Indo-Pak Relations: Through the lens of Trade

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by Adarsh Kumar

Many were aghast in 2007 when Dr. Manmohan Singh dreamt of having breakfast in Amritsar, lunch in Lahore and dinner in Kabul. This thought remained a dream until our dynamic Prime Minister Narendra Modi made this come true last week. After signing a plethora of agreement with Russia, Modi inaugurated Indian Government financed Afghani Parliament and gifted three Mi-25 attack helicopters to Afghanistan. During his speech, he said that India is grateful to have a friend like Afghanistan and criticized neighboring countries for supporting terrorism. It was an indirect indication towards Pakistan, but by the time Pakistan Media headed towards this argument Mr. Modi tweeted about his visit to Pakistan and wished a happy birthday to his counterpart Nawaz Sharif, this incidence put South Asia in amazement. Plethora of articles popped up in every newspaper and Indo-Pak media termed this act as breaking news, although a Pakistani news channel questioned, why Narendra Modi and his fleet entered into a sovereign state without a visa. This later became a joke and social media freaks enjoyed it. However, this was big news for both sides because after an Indian PM visited Pakistan for the first time in a decade. Rumors have it that Indian steel magnate; Mr. Sajjan Jindal played a vital role in arranging the meeting between them. If this is true, it can be said that industrialists are seeking opportunities in Indo-Pak trade. Trade embargo between India-Pakistan in between 1965-1974, which created a significant loss to capitalists, can be remunerated. Although Shimla Agreement gave an impetus to trade, India’s trade share with Pakistan was less than a unit and this is very demoralizing for traders. It seems Modi government is also thinking to remunerate this opportunity.

Cynics like Hafiz Saeed said that Pakistan will not tolerate its enemy (Indian PM) on the holy land of Pakistan and advised Mr. Sharif not to put his friendship over national interest. Similarly, a Congress spokesperson said that Modi visited Pakistan because of his personal interest but Congress also agreed that if Indo-Pak relation is strengthened, this will benefit both parties. This can’t be denied that if we put forward security and border issue in coming meetings it will make thing worse, so it is better to focus on trade and commerce because this is a common interest that can generate peace between both nations in the long run. If we look at Indo-Pakistan bilateral trade so far, we’ll find a declining trend (See figure 1). This can be increased if peace talk happens but the experience after Modi’s swearing ceremony is not very supportive. In the past months, NSA level talk was called off by India as Pakistani officials met Kashmiri separatists before the meeting. This decision by India made Pakistan furious and relation for the time being grew from bad to worse.

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Modi-Sharif interaction at the sidelines in Paris, National Security Advisor level talk in Bangkok and Smt. Sushma Swaraj’s (MEA) Pakistan visit were all efforts from the Indian side. But in fact, these small steps improved Indo-Pak Relationship and as a result Pakistan has agreed for NSA level talk on 15 Jan 2016.If things go smooth, better trade opportunities can be explored, and India can expect Most Favored Nation (MFN) status from Pakistan. However, this is not a cake walk because; people like Hafiz Saeed always want to cook their food on the fire of Kashmir tension.

Just after independence and Partition, in 1948-49, more than 70 per cent of Pakistan’s trading transactions were with India, 63 per cent of Indian exports to Pakistan. However at the end of 1949 there was fast downtown in Indo-Pak Trade, and after this, we never achieved the same level. Indo-Pak Informal and Illegal trade nearly Count Three Billion USD, which is an enormous amount, thus it becomes paramount to look at these leakages that can benefit both the nations.

Since the Independence, due to Kashmir tension, a lot of money has been wasted, people have been killed, and the unrest in Kashmir has become the reason of hatred towards Indian government among Kashmiris. These problems can be solved if both nations come together and discuss these issues and most importantly, a discussion over trade and commerce will help in solving the matter.

Source: Press Information Bureau, Govt. of India Photo ID: 74977

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Indo-Japan Deal: Are We Ready for the Bullet Train?

by Adarsh Kumar

1415614_724254151007594_1345405897_nDecorated Ghats and active UP police officials were the cause of curiosity during the Aarti on the banks of Ganga on 12th December. The Sanskrit chanting and Ganga Aarti after sunset symbolized a new beginning to an old friendship between India and Japan. This was not merely an Aarti, on the one hand, India was getting support to its national infrastructure and sustainable growth, another hand Japan was exploring a new market for investment. Although China was also a contestant in this trade race and its trade share in India is far more than Japan, this time, bullet train establishment deal went for Japan, because terms and conditions of the loan were very lenient, (first ten years no interest and then after 0.1% per annum for rest 40 years) than China was providing. December 11th and 13th proved very successful to India as the investment in; the Japanese government has initiated transportation, defense, and nuclear energy. Abe and Modi issued Japan-India Vision 2025 of Special Strategic and Global Partnership. In this document, Abe and Modi agreed on expanding bilateral cooperation in a wide range of issues from investment, disaster risk management, and people-to-people exchange. This warm relationship is not spontaneous; India and Japan have many things in common, such as culture, people and old traditional tie-ups. When Abe came into power in 2007, he wrote an article titled “Asia’s Democratic Security Diamond” published by Project Syndicate on Dec. 27, 2007. In this commentary, he introduced the “Diamond Concept” in which he envisioned that the United States, Japan, Australia, and India would form a virtual security “diamond” and work together to maintain the peace and stability of the Indo-Pacific region. Although this commentary didn’t get much attention in Japan, his vision of coalition with Australia and India along with the peaceful relationship with the United States, are strengthening the “Diamond Concept”.

