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Subject: Bilateral Relations

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

  • 34 years of Soviet Invasion of Afghanistan

    afghanistan

    Central idea: The article discusses the Soviet Union’s withdrawal from Afghanistan 34 years ago, which marked the end of a nearly decade-long occupation.

    Fun fact:

    “Charlie Wilson’s War” is a 2007 American biographical comedy-drama based on the true story of Charlie Wilson, a former United States Congressman who played a key role in supporting the Afghan mujahideen during the Soviet-Afghan War of the 1980s.

    The film is notable for its depiction of the complex and often murky world of international politics and covert operations. It also highlights the unintended consequences of the US’s support for the Afghan mujahideen, which included the rise of the Taliban and the emergence of al-Qaeda.

     

    Why did the Soviet Union invade Afghanistan?

    • Establish influence: The Soviet Union invaded Afghanistan in December 1979 in an attempt to support a friendly communist government (Saur Revolution) that had seized power in Kabul earlier that year.
    • Prevent radicalization of its southern states: The Soviet Union saw the situation in Afghanistan as an opportunity to extend its influence in the region and to protect its southern borders from Islamic fundamentalism.
    • Countering US influence in Pakistan: The Soviet Union was concerned about the possibility of the United States gaining a foothold in Afghanistan and potentially using it as a base for attacks against the Soviet Union.

    What led to its withdrawal?

    • US-powered rebel groups: The Soviet Union’s occupation of Afghanistan faced fierce opposition from Afghan rebel groups, who were supported by the US and trained by Pakistan hoping that the jihadis would wage war on India and liberate Kashmir.
    • Huge casualties: The conflict turned into a protracted and costly war that lasted almost a decade, with the Soviet Union suffering significant casualties and eventually withdrawing its troops in 1989.
    • Fall of USSR: After the Soviets withdrew from Afghanistan in 1989, the Afghan government, which had been propped up by the Soviet Union, soon collapsed, and the country plunged into a civil war.

    Aftermath: Radicalization of Afghanistan

    • Rise of Taliban: Various factions vied for power, and the Taliban emerged as a dominant force. The Taliban, a hardline Islamist group, took control of the country in 1996 and imposed a strict interpretation of Islamic law. This rule was marked by brutality and oppression, including the widespread use of public executions, amputations, and other forms of punishment.
    • Safe havens for terror: The group provided a safe haven for Al Qaeda, which was responsible for the 9/11 attacks in the US.

    How US came to Afghanistan?

    • In response to the 9/11 attacks, the United States led a coalition of forces in an invasion of Afghanistan in 2001.
    • The Taliban was quickly ousted from power, and a new ‘democratic’ government was established.
    • However, the conflict continued, and the Taliban gradually regained strength, launching attacks on government forces and civilian targets.

    Why did the US left Afghanistan?

    In August 2021, the US completed its withdrawal of troops from Afghanistan, marking the end of a 20-year-long military presence in the country.  It decided to withdraw its troops from Afghanistan for several reasons-

    • Massive cost: The conflict had lasted for two decades, and the United States had spent over $2 trillion on the war effort.
    • Huge casualties: The number of lives lost by the United States in the war in Afghanistan is a matter of debate, but it is estimated that more than 2,400 US military personnel were killed in the conflict.
    • Mission accomplished: The US had achieved many of its initial objectives in Afghanistan, such as dismantling Al Qaeda’s infrastructure and removing the Taliban from power.
    • Foreign policy shift: The withdrawal of US forces was part of a broader shift in US foreign policy towards a focus on great power competition, particularly with China and Russia.
    • America first policy: The US had also sought to end what it saw as “endless wars” in the Middle East and refocus its attention on domestic priorities.

    Assessing Taliban rule now

    Since taking control of Afghanistan in August 2021, the Taliban has taken a number of steps to consolidate its power and impose its ideology on the Afghan people. Some of the ways in which the Taliban has been accused of ruining Afghanistan are:

    • Imposing Sharia: The Taliban is an Islamist extremist group that seeks to impose its strict interpretation of Islamic law on the country.
    • Human rights abuses: The Taliban has been accused of committing widespread human rights abuses, including extrajudicial killings, summary executions, and forced disappearances.
    • Oppression of women: The group has also targeted women and girls, imposing strict dress codes and limiting their access to education and employment.
    • Restrictions on free speech and the press: The Taliban has cracked down on freedom of expression and the press, shutting down independent media outlets and arresting journalists and activists who oppose their rule.
    • Economic and humanitarian crisis: The Taliban’s takeover has caused an economic and humanitarian crisis in Afghanistan, with many people struggling to access basic necessities like food and medical care.
    • International isolation: Many countries have suspended aid and diplomatic relations with Afghanistan, and the UN has expressed concern about the group’s human rights record.

    How is India helping the Afghan people cause?

