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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

India’s North East: A cauldron of resentment

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The writer is of the view that the recent clash between police force of Mizoram and Assam is not an isolated event. Similar incidents have happened in the past. They reflect that it is not hunky dory in India’s north east as BJP’s government would have us believe. New states in India were created willy-nilly pacify agitation. Yet the boundaries of the new states do not satisfy the people of the new states fully. They are a simmering cauldron of resentment against India’s central government. They love their traditions more than monolithic Hindutva. s

On July 10, 2021, five Assamese policemen were killed while proceeding towards Varengate (outsider gate). Amid fiery statements of chief ministers of Assam and Mizoram, police officials and politicians, it appeared that the two states would launch a full-fledged war against one another. This was not the first incident of its kind. There had been similar clashes in the past (1979, 1985 at Mirapani where 42 persons were burnt alive and 2014 clash).

Crux of the problem

Hasty creation of states to deal with separatism

When India came into being, many of it states were in grip of insurgencies. To pacify the separatist movements India hastily bowed to demand for creation of new states by reorganising the existing territories of bigger states. Many northeastern states were carved out of the state of Assam. Under the Indian constitution, secession is an offence but a new state could be created through reorganistion of the bigger state. Mizoram and Nagaland were created in haste to meet insurgents’ demand for greater self-representation.

Northeastern frontier Agency was converted into Arunachal Pradesh after the fall of Dacca. Indira Gandhi hoped that China would remain a silent spectator to her initiative as it did while East Pakistan was seceded through intervention in East Pakistan.

Linguistic states of Maharashtra and Gujarat were created mainly owing to agitation by Marathi and Gujarati speaking populations of Bombay.

In 1960, the Indian government accepted the Naga tribes’ demand for a separate state. Three districts of the state of Assam were detached from Assam to create Nagaland. It had no railway station or airport. So Dmapur also was truncated from Assam and included in Nagaland. The Dima Kachhari tribe that mostly inhabited Dimapur resented this decision. Any how the city is now a throbbing commercial centre.

In 1966, the state of Punjab was divided to create the hind-speaking state of Haryana. In 1971 Himachal Pradesh was created. Then in early 1970s, three new states were created: Jharkhand out of Bihar, Chhattisgarh out of Madhya Pradesh, and Uttaranchal out of Utter Pradesh. In 2014, Talangana was created out of Andhra Pradesh.

Nagaling (Naga homeland)

The Naga consider that the demarcation of their state is repugnant to demarcation done in 1875 by the British government. Their concept of Nagaland extends up to Nepal.

Citizenship Amendment Act and the national Register of Citizenship

These two laws are abhorred in many states of the North East.

Concluding remarks

The pitched battle between the Mizo and Assamese policemen exposed India’s “myth of unity in diversity”. Like the British rulers, India is holding together its union of states by use of brutal force and draconian laws. However sub-surface against the Indian government persists. Obviously people cherish their tradition culture and religions more than monolithic Hindutva. The BJP has set up a north East Democratic Alliance to forestall disputes between the northeastern states. This body utterly failed to predict or prevent the recent Mizo-Assam clash.

India understood that if the erstwhile East Pakistan supported the insurgencies in the North east, it will be impossible for India to keep them within Indian fold. As such, India aided and abetted insurgency in East Pakistan.

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Pakistani PM’s Interview with PBS News Hours on Afghanistan Issues

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In an interview with PBS News Hour, host Judy Woodruff asked PM Imran Khan multiple questions about Pakistan’s point of view for Afghanistan and its relationship with the United States.

When she asked the PM about his assessment of the situation in Afghanistan, he said that Washington had really messed up the situation in Afghanistan. The US military failure is causing mess-ups in Afghanistan. “First of all, they tried to look for a military solution in Afghanistan when there was never one. And people like me, who know the history of Afghanistan and kept saying there isn’t a military solution, were called anti-American. I was called Taliban Khan,” said PM Imran. But now the US, after spending trillions of Dollars, sacrificing thousands of servicemen, and killing millions of innocent Afghans, destroying Afghanistan infrastructure, and damaging the whole country, realized that it is un-win able and withdrawing its troops in hap-hazard, causing a huge mess-up.

