India and different international Blocs
INDIA-ASEAN
India recently celebrated 25 years of partnership with ASEAN and has elevated its relationship to strategic level in the past 5 years. India’s relationship with ASEAN is pivotal to the success of the Act East Policy which seeks multi-dimensional cooperation with ASEAN countries. The India-ASEAN partnership is based on the pillar of 3Cs- Connectivity, Commerce and Culture.
Why ASEAN for INDIA?
- Economic Cooperation: The service market of south-east Asian tiger economies and the trade in goods and services have been a characteristic feature of India’s Look East policy and aims to be strengthened through the Act East
- Maritime Security: India and ASEAN desire to share cooperation to ensure a free and open Indo-Pacific conducive to economic engagements and secure from traditional and non-traditional threats. China’s extra-regional presence in the Indian ocean and the South China sea claim heighten the importance of maritime security
- Cultural Cooperation: India and ASEAN have rich cultural links that are leveraged for intra-regional tourism and to enhance people to people connectivity.
- Development of North-East: ASEAN remains a pivotal player in ensuring connectivity and development of north-eastern states. As the act east policy iterates, India looks east through north-east
Why India or ASEAN?
- Maritime Security
- Balancing China: ASEAN countries are heavily dependent on China in defence and infrastructural development. China’s peaceful rise and cheque book diplomacy have invoked a desire among ASEAN to seek a better balance of power in South Asia through increased strategic cooperation with India
- The market for their goods: ASEAN benefits heavily from economic cooperation with India and has seen its trade surplus soar over the years.
- Cheap Labour: India also provides cheap labour to South East Asia particularly in the skilled IT sector and service sector.
Economic Cooperation:
The ASEAN Economic Community (AEC) agreement has 4 basic pillars of engagement: competitive economic regions, equitable economic development, a single market and production base and integration with global economy
The RCEP agreement seeks to reduce tariff and non-tariff barriers between India and ASEAN nations with greater impetus to provide free trade between nations.
The ASEAN Framework Agreement on Services has the potential to enhance trade in services an area of key concern for India with its large quantum of skilled employees in the service sector.
Global Production Networks (GPN) aims to promote parts or component industries of India and ASEAN countries. This would help bridge technology requirements in electrical machinery, vehicles and professional and scientific equipment.
Connectivity Projects
Kaladan Multimodal Project: India-Myanmar connectivity project to enhance the connectivity of North-East regions through Myanmar.
India-Myanmar-Thailand Trilateral Highway
Defence Cooperation
Maritime Security: As per the Delhi Declaration, India and ASEAN countries has enhanced maritime cooperation and security in the Indo-Pacific to guard against traditional and non-traditional threats. All nations committed to freedom of navigation particularly in the context of extra-regional presence of China in the Indo-Pacific
Counter-Terrorism: The Delhi declaration between India and ASEAN states focuses on combating terrorism, disrupting terror networks, tracking cross border movement of terrorists and monitoring recruitment of terrorists through the internet
Cultural Cooperation
Buddhism: India’s rich Buddhist heritage is shared by the South-East Asian nations that has a large Buddhist population. The common cultural linkages can be leveraged to promote tourism and people-to-people exchange between countries.
Conclusion
India has always looked East to see the nurturing sunrise and the light of opportunities. The peace and stability of the Indo-Pacific is hence indispensable to India’s future.
RCEP
A mega free trade agreement between ASEAN countries and 6 regional countries including India, China, Australia, Japan, South Korea and New Zealand to liberalize investment, reduce tariff and non-tariff barriers to trade and remove service trade restrictions. Such a move is seen to induce positive competition among manufacturers and service providers with the consumer ultimately benefiting with a wider range of choices at affordable prices.
