Center on Asia and Globalisation

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Guest Column

The India-China-US Triangle: Modi’s Diplomatic Challenge

by Harsh V. Pant

These are exhilarating times in India. An old political order underpinned by the supremacy of the Nehru-Gandhi family is crumbling while a new order is gradually taking shape. The victory of the Bharatiya Janata Party (BJP) under Narendra Modi’s leadership has transformed the political landscape of India almost beyond recognition. For a democratic system to remain vibrant and dynamic, such transitions are essential. In fact, most mature democracies do see such transitions on a periodic basis. In India, for a whole host of reasons, while democracy has flourished, its vitality has been sapping, especially over the last decade. Today, when the Indian electorate has demolished the myth of the Nehru-Gandhi dynastic right to rule, it can safely be concluded that Indian democracy has taken a turn for the better.

No wonder as the new political dispensation assumes power in New Delhi, India’s neighbours and regional states are trying to assess the implications of the dramatic transformation in Indian polity. They have their own expectations from a government which will not be dependent on regional parties and other coalition partners to survive and will be capable of taking decisive actions if need be. Most significantly, Prime Minister Modi will be his own man, capable of shaping the trajectory of Indian foreign policy significantly.

The decision to invite members of the South Asian Association of Regional Cooperation (SAARC) for the swearing-in ceremony of the new government has been a great beginning, underscoring the resolve of the new government to embed India firmly within the South Asian regional matrix. The fact that all of India’s neighbours in South Asia and the wider Asian region have reached out to Modi also augurs well for the new government.

The most significant foreign policy challenge for New Delhi in the coming years is going to be dealing with the most important geopolitical event of our time – the rise of China. Despite an obsession among the Indian foreign policy elite with everything Chinese, it is not at all evident if New Delhi has learnt to think strategically about China and all that its rapid ascendance in global hierarchy implies for India.

With Modi now at the helm after receiving one of the largest mandates in Indian electoral history, it is being suggested that Modi’s warmth will be reserved for those who went out of the way to accommodate him when he was being hounded domestically and globally. Countries like Japan, Israel and China, for example, welcomed him during those years when the West shunned him and the US revoked his visa under an obscure law. There has even been speculation about the reasons behind Modi taking much longer to mention the congratulatory call from the US President, Barack Obama or the tweet from Secretary of State, John Kerry.

Modi has indeed travelled to China five times, more than to any other nation and he has been visibly impressed by China’s economic success. Some in China have welcomed Modi as the new Prime Minister. The state-run Global Times has argued that “ties between China and India may come closer under Modi’s

leadership.” It goes on to suggest that “the West has adapted to an India with a weak central government in the past decades” and now with Modi in saddle “it is afraid that a strongman like Russian President Vladimir Putin will make India really strong and build the country into a challenger to the West economically and politically.” Others in China have described Modi as India’s ‘Nixon’ who will take Sino-Indian ties to new heights, even underscoring that “Modi’s governance style and philosophy are very close to Chinese practices.”

Yet Narendra Modi remains a quintessential nationalist looking to raising India’s profile on the global stage. China’s behaviour in recent years has been troubling for India and caution is likely to be the hallmark of Modi’s outreach to China. Addressing an election rally in the state of Arunachal Pradesh which borders China, Modi had underlined that Beijing would have to shed “its expansionist policies and forge bilateral ties with India for the peace, progress and prosperity of both nations.”

Despite his personal grudge against the US, Modi will recognise, if he has not already, that the challenges that India faces with a domestically fragile Pakistan, political uncertainty in Afghanistan, instability around India’s periphery, and an ever more assertive China cannot be managed without a productive US-India relationship. As a pragmatist, Modi cannot ignore the reality that strong ties with the US will play in sustaining his vision of an economically advanced and militarily robust India. His priorities will certainly be domestic but a conducive external environment is a sine qua non for achieving his highly ambitious domestic agenda. At a time when China has alienated most of its neighbours with its aggressive rhetoric and actions, India also has a unique opportunity to expand its profile in the large Asian region and work proactively with other like-minded states to ensure a stable regional order.

To live up to its full potential and meet the region’s expectations, India will have to do a more convincing job of emerging as a credible strategic partner of the region. India, for its part, would not only like greater economic integration with the fastest growing region in the world but would also like to challenge China on its periphery. But India will have to do much more to emerge as a serious player in the region. New Delhi needs to assure the regional states of its reliability not only as an economic and political partner but also as a security provider. As the regional balance of power in Asia changes and as the very coherence of the ASEAN comes under question, there will be new demands on India which can be fulfilled only with a productive partnership with the US, still Asia’s predominant power.

How Modi navigates this tricky terrain between the US and China will define, in large part, the success or failure of his diplomacy.

 

Harsh V. Pant is a professor of International Relations in Department of Defence Studies, King’s College London, United Kingdom.

Guest Column

China-India Relations…if Narendra Modi Wins the Indian Elections

By Kanti Bajpai

http://lkyspp.nus.edu.sg/cag/publication/china-india-brief/china-india-brief-27

By all accounts, Narendra Modi, of the Bharatiya Janata Party (BJP), is poised to win power in the Indian general elections which will end on May 12. By May 16, the results of the elections will be known. Almost every poll suggests that Modi will win somewhere between 230-250 seats, just short of the majority of 272. If we go by the size of the crowds at his election rallies, he could do much better than that and win a majority without any coalition partners. If so, he will be the first person to do this since Rajiv Gandhi did it in 1984 shortly after his mother, Indira Gandhi, was assassinated.

What are the possible implications of a Modi victory for China-India relations?

First of all, Modi’s general stance on foreign policy is important. While there is great partisanship and criticism of domestic politics in India, on foreign policy there is much greater consensus, and there is a tendency not to embarrass the government of the day on external issues or to overturn the policies of the predecessor government. Therefore, Modi is not likely to depart enormously from the general lines of Indian foreign policy over the past several governments including the Vajpayee and Manmohan Singh governments. This will be the case for China-India relations as well.

Secondly, having said this, BJP governments have a somewhat different style and approach. They certainly talk tougher and while they are committed to using diplomacy and negotiations to advance India’s interests, they like to do so from a position of strength – velvet hand in iron glove. In addition, BJP governments are much more likely to walk away from negotiations. The Congress is less likely to be concerned about both things. It does not necessarily talk tough or wait till it is in a position of relative strength; nor does it tend to walk away from negotiations. The Vajpayee government first tested nuclear weapons and then reached out to Pakistan, China, and the US. After the attack on India’s parliament in 2001, Vajpayee mobilized the entire Indian Army, for six months. When Mumbai was attacked, the Manmohan government preferred to resort far more to diplomacy. In a recent interview with Times Now in India, Modi hinted at just such an approach as a touchstone of his policy orientation. So also, the BJP in the end walked away from the nuclear talks with the US in the aftermath of the 1998 tests while the Congress stuck doggedly to talks and finally produced a nuclear deal with Washington. Modi might well do the same if he does not fairly quickly get what he wants.

Thirdly, BJP governments seem to be more attentive to trade and economic aspects of India’s external policy. They do have their economic nationalists, especially those from the RSS, but they are sensitive in general to the needs of the private sector. Trade and investment is important for India’s growth. Modi pays great attention to the private sector and cultivates big business – some have said he does far too much of this. At any rate, Indian business and foreign multinationals have good relations with him and many are backing him in the election campaign. Given that China-India trade is now around the US$60 billion mark and more, Modi will want to encourage trade. He will, as previous governments have done, ask China to do something to reduce the trade deficit which is running to US$20 billion. Modi will also encourage Chinese investment in India, a move that the UPA government had begun, especially in infrastructure which he considers to be vital for sustained economic growth. His emphasis in Gujarat in providing reliable electricity supplies and in building a good road network as well as port facilities indicates that infrastructure is high on his list.

Thirdly, as for China specifically, Modi has built up an economic and political relationship with Beijing. Gujarat under Modi has hosted several Chinese delegations and has sent delegations to China. Modi himself has been to China four times. He has noted that India has much to learn from China; but he has also said that China can learn things from the so-called Gujarat model of development. China identified Modi quite early on as someone it could cultivate – one reason for this is the fact that the US refused to give Modi a visa and Beijing saw an opportunity to get closer to him as a result. Modi will probably also want to build a social relationship with China, that is, to encourage greater interaction between the two societies. He is very supportive of tourism, and he may well try to loosen visa regulations for Chinese businessmen, technicians, and visitors more generally.

Fourthly, we must pay attention to Modi the man and his general approach and psychology. Modi wants to be Prime Minister and to lead India more than anyone in the country. It is his greatest ambition. He would like to be Prime Minister for a very long time. That cannot be said of any other Indian politician, and certainly not anyone from the Congress Party. He enjoys the exercise of power and he loves the reputation of being a tough administrator, decisive, and someone who is constantly looking for ideas by which to improve governance. He is an excellent orator. He speaks mostly in Gujarati and Hindi but understands English and can speak the language. Although he grew up in the Hindu organization, the RSS, he is not particularly ideological in day-to-day governance. He is pragmatic, gets to the core of issues, and likes to get on with things. Modi is also arrogant. He refers constantly to his accomplishments and what he has done for Gujarat, leaving no one in any doubt that the state’s progress is due to his presence and policies.

What does this mean for his foreign policy and China policy in particular? He will want to appear to stand tough on China issues – some of his rhetoric during the campaign in northeastern India near the border indicated this. However, he will also be pragmatic. He has been to China and he knows just how far ahead of India it is. He will not risk provoking China beyond a point. He will listen to his foreign policy and security bureaucracy, but since he has his own China experience and since at the end of the day he relies on his own judgment, he will not leave it to them to make China policy. He will want to put his own stamp on the policy. It is quite possible that one of his first trips abroad will be to China to make clear to the US and other Western countries that he remembers China’s courtesy to him. That said, he has made clear that he is prepared to do business with the West.

Will Modi be India’s Richard Nixon and from a right-wing position and from a position of political strength in India after winning the elections, will he try to do something more dramatic than merely increasing economic interactions with China and managing the security relationship? This will of course depend on larger geopolitical and political calculations, including the attitude and willingness of Xi Jinping and the Chinese leadership. Over the past decade, Beijing has repeatedly made clear that it does not think that a dramatic breakthrough is achievable with India no the border quarrel. There are signs that Xi Jinping wants to move more quickly, but just how quickly is unclear. Would it be better for Modi to try for a breakthrough earlier rather than later? A lot depends on how his government does domestically. There is a good chance that Modi will be at least a two-term prime minister, with a ten-year stint. After Congress’s disastrous second term, the Indian electorate may turn decisively to Modi. If he does a reasonable job in his first term, he is likely to get a second. With two terms ahead of him, he may want to leave a breakthrough on China to the second term.

