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Subject: International Relations

  • 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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  • QUAD

    New Delhi will host an official-level meeting of the Quad grouping with the US, Japan and Australia next week, the first such “senior officers meeting” (SOM) to be held since the recent escalation of tensions over the Taiwan Strait.

    Quadrilateral Security Dialogue: A Backgrounder

    Quadrilateral Security Dialogue or the Quad is an informal strategic forum between the United States, Japan, India and Australia that is maintained by semi-regular summits, information exchanges and military drills between member countries.

    • The US, Japan, India and Australia came together in the aftermath of the 2004 Indian Ocean tsunami to assist the devastated countries.
    • Later, officials of the four countries met in 2007 “to look at issues of common interest.” During an India visit, then Japanese PM Shinzo Abe unveiled the idea of “the Confluence of the Two Seas” that gave birth to the concept of the Indo-Pacific.
    • A decade later officials of the four countries met in the Philippines in 2017 to talk about an aggressively rising China.
    • In 2019, the foreign ministers of the Quad countries met in Washington for the first time.
    • In November, the Quad nations came together to participate in a two-phase joint military exercise, Malabar 2020, in the Bay of Bengal and in the Arabian Sea.

    Now it is increasingly viewed as ‘Asian NATO’.

    Focus on Indo-Pacific: For the China-wary world

    • The latest meeting of Quad comes at a time when all four countries have either trade or security disputes with China.
    • Despite not explicitly mentioning China, Quad has been openly supporting a “free and fair” Indo-Pacific which is seen as a clear message to Beijing that it needs to curb its assertive behaviour.
    • The optics were hard to miss when India, the US, Japan and Australia joined their navies for the mega Malabar military exercise late last year, an activity which raised alarm in Beijing.
    • This posturing by the Quad nations sent a strong signal to China.

    (1) US vs China

    • USA had followed a policy to contain China’s increasing influence in East Asia. Therefore, USA sees the coalition as an opportunity to regain its influence in the Indo-Pacific region.
    • The US has described China, along with Russia, as a strategic rival in its National Security Strategy, National Defence Strategy and the Pentagon’s report on Indo-Pacific Strategy.
    • Both are navigating intense disagreements over trade and human rights in Tibet, Hong Kong and the western Xinjiang region, as well as the coronavirus pandemic and increasing Chinese assertiveness in the South China Sea.

    (2) Australia vs China

    • Australia is concerned about China’s growing interest in its land, infrastructure and politics, and influence on its universities.
    • Ties have been on a downward spiral since 2018 when Australia, accusing China of meddling in its domestic affairs, passed a new law against foreign interference and espionage.
    • It also barred Huawei from building the country’s 5G mobile network, among the first countries to do so, citing national security.
    •  The atmosphere worsened when  PM Scott Morrison’s government called for an international inquiry into the origins of the coronavirus that causes Covid-19.

    (3) Japan vs. China

    • Tensions between Japan and China over the Senkaku/Diaoyu Islands dispute have recently increased.
    • China has relentlessly continued attempts to unilaterally change the status quo by coercion in the sea area around the Senkaku Islands.
    • The more salient indicator is the number of Chinese patrols inside the territorial sea of the islands, which Japan sees as an explicit violation of its territorial sovereignty.

    (4) India vs. Quad

    • India’s strained relations with China needs no explanation. The year long border dispute is the testimony.
    • The Quad summit is taking place in the backdrop of an ongoing military disengagement between India and China following their months-long border standoff in eastern Ladakh.
    • China is increasing its footprint in our neighborhood through its Belt and Road policy and political coercion following the debt trap are some of the increasing concerns other than economic imbalance.

    Opportunities unveiled for India

    India’s engagement with the Quad goes back to China’s expanding footprint in South Asia and the Indian Ocean Region over the last few years. India can reap some benefits as discussed below:

     (1) Checkmating the Chinese

    • The maritime sphere is wide open to India to undertake coalition building, rule sets, and other forms of strategic exploration than compared to land borders.
    • The maritime space is more important to China than engaging in land grab attempts in the Himalayas. A huge chunk of Chinese trade happens via the Indian oceanic routes that pass through maritime chokepoints.

