Chapter 2. International Relations Notes for UPSC Mains

Effect of policies and politics of developed and developing countries on India’s interests – SYLLABUS

    • Trade – WTO , G33, Doha , GI, SPS, Seeds, BIT
    • Environment – CBDR – Paris, Kigali
    • Protectionism
      • Brexit, TPP, US
      • Issues – trade, cooperation, Xenophobia, Migrants, SPS, Students , FDI
      • What to do
        • RCEP, Local – SAFTA ( 6%), others – BIMSTEC, BRICS, COMESA of Africa, INSTC
        • Diversification of Product lines
        • FTA – UK
        • Tertiarisation – borderless
        • Raise the issue in IMF
    • UNSC , WB, IMF
    • Developed countries responsibility to protect
    • Strategic – Cold War Blocks
    • Nuclear
    • Migration – Rohingya
    • Deportation – Abu Salem and Portugal, Mallya and Britain

BRICS

    • Contradictions
      • Economic
        • Chinese GDP more than double of the rest combined
        • 2 Commodity exports and others Commodity Import countries
        • Chinese call to remove Protectionism
        • Growth – Brazil
      • Political
        • India China
        • India Russia and Indian embrace of West
      • Chinese dominance especially in CRA
        • Linking NDB with the silk road projects- forwarding Chinese aggressive ambitions
      • Other similar forums

        • IBSA, RIC (Russia, India, China )
        • IBSA is more development oriented
      • Opposition from USA, Japan
        • Possible cold war formation
      • Geographical Distances and limited trade except with China
      • Divergence over the way to deal with West ( russia more Anti- West than rest), environement, trade protection, Indian inclusion in UNSC etc

Progress

    • BRICS bank
      • Called NDB- New Development Bank
      • Headquarters in Beijing
      • Capital
        • Initially 50 billion dollars
          • Each nation 10 billion dollars
          • No country can increase its stake without other’s consent
        • To be increased to 100 billion dollars
      • Other nations can join
        • But, share of founding member can’t fall below 55%
      • Nations say depends on their stake
        • Hence equal at first
      • Pros
        • Will promote trade in their respective currencies
        • Additional Funds for development
        • Not subject to western vetoes
        • Equal voting rights
        • Psychology- Emergence of India
        • Elaboration required
        • Opportunity– The suspicion over the troika of IMF, EU and ECB in the Greek crisis

CRA-Contingency Reserve Agreement

      • Initially 100 billion dollars
        • China- 41 billion dollars
        • India, Russia, Brazil- 18 billion dollars
        • S Africa – 5 billion
      • Based on currency swap
      • Helps to ease liquidity pressure and avert BOP crisis
      • Implication of Chinese dominance here- elaboration required
    • Recent summit in Xiamen – success
      • Joint call for action against Pak based terror
        • May not mean much
        • But indicates that there may be limits to how much China is willing to accommodate Pakistan
        • Also shows Indian diplomacy where cooperation and confrontation with China both are required
    • Recent inclusion of Urban Development under its agenda
      • And the potential benefit to Smart India

BIMSTEC

    • Bay of Bangal Initiative for Multi Sectoral Technical and Economic Cooperation
Countries around Bay of Bengal India Ban Myan Thailand Lanka Nepal Bhutan
    • Recent steps
      • Permanent secreatariat announced in DHAKA
      • Recently India hosted summit in Goa
    • Sector Driven Cooperative Organisation ( Economic )
    • Benefits
      • Political
        • Geographically coherent and more like minded grouping than SAARC
      • Economic
        • Countries with Buyont growth – 6.5%
        • FTA in progress
          • Sectors like Fisheries , Tourism, Transport, Energy – all of which will help India
      • Act Asia
        • Would complement Indian measures like Trilateral Highway, Kaladan
      • North East
      • Social Issues – Drugs, Terrorism
    • Issues
      • Refugee
      • Formality
      • Role of Himalayas as a geographical break
      • Chinese influence
      • Simialr – BCIM, SASEC
      • Lack of interest fgrom Thailand – CMLV

