Conflict, Policy

Review: The Deluge – The Great War and the Remaking of Global Order 1916-1931

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Photo credit: Malene Korsgaard Lauritsen. Penguin Random House, pp. 672

I loved Adam Tooze‘s sweeping take on the origins of America’s global dominance in the aftermath of World War I. It presents a compelling narrative of the rise of an American global order in the aftermath of the WWI. He does so by placing the viewer in a politically fraught 1916-Great Britain with the Prime Minister Lloyd George examining British progress in WWI. Incidentally, as Tooze explains, it was also the period when the United States began to slowly overtake Britain in terms of economic production. Tooze deftly guides his audience through the numerous events, leaders and the international forces that helped bump America’s ascent and the remaking of the global order.

World War I is an extremely rich field of research and study, yet Adam Tooze’s focus on economic history allows readers to examine crucial decisions that shaped the course of the war. For example, the role of American credit in Britain’s participation in the WWI is is likely to stir consternation around the extent to which 10 Downing Street depended on Washington’s Federal Reserve, Wall Street bankers and private lenders to pay for Great Britain’s war with the Central powers. When America decided to intervene, Washington’s participation was funded by the domestic liberty bonds that were brought by the common populace (sold through a judicious mix of propaganda, marketing and force). Tooze also constructs the dilemmas facing the other international players during the course of the global conflict. A furtive Russia, an beleaguered Germany, a wounded France and aggressive Japan were only some of the forces that President Wilson and his successor Mathew Harding had to contend with.While President Wilson’s ambitions to make America a global leader guided his thoughts, he was often cut to size domestically by a restive Republican senate.  The fresh legs of American soldiers’ offered fresh impetus to the Allied forces in the spring of 1918, yet Britain and France had already inflicted decisive losses to the Central powers in the war by then, setting them on course for victory.

However, it was the USA that would emerge superior. In the Deluge, Tooze time-travels to the origins of the 100-year American world order, demonstrating the rather-inadvertent rise of American power in WWI. America’s rise to global power was far from straightforward, and neither obvious nor planned, and the British Empire’s economic decline was instrumental in unchallenged American supremacy until the Cold War. Tooze’s work is ambitious, and his telling of American rise is a must-read.

 

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Policy

An Analysis A Day: Himachal elections – Where are the women candidates?

This 3-part article is written for prajnya.in as part of the Gender Election Watch Project on Himachal Pradesh and Gujarat elections

Earlier this week, I and Dr. Swarna Rajagopalan from Prajnya began to investigate gender statistics on the forthcoming Himachal elections that are due to take place on the 9 November 2017. Subdivided into 12 districts and 68 Assembly Constituencies (ACs), the state will witness a single phase election. Electoral battles are often a face-off between two key national parties – the Indian National Congress (currently led by the incumbent state Chief Minister Virbhadra Singh) and the Bharatiya Janata Party (led by Prem Kumar Dhumal). With little space for a third alternative, voting remains largely restricted between these two parties; both parties assembled a total vote share of 81 percent in the State Assembly elections in 2012 which the Congress won.

voting

File photo from India News. http://bit.ly/2iNxZyM

An unforgiving observation, however, is the disproportionate gender imbalance in the electoral mechanics. So far, our research has identified merely 15 women candidates from three major parties contesting in the polls – 4 from the Congress, 8 from the BJP and 3 from BSP vis-a-vis a total number of 400-odd male candidates. Although the list expands to 20 when we include independent women candidates, yet the ratio of men to women contestants have remained disproportionate .

No Name of the Party Number of Candidates contesting
1 Bahujan Samaj Party 32
2 Bharatiya Janata Party 68
3 Indian National Congress 68
4 CPI/CPI (M) 30
5 All India Trinamool Congress Data not available
6 Nationalist Congress Party Data not available
Total Number 198*
Total Number of Women candidates 20*

*Based on nomination data from the Chief Electoral Officer, Himachal Pradesh

In the Himachal state elections since the turn of the century, the number of contesting women candidates contesting have remained roughly around 8 percent. In other words, for every 100 people contesting in an election, there are merely 8 women candidates. Elected women candidates average roughly around 6 percent of the total 68 elected representatives in the Himachal State Legislative Assembly. Interestingly, the figure was the lowest in 2012, when only 3 women candidates were elected alongside 65 male representatives.

https://infogram.com/gender-election-watch-himachal-state-assembly-elections-2017-1gqo2qn3kvgw278

This statistic is further intriguing considering how female voting numbers have been traditionally higher over the last three assembly elections in Himachal Pradesh. In 2003, 2007 and in 2012, the percentage of female voters was nearly 75 percent vis-à-vis male voters who were nearly 70-71 percent. Why are parties not fielding more women candidates? The state is yet to see a women Chief Minister.

