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Subject: Bilateral Relations

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

  • Asia seeking to diversify its security partnerships

    Context

    For the first time, the prime ministers of Australia, Japan, and New Zealand as well as the president of South Korea participated in a NATO summit.

    How Ukraine war revived NATO

    • More than a decade ago — in 2010 — when NATO agreed on a strategic doctrine, it was discussing it with its Russian partners.
    • There was no reference to China in the 2010 strategic concept.
    • At that time, the West was trying to deepen ties with Russia and build expansive economic cooperation with China
    • In unveiling a new strategic conception for the alliance in the wake of the war in Ukraine, NATO has declared Russia “the most significant and direct threat to Allies’ security and to peace and stability in the Euro-Atlantic area”.
    • Not ignoring the threat from China: NATO has declared that China’s “stated ambitions and coercive policies challenge our interests, security and values.”
    • The last few months have seen a closing of ranks in NATO that is now determined to cope with the Russian threat.
    • Germany — which has long sought good political and commercial relations with Russia — has agreed to raise its defence spending and do more for European security.
    • Sweden and Finland have ended their historic neutrality and decided to join NATO.
    • The US is doubling down on its military commitments to Europe.
    • The last few decades of peace and prosperity in Europe and Asia had enormously increased the influence of Russia and China in their neighbourhoods.
    • But the imperial ambitions of both — rooted in a profound misreading of their leverage — have produced a massive geopolitical backlash.
    • Consolidation of old alliances: Rather than sharpen the contradiction between the US and its regional allies, Russian and Chinese actions have helped consolidate old alliances and gave birth to new security coalitions.

    Why small  European countries seek alliances and how it applies to Asia as well

    • Small countries seek alliances when their fears of more powerful neighbours become acute.
    • Russia’s invasion has sent countries on Moscow’s western flank looking for NATO cover.
    • Most Central European states don’t want to rely purely on a European response to the Russian challenge.
    • They suspect France and Germany are more likely to accommodate Moscow at their expense than stand up to Russia.
    • For the Central Europeans, it is the US that offers a real balance against Russia.
    • It should not be too difficult for India to understand why some Asian countries are turning to NATO.
    • After all, India’s own turn to the Quad was a direct consequence of Chinese actions on the disputed bilateral frontier.

    How China’s expansionist policies are reshaping Asian security landscape

    • Way back in 2007 — when India conducted a mere joint naval exercise with the US, Japan, Australia and Singapore — Beijing called it a precursor to an “Asian NATO”. 
    • Australia and New Zealand are a bit further away but are deeply tied to the Chinese economy.
    • For those like Japan, who face a direct threat from China, “Ukraine could well be about the future of Asian security”.
    • What has happened in case of Ukraine created fear in Asian, at a moment when China has become so much more powerful than its neighbours.
    • Improving national capability: Creation of more sophisticated national military capabilities has been the first priority of some of Beijing’s neighbours.
    • Resolution of differences: Resolving mutual differences and strengthening security cooperation — for example between Japan and South Korea — has been another.
    • Alliance with US: Boosting bilateral alliances with the US is yet another.
    • Diversification of security partnership: Even as nations in the region reboot ties with the US, Asia is also seeking to diversify its security partnerships.
    • Engagement with Europe: This has led to greater Asian engagement with Europe as well as the creation of new Indo-Pacific regional institutions – including the Quad, and the AUKUS.

    Conclusion

    Thanks to the egregious expansionism of Russia and China, the strategic integration of the Asian and European geopolitical theatres has now begun. Whether they like it or not, all countries in Europe and Asia will have to deal with the consequences.

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  • The perils of multilateralism

    Context

    At a time when the world is trying to grapple with the impact of unprecedented problems which arose in the first two decades of the 21st century, the various intergovernmental organisations and groupings, which are undergoing fundamental changes, may not be fertile places for building peace.

    Contradiction in the BRICS

    • The 14th virtual BRICS summit hosted by China (June 23-24) was a clear attempt by China to hijack the grouping, going by a blueprint it has prepared for the new world order.
    • Not a political grouping: BRICS was not meant to be a political grouping when the acronym, BRIC, was coined by Goldman Sachs economist Jim O’Neill in 2001.
    • Economic grouping: Seeing the possibility of developing a non-western global economic system, China welcomed the idea of BRICS as the nucleus of a new economic grouping and invested energy and resources in building it.
    •  Two permanent members of the Security Council together with three aspirants to permanent membership underscored the contradictions in composition.
    • No support for permanent membership: The fundamental question of support for the three countries to secure permanent membership was fossilised on China’s position that the role of the developing countries should be enhanced, implying that there shall be no expansion of the permanent membership of the Security Council.
    • But the grouping focused on possibilities of cooperation among them by developing institutions such as the New Development Bank, the BRICS Contingent Reserve Arrangement and cooperation in certain sectors.
    • India-China relations: The entire fragile framework of limited cooperation was shattered with the bloodshed at Galwan, when China unilaterally sought to alter the situation on the Line of Actual Control (LAC).
    • China showed no enthusiasm to bring India into the Asia-Pacific Economic Cooperation (APEC) even after India met the criteria of a liberalised economy.
    • Expansion for friends: The way China brought in 13 like-minded countries through the back door for a high-level dialogue on global development smacked of unfair means to expand the group with their friends.

