48 months of Modi Government

On the eve of completion of Modi government’s four years in office, it is a good idea to analyse what are the hits and misses of the NDA regime, which stormed into power with absolute majority. Firstly, the regime deserves immense accolades for being corruption free. They have overcome the policy paralysis and decisive decision has become hall of the regime. Despite the poor economic legacy, Modi government strived hard to stabilise the economy by reducing the fiscal deficit, cutting on subsidies and partly through direct cash transfers. Though Modi regime is discredited for just renaming the policies of the UPA and not making bringing about any significant structural changes, it must be understood that by increasing the efficiency of the same decrepit initiatives Modi regime has improved deliverance. Undermining the risks of angering its loyal vote banks, Modi regime introduced disruptive economic reforms-Demonetisation and GST which has now not increased the tax compliance and tax base but increased the revenues. Forex reserves touched all time high, Foreign investments have increased.

Pet Initiatives like Make in India, Mudra Loans, Skill India, Standup India, Swacch Bharat, Ujjwala Yojana, Jan Dhan Yojana, Prime Minister Jeevan Bhima Yojana are slowly catching up with people and are bringing substantial change in the lives of disadvantaged sections. For the first time in seven decades, all villages in India are electrified. Efforts are on to make them achieve the target of open defecation free (ODF) villages. On the health front, government has introduced Sowbhagya scheme to take care of pregnant women, an initiative towards reducing the infant mortality rate. Government has rolled out the Modi care health which is estimated to benefit five crore families. Infrastructure development initiatives, defence procurements, Railways, power and petrol sector received maximum investments registered marked progress proportionate results weren’t obtained in Ganga rejuvenation projects.  India is now gaining more global prominence thanks to the Modi’s personalised diplomacy and unique chemistry with various world leaders. By and large Modi government has done a good job on various fronts.

Of all the prime ministers independent India had perhaps Modi has been the most popular and abused leader. Being victim of vicious campaign orchestrated to malign strong leaders and the Hindu community now Indian populace is dominated by two categories of people-Modi haters, Modi supporters and fence sitters. Major sections of the media, academia, intellectual brigade in India by far subsumed by Modi hatred has created a narrative that grossly undermined the efforts made by his government and perversely deepened existing fissures in Indian society. This influential chunk with global connections by far made every effort to tarnish image of India and projected a sloppy picture of India’s growth story. Unfortunately, this negative campaigning is now picked up by the fence sitters and outsiders who are largely divested of the ground realities. Interestingly, even among the formidable Modi supporters who strongly rallied for him in 2014 general elections is now slowly withering away with some Hindu nationalists expressing frustration over Modi’s failure in delivering certain promises made to Hindu society.  As of now, while Modi and his committed team of ministers are giving their best, people who are disillusioned by negative propaganda and overwhelmed by the frustration of Hindus being at the receiving end are casting doubts on the progress made by Modi government in four years.

With elections less than a year away it is time, people take stock of the situation with open mind. Instead of falling prey to the malicious campaign run by the break India forces, who are keen on clinching power by any means to plunder and rampage the nation, people should make right choices. India needs a strong, decisive, committed leader who keeps country above everything. Desperate, unemployed political leaders and staunch political rivals are now brazenly joining hands to stall Modi juggernaut. In a democratic country like India, onus of choosing a strong leader is thrust on people. Hence, people should make discrete and appropriate choices to usher the country into realm of progress and development.

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Trump's flip-flop on Singapore Summit

Confounding worst fears, President Trump with a proclivity of reneging deals has called off much awaited talks with North Korean Supremo Kim Jong Un scheduled for June 12^th. On May 24^th, he tweeted, “I have decided to terminate the planned summit in Singapore on June 12^th. While many things can happen, and great opportunity lies ahead potentially, I believe that this is a tremendous set back for North Korea and indeed a setback for the World”. In consonance with his reputation of pulling out from various agreements, Trump’s latest volte-face though very serious was along expected lines. Trump’s decision which comes days after his wilful pulling of America from historic Iran deal has had eventually decimated all hopes of US striking a deal with North Korea. Trump’s preposterous scrapping of Iran deal might have strengthened genuine suspicions North Korea held towards the US. Given, America’s hostile approach towards Libya and Iraq, Kim has been quite apprehensive of Trump’s conciliatory acceptance for a summit meet. Within 24hrs of the announcing the cancellation of the summit, Trump invigorated new hopes of bringing peace to Korean peninsula by saying that America is not averse to reconsidering the decision of calling off talks. This flip-flop, besides, conforming the Trump’s characteristic uncertainty is now potentially creating confusion, eroding the reputation of decision-making abilities of America’s presidential office.

Till now strategic experts viewed that Kim and Trump are perfect match for being so mercurial and tough negotiators. But North Korea’s rather circumspect response to Trump letter reneging on Singapore Summit, has reinforced Kim’s fervent commitment towards denuclearisation of Korean peninsula. In his letter to Kim, Trump said, “sadly based on the tremendous anger and open hostility displayed in your recent statements, I feel it is in appropriate at this time to have this long-planned meeting. You talk of nuclear capabilities, but ours are so massive and powerful that I pray to God that they will never have to be used”. In reply to this intimidating American response,  DPRK’s first vice-president of foreign affairs, Kim Kye Gwan, said, “As far as the historic DPRK-US summit is concerned, we have inwardly highly appreciated President Trump for having made a bold decision, which any other US presidents dared not, and made efforts for such a crucial event as the summit. His sudden and unilateral announcement to cancel the summit is something unexpected to us and we cannot but feel great regret for it”….. and added “But we remain unchanged in our goal and will do everything we could for peace and stability of the Korean Peninsula and the mankind, and we are broad-minded and open all the time, have the willingness to offer the US side time and opportunity”. With these remarks, DPRK shifted onus on Trump to take a final call and hasn’t shied away from saying that America is still not confident about DPRK’s commitment towards peace.

While US and DPRK openly divulged their reactions, the country which expended diplomatic energies, South Korea was deeply disappointed. Trump’s sudden decision of cancelling the summit left South Korean leader Moon Jae-in flabbergasted who travelled to Washington just days before his announcement parleying for the meet. For all his efforts in resuscitating the summit, Moon wasn’t informed of Trump’s decision in advance, leaving him perplexed and South Korea felt snubbed. Terming the decision as “very regrettable and unfortunate” Moon hoped that both countries would resolve their differences “through more direct and close dialogue between the leaders”.

DPRK’s unusually conciliatory approach Kim Kye-Gwan’s unrestrained response of “the first meeting wouldn’t solve all, but solving even one at a time in a phased way would make the relations get better rather than making worse” has struck right cords with American allies-Japan and South Korea. Ever since cancellation, it is believed that a flurry of diplomatic rallying carried out by South Korea lead to an apparent U-turn. On May 26^th Trump took to twitter again stating, “We are having very productive talks with North Korea about reinstating the summit which, if it doesn’t happen, will likely remain in Singapore on the same date, June 12^th, and if necessary will be extended beyond that date”.

Unperturbed by Trump rescinding the summit, Kim held two-hour impromptu talks in the demilitarized zone of North Korean Panmunjom village. As per Presidential Blue Palace news report from Seoul, both leaders discussed ways to implement Panmunjom Declaration, for deepening inter-Korean ties and to ensure a successful DPRK-US summit. Clearly playing hard diplomacy Kim not only convinced South Korea of its firm commitment but forced Trump to relinquish his “temper tantrums”.

