Commentaries

Technological and Strategic Implications of MTCR for India

Brig Arun Sahgal, PhD

India on Monday qualified to become member of the Missile Technology Control Regime (MTCR), when the deadline for objection to Indian application expired without any member raising objections, in what is being termed as “silent procedure”. Under the silent procedure lack of objection automatically qualifies an applicant to be a member. India has been in pursuit to join major non-proliferation regimes for two reasons, legitimize its position as a responsible stake holder outside the NPT and more importantly get access to cutting edge technologies to enhance its strategic programmes.

MTCR is one of the four non-proliferation regimes, enacted by group of nations controlling sensitive technologies as part of global non-proliferation effort. The other three are: the Wassenaar Arrangement, the Australia Group and the Nuclear Supplier Group. The Wassenaar Arrangement deals with export control of conventional arms and related dual use technologies. Australia Group focuses on controls on technologies related to chemical and biological weapons. Lastly and most importantly the Nuclear Supplier Group a grouping of 41 countries that seeks to prevent proliferation of nuclear weapons and materials including fuels.
What is MTCR?

MTCR is essentially an export control regime comprising 34 nations with four permanent adherents; Israel, Moldavia, Slovakia and Macedonia, aimed at preventing proliferation of range of equipment pertaining to missile development, production and operations. Prohibited materials are divided into two Categories. Category I systems include missiles, drones and cruise missiles, with payload capacities exceeding 500 Kg and ranges beyond 300 Kms. Category II includes systems not covered in Category I, such as rocket systems (including ballistic missiles systems, space launch vehicles and sounding rockets) and unmanned air vehicles (including cruise missile systems, target drones, and reconnaissance drones etc.). These are subject to same limitations of payload weight and distance as Category I. This category in addition includes a wide range of equipment, material, and technologies, most of which have uses other than for missiles capable of delivering WMD .

India’s relatively smooth entry to a large extent was facilitated by Italy forsaking its veto post resolution of Italian marine controversy and more importantly China which is currently at the forefront of preventing Indian entry into NSG not being a member. Interestingly China although self appointed adherent, applied for MTCR membership in 2004, which was denied owing to its dubious export control records and commitments . China was found to be in violation of MTCR provisions in exporting missile technologies to both Pakistan and North Korea. Both countries missile programs have developed largely on account of Chinese support and munificence. Pakistani cruise and IRBM programs which include ‘Babur’ and Raad’, cruise missiles and Ghauri and Shaeen IRBM’s owe their success largely to design and technologies provided by China.

Implications of MTCR Membership for India

Post 1998 nuclear tests sanctions were slapped on India and critical technologies denied. To illustrate the point three specific cases are discussed.

First is the case of proposed sale of “Arrow II” theatre missile defence interceptor from Israel as part of our attempt to develop indigenous “Ballistic Missile Defence”. The transfer of both the missiles and technology was subject to US approval owing to its contributions in the development of the interceptor technology of the “Arrow II” system. The then US Administration taking its commitment to MTCR guidelines and the possible consequences of such transfers on missile defence cooperation with other states forced Israel to decline the sale even though Israel was willing .

Second is the sale of cryogenic engines and technology from Russia. By late 1980’s US space and strategic community began to conclude that India could be pursuing strategic ICBM program that could pose long term threat to the United States. This programme based on Agni IV/V series or what the American called the “Surya” missiles was thought to be using two stages of PSLV with strapped on third stage derived either from French ‘Victor’ rocket or cryogenic engines from Russia. Russia agreed to supply India both engines and ‘upper stage’ technology (Geo Synchronous Satellite Launch Vehicle or GSLV). The US concerned that this will provide India with a powerful ICBM capability with ranges far exceeding 5000 Km with the ability to strike continental US slapped sanctions on both India and Russia in 1990. These were lifted only in 1993 after Russia agreed not to supply cryogenic technology to India and restrict sale to few cryogenic engines . It is another matter that this allowed India to master cryogenic technology on its own and today it is in a position to launch heavy satellites in space that in future could include manned space missions.

Technology Perspective

Before specifying technological gains for India it is important to highlight obligations under the regime. First is the issue concerning export controls? India will have to not only abide by export control norms specified in the regime but more importantly bring changes to its own export control laws to meet MTCR obligations. It could be a double edged issue which on one hand could restrict Indian exports to non MTCR countries on the other it will make technological access easy owing to complimentary obligations and export control commitments.

Once India is admitted into the Group, all such cases of transfers of technology will not face sanctions and technically India will be in a position to import and export missile and drone technologies. This does not however mean blanket availability; countries controlling technologies will make both political and strategic judgments in terms of impact of the technologies and the end user concerns, in the final analysis it will be a dominant political decision facilitated by larger geo strategic calculations.

It is in the above context, mutuality of strategic interests and growing Indo – US defence relations as a major defence partner could assist India in getting cutting edge technologies which would not have been possible earlier. To highlight the issue sight two specific cases.

India has been developing long endurance drones namely “Medium Altitude Long Endurance (MALE)” and “High Altitude Long Endurance Drones (HALE)” called Rustom I and II with on station endurance capabilities from weeks to a month. India has been facing some critical technological issues in their development. With India now being member of the MTCR group and even more importantly major defence partner it will be possible to get these technologies from the US or to collaborate with other MTCR partners in seeking those technologies.
Next is the cruise missile technology. No doubt India is justifiably proud of its supersonic jointly India – Russian developed “Brahmos” cruise missile, however it’s range had to be perforce curtailed to under 300 Km to meet the norms of the MTCR as India was not a member. Today it is the only operational cruise missile apart from limited import of Klub missiles for the navy which too adhere to MTCR norms. Pakistan on the other hand shorn of any such restrictions developed 400 Km range Land Attack Cruise Missile (LACM) Babur and 700 Km range Air Launched Cruise Missile (ALCM) Raad with active Chinese support and technology both being non members. Similarly China has developed multiple air, sea and land attack cruise missiles with ranges of over 1500 Km and today form an integral pat of its AA/AD strategy.
In India’s case indigenous development of “Nirbhay” cruise missile of proposed 1000 Km plus range has been delayed owing to several technological limitations. Theoretically it will now be possible to bridge these technological gaps with technology transfers from US and others.

Another issue is the proposed sale of “Brahmos” to Vietnam and other countries. With both India and Russia being member states it will draw little attention. To that extent help in meeting Indian arms export targets an important aspect of the current governments defence policy. No doubt however that such sale will be subject of larger geo strategic calculations in particular regional geo strategic calculations. This is something that India alone will take a call, based on its regional interests. China factor as it is sought to be played in the above specific sale has little relevance as China itself has not hesitated in providing similar and more lethal weapons to Pakistan and other Indian neighbours.

There has also been much hype in the media about the MTCR clearing sale of Predators to India. Two issues are important, one as mentioned above if indigenous drones ‘Rustom’s’ technological problems can be resolved under DTTI or other bilateral initiatives then there maybe requirement at best to buy limited number of Unmanned Combat Aerial Vehicles either of Predator variety or Heron TP from Israel as an interim arrangement. Indian interest should not be so much in a particular system but technology. There is however no doubt that India needs multiple variety and range of drones whose development can best be expedited thru easier technology imports.

Finally it is important to note admission into MTCR is a major development that will give a fillip to India’s indigenous missile and space programs. More importantly it recognizes India being a credible stakeholder. Actual transfer of technologies nevertheless will be subject to number of political and constraints of balance of power equations. To that extent, MTCR only opens doors and needs to be seen as a technology facilitator.

