This article was first published in The Economic Times Magazine
The narrative of a widening strategic gap between New Delhi and Moscow has been prevalent for some time now. Even within the strategic communities of Russia and India, there is an ongoing assessment of the importance of this bilateral engagement. Ahead of the upcoming India-Russia summit, this article delves into what is working for the relationship between the two nations, and what needs to be worked on.
It would be fair to say that the essential glue keeping the two together is strategic legacy. It is supplemented by a contemporary strand of political convergence in a world where both South Block and the Kremlin are actors, but also being acted upon.
One of India’s primary objectives in the coming decades is to prevent China’s hegemony in Asia. A multipolar world and a multipolar Asia are in its interest. Russia will strongly endorse this, and, for differing reasons, seek it. In its calculus, it would position the US as the principal protagonist to thwart. The Russians would not want to curtail China if that ends up enabling US influence. Therefore, there is a big picture convergence on a multipolar world order, even as India and Russia differ on relative roles of the poles shaping this order.
As of 2020, Russian weapons systems and equipment accounted for about 60 per cent of the inventory of the Indian armed forces.
This could change dramatically if Russia were to reach the conclusion that it is happy to sit in the court of the Emperor in Beijing as a junior partner. India sees this as unlikely. It hopes for a more independent Russian worldview that would not hesitate to differ with others, including China, in defence of its own interests. New Delhi is, therefore, continuing to invest substantially in this relationship, and in a number of areas.
The first and biggest is defence. As of 2020, Russian weapons systems and equipment accounted for about 60 per cent of the inventory of the Indian armed forces. While India is determinedly diversifying sourcing of military hardware, Russia remains a strong legacy player. Much of this is driven by spares and component upgrades. However, there have also been significant new ventures. These include the S-400 missile contract (on track for first deliveries this year); manufacture and co-production of four Project 1135.6 Frigates; manufacture of the world’s most advanced assault rifle – the AK-203 – under the ‘Make in India’ initiative; and additional deliveries of T-90s, Sukhoi-30 MKI, MiG-29, MANGO ammunition and VSHORAD systems. Russia is more involved with the ‘Make in India’ initiative in defence equipment than any other country.
Simultaneously, exercises have also increased in numbers and sophistication. As he demitted office as Indian Ambassador in Russia, DB Venkatesh Varma pointed out that the two nations were exploring different formats – including mobilisation of forces and their transportation across long distances, impact of drone technology on modern warfare, and impact of cyber on future of conflict. The landscape for doctrinal coordination and understanding is ever expanding.
India aims to increase import of oil from Russia, currently 1 per cent of all imports, to 4 or 5 per cent in the next five years.
The second area of convergence is energy. This includes not only hydrocarbons (oil and gas), but also nuclear. While India does import gas from Russia, a rapid increase is on the cards. If successful, the Vostok negotiations will bring India into one of the world’s biggest energy projects. India aims to increase import of oil from Russia, currently 1 per cent of all imports, to 4 or 5 per cent in the next five years. Another avenue is petrochemicals, where a Russian investment in the Paradip cracker plant and an Indian investment in Arctic LNG-2 are being explored.
With India announcing its net zero target date, the need to transition to greener energy sources has become imperative. A new Gas Task Force will bring in Russia as a major partner, including in the field of hydrogen.
The third area of mutual interest is high-technology. A proposal to establish a Joint Commission on Science and Technology Cooperation is being explored. It would encompass hi-tech areas like quantum, nanotechnology, cyber, AI, robotics, space and bio-technology. Pharmaceuticals, digital finance, chemicals and ceramics are all potential economic drivers of the relationship. Each of these is at the core of the fourth industrial revolution.
The fourth area of significance is food security. India leasing land in the Russian Far East, and cultivating it with Indian labour, offers a tantalising prospect. Russia is going through a demographic crisis and has notable human resources deficits. China has leased thousands of hectares of land in the Russian Far East. This is cultivated by Chinese farmers, whose produce is partially sold in the Russian domestic market and partially exported to China.
A proposal to establish a Joint Commission on Science and Technology Cooperation is being explored. It would encompass hi-tech areas like quantum, nanotechnology, cyber, AI, robotics, space and bio-technology.
A similar strategy can be followed by India. The government could negotiate an enabling arrangement with Russia but leave it to the private sector to execute. The Chennai-Vladivostok maritime connectivity corridor enhances scope for such cooperation.
This strategy would be a genuine win-win. India would contribute to its food security by reducing load on its resources (land, water, electricity) and providing opportunities to its excess farm labour. For Russia, dependency on China would come down, giving Moscow the strategic leverage that it needs and wants.
