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Indian GST: Another Modi gambling for perpetual economic disorder?

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Indian PM Modi is in news again with a new economic project called GST.  GST could mean two big things, one: Global State terrorism and two, Goods and Services Tax.  While Indians are still struggling with the impact of demonetization, the Modi government has come out with yet another shock called GST.

Apparently, Modi is still eager to be in the news and he does things only to promote that goal at a heavy cost for the people of India. His foreign tours, being arranged jointly by PMO, foreign ministry and Indian embassies abroad,  are meant to boost Modi’s image as a fast running PM of India. In fact, Mod runs into wanting state plane to take him for foreign tours. He thoroughly enjoys his foreign tours, meeting big leaders and having food with them and “shake hands” photos with them for Indian media lords.

The Modi government keeps trying various economic strategies, even if for fun, that harms the people at large. But neither Modi nor BJP nor RSS is worried about the consequences of their actions. It seems the BJP regime is targeting the people of India for ignoring them for too long to offer it the mandate to rule the nation. PM Modi is also not sure if people would repose their faith in his party or government when the next general poll take place.

The Modi government thus punishes the people of India while Mod himself keeps visiting big nations as his prime hobby along with big entourage of media lords and  government officals. Modi just ignores the sentiments of Indians by going to Israel against  Indian support for the support for the Palestinians. In order to make his visit to Israel easy without any criticism in India, PM Modi has launched the GST so that people of India and media are busy with the issue while he would enjoy life in Israel. 

The Goods and Services Tax being introduced by Indian regime aiming at a standard tax system for entire country and in every state and region. Either could destabilize the weak nations and common people and could only promote capitalism and support global imperialism. Here we are talking about the second problem of new Indian economic law GST, relating to uniform taxes. PM Modi has called it Good and Simple Tax. But common people are puzzled as they care confused about the consequences of GST. After their disastrous experience with demonetization drive, Indians are scared f of any new shock therapies by the Modi government. Certainly, they want to live with fewer problems.

 One party, one system, one religion, one tax

Taking the one time victory as the permanent vote  by Indian people, the RSS/BJP government is bent upon one  system, one party and one religion system in India. A nationwide Goods and Services Tax (GST), came into effect on Saturday from midnight, has faced criticism for its complex design.  GST, being billed as the biggest tax reform since Independence, will subsume all indirect state and central levies, making India a single market. Under GST law, the producer must have to pass the added benefit of tax reduction. Businesses and their consultants have opposed it and said that it’s against the free market concept.

 Union finance minister Arun Jaitley has likened the roll out of the GST – whose bill was cleared by both houses of Parliament last month after six years of stormy debate – to a revolution and the “most significant taxation overhaul in India.” PM Narendra Modi said the GST reflects the spirit of “one nation, one aspiration, one determination.” Opposition parties oppose it.

 FM Arun Jaitley on June 29 asked opposition parties such as Congress and the Left to reconsider their decision to skip the midnight GST launch tomorrow saying they were all consulted on the indirect tax reform and cannot run away from it. “I hope every political party will reconsider and revisit its decision” on not participating in the launch event to be organised in the Central Hall of Parliament, he said. The government, FM Jaitley said, remains committed to the Goods and Services Tax (GST) as any other reform. “It is single most important taxation reform in 70 years.” All decision on GST, including rules and tax rates, were taken in consultation with states and political parties must display broad shoulder and own up their responsibility, he said.

The leader of Indian opposition Congress decided to keep away from the special midnight June 30 meeting convened by the government on GST implementation. Trinamool Congress has already announced its decision to boycott the event. Left parties also boycott the meeting as they reject the GST. CPI (M) general secretary Sitaram Yechury has already questioned the government on “hurrying” into introducing GST and recalled that the ruling BJP had opposed the system when it was in the opposition.

The Left parties will not take part in the special midnight meeting on June 30 convened by the government to launch the Goods and Services Tax (GST), CPI leader D Raja said today. He said the parties will not take part in the meeting in view of protest by small and medium scale entrepreneurs, traders, weavers and informal sector workers on the way the GST is being implemented. “The Left will not be participating in the midnight GST meeting. People are agitating across the county. ..We cannot be celebrating when people are agitating,” the Rajya Sabha member said.

The Modi government wants smooth rollout of the GST the 30 June in the parliament. A war room will monitor and take immediate action on a complaint. Government officials have specially alerted to thwart any attempt of cartelization or disruption in the new tax regime. The government said it will use the circular-shaped Central Hall to launch the new taxation system that is set to dramatically re-shape the over USD 2 trillion economy. A gong will be sounded at midnight to usher in the GST. Prime Minister Modi will be the key speaker at the function. President Pranab Mukherjee, who is enjoying finals days at Presidential palace with Mogul Garden, , is also likely to attend the function, where former Prime Ministers Manmohan Singh and H D Deve Gowda have been invited too. Central Board of Excise and Customs (CBEC) chief said that “The finance ministry has set up a GST feedback and action room specifically for government officials to approach it with any urgent queries related to problems of GST in any area”.

