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Subject: Bilateral Relations

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

  • India- China disengage at LAC friction points in Ladakh

    lac

    India and China have announced that their Armies have begun to disengage from Patrolling Point-15 in the Gogra-Hot springs area at LAC.

    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.

    What is the disagreement?

    • The alignment of the LAC in the eastern sector is along the 1914 McMahon Line, and there are minor disputes about the positions on the ground as per the principle of the high Himalayan watershed.
    • The major disagreements are in the western sector where the LAC emerged from two letters written by Chinese Prime Minister Zhou Enlai to PM Jawaharlal Nehru in 1959, after he had first mentioned such a ‘line’ in 1956.

    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.

    How was the disengagement carried on?

    • As per the understanding reached earlier on disengagement, a buffer zone is to be created at the friction points.
    • Once troops are withdrawn by both sides, new patrolling norms are to be worked out after complete disengagement and de-escalation.

    Why sudden disengagement?

    • The move comes ahead of the Shanghai Cooperation Organisation (SCO) summit in Uzbekistan next week.
    • However, neither side has, so far, confirmed if the two leaders would hold bilateral talks on the sidelines of the summit.
    • The leaders have not spoken to each other since a November 2019 meeting during the BRICS Summit in Brasilia and the beginning of the stand-off in April 2020.

    Significance of the disengagement

    • Since the stand-off began in May 2020, the two sides have so far held 16 rounds of talks.
    • Earlier, disengagement was undertaken from both sides of Pangong Tso in February 2021, and from PP-17 in the Gogra-Hot springs area in August, in addition to Galwan in 2020 after the violent clash.
    • The friction points that remain now are Demchok and Depsang, which China has constantly refused to accept, maintaining that they are not a part of the current stand-off.

    What was the dispute over LAC?

    • In what was the worst clash between the two countries in over 40 years, the Galwan incident reverberated around the world.
    • The casualties in the clash were the first in the disputed Sino-Indian border since 1975.
    • The Galwan episode led to a rapid build-up of forces on both sides of the Line of Actual Control.
    • This incident is being seen as major punctuation in the bilateral relations between India and China and what does the future hold for both neighbors.

    Why did India change its stance on the Line of Actual Control?

    • Indian and Chinese patrols were coming in more frequent contact during the mid-1980s.
    • This was after the government formed a China Study Group in 1976 which revised the patrolling limits, rules of engagement and pattern of Indian presence along the border.

    Is the LAC also the claim line for both countries?

    • Not for India. 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 are these claim lines controversial in Ladakh?

    • When the Shimla Agreement on the McMahon Line was signed by British India, Aksai Chin in Ladakh province of the princely state of J&K was not part of British India, although it was a part of the British Empire.
    • Thus, the eastern boundary was well defined in 1914 but in the west in Ladakh, it was not.
    • India, in July 1948, had two maps: one had no boundary shown in the western sector, only a partial colour wash; the second one extended the colour wash in yellow to the entire state of J&K, but mentioned “boundary undefined”.

    Way forward

    • The impasse in India-China relations CANNOT be overcome by more talks through diplomatic and military channels, and possibly require the intervention of the top leadership of both countries.
    • Therefore, as Dr. Jaishankar put it, the management of the fissures within Asia will require adherence to established laws, norms, and rules.

     

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  • Floods in Pakistan and the pulls and pressures of India-Pak Disaster Diplomacy

    pakistan
    Pakistan

    Prime Minister Modi has tweeted his condolences and hoped for an early restoration of normalcy in flood devastated Pakistan.

    Why in news?

    • The statement by the PM last month came as a surprise to many.
    • This is on the grounds of steady deterioration of ties over the last eight years since Modi came to power.

    PM Modi and Pakistan

    (A) Early failure

    • PM Modi had famously begun his tenure with an invitation to Pakistan’s then PM Nawaz Sharif for the swearing-in ceremony in May 2014.
    • Sharif had come to India, along with the leaders of other SAARC nations.
    • This gesture promised a new beginning for the bilateral relationship that had suffered a severe setback after the 26/11 terrorist attacks in Mumbai in 2008.
    • However, a string of incidents followed, the terrorist attacks in Pathankot and Uri — impacted the relationship negatively, and New Delhi made it clear that “talks and terror can’t go together”.

    (B) India strengthens resolute

    • Ties have been hit further over the last few years, especially after the Pulwama terror attack in February 2019, and the abrogation of Article 370 in August that year.
    • That led to the downsizing of the High Commissions in both capitals; there are no full-time High Commissioners in either country now.

    Change of PM in Pak

    • After the ouster of Imran Khan, and the coming to power of the new coalition government led by PM Shehbaz Sharif, some positive noises have emanated from Islamabad.
    • India however reiterated the desired peace and stability in a region free of terrorism.
    • New Pak PM criticized his predecessor, Imran Khan, for not making “serious and diplomatic efforts” when India abrogated Article 370 in August 2019.

    Responses to disasters

    In the past, when natural disasters struck India and Pakistan, the two countries at times reached out to each other with offers of help.

    • Bhuj earthquake: For example, in January-February 2001, after the earthquake hit Bhuj in Gujarat, Pakistan had reached out with help, and had sent tents and blankets for the survivors.
    • 2005 earthquake: A powerful earthquake struck both India and Pakistan, India sent aircraft with relief supplies to Pakistan and pledged $ 25 million through the United Nations to support Pakistan’s relief efforts.