It would be safe to predict that Modi will more or less stick to the fundamentals of Indian foreign policy and China policy in particular; but given his China interactions and his desire constantly to appear strong, decisive, and effective, he has an incentive to try to break out of the mould.

 

Kanti Bajpai is Vice-Dean for Research at the Lee Kuan Yew School of Public Policy, Singapore.

Guest Column

The China discourse in India

By Shai Venkatraman and Dev Lewis

For the last six decades, India has viewed China with suspicion and through the prism of a war. Two chronological points highlight this – 1959, when China annexed Tibet and India offered shelter to the Dalai

Lama, and 1962, when India lost a short war with China over a disputed northern border, and China aligned with Pakistan, India’s principal security threat.

Over the past decade, both countries have chosen to separate the issues of contention from areas of cooperation. Today China is India’s largest trading partner, with over $65 billion in trade in 2013, up from $2 billion in 2000. Chinese Premier Li Keqiang made India his first overseas visit in March 2013, and Prime Minister Manmohan Singh visited Beijing in October that year, and signed a Border Defence Cooperation Agreement. The year 2014 is jointly observed as the “Year of Friendly Exchanges.”

Few of these positive overtures are reflected in the mainstream media in India or China. According to Simon Shen, who wrote a paper on the online Chinese perception of India in September 2011, the unfriendly bilateral images in the popular media could have far-reaching implications for future China-India relations. There has been no similar study on the portrayal of China in the Indian media. Gateway House, Mumbai, has made the first such examination of the Indian media’s role in shaping Indian perceptions of China. We selected a recent time-frame – 1 January 2012 to 1 January 2014 – and identified particular aspects of the India-China bilateral relationship as our focus.

We selected a sample of reports on China from the mainstream Indian newspapers and TV channels both Hindi and English, business and non-business, wire agencies and online chat forums. Our sample included conventional English news sources like the Times of India, The Hindu, the Hindustan Times, Livemint, Economic Times, Hindu Businessline, Firstpost and Rediff. From Hindi newspapers we chose Dainik Jagran and Navbharat Times; and from the wire agency Press Trust of India. TV channels included Times Now, NDTV, CNN-IBN, Aaj Tak, ABPTV, and Rajya Sabha TV which is part of the national broadcaster Doordarshan.

We analysed reports relating to specific incidents and events during this period, like the arrest of Indian traders in Yiwu in China, the Depsang and Chumar border incidents and the annual India-China Strategic Economic Dialogues which have given a fillip to the relationship after Chinese President Xi Jinpeng took charge in 2013. The reports were divided into three categories – positive, negative and neutral. Positive reports showed China in a positive light, through its achievements, or if it acted in a manner friendly to India. Negative reports mention China acting as an aggressor towards India or against Indian interests. Neutral reports stated facts or reported an event.

Of the 148 newspaper reports studied, there were two negative reports for every positive one, with 39% of the articles focusing on border or security issues. A full 45% of the reports were negative, 31% were neutral and 24% were positive. There was scant mention of the significant gains made during the annual India-China Strategic Economic Dialogues or India and China’s growing cooperation on issues like climate change, trade and the oil industry in South Sudan. While all major print publications covered Li Keqiang’s visit, the coverage itself was limited, without analysis of the economic benefits from the eight agreements signed across industries. Opinion pieces were highly critical of the visit, focusing only on the border issue.

Similarly China’s offer to invest $300 billion in India’s infrastructure over the next five years was barely covered by the mainstream media, though the business papers did publish details of the working groups set up to address the growing trade deficit between the two countries. In contrast, the response on the online discussion forums was largely positive with many acknowledging the economic benefits. A minority expressed mistrust, citing Chinese spying, and the poor quality of Chinese technology.

It is the business papers in India which seem to have made a much fairer case for China. There is an understanding of the commercial advantages of dealing with China despite the strategic differences, and mostly positive reportage on the Chinese offer to fund infrastructure development in India, as well as the willingness on the part of Chinese telecom firms to comply with security checks for foreign spyware – unlike the European telecom firms like Blackberry which declined to do so.

The economic aspects of the bilateral relationship find little reflection in TV channels. The tone across all channels was strident and reached fever pitch when it came to Depsang and Chumar even though both governments issued statements downplaying the incidents. Primetime shows with provocative titles like Should India trust China and Will India react to China’s defiance highlighted the historical ‘betrayal.’ There was no nuance visible nor any attempt to reflect the differing perceptions over the borders. India’s strategic advantage in Chumar, subsequently brought out in a Gateway House security briefing, found no mention.

Part of this one-dimensional coverage is due to limited access: just four Indian media houses – three newspapers and a wire agency – have reporters based in Beijing. The rest rely on international wire agencies – and their residual biases – while Indian TV has no presence at all in China. Barring The Hindu reporter, the others rarely travel out of Beijing, as travel and accommodation costs are not reimbursed to correspondents.

Just how damaging the impact of such slanted coverage can be became evident when a diplomatic crisis erupted following the arrest of the Indian traders in Yiwu in early 2012. The Indian media claimed the traders were humiliated and jailed and an Indian diplomat attacked by local traders. The escalating tensions led to both India and China issuing travel advisories to their citizens. The discussion on online forums turned especially ugly and abusive.

It later emerged that though the traders were jailed, neither they nor the diplomat were mistreated. To a substantial extent, the misrepresentation can be attributed to an information vacuum as very little information is shared by the government. So the media has at the most joint statements, communiqués or official briefings to work from.  

The two governments are working hard to contain the bias through their foreign ministries, youth and sports departments and commercial envoys. Regular youth exchanges have begun, as have joint production of films, Mandarin language classes in Indian government schools and the organisation of business forums where think tanks and policy groups from both countries can regularly interact.

Perhaps by 2015, bilateral perceptions will be more in line with bilateral realities.

 

Shai Venkatraman and Dev Lewis are Authors at Gateway House: Indian Council on Global Relations, Mumbai.

Updated: July 14, 2014 03:06 IST The HinduModi-Xi meet to open new chapter in tiesAnanth Krishnan

The leaders are expected to discuss a wide range of strategic, economic, multilateral issues

Prime Minister Narendra Modi’s first meeting with Chinese President Xi Jinping along the sidelines of the BRICS Summit in Brazil will provide the two leaders the opportunity to lay the framework for a new chapter in bilateral ties.

With the two leaders known in their respective countries for their strong leadership styles, the meeting, which will take place on Tuesday (Monday evening in Brazil), has been accorded more than usual importance: the talks, according to officials on both sides, will also be unusually substantive for an interaction taking place on the sidelines of a multilateral summit. Both leaders are expected to discuss a wide range of strategic and economic issues, as well as common concerns on multilateral matters such as the situation in Afghanistan and the imminent withdrawal of U.S. forces.

In China, most attention has focussed on trade ties. Mr. Modi is seen here as among the most business-friendly of India’s leaders, in part because of his four visits as Gujarat Chief Minister and his State’s courting of investment. His last visit saw the signing of a record $500-million deal for an energy park by the Chinese firm TBEA.

India and China on June 30 signed a first-ever MoU to formalise the setting up of China-dedicated industrial parks in India, with four such parks being considered. An industrial park cooperation working group to finalise locations and investment policies has been set up.

The move comes as both sides attempt to revive bilateral trade, which fell by 12 per cent last year — after a decade of rapid growth — to $66 billion, even as the imbalance in China’s favour expanded to a record $29 billion.

The deficit this year is on track to surpass last year’s figure. According to newly released trade figures for the first half of 2014 available with The Hindu, exports to China amounted to only $9.16 billion out of two-way trade of $33.82 billion in the first six months.

Chinese Vice Foreign Minister Li Baodong told presspersons here that he expected the Modi-Xi meeting to “have implications for advancing bilateral relations and further promote cooperation between the two countries”.

Lan Jianxue, a strategic affairs expert at the China Institute for International Studies (CIIS), a Foreign Ministry-affiliated think-tank and a former diplomat at the Chinese Embassy in New Delhi, said in an earlier interview with The Hindu that he saw Mr. Modi as “a business-friendly politician” who would boost economic ties and had been engaging with Chinese entrepreneurs.

For the two governments, the priority now should be to “reconnect immediately and reach as much consensus as possible on the future road map,” he said.

He said both sides should not only “respect the existing effective mechanisms between two sides regarding political, economic, strategic, cultural issues and the boundary question” but also “explore the new dividend Mr. Modi and his administration would bring towards China-India relationship”.

Xi says China, India partners not rivalsGlobal Times, July 15Chinese President Xi Jinping said that China and India are strategic partners rather than rivals. “Judging from either bilateral, regional or global perspective, China and India are long-lasting strategic and cooperative partners, rather than rivals,” said Xi. Xi made the remarks at a meeting with Indian Prime Minister Narendra Modi ahead of their joint attendance at a summit of BRICS countries, to be held in Brazil. China and India, two largest developing countries and emerging market economies, are striving for national rejuvenation, said Xi, adding that both of them treasure peace and development. As two important poles of the world, China and India share many strategic converging points, said Xi. “If the two countries speak in one voice, the whole world will attentively listen; if the two countries join hand in hand, the whole world will closely watch,” said the Chinese president.

Chinese President urges early negotiated solution to border issues with IndiaGlobal Times, July 15Chinese President Xi Jinping vowed to build strong ties with India, calling for negotiated solutions to the border issues between the two neighbors at an early date. Xi made the remarks at a meeting with Indian Prime Minister Narendra Modi ahead of their joint attendance at a summit of BRICS countries. During their talks, Xi invited Modi to visit China at an early date. He said the two countries should converge development strategies, build closer development partnership and expand friendly exchanges in the fields of culture, education, religious affairs and youth.Xi urged the two countries to launch a batch of exemplary projects in industrial investment and infrastructure building like railway construction, and expand cooperation in such fields as service trade, investment and tourism, so as to gradually realize a generally-balanced and sustainable bilateral trade.