OBOR: Economic, Diplomatic and Strategic Dimensions

by Arvind Virmani

OBOR was presented to the world by China in March 2015, as a comprehensive infrastructure & economic development program. Its land component, the new Silk Road, echoes ESCAP’s Asian highway, Asian Railway and Asian Economic Corridor Plans from the 1980s and 1990s. But more importantly it fills in what may be considered missing links, connecting China to the rest of Asia and into Europe. The naval parts echo what was termed the “String of Pearls” in the Indian Ocean, but extends these Westwards to Europe through the Red Sea and Eastwards to the South China Sea. Questions and concerns have however been raised about its less defined Strategic aspects, just as they were raised about the “String of Pearls,” which was also presented as an economic infrastructure project for development of ports.
The economic development part is driven and supported by massive overcapacity in China’s manufacturing and construction industries and zero or negative returns to domestic investment on the margin. Thus the opportunity cost of funds is low enough to allow low profit, high economic risk investment in foreign infrastructure that could support its quest for future raw materials supplies and open its markets to sale of manufactured goods, a modern version of the Prebisch-Singer hypothesis of trade between the colonial “Center” and the colonized “Periphery”. As current account surpluses are a basic feature of the existing “party capitalism” model of development, a moderate reduction of foreign exchange reserves through capital outflows, leaves substantial net foreign exchange assets to finance the foreign exchange costs of these investments. As much of the foreign investment in OBOR will be done by Chinese companies, Chinese labor and Chinese materials, the foreign exchange component is a small fraction of the total cost of these projects. The primary purpose of AIIB is therefore not to supply foreign exchange funds to OBOR projects, but to herald the arrival of China on the global financial state and to act as the foundation for its global financial diplomacy.
The land based infrastructure(road, rail, pipelines, digital backbone) aims to connect China to all parts of the Eurasian continent and to the Seas & oceans surrounding Asia. The countries that such infrastructure passes through(rail, road, pipeline, fiber optic cables) or is located in(port, airport, industrial estate) have to provide the land on which it is built. They may also have to take on debt to pay for part of the real/full cost of this infrastructure. It is uncertain whether the economic benefits they will receive will exceed the costs they incur in terms of land, debts to China etc. I know an economic expert who has been hired by a Central Asian country to evaluate the benefits of a China proposed rail line that will cross its territory, and he was hard put to think of the benefits to this country which may become feasible(eg new exports). OBOR countries have to be extremely careful in evaluating the benefits and costs to them of any infrastructure built by China. The cost of permanently transferring land to Chinese Companies and/or taking on debt on behalf of projects, could prove very onerous in the medium-long term.
If the infrastructure is genuinely economic & not strategic, every country in the World should be able to use it once built, as this improves its economic viability, given sunk cost. So third countries, including India, have nothing additional to gain from “joining” the OBOR which will be built by Chinese Construction/ infrastructure companies. All Commercial companies, including Indian ones, have the option of using the infrastructure(roads, railway, ports, airports, industrial estates) if it reduces costs and improves profitability.
The AIIB is unlikely to be the primary source of funding for the OBOR, which from available numbers, requires funds of an order way beyond the capacity of the AIIB. As the bulk of financing will be domestic currency financing needed by Chinese construction companies, all that the AIIB can do is to provide the fraction of funds needed in the form of foreign exchange. More importantly, the AIIB is(in my view), needed to provide an international stamp of respectability to OBOR projects. This is suggested among other things, by the timing of the announcement of AIIB so soon after the formation of the New Development Bank (NDB) also referred to as the BRICS bank. The agreement to form the NDB was signed in Brazil in July 2014, after years of discussion. China signed an MOU with 24 countries in October 2014 for the formation of the AIIB, five months after the unveiling of the new silk road and three months after the agreement to form the NDB.
A Chinese scholar was recently asked about his estimate of the economic risks and returns to China of OBOR projects. His answer as reported without attribution, was that he didn’t expect repayment of 80% of loans to CPEC projects, while repayment on other OBOR project loans would be between 30% and 50%. It is not too far-fetched to assume that the rest of the benefits to China would be non-economic, i.e. Diplomatic and Strategic.
The OBOR is however, much more than a connectivity cum economic program, it is also a comprehensive diplomatic initiative of a rising China. It is a an instrument of China’s diplomatic objective of ensuring that the Asia and the World recognize China as a Great Power. According to the Virmani(2004) Index of Power Potential (VIPP), China became a “potential great power” about seven years ago, with its economic power exceeding 25% of that of the USA. Its relative economic power has grown rapidly since then to reach 42% in 2015, as per this index VIPP. The OROP is viewed by the party leadership as an umbrella program for interaction with every country in Asia and the surrounding Seas.
The diplomatic initiative can be seen at three levels: Intellectual, Political and Financial:
(1) Intellectual: OBOR provides a framework for interaction with Academics, Think Tanks and Media, interested in economic development, infrastructure investment and trade & economic relations. This can work in both directions; Chinese financed visits of foreign interlocutors to Chinese institutions and invitations for Chinese academics to these countries.
(2) Political: OBOR provides a framework for interaction with the political establishment, including government ministers, of each country. As in the case with intellectuals and academics, the Chinese can facilitate the visits of foreign politicians to China for the purpose of discussing OBR. It provides a very useful cover for Chinese experts to explain their national position on every issue, including the South China Sea, Japan and USA.
(3) Financial: Every government minister is looking for funds to relieve budget constraints and finance pet projects. OBOR provides a framework for Chinese officials (party, govt) concerned with Chinese economy to interact with their counterparts in potential host countries, on their projects programs and economic development objectives. At some stage it also involves the highest political authorities such as the Finance Minister and the Prime Minister/President of the country, allowing China’s views on any subject of their choosing to be heard respectfully.
Announcements of large financial projects and Programs attract widespread attention of all segments of society, even without any hard economic & financial analysis to determine viability. The personal contacts built during discussions can also be used to finance individual pro-China leaders, politicians & others, as allegedly happened in some S E Asian countries.
The general strategic objective of OBOR is to increase its influence in the countries covered, to reduce US influence in these countries, and to pre-empt any potential increase in influence of US or its allies, existing or future. More concretely, the goal is to establish a strategic presence in these countries, including through sale of military equipment. The strategic dimension of OBOR has two clear components. The continental and the maritime:
(1) Continental: This takes the name of the old silk road’s disparate tracks across Central Asia, and applies the name to a “Hub and Spoke” system of highways and railways radiating from China at its Center or Hub. Given that oil pipelines and fiber optic info-ways exist then, this is obviously a modern and valid add-on to traditional highways. Given China’s dependence on imported energy, the oil and gas pipelines are particularly important for diversifying both sources and supply routes for energy. The immediate strategic objectives are, (a)To secure Central Asian and other neighboring Islamic States (Pakistan, Afghanistan, Iran) from becoming a base for Xinjiang Liberation Movements, and (b) A revival of the old “Great Game”, to develop land routes from continental Asia to the Indian Ocean (through the Bay of Bengal, Arabian Sea and Gulf of Iran).
(2) Maritime: As silk is associated with China and the “Silk road” with connectivity, the Maritime dimension has disingenuously been called “Maritime Silk Road”. The “maritime silk road”, clearly represents an evolution of what many called the “String of Pearls” strategy. All analysts agreed “String of Pearls”, agreed that what had been done and planned so far was primarily economic. However, those who were most suspicious about the “string of Pearls” warned that it was not just possible, but likely for these Pearls to transform into strategic bases once the economic part was developed. The “Maritime Silk road” concept has brought this potential development right into the present. The strategic maritime dimension of OBOR is to develop a string of logistics basis in the Indian Ocean region, with likely conversion in future, of a few of them into naval bases. From China’s perspective, the most desirable geographical locations for naval bases are those at the intersection of the “Maritime silk road” and the “New silk road” i.e. those Ports that can be connected by overland route to China.
The post World War II, Marshall Plan was explicitly designed to help the revival of devastated European allies and to complement the makeover of Germany in its own image. This paid good social, economic and diplomatic dividends to the USA. However it was complemented by creation of NATO & other military blocks explicitly designed for Strategic purpose. Eventually each complemented the other, even though they may not initially have been part of an integrated economic, diplomatic and national security strategy.
OBOR is presented to the world by China, as an infrastructure & economic development program. It is in reality an umbrella for a comprehensive but evolving, Economic, Diplomatic & Security strategy. It is part of a “Middle Kingdom Doctrine” (authors characterization) that seeks to make China the Central power in Asia: A super power that dominates Asia and its surrounding Seas and Oceans & exercises varying degrees of “suzerainty” over peripheral areas (including less well off parts of East Europe). One strategic implication of this doctrine is to reduce and eventually eliminate US strategic power and influence in Asia

Modi-Abe summit: Shaping the Indo-Pacific

By Amb. Hemant Krishan Singh

At their bilateral summit in Tokyo a year ago, Prime Ministers Narendra Modi and Shinzo Abe had laid the foundations of an entente among Asia’s leading democratic powers and pledged to together “shape the course of their countries and the character of this region and the world in this century”. Since then, regional strategic competition has deepened and security concerns have grown amidst unilateral assertions of hegemonic power. At their summit meeting in New Delhi on December 12, 2015, Modi and Abe have responded decisively to this growing challenge by announcing a multi-sectoral and action-oriented partnership for peace and prosperity of the Indo-Pacific, reflecting the broad convergence of their nations’ long-term political, economic and strategic goals.