    (2) Channelizing geo-politics

    • There is a growing great power interest in the maritime sphere, especially with the arrival of the concept of ‘Indo-Pacific’. For instance, many European countries have recently released their Indo-Pacific strategies.
    • The most recent was for France to send its warship in the international waters of the South China Sea.

    (3) Maritime domain for India

    • Above is the backdrop against which one must see the progressive evolution of Exercise “Malabar”,
    • In the beginning, it was a bilateral event involving just the Indian and US navies. It became tri-lateral with the inclusion of Japan in 2015.
    • And now it has transformed into a four-cornered naval drill that will also include Australia.

    (4) Check on China’s India Ocean Ambitions

    • The Quad has a valuable role to play as a check on China’s Indian Ocean ambitions.
    • India must develop ingrained habits of interoperable cooperation with its Quad partners.
    • This interoperable cooperation could pre-emptively dissuade China from mounting a naval challenge in its backyard.

    (5) Eccentricity in South Asia

    • With India, located right at the centre of the Indo-Pacific geopolitical imagination can realize the vision of a ‘broader Asia’ that can extend its influence away from geographical boundaries.
    • Further, India with Quad countries can check the imperialist policies of China in the Indian Ocean region and ensure Security and growth for all in the region.

    Issues with Quad

    (1) Structural problems

    • The Quad has a core structural problem as its objective pivots around the U.S.
    • The Quad riles China as a hostile grouping, but hardly serves the security interests of its members.
    • Despite rhetoric relating to the promotion of a ‘rules-based’ world order, the Quad neither shares a strategic vision nor is it animated by a shared agenda.

     (2) Nature of alliance

    • Alliances involve written commitments to come to the defence of the other against a third party.
    • Despite the potential for cooperation, the Quad remains a mechanism without a defined strategic mission.

    (3) Economic alliance not feasible

    • Quad is neither a military alliance nor an economic partnership.
    • Its intention to counter China in the rare-earth sector is logical given the dominant role the country plays in supplying more than half of the world’s such key materials.
    • But, for a country like India, the lack of relevant technologies and talent pool could obstruct its progress in building up a supply chain from scratch.

     (4) Overt emphasis on Maritime domain

    • The entire focus on the Indo-Pacific makes the Quad a maritime, rather than a land-based grouping, raising questions whether the cooperation extends to the Asia-Pacific and Eurasian regions.
    • India’s core concerns with China are primarily undemarcated borders and trade deficit.

     (5) Lack of existence of Indo-Pacific system

    • There has never been Indo-Pacific system ever since the rise of the port-based kingdoms of Indochina in the first half of the second millennium.
    • There were two Asian systems — an Indian Ocean system and an East Asian system — with intricate sub-regional balances.
    • The effort by a U.S. to artificially manufacture to combine the Indo and the Pacific into a unitary system is unlikely to succeed.

    (6) Indian borders can go more vulnerable

    • A lesson for India is China’s long-held and strategic interest in parts of Jammu and Kashmir.
    • It is wrongly argued that it is Pakistan that is the issue in J&K.
    • China undoubtedly is as big an issue but has quietly hidden behind Pakistan’s cover.

    Challenges: China will retaliate

    (1) China’s assertiveness

    • China claims that it has historical ownership over nearly the entire region of South China Sea, which gives it the right to manufacture islands.
    • However, the International Court of Arbitration rejected the claim in 2016.
    • Since then, the incidences of Chinese transgression has only increased making China more assertive for its interest.

    (2) Preying small nations

    • The ASEAN countries have a well-knit relationship with China. So are other SAARC countries have fallen prey to Chinese debt traps.
    • The Regional Cooperation Economic Partnership (RCEP) is a recent example of China’s increasing influence over ASEAN nations to which Australia is even a forerunner.

    (3) Chinese monopoly

    • Considering the economic might of China and the dependence of Quad nations like Japan and Australia on China, the Quad nations cannot afford to have strained relations with it in the long run.
    • India too, is still very heavily dependent on Chinese exports.