    What was achieved by India at G7 meeting

    • India’s presence at G7 meetings are not rare and Germany invited the India to attend the G7 summit in Bavaria.
    • The G7 made its own statement on the Ukraine war on expected lines and India was only involved in other issues such as environment, energy, climate, food security, health, gender equality and democracy.
    • Since it was a war summit, it did not produce any results on other major issues.
    • Curtailing energy supplies from Russia would hurt Germany, France, Japan and others, but they could not get any exemption.
    • India’s gain has been the opportunity it got to interact with world leaders, though it was tinged with the disappointment that India, as a Quad member, did not condemn Russia’s action in Ukraine.

    Conclusion

    Multilateral negotiations will be increasingly difficult in the present chaotic global situation. It is only by working bilaterally with potential allies that India can attain the status of a pole in the new world with steadfast friends and followers.

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  • Strains on India-Russia Defence Cooperation

    As the war in Ukraine stretches over four months with no end in sight, it has given rise to apprehensions on Russia’s ability to adhere to timely deliveries of spares and hardware to India.

    History of the bilateral defence ties

    • India was reliant, almost solely on the British, and other Western nations for its arms imports immediately after Independence.
    • However, this dependence weaned, and by the 1970s India was importing several weapons systems from then USSR, making it the country’s largest defence importer for decades.

    A major chunk of India’s strategic arms

    • Russia has provided some of the most sensitive and important weapons platforms that India has required from time to time including nuclear submarines, aircraft carriers, tanks, guns, fighter jets, and missiles.
    • According to one estimate, the share of Russian-origin weapons and platforms across Indian armed forces is as high as 85%.
    • Russia is the second-largest arms exporter in the world, following only the United States.
    • For Russia, India is the largest importer, and for India, Russia is the largest exporter when it comes to arms transfer.

    What saw the decline?

    • Between 2000 and 2020, Russia accounted for 66.5% of India’s arms imports.
    • Russia’s share in Indian arms imports was down to about 50% between 2016 and 2020, but it still remained the largest single importer.

    Present status of defence cooperation

    • When the war began, Indian armed forces had stocks of spares and supplies for eight to ten months and the expectation was that the war would end quickly.
    • However, as it stretches on with no clear endgame, there are apprehensions on Russia’s ability to adhere to the timelines for both spares as well as new deliveries.
    • Armed forces are looking at certain alternative mitigation measures and identifying alternate sources from friendly foreign countries.
    • However, in the long term, this is also an opportunity for the private industry to step up production and meet the requirements.

    Impact of the war

    • While some timeline lapses and shipping delays were possible, there would not be any dent on the Army’s operational preparedness along the borders.
    • In addition, the armed forces have also made significant emergency procurements since the standoff in Eastern Ladakh and have stocked up on spares and ammunition.
    • However, Russia has assured India that it would adhere to delivery timelines.
    • Since the war sees no end, Russian industry would be caught up in replenishing the inventories of their own armed forces.

    What is the status of deals underway/new deals pending with Russia?

    • The defence trade between India and Russia has crossed $15 billion since 2018, in the backdrop of some big deals including the $5.43 billion S-400 long range air defence systems.
    • Other major contracts currently under implementation are construction of four additional stealth frigates in Russia and India,
    • There is a licensed production of the Mango Armor-piercing fin-stabilised discarding sabot (APFSDS) rounds for the T-90S tanks as also additional T-90S tanks, AK-203 assault rifles among others.

    Deferred deals in downtime

    • There are several big deals deferred by the Defence Ministry as part of the review of all direct import deals.
    • This is in conjunction with efforts to push the ‘Make in India’ scheme in defence.
    • Russian deals have also been deferred including the one for 21 MiG-29 fighter jets for the Indian Air Force (IAF) along with the upgradation of 59 existing Mig-29 jets.
    • This also includes the deferment of the manufacture of 12 SU-30 MKI aircraft by Hindustan Aeronautics Limited (HAL).

    What is the status of payments?