The PMO and Indian government officials have specially alerted to thwart any attempt of cartelization or disruption in the new tax regime. The government has created a ‘war room’ to monitor GST (Goods and Service Tax) implementation process, a new indirect tax system which will roll out on Saturday. In North Block, the office building of Finance ministry has allotted a space named as ‘GST Feedback and Action Room’. Former Chairman of CBEC said that “The government wants these benefits to reach the consumers through these Anti- Profiteering Rules. On the other hand, its rampant application will create chaos and serious disruptions in business”.

Equipped with multiple phone lines and computer systems and manned by tech-savvy youngsters, a “mini war room” has been set up in the Finance Ministry to deal with crises related to the implementation of GST or goods and services tax. War room is also ready for prompt action from tax evasion to technical confusion on rates to transportation related issues. War room responsibility is more crucial as the anti-profiteering body is still in the process of being.

GST- one tax and several problems

GST is not as simple as Modi and Arun want us believe. It is highly complicated at different levels. BJP, a party of  finical lords,  cannot devise any policy to multiage the poor or common people.

The GST, a worldwide accepted tax system, was first introduced by France in 1954.  Presently, around 160 countries follow the GST or VAT in some form or the other. In some countries, analysts say, VAT is the substitute for a GST, but conceptually it is a destination-based tax levied on consumption of goods and services. However, only Canada has a dual GST model, akin to what India intends doing.

Indian government wants to replace it with a more streamlined nationwide Goods & Services Tax (GST) that is hailed by many as the country’s most pathbreaking tax reform and deplored by others who fear it will turn the economy down. The new system will eliminate India’s notorious complex layers of taxation including purchase, entertainment, excise, luxury and sales taxes (VAT) and others. Analysts predict that the GST, if properly implemented, will likely bolster the country’s GDP by 2 percent.

One of the major objectives of GST is to make the tax incidence on consumers less by reducing compliance costs, removing cascading of taxes, increasing the tax base, reducing logistics costs and reducing the effective rates of taxes from the present level. Other country experiences suggest that GST led inflationary pressures in an economy because producers have refused to pass added profit to consumers.

GST law said, “Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices”. Revenue secretary Dr Hasmukh Adhia had said that “We expect companies to cooperate. We hope we don’t have to use the weapon.”

A unified tax system is likely to remove a slew of indirect taxes as well as the cascading effect of taxes. Manufacturing costs will be reduced; hence prices of consumer goods – cars, phones, FMCG goods – will also likely plummet. A unified tax regime will also be a deterrent to corruption which will benefit the common man. Other benefits include simpler administration which will ensure an easier collection of revenues, widening of the tax net and plugging of leakages and multiple taxations which will boost the government’s revenue stream and efficiency. For the consumer/tax-paying citizens, the GST would mean more transparency, proportionate taxation, relief in overall tax burdens, slightly cheaper goods and services.

India’s gold industry is optimistic that the gold supply chain will be more transparent and efficient. The GST, some hope, will also provide an edge to the travel and tourism industry by reducing costs for customers, streamlining taxes and thus promoting overall growth. Under the GST, rates finalized for air travel, flying economy will attract a 5 percent tax.

India currently has one of the worst tax-to-GDP ratios among major economies at 16.6 percent, less the half the 34 percent average for the members of the OECD and also below many emerging economies. Improved tax compliance should shore up public finances, augmenting resources for welfare and development spending and giving a lift to the $2 trillion economy.

While there is no official estimate of the potential fiscal gain, some tax experts say the measure, after the initial teething trouble, would lift the tax-to-GDP ratio by as much as 4 percentage points as the number of tax filers is estimated to more than treble to 30 million. In future, compliance is going to be extremely crucial

True, not many are interested in paying taxes and as corruption, being religiously promoted by the regime and politicians, has badly affected the tax officials as well, most pay taxes not properly.

The unorganized sector of India’s economy is vast, employing an estimated nine out of 10 workers. While staying outside the GST regime risks losing business, joining it will necessitate an overhaul of firms’ accounting systems and an investment in technology.

The new tax system requires three filing a month plus an annual return – a total of 37 filings – for each of India’s 29 states in which a firm operates. For smaller companies operating on wafer thin margins, hiring accountants and technical staff could substantially dent their bottom line. A head of portfolio management services at financial firm in Mumbai says all consumer-facing industries will be big beneficiaries of the GST

Most of those who argue for GST are also the supporters of BJP government. Only time will let the peole know the real move of GST as India has long ago under the corrupt Congress misrule mortgaged its economic policy to IMF and World Bank and increasingly work to promote American economic interests in order to gain some favors from Washington. The Hindutva fanatics are too eager to promote those “structured” relations with USA.