China invites Modi for APEC Summit but rivalry simmersReuters, July 15Chinese President Xi Jinping invited India to attend a summit of the APEC trade group in November, sending a message of cooperation during the first meeting between the new leaders of the world’s most populous countries. But behind the smiles at Xi’s 80-minute meeting with Prime Minister Narendra Modi in Brazil, India’s rivalry with its powerful neighbour bubbled up as the two nations argued over who would host the headquarters of a proposed BRICS joint development bank. Xi and Modi met soon after their arrival at a summit of the BRICS group of emerging powers. Xi said the two countries should join hands in setting global rules and suggested he attend the November 2014 meeting of the 21-nation APEC in Beijing, as well as take part in Chinese-led regional initiatives.

2 incursions by China in 3 days even as Modi, Xi talkThe Times of India, July 17At a time when India and China are reaching out to settle the boundary dispute, two incursions by the People’s Liberation Army of China have been reported in the Ladakh sector in the past three days. The incursion attempts were reported in Demchok and Chumar areas of Ladakh sector in J&K. PLA soldiers were, however, promptly pushed back into their territory by Indian security personnel. The incursion bids by the PLA came even as Prime Minister Narendra Modi and Chinese President Xi Jinping emphasized on the need to find a solution to the boundary question during their meeting in Fortaleza in Brazil on Tuesday on the sidelines of the BRICS Summit. The latest incident occurred in Charding Nilu Nullah Junction (CNNJ) in Demchok sector on Tuesday when PLA personnel entered the area on their vehicles in the wee hours claiming it to be Chinese territory, security establishment sources said. The PLA soldiers who wanted to have a round of the area were stopped by Indian Army and personnel of Indo Tibetan Border Police (ITBP), a force which guards the India-China border.

China distributes millions of controversial maps to troops, incorporating claim on Arunachal: ReportTimes of India, July 18China is distributing millions of controversial updated maps to its military in the first upgrade in 30 years, reportedly reinforcing its claims over Arunachal Pradesh. All major army units will receive new, more accurate maps in the near future, PLA Daily reported. The Lanzhou Military Command, one of seven PLA ground force commands, has updated more than 15 million maps for its troops, it said. China is distributing millions of controversial updated maps to its military in the first upgrade in 30 years, reportedly reinforcing its claims over Arunachal Pradesh. All major army units will receive new, more accurate maps in the near future, PLA Daily reported. The Lanzhou Military Command, one of seven PLA ground force commands, has updated more than 15 million maps for its troops, it said. Though the official media here has not published the maps being circulated in its military, it reportedly incorporated China’s claims over the disputed borders with India as well as South and East China Seas, which were hotly contested by several of China’s neighbours.

India puts conditions on China for better relationsDeccan Chronicle, July 20In an important strategic move, India has directly linked trade and economic relations with China to the

security scenario between the two nations, particularly incursions by Chinese forces and an early settlement to the border dispute. A background note on this issue prepared by the office of the national security adviser (NSA) for a meeting between Prime Minister Narendra Modi and Chinese President Xi Jinping on the sidelines of the BRICS summit in Brazil clearly spelt out that China needs to address India’s security concerns for better business and economic ties.

PM Modi, Xi struck rapport at BRICS summitHindustan Times, July 20PM Modi and President Xi Jinping discussed various issues ranging from their border dispute to economic cooperation at the BRICS Summit in Brazil. Analysts say Xi wooed Modi with the peace-through-development approach by offering to make India a founding member of the $50-billion Asian Infrastructure Investment Bank, mostly funded by China. The bank is seen a plan to counter the Asian Development Bank, which is dominated by the US and Japan. The Chinese feel countries in Asia need more lending agencies to fund their growing infrastructure needs. Xi also invited India to attend the APEC summit in November, sending a message of cooperation during the first meeting between the new leaders of the world’s most populous countries.

China, India seek to develop Military CooperationPress TV, July 21Senior Chinese and Indian military officials have underlined the need for the development of bilateral military cooperation. During a meeting in Beijing on Thursday, General Bikram Singh, the head of India’s army, and Fan Changlong, the vice chairman of China’s Central Military Commission, explored ways to further military ties. “Our common interests far outweigh our differences,” Fan told Singh. “Both countries have sufficient wisdom and capability to deal with historical problems.” Singh also called on the two countries to tap into their potentialities to boost communication and interaction between the two militaries with the aim of ensuring peace and tranquility in border areas.

Guest Column

China and India: Xi and Modi

by Kanti Bajpai

7/22/14

Narendra Modi’s coming to power in India presages the possibility of a new phase in China-India relations. And this despite the fact that he is seen as hypernationalistic and has made some strong statements during the election campaign on Chinese attitudes towards Arunachal Pradesh. Beijing certainly responded to his victory with alacrity. Premier Li Keqiang spoke to Modi on the telephone personally to congratulate him. Modi responded with some warm statements about China-India relations and invited Xi Jinping to visit India in September 2014. The Chinese Foreign Minister Wang Yi then visited India in early June. Most recently, Xi met Modi at the BRICS Summit in Brazil. The Summit was fairly momentous in respect particularly of an agreement to set up the New Development Bank with an endowment eventually of US$ 100 billion. The headquarters of the Bank are to be in Shanghai and the first head of the bank, for a period of five years, will be from India.

This positive synopsis of China-India relations is important. The two countries have got off to a good start with the new government assuming power in New Delhi. There is a good chance that the two leaders will overlap for many years – Xi has ten years in power since taking over; and Modi could well win a second five year term.

Having said that, there are troubling signs. India continues to accuse China of straying into its side of the Line of Actual Control. China has once again insisted that it has claim to Arunachal Pradesh, with New Delhi once again affirming that whatever Beijing’s claims, it sticks by its version of the territorial dispute. In his meeting with Xi, Modi made sure that he underlined the importance of a quick settlement of the border and stability along the LAC. Modi also emphasized the need for a more equitable trade relationship. Xi has conceded that trade should be more equal and has indicated that trade in services could help bridge the gap. Fundamentally, though, China continues to insist that India must get its house in order economically.

The BRICS summit had positive and less positive moments for China-India. On the positive side, Modi once again welcomed Chinese investment in India and China’s participation in industrial parks in India. China seems to be more interested in Indian services providers coming to China. Xi invited India to attend the APEC meetings, which is symbolically important since India has been frozen out of the organization thus far. Xi also said that India should play a bigger role in the Shanghai Cooperation Organization (SCO) – India of course is angling for full membership. The Summit led to a deal on the New Development Bank after some hard negotiation over the past couple of years. Modi eventually put his weight behind the deal to have the Bank located in Shanghai and for all five member states to initially contribute the same amount (US$ 10 billion), with China gradually becoming the largest contributor.

The less positive moments related to the Bank as well. While there was agreement on it in the end, it came in the final session of the meeting, indicating that India (and Brazil), who were uneasy at China’s dominance of the proposed Bank, held out for a long time. India appears to have held out also on the headquarters being in Shanghai. Given China’s power, this was a foregone conclusion, and New Delhi missed an opportunity to be more gracious on both issues. It is fair to say too that there were no great signs of personal chemistry between Xi and Modi. Modi is of course new to the big diplomatic stage. Yet for all the talk of China-India bonhomie in the wake of Modi’s ascent to power, the face to face interaction lacked warmth and spark. The bilateral meeting between the two leaders went on much longer than originally scheduled, which is a good thing, but it has yielded little – at least from what we know so far.

Well begun is half done, it is said. The two leaders got off to a correct, dignified, and accommodative start – given the deal on the New Development Bank in particular – and there is a base to build on. The world will be watching carefully to see how things develop in the coming months. Xi is due in India in September, and Modi is due in Washington also in September. It will be interesting to see if the China-India meeting happens before the India-US meeting. The BRICS deal on the Bank has been inked. Once again, there will be questions on whether or not it will take off and how well China and India work within the Bank.  New Delhi and others will be waiting to see if China pushes India’s case in APEC and the SCO. Beijing and the world will wonder if Modi will deliver on Chinese participation in India’s infrastructure projects and China will set up factories in India’s proposed industrial parks. Then there is always the border issue. China seems to have accepted that a settlement must come sooner rather than later, but we will have to see what this actually means in the coming months in the bilateral negotiations, whether or not there is any new thinking on the Chinese side in particular.

Modi represented India adequately at the BRICS Summit and got a chance to size up Xi Jinping. Likewise, the Chinese leader got a better sense of the Indian leader and how he thinks. Both are strong, strategic-minded, and nationalistic leaders. They want to consolidate their power at home and to ensure that the external environment is conducive to internal stability and development. To that extent, it is in their interest to work well with each other since the two countries can do serious harm to the other’s interests. The next year or so will give us a much clearer idea of the direction that China-India relations will take.

Kanti Bajpai is Vice-Dean for Research at the Lee Kuan Yew School of Public Policy, Singapore.

K@W

Can India’s Modi Government Navigate the Tough Terrain of Labor Law Reform?

Aug 18, 2014

Asia-Pacific India

Indian Prime Minister Narendra Modi’s success in attracting investments to the state of Gujarat, where he was chief minister, was largely due to labor law reforms. One of his election promises was that he would create a similar environment for the whole of India. Indeed, in Modi’s Independence Day speech on Friday, he urged global businesses to locate their factories in India. “I tell the world: Come, make in India,” Modi said. “Sell anywhere, but manufacture here.” His government has started taking small steps forward. But already considerable opposition is building up.

On July 30, the Union Cabinet approved amendments to three acts — the Apprentices Act 1961, the Factories Act 1948, and the Labor Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act 1988. Barely a week later, on August 6, two bills were introduced in the Lok Sabha, the lower house of Parliament. The third — the Labor Laws amendment — is being introduced in the Rajya Sabha (the upper house). The Apprentices (Amendment) Bill was passed by the Lok Sabha last week.

The trade unions were up in arms immediately. “We oppose the amendments vehemently because we feel that they are against the interests of the workers,” says D.L. Sachdev, national secretary of the All India Trade Union Congress (AITUC). AITUC is affiliated with the Communist Party of India. “The workers will be at the complete mercy of the employers,” says Tapan Sen, general secretary of the Communist Party of India (Marxist)-affiliated Centre of Indian Trade Unions (CITU). “They will be without any protection and, given the current unemployment situation in the country, the workers will become slaves of the contractors and employers.”

