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Type: Op-ed

  • A U.S. strategy only meant to isolate China

    Context

    Since 2017, the United States government has released a few reports and fact sheets on its new Indo-Pacific strategy. Buried in these documents is a much deeper agenda of the U.S. government: to use three large Asian states — Australia, India, and Japan — to isolate China. There is nothing else to it.

    The scale of BRI and the US objections

    • Objections to BRI: The U.S. government has made it clear that what it finds most objectionable is China’s Belt and Road Initiative (BRI), which has signed on more than 70 countries in the world.
    • What BRI aims to achieve? Adopted in 2013, the BRI is intended as a mechanism to-
      • Development of new markets: BRI aims to end China’s reliance upon the markets of the West and to develop new markets in other continents.
      • Building infra: It is also intended to use China’s massive surpluses to build infrastructure in key parts of Africa, Asia, and Latin America.
      • Investment of $ 1.3 trillion: By 2027, according to estimates by Morgan Stanley, China will spend about $1.3 trillion on this ambitious construction project.
      • Involvement of Saudi Arabia: Even Saudi Arabia, a close ally of the U.S., has made the BRI one of the cornerstones of its Saudi Vision 2030 plan.
    • Involvement of Pakistan: While China has invested $68 billion to build the China-Pakistan Economic Corridor from Xinjiang to Pakistan’s Gwadar Port.
      • Saudi Arabia has agreed to invest $10 billion in the port itself.

    Significance of the BRI and comparison with the US spending

    • Staggering scale and participation: The scale of Chinese investment, and the participation of a range of countries with different political identities in the BRI, is staggering.
    • Loss of appetite in the US to spend: At the Indo-Pacific Business Forum in July 2018 the U.S. said that it has spent $2.9 billion through the Department of State and the USAID (United States Agency for International Development).
      • It has lined up hundreds of millions of dollars more through its U.S. Millennium Challenge Corporation (MCC) and the Overseas Private Investment Corporation.
      • Inadequate US spending: If one adds up all the money that the U.S. intends to spend for economic projects, it is still a fraction of the amount spent by China.
      • ‘America First’ attitude: There is no appetite in Washington, D.C., with its ‘America First’ attitude, to funnel more money towards investments in the region currently being built by the BRI.

    Military Claims of the US and investment

    • US investment with military presence: It appears as if U.S. investments will come only with military claims.
      • The case of Nepal: A few years ago, Nepal discovered a large amount of uranium in Mustang, near the Nepal-China border; this has certainly motivated U.S. interest in Nepal’s economy.
      • If the U.S. money comes with U.S. military presence, this will create a serious flashpoint in the Himalayas.

    Raising human right and transparency issue against China

    • The argument of human rights and transparency
      • Rhetorical argument: Unable to outspend the Chinese, the U.S. government is making a rhetorical argument that it has more respect for “transparency, human rights, and democratic values” than China, which “practices repression at home and abroad”.
    • The argument of transparency and the debt trap
      • Debt trap used by the US: It is hard to imagine the U.S. being “transparent” with its trade deals. It is equally hard to imagine the U.S. being able to argue that it would not put countries into debt.
      • Debt crisis created by the US in the 1980s: The U.S. government enabled a massive Third World debt crisis in the 1980s, which was then used by the U.S.-driven International Monetary Fund’s Structural Adjustment Programs to strangle countries in Africa, Asia, and Latin America.
      • This history is alive, and it makes a mockery of the U.S.’s attempt to say that its own approach is superior to that of China’s.

    US withdrawal from multilateralism

    • Apart from that, the U.S. government has already indicated that it is uninterested in multilateral deals.
    • Withdrawal from TPP: The US withdrew from the Trans-Pacific Partnership in 2017, for instance.
      • Australia and Japan shrugged, and then put their energy into the Regional Comprehensive Economic Partnership, which sidelines the U.S.

    The claim of free and open Indo-Pacific

    • Renaming the Pacific Command: In May 2018, the U.S. military’s Pacific Command was renamed the Indo-Pacific Command, a symbolic gesture that provides a military aspect to the Indo-Pacific Strategy.
    • What free and open mean to the US? The U.S. government has made it clear that for all its talk of a “free and open Indo-Pacific”, what it actually wants is an Indo-Pacific with fewer Chinese ships and more U.S. warships.
    • Just before this renaming, the U.S. National Security Strategy of 2017 noted that “China seeks to displace the United States in the Indo-Pacific region”, and so the Indo-Pacific Strategy intends for the S. to fight for its dominance in the Pacific Ocean, the Indian Ocean, and in the Asian rim.
    • This is a very dangerous war that the U.S. seeks to impose on Asia.