    • While India continues to remain Russia’s largest arms buyer with a major chunk of legacy hardware from Russia and the Soviet Union, the volume of imports has reduced in the last decade.
    • With Russia being shut out of the global SWIFT system for money transfers, India and Russia have agreed to conduct payments through the Rupee-Rouble arrangement.
    • With several big ticket deals including the S-400 under implementation, there are large volume of payments to be made.

     

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  • The significance of PM’s visit to the UAE

    Context

    Prime Minister Narendra Modi’s visit to the UAE on June 28 was his fourth, having visited the country earlier in August 2015, in February 2018 and again in August 2019.

    Why do the Gulf and UAE matters to India?

    • The UAE has given crucial support to India in the Islamic world, first by inviting our late External Affairs Minister Sushma Swaraj as a guest of honour at an OIC foreign ministers meeting in Abu Dhabi.
    • The UAE stood with us on Jammu and Kashmir following the abrogation of Article 370.
    • The Gulf is our third-largest trading partner.
    • The Gulf region is our principal source of hydrocarbons.
    • It is also a major source of foreign investment.
    • The region is home to some 8 million Indians who send in over $50 billion annually in remittances.

    Deepening bilateral ties

    • CEPA: In a virtual summit with Sheikh Mohamed in February 2022, both sides signed a Comprehensive Economic Partnership Agreement (CEPA).
    • CEPA is a significant milestone that was negotiated and finalised in just 88 days and promises to increase bilateral trade from $60 billion to $ 100 billion in five years.
    •  It is expected to help Indian exports in areas ranging from gems and jewellery and textiles to footwear and pharmaceuticals, apart from enhanced access for Indian service providers to 11 specific sectors.
    • Vision statement: An ambitious, forward-looking Joint Vision Statement titled, “Advancing the India and UAE Comprehensive Strategic Partnership: New Frontiers, New Milestones” was also issued.
    • The Dubai-based DP World and India’s National Skills Development Council signed an agreement to set up a Skill India Centre in Varanasi to train local youth in logistics, port operations and allied areas so that they can pursue overseas employment.

    New avenues for multilateral cooperation

    • The rapid normalisation of ties between the UAE and Israel following the Abraham Accords of August 2020 has also opened new avenues of trilateral and multilateral cooperation.
    • Technology, capital and scale: Some Israeli tech companies are already establishing a base in Dubai and seeking to marry niche technologies with Emirati capital and Indian scale. 
    • 2I2U: The US has announced that President Joe Biden’s forthcoming visit to West Asia will see a virtual summit of what it calls the 2I2U, a new grouping that brings together India, Israel, the US and UAE.

    Conclusion

    The UAE today is India’s closest partner in the Arab world. Both countries need to expand the areas of cooperation and deepen their engagement.

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    Back2Basics: Abraham Accords

    • The Israel–UAE normalization agreement is officially called the Abraham Accords Peace Agreement.
    • It was initially agreed to in a joint statement by the United States, Israel and the United Arab Emirates (UAE) on August 13, 2020.
    • The UAE thus became the third Arab country, after Egypt in 1979 and Jordan in 1994, to agree to formally normalize its relationship with Israel as well as the first Persian Gulf country to do so.
    • Concurrently, Israel agreed to suspend plans for annexing parts of the West Bank.
    • The agreement normalized what had long been informal but robust foreign relations between the two countries.

  • China’s interventions in the Horn of Africa

    China recently held the first China-Horn of Africa Peace, Governance and Development Conference.

    Why in news?

    • China has been investing across the African continent throughout the last decade.
    • The conference held in Ethiopia witnessed the participation of foreign ministries from the following countries of the Horn: Kenya, Djibouti, Ethiopia, Sudan, Somalia, South Sudan, and Uganda.

    Major objectives

    • No doubt that china predates small nations with debt-trapping the countries.
    • It focuses on increasing the infrastructural investments in African countries and converting them to security assets.
    • It asserted three objectives in Africa:
    1. Controlling the pandemic
    2. Implementing a Forum on China-Africa Cooperation (FOCAC) outcomes, and
    3. Upholding common interests while fighting hegemonic politics

    What is FOCAC?

    • The FOCAC promotes China’s role in the infrastructural and societal development of the Horn.
    • In the 2021 forum, the entire region of the Horn participated and four resolutions were adopted:
    1. Dakar Action Plan
    2. China-Africa Cooperation Vision 2035
    3. Sino-African Declaration on Climate Change
    4. Declaration of the Eighth Ministerial Conference of FOCAC

    How has China garnered goodwill in HOA?

    • HOA have benefited from China’s vaccine diplomacy.
    • Beijing has also initiated the “2035 vision for China-Africa cooperation”; it aims to transform the health sector, alleviate poverty, promote trade and investments, and expand digital innovation.
    • The vision also focuses on green development, capacity building, improving people-to-people exchanges and facilitating peace and security in the continent.

