Showing posts with label Indian economy. Show all posts
Showing posts with label Indian economy. Show all posts

Tuesday, July 7, 2015

Need for a Comprehensive National Strategy

Lt Gen VK Ahluwalia

Global Peace Index (GPI), published by the Institute for Economics and Peace (IEP), a Sydney-based global non-profit organisation, has ranked India low in peace index, as ‘143rd among 162 countries and fifth out of seven in South Asia for the second year in a row. The cost of containing violence in the country reportedly rose by over 90%, from $177 billion in 2013 to $341.7 billion in 2014, or 4.7% of the country's GDP.’ While the figures are based on factors like the level of safety and security in society, involvement in various conflicts and the degree of militarisation, it specifically mentions about the Maoist insurgency. It said,” The number of casualties from internal conflict also rose in India where a Maoist insurgency still runs rife.” Prima facie, the figures pertaining to the percentage increase and the actual expenditure incurred on containing violence, quoted by IEP, look alarming. Even if we accept some percentage of it to be true, there is a need to analyse and arrest the trend of increased expenditures to contain violence.

Relevance of GPI’s Observations

It is true that India faces a number of challenges to its security, both due to external and internal threats. It continues to face a serious two front strategic scenario, as it has unresolved boundary dispute with Pakistan and China. In addition, there are concerns about internal security, which, in the recent times, have acquired serious dimension due to intermittent terrorist attacks, conflicts due to religious and regional intolerance and the on-going insurgencies in the country. What is of great significance is the fact that India has continued to be affected by bloody insurgencies right since its independence. Over the last six decades, we, as a country, have resolved only one classical insurgency (Mizoram insurgency by Mizoram Peace Accord, June 30, 1986). It is also true that the militancy in Punjab was resolved, but it was not a classical insurgency. Tripura’s insurgency has been brought under control to a large extent, but not resolved. The idea of maintaining “strategic patience and thus allowing the militant organizations to wear out”, will certainly not see resolution of our insurgencies for a few more decades. Unless we take multi-pronged active measures, we will, it appears, continue to increase our expenditure on containing violence, much against country’s requirement to provide human security and to improve its socio- economic conditions. To that extent, the observations of the GPI are relevant and merit deliberations. Do we need to have a relook at our approach to resolving our internal security problems, especially the insurgencies? Are we addressing the roots of the problems on which the insurgencies rest? The Naxalite movement, an indigenous insurgency, which has sustained for about five decades and also mentioned by the GPI in its report, has been covered in some detail.

Discontent Persists

Who are the people that are affected by the left wing extremist activities? It needs to be understood that while the demography of the region principally determines the cadre base of the Naxalites, it largely remains a rural and tribal base. In other words, considering the areas affected by Naxalism, it primarily affects the tribal population, as also the dalits, the deprived lower & backward classes, the poor farmers, and the unemployed rural youth.

The lack of ‘political will’ to enforce land reforms in the post-independence period was the primary cause of the first Naxal upsurge in India in 1967. In fact, discontent among the people was more than visible even before Independence, as the country witnessed the ‘Telangana Peasants’ Armed Struggle’ (1946-51) against the feudal land lords, and the ‘Tebhaga Movement’ in Bengal (1946) that demanded ‘two third share of the produce of crops’. While allotment of land to landless remains a distant dream in most states, non-implementation of people – centric schemes and forest laws, corruption and non – accountability of officials has made the situation worse for the lower class, specially the tribal population in this region. Of late, the governments, both at the centre and in the states, have focused to deliver and implement a few schemes on the ground. Results of their initiatives will be known only after some time.

Since Independence over 60 million people have been displaced in our country on account of construction of reservoirs for dams, mining operations, setting up industrial corridors, wild life sanctuaries etc. According to a report, approximately 40 percent of them were from the Naxal - affected areas. It merits a mention that an unplanned displacement of people causes economic dislocation, food insecurity, jobs, shelter and social disruption. In addition, it may take years to overcome the emotional and psychological trauma borne out of unjust treatment. The incidence of starvation deaths, primarily due to impoverishment, is among the highest in the tribal areas. Lack of employment opportunities and food insecurity causes a great amount of dissatisfaction among the affected population. These sentiments were fully exploited by the Naxal leaders to propagate the plight of the people at the hands of an ineffective government.

