NDA Govt Has No Reason to Be Secretive About Rafale Deal

Having cut my teeth as a defence reporter, I dealt with the so-called Bofors and HDW procurement scams from their inception. Even though no one has been convicted for anything in either case, all I can say is that I suspect every deal involves money beyond the actual cost of the product. Some call it a commission, facilitation money, and yet others, a bribe. The fact is that the defence business is cut-throat.

Even minus bribes or facilitation, because of the effort that goes in long design and development cycles and years of hawking your product around arms exhibitions across the world, companies find a way of 

 The only category that is probably free from this taint is a Foreign Military Sales (FMS) deal with the US because there the US government is the buyer and usually an American company is the seller as well. No one dares cross Uncle Sam, through the “Fat Leonard” scandal suggests that crooks can often find ways around the tightest of situations.

There is another category of acquisitions where costs and details are hidden because they relate to strategic programmes, such as those relating to the development of a nuclear propelled submarine or missiles. Other government-to-government deals are not sacrosanct either.

How the Rafale Deal Unfolded?

There have been several cases where no questions were asked and none given — Mirage 2000 or the Sukhoi MKI. Some years ago, the government blacklisted companies from Germany, Switzerland, Russia, Singapore, and Israel on charges of bribing an ordnance factory official. One would imagine that these companies’ products would not require “other considerations”, but clearly they do.

As for the Rafale deal, it is important to separate the old and the new. The old deal to fill the Medium Multi Role Combat Aircraft (MMRCA) requirement was for 18 aircrafts in a flyaway condition with 108 to be made in India progressively through transfer of technology.

This won the competition against the Eurofighter, the Boeing FA18, F-16, Gripen and the Mig 35, and was ready for price negotiation. In 2011, Rafale and Eurofighter were shortlisted, and the former named the winner in 2012.

Thereafter price negotiations began on a complex deal, but in 2014, a new government came to power in New Delhi and short-circuited the old deal.

On a visit to France, Prime Minister Modi personally took charge and announced that the IAF would now buy only 36 aircraft off the shelf, no technology transfer would be required.

Same Aircraft, Two Different Deals

The same fighter is in the picture, no new variant or model. So price comparisons are not difficult and made easier by the fact that the Defence Ministry itself disclosed in 2016 that the basic price per aircraft would be approximately Rs 670 crore per aircraft, with the price going up to Rs 1,640 crore if you add weapons, spares, costs for special fitments asked for by India, and a commitment by Dassault that for five years, it will supply all the spares, components and technicians to keep the aircraft flying 75 percent of the time.

Those familiar with the issues know that there is nothing unusual in the “bells and whistles” costing more than the aircraft.For instance, take the Storm Shadow, a long-range stealthy ground attack missile or the Meteor air-to-air missile. According to a British Parliamentary question, each Storm Shadow fired in Libya cost Rs 7 crore each.

As for the Meteor, it is recognised as one of the most lethal Beyond Visual Range missiles around the world. Reportedly, India has sought other electronic enhancements each of which cost money. As for the 75 percent availability, this is crucial in a country whose fighter availability has sometimes dipped to 30 percent, and it comes expensive.

In 2015, speaking to the media, the then Defence Minister Manohar Parrikar had spoken of a figure which added up to around Rs 714 crore per fighter, considerably lower than the Rs 1,640 crore India is paying now. Of course, these are two different deals, but it is inconceivable that the Air Force requirement for “bells and whistles” have gone up so sharply in two years.

Opposition is Right in Demanding Answers

It is essentially the same aircraft and the same country buying them, so questions about its details are legitimate even if there are valid answers. Unfortunately, the government has decided to take recourse to a secrecy clause to block information, even to Parliament.

The Opposition is right to demand information on the pricing.

Providing information on the cost of an aircraft, its engine, missiles, radar warning receivers, radars, does not undermine the country’s security. What is secret is what is inside the sensors, its capabilities, algorithms and so on, which no one is asking for.

