Abe’s Re-election and India-Japan Relations

Dr Harinder Sekhon, 

Senior Fellow, VIF

Shinzo Abe’s decisive victory in the mid term polls on December 14 augurs well for the future of India-Japan relations. Diplomatic ties between India and Japan that have seen an upswing over the past two decades are slated to assume even greater significance in the coming years. While Prime Minister Mori and Prime Minister Vajpayee laid the foundations for a robust partnership between India and Japan, many factors have contributed to this, the main being the changing strategic balance of power in Asia-Pacific due to China’s rise and domestic economic challenges that have bound both India and Japan to examine ways of fostering economic interdependence through bilateral and multilateral trade security agreements.

Japan has steadily come to occupy an extremely significant place in India's foreign policy and economic calculus and is one of the main pillars of India's Look East Policy. The great bonhomie between Prime Minister Modi and Prime Minister Abe is well known and Japan was the first bilateral visit by Modi outside India’s immediate neighbourhood. Modi and Abe, through their chemistry have been able to establish a new era in relations between both countries. Critical areas where the interests of the two countries converge include the economy, education, science and technology, maritime security, proliferation of nuclear weapons, cyber security and space cooperation.

In their Joint Statement¹ in September, the two Prime Ministers pledged to “realize the full potential of India - Japan Strategic and Global Partnership for continuing progress and prosperity for their people and for advancing peace, stability and prosperity in Asia and the world. Elevating the relationship to a Special Strategic and Global Partnership, they called their meeting the dawn of a new era in India - Japan relations.”

The Fact Sheet titled India and Japan - Partners for Common Development, ² on economic initiatives between India and Japan, enumerated a number of proposals to be carried forward between the two countries. But, given the security architecture in the Asia, defence and security matters received more attention. Defence cooperation between India and Japan is strong and the trilateral Japan-India-US Malabar exercises and the Okinawa exercises between India, Japan and the US along with Singapore and Australia are progressing well.

In particular, the recent developments in Japan’s policy on transfer of defence equipment and technology are a positive outcome. This fits in with India’s own “Make in India” policy announced by Modi. There is a lot that can be done by identifying specific areas for joint production and making relevant policy recommendations to respective Governments. India and Japan can specifically explore working together in cyber security and the maritime domain – where the Indian Navy is in need of urgent modernization and Japan has the expertise in shipbuilding. Talks are at an advanced stage amongst the Joint Working Group³ on cooperation in US-2 amphibian aircraft and its technology, and if this happens, it would mark Japan's first overseas military sale in nearly 50 years.

While the recent India-Japan bilateral discussions focused more on defence and security issues, Modi also sought increased investment from Japan which is India’s fourth largest foreign direct investor. The Indian Prime Minister invited Japanese attention to stepping up cooperation in infrastructure development in India and it is hoped the two Governments will move forward together in this critical area.

India has increasingly begun to realize the benefits of foreign investment, trade, and economic integration, and a development oriented Indian Prime Minister has taken definitive steps to not just “Look East” but “Act East” by following a more vigorous policy to improve economic and strategic relations with Southeast Asia, Japan, and even China. According to Sheila Smith, Senior Fellow at the Council on Foreign Relations, "Modi went to Tokyo with a very clear message for Japanese businesses that he was going to address the country's labyrinth of regulatory and tax complications that get in the way of foreign direct investment, which the Japanese business community has scratched their heads over for a long time."⁴ The challenge now is for Modi to overcome domestic bureaucratic constraints and move forward on the vision he has articulated for India’s growth.

The task is not easy and Modi now must walk the talk and implement the steps that will both revive India’s economic fortunes while “simultaneously bolstering its defences and strengthening its strategic partnerships with like minded states, thereby promoting regional stability and blocking the rise of a Sino-centric Asia….This dovetails nicely with Abe’s soft nationalism, market-oriented economics, and new Asianism, seeking close ties with Asian democracies to create a web of interlocking strategic partnerships.”⁵

Trade links between India and Japan grew due to common underlying facets, commonly referred to as the three “Ds” – Democracy, Demography and Demand. But a lot more needs to be done in this sphere and hopefully trade will grow further.⁶ For Japan and India, Asia’s second and third largest economies, a trade figure of merely $ 15.8 billion in 2013 is extremely inadequate and both have a lot of ground to cover, considering that Japan is an extremely important FDI investor in India. But in the past couple of years, owing to India’s economic slump and a policy paralysis at the political level, Japanese investments in India tapered off and Japanese firms have invested more in newer emerging markets like Vietnam and Indonesia.⁷

But this will change as there is a complementarity between the economic and security interests of both countries. Modi and Abe, with their respective “Modinomics” and “Abenomics”, are both equally committed to ASEAN. Like Modi, Abe also gives priority to economic issues and the Japanese economy has to show signs of revival if Abe is to succeed politically. This was the reason for the mid term elections that Abe called this month. According to all reports, while Abe has won with a clear majority, there will be pressure on him to deliver on the economic front and ensure that the country comes out of recession. A low GDP growth rate of about 2% and a decline of 0.50 percent in the third quarter of 2014 over the previous quarter is not a very comfortable situation to be in.

To tackle domestic economic challenges, Abe is likely to increase the private consumption tax on rich Japanese tax payers gradually as one of the measures to revive the economy and prove that his policy (Abenomics) is doing well. Hiking the consumption tax is needed to make sure a good and firm social security system can be created and sustained. That is why Japan implemented the first round of the consumption tax of 3 % in July 2014.⁸ Abe’s plan is to raise it once again next year, and take it to 10 percent by 2016 in the hope that the economic environment would be more stable with Japan no longer in a deflationary state. The ratio of job openings to job seekers reached the highest level in two years, and for the first time in 15 years, incomes also went up. But it is still a fragile situation and can spin out of control if the economy does not revive to more reasonable levels.

Another tricky element of Abe’s attempts at introducing structural reforms to lift Japan’s economy out of its “deflationary malaise” is his decision to join the US led Trans Pacific Partnership being negotiated between the United States and eleven other countries in Asia. Abe announced in March 2013 that Japan—which accounted for 14 percent, or $146 billion, of U.S. goods trade with TPP partners in 2012—would seek to participate in the TPP negotiations. This was met with wide spread opposition by various Japanese groups especially the agriculture lobby. The agriculture industry has argued that this vital sector would take a hit from foreign competition due to the removal of tariffs and other protective measures on imports that would be ruinous for the Japanese farmer. Some Japanese health-care providers have also voiced concerns that Japan's national health insurance system would be adversely affected as Japanese citizens would be compelled to buy foreign-produced pharmaceuticals and medical devices.⁹

Despite these domestic apprehensions, Abe is of the opinion that in the long run it would be to Japan’s advantage if it was fully integrated into an Asian multilateral trade facilitation channel. India, too, faces similar predicaments at bilateral and multilateral trade fora like the WTO and efforts by the US to get it to agree to a Bilateral Investment Treaty.

There is plenty that binds the leaders of Asia’s two most prominent democracies together. Besides their common economic objectives and goals, both India and Japan, through greater strategic cooperation, are seeking to evolve an effective yet peaceful strategy to counter an increasingly assertive China in the region. The China factor further incentivizes India and Japan to cooperate in many ways and according to Modi, “write a new chapter” in India-Japan relations, while Abe said that their bilateral ties have the “most potential in the world.” Both leaders have displayed political sagacity and a strategic vision to create a strong partnership and it is in the mutual interest of both countries to build upon this promising start.

