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South Asia

India-Iran Relations and the U.S. Factor

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Authors: Muneeb Yousuf and Tariq Ahmad Lone*

In the wake of changing regional dynamics, India-Iran relations have occupied greater significance. The relations between India and Iran can be traced back to 1950 when both signed a Treaty of Friendship and Perpetual Peace. However, Iran’s joining of Baghdad pact in 1954 and the Cold War politics separated New Delhi and Tehran in converging their relations until 1990s. The Islamic revolution that swept through Iran in 1979, followed by hostage of U.S. diplomats, Iran-Iraq War and Tehran’s support for Hezbollah and Hamas among others increasingly led to a range of political and economic sanctions, thereby isolating Iran at the global level.

After the end of the Cold War which led to the breakdown of erstwhile Soviet Union a ‘new world order’ began to shape. The end of the Cold-War drastically transformed the bi-polarity of World Politics which had ensued for nearly four decades, setting the ground for a ‘new order’ that initially looked unipolar in character but with passage of time facilitated the rise of new global powers like China–– a multipolar one. After the end of the Cold War, Liberalization, Globalization and Privatization got momentum. India’s internal economic pressures and taking cue from the changing world, India also opened its economy. That does not signify that the new world only ushered benefits and opportunities, also new challenges that were exceedingly new to the modern states.

In the 1990s the interests of both India and Iran converged around energy, Central Asia and security mostly around Pakistan-Afghanistan region. The relations began to shape up in the early 1990s and India and Iran’s relations finally began its strides in post-2002 after both entered into a defense cooperation agreement. Those relations continued with fluctuations in between due to the recurrent hostile relations between the U.S. and Iran. Tehran’s strategic aim for developing nuclear weapons has come under strong criticism from the Trump regime leading to greater sanctions. Iran is also seen as a major regional threat by many Gulf neighbors including Israel. The larger political and economic sanctions that the Trump regime has imposed on Iran, has led pressure on New Delhi to curb diplomatic ties with Iran. While pressures from India’s allies hinder the cultivation of greater relations with Tehran, New Delhi has never completely curtailed engagement with the former.  As it could be argued that New Delhi is treading a fine path despite Tehran’s strong and persistent criticism from Washington. New Delhi’s policy of not parting ways with Tehran is guided in the rationale of geopolitical, geostrategic and geo-economic interests in the region for which Iran is an indispensable player.

Iran: The connecting Link for India’s Extended Neighborhood

Iran is not only geo-economically important for India per se but also places a connecting link between India and its extended neighborhood-gulf region and Central Asia. Iran’s Chabahar port is vital for India’s geopolitical interests not only in West Asia but also in Afghanistan and Central Asia that is part of India’s extended neighborhood. The importance of the port has significantly increased due to China’s bid to increase its influence in India’s immediate and extended neighbourhood through “Belt Road Initiative” and “cheque book” diplomacy and investment on ports like Gwadar. Keeping in view the significance of Chabahar port, New Delhi has invested huge money on the Chabahar port. In December 2018,in a concrete step towards India’s role in Chabahar Port expansion, India Ports Global Limited company opened its office in Chabahar and took over operations at the Shaheed Beheshti port at the Iranian city. The port will provide seal and connectivity to Afghanistan and Central Asia.

India and Iran have committed for the “prosperity through greater connectivity.” Moreover, the focus of the bilateral relations between Tehran and New Delhi is on bilateral cooperation in the fields of energy, trade, connectivity and promotion of people to people contacts. India and Iran along with Afghanistan have trilateral agreement on the development of Chabahar port. The trilateral agreement is motivated to promote connectivity and economic development of the region particularly Afghanistan. Iran has a critical role in India’s emergence as a great power. It is not crucial for securing India’s economic interests but also crucial to increase India’s influence in its extended neighbourhood in westwards which include gulf region and Central Asia. Iran is critical for India’s access to Central Asia and Afghanistan and can help in mitigating China’s growing influence among India’s neighbors.  In an endeavor to consolidate India’s presence in Afghanistan and Central Asia, Tehran plays a pivotal role.

Geo-economic Significance of Iran for India

Iran’s economy is considered as an economy with a large hydrocarbon sector. Iran’s has abundant energy resources with significant oil and natural gas reserves which are second in the world after Russia. India and Iran’s economic ties accelerated following the opening of India’s economy in the early 1990s. However, due to US sanctions on Iran in 2014, the trade has decreased dramatically to the lowest. As per the Exim Bank India Report, India’s imports from Iran are dominated by crude oil, accounting for 85.9 per cent of India’s total imports from Iran. In 2014, India was the second-largest market for Iran’s exports of crude oil…India has steadily cut imports from Iran as the sanctions from the US and other Western countries blocked payment channels and crippled shipping routes.India’s economic interests in Iran are mainly attached to energy and connectivity to Afghanistan and Central Asia.