The Joint Statement on India and Japan Vision 2025 concluded at the summit is remarkable for its strategic resolve, clarity of purpose and joint actions to realise shared objectives. It marks a qualitatively new phase of the India-Japan strategic partnership with vast region-wide ramifications.

The document sets out new and expanded principles for realising a peaceful, equitable and rule-based order across the Indo-Pacific. In addition to democracy, the rule of law and an open global trade regime, these principles now include respect for sovereign equality and territorial integrity, peaceful settlement of disputes and freedom of navigation and overflight. The underlying concerns are unmistakable: both countries are at the receiving end of China’s territorial claims and regional stability has been undermined by China’s unilateral assertions in the South China Sea. Asia’s emerging powers need a normative regional security order to constrain such coercive threats. Acting together, and in concert with trilateral partners like the US, India and Japan can provide reassurance to regional states and strengthen the role of the East Asia Summit in upholding a stable order.

To further strengthen the bilateral strategic partnership, Modi and Abe have outlined concrete actions in defence, security, economic and cultural fields. The more salient among these bear elaboration.

The conclusion of agreements on transfer of defence equipment and technology and protection of military information are designed to deepen defence cooperation. Japan is now the only country with which India has instituted military staff talks among all three components of their respective defence forces. And Japan will henceforth become a regular participant in the India-US Malabar naval exercises, strengthening interoperability among these trilateral partners to meet maritime security challenges in the Indo-Pacific.

The agreement for cooperation in the peaceful uses of nuclear energy, reached after five years of difficult negotiations, has been rightly highlighted by Modi as the “shining symbol of mutual confidence and strategic partnership in the cause of a peaceful and secure world”. It carries extraordinary significance, given the high sensitivity of nuclear issues in Japan’s domestic discourse and doctrinaire commitment to the Treaty on the Non-Proliferation of Nuclear Weapons. To paraphrase the Japanese spokesperson, this would not have been possible but for the special bonds between PMs Abe and Modi. While it may still take time to finalise technical details and complete internal procedures, this agreement opens up the prospects of cooperation for meeting India’s vast needs for clean energy, including in conjunction with partners like the US and France.

With the announcement of major decisions on economic cooperation, Japan is set to play an even more decisive role in India’s economic transformation. In Modi’s words, “no friend will matter more in realising India’s economic dreams than Japan”. From the introduction of Japan’s Shinkansen technologies to the wider modernisation of India’s railways, enhanced support for industrial corridors to larger foreign direct investment (FDI) inflows for Make in India, summit outcomes have expanded the horizon. With the provision of $12 billion in ODA (official development assistance) soft loans for the Shinkansen project and another $12 billion pledged by Nippon Export and Investment Insurance and Japan Bank for International Cooperation to promote Japanese FDI, the roughly $35 billion of public and private financing promised under the Japan-India Investment Promotion Partnership is well on the way towards realisation.

Summit decisions on advancing people-to-people relations are welcome steps that will help create solid bonds for future relations.

The Modi-Abe summit has added new dimensions to India-Japan cooperation for regional peace and stability, enunciating normative principles, calling upon states to avoid unilateral actions in the critical waterways of the South China Sea and launching regular bilateral consultations on maritime safety and security of source lines of code. Modi has extended unequivocal support for Japan’s recent legislative measures to enhance its “proactive contribution” to global peace and security, which have opened up prospects for greater defence and security cooperation. Hopefully, the comprehensive and medium-term action plans envisaged in the Joint Statement will eventually include India-Japan maritime security cooperation across the expanse of the Indo-Pacific.

Modi and Abe are frequently referred to as like-minded “nationalist leaders”. What is left unsaid is that they are leaders of nations that uphold democracy, universal values and pacific principles, and whose nationalist urges are not based on notions of irredentism and regional dominance. The India-Japan strategic partnership seeks to uphold the peaceful and orderly rise of a multipolar Asia and strategic equilibrium rooted in the established principles of international law. And this partnership encourages restraint and moderation in managing overlapping and sometimes conflicting major power interests peacefully in order to secure Asia’s economic progress and prosperity.
Abe and Modi are truly aligned in their vision to raise the economic prospects and strategic relevance of their respective nations. To borrow from a phrase of Abe, the India-Japan relationship has unbounded potential to determine Asia’s destiny.

The writer is a former ambassador of India to Japan and a professor at the Indian Council for Research on International Economic Relations, New Delhi

Courtesy: Business Standard

India and Japan : A Symbiotic Mutualism Relationship

By Somindu.S.
Ahmedabad, 12 December 2015

The short yet most path breaking Abe’s visit inspired me to look at some of the parallel developments and how Modi-Abe partnership is transforming the bilateral relationship and who are the key people to watch for.

Modi is fond of PPP model and incidentally Prabhu, Parikaar and Piyush (PPP) are cornerstone of ‘Make in India’ through their respective portfolio. Coupled with Modiplomacy led by Sushma Swaraj, the team is working hard to transform India. Unfortunately our friends in mainstream media do not even find amusing to focus on this. Let us take case of Railway Minister Suresh Prabhu and Japan.

Prabhu’s Japan Visit

Suresh-Prabhu

When Suresh Prabhu visited Japan in low profile short September visit, he was surprised how Japan received him. While everyone knows Japan was keen for Shinkansen project after losing out one in Indonesia, what Prabhu wanted was more than that. He was very candid in his interactions with his Japanese counterparts. He clearly told them, if I see you as partner then I want you to be my partner in many other things also not just Shinkansen. In his one daylong interaction with various stakeholders he shared his vision on India-Japan rail cooperation. The meetings ranged from industry heads to financial institutes to Government heads and R&D departments and with his counterpart ministers. Everywhere Prabhu presented his ideas as per the positions of counterparts.

Japanese sides were all keen ears. In normal old days, they would be polite not to confront nor agree but would tell him what more India had to do and then things would remain status quo. Indian officers would then blame it on over cautious Japan and minister would return.

Speed of Bullet Train:

Shinzo-Abe-Japan

But this time, something spectacular was about to happen. Next morning, Railway Minister went to meet PM Abe and to his surprise he saw many of the familiar faces by the sides of Abe. The same people with whom he had long discussion yesterday. Abe made his team read out what Japan would be willing to offer. To Prabhu’s pleasant surprise it enlisted all the points shared by Prabhu in such beautiful way that he never even thought of. Starting from tech transfer on existing Rail infrastructure to R&D cooperation to extremely attractive loan.

To put the things in perspective not only this was unprecedented but also would be path changing. Elated Prabhu told Abe. “Mr. Prime minister there is a race of speed now. I am not sure, what is faster, speed of Bullet Train or Indo-Japan relationship”. Abe could only smile and it conveyed that besides speed Japan is also known for reliability and safety. Prabhu told his counterpart which echoed both Modi and Abe’s vision on India-Japan relationship. In bilateral relations globally, there are no two countries that can claim a bond that India and Japan shares. Prabhu emphasized this point and explained that many a time when you negotiate with other countries, you initially have to spend energy in negating some past negatives before you can move to work on positives. With Japan and India there is zero negatives and hence we can put our energy on constructing the positives.

The Crisis of Past

JaiShankar

Having said that, it is a time to look at another aspect of India-Japan relationship.

To people who have been following Indo-Japan relationship know that all was well on surface but if you dig deeper, India was a very far country for Japan.