    In 2010, when a “superflood” — the worst in recent decades until the deluge of 2022 — hit Pakistan, India offered $ 5 million in help, but Islamabad declined to accept it.

    The case for help now

    • Though there has not been much follow-up activity, the PM Modi’s outreach by way of a message created a potential opening for “disaster diplomacy”.
    • Pakistan’s Finance Minister said that the government can consider importing vegetables and other edible items from India following the destruction of standing crops due to the floods.
    • Prices of vegetables and fruit have gone through the roof as supplies from Balochistan, Sindh, and south Punjab especially, have been badly affected.

    Why should India respond?

    • For the Indian government, the case for extending humanitarian help ties in well with its desire to project itself as the “first responder” in times of disaster and crisis in the neighbourhood.
    • In recent months and years, India has extended its hand of help and cooperation to the Maldives, Bangladesh, Sri Lanka, Myanmar, Nepal, Bhutan, and Afghanistan.
    • Trucks filled with Indian grain have travelled to Taliban-ruled Afghanistan via Pakistan.

    What is Pakistan’s position?

    • Pakistan’s establishment (none other but Pak Army) has discussed the possibility of getting food grains through international organisations, who want to send relief material from India.
    • The help from India can be at the micro and short-term level: food, fuel, tents, medicines, and emergency essential supplies.
    • At the macro and medium-to-long-term, it could involve help in the reconstruction of damaged homes and properties, and the archaeological site of Mohenjo Daro, part of the cultural heritage of both countries.
    • India’s healthcare can be of help in the post-floods scenario — dengue is already on the rise, and diseases such as typhoid are expected to spike sharply.

    Issues in re-engagement

    • Some in the Indian establishment believe that the government’s stated policy of talks and terror can’t go together, and the extending of help to Pakistan are at odds with each other.
    • For New Delhi, the decision is as much about projecting power as a global responder as with managing the ruling party’s domestic political base.

     

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  • India Bangladesh Relations

    bangladeshContext

    • Bangladesh PM Sheikh Hasina’s four-day visit to India to boost bilateral ties.

    India-Bangladesh ties background

    • India’s links with Bangladesh are civilization, cultural, social and economic.
    • There is much that unites the two countries – a shared history and common heritage, linguistic and cultural ties, passion for music, literature and the arts.
    • India was one of the first countries, along with Bhutan, to recognise Bangladesh as a sovereign state on 6 December 1971.
    • It is also worth recalling that India shares its longest border of 4,096.7 kilometres with Bangladesh, which is also the fifth-longest border in the contemporary world.

    bangladeshTrade between two

    • CEPA: Trade will be a focal point during Ms. Hasina’s visit as the two countries gear up to sign a Comprehensive Economic Partnership Agreement.
    • Bangladesh dependency: Bangladesh imports critical industrial raw material from India on which its exports are reliant.
    • Leveraging Indian support: Bangladesh also could improve several manufacturing industries by leveraging Indian expertise in service sectors.

    bangladeshConnectivity

    • IMT highway: Bangladesh has expressed its interest in joining the India-Myanmar-Thailand highway project.
    • Waterway: India-Bangladesh bilateral waterway trade will get boosted as India can now use the Mongla and Chittagong ports.
    • Logistics: India’s Northeast and Bangladesh is important for bilateral cooperation. Currently, three express trains and international bus services operate between Indian and Bangladesh.

    Key data to remember

    Bangladesh is India’s sixth largest trade partner with bilateral trade rising from $2.4 billion in 2009 to $10.8 billion in 2020-21.

    Regional geopolitics

    • Chinese influence: Chinese inroads into the neighbourhood have been a cause of worry for India. China has been actively pursuing bilateral ties with Bangladesh. Bangladesh had successfully approached China for a mega project to enhance Teesta river water flow.
    • Strategic location: From the perspective of India’s Northeast, Bangladesh is India’s most strategic neighbour, whom New Delhi cannot ever afford to ignore.
    • Cooperation needed: India’s dream of ‘Act East Policy’ can only be materialized with the helping hands of Dhaka.
    • Gateway to northeast: The bridge ‘Maitri Setu’ has been built over the Feni River which flows between the Indian boundary in Tripura State and Bangladesh. It is set to become the ‘Gateway of North East’ with access to Chittagong Port of Bangladesh, which is just 80 kms from Sabroom.

    Way forward

    • The future will present itself with an abundance of opportunities to help the two countries to reach a new plane of bilateral relations higher than ever before.
    • Both nations should play their diplomatic cards with more maturity and pragmatism, keeping the regional aspirations and nuances of both countries in mind.
    • A judicious aggregation of regional expectations on both sides of the border will help in achieving their mutual national objectives.
    • To make the recent gains irreversible, both countries need to continue working on the three Cs — cooperation, collaboration, and consolidation.

    Conclusion

    • For India it will take more than cosy relations with one particular government to have long-term stable relations with its most trusted friend in the neighbourhood.

    Mains question

    Q. Do you think Bangladesh is most trusted friend in the neighbourhood? Discuss bilateral relations between two in terms of trade, connectivity and geopolitics.

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  • Nord Stream Pipeline to remain shut

    Russian has said that it can‘t resume the supply of natural gas through a key pipeline to Germany for now because of what it said was a need for urgent maintenance work.

    Why in news?

