A war on the world economy: Trade War

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A war is a struggle for dominance, supremacy, power. It is fought to further one’s own interest and influence the adversaries from taking action against our interest.

Trade war is also a kind of a weapon in the armoury of a nation which a county employs to pursue its own agenda. Though it is not a war in a conventional sense where state fights with arms and ammunitions, but still lives are lost and world as a whole suffer because of it.

Trade war is a situation where a country retaliate by raising monetary and non-monetary barriers on imports from warring country. It emanates from the philosophy of protectionism, which believes in raising bars on imported goods so as to push domestic production which will further increase the domestic economic growth.

Since the time of mercantilism this philosophy of raising barriers against imports of other country has been going on and because of it many battles has also been fought all around the world during that time be it the Anglo – Dutch war or Franco – Dutch war.

This protectionism and mercantilism philosophy also gave rise to the philosophy of colonialism whereby a country started colonizing other countries so as to secure the supply of raw material and to get a ready market for the goods that colonizing country produced.

But as the world entered the 20th cent., it faced the greatest challenge because of this protectionist ideology in form of World War 1 & 2 where the old lords (Brits & French) didn’t give enough space to the emerging order (Germany, Italy & Japan) to trade and form their own colonies, which led to the rise of Hitler, Mussolini and imperialist Japan thereby creating a chaos all around the world.

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After these bloody wars, countries around the world learnt from the past mistakes and started opening up their economies for trade and first among them was the US, the torchbearer of capitalism and free trade, also WTO (World Trade Organization) was created to promote multilateral agreements, free trade and to adjudicate disputes among nations,

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This new experiment bore great results as world as a whole grew at a pace never experienced before and people across the globe started getting prosperous, also due to strong trade ties among the nations, mistrust was reduced along with the wars thus making the world a global village in true sense.

But in 2008, due to cyclical downturn, recession hit the world and it was exacerbated due the US subprime crises which took the whole world into its grasp, leading to people losing their jobs, businesses getting shut down and thereby hitting the growth of world economy and reducing it to -1.68 % in 2009 as per IMF.

This lead to anger among the people who lost their fortunes, their future and everything, this anger culminated into election of right wing leader’s around the world, be it in the US, Italy etc. on a promise by them to make their country great again.

These right wing nationalist started pursuing their policies of increasing barriers on imports single-mindedly, just to please their voter bank and completely ignoring the long term impact of these policies on the world.

For example, in US first decision of incumbent government was to scrap the Trans pacific agreement and also it gave threats to terminate NAFTA, similarly decision of Brexit was also largely influenced by this protectionist mindset and not giving free access of its markets by the Chinese is adherence to this philosophy.

Though it’s the mandate of every government to safeguard the interest of its domestic sector and to bring prosperity for it’s people and for that protection of domestic sector is required.

For example imposing antidumping duties on products imported from countries like China, who have a tendency to charge prices way lower than the price of the same product in domestic market, so as to increase their market share in foreign markets at the cost of injuring domestic competitors.

Same is the case with countervailing duties which are imposed to protect the domestic sector from unfairly subsidized imports.

Though some amount protectionism is must, but hyper protectionism is bad for world economy and worse for the domestic sector.

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The new world order is based on the philosophy co-operation but trade wars are taking the world towards isolation.

Trade war depicts shot sightedness of policy makers who believe in short term benefits while completely ignoring the long term ill impacts like reduction of global productivity due to lack of specialization, increasing disputes among nations and mostly the fear of global recession and an eventual depression.

It better to follow the due process of law rather than taking a unilateral actions basis one’s perception, as against a unilateral actions of one nation, rest of the world would react in equal proportion.

Right now its happening with China and US

Though the claim about Chinese manipulating their currency, playing with the system of free trade by putting restriction on import and giving excessive subsidies to its manufacturer is true to a large extent, but not following the due course of justice through WTO adjudication and by increasing barriers unilateral by US has agonized the dragon leading to a retaliation from them.

This retaliation by both of them will be harmful because the world is still limping back from the impacts of 2008 recession even after a decade, and now due to this unnecessary trade war, we are again on verge of another recession.

Morgan Stanley has predicted that world will witness another recession in 2020

Signs of which are already in front of us. Unemployment rate in India has touched 45 years high and growth in car sale hitting a low of two decades, in US, University of Michigan sentiment index was pushed down the most in almost seven years. Germany is also showing the signs of initial weakness in labour market and sentiments in UK is battered by the uncertainty related to Brexit.

Free and Fair trade is the backbone of this new world and we as the resident should strive to protect it at all cost.

As it is said that war is never a solution, only dialogue is, hence a dialogue should be promoted among countries on platforms like World Economic Forum, G20 meets, IMF and World bank events, where each country should be given the right to put forward it’s point of view and a mutually agreed solution should be arrived.

More awareness should be given to people about the cons of a trade war, so that politicians can’t manipulate them for petty political gains.

Process of negotiating multilateral agreement at WTO should be expedited so as to reduce friction between nations and to save the institution from becoming irrelevant.

Also nations of the world should join hands against the aggressor of this economic war, so as to deter countries from going down this lane

Only if the world can learn from the mistakes made in the past and truly understands the benefits of co-operation then only we can save our economy from this impeding downturn and save our world from the next world war.

Permanence of temporary provision : Article 370

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In tough times of 1947 when all the 560 odd newly independent British provinces had the choice of either going with Dominion India/Pakistan or to remain independent, the province of Jammu & Kashmir under Raja Hari Singh choose to remain independent.

This was a state with majority Muslim population ruled by a Hindu ruler and was on the border of both India and Pakistan.

Jinnah the creator of Pakistan argued that the Muslim majority state should join the separate land for Muslim but this proposal was rejected by the Maharaj. So to force it’s incorporation the Afridi tribe with support of the Pakistani administration attacked the the newly independent province.

This tumultuous scenario forced the hand of Raja Hari Singh to request for help from India as the state was incapable to defending itself from this likely invasion.