    India has been actively involved in providing humanitarian aid to the people of Afghanistan, especially in the wake of the Taliban’s return to power. Some of the ways in which India is helping the Afghan people are:

    • Providing food and medical aid: India has sent several consignments of food and medical aid to Afghanistan, including wheat, medicines, and other essential supplies. The aid is being delivered through various channels, including the Afghan Red Crescent Society and the UN.
    • Supporting refugees: India has a long history of providing support to Afghan refugees, and the government has pledged to continue this tradition in the wake of the Taliban’s return to power. India has said it will grant visas to Afghan nationals who are seeking refuge, and the government has also set up a new portal to streamline the visa application process.
    • Diplomatic efforts: India has been working to build international support for the Afghan people, and the government has been in touch with various countries and international organizations to coordinate relief efforts. India has also called for an inclusive political settlement in Afghanistan that respects the rights of all Afghan citizens, including women and minorities.

    Conclusion

    • The situation in Afghanistan is complex and challenging, and there are no easy solutions.

     

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  • Two years of Myanmar Coup and Concerns for India

    myanmar coup

    It is exactly two years since the Myanmar army seized power.

    Myanmar Coup: A quick recap

    • A coup in Myanmar began on the morning of 1 February 2021, when democratically elected members of the country’s ruling party, were deposed by the Tatmadaw—Myanmar’s military.
    • The coup occurred the day before the Parliament of Myanmar was due to swear in the members elected at the 2020 election, thereby preventing this from occurring.
    • Pivot leader Aung San Suu Kyi was detained, along with ministers, their deputies, and members of Parliament.

    India’s continuing policy tightrope in Myanmar

    • For some three decades, India has pursued a ‘Dual-Track Policy’ which essentially means doing business with the junta.
    • India shares a 1,600 km border with Myanmar along four NE states.
    • It has a maritime boundary in the Bay of Bengal, the failure of the Myanmar state presents a foreign policy dilemma that it is struggling to resolve.
    • It has ruled over Myanmar for all but five years since 1990, with tea and sympathy for the pro-democracy forces.

    Why in news now?

    Ans. Pro-democracy armed rebellion within

    • Hundreds of armed pro-democracy civilian resistance groups (People’s Defence Forces) are fighting the junta and turning swathes of the country into no-go areas for the army.
    • In addition some among the two dozen ethnic armed organisations (EAOs) that have been fighting the Myanmar state for autonomy for the last seven decades, have joined hands with the PDFs.

    India’s concerns

    • Chinese inroads: Over the last two decades, as China with its deep pockets emerged as a rival in the region, engaging with the junta was also seen as a way to retain Indian influence in Myanmar.
    • No democratic restoration: Delhi had to calibrate this engagement during the “democratic transition” of the last decade and rebalance the dual track.
    • Narrowed interests: These are becoming apparent, even going by India’s narrowly defined national interests: border security management, and restricting China in Myanmar.
    • Limitations to strategy: India has limited to its old template of engagement— doing business with the military regime, encouraging it restore democracy, and offering sympathy to democratic forces.

    Recent success: Completion of Sittwe Port

    • In the first week of January, Sittwe port, developed by India as part of the Kaladan project, was ready for operation.
    • It is set to be inaugurated soon.

    Five ways in which India’s calculations have been upset

    • Bluff over connectivity: While maritime trade was one objective, the primary objective of this project, to provide alternate access to India’s landlocked north-east states, now seems like a bridge too far.
    • Huge refugee influx: Mizoram is hosting tens of thousands of refugees from the adjoining Chin state in Myanmar. Refugees have come into other Northeastern states, though in fewer numbers.
    • Clouds of terrorism: More dangerously, the recent bombing by the Myanmar Air Force of a Chin militia headquarters on the border with Mizoram, with shrapnel hitting the Indian side during this operation, triggered panic in the area.
    • Narcotics smuggling: Another potential cross-border spillovers is contained in the latest report of the UN Office for Drugs and Crime on Myanmar (Myanmar Opium Survey).
    • Supporting insurgents in India: Myanmar junta has recruited Indian insurgent group (IIGs) in regions adjoining Manipur and Nagaland to fight against the local PDFs and other groups.
    • Worsening of Rohingya crisis: The military cannot resolve the Rohingya crisis, another regional destabilizer.

    Way forward for India

    • Championing this cause in G20: India has projected its year-long presidency of the G20 as an opportunity to project the voice of the global south.
    • Extra-diplomatic engagement: India can open channels to the democratic forces and to some ethnic groups; it can work more actively with ASEAN; it could open an army-to-army channel with the junta; increase people-to-people channels; offer scholarships to Myanmar students like it did for Afghan students in a different era.
    • Ensuring fair elections: The junta is mulling elections later this year after rejigging the first-past-the-post system to proportional representation to undermine the NLD’s electoral might.

     

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  • India sends notice to Pakistan to amend 1960 Indus Water Treaty

    indus

    India announced that it wants to modify the 62-year-old Indus Water Treaty (IWT) with Pakistan.

    Why India issued notice to Pakistan?

    • Unsolicited disputes over Indian hydel projects: India cited Pakistan’s intransigence in resolving disputes over the Kishenganga and Ratle hydropower projects, both in Jammu and Kashmir.
    • Dragging arbitration: India protested Pakistan’s “unilateral” decision to approach a court of arbitration at The Hague.
    • A foul cry: Pakistan’s move to push the World Bank for a Court of Arbitration ran counter to the pre-existing channel of dispute resolution through a “neutral expert” appointed by the World Bank.
    • Renegotiating IWT: The decision to issue notice to Pakistan is a major step and could lead to the unravelling and renegotiation of the water sharing treaty.

