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Subject: Bilateral Relations

1. Major World Events
2. India’s Interests in neighbourhood
3. Effects of our Policies

  • Foreign Policy Watch: India-Australia

    India & the Oceans

    Backgrounder

    It is analytically sensible to divide Australia’s links to post-Independence India into four phases:

    The first corresponds to the years immediately surrounding Indian Independence when Labour Party was in power in Australia.

    The second period is the Menzies Years,

    The third may be regared as the post 1971 re-discovery of India and

    The last is the current engagement with emerging India. While the first three periods correspond largely to changes of party in power in Australia, the most recently is largely bipartisan.

    Phase-I: India’s Independence and Australia

    When India became independent in 1947, Australia’s relations with India under labour party, which remained in power until 1949, were close and sympathetic. At India’s invitation, two representatives from Australia participated at the 1947 Asia Relations Conference held in New Delhi.

    Reports presented by the two delegates back to the Australian government noted little negativity in the relationship, although the question of restrictions on immigration was raised during the conference.

     

    Phase II: Nehru and Menzies: The Doomed Legacy of a Clash of Dominant Personalities

    What emerges in striking fashion from the interpretations of a number of the studies of the first two decades after India’s Independence in 1947 is the argument that relations in those formative years pivoted around the strong personalities of Sir Robert Menzies and Jawaharlal Nehru. Menzies, an anglophile Empire Loyalist, thought India was not yet fit for self rule, he regretted the passing of the White Commonwealth of the 1930s and decried India’s unwillingness to offer loyalty to the Crown in the changed post-colonial Commonwealth.

    It was not until India’s border clashes with China in 1962 that the two nations were firmly on the same side of a major international crisis.

    A difference in approach to security soon emerged after 1947, while Australia hoped to establish a regional security arrangement which included India, India expressed no interest in the proposal. Australia’s growing alignment with the USA in the emerging Cold War virtually removed any possibility of bilateral defence cooperation. There were several other issues on which the two countries differed including Australia’s Trusteeship position in Papua New-Guinea and the clash between India and Pakistan over the accession of Kashmir.

     

    Phase III: relations 1971-1998 – Silence Punctuated by Occasional Hiccups

    In these years, the Australian government has paid considerable attention to India both as a security threat and as a potential trading partner. One of the early manifestations of the ‘renaissance’ of interest was the establishment of the Indian Ocean Center for Peace Studies at the University of Western Australia in 1990.

    This may well have been a response to emerging concerns in the late 1980s over the build-up of India’s defence forces, especially the extension of its naval capability. So, too was a pioneering report by the Senate Standing committee of Australia on Foreign Affairs, Defence and trade. Some of the testimony to the committee utilized a distinctly alarmist tone about Indian intentions in the Indian Ocean. The National Council of the Australian

    Defence Association for example, in their submission to the Committee expressed their fears that India might use its new naval capabilities to annex Australian territory in Cocos Islands.

    Another ‘hiccup’ in the India-Australia relationship also arose in the sphere of Defence when in 1990 Australia sold 50 mothballed Mirage III jets to Pakistan during a period of heightened tension over Kashmir.

    Whereas, India’s neglect of the Australian relationship can most usefully be seen as part of its broader neglect of its relationship with Asia in the years before the adoption of the ‘Look East’ policy. The collapse of the principal structure of Indian Foreign Policy which followed the implosion of Soviet Union in 1989 led the country to give serious attention to its relationships with the countries of Southeast Asia and North Asia.

     

    Phase IV: Nuclear Bombs and Terrorist Threats

    The India-Australian relationship that had shown a degree of warmth in the 1990s with the publication of several reports containing recommendations for further strengthening the relationship dipped fast in the wake of India’s nuclear testing in May 1998.

    Prime Minister John Howard condemned it saying it was an ‘ill-judged step’ that would have damaging consequences for security in South Asia. Canberra also withdrew its High Commissioner from New Delhi and imposed severe sanctions on India along with severing all defence ties with the country.

    With the US attitude softening towards India, especially as the US President Bill Clinton visited India in March 2000, Canberra also began to warm up to New Delhi. As the reality that India was a nuclear power state hit the world and Canberra, politico/security ties began to be restored slowly and upgraded vastly in post 9/11 security environment.

    In post 9/11 environment, a Memorandum of Understanding on Cooperation in Combating International Terrorism was signed in August 2003 followed by a Memorandum of Understanding on Defence Cooperation in 2006.

    In the recent past, the Navy of Australia along with Japanese Navy had also been invited to participate in Malabar Exercises conducted between Indian and US Navy.

     

    Immigration Issue and Indian Diaspora

    The past decade has seen a large increase in Indian migration to Australia. In 2011-12 only, 29,018 Indians became permanent migrants, the highest such number from any one country. Fellow democracies with shared values, concerns and interests and now a growing community-centric relationship, India and Australia should have strong similarities. As flanking states in the eastern Indian Ocean, for example, they are critical to an emerging arena of geopolitics.

    Students from India are pursuing undergraduate/post-graduate studies, research and special courses at all leading universities, including University of Melbourne, Monash University, RMIT University, La Trobe University, Swinburne University Victoria University and Deakin University.

    Indian students are also undertaking courses at different vocational training institutes and colleges in a range of areas, including accountancy, finance, community service, child care and aged care, etc.

    The number of immigrants in Australia from India remained small until the middle of the 20th century when the aftermath of the Second World War and India’s Independence resulted in a spate of immigration of nonethnic India-born British and Anglo-Indians.

    Since 1966, the relaxation of racially based immigration policies in favour of educational and professional qualifications and the English language opened the doors for many professional ethnic Indians as well as migrants of ethnic Indian background from many countries outside India, like Fiji, Singapore, Malaysia, Sri Lanka, Uganda, Kenya, Tanzania, South Africa and Britain.

    Compared to migrants from other Asian countries, the India-born migrants have remained a distinctive group, forming the largest proportion of ‘skilled migrants’ rather than ‘family migrants’. Unlike the 19th century settlers, later migrants are a highly urbanized group, occupying one of the highest levels of educational training and qualifications of any group in Australia.

    Economic Relationship

    Trade between Australia and India dates back to late 18th century and early 19th century When coal from Sydney and horses from New South Wales were exported to India. As of 2010, bilateral trade between the two countries totaled US$ 18.7 billion, having grown from US4.3 billion in 2003. This is expected to rise to touch the mark of US$40 billion by end of year 2016.

    Trade is highly skewed towards Australia. India is Australia’s tenth largest two-way trading partner, with a total volume of AUD$11.9 billion in 2013. India is Australia’s fifth largest export market, with coal, gold, copper ore and concentrates and agricultural products among Australia’s major exports, while India’s chief exports are pearls, precious and semi-precious stones, textiles and clothing. Over 97,000 Indian students enrolled in Australia in 2008, representing an education export of AUD2 billion.

    Issue of Nuclear Cooperation

    Supply of uranium to India has become a huge political issue in the Australia-India bilateral relationship. After a civilian nuclear technology deal signed between the United States and India in 2006, pressure on Australia to consider supplying uranium to India grew from different quarters, but most notably from India.

    Then Prime Minister John Howard resisted the pressure by asserting that Australia’s policy was not to supply the yellow cake to a country that has not signed the nuclear Non-Proliferation Treaty (NPT).

    Some commentators criticised Australia’s hypocritical approach to the issue. They ask how Australia justifies its policy of exporting uranium to China which, though it is a signatory to the NPT, is a known proliferator as Beijing has reportedly supplied nuclear technology and materials to North Korea and Pakistan, states run by autocrats and military dictators, and has nuclear ties with Iran.

    On the other hand India claims it has never proliferated nuclear weapons or technology to a third party despite not signing the treaty due to its discriminatory nature.

    Providing access to Communist China and withholding such access to India, the world’s largest democracy does not go down very well among many commentators and officials in India.

    Under pressure Howard later changed his tune by accepting that India’s behaviour as a nuclear weapons state had been ‘impeccable; since the country first exploded a nuclear device in 1974’. In August 2007 he announced that Australia was willing to sell uranium to India under strict conditions and Howard communicated his decision to his Indian counterpart.

    The agreement would have allowed Australian nuclear inspectors to ensure that the uranium was used only for the power generation purposes. Then in Opposition, Kevin Rudd had vowed to “tear up” any nuclear deal with India if he won government.

    Soon after it came to power, the Rudd Labor government reversed Howard’s decision and announced in January 2008 that Australia would scrap the deal that was signed by the Howard government in August 2007 concerning the sale of uranium to India on the grounds that India was not a signatory to the NPT, reverting to Australia’s long-held stance on the issue.

    The volte-face by the Rudd administration on the sale of uranium to India came as a significant blow to India’s energy security needs especially as Australia holds the world’s largest known reserves of uranium, approximately 40% of the total worldwide supplies.

    It is not just the Indian strategists who have criticized Rudd’s reversal of Howard’s policy on legal, political, strategic and pragmatic grounds but in Australia, too, politicians on the opposite side in federal parliament have ridiculed Rudd’s reversal policy.

    Finally the issue settled only in late 2011 when Prime Minister Julia Gillard overcame opposition from domestic anti-nuclear lobbies and agreed to sell uranium to India.

    Present Context

    The recent visit by an Indian Prime Minister, after a gap of nearly 30 years (Rajiv Gandhi in 1986), for the G20 Summit in Brisbane, and then his travel to Canberra for an official bilateral visit comes at a critical time for both countries – when strategic equations are being redrawn, creating new Asian security dynamics.

    There was a palpable excitement in India when Prime Minister Narendra Modi jetted off to attend the G-20 summit at Brisbane. This was partly because of the announcement that the PM would be embarking on a bilateral tour of Australia at the completion of the meeting of world leaders, and that he would be addressing the Indian Diaspora in Sydney the very next day, in what was a much anticipated recreation of the Madison Square Garden moment in New York. With only one difference, this time, the gathering of Indian Diaspora was expected to be much more than that was witnessed in Madison Square.

    Other than this, a number of issues came up for discussion, but one that topped the strategic agenda was “maritime security.” Ever since Canberra officially declared its interests in the Indian Ocean last year, there has been speculation in the strategic community about an evolving maritime coalition in the Indian Ocean Region (IOR). Indeed, Australia has in recent years sought to strengthen its nautical posture in the Indian Ocean, reviving its ties with regional states. It is, however, the vigorous pursuit of its relationship with India that has provided evidence of Canberra’s desire to play a larger security role in the IOR, which this time got well promoted by the personal chemistry of the two Prime Ministers.

    In spite of these expected developments, what came out to be most important point of this foreign visit was, the announcement of the next logical step to India’s famous ‘Look East’ Policy, i.e., the ‘Act East’ Policy (a more action oriented strategy, aimed to bolster cooperation with ASEAN in specific and East Asia in General).

    The Prime Minister announced this Policy at the East Asia Summit held in the Myanmarese Capital city of Nay Pyi Taw. “Look East” was introduced in the early 1990s by Sri PV Narasimha Rao. It was endorsed by former Prime Ministers Atal Bihari Vajpayee and Manmohan Singh.

    Act East:

    There has been a serious criticism that India has only been ‘looking’ eastwards, but not pursuing a comprehensive strategy towards Southeast Asian countries, and the ASEAN.

    Today, there is a conscious effort by the foreign ministry not only to ‘look east’, but also to ‘act east’ i.e., to create a more action oriented strategy in harnessing the fruit of development by engaging with East Asia.

    Therefore, India’s bilateral relations with specific countries in Southeast Asia, and its interaction with the ASEAN; along with multiple other regional organisations and initiatives including the ARF and the EAS, highlight its ‘act east’ strategy.

    Along with India moving into Southeast Asia, New Delhi should also take serious measures in bringing the countries east of India close to India – within the prism of economic, cultural, and societal fields

    On economic and trade relations, not all countries to India’s east will have an interest or sufficient capacity to invest in the country but specific nations could be identified, and efforts could be made to attract investment from them. This investment need not necessarily be directly in context of the economic field, but could also cover other sectors such as education and tourism. While Japan, Korea, and Singapore may have adequate resources to invest economically in India, countries like Australia can be approached to invest in education and other sectors.

    New Delhi should also approach other countries in Southeast Asia and East Asia to come to India; historical linkages, tourism, and religion can play a crucial role in attracting some of the countries in the east, starting from Myanmar including Thailand, Indonesia, and Cambodia. An example will be the huge asymmetry between India and Thailand, or India and Cambodia in terms of movement of people.

    Comment

    Since the end of the Cold War, the India-Australia relationship has had several false starts. Maritime cooperation was being discussed in even the early 1990s but accidents intervened – Canberra’s overstated response to the Indian nuclear tests of 1998; a decade later, the clumsy dismantling of the Quadrilateral (the fledgling partnership between the two countries and the United States and Japan); the uranium issue, settled only in late 2011 when Prime Minister Julia Gillard overcame opposition from domestic anti-nuclear lobbies and agreed to sell uranium to India.