The Congress Party-affiliated Indian National Trade Union Congress (INTUC) took the lead in organizing a meeting of all the prominent trade unions. Together, they claim a membership of around 100 million. The Supreme Court has limited the unions’ power by banning bandhs (total shutdowns), but the numbers give them lots of clout. The joint meeting was also attended by the Bharatiya Mazdoor Sangh (BMS), the trade union arm of the ruling Bharatiya Janata Party (BJP).The unions have decided to hold a joint national

convention in New Delhi in the first week of September “to intensify the nationwide agitation.” (For more on India’s labor law reforms, see this opinion piece by Manish Sabharwal , founder and chairman of Bangalore-based staffing services firm Teamlease Services.)

Incidentally, the labor law amendments are not the only target of the unions. They are opposed to almost every reform initiative of the Modi government. A circular issued by Sen states: “The [union] meeting denounced the retrograde move of the government to allow 49% FDI (foreign direct investment) in the defense sector, 49% in the insurance sector and 100% in the railways, and also the government move to go for huge divestment of profit-making public sector enterprises.”

Opposition to the amendments is also building up in the Congress Party. Although the Congress has only 44 seats in the Lok Sabha (the lower house of Parliament) against the BJP’s 282, it is flexing its muscles in the Rajya Sabha (Parliament’s upper house). The Congress has 69 seats there against the BJP’s 42; regional parties make up most of the 250-member house. The Congress was the first mover in some of these amendments; in 2012, then minister of labor and employment Mallikarjun Kharge told the Lok Sabha that on the Apprentices Act “inter-ministerial consultation has been completed and the proposal is being sent to the cabinet secretariat for consideration.”

“The labor laws are probably the single biggest hurdle to unleashing India’s potential.” — Rajesh Chakrabarti

Now Kharge, as leader of the Congress Party in the Lok Sabha, is opposing the changes proposed by the Modi government. The specific objection to the Apprentices Act reform is that the amendment seeks to increase the minimum number of apprentices employable, per quarter, from 50 to 100 per unit, which Kharge says will encourage companies to use more apprentices at the cost of permanent jobs.

Dress Rehearsal?

The Congress and the unions are perhaps more agitated about the developments in Rajasthan, where four labor law amendments have already been passed by the state assembly. This includes the contentious Industrial Disputes Act, which the center has kept on the backburner at the moment.

“The amendments by the Rajasthan government will push out more than 80% of the industrial undertakings, as well as their workers, from the coverage of any labor laws by way of various aspects like working hours, safety, wages, etc.,” says Sen. “The government says that these amendments are for simplifying or bringing in flexibility. But the reality is that it will have a strong negative impact on the workers.”   Twitter   Sachdev adds: “The unfortunate part is that both the Rajasthan government and the union government have not consulted the trade unions. That’s a dilution of the tripartite mechanism.”

“Social dialogue is critical,” says K.R. Shyam Sundar, professor of human resource management at Xavier Labor Relations Institute. “The BMS is opposing the change in the laws because of the absence of tripartite consultation.” Yet that may be just a technicality. On the Factories Act, for instance, the government had detailed all the changes proposed in a written statement to the Lok Sabha in early July. Besides, all the amendment bills were hosted on the labor ministry website and comments were invited.

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“These are very important steps in the right direction. The labor laws are probably the single biggest hurdle to unleashing India’s potential,”   Twitter   says Rajesh Chakrabarti, a professor of public policy and executive director of the Bharti Institute of Public Policy at the Indian School of Business.”We have nearly 90% of our labor force working in the unorganized sector precisely because of these laws. They hold back employment and, in the long run, hurt both labor and the economy.”

Many see the amendments in Rajasthan, where the BJP is in power, as a sort of dress rehearsal to gauge the opposition. According to the Economic & Political Weekly: “For a state that has very few industries to come up with such proposals shows that the newly-elected BJP government wants to use Rajasthan as a potential laboratory for tinkering with labor laws before extending them on a national scale.” Sen agrees, noting that “the center has been utilizing their government in Rajasthan as a sort of laboratory in its project of overhauling labor laws in favor of employers.”

Sundar, however, says there could be a different strategy at work. “There are hard labor laws and there are soft labor laws,” he notes. “What we are seeing is the decentralization of labor reforms. The center is undertaking the soft reforms, while the hard reforms are being pushed to the states.”

This is possible because labor is on the concurrent list, which means both the states and the center can pass laws on it. “Any state law needs the President of India’s assent before it goes into the statute books. And the President has to act on the advice of the union cabinet,” says Sundar. The president can exercise what is called the pocket veto i.e. he sits on a bill indefinitely. Thus, the union government can exercise control over state laws.

Hire and Fire

Rajasthan has gone one up on the center by amending the Industrial Disputes Act. The key change is that a company may now close down a unit employing up to 300 workers without seeking government permission. The earlier limit was 100 workers. This will allow companies to exit factories or plants that have proved unviable. Permission to close down such units, of course, never comes.

“Rajasthan has raised the limit to 300 workers,” says Sen. “This means that in the majority of the industries, managements will have a free hand. In effect, the government has allowed hire-and-fire for employers, and workers will lose their job security. The employer will pay only the retrenchment compensation and throw them out. Earlier, they had to get the required permissions and the workers had an opportunity to put forth their point. In most of the cases, the applications of the employers were rejected on grounds of public interest.”

The result, however, is that the country is dotted with closed plants. Workers don’t get paid but they hang around in hope. Employers have to write off the capital they have sunk. When Mumbai became too expensive for the labor-intensive textile industry, companies saw moving out of the city as a viable option. In 1982, some 250,000 workers in more than 50 mills went on strike. Technically, the strike continues today. But the mills have either closed for good or moved out. Most of the 250,000 workers lost their jobs.

“What we are seeing is the decentralization of labor reforms. The center is undertaking the soft reforms, while the hard reforms are being pushed to the states.” — K.R. Shyam Sundar

“If it hadn’t been for the labor laws, workers at the Nokia plant in Tamil Nadu would have been happily working for Microsoft today,” says Sundar, giving another example. When Microsoft bought Nokia’s handset business for $7.2 billion, the plant was kept out of the deal because of certain disputed tax demands and the unwillingness of the software giant to acquire a unit where its management freedoms were restricted. Today, Nokia, which is running the plant for Microsoft as a contract manufacturer, has offered voluntary retirement to its 6,500+ staff; more than 5,000 have accepted.

Chakrabarti, however, offers another view. He notes that the closure of the Nokia plan is a result of an acquisition and says: “Given that the workers have voluntarily chosen [retirement], there is not such a huge problem. Closures and exits will be part of the free market system.”

What are the specific objections the unions have to other pieces of legislation that are being amended? One provision of the new Factories Act is that a worker may work overtime for 100 hours a quarter, up from the

earlier 50 hours. “The increase in overtime means that the workers will be compelled to do double and triple shifts,” says Sen. “This will result in less employment generation.”

The amendments would also allow women to work in night shifts; they can currently only do so only from 6 a.m. to 7 p.m. “This change is being done in the name of gender parity,” says Sachdev. “But we are opposed to it because we feel that adequate security measures are not in place. In the IT [information technology] and BPO [business process outsourcing] industries, it has been streamlined. But in the factory environment, security is still a big concern….”

Ela Bhatt, founder of the Self-Employed Women’s Association (SEWA), notes that the International Labor Organization (ILO) has ruled that any protective measures applying to women (or any category of workers) shall not be construed as being discriminatory. “In other words, anyone who argues that allowing women to work on night shifts represents some sort of progress toward equality argues in bad faith. The equality we want is not to be achieved by leveling downward…” Congress spokesperson Shobha Oza says, “I don’t think it is advisable to have night shifts for women in factories.”

The Congress view may not matter so much because it doesn’t have the numbers in the Lok Sabha. The Rajya Sabha hurdle can be passed if the government decides to get the bills approved by a joint sitting of the two houses. There are precedents for that: The government of Atal Bihari Vajpayee got the Prevention of Terrorism Act passed in a joint session in 2002.

But it may not be possible to similarly defang the unions. There is a perception that the trade union movement in India has been growing weaker. “I don’t agree,” says Sen. “If that were the case, why are employers and the government so concerned and afraid of the trade unions?” Sachdev concedes a point. “Earlier, the trade unions were mainly based in the organized sector,” he says. “Now, with the closure of many industries, formal labor is being pushed into informal segments. So, naturally, there is a change and the trade unions are reorienting themselves. This takes time.”

Labor Laws vs. Investments

“There are many reforms that are pro-labor,” says Sundar. “The government should start with those. Even the ILO has said that bang-bang reforms can be counterproductive.” Tine Staermose, director of ILO’s country office for India, told Business Standard in Delhi that “rushing through [reforms] is a bad idea. It can lead to labor unrest. Investment is a shortsighted way of approaching such reforms.”

“With the closure of many industries, formal labor is being pushed into informal segments. So, naturally, there is a change and the trade unions are reorienting themselves. This takes time.” — D.L. Sachdev

In a joint statement, the central trade unions have attacked both the haste (“these amendments in labor laws are being pushed through”) and the focus. The statement says: “The unions also expressed dismay over the government’s total inaction in implementing the consensus recommendations on minimum wages…”

Do labor reforms lead to higher investment? “In the medium- to long run, almost inevitably. These are precisely the structural changes needed in the country to bring in investment,” notes ISB’s Chakrabarti. SEWA’s Bhatt disagrees. According to Bhatt, it is a “fallacy” that relaxing social protection and workers’ rights attracts investments and creates jobs. “That would mean that the countries with the lowest wages and without any protective labor legislation attract the most investments. In fact, it is the opposite.”

Bhatt notes that “economic success cannot be achieved by reducing workers to virtual serfdom,” and adds that it depends on many other factors like “high productivity — which requires a secure, protected and skilled labor force — an effective vocational training system, free and universal education, and competent and clean professionals.”

With the first single-party majority in 30 years — and five years of governance ahead of it — the BJP may have a different way of calculating the political cost. Its steps on labor laws may be timid so far, but one way or the other, it will get the changes implemented. Already, states like Haryana, which is ruled by a Congress government, are talking about labor reform. The groundwork has been laid. “We are taking [the proposals] to the cabinet and the chief minister will formally announce it,” state labor minister Shiv Charan Lal Sharma told business daily Mint. Others are also thinking about labor reform — according to Mint, “state governments [are] cutting across political lines [to] compete with each other to attract investments and create more jobs.”

