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GS Paper: GS2-18.Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

  • Analyzing Multilateralism in Light of BIMSTEC

    Multilateral

    Context

    • While the efficacy of multilateral cooperation is often questioned amidst the compelling the politics of force and global power politics, the world simply does not yet have any other alternative to structured cooperation. Much like the progress and relevance of multilateral cooperation, the fate of BIMSTEC too needs to contextualized in a world order that demands action and resolve.

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    What is BIMSTEC?

    • The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation: (BIMSTEC) is an international organisation of seven South Asian and Southeast Asian nations, housing 1.73 billion people and having a combined gross domestic product of US$4.4 trillion (2022).
    • Members: The BIMSTEC member states Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand are among the countries dependent on the Bay of Bengal.

    Present status of BIMSTEC

    • Poor connectivity and resources: On the one hand, the geographical limits of BIMSTEC suffer from poor intra-regional connectivity which is fundamental to enhancing economic engagement; on the other, the grouping itself is beleaguered by the lack of an institutional structure, operational blueprint, and financial resources.
    • New found interest: The BIMSTEC has indeed shown intent in recent years with member nations taking the first steps since the organisation’s inception towards according the latter agency, mobility, and funds.
    • Most recent activities: These include the adoption of a charter that accords the grouping a legal status; a reduction in the number of priority areas from 14 to seven pillars thereby allowing for more focused engagement, the signing of memorandums on technology transfer, diplomatic training and a master plan on connectivity all of which are of import to the grouping’s future as aspirational countries in a region that has already become the gravitational centre of global geopolitics.
    • Outcome of economic and political stability: The ‘renewed interest’ after remaining dormant for over two decades is attributed to the economic and political stability and growth that member states (barring Myanmar) have witnessed together with the world’s interest being directed towards the opportunities and Indo-Pacific and an increasingly hostile China.
    • BIMSTEC has lot of ground to cover: As a regional organisation, the BIMSTEC is, on paper, well-positioned to gear shared efforts towards the harnessing of economic, natural, and labour potential of member nations.

    Understanding the Multilateral cooperation/Multilateralism

    • Hybrid rather than binary affairs: An assessment of multilateralism has to move away from binary understandings of world architectures. They are in essence, hybrid affairs, combining universal aspirations such as human rights with a more prosaic system of managed competition. This format is here to stay.
    • Achieving common objectives through collective strengths: Multilateral organisations help as facilitators of regional objectives by pooling the strengths of members for advancement, as lobbying entities for regional aspirations and demands on the global stage functions which form the core purpose of these groupings. But multilateralism also suffers from its own set of drawbacks.
    • Political disagreements: Perhaps the biggest limitations of multilateral engagement are ineffectiveness and becoming unwieldy as they comprise several member countries in terms of certain types of decision-making, particularly, those which are political.
    • This is particularly true of large regional or global organisations, with ASEAN being the exception that proves the rule.
    • Mini-laterals: To mitigate this challenge, smaller and more focused undertakings began in recent years in the form of mini-lateral engagement to enable smaller, and more ‘like-minded’ nations to band together for function-based cooperation.
    • BBIN as an example: In the South Asian region, an example of mini-lateral engagement is the BBIN sub-regional framework which has, however, because of the operational complexities, continued to struggle.

    What should be the way forward?

    • Addressing the illegal migration: Multilateral forums also allow for united articulations of challenges unique to particular regions. Among the BIMSTEC’s common challenges are irregular migration, environmental degradation, transnational crimes, terrorism and insurgencies and drug trafficking, the efforts towards the mitigation of many of which, particularly the issue of migration and climate action, need the involvement of the world’s major powers.
    • Support through G20 presidency: India’s G20 presidency in 2023 offers a unique opportunity to leverage New Delhi’s enhanced position in global politics to usher support for BIMSTEC’s necessities and objectives.
    • Intent is stronger than hurdles: The success of groupings be it large or small rests on intent shown by members regardless of operational, financial, political or institutional constraints.
    • Finance, institutions and structure: A grouping that comprised members from what is frequently referred to as the least integrated region in the world, without sufficient financing, and devoid of institutional structures to guide its operations, there has been much to be concerned about regarding BIMSTEC. And yet, because the grouping has demonstrated intent, so far, BIMSTEC’s promise holds more sway than its impediments.

    Conclusion

    • BIMSTEC have suffered from lack of funding, dedicated institution and proper structuring of the grouping. Hopefully new mini-laterals (BBIN) will revive the BIMSTEC in much objective stronger and successful way. India should take the lead in revival of this multilateral forum.

    Mains Question

    Q. Analyze the present status of BIMSTEC. What are the weaknesses of BIMSTEC and suggest way forward?

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  • If Japan goes nuclear, should India welcome the decision?

    nuclear

    Context

    • Japan’s National Security Strategy released in December is a remarkable document. Russia’s invasion of Ukraine, China’s assertive rise, and Democratic People’s Republic of Korea (DPRK-North Korea) provocations are listed as key developments creating for Japan the most severe and complex security environment since the end of the Second World War.

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    nuclear

    What are Japan’s new concerns?

