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Subject: International Relations

  • Putting neighbours first

    Context

    India has promoted regional cooperation in South Asia in a spirit of generosity, without insisting on reciprocity.

    Relations with Sri Lanka

    • Beginning of new chapter in ties: The visit of Sri Lankan Prime Minister Mahinda Rajapaksa to India in February marked the beginning of a new chapter in ties with a friendly neighbour.
      • The neighbour with which India has close historical bonds straddling culture, religion, spirituality, art and language.
    • Growing convergence against terrorism: More relevantly, there is a growing convergence against terrorism following the Easter attacks in Sri Lanka last April.
    • There is deep appreciation in Sri Lanka for the free emergency services provided through 280 ambulances gifted by India, now operational in eight of the country’s nine provinces.
    • Prospects for tri-lateral cooperation: There are much better prospects today for tri-lateral cooperation between India, Japan and Sri Lanka in the development of the East Container Terminal at Colombo port and the proposed joint development of the Trincomalee oil storage tanks.
    • Indicators of a new warmth in relations:
      • Several infrastructure projects.
      • Direct flights between Chennai and Jaffna.
      • Resumption of ferry services.
      • India’s new lines of credit and construction of houses for the internally displaced.
      • Homeless and landless people are indicative of a new warmth in relations.
    • First visit to India: That both Mahinda Rajapaksa and his brother President Gotabaya chose India as the destination for their first overseas visits after assuming office bodes well.

    Relations with Maldives

    • First visit by PM Modi: After the general elections last year, PM Modi’s first foreign visit was to the Maldives in June 2019.
      • India first: The visit was to establish warm and friendly relations with President Ibrahim Solih, who has done much to promote closer relations with India through his “India First Policy”.
    • First visit to India: India was the first country that Solih had visited in December 2018, a far cry from his predecessor’s brazen anti-India slant.
      • Soon after assuming office, Solih’s government annulled a controversial 2015 law that was meant to allow foreigners, particularly from China, to arbitrarily own islands.
    • Projects worth 180 crores inaugurated: The inauguration during Modi’s visit of two projects worth Rs 180 crore-the Coastal Surveillance Radar System and the Composite Training Center of the Maldivian National Defence Forces-has deep significance for the success of India’s neighbourhood policy.
    • $800 million worth lines of credit: India’s offer of lines of credit worth about $800 million and other capacity-building projects for water supply and sewerage are strong planks in our economic ties.
    • Terrorism and radicalisation are subjects of common concern.
    • DOSTI exercise: The agreement to restart the tri-lateral DOSTI naval exercise as also the tri-lateral NSA-level dialogue between India, Maldives and Sri Lanka lay the ghost of the Yameen era to rest.

    Relations with Nepal

    • Inauguration of first cross-border petroleum pipeline: In September last year, India and Nepal jointly inaugurated South Asia’s first cross-border petroleum products pipeline from Motihari in India to Amlekhgunj in Nepal.
    • Prioritising the rebuilding of houses: India is also prioritising the rebuilding of houses in Gorkha and Nuwakot districts, with “Build Back Better” as the guiding principle in keeping with Modi’s clarion call for a Coalition for Disaster Resilient Infrastructure (CDRI).
    • Role played by geography: Geography plays a determining role in creating inter-dependence.
      • Even as Nepal, like other South Asian countries, seeks closer ties with China, there is a much better appreciation today that India’s role as a key economic and developmental partner is unique and indispensable.

    Relations with Bangladesh

    • Model partnership: India’s relations with Bangladesh under Modi and Sheikh Hasina have evolved into a model partnership, consolidated by-
      • High-level exchanges.
      • Mutual trust and-
      • Enhanced cooperation on security matters.
    • Border firing incidents: Incidents of border firing, though rare, have an adverse fall-out on public perception and need to be handled with sensitivity.

    Relations with Bhutan

    • The India-Bhutan friendship runs deep, with growing cooperation in the vital hydro-power sector providing it a fresh impetus.
      • Notably, the centrepiece Mangdechhu project (750 MW) was completed on schedule last year.
    • RuPay card in Bhutan: The introduction of the RuPay card in Bhutan and elsewhere in the neighbourhood will further cement economic and people-to-people ties.

    Relations with Myanmar

    • Security cooperation: When India shortly hands over to Myanmar the INS Sindhuvir, a Kilo Class submarine, it will propel security cooperation to a higher pedestal.
      • Cross-border strike in Myanmar: Close coordination with Myanmar was evident earlier in the cross-border strike on insurgents by Indian forces in 2015.

    Unrealised potential of South Asia

    • South Asia–some figures: has 1.8 billion people and a combined GDP of nearly $3.47 trillion, with India’s economy the largest by far.
    • South Asia has great potential but has been held back by Pakistan.
      • Hindrance for cooperation with Afghanistan: Pakistan has not only denied India and Afghanistan the overland transit route for trade, but has also thwarted Modi’s efforts to place at centre stage the common struggle against poverty, illiteracy and natural disasters.

    Cooperation within SAARC: Pakistan has held to ransom cooperation within SAARC by raising extraneous matters, perpetuating terrorism and rejecting the ineluctable logic of intra-South Asian trade, which remains abysmally poor.