    Both countries need to be watchful, lest this history becomes an all-purpose excuse for not showing diplomatic urgency. Neither should problematic episodes become triggers for extreme interpretation. For example, it would be unfair if the legal quagmire and payment delays, Australian contractors have faced, often for no fault of their own, following the 2010 Commonwealth Games in New Delhi were to influence the entirety of Australian business perception of opportunities in India.

    For Australia, the Indian establishment’s dexterity with the English language has been appealing but also misleading. “In the view of some Australian scholars of India,” a Australia-India Taskforce report says, “the elite’s fluency in English has acted as a barrier to deeper Australian familiarity with the country, creating the illusion that understanding Indian languages and culture – unlike their Indonesian, Japanese and Chinese equivalents – is unnecessary”.

    Likewise, the street violence against Indian students in Melbourne and other cities in 2009-10 was deplorable but cannot take away from the fact that Australia remains a welcoming home for thousands of Indian migrants. Authorities in Australia have responded by cracking down on dubious educational institutions, and facilitating those students genuinely seeking education.

    From India’s energy security to its food security, intelligence sharing on terrorism to joint exercises of Special Forces, naval and anti-piracy coordination to constructing a new architecture for the Indo-Pacific (the confluence of the eastern Indian Ocean and the western Pacific), the canvas for Canberra and New Delhi is vast. It awaits an overarching doctrine for India’s Australasia thrust, and political ownership in New Delhi of such a doctrine.

    India- Australia nuclear deal

    • India and Australia signed the civil nuclear deal in September 2014.
    • India and Australia announced completion of procedures for India Australia Civil Nuclear Agreement. With the completion of procedures, including administrative arrangements, the India Australia Civil Nuclear Agreement will enter into force.
    • With this move, India becomes the first country to buy Australian uranium without being a signatory to the international nuclear non-proliferation treaty (NPT).
    • The deal underlines the deepening strategic ties with Australia.
    • Australia has about 40 per cent of the world’s uranium reserves and exports nearly 7,000 tonnes of yellow cake annually.

     

    Trade

    • The bilateral trade between India and Australia, estimated at $15 billion.
    • To strengthen bilateral trade and investment, both counties agreed to conclude a Comprehensive Economic Cooperation Agreement (CEPA) by the end of the year.
    • Australia is pushing for tariff reduction in dairy products, fresh fruit, pharmaceuticals and wines. India wants zero duty on automobile parts, textiles and fresh fruit. India has also demanded greater access in the services sector.

    Defence relation

    • India –Australia both borders the Indian Ocean and has a shared interest in the maintenance of freedom of navigation and trade.
    • Australia recognises India’s critical role in supporting security, stability and prosperity of the Indian Ocean region.
    • Australia and India are committed to working together to enhance maritime cooperation, first formal
    • bilateral naval exercise (AUSINDEX) held off the coast of Visakhapatnam in 2015.
    • People-to-people links through personnel and training exchanges have proved vital to building familiarity between our defence forces.

     

    Multilateral Cooperation

    • India and Australia cooperate in various multilateral fora. Australia supports India’s candidature for a
    • permanent seat in an expanded UN Security Council.
    • Both India and Australia are members of the Commonwealth, IOR-ARC, the ASEAN Regional Forum, the East Asia Summit and the Asia-Pacific partnership on climate and clean development. In 2008, Australia became an observer in the SAARC.

    INDIA AND NEW ZEALAND

    President Pranab Mukherjee paid his first official visit to New Zealand. Mr. Mukherjee’s is the first ever presidential visit from India to New Zealand.

    Outcome of visit

    • President talked about cooperation in agriculture, dairy, food processing, education and skill development as well as high technology between the two countries.
    • During the course of the visit, India and New Zealand also signed a deal that opens the door for direct flights between the two countries with an aim to boost tourism and trade sectors.

    Significance of New Zealand

    • Trade: Bilateral trade between India and New Zealand stood at $ 885 million in 2015, of which Indian exports accounted for $ 429 million in 2015. There is ample scope to enhance bilateral trade. Both countries are in process to finalize free trade agreement (FTA).
    • Indian diaspora: New Zealand is home to more than 170,000 people of Indian origin.
    • Opportunity for skilled migrants from India who can contribute to New Zealand’s economy
    • Higher education: Indian students constitute the second largest number of foreign students in New Zealand.
    • New Zealand supports India’s aspirations for permanent membership of the UN Security Council.
    • New Zealand has great technological abilities in cold storage supply chain management and post—harvest technologies, which are of interest to India.
    • Two nations have “shared stakes” in a peaceful Asia-Pacific region and can successfully work as partners in promoting security and stability there.
    • New Zealand is important country for India’s ‘Act East’ policy.
    • New Zealand has strong influence of the Pacific Island countries

    India and Pacific Islands

    What are Pacific Island Nations (PINs)?

    • These are 14 island countries in Pacific Ocean – Cook Islands, Fiji, Kiribati, Marshall Islands, Micronesia, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu

    Source: Wikipedia

    • These countries range in land area from the largest Papua New Guinea (461,700 sq km) to the smallest Nauru (21 sq km)
    • The size of their population ranges from Papua New Guinea (7.7 million) to Niue (1,500)
    • Development indicators also vary widely with per capita income ranging from USD 27,340 (Cook Islands) to USD 1020 (Papua New Guinea)

    Why study about PINs?

    • On August 21, 2015 India hosted the second edition of Forum for India-Pacific Islands Cooperation (FIPIC) summit in Jaipur
    • All the 14 nations of the group participated in the summit
    • So obviously, this becomes an important topic for exam and you cannot ignore this as an unimportant grouping

    Importance of the Pacific area:

    • Though these countries are relatively small in land area and distant from India, many have large exclusive economic zones (EEZs), and offer promising possibilities for fruitful cooperation
    • The Pacific Ocean is the earth’s largest ocean covering 46% of water surface and 33% of the earth’s total surface, making it larger than the entire earth’s land area
    • It is bounded by 41 sovereign states plus Taiwan, and 22 non-independent territories
    • It is rich in marine resources and accounts for 71% of the world’s ocean fishery catch
    • The Pacific has for long been an area of geostrategic interest for countries such as the US, Japan, China, Russia, Australia, and Indonesia – large economies which lie on its boundary
    • Two developed Pacific Island countries – Australia and New Zealand – have tended to dominate regional cooperation forums such as the Pacific Islands Forum (PIF)

    Issues with PINs:

    • They are dispersed and low populated countries
    • They have logistics problems to develop their economies
    • Less manufacturing activity
    • With climate change and global warming, these countries fear of being drowned or disappeared
    • Their natural resources are being depleted day-by-day – sugar, timber etc.
    • India used to import phosphates from the Nauru Island, which is now being depleted
    • Problems in sugar market due to global vagaries

    External influences:

    #1. Australia: These countries are highly influenced by Australia due to its close proximity – for example, Australia helping the development of natural gas of Papua New Guinea etc.

    #2. China

    • China has significantly expanded its foothold in the region, from increasing business and trade ties to setting up diplomatic missions in each of these countries
    • More than 3,000 Chinese companies are already operating in these Island groups in various businesses.
    • China is now the largest bilateral donor in Fiji and the second largest in the Cook Islands, Papua New Guinea, Samoa, and Tonga
    • Last year, China provided around $2 billion credit to these nations collectively
      6 out of 14 Pacific Islands recognize Taiwan as a legitimate govt of China
    • Taiwan is already holding annual meet with these countries to engage them

    #3. These island groups are forming partnerships with EU and other economic groupings

    Where can India engage?

    #1. UNSC: These 14 nations are supporting India’s attempts to become permanent member of UNSC

    #2. Agriculture:

    • These are agriculture oriented economies
    • Major products- palm oil, sugar, and timber
    • We can do value addition to their products- copra, sugar, timber
    • They are diversifying in oil production and we are short on edible oil so this is a major area to work on
    • India can make use of the mahogany (timber) that is extensively grown in these islands, for getting raw materials for paper industry

    #3. Minerals:

    • These islands have plenty of oil, gas, and minerals in their sea beds
    • For example, the Kiribati islands, they are spread over an area that is bigger than the Indian subcontinent and have rich sources of minerals
    • India can form joint ventures and explore these minerals

    #4. Disaster Management: These islands are frequently affected by natural disasters like typhoons, earthquakes etc. India can help them in disaster management

    #5. Services sector:

    • The other biggest potential area which India can leverage from these islands is the development of services sector – IT, tourism, healthcare and fisheries
    • We can explore tourism options to these isolated beautiful spots
    • Tourism also has an advantage from the fact that there are large number of ethnic Indians in these islands
    • Many of these countries send their nationals to India for education though programmes sponsored by the Indian Council of Cultural Relations

    #6. Energy:

    • India is developing renewable energy and has set a target of 175 GW by 2022. It can help the Pacific Islands in this area and provide energy security
    • We can transplant our experience of A&N islands in establishing isolated energy grids in these countries
    • There has been lot of tree cutting for industrialisation and they are using more diesel for power. We can help them by providing assistance in renewable energy

    #7. Democracy:

    • In the past, these pacific islands have faced a threat to democracy
    • For example- there was a coup in Fiji which overthrew the democratically elected government, there was a civil war in Papua New Guinea
    • In this context, India can serve as a stable and solid partner, as it is one of the largest democracies in the world, so that these islands can have an assured trade and investment relations.

    #8. Ethnicity:

    • Unlike other proximate countries like Australia, India has intimate relations, going beyond exploration of natural resources, with these nations
    • Culturally they are linked to India. For example, Fiji has huge number of Indian ethnic population
    • We should leverage this advantage to engage & establish more intimate relations

    #9. Climate Change: India should fight for their cause in the coming UN Climate Change meetings & should see to it that these islands get enough finances for disaster mitigation

    #10. The Pacific Island groups have enthusiastically welcomed India’s offer in telemedicine, tele-education, space cooperation, fostering democracy and community activities

    #11. These countries are in need of MSME and we have good experience in developing them

    FIPIC:

    • The Forum for India–Pacific Islands Cooperation (FIPIC) was launched during PM’s visit to Fiji in November 2014

    Source: Wikipedia

    • FIPIC includes 14 of the island countries – Cook Islands, Fiji, Kiribati, Marshall Islands, Micronesia, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu

    Why FIPIC?

    • Though these countries are relatively small in land area and distant from India, many have large exclusive economic zones (EEZs), and offer promising possibilities for fruitful cooperation.
    • India’s focus has largely been on the Indian Ocean where it has sought to play a major role and protect its strategic and commercial interests
    • The FIPIC initiative marks a serious effort to expand India’s engagement in the Pacific region
    • At this moment, total annual trade of about $300 million between the Indian and Pacific Island countries, where exports are around $200 million and imports are around $100 million
    • This is a part of India’s extended Act East Policy

    Summits:

    #1. Suva, Fiji:

    • One of the key outcome of the first summit in Suva, Fiji was that top leadership of both India and Pacific Islands decided to meet at a regular interval and an annual summit was instituted in this regard
    • Other areas- visa on arrival for their nationals, funds for small business, line of credit for a co-generation power plant for Fiji, and a special adaptation fund for technical assistance and capacity building for countering global warming

    #2. Jaipur, India:

    Source: Economic Times

    • India announced to convene international conference on blue economy in New Delhi in 2016 and invited all the experts form the island nations
    • Set up Space Application Center, in partnership with ISRO, in any of the 14 countries and friendly port calls by the Indian Navy
    • Pacific leaders have expressed their concerns over climate change and its effect on their respective counties. India also assured them to voice their concerns and appropriate measures at the 2015 United Nations Climate Change Conference (COP 21) in Paris
    • In return all the 14 visiting head of state/government reiterated their support to India’s bid for a permanent memberships at the reformed United Nations Security Council
    • India offered to help the Pacific Islands with their hydrography and coastal surveillance, by engaging the Indian Navy. It would help them have a better understanding of their maritime zone and strengthen security of their EEZs
    • India also announced FIPIC Trade Office at Federation of Indian Chambers of Commerce & Industry (FICCI) to promote Trade & Investment opportunities between India & Pacific Island Countries

    Way ahead:

    • China is already on there and giving large credit, so does it mean India can not build good relations with these nations? No
    • We need to build on our advantages- health tourism, building democratic institutions which they need a lot
    • India’s strong relations with Fiji, which has considerable influence in the region, is a strong point which could help counter the growing Chinese influence
    • Relations with Fiji had improved in India’s favour in the past decade and not only those of Indian origin but also Fijians were friendly towards Indians, which worked to Indian advantage
    • Most of the economies in the region are based on agriculture, fisheries and small-scale industries and India’s capacity in these sectors is even better than Europe and China

    President visit to Papua New Guinea

    President Pranab Mukherjee paid first official visit to Papua New Guinea. This was the first ever visit by an Indian Head of State since India established diplomatic ties with the country in 1975.

