FDI

A muscular India gives its army a “free hand” to knock sense in China

(This is a reprint from NewsBred).

It would be a grave misjudgement to believe that China has walked over India in a physical showdown in Galwan Valley in eastern Ladakh on Monday.

If nothing, ask the Chinese who made moves in lockstep over the last few weeks to test India’s nerves and found a nation mature in diplomacy and dare in equal measure.

India has used velvet gloves against a petulant Nepal which thumbed its nose on borders but didn’t elicit a raging anger from New Delhi that would’ve played into the hands of its puppeteer, China. India knows, as does Nepal, that the latter can’t survive without India’s open borders. Simply, the land-locked nation would run out of essential supplies. A manufactured border dispute has no future but for headlines and talk shows.

China meanwhile had crossed the Line of Actual Control (LAC) at four different points in Ladakh, agreed for de-escalation but then stayed put when the two armies were to pull themselves back by a few kilometres. India would have none of an enemy’s forward-post left standing inside the Galwan Valley which belongs to India. It didn’t backdown from a physical combat either since arms and ammunitions are avoided by the two neighbours in sensitive stretches of border running into thousands of kilometres.

Now has come the news that Indian Army has been empowered to act as per the ground situation without looking for directions from New Delhi. In other words, the Indian Army has been freed from political constraints. It’s an unambiguous message to Beijing that they are now in the wilds. That your superior nuclear stockpiles, defence spending or armaments wouldn’t be of much aid if it’s bare knuckle fight. So, if it’s to fists, stones and clubs now, may the best man win. There is no referee.

Indian Express has quoted an army source thus: “Army has been given emergency powers for deployment there as per needs and new situations without looking towards Delhi…We have to demonstrate our strength on the ground…there is no need to show aggression, only our strength.”

This would put China in a spot. Either they shove the conventions and turn it into an armed combat. Or they pull themselves back as they did in Doklam in 2017. Or they escalate which wouldn’t go unnoticed to a concerned world. It’s a massive show of intent from Modi’s India which is largely consistent in its zero-tolerance approach on nation’s sovereignty and integrity.

It’s not like South China Sea where the Middle Kingdom has usurped islands, sea tolls, reefs and banks overriding neighbours protests. China could not only carry through the bluff but were assured of its efficacy by the mumbled response of the affected. India seems determined to call out the bully. It’s not the semi-autonomous Hong Kong, a cowering Taiwan or a Vietnamese fishing boat you could sink to the floor of the South China Sea.

China clearly is upset at India’s assertions in recent months. India has signed a pact with Australia in the middle of the pandemic which would give teeth to QUAD (Quadrilateral Security Dialogue) between four democracies of Indo-Pacific: the United States, Japan, Australia and India itself. It has openly given a call to multinationals to shift their operations to India, a blow to China where it hurts the most. It has decided to screen the foreign investments beyond the FDI regulations. It now heads World Health Organization (WHO) which is to take call if China was complicit in hiding the truth on Corona Virus pandemic. It hasn’t helped the matter that Taiwan, which Beijing is paranoid about, could have “observer” status at WHO on pandemic deliberations. Then we have an expanded G-7 group of nations where India is to be included but no invitation has gone out to China

India has an uncontested control of Galwan Valley, between Ladakh and Chinese-occupied Aksai Chin, since 1962. It suffers from poor infrastructure in a hilly terrain unlike China which makes use of the flat Tibetan plateau to carry its road and highway network unhindered. India in contrast has to cross several mountains to access the LAC. It’s only natural that India wants to secure its borders. China would either have to give up the encroachments or face consequences, no less economic. There is a groundswell of consensus to boycott Chinese goods. The little matter of Huawei 5G also hangs in the balance.

There is little doubt China faces uncommon heat across continents. Pushback against its over-arching reach has already begun in Africa and Southeast Asia. Unemployment is unprecedented. Economic woes are spiralling. The world is a hostile theatre after China’s machinations on pandemic which has set the world back by a generation in economic terms. Its present misadventure in Ladakh is an undisguised diversionary tactics.

