Modi's Vision of Team India, Co-operate Federalism and 14th Finance Commission

Though the word ‘Federation’ doesn’t find a mention in our constitution and it declares India as a Union, albeit India is a Federation with strong center. The circumstances at the time of independence mandated it be so. The times have changed and a policy shift is needed, a radical one. Going by the steps and his actions Modi is taking India successive co-operative federalism. He has been an advocate of the same since the days when he was chief minister of Gujarat. By accepting recommendation of 14^th Finance Commission report he has signaled a clear policy shift to co-operative federalism and competitive federalism too.

Modi has stated that his government is determined to take India in the era of ‘Cooperative federalism’ and ‘Competitive federalism’ replacing the earlier systems of centralized federalism in which the state governments were reduced to the states of subordinates to the central government’s overwhelming authority over all the 29 states and 7 union territories of India. 

He started his journey towards this radical but needed shift with dismantling the Planning Commission and announcing a new body called NITI Aayog, elaborately covered in the previous articles. Now by accepting the recommendations of the 14th Finance Commission headed by Y.V. Reddy, former RBI governor, he has indicated an action plan to implement the same.

This articles doesn’t delve more into the details and recommendations but tries to give reasons why this was needed.  

Preface:

Federation: The best example of a federation is USA which is result of agreement between states and where sates have more autonomy in terms of legal and administrative personality.

Co-Operative Federalism: National and state governments tackle issues together in a cooperative fashion as compared to the unitary system or a system which strong centralizing tendencies. This concept also traces its roots to USA. The center assumes role of a facilitator and states and center work as a team.

Why India needs Co-operative Federalism: We Need a Team India

The diversity of India’s geographic, demographic, political space and also the difference is level of development has made it necessary to give states more freedom with respect to implementing plans according to its needs. For example: A sanitation program that

attempts to solve problem of lack of toilets would be more needed in other parts of India than Sikkim, Goa, and Kerala.

 Under this model the center becomes enabler and states get more freedom and autonomy to make plans according to their needs taking into account their location, demography etc. In words of Narendra Modi “Can we develop a new mechanism, that plans according to India's strengths, empowers states, and brings on board all economic activity, including that which happens outside the government,"

It is worth noting that even in 2012 the parliamentary committees had recommended a serious re-look at Centralized Planning model, Modi has gone ahead with a great emphasis on that.

What the 14^th Finance Commission attempts to do

Modi Government accepted the recommendations of 14^th Finance commission on February 14^th, 2015.

What is Finance Commission?

It is a statutory body (set up in the constitution, Article 280). It deals with following:

1. Distribution of net proceeds of taxes between Centre and the States, to be divided as per their respective contributions to the taxes.
2. Determine factors governing Grants-in Aid to the states and the magnitude/amount of the same.
3. To make recommendations to president as to the measures needed to augment the Consolidated Fund of a State to supplement the resources of the panchayats and municipalities in the state on the basis of the recommendations made by the Finance Commission of the state.

It decides how the revenue will be divided between center and states (Vertical Distribution) and between different states (Horizontal Distribution)

What’s most noteworthy about it?

The salient feature of new fiscal federalism is that there is a ten per cent increase in the share of states in the center’s tax revenue from earlier 32 per cent to 42 per cent. (from the Divisible Pool)

Modi himself stated that the “states are free to change” centrally sponsored schemes and they should “decide for themselves”. 

Governing Principles (weight-age in percentage)

Though the increase which is 10 % is lowered when adjusted against the budget dilutions as there would substantial reductions in the centrally sponsored schemes. But still there is a significant increase in the state’s resources and enhances their resources and also their responsibility and would be expected to display financial prudence and discipline.

It is not that the Planning model would be abandoned, on that things would be clearer when details of NITI AAYOG would be out.

Summarizing:

Though there were voices of dissent, like eminent economist and a member of the 14^th Finance commission Abhijit Sen.  Some ‘enlightened’ voices are saying this Fiscal federalism is only pretense to facilitate the emergence of capitalist market system for the whole country. But as Victor Hugo said, nothing is as powerful as an idea whose time has come.

Including the increased share of devolution from the ‘divisible pool’, now more than 70 percent fund will flow through the Finance Commission .This is indeed a very welcome move that will strengthen the states and give them liberty to choose according to their needs, also making them more responsible.