    Why is Pakistan objecting?

    • Pakistan had first raised objections to India’s construction of the 330 MW Kishenganga hydroelectric project on the Jhelum river back in 2006.
    • It then objected to plans to construct the 850 MW Ratle Hydroelectric Project on the Chenab river as well.
    • Both India and Pakistan differred on whether the technical details of the hydel projects conformed with the treaty, given that the Jhelum and Chenab were part of the “western tributaries”.

    What is Indus Water Treaty (IWT)?

    • The Indus Waters Treaty is a water-distribution treaty between India and Pakistan, brokered by the World Bank signed in Karachi in 1960.
    • According to this agreement, control over the water flowing in three “eastern” rivers of India — the Beas, the Ravi and the Sutlej was given to India
    • The control over the water flowing in three “western” rivers of India — the Indus, the Chenab and the Jhelum was given to Pakistan.

    Basis of the treaty

    • Equitable water-sharing: Back in time, partitioning the Indus rivers system was inevitable after the Partition of India in 1947.
    • Empathizing the Partition: The sharing formula devised after prolonged negotiations sliced the Indus system into two halves.

    Why is India rethinking on this treaty?

    • Mostly favours Pakistan: Equitable it may have seemed, but the fact remained that India conceded 80.52 percent of the aggregate water flows in the Indus system to Pakistan.
    • Unnecessarily generous: It also gave Rs 83 crore in pounds sterling to Pakistan to help build replacement canals from the western rivers. Such generosity is unusual of an upper riparian.
    • Reclaiming riparian rights: India conceded its upper riparian position on the western rivers for the complete rights on the eastern rivers. Water was critical for India’s development plans.

    What were the rights accorded to India?

    • Limited irrigation: The treaty allowed India to use western rivers water for limited irrigation use.
    • Unrestricted commercial use: It gave powers for unrestricted use for power generation, domestic industrial and non-consumptive uses such as navigation, floating of property, fish culture, etc.
    • Hydel projects: It lays down precise regulations to build any water or hydel projects.
    • Addressing Pak’s concerns: The pact also gives the right to Pakistan to raise objections to designs of Indian hydroelectric projects on the western rivers.

    Significance of the treaty

    • Testimonial to peaceful coexistence: It is a treaty that is often cited as an example of the possibilities of peaceful coexistence that exist despite the troubled relationship.
    • Survived many hostilities: It has survived 3 crucial wars.
    • Most successful bilateral treaty: It is internationally regarded as an example of successful conflict resolution between two countries otherwise locked in a hostile relationship.

    Why has the treaty survived?

    • India’s generosity: It is for India’s generosity on Pakistan for sharing waters of its own rivers.
    • Free flow of waters: India has refrained from weaponizing waters. Pakistan cannot survive without this treaty.
    • Huge dependence Pak economy: About 80% of Pakistan’s agriculture depends on Indus and the riparian rivers waters.
    • Humanitarian grounds: Floods and droughts will starve ordinary Pakistanis while their politicians would still live in luxury.
    • India’s credibility: Backtracking on the treaty could affect India’s stand as global reliable partner who disrespects bilateral agreements.

    Why should India rethink?

    • Blow of terroristan: PM Modi’s words hold relevance that “Blood and waters cannot flow together”.
    • A tit for tat: If India wants, it can either flood or drought-starve Pakistan by not obligating to this treaty.

    Way forward

    • The role of India, as a responsible upper riparian abiding by the provisions of the treaty, has been remarkable.
    • However, India needs to rethink or re-negotiate this treaty.
    • Just like water affects ordinary Pakistanis, so does terrorism affects Indians.

     

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  • Chinese hydro-hegemony over Brahmaputra

    brahmaputra

    India has planned to build a buffer reservoir in the proposed Arunachal hydropower project to counter China’s proposed 60,000 MW Medog hydropower project on the Brahmaputra River.

    Brahmaputra hydrology: A tool of aggression for China

    • China has continued to use the water of river Brahmaputra for its interest and has intentionally created hazardous conditions for downstream states like India and Bangladesh.
    • Concerns over China’s proposed 60,000 MW hydropower in Medog, Tibet are influencing the design of a proposed hydropower project in Arunachal Pradesh’s Upper Siang district.
    • Still only in the planning stage, a ‘pre-feasibility report’ on the 11,000 MW project, or more than five times the size of the largest such projects in India – has been submitted.

    What is Medog super-dam Project?

    • China is planning a mega dam in Tibet able to produce triple the electricity generated by the Three Gorges—the world’s largest power station.
    • The structure will span the Brahmaputra River before the waterway leaves the Himalayas and flows into India.
    • It is billed as able to produce 300 billion kilowatts of electricity each year and said to be largest dam in the world once completed.

    India’s plan: To build buffer reservoir

    • The design of the proposed project incorporates a “buffer storage” of 9 billion cubic metres (or about 9 billion tonnes of water) during monsoonal flow.
    • This could act as a store of water worth a year’s flow that would normally be available from the Brahmaputra or buffer against sudden releases.

