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Chaturanga

~ statecraft, strategy, society, and Σοφíα

Chaturanga

Tag Archives: Association of South East Asian Nations

The Elephant and the Eagle at Sweet 16

05 Sun Jun 2016

Posted by Jaideep A. Prabhu in India, South Asia, United States

≈ Comments Off on The Elephant and the Eagle at Sweet 16

Tags

Ajmer, Allahabad, ASEAN, Association of South East Asian Nations, Australia Group, Basic Exchange and Cooperation Agreement for Geo-spatial Cooperation, BECA, China, CISMOA, Communication Interoperability and Security Memorandum of Agreement, Defence Technology and Trade Initiative, DTTI, European Union, free trade, India, intellectual property rights, Logistics Support Agreement, LSA, Make in India, Missile Technology Control Regime, MTCR, NSG, nuclear, Nuclear Suppliers Group, Pakistan, Polar Satellite Launch Vehicle, PSLV, smart cities, TPP, Trans-Pacific Partnership, Transatlantic Trade and Investment Partnership, TTIP, United Nations Security Council, United States, UNSC, Vishakapatnam, Wassenaar Arrangement, World Trade Organisation, WTO

It has been 16 years since George W Bush fundamentally altered the way the United States looked at India. As the old Cold War with the Soviet Union receded into memory and a new one with China appeared imminent, at least to the Bush White House, India emerged as an important potential ally in the new world order. India’s economy had recently started down the road to liberalisation too, making the South Asian country attractive to US industry as well as the government.

Despite frequent kerfuffles in the media – and there have been plenty – India-US relations have moved from strength to strength over the past 16 years. From the Strategic Quartet – high technology trade, space cooperation, nuclear energy, and missile defence – through the Next Steps in Strategic Partnership to the historic Indo-US nuclear deal and the Defence Technology and Trade Initiative, Washington and Delhi appear poised on the brink of a century-defining partnership. If state visits are any indication of warmth, prime minister Narendra Modi is visiting the United States at this moment for the fourth time in just two years – something his predecessor required nine years to necessitate.

Defence ties are usually the most prominent measure of relations between nations for obvious reasons: not only do they declare how much skin each state has in the other’s security, but they are also a statement of how much states trust each other with their prized technology. No wonder, then, that India’s defence purchases from the United States have attracted so much attention. Between CH-47 Chinooks, AH-64 Apaches, C-17 Globemasters, and C-130J Super Hercules, India’s aggregate defence acquisitions from the United States has crossed $13 billion. The loss of India’s Multirole Medium Range Combat Aircraft contract disappointed Washington but under Modi’s Make in India programme, US defence firms are considering moving the production of the F-16 and F-18 to India.

The United States has moved beyond the role of being a mere supplier of weapons to India: officials have been engaged in talks that, if successful, would result in the co-production of systems. Under the DTTI, the next generation of Raven unmanned aerial vehicle will be jointly developed and produced. Other projects include intelligence gathering and reconnaissance pods for the C-130J, mobile electric hybrid power sources, helmet-mounted digital displays for aircraft and helicopter pilots, high energy lasers, and chemical and biological warfare protection gear for soldiers.

Washington has also been keen to assist India with core defence technologies such as the development of jet engines and the catapult launching system on board US aircraft carriers. India’s Kaveri programme has been a miserable failure and with Delhi’s increasing focus on maritime security, the US offer could provide a healthy boost to Indian capabilities.

India’s change of mind on what the Pentagon calls the foundational treaties – LSA, BECA, and CISMOA – has been a welcome surprise. These agreements formalise the sharing of logistical facilities and align communication protocols between the US military and their partners, greatly enhancing the range and capabilities of both forces in joint humanitarian or security missions. Although the agreements will remain unsigned during Modi’s visit this June, it is reported that they are close to conclusion.