With 14^th Finance Commission, the question is not of arithmetic (32 % VS 42 %) but signaling of a policy shift, we say great going.

Note : This article was originally published on Narendra Modi Portal, TheKarmayogi...Please check it for more articles on Narendra Modi and his plans for developing India

http://thekarmayogi.com/modi-accepts-14th-finance-commission-report-gives-more-fiscal-autonomy-to-states/

  

Narendra Modi plays Buddhist card in South East Asia and East Asia diplomacy, checkmates China

Soft Power of a country in most crude terms is how good it is in telling its stories. Modi, like a true statesman knows how to play the cards in his hands. Faced with great challenges of mammoth proportions in our neighborhood, he has now asserted India’s Buddhist linkages to enhance India’s soft power in the world particularly in South and South East Asia. To a curious watcher of India’s foreign relations it will be very perplexing as to why India has not played its Buddhist linkages with the world so far. Read the passages below to find why this is a well-timed and inevitable step now.

Chinese Context

Add caption

China, back in 2006 hosted something called “First Buddhist Forum”, an initiative of the then party secretary and now the president Xi Xingping. China’s active promotion of Buddhism in recent years has generated some alarm in New Delhi. China held the first World Buddhist Forum in 2006 at Hangzhou.

I find it very amusing as China is a country where communists call all the shots and religion is not very encouraged if not abhorred. Marx once called religions opium of mankind. As a country that doesn’t have a very good relationship with opium (read Opium Wars) it becomes even more puzzling. It was an effort of Chinese to strengthen their soft power, an area where they cannot complete with India.

As part of its Buddhist diplomacy, China has created a World Fellowship of Buddhists (WFB) which meets every year and provides liberal grants to Buddhist groups across the world.

Modi asserts India’s Buddhist links

Despite being the birthplace of Buddhism (religion not Buddha himself, he was born in present day Nepal), India receives barely .005 percent of Buddhist tourists in the world. This should be enough to shift focus to address this now.

 Modi plans to play the Buddha card, our country’s first ambassador to the world and undeniably the most admired one. A Chinese scholar once said that India had colonized China year ago with Buddhism without sending even one soldier. This is in line with India’s action east policy. With this there is definite shift in India’s East Asia Diplomacy.

Narendra Modi has already hosted hosting a dialogue on Vinaya (code of conduct) between high-ranking Theravada monks from Sri Lanka and counterparts of the Nalanda tradition — the first dialogue at this level between the two Buddhist traditions. Modi had met the Maha Nayakas during his visit to Sri Lanka where he had also offered prayers at the sacred Mahabodhi tree.

Modi’s personal interest in Buddhism was reflected in his step to restore the rich Buddhist heritage of Gujarat.  

 Historical context

Our magnificent country with heritage going more than 5000 years in the past has left a deep imprint on cultures all over the world. Cities with names sounding similar to Ajodhya are found in Thailand (Ayutthaya) and Indonesia (Yogyakarta). Angkor Watt in Cambodia and Borobudur in Indonesia also speak of India’s influence in the ancient times.

The Buddha has always figured prominently in India’s international engagement. It was prominent in the opening ceremony of Commonwealth Games too. As the land from where Buddhism (the religion, not Buddha himself, he was born in present day Nepal) was born and spread in the world, India did not have to work too hard to make it part of its cultural engagements with the rest of the world.

 One out of six tourists to India visits Bodh Gaya. India’s support for Dalai Lama since 1959 has been an enduring source of tension with China.

Action East Policy and its Buddhist initiatives

The work on phase-I Buddhist Tourist Circuit has gathered pace. As a native of Uttar Pradesh which has many Buddhist sites, I see an increase in foreign tourist traffic. Now 1 in 6 tourists visits Bodhgaya (Bihar). This also includes Lumbini in Nepal where the Buddha was born, Bodhgaya where he attained enlightenment under the Bodhi tree

Sarnath in Uttar Pradesh where he delivered his first sermon, Rajgir in Bihar where he lived and taught, Nalanda which became the centre of Buddhist learning and teaching. All these are already part of the proposed Buddhist circuit.

