Indian Ocean Rim Association

Recently Jakarta (Indonesia) hosted the first summit of Indian Ocean Rim Association  (IORA)IORA was previously known as Indian Ocean Rim Association for Regional Cooperation (IOR-ARC) which was started in 1997 in Mauritius. 2017 marks the 20th year of formation of this organisation. Up till now IORA was focused more on economic integration and economic collaboration but the changing global scenario has shifted its focus towards security areas too. Currently, IORA has 21 members with members ranging from Africa to South East Asia.

Indian Ocean Rim Association  | Areas of Cooperation

It should be noted that the six areas where the member countries have been focusing today are trade and investment, maritime safety and security, management of fisheries, Science and Technology, disaster management and tourism.

Indian Ocean Rim Association  | Significance for India

India 80% of energy imports happen through the Indian Ocean and approximately 40% of the global trade traverse through it too. Therefore, security of it is of paramount importance. Up till now, the Indian Ocean Region is peaceful and there is no exchange of rivalry as compared to the other geopolitical arenas, with trade, transit and sea lanes being clear for navigation purpose.

But we shall not take this situation for granted, especially after the experience in adjacent South China Sea region. Hence, the security apparatus becomes a significant concern.

Indian Ocean Rim Association  | Focus on Security Issues

  • Ideally,IORA members must focus more on security issues in Indian Ocean Region because of the free navigation concerns simultaneously ensuring that there is no entry of foreign Navy in a manner to disturb the peace and tranquillity of the region; otherwise it would be tantamount to opening the region for competition which will eventually raise the cost for all the countries.
  • Interestingly, the international cooperation for anti-piracy activities has been one of the fine success stories. The issues of piracy arising out of Somalia and Gulf of Aden have now been contained.
  • There have been multipleaccords signed to cooperate against terrorism which necessitates the sharing of intelligence information between members. It should be noted that Pakistan is not the member of IORA but it has been indirectly influencing the security in Indian Ocean region because of Arabian Sea and the Gwadar Port. These two mouths to the Indian Ocean region should be watched closely by the member countries. We can also expect more Chinese presence in Gwadar port which would further jeopardise the security interests of the member nations of IORA.

Indian Ocean Rim Association  | Chinese presence in Indian Ocean

  • China has an ambition of developing a Blue Water Navy under which they already possess an Aircraft carrier. Chinese are having their presence in Pacific and Indian Oceans. The members of IORA wish for the peaceful rise of China which means that it should not become assertive and hinder the security prospects of the region.
  • China’s ambitious Maritime Silk route project is the project through which it wants to dominate the sea and trade routes passing through the strategic areas of their interest. In Sri Lanka for Hambantota port China gave $1billion as loan despite non generation of adequate revenue. Helplessly, the Sri Lankan government had to give the port to China on lease. It is the Chinese way of colonising small nations by first investing in projects abroad and then usurping the control over those strategic projects in case of non-repayment of debts
  • It is important that India should utilise the forum of IORA to enlighten the member countries who have embraced maritime silk route to understand the demonic policies of China. China does not adhere to the United Nations Convention on the Law of the Sea (UNCLOS) rulings and rejects any global intervention in its strategic interests.
  • When India has been accepted as the net security provider in the Indian Ocean Region, we should try to project and enforce that role. Countries like Indonesia have many difficulties with China on issues like Nine Dash Line and India should take a decisive stand on the freedom of navigation and international laws of the sea.

Indian Ocean Rim Association  | Conclusion

All member countries of IORA must work together and come up with definite rules and regulations in the shape of code of conduct so that it becomes difficult for foreign powers to violate those rules. A lone effort may not materialise as this requires a collective effort, enhanced coordination among the member countries and if there are any security concerns in Indian Ocean region it should be addressed effectively and collectively.

Indus Water Treaty | New Updates

Indus Waters Commissioners from India and Pakistan are likely to meet later this month for their routine annual meeting. The meeting had been postponed after India had declared that blood and water cannot flow together after the Uri attacks in September. The Indus Waters Treaty was signed in 1960 as a river sharing agreement between India and Pakistan and has worked quite smoothly between the two otherwise hostile neighbours since the last 57 years. Under the agreement, the control of the three eastern rivers, the Beas, the Ravi and the Sutlej was given to India, whereas the control over the western rivers, the Indus, the Chenab and the Jhelum was given to Pakistan. The World Bank is the designated facilitator for the agreement. The Indus Treaty does not permit India to build storage dams on the western rivers i.e. the rivers meant for Pakistan but allows limited use of the waters for power generation through runaway river schemes. Pakistan has objected to the Baglihar run-of-the-river project as well as two other similar projects i.e. Kishanganga Hydroelectric Plant on the Kishanganga/Neelum river (a tributary of the Jhelum river) and the Ratle Hydroelectric Plant project on the Chenab river. Pakistan is seeking the help of World Bank for arbitration saying that these projects are not justified under the treaty. The Indus Waters Commission is mandated to meet annually or whenever either country demands it. If it is not met before March 31st this year, it could jeopardise the future of the treaty. Let us see why India has stepped back from its rhetoric on the Indus Waters Treaty and to discuss the cross-border sharing of waters between India and Pakistan.

 Is it pragmatic on part of India to step back from the tough stance on the Indus Waters Treaty?