PM Imran also shared that despite the US being in Afghanistan for 20 years and 46 nations’ strong allied forces up to 150,000 troops, he does not know what the US objective was in the country. Only the destruction of a country, killing human beings, is beyond understanding.

“I don’t know what the objective was in Afghanistan, whether there was to have some nation-building, democracy, or liberate the women. Whatever the cause was, the way they went about it was never going to be the solution,” said PM Imran.

While the US is facing tremendous unrest and the civil war-like situation at home and yet wanted to interfere in other domestic issues. Beyond understanding!

He also lamented the way the US dealt with this solution. The PM explained that when the NATO forces had decided that there was no military solution, the bargaining power they had was gone.

“When they finally decided there is no military solution, unfortunately, the bargaining power of the American or NATO forces had gone,” said PM Imran. He added that the US should have gone for a political solution when 150,000 NATO troops were in Afghanistan.

“Once they had reduced the troops to barely 10,000, and when they gave the exit date, Taliban thought they had won,” said PM Imran. He added that it is difficult right now to ask the group to compromise or “force them” to take a political solution. “It’s tough to force them into a political solution because they [Taliban] think that they won,” said PM Imran.

PM rejects claims of Taliban sanctuaries.

The anchor also asked PM Imran about claims of Taliban sanctuaries being present in Pakistan and a report about 10,000 fighters crossing the border to help the group in Afghanistan.

“Judy, for a start, this 10,000 Taliban, or as the Afghan govt. Says, Jihadi fighters have crossed over, is absolute nonsense. Why don’t they give us evidence of this?” he said in response.

As a matter of fact, the Afghan Government is confused and helpless. After the foreign troop’s withdrawal, they are left at the mercy of the Taliban. The US has admitted its defeat, Afghan Government as a puppet Government has also been defeated. Taliban is the winner and in a position to dictate.

To the question about the safe-havens, PM Imran wondered where the sanctuaries are located in Pakistan. In fact, Pakistan is a victim of terrorism, and the recent terrorist attack in Pakistan is planned, managed, and originated from Afghanistan. Pakistan has provided irrefutable evidence on several occasions.

The premier explained that Pakistan is hosting three million refugees, Pashtuns, the same ethnic group as the Taliban. He added that there are camps of 500,000 and 100,000 people or more. “Taliban are not some military outfit. They are normal civilians. If there are some civilians in these camps, how is Pakistan supposed to hunt these people down? How can you call them sanctuaries?” asked PM Imran.

The host had thrown this question to a follow-up on Washington and other organizations’ claims that Pakistan has helped the Afghan Taliban. The PM had told the host that the allegations were unfair and told her the history of the conflict. He explained that Pakistan had nothing to do with the September 11, 2001 terrorist attack in New York. The premier said that Al Qaeda was based in Afghanistan, and no Pakistani was involved in the attack. “There were no militant Taliban in Pakistan, and no Pakistani was involved,” said PM Imran. He added that when Pakistan decided to join the US war on terror, the country was devastated as it lost 70,000 of its citizens, and $150 billion was lost in the economy.

Pakistan’s good and bad outcomes for Afghanistan

The host had also asked the PM about Pakistan’s good and bad outcomes for the Afghanistan conflict. PM Imran told the host that the good outcome for Islamabad would be if an inclusive government with all factions, including the Taliban, is formed in Afghanistan. He added that the worst situation for Pakistan would be a “protracted civil war” in Afghanistan.

In such a scenario, the PM said Islamabad would face two problems, firstly, of refugees, and secondly, the country fears that Pashtuns within Pakistan would be drawn to the conflict.

“What we fear is that a protracted civil war would bring more refugees, and you know our economic situation is not such that we can have another influx,” said the PM.