    • There are growing concerns in European countries that Russia would shut down its gas supplies in retaliation against the current sanctions against Moscow.

    What is Nord Stream 1?

    • It is a system of offshore natural gas pipelines running under the Baltic Sea from Russia to Germany.
    • Nord Stream 1 is a 1,224 km underwater gas pipeline that runs from Vyborg in northwest Russia to Lubmin in northeastern Germany via the Baltic Sea.
    • Two further pipelines under construction running from Ust-Luga to Lubmin termed Nord Stream 2.
    • Majority owned by the Russian energy giant Gazprom, the pipeline is the primary route through which its gas enters Germany.

    Worry for Europe

    • There have been growing concerns that there could be further restrictions to European gas supplies.
    • European countries rely on Russian energy for their cold winters.
    • But now they believe that Russia could weaponized their dependency as a response to their sanction due to the conflict in Ukraine.

    What are Europe’s alternative sources of energy?

    • As an alternative source for energy, European countries have increasingly turned towards the US, from whom they purchase liquified natural gas (LNG) that comes via ships.
    • Since ship-delivered gas ends up being far more expensive, there are also attempts to get non-Russian pipeline gas from Norway and Azerbaijan.
    • While EU countries were earlier seeking to phase out fossil fuels and emphasize renewable forms of energy, many are now returning to coal to deal with the energy crisis.

     

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  • Importance of Tibetan Democracy Day

    A little more than six decades ago, Tibetan Democracy Day was marked with the inauguration of the Tibetan government-in-exile in Dharamshala on September 2.

    Tibetan Democracy Day

    • In February 1960, a little less than a year after he crossed over into India, the Fourteenth Dalai Lama outlined in Bodh Gaya, where The Buddha attained Enlightenment, a detailed program of democratic practice for exiled Tibetans.
    • According to the website of the Tibetan Parliament-in-Exile (TPiE), he advised them to set up an elected body with three exiled representatives each from the three provinces, and one each from the four religious schools of Tibetan Buddhism.
    • After elections were held, 13 elected representatives, called ‘Deputies’, were designated as the ‘Commission of Tibetan People’s Deputies’ (CTPD). They took oath on September 2, 1960.
    • Subsequently from 1975 onward, this date began to be formally observed as Tibetan Democracy Day.

    Parliament-in-Exile

    • The TPiE is the highest legislative body of the Central Tibetan Administration (CTA).
    • It is described as one of the three pillars of Tibetan democratic governance — the others being the Judiciary and the Kashag, or Executive.
    • The website of the TPiE underlines the Dalai Lama’s commitment to the democratic principle — it quotes the Dalai Lama from the Foreword to the Constitution for Tibet, drafted in 1963:
    • The CTA is based in Dharamsala, Himachal Pradesh.
    • Elections are held every five years to elect Members of the TPiE, and their Sikyong (Prime Minister). The 16th TPiE was elected in 2016.
    • This was the second direct election after the Dalai Lama distanced himself from the political functioning of the TPiE in 2011.

    The Government-in-Exile

    • On March 10, 1963, the Dalai Lama promulgated the Constitution of the Tibetan Government-in-Exile (TGiE).
    • From 1991 onwards, TPiE became the legislative organ of the CTA, the Tibetan Supreme Justice Commission became the judicial organ, and the Kashag the executive organ.
    • The TGiE is not recognised officially by any country, including India.
    • However, many countries, including the US, deal directly with the Sikyong and other Tibetan leaders through various forums.
    • The TPiE says its democratically elected character helps it manage Tibetan affairs, and raise the Tibetan issue across the world.
    • The current Sikyong (known as Kalön Tripa until 2012) of the CTA is Lobsang Sangay, who has been the head of the Kashag or Cabinet (first as Kalön Tripa and then as Sikyong) since 2011.

    What is India’s official policy towards the CTA?

    • India considers the Dalai Lama as a revered religious leader and an honored guest, but it does not encourage political activities by Tibetans.
    • It does not recognize any separate government of Tibet functioning in India.

     

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  • India, Bangladesh discuss River Water Sharing issues

    India and Bangladesh discussed a wide range of River Water Sharing issues related to the major common rivers such as the Ganga, Teesta and several others during the 38th meeting of the Joint River Commission (JRC).

    Rivers between India and Bangladesh

    • Overall, India and Bangladesh have 54 transboundary rivers between them, all of which are part of the drainage system of the Ganga-Brahmaputra-Meghna (GBM) basin.
    • The Padma (the Ganga), the Jamuna (the Brahmaputra) and the Meghna (the Barak) and their tributaries are integral in maintaining food and water security in Bangladesh.
    • In most of these cases, Bangladesh is the lower riparian.
    • This causes concern in Bangladesh that India—being both the upper riparian and first to develop the water resources—can have far more disproportionate control over the rivers.
    • Compounded by the lack of transparent data regarding trans-boundary rivers, such concern can lead to a more serious conflict between the two otherwise friendly neighbours.

    Genesis of the disputes

    • The issues between India and Bangladesh regarding water resource allotment can be traced to the time Bangladesh was still East Pakistan.
    • In 1961, India began construction of the Farakka Barrage—which was to be operational by April 1975—to divert a portion of the dry-season flow and increase the navigability of Kolkata port.
    • When India began its preliminary planning for the project in 1950-51, Pakistan immediately expressed concerns over the potential effect of the project on East Pakistan.