    Threats posed by Medog Project

    Chinese dams can hold large amounts of water, during times of droughts China could stop the flow of the river, jeopardizing the lives of millions of people in Arunachal Pradesh, Assam, and Bangladesh.

    • Reduced flow in the Brahmaputra: The 60,000 MW dam in Medog could reduce the natural flow of water from the Brahmaputra.
    • Triggering artificial floods: Away from India during lean patches, it might be used to trigger “artificial floods” in the Brahmaputra basin.
    • Degradation of the entire basin: Silt carried by the river would get blocked by dams leading to a fall in the quality of soil and eventual reduction in agricultural productivity.
    • Seismic threats: Seismologists consider the Himalayas as most vulnerable to earthquakes and seismic activity.
    • Ecological threats: The cumulative impact of these two megaprojects might aggravate ecological degradation, converting lotic ecosystems into lentic ones.
    • Water security: Damming Brahmaputra would result in water security in an era of unprecedented shifting climate patterns.
    • Catastrophic threat: Any damage to the mega dam, if constructed here, will cause dam breaching and consequent flood havoc in India and Bangladesh.

    Why are such issues unaddressed?

    • No treaty on water sharing: We do not have any bilateral or multilateral treaty or any other effective and formal instrument of understanding for collaborative management of the Brahmaputra River.
    • Hostility over borders: Undemarcated borders are at the core of all hostilities between India and China.

    India’s dilemma

    • Flood control dichotomy: India’s hydropower projects, while potentially beneficial in controlling flooding from the Brahmaputra in Assam and Arunachal Pradesh.
    • No deterrence to China: This might not necessarily serve as a strategic deterrent to China.
    • Resentment to Bangladesh: A large dam in India may help control floods within India but might open fresh disputes over water sharing with Bangladesh downstream.

    Way forward

    • There must be collaborative management of our shared rivers.
    • Hydro-diplomacy should form an important ingredient of Indian foreign policy, especially as India shares river basins with neighbors.

    Brahmaputra River

    brahmaputra

    • Origin → Chemayungdung Glacier (Kailash Range, Tibet)
    •     In Tibet, known as TSANG – PO
    •     In China, known as YARLUNG ZANBO
    •     Forms grand canyon in Tibet
    •     Turns southward near Namcha – Barwa
    •     Enters Arunachal Pradesh as Dihang River at Sadiya, emerging from the mountains
    •     Joined by Dibang river from the north & Lohit river from the south → Known as Brahamputra
    •     Turns at Dhubri to enter into Bangladesh
    •     After joining Teesta, known as Jamuna in BD
    •     Joins Ganga & Megna → Merges to BOB.
    •     Forms many river island of which Majuli is world 2nd largest one
    •     Major tributaries → Dihang, Lohit, Subansiri, Teesta, Meghna (Barack in Assam), Manas

     

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  • Indian Army and PLA clash near Arunachal Border

    arunachal-lac

    The Indian troops deployed in the area of face-off in Tawang sector gave a befitting response to the Chinese troops and the number of Chinese soldiers injured in the clash is more than the Indian soldiers.

    Increased clashes at LAC

    • In January 2021, Indian and Chinese troops were involved in a face-off in a disputed stretch in Nakula area of North Sikkim.
    • In 2017, troops of India and China were engaged in a 73-day stand-off in Doklam tri-junction area which even triggered fears of a war between the two neighbours.

    What is LAC- the Line of Actual Control?

    • The LAC is the demarcation that separates Indian-controlled territory from Chinese-controlled territory.
    • India considers the LAC to be 3,488 km long, while the Chinese consider it to be only around 2,000 km.
    • It is divided into three sectors: the eastern sector which spans Arunachal Pradesh and Sikkim, the middle sector in Uttarakhand and Himachal Pradesh, and the western sector in Ladakh.
    • The LAC is only a concept – it is not agreed upon by the two countries, neither delineated on a map nor demarcated on the ground.

    When did India accept the LAC?

    • The LAC was discussed during Chinese Premier Li Peng’s 1991 visit to India, where PM P V Narasimha Rao and Li reached an understanding to maintain peace and tranquillity at the LAC.
    • India formally accepted the concept of the LAC when Rao paid a return visit to Beijing in 1993 and the two sides signed the Agreement to Maintain Peace and Tranquillity at the LAC.
    • The reference to the LAC was unqualified to make it clear that it was not referring to the LAC of 1959 or 1962 but to the ‘LAC’ at the time when the agreement was signed.
    • To reconcile the differences about some areas, the two countries agreed that the Joint Working Group on the border issue would take up the task of clarifying the alignment of the LAC.

    Issues with LAC

    • India’s claim line is the line seen in the official boundary marked on the maps as released by the Survey of India, including both Aksai Chin and Gilgit-Baltistan.
    • In China’s case, it corresponds mostly to its claim line, but in the eastern sector, it claims entire Arunachal Pradesh as South Tibet.
    • However, the claim lines come into question when a discussion on the final international boundaries takes place, and not when the conversation is about a working border, say the LAC.

    Why is LAC so disputed?