    Highlights of the President visit

    • India and Papua New Guinea signed four Memorandum of Understanding (MoU)s in the areas of agriculture, health, information technology and infrastructure.
    • India agreed to provide a line of credit of $100 million to Papua New Guinea for infrastructure projects and signed a pact to set up a ‘Centre of Excellence’ in information technology.
    • India is looking to explore and develop Papua New Guinea’s vast oil and gas resources through joint ventures and investments.
    • Papua New Guinea reiterated its support for India’s claim for permanent membership in the UN Security Council and agreed to expedite a proposed Bilateral Investment Promotion and Protection Agreement (IPPA) to facilitate investments. It announced visa-on-arrival facility for Indian tourists.
    • FIPIC, the Forum for the India-Pacific Islands Cooperation, a multilateral forum launched by Prime Minister Narendra Modi in November 2014.
    • India considers its cooperation with the islands of the Pacific to be a key component of ‘Act East’ policy’.

    INDIAN OCEAN REGION

    INDIA-INDIAN OCEAN REGION (IOR)

    The Indian Ocean covers at least one fifth of the world’s total ocean area and is bounded by Africa and the Arabian Peninsula (known as the western Indian Ocean), India’s coastal waters (the central Indian Ocean), and the Bay of Bengal near Myanmar and Indonesia (the eastern Indian Ocean).

    • It provides critical sea trade routes that connect the Middle East, Africa, and South Asia with the broader Asian continent to the east and Europe to the west.
    • A number of the world’s most important strategic chokepoints, including the Straits of Hormuz and Malacca.

     

    MARITIME SECURITY AND CHALLENGES IN

    THE INDIAN OCEAN REGION

    ‘Terrorism and piracy’, these two headings have taken centre stage particularly due to the impact on mercantile marine trade that is coming under increased pressure as they traverse through high risk areas.

    There is enhanced awareness that Indian Ocean is the focus of the world due to the growing of economies and the dependence of these economies on the sea routes for development and security. So when the security challenges in the Indian Ocean is discussed issues of security which are distinctly different from the conventional security mould has to be discussed. The reference is to do with fisheries and livelihood security, environmental security, search and rescue, marine pollution and other such non glamorous issues.

     

    The Pivot to Asia – US Policy Shift

    The recalibration of the US policy which has orchestrated a policy of pivot to Asia has its own ramifications in the region.

    With the rise of China and its increased assertiveness, US appears to be engaging with Asian countries in all spheres. In addition to the traditional partners in the Asia Pacific, namely, Japan, South Korea, Phillippines, Australia, New Zealand and other countries, there has been greater engagement in South Asia particularly with India.

    If Pakistan despite all the differences is still considered a reluctant tactical ally in the war against Taliban in Afghanistan, India is being looked at as an important future strategic partner with enhanced interaction in many spheres, notably in defence and energy security.

     

    South China Sea- Issues of Mistrust and CBM- ASEAN

    The east west traffic that passes from the South China Sea to the Indian Ocean and vice-versa must pass through the Straits of Malacca till alternate routes are proven. The spin offs of this aggressive posturing will see the ripple effects in the Indian Ocean which provides the linkages to forces that may be interested in accessing the hot spots through the Malacca Straits. From the point of China, as a nation which carries most of its goods on its own shipping fleet, it would be definitely concerned about and security of its vessels which are moving through the Indian Ocean.

    Growing Economies in the Region and their Interplay

    The increased economic engagement has provided capable and strong economies such as China to increase their share of investments in various mega projects and infrastructure in many countries around the world in general and the Asia Pacific in particular.

    The classic examples are about China’s investment in Gwadar in Pakistan, Hambanthota in Sri Lanka, Sitwe in Myanmar, and Chittagong in Bangladesh. While the initial intent is economic engagement; it is clear that such investments are not purely commercial. China in return will expect to be supported in its hour of need to turn round and logistically support its naval units which have increased interest in the Indian Ocean Region.

    The challenge for South Asia and particularly India is to mange this Chinese advances in to the Indian Ocean and prepare for surprises.

    Tsunami

    After the devastating effect of tsunami in India and our neighbourhood, India and others have initiated various measures for setting up warning systems and also to have mechanisms for disaster management.

    The Tsunami last year in Japan has only brought out the vulnerability of the total system when faced with natural disasters of the magnitude faced at that time coupled with human/technical failures. The need therefore is for drawing up robust contingency plans and to bring in all the players from the region that would earmark units and rehearse their role at national and regional levels during both man-made and natural catastrophe. This will constitute a greater challenge in times of calamity due to cultural, linguistic and procedural differences.

    Piracy off the Coast of Somalia

    The incidents of piracy went up phenomenally between 2008 and 2011 by adventurous pirates, supported and backed by land based sophisticated teams that are running the enterprise on a business model.

    The estimated cost of piracy is in the region of 7 to 11 billion of US dollars annually. Due to sustained efforts by the navies of the world and other deterrent actions by ships, the first half of 2012 has seen a noticeable dip in the number of attacks and has also brought down the number of sea farers held hostage.

    However, the world has not seen the end of piracy and sustained efforts are still necessary. A lot more effort is needed in Somalia where the root causes lie. The bearing on the Indian Ocean Region is the increased presence of extra regional players who are present in large numbers. This has facilitated coordinated action by some of the western navies though; there are still a large number of navies who are operating independently in a loose structure.

    The initiative to get China, India, South Korea and Japan to work together is a welcome sign that will enable the navies of the Asia Pacific to work together and learn to operate together.

    Neighbourhood Issues and Terrorism

    The challenges of preparing for preventing acts of maritime terrorist activity have become acute following the Mumbai terror attacks in November 2008. The seaborne terrorists who landed in Mumbai killed over 166 innocent civilians including foreigners.

    A slew of measures implemented include placing the Navy at the apex of the maritime security architecture, commissioning of the National Automatic Identification System (NAIS), use of light houses for fitting radars to provide seamless information to the Joint operation rooms, equipping and training the fishermen to be the eyes and ears of the fleet, establishing of Vessel Traffic Management Systems, installation of Long Range Identification and Tracking (LRIT) radars, revamping of the intelligence apparatus to bring about greater degree of coordination amongst the multiple agencies operating in the same medium, The commissioning of the National Intelligence Agency to investigate and prevent acts of terrorism, the setting up of regional hubs for National Special Group of commandos, setting up of the National Technical Research Organisation (NTRO), creation of two new CG commands in Gujrat and West Bengal, commissioning of new Coast Guard Stations and Coastal Security Groups manned by the State Maritime Police, induction of additional Air Cushion Vehicles for the Coast Guards, commissioning of additional naval stations in the island groups on both flanks, conducting of regular table top and real time exercises including all the stake holders and such other measures.

    Despite the initiation of all the above measures, there is still a lot to be done to have a robust maritime security architecture that will prevent surprises at sea by proactive action and cooperation with other agencies.

    Energy Routes – SLOC Vulnerability; Malacca Straits/Straits of Hormuz dependence

    The growing economies depend on the seas for getting coal, oil, gas and other energy products to sustain their economies. This also brings in the threat of these vessels and products being targeted by both pirates and Non State Actors.

    The example of China, India, Australia, Malaysia, Japan, South Korea and others from the region who have dispatched warships to protect the international shipping operating in the global commons is a clear indication that the security challenges would grow manifold.

    The close proximity of ships from different nations also needs to be managed by a sound architecture that does not allow mistakes and misunderstandings during normal patrol missions. The challenge therefore is for establishing clear cut operating procedures, protocols and communication methods to prevent incidents while engagement in peace time missions becomes critical.

    The Straits of Hormuz and the Red Sea on the west and the Malacca Straits on the east of India are critical arteries that facilitate the free flow of goods both ways. With the constant increase in the number of vessels going up each year issues of traffic separation, monitoring the traffic for both safety and security would engage the attention of the planners.

    There would be greater use of technology to facilitate establishing of CISR architecture. There are issues of financing and funding of such means and methods for protection of the globally common issues. The Straits of Hormuz is on boil with the increased presence of US ships and the threat of an all out war with Iran.

    In the past, Iran has threatened to close down the Strait of Hormuz and has challenged US as a result of the spat over the nuclearisation of Iran. Any such action by Iran will precipitate stern action by US and its allies and will lead to a war in the Straits that supports global traffic.

    The resultant inevitable disruption of the transportation chain will have serious ramifications for the countries that are dependent on the supply of products through the Straits of Hormuz.

    Fisheries and Livelihood Issues

    The period after the defeat of the LTTE has seen increased incidence of the Indian fishermen coming in to conflict with their counterparts in Sri Lanka and also with the SL Navy. There have been allegations and counter allegations about use of excessive force and even fire arms to prevent fishermen from poaching.

    From the Indian fishermen point of view, historically, the contested waters belonged to India and they have every right to fish in the traditional waters. Having demarcated the maritime boundary with Sri Lanka in 1974, wherein, Kacchativu was gifted to Sri Lanka, the Indian fishermen have been debarred from fishing around that rich fishing grounds around that Island leading to skirmishes and incidents.

    It is not that only Indian fishermen are guilty of tresspassing, the Indian Ocean has witnessed intrusions by fishermen of Pakistan, Bangladesh, Thailand, Myanmar and Sri Lanka who do cross in to each other’s territory while looking for fish. This will remain a great challenge with security overtones.

    With dwindling stocks, and irresponsible fishing in different parts of the world, conflicts and clashes would be the order of the day and there is a need to resolve this by bilateral agreements and joint monitoring of the areas allocated for fishing.

    The Coast Guards or their counter parts in this part of the world will need to work out modalities to ensure that the situation does not go out of hand. The establishing of a hot line some years ago between the Coast Guard Headquarter in India and the Maritime Security Agency in Pakistan has helped in ensuring that the fishermen are not detained unnecessarily in the garb of security. Similar arrangements are required with other maritime neighbours.

    Environmental Security

    With some of the recent incidents of collision and grounding particularly off Mumbai, the fragile fishing grounds and Indian coast line has been exposed to the dangers of increased unmonitored coastal traffic and the resultant effects.

    The absence of credible interfaced technology to monitor, regulate and control the movement of vessels of all size has remained an area of concern for maritime security agencies, ports, Law Enforcement agencies and other stake holders.

    Also, the much touted word Maritime Domain Awareness is here to stay but there is lot more that needs to be done to achieve even minimum levels of MDA which is critical to deterrent operations at sea.

    Role of India

    • The Indian Navy played a pivotal role in containing piracy on the high seas and is positioning itself as the “net security provider” in the broader Indian Ocean region with capacity building, joint exercises and increased multilateral exchanges.
    • India has been reaching out to the smaller Indian Ocean island nations through various Maritime Domain Awareness (MDA) exercises.
    • Domain Awareness (MDA) exercises includes :
    1.  Search and Rescue (SAR) support.
    2. Oil pollution response exercises.
    3. Assistance in legal matters.
    • Indian navy has supported countries in Indian Ocean region (IOR) such as Sri Lanka, Mauritius, Maldives and Seychelles with training, hydrographic surveys, surveillance operations and counter-terror patrols.
    • India and China are locked in efforts to widen their respective spheres of influence in the strategically vital Indian Ocean.
    • Given that the Indian Ocean channels carry two-thirds of the world’s oil shipments, a third of the bulk cargo and half of all container traffic, the region’s strategic significance is unquestionable. Also to counter china’s presence in Indian Ocean require strategic relation with our extended neighbourhood.

     

    PRIME MINISTER VISIT OF INDIA OCEAN COUNTRIES

    PM visited Indian Ocean counties to enhance economic and security cooperation. This highlights the renewed focus by India to take lead role in the region. China has in recent times made significant investment in infrastructure projects in these nations causing concern.

    • India’s role as the “net security provider” in the Indian Ocean region received a major boost when Prime Minister Narendra Modi visited three India Ocean nations of Seychelles, Mauritius and Sri Lanka.
    • India invited Seychelles and Mauritius to join the existing maritime security cooperation arrangement among India, the Maldives and Sri Lanka.
    • India seeks a future for Indian Ocean that lives up to the name of ‘SAGAR – Security and Growth for All in the Region’.
    • India is helping Indian Ocean littorals as part of capacity and capability enhancement in strengthening their maritime domain awareness capabilities.
    • Mr. Modi said those who lived in the region had the primary responsibility for peace, stability and prosperity in the Indian Ocean.
    • Mr. Modi said that our goal is to seek a climate of trust and transparency; respect for international maritime rules and norms by all countries; sensitivity to each other’s interests; peaceful resolution of maritime security issues; and increase in maritime cooperation.

     

    India and Mauritius relations

    India and Mauritius share unique bonds based on our shared cultural heritage and traditions. Indo-Mauritians form about 70% of the country’s population. Mauritius celebrates its National Day on March 12 as a mark of respect to Mahatma Gandhi, who began his Dandi march on this day in 1930.