There is little doubt Indo-China relations would freeze in near future. It would bring Pakistan in closer ambit of China. India, on its part, would have the United States in its drawing room. Distrust between the two main powers of Asia would now run deep. Russia is a common friend which could find its loyalty divided.

India is now poking China openly; pay close attention to its message

(This is a reprint from NewsBred).

India has been rather loose with its pronouncements on “fishing” in China’s troubled waters and gain by having world shift its manufacturing epicenter to our land.

After Prime Minister Narendra Modi gave a call to states to utilize the opportunity in post-Covid world, Ravi Shankar Prasad, the Electronics and IT minister, rather shockingly has asked the states to be “proactive” when the “anger against China” spills over.

Uttar Pradesh chief minister Yogi Adityanath has followed it up by laying the doors of his state open and held conference calls with Lockheed, Cisco, Adobe, FedEx and UPS (United Parcel Service) to showcase its potential. Among others are medical device makers and pharma multinationals.

The trouble is India is far from replacing China as world’s global manufacturing hub. Even if India wants to take a hearty slice out of the pie, it needs drastic action on accompanying factors which are easy to manage in a totalitarian system like China’s than in its own federal structure.

China accounted for 28 per cent of world’s global manufacturing output compared to India’s 3.0 in 2018. This has come about not because China offers just cheap labour. A lot of countries could do it. It’s because China hefts up its muscles by additional factors of (a) networked suppliers and distributors; (b) component manufacturers; (c) loose regulatory atmosphere; (d) artificially depressing its currency for its goods to become cheaper than compared to the world. And it has been doing so for 30 years.

India, in comparison, has a gap in its intent from reality. Would it be able to ignore health, safety, environment and employment regulations which China does without a care in the world? Could it deliberately undervalue its rupee by say, buying more dollars? Could it rebate and exempt its export and import taxes? Would India be able to deploy child labour, have long working hours and provide compensation insurance like China does? Does it have a similar integrated industrial system?

If India has in mind to be a hub for mobile phone giants like Apple, the chances are slim. Rare Earth elements are key in mobile-manufacturing and China controls 97% of it. From batteries to headphones, Rare Earth is lifeline to mobiles. Besides, Rare Earth is also needed for electric cars, wind turbines, solar cells etc. (Rare Earth, in layman’s terms, are a few elements which occur in the same ore deposits and exhibit similar chemical properties yet different electronic and magnetic elements).

There is no harm in India coveting world’s top manufacturing giants. But “assembling” isn’t the same thing as “manufacturing.” A separation between the two is possible, say, with delivery-giants like FedEx and UPS. But on matters of manufacturing products, just providing “assembling” is not good enough. India needs a giant churn in manufacturing in a limited time window. China would already be at work to woo the big money with more incentives.

The larger point is geopolitical realignment. For a while now, India had been sliding in the West’s camp, led by the United States. If there was a veil of diplomacy, it’s now gone to winds. India, Israel, US, West, Saudi Arabia, Japan etc now look firmly on one side. India is now open about its bad vibes against China. A large part of it is justified given how China rails against India in international forums, blocks its entry into Nuclear Suppliers Group (NSG), and sings Pakistan’s tune on Kashmir and terrorism. But the likes of BRICS, SCO etc gave it a semblance of balancing. Now that optics is gone. And what happens to our deep defence reliance on Russia which is firmly embedded into China’s camp? Does it mean we also have “lost” Iran for good?

First was India’s move to scrutinize FDIs (Foreign Direct Investment) which China is vehemently protesting against. Now is this “open” intent to woo world’s biggest manufacturers. There is nothing wrong in sensing an opportunity. But why say “at the expense of China”? Unless you want to signal the West and remove the ambiguity on your neutrality.

India has just done so. It comes with collateral damage though. China enjoys tens of billions of dollars trade advantage against India. They surely would now resort to arm-twisting India. It would be messy but one hopes India has taken into account the Dragon’s next moves. Events would now happen rapidly. Watch the space.

 

India runs on Railways; So please be mindful Ms. Sonia Gandhi

(This is a reprint from NewsBred).

