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Friday, September 17, 2021

Beyond Rahul Gandhi's Outburst, There Is a Deeper Problem With the Parliamentary Defence Commit

Last week, Rahul Gandhi made news of sorts when he walked out of a meeting of the Parliament’s Standing Committee on Defence (PSCOD). The walkout came after a sharp exchange between the Congress leader and the panel chairman, Jual Oram, over the former not being permitted to speak on issues such as the need to provide better equipment to soldiers on the Ladakh border.

Gandhi alleged that the committee was, instead, “wasting” its time on discussing new uniforms to be provided to the three services. Present on the occasion were the Chief of Defence Staff Bipin Rawat, who is also secretary to the Department of Military Affairs, the Army Vice Chief S.K. Saini and the defence secretary Ajay Kumar.

Rahul was clearly grandstanding – attendance records show he has mostly been absent from meetings of the committee – though he was right on the narrow point that the PSCOD, a powerful panel through which parliament exercises supervision over the money it appropriates for the armed forces, shouldn’t waste its time on new uniforms but discuss more substantive issues.

The next day, Rahul wrote to the speaker expressing dismay at the conduct of the PSCOD and demanded that MPs should be given a right to speak freely. He said that he had written to the panel earlier saying that the Committee should discuss a range of issues relating to China’s aggressive posture on the border and its use of high-tech systems there.

Like all meetings, those of the PSCOD are around a set agenda, decided on by the chairman. Committee members may want to take up this issue or that, but they cannot individually dictate its work. PSCOD  meetings are meant to be deliberative and recommendatory; they don’t in themselves decide anything.

Rahul probably thought that the PSCOD would be a good place to play up the failings of the Narendra Modi government in Ladakh. That may well have been so, but it was wrong-headed. Rahul undermined his own case because he has attended parliament fitfully and had attended just two of the past 14 meetings of the PSCOD, since he became a member of the panel one-and-a-half year ago.

File image of Rahul Gandhi. Photo: PTI

That should not undermine the point of Rahul’s critique, howsoever intentioned. The Services don’t need to consult or inform the Parliament’s Committee on their uniform changes. That is something they can decide on their own. And yes, there are much more important things that the PSCOD could have taken up, such as the Chinese high-tech threat on the border.

No one will accuse the Indian parliament of being the deliberative body it was meant to be. It is, and has been in recent decades, a place for theatrics aimed at constituencies outside.

Also Read: How Parliamentary Committees Came to Assume a Central Role in Facilitating Legislation

The quiet, purposeful efforts of parliamentary committees

But one of the success stories of India’s parliamentary democracy had been the quiet purposeful effort put in by the various committees. Most of their proceedings are off the record and details only became available after the report was produced, sometimes after several months of deliberation. Given the nature of our broken system, this is a carefully worked out compromise where the parliamentarians put forward their views, without any expectations that they will matter in the ultimate policy-making. In turn, the government allows it officers to be quizzed by the MPs on a range of what would otherwise be sensitive issues.

In recent years, the PSCOD, too, has come under pressure to become a meaningless adjunct of the system. The reason for this was a series of trenchant reports issued by the PSCOD under the chairmanship of senior BJP leader Major General (Retired) B.C. Khanduri in March 2018. The Committee laid bare the situation within the Ministry of Defence and the armed forces.

Actually, the General was doing what other chairmen did, look at the routine Demand for Grants related to the Ministry of Defence. But given his background and skills, he brought out starkly the resource crunch that the defence services were facing under the Modi government. One of the reports had the then Army Vice-Chief (now ironically in the BJP), saying that “68 per cent of our equipment is of the vintage category.”

For his pains, Khanduri soon found himself being shifted out of the chairmanship of the PSCOD. He had annoyed too many people and brought out the hypocrisy of a government which swore by national security but was systematically short-changing the armed forces of resources for modernisation.

Overall, the PSCODs have done excellent work in raising the alarm at the declining trends in the capital expenditure of the three services and also the inefficiencies in the manner in which the Ministry of Defence has spent the allocations. Committees have not hesitated to tell it like it is to the MOD bureaucracy.