While there were no negatives, there were no common positives as well. The relationship hit the lowest nadir and suddenly India looked bad for Japanese leadership in 1998 just after Vajpayee government did the Pokhran test. Japan being only country in the world to be have gone through the horrors of nuclear attack are always sensitive. But what surprised the world especially Indian authorities was reaction of Japanese PM Hashimoto (a known Sinofile, or China sympathizer). He condemned India in most stern words and also joined sanctions. This was the toughest time for India-Japan relationship. There was one officer in Indian Embassy in Tokyo the Deputy chief of Mission. He worked arduously behind the scene with officers in Delhi. While Vajpayee Govt was busy in bringing America in tune with changing world geo political reality. The Japan team was busy in dousing the unexpected fire.

The man on Mission The deputy chief of mission then was Mr. S. Jaishankar. The quiet upright man with impeccable understanding of Japan, (his wife’s home country), was working hard to restore the normalcy in India-Japan relations.

While India was getting USA on her side, political wind in Japan was also flowing differently. Hashimoto had to resign and subsequently Mori faction of Liberal Democratic Party won the mandate, let by Mori himself. India by the time realized to have friends across political spectrum to keep bilateral relations not getting hijacked. Jaishankar worked very hard behind the scene to do the same. New breed of young politicians and some old who were scared of China’s might saw sense in India’s resurgence. Current PM Abe then was young politician but like Modi he was also post war born leader and had a very different idea on India. Jaishankar had found a good friend in him. Jaishankar and his team finally succeeded when PM Mori landed in Delhi in year 2000 and told Vajpayee that India and Japan were now strategic partners. Interestingly today in Joint press conference Jaishankar as India’s foreign secretary was in the midst of action where Modi and Abe announced that India-Japan strong relationship is unparalleled in the world now. He must be happy to know how far the relationship has travelled and he now as foreign secretary has to build on a strong foundation.

The Author Diplomat

Vikas-Swarup

In 2012, Narendra Modi as CM of Gujarat, on July 26 visited Kansai region and was received by extremely energetic Consulate General of Osaka. The pleasant diplomat was one of the few who had a very good command over language and was popular among both Japanese and Indian community. Vikas Swarup the Oscar fame author and wonderful communicator was in charge as consulate general (CG) of Osaka. Modi landed in Osaka in afternoon from Nagoya. In short time available to him at Kansai, CG Swarup had arranged plentiful. The first program was round-table interaction with Industry captains of Kansai region (whose economy is bigger than Canada). So impressed was Modi with this program that he spoke out of turn in the end to thank profoundly CG and organizing bank that gave him an opportunity to meet investors directly and learn few things from them. The stay in Kansai was very different from Tokyo and very warm for Modi. A town hall meeting with Indian community to next day official visit to Hyogo Prefecture, CG had done his job to the perfection. Now as a chief Spokesperson of India, Vikas Swarup is close to PMO, and he remains India’s finest communicator. His credentials were so high with Japan that even previous PM Manmohan Singh entrusted him to negotiate successfully for historic visit of Emperor couple’s visit to India. No doubt when it comes to Japan, he is another person Modi can lean on.

And the Gujju Connection:

Sujan-Chinnoy

Gujarat and Japan has deeper connection when it comes to student exchange. Gujarat university and Osaka’s Otemon Gakuin University has one of the oldest student exchange program running for last 46 years now. Every year two students from India and Japan spend three months in respective countries. The program has produced many Indofile and Japanofile over a long period. Early 80s, a student named Sujan Chinoy visited Japan under the exchange program and did exceedingly well. Later he joined foreign services and has been India’s one of the best diplomats with versatility in many sports, arts and language. His closest stint to Japan came, when he was Consulate General of India in Shanghai.

December 3, 2015 he took position of Ambassador designate to Japan. (he is yet to go through the credential formalities, due to PM Abe’s visit). Long back, there were two other ambassadors from India Dr. Seth and Dr. Asrani who went to Japan as a student. H. E. Chinoy will actually be the first from India to have deep understanding of both Japanese and Chinese. In fact he is the only Indian diplomat with hands on experience on national security and China of more than two decades. He is man of action and has left lasting impression wherever he has been posted. His last posting was in Mexico. Not only it will be easier for him to communicate with Japanese in their own language, he will be able to do the same smooth and candid talking with Indian PM in his own mother tongue. The next 2-3 years are very crucial as Japan breaks out of old mold and makes unprecedented exception for India. India will have to equally flexible. Be it defense cooperation or civil nuclear technology, something totally unthinkable even five years back is taking shape. I would say Ambassador Chinoy’s posting has indeed come at a right time. Considering his counterpart in India H. E. Hiramatsu is policy veteran and security expert, India and Japan would be looking to break many status quo within their own policies and push governments from both ends to do more.

I would like to conclude by quoting PM Abe’s words. “A strong India is good for Japan and Strong Japan is good for India”. There is nothing that describes better a symbiotic relationship of mutualism than this statement. The two nations complement each other in perfect ways. Both Japan and India have common problem in China. Both the nations have one neighbor respectively who is source of nuclear weapon. On economy front, Japan’s ageing population needs India’s young talent and huge pile of Japan’s underutilized Capital needs a better deployment option such as for India’s Infrastructure needs.

For many years, Aid from Japan was single point in Indian diplomacy. In recent years, Investment joined Aid. Now as we Usher in Modi-Abe Era, the relationship has truly become multifold. From make in India to Malabar exercise, From Defense cooperation to DFC, from UN reforms to Uniting against Chinese hegemony in Ocean routes. A lot is on the plates. I can only say the Symbiotic relationship of mutualism is only going to go stronger.

Courtesy: Desh Gujarata Website

India’s Soft Power Advantage

Deeply entrenched factors make India a uniquely attractive great-power partner.Writes Kadira Pethiyagoda

During Prime Minister Tony Abbott’s recent visit to India, he was asked to justify Australia’s signing of a deal to sell uranium to the country. In response, the prime minister said, “India threatens no one” and “is the friend to many.” This was no mere diplomatic nicety, but a carefully chosen answer based on India’s international image. It is an image that is rare amongst great powers of India’s size and strength, and will give Delhi a unique soft power advantage in the future multipolar world.

Much of the globe sees India as a relatively non-violent, tolerant and pluralistic democracy with a benign international influence. Its values are seen as largely positive.

The U.S., with its Indo-U.S. nuclear deal, accorded India special treatment in nuclear cooperation. The deal provided benefits usually reserved for Non-Proliferation Treaty (NPT) signatories. Washington justified cooperation with India by highlighting Delhi’s impeccable non-proliferation record. This stance was replicated by other states, including the Nuclear Suppliers Group (NSG) member states who allowed India’s participation in international nuclear commerce and supported the Indo-U.S. deal. The NSG decided to re-engage with India following an India-specific safeguards agreement with the International Atomic Energy Agency (IAEA). The IAEA’s Board of Governors endorsed a nuclear safeguards agreement with India by consensus that would permit Delhi to add more nuclear facilities to be placed under the IAEA safeguards framework. India did not have to have an Additional Protocol like the non-nuclear weapons states who are NPT signatories. India also received favorable treatment from Canada (which agreed to supply “dual-use items” that can be used for civilian and military applications), Japan and South Korea.

This cooperation was not merely driven by these states’ strategic relationships with the U.S. Russia has long cooperated with India on nuclear technology. Even China, as a member of the NSG, did not oppose the group’s decision on India. Today, India is the only known nuclear weapons state that is not part of the NPT but is still permitted to engage in nuclear commerce globally.

India’s reputation extends beyond its nuclear posture. Since independence, the country has been viewed as a neutral and harmless power by most foreign audiences, particularly in Africa, the Middle East, South America and Southeast Asia. This is in part due to its prominent role in the Non-Aligned movement. Whilst Delhi’s reputation in its own neighborhood is quite different, South Asian states do not see India as a threat in the way that many of Russia or China’s neighbors view those powers. Even long-time nemesis Pakistan is unlikely to have been as adventurous in its dealings with its much larger and more powerful neighbor had it not had firsthand experience of Delhi’s restraint – even before Islamabad had nuclear capability.

So what is behind India’s benign image? In part, it is self-created. For 60-plus years Delhi has favored cultivating the impression of a non-violent India. This is particularly clear in the realm of nuclear posture. Despite having tested weapons in 1974 and 1998 and being a non-signatory to the NPT and Comprehensive Test Ban Treaty, India has been one of the most vocal advocates for global disarmament. It has arguably been the most passionate anti-nuclear campaigner amongst the world’s nine known or suspected nuclear weapons states, with one of the world’s most notable pleas for global disarmament made by Prime Minister Rajiv Gandhi at the U.N. in 1988.