    Way Forward

    • Need for a clearer vision: It is important for members of the Quad not to be reactive. It is also important to exhibit openness, and ensure that all talk of a ‘Free and Open Indo-Pacific’ is more than just a mere slogan.
    • Consensus for a common objective: The Quad nations need to better explain the Indo-Pacific Vision in an overarching framework with the objective of advancing everyone’s economic and security interests.
    • Setting an agenda: This will reassure the littoral States that the Quad will be a factor for regional benefit, and a far cry from Chinese allegations that it is some sort of a military alliance. Future meetings can be an opportunity to define the idea and chart a future path.
    • Expanding Quad: India has many other partners in the Indo-Pacific; therefore India should pitch for countries like Indonesia, Singapore to be invited to join in the future. There is also a vital need to economically expand the Quad.

     

     

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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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  • UN accuses China of Uighur rights abuses

    The UN accused China of serious human rights violations that may amount to “crimes against humanity” in a report examining a crackdown on Uighurs and other ethnic groups.

    What is the leak about?

    • After initially denying their existence, Beijing has claimed the facilities are vocational training schools, attended voluntarily and aimed at stamping out religious extremism.
    • But the leaked documents give an insight into how leaders saw the minority population as a security threat.
    • Photos appear to show officers restraining hooded and shackled inmates with batons, while other guards wearing camouflage stand by with firearms.

    Who are the Uighurs?

    • There are about 12 million Uighurs, mostly Muslim, living in north-western China in the region of Xinjiang, officially known as the Xinjiang Uyghur Autonomous Region (XUAR).
    • The Uighurs speak their own language, similar to Turkish, and see themselves as culturally and ethnically close to Central Asian nations.
    • They make up less than half of the Xinjiang population.
    • In recent decades, there’s been a mass migration of Han Chinese (China’s ethnic majority) to Xinjiang, and the Uighurs feel their culture and livelihoods are under threat.
    • In the early 20th Century, the Uighurs briefly declared independence, but the region was brought under complete control of mainland China’s new Communist government in 1949.

    Where is Xinjiang?

    • Xinjiang lies in the north-west of China and is the country’s biggest region.
    • Like Tibet, it is autonomous, meaning – in theory – it has some powers of self-governance. But in practice, both face major restrictions by the central government.
    • It is a mostly desert region, producing about a fifth of the world’s cotton.
    • It is also rich in oil and natural gas and because of its proximity to Central Asia and Europe is seen by Beijing as an important trade link.

    Try this PYQ:

     

    Q.Very recently, in which of the following countries have lakhs of people either suffered from severe famine/acute malnutrition or died due to starvation caused by war/ethnic conflicts?
    (a) Angola and Zambia
    (b) Morocco and Tunisia
    (c) Venezuela and Colombia
    (d) Yemen and South Sudan

     

    [wpdiscuz-feedback id=”kvyzebx1ip” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

    What was the build-up to the Uighur crackdown?

    • Anti-Han and separatist sentiment rose in Xinjiang from the 1990s, flaring into violence on occasion.
    • In 2009 some 200 people died in clashes in Xinjiang, which the Chinese blamed on Uighurs who want their own state.
    • Xinjiang is now covered by a pervasive network of surveillance, including police, checkpoints, and cameras that scan everything from number plates to individual faces.
    • According to Human Rights Watch, police are also using a mobile app to monitor peoples’ behaviour, such as how much electricity they are using and how often they use their front door.
    • Since 2017 when President Xi Jinping issued an order saying all religions in China should be Chinese in orientation, there have been further crackdowns.

    Chinese narrative

    • China says the crackdown is necessary to prevent terrorism and root out Islamist extremism and the camps are an effective tool for re-educating inmates in its fight against terrorism.
    • It insists that Uighur militants are waging a violent campaign for an independent state by plotting bombings, sabotage and civic unrest.
    • China has dismissed claims it is trying to reduce the Uighur population through mass sterilizations as “baseless”, and says allegations of forced labor are “completely fabricated”.

     

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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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  • Why has the Solomon Islands blocked foreign navy vessels?

    After refusing access to US and UK ships to its ports earlier this month, the Solomon Islands has now temporarily halted all naval visits.

    Why in news?

    • The country’s move is a departure from the norm and is been seen as an attempt to appease China.
    • This raises concerns about China’s growing influence in the country and the region at large.

