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Economics International Relations

India-EU Free Trade Agreement

The third round of free trade negotiations between India and the European Union (EU) recently concluded. The two parties are also negotiating an investment protection agreement (IPA), which will include investment protection standards and an independent dispute resolution mechanism under international law.

Why is the EU pursuing an Investor Protection Agreement?

  • India’s regulatory issues: Despite the government’s admirable desire to welcome them, foreign investors in India have frequently encountered numerous regulatory issues with the government.
  • Several foreign corporations, including Vodafone, Cairn Energy, Nissan, White Industries, Telenor, Nokia, and Vedanta, have sued India to enforce their rights under bilateral investment treaties (BITs). This is the primary reason why the EU is seeking an IPA with India.
  • India’s history of changing laws unilaterally: EU investors are protected by Indian law. However, Indian law can be changed unilaterally to the detriment of the investor.
  • Slow legal process: The Indian judiciary is excruciatingly slow to resolve disputes. As a result, the desire for international legal protection.

Hurdles in the finalization of INDIA-EU treaty

  • Non-justiciable tax regulations: India wishes to extend the scope of the treaty’s taxation provisions by making tax-related regulatory measures non-justiciable. Given India’s recent history of tax-related investment disputes with Vodafone, Cairn Energy, and Nissan, the EU finds this proposition difficult to accept.
  • Two-tier court system: According to the EU’s investment proposal to India, a two-tier court-like system with an appellate mechanism and tenured judges would be established to resolve treaty disputes between investors and the state.
  • The EU’s MIC proposal is linked to the EU’s international stand for the establishment of a multilateral investment court (MIC), for which negotiations are currently underway at the United Nations Commission on International Trade Law (UNCITRAL). The MIC aims to address the shortcomings of the current arbitration-based system for resolving investor-state disputes.
  • Lack of clarity on India’s part: India’s stance on establishing an investment court-like system is unknown. India has not publicly contributed to the ongoing UNCITRAL negotiations to establish a MIC.

Issues of MFN and FET

  • The EU wants MFN status: The EU’s investment proposal includes a most favored nation (MFN) provision to ensure that EU investors are not treated differently than other foreign investors.
  • India refuses to include MFN: On the other hand, India’s position is that the MFN provision should not be included in its investment treaties due to concerns that foreign investors will use the MFN clause to engage in disruptive treaty shopping. Negotiating for a qualified MFN provision rather than excluding it entirely is the solution to such disruptive treaty shopping.
  • Fair and equitable treatment: The EU investment proposal includes a fair and equitable treatment (FET) provision, which is absent from the Indian 2016 Model BIT.
  • Making the state accountable: The FET provision, for example, protects foreign investors by holding states liable if they breach specific assurances made to an investor to induce investments on which the investor relied while making the investment.

IPA: the need of the hour

  • Overall FDI to India has been stagnant for the past decade, hovering around 2% of GDP. While the EU’s share of foreign investment stock in India increased from €63.7 billion in 2017 to €87.3 billion in 2020, it remains significantly lower than the EU’s foreign investment stocks in China (€201.2 billion) and Brazil (€263.4 billion).
  • The Negative Effects of BIT Termination: According to recent research, India’s unilateral decision to terminate BITs has had a negative impact on FDI inflows to the country.
  • IPA required to attract FDI: India requires the IPA with the EU to attract FDI in order to reach the aspirational target of becoming a $10 trillion economy by 2030.

@the end

India must first clean up its own house. The Parliament’s standing committee on foreign affairs has also recommended that India review the 2016 Model BIT.

Source: https://indianexpress.com/article/opinion/columns/india-eu-free-trade-agreement-negotiations-8343807/
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Economics International Relations

NITI Aayog Warns Against Severing Trade Ties With China.

In the midst of calls to cut trade ties with China over border violations, a former NITI Aayog Vice-Chairman has stated that doing so would imply sacrificing India’s potential economic growth.

News

  • Panagariya stated that both countries are capable of engaging in trade sanctions.
  • The ability of a $17 trillion economy (China) to harm a $3 trillion economy (India) is far greater than the opposite.

Why?

  • Between April and October of this fiscal year, India and China’s trade deficit, or the difference between imports and exports, reached $51.5 billion.
  • The deficit in 2021-22 increased to $73.31 billion, up from $44.03 billion in 2020-21.