Of the eight million existing tax payers, 6.6 million tax assesses have already enrolled for GST. And about 1.7 lakh new applications for GST have come in. However, the silence inside the headquarters of Goods and Services Tax Network or GSTN, housed on the fourth floor of an imposing glass building aptly named World Mark I right next to Delhi’s international airport, is misleading. Behind white and blue cubicles, professionals with expertise in IT and taxation are putting in extra hours to ensure that the switch over to GST is a smooth affair. The biggest task for GSTN – a not-for-profit company set up to manage and collect indirect taxes – is to help traders and businessmen migrate to the GST platform.

Indian GST Network has developed a tool where you can work offline and upload when there is connectivity. It will take seconds to upload your returns. As the officials test and retest their programs and applications, our question “when was your last off day” made everyone burst out. “We will have to check our records,” said a former banker who’s “measuring end user results of the GST software.” “This is our national service.”

However, some chief ministers of Indian states have already expressed their dissent. How is one-nation-one-tax good politics for all 29 states and several Union territories and the center given the fact they all have diverse economic strengths and weaknesses?

Observation

GST interferes with federal arrangement and imposes its will on the states and thereby encroaches upon state rights and privileges. In other words, federal government tries to control entire nation and state resources.

One tax indeed means big problems for the people of India.  Conscious people in India feel if India has been purchased by international frauds that play with the psyche of Indians who want to see their nation a super power as soon as possible to challenge both USA and Russia while making China a non-issue.  

GST is likely to harm the common masses. GST is exorbitant. Tax is likely to increase on a massive scale. Traders are not going to reduce the prices.

Who will benefit? Any reform or policy is supposed to help the people of the nation. Corporate lords will have more profits under GST.

Once lauded as path-breaking, which is now causing rancor in the European Union.  Lesser-developed economies like Portugal, Italy, Greece and Spain have had to adopt extreme austerity measures that have sent unemployment soaring all over southern Europe. This has led many of the anti-EU states to consider a referendum on exiting the union a la Brexit.

In India too, there is a strong chance that the GST, the country’s boldest and riskiest tax reform yet, may give the ruling political establishment a greater headache than it may have bargained for.

The country’s biggest tax reform since independence is promising to bring millions of firms into the tax net, boosting government revenues and India’s sovereign credit profile. Until now, all rundown premises and small scale operation has kept the business below the radar of India’s tax officials. Since July 1, however, the party will be over. The new tax will require firms to upload their invoices every month to a portal that will match them with those of their suppliers or vendors. Because a tax number is needed for a firm to claim a credit on the cost of its inputs, many companies are refusing to buy from unregistered businesses. Those who don’t sign up risk losing any customer who has.

The nation is waiting for the real problems of GST to come to fore.

There are serious apprehensions in the minds of people over GST’s implementation. Unfortunately, India is under the grip of international frauds like the BJP MP and IPL boss Mallya. Unless corruption is contained and done away with, a new tax system won’t be fruitful. If the regime let its supporters to loot the nation’s resources and evade taxes, nothing good or positive is going to come of the envisaged tax reforms.

The GST is in fact a regressive tax, which will consume a higher proportion of poor people’s income, compared to those earning large incomes.  Many feel that imposition will also result in a surge in prices of services like telecoms, banking and airlines. If the actual tax benefit is not passed to consumers, and sellers increase their profit margin, the prices of goods will go up instead of down. Even assuming the GST delivers on the revenue front after an initial lag, one has to realize that it goes counter to the long-term trend of devolving greater powers to states.  It centralizes in the GST Council the powers of indirect taxation, and could thus be a constant source of friction between center and states, or between states if some gain or lose more than the others.

One also suspects if the governments of Congress and BJP are trying to eliminate the poor and have-nots from the Indian economic system by GST and other such measures as the IMF and World Bank, committed to capitalism and colonialism, are pressing the third world to do away all subsidies to the poor. .

The BJP government that worships cow and Israel as real gods, has been searching new ideas to boost the image of the Modi led RSS government which is shattered by false promises to the people and issues like black money and demonetization. GST therefore is crucial for the BJP government which has lost the blackmoney issue as part of gigantic demonetization drive that spelt disastrous for the common people for months and the impact is not completely worn out.

Uncertainty cannot be the foundation of any government because people suffer not knowing how to deal with new threats to their ordinary lives.

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South Asia

Why India won’t intervene militarily in Maldives

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An Indian Ocean archipelago of 1,192 islands, the Maldives is a tourist paradise. The Maldives is a low-lying country that is expected to be among the first in the world to go under water as a result of climate change. While it may take a few more decades for rising sea levels to wreak havoc on the archipelago, there are more immediate and pressing problems tearing the country apart.