    • India has extended a $500-million Line of Credit for development or security projects that Mauritius will decide on.
    • Mauritius has a vast 2.3 million sq km of Exclusive Economic Zone (EEZ).
    • An India-built naval patrol vessel ‘Barracuda’ for Mauritius was commissioned by Prime Minister Narendra Modi who said it will make the Indian Ocean “more safer and secure.”
    • Mauritius by virtue of its strategic location is recognised as a hub of maritime activities in Indian Ocean. The induction of coastal patrol vessel was yet another step for better control of its large assets besides helping in policing transnational crimes like piracy and bridging the communication gaps among its various islands.

    India and Seychelles relations

    • Prime Minister became the first Indian PM to visit Seychelles after 34 years. Seychelles is one of the largest recipients of Indian assistance in this area.
    • The close relationship between the two countries is based on the twin planks of maritime security and development cooperation.
    • India has been involved with Seychelles in helping bolster its need for maritime security as it has a large Exclusive Economic Zone (EEZ) of 1.3 million square kilometers.
    • Development cooperation encompasses capacity building where more than one percent of the Seychelles’ population is trained under ITEC, provision of patrol vessels, hydrographic surveys etc besides cooperation in counter piracy and counter terrorism in high seas, which is critical for India’s extended maritime security as well.
    • There is a tradition of bilateral development cooperation in health, science & technology, renewable energy, providing advisors in critical areas and in bilateral exercises.
    • Seychelles is a part of the Pan African e-Network project between India and the African Union.

     

    Why is Seychelles Important for India?

    • India is trying to influence Indian Ocean Region by extending economic, military and diplomatic cooperation and through strategic partnership.
    • From 2005, India has embarked upon a policy to engage four western Indian Ocean island nations and Seychelles forms a crucial part of it.
    • Apart from its strategic location on international sea lanes of communication, Seychelles is a leader among SIDS group (Small Island Developing States) which has multifold areas of convergence with India.
    • It is a leader in advancing the concept of ‘blue economy’, which covers huge panoply of aspects like environment, hydrocarbons, marine economy, renewable energy and exploration of continental shelf.

    Defence cooperation

    • India secured a pact to develop infrastructure of Assumption Island in Seychelles, which gives a strong boost to this partnership. Spread over 11 sq.kms, it is strategically located in the Indian Ocean, north of Madagascar
    • Exercise Lamitye- 2016: The Seventh Joint Military Training Exercise between the Indian Army and the Seychelles People’s Defence Forces (SPDF) – LAMITYE 2016 was conducted at Seychelles Defence Academy (SDA), Victoria.
    • Navy’s aircraft on mission in Seychelles: Indian navy has for the first time deployed maritime reconnaissance aircraft to Seychelles for surveillance of the island nation’s Exclusive Economic Zone.

    China’s Indian Ocean strategy: Implications for India

    The Chinese maneuvering in the Indian Ocean — part of China’s larger plan to project power in the Middle East, Africa and Europe — aims to challenge America’s sway and chip away at India’s natural-geographic advantage. Here is a look at china’s policy in the Indian Ocean and how does it have implication on Indian interests in the region?

    Introduction

    The Indian Ocean is the world’s third largest body of water and has become a growing area of competition between China and India.

    The two regional powers’ moves to exert influence in the ocean include deep-water port development in littoral states and military patrols. Though experts say the probability of military conflict between China and India remains low, escalated activities (such as port development and military exercises) and rhetoric could endanger stability in a critical region for global trade flows. 

    Importance of Indian Ocean

    Indian Ocean Region is important for the various reasons. Following are few important reasons:

    • Trade- Indian Ocean contains the trade route to Africa, Europe, West Asia, Central Asia, ASEAN and Australia.
    • Energy Security- 70% of India’s oil import comes from West Asia. It is important trade route for energy access.
    •  More than half the world’s armed conflicts are presently located in the Indian Ocean region, while the waters are also home to continually evolving strategic developments including the competing rises of China and India, potential nuclear confrontation between India and Pakistan, the US interventions in Iraq and Afghanistan, Islamist terrorism, growing incidence of piracy in and around the Horn of Africa, and management of diminishing fishery resources.
    • Poly metallic nodules at Ocean floor provide vital metals extraction sources from ocean.

    Importance of Indian Ocean to India:

    • 7,500km coastline linking India to Indian Ocean.
    • 80% of India’s trade is through Sea route passes through Indian Ocean.
    • 85% of oil and gas imported comes through Indian Ocean into the country.
    • Fishing and tourism depends on it due to huge marine re-courses it spreads prosperity in coastal plains of India. 
    • Vital for managing better relation with neighbours like Vietnam, , Malaysia, Singapore, Thailand, Sri-Lanka, Maldives, Seychelles, Mauritius, Iran, etc.

    China’s policy in Indian Ocean

    China’s one belt one road project, port city development in Sri lanka, frequent visiting of China’s marine ship in Indian ocean is a big worry for India. 

         1.One belt one road initiative

    • The One Belt One Road initiative is the centre piece of China’s foreign policy and domestic economic strategy. It aims to rejuvenate ancient trade routes–Silk Routes–which will open up markets within and beyond the region.
    • Through this initiative, China’s plan is to construct roads, railways, ports, and other infrastructure across Asia and beyond to bind its economy more tightly to the rest of the world.
      One belt one road initiative
      source

      2.String of pearl theory

    • It refers to the network of Chinese military and commercial facilities and relationships along its sea lines of communication, which extend from the Chinese mainland to Port Sudan.
    • The sea lines run through several major maritime choke points such as the Strait of Mandeb, the Strait of Malacca, the Strait of Hormuz, and the Lombok Strait as well as other strategic maritime centers in Pakistan, Sri Lanka, Bangladesh, the Maldives, and Somalia.
      China’s string of pearls and maritime silk road

       

       

      source

       

       

      3. Getting closer to Pakistan 

    • In China’s ambitions to convert the Indian Ocean into a ‘Chinese Ocean‘, the lead major accomplice role has been assigned by China to Pakistan.
    • China has assigned two major roles to Pakistan in this direction. The first focuses on Pakistan facilitating the Chinese development of the strategically located Gwadar Port on Baluchistan’s Makran Coast in close vicinity of the Hormuz Straits as a virtually exclusive Chinese Navy facility, though currently touted as a commercial venture.
    • China’s second role being assigned to Pakistan is to keep Indian Navy’s Western Fleet from exercising sea-control of the Arabian Sea by building-up Pakistan Navy’s submarine fleet as a focussed Chinese attention.

      4. China getting closer to Sri Lanka

    • After a PLA-Navy submarine docked twice in Colombo, Sri Lanka last year, there is anxiety among Indian analysts of a renewed thrust by China for a permanent military presence in the Indian Ocean. 

    What does China’s rise mean for India? 

    • Security dilemmas between China and Japan; China and India; China and Vietnam; and others will intensify due to China’s presence. In other words, the environment in which India pursues its interests will get more complex. 
    • There are troubling questions about the motive behind China’s actions and other maritime infrastructure projects in the Indo-Pacific region.
    • China’s pitch for benign security in the Indian Ocean appears to be an attempt to convince Indian Ocean states of the need for Chinese support and security arrangements. 
    • There are concerns being raised about China’s  intention of making maritime power central to achieving Chinese dominance in Asia.

     

    How can Indian secure itself in the region?

    • Participate in all regional connectivity – Outside OBOR, India must participate in all regional connectivity like INSTC, Ashgabat agreement etc
    • Harness Cultural links –We have rich cultural linkages with west and Central Asia countries. We must use it to establish relation economic, political and military relations. Through this our “Project Mausam” will also get a boost.
    • Soft Power –We have reputation of sharing developmental benefits, unlike China. This image should be harnessed to win more and more projects in Africa, Maldives, Sri Lanka and other littoral countries.
    • Naval Exercises – Joint exercises in Indian Ocean with other powers like U.S, Japan and Australia should be done to prevent hegemony of any one nation.
    • Military capability –Research ties with U.S, Russia and Israel should be beefed up and procurement with technology transfer have to be adopted.
    • Regional Growth: prosperity & security in the IO region should be increased through MAUSAM, SAGAR.
    • Blue Economy: development of Blue Economy should be extended to Mauritius, Sri Lanka, Maldives.
    • Revive Indian ocean rim association

    Way ahead

    • As far as interests of India in Indian Ocean are concerned, it is important for India from multiple point of view. Strategically, trade, security etc.
    • In the recent years, India has signed several bilateral agreements with countries i.e. Maldives, Seychelles, Sri Lanka, in order to secure its interests in the region.
    • Though India may not have huge reserve as China and cannot do the scale of investment as it China does. But trust, good image, relations and soft power that India has developed will go a long way in countering possible threat by China.

     

  • Foreign Policy Watch: India-Myanmar

    India and Myanmar relations: Change in dynamics by democratic triumph

    After decades of struggle, finally democracy triumphed over military junta and Myanmar parliament enters democratic era after 54 years of military rule. It’s time to glance over India-Myanmar relations and how India will be benefited from such stable democratic government.

    India and Myanmar have traditionally had much in common, with cultural, historical, ethnic and religious ties, in addition to sharing a long geographical land border and maritime boundary in the Bay of Bengal. Let’s see it in brief!

    How did India and Myanmar engagement begin ?

    • Myanmar is India’s bridge to east, and an important ally for growing its regional power.
    • India and Myanmar’s relationship officially got underway after the Treaty of Friendship was signed in 1951.
    • For many years, India did not open up to the authoritarian regime, and it was only over a period of time that India started engaging with the military junta of Myanmar.
    • The region’s focus has revolved around the SAARC countries and China, Myanmar is becoming increasingly important for India in both a strategic and economic context.

    What about bilateral trade ties?

    • Bilateral trade has grown from $12.4 million in 1980-81 to $2.18 billion in 2013-14.
    • Agricultural items like beans and pulses and forest based products make up nearly 90 percent of India’s imports.
    • Myanmar is also the beneficiary of a duty-free tariff preference scheme for least developed countries (LDCs).
    • Both countries also signed a border trade agreement in 1994 and have 2 trade points along their 1,643 km border.
    • India has also promoted some trade events such as the India Product Show 2012, which represented 19 Indian companies.

    But, How shared cultural links promote unique relations between both countries?

    • The two countries have shared cultural exchanges through various cultural troupes.
    • One such exchange was in 2009 when Myanmar sent a 13 member student group that attended a SAARC cultural festival in India.
    • This was followed by another major event at which the Indian embassy in Yangon organized the annual Indian Film Festival, which is a major event on the Yangon cultural calendar.

    Does India have historical bond with Myanmar?

    • Yes! Yangon was once a center for India’s independence struggle.
    • The Indian National Army (INA), formed by Indian nationalists during World War II in 1942 with the motto of Ittehad, Itmad aur Qurbani (Unity, Faith and Sacrifice).
    • Comprised over 40,000 soldiers, who fought valiantly against the British imperialist forces.
    • Netaji Subhas Chandra Bose became leader of the INA in 1943 and undertook a groundbreaking march towards Indian territories from Burmese soil with the aim of achieving Indian independence.<This time we can expect question on Netaji and his work, as we know current happenings about Netaji’s files declassified>
    • General Aung San, Burma’s independence hero, was a close friend of Netaji, the supreme commander of the INA.
    • That friendship was reflected in cordial relationship between the soldiers of the INA and their counterparts in the Burmese National Army (BNA).
    • So, it’s good to use this historical bond for building more coherent and strong relations with Myanmar.

    How Myanmar is Strategically significant to India?

    • Myanmar is strategically important to India as it is the only ASEAN country that shares a land border with India.
    • It is also the only country that can act as a link between India and ASEAN.
    • Myanmar is India’s gateway to Southeast Asia and could be the required impetus to realize India’s Look East Policy.
    • India has also decided to upgrade the Kalewa-Yargyi road segment to highway standard.
    • Myanmar would develop the Yargyi-Monywa portion, and this would help to connect Moreh in India to Mae Sot in Thailand via Myanmar.
    • This in turn would improve India’s connectivity and relationship with both Myanmar and Thailand.

    How can India become regional pivot in Asia?

    • If India is to become an assertive regional player in Asia, it has to work toward developing policies that would improve and strengthen it domestically.
    • This will encourage more confidence in its ability to lead the region and be an important global player.
    • Competition with China should also be considered and taken seriously. As China’s growing influence in the region would lead to a more one-sided dynamic in the region.
    • China has asserted itself through its soft power as well as through its trade and economic relations with Myanmar by taking up large infrastructure projects in the country.
    • India on the other hand needs to use its soft power more effectively, and at the same time strengthen itself domestically and regionally.

    What are advantages that India has over China with regard to Myanmar?