The bilateral trade between India and Iran during 2017-18 was US Dollars 13.76 billion. The trade was in 2016-17 US dollars 12.89 billion. Bilateral trade has increased by 6.8% as compared to 2016-17. Indian exports increased by 11.4% and were US dollars 2.7 billion. The imports from Iran also increased by 5.8% and reached to US dollars 11.11 billion. As per Ministry of External Affairs Annual report 2019-20, the bilateral trade between the two reached to US dollars 17.3 billion as compared to US dollars 13.76 billion in 2017-18. This shows an increase of 23.8%. Moreover, Indian exports increased by 32.3% and accounted for US dollars 3.5 billion. Imports from Iran also increased by 21.8% and amounted to US dollars 13.5 billion.  India is one of the fastest growing economies in the world. There is a tremendous increase in the demand for energy in India. Energy is also vital input across all the sectors of the economy. India’s high growth in gross domestic product (GDP) results in a climb in the output of goods and services. As a result, the requirement of energy needs in the country is ever increasing. The energy consumption in India is fourth biggest after China, United States of America and Russia. India’s contribution is more than any other country to the estimated rise in worldwide energy demand. In 2040 demographic expansion makes India the world’s most populous state. As per the Global Investment & Business Center report 2015, “Oil demand increases by more than in any other country, approaching 10 million barrels per day (Mb/d) by 2040. India steps up its deployment of renewables, led by solar power, for which India becomes the world’s second-largest market. Three-quarters of Indian energy demand is met by fossil fuels, a share that has been rising as households gradually move away from the traditional use of solid biomass for cooking…India was the world’s third-largest importer of crude oil in 2014 but is also a major exporter of oil products.”

As per the India’s energy outlook report 2015, natural gas consumption triples to 175 cm (although, at 8% in 2040, it still plays a relatively limited role in the overall energy mix)…This mainstay of the rural energy economy is the primary cooking fuel for some 840 million people in India today; its use in traditional stoves is a major cause of indoor air pollution and premature death. Its gradual (albeit not complete) displacement by alternative fuels in our projections to 2040 is achieved thanks to rising incomes and supportive policies; these include one of the world’s largest cash transfer programs, which subsidizes the purchase of LPG cylinders via payments to individual bank accounts, rather than via an intervention affecting end-user prices…India’s urbanization is a key driver of energy trends: an additional 315 million people are expected to live in India’s cities by 2040. This transition has wide ranging effects on energy use, accelerating the switch to modern fuels, the rise in the appliance and vehicle ownership and pushing up demand for construction materials.

The challenge for India will be to set up long term supplies at reasonable prices as anchor gas customers-fertilizer and power industries- may not be able to pay market determined prices.Iran, the repository of huge gas reserves, can ensure increasing India’s LPG demand. To meet the growing demand for energy and sustain the growth rate of economy India needs to plan the sources of the energy supply. Iran is one of the countries that can meet India’s increasing demand for energy resources like crude oil and natural gas. Iran is not only in proximity with India, but India has geopolitical and geostrategic significance for India.

Geopolitical and Geostrategic Significance of Iran for India

India and China are emerging simultaneously as great powers. Consequently, their interests are conflicting at various levels in their immediate neighborhood and Indian Ocean region- strategically and geopolitically vital to global powers. Both want their influence in Iran and around the region. Both pursue the connectivity projects to gain a strong foothold in the immediate and extended neighborhood. China is focusing on the revival of the ancient silk route through its belt road initiative. India, on the other hand, is pursuing connectivity projects like Chabahar port and the International North-South Transport Corridor (INSTC). These efforts are motivated to connect Central Asia and Afghanistan. Both these regions are gaining significance since the 1991 development in the international order. The changing world order has led to the emergence of important geographical locations and Central Asia is one among them, that emerged after the collapse of the erstwhile Soviet Union 1991. On the other hand, Afghanistan, geo-strategically very vital, became the important country particularly after the 9/11 attacks in the USA. The region was the part of the “Great Game” between Russia and British empires in the 19th century. The region came into limelight again after the conspicuous withdrawal of the USA from Afghanistan. As it is expected to emerge as a power vacuum in Afghanistan for which already significant movements have begun on the part of great powers like China, Russia, Pakistan. India is more concerned about the post-US withdrawal from Afghanistan due to the larger national security attached to the region. India lacks direct connectivity with Afghanistan and Central Asia. Therefore, Iran becomes vital for India to secure its interests in Afghanistan and Central Asia. Moreover, to reduce Pakistan’s influence in Afghanistan, combat extremist groups and contain strategic encirclement by China, Iran can play a vital role. Despite India has all these vital interests attached to Iran, external pressures and internal challenges have constrained India’s relations with Tehran. New Delhi faces a challenge of chasing a side with USA or Iran in times of bitter hostility between the two.

Iran-India cooperation is critical for their mutual interests in a transitional world. However, their relations are sometimes shadowed by the Indo-US proximity. US-India proximity is motivated primarily to protect US interests in India and India’s neighbourhood.  The conspicuous USA withdrawal from Afghanistan after the Doha Deal between USA and Afghanistan Taliban, there is an apprehension of Civil war and instability in Afghanistan. The US wants India’s presence in Kabul to fight terrorism and to strengthen the civilian government. However, this is not possible without the proper access of India to Afghanistan. India has access to Afghanistan via Pakistan and Iran. The hostile relations with Pakistan will not allow it to reach Pakistan. But Iran is critical in India’s presence and influence in Afghanistan. That is why the USA waive sanctions on India’s investment on Chabahar. Moreover, waiver was obtained from the US which enabled the continued imports of Iranian oil and separate mechanisms were evolved for payments and marine insurance.”