And here is where India needs to answer a strategic question. Is it willing to invest in the Russia story just as we celebrate Russia’s engagement with “Make in India”? India must write itself into the development text of the Far East and other parts of Russia through investments and expertise. There could be no stronger foundation for the relationship.
There is also an urgent need to overcome some recent angularities. The first is Afghanistan. At least till 15 August 2021, India and Russia had a serious disagreement, with Moscow unabashedly flirting with the Taliban. While both countries want stability in Afghanistan and curbs on export of terrorism and drugs, the perception in New Delhi is Moscow’s negotiators with the Taliban ended up become negotiators for the Taliban. That is a credibility problem for Russia to ponder.
India must write itself into the development text of the Far East and other parts of Russia through investments and expertise.
The second divergence is on the Indo-Pacific. It boils down to lack of trust. Russia does not trust India vis-à-vis the US, and India hears Russia reading from China’s script. This is a challenge to be addressed. Either country is the other’s flexibility mechanism, an arrangement that has stood the test of time. Russia’s ‘Greater Eurasia’ project and the Indo-Pacific are complementary and describe the same emergence: Of a new political moment and of a political geography that will seek a new alignment of interests and actors. Even as India and Russia carve new relationships, their sturdy partnership is a bank guarantee for both.
President Vladimir Putin’s visit to India is only his second trip abroad since the beginning of the pandemic. The first was to Geneva earlier this summer, for a summit with President Joe Biden. Coming to New Delhi to meet Prime Minister Narendra Modi is hugely symbolic and strategic. It indicates that the President knows India allows him a more equal partnership with China, even as Russia offers India room for its own endeavours.
In the Indo-Pacific and beyond, China’s growth in capabilities and political authoritarianism are now threatening to alter how we engage with technology and digital domains. China believes it has the right to access other nations’ information and networks without offering up access to its own. This is not a simple techno-mercantilism. There is a single purpose to China’s deepening investments in existing and future technologies: furthering the agenda of the Chinese Communist Party (CCP).
For Beijing, technology is about both national security and ideology. Under Xi Jinping, it will use the information age to rewrite every assumption of the postwar period. Countries outside China must join together to seek open, safe and inclusive technology and digital platforms and products.
There are five main ways in which we can shape national, regional and global engagement with our digital world. These must also drive the purpose and direction of the Quad countries (the United States, Australia, Japan and India) as they strive to create a technology and digital partnership in the Indo-Pacific.
‘China tech’ was for the CCP initially about managing the social contract within China. Now, the CCP is weaponising and gaming other nations’ democracies, public spheres and open systems. It is creating a digital insurgency that allows it to delegitimise its opponents on their own political turf. This goes beyond episodic interference in elections. The CCP uses American forums such as Twitter and Facebook to critique the domestic and foreign policy of nations such as India. Wolf warriors seek to shape the information space internationally while China and the CCP remain protected behind the Great Firewall. The unimpeded global access China is allowed under some perverse notion of free speech must be questioned; internet propaganda endorsed by authoritarian regimes cannot and should not go unchecked. As a first step, the world will have to embrace a political approach to repel the digital encroachments we are witnessing. The European Union offers a model – just as its General Data Protection Regulation sought to rein in the US technology giants, we need laws that limit China’s access to the public spheres of open societies, thereby curtailing its global influence.
Today, all digital (silk) roads lead to Beijing. Many developing countries rely on China for their technology sectors. From control over rare earths and key minerals to monopoly over manufacturing, China commands the digital spigot. The Quad countries and others in the Indo-Pacific must seek and encourage diversification. Affordable, accessible products and innovations must emerge in the digital space. From resilient supply chains to diversity of ownership, a whole new approach is needed to prevent the perverse influence of any single actor. This is the second way to shape global patterns of digital engagement.
The Chinese under Xi have embraced the dangerous essence of the Chinese phrase ‘borrowing a boat to go out to the sea’. The CPC has essentially borrowed all our boats to further their agenda.
Universities in the developed world, their media, their public institutions and even their technology companies are serving and responding to missives from the Middle Kingdom. Many journalists have exposed the Western media’s promiscuous entanglements with a Beijing that artfully co-opts them into its propaganda effort. In the digital age, this cannot be ignored. Countries will soon be faced with a digital fait accompli – signing on to Pax Sinica. As a third way to enhance engagement, it is time to protect liberal institutions from their own excesses.
China has attempted to internationalise its currency with the launch of its own digital currency. After banning financial institutions and payment companies from providing crypto-related services in May, China launched a crackdown on computer-powered crypto mining in June, and a blanket ban on all crypto transactions and mining in September, clearing the way for its digital renminbi (digital RMB). With the development of its own central bank digital currency, the Chinese government will now have the power to track spending in real time. It will have access to the entire digital footprint of a citizen or a company. This will provide Beijing with an unprecedented vault of data, which it can use to exercise control over technology companies and individuals.