The pursuit of this image continued a decade later, even after the Pokhran II nuclear tests. BJP Prime Minister Vajpayee stated that the tests were not a repudiation of the disarmament goal. In the Draft Report on Indian Nuclear Doctrine, the very first sentence of the first paragraph describes the use of nuclear weapons as the “gravest threat to humanity and to peace and stability.” The paragraph goes on to criticize the virtual abandonment by states of the goal of disarmament.

Delhi sought to avoid labels of hypocrisy by positioning itself as the “reluctant nuclear power.” India argued that the bomb was a last resort in a world of threatening nuclear states who make no pledges to refrain from first strikes and the use of nukes against non-nuclear states. Somewhat legitimately, Indian leaders asserted that the country’s nuclear weapons could act as bargaining chips to support its global disarmament agenda. India was said to have more credibility as a nuclear weapons state with itself having something to sacrifice in order to usher in global disarmament. India declared that its security would be enhanced and not diminished in a nuclear free world.

Delhi also sought to project an image of non-violence in other areas of foreign policy. In relation to the norm of “Responsibility to Protect,” India voiced support for those aspects of R2P that encouraged and supported states to protect their own populations, and expressed extreme caution at R2P’s coercive side. When some of the world’s greatest debates over intervention occurred at the U.N., Indian ambassadors drenched their speeches with the language of non-violence.

This preciously guarded national image is not merely a strategic ploy to increase India’s soft power. Policymakers wish the country to be seen as non-violent, pluralistic and tolerant, because India genuinely holds these values. Within the nuclear realm the influence of non-violence is seen through the foot-dragging in relation to integrating nuclear weapons into military strategy and in relation to serial production of weapons. A further sign of this influence is the long public debate before going nuclear – a rarity amongst nuclear powers. We have seen repeatedly that India’s leaders find it morally inconceivable that nukes could ever be useable tools of war. Delhi’s disarmament pleas were not merely PR: they consumed valuable diplomatic resources including precious stage-time in international forums. More broadly, non-violence affected for India’s relatively restrained conduct in several conflicts with Pakistan.

When it came to humanitarian intervention, over the last 25 years India’s opposition or support was directly related to the level of intrastate violence entailed in intervening. This was true regardless of who was intervening in whom, for what reason, and whether there were strategic gains in it for Delhi. This included interventions in Iraq, Libya and Syria. India’s opposition to intervention was compounded by its pluralistic worldview, with acceptance of all regime types.

It would seem that India’s values of non-violence, pluralism and tolerance stem from the independence era, when the country’s foreign policy and modern identity was crafted. Mahatma Gandhi made India’s independence movement synonymous with non-violence. First Prime Minister Jawaharlal Nehru imbued morals into his external relations. But if the values influencing India’s foreign policy took shape only then, they would have fizzled when Congress lost power. Instead the values have remained, as has the resultant global persona.

This is because the values that help guide Indian foreign policy and underpin its image are rooted deep in the country’s cultural history. These values attained dominance during the formative stage of Indian civilization – the period between the Vedic era and medieval times when the greatest empires arose. India and China are the only modern great powers that have held a largely continuous culture for several millennia. Ancient India’s cultural connection to its present-day manifestation is far stronger than ancient Greek, Roman or Anglo-Celtic culture is to present-day Western states, or the ancient Middle Eastern civilizations are to today’s Arab world.

It remains to be seen how India’s international reputation will fare as its strategic interests expand throughout the Indo-Pacific and beyond. With some diplomatic craftsmanship, Delhi can convert its somewhat ethereal values-based soft power advantage into hard strategic and economic gains. Modi’s government seems to have recognized this and is building on Congress’ initiatives to enhance India’s public diplomacy toolkit.

India’s soft power has rare characteristics when compared with the other great powers of the emerging multipolar world: U.S., China, Russia, Japan and Europe (as a unified entity). Its relatively neutral, non-threatening image will make India a uniquely attractive great-power partner for countries looking to hedge against future fallout between the U.S. and China, and not wanting to antagonize either superpower. Australia has chosen a wise time to solidify ties with one of the world’s most dynamic rising powers.

Dr. Kadira Pethiyagoda is a former diplomat whose PhD and upcoming book investigated Indian foreign policy. He was a visiting scholar at the University of Oxford.
Courtesy: The Diplomat