Tourism is the backbone of the country’s economy, and tour operators have reported hundreds of daily cancellations since the state of emergency was imposed on February 5. Following the state of emergency, Maldives has been in a tensed state of existence in as the archipelago is facing a sort of turmoil, ransacking its tourism based economy.

Crisis

The current crisis was the result of a Supreme Court ruling on February 1, overturning the convictions of Yameen’s rivals. In addition to ordering the government to release the nine convicted opposition leaders, the apex court called for reinstating 12 parliamentarians who were stripped of their seats last year when they left Yameen’s Progressive Party of Maldives to join the opposition.

Two weeks after the government of the Maldives declared a state of emergency amid rising political tension, on February 20th Parliament approved a 30-day extension that, among other grave consequences, may result in serious damages to the economy, scaring away international visitors. On February 20, President Abdulla Yameen Abdul Gayoom requested to extend the Maldives state of emergency for a total of 45 days. The Maldives government and the Ministry of Tourism have emphasized their commitment to safety for civilians and tourists alike.

The emergency “shall only apply to those alleged to have carried out illegal activities — it shall not apply to otherwise law-abiding residents of, or visitors to, the Maldives,” Yameen’s office said in a statement.

The opposition Jumhooree Party says the approval of the extension is illegal, and urged Yameen to lift the state of emergency in order to restore normalcy. “Despite the State of Emergency, the country is functioning as normal as possible,” a spokesperson for the Ministry of Tourism told TPG Tuesday before the extension was approved. “Schools and government offices are in operation and we do not foresee any threats to the public or tourists. We too are continuing with the promotional activities of the destination.”

Since Yameen became president in a controversial election in 2013, he has systematically crushed dissidence within his party and removed rivals from the political arena.

For instance, MDP leader and former Maldivian president Mohamed Nasheed, the archipelago’s first democratically elected leader, was convicted on terrorism charges in 2015 and sentenced to 13 years in jail. While Nasheed has been living in self-exile in Britain since 2016, several other opposition leaders, including a former defense minister in the Nasheed government, Mohamed Nazim; Yameen’s once “trusted” vice-president, Ahmed Adheeb; and leader of the opposition Adhaalath Party, Sheikh Imran Abdulla, are in jail on long prison terms.

The opposition Maldivian Democratic Party (MDP) calls on neighboring India to militarily intervene to end the crisis, and let Nasheed become the president.

According to reports in the Indian media, the government has ruled out the military option for now, although it has activated its standing operating procedure for the Maldives by keeping troops ready for deployment there at short notice, should the need arise.

But India is said to be working with a group of countries, including the United States and Saudi Arabia, to pressure the government through imposition of sanctions. However, India has traditionally opposed the sanctions option to influence regime behavior, as sanctions affects ordinary people rather than the ruling elite.

Relations between India and the Maldives have been strong for decades; India played a major role in building the Maldives’ economy and military. It was India’s support that kept the authoritarian Gayoom in power for three decades.

However, bilateral ties have been fraying since Nasheed’s exit from power in 2012. That year, the Maldivian government abruptly terminated a $500 million contract awarded to India’s GMR Infrastructure for developing an airport in Male. Bilateral ties have deteriorated since then. Yameen’s “authoritarian governance” has irked India, but it is his tight embrace of China that has raised hackles in Delhi.

No invitation for invasion

A country could decide to send military forces to neighboring or any other country only on the request form that nation concerned. Otherwise the intervention becomes totally illegal and amounts to invasion. USA led NATO have been occupying many countries in Middle East and Afghanistan after invading them on false justifications.

Anyone who closely follows Indian state behavior abroad would quickly endorse the argument that India would not intervene in Maldives citing any reason.

In order to decide to sent troops to nearby Maldives, India must have got a request from the government of Maldives but that government has not sought it. In 1988 when India intervened in Maldives it was on the request received from the then President Gayoom.

When an external government is engaged in dealing with an emergency situation, naturally that power should be given huge service charges. Without any request from Maldivian government of Yameen, India won’t get any service charges. Though the exiled opposition leader Nasheed might be willing to pay the money to India as he has made the request to New Delhi, but India cannot respond to non-government actors.

This step alone can easily do away with any suggestion to India for intervention in Maldives.

The government of Maldives has not asked for Indian military to help bring peace and normalcy back to the island nation. India cannot attack Maldives on the suggestion by the opposition leader who now lives in Srilanka.

Claiming to be a ‘terror victim’, India would not like to be seen as an aggressor as no amount of justification can  make New Delhi “innocent” although it has got that look. .