“I think the elections have brought out an important change in the central government’s thinking about what reduces poverty,” says Manish Sabharwal, chairman of staffing services firm Teamlease (see his opinion piece on the labor reforms here). “The previous government — largely guided by the civil service ayatollahs at the National Advisory Council — believed that poverty would be reduced by a regime of subsidies and rights. But this government, thankfully, recognizes that its electoral victory is rooted in a vote for development and jobs.” This means that the government is willing to take on the vested interests — a small vocal minority — that have sabotaged any labor law amendments over the past few decades, he adds. “I think this government recognizes that job preservation is not a form of job creation and creating jobs at the scale India needs cannot happen without tackling the regulatory cholesterol that has [hindered] formal job creation.”

According to Chakrabarti, “The number of people entering the job market in the next couple of decades will be gigantic. Protecting the interest of a small coterie of formal sector employees at the cost of millions languishing in semi-employment or the informal sector will make the entire economy unstable. The government has to make the job market flexible to create more jobs for market entrants. Hire-and-fire is normal and inevitable, but with appropriate compensation and, at times, re-skilling. Many companies do it for their own reputation. The government can set standards there.”

NYT

Modi’s Idea of India

By PANKAJ MISHRAOCT. 24, 2014

Photo

Credit Francesco Bongiorni

India, V.S. Naipaul declared in 1976, is “a wounded civilization,” whose obvious political and economic dysfunction conceals a deeper intellectual crisis. As evidence, he pointed out some strange symptoms he noticed among upper-caste middle-class Hindus since his first visit to his ancestral country in 1962. These well-born Indians betrayed a craze for “phoren” consumer goods and approval from the West, as well as a self-important paranoia about the “foreign hand.” “Without the foreign chit,” Mr. Naipaul concluded, “Indians can have no confirmation of their own reality.”

Mr. Naipaul was also appalled by the prickly vanity of many Hindus who asserted that their holy scriptures already contained the discoveries and inventions of Western science, and that an India revitalized by its ancient wisdom would soon vanquish the decadent West. He was particularly wary of the “apocalyptic Hindu terms” of such 19th-century religious revivalists as Swami Vivekananda, whose exhortation to nation-build through the ethic of the kshatriya (the warrior caste) has made him the central icon of India’s new Hindu nationalist rulers.

Despite his overgeneralizations, Mr. Naipaul’s mapping of the upper-caste nationalist’s id did create a useful meme of intellectual insecurity, confusion and aggressiveness. And this meme is increasingly recognizable again. Today a new generation of Indian nationalists lurches between victimhood and chauvinism, and with ominous implications. As the country appears to rise (and simultaneously fall), many ambitious members of a greatly expanded and fully global Hindu middle class feel frustrated in their demand for higher status from white Westerners.

Narendra Modi, India’s new prime minister and main ideologue of the Hindu-nationalist Bharatiya Janata Party, is stoking old Hindu rage-and-shame over what he calls more than a thousand years of slavery under Muslim and British rule. Earlier this month, while India and Pakistan were engaging in their heaviest fighting in over a decade, Mr. Modi claimed that the “enemy” was now “screaming.”

Since Mr. Naipaul defined it, the apocalyptic Indian imagination has been enriched by the exploits of Hindu nationalists, such as the destruction in 1992 of the 16th-century Babri Masjid mosque, and the nuclear tests of 1998. Celebrating the tests in speeches in the late 1990s, including one entitled “Ek Aur Mahabharata” (One More Mahabharata), the then head of the Rashtriya Swayamsevak Sangh (the National Volunteers Association, or R.S.S), the parent outfit of Hindu nationalists, claimed that Hindus, a “heroic, intelligent race,” had so far lacked proper weapons but were sure to prevail in the forthcoming showdown with demonic anti-Hindus, a broad category that includes Americans (who apparently best exemplify the worldwide “rise of inhumanity”).

A Harvard-trained economist called Subramanian Swamy recently demanded a public bonfire of canonical books by Indian historians — liberal and secular intellectuals who belong to what the R.S.S. chief in 2000 identified as that “class of bastards which tries to implant an alien culture in their land.” Denounced by the numerous Hindu supremacists in social media as “sickular libtards” and sepoys (the common name for Indian soldiers in British armies), these intellectuals apparently are Trojan horses of the West. They must be purged to realize Mr. Modi’s vision in which India, once known as the “golden bird,” will “rise again.”

Mr. Modi doesn’t seem to know that India’s reputation as a “golden bird” flourished during the long centuries when it was allegedly enslaved by Muslims. A range of esteemed scholars — from Sheldon Pollock to Jonardon Ganeri — have demonstrated beyond doubt that this period before British rule witnessed some of the greatest achievements in Indian philosophy, literature, music, painting and architecture. The psychic wounds Mr. Naipaul noticed among semi-Westernized upper-caste Hindus actually date to the Indian elite’s humiliating encounter with the geopolitical and cultural dominance first of Europe and then of America.

These wounds were caused, and are deepened, by failed attempts to match Western power through both mimicry and collaboration (though zealously anti-Western, Chinese nationalism has developed much more autonomously in comparison). Largely subterranean until it erupts, this ressentiment of the West among thwarted elites can assume a more treacherous form than the simple hatred and rejectionism of outfits such

as Al Qaeda, the Islamic State and the Taliban. The intellectual history of right-wing Russian and Japanese nationalism reveals an ominously similar pattern as the vengeful nativism of Hindu nationalists: a recoil from craving Western approval into promoting religious-racial supremacy.

The Russian elite, created by the hectic Westernizing ventures of Peter the Great, was the first to articulate the widespread sense of inadequacy and failure created in societies trying to catch up with the modern West. In 1836, Pyotr Chaadaev argued in “First Philosophical Letter” that, “We belong neither to the West nor to the East, and we possess the traditions of neither.” His eloquent self-pity, which shook up Pushkin as well as Gogol and Tolstoy, inaugurated the semi-Westernized Russian elite’s tormented search for a native identity to uphold against the West.

In the 1920s, Russian thinkers exiled to Paris and other Western capitals by the Bolshevik revolution tried to reconfigure Russia’s place between Europe and Asia with a doctrine they called Eurasianism. While approving of a monolithic economy and one-party rule, these hypernationalists exhorted a religious revival and unity across Russia to combat evil influences from the immoral West.

In an astonishing development, their grandiose intellectual conceits have enjoyed both political imprimatur and popularity since the end of the Cold War, after Russia’s apparent deception by a triumphalist West. Today, while annexing Crimea and throttling domestic critics, President Vladimir Putin quotes the religious theorist Nikolai Berdyaev, author of “The Russian Idea.” And his cohorts in the media and the Orthodox Church circulate conspiracies that present the West as intent upon humiliating Russia with the help of NGOs, journalists, homosexuals and Pussy Riot.

The perils of such ideological inebriation had already been illustrated by Japan’s descent into unhinged anti-Western imperialism in the early 20th century. As Japan grew stronger, partly with the help of Western imperialists, only to bump up against their presence in Asia, the obsession with beating the West at its own game intensified. Like the votaries of the Russian Idea, many Japanese thinkers became as frantic about defining Japaneseness vis-à-vis the West as with championing strict state control of domestic society.

The catch-all concept of kokutai — which roughly translates as “national polity embodied by the emperor” — asserted Japan’s evidently unparalleled virtues. Philosophers of the Kyoto School, like Nishida Kitaro and Watsuji Tetsuro, made more ambitious attempts to establish that the Japanese mode of cognition through intuition was both different from and superior to Western-style logical thinking. Such supercilious nativism provided the intellectual justification for Japan’s brutal assault on China in the 1930s, and then the sudden attack on its most significant trading partner in 1941.

Today, against the backdrop of a severe crisis of capitalism, Prime Minister Shinzo Abe, like Mr. Putin, is asserting an unapologetic nationalism. Vowing to “take back Japan,” partly by revising the country’s pacifist Constitution, and disowning its previously expressed guilt for wartime brutalities, Mr. Abe has stoked tensions with China.

Another Arundati Roy in the making. Good going Mishra, but Im afraid you will have to stoop further down to get the awards that you are...

This is just the kind of retrograde 1920s-style nationalist dogma that is making a big comeback in India, especially since last year, when Mr. Modi, a close ally of Mr. Abe, overcame the taint of various suspected crimes to launch his bid for supreme power. Interestingly, it is not the R.S.S.’s khaki-shorts-wearing volunteers but rather quasi-Westernized Indians in the corporate-owned media and mysteriously well-funded think tanks, magazines and websites who have provided the ambient chorus for Mr. Modi’s ascent to respectability.

India’s recent economic travails and diminished international standing have frustrated these rising Indians’ sense of entitlement, provoking them to lash out at such handy scapegoats as “racist” and “Orientalist” Westerners and Indian libtards and sepoys. Typical of their ersatz nativism is a book entitled “The New

Clash of Civilizations,” which gleefully heralds India’s hegemony worldwide. It was written by Minhaz Merchant, the Anglicized former editor of a defunct lifestyle magazine called Gentleman and now a self-appointed publicist for the prime minister. Many such “Modi Toadies,” as Salman Rushdie calls them, had Western tails once, like the Harvard-economist-turned-book-burner.

Others still cling to those tails, such as the wealthy businessman called Rajiv Malhotra, hailed by Mr. Modi for “glorifying our priceless heritage.” Mr. Malhotra routinely puts out, from his perch in suburban New Jersey, popular screeds asserting that American and European churches, Ivy League academics, think tanks, NGOs and human-rights groups are trying to break up Mother India with the help of both dalits and sepoy intellectuals.

Lest he be accused of irrationality, Mr. Malhotra also claims that the intuitive Indian worldview is not only different from but also cognitively superior to the logic-addled Western outlook. Mr. Malhotra has worked up his own version of the Russian Idea and kokutai with some piffle about the “integral unity” of Indian philosophy, a notion that conflates very different Hindu and Buddhist traditions. In his North American redoubt, Mr. Malhotra runs workshops aimed at mass-producing “intellectual kshatriyas” (intellectual warriors).

The fantasies of racial-religious revenge and redemption that breed in Western suburbs as well as posh Indian enclaves today speak of a vast spiritual desolation as well as a deepening intellectual crisis. Even Mr. Naipaul briefly succumbed to the pathology of mimic machismo he had despised (and, later, also identified among chauvinists in Muslim countries). He hailed the vandalizing by a Hindu mob of the Babri Masjid mosque in 1992, which triggered nationwide massacres of Muslims, as the sign of an overdue national “awakening.”