Endnotes

1. For details, see http://mea.gov.in/bilateral- documents.htm?dtl/23965/Tokyo_Declaration_for_India__Japan_Special_Strategic_and_Global_Partnership, Tokyo, September 1, 2014. Accessed on 18 December 2014.
2. Available at http://pib.nic.in/newsite/PrintRelease.aspx?relid=109224, accessed on 18 December , 2014.
3. Referred to in the Modi-Abe Joint Statement, see foot note 1.
4. Nyshka Chandran, “There’s More to Modi-Abe Ties than China, September 2, 2014, available at http://www.cnbc.com/id/101961843#. Accessed on 18 December 2014.
5. Brahma Chellaney, “Narendra Modi: India’s Shinzo Abe,” The Diplomat, May 16, 2014. Available at, http://thediplomat.com/2014/05/narendra-modi-indias-shinzo-abe/ . Accessed on December 18, 2014.
6. Based on an interaction with Japanese Delegation from the JIIA, Tokyo, at the VIF, December 8,2014.
7. Michael Schuman, “Why India’s Modi and Japan’s Abe Need Each Other – Badly,” TIME, September 2, 2014.
8. For details, see Backgrounder of the Council on Foreign Relations, available at http://www.cfr.org/japan/abenomics-japanese-economy/p30383. Accessed on 18 December 2014.
9. Ibid.

---

Published Date: 23^rd December 2014, Image source: http://www.hindustantimes.com

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the Vivekananda International Foundation)

India’s ‘Act East’ Policy: A Perspective

Brig Vinod Anand, Senior Fellow, VIF

Dr Rahul Mishra

India’s Look East Policy (LEP) came of age when New Delhi celebrated two decades of engagement by holding the ASEAN-India Commemorative Summit in November 2012. The first phase of LEP lasted for one decade till 2002 when the then Minister for External Affairs Mr Yashwant Sinha announced the commencement of the second phase. While in the first phase, the emphasis was on political, diplomatic and people to people relationships, improved connectivity and enhanced trade, the second phase revolved around strengthening of economic relations, defence and security cooperation besides strengthening relationships in other areas. During the second phase, though the dominant impulse remained the economic engagement, increasingly the LEP also acquired strategic orientation. The LEP focused not only on the ASEAN members but also expanded to include South Korea, Japan, Australia, New Zealand and other countries in the East. Over the two decades, not only has India progressed from a dialogue partner to the present status of a strategic partner in respect of ASEAN but has also established strategic partnerships on bilateral basis with many ASEAN countries and Japan, Australia and South Korea. It can also be said that after 2012, the Indian government continued to work towards what it called the third phase that was termed as an ‘Enhanced LEP’.

In fact, when Modi government took over the reins of power in May this year, it conscientiously continued with the previous government’s policy and the new Minister for External Affairs, Smt Sushma Swaraj termed the new phase as ‘Act East Policy’ which in a sense meant that more substance was to be imparted through early implementation of many elements of the LEP. While the plan to engage ASEAN has been charted out in the ‘Plan of Action to implement the ASEAN-India Partnership for Peace, Progress and Shared Prosperity (2010-2015)’ announced during the Commemorative Summit of 2012, the Modi administration has been in an overdrive to reach out to all the nations in the wider Pacific region.

Prime Minister Modi’s successful visit to Japan, the India visit of Australian Prime Minister Tony Abbott and the visit of China’s President Xi Jinping are seen as high points in the Modi government’s policy towards the wider East Asian region. Japan is also considering joint projects with India in some of the ASEAN countries besides expressing its interest to invest in India’s North East. The level of defence and security cooperation including joint military exercises and co-production and co-development in defence industry is on the cards. India-Japan civil nuclear agreement could not be concluded because of some apprehensions on part of Japan but that aside, the scope of strategic and economic cooperation is expected to follow an upward trajectory.

During the India visit of Australian Prime Minister Tony Abbott, India and Australia signed the much-awaited India Australia Civilian nuclear cooperation agreement that would enable supply of Uranium to India. The successful conclusion of Abbott’s visit is a watershed event in India-Australia relations. Apart from the civilian nuclear deal, Indian companies are also working towards joint energy ventures in Australia. Earlier this month, Modi attended the ASEAN-India and East Asia Summit in Myanmar where he further outlined his plans to revitalise relationships with ASEAN and East Asian countries in both economic and security fields. From Nay Pyi Taw, Modi travelled to Australia for the G-20 Summit where he held bilateral meetings with Prime Minister Abbot to build on the evolving strategic relationship with Australia. In order to expand India’s footprint in Pacific, he visited Fiji after attending the G 20 meet.

Clearly, within a short period of six months or so, the Narendra Modi government has taken steps to give a boost to the Look East Policy, or what has been termed as the ‘Act East Policy’. In that regard, the statement made by the External Affairs Minister Sushma Swaraj is worth noting. During her visit to Vietnam on 26 August, 2014, she addressed the Indian Heads of Missions and said that India has to not just ‘Look East’ but ‘Act East’. Her visit to Vietnam was the third visit to a Southeast Asian country since she became the Minister for External Affairs in the Modi Cabinet.

President Pranab Mukherjee has also visited Vietnam and signed a number of agreements that include allotment of seven oil blocks for exploration, enhanced defence and security cooperation, increased economic and people to people exchanges besides regional and multilateral cooperation. While Vietnam supported India’s LEP and its increasingly important role in regional and global forums, they also expressed the resolve to ‘foster the implementation of signed agreements’ and observed that cooperation in national defence was an important pillar in their strategic partnership. President Mukherjee also supported the freedom of navigation through high sea, peaceful resolution of disputes based on international law including the 1982 UNCLOS and adherence to the Declaration on the Conduct of Parties in the East Sea towards the adoption of the Code of Conduct of Parties.

It has been stated many times by the Indian strategists that Myanmar is the lynchpin of India’s LEP and is a gateway or a strategic land bridge to the ASEAN. Myanmar is the current Chair of the ASEAN, hosting several meetings of ASEAN during the year. In that regard, Sushma Swaraj was on a four-day visit to Myanmar to participate in the Fourth East Asia Summit (EAS) Foreign Ministers’ meeting, 21st ASEAN Regional Forum (ARF) retreat session and India-ASEAN foreign Ministers Summit. During her visit, she had extensive discussions with Myanmar’s President U Thein Sein, Minister of Foreign Affairs of Myanmar and Pyithu Hluttaw (House of Representatives), Thura U. Shwe on how to further strengthen ties between India and Myanmar.

India has been pushing for greater regional integration of Indian economy with that of the ASEAN by expanding the scope of trade and investment. The main focus of 4th EAS Foreign Ministers’ meeting was on strengthening cooperation in the areas of energy, education, disaster management and enhancing connectivity. Sushma Swaraj reiterated India’s position that India “would soon draft a five-year action plan starting 2016 for enhancing connectivity and cooperation in diverse areas”. The agenda of the 21^st Asean Regional Forum retreat session largely revolved around the security issues. Ways of combating terrorism and other non-traditional security threat relating to the South China Sea figured prominently in the meeting.

Regarding the South China Sea dispute, India continued to follow its traditional stance of pushing for a peaceful resolution of the maritime dispute between China and the ASEAN member states and that “no such issue should be resolved through conflict and war” but through peaceful dialogue”. Swaraj remarked, “Recent disputes in the South China Sea underscore the need to resolve sovereignty issues peacefully by the countries concerned in accordance with international law”. Notably, major claimants in the dispute such as Vietnam and the Philippines consider India a benign balancer in the region. Therefore, India is widely envisaged as a key power and one of the major stakeholders in the emerging East Asian security dynamics.

The Modi government has been emphasising on giving urgent attention to the speedy completion of trilateral highway that will connect India-Myanmar-Thailand to facilitate people-to-people contact between India and Myanmar and improve trade and investment opportunities. Prospects for a direct flight from Delhi-Bodhgaya-Yangon are likely to be materialise given the earnestness of Modi administration. Moreover, friendly relations with Myanmar are crucial for peace and development of India’s north-eastern states. Given that it was the first ever visit to Myanmar by any Indian Minister of the new government, Myanmar was given assurance that the new government is willing to strengthen relations with it and thereby, ready to boost trade and investment.