There should be no surprise that we are paying premium prices for the acquisition of one of the world’s best fighters. Certainly we will pay more than the French themselves are paying for it. That is because we will retrospectively also pay for its design and development. That is the price we pay for not having developed our own military aviation industry. Barring the US, all countries use exports to subsidise their domestic armament acquisitions.

IAF Should Get Its Priorities Right

The primary blame for the current state of affairs rests with the Indian Air Force, which ridiculously, and probably deliberately, combined six different kinds of fighters for a single requirement which was a cheap interim machine till the Light Combat Aircraft was developed. The two American fighters were 1970s vintage, the Gripen, Mig-35 and Rafale from the 1980s and the Eurofighter from the 1990s.

Of these, three were twin engine and the rest single engine. Of these the Gripen was probably the most suitable, but when you take two engines into account, the Eurofighter and Rafale were clearly superior.

If the old deal was about equipping several squadrons of the IAF with a cheap multi-role fighter, what is the new deal about ?

To me it would seem it’s about providing two squadrons for a nuclear weapons strike. Since the 1990s, that function had been served by rewired Mirage 2000s, which were, by 2014, obsolete. Penetrating hostile airspace with nuclear weapons is fraught business, and so only the best and specially equipped machines will do.But these are top secret matters, usually done with some subtlety, but Modi’s personal cancellation of the old deal and its preemptory replacement by the new did arouse suspicion.

Some of the suspicion around the current deal is because its offset clause would have Dassault spend some Rs 30,000 crore or 50 percent of the amount in developing manufacturing, design, training and maintenance facilities in India. The charge is that this money is destined for the Dassault-Anil Ambani joint venture that is coming up in Nagpur to make components for civil aircraft made by the French major.

The Ministry of Defence’s statement on Wednesday, however, insists that as of now Dassault has not chosen an offset partner. There is speculation, though, that some of the money may actually be used for a DRDO-SNECMA deal to create a powerful new jet engine as a successor to the Kaveri, which was revealed in November 2016.

Going by experience, it is next to impossible to determine whether there has been corruption or not. As the Bofors or the Westland helicopter deal revealed, the ways of the arms merchants are next to impossible to follow. You may get some low-level functionaries who got some “business development” money, but you are unlikely to reach the big bucks.

The Quint  February 9, 2018

India Needs a Far More Focused Approach to Dent China’s Influence in Southeast Asia

There is a great deal of talk in India of a new, rejuvenated relationship with the Association of Southeast Asian Nations (ASEAN) following the historic commemorative summit after which all the leaders of the Southeast Asian regional organisation participated in the Republic Day celebrations. There is little doubt that India scored an imaginative coup by inviting all ten leaders of the organisation as chief guests for the Republic Day celebrations. But what’s needed is a foreign policy approach that thinks beyond event management.

The participation of the ASEAN leaders is indicative of their interest in greater Indian involvement in their region. No doubt, many of the countries view New Delhi as a means of offsetting the enormous gravitational pull of Beijing. And this is not a moment too soon. In the past decade, the ASEAN has been buffeted by China’s increasing assertiveness in the South China Sea and the inability of their erstwhile protector, the United States of America to check Chinese behaviour. Notwithstanding the so-called pivot to Asia, the US and ASEAN have not really found a way to check China’s steady expansion into South China Sea by creating and then militarising artificial islands.

Now, China has taken another tack of reaching out diplomatically to ASEAN partners to soothe their concerns. At the beginning of December last year, Myanmar State Councillor Aung San Suu Kyi was feted in Beijing, in November, Premier Li Keqiang visited Vietnam where the PLAN and its Vietnamese counterparts held naval drills in the Gulf of Tonkin, a region where the two countries have no maritime dispute. According to the South China Morning Post, this has paid off in the fact that the ASEAN summit of November 2017 held in the Philippines did not mention China’s militarisation of the South China Sea. Earlier in that year, the ASEAN statement had referred to “land reclamation and escalation of activities.”By itself India cannot do much. It has few equities in the region. The figures are quite stark. India’s trade with ASEAN was $71 billion in 2017, China’s $571 billion. More important perhaps is the fact that the ASEAN nations have become part of the value chains linked to China. In the past couple of years, rising wages have pushed low-end manufacturing from China to countries like Vietnam and the Philippines. Many Chinese products assembled in China have components primarily from Southeast Asia. Take hard disks, Seagate and Western Digital produce 85% of the hard disks in the world. They have units in Thailand where half their output is produced with inputs from other ASEAN nations, and the product is sold to a computer assembly plant in China.

