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Subject: Bilateral Relations

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

  • [8th November 2024] The Hindu Op-ed: India, Pakistan and modifying the Indus Waters Treaty 

    PYQ Relevance:Q)

    Present an account of the Indus Water Treaty and examine its ecological, economic and political implications in the context of changing bilateral relations. (UPSC CSE 2016)

    Q) With reference to the Indus river system, of the following four rivers, three of them pour into one of them which join the Indus direct. Among the following, which one is such river that joins the Indus direct? ​(UPSC CSE 2021)

    a) Chenab
    ​b) Jhelum
    ​c) Ravi ​
    d) Sutlej

    Mentor’s Comment: The Indus Water Treaty was signed in 1960 after extensive negotiations facilitated by the World Bank. It has successfully governed water sharing between India and Pakistan for over six decades, surviving numerous conflicts between the two nations.

    The IWT has survived multiple conflicts between India and Pakistan, including three wars and ongoing military tensions. Pakistan has consistently raised objections to hydropower projects initiated by India, particularly the Kishanganga and Ratle river developments, claiming they violate the treaty’s provisions.

    However, recent tensions have prompted India to reconsider its obligations under this long-standing agreement. Today’s editorial discusses several critical aspects related to India’s recent formal notice to Pakistan regarding the treaty.

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    Let’s learn!

    Why in the News?

    Indian Government has issued a formal notice to Pakistan requesting modifications to the Indus Water Treaty, citing “fundamental and unforeseen changes“.

    Overview of the IWT and Recent Developments:

    The Indus Waters Treaty (IWT), signed in 1960 between India and Pakistan, governs the allocation and management of water resources from the Indus River system.
    This treaty allows India unrestricted use of the eastern rivers (Sutlej, Beas, and Ravi) while allocating the western rivers (Indus, Jhelum, and Chenab) primarily to Pakistan.
    However, recent tensions have prompted India to formally request modifications to the treaty, raising significant geopolitical implications.

    What prompted India to seek modifications to the Indus Waters Treaty?

    • Demographic Changes: Increasing population pressures necessitate greater water resource management.
    • Environmental Issues: The need for sustainable practices and clean energy development to meet emission targets.
    • Security Concerns: The impact of persistent cross-border terrorism on water management and treaty implementation.
    • Disputes over Hydropower Projects: Tensions have arisen over India’s hydroelectric projects on rivers like Kishanganga and Ratle, which Pakistan claims violate the treaty. India believes these projects comply with the agreement.
    • Perceived Imbalance: India feels the treaty disproportionately favors Pakistan, which receives about 80% of the Indus river system’s water, while India manages only 20%. This perceived imbalance has led to calls for a fairer distribution of resources.

    How does the proposed modification process work under the treaty?

    India has issued a formal notice to Pakistan that requires a reassessment of the treaty’s obligations as follows:

    • According to Article XII (3), any modifications to the treaty must be made through a duly ratified treaty concluded between the two governments.
    • Once a formal notice is issued, Pakistan has a specified period (typically three months) to respond to the request for renegotiation. The outcome of this response will determine the next steps in the modification process.
    • If Pakistan agrees to negotiate, both countries will enter discussions aimed at revising the treaty. This process is expected to address various concerns raised by India, including demographic changes, environmental issues, and security threats.
    • If Pakistan does not accept India’s proposal for modification, India retains the option to call for the termination of the treaty, although this would likely escalate tensions further.
    The IWT also includes a graded Dispute Resolution Mechanism, which operates at three levels:

    Level 1: Initial discussions occur at the level of the Permanent Indus Commission (PIC), where both parties can clarify any questions regarding planned projects.
    Level 2: If differences remain unresolved, they escalate to involve a Neutral Expert, who provides technical advice.
    Level 3: Finally, if disputes persist, they can be taken to a Court of Arbitration for binding resolution.

    What implications could this modification have for India-Pakistan relations?

    • Diplomatic Strain and Increased Tensions: Pakistan may view India’s request as a threat to its water rights, leading to escalated tensions and potential conflicts over water resources.
      • The process of negotiating modifications could be challenging due to historical mistrust, making it hard for both countries to reach a consensus.
    • Water Scarcity Concerns: Modifying the treaty could either improve or worsen water security for both nations. Pakistan, which relies heavily on the Indus system, may feel particularly vulnerable, increasing the risk of conflict.
    • Geopolitical Ramifications: Changes to the treaty might destabilize the region, potentially leading to increased militarization or conflict, especially given both countries’ nuclear capabilities.
    • International Involvement: The World Bank and other international bodies may need to intervene if negotiations fail, complicating the situation and potentially drawing in other regional powers.

