Our spiritual and political heritage and practices make us unique in the eyes of the world. But, we should honestly recognize that in the real world, a country’s influence is largely determined by its economic strength and potential, with its military capabilities being strong enough to protect its borders and deal with external threats from across the seas.
Glimpses from 21st Prem Bhatia Memorial Lecture and Annual Award Ceremony – 2016
We are today self-sufficient in food-grains production and no longer, as in the past, dependent on concessional foreign assistance, to make our ends meet. This alone gives us substantial diplomatic space to resist foreign pressures and follow an independent foreign policy. Ever since we entered an era of economic liberalization, in what is popularly referred to as a globalized economic order, the very size and potential of our economy resulted in external powers looking at us with growing interest. Successive governments in India, have in turn, used these factors to fashion our policies to integrate our economy more closely with most of our neighbours, particularly to our East.
Any objective analysis will show the reasons for the shortcomings in our economic performance. We have to bear some facts in mind not only about our land frontiers but also our maritime history. Our maritime influence sadly declined with colonial rule. India’s maritime history began in the third millennium BCE, when the Indus Valley established maritime contacts with Mesopotamia. Following the Roman occupation of Egypt, trade flourished with the Roman Empire, not only with our west coast, but also with Tamil Pandyan Kings. The Chola Dynasty reached out beyond the shores of what is now Tamil Nadu, between the third and thirteenth centuries, extending its domains from Sri Lanka to Srivijaya (Indonesia) in Southeast Asia. Similar trade and maritime contacts flourished between rulers of Kalinga (Orissa) and the kingdoms of South and Southeast Asia, including Myanmar, Indonesia and Sri Lanka.
Across our western shores, Quilon had growing trade links with the Phoenicians and Romans. Trade with Mesopotamia and the shores of Africa flourished. Further north, the Marathas developed a maritime force that could challenge the ships of European powers like the Portugal and Britain, till they inexplicably lost interest in maritime power. Trade flourished from our western shores across the Persian Gulf to the Mediterranean, till European dominance of our sea-lanes gained ascendancy, from the eighteenth century onwards. India and China played a significant and even dominant role in world trade till then. India is estimated to have had the largest economy in the medieval world till the sixteenth century. English historian Angus Madison has estimated that India’s share in world income was then 27%, as against Europe’s share of 23%. Our share of world trade fell to 1.9% of the global economy in 1950, after three centuries of European domination.
Sadly, any objective analysis will show that for almost five decades after independence, our economic performance was dismal. We were overtaken by China in terms not just in economic growth, but also on human development indicators like literacy, education and life expectancy. Our performance on all these criteria also lagged far behind the fast growing economies of East and Southeast Asia. Despite our professions of being an “emerging” economic power, the reality is sadly somewhat different. India is today ranked 130 in the world by the UNDP for its human development indicators, like literacy and life expectancy in the 188 countries surveyed worldwide. We lag substantially behind China and our East Asian neighbours in economic progress. Even in South Asia, we rank third after Sri Lanka and Maldives, followed closely by Bhutan and Bangladesh. Pakistan and Nepal then follow in that order.
In 1950, China’s share in world trade was 1% and India’s was 1.9% – virtually double that of China. In 2014, our share of world trade had a fallen to 1.7 % while China’s had grown to 12.2%. This asymmetry has only increased with the passage of time. Worse still, has been our performance in economic indicators. The vast differences in our share of world trade, also find reflection in the per capita incomes of India and China. According to the International Monetary Fund, per capita income in India is 6.69% lower than the world’s average. India is the 34th ranked country in Asia on this score. One of the primary reasons for this dismal economic performance, would appear to be our less than realistic trade and economic policies, which focused more on autarchic import substitution and virtual rejection of foreign investment, rather than building an outward looking, viable, economic and internationally competitive base. Hopefully, those who call for a virtual return to the “Licence, Permit, Quota Raj” of the past will bear this in mind. China performed a virtual economic miracle, through effective use of foreign trade and investment and a progressively increasing role for its private sector. Political astuteness has to be complemented with economic realism, for India to play a meaningful role in the world.
