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Subject: Bilateral Relations

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

  • US investigation into India’s Digital Services Tax (DST)

    The US government has announced the further suspension of punitive tariffs for six months on India, Austria, Italy, Spain, Turkey, and the UK while it continues to resolve the DST investigation amid the ongoing multilateral negotiations at the OECD and the G20.

    Do you remember?

    GAFA tax—named after Google, Apple, Facebook, Amazon—is a proposed digital tax to be levied on large technology and internet companies.

    What are the Digital Services Taxes in India?

    • The NDA government had moved an amendment in the Finance Bill 2020-21 imposing a 2 percent digital service tax on trade and services by non-resident e-commerce operators with a turnover of over Rs 2 crore.
    • The new levy has expanded the ambit of the equalization levy for non-resident e-commerce operators involved in the supply of services, including the online sale of goods and provision of services.
    • E-commerce operators are obligated to pay the tax at the end of each quarter.
    • Estimates by the USTR indicate that the value of the DST payable by US-based company groups to India will be up to approximately $55 million per year.

    Also read:

    What are Digital Services Taxes?

    What is the story?

    • The US is focused on finding a multilateral solution to a range of key issues related to international taxation, including our concerns with digital services taxes.
    • It is trying to reaching a consensus on international tax issues through the OECD and G20 processes.

    Investigation regarding DST

    • The US has conducted a year-long investigation into digital services taxes imposed by countries, stating that they are against tech companies like Apple, Amazon, Google, and Facebook.
    • It had determined that the digital services taxes adopted by Austria, India, Italy, Spain, Turkey, and the UK has discriminated against US digital companies and were inconsistent with principles of international taxation, and burdened US companies.

    What’s the case against India?

    • In the case of India, the USTR’s proposed course of action includes additional tariffs of up to 25 percent ad valorem on an aggregate level of trade.
    • Around 26 categories of goods are in the preliminary list of products that would be subject to the additional tariffs.
    • This includes shrimps, basmati rice, cigarette paper, cultured pearls, semi-precious stones, silver powder and silver articles of jewelry, gold mixed link necklaces, and neck chains, and certain furniture of bentwood.

    Why does India need DST?

    • The agenda to reform international tax law so that digital companies are taxed where economic activities are carried is still a work in progress.
    • Due to this, countries are worried that they might cede their right to tax incomes. Therefore, many countries have either proposed or implemented a digital services tax.
    • The proliferation of digital service taxes (DSTs) is a symptom of the changing international economic order.
    • Countries such as India which provides large markets for digital corporations seek a greater right to tax incomes.
    • The taxation of the digitalized economy turned out to be a relatively contentious issue because there is a huge asymmetry in digital service providers and consumers.

  • COVID diplomacy 2.0, a different order of tasks

    The article highlights the contrast in India’s diplomacy during the first wave of the pandemic and the second wave. It also discusses the challenges ahead for India.

    India’s diplomatic structure in two Covid waves

    •  In the past month, the focus for the Ministry of External Affairs (MEA) and Missions abroad has shifted.
    • During the first wave of the pandemic, focus was on coordinating exports of COVID-19 medicines, flights to repatriate Indians abroad through the ‘Vande Bharat Mission’ after the lockdown, and then exporting vaccines worldwide- ‘Vaccine Maitri’.
    • After the second wave, Covid Diplomacy 2.0 has a different order of tasks, both in the immediate and the long term.
    • The immediate imperative was to deal with oxygen and medicine shortages that claimed the lives of thousands.
    • The Ministry of External Affairs has had to deal with internal health concerns while galvanising help from abroad for others.
    • Despite difficulties, the Ministry of External Affairs has completed the task of bringing in supplies in a timely manner, and with success.

    Dealing with vaccine shortage

    • Companies manufacturing AstraZeneca and Sputnik-V are stretched as far as future production is concerned.
    • The Chinese vaccines are out of consideration given bilateral tensions.
    • So, it is clear that India is looking to the U.S. to make up the shortfall.
    • This could be done in the following ways:
    • 1) Requesting the U.S. to share a substantial portion of its stockpile of AstraZeneca.
    • The U.S. government is holding up its AstraZeneca exports until its own United States Food and Drug Administration approves them.
    • 2) Asking the US to release more vaccine ingredients which are restricted for exports.
    • 3) To buy more stock outright from the three U.S. manufacturers, Pfizer, Moderna and Johnson & Johnson, and to encourage production in India of these vaccines.
    • Production of Johnson & Johnson single-dose vaccines in India, as had been announced during the Quad summit, will take some time.
    • The U.S. companies seem set on getting both an indemnity waiver from India as well as Emergency Use Authorisation prior to supplying them.
    • The Government may also need to make a change to its publicly announced policy that States in India will need to negotiate purchases directly, as the U.S. manufacturers want centralised orders, with payments up-front.