    Way Forward: India’s request for modifications to the Indus Waters Treaty signals a significant shift in its approach to water resource management with Pakistan. As both countries face mounting pressures from changing demographics, environmental challenges, and security concerns, the future of this treaty may hinge on their willingness to engage in constructive dialogue and negotiate terms that reflect current realities.

    https://www.thehindu.com/news/national/what-is-indus-waters-treaty-between-india-pakistan/article65075002.ece

  • [4th November 2024] The Hindu Op-ed: The BRICS summit boost to India-Iran ties

    PYQ Relevance:

    Q) In what ways would the ongoing US-Iran Nuclear Pact Controversy affect the national interest of India? How should India respond to its situation? (UPSC CSE 2018)
    Q) The question of India’s Energy Security constitutes the most important part of India’s economic progress. Analyze India’s energy policy cooperation with West Asian Countries. (UPSC CSE 2017) 

    Prelims

    Q) Which of the following is not a member of ‘Gulf Cooperation Council’? (UPSC CSE 2016)
    a) Iran
    b) Saudi Arabia
    c) Oman
    d) Kuwait

    Mentor’s Comment:  Iran’s geographical position between the Persian Gulf and the Caspian Sea makes it a crucial link for India to access Central Asia and the Middle East. This is particularly important given India’s limited land connectivity to these regions due to tensions with Pakistan.

    Strategically, Iran possesses one of the largest reserves of crude oil and natural gas in the world. Strengthening ties with Iran can help India secure its energy needs, especially as it seeks to diversify its sources of oil imports.

    Security wise, both countries share concerns about regional stability, particularly regarding extremist groups.

    Today’s editorial discusses the recent developments in the relationship between India and Iran, particularly in light of their interactions during the BRICS summit held in Kazan, Russia.

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    Let’s learn!

    Why in the News?

    The present 16th BRICS Summit (October 22-24, 2024) meeting marked the first interaction between Indian PM Narendra Modi and Iranian Prez Masoud Pezeshkian, since Pezeshkian took office following the death of former President Ebrahim Raisi.

    What were the key discussions?
    • On Bilateral Ties: Both leaders reviewed the full spectrum of India-Iran relations, emphasizing the potential for deeper cooperation across various sectors, particularly in connectivity and trade.
    • On Strategic Projects: The leaders discussed critical initiatives such as the Chabahar Port and the International North-South Transport Corridor (INSTC), which are vital for enhancing trade links with Central Asia and supporting Afghanistan’s reconstruction efforts.
    • On Regional stability: Given the ongoing conflict in West Asia, both leaders acknowledged India’s unique position to advocate for peace and de-escalation. Modi expressed concerns over escalating violence and emphasized the need for dialogue.

    History of Strong Civilization Ties:
    • Common Origins: Both civilizations are believed to have originated from a common Indo-Iranian ancestry, with linguistic and cultural exchanges dating back to prehistoric times.
    Historical trade routes facilitated exchanges between the Indus Valley Civilization and ancient Persia, with goods such as silver, copper, and precious stones being traded across the Persian Gulf.
    • Cultural Interactions: The spread of Buddhism from India to Persia significantly influenced Iranian culture. Later, Sufism fostered spiritual ties, leading to deep cultural exchanges in literature and philosophy.
    Persian literature became highly influential in India during the Mughal-Safavid Period.
    • Modern Diplomatic Relations: India and Iran formalized their relationship with a friendship treaty in 1950.
    The recent collaborations focus on energy security and regional stability, highlighted by projects like the development of Chabahar Port, which enhances connectivity between India, Iran, and Afghanistan.

    How does the inclusion of Iran in BRICS impact India’s strategic interests?

    • Economic Opportunities: Iran’s membership can boost bilateral trade through initiatives like the Chabahar Port, enhancing India’s access to Central Asia.
      • Strengthened ties may facilitate oil imports from Iran, helping India diversify its energy sources.
    • Geopolitical Dynamics: BRICS provides a platform for India to promote a multipolar world, and balance Western dominance in global affairs.
      • Including Iran could foster dialogue and reduce tensions in the Middle East, benefiting India’s regional interests.
    • Complex Relationships: India must manage its relationship with Iran while maintaining ties with Western allies, which BRICS dynamics could complicate.
      • Iran’s inclusion may enhance China’s leverage in the region, posing challenges for India’s strategic positioning.

    What are the potential economic benefits for India from strengthened ties with Iran through BRICS?