BCIM

    • Ban, Chi, India, Myanmar
    • BCIM Corridor
      • The BCIM Economic Corridor is a modern version of the Silk Road.
      • It is planned to run from China’s Kunming province to Kolkata in India, and link Mandalay in Myanmar and Dhaka and Chittagong in Bangladesh through a network of roads, railways, waterways, and airways under a proper regulatory framework
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The initiative seeks to:

    • Improve connectivity and infrastructure – power projects, telecommunications etc.
    • Energy resources, agriculture, and trade and investment.

Benefits to India and BCIM as a whole

    • Together, the BCIM countries account for 9 per cent of the global landmass and 40 per cent of the global population.
    • Special emphasis on inter-regional road network as roads are the cheapest route of trade. This will lower transportation costs between India and China by 30 per cent and escalate already growing Sino–Indian trade through the BCIM Corridor.
    • The BCIM Corridor will allow all four countries to exploit existing complementarities in trade — in terms of both sectors and products.
      • Myanmar is a primary goods exporter and has abundant cheap labour
      • . India has positioned itself as a leading services exporter.
      • China is the largest manufacturing exporter in the world; and
      • Bangladesh, like many other South Asian countries, engages in both services export and low-end manufactured goods.
    • To address energy security, BCIM sub-regional cooperation can capitalise on hydrocarbons in Bangladesh, hydro-electric and mineral resources in Northeast India, natural gas reserves in Myanmar, and coal reserves in East Indian states like Odisha, Chhattisgarh and Jharkhand and China’s Yunnan province.
    • Corridor will provide access to sea for north-eastern States
      • Will connect far Mainalnd & east via NE
      • Trade increases through this region
      • Infrastructure creation in the NE
      • Also paving way for energy transfer
        • Chicken’s Neck is over crowded
      • Myanmar gas pipeline

OCEAN AND INDIA

    • Project Mausam
    • SAGAR
      • Safety and Growth for all in the Region
    • Coastal Radars
    • Other issues – China – MSR, String of Pearls, Energy Security, Piracy, Disaster, Oceanic Resources, Continental Shelf , Port Led Security, Trade
    • Indian Ocean Rim Association (IORA):
      • 1st ever leaders summit recently – JAKARTA
      • Could revitalise

It is an international organisation consisting of coastal states bordering the Indian Ocean. IORA was established in 1997 to promote cooperation in the Indian Ocean region. It Association comprises 20 member states

    • It was formerly known as the Indian Ocean Rim Initiative and Indian Ocean Rim Association for Regional Cooperation (IOR-ARC).
    • tripartite in nature, bringing together representatives of Government, Business and Academia, for promoting co-operation and closer interaction
    • It is based on the principles of Open Regionalism for strengthening Economic Cooperation particularly on Trade Facilitation and Investment, Promotion as well as Social Development of the region.

The objectives of IORA are as follows:

    • To promote sustainable growth and balanced development of the region and member states.
    • To focus on those areas of economic cooperation which provide maximum opportunities for development, shared interest and mutual benefits.
    • To promote liberalisation, remove impediments and lower trade barriers towards a freer and enhanced flow of goods, services, investment, and technology within the Indian Ocean rim.
    • Importance now because of Project Mausam

MGC

    • Mekong Ganga cooperation
    • CMLV ( Cambodia, Myanmar, Laos, Vietnam ) , India and Thailand
    • Formed in 2000
    • Currently has no permanent secretariat and no budget
    • Thailand lost interest in MGC after it formed ACMECS with the same group of countries minus India
    • Elaboration required