The rise of China’s digital RMB has the potential to challenge the status of the American greenback. For decades, the US dollar has been the world’s dominant reserve currency. Yet countries such as Iran, Russia and Venezuela have already begun using the Chinese yuan for trade-related activities or replacing the dollar with the yuan as reference currency. China can shape all three attributes of the ‘ideal’ currency, also referred to as the ‘Impossible Trinity’: free capital flow, a fixed exchange rate and independent monetary policy. It is a matter of time before it uses currency as part of its wider geopolitical plans. And with its past experiments with many countries on ‘trade in local currency’, it will have the capacity to create disruptions in the global monetary system. This can only be countered with two measures: one, depoliticising the existing dollar-led currency arrangements (the tendency to weaponise the SWIFT system – a giant messaging network used by banks and other financial institutions to transmit secure information – and to employ ad-hoc economic sanctions) and two, investing in the economic future of the emerging economies that currently depend on China.
Lastly, China is seeking technological domination not only terrestrially but also in outer space. China has invested considerably in space technology and engages in counterspace activities. These include suspected interference in satellite operations, both through cyberattacks and ground-based lasers. There are growing fears that Chinese technologies developed for ostensibly peaceful uses, such as remote satellite repair and cleaning up debris, could be employed for nefarious ends. The inadequate space governance mechanisms is an opportunity for the Quad to develop situational awareness in the space realm to track and counter such activities, and to develop a new set of norms for space governance.
The Quad’s agenda is prescribed by China’s actions. It will have to be a political actor and have the capacity to challenge China in the information sphere and the technology domain. It will need to be a normative power and develop ideas and ideals that are attractive to all.
From codes and norms for financial technologies to the code of conduct for nations and corporations in cyberspace and outer space, the Quad has the responsibility and opportunity to write the rules for our common digital future.
The Quad will also have to be an economic actor and build strategic capacities and assets in the region and beyond. It will have to secure minerals, diversify supply chains and create alternatives that ensure the digital lifelines are not disrupted.
Most importantly, the Quad will need to be an attractive partner for others to work with. This is its best means to counter China’s dangerous influence.
This commentary originally appeared in The Sydney Dialogue.
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After a period of significant gains, achieved largely through the establishment of institutions that promoted international liberalism, the global order today finds itself at a crucial juncture. Rising inequality, the proliferation of nationalist politics, technology-induced disruptions and the resurgence of zero-sum geopolitics, are all beginning to shake the foundations of the global governance architecture built assiduously over the past 70 years. It is clear that the liberal order, as it is frequently referred to, will not be able to sustain its influence in the 21st century unless it finds new torchbearers in Asia, where politics and economics are scripting a story very different from that of post-war Europe. To some, it is evident that India, which has successfully combined economic growth with its own liberal traditions, will indeed be the heir to and guarantor of this system as an emerging and leading power.
India’s strong growth in recent years has outstripped job creation and poverty remains a key challenge. But in the face of the changing world of work Terri Chapman and Samir Saran, Social Policy Specialist and Associate Fellow and Vice President at India’s Observer Research Foundation, explain how perceived problems in the economy can become opportunities.
India’s sustained average growth rate of 7% over the last decade has not been accompanied by sufficient growth in employment. While half of India’s population is below the age of 26, the increasing demand for jobs is not being met by the creation of sufficient new economic opportunities. The annual demand for new jobs in India is estimated at 12-15 million, leaving India with a shortage of between 4-7 million jobs each year. This is further compounded by the 300 million people of working-age outside of the labour force. India’s official unemployment rate of 3.5% masks the magnitude of the jobs crunch.
The extent and severity of poverty in India provides further impetus for addressing the jobs challenge. One in five people live on less than USD 1.90 per day, and more than half of the population lives on less than USD 3 a day (2011 PPP). High rates of employment in low-skilled, low-wage and low-productivity occupations only exacerbate this condition. India has a working poverty rate of 20%. Increasing both individual and household incomes will need to be at the centre of policies designed to address the employment challenge.
Two characteristics of the Indian economy that have historically constrained growth may actually provide new opportunities in the context of a changing economy. The first is a disproportionate share of microenterprises, with 98% of companies employing fewer than 10 workers; the second is the high rate of informality, with 90% of employment generated in the informal sector. In an increasingly digital- and service-based economy these characteristics could, in fact, create efficiencies. Three strategies should be undertaken to leverage these opportunities: upgrading skills and capabilities; supporting microenterprise and self-employment; and creating new models for social protection.