    • Increased Trade Opportunities: A Preferential Trade Agreement (PTA) could boost trade in various sectors, enhancing exports of Indian goods like agriculture and machinery to Iran.
      • Iran serves as a gateway for India to reach Central Asian markets via the Chabahar Port, facilitating trade routes that bypass Pakistan.
    • Energy Security: Strengthening ties may allow India to resume importing oil from Iran, helping meet its growing energy needs.
      • Potential projects like the Iran-Oman-India gas pipeline could provide India with a direct source of natural gas, diversifying its energy supply.
    • Infrastructure Development: India’s investment in Chabahar Port enhances connectivity to Afghanistan and Central Asia, offering an alternative route for trade.
      • This corridor aims to streamline trade between India, Iran, and Russia, reducing transit times and improving trade efficiency.

    How does the BRICS summit reflect shifting geopolitical alliances and the future of multilateralism?

    • Challenge to U.S.-led order: The expansion of BRICS, including new members like Iran, signals a desire among emerging economies to create a more balanced multipolar world that reduces reliance on Western powers.
    • Geopolitical Fragmentation: The inclusion of countries with differing agendas, such as India’s ties with the West and Russia-China’s anti-Western stance, complicates the bloc’s unity and effectiveness.
      • This fragmentation may lead to a division of global politics into competing alliances, potentially undermining existing multilateral platforms like the G20.
    • Focus on South-South Cooperation: BRICS emphasizes cooperation among developing nations in trade and sustainable development, enhancing economic ties and addressing common challenges.

    Conclusion: India and Iran can achieve a lot together. There is recognition that too much time has already been lost. India’s ability to de-hyphenate ties and engage independently with nations that are adversarial to each other, such as Iran and Israel, could be useful in driving the ties. 

    https://www.thehindu.com/opinion/op-ed/the-brics-summit-boost-to-india-iran-ties/article68826431.ece

  • A collective effort towards peace in Myanmar

    Why in the News?

    The 44th ASEAN Summit in Vientiane highlighted growing regional issues, especially Myanmar’s crisis. Despite ASEAN’s peace efforts, Myanmar’s turmoil persists, testing the group’s commitment to stability.

    What are the key challenges facing ASEAN and India in their efforts to stabilize Myanmar?

    • Lack of Consensus within ASEAN: ASEAN’s principle of consensus-based decision-making complicates strong, unified responses.
      • Nations like Indonesia and Malaysia advocate for firm action, while others, including Thailand and Laos, maintain closer ties with Myanmar’s military government, slowing decisive actions.
    • Failure of the Five-Point Consensus: Despite ASEAN’s efforts to enforce the 2021 Five-Point Consensus, which mandates an end to violence and inclusive dialogue, Myanmar’s military has shown little interest in cooperating, undermining ASEAN’s credibility.
    • Exclusion of Key Groups: ASEAN’s initiatives mainly engage the junta without including the National Unity Government (NUG) or Ethnic Armed Organizations (EAOs), limiting the inclusiveness and effectiveness of peace efforts.
    • Worsening Humanitarian Crisis: Myanmar’s civil war has led to massive displacement and humanitarian needs, with over 18.6 million people requiring aid.
      • This poses logistical and diplomatic challenges for ASEAN and complicates India’s border security and refugee policies.
    • Balancing Regional and Security Concerns for India: India faces a dilemma balancing its Act East Policy objectives and the need for stability on its Myanmar border.
      • Issues such as cross-border militancy, illegal activities, and the refugee crisis strain India’s relations with the junta and impact regional connectivity projects.

    How can Inclusive dialogue be achieved among all stakeholders in Myanmar?

    • ASEAN must involve non-state actors like the NUG, EAOs, and the People’s Defense Forces (PDFs) in dialogue efforts to ensure all key groups have a stake in Myanmar’s peace process.
    • Thailand’s recent ‘Troika’ proposal to host talks with ASEAN chairs (current, past, and future) and possibly other stakeholders indicates a potential pathway for more flexible discussions, albeit with the need for junta cooperation and broader participant involvement.
    • Establishing humanitarian corridors that operate beyond junta-controlled areas, with the cooperation of EAOs, could lay the groundwork for inclusive engagement and build trust among conflicting parties.

    What role does India’s Foreign Policy play in addressing the Myanmar crisis? (Way forward)

    • Strategic Engagement and Regional Connectivity: Under its Act East Policy, India invests in key infrastructure projects like the Kaladan Multi-Modal Transit Transport Project, linking Myanmar and ASEAN.
    • Balanced Relations with Junta and Democracy Advocates: Need to principles of non-interference, India maintains ties with Myanmar’s military and democratic groups, addressing security needs while ethically supporting democratic aspirations.
    • As per Gujral Doctrine: India should engage constructively with Myanmar, respecting its sovereignty, promoting regional connectivity, and fostering dialogue among all stakeholders to enhance stability and mutual prosperity.