    2) Patent waiver

    • The promise of patent waivers, from India’s joint proposal at the World Trade Organization (WTO) will not reap early benefits.
    • Even though it has received support from world leaders such as the U.S., Russia and China.
    • Many countries including Japan, Australia, Brazil and EU are still holding out on the idea of freeing up intellectual property rights on vaccines for three years.
    • That could ultimately hold up proceedings at the WTO, as it works by consensus.

    3) Diplomatic fallout of vaccine collapse

    • The Government has defended its decision to export more than 66 million vaccines doses to 95 countries between January and April this year.
    • All exports were stopped as soon as cases in India began to soar.
    • Both India’s neighbours and partners in Africa as well as global agencies depending on India for vaccines have been left in the lurch by the Government’s failure to balance its vaccine budget.
    • For example, once India completed delivery of the first batch, of 550,000 Covishield doses, Bhutan completed the administration of the first dose to 93% of its population in a record 16 days.
    • Two months later, Bhutan does not have any vaccines to complete the second dose and has been left requesting other countries for vaccines.
    • It is no surprise that each of India’s neighbours has now sought help from China and the U.S. to complete their vaccination drives.

    4) Tracing virus pathways

    • India, as one of the worst pandemic-hit countries, must be at the forefront of demanding accountability on the origin of the virus.
    • The World Health Organisation (WHO) which studied “pathways of emergence” of SARS-CoV2 in Wuhan, listed four possibilities:
    • 1) Direct zoonotic transmission.
    • 2) An intermediate host.
    • 3) Cold chain or transmission through food.
    • 4) A laboratory incident.
    • China appears adamant on blocking these studies.
    • Even the U.S. appears to have dragged its feet on a conclusive finding, possibly because the U.S. National Institutes of Health had funded some of the Wuhan Institute’s research.

    Way forward on virus pathways

    • India must call for a more definitive answer and also raise its voice for a stronger convention to regulate any research that could lead, by accident or design, to something as the current pandemic.
    •  It is necessary to revamp the 1972 Biological Weapons Convention to institute an implementation body to assess treaty compliance, and build safer standards for the future.

    Consider the question “How different was the impact of two Covid-19 waves on India’s diplomacy? What are the challenges India faces in the near future in dealing with the fallout of the pandemic?”

    Conclusion

    With its seat at the UN Security Council as non-permanent member and its position on WHO’s Executive Board, India could seek to regain the footing it has lost over the past few months of COVID-19 mismanagement, by taking a lead role in ensuring the world is protected from the next such pandemic.

  • How Pakistan Plays the world

    The article explains evolution of Pakistan’s approach towards forming alliances and maintaining strategic autonomy against the backdrop of U.S. withdrawal from Afghanistan.

    New dynamic Pakistan has to face

    • As the US withdraws its troops from Afghanistan, Pakistan is eager to build a relationship with Washington that is not tied to US stakes in Afghanistan.
    • Pakistan does not want to be totally alienated from U.S. in the new geopolitical jousting between the US and China.
    • How Pakistan copes with the new dynamic between the US and China as well as manages the deepening crisis in Afghanistan would be of great interest to India.

    Striking the balance between autonomy and alliance

    • Autonomy is about the basic impulse for enhancing the degree of one’s freedom.
    • Alliances are about coping with real or perceived threats to one’s security.
    • Both are natural trends in international politics.
    • Joining an alliance does not mean ceding one’s sovereignty.
    • Within every alliance, there is a perennial tension between seeking more commitments from the partner in return for limiting one’s own.