The temperatures were high in India after the Uri attack and a view was presented before the Government of India that we cannot allow the existing treaty mechanisms to go on while everything else around it has changed.

India had followed a twin approach on the Indus Waters Treaty after the Uri attack – Firstly, the Prime Minister of India has never said that the Indus Waters Treaty is in jeopardy. He repeatedly said that we will use all the waters assigned to us under the treaty and for this purpose an inter-ministerial task force was set up under the chairmanship of Principal Secretary to the Prime Minister, Shri Nripendra Misra. Secondly, the meeting which was held after eight days of the Uri attacks, ‘sources’ told the media that ‘blood and water cannot flow together’ and that the commission can meet only in an atmosphere free from terror.

Should such issues be kept out of politics?

India never had the intention to jeopardise the Indus Waters Treaty but it was necessary to signal Pakistan about a pawn in the game that India could play in case the troubles emanating from Pakistan are not exterminated. Moreover, the treaties do not get jeopardise in practice if the meetings are not held in time. The temporary postponement of the Indus Waters Commission meeting could also have been an attempt to deny Pakistan a bilateral grievance redressal mechanism.

Did the pressure on Pakistan work?

Primarily, the intended objective was to manage the domestic public opinion after the terrorist attack. The unease among the Pakistani media over the uncalculated consequences of the suspension of Indus Waters Treaty is certainly visible.

As a result, Pakistan wants to include Indus Waters Treaty negotiations under the composite dialogues. It has called the Indus Waters Commission under the Indus Waters Treaty as an ‘inefficient forum’ for resolving water issues.

 Impact on Pakistan if India implements the Indus Waters Treaty in letter and spirit

India is allowed to use 3.6 million acre-feet of the water of the western rivers (for non-consumptive purposes) which are otherwise under the control of Pakistan as per the treaty. Despite such an arrangement, India uses only about 4% of the assigned water from the western rivers.

Although the real issue in Pakistan is the mismanagement of waters from their share of the western rivers, Pakistan would be in serious trouble if India starts utilising its allotted space as per the treaty conditions. The structure of agriculture in Pakistan is such that it needs a continuous flow of water from Chenab and Jhelum for the irrigation purposes during ‘Kharif’ season. It should be noted that the Chenab, Kabul and Jhelum rivers are called the ‘early risers’ in Pakistan as they start getting water in the month of March itself which is the time of sowing of ‘Kharif’ crops such as sugarcane and cotton in Pakistan. If the waters from Chenab and Jhelum are stalled and Afghanistan also stores about 4.7 million acre-feet of waters from the Kabul river as per the Kabul river basin agreement, it will seriously impact the Kharif sowing season in Pakistan.

Why has the Indus Waters Treaty come under so much strain?

There are a number of reasons for this issue such as inefficient water management by Pakistan, climate change variables like melting of glaciers and alleged upstream consumptive use by India. Pakistan has nothing substantial to blame about the Indus Waters Treaty provisions as it already favours it substantially even to the extent of disfavouring India’s interests. But the treaty has become a domestic political football for Pakistan whereby it showers the blame of its water woes on India and not on its inefficiency in management of river waters. The political elite and strategic thinkers in Pakistan are aware that the treaty provisions favour the interests of the lower riparian interests i.e. the interests of Pakistan, in general.

Pakistan’s population in 1951 was 31 million and currently, it stands at about 94 million. By 2020, it is expected to touch a whopping number of 220 million. Therefore, to feed this exorbitant increase of population, Pakistan would require almost another two-thirds of another Indus river. The inefficiency of storage facilities in Pakistan is forcing the entire waters from Chenab to flow into the sea i.e. the wastage of about 30 million acre-feet of waters. It also has the most inefficient agriculture in the world and compounded with the rising water woes, it is playing the political football by blaming all its inefficiencies on India to save their face domestically.

Would it benefit India is the Indus Waters Treaty is renegotiated?

The current Indus Waters Treaty was premised on political considerations. The political consideration was shaped in the form of an assurance that India will not dry out Pakistan in the future. It was hoped that the waters of the Indus would bridge the gaps of hostility prevailing in the minds of Pakistani leadership towards India. Unfortunately, it never happened. The treaty is highly unpopular in the Indian state of Jammu and Kashmir because it is devoid of its river waters itself to favour the interests of Pakistan. Therefore, if the treaty is renegotiated, India’s claim will only increase and it is in India’s interest to push for renegotiation. Similarly, it is in Pakistan’s interest to adhere scrupulously to the current treaty provisions, but the voices for renegotiation are rising in Pakistan which is almost like music to the ears of Indian Government.

In the case of renegotiation, India should put up this fact on the table that Pakistan is an irresponsible state which allows more than 30 million acre-feet of water to get wasted into the sea and if Pakistan cannot make productive use of it, the waters of the Chenab should be placed under India’s control.

Conclusion

There is no explicit ‘exit clause’ to the treaty and it is doubtful that anyone would opt for it because, in the end, all water related issues are sensitive. India has already seen the examples of it during the inter-provincial water disputes. Quite pragmatically, the present Indian Government is allowing the dispute resolution mechanisms under the treaty provisions to function effectively, which would work in India’s favour. Indus Waters Treaty provides a cooperative mechanism and that spirit is important because, in the absence of it, there would be huge difficulties to proceed further on such a sensitive issue like that of international bilateral negotiation for river-water sharing.