Railways was in news for different reasons last week. It wasn’t rail-budget (that the NDA government did away with in 2017 after 92 years); any train accident or cockroach in your dinner tray. It was because Sonia Gandhi, the matriarch of Congress, had opened her mouth and become a butt of joke.

Sonia makes few public speeches. But the other day, she spoke in Parliament and accused BJP of clandestinely “privatizing” Modern Coach Factory in Raebareli, Uttar Pradesh despite it producing coaches beyond its capacity. Her heart beat for thousands of employees who could be laid off. In perfect sync, All-India Railwaymen Federation (AIRF), with 1.4 million members, echoed Sonia’s fears.

Little had Sonia known of the muck it would invite on her own Congress party. Railway minister Piyush Goyal rose in reply and the skeletons of Congress regime began tumbling out. In 64 years, between 1950-2014, Congress had added only 13,000 odd tracks to its network; that Modern Coach Factory produced not a single coach since it was set in motion in 2007; and some unfinished projects in West Bengal date back from the 1970s. We would come to “privatization” bit in a while for a bigger Railways story awaits our attention.

India runs on Railways. Passenger services (11 million passengers per day) account for two-third of its operations; the remaining one-third is freight (6 lakh tonnes daily). In terms of revenue though the role reverses. Freight accounts for two-thirds of revenue. By 2050, India would account for 40 per cent of global Rail activity.

This is just a starter. India is poised to become world’s most populous nation by 2024.  Most of it would be young, needing goods and that too in double quick time. India would’ve 829 million Internet users by 2021. It’s a prospect which salivates E-commerce biggies. It also has the government drooling towards its 5 trillion-economy goal. Transportation infrastructure, along with energy, is the biggest economic growth driver for the country. A 7% or 8% growth is impossible without an efficient Railways.

The worry is most of India’s transportation business still runs on land. That’s because our railway tracks carry both passengers and freight. It slows up the goods movement to a crawl. It makes transporters wary; and the investors reluctant. They have good enough reasons too. The account book of Railways show that out of every rupee it earned, 93 paisa was spent just to keep it chugging and alive.

In comes Dedicated Freight Corridor. Demand for rail freight movement is infinite. It’s government’s priority too. Two corridors under construction are expected to be functional over the next two years. The Eastern and Western Corridor covers a total stretch of 3,360 kilometres. The Eastern Corridor stretches from Ludhiana (Punjab) to Dankunj (West Bengal) and the Western one lasts from Jawaharlal Nehru Port (Mumbai) to Dadri (Uttar Pradesh). Visit any of its sites and you would be stunned by the speed of operations in sorting out locomotive and wagon specifications, energy maximization, freight logistics, track safety, commercial and marketing plans and skill-enhancement centres etc.

Freight is a game India can’t lag behind. While inland waterways, coastal shipping, air and road transport are doing their bit, Railways has to be the prime mover to prepare India for its next decade. The matter is not just of economy, it’s of environment too. While jobs and revenue are paramount, the matter of environment is one of life and death.

Fortunately, Indian Railways has pulled up its stocks. Nearly 45 per cent of all our rail nework is electrified today and rest are running on diesel locomotive. No longer we are reliant on steam engines which are run on coal and its fossil fuel lay our environment waste. Most, if not all, of our superfast trains hav electric engines. More and more tracks are being electrified. Varanasi and Chittranjan manufacture all types of railways engines. Coach factories in Perambur, Kapurthala, Raebareli etc produce the compartments on which India runs.

And talk of passengers. Since 2000, the growth of passengers using Indian Railways has gone up by 200 per cent. It would only grow further. India needs more and more short-distance trains which are electric and power efficient. Superfast trains, lampooned by opposition, are critical too.

Prime Minister Narendra Modi flagged off India’s first semi high-speed train, Vande Bharat Express, earlier this year.  This plush 16-coach air-conditioned, self-propelled train doesn’t have a locomotive. It runs between Delhi and Varanasi with halts at Kanpur and Allahabad. The 780-km long journey is completed in eight hours and slices off three hours from it earlier duration. This is India’s fastest train to date. The looks and interiors of the train have the feel of a commercial airplane. Hold your breath, 130 similar semi high-speed trains are in the pipeline.