There are many more such nonresident Indians in the West today, vicariously living history’s violent drama in their restless exile: In Madison Square Garden, in New York, last month, more than 19,000 people cheered Mr. Modi’s speech about ending India’s millennium-long slavery. But hundreds of millions of uprooted Indians are also now fully exposed to demagoguery. In an unprecedented public intervention this month, the present chief of the R.S.S., who wants all Indian citizens to identify themselves as Hindus since India is a “Hindu nation,” appeared on state television to rant against Muslim infiltrators and appeal for a boycott of Chinese goods.

Such crude xenophobia, now officially sanctioned in Mr. Modi’s India, seems only slightly less menacing than the previous R.S.S. chief’s wishful thinking about one more Mahabharata against demonic anti-Hindus. Japan’s expansionist gambles in China and the Pacific in the last century and, more recently, Russia’s irredentism in Ukraine show that a mainstreamed rhetoric of national aggrandizement can quickly slide into reckless warmongering. Certainly, the ruling classes of wannabe superpowers have spawned a complex force: the ideology of anti-imperialist imperialism, which, forming an axis with the modern state and media and nuclear technology, can make Islamic fundamentalists seem toothless. One can only hope that India’s democratic institutions are strong enough to constrain yet another wounded elite from breaking out for geopolitical and military manhood.

Pankaj Mishra is the author of “From the Ruins of Empire,” among other books.

Will Modi’s latest move boost India stocks further?Katie Holliday | @hollidaykatie Monday, 3 Nov 2014 | 7:28 PM ETCNBC.com18SHARES

Indian stocks have been on a tear this year and the government's plan to implement its budget early could provide a further boost.

"Comments that the Indian government aims to implement its new budget from 1 April (three months early) should only add to the [positive] sentiment," said Chris Weston, market strategist at IG.

"This [Nifty 50 index] still has great upside potential. Naturally there will be corrections, but buyers continue to step in and pay up for the earnings, with improving fundamentals," he said.

India's Nifty 50 surged 32 percent year to date and is Asia's best performing index. By contrast, the second-best performing index, the Shenzhen Stock Exchange Composite index, is up 28.72 percent, while last year's standout, Japan's Nikkei, is only up 1.5 percent.

Read MoreIndia goes from fragile to fabulous

Modi-mania

The election of Prime Minister Narendra Modi in May and his promise to boost India's flagging economy through much-needed reforms underlie India's stock market rally.

In July, Modi announced a budget of structural reforms aimed at reviving growth. A decision to speed up the budget process by three months - announced on Saturday - could see some of these measures rolled out sooner than expected.

"What investors are realizing is that, in a world that is pretty short of growth, you are seeing the best opportunities in India," said Geoff Lewis, global market strategist at JP Morgan Asset Management.

"It's an economy that's turned around cyclically and also we are seeing a positive response to 'Modinomics,'" he said, referring to Modi's plan to unblock stalled infrastructure projects, attract foreign investment and revive economic growth.

Read MoreSoaring India stocks have strategists on edge

India's economy expanded a faster-than-expected 5.7 percent on year in the April to June quarter, recovering from its lowest growth rate in a decade in the previous quarter.

"If you compare against long-term averages in terms of price-to-earnings ratios, we think the Indian stock market is one of the stories where the fundamentals are still strong, so will be relatively supported," added Lewis.

Stocks on the Nifty 50 index are trading at an average price-to-earnings ratio of 16.62 times earnings.

Read MoreCrackdown on 'black money' takes off in India

Doubts remain

Other analysts doubt that speeding up the budget will greatly impact equity markets.

"The scope for any near-term gains from the budget may be checked because some of it has already been unveiled," said Vishnu Varathan, market economist at Mizhuo Bank.

The external environment poses the greatest risk to Indian stocks' good fortune, he added.

"If we don't see euro zone growth recovering sustainably there could be enough cause to question the optimism on India's prospects," he said. "Obviously the Bank of Japan's move has contributed to the momentum in global equity markets, but if that momentum starts to waver we could see a bit of a pull back."

The Asian Agehttp://www.asianage.com/india/pm-modi-brings-paradigm-shift-indo-us-relations-482

PM Modi brings a paradigm shift in Indo-US relationsDec 11, 2014 - Surendra Kumar

Prime Minister Narendra Modi and US President Barack Obama at the Martin Luther King Jr Memorial in Washington— PTI

Narendra Modi has brought a brand new dynamic to India’s ties with the country that denied him a visa for a decade by inviting US President Barack Obama to next year’s Republic Day parade in New Delhi

Narendra Modi, who couldn’t set foot on American soil for ten years, tweeted recently that he hoped to have his friend over at the Republic Day parade in January next year. Within half an hour, there was Twitter confirmation that the friend has accepted his invitation and would be in Delhi. If that friend happens to be the President of the US, doesn’t it symbolise a paradigm shift in India-US relations?

Especially so, when one realises that Barack Obama will be the first US President ever to be the chief guest at the Republic Day parade; an honour which we have bestowed even upon the leaders of China and Pakistan, our two prickly neighbours, but not on the American President. Again, this will be the first time that any US President would have visited India twice in his term. By now, Indians should have become accustomed to new firsts created by Mr Modi. After a series of firsts during his visit to USA, he created a few in Australia too; became the first Indian PM to be given a huge reception by the Australian PM in MCG in Melbourne and the first to have been welcomed by 18,000-strong NRIs in Allphones Arena, Sydney, who matched the audience of MSG in New York in terms of their energy, excitement and exuberant chant of “Modi !Modi!”.

It’s a known fact that prevailing domestic and international conditions impact foreign relations. But, in reality, what shapes and affects the foreign relations of a country most is the leadership, the vision it espouses and the direction it wants to follow.

Mr Modi wasn’t allowed to enter USA for a decade, but being a mature and farsighted statesman, he harbours no bitterness or ill will against the US. National interests take precedence over personal hurt. He has a crystal clear vision for a resurgent India: Make it a developed nation whose people live a decent and dignified life with all their basic needs food, shelter, health, hygiene, education having been met, living in peace and harmony with all her neighbours and beyond and occupying her rightful place in the comity of nations and contributing towards world peace and development. And to transform that vision into reality, he has a practical roadmap which envisages closer and warmer relations with the US, notwithstanding the fact that Mr Obama has become a lame duck President and his party has lost majority in both the Houses of the US Congress. Mr Modi is aware that Mr Obama, being the Executive President will enjoy all decision making powers till the last moment of his tenure and can play a crucial role in giving a definite edge to India-US strategic partnership and make it a true defining relationship of the 21st century.

In the six-month report card on Modi govt, various publications have credited him to have performed exceptionally well in the domain of foreign affairs. Starting with his invitation to Saarc leaders to attend his inauguration, followed by his visits to Bhutan, Nepal, US, Japan, Myanmar, Australia, Fiji and in his interaction with world leaders at the Brics Summit, India-ASEAN & East Asia Summit and G-20 Summit in Brisbane, he exudes self-assured confidence flowing from his majority in the Parliament and his undisputed position in his party and the government. His style reflects positivity, pragmatism, accommodation and genuine desire to find common grounds where all stakeholders perceive a win-win situation. For marketing “Make in India” at international forums, he offers his 3 Ds(Democracy, Demography & Demand) and stresses FDI (first develop India). For regional cooperation his 3 Cs (Culture, Connectivity and Commerce) form the practical bases for taking the relations to the next level and produce concrete results.

He has shown a flair for developing personal rapport and generating warmth with important leaders which creates friendships and helps understand and appreciate each other’s point of view. It was Mr Modi’s personal charm which made Mr Obama accompany him on his visit to the Martin Luther King Memorial in Washington. The same personal chemistry led the Australian PM Abbot to call him his brother and address him by his first name. Even during the visit of the Chinese President Xi Jinping, though there was a stalemate on the border, Mr Modi charmed the serious looking Mr Xi with his personal attention and hospitality in Ahmedabad on the Sabarmati front.

Modi seems adept in killing several birds with one stone.

By his out-of-the-box decision to invite President Obama to be the chief guest at the Republic Day parade, Mr Modi had not only raised his personal stature as a farsighted statesman but also conveyed signals to Pakistan, China, Asean and the rest of the world. Domestically, already undisputed leader of his party and the government, he has emerged as a leader far ahead of his time. He would also silence his detractors who have been shouting that there wasn’t any big-ticket announcements during his US visit. Mr Obama’s presence as the chief guest at the Republic Day parade is a big-ticket announcement though it can’t be

quantified in terms of dollars. Closer relations with the US will have a cascading effect on India’s relations with countries like Japan, Australia and even the EU. A whiff of this warmth should have positive effect in the NSG too. Asean and other countries in the Indian Pacific region will welcome this. There is no gainsaying the fact that concerns about China’s increasing assertiveness are forcing major powers including USA to revisit their priorities and look for convergence of interest and demand adherence to laid down International laws including the law of seas. It isn’t a mere coincidence that the Pentagon, in it’s report Progress Toward Security and Stability in Afghanistan has openly accused Pakistan of using terrorist proxies against India. US trade representative Michael Froman told Indian business community at FCCI on November 24 that the personal intervention of Mr Modi and Mr Obama led to India–US agreement on food security that would eventually pave way for the trade facilitation agreement of the WTO. Obviously, the US is looking at India as a huge market not only in the defence sector, where its exports in the last five years have crossed $9 billion, but also in the field of green technology, smart cities, energy, solar energy, agriculture, water management, telecom, IT and education.

On the other hand, India seeks higher investment from the US, joint research and joint production in the defence sector, higher technology denied in the past, space research and easier access to the US market. After Mr Modi’s interaction at India-US Business Council in October, MasterCard president Ajay Banga asserted that American companies were ready to invest up to $41 billion in India in the next five years. Many observers felt it was just a gimmick to upstage much higher investment pledges from Japan and China. In the last 2 months, CEOs of Microsoft, Facebook, Google have met Mr Modi and painted promising economic prospects for India. Even the IMF has projected Indian economy to grow at 6.25 per cent next year. Thanks to the decline in international oil prices inflation and CAD have come down. With winter crop of fruits and vegetable flooding the market, consumer anger on price rise is receding.