The service sector is providing immense opportunities for job creation in both traditional and emerging sub-sectors. Currently, this sector accounts for 60% of GDP and 30% of employment. Continued growth in domestic and export services is expected it and will be increasingly important in the face of uncertainty in the manufacturing sector, where employment has stagnated at 22%. Changes in manufacturing processes, especially the potential for increased automation, will limit the benefits of labour-intensive growth. Structural shifts in the economy due to digitalisation are altering the kinds of jobs being created and the skills required for individuals to remain competitive. In order to help workers adapt to changing demand, India must develop an enhanced skills development framework. Such a framework should be accessible, driven by demand, linked to employment opportunities and enable individuals to quickly up-skill and re-skill.
The adoption of digital technologies and emergence of digital platforms, such as in e-commerce and digital financial systems, are improving the business viability of microenterprises in India. Additionally, India’s microfirms create direct employment and should be an essential part of its employment strategy. In order to support inclusive growth among micro and small-sized firms, India must improve financial connectivity and reorient its skills development strategy. Further, in order to take full advantage of the employment potential of the digital economy, it is essential to improve and secure digital infrastructure to enable equal access to digital technologies and reduce the digital divide.
As the digital economy begins to generate new opportunities in India, it will be characterised by increased contract work and self-employment. This should be met with new models of social protection and strategies that mitigate risks of shifting labour relations. Social safety nets and social benefits that are typically linked to employment should be accessible to individuals directly. Potential issues such as depressed wages, low productivity, and economic insecurity need to be managed through new policy frameworks.
A changing global economic environment, structural changes to the Indian economy and digital transformations have the potential to greatly exacerbate the employment challenge. At the same time, a major opportunity for India stems from its existing economic structure that is dominated by the informal sector. New digital technologies will allow India to catalyse growth. Given global trends towards informalisation and self-employment, India is at a strategic advantage to avoid substantial structural adjustments.
India has the opportunity to drive growth from the informal sector, while simultaneously creating stronger linkages between the state and individuals through new, digitally-enabled social protection mechanisms. This opportunity will be accompanied by a major challenge: to effectively skill, up-skill and re-skill India’s workforce. The immensity of this undertaking is compounded by the lack of a quality formal education among large parts of the population. It is imperative that India leverages digital technologies to bring workers into the labour force, connects individuals to social protection systems and finds ways to effectively prepare people for a changing employment landscape.
By Samir Saran and Shuvaloy Majumdar, Feb. 25, 2018, MLI
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Prime Minister Justin Trudeau’s visit to India this past week came at a time when Canadians are particularly preoccupied with two other compelling international relationships facing unprecedented strains born from a changing global order: the United States and China.
The US friendship is inescapable, forged by geographic, economic, and cultural realities. American leadership remains the lynchpin of an international order Canadians cherish, dedicated to free peoples and free markets. Yet as NAFTA undergoes a tough re-examination, Canadians are reminded that even the closest alliances are not immune to diverging interests.
Amid anxieties over America, China is often presented as Canada’s obvious alternative, and the creeping “Sinofication” of Canada’s economy, and Sinophilia of its political class, has increased at a rapid clip. Canadian access to Chinese markets and global influence comes at high cost to Canadian interests. Critical voices have rightly questioned the degree to which Canada can enter into the good graces of a one-party command economy while keeping traditional Canadian business and political ethics intact.
India, more than any other growing power, offers Canada economic and strategic possibilities that are genuine, pragmatic, and achievable.
Canada needs new room to manoeuvre, and the Indian opportunity is an essential corridor to the high growth Indo-Pacific region between these two demanding poles.
India, more than any other growing power, offers Canada economic and strategic possibilities that are genuine, pragmatic, and achievable. It is a common-sense, practical alliance, free from tyranny of geography, grounded in shared values and mutual interests. A stronger Canada-India relationship holds the promise of enhanced prosperity and security for both parties without threatening the character and agency of either.
The rapid modernization of the Indian economy, and with it, the material improvement of the lives of millions, is a remarkable achievement of modern history. Within the next two decades, the Indian economy may be valued at $10 trillion, placing it firmly in the most elite upper tier of nations. The country has established a window for global opportunity through a growing array of modern industries, including technology, energy, urban planning, and agriculture.
The bright future such development portends has not gone unnoticed by Canadian firms hungry for international partners, and Canadian investors eager to diversify their portfolios. Canadian pension investments in India in particular have risen dramatically, from virtually nothing a decade ago to over $14 billion today. With each passing year the evidence becomes clearer: Canadians who fail to appreciate the economic opportunities of India do so at their own risk.
On the security front, New Delhi plays a critical role as the defender of the international order which Canada is so invested in. India’s strategic geographic location, increasingly sophisticated military and security forces, and principled opposition to the hegemonic and regressive ideologies of our time make it an essential ally in an uncertain era. The country has proven itself a willing partner in the fight against violent extremism, including the false prophesies of Khalistan and political Islam, within its borders and beyond. Its proximity and understanding of West Asia, Pakistan and Afghanistan make it an invaluable partner for the West.