More important, perhaps, in contrast to India, China also has leverages in dealing with the ASEAN. First, of course, are those that arise from over-the-top  maritime claims through which it throws its weight around against Vietnam and the Philippines.

Its second lever, which usually received less attention, is the Mekong river which originates as the Lancang in Tibet and then flows through Laos, Myanmar, Thailand, Cambodia and Vietnam.As in the case of the Brahmaputra, China uses its upper riparian status to lean on the lower riparian states. While in the South China Sea there is still resistance to Chinese activities, most of the Mekong States have acquiesced with the Chinese leadership. In December 2017, foreign ministers of six countries through which the Mekong-Lancang flows met in China to approve a five-year development plan under the auspices of the Lancang-Mekong Cooperation arrangement initiated by China in 2015. China (along with Myanmar) has stayed out of the older Mekong River Commission where countries are agreed that their dam-building project proposals be discussed with all member states. Not surprisingly, China has several dams on the Lancang and is funding projects the lower Mekong basin as well.

Beyond this, China is actively involved in promoting overland connectivity with Southeast Asia. Using Kunming as the hub, China has ambitious plans to develop rail and road links to Myanmar, Laos, Thailand, Vietnam, Malaysia and Singapore. While high-speed rail projects in Myanmar and Vietnam have been shelved, China is pushing ahead with construction in Laos and projects in Thailand, and Indonesia. One analysis of the projects says that in contrast to their reputation, the Chinese have proved to be flexible and compromising.

India needs a far more focused approach to make a dent in China’s influence in the region. Connectivity is an important area which will undergird the economic thrust. But so far, its approach has been tardy. It needs to complete the Kaladan multi-modal project the Trilateral Highway to Myanmar and Thailand. Though begun in 2002, the highway has not come up for a variety of reasons, likewise delay has dogged the Kaladan scheme.Recently, New Delhi announced a $1 billion Line of Credit to promote digital and physical connectivity, as well as a Rs 500 crore to create manufacturing hubs in Cambodia, Laos, Myanmar and Vietnam. We have also committed tens of millions of dollars in past ASEAN summits for economic cooperation, science and technology development, and green projects. What is really needed, to go by the experience of the Kaladan and the Trilateral Highway project, is to put in a new mechanism through which scores of smaller schemes in Bangladesh and ASEAN countries are run through a special overseas projects management outfit which would be run out of the Prime Minister’s Office itself.

And, in the context of India’s pivot, what is needed is a sharp scaling up of the size of the schemes, perhaps, in coordination with our other partners, Japan, Australia and the US, the first two are major trade partners and investors in the ASEAN, while the US remains the key security provider for everyone. This partnership needs to percolate deeper towards relations between the government aid and investment agencies of these countries, as well as their corporates.

As a result of Chinese pressure, Japan has stepped up its activities in the region. New Delhi and Tokyo have already announced their decision to cooperate to create an Asian Africa Growth Corridor which will link the Southeast Asia and Australia with India and Africa. This ambitious scheme involves mobilising financial resources and developing quality infrastructure, even while avoiding the pitfalls accompanying the Belt and Road Initiative.

Connectivity schemes only have a meaning if they are based on a foundation of good internal connectivity. India has many schemes, especially in its Northeast, but almost all of those are working at snail’s pace. Even the 1,504-km Delhi-Mumbai Dedicated Freight Corridor has seen “excruciatingly slow progress.” This corridor is, crucially linked to the success of the larger Delhi Mumbai Industrial Corridor project.

The  Wire February 6, 2018

The China angle

China is getting set to play a bigger role in Afghanistan. It is in talks with the Afghan government to establish a military facility in the narrow Wakhan corridor which separates Kashmir from Tajikistan and borders Xinjiang. It has also appointed a new ambassador to Afghanistan.