India under Pandit Nehru did offered the support on a condition that the state will sign the instrument of accession which the King readily agreed to. This is how the State of Jammu & Kashmir became integral part of Union of India.

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Article 1 which states that “India i.e. Bharat shall be a Union of State” implies that all the states including the State of Jammu & Kashmir are integral part of India.

Similarly the preamble of constitution of Jammu & Kashmir also recognises the state to be integral part of India.

Being a secular personality and to prove the world that India is a democracy in true sense, the government back then decided to heed to the instrument of accession and incorporated Article 370 into the Constitution of India.

Article 370 “Temporary provision with respect of State of Jammu & Kashmir” which is in line with Instrument of accession gave some special powers to state including having its own flag, state citizenship and a separate state constitution.

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Accordingly the state constitutional assembly was incorporated which debated and finalized a state constitution which among other provisions provided for Article 35A making it compulsory to be a citizen of the state for purchasing land in the state.

Though article 370 was meant to be a temporary provision until the state is fully integrated into India but it was being dragged even after 70 years of independence.

This special status to a state was not acceptable to a certain section of Indian society and the demands to repeal it started to make rounds.

As the support for repealing this article grew over the years, many parties including a national party incorporated this wish in its manifesto for the election.

Within 90 days of coming to power with a strongest mandate in recent years, BJP government under Modi- Shah duo implemented their plan and unilaterally changed the status of the state overnight.

The government took a leaf out of Israeli playbook and sent in Army, enforced section 144, shutting down the communication lines etc. before unveiling the presidential order of reorganization of State into two different union territories of J&K and Ladakh.

Also a bill was introduced in the Upper House which provided for amending Article 370 and same became an act within 3 days of introduction.

It was so quick a move that even before people realized, their special powers were robbed from them.

This move of the government was portrayed as a win for the nation and also showed to the world the resolve of this government.

Though the benefits are numerous both for the people of erstwhile state and whole of India as now people from around the nation can purchase land and settle in that region which will most certainly increase integration, more job opportunities can also be created by attracting private investments and reducing the state bureaucracy will definitely reduce corruption which means more money will trickle down for development of people.

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This move was also compelled due to the current international developments like Trump offering of mediation on the Kashmir issue to Pakistan Prime Minister

Also the likely success of proposed talks on the status of Afghanistan which might lead to withdrawal of US troops from the region and Taliban getting a say in the Afghanistan government ultimately leading to less Indian influence in that region and more susceptibility to terrorist attacks on the Indian side of Kashmir.

Despite numerous benefits of the said move, the conversion of State into two union territories has been criticised by people around the world and in India.

Some criticism is due to the lockdown of Kashmir because of which normal life of people is affected, also the shortage of food, closure of emergency services like closure of hospitals etc. has been criticised.

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But most importantly the criticism is because, this move is being made unilaterally by a few in the central government without even consulting the state representatives, making this conversion inherently against the spirit of democracy.

The pledge of “We the people” in preamble was vehemently ignored.

Special powers to a particular state is opposed to the spirit of the constitution as it infringes the Article 19 Right to Equality. But taking away this power suddenly will further annhiliate the already annhiliated group of people.

It might lead to more radicalization and will provide fuel to the already growing calls of freedom.

This move might also backfire if common people comes to the street protesting this sudden change of status after army troops are removed.

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So it would have been better if the center would have taken the state representative into confidence.

To negate the blowback of this move, the government has to first improve the economic opportunities for the people, by creating jobs in the region, by investing more on infrastructural development projects.

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Also elections should be conducted immediately so that people might feel that they have someone through which they can raise their concerns.

Grassroot leaders should be taken into confidence, through whom the messages against radicalization should be spread.

The decision is taken by the government, now the focus should be on remediating it’s negative effects so that people of Jammu & Kashmir can be fully integrated into the union of India.

The Modi Doctrine

As foreign affairs is a very dynamic and a delicate topic so there are bound to be some setbacks and India is no different as she also faced some setbacks in these last five years, prominent among those are the downward trend in relations with Pakistan, Russia and uncertainty in the relation with the Dragon.

In the last leg of this series we will analyse the misses of India’s foreign policy and how Modi government 2.0 can remediate these mistakes and move forward to take India at even higher levels.

The Misses

India & Pakistan

One of the big promises made during the 2014 electoral campaign was to create an atmosphere free of terror and to improve our relations with Pakistan, which the government tried to implement from the day of swearing in ceremony of the new cabinet by inviting Prime Minister Sharif, but relations only went south from thereon and the rift between the two neighbors only widened.

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Though efforts were made from both the side to resolve the long pending problems between the two, like surprise touchdown by Modi to wish Nawaz Sharif on his daughter wedding. But Pakistani establishment failed to rein in its powerful military and the non-state actors from acting rouge.

Because of which many flash points occurred between the two nuclear powers like the attacks at Gurdaspur and Pathankot air base, but the triggering point of the downfall was the attack on the Indian Army troops.

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Indian government immediately retaliated this by launching a surgical strike, but a strategic error was made as this covert operation was popularized, leading to internationalization of Kashmir issue and reducing the options with the government but to take military action in case of such misadventures by our neighbors in the future like air-force was used after the Pulwama attack.

Also the Indian establishment was not fully able to leverage position to put economic pressure on the Pakistani side and force there hand to arrest the perpetrators of terror attacks like Hafiz saeed.

Even getting a UN sanctions against terrorist Masood Azhar took years and still the government is unable to convince the world to put Pakistan on the black list of FATF (Financial action task force)  (Which will effectively make foreign money market inaccessible to Pakistan).

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Poor management of this Pakistani problem also caused domestic issues in Kashmir making the common Kashmiri feeling more angered and raged with India.

Apart from Pakistan the other big miss has been the relation with China.

India & China

Relations between India and China has always been of frenemies and it continues to remain as such even today.

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Though the strategic interest of both these emerging powers align on some issues like both fight against the hegemony of the western world, but most of the time their interest collide with each leading to tension.