China factor

But there are some more important reasons that deny India any chance to send troops to Maldives which, in the absence of a request from the government,   would mean to remove the President and government from power.

Today, archipelago Maldives is not alone, though insignificant for non-tourists. China is fast becoming an economic ally of Maldives and might soon have its own military bases in the island nations as well.

Chinese nexus is the prime strength Maldives would operate on.

Unlike China, USA can only bully small nations but cannot spend money on them, does not invest there to help their economies flourish. Already, Beijing, knowing the Indian strategic community’s desire for a military showcase byIndia in Maldives, has expressed its opposition to outside intervention from India.

Unlike USA, India cannot attack Maldives on the suggestion of USA or Israel or Opposition leader Nasheed and if that at all happens India would possibly be in a long term trouble.

In 2014, when Chinese President Xi Jinping visited Maldives, Yameen handed over the airport project to a state-run Chinese company. The two sides signed a string of deals during that visit that saw Beijing participate in a big way in infrastructure building in Maldives. Maldives also became an enthusiastic participant in the Maritime Belt of China’s Belt and Road Initiative.

Then in December last year, the Maldives and China signed a Free Trade Agreement, much to India’s concern. Delhi is worried about Beijing’s mounting influence over Maldives and the strategic implications for India.

China’s growing presence in the Maldives is a serious concern to India given the latter’s geographic proximity to the Indian coastline. The Maldives also sit near international sea lanes through which India’s oil imports traverse. India’s security would be threatened should the Chinese set up a naval base in the Maldives. These concerns are not without substance; in August 2017, three Chinese naval vessels docked at the Maldives’ capital, Male, setting off alarm bells in Delhi.

India’s vulnerability

India is watching the unfolding crisis in the Maldives with concern. It is mulling different options. Not doing anything is not an option given India’s stakes in a stable Maldives.

A seemingly busy India, whose PM is on a perpetual foreign tours as India’s foreign policy with very little time for the people and keeps mum on all major anti-people events, promotes rampant corruption and the powerful lords  loot the nation and its resources for private use, steel cash from nationalized banks, illegal mining and land grabbing.

IPL Modi, PNB looter Nirav Modi- both have escaped from India and are now abroad thanks to timely help and aid from agencies of Indian regime, Kothari, et al are just the tip of iceberg in Indian sage of misappropriation of state resources while the intelligence and media lords are terribly busy blasting fake news about Pakistan and Muslims in order rot keep the fanatic sections of India.

The Indian government has said it is “disturbed” by the declaration of emergency in the Maldives and “the suspension of the Maldivian people’s constitutional rights.” It is “carefully monitoring the situation,” it said. Earlier, its Ministry of External Affairs issued a travel advisory to its citizens traveling to Maldives.

Sections in India are in favor of an Indian military intervention in the Maldives. Some argue that it does not behoove a rising power with big ambitions like India to shrink away from acting robustly to defend its interests in the region.

A section of the BJP leadership has described the current crisis in the Maldives as an “opportunity” for India “to stake its claim to being a global player.” It is “imperative” for India to intervene in the Maldives, they argue,  “since any global role is always dependent on a country’s performance in the neighborhood first. Those who want to see India a superpower as soon as possible with a magic touch, say that “time is ripe for a decisive Indian intervention in the Maldives.”  Such intervention by India would have the support of countries like the USA, Israel and UK, which, they reason, would be keen to see the pro-China Yameen removed from power. “This could be used to silence the Kashmiris who fancy for sovereignty”.

If India does decide in favor of military intervention, this will not be the first time it has done so in the Maldives. In 1988, India sent in a small contingent of troops to avert a coup attempt against Gayoom. But the circumstances of that intervention were different from what exists today. In 1988, President Gayoom invited India to intervene. Yameen is unlikely to do so now. Importantly as well, 30 years ago the coup plotters were just a small group of mercenaries. A military intervention today could leave Indian troops stuck in a Maldivian quagmire.

Yameen wins power struggle

Yameen, like most rulers today, is determined to cling to power. Not only has Yameen ignored the court order, but he went on to declare an emergency and had the judges who handed out the ruling arrested. Reinstating the 12 parliamentarians would reduce his government to a minority. That would enable parliament to oust him in a no-confidence vote.

Besides, Yameen seems apprehensive that allowing Nasheed to return to the Maldives and freeing the other opposition leaders would galvanize the opposition and boost mass protests against his iron-fisted rule. Presidential elections are due later this year and Yameen fears that he will be defeated by a strong opposition campaign.

With the proclamation of a state of emergency, Yameen has prevented parliament from meeting. The emergency will be in place for 15 days, during which he can be expected to pack the judiciary with loyal judges. He is likely to engineer defections from the opposition. He could extend the state of emergency as well.