Socio- economic conditions: A comparison

The area is extremely rich in terms of mineral wealth and natural resources of the country. It contains approximately 80-90 percent of India’s coal, iron ore, bauxite and manganese. It also accounts for almost 40-45 percent of the total forest cover in India. Refer Figure1. It shows the density of mineral resources and the forest cover in the country. Yet, these very areas are among the poorest people and have been ranked lowest in terms of human development indices (HDI), poverty, food security, education, employment, rural electrification, housing, connectivity, potable water and sanitation facilities. In other words, these people have not really benefitted from the growth story of India.
While the national average of population below poverty line (BPL) is 27 percent, it is much lower for the rural tribal population in the Naxal-affected states. Refer Figure 2, on BPL. It highlights the glaring disparity between the national average and within the Naxal- affected states.
Ironically, the rural areas of Naxal-affected states are among the worst affected in India with regard to availability of electricity, despite the fact that more than 80-85 percent of coal for the country and its thermal stations is extracted from these very areas. The availability of electrification in the rural areas in the Naxal-affected areas is much below 25 percent in comparison to the rest of the country.
Similarly, the literacy levels of the tribal population in these states are much below the other classes in each state. Refer Figure 3, on Literacy rate. Naxal - affected regions have very poor social infrastructure, mainly in areas of education and healthcare. Though the allocation of funds for education and health sector has increased progressively over the last decade, there is a need to further enhance the budget to achieve optimum results of the demographic dividend.
For any nation, human development indicators area function of economic growth, social policy, education, life expectancy, and poverty reduction measures at the macro level. Thus, these indicators, in true sense, manifest the levels of social and economic conditions of the society. Figure 4 shows that the HDI of the Naxal - affected states to be much lower than the national average. Thus, it is easy to assimilate the reasons for the higher levels of Naxalism in some areas of the country in comparison with others.
The unemployment rates of the tribal population are also the highest in the country, much higher than the national average for rural and for urban areas. High unemployment among the youth finally manifests in higher incidents of Naxal violence. Such statistics reinforce the need to urgently initiate steps to improve the employment opportunities – perhaps the biggest challenge to the government in power – for the affected poor people in these areas.
In addition, the lack of surface communication cripples the overall socio-economic development of these states, resulting in adverse effects on public distribution system (PDS), education, medical services, training for vocational skills, marketing facilities for agricultural produce, veterinary cover for animals, and other vital public services.

Most leading business houses - those that acquired land resulting in displacement of people - have generally not taken any noticeable actions to uplift the quality of life of the local population, resettlement of displaced people, conservation of environment and empowerment of the youth in terms of job related skills and job opportunities. In other words, majority of them have only exploited the local populace and the natural resources, with a view to maximize their profits. Most of them have failed to meaningfully utilize two percent of their profits for corporate social responsibility (CSR) in the affected areas. To ensure sustained economic growth, while certain actions are required to establish industries and develop infrastructures, but these should be carried out in a deliberate manner that takes into consideration the welfare of local population. They should be empowered, consulted and taken on board. On balance, such actions should finally result in a better quality of life, and provide adequate job opportunities for the affected people of the region.
It is more than evident that the main causes of LWE are due to vacuum in governance leading to economic – socio fault lines, in that order of priority. Survival needs of the people are the first and foremost requirement. Therefore, removing the root causes of conflict on which the insurgency rests is vital to resolve the conflict.
Security situation
Ever since the merger of the two potent and lethal militant organizations – MCCI and PWG along with their military wings – in Sep 2004, there was a marked increase in the level of violence till 2009 and 2010. These two years were the bloodiest years in the history of the Naxalite movement. With the SF becoming effective in these areas, there has been a decline in the level of incidents and the violence.

The details of Naxal violence for the period 2003 - 2014 are given at Figure 5 on the subject. However, to remain relevant, the rebels will continue to strike periodically. Therefore, the SF should not be complacent.

The Naxals are at the critical phase of their movement, because of leadership crisis, splintering of the group into a number of smaller groups, loss of control over their traditional strongholds, shrinking recruitment base, insurgency fatigue and inadequacy of weapon systems. To enhance further effectiveness, security strategy that addresses the region as a whole needs to be evolved, with the cooperation of the states. This is essential in the larger interest of the country’s internal security and making available additional funds for its growth story.