Defence Minister’s One Year Positive Record

By Brig Gurmeet Kanwal, Visiting Fellow, VIF

During his first year in office, Defence Minister, Manohar Parrikar gave a free hand to the army to act pro-actively on the LoC. He led from the front and worked closely with the leadership of the armed forces, the bureaucracy and his counterparts in the other ministries to put defence preparedness back on the rails and give a fillip to the stalled process of military modernisation. He put to use his management skills to set the right priorities for the Ministry of Defence (MoD) and the armed forces and the results have been good. However, defence preparedness and military modernisation continue to need his urgent attention.
The foremost item on the Defence Minister’s agenda for the NDA government’s remaining years in office should be to hasten the process of addressing the ‘critical hollowness’ plaguing defence preparedness – a term used by General V K Singh, the COAS, in the letter he wrote as COAS to the then Prime Minister in May 2012. Major operational voids in the war establishment of the three must be made up early in order to optimise combat efficiency.
Large-scale deficiencies in ammunition and important items of equipment continue to hinder readiness for war and the ability to sustain operations over anticipated time periods. The army reportedly has some varieties of ammunition for barely ten days of conflict and it will cost Rs 19,000 core to replenish stocks. It will be recalled that during the Kargil conflict in 1999, as many as 50,000 rounds of Bofors ammunition had to be imported from South Africa. The occurrence of such a situation during a time of crisis must be avoided through a prudent replenishment and stocking policy.
Modern wars are fought mostly during the hours of darkness, but most of the infantry battalions and many of the armoured fighting vehicles – tanks and infantry combat vehicles – are still ‘night blind’. Warships, submarines, fighter aircraft, light helicopters, artillery guns, ground-based air defence, command and control, surveillance and reconnaissance systems, are either held in inadequate numbers or bordering on obsolescence.
Among the structural reforms that need to be implemented in an early time frame the most important issue is the appointment of a Chief of Defence Staff (CDS). This appointment was first recommended by the Arun Singh committee on defence expenditure in the early 1990s, and then by the Group of Ministers led by Mr. L K Advani that reviewed the recommendations of the four task forces on the management of national security, assembled following the submission of the Kargil Review Committee report. This crucial appointment has been hanging fire due to the want of a political consensus and differences within the armed forces. Recently, the Naresh Chandra committee has recommended the appointment of a permanent Chairman of the CoSC as a more acceptable alternative.
The appointment of a CDS should be followed a few years down the line by the raising of tri-Service integrated theatre commands so as to ensure the ‘joint’ formulation and execution of operational plans. It has now been accepted by all modern militaries that ‘jointness’ or ‘jointmanship’ leads to the optimisation of single-Service combat capabilities. Also, the Army, Navy and Air Force HQ have been only notionally integrated with the Ministry of Defence (MoD) and are still ‘attached offices’ for all practical purposes. The civil-military heartburn and the consequent weakness in functioning caused by this lacuna must be removed forthwith.
Modernisation of the armed forces has been stagnating due to the inadequacy of funds, the black-listing of several defence manufacturers and bureaucratic red tape. The Defence Minister has taken positive steps on these issues. Approval of necessity (AON) has been accorded to defence acquisition projects worth approximately Rs 100,000 crore. Though only a few contracts have actually been signed, including the purchase of Apache attack helicopters and Chinook medium lift helicopters, the process has been set in motion.
The issue of black listing has been addressed by instituting a system of penalties for the infringement of rules. A committee led by Dhirendra Singh, former Home Secretary, was appointed to review the Defence Procurement Procedure (DPP). The Minister has begun to implement its recommendations in earnest. For example, the policy on offsets has been reviewed and several pragmatic amendments have been made.
The armed forces are now in the fourth year of the 12th Defence Plan (2012-17). It has still not been formally approved with full financial backing by the Cabinet Committee on Security (CCS). The government has also not formally approved the long-term integrated perspective plan (LTIPP 2007-22) formulated by HQ Integrated Defence Staff. Without these essential approvals, defence procurement is being undertaken through ad hoc annual procurement plans, rather than being based on duly prioritised long-term plans that are designed to systematically enhance India’s combat potential. These are serious lacunae as effective defence planning cannot be undertaken in a policy void. The government must commit itself to supporting long-term defence plans.
The government must relinquish its monopoly on defence research and development (R&D). The DRDO should undertake research in strategic technologies that even the closest strategic partners are unwilling to share; e.g. ballistic missile defence technology. The MoD should progressively move away from its excessive reliance on the inefficient public sector for defence production. The defence PSUs should be gradually privatised to make them more efficient and quality conscious.
The private sector must be encouraged and incentivised to contribute to the national quest for self-reliance in defence production. Through the implementation of the Prime Minister’s vision to ‘make in India’, plans for military modernisation must lead to substantive upgradation of India’s defence technology base and manufacturing capability, or else the country’s defence procurement will remain mired in disadvantageous buyer-seller, patron-client relationships. No new defence acquisition should be undertaken without insisting on the transfer of technology (ToT).
The NDA government has done well to announce its intention to allow defence exports. Formal instructions to give effect to this policy should be issued early and it should be ensured that India abides by the provisions of the Arms Trade Treaty even though it is not a signatory to the treaty. The national aim should be to make India a design, development, manufacturing and export hub for weapons systems and other defence equipment in the next 10 to 15 years in conjunction with the country’s strategic partners.
Financial management too needs a major overhaul. The defence budget has dipped 1.74 per cent of the country’s GDP despite the fact that Parliament’s Standing Committee on Defence and the armed forces have repeatedly recommended that it should be raised progressively to 3.0 per cent of the GDP if India is to build the defence capabilities that it needs to meet future threats and challenges and discharge its growing responsibilities as a regional power in Southern Asia. The budgetary allocations earmarked on the capital account for the modernisation of the armed forces will continue to be surrendered unless the government sets up a rolling, non-lapsable defence modernisation fund of about Rs 1,00,000 crore under the Consolidated Fund of India.
The relatively softer issues that can adversely affect the morale of soldiers, sailors and airmen have also got the Defence Minister’s attention. Approval has been accorded for the construction of a National War Memorial at India Gate in New Delhi and for the long-pending ‘one rank, one pension’ (OROP) proposal, though not to the satisfaction of the Veterans. To his credit, the Minister has taken steps to reduce the number of cases that the MoD is fighting in various courts against retired armed forces personnel, especially those against disabled Veterans.
Key personnel issues that merit the Minister’s attention include the large-scale shortage of officers and the grossly inadequate availability of accommodation for married personnel. The Defence Minister must also make certain that the Seventh Pay Commission resolves all the anomalies of the last two pay commissions that have led to disaffection in the armed forces and have added to the civil-military divide.
Overall, in his first year in office, the Defence Minister has gained the confidence of the armed forces, shaken the MoD bureaucracy out of its decade-long slumber and initiated several policy measures that will enhance defence preparedness. He has also succeeded in giving a much needed fillip to military modernisation. He follows an informal approach, consults widely, encourages discussion and is quick at decision making – hallmarks of good leadership. He is likely to continue to strive towards enhancing defence preparedness and giving the highest priority to undertaking military modernisation.
The writer is Visiting Fellow, VIF, and former Director, Centre for Land Warfare Studies (CLAWS), New Delhi.

Courtesy: VIF Website

Fighting the Islamic State: Role of the P-5 Nations and India

By Gurmeet Kanwal
November 23, 2015

In the course of one week in November 2015, militants from Abu Bakr Al-Baghdadi’s self-proclaimed Islamic Caliphate – also called ISIS, ISIL and Daesh – struck multiple targets in Beirut, Paris and Mali. Earlier, on October 31, ISIS claimed to have brought down a Russian civilian aircraft flying from Sharm al-Sheikh to St. Petersburg.

The ISIS militia, numbering between 20,000 and 30,000, now controls approximately 300,000 square kilometre of territory straddling the Syria-Iraq border. Its brand of fundamentalist terrorism is gradually spreading beyond West Asia and the militia is slowly but surely gaining ground. In Africa, ISIS fighters and their associates have been active in Algeria, Lebanon, Libya, Mali, South Sudan and Tunisia in recent months. Boko Haram, the militant Islamist group in Nigeria, has pledged allegiance to ISIS.

Fighting Back
Recent acts of terrorism have steeled the resolve of the international community. Significant help is being provided to the government of Iraq by the US and its allies. The Peshmerga, forces of the Kurdistan Regional Government (KRG) which had captured oil-rich Kirkuk, have joined the fight against the ISIS and recaptured the Syrian (Kurdish) border town of Kobani.

The US began launching air strikes against the ISIS militia about a year ago, while simultaneously arming anti-Assad forces like the Free Syrian Army with a view to bringing about a regime change in Syria. The US has been joined in this endeavour by Australia, Britain, Canada, Denmark, France and Netherlands as well as five Arab countries (Bahrain, Jordan, Saudi Arabia, Qatar and the United Arab Emirates). The air strikes have resulted in substantial collateral damage. It is being gradually realised that the ISIS militia cannot be defeated from the air alone.

Putin’s Russia joined the fight on September 30, 2015 with the twin aims of defeating the ISIS and destroying anti-Assad forces. However, the initial air strikes launched by the Russian Air Force were directed mainly against the forces opposed to President Assad of Syria. Russian ground troops are also expected to join the fight soon. The Russians have also descended on Baghdad to establish a military intelligence coordination cell jointly with Iran, Iraq and Syria – a move that has not been appreciated by the Americans.

In a rare show of unity after the Paris attacks, the United Nations Security Council passed a unanimous resolution stating that “The Islamic State in Iraq and the Levant constitutes a global and unprecedented threat to international peace and security,” and called upon all member states to join the fight against the ISIS.

Diplomatic moves have been initiated to coordinate operations and work together for peace and stability in the region. The US and Russia agree that the objective of their interventions should be to end the civil war in Syria through a political deal and that both Iraq and Syria should retain their territorial integrity. They also agree that the ISIS extremists must be completely eliminated. Iran has agreed to join the negotiations to resolve the conflict in Syria. However, while the political objectives are similar, the methods being used to achieve them are different and are designed to extend the influence of each of the protagonists in the region.

Implications for South Asia
Al-Baghdadi has openly proclaimed the intention of ISIS to expand eastwards to establish the Islamic state of Khorasan that would include Afghanistan, the Central Asian Republics, eastern Iran and Pakistan. The final battle, Ghazwa-e-Hind – a term from Islamic mythology – will be fought to extend the caliphate to India. An ISIS branch has already been established in the Subcontinent. It is led by Muhsin al Fadhli and is based somewhere in Pakistan. Some factions of the Tehrik-i-Taliban Pakistan have declared their allegiance to al-Baghdadi. Afghanistan’s new National Security Adviser, Mohammad Hanif Atmar, has said that the presence of Daesh or the ISIS is growing and that the group poses a threat to Afghan security. And, some ISIS flags have been seen sporadically in Srinagar.

Instability and major power rivalry in West Asia do not augur well for India’s national security and economic interests. Combined with the increase in force levels in the Indian Ocean, the heightened tensions in West Asia may ultimately lead to a spill-over of the conflict to adjacent areas. India now imports almost 75 per cent of the oil required to fuel its growing economy and most of it comes from the Gulf. The long-drawn conflicts of the last two decades of the 20th century had forced India to buy oil at far greater cost from distant markets, with no assurance of guaranteed supplies. The 1991 oil shock had almost completely wrecked India’s foreign exchange reserves. The situation could again become critical. Oil prices had shot up to USD 115 per barrel in June 2014, soon after the Caliphate was proclaimed, but have since stabilised around USD 50 to 60 per barrel.