From 11th Dec to 3rd Dec 2015, Indian and Japan elevated their relationship by signing two important agreements on “special strategic and global partnership”. First on defense equipment and technology transfer and second on Concerning the Security Measures for the Protection of Classified Military Information or general security of military information agreement (GSOMIA). The Defense Equipment and Technology Transfer is divided into seven articles, of which five are important. In Article 1, parties will be dedicated to defence research and development or production or for mutual defence cooperation, taking into account various factors including commercial viability or the security of the respective countries, and confirmed by the Parties through the diplomatic channel. And under Article 2 of the Agreement a Joint Committee comprising members from ministries of Foreign Affairs, External Affairs, economy, defence and Defense Research and Development Organization (DRDO) shall be established for determining the defense equipment and technology transfer. Under Article 3 of the agreement, it has been guaranteed to use transferred technology and equipment peacefully which should follow United Nations charters and parties are not allowed to transfer these to any third party without agreement. Articles 4 and 5 are dedicated to taking necessary measures to protect classified information transferred from each other and agreement will be implemented if national laws, regulations and budgetary appropriation of each country are not violated, respectively.

GSOMIA obligates both Japan and India to protect classified exchanged military information, thereby facilitating more robust intelligence exchanges between the Indian Armed Forces and the Japan Self Defense Force (JSDF hereafter). That, in turn, creates a foundation for more healthy defense cooperation between the two nations.

The Indian media portrays that these negotiations are a result of Modi’s visit to Japan in December 2014. But giving all credit to current Government would be a betrayal to the Manmohan Singh Government, which signed the agreement on “Joint Declaration on Security Cooperation between Japan and India” in 2013. India and Japan signed an agreement in which both sides agreed to allow the Indian Navy and JMSDF to hold joint training on a regular basis. Now Defense and technology transfer and GSOMIA strengthen the Indo-Japan relationship.This relationship can be considered as Japan’s most institutionalised relationship, after security ties with the United States and Australia.

A close security tie-up with Australia would provide an opportunity to be more active in areas, such as capacity building in Southeast Asia and the Pacific Islands. Now Indo-Japan tie-up will create stability in Asia-Pacific, and it would provide a similar benefit as Australia did to Japan.

These coalitions are beneficial for India and Japan but, it can be a business threat to China as China has the rivalry with Japan. According to media reports, earlier china wanted to invest in the bullet train project, but Govt. of India preferred Japan as its terms and conditions were viable. Now Japan has the nuclear deal, and bullet train project and Indian government seems satisfied. If we talk about bullet train project that will cost nearly Rs. 98,000 billion, 81% of this will be provided by japan, and this will link Mumbai and Ahmedabad at 320 Kmph, that will reduce travel time by half. Construction will start from 2017, and it will be completed it 2033. Modi Government’s focus towards manufacturing sector with the help of foreign investment seems great only until our labor force can adopt it.But in reality, Indian skill development policies are redundant, and in future as manufacturing sector will expand it will demand much-skilled labor force.But if the present conditions prevail, industries will face the deficit of skilled labor force. This deficit will be the reason for growth stagnation, and investors will lose, thus, India’s dream of double-digit growth will continue to remain a dream.

Although Indo-Japan tie, which has happened on 11th to 13th Dec, has a lot of market potential and it will provide the impetus for the growth of both parties, this growth seems costly for India. Poverty, corruption, malnutrition, caste and religion based discrimination are still prevalent in our societies and instead of paying attention to these basic problems we are neglecting them and investing in less important projects that might not benefit the poor directly. Bullet train project from Ahmedabad to Mumbai will cost 12 million USD along with this it will make millions of slum dwellers, homeless and vulnerable as most of them are situated near railways tracks. Thus, before this plan government should do a socio-economic assessment of the project. Although this can’t be denied that good changes are painful, but by saying this, we must not forget about millions of people who will face repercussions due to this project.

The ‘ISIS’ Phenomenon

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The Islamic State of Iraq and al-Sham (ISIS), The Levant or the Islamic State (IS) are some of the names given to the world’s infamous ‘terrorist’ organization, which is operated by religious fundamentalists, adept at using social media to unleash their reign of terror. The Islamic group and its functioning has been the centre of raging debate world-over. However, the constant comparison with the Al-Qaeda’s ideology and lack of understanding of the organization in general is further leading to its uncontrolled rise.