Sure, all this needs investment. Government is doing its bid to attract private players (General Electric is already there). Foreign Direct Investment (FDI) is being sought. Public-Private Partnership is the need of the hour. Corporatization plan is mooted, like the one of Indian Railway Rolling Stock Company to hive off seven of its production units and associated workshops which Sonia Gandhi mischievously termed as “privatization.” Modernization drive has so far fetched Rs 1.21 lakh crore of investment. Indeed, the estimation is of $190 billion investment by 2050. High-speed trains could save India up to $64 billion on fuel expenses. The diesel cost presently is Rs 15000 crores per annum.

After an existence of 176 years, Indian Railways is getting the attention it deserves. No longer those railway budgets which were only meant to announce schemes and new routes and never saw the light.  It desperately needs investment and India is exploring all its avenues. To run it down as “privatization by stealth” is ethical debauchery.

 

How the propaganda against RSS falls flat on its face

(This is a reprint from NewsBred).

Indian Express has two voices which do not like RSS or BJP or Hindu resurgence in India. You scroll down articles of either Christophe Jaffrelot or Ashutosh Varshney and get the drift. Jaffrelot is more scholarly and dense; Varshney more sound and less substance. Both are present in Indian Express of today, dominating two separate pages.

Jaffrelot is the crudest today than he has perhaps ever been in his long association with the Indian Express. All the veneers of scholarly nuances are out of the window. What remains is a pen-pusher who is unsure of his dwindling influence over the readers or his promoters. The crux of his agenda is that lynchings is orchestrated by the present dispensation who appear in different garbs at different times: RSS, its affiliates, BJP etc. He terms it the “deep state.” Everything that’s wrong with Modi’s India—the “cruelty” against Muslims and Dalits—is part of a larger design. In his view, India is a theocratic state in the making.

To Jaffrelot’s misfortune, Varshney has a detailed interview on Page 25 with Waltern Andersen who has a new book, “The RSS: A view to the inside” in the market. It completely debunks Jaffrelot’s argument that RSS and its affiliates are the “deep state” in India. Indeed, Varshney couldn’t have done a better service to RSS or BJP with this interview (a must read, I say).

Now Varshney must not have bargained for it but the Andersen interview is a validation of RSS. All Indian Express could do was to pick a comment as headline: “A battle between Hindutva and Hinduism is coming.” I will reserve dwelling on this headline in the end: I promise the irony in it would have you doubling up in uncontrollable laughter.

The interview first establishes the credentials of Andersen: the only scholar to have observed the RSS for five decades. Then Varshney rolls out the questions which reflect his own venom:

  • What about RSS chief MS Golwalkar and his book, “We, our nationhood defined.”
  • For Savarkar, Muslims and Christians born in India were not Indians/Hindus
  • What pledge pracharaks take? Can they marry? (An answer hopefully which would nail Modi, himself was a pracharak)
  • RSS influences state and its’ policies
  • What is RSS views on Modi’s economics
  • RSS is committed to promotion of Hindi as language
  • What is RSS view on ideal Hindu women, and divorce
  • The RSS relationship with Muslims
  • How does RSS integrate lower caste? What is RSS views on Ambedkar who was anti-Hindu?

You would agree these are the questions which reflect the entire gamut on RSS; the basis of the misinformation campaign which writers of the ilk of Jaffrelot and Varshney spread with impunity. And now look at how Andersen replies to this mal-propaganda.

  • “We, our nationhood defined” I later learnt was not his (Golwalkar’s) book;
  • Savarkar, as you know, was an atheist (while you were told he was a hardcore Hindu zealot!). For MD Deoras everybody born in India was Hindu. He was against caste system and untouchability; non-Brahmans could be pracharaks;
  • They (pracharaks) take ascetic pledge; some do marry. It’s a casteless Hindu monastic order;
  • That’s inevitable since you have to deal with government in all spheres, all activities. Government is all pervasive in India. But Bharatiya Mazdoor Sangh (BMS) is opposed to FDI; while Modi is all for it;
  • Demonetisation and GST directly hurts their (RSS) base. But RSS has not passed a resolution against it;
  • It can not and it does not (promote Hindi). RSS schools teach their pupils in their mother tongue; RSS could not have simultaneously sought a rise in India’s national strength and continued its strident attacks on English;
  • Wife and mother have ideal role in society; but they also idolize Rani ki Jhansi. Both images have existed;
  • When Deoras invited Muslims to join the RSS, he did argue that Muslims were mostly India-born, and therefore Indian;

And now to the final question (RSS on lower caste and Ambedkar); its’ answer on which Indian Express has based its headline: “A battle between Hindutva and Hinduism is coming.”