India seems reluctant to work with Iran after the US withdrawal from the nuclear deal. India not only stopped purchasing Iranian oil in May 2019 but also reduced budget on the investment on Chabahar. Soltaninejad, Assistant professor in, the University of Tehran argues that “Tehran is convinced that India cannot be the partner it needs to counter US sanctions”. India owes its rising power status, in part, to its increasingly close relationship with the United States. No matter how valuable Iran is for India, New Delhi would not endanger its relations with Washington for the sake of preserving its friendship with Tehran. Soltaninejad further argued that “although Iranians are well aware that Beijing would not sacrifice its relations with the United States for its partnership with Iran, they still believe that China will support Iran more strongly than India”. China’s continuing trade with Iran and the purchase of Iranian oil is proof of that. From an Iranian perspective, China’s rise is quite different from that of India’s. India’s economic and military development contributes more to preserving the pro-US international status quo, while China’s rise is seen to come at the cost of the United States’ global position and points towards a balanced global power distribution. However, Iran is well aware of the risks of its proximity to China and does not want to be over-dependent on China.

Conclusion

Ever since Donald Trump has come to power in Washington, the so-called liberal international order has witnessed divergence from the key path. Some analysts have better called it a ‘fuzzy order’. As the New Delhi strives to increase its political influence in its immediate neighborhood and also shape up ‘the emerging regional structures’, it becomes essential for New Delhi to tread a fine path. A multilateral approach in its foreign policy will remain key for New Delhi’s road to major power. India has been caught in a quagmire of balancing the relations between both Washington and Tehran and it cannot afford to embrace one at the cost of others. And here, balancing its relations both with Washington and Tehran with due care for its interests will determine India’s political trajectory. In the level of analysis framework, good relations with Tehran will not only enfeeble Pakistan’s greater strategic depth in Afghanistan but will also provide leverage to New Delhi in deciding the things in Kabul–– a push for a say in the emerging regional situation. On the other hand, a good relationship with Washington will provide good incentives and a vital push for New Delhi to be an important player of the current order. The end of the “Cold War” has certainly ushered a new political order where states need to engage multilaterally and realizing this situation, New Delhi is sending the political message to both Washington and Tehran of cultivating better relations with both despite a greater tension between the two.

*Tariq Ahmad Lone is a Doctoral Candidate at Academy of International Studies, New Delhi.

Muneeb Yousuf is a Doctoral Candidate at Academy of International Studies, New Delhi. He tweets at @MuneebYousuf6

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South Asia

The China Pakistan Economic Corridor: Justifications and Refutations

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This commentary discusses about the China Pakistan Economic Corridor (CPEC) where Chinese and Pakistani perspectives on CPEC have been highlighted along with India’s strong refutation of those perspectives or justifications. The commentary mentions that while both China and Pakistan have underlined the economic-developmental aspects of CPEC, there could be an interesting case for empathising with India’s argument that CPEC has unmistakable strategic-security aspects that has certain consequences for India’s national interests which need to be seen.

Introduction

The China Pakistan Economic Corridor is an initiative under China’s Belt and Road initiative which aims at providing connectivity, infrastructure, and promotion of people to people exchanges. The BRI has been seen as a tool for promoting the Chinese Dream, which had a purpose of promoting free trade, economic cooperation,mutual benefitin member countries. China through the BRI, is trying to ensure regional stability through economic growth eventually trying to make its presence felt in the region.

This has been seen as a project which could ensure job opportunities, inclusivity and also a connectivity to the People’s Republic of China.The complete distance of this project is 3218 km. China is investing USD $64 billion in this project.[i]CPEC is useful for Pakistan, where many rail projects, power plants and special economic zones have been promised by China therefore making it attractive to foreign investments.

As part of this initiative, $11 billion was initially invested on transport infrastructure and a fibre optics link from Kashgar in Xinjiang to Gwadar in Balochistanis being established plus $ 33 billion was to be spent on power plants supplying solar, coal as well as wind energy.[ii] Also, ten Special Economic Zones have also been included in this project where they are being constructed in Mirpur, Muqpandass both situated in PoK.

China needs another base after Djibouti, where Gwadar has potential due to its strategic geographical location. This could provide an easier alternative to the Malacca Strait , which could be seen as a strategic chokepoint where two thirds of global oil trade passes through and Gwadar is a strategic point for China to exert itself in the Indian Ocean.

CPEC could be seen as an opportunity with respect to Pakistan’s high debts, weakening economy, state instability. It could prove beneficial even for Balochistan which is prone to many separatist movements plus also including it for development since it is left out from the rest of the region. Here, this article discusses about the Pakistani views on CPEC and how does it benefit Pakistan with respect to territorial disputes such as Kashmir and Balochistan. Will this project be useful at a time bad reputation which Pakistan has with respect to terrorism?

