
India has a dual security strategy towards Pakistan –
• Dismantling the terrorist sanctuaries and their operators in Pakistan, i.e. the Army and the ISI linked terror groups. Pakistani Army’s legitimacy rests solely on the anti-India rhetoric which is why every peace effort initiated by either side has been stumbled upon by the Rawalpindi network to maintain status quo of power.
• Securing nuclear threat emanating from the Pakistani establishment. A single way to ensure the same is to strengthen the partial democratic forces at hand in Pakistan and widening the trust deficit between Rawalpindi and citizenry by eroding legitimacy.
How to realise these objectives?
India needs a dual strategy as a pre-requisite to neutralise the Pakistani threat-
• Handling internal challenges – India should value its freedom, but if it comes in conflict with the supreme interest of the state, the latter should prevail. India’s political spectrum should be unanimously united over a strict approach against terrorism and keep armed forces out of politics.
• Handling external challenges – Leapfrogging the conventional warfare towards third generation warfare via strong intelligence arrangement and exercising of soft power might work well in favour of India. People of Pakistan have begun to see through the designs of their army but they are helpless. Prime Minister Narendra Modi’s appeal to the Pakistani people to question their institutions of state regarding the war on poverty, illiteracy, ill-health and injustice goes well in sync with the ideological hegemony that India possesses over the adversarial state.
Geopolitical tilt:
Henry Kissinger’s words resonate in today’s era of geopolitics – “There are no permanent friends or foes in international politics, only interests.” Russia’s handing of olive branch to Pakistan is a signal for India. With the building up of anticipated Russia-China-Pakistan axis, Pakistan’s China card gets strengthened by default.
Being a sovereign, democratic and responsible nation, India cannot afford to seek an umbrella from another superpower, rather it should increase its punch and weight proportionately, both in diplomatic and military terms. Kautilya’s “Shadguna Sidhhanta – Six forms of diplomacy” might provide some insights to the Indian establishment for knitting a strong system of alliances.
Conclusion –
Bhagwad Gita says, “If you can bring pleasure and pain, loss and profit, victory and defeat at the same pedestal, i.e. there is nothing selfish for you in such an action, then all your actions in the battlefield become sinless.”

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Tracking India-Israel partnership

Israel’s President Reuven Rivlin started his first state visit to India. This visit will provide crucial push to our efforts to build new pillars in our partnership. It will also carry forward the momentum generated by the first ever visit of President of India to Israel last year. Next year, both countries will be celebrating 25 years of the establishment of full diplomatic relations.
India officially recognized the State of Israel on 17th September, 1950. The then Prime Minister of India, Shri Jawahar Lal Nehru remarked, “we would have [recognized Israel] long ago, because Israel is a fact. We refrained because of our desire not to offend the sentiments of our friends in the Arab countries.
India and Israel established full diplomatic relations in 1992 after the hesitations of the past were abandoned to pursue a deeper engagement. Since then, the relationship has grown tremendously and expanded the horizons from political, defence and economic engagements to tourism, science and technology, agriculture and cultural paradigms.
Cultural Linkages –
As fellow democracies, our people are our biggest strength and the biggest beneficiaries of a strong India-Israel partnership. The 2000-year old Jewish community in India represents a thriving link to this past. Today, it is a vital part of our composite cultural mosaic that continues to thrive in their traditions. India is the only country in the world where there has been no case of anti-Semitism (racial attack on Jewish community) ever.
Areas of Cooperation-
Our engagement is multi-dimensional and wide-ranging. We are partnering in:
• Enhancing agricultural productivity and efficiency;
• Boosting research and innovation linkages;
• Employing applications of science and technology for the benefit of our societies;
• Forging strong trade links and investment ties;
• Building defence ties to secure our people; and
• Enhancing people to people ties through greater cultural and tourism linkages.
• Promoting educational exchanges. The growing number of Indian students, going to study in Israel and vice versa can be an important bridge in our bilateral partnership.
Defence and strategic cooperation-
India is the largest customer of Israeli military equipment and Israel is the second-largest military partner of India after Russia. As of 2009, the military business between the two nations is worth around US$9 billion. Military and strategic ties between the two nations extend to joint military training and space technology. India is Israel’s largest defence market, accounting for almost fifty percent of Israeli sales.
Economic cooperation-
India is also the second-largest Asian economic partner of Israel. In 2010, bilateral trade, excluding military sales, stood at US $4.7 billion. In August 2012, India and Israel signed a $50 million academic research agreement. Currently, the two nations are negotiating an extensive bilateral free trade pact, focusing on areas such as information technology, biotechnology and agriculture.
Ongoing visit –
President Reuven Rivlin and Prime Minister Narendra Modi agreed to intensify counter-efforts to deal with “constant” security threats posed by terrorism. Israel recognize that terrorism is a global challenge which has no boundaries having extensive links with other forms of organised crimes.