    Mains PYQ:

    Q Evaluate the economic and strategic dimensions of India’s Look East Policy in the context of the post-Cold War international scenario. (UPSC IAS/2016)

  • India, China reach deal on easing LAC tensions 

    Why in the News?

    India and China announced an agreement on patrolling arrangements, resolving the military standoff along the Line of Actual Control (LAC), as per government officials.

    What are the key components of the agreement between India and China?

    • Patrolling Arrangements: The agreement includes the resumption of patrolling along the Line of Actual Control (LAC) in previously disputed areas, where patrolling had been stopped since 2020.
    • Disengagement and Buffer Zones: The agreement aims to complete the disengagement process by restoring the situation to pre-2020 levels, including addressing issues at friction points like Demchok and Depsang.
      • The existence or adjustment of buffer zones, which were established to prevent clashes, remains undisclosed.
    • Diplomatic and Military Dialogue: The resolution is a result of multiple high-level meetings and negotiations, involving Foreign Ministers, the Working Mechanism for Consultation and Coordination (WMCC), and military commanders from both sides.
    • Return to Pre-2020 Status: Indian officials have indicated that the situation at the LAC will revert to what it was before 2020, although further steps like deinduction and demobilization of troops still need to be undertaken.

    How does this agreement impact the broader geopolitical landscape in the region?

    • Regional Stability: The agreement could contribute to stability along the India-China border and help reduce military tensions in the region, especially at sensitive points like the Galwan Valley, where past clashes occurred.
    • Influence on China-India Relations: It marks a potential thaw in India-China relations, creating a conducive atmosphere for high-level diplomatic engagements, possibly including a meeting between Prime Minister Modi and President Xi Jinping during the BRICS summit.
    • Implications for Multilateral Forums: The agreement preceding the BRICS summit indicates a strategic effort to avoid bilateral friction overshadowing multilateral diplomacy. A peaceful resolution along the border could bolster cooperation within BRICS and other regional platforms.
    • Signal to Neighboring Countries: The resolution may influence the perception of China’s border policies among other neighboring countries in Asia, possibly setting a precedent for dispute resolution.

    What are the implications for India’s national security strategy?

    • Shift Towards Dialogue and Diplomacy: The agreement underscores India’s willingness to resolve border issues through diplomatic means while maintaining a strong defense posture.
    • Strategic Focus on LAC Management: Although disengagement is underway, continued monitoring and readiness at the LAC will remain crucial. The agreement may lead to a recalibration of India’s military deployments and infrastructure development along the border.
    • Enhanced Security Coordination: With border tensions easing, India can refocus on comprehensive security strategies involving cooperation with allies and partners in the Indo-Pacific region, addressing broader challenges such as maritime security and countering China’s influence.
    • Preparedness for Future Contingencies: The completion of disengagement does not eliminate future risks. India will likely continue to strengthen its border infrastructure and military capabilities as a precaution against any future incursions.

    Way forward: 

    • Strengthen Diplomatic Engagements: India should prioritize continuous diplomatic dialogues with China to solidify the agreements reached and prevent future misunderstandings.
    • Enhance Border Infrastructure and Defense Preparedness: India should invest in improving border infrastructure and logistics to support troop mobility and supply lines.
  • India, Pakistan avoid blaming each other at SCO meeting

    Why in the News?

    External Affairs Minister S. Jaishankar informally interacted with Pakistan’s Prime Minister Shehbaz Sharif and Foreign Minister Ishaq Dar during the SCO summit’s concluding lunch in Islamabad.

    About SCO:

    • The SCO was established in 2001 to promote regional cooperation in security, economic development, and cultural exchange among its member states, which include China, India, Russia, Pakistan, and several Central Asian countries.
    • The organization represents around 40% of the global population, making it one of the largest regional groups. Its influence spans economic, political, and security dimensions.
    • The SCO focuses on combating terrorism, separatism, and extremism (the “three evils”), enhancing regional security, and fostering economic collaboration among member states.
    • The SCO holds annual summits, rotating between member countries, to discuss various topics ranging from economic cooperation to regional security challenges.

    What were the major insights during SCO 2024 summit?