On the security front, New Delhi plays a critical role as the defender of the international order which Canada is so invested in.
Perhaps most importantly, India provides an essential counterbalance to China’s rising ambition as Asia’s unquestioned regional superpower. When Beijing threatens the sovereignty of other nations, for example its “Belt and Road Initiative” to construct highways through disputed territories in Asia, or the uninvited presence of Chinese warships and military infrastructure in the Bay of Bengal, Indian Ocean and South China Sea, it is India’s strength, both militarily and diplomatic, that make it the most credible voice of resistance. At a time when many of Canada’s leaders seem oblivious or resistant to the consequences of Chinese power, India’s informed insights demand a Canadian audience.
As we enter the third decade of this century, both countries’ political and opinion leaders need to explain India’s contemporary economic and strategic realities to Canadians. We must make clear the vast opportunities for productive cooperation. In announcing a new era of collaboration between our two organizations while our national leaders meet in New Delhi, the Observer Research Foundation and Macdonald-Laurier Institute intend to serve as leading proponents of this mission from both our capital cities.
Although our two countries share symbolic and cultural bonds born from decades of migration and common political heritage, the true strength of our partnership will ultimately be defined by the ability of Canadians and Indians, in both the private and public realm, to coordinate tangible activities of mutual geopolitical and material interest. It is a testament to the skills and resources of both nations that this objective seems easily within our grasp.
Samir Saran is Vice President of New Delhi’s Observer Research Foundation (@samirsaran). Shuvaloy Majumdar is Munk Senior Fellow for Foreign Policy at Ottawa’s Macdonald Laurier Institute (@shuvmajumdar).
The Security Times, Samir Saran, February, 2018
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For 73 days between June and August 2017, Indian and Chinese troops were locked eyeball to eyeball over a small strip of land marking the tri-junction between India, Bhutan and China: the Doklam Plateau. The clash was ostensibly triggered by Chinese road construction activities around disputed territories. But military tensions at Doklam are only the symptom, not the cause of conflict. The standoff itself is the naked manifestation of a long simmering conflict over regional primacy. India sees itself as an indispensable actor in influencing the future of the Asian century. China, on the other hand, is intent on shaping a unipolar Asian order that will be defined by deference to the Middle Kingdom and its increasingly imperial rulers.
The Belt and Road Initiative (BRI), officially unveiled in 2013, is perhaps the most visible demonstration of China’s intention. The ambitious connectivity project – straddling two oceans and implicating three continents – seeks to create a cohesive economic and political arrangement across Eurasia and Africa. Within these regions, Beijing has devoted resources towards building ports, energy pipelines and railways, along with investing in close political relationships and military cooperation. For China, the BRI is a shining symbol of its leadership. At a time when Western powers are turning their focus inward, the BRI is billed by China as its commitment towards globalization and integration. Taken at face value, such grand projects are not novel in ambition, nor should they be rejected for their intent.
However, the BRI as it stands today is unique in its opacity. Embedded in its strategy is an agenda that ultimately serves only one actor – Beijing. The 65 nations that have signed up for the BRI are relatively small, low-income and in urgent need of infrastructure finance. By their short-term calculus, the promise of China’s seemingly generous loans and development partnerships outweighs concerns over political independence, economic stability, environmental degradation and sovereignty. When China hosted its BRI summit in May 2017, historians were hard-pressed to miss the symbolism of world leaders stepping up to shake hands with President Xi – a 21st-century vision of the Middle Kingdom’s ancient tributary system. Through debt, political influence and outright coercion, the BRI is a roadmap for structural servility to Beijing.
Countries with agency and regional heft are not likely to succumb to this lure. Yet India sees many of its neighbors straddled with bad loans and white elephant projects, which China uses for strategic leverage. Sri Lanka’s Hambantota Port, over which China now enjoys a 99-year lease, is perhaps the most obvious example of Beijing’s “debt-trap diplomacy.” New Delhi is also acutely aware that states in the region are slipping into China’s orbit, making it difficult for them to criticize Beijing. ASEAN’s inability to develop a cohesive response to China’s maritime aggression in the South China Sea underscores this risk. Further, India views China’s investments in Kashmir as a violation of its sovereignty, while it sees other regional projects as a part of China’s “string of pearls,” which are intended to limit India’s rise as a global power.
For these reasons, aspiring “leading powers” like India see the BRI for what it is: an exercise in hardwiring influence. As the only major country that refused to attend the BRI summit in May, India cogently argued that connectivity in Asia must be consultative, and guided by transparent financial guidelines, principles of good governance, internationally recognized environmental and labor standards, and respect for sovereignty. For a country that has always preferred multipolarity and multilateralism, both globally and regionally, acquiescing to Pax Sinica was never truly an option.