While these figures do appear dismal, there is much we can be optimistic about. We are for the first time, not only equaling, but also surpassing fast rates of growth of our eastern neighbours. Our balance of payments is healthy and we are looked upon by the outside world as a growing and vibrant economy, which is becoming increasingly open to foreign trade and investment. Despite this, one has to acknowledge that there is much scope for improvement on these issues. We are now defining our neighbourhood, described as our “extended neighbourhood” as extending beyond South Asia, to the Mediterranean and the Gulf of Aden to our West and to the shores of the South China and East China Seas, across the Straits of Malacca, to our East. Our maritime power is being expanded. By the end in the next decade, we will have the most powerful Asian fleet across the Indian Ocean, with the deployment of six SSN and SSN BN nuclear submarines each, alongside possibly three aircraft carriers. We have demonstrated our ability to evacuate not only our citizens, but also foreign nationals, during crisis situations in countries like Libya and Yemen. With falling oil prices, growing sectarian/civilizational rivalries and the emergence of ISIS, our western neighbourhood in the Persian Gulf is going through difficult times. Seven million Indians, who remit back $ 50 billon annually, live in this Region, from where we get over 70 % of our oil supplies. Protecting our vital interests in this region is imperative.
The Indian Ocean Region is now beset with civilizational and sectarian rivalries and tensions. While we have fashioned a credible “Look East” policy for our eastern neighbourhood, we do not have a clearly defined policy to our West. We can pride ourselves as being one of the few countries in the world that has good relations with all the major powers to our west – Iran, Saudi Arabia, Israel and Egypt. But, this is also perhaps the most volatile region in the world, where we should be prepared for major contingencies, involving the lives and welfare of our people resident there. We have a growing measure of cooperation with the US across our Eastern shores. We, however, do not have such institutionalized cooperation with the US, across our western shores. I think we should make it clear to the US that it cannot choose to be our “strategic” partner to our east and avoid maritime cooperation with us, across our western shores. There is also a growing impression that India is so engrossed with its relations with the US, that it takes its partnership with Russia for granted. This impression needs to be corrected sooner, rather than later. Placing all our eggs in one basket does not give us diplomatic flexibility, to pursue our interests.
Foreign trade and investment have inevitably become focal points for accelerated economic growth in India. We wisely embarked on increasingly integrating our economy, with the fastest growing economies of the world, in East and Southeast Asia. We now have Comprehensive Economic Partnerships covering goods and services, with the ten members of ASEAN, ranging from Myanmar to the Philippines, as also with Japan and South Korea. We are negotiating a free trade agreement with Australia and have endeavored to undertake similar arrangements with our SAARC partners. Moreover, ASEAN led forums, like the East Asia Summit, have led to an Indian strategic role across the Bay of Bengal, which traverses the Indian Ocean and Western Pacific, crossing the disputed waters of the South China Sea. Progress on economic integration in South Asia has, however, been slow, primarily because of Pakistani recalcitrance Significantly, tensions and disputes with China have not adversely affected a blossoming trade and investment relationship between India and China – the world’s two most populous countries.
Despite these developments, India cannot ignore the fact that China has acted as a spoiler in every effort it has made to enhance its role in its eastern neighbourhood. Beijing vigorously opposed our participation in economic and security forums linked with ASEAN, including the ASEAN Regional Forum and the East Asia Summit. China continues to maintain links across its borders with Myanmar, with some of our northeastern separatist outfits. We are now steadily moving towards a more proactive response to counter these Chinese efforts. Our aim remains to develop viable security architecture across and beyond our eastern shores. Concerns about Chinese military bases and inroads across the Bay of Bengal will continue. But, concerted diplomatic efforts, with partners like the US and Japan have enabled us to strengthen the security of our eastern sea-lanes.
China has not succeeded in its efforts to secure a predominant role in Myanmar, Nepal, Bangladesh, Sri Lanka, or Maldives. This will, however, remain a continuing challenge for us. Its claims on its maritime boundaries in the East China Sea, its attempts to browbeat neighbours into accepting its claims, its attempts to even challenge international civil aviation norms, by declaring an Air Defence Identification Zone on its maritime borders, speak of a measure of growing national chauvinism. This has caused concerns all across its maritime boundaries. China today has maritime boundary disputes with Japan, South Korea, Taiwan, Vietnam, Philippines, Brunei, Malaysia and Indonesia. India on the other hand, is largely viewed, across its eastern neighbourhood, as a benign and friendly power.
One of India’s most remarkable diplomatic achievements has been that it has settled its Maritime Boundaries with all its eastern neighbours. This was done not only with bilateral agreements on the maritime boundaries with Sri Lanka, Myanmar, Thailand, Indonesia and Bangladesh, but also tripartite agreements to determine tri-junctions, with Myanmar and Thailand, Indonesia and Thailand and Sri Lanka and Maldives. Even arriving at an agreement to demarcate our maritime frontiers with Pakistan will not be difficult, once agreement is reached on demarcating the land boundary in the Sir Creek area.