India ASEAN – A 25 Year long Journey

In 2017, India ASEAN would observe 25 years of their dialogue partnership, 15 years of Summit Level Interaction and 5 years of strategic partnership.

India ASEAN | Background

  • As an important regional power, India had contacts with most of the South-East Asian countries from the earliest periods of history.
  • The earliest attempts at building an Asian unity was first made in 1947 during the Asian Relations Conference which was held in New Delhi in 1947.
  • One of the main objectives, as highlighted by Pt. Jawaharlal Nehru was to discuss various problems which are of common concern to all the Asian countries.
  • The ASEAN was established in 1967 with the objective of promoting intergovernmental cooperation and facilitating economic integration among its members. India had good bilateral relations with most of the ASEAN countries. It supported the Indonesian struggle for independence in the 1950s and also signed friendship treaties with Indonesia, Myanmar and the Philippines.

India ASEAN | The Journey

  • Both India and ASEAN are influential actors in Asia and as such, both of them share similar political and security interests. India became a sect oral dialogue partner of ASEAN in 1992 and was upgraded to full dialogue partner in 1996.
  • In 2012, ASEAN-India celebrated the 10th anniversary of Summit-level partnership with a Commemorative Summit in New Delhi under the theme “ASEAN-India Partnership for Peace and Shared Prosperity”. The summit endorsed elevating the partnership to a “Strategic Partnership”.
  • The ASEAN-India Plan of Action 2010-15 envisaged cooperation in a range of sectors in politics, economic, socio-culture sphere for deepening and intensifying ASEAN-India cooperation.

India ASEAN | India’s Act East Policy

  • The Narendra Modi government has emphasized on the Act East Policy (following on from the Look East Policy which was introduced in the 1990s) which is more pragmatic and proactive and seeks to highlight the importance of continuous engagement with the countries of the Asia-Pacific by addressing key strategic, economic and cultural opportunities.
  • As ASEAN looks to mark 50 years of its existence as a grouping, India is looking to commemorate 25 years of dialogue partnership with the bloc this year. Within the parameters of interests and actions of regional and great powers and security perceptions and interests within ASEAN, India and ASEAN need to shape the larger architecture of the regional environment.

India ASEAN | Security cooperation

  • In the new regional security configuration, there is the necessity to develop a common approach to regional security which would foster regionalism beyond the sub-ASEAN focus to include the broader region of the Asia-Pacific.
  • In the regional security architecture, the prospects of ASEAN-India collaboration to tackle threats like poverty, transnational health threats, environmental degradation, natural disasters and transnational crimes like terrorism, illicit drug trafficking, people trafficking, money laundering, arms smuggling, sea piracy, international economic crime and cybercrimes cannot be downplayed.
  • Security-oriented ocean governance architecture is also all the more necessary as the region has issues of piracy, terrorism, drug and human trafficking, territorial claims and overlapping disputes as well as issues of resource management and environmental degradation.

India ASEAN | Economic ties

  • Establishing better connectivity will help in increasing trade ties and business potential between India and the ASEAN countries. Today, India and ASEAN share deep economic ties. ASEAN is India’s 4th largest trading partner, accounting for 10.2% of India’s total trade. For a more robust economic engagement, complementarities must be realised between the two regions.
  • The role of the Regional Comprehensive Economic Cooperation (RCEP) in further strengthening cooperation and economic integration in the region can be highlighted as also the ASEAN-India Free Trade Area (FTA) which provides a great opportunity to expand trade and economic ties.
  • They can exploit opportunities in emerging marine industries like marine biotechnology, minerals, marine ICT, development of new drugs, cosmetics etc. Development of joint projects on ocean tourism presents huge potential for jobs and economic growth.

India ASEAN | Way forward

  • For the deepening of India ASEAN relations, there needs to be an arrangement of programmes and mechanisms to promote cross-cultural dialogue and people-to-people contacts.
  • More attention towards educational and cultural exchanges, development of science and technology, innovation and entrepreneurship would take the relationship to a qualitatively different level.
  • Given the fact that both are major players in the regional and global economy and are important contributors to the future development of Asian regionalism, cooperation would help in the creation of a more stable, peaceful and prosperous Asia. This requires seizing key opportunities with vision and dexterity.

India ASEAN | Conclusion

ASEAN, unlike the EU, is politically diverse. Its members range from one-party communist-ruled Vietnam to quasi-military ruled Myanmar, the increasingly Islamist-leaning kingdom of Brunei and the raucously democratic The Philippines. To be successful, the community also requires a tremendous amount of political backing from both internal and external sources. India is exploring collective as well as bilateral engagements with the ASEAN members which is a sign of pragmatic and proactive approach towards diplomacy.

Arun-3 HEP | PIB Summary

The Cabinet Committee on Economic Affairs chaired by the Prime Minister Shri Narendra Modi has approved:

  1. Investment for generation component of Arun-3 HEP (900 MW) for an estimated cost of Rs. 5723.72 crore at May 2015 Price Level.
  2. Completion period of the project shall be 60 months from the date of financial closure which is planned for September this year.
  3. Ex-post facto approval for the existing implementing agency, already incorporated in the name of SJVN Arun-3 Power Development Company (P) Limited (SAPDC) registered in Nepal as a 100% subsidiary of SJVN Limited for implementing the project.
  4. Any component of work already or being made by the Nepalese authorities shall be so certified by Central Electricity Authority (CEA) and shall be accordingly deducted from the project cost requirements.