    Where is the Solomon Islands located?

    • The Solomon Islands is a sovereign country consisting of six major islands and over 900 smaller islands in Oceania, to the east of Papua New Guinea and northwest of Vanuatu.
    • Its capital, Honiara, is located on the largest island, Guadalcanal.
    • It is part of the ethnically Melanesian group of islands in the Pacific and lies between Papua New Guinea and Vanuatu.
    • The country takes its name from the Solomon Islands archipelago, which is a collection of Melanesian islands that also includes the North Solomon Islands (a part of Papua New Guinea).
    • It excludes outlying islands, such as the Santa Cruz Islands and Rennell and Bellona.

    Quick recap of its past

    • The islands, which were initially controlled by the British Empire during the colonial era, went through the hands of Germany and Japan.
    • It then went back to the UK after the Americans took over the islands from the Japanese during World War II.
    • The islands became independent in 1978 to become a constitutional monarchy under the British Crown, with a parliamentary system of government.
    • Nevertheless, its inability to manage domestic ethnic conflicts led to close security relations with Australia, which is the traditional first responder to any crisis in the South Pacific.

    How did China enter the picture?

    • Earlier this year, the Solomon Islands established a security agreement with China, saying it needed Beijing’s assistance with its domestic security situation.
    • But the announcement had rattled the west, esp. the US, Australia and others in the Indo-Pacific region.
    • The concerns were that the agreement could potentially lead to a Chinese military base on the island nation and a gain in power-projection capabilities.
    • At that time, following intense scrutiny, the Solomon Islands had denied that the agreement would allow China to establish a naval base.
    • The Island insisted that the agreement was only to assist the Solomon Islands with what he called “hard internal threats”.

    What is the Solomon Islands’ stance?

    • The government has asked all partner countries with plans to conduct naval visits or patrols to put them on hold until a revised national mechanism is in place.
    • The revised national mechanism applied to all foreign vessels seeking access to the country’s ports.
    • The nation wanted to build up its own naval capacity.
    • It has some unfortunate experiences of foreign naval vessels entering its waters without any diplomatic clearance.

    What is behind China’s growing influence in the region?

    • There is no dispute that China has been rapidly increasing its presence and influence in the region for over three decades, particularly in the South Pacific.
    • Certainly Beijing views the Pacific Island region as an important component of its Belt and Road Initiative (BRI).
    • Specifically, it sees the region as a critical air freight hub in its so-called Air Silk Road, which connects Asia with Central and South America.

    Concerns of the West

    • The United States and its regional allies, such as Australia and New Zealand, are concerned that the China-Solomon Islands security pact allows Chinese naval vessels to replenish there.
    • That could open the door to a Chinese naval base, which would significantly extend China’s military reach in the South Pacific.”
    • It is likely that this security agreement between China and the Solomon Islands has been driven by, what the CFR calls, Beijing’s “sense of vulnerability” in the region.

    What is the rationale for the Solomon Islands’ increasing proximity to China?

    • The Solomon Islands had cultivated strong ties with Taiwan, which ended with the emergence of the current government in Honiara.
    • In 2019, the regime change switched Taiwan for China.
    • This was supposedly after Beijing offered half a billion US dollars in financial aid, roughly five times what Taiwan spent on the islands in the past two decades.
    • It has been alleged by the pro-Taiwan Opposition that the incumbent government has been bribed by China.

    Why is China interested in the Solomon Islands?

    • Isolating Taiwan: The Solomon Islands was one among the six Pacific island states which had official bilateral relations with Taiwan.
    • Supporter in UN: The small Pacific island states act as potential vote banks for mobilising support for the great powers in international fora like the United Nations.
    • Larger EEZ: These states have disproportionately large maritime Exclusive Economic Zones when compared to their small sizes.
    • Natural resources: Solomon Islands, in particular, have significant reserves of timber and mineral resources, along with fisheries.
    • Countering US: But more importantly, they are strategically located for China to insert itself between America’s military bases in the Pacific islands and Australia.

    What does this mean for the established geopolitical configuration in the region?