    What are China’s primary interests/investments in the Horn of Africa?

    China’s interests are related to four major areas: infrastructural projects, financial assistance, natural resources and maritime interests.

    (1) Infrastructure

    • Looking at Chinese investments in infrastructure, one of its landmark projects was fully funding the $200 million African Union headquarters in Addis Ababa.
    • It has also made significant investments in railways; it is building the Addis-Djibouti railway line connecting the land-locked country with Eritrean ports in the Red Sea.
    • China has also invested in the Mombasa-Nairobi rail link in Kenya, and has already delivered on railway projects in Sudan.
    • It also has a viable military hardware market in Ethiopia and has built over 80 infrastructural projects in Somalia, including hospitals, roads, schools and stadiums.

    (2) Debts and ‘assistances’

    • With respect to financial assistance, Ethiopia, is one of the top five African recipients of Chinese investments, and also has a debt of almost $14 billion.
    • China accounts for 67% of Kenya’s bilateral debt.
    • In 2022, China promised to provide $15.7 million assistance to Eritrea.

    (3) Mineral explorations

    • The third major Chinese interest in Africa is the presence of natural resources — oil and coal. Beijing has invested $400 million in Mombasa’s oil terminal.
    • China is also interested in minerals such as gold, iron-ore, precious stones, chemicals, oil and natural gas in Ethiopia.
    • South Sudan, a source for petroleum products, has had continued Beijing investment in the industry since the latter’s initial entry in 1995.

    (4) Maritime interest

    • China’s first and only military base outside its mainland is in Djibouti.
    • During his visit in early 2022, Wang hinted at China’s willingness to develop Eritrea’s coast which would connect to China’s investments in land-locked Ethiopia.
    • The US has speculated that China wishes to build another military base in Kenya and Tanzania, thereby increasing its military presence in the region.

    Has the Horn of Africa been welcoming of China’s presence?

    • Africa has been keen on interacting with China.
    • Despite the wariness surrounding China’s projects in Africa, the governments have mostly been welcoming.
    • When conflict broke out in Tigray in November 2020, Addis Ababa appreciated Beijing for respecting Ethiopia’s sovereignty.
    • In December 2021, Kenya defended Chinese projects in the country; President Uhuru Kenyatta maintained that China-Africa partnership was mutually beneficial.
    • Similarly, in May 2022, the East African Community (EAC) welcomed Chinese investors to work in East Africa for the prosperity of the people.

    Beijing’s principle of non-intervention

    • Peace and stability is a mutual requirements for China and Africa.
    • For Africa, Chinese investments could lead to stable environments which could help the countries achieve their peace and development objectives.
    • For China, conflict in the region comes at a heavy cost.
    • In Ethiopia. when the conflict broke out, over 600 Chinese nationals, working on different projects, were evacuated, putting several investments at risk.
    • From a trading perspective, the region plays a significant role in achieving the objectives of the China-Africa Cooperation Vision 2035.

    Why is HOA important?

    • In the last decade, the region lying between Suez Canal and the Seychelles has emerged as a new geopolitical hotspot.
    • It has factors like impressive economic growth of regional countries, emergence of new security threats, and the ensuing major power rivalry driving the strategic trajectory of the region.
    • The straits of Bab el-Mandeb, which lies at the heart of this region, connects the energy-rich Middle East to Europe and, along with the Suez Canal, is considered a jugular vein for global trade.

    Indian footprints in the region

    • India has been paying greater attention to the region but still lags behind China.
    • India has bolstered defence cooperation with Oman and France (which holds territories in the Southwestern Indian Ocean).
    • It has signed logistics support agreements with these countries to ensure greater naval access in the region.
    • Reportedly, India was in talks with Japan to grant access to Indian naval vessels at the Japanese base in Djibouti.
    • India has also sought to open a military base in the Seychelles and plans to further enhance its naval presence in the Western Indian Ocean.

    These efforts are directed to increase Indian leverage and limit Chinese influence in the region.

    Lessons for India

    • China’s move towards peace in Africa indicates a shift in its principle of non-intervention.
    • It is China’s message that its presence in the continent has a larger objective and is not likely to be limited to the Horn of Africa.
    • This includes an aim to project itself as a global leader and boost its international status.
    • Further, the recent developments imply that China is focussing on a multifaceted growth in the continent for the long run.

     

     

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  • PM visits United Arab Emirates (UAE)

    PM Modi expressed gratitude to President of the United Arab Emirates Sheikh Mohamed bin Zayed (MBZ) al Nahyan for taking great care of 3.5 million Indian community in the UAE during the pandemic.