About the Arun-3 Hydro Project

The project is located on Arun River in Sankhuwasabha District of Eastern Nepal. The Run-of-River scheme envisages about 70 mtr. high concrete gravity dam and Head Race Tunnel (HRT) of 11.74 Km. with underground Power House containing four generating units of 225 MW each on Left Bank.

Arun-3 Hydro Project | Background

  • SJVN (Satluj Jal Vidyut Nigam) Limited bagged the project through International Competitive Bidding.
  • An MoU was signed between Government of Nepal and SJVN Limited for the project in March, 2008 for execution on Build Own Operate and Transfer (BOOT) basis for a period of 30 years including five years of construction period.
  • The Project Development Agreement (PDA) signed on 25.11.2014, which provides 21.9% free power to Nepal for the entire concession period of 25 years.
  • Employment generation of around 3000 persons is envisaged in construction of the project from both India and Nepal.

Arun-3 Hydro Project | Significance

The project will provide surplus power to India strengthening power availability in the country and will also strengthening economic linkages with Nepal. The power from the project shall be exported from Dhalkebar in Nepal to Muzaffarpur in India.

Moscow Talks | AIR Spotlight

Moscow Talks were aimed at detailed consultations on Afghan issues in a six-party format involving Russia, Afghanistan, Pakistan, China, Iran and India at the level of special envoys on Afghanistan and senior officials. It was a renewed attempt at finding a peaceful end to the lingering unrest in conflict-ridden Afghanistan.

Moscow Talks | Response from Afghanistan

The Afghan Ministry of Foreign Affairs (MoFA) has said that the consultative meeting in Moscow is a positive step in promoting regional cooperation and solidarity in the war against terrorism, however, the meeting is not an alternative for peace talks between government and Taliban.

Moscow Talks | Re-entry of Russia in Afghan scene

  • Although it is believed that the meeting will not be able to bring Taliban to the negotiating table, the involvement of Russia in the Afghanistan’s affairs is an important step in this regard. The Russian initiative is significant due to the return of Moscow to the region as an active player, but had led to apprehensions in Kabul and New Delhi that it was trying hard to bring in Taliban into the mainstream so as to combat its perceived real threat of the so-called ISIS.
  • Moscow has hosted at least two meetings on Afghanistan in less than two months in a bid to bring the much-awaited Afghan peace negotiation process between the government and the Taliban group back on track.
  • Some of the political commentators believe that Russia’s interests in Afghanistan’s political situation and the thaw in ties between Russians and the Taliban would further complicate the war in Afghanistan.

Moscow Talks | India’s concerns

  • The exclusion of Afghanistan and India were objected by the two countries from the previous round of talks raising concerns among officials in Kabul regarding Russia’s intentions.
  • At the Moscow talks, the Russians made it clear that they consider the government of Afghanistan as the legitimate representative of the Afghan people, and not the Taliban.
  • The Russians added that they maintained contacts with the Taliban only due to their concerns and with intention to support Afghan government in potential peace talks.
  • Afghanistan and India were previously concerned about unsubstantiated media reports that Russia was reaching out to the Taliban, and even holding secret talks with the outfit.
  • Reports suggest that the issue of exclusion was raised by Foreign Secretary S. Jaishankar during his talks with the Russian delegation at the Heart of Asia conference in Amritsar in early December last year.
  • Further, NSA KC Ajit Doval’s meeting with Russian Security Council secretary on 31st January 2017 paved the way for India’s inclusion. The Indian side was represented by MEA Joint Secretary (PIA Division) Shri Gopal Bagley (the new spokesperson of MEA).

Moscow Talks | Analysis

  • China and Pakistan were present at the previous round of talk in Moscow in December 2016, while India, Iran and Afghanistan’s representatives’ have been invited for the first time in this round of talk.
  • India is concerned and has been observing Russia-led efforts for talks with Taliban, with officials apprehensive about the normalisation of the terror groups which continues to have strings attached to Pakistan military establishment.
  • The argument that Taliban was fighting with ISIS in pockets of Afghanistan did not find many takers in New Delhi, as Indian officials believe that most of the IS fighters are mainly repurposed Taliban members.

Moscow Talks | India’s stance on Afghanistan peace issue

  • India had pointedly pronounced during the discussions that Afghanistan should have the right to choose with whom to hold talks and that the choice should not be dictated by other countries.
  • India on its part noted that “it was essential to end all forms of terrorism and extremism that beset Afghanistan and our region and to ensure denial of territory or any other support, safe havens or sanctuaries to any terrorist group or individual in countries of our region.”

Moscow Talks | Conclusion

Much to the relief of Afghanistan and India, all six countries agreed that the ‘red lines’ for engagement with the Taliban – which include giving up violence, abiding by Afghan constitution and cutting ties with al Qaida – have to be met. All the participants agreed to strengthen efforts to promote the intra-Afghan reconciliation, while maintaining the leading role of the current government of Afghanistan. Participants have also agreed in favour of broadening this format, primarily by adding the countries of Central Asia to it. A sustainable peace solution requires a political solution, free from the use of violence and conflict. Afghanistan has the legitimate right to choose the manner in which it wishes to draw out the action plan for a peaceful transition of its society from the current violent streams.