The Chinese motives are two fold. First, to block Uighyur militants from entering Xinjiang from Afghanistan. Second, play a larger regional role to safeguard and further its interests as part of the Belt and Road Initiative. According to estimates, China has already provided Afghanistan $ 70 million worth of military aid in the past three years. Last December, Foreign Minister Wang Yi  said that Beijing was open to the idea of linking  Afghanistan to the China Pakistan Economic Corridor. Among the projects discussed in this context are an expressway to link Peshawar and Kabul, a trans-Afghan highway linking Pakistan, Afghanistan and Central Asia.    

According to an Afghan defence ministry spokesman, discussion on the proposal for a base has been on since December. Broadly, he noted, the plan is to have the Afghans build the base with the Chinese helping finance it and also provide the equipment and training for the Afghans. According to some reports, Afghan and Chinese forces are already conducting joint patrols in the area.

The Wakhan corridor itself has not been affected by the war that has been fought in Afghanistan since the late 1970s. But from China’s point of view it is an important point from where Uighyur militants, many of who have escaped from the collapse of the Islamic State in Syria, can enter Xinjiang. The Chinese have for years kept a wary eye in the region because of the presence of the East Turkestan Islamic Movement militants in Afghanistan-Pakistan border region.  It is this factor which has also motivated the Chinese activities in the Gilgit Baltistan region.

The new Chinese ambassador to Afghanistan Liu Jinsong is a familiar face in New Delhi  where he has been an Acting Ambassador who has not hesitated to address tough questions on Sino-Indian relations, including the Doklam issue. According to the South China Morning Post, Liu was born in eastern Zhejiang, but raised in Xinjiang. He was previously deputy director of the international cooperation office and one of the directors of the Silk Road Fund.China has claimed that it faces an increased threat from returning jihadists. One official claimed that the number of those intercepted on the border in 2017 had gone up ten fold, but he refused to provide actual numbers. Last November, the Syrian ambassador to China had claimed that there had been 5,000 or so Chinese fighters in the IS.

As a result of the threat, China has undertaken an unprecedented crackdown on the Uighyurs. Restrictions have been placed on the teaching of their language, as well as on their Islamic religious practices. Last week China’s Defence Minister Chang Wanquan said that Beijing would uphold Xinjiang’s stability and “build an iron wall to enhance border defence.” Most of the police personnel recruited in Xinjiang come from the Han provinces of the country.

Since 2010, China has sharply enhanced its economic aid and investment in Afghanistan. One important area has been a pledge for a  $ 3.5 billion dollar investment in the Aynak copper mines. But to take advantage of Afghanistan’s rich natural resources, there must first be peace and stability in the country. In 2016, as a gesture signalling its interest, China sent a railway train through various Central Asian countries to the northern border town of Hairatan in Afghanistan.  

As a signal of its newly assertive regional policy, Beijing has also sought to cut out a role for itself in bringing stability to Afghanistan. IN December 2017, China hosted the first China-Afghanistan-Pakistan Foreign Ministers’ Dialogue where it expressed its willingness to play a “constructive role” in improving Afghanistan-Pakistan relations and extending the CPEC to cover Afghanistan as well. Earlier this meeting had taken place at a lower level. Last year, China was also part of the revived SCO contact group on Afghanistan. In a meeting attended by the SCO member states at the deputy minister level, the Afghan delegation was led by the deputy foreign minister Hikmat Karzai. Afghanistan is seeking full membership in this organisation. China is also part of the currently defunct Quadrilateral Coordination Group along with Pakistan, US and Afghanistan.

Afghanistan is naturally keen to be drawn into the regional integration plans being mooted by Beijing. It is aware that with the CPEC, Chinese influence has, if anything, increased in Islamabad. And where the US has lost leverage, China has gained. For their part the Pakistanis are fine with the Chinese role because Beijing usually goes out of its way to accommodate Pakistan. More important, an increased Chinese presence in Afghanistan will offset India’s influence. The US is also supportive of China and has said that it would like to encourage all regional partners to play a positive role and support the Afghan government.