Since the early 1970s, Indian companies have been winning a large number of contracts to execute turnkey projects in West Asia. The conflict in the region has virtually sealed the prospects of any new contracts being agreed to. Also, payments for ongoing projects are not being made on schedule, leading to un-absorbable losses for Indian firms involved, and a dwindling foreign exchange income from the region.

India also has a large Diaspora in West Asia. A large number of Indian workers continue to be employed in West Asia and their security is a major concern for the government. Some Indian nurses had been taken hostage by ISIS fighters, but were released unharmed. All of these together constitute important national interests, but cannot be classified as ‘vital’ interests. By definition, vital national interests must be defended by employing military force if necessary.

US officials have been dropping broad hints to the effect that India should join the US and its allies in fighting ISIS as it poses a long-term threat to India as well. India had been invited to send an infantry division to fight alongside the US-led Coalition in Iraq in 2003. The Vajpayee government had wisely declined to get involved at that time as it was not a vital interest.

It must also be noted that India has the world’s third largest Muslim population. Indian Muslims have remained detached from the ultra-radical ISIS and its aims and objectives, except for a handful of misguided youth who are reported to have signed up to fight. This could change if India sends armed forces to join the US-led coalition to fight the ISIS militia.

Prime Minister Narendra Modi proposed at the G-20 summit in Antalya last week that the war against terrorism must isolate and contain the sponsors and supporters of terrorism. He clearly implied that India is willing to join the international coalition against the ISIS and other non-state actors. Besides contributing to the global war against terrorism, India’s participation would help to isolate the Pakistan Army and the ISI – the foremost state sponsors of terrorism.

Direct Indian military intervention against the ISIS militia would depend on the manner in which the situation unfolds over the next one year. It could become necessary if ISIS is able to extend the area controlled by it to the Persian Gulf as that would affect the supply of oil and gas from the Persian Gulf to India – clearly a vital national interest. For the time being, India should cooperate closely with the international community by way of sharing information and intelligence and providing logistics support like port facilities if asked for. India should also provide full diplomatic support and work with the United Nations for evolving a consensual approach in the fight against the ISIS.

A concerted international effort is needed to first contain and then comprehensively defeat the ISIS and stabilise Iraq and Syria, failing which the consequences will be disastrous not only for the region, but also for most of the rest of Asia and Europe. Helping the regional players to gradually eliminate the root causes of instability will not be an easy challenge for the international community to address. As an emerging power sharing a littoral with the region, India has an important role to play in acting as a catalyst for West Asian stability.

The author is former Director, Centre for Land Warfare Studies (CLAWS), New Delhi.

Courtesy: IDSA Website

The Game Changer

A look at DTTI, an important element in building deeper Indo-US defence ties

By Brig. Arun Sahgal (retd)

Defence Technology Transfer Initiative (DTTI) has emerged as the centrepiece to build deeper Indo–US defence cooperation. The initiative, which is part of a recently signed Defence Framework Agreement 2015, is aimed at assisting India in creating a strong defence industrial base and concomitant ecosystem. The broad objectives are:
• Strengthen bilateral relationship to strategic levels, given the converging strategic interests of both the countries in Asia-Pacific.
• Assist India in developing credible military capability to support both countries’ regional interests.
• Help strengthen Indian defence industrial base through technology transfer or sharing on the basis of co-development and co-production.
Both India and the US are committed to push this unique initiative that aims at moving bilateral relationship to a higher strategic trajectory. As mentioned earlier, the overall objective is to provide cutting edge defence technologies that include both co-production and more importantly, co-development. Both sides have taken nascent steps in identifying some path-breaking technologies essentially aimed at pushing the process forward. Based on interactions with stakeholders on the Indian side, there is a clear commitment to move forward. Despite these positive developments there, however, exist some perceptional gap both in terms of understanding what DTTI means in practical terms and future roadmap.

Indian perspective is being shaped by the growing asymmetry against China and declining conventional edge vis-a-vis Pakistan, primarily owing to lackadaisical modernisation and complete lack of transformational effort.

Capability development is suffering on account of acquisition oriented decisions based on long-winded and dodgy qualitative requirements, and excruciatingly time-consuming processes, hampered by corruption. Seen in broader strategic construct, this is taking its toll in denying Indian military the capabilities required to emerge as a net regional security provider. It is against this backdrop India looks at the initiative in addressing India’s critical ‘technological’ needs.

Indian Perspective of DTTI
Indian defence ministry remains committed to the concept of DTTI as a means of gaining critical strategic technologies from the US that will help propel India’s defence industrial ecosystem towards self-sufficiency, addressing critical technological needs, what with India emerging as an arms developer and exporter from being arms acquirer over a period of time.

For the Indian ministry of defence (MoD), DTTI represents a commitment by the US in assisting India build a credible defence industrial base and capability through hi-technology infusion. Thus, it looks upon DTTI as the route to getting critical technologies that they are finding difficult to indigenise, or time consuming, for e.g. up-gradation of GE 414 for Tejas Mk II.

This thinking is driven by the core ‘Make in India’ perspective, the sole purpose of which is to ‘manufacture or assemble’ big-ticket projects in India with technology absorption from abroad. Hence, the interest in critical game-changing technologies like gas turbine engines for aircraft, nuclear propulsion technology, Electro Magnetic Aircraft Launch System, etc.

In working the DTTI initiative, nonetheless, there are apprehensions with regard to technologies on offer and the constraints of the US arms control laws. In the perception of the MoD the whole initiative appears to be US industry driven and not so much as an American government initiative. This perception is based on the fact that out of earlier 17 technologies on offer 12 were industry driven, four by the US government and only one joint R&D and subsequent production. Whereas there is acceptance that the majority of technologies are incubated in the private sector, however, it is argued that for development of credible bilateral relations, the US government would need to push these companies for technology transfer co–production initiatives. Simply put, the perception that the US government has no hold on these MNCs is not bought, as a large number of development funding are provided by the US government which also decides on export control laws.

(Courtesy: Force Magazine)

What they didn’t discuss!

By Mohan Guruswamy

With the global economy showing no signs of recovery and with the Chinese economy turning out to be weaker than previously expected, Prime Minister had a well publicized meeting of the usual suspects to discuss lifting the economy out of the morass it finds itself in. He had a bevy of top private sector honchos, some sarkari economists, some FinMin bureaucrats and a handful of PSU bosses and the RBI governor.

From what has been reported the meeting went the usual way. Such meetings usually end up seeking magic wand solutions and the magic wand most in demand was an interest rate cut. To be sure some others wanted tax cuts and more exemptions ostensibly to make them more competitive. With some big holders of Non Performing Assets (NPA’s) in attendance, this rate cut demand will soon be translated into reducing the debt burden by applying the reduced rates with retrospective effect. Businessmen will be businessmen and success to them comes by not passing up any opportunity for a little gain? But there are no magic wand solutions to our predicament.

India’s crisis has been in the making for a very long time now. Our GDP has acquired the profile of a post industrial economy, which is excessively skewed towards the service sector, in turn giving our economy a post-industrial look despite not having industrialized in any significant way. 52% of China’s GDP comes from industry, while it is exactly half that for India. Agriculture employs 58% of our workforce and now contributes about 15% of our GDP.

In absolute terms the number of people in agriculture has doubled since the advent of reforms in 1991. It just means that in relative terms more people got poorer. In other words, as the supply of labor kept increasing the rise in wages did not keep pace with the cost of living, and hence a critical and most essential expansion of the market did not take place.

This is not to suggest that the reform process was wrong. On the other hand the reform process never really got underway, as beyond scrapping the Industrial Licensing Act of 1951 and dismantling the DGTD, little happened. Everything else including “social control” of banking remained as it is. Instead of patronage being sold at Udyog Bhavan, the place where it is dispensed is now in North Block, which is closer to South Block than Udyog Bhavan ever was.

All those who became spectacularly rich after 1991 mostly became so due to public assets, whether under the ground or in the skies, being allocated to them at ridiculously low rates. The logic that these surpluses will be invested back in the economy didn’t work, because capital flows to where it is easier deployed, meaning abroad. With a few exceptions, these overseas expansions have been largely funded by accumulating NPA’s at home. According to a recent report released by UK Trade and Industry (UKTI), the U.S. remained the largest source of inward investment, with a total of 564 projects in 2014-15, followed by France (124 projects) and India (122 projects). That year the UK attracted over one billion pounds as FDI, giving you some idea about the scale of investment from India.