    • Pakistan opt-out of satellite project: Islamabad decided to opt-out of the SAARC satellite project proposed by India, and it was finally launched in 2017 without Pakistan’s participation.
    • Motor Vehicle Agreement: Pakistan also played the role of a spoiler at the 18th SAARC Summit in November 2014, preventing progress on the proposed Motor Vehicle Agreement for the regulation of passenger and cargo vehicular traffic amongst SAARC member states.
    • Implications for Afghanistan: Pakistan’s intransigence on connectivity impairs Afghanistan’s ability to link up with other countries in South Asia.
      • The air corridor between India and Afghanistan cannot cater to the full potential of trade ties.
      • Sustainability of Chabahar port: Recent tensions between the US and Iran have cast a shadow on the sustainability of Chabahar port as an alternative maritime supply route to Afghanistan at a crucial juncture in its history.
      • India’s role in Afghanistan: India’s proactive role in recent years in building much-needed infrastructure and capacities in Afghanistan is widely recognised.
      • Deepened defence cooperation: Defence cooperation too has deepened under Modi, with India dropping its traditional coyness in such matters.
      • Much more may have to be done, though, to help Afghanistan achieve stability through economic prosperity.
      • Afghanistan’s true destiny lies with South Asia.

    Key aspects of Neighbourhood First Policy

    • Response to security challenges: Neighbourhood First involves India’s willingness to respond to security challenges with new grit.
    • Humanitarian assistance: It also involves for India to be an enthusiastic responder in providing humanitarian assistance and conducting disaster relief operations in Nepal, Sri Lanka, the Maldives and the extended neighbourhood.
    • Developmental assistance: Even more important is the steady progress made by India to expand developmental assistance and improve project execution based on collaborative partnerships.
      • India’s developmental assistance to six South Asian countries was over Rs 21,100 crore. 

    Progress on BIMSTEC

    • BIMSTEC, the other regional grouping, has done well.
    • Participation in disaster Management Exercise: In February this year, delegates and rescue teams from India, Bangladesh, Nepal, Sri Lanka and Myanmar enthusiastically participated in disaster management exercises conducted at Ramachandi Beach at Puri in Odisha.
    • Cross-border electricity grid: The signing of the MoU on BIMSTEC Grid Interconnection at the fourth BIMSTEC Summit, attended by all seven nations in Kathmandu in August 2018, provides a fillip to cross-border electricity trade.
    • India’s focus on BIMSTEC and its Act East Policy have served to highlight India’s key role in promoting cooperative growth and development in several parts of South Asia.

    Conclusion

    In a world increasingly characterised by a “my country first” approach, India has endeavoured to harness the impulse for regional cooperation in a spirit of generosity, without insisting on reciprocity, to realise the motto of Security And Growth For All In The Region (SAGAR).

     

     

     

  • Explained: The EU data strategy

    The European Commission has recently released a “European strategy for data… to ensure the human-centric development of Artificial Intelligence” and a white paper on artificial intelligence.

    EU data strategy

    • The new documents present a timeline for various projects, legislative frameworks, and initiatives by the European Union, and represent its recognition that it is slipping behind American and Chinese innovation.
    • The strategy lays out “why the EU should act now”.
    • The blueprint hopes to strengthen Europe’s local technology market by creating a “data single market” by 2030 to allow the free flow of data within the EU.
    • To aid a “data-agile economy”, the Commission hopes to implement an “enabling legislative framework for the governance of common European data spaces” by the latter half of the year.
    • By the beginning of 2021, the Commission will make high-value public sector data available free through Application Programming Interfaces (APIs) — a pathway for two different applications to speak to each other.
    • Between 2021 and 2027, the Commission will invest in a High Impact Project to jump-start data infrastructure. Several other initiatives are laid out, including a cloud services marketplace.

    Why such strategy?

    • The EU has the potential to be successful in the data-agile economy. It has the technology, the know-how and a highly skilled workforce.
    • However, competitors such as China and the US are already innovating quickly and projecting their concepts of data access and use across the globe, the strategy states.
    • With American and Chinese companies taking the lead on technological innovation, Europe is keen to up its own competitiveness.

    What does the EU move mean for legislation?

    • Europe has been a frontrunner when it comes to technology regulation.
    • Its General Data Protection Regulation (GDPR) released in 2018 was a game-changer across the industry. In the recent strategy, the GDPR is seen as giving the “solid framework for digital trust.”
    • Parliamentarians are discussing India’s current Personal Data Protection (PDP) Bill in a Joint Select Committee.
    • The recent draft of the PDP introduced a clause on non-personal data, mandating entities to hand over such data to the government on command.
    • This was not included in the draft proposed by the Justice B N Sri Krishna Committee in October 2018.
    • Some of the movement around the PDP Bill comes from a desire to strengthen India’s own data economy, similar to the EU’s desire.

    Has India done anything similar?

    • The Union Cabinet approved the National Data Sharing and Accessibility Policy (NDSAP) in 2012.
    • As part of the initiative, the government worked with the US government to release data.gov.in, a site of government data for public use.
    • The Economic Survey of 2018 envisioned a similar use of non-personal data.
    • Just as the EU’s strategy discusses “data for public good”, the chapter titled “Data ‘Of the People, By the People, For the People’” advocated that the government step in to sectors that private players ignore, marking the first time India’s Economic Survey has isolated “data” as a strategic focus.
    • Other data integration efforts have been announced or implemented by NITI Aayog (the National Data & Analytics Platform), the Smart Cities Mission (India Urban Data Exchange), and the Ministry of Rural Development (DISHA dashboard).
    • In 2018, the National Informatics Centre worked with PwC and other vendors to create a Centre of Excellence for Data Analytics aimed at providing data analysis help to government departments.

  • The missing piece in India’s defence jigsaw puzzle

    Context

    The country needs a clearly articulated white paper on its defence needs which sets out its strategic concerns.