    Moves for disputes resolution: Joint River Commission

    • Soon after the independence of Bangladesh in 1971, the Joint River Commission was formed between India and Bangladesh in 1972.
    • In a joint declaration issued on 16 May 1974, the PM of Bangladesh and India acknowledged the need for the flow augmentation of the Ganga in the lean season to meet the requirements of both countries.

    Often in news: Teesta River Dispute

    • The Bangladesh government has been insistent on sealing the Teesta Waters Agreement, which has eluded settlement so far.
    • Teesta River is a 315 km long river that rises in the eastern Himalayas, flows through the Indian states of Sikkim and West Bengal through Bangladesh and enters the Bay of Bengal.
    • It is a tributary of the Brahmaputra (known as Jamuna in Bangladesh), flowing through India and Bangladesh.
    • It originates in the Himalayas near Chunthang, Sikkim and flows to the south through West Bengal before entering Bangladesh.
    • Originally, it continued southward to empty directly into the Padma River but around 1787 the river changed its course to flow eastward to join the Jamuna river.
    • The Teesta Barrage dam helps to provide irrigation for the plains between the upper Padma and the Jamuna.

    What is the dispute about?

    • The point of contention between India and Bangladesh is mainly the lean season flow in the Teesta draining into Bangladesh.
    • The river covers nearly the entire floodplains of Sikkim while draining 2,800 sq km of Bangladesh, governing the lives of hundreds of thousands of people.
    • For West Bengal, Teesta is equally important, considered the lifeline of half-a-dozen districts in North Bengal.
    • Bangladesh has sought an “equitable” distribution of Teesta waters from India, on the lines of the Ganga Water Treaty of 1996, but to no avail.
    • The failure to ink a deal had its fallout on the country’s politics, putting the ruling party of PM Sheikh Hasina in a spot.

    Q.The hydrological linkages between India and Bangladesh are a product of geography and a matter of shared history. Discuss this statement in line with the Teesta water-sharing dispute.

    The deal

    • Following a half-hearted deal in 1983, when a nearly equal division of water was proposed, the countries hit a roadblock. The transient agreement could not be implemented.
    • Talks resumed after the Awami League returned to power in 2008 and the former Indian PM Manmohan Singh visited Dhaka in 2011.
    • In 2015, PM Modi’s visit to Dhaka generated more ebullient lines: deliberations were underway involving all the stakeholders to conclude the agreement as soon as possible.

    Issues from the Indian side

    • It remains an unfinished project and one of the key stakeholders — West Bengal CM is yet to endorse the deal.
    • Her objection is connected to “global warming. Many of the glaciers on the Teesta basin have retreated.
    • The importance of the flow and the seasonal variation of this river is felt during the lean season (from October to April/May) as the average flow is about 500 million cubic metres (MCM) per month.
    • The CM opposed an arrangement in 2011, by which India would get 42.5% and Bangladesh 37.5% of the water during the lean season, and the plan was shelved.

    Why does this deal matters?

    • India and Bangladesh have resolved border problems through the Land Boundary Agreement of 2015.
    • However, both nations have locked horns over the sharing of multiple rivers that define the borders and impact lives and livelihoods on both sides.

     

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  • India-Srilanka Relations

     

    Context

    The present economic crisis in Sri Lanka has pushed it closer to India for immediate relief.

    Reasons for the Crisis

    The first wave of the pandemic in 2020 offered early and sure signs of distress.

    • In-migration: Thousands of Sri Lankan laborers in West Asian countries were left stranded and returned jobless.
    • Shut-down: Garment factories and tea estates could not function, as infections raged in clusters. Tourism sector to saw a big dip.
    • Domestic job losses: Thousands of youth lost their jobs in cities as establishments abruptly sacked them or shut down.
    • Forex decline: It meant that all key foreign exchange earning sectors, such as exports and remittances, along with tourism, were brutally hit.

    Reasons behind crisis

    • The Easter bomb blasts of April 2019 in churches in Colombo resulting in 253 casualties,consequently, dropped the number of tourists sharply leading to a decline in foreign exchange reserves.
    • The newly led government by Gotabaya Rajapaksa in 2019 promised lower tax rates and wide-ranging SoPs for farmers during their campaign.
    • No strategy: The lack of a comprehensive strategy to respond to the crisis then was coupled with certain policy decisions last year.
    • Ill-advised policies: It included the government’s abrupt switch to organic farming —widely deemed “ill-advised”, further aggravated the problem.
    • Food hoarding: The government declared emergency regulations for the distribution of essential food items. It put wide import restrictions to save dollars which in turn led to consequent market irregularities and reported hoarding.
    • Continuous borrowing: Fears of a sovereign default rose by the end of 2021, with the country’s foreign reserves plummeting to $1.6 billion, and deadlines for repaying external loans looming.

    Brief background of India-SL relations

    • India is the only neighbor of Sri Lanka, separated by the Palk Strait; both nations occupy a strategic position in South Asia and have sought to build a common security umbrella in the Indian Ocean.
    • There are deep racial and cultural links between the two countries. Both share a maritime border.
    • The India- SL relations have been however tested by the Sri Lankan Civil War and by the controversy of Indian intervention during the war.
    • In recent years Sri Lanka has moved closer to China, especially in terms of naval agreements.
    • India has signed a nuclear energy deal to improve relations and made a nuclear energy pact with Sri Lanka in 2015.