Indian army trucks depart towards Ladakh amid standoff between Indian and Chinese troops in eastern Ladakh, at Manali-Leh highway in Kullu district. Photo: PTI

Besides the PSCOD, other committees of parliament, too, have shown this. In 1990, the Estimates Committee under the chairmanship of Jaswant Singh produced an outstanding report on defence in 1991. More recently, in 2016, the Public Accounts Committee looked at indigenous construction of naval warships and made several important recommendations, including one calling for “single point accountability” to end the problem of delays and cost over-runs. They pulled up the government for taking issue with their recommendations on the issue of inaccurate costing and said so, that “instead of taking any concrete steps in this regard, the Ministry have preferred to give a hypothetical reply.” They pulled up the officials for “this lackadaisical attitude.” These are only some of the tart observations made by the Committee.

What the experience reveals is that Indian parliamentarians are as good as their counterparts anywhere. Put in a proper environment, they are more than capable of playing the role they are meant for. Yet the babus know that the PSCOD has no teeth. It can only be effective if the politician who is in charge of the ministry – the minister of defence – is a capable man who pays heed to the deliberative reports of his/her parliamentary colleagues. This is usually not the case and ministers go along with their babus, and the MPs churn out their reports which are read in the main by scholars and journalists.

The Wire December 21, 2020

https://thewire.in/security/rahul-gandhi-parliamentary-defence-committee-deeper-problem

Containment threat to China

Some people think that the Biden era may see a reduction in the pushback that China has been facing. But the Chinese themselves are bracing for an intensification of that pressure and, indeed, a wider challenge.

This is evident from the recent references to ‘National security’ in discussions in the higher echelons of the Communist Party of China (CPC). Not to forget, of course, the ramming through of the National Security Law in Hong Kong earlier this year. Earlier this month, the CPC’s apex body, the politburo, held a study session on national security, the first on the subject since 2014, when the subject discussed was counter-terrorism.

Politburo group study sessions, usually chaired by General Secretary Xi, are aimed at providing the Chinese leadership in-depth briefings on issues of the day. In this case, the invitee speaker was Yuan Peng, head of the China Institutes of Contemporary International Relations (CICIR), a think tank associated with the Ministry of State Security that runs China’s intelligence apparatus. He’s probably the first international relations scholar to be accorded this privilege.

Yuan is a specialist in US-China relations who has worked his way up the CICIR, one of the most influential Chinese think tanks. Details of what Yuan said are not available. But his previous writings and background suggests that the danger and opportunities from the confrontation with the US is very much in the politburo’s mind.

A flavour of Yuan’s ideas is available in a lengthy article he wrote in June on the website aisixiang.com. He made the following points: the epidemic was comparable to a world war and the existing international order was unsustainable; the world economy is in full recession, only one step away from the Great Depression; relations between major powers are changing, while the antagonism of the Sino-US relations has come to the fore; the centrality of the Asia-Pacific region has become clearer; globalisation was facing a counter-current and global governance faced an unprecedented crisis; the disputes over systems, models and technology have become the core of international politics; China was engaging the world on its own terms after the century of humiliation.Given the rise of China, and the relative weakness of the US, Yuan expected that Washington would be tough towards China and “containment and suppression will intensify.” He concluded his lengthy article by arguing that Covid’s lesson was on the need for reorganising the relationship between development and security. The Covid threat had shown how the security of China could be threatened in unconventional ways. China needed to ensure that it was safe against a broad spectrum of threats that confronted the country.

Some of this thinking was evident in the resolutions of the fifth plenary session (5th Plenum) of the CPC at the end of October that had been called to discuss the 14th (2022-2027) Five Year Plan. The basic theme of the plan is the importance of “technology self-reliance…(as) strategic support for national development.” But two new areas were introduced. One was the need to integrate development and security to “build a higher level of peace and safety in China.” The other was on building economic and military strength together.

