March 12, 2018

Indialogue, a weekly newsletter


By Aman Takkar

Hi,


Welcome to Indialogue, a weekly newsletter dedicated to analyzing major developments in India.

This week’s brief looks at a number of foreign policy developments, such as changes (for the worse) in India’s neighborhood, another attempt to reset India-China relations (featuring Tibet), and President Macron’s visit to India. On the domestic front, I cover rising optimism among Indian policymakers over economic growth, and the spat between the BJP and its coalition partner from Andhra Pradesh, the Telugu Desam Party (TDP).

As you read this newsletter, please feel free to reach out to with any questions, concerns, comments, and or advice by replying to this email. And if you enjoyed this newsletter, please consider forwarding it to a friend who might like it too. And if someone forwarded you this newsletter, you can sign up for it here

- Aman

A Re-Reset in India-China Relations?

Reports emerged last week that India was making a serious attempt to resetrelations with China in the lead up to Prime Minister Narendra Modi’s visit for the Shanghai Cooperation Organization (SCO) summit in June. These reports were also accompanied by news that the Cabinet Secretary of India P.K. Sinha, at the request of the new Foreign Secretary of India, Vijay Gokhale, had issued a classified memo to government and bureaucratic officials, discouraging them from attending events organized by the Tibetan government-in-exile.

This move is the third time (by my count) that the Modi government is attempting to “reset” relations with China, and while there was some outrage that India would change its behavior with the Dalai Lama to appease China, there is precedence of the government doing so when engaging China. The question remains whether the two countries can overcome numerous challenges in the relationship - the 73-day standoff in Doklam, Chinese opposition to Indian membership to the Nuclear Suppliers Group, and Chinese opposition to the designation of Masood Azhar, leader of terrorist group Jaish-e-Mohammed, as a terrorist in the UN Security Council Sanctions Committee - and “reset” relations.

Point/Counterpoint:

The Times of India ran an editorialsaying “The only way India can secure its own interests is by standing up to Chinese pressure. Rolling over and restricting Tibetan activities to please Beijing is a recipe for disaster.”

Sreemoy Talukdar argues “a careful reset in ties is being planned, with both sides dropping subtle hints that they are ready to deescalate tension, reduce irritants in ties, reengage and let the dialogue mechanisms that have been laid over the years, continue.”

Insight: The multiple “resets” and tensions in the Indo-China relationship underscore what many scholars have said, and I agree with them: India and China need a new set of norms that allow them to engage with each other where they can, and avoid conflict where they cannot. Former NSA Shivshankar Menon’s book “Choices: Inside the Making of Indian Foreign Policy” outlines India and China are currently committed to “maintaining the status quo and where they had doubts about a part of the boundary, they would actually sit down and talk their way through the problem.” But as both countries emerge as powers within Asia, they need to rethink how they can continue to engage with each other while deciding how they will manage disagreements.

Not So Special: BJP and TDP’s Spat

The BJP’s biggest ally from Southern India, the Telegu Dasam Party,announced last week that ministers in the Central government belonging to the TDP would quit from the government.

Background: The reason for this decision dates back to 2014, when Andhra Pradesh was divided to create a new state of Telangana. As part of the division, the government, led by Manmohan Singh and the Indian National Congress’ coalition at the time,announced that Andhra Pradesh would be offered a “special category status.” The status was extended since the state was at a disadvantage from the division, particularly after losing its capital, Hyderabad, to the new Telangana. A laterdecision by the Finance Commission, however, reversed this deal by announcing that distinctions between “special and general” states would be limited, and that the government would instead “account the level of backwardness of states” when transferring funds and that “a revenue deficit grant would be provided for certain states,” including Andhra Pradesh. However, Andhra Pradesh’s Chief Minister and leader of the TDP, Chandrababu Naidu, has been demanding that the earlier promise of “special category status” be met. Lack of an agreement between the two parties has brought us here today.

Prime Minister Narendra Modi with Andhra Pradesh Chief Minister Chandrababu Naidu

Why This Matters?: The situation is still evolving, but as of yet, the TDP has not yet pulled out of the coalition entirely. The resignation of TDP ministers is supposed to signal its displeasure with the BJP. But a decision by the TDP to pull out of the coalition would be a significant development for the BJP’s alliance going into the 2019 elections.