India should be clear that China is determined that it should be the unchallenged and predominant power in Asia. It will have no inhibitions displaying and deploying its military power to enforce its territorial ambitions. This will be complemented by its attempt to sustain and back regimes in South Asia that view India with suspicion and even hostility. While India has been able to deal with such efforts by China in recent days in Sri Lanka and Nepal, an important aim of Chinese diplomacy has been to lend strong support to regimes which tend too view India negatively, while pretending to be a benign power, which does not interfere in the internal affairs of others. Chinese behaviour in Nepal in recent days is a clear indicator of its intentions on our Himalayan Frontiers.
New Delhi should also carefully note Chinese moves to outflank us on our western shores, through a network of roads and ports. These Chinese strategic objectives are based on a Silk Road Economic Belt that links China with Central Asia, Pakistan Occupied Kashmir, the Persian Gulf States, Russia and the Baltic States. Beijing’s 21st century Maritime Silk Route, in turn, extends from China’s coast to Europe, through the Indian Ocean. China is simultaneously building ports across the Indian Ocean, in Asia and Africa. What India cannot afford to ignore is that while the Maritime Silk Road, envelopes both its eastern and western shores, the Silk Road Economic Belt through Pakistan, links up with the Maritime Silk Road Economic Belt and the Indian Ocean, at the Pakistani Port of Gwadar, located at the mouth of the Persian Gulf. China’s overall strategy to “contain” India lies in its strengthening Pakistan’s conventional, maritime and nuclear weapons capabilities, while acquiring access to naval facilities, across the Indian Ocean.
In a perceptive analysis of the strategic implications of the China-Pakistan Economic Corridor (CPEC), Jayadev Ranade, a senior retired Intelligence Official and one of the most perceptive experts in India, on China’s policies across the Indian Ocean, notes that the CPEC sets the stage for China to wield pre-eminent economic, military and diplomatic influence in Pakistan. The agreement for Chinese companies to construct 51 Chinese-aided infrastructure, energy and military projects, shows that Beijing’s engagement with Pakistan is for the foreseeable long-term. It seeks to bind Pakistan to China, as power generation, transport, commerce, R&D and the defence of Pakistan, will all be increasingly tied to Chinese investment and interests. The Pakistan army has raised a 10,000-strong division, comprising elements of the Frontier Corps, police and levies.
By announcing the construction of several major civil and military infrastructure projects as part of the CPEC in Pakistan Occupied Kashmir (PoK) and in areas of Gilgit and Baltistan, China has accorded de facto ‘legitimacy’ to Pakistan’s illegal occupation of Kashmir, Gilgit and Baltistan as well as to Pakistan’s illegal ceding in 1963 of the Shaksgam Valley in Pakistan occupied Kashmir (PoK), to China. Beijing has thus dispelled decades of ambiguity, to side with Pakistan on the issue of Jammu Kashmir, ignoring India’s concerns regarding its sovereignty and territorial integrity.
Ranade observes that the CPEC has a definite military component. A secure fibre-optic link connecting Kashgar in the Xinjiang/Uighur Autonomous Region with the Pakistan Army’s GHQ in Rawalpindi, is being laid at a cost of $44 million. This highlights the close military coordination between Pakistan and China. This fibre-optic link goes via Khunjerab, Karimabad, Gilgit, Babusar Top, Naran and Manshera. Kashgar is now the Headquarters People’s Liberation Army’s Western Theatre Command. The responsibility of this Command, established in January 2016, includes safeguarding China’s borders with Afghanistan and Pakistan, protecting Chinese investments and projects in the CPEC, protecting China’s land frontiers with India and focusing on “threats” in Xinjiang, Tibet, as well as Afghanistan and other States, where there are training bases for “separatists and extremists”. Instructions received in the erstwhile Lanzhou Military Region in January 2015, confirmed that the West Zone’s commitment in Afghanistan, Pakistan and the CPEC are long-term. The instructions directed that selected operational and border defence officers be trained in ‘Informationisation’ and “joint operations command”, training is to be imparted in Pashto and Urdu.
China has earmarked financial institutions established by it, like the Asian Infrastructure Investment Bank, BRICS New Development Bank, Silk Road Fund and possibly SCO Development Bank, for aiding its ‘One Belt One Road’, of which the CPEC is to be a part. The AIIB has also announced that it would co-finance a US $ 300 million motorway project in Pakistan, with the Asian Development Bank. India should be clear that China is determined that it should be the unchallenged and predominant power in Asia. It will have no inhibitions in displaying and deploying military power to enforce its territorial ambitions, where considered imperative. This will be complemented by its attempts to sustain regimes in South Asia, which view India with suspicion. While India has been able to deal with such efforts by China in recent days in Sri Lanka and Nepal, an important aim of Chinese diplomacy will be to lend strong support to regimes, which tend to view India negatively. Beijing, however, pretends to be a benign power, which does not interfere in the internal affairs of others.
