April 14, 2012



I have received many queries from my readers asking for my comments on the security implications of normal economic relations with Pakistan.I will categorise them as follows:

LOW SECURITY IMPLICATIONS: Trade in goods. Expansion of bilateral trade in goods can reduce the trust deficit between the two countries and facilitate a forward movement in improving the comfort level. Its security implications will be the least in the form of an increasing flow of Pakistani intelligence personnel and jihadi leaders to India under the cover of businessmen for establishing contacts with leaders of organisations such as the Indian Mujahideen (IM), for funding them and for giving them instructions. These threats could be managed by the intelligence agencies which have a long experience of dealing with Pakistani intelligence activities in Indian territory and have a good data-base on this.Trade in goods would not enable the ISI to destabilise our economy.


Trade in services and Foreign Direct Investment (FDI).This could enable the Pakistani intelligence to acquire a key presence in sensitive sectors of our economy such as banking, telecommunications, information technology etc and use the presence to disrupt our economy and collect strategic intelligence regarding our economic deficiencies that could be exploited by them.Our intelligence agencies are not yet in a position to deal with such threats effectively and do not have a good data-base on the likely threats and modus operandi of the Pakistani agencies.Even in the case of China, we went slow in these two sectors and even now our intelligence agencies have strong concerns over the wisdom of our allowing Chinese telecom and internet companies a presence in India. It has taken our intelligence agencies nearly 15 years to build up a data-base on Chinese companies with suspected links to their intelligence.They managed to build the data base because they got a lot of data from the intelligence agencies of Western countries which closely monitor Chinese companies.Such data-sharing will not be possible in the case of Pakistani companies which have a little presence in the economies of Western countries. We should, therefore, go slow and build up the capabilities and data-bases of our agencies before we allow Pakistani companies in these fields.


Foreign Institutional Investments in our stock markets. This has the highest security threat.Allowing either China or Pakistan to invest in our stocks will give them a capability to disrupt our economy through manipulation of their stock holdings.Our intelligence agencies will always be against any FII by either Pakistani or Chinese investors in our stock markets.Should not be allowed.( 14-4-12)

( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai, and Associate of the Chennai Centre For China Studies. E-mail: seventyone2@gmail.com . Twitter @SORBONNE75 )

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