A viral video titled “Truth in Media: Origin of the ISIS” broke out on social media, recently. It talks very explicitly about the role of the United States of America in the creation of the ‘brutal savage group that conducts public beheadings and mass executions’. A while back, the Secretary of Defense of the country, Leon Panetta spoke about the interest in funding a 30-year war in Iraq against the ISIS. This is the second time that the country has locked horns with Iraq, the first time being the U.S mandated “Operation Desert Storm” with an ulterior motive of overthrowing the Saddam Hussein government. This was also the starting point of the unprecedented rise of the ISIS. The U.S in fact, created a ‘Power Vacuum’ in Iraq, which provided the appropriate conditions for the rise of the terrorist group. While the ISIS began as a small insurgent group in Iraq in 2006, it only gained momentum in June 2014, wherein it reemerged- heavily armed and trained by U.S specialist coalition forces.

To put things in perspective lets go back to the year 2013- the year when the United States of America was heavily supplying the Syrian rebels with light weapons to overthrow the Assad government. President Barack Obama was on several occasions asked about the involvement of the U.S government in the civil war in Syria, but he never once gave a convincing answer or took a conclusive stand. The CIA funded weapons -which apparently included artillery and light weapons- eventually made their way into the hands of the ISIS. How? Through members of the Free Syrian Army.

The growth of the ISIS has very much been on the radar of the U.S government and was not unanticipated. Despite that, instead of proactively slashing their means of making immense amounts of wealth, the country instead gave almost 500 million Dollars to the very same Free Syrian Army, to ‘fight’ the ISIS. If this isn’t the prototype for hypocrisy, then what is? As Daniel McAdams of the Ron Paul Institute correctly pointed out, “America is a victim of its own insane policies.”

Yes, there is a threat, but not to the national security of just the United States of America, but to the peace of the entire world. The Islamic State is a result of direct American action. However, all these facts are misconstrued and disguised in a remarkable manner by the media.

However, the point here is to not make accusations or play blame games. This fight is of terrorism against the rest of the world. After the carnage in Paris, where nearly 129 people were murdered (yes, murdered), Francois Hollande, the French president openly declared this to be an ‘Act of War’ by the ISIS. Leaders all over the world are proactively advocating war, which is unfortunately not a solution to end terrorism.

According to an article in The Guardian by Yuval Noah Harari, terrorists have no real military strength therefore, they create a spectacle. In this sense, terror becomes a military strategy that looks at fear mongering as a means changing the political situation rather than causing material damage. If one were to put this in perspective with the ISIS’ ideology, it would made complete sense. There is no denying that there were lots of innocent lives lost in the various attacks initiated by them, but the fear that they have garnered world over cannot be assigned any numbers. States and leaders have been forced to respond simply to assuage these fears. The ISIS is thriving by perpetuating an ideology- one that threatens to nations and their citizens in situations of unprecedented violence- that induces fear in anticipation of an unforeseen event. The organization is growing at this pace because countries have failed to take a unanimous stand to curb them. Some are overtly fueling their growth, while some are doing the same covertly, while the world is watching. The ISIS cannot be destroyed by violence or war. To eradicate the organization, there needs to be a way to cut their oxygen supply, the means of their existence. For that to happen, countries need to comply with one another. This is a tussle between terrorism and humanity where war is seldom the answer.

Anahitha Sagar

Intractable conflicts need Charismatic leaders

India-Pakistan ties have been in limbo ever-since the NSA level talks failed to happen. Since then from concerts to book launches, cricketing ties to trade nothing has escaped the vitriol in the air. Ties have yet again been jolted by the deferment of the two-day meeting India-Pakistan business forum by Pakistani authorities which was to be held from November 30 2015. Predictably this has not come as shock to the scholars and practitioners.

One has to understand that India-Pakistan ties are dogged by an intractable conflict in Kashmir. Unfortunately for India and Pakistan structured negotiation as in the Composite Dialogue Process (CDP) also has inbuilt structural impediments. Progress on all issues is halted if the process is disrupted. Kashmir and terrorism issues have the strength to impact progress on all other issues of mutual concern. It is difficult in the case of Kashmir to make concessions and even if an exchange of concessions is made on other issues it may not necessarily be able to assuage the public opinion in case of Kashmir. Domestic factors coupled with politics never render the parties a politically opportune moment when a deal can be reached. Even as both sides deem the status-quo as unfavorable.

The push for better India-Pakistan ties therefore has to come at the track one level. Surely at the track two and track three levels, constituencies which benefit from better ties should lobby for it, but intractable nature of the conflict in India-Pakistan ties means only a top-down approach can create space for economic and cultural initiatives which must be necessarily complemented with a liberal visa regime. The security dynamics between India-Pakistan overwhelmingly dominates narrative which implies that foreign policy in both countries is much centralised in nature and federal constituents have less say in the decision making.

Longevity of the conflict in Kashmir has given birth to a history and hence a historical narrative which overshadows all political initiatives. Structural and functional changes in India-Pakistan relations therefore cannot be brought about in short time horizon. If this task is entrusted to the bureaucracy it will probably not materialise even in the longer horizon. The single biggest achievement of the CDP which was first mooted in 1997 was the establishment of ceasefire which held for many years but has broken down remarkably ever since the new dispensation has come to power. Siachen, Wullar Barrage/Tulbul navigation project and Sir Creek are yet to be resolved.