Modi government has tried to resolve the long pending issues with China by following Nehruvian philosophy of Panchsheel, but the list of issues are so long and complex like territorial issue at Arunachal Pradesh and Ladakh, or the latest China- Pakistan economic co-operation etc. that it causes even small issue to flare up quite quickly as was the case with the military standoff at Doklam in 2017

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The government has tried all in its power to maintain a good relation with China by having bilateral summit, increasing the trade with China etc. still India has not been able to utilize its position to reason with China on important strategic matters like not to build an economic corridor in Pakistan occupied Kashmir as it is technically an Indian territory or to lift off its veto against India’s entry into NSG (Nuclear supply group).

Though both the administration reiterate about the Wuhan summit, but the results are yet to be seen in reality

A much bigger hiccup than China is India’s relationship with Russia.

India & Russia

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Russia has been the greatest friend of India since its independence in 1947, it has always helped India during tough times like vetoing against Kashmir resolution introduced by US and its allies at UNSC, providing rocket engine technology when the whole world refused it and the famous Treaty of Peace and Friendship of 1971, which wade of the threat by China and US of attacking India for India’s support in Bangladesh freedom struggle.

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But during the last five years due to changing strategic realities and interest, India administration to some extent has been ignoring its traditional partnership with Russia, which is compelling Russia to slowly move towards developing a relations with Pakistan and proof of that is Russia conducting its first ever bilateral military exercise Druzhba with Pakistan in 2016

Though the Modi government has tried to keep its Russian friends happy by conducting an annual bilateral meet between the two premiers and by not bogging down to the pressures and sanctions from the US against purchasing weapons from the former Soviet Union especially S-400 anti aircraft weapon system, still relations with Russia is a hiccup in Indian foreign policy strategy.

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Apart from the above big three, other misses of Modi government has been with Latin America, Europe, Africa and South East Asia

India & the world

Nehru did build strong relations with most of the countries of Latin America through Non-Alignment movement, but later governments didn’t follow the suit and somewhat ignored the relations with that resource rich part of the world.

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Modi government also intimate the same policy and ignored the Latin American region almost completely.

Apart for Brazil thanks to annual BRICS summit, that region is the least travelled by the one of the most travelled head of the state.

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India doesn’t have an embassy in many of the Latin American countries and this has been a big miss for India as that region has large amount of resources be it the black gold (coal), uranium or the lithium which is currently the most sought after resource because of its use in making recyclable batteries.

Also trading opportunities were missed as still India and Mercosur (South American trade bloc) have not been able to take full advantage of the preferential trade agreement (PTA) signed between them due to which trade growth has faltered and has been $39 billion which  dwarf if we compare Chinese trade with that south America which is approximately over $200 Billion

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Indian-African relation dates back to thousands of years, but still the relation has not evolved much with most of the Africa nation apart for few counties like Kenya or South Africa.

India doesn’t even have a permanent embassy in many of those 54 countries in African continent.

Also in trading terms India lags way behind than China and has a total bilateral trade of $63Bn which is only 25% of the total Chinese trade of over $240Bn

This relation has been a big miss because India has made numerous promises to many African nations in these five years but has faltered fulfilling most of them also delays and cost overrun on many of these infrastructural projects promised by India has been frustrating for them.

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Even with the European Union we are still not able to negotiate a free trading agreement since last two decades which is affecting our exports badly and also except a few nations in Europe, we still don’t have strong bilateral ties with many of the eastern European countries like the Baltic region and many states in Balkans.

South East Asia has also been a miss for Indian foreign policy, eventhough this region is in our neighborhood.

Though an FTA was signed between India and ASIAN back in 2004 still India was not able to reap its benefits as it didn’t cover the trade in service sector. Also the region is not happy with India delaying the RCEP (Regional Comprehensive Economic Partnership) negotiations again and again thereby causing a bad publicity of India around the world.

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Apart for above Modi administration has faltered in Increasing trade with the world due to poor negotiations at WTO or bilaterally which has affected the growth of Indian economy.

Way Forward

Thought there has been a lot of misses and hiccups in these last five years, but they also provided a lot of opportunities to capitalize upon from which Modi government 2.0 must learn from and try to improve upon them.

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India should negotiate a better deal for itself at the world stage by including more and more of professional negotiators and industrialist in negotiating process rather than ministers and bureaucrats with least of business acumen.

India should also reach out to the parts of the world where it still has minimal of contact like Africa and Latin America by setting embassies, searching for opportunities to trade with them, by investing in their developmental projects and reaching out to them by utilizing its soft power, which will help in building goodwill.

With China, India should follow the Wuhan spirit and try to increase exports to China so that both the economies gets vested into each other more deeply, which will help us cutting a better negotiations in future.

Image courtesy The Hindu

With Pakistan, India needs to use its diplomatic and economic capital to isolate Pakistan, so that they are forced to close these terror factories, also recent mobilization of troops to Kashmir region is a good move to build economic pressure on a broke Pakistan. India should also sincerely pursue getting Pakistan into the black list of FATF which contains the names like Iran and North Korea, so that more pressure is built on them.

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 Also India should reason with Pakistan’s allies like China and Turkey to force Pakistan to mend its way or otherwise face consequences.

As Richard N. Hass said “Success in foreign policy, as in carpentry, requires the right tools for the job”

Therefore India should also use the right tools to try and build a much deeper relations with the countries with whom she has been able to foster a strong partnership during Modi’s first term and also should try and explore opportunities to manage and improve its relation with countries with whom she lagged behind

Then only she can achieve her dream of becoming a super power of the world

The Modi Doctrine

In the last article we saw India’s relation with key countries like USA, South Asia etc. In this article we will continue from where we left and will see our relations with other part of the world, prominent among them will be Middle East and Israel.

India & Middle East

One of the biggest achievement of previous government is to strengthen the ties with all the middle -east nations, be it UAE, Bahrain, Oman or The Kingdom of Saudi Arabia.