    India adopting the US project of Indo-Pacific

    • Australia and Japan moving away: As the military aspect of the Strategy increased, both Australia and Japan edged away from full-scale adoption of the U.S. project.
      • Japan has begun to use the term “Indo-Pacific” without the word “Strategy”.
      • Australia has signed onto a “comprehensive strategic partnership” with China.
    • Only India adopting the project: Only India remains loyal to the agenda set by U.S. President Donald Trump.
      • No US strategy to contain China: In all the documents released by the U.S. government and in all the speeches by officials, there is no discussion of the strategy to contain China.
      • There is only rhetoric that skates into the belligerent territory.

    Conclusion

    India would be advised to study the U.S. project rather than jump into it eagerly. Room for an independent foreign policy for India is already narrowed, and room for independent trade policy is equally suffocated. To remain the subordinate ally of the U.S. suggests that India will miss an opportunity to be part of a reshaped Asia.

     

     

  • The issues around data localisation

    Context

    The contentious clauses on local data storage in the revised Personal Data Protection Bill need re-examination.

    What Personal Data Protection Bill contains?

    • Greater control to an individual: The draft law is a comprehensive piece of legislation that seeks to give individuals greater control over how their personal data is collected, stored and used.
    • The promise of improvement over the current privacy law: Once passed, the law promises a huge improvement on current Indian privacy law, which is both inadequate and improperly enforced.
    • Criticism of the bill: The proposed bill has attracted criticism on various grounds such as-
      • The exceptions created for the state.
      • The limited checks imposed on state surveillance, and-
      • Regarding various deficiencies in the structures and processes of the proposed Data Protection Authority.

    The issue over the “data localisation”

    • Data within the country: The phrase, which can refer to any restrictions on cross-border transfer of data, has largely come to refer to the need to physically locate data within the country.
    • Provisions for the transfer of personal data outside India: The PDP Bill enables the transfer of personal data outside India, with the sub-category of sensitive personal data have to be mirrored in the country (e. a copy will have to be kept in the country).
      • Ban on transfer of critical data outside the country: Data processing/collecting entities will, however, be barred from transferring critical personal data (a category that the government can notify at a subsequent stage) outside the country.
      • Different from Justice Srikrishna committee report: These above provisions have been changed from the earlier version of the draft Bill, released by the Justice Srikrishna Committee in 2018. 
      • The 2018 draft imposed more stringent measures that required both personal and sensitive personal data to be mirrored in the country (subject to different conditions).
      • Welcome move: The move to liberalise the provisions in the 2019 version of the Bill is undoubtedly welcome, particularly for businesses and users.

    How removing the restriction matters?

    • Reduction in cost to business: Liberalised requirements will limit costs to business and ensure users have greater flexibility in choosing where to store their data.
    • More proportionate approach: The changes in the 2019 draft reflect a more proportionate approach to the issue as they implement a tiered system for cross-border data transfer, ostensibly based on the sensitivity/vulnerability of the data.
    • Move-in accordance with the right to privacy: This seems in accord with the Supreme Court’s dicta in the 2017 Puttaswamy case.
    • Conditions for interference in privacy: The Court had made it clear that interference in the fundamental right to privacy would only be permissible if inter alia deemed necessary and proportionate.

    Test of proportionality in the bill

    • On closer examination, it appears that even the revised law may not actually stand the test of proportionality.
    • The three-argument for imposing norms: There are broadly three sets of arguments advanced in favour of imposing stringent data localisation norms:
      • Sovereignty and government functions. Referring to the need to recognise Indian data as a resource to be used to further national interest (economically and strategically), and-
      • To enable enforcement of Indian law and state functions.
      • Accruing benefits to the local industry: The second claim is that economic benefits will accrue to local industry in terms of creating local infrastructure, employment and contributions to the AI ecosystem.
      • Protection of civil liberties: Regarding the protection of civil liberties, the argument is that local hosting of data will enhance its privacy and security by ensuring Indian law applies to the data and users can access local remedies.
    • Contradiction in the claim of protection? If data protection was required for the above purposes, it would make sense to ensure that local copies were retained of all the categories of personal data provided for in the Bill (as was the case with the previous draft of the law).
      • Sectoral obligations: In the alternative, sectoral obligations would also suffice as is currently the case with sectors such as digital payments data, certain types of telecom data, government data, etc.
    • Will data localisation lead to privacy protection? We note that the security of data is determined more by the technical measures, skills, cybersecurity protocols, etc. put in place rather than its mere location.
      • Localisation may make it easier for domestic surveillance over citizens.
      • Enabler of better exercise of privacy by citizens: It may also enable the better exercise of privacy rights by Indian citizens against any form of unauthorised access to data, including by foreign intelligence.
      • Effectiveness matters: The degree of protection afforded to data will depend on the effectiveness of the applicable data protection regime.
    • Protecting privacy through less intrusive measures: Insofar as privacy is concerned, this could be equally protected through less intrusive, suitable and equally effective measures such as requirements for contractual conditions and using adequacy tests for the jurisdiction of the transfer.
      • Such conditions are already provided for in the PDP Bill as a set of secondary conditions.
      • The European Union’s General Data Protection Regulation too uses a similar framework.
      • Extra-territorial operation: The extraterritorial application of the PDP Bill also ensures that the data protection obligations under the law continue to exist even if the data is transferred outside the country.
    • Giving an individual a choice: If privacy protection is the real consideration, individuals ought to be able to choose to store their data in any location which afford them the strongest privacy protections.
      • It is arguable that data of Indians will continue to be more secure if stored and processed in the European Union or California.
      • These two jurisdictions have strong data protection laws and advanced technical ecosystems.