Comprehensive National strategy (CNS)

There is a need for formal document in the form of CNS and an action plan to address the root causes of the insurgency. Security strategy should logically flow out of the CNS. While the SF should aim to provide a secure environment, the development agencies and civil services should work in close harmony to implement welfare schemes, on priority. The document should spell out role of each element of national power so that they can prepare and deliver on the ground. Simultaneously, the focus should shift to good governance, implementation of people-centric schemes on the ground, accountability, and transparency in its functioning. Though rather delayed, it is learnt that a formal document is under preparation by the government that would address all areas of concern - security, governance, development, survival needs, public perception management and police reforms - so as to resolve the conflict.

(Former Central Army Commander, Lt Gen VK Ahluwalia (retd) has done an an in-depth study on the Maoist issue in Central India)

Published Date: th July 2015, Image Source: http://newsjharkhand.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)

Thursday, May 28, 2015

First Year: Modi Invigorates Indian Economy and Foreign Policy

Lisa Curtis

Marking one year in office this week, Indian Prime Minister Narendra Modi gets high marks for reviving India’s foundering economy and energizing foreign relations with global powers and regional neighbors. The government has experienced some setbacks in implementing its ambitious agenda, like failure (so far) to pass the land acquisition and GST bills, but overall the scales tip toward a largely successful first year. This is good news for the U.S., which is rooting for India to develop a more robust economic, political, and military role in the region and beyond.

With the growth rate projected at 7.5 percent (outpacing China for the first time in 15 years), inflation down, and the current account deficit shrinking, Prime Minister Modi has stuck to his campaign pledge to revive the Indian economy. The opening of the insurance and defense markets and aggressive push of the “Make in India” campaign is generating optimism that the government is moving in the right direction on the economy.

Equally impressive have been Modi’s foreign policy accomplishments. Logging 19 foreign trips, Modi has reasserted India’s role as a regional and global power. While prioritizing moving the U.S.-India relationship on a firmer footing, he also has methodically built up ties with Asian partners like Japan and Australia and tended to relationships with neighbors, Sri Lanka, Bangladesh, and Nepal.
Remarkably, PM Modi and U.S. President Barack Obama held two rounds of meetings within a five-month period, including Obama making the first-ever U.S. appearance as Chief Guest at India’s Republic Day parade. The two sides made progress on military cooperation, agreeing to renew the 10-year Framework for the U.S.-India Defense Relationship and announcing joint projects, including the co-production of unmanned aerial vehicles (UAVs) and specialized equipment for military transport aircraft and establishment of contact groups to explore co-development of aircraft carrier and jet engine technology.

Although characterized as a “breakthrough in understanding,” the two sides made less progress than meets the eye on the Indo-U.S. civil nuclear deal. U.S. companies are still wary about investing in India’s civil nuclear sector, indicating there remain serious sticking points on the liability issue.

Forming the backdrop of progress on Indo-U.S. defense and strategic ties is undoubtedly the military and economic rise of China. One of the most striking aspects of Obama’s India visit was their joint statement on cooperation in the Asia Pacific, including a reference to the South China Sea, an unambiguous upbraiding of China’s increasingly assertive posture on its maritime claims.

Modi’s highly productive visit to Japan last fall was an elaboration of his strategy to strengthen India’s hand with regard to the China challenge. During that visit, PM Modi and Japanese Prime Minister Shinzo Abe agreed to elevate their dialogue to a “Special Strategic and Global Partnership” and Japan committed to investing $35 billion in Indian projects over the next five years.

He also was the first Indian prime minister to visit Australia in 30 years, a further example of his bold foreign policy agenda. He addressed the Australian parliament and talked about the two countries being natural partners who both depended on the oceans as “lifelines.”

Modi’s successful visit to China earlier this month can be viewed as a vindication of his tougher policy on their border disputes. While speaking candidly about their unresolved border issues, Modi also courted Chinese trade and investment. The two countries signed 24 agreements and nearly $30 billion in business deals. He stopped short of accepting China's invitation to join its “One Belt, One Road” initiative, however, demonstrating they will continue to compete for regional influence.

The Modi government has made some headway on the goal to modernize and bolster the military. It raised defense spending by 11 percent to around $40 billion for the Indian fiscal year beginning April 1st, although defense analysts generally view this figure as still too low, especially when compared to the $140 billion China spends annually on its defense. The finalizing of the fighter jet deal with France accomplished during Modi's visit there last month will help India in its modernization push. Raising FDI caps in the defense sector could eventually help to indigenize Indian defense production, but poor infrastructure, continued bureaucratic obstacles, and failure to allow the private sector to lead the way on research and technological innovation will hinder significant progress and guarantee India continues to rely primarily on imports for its defense requirements.