    • One is the democratic process, which results in different governments at the center and states through free and fair elections.
    • There is also the respect for institutions that are strong enough to hold the country together.
    • Finally, cooperation in different multilateral forums such as ASEAN and BIMSTEC strengthen the relationship between the 2 countries.
    • Apart from these reasons, India has sent a clear signal that while economic ties are important, it is keen to build a holistic relationship and is prepared to assist in institution building in Myanmar.

    What is the significance of Connectivity in India-Myanmar Relations? 

    <How North-Eastern region can play vital role in this?>

    • Myanmar’s vast oil and natural gas reserves and other resources make it a natural partner for many countries in the world.
    • India, being its next door neighbour, cannot be indifferent to this reality.
    • Besides, geo-political considerations, historical and civilizational links, and the ethnic overlap across their borders, have all come together to make India’s North-East the land bridge between the South and South-East Asia through Myanmar.
    • The 1,640 km-long border between Myanmar and the Indian states of Arunachal Pradesh, Nagaland, Manipur and Mizoram signifies the importance of this eastern neighbour for India.
    • India expects to reap various economic benefits by bolstering bilateral trade and investment, which critically depends upon better connectivity in the region.

    How bilateral cooperation agreement gives impetus to India’s Look-East Policy?

    • The strategic location of Myanmar is pivotal to India in reaching out to the economically vibrant South-East Asian countries.
    • India’s Look-East Policy envisages building infrastructure and expanding the transportation network including railroads, aimed at furthering surface connectivity in the region.
    • It is recognized that in addition to more economic contacts, such connectivity will promote social stability in the region by facilitating people-to-people contact amongst trans-border ethnic groups.
    • It is expected that insurgent outfits would lose their recruitment base once the local resources begin to be exploited and employment is generated leading to overall development. 
    • Concrete economic benefits are expected to come up in the region with establishment of border haats.
    • In addition, internal trade routes have the potential to enhance accessibility to sub-regional markets that connect Bangladesh, Myanmar and Bhutan.

    Way forward

    • The basic foundation for the relationship between India and Myanmar has been laid by previous governments, the onus is on the present Indian administration to demonstrate that it can take the relationship to a higher level.
    • India can become a strong regional player through a more proactive approach, cement India’s place in the region and grow into a powerful, global country.

     

     

    Published with inputs from Arun
  • Foreign Policy Watch: India-Pacific Island Nations

    What are Pacific Island Nations (PINs)?

    • These are 14 island countries in Pacific Ocean – Cook Islands, Fiji, Kiribati, Marshall Islands, Micronesia, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu

     

    • These countries range in land area from the largest Papua New Guinea (461,700 sq km) to the smallest Nauru (21 sq km)
    • The size of their population ranges from Papua New Guinea (7.7 million) to Niue (1,500)
    • Development indicators also vary widely with per capita income ranging from USD 27,340 (Cook Islands) to USD 1020 (Papua New Guinea)

    Why study about PINs?

    • On August 21, 2015 India hosted the second edition of Forum for India-Pacific Islands Cooperation (FIPIC) summit in Jaipur
    • All the 14 nations of the group participated in the summit
    • So obviously, this becomes an important topic for exam and you cannot ignore this as an unimportant grouping

    Importance of the Pacific area:

    • Though these countries are relatively small in land area and distant from India, many have large exclusive economic zones (EEZs), and offer promising possibilities for fruitful cooperation
    • The Pacific Ocean is the earth’s largest ocean covering 46% of water surface and 33% of the earth’s total surface, making it larger than the entire earth’s land area
    • It is bounded by 41 sovereign states plus Taiwan, and 22 non-independent territories
    • It is rich in marine resources and accounts for 71% of the world’s ocean fishery catch
    • The Pacific has for long been an area of geostrategic interest for countries such as the US, Japan, China, Russia, Australia, and Indonesia – large economies which lie on its boundary
    • Two developed Pacific Island countries – Australia and New Zealand – have tended to dominate regional cooperation forums such as the Pacific Islands Forum (PIF)

    Issues with PINs:

    • They are dispersed and low populated countries
    • They have logistics problems to develop their economies
    • Less manufacturing activity
    • With climate change and global warming, these countries fear of being drowned or disappeared
    • Their natural resources are being depleted day-by-day – sugar, timber etc.
    • India used to import phosphates from the Nauru Island, which is now being depleted
    • Problems in sugar market due to global vagaries

    External influences:

    #1. Australia: These countries are highly influenced by Australia due to its close proximity – for example, Australia helping the development of natural gas of Papua New Guinea etc.

    #2. China

    • China has significantly expanded its foothold in the region, from increasing business and trade ties to setting up diplomatic missions in each of these countries
    • More than 3,000 Chinese companies are already operating in these Island groups in various businesses.
    • China is now the largest bilateral donor in Fiji and the second largest in the Cook Islands, Papua New Guinea, Samoa, and Tonga
    • Last year, China provided around $2 billion credit to these nations collectively
      6 out of 14 Pacific Islands recognize Taiwan as a legitimate govt of China
    • Taiwan is already holding annual meet with these countries to engage them

    #3. These island groups are forming partnerships with EU and other economic groupings

    Where can India engage?

    #1. UNSC: These 14 nations are supporting India’s attempts to become permanent member of UNSC

    #2. Agriculture:

    • These are agriculture oriented economies
    • Major products- palm oil, sugar, and timber
    • We can do value addition to their products- copra, sugar, timber
    • They are diversifying in oil production and we are short on edible oil so this is a major area to work on
    • India can make use of the mahogany (timber) that is extensively grown in these islands, for getting raw materials for paper industry

    #3. Minerals:

    • These islands have plenty of oil, gas, and minerals in their sea beds
    • For example, the Kiribati islands, they are spread over an area that is bigger than the Indian subcontinent and have rich sources of minerals
    • India can form joint ventures and explore these minerals

    #4. Disaster Management: These islands are frequently affected by natural disasters like typhoons, earthquakes etc. India can help them in disaster management

    #5. Services sector:

    • The other biggest potential area which India can leverage from these islands is the development of services sector – IT, tourism, healthcare and fisheries
    • We can explore tourism options to these isolated beautiful spots
    • Tourism also has an advantage from the fact that there are large number of ethnic Indians in these islands
    • Many of these countries send their nationals to India for education though programmes sponsored by the Indian Council of Cultural Relations

    #6. Energy:

    • India is developing renewable energy and has set a target of 175 GW by 2022. It can help the Pacific Islands in this area and provide energy security
    • We can transplant our experience of A&N islands in establishing isolated energy grids in these countries
    • There has been lot of tree cutting for industrialisation and they are using more diesel for power. We can help them by providing assistance in renewable energy

    #7. Democracy:

    • In the past, these pacific islands have faced a threat to democracy
    • For example- there was a coup in Fiji which overthrew the democratically elected government, there was a civil war in Papua New Guinea
    • In this context, India can serve as a stable and solid partner, as it is one of the largest democracies in the world, so that these islands can have an assured trade and investment relations.

    #8. Ethnicity:

    • Unlike other proximate countries like Australia, India has intimate relations, going beyond exploration of natural resources, with these nations
    • Culturally they are linked to India. For example, Fiji has huge number of Indian ethnic population
    • We should leverage this advantage to engage & establish more intimate relations

    #9. Climate Change: India should fight for their cause in the coming UN Climate Change meetings & should see to it that these islands get enough finances for disaster mitigation

    #10. The Pacific Island groups have enthusiastically welcomed India’s offer in telemedicine, tele-education, space cooperation, fostering democracy and community activities

    #11. These countries are in need of MSME and we have good experience in developing them

    FIPIC:

    • The Forum for India–Pacific Islands Cooperation (FIPIC) was launched during PM’s visit to Fiji in November 2014

     

    • FIPIC includes 14 of the island countries – Cook Islands, Fiji, Kiribati, Marshall Islands, Micronesia, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu

    Why FIPIC?

    • Though these countries are relatively small in land area and distant from India, many have large exclusive economic zones (EEZs), and offer promising possibilities for fruitful cooperation.
    • India’s focus has largely been on the Indian Ocean where it has sought to play a major role and protect its strategic and commercial interests
    • The FIPIC initiative marks a serious effort to expand India’s engagement in the Pacific region
    • At this moment, total annual trade of about $300 million between the Indian and Pacific Island countries, where exports are around $200 million and imports are around $100 million
    • This is a part of India’s extended Act East Policy

    Summits:

    #1. Suva, Fiji:

    • One of the key outcome of the first summit in Suva, Fiji was that top leadership of both India and Pacific Islands decided to meet at a regular interval and an annual summit was instituted in this regard
    • Other areas- visa on arrival for their nationals, funds for small business, line of credit for a co-generation power plant for Fiji, and a special adaptation fund for technical assistance and capacity building for countering global warming

    #2. Jaipur, India:

    • India announced to convene international conference on blue economy in New Delhi in 2016 and invited all the experts form the island nations
    • Set up Space Application Center, in partnership with ISRO, in any of the 14 countries and friendly port calls by the Indian Navy
    • Pacific leaders have expressed their concerns over climate change and its effect on their respective counties. India also assured them to voice their concerns and appropriate measures at the 2015 United Nations Climate Change Conference (COP 21) in Paris
    • In return all the 14 visiting head of state/government reiterated their support to India’s bid for a permanent memberships at the reformed United Nations Security Council
    • India offered to help the Pacific Islands with their hydrography and coastal surveillance, by engaging the Indian Navy. It would help them have a better understanding of their maritime zone and strengthen security of their EEZs
    • India also announced FIPIC Trade Office at Federation of Indian Chambers of Commerce & Industry (FICCI) to promote Trade & Investment opportunities between India & Pacific Island Countries

    Way ahead:

    • China is already on there and giving large credit, so does it mean India can not build good relations with these nations? No
    • We need to build on our advantages- health tourism, building democratic institutions which they need a lot
    • India’s strong relations with Fiji, which has considerable influence in the region, is a strong point which could help counter the growing Chinese influence
    • Relations with Fiji had improved in India’s favour in the past decade and not only those of Indian origin but also Fijians were friendly towards Indians, which worked to Indian advantage
    • Most of the economies in the region are based on agriculture, fisheries and small-scale industries and India’s capacity in these sectors is even better than Europe and China

    Published with inputs from Swapnil
  • Foreign Policy Watch: India-Russia

    India-Russia relations : Momentum in transforming Strategic Partnership

     

    In late December, Indian Prime Minister made his first state visit to Russia to take part in the 16th annual bilateral summit. PM Modi and Russian President Vladimir Putin used the summit to review bilateral ties across a number of areas. Let’s glance over revamped relations of India-Russia!


     

    Can we have some background of bonding legacy?

    • Relations with Russia are a key pillar of India’s foreign policy, and Russia has been a longstanding time-tested partner of India.
    • India & Russia signed “Declaration on the India-Russia Strategic Partnership” in October 2000.
    • Under the Strategic Partnership, several institutionalized dialogue mechanisms operate at both political and official levels to ensure regular interaction and follow up on cooperation activities.
    • During the visit of the Russian President to India in December 2010, the Strategic Partnership was elevated to the level of a “Special and Privileged Strategic Partnership.

    Let’s dive into the PM’s visit for bilateral summit in Russia?

    • With the signing of sixteen agreements, this is being seen as very significant in sustaining and expanding India-Russia ties.
    • One major step taken is a deepening of India’s defense partnership with Russia for Make in India.
    • On the eve of Modi’s visit to Russia, the Indian government announced the purchase of five S-400 supersonic air defense systems from Russia, costing around $6 billion.
    • For instance, the two sides agreed that the Kamov 226 helicopter would be manufactured in India.

    How will bilateral partnership boost Make in India programme?

    • India and Russia agreed to strengthen the defense partnership in line with the “Make in India” program. So while only the public sector has been involved in defense cooperation between the two countries to date.
    • The new initiatives will encourage joint manufacturing of defense products in India and motivate the private sector to play a role in developing a strong defense manufacturing base in India.
    • It should be emphasized that “Make in India” also aims at having India emerge as an essential player in the global defense market.
    • India is forecast to spend $250 billion over the next decade upgrading its military and Russia wants to seize the opportunity to become a major part of this mission, expressing its readiness to work jointly with India on defense manufacturing.

    So, How does economic and trade cooperation matters in economic growth?

    • Enhancing trade and economic cooperation between India and Russia is a key priority for the two governments.
    • On the economic front, India and Russia decided to institutionalize the CEO’s Forum, which will meet twice a year – once in India and the other in Russia.
    • During 15th Annual Summit, the two leaders set a target of US$30 billion bilateral trade by 2025.
    • Hydrocarbons is an active area for exploring cooperation between the two countries.
    • In May 2014, ONGC and Rosneft signed an MoU for bilateral cooperation in subsurface surveys, exploration, appraisal and hydrocarbons production in the offshore Arctic region of Russia.
    • In September 2015, OVL signed an agreement with Rosneft to acquire 15% stakes in Vankorneft project.