Neighborhood Woes Continue to Grow for India

Developments in India’s neighborhood this week continue to be troubling for India. To the south, Sri Lanka became the second nation in South Asia todeclare an emergency in the past two months after communal violence between Buddhist and Muslim groups on the island. Also this week, Nepal’s Prime Minister KP Oli received the Pakistani Prime Minister, Shahid Khaqan Abbasi, in the first official visit by a Pakistani Prime Minister to the nation in nearly 24 years. Although the developments in Sri Lanka had little to do with India’s actions, continuing destabilization in region while once-allies court geopolitical opponents has created a perfect storm for India’s “Neighborhood First” policy.

Point/Counterpoint:

Suhasini Haider argues that “Almost four years after Prime Minister Narendra Modi began his term with a “Neighbourhood First” moment, by inviting leaders of all South Asian Association for Regional Cooperation (SAARC) countries to his swearing-in ceremony, India’s neighbourhood policy is clearly adrift. New Delhi’s connect with its South Asian neighbours is weaker than it has been for a very long time.”

Although not from this past week, Dhruva Jaishankar offers a counterargument to this view,saying “The political, economic, and military interdependence between India and its smaller neighbours (not counting Pakistan, Afghanistan, and Myanmar) is far too great, and is in fact deepening. India can certainly do a better job in building consent, trust, and goodwill with these countries. But reports of India’s demise as a regional power are greatly exaggerated.”

Indo-French Ties Get a Boost

President Macron of France was in India this week, and the bonhomie was on full display. Not only was Macron invited to a special cruise on the Ganges with Prime Minister Narendra Modi, but the two leaders also launched the International Solar Alliance, an alliance of 121 countries announced by Prime Minister Modi to harvest solar energy. However, the focus of the meeting was on statements by both leaders on the Indo-Pacific. Indeed, the two countriesannounced a “Joint Strategic Vision of India-France Cooperation in the Indian Ocean Region” which included a reciprocal logistics agreement allowing Indian Navy ships to use French naval facilities in the Indian Ocean.

Bigger Picture: As Macron declared that “France wants India as its first strategic partner here, and we want to be India’s first strategic partner in Europe, and even the western world,” there is a great opportunity for a deepening of ties between France and India moving forward. However, India will have to see what Macron does on China’s Belt and Road Initiative, which could drive a wedge between the two countries should France declare support for the BRI.

Growing Optimism Among Policymakers on Economic Growth

The announcement last week that India grew at a rate of 7.2% in the quarter from October-December last year has createda sense of optimism among policymakers that India’s economy has recovered from the economic shocks created by the demonetization move in Nov. 2016 and the rollout of the Goods and Services Tax. Indeed, India’s Economic Affairs Secretary, Subhash Chandra Garg, said that India’s economy had “bottomed out” when India grew at a rate of 5.7% from April-June 2017. The Vice-Chairman of NITI Aayog, the government’s policy think tank, alsoechoed this optimism saying “The good news is that this has all started changing. Investment cycle has turned. The third quarter results numbers are very good...that was the bottoming out of our economy. The economy is on the rise again.”

Bigger Picture: India’s economic growth does look like it is headed in the right direction, but there are still obstacles on the horizon. Chief among these concerns is inflation, which the RBI hadexpressed concern over at a recent meeting of the Monetary Policy Committee. Also concerning is this report by The Wire, which shows how Demonetization and GST Hurt Employment according to data from the Ministry of Labor.

Stories you might enjoy:

Given last Thursday was International Women’s Day, here’s the best of last week from the women whose readings I’ve benefited from pretty much every day:

Snigdha Poonam wrote this incredible story about the journey of Akash Yadav, from shooting his classmate when he was 14-year to the obstacles he faced after leaving juvenile prison and becoming criminal gang leader in Haryana.

Snighdha has also got an amazing book out right now called “Dreamers: How Young Indians Are Changing Their World.” Read an excerpt here.

Sadly, for those of us based in the States, I haven't seen it available here yet. Readers in India and the UK can find it on Amazon.

Devirupa Mitra broke an exclusive story on how “the classified agreement signed by India to develop military facilities and station Indian military personnel at Seychelles’s Assumption Island [w]as been leaked online.”

Rahiba R. Parveen wrote about how “air pollution, both indoor and outdoor, is linked to rising lung cancer cases among non-smokers, particularly the young & women.”

Barkha Dutt argues that “The center-right has displaced the center-left as India’s dominant political narrative” in light of the BJP’s victory in Tripura and the destruction of a statue of Lenin in the state by BJP supporters and workers.

Suhasini Haider (along with Josy Joseph) stated that “The new Joint Strategic Vision for the Indian Ocean [between India and France] sends the message that India is not limiting itself to the “Quadrilateral” arrangement with the US and its allies Japan and Australia to develop interests in the “Indo-Pacific

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