    Way forward

    • Identification of the issues: The joint parliamentary committee ought to, ideally, identify the need, purpose and practicality of putting in place even the (relatively liberal) measures contained in the PDP Bill.
    • Broader thinking at policy level: Further, in order for localisation-related norms to bear fruit, either in terms of protecting citizen rights, enabling law enforcement access to data or enabling the development of the local economy, there has to be broader thinking at the policy level.
      • This may include for instance-
      • Reforming surveillance-related laws.
      • Entering into more detailed and up-to-date mutual legal assistance treaties.
      • Enabling the development of sufficient digital infrastructure, and
      • Creating appropriate data-sharing policies that preserve privacy and other third party rights, while enabling data to be used for socially useful purposes.

     

     

     

  • Making the super-rich pay their fair share

    Context

    It is now beyond obvious that India cannot revive its economy without increasing public spending, and so increasing its fiscal resources is essential. Among other measures, this requires urgent adoption of legislation and institutional reforms to end financial opacity.

    The opacity in the data

    • Unlikely Budget estimates: The Union Budget was presented, based on numbers for revised estimates for the current year and Budget estimates for the coming year that the Finance Ministry itself knows are
    • Where else the opacity in data extends: The opacity of data also extends to cross-border movement of funds generated through a range of activities, including tax evasion, misappropriation of state assets, laundering of the proceeds of crime, and bribery.
      • Even here, India still has a lot to do, as confirmed by the recent publication of the Financial Secrecy Index by the Tax Justice Network, a U.K.-based financial advocacy group.
    • Financial Secrecy Index rank: On the surface, India has managed to reduce its contribution to global financial secrecy, with its rank falling from 32 on the 2018 index to 47 in 2020.
      • But this is partly because the new edition of the index covers more countries than it did two years ago.

    Transparency Reforms by the government

    • Arrangement with Switzerland: It is true that the government has adopted and supported a few transparency reforms, such as the automatic exchange of tax and financial information with other jurisdictions, like Switzerland.
      • What the arrangement with Switzerland mean? If an Indian citizen has an account with a Swiss bank and has a balance over a certain threshold, this information will be sent to the Indian tax authorities automatically.
    • Beneficial ownership register: The government did create a beneficial ownership register- which would allow the identification of the beneficial owner of an asset regardless of whose name the title of the property is in.
      • Exemption making the law weak: The law is weak since it exempts a lot of people at the discretion of the authorities.
      • Also, this register is not accessible to the public.

    Making multinationals and the super-rich pay their fair share of taxes 

    • Need to do more: Stopping the financial haemorrhage and making multinationals and the super-rich pay their fair share of taxes requires much more.
    • Capital flight and consequence for the country’s development: Capital flight out of India by Indian elites and foreigners alike has been undermining our country’s development for decades.
      • Outdated international system: An important part of these flows is the result of artificial profit shifting by multinational companies taking advantage of an outdated international tax system.
    • How the multinationals shifts profits? These multinationals may be making profits in India but can easily declare those profits in a low tax jurisdiction like Hong Kong and justify that transaction as a payment for the use of a patent.
      • The magnitude of loss-$27.5 billion: According to one estimate, this strategy represented a loss of $27.5 billion in 2014 for the Indian government, up from $142 million in 2000.

    Onshore financial services and issues with it

    • Paradoxical decision: Three years ago, the government took the paradoxical decision to set up onshore international financial services in the country.
      • This is how the International Financial Services Centre in the Gujarat International Finance Tec-City (GIFT-City), Gandhinagar, emerged.
      • It was modelled after offshore financial centres such as Hong Kong, Singapore, the City of London and Dubai.
    • Increasing the possibility of regulatory arbitrage: While this has not created much employment, it has led to growing possibilities for regulatory arbitrage by financial firms, with potentially very problematic consequences.