Gwadar is perilously close to India’s sea-lanes, which link India to the oil rich Persian Gulf, from where we get over 70% of our oil supplies. China has now secured virtual control of the port facilities in Gwadar, after pledging $ 46 billion to Pakistan, to promote its ambitious Silk Road and its Maritime Silk Route projects. Over a decade ago, President Musharraf told an audience in Islamabad, just after the visit of then Chinese Prime Minister Zhu Rongji that in the event of a conflict with Pakistan, India would find the Chinese navy positioned in Gwadar. Given its difficulties in obtaining bases in countries like Myanmar, Sri Lanka and Bangladesh, China feels Pakistan is a crucial partner, in its quest to have base facilities, strategically positioned close to the Straits of Hormuz and astride India’s vital sea-lanes to the oil-rich Persian Gulf, where around seven million Indians live. China has simultaneously commenced an effort to strengthen Pakistan’s navy, with the supply of four frigates and eight submarines, to reinforce these efforts.
China’s interest in having a military presence astride the Straits of Hormuz arises from the fact that this narrow two miles wide corridor is the route for the transportation of seventeen million barrels of oil per day (mbpd), with 15.2 mbpd traversing thereafter through the Straits of Malacca, which includes 80% of Japan’s oil supplies. The entire Indian Ocean Region, extending to the Gulf of Aden, accounts for 40% of the world’s oil production and 57% of the world’s oil trade. Not surprisingly, the US has positioned its fifth fleet in Bahrain to oversee the security of these vital sea-lanes. The nature and extent of American interest in this Region could well change, as the US itself is becoming a net exporter of oil and gas. Moreover, apart from the rivalries of external powers, stability in this region is being adversely affected by Iranian-Saudi rivalries, which have sectarian Shia-Sunni dimensions.
One can derive satisfaction from improvements in our relations with all our neighbours in SAARC, with the notable exception of Pakistan. Our relations with our eastern neighbours in South Asia-Nepal, Bhutan, Bangladesh Maldives and Sri Lanka have been improving steadily, though there have been some recent problems in relations with Nepal and Maldives, which need to be suitably addressed. What is particularly significant in these relations, is the readiness of our neighbours to cooperate constructively in improving road, rail and maritime connectivity, while working to expand cooperation in cross border energy cooperation. Recent developments in expanding energy cooperation in a tripartite context including Bhutan, India and Bangladesh, are particularly welcome. There are also possibilities being explored for an undersea cable linking grids in India and Sri Lanka. Pakistan has sadly not joined this effort and has not even implemented the South Asian Free Trade Agreement, when it comes to trade with India. India’s strategy has been to encourage Pakistan to participate in efforts for greater economic integration in South Asia, while going ahead with this process, even in if Pakistan does not participate.
The larger diplomatic strategy in dealing with Pakistan, should involve moves to ensure that Pakistan-based terrorist groups do not succeed in using Pakistan’s soil, or the territory of Afghanistan, for terrorism against India. Our economic aid to Afghanistan, amounting to over USD two billion, has won us appreciation, not only from people in Afghanistan, but also from the international community at large. Pakistan is itself facing serious problems of internal security. The Pakistan army has been deployed in three of its four Provinces to deal with unrest and a breakdown in civilian authority. The army has nurtured radical Wahhabi oriented groups like the Haqqani Network, the Lashkar e Taiba and the Jaish e Mohammed, which promote violence and terrorism in Afghanistan and India. In the process, Pakistan is itself being targeted by affiliates of some of these groups. Hillary Clinton had cautioned Pakistan: “You cannot nurture vipers in your backyard and expect they will bite only your neighbours”. Pakistan sponsored terrorism will remain a long-term challenge. We will have to work assiduously to meet these challenges with imagination and patience. We have to reach out to those in Pakistan who desire nothing more than peace and progress, through trade, travel and economic integration.
While doing this, we should be clear that Pakistan is and will remain, a key player in China’s policies of containment of India. China will not brook any neighbour, whether Japan, Vietnam, India, or Indonesia, posing any challenge to its great power ambitions. It has no regard for international concerns, or opinion, as it proceeds relentlessly on this path. It should never be forgotten that it is China that was responsible for Pakistan developing the capabilities to develop a fast growing nuclear arsenal. It is China that has provided the designs for Pakistan’s nuclear weapons. There is reliable information that Pakistan tested its first nuclear weapon on Chinese soil in 1990. China had earlier helped out in improving and maintaining Pakistan’s enrichment plants by supply of ring magnets and more modern inverters. Worse still, over the past decade China has provided Pakistan with facilities including Plutonium reactors, reprocessing plants an designs to make light Plutonium based tactical nuclear weapons. There has been no other case in the world of one country providing another with such assistance to manufacture nuclear weapons. Moreover, Pakistan’s nuclear capable “Shaheen” missiles designed and transferred to it by China, are today capable of nuclear strikes across India.