    Explaining Pakistan’s approach to alliances

    • Pakistan’s insecurities in relation to India meant it was eager for alliances.
    •  And as the Anglo-Americans scouted for partners in the crusade against global communism, Pakistan signed a bilateral security treaty with the US and joined the South East Asia Treaty Organisation and Central Treaty Organisation in the mid-1950s.
    • Rather than target Pakistan’s alliance with a West that was intensely hostile to Beijing in the 1950s, Chinese premier Zhou Enlai saw room to exploit Pakistan’s insecurities on India.
    • While Pakistan’s ties with the US went up and down, its relationship with China has seen steady expansion.
    • Pakistan’s relations with the US flourished  after the Soviet Union sent its troops into Afghanistan at the end of 1979.
    • The US and Pakistan reconnected in 2001 as Washington sought physical access and intelligence support to sustain its intervention in Afghanistan following the attacks on September 11.
    • Now the US wants Pakistan to persuade the Taliban to accept a peaceful transition to a new political order in Afghanistan.

    Pakistan’s ability to adapt to shifting geopolitical trends

    • Pakistan worries that its leverage in U.S. will diminish once the US turns its back on Afghanistan and towards the Indo-Pacific.
    • Pakistan does not want to get in the Indo-Pacific crossfire between the US and China.
    • It would also like to dent India’s growing importance in America’s Indo-Pacific strategy.
    • India should not underestimate Pakistan’s agency in adapting to the shifting global currents.
    • Pakistan has been good at using its great power alliances to its own benefit.

    Three problems that complicates Pakistan’s strategic autonomy

    • 1) Relative economic decline: Pakistan’s expected aggregate GDP at around $300 billion in 2021 is 10 times smaller than India’s.
    • 2) Obsession with Kashmir: Pakistan’s enduring obsessions with separating Kashmir from India, and extending its political sway over Afghanistan; both look elusive despite massive political investments by the Pakistan army.
    • Unsurprisingly, there is a recognition that Pakistan needs reorientation — from geopolitics to geoeconomics and permanent war with neighbours to peace of some sorts.
    • 3) Using religion as political instrument: Turning Islam into a political instrument and empowering religious extremism seemed clever a few decades ago.
    • However, today those forces have acquired a life of their own and severely constrain the capacity of the Pakistani state to build internal coherence and widen international options.

    Conclusion

    It will be unwise to rule out Pakistan’s positive reinvention; no country has a bigger stake in it than India. For now, though, Pakistan offers a cautionary tale on the dangers of squandering a nation’s strategic advantages — including a critical geopolitical location that it had inherited and the powerful partnerships that came its way.

  • India must engage with Nepal-without intervening

    The article suggests recalibration of India’s approach towards political turmoil in Nepal.

    Nepal in political crisis

    • For the second time in weeks, Prime Minister K P Oli has persuaded President Bidya Devi Bhandari to dissolve parliament and call for fresh elections.
    • That is, unless the Supreme Court decides to declare the dissolution of parliament as unconstitutional, as it had done in the recent past.
    • The current dissolution has been challenged in the court by five political parties.

    Medhesi demand fulfilled

    • Prime Minister Oli has also delivered on the longstanding Madhesi demand to reverse a constitutional provision which denied citizenship to children born of Nepali mothers who had foreign husbands.
    • The widespread unrest in the Terai adjoining India in 2015 was triggered by this attempt to deny equal rights to the Madhesi population.
    • This provision had directly targeted the Madhesi population, which has close kinship and marital ties across the border with India.
    • While this provision has now been removed through a presidential ordinance, it could well be reversed in future by Nepali political parties dominated by the higher caste.

    Steps India needs to take

    • Political uncertainty in a neighbouring country is never good news for India, particularly in Nepal with whom we share a long and open border.
    • The Indian government has maintained a studied silence on the current political developments in Nepal and this may be the right thing to do.
    • But this silence should not imply the lack of a proper assessment of the political situation in Nepal and what would serve the interests of India best.
    • Following are the steps India need to take:

    1) India should declare it does not support the revival of monarchy

    •  The abolition of the monarchy is a net gain for India and the government must firmly and unambiguously declare that it does not support the revival of the monarchy, which has already been rejected by its people.
    • India should declare its unconditional support to Nepal’s republican democracy.

    2) Remain engaged with Nepal

    • India should remain fully engaged with Nepal at all levels and across the political spectrum.
    • The safeguarding of India’s vital interests demands such sustained engagement.
    • A hands-off policy will only create space for other external influences, some of which, like China, may prove to be hostile.
    • However, engagement must dispense with the recurrent tendency to label Nepali political leaders as friends or enemies.
    • India should advocate policies rather than persons.