    India- UAE Relations: A backgrounder

    • The relation has greatly flourished especially after the accession of H. H. Sheikh Zayed Bin Sultan Al Nahyan, as the ruler of Abu Dhabi in 1966.
    • The greater push has been achieved in bilateral relations when the visit of Indian PM’s to the UAE in August 2015.
    • It marked the beginning of a new strategic partnership between the two countries.
    • Further, the Crown Prince was invited in January 2017 as the chief guest at India’s Republic Day celebrations.
    • In 2017 the two sides signed the agreement on Comprehensive Strategic Partnership (CSP).

    Significance of ties

    • Indian Diaspora in UAE: Around 3 million Indians are living harmoniously in the UAE.
    • UAE – A willing partner: As India seeks to enhance economic engagement and deepen security cooperation with the Gulf, it finds a willing partner in the UAE.
    • India being a natural partner: UAE’s ‘Look East’ find partners for its economic growth and with security concerns emanating from turmoil in West Asia and growing threat from terrorism.
    • Investments: UAE has a special place due to its business-friendly atmosphere, willingness to invest in the Indian economy.
    • India’s West Asia policy: The UAE occupies a key place in India’s West Asia policy. The high-level visit from both sides has given a new impetus to this partnership.

    Why UAE is tilting toward India?

    • Turmoil in West Asia: Geopolitical conditions as Iran is threatening continuously to close the Strait of Hormuz in case there is a conflict with Saudi Arabia or US.
    • Disappointment from Pakistan: UAE saw Pakistan as a partner and incorporated a deep economic and security relationship with it. But in the present day, Pakistan does not seem to be of much help to UAE.
    • India as a market: India is an important destination for oil and energy purchase. UAE also recognizes exhaustible nature of its fossil fuel reserves.
    • Returns on investment: UAE’s massive sovereign wealth funds can act as a great resource in the development of infrastructure in India.
    • Addressing Terrorism: There has been a rising convergence between India and UAE on the terror issue and both the countries talked of the need to combat terror groups without any discrimination.
    • Lack of regional consensus: Countries like Syria, Iraq, Libya and Yemen are suffering from violent conflicts. The Gulf Cooperation Council (GCC) has not produced expected results.

    Economic Significance of the UAE

    • UAE, due to its strategic location, has emerged as an important economic centre in the world.
    • In recent years, the UAE, through its ‘Vision 2021’, has sought to diversify its economy and reduce its dependency on oil.
    • Although the UAE has diversified its economy, the hydrocarbon sector remains very important followed by services and manufacturing.
    • Within services, financial services, wholesale and retail trade, and real estate and business services are the main contributors.

    India-UAE trade and investment ties

    • India is UAE’s third largest trade partner after China and the United States.
    • The UAE accounts for 8 percent of India’s oil imports and was fifth largest supplier of crude oil to India.
    • The aim is to boost bilateral merchandise trade to above U.S.$100 billion and services trade to U.S.$15 billion in five years.
    • As we are witnessing a big turnaround in manufacturing, the UAE would be an attractive export market for Indian electronics, automobiles, and other engineering products.
    • The UAE’s investment in India is estimated to be around U.S.$11.67 billion, which makes it the ninth biggest investor in India.

    Advanced technology and the knowledge economy

    (1) Technology

    • In 2018, India and UAE signed a MoU to generate an estimated $20 billion in the span of a decade.
    • The Emirates have stepped up efforts to invest in the development of the knowledge economy by expanding the “golden visa”.
    • Space is a new arena in which India and the UAE have collaborated through the work of the UAE Space Agency (UAESA) and the Indian Space Research Organization (ISRO).
    • Space cooperation between India and the UAE gained quick momentum during PM Modi’s visit to the Emirates in 2015.
    • The two countries are likely to work together on Emirates’ ‘Red planet Mission’.

    (2) Security and Defence Cooperation

    • Another significant pillar of India-UAE ties is reflected in their growing cooperation in security and defense sector.
    • With the spread of radicalism in Gulf and South Asia, India looks to enhance security cooperation with UAE to counter terrorist threats and combat radicalization.
    • ‘Desert Eagle II’, a ten day air combat exercise, was held between the air forces of India and UAE.

    Way Forward

    (1) Needs to ensure the execution of the investment projects with the required expertise

    • Potential areas to enhance bilateral trade include defence trade, food and agricultural products as well as automobiles.
    • Indian companies with expertise in renewable energy sector can invest in UAE.
    • In defence sector, there is a need to further enhance cooperation through joint training programmes.