In run up to the summit, as a confidence building measure, DPRK released three American citizens. In the following week, DPRK announced that the regime is no longer interested in building nuclear weapons and invited international journalists to watch dismantling or closing ceremony of lone nuclear site Punggye-ri. Some strategists dismissed Kim’s diplomatic gesture as mere symbolism while others were sceptical whether he would ever agree to relinquish nuclear weapons. Amidst this symbolism, staunch supporters of Trump nominated him for a Nobel Peace Prize and Trump administration released a commemorative coin featuring Trump and Kim against the background of their respective national flags.  Intriguingly, South Korea and US hasn’t scaled down the annual aerial exercises Max Thunder which included a nuclear strategic bomber provoking DPRK on May 16^th. Irked Kim, cancelled his upcoming talks with South Korea.

But what emerged as the sore point was American enthusiasm of thrusting down DPRK’s throat the doctrine of CIVD-Comprehensive Irreversible Verifiable Disarmament. America insisted on elimination of all nuclear weapons upfront along its Libyan Model. Unlike Libya which wasn’t even close to making nuclear weapons, North Korea has developed massive nuclear infrastructure. Since 2003 it has conducted dozens of missiles and nuclear tests, developed a thermonuclear bomb and successfully tested an Intercontinental Ballistic Missile capable of reaching mainland America. Having built significant nuclear arsenal and assured of strategic nuclear deterrent, Kim announced a moratorium on nuclear weapons. He made extensive diplomatic forays to bring nation from decades of isolation and sanctions regime. Kim reiterating his stance towards denuclearisation stitched close diplomatic relations with South Korea and even met President Xi twice. But during his outreach, Kim has always stressed on denuclearisation of entire Korean peninsula, implying that America should pull out forces and assets from South Korea. Besides, he desired for a synchronized and phased approach with America making some concessions to address the security concerns of Kim. Cognizant of the brutal ending of the Libyan Supremo Muhammar Gadhafi, in 2011 when he assumed reigns, Kim believed that relinquishing nuclear weapons in exchange for American guarantees for investment and security assurances was just a trap.

To utter dismay of Kim, who had concerns regarding national security and continuance of his regime in power, hawkish National Security Advisor’s references to “Libya Model” for negotiations with DPRK stoked fresh suspicions. Talking about North Korea, Trump ascertained that if DPRK agrees to denuclearise, “he will get protections that would be very strong” else grave situations will entail. He warned, “that model (Libya Model) would take place if we don’t make a deal. The Libyan Model isn’t the model we have at all. In Libya we decimated that country. There was no deal to keep Gadhafi”. While secretary of state, Mike Pompeo adopted a diplomatic route to deal with Pyongyang, overriding his gestures, Bolton adopted a fiery rhetoric. Terming Bolton’s references as “highly sinister” Vice-President Kim Kye-Gwan said, “The World knows too well that our country is neither Iraq nor Libya, which have miserable fates. It is absolutely absurd to compare nuclear weapons state DPRK to Libya which has been at the initial stage of nuclear development. If the US is trying to drive us into a corner to force our unilateral nuclear abandonment, we no longer be interested in such a dialogue and cannot but reconsider our proceeding to DPRK-US summit”. In the meanwhile, even Vice-President in his interview of Fox Channel said that DPRK might end up like Libya if deal is not struck. Angered by Pence’s comments, DPRK’s vice foreign affairs minister Choe said, “As a person involved in US affairs, I cannot suppress my surprise at such ignorant remarks from the mouth of US vice-president. In case US offends us against our good will and clings to unlawful and outrageous acts, I will forward a suggestion to our supreme leadership for reconsidering the DPRK-US summit”. The inclement narrative set by America’s hawkish officials, weeks before the summit has clearly touched raw nerves of DPRK making them more suspicious of America. Together these imprudent remarks escalated the tension between both countries setting the stage for calling off the summit.

Mike Pompeo’s Korean diplomacy has raised new doubts in American allies- South Korea and Japan who were believed to understand that US is interested in annihilation of long range missiles leaving them in a lurch. Trump’s dubious approach of ignoring concerns of allies is withering their trust and faith in America, prompting them to forge strong ties with proactive power centres like China and Russia. Trump’s flip-flop clearly indicates that America is not having a concrete agenda for negotiations as indicated by sources. With Singapore summit back on track, Japanese Prime Minister Abe who is concerned about the DPRK’s short-range missiles will meet Trump before the summit. South Korean President Moon is likely to join the summit, raising the hopes of a possible trilateral summit. Moon’s effort to resurrect the negotiations is testimony to his supreme efforts to bring peace to Korean peninsula enduring the shadow of hostilities since 1953. Despite Moon’s massive diplomatic efforts, Strategists believe that Trump may not sign the Korean peace treaty before DPRK’s denuclearisation deal.

The dream of restoring peaceful regime in Korean peninsula need concerted efforts of not only both Koreas but all other stakeholders in the region. As a precondition for peninsular peace, America might be forced to pull its personnel from South Korea. This move might trigger Japan to follow a similar script. Together, this might necessarily reduce American foot print in Asia-Pacific. Clearly this can embolden China which is rapidly expanding its presence in the region. Trump’s off-cuff policies, fleeting approaches with regards to denuclearisation of DPRK needs a serious rethinking supported by a robust policy.

As of now, US delegation has reached Pyongyang to prepare for the summit.  While DPRK seems to be wanting America to make similar concessions it made to India, which is rather too much to ask. Trump’s distorted diplomatic approach will invariably turn DPRK into another Pakistan.

Further while Trump is keen on dismantling nuclear paraphernalia of DPRK, a report released by experts suggests that this whole process might take at least 10 years. Hence instead of an intrusive inspections and punitive economic sanctions, a phased approach synchronised with reciprocal concessions may be the best alternative. Report adds that mere assurances on paper may not suffice and perhaps “substantial period of coexistence and interdependence” might lead to logical denuclearisation.

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Lok Sabha bypolls 2018- The writing on the wall for BJP

Cumulative setbacks in the Lok Sabha bypolls have reduced BJP numbers from 282 in 2014 elections to less than 272, short of the magic majority in Lok Sabha currently. In the just concluded bypolls, BJP and alliance managed to win two out of the four seats. While bypolls may not be a true reflection of larger electoral picture but BJP must read the writing on the wall. Unlike 2014 elections, where BJP romped home victory under the spell of a massive Modi wave, 2019 is going to be very difficult. Decade long UPA regime has left Indian electorate frustrated, disappointed and the aspiring class found a saviour in Modi and rewarded him with absolute majority. But things have changed ever since.

Psephologists always advocate that electoral memory is poor and unfortunately, in the past four years, Indians seems to have largely forgotten the ruthless plunder of Congress. With Judiciary progressively delaying outstanding corruption cases against Congress leaders, the devious record of large scale loot through various scams was effectively wiped out from public memory.

The humongous efforts made by the Modi government to revive the huge fiscal deficit are now largely underappreciated with economy back on track now. Hence, the issues of development and progress are not part of electoral debates any longer. Just like elections in the last decade, voting is now along religious, caste lines. With opposition regrouping themselves and joining hands with the sole intent of defeating BJP, BJP must now resort to masterly social engineering tactics to win elections in 2019.

Congress which is steadily eroding its electoral base is now resorting to all mean tactics. It always had the covert support of Muslims and Christians. In the recent times, Church and Masjid are openly defending their stances of issuing public fatwas against BJP. In the upcoming elections, religion and caste alone will sole agendas of the parties. While it is so regressive and absurd to even think of having elections being fought on these paltry communal grounds, unfortunately, this is the reality of elections in India now.

Against these oddities, Hindus on the other hand are largely divided and they no longer believe that BJP can address their issues. There is a palpable discontentment among Hindus, especially among Hindus of Cultural Right. The battle for the throne is going to be much more brutal, punitive, and brazen. Despite no allegations of corruption, the surge in global oil prices has exacerbated the dissatisfaction among the middle class towards BJP. In the past 48 months Modi and his team with their unstinted commitment made rapid strides in several areas. But sadly, Indian electorate under the spell of malicious campaigning refuse to endorse the achievements of Modi government.