    • Chinese increasing military power: Unconstrained by bilateral or multilateral agreements, Chinese military power is noted as growing exponentially. In less than a decade, the Chinese nuclear arsenal would match numbers currently held by the US and Russia. Expectations are low that the US would have the will or the capacity to bring China to the arms control table.
    • DPRK is riding a runaway proliferation train: Having shaken off all the limits to its nuclear programme it pretended to accept during the Trump Administration, its nuclear programme is perhaps now unstoppable.
    • The inadequacy of its current defence posture and its military alliance with the US: As underlined by the document, extended deterrence including nuclear weapons is the cornerstone of the US-Japan alliance. Its success until now allowed Japan the luxury of its three nuclear no’s policy no production, possession, or introduction of nuclear weapons on its territory.

    nuclear

    What worries Japan in its future adequacy and the options

    • The stated option: The National Security Strategy calls for Japan to strengthen the deterrence and response capabilities of its alliance with the US, including extended deterrence by the US, backed by its full range of capabilities, including nuclear.
    • Possibility trends of nuclear-sharing by Japan: The unstated part is the possibility of nuclear-sharing by Japan. If implemented, this may be new to Asia but is a long-standing US practice with its key NATO allies in Europe. US willingness to share nuclear-powered submarines with Australia as part of AUKUS is an indicator of possible trends.
    • Possibility of Japan itself acquiring nuclear weapons: The document makes no reference to this. But there are references to the US – in Japan’s view the world’s greatest comprehensive power finding it increasingly difficult to maintain a free and open international order. Behind Japanese politeness, the message is clear.
    • Strategic autonomy in Japanese style: Significantly, the document adds that Japan would seek to strengthen its defence capabilities to the point at which Japan is able to take primary responsibility for its defence, without excluding support from the US.

    nuclear

    How India should view this development?

    • If Japan goes nuclear, India should welcome the decision: In our separate ways, India and Japan privileged nuclear disarmament as a priority. But there comes a time when this national preference must be subordinated to the demands of national security.
    • Understanding the reason: India reached this conclusion reluctantly but with good reason in 1998. If Japan were to reach the same conclusion, it too would have good reason to do so.
    • Ensuring self-defence capabilities and Upholding the sovereignty: Its technological capabilities are not in doubt. It is for Japan to exercise its inherent and inalienable right of ensuring the necessary means of self-defence. Thinking the unthinkable in terms of changing policy is an attribute of sovereignty, not its negation.

    Way ahead

    • Japan’s turn towards an explicit nuclear option will come, if at all, not out of choice but out of necessity.
    • Its strategic predicament, laid bare by the document, is compounded by the lack of easy answers, a predicament that India should view with sympathy and understanding of a fellow Asian country.
    • Japan is also a strong supporter of the NPT, and its derivative non-proliferation regime but it is also painfully aware that the NPT does precious little to constrain China, nor for that matter DPRK.
    • The gap between Japan’s security needs in a nuclearized world and its non-nuclear public sentiment was papered over in the past by US extended deterrence. It looks less likely that will be the case in the future.

    Conclusion

    • A multipolar Indo-Pacific can be truly multipolar only if Japan is assured of national defence through the means of its choosing. As a strategic partner and friend, we must keep faith that Japan will make the right decision at the right time.

    Mains question

    Q. Recently Japan released its National security strategy. In this backdrop discuss what concerns Japan and how India should view this development?

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  • India’s role in chaotic world order

    India

    Context

    • As the great powers get at each other’s throats, the prospects for multilateral agreements have diminished. On both the economic and political fronts, the conflict among the major powers has sharpened. That makes India’s chairmanship of G20 more challenging.

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    Historical understanding of major global events

    • Major wars and rebalancing: Major wars have always reshaped great power relations and rearranged the international system. Russia’s war against Ukraine will be no exception.
    • First world war: The First World War saw the collapse of the Ottoman, Austro-Hungarian, and the Russian empires. It also helped the Bolsheviks in Russia form the Soviet Union, gave birth to new nations in Europe, and accelerated the rise of Asian nationalism.
    • The Second World War: Hastened the demise of European colonialism and heralded the rise of the United States and the Soviet Union as the superpowers. Washington and Moscow managed an armed peace in a divided Europe during the Cold War. The process of decolonization saw the birth of a number of new nations in Asia and Africa.
    • The Cold War: It led to the collapse of the Soviet Union, undid its sphere of influence in East and Central Europe and led to the rise of the unipolar moment. The era of massive economic interdependence that followed the Cold War saw the rapid rise of China and a slower but definitive emergence of India as a major power.

    How Russia and China are colluding to change regional and global world order?

    • Asserting themselves against US: Moscow and Beijing, which were willing to acquiesce in the unipolar moment in the 1990s, began to assert themselves against the US-led international order in the 21st century. Europe focused on strengthening its economic and political integration, and sought greater strategic autonomy from the United States.
    • Apparent decline of USA: As they drew steadily closer over the last decade, Russia’s Vladimir Putin and China’s Xi Jinping bet that the apparent American decline was real and irreversible. That emboldened Putin to fancy his chances in ending Ukraine’s sovereignty.
    • China backed Russia against Europe: The seeming political disarray in the West also convinced Xi to back Putin’s attempt to reorder European regional security order. The partnership without limits and no forbidden areas of cooperation was unveiled less than three weeks before Putin invaded Ukraine on February 24, 2022.

    Outcome of Russia’s failed attempt to capture Ukraine

    • Only option is diplomacy: As the costs of war mount, the case for diplomacy will gain ground in 2023. While both sides talk about peace, they are also gearing up to fight through the harsh winter. Bridging that gulf between Russian and Ukrainian negotiating positions will occupy diplomacy in 2023.
    • Weaker Russia: Whatever the nature of the eventual settlement, Russia will come out weaker from this military misadventure. Putin’s attempts to eliminate Ukraine as an independent nation and roll back the eastward expansion of NATO have backfired. The war has consolidated Ukraine as a nation and NATO has expanded to include Sweden and Finland.
    • Self-defense Inability of Europe: The war has also demonstrated Europe’s inability to defend itself against Russia despite the EU’s economy being 10 times larger than that of Russia. But for now, and the near term, Europe will remain dependent on the US to defend it against an expansionist Russia. While Europe is weaker, trans-Atlantic NATO has become stronger.
    • US industries are winning: The US is emerging as a big winner from the Ukraine war. American oil companies are raking it in from high energy prices. US weapons like the HIMARS and its high technology companies like SpaceX with its Starlin satellite system and Palantir with its algorithms have actively shaped the battlefield in favour of Ukraine, the underdog in the war. Far more consequential is the fact that without being directly involved in the fight, the US is influencing the direction of the war and has the most leverage in defining the terms of peace in Ukraine.