The Hindi-Chini buy buy

  • China supplies one-third of India’s machinery and nearly two-fifths of its organic chemicals.
  • Other items where China accounts for more than 25% of Indian imports are automotive parts and fertilizers.
  • Several of these products are used in the production of finished goods by Indian manufacturers, effectively integrating China into India’s manufacturing supply chain.
  • For example, China supplies nearly 90% of certain mobile phone parts to India.

India’s export to China

  • China is an important partner for India even as an export market.
  • China is India’s third-largest export destination.
  • At the same time, according to the Federation of Indian Export Organizations, India accounts for slightly more than 2% of total Chinese exports (FIEO).

Should we worry about this?

  • Trade deficits/surpluses are merely accounting exercises, and having a trade deficit against a country has no effect on the domestic economy.
  • In this context, India’s trade deficit with China should not be considered in isolation.
  • For example, pharmaceuticals that India exports to the rest of the world require ingredients imported from China.
  • Chinese imports of Indian seafood are one area that has recently seen strong growth and has room to expand in the future.

So, a trade deficit is beneficial?

  • Certainly not. The persistence of trade deficits across all countries raises two major concerns.
  • Foreign exchange reserves are available to “buy” imports.
  • Inadequate domestic capacity to produce efficiently.

Can we ban trade with China?

Ans. Certainly NOT!

  • It will disproportionately affect the Indian poor, who are more price sensitive. For example, if Chinese TVs were replaced by either more expensive Indian TVs or less efficient ones, wealthy Indians may opt for the more expensive option.
  • It will penalise Indian manufacturers and exporters: Several Indian businesses import intermediate goods and raw materials, which are then used to produce final goods for both the domestic Indian market and the global market (as Indian exports).
  • The pharmaceutical industry may be the hardest hit: For example, China accounted for roughly 68 percent of the nearly $3.6 billion in ingredients imported by Indian drugmakers to manufacture several essential medicines.
  • The ban will have little impact on China: According to United Nations Conference on Trade and Development (UNCTAD) data for 2018, China accounts for 15.3% of India’s imports and 5.1% of India’s exports.
  • Chinese money invests in Indian unicorns: In recent years, India and China have become more integrated. Chinese capital, for example, has infiltrated India’s technology sector, with companies such as Alibaba and Tencent strategically investing billions of dollars in Indian startups such as Zomato, Paytm, Big Basket, and Ola.
  • India’s policy credibility will suffer: It has also been suggested that India should breach existing contracts with China. This could harm India’s efforts to attract foreign investment.

China our Frenemy

  • The first thing to realize is that turning a border dispute into a trade war is unlikely to solve the problem.
  • Worse, given India’s and China’s respective positions in global trade and relative to each other, this trade war will harm India far more than China.
  • Again, these measures will come at the worst possible time, as the Indian economy is already at its weakest point in history, facing a sharp GDP contraction.

Way ahead

  • Panagariya proposed expanding trade with other trading partners more quickly rather than cutting it with Beijing with a blunt instrument like trade sanctions.
  • We should seize India’s excellent growth prospects for the next decade and focus on expanding the economy as quickly as possible.
  • When we become the third largest economy, our sanctions threats will have more credibility.
Source: https://www.business-standard.com/article/finance/niti-aayog-s-panagariya-cautions-against-cutting-trade-ties-with-china-122122200271_1.html
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International Relations

Court determines that the UK’s proposal to deport Rwandan asylum seekers is legal

The London High Court’s decision that Britain’s proposal to send migrants to Rwanda is legal is a success for Prime Minister Rishi Sunak who has made a high-stakes political commitment to address the unprecedented number of migrant arrivals.

Immigrant’s crisis in UK

  • The number of migrants and asylum seekers making the perilous journey between Calais, France, and Dover, England, has significantly increased since 2018.
  • Most of these migrant workers and asylum seekers are from developing nations like Iran and Iraq or war-torn nations like Sudan, Afghanistan, and Yemen.
  • These border breaches represent an immigration issue for Britain, which has taken a tough stance against illegal immigration.
  • Under “exceptional circumstances,” anyone’s citizenship may be revoked without warning by the British government under the Nationality and Borders Bill, 2021, which is still being debated in the UK.
  • The Rwanda agreement operationalizes one of the Bill’s goals, which is to discourage unauthorised entry into the United Kingdom.

The Rwanda Deal: What is it?