Backtracks on Pakistan and Religious Freedom

Relations with Pakistan have been on a downward trajectory ever since Modi called off Foreign-Secretary level talks last summer due to a Pakistani official’s meeting with Kashmiri separatists. There has been an uptick in cross-border firing with Pakistani forces along the Line of Control and a slight increase in terrorist activity in Kashmir over the last several months.

Pakistan has done its part to contribute to the downward spiral in relations by releasing from jail in April the mastermind of the 2008 Mumbai attacks, Zakiur Rehman Lakhvi.

A crisis with Pakistan would distract Modi from his broader foreign policy agenda. But New Delhi would also likely win international sympathy, particularly if Pakistan-based terrorists precipitated the crisis as in the three-day terrorist siege of Mumbai in 2008.

Another issue on which there has been some disappointment with Modi is that of religious freedom. He was late in reining in some of the hardcore Hindutva elements of his party when they pursued mass conversion ceremonies in which Muslims and Christians are converted to Hinduism. The so-called “reconversion” ceremonies and a spate of desecrations of churches in New Delhi last December put Modi on the spot.

He responded by reaffirming his government’s commitment to religious freedom during a speech to Christian leaders in February and has apparently quietly discouraged the reconversion ceremonies. But he must find more opportunities to demonstrate he has left communal politics behind for good and will focus instead on protecting religious minorities.

Ready to Assert Influence

U.S. officials look to India to project power and influence in the Asia Pacific to help promote free trade and a stable, democratic order. An assessment of the Modi government’s first year on the job indicates India is beginning to take on this role more readily.

The author is Senior Research Fellow at The Heritage Foundation.
(The Heritage Foundation, United States & VIF have a collaboration on matters of mutual interest)

Published Date: 28th May 2015, Image Source: http://www.thepoliticalindian.com

Friday, July 18, 2014

A Good Budget, Devoid of Populism, Dramatics and Fudged Accounts

Dr. A Surya Prakash, 
Distinguished Fellow, VIF

Mr.Narendra Modi is perceived as a tough Prime Minister who will take tough decisions. He is also seen as one who will even take harsh decisions if need be. In the run up to his government’s first budget, Mr Modi reinforced this image by warning the people that he may have to administer some “bitter medicine” in order to revive the economy. Since no Prime Minister in recent times had ever given the people such advance warning, the people expected some really harsh measures in the Union Budget, but that did not happen.

The only “bitter pill’ was the increase in railway fares by 14 per cent but the government gave the tax payers some sops in the general budget, which more than made up for the railway fare hike. In the Union Budget. the government announced measures to revive the manufacturing sector, stepped up investments in infrastructure, declared its intent to woo back the foreign investor and empower youth with skills and jobs. The Railway Budget too was a pragmatic one with particular emphasis on improving the financial condition of the Railways, completion of on-going projects and improvement in railway safety, cleanliness and speed.

All this is in line with the promises made by Mr.Modi and the Bharatiya Janata Party (BJP) during the Lok Sabha election campaign, but it was done without flamboyance or dramatics. The two budgets were drawn up with a great deal of responsibility to ensure continuity where needed and to effect change where essential. That is why many observers say that there is no ‘big bang” proposal in this budget. But what they forget is that the budget signifies the near absence of populism and some extra dose of pragmatism. Also, the past practice of fudging figures and using the Union Budget as a vote-catching measure is clearly absent in this budget. Clearly, this was something expected of the Modi government. That is why, overall, the Prime Minister and his team deserve to be complimented for taking stock of India’s financials, accepting the terrible economic situation which they have inherited more as a challenge than a curse and using Budget 2014 to prepare the ground for the government’s vision for overall economic growth.