The sad reality is that successive Governments in New Delhi have virtually hidden such information about the China-Pakistan from the public and Parliament. The dangers of the Pakistan-China alliance have never been extensively and fully discussed in public or by Parliament in India. One might add that we have diplomatically never really mounted a serious and comprehensive expose of Chinese nuclear proliferation internationally. Worse still, the Americans who act as global champions of nuclear nonproliferation, know about this, but have chosen to remain silent. While acting as a great champion of nuclear non-proliferation, the US targets Iran, Libya and North Korea. But, it quite obviously lacks the will to take similar action, when the proliferator is its fellow Permanent Member in the UN Security Council – The Peoples’ Republic of China.
India realizes that in dealing with China, we have to recognize that its GDP is five times ours. Beijing has a developed a sophisticated defence industry and is a major arms supplier across the world. India however, lacks the capabilities and will to provide a key strategic ally like Afghanistan, with even a few pieces of artillery, or indigenous attack helicopters. When we have such capabilities, like on providing Vietnam with potent Brahmos Cruise Missiles, we develop cold feet and get engulfed in endless procrastination. Likewise, it would be foolish for us to seek to match China in assistance and investment, in countries across our neighbourhood in Asia and Africa. Our emphasis has to be on developing Human Resource Capital in partners, while getting involved in projects where we enjoy comparative advantages of location and political acceptability. Our resources and efforts should be closely coordinated with those of partners like Japan, South Korea, Singapore, the US and its European partners.
It is only realistic for us to seek to expand our bilateral economic and investment partnership with China. There is also space for cooperation with Beijing in forums like the G-20 and BRICS. Politically, both India and China are wary of American and European efforts to use issues of “human rights” for unduly intrusive policies of meddling in the internal affairs of others. But, most importantly, China and India have embarked on an effort to develop contacts and confidence building measures between their militaries and border security forces, to see that tensions do not get out of hand by differing perceptions of where precisely the un-demarcated border/Line of Actual Control lies. It is evident that there is going to be no early settlement with China on resolving the border issue. But, it is heartening that the two countries have reiterated their commitment to abiding by the Guiding Principles agreed to between Prime Minister Manmohan Singh and his Chinese counterpart Wen Jiabao in 2005, for settling the border issue.
In conclusion, a few words are necessary on the structure, procedures and processes governing the functioning of our defence establishment and indeed the entire Ministry of Defence. It would be no exaggeration to say that we have an antiquated and dysfunctional structure that determines and administers defence policies. While the British, who bequeathed this structure to us, have radically changed their structures, to provide comprehensive horizontal integration between the Services and the MoD, we remain mired in the past. In our Defence Ministry, a generalist civil service bureaucracy, with little knowledge of tactics, strategy or weapons systems, oversees experienced and tech savvy military officers. The generalist civil service bureaucracy, which is zealous of retaining its position of power with no organizational accountability, has scuttled calls for reforms by the Kargil Review Committee, the Naresh Chandra Committee, of which I was member, and even the Parliament’s Standing Committee on Defence.
One example of bungling and a lack of accountability at the highest levels in the MoD is the crisis we have faced in getting modern artillery after the Bofors controversy. It needs to be stressed that we would perhaps have not succeeded as we did in the Kargil conflict, if it were not for the devastating firepower of the Bofors 155 mm. guns, in the Kargil heights. But, after banning further acquisitions from Bofors, we failed to acquire frontline artillery, because we proceeded to ban virtually every major company in the world, as we looked for an alternative. We then discovered after twenty years that the Bofors Company had provided us the comprehensive designs and transfer of technology in 1986, to manufacture the guns in India, which we are now doing. These vital designs were virtually stored in a cupboard, gathering dust, for two decades, as the country desperately, but inefficiently, sought alternatives from around the world.
There are scores of examples of such bungling, inefficiency, mismanagement and delays in the acquisition and manufacture of weapons essential for national defence. Morale and management in our Defence Ministry and Armed Forces Headquarters reached rock bottom over the past decade. One sincerely hopes this will be addressed seriously, reversed and rectified in the coming years. I am afraid we cannot do so without significant restructuring of the MoD.