  • A Memorandum of Understanding (MoU) was signed between the two governments that is known as the Rwanda Deal or the UK and Rwanda Migration and Economic Development Partnership.
  • Rwanda will agree to accept asylum seekers who enter the UK on or after January 1, 2022 through illegally facilitated and illicit cross-border migration as part of this agreement.
  • Asylum seekers will wait in Rwanda as a holding facility while the Rwandan government decides whether to grant their requests for asylum and resettlement there.
  • On its side, Rwanda will accept everyone who is over the age of 18 and does not have a criminal history.

Rationale of the deal

  • The agreement aims to curb “people smugglers,” who frequently charge vulnerable migrants exorbitant fees to board unsafe boats from France to England, frequently resulting in horrific drownings.
  • The UK claims that this approach to the migrant problem is compassionate and intended to take aim at the criminals that control these unauthorised crossings.

What will the scheme cost the UK?

  • As part of a “economic transformation and integration fund,” the UK will provide Rwanda £120 million in addition to covering the operational expenses and an as-yet-undetermined sum for each immigrant.
  • The UK currently spends £4.7 million a day to house some 25,000 asylum seekers.
  • This was estimated to be worth £430 million per year at the end of 2021, with a predicted increase of £100 million in 2022.
  • By contracting out the hosting of these migrants to a third country, the Rwanda Deal is expected to lower these costs.

Will the Rwanda Deal solve the problem of illegal immigration?

  • Unless it is contested and delayed by British courts, this contract will be put into effect in a couple of weeks.
  • It’s safe to say that Boris Johnson’s administration is preparing for these kinds of legal troubles, but it’s still not obvious whether the Rwanda Deal would end the issue of unauthorised crossings.
  • Evidence from comparable experiences suggests that such restrictions fall short of effectively preventing “people smuggling.”

Criticisms of the deal

  • Transferring refugees and asylum seekers to third nations without adequate protections is risky.
  • The refugees are sent abroad for processing and exchanged like commodities.
  • Such agreements violate the word and spirit of the Refugee Convention, dodge international duties, and merely shift the burden of providing shelter.
  • Additionally, Rwanda is infamous for its extrajudicial executions, suspicious deaths while in custody, arbitrary or illegal incarceration, torture, and harsh legal actions that target critics and dissidents in particular.
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International Relations

The IOR’s Small Island Developing States

The Indian Ocean Region (IOR), which includes crucial Sea Lanes of Communication (SLOC) and significant choke points, functions as a linking centre for international trade in oil and commodities.

Large states with strong interests in the region have made the IOR a fundamental component of their geostrategic ambitions. As a result, Western Indian Ocean Small Island Developing States (SIDS) including the Maldives, Madagascar, Comoros, Mauritius, and Seychelles are being drawn into the conflict between the great powers.

Small Island Developing States (SIDS)

  • 38 UN Member States and 20 Non-UN Members/Associate Members of United Nations regional commissions make up the distinct group known as Small Island Developing States (SIDS), which is particularly vulnerable on the social, economic, and environmental fronts.
  • The Caribbean, Pacific, Atlantic, Indian Ocean, and South China Sea are the three geographical areas in which SIDS are situated (AIS)
  • At the 1992 United Nations Conference on Environment and Development held in Rio de Janeiro, Brazil, SIDS were acknowledged as a particular case for both their environment and development.

Importance of Small Island Developing States (SIDS) of IOR

  • The geographic placement of SIDS islands is strategically significant ever since the development of the Indo-Pacific architecture.
  • Offers simple access and a base for resupply: The islands are adjacent to significant SLOCs, offer simple access to the choke points, and can be used as a base for resource replenishment by maritime powers conducting surveillance in the area.
  • Engagements increase maritime expanse: To increase their influence in this maritime expanse, the major powers have begun engaging with the islands on a larger scale.