This region is extremely important for India, as more than 80% of India’s oil and gas is imported from this region, also the region provides employment to a large section of our Diaspora. More than seven million Indians work in this region, remitting $ 35 billion every year.

Hence to strengthen it a lot of political capital was invested from both the sides and frequent bilateral visits were made leading to signing of plethora of MOU’s, prominent among them are development of world’s biggest oil refinery in Gujrat by Reliance in partnership with Saudi’s Aramco, storing of oil in strategic oil reserve in India, creation of a $75 billion fund by UAE to make infrastructural investments in India, development of special economic zone at Duqm port in Oman by India.

In the recent years to express their respect for India, several regional countries like KSA, UAE, Oman etc have awarded their highest civilian award to the Indian Prime Minister

The special aspect of this strong relation is evident from the fact that it is not affected by the inter-regional rivalry especially with Israel and Iran.

India & Israel

One of the biggest moment in the Indian foreign policy history was when Indian Prime Minister set foot on the Jewish land in 2017. Even though India officially recognized the Israel back in 1950’s and set up an embassy in 1992, still no Indian Prime Minister set foot in Israel, partially because of the fear that it might agonize the Muslim world.

But a strong Indian leadership and a proactive foreign policy showed the world that India’s relation with Israel stands on its own merits and are not affected by inter-regional tension.

Israel has been a strong ally of India and also helped India secretly in many of our battles despite US sanction. This relations was always under a wrap as far as India is concerned, but the previous government brought it to the forefront with the famous bear hug between Modi and Bibi.

Israel being the prominent innovators in the field of agricultural science opened various agricultural research institutions and provided India with the modern technologies to increase the productivity of Indian agriculture like the Drip irrigation  which not only saves the scarce water resource but also increase the production.

Not only agriculture, many Israeli companies are working in India in the field of water conversation and replenishment technologies.

But the biggest highlight of this relation is the strong defense collaboration between the two nations, Israel provides India with sophisticated attacking Drones, missiles like HAROP and Heron attack drones, Barak 8 missiles, which other countries are hesitant to provide.

All this has led to Israel being the third biggest defense partner of India after Russia and US.

Hallmark of this relation is that it doesn’t get affected by the India’s stand of supporting the Palestine at the UN also because of India’s traditional support to Iran.

India, Iran and Afghanistan

India historically has a strong ties with the Persian nation since ancient times due to bilateral trade and cultural similarities. In recent years the relationship has become even stronger.

India recently invested $ 8 billion to develop the Chabahar port and also persuaded other countries like Japan to make investment. Post US sanctions against Iran, India reached a Rupee-Rial agreement for purchasing oil, also India obtained special waiver from the sanctions to invest in Iran. India also entered into an agreement with Iran to fill up the strategic oil reserves in India.

In the eyes of Afghans, India is their foremost friend and rightly so as we have been helping them in their development, by building developmental projects like the Zeranj-Delaram highway, which will not only reduce the cost of trade between India and Afghanistan but will also provide Afghanistan a huge market for its product.

India has also gifted the parliament building to Afghan people along with several other developmental projects like Salma dam. India is also helping the redevelopment of the nation via soft loans, transfer of technology. Not only this, even Afghanistan cricket team has a home base in India.

Due to these all these efforts Modi was recently accorded the highest civilian award of Afghanistan  The Amir Amanullah Khan Award, which signifies the trust we were able to build with our Afghan counterparts

India & Japan

India and Japanese relations dates back thousands of years, but it has not been as strong as it is now, it is because of the personal touch the leadership in both the countries has given to cultivate the relation and this relation has become so strong that Japan is our partner of choice for getting investments and technology into our economy

Japan has been an instrumental in providing infrastructural funding to India, be it for development of Delhi Metro or extending ODA loans worth Rs 4,000 Cr at a concessional rate of interest of approx. 1.4% to fund highway project in the seven sisters or the recent bullet train project, thereby benefiting the people immensely.

Not only India, but the world at large has benefited due to strong ties between India and Japan. Both the countries are collaborating with each other for development projects around the globe like the recent Asia-Africa growth corridor or development of ports of Sri Lanka.

And this relation is not limited to investments but has extended to other areas like holding annual joint naval exercise Malabar etc.

Due to all these reasons the relations between us has been upgraded to Special strategic and Global partnership  

India & World

Not only bilateral relations, the government has given equal weightage to multilateral relations as well.

Shining examples of such multilateral engagement is the Paris climate deal, in which the Modi government took the front stage and announced the ambitious target of producing 175GW of energy from renewable resources by 2022, which motivated other countries as well to focus on green energy and not only this Modi along with then French President Franco Holland announced the initiative of International solar alliance head-quartered in Gurgaon, whose focus will be to develop and fund various solar projects in countries lying between the two tropics. This initiate will not only boost energy generation from solar technology but has also increased India’s standing around the globe as the leader in renewable energy sector

Recognition of 21st June as World Yoga Day by the UN was a proud moment for us Indians and this became possible due to untiring efforts of the Modi government, it not only increased the respect for ancient practice of Yoga around the globe, but also proved that India still believes in the philosophy of Vasudev Kutumbkam (World is one family) as it wants to share the age old practice with the world so that whole world can benefit from this science.

 Also due to this proactive foreign policy initiatives more weight is now been given to Indian voice in all the multilateral forum like at the UN, G20 summit etc

As foreign affairs is a very dynamic and a delicate topic so there are bound to be some setbacks and India is no different as we also faced some setbacks in the last five years, prominent among those are the downward trend in relations with Pakistan, Russia and uncertainty in the relation with the Dragon.

In the last leg of this series we will analyse the misses of our foreign policy and how this Modi government 2.0 remediate these mistakes and move forward to make India the next Super-power.

The Modi Doctrine

India again went for the greatest voting exercise in the world, which went on for a month and result was as expected, India gave its mandate to Modi led BJP government, but surprisingly with a margin which was even bigger than the previous election.