    India’s role in the Lankan Civil War

    • In the 1970s–1980s, the RAW and the state government of Tamil Nadu were believed to be encouraging the funding and training for the Liberation Tigers of Tamil Eelam (LTTE), a separatist insurgent force.
    • In 1987, faced with growing anger amongst its own Tamils, and a flood of refugees India intervened directly in the conflict for the first time.
    • This was after the Sri Lankan government attempted to regain control of the northern Jaffna region by means of an economic blockade and military assaults; India supplied food and medicine by air and sea.

    Why did India intervene?

    • Indian intervention in Sri Lankan civil war became inevitable as that civil war threatened India’s unity, national interest and territorial integrity.

    Outcomes

    • The peace accord assigned a certain degree of regional autonomy in the Tamil areas with a body controlling the regional council and called for the Tamil militant groups to lay down their arms.
    • Further India was to send a peacekeeping force, named the IPKF to Sri Lanka to enforce the disarmament and to watch over the regional council.
    • The accord failed over the issue of representations. The result was that the LTTE now found itself engaged in military conflict with the Indian Army.

    Areas of cooperation

    (1) Political Relations

    • Regular Exchange: Political relations between the two countries have been marked by high-level exchanges of visits at regular intervals.
    • Bilateral Cooperation: A joint statement covering all areas of bilateral cooperation, titled ‘MitratvaMaga’ was issued following the Virtual Summit of 2020.

    (2) Commercial Relations

    • ISFTA: The India-Sri Lanka Free Trade Agreement (ISFTA) in 2000 contributed significantly towards the expansion of trade in areas such as infrastructure, connectivity, transportation, housing, health, livelihood and rehabilitation, education, and industrial development.
    • Trading Partner: India has traditionally been among Sri Lanka’s largest trade partners and Sri Lanka remains among the largest trade partners of India in the SAARC.
      • In 2020, India was Sri Lanka’s 2nd largest trading partner with the bilateral merchandise trade amounting to about USD $ 3.6 billion.
    • India and Sri Lanka are member nations of several regional and multilateral organizations such as the South Asian Association for Regional Cooperation (SAARC), South Asia Co-operative Environment Programme, South Asian Economic Unionand BIMSTEC.
    • India is Sri Lanka’s third-largest export destination, after the US and UK.
    • Exports: Sri Lankan exports to India have increased substantially since 2000 when ISLFTA came into force.
    • FDI: India is also one of the largest contributors to Foreign Direct Investment in Sri Lanka. According to BoI, FDI from India amounted to about US$ 1.7 billion during the period 2005 to 2019.

    (3) Development Cooperation

    • Grants: The overall commitment by GOI is to the tune of more than USD 3.5 billion.
      • Demand-driven and people-centric nature of India’s development partnership with Sri Lanka have been the cornerstone of this relationship.
    • The Indian Housing Project: India has so far committed to construct close to 62,500 houses in Sri Lanka, making it one of the largest projects undertaken by GoI abroad.
    • Emergency Ambulance Service: The Service which was initially launched in July 2016 is now expanded to all the Provinces.
      • At a total cost of more than USD 22.5 million, close to 300 ambulances were provided by GOI under this project.
    • Other Projects: India is also involved in projects for renovation of Palaly Airport, Kankesanthurai Harbor, construction of a Cultural Centre in Jaffna, interconnection of electricity grids between the two countries, construction of a 150-bed hospital in Dickoya and setting up a coal power plant in Sampur as a joint venture between National Thermal Power Corporation (NTPC) and Ceylon Electricity Board (CEB).
    • Latest Development: India-SL agreed for joint development of Trincomalee Oil Tank farmed in 2022 after 35 years of wait.

    (4) Projects under Lines of Credit

    • Sectors: 11 Lines of credit (LOC) have been extended to Sri Lanka by the Export Import Bank of India in the last 15 years.
      • Important sectors under these LOCs include: Railway, transport, connectivity, defense, solar.
    • Infrastructure: Some important Projects completed are- supply of defense equipments; up-gradation of the railway line from Colombo to Matara; track laying by IRCON on Omanthai-Pallai sector; reconstruction of the Railway line; signaling and telecommunication system; supply of engine kits for buses, diesel locomotives railways, DMUs, Carrier and fuel tank wagons etc.
    • Rehabilitation: A project for the rehabilitation of the Kankesanthurai harbor is being executed under a LOC of USD 45.27 million, bringing immense economic benefits to the Northern region of Sri Lanka.
    • Solar Energy: A US$ 100 million LoC for undertaking solar projects in Sri Lanka has been signed for rooftop solar units for Government buildings, rooftop solar units for low-income families and a floating solar power plant.
    • Security: In 2019, a LOC of USD 400 million for development and infrastructure projects and USD 50 million for security and counter-terrorism were announced.
      • These LOC Agreements are currently under discussion.

    (5) Cultural relations

    • India and Sri Lanka have a shared legacy of historical, cultural, religious, spiritual and linguistic ties that is more than 2,500 years old.
    • In contemporary times, the Cultural Cooperation Agreement signed by the Government of India and the Government forms the basis for periodic Cultural Exchange Programmes between the two countries.