Project Mausam

    • Aim- to establish cross cultural linkages and to revive historic maritime cultural and economic ties with 39 Indian Ocean countries.
    • The 39 countries includes Bangladesh, China, Egypt, Iraq, Mauritius, Singapore, Thailand, Yemen, South Africa, Philippines, Pakistan among others.
    • launched in 2014
    • China showed intention to link it with Maritime Silk Road.
      • # String of Pearls
    • It is a Ministry of Culture project with Archaeological Society of India (ASI) as the nodal agency
    • 2 central aim
      • to reconnect and re-establish communications between countries of the Indian Ocean world, which would lead to an enhanced understanding of cultural values and concerns;
      • while at the micro level the focus is on understanding national cultures in their regional maritime milieu.
    • The central themes that hold Project ‘Mausam’ together are those of cultural routes and maritime landscapes that not only linked different parts of the Indian Ocean littoral, but also connected the coastal centres to their hinterlands.
    • Challenge
      • Diego Garcia – American and British base
      • Maldives
        • – US building naval facilities
        • Coming closer to China , GMR
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Coastal surveillance radar project

    • 8 surveillance radar in Mauritius, Seychelles each
    • 6 in Sri Lanka
    • 10 in Maldives
    • 50 in India
    • All connected to integrated analysis centre near Delhi
    • An extension of Project Mausam

Maldives

    • Constitutional crisis
      • Abdullah Yakeen not eager to listen to the supreme court which has called for release of Mohammed Nasheed
      • Has seen arrest of SC Chief Justice
    • Should India use force?
      • Sir, I think that is not required
      • And, I personally believe, it is possible to coerce Maldives simply using threat, toutism advisories and in worsst case Naval Blockade
        • As US did during Cuban Missile Crises
    • India has a naval presence at the request of Maldives since 2009
    • India provided water aid in 2014
    • Operation cactus in 1980s- India foiled a coup
    • Talks of South Asia satellite
    • Agreement of DTAA
    • Concerns
      • Abdualla Yameen as the president
      • GMR cancellation airport
      • Growing China influence – Silk route
      • FTA with China

Seychelles

    • India building a naval base
    • 1st naval base
    • More significant after China acquiring naval base in Djibouti, gulf of Aden
      • Recently, Prez visited Dijibouti – Possible scope for India – Djibouti follows – Open to all policy
    • Also connected by Coastal Radar Project

Mauritius

    • 70% Indian origin
    • 33% of FDI in India since 2000 from Maritius
    • India is the largest source of import to the country
    • Recent deal in Bio Farming technology from the island state
    • Coastal Surveillance

PACIFIC ISLANDS

    • Forum for India Pacific Coopeation – FIPIC
    • Hydrocarbons
    • Fisheries
    • ACT EAST policy
    • Fiji – Indians – Culture
    • UN
    • TO counter the impact of China
    • Space Diplomacy
      • Manhgalyaan Tracker – Based in Fiji
    • India has offered support of Space Tech, Pharma, IT, MSME connectivity , Naval Support, Scientific support
    • Issues – Climate Change, Nuclear – Solomon Islands – Disarmament
    • Limited connectivity and smalll sizes to make investment profitable

Difficult times with neighnours

    • India alleged to play role in internal politics
    • Nepal– Support to Madhesis in blockade, hand in attempting tackle of Oli Govt
    • Maldives– Publi criticism of policies targeting ex prez Mohd Nasheed prompting sharp reply
    • Mynamar– Hot Pursuit and building of border wall
    • BhutanLPG subisdy
    • Overall- Parliamentary committee observed Indian loan and aids to south asian nations have fallen by 20%

Shanghai cooperation organisation (sco)

    • India was an observer from 2005 the multilateral grouping.
    • Total 8 members now – India, China Russia Pakistan Kazakhstan Uzbekistan Tajikistan Kyrgyzstan
    • focus areas- MILLITARY COLLABORATION connectivity, counter terrorism, energy sector, increasing trade, drug trafficking