To detect any changes in momentum in India-Pakistan relations the analysis cannot be at the level of the state or just domestic politics. The level of analysis should be at the individual agency in India-Pakistan relations. Seldom has positive rhetoric around India-Pakistan ties acquired significant media space, mostly media anxiety in anticipation is evident with big events. But that is perhaps the best it has come to since Vajpayee’s famed trip to Lahore which ended in the Kargil debacle. Only political charisma of the leadership on both sides can overcome the negativity surrounding India-Pakistan ties.

When one talks about political charisma Narender Modi would easily one up Nawaz Sharif who despite being in his third stint as the prime minister of Pakistan lacks the skill, wit and verve required to capture the imagination of the youth of Pakistan. A simple look at the media headlines would conspicuously show that it is the other Sharif who has caught the public imagery as the saviour for Pakistan. Any expectations from the dialogue process as long as the internal balance of power in Pakistan is skewed should therefore be tempered until that time.

Organised political cult can unleash forces around an individual just like religion and nationalism which can bring about political reform that are otherwise tedious especially when it comes to the balance of power between different institutions within the state. In Pakistan the imbalance between judiciary, legislature and the military has left little scope for external powers to engage with just the government of the day. More than for India-Pakistan relations and even as a precursor Pakistan needs a charismatic leader, a rabble-rouser perhaps for its own good.

The anticipation and attention should be more directed towards figures like Imran Khan who has the charisma to muster the crowds and is considered the hero and the architect of Pakistan’s world cup win in 1992. The quest for a solution to the Kashmir quagmire will have more hopes of coming to fruition if he comes to power in Pakistan because that could lead to structural changes in Pakistan which a simple election exercise in five years cannot.

Joy Mitra

The Changing Fate of English Language in Nepal

In Nepal the students who go to private and boarding schools are exposed to the English language from an early age. The first lessons taught at homes as well as in schools are in the English language, along with the Devnagari script. In many private schools, students are penalised for speaking in Nepali except during Nepali language classes. By virtue of the global acceptability of English language, the stress to achieve proficiency in it cannot be questioned. The language has become a source of security for many, but the unequal access to it has increased insecurity for others.

The use of any language is more than just being able to communicate; it is about expressing the inner-self, claiming rights and dynamic identities and interests. Language connects as well as divides people. Linguistic differences in the process have caused many revolutions and increased the sense of insecurity for many. Language also constructs identity; it is a source of belongingness. When people speak a language it connects them to their histories, ethnicities, social groups/class and religion. However, when popularity of one language outweighs the other, categorisation starts between people, creating a divide in the society.

The English language gained foothold in South Asia with the establishment of British rule in India. Slowly through administrative provisions and changes in the education system, in India, the language made a place for itself alongside Hindi which was the official language. Soon, the language pervaded much of South Asia.

Nepal is a linguistically diverse nation. There are around 123 different languages that are spoken in the country. According to the Central Bureau of Statistics Nepal (2011), 44.6% population speak the official national language that is Nepali. Unlike its neighbouring countries, Nepal was not colonised but was under the Rana autocracy for 104 years. The Rana autocracy was not in favour of widespread education policies to commoners. It was after Prime Minister Jung Bahadur Rana’s visit to England in the 1850s, that the first government run English medium school was established in the country, but it was open to only Rana families and other elites because they feared an educated and empowered public which could  revolt against their tyranny. Slowly, other liberal prime ministers established Nepali medium schools in several cities around the country for the public as well. A few English medium schools were established in Kathmandu and other major cities before the Second World War. Later in the year 1918 country’s first post-secondary institution was established to lessen the flow of students travelling to India for further studies.

The end of Rana autocracy in the1950s brought democracy in the country which was followed by the establishment of the Shah Dynasty and under the new monarchy, certain major changes took place. A constitution was finally promulgated in 1959 and major reforms were made in the education sector. The new king focused on accessibility to educational opportunities with large number of students having access to education. This included the establishment of the Ministry of Education which appointed a Board of Education and Nepal National Educational Planning Commission (NNEPC) to direct reforms regarding school management and governance. This gave the government lesser control over schools and the role of community and school management was strengthened. The educational plan of NNEPC, 1956, was in favour of promoting Nepali as the medium of instruction in schools to strengthen national unity and establish a unilingual nation. In 1960s, the then King Mahendra over threw the popularly elected government to establish a non-party Panchayat System, but at the same time the major education reform of 1971 supported the education plan of 1956.Though after the 1970s, English was recognised as an international language of science. The National Education System Plan (NESP) nationalised the education system in the1970sin a bid to promote the Nepali language, a common religion and to ensure people’s faith to the monarch through education, politics and the media. However, it had to amend its policies due to financial and social pressures in 1980s. It decided to support the privatisation of education. English language once again flourished as the medium of instruction and learning.