India UAE Relations

India UAE relations took a major boost with the recent visit of the crown prince of United Arab Emirates Mohammed bin Zayed Al-Nahyan as the chief guest on India’s Republic Day.

India UAE | Indian Diaspora 

According to the latest figures the remittances which the Indian Diaspora in UAE send back to India is around $13.6 billion which helps India to tackle its Current Account Deficit. Indian Diaspora is the important representatives of India and they act as a strong and binding factor between the two countries (India UAE). There are about 2.6 million Indian Diaspora in UAE which accounts for 12% of the total Diaspora. They are making huge contribution towards economic prosperity, stability and success of UAE.

India UAE Bilateral Relations

  • UAE is a very important area and strategically very significant. The rapid exchange of visits, conversations and dialogue between the top leaders of India UAE is a welcome development.
  • Through this building of relationship, the Bilateral relationship is now upgraded to Comprehensive Strategic Partnership and even few defence MOUs were signed during this visit. Maritime cooperation was mentioned as one of the potential areas of cooperation between India UAE.
  • UAE has been identified by India as a key partner in the very volatile region and an important region because of India’s energy imports and large segment of India’s Diaspora lives there. So India is trying to expand and enhance its partnership and defence ties.
  • UAE’s state owned ADNOC company has agreed to store crude oil in India’s maiden strategic storage and will give 2/3rd of its oil for free to India.
  • India is a large country, large economy and a large market. With the international economy going down over the last few years all these countries are looking for big markets and also big destination for their energy exports and India is an excellent candidate in this regard.
  • Security has not been a significant aspect of our relationship so far with countries in the West Asian region. The countries in have also started feeling anxious because of the rise and expansion of Islamic State. Therefore, India is developing security and defence ties with UAE.
  • Both countries held bilateral exercises between Indian Air Force (IAF) and United Arab Emirates Air Force (UAE AF) called Desert Eagle II.
  • During the Republic day parade an armed forces contingent of around 200 soldiers from the UAE took part in the parade. This is a new trend which started last year when the French President was here. This is display of India’s generosity of welcoming our chief guest and is part of India’s soft power. They act as a bonding between the services of the two countries and send a positive message to people. They are an important element in strengthening and expanding our partnership with these countries.
  • There is huge sovereign wealth fund in UAE of more than $800 billion. India needs $1.5 trillion of investment over the next 5 years to improve our infrastructure. We could tap this potential through the already signed Memorandum of Understanding (MoU) between India and the United Arab Emirates (UAE) to mobilise up to $75 billion long-term investment in the National Investment and Infrastructure Fund (NIIF). But there seems to be little progress on it due to technical issues about the NIIF.

Pakistan and the n region

  • Historically UAE was regarded as an ally of Pakistan, now UAE is making overtures and gestures indicating its willingness to leave that traditional spot and develop closer ties with India.
  • For UAE terrorism is a challenge that they need to confront with and for that they find India to be an effective partner.

Conclusion

India should not weigh its relationship with West Asia only in terms of their stance on Pakistan and Kashmir. When it comes to Kashmir issue we find that India usually does not get the support it would be looking at from West Asian nations because of the Islamic bondage they have with Pakistan. It is difficult to change the view point at the multilateral level in the organisations like Organisation of Islamic Cooperation (OIC). On a bilateral level we can expect a greater support for the Indian position on Kashmir issue. This growing relationship with West Asia may reap huge dividends for India in both geo-economic and geostrategic terms.

India US Strategic partnership

India US Strategic partnership has taken a fresh turn after the declaration of the “Defence Appropriations Bill . As part of a defence appropriations bill of over $600 billion, the US Congress passed legislation that designated India as a “major defence partner”. Under its provisions, India will be treated at par with the US’s closest allies when it comes to the transfer of defence technologies.

India US | Background

India US defence cooperation started in 1995 with the Agreed Minute on Defence Relations. The process of defence cooperation may well have proceeded apace following this agreement. However, after May 1998 following the Indian nuclear tests, all such collaboration effectively ground to a halt. It required multiple round of talks to place the incipient security relationship back on track.

India US |  Why the defence relationship didn’t succeed earlier?

India US relations were not able to see proper light as :

  • India had remained heavily dependent on Russia for its defence supplies.
  • India had a general antipathy towards the United States, especially in the top echelons of the Government in the initial days’ post-disintegration of the Soviet Union.

India US | Improvement in the strategic relationship

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  • Post-disintegration of the Soviet Union in 1991, India got the opportunity to reach out to the west and expand our relations with the west.
  • In 2000, President Clinton visited India and after that we started negotiating the India-US Nuclear deal in 2006-07.
  • President Barack Obama visited in 2010 and described US-India relationship as the defining partnership of the 21st century.
  • In the US there is a bipartisan consensus on having good, positive, strong and diversified relations with India.
  • Defence is one of the very significant and important elements of the bilateral partnership over the last several years.

India US | The Trump relations

  • Prime Minister Narendra Modi has said that he looks forward to having close ties with US and to work with the Trump administration.
  • During the election campaign itself, Mr Trump spoke many positive things about India and in his election rhetoric he said “Ab ki baar Trump sarkar”. In this context India can be hopeful and confident that the relations are going to improve.
  • There are fears in the field of H1B visas. But it is possible that American business will be able to impress upon him that the future, the competitiveness of the US industry depends upon the presence of the software professionals from India.
  • The areas of concern for India are his policies towards Pakistan, China and Russia and Obama’s Pivot to Asia.
  • There is around 3 million of Indian Diaspora in the United States which is playing a very significant role because they are highly educated, prosperous and several of them occupied top positions during Trump’s campaign. They have generated jobs for Americans and participated very actively in sliding the American economy upwards. Indian investments in the US have shot up recently too.