In his remarks at the Politburo Study Session, Xi referred to the 5th Plenum’s call to integrate ‘high quality development’ with ‘high-level security’ to guide the country in the 14th Plan period. He outlined a 10-point agenda for holistic national security architecture and predictably emphasised the importance of the “absolute” leadership of the CPC and the need for a centralised and unified leadership. Only this system could fulfill the country’s need for a “strong security guarantee” for the “China Dream”.China is a “national security state”, which reportedly spends more on internal security, than external. But the Chinese system is highly stratified, with a command system emphasising a top-down approach. To make it more flexible and resilient is probably the challenge that Xi Jinping and his colleagues in the Politburo are trying to meet.

Right now, to add to their worries, though somewhat belatedly, the US has stepped up its challenge to China in the South China Sea. This effort is also accompanied by an ideological challenge to the CPC. US government officials like Secretary of State Mike Pompeo and Deputy National Security Adviser Matt Pottinger, insistently identify the CPC as the fountain of all evil. Earlier this month, the US imposed tighter visa regulations for party members and their close relatives. Considering anyone who is someone in China is in the CPC, the restrictions will disproportionately affect the Chinese eliteThe Chinese are now seeking to finesse a situation where their continued economic growth requires them to open up their service and financial sectors to the world, while preventing their adversaries from using this to undermine the CPC control of China. They need to do this in a context where the old consensus on engaging China has broken down and countries are increasingly looking at ways and means to come together to confront China in a range of contentious areas in the western Pacific, to the rules of international business and behaviour.

Mind you, there is nothing in the tone and tenor of Beijing that suggests that the Chinese are backing off in any of these areas; indeed, what they are doing is to shore up their security and push on their set direction. As scholar Tai Ming Cheung has noted, a key feature of the Xi Jinping era have been the efforts to turn China into a ‘national security fortress’.  

Tribune December 22, 2020

https://www.tribuneindia.com/news/comment/containment-threat-to-china-187730?

National sovereignty and international law

South Block seems to have got its knickers in a twist over Canadian Prime Minister Justin Trudeau’s comment that “Canada will always stand up for the right of peaceful protests and human rights.”

In the post-World War II period, for a state to claim absolute sovereignty and that such statements are an unwarranted interference in its internal affairs “and will seriously damage ties”, is archaic. In a myriad of ways, all states, big and small, have shed some sovereignty. They must answer to the international law, which in our era is defined by the United Nations Charter, which is binding, and pacts like the International Covenant on Civil and Political Rights (ICPR) to which India is a signatory (and China has yet to ratify). Article 21 of the ICPR is categorical that “the right of peaceful assembly shall be recognised”.

You will legitimately argue that the UN and the international covenants are strictly for the birds, in other words, who cares about them. You would say that Trudeau was ‘playing politics’ and that his remarks are really addressed to the Sikh community of Canada. So what’s the problem? After all, did not our Prime Minister undertake two major political rallies in the US? In 2014, in the wake of his election, the massive Madison Square Garden was more of a political rally aimed at signalling to the Obama Administration the importance of the Indian-American community in the US, as well as Modi’s hold on them. The Houston ‘Howdy Modi’ rally in 2019 was only a confirmation of this. US President Donald Trump himself participated, uncharacteristically playing second fiddle, all because he, like all democratic politicians, likes votes.In my view, there was nothing wrong in what Modi did. Close relations with the US have been a key element of India’s foreign policy, especially since the gap in the comprehensive national power of India and China has been widening. Playing the NRI card was a shrewd move in view of the fact that India had a few other equities with which to get the US attention.

It is always easy to rally opinion in a country in defence of national sovereignty, but under the international law, this cannot be used as an excuse to abuse the rights of citizens, or cause injury to the global commons. Anyone arguing that would end up justifying the Chinese policy of repression in Xinjiang, or for that matter, the US which despite being a major global polluter, has walked out of the Paris Climate Change Agreement. Likewise, there is a need to understand that while the rights of national sovereignty are an important element in international relations, in the ultimate analysis, they must stem from the ‘sovereignty’ of the individual rights of citizens — the right to life, the freedom of religion, freedom of speech, freedom of assembly, due process and fair trial. An argument that the rights of national sovereignty trump individual rights is a slippery path to an authoritarian state of the Nazi or Marxist-Leninist variety.