    Impact of Chinese and Russian aggression on Mid-power countries

    • US as reliable partner: Thanks to the overreach of Putin and Xi, the US has become a valuable partner for the middle powers at the receiving end of Russian and Chinese bullying.
    • Eyeopener for Germany and Japan: Russian expansionism in Europe and Chinese aggressiveness in Asia have compelled Germany in Europe and Japan in Asia to boost their defence spending.
    • Regional security Policy: Poland in Europe and Australia and South Korea in Asia have embarked on ambitious regional security policies.

    What should be the approach of India?

    • India should rework its status: India that long relied on Russia to provide a regional balance of power will have to rework its great power sums. This should not be too hard, given India’s improving relations with the US and Europe and its focus on diversifying its defence partnerships.
    • Boosting the domestic capabilities: Delhi, however, will have to move much faster in developing the national capabilities and international partnerships to deter China’s aggressive actions on the border and balance Beijing’s power in the Indo-Pacific. Delhi certainly can’t take for granted that its current economic and political advantages will endure.
    • Prevent the breakdown of multilateral system: Finally, it is unlikely the world will return to the kind of multilateralism we got used to since the 1990s. India’s G20 leadership would be a success if it can prevent the complete breakdown of the multilateral system and generate major power consensus on a few issues.

    Conclusion

    • India should take the advantage of chaotic world order to strengthen itself. Indigenous military capabilities, double digit economic growth and securing core foreign policy interest should be the top priorities for India.

    Mains Question

    Q. Major wars in world have often culminated into rebalancing of international politics. Comment. What should be the India’s approach towards new emerging global order in the aftermath of Russia-Ukraine war?

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  • India’s global superpower ambition and an opportunity to lead the world

    global

    Context

    • In September 2014, in his first meeting with President Barack Obama, Prime Minister Narendra Modi talked about making the US a principal partner in the realization of India’s rise as a responsible, influential world power. This was in a way the first time that any Indian prime minister had talked about the country’s ambition to grow into a responsible, influential world power.

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    India in World politics

    • India is not new to playing a proactive role in world politics: Right from Independence, India’s leadership had actively pursued an agenda that favoured the interests of developing or less developed countries.
    • India took a form stand against the domination of developed countries: Whether it was the GATT negotiations or the Non-Proliferation Treaty, India took a principled stand and stood up to the policy domination of the developed world.
    • India as a protector of developing world: India’s role as the protector of the interests of the developing world during WTO negotiations has been significant.
    • For instance: Murasoli Maran, as the Minister of Commerce in the Vajpayee government, played a very critical role in preventing developed countries from pushing through their trade and commercial agendas. The UPA government continued that approach, inviting opprobrium and occasional isolation from the interested players. However, that didn’t deter India from opposing agendas that were seen as against the interests of not only its people but also the larger developing world.
    • India added moral dimension to the developing world but seen as obstructionist: India’s significant contribution in all these fora was that it added a moral dimension to the developed world’s monetary vision. However, India, in the process, acquired the image of being a nay-sayer and obstructionist.

    global

    India’s smart shift in its approach

    • Stated playing proactive role: While standing up for the developing world and zealously upholding its strategic autonomy, India started playing a proactive role in finding solutions.
    • Paris climate summit provided a major opportunity: The Paris Climate Summit in 2015 provided the first major opportunity for India to highlight its new priorities. It played a pivotal role in clinching the climate deal while ensuring that the interests of the developing world are not compromised.
    1. India’s stand in the words of PM Modi: PM PM Modi cogently articulated this stand on the eve of the Summit: “Justice demands that, with what little carbon we can safely burn, developing countries are allowed to grow. The lifestyles of a few must not crowd out opportunities for the many still on the first steps of the development ladder.” India’s efforts resulted in developed countries agreeing to the principle of “common and differentiated responsibility”.
    2. India successfully convinced developed countries for INDCs: India also convinced developed countries to agree to the formulation of not externally imposed targets but “intended nationally determined contributions” or INDCs.
    • India emerged as a powerful player during Covid pandemic response through “Vaccine Maitri”: India’s arrival on the global stage as an important player was further augmented by its constructive response during the Covid pandemic. Besides undertaking the massive exercise of vaccinating its billion-plus citizens, India came to the rescue of more than 90 countries by ensuring a timely supply of vaccines through its “Vaccine Maitri” programme.
    • Commendable economic recovery in post-Covid world: India’s growing importance is conspicuous in many areas. Its post-Covid economic recovery has been commendable, with the World Bank even revising its projections for 2022 GDP growth from 6.5 per cent to 6.9 per cent. The IMF estimated it to be at 6.8 per cent while the rest of the world was projected to grow at 4.9 per cent.