Credit goes to some of the brilliant moves and policies of the last Modi government, like successfully implementing a sleepy GST bill, the Jan Dhan yojna which lead to more than 90% of Indians (around a billion people) getting into the formal economy, the Direct Benefit Transfer introduced under various schemes like LPG subsidy, MGNREGA etc. This led to reduction in corruption to a certain extent, which was even acknowledged by the World Bank etc.

A lot of credit also goes to the proactive foreign policy of the government, which not only benefited the nation but also brought India into the big league on the global stage.

This is a series of three articles where we will explore the hits and misses of Indian foreign policies over the last five years and how it has benefited the nation. Thereafter we will discuss some measure that the current establishment should to take to help India reach its rightful place on the global stage.

The Big Hits

Modi government even at the state level had been very instrumental in getting foreign investment and building relations with foreign states, Vibrant Gujarat summit is a great example of that and he brought the same intensity to the office of Prime Minister.

Example of this proactiveness is seen during the Indian cabinet swearing-in ceremony at the Rashtrapati Bhavan, where all the SAARC (South Asian Association for Regional Co-operation) nations were invited, which gave a firm message to the world and to our neighborhood that for this government ‘Neighbours comes first ‘

The Neighbour First Policy

Biggest complain that our South Asian partners had with us over the years is that India doesn’t pay enough attention to its own backyard and rightly so

India since independence has focused more on global affairs then on the affairs of its surroundings, Non-alignment Movement is a shining example of that.

Though successive government since Narsimha Rao’s in 1991 has looked to transform this image with policies such as Look East policy, Gujral Doctrine of 1997 etc. but energy to these efforts was provided by the Modi administration when he changed the framework of Look East to Act East and introduced the policy of Neighbour First both in speech and spirit.

We saw this Neighbour first policy into implementation when the Indian Prime Minister made his first official foreign visit to Bhutan thereby emphasizing on regional co-operation before global co-operation.

It was just a trailer of what we were going to achieve in the next five years and the momentum just picked up from there.

After that many more state visits were made and a lot of agreements were entered with all our neighbors such as the long pending Land Boundary agreement was signed with Bangladesh which solved the problem that British created via Radcliff Line, Delhi – Kathmandu bus services was started, India- Myanmar-Thailand trilateral highway project was inaugurated in 2016 to enhance connectivity.

Also Line of Credit ‘Soft Loans‘ worth Billions of dollars were disbursed, many infrastructural projects were taken up, of which some of them were for free like building of Afghanistan Parliament.

All these moves were in n true spirit of “Sabka sath, Sabka Vikas”

But the greatest gift by India to its neighbours was the launch of ‘The South Asian Satellite’ which was said to be the brain child of Modi himself.

This move not only increased our goodwill amongst our neighbors but also raised our stature as a regional power in the eyes of the world.

Though maintaining good relations with neighbors is utmost important for any country, but equally important is to maintain good relations with the world at large and Modi administration took care of its global relation with an equal swag.

India and its Global Relations.

Be it the relations with US, China, Russia or The Middle East or for that matter Latin America every relation was given a due importance.

India & US

Modi in his very first year of Prime Ministership made a state visit to the US.

This opportunity was grabbed with both hands by this administration to leave a mark of its foreign policy objective on the world.

The greatest highlight of this visit was the world famous speech at THE MADISON SQUARE GARDEN in New York and the famous dialogue of Star Wars “May the force be with you” at the Central Park.

The speech at The Madison Square was a huge hit around the globe because there are very few artists, leave alone politicians who can fill the stadium to its full capacity and Modi proved that he is one of those rare personality.

Though the real objective of this move was to use the strength of our influential but to an extent neglected diaspora living in the US, to mold the policies of US government in favor of India.

This in itself was the first time that an Indian politician was talking straight to the common people of the diaspora

This speech is still remembered as a master stroke by many foreign policy pundits, as after that the diaspora gained a lot of confidence and the US Congress and lawmakers alike started looking favorably towards India and Indians.

That’s not all, there were many substantive agreements signed with the US in the last 5 years.

Prominent amongst those were COMCASA (Communication Capability and Security Agreement) and LEMOA (Logistics Exchange Memorandum of Agreement) which are two of the four foundational agreement US signs with its closest allies. These agreements are important because it facilitates inter-operability between the two militaries and also is a pre-requisite to purchase high-end technology from the US like the Howitzer and Guardian Drones

In layman language India has now joined the small but elite group of nations which are eligible to purchase high end armed drones and missile technology form the US, which will not only strengthen our attacking capability but also deter our adversaries.

India was also given the status of Major Defense Partner (A term specifically created for India) it means that US will have a defense ties with India at par with its NATO allies which is considered to be a privilege as US is virtually guaranteeing the supply of its latest defense technologies without any roadblocks.

There are various examples of the strong ties that Modi was able to establish with US, one of which is the recent adventure by IAF on Pakistan based terrorist camps in Balakot, was not criticized by the US (which is the general norm) but instead India was encouraged and Pakistan was warned against such provocations.

Also the memorable visit by President Barak Obama to Indian Republic day celebrations ( First by a sitting US President).

Due of this proactiveness in foreign policy, US used its diplomatic capital to get India admitted into three out of four export control regimes namely MTCR (Missile technology control regime), Australia Group (Control regime for chemical and bio-technology that could be weaponized) and Wassenaar arrangement (Control regime for conventional arms and dual use technology)

Being part of these multilateral agreements will help us to procure and trade in modern technology freely without any restrictions and curtailment with the member countries of these agreements. An example of benefit of being member such treaty is the recent agreement between India and Russia to enhance the capacity of BrahMos a Supersonic Cruise Missile beyond 300 Km radius.