The Subsidy Basket

In recent years, a major concern of some economists has been the ballooning subsidy bill of the Union Government. In their view, if the government lacks the political will to cut subsidies, it will not be able to pull the country’s economy out of the morass that it is in today. The total subsidy bill runs to over Rs 2.6 lakhs crores and this includes the food subsidy (1.15 lakh crore), Fertiliser subsidy (72,000 crores), Petroleum subsidy (Rs 63427 crores) and Kerosene subsidy (Rs 29488 crores). In fact, the government has provided around Rs 20,000 crores more towards food subsidy in this budget. The Finance Minister has wisely appointed an Expenditure Management Commission and put off a decision on subsidies until the committee’s findings are known. Although the government has not tinkered with the subsidy budget, it has taken the initiative to examine subsidies de novo by appointing an Expenditure Management Committee. This is possibly the best example of non-flamboyance in this budget.
This budget is different from those of the past on many counts. For example, the government has announced its firm resolve to ensure a stable, predictable tax regime – something that is critical for investors, both domestic and foreign. Next, it has announced several measures to boost the manufacturing sector, which had gone into a slump over the last two years; to improve the job market and to enhance the skills of the working class; to give a big push to the infrastructure and Real Estate sectors; and to woo back foreign investors, who were losing interest in India in recent years.

The first big step announced by the Finance Minister to reassure the foreign investor was the promise that the government would normally avoid retrospective taxation and that should issues arise, such matters would be referred to a committee appointed specifically to handle such cases. Other decisions announced by Mr.Jaitley to woo back investors include raising the limit for Foreign Direct Investment (FDI) in Defence and Insurance Sector from 26 per cent to 49 per cent. In order to revive the manufacturing sector, the Finance Minister announced a venture capital fund with a corpus of Rs 10,000 crores to attract private capital towards micro, small and medium enterprises, promotion of mega industrial zones and to promote manufacturing hubs for electronic goods. On the infrastructure front, the Finance Minister has allocated Rs 37880 crores for roadways, announced major expansion of the gas distribution grid and allocated significant sums for developing waterways along the Ganga, metro rail projects and airports for tier I and tier II cities. Mr.Jaitley has also sought to inject fresh impetus into the Real estate sector with huge allocations (Rs 7060 crores) for Smart Cities – satellite towns near big cities -to be built for the aspiring classes.

This budget more than trebles the target for construction of highways (23 kms per day as against 8 kms in 2012-13). Mr.Jaitley has laid out the blue print for building 100 new cities and prioritises development of 100 most backward districts. It also smoothens the process for creation of special economic zones. The budget also offers tax incentives to Infrastructure Investment Trusts and Real Estate Investment Trusts in order to step up investments in these sectors.
As regards the average citizen, the budget left greater disposal income in the hands of ordinary tax payers so that they could increase their savings and also have surplus funds to spend. Side by side, the Finance Minister announced tax cuts for a number of consumer goods.

The `Modi Effect’ in the Union Budget

One can also discern a distinct “Modi Effect” in this budget. A major promise made by the Prime Minister to the people during the campaign was that he would like to work towards ensuring 24X7 electricity to every home in the country. Mr.Modi appears to have begun work on this ambitious scheme in right earnest with his government’s first budget allocating funds for the Deendayal Upadhyaya Gram Jyoti Yojana . The Prime Minister has often spoken of the need to impact skills to the youth, so that the degrees and certificates that they carry guarantee the acquisition of skills which employers want. The budget has provided for creation of a National Multi-Skill Mission to impact skills to youth in the employment market. “Swach Bharat” ( Clean india) has been another pet project of Mr.Modi and the budget has taken due notice of this by allocating funds for the `Swach Bharat Abhiyan’ with 2019 as the target for ensuring toilet facilities in every household.

When Mr.Modi visited Varanasi during the campaign he told the people that he had come to the holy city because he had been called by ‘Maa Ganga’. Mr.Modi has displayed his reverence for India’s most revered river and city by allocating over Rs 2000 crore in the budget for a project titled “Namami Ganga”, meant to clean up the holy river. The budget also allocates over Rs 4200 crores for creating a Ganga Waterway and another Rs 100 crores for repairing and renovating the ghats at Varanasi, Haridwar and other pilgrim centres along the Ganga.

During the campaign Mr.Modi laid special emphasis on the Himalayan region and the North-Eastern states and his special concern for this region is more than visible in his government’s first budget. The budget allocates an extra Rs 1000 crores for railway projects in the North-East apart from funds for a Sports University in Manipur, Rs 100 crores for a National Centre for Himalayan Studies, a separate 24X7 television channel for the region and special measures to promote organic farming in the region. The budget has something substantial for the state of Jammu and Kashmir as well with Rs 200 crores for sports stadia and Rs 100 crores to train sports personnel from the Himalayan region. The plight of Kashmiri migrants from the valley has been a matter of concern for the Prime Minister and that is why in his government’s very first budget Mr.Modi has ensured allocation of Rs 500 crores for this community. Some other sectors and programmes which are close to the Prime Minister and which have found mention in the budget are solar power and wind energy, metro rail projects, smart cities and heavy investment in the infrastructure sector.