Though there is generally positive attitude towards China’s efforts to mediate between Pakistan and Afghanistan, there are questions about its capacity to deal with the situation. With its stance that it does not like to interfere in the internal affairs of other countries, Beijing has lacked the experience of dealing with such situations. Dealing with the complex Afghan situation and the slippery Pakistanis will not be any easy task for the Chinese.

Greater Kashmir February 5, 2018

So many Kasganjs: Prolonged intimidation of Muslims will shred the social and political fabric of India

Listing the books on Xi Jinping’s desk during his annual New Year telecast has become an internet meme. This year, among other books, netizens noticed The Gray Rhino, a bestseller by Michele Wucker, whose theme is the need to recognise and act against dangers – fiscal, social or political – that are in plain sight in front of us, but often ignored.

A major danger confronting this country these days is the fraught communal situation. The violence in Kasganj should alert us to the consequences of using political polarisation for winning elections. In this case, a rally by a group of young men triggered the violence which, the senior BJP leader and governor of Uttar Pradesh Ram Naik has termed as “shameful” and a “blot” on the state. In a Facebook note (since removed) Raghavendra Vikram Singh, the district magistrate of Bareilly, observed a “strange trend” where people entered areas dominated by Muslims and raised slogans against Pakistan. The intention, he implied, was clearly to provoke.

Provocation has taken many forms. On Monday, the Supreme Court issued a notice to the states of Haryana, Uttar Pradesh and Rajasthan on their alleged failure to comply with an earlier court order to check instances of vigilante violence over cow protection. It does not take a genius to figure out that these actions are linked to the politics of our times, call them majoritarian or communal or whatever. People are, of course, free to choose their politics, but they and their leaders urgently need to consider the dangers that are now increasingly manifest.

The partition of the country in 1947 was a Black Swan event. Many of its actors, including some say Jinnah himself, did not believe that it would actually happen. Populist politicians think they are in control of the narrative and one day we discover that they have taken us over the brink. Today, despite the obvious train wreck we confront, there is a strange silence at the apex of the government. Though senior leaders like Vice-President Venkaiah Naidu obliquely, and Ram Naik directly, have raised the alarm.

In 1947, millions were displaced and hundreds of thousands killed. India has not yet recovered from that trauma. A communal breakdown today would result in an entirely different kind of a disaster. Across Uttar Pradesh, Bihar and into Bengal and Assam, Muslims constitute 10-30% of the population with some districts in western UP, east Bihar and Bengal going even higher. These 80 million or so are simply too many to be “sent to Pakistan”. Prolonged violence, intimidation and vigilantism against them would eventually lead to counter-violence. Given their numbers they would not prevail, but the ensuing conflict would surely shred the social and political fabric of the nation.

What is unfortunate here is that India has had one of the most peaceable Muslim populations anywhere. In the past decades, as the high tide of Islamist radicalism lashed the world, Indian Muslims stood out for their moderation born, no doubt, from the environment in which they lived. There were none found in the multi-national Guantanamo prison; the figure of those with IS are less than 10. Taking into account those involved in the Bombay blasts of 1993 and Indian Mujahideen strikes, the number of those killed or convicted for acts of terrorism in the past three decades does not probably exceed 200, an astonishing figure considering our Muslim population is around 176 million. Terrorism here has largely been a state-sponsored event run by Pakistan.

India cannot say it has not been warned. As recently as December 2017, former President Barack Obama called on India to cherish and nurture its well-integrated Muslim population. The Gray Rhino is standing in the middle of the road to our future. It’s up to us to avoid him, or bear the consequences of the crash.

Times of India Feb 3, 2018.

Hosting ASEAN

Last week, India hosted ten ASEAN leaders as chief guests for the Republic Day. This was an  innovative way of showing how important the regional grouping is to us. The chief guest at the Republic Day function has for long been a telegraphic means of conveying the importance Indian foreign policy attaches to a country at a particular juncture. Over the years, we have had the Saudis, Iranians, the French, last year we had the Crown Prince of Abu Dhabi, Many guests have come multiple times. There are some like from Pakistan and China we would not countenance today. The US our good friend was only invited for the first time in 2015.