It is the first time in history that a country which is not part of the Non-Proliferation treaty was admitted to these elite groups

Apart from Defense, relations has also progressed in other fields during the first term of Modi. Be it the economic relations which lead to increase in our bilateral trade from $104 billion in 2014 to $142 billion in 2018

Setting up of 2+2 dialogue mechanism in which both Foreign and Defense ministers of both the nations will meet and discuss the issues which affects them, or be it getting special exemptions from the US to import oil from Iran and to make huge investment to the tunes of billions on Chabahar port of Iran.

Greatest part of this relation is that it is bi-partisan, i.e. both democrats and republicans are in favor of good relations with India and as a mark of respect to this special relation US changed the name of Asia-Pacific region to Indo-Pacific region in its policy documents and changed the name of its Pacific command to Indo-Pacific command.

Highlight of this improved relation is the inflow of FDI (Foreign Domestic Investments) from US based companies into India, be it Apple setting up factory for the first time in India or the huge investment poured into India by Google, Amazon and recently by Walmart, even offer made by Lockheed Martin to move its entire production base of F-16 to India stands out as a testimony of the great bilateral ties.

This all has become possible only because of the strong ties Modi establishment has been able to cultivate with The US.

In the second article we will explore India’s relation with other part of the world, prominent among them will be the relations with Russia, Pakistan and China. Further article will also discuss few hiccups the Modi government had to face in its last 5 years.

The rise of an Ideology : Trumponomics

One of the most watched drama in 2016 was the election of the world’s oldest democracy – The United States of America and as dramatic the race was, equally surprising was its result in which a Real Estate magnet won against a seasonal diplomat by a whisker and became the 45th President of the world’s most powerful country.

This phenomenon which took the whole world by surprise was – Donald John Trump

From there the era of Trumponomics started and the world is still copping up with this new geo-political reality.

Trumponomics: The Philosophy

Trumponomics is a philosophy initiated by Donald Trump, as per which the interest of America is of utmost priority, even at the cost of its closest allies. Interest of USA should be achieved by using all the weapons in the arsenal, like applying economic pressure, flexing diplomatic muscles or by threatening with sophisticated military weapons.

This thought process doesn’t differentiate between allies and opponents, what matters is only selfish interest.

Though this era has started recently, still it has been so strong that it has swept the world like a tsunami.

Economic Pressure and its impact

Trade Deal with “Worst Abuser” – China

Trade has been the biggest factor driving relations between these two economic giants. Biggest factor in the rise of China is its export oriented industry with USA being its largest market. So much so that China currently has over $350 billion of trade surplus with America.

Correct way to reduce this deficit would be to align on a trade deal which will be beneficial for both the countries, though this new economic philosophy also had the same intentions, but its implementation has been faulty to say the least some of the examples are raising duties and taxes on the current imports of goods from China, in a hope to muscle its way into a favorable trade deal, insulting the proud China by calling them “WORST ABUSERS” and “CURRENCY MANIPULATORS”, restricting access to latest technologies like Google has restricted Huwaii to use its software.

This has not only worsened their relations, lead to huge losses to the businesses in both the countries also causing losses to investors and also to common people around the world due to erratic movement in stock market but not only that it also affected the poor farmers of US on whom retaliatory tariff was employed by China.

Not only China, but its closest allies also felt the fire, as US has also increased tariffs on imports of various products like taxes were imposed on products like steel and automobiles which impacted countries like Japan, Canada, Mexico and Germany the most.

This economic pressure has not only lead to losses around the world but also impacted the common US citizens as they have to pay a lot higher price then what they are supposed to pay.

Also due to retaliatory tariff being imposed by the world, the cost of doing business has risen all around the world and because of which only the common person has to suffer.

Not only the economic pressure, Trumponomics also believes in flexing its diplomatic muscles to have its way, even at the cost of isolating itself from the world.

Flexing of Diplomatic Muscle

The Paris Climate Change Agreement

Climate change has been a worry for all countries around the globe, so the whole world gathered in 2014 and signed an ultimate agreement to reduce the carbon foot print. Which we know as the Paris climate agreement.
But shifting to clean energy resources like solar energy is detrimental to the mining sector and the miners (which tends to be one of the biggest voter base) therefore the US under Trumponomics claimed that climate change is a hoax and pulled out of the deal, despite it being the biggest polluter in the world.

This move was made irrespective of knowing the fact that US will become the only country which has not signed for this agreement and will practically isolate itself form the world on Global warming

Despite the world, even the state government in the US itself advised against this catastrophic move, still the Federal government withdrew from the deal to satisfy the petty interest of Trumponomics.

Irrelevance of international bodies and Multi- lateral agreements

It also believes in following the rules made by international body like WTO till the time these rule satisfies its interest, and if these rule are against the interest then these institutions are being labelled as irrelevant.

Same has been the case with multilateral agreements like NAFTA which is just surviving despite facing numerous threats of being scrapped.
Though Trans Pacific partnership agreement between 10 pacific rim nations was not that lucky and was scrapped in the initial days of this philosophy, as it was believed that other nations like Vietnam are getting all the benefits and no though was given to the potential of an increased trade opportunity that this deal might have created.

The Military angle of the Philosophy

Weapon industry is also one of the major pillar of US economy. It provides jobs to thousands of people and also brings in huge amount of foreign reserves. So it is but natural that it needs to be protected to some extent, but under Trumponomics this protectionism goes to a whole new level.

Trumponomics believes in bullying the world to protect its industry and it follows what it preaches which can be seen in the whole drama around S-400 triumf in Asia.
Nations like India, Turkey (NATO ally) is being threatened against purchasing weapons like S-400 trimph anti-aircraft missiles from Russia, so that sale of THAAD (A US made gun of same nature) can be increased.

Even sale of sophisticated weapons were approved to Kingdom of Saudi Arabia because it provided an irresistible deal of $ 110 billion. This was done despite a strong congress resistance

Turmponomics neither cares about allies nor about being isolated, it is an inward looking philosophy which is against globalization and only believes in protectionism.

The Future with Trumponomics

Recently a study by World bank suggested that if the trade war between China and US continues it may reduce the growth rate by .5%.
Think what will happen if we extrapolate this figure to the global level as US under Trumponomics is virtually having a trade war with all the nations of the world.