Challenges faced by SIDS

  • Multiple difficulties: The SIDS, by virtue of their small populations, distant locations, fragile ecosystems, and constrained resources and capacities, suffer numerous difficulties. The majority of SIDS are categorised as middle-income states, while some, like Comoros, are Least Developed States (LDCs).
  • The economy of these states are not diverse and are largely dependent on a few industries, such as tourism and fishing.
  • Natural disaster losses and climate change: Their problems are made worse by climate change, which puts further strain on their fragile economies. Two-thirds of the states that experience the biggest proportional losses from natural disasters (1% to 9% of GDP annually) are SIDS.
  • Aside from the possibility of low-lying islands submerging in the future, rising sea levels have a direct effect on the SIDS’s economic sectors. For instance, saltwater intrusion degrades agricultural land quality and has an impact on freshwater supplies.
  • Significantly reliant on food imports: Given that 50% of SIDS import more than 80% of their food, the SIDS are already significantly reliant on food imports. Their reliance on food imports will expand if food output continues to decline. For SIDS, attaining self-sufficiency is a distant goal.
  • Fishing, a significant economic contributor, is challenged by the loss of EEZ: A significant portion of the states’ income comes from fish exports. The loss of Exclusive Economic Zones resulting from shifting baselines and Illegal, Unreported, and Unregulated (IUU) fishing are difficulties facing the fishing industry.
  • Additionally, the marine biomass in the resource-rich areas of SIDS is significantly impacted by rising sea temperatures.
  • Nearly 50% of the GDP of SIDS, like as the Maldives and Seychelles, is derived from the tourism sector, which was negatively impacted by the pandemic.

Way ahead

  • The prominent and larger powers without the SIDS have typically made choices about regional security.
  • To force the larger countries to take notice of their security concerns and interests, the SIDS of the IOR can take advantage of their strategic position.
  • Stronger regional alliances and groupings are urgently needed, including major involvement from SIDS, so that other actors do not minimise or disregard their concerns and interests.

Conclusion

The SIDS have been arguing in favour of support and aid in various international fora in order to deal with their problems with resources, development, climate change, and most importantly, survival. The SIDS must be seen as significant stakeholders in the area rather than just as puppets in the geopolitical game. The primary mentality, policy, and method change required for a secure and stable region is this one.

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International Relations

Recognizing the central paradox while keeping China in the spotlight

Strategic goals must be determined by principal contradictions, thus New Delhi needs to identify what that contradiction is. India’s primary strategic contradiction today is China. Everything else falls under the rubric of secondary contradictions, including problems with its neighbours, internal insurgencies, and Pakistan.

Principal contradiction

  • A effective approach of optimising and prioritising strategic decision-making is the idea of a main contradiction, which is one that presents the greatest challenge to a person or organisation and has the capacity to influence its future decisions and subsequent consequences.

Principal contradiction with China

  • Simple inquiry regarding the decisions made by the policymakers: The China test, which is asking and responding to the simple question “does x or y choice/development/relationship help cope with the China threat, or not,” should be passed by major decisions in New Delhi’s strategic decision matrix.
  • China tests a tool for formulating policy Long-term strategic decision-making can benefit from a thoughtful “China test,” at least as an analytical tool with potential policy utility.

Elements of ‘China test’

  • Operationally speaking, the “China test” consists of three separate components.
  • Evaluation of Indian decisions: an evaluation of how a particular Indian choice or area growth fits with Chinese regional strategy or objectives.
  • Determining if the decisions need Modifications: An evaluation of whether India would need to make modifications at the level of secondary contradictions as a result of its choice or a particular regional development.
  • Evaluation of whether it necessitates a significant internal policy change: An evaluation of whether this would necessitate a significant internal policy change. Let me use a few instances to illustrate the usefulness of the “China test.”

Conclusion

The takeaway from the China test for New Delhi is rather simple: India’s grand strategic planning and decision-making must include consideration of China’s deft balancing in Southern Asia and beyond.

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International Relations

Singapore Declaration of ILO

The Singapore Declaration, adopted at the 17th Asia-Pacific Regional Meeting of the International Labor Organization (ILO), established ten points of national action goals.

Singapore Declaration

  • It aims to raise awareness of the need for member nations to address the problems of declining worker salaries, inflation, and unemployment.
  • The delegates who represented regional governments, employers, and labour unanimously decided to adopt it.
  • Members concurred that social dialogue is crucial for addressing labour market issues and figuring out how to deal with crises like the COVID-19 pandemic, natural disasters, and the current economic situation.