The media has given its own spin to the event. Briefing the media, an MEA official did not respond directly to a question on weather ASEAN wanted India to play a role against China. Her non-committal response was that “India-ASEAN relationship stands on its own.” Yet the spin given to the report was that the ASEAN wanted India to play a more assertive role in the Indo-PacificActually, if you look at the Delhi Declaration adopted by India and the ten leaders, you will see that the “Indo-Pacific” is not mentioned at all. All that the Declaration says is that the ASEAN and India would cooperate for the “conservation and sustainable use of marine resources in the Indian and Pacific Oceans in accordance with international law, notably the United Nations Convention on the Law of the Seas.” This is the only reference to the Indian and Pacific Oceans. The Declaration has the standard text in the issue of freedom of navigation and overflight and peaceful settlement of disputes under the principles of international law, including UNCLOS. It also reiterated support for the Declaration of the Conduct of Parties in the South China Sea and hoped for an early conclusion of negotiations between China and ASEAN on a Code of Conduct in the South China Sea.

As of now ASEAN is India’s fourth largest trading partner; India is ASEAN’s seventh. It is also a major destination for outbound investments, with some 20 per cent going to ASEAN, mainly Singapore, with whom India has its deepest ties.

ASEAN has been China’s third largest trading partner for the past six years and China has been the ASEAN’s biggest trade partner for the past eight years in a row. More important, many Chinese companies are linked to ASEAN production centres through global value chainsA  big issue in the Indo-ASEAN agenda is the completion of the negotiations for the Regional Comprehensive Economic Partnership which have yet to be completed. Earlier India was seen as the spoiler in the negotiations. But now it is clear that the differing demands of RCEP countries—China, Australia, Japan, Korea, the ASEAN nations themselves—are also responsible for the delay in concluding the negotiations. But if India steps up its political and strategic profile in the region, the ASEAN may be more accommodating to Indian demands in the RCEP negotiations. 

India, of course, has an important trade and investment agenda in the ASEAN region. But given its larger ambitions, it needs to draw in ASEAN into its connectivity plans. But it has not been able to do its bit, for example, in developing the Trilateral Highway, that would link India’s north-east with Myanmar, Thailand and onwards to Malayaia.  But these plans  include not just the developments of ports and roads, but also procedures and agreement for the smooth movement of goods and services. The Japan-India sponsored Asia Africa Growth Corridor will have a meaning only if the ASEAN acts as its eastern anchor.

ASEAN is also interested in connectivity and there are many areas that can be fruitfully explored, including the linkages of India’s east coast ports – Haldia, Paradip, Vizag and Chennai with ASEAN destinations.

Given the strategic nature of the Bay of Bengal, India has, since the 1990s, engaged ASEAN nations in maritime exercises bilaterally and multilaterally. As Modi pointed out in an article published in 27 different ASEAN newspapers, India has no disputes with any of its land or maritime neighbours—Myanmar, Thailand and Indonesia. This provides depth and transparency to ties between us and forms the basis of a deep relationship.

With China ignoring the verdict of the arbitration tribunal on the South China Sea, there is not much evidence of any effort to push back against China’s brazen tactics. The few weak freedom of navigation operations  have done little to assuage ASEAN fears and the US withdrawal from the TPP  undercut whatever hope there was of a coherent policy response to China in 2017.

Over the past decade, the ASEAN has been significantly weakened. Because it takes decisions only by consensus, certain pro-Chinese countries like Cambodia and Laos have weakened its voice, particularly when it comes to standing up to China.

 Modi’s gesture has, no doubt, been seen as helpful by the ASEAN which has for long sought the role of India as a balancer against the pull of China. But New Delhi needs to be careful not to get sucked into a China-ASEAN quarrel. India cannot make up for the disarray within ASEAN in relation to China. What India needs to do is to step up its economic game with ASEAN,  and perhaps political payoffs will follow.