India is aware of the changing dynamics of the East Asian regions. The security architecture of the region is rapidly changing. Rising China and Japan, and the consistently increasing competition between them has taken new dimensions. India has realised the problems as well as the prospects of the changing regional dynamics. In that context, India’s greater role and participation in the security architecture of the region as also the ways and means to enhance India’s presence in the Southeast Asian region are of immense importance, not just to India but to the countries of the East Asian region also. These are important components of the Act East policy as without robust trade, economic investment and physical connectivity, India will not be able to achieve its goals.

Energy security is an important component of the Act East Policy of the Modi government, which has been manifested in the recent MoUs that India has signed with partner countries. New Delhi and Hanoi have moved forward in energy cooperation despite some objections by China. Vietnam has already renewed India’s lease of two oil blocks in the South China Sea for another year. Vietnam is keen to procure the Brahmos missiles, which are jointly produced by India and Russia. Vietnam is also exploring the possibility regarding procurement of naval weaponry. India has agreed to supply four off shore naval patrol vessels to Vietnam and Modi has announced that India will “quickly operationalise the $100 million Line of Credit that will enable Vietnam to acquire new naval vessels from India."

Likewise, India is also working towards greater military cooperation with Japan and Australia. India and Australia will hold their first-ever bilateral military exercise in January 2015.

India-ASEAN FTA in Services

After several rounds of negotiations, India and the 10-member countries of Association of Southeast Asian Nations (ASEAN) signed the Free Trade Agreement (FTA) in services and investments on 8 September, 2014. The final agreement was signed two years after the conclusion of detailed negotiations on the pact. In 2010, India and the 10- ASEAN member countries signed the Free Trade Agreement in goods. However, at that time, the services agreement could not get signed taking into account the sensitivities of a few ASEAN member countries. The realisation of the FTA in services is expected to give the much needed impetus to India’s trade and investment relations with the member countries of ASEAN. In fact, the former Prime Minister Manmohan Singh led United Progressive Alliance government II was criticised for signing an incomplete FTA (FTA in goods only), which was destined to lose out to ASEAN in terms of benefits. As a result, in the past few years, India’s exports remained insignificant, while imports from ASEAN countries increased.

The Indian government as well as the private sector have been ready for the agreement but the ASEAN members couldn’t expedite the pact. Countries such as Indonesia, the Philippines and Thailand took several months to set things right domestically. It is worth noting that the Philippines is yet to ratify the agreement in its parliament. The other nine countries that have ratified the agreement include: Brunei, Cambodia, Indonesia, Laos, the Philippines, Myanmar, Singapore, Thailand and Vietnam. The primary reason for the Filipino apprehension is that it fears that the Indian services sector might sweep the Philippine market and dominate the ASEAN services industry. However, as the FTA in services is implemented, India’s share in total trade would also rise as India is a leader in the services sector, making India-ASEAN FTA a ‘win-win situation’ for all.

It is hoped that with India-ASEAN FTA in services and investments, greater flow of trade and investment and freer movement of professionals will be realised, paving the way for India’s comprehensive regional economic integration with the 10 ASEAN member countries. The good news for India is the inclusion of a brief annexure on movement of natural persons or workforce. The annexure defines business visitors, contractual service suppliers and intra - corporate transferees, issues that are critically important for India. In addition to that, other major issues such as domestic regulations, recognition, market access, national treatment, transparency, participation of developing countries, joint committee on services, review, dispute settlement and denial of benefits etc. are also included in the agreement.

With the completion of India-ASEAN FTA, the road to the Regional Comprehensive Economic Partnership (RCEP) seems clearer. RCEP includes the 10 ASEAN member countries and its six partners including India, China, Japan, South Korea, Australia and New Zealand. ASEAN aims to make RCEP a reality by 2015, which was first mooted during the 2011 ASEAN Summit in Indonesia, and formally launched during the 2012 ASEAN Summit in Cambodia. With the realisation of RCEP, India is likely to gain preferential market access to 15 countries and gain more from price competitiveness.

To benefit most from the India-ASEAN Free Trade Agreement, India needs to keep going on the economic reform path. In that regard, steps to strengthen its medium, small and micro enterprises (MSME) sector are critically important which can help it not only sustain the free flow of trade, but also to become a more competitive player.

Conclusion

The last three years or so have witnessed a growing apprehension about the rising capabilities of an ascendant China and its propensity to assert its claims in South China and East China Sea. The countries in the region are also afflicted with difficult choices to be made between their economic objectives where China is of help and their strategic objectives of safeguarding their national and sovereign interests where some of the nations in the region feel challenged. On the other hand, India is seen as a power which does not threaten or challenge their national interests and can in some away lessen their apprehensions. Against this backdrop, ASEAN states are seeking a moderating role in the region given that New Delhi is seen as a benign power as opposed to China, the US or even Japan. While India may not have the political or the economic clout of ASEAN’s other envisaged partners, it is anticipated that with rising trajectory, India will become a pole of influence in the future. However, China’s influence is considerable and is likely to be so for the coming years. India’s LEP (and now Act East) has been in place now for over two decades and precedes the American pivot to Asia and therefore it stands on its own merit. Modi administration is only building up on what was bequeathed by the previous government but with much more vigour. The strategic dynamics in the region are very complex and still evolving and the LEP is only one element of the vast strategic canvas on which major powers have put forward their own policies like the American rebalance, or Japan’s Security Diamond concept or for that matter China’s New Maritime Silk Route strategy. It is to be hoped that the new policies contribute towards stability and prosperity in the region rather than instability and insecurity.

(Dr. Rahul Mishra, Research Analyst, ICWA)

---

Published in Vivek: Issues & Options, September - October 2014

BCIM Economic Corridor: Prospects and Issues

Brig (Retd) Vinod Anand, 

Senior Fellow, VIF

Introduction

One of the cornerstones of India’s strategy has been to develop India economically and technologically. Another facet of India’s policy has been to seek partnerships on the strategic, economic and technological fronts to widen its policy and development options in order to safeguard its interests. The strategy adopted to meet these policy objectives is to restore our traditional links and integrate India with its immediate and extended neighborhood besides responding positively to the imperatives of globalization. This translates into an Indian vision of being well connected to Afghanistan, Iran and Central Asian Region and beyond on the western flank and to Bangladesh, Myanmar, Thailand and beyond on the eastern flank through a network of multi-modal transport corridors.

These networks would facilitate trade, exchange of energy through oil and gas pipelines, promotion of tourism and increase of communication links leading to what can be termed as a zone of co-prosperity. Towards this end, a number of regional and sub regional initiatives have been undertaken by India to improve connectivity, promote economic and technical cooperation, enhance people to people relations and usher in peace and prosperity.

Therefore, India is involved in a number of regional and sub-regional initiatives and frameworks. BCIM (Bangladesh, China, India and Myanmar) framework is one such initiative which has recently been given a push both by India and China.

However, there are also other groupings like Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) which is one such initiative for sub regional integration. Further, India also has a Trilateral Dialogue with Myanmar and Thailand addressing the same issues. There is also a Ganga –Mekong Initiative to link countries of Mekong Basin (Myanmar, Thailand, Cambodia, Laos and Vietnam) with India. All these are in addition to the major regional organisation in South East Asia i.e. ASEAN.

Similarly, China has also been involved in a number of regional groupings i.e Greater Mekong Sub-region initiative that was founded in Yunnan in 1992.