    • Diplomatic Engagement: The informal interaction between India’s External Affairs Minister and Pakistan’s leadership marked a notable shift in diplomatic engagement, highlighting a more constructive tone compared to previous meetings.
    • Avoidance of Contentious Issues: Both India and Pakistan’s leaders refrained from discussing sensitive topics such as Kashmir, indicating a focus on cooperation rather than conflict during this summit.
    • Collective Responsibility: The Indian foreign minister emphasized the need for an “honest conversation” about trust and cooperation in the SCO region, highlighting the importance of addressing concerns over terrorism and separatism in fostering trade and connectivity.
    • Positive Outcomes: The summit resulted in the signing of eight documents, including proposals for economic dialogue, cooperation in the creative economy, and strategies for addressing challenges in areas like green development and digital economy.
    • Future Cooperation: The joint statement from the summit emphasized optimizing the region’s potential in various sectors such as trade, innovation, and climate change, indicating a commitment to collaborative economic growth.

    Challenges for India: 

    • India-Pakistan Relations: Pakistan’s membership complicates India’s position within the SCO. The rivalry between India and Pakistan can hinder India’s ability to assert its interests effectively, especially since China and Russia are influential players in the organization.
    • Balancing Relations: India’s participation in the SCO necessitates a delicate balancing act between its traditional ties with Russia and its growing partnerships with Western nations. This is particularly challenging given the SCO’s often anti-Western posture.

    Way forward: 

    • Strengthen Regional Cooperation: India should prioritize common interests within the SCO, such as counter-terrorism, economic development, and connectivity, while using diplomatic channels to reduce tensions with Pakistan and maintain constructive dialogue.
    • Strategic Balancing: India can pursue a balanced approach by aligning its SCO engagements with its broader foreign policy goals, leveraging partnerships with Russia and Central Asia while carefully managing its ties with Western nations.
  • Canada accuses Indian diplomats?

    Why in the News?

    India-Canada relations have reached a historic low after Justin Trudeau’s government accused Indian officials of being involved in “activities that pose a significant threat to public safety,” claims that New Delhi has strongly rejected as “preposterous.”

    What specific allegations has Canada made against Indian diplomats?

    • Violent Extremism: Canadian authorities claim that agents of the Government of India have been involved in violent extremist activities affecting both countries.
    • Involvement in Criminal Activity: The Royal Canadian Mounted Police (RCMP) have accused Indian diplomats and consular officials of being linked to homicides, acts of violence, and the use of organized crime to create a sense of insecurity among the South Asian community in Canada.
    • Foreign Interference: Investigations suggest Indian officials leveraged their positions to collect information on certain individuals or groups in Canada, either directly or through proxies. This intelligence was allegedly shared with the Research and Analysis Wing (RAW) in India.
    • Threats and Coercion: The allegations include coercion tactics where individuals in Canada were reportedly threatened regarding their immigration status or faced risks to their family members in India.
    • Connections with Organized Crime: There are claims that Indian intelligence conveyed information to criminal networks in India, allegedly linked to gangster Lawrence Bishnoi, who is in custody in India. These networks are suspected of intimidating or targeting Canadians of South Asian descent.
    • Involvement in Assassinations: The controversy began with the assassination of Khalistani activist Hardeep Singh Nijjar in Surrey, and was further linked to the killing of Sukhdool Singh Gill in Winnipeg. Both incidents allegedly have ties to Indian government directives.

    How has India responded to Canada’s accusations?

    • Denial of Allegations: India has categorically dismissed the allegations as “absurd” and “preposterous.” Indian authorities have rejected claims of any involvement in criminal activities in Canada or targeting the Sikh community.
    • Accusations of Canadian Tolerance for Extremism: New Delhi has countered by accusing Canada of allowing anti-India elements and Khalistani separatist groups to operate freely, impacting India’s sovereignty and security.
    • Denial of Diplomatic Cooperation: Reports suggest that while India initially agreed to cooperate with the Canadian investigation, it later denied visas to RCMP officials who intended to share evidence with Indian counterparts.

    What actions have both countries taken in retaliation?

    • Expulsion of Diplomats: Following Canada’s expulsion of an Indian diplomat, India retaliated by expelling a senior Canadian diplomat, escalating the diplomatic dispute.
    • Visa Suspension: In response to the diplomatic tensions, India suspended visa services for Canadian citizens, citing security concerns for Indian diplomatic personnel in Canada.
    • Reduced Diplomatic Presence: The crisis has resulted in both nations significantly scaling back their diplomatic staff, affecting consular services and visa issuance.
    • Diplomatic Disengagement: India’s foreign minister has hinted at limiting diplomatic interactions with Canada, reflecting the deterioration in bilateral ties.

    What are the potential implications of this diplomatic crisis for both sides?