“Secondly, the worry is that the civil war will flow into Pakistan because Taliban are ethnic Pashtuns. Now there are more Pashtuns on our side of the border than in Afghanistan. And so the worry is if this goes on, the Pashtuns on our side will be drawn into it, and that is also the last thing we want,” said PM Imran.

US bases will make Pakistan a target: PM.

The PM also shared that having a US military presence in Pakistan would make the country a target. He told Woodruff that when Pakistan joined the war on terror, it lost 70,000 people and was on the verge of bankruptcy. “We do not have the capacity to have any more fighting within our border or any terrorism within our country,” said the PM. He reminded that at the height of the war on terror, there were suicide bombings taking place all over the country, and businesses and tourism had collapsed.

“If there is a conflict going on in Afghanistan and there are bases in Pakistan, we then become targets, and we will then become part of a conflict,” said PM Imran. The premier said that Pakistan wants to partner with the US in peace but not in conflict. He added that the last relationship between Islamabad and Washington was transactional. “Pakistan was more like a hired gun. The US says we gave you aid, and that’s why you were fighting this so-called war on terror,” said PM Imran. He added that the aid given by the US was “minuscule” compared to the cost of Pakistan’s participation in the conflict.

‘Afghanistan in this situation because of US military failure.’

PM Imran told the host that Pakistan could not do much if the Taliban take over Afghanistan as the military solution has already failed. “What are we supposed to do about it? Here was the US for two decades in Afghanistan trying to force a military solution. The reason why we are in this position now is that the military solution failed,” said PM Imran.

The premier repeated that the best choice that everyone has is that somehow a political settlement emerges in Afghanistan. He added that the Taliban sitting down with the Ashraf Ghani government to form an inclusive government was the best choice.

“Absolutely, there is nothing more we can do except push them as much as we can for a political settlement – that’s all,” the PM said when asked if Pakistan was willing to accept a Taliban government in Afghanistan. However, he said that all Pakistan could pray that the people of Afghanistan decide what Government they wish to have, “As far as Pakistan is concerned, we have done what we can,” said PM Imran.

It is well understood that the Taliban have won the war, and it is time to rule the country. The US has negotiated with the Taliban and recognized them as the actual power of pillar and real owner of Afghanistan. It is a practice that the winner will dictate the defeated ones. It is proved that the unholy and biased media projecting Taliban as terrorists, insurgents, and illegal outfits were right people and were freedom fighters and opposed their homeland’s foreign occupation. Suppose the Taliban were so bad, how the US negotiated with them and signed a peace agreement with them. It is indirectly recognition of the Taliban as legitimate rulers of the country.

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The Indo-US bonhomie: A challenge to China in the IOR

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The oceans have long been recognized as one of the world’s valuable natural resources, and our well-being is tied to the oceans. From providing minerals and food to coastal nations to serve as highways for seaborne trade, Oceans are highly-regarded in the geopolitics and geo-economics. In 2010, the global ocean economy was valued at $1.5 trillion, and by 2030, it is likely to surpass $3 trillion. Such a growing geostrategic and economic significance pit authoritative nations into the race. 

Bounded by Africa on the west, the Indian subcontinent on the North, Australia on the East, and the Antarctic Ocean on the South, the Indian Ocean is the third largest water body. Over the years, it has become an area of competition among Washington, Beijing, and New Delhi. China, the world’s second-largest economy, imports energy via sea lanes in the Indian Ocean Region (IOR), while India, an influential regional actor and competitor of China, has also significant reliance on the IOR for its trade. Therefore, the reliance of both countries on the safe transportation of resources is inevitable, and they seek dominance in this water body. The growing global leadership of China, and the Indian economic rise have heightened the strategic value of the IOR and both powers have locked horns in it.