Mr Modi has emerged as the smartest and dynamic brand ambassador of India and is marketing India in the most positive colours possible all over the world. Slew of economic policy decisions of the government indicate that India is back in business and investors, including US investors, are having a fresh look at India under the new strong, go-getter leader. The biggest contribution of Mr Modi is that no one perceives India in the ICU any more as was the case in the last two years. Sure, India is out of the ICU and walking steadily and will hopefully start galloping soon.

US pressure on the issues related to IPR, climate change, solar supplies, Indian trade policies and taxation laws haven’t disappeared.

Some Indian grievances remain, though the new US immigration law should be good news to Indian students and IT companies. What is significant is the genuine willingness to accommodate each other and make sincere efforts to find solutions rather than indulge in unending blame-game. This is the effect of Modi mantra: “Chalein Saath Saath”.

Mr Obama’s presence at the Republic Day parade will, undoubtedly, underline the paradigm shift in India-US relations and augur well for warmer relations between the two largest democracies.

The writer is a former ambassador and the founding-president, Indo American Friendship Association, New Delhi

Ahead of Obama Visit, a Report Card on India Thursday, 22 January 2015 08:31 By Papri Sri Raman, Truthout | News Analysis

President Barack Obama during a bilateral meeting with Prime Minister Narendra Modi of India at the Oval Office in Washington, Sept. 30, 2014. Beneath the surface of the two leaders’ personal relationship are the shifting tectonic plates of geopolitics. With the expansion of Chinese power into the Indian Ocean, American and Indian interests in the region are gradually converging. (Doug Mills/The New York Times)

The scoop for the Bharatiya Janata Party regime in India is perhaps getting President Barack Obama to visit in the first year of its five-year term. The Narendra Modi government won the nationwide general elections in May 2014 by a majority of 282 seats out of 543, its few friends increasing in number throughout the last ten months. President Obama and wife Michelle arrive in India on 25 January for a three-day visit that will include talks between the US president and Prime Minister Narendra Modi. On 26 January, Obama will attend India's Republic Day parade as the chief guest. The couple will then go to Agra to see the iconic Taj Mahal. And more detailed talks.

The Modi government came to power standing on an anti-corruption plank. However, little has been really achieved in this area, except that the government - at the instance of the Supreme Court – has called for fresh tenders to mine coal as the previous government's licenses were attacked as based on bribery and/or favoritism.

The new government has experienced a few embarrassments – MP statements and the orders for state governors to resign, making Prime Minister Modi unhappy with his leaders and officials. Meanwhile, Modi's master strokes were downsizing the government and inviting leaders of the SAARC (South Asian Association for Regional Cooperation- primarily India's immediate neighbors) countries to his swearing-in ceremony. The invitees included Pakistan's Prime Minister Nawaz Sharif and then Sri Lanka's President Mahinda Rajapakse, both contentious figures in India.

Domestically, Modi has tried to erase lethargy in the government and its bureaucracies, a cultural shock, that is not yet fully effective. His officers now turn up for work at nine in the morning, often work through holidays, have been told to clear their files on a day-to-day basis, sign papers on time and keep their offices clean. This also means no taking bribes, no nepotism and no favoritism. Modi's nineteen "Don't"s for all bureaucrats ask them to ensure that all policy decisions are guided solely by "public interest" and that they operate with total "political neutrality." But this does not mean policies do not reflect the party's right-wing pressures.

One of the first controversies that hit the Modi government arose over its abrupt order to Governors of several states to move. The Governor's post is decorative and political, not elected, and the rudeness with

which it was done was criticized as was the recent sacking of the head of Defense Research Development Organization, well-known scientist Avinash Chander. The justification, "He is too old," was not a reason anyone bought. Of course, there have been other moves: the denigration of the planning commission, the removal of German language from the school curriculum, and inclusion of "Vedic science" in school courses, ending a four-year Baccalaureate course in Delhi University. Modi's ministers argue India had aviation and plastic surgery some five thousand years ago. Some, including religious leaders in the cabinet, have been known to give hate speeches; some elected parliament members have even come out with dictums to "Hindu women"...that they should bear four children. Meanwhile, rapes have not decreased; safety of women has not increased; poverty has not decreased; surveys say Indian children of ages six to fourteen can neither read basic languages, nor count; some social services have been cut; and funding of non-government organizations have been curtailed.

Modi's Clean India campaign has not really spruced up any city; his minister says it will take three years to clean up the River Ganga, which Modi sees as a mother. So terrible is it that a hundred bodies surfaced recently at a river bend one cold, foggy morning a few weeks ago. 

Modi's popularity is such that his party has won several state elections in the last one year, including in Chhattisgarh, Madhya Pradesh, Rajasthan. It failed, however, to win a majority in the large state of Maharashtra where it formed a state government with the help of allies in December. The party also won elections in the tribe-dominated state of Jharkhand. Delhi, the capital of the country and an independent state, has been its bête noire. Delhi rejected the BJP one year ago, choosing to elect a novice party which did not form a government then. The city goes to the hustings again in February, and this time, a more confident BJP has inducted into its ranks, a charismatic former police official who last year was with the Aam Admi Party (AAP), projecting the lady as the future chief minister of the city.

Modi's foreign policy has been effective and mostly popular. Pakistan and China are two countries that keep provoking India along its two large borders. Even as India is more vigilant on its borders with China, Modi's trip to China was seen as an effort to reduce aggression in the border disputes. The Chinese have welcomed his openness to Chinese investment in infrastructure and they have committed to invest US $ 35 billion. The Line of Actual Control will now be actual, says India's new Home, Foreign and Defense ministers, with no more tolerance of provocative intrusions. India's defense budget – to be revealed in March - is expected to be huge.

On his visit to Japan, Modi managed to convince Japan to commit to US $55 billion investment in India. He invited the Japanese to invest in his dream project to build 100 smart cities, along with the High Speed Train network in India. His visit to Australia was hugely successful.

But most successful, perhaps, was his US visit last year.

Although Pakistan Prime Minister Nawaz Sharif did take part in Modi's coronation, the Modi government's relations with Pakistan are frosty. Foreign Secretary-level meetings have been cancelled. Cross-border terrorism is a major issue, especially after the 16 December terror attack on the Pakistani army school. Terror is too close to home, says India. A Pakistan court granting bail just a day after the school killings to militant commander Zaki-ur-Rahman of Lashkar-e-Taiba, accused of masterminding the 2008 Mumbai terrorist attacks which saw 166 people dead, did not go down well with India. Though Rahman's bail has been stayed by the top court in Pakistan, India has stepped up border security.

The PTI news agency reports that the US has asked Pakistan to ensure that "there is no cross-border terror incident during the trip (Obama visit) and hinted of consequences if any such attack is traced back to the country." The warning has been issued "keeping in mind the record of Pakistan-based terror groups that have regularly carried out terror strikes coinciding with visits of high-profile dignitaries to India from the US," the agency says.

"...we will do everything that is possible to ensure his (Obama's) stay here is comfortable, is something that he will cherish for a long, long time," said External affairs ministry spokesperson Syed Akbaruddin at a briefing in New Delhi this week.

Obama comes to India with the appointment of a new ambassador, the first envoy of Indian origin, Richard Verma. Verma, a national security expert, has served in the State Department and the US Air Force and been an adviser to members of Congress. The 46-year old envoy took charge just ahead of the Obama visit. The appointment has received high praise. It is interesting that as assistant secretary of state for legislative affairs under Hillary Clinton from 2009-11, Verma led the Obama administration's negotiations with Congress for new sanctions on Iran while working for passage of the New START nuclear arms treaty with Russia. He received the Distinguished Service Medal, the State Department's highest civilian honor. Now that President Obama has managed to convince his senators that getting Iran to the negotiating table is better than sanctions, and he has Europe's support in this, several possibilities open for the USA. The sanctions have greatly affected India's oil imports and it will be a huge plus for the Modi government if sanctions on Iran are eased.

India's liability clause, enacted after the Bhopal disaster, which makes corporations responsible for industrial accidents in their plants, has been an issue with US power companies wanting to sell nuclear power reactors. The Modi government is pro-nuclear energy and pro-nuclear weapons. An arms negotiator at the helm of US affairs in Delhi might be able to convince India to amend the law for the USA. For both the parties, the Obama India visit takeaway has to be the nuclear and arms business, and more US investment in India's infrastructure and education sector. The Obama visit is being watched with great concern by the entire region.

 

Papri Sri Raman

Papri Sri Raman is a journalist and writer from India, with special interest in the environment.

NYT

In India, Obama Aims to Improve Countries’ Ties

By PETER BAKER and ELLEN BARRYJAN. 25, 2015

Slide Show|6 Photos

President Obama in India

NEW DELHI — President Obama swept aside past friction with India on Sunday to report progress on climate change and civilian nuclear power cooperation as he sought to transform a fraught relationship marked by suspicion into an enduring partnership linking the world’s oldest and largest democracies.

Kicking off a three-day visit rich in symbolism and pageantry, Mr. Obama emerged from hours of discussions with his counterpart, Prime Minister Narendra Modi, with what he called “a breakthrough understanding” to finally overcome years of deadlock that have prevented American firms from building nuclear reactors here, a key goal of the trip.

The president and Mr. Modi also renewed a 10-year defense pact, agreed to joint military hardware production and resolved to work together to reduce the threat of greenhouse gas emissions on the world’s climate. But the climate agreement included mostly minor initiatives compared to the deal Mr. Obama made with China last November, and it was unclear whether American industrial firms would agree the nuclear pact offered sufficient protection from potential liability in the case of mishaps to justify the investment.

Mr. Obama during his ceremonial reception at India's presidential palace in New Delhi. Credit Ahmad Masood/Reuters

Still, the atmosphere of amity was palpable as Mr. Modi broke with protocol to greet Mr. Obama at the airport with a warm handshake and hug. During a later joint appearance before the media, Mr. Modi referred to the president as “Barack” and thanked him for his “deep personal commitment” to their developing friendship.

“It’s not surprising then that we had a friendship because hopefully we’re reflecting the values of our peoples,” Mr. Obama replied. “That affection can then be translated into specific actions.”