First Budget by a Single Party Majority Government in 30 Years

The political significance of this budget is that it is the first Union Budget presented by a single-party majority government in 30 years. The last time this happened was in 1984, when the Congress led by Rajiv Gandhi won a massive majority in the Lok Sabha. Thereafter, all governments until May, 2014 were coalition governments or minority single-party governments supported from the outside by some political parties. This is an important political aspect that needs to be factored in while discussing the budget formulations of governments because if a single party does not command a majority in the Lok Sabha, the dominant party in the government has to cope with pulls and pressures from many coalition partners while drafting its fiscal policy for the year. Such constraints rob the budget of a clear focus and make it a bag of compromises. This is what makes the first budget of the Narendra Modi government quite distinct from the budgets prepared over the last three decades.

Therefore, the BJP government led by Mr.Modi has the fullest freedom to choose its course of action, without any restriction whatever from any quarter. Such freedom of action also comes with a caveat, namely that such a government does not have the luxury of blaming others or proffering excuses for decisions taken or not taken. Given the overall direction of the Union Budget, it must be said that the Modi government has made the best of the clear mandate given by the electorate and taken certain decisions which would coalition governments would have hesitated to take. For example, the decision to establish an Expenditure Management Commission to review the subsidy regime that consumes over Rs 2.6 lakh crores per annum could never be taken by a government which stands on crutches provided by the Congress Party, the Samajwadi Party, the Janata Dal (United) or such other parties which are trying to perfect the art of providing doles to people in exchange for votes. Though the Modi government has not scrapped or slashed subsidies, it has definitely signaled its intention to take a fresh look the subsidy basket. This has been possible only because the BJP enjoys a clear mandate and the Prime Minister remains committed to his promise to provide good governance.

Similarly, the decision to provide over Rs 2000 crores to clean the Ganga as also funds to repair the ghats in Varanasi, Haridwar and other pilgrim centres along the banks of this holy river, would never have been possible if the government depended on pseudo-secular political entities like the Congress or the Samajwadi Party for its survival. Over a period of time, these parties have begun to display contempt for the emotions and concerns of the majority in the country and this is the reason why they have allowed the Ganga, which is regarded as the soul of Bharat by one billion Hindus, to deteriorate. Likewise, the decision to increase the FDI in the Insurance and Defence sectors could never be taken by a government dependent on the communist parties for its survival.

Mr.Modi is happily free of all such political encumbrances and that is why he is able to focus on priorities in order to revive the Indian economy and put the country on a high growth path all over again

Published Date: 17th July 2014, Image source: http://economictimes.indiatimes.com

Thursday, December 19, 2013

Need for Enhanced Indian Surveillance in IOR

Radhakrishna Rao, 
Visiting Fellow, VIF

Indian Ocean, the third largest oceanic body in the world accounting for 20% of the total area of the world under water, holds a position of paramount importance for India. Since India occupies a central position in the Indian Ocean Region (IOR), the significance of the Indian Ocean to the maritime security of the country hardly needs to be emphasized. Rightly and appropriately, India considers the Indian Ocean as its own backyard. As pointed out by the historian K.M.Pannikar, “For India, the Indian Ocean is a vital sea. Her lifelines are concentrated in that area, her freedom is dependent on the freedom of that water surface.” On another front, Indian Ocean holds the key to the climatic dynamics of the Indian sub continent including monsoon on which is dependent the fortunes of the Indian agriculture, a major contributor to the Indian economy. Further, the Indian Ocean is also crucial to the energy security of the country. According to the Journal of the Indian Ocean Region, more than 80% of the world’s sea borne trade in oil transits through the Indian Ocean choke points.