The World which still has not fully recovered from the after-shocks of 2008 financial crises has started to look at another crises in making due increase in popularity of this hyper protectionism policy and its manifestation can be seen in Brexit, rise of rightist parties around the world like Marine Le-Pen in France.

With more and more followers of this policy being elected around the world, the future of the world doesn’t look so promising.

The Road Ahead

Philosophy like these spreads like wild fire, it is a beast which needs to be tamed at the right time. Forces around the world which believes in free trade should join hands against this minority and stop them before it captures the world.

Some promising examples have been the people of United State who have wholeheartedly opposed this inward looking philosophy and has stated a strife against it, the most prominent example being the State of California, which despite federal government rejecting the Paris deal, made separate deal with different nations of the world to promote clean energy.

Even EU has come out in open opposing g this philosophy which was proved in the elections of France and Germany where the leaders favoring an open economy were elected.

Hence even in these testing time the world has an opportunity to come together as one and save the fundamental philosophy of free trade and open economy so that we can again became a global village as we dream to be.

Iran: Latest piece of US middle-east puzzle.

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Love affair of US and the Middle-east is such that, since the later part of 20th century US has been entangled in the local affairs of the region, be it organizing Camp David for Israeli peace or sending troops to Iraq for fighting Saddam Hussein or recent war with ISIS in Syria and the plans to overthrow the incumbent Syrian President Bashar al-Assad. Harder the US tries to pull out of this region, the more it gets entangled in the messy affairs of this troubled region, sometime because of its own interest or due to interests of its allies.

Currently the latest piece of this un-solvable puzzle for US is Islamic Republic of Iran

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It’s often said in foreign affairs “There are no permanent friends or enemies, but only interests”

This quote is apt to describe the relations of US and Iran.

Iran under Shah used to be one of the most trusted ally of United State of America. So much so that Iran was said to be the ‘pillar’ of US foreign policy in the Middle East and US had no hesitation in selling it’s F-14 or giving them Nuclear reactor and fuel.

Then the tables turned after the Islamic revolution of 1979 and this turn was so sudden that the erstwhile best of friends became overnight enemy in a blink of an eye and this enmity is so strong that both the countries don’t even have a consulate in each other’s country.

Iran after the revolution, nationalized all its industries and the US whose dream was to create a world hegemony, can’t digest this fact.

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Since 1979, only feature which is constant in their relation is Threat.

Supreme leader of Islamic republic ‘Ayatollah Ruhollah Komeini’ referred America as “Great Satan” and usually chants “Death to America” in his Friday prayers. Similarly Ex- President of USA George W Bush called Iran “Axis of Evil” along with North Korea and Iraq after 9/11.

This is just one of the several reasons of this 4 decades of enmity, there are other players involved in this geo-political drama which complicates the matter further and don’t provide the room to solve this rivalry.

Israel and Kingdom of Saudi Arabia

Israel: Small Jewish nation on the coast of Mediterranean Sea, was carved out in the year 1948 from the Palestinian region, but it was never accepted as a country by the Muslim world, hence since then it has fought and won decisively all of its battles against the coalition of Muslim power which surrounds it.

Iran the torch bearer of Shia in the region still didn’t recognize the state of Israel and always swear to eliminate it from the ‘face of earth’

Who can forget the famous STUXNET worm which sabotage the Iran nuclear program, it is said to be an Israel- American conspiracy.

Kingdom of Saudi Arabia: The richest nation in the gulf region, is seperated from Persia by a small Strait of Hormuz, but both these countries never had a cordial relation with each other as proud Sunni nation can’t be a friend of Shia Iran, due to age long sectarian fight of Shia and Sunni.

They often allege each other as conspirator of terrorist activities in their country.

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Although KSA doesn’t recognize the Jewish state and has fought many battles including the famous 6 day war, still they work together as allies and co-operate behind the curtains when it comes to Iran.

Both these nations are important to the strategic interest of USA as oil rich Saudi provides fuel to run the US economy and also is one of the largest importer of US goods including military equipment and the small Jewish state has the strongest lobby in the US as Jews are one of the richest and most progressive community in the US.

Hence both these nations shape the foreign policy of the lone super-power when it comes to this region.

Hence this simple looking rivalry between US and Iran has many facets, making it one of the most complex geo-political situation of our generation.

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With the current US administration this war mongering has reached it ultimate level in this past month.

US doesn’t want Iran to develop nuclear capabilities even for peaceful purpose, because having such capability is detrimental to the interests of both Israel and KSA, as both these nation fears that Iran might be successful in enriching the uranium to such a level that it can make nuclear missile in guise of peaceful use of nuclear technology.

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But stopping Iran to use the technology for peaceful purpose is against the various nuclear treaties of the world including NTBT(Partial Nuclear Test Ban treaty), CTBT(Comprehensive Nuclear Test Ban Treaty),

NPT(Treaty on the Non – Proliferation of Nuclear Weapon) to which even the US is a signatory, hence in Obama administration the UN ratified framework which we know as “Joint comprehensive plan of action” was signed between P5+1 and Iran, as per which Iran will eliminate medium enriched uranium and will provide access to its nuclear facility to IAEA (International Atomic Energy Agency) and in return Iran will get relief form US, EU and UN based sanctions.

All the parties were following their commitment to JCPOA, but then the leader of world’s oldest democracy changed and a rightist businessman whose only concern is to do business, even at the cost of world peace, took over the reins of US,


This new US administration unilaterally withdrew from the UN ratified framework, and put sanctions on Iran for superficial reasons. This move was criticized even by the closest allies of the US who still are maintaining status quo as far as JCPOA is concerned.

But who can stop a businessman who doesn’t understand the nitty-gritties of diplomacy and is only concerned about the money flowing from the Saudi’s and strong supportive lobby of the Jews.