Rationale Of CPEC From Pakistan and China’s Points Of View

This initiative is not the first time Pakistan has approached China for any assistance. A common threat brings countries together in order to tackle a rising threat from any power. In Pakistan’s perception, it always had historical political and strategic issues with India since independence with respect to the Kashmir problem which has caused a deadlock between India and Pakistan ever since, where the two countries witnessed three wars in1965,1971and 1999.

The CPEC passes through the disputed areas of Mirpur, Gilgit and Baltistan where Pakistan and India are disputing for territorial claims.Immediately after the 1962 India-China war, Pakistan illegally gave away Shaksgam Valley to China as a part of a friendship agreement. Ceding of Shaksgam valley to China in a way led to increased involvement in the India-Pakistan dispute on Kashmir by providing Pakistan defence and economic assistance.

China believed that the Kashmiri people should have right to self -determination and make a wise choice, whether to join India or Pakistan. Slowly, along with improving ties with India, China started keeping a neutral approach on this issue with respect to India’s growing economic strength as well as its ties improving with the United States.China perhaps realised that it could not afford to lose out on India even though it has Pakistan’s strategic value in mind. However, the advent of CPEC has forced the veneer of formal neutrality to drop off.

CPEC could also be useful in providing vocational training skill development for students staying in the areas which are covered and need such basic facilities. The Chinese government is providing scholarships for the students staying in the areas of GilgitBaltistan, whose fate is still uncertain about which country to join.[iii]

Pakistan’s Growing Economic Interdependence on China

Historically, China-Pakistan relationship has been driven by strategic-security considerations. Except for defence trade, basically Chinese arms export to Pakistan, economic aspects of the ties were really weak. However, in last one decade, and particularly with CPEC, their relations have developed significantly. Seeing China as a strategic threat, US is counting on India for security and economic initiatives.

US ever since 2008, is seeing a decline in its economy which leads China having an edge afterwards. The two countries are in the middle of a trade war which has led to GDP growth fall in both the countries therefore impacting manufacturing.Assistance was stopped being given to Pakistan under the Donald Trump regime and reduction in US FDI inflows since 2011have led to estrangement between two countries.

A drift between US and Pakistan is making Pakistan more dependent on China for economic aid. Here,CPEC aims at bringingeconomic development along with cultural and people to people connections are bringing two powers closer. CPEC aims at building inclusivity in the country where radicalism, poverty, unemployment is a key concern. According to Xinhua, 75,000 small jobs have been created in the country along with 100 small and medium enterprises being involved. This project aimed at creating 2.3 million jobs between 2015 and 2030.[iv]

CPEC Projects

The areas around GilgitBaltistan are rich in resources such as uranium, silver plus it also houses the K2 and Nanga Parbat peaks.[v] Important hydropower projects such as dams are coming up in this area through which important rivers such as Jhelum pass some examples of energy projects include the Kohala hydropower project, which produces about 1100 MW of power and the Phandar hydropower station, producing 80 MW of power. Other hydropower plant projects are also being constructed in Bunji, located on Indus river,will provide 7100 MW of power along with the Diamer- Basha dam, whose estimated cost is about US$12-14 billion also has a capacity of providing 4500 megawatt of power.[vi]

Important railway connections are also being put into place under this initiative. The Karachi Peshawar railway line is also coming where the project is expected to be complete by 2022. The railway line covers 1872 km and the maximum operating speed on this railway line could be 160 km/hr. Railway tracks would be upgraded,new signalling systems will be setup and new safety provisions will be provided for passengers.[vii]

The Karakorum highway is one of the highest road infrastructure projects which are coming up, situated at height of 4714 m. This highway starts from HasanAbdal and goes till Kashgar, in Xinjiang Autonomous region, where the distance covered is 1300 km. This highway will cover HasanAbdal, Thakot, Havelian, Raikot, Gilgit and Skardu.[viii] The highway construction was difficult due to high altitude and terrain. Its redevelopment and up gradation is an essential portion in context to this initiative.Other projects include development of an oil refinery and a new airport in Gwadar, also the Multan Sukkur motorwaywhich is under construction is an important part of the Karachi Peshawar motorway covers 392 km and this aims at reducing the distance between Multan and Sukkur by 3 hrs. This project was inaugurated in November,2019.[ix]

These projects as a part of the CPEC would provide easy connectivity between two countries and also be useful in the infrastructure development in Pakistan. The initiative could be useful for Pakistan’s power supply and economic growth. 

India’s Refutation

Indian hegemony, in Pakistan’s perception, can be seen as a common problem for both China and Pakistan, as it is said that a common threat, a common goal or interest could lead to countries getting   together and forming a balance against a threat from a rising power that could coerce weaker countries in the near future. This is the case with CPEC being seen as a tool to counter India’s rise and influence on the Kashmir issue.

This project has been based on geopolitical considerations rather than strategic interests since Gwadar is prone to many pro-independence movements and Kashgar being a question due to Uighurs issue which the Human Rights Watch is questioning with respect to human rights violations, radicalism plus also the Kashmir issue. Incidentally, ever since Article 370 was abolished in August 2019, China feels that by including the Aksai Chin under Indian domain could be a contentious issue, which China took over in 1962. The same also went for Gilgit and Baltistan where the CPEC flows. According to a press statement China is in view about India posing a challenge to its territorial sovereignty and interests.[x] That’s why efforts are being made to speed up this project keeping India under check with respect to its claim on Kashmir.