Clearly getting requisite numbers in 2019 is going to be an uphill task for Modi and BJP cadres

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Unravelling Sochi Summit

Asian realm is going through a season of informal talks. Since April, leaders in this part of the World have been engaging in direct, informal, agenda-less talks to foster friendship and understanding. This new trend of personalised diplomacy, spearheaded by leaders in recent times laid ground for friendly rapprochement between both Koreas, thaw in Indo-Chinese relations and recalibrating legitimate concerns of denuclearisation of Korean peninsula. Carrying forward this paradigm shift in global diplomacy, in less than a month after his informal summit with President Xi at Wuhan Prime Minister Narendra Modi headed to Sochi for a mini-informal summit with President Vladimir Putin. Putin who has taken charge as President for a record fourth time fortnight ago invited Modi for a meeting at the picturesque resort Sochi. Currently, informal summits have become mainstay of global diplomacy.

India and Soviet Union established diplomatic relations in 1947.  Despite, initial hiccups, geopolitical compulsions pushed both countries into a deep embrace. Subsequently, bolstering bilateral ties, India and Soviet Union signed friendship treaty in 1971 and both countries continued to maintain strong ties during Cold war era. But left in a lurch after Soviet Union’s collapse, India infused momentum into the Indo-US relations which began with a joint statement in 1978. Subsequent leaderships energised Indo-US ties by vigorously expanding areas of cooperation. Unlike the Indo-US ties, the mainstay of Indo-Russian bilateral ties is defence cooperation and Russian supplies accounted for over 70% of Indian defence purchases.  But owing to poor on-time deliverance, excessive reliance on Russia for weapons refurbishment and serviceability, India began to slowly diversify its purchases. Though Russia continues to be largest supplier of military equipment, its hardware now constitutes to 62% as compared to 79% in 2008-2012. US has emerged as the second largest defence supplier clinching over $15billion worth deals over the last decade. Consequently, US elevated India to major defence partner status on par with its NATO allies and both countries signed foundational agreements deepening bilateral ties. As a testimony to elevated strategic partnership, US agreed to sell advanced weaponised surveillance drones. Aggressive penetrative expansion of China and its overbearing hegemonistic aspirations forced America to strengthen ties with India as a counterweight to China. Soon, India became part of the Quad comprising of America, Japan and Australia keen on protecting the interests of Indo-Pacific region. India’s growing closeness with American left Russia disenchanted.

By the turn of century, reaffirming interest in renewing ties, India and Russia signed, “Declaration of India-Russia Strategic Partnership” in 2000, fortified friendship with annual summits. In 2010, countries elevated strategic partnership to “Special and Privileged Partnership”. Crippling economic sanctions on Russia post Crimean annexation in 2014 pushed Moscow into Chinese orbit. Throttled by slumping oil prices and economic downturn, Russia began to look for lucrative defence markets and zeroed in on Pakistan, arch enemy of India. Russia removed arms embargo on Islamabad in 2014 and steadily warmed up to Pakistan with plans for setting up Joint military commission in offing.  On the other hand, with America calling Pakistan’s bluff, disillusioned by growing Indo-US defence-oriented friendship, Islamabad found its calling in Russia which had similar concerns with regards to Taliban and geopolitical changes in the subcontinent. In December, Pakistan National Assembly hosted a six-nation conference which included Afghanistan, Russia, Turkey, China and Iran to discuss challenges of connectivity and counter terrorism. The joint declaration signed by all these nations underscored that, “for ensuring global and regional peace and stability, the issue of Jammu and Kashmir needs peaceful resolution by Pakistan and India in accordance with UNSC resolutions”. Since independence, Russia vetoed resolutions against Kashmir in UNSC. But Russia’s current posturing and sudden change of stance to favour China has irked India. Upping its pro-Chinese rants, Russian envoy Sergei Lavrov opined that India should be part of the BRI (Belt and Road Initiative) notwithstanding its objections towards CPEC (China Pakistan Economic Corridor). Though Moscow would find it hard to let go India’s defence ties in lieu of its newfound warmth with Pakistan, Delhi is disconcerted by Russia’s overtures. A creeping misunderstanding began to seep into long standing Indo-Russian ties.

Intensifying its campaign Russia for alleged involvement in Syrian civil war and meddling in America’s presidential elections, US wanted to punish Russia and countries purchasing weapons from Moscow. On August 2^nd, President Trump signed into law, “Countering America’s Adversaries Through Sanctions Act” CAATSA, which included North Korea and Iran as well. CAATSA is now posing impediments in India’s path of acquiring five S-400 Triumf surface to air missile systems critical for buttressing its ability to counter stealthy ballistic missiles from its adversaries across the two borders. The $5.5 billion deal inked in 2016, close to fruition after 54 weeks of long negotiations has come under American scanner. India has sought American waiver and yet to receive to any response despite Jim Mattis appeal that waiver can severely impact America’s relations with India. Sandwiched between two belligerent nuclear states, national interest, defence robustness will outweigh US good will for India.

Besides, Trump’s disruptive decision of reneging historic Iran nuclear deal which saw light of the day after fourteen years of diplomatic negotiations has exacerbated India’s troubles. Aside European allies- Germany, France, UK; China and Russia severely condemned Trump’s decision. Like India, Russia has strategic and connectivity interests with respect to Iran. India has heavily invested in development of Chabahar port, which is a vital connectivity link for Afghanistan and instrumental for seamless connectivity through International North-South Transport Corridor (INSTC) from Mumbai to St. Petersburg. Having announced imposition of pre-2015 sanctions on Iran, India is now deeply worried. Further Trump’s protectionist approach culminating in unleashing of trade tariff wars between US and China will have a grave impact on global economy. Sochi summit comes at a juncture when world order is witnessing turbulence. Honouring Putin’s invitation Modi made a one-day visit to Russia like his rendezvous with President Xi.  

Overwhelming American unilateralism nixed with protectionism has upset its staunch European allies who are now keen on reviving the Iran deal. Reposing renewed interest in stitching up a deal without America, Putin recently held informal summit meets with heads of state of France and Germany. Underpinning centrality of Indo-Russian relations, Putin has thus extended invitation to Modi on similar lines to carry out heart-to heart chat on contentious issues. Precisely, in his 9-hour long stay, Modi held talks with Putin at his residence in Sochi, visited Moya Russia-Ethno culture centre, addressed students at Sirius educational centre and took a yacht ride on Black Sea with Putin.

President Putin received Modi at Bocharev Creek. After exchange of warm handshakes and signature bear hug of Modi both leaders held in depth discussions on international issues. Besides, agreeing to work together through various multilateral organisations like UN, BRICS, G20, SCO, RIC (Russia India China), leaders expressed concerns over growing terrorism and radicalisation and stressed the need for a multipolar world. Both leaders stressed the need for restoring peace and stability in Afghanistan and agreed to institute strategic economic dialogue between NITI Aayog and Ministry of Economic Development of Russian Federation. They reiterated the need for strengthening economic ties to reach set target of $30billion bilateral trade and $25billion mutual investment by 2025. Sources indicate that India expressed interest in holding substantive talks for joining custom-free Eurasian Economic Union Zone and official talks will be initiated within few months. Leaders welcomed the arrival of first consignment of LNG of under the long-term agreement between Gazprom and GAIL next month. They reiterated the need for strengthening cooperation in military, security and nuclear cooperation. Consolidating Indo-Russian ties, countries agreed to work towards developing nuclear power plant at Roppar Bangladesh.