In view of the rapidly expanding strategic importance of Indian Ocean, in recent years, there has been a growing clamour for strengthening and expanding the Indian presence in this vitally located oceanic body with a view to ensure the security of mainland India on a sustainable basis. Against this backdrop, sometime back, Avinash Chander, Director General of Defence Research and Development Organisation (DRDO) , had stressed on the need for India to put in place an effective mechanism to fully monitor IOR in a complete and three dimensional manner. To accomplish this objective, he has suggested the development and deployment of about 80-100 satellites designed for covering the IOR in a detailed manner .There are said to be 19 Chinese satellites keeping a watch over the IOR. As it is, the growing Chinese space based ocean surveillance capability with particular reference to the Indian Ocean has been a matter of concern for US strategic planners. In recent years, ocean observation space platforms have emerged as a major technological tool to keep a tab on the oceanic expanse on a sustained basis with a high degree of effectiveness.

By all means, India has vital stakes in the IOR even as the geostrategic focus of the world is shifting slowly to this region through which a bulk of world’s shipping trade passes. The changing geo-political stakes in IOR in the last decade has acted as a stimulus for the littoral nations to look seawards and this presents India with a challenging opportunity to expand its influence over the countries in the IOR. Rapidly shifting geopolitical environment underpins the need for India to not only safeguard its own interests but also cater to the security needs of island nations in IOR. Clearly and apparently, India would need to boost its naval capabilities to reach out to the littoral states with a greater degree of confidence. The recent handing over of India’s home grown Advanced Light Helicopter(ALH) Dhruv to Maldives for helping this island nation carry out search and rescue operations could imply a shot in the arm for the Indian influence in IOR.

As pointed out by India’s former Foreign Secretary and currently the Indian Ambassador to USA Nirupama Rao, as the main resident power, India has a vital stake in IOR. ”We have a vital stake in the evolution of a stable, open, inclusive and balanced security and cooperation architecture in the region,” says Rao. She further observes “By definition, this would need to be a consensus based process where all the stakeholders, who have a legitimate presence in the region, make their respective contribution to the regional security”.

There is no denying the point that the threat of global terrorism, piracy and international crime coming together and converging at the strategically located IOR is real and serious. And the increased trade in raw materials including oil from West Asia has radically transformed Indian Ocean into one of the busiest waterways in the world. In addition, the emergence of a unipolar world in the aftermath of the collapse of the once mighty Soviet empire and the prevailing disturbed security environment in Iraq and Afghanistan have all gone to significantly diminish the importance of Atlantic even while boosting the critical importance of Indian Ocean as a significant conduit for the Western military supplies.

Meanwhile, the Indian Navy whose current primary area of focus is on IOR , has acquired an “eye in the sky” in the form India’s fully home-grown GSAT-7 multi band communications satellite launched in August 2013 .This space platform would help the Indian Navy keep a tab on IOR with a vastly enhanced vigour. Further, it would facilitate the real time networking of all the Indian warships, submarines and deck based fighters and helicopters with the onshore operational centre. The 2625--kg Rukmini, as the satellite is known, will also help the Indian Navy keep a hawk eye in the Arabian Sea and Bay of Bengal regions where arms running and sea piracy are reported with recurring regularity .Indeed, the seizure of the arms laden American private security ship, MV Seaman Guard Ohio by Indian Coast Guard off the Tamil Nadu coast in October this year is a clear indicator of use of IOR for arms trafficking. Evidently, investigation has revealed that the crew of this ship was in possession of sophisticated weapons without any valid documents. Indeed, the threat of arms laden privately owned vessels foraying into IOR would need to be tackled with all the seriousness it deserves.

Against such a scenario of disturbing developments in IOR, GSAT-7 with its reliable and safe communications networking capability will help expand Indian Navy’s maritime security apparatus over a wide swath of both eastern and western flanks of IOR. As things stand now, with this satellite, the Indian Navy would be able to cover well around 70% of the IOR—from Persian Gulf in the West to Malacca Strait in the east. Indeed for more than a decade now, Indian Navy has been clamouring for such an advanced space platform with a view to tighten its “sensor to shoot loop” which implies the ability to swiftly detect and tackle a threat.

Similarly, the easy access that Indian Navy would have to India’s home-grown navigational constellation IRNSS (Indian Regional Navigation Satellite System) will prove to be a game changer. The first of the seven satellites constituting the space segment of IRNSS was launched in July this year. Access to satellite navigation capability would help Indian Navy in enhancing its situational awareness and improving the hitting accuracy of its precision weapons including long range missiles. Of course, to enhance its “power projection” in IOR and beyond, Indian Navy is looking at acquiring a range of satellites designed for a variety of end uses including electronic intelligence and communications intelligence. To dominate IOR, Indian Navy should transform itself into a three dimensional network enabled maritime force with an uninterrupted access to “space resources”.