Key priorities

  • Promoting freedom of association will ensure that everyone has access to labour protection.
  • Recognition of the right to collective bargaining as an enabler of decent work, including for those in disadvantaged circumstances and those working in the informal economy
  • Reducing gender disparities, raising women’s employment rates, supporting equal compensation for labour of comparable worth, balancing work and obligations, and encouraging women to take on leadership roles.
  • Create and implement policies and programmes for an inclusive labour market that support demographic changes and life transitions.
  • Promote and expedite a seamless transition from the informal to the formal economy by making concerted, continuous efforts in this direction.
  • Improve governance structures and regard for migrant workers’ right to freedom of association
  • Bolster the resilience and protection of social and employment systems
  • Extending social protection to all employees and ensuring that everyone has access to comprehensive, adequate, and long-lasting social protection.
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International Relations

G20: India at Urban20 (U20)

Currently, 50% of the world’s population resides in urban areas; by 2050, this percentage is expected to rise to 6 billion. In spite of this, cities nevertheless struggle to meet the demands of this fast growing population. What promises can India’s presidency hold for the 50% of people who live in cities as a catalyst for global change?

Background

  • India assumed the G20 presidency on December 1. The guiding principle of “Vasudhaiva Kutumbakam,” best summed up by the tagline “One Earth, One Family, One Future,” will serve as its guide.
  • To achieve the objectives of the 2030 Agenda, the G20’s Sustainable Development agenda aligns itself with sustainable actions.

Urban 20 (U20)

  • An urban diplomacy project within the G20 ecosystem: In the G20 ecosystem, the “Urban 20” (U20) was introduced in December 2017. The U20 forum was established as one of the G20’s official Engagement Groups with the purpose of bringing up important urban concerns for G20 cities as a group during G20 negotiations.
  • The G20 and non-G20 cities are increasingly important as a nation’s engines of innovation, economic growth, and productivity, according to the U20’s City Sherpas.
  • Focus on climate change and sustainable development: U20 places a particular emphasis on these topics in relation to the Sustainable Development Goals, along with socioeconomic concerns.
  • Mostly remained a platform of advice: Despite the U20’s concerted efforts to operate independently of the G20, the lack of a written constitution, official procedures, or agreement has prevented the U20 from properly addressing the aspirations and concerns of cities. Unable to actively affect urban planning or carry out policy measures, U20 appears to have primarily remained a venue for expression and making recommendations.
  • India now has the unique chance to establish and implement specific U20 aims to connect with the more general objectives of one of the most important international forums within this context.

U20 2023: a unique opportunity to India

  • India’s U20 potential may seek to make investments and engage in meaningful policymaking that will help the world achieve its 2030 Agenda.
  • India can create a new, balanced model by thoughtfully allocating urban resources and encouraging sustainable habits. While studying some of the healthiest cities’ best practises,

Actions at U20

  • Urban amenities must take into account the improvement of overall quality of life and social-emotional well-being in the post-Covid world. In a post-pandemic world, U20 2023 can prioritise the role of urban mental health to raise awareness of its bearing as a result of an overwhelming built environment.
  • U20 2023 can provide a framework for efficient data collecting, analysis, monitoring, and reporting for timely assessment or urban planning to match with G20 and national objectives, with a focus on efficient data and policies. India needs to prioritise policies that enable data governance and effective data utilisation.
  • Increasing the effectiveness of digital services and closing the digital divide gap: Only 61% of urban Indians are digitally literate, indicating a pervasive lack of knowledge of the government’s e-services. In addition, gender biases in technology and digital skills contribute to a widening gender gap in access to digital services. In order to support research and investment in closing these gaps, new legislative frameworks are required.
  • Gender-inclusive planning to create equitable cities: The United Nations Agenda 2023 might call for international partnerships to create equitable cities by having discussions about gender-inclusive planning. Not only will this help women and children, but it will also ensure that LGBTQ+ people and other marginalised genders are represented in the urban planning process.
  • Prioritizing capacity building and training for city planners: It’s also crucial to stress the value of educating planners and other public servants on the varied impacts and sensibilities of urban development plans. India can support international cooperation in discussions about greater funding for healthcare services in cities.
  • Increasing direct investment in sectors like sustainable energy and mobility transition: India may increase direct investment while carrying out its obligations under the Paris Agreement, the New Urban Agenda, and the 2030 Agenda. A global area of attention for policymakers, for instance, is addressing the dangers of urban flooding in a changing climate.
  • Investing in high-quality education and skill development is essential to being better prepared for the future of work and employment as cities continue to grow. The development of greater entrepreneurship skills and training must be supported by policies in all fields. For instance, while the PM Employment Generation Programme and other Credit Support Schemes assist MSMEs in educating youth and creating jobs, their efficacy and reach are still unknown. On the other hand, the growing gig economy trend necessitates the development of creative policy solutions to support the aspirations of urban young.
  • The need of local-regional involvement for the fusion of viewpoints at the national and sub-national government bodies must be emphasised, and U20 2023 can do this most effectively. Urban Local Bodies (ULBs) can be strengthened more to support the development of equitable infrastructure, inclusive economic growth, and basic infrastructure requirements.