Where are the women contesting from:

No Party Name of Women Candidates Place they are contesting from
1 INC Asha Kumari Dalhousie
2 INC Viplov Thakur Dehra
3 INC Champa Thakur Mandi-Sadar
4 INC Anjna Devi Una
5 BJP Reeta Devi Indora (SC)
6 BJP Sarveen Shahpur
7 BJP Indu Bala Palampur
8 BJP Kamlesh Kumari Bhoranj (SC)
9 BJP Vijay Jyoti Sain Kasumpti
10 BJP Shashi Bala Rohru (SC)
11 BJP Neelam Nayyar Chamba
12 BJP Vinod Kumari Chandel Doon
13 BSP Pinki Devi Nagrota
14 BSP Saroti Devi Barsar
15 BSP Manjana Devi Jawali
16 Indpndt Nirmala Chauhan Karsog
17 Rashtriya Azad Manch Renuka Dogra Kullu
18 Indpndt Roshani Sharma Mandi
19 Lok Gathbandan Party Paro Devi Sarkaghat
20 Indpndt Kumari Vandna Sullah

Does the system discourage women from participating? What seem to be the barriers to entry? We find that reservation for women candidates can encourage more women to contest and win in elections. The results of the Panchayat and Zila Parishad elections – where reservations apply – illustrate this clearly, as a 2015 State report highlighted:

“In Himachal Pradesh there are 3243 Gram Panchayats, out of which 1639(50.54 per cent) seats have been occupied by women in the 2011 Panchayat elections. Out of total seats occupied by women, 987 (60.21 per cent) occupied by general women, 421,(25.68 per cent) scheduled caste women, 104 (6.34 per cent) scheduled tribes women and 127 (7.74 per cent) occupied by OBC women. Similarly, out to total 77 Chairman Panchayat Simities seats, 42 seats (54, 55 percent) of the seats in this category have been occupied by women. Among total seats occupied by women in Chairman Panchayat Simities category, 20 (48 per cent) occupied by general women, 13(31 per cent) by scheduled caste women, 4 (9 per cent) by scheduled tribes women and 5 (12 per cent) occupied by OBC women. Out of the total 12 seats chairpersons of Zila Parisad seats, 6 (50 per cent) of the seats have been occupied by women in 2011 elections.”

End of Part 1

Stats calculated based on public available data on candidates, and from previous Election Commission Reports.  

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Policy

An Analysis A Day: Re-capitalisation of Public Sector Banks – How did we get here?

The Finance Minister of India Arun Jaitley dispensed a mini-budget on 25 October 2017 in an attempt to ward off an ominous economic slowdown. Among the key measures announced, the Ministry’s plan to infuse nearly 2.11 lakh crore into highly-stressed banks brought cheers and optimism, reinforced ubiquitously by bank stocks increasing by nearly 2 percent in the NIFTY index and SBI and PNB adding nearly 50 percent on their stock values. Broadly, this signalled the government’s brave attempt to tackle the lingering Non-Performing Assets (NPAs) scenario, where 18 Public Sector Banks (PSBs) managed to rack up an astonishing NPA sum of 9.5 lakh crores. As a CARE report observes, SBI, Punjab National Bank, Bank of India, IDBI Bank, and Bank of Baroda account for nearly 48 percent of the total NPAs. Before we better understand what recapitalisation entails, central to this are two questions: how did banks come to such a staggering NPA figure? It was not as if the borrowers defaulted overnight or within the span of a year. Second, what was the nature of political (in)action that was party to this crisis? Despite the policy measure being a structural one, it is imperative to examine whether excessive interference or lack of requisite political direction led us to this predicament.