Kushinagar in UP where he departed from the world, Kapilavastu, Vaishali in Bihar where he delivered his last sermon, Sravasti in UP where he spent 24 rainy seasons at Jetavan monastery and Kausambi where he preached; are all part of India’s Buddhist Diplomacy.

India as the birth place of Buddhism has not used its soft power to its utmost potential. Sikkim in India is the home to all sects of Buddhism and connects the three sects of Buddhism namely; The Mahayana, The Hinyana, Thervada and The Vajrayana.

Believers from several Buddhist countries like Bhutan, Bangladesh, China, Japan, Myanmar, Sri Lanka, and Thailand have set up monasteries around the Mahabodhi temple in Bodhgaya for their pilgrims

India can use these to attract Mahayana Buddhists from China, South Korea, Japan, Taiwan, Singapore and Vietnam, Theravada Buddhists from Cambodia, Thailand, Laos, Sri Lanka, Myanmar and Vajrayana Buddhists from Tibet, Mongolia, Bhutan, western China, Russia and Nepal.

Countering Chinese Rivalry in Buddhist countries

Narendra Modi indicated this change by choosing Bhutan as his first official visit abroad and then to Nepal, where Buddha was born. His first official visit outside South Asia was to another Buddhist country, Japan. In his outreach to leaders in the subcontinent and Asia, from Nepal to Japan and China to Myanmar, Modi has projected Buddhism as one of India’s bridges to these nations. Incidentally, these are also the nations where China and India are engaged in contest for influence.

To the self-proclaimed secularists his overt expression of his Hindu and Buddhist religiosity may be controversial but I do not see a problem with that. After all Italy also tried to use Christianity links to seek release of its marines. Kerala has a significant Christian population. In fact, even China used Hinduism card by giving access to Man Sarovar via an easier route.

Summarizing

Buddha has always been very prominent in India’s foreign policy, however this aggressive shift has come in light of China’s assertion of projecting itself as a bridge between the Buddhist countries. It is something India would not let happen as the origin place of Buddhism. Some may object to using religion as a tool of foreign policy but as explained in the preceding passages, it is more about our heritage and our identity as the Birthplace of Buddhism that no country can snatch from us.  Buddha diplomacy can be an effective tool and soft power for India’s engagement with South Asia, South-East Asia, East Asia and even China which share an interest in Indian mysticism.

 Note: This article written by me was originally published on a portal on Prime Minister of India Narendra Modi

You can find my profile at : http://thekarmayogi.com/team_member/sachin-diwakar/

Why Indian ocean is called ocean of strategy

As Narendra Modi embarked on his official trip to three Indian Ocean sojourn, all eyes are now set to the changing dynamics of the Indian Ocean. Srilanka, also called the Emerald Island is located very strategically in the Indian Ocean. Sri Lanka is barely a few tens of miles from the vital sea routes. It is located almost mid-way between the two choke points of the world, the Strait of Hormuz and the Malacca Strait. His visit to Srilanka, first for an Indian Prime Minister in 28 years has ushered a new phase in India-Srilanka relations. Ironically, Srilanka is just 27 miles from India but it took 28 years for a Prime Minister to visit Sri Lanka. Being Sri Lanka’s only neighbor, India should have sought to engage Sri Lanka more. But that was not be. In Sri Lanka, this snub was seen as the government’s attempt to appease the Tamil sentiments. Narendra Modi is there to make up for the last decade. Unfortunately in the same period China had made huge inroad. But all that is set to change now. China has already made huge inroads in our neighborhood. Seen in this context this visit of Narendra Modi becomes extremely important.

This visit becomes even more important in context of increasing Chinese influence in Sri Lanka.
Of late, China has been strengthening its relations with littoral states (Bordering the Indian Ocean) in the Indian Ocean Region, particularly Sri Lanka, as part of its “String of Pearls” diplomacy.  

Sri Lanka had initially offered the Hambantoota Port development project to India but India backed off and seizing the opportunity China stepped in. It would be regretted for long in the Indian Diplomatic circles. Last September, two Chinese (non-nuclear) submarines docked at a Sri Lankan, much to displeasure of India. Though it was said by the Chinese that it was just a usual stop but everyone knows that it was a cover up. Such projects, like the Gwadar project in Pakistan are often set up with military goals in mind.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. 