The restoration of multiparty democracy in 1990s again changed the Nepali educational policies and programs. Under the influence of globalisation post the 1990s, Nepal experienced an overhauling of the higher education system. The National Education Commission (1992) suggested the government to design appropriate education policies at par with other SAARC and industrialised nations. Funds from international organisations like the World Bank (WB), the Asian Development Bank (ADB) flooded Nepal. These international institutions brought with them a culture which was westernised and favoured those who were proficient in the English language.

The ten year long insurgency under the Maoists (1996-2006) had caused chaos in the country. The civil war impacted industries and educational institutions were majorly affected. The period saw an increase in the out migration of people for purposes of work and education. As people returned to Nepal post the insurgency, a significant change that emerged in the society was the ease with which English established itself. The language percolated into the Nepalese society through education, influence of international organisations, role of global food chains and establishment of technology hubs. The media also played a major player in the spread of English in Nepali society. This happened through the dissemination of international news, increasing influence of English movies, advertisements, and television channels. English suddenly became symbolic of one’s status in society.

Nepal’s foreign policy is greatly influenced by her neighbours, and with India becoming the second largest English speaking country after the Unites States of America and China investing greatly in English language education, it is not surprising that the Nepalese Government has become proactive in promoting the English language. Even though the constitution of Nepal does not recognise English as the official language, however the Public Service (PSC) exams can be written in English. Some public schools are being retrofitted as ‘model schools’ which run separate boarding wing with English language courses to lower secondary level at an upgraded fees. Given the increasing English speaking population, the importance attached to it has caused considerable panic in a linguistically diverse society like ours. It would be useful to consider whether the globally accepted language has increased the level of insecurity for the non- English speaking population. The importance that was attached to English was not because of the number of people who spoke the language; it had to do with the power that comes with it.

The dissemination of English language in Nepal happened under the purview of the state. The revised education policy of directing institutes to make the language primary as well as secondary mode of instruction came from the state. The society is divided between those who go to public schools run by the government and private schools where the curriculum is in English. Public schools have an affordable fee structure and less or no emphasis on the English language in general. Private schools on the other hand are expensive and claim to provide students access to an education that would equip them to deal meet the demands of globalisation and consequently benefit from it.

The government has given English enhanced status in the country to establish a favourable image of Nepal internationally. More often than not the non-state organisations in the rural areas operate within an institutional framework biased towards English.

While many are debating the threat to the linguistic diversity in Nepal posed by the English language most agree that the language which once belonged to the elites should now be accessed by the commoner. A country which saw only a few hundred graduates a few years ago, now produces thousands of them with access to the English language. It is widely recognised today in Nepal that the English language gives her citizens a comparative advantage even if it may not ensure access to opportunity at all costs.

Prapti Adhikari

 

Indo-Bangladesh Energy Trade

80392126-flag23by Adarsh Kumar

South Asia, fastest growing part of the world, has registered significant economic growth, however the energy sector, which is very important for sustainable development and economic prosperity, has faced several challenges. So for better energy efficiency it’s essential to have healthy relationship with our neighbours, healthy and profitable relationship with neighboring country increases the wellbeing of commons at large. South Asia consumes world’s most of the energy. China and India, two biggest consumer of energy in this world, need more and more energy to sustain their economy. In that case cross border energy trade becomes essential for whole South Asia. India, world second most populous country is rapidly growing in terms of population, (it is expected that it will surpass China’s population by 2050) economy and power, will need more and more energy in future. For growth of India it’s essential that their neighbours also achieve highest peak of growth, because in long run they will be responsible for growth of India.

India and Bangladesh diplomatic relations are very important for South Asia as a whole. India and Bangladesh share cordial relationship since partition, share similar cultural values, ethnic identity and problems of energy, water and food. Both nations are key trade partners for each-others. Although Bangladesh has a high trade deficit with India, India’s imports from

Bangladesh have grown more than sevenfold between 2001 and 2012, while India’s export to Bangladesh has increased four times in between these years. A study by World Bank indicates that free trade agreement between these two countries could increase Bangladesh’s export to

India by 180% and India will also gain 126% of increase in its export. For India, closer economic cooperation with Bangladesh can be an important stepping-stone to reduce the economic isolation of its northeastern states. Bangladesh has a predominantly gas-based electricity generation while India has substantial amounts of coal and hydro-based electricity potential. Both can utilize their energy potentials for cumulative productivity gain and economic prosperity.

India-Bangladesh Electricity Trade

Nowadays for any economy electricity is as important as water for any plant. It helps in economic growth and prosperity of nation. India and Bangladesh has different demand seasonal and daily demand of electricity. The difference in weekly and festival holidays and the 30-minute time difference can also provide opportunities for exchanging power. In this context, Bangladesh and India are examining the modalities for mutually beneficial mechanisms to share the benefits from their respective generation assets, considering also the importance of the energy security of both countries.

