Narendra Modi upsets Chinese maritime ambitions in Indian Ocean

              अनादि अनँत केवलँ. नमामि राष्ट्र भारतँ.

The pretext to this piece of writing is Narendra Modi’s statement and vision about Indian Ocean “To me the blue chakra or wheel in India’s national flag represents the potential of Blue Revolution or the Ocean Economy. That is how central the Ocean Economy is to us”

Prime Minister Narendra Modi’s three-nation Indian Ocean tour stands in testimony to this region’s critical importance for Indian security. He has once again upset China’s silk route plans and its maritime ambitions. If China gains the upper hand in the Indian Ocean region, it will mark the end of India’s great-power ambitions. India would merely a regional power which would be detrimental to our ambitions. In a major fillip for India in the Indian Ocean, we bagged two important ''infrastructure development rights'' for two islands in the region - Agalega from Mauritius and Assumption from Seychelles. New Delhi marked its Indian Ocean presence with Modi offering to set up joint working groups with the two blue economies in the region to harness potential for economic cooperation.

Underlining that the Indian Ocean Region sits atop policy priorities, Prime Minister Narendra Modi on Thursday said the time had come for a “strong grouping around the Indian Ocean” and that India will “pursue with this new vigor in the years ahead”.Modi said his government’s vision for the Indian Ocean was rooted in “advancing cooperation in our region” and to use “our capabilities for the benefit of all in our common maritime home”.

Furthermore, In Seychelles Narendra Modi unveiled the Plaque and Operationalized the Radar for CSRS (Coastal Surveillance Radar System) - India-Seychelles Cooperation Project. It has already caused much tension in our western and Eastern neighbor.

Why Indian Ocean is central to our Security

The readers of Indian history would well realize that Indian Ocean has been pivotal in India’s growth. Indian Ocean is the only ocean in the world name after a country. In words Nehru “History has shown that whatever power controls the Indian Ocean has, in the first instance, India’s sea-borne trade at her mercy and, in the second, India’s very independence itself.”

In past centuries whichever power had control over its sea lanes more or less controlled India's trade. First it was the Portuguese (15th century) then English. Back in 1686 when British tried to assert their power in India for the first time they were beaten by Mughals but still their rights to trade in India were not taken away (which were issued by Jahangir in 1686), largely because Mughals were aware that British could hurt India's trade in the Ocean as they were controlling it at that time. Indian Ocean is the only ocean in this world named after a country and it happened for a reason.

Furthermore, in a letter to London a high ranking official in India said, back in 19th century that we will be able to keep India under our control until we are the most supreme naval force. It happened just the way he said. 1946 there was a mutiny in Indian's Navy and that has been underplayed by our historians. British had realized helped by many other concurrent events that now their time was over.

Indian Ocean: Changing Dynamics

As Indians we associate a lot of pride with it. It was through its sea routes that India’s trade happened. A trade that was once called the trade of the world and helped us emerge as the largest economy pre industrial revolution times. Keeping in mind the increased focus of China and its ambitious but surreptitious designs like Maritimes silk route, it has become imperative for India to shift its focus to Indian Ocean as well, if not more than certainly as much as its land frontiers.

Narendra Modi visited Indian Ocean region and its small but strategically located islands. He covered Seychelles, Mauritius and Sri Lanka. A day before the Prime Minister began his tour to the Indian Ocean Region, both the battle group along with warships from Western fleet, armed with fighter jets, helicopters, reconnaissance planes, missiles and other weaponry reached Kochi. It marks an ambitious and well-timed departure from its earlier stand “Indian Ocean as a Zone of peace”. Narendra Modi and his team of advisors led by NSA Ajit Dhoval realize it well that theory cannot always be put to practice.

All these three nations are considered vital for maritime security, particularly with the ever present pirates in the region. The Indian Ocean is going to be the most important ocean with concentration of most important energy routes between Strait of Malacca to the Gulf of Aden, an area which is full of maritime activities as 70 per cent of the oil container traffic passes through.

Off late, China has been deepening its relations with littoral (bordering)  states to the Indian Ocean Region, particularly Sri Lanka, Mauritius and Seychelles as part of its String of Pearls diplomacy to counter India’s Look East Policy, which is often described as Encircle China policy by Beijing.

The Indian Ocean promises to shape the wider geopolitics and balance of power in Asia and beyond. India, in context of Chinese plans like Maritime Silk Route and its ‘development push’ in Indian Ocean region needs to act fast.

We must capitalize on our geographic advantage

Blessed by a very suitable Geography and its advantages India has an inherent maritime advantages. Due to our troubled relation with Pakistan and China our maritime advantages have not been properly utilized, we have not created deep assets in the region. To make matters worse India diplomatically neglected the Indian Ocean region in the 25-year period from 1989 till now. India’s long neglect has become China’s strategic gain. Narendra Modi is the first prime minister to visit Seychelles in 34 years and Sri Lanka in 28 years.

China helped by its deep pockets has sought to ‘help’ the littoral states in the region, it has even tried to seek possibilities of a naval frontier to neutralize India’s natural geographic advantage.