Greater Kashmir January 29, 2018

Modi is rewriting India's ties with ASEAN

When he is not tied up in winning elections, Prime Minister Narendra Modi uses his considerable energy to push the boundaries of India’s foreign policy. In the past weeks, there have been two important aspects of this — the visit to attend the World Economic Forum in Davos and the hosting of 10 ASEAN leaders as chief guests for the Republic Day.

Both were important in their own ways. The Davos timing was not a day too late. In the past year, the world economy has seen a distinct uptick, even while the foremost economy in the world, the US has sought to undermine globalisation. Modi’s strong assertion of the virtues of globalisation comes a year after Chinese premier Xi Jinping made the same point at Davos.

South China dispute

India and China upholding globalisation will impart stability to the global system, something neither can do without. Not to be left behind, US President Donald Trump, too, has shown up at Davos to declare that even he could live with a selective America First approach to the issue.

Equally important was the Modi move towards the ASEAN. With China ignoring the verdict of the arbitration tribunal on the South China Sea, there was not much evidence of any effort to push back against China’s brazen tactics. The few weak freedom of navigation operations did little to assuage ASEAN fears and the US' withdrawal from the Trans-Pacific Partnership (TPP) undercut whatever hope there was of a coherent policy response to China in 2017.

The net result was an effective breakdown of the ASEAN into countries that were openly pro-Chinese, such as Cambodia and Laos; others leaning to China, such as Malaysia, the Philippines, Thailand and Myanmar; and a few wary of Beijing, such as Vietnam, Singapore and Indonesia. There is no doubt that economically, China has deeper relations with the ASEAN.

As of now, ASEAN is India’s fourth largest trading partner; India is ASEAN’s seventh. It is also a major destination for outbound investments, with some 20 per cent going to ASEAN, mainly Singapore, with whom India has its deepest ties.

ASEAN has been China’s third largest trading partner for the past six years and China has been the ASEAN’s biggest trade partner for the past eight years in a row. More important, many Chinese companies are linked to ASEAN production centres through global value chains.

The trade factor

Modi’s efforts to woo the ASEAN may not have immediate economic consequences, but it will definitely be a signal to the ASEAN that India is willing to play the role envisaged by Singapore’s Lee Kuan Yew in the early 1980s maintaining an effective balance of power vis-à-vis China. In an oped he wrote for 27 newspapers, Modi emphasised the cultural and civilisational links between India and the region, and more importantly stressed the fact that though we share land and maritime boundaries with three ASEAN nations, we do not have disputes with any.

This is in contrast to China which has disputes with Vietnam, the Philippines, Brunei, Malaysia and Indonesia. The last named had been somewhat restrained in getting involved in the South China Sea issue but has now decided to make formal declaration that no part of its waters are in the South China Sea. This is in relation to the Natuna islands which the Chinese recognise as part of Indonesia but insists that the two countries have overlapping claims to maritime rights there.

Countering Beijing

India, of course, has an important trade and investment agenda in the ASEAN region. But given its larger ambitions, it needs to draw in ASEAN into its connectivity plans. India has a $1bn (Rs 6,359 crore) credit facility for infrastructure development in ASEAN region as well as a Rs 500 crore project development facility for the poorest ASEAN countries. The Japan-India sponsored Asia-Africa Growth Corridor will have a meaning only if the ASEAN acts as its eastern anchor. There is need to push ahead and actually implement some of the schemes.

Given its proximity to India and its importance in global value chains, ASEAN is in a vital zone of India’s strategic interests. After speaking of Look East, New Delhi now says we are Acting East. So far, India’s performance has been below par. But there is little time to lose. As China’s Belt and Road Initiative advances, there is a  need for countries of the region to provide an effective riposte.

Relations with ASEAN are not an easy job. It is one thing to have good ties with individual countries like Vietnam, Indonesia and Singapore, and quite another to synchronise ties with the regional association with a significant history. India has not been too good in working outfits like ASEAN or, for that matter, the European Union.

Mail Today January 29, 2018