Conclusion

India can contribute to the formation of a global consensus for revitalised urban vitality by examining the connections between the shared concerns surrounding urban planning.

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International Relations

India’s shifted diplomatic energy from SAARC to BIMSTEC

SAARC Charter Day is observed on December 8. The South Asian Association for Regional Cooperation (SAARC), an intergovernmental organisation, was founded on this day, 37 years ago.

SAARC

  • Establishment: On December 8, 1985, in Dhaka, Bangladesh, the SAARC Charter was signed, thus establishing the South Asian Association for Regional Cooperation (SAARC).
  • Members: Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and Sri Lanka founded this intergovernmental organisation. Later, Afghanistan joined SAARC.
  • Secretariat: On January 17, 1987, the Association’s Secretariat was established in Kathmandu.
  • Objectives: According to the SAARC Charter, the region’s goals are to advance the welfare of its citizens and raise their standard of living, to speed up economic expansion, social advancement, and cultural development, to give everyone the chance to live with dignity and reach their full potential, and to encourage and strengthen regional unity.

SAARC achievements

  • SAARC has utterly failed to achieve the majority of its goals.
  • The world’s most impoverished and least integrated region is still South Asia.
  • When compared to other regions like the Association of South East Asian Nations (ASEAN) and Sub-Saharan Africa, South Asia’s intraregional trade and investment are quite low.
  • By continually opposing important measures like the motor vehicles accord, which is intended to improve regional connectivity, Pakistan has chosen an obstructionist stance within SAARC.
  • Things have gotten worse as India and Pakistan’s enmity has grown. Since 2014, there hasn’t been a SAARC summit, leaving the organisation directionless and all but dead.

Bilateralism or religionalism

  • Bilateralism can support regional efforts rather than replace them. According to a new narrative, India can successfully advance its interests in South Asia by favouring bilateralism over regionalism. Bilateralism is unquestionably vital, but it can only serve to supplement rather than to replace regional or multilateral initiatives.
  • Regionalism in East Asia and Africa: In other areas, including East Asia and Africa, regionalism has had great success. The South Asian region can benefit from regionalism as well, especially since that multilateralism is waning.
  • Idea for a new regional economic system: International lawyers Julien Chaisse and Pasha L. Hsieh have developed the idea of a new regional economic order in response to ASEAN’s spectacular success in regional integration. This process involves developing countries looking for a trade-development model that is based on incrementalism and flexibility as opposed to the neoliberal model established by the Washington Consensus.

BIMSTEC

  • The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is a regional organisation made up of seven member states that are located in or close to the Bay of Bengal. These seven states together form a contiguous regional unity.
  • Establishment: On June 6, 1997, the Bangkok Declaration led to the creation of this sub-regional organisation.
  • Serve as a bridge between South and South East Asia: The regional group strengthens ties between these nations by serving as a bridge between South and South East Asia.
  • Platforms for intra-regional cooperation between SAARC and ASEAN nations have been established by BIMSTEC, which also offers platforms for inter-regional cooperation.

Importance of BIMSTEC

  • India switched its diplomatic focus from SAARC to BIMSTEC: India appears to have switched its diplomatic focus in recent years from SAARC to BIMSTEC. As a result, BIMSTEC this year adopted its Charter for the first time in 25 years.
  • Better than the SAAC charter is BIMSTEC: The BIMSTEC Charter outperforms the SAARC Charter by a wide margin. For instance, Article 6 of the BIMSTEC Charter discusses the “Admission of new members” to the organisation, unlike Article 6 of the SAARC Charter. This makes it possible for nations like the Maldives to be admitted.
  • No flexible formula, though, like “ASEAN Minus X”: Despite the advancements, the BIMSTEC Charter lacks the flexible participation system seen in the ASEAN Charter in order to promote economic integration. Two or more ASEAN countries may start discussions for economic obligations using this flexible framework, sometimes known as the “ASEAN Minus X” formula. As a result, no nation has the ability to prevent economic integration between willing nations.
  • It is odd that BIMSTEC does not have a more flexible participation structure given Pakistan’s obstructive behaviour within SAARC, where Pakistan consistently vetoes various regional integration attempts. India and Bangladesh or India and Thailand may have conducted their ongoing bilateral free trade agreement (FTA) negotiations under the more inclusive BIMSTEC framework if the “BIMSTEC Minus X” formula had been flexible. By permitting the slow and incremental expansion of these contractual obligations to other members, this would have eventually strengthened BIMSTEC. India ought to advocate for this change to the BIMSTEC Charter.