    (2) Manifold Benefits of India-UAE Trade Agreements

    • With India’s newfound strength in exports, a trade agreement with an important country such as the UAE would help sustain the growth momentum.
    • As we are witnessing a big turnaround in manufacturing, the UAE would be an attractive export market for Indian electronics, automobiles, and other engineering products.

    (3) Improving the relations with the GCC

    • As part of the GCC, the UAE has strong economic ties with Saudi Arabia, Kuwait, Bahrain, and Oman and shares a common market and customs union with these nations.
    • This FTA with the UAE will pave the way for India to enter the UAE’s strategic location, and have relatively easy access to the Africa market and its various trade partners.
    • This can help India to become a part of that supply chain especially in handlooms, handicrafts, textiles and pharma.

    (4) Solving the issue of UAE’s Non-Tariff Barriers (NTBs)

    • The UAE tariff structure is bound with the GCC (applied average tariff rate is 5%), therefore, the scope of addressing Non-Tariff Barriers (NTBs) becomes very important.
    • The reflection of NTBs can be seen through Non-Tariff Measures (NTMs) mostly covered by Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT).

     

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  • How Hanoi and New Delhi are fortifying defence ties

    Context

    The two countries recently deepened bilateral cooperation with the signing of the Joint Vision Statement on India-Vietnam Defence Partnership towards 2030 during the recent visit of Defence Minister Rajnath Singh to Vietnam.

    About the Joint Vision Statement

    • India and Vietnam Wednesday signed a Joint Vision Statement on India-Vietnam Defence Partnership towards 2030, “which will significantly enhance the scope and scale of existing defence cooperation”.
    • Boosting the scale and scope of defence cooperation: The Joint Vision Statement is aimed at boosting the scope and scale of the existing defence cooperation between the two nations.
    • Mutual logistic support: The two sides also signed a Memorandum of Understanding (MoU) on mutual logistics support.
    • Elevating CSP: This is the first agreement of its kind that Hanoi has entered into with any other country and elevates the standing of Comprehensive Strategic Partnership (CSP) which Hanoi shares with New Delhi since 2016 (along with only Russia and China).

    Enhanced maritime cooperation

    • Both countries find convergence in their approaches towards the maintenance of stability and security of the Indo-Pacific.
    • This approach has translated into diplomatic and political support in the context of developments within the region and manifested in the form of tangible and functional cooperation instruments — the most vital being bilateral defence partnership.
    • Because of the volume of maritime trade that passes through sea lanes of communication in the Indo-Pacific and potential as well as estimated energy reserves in these waters, maritime cooperation between countries in the region have expanded exponentially.

    Emphasis on the cooperative mechanism

    • The enhanced geostrategic prominence and attendant uncertainties vis-à-vis China’s expanding and often abrasive footprints in the Indo-Pacific have resulted in an overall increase in emphasis on cooperative mechanisms and frameworks across the region.
    • Defence partnership between the two countries has been growing steadily following the signing of the Defence Protocol in 2000 and today covers extensive navy-to-navy cooperation.

    Dealing with Chinese transgression

    • Vietnam has and continues to be one of the most vocal countries with respect to China’s periodic transgressions in the South China Sea.
    • Freedom of navigation: In India, Vietnam has found an equally uncompromising partner when it comes to the question of violations of freedom of navigation and threats to sovereign maritime territorial rights as enshrined under international maritime law.
    • New Delhi has supported Vietnam’s position in the South China Sea with respect to Beijing’s destabilising actions and coercive tactics backing by reiterating the irrefutability of the UNCLOS.
    • India has also not backed down from continuing ONGC Videsh Ltd (OVL)’s oil exploration project in Block 128 (which is within Hanoi’s EEZ) despite China’s protests.
    • Emphasis on naval diplomacy: It is also in the last few years that Vietnam has augmented its emphasis on naval diplomacy and strengthened its ties with the US alongside the extension of its engagement with India and other ASEAN members.
    • Despite the fact that the China factor has provided impetus to the solidification of ties, it is also important to consider that mutual cooperation is not driven solely by it.
    • Support in the rubric of Indo-Pacific: Both countries have expanded areas of collaboration and are supportive of each other’s individual and multilateral involvements within the rubric of the Indo-Pacific.

    Conclusion

    Convergences between New Delhi and Hanoi has naturally found expression in bilateral relations and the two countries are poised to develop their partnership further in the coming years.

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    Back2Basics: About UNCLOS

    • UNCLOS is sometimes referred to as the Law of the Sea Convention or the Law of the Sea treaty.
    • It came into operation and became effective from 16th November 1982.
    • It defines the rights and responsibilities of nations with respect to their use of the world’s oceans, establishing guidelines for businesses, the environment, and the management of marine natural resources.
    • It has created three new institutions on the international scene :
      1. International Tribunal for the Law of the Sea,
      2. International Seabed Authority
      3. Commission on the Limits of the Continental Shelf

  • Caution in buying Russian cruide

    Context

    This week the Wall Street Journal and the New York Times both reported on India emerging as a major buyer of Russian oil.