The India-China relationship is thus coming to signify a contest for the future of Asia, as well as the world at large. At issue is whether nation states that exercised their hard-won right to self-determination and democracy will now be forced into a client-satellite relationship with Beijing as its economic dominance continues. Over the past seven decades, the international liberal order – as it is often called – was carefully crafted with the intention of promoting free markets, rule of law and democracy. Leadership with Chinese characteristics, discernable most visibly through the BRI, is ominously lacking in these qualities. China has used its trade relationships to silence political opposition, bribed its way towards closer diplomatic ties and militarily coerced many of its neighbors. In each case the message China sends is clear: Accede to Chinese interests and enjoy good relations, or resist and face fury.
This effort to sabotage the relevance and the principles of the liberal international order has prompted the concept of a “free and open Indo-Pacific.” First made popular by the United States when Secretary of State Rex Tillerson visited India in October 2017, the geographical definition of this space, and the values that must define it, has since caught on in the strategic calculus of several regional powers. The resuscitated Quadrilateral Security Dialogue – a partnership of four maritime powers, including India – has coalesced around this region with the vocal intention of providing a democratic bulwark against China’s unconcealed ambition for hegemony. As a result, the Indo-Pacific, which spans the West Indian Ocean and stretches towards the Eastern Pacific, is now primed to become the battleground for the future of the liberal order.
Three imperatives will guide this contest: norms, connectivity and security. Regional democracies will have to invest considerable resources and synergize their own connectivity initiatives to address the region’s burgeoning infrastructure finance demands. They will also have to develop political and military partnerships to ensure that states in the region are capable of resisting Chinese pressure. However, a democratic alternative by definition cannot be exclusive; it must be capable of accommodating Beijing’s projects and security concerns as long as they abide the well-established principles of international law. Only by doing so will the idea of a free and open Indo-Pacific provide a viable and attractive rules-based alternative to the autocratic strain of the BRI.
The India-China relationship is ultimately defined by the differing worldviews of both actors. From China’s perspective, India – whether through diplomacy, coercion or force – must understand its place in a hierarchical Asian order that pays obeisance to Beijing. However, according to a famous Chinese adage: “One mountain cannot contain two tigers.” Nonetheless, as a confident democratic power, India will increasingly exercise its heft to shape the world around it, without being browbeaten by the dragon. The competition over values, norms, ethics and influence, both within Asia and around the world, will continue to exacerbate tensions between India and China. The standoff between the two countries over the Doklam Plateau – their most serious border conflict since the 1962 – was likely a prologue for what is to come.
is vice president of the Observer Research Foundation in New Delhi.
- BOOKS AND MONOGRAPHS, ORF
- JAN 19 2018
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Over the years, India earned the epithet of a reluctant power in Asia — exuberant in its aspirations, yet guarded in its strategy. However, as the challenges in its immediate neighbourhood and beyond continue to evolve, India is today gearing up to embrace a larger role in the far wider theatre of the Indo-Pacific.
Forming the core of the ongoing global economic and strategic transitions are a rising and assertive China, an eastward shifting economic locus, and the faltering of Western-led multilateral institutions. These converge with domestic development and national security objectives to demand that India strive to expand its presence, reach, and voice both on land and in the sea in its extended neighbourhood. Today, New Delhi is actively seeking to create opportunities for mutual development in the Indo-Pacific, in the Arabian Sea and in Africa even as it engages like-minded nations in the pursuit and preservation of a rules-based order that promotes transparency, respect for sovereignty and international law, stability, and free and fair trade. In both these endeavours, the United States is an appropriate and willing partner. As Indian Prime Minister Narendra Modi stated in his address to the US Congress in 2016, “[a] strong India-US partnership can anchor peace, prosperity, and stability from Asia to Africa and from the Indian Ocean to the Pacific.”
The US has been a principal architect and the traditional guarantor of a liberal economic and maritime order in the Indo-Pacific. While the commentariat in the US and India might express apprehension at the idea of US President Donald Trump’s ‘America First’ strategy, this moment must be seen as an opportunity to rebalance the Indo-US relationship to reflect a real convergence of strategic interests, as opposed to an abstract engagement based on values alone and one that has disregarded the core interests of both countries.
Even as the phrase ‘free and open Indo-Pacific’ replaces ‘Pivot to Asia’, it is clear that the US will continue to play an important role in the region.