The possible routes for the exchange of power are between

  1. 1. The eastern region of India and the Western Grid of Bangladesh
  1. 2. The northeastern region of India and the Eastern Grid of Bangladesh

The detailed analysis done by Asian development Bank and Government of India so far shows that interconnection between the northeastern region of India and the Eastern Grid of Bangladesh would have limited attractiveness since any power transmitted would exacerbate the critically overloaded East–West power interconnector of Bangladesh. Development of the 750 MW gas-operated power plant at Tripura, close to Agartala in India, adds to the case for reconsidering possible cross-border interconnections. The most attractive interconnection between Bangladesh and India in the near term is through the route between the Western Grid of Bangladesh and the eastern region of India. The proposal to connect Bangladesh and India (on the western side) through an HVDC1 back-to-back link of 500 MW capacities has been approved, and construction will commence shortly. It is expected that this interconnection will be upgraded to around 1,000 MW in the longer term2.

India Bangladesh Gas Trade

In this world India is most energy hungry country after China, its increasing population and infrastructure will demand more and more energy as time will pass. India and Bangladesh both have significant amount of gas resources but due to lack of any substitute it’s very difficult to swap it with any other energy resource because of its illumination and general use. Amongst different sources of energy, gas provides a highly competitive alternative, not only in terms of environmental benevolence but also helps in securing energy needs. Gas, thus provides, a better political and financial option and for these reasons search for gas has increasingly become a policy imperative in India. One critical aspect about securing access to gas is that transport related reasons underscore the importance of gas rich neighbours. The Indian access to assured gas supplies continues to be uncertain and India frequently pays higher pricing for spot LNG (Liquefied natural gas) purchases. The importance of gas to development aspirations in India, can also be seen by the fact that in 2011-2012, 10% of energy produced in India, came from gas, next only to coal and hydro-power. The first proposal to export natural gas from Bangladesh to India came from one of the foreign producers operating in Bangladesh. Unocal (now Chevron) which had developed a gas field in north-eastern Bangladesh proposed the construction of 847mile (1363km) gas pipeline from Bibiyana to New Delhi3. However, the issue became politically contentious in Bangladesh and the proposal was nipped in the bud.

A  report  Gas  Strategy  for  Bangladesh  (January  2006)  prepared  for  Petrobangla  by  Wood Mackenzie Ltd assumes a proved level of 9.2 tcf4, proven plus probable reserve of 14.4 Trillion Cubic Feet(tcf), and a proven plus probable plus possible reserve of 22.2 tcf, these being the most conservative estimates. The government has been reluctant to make any commitment for the export of gas or gas based electricity on account of the uncertainty of its reserves position. It is claimed that if coal mining and coal based power development takes root, and if the country has access to the hydropower of Nepal, Bhutan and Myanmar, it might adopt a little more liberal approach to gas exports (World Bank 2007).

Triangular Gas Trade (Myanmar-India-Bangladesh)

Myanmar has estimated natural gas reserves of 89.722 tcf, of which 18.012 tcf are considered proven recoverable reserves. Many Investors from Thailand, Australia, Britain, Canada, China, Indonesia, India, South Korea, and Malaysia are engaged in gas and oil extraction from Myanmar. From India ONGC and GAIL have a 30% stake in the partnership with Daewoo of South Korea (60%) and South Korean Gas Corporation (10%) in the off-shore gas exploration of Blocks A-1 and A-3 off the western Rakhine coast. GAIL and Essar have other assets as well in Myanmar. Indian company ONGC Videsh Ltd has successfully bid for two on-shore blocks in the 2013 Myanmar Oil and Gas Bids recently. For the transportation of gas to India, in July 2005 Bangladesh permitted 559 mile of pipeline, but with many trade restrictions and asked for several trade concessions, including removal of tariff, non-tariff and administrative barriers to Bangladesh exports to India, provision of access to hydroelectricity from Nepal and Bhutan and an establishment of the free trade corridor to these countries. The construction of the Myanmar-China pipeline project which consists of dual oil and gas pipelines originating at Kyaukryu port on the west coast of Myanmar and entering China at Yunnan’s border city of Ruili also worked in favor of China.

Indo-Bangla Hydro Power

Whenever we talk about hydro-power project between India and Bangladesh, Tipaimukh project accrue immense importance. This Project is designed for Generation of 1500 MW hydro-power and prevention of flood in Manipur and Mizoram. This involves building a 162.8 meter high rock-fill dam around 500 meters downstream of the confluence of river Barak with Tuivai. It is also believed that it will control flood in Bangladesh too. But Bangladesh feels that, a water resource from Barak has been reduced and it will harm ecology and economy of Bangladesh. Bangladeshi opponents have often compared the project with Farraka Barrage, although Government of India took note of these opposition and convinced Bangladeshi team.

Tipaimukh Dam is largely a power generation project and not a water diversion project. This dam has capacity to keep monsoon water of 10 days, which controls flood in Bangladesh and also help in augmentation of water in crisis session thus it (Dam) manage water in critical condition. Due to limited communication from the Indian side and little objective study, speculative fears in Bangladesh still prevail and certain sections in Bangladesh and they are not convinced with this Tipaimukh Dam project. But if Government of India assures that Bangladesh will get access to a part of power generated in the project that can change the situation. In fact,

India has plans to generate substantial hydro-power in its north-eastern states which can entire change the power supply scenario in the entire eastern south Asia sub-region and India-Bangladesh energy relation can assume a new level.