    • Diminishing western influence: The Pacific islands, in the post-World War II scenario, were exclusively under the spheres of influence of the Western powers, in particular, the US, UK, France and Australia and New Zealand.
    • Inserting into western hegemony: All of them have territorial possessions in the region, with the three nuclear powers among them having used the region as a nuclear weapons testing ground.
    • Shifting of dependencies: The smaller island nations of the region are heavily dependent on them, especially Australia as it is a resident power.

    Damage control by West

    • Australia has reacted with boosted finances, and by extending its current security mission till 2023 when the islands will host the Pacific Games.
    • The US has responded by considering reopening its embassy in Honiara after a long 29-year gap.
    • New Zealand has shed its typical restraint about China and has criticised it for attempting to militarise the Pacific islands.

     

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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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  • G20 presidency opportunities for India’s growth and prosperity

    G20 Context

    • India’s presidency of the G20 grouping next year arguably the sole remaining effective forum for global governance presents an enormous opportunity to accelerate sustainable growth within India, in the emerging world, and beyond.

    About G20

    • Formed in 1999, the G20 is an international forum of the governments and central bank governors from 20 major economies.

    Features

    • Collectively, the G20 economies account for around 85 percent of the Gross World Product (GWP), 80 percent of world trade.
    • To tackle the problems or the address issues that plague the world, the heads of governments of the G20 nations periodically participate in summits.
    • In addition to it, the group also hosts separate meetings of the finance ministers and foreign ministers.

    Objectives

    • Stability: The Group was formed with an aim of studying, reviewing, and promoting high-level discussion of policy issues pertaining to the promotion of international financial stability.
    • Fiscal responsibilities: The forum aims to pre-empt balance of payments problems and turmoil on financial markets by improved coordination of monetary, fiscal, and financial policies.
    • Universal Support: The forum seeks to address issues that go beyond the responsibilities of any one organisation.

    G20Is India ready for G20 leadership?

    • At some levels, India is ready.
    • Indian business and industry is becoming a noteworthy competitor globally.
    • The country’s domestic economy is starting to pick up, thanks to structural economic reforms.
    • The central government is economically stronger, and the states are starting to learn about economic independence, making them more aligned with their global counterparts.

    Punchline

    It is said that “those who hold the pen, write the rules”.

    The time has come for India to both hold the pen and write the rules for a more equitable global economics and governance.

    Issues and Challenges

    • India need to have a clear global financial agenda.
    • The country should also have the capacity to lead the G20 year intellectually, financially, managerially and administratively.
    • Geopolitically, India is more internationally engaged but less so geoeconomically.
    • Its narrow focus is on the World Bank, IMF, WTO and foreign investment issues.
    • But India has much to contribute on issues like reconfiguration of global financial regulations, design of a new framework for trade in services and the digital economy and establishing better cross-border standards for transparency in financial flows.
    • To make its G20 year a success, India has to address organisational challenges, where the country has an infrastructure, management and intellectual gap.

    G20What could India bring to the table?

    • Mediation: Firstly, it remains pertinent for the world that escalating tensions between Russia and Ukraine come to a halt. Maintaining its balanced stance, India needs to neutralise this situation by introducing peace talks between the two nations.
    • Open trade: It’s about time for India to raise its voice in support of a transparent New Economic Order and building a prosperous and just world. Unreasonable bans on certain commodities from various countries limits commerce between states when trade liberty exists.
    • Collaboration around science and technology: The global agenda has been tilted towards investment, whereas science and technology are the driving force for economic diversification, sustainably urbanising the world, and ushering the hydrogen economy and new crop varieties as the answer to both human well-being and global climate change.
    • Redefining digital access as universal service: Harnessing the potential of the digital-information-technology revolution requires redefining digital access as a “universal service” that goes beyond physical connectivity to sharing specific opportunities available.

    Conclusion

    • India’s presidency must leave the grouping with the agility and energy to respond to new realities, and it must create a future-ready multilateralism through a novel and robust institutional architecture.

    Mains question

    Q. It is said that “those who hold the pen, write the rules”. The time has come for India to both hold the pen and write the rules for a more equitable global economics and governance. Discuss in the context of India’s presidency of G20 summit with challenges and opportunities ahead.

     

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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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