Inheriting loss

Firstly, the NPA scenario did not unravel in a jiffy. From nearly 40,000 crores in 2007, PSBs were already racking up NPAs to the order of 1 lakh crores in 2011, a figure that subsequently rose to 2.11 lakh crore by September 2013. Despite banks instituting loan recovery policy – mandated by an RBI directive in 2007 – the above mentioned PSBs failed to recover or salvage bad loans. Interestingly, NPAs totalled around 42,106 crores (not lac crores!) in 2007. Over a ten-year period, NPAs have risen by nearly 2000 percent!

Secondly, politics and banking were strange bedfellows, further blighting the scenario. Jaitley pointed to the indiscriminate lending exercised by banks during the period between 2007 and 2012, when the economic growth was more stable. But, the UPA-II was well aware that NPAs had increased to nearly a 1 lakh crore in 2011, yet little was done to adopt far-reaching measures and stymie lending or salvage bad loans? The Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2012 for removing regulatory bottlenecks in the recovery of bad debts – such as including cooperative banks or using immovable property for recovery – was too little, too late and failed to tackle underlying structural problems. It wasn’t until former RBI governor Raghuram Rajan held accountable the industry and banks for under-reporting NPAs, that the hornet’s nest was finally stirred. The NDA government took stock of this problem up on its election in 2014 and subsequently promised to re-infuse funds into the banks to meet Basel III norms, yet waited for nearly four years before initiating this mega process, conveniently prioritising political capital.

India’s Lehmann Brothers moment?

Disappointingly, few lessons seem to have been learnt from the 2008 subprime global crisis, especially as far as banking sector bad loans remain concerned.The NPA scenario feels more like the 2008 mortgage crisis, and derailing taxpayer’s monies. Huge bailouts were offered by the US government to the big banks.  While Indian banks are cheering on the government’s move, they ought to check their lending impulses in the future and walk a tighter rope between encouraging credit and tackling bad loans More accountability and transparency initiatives in the banking sector are the need of the hour. Yet, PSBs maintain a stoic silence on this NPA farce.

Relief for Banks

Besides the 18,000 cr to be extended through budgetary support – the government will foot this bill from the taxpayer’s money – around 1.35 lakh crore will be raised through the instrument of recapitalisation bonds. Selected banks will add the government directed sums to their books, increasing their net value and then use this added money to buy government bonds. So, the idea that there would be a line of trucks making moves from the RBI to different banks doesn’t figure here. There is no actual transfer of sovereign money. Banks, in turn, use these government bonds to either raise capital through selling them in the international market or using them to generate income through interest on them.

Depending on the nature of the bonds, it might or might not contribute to the fiscal deficit. But it is undoubtedly a Happy Diwali for the stressed banks.

 

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military

On the MI-171E Chopper

mi-171-2The MI-171E is a twin gas turbine versatile helicopter manufactured by AVIA Russia (Russia Helicopters) that has been supplied by Russia to nearly 80 countries globally. The MI-171* series was developed from the Mi-8 airframe, and has been converted for civilian purposes. The engines mounted on the chopper generate 2500-2700 horsepower [Try putting that amount of power in a car, as Nissan did, this is what happens]. The build is quite robust and it is equipped to operate on a single engine as well – in the event of an engine failure.

The medium-lift Mi-171 E can operate in hostile weather conditions (temperatures of -50 degrees to 50 degrees Celsius), can operate at high altitudes, and is equipped with avionic systems from BAE and Russia. The chopper can carry loads of 4 tonnes (4000 kg). Further, it can accommodate 26 passengers (and 37 in case of rescue operations), and the passenger units can be replaced to carry 12 stretchers. It can travel around 540-610 km with maximum fuel; however, range can be increased by adding fuel tanks (a maximum of four) to the helicopter.