Conclusion

For the growth of south Asia, energy generation plays an important role, but nations seek well planned cooperation to garner peak of energy production. India and China are most populous countries in this world and their increasing demand for energy must be fulfilled for the holistic growth and wellbeing of world. India, which comprises nearly 1.2 billion people, will surpass china by 2050 in terms of population. In terms of growth rate India can surpass China by 2020 (Datta, Sreeradha -2008). Thus India needs energy cooperation and technological Innovations with neighboring nations. Although Government of India has initiated research on energy crisis and management, and in continuation of this nearly all IITs and few central universities (such as Delhi University, JNU and BHU) has center for energy research and The Energy resources Institutes are working tremendously well. In long run India’s geographical position will also help in achieving its goal.


  • 1 High Voltage DC technology enables the interconnection of two asynchronous AC networks.
  • 2 Taken From Energy Trade in South Asia Opportunities and Challenges By Asian Development Bank.
  • 3 Bose, Srinjoy (2007), Energy Politics: India-Bangladesh-Myanmar Relations, IPCS Special Report, No 45, New Delhi: Institute of Peace and Conflict Studies

  • 4Trillion Cubic Feet – Tcf’ A volume measurement used by the oil and gas industry. A trillion cubic feet (1,000,000,000,000 cubic feet) is a volume measurement of natural gas that is equivalent to approximately one Quad.

References

  1. 1. Nitya Nanda, K. D. (2013). India-Bangladesh Energy Relation. New Delhi : The Energy & Resources Institute (TERI).
  1. 2. Sultan Hafeez Rahman, P. D. (2011). Energy Trade In South Asia:Opportunities And Challenges. Philippines: Asian Development Bank Report
  1. 3. World Bank, Sustainable Development Department, South Asia Region (2007), Potential and Prospects for Regional Energy Trade in the South Asia Region, New Delhi
  1. 4. Institute for Defence Studies and Analysis, 2010, Water Security for India: The External Dynamics, IDSA Task Force Report, IDSA, New Delhi
  1. 5. Datta, Sreeradha (2008), Bangladesh Factor in Indo-Myanmarese Gas Deal, Strategic Analysis, 32(1), 103-122
  1. 6. India and Bangladesh Can Make Significant Gains by Opening Their Markets to Each Other, Says New World Bank Study. (2012, December 17). Retrieved Nov. 1, 2015, from The World Bank:http://www.worldbank.org/en/news/press-release/2012/12/17/india-bangladesh-significant-gains-opening-markets
  1. 7. ADB to finance India-Bangladesh electricity link upgradation . (2015, Oct 1). Retrieved Nov 1, 2015, from The Economics Times: http://economictimes.indiatimes.com/news/economy/finance/adb-to-finance-india-bangladesh-electricity-link-upgradation/articleshow/49186100.cms
  1. 8. Nafees Imtiaz Islam. (n.d.). Bangladesh-India relationship: A new dimension in the region. Retrieved Nov 1, 2015, from BRIEF: Empowering Growth: http://www.briefindia.com/bangladesh-india-relationship-a-new-dimension-in-the-region

FDI and Indian Railways: Is 100% Not Enough?

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by Manash Pratim Hazarika.

 

The Indian Railway is considered to be one of the best railway systems in the world. It is said to have established a wide range of areas covered with immense customer base all around the country. Founded by the British Government and later on developed by the Indian Government after the independence it has mostly covered all cities across the country. The Indian railway maintain tourism and catering corporation which in turn has a network of hotels and restaurants that will help the customers in reaching out to the nearest and best hotels for stay. The tourism and catering corporation of the Indian Railway have large connections with the local tourism development boards of each state. The e-booking of the tickets have proved to be a major success and nearly 75 percent of the journey tickets are booked through internet.

But when it comes to travelling aboard a train in India one would definitely come across unhygienic lavatories, ghutka stained marks everywhere, poorly maintained railway stations and railway tracks, outdated technologies, and a train schedule that very rarely is punctual. This is how railway has always been and everyone availing train in India seems to have settled for it. Until the current government allowed 100% foreign direct investment (FDI) in this arena in 2014, the Ministry of Railway always had monopoly of control and regulation over railways in India, thus discouraging competition.