The Trudeau statement must also be seen in a context where political protest is being vilified in India. The Shaheen Bagh protests, peaceful as they were, are being sought to be linked with the riots that took place in February in New Delhi. The farmers’ protest is being described as backed by extremists, and some social media commentary has raised questions about its funding, motives and purpose. In these circumstances, making a categorical statement on the right to peaceful protest holds a certain value. In the Islamophobic climate of the country, it was easy and politically advantageous to vilify India’s biggest minority as being ‘anti-national’ in February, but notwithstanding the ‘Khalistani’ allegation, the trick is not working in the case of the Punjabi farmers who have landed at the gates of Delhi and have now received widespread support for their massive, but peaceful protest, both in India and abroad.

New Delhi has become uncommonly sensitive to protests. There is a whole theory spun out by the people who advise the Union Home Ministry, that all collective protests must be organised by some person or party. People by themselves are incapable of mounting a mass protest. There has to be an organisation, someone must be providing transportation, food and facilities and so on. All that is true, but from there to assume that those who are doing so are ‘anti- national’, is a big leapThe farmers’ protest should actually be a salutary experience. It’s quite open. The Intelligence Bureau, no doubt, has its agents scouring the gatherings, looking for conspiracies. Those organising the logistics, food and medical care for the protesters are known, they have appeared in the pages of newspapers and on TV. Try as it might, the government has been unable to join the dots to claim that this is some kind of a conspiracy, funded from abroad, as it is attempting to do in the case of the anti-CAA protests.

No doubt, Trudeau is looking for votes in the fairly innocuous stand he is taking. All he has done is to stand for the right of peaceful protests. The Punjabis are a significant minority in Canada, evidenced by the fact that their Defence Minister Harjit Singh Sajjan is a Sikh. In the UK, the Home and Finance Ministers are both of Indian origin, and so it is not surprising that a number of MPs have called on their government to take up the issue with New Delhi on the farm laws. At least Canada and the UK are sensitive to their minorities, unlike India which is seeing a systematic effort to marginalise and demonise its largest minority, the Muslims. 

Tribune December 8, 2020

https://www.tribuneindia.com/news/comment/national-sovereignty-and-international-law-181374

Our colonial heritage: Laws that remain an instrument of repression, by application and non-application

Our imperial masters, the British, left us many fine monuments and traditions. But perhaps the most enduring edifice of their rule is our justice system. Post Independence, the law was supposed to be our defence against arbitrary use of power, but it remained an instrument of repression, not just by its application, but also non-application.

Many of India’s current draconian laws have their ancestry in the British era where they were very frankly instruments of repression. The Indian penal and criminal procedure codes inherit their DNA from the latter part of the 19th century. Preventive detention laws are older; the Bengal State Prisoners Regulation of 1818, evolved to the Defence of India Acts of 1915 and then 1939. Remember, too, the Rowlatt Act of 1919 that led to the Jallianwala Bagh massacre.

Even before the era of “terrorism” we had the Preventive Detention Act of 1950 which, in its earlier avatar, had been used to detain, charge and punish freedom fighters. Instead of scrapping them, Independent India adopted them. This Act begat MISA of 1971, which, in turn, was reborn in 1980 as the National Security Act. The reference to “national security” was for show; the Act was used to suppress political dissent, and continues to be used that way.

Later, India felt that it needed strict laws to deal with terrorism, but TADA and POTA were withdrawn after being routinely misused. Even as the incidence of terrorism has declined in the past decade we are seeing new vehemence in applying draconian laws like the amended Unlawful Activities Prevention Act, in tandem with Section 124A of the IPC, and the National Security Act of 1980, to suppress dissenters, who for the purpose of invoking the draconian laws are tagged as the tukde-tukde, Khan Market and Gupkar gangs, or urban naxals.

