POLS 331: INDIA AND THE

WORLD Mid-term Assignment

Ashutosh Kashyap 195, Department of Economics

kashyapashutosh@hotmail.com

Outline 1. How successful has India been in achieving its objectives in relation with Pakistan.

2. Evaluating the potential of Look-East Policy in shaping India’s Economic and Strategic future.

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1. How successful has India been in achieving its objectives in relation

with Pakistan The relations between Pakistan and India are characterized by periodic ups and downs, hot and cold diplomacy

and intermittent breakdown. This makes predictions about the future direction of their relations and

endurance of the dialogue process somewhat problematic. The silver lining in the troubled India-Pakistan

relations is that the disruption in the dialogue process is not permanent; the governments of both countries

invariably return to negotiation. Former Indian politician I. K. Gujral accurately described the relationship as a

‘tormented’ one. Indeed, the heated issues of Kashmir, terrorism and nuclear arms remain as challenging as

ever.

The normalisation of relations holds great benefit for both countries, especially when one considers their

shared economic interests. In addition, with the drawdown of United States forces from Afghanistan in 2014,

the two nuclear-armed rivals needs to find a consensus in order to stabilise Afghanistan and the region more

generally, especially the potential “Talibanisation” of Pakistan.

Background

Since partition, relations between Pakistan and India have been constantly challenged by territorial disputes

and competing state narratives and nationalism. With the Kashmir issue taking centre stage in their

tumultuous relationship, India and Pakistan fought three wars in the first 25 years of their existence.

This rivalry was heightened in 1989 by Pakistani support for an insurgency in Indian Kashmir using military

proxies. As the impasse over Kashmir continued, tensions escalated further in 1998 when India, followed by

Pakistan, began testing nuclear weapons. In May 1999, hopes of peace were dashed again as Pakistani-backed

infiltrators triggered a skirmish in the Kargil region of Kashmir. Tensions continued to simmer and peaked

again in 2001-02 following a terrorist attack on the Indian parliament. As the fighting looked set to continue,

international pressure for a resolution led the two sides to return to the negotiating table in 2004.

True to the oscillatory nature of the relationship, however, four years later, the prospect of peace was sunk

once again after the 2008 Mumbai terrorist attacks, which New Delhi ultimately attributed to Pakistan’s Inter-

Services Intelligence (ISI). The progress achieved in the Composite Dialogue was quickly derailed. Following the

attacks, the two states almost completely cut ties with one another.

Finally, the emergence of “cricket diplomacy” between the prime ministers at a March 2011 Cricket World Cup

semi-final saw the resumption of talks. These talks have renewed hopes of a settlement between the two

rivals and both countries have expressed the desire to normalise relations. (Manners, November 2012)

Major Impediments to Normal Relations The leaders of India and Pakistan will have to address issues which have become major impediments to turning

their desire to improve bilateral relations into concrete policy measures.

Kashmir Although Pakistani and Indian leaders have acknowledged a mutually agreeable basis for settlement,

the issue of Kashmir remains unresolved and continues to hamper relations. The contested area has

divided the two states for some 60 years and is a highly sensitive issue. Any resolution therefore faces

political roadblocks and widespread public discontent. This is especially the case since the Mumbai

attacks, as nationalism has increased and the popular images of one another have hardened. The

issue of Kashmir may not be as salient as other recent concerns such as terrorism, especially given

that the ongoing stalemate has lasted almost 60 years.

Terrorism Another point of divergence is terrorism. So far, Pakistan has proven unable to curtail militant

activities and prosecute those responsible for terrorist attacks. This is a serious concern for India,

especially after the 2001 and 2008 terrorist attacks by Pakistani based militant organisations, which

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India believes the ISI was behind. India has given all the evidence related to the attack to Pakistan

and wants to detain and extradite Hafeez Saeed for trial.

Afghanistan The two countries have long competed for influence Afghanistan and Pakistan is deeply suspicious of

a rise in India’s presence there since the fall of the Taliban government in 2001. Pakistan accuses India

of using Afghanistan as a base to create problems inside Pakistan, including backing separatists in

Baluchistan province. India denies the accusations, saying its $2 billion aid is focused on development.