Even though there is an overlap in goals and objectives of a number of regional and sub regional groupings, there is a need to critically analyze whether multitude of such cooperative efforts are beneficial or otherwise.

BCIM Evolution

So far as the BCIM forum is concerned, it has been in works for over a decade now (since 1999). In fact, it was a Track II platform, known earlier as Kunming Initiative, which was formed for sub-regional cooperation revolving around trade, commerce and connectivity.

It was considered as a provincial initiative and did not have much resonance among at least the policy makers and the MEA officials. Some of the earlier meetings that were attended, for instance, by India’s Secretary (East), Mr. Rajiv Sikri in 2006 questioned its utility when several other similar initiatives existed in the region. On the other hand, later in 2011, a Kolkata-Kunming car Rally that was expected to encourage the concept of BCIM found official mention in the Joint Statement between China and India.

However, it was only last year that the BCIM grouping gained some traction when it was first mentioned in the Joint India-China communiqué during PM Li’s visit to India in May 2013 and it was again discussed between the two during PM Manmohan Singh’s visit to Beijing in October 2013. Thus, it became a Track I initiative with the prospects of the objectives of BCIM being realized.

As a follow up of Heads of State meetings, a Joint Study Group (JSG) of BCIM to chart out the modalities for achieving the goals of BCIM economic corridor was set up and it held its first meeting at Kunming in December, 2013. JSG has outlined a number of steps to be taken to convert the concept into a reality. A Joint Working Group was also proposed to be established for improving the working mechanism. The Final Report is expected to be submitted by end September and by end December 2014, it is expected to be adopted and signed for inter-governmental cooperation. Cooperative areas between the four members would include:-

(a) Physical Connectivity

(b) Trade in goods, services and investment including finance

(c) Environmentally sustainable development

(d) People to people contacts

Assessment

However, the question remains as to whether this sub regional grouping would make some headway in the coming years and what are Indian perceptions on the issue. What are its future prospects?

Even while the top leadership has come to an understanding that BCIM has plenty of potential and it needs to be encouraged, there are several difficulties and problems in imparting a degree of substance to achieving the objectives of the forum.

Security environment is one major negative factor inhibiting the successful realization of the forum.

For instance, in February, the influential English language Chinese daily, Global Times commenting on the BCIM Economic Corridor pointed out that even though it has been put on fast track, the border areas are characterized by poverty, ethnic division and collision and rampant transnational crimes. It talks about difficulties of security and development taking place simultaneously. (Construction of rail and road networks, logistics centres, industrial parks and development of scenic areas etc). ‘Thorny security challenges have to be resolved- ethnic conflicts, drug & human trafficking along Sino-Myanmar borders’. This situation is present on all the borders shared by the four countries. Security first or development first or both simultaneously is not an easy question to be answered.

Conflicts between the armed ethnic groups and Myanmar have negative impact on creating conducive climate for investment and development. Sino-Myanmar border has a number of ethnic conflicts and issues which are well known. Transnational crime gangs in the Golden Triangle create many obstacles for bringing peace and stability and law and order in the area.

Similarly, on the Indo-Myanmar border, there are ethnic people who reside on both sides of the borders and some elements continue to remain hostile to either India or Myanmar or both. While Indian and Myanmar security forces have coordinated their patrolling and operations against such groups, peace and stability continues to be at risk in these areas.

Sino-Indian tensions along the border are well known and despite the fact that a new Border Development Cooperation Agreement has been signed, the incursions and misperceptions along the borders continue to take place.

Bangladesh and Myanmar borders have with the problem of Rohingyas crossing over to Bangladesh and the Myanmar government refusing to grant them citizenship rights. Thus, conditions for trade and commerce are not conducive.

The prevailing security situation thwarts the successful outcome of BCIM forum and work against building trust and mutual confidence. China and India, both major countries in the group, could take the initiative to improve mutual trust and confidence between the members of this forum.

Indian Approach

Even though India has agreed in principle for a BCIM Economic Corridor, it also has some apprehensions.

Firstly, there are still several insurgent and rebel groups in North East India which are involved in a host of anti national activities like gun running, drug trafficking; they are also being used by foreign intelligence agencies (e.g. Anthony Shimray incident where Chinese intelligence agencies were alleged to have been involved in fuelling insurgency by sending a huge consignment of Chinese arms to NSCN(IM) in the NE; there have also been reports of some Chinese intelligence agents being active there; ISI has also been involved in sending arms).

Secondly, Sino-Indian border problems are well known and therefore Indian sensitivities concerning the claims and possible insecurities on that account. Tirap district of Arunachal Pradesh is inhabited by Nagas and there is an insurgent activity there. Even though some funds for constructing Ledo/Stilwell Road have been earmarked, India is not in favour of reviving the old Burma/Stillwell Road linking India’s NE to Yunnan through Myanmar because of security reasons. This is despite the fact that enormous commercial benefits (especially with reduction of transportation costs) might accrue. There are apprehensions that this might give China advantage in case of a military conflict.

Thirdly, while there is a dire need to develop the North eastern states of India and China can provide the wherewithal for infrastructure development including the much needed funds, the Indian government remains reticent in involving China in ways that might be detrimental to Indian interests.

Further, during the visit of Japanese PM Shinzo Abe in January 2014, Japan has been invited to take part in the infrastructure development of NE States.

Fourthly, there is a growing trade imbalance between India and China and any free flow of trade and commerce through the envisioned economic corridor would only increase the trade imbalance against India as China has not been able to practically address India’s grievances on this issue in any meaningful way despite remonstrations by India to this effect during summits and other bilateral exchanges.

Additionally, India has several bilateral and multilateral initiatives with the regional countries to address precisely the same issues. For instance, India has Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation (BIMSTEC), Mekong Ganga Cooperation initiative and Trilateral between India, Myanmar and Thailand for improving connectivity; all such initiatives involve either cooperation with Bangladesh or Myanmar or both that have similar objectives to that of BICM.

There is an overlap in goals and objectives of a number of regional and sub regional groupings that remain an important sub set of India’s ‘Look East Policy’ set in motion in the mid 1990s. That is why India had not been very keen to add another sub-regional grouping to its kitty where, possibly, the central role of India in some of these platforms could be undermined. There have also been talks of merging or combining of BCIM and BIMSTEC but regional geo-political environment does not appear to be conducive for acceptance of such proposals.

Conclusion

Though, in the recent conversation between Prime Minister Narendra Modi and Premier Li Keqiang on 29^th May, the Chinese leader pushed for realization of BCIM yet it would not be easy to realize the objectives of BCIM Economic corridor or a Southern Silk Road in the short term to mid-term period. While it may be possible to address the security challenges along the borders and there are some signs of improvement along Indo-Myanmar and Indo-Bangladesh borders yet, for some progress to be made, there has to be a fundamental change in the nature of Sino-Indian relationship.

However, the way forward could be to start small joint projects in secure areas along the envisaged economic corridor which benefit the local population and which are not based purely on profit motive. Such joint projects could be initiated in Myanmar and Bangladesh by combined efforts of India and China. This would contribute to confidence building and possibly the goals of BCIM could be realized to some extent in the mid-term period.

Otherwise, except for hosting some Kolkata to Kunming car rallies and some other peripheral activities, it would be difficult to exploit the full potential of the grouping.

Substantive issues of BCIM would only receive attention when the geo-politics between both nations move towards a positive resonance. While specific programmes of BCIM Corridor may be discussed as part of keeping some positive atmospherics alive because of the confabulations at the top level yet implementation of the programmes would take their own time.

(The following is an updated version of the presentation made at Institute of South East Asia Studies during an international conference held at Yunnan University, Kunming, PRC).