    (6) People-to-people ties: Buddhism

    • Buddhism is one of the strongest pillars connecting the two nations and civilizations from the time when Emperor Ashoka sent his children Arhat Mahinda and Sangamitta to spread the teachings of Lord Buddha at the request of King Devanampiya Tissa of Sri Lanka.
    • Underlining the deep people-to-people connect and shared Buddhist heritage, the venerated relics of Lord Buddha from Kapilawasthu discovered in 1970 in India have been exhibited two times in Sri Lanka.
    • India in 2020, announced USD 15 million grant assistance for the protection and promotion of Buddhist ties between India and Sri Lanka.
      • It may be utilized for the construction/renovation of Buddhist monasteries, education of young monks, strengthening engagement of Buddhist scholars and clergy, development of Buddhist heritage museums, etc.
    • Transport- In July 2020, the GoI declared the Kushinagar Airport in India, the place of Lord Buddha’s Mahaparinibbana, as an international airport, to allow Buddhist pilgrims from around the world to visit the revered site associated with Lord Buddha with ease.
    • The Swami Vivekananda Cultural Centre (SVCC)– since its inception in 1998, is actively promoting awareness of Indian culture by offering classes in Bharatnatyam, Kathak, Hindustani and Carnatic vocal, Violin, Sitar, Tabla, Hindi and Yoga.

    (7) Tourism

    • e-Visa- Tourism also forms an important link between India and Sri Lanka. GoI formally launched the e-Tourist Visa (eTV) scheme for Sri Lankan tourists on 14 April 2015.
    • Visa Fee- Subsequently, in a goodwill gesture, the visa fee for eTV was sharply reduced. In 2019, out of the total 1.91 million tourists, 355,000 tourists arrived from India.
    • Sri Lankan tourists too are among the top ten sources for the Indian tourism market.
    • Visa on arrival- On 24 July 2019 Sri Lanka included India in the free visa on arrival scheme and commenced the scheme on 1 August 2019.

    Plummeting relations

    • The ties began to worsen between the two since February, 2021 when Sri Lanka backed out from a tripartite partnership with India and Japan for its East Container Terminal Project at the Colombo Port, citing domestic issues.
      • However, later, the West Coast Terminal was offered under a public private partnership arrangement to Adani Ports and Special Economic Zones Ltd.
    • Sri Lanka in a state of economic emergency: Sri Lanka is running out of foreign exchange reserves for essential imports like food. It has recently declared a state of economic emergency.
    • Covid Impact:
      • Sri Lanka increased policy rates after the covid pandemic in response to rising inflation in August 2021 caused by currency depreciation.
      • Tourism sector has suffered since the Easter Sunday terror attacks of 2019, followed by the pandemic.
      • Earnings fell from $3.6 billion in 2019 to $0.7 billion in 2020, even as FDI inflows halved from $1.2 billion to $670 million over the same period.
      • Sri Lanka’s fragile liquidity situation has put it at high risk of debt distress. Its public debt-to-GDP ratio was at 109.7% in 2020, and its gross financing needs remain high at 18% of GDP.
      • Its gross official reserves slipped to $2.8 billion, which is equivalent to just 1.8 months of imports. More than $2.7 billion of foreign currency debt will be due in the next two years.

    Major outstanding issues

    1. Fishing disputes
    • There have been several alleged incidents of Sri Lankan Navy personnel firing on Indian fishermen fishing in the Palk Strait, where India and Sri Lanka are only separated by 12 nautical miles.
    • The issue started because of Indian fishermen having used mechanized trawlers, which deprived the Sri Lankan fishermen (including Tamils) of their catch and damaged their fishing boats.
    • The Sri Lankan government wants India to ban use of mechanized trawlers in the Palk Strait region, and negotiations on this subject are undergoing.
    • So far, no concrete agreement has been reached since India favors regulating these trawlers instead of banning them altogether.
    2.Alleged political interference
    • A media report from Colombo soon after Rajapaksa’s defeat in the January 8 elections of 2015 had said that an Indian Intelligence official was instrumental in uniting rival political parties — the Sri Lanka Freedom Party (SLFP) and the United National Party (UNP) — against him during the polls.
    • In October 2018, President Sirisena alleged that Indian intelligence agencies were plotting his assassination.
    3.Katchatheevu Island
    • It is an uninhabited island that India ceded to Sri Lanka in 1974 based on a conditional agreement called “Kachchativu island pact”.
    • Later on, Sri Lanka declared Katchatheevu, a sacred land given the presence of a Catholic shrine.
    • But Tamil Nadu claimed that Katchatheevu falls under the Indian Territory and Tamil fishermen have traditionally believed that it belongs to them and therefore want to preserve the right to fish there.
    4.China factor
    • Sri Lanka has a history of taking independent decisions even if they cause misgivings in India.
    • In the period of low profile relationship between the two nations, Sri Lanka apparently started favoring China over India.
    • China is Sri Lanka’s largest bilateral creditor: China’s loans to the Sri Lankan public sector amounted to 15% of the central government’s external debt, making China the largest bilateral creditor to the country.
      • Sri Lanka has increasingly relied on Chinese credit to address its foreign debt burden.
    • China’s Exports surpasses India: China’s exports to Sri Lanka surpassed those of India in 2020 and stood at $3.8 billion.
      • India’s exports were $3.2 billion.
    • Infrastructural Investment by China: Owing to Sri Lanka’s strategic location at the intersection of major shipping routes, China’s investment stands at $12 billion between 2006 and 2019.
      • Unable to service its debt, in 2017, Sri Lanka lost the unviable Hambantota port to China for a 99-year lease.
      • Sri Lanka passed the Colombo Port City Economic Commission Act, which provides for establishing a special economic zone around the port and also a new economic commission, to be funded by China.
      • The Colombo port is crucial for India as it handles 60% of India’s trans-shipment cargo.