That India was not significantly buffeted by the crisis of 2008 and seems equally well insulated from the current crisis, does not suggest strength but primitiveness of the economy. China’s economy is thrice as big as India’s and it is twice as integrated into the world economy than us. China’s foreign trade to GDP ratio is now over 70% and twice as much as ours. Then again China has a much higher value addition factor and hence when the sea rolls harder it needs to absorb more shock. So we need not be sanguine about our situation.

When the Americans were bombing Vietnam’s logistical system, they found that it had little effect as most of the war supplies from the north to the south went by head loads and on bicycle pillions. So bombing a bridge or a railroad junction didn’t do much to stop the Vietnamese war effort. Our economy is in a similar situation. If we were as dependent as China is on exports we too would have been buffeted by the outside world. But these macro issues would not have been discussed. The NPA people would have wanted relief and when they are breaking biscuits with the Prime Minister in his premises, the bankers present would have registered the signals.

Not surprisingly India doesn’t face anywhere as near an immediate crisis as China does. Our crises are more systemic in nature and need a long-term perspective. Our first great challenge is to create 12 million new jobs each year, to make the demographic dividend an economic dividend. We are nowhere near that. To be able to create millions of more jobs, we need to make huge capital investments. This can only come from the State. Private capital is locked into an April 1 to March 31 perspective, and so to expect them to take a long-term view of investment is unreasonable. The question now is whether there was any advice forthcoming from the participants on how the government should go about improving its investment to GDP ratio, which in turn depends on the savings to GDP ratio?

The state of the Central Governments Public Sector Undertakings is pathetic. The private sector manages to hold its head above water by better management of the environment and its resources, and also by constantly rolling over debt. But it is the public sector that is a bigger part of our economy. In 2014 the total capital employed in the 383 CPSU’s is a huge Rs.330, 626 crores, with an additional Rs.881, 774 crores as long term loans, almost all of it from government financial institutions and from the central government directly.
These companies together have a market capitalization of Rs.1, 106,657 crores. Of these CPSU’s, 202 were profitable registering a cumulative profit of Rs.153, 907 crores, and 124 had losses amounting to Rs.49, 612 crores. They also employ 15.59 lakh workers and managers. This investment generates a turnover of Rs. 14,13,992 crores or about 10% of our GDP.
The 41 PSU’s in the oil, coal and power three sectors together provided Rs.100, 369 crores or 65.22% of PSU profits. If you keep these three sectors aside, the rest of the PSU’s together earned about Rs.1000 crores. This is a sorry state of affairs.
Soon after he assumed office, Narendra Modi indicated plans to do more with state-controlled companies than use them as piggy banks to break into whenever the government needed a revenue boost. He said he had plans to sell off the traditional laggards and to fix the ones with potential. He also signaled the government had plans to privatize state-run firms and unfetter them from the clutches of the middle bureaucracy of deputy and joint secretaries. There is no sign of this any of these happening.

One thing I am fairly certain they would not have discussed is the flight of capital from India. According to Global Financial Integrity, a Washington DC based research organization, the total illicit financial outflows from India between 2003 and 2012 were $439 billion —$94.8 billion of that in 2012 alone. There is no sign of this abating. Since so many of the players in this game had come together under his tent, this would have been a good time for the Prime Minister to broach the subject of re-investing some of that capital in India?

Responding to Pakistan’s Challenge

By Brig. Arun Sahgal

Reams are being written about lack of India’s Pakistan policy or more specifically policy to impose costs for waging relentless proxy war through terrorist organizations, subversion in Kashmir and indigenous Indian organizations like SIMI and IM. These terrorist outfits are being subverted by ideologically driven radicalism.

This is coming about in the face of open provocations by the likes of Hamid Gul who are challenging India to respond in kind if it has the gumption. NSA, in his recent remarks in Mumbai has talked about ‘proportionate response’ to Pakistani provocations but the larger question is options in the face of calculated Pakistan strategy of provoking India.

Years of neglect and impervious political decision making has resulted in non development of credible asymmetric capabilities even as Pakistan continues to blame India for activities in Karachi or Baluchistan. There is no point in crying over spilt milk, these asymmetric capabilities will require time and political resolve to develop. This leaves India very much with the option of punitive conventional response. There is a tendency among the strategic community which percolates to policy makers that conventional Indian response that could provoke Pakistan’s nuclear thresholds. This notion needs detailed analysis and Pakistan’s bluff called.

India needs to unequivocally declare that India’s see’s unabated proxy war as breakdown of conventional deterrence and reserves the right to appropriate military response. Mere articulation will not be enough? India’s standoff military or what is euphemistically called “non contact” capabilities must be exploited and demonstrated. This will require close coordination between intelligence agencies and the armed forces. Possible option could be targeting various elements of terror network and their support structures which can be internationally highlighted as state sponsored. No doubt there will be noise and brinkmanship by Pakistan and even some military action, it will be important for Indian state to not only ride these out but inflict retaliatory punitive costs. What is being proposed is cross border strikes on targets (not merely camps) which India believes supports the terror network.

Second is developing capability and capacities for “Myanmar Raid” like operation. Action will be required to degrade surveillance and communication systems, backed by credible force insertion capability. Without going into too much details idea is to demonstrate will and resolve. These actions must be initiated in the backdrop of limited mobilization of conventional forces and quick response if so required. There is no doubt that Pakistan will respond by some sort of military action however surprise and speed of action backed by credible retaliatory capability will provide requites payoffs. This will require orchestration of operations both at military and national levels including diplomatic shaping of environment. The notion that Pakistan is operating on interior lines is a myth. With recent redeployments in Northern and Western commands adequate forces are available for quick response backed by credible and deterrent air power, which must be the backbone given are relative air superiority.
There are many other options which can be considered to demonstrate Indian will and resolve. These no doubt have escalatory nuances, but what is the point of raving about conventional superiority if it cannot be leveraged. There is perception in Pakistani military elites whom the author has been meeting in Track II Dialogues over last three years that India has no response to proxy war and conventional escalation can be checkmated by battlefield nuclear weapons. It is this myth India will have to challenge and debase. No doubt it carries a risk but sooner than later Indian state will have to demonstrate this resolve if it does want to be subsumed by rising tide of radicalism and Pakistan’s state sponsored terror. If any lessons are to be drawn we should look at what happened in 1971 war and how Pakistani forces capitulated against Indian manoeuvre and resolve. The doctrine of ‘retribution’ already stands vindicated in the NATO and American air strikes against ISIL in Iraq, Syria and Libya.
Perception of Sino – Pak collusion is overplayed particularly the two front war. Chinese are pragmatic; they realize the scenario of ongoing India – Pakistan confrontation is going to be harmful to its one road – one belt policy on which hinges its economic development and extended sphere of influence. Any precipitate action by Chinese will surely and firmly push India into American camp a development which will be grievous to its Asian and global ambitions. Pakistan it must be realized is a bit player with nuclear weapons, who’s utility in the “Great Asian Game” at best is marginal. From Chinese perspective strong Indian economic and military power which is antagonistic to China will be antithesis to its ambitions. Therefore it will be nuanced player which can be balanced by broader Indo – Pacific partnerships that India is attempting to evolve. Put simply there are limits to which China will go in supporting Pakistan?

So coming back to Pakistan, I am afraid in the developing scenario, India should go through the current round of bilateral negotiations with Pakistan impressing upon them the consequences of its support to cross border terror and the proxy war. It is very unlikely Pakistan will take heed, knowing a little about their thinking and mindset. It is when they try and exploit our perceived weakness India should retaliate suddenly, resolutely and without respite. Message of retribution and costs must be driven home.

Last word; such a policy or option cannot succeed without bipartisan support. This is an imperative. In its resolve to take military action perpetrated by Pakistan; nation must stand firm and united. Unless we develop such credible response capability and political resolve India will continue to bleed not only in J&K or Punjab but across its length and breadth. Indian dream will be truly and fully become unrealizable.

Brig Arun Sahgal, PhD (Retd)
Executive Director
Forum for Strategic Initiative
E Mail – brigarun.sahagl@gma