---

Published Date: 2^nd June 2014, Image source: http://voiceof.india.com

India’s North East Needs a Vision Printer-friendly version

K G Suresh, 

Senior Fellow & Editor, VIF

Background

At the recently concluded World Book Fair in Delhi, the National Book Trust (NBT) organized a ‘North East Quiz’ among the school children visiting the annual exhibition. According to Mr Nirmal Kanti Bhattacharjee, former Director of NBT, none could qualify and win the four books on Arunachal Pradesh which were kept as prizes.

The students from the so-called mainland just did not have any idea about the North East. They were confused about the state capitals of the eight sister states and were unaware of many aspects of the sensitive states bordering China, Bangladesh and Myanmar.

The episode came close on the heels of the brutal and fatal attack on Nido Tania, a young boy from Arunachal Pradesh, by a mob in a busy New Delhi market on January 29.

Unfortunately, instead of applying a soothing balm on the sentiments of thousands of North Eastern students based in the capital, the civil society and the media outdid each other in projecting the assault as one related to racism without realizing which races they were talking about.

In the 60s and 70s, in Delhi and other parts of northern India, any person coming from South of the Vindhyas was called a ‘Madrasi’,. But people from Andhra, Karnataka and Tamil Nadu detested this description which they felt, and justifiably so, was derogatory as they had their own distinct culture and language. How would a Punjabi feel if he is called a Bihari, they would ask. With the passage of time, increased interaction between the north and south and the south’s growing clout in sectors ranging from politics and economy to entertainment and education, the equations have changed considerably. Bengaluru has become the hub for IT professionals from across the country while Manipal attracts students.

It is true that even 66 years after independence, people from the North East, continue to be clubbed together and singled out and that too for their facial features. Often, they are mistaken to be Chinese, Nepalese or from South East Asia and referred to even by the educated as ‘Chinkies’ not only because of their Mongoloid features but the apparent cultural differences such as attire and language. Forced to migrate from their idyllic but underdeveloped states for even basic education and job opportunities, these people, mostly women and youngsters, are not only discriminated against but also have often been victims of eve teasing, molestation and rape. What’s more, they also find themselves at the receiving end of the utterly insensitive law enforcement agencies because of communication problems.

However, in the case of Nido, neither the assailants nor the victim were aware of their own respective races. There was no conflict of interests. Even in North Eastern states, people from the ‘mainland’ are often termed as ‘Indians’ or ‘outsiders’ by many locals and are held responsible for the problems in their respective states. There have been several instances when Hindi speaking people have been attacked and killed brutally by North Eastern insurgents. Yet, there has been no retaliatory attacks.

Moreover, racial attacks, as in the West necessarily involves two races – of the culprit and of the victim. Ku Klux Klan, Dot Busters and the recent attackers on Indians in Australia, Sikhs in the United States etc are motivated by racial superiority and a growing insecurity that the ‘other races’ are usurping their rights in their own country, which is not the case here.

People with Mongoloid features including from Uttarakhand and Himachal Pradesh have never been discriminated against in the past as they had been part and parcel of the North Indian mileu for long. As against this, the people from the North East are comparatively new migrants and are yet to become familiar to people from other parts of the country.

Hence, it would be unfair to treat such attacks as racial, as is sought to be projected by many including some sections of the media. As an observer aptly put it, it may be facial but certainly not racial. It is lack of awareness about the North East and the people there which has led to such incidents.

Nevertheless, the problems confronting the sensitive North East are far more deep rooted than a law and order incident in Delhi. The sense of alienation in the region cannot be traced to some stray incident in Delhi or other metros but to the exclusion of the region from the national consciousness and developmental priorities.

The North Eastern states require an altogether different model of development keeping in view its multifarious problems including infrastructure, agriculture, industry, ethnic divergence and socio-cultural and economic dimensions.

Developmental Issues

During a recent visit to Arunachal Pradesh, one found that even the major roads in the state capital Itanagar were worse off than roads in some far flung districts of Uttar Pradesh or Madhya Pradesh. There were roads in holes rather than the other way round.

One was shocked to learn that there is not a single direct flight from either Delhi or any other nearby airport to this sensitive border state, which in its entirety is being claimed by neighbouring China. The only way to reach Itanagar is either by a weather dependent chopper service provided by Pawan Hans or by an eight hour long drive from Guwahati. Even to reach key strategic locations in the state such as Bomdila and Tawang, one has to take a detour via Tezpur in Assam.

Work on some railway project is on but it appears to be a tardy and tedious exercise. There cannot be anything more ironic in the backdrop of all tall talks about building infrastructure to match the Chinese and what not.

Corruption and maladministration have become hallmarks of governance in most of the states. For the record, successive Central Governments have pumped in crores of rupees for the development of the region and the state level leaders are often blamed for misappropriation of funds but interactions with state bureaucrats reveal how Central Government officials take their ‘cuts’ even for release of funds and during monitoring of projects. Funds allocated for many schemes get lapsed as the state is unable to garner resources to contribute its mandated contribution.

Many a scheme has guidelines which require certain number of people in villages to obtain the funds. With a small population, far lesser in density compared to many other states, most villages in Arunachal are unable to avail of the funds. But the mandarins in Delhi have neither the time nor the inclination to spare a thought for them.

In the land of the rising sun, it is totally dark by 5 pm, when people are still working in offices in the mainland. Yet, they have to follow the Indian Standard Time. Why is it that India can’t have different time zones suitable for specific regions of the country? Why is it that we are called foreigners by other Indians when we are ready to die for the country?, asks Nikam, an engineer by education and a social worker by choice.

There cannot be anything more unfortunate that such an approach is being adopted towards the people of a state, which is claimed by China as part of ‘South Tibet’ and whose youth have never taken even to the streets, forget taking up arms, unlike their counterparts in other north eastern states. In fact, with scores of tribes inhabiting the state, Hindi has emerged as the lingua franca of the people who still greet each other with the ‘Jai Hind’ slogan. Can there be a greater bulwark against Chinese expansionism? Can the Indian Army get a more supportive local populace in the event of any Chinese aggression?

Yet, mainland India has always ignored the North East contributing to a sense of alienation among these people, which has resulted in the growth of separatists and anti-national forces, aided and abetted by anti-India forces within and outside the country including some neighbouring countries. Large scale illegal migration from Bangladesh has not only led to demographic changes in some states but also added to socio-religious tensions as is evident from growing number of clashes between the local tribes and illegal migrants.

NGOs and religious groups are also adding to the problem by fishing in troubled waters by whipping up local sentiments and building up an environment against mainland India. In the absence of a vibrant local media and the national media ignoring the developments in the North East, the well oiled separatist propaganda machinery is successfully able to project the Armed forces as the worst human rights violators and put the blame on the doors of the Central Government for all the ills pervading the region, most of which are contrary to facts and the ground realities.

The vast hydropower, thorium and other natural resources as also tourism potential are not even being partially harnessed for the development of the region and the country as a whole.

Connectivity is another major issue causing immense hardship the economy of the region, which is totally dependent on the rest of the country for even its basic requirements. No worthwhile effort has been made in all these decades to improve rail, air and road connectivity and to make these far flung states self-sufficient in at least some respects.

Despite their sharing boundaries with China and other countries, no meaningful initiative has been taken so far to develop the infrastructure in these sensitive states. With countries such as China making massive investments in its territory and even making territorial claims on some of our areas, the threat assumes greater significance but the same are not being addressed adequately.

Further, notwithstanding its proximity to the South East Asian nations in terms of geography and ethnicity, no serious effort has been made to tap the region’s potential to emerge as a great trading hub in consonance with India’s ‘Look East Policy’.