The United States’ support for Indian admission to the permanent membership of the United Nations Security Council and technology export control groups such as the Missile Technology Control Regime, the Nuclear Suppliers Group, the Australia Group, and the Wassenaar Group gives some weight to Philip Zelikow’s statement in 2005 that the United States intends to help India become a major power.

Although both India and the United States have come a long way in defence cooperation, one cannot shake the feeling that both sides are still hedging from a complete commitment. India has lost no opportunity to stress that the signing of the foundational agreements with the United States will in no way erode its sovereignty, that it is happy to conduct numerous maritime joint exercises but will not be persuaded to conduct joint patrols, and that India sees itself as a friend and partner of the United States but not quite an ally. On the American side, senators questioned the wisdom of a bill that proposed elevating India to the status of a NATO ally in all but name given that the South Asian country did not see itself in that role. The US bill would have amended the Arms Export Control Act and made defence transfers to India quicker and smoother.

One hurdle in closer ties is Pakistan: India is displeased with the continued sale of US weapons to the Islamic republic despite ample evidence pointing to terrorist ties and an unhelpful disposition towards US goals in South and Central Asia. However, the dynamics of these ties have remained relatively unchanged since the 1950s: Pakistan provides services in the region that the United States cannot get elsewhere in return for White House forbearance on matters Islamabad sees as vital to its interests. In the 1950s and 1960s, it was basing privileges for US reconnaissance aircraft conducting missions over China and the Soviet Union; in the 1970s, Islamabad served as the channel to Beijing and a rapprochement with China; in the 1980s, it was the shipment of arms to the mujaheddin in Afghanistan. In the 2010s, Islamabad has become the conduit to the Taliban, with whom Washington hopes to negotiate a “decent interval.” Even now, though the United States has been urging India to play a greater role in Afghanistan, Delhi has declined, choosing to involve itself more in important but not critical facets of Afghanistan’s development.

India’s reluctance to play a more significant role in its own interests may frustrate observers but this has, understandably, in large part to do with the country’s capabilities. Couched in the rhetoric of multipolarity and morality, India’s inaction misleads the casual observer. The ignored pachyderm in the room is that Delhi lacks the financial and industrial wherewithal to flex its military muscle in Central Asia or the South China Sea, and any attempt to persuade it to do so will fail. The remedy to this is economic growth, technological development, and strategic coalitions.

On the surface of it, economic relations seem to have grown substantially between India and the United States. Both countries are investing more in each other’s economies and trade between the two stands hovers around $70 billion. More and more US companies are setting up shop in India as Indian companies are expanding their business beyond the Atlantic. Washington is the lead partner for developing Allahabad, Ajmer, and Vishakapatnam as smart cities. There is still plenty of room to grow and Modi has ambitiously suggested aiming for $500 billion in trade in a few years. However, there are several issues that will plague relations. The first is subsidies: Washington recently won a case against India at the World Trade Organisation that prohibited the Indian government from giving preferential treatment to domestic solar panel manufacturers. US firms are also pushing Washington to act against subsidies the Indian Space Research Organisation gets from the government for its Polar Satellite Launch Vehicle programme.

A second hurdle is intellectual property. In several sectors, India has brought its laws into alignment with US and international norms yet there remain significant differences in philosophy. Pharmaceuticals is one such field, where Indian courts have been hostile to the US practice of evergreening patents, instead seeing a social dimension to the industry. India has also had disagreements with the United States on its agricultural subsidies and food security programme.

A sector-specific yet politically potent point of friction is nuclear energy. Although the Indo-US nuclear deal was announced in 2005 and came into force in 2008, there has been little movement on that front since. India’s nuclear liability laws were found to be at odds with international norms and it was only in 2015 when US president Barack Obama visited India during the Republic Day celebrations that some headway was made in easing the logjam. The Indian side came up with a convoluted mechanism to bypass its own law without losing face and satisfied Washington but private companies are still uncomfortable with the provisions. As a result, a number of nuclear energy projects have stalled across the country; GE has flatly refused to participate in the Indian nuclear energy market as long as the present law stands and Westinghouse has delayed the submission of its project proposals. The sins committed by the BJP while in Opposition have been visited upon the BJP while in power.