Things begin with the authority to arrest. No one doubts that the police has it, but efforts to moderate the use of that power have come to a nought. As of now, the statute says that the police officer can arrest if s/he believes that such an arrest is necessary. There is no judicial mediation here; it is the police officer’s discretion.

Labelling people as “anti-national” is a convenient way of suppressing legitimate criticism of the government. If you, through “words, either spoken or written, or by signs, or by visible representation” bring “hatred or contempt” or excite “disaffection towards the government” your goose is cooked, according to the sedition clause, Section 124A of the IPC. It has been liberally applied on protesters, a cartoonist, on Kashmiri students for cheering the Pakistan cricket team, for not standing up for the national anthem and so on. In 2016, it was applied to Kanhaiya Kumar in a trumped up case in JNU.

This year, a primary schoolteacher and a mother were arrested for sedition, and children interrogated, presumably to implicate their elders, for charges relating to an alleged criticism of the Citizenship (Amendment) Act through a school play. Somehow, attitudes towards CAA have become the litmus test of patriotism.

All governments since 1950 have liberally used illiberal laws to stifle dissent. What facilitates this process is the attitude of courts. The real punishment is not the arrest; it is the case which drags on; first there is the chargesheet, then a supplementary one, then adjournments and so on. Archaic legal procedures stretch the trial to its maximum.

India’s broken criminal justice system has become a means of punishing dissidents and other inconvenient people using existing laws. A charge is levied, the person is arrested for sedition or unlawful activities and because the charge is serious, denied bail. More often than not, the lower courts are willing to accept the police’s version at face value. This is notwithstanding the record of the police. It is years by the time the case reaches the higher courts. They are not in much of a hurry either. It becomes a chilling warning to all protesters and dissenters, that the price of liberty is high, very high.

Times of India December 5, 2020

https://timesofindia.indiatimes.com/blogs/toi-edit-page/our-colonial-heritage-laws-that-remain-an-instrument-of-repression-by-application-and-non-application/

No signs of winter thaw

Last Saturday, according to a report in The Tribune, India-China military talks were deadlocked, at least for now. The last round, the eighth since June 6, was held on November 7, and the two sides have been unable to find dates for another round.

As temperatures began to plummet in Ladakh, there were expectations that the two sides would find a solution to the problem arising out of the Chinese action of breaching the LAC at several points last May. Instead, both sides have dug in by providing their personnel special housing and clothing.



China has given no indication that it is aware that it is responsible for changing the situation. It would be foolhardy to assume that we can return to normality soon.

Conversations with the Chinese side reveals that they continue to blame India for the problem and maintain that the boundary issue should be decoupled from the normal ties between the two countries. If India insisted in coupling the issues, they say, the question will be further complicated. When India presses its case, it gets homilies on properly managing and containing differences and not allowing the situation to escalate. In a period when the Chinese are facing the US and other efforts to decouple from the Chinese economy, they are sensitive to Indian actions in the same direction, even though the impact of India’s restrictions on Chinese trade and investment is not very significant.

Actually, during 1988-93, India did indeed decouple the boundary issue from that of normalising ties. Subsequently, it built a multi-layered relationship with China, based on trade, investment, people-to-people contacts and cooperation in a range of areas on global and regional issues. What the incidents in Galwan and other parts of eastern Ladakh have done is to disrupt this. Beijing needs to know that it is not easy to put the toothpaste back into the tube.

The Galwan incident, where 20 Indian soldiers lost their lives, has had a profound impact across the country. This is especially since there had been no casualties on the LAC since 1975.

Given the Indian system, the Chinese sometimes find it difficult to understand, no government can afford to ignore public opinion. It is true that in India, the media nowadays often plays an inflammatory role. But it is still a largely free media and it is difficult for even the Modi government to control it.

In Galwan, a local situation went out of hand and poor Indian command and control played a contributory role. But the primary responsibility is that of the PLA which should not have been there in the first place.