    • The delineation of the LAC has also not been done based on the accepted norms of control.
    • This has resulted in the existence of a number of areas of differing perceptions all across the LAC which is the primary cause of conflict.
    • China has changed its documented stance and has been looking for justifications for the conflict escalation.

    Worry for India

    • China is developing infrastructure in the Indian-claimed areas.
    • Moreover, it is being developed at an unprecedented pace by China in these areas.
    • These are potential sovereignty markers which will be a restricting factor for future negotiations.

     

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  • India, Iran discuss development of Chabahar Port

    Chabahar

    India and Iran held Foreign Office level consultations to continue cooperation for development of the Shahid Beheshti terminal of the Chabahar Port.

    Chabahar Port

    • In 2016, India signed a deal with Iran entailing $8 billion investment in Chabahar port and industries in Chabahar Special Economic Zone.
    • The port is being developed as a transit route to Afghanistan and Central Asia.
    • India has already built a 240-km road connecting Afghanistan with Iran.
    • All this were expected to bring cargo to Bandar Abbas port and Chabahar port, and free Kabul from its dependence on Pakistan to reach the outer world.
    • Completion of this project would give India access to Afghanistan and beyond to Turkmenistan, Uzbekistan, Tajikistan, Kyrgyzstan, Kazakhstan, Russia and Europe via 7,200-km-long multi-modal North-South Transport Corridor (INSTC).

    Why is Chabahar back in the news?

    • The visit is a chance to strengthen ties and the maritime relationship between the two countries.
    • Due to pandemic, there were less number of visits from India to Iran and vice-versa and the pace of the project is also allegedly slower.
    • This visit will also highlight the importance of Chabahar as a gateway for Indian trade with Europe, Russia and CIS [Commonwealth of Independent States] countries.
    • India is keen in developing the Shahid Beheshti port as a “a transit hub” and link it to the International North South Trade Corridor (INSTC), that also connects to Russia and Europe.

    What is India’s strategic vision for Chabahar?

    • When the first agreement for Chabahar was signed by then PM Atal Bihari Vajpayee in 2003, the plan had a three-fold objective:
    1. To build India’s first offshore port and to project Indian infrastructure prowess in the Gulf
    2. To circumvent trade through Pakistan, given the tense ties with India’s neighbour and build a long term, sustainable sea trade route and
    3. To find an alternative land route to Afghanistan, which India had rebuilt ties with after the defeat of the Taliban in 2001
    • Subsequently, PM Manmohan Singh’s government constructed the Zaranj -Delaram Highway in Afghanistan’s South.
    • It would help connect the trade route from the border of Iran to the main trade routes to Herat and Kabul, handing it over to the Karzai government in 2009.
    • In 2016, PM Modi travelled to Tehran and signed the agreement to develop Chabahar port, as well as the trilateral agreement for trade through Chabahar with Afghanistan’s President Ashraf Ghani.

    Commencement of operations

    • Since the India Ports Global Chabahar Free Zone (IPGCFZ) authority took over the operations of the port in 2018, it has handled 215 vessels, 16,000 TEUs (Twenty-foot Equivalent Units) and four million tons of bulk and general cargo.

    Why is it gaining importance?

    • In the last few years, a fourth strategic objective for the Chabahar route has appeared, with China’s Belt and Road Initiative making inroads in the region.
    • The government hopes to provide Central Asia with an alternate route to the China-Pakistan Economic Corridor (CPEC) through Iran for future trade.

    Why is the Chabahar dream taking so long to realise?

    • India’s quest for Chabahar has hit geopolitical road-block after road-block; the biggest issue has been over Iran’s relationship with western countries, especially the United States.
    • In years when western sanctions against Iran increased, the Chabahar project has been put on the back-burner.
    • However, the nuclear talks resulted in the Joint Comprehensive Plan of Action (JCPOA) in 2015 came into being, the Chabahar port has been easier to work on.
    • In 2018, the Trump administration put paid to India’s plans by walking out of the JCPOA and slapping new sanctions on dealing with Iran.
    • This led to the Modi government “zeroing out” all its oil imports from Iran, earlier a major supplier to India, causing a strain in ties.
    • India also snapped ties with Afghanistan after the Taliban takeover in August 2021, which put an end to the humanitarian aid of wheat and pulses that was being sent to Kabul via Chabahar.
    • When India restarted wheat aid this year, it negotiated with Pakistan to use the land route to Afghanistan instead.

     

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  • What India gains from FTA with Australia?

    australia

    After 10 years of negotiations, India and Australia have finally agreed an interim free trade deal called the India-Australia Economic Cooperation and Trade Agreement (ECTA).

    What is the news?

    • Australia’s parliament has ratified the ECTA.
    • The two countries has signed the ECTA on April 2 this year.
    • The trade deal will now come into effect on a mutually agreed date.

    Key terms of the India-Australia ECTA

    • Under the India-Australia ECTA, duties on 100 percent tariff lines will be eliminated by Australia, covering 6,000 broad sectors.
    • Meanwhile, India’s tariffs on 90 percent of Australian goods exports, including meat, wool, cotton, seafood, nuts, and avocados, will be removed.
    • From day one, Australia will offer zero-duty access to India for almost 96.4 percent of exports by value. Presently, many of these products have a 4-5 percent customs duty imposed by Australia.