Alongside developing strategic assets in the region India needs to significantly modernize its naval power. India should have the power to holdback container traffic to China choking its Energy lines should a war be imposed on us.

Takeaways for India

Ø  India signed an MoU with Mauritius for setting up and upgrading infrastructure for improving sea and air connectivity at the outer island of Mauritius

Ø 
India signed another MoU with Mauritius which will provide an extensive framework for cooperation in the field of ocean economy. It will seek opportunities in the field of marine resources, fisheries, green tourism, research and development of ocean technology, exchange of experts and other related activities.

Ø  Modi also commissioned the India-built coast ship Barracuda in Mauritius on the second leg of his three-nation visit.

Ø  In Seychelles Narendra Modi unveiled the Plaque and Operationalized the Radar for CSRS (Coastal Surveillance Radar System) - India-Seychelles Cooperation Project. It will add a lot to India’s surveillance capabilities in the region.

Summarizing

Acting to correct the loss of the past and the time wasted on account of previous government’s failure, Modi government has sought to address the issue by capitalizing on cultural links helped by his famous Charm offensive.   Taking a note India’s primacy of Indian Ocean for India's security and for maintaining peace and stability in the region Narendra Modi has stressed  that the ''Indian Ocean was and is  going to be India's Ocean''. The competition for influence in the Indian Ocean is pivotal to our global power ambitions. This is a contest India cannot afford to lose.

For more such articles go to : http://thekarmayogi.com/

IMF Chief says India as the “bright spot” of the global economy

IMF, International Monetary Fund chief Christine Lagarde has lauded India as the “bright spot” of the global economy on Monday ahead of talks in New Delhi with Prime Minister Narendra Modi. She was on a two day visit to India, on course of which she met RBI chief, Finance Minister and man at the mission Narendra Modi. IMF chief went on to say that India’s economy is in right hands and appreciated Narendra Modi’s efforts to introduce the best practices followed in the world. She appreciated India and Modi for being well ahead of other countries in implementing Basel 3 norms for standardizing banking systems. 

She remarked, “Among the emerging markets India is a bright spot”. She also went on to say that India is reaping benefits of good policies and policy announcements. She was underling the growth centric policies of Modi government. She urged Modi to do more efforts to open up the economy, she said India had the “opportunity to become one of the world's most dynamic economies” with growth running at above seven per cent.

The International Monetary Fund raised its forecasts of India’s economic growth to 7.2% instead of 5.6% as predicted earlier for the current fiscal year, which runs until the end of March. It stands in testimony to Modi’s policies and leadership that growth estimates are being revised many a times within a year. OECD, the Organization for Economic Co-operation and development has also increased India’s growth estimates.

IMF chief’s observations about India

1)      Team Modi and RBI sound Macroeconomic management:  The government and RBI working together on shifting the focus to good macroeconomic management, transparent government, and inclusive development. She appreciated India’s bold step of inflation targeting.

2)       Growth centric Budget: She called Modi government’s budget growth centric. "It appears that the broad path of reform is established. Now implementation has to follow - as we know, success begets success," she said. She appreciated the budget for its focus on fiscal consolidation and focus infrasturuce development. As fiscal deficit shrinks, Indian banks could shift their focus to more lending to the private sector.

After adjusting for differences in purchasing prices between economies, India's GDP (PPP) will exceed that of Japan and Germany combined by the year 2019 if India follows on the path and implements the policy decisions. She said adding it will also exceed the combined output of the three next largest emerging market economies —- Russia, Brazil, and Indonesia.

Since formation of Modi government inflation has fallen to around five percent, subsequently the interest rates have come down leaving banks with more money to lend.  

Highlights of her observation about India’s Leadership

"My dialogue with Indian leaders has convinced me that the conditions are ripe for India to be a key engine of global growth," Lagarde said in a statement on the conclusion of her two-day visit to India.

“This is India’s moment and India should seize this moment to build a bright economic future of rapid, inclusive, and sustainable economic growth and macroeconomic stability for many years to come"

Expectations and suggestions of IMF

Lagarde lauded Modi's drive to make India a major manufacturing hub and an easier place to do business. She also urged Narendra Modi to open Indian economy more to the world. 

1.        “The economy should be opened more fully to the world, and there's a good case for removing domestic constraints on growth, especially in energy, mining and power,” she said.

2         “Further reforms of India's complex labor laws to encourage young job-seekers. Lagarde said, "Urgent remedies are needed. A good starting point is to make Indian labor markets more flexible."

3         Expressed concerns about falling female participation in workforce.

4          Expects more easing of land acquisition and other clearances, will help revive the investment cycle and achieve faster growth.  More needs to be done expediting clearances and establishing a stable regulatory regime so that the private sector can invest. These issues are on the radar of policymakers, which is promising, they must be on the action list," she said.