    India in a new year

    • Stronger ties with African nations: The India Africa Forum Summit (IAFS), started in 2008 as a triennial event by then Prime Minister Manmohan Singh, met for the third time in 2015 in Delhi. PM Modi took a special interest in cultivating stronger ties with African nations which led to the highest-ever participation in the Summit. It is important to revive the process.
    • India’s crucial role in Russia-Ukraine war: At the Bali G20 Summit, India played a crucial role in ensuring that both Russia and its critics like the US had their say on the Russia-Ukraine war in a dignified way without being interrupted. On its part, India conveyed to the Russian leadership that it was not a time for war. The new year will bring an opportunity before India to play a role in ending the war.
    • Opportunity to set new agenda for global public good: As G20 chair, India has the opportunity to set a new agenda before the world’s most powerful block of nations. In the past, it always worked for the judicious sharing of global public goods. It is time now to undertake similar efforts for global digital and genetic goods.

    global

    Way ahead

    • India must continue to act as voice of global south: While striving to achieve its ambition, India must not lose sight of the principles that it always championed. It must continue to act as the voice of the Global South.
    • Focus on neighbourhood must increase: India’s diplomatic, strategic and political investments in its neighbourhood and Asia, Africa and Latin America must increase.
    • Attention in ASEAN IOR must grow: With SAARC failing and BIMSTEC remaining a non-starter, India’s attention to the ASEAN and Indian Ocean neighbourhood must grow. India’s Act East policy needs more teeth.
    • India must bring moralist dimensions in new tech developments: India always upheld moralism in global politics. In climate talks, too, the Indian side is resorting to traditional wisdom to achieve global good. India must bring that moralist dimension to new technological developments.
    • India must lead to regulate technologies for humanity’s future: The advent of artificial intelligence and genetic manipulation technologies is going to throw the world into turmoil. If not regulated globally on time, these technologies are going to play havoc with humanity’s future.

    Conclusion

    • The country is entering the new year on a buoyant note. The leadership of important multilateral bodies including the G20 and SCO has come into its hands. The new year is thus going to provide India with the opportunity to fulfil its world power ambition. However, opportunities come with challenges. China may try to curtail India’s ambitions by keeping the border tense. India needs to maintain harmonious balance.

    Mains question

    Q. From wars to the economy to climate, India has become integral to the contemporary global discourse. What will India need to do to fulfil its global superpower ambitions in the new year?

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  • India-China relations: China Inconsistent in its words and actions

    India-China

    Context

    • India-China relations have been under enormous strain in recent years. The Indian foreign minister, S. Jaishankar, on many occasions has stated that India-China relations are going through an extremely difficult phase. For the two to return to normalcy in the relationship, he added that it will depend on three mutuals: mutual sensitivity, mutual respect and mutual interest.

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    India-China

    Chinese foreign minister statement

    • Statement by Wang Yi: Chinese Foreign Minister Wang Yi stated that China is ready to work with India in improving bilateral ties.
    • Statement said China will work with India for steady China-India growth: Speaking at a symposium on the international situation and China’s foreign relations in 2022, Wang reportedly said that both countries “have maintained communication through the diplomatic and military-to-military channels, and both countries are committed to upholding stability in the border areas. We stand ready to work with India in the direction toward steady and sound growth of China-India relations.
    • Statement against the backdrop of Tawang clash: The Chinese foreign minister’s statement comes against the backdrop of the December 9 clash near Tawang in the northeastern Indian state of Arunachal Pradesh, where soldiers on both sides sustained minor injuries.

    Strained relationship between India-China

    • No sign of taking a back step: Even though the two sides managed to bring the Tawang situation under control, the reality is that the number of forces on deployment on either side of the border after the Galwan clash two years back shows no sign of being pulled back, a stark reminder of the far-from-normal state of relations between India and China.
    • Despite of commander level talks, no fruitful negotiation on disengagement: Despite 17 rounds of military talks at the army commander level, the two sides have not been able to resolve their differences and accomplish a complete disengagement of their military forces.
    • Statement by India: Following the 17th session of military talks last week, the Indian Ministry of Defense issued a statement that blandly stated that both sides will maintain the security and stability on the ground in the Western Sector and that they agreed to stay in close contact and maintain dialogue through military and diplomatic channels and work out a mutually acceptable resolution of the remaining issues at the earliest.

    India-China

    Is there any positive change in Chinese strategic thinking?

    • Chinese foreign policy is just the same: It is unclear if Wang’s comment on India-China relations reflects any fundamental change in China’s foreign policy. Clearly, there has been no general softening of China’s attitude.
    • Speech was a part of diplomacy: The minister’s statement on India was part of a long speech taking stock of China’s diplomacy and foreign relations in 2022.
    • Particular focus on United states: In the statement, there was a particular focus on the troubled nature of its ties with the United States, calling out Washington’s erroneous China policy. Wang went on to say that it was U.S. stubbornness in seeing China as its peer competitor and Washington’s “blatant blockade, suppression and provocation against China” that has put the relationship in “serious difficulties.
    • Concerned about Taiwan: The minister noted Taiwan is a red line that must not be crossed in China-US relations. He also made note of U.S. House Speaker Nancy Pelosi’s visit to Taiwan to which the minister said that China has taken firm and resolute measures, which have strongly deterred anti-China elements in the United States and the Taiwan independence forces.
    • Indirect reference to QUAD: The Quad, which comprises the U.S., Japan, India and Australia, also found an indirect mention in Wang’s speech. He stated that China is opposed to “bloc confrontation and zero-sum competition.
    • Aggressive with each of India’s security partner: Each of India’s new security partners among the Quad countries has been subjected to China’s aggressive behavior in military, political and economic terms, which has brought a new depth of strategic purpose to the Quad.