A probable future cause for concern is the US creation of large trading spheres via the Trans Pacific Partnership and the Transatlantic Trade and Investment Partnership. India is not party to either of these blocs and its efforts to forge free trade agreements with important partners such as the European Union and the Association of Southeast Asian Nations has proceeded at a snail’s pace. There is a danger that the implementation of the TPP and TPIP will take trade away from Indian shores to within the bloc, dampening much-needed Indian economic growth.

Many of these frictions arise from the fact that the US and Indian economies are at different points: certain Indian policies may not optimize on economic efficiency but are geared towards lifting more of its population out of poverty or establishing its own industries firmly in the international arena. Delhi and Washington have much work to do to negotiate through the clashing policies that will certainly arise in the future and early recognition and amelioration will insulate relations from harsh market realities.

After 16 years, India-US relations are on a firm footing. Much has been accomplished though a lot more remains to be done. It was feared that the warmth between the two would dissipate after the exit of Bush and the election of Obama but despite the lull due to an international economic slowdown and a paralysed UPA government, ties have started to blossom again in the past two years since Modi took office. India enjoys bipartisan support in the US and Washington a hesitant embrace in Delhi. Can relations be derailed? There will always be swings and roundabouts but it seems to have dawned on both countries that the geopolitics of this century are best navigated as friends than estranged democracies.


This post appeared on FirstPost on June 06, 2016.

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What Scope For India-Iran Ties?

15 Wed Jul 2015

Posted by Jaideep A. Prabhu in India, Iran, Middle East, South Asia

≈ Comments Off on What Scope For India-Iran Ties?

Tags

Afghanistan, ASEAN, Association of South East Asian Nations, BRICS, Chabahar, Farzad B, gas, Gholamreza Ansari, Hassan Rouhani, India, INSTC, International North-South Trade Corridor, Iran, ISIS, Israel, narcotics, Narendra Modi, OBOR, oil, One Belt One Road, ONGC Videsh, Pakistan, Saudi Arabia, SCO, Shanghai Cooperation Organisation, Sinopec, Taliban, the kingdom, United States, Wilayat Khorasan, Yadavaran

With a nuclear deal between Iran and the N5+1 (Britain, France, Russia, the United States, China, and Germany) finally concluded, Narendra Modi’s meeting with Hassan Rouhani on the eve of the BRICS and SCO summits a few days ago gains more significance than it might have earlier. Leaders, geopolitical analysts, and businessmen are all keen to see what hints may be gleaned from the early interactions between Rouhani and Modi about how relations between two aspiring regional powers will develop. The fact is, however, that there are some very difficult days ahead for both countries and it will require burning a fair amount of the proverbial midnight oil.

Despite the jet-setting Modi has been accused of, the Indian prime minister is yet to visit Iran. An invitation was extended to him in January at the Vibrant Gujarat Summit and has been accepted though the dates have not yet been decided. However, other Indian leaders and officials have made their way to Tehran in recent months. Most notably, the Minister for Roads and Transport, Nitin Gadkari, visited the Middle Eastern country in May of this year and came back promising that upgrades to the Iranian port of Chabahar will be completed by December 2016 – India had won the contract in 2003. Additionally, Foreign Secretary S. Jaishankar visited Tehran in June and External Affairs Minister Sushma Swaraj was scheduled to make a trip towards the end of July for a meeting of the Non-Aligned Movement that has now been postponed by Venezuela until the first quarter of 2016. If Modi is to visit Iran this year, it will have to be between now and November when he is scheduled to visit Turkey for the G-20 meeting, Malaysia for the East Asia and ASEAN-India summits, and Israel and Singapore on state visits. Russia has been penciled in for December.