    The issue with the policy of tax incentives

    • Little evidence of attracting investment: The government keeps granting tax incentives on a discretionary basis, even though there is little evidence that these incentives attract investment.
    • What factors matters for investment: Recent research by International Monetary Fund, factors such as-
      • Quality of infrastructure.
      • A healthy and skilled workforce.
      • Market access and-
      • Political stability matters much more.
    • Consequences of the policy-reduction in tax revenue: The massive reduction in corporate tax rates has thus far not led to any increase in private investment.
      • But it has meant a significant reduction in tax revenues, with devastating consequences.
      • Implications for health, educations etc.: Reduction in tax revenue translates into a lack of resources for education, healthcare, food and nutrition and infrastructure.
      • Low tax-GDP ratio: India is already an outlier among similarly placed developing countries with its low tax-GDP ratio of 18%.
      • Making the budget dependent on indirect taxes: The government budget is also highly dependent on indirect taxes like the Goods and Services Tax which are regressive and hit ordinary citizens harder.

    Way forward

    • Legislation to end financial opacity: Adoption of legislation and institutional reforms to end financial opacity- including, for example-
      • Opening the beneficial ownership register to the public and-
      • Stopping the creation of onshore tax havens is the need of the hour.
    • Opening the debate on how to make the multinationals pay their fair share: The Government of India must also assume a more vocal role in the international debate about how to make multinationals pay their fair share of taxes.
      • This means continuing to appeal for a United Nations tax body, which is much more legitimate than the Organisation for Economic Co-operation and Development (OECD).
      • The issue with the OECD’s proposal: The OECD’s proposals, published at the end of 2019, are neither ambitious nor fair enough.
    • Explore the possibility of going alone: If the organisation continues to remain deaf to the demands of developing countries, India must be prepared to go it alone, thinking unilaterally about how to make multinationals pay what they owe.

     

     

     

     

     

  • Youth can be a clear advantage for India

    Context

    The demographic dividend is close to five-decade-long demographic opportunities that can be leveraged only with suitable policies and programmes

     The youngest population in the world

    • Median age at 28 years: By 2022, the median age in India will be 28 years.
      • In comparison, it will be 37 in China and the United States.
      • 45 in western Europe, and 49 in Japan.
    • The demographic dividend
      • The working-age population more than non-working: India’s working-age population has numerically outstripped its non-working age population.
      • An extraordinary opportunity: A demographic dividend, said to have commenced around 2004-05, is available for close to five decades.

    The two caveats

    • The demographic dividend is an extraordinary opportunity. There are, however, two caveats.
    • First: Dividend available in different states at different times.
      • India’s population heterogeneity ensures that the window of demographic dividend becomes available at different times in different States.
      • Example of Kerala vs. Bihar: While Kerala’s population is already ageing, in Bihar the working-age cohort is predicted to continue increasing till 2051.
      • Decline in 11 major states by 2031: By 2031, the overall size of our vast working-age population would have declined in 11 of the 22 major States.
    • Second: Many factors that matter for harnessing the dividend
      • Factors that matter: Harnessing the demographic dividend will depend upon the-
      • Employability of the working-age population.
      • Health.
      • Education.
      • Vocational training and skill.
      • Besides appropriate land and labour policies, as well as good governance.
      • Demography is not destiny: India will gain from its demographic opportunity only if policies and programmes are aligned to this demographic shift. Demography is not destiny.

    Need for skills

    • Need for the additional jobs: The Economic Survey 2019 calls for additional jobs to keep pace with the projected annual increases in the working-age population.
    • Lack of education and skills: UNICEF 2019 reports that at least 47% of Indian youth are not on track to have the education and skills necessary for employment in 2030.
      • Possibility of demographic disaster: The projected demographic dividend would turn into a demographic disaster if an unskilled, under-utilised, and frustrated young population undermines social harmony and economic growth.
    • Poor learning outcomes: While over 95% of India’s children attend primary school, the National Family Health Surveys (completed up to 2015-16) confirm that poor infrastructure in government schools, malnutrition, and scarcity of trained teachers have ensured poor learning outcomes.

    What needs to be done?

    • Adopt a uniform school system: A coordinated incentive structure prompting States to adopt a broadly uniform public school system focusing on equity and quality will yield a knowledge society faster than privatising school education can accomplish.
    • Ensure training in line with the market demand: Most districts now have excellent broadband connectivity-
      • Let geography not trump demography: Irrespective of a rural or urban setting, the public school system must ensure that every child completes high school education, and is pushed into appropriate skilling, training and vocational education in line with market demand.
    • Invest and modernise: Modernise school curricula, systematically invest in teacher training so that they grow in their jobs to assume leadership roles while moving beyond the tyranny of the syllabus.
    • Use of technology: Deploy new technology to accelerate the pace of building human capital by putting in place virtual classrooms together with massive open online courses (MOOCS) to help prepare this huge workforce for next-generation jobs.
      • Investing in open digital universities would further help yield a higher educated workforce.

    Focus on women

    • Translating literacy into skill: Growing female literacy is not translating into relevant and marketable skills.
      • A comprehensive approach is needed to improve their prospects vis-à-vis gainful employment.
      • Need of the flexible policies: Flexible entry and exit policies for women into virtual classrooms, and into modules for open digital training, and vocational education would help them access contemporary vocations.
    • The need for equal pay: Equal pay for women will make it worth their while to stay longer in the workforce.
    • The deferred bonus: Economist Yogendra Alagh has written that the significance of this “deferred bonus” (women entering the workforce), could be higher than the immediate benefits of the dividend from shifts in population age structure.