Thus, there are genuine case of India reading strategic implications for itself. As per press statements of MEA, India had shown reservations with respect to joining BRI where many reasons were stated. Some of them included environmental protection and project costs. India prioritises its sovereignty and territorial integrity at the first place.[xi] Another statement states that connectivity is based on important factors which include rule of law, transparency.[xii]

Finally, one would point out that it is not only India that has raised concerns about CPEC. Countries such as US are also flagging concerns about Chinese influence in Pakistan with respect to any infrastructure or other projects since these initiatives are being seen as a tool being used by China in order to bring smaller countries into a debt trap.[xiii]

In case this project is implemented at a rapid pace, then the two all -weather partners can tackle secessionist movements taking place in Balochistan. Due to this about 10,000 troops have been deployed throughout the corridor since Chinese firms are slowly getting wary about these movements which they feel are against the national interests of both countries, creating further divide in the near future.

CPEC can only move at a proper pace for Pakistan if there is a stable administrative body and organising proper methods to tackle terrorism and also by putting India on loop while organising these projects instead of using force or coercion. Negotiations will play an important role with respect to achieving national interests. Putting projects on disputed territory could be seen as route to war instead of negotiating and proper demarcation of boundaries.

Economic development has played an essential role with respect to countries indirectly taking over territories from competitors instead of using coercive measures directly which will lead to further war mongering. Economic development has been seen as a tool of soft power, where through giving employment, loans and infrastructure strong countries set preferences of smaller countries. For India, these projects are seen as a power game where two countries are trying to counter the fast growing economy by using economic development in the areas which are disputed with respect to territorial claims. Actually economic infrastructure is not meant for catering to economic interests but for fulfilling geopolitical interests! Therefore, Pakistan will benefit from this project.

Criticism

The project has witnessed a lot of doubts whether it is ethnic turmoil, corruption, lack of transparency, improper terrain and an increasing debt which Pakistan has. There has been doubts in the minds of the Baloch , who feel that the Punjabis are the main beneficiaries as far as job opportunities go and there have been many protests in opposition of infrastructure projects  because the areas in Balochistanare rich in resources such as natural gas copper  and gold, many  residents in those areas feel that human development will get impacted.Balochistan is a needy region which has a long lasting demand for drinking water, electricity, roads, proper healthcare and education facilities. 2400 families have been displaced in Balochistan due to these projects, so there could be a chance of rise in Baloch insurgency if the residents in the region are not properly consulted.[xiv]

Conclusion

The CPEC has always been in India’s mind because of threat to national sovereignty and strategy. China and Pakistan both have a common threat which leads them to be together. The US is becoming dependant on countries such as India, Japan because there is a slow decline in its role in the global scenario. The US has its own reservations with China whether it’s the trade war or South China Sea Dispute so there is a reason for US to be wary of China to contain smaller countries in a debt trap, as suggested by Alice Wells ,in November 2019.[xv]

As far as India goes, it is still particular about joining BRI behind which the CPEC is a major reason when its national interests, security, territorial sovereignty is at stake. China in order to pressurise New Delhi for looking into its national interests is counting on Pakistan for support through this project since connectivity and infrastructure development will prove useful for China to get access to Pakistani soil and at later stages in the name of providing economic development for Pakistan, it could create a sense of dependency on China. Construction of dams, hydropower projects in PoK could in the near future lead to easy divergence in river flows taking place.

India’s tension is Pakistan’s gain which means that if China objects any move which is in India’s interest and China tries to bring Pakistan in whenever there is a common concern with respect to any development in India , whether it’s the NSG or the Maulana Masood Azhar issue. Pakistan will always be an all weather ally of China.

Endnotes


[i]S. A.Zaidi, “A Road Through Pakistan, and What This Means for India”,Strategic Analysis Journal, 43(3), 2019,p. 218.

[ii] Ibid

[iii] Muhammad Khurshid Khan, “Balancing Relations With China and the United States In The Backdrop Of The CPEC” ,The Korean Journals Of Defence Analysis, 30(4), December 2018, pp. 577-590.

[iv]Liu Tian, “How One US Official Got It Wrong on China-Pakistan Economic Cooperation”, Xinhua, November 23,2019, at http://www.xinhuanet.com/english/2019-11/23/c_138578254.htm
(Accessed November 27, 2019).

[vi] D Jorgic,“Pakistan Eyes 2018 Start for China-funded Mega Dam Opposed India”, Reuters, June 13, 2017, at https://in.reuters.com/article/us-china-silkroad-pakistan-dam/pakistan-eyes-2018-start-for-china-funded-mega-dam-opposed-by-india-idINKBN1941P9 (Accessed November 29,2019).

[vii] “China Pakistan Economic Corridor: Expansion And Reconstruction Of Existing Line ML-1,2019,CPEC Official Website, at http://cpec.gov.pk/project-details/30 (Accessed November 28, 2019).

[viii] “Lisa Heilscher ,Karakorum Highway, Belt and Road Initiative”,2018 , https://www.beltroad-initiative.com/karakoram-highway/ (Accessed November 28, 2019).