Steps to be taken

  • In order to prevent BIMSTEC from becoming another SAARC, its member nations should increase the bar. The best course of action would be a high-caliber FTA that offered comprehensive economic integration, something that Prime Minister Narendra Modi also supported at the most recent BIMSTEC ministerial meeting.
  • India should look into legal options to transfer successful SAARC institutions like SAU to BIMSTEC in order to make the organisations more adaptable and promote peace and prosperity in the region. These actions will strengthen BIMSTEC’s foundation and make it possible to establish a new regional order for South Asia based on incrementalism and flexibility, bringing wealth and peace to the area.

@the-end

The best course of action will be to revitalise SAARC by injecting political energy into it and amending its antiquated Charter because South Asia cannot reject regionalism. This, however, is overly optimistic given the current situation. Considering additional regional tools like the Bay of Bengal Initiative for Multi-Sectoral, Technical and Economic Cooperation is therefore the next best course of action (BIMSTEC).

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International Relations

India—Myanmar

Vinay Kwatra, the foreign minister of India, travelled to Myanmar for two days from November 20 to 21. According to a press release from the Indian Ministry of External Affairs (MEA), he met with members of the military junta that is currently in charge of the nation and spoke with them about infrastructure development, issues relating to human trafficking (of which several Indian citizens have been victims), and security and stability in border regions.

Interpretations over the foreign Secretary’s visit

  • Discussion of cordial relations is stated on Myanmar’s national portal as follows: The two parties held talks about improving relations between Myanmar and India and discussed opinions on how to advance their bilateral cooperation and carry out Myanmar’s peace process, according to the Myanmar National Portal.
  • India’s interest in seeing Myanmar return to the democratic path, the release of political prisoners, and other difficult topics were not mentioned in the MEA statement.
  • Accent on finishing ongoing projects: On the other hand, the foreign secretary mentioned continued Indian support for “people-centric socio-economic development projects” and the early completion of connectivity projects like the Kaladan Multimodal Transit Transport Project and the Trilateral Highway between India, Myanmar, and Thailand.
  • Kwatra reassured the Myanmar junta about initiatives under the Rakhine State Development Program and Border Area Development Program, suggesting that infrastructure and development projects were a major focus during the visit.
  • Contradictory omissions: MEA spokeswoman Arindam Bagchi tweeted that the foreign secretary had discussions on various critical matters, including “India’s support to democratic transition in Myanmar,” despite the MEA news release not mentioning it.

Background

  • India’s interest in Myanmar’s restoration of democracy, according to the MEA’s 2021 statement: In contrast, the MEA released a statement in December 2021 after then-Foreign Secretary Harsh Vardhan Shringla visited, in which he emphasised India’s interest in seeing Myanmar return to democracy as soon as possible, the release of prisoners and detainees, the resolution of disputes through dialogue, and the end to all forms of violence.
  • India’s steadfast and resolute support for ASEAN Additionally, he reaffirmed India’s unwavering support for the ASEAN initiative and expressed the expectation that, based on the five-point consensus, progress would be made in a practical and positive manner.