Modi Government launches “Soil Health Card” Scheme, addresses many Challenges

In a brilliant move to address multifold problems of Indian agriculture Modi government on Thursday launched a nationwide scheme “Soil Health Card” from Suratgarh in Rajasthan. Indian agriculture has not witnessed the optimum growth potential it is capable of achieving. While the problems are many, a large part of it has to do with irrational use of fertilizers. With this well needed move the Modi government aims to cut the fertilizer subsidy bill and subsequently the fiscal deficit. 

The proposed “Soil Health Card” will entail the characteristics of soil, both Physical and Chemical. Physical characteristics include texture, compaction, color and depth.

The Soil Card Scheme proposes increasing the soil testing laboratories from about 1200 to 4700. This includes increasing mobile laboratories as well. 

Soil testing laboratories typically charge 150 rupees for basic parameters. For micro nutrients it can cost 100 rupees per parameter.

Chemical characteristics include PH value and the presence of nutrients like Nitrogen, Phosphorus, Potassium, Calcium, Iron, Zinc, Copper and Sulphur etc.

The quality and yield of the crop depends significantly on the supply of these nutrients from the soil. Irrational use of fertilizers not only impacts the crop quality and yield negatively but also increases the Fiscal deficit as Fertilizer subsidy is a big part of it. Once the farmer has beforehand information about the nature of soil, he/she can make appropriate use of fertilizers and manure. For instance, if the soil is Acidic then Lime based nutrients can be applied. Similarly for Alkaline and Saline soils gypsum based fertilizer should be applied. It will also help in decreasing the import bill on coal and other inputs like Gypsum which are imported from abroad. 

Similarly it will help the farmers make more informed and rational choices. The use of fertilizers also depends on the choice of crop. For Rice, Nitrogen based fertilizer is required more, whereas for Pulses Phosphorus is more required. Similarly for Potato, Banana and Pineapple, Potassium is indispensable. Further, this could lead to customized products tailored for specific regions in other words growing crops which are suitable for the soil and climatic conditions of the region. Punjab and Rajasthan have started facing problems because of unscientific use of fertilizers. Punjab in particular is worst hit by it leading to many health problems as well.

 As underlined by the recent Economic Survey, the ratio of fertilizer use is heavily flawed. The primary nutrients of the soil are Nitrogen, Phosphorus and Potassium and the ideal ratio of use (in general, it may vary according to locality) is 4:2:1. However the actual ratio (as per Economic Survey 2013)   8:3.2:1, in other words Urea is being used excessively, Urea is a Nitrogen based fertilizer. This also increases Coal import because Coal is used as fuel while making Urea, thereby upsetting the Current Account Deficit. Natural gas is also used in manufacture of fertilizers. Also this is subsidized by the government so the excess use of it increases the Subsidy bill of the government. Fertilizer subsidy is bigger than Fuel subsidy. 

Hence it is a very well thought about move that will not only help our farmers in achieving the maximum potential but also decrease the Fiscal Deficit and Current Account Deficit by rationalizing the use of fertilizers.

Indian agriculture still employs about 55% of our workforce. Many people still practice subsistence based agriculture, in other words they produce mostly for their own use and not much left to be sold in the market. Though Modi Government has made grand plans to make India a manufacturing hub but in this process we cannot ignore agriculture sector. Agriculture provides the raw material to be used in many other sectors like textile. 1 % growth in agriculture production leads to more growth in many other sectors. Manufacturing sector will take time to be robust enough to employ our huge workforce. Furthermore, we would always need a vibrant agriculture sector as we cannot rely on our food needs on any other country/countries.

We need to substantially increase our food production, make it diverse and also change its nature from subsistence based to commercially viable. This would need providing the farmers adequate support, which has been there but has not been rationalized. Now, with Narendra Modi’s pragmatic leadership we hope that agriculture would stop lagging and become revenue earning for the country.

As explained in the passages above, the intention of the government is to improve soil health and contain the mounting fertilizer subsidy bill, which is fully provided for and comes to 100,000 crore annually. Two third of this amount is Urea alone. 

With this decision, Modi Government has sought to address many challenges. Eyeing the Subsidy bill, the Fiscal Deficit and the Current Account Deficit as well.

The vision of Narendra Modi is commendable, it has been rationalizing the resource base of the country to remove the impediments and make the best use of available resources. 

For More such Articles on India check this link : 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.