[ix] Give full name (T. N. S.) Correspondent, “Light Traffic can Use M 5”, Dawn, November 5,2019, at
https://www.dawn.com/news/1515372 (Accessed November 28, 2019).

[x]“Foreign Ministry Spokesperson Gen Shuang’s Regular Press Conference, Ministry Of Foreign Affairs of the PRC Website, October 31,2019, athttps://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2511_665403/t1712371.shtml (Accessed November 29,2019).

[xi]“Official Spokesperson’s Response to a Query on Participation of India in OBOR/BRI Forum”,Ministry Of External Affairs (MEA), May 13,2017,at https://mea.gov.in/media-briefings.htm?dtl/28463/Official+Spokespersons+response+to+a+query+on+participation+of+India+in+OBORBRI+Forum, (Accessed January 3, 2020).
[xii]“Official Spokesperson’s Response to a Query on Media Reports Regarding Possible Cooperation with China on OBOR/BRI”, MEA, April 5 2018,https://www.mea.gov.in/media-briefings.htm?dtl/29768/Official+Spokespersons+response+to+a+query+on+media+reports+regarding+possible+cooperation+with+China+on+OBORBRI (Accessed January 3,2020).

[xiii] Liu Tian, November 2019

[xiv]ZahidShahab Ahmed, “ Impact of the China Pakistan Economic Corridor On Nation Building “, Journal Of Contemporary China, November 5, 2018, pp. 409-413

[xv] Liu Tian , November 2019

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The Dragon Elephant Tango: Indo-China relations under Modi

Ishita Gupta

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India and China have a demonstrated history of border tension since Independence, once even leading to war. Yet, a simultaneous effort to establish “Hindi Chini Bhai Bhai” has persisted parallelly. Every subsequent government that has come to power has had a strategy of establishing ‘mutual trust’ and a ‘shared vision’ with their Chinese counterpart. The diplomatic efforts almost turned into a blossoming ‘friendship’ under Prime Minister Manmohan Singh.

Both countries have been carving out their space in the international arena and have commanded global attention. In their mission to establish a global footing, the neighbours have recognised each other’s importance. In 2010, after a bilateral talk, they even released a joint statement saying “there is enough space in the world for both China and India to grow”. China started displaying an interest in India since the beginning of the 21st century. India too, recognised China as a potential strategic partner, owing to its economy and geographical proximity.

Efforts from both sides since 2004 led to a chain of favourable events that helped cultivate the strategic relationship. The BRICS conference held at New Delhi in 2012, saw the two countries unite to condemn US action in Libya and Syria and asserting the importance of respecting the sovereignty and territorial integrity of all states. By the next BRICS meeting in Durban in 2013, the countries had grown significantly closer, and border disputes were pretty much put on the back burner.

However, since the shift in leadership to the NDA alliance there has been a visible deterioration in the trajectory of the relationship. Gradually leading to the current heightened tension in the Galwan Valley region.

The retraction of evolving relations under the Modi regime can be attributed to three primary changes in India’s foreign and domestic policy:

1. India’s shift towards joining the US camp

The UPA government had set the stage for a grand visit by Xi Jinping in September 2014 to be carried forward by a newly anointed Prime Minister Modi. However, the Modi government treated the visit “more as a bilateral mending of fences… rather than as the culmination of a long and patiently sought rapprochement.”. Additionally, Xi Jinping’s visit was preceded by a visit to Washington by Modi and followed by a surprise visit by President Obama as the chief guest for Republic day celebrations in 2015.

The Obama visit culminated in the signing of the ‘U.S.–India Joint Strategic Vision for the Asia-Pacific and Indian Ocean Region’. This demonstrated move to the US camp sent a clear signal to China against any kind of strategic relationship with India.

In 2016, under intense tension between USA-China in the South China sea, the Modi government sent four warships with the US-Japan task force that were docked in Vietnam and Philippines ports for over two months. This was clearly seen as “a blatant assertion of India’s freedom of navigation (under American protection of course) in the South China Sea.”

Furthermore, China is concerned about India’s participation in the Quad, trilateral, and military exercises such as the Malabar naval drills which China considers a quasi alliance.

More recently, Trump’s visit to India in February’20 and the Indo-US ‘Comprehensive Global Strategic Partnership’ in the support of free navigation in the Indo-Pacific, all contributed towards a retaliation from China.

2. India’s refusal to join the Belt and Road Initiative (BRI)

India has expressed concern against joining the BRI, as it breaches its territorial integrity. A portion of the BRI passes through POK- which India considers an illegal occupation by Pakistan -directly threatening India’s sovereignty. Additionally, India is wary of China’s debt-trap diplomacy that offers favourable loans, indebting the member states to China.

The primary concern, however, is that the BRI expands China’s unilateral power, threatening India’s position as an alternate power in the Indo-Pacific region.

This has invited retaliation from China through repeated vetoing of India’s membership into the Nuclear Suppliers Group and obstruction of permanent membership into the UN security council.

The 2018 Doklam standoff was a push back from India against China’s construction of a road in the disputed region with Bhutan, whose claim India supports.