Lack of Awareness

While sociologists, politicians and commentators have been attributing the sense of alienation in the region to factors including insensitivity and conservatism of the North to lack of infrastructure and employment opportunities as also massive corruption in the North East resulting in migration, the fact remains that the wide communication gap between the peoples of the region and the rest of India and ignorance about each other have significantly contributed to this crisis.

For instance, very few in the country have heard about U Kiang Nanbah, the legendary freedom fighter from Meghalaya, who was hanged by the British over 150 years back, thanks to a policy of sheer indifference successive Central Governments have adopted towards the history and culture of the people of the North-East,

The ignorance about other north eastern heroes and freedom fighters such as Lachit Borphukan, Rani ma Gaidinliu, Shaheed Kanaklata Barua, Bir Tikendrajit, to name a few, in the rest of India is a reflection on the Government’s education policy, which has totally neglected the history of the North-East. Forget Nanbah, most history textbooks prescribed by the Central Board of Secondary Education do not have any reference to the history, culture or traditions of the region. It seems as if their history begins with the British annexation of their territories.

Role of Media

The role of the otherwise vibrant and inclusive Indian mainstream media too has been found wanting when it comes to the North East.

Ahead of the recent Assembly elections, television viewers across the country were bombarded day in and day out with opinion polls, surveys et al predicting the outcome of the elections in the four crucial states of Madhya Pradesh, Rajasthan, Chhattisgarh and Delhi.

Though elections were also held in the state of Mizoram as well, not many seem to be interested in it as it is in the remote north east and has least significance in terms of numbers which can determine Government formation at the Centre post the 2014 elections. (It is a refreshing change that the BJP’s Prime Ministerial candidate has twice toured the state already in the run up to the polls though the party does not have much stakes in the region and as a consequence his meetings have attracted media attention.)

Why is it that our issues are not raised in the national media and discussed by the intelligentsia in Delhi is a common refrain in the north eastern states? Are we the children of a lesser God, they ask. Unfortunately, most of the North Eastern states, except for Assam to some extent, don’t even have a vibrant local media to highlight their problems.

The indifference of the national media towards elections in the north eastern state is not only indicative of the physical distance but also the psychological distance between the so-called mainstream and the North East.

Need for Concrete Steps

Successive Central Governments have looked at increased sops, freebies and funding as the only solution for the manifold problems facing the North East whereas the situation demands a holistic multi-pronged approach based on an understanding of the ground situation, the history, geography, socio-economic conditions et al. However, with the North East having little significance in terms of influencing politics at the Centre, the region has been left at the mercy of the mandarins/bureaucrats.

Among other things, the next Government at the Centre may also ponder over the following suggestions:

1. Creation of a North East Finance and Development Corporation for providing loans and grants to students and entrepreneurs for generation of education and employment opportunities.
2. Setting up a Task Force to facilitate the rise of the North East as an energy hub.
3. Relaxation in inner line permit, wherever possible.
4. Incentives including tax holidays for infrastructure and tourism development
5. Further delimitation of Parliamentary constituencies for enhanced representation in Lok Sabha and Rajya Sabha.
6. Setting up of special cell in the Ministry of External Affairs to coordinate with commerce and other related ministries to work out increased cooperation with South East Asian countries through the North East.
7. Enhanced recruitment of personnel from the North East in CPMFs and police forces of major metros. An inclusive police force can not only instill a sense of security among all denizens but also inculcate better sensitization and acceptance of diversity within police forces.
8. People with Mongoloid looks to feature prominently in social advertising so as to enable people from other regions to identify people from the region as Indians.
9. Recruitment of people from North East faces in Central Government/All India services to increase their visibility across the country.
10. Enhanced quota in educational institutions for students from North East.

While short term measures such as stringent action against culprits involved in violence against North East students and sensitization of police have to be taken up on a priority basis, it is important that in the long term, the Union Human Resources Development Ministry takes steps to revisit our history and other school text books to ensure that they reflect the cultural, religious, ethnic and linguistic diversity of the nation. This would ensure that the children grow up learning about each other and appreciating each other’s distinct identity. For example, the conservative North and South must know that women in the North East comparatively enjoy much more freedom and it reflects in their interactions with the opposite gender as well. Their morals should not be judged by their attire.

Citizens’ Initiatives

Not that have there not been efforts to build bridges of understanding between the North-East and the other parts of the country, but the attempts that have been made are few and far between. Few Gandhians, some Hindi activists, initiatives such as Ekal Vidyalaya, Vanvasi Kalyan Ashram, Ramakrishna Mission, Global Foundation for Civilizational Harmony (India), My Home India have been contributing their bit in this direction.

Thanks to institutions such as Vivekananda Kendra, which run a network of about three dozen schools across states such as Arunachal Pradesh and inculcates patriotism and other traditional and cultural values among the students, the youth in Arunachal are not only literate but also nationalists to the core.

But there should be more civil society initiatives to bridge the ever widening chasm between the North East and the rest of the country. Our ‘friends’ on both sides of the border are always on the lookout for opportunities to fish in troubled waters.

Bollywood and television serial producers too can help in removing such stereotype images. After all, Danny Denzongpa, R D Burman, S D Burman, Bhupen Hazarika and among Gen Next Ria and Raima Sen nee Deb Barman (their father is from Tripura) have made immense contribution to the tinsel town since good old days.

On their part, the people from the North East would also do well not to remain isolated and ghettoized in their own small ethnic and provincial cocoons in large cities. They should shed any persecution complex and avoid labeling each and every law and order incident involving any one of them as an instance of racial discrimination. It has been proved time and against that cities like Delhi are unsafe for women from all regions and police are not friendly even towards the locals, unless they are rich or well-connected.

Conclusion

The need of the hour is a holistic approach to the manifold problems confronted by the North East rather than aggravating the sense of alienation by highlighting the alleged racial discrimination. The North East issue is inextricably linked to development of the region. Hence, a multi-pronged strategy has to be drawn up for the purpose. The North East needs a vision to be implemented in mission mode.

In the days to come, policies and programmes have to be taken up on war footing which would make North East India a Gateway to South East Asia, a leading global tourism destination and the country’s power house.

Political empowerment of the region, enhanced infrastructural development, improved connectivity with the rest of the country and increased awareness about the region through requisite changes in the curricula are among the priority area that beg urgent attention so that a peaceful and progressive North East emerges as India’s vanguard in the not too distant a future. The media too must play a constructive role towards this end.

India-Vietnam Strategic Relationship: Need to Impart Momentum

Brig (retd) Rahul Bhonsle

While historians trace the roots of India-Vietnam relations to the 2^nd Century AD, modern day association commenced four decades ago in 1972. There has been an upward trajectory of engagement in all spheres thereafter be it political, economic, trade or defence and security. This is reflected in the increasing congruence of views in multilateral forums such as ASEAN, East Asia Summit, Mekong Ganga Cooperation, Asia Europe Meeting (ASEM) besides UN and WTO where the two nations are speaking in one voice.

In recent years, both countries have recognized the importance of strategic engagement against the backdrop of evolving geo-political architecture in the Indo-Pacific Region (IPR). This is dictated by China’s emergence as the largest economy in Asia supplanted by increasing aggressiveness in asserting self dictated, “core interests.” These include territorial claims across land and maritime frontiers which has resulted in clashes with neighbours as India and Vietnam. Seen against the history of wars between China and India as well as Vietnam, the alliance between the latter may seem natural. Yet such partnerships take time to fructify and have to be nurtured with patience indicating the necessity for continued investment in expanding the many tracks of India-Vietnam relations. A brief overview of India Vietnam relations with prospects for the future is undertaken as per succeeding paragraphs to include the strategic geography,

The Strategic Geography of Relations

In the emerging polycentric world, strategic geography rather than physical proximity dictates bilateral and multilateral engagement. Strategic geography essentially comprises of two factors - core interests and values. India and Vietnam have a perfectly balanced strategic geography with compatible core interests related to national sovereignty, integrity and inclusive growth of its people. The core value of autonomy creates the necessary glue for a strong partnership.