    India’s defence deals in the pipeline

    • The first lot of Rafale fighter jets are expected shortly.
    • The final deal on the 200 Kamov Ka-226 light utility helicopters from Russia is in advanced stages and expected to be signed soon.
    • In October 2018, India and Russia had signed a $5.4-billion mega-deal for the S-400 Triumf Air Defence System.
    • Under contemplation today are yet another set of high-value U.S. defence deals, including additional purchases of P-8I Maritime Reconnaissance Aircraft and Apache Attack Helicopters.
    • NASAMS-II: Speculation is rife that India and the U.S. would sign a deal for the National Advanced Surface to Air Missile System (NASAMS-II).
      • Which is intended as part of a multi-layered missile shield to protect Delhi.
    • The U.S. side is also hoping for two more mega defence deals, worth $3.5-billion to be signed for 24 MH-60 Romeo Multi-Mission Helicopters for the Navy and an additional six AH-64E Apache Attack Helicopters for the Army.

    Need for the white paper

    • Given India’s rising global profile, and with two major adversaries on its borders, India needs to be fully prepared.
    • A missing piece: What is lacking in the defence jigsaw puzzle is a well-considered and clearly articulated white paper on India’s defence needs.
      • The white paper would deal with?
      • It sets out its strategic concerns.
      • How it is positioning itself to meet these challenges.
      • The putative costs of meeting the country’s defence needs.
    • Explain the Pakistan threat: In the case of Pakistan, the threat motif is, no doubt, obvious.
    • India’s political and defence establishment are on record that India can easily defeat Pakistan, even if a “weaker” Pakistan possesses “nuclear teeth”.
      • What is needed? A great deal of effort is called for to-
      • Explain to the public, the true nature of the threat posed by Pakistan.
      • And why India is so confident of beating back the Pakistani challenge.
    • Explaining the China threat: Meeting the military, strategic and economic challenge from China is an entirely different matter.
      • Understanding the nature of the threat: China is not Pakistan.
      • While China and Pakistan may have established an axis to keep India in check, explaining the nature of the threat posed by China to India is a complex task that needs to be undertaken with care and caution.

    The China threat

    • Is China an existential threat for India?: There are many experts who express doubts as to whether China intends today to pursue its 19th Century agenda, or revert to its belief in ‘Tian Xia’.
      • Undoubtedly China aims to be a great power and an assertive one at that.
      • India’s defence planners should, however, carefully assess whether there are degrees of “assertiveness” in China’s behavioural patterns.
      • There is little doubt that regarding its claim to areas falling within the ‘nine-dash lines’ (the first island chain), China is unwilling to make compromises.
      • Whether this applies to other regions of Asia and the Indo-Pacific, calls for an in-depth study.
    • The analysis is needed: It would be premature for India without undertaking such an analysis, to adhere to a common perception that China is intent on enforcing a Sino-centric world order in which India and other countries would necessarily have to play a secondary role.
    • What after analysis? If after undertaking such an “analysis”, it appears that China does not pose a direct threat to India’s existence, strategic and military planners need to come up with a different set of alternatives.
    • Western influence over thinking about China: In recent years, much of India’s strategic thinking regarding China’s aggressive behaviour has been coloured by that of the U.S. and the West.
      • Though it is a proven fact that China has not used lethal military force abroad since the 1980s.
    • Concerns over BRI: China’s Belt and Road Initiative (BRI) does convey an impression that China seeks to put itself at the centre of the world.
      • The speed with which many of the steps to progress the BRI are being taken again conveys an impression that China is intent on shrinking the physical and psychological distance between Europe and East Asia.
      • No intention of confrontation: This does not, however, necessarily mean that China is preparing to confront individual countries in Asia, such as India, which do not subscribe to the BRI.

    What would the white paper explain?

    • Answer to whether China is a threat to India? A defence white paper would provide a more definitive answer to such issues.
      • A detailed exercise to assess whether China is indeed a threat, rather than a challenge, to India should prove invaluable.
      • It is possible that a detailed study may indicate that China understands that there are limits to its strength and capabilities.
    • China’s weaknesses: Several instances of late have shown the frailties in China’s policies –Hong Kong, Taiwan, and even Xinjiang are instances that indicate that China has its own Achilles heel.
      • Consequently, China may not be ready, for quite some time at least, to seek a direct confrontation with India.
    • Conflict or furthering the influence? A defence white paper may also indicate that rather than a “conflict-prone” role, China is more intent on an “influence-peddling” one.
      • This is important from India’s point of view.
      • Converting economic heft into strategic influence: Already there is one school of thought that believes that Beijing is better at converting its economic heft into strategic influence, rather than employing force beyond certain prescribed areas.
    • Coming to understanding over the respective sphere of influence: If the above view is espoused by a defence white paper then, despite the vexed border dispute between India and China, the two countries could try and arrive at a subliminal understanding about respective spheres of influence.
      • What is India’s major concern? Today, one of India’s major concerns is that China is attempting to intrude into its sphere of influence in South Asia, and the first and second concentric circles of India’s interest areas, such as Afghanistan and parts of West Asia.
      • The peaceful co-existence: The defence white paper might well provide a strategic paradigm, in which India and China agree to peacefully co-exist in many areas, leaving aside conflict zones of critical importance to either, thus ensuring a more durable peace between them.
    • Is geo-economics is the primary arena of competition: One other outcome that the defence white paper could attempt is: whether China views geo-economics as the primary arena of competition today.
      • Avenue for cooperation: China has invested heavily in artificial intelligence, robotics and biotechnology, and perhaps, India needs to recognise that rather than blacklisting Chinese technology Tech firms, (which could prove counter-productive) there exist avenues for cooperation, paving the way for better state-to-state relations.

    Conclusion

    The defence white paper needs to underscore that a country’s domestic politics are an important pointer to a stable foreign policy. There could be different schools of thoughts within a nation, but equilibrium needs to be maintained if it is not to adversely impact a nation’s foreign policy imperatives. An impression that the country is facing internal strains could encourage an adversary, to exploit our weaknesses. This is a critical point that the defence white paper needs to lay stress on.