    3) Recognise the role of Madhesi population

    • In India’s engagement with Nepal, the Terai belt and its large Madhesi population plays a critical and indispensable role.
    • In an effort to win over the Kathmandu political and social elite, one should be careful not to neglect citizens living in the plains.
    • Our engagement with Nepal must find an important place for Nepali citizens who are our immediate neighbours and act as a kinship, cultural and religious bridge between our two countries.

    4) Appreciate people-to-people link

    • India needs to appreciate that the people-to-people links between our two countries have an unmatched density and no other country, including China, enjoys this asset.
    • The challenge to our Nepal policy lies in leveraging this precious asset to ensure a stable and mutually-productive state-to-state relationship.
    • India has every reason to approach its relations with Nepal with confidence and assurance.

    Consider the question “What are the factors that make India-Nepal relationship special? What are the recent challenges impacting this special relationship? ” 

    Conclusion

    The safeguarding of India’s vital interests demands India’s engagement with Nepal without intervening in its politics. A hands-off policy will only create space for other external influences.

  • Currency swap between Bangladesh and Sri Lanka

    Bangladesh’s central bank has approved a $200 million currency swap facility to Sri Lanka.

    Practice question for mains:

    Q. What are Currency Swaps? Discuss the efficacy of Currency Swap Agreements for liberalizing bilateral trade.

    What is a Currency Swap?

    • In this context, a currency swap is effectively a loan that Bangladesh will give to Sri Lanka in dollars, with an agreement that the debt will be repaid with interest in Sri Lankan rupees.
    • For Sri Lanka, this is cheaper than borrowing from the market, and a lifeline as is it struggles to maintain adequate forex reserves even as repayment of its external debts looms.
    • The period of the currency swap will be specified in the agreement.

    A helping hand for SL

    • Bangladesh Bank, the central bank, has in principle approved a $200 million currency swap agreement with Sri Lanka.
    • Dhaka decided to extend the facility after a request by Sri Lankan PM Mahinda Rajapaksa to Bangladesh’s PM Sheikh Hasina.
    • It will help Colombo tide over its foreign exchange crisis, according to media reports from Bangladesh, quoting the bank’s spokesman.
    • Sri Lanka, staring at an external debt repayment schedule of $4.05 million this year, is in urgent need of foreign exchange.

    An unusual move

    • Bangladesh has not been viewed so far as a provider of financial assistance to other countries.
    • It has been among the most impoverished countries of the world, and still receives billions of dollars in financial aid.
    • But over the last two decades, its economy has pulled itself up literally by the bootstraps, and in 2020, was the fastest growing in South Asia.
    • Bangladesh’s economy grew by 5.2 percent in 2020 and is expected to grow by 6.8 percent in 2021.
    • The country has managed to pull millions out of poverty. Its per capita income just overtook India’s.

    A break in monopoly

    • This may be the first time that Bangladesh is extending a helping hand to another country, so this is a landmark of sorts.
    • It is also the first time that Sri Lanka is borrowing from a SAARC country other than India.
    • The presumption was that only India, as the regional group’s largest economy, could do this.
    • The Bangladesh-Sri Lanka arrangement shows that is no longer valid.

    Why didn’t SL approach India?

    • Last year, it requested for a $1 billion credit swap, and separately, a moratorium on debts that the country has to repay to India.
    • But India-Sri Lanka relations have been tense over Colombo’s decision to cancel a valued container terminal project at Colombo Port.
    • India put off the decision, but Colombo no longer has the luxury of time.

    Is SL in a crisis?

    • With the tourism industry destroyed since the 2019 Easter attacks, Sri Lanka had lost one of its top foreign exchange pullers even before the pandemic.
    • The tea and garment industries have also been hit by the pandemic affecting exports.
    • Remittances increased in 2020, but are not sufficient to pull Sri Lanka out of its crisis.
    • The country is already deep in debt to China. According to media reports, Sri Lanka owes China up to $5 billion.

    What about the previous swap facility that India gave Sri Lanka?

    • Last July, the RBI did extend a $400 million credit swap facility to Sri Lanka, which the Central Bank of Sri Lanka settled in February. The arrangement was not extended.
    • RBI has a framework under which it can offer credit swap facilities to SAARC countries within an overall corpus of $2 billion.
    • According to RBI, the SAARC currency swap facility came into operation in November 2012 with the aim of providing to smaller countries in the region.