Andersen explains: “There have been Dalits and OBC pracharaks, including the OBC Narendra Modi…Ambedkar is now a hero…Hindutva emphasizes one-ness of Hindus; (Hinduism is more rigid, by inference). Hence there will be a battle between Hindutva and Hinduism.”

Did you get the joke? This definition of Hindutva and Hinduism completely turns on the head what the likes of Shashi Tharoor and Digvijay Singh have been drumming in our ears. That “I-am-a-Hindu-but-have-a-distaste-for-Hindutva.” In their view Hindutva is reactionary and violent. But as Andersen tells us, Hindutva implies inclusiveness of all!!!

That’s why I say identify these jokers. Identify the agenda they have. Identify the mistruths they spread. The “farragos” and “whatabouteries.” And save this piece as evidence when the next misinformation campaign against RSS and BJP is served inside the pages of your newspapers.

(P.S: let me imagine a scenario: “What did you do mate,” Jaffrelot to Varshney on phone, “and to my `deep state’ theory.”)

India thumbs nose at China

This is a reprint from Newsbred.

In the first part of this series, we looked at Japan and India raising hackles against China in East and South China Sea. In this second and concluding part, we look at reasons for India’s militaristic posturing and its’ likely fallout.

 

One and a half years into his premiership, Modi seems swamped by issues which certainly are not of his making but would need at least 10 years of his helmsman-ship.

In an impatient country, rogue opposition parties stall him at every step and scoundrels in media bay for his blood every morning. Modi knows immediate issues could sail or nail him, given how they turn out.

Modi’s most pressing concerns—which probably are true of any other country—is improving jobs, infrastructure and Human Development Index (HDI) to go with a secure neighbourhood.

Creating jobs is a millstone around his neck.  India needs 12 million jobs for its youth every year—that is more than the population of a Greece or Hungary. The infrastructure “deficit” is estimated to be over $750 billion—that’s more than twice the size of Singapore’s economy. The HDI ratings are 135 out of 187 nations, conveying a yawning shortfall in areas such as education, health or gender inequality. Agriculture and rural-urban divide is monstrous. Intended legal or economic reforms are hacked by butchers occupying opposition benches in the parliament.

Modi’s best hope in this has been to seek a huge foreign investment.  He chiefly has sought out US, Japan and China in this quest. United States has been quick on the cue. There is now a five-fold increase in India-US trade. US supports India’s bid for a United Nation’s Security Council (UNSC) seat. Joint production of weapons and weapon systems has been agreed upon.

US’ interests are evident. It wants India as a frontline state in its bid for strategic naval dominance in Pacific and Indian Ocean. Pakistan’s National Security Advisor Sartaj Aziz pulled no punches when he declared in September that “America is preparing India to reduce the influence of China in the region.” Japan, as we’ve found out, has been quick to do the bidding on US’ behalf for India.

China, on the other hand, has an indifference bordering on contempt. Chinese President Xi Jinping came with much fanfare to India last year but offered only 20 billion dollars of Chinese investment over five years—that too was a quantum jump on existing Chinese investment of only $500 million in India. It’ ‘investment even in Myanmar totals $14.2 billion.  Before Xi could even settle down in Beijing on return, China’s incursions in India’s northeast borders had left a bitter taste in its hosts’ mouth.

In June this year, India was stunned when China vetoed an Indian attempt to pressure Pakistan into keep the alleged 26/11 Mumbai attacks mastermind, Zakiur Rehman Lakhvi of Lashkar-e-Taiba (LeT), into jail. This wasn’t the first time though. China had thrice before blocked efforts to designate Jammat-ud-Dawa (JuD) as a terrorist organization. It was LeT which had attacked the Indian consulate in Herat, Afghanistan last year on the eve of Modi’s inauguration. It’s also worth remembering that China was critical in arming Pakistan with nuclear weapons’ knowhow.