Economic sanctions, allegations of Russian interference in various elections across Europe has pushed Russia towards Beijing. When European countries literally alienated Russia by returning their envoys, India refused to take sides and maintained strategic silence.

Despite Russia’s growing closeness with China, it is reluctant to accept Beijing’s brinkmanship in the region and sceptical of its expansionism in its sphere of influence, Central Asian Countries. To counter its growing influence, Russia strongly supported India’s membership to SCO.  Russia, keen on expanding its foot print is now seeking to connect Indo-Pacific region with Eurasian region. It now emerges that Modi and Putin have agreed to bring out a strong proposal to fight terrorism in the upcoming SCO meet at Qingdao. Despite the growing misunderstandings in Indo-Russian bilateral trade, oil exports from Russia increased 10 times in 2017.

Wrapping up the summit meet, Modi took to twitter saying “extremely productive discussions with President Putin. We reviewed complete range of Indo-Russian relations as well as other global subjects. Friendship between India and Russia stood test of time. Our ties continue to scale newer heights in the coming days”. Finally, in a major departure from official protocol, Putin personally bid farewell to Modi at the airport. This bonhomie might be yet another new beginning for the time-tested Indo-Russian bilateral ties.

While the allegations of nerve gas attack on double agent Sergei Kripal and his daughter in UK severely dented Russian relations with European countries, Trump’s fickle-minded America First approach and disruptive policies are fostering a new understanding between Russia and European countries. Besides Trump’s inexplicable and illogical volte-face in contrast to Russian sturdy approach towards Syrian issue is finding new takers. Treaty allies of America and other countries which are affected by American sanctions are now hedging bets on Russia. This new dynamic global development resonates with India’s doctrine of multipolar World and Sochi summit has certainly laid a firm foundation for such a promising development. Quite unsurprisingly, Shinzo Abe, ally of US is next in line for an informal summit with Putin.

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Spate of Indian Economy

People had high expectations from NDA regime which stormed into power with record high electoral majority in past three decades. Now, with elections just a year away, the performance of NDA government headed by Modi is critically analysed along various fronts with a key focus on economic arena. While four years is short period to expect some major breakthroughs, NDA government made fervent efforts to revive, resurrect and reinvigorate Indian economy which was reduced to shambles under the decade long UPA government. Unfortunately, the NDA government, instead of producing a white paper on economy effectively disclosing the massive discrepancies in Indian economy, took a deep plunge to reform the economy. It introduced a series of economic reforms like Demonetization, GST, Insolvency and Bankruptcy code (IBC) and re-capitalisation of state-owned lenders have made a positive impact on the economy.  Of them, demonetization hugely impacted the growth rate and even slowed it. All the people who believed that economy would scale heights under Modi widely criticised government for this poorly executed disruptive move. Much to the anguish of the people, barely a year after the move, GST and demonetization together have infused fresh momentum into economy. Together these moves have increased tax base and tax compliance and now there is a surge in revenue collections.  Experts are now batting that labour reforms in conjunction to these above measures can substantially boost economy. But in a run up to elections, government which is focussed on agrarian stress have promised to increase Minimum Support Price (MSP) to alleviate farm distress.

Similarly, government’s initiatives like Jan Dhan Yojana, Ujjwala scheme, Direct Bank transfers, interbank transactions, Pradhan Mantri Jeevan Jyoti Bheema Yojana (PMJJBY), Pradhan Mantri Suraksha Bhima Yojana (PMSBY) and others are making meaningful impact on the lives of the weaker sections of the country. Clearly, while media is quite disapproving of the desirable impact of these initiatives, making a difference in rural household, the beneficiaries would by and large will go with BJP in the next elections.  Performance of NDA government in four years is not bad at all. This is just a beginning and government should continue to redouble its efforts.

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Measure of Employment Rate muddled by poor data upkeep by concerned agencies

Among numerous issues, the first and foremost, Modi government is widely criticized for failing to fulfill the promise of creating more jobs or insufficient employment generation. Modi government is blamed for bad economics as well despite robust economic indicators suggesting otherwise. Coming to unemployment, there has been a concerted effort to create a misleading narrative that Modi government has dismally failed in creating new jobs. To address, this issue, Pulak Ghosh from IIM Bangalore and Soumya Ghosh, Chief Economic Adviser carried out indepth analysis of data from various agencies to measure employment. But answer to this question was rather tough since even after seven decades of independence, India doesn’t have proper metrics to assess the ground situation without any bias.  The latest report published by Quarterly Employment Survey in December comes with a huge lag of 9 months and covered mere select 8 organized sectors as against 190. Essentially, employment surveys thus far have not portrayed the true picture and suffer from many limitations. Hence the authors tried to evolve a new format to account for employment in both formal and informal sectors on the lines of US monthly pay roll. It is referred to as what is called the Nonfarm pay roll which also accounts for 80% of workers who produce entire GDP of US.

Next the authors attempted to arrive at the correct numbers in terms of people joining the labor force by considering birth rate and then making a conservative estimate of the same. 15million labor force is entering work force every year. Of them only 6.6 million are qualified. Based on estimates, 7 informal jobs are generated annually. As per available data from EPFO (Employees Provident Fund Organization), ESIC (Employees State Insurance Corporation), NPS (National Pension System) and GPF (Government Provident Fund) round 1 crore people are employed in professional bodies and over 1.7 crores are employed by state, which includes education sector and Police. Auto industry provides employs 20 million. Arriving at these numbers has been really an excruciating experience for these economists, since proper records of number of people employed is not properly maintained by various professional bodies and even in informal sectors. States do a shoddy job in compiling the data and fail to have idea of number of people entering labor market annually since they don’t take population growth into account. Further, records are not updated regularly and even people employed for additional jobs as domestic helps etc remain unaccounted. So, the problem is manifold. Despite, glaring inadequacies, a perceptible increase in jobs has been recorded for the year 2017. In absence of fool proof pay roll reporting…it might be little presumptuous to levy baseless allegations….

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Is Indian Parliamentary Democracy just a mockery?

The non-stop excitement offered by Karnataka assembly elections since the day of counting continues to remind that morality has no place in Indian politics. The fluctuating leads and trends on counting day that witnessed premature celebrations in political camps stabilised only in the afternoon presented a grim picture where no single party obtained a clear mandate. BJP which made commendable electoral gains fell short of majority by 8 seats. In the meanwhile, gulping down big egos Congress reached out to JD(S) which obtained 38 seats with 18% vote share for a post-poll alliance. JD(S) much against its pre-poll pledge of staying away from alliance formation with Congress, in a massive volte-face aligned with grand old party in lieu of irresistible offer of Chief Ministership. The post-poll alliance of Congress with 78 seats and JD(S) combine which had the numbers way above the majority mark began to fervently pitch for government formation.

Having conceded defeat in over 10 successive elections, Congress was unseated from power in majority of the states. The massive electoral drubbing since 2014 eroded pan-Indian political presence of Congress. Following a crushing defeat in Karnataka elections the party with over 120 years of legacy is just reduced to Punjab, Puducherry and Mizoram.  Though political analysts took major objection to opposition’s allegation of Karnataka being ATM of Congress, the desperation of party and its outright wooing of the smaller partner JD(S) vindicates popular perception. While counting was underway, Congress rushed its topmost leaders to take stock of situation and to manage the numbers well ahead. Having learnt its lessons, overpowered by the fear of losing its last formidable bastion in South, congress smartly cobbled up the numbers well in advance.