  • Why trade with the US matters to India?

     

    Context

    • US President Trump arrives in India months after he went on stage with PM Modi at the ‘Howdy Modi’ event in Texas.
    • Both countries have repeatedly resolved to strengthen trade ties — however, attempts at working out a short-term agreement have fallen apart in the past, and tensions have risen over tariffs.
    • The US often accuses India of taking decisions over the previous few years that prevented “equitable and reasonable access” for Americans to its markets.
    • Let’s have a look at the current state of play:

    Why trade with the US matters to India?

    • India’s existing and stalled bilateral free trade agreements (FTAs) started to receive attention from the government last year, even as the country worked to conclude the seven-year negotiations to join the RCEP, the world’s “largest” regional trade pact.
    • But by backing out of the RCEP in November, India shut the door on the large “integrated market” that the deal was offering.
    • Instead, it increased the pressure on itself to strengthen existing separate trade agreements with each member of the RCEP bloc.
    • Without these, it may not be able to tap a sizeable portion of the global market; also, it may not be able to easily access the products and services of these countries.

    Need for more bilateral activities

    • In the backdrop of the global economic slowdown, where India’s global exports have fallen consistently, it is important for the country to diversify and strengthen bilateral relations with other markets.
    • It has set its sights on “large developed markets”, improved access to which would help its industry and services sectors.
    • These include the US, which has, over the last two decades, become a crucial trading partner in terms of both goods and services.

    Trump’s advent

    • In March 2017, soon after taking office with election campaign focussing on “making America great again”, Trump ordered “first-ever comprehensive review” of trade deficits of the United States.
    • India was among the countries that exported more to the United States than it imported, and the latter was left with a trade deficit of over $21 billion in 2017-18.
    • While the US’s deficit with India is only a fraction of its deficit with China (over $340 billion in 2019), American officials have repeatedly targeted the “unfair” trade practices followed by India.
    • These include the tariffs that India imposes, which the Trump administration feels are too high — and over which the President has personally called New Delhi out on several occasions.

    Locating the main sticking points

    • Negotiations on an India-US trade deal have been ongoing since 2018, but have been slowed by “fundamental” disagreements over tariffs subsidies, intellectual property, data protection, and access for agricultural and dairy produce.
    • The office of the US Trade Representative (USTR) has underlined India’s measures to restrict companies from sending personal data of its citizens outside the country as a “key” barrier to digital trade.
    • The US wants India to strengthen patent regulations, and to ease the limitations American companies investing in India face.

    India’s tariffs

    • India is a “tariff king” that imposes “tremendously high” import duties, Trump has complained repeatedly.
    • The health cess on imported medical devices announced in the Budget for 2020-21 too, is seen as a negative for the American side, as the US is among the top three exporters of these categories of products to India.
    • However, India is working to finalise a proposal to move from caps on prices of medical devices to limiting the margins of those involved in the supply of the products.

    Agri sector

    • The US has long demanded greater access for American agriculture and dairy products.
    • For India, protecting its domestic agriculture and dairy interests was a major reason to walk out of the RCEP agreement.

    US retaliation

    1) Tariff on steel

    • In 2018, the US imposed additional tariffs of 25% on steel and 10% on aluminum imports from various countries, including India.
    • While India’s government claims the impact is “limited”, they brought down the US share in India’s steel exports to 2.5% in 2018-19 from 3.3% in 2017-18.
    • In March 2018, India challenged the US decision at the World Trade Organization (WTO).
    • India held off on imposing retaliatory tariffs until the US struck again — by removing it from a scheme of preferential access to the American market.

    2) GSP axe and response 

    • In June 2019, the US decided to terminate India’s benefits under the Generalized System of Preferences (GSP) scheme, which provides preferential, duty-free access for over $6 billion worth of products exported from this country to the US.
    • The decision followed a warning earlier that year, after negotiations on a potential trade agreement had broken down.

    3) Labelling India as developed country

    • India was the largest beneficiary of the US GSP programme.
    • While duty-free benefits accrued to only around $200 million for the billions of dollars worth of exports, India is understood to have asked for restoration of these benefits in the ongoing trade negotiations.
    • Most recently, the USTR classified India as a “developed” country based on certain metrics. It is not clear whether the upgrade from “developing” will impact the restoration of benefits under the GSP scheme.

    The WTO tussle

    • India is one of the largest importers of almonds from the US, having imported fresh or dried shelled almonds worth $615.12 million in 2018-19.
    • Imports from the US of fresh apples stood at $145.20 million, of phosphoric acid at $155.48 million, and of diagnostic reagents at nearly $145 million that year.
    • Removal from the GSP list amidst rising trade tensions prompted India to finally impose retaliatory tariffs on several American imports, including almonds, fresh apples, and phosphoric acid.
    • This was a significant move — and the US approached the WTO against India.

    Whats’ next?

    • US administration appeared to suggest that while no deal was imminent, work on a longer-term agreement was progressing well, and that his personal chemistry with Prime Minister Narendra Modi might help.
    • India and the US could begin with some “low-hanging fruit” to indicate their willingness for a deeper economic commitment.
    • This includes the US reinstating India’s benefits under the GSP programme, and India doing away with duties on motorcycles.

  • When Yankee goes home

    Context

    Delhi needs to unlearn some of the assumptions about US policy as it prepares to host Trump next week. While the diaspora is important and could be of some value in dealing with Trump, it can’t override the deeper forces animating American politics.