Mr. Obama’s visit, his second as president, is a major event in India. Despite lingering distrust in many parts of the government, largely over Washington’s history of support for rival Pakistan, the United States enjoys widespread popularity among the general population. For weeks, the Hindi news media has dissected details of Mr. Obama’s planned visit, running half-page cutaway graphics of his limousine and airplane, and broadcasting a detailed report about his BlackBerry. A Hindustan Times report implored the first lady to “Please Dress Desi,” featuring a series of Indian designers offering to provide her with couture saris.

Mr. Obama’s arrival was marred to some extent by his decision, announced just as he left Washington, to cut the visit short by several hours and skip a tour of the Taj Mahal in order to fly to Saudi Arabia to pay respects to the family of King Abdullah, who died on Friday. The cancellation of the visit to the Taj Mahal, India’s most iconic site, was seen as a disappointment here.

But Mr. Obama planned to pay homage to other cherished symbols of India’s status as the world’s largest democracy. Shortly after landing, he headed to Rajghat for a wreath-laying and tree-planting ceremony at the memorial to Mahatma Gandhi, the father of modern India. Mr. Obama’s tree was planted on the other side of a walkway from one planted by President Bill Clinton during his own visit in 2000.

On Sunday evening, Mr. Obama was to be the guest of honor at a state dinner hosted by Mr. Modi, who was returning the favor after a visit to the White House last September. On Monday, Mr. Obama will be the chief guest at the annual Republic Day parade marking the anniversary of the day India’s Constitution went into force, the first time an American president has been honored with that role.

The display of friendship stands in stark contrast to the state of the relationship just a year ago after the arrest and strip search of an Indian diplomat accused of exploiting a housekeeper in New York. Mr. Obama and Mr. Modi have made it a priority to move beyond that dispute, even though some advocacy groups fretted that meant Washington would turn away from serious human rights issues.

Neelam Deo, a longtime Indian diplomat who now heads Gateway House, a foreign policy research organization based in Mumbai, said that Mr. Modi would distinguish himself principally by projecting a simple message about the United States.

“It is a moment where the coyness of the previous government has been set aside,” she said. “That is not his style. He is pretty explicit. I would say he has gone all the way to project the message — and there is nothing ideological about this — that the U.S. is the most important country in the world for us. It’s what we look for.”

Foreign policy has been a central focus of Mr. Modi’s first months in office, although it was barely mentioned during his development-focused campaign last year. He has made it a priority to project a more forceful leadership role for India among its South Asian neighbors, challenging China’s growing partnerships with the leaders of Sri Lanka and the Maldives. Simultaneously, he is exploring deeper

economic ties with China, though a visit from the Chinese president, Xi Jinping, was marred by tension over the disputed border between the two countries.

Mr. Modi, who pays meticulous attention to the symbolic messages of high-level meetings, immediately made it clear on Sunday with his decision to greet Mr. Obama with an embrace that his relationship with the United States is a warm and trusting one. In the past, Mr. Modi has reserved such greetings for leaders who were trusted partners, like Japan’s prime minister, Shinzo Abe, and, more recently, Prime Minister Tony Abbott of Australia.

A breakthrough on the nuclear issue would provide both leaders a tangible achievement from the visit. Mr. Bush reached agreement with India in 2006 to end a decades-long moratorium on sales of nuclear fuel and reactor components while India in exchange would separate civilian and military nuclear programs and open civilian facilities to international inspections.

But the promise of a thriving new nuclear trade between the powers never materialized because of an Indian law that would hold American energy companies responsible for accidents. American companies sought more protection, while the Indian government argued that the American government should pressure the companies to invest anyway.

On climate change, Mr. Modi has already pledged that India will increase production of clean, solar-powered electricity to 100,000 megawatts by 2022, from 3,000 currently. The two leaders are working on an agreement under which the United States would help India cut its use of hydrofluorocarbons, or HFCs — a component in coolants in refrigerators and air-conditioners.

Absent a broader commitment to goals like those agreed to by China, Mr. Obama hopes to enlist Mr. Modi’s support for a United Nations climate change accord scheduled to be completed in Paris in December.

While India is the third-largest carbon polluter after China and the United States, it has traditionally argued that it should not have to limit its production of greenhouse gases because it is a developing country that historically has contributed little to the long-term problem and has hundreds of millions of people to lift out of poverty.

If Mr. Modi were to embrace the Paris process, the Obama administration and environmental groups have argued that it would be a significant shift that could build momentum for other countries to join the effort in a serious way. India is expected to issue a plan to reduce emission rates by June, and environmentalists hope that domestic backlash against urban pollution will pressure the government to be more ambitious, much as what happened in China.

NYT

India’s Governing Party Heads for Crushing Defeat in Delhi Elections

By GARDINER HARRISFEB. 10, 2015

Photo

Supporters of the Aam Aadmi Party, or Common Man Party, celebrated in New Delhi on Tuesday. Credit Tsering Topgyal/Associated Press

NEW DELHI — Less than a year after Narendra Modi won a historic victory to become India’s new prime minister, a smaller political earthquake struck the capital on Tuesday, as partial results indicated that Mr. Modi’s governing party had been crushed in local elections by a young political organization led by an anticorruption campaigner.

With early returns suggesting that the Aam Aadmi Party, or Common Man Party, would win as many as 67 of the 70 seats in the Delhi Assembly, Mr. Modi called the party’s leader, Arvind Kejriwal, on Tuesday morning to congratulate him.

Mr. Kejriwal, a former tax examiner, briefly served as Delhi’s chief minister a year ago, but he resigned after just 49 days — one of a series of apparent missteps he had made since coming to prominence as a crusader against graft, including a cantankerous split with his first political patron and, last year, a decision to create a national party that would compete across India for parliamentary seats, which largely failed.

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Arvind Kejriwal, the leader of the Aam Aadmi Party and a former tax examiner, celebrated on Tuesday. Early returns suggested that the party would win as many as 67 of the 70 seats in the Delhi Assembly. Credit Manish Swarup/Associated Press

But Mr. Kejriwal’s 70-point manifesto promising to improve the lives of Delhi’s vast underclass — through a crackdown on corruption, as well as by offering cheaper electricity, free water and more accessible schools — resonated strongly across the city in the voting held Saturday.

Analysts said Mr. Kejriwal’s victory suggested that India’s vast urban population was changing the way it chooses leaders. “Quality of life is now finding precedence over caste, religion or neighborhood,” Shekhar Gupta, a veteran journalist and political commentator, said Tuesday in televised remarks.

For Mr. Modi, the Delhi results represent the first resounding defeat since his Bharatiya Janata Party won an outright majority in the lower house of India’s Parliament in May, the largest such majority in 30 years. In that election, the party won all seven parliamentary seats in Delhi; as late as December, polls had indicated that the party would win the local elections by a wide margin.

The Delhi results also deepened the crisis engulfing the Indian National Congress party, which ruled Delhi for 15 years until 2013 but failed to win a single seat Tuesday, according to early returns, despite vigorous campaigning by Rahul Gandhi, the scion of the Nehru-Gandhi dynasty.

Yogendra Yadav, a spokesman for the Aam Aadmi Party, said Tuesday that its victory should be seen as a triumph of local issues, not as a rejection of Mr. Modi’s national leadership.

“This has to do with electricity, this has to do with water,” Mr. Yadav told a local television station. Naming some of Delhi’s worst slums, where a third of the city’s residents live without routine access to water, toilets or electricity, Mr. Yadav said that “these are places where people are waiting for someone to do something for them.”

Mr. Kejriwal’s vow to crack down on small-scale corruption has particular resonance among slum dwellers. The vast majority of Delhi’s cycle rickshaw drivers and street hawkers, for example, do not have permits and are routinely pressured by constables for small bribes.

“In a city where the livelihoods of the poor are criminalized on a daily basis, a party which vows to redress these brutal inequalities becomes a change agent,” a journalist, Sagarika Ghose, wrote in The Times of India recently.

Virender Kumar, 47, who drives a motorized rickshaw, said Tuesday that Mr. Kejriwal’s tenure leading Delhi a year ago had offered a brief respite from bribetaking police constables because a hotline had been created to report corruption.

“Again it started after he stepped down,” Mr. Kumar said, referring to routine extortion by constables and petty officials.

He said he hoped Mr. Kejriwal would stay in office longer this time. “The rich people voted for B.J.P., and nobody voted for Congress,” he said.

Commentators disagreed Tuesday about how badly Mr. Modi and his party would be hurt by the Delhi results. Mr. Modi won last year in part by touting his upbringing as the child of a man who sold tea outside of a train station, a modest background that contrasted sharply with that of Mr. Gandhi.

But recently, Mr. Modi has been seen wearing a suit with pinstripes made from the repeated printing of his own name, reported to have cost $17,000. Mr. Kejriwal, by contrast, is known as “the muffler man,” for his modest attire and his ungainly habit of wrapping his head in a cheap scarf to stay warm.

Mamata Banerjee, the chief minister of West Bengal and a fierce critic of Mr. Modi, wrote Tuesday on Twitter that the results were a “turning point.”

“This is a victory for the people and a big defeat for the arrogant and those who are doing political vendetta & spreading hate among people,” Ms. Banerjee wrote.

G.V.L. Narashimha Rao, a spokesman for Mr. Modi’s party, said the Delhi results should not be seen as a rejection of Mr. Modi but as an embrace of Mr. Kejriwal.

“This is a vote for Kejriwal and an opportunity for his people to set things right,” Mr. Rao said. Voters “feel they want to give him a chance, and they somehow have good memories of” his brief leadership of the city.

Randeep Surjewala, a Congress party spokesman, said his party’s inability to win a single seat in a chamber it dominated for 15 years should lead to some introspection.

“We need to see why we are losing our essential base to other parties,” including the Aam Aadmi Party, Mr. Surjewala said.

The Economist

Narendra Modi’s trip to China

Seeking the Nixon spirit

Two bold leaders share an interest in at least modestly better relationsMay 9th 2015 | DELHI | From the print edition

THE three-day trip that India’s prime minister, Narendra Modi, will make to China from May 14th to 16th is seen in some quarters as a chance to reset the relationship between Asia’s two giants. Those inclined to enthusiasm note that Mr Modi is easily the most interested in China of any recent Indian leader. He first crossed the border into China many years ago, to a holy site for Hindu pilgrims; he has since returned

several times to study China’s rapid economic development. When he was chief minister of Gujarat state, Mr Modi was treated with lavish cordiality in China. At the time, politicians and diplomats from most Western powers, America included, shunned him. Mr Modi has not forgotten the hospitality.  

He made a vow to visit China during