India US | Defence Relations

  • In 2005 India-US framework agreement on civil nuclear cooperation was signed. This was renewed in 2015.
  • Recently India was designated as “a major defence partner”. This is a designation that the US provides to its NATO members, to its allies like Japan, Australia, New Zealand and South Korea. India will also be stepping into these ranges of countries.
  • There are large numbers of initiatives on defence cooperation and one of them is Defence Technology and Trade Initiative (DTTI)..
  • Today US has become the second largest supplier of defence equipment to India with orders more than $15 billion. A relationship that started from zero in 2005 has come very far in this respect.  
  • We are effectively cooperating in the Malabar Exercise (Naval exercise). There is an immense scope of making it trilateral by bringing in India-US-Japan or India-US-Australia. India has more exercises with US than with any other country. There are so many indicators to prove that our relationship in defence and also in other areas like science, knowledge, culture is in bright spot for both the countries.
  • There are talks about Counter terrorism where we see prospects of greater relations.
  • India can be an active partner in the United States led Pivot to Asia which is aimed at containing the hegemonic position of China. 

 

Post Brexit India and UK Relations

Before we look into Post Brexit relations between India and United Kingdom we need to look at the background of the relations between these two countries. India and the United Kingdom have been close allies for a long time. The bilateral relationship between the two countries were upgraded to a strategic partnership in 2004, and were further strengthened by former PM David Cameroon’s visit to India in 2010 and 2013.

PM Modi’s visit to the UK in November 2015 took the relationship to new heights. The situation has changed since June 2016 when nearly 52% of the population of the UK decided to leave the European Union, reversing the decision taken in 1975 to join the common market.

Post Brexit | Trade relations

Post Brexit UK and India trade relations are fantastic

The UK continues to be among India’s major trading partners.

  • Trade relations between the two countries continue to flourish and more recently so with the visit of the PM Theresa May in November this year. Bilateral trade between India and the UK was $ 14 billion in FY16, which was slightly lower than the previous year’s total trade of $14.33 billion.
  • During FY16, the UK ranked 12th in the list of India’s top 25 trading partners moving up six places from 18th in 2014-15.
  • Despite the global economic slowdown and the Eurozone crisis, India-UK bilateral trade has been resilient. In fact, the UK’s share in India’s global trade has gone up from 1.89% in FY15 to 2.18% in FY16.
  • On the same lines, the EU is also India’s largest trading partner with 13% share in 2015. India was EU’s ninth largest trading partner in 2015 with 2.2% share.
  • UK continues to be the third largest investor in India after Mauritius and Singapore with a cumulative FDI investment of $23.10 billion between April 2000 to March 2016.
  • UK also ranks first among the G20 countries and accounts for around 8% of all FDI into India for the period April 2000 to March 2016. Its two-way traffic as India is also one of the largest source markets for FDI projects in the UK.
  • India received $24.91 billion in FDI equity inflows from EU between April 2012 and May 2015. Thus, the EU along with the UK both remain important to India.

Post Brexit | Why UK matters?

  • UK’s membership of the EU has often been cited as an important reason for companies investing in the UK, the UK being their ‘Gateway to Europe,’ giving investing companies – especially Indian, Japanese and Chinese companies -access to the common market.
  • While other EU members have equal access to the common market, investors see the UK as their preferred investment destination vis-à-vis other jurisdictions in the EU because of its resurging economy, a robust legal system, the English language, ease of doing business, and liquid capital and equity markets.

Post Brexit | Impact

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  • The impact on Indian FDI to the UK could potentially be over two time periods: the short-medium term and the long term. The short-medium term covers the interim period before the referendum and it saw FDI decrease temporarily, the deterrents being the potential financial instability and a legal regime overhaul. 
  • An EY survey of 406 investors (31% of those surveyed) suggested that they would “reduce or freeze” potential investment until 2017. 2017 is a conservative estimate, since investors will be wary of investing in the transitory period after the referendum as well, waiting till the market shows confidence in the new investment regime.
  • As the UK has voted to leave the EU, FDI may fall in the long-term as well. As a member of the EU, the UK benefits from tariff-free trade in goods and services to the 28 member states, which it will lose if it leaves the EU, making other EU countries – like Germany – possible alternatives.
  • The European political landscape with Greece’s recent default and referendum on being part of the Eurozone, has landed the EU in murky waters. This is likely to make European markets unpredictable, a trend evident since the onset of the Greek crisis. The effect of this has been felt even in Germany, the most financially resilient EU member, with business confidence falling for the second consecutive month, and business expectations dropping for the third consecutive month.
  • With the Brexit further pushing Eurozone crisis, Euro would fall further.  The Indian Rupee has pared back losses against the Euro in the last year moving from 81.56 to 69.99. Indian investors looking to repatriate profits to India will worry that the Euro depreciation can cut into profits.

Post Brexit | Benefits to India?