As it is, by their own description of the LAC in 1960, they should have been at least half a kilometre away from the place where the incident occurred and where they wanted to retain an observation post there. Satellite imagery confirmed that they have amassed substantial men and equipment in the Galwan valley, and their intention was not to guard their portion of the LAC, but to push a road 8 km into the Indian side to the point where the Galwan river meets the Shyok. Subsequently, the Chinese have claimed the entire Galwan valley. Incidentally, by now, the Chinese side has confirmed that they, too, suffered casualties in the incident.

Efforts to defuse the situation began almost immediately. The Prime Minister himself denied that there had been any intrusion. Maybe, he did this to protect his government from accusations of mishandling the situation, or, perhaps he was hoping to ensure that this could calm the situation.

Talks between military officials that had been held since May 6 did not work and eventually the issue was taken up in Moscow on September 4 and 10, when Defence Minister Rajnath Singh and External Affairs Minister S Jaishankar met their Chinese counterparts.

After the second meeting, the one between the two foreign ministers, a five-point de-escalation process was supposed to have begun. But after taking the first step in the military meeting of September 21—not to add any more troops along the frontline and refrain from changing the ground—nothing has been done.

Earlier this month, there was a flurry of media reports that India and China were close to an agreement for the Pangong-Chushul area. This would begin from the north bank of the Pangong Tso where the PLA had occupied and fortified an 8 km stretch from Finger 4 to Finger 8 since early May. The Chinese side would pull back to east of Finger 8, while the Indians would pull back to a position between Fingers 2 and 3. This zone would thereafter become a ‘no patrol’ zone.

Thereafter, they would pull back tanks and heavy weaponry near the LAC, and then, lastly, both sides would pull back from the forward positions they have taken along the Pangong (Kailash) range in the south bank of Pangong Tso and also make this a ‘no patrol’ zone.

Almost immediately, the reports were denied by the Communist Party mouthpiece Global Times, which said that the reports were inaccurate and contained half-baked information. This was not a total denial, and a commentator cited acknowledged that the two sides had some agreement, though not as wide-ranging as described in the media. The report claimed that the Indian media’s reports were aimed at pressuring China and stirring up domestic nationalism.

So far, the Chinese have given no indication that they are aware that it was they who have changed the situation, both in the LAC and the larger Sino-Indian relationship. Given this, it would be foolhardy to assume that we can return to normality soon.

Tribune NOvember 24, 2020

https://www.tribuneindia.com/news/comment/no-signs-of-winter-thaw-174856

Why India’s ‘Protectionism’ & Move To Stay Out Of RCEP Can Hurt It

On Sunday, 15 November, 15 Asia Pacific nations signed the Regional Comprehensive Economic Partnership (RCEP) on the sidelines of the annual summit of the ASEAN in Vietnam.

Negotiations for the agreement began in 2012, and its signing has created the world’s largest trading bloc.

Fifteen countries – 10 of the ASEAN and its five trading partners, Japan, South Korea, Australia, New Zealand and China – have signed up to this huge trading bloc. The time and effort that went into the deal was on account of the various development levels of the participants – some like Laos or Myanmar and Cambodia are less developed, China, Vietnam, Thailand and Malaysia are at the intermediate stage, while Australia, New Zealand, Japan, South Korea and Singapore are developed economies.

Reconciling their conflicting interests have led to a document that runs more than 14,000 pages, and years and years of negotiations by specialised committee and ministerial summits. It covers trade in goods, trade in services and electronic commerce.

The deal is significant for China, which has a number of bilateral pacts, but had not signed up to a regional multilateral trade pact till now. The RCEP is expected to eliminate a range of tariffs on imports over 20 years, and it also has classes on IPR, telecom, financial services, e-commerce and professional services. Analysts say that many states have ongoing FTAs which can be very complicated. But with RCEP, a lot of the problems will be ironed out.

Of course, all this depends on the process of ratification which requires six ASEAN states and 3 of its partners to ratify it before it becomes effective.