3. India’s reforms in Ladakh

Another significant transgression by India, in the eyes of China, are its reforms in Ladakh and Jammu Kashmir. Part of the new territory of Ladakh contains land that Pakistan gave to China in the agreement in 1963. China made their objection to the revocation of Article 370 and 35A clear, in August last year by issuing a statement that asked India to ‘exercise restraint’ and calling out their ‘unilateral’ attempt to change the status quo in Ladakh. India dismissed these accusations by calling them ‘misplaced’ and having no bearing on the LAC or the external boundaries of India. However, soon in September, PLA troops started blocking Indian patrol in the region.

In the Chennai Connect informal summit in October, President Xi Jinping suggested an India-China-Pakistan trilateral dialogue “free from the influence of third parties”, but Modi ignored the suggestion.

Recent Obstacles

Indo-Chinese border clashes have occurred before, but the difference this time has been the changed context in domestic as well as international circumstances.

China has turned more assertive in the face of international backlash for its handling of the virus. They have implemented stricter security laws in Hong Kong despite international condemnation, cautioned Taiwan against their independence and have made assertions in the South China Sea. China has been subjected to a supply chain reshuffling due to US tariffs on Chinese products and an unofficial China-boycott leading to overproduction and fall in demand.

India on the other hand has been dealing with a deteriorating coronavirus outbreak as well as a severe economic downfall. India’s relations with its neighbours are also at a decline, Bangladesh has not been pleased with the NRC policy implementation, Bhutan is not eager to join the BBIN, ties with Nepal have hit a rough patch since the blockade in 2016 and “with Rajapaksha in power, Sri Lanka will have no love lost for India”.

An anti-climax?

The ‘Dragon Elephant Tango’ has reached a heightened climax with the growing hostilities in the Galwan Valley. The rising US-China tension has led China to diversify its trade away from the US. In this regard, India serves as a perfect market. However, the growing Indo-US ties have triggered China against India. India is stuck in a bind regarding the Huawei 5G investment, as it keeps prices down but also does not want to enter into US-China trade tensions. China’s assertions in the Galwan Valley could be China’s attempt to pull India away from playing a central role in US-Japan ties. Whatever the case, it is clear that both countries have more to lose than gain from an escalation of hostilities. Instead, there is ample scope for a quid pro quo from either side.

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South Asia

Expanding Dimensions of India’s ‘Neighbourhood First’ policy

Ganesh Puthur

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“You can Change Friends, but not neighbours”-Atal Bihari Vajpyee, Former Prime Minister of India

With the changing dynamics of international politics and global equations metamorphosing from bi-polar (post the collapse of Soviet Union) to a Multi-polar world, India has been playing a vital role in the region. India’s foreign policy was always non-muscular, non-interventionist and un-exploitative. But in the altered scenario India is facing stiff competition from China over the superiority in the region and growing Islamic fundamentalism affecting the entire South Asian nations. The genuine questions that arise are what should be India’s foreign policy towards her immediate neighbours and how to tame the Pakistan-China axis?

India and the region

National Democratic Alliance (NDA) government’s commitment towards India’s immediate neighbourhood was visible when the leaders of all SAARC nations were invited for the swearing-in ceremony of Narendra Modi as India’s Prime Minister in 2014. Immediately after assuming the office PM Modi visited Bhutan in his maiden foreign visit and had also travelled to Nepal on multiple occasions. He even stopped at Pakistan and met the then Prime Minister Nawaz Sherif as a good will gesture to enhance peace and mutual cooperation in the region. The government had also committed itself to various projects in Afghanistan, Sri Lanka, Myanmar, Iran and Maldives. Friendly summits were also organised along with China to strengthen diplomatic relations between the hostile neighbours.

India’s interest in the region traces back to the Nehruvian days. In the days of cold war, India’s position of Non-Alignment was aimed at stopping any form of Colonisation. Foreseeing a possible conflict with China even a ‘Panchsheel’ (The five principles for peaceful co-existence) doctrine was mutually agreed but the expansionist tendencies of China had cost India 1962 war and the Aksai-Chin territory. India had fought 4 wars with Pakistan in the years 1948, 1965, 1971 and 1998, even though India could defeat Pakistan in all successive wars this constant conflicts reflect the unstable relationship between the both nations. India’s involvement in the 1971 war eventually resulted in the formation of Bangladesh but the rising Islamic fundamentalism has created anti-India sentiments among the common people.

For a greater economic and cultural cooperation South Asian Association of Regional Cooperation (SAARC) was founded in 1985 comprising of India’s immediate neighbours. But the organisation failed to achieve its target since the two major powers within SAARC i.e. India and Pakistan couldn’t come to an agreement on almost all the occasions. This jeopardizing of dialogue process has pushed India to further strengthen another initiative called Bay of Bengal Initiative for Multi Sectorial Economic and Technical Cooperation (BIMSTEC) virtually excluding Pakistan. The advantage of India in the region is the historical and cultural ties between India and these nations.