Debate: 'No-first use' nuclear doctrine

India’s ‘No first use’ nuclear doctrine was recently questioned by the Defence Minister when he said that India should state that “it is a responsible nuclear power and would not use it irresponsibly, instead of declaring an NFU doctrine”. Such statement from the Defence Minister on the eve of India-Japan Civil Nuclear Deal drew sharp criticisms from all political parties.
What is ‘no first use’ nuclear doctrine?
No first use (NFU) policy is more of a pledge by a nuclear power that it would not use nuclear weapons as a means of warfare until or unless attacked by the enemy power through nuclear weapons. Earlier, the concept had also been applied to chemical and biological warfare.
When did India adopt the ‘No First Use’ policy?
In August 1999 (post- Pokhran II tests), India released a draft of the NFU doctrine which proclaims that nuclear weapons are solely for deterrence and that India will pursue a policy of “retaliation only”. The document also assures that India “will not be the first to initiate a nuclear first strike, but will respond with punitive retaliation should deterrence fail” and that decisions to authorise the use of nuclear weapons would be made by the Prime Minister or his ‘designated successor(s)’.
Arguments in favour of retaining the NFU doctrine-
• India has always promoted herself as a responsible nuclear weapon state. Hence, a first strike policy would severely damage India’s reputation as a responsible nuclear weapon state.
• It enables India to keep the nuclear threshold high with the antagonistic neighbours adopting an irresponsible nuclear stand.
• A withdrawal of NFU doctrine might also push Pakistan’s nuclear warheads into irresponsible hands which may turn the ‘rogue’ state into a nuclear terrorism exporter.
• China, the anticipated rival in the region also adopts a ‘no-first use’ policy. Hence, withdrawing NFU in India might give it a chance to revisit its stance too.
• If China aborts its NFU stance, then it would become a threat for the global powers such as the United States and the Russian Federation. Thus, a global nuclear arms race would restart again.
• A strategic rethink towards the NFU doctrine might jeopardise India’s ballistic missile defence programmes due to the global limelight India might attract because of an offensive stance.
• Nuclear weapons are merely deterrent in nature. The impact of a nuclear strike is unimaginable. Therefore, even a slight push towards hostility could push us to the brink of another nuclear war.
Alternatives available-
• Doctrine of ‘Cold Start’ is one such solution. It is a military doctrine developed by the Indian Armed Forces for use in a possible war with Pakistan. It involves the various branches of India’s military conducting offensive operations as part of unified battle groups. The Cold Start doctrine is intended to allow India’s conventional forces to perform holding attacks in order to prevent a nuclear retaliation from Pakistan in case of a conflict.
• Instead of focusing on adopting a first strike policy, India must work towards strengthening its counter strike and second strike capability.
India has always projected herself as the firm supporter of nuclear disarmament. It has been the only state to call for a Nuclear Weapons Convention that would ban and eliminate nuclear weapons. However, it is India’s no-first use stance that enables New Delhi to vouch for a nuclear weapons free world.
Mature nations always pursue a NFU policy. In the present strategic context, there is no necessity for India to change its existing nuclear doctrine. Therefore, instead of making offensive overtures towards the neighbours, India should pursue more confidence building measures through diplomatic channels to minimise the threats emanating from our immediate neighbourhood.