    Why is Sri Lanka important to India?

    • India is Sri Lanka’s closest neighbor. Both sides have built upon a legacy of intellectual, cultural, religious and linguistic interaction.
    • Sri Lanka has always been politically and economically important to India given its strategic geographical position in the Indian Ocean. The relationship has been marked by close contacts at all levels.
    • Sri Lanka sits at the epicenter of the arc connecting the Persian Gulf to the Strait of Malacca. An island nation with an economy that’s mainly reliant on tourism and tea exports, Sri Lanka’s blessed geography puts it at a crucial juncture of the busy shipping lanes of the Indian Ocean.
    • India also has a vital strategic stake in Sri Lanka for its own security interests. An unfriendly Sri Lanka or a Sri Lanka under influence of a power unfriendly to India would strategically discomfit India.
    • For the Indian Navy, Sri Lanka is important as the switching of naval fleets from the Bay of Bengal to the Arabian Sea and vice versa requires the fleets to go around the island nation.
    • Both countries share a common broad understanding on major issues of international interest and experience common social-political problems relating to community divides.

    How India has helped to boost Sri Lanka’s economy

    • Grants: The overall commitment by GOI is to the tune of more than USD 3.5 billion. Demand-driven and people-centric nature of India’s development partnership with Sri Lanka have been the cornerstone of this relationship.
    • The Indian Housing Project: India has so far committed to construct close to 62,500 houses in Sri Lanka, making it one of the largest projects undertaken by GoI abroad.
    • Other Projects: India is also involved in projects for renovation of Palaly Airport, Kankesanthurai Harbor, construction of a Cultural Centre in Jaffna, interconnection of electricity grids between the two countries, construction of a 150-bed hospital in Dickoya and setting up a coal power plant in Sampur as a joint venture between National Thermal Power Corporation (NTPC) and Ceylon Electricity Board (CEB).
    • Latest Development: India-SL agreed for joint development of Trincomalee Oil Tank farmed in 2022 after 35 years of wait.

    sri lanka

    Impact of recent Economic crisis on India

    • Export:
      • Sri Lanka’s share in India’s total exports has declined from 2.16 percent in FY15 to just 1.3 percent in the first 10 months of FY22.
    • Shipping:
      • If the current situation in the island nation persists, it could cause a major disruption to the normal functioning of the Colombo Port.
      • This would be detrimental to India’s interest.
      • The port handles over 30 percent of India’s container traffic and 60 percent of its trans-shipment.
    • Investments:
      • India has had a substantial investment in Sri Lanka in areas including real estate, manufacturing, and petroleum refining. They all might be adversely affected if the crisis continued.
    • Migration:
      • Also, the continuing Sri Lankan crisis could compel many Sri Lankans to leave for India for their survival.
      • Already, scores of them have fled from the island nation to India.

    Opportunities for India for deeper engagement

    • Dairy sector: Sri Lanka imports a considerable quantity of milk powder. On average, Colombo annually imports dairy products worth $315 million. . India can help Sri Lanka develop its dairy sector.
    • Poultry sector: In this area, through its host of agricultural universities, India can share its knowledge on ways to increase both production and productivity.
    • Energy sector: Considering how the problem on the energy front exploded into a major political crisis in Sri Lanka, India’s participation in energy projects will be desirable.
    • Education sector: School education is another area where India’s presence could be more felt. India can expand its scheme of establishing smart classrooms and modern computer labs to cover all those institutions teaching children of hill country Tamils, the most underprivileged section in society.

    sri lanka

    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 them and it can still be a threat to them.
    • Modest investment in 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.

    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.
    • 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  society to places of Buddhist importance not only in north India but also in the south (Andhra Pradesh).
    • No china factor indeed: Labeling governments in Sri Lanka as “pro-China” or “pro-India” is irrelevant. It is evident that China’s economic and strategic salience in the subcontinent is not tied to the regime leadership. Previous Lankan President Maithripala Sirisena who considered as pro-India came to power criticizing the Chinese projects in Sri Lanka, but within two years into power, it extended full backing to the Chinese projects.

    Conclusion

    • Given the history of bilateral ties, instances such as the Hambantota controversy are bound to arise. But what should not be glossed over is that a politically and economically stable Sri Lanka will be in India’s interest too.

    Mains question 

    Q. There is no such thing as charity in international politics. Critically analyse this statement showing how India can reap benefits of economic cooperation with Sri Lanka.

     

     

  • Pakistan’s Flip-Flop on Trade with India

    Pakistan’s Finance Minister has stated that the government may consider importing vegetables and other edible items from India following the destruction of standing crops due to the massive floods in the region.

    Why in news?

    • This statement comes after three years when Islamabad downgraded trade ties with New Delhi over the abrogation of Article 370 in Kashmir in 2019.
    • The fundamentalist country sees ties with India as against the spirit of religion and betrayal to the so-called Kashmir cause.

    A U-turn by Pakistan

    • Pakistan’s double U-turn on resuming trade with India highlights the internal differences within the country.
    • There are huge differences between business and political communities, and the emphasis on politics over economy and trade.
    • It also signifies Pakistan cabinet’s grandstanding, linking normalisation of ties with India to Jammu and Kashmir.