Critics have said that the RCEP is not as ambitious as the defunct Trans Pacific Partnership and its successor, the CPATPP. But still, countries are seeing the advantage of signing up. ASEAN will get additional access in trade in goods from China, Japan and South Korea, beyond the existing trade deals. Immediately, the signatory countries will be hoping that the RCEP will assist their respective countries to recover from the COVID pandemic.

India has chosen to sit on the sidelines, even though all the countries were keen to have New Delhi onboard. New Delhi’s action remains something of a mystery.

Officially it says that the RCEP would have ‘hurt Indian industry’. In November 2019 at the RCEP summit, where it was announced that the text-based negotiations had been completed, it was stated that India “had significant outstanding issues, which remain unresolved.” The statement had noted that the signatories of the agreement “intended to further expand and deepen regional value chains for the benefit of our businesses… workers producers and consumers.”

Also Read

Modi Govt Has Become Increasingly Protectionist – What This Means For Industry

Later, an Indian official said at a press conference in Bangkok that the decision not to join “reflects both our assessment of the current global situation as well of the fairness and balance of the agreement. India had significant issues of core interest that remained unresolved.” Just what this statement meant has not yet been fleshed out.

There were concerns among sections of the industry that cheap Chinese goods would flood the market and kill domestic industry. Ten central trade unions had also called on the government to withdraw from the negotiations.

The government itself was not disinclined. Despite its pro-globalisation stance, the reality is that the Modi government has become increasingly protectionist in recent years with import tariffs being raised in successive budgets.

What Is Modi Govt’s Economic Development Strategy?

The recent call for an ‘Atmanirbhar Bharat’, though somewhat ambiguous, has also fed into this kind of a mindset. And the recent tensions with China could push India also to decouple from China. But it is one thing for a technology super-power like the US to punish China by denying it trade, and quite another for India which benefits from the cheap products that China supplies.

With this action, it is not clear just what is the government’s economic development strategy. The Asia Pacific region has been the best example of the fact that trade brings prosperity. India’s ambitions as a manufacturing power cannot be fulfilled unless it is also a major trading entity.

China, South Korea, Vietnam have all risen through trade. According to Kishore Mahbubani, in 1990, Thai GNP was 14 times that of Vietnam. By 2018 it is only twice that as Vietnam has emerged as a major trading country.


Supply Chains Shifting Away From China: India’s ‘Missed’ Opportunity

Before the Nonthaburi RCEP Summit decision on 4 November 2019, there had been some comment as to how staying out would harm Indian trade competitiveness. The CII President Vikram Kirloskar said that the growth of regional value chains would encourage a momentum to the integration of the Asia-Pacific. Favourable tariffs and Rules of Origin, could make India “a major hub for coordinating regional value chains through itself—both as a market for final products and as a location for third country exports, primarily to the Middle East, Africa and Europe.” But once the government announced its pullout, all the Chambers of Commerce, and Kirloskar himself lined up to support the decision.

India is also missing out on the opportunity being presented by the shifting of supply chains away from China. This trend has been around for a while, but accelerated by the US-China trade war and COVID-19.

Rising wages in China has also resulted in some companies moving to places with lower labour costs. The pandemic disruption in China in February-March, too, has persuaded some industries not to become too dependent on one country or region.

With India out of RCEP, manufacturers will prefer to shift supply chains within the trading bloc for the sake of simplicity of trading rules and tariffs.

Beyond the economic impact, the RCEP has huge geopolitical implications. It not only provides relief to Beijing, coming as it does at the height of the American campaign to ‘decouple’ from the Chinese economy, but provides the basis on which Chinese dominance of the world economy could grow. Along with that, inevitably, will come its political influence.

And the irony is that by staying out, India, which politically endorses an Indo-Pacific policy, has, by its action, undermined the economic foundations on which that policy would rest.

What the RCEP minus India will do, is to reassert the view of the region as the Asia-Pacific.

Quint November 17, 2020

https://www.thequint.com/voices/opinion/india-rcep-china-asean-nations-trade-deals-united-states-modi-govt-vision-for-economy-growth-industry?