India is worried that negotiations with the Taliban and the US pull-out would give Pakistan an upper

hand in Afghanistan and offer anti-Indian militants a base.

Water Issues The two countries disagree over use of the water flowing down rivers that rise in Indian Kashmir and

run into the Indus river basin in Pakistan. Pakistan says India is unfairly diverting water with the

upstream construction of barrages and dams which India denies.

Siachin Glacier Indian and Pakistani forces have faced off in mountains above the Siachin glacier in the Karakoram

Range, the world’s highest battlefield, since 1984. The two sides have been trying to find a solution

that would allow them to withdraw troops, but India is unwilling to bring its forces down until

Pakistan officially authenticates the positions they hold. (Reuters, July 2011)

Competing Narratives of History India and Pakistan have created two competing narratives of the past and the present focusing on the

nation-state. Each narrative projects itself as noble, correct and justified and the other side as evil and

trouble maker. The aura of self-righteousness and projection of the other side as belligerent is

inculcated among the young people.

Role of Media There are people in the media who support improvement of relations but they appear to be in a

minority in both countries. Some of the talk show anchors on both sides attempt to improve the

ratings of their programmes by using highly inflammatory rhetoric against the other side. The media

needs to show restraint and present the issues in a balanced way with a commitment to calming

down tensions. (Rizvi, August 2011)

Economic Interests and Successes One avenue with the potential to change Pakistan-India relations is economic co-operation. In recent times,

efforts to unite Kashmir through cross-Line of Control Bus Service, partial liberalisation of Visa regimes and the

creation of intra-Kashmir business entities, such as the Federation of Jammu and Kashmir Chamber of

Commerce and Industry, have symbolised an attempt to approach the problem of Kashmir, through less

conventional means. More recently, in October 2012, the two sides struck a visa deal which, while not bringing

great trade benefits, is a positive step forward in the relationship. (Manners, November 2012)

Beyond Kashmir, trade ties between the two states have great potential. The trade between the two countries

tends to prosper with improved bilateral political relations. In 2008, trade between the two accounted for a

mere $2 billion, or roughly one per cent of each country’s overall trade. Since then, trade has been improving

steadily and there are promising signs heading into the future.

India and Pakistan have allowed trade across LoC boosting mutual confidence, promoting economic dialogue

and opening a trade outlet for people of the Himalayan region. The bilateral trade across the border resumed

after a period of 61 years. The border trade which is tariff free is one of the key confidence building measures

(CBMs) which was agreed at a meeting between Prime Minister Manmohan Singh and President AsifAli Zardari

in New York on September, 2008. The opening up of second gate at Wagah-Attari border with warehousing

infrastructure along with off-port and on-port facilities on both sides would greatly facilitate the trade

between India and Pakistan.

Pakistan currently allows only 1938 items to be imported from India. This restricts bilateral trade much below

its potential. The positive list approach is in violation of both SAFTA and WTO norms. Pakistan has much to

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gain if it can penetrate the buoyant Indian market. India needs to reduce its current non-tariff barriers, which

have proved major impediments to improving economic ties.

The two major energy projects under consideration for a very long period of time are the Iran-Pakistan-India

(IPI) pipeline and Turkmenistan- Afghanistan-Pakistan-India (TAPI) pipeline. A land-based pipeline would be

four times cheaper even after taking into account transit fee payments to Pakistan.

The lack of good relations between the two countries has also affected the SAFTA agreement. While India has

given the MFN status to Pakistan but it has not reciprocated the same and still maintains a limited list of

positive items which can be imported from India. It is expected that the bilateral trade would increase

manifolds, if SAFTA is implemented in letter and spirit by Pakistan. (FICCI, February 2012)

Conclusion The future of Pakistan-India relations is far from certain. There are both major problems and opportunities

that could tilt the relationship either way. The protracted issues of Kashmir and terrorism will remain a thorn

in the side of both states and will continue to hamper the normalisation of relations into the future. However,

there are also opportunities which both states can capitalise on in order to improve their economic and

security ties and possibly normalise the relationship moving forward. Economic ties continue to gain

momentum with piecemeal initiatives and reforms, and there is much hope on both sides that trade will

continue to grow. Although future relations are uncertain, these issues and the roles that both states can play

in promoting regional stability will see Pakistan-India relations remain of critical importance in the coming

decade. Looking forward, there are a number of opportunities that Pakistan and India may capitalise on in

order to build a deeper relationship in the longer term.