    • Bilateral Relations: The row represents a historic low in India-Canada relations. Both nations may experience prolonged diplomatic disengagement, adversely affecting cooperation in trade, education, and defence.
    • Economic Impacts: Canada is a significant partner for Indian students and the Punjabi diaspora, which could face disruptions in visa issuance, immigration processes, and consular services.
    • Geopolitical Ramifications: The dispute may strain India’s relations with Western allies, including the United States, which has strong ties with both India and Canada.
    • Division in Diaspora Communities: The Sikh community in Canada could be further divided, with escalating tensions around pro-Khalistan activities. Allegations against Indian officials may also increase anti-India sentiments among diaspora groups.

    Way forward: 

    • Diplomatic Engagement and De-escalation: Both countries should prioritize diplomatic channels to de-escalate tensions, perhaps through neutral intermediaries or international platforms, ensuring that the crisis does not further damage long-term relations, trade, and people-to-people ties.
    • Focused Cooperation on Extremism and Criminal Activity: A joint task force or collaborative investigation involving both nations could be set up to address concerns about violent extremism and criminal activity, fostering transparency and trust, while respecting sovereignty and legal frameworks.
  • UAE to review India’s concerns on surge in Silver, Platinum Alloy imports

    Why in the News?

    India has raised concerns over the increase in imports of silver products, platinum alloy, and dry dates from the UAE under the Free Trade Agreement (FTA).

    Issues Raised by India:

    • The Global Trade Research Initiative (GTRI) has called for an urgent review of the India-UAE CEPA, citing concerns that the agreement allows unlimited imports of gold, silver, platinum, and diamonds with zero tariffs.
    • GTRI claims that many of these imports do not meet Rules of Origin requirements and thus should not qualify for concessions.
      • India’s gold and silver imports from the UAE increased by 210% to $10.7 billion in 2023-24.
      • India allows customs duty concessions of 7% on silver and 1% on 160 metric tonnes of gold under the agreement.
    • India also requested that the Indian Jewellery Exposition Centre in Dubai be classified as a Designated Zone to allow domestic jewellery manufacturers to benefit from concessional duties, including those not registered under UAE’s domestic regulations.
    • India also requested the UAE to grant recognition to the i-CAS (India Conformity Assessment Scheme) Halal scheme to simplify the certification process and boost exports of animal products.
    • The UAE expressed its willingness to review this request after consulting internal stakeholders, including federal tax authorities.

    India-UAE Trade Relations:

    Details
    Volume • The UAE is India’s 3rd largest trading partner with $83.65 billion in bilateral trade in 2023-24.
    • Trade between India and UAE grew from $180 million in the 1970s to $85 billion in 2022-23.
    Comprehensive Economic Partnership Agreement (CEPA) • Signed in February 2022, making India the first country to sign such an agreement with the UAE.
    • CEPA has slashed tariffs on 80% of goods and offers zero duty access to 90% of Indian exports to the UAE.
    Non-Oil Trade Target • The target of reaching $100 billion in non-oil trade by 2030 is seen as achievable given current growth trends.
    Investment from UAE • UAE’s investments in India are around $20-21 billion, with $15.5 billion as Foreign Direct Investment (FDI).
    • The Abu Dhabi Investment Authority (ADIA) has invested in projects like the NIIF Master Fund and renewable energy initiatives.
    India’s Exports to UAE • UAE is India’s 2nd largest export destination after the US, with exports worth $31.61 billion in 2022-23.
    • Key exports include petroleum products, gems, food items, textiles, and engineering goods.
    India’s Imports from UAE • UAE is a critical partner for India’s energy security.
    • India imports petroleum, gems, minerals, and chemicals from UAE.
    • UAE is India’s 4th largest crude oil supplier and 2nd largest for LNG and LPG.

     

    PYQ:

    [2022] How will I2U2 (India, Israel, UAE and USA) grouping transform India’s position in global politics? 

  • [11th October 2024] The Hindu Op-ed: The U.K. and ‘leaving lessons’ from the Indian Ocean

    PYQ Relevance:

    Q) What do you understand by ‘The String of Pearls’? How does it impact India? Briefly outline the steps taken by India to counter this. (UPSC CSE 2013)
    Q) Explain the formation of thousands of islands in the Indonesian and Philippines archipelagos. (UPSC CSE 2014)
    Q) Project ‘Mausam’ is considered a unique foreign policy initiative of the Indian government to improve relationships with its neighbors. Does the project have a strategic dimension? Discuss (UPSC CSE 2015)
    Q) Why is India considered as a subcontinent? Elaborate your answer. (UPSC CSE 2021)

    Mentor’s Comment: The Chagos Archipelago consists of 58 islands and is located approximately 500 km south of the Maldives in the Indian Ocean.  The French were the first to colonize Mauritius along with the Chagos Islands in 1715.  In the late 18th century, the French brought in slave labor from Africa and India to work in newly established coconut plantations. However, the UK took control of the region in 1814 after the fall of France’s Napoleon Bonaparte.  