As against fighting pitched battles in the elections, Congress mobilised its entire ecosystem to make last ditch effort to retain power in Karnataka. The post-poll alliance which commanded the support of 116 members met governor to form government. BJP leaders too met the governor with government formation bid. Citing single-largest party claim, BJP strengthened its position. The fractured mandate shifted the onus on governor to take stock of the situation. While some constitutional experts viewed that leader of single-largest party be given first chance to prove the majority others disapproved. Soon people began to refer to recent precedents of post-poll coalitions forming governments and supported Congress stand. Amidst these warring claims, the governor who is constitutionally entitled under Article 163 and 164 to exercise discretion has invited elected legislative BJP leader B S Yeddyurappa (BSY) to form the government. Governor’s decision sparked intense debates. To resolve a hung assembly situation, examining centre and state relations, Sarkaria commission in 1983 laid out certain guidelines. Wherein the order of the inviting the parties for government formation was clearly enunciated. It reads- “In case no party gets majority, the governor should follow an order of preference: a. Pre-poll alliance b. the single largest party c. a post-poll alliance that commands the required numbers to run the government smoothly d. a post-poll alliance in which partners are willing to extend outside support”. The commission recommended that chief minister should seek vote of confidence within 30days.  Even the Punchi Commission set up in 2007 gave similar recommendations. Governor Vajubhai Vala first invited BJP, the single largest party asking them to prove majority on the floor of house within 15days.

Meanwhile, Congress and JD (S) having formed a post-poll alliance herded all their MLAs to resort claiming fears of horse-trading by BJP. Alleging that 15 days is too long a time to safe guard their elected representatives, Congress moved Supreme court at wee hours contesting governor’s discretion in inviting BJP. It even sought stalling of swearing-in ceremony of BSY and legal intervention of the Chief Justice against whom it has moved impeachment motion which was squashed by Vice-President. Ironically, Congress challenging Vice-President’s decision called for urgent hearing of the case as well which was squashed. Though it is different story for some other day. Terming governor’s decision as “encounter of the constitution”, Congress who habitually overturns the SC’s judgements which are not in its favour, thronged Supreme Court. The hearing which lasted for four hours, upheld governor’s decision and even advanced the time of the oath taking ceremony of BSY to 9am. Interestingly, the same attorney Abhishek Manu Singhvi who argued that judiciary shouldn’t intervene in the functioning of legislature in Jharkhand has represented Congress in Supreme Court. As of now, Supreme Court in its latest hearing on Friday, ordered for a floor test tomorrow by 4pm, appointed BJP MLA KG Bopiah as pro-tem speaker to conduct proceedings of floor and ruled out secret ballot ensuring transparency.  In a sudden shift of stance, Rahul Gandhi who has equated Indian judiciary to Pakistan after BSY sworn-in, hailed SC’s latest verdict mandating early floor test.

Congress by repeatedly seeking judicial intervention is undermining the independence of office of governor. It is now learnt that Abhishek Manu Singhvi, Congress attorney is going to approach SC challenging the decision of appointing Bopiah as pro-term speaker. Isn’t there any end to dynasty’s frivolous fault-finding exercise? Excessive judicial intervention in functioning of other organs of democracy may not be a good precedent for a thriving democracy like India. Indeed, it may not be surprise if Congress would once again call for pre-dawn hearing regarding speaker and restraining his functioning like disqualification. Congress has just now submitted an application before SC putting forward five points for transparency.

The competitive malicious politicking, ruthless political manoeuvring, unceremonial shepherding and locking up of elected representatives in resorts, extracting loyalty affidavits from MLAs has now reduced the electoral process to a sham exercise. Karnataka elections witnessed new lows with parties invoking religion, language, Indianness and North-South divide. Indeed, the litany of crass religious politicking in Karnataka cluttered with issues divested from progress and development dominated the poll campaigning. Curiously, all the issues that destroy the social fabric of harmony like- according minority status to Lingayats just before elections and Islamist groups collectively issuing fatwa ordaining Muslims to vote for Congress, trading charges over who is being true Hindu or on beef ban, debate on North-South debate dominated the campaigning. Even after the completion of electoral process in the state, politicians are single-mindedly focused on clinching power.

As of now, with floor test slated for tomorrow, there are reports of MLAs being hoarded and shifted to avoid being poached. The kind of abominable terminology that is being used to describe these events together with huge cache of currency, jewellery recovered in raids before elections indicates incorrigible corruptibility of Indian politics. The gigantic exercise of mobilisation of men, money and muscle power to retain in power has now become integral to elections.  While both BJP and Congress combine exuded confidence, sources claim that five Congress MLAs and three JD(S) MLAs are spotted in Delhi. BJP spokesperson alleged that the Congress party which called for urgent hearing of court at Midnight didn’t even furnish letter containing the signatures of all the supporting MLAs. Now HD Kumaraswamy indicates that he is in no hurry for floor test. A massive Rs 200 crores were spent for the smooth conduct of Karnataka assembly elections. With candidates defecting and allegedly making raw deals for power and position, is Indian Parliamentary democracy just a mockery???

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Invoking strong cultural connect Modi reaches out to Nepal

Prime Minister Narendra Modi’s two-day visit to Nepal on May 11, 12, comes as a follow up to Nepalese Prime Minister K.P. Sharma Oli’s trip to New Delhi reinforcing India’s strong interest in stabilizing ties with the Himalayan neighbour. With China’s muscle looming large over the subcontinent, Modi, the architect of neighbourhood first policy, began building strong ties with immediate neighbours since 2014. True to the spirit of the policy, Modi visited all the neighbouring countries barring Maldives and as toast of friendship gifted South Asia satellite hoisted by ISRO. Unlike his previous two visits to Nepal which ended on a high note, Modi’s current visit comes at a time, when Indo-Nepal relations having weathered turbulent times are still facing trust deficit. The trouble began when Nepal new draft constitution accorded special privileges to ruling hill tribes side-lining the interests of Madhesis of terai (plains) region. This discriminatory stance caused spurt in protests leading to blockade of Indian boundary stalling the movement of goods and supplies choking Nepal.  The eight-month long blockade turned Nepalese hostile towards India and the current regime of OIi stormed into power by riding on this anti-India wave. Oli, who currently heads the opposition of the leftist coalition party sworn in as Prime Minister on February 15^th honouring the tradition, made first visit to India. In his first stint as Prime Minister the height of blockade, Oli accused India of the crisis and signed several agreements with China. He also alleged that India plotted his ouster as Prime Minister and played China card.

India and Nepal which share strong cultural, religious and historical ties, have strong people to people connect. Indeed, both countries have porous borders and India is largest sources of remittances for Nepal and its biggest trade partner. Despite the strong linkages, bilateral ties between the countries were roiled by misunderstandings with Nepal alleging India’s interference in its domestic politics. Geographically Nepal being the inner boundary is very important for India. Sandwiched between Asian giants, Nepal afflicted by “small country syndrome” has effectively played Indian card against China and vice-versa for a long time. But now the current dispensation which is overtly pro-China is making repeated references to “mutual respect” highlighting the erosion of trust. Faced with the challenge of building a harmonious relation with immediate neighbour, Modi has embarked on his third visit to Nepal with focus on three Cs- Cooperation, Connectivity and Culture.

Resonating with the idea of collective development and regional cooperation, India has increased financial aid to Nepal by 73% this financial year to Rs 650 Crore next to Bhutan which receives highest financial assistance of Rs 1813 crore. While there is no official data, it is estimated that 2 million Nepali work in India and to facilitate safe and cost-efficient transfer of remittances, RBI has introduced India-Nepal Remittance Facility Scheme. India has always displayed a strong interest in sustaining robust relationship is now facing the challenge of countering the check book diplomacy of China. 