    Health care

    • In India, population health is caught between the rising demand for health services and competition for scarce resources.
    • Impact of economy on rural health: The National Sample Survey Office data on health (75th round, 2018), shows that a deep-rooted downturn in the rural economy is making quality health-care unaffordable.
      • People are availing of private hospitals less than they used to, and are moving towards public health systems.
      • Diverting public investment from However, central budget 2020-21 lays emphasis on private provisioning of health care which will necessarily divert public investment away from public health infrastructure.
    • The Ayushman Bharat Yojana: It links demand to tertiary in-patient care.
      • This promotes earnings of under-utilised private hospitals, instead of modernising and up-grading public health systems in each district.
    • We need to assign 70% of health sector budgets to integrate and strengthen primary and integrated public health-care services and systems up to district hospital levels.
      • Include out-patient department and diagnostic services in every health insurance model adopted, and-
      • Implement in ‘mission mode’ the Report of the High-Level Group, 2019, submitted to the XV Finance Commission.
    • The elderly population in India is projected to double from 8.6% in 2011 to 16% in 2040.
      • This will sharply reduce the per capita availability of hospital beds in India across all major States unless investments in health systems address these infirmities.

    Conclusion

    The policies that we adopt and their effective implementation will ensure that our demographic dividend, a time-limited opportunity, becomes a boon for India.

     

     

     

  • The next mission

    Context

    After the success of the SBM, government is looking for the next mission in the form of Jal Jeevan Mission.

    Investment in Sanitation

    • Investment of over 1 lakh crore: The central and state governments have invested in excess of one lakh crore on sanitation over the past five years.
    • Where the fund was used? A majority of these funds have gone towards-
      • Incentivising the poor and marginalised households to construct and use household toilets.
      • Bringing about behaviour change, and-
      • Building capacities of field functionaries.
    • The success of the mission: Over 10 crore toilets have been built in rural India and nearly 55 crore people have stopped defecating in the open, all in just five years.
      • This has contributed in bringing down global open defecation by more than half.
    • Return on the investment in sanitation: The returns on these investments have been manifold, and their effects on the broader economy, markets and employment have been significant.
      • 400 % return: The UNICEF recently estimated that investments in sanitation in India are yielding a 400 per cent return with each rural household in an open-defecation-free village saving Rs 50,000 on account of avoided medical costs and time savings.
    • Future prospects for the sanitation infrastructure: The Toilet Board Coalition has estimated that the sanitation infrastructure and services market in India will be worth over $60 billion by 2021.
      • Many new jobs, even in the most rural areas of the country, apart from reducing health and environmental costs and generating savings for households.
    • Growth in the sanitation-related business: The business of manufacturing toilet-related hardware accessories have reported huge growth in sales during the SBM period.
      • They project a continued uptrend through retrofitting and upgrades.
      • This has been corroborated by another recent study by UNICEF in which they have estimated that SBM has resulted in creating over 75 lakh full-time equivalent jobs over the past five years, giving the rural economy a major boost.

    A milestone, not a finish-line

    • Sustaining the success: The government is committed to ensuring that this success is sustained.
    • On October 2, 2019, the prime minister said that we must all ensure that people continue to use toilets and that no one is left behind.
    • Allocation of 10,000 crores in the Budget: This has been backed up by the finance minister in the budget for 2020-21.
      • In the budget, she announced about Rs 10,000 crore for rural sanitation to focus on-
      • ODF sustainability.
      • Bio-degradable waste management.
      • Greywater management.
      • Sludge management and-
      • Plastic waste management for all villages by 2024.

    Next Mission- Piped Water Supply

    • Jal Jeevan Mission: The next critical basic service, is piped water supply. On Independence day this year, the prime minister announced the Jal Jeevan Mission (JJM).
      • With the goal of ensuring piped water supply for all households of India by 2024 and with a commitment of Rs 3.6 lakh crore of central and state funds for the scheme.
      • The budgetary allocation of 12,000 crores: In the Union budget for 2020-2021, the government has already allocated Rs 11,500 crore for JJM, with an additional Rs 12,000 crore being made available through extra-budgetary resources.
    • Earmarking 50% grants for drinking water and sanitation: In addition, a huge impetus to the rural water supply and sanitation sector is the earmarking of 50 per cent of the Rs 60,750 crore grant for rural local bodies provided under the Fifteenth Finance Commission for drinking water and sanitation.
      • Making local bodies more responsible: This will ensure that the gram panchayats and local communities are responsible for the upkeep of their water and sanitation infrastructure, providing a boost to the sustainability of service delivery to people.
      • Making sanitation and water supply everyone’s business: This approach will ensure that just like sanitation, provision of water supply and its upkeep will also become everyone’s business.