    Today’s editorial by Mohamed Nasheed emphasizes the importance of the United Kingdom’s approach to its colonial legacy in the Indian Ocean, particularly concerning the Chagos Archipelago. It highlights the need for sustainable marine conservation and collaborative governance as Britain prepares to relinquish control over these islands.

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    Let’s learn!

    Why in the News?

    On October 9, 2024, the UK agreed to cede sovereignty of the Chagos Archipelago to Mauritius, while retaining sovereign rights over Diego Garcia for military purposes. The deal is historic as it recognizes Mauritius’s claims over the archipelago, which has been contested since the 1980s.

    Historical background of Chagos Archipelago:

    • Historically, these islands were part of the Maldives until their detachment by the UK in 1965 to establish the British Indian Ocean Territory (BIOT).
    • This move was made to facilitate a military base for the United States on Diego Garcia, leading to the expulsion of the indigenous Chagossians.
    • The ICJ had previously ruled in 2019 that the UK’s detachment of Chagos from Mauritius was illegal and called for an end to British colonial administration in the area.
    • This ruling added pressure on the UK to negotiate a resolution with Mauritius

    Key highlights of the agreement:

    • Resettlement of Chagossians: Mauritius can now resettle people on the Chagos Archipelago, except Diego Garcia, where Britain evicted 2,000 islanders for a US naval base. The deal grants Mauritius full sovereignty over the archipelago except Diego Garcia island
    • Establishment of the Trust Fund: The UK has also promised to create a new trust fund for the benefit of the people of Chagos. 

    Other major Initiatives taken and Collaborations needed:

    • Sovereignty and Decolonization: The sovereignty of the Chagos Islands has been a contentious issue, with historical ties to both Mauritius and the Maldives.
      • The UK has agreed to transfer sovereignty of the Chagos Islands to Mauritius while securing military rights over Diego Garcia for an initial period of 99 years.
    • Marine Conservation Efforts: Britain’s decision to place the entire Chagos Archipelago under protected status, emphasizing its significance for marine conservation is commendable.
      • The Maldives employs sustainable fishing techniques that minimize bycatch, contrasting with industrial fishing practices that threaten fish stocks.
    • Collaborative Future: As part of the decolonization process, it is crucial for island nations in the Indian Ocean—Maldives, Mauritius, Seychelles, and Sri Lanka—to collaborate on maintaining the protected status of Chagos.
      • Britain needs to learn from its past mistakes in decolonization, particularly regarding India’s Partition in 1947, which had severe human costs.

    How did the historical conflicts between the UK and France influence the sovereignty of the Chagos Islands?

    • The Chagos Islands were initially part of French colonial territory, known as Isle de France, where they established coconut plantations using enslaved African labor in the 18th century.
    • Following the defeat of Napoleon in 1814, the Treaty of Paris ceded Mauritius and its dependencies, including the Chagos Islands, to Britain. This marked the beginning of British administration over these territories.
    • In 1965, during preparations for Mauritian independence, the UK separated the Chagos Archipelago from Mauritius to create the British Indian Ocean Territory (BIOT). This move was motivated by strategic interests, particularly to establish a military base on Diego Garcia.
    • The UK forcibly removed the indigenous Chagossians to facilitate military operations, which has been condemned as a violation of human rights.
    • Despite the ICJ decision, pressure, and legal challenges, the UK maintained its claims over the islands due to their strategic military importance, particularly Diego Garcia.

    Conclusion: A respectful and collaborative exit strategy is needed for the UK from its Indian Ocean territories. It advocates for joint efforts among regional nations to ensure that marine conservation is prioritized while addressing historical grievances related to colonialism.

  • A re-balancing of India’s great power relations

    Why in the News?

    India’s participation in the sixth Quad Leaders’ Summit in Wilmington, Delaware, U.S., on September 21, 2024, has heightened expectations for strengthening security cooperation among the “four key maritime democracies in the Indo-Pacific.”

    How can India navigate its relationships with major powers?