This is reflected in the legacy of India -Vietnam relations through the years. India has supported aspirations of the Vietnamese people be it for independence from France in the 1950’s or against American intervention in the 1960’s. This support was given despite Vietnam having aligned with Maoist China in the 1962 conflict with India. Delhi has recognized the significance of Hanoi as a bulwark of resistance to domination of great powers in the region. The 1979 war with China was a reminder of the resolve of the Vietnamese people to withstand threats to sovereignty and integrity of their homeland. For an India which had been chastened during the War of 1962 with China, this was an example of how perceived weakness could be turned to military advantage by exposing weaknesses of the adversary. The myth that the Chinaman was ten feet tall was broken by the Vietnamese. Vietnam’s military credentials have thus added to its significance as a military partner.

The strategic convergence between India and Vietnam can be envisaged in the Kautilyan paradigm of a natural alliance with the neighbor’s “neighbor”. Today this union is reflected in many spheres. Politically India and Vietnam have been cooperating extensively. Moreover, Hanoi has convinced New Delhi of the need to play a greater role in the region over a period. India is thus seen as a balancer in the Western Pacific in the future with a footprint offshore in the Vietnamese littoral in the form of exploration by ONGC Videsh Limited (OVL). The aim is to subtly support rights of a strategic partner while also expanding own energy and economic interests. India also understands the limits of such an engagement and thus soft pedals the same rather than aggressively proclaiming intent to play a dominating role in somewhat hostile waters.

Vietnam also has a major role to play in India’s Look East Policy (LEP) which has now fructified with recognition of New Delhi as a strategic partner in ASEAN and increasingly important role that India is playing in East Asia Summit (EAS). Of the six priority areas of regional cooperation within the framework of the EAS – energy and environment, finance, education, natural disaster management, pandemics and connectivity, India and Vietnam have established a framework for engagement in each one.

One of the most important tracks is maritime security. India’s Prime Minister, Dr. Manmohan Singh highlighted the same at the 8th EAS in Brunei Darussalam when he stated, “A stable maritime environment is essential to realize our collective regional aspirations. We should reaffirm the principles of maritime security, including the rights of passage and unimpeded commerce, in accordance with international law, and peaceful settlement of maritime disputes”.

Vietnam plays an important role in this framework not because it is a party to a dispute with China but will remain the fulcrum of a solution wherein implementation of the collective commitment to abide and implement the 2002 Declaration on the Conduct of Parties in the South China Sea will be dictated by the commitment of important littoral states such as Hanoi. Adoption of a Code of Conduct in the South China Sea on the basis of consensus will have a major impact on Vietnam. It is natural that Hanoi is looking for support from New Delhi in this sphere while India is committed to stand by the rights of freedom of the seas for global trade and commerce.

India has at no time sought to intervene in the ongoing differences in the South China Sea between China and Vietnam. The statement by India’s Vice President Mr Hamid Ansari, a well respected former envoy is relevant. On a question whether China has raised objections to India’s oil and gas exploration, Mr Ansari stated, “Not as far as our oil exploration is concerned. There is an ongoing problem between the People’s Republic of China and the Socialist Republic of Vietnam about the sea boundary. That is something on which the whole world is concerned because it will have impact on the movement of shipping lanes, trade, everything”. Mr Ansari, however, highlighted India’s commitment to freedom of the seas and international waters thus, “Our view on that has always been that it has to be settled within the framework of existing international norms, has to be settled peacefully through negotiations.” This balanced approach has found many takers in South East Asia and is reflected in the eagerness for partnering India where Vietnam has established the lead.

Protection of India’s trade and commerce has also dictated increased interaction with Vietnam. India’s forays in the Asia Pacific region what some as the Japanese Prime Minister has called as the Indo Pacific are now well established. India already has a dominating position in the Indian Ocean Region with the peninsula flanked by the island territories of Lakshadweep in the west and Andaman and Nicobar in the East providing maritime dominance. Vietnam provides the springboard for operating in the Western Pacific.

Some have likened these recent developments as India’s own Asia Pacific rebalancing on cue from the United States though New Delhi has been committed to the region for over two decades now under the Look East Policy (LEP) framework. This includes an overall strategic architecture of bilateral and multilateral engagements in the region that India is building over the years which includes the main regional players China and Japan, the resident power United States of America and regional pivots as Vietnam, Indonesia and Australia. Of these, India -Vietnam relations remain the strongest with highest common interests and thus need to be nurtured over a period.

The mechanisms to build the strategic geography which have been created over a period include a Joint Commission Meeting at the Foreign Ministers' level and Foreign Office Consultations and Strategic Dialogue at Secretary-level which provide the larger framework for bilateral cooperation in various areas. There is an annual Defence Dialogue at Defence Secretary Level and a Joint Committee on Science and Technology which meets periodically. India-Vietnam Joint Working Group on Educational Exchange was set up in 2012 thus meeting virtually all sectors of engagement with effective institutional framework and support.

Defence and Security

Defence and security remains a key track of India -Vietnam relations. The formal structure of India -Vietnam defence relationship is based on the protocol on defence cooperation signed by India’s then Defence Minister Mr George Fernandes on a visit to Vietnam in 2000. This established an institutionalised framework between defence ministers, joint naval and coast guards exercises and training of pilots by the Indian Air Force. This was further strengthened by the 2007 Strategic Partnership Agreement which now provides the framework for furtherance of cooperation in the defence field. Some of the key facets of defence cooperation include strategic dialogue, high level bilateral visits, and training of personnel, defence production, sharing of intelligence and joint exercises.

Regular annual strategy dialogue includes discussion on various facets related to common threat perceptions and progress of ongoing programmes apart from sharing of information and intelligence. The 7th Vietnam-India Defence Strategy Dialogue was held in New Delhi, India, on September 26^th 2012, with attendance of delegations from the Vietnamese Ministry of National Defence, led by Deputy Minister Senior Lieutenant-General Nguyen Chi Vinh, and the Indian Defence Ministry, led by Deputy Secretary Shashi Kant Sharma. The 8th Round was held on 8 November co-chaired by Vietnamese Deputy Defence Minister Nguyen Chi Vinh and the Indian Defence Secretary Radha Krishna Mathur in Ho Chi Minh City.

This is supplemented by high level visits at the level of ministers and military chiefs. Visits by Vietnamese military commanders to India are common. Most recently Vietnam’s Vice Minister of National Defence and Chief of General Staff Senior Lieutenant General Da Ba Ty was in Delhi in September 2013. Ty headed a 14-member delegation and met Indian Air Force chief Air Chief Marshal N A K Browne, who is also the chairman of the Chiefs of Staff Committee. “The meeting saw issues such as enhanced defence cooperation, capacity building, joint projects and training being discussed, besides a review of the growing Vietnam-India defence relationship,” a release from the Ministry of Defence said.

Earlier, Indian Navy Chief Admiral D K Joshi was in Vietnam in November 2012 which was one of the first nations to be visited by him after taking charge. Port calls by Indian Navy’s Eastern Fleet to Vietnam amongst other countries in the region have now become common. India’s Eastern fleet commander Rear Admiral P Ajith Kumar led a month long voyage with frontline ships such as the INS Satpura, INS Ranvijay, INS Kirch and INS Shakti, the fleet tanker in May and June 2013. Indian naval ships have also been provided permanent berthing facilities at Na Thrang port in southern Vietnam. Notably India is the only country to have been provided this facility. The provision of berthing facility provides the Indian Navy considerable assistance in operating in the Western Pacific.