Tactical usage in combat roles

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While the above version is a civilian variant, the Mi-171 is a convertible and can be used in combat roles. The Mi-17V-5 is a military variant that is manufactured by Kazan helicopters, a subsidiary of Russian helicopters. It can be equipped with Sthrum missiles, a 23mm machine gun, PKT (Pulemyot Kalashnikova Tankovyi, Kalashnikov Machine-gun Tank version) machine guns and AKM sub-machine guns besides having eight firing posts – this means that soldiers can fire from different sections/positions in the chopper – equipped with machine plates to protect the gunner. Further, the crew members (operator, navigator and technician) are also protected through armor.

For instance, the Afghan National Security Forces Special Mission Wing ordered 30 of these helicopters to use them in counter-narcotics, counter-terrorism, SAR and special military operations. The choppers can fly to an altitude of 20,000 feet and can be used to attack Taliban installations in the mountains of Spīn Ghar, also known as the White mountains in eastern Afghanistan – the nearest access point to the mountains is the town of Parachinar in Pakistan. The temperatures here are quite unforgiving and the Russian choppers are likely to be operate better in such environments. Similar US aircraft suffered a major blowout in inclement weather in 2013 and this grounded 80 US choppers. The Russia Mi-17 V5 has demonstrated better resilience globally as well and its expansive area and weight only add better armor to small-arms firing by the insurgent groups.

However, their weight and size offer a huge surface area that makes them particularly vulnerable to enemy attack. Should the choppers fly at low altitudes, they can be attacked by Stingray missiles – this was witnessed in the 1999 war between India and Pakistan. An Indian Mi-17 chopper was shot down by a shoulder Stingray missile used by Pakistani irregulars. This does not amount to their inability in offensive operations but merely limits their use in tactical battlefields. The Mi-17 choppers were flown at altitudes of over 20,000 feet since the average heights of the mountain ranges exceeded 18,000 feet. While the IAF recognized the limitations of the chopper, it was quick to admit that this chopper was not configured with a self-protection flare dispenser.

Missiles can also be mounted on the chopper, since the Mi-8 frame supports such platforms. However, the chopper is unlikely to carry sophisticated missile platforms. The Sri Lanka Air Force also used these helicopters in combat and SAR operations against the LTTE insurgent forces. However, they also used a sturdier variant – Mil Mi 24 – built on the Mi-8 frame in specific combat roles against the insurgents.

The Mi-17 Series is not an offensive chopper, but it’s versatility helps it being employed in a wide variety of scenarios.

*Note: It’s called Mi-17 for export purposes. 

 

 

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Uncategorized

What can India expect from the new government in Australia?

The outcome of the ongoing Australian elections are unlikely to trigger significant policy shifts in India-Australia bilateral relations, writes NPFP fellow’16 Hemant Shivakumar

Soon after the 2016/17 budget was announced in early May, the Australian Prime Minister Malcolm Turnbull announced an expected double dissolution of the Parliament, calling for elections on the 2nd of July 2016. While PM Turnbull was widely expected to win going into the elections, Turnbull’s flip-flop and lack of clarity issues such as superannuation, negative gearing and the Safe Schools funding have weighed heavily on the popularity of the Liberal Coalition and looks to have costed them dearly in the Senate.

For New Delhi, a new government post-elections down under is unlikely to trigger significant policy shifts. Both Malcolm Turnbull and the Opposition’s Prime Ministerial candidate Bill Shorten broadly share similar views on engaging with India. India and Australia can therefore expect sustained focus on key bilateral matters such as energy, economic relationship, maritime security and disaster management among others until 2019, when both countries will go to the national polls again.

Economic partnerships

Firstly, India’s economic growth is a huge attraction for Australia. The new government in Australia will aim to plug the decline in India-Australia trade through the Comprehensive Economic Cooperation Agreement (CECA). Australia will also encourage New Delhi’s integration – into the Asia-Pacific economic architecture – through key trade treaties such as the Regional Comprehensive Economic Partnership (RCEP) and the Asia Pacific Economic Cooperation (APEC) community.

However, despite Canberra’s motivations to forge stronger economic ties with New Delhi, Australia’s diplomatic attention will focus on China. Beijing’s assertive actions in the South China Sea offer significant concern to Australia’s decision-makers already, but building stronger Sino-Australia ties remain an overarching priority. Even structural changes and re-balancing in the Chinese economy will not scupper Canberra’s domestic political enthusiasm towards Beijing. During an official visit to China in April 2016, the Australian PM endeavored to focus on the economic relationship amidst regional security concerns.