While the world expects a commercial bonanza from Iran in terms of lucrative contracts to modernise and develop the country’s industrial infrastructure and lower oil prices, India will most likely miss out on most of the party. However, its interest in Iran, now free from US pressure, is far deeper and lies in strategic initiatives more than commerce. In the post-sanctions era, Delhi hopes to see Tehran revive three or four projects of crucial bilateral importance that have languished in the doldrums for over a decade.

Security

Whenever Modi and Rouhani do meet, security will be high on their agenda. Ironically, India has had better relations with the Islamic Republic than with the Shah despite initial concern over the outcome of the 1979 Iranian Revolution. Tehran has been critical of Islamabad’s attempts to use fora like the Organisation of Islamic States to pass resolutions condemning India and in the 1990s, the two countries cooperated with the Northern alliance to fight the Taliban in Afghanistan. The latest situation in Afghanistan, however, does not bode well for either.

The fledgling appearance of ISIS in Afghanistan is of great concern to its neighbours. In the 1990s, Iran and India supported the Northern Alliance against the Pakistani-backed Taliban. However, Tehran sees the emergent ISIS as a far greater threat and may now be lukewarm to India’s concerns about their former enemy; India’s policy on the Middle Eastern terrorist syndicate is as yet unclear. In February 2015, ISIS killed a Taliban leader in Logar province and in April, claimed credit for a suicide bombing in Jalalabad that killed 35. US drone strikes have killed a few ISIS commanders in the country but the number of dissatisfied Taliban fighters heading over to the newcomers is steadily increasing though still small. The ultimate nightmare scenario for both India and Iran would be if ISIS spilled over into Pakistan’s toxic soup of terrorist safe havens. Both Tehran and Delhi need to develop a strategy that does not strengthen their old enemy, the Taliban, but also keeps ISIS out of the region. If US reports are to be believed, Iran has already made a few small shipments of arms and other supplies to the Taliban.

According to some analysts, ISIS has made an appearance in Afghanistan to stake a claim to a portion of the profits of the narcotics trade. US airstrikes against oil facilities in Iraq and Syria and the loss of important towns along the Turkish border have diminished their finances and ISIS hopes to find new economic pastures in Wilayat Khorasan – what they call their imaginary province in the Afghanistan-Pakistan area. If so, it could prove the task of eliminating them much harder as poppy traders have always been.

Economics

On a less dire front, much has been made of the potential for trade between India and Iran. Before US sanctions and pressure brought trade between the two countries to a trickle, it stood at approximately $15 billion per annum. There is no doubt that hydrocarbons will boost commerce between India and Iran quickly back to this level – India is already back to importing 370,000 barrels of Iranian crude per day – but questions remain on the emergence of a broader trading portfolio. Iran’s most immediate needs are in the upgradation of its hydrocarbon infrastructure, its factories, and other high-tech goods that are available in Western rather than Indian markets.

Iran will also want to improve its transport, education, health, and cyber infrastructure but with the prospect of the sanctions lifting, Iranian negotiators have become tougher negotiators and told several Indian delegations that they could acquire their needs from other sources at lower cost. One deal to be hit by Tehran’s increasing confidence was a $233 million State Trading Corporation venture to supply Iran’s railways with tracks; India was able to hold on to the deal but after lowering its price by seven per cent and officials are still worried that further cuts may be demanded or the order split. Iran has also withdrawn its offer to India to develop the Farzad B gas field since it was made in 2013 and free shipping as well as discounts on oil purchases have been canceled. Part of the reason is that India is seen as low on delivery; in 2007, ONGC Videsh was bumped from Yadavaran oil and gas field in favour of China’s Sinopec despite a memorandum of understanding.

Tehran has also reduced its purchase of Indian rice after its frozen assets were released from Indian banks. Exports from India may still include iron, edible oils, meat, diesel, tractors, turbines, grains, computers, machinery, and medicines, but they will face stiffer competition from the international market than before.