     

    Did you know about India-Eurasian Economic Union FTA?

    • Moscow is a gateway for India to Central Asia.
    • In this regard a significant move by PM Modi was the effort to move forward on the India-Eurasian Economic Union (EEU) Free Trade Agreement (FTA).
    • The EEU FTA will introduce the free movement of goods, capital, services and people-people contacts and provides for common transport, agriculture and energy policies, with provisions for a single currency and greater integration in the future.
    • The FTA between India and the EEU comprises of Russia, Belarus, Armenia, Kyrgyzstan, and Kazakhstan.
    • It offers India access to a huge market with a population of over 180 million, with a joint GDP of an estimated $2.7 trillion.
    • As Russia tries to re-calibrate its economic orientation towards the Asian region, India, as one of the fastest growing G20 economies can be a significant partner for Russia.

    Shall we move into Political Relations?

    • Annual Summit meeting is the highest institutionalized dialogue mechanism under the Strategic Partnership between India and the Russian Federation.
    • So far, 15 Annual Summit meetings have taken place alternatively in India and Russia with the 15th Annual Summit held in New Delhi during the visit of President Putin to India on 11 December 2014.
    • During the Summit, 20 documents were signed covering cooperation in nuclear energy, defence, hydrocarbons, science & technology, trade and investment etc.
    • Prime Minister Modi and President Putin also adopted a Joint Statement “Druzhba-Dosti: A Vision for strengthening the Indian-Russian Partnership over the next decade.”

    Let’s see our Defence Cooperation with Mighty Russia?

    • India-Russia military technical cooperation has evolved from a simple buyer – seller framework to one involving joint research, development and production of advanced defence technologies and systems.
    • BrahMos Missile System, Joint design and development of the Fifth Generation Fighter Aircraft, as well as the licensed production in India of SU-30 aircraft and T-90 tanks, are examples of such flagship cooperation.
    • An Indian contingent participated in the military parade in Moscow on 9 May 2015, during the 70th anniversary of the victory in the World War II.
    • The Inter Governmental Commission on Military Technical Cooperation (IRIGC-MTC) is in place to review defence cooperation between the two countries.

    Let’s know about importance of International North-South Trade Corridor (INSTC) ?

    • The INSTC was initiated by Russia, India and Iran in September 2000.
    • To establish transportation networks among the member states and to enhance connectivity with the land locked region of Central Asia.
    • The North-South Transport Corridor is an ancient route that connected South Asia with North Europe for centuries.
    • This route was used by the European, Indian, Russian and many other foreign traders.
    • During the late 17th and early 19th centuries, Indian traders used this route to reach out to the Central Asian markets.
    • The modern day INSTC is a multi-modal transportation route linking Indian Ocean and Persian Gulf to the Caspian Sea via Iran, and onward to northern Europe via St. Petersburg in Russia.

    How is it important to India to protect its strategic and economic interest?

    • The INSTC envisages movement of goods from Mumbai (India) to Bandar Abbas (Iran) by sea, from Bandar Abbas to Bandar-e-Anzali (an Iranian port on the Caspian Sea) by road.
    • Then from Bandar-e-Anzali to Astrakhan (a Caspian port in the Russian Federation) by ship across the Caspian Sea, and thereafter from Astrakhan to other regions of the Russian Federation and further into Europe by Russian railways.
    • Given India’s strategic interests in the West and the Central Asian region, and need for greater economic and energy cooperation between South, Central and the West Asian region.
    • New Delhi has stepped up its engagement to reconnect with its extended neighbourhood.

    Was there any momentum on Nuclear power deal?

    • Russia is an important partner in peaceful uses of nuclear energy and it recognizes India as a country with advanced nuclear technology with an impeccable nonproliferation record.
    • In December 2014, Department of Atomic Energy (DAE) and Russia’s Rosatom signed the Strategic Vision for strengthening cooperation in peaceful uses of atomic energy between India and Russia.
    • Kudankulam Nuclear Power Plant (KKNPP) is being built in India with Russian cooperation.
    • KKNPP Unit 1 became operational in July 2013, and attained full generation capacity on 7 June 2014.
    • While its Unit 2 is in the process of commissioning in the later part of 2015.
    • India and Russia have signed a General Framework Agreement on KKNPP Units 3 & 4 and subsequent contracts are under preparation.

    What’s Next to the geopolitical space?

    • Needless to say, defence remains at the centre-stage of the bilateral relationship, although with a diversified supplier base India is at a better position today to negotiate deals with Russia especially concerning technology transfer and co-production.
    • A sharp rise in Russia-China defense ties, the assertive foreign policy of a rising China in the Indo-Pacific, the U.S.-Pakistan relationship, and the China-Pakistan nexus will all encourage India to continue to strengthen ties with Russia.
    • It is clear that India-Russia relations remain vital for both countries amid a changing regional and global security environment.

    Published with inputs from Arun
  • Foreign Policy Watch: India-Japan

    In the context of 21st Century, among all the bilateral relations, Indo-Japan relations have all the potential to transcend this era into an ‘Asian century’.

    This relationship, which incorporates no dispute- ideological, cultural or territorial, was embarked upon in 6th century A.D. when Bhuddhism was introduced in Japan.

    Direct exchange in modern times commenced only in Maiji era (1868-1912), when Japan set off the process of modernization. Japanese support and assistance to Netaji and INA continue to persist in popular imagination.

    Although diplomatic relations between two countries were established in 1952, it was only in august 2000 when Japanese PM Yoshiro Mori and his Indian counterpart Atal Bihari Vajpeyi set in motion ‘Global partnership in 21st century’.

    Commonalities such as shared democratic values, commitment to human rights, pluralism, open society and rule of law are foundation blocks of this global partnership.

    Backgrounder

    During World War II

    Since India was under British rule when World War II broke out, it was deemed to have entered the war on the side of the Allies. Over 2 million Indians participated in the war; many served in combat against the Japanese who conquered Burma and reached the Indian border.

    Some 67,000 Indian soldiers were captured by the Japanese when Singapore surrendered in 1942, many of whom later became part of the Indian National Army (INA). In 1944-45, the combined British and Indian forces defeated the Japanese in a series of battles in Burma and the INA disintegrated.

    Indian National Army

    • Subhas Chandra Bose, who led the Azad Hind, a nationalist movement which aimed to end the British raj through military means, used Japanese sponsorship to form the Azad Hind Fauj or Indian National Army (INA).
    • The INA was composed mainly of former prisoners of war from the British Indian Army who had been captured by the Japanese after the fall of Singapore. They joined primarily because of the very harsh, often fatal conditions in POW camps. The INA also recruited volunteers from Indian expatriates in Southeast Asia. Bose was eager for the INA to participate in any invasion of India, and persuaded several Japanese that a victory such as Mutaguchi anticipated would lead to the collapse of British rule in India.
    • The idea that their western boundary would be controlled by a more friendly government was attractive. Japan never expected India to be part of its Greater East Asia Co-Prosperity Sphere.
    • The Japanese Government built, supported and controlled the Indian National Army and the Indian Independence League.. Japanese forces included INA units in many battles, most notably at the U Go Offensive at Manipur. The offensive culminated in Battles of Imphal and Kohima where the Japanese forces were pushed back and the INA lost cohesion.

    Modern relations

    • At the International Military Tribunal for the Far East, Indian Justice Radhabinod Pal became famous for his dissenting judgement in favour of Japan. The judgement of Justice Radhabinod Pal is remembered even today in Japan. This became a symbol of the close ties between India and Japan.
    • A relatively well-known result of the two nations’ was in 1949, when India sent the Tokyo Zoo two elephants to cheer the spirits of the defeated Japanese empire.
    • India refused to attend the San Francisco Peace Conference in 1951 due to its concerns over limitations imposed upon Japanese sovereignty and national independence. After the restoration of Japan’s sovereignty, Japan and India signed a peace treaty, establishing official diplomatic relations on 28 April 1952, in which India waived all reparation claims against Japan.
    • This treaty was one of the first treaties Japan signed after World War II. Diplomatic, trade, economic, and technical relations between India and Japan were well established. India’s iron ore helped Japan’s recovery from World War II devastation, and following Japanese Prime MinisterNobusuke Kishi’s visit to India in 1957, Japan started providing yen loans to India in 1958, as the first yen loan aid extended by Japanese government. Relations between the two nations were constrained, however, by Cold War politics.
    • Japan, as a result of World War II reconstruction, was a U.S. ally, whereas India pursued a non-aligned foreign policy, often leaning towards the Soviet Union. Since the 1980s, however, efforts were made to strengthen bilateral ties.
    • India’s ‘Look East’ policy posited Japan as a key partner. Since 1986, Japan has become India’s largest aid donor, and remains so.
    • Relations between the two nations reached a brief low in 1998 as a result of Pokhran-II, an Indian nuclear weapons test that year. Japan imposed sanctions on India following the test, which included the suspension of all political exchanges and the cutting off of economic assistance. These sanctions were lifted three years later. Relations improved exponentially following this period, as bilateral ties between the two nations improved once again, to the point where the Japanese prime minister, Shinzo Abe was to be the chief guest at India’s 2014 Republic Day parade.

    Complementarities: Why are both important to each other?

    • Varied factors have supported momentum of this partnership viz. India’s economic resurgence, its engagement with USA and its increasing interest and stakes in East Asia in the form of Look East Policy in 1992 and Act East Asia Policy in 2015.
    • On similar lines, for Japan, India has emerged as an alternative economic partner and important constituent of Asia’s emerging security order.
    • A transition of power is unfolding in Asian continent and the shape and substance of Indo-Japan relationship is one of its spin-off. Notwithstanding, strengthening of the Indo-Japan relations is not the only consequence of rise of china and USA’s shifting of regional policy in the form of “Rebalancing of Asia”.
    • Factors like domestic perception of the alliance partner, which is amicable, have stimulated this relationship. Japanese perception of India has also been molded by the dissenting opinion of Radha Binod Pal- the Indian judge at famous Tokyo trials – who declined to convict Japan’s top military brass as war criminal proving that Japan’s imperial history has been discounted by Indian consciousness.
    • In addition to this, personal bonding between Japanese PM and his Indian counterpart, who are leading single party majority government in respective countries, is a class by itself.

    Cooperation in Various Domains:

    Strategic cooperation

    Increment in china’s military expenditure was almost one and half times bigger in 2014 than defense outlay in 2010. This expansion is a cause of concern for both countries, since both countries are engaged in negotiation with China over Arunachal Pradesh (India) and Shenkaku Island (Japan).

    New Delhi and Tokyo are apt to hedge against USA’s possible failure in containing china’s growing assertiveness in the region in the backdrop of this era of power transition. This hedging strategy can be analyzed in three main categories-

    • Firstly, increasing bilateral defence partnership against fear of American retrenchment,
    • Secondly, economic engagement against an over-dependence on china and
    • Finally, multilateral hedge against China’s rising influence in international and regional institutions.

    Defence Cooperation

    In the sphere of defence, in 2009, 2+2 dialogue (foreign and defence ministerial) were initiated. India has always supported freedom of navigation and unimpeded lawful commerce in international waters in sync with UNCLOS vis-à-vis South China Sea dispute and East China Sea issue.

    India invited Japanese navy to participate in annual Malabar exercise in 2014 with USA in pacific waters, reviving an earlier practice of joint India-USA-Japan trilateral exercise.

    Negotiations on possible trade in defence equipments from Japan, as per Tokyo deceleration, are in the pipeline. Indian interest is in Japanese US-2 amphibious aircraft for surveillance purpose in the Indian Ocean is high. If this deal is realized then it will signify for the first time Japanese export of defence goods and technology since World War II.

    Can we collaborate in Defence?

    Collaborative projects in defence equipment and technology is under consideration.

    Tokyo has lifted ban on six Indian firms involved in defence R&D blacklisted after 1998 nuclear test, commencing towards transfer of Japanese military technology.

    Tokyo declaration of 2014 underscores the significance of strategic cooperation between two of Asia’s largest maritime democracies and castigates states indulging in expansionist policies in the region.

    In 2010 china accounted for 28% of total military spending in Asia. Its share has increased to 38% by 2014. Its DF-21d anti-ship ballistic missile is capable of targeting the entire South China Sea, Malacca Strait, most of Bay of Bengal and parts of Arabian Sea.

    After south Korea and USA jointly announced they would deploy USA Missile Defence System Terminal High Altitude Area Defence(THAAD) in South Korea in 2016 in order to devise a fitting line of regional deterrence , Japan is rushing forward to do the same.

    These strategic maneuvers dictate steps in the direction of balance of power in Asian continent, which is tilting in favor of China.

    Change in Article 9

    Japan has revised Article 9 of its Constitution to allow Japan’s self-defence forces to act more like a conventional army.

    The clause forbids Japan from using force to settle international disputes and restricts its land, air and naval forces to a strictly defensive role.