    Changing America under Trump

    • Restriction on immigration: Trump’s America wants the Americans to come home but is shutting the door on unrestricted immigration from the rest of the world.
      • Domestic critics say America has been a nation of immigrants and Trump is wrong to keep them out.
      • Why the restriction on immigrants? But Trump has much support among the working people who know-
      • Immigration keeps wages low.
      • Helps the capitalist class and-
      • Disrupts the familiar cultural and social landscape.
    • Some want America out
      • Some chancelleries in the world demand that America must go home.
      • The president of the Philippines wants to end Manila’s century-old relationship with the US military.
      • Iran wants America out of the Gulf.
      • Russia and China would like to see the US forces out of Europe and Asia respectively.
      • The world is paying serious attention to the possibility of Yankee going home.

    Downsizing of the US role and how the world is responding?

    • Downsizing
      • In the Gulf, Trump wants the Asian powers to police the vital sea lines of communication.
    • In Europe and Asia, he wants the allies to do more for their own security.
    • How the world is responding?
      • Europe’s response In Europe, France and Germany are now talking about creating new defence capabilities for the European Union amidst the prospect for American security retrenchment.
      • How the Asian countries are responding? In Asia, Japan is debating a larger security role.
      • In the Gulf, America’s Arab allies are scrambling to diversify their security dependence.

    America First policy

    • What is America First policy? The idea of downsizing America’s role, along with the rejection of free trade and open borders, is at the very heart of Trump’s America First policy.
    • Resistance to the policy: To be sure there is deep resistance in the US to these ideas that run counter to America’s post-war internationalism.
      • Wall Street on the East Coast and Silicon Valley on the West Coast along with the old foreign and security policy establishment in Washington all oppose Trump’s America First focus.
    • Widespread support to the policy: Trump’s message, however, resonates across the political divide in the US.
      • Many candidates for the presidential nomination of the Democratic Party agree with Trump’s goal of ending America’s “endless wars” in the Middle East.
      • Many in the working classes, who traditionally supported the Democrats, believe Trump is right in arguing that free trade has hollowed out American industry and eliminated manufacturing jobs.

    How the changes matter for India?

    • Prepare for the changes: America is at an inflection point; India needs to come to terms with the profound changes unfolding in the US.
    • No intervention policy: The Indian political classes castigated the US for excessive interventions in the affairs of other nations.
      • Trump now says such interventions are counterproductive and all nations must strengthen their sovereignty.
    • Critical of globalisation: Indians criticised the US for imposing globalisation on others; the US President is now one of the biggest critics of globalisation.
      • Trump’s America is not the one we have known.
    • India’s sensitivity to the US domestic politics: As India broadened its engagement with America in the last two decades, Delhi has become more sensitive to the US domestic political dynamics.
      • In getting the US to ease off on Kashmir and nuclear issues, Delhi had to look beyond the foreign policy establishment to generate better US appreciation of India’s concerns and interests.
    • Indian diaspora: One of the instruments that came in handy was the mobilisation of the Indian diaspora, it emerged as a key factor in elevating the bilateral relationship in the 21st century.
      • While the diaspora is important and could be of some value in dealing with Trump, it can’t override the deeper forces animating American politics.

    Conclusion

    Delhi’s success with the US will depend on the kind of strategic imagination it can display on trade cooperation, securing Afghanistan after America’s withdrawal, stabilising the Gulf and developing a new global compact on migration that is sensitive to domestic political considerations and yet contributes to the collective economic development.

     

     

     

     

  • Hype Trumps Hope

    Context

    US president’s visit comes when a mutually beneficial framework of bilateral relationship stands disrupted.

    Significance previous U.S. President’s visits

    • The Clinton visit:  The Clinton visit occurred against the backdrop of a new assessment within the American strategic community of India’s potential role in the post-Cold War era and against the backdrop of the rise of China.
      • Recognition of India’s nuclear power: He implicitly recognising India’s nuclear power status.
      • Kashmir issue: He suggested that the line of control (LoC) between India and Pakistan should be viewed as the international border so as to bury the “Kashmir issue” forever and-
      • Visas for Indians: increasing entry visas for Indians that has since contributed to the emergence of a sizeable community of Indian Americans.
      • As a counter to China: It was suggested that the rise of democratic India would be in the interests of the US and so the latter ought to be supportive of the former.
    • The Bush visit:
      • Political context: The rise of China and of radical Islam and jihadi terrorism provided the geopolitical context.
      • Economic context: The growth of an increasingly open Indian economy provided the economic context.
      • Cooperation in civil nuclear energy: Influenced by this new thinking, President George Bush took the next steps in strategic partnership and led the initiative to promote cooperation in the field of civil nuclear energy that also explicitly recognised India as a nuclear weapons power.
      • As heads of state, Clinton and Bush altered US-India bilateral relations in a fundamental way.
    • The Obama visit:
      • P2P relation: His second visit was more a recognition of the growing importance of people-to-people (P2P) relations and
      • Defence sales to India: The visit also aimed at promoting defence sales to India.
      • During the nuclear deal negotiations, US Congresspersons would often suggest that it was a “123 for 126” deal — that is, they would vote in favour of the 123 agreement in Congress in the hope that India would buy 126 fighter jets from the US.
      • That hope remains as yet unfulfilled, with the French getting the Rafale deal and no decision taken on the purchase of US fighter jets.

    America First policy of Trump

    • The credit for laying the foundation for a new and supportive post-Cold War relationship between the US and India goes singularly to President Bush.
    • Disruption with the arrival of Trump: The mutually beneficial framework that Bush helped create to promote the bilateral relationship has been rudely disrupted by the arrival of Donald Trump in Washington DC.
      • End of GSP: Trump’s “America First” policy offers no space for offering India “special and differential” treatment on any front, least of all trade.
      • Status of the Indian economy from the US perspective: With per capita annual national income of US $60,000, Trump’s America has no qualms declaring India, with a per capita annual average national income of US $2,000 a “developed economy” not deserving of any leniency in trade policy.
      • Clubbing together with China: To club China, a $15-trillion economy, with a $3-trillion India on the trade front is not just stupid but an affront to Indian sensibilities.