New Delhi will also find that Australia will maintain a tepid attitude towards large-scale investment in India. During his visit to Australia earlier in March, Finance Minister Arun Jaitley actively solicited Australia’s big fund bodies – the sovereign wealth, super and pension funds – to explore investing in infrastructure and rail in India. But Australian investors remain shy of buying into the Indian market – partly deterred by regulatory hurdles and less attractive returns on their investments. India can hope that its reformist agenda and slow growth in developed markets eventually attracts large investments from conservative big fund agencies in Australia.

Maritime Security

Secondly, as USA continues to rebalance in the Asia-Pacific, maritime cooperation has come to symbolize the growing strategic convergences in the India-Australia partnership. Australia’s Defence Whitepaper 2016 underlines how it views India’s role as a partner in the Indo-Pacific sphere. The Indian Defence Minister’s endorsement of Australia’s Indo-Pacific concept at the recently concluded Shangri-La dialogue in Singapore and PM Modi’s vision of the Indian Ocean convey both eagerness and direction to Australian policymakers. Canberra will be keen to use forums such as the Indian Ocean Rim Association (IORA) and the East Asia Summit to build consensus on regional maritime leadership and cooperation.

Energy Security

Finally, energy security and cooperation will be a key driver in India-Australia engagement. Although Adani’s proposed US$ 10 billion Carmichael coal mine project in Queensland has run into rough weather, importing high quality coal from Australia remains vital for India’s power necessities. While political leaders in Australia have dithered on tackling project delays over the last few months, the new government could possibly squeeze initiative to tackle the many roadblocks in the project.

On the other hand, India’s uranium imports from Australia are due to begin and Australia has backed progress in nuclear cooperation too. In the near future, renewable energy will also emerge as an important component in the India-Australia energy mix. If Australia’s support for the International Solar Alliance – which India launched at the Paris talks in 2015 – was any indication, Australia will leverage its comparative strengths in solar power generation to initiate solar energy technology transfer to New Delhi.

Both national governments in India and Australia should be credited for maintaining constant momentum in bilateral ties over the last few years. Visits by the Indian Prime Minister and the Finance Minister to Australia have cemented the growing strategic ties but relations remain sub-optimal and need both economic and geopolitical heft. While sustained focus on key issues will remain, both nations should expand cooperation in sectors such as agricultural research, tackling climate change issues, and aid partnership.

 

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Foreign aid

Indian and Australian aid programs to the Pacific: Opportunities for trilateral aid cooperation

India and Australia can work together to address the clear and present danger of climate change in the Pacific Islands through trilateral aid partnerships, writes Hemant Shivakumar

An edited version of this article appeared here

After the Indian Prime Minister Modi announced India’s big-ticket foreign policy reform – the Act-East Policy – in 2014 at Myanmar, he travelled further east to visit Fiji. Figuratively, it was a fitting statement of intent: flying to the easternmost part of the globe to give shape to his words where he pressed for deeper development partnerships between New Delhi and India’s hitherto neglected Pacific neighbours.

Development assistance partnerships have emerged as recognizable tool in Indian foreign policy thinking. The volume of Indian assistance has grown since the turn of the century – rising seven-fold to rival and surpass many OECD-DAC donors. Modi’s renewed commitments to the Bainimarama regime in Fiji and to the other Pacific neighbours signal the use of development partnerships in India’s renewed engagement with the Pacific. However, as an emerging donor, India’s aid history to the Pacific Islands is relatively new.

Soon after New Delhi was inducted as a dialogue partner into the PIF forum in 2002, the Indian republic announced a grant-in-aid of US$ 100,000 to each of the PIF nations to be used towards socio-economic development. During the visit of the Minister of State for External Affairs E.Ahamed to Cook Islands in 2012, this grant was raised to US$ 125,000 and subsequently increased to US$ 200,000 during Modi’s visit in 2014. In addition, New Delhi’s credit lines through the EXIM Bank have helped build a decade-long partnership towards industrial development of the Fijian sugar businesses.