The US is acutely aware that disengagement is not an option when the contests of the region are, in fact, irrevocably moving both westwards and eastwards, and ever closer to its own spheres of influence. Thus, maintaining an influential presence and assets in the region effectively responds to its agenda. The US continues to retain an unequivocally large military presence in the Indo-Pacific. Moreover, Washington appears intent on finding ways to address shortfalls in its defence budget. The most recent defence bill specifically authorises the establishment of the new Indo-Pacific Stability Initiative to increase US military presence and enhance its readiness in the Western Pacific. As it remains an invested actor across the Middle East and in Afghanistan, and as it confronts an unrelenting North Korea, it must seek to empower regional like-minded nations such as India, which it recognises as having an “indispensable role in maintaining stability in the Indian Ocean region.”
US Secretary of State Rex Tillerson’s remarks at the Center for Strategic and International Studies a few days before his visit to India in the fall of 2017 is a testament to the continuity of the relationship: “The increasing convergence of US and Indian interests and values offers the Indo-Pacific the best opportunity to defend the rules-based global system that has benefited so much of humanity over the past several decades.” In a way, the title of his speech, “Defining Our Relationship with India for the Next Century”, should set the tone for the Indo-US relationship; and this new direction must not be influenced even by changes in leadership in the two capitals. It must first be imagined and then crafted as a multi–decade relationship that engages with the disruptions that abound in a multipolar world. This 21st century partnership must take into account each country’s economic trajectory, political values and strategic posture. The Indo-Pacific region will be the theatre in which this partnership will truly be realised. Both President Trump and Prime Minister Modi seem cognizant of this reality, and are intent on creating a new blueprint for this long-term engagement.
The terms of this bilateral cannot be limited to maintaining the regional balance of power. Rather, both countries, in concert with other likeminded powers, have a stake in enabling and incubating a peaceful, prosperous, and free Indo-Pacific. As these countries align in their desire to see a new regional architecture emerge, the following present themselves as the most crucial domains where a strengthened India-US The New India-US relationship can have deep and influential impact in a region that matters to the whole world:
Defence trade and technology
India’s designation as a ‘major defense partner’ of the US, and the Defense Technology and Trade Initiative provide a bilateral platform for defence trade and technology sharing with greater ambitions and at a faster pace. The ‘Make in India’ initiative strengthens scope for coproduction and co-development. The new appetite for business reforms is catalysing the largest volumes of foreign direct investment ever received by the country.
As India undertakes broader defence transformation initiatives, US defence companies can collaborate with New Delhi in its USD 150 billion military modernisation project. They can do this by jointly identifying the gaps and working together to equip Indian forces in the short run. This must be followed by cooperation on advanced technologies to help build up the country’s defence manufacturing base in the longer term.
Continuous progress on these fronts will enhance Indian capabilities, enable greater readiness of Indian forces, and level the playing field. Specifically, priority military hardware, technologies and areas for joint production need to be identified. Pending sales, such as that of the Guardian RPVs, need to be expedited, along with the micro unmanned aerial vehicle project. Further, the matter of quality and subsequent liability of equipment made in India through joint Indian-US ventures needs immediate attention. Additionally, the hesitation of US companies in sharing proprietary and sensitive technology is a concern that will need to be taken up on a case-by-case basis.
Maritime freedom and security
There is a rare moment of clarity in US and Indian policy circles on the importance of each other in this region. This is important if the countries are to act as “anchor of stability” in the Indo-Pacific.
It is time to begin conversations on new arenas of military cooperation, intelligence sharing, and strategic planning, to include advanced platforms like fifth-generation fighters, nuclear submarines, and aircraft carriers. Already, the two countries share a maritime security dialogue, which was instituted in 2016, as well as working groups on aircraft carrier technology and jet engine technology. They should be strengthened further and complemented by new working groups.
The annual Malabar exercise, which now formally includes a third partner, Japan, is another key feature of military cooperation, improving coordination and interoperability. Adding to these efforts are the Logistics Exchange Memorandum of Agreement, which will create maritime logistic links, and a white shipping agreement which promotes regional maritime domain awareness.
India-US maritime security cooperation is critical because it supports efforts that prioritise joint stewardship for ensuring freedom of navigation and unimpeded trade across a maritime common that is a major conduit for commercial and energy supplies, and is rich in natural resources, ecosystems, and biodiversity. Moreover, the Indian Ocean Region is extremely vulnerable to extreme weather events that are likely to increase significantly in the coming years. To address these developments, the US and India can cooperate to provide humanitarian assistance and disaster relief missions in the region.
Further, the two sides are committed to resisting the aggression that China has displayed in the South China Sea and elsewhere in the Indo-Pacific. Indo-US cooperation in the Indo-Pacific must also serve to affirm the principles of freedom of navigation and peaceful settlement of maritime disputes.