    • Strategic Autonomy: India maintains a policy of non-alignment, balancing relations with both the U.S. and Russia. It is careful not to be drawn into formal alliances but seeks to leverage its partnerships for national interests.
    • Quad vs. Russia: India’s engagement with the U.S.-led Quad strengthens its Indo-Pacific strategy, while its ties with Russia (a Quad opponent) focus on maintaining historical military and strategic benefits.
    • Russia-China Dynamics: As Russia moves closer to China, India seeks to rebalance, ensuring its interests are not sidelined, particularly in the context of China’s growing influence in Asia and unresolved border disputes.
    • U.S. Partnership: While deepening ties with the U.S., India is cautious about fully aligning with Washington’s agenda (for exports), especially regarding tensions with Russia.

    What role does India play in Global Conflict Resolution?

    • As a Peace facilitator: India is increasingly positioning itself as a peace facilitator, evidenced by the NSA (Ajit Dowal) of India’s outreach to Russia and France regarding the Ukraine conflict and peace plan.
    • As a ‘Vishwa Bandhu’: India’s engagement with both Ukraine and Russia shows its willingness to serve as an interlocutor, navigating complex diplomatic terrains while pushing for dialogue in global conflicts.
      • India’s attempts to mediate in conflicts like Ukraine emphasize its independent foreign policy, aiming to project itself as a “Vishwa Bandhu” (friend to the world).

    What implications do Domestic Issues have on India’s Foreign Policy?

    • Economic Dependencies: India’s reliance on Russian military equipment and discounted oil affects its stance on the Ukraine war, pushing for a more nuanced approach in balancing U.S. and Russian relations.
    • Border Tensions with China: Domestic security concerns, such as the standoff at the LAC, influence India’s foreign policy decisions, especially in its cautious relationship with China despite economic interdependence.
    • Public Opinion and Strategic Decisions: India’s foreign policy must account for domestic perceptions of global powers, balancing national security with economic growth and political stability in a complex international environment.

    Way forward: 

    • Strengthen Strategic Autonomy: India should continue balancing its relationships with major powers by deepening economic and security ties with both the U.S. and Russia, while maintaining flexibility to protect its national interests, particularly in the Indo-Pacific and vis-à-vis China.
    • Expand Peace Diplomacy: India can further leverage its role as a mediator in global conflicts, enhancing its international standing by promoting dialogue and peace initiatives.
  • India signs $750-mn currency swap deal with forex-starved Maldives

    Why in the News?

    The RBI has announced a Currency Swap Agreement with the Maldives Monetary Authority (MMA) under the SAARC Currency Swap Framework 2024-27.

    India’s Financial Support to Maldives

    • India will extend financial support to the Maldives, providing $400 million under the US Dollar/Euro Swap Window.
    • Additionally, ₹30 billion (approximately $357 million) will be made available under the INR Swap Window.
    • The Currency Swap Agreement will remain valid until June 18, 2027.

    About SAARC Currency Swap Framework:

    Details
    Objective To provide short-term liquidity support to SAARC member countries during financial crises or instability.
    Administered by Reserve Bank of India (RBI)
    Launch Year 2012
    Countries Involved All SAARC members: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.
    Facility Swap arrangement in US Dollar, Euro, or Indian Rupee.
    Interest Rate Based on the currency borrowed, includes a margin over international benchmark rates.
    Purpose To address the balance of payment crises and provide financial stability.
    Recent Users Sri Lanka, Maldives

     

    Maldives’ Debt Situation

    • The Maldives’ debt is now estimated at 110% of its gross domestic product (GDP), with increasing risks of defaulting on its sukuk (Islamic bond).
    • A failure to make payments would mark the world’s first default of an Islamic bond.
      • Fitch Ratings estimates that the Maldives’ external debt obligations will reach $557 million by 2025 and exceed $1 billion by 2026.
      • The country’s foreign reserves stood at just $437 million at the end of August, only enough to cover one-and-a-half months of imports.
      • India provided a $50 million lifeline to the Maldives to help avoid this outcome.
    • The Export-Import Bank of India is owed nearly $400 million, while the Export-Import Bank of China is owed about $530 million as of last year.

    Significance of India’s Assistance

    • Debt Relief: India’s financial aid, including a $50 million lifeline, would help the Maldives avoid debt default and stabilize its economy.
    • Geopolitical Influence: With this, India can counter China’s influence in the Maldives, strengthening its strategic position in the Indian Ocean.
    • Diplomatic Reset: India’s support strengthens diplomatic relations, aiding the Maldives in debt restructuring and global partnerships.

    PYQ:

    [2019] In the context of India, which of the following factors is/are contributor/contributors to reducing the risk of a currency crisis?

    1. The foreign currency earnings of India’s IT sector
    2. Increasing the government expenditure
    3. Remittances from Indians abroad

    Select the correct answer using the code given below:

    (a) 1 only

    (b) 1 and 3 only

    (c) 2 only

    (d) 1, 2 and 3