    India-China

    Way ahead

    • India’s relationship with China has been teetering from bad to worse over the last 32 months since the standoff in Ladakh began, and it seems unlikely to improve unless Beijing’s calculus vis a vis India and the region undergoes a drastic change.
    • On the current status of the ties Indian foreign minister, S. Jaishankar, remarked that “the state of the border will determine the state of the relationship.”
    • While Delhi’s G20 leadership may bring opportunities for engagement with Beijing, what is required first is a clear vision and a grand strategy to deal with the China challenge, instead of reacting to each crisis as it emerges

    Conclusion

    • Inconsistencies, both in China’s words and also between words and actions, will likely reduce the willingness of other countries, including India, to take seriously China’s statements about wanting a reset of ties.

    Mains question

    Q. India-China relations, though occasionally showing signs of peace and cooperation, have often been afflicted by tension and mistrust. China is inconsistent in words and actions. Discuss.

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  • Growing ties Between India-Saudi Arabia

    Saudi Arabia

    Context

    • The presidency, which India has recently assumed for the period between 1 December 2022 and 30 November 2023, will likely open more avenues for cooperation on multiple fronts with countries like Saudi Arabia, a key Gulf Cooperation Council (GCC) country, also a member state of G20.

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    Saudi Arabia

    India-Saudi Arabia Relationship

    • Fourth largest trading partner: Since the last few years, India-Saudi Arabia relations have become comprehensive and robust, with the kingdom not only becoming New Delhi’s fourth largest trading partner but also an important collaborator in the joint combat against all forms of terrorism, money laundering, and terror financing.
    • 18% of India’s energy Imports: It is noteworthy that the bilateral trade in the fiscal year 2021-2022 stood at US$42.8 billion, and the kingdom alone accounts for 18 percent of India’s energy import, which reflects the significance of the country from the standpoint of New Delhi’s energy and economic security calculus.
    • Collaboration on defence corridor: Simultaneously, military-security and defence cooperation have also gained momentum, which has been triggered by a certain commonality of security threats and challenges, and the interests of the respective governments to collaborate in the defence industrial sector (within the ambit of their military modernisation programmes).
    • Non-oil areas of cooperation: The ties between the two countries, now, are not only concentrated on the oil-energy trade alone (as it has been the pattern) but both sides have started to explore the possibilities of working together on domains such as renewable energy, climate change, healthcare, food security, education, technology, etc.

    Partnership in Green and clean energy

    • Collaboration with Indian companies: In November 2020, Narendra Modi, the Indian Prime Minister, called on foreign investors to “invest on their own” or to collaborate with Indian companies in the country’s green energy sector.
    • Reducing dependency on hydrocarbon: Similarly, Saudi Arabia, striving to reduce its dependency on a hydrocarbon-based economy, is investing in the same sector.
    • Saudi Vision 2030 programme: In line with its Saudi Vision 2030 programme, it launched (in 2021) the Saudi Green Initiative which works on “increasing Saudi Arabia’s reliance on clean energy, offsetting emissions, and protecting the environment.
    • Ambitious targets by both country: Riyadh, ushering in a new era of energy diplomacy, is building partnerships with countries that have similar ambitions. This, to a great extent, has facilitated the need to expand cooperation with India in the renewable energy sphere. While the Indian government works towards generating 450 Gigawatt about 60 percent of electricity using renewable and clean sources, Saudi Arabia also aims at about 50 per cent, both to be achieved by the year 2030.

    Saudi Arabia

    India-Saudi Arabia cooperation in health sector and during Covid19

    • Cooperation with west Asia region: India has stepped up its healthcare-related engagements with the wider West Asian region, and, particularly in matters related to the production of vaccines, joint medical researches, exchange of best-fit practices, and so on.
    • Healthcare professionals to Saudi Arabia: During the peak of the aforementioned pandemic, the Indian government assisted its Saudi counterpart in their fight against this outbreak, mainly by dispatching hundreds of Indian healthcare professionals.
    • Vaccine acceptancy: Saudi Arabia was also one of the few countries that recognised “Serum Institute of India’s Covishield as an approved COVID-19 vaccine” for any travellers who wanted to enter the kingdom.
    • MoU on health and medical products: Now, what could act as a catalyst in elevating the interactions from the existing level is the Indo-Saudi Memorandum of Understanding (MoU) on health and medical products regulations that were signed during the 2019 visit of Modi to Riyadh.

    Cooperation in Food Security

    • Investment by Saudi and UAE: It could be noted that, in 2019, to act as a safeguard from any food insecurity, UAE and Saudi Arabia GCC states decided to invest in India’s organic and food processing industries.
    • Win-win situation in food cooperation: With India’s expertise in the field of crop production and overall agricultural activities, and also being a net exporter of agricultural commodities (especially rice), strengthening of partnerships could prove to be highly beneficial for the populace of Saudi Arabia and the UAE, and other GCC countries that continue to depend on external sources for their food security, mostly owing to the lack of fertile soil.

    Saudi Arabia

    Conclusion

    • While India-Saudi Arabia ties are expected to grow further, there also exists a potential for collaboration beyond this bilateral engagement. This is precisely because, in the emerging international order, there is also a growing call for a collective response to the multidimensional crises the world is facing today.

    Mains Question

    Q. Briefly describe the India-Saudi Arabia relationship? How both countries are collaborating on clean energy and food security?

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  • Understanding the Russia through Ukraine War

    Russia

    Context

    • Russia marks two anniversaries the 100th anniversary of the founding of the Soviet Union and the 31st anniversary of its dissolution. Following the Bolshevik Revolution in November 1917, the Soviet Union was proclaimed on December 30, 1922. Until its dissolution on December 26, 1991.

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    Russia

    How India looks at Russia?