An expanded bilateral maritime partnership that involves transfer of technology to build India’s capacity in the Indian Ocean Region will help create a more stable and balanced security architecture there. This same partnership should explore new forms and formats of joint exercises and naval drills, such as anti-submarine warfare and maritime domain awareness missions, and encourage support for Indian leadership as “force for stability” in the IOR.
India and the US must also collaborate to promote a market-driven blue economy as a framework for growth and prosperity in the Indo-Pacific — home to bountiful hydrocarbon, mineral, and food resources, as well as burgeoning coastal populations.
India and the US can further elevate cooperation in marine research and development to create common knowledge hubs and share best practices. They can collaborate to develop mechanisms and foster norms that ensure respect for international law. The US can support regional collaboration in the Indo-Pacific to explore new and environmentally conscious investment opportunities in maritime economic activities and industries, such as food production and coastal tourism. Direct investments in Indian efforts, such as in identified coastal economic zones and the Sagarmala initiative, and participation in regional groupings like the Indian Ocean Rim Association, are two ways in which it can do so.
Effectively, the US can support India in creating a resilient regional architecture in the Indo-Pacific that places an emphasis on stability, economic freedom, growth and maritime security.
Today, states in the Indo-Pacific are in dire need of funds and expertise to improve infrastructure development and regional connectivity. Beijing has introduced its own project — the Belt and Road Initiative — through which it is investing in infrastructure initiatives across Eurasia and the Indo-Pacific. While connectivity is undoubtedly the primary aim of the project, it is increasingly clear that China seeks to expand its political and military influence in the region under the aegis of the BRI. To prevent the emergence of an Asian order inimical to the rules-based order, states must work together to forge a more inclusive approach towards an emerging regional architecture. This framework must be willing to accommodate everyone, including China, in connectivity projects from Ankara to Saigon, or the sea lanes seeking to link ASEAN with Africa.
For this to occur, pragmatic, democratic, and normative powers need to first create a political narrative within which Asia’s connectivity will take place. This narrative must underscore the importance of good governance, transparency, rule of law, and respect for sovereignty and territorial integrity. This can then be posited against strictly bilateral projects such as the BRI, which burden participating countries with debt and environmentally unsound projects. This alternative proposition to China’s BRI can then become the blueprint for connectivity and integration from Palo Alto to Taipei, Bengaluru to Nairobi, and Tel Aviv to Addis Ababa. The possibilities are endless and straddle hard infrastructure, digital connectivity, knowledge clusters, and value chains in the Indo-Pacific space.
The India-US partnership has an important role to play in this respect. The American vision of the Indo-Pacific Economic Corridor supplements India’s Act East policy, and India-US cooperation in physical and soft infrastructure can link cross-border transport corridors; help create regional energy connections; and facilitate people-to-people interactions. Further, India and the US can cooperate as “global partners”, with US investment in Indian projects in Africa. Accordingly, the Asia-Africa Growth Corridor proposed by Japan and India can provide a common platform to all three states. Further, the US can nurture burgeoning regional partnerships between Japan, South Korea, Australia, and India, as these countries work towards building a consultative and collective Asian framework.
Digital connectivity, trade, and technology
Digital connectivity merits particular attention. After all, in the next decade, the largest cohort of internet users will emerge from the Indo-Pacific region. China is working aggressively to ensure that digital platforms in the region will be influenced by its own model for cyberspace premised on sovereignty. A major part of China’s BRI is the new “information silk road”, which facilitates investments by Chinese companies in South Asia’s internet architecture.
Accordingly, the US and India must cooperate to ensure that digital platforms, trade, connectivity and norms are shaped according to the democratic and open nature of the internet. To do so, they must create a framework that responds to developing-country imperatives such as affordable access, local content generation and cybersecurity. Already, Prime Minister Modi’s ‘Digital India’ programme provides a model for other states in the region to use internet-enabled technology to spur economic growth. India’s Aadhaar initiative, a unique digital identity programme, has already generated significant interest amongst South Asian states. American companies have increasingly sought to adopt standards and technologies to leverage this platform and build new markets in India. For example, WhatsApp has integrated with India’s unified payments interface to provide digital payments. Examples of other development initiatives are also abundant. Elsewhere, the Google RailTel initiative aims to provide WiFi at 400 railway stations across India by 2018.
India-US bilateral cooperation in using the digital as a tool for economic development and empowerment can be the template to connect the three billion emerging users in other developing countries in the Indo-Pacific and across Africa. As digital norms are institutionalised — whether pertinent to data flows and e-commerce, or related to critical infrastructure, defence, and public services — there is a real opportunity for India and the US to build and subsequently provide a model working relationship for the digital economy. Effectively, the US and India can propose a set of ‘Digital Norms for the Indo-Pacific’ that can be operationalised under their various dialogues and mechanisms for cooperation in the region.