5         She said that further subsidy reform and implementation of the goods and services tax (GST).

Brace for future shocks from changes in US interest regime

She also said that emerging economies like India face greater risk of high market volatility and sudden outflow of capital as the United States is gears up to hike interest rates by the end of this year, which will cause flow of capital as investment in US will be more rewarding. However, she also remarked India geared to face the situation as its economy is in right hands.

Urgent remedies are needed to push growth, she said, adding that "a good starting point is to make Indian labor markets more flexible". Said the former French Foreign Minister.

 IMF chief warned of high market volatility and capital outflows when US Fed hikes rates next time and asked India and other emerging markets to be prepared for such an eventuality.

Summarizing

In light of the encouraging observations from IMF Chief and OECD, the two giants, we can be certain that our economy is being managed by the best brains aided by a visionary and decisive leadership. We have set the tone right for next 10 years, what is important now is implementation part. We are hopeful that Modi will rock that as well.

China worried as Modi deftly brings US-India relationship back on track

As expected the most wary and attention worthy response to the visit of US president Barak Obama came from China. Almost every one of us would have expected the Pakistani response to be along the lines it eventually took. However Chinese reaction to the Barak Obama visit was what the foreign policy watchers were waiting for. The State run Chinese daily Global Times in its report cautioned India to not fall in ‘The Trap’ laid by the West.

 It remarked that the visit of US president in more symbolic and devoid of much significance. They do have reasons to worry. The Chinese leadership through this state run newspaper has attempted to give an unsolicited advice to India. This calculated response failed to hide their anxieties with regards to US forging a strategic relation with India. Strategic relationships are formed keeping in mind long term goals. With this master stroke Narendra Modi has now taken another step towards being among the most influential statesman of the time.

India-US relation as remarked by Barak Obama in his 2010 visit is destined to be one of the most important relationships of this century. US leadership played a big role in getting the waiver at the Nuclear Supplier Group. George Bush worked overtime to get a breakthrough for India by getting the Nuclear Deal done in 2008. Getting that deal done required him to phone many head of states to get the hurdles cleared. The Significance of that deal is huge for India. It was at time that Chinese became wary of India-US partnership and went to the extent of saying that US is trying to include India in its containment of ‘Peaceful Rise of China’. Though that peace is nowhere to be seen in East China Sea.

Unfortunately the deadlocks could not be cleared in India after the 2008 deal. USA and its allies had reservations on the Nuclear Liability Bill of India. The tremendous progress made was halted when UPA government got into troubleshooting mode after unearthing of several scams. US believed that India is falling short on its commitments. By 2013, the momentum was long gone and after the Devyani Khobragade incident the relations were at its deepest ebb.

It was in this time when Narendra Modi made his grand entry. He has to be given all credit for his pragmatic and statesman like approach. Despite not possessing much of experience on foreign relations front he has reinvigorated India’s moribund foreign policy. Putting the disappointments of the past (read his denial of Visa), he has breathed new life into India’s foreign relations in such a short time.

It is now understood that many differences between the two countries have been ironed out and with patience and mutual understanding the rest would be ironed out soon. It is believed that India was able to get US on board with regard to surveillance of its nuclear reactors and at the same time not diluting its security concerns and national interests. Though these things are not made public but going by the assertion in foreign secretary’s statement, it does appear that due caution was exercised in getting the deal done in India’s interests. This is a big achievement for Narendra Modi and India’s Diplomatic corp.

In this global age where the economic and strategic interest do not always converge. In this context, China and USA though rivals are doing a lot of trade with each other.  India is playing its card well and the credit goes to Narendra Modi. This is not a zero sum game. China-US trade dwarfs the US-India trade yet the Chinese are so wary of US investment. It appears that that they are more concerned at the agreement in the defense sector

China has often used its ‘All Weather Friend” Pakistan as a counter balance to India. This ‘All Weather Friend” is a euphemism used for a relationship which is grossly unequal.  China now alleges that India is joining West’s effort to contain China and its ‘peaceful rise’. China says that differences between India and USA are as large as the distances between the two countries. China needs to be reminded of its former premier Le Kekiang statement that he gave in India in 2013, that big countries have to keep good relations other big countries. China’s concerns are baseless. It is India’s right to take its relationships forward as per the need of time. It also need to be reminded that India did not act like China when talks of a new world order led by China and US were doing rounds.

China tried to encircle India by its famous string of Pearls theory manifested in ports around India. In recent months they have had to suffer setbacks. The new government in Srilanka has stated that it will reviews the procedure undertaken while giving the Hambantoota port to China. Two Chinese submarines have docked at these ports. New Sri Lankan head of state is going to visit India in February. Another important development has been in Myanmar where democracy can upset many Chinese equations as the tempers there are very anti-China now.

Narendra Modi with his “Action East policy” is setting the right tone for India in our neighborhood. On the other hand his tremendous success on India and USA relationship is indeed a masterstroke.

Chinese need to relax and not offer us any unsolicited advice with regards to what should be our trajectory of relationship so far as USA is concerned or for that matter our relationship with Japan.

Modi has been playing many masterstrokes on the foreign policy front and has joined league of statesman now with his deft handling and balancing of our economic and diplomatic relationship with USA and China.