    What are the hopes and what could be the outcomes of the visit?

    • No bi-partisan support to India’s rise: It has to be recognised that neither Democratic liberals nor Republican conservatives are any longer willing to be supportive of the Bush-Rice paradigm that views India’s rise in benign and mutually beneficial terms.
      • Inward-orientation in both the countries: Today the relationship seems caught in the pincers between the inward-orientation of rightwing nationalists in both nations.
      • No hope of change: There is no reason as yet to believe that this unfortunate state of affairs will be altered by the Trump visit next week.
    • Stand on Pakistan or Kashmir: Trump has also moved away from the Clinton-Bush framework on India-Pakistan relations and moved closer to approach of wanting to insert the US into the equation on Kashmir.
      • Appeasement of Pakistan: Trump’s motives are no different from those that initially drove Obama-namely, to appease Pakistan in the hope of securing a peaceful exit from Afghanistan.
      • Expect differences to persist: At best, India can hope to limit the damage Trump may do to strategic stability in the region.
    • Visa and investment: There will be much talk about US investments in India and increased visas for Indians going to the US.
      • Corporate interests: Both are driven largely by US corporate interests.
      • Given the direction of the Modi government’s trade policy, one cannot expect any dramatic concessions being made.
      • Defence purchases: The best India can do for the US is to buy more defence equipment and ease up on some trade restrictions.
      • Defence sales to India are an essentially commercial activity and much of it can go on even in the absence of strategic convergence and shared geopolitical perspectives.
    • Brain-drain and need to focus on education: Much is made of Indian Americans heading US multinationals and the Great Indian Diaspora in the US.
      • Outmigration of talent: The continued neglect of education in India is increasing the outmigration of talent, offering the US a reservoir of talent.
      • Drain on national resources: While the Indian elite celebrates this out-migration, the fact is that it is a drain on national resources.

    Conclusion

    In sum,  with the supportive Bush-Rice doctrine defining the post-Cold War US-India partnership virtually abandoned, and the new Trump doctrine treating India as a “developed” economy, demanding parity on trade, bilateral relations have become uncertain and testy. To hide the lack of substance in the relationship the Trump visit will focus on the hype and Prime Minister Modi has perfected the art of diplomacy as mass entertainment.

     

     

  • Bangladesh fares better

    Content

    In the last decade, on a range of social development indicators, Bangladesh has fared better than India. So it is highly unlikely that Bangladeshis would want to leave their cherished homeland for India.

    Comparison with Bangladesh on the development indicators

    • Growth rate: This year Bangladesh’s economic growth rate has surpassed India.
    • Social development indicators: In the last decade, on a range of social development indicators, from infant mortality to immunisation, Bangladesh has fared better.
    • India lagging behind the neighbours in quality of life: Undoubtedly, since economic liberalisation, Indians have grown much richer than Bangladeshis, but in terms of quality of life our neighbour largely outshines us.
      • India trails across several (not all) composite indices from the latest Global Hunger Index to the Gender Development Index.
      • Even on the 2019 World Happiness Index, Bangladeshis score better.
      • While, technically, on the Human Development Index, Bangladesh scores marginally less, this is largely because the index merges income and non-income parameters.

    How India’s neighbour forged ahead in social development?

    • Dissolving the inequality and bridging the social and gender distances: In the case of Bangladesh, the most prominent factor has been-
      • Removing inequality: The country’s ability to dissolve inequalities through sustained investment in public services and-
      • Bridging the social distance: The bridging of social and gender distances.
    • Development in Healthcare: Till the Eighties, Indians lived longer than most South Asians.
      • But now, despite being poorer, an average Bangladeshi female child at birth can expect to live for four years more.
      • Fewer Bangladeshi children also die before their fifth birthday.
      • Community clinics: The formula for this success has been relatively simple. Since 2009, the government has constructed well-stocked “community clinics” in every third village.
      • Home delivery of medicines: For four decades, committed cadres of government health workers have delivered medicines and family planning to women in the comfort of their homes.
    • Achievement in Education: On the education front, even though India has a demographic dividend, Bangladesh has achieved a marginal advantage in youth literacy.
      • Further, across income quintiles, Bangladeshi girls have higher educational attainments than boys.
      • Free textbooks: The government provides free textbooks in the government, non-government (NGO) and madrassa-run schools promptly at the start of the academic year, without the chronic delays which plague India.
      • The greater proportion of expenditure on educations: Economist Jean Drèze has aptly described India as amongst the world champions in social underspending. In contrast, Bangladesh despite being a poorer neighbour since the Nineties has spent a greater proportion of government expenditure on education and healthcare.
      • The fruits of these sustained investments have reaped rich dividends.
    • Nutrition: On the nutrition front too, Bangladesh fares better.
      • Thirty-three per cent of Bangladeshi children are underweight compared to India’s 36 per cent as per the demographic health surveys.
      • Similarly, a greater proportion of Indian children are also stunted.
      • Further, the inequality between wealth quintiles is starker in India.
      • A few years ago, the Bangladeshi government, with the help of NGOs, hired a unique cadre of “Pushti Apas” (nutrition sisters) who went door-to-door in their social endeavours.
      • Unlike the Indian Poshan Abhiyan’s focus on vegetarian foods, they did not shy away from teaching mothers to feed growing infants a balanced diet with mashed fish, meat and eggs.
    • Sanitation: Even at the turn of the millennium, at least 80 per cent of Bangladeshi homes had toilets, even if rudimentary.
      • By 2016, 96 per cent of households and 80 per cent of schools in had proper sanitation.
      • Apart from the typical Islamic emphasis on hygiene, local governments not only provide cement rings for free to poor families but they also regularly spread messages through community group discussions, mosques, mass media and schools.
      • Local entrepreneurs have also ensured that with the innovation of plastic pans, the cheapest toilets cost less than Chinese mobile phones.
    • Women empowerment: Bangladeshi women are also increasingly assertive.
      • The 2006 World Bank Survey on Gender Norms found a growing trend of “educational hypogamy”.
      • In sharp contrast to India’s decline, Bangladeshi women also have higher labour force participation.