  • One-state solution, the way forward in Palestine

    The article highlights the challenges in the success of a two-state solution to the Israel-Palestine conflict and suggests the one-state solution instead.

    Background of the two-state solution

    • It involves dividing Palestine between the state of Israel and the indigenous population of Palestine.
    • It was first offered by the British in 1937 and rejected by the Palestinians already then.
    •  In 1947 the United Nations insisted that the Palestinians should give half of their homeland to the settler movement of Zionism.
    • The two-state solution, offered for the first time by liberal Zionists and the United States in the 1980s, is seen by some Palestinians as the best way of ending of the occupation of the West Bank .
    • It will also lead to the partial fulfilment of the Palestinian right for self-determination and independence.

    Interpretation of two-state solution

    • The Israeli interpretation, until 2009, was that the two-state solution is another means of having the territories, the West Bank and the Gaza Strip, without incorporating most of the people living there.
    • In order to ensure it, Israel partitioned the West Bank which is 20% of historical Palestine into a Jewish and an Arab part.
    • This was in the second phase of the Oslo Accords, known as the Oslo II agreement of 1995.
    • One area, called area C, which consists of 60% of the West Bank was directly ruled from 1995 until today by Israel.
    • Now, Israel is in the process of officially annexing this area.
    • 40% of the West Bank, areas A and B under Oslo II, were put under the Palestinian Authority.
    • Palestinian Authority calls itself the state of Palestine, but in essence has no power whatsoever, unless the one given to it, and withdrawn from it, by Israel.
    • In 2018 a citizenship law was passed known as the nationality law.
    • As per the citizenship law, the Palestinian citizens who live in Israel proper which is Israel prior to the 1967 occupation of the West Bank and the Gaza Strip and who are supposedly equal citizens of the Jewish state, will in essence become the Africans of a new Israeli Jewish apartheid state.

    Issues with two-state solution

    • The endless negotiation on the two-state solution was based on the formula that once the two states become a reality, Israel will stop these severe violations of the Palestinian civil and human rights.
    • But while the wait continued, more Palestinians were expelled and the Jewish settler community in the West Bank grew in size.
    • The two-state solution is not going to stop the ethnic cleansing; instead, talking about it provides Israel international immunity to continue it.

    Way forward

    • The only alternative is to decolonise historical Palestine.
    • New state should a state for all its citizens all over the country, based on the dismantlement of colonialist institutions, fair redistribution of the country’s natural resources, compensation of the victims of the ethnic cleansing and allowing their repatriation.
    •  Settlers and natives should together build a new state that is democratic, part of the Arab world and not against it, and an inspiration for the rest of the region.

    Conclusion

    The one-state solution is the way forward in Palestine and that should be the state for all citizens.

  • China’s 17+1 Cooperation Forum

    Lithuania has decided to quit China’s 17+1 cooperation forum with central and eastern European states that include other EU members, calling it “divisive”.

    About 17+ 1 Forum

    • The forum is an abbreviation for Cooperation between China and Central and Eastern European Countries.
    • It is an initiative by the Chinese Ministry of Foreign Affairs to promote business and investment relations between China and 16 countries of CEE (CEEC).
    • The countries are Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Greece, Hungary, Latvia, North Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, and Slovenia.
    • The format was founded in 2012 in Warsaw to push for the cooperation of the “17+1” (the 17 CEE countries and China).
    • Its goals are to promote the Chinese Belt and Road Initiative and enhance cooperation in the fields of infrastructure, transportation, and logistics, trade and investment”.

  • India needs to engage with U.S. progressives

    The artcle highlights the role played by the progressive section in the US politics in influencing U.S. governments decision on TRIPS waiver and providing aid to India. Incidentally, these progressives include names such as Pramila Jayapal whose comment on human rights violations in Jammu and Kashmir had annoyed India.

    What led to change in U.S.’s approach on aid

    • There was a shift in the U.S.’s approach on providing COVID-19-related aid to India as well as on the Trade-Related Aspects of Intellectual Property Rights (TRIPS) waiver on COVID-19 vaccines.
    • It is tempting to surmise the shift as being driven by the Comprehensive Global Strategic Partnership with New Delhi.
    • But it is more than just that.
    • The development was a result of the determined push by some sections of the political and business class, civil society, and Indian Americans.
    • Besides them, the progressives in the Democratic Party made a big difference.