Yameen has already appointed new judges, who have since annulled the court order releasing the opposition politicians. Former president and opposition leader Maumoon Abdul Gayoom, who is Yameen’s half-brother, has been detained and Yameen has fired two police chiefs over three days.

With Yameen tightening his grip, Nasheed has called on India “to send an envoy, backed by its military to free the judges and the political detainees.” He has asked for India’s “physical presence” in the Maldives.

China has warned India against any military intervention in Maldives.

Observation

China is closely watching events in the Maldives. The archipelago is a popular destination for Chinese tourists; in light of the current uncertainty, Beijing has advised its citizens to postpone travel to the Maldives. Having invested heavily in the Maldives, China is concerned about the safety of its investments, projects, and personnel. It has asked the Maldivian government to “to take necessary measures to earnestly protect the security of the Chinese enterprises, situations and personnel.”

Unlike India, China has leverage with the Maldivian government. Yameen is likely to listen to China. But Beijing would not want to see him go.

China is opposed to India meddling in Maldives and has made this more than clear. An editorial in China’s state-run Global Times chided India for openly intervening in its neighbors’ domestic affairs. There is “no justification” for India “to intervene in Male’s affairs,” it observed.

Any military showcase by India could also prove counterproductive to India’s long-term interests. It would push Yameen closer to the Chinese, for instance. Besides, it would boost perception of India as a “big brother” and a “bully” in the region. Undemocratic forces in India’s neighboring countries have usually stoked anti-India sentiment among the masses by stressing such perceptions. This can be expected to happen in the Maldives too.

Importantly, an Indian military intervention is unlikely to benefit democratic forces in the Maldives in the long run as a democratic government, should one come to power in the archipelago following an intervention, would be seen as “made in India” with the USA acting as a “midwife.” Such a government would lack legitimacy in the eyes of many Maldivian people.

It does seem that the Sino-Indian contest for influence in the archipelago is as fierce as the ongoing tussle between Yameen and the Maldivian opposition.

Thus any suggestion for Indian military intervention in Maldives is ruled out.

India could perhaps act as a facilitator or even a mediator in a possible dialogue between Yameen’s Maldivian government and the opposition. But will Yameen welcome an Indian role against the Chinese wish? Moreover, he has reportedly defied Indian requests relating to the current crisis. India cannot have privileged the leverage to influence the decisions of Maldivian President.

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Into the Sea: Nepal in International Waters

Sisir Devkota

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A visit to the only dry port of Nepal will immediately captivate busy scenes with hundreds of trucks, some railway carriages and huge Maersk containers at play. Trains from the Port of Kolkata in India carry tons of Nepal’s exports every week. Every year, Nepal is fined millions of rupees for overstaying its containers at the designated dock in Haldiya Port of Kolkata. Nepal pays for spaces inside Indian ships to carry out its exports via the sea. This is the closest Nepal has come in exploiting economic opportunities through sea waters. Prime Minister KP Oli went one step further and presented an idea of steering Nepal’s own fleets in the vast international sea space. While his idea of Nepal affording its own ship was mocked; on the contrary, he was right. The idea is practical but herculean.

To start with, Nepal has a landlocked right to use international waters via a third country for economic purposes only. Law of the Sea conferences held during the 80’s, guarantees Nepal’s right to use the exclusive economic zone all around the globe. Article 69 of the Law of the Sea convention states that Nepal could both use sea as a trading route and exploit the exclusive economic zone of its sea facing neighbors. Nepal’s closest neighbor, India has a wide exclusive economic zone which consists of 7500 km long coastline. The article also allows landlocked nations to use docking facilities of the nearest coastal nation to run its fleets. An exclusive economic zone in sea waters is designated after a coastal nation’s eleven mile parallel water boundary ends; which is also a part of the coastal nations territory. Simply put, Nepali fleets can dock at India’s port, sail eleven miles further into international waters-carry out fishing and other activities, sail back to the Indian coast and transfer its catches back to Nepal.

Floating Challenges

Before ships can carry the triangular flag into sea waters, Nepal will need treaties in place to use coastal nation’s water to take off and build shipment facilities. Law of the Sea convention clearly mentions that the right to use another nation’s coast will depend solely on the will of the hosting coastal nation. Does Nepal have the political will to communicate and forge a comprehensive sea transit agreement with its coastal neighbors? Nepal’s chance of securing fleets in and around the Indian Ocean will depend on whether it can convince nations like India of mutual benefits and cancel any apprehension regarding its security that might be compromised via Nepal’s sea activity. The convention itself is one among the most controversial international agreements where deteriorating marine ecosystems, sovereignty issues and maritime crimes are at its core. Majority of global and environmental problems persist in the high seas; ranging from territorial acquisitions to resource drilling offences. Nepal is welcome into the high seas, but does it comprehend the sensitivity that clouts sea horizons? Nepal needs a diplomatic strategy, but lacking experience, Nepal will need to develop institutional capacities to materialize the oceanic dream. Secondly, the cost of operating such a national project will be dreadfully expensive. Does the Nepali treasury boast finances for a leapfrogging adventure?