    Background of rising fuel prices due to Ukraine crisis

    • A significant fallout of Russia’s invasion of Ukraine has been the rising cost of petroleum.
    • In response to the invasion, Western countries, including the United States and Europe, have imposed an array of sanctions against Russia.
    • Reduced purchases from Russia: Europe and the United States have seen the price of oil steadily rise after they reduced their purchases from Russia.
    • For now, Russia has been able to mitigate the impact of sanctions by selling crude, oil and coal at reasonable prices in greater volumes to newer bulk buyers like India, to combat Europe trying to wean itself off Russian crude.

    Why India increased purchase of Russian oil

    • India has chosen a different route.
    • Cope with rising fuel prices: We are the third-largest importer and consumer of oil in the world and have increased our purchase of Russian oil to cope with rising oil prices elsewhere.
    • We are also refining crude oil or turning it into products like jet fuel and diesel and selling it to Europe and other nations.
    • Curb inflation: Importing Russian crude also helps us curb inflation that has been made worse by rising fuel prices.
    • Halting the fall of the rupee: Procuring discounted Russian oil is an effort by the government to bring down prices and halt the decline in the value of the Indian rupee.
    • India’s behaviour is governed by our best interest, which is the most important element of any astute foreign and economic policy.

    Issues with purchasing oil from Russia

    • The European Union has announced a ban against insuring ships carrying Russian oil, to commence this December.
    • Insurance ban: Countries like India, China and Turkey that are increasing their oil purchases from Russia have six months to find a work-around to the insurance ban by using non-European insurance companies.
    • European companies own most of the ships carrying Russian oil to India.
    • These insurance sanctions will impact the companies that own these ships as well.
    • Dependence for batteries: Apart from geopolitical changes in the world indicating the rise of China, there is a major change: Electric vehicles and electric batteries substituting for non-renewable resources like petroleum and diesel.
    • India cannot afford to be dependent on an unhindered supply of electric batteries from China, given geopolitical considerations and border disputes between the two nations.

    Way forward

    • To weather the new electric era that will no doubt be dotted with territorial wars and national security concerns, India would do well to preempt shortages in the arena – by putting in place factories which will build the electric batteries that will power our futures.
    • What the invasion of Ukraine has taught us is that we need to be more self-reliant and have in-house energy sources.

    Conclusion

    India needs to factor in the implications of comprehensive western sanctions as it increases its purchase of discounted Russian oil.

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  • India and Australia

    Context

    India and Australia, which share common values and interests, must work together with resolve to shape the economic and strategic environment so that it continues to support collective security and prosperity.

    India-Australia ties: A background

    • The ties are a Comprehensive Strategic Partnership full of practical, tangible actions that strengthen ties and benefit the region.
    • India and Australia are a small group of countries to hold annual leaders’ summits and biennial 2+2 talks involving foreign and defence ministers.
    • The defence forces of both the countries are undertaking more complex activities together, such as in Exercise Malabar with the US and Japan.
    • We coordinate closely on maritime domain awareness.
    • This year both countries deployed P-8 surveillance aircraft to each other’s territories for joint patrols.
    • Australia has also committed to a package of partnership initiatives in our update to the India Economic Strategy.
    • Cooperation on climate and sustainability: India and Australia have great potential to cooperate on climate and sustainability.

    Why India matters to Australia

    • Securing supply chain: India’s economy, manufacturing capabilities and talent ensure it will play a key role in securing supply chains and restarting post-pandemic growth.
    • Balance of power: Its military has the capacity and capability to respond to natural disasters, help stabilise an uncertain region and contribute to an effective balance of power.
    • Technological and scientific capabilities: Its technological and scientific capabilities are gateways to a cleaner and more sustainable world.
    •  Commitment to democracy: Most of all, India’s people have the optimism, the commitment to democracy, the drive and the goodwill to make our region safer, freer and better.

    Vision for open, inclusive and resilient Indo-Pacific region

    • As the bilateral relationship deepens, both the countries must begin to work more together with others in the region.
    • Responding to humanitarian crises and natural disasters: There is enormous potential in the Indian and Pacific oceans, where we each have vital interests in combating climate change, illegal fishing and people smuggling and responding to humanitarian crises and natural disasters.
    •  Australia has a vision for an open, inclusive and resilient Indo-Pacific region.
    • It is a vision for a region that is more integrated rather than divided, where trade and investment flow freely based on agreed rules and treaty commitments, where disputes are resolved through dialogue in accordance with international law, and where a strategic culture that respects the rights of all states, big and small, prevails.
    • It is a vision that Australia share with partners like ASEAN, and partners like India.
    • Whether through joint activities with like-minded countries, or the support of regional and multilateral architecture, Australia is ensuring the region has options and balance.