    Key benefits offered

    • Exporters, businesses, workers, and consumers in both markets are set to benefit from the trade liberalization, market opening, and freer movement of people.
    • Implementation of the trade agreement will create an estimated 1 million jobs.
    • The India-Australia ECTA agreement is expected to increase bilateral trade to about US$45-50 billion in the next five years from the existing US$31 billion.
    • India hopes to increase its merchandise exports by US$10 billion BY 2026-27.

    Special benefits to India

    • IT sector to be a big gainer as it contributes significantly to both economies
    • Visas to be offered to Indian chefs and yoga instructors
    • Work opportunities for Indian students pursuing education in Australia
    • Cheaper raw materials from Australia will make Indian goods more competitive in the global market
    • Medicines approved under rigorous US and UK regulatory regimes will benefit from a fast track mechanism to get approval in Australia (improving market prospects for India’s patented, generic, and biosimilar medicines)

    Volume of India-Australia Trade

    • Australia is the 17th largest trading partner to India and India is Australia’s ninth largest trading partner.
    • In 2021-22, India’s goods exports to Australia valued US$8.3 billion and imports were about US$16.7 billion. Two-way trade in goods and services in 2020 were valued at US$24.3 billion.
    • India’s merchandise exports to Australia grew 135 percent between 2019 and 2021.
    • India’s exports consist primarily of a broad-based basket largely of finished products. Around 96 percent of Australia’s exports are raw materials and intermediate products.

    How will Indian IT firms benefit from the deal?

    • Along with ECTA, the Australian parliament has also approved an amendment to the Double Taxation Avoidance Agreement (DTAA) – a long-standing tax issue for Indian companies operating in Australia.
    • As per industry estimates, Indian IT firms lost more than $1 bn in taxes due to the existing provisions in DTAA.
    • Most IT firms take up projects where they do some portion of work on-site, and some from India.
    • However, Australian courts had ruled that even the work done from India can be taxed as per local Australian laws.
    • The same income was subject to taxes in India too.

    What’s in it for pharma companies?

    • ECTA says Indian drugs that have already been approved in the UK and US will get faster approval in Australia too.
    • India has the highest number of USFDA-approved sites and other stringent regulatory agencies approvals too — which will yield results once ECTA comes into effect.
    • India exported $387 mn worth of pharma products to Australia registering a growth of 11.58% FY22.
    • India can now expect share in Australia’s US$ 13 billion pharma market to go up.

    Will ECTA give a push to labour-intensive industries?

    • Getting easier access for apparel, textiles, leather, footwear, gems & jewellery, furniture, machinery and electrical goods in western markets is India’s key aims in trade deals.
    • ECTA will see India getting zero duty on 98.3% of tariff lines from the day the agreement comes into force and on 100% of tariff lines within five years.

    Can India cut its trade deficit with Australia?

    • At the moment, Australia exports much more to India than it imports.
    • During the last financial year, India had a trade deficit of $8.5 billion with Australia with $8.3 billion worth of exports and $16.8 billion worth of imports.
    • Entering the Australian market is not just about lower tariffs as Australia is already a very open economy.
    • There already are firmly established players in Australia and displacing them would need cutting trade costs and signing a comprehensive deal.

     

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  • The case of India-UK Free Trade Agreement

    Free Trade Agreement

    Context

    • To achieve the export target of $2 trillion by 2030, India is going the whole hog on free trade agreements (FTAs). India is negotiating FTAs with countries such as the European Union, Canada, the U.K., and Israel.

    Importance of FTA

    • FTA include multiple trade aspects: FTAs cover a wide array of topics such as tariff reduction impacting the entire manufacturing and the agricultural sector; rules on services trade; digital issues such as data localization; intellectual property rights that may have an impact on the accessibility of drugs; and investment promotion, facilitation, and protection.
    • Great impact on economy and society: Consequently, an FTA has a far-reaching impact on the economy and society. Given this, one legitimately expects transparency and greater scrutiny of the FTA process both during and after the negotiations.

    Free Trade Agreement

    What are the problems with Indian FTA negotiations?

    • Lack of transparency in negotiations: India negotiates most FTAs behind closed doors with very little information about the objectives and processes followed and negligible scrutiny.
    • No robust framework for FTA negotiations: This is not the case in other countries with whom India is negotiating such an FTA. In the U.K., for example, there are several robust mechanisms that foster a certain degree of transparency in the FTA negotiations. Furthermore, there are institutional apparatuses that enable the scrutiny of the actions of the executive, during and after the signing of the FTA.