Modi’s recent visit which was devoid of any big announcements is a spectacular effort to reclaim lost place in Nepal. Dubbed as “cultural diplomacy”, by strategists, Modi’s meticulously planned itinerary of two-day whirlwind program of visiting three places of religious importance besides holding bilateral ties covered a vast ground.  On May 11^th Modi travelled to Janakpur, close to Bihar border and offered special prayers Janaki Temple, the birth place of Devi Sita. Later Modi and Oli jointly flagged off a bus service between Janakpuri to Ayodhya, birthplace of Bhagwan Sri Rama. These two sacred places are immensely significant to Hindus. These places are now going to be part of the ambitious Ramayana Circuit which will include 15 other places across India spanning the states of Bihar (Sitamarhi, Buxar and Darbhanga), Uttar Pradesh (Ayodhya, Nandigram, Shringverpur, Chitrakoot), Jharkhand, Chattisgarh (Jagadalpur), Madhya Pradesh (Chitrakoot), Orissa (Mahendragiri), Maharastra (Nashik, Nagpur), Telangana (Bhadrachalam), Karnataka (Hampi) and Tamilnadu (Rameshwaram). NDA government which made no secret of its intentions of promoting religious tourism began investing heavily in building necessary infrastructure which includes the promise of building a 100 mt tall Bhagwan Rama’s statue by the side of river Saryu in Ayodhya. Inauguration of bus service between India and Nepal both Hindu majoritarian countries will boost tourism, people to people connect and will strengthen trust. Thousands of Nepalese gathered outside the Janaki Temple to welcome Modi where the provincial government has declared a holiday.

Speaking at the civic reception organised by Janakpur provincial government attended by over 1 lakh Nepalese, Modi highlighted on the deep traditional links between the countries. He indicated that Nepal is of top priority in India’s Neighbourhood First policy. He asserted that “India would stand with Nepal in its development journey”.  He said, “We are the base camp now. India is ready to play the role of a Sherpa guide, taking the expeditioners from the base camp right upto the peak of Mt. Everest”. Modi promised $100 million towards for province’s development which will be routed through Kathmandu. Later Modi flew to Kathmandu where he was offered Guard of Honour at the Army Parade Ground in Tundikhel. He met President Bidhya Devi Bhandari and Vice-President Nanda Bahadhur Pun.

In his second summit meet with Prime Minister Oli, Modi reiterated resolve to work together for strengthening on-going cooperation in various initiatives like agriculture, railways, inland water development projects and expand the partnership for socio-economic development. Both sides assured that they “will take effective measures for the implementation of all the agreements and understandings reached in the past”. Leaders took stock of the economic ties and India assured Nepal to make necessary amendments in the comprehensive review of bilateral treaty of trade to address the issue of Nepal’s trade deficit. Taking cognizance of Nepal’s request for additional air entry routes through India, New Delhi promised to expand cooperation in civil aviation sector. Additionally, India agreed to enhance economic and physical connectivity by air, water and land. Both prime ministers jointly laid foundation stone of 900 MW Arun-III hydro electric project in Nepal. For long, India made tall assurances to Nepal but failed in time-bound deliverance.  Allaying Nepali angst over poor implementation of Indian projects Modi promised to expedite priority projects of Nepal’s choice.

Modi visited the Pashupathi nath Mandir, the oldest and sacred temple of Bhagwan Shiva. During President Pranab Mukherjee’s visit to the temple in 2016, government of India aided the establishment of Nepal-Bharat Maitri Pashupathinath Dharamsala Project. In a message to Nepalese, Modi wrote, “Iam happy to get another good opportunity to pray at Lord Pashupatinath Temple. This temple is a symbol of the combined religious heritage of peopke of India and Nepal. I wish for peace, progress and prosperity in lives of people of Nepal and India. Iam grateful to Pashupatinath kosh and government of Nepal for making arrangements for my visit. I hope that devotees will soon get new facilities from the new Dharmashala being developed by India and Nepal on the temple premises”. in the visitor’s book.

Wrapping up Nepal’s visit Modi flew to Mustang in the Northern Nepal becoming the first World leader to offer prayers at Muktinath Temple scared for both Hindus and Buddhists. Wearing a red dress symbolic of Buddhists performed puja to life-sized murthi of Bhagwan Vishnu. The temple is highly revered by a larger community of Sri Vaishnavas of Karnataka,. Modi’s visit to temple a day ahead of Karnataka elections resonate well with domestic electorate.

The rapid developments in Nepal and its newly calibrated foreign policy have a direct bearing on India’s national interest due to open borders. Targeted attacks on Indian assets has become cause of concern. Two bomb explosions-one near Indian Embassy field office at Biratnagar and an explosion near Indian-built power project within a month has triggered a panic reaction in New Delhi. The explosions in quick succession together with Pakistan Prime Minister’s Shahid Kahan Abbasi’s visit to Nepal days after Oli has sworn in as premier warranted India’s immediate attention. Besides, creeping Chinese penetration into Nepal and its inclement urgency towards building a railway connection from Shigatse to Kathmandu has promoted India to deepen partnership with Nepal. Also, China has been constantly invoking the common Buddhist linkages with Nepal and pledged to develop Buddhist monuments.

Religion and culture have been the strongest connecting links between India and Nepal. Hinduism which is a global minority is the major religion in both countries. For long leaders of both countries had been shy of wearing their religion on their sleeves. For the first time, Modi forthrightly took the pride of being a Hindu and emerged as an icon for the aspirations of Hindus who were facing similar threats in both countries. While Modi, has been highly criticised by hardcore Hindu leaders for failing his core support base in India, till now no Hindu leader unabashedly displayed his religious identity. With his ingenious diplomacy which is getting better by the day Modi is raising the bar for domestic politicians and his successors as well.  Modi engaged with leaders of various political hues in Nepal to normalise relations. Aside his formidable soft power diplomacy, Modi has promised to deepen cooperation, partnership and offered support on various fronts. The message is loud and clear: India is ready to make all amends to strengthen the relationship. The ball is now in Nepal’s court….

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Trump’s abrogation of Iran deal is a shot in arm for Revisionist Countries

On the face of it while pulling out America from the Joint Comprehensive Plan of Action (JCPOA) appears to be a poll promise, President Trump has pushed volatile Middle East into a deep abyss. Trump who condemned the Iran deal as a shameful concession to a rogue nation promised to scrap the treaty if voted to power. In January, Trump reluctantly signed waiver of sanctions which is reviewed every 120 days and prevailed that he won’t sign the next waiver until radical changes are made in the deal. Trump unequivocally signalled his intention of repudiating the treaty months ahead and hence his announcement on May 8^th has been unsurprising.  He complained that the deal is “defective at its core” as it curtailed Iran’s nuclear ambitions for a fixed time. Russia exasperated by Trump’s threats raised this issue in UNSC condemning American unilateralism for contemplating changes in the historic P5+1 treaty which has fructified after twelve years of negotiations.

In the last week of April, French President Emmanuel Macron and later Chancellor Angela Merkel travelled to Washington to appease Trump. Notwithstanding, advice of European allies, Trump announced withdrawal of America days before the scheduled review of waiver on May 12^th. Back, in 2015 when the historic deal was clinched, critics pointed at glaring lacunae, ill-equipped to rein in on nuclear ambitions of Iran. But countries chose to ignore frailties of the deal, hailed it as a stellar diplomatic feat of Obama administration. Since the deal, Iran conducted more than 20 missile tests and seamlessly expanded its influence in the region.