    Conclusion

    It is fairly clear now that investment in sanitation is actually a facilitator for broader economic, health and social gains. The government should ensure the sustainability of SBM and replicate its success in implementing the JJM.

     

  • Forging a new India-U.S. modus vivendi

    Context

    It is clearer than perhaps ever before in recent times, that New Delhi needs the continued support of the U.S. government on almost everything substantial that matters to India in its quest to be a power of substance in the international system.

    Preparing for Trump 2.0

    • The world may have to deal with Mr Trump for four more years after the end of his present term this year.
    • Where India can benefit from constructive ties with the US?
      • A fairer trade regime.
      • Accessing cutting-edge technology.
      • The fight against terrorism.
      • Stabilising our region.
      • New Delhi stands to benefit from constructive ties on all issues, given a more sensitive United States.
    • India must, therefore, seek greater understanding and engagement should there be a Trump 2.0.
    • Understanding the asymmetrical partnership: Asymmetrical partnerships, as we know from history, are rarely easy.
      • Partnership with the superpowers: Partnerships with superpowers are even more difficult; in international politics, as in life, even the best of unequal relationships results in a loss of some dignity and autonomy. 

    Why the partnership with the US matters for India?

    • The growing influence of China in Indo-Pacific: Without the United States, the region could become willy-nilly part of a new Chinese tributary system.
      • Chance of more organic rule-based order: With a fully engaged United States, the region has at least the chance of creating a more organic rules-based order.
    • Past consequences for India: the history of “estrangement” with the United States, during the Cold War, has had consequences for vital national interests that continue to cast their shadow on the present.
      • Jammu and Kashmir (J&K).
      • Nuclear non-proliferation.
      • Festering of the Pakistan “problem”.
      • The Chinese humiliation of 1962, are just a few examples.
    • Change in the perception over the US: But much of course has changed today.
    • Anti–Americanism is outdate: Anti-Americanism, once the conventional wisdom of the Indian elite, seems outdated.
      • Close alignment with the US: New Delhi has, over the decades, gone on to align itself more closely with Washington.
      • Opinion in favour of the stronger ties: More important, both within India and in the U.S., the consensus across the mainstream of political opinion favours stronger relations between the two countries.

    Pro-US tilt of the Indian Foreign policy

    • A survey suggests support for Trump: According to the latest Pew Surveys of Global Opinion, support for Mr Trump in India is high enough to suggest a great deal of public affection for the American President.
      • That itself is a marker of the way India and Indians now see the world.
    • Reason for the change in geo-strategic change: The reason for the change in New Delhi’s geostrategic outlook can be summarised quickly.
      • If the 1971 Friendship Treaty with the Soviet Union was a response to the continuing U.S. tilt towards Pakistan and the beginnings of a Washington-Beijing entente.
      • China factor: At present, it is the prospect of a potentially hegemonic China in the Indo-Pacific region is helping to cement the relationship.
      • Beijing has managed to alienate nearly all its neighbours and allies, except North Korea and Pakistan.
    • Gains made in bilateral ties in the last 3 years:
      • COMCASA– A foundational military agreement that allows for the sharing of encrypted communications and equipment.
      • Export control law relaxation: A change in U.S. export control laws that places India in a privileged category of NATO and non-NATO U.S. allies;
      • 2+2 dialogue: New ‘2+2’ foreign and defence ministers dialogue.
      • Oil export to India: An exponential increase in U.S. oil exports to India.
      • Tri-lateral military exercise: The inauguration of the first India-U.S. tri-service military exercise and expansion of existing military exercises.
      • The signing of Industrial Security Annex: The signing of an Industrial Security Annex that will allow for greater collaboration among the two countries’ private defence industries.
      • Inclusion of India in a U.S. security Initiative: The inclusion of India and South Asia in a U.S. Maritime Security Initiative.

    Preparing for the President from Democratic Party

    • There is, of course, a chance that we may have a Democratic President next year.
    • Bipartisan support in the US: In those circumstances, we can only hope that the bipartisan consensus on engaging India will prevail.
      • To be sure, however, a new President will seek to put his/her own imprimatur on the relationship.
      • Democrats and the Human Right issue: The Democrats will clearly be more proactive on human rights and on issues of inclusion and diversity, which would make a greater demand on India and test its capacity and creativity.
    • Indian diaspora: India, of course, continue engaging with its strongest source of support in the United States: the Indian diaspora.
      • Fortunately, there is a near consensus on the need to strengthen this constituency.

    Conclusion

    In any case, there is little doubt that whoever is the next occupant of the White House, a retreat from multilateralism (especially on trade-related issues) and concern about China will continue to be the two main pillars of contemporary American foreign policy. If for only those reasons, Mr Trump’s reason has undeniable significance.