All said and done, India would, in the years ahead, face a serious challenge from China which is trying to dominate IOR in a systematic manner. As defence analysts point out, China’ strategic calculations in the Indian Ocean is to protect its sea lane of communications especially the transport of energy from West Asia to China through Malacca Strait. But on the other hand, there is also a perception that through its “string of pearls” strategy, China is trying to encircle India by creating its own sphere of influence in India’s neighbouring countries forming part of IOR.

Along with Myanmar and Pakistan, China has been fast expanding its influence in Sri Lanka, Maldives and Bangladesh. As diplomatic experts observe, by making available soft loans on generous repayment terms along with the engineering expertise for putting in place infrastructure and utility projects including roads, dams, energy pipelines, as well as military assistance, China has succeeded in expanding its influence and securing goodwill among many of IOR countries. Of particular concern to India should be China’s forays in the telecom, IT and other strategic sectors of the trouble torn Maldives which has historically been a close ally of India. Significantly, Maldives has also sought Chinese assistance for realizing its “space ambition.” Media reports also reveal that China is setting up a naval base in Seychelles. Though on the face of it, this facility is primarily meant for the purpose of seeking supplies and recuperating its navy, it could be a significant addition to China’s expanding footprints in IOR.

And in India’s immediate neighbourhood, China has taken over the administrative control of Gwadar port at the mouth of the Arabian Sea in the restive Balochistan province of Pakistan. Located about 400-kms to the east of the strategically located Strait of Hormuz, Gwadar can provide China an ideal spring board to monitor the US activities in the Gulf region and Indian activities in the Arabian Sea. The proposal for a pipeline from Gwadar to transport oil and gas to China could help this communist giant minimize its dependence of Malacca Strait which can be closed during war or become vulnerable to piracy.

China, which has already built a port for Sri Lanka at Hambantota has also become a space partner of this island nation which shares a common culture and history with India. As part of the Sino-Sri Lankan “handshake in space”, Supremesat-1 communications satellite was launched at the head of a Chinese Long March rocket last year. This partly Sri Lankan owned satellite perched over the Indian Ocean could help China in providing a boost its commercial, strategic and military interests in IOR. And as a follow on, Supremesat-2 is planned to be launched in mid-2016 by means of a Chinese Long March vehicle.

Chinese involvement in building Sonadiya deep water port near to Chittagong in Bangladesh is yet another instance of Chinese strategy of “string of pearls” aimed at encircling India in IOR. Bangladesh is also looking at China for giving a practical shape to its satellite project. The immense strategic significance of space cooperation could provide China with a platform in IOR to expand its geostrategic interests, rapidly and efficiently.

China has also strengthened its presence in IOR by signing a contract with the UN backed International Seabed Authority to gain rights to explore polymetallic sulphide ore deposits in IOR for the next fifteen years. China will have exclusive rights to explore 10,000-sq.kms in Southwest Indian Ocean. And this venture would provide a strategic platform for this communist giant to expand its sphere of influence in IOR.

Of course Indian Navy has developed its own military capabilities in the Strait of Malacca. In IOR, India holds a clear geographical and military advantage over China. India has a natural advantage in the Indian Ocean including short lines of communications to its own bases and resources along its coast. The Indian Ocean is a long way from China as well and control of the choke points could be useful for bargaining in the international power game. However, even though China’s maritime objectives in shipbuilding and port construction projects in the countries of IOR are primarily driven by commercial interests, the possibility of these large Chinese investments being used later for military purposes cannot be ruled out.


In view of its location close to Indian Ocean, India happens to be the country in the IOR having adequate resources and more importantly, a central strategic location to effectively provide a security umbrella for the region. Not surprisingly then IOR occupies a central position in Indian Navy’s strategic vision. India’s strategic doctrine for IOR highlights its willingness to enter into cooperative security in policing the region. India’s initiative in quelling the menace of piracy has been led by the Indian Navy which started its anti piracy operations in October 2008. Indeed, India has responded to China’s perceived presence in the Indian Ocean by trying to pre-empt China’s presence in the region by developing its own military capabilities near the maritime choke point particularly in the vitally important Malacca Strait. India is fully well aware that China’s strategic vulnerability in the Indian Ocean creates a dynamics of its own.