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  • From a trade perspective, the UK may benefit from its freedom to negotiate FTAs or other trade agreements with non-EU nations on its own terms. The EU regulates trade with non-EU members on a pan-EU basis. This prevents the UK from negotiating trade agreements with other nations.
  • With the UK looking to attract FDI from emerging markets, Brexit would allow the UK to negotiate bilateral trade agreements in lieu of that objective, without stringent EU regulation. Indian investors will benefit from lower regulation (hence cost) and more access than they currently have.

Post Brexit | Conclusion

It is difficult to predict the outcome of Brexit on Indian FDI because of other competing factors like the unstable European markets, a tumbling Euro and possible disintegration of the Eurozone, all tugging in different directions.

Political drive and willingness on both sides to keep the relationship strong and reach further heights would certainly outweigh the uncertainties arising from Brexit. There is immense potential for enhancing not only trade and investment between the countries but several opportunities in other areas of cooperation as well.

 

Indo – Russian Relations

Indo – Russian Relations were upgraded from “strategic partnership” to “special and privileged strategic partnership” in 2010. Five years after this upgradation and two and a half years after the assumption of power by Prime Minister Modi, it would be appropriate to enquire whether the inherent potential of the bilateral partnership has been realized.

Indo – Russian Relations | Historical Context

Strong relations with Russia are a key pillar of India’s foreign policy. Russia is a longstanding, time-tested, partner. Be it in the field of equipping our defence forces or industrialisation of the country or strategic support in the UN Security Council, Russia has always come to India’s help. Relations between India and Russia have been based on defence acquisition, hydrocarbons, nuclear energy, space cooperation, trade and commerce, science and technology, culture and people to people ties.

Indo – Russian Relations | Trade

Bilateral trade has continued to perform far below potential. It is essential for private business in the two countries as well as governments and financial institutions to identify commodities that enjoy good potential. Bilateral trade needs to be brought to a decent level of USD 30 billion by 2025 as against the current level of below 10 billion.

Indo – Russian Relations | Current Problems

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Some major issues of dissonance have appeared between the two countries over the last few years. The most apparent cause of this deterioration of relationship is the growing India-US bonhomie under Prime Minister Narendra Modi.

  • The first concerns the rapidly expanding ties between India and USA, which started with the India-US nuclear deal in 2008.
  • The second concerns the growing defence relationship between India and USA. India has so far been heavily dependent on Russian armaments with more than 70 per cent of its weapons being sourced from Russia. Although in absolute terms Russia is still the largest supplier of defence equipment to India, its share in overall imports has progressively declined.
  • India’s reported decision to sign the three ”foundational” defence Agreements with USA, viz., Logistics Support Agreement (LSA), Communications Interoperability and Security Memorandum of Agreement (CISMOA) and Basic Exchange and Cooperation Agreement (BECA) for Geospatial Cooperation, has surfaced as a cause of serious concern for Russia. The recent National Defence Authorisation Act, 2017 accorded India a ‘major defence partner’ of the United States. Hence, Russia feels that India is virtually entering into a military alliance with USA, which will severely restrict Russia’s ability to share sophisticated defence technology with it.
  • The growing defence relationship between Russia and Pakistan is a cause of concern for India also. It is noteworthy that Russia is planning to supply MI 35 attack helicopters and SU 35 aircraft to Pakistan which is definitely unacceptable for Indian power equation in South Asia.
  • The frequency and comfort level in meetings between Modi and Obama were perceived to be higher than with Putin. Modi has travelled to the US four times in the last two years. Obama created history by visiting India twice in his term, as also to become the first US President to attend India’s Republic Day celebrations as Chief Guest in January 2015.
  • Modi and Obama have interacted closely in several international fora like East Asia Summits, G-20 Summits, COP21, and others. As against this, meetings between Modi and Putin have been more formal and limited to three annual Summits and BRICS Summits.

Indo – Russian Relations | Opportunities

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  • Modi and Putin need to give much greater personal attention to building and strengthening the India-Russia partnership. This task cannot be delegated to Foreign Ministers or Foreign Offices. Prime Ministers from Nehru to Vajpayee have been the driving force behind the successful engagement with Russia. In the current scenario also, it would devolve upon Modi to take charge of bilateral ties with Russia, as he has done with several other significant partners.
  • The significance of defence exports for Russia has grown considerably over the last few years, as the prices of oil and gas, on which it is heavily dependent, have declined precipitously. India should quickly conclude some visible, high-ticket, defence deals with Russia. The import and progressive manufacture in India of SU 400 air defence system and KAMOV-226 helicopters, which was finalised during this year’s annual summit and BRICS Summit in October 2016 has been a game changer. Some other pending deals on which decision has been unduly delayed because of the reported obduracy of the Ministry of Defence should be concluded expeditiously.
  • Modi and Putin need to have a frank conversation about India’s growing relations with USA. Modi should make Putin appreciate that India’s expanding ties with USA are neither at the expense of Russia nor are they in any way directed against Russia or detrimental to its interests.
  • It should be made absolutely clear to the Russian side that growing India-US partnership is strategically designed to provide greater political space as well as manoeuvrability for healthy relations with China. India and China have differences in several areas and China’s assertive attitude has caused increasing concern to India.
  • It should be reminded that on issues of strategic interest to Russia like Ukraine, Crimea, Syria, Georgia, etc., India has always expressed understanding of Russian position.
  • Modi also needs to sensitise Putin of the potential damage that Russia’s supply of lethal armaments like MI 35 attack helicopters and SU 35 aircraft to Pakistan can have on relations with India as all such equipment is ultimately used by Pakistan against India.
  • Oil and gas and the nuclear energy sector have shown commendable progress over recent months. Momentum in these areas needs to be sustained and further stepped up.
  • India’s membership in the Shanghai Cooperation Organisation (SCO) at the recent Summit in June 2016 in Tashkent, Uzbekistan, will provide a valuable opportunity for the two countries to strengthen their partnership. India’s potential participation in the Eurasian Economic Union will be a win-win proposition for all members of the grouping.
  • The agreement during Modi’s recent visit to Iran on the construction of the Chabahar seaport, associated rail-road linkages and development of the International North-South Transport Corridor will spur ties between India and Russia as well as with Central Asia and Afghanistan.
  • Exchange of visits among reputed and established Think Tanks of the two countries needs to be stepped up. While Russia is focused on Europe and China, India is concentrating on USA, its neighbourhood, and East Asia. Scholars and academics have always played a critical role in promoting cooperation between the two countries.