    Role of the progressives

    • Days ahead of the May 5 decision of the Biden administration on the TRIPS waiver, 110 members of the U.S. Congress wrote to President Biden urging him to support the waiver.
    • Thus, the Biden administration’s decision on the waiver and the vaccines, characterised as courageous by many, was a result of the push by the progressives.
    • Joining in this effort, the co-chair of the Congressional India Caucus, and over 50 colleagues wrote last week to President Biden seeking supply of specific items.
    • The overall approach is to work with India in its battle against the second wave and prepare for subsequent ones.

    Conclusion

    It is evident that the progressives have a grip on policymaking. India will have to remain engaged with this section instead of offering a cold shoulder as it did in the recent past. As the adage goes, all politics is local.

  • Explained: India, Israel and Palestine Ties

    Recently India’s permanent representative to the UN made a carefully crafted statement at the UN Security Council “open debate” on the escalating Israel-Palestine violence.

    Must read:

    [Burning Issue] West Asia Peace Plan

    The story so far

    • The violence started on 6 May, when Palestinian protests began in Jerusalem over an anticipated decision of the Supreme Court of Israel on the eviction of six Palestinian families a neighbourhood of occupied East Jerusalem.
    • Israel’s operation “Guardian of the Walls” began with attacks on Hamas (a fundamentalist Palestinian group) tunnels close to the border fence with Israel.
    • India has adopted a balanced approach to the current Israeli-Palestine conflict that has pushed the volatile region into yet another cycle of violence.

    India’s long-standing position

    • India has since long been maintaining that the Israel-Palestine conflict should be resolved through negotiation resulting in sovereign, independent, viable and united State of Palestine, with East Jerusalem as its capital.
    • India has urged both countries to “engage with each other, including on the recent proposals put forward by the United States, and find an acceptable two-state solution for peaceful coexistence”.

    The dilemma

    • India seems to strive to maintain a balance between India’s historic ties with Palestine and its blossoming relations with Israel.
    • The request that both sides refrain from “attempts to unilaterally change the existing status quo including in East Jerusalem and its neighbourhoods” seems to be a message to Israel about its settler policy.
    • The statement was also emphatic that “the historic status quo at the holy places of Jerusalem including the Haraml al-Sharif/Temple Mount must be respected”.

    Ties with spikes

    • India’s policy on the longest-running conflict in the world has gone from being unequivocally pro-Palestine for the first four decades, to a tense balancing act with its three-decade-old friendly ties with Israel.
    • In recent years, India’s position has also been perceived as pro-Israel.

    From Nehru to Rao

    • The balancing began with India’s decision to normalize ties with Israel in 1992, which came against the backdrop of the break-up of the Soviet Union.
    • There were massive shifts in the geopolitics of West Asia on account of the first Gulf War in 1990.
    • That year, the Palestinian Liberation Organisation (PLO) lost much of its clout in the Arab world by siding with Iraq and Saddam Hussein in the occupation of Kuwait.
    • The opening of an Indian embassy in Tel Aviv in January 1992 marked an end to four decades of giving Israel the cold shoulder, as India’s recognition of Israel in 1950 had been minus full diplomatic ties.
    • PM Nehru’s reasoning for the decision to recognise Israel was that it was “an established fact”, and that not doing so would create bitterness between two UN members.

    Why did India then support Palestine?

    • In 1948, India was the only non-Arab-state among 13 countries that voted against the UN partition plan of Palestine in the General Assembly that led to the creation of Israel.
    • Scholars ascribe various reasons for this India’s own Partition along religious lines; as a new nation that had just thrown off its colonial yoke; solidarity with the Palestinian people who would be dispossessed; and to ward off Pakistan’s plan to isolate India over Kashmir.
    • Later, India’s energy dependence on the Arab countries also became a factor, as did the sentiments of India’s own Muslim citizens.

    India and Palestine

    • The relationship with Palestine was almost an article of faith in Indian foreign policy for over four decades.
    • At the 53rd UN session, India co-sponsored the draft resolution on the right of the Palestinians to self-determination.
    • In the 1967 and 1973 wars, India lashed out at Israel as the aggressor.
    • In the 1970s, India rallied behind the PLO and its leader as the sole and legitimate representative of the Palestinian people.
    • In 1975, India became the first non-Arab country to recognise the PLO as the sole representative of the Palestinian people and invited it to open an office in Delhi.
    • In 1988, when the PLO declared an independent state of Palestine with its capital in East Jerusalem, India granted recognition immediately.