How is it possible?

The good news is that many landlocked nations operate in international waters. Switzerland, as an example might not assure the Nepali case, but Ethiopia exercising its sea rights via Djibouti’s port could be inspiring. Before Nepal can start ordering its fleets, it will need to design its own political and diplomatic strategy. Nepal’s best rationale would lie in working together with its neighbors. The South Asian network of nations could finally come into use. Along with Nepal, Bhutan is another landlocked nation where possible alliances await. If India’s coasts are unapproachable, Nepal and Bhutan could vie for Bangladeshi coastlines to experience sea trading. Maldivian and Pakistani waters are geographically and economically inaccessible but Sri Lanka lies deep down the South Asian continent. If Nepal and Bhutan can satisfy Sri Lankan interests, the landlocked union could not only skim through thousands of nautical miles around the Bay of Bengal without entering Indian water space; but also neutralize the hegemonic status of India in the region. If such a multinational agreement can be sought; SAARC- the passive regional body will not only gain political prowess but other areas of regional development will also kickstart.

Most importantly, a transit route (such as the Rohanpur-Singhdabad transit route) from Bangladesh to Nepal and Bhutan will need to be constructed well before ships start running in the Indian Ocean. In doing so, Nepal will not only tranquilize Nepal-Bhutan relations but also exercise leadership role in South Asia. A regional agreement will flourish trade but will also make landlocked Nepal’s agenda of sailing through other regions of international sea strong and plausible. A landlocked union with Bhutan will trim the costs than that of which Nepal will be spending alone. Such regional compliance would also encourage international financial institutions to fund Nepal’s sea project. Apart from political leverages, Nepal’s economy would scale new heights with decreasing price of paramount goods and services. Flourishing exports and increased tourism opportunities would be Nepal’s grandiloquence. Nepal’s main challenge lies in assuring its neighbors on how its idea would be mutually beneficial. Nepal’s work starts here. Nepal needs to put together a cunning diplomatic show.

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South Asia

Prime Minister Narendra Modi’s Hug Diplomacy Fails

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Prime Minister Narendra Modi’s enthusiasm is only to capture power; the same, however, cannot be said of foreign policy administration, especially in dealing with our immediate neighbors, and China. The best examples of his policy paralysis are the way in which demonetization and GSTs are implemented, or his sudden visit to Pakistan in December 2015. He is always in election mode. During the first two years, he was in the humor of a general election victory. Thereafter, he has spent much of his energy in establishing himself as the sole savior of the BJP in state elections, and this year he will turn his attention to the 2019 general elections.

Two years ago, without doing any homework or planning, Modi travelled to Pakistan from Afghanistan to greet his counterpart, the then Prime Minister Nawaz Sharif, to wish him well on his birthday. He hugged Sharif and spent only two hours with him to try to sort out the 70 year outstanding divergence between India and Pakistan.

Modi strategically hugs fellow world leaders. He has no strategic perception. He believes only in the power of his personal charisma in dealing with foreign policy matters. This strategy has failed considerably with China and with our other immediate neighbors, but he neither intends to accept these mistakes, nor is he interested in learning from them. More importantly, an alternative diplomatic strategy is necessary to maintain our international position; through prudent policy articulations. Let us examine the impact of his hug diplomacy.

During the 2013/14 general elections campaign he attacked the Congress-led UPA government on multiple fronts, including towards former Prime Minister Dr.Manmohan Singh’s policy on Pakistan. He proposed that the BJP government would have more guts to better deal with Pakistan. Under his administration, we lost numerous soldiers in fighting with Pakistan terrorists, experienced a 100-day shutdown in Kashmir, blindly allowed a Pakistan team to inspect our Pathankot Air Force Station, and generally continued down a visionless path in foreign policy. These indicate that Modi’s defensive and offensive strokes against Pakistan have failed completely, including the most politicized ‘surgical strike’ that did not contain the terrorists from Pakistan. Today, the Modi government is searching for policy directions in handling Pakistan, but sat in a corner like a lame duck.

In the beginning, when he took office, Modi perhaps believed that ‘everything is possible’ in international affairs simply by virtue of occupying the prime minister seat. Further, he thought that all his visits abroad would bring a breakthrough. His hugs with counterparts, various costume changes, and the serving of tea, indicate that our prime minister is using soft power approaches. These approaches were used by our first Prime Minister Nehru whilst India did not have a strong military or economy. However, India is not today what it was in the 1950/60s. Presently, hugging and changing costumes will not necessarily keep India influential in international relations, especially at a time when the world is undergoing multi-polar disorder. However, he is in continuous denial that his paths are wrong, especially in dealing with our neighbors.