    Contrast

    • In comparison, India is grappling with the worst unemployment levels in 45 years and sinking economic growth rates. Government ministers should pull up their own socks, instead. Berating our neighbours with the false bogey of illegal immigrants, in light of the Citizenship Amendment Act, is nothing but an unjustifiable distraction. Instead, it would be far wiser for the Indian government to humbly learn the recipe of South Asian success to improve the lives of citizens from the impressive “Shonar Bangla”.

  • USTR takes India off developing country list

     

    The Office of the United States Trade Representative (USTR) has published a notice, amending lists of developing and least-developed countries that are eligible for preferential treatment with respect to countervailing duties (CVD) investigations.

    New classification by US

    • To harmonise U.S. law with the World Trade Organization’s (WTO) Subsidies and Countervailing Measures (SCM) Agreement, the USTR had, in 1998, come up with lists of countries classified as per their level of development.
    • These lists were used to determine whether they were potentially subject to U.S. countervailing duties. The 1998 rule is now “obsolete” as per the USTR notice.
    • Countries not given special consideration have lower levels of protection against a CVD investigation.
    • A CVD investigation must be terminated if the offending subsidy is de minimis (too small to warrant concern) or if import volumes are negligible.
    • The de minimis thresholds and import volume allowance are more relaxed for developing and least-developed countries.

    Criteria set by US

    • The USTR used the following criteria to determine whether a country was eligible for the 2% de minimise standard:

    (1) Per capita Gross National Income or GNI

    (2) share of world trade

    (3) other factors such as Organisation for Economic Co-operation and Development (OECD) membership or application for membership, EU membership, and Group of Twenty (G20) membership.

    Delisting India

    • India was, until February 10, on the developing country list and therefore eligible for these more relaxed standards. It has now been taken off of that list.
    • India, along with Brazil, Indonesia, Malaysia, Thailand and Vietnam were taken off the list since they each have at least a 0.5% share of the global trade, despite having less than $12, 375 GNI (the World Bank threshold separating high-income countries from others).
    • India was taken off the list also because — like Argentina, Brazil, Indonesia and South Africa — it is part of the G20.
    • Given the global economic significance of the G20, and the collective economic weight of its membership (which accounts for large shares of global economic output and trade), G20 membership indicates that a country is developed a/c to USTR.

  • The battle in Beijing

    Context

    The coronavirus epidemic poses a challenge to China’s place in global affairs, its political leadership.

    The possible implications of coronavirus crisis

    • The Chines leadership might not be able to escape the blame: If the epidemic turns into a pandemic, as some analysts bet, China’s all-powerful leader Xi Jinping might not be able to escape the blame.
      • And will likely come under considerable political pressure.
    • It could also turn into a systemic threat: Some also speculate that the backlash against the government’s mishandling of the crisis could turn into a systemic threat against the dominance of the Chinese Communist Party.
    • Speculations as perennial hope among China’s critics: Sceptics, however, dismiss above speculation as merely reflecting the perennial hope among Beijing’s harshest critics who can’t wait to see a China without the CCP.
      • Realist’s stand: Realists point to the massive mobilisation of state power by President Xi in limiting the spread of the virus.

    Handling of the crisis by China

    • Initial faltering response: To be sure, there were major failures in the initial faltering response to the crisis.
      • Cover-up attempts from the lower level: The attempts at the lower levels to cover-up or underplays the crisis and the inadequate appreciation at the higher levels of the potential consequences are common to all large bureaucracies. The party-state in China is not an exception.
    • Praise for handling the crisis: China’s handling of the crisis had drawn much respect, grudging or otherwise, from the international community.
      • Whether it is the lockdown of Hubei province and its capital Wuhan, from where the virus began to spread.
      • Or in deploying thousands of doctors and health workers in the province and building massive hospitals for treating the infected.
    • Possibility of some political impact: Yet, there is no question that a crisis of this magnitude -will have some political impact.
      • The party-state is certainly having some difficulty in containing the public outrage against the initial failures.
    • Efforts to shield top leadership from blame: The CCP, however, is bound to shield the supreme leader from any damaging criticism and in fact, celebrate a triumph in containing the spread through a determined effort.
      • Responsibility will be affixed on provincial officials in Hubei and a purge of some kind may have already begun.

    Addressing the economic consequences of the crisis

    • International dimension: Nearly two decades after the SARS epidemic -China is now a much larger economy and its interdependence with the world has only deepened.
      • This interdependence, in turn, lends a strong international dimension to China’s crisis.
    • Optimist’s hope of future uptick: Optimists hope that a sharp drop in economic activity in the current quarter will be followed by a steep uptick in growth in the next when the virus is contained and normalcy returns.
    • Pessimist’s fear of economic disruption: Pessimists suggest that the economic disruption — in terms of the impact on internal and external trade and the breakdown of the global supply chains- could have lasting effects.
      • Reinforcing the disruption: Some suspect that the disruption could reinforce the slowdown driven by a number of other internal and external factors including the trade war with the US.