    Japan has scrapped the article to reform its pacifist, post-WW-II constitution to develop its military for collective self defence.

    Balance of military power and ever accentuating territorial and recourse nationalism in Asia has paved intensification of strategic cooperation between India and Japan.

    Although Japan controls Senkaku island, its sovereignty has been aggressively contested by China, as is evident in Beijing’s decision to establish an Air Defence Identification Zone (ADIZ) in the Eastern Asia in Nov. 2013.

    China’s Aggressiveness

    Chinese revisionism is also evident in South China Sea (SCS) where Beijing claims ownership over “Nine Dash Line” which if established by force, would entail that almost all of the SCS will be the exclusive economic zone of China.

    SCS is endowed with fossil fuels and vital for merchant and international free navigation given the fact that 71% international cargo passes through this region.

    Hague Arbitration Tribunal in Phillipines V/S China case in 2016 rejected China’s claim Of Nine Dash Line and the historic rights of Middle Kingdom off the hand. But China does not subscribe to UNCLOS, adding to tensions in the region.

    On the Himalayan side, transgressions in Demchok, Ladakh, Chumar and Depsang areas tell a story of territorial hunger of China.

    Although India-China relations look normal but distrust lingers deep within, which is a fallout of 4000 km. long Himalayan border dispute resulting from 1962 war.

    Indian side has suspicion for huge investment sponsored by china in developing port and deep underwater ports (which can be used for military purpose) in India’s neighborhood through Maritime Silk Route Project.

    This is owing to the fact that it resembles China’s earlier policy of “String of Pearls” theory – encirclement of India through a series of ports in different maritime countries in India’s neighbourhood.

    Development of Kyaukphu port and deep underwater port at Maday island (Arakan coast ) in Myanmar nearby North East region of India and development of Gwadhar port in Pakistan near Western India is supposed to be a part of this grand scheme.

    In addition to this, Great Coco Island and Little Coco Island are controlled by Myanmar. Since the early 1990s, there have been frequent reports of China using those islands for military and naval purposes but there is no certain proof of whether the islands are actually under Chinese control.

    Thus, Chinese presence on the Coco Islands, developing intelligence systems and other naval facilities, is unnerving for nearby India.

    While it is yet not certain whether the Great Coco island hosts Chinese intelligence systems, there is greater acknowledgement on the building of runways and other connectivity infrastructure on the Cocos.

    This represents an array of attempts by China to intrude into the Indian ocean region to surround India from all four corners.

    Economic cooperation

    For 2011-12 India-Japan bilateral trade stood at $18.31 billion. The comprehensive trade pact between India and Japan aims to double bilateral trade nearly to $25 billion.

    Japan is looking to boost trade and investment ties with India. The reasons behind this interest in India is obvious. India offers a large domestic market base.

    Besides, mutual synergies between businesses in the two countries are driving initiatives-

    • Firstly, Japan’s ageing population (23% above 65 years) and India’s youthful dynamism (over 50% below 25 years)
    • Secondly, Japan is a relatively labour scarce, capital abundant country that complements India’s rich spectrum of human capital.
    • Thirdly, India’s prowess in the software sector lends synergy to Japan’s excellence in the hardware sector
    • Fourthly India’s abundance of raw materials and minerals matches well with Japan’s capabilities in technology and capital to produce knowledge-intensive manufactured goods
    • Fifthly India’s large domestic market has been the main factor for investments by Japanese companies.
    • Sixthly Japanese small and medium enterprises have begun to discover India as the new growth market.

    The majority of investments are in traditional fields like machinery, automobiles and auto parts . Japan and India share a common vision for the world. This is aptly illustrated by the fact that there has been an increase in the number of joint declarations, delegation visits and other business events between the two countries.

    India Japan CEPA

    The Comprehensive Economic Partnership Agreement (CEPA) between India and Japan came into force in August 2011.Despite this agreement India-Japan bilateral trade stands at measly USD16 billion as compared to Sino-Indian trade amounting to USD 70 billion and Sino-Japanese trade at whooping amount of USD 343 billion in 2014 .

    The agreement had two major concerns, namely: the infrastructure in India, and non-tariff barriers in Japan. On the infrastructure front, the two countries are collaborating on the huge, US $90-billion Delhi–Mumbai Industrial Corridor (DMIC) project.

    The project agreement appears highly promising in the environment of the new manufacturing policy whereby India is targeting to increase the share of manufacturing in GDP to 25 percent within a decade, potentially creating 100 million jobs.

    Japan had invested in dedicated freight corridor west project, strategic port facility in Chennai, development of strategic assets including highways and dams in North East Region where India’s immediate neighbor is eyeing for territorial expansion.

    Japan has set up multi product SEZ and clusters, custom free and warehousing zones ( in Neemrana in Rajsthan ) leading to greater economic integration in Asia. In 2014 Kyoto-Kashi pact was signed between two countries wherein Kashi became as popular as ‘city of ten-thousand shrines’ in ‘land of rising sun’.

    Under this agreement Kyoto and Kashi will prepare a detailed roadmap for making Kashi a ‘smart city’, retaining its rich culture,tradition and heritage.

    Tariff & Non Tariff barriers – an obstruction?

    • An important factor affecting Indo-Japan trade is the tariff and non- tariff barriers imposed by both countries. Japan has placed import prohibitions and quantitative restrictions on imports from India, for example, on fish and silk items.
    • Japan’s Sanitary and Phytosanitary Measures (SPS) are major barriers to Indian exports of poultry, meat, shrimps and fruits like mangoes and grapes. This issue highlights the need for sharing and facilitating the exchange of technology under the agreement to promote Indian exports to Japan.
    • Engaging Japan economically is important as India is biggest recipient of Japan’s ODA. India is also premium destinations for foreign direct investment from Japan.
    • Attracting Japanese investment, technology and business is crucial for transforming India into Asia’s new production line. There is a strategic rationale behind economic engagement of India with Japan.
    • India is far more comfortable with Japanese businesses investing in development of strategic assets of infrastructure but Chinese investment in infrastructure is seen with concerns and suspicions due to security reasons and mistrust, even when such investment can resolve some of the trade imbalance of India with china.
    • For Japan economic partnership is shaped by realpolitik too. Japanese investment was very vital for Chinese miracle as china has been highest recipient of Japanese aid between 1980-2003. Greater economic integration with china has not translated into political trust between two countries, hence boundary disputes has escalated.
    • During Indian Pm visit to Japan 2014 two countries have announced ‘India-Japan Investment Promotion Partnership’. Japan has promised to invest more than USD 35 billion in India.
    • ODA and private investment is biggest foreign investment by any single country into India. Substantial contract on export of rare earth minerals from India to Japan is on anvil, which would offset Japan’s reliance on china for supply.
    • Both India and Japan are concerned that their growing economic interdependence on China might make the Indian and Japanese economies more vulnerable to Beijing’s economic coercion.
    • Secondly, both the nations are exasperated by china’s strategy of deploying surrogates in East and South Asia primarily North Korea and Pakistan, to wear both the countries out.
    • The China Pakistan Economic Corridor (CPEC) a USD 45 billion project traversing through highly sensitive Karakoram border region of India is one of the examples.

    India-Japan Economic and Commercial Cooperation

    • Complementarities between the two countries
    • Japan’s ageing population (23% above 65 years) and India’s youthful dynamism (over 50% below 25 years);
    • India’s rich natural and human resources and Japan’s advanced technology;
    • India’s prowess in services and Japan’s excellence in manufacturing;
    •  Japan’s surplus capital for investments and India’s large and growing markets and the middle class.
    • The signing of the historic India-Japan Comprehensive Economic Partnership Agreement (CEPA) and its implementation from August 2011 is expected to further accelerate growth of trade, economic and commercial relations between the two countries.
    • Japan has been extending bilateral loan and grant assistance to India since 1958. Japan is the largest bilateral donor to India. Japanese ODA supports India’s efforts for accelerated economic development particularly in priority areas like power, transportation, environmental projects and projects related to basic human needs. For example New Delhi metro network. The Western Dedicated Freight Corridor (DFC), The Delhi-Mumbai Industrial Corridor with eight new industrial townships, The Chennai-Bengaluru Industrial Corridor (CBIC) India’s primary exports to Japan have been petroleum products, chemicals, elements, compounds, non-metallic mineral ware, fish & fish preparations, metalliferous ores & scrap, clothing & accessories, iron & steel products, textile yarn, fabrics and machinery etc.
    • Japanese FDI into India grew exponentially from US$ 139 million in 2004 to all time high of US$ 5551 million in 2008. Currently FDI from Japan to India was US$ 1.7 billion during January-December 2014. Japanese FDI has mainly been in automobile, electrical equipment, telecommunications, chemical and pharmaceutical sectors.
    • The number of Japanese affiliated companies in India has grown significantly over the years.
    • 13 big infrastructure projects to be financed by ODA loans such as Metro projects both in Chennai and Ahmedabad and road network connectivity in our Northeastern states.

    India and Japan signed a Protocol for amending the existing Convention for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income which was signed in 1989. The protocol provides for

    • Internationally accepted standards for effective exchange of information on tax matters including bank
    • information and information without domestic tax interest.
    • The information received from Japan in respect of a resident of India can be shared with other law
    • enforcement agencies with authorisation of the competent authority of Japan and vice versa.
    • Both India and Japan shall provide assistance to each other in the collection of revenue claims.
    • Exemption of interest income from taxation in the source country with respect to debt-claims insured by the Government/Government owned financial institutions.

    Multilateral cooperation domain:

    Despite being benefited by USA’s uni-polarity, multilateral-ism has emerged as cornerstone of contemporary foreign policy of both the nations.

    Joint statement of 2006 incorporated “cooperation in multilateral forums like UN,SAARC, EAS and ARF”. The impulse for multilateralism stems for desire to make 21st century as Asian century through working for peace and stability in the region, providing better connectivity and greater regional integration.

    Although undercurrent of fears of China’s hegemony in the Asia and USA’s declining clout in global affairs also boost force of multilateralism supported by India and Japan.

    Significant agenda for New Delhi and Tokyo is to reform UNSC. Both demand democratization of UNSC and both claim permanent membership in this regard. Post WWII international security architecture with Beijing as only Asian representative in UNSC with veto power ensures that China will continue to enjoy extraordinary leverage in the region.

    So maintaining a status quo is in favor of china as it does not support claim either by India or by Japan. China’s opposition has further cemented the Indo-Japanese relationship wherein countries declared solidarity for each-other’s positions demanding permanent membership and formed G-4 including Germany and Brazil too.

    India was included into East Asia summit membership (ASEAN 3+3) on behest of Japan along with Australia and New Zealand despite protest by China.

    India shows its appreciation for current Japanese PM’s initiative to help Bangladesh in developing the region around the Bay Of Bengal though ” Bay of Bengal Industrial Growth Belt” or BIG -B initiative.

    Japan’s active involvement in this region offsets china’s growing economic and strategic influence in India’s neighborhood. Two course shares similar view of establishing peace and stability in Afghanistan and has invested into Afghanistan’s prosperity and development. India and Japan institutionalize trilateral strategic dialogue partnership with USA in 2011.

    These trilateral initiative has serious potential to transform into ‘Quad of Democracies’ (including Australia) in the Indo-Pacific region.

    Nuclear Conundrum

    Issue of civilian nuclear technology cooperation remains a constraint in realizing true potential of this strategic partnership. Japan’s anti-nuclear stance often conflicts with India’s aspiration of to be a nuclear power.

    Tokyo however has relented and supported India-USA Civil Nuclear Cooperation Agreement at IAEA and  NSG, given the responsible nuclear state history of India.

    India and Japan has started discussion on a Civilian Nuclear Cooperation Agreement in 2010. For India, nuclear cooperation with Japan is essential to consummate indo-USA nuclear deal owing to the fact that Westinghouse is Toshiba’s subsidiary and Mitshubishi has a technical cooperation agreement with General Electric.

    Even crucial components of nuclear reactors offered by French nuclear consortium -Areva- are manufactured in Japan.India also needs Japan’s support for NSG membership but later has expressed reservations citing New Delhi’s lack of commitment to nuclear disarmament, especially at CTBT and FMCT.

    Nuclear disaster at Fukushima Daiichi plant in 2011 had also derailed ongoing consultations. Japan’s preconditions to such an agreement includes stringent inspections of Indian civilian nuclear facilities, termination of agreement in case of India conducts nuclear test and India’s abdication of right to enrich or reprocess fuel of Japanese origin(rule of origin i.e. fagging and benchmarking).

    Tokyo has attached significance to ratification to CTBT and a unilateral moratorium on production of fissile material.For India, the benchmark for bilateral civilian cooperation deal has been already fixed by Indo-USA nuclear deal and India will not go more than what it has committed to its civilian nuclear pact with USA.