What is the BJP led-NDA government policy on Pakistan? Does this government have any policy for Pakistan? Since 2014,Modi has not permitted the Minister of External Affairs, Sushma Swaraj, to contribute to any foreign policy articulations. As long as Sushma fulfills the duty of Ministry of Indian Overseas Affairs she will receive praise from the prime minister’s office.

During 2015 he met Sharif at his residence in Islamabad to give him a hug. This happened exactly two years ago. Further, this is a very serious question that the Media and Modi-supporting TV channels forgot to raise. Instead, without hesitation, they praised him for touching the sky, and described the moment as a diplomatic initiative for a breakthrough with our neighbor Pakistan. The Media will realize this mistake when their traditional viewers switch over to other channels to get centrist news.

What are the outcomes of Modi hugging Sharif at his residence? The results are terrible. India’s relation with Pakistan touches the lowest ever level in a history of 70 years. The Mumbai terror attack mastermind Hafiz Saeed was released from house arrest and has started a political party to contest the general elections in Pakistan next year. This government does not have the guts to put pressure on Pakistan to provide the evidence – as requested by the Pakistan’s Court – essential to keeping the trial alive against Saeed. Modi has often preached that his government succeeded in isolating Pakistan in the international domain. The reality would be as much India diplomatically isolating Pakistan from the international community as the vacuum has been comfortably filled by China without any difficulty. These are the achievements that Modi’s hugs have brought to India.

The stability of Afghanistan is in India’s long-term strategic interest. India’s ‘aid diplomacy’ to Afghanistan in various fields has been increasing day after day, including infrastructure development and the training of Afghan security forces. Yet, India’s influence in Afghanistan is in disarray. Former Afghanistan President Hamid Karzai said, “India should have its own policy on Afghanistan”. However, Modi’s policy makers in New Delhi are expecting the US President Donald Trump and Secretary of State Rex Tillerson to maintain India’s active and significant role in Afghanistan.

India showed its displeasure during the constitutional crisis in Nepal, in halting energy supply to Kathmandu. This forced the land-locked country to obtain easy support from Beijing. Nepal was once the buffer state between India and China; it is now sitting on China’s lap and steering India. Modi’s mute approach to the Rohingya crisis speculates India’s major power ambition. This is a serious setback to India’s diplomacy: it is now pushing Myanmar to get support from China, along with our neighbor Bangladesh, in resolving the crisis with Rohingya refugees.

The first democratically elected government under Mohamed Nasheed was toppled unconstitutionally in Maldives. Since India has failed to raise any substantial voice against this atrocity, China has jumped onto the scene. New Delhi ought to have designed a policy to resolve the political crisis, but India, the world’s largest democracy, has watched this incident as a movie in the Indian Ocean Theatre. The highlight was the decision of our Prime Minister to skip a visit to the Maldives whilst on his tour of the Indian Ocean islands.

In Sri Lanka, China is designing its future battlefield against India. As the war against LTTE was over, Colombo started travelling in a two-way track, with India and China. Beijing’s love affair, apparently with Colombo, but with an eye on New Delhi, is no secret. Since Modi has allowed these developments without exercising any diplomatic resistance, he has given China a comfortable seat inside Sri Lanka. China has now realised that her weaved network against India can be strengthened easily in the Indian Ocean, because New Delhi only displays silent concern. After Modi took office, India – China relations have remained static. The border talks are on stand still. Beijing holds on to extend a technical hold on Masood Azhar, a UN designated terrorist. The dragon pulls our immediate neighbors to her side. These developments indicate that our foreign policy articulations are not supported by any clear strategic trajectory.

Modi’s diplomacy is like an air balloon which, once torn, cannot be refilled; a new balloon is needed. Hugging a leader does not lead to any commitment in foreign affairs. Personal charisma does not work as a foreign policy tool in dealing with a world power. For this reason, Modi cannot understand the setback he is facing with China, Pakistan, and our other neighbors. In comparison, Vajpayee’s or Dr. Manmohan Singh’s combined simple charisma as leaders or economists with appropriate home-work in the past; has caused tremendous results in foreign policy, including expected results in Indo-US nuclear negotiations. This is completely missing in Modi’s administration.

Hence, the newly elected Congress Party President Rahul Gandhi has said, “Modi’s hug diplomacy fails”. It was a valuable comment that the ruling elite should consider as a meaningful insight. Alternative approaches are vital to regain our neighbors’ trust, as opposed to China’s. However, Prime Minister Modi’s this year of work will be focused on the 2019 general elections, compromising the proper attention due to India’s international diplomacy.

First published in Congress Sandesh

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