    Continuity for the cause

    • India voted in favour of the UN General Assembly resolution in October 2003 against Israel’s construction of a separation wall.
    • It voted for Palestine to become a full member of UNESCO in 2011, and a year later, co-sponsored the UNGA resolution that enabled Palestine to become a “non-member” observer state at the UN without voting rights.
    • India also supported the installation of the Palestinian flag on the UN premises in September 2015.

    Changes after 2014

    • For two-and-a-half decades from 1992, the India-Israel relationship continued to grow, mostly through defence deals, and in sectors such as science and technology and agriculture.
    • But India never acknowledged the relationship fully.
    • There were few high-profile visits, and they all took place when the PM Vajpayee was in office.
    • Israel was perceived as an ideal of a “strong state” that deals “firmly” with “terrorists”.
    • It was during NDA-2 that the government under PM Modi decided to take full ownership of the relationship with Israel.

    Balancing act

    • Meanwhile, India continues to improve ties with Arab countries, especially Saudi Arabia and the UAE and feels vindicated by the decision of some Arab states to improve ties with Israel.
    • For instance, even as it abstained at UNESCO in December 2017, India voted in favour of a resolution in the UNGA opposing Trump’s recognition of Jerusalem as the Israeli capital.

  • The costs of relying on China to become more apparent to India’s neighbours

    The article explains the implications of China’s assertive foreign policy for India’s neighbours.

    Chinese warning to Bangladesh

    • The Chinese ambassador to Bangladesh warned Bangladesh against joining the Quad and added that it will risk “significant damage” to its relationship with Beijing if it warms up to the Quad.
    • This came as a surprise as China was warning Bangladesh against joining a club that has no plans to invite new members, let alone Bangladesh.
    • China always used tough language when it came to issues of its sovereignty and territorial integrity.
    • The aggressive style now covers a much broader range of issues.
    • Beijing is conscious that Bangladesh’s impressive economic performance in recent years as well as its location at the top of the Bay of Bengal littoral lends a new strategic salience to Bangladesh.
    • China notes India’s growing diplomatic investment in developing a strategic partnership with Bangladesh.
    • China is also not blind to the emerging interest in US and Japan to expand cooperation with Dhaka.
    • Bangladesh, which supports China’s Belt and Road Initiative, is open to similar infrastructure cooperation with the US, Japan and India.

    China’s wolf worrier diplomacy

    • The new wolf warrior diplomacy confronts head-on any criticism of China in the public sphere.
    • India has been at the receiving end of this policy for a while — especially during the recent crises of Doklam and Ladakh.
    • But India’s South Asian neighbours, all of whom enjoy good relations with China, are only now getting a taste of Beijing’s new diplomatic medicine.
    • Chinese Ambassador’s public remarks about the Quad were about telling Bangladesh to resist any Indo-Pacific temptation.
    • Pre-emption is very much part of Beijing’s strategic culture.

    What such assertive diplomacy mean for South Asia

    • Delhi has learnt after long that too much diplomatic interference in the Subcontinent has tended to undermine the pursuit of India’s regional objectives.
    • China, as the world’s newest superpower, probably bets that its substantive leverages — including economic, diplomatic, and military — will limit the costs while deterring smaller nations from crossing the markers that it lays down.
    • South Asian elites have always seethed at India meddling in their internal affairs; they have held up China’s non-interventionist policy as a welcome alternative.
    • The controversy in Bangladesh over China’s remark on joining Quad should help update their past images of Beijing
    • India is now more circumspect than before about interventions in the region.
    • It recognises that avoiding knee-jerk interventions is a sensible policy.
    • Our neighbours have always complained about India’s inefficiency in implementing economic projects and contrasted this with China’s speed and purposefulness.
    • But they are also discovering the flip side of Chinese economic efficiency — the capacity to set and implement terms of cooperation that are not always in favour of the host nation.
    • All the regimes in the region have had access to different sections of the Indian elite and some capacity to shape the discourse on neighbourhood policies.
    • They have no political recourse at all in China’s closed political system.

    Consider the question “As Beijing becomes ever more assertive in South Asia, the costs of relying on China are likely to become more apparent to South Asia’s smaller nations. Comment.”

    Conclusion

    Until now, Chinese support against India seemed free of cost. As Beijing becomes ever more assertive in South Asia, the costs of relying on China are likely to become more apparent.