Concerns regarding RCEP
- High Trade Deficit: A free trade agreement (FTA) would force India to reduce import tariffs thus bourgeoning its trade deficit with South-East Asian nations and particularly with China given the presence of cheap Chinese goods in Indian market
- Competition from Domestic Industries: The RCEP would provide South East Asian nations and China with a concessional tariff rate market that might cause tough competition for India’s domestic industries in pharma, medical, textile and dairy sectors even in public procurement
- E-commerce Issues: Asymmetrically disadvantageous to India as most data servers are located outside India who are able to process the information and acquire data intelligence that becomes a valuable economic resource.
- IP Laws: Japan and South Korea are pushing for TRIPS plus which are stricter terms for IP as compared to current TRIPS regime followed by India in accordance with WTO. A stricter IP regime in the RCEP would be disadvantageous to India’s generic medicine industry.
- Service Trade: India aspires to liberalize service market of RCEP bloc to leverage its demographic dividend. However, several of the countries including Australia have put restrictions on the immigration and temporary movement of service personnel into their country
Obstacles to Trade and Investment between India and ASEAN
- Poor Physical Connectivity: Maritime and air routes to South East Asian nations are not robust enough to accommodate an increased flow goods or commodities from India to South East Asia
- Lack of Competitiveness: The complex tax structure, poor technology and production methods have held back Indian manufactured goods from gaining access to South-East Asian nation markets
- Differential Environment in South-East Asia: Multiple countries are at differing levels of socio-economic development which necessitates SMEs adopt a country-specific supply chain strategy
- Lack of Research and Development: Low R&D means low innovation or diversified products while it also affects profitability and efficiency in production. This reduces market for Indian goods in ASEAN
- Chinese Presence: China has outsourced a large quantum of its production to CLVT countries which has dented the prospects of Indian exporters
- Political Issues like the South China Sea between ASEAN nations that hurt free navigation prospects
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Way Forward
- ‘Make in India’: SMEs need to be incentivized to produce more within India. The tax structure and compliance shall be eased to enhance their competitiveness in the global arena
- FDI relaxation: Foreign direct investment can enable technology upgradation to enhance efficiency in the production of SMEs enabling increased profitability
- The recent relaxation in the SRBT sector is an opportunity for the same
- Improving Connectivity: India can focus on existing road and rail connectivity projects and establish multi-nodal links with SEAN countries.
- Trilateral National Highway – India, Myanmar and Thailand: The Indian government plans to extend it to Laos and Vietnam under the Dawei project
- Kaladan multi-nodal project – Kolkata with Sittwe port for the movement of cargo through sea route extending to Laos, Cambodia and Vietnam
- Line of Credit: India has proposed a line of credit of 1billion$ to promote physical and digital connectivity with ASEAN
United Nations
Introduction
As the principal multilateral organization of the world, the United Nations presents India with a global platform to cooperate, to raise issues, to participate democratically and to voice the concerns of the developing world. In the era of the Asian Century, India’s voice can only growth within the UN.
Conclusion
After 70 years of meaningful partnership, the growth of India’s democracy, economy and global reputation render democratization of the United Nations an inevitable scenario. India can no longer a mere representative of the third world but shall raise to a leadership position to solve issues of climate change, poverty, protectionism and terrorism that the world faces today.
SAARC
Ever since its inception, SAARC has failed to achieve its stated objectives of an integrated peaceful South Asia owing to problems of instability, terrorism, non-cooperation and difficult geography. An analysis on what ails the South Asian Organization is pertinent to revamp its functioning to achieve the slated goals
Issues
- Pakistan as an irritant
- Consensus-based organization finding it difficult to reach common ground
- Issues of terrorism, insurgency and instability
- The least integrated region in the world
- No regular meeting due to political and controversial issues between nations that as per its rule book cannot be discussed
- India’s predominance as a big brother alienates other member countries
Way Forward
Reform working of SAARC: SAARC’s procedure of working may be changed to eliminate avenues for unilateral scuttling of agendas. This can ramp up multi-lateral pressure on Pakistan
Conduct Regular meetings: SAARC must follow the example of ASEAN and conduct regular meetings to achieve political consensus on issues that plague South Asia and evolve cooperation on them
Cultural Diplomacy: SAARC countries must leverage their cultural similarities and draw inspiration from ancient civilizations of Islam, Buddhism and Hinduism that connect them emotionally.