    China’s response to the rest of the world

    • Channelling of resentment against the West: Some in the West hope that a prolonged economic crisis might turn the people against the CCP. For now, though, Beijing is channelling the resentment against the West.
    • Terming evacuation as an over-reaction: Beijing has criticised the advisories from various countries against travel to China and the cancellation of flights as over-reaction.
      • Lukewarm response to evacuation efforts: China has also been lukewarm to efforts of various countries to evacuate their citizens from Wuhan and Hubei.
      • India evacuated students: India has managed to convince Beijing to let India airlift its students from Wuhan.
      • Pakistan has declared that it will not evacuate its students as a gesture of political solidarity with China in a time of crisis.
      • South Asian neighbour’s response: Many of India’s other South Asian neighbours are torn between the reluctance to offend Chinese sentiment and the mounting domestic pressures to bring students back.
      • Cooperation with the US: While being critical of the US travel restrictions against China, Beijing has certainly been open to cooperation with the US in dealing with the crisis.
    • India’s offer to help other countries in evacuation: The external affairs minister Subrahmanyam Jaishankar said last week that India has been willing to bring back students from all the neighbouring countries.
      • Balancing between Delhi and Beijing: The logic of balancing between Delhi and Beijing has prevented most of the smaller neighbours from requesting Indian assistance.
      • The Maldives has been the only exception.
    • The response of the East and Southeast Asia: Beyond South Asia, many countries in East and Southeast Asia have been hesitant to be seen as rushing to cut themselves from China.
      • What is making these countries hesitant: Deep economic interdependence and massive flows of Chinese tourists led to much dithering among the East Asian countries in their early responses to the crisis.

    Conclusion

    India must explore all potential cooperative engagement with Beijing as well as its other international partners on pandemics-an important but the under-addressed challenge for national, regional and international security.

  • Keeping the southern neighbour engaged

    Context

    During Mahinda Rajapaksa’s India visit, New Delhi is likely to talk to Colombo on the Tamil issue and counterbalance Beijing’s influence in the Indian Ocean.

    Background of the current politics in Sri Lanka

    • Sri Lankan Prime Minister official visit to India is taking place a few months after he assumed office and his brother was sworn in as president
    • Nationalist wave after attacks: The brothers were voted to the office on a Sinhala nationalist wave, a sentiment that is a fallout of the Easter attacks on Christian shrines, including the Saint Anthony’s shrine, in April last year.
      • The attacks had killed more than 250 people, six months before the elections.
      • The polarisation worked in favour of the Rajapaksas vis-à-vis Sri Lanka’s 10 per cent Muslim population, mostly Tamils, who are especially numerous on the country’s east coast.

    Tamil issue in Sri Lanka

    • No engagement with Hindu Tamil: While Muslims have become the number one scapegoat for the Easter tragedy, the Rajapaksas have not tried to engage the Hindu Tamils
    • LTTE background: Hindu Tamils, who make about 11 per cent of Sri Lanka’s population, have had an acrimonious relationship with Mahinda Rajapaksa ever since he wiped out the LTTE in 2009.
      • Many members of the community became collateral victims in the process.
    • Implications for India-Sri Lanka relations: Gotabaya was the defence secretary at that time. The Hindu Tamil factor may complicate India-Sri Lanka relations.
    • No inclusion minorities from Sri Lanka in CAA: In the Citizenship Amendment Act the Indian Parliament passed in 2019, the persecuted minorities of Sri Lanka are not taken into account.
      • However, the Hindu Tamils of Sri Lanka are feeling insecure again.

    China-Sri Lanka axis

    • The China factor is likely to aggravate the complication: The Rajapaksas are known to be pro-Sri Lanka. Mahinda Rajapaksa was largely responsible for opening Sri Lanka to massive — and strategic -Chinese investments.
    • The Hambantota port issue: The Hambantota Port and 15,000 acres have been conceded to China on a 99-year lease, causing considerable consternation in New Delhi, which apprehends that this deep seaport could be used for military purposes, and not just trade.
      • The deal was put on a hold by former PM but the present dispensation wants it to be restored.
    • China’s growing clout in the Indian Ocean: India’s efforts were also designed to thwart China extending its influence in Sri Lanka at a time when the Narendra Modi administration is trying to counter Beijing’s clout in the Indian Ocean.
    • Modi’s visited on May 30, 2019, just after beginning his second tenure as PM.

    Past engagement events

    • New Delhi has tried to engage the new Sri Lankan government after the Rajapaksas assumed office.
      • India’s foreign minister S Jaishankar, landed in Sri Lanka on November 20, 2019, to invite Gotabaya for his first visit to India — rather than to China.
    • Gotabaya visited New Delhi for three days in late November last year.
    • Tamil issue discussed: Jaishankar is said to have told Gotabaya that India expects his government to treat Tamils with dignity in the process of reconciliation.
      • There is speculation that India might appoint an ambassador of Tamil origin to Colombo.
    • Cooperation against terrorism: The Indian PM went further when Gotabaya Rajapaksa visited New Delhi: He announced a $50 million line of credit for security and counter-terrorism
    • Line of credit for Infra: India also announced another $400 million for development and infrastructure projects in Sri Lanka.
      • That the counter-terror fund would further strengthen cooperation against terrorism.
    • Allaying the fears over China: Gotabaya allayed India’s fears on China by saying that Sri Lanka would not allow a third country to affect Sri Lanka-India ties.

    Conclusion

    While addressing the issue of minority and growing Chinese influence in Sri Lanka both countries need to focus on the other areas of cooperation like counter-terrorism, trade, security, development, technology etc.