    • Special Strategic Partner: Vladimir Putin’s Russia continues to be valued as the heir to the Soviet Union and as a special strategic partner.
    • Ukraine war has not affected the ties: Putin’s aggression against Ukraine and his brutal bombing of its civilian population, which Moscow claims is an integral part of Russia, has hardly made a dent in the way the Indian political classes think about the crisis.
    • Russia as anti-imperialist: On the left and centre of the Indian political spectrum, the Soviet Union has been viewed purely through the ideological lens of progressive politics nationalist, internationalist, communist and anti-imperialist. That lens, however, is detached from the history of Russia and the continuing struggles for its political soul.
    • Russia as best friend forever: Within the strategic community, the conviction that Russia is India’s “best friend forever” leaves little room for a nuanced view of Russia’s domestic and international politics.

    Understanding Russia’s behaviour through Russian History

    • The Bolshevik Revolution: It is initially sought to destroy the Russian Orthodox Church, eventually leveraged it in the deification of the Soviet state and lent a religious colour to the claim of Russian exceptionalism.
    • Alliance with orthodoxy: Putin has taken the alliance with the Russian Orthodox Church to a higher level. For the Russian nationalists today, the effort to take back Ukraine is a “holy war”.
    • Limited sovereignty to other communist state: After the Second World War, Soviet Russia insisted that fellow communist states had only “limited sovereignty” and Moscow had the right to intervene to keep them on the straight and narrow path of socialism and prevent their destabilisation. The military invasions in Hungary (1956), Czechoslovakia (1968), and Afghanistan (1979) were motivated by this impulse.
    • Russia has not given up Imperialist tradition: In claiming that Ukraine has no sovereignty of its own, Putin is merely following that imperial tradition as well as the conviction that Ukraine, Belarus and Russian-speaking people everywhere are part of the “Russkiy Mir” or the “Russian world”.
    • Mao’s characterization of Russia: After he broke from the Russian communists, Mao began to characterise Russia as an “imperial power”. Mao had not forgotten the persistent tension between the Chinese and Russian empires.

    Russia

    Analyzing Russia’s internal politics

    • Weak federalism by Lenin: The founder of the Soviet Union, Vladimir Lenin warned against the dangers of “great Russian chauvinism”. He insisted on structuring a federal polity with the right of various nationalities to secede.
    • Strong soviet by Stalin: Stalin, however, turned Russian federalism into a hollow shell and erased the difference between the “Soviet Union” and “Soviet Russia”.
    • Putin refuse to recognize Ukraine: Putin denounced Lenin for giving a separate identity to Ukraine. “Modern Ukraine”, Putin said, “can with good reason be called ‘Vladimir Ilyich Lenin’s Ukraine’.”
    • Stalling the democratic process: The enduring autocratic impulse in Moscow that is rooted in the stalled democratic revolution. Traditionally, the Russian fear of disorder has left the population to put great faith in strong leaders.
    • Centralising tendency: The frequent but unsuccessful efforts at political liberalisation have left a fertile ground in Russia for centralising power under leaders like Putin and increasing the chances of grave miscalculation.

    Russia

    What should be the India’s approach towards Russia?

    • Not directly criticize Russia: Although it has been reluctant to directly criticise Russian aggression, official India is not blind to the fact that Putin’s “special military operation” has gone horribly wrong.
    • Taking note of changing world order: India will inevitably find ways to adjust to the tectonic shifts in the world order triggered by Putin’s misadventure.
    • Learning from Putin’s mistake: The Indian political and strategic communities must come to terms with the many complex factors that have contributed to Putin’s egregious errors in Ukraine.

    Conclusion

    • To understand how the war in Ukraine might play out and its longer-term consequences for India, India’s discourse must pay greater attention to the turbulent history of Russia and its troubled relations with its Central European neighbours.

     

  • India-EU Free Trade Agreement

    Agreement

    Context

    • The third round of negotiations of the India-European Union (EU) free trade agreement concluded recently. The two sides are also negotiating an investment protection agreement (IPA), which will contain investment protection standards and an independent mechanism to settle disputes between investors and states under international law.

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    Why EU is seeking Investor Protection Agreement?

    • Regulatory troubles in India: Notwithstanding the laudable intent of the government to welcome them, foreign investors in India have often got into numerous regulatory troubles with the state.
    • Investors have sued India: Several foreign corporations like Vodafone, Cairn Energy, Nissan, White Industries, Telenor, Nokia, Vedanta have sued India to enforce the rights guaranteed to them in bilateral investment treaties (BITs). This is the main motivation behind the EU seeking an IPA with India.
    • India’s past of unilaterally changing the laws: EU investors can rely on Indian law for protection. But Indian law can be unilaterally changed to the detriment of the investor.
    • Slow Judicial process: The Indian judiciary is agonisingly slow in resolving disputes. Thus, the longing for protection under international law.

    Agreement

    What are the hurdles finalization INDIA-EU treaty?

    • Non-justiciable tax regulations: India wants to push taxation measures outside the scope of the treaty by making tax-related regulatory measures non-justiciable. The EU has difficulty accepting this proposition given the recent history of India’s tax-related investment disputes with Vodafone, Cairn Energy, and Nissan.
    • Two tier court system: The EU’s investment proposal to India talks of creating a two-tier court-like system with an appellate mechanism and tenured judges to resolve treaty disputes between investors and the state.
    • EU’s proposal of MIC: This proposal is connected to the EU’s stand internationally for creating a multilateral investment court (MIC), negotiations for which are going on at the United Nations Commission on International Trade Law (UNCITRAL). The MIC is aimed at overcoming the weaknesses of the current arbitration-based system of settling investor-state disputes.
    • Lack of clarity from India’s side: India’s position on creating an investment-court-like system is unknown. India hasn’t publicly contributed to the ongoing negotiations at UNCITRAL towards establishing a MIC.