     

     

     

  • Conquering the green frontier

    Context

    India has to forge a different development model -one that will shift India’s workforce from agriculture to globally leading, resource-efficient businesses.

     How India can deliver sustainable prosperity?

    • The two intertwined forces: Just as liberalisation and globalisation transformed the economy in the past, two different yet intertwined forces will likely transform the economy in the future.
    • First–High competitiveness: India must have globally leading companies across a range of key sectors such as financial services and manufacturing.
      • Global productivity frontier: These super competitive businesses should define the global productivity frontier so that they can surpass the production processes of the best companies in the world.
    • Second-Long term sustainability: India must also adopt a resource-efficient, low-carbon development pathway to utilise scarce natural resources effectively. There is no other way.
      • Apocalyptic air pollution.
      • Dire water shortages.
      • Rising temperatures and-
      • Extreme climate events- have already brought us to the brink of an environmental crisis.
      • The need for India’s leadership for achieving the target: Moreover, note that the world needs India’s leadership to achieve the 2 degree Celsius global warming target.
      • In short, India’s growth has to be green.
    • What is the problem in achieving these goals?
      • No nation has ever attempted these twin transformations — high competitiveness and long-term sustainability — simultaneously.
      • The traditional development model: The traditional development model has been a farm-to-factory development model with economies transitioning from traditional agriculture to resource-intensive, urban manufacturing.
      • India has to forge a different development model — one that will shift India’s workforce from agriculture to globally leading, resource-efficient businesses.
      • Also, these companies must use the most advanced green technologies and business models.
      • India’s development model will, therefore, need to take the Indian economy from “the farm-to-green frontier”.

    Three focus area for green transformation

    • The productivity transformation driven by super competitive businesses is well underway.
      • We now need to consider a comprehensive policy package that will enable us to simultaneously undertake a green transformation.
      • Global best practices and India’s own experiences suggest three focus areas for such a transformation.
    • India has the third-largest start-up ecosystem in the world and our larger companies are also pursuing innovation-driven growth.
    • Specific and stable policy goals
      • Specific and stable policy goals need to be established to set detailed green targets for various sectors.
      • A macro-economic model that factors in-
      • Current skills.
      • Sectoral connections.
      • Relative emission and-
      • Financial constraints are necessary to inform such targets going forward.
      • Such a model can then be used to evaluate various green growth scenarios.
      • Decarbonisation approaches in the green frontier scenario will drive the growth of green industries, green jobs, green skills, green entrepreneurs and green finance.
    • Pursuing the policy goals: Global and Indian experience highlights that green targets will have to be pursued in a stable manner across decades.
      • Most large emitters and pollutants are associated with long-lived (20-30 plus years useful life) assets.
      • The basic requirement for investment in green assets: Investments in green assets will only be possible if there is the sanctity of contracts, pricing stability, and consistent policies that are backed up by the full force of law.
      • Implementation: Finally, these specific and stable policy goals need to be implemented urgently to avoid lock-in with high-carbon assets.
    • Revamp the institutional framework: India may need to revamp its existing institutional framework for environmental governance in order to align it with the country’s green transformation.
      • Four levels of institutional structure: As demonstrated by global best practices, a comprehensive institutional framework could include four levels — super sovereign, sovereign, state/province and city.
      • Council for monitoring: An independent council or board may also be required to monitor, report, and verify green targets.
    • Appropriate financing capacity: Indian policymakers and entrepreneurs will unleash market forces that will drive the growth of waste management, solar panels, electric vehicles, super-efficient appliances, recyclable food packaging, clean coal, etc.
      • These green industries will require massive investments and appropriate financing capacity will have to be created to support their growth.
      • Preliminary estimates suggest that India’s green transformation may require an average investment of $95 billion to $125 billion per year, aggregating over $1 trillion in the next decade.
      • A “green super fund” could be established to jumpstart green investments by pooling together international and domestic capital.
      • Dual roles of financial institution: Such a financial institution could play a dual role in mediating and mitigating risk for global capital, as well as identifying sectoral project pipelines.
      • The success of financial institution: Indian financial institutions have been very successful in building up new industries such as microfinance, EdTech, and affordable healthcare, which have delivered both financial and social returns; however, financial support for green industries will have to be orders of magnitude larger.
      • Moreover, the “green super fund” may have to be able to invest across the capital structure (debt plus equity) as well as across the company lifecycle (early stage, growth capital, infrastructure investments, and so on).

    Conclusion

    Our future depends on how we resolve our environmental challenges. Further, we are the world’s third-largest carbon emitter and will play a crucial role in getting the planet to a low-carbon trajectory. Simply put, we must urgently transform our economy to get to the green frontier.

  • 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).

     

     

     

  • Trading with America

    Context

    Trump has made India’s trade headache more acute. But he has also opened up opportunities.