In the field of military technical cooperation, India has much to offer to Vietnam. With commonality of inventory of military equipment, India has been providing critical spares and ancillaries to Vietnamese ships, submarines and aircraft. In addition, servicing and maintenance of military equipment as well as ports have been organized from time to time.

While analysts may lament the poor potential of India’s defence industry, it can meet the requirements of strategic partners in the region. Thus of late efforts have been made by the Ministry of Defence to project the same in the South East Asian region. Vietnam has been quick to recognize the prospects and there are many tracks of cooperation in this sphere. India has offered a $100 million credit line to Vietnam to purchase military equipment, a proposal that is unique to that country. This is to be used for purchase of patrol boats from India to explore for oil in an area falling in China’s “nine dotted line,” zone of influence.

In training, a number of joint activities have been carried out from time to time including attending courses of instructions at the various academies, training of pilots, joint exercises between the Navy and the Coast Guard and so on. Training in maintenance and repair of major equipment is also being provided by India. Most importantly in September 2011, training on submarine operations by India was agreed upon with common Kilo class platforms held by both the countries. An area of increasing focus is training in United Nations' peace-keeping operations where Vietnam is expecting to take the advantage of India’s vast experience in this field

Soft Power Engagements - Economy, Education Et Al

The potential in the field of economy and trade is growing though at present it is comparatively modest. As per Vietnamese Government data, total trade volume touched US$ 3.94 billion in 2012 and US$ 2.45 billion during the first five month of 2013. Export by India reached US$ 1224.89 million, up 31.48 percent while export by Vietnam was US$ 1021.07 million, up 73.16 percent. Given these developments, the bilateral trade target at US $ 7 billion by 2015 set during the visit of President Sang to India in October 2011, does not seem within range and more will have to be done towards achieving the same.

While mechanisms as India-Vietnam Business Forum were established in April 2010 and have provided a platform to strengthen business exchanges from both sides, investments remain low despite the tremendous potential. Thus as of June 2013, according to the figures from Vietnam's Foreign Investment Agency, India has 73 investment projects with total registered capital of US$ 252.21 million. If investments by Indian companies from third countries are included, India has 68 valid projects with an estimated total investment capital of US$ 936.23 million. Indian companies are mainly investing in oil and gas exploration, mineral exploration and processing, sugar manufacturing, agro-chemicals, IT, and agricultural processing as per the Ministry of External Affairs.

A promising development is the plan by Tata Power to develop US$ 1.8 billion Long Phu-II Thermal Power Plant in Soc Trang. It will be the single largest Indian investment in Vietnam when it comes through and will give a strong boost to economic cooperation and strategic partnership. The contract was won in the face of stiff competition from South Korea and Russia and has pitch forked India into the prime league of investors in Vietnam thus indicating scope for aggressive marketing of Indian large project implementation capacity. Here the strategic framework provides an excellent back drop as Vietnam would rather engage with Indian companies which have spin offs in bilateral relations further strengthening bonds of cooperation.

India is suitably exploiting the potential of Information Technology education in particular with companies such as NIIT, APTECH and Tata InfoTech opening more than 80 franchised centers spread all across Vietnam. Vietnam has also been a large recipient of training programmes under Indian Technical and Economic Cooperation (ITEC) programme. Presently, 150 ITEC slots are being offered to Vietnam every year along with 16 scholarships under the General Cultural Scholarship Scheme (GCSS), 14 scholarships under the Educational Exchange Programme (EEP) and 10 scholarships under the MGC Scholarship Scheme as per the Ministry of External Affairs.

A US $ 2 million Advanced Resource Centre in Information and Communications Technology (ARC-ICT) was inaugurated in Hanoi in September 2011. The Centre has been set up by CDAC and trains students and Government officials in various areas such as web designing, network systems, Java, GIS applications and e-governance. Augmentation of high performance computing in Vietnam signed by two sides for a Rs 4.7 crore grant project is being executed by CDAC and involves installation of a 16-node cluster HPC facility at the Hanoi University of S&T and capacity building. The project is in final stages of completion.

India has also set up the Vietnam-India Center for English Language Training in Danang and the Vietnam-India Entrepreneurship Development Centre in Hanoi as part of its support to the Initiative for ASEAN Integration providing technical assistance to the Government of Vietnam. A new Vietnam-India Centre for English Language Training at the National Defence Academy of Vietnam is also on the cards. Both sides have also agreed to consider setting up a Vocational Training Centre in Ho Chi Minh City. A proposal to set up a Centre for Tracking and Data Reception and an Imaging facility in Vietnam under ASEAN-India Cooperation mechanism is under consideration. The Centre will be fully funded by India and ISRO will be the implementing agency. It will utilise data provided by Indian remote sensing satellites and harness it for multiple developmental applications as per details provided by the Ministry of External Affairs.

India has underpinned this support by aid and assistance and since 1976 India has extended 16 Lines of Credit (LOC) totaling about US$ 145 million to Vietnam. The 16th LoC for US$ 45 million for Nam Chien hydropower project, executed by BHEL, is on the verge of completion. The 17^th LOC of US$ 19.5 million for 2 projects (Nam Trai-IV Hydropower project and Binh Bo Pumping station) was signed in July 2013 during the 15th JCM meeting.

Prospects and Way Ahead

A review of Indo-Vietnam relations will reveal that prospects of cooperation remain substantial as there is strategic congruence between the countries. At the same time, India downplays significance of relationship vis a vis China thus ensuring that sensitivity of Beijing is not overly affected due to growing proximity of India and Vietnam. Vietnam on the other hand is more explicit. For instance, Vietnamese Deputy Prime Minister Mr. Vu Van Ninh in a media interaction in India on 09 January 2013 stated in relation to India Vietnam security relations, “we are committed to maintaining peace, stability, security, safety, freedom of navigation over the seas, and also access to resources in the East Sea of Vietnam. We are committed to avoiding violence or threatening to use violence in resolution of disputes in the sea. We would want to have peaceful negotiations based on international law especially the 1982 UNCLOS, the six-point principle of ASEAN, ……..”. The Indian side was somewhat ambivalent and remains circumspect

In the future, potential for defence sales needs to be exploited. While there have been reports of Vietnamese requests for Indo Russian joint missile BrahMos, India is likely to offer an alternative Pragati, developed from the surface to surface indigenous ballistic missile Prahaar. Pragati was displayed during the defence exhibition in Seoul ADEX 2013 in October 2013 and had generated considerable interest. India’s participation in ADEX with a large contingent of the DRDO provides impetus for greater engagement with Vietnam as New Delhi seems to have shed off its long standing inhibitions on defence exports

There is however, “supply side,” challenges in the relations even though India has accorded visa-on-arrival facility for Vietnamese nationals with effect from 1 January 2011; there are no direct flights between India and Vietnam. Vietnam Airlines and Jet Airways signed a MoU in October 2011 on comprehensive cooperation which includes commencing direct flights in the near future. A revised Air Services Agreement has been finalized and is awaiting signatures. Similarly, the ability of Indian companies to deliver projects in a highly competitive environment needs consideration. Overcoming these bottlenecks will be necessary to expand the engagements in the economic field.

Conclusion

India -Vietnam strategic relations are likely to maintain momentum that has been gathered over the past decade plus. As India expands its profile in East Asia and the Western Pacific, Vietnam with its advantageous geographic position in the region will be a profitable partner. However, this relationship is not likely to be at the cost of continued betterment of ties by both the countries with China. As the cliché goes, there is enough space for both India and China in Asia with mutual cooperation with other states such as Vietnam. The forthcoming visit of the Secretary General of the Vietnam’s Communist Party to India is a good opportunity for both the nations to impart further momentum to their relationship.

(The author is a Delhi-based Strategic Analyst)