    What is the issue of MFN and FET?

    • EU wants the MFN status: The EU’s investment proposal contains a most favoured nation (MFN) provision to ensure that EU investors do not face discrimination vis-à-vis other foreign investors.
    • India don’t want to include MFN: On the other hand, India’s position is not to include the MFN provision in its investment treaties because of the apprehension that foreign investors will use the MFN clause to indulge in disruptive treaty shopping. The solution to such disruptive treaty shopping is to negotiate for a qualified MFN provision and not exclude it altogether.
    • Fair equitable treatment: EU investment proposal contains what is known as a fair and equitable treatment (FET) provision, which is missing in the Indian 2016 Model BIT.
    • Making the state liable: The FET provision protects foreign investors, for example, by making the states liable if it goes back on the specific assurances made to an investor to induce investments on which the investor relied while making the investment.

    Why IPA is need of the hour?

    • FDI is stagnant: Overall FDI to India has stagnated for the past decade at around 2 per cent of the GDP. In the case of the EU, while its share in foreign investment stock in India increased from €63.7 billion in 2017 to €87.3 billion in 2020, this is way below the EU foreign investment stocks in China (€201.2 billion) or Brazil (€263.4 billion).
    • Negative Impact of BIT terminations: Recent research shows that India’s decision to unilaterally terminate BITs has negatively impacted FDI inflows to India.
    • IPA needed to attract FDI: India needs the IPA with the EU to attract FDI for achieving the aspirational milestone of becoming a $10-trillion economy by 2030.

    Conclusion

    • India needs to put its own house in order. India should review the 2016 Model BIT, as has also been recommended by the Parliament’s standing committee on external affairs.

    Mains Question

    Q. What is the investor protection scheme and why EU wants to include IPA in Free Trade Agreement with India? what are the hurdles in FTA between EU and India?

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  • Global Minimum Tax on big businesses

    tax

    Members of the EU last week agreed in principle to implement a global minimum tax of 15% on big businesses.

    Global Minimum Corporate Tax

    • Major economies are aiming to discourage multinational companies from shifting profits – and tax revenues – to low-tax countries regardless of where their sales are made.
    • Increasingly, income from intangible sources such as drug patents, software, and royalties on intellectual property has migrated to these jurisdictions.
    • This has allowed companies to avoid paying higher taxes in their traditional home countries.

    What is the recent EU agreement?

    • EU members have agreed to implement a minimum tax rate of 15% on big businesses in accordance with Pillar 2 of the global tax agreement framed by the OECD last year.
    • Under the OECD’s plan, governments will be equipped to impose additional taxes in case companies are found to be paying taxes that are considered too low.
    • This is to ensure that big businesses with global operations do not benefit by domiciling themselves in tax havens in order to save on taxes.

    Need for a global minimum tax

    • Corporate tax rates across the world have been dropping over the last few decades as a result of competition between governments to spur economic growth through greater private investments.
    • Large multinational companies have traditionally paid taxes in their home countries even though they did most of their business in foreign countries.
    • The OECD plan tries to give more taxing rights to the governments of countries where large businesses conduct a substantial amount of their business.
    • As a result, large US tech companies may have to pay more taxes to the governments of developing countries.

    History of such taxes

    • Global corporate tax rates have fallen from over 40% in the 1980s to under 25% in 2020.
    • The global tax competition was kick-started by former US President Ronald Reagan and former British PM Margaret Thatcher in the 1980s.
    • The OECD’s tax plan tries to put an end to this “race to the bottom” which has made it harder for governments to shore up the revenues required to fund their rising spending budgets.
    • The minimum tax proposal is particularly relevant at a time when the fiscal state of governments across the world has deteriorated as seen in the worsening of public debt metrics.

    Response to the EU move

    • Some governments, particularly those of traditional tax havens, are likely to disagree and stall the implementation of the OECD’s tax plan.
    • High tax jurisdictions like the EU are more likely to fully adopt the minimum tax plan as it saves them from having to compete against low tax jurisdictions.
    • Low tax jurisdictions, on the other hand, are likely to resist the OECD’s plan unless they are compensated sufficiently in other ways.

    Way forward

    • Supporters of the OECD’s tax plan believe that it will end the global “race to the bottom” and help governments collect the revenues required for social spending.
    • The plan will also help counter rising global inequality by making it tougher for large businesses to pay low taxes by availing the services of tax havens.
    • Critics of the OECD’s proposal, however, see the global minimum tax as a threat.
    • They argue that without tax competition between governments, the world would be taxed a lot more than it is today, thus adversely affecting global economic growth.
    • In other words, these critics believe that it is the threat of tax competition that keeps a check on governments that would otherwise tax their citizens heavily to fund profligate spending programs.

     

     

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  • The Small Island Developing States (SIDS) in IOR

    Island

    Context

    • The Indian Ocean Region (IOR) serves as a connecting hub for global energy and commodity trade and comprises important Sea Lanes of Communication (SLOC) and major choke points. The IOR has become central to the geostrategic aspirations of large powers with vested interests in the region. Small Island Developing States (SIDS) located in the Western Indian Ocean such as Maldives, Madagascar, Comoros, Mauritius, and Seychelles, are being dragged into the great power rivalry as a result.

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    Small Island Developing States (SIDS)

    • Small Island Developing States (SIDS) are a distinct group of 38 UN Member States and 20 Non-UN Members/Associate Members of United Nations regional commissions that face unique social, economic and environmental vulnerabilities.
    • The three geographical regions in which SIDS are located are: the Caribbean, the Pacific, and the Atlantic, Indian Ocean and South China Sea (AIS)
    • SIDS were recognized as a special case both for their environment and development at the 1992 United Nations Conference on Environment and Development held in Rio de Janeiro, Brazil.