Policy of Asymmetrical Engagement: India must not assert its supremacy over smaller countries in the neighbourhood. As elucidated in the Gujaral Doctrine, it must shed its big brother attitude and be accommodative of diverse and independent aspirations of sovereign units of South Asia
Conclusion
The working of SAARC needs to be reformed to ensure that plurilateral decisions can yield pressure on non-cooperating countries. A mix of pressure and incentives can help achieve the slated goals of politico-economic integration and a peaceful South Asia.
BRICS Summit: Xiamen
- Agenda set to focus on member countries coordinated approach towards meaningful multilateral trade in view of rising protectionism in the world
- Global Governance, Internet, Counter-terrorism, Energy and National Security are other topics for discussion
BRICS Areas of Cooperation
- New International Economic Order: Fortaleza Declaration
- BRICS has established the New Development Bank to provide credit for infrastructure and development projects in backward regions of developing member nations
- BRICS has set up a Contingent Reserve Agreement (CRA) to provide liquidity to its member nations at the time of economic crisis and short term BoP pressures
- BRICS nations are contemplating setting up a Cross-Border Inter-Bank Payment System as an alternative payment system to the SWIFT as a backup to secure the independence of financial institutions in BRICS nations
- Social and Labour Sphere:
BRICS countries have pledged to develop harmonious policy in matters of employment, skill development and training, free flow of labour, workers’ wages, security and working conditions.
As a part of cooperation in labour matters, BRICS Network of Labour Research Institutes and BRICS Social Security Cooperation Framework for cooperation on social security issues are utilized.
- Counter-Terrorism: The Johanessburg Declaration of BRICS nations urged cooperation to dismantle organized crime rackets, stop terror financing, initiate efforts of counter-radicalization and thwart recruitment and travel of terrorists
- Communication: The BRICS cable of optical fibre network has been put in place to provide secure and fast communication between member nations
Shanghai Cooperation Organization
Introduction
India has been inducted as the newest member of the SCO along with Pakistan. The multi-lateral organization can be used as a platform to engage with hitherto untouched and unengaged countries of Central Asia evolving as India’s Pivot to Eurasia.
Prospects for India as a Member of SCO
- Boost to Connect Central Asia: The Central Asian countries have hitherto remained unconnected physically and economically with India. SCO can serve as a platform to serve the economic integration of Central Asia with India.
- Achieve consensus and cooperation on INSTC connecting India with Central Asia countries including Russia
- Counter-Terrorism: The main agenda of SCO being security-oriented, all member nations will gain from the counter-terrorism cooperation and intelligence sharing with each other. Most of the member countries including India suffer from terrorism across its borders
- Regional Anti-Terrorist Structure of SCO
- Qingado Declaration affirming the commitment to fighting terrorism, extremism and separatism calling for a unified global terror front under the coordination of UN
- Bridge with Pakistan: SCO can serve as a buffer in the Indo-Pak relations neutralising tensions and putting added pressure on Pakistan to act against terror emanating from within its borders
- Maintain Strategic Autonomy: With major powers Russia and China in the SCO, India can rebalance its strategic autonomy in the geopolitical arena that appeared to be waning following the LEMOA agreement with the U.S.
- Military cooperation with members of the SCO
- Energy Security: The TAPI Pipeline and SAGE from Iran offers opportunities for India from central Asia to meet its rising energy needs
- Boost to India’s projects in Central and West Asia: The Chabhahar and the Golden Quadrilateral infrastructure projects can be boosted with India’s entry into SCO
- Cooperation in Cyber Security
Challenges in SCO
- Presence of Russia and China: India’s agenda may not receive much support in the SCO given the overwhelming presence of 2 major powers viz. China and Russia.