Regional Infrastructure

While the stars do not seem too favourable towards booming India-Iran trade, the Islamic republic still sees India as a valuable partner. In a recent interview, Iran’s ambassador to India, Gholamreza Ansari, expressed his country’s interest in developing the International North-South Trade Corridor through his country. Indian goods would reach European, Central Asian, and Russian markets sooner and at lesser cost if this corridor were completed. As a country along the route, Iran would also piggyback its imports and exports on the same network; Chabahar will already have been upgraded from 2.5 million tonnes to handle 12.5 million tonnes per annum. Coincidentally, Modi mentioned a similar proposal that linked Bombay to St. Petersburg in his discussions in Uzbekistan and Kazakhstan a couple of days ago. Such a project would be of immense economic as well as strategic value to India. it would bypass Pakistan and offer an alternative to China’s One Belt, One Road project; extending the INSTC from Bombay eastwards to Haiphong would alter trading patterns in the region.

Iran is still keen on building an undersea gas pipeline to India, another project hanging on from the previous decade. With improvements in technology and less US pressure, this might be a project India takes up with alacrity. This pipeline would diversify India’s hydrocarbon imports and certainly be more secure than the other project India has signed on to, the Turkmenistan-Afghanistan-Pakistan-India gas pipeline.

India also has the opportunity to develop a stronger naval presence in the Sea of Oman and the Arabian Sea. Iran is just as concerned as India about the safety of sea lanes in the area, its two major ports of Bandar Abbas and Chabahar both lying in those waters or adjacent to them. An expansion of the Indian Navy’s role westwards would improve Delhi’s grasp over the Indian Ocean Region as well as dilute the effect of Chinese presence in Gwadar.

Foreign Policy

Will India’s ties with Iran not interfere in Delhi’s relations with many of Tehran’s foes such as Israel, the United States, and Saudi Arabia? Absolutely not. India’s links to Iran are almost entirely commercial and overlap with US and Israeli interests where they are not – Afghanistan. Despite some literary affinity in the north, India does not share, to employ an overused expression in international affairs, a “strategic/special relationship” with Iran. In all likelihood, American companies will have a greater presence in Tehran after the sanctions are lifted than will Indian companies.

For similar reasons, there is little reason for Saudi Arabia to be alarmed by India’s ties to Iran – they are largely economic. South Bloack’s long-held belief that friendly relations with Riyadh would temper Rawalpindi’s misbehaviour has been proven wrong over the decades and has therefore diminished the Arab capital’s importance to Delhi. Nonetheless, Saudi Arabia still hosts almost two million Indian workers who make considerable remittances back to India. Yet greater economic interaction with Tehran hardly constitutes antagonism towards Riyadh and is no more than what the Gulf country has extended towards Pakistan.

Despite outward appearances, Israel has a somewhat intimate relationship with India that will take a lot to disrupt. India is a large country and has many needs both in volume and diversity; Israel is a useful partner in several arenas of its security framework and economy that India will not jeopardise. Renewed links to Iran do not change the fundamentals of India’s world view and should in no way concern Israel. Delhi’s influence in Tehran and jerusalem may be limited yet but a voice without geopolitical baggage in both capitals cannot hurt either side. Modi’s upcoming visit to Israel has caused some flutter as has India’s recent vote in the United Nations, abstaining from censuring Israel. This scaling down on rhetoric reflects a marginal course correction in Indian policy towards the region but ultimately, India has no skin in the game and is hardly a major player in the region to change the course of nations.

There is a lot on Modi’s plate whenever he visits Tehran. Though the scope for any rapid expansion in direct trade remains uncertain, the potential to transform trade routes in the region and with them local economies lies latent as does the hope that some stability if not peace will be brought to India’s mountainous northern borderlands. This is certainly too ambitious an agenda for one trip but perhaps the first steps may be taken.


This post appeared on FirstPost on July 16, 2015.

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