The success of the Chinese Belt and Road initiative (BRI), which strives to enhance China’s economic dominance from East Asia to Europe, hinges on the IOR. The IOR provides China with critical sea trade routes to the Mideast and Africa through BRI’s flagship project: China Pakistan Economic Corridor (CPEC). China, through BRI’s connectivity and economic potential, outweighs Indian influence in the IOR. Snaking its way from China’s western province Xinjiang to Gawadar port on the Arabian Sea, CPEC is a counterfoil to India, diminishing India’s strategic weight in the IOR. Therefore, India has an aversion to the CPEC because it ends the Chinese Strait of Malacca dilemma and makes its way through Azad Jammu and Kashmir. Having access to a port like Gawadar, China is likely to gain strategic and economic leverage in the region. Not only in India, but Beijing’s grandeur BRI is not well-received in the US as well. The world’s second-largest economy, China, aims to surpass the US economy in the coming years. On the accounts of the Chinese economic growth, the unipolar world order, once dominated by the US, has swapped its position with multipolar world. In addition, the US stakes are high in the IOR. With its interests in the Mideast, Africa, and Central Asia, the US is wary of China’s growing influence in the IOR. As a result, the US and India share a broader spectrum of mutual interests in the IOR.

New Delhi and Washington are enjoying rapprochement in their ties so as to limit China’s burgeoning influence. To materialize the quest of Washington about the freedom of navigation and maintaining open sea lanes, India spearheads the US paradigms in the IOR to curb China. For this purpose, India has eyed to magnify its naval capabilities and seeks partnership with many littoral-nations in the IOR. “Activating partnerships and expanding capabilities in the Indian Ocean are central to our quest for security,” says Indian Foreign Secretary. Indian bonhomie with Japan and Australia stands as the crux of New Delhi’s disposition to share warm ties with influential global actors. Australia, India, and Japan share the same US security umbrella: Checkmating the Beijing rise. These nations have translated their partnership in the Quad as a new feature of diplomacy to establish their authority in the Indo-Pacific region. Navies of India, the US, and Japan cooperate under the aegis of the trilateral Malabar Exercises, the most recent held in early November near Visakhapatnam in the Bay of Bengal and the Arabian Sea. This time, Australia was also part of the exercise. The Indian Fusion Centre-Indian Ocean Region (IFC-IOR), a naval information hub initiated by India, brings all Quad members under one roof to exchange vital maritime information in the IOR.  Australia and Japan recently posted liaison officers to the (IFC-IOR), where a US liaison officer has served since 2019.

India has a long aspiration to dominate the Bay of Bengal and prioritizes closer economic ties with South Asian states to balance China’s trade advantage. For its part, India is eager to visualize greater security cooperation among the littoral nations through BIMSTEC. The seven-member alliance among India, Bangladesh, Sri Lanka, Myanmar, Thailand, and Nepal aims to accelerate members’ economic growth and social progress among members across multiple sectors. BIMSTEC is a platform accentuating Indian vigor and its manifests the Indian overtures against China in the IOR.

Sharing common goals in the IOR, the US perceives India as a significant ally in the region and strongly supports its maritime expansion. The rapprochement between the two sides has resulted in the significant naval build-up of Indian forces in the IOR. The construction of military bases, modernized equipment and fleets, new maritime assets, and the expansion of security ties are all part of New Delhi’s push to assert itself as the region’s leader. By acquiring ‘blue water’ capabilities, the Indian Navy aspires to undertake its traditional role, like ensuring the coastal defense of the country, providing sea-based nuclear deterrence (entailing its assured second-strike capability), projecting the nation’s soft power beyond its shores, and maximizing the sphere of influence in the region. India aims to become a 200-ship navy in the next decade. In the defense budget for the year 2015-16, 16% share has been allocated to the Navy.

The Indo-US cooperation poses a considerable challenge to China’s ingress in the IOR, and Pakistan is no exception. Moreover, their cooperation undermines the peace prospects and endangers stability in the IOR. Recently, the G7 summit concluded with an objective focusing to challenge China’s rise. Joe Biden Administration maintained a firm line against China. Therefore, in the near future, pining hopes for preemption of the competition among authoritative nations in the IOR would be the pie in the sky.

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