    Free Trade Agreement

    Case study of FTA framework in U.K

    • Detailed information on FTA’s: Department of International Trade (DFIT), U.K., publishes a policy paper laying down the strategic objectives behind negotiating an FTA and why it is important for the U.K. to have an FTA with a particular country. This policy paper is fairly detailed listing the specific advantages of signing an FTA such as the economic gains expected, distributional impacts, the environmental impact, and the labour and human rights dimensions of the FTA.
    • Inputs from stakeholders: The policy paper that the DFIT publishes also contains the inputs and responses received by various stakeholders such as businesses, non-governmental organizations, and others. Furthermore, the policy paper also explains the government view on specific suggestions
    • FTA scrutiny by parliament: In the U.K., the strategic objectives identified by the government for signing an FTA are scrutinized by the U.K. Parliament. This job is performed by the International Agreements Committee (IAC) of the British Parliament. The IAC hears expert witnesses on the FTA, critically examines the government’s strategic objectives for each FTA under negotiation, and offers key recommendations wherever it finds gaps in the government’s approach. The U.K. government then responds to these recommendations.
    • Parliament has to ratify the FTA: In the U.K, under the Constitutional Reform and Governance Act, 2010, the executive has to lay down a treaty before the British Parliament for 21 sitting days with an explanatory memorandum before ratifying it. This allows Parliament to be apprised of the treaty the executive is going to ratify.

    Free Trade Agreement

    The contrast case of India’s FTA

    • No publicly produced document in India: In India, no such document is produced publicly that makes a case for signing an FTA and assessing its impact on the environment and society at large. The Commerce Ministry the nodal body dealing with FTAs on its website provides the bare minimum information about FTA negotiations.
    • No record of discussion with the stakeholders: Seemingly, the Commerce Ministry also undertakes stakeholder consultations and inter-ministerial meetings but there is no public record of these discussions and the government’s response to the concerns of stakeholders.
    • No parliamentary scrutiny: In India, there is no mechanism for such parliamentary scrutiny of the executive’s actions during the FTA negotiations. India’s parliamentary system allows for department-related parliamentary committees that discuss various topics of importance and offer recommendations. However, the Parliamentary Standing Committee on Commerce (PSCC) rarely scrutinises the Indian government’s objectives behind negotiating and signing an FTA.
    • No role for parliament to ratify the FTA: In India, there is no mechanism for any role of Parliament in the ratification of treaties including FTAs. Entering into treaties and matters incidental to it such as negotiations, signing and ratification are within the constitutional competence of Parliament. But, Parliament in the last seven-plus decades has not exercised its power on this issue, thus giving the executive unfettered freedom in negotiating, signing, and ratifying treaties including FTAs.

    Recommendations for Improving the India’s FTA framework

    • Publicise the objectives of FTA: India should take a leaf out of the U.K. book and develop a law on entering treaties including FTAs. This law should have the following parts. The executive should make a clear economic case outlining its strategic objectives publicly for entering into negotiations for a treaty such as an FTA.
    • Mandatory consultation with all stakeholders: The executive should be under an obligation to consult all stakeholders, respond to their concerns and make this information publicly available.
    • Dedicated parliamentary committee to scrutinize the FTA: The Indian Parliament should constitute a committee on the lines of the U.K.’s IAC that will scrutinise the strategic objectives behind entering into an FTA.
    • Mechanism to ratify the FTA by parliament: The executive should place the FTA on the floor of Parliament for a certain duration, allowing Parliament to debate it, before ratifying it.

    Conclusion

    • While the executive’s constitutional prerogative of entering into an FTA or international treaties, in general, is indisputable, this power should be exercised in a manner that makes the executive answerable. After all, an integral facet of democracy is to hold the executive to account for its actions. It should be no different for negotiating international treaties including FTAs.

  • What is the East Asia Summit?

    Vice President Jagdeep Dhankhar addressed the East Asia Summit on the last day of his visit to Cambodia, as the three-day Association of South East Asian Nations (ASEAN) summit concluded.

    East Asia Summit

    • Simply, the EAS is an ASEAN initiative and refers to the annual Meeting of Heads of States/Governments of these countries, where they are able to discuss common concerns and interests.
    • Beginning in 2005, 16 participating countries comprised EAS, with their first meeting in Kuala Lumpur, Malaysia.
    • These members were the 10 ASEAN countries, Australia, China, India, Japan, New Zealand, and the Republic of Korea.
    • ASEAN’s 10 member countries are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
    • The United States and the Russian Federation joined at the 6th East Asia Summit in 2011.

    Why was it created?

    • Its creation was based on the idea of enhancing cooperation among East Asian countries and those in the neighbouring regions.
    • Six priority areas of cooperation were identified – environment and energy, education, finance, global health issues and pandemic diseases, natural disaster management, and ASEAN Connectivity.

    Topics discussed

    The following issues have been discussed by the countries

    • Chinese claims over the South China Sea
    • United Nations Convention on the Law of the Sea (UNCLOS),
    • Terrorism
    • Actions of North Korea and
    • Conflict situation in Myanmar

    EAS’s links with India

    • This year marks the 30th anniversary of ASEAN-India relations and is being celebrated as the ASEAN-India Friendship Year.
    • In a joint statement, ASEAN-India acknowledged the deep civilizational linkages, maritime connectivity, and cross-cultural exchanges between Southeast Asia and India.
    • All these have grown stronger over the last 30 years, providing a strong foundation for ASEAN-India relations.

    New developments

    • India has announced an additional contribution of USD 5 million to the ASEAN-India science and technology fund.
    • It would enhance cooperation in sectors of public health, renewable energy and smart agriculture.