    Conclusion

    India and Australia’s interests don’t just align, they are inextricably entwined. Expect this relationship to grow and prosper, our cooperation to deepen.

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  • In Sri Lankan crisis, a window of economic opportunity

    Context

    The commonality between Sri Lanka and the southern parts of India remains a less-emphasised yet significant aspect of India-Sri Lanka relations.

    Crisis in Sri Lanka and relief provided by India

    • The present economic crisis in Sri Lanka has pushed it closer to India for immediate relief.
    • India, as part of its ‘Neighbourhood First’ policy, has extended support to the people of Sri Lanka in the form of aid (close to $3.5 billion) to help secure Sri Lanka’s food, health and energy security by supplying it essential items such as food, medicines, fuel and kerosene.
    • The latest in the series was the signing of an agreement on June 10 between the Government of Sri Lanka and the Export-Import Bank of India for a $55-million short term Line of Credit to facilitate the procurement of urea for paddy crop in the ongoing ‘Yala’ season.
    • On its part, Tamil Nadu decided to provide aid of ₹123 crore, comprising 40,000 tonnes of rice, 137 types of life-saving drugs and 500 tonnes of milk powder.

    Sri Lanka-India sub-regional context

    • During his second term as Prime Minister, Mr. Wickremesinghe while delivering a lecture in Chennai, in August 2003, called for the development of the south India-Sri Lanka sub-region as a single market.
    • Such a market would provide more opportunities for the economic growth of both countries.
    • In 2016 he highlighted the fact that the five Indian southern States, with a total population of 250 million, had a combined gross state domestic product of nearly $450 billion; with the addition of Sri Lanka’s $80 billion GDP, the sub-region would have a $500 billion economy, having an aggregate population of around 270 million.

    Challenges

    • Possibility of greater economic collaboration: Whether this bonhomie can lead to greater economic collaboration between Sri Lanka and south India, not necessarily Tamil Nadu alone, given the historical baggage, is anybody’s guess.
    • Baggage of history: Some sections of the Sinhalese still hold the view that India had been a threat to Sri Lanka and it can still be a threat to them.
    • The manner in which the Rajapaksa regime unilaterally scrapped in February 2021 a tripartite agreement signed in 2019 with India and Japan for the development of Colombo’s East Container Terminal was a reflection of the historical baggage.
    • This perception can be traced to history when Sri Lanka was invaded by rulers of south India who humbled the Sinhala kings.
    • In the aftermath of the 1983 anti-Tamil pogrom, the support provided by the Indian government to Tamil rebels only strengthened this perception.
    • Modest investment in Sri Lanka’s development: Despite India’s open willingness to take part in the development of Sri Lanka after the civil war, the scale of its involvement has been modest.
    • Incomplete projects due to lack of political will: After the cancellation of the tripartite agreement, India was later provided with projects such as the West Container Terminal, the Trincomalee oil tank farm and a couple of renewable projects, there were several proposals that envisaged India’s participation but did not see the light of day.
    • Another project, a collaboration between NTPC Limited and the Ceylon Electricity Board, was cancelled.
    • Other projects too such as the development of the Kankesanthurai harbour and the expansion of the Palaly airport in Jaffna, both envisaging Indian participation, would have become a reality had there been show of political will from the other side.
    • The project of building a sea bridge and tunnel, connecting Rameshwaram to Talaimannar, remains on paper.

    Way forward

    • Infrastructure development: Even now, there is enormous scope for collaboration between the two countries in the area of infrastructure development.
    • Cross-border energy trade: The economic crisis has revived talk of linking Sri Lanka’s electricity grid with that of India.
    • If this project takes off, the first point of interconnectivity on the Indian side will most likely be in Tamil Nadu.
    • India has cross-border energy trade with Bangladesh, Nepal, Bhutan and Myanmar.
    • Facilitating people-to-people interaction: The apprehension in the minds of sections of the Sinhalese majority about India being a threat can be dispelled only by facilitating greater people-to-people interaction, including pilgrimages by monks and other sections of Sri Lankan society to places of Buddhist importance not only in north India but also in the south (Andhra Pradesh).

    Conclusion

    Much more will have to be done but the opportunity created by the current circumstances should be utilised to bring Indian and Sri Lankan societies closer — a prerequisite to achieving an economic union between Sri Lanka and the southern States of India.

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