    What is the news?

    • Pakistan has sought to import only three items from India, namely cotton, yarn and sugar.
    • It has no consensus on resuming bilateral trade completely.
    • This is based on Pakistan’s immediate economic needs and not designed as a political confidence-building measure to normalise relations with India.

    What changed Pakistan’s mind?

    (1) Decline of Textile sector

    • For the textile and sugar industries in Pakistan, importing from India is imperative, practical and is the most economic.
    • Yarn, cotton cloth, knitwear, bedwear and readymade garments form the core of Pakistan’s textile basket in the export sector.
    • By February 2020, there was a steep decline in the textile sector due to disruptions in supply and domestic production.
    • This is definitely due to dumping of cheap Chinese goods.
    • When compared to the last fiscal year (2019-20), there has been a 30% decline (2020-21) in cotton production.

    Do you know?

    Pakistan is the fifth-largest exporter of cotton globally, and the cotton-related products (raw and value-added) earn close to half of the country’s foreign exchange.

    (2) Crisis in the sugar industry

    • When compared to cotton, the sugar industry’s problem stem from different issues — the availability for local consumption and the steep price increase.
    • The sugar industry has prioritised exports over local distribution.
    • Increased government subsidy and a few related administrative decisions resulted in the sugar industry attempting to make a considerable profit by exporting it.
    • As a result, importing sugar from India would be cheaper for the consumer market in Pakistan.

    In a nutshell

    • Clearly, the crises in cotton and sugar industries played a role in the ECC’s decision to import cotton, yarn and sugar from India.
    • It would not only be cheaper but also help Pakistan’s exports.
    • This is also imperative for Pakistan to earn foreign exchange.

    Why all these have made headlines these days?

    • Pakistan is closer to bankruptcy like any other Chinese vassal state.
    • The second takeaway from the two U-turns — is the supremacy of politics over trade and economy, even if the latter is beneficial to the importing country.
    • For the cabinet, the interests of its own business community and its export potential have become secondary.
    • However, Pakistan need not be singled out; this is a curse in South Asia, where politics play supreme over trade and economy.
    • The meagre percentage of intra-South Asian Association for Regional Cooperation (SAARC) trade and the success (or the failure) of SAARC engaging in bilateral or regional trade would underline the above.
    • Trade is unlikely to triumph over politics in South Asia; especially in India-Pakistan relations.

    The Kashmir link

    • The third takeaway is the emphasis on Jammu and Kashmir by Pakistan to make any meaningful start in bilateral relations.
    • This goes against what it has been telling the rest of the world that India should begin dialogue with Pakistan.
    • Recently, both Pakistan’s PM and the Chief of Army Staff, Qamar Javed Bajwa, were on record stating the need to build peace in the region.
    • Bajwa even talked about “burying the past” and moving forward.
    • There were also reports that Pakistan agreeing to re-establish the ceasefire along the Line of Control (LoC) was a part of this new strategy.

    Conclusion

    • The latest statement by Pakistan’s cabinet that unless India revokes the 2019 decision in Jammu and Kashmir, there would be no forward movement.
    • This position also hints at Pakistan’s precondition to engage with India.
    • Pakistan has been saying that the onus is on India to normalise the process.
    • Perhaps, it is New Delhi’s turn to tell Islamabad that it is willing, but without any preconditions, and start with trade.
    • It may even allow New Delhi to inform Pakistan’s stakeholders about who is willing to trade and who is reluctant.

     

     

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  • Places in news: Taiwan Strait

    India has for the first time referred to what it called “the militarization of the Taiwan Strait”, marking a rare instance of New Delhi appearing to comment on China’s actions towards Taiwan.

    What is the news?

    • Two American warships have recently sailed very close to China through Taiwan Strait.
    • This has intimidated the China which is already fuming due to the visit of Nancy Pelosi.

    Taiwan Strait

    • The Taiwan Strait is a 180-kilometer wide strait separating the island of Taiwan and continental China (and Asia of course).
    • The strait is part of the South China Sea and connects to the East China Sea to the north.
    • The narrowest part is 130 km wide.

    Issues over Taiwan Strait

    • The Taiwan Strait is itself a subject of an international dispute over its political status.
    • China claims to enjoy sovereignty, sovereign rights and jurisdiction over the Taiwan Strait” and regards the waterway as “internal territorial waters” instead of being international waters.
    • This means that the Chinese government denies any foreign vessel having the freedom of navigation in the strait.
    • This position has drawn strong objections from the western World.

    India’s change of stance

    • India has followed a “One China policy” since its recognition of the PRC in 1949, and only maintains trade and cultural relations with Taiwan.
    • India routinely reiterated this policy until 2008 after which it stopped mentioning it in official statements.
    • This is a demand that China usually asks of most countries in official declarations.

    Why is India shifting its stance?

    • China often make provocative statements claiming Arunachal Pradesh.
    • It often moves to issue “stapled visas” to Indian citizens in Jammu and Kashmir and Arunachal.

     

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  • Reinvigorating the Chabahar Port

     

    After months of what appeared to be a go-slow, the Union government has pushed up its interest in using Iran’s Chabahar port to connect to Afghanistan and Central Asia for trade, with the visit of the Union Minister of Ports, Shipping & Waterways to the 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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