    Island

    Significance of Small Island Developing States (SIDS) of IOR

    • SIDS are strategically important: The geographical location of SIDS islands is of strategic importance, ever since the Indo-Pacific architecture materialised.
    • Provides easy access and a base for replenishment: The islands provide easy access to the choke points, are located close to important SLOCs, and can serve as a base for the replenishment of resources for maritime powers conducting surveillance in the region.
    • Engagements boosts maritime expanse: The bigger powers have been engaging with the islands on a larger scale to boost their presence in this maritime expanse.

    Island

    Challenges faced by SIDS

    • Multiple challenges: The SIDS, by nature, face multiple challenges due to their remote locations, size, fragile ecosystems, small population, and limited resources and capabilities. Most of the SIDS are classified as middle-income states, but SIDS like Comoros are among the Least Developed Countries (LDCs).
    • Economies are not diversified: The economies of these states are not diversified and are highly dependent on a few sectors like tourism and fisheries.
    • Climate change and losses due to natural disasters: Climate change exacerbates their challenges, adding an extra burden on their frail economies. The SIDS account for two-thirds of states that suffer the highest relative losses (1 percent to 9 percent of GDP per year) due to natural disasters.
    • Rising sea levels and impact on various economic sectors: Apart from the threat of the low-lying islands going underwater in the future, rising sea levels directly impact the economic sectors of the SIDS. For instance, saltwater intrusion affects freshwater resources and diminishes the quality of agricultural land.
    • Largely dependent on food imports: The SIDS are already largely dependent on food imports as 50 percent of the SIDS import more than 80 percent of their food. A further reduction in food production will increase their dependence on food imports. Self-sufficiency is a distant dream for SIDS in this aspect.
    • Fishery industry a major contributor of economy facing challenges of loss of EEZ: Fish exports account for a large share of the revenue for these states. The fishery industry faces challenges of loss of Exclusive Economic Zones due to shifting baselines, and Illegal, Unreported and Unregulated (IUU) fishing.
    • Rising sea temperature: Additionally, rising sea temperatures also negatively affect marine biomass in the resource-rich zones of SIDS.
    • Tourism industry hampered by Pandemic: Almost 50 percent of the GDP of SIDS like the Maldives and Seychelles, depends on the tourism industry which was hampered by the pandemic. T

    Island

    Powerplay and China’s maritime development strategy in SIDS of IOR

    • Concerns about increasing influence China: Powers such as the US, Japan, Australia, and India are largely concerned with the increasing influence of China in the region.
    • China’s island development strategy: Islands play a major role in China’s maritime security policy, as is evident by its island development strategies in the contested South China Sea and cooperation initiatives with island states in various geographies.
    • Vulnerable SIDS welcomed Support initiatives from China: The SIDS have welcomed the development and support initiatives from China owing to their vulnerabilities. From a port development project in Madagascar and major infrastructure development projects in the Comoros islands to a Free Trade Agreement with Mauritius and development assistance to Maldives; China has firmly embedded its roots in the region.
    • Maldives in debt trap seeks India’s assistance: When Maldives owed a debt of nearly US$1.5 billion to China in 2018, it had to turn to its traditional partner, India, for assistance to prevent an economic crisis.
    • Madagascar worries about Chinese debt trap: Madagascar is also heavily surrounded by Chinese presence and involvement in its economy and is worried about being trapped in debt. Chinese-funded enterprises comprise 90 percent of the island’s economy. Chinese migrants left very few job opportunities for the locals, disrupted trade and commerce, and established a monopoly of Chinese products in the market. Such a heavy involvement of China in Madagascar puts it at a high risk of instability and political upheaval. This is a clear example of how the strategic interests of large powers can bring the SIDS to the brink of collapse.

    Opportunity to discuss and maintain stability through various forums

    • SAMOA pathway: SIDS Accelerated Modalities of Action (SAMOA) Pathway which is an international framework under the UN umbrella that has initiated a stronger action from the international community to support the vulnerable islands. It guides national, regional, and international development efforts to help these states achieve their Sustainable Development Goals (SDGs).
    • Alliance of small Island states: Similarly, the Alliance of Small Island States is a representative body of 39 small island states that provides a platform to voice their grievances.
    • Indian ocean commission: The Indian Ocean Commission is yet another intergovernmental body that consists of the islands; Comoros, Madagascar, Mauritius, Seychelles and Réunion (French overseas region).

    What SIDS must do?

    • The SIDS of IOR must strengthen their collaboration with each other.
    • They must make a collective effort to make their challenges and issues known to the other actors.
    • The SIDS should make use of the opportunity to ensure that the larger powers understand their security interests and include it in the larger security architecture

    Way ahead

    • In most cases, decisions regarding security in the region have been taken by the influential, and larger powers without the SIDS.
    • The SIDS of the IOR can leverage their strategic position and use it to their advantage to make the larger powers acknowledge their security interests and issues.
    • The need of the hour is for stronger alliances and regional groupings to emerge, with significant participation of the SIDS, so that other actors do not downplay or overlook their issues and interests.

    Conclusion

    • The SIDS have been advocating at various international forums for support and assistance to combat their challenges associated with resources, development, climate change, and most of all, survival. Rather than being viewed as pawns in the geopolitical competition, the SIDS must be viewed as important stakeholders in the region. This is the main change in the mindset, policies and approaches that are needed for secure and stable region.

    Mains Question

    Q. What is SIDS (Small Island Developing States). What is the significance of SIDS in IOR? Discuss the challenges faced by SIDS in the region and suggest a way ahead.

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