Days ahead of Trump’s announcement, Iran’s strategic partner Hezbollah swept polls of Lebanon reducing the influence of Saudi-proxy Prime Minister Saad Hairiri and buttressing Tehran’s dominance. Similarly, pro-Iranian leaders are expected to triumph in the over pro-Western forces in the Iraqi elections to be held on May 12^th. Having portrayed itself as the messiah of Shias, Iran gained quick access into Iraqi domestic politics. After collapse of Saddam Hussein’s regime in 2003, to stall American expansion in its immediate neighbourhood, Tehran provided refuge and funds to Shia leaders. By 2014, when IS became a dominant force in Iraq, Iran extensively cultivated ties with Sunnis and Kurds, participated in anti-IS campaign and made territorial and communal gains. Iran wanted extermination of IS and restoration of peace in Iraq but preferred a weak government in Baghdad to have enough leverage. Powering its hegemonic aspirations, Iran is steadily growing in strength in the Middle East. Since lifting of economic sanctions, Iran has consolidated its position in Middle East. Clinching evidence confirms that Tehran has been supplying weapons and funds to Hezbollah operating in Lebanon, pro-Assad forces fighting in Syria and Houthi rebels fighting the Saudi-led coalition in Yemen. Rejuvenation of Iran has intensified hostilities in the region with Iran and Israel locking horns across the Syrian border near Golan heights. Expectedly, barring two countries Israel and Saudi Arabia, major nations expressed concerns over Trump’s decision.

Trump’s decision created an unprecedented commotion and pushed experts into serious rethinking about the spate of impending nuclear threat and urgent need for evolving a consolidated plan of action. America’s European allies UK, Germany, France expressed serious concerns over Trump’s decision but pledged adherence to JCPOA. Russia was miffed by the decision and China which is threatened by US trade war expressed regret and vowed to safe guard the deal. Besides, withdrawing America from the deal, Trump signed Presidential memorandum reinstating “highest level” of economic sanctions on Iran. Trump’s decision was widely criticized since pulling out the multilateral joint agreement is tantamount to violation of global diplomatic norms. Secondly, 11 detailed reports of International Atomic Energy Agency (IAEA) since January 2016 confirmed that Iran hasn’t violated rules of the treaty and evidently there is no plausible justification for dumping the nuclear deal.

Moments after Trump withdrew from deal Hassan Rouhani of Iran, announced that it will abide by deal and asked other allies to figure out a way forward without US and imposed time limit for such negotiations. But now the crucial issue remains whether the remaining parties can evolve a workable solution that can contravene the US imposed sanctions within limited time frame. He added “Iran will start enriching more than before” if the solution is not satisfactory. Expressing doubts over European support Iran Supreme Leader Ayatollah Khamenei warned, “without receiving strong guarantee from three European countries, we won’t stick to the nuclear agreement”.  Iranians who were tired of the four decades of hard-line Islamic rule, overwhelmingly embraced JCPOA and counted on it to alleviate their economic plight. Much against domestic opposition from the Islamic clergy, Rouhani pursued the deal. Capitalising on Trump’s Iran’s foreign policy, hardliners stoked incipient distrust towards America.

Iran and America had tenuous relationship which was irrevocably damaged after Iran held 54 American diplomats and citizens hostage for 444 days in 1980.  The republic which was largely controlled by Islamic hardliners since Iranian revolution 1979, avoided forging any relations with the West. But guided by the interest to develop economic and political partnership with international community, Iranian leaders made several attempts to reach out to America. In the process, Iran offered to make few concessions. But America rebuked Iran as part of “axis of evil”. Hence JCPOA, for Iran is a testimony of trust and by abrogating the deal, Trump validated Islamic clergy claims of America as a mistrustful partner.

Responding to Rouhani’s efforts, European bigwigs UK, France and Germany assured that EU3 will not allow the deal to be dismantled. But the larger question remains as how EU can conduct trade under the shadow of US sanctions in this globally interconnected world.

Trump’s decision has massive geopolitical implications. Iran which has just recovered from years of economic sanctions and isolation supplies 4% of global oil. Post-announcement, price of Brent Crude increased by 29 cents, highest since mid-2014. Economic momentum across the World has pushed the demand for oil and major consumers of Tehran’s oil include European and Asian countries. In August 2017, Congress passed Countering America’s Adversaries Through Sanctions Act (CAATSA) which is impeding India’s defence deals with Russia. US economic sanctions against Iran will bring all the oil customers including its European allies under the ambit of CAASTA. These trade dealings might create fresh fissures between America and its European allies. If America grants waiver to European allies and exempts them, then other countries will demand similar concessions with respect to their trade transactions with Russia, North Korea. Reducing the high posturing of “highest level of sanctions against Iran” to mere rhetoric.

China and India, two largest importers of hydrocarbons purchased Iranian oil even during sanctions. With increasing oil demand, both countries will seek a waiver or bypass sanctions to continue buying oil from Iran. If Iran’s two main customers manage to tweak American sanctions, the threat of strictest sanctions of Trump will be null and void. Aside Oil, Iran is strategically important to India as major connectivity hub for International North-South Corridor (INSTC) and investments in development of Chabahar port. America can hardly undermine importance of Chabahar port, an essential transit conduit to Afghanistan. Similarly, Iran is a pivotal link in China’s BRI (Belt Road Initiative) project for Eurasian Integration. China which is already locked in a trade war with America might now increasingly seek to cooperate with EU3 who disfavoured Trump’s decision. In the process, while US might not only be isolated but the revisionist attributes of China will receive a fresh lease for life. Reeling under the burden of economic sanctions Russia which Chinese orbit established strong ties with Beijing. Iran which has shifted its focus from West to East recently signed several agreements with China and Russia. Trump’s unilateralism hastened Tehran’s run into Chinese embrace. Already Iran is cooperating with Russian forces in Syria and this crisis will prompt Iran to join hands with Moscow on issues of mutual concern like Afghanistan, paving way for emergence of a strong China-Russia-Iran coalition. Trump’s ill-advised hasty action has shifted the geopolitical strategic balance in favour of China now. It has annihilated all hopes of regional cooperation in Middle East seat of internecine wars.

In the meanwhile, reports indicate America is mulling a regime change and James Mattis, Defence Secretary and John Bolton, National Security Advisor, known Iranian hawks are now in talks with Iranian resistance groups operating in exile Mujahideen-E-Khalq (MEK). MEK, was once listed as terrorist organization by US State Department. With nuclear deal at the verge of collapse, experts suggest that America might topple the Islamic Republic of Iran. Unravelling of the republic can create a havoc in the region. Strategists point out that Trump donot have a solid plan for regime change in Iran. But he scrapped the deal to destroy Obama’s political legacy and play to domestic politics.

Trump’s faltered Iran policy besides exacerbating regional stability will pose formidable challenges in restoring peace in the Middle East. Trump justified his action as an effort to curtail the “malign activities of Iran”. But what can explain American ineptness in curbing terror activities emanating from the land of Wahhabism and its covert indifference to Pakistan’s nuclear proliferation. With Iran enunciating its keenness to tread nuclear path if European countries fail to rework the deal, Saudi Arabia will intensify its campaign of acquiring nuclear weapon. American history which has been an epitome of hypocrisy has now triggered a nuclear arms race and decimated vestigial hopes of instituting a US-centric World.  Besides with abrogation of Iran deal, a testimony of global diplomacy, countries might find it increasingly difficult to tame the nuclear aspirations of rogue nations.

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Beyond symbolism, Wuhan summit enhanced mutual understanding between India and China

The two summits-Korean and Wuhan Summit which concluded recently, in Asian continent brought a semblance of peace, hope and renewed cooperation. While a joint statement was issued after the Korean Summit, Indo-China summit lasted which for two days didn’t formally released any joint declaration. Modi and Xi indeed held six rounds of talks. Putting irreconcilable differences on the back burner, in tune with changing global paradigm, Modi and Xi met at Wuhan. Concluding the summit, both countries issued separate statements, containing themes of convergence and inadvertently stressed on issues that mattered most to them. In fact, a new beginning made by Asian giants undermining differences opened new vistas for cooperation.  