     

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  • Fateful Triangle China,USA and India and Changing World Order

    China

    Context

    • America’s national security strategy issued by the Joe Biden Administration last week and the Chinese Communist Party’s 20th Congress this week promise to reshape the geopolitics of Asia and the Indo-Pacific.

    Historical background of USA-CHINA

    • Context of World War II: Asia has seen multiple phases in the US-China relationship. In the second half of the 19th century, American missionaries began to arrive in China and began to generate empathy for the nation. During World War II, Washington backed Chinese nationalists in their fight against Japanese occupation.
    • US efforts to isolation China: The US tried to isolate China from 1949 when the communists prevailed over the nationalists.
    • Cooperation to counter Soviet: The 1970’s saw the US and communist China come together to counter the Soviet Union.
    • Multiple Economic engagement: The 1980s saw the beginning of an economic engagement that turned into a huge commercial and technological partnership from the 1990s.

    China

    What is the USA’s assumption and China’s ambition?

    • China as responsible stakeholder: The US establishment dismissed the idea of China as potential threat and bet that Beijing could become a “responsible stakeholder” in the world order.
    • Democratization of Chinese society is inevitable: America also believed that China’s growing economic prosperity would inevitably lead to greater democratisation of its society.
    • Visible decline of west: China, however, has steadily moved in the other direction, especially under Xi, who has convinced himself that the West is in terminal decline.
    • China’s ambition to change the world order: Xi is determined to seize this moment to reshape the Asian as well as the global order to suit Chinese interests. At the same time, China has become increasingly repressive at home.
    • Explicit expression of ambition: Xi made no effort to hide China’s new geopolitical ambition nor has he been defensive about his authoritarian rule. This, in turn, bestirred the US into rethinking its China policy in the second decade of the 21st century.

    China

    How China is asserting itself?

    • Asserting own version of Global order: Beijing, argues that recent history points to the superiority of the Chinese system over the Western one. And it offers its own versions of a global order – economic, political and social. Since the end of the Cold War, ideological arguments had receded into the background but are now back in significant play.
    • China offering model Economic Globalization: China continues to sing praises of the model of economic globalisation that has facilitated Beijing’s rise over the last four decades. But under Xi, China has emphasised the importance of self-reliance in the name of a “dual circulation strategy”.
    • Leveraging world’s dependence for strategic gain: At the same time, Beijing has sought to enhance the world’s dependence on its economy and leverage it for strategic benefit. The profound political backlash against trade and economic cooperation with China in the US led to the questioning of economic globalisation in the Trump years.
    • China building the powerful military: As China became a richer country, it also focused on building a powerful army. Using both the instruments of hard power, China under Xi has actively sought to undermine US alliances in Asia and mount pressure on American forward military presence in Asia.

    China

    How USA’s policy is changing towards China?

    • Structured policy of rivalry: The traditional soft attitude to China yielded to a more confrontational approach during the Donald Trump presidency. Joe Biden has developed that into a more structured policy of competing with China.
    • Combine challenge of China and Russia: The National Security Strategy of the Trump administration postulated the return of great power rivalry and the need to respond to the challenges presented by Russia and China. Biden’s NATIONAL SECURITY STRATEGY builds on that proposition and identifies China as the more demanding challenge than Russia, despite Moscow’s aggression against Ukraine.
    • China is more capable than Russia: In his foreword to the National security strategy, Biden says “Russia poses an immediate threat to the free and open international system, recklessly flouting the basic laws of the international order today, as its brutal war of aggression against Ukraine has shown.” He names China, on the other hand, as “the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military and technological power to advance that objective”. While the European challenge is real, the Biden Administration now sees the Indo-Pacific as the principal strategic theatre.
    • Projecting China as autocracy against the democracy: The US has sought to locate the conflict with China (and Russia) as a fundamental struggle between “democracies and autocracies”. Recognising the limited enthusiasm for the framing in Asia, the National security strategy now talks of broadening the coalition to include countries that may not be democratic. Beijing, on the other hand, argues that recent history points to the superiority of the Chinese system over the Western one.
    • Building the bilateral alliances: The US is now pushing back. The principal instrument in the US response has been rebuilding the traditional bilateral alliances with Japan and Australia as well as constructing new partnerships with countries like India and developing new regional coalitions.

    India’s role in shaping the world order

    • Convergence of National interest wit USA: Today, Indian and American policies are converging. For both Delhi and Washington, Beijing presents the main national challenges.
    • Reducing economic dependence on China: On the economic and technological front, both India and the US are trying to reduce their exposure to China.
    • Keeping independent foreign policy: On the geopolitical front, a US plan to look beyond formal alliances suits Delhi, which is wedded to an independent foreign policy.
    • Opportunity for cooperation: It is never easy to translate abstract convergence into concrete policies. The current churn in Asia provides Delhi and Washington with a historic opportunity to build on the new convergences in the areas of trade, technology, and geopolitics.

     Conclusion

    • changing world order will have short term repercussion on economic front for developing country like India. India has a great opportunity to be the rule maker of new global order rather than just a rule follower. World order of 21st century will revolve around the fateful triangle of India, China and USA.

    Mains Question

    Q.Why the present world order is challenged by China? What role India can play as rule maker of new World order?

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