Other details of Shanghai Cooperation Organization

      • Founded in 2001 in Shanghai by the leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. These countries, except for Uzbekistan, had been members of the Shanghai Five, founded in 1996; after the inclusion of Uzbekistan in 2001, the members renamed the organisation.
      • The SCO is seen as a counter to the North Atlantic Treaty Organisation (NATO).
      • its affiliates account for about half of the world’s population.
      • The SCO has established relations with the United Nations, where it is an observer in the General Assembly, the European Union, Association of Southeast Asian Nations (ASEAN), the Commonwealth of Independent States and the Organisation of Islamic Cooperation.
      • It also has Afghanistan, Iran, Mongolia as observers, and Belarus, Sri Lanka and Turkey as dialogue partners.
    • Benefits to India
      • Allows India greater access to central Asia- minerals, oil, expert market
      • Solidifies plans to build trade routes to Russia via Chahbar port in Iran – INSTC, Ashbagat
      • Politically, a balance against the pro -US tilt
      • With SAARC, RCEP and now SCO , India can have economic treaties with almost the entire Asia
      • Forum to check against spread of terrorism
      • All the benefits of Central Asia
      • Plus, a platform for India Pak to engage with – as seen in UFA talks
      • May counter the Chinese influence in the region
    • Cons
      • Called Anti NATO – and may harm our American Relations
      • China Dominance
      • Pakistan presence
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SAARC

    • History, Set up
      • Secretariat in Kathmandu
      • Members = 8 nations = BBIN + Lanka + Maldives + Pak + Afghan
    • 20 % of the world’s population
    • SAARC satellite
      • Neighbouring countries had been bypassing India to launch their own satellites with China or US help
    • SAFTA
      • South Asia Free Trade Agreement
      • Signed in 2004
      • To reduce custom duty on GOODS to 0 by 2016
        • Result
          • BBIN + Sri Lanka + Afghanistan duty free import
      • Sensitive list to be reduced to 25
      • Does not cover SERVICES
    • Challenges with SAARC
      • India Pakistan the elephant in the room
      • SAFTA in services stuck
      • Economic
        • Intra trade forms only 6%
        • Ad valorem equivalent of non tariff barriers for manufacturing goods was 125% in 2011 (Prabir, 2014) as against 80% with USA
      • Political issues between all countries
        • SAARC charter doesn’t allow discussion of bilateral issues
      • Sub grouping
        • BBIN
        • South Asian Sub-regional Economic Cooperation (SASEC)
          • BBIN + Maldives, Sri Lanka
      • Indian aid to South Asian countries reduced by 20% at a time when China is making entry
        • Grant replaced by loan s
      • Has not passsed the Convention on Suppression of Terrorism
    • BBIN
      • SAARC aalows to set up sub grouping inside itself
      • Bangladesh, Bhutan, India, Nepal
      • Disagreement within the group has paved way for it
      • Duty free trade block
        • Under discussion
      • BBIN Motor Vehicles Agreement
        • Now no need to unload people and goods at the border check points
        • Earlier goods vehicles were allowed only upto 93 km. Then, they had to ubload and change to a local vehicle
        • Benefits
          • Promote efficient flow of traffic

Currently, SAARC is one of the least connected regional bodies

Only 6% of their trade is intra-regional

          • Will allow India, Ban to each other ports, Also Nepal, Bhutan can access the ports
          • Will boost economy & people movement , tourism , NE
          • On lines with the EU motor flow
        • Was signed after a SAARC Motor Vehicle Act could not be signed due to indifferences with Pak, Af..
      • BBIN road corridor through chicken’s neck under construction
      • BBIN Power market also under discussion
      • BBIN – Also called South Asian Golden Quadrilateral by ADB due to Growth potential
    • South Asian Sub-regional Economic Cooperation (SASEC)
      • BBIN + Maldives, Sri Lanka + Myanmar
      • Not a part of SAARC – Instead alternate grouping
      • SASEC Road Connectivity Scheme is being negotiated

CASE STUDY of SAARC

    • SC recommended setting up of common SAARC court
    • Judges from all countries
    • Issues like cross border terrorism, smuggling, trafficking