Indo – Russian Relations | Conclusion

Forthcoming annual and multilateral (BRICS, SCO) meetings should be used to strengthen bilateral ties in the spheres of strategic, political, security, nuclear energy, hydrocarbons, defence procurement, academia and people to people relations.

India and Russia are natural allies. It is in the interest of both countries to have vibrant relations. The responsibility for this devolves upon Modi and Putin. Both are charismatic and decisive leaders. Their track records prove that they have the vision and capacity to once again achieve heights in bilateral relations earlier witnessed during the Soviet times.

Water Diplomacy and China

Water Diplomacy is the new area where the governments of various countries need to step up and work in tandem to solve the ever increasing fresh water crises. Asia has less fresh water per capita than any other continent, and it is already facing a water crisis which if continued further, will intensify into severe water shortages expected by 2050. At a time of widespread geopolitical discord, competition over freshwater resources could emerge as a serious threat to long-term peace and stability in Asia.

Already, the battle is underway, with China as the main aggressor. But how is the Chinese dragon spreading its tentacles over its Asian neighbours?

Water Diplomacy | China Front

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  • Chinese territorial grab in the South China Sea has been accompanied by a quieter grab of resources in transnational river basins.
  • China enjoys a unique riparian dominance with more than 110 transnational rivers and lakes flowing into 18 downstream countries. Reengineering cross-border riparian flows is integral to China’s strategy to assert greater control and influence in Asia.
  • China has also the world’s most dams, which it has never hesitated to use to curb cross-border flows. In fact, China’s dam builders are targeting most of the international rivers that flow out of Chinese territory.
  • Most of the Chinese internationally shared water resources are located on the Tibetan Plateau, which it annexed in the early 1950s. China’s 13th Five-Year plan calls for a new wave of dam projects on the Plateau which would further regulate downstream flow of river water to neighbouring countries.
  • China recently cut off the flow of a tributary of the Brahmaputra river, the lifeline of northern India and Bangladesh, to build a dam as part of a major hydroelectric project in Tibet. It is also building another dam on a Brahmaputra tributary to create a series of artificial lakes.
  • China has built six-mega dams on the Mekong river, which flows into Southeast Asia (Indo-China region specifically), where the downstream impact is already visible. Instead of curbing its dam-building, China is hard at work building several more Mekong dams.

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  • In arid regions of Central Asia, the water supplies are coming under further pressure as China appropriates a growing volume of water from the Illy River. China is also diverting water from the Irtysh, which supplies drinking water to Kazakhstan’s capital Astana and feeds Russia’s Ob river.
  • Chinese energy, manufacturing and agricultural activities are sprawling in Xinjiang province (Uyghur dominated region). This industrialisation is causing contamination of waters of the region’s transnational rivers with hazardous chemicals and fertilisers, just as China has done to the rivers in its Han heartland.

 Water Diplomacy | Way forward for India

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  • There is a strong need for the affected countries to come together at one table to discuss this serious issue and how to combat it collectively, effectively and in the least confrontational manner.
  • Sporadic and disjointed views will not serve anyone’s interests; therefore, each nation shall directly raise the matter directly at bilateral level in terms of Beijing to restrain its infrastructure building and diversion of transnational river water resources.
  • At the level of India, we should make it clear to Chinese leadership that ‘freedom of navigation’, lower riparian cause of the states should be adhered in line with the international laws and agreed upon conventions.
  • If there is a negative response in bilateral negotiations, we shall utilise multilateral forums like the United Nations, ASEAN, BRICS, SCO etc. to raise the issue without resorting to a policy of being a spoilsport to avoid resistance from other members.
  • India needs to join hands with few of its friendly countries such as Japan and OECD to work in tandem with them to ensure that the Chinese muscle flexing through its so-called water diplomacy could be circumscribed at the earliest.

 Water Diplomacy | Conclusion

The race to appropriate water resources in Asia is straining agriculture and fisheries, damaging ecosystems, and fostering dangerous distrust and discord across the region. It must be brought to an end. Asian countries need to clarify the region’s increasingly murky ‘hydropolitics’. The key will be effective dispute-resolution mechanisms and agreement on more transparent water-sharing arrangements. Asia can build a harmonious, rules-based water management system. But it needs China to get on board. At least for now, that does not seem likely.