Thereby US under the current administration put strict sanctions against the Islamic republic, banning the world at large to purchase oil and gas from this oil rich nation and if that was not enough they started sending additional troops and bombers and even an Air-craft carrier USS Abraham Linclon to this region in guise of defending US assets and its allies. He even approved sale of $8 billion worth of US sophisticated arm and amunition to the Kingdom without taking prior approval from the Congress.

This move has escalated the tension further as it is seen as provocation from Iran’s point of view.

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Even Iran has not minced any of its words and threatened to close off the strategic important Strait of Hormuz and also have given verbal threats to all the three nations involved.

And the biggest issue in this scenario is that the world has only been a mute spectator to this precarious situation.

As Gandiji said “An eye for an eye makes the whole world blind”

India should not remain quite in this vulnerable times.

“As war only lead to loss of lives and property, hence it is the peace that we should all strive for”

India has a direct interest in this conflict as any war or threat of war may lead to rise in the price of fuel oil, which will be detrimental to our domestic growth, also India has invested heavily in Iran, be it in Chabahar port which connects India to Afghanistan or the International north south economic corridors or the huge trade worth more than $23 Billion that we have with Iran, all will get impacted.

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Also war or even a threat of war in the region will be detrimental to the whole region of which India is also a part, as war will increase price of necessities, reduce investment in the region which will directly impact the job creation and thereby leading to a lower growth rate and a waste of demographic dividend.

As a regional power which has good relations with all the four engaging parties, it is our moral duty to open back channel for talks and reduce the tension in the region and strive to bring all the parties to table for a peaceful resolution and fulfill our Dharma of PAX INDICA

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As Leo Tolstoy in his book War and Peace said “If everyone fought for their own convictions there would be no war”.

Hence all the parties to the conflict should fight their own convictions before threatening to finishing off each other. To achieve a peaceful future for the mankind.

The fight for supremacy passes from the ports of Sri Lanka

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Sri Lanka, the nation with a population of 21 million and an area of 65 thousand square kilometer has become a latest point of contest between giants running for the throne of Asia.

The modern history of Sri Lanka is marred by the more than 150 years of colonial exploitation which ended in 1972 when the country became republic. But then due to excesses against the minority Tamils by Sinhalese government, LTTE ( Liberation Tigers of Tamil Eelam) was born in 1976, which lead to insurgency leading to disruption of growth and prosperity of this island nation for the next three decades. In 2009 LTTE was defeated and people hoped for a better future, but how would they know that a bigger challenge was now knocking their door.


Sri Lanka is in the middle of the Indian ocean, having no land borders with any country, still its placement makes this small piece of land, a place of strategic importance for Asian affairs.

Ceylon proximity to the Indian mainland, makes it the pivot to China’s so called String of Pearls.

With control over Sri Lanka, India’s security architecture can be threatened, this China understood long back, which lead to a huge amount investment approx. $1.5 billion flown to a sleepy port of Hambantota on the eastern side of the Island. People who didn’t even have pakka houses, saw ships of concrete coming to the island, to make world class infrastructure and port, and with the blessing of the previous Sri Lankan government, China was able to make a world class ghost port. The intention was never to recover the investment but to grab the land and to set up a base in the Indian ocean and to challenge India in its own backyard, which they were able to achieve to a certain extent, when the land was given on lease to them for 99 years as poor nation of Sri Lanka can never pay back such a huge sum of money.china-vs-india

Motive was not only limited to check India in its own backyard, but to also secure the oil route which passes through the strategic strait of Malacca via Sri Lanka. China was almost successful in achieving both the goals, but autocratic China didn’t completely understand the complex process of democracy, which lead to a temporary halt in their plans. As the new government came into power, the geo-politics of the region also took a U-turn.


New government didn’t want to lose the protection of India and couldn’t risk to losing money of China, so they followed the Buddhist philosophy of Madhaya Marg and appeased both China and India, by continuing association with China and approving the Indian plan to operate a Brand New, State of the art GHOST Airport new the GHOST port of Hambantota.


How would naïve Sri Lankan know that the geo-political rivalry is not that simple and rivalry in Asia is not limited to two rivals. But soon they realized that third giant is also part of this trilogy. Japan

Althoughsenkaku a peaceful nation after the world war which focused only on its rebuilding, but its proximity to China and tensions over Senkaku island lead to emergence of a impending contest between the two.



Following the philosophy of “Enemy of my enemy is my friend” Japan jumped into this geo political war alongside India. Japan with its money power started countering the Chinese offers with soft loan of rates as low as .1%. Be it Asia Africa growth corridor to counter China’s one belt one road or its offering its bullet train technology to the Indo0-china region. Japan is matching China’s offer with a better offer.


Same story is being repeated in this this ancient Buddhist land.

Now both India and Japan are in talks with the Sri Lankan authority to develop a container terminal in Colombo right next to the terminal built by China as part of one belt one road initiative.

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Though these plans are made by the government to neutralize the dependency of the small island nation on China, but who knows what turn this rivalry will take in future and what all Sri Lanka would have already lost by that time.


Sri Lanka has become a classic case of what happens when you get entangled into big boys rivalry. Its only the common people of the nation who suffers the high cost of this geo-political contest for supremacy. Though huge investment are flowing into the country, but do they have the capacity to absorb the same and do they have the financial strength to pay them off on time? Because if not the small island nation has to keep its land on mortgage for a life time which is unfair to the future generation of the nation.


Though competition is a desirable thing, but rivalry is not. The world should understand this and try to resolve these financial rivalry at the earliest before it becomes catastrophic like leasing of port of Hambantota for 99 years.


Our world has enough problems like hunger, global warming, pollution, we should try and resolve them first and try not to increase it further. This is our duty as the citizen of the world and our obligation to the future generation.

Hopefully the sleeping conscience of the rival nations will awake and they would stop pursuing the superficial dream of supremacy and release the benefit of co-habiting before it’s too late, and hopefully good sense of morality will awake in the world and they would interfere before another Hambantota happens.