India’s Neighbourhood worries

China had always been a threat to India’s geo-political interest in the region. With a booming economy China is able to roll out financial assistance and ambitious projects to smaller economies. The Belt Road Initiative (BRI) envisioned by China aims at connecting all the nations of the region by road. The peripheries of this project including the China-Pakistan Economic Corridor poses challenge to India since it passes through the Pakistan Occupied Kashmir (POK). China also invested heavily in Nepal, India’s longest standing ally. It needs to be noted that the agenda behind issuing large scale grants to poorer counties is ‘debt trap’, a neo-colonising strategy of China to which these counties fall prey to.

China is also posing security challenge to India by forming a strategy called ‘String of Pearls’ in the Indian Ocean Region (IOR) extending from the Chinese mainland to Port Sudan in Horn of Africa. India enjoys a special benefit due to its 7,500 KM long coastline. Now, the Chinese wants to encircle India with its naval bases and ports operated by them in friendly countries, examples being the Gwadar port in Pakistan and Hambantoda port in Sri Lanka. The Chinese standoffs with the Indian army at Doklam, Ladakh and their unwillingness to recognise Arunachal Pradesh as a part of India are bone of contention between India and China.

The rise of radical Islam and the anti-India rhetoric associated with it is yet another major worry for India. With the possibility of Afghanistan falling to the hands of Taliban, the fear looms large. Pakistan has been using Jihad as a proxy weapon against India. The rise of Wahabbian ideas are even evident in Bangladesh as a result even several of the army men are radicalised. The killing of an Indian army man by Bangladeshi border security force proves this argument. Infusing of large amount of money and speedy commissioning of projects are also in China’s advantage.

Modi government’s Foreign Policy

Multiple domestic factors influence any governments’ international policy. Some of those factors are political stability, economic growth, technological advancement and the global political scenario. With the NDA getting simple majority of its own in 2014 and 2019 Lok Sabha elections India’s global positioning has been constant and  unaltered. The government also appointed S Jaishankar, a veteran diplomat as the External Affairs Minister to further professionalise India’s foreign approach.

Presently India’s foreign policy is crafted by the establishment keeping in mind the presence of hostile neighbours, Pakistan and China. It is therefore important to establish strong relation with the extended neighbours excluding the two.  India adopted new strategies to resist the looming threat from China in the region.  Modi government’s doctrine of SAGAR (Security and Growth for all in the Region) is to counter the Chinese strategy of dominating IOR with ‘String of Pearls’. India is also releasing financial assistance to its neighbours for development projects as Line of Credit (LoC) through Export-Import (EXIM) Bank which facilitates India’s export and import activities.

Terrorism and religious extremism have been key challenges in the South Asian region. Afghanistan is worst hit with these crises. Due to its geographical location as gateway to Central Asia India has both strategic and economic interest in the nation. India financed and built a new parliament building for Afghanistan which was inaugurated by PM Modi in 2015. In 2016 he also inaugurated Afghanistan – India Friendship dam in the Herat province underlying India’s commitment to rebuilt the war torn nation. For the other projects India has provided a financial assistance of $ 3 billion over the years. India had also partnered with Iran to counter China’s access to Gwadar port of Pakistan. India pledged $85 million for the development of Chabahar port and a three way memorandum of understanding (MoU) was signed between India- Afghanistan – Iran worth $21 billion Chabahar – Hajigak corridor.

Myanmar has a key part in NDA government’s ‘Act east’ policy since the nation is India’s ‘land bridge’ to south east nations. During the 5 year tenure of NDA 1 a sum of Rs 1,300 crore was allotted for Myanmar for various projects. India is also wary of the proposed China-Myanmar Economic Corridor as part of BRI. NDA 1 extended 2 LOCs worth $6.5 billion to Bangladesh which goes into community level development projects, construction of educational institutions and so on. China has been trying to woo Nepal with multiple infrastructural projects away from India. Being an inevitable partner India spends on an average Rs 330 crore annually for various projects in Nepal. The government was quick to grand $1 billion LOC following the earthquake in 2015. India also highlights the cultural similarities of Nepal and India. Bhutan is a key partner of India and as a buffer state to China has its strategic importance. India has been developing hydropower plants in Bhutan and had also donated $4.7 billion dollar from 2000-2017 as aid for Bhutan. With the Change of government in Maldives and declaration of their ‘India first policy’ the relationship is projected to improve substantially. NDA 1 had also given a financial assistance of $1.4 in its tenure. India’s relationship with Sri Lanka had been in shady lines due to the latter’s pro-China tilt. But the geographical location of Sri Lanka is significant for India’s security and economic interests.

Conclusion

India was always been projected as a soft power in the global political discourse. But post 2014 it marks a transition of India to a hard power determined to position itself as an alternative to China. India is a key strategic partner of United States and its allies in the Asia-pacific region. It is also important from the part of India that the neighbourhood soil is not used for anti- India activities. To prevent any such adventurism India has done cross border military actions in both Pakistan and Myanmar to target terror camps. To counter China’s influence India should boost its own economy and strengthen its military might. China has been trying to appropriate the Buddhist legacy through propaganda. Buddha, Bollywood and Cricket can be effectively used for people to people connection in South Asia which eventually fosters diplomatic relations. With the government’s target of making India a $5 Trillion economy and reconstructing institutions to make it more competitive, India has the potential to ouster Chinese influence in the region.

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