Rising commitments aside, India’s aid volumes fall well behind behind the other major donors in the Pacific – Australia, China, Japan, USA and New Zealand. Australia for example has successfully maintained a strong focus on the PIF despite a shrinking aid budget. However, political differences with Canberra in the recent past have driven PIF nations to expand its range of development partners, partly explaining the rise of assistance efforts from China, India, and EU in the Pacific.

In March 2016, some PIF nations were among the first countries to ratify the Paris climate change agreement; these nations have also called for others to do the same. PIF nations have also expressed unhappiness about Canberra’s reluctance to help tackle climate change issues, while appreciating India’s leadership on the same. During the FIPIC forum meeting at Jaipur in 2015, the President of the Marshall Islands called India a ‘clean energy crusader’. Not forgetting Canberra’s differences with the islands, Australia’s proximity to the Pacific islands and the presence of a large Pacific contingent in its own shores make the climate refugee problem a looming threat. Despite PIF nations blaming Canberra’s lack of enthusiasm, climate disasters can force these nations to make Canberra their first port-of-call. In addition to its own aid efforts, Canberra could therefore consider providing support to India’s development assistance projects in the region to tackle climate change.

Surprisingly, the aid programs of India and Australia already share a lot of commonalities – overall and in the Pacific too. The overall size of the Indian and Australian aid programs are nearly US$ 4 billion (in purchasing parity terms). The highest proportion of Indian assistance (nearly US$ 80 million) and Australian aid (nearly US$ 700 million) in the Pacific is directed towards the Melanesian region – key recipients include Fiji, Vanuatu, Solomon Islands and Papua New Guinea. Given Canberra’s bigger aid budget to the Pacific, countries such as the Cook Islands, Kiribati and Nauru also receive considerable aid support as well. Both nations focus resources on capacity-building measures such as skill-training, building economic infrastructure and improving social life in the islands. While maritime links, commercial interests and common strategic goals are bringing India and Australia closer, trilateral partnerships to tackle climate change can use the comparative strengths of each nation’s aid program, and reap dividends for all involved.

In the Pacific, trilateral cooperation between DAC-non DAC donors is an emerging trend. China is working with Australia to reduce malaria in Papua New Guinea; it is also partnering with New Zealand for a water supply project on the Cook Islands. With satellite data undoubtedly crucial in supporting the PIF nations against climate change vagaries, Australia could begin with supporting New Delhi’s commitment to set up a satellite monitoring station in the Pacific. Moreover, working with India’s renewable energy sector to build solar or wind energy resources in the islands can help the island nations reduce their dependence on fossil fuels.

An India-Australia trilateral development partnership with a recipient nation in the Pacific therefore seems ripe: building on each nation’s interests and history of engagements in the region to deliver aid. Such efforts are unlikely to face a broadside among domestic constituents in Australia, who desire strong leadership from their government on climate change. For India, knowledge exchange with a DAC donor can help improve New Delhi’s global development assistance programming efforts. Doing so will also move away from a hard-power narrative that threatens to override India’s growing engagements in the Asia-Pacific story.

 

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Why should India bet big on economic integration with the Asia-Pacific?

China is racing to fix speculations around its stuttering economy by laying plans for a domestic consumer-led model, but it has not let its global guard drop: the cargo train that clocked an impressive 10,000 kms to Tehran from China’s eastern city of Yiwu underlined Beijing’s focus on strengthening economic links.

However, attention will swiftly return to the Asia-Pacific, where China’s alleged deployment of surface-to-air missiles in the South China Sea is further exacerbating fears and drawing caustic reactions from several countries in the region. Even as President Obama and leaders from ASEAN nations reassert the need for a rules-based order in the region, it is not yet possible to determine the shape and course such an Asian order might take. During the last few months, a resuscitated Iran has drawn New Delhi’s attention westward. Considering the frantic nature of geo-political developments to its East, New Delhi will do well to assess progress on its engagements in this region. Speeding up India’s economic integration measures to match with its growing maritime ambitions in the Asia-Pacific should underpin the republic’s power goals in 2016.