India’s concerns

  • As a result of various criminal gangs operating a racket recruiting Indian citizens with false job possibilities, human trafficking has become a significant problem in Myanmar. According to media reports, the MEA official advised Indian nationals to be cautious of trafficking. Indian labourers were recruited by IT businesses under the guise of jobs in Thailand and subsequently transported to Myanmar. According to reports, close to 200 Indian people have fallen for this job scam.
  • Support from China for the Military Junta China has strengthened ties with the military junta since the military takeover, giving the Myanmar leadership the much-needed support it needs in the face of international criticism.
  • High Chinese investment in Myanmar: According to reports, China has been a major foreign investor in Myanmar. The numerous projects being undertaken by China include a number of dams and high-speed rail lines, as well as a $2.5 billion investment in a gas-fired power plant. The cost of the China-Myanmar Economic Corridor, which consists of infrastructure development projects including gas and oil pipelines, is in the billions of millions.
  • China wants to have easier access to the Indian Ocean. The deep sea port that China proposes to build at Kyaukphyu, on Myanmar’s west coast, is of particular significance to China since it may improve its access to the Indian Ocean, which China has been seeking for some time.
  • Concern over the developing friendship between Pakistan and Myanmar: After signing a contract with Pakistan two years earlier in 2016, Myanmar reportedly received six JF-17 light-weight multi-role fighter jets from that country in 2018. The delivery date for Myanmar’s further order of 10 aircraft is uncertain.

Why India’s interest in Myanmar’s transition to democracy has altered

  • A combination of pragmatism and China’s expanding influence and incursions into Myanmar may have led India to abandon its moralising about democracy and step up its engagement with Naypyidaw.
  • While Myanmar’s pro-democracy groups and India’s strategic allies in ASEAN may not be particularly pleased with this approach, especially after India abandoned ASEAN’s Five-Point Consensus on Myanmar, it seems that New Delhi believes it has few other options.

Conclusion

India’s increased cooperation with the military junta appears to be motivated by strategic considerations, including concern over Chinese and Pakistani intrusions. Dealing with the governing military junta requires India to strike a delicate balance.

Categories
International Relations

China reiterates its nuclear policy of ‘No First Use’

China reacted to a US report that said Beijing had significantly increased its nuclear arsenal. It claimed that it upholds its stance against using nuclear weapons as a first resort.

The news

  • Beijing would probably have 1,500 nuclear weapons, according to a study on China’s security that the Pentagon published every year.
  • Presently, China has 350 nuclear warheads.
  • Russia had 5,977 nuclear weapons in its arsenal as of 2022, compared to the US’s 5,428.

‘No First Use’ Doctrine: What is it?

NFU is a pledge to never deploy nuclear weapons first in any situation, including as a pre-emptive strike, first strike, or in reaction to any form of non-nuclear attack, according to nuclear ethics and deterrence theory.

Where do nuclear-armed countries stand on No First Use?

  • China is the only nuclear-armed country with an unwavering NFU policy.
  • India still adheres to its NFU policy, with the exception of a response to chemical or biological attacks.
  • According to their different policies, France, North Korea, Pakistan, Russia, the UK, and the US may use nuclear weapons first in a conflict.
  • Israel doesn’t have a position that is known to the public because it denies possessing a nuclear arsenal.

Why push for worldwide NFU commitments at this time?

  • After the US bombed Japan, there have never been any situations that may have led to a nuclear exchange.
  • We run acceptable high chances of nuclear weapons use between and in addition to the unstable situation on the Korean peninsula.
  • Putin and NATO amid the ongoing invasion by Ukraine
  • Pakistan and India Nuclear weapons are acquired by jihadists
  • US and China: As a result of provocations regarding Taiwan and the South China Sea
  • The likelihood that nuclear weapons will be used—whether intentionally, unintentionally, or as a result of error—is actually at its highest point since the darkest days of the Cold War.
  • The establishment of a worldwide NFU would make the world safer right away by eliminating confusion regarding what a nuclear-armed nation may do in an emergency.
  • It takes away the pressure and motivation for any one nation to “go nuclear” first in a crisis and impose a moral duty on others.

Consequences of nuclear war

  • Any nuclear weapon use would trigger severe retaliation.
  • Not to mention the terrible fallout from a nuclear conflict.
  • According to a 2014 study, a purportedly “limited” nuclear conflict in South Asia involving the use of 100 nuclear weapons would have global repercussions.
  • The atmosphere would be filled with millions of tonnes of smoke, which would cause temperatures to drop and harm the world’s food supply.
  • There would be a risk of starvation-related death for two billion people.

Way Ahead

  • Making nuclear weapons unimportant to national security would require the implementation of Global No First Use.
  • These measures would render nuclear weapons useless in the perspective of military strategists, open the way for future nuclear disarmament talks, and hasten the destruction of these weapons.
  • Additionally, it would act as a “confidence-building measure” to increase mutual trust between nuclear-armed nations.
  • As a result, cooperation is made easier in the effort to lower nuclear hazards and finally get rid of all nuclear weapons.
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