- China’s membership aspirations for SAARC: India’s entry into SCO may justify China’s own demand for membership to the South Asian regional grouping
- Issues with China: India has a multitude of issues with China- territorial, anti-terror and free navigation that may sour the cooperation that can be achieved through this multilateral platform.
- India refused to sign the paragraph reaffirming commitment of SCO nations to China’s Belt and Road Initiative
- Balancing its relation with U.S: Mandated as a security organization, the military cooperation of member nations of SCO especially Russia may jeopardise India’s relations with the U.S
- Pakistan as an irritant
Conclusion
The SCO provides a pivotal opportunity for India to evolve a policy towards Eurasia with a Central Asia core.
The Commonwealth
Commonwealth refers to a group of countries that were initially under the British colonial rule but later on achieved independence and sovereignty from the British Crown. The Commonwealth group still remains and constitutes third of the world’s population and a fifth of the world’s landmass.
Current Advantages of the Commonwealth
- Wide Representation: Commonwealth enjoys 3rd of the world population and hence increased cooperation can help fight global causes such as climate change, urbanization and sustainable development
- Institutional Similarity: Most of the commonwealth countries have borrowed heavily from the colonial empire’s administrative and political framework. They are hence able to better cooperate and arrive at common solutions for the same
- Brexit: Britain’s departure from the EU has left a vacuum that India seeks to exploit both politically and economically. The Bilateral Trade and Investment Treaty(BTIA) and high-level political talks point towards India’s interest for the same
- Expanding its Geo-political Footprint: For a rising India, the commonwealth is the perfect platform to demonstrate its leading power as it provides avenue for expanding its geopolitical footprint from the Caribbean to East Asia
Issues in India-Commonwealth Relationship
- Lower Priority: India has accorded lesser priority to the commonwealth at the expense of enhancing its relations with its neighbours, major powers and the South-East Asian nations. This is reflected by India’s absence in last 3 commonwealth summits
- Relic from the Past: The grouping is purely on the basis of historical lineage to the British empire and does not reflect current geopolitical dynamics
Dimensions of Cooperation
Commonwealth Blue Charter to sustainably develop and conserve the ocean as a key ecological functionary as well as a trade route to enable economic linkages between nations.
Commonwealth Cyber Declaration to achieve a secure cyberspace through international cooperation and harmonization of laws
Agenda for Trade and Investment to boost capital, labour and flow of goods and services between commonwealth nations in the era of protectionism.
Way Forward
In the changing global geopolitical arena, India and Britain needs to resurrect the Commonwealth as it holds the key promise of a multilateral platform that brings several developing countries together. It must then take up collective causes of sustainable development, climate change and other international issues.
APEC
The extra-regional presence of China in the Indian ocean and the growing economy of India enables it to aspire for the APEC membership despite not being part of the geographical entity of Asia Pacific.
Why India to gain APEC membership?
- Market: India is a huge market for the APEC producers of goods and services. This can foster trade-based relationship with APEC nations.
- Cheap Labour: India can also provide these countries with human capital at cheaper rates if service liberalization is also on the agenda
- Maritime Security: India’s position of South Asian centrality overlooking the Indo-Pacific entails great strategic advantage to the APEC entity in ensuring freedom of navigation vital to trade
- Energy and Marine Resources of India can be harnessed to provide for the geo-political entity
Concerns for Indian Membership
- Geographical entity: India not part of Asia Pacific
- IP rights issue: India’s generic drug industry
- Domestic Industry: Cheap imports from APEC member nations may flood Indian markets that debilitate the domestic industry. India may be forced to eliminate tariffs and domestic requirements clauses
- Protectionism: Growing protectionism in member nations like the US raise concerns of service sector liberalization that India desires for its skilled population
- E-Commerce: The asymmetrical nature of data server location deprives India of data intelligence which is the oil in the 21st century
Conclusion
With the evolving reference to Indo-Pacific in diplomatic echelons, India’s case for APEC membership now appears more pertinent than ever. The market the APEC provides and gains by accommodating India may prove to be a win-win diplomacy in times of protectionism.