As discussed earlier, the threat of US trade war prompted China to form a united front with India against the protectionist approach of America.  Setting stage for a renewed engagement Chinese foreign minister who was in India March said, “The Chinese Dragon and Indian Elephant must not fight with each other but dance with each other”. Earlier in February, China meekly agreed to forgo its opposition to black-listing of Pakistan at FATF (Financial Action Task Force) in return for India’s support for Beijing’s Vice-Presidential elevation. Also, the flurry of the high-level reciprocal visits of dignitaries between two countries since Xiamen BRICS Summit of September 2015 infused a new momentum in Indo-China relations.

Days ahead of summit, Indian side reiterated that it had low expectations from the informal summit. Expectedly so, while the summit was very high on bonhomie, it didn’t offer any magic bullet for all the longstanding issues that roiled bilateral ties. Wuhan summit was inspired by President Xi’s earlier stint of sorting out relations with America with President Obama at Sunnylands in 2013. Summit held at California didn’t produce any lasting outcomes it helped to ease out relations. With both India and China feeling the heat of the disputes and incursions which have snowballed into a stand-off, this summit offered to reduce friction temporarily with Modi and Xi reaching broad consensus over certain issues. Significantly, there is no mention of Masood Azhar issue, NSG membership or burgeoning trade imbalances. As expected China’s stance on specific issues, related to third party and its vassal state Pakistan have been rather muted.

Wuhan summit besides symbolising ascendency of personalised diplomacy has for once ended the Chinese protocol tradition of equating Indian Prime minister to their premier. It must be recalled that in 2015 Chinese Premier Li Keqiang was deployed to extend ceremonial welcome to Modi on his visit to Xian. In this context, President Xi hosting Prime Minister Modi for two days at Wuhan is a major elevation to status of democratically elected leader of India. Xi taking complete charge of the whole issue not only reflected his growing clout but it has literally reduced the prominence of Chinese premier Li. For two days, the unmissable ambience, electrifying welcome of Modi with Bollywood number, “Tu hai wahi dil ne jise apna kaha”, long walks along the Wuhan lake, tour to heritage museum, the traditional tea ceremony and finally a relaxed boat drive on boat for “peace, prosperity and development” made for impressive optics. Unperturbed by China’s seemingly flexible stance, India remained firm on certain aspects and categorically expressed its opposition towards BRI (Belt Road Initiative), CPEC (China Pakistan Economic Corridor) and strongly condemned state sponsored terrorism without directly referring to Pakistan at the Foreign Affairs Ministers meeting of SCO (Shanghai Cooperation Organisation). While Modi embarked for Wuhan, underscoring the need for de-escalation of tensions between both countries, Congress Spokesperson launched a scathing attack on Prime Minister for attending the informal summit. In a series of five tweets, he lashed out at Modi saying “Will PM Modi take up the issue in the summit with Chinese president today in Wuhan, China? Modiji may not be able to show “red eyes” as he loftily promised, but will he show the courage of conviction to do plain-speaking on Doklam and defend India’s interests?”. In response, demarcating,  India’s national interests from its attempts in pursuing friendly ties with China, while Modi was in Wuhan, government announced that 96 new border posts of ITBP (Indo-Tibetan Border Police) will be added along the Indo-China border to enhance operational capability.

Leaders agreed on certain common themes and differed on specific issues as evident from the statements issued by respective countries. Sticking points of Indo-China relations have been long-festering border issue, terrorism and trade imbalances.  As has been evident from Chinese approach, Beijing has always been tongue-tied in calling spade a spade with respect to terrorism. This summit has been no different. While Indian statement read, “Prime Minister Modi and President Xi recognised common threat posed by terrorism and reiterated their strong condemnation of and resolute opposition to terrorism in all its forms and manifestations. They committed themselves on counter terrorism”. China made a reference to terrorism in passing. The choice of words and casual reference to scourge of terrorism aptly reflects Beijing’s indifference to Pakistan’s state sponsor terrorism. It says, “They agree to join hands in offering innovative and sustainable solutions to global challenges such as epidemics, natural disasters, climate change and terrorism”. Needless to say, Beijing indirectly suggested India that China will be the last person to join hands in fight against terrorism. China have strategic and economic interests in Pakistan. Beijing’s strong urge to defend Pakistan is understandable, since Islamabad has been China’s formidable asset in its containment of India policy.

Both sides stressed on importance on maintaining “peace and tranquillity”, “implementing confidence building measures”, “trust and mutual understanding”. While a greater congruence over resolution of border issue is evident from both the sides, they lamented lack of strategic communication which eventually escalated Doklam border stand-off. In a welcome development, both sides agreed to use Special Representatives meeting on border issue for a fair, reasonable and mutually agreeable settlement. Indian emphasised on “strategic guidance”, “predictability and effectiveness in the management of border affairs” to avoid unnecessarily border skirmishes.  While Indian statement expressed its intent to settle down the Indo-China border issue at the earliest, Beijing’s lack of determination is striking, implying its intent of using border as a strategic leverage.

Both countries appreciated the need for building a free, open, inclusive, multipolar, pluralist global economic order, China has been very vocal in championing globalisation. As against India’s subdued approach China opined, “The two countries will work together to make international relations more democratic, increase the representation and say of developing countries and emerging markets, support multilateral trading regime, oppose protectionism and work for an open, inclusive, balanced and win-win economic globalisation that benefits all”. Perturbed by economic slowdown, increased debts, threats of trade tariff war and America’s confrontational attitude Beijing is seeking to deepen engagement with India. This economic anxiety is evident from its strong-worded statement.

While India sought to “push forward bilateral trade and investment in balanced and sustainable manner by taking advantage of complementarities between their two economies”, China wanted to harness the full potential of business and investment cooperation and new ways of exploring win-win situation. This ominously worded win-win situation which is the foundation for OBOR as well should ring bells for India that China is interested exploring investment opportunities in India and not interested in addressing ballooning trade deficits. But for all the grand talk on free trade, even now China has closed doors to India’s pharmaceuticals, agriculture goods, Aluminium and beef exports. Indo-China bilateral trade touched a new high reaching $84.44 billion. Though Indian exports have increased 40% the trade deficit hovers around whopping $51 billion. Experts predict while bilateral trade might soon touch $100 billion, burgeoning trade deficit might spell doom for growing Indian economy.

Besides, both leaders stressed the need for encouraging cultural exchanges and people to people contact, strengthening closer Developmental Partnership, underscored need for developing multilateral financial and political institutions and called for candid discussions on political and security issues.

Interestingly, while China invoked the five principles of mutual coexistence of Panchsheel, India avoided any such references. Modi invited Xi for an informal meeting in India next year. The major outcome of Wuhan has been both countries agreed to work together on an economic project in Afghanistan. While the summit may not be high on outcomes, leaders have rejuvenated bilateral ties hovered by dark clouds of distrust. Close on heels, with leaders agreeing to lend “strategic guidance” to their militaries to build trust and mutual understanding, Army Chief Bipin Rawat is set to meet NSA Ajit Doval to discuss measures for keeping the LAC “incident-free”. Decks are now cleared for establishing a direct hot line between Indian Director General Military Operations (DGMO) and Chinese counterpart and for creation of information sharing mechanism. Both armies are now mooting joint patrolling in disputed regions. Army sources indicated that this limited joint patrolling experimented in few regions of Arunachal Pradesh has been successful. It might be too premature to comment on the outcomes of Wuhan summit but certainly there is a display of some understanding. As of now, India shouldn’t reduce guard and be cautious and follow dictum of “trust, but verify”.

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