    Notwithstanding, having accepted the IAEA’s ‘Additional Protocols’ which allows IAEA to conduct extensive inspection of India’s civilian nuclear programme, India have affirmatively addressed one of the Japan’s major concerns.

    In the backdrop of CTBT being discriminatory and instrument to maintain status- quo in favor of recognized nuclear states, India replies with “Not Now, Not Ever” approach in words of former diplomat Arundhati Ghosh.

    With a responsible nuclear doctrine in 1998 itself India had adhered to unilateral moratorium on nuclear test. In addition to this, China and USA has not ratified CTBT yet, so India has no strategic rationale to move forward and ratify it. Same line of argument goes for the FMCT issue too.

    Nonetheless Japan in recent times is going ahead with Civil Nuclear Cooperation Agreement very eagerly owing to economic compulsion resulting from global economic slowdown, which augurs well for India.

    What Lies Ahead?

    India and Japan are two powerful democratic forces in Asia which are searching for more options to work and prosper jointly.

    Economic front needs to be strengthened to reach “Low Hanging Fruit of Asia” wherein demographic dividend of the India and other Asian countries can be deployed to benefit Asia as whole.

    Both need to join hand to establish peace and order in not only disturbed region of Asia but of the whole world.

    Recent Developments

    Japanese PM Visit to India(2015)

    • Mr. Shinzo Abe, Prime Minister of Japan, visited India from 11 to 13 December, 2015.
    • Japan has always been a significant economic partner of India, but not a strategic one. Now, both on the economic and strategic fronts, the India-Japan relationship is being transformed.

    Important Outcomes

    1. Nuclear agreement signed

    • Reached broad agreement on civil nuclear cooperation after five years of wrangling.
    • This will clear the way for American firms — which source key equipment in Japan – to sell nuclear reactors to India.
    • Commerce aside, this agreement is also symbolically important because Japan was one of India’s most vocal critics after New Delhi’s 1998 nuclear tests.
    • This is part of India’s decade-long process of progressive nuclear rehabilitation.

    2. Defense and Security relationship

    • New linkages between the Indian and Japanese air forces and coast guards.
    • Indian training for Japan’s counterterrorism capabilities.
    • Agreements to share classified military information.
    • Transfer of Defense Equipment and Technology.
    • India’s decision to invite Japan as a ‘formal partner’ to the US-India Malabar naval exercises.
    • This will passively balance Chinese power. This will complement other initiatives of
    • India like US-India-Japan trilateral at the foreign minister level in October and a US-India-Australia trilateral at a slightly lower level in June.

    3. Trade and Investment

    • Japan will create a $12bn-facility to support Japanese companies investing in India to further our Make in India objective
    • As part of the broader Japanese support for Indian infrastructure, memorandum of cooperation on the high speed Shinkansen rail system between Mumbai and Ahmedabad to be financed with a highly concessional yen loan has been signed.

    Upgrading civilian infrastructure in the Andaman and Nicobar Islands.

    India and Japan are in talks to collaborate on upgrading civilian infrastructure in the Andaman and Nicobar Islands.

    • The first project being discussed is a modest one — a 15-megawatt diesel power plant on South
    • Andaman Island.
    • To counter china’s growing influence, India is building strategic relations with Japan, Australia and
    • the United States, as well as regional powers like Vietnam.

    Way forward

    • India’s Act East policy — of which the India-Japan relationship is a core strand — is important not just
    • For boosting investment but also signaling to China.
    • It is also to strengthen India’s voice in regional debates, whether on economic or security issues,
    • such that India will be in a position to shape emerging economic and security architectures as they form, rather than accommodate to them afterwards.
    • As a recent RAND study noted, ‘Southeast Asia sees India primarily as a security partner, while India primarily sees Southeast Asia as a trade partner’. The more that India accepts the garb of security partner, the more pivotal its role in Asia and its voice in debates.

    US-JAPAN-INDIA TRILATERAL MEET

    The foreign ministers of India, Japan and the US met in New York in the first such trilateral engagement between the three countries with an eye on China’s growing influence in the world.

    • The foreign ministers underscored the importance of international law and peaceful settlement of disputes, freedom of navigation and overflight and unimpeded lawful commerce, including in the South China Sea.
    • The US maintains the South China Sea is international water, and sovereignty in the area should be determined by the UN.
    • With China getting more assertive, the US is looking to marshal allies in the region to take a strategic role.
    • India’s participation in this new trilateral forum along with the US and its most important Asian-Pacific ally marks a new benchmark in India’s integration into the US “Pivot to Asia”—Washington’s drive to militarily-strategically isolate and encircle China.
    • The US has long been pressing India to join US-led trilateral and quadrilateral initiatives with Japan and its other key military partner in the region, Australia.
    • “The U.S. concept of Asia Pivot revolves around isolating China and creating a block of Regional and Extra Regional 2nd tier powers to strategically suffocate China in the 21st century. These 2nd tier powers include India, Australia and Japan.”
    • The three Ministers discussed maintaining maritime security through greater collaboration and appreciated Japan’s participation in the 2015 Malabar naval exercise. Humanitarian assistance and disaster relief also featured in the first trilateral ministerial meet.
    • China had objected to the participation of Japan, Australia and Singapore in Malabar 2007 exercise, which was hosted by India in the Bay of Bengal.
    • To promote regional economic linkages, the three Ministers launched an expert-level group on regional connectivity to identify collaborative efforts, including between south and southeast Asia.

    IFS Officer Nayantara D with Honourable Lok Sabha Speaker Sumitra Mahajan. She is currently serving as the Third Secreatry, Embassy of Seoul.

    (D)PM Modi Visit to Japan(2016)

    Prime Minister Modi recently visited Japan at the invitation of Prime Minister of Japan Abe. The two Prime Ministers held wide-ranging consultations.

    Outcomes of the visit

    Synergising the partnership-∙ Both countries undertook a comprehensive review of the Special Strategic and Global Partnership as outlined in the “India and Japan Vision 2025” and acknowledged the significant progress in bilateral relations over the past two years.

    Enhanced space and cooperation on global challenges- such as climate change, countering terrorism and violent extremism, reform of the United Nations (UN) including the United Nations Security Council (UNSC), as well as maintaining rules-based international order.

    Building stronger partnership for stable and safe world

    Emphasis on rising importance of Indo-Pacific region- stressed the core values of democracy, peace, therule of law, tolerance, and respect for the environment in realising pluralistic and inclusive growth of the region.

    Consolidation of security and defence cooperation- welcomed two Defence Framework Agreements concerning the Transfer of Defence Equipment and Technology and concerning Security Measures for the Protection of Classified Military Information.

    Deepening bilateral security and defence dialogues, through the “2+2” Dialogue, Defence Policy Dialogue, Military-to-Military Talks and Coast Guard-to-Coast Guard co-operation.

    Partnership for prosperity-∙ A dedicated task force to be set up comprising representatives of both countries to develop a concrete roadmap for phased transfer of technology and “Make in India.” Cooperation on the human resource development in the manufacturing sector in India through “Manufacturing Skill Transfer Promotion Programme.”

    The two Prime Ministers noted the growing collaboration between India and Japan in the modernisation and expansion of conventional railway system in India.

    To build upon cooperation in the field of smart cities to develop smart islands by initiating consultations to identify technologies, infrastructure, development strategies and management processes facilitating development of smart islands in an efficient and effective manner.

    Cooperation for a cleaner and greener future

    Recognised the importance of access to reliable, clean and affordable energy and welcomed the JapanIndia Energy Partnership Initiative laid by the Japan-India 8th Energy Dialogue held in January 2016.

    Commitment to work together in developing the rules for successful implementation of the Paris Agreement on Climate change.

    Signed the Agreement for Cooperation in the Peaceful Uses of Nuclear Energy which reflects a new level of mutual confidence and strategic partnership in the cause of clean energy, economic development and a peaceful and secure world.

    Foundation of a Future-oriented Partnership– Both the countries signed the following MoUs-

    • MOU between JAXA and ISRO concerning Cooperation in the Field of Outer Space
    • MoU between Ministry of Earth Sciences (MoES), Republic of India and The Japan Agency for MarineEarth Science and Technology (JAMSTEC) on Mutual Collaboration in Marine and Earth Science and Technology.
    • Will advance of academic research in the field of Earth Sciences for the benefit of the peace and human welfare.
    • Will enhance capability in the field of atmospheric and climate research, ocean technology observation and hazard mitigation in case of tsunami, earthquakes and other phenomenon.
    • Will boost our “Blue Economy” with better research and exploration of marine resources.

    INDO-JAPAN NUCLEAR DEAL

    Summary:

    The annual strategic dialogue between India and Japan which began in 2009 has now come to fruition with the signing the nuclear cooperation agreement in Tokyo during Prime Minister Narendra Modi’s visit.

    • Japan has civil nuclear treaties with 13 countries, including the US, France and Russia, but this is the first with a nation that is not part of the Nuclear Nonproliferation Treaty (NPT).

    Background:

    India and Japan were at loggerheads since 1998 when India conducted its nuclear tests. Japan was the country that took it the hardest. It put all political exchanges with India on hold, froze aid and announced economic sanctions within hours. A thaw in ties didn’t come until 2001, when sanctions were lifted. And then, in 2009, the two countries began an annual strategic dialogue.

    india-and-japan-nuclear-deal

    Why both countries took so much time to sign this deal?

    The deal had been proposed six years ago and till very recently, it seemed that the process would not be concluded.

    • The two prime ministers had signed a memorandum of understanding last December but the thorny issues of Japanese companies’ liability for nuclear accidents, the reprocessing of spent nuclear fuel, and the consequences of any future testing of nuclear weapons by India, remained on the table.
    • The last stage of negotiations on the deal was keenly watched due to a “nullification clause”, which sought automatic cancellation of the agreement if India resorts to nuclear testing in the future.
    • Another sticking point has been India’s refusal to sign the NPT, as it considers the treaty unfair to the developing world.

    What’s there in the new deal?

    • Nullification clause issue was resolved by annexing a separate memorandum to the treaty which specifies that Japan can suspend cooperation if India breaches its no-testing pledge to the NSG.
    • India conceded to Japan on another clause which says that Japan can notify India of the termination of the pact with one year’s notice.

    Why this deal was important for India?

    • Apart from the Russian reactors, India’s planned nuclear reactors with France and US also depend on Japanese parts. Moreover, GE, Westinghouse, and Areva, the companies planning reactors in India, have important ownership stakes of Japanese companies such as Hitachi, Toshiba and Mitsubishi, which were stopped by the Japanese government from doing business with India without a final nuclear deal. This deal will help guarantee Japan’s continued support to India’s civil nuclear programme for generation of clean and cheap power.
    • Reservations in Japan against nuclear energy have hardened after the Fukushima accident. Tokyo’s support to the deal so far is therefore an indication of the importance it accords to relations with India.
    • The agreement is also important for the message of trust it would convey to Nuclear Suppliers Group members in a year the country hopes to have its admission accepted. It gives a much-needed moral boost.
    • The move will also boost the meagre, and dipping, bilateral trade of $15 billion, and lift the strategic military and defence relationship.

    What’s in it for Japan?

    This deal will mainly help Japan for economical reasons as companies like Mitsubishi and Hitachi are also in the nuclear energy field, and they are running in loss ever since the Fukushima disaster.

    These companies are frantically looking for new markets to expand in and there could be no better place than energy starved India. Japan had initially opposed the Indo-US Nuclear deal, as India wasn’t a member of NSG but later changed its position after realizing that its going to be the sole loser in the lucrative Indian market.

    Why few countries are opposing this deal?

    They say, signing a nuclear trade deal with a country that has shunned the treaty designed to stop the spread of nuclear weapons is itself a big mistake. Besides, the agreement contains many questionable and worrisome elements. For instance, the pact doesn’t make it clear whether India has to immediately shut down reactors using Japanese technology when it carries out a nuclear test.

    Way ahead:

    Now, Japanese Prime Minister must bring the deal to Parliament in early 2017 to ensure that the commercial agreement for Westinghouse’s six reactors in Andhra Pradesh that is due in June 2017 comes through. This will also coincide with the next plenary of the NSG. Both New Delhi and Tokyo must also be wary of the impact on Beijing of this new stage in their ties.

    China has been hedging against deeper Japan-India ties in Asia by investing in its relationship with Russia and Pakistan. As the two Asian rivals to China, India and Japan might need the partnership even more in the days to come, as the U.S. President-elect has indicated a lower level of interest in “playing policeman” in the region.

    Conclusion:

    Japan now follows eight other nations, including the US, France and Russia, in entering into a pact with India. It signals a wider acceptance of India’s status as a responsible actor.

    Overall, given the economic, nonproliferation, and regional power balance issues examined above, it is clear that full-fledged Japan-India civil nuclear cooperation is fundamentally a development to be welcomed. The question remains regarding whether India is likely to conduct further testing of nuclear weapons and how such tests would impact the bilateral agreement.