China’s support to Pakistan indeed has been extraordinary. It’s commitment to invest $46 billion in the construction of the China-Pakistan Economic Corridor (CPEC), to connect Kashgar in Xinjiang to Gwadar port on the Arabian Sea, is staggering. It’s the largest investment project ever in one country, bigger than even the US Marshall Plan after World War II.

If it bears to fruition, the CPEC with its power projects, fibre optic links, roads and energy supplies will transform Pakistan’s economy. Pakistan has even created a special division of 10,000 in its army for the defence of the project as it runs through the troublesome Balochistan province. A part of this project runs through the Pakistan Occupied Kashmir (PoK), much to India’s annoyance.

Sure, Pakistan is important to China. It doesn’t want the terrorist trouble to spill into its Tibet and Xinjiang province. Pakistan also is its staunch ally in the Islamic world. Above all, Pakistan sits at the intersection of South Asia, Central Asia and Middle East.

Thus India, on its own part, feels encircled. China has extended its reach in the Indian Ocean through Sri Lanka and Maldives. Gwadar is said to be a pearl in its crown though there is a misnomer here which must be spelt out in full.

Pakistan purchased the small town of Gwadar from Oman in 1958. However, work on its port began only in 2002. Its need arose as repeatedly Pakistan found its naval and strategic options limited in conflicts with Indian Navy who were quick to blockade Karachi. Gwadar happens to be less than 500 km from Karachi and thus an ideal alternative.  At Pakistan’s request, China provided US $198 million for the first phase which was completed in 2006. Thereafter, China took little initiative in completing its remaining two phases.

Gwadar’s importance clearly is being overplayed by the analysts. First, for it to be an effective port, China would need to built thousands of kilometers of roads in Pakistan. So is true of thousands of kilometers of gas and oil pipelines; and railway tracks to justify the investment in Gwadar.

Besides Gwadar isn’t the only option for China in Indian Ocean. It has Hambantota port in Sri Lanka and a container port in Chittagong in Bangaldesh. China has built roads, dams and pipelines in Myanmar, not to say developed port in Kyaukpyu. China’s oil ships from the Middle East and Africa will cross the Bay of Bengal and unload at these ports.

Still, India has sulked at China’s indifference. In China’s latest white paper on defense, India doesn’t figure at all.  India’s insecurity has been further heightened by China’s astonishing military build-up.

Border is another issue. India wants to clarify the Line of Actual Control (LAC). India’s navy has counted 22 “encounters” with Chinese submarines in Indian Ocean in a span of 12 months. China’s defense budget has shown a three and a half fold increase in just last decade. Its’ air force is twice the size of India.

According to a news report, Beijing needs only two days to mobilize on the Chinese-Indian border while New Delhi, hampered by its crippling transport infrastructure would need at least a week to do so. China, if it wants, could place 450,000 troops in a jiffy at the border, three times to what India could manage.

Chinese navy warships have been spotted on long deployments just off India’s coasts. India’s present chief of navy staff, Admiral Robin Dhowan couldn’t help but publicly say that India is “minutely monitoring” Chinese maritime movements.

Sure, India has caused distrust of its own. It hosts Dalai Lama which is a sensitive subject for China. If India wants to stir up things for China in Tibet, the latter wouldn’t mind using Pakistan for the same end. India also views China as a major opponent in seeking oil and other resources from Africa. Last month Modi hosted a summit of African government leaders in India’s capital.

Given India’s needs, it certainly doesn’t want to be leashed in its own region by China’s tactics. It’s association with Japan would certainly make China a little more sensitive to its anxiety. In the real-politic sense too, India has been clever to make the most of differences between Japan and China.

The only concern, and it’s a real one, is if US or Japan go too far in needling China in East or South China Sea. If gloves are off, India would be required to fulfill its obligation or the promised investments would go up in smoke. Modi’s best bet is it won’t happen in next three years and by that time he would have secured his re-election.