There are reasons as to why this change has taken place now after so many years of enjoying monopoly. Although the change in the political scenario of the country has mainly molded this outcome, reality check reveals that Indian Railway was making profit but not progress. Despite protests and apprehensions, the Indian Railway has little choice but to woo foreign investors as it currently lacks both resources and new technology to undertake expansion or modernization programmes. According to the last Railway budget presented in July after the Narendra Modi-led government came into power, gross traffic receipts in 2013-14 stood at Rs 1,39,558 crore but the operating ratio was high at 94%; in other words, for every Rs 100 that the Railways earns, it spends Rs 94 for day-to-day expenses leaving only Rs 6 for investment. Moreover the Indian Railway’s operating ratio has remained above 90% for six consecutive years, the best ever being 74.7% achieved way back in 1963-64.[1]

Indian Railway being the 4th largest railway network in the world transports the most number of passengers every day than any other railway network (2.4 Crore everyday). The Indian Railways is also the largest employer in the world, means it provides the highest number of jobs amongst all the sectors and departments throughout the world. Every year along with the Yearly Budget, a separate Railway Budget is introduced in the Parliament that proposes projects that never see completion because of improper allocation of funds.

The Indian Railway technically is now fully opened up. A foreign player can invest up to 100% in most segments of rail infrastructure such as suburban rail, metro rail, locomotive and rolling stock and dedicated freight lines. The objective for permission of FDI as stated in the Ministry of Railways’s Notification for Domestic/Foreign Director Investment has been stated as:

To augment capacity, modernize and bring efficiency through technology up-gradation on Indian Railways network and to generate finances for undertaking these activities from both domestic and foreign investors.

100% FDI under automatic route is permitted for the following[2]:

  • Construction, operation and maintenance of suburban corridor projects through PPP.
  • High speed train projects.
  • Dedicated freight lines.
  • Rolling stock including train sets and locomotive/coaches manufacturing and maintenance facilities.
  • Railway electrification.
  • Signaling systems.
  • Freight terminals.
  • Passenger terminals.
  • Infrastructure in industrial parks pertaining to railway line/siding including electrified railway lines and connectivity to main railway line.
  • Mass Rapid Transport Systems.

The government is aware of the fact that although such schemes have been undertaken, investors are skeptical of whether to invest in India. It is because of an uncertainty relating to whether such policies of the government would remain stable. It must also be ensure that the environment is investor friendly and there is no sort of road blockage when the project is initiated. It is to be noted that indecisiveness has been a culture in Rail Bhawan for a long time now but in addition to that one other factor that has affected the Indian Railway’s reputation is that in recent times no railway minister has remained in his post for a long duration. If the Indian government fails to carry on with similar policies and change their scheme of 100% FDI then the investors might have to incur losses. Companies such as EMD (USA), Bombardier Transportation (Canada), GE (USA), Siemens (Germany), and Alstom (France) have showed keen interest in extending their business into these ventures but the wait for how the first investor is treated in Indian market is what the current anticipation is all about. Japan has already agreed to modernize 400 railway station across India in addition to providing technology and expertise in solving problems of sanitation of toilets in trains and stations.

The current government’s ‘Make in India’ slogan is making hits across continents. Modi government is trying to establish ‘business friendly’ market for investors to come and produce their goods in India and export the same from here to the rest of the world. This way the aim is to employ millions of people in manufacturing sectors. Currently India lacks infrastructure capable of executing this plan and therefore a scheme for connecting all the major ports in India through railway has taken a major place in the next five year plan of the government. Industrial Corridors have been identified with the aim of connecting major cities to boost development and accelerate the flow of goods. The idea also involves developing smart cities in and around these Corridors which will be a sign of progress. Industrial Corridors include:

  • Delhi Mumbai Industrial Corridor
  • Bengaluru-Mumbai Economic Corridor
  • Chennai-Bengaluru Industrial Corridor Project
  • Vizag-Chennai Industrial Corridor
  • Amritsar-Kolkata Industrial Corridor

According to the Union Railways Minister, Suresh Prabhu, “The Indian Railways will continue to be owned by Government of India only. It will not go into the hands of multi-nationals. There are no second thoughts about it. We need to decongest our network by doubling, tripling or even quadrupling lines wherever we can. In urban areas it could only mean we go above the road. As two-thirds of our revenue comes from freight, we are going for dedicated freight corridors”.[3]

All such initiatives are in order to relieve the railway from its cash strapped condition with which the opportunity race for expanding the Indian Railway has begun. At the end Indian Railway must grow for India to grow, railway officials must feel secure at jobs, and all Indians must have the fruits of such lumps of planned investment. Railway has always been the backbone of Indian economy and 100% FDI in this sector is the first major change in Railway since its inception. Whether it is going to make Indian Railway better at affordable ticket prices for Indians or not? The answer to that question will be only be known in due course of time.

 

 

References:

[1] Shantanu Nandan Sharma, ‘Modi Govt’s Plan to Allow 100% FDI in Rail Infra Picks up Pace; But Investors in Wait-and-Watch Mode’ (The Economic Times, Jan 11, 2015) http://articles.economictimes.indiatimes.com/2015-01-11/news/57941023_1_indian-railways-operating-ratio-arunendra-kumar

[2] Available at http://www.makeinindia.com/sector/railways, referred on 1st November, 2015

[3] ‘Huge Investment – The Need of the Hour for Indian Railways’ (India Transport Portal, February 12th, 2015), http://indiatransportportal.com/huge-investment-the-need-of-the-hour-for-indian-railways-29906

Image Source: photography.nationalgeographic.com