References Ahad, A. (December 23, 2012). Infrastructure issues hindering Pak-India trade growth . Retrieved

from Business Recorder: http://www.brecorder.com/pakistan/business-a-economy/97353-

infrastructure-issues-hindering-pak-india-trade-growlh-.html

FICCI. (February 2012). Status Paper on India - Pakistan Economic Relation. New Delhi.

Manners, A. (November 2012). Pakistan-India Relations: Old Rivals, New Beginnings. Dalkeith, WA:

Future Directions International Pty Ltd.

Reuters. (July 2011). Major issues between old rivals India and Pakistan. Retrieved from Reuters:

http://in.reuters.com/article/2011/07/26/idINIndia-58461420110726

Rizvi, H.-A. (August 2011). PAKISTAN-INDIA Relations Old Problems: New Initiatives. Islamabad:

Pakistan Institute of Legislative Development and Transparency - PILDAT.

SIKRI, R. (2009). Challenge and Strategy: Rethinking India’s Foreign Policy. New Delhi: SAGE

Publications India Pvt Ltd.

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2. Evaluating the potential of Look-East Policy in shaping India’s

Economic and Strategic future India's strategy of engagement with Southeast Asia started before the fall of the Berlin Wall in 1989. In the late

1980s, India began to initiate peaceful overtures to ASEAN and had called this process "Look East Destiny".

(YAHYA, April 2003)

India’s ‘Look East’ policy encompassing relations with its eastern neighbours, including the 10 ASEAN

countries—Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and

Vietnam—as well as China, Japan, South Korea, Australia and New Zealand constitute an increasingly

important dimension of India’s foreign policy.

This region is today India’s largest trade partner—about 35 per cent of total trade—ahead of Europe as well as

the US, and the rate of growth is comparatively much faster. It is an increasingly important source of foreign

direct investment into India. Over the last five years, visits have been exchanged at the highest level with all

countries. (SIKRI, 2009)

Background India’s economic and financial crisis of 1991 that hit India and the ineluctable logic of globalization—compelled

India to embark on its economic reforms, coincided with the collapse of the Soviet Union, which was India’s

valued economic and strategic partner. Both these developments compelled India to take a fresh look at its

foreign policy. It was Prime Minister P V Narasimha Rao’s strategic vision that he quickly grasped the changed

economic and strategic paradigms of international relations in the early 1990’s and took a conscious decision

to plug into the dynamic Southeast Asian region.

This marked a decisive change of India’s inward looking economic orientation towards a meaningful economic

integration with the rest of the world. India’s early assessment of the potential of the Southeast Asian

countries was faulty, which explains why India did not take up an invitation to join ASEAN, but by the 1990s

the ‘Asian Tigers’ had started roaring and compelled India’s attention.

India’s ‘Look East’ policy is equally a response to the end of the Cold War, when natural relationships based on

geographical contiguity and commonality of factors could be re-established. (SIKRI, 2009, pp. 112-129)

India's renewed interest in its "Look East" policy is related to its desire to accelerate its economic development

further through reforms and liberalization. Moreover, engaging India as a regional power is a wise strategic

response by ASEAN as it would curb China's regional ambitions. China's entry into the World Trade

Organization (WTO), its ability to attract foreign direct investment (FDI), and its political influence in the region

are some of the main motivations for India to engage the Southeast Asian region. (YAHYA, April 2003)

Initiatives India's policy to "Look East" has been in response to its own weak economy and the rise of Chinese military

and economic capacity. As Southeast Asia hovers in indecision about China being both a suspect as well as

friendly neighbour, New Delhi's reformist domestic policies and an improvement in its ties with Beijing could

stimulate India- Southeast Asia interaction further. (Grare & Mattoo, India and ASEAN: The Politics of India's

Look East Policy, Autumn, 2002)

The Look East Policy has also been pursued through constructive engagement with various regional

grouping/organisations such as ASEAN, East Asia Summit, Bay of Bengal Initiative for Multi-Sectorial Technical

and economic Cooperation (BIMSTEC) and Mekong-Ganga Cooperation (MOC).

As part of its Look East Policy, India became a sectorial-dialog partner of ASEAN in 1992 and a full-dialog

partner in 1996. In 2002, India and ASEAN were upgraded to the summit level, as applicable in the case of

ASEAN + Three. Now, as ASEAN negotiates free-trade agreements with China, Japan, and South Korea, the

vision of a larger framework that includes India is taking shape. The imperatives of the ongoing regional

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economic integration have thus opened up unprecedented prospects for a recasting of India's external

economic relations in the region. (Grare & Mattoo, Beyond the Rhetoric: The Economics of India's Look East

Policy, 2004)

Mekong Ganga Cooperation (MGC) The Mekong-Ganga Cooperation (MGC) brings together India and five ASEAN countries and was

launched in 2000. MOC initiative is a vehicle for 'soft diplomacy' in countries that have had

considerable cultural influence from India. Both the Ganga and the Mekong are ancient rivers and the

MGC initiative is indicative of the cultural and commercial linkages between the member countries of

the MGC down the centuries. MGC has identified tourism, culture, education and transport &

communication as priority areas of cooperation.

India –ASEAN India has undertaken a number of initiatives to strengthen economic cooperation with ASEAN

countries in areas of common interest. India signed a 'Trade in Goods' agreement with ASEAN in 2009,

which became operational from January, 2010. Agreements on Trade in Services and Investment as

part of FTA are the focal areas. India is also negotiating Free Trade Agreement (FTA) with Bay of

Bengal Initiative for Multi-Sectorial Technical and Economic Cooperation (BIMSTEC). The agreement

on trade in goods has come into force, following ratification by Singapore, Malaysia and Thailand.

India's bilateral trade with ASEAN countries has grown from USS 2.4 billion in 1990 to USS 44.66

billion in 2008-09.

At the 7th ASEAN-India Summit, India announced allocation up to US$ 5O million for the period of the

ASEAN work plan for 2009-15 under the ASEAN-India Cooperation Fund and the ASEAN Development

Fund.

Bay of Bengal Initiative for Multi-sectorial Technical and Economic Cooperation (BIMSTEC) Bangladesh, India Sri Lanka, Thailand Economic Cooperation (BISTEC) grouping formed in 1997 was

another vehicle to pursue our "Look East Policy". BIMSTEC has seven members - Bangladesh, Bhutan,

India, Myanmar, Nepal, Sri Lanka and Thailand. BIMSTEC provides a link between South Asia and

South East Asia by way of economic cooperation and linkages in identified areas of cooperation.

Starting with 6 sectors, the BIMSTEC agenda of cooperation has expanded to 14 sectors.

East Asia Summit (EAS) The concept of an East Asia Grouping was first promoted in 1991 by them Malaysian Prime Minister.

It provides India the forum to carve out for itself a larger But Asian strategic presence and taking

forward our vision for the future. Thrust areas of EAS include Energy, Environment, Climate Change &

Sustainable Development, Education, Finance, Natural Disaster Mitigation and Avian Influenza.

(Ministry for Development of North-East Region, April, 2010)

Strategic Trade From a strategic perspective, enhancing trade and economic linkages with Southeast Asia after the demise of

super power rivalry in the region is of paramount importance if India is to curtail the influence of its main rival

and neighbour, China, in the region. Without cultivating the ASEAN member states and extending its influence

into the Southeast Asian region, India risks being marginalized and outflanked by the strategic partnership

between China and Pakistan. While the motivation by India to foster closer links with ASEAN may be motivated

by strategic considerations, India's trading and economic links with the region has been ongoing throughout

centuries. According to Prime Minister Vajpayee, "ASEAN has always been very close to us in terms of history,

geography and cultural association. The Ganga-Mekong Cooperation Programme, India's dialogue partnership

with ASEAN and our ARF (ASEAN Regional Forum) partnership all underlie our linkages". (YAHYA, April 2003)

Economic Collaboration India's economic involvement with the ASEAN member states ranges across several issues and levels of

industrial development. The newer members of ASEAN, such as Vietnam, Laos, Myanmar, and Cambodia, have

economies that are more dependent on primary industries than the more developed countries such as

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Malaysia, Singapore, and Thailand. Economically, the India-ASEAN relations have acquired an unstoppable

momentum. The India-ASEAN trade has crossed $80 billon. The signing of a Free Trade Area In goods in 2009

was a game changer of sorts, and now the two sides are looking to sign the India-ASEAN Free Trade Agreement

on Services and Investment. With the institutional framework in place, the two sides are now confident of

scaling the India-ASEAN trade to $100 billion by 2015 and double that volume by 2022.

The economic co-operation between India and ASEAN extends beyond trade and investments and into the

area of technological cooperation and human resource development. India has built an impressive standing as

an information technology and, in particular, software development centre. While the CLMV states are not

factored into the trade statistics on the ASEAN web because of their nascent bilateral trade with India, the

latter is keen to promote ties with these states because of their proximity and relationship with China.

Connectivity Connectivity is the reigning mantra as India deepens its diplomatic, economic and cultural ties with its

extended neighbourhood. India has vigorously backed fast-tracking a host of connectivity projects that will

quicken regional Integration and have supported the Master Plan on ASEAN plus Connectivity (MPAC). New

Delhi is also looking forward to conclusion of negotiations for an ASEAN-India Transit Transport Agreement by

2015. The Tamu-Kalewa-Kalemyo sector of the India-Myanmar-Thailand Trilateral Highway is progressing well -

the completion of this project in 2016 is poised to create a new dynamic In India’s multi-faceted relations with

the region. India have backed the extension of this highway to Laos, Cambodia and Vietnam, its further linkage

with ports in ASEAN countries and its integration with models like Special Economic Zones. Enhancing

connectivity to Southeast Asia is critical to unlocking the economic energies and enterprise of India’s north-

eastern states, which border the region.

Cultural affinity Connectivity is not just geographical and physical; what animates India's engagement with the region are

cultural and spiritual connections, grounded in history and a shared civilizational space. It is from India

Buddhism flowed to Southeast Asian countries, as Buddhists from all over the region flock for pilgrimage to

revered shrines Mahabodhi Temple In Bodh Gaya, the sacred place where Lord Buddha attained

enlightenment under the Bodhi tree. The revival of Nalanda University, the ancient seat of learning, has now

become a showpiece project of ASEAN and epitomises age-old cultural and spiritual linkages between India

and Southeast Asia region. India has signed pacts with several ASEAN and East Asian countries to make

Nalanda University an international knowledge hub.

Conclusion Underpinning this cultural alchemy and an intricate web of rail, road and maritime link is a roaring vision of an

Asian century that is becoming increasingly real with the ongoing shift of economic gravity from the north to

the south and the west to the east. There is a lot at stake in the flowering of the Asian dream; it’s about urging

hopes and aspirations of around 1.8 billion people of India and the ASEAN region who are itching to carve their

place in a changing world. The world is in a flux, and many equations may change, but the India-ASEAN ties will

not only endure, but looks set to cross new milestones in days to come.

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References Chand, M. (August, 2014). India's Enhanced Look East Pollcy takes Wing. Retrieved from Ministry of

External Affairs: http://www.mea.gov.in/in-focus-

article.htm?23855/Indias+Enhanced+Look+East+policy+takes+wing

Grare, F., & Mattoo, A. (2004, May). Beyond the Rhetoric: The Economics of India's Look East Policy.

The Journal of Asian Studies, 63(2), 532-533.

Grare, F., & Mattoo, A. (Autumn, 2002). India and ASEAN: The Politics of India's Look East Policy.

Pacific Affairs, 75(3), 477-479.

Ministry for Development of North-East Region. (April, 2010). Retrieved from Preas Information

Bureau English Raleases: http://www.pib.nic.in/newsite/erelease.aspx?relid=60558

SIKRI, R. (2009). Challenge and Strategy: Rethinking India’s Foreign Policy. New Delhi: SAGE

Publications India Pvt Ltd.

YAHYA, F. (April 2003). India and Southeast Asia: Revisited. Institute of Southeast Asian Studies

(ISEAS), 25(1), 79-103.