Sandeep Dikshit
May 14 2015
Prime Minister Narendra Modi has been unusually subdued and even accommodating towards China on strategic issues. A look at what’s on the anvil, in the runup to the PM’s visit to China, besides Mongolia and South Korea
THE high-profile Pakistan China Economic Corridor (PCEC) and a $46-billion development plan announced by Chinese President Xi Jinping last month extracted a few annoyed murmurs in contrast with earlier Indian fulmination when Beijing sought to restore a damaged trans-Himalayan connection with Islamabad via Pakistan Occupied Kashmir (PoK). India's virtual lack of response prompted a former Foreign Secretary, counted as among the hawks in the strategic community, to urge the Government to protest more strongly on China planning a permanent link to Pakistan via the disputed PoK.
A little earlier, Defence Minister Manohar Parrikar put the brakes on the previous United Progressive Alliance Government's plan to raise a special mountain corps to beef up defences against China. The raising of the China-centric 62 Mountain Strike Corps will be a decade-long process and there was no urgent requirement for Mr Parrikar to announce curtailing of such long- term plans, if only to keep alive the element of uncertainty or “strategic ambiguity”. But the signal to China about downsizing of the corps was distinctively non-adversarial.
And days before leaving for China as part of a three-nation tour, Modi signalled the prime focus of his trip by announcing K V Kamath as the chief of the BRICS Bank. As with the declaration to downsize the mountain corps, there was no special need to make the announcement now because the BRICS summit is still two months away. But the intent is unmistakable. China is the engine that will deliver some quick economic results to the Indian economy. On his last visit to India, XI had announced $20 billion-worth projects but Modi is looking beyond that. The appointment of Kamath as the BRICS Bank is a far cry from India's stand a couple of years ago when it along with South Africa were suspicious of the project and saw it as China's attempt to dominate the five nation grouping of Brazil-Russia-India-China-South Africa (BRICS).
Last month, India made another reconciliatory gesture. It sidestepped US and International Monetary Fund (IMF) disapprobation and along with close US allies joined the China-led Asian Infrastructure Fund.
The intention of US allies to join the bank would be to keep China in good humour when infrastructure project contracts are given, India's aim is different — to attract some of the Bank's funds coupled with Chinese expertise of speedy construction for long-gestation projects. By 2018, Indian Railways would have completed two of its most ambitious post-Independence projects. The Ludhiana-Kolkata and the Mumbai-Dadri high-capacity links will free the existing tracks of the track-damaging and slow-moving goods traffic. China can move in with its funds and proven low-cost construction techniques to strengthen the existing links for boosting trains’ speed.
Conciliatory approach
In his interview to Time magazine, Modi once again broadcast his conciliatory approach towards China. For a leader whose spin-masters invent a new jumla for every foreign visit, Modi fell back on a much-repeated phrase of the Vajpayee-Manmohan Singh era — “not a bullet has been fired on the border for the last 25 years” — to convey that occasional scuffles on the border did not amount to a strategic threat. While strategic experts have been recalling the incursion by Chinese troops during Xi's visit, the threat by the Chinese funded economic belt from the Himalayas in Pakistan's north to its port in the south-west, increased interest in Afghanistan and the greater deployment of military vessels in South China Sea, Modi even defended China's assertiveness as “a very natural tendency for nations to increase their influence in the international space, as they pursue their international relations with different countries.”
Strategic experts tend to get it wrong when they make a single Prime Ministerial visit the fulcrum of India's bilateral relations with that country. This will be Modi's maiden visit to Beijing as Prime Minister but it is not as if he has not been unacquainted with the Chinese leadership. He has continued with the practice started by Manmohan Singh of meeting the Chinese President and Premier at least on a quarterly basis. Therefore, many of the incidents the experts keep recalling may have already been discussed
by Modi in closed-door talks with Chinese leaders.
As farmer suicides, poor agriculture and other domestic mishaps pile up on his door, Modi knows major investment announcements by China will improve his standing at home as well as renew investor interest from other parts of the world. As China's economic growth slips and province after province misses its targets, persuading Beijing to shift its factories to India will be more difficult if New Delhi takes a tough stand on strategic issues.
Building it Bric by Bric
Also, Modi and Xi or his Premier Li Keqiang are scheduled to meet again, possibly twice in the next two months. On both occasions, China will play an important role. The next high-level interaction will take place in July at the BRICS summit in Russia. The formal inauguration of the Bank in the presence of four Presidents and Modi will garner the limelight but there are bound to be discussions on allocating funds. This will be followed by another high-power summit of the Shanghai Cooperation Organisation (SCO). Modi may attend the summit, if this six-nation organisation decides to give membership to India, Iran, Pakistan and Mongolia.
Three of these countries, including India and the existing six SCO members, have the greatest stakes in Afghanistan because being near neighbours, any further deterioration in its security situation will impact them the most. Modi will also be able to get more traction for India's plans to open a route from Iranian port of Chabahar into Afghanistan and some SCO members such as Uzbekistan and Tajikistan.
Having made it a practice to visit three countries on his overseas outings, Modi's trip to the other two — South Korea and Mongolia — will also have an economic agenda at the core. If Modi's intention to play down differences with China is to garner firm investment commitments that in turn would spur Japanese-European corporates to speed their plans for investing in India, a similar intention will be at play in Seoul. Modi will be able to improve ties with western finance if he can offer a firm commitment for the stalled Posco mega steel project in Orissa.
Disenchanted overseas investors
The $12-billion project was agreed upon when current UN Secretary General Ban ki-Moon was the South Korean Foreign Minister. But it is not just the political leadership in Seoul which is interested in the project taking off. About half of the equity in Posco is owned by powerful investment bankers from the US, Canada, Netherlands and other European capitals.
The disenchantment of major overseas investors with the United Progressive Alliance had increased after it was unable to offer a firm commitment for completing land acquisition formalities for the Posco project. India also suffered a diplomatic embarrassment when it invited current South Korean President's predecessor as the Chief Guest for the Republic Day parade in 2010 but had to cancel plans to have him inaugurate the Orissa project because of an agitation against land acquisition that could not be controlled.
Unlike China, there is a defence and strategic overlay with both Seoul and Ulaanbaatar. South Korea nearly won an order for artillery guns that would have been its first foray in the Indian defence sector. It has been in the hunt for shipbuilding orders from the Indian Navy and signed a civil nuclear agreement with India after the shortest of deliberations — in just two rounds.
Crucial for India
Mining equipment from Mongolia, a major supplier of minerals to China, is crucial for India after the successful coal block auctions and for sourcing uranium. Among all countries that have transformed from Soviet Union-styled political systems, Mongolia perhaps transited in the best possible manner. Sandwiched between Russia and China, it sources energy from the former, supplies raw materials to the latter and also contributed troops to the US-led military mission in Afghanistan. Modi's forays so far have been expectant with promises. The Delhi poll results and perceptible disenchantment against the Government have stepped up the pressure for quick results on the economic front. That is why despite an outpouring against his China visit, Beijing and Shanghai remain his best bets for initiating an economic turnaround in India. South Korea, with a big trade surplus with India though not as large as that of China but equally keen to invest, and Mongolia saddled with a surplus of high-tech mining equipment, are the next best ones for making a difference to the current climate of economic mistiness. Till then, discord on Brahmaputra waters, border incursions and belligerence on open seas will remain on the back-burner.
The Indian link with Mongolia
Prime Minister Narendra Modi can add one more Buddhism-related gesture when he visits Mongolia. Modi's visits to Buddhist countries have included mediation at a Buddhist temple in Kyoto, Japan, and obeisance before the Sri Maha Bodhi tree in Anuradhapura, Sri Lanka. In Ulaanbaatar, he should visit one of the several post-Communist era monasteries in which the Indian imprint is paramount for the person at the centre of revival of Tibetan Buddhism in Mongolia was Kushok Bakula Rinpoche. From a rich family in Ladakh, he was recognised by Dalai Lama as the reincarnation of one of Shakyamuni Buddha’s direct disciples. Rinpoche began visiting the Soviet Union and Mongolia during the Communist era and was named India’s Ambassador to Mongolia in 1989. Besides spearheading the revival of Buddhism in Mongolia, he was so successful in temporal affairs that New Delhi kept extending his tenure till the Rinpoche decided to call it a day after 11 years as Indian envoy. Though he passed away in India in 2003, the monasteries in Mongolia are a testimony to the close bonds he forged with the Mongolians.
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