    Political polarisation in both countries

    • Impeachment attempt: The Democrats in the US have struggled to oust Trump from the White House and rarely find anything they can agree with their President on.
    • The deeper political divide in India: While ousting Narendra Modi through a legal process of impeachment is not an option in India, the political divide is even deeper.
    • No consensus on foreign policy
      • Under Trump, consensus on foreign policy in Washington has broken down.
      • In Delhi, the Opposition has never been willing to acknowledge the diplomatic successes of the government.
      • But the usually bipartisan support for foreign policy in the strategic community has eroded.
      • Many leading voices of the establishment who have a long and distinguished service have become major critics of foreign policy.

    Comparison of India’s trade with the US and China

    • Trade with the US: In 1995, total two-way trade, including goods and services, between India and the US was $11 billion.
      • In 2018, it crossed $140 billion.
      • It is reported to be around $150 billion in 2019.
      • In trade with the US, India enjoys a surplus of nearly $23 billion.
      • A 14-fold increase in trade turnover in 25 years is certainly not something to sneer at.
      • Can India and the US do better on trade? Yes, of course.
      • Only a few years ago, the two sides were looking at an annual trade target of $500 billion. That looks rather ambitious amidst the current disputes
    • Trade with China: India’s China trade too has risen, even more rapidly.
      • From a couple of hundred million dollars in the mid-1990s to nearly $90 billion in 2019.
      • India has a deficit of nearly $57 billion with China.

    Trade disputes between India-US

    • Trade has long been a contentious issue between Delhi and Washington.
    • There had been enduring tension since the late 1980s between the US demand for-
      • Greater market access.
      • Intellectual property protection.
      • And a host of other demands and India’s own cautious approach to economic liberalisation.
    • Rise in pressure under Trump administration: All recent US administrations have applied continuous pressure on India for trade agreements.
      • The pressure has significantly risen under President Trump.
    • Trade dispute at the centre of the relationship: If his predecessors were willing to cut some slack for India by citing larger political and strategic considerations in the bilateral ties, Trump has put trade disputes at the front and centre of the relationship.
      • Officials in the Department of Commerce and the US Trade Representative’s office have adopted extremely aggressive tactics in the negotiation with India.
    • Result of a radical reorientation of US trade policy: Trump has undertaken a radical reorientation of US trade policy.
      • For Trump, this is a matter of long-standing ideological conviction as well as a political convenience.
      • He has bet that the anti-free-trade White working classes in the American rust belt are the key to his re-election.
    • No option but to deal with it: Given America’s pole position in the global trading system, you have no option but to deal with it.
      • Trump is getting away with his demand for the restructuring of trade relations with key economic partners.
      • He has renegotiated the NAFTA with neighbours Canada and Mexico and has compelled China to start reducing the massive trade deficit with the US.
    • The difference in India and China’s response to the US: In response to Trump’s pressure, Xi reaffirmed his commitment to economic globalisation and domestic liberalisation and wooed American investors with even greater vigour than before.
      • India embracing protectionism: India appears to be sending the opposite signal — of a definitive drift towards protectionism. India’s trade troubles are certainly not limited to the engagement with the US.

    Problem with India’s trade policies

    • India walking away from RCEP: Delhi walked away at the very last minute from signing the RCEP agreement last year to deep disappointment among its partners including the ASEAN, Australia, Japan and New Zealand.
      • The trade deficit with China: One of the main arguments cited by India was the massive trade deficit with China and the potential danger of it widening further under RCEP.
    • Failure in negotiations with the EU: The European Union is reluctant so far to restart trade negotiations that ended in great frustration for Brussels some years ago.
    • No deal with Australia and New Zealand: Australia and New Zealand have given up.
    • Neighbours complaint: India’s immediate neighbours complain that India’s rhetoric on connectivity and regionalism is matched by the multiple non-tariff barriers that continue to constrain commerce across the South Asian frontiers.
    • Why so many deals are pending? It is certainly probable, statistically, one in a million, that the fault lies, always, with India’s partners. But one would think there might be a real problem with Delhi’s own trade policies.

    Conclusion

    • New opportunity: Trump has certainly made India’s trade headache more acute. But he has also opened up opportunities.
      • His trade war on China has put pressure on the global supply chains centred around China.
      • India not the beneficiary of the US-China trade war: Many companies are moving their production out of China, but only a few are turning towards India.
      • While Delhi has talked the talk on taking advantage of the US-China trade war, it is yet to get its act together.
    • No opposition against protectionism at home: What makes Delhi’s devaluation of trade as a key instrument of economic growth potentially irreversible is the fact that there is little domestic political opposition to it.
    • Time to take a hard look at trade policy: For now, though, India’s partnership with the US might not only survive the current trade tensions but advance during Trump’s visit.
      • There is so much happening elsewhere in the relationship — especially in the defence and security domain.
      • But the time has come for Delhi to take a hard look at its current trade policy that threatens to undermine India’s regional and international prospects.

     

     

     

     

  • 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.