Since the turn of the 21st century, the Asia-Pacific region has become central to Indian strategic thinking. The Act East policy, unveiled by the Indian Prime Minister Narendra Modi in late 2014, reinforced this ideal. And during his visits to , Australia and at the ASEAN summit, Modi vigorously underlined how India’s destiny was tied to the future of the Asia Pacific.

Given India’s recent growth rates and maritime prowess, countries such as Japan, the Philippines and Australia have lent support to New Delhi’s notions of an enhanced role in the region, leading India to increase its maritime commitments with Japan and Australia in 2015. Furthermore, India’s strategic competition with China, have also driven its increased naval enthusiasm in the Region.  As David Brewster explains, ‘India’s engagement with East Asia has occurred in the context of long-term strategic competition with China’.

Yet, just as Beijing grows increasingly restless in the Asia-Pacific, New Delhi’s eastward economic gallop has considerably slowed.

Even as New Delhi strengthens its ties with the ASEAN – through maritime exchanges and bilateral visits by Indian leaders – several ASEAN countries —  such as Philippines, Cambodia and Indonesia are yet to ratify the India – ASEAN agreement on services trade. In August 2015, New Delhi began a long overdue review process on its trade agreement on goods with ASEAN.

India’s interests in the multilateral ASEAN-led Regional Comprehensive Economic Partnership (RCEP) agreement have also meant that it has deferred the conclusion of a bilateral trade agreement with Australia. Despite India’s optimism – and Chinese pressure – for an early agreement on RCEP, any conclusion on the agreement, which was due in 2015, could take a lot longer. As Commerce Secretary Kher points, delays in multilateral trade agreements like the RCEP will in advancing global value chains. Also, the commercial incentives that the US-led Trans-Pacific Partnership generates for partner countries – six of which are also in the RCEP – could further increase these costs in the region.

New Delhi could use its growing global stature to reinforce its eastward economic goals. China’s aggressive military posture – and US’ rebalancing to a lesser extent – is effectively forcing powers like Australia and Japan to reconsider and reshape their national security priorities. Tokyo is stepping up its defense spending, as is Australia with the 2016 Australian Defense Whitepaper outlining Canberra’s US$ 30 billion outlay over the next decade. Australia and Japan are already drawing closer, and partly aided by Washington’s encouragement, are willing to co-opt India as a strategic partner in the region. In addition, East Asian nations are keen to deepen economic ties with India. The former Australian prime minister Kevin Rudd even boldly suggested that India could join key regional economic organisations such as the Asia Pacific Economic Cooperation (APEC) forum. In addition, East Asian nations are keen to deepen economic ties with India.

However, concerns remain about the pace of India’s economic response to these developments. Since 2012, India’s share of trade with prominent Asia-Pacific nations such as Japan, Australia and ASEAN nations has declined and New Delhi’s commercial partnerships – with Australia, Vietnam, and Japan among others – remain underdeveloped. Japanese exports continue to face tariff barriers that deter their flow to India. Despite Australia offering tariff concessions, India has delayed negotiations on a key bilateral trade agreement with Australia that was expected to be concluded in early 2016.

Developing border infrastructure at trading outposts between India and Myanmar – India’s gateway to Southeast Asia – will improve trade between India and the ASEAN nations. But budgetary allocations to develop such infrastructure have been cut by nearly 30 percent in FY 2016/17 from the previous year.

Whether or not India partakes in larger maritime security arrangements in the Asia-Pacific, strengthening economic ties with the region should be non-negotiable. Modi can begin by pressing his administration to conclude a pending trade agreement with Australia before the 12th round of RCEP negotiations begin in April at Perth. With New Delhi’s emphasis on economic cooperation, as India’s foreign secretary argues, developing connectivity will be crucial. To improve bilateral trade New Delhi should speed up port and road connectivity projects to Myanmar and Thailand, and address tariff concerns to improve bilateral trade. India is undoubtedly looking global, and as it transitions from being a balancer to that of a leading power in the face of Chinese restiveness, it should make better use of its growing ties in the Asia-Pacific to strengthen economic linkages. As the Vietnamese Ambassador to India Ton Sinh Thanh underlined recently, India not only has to act east, but act fast.

You can find an edited version of this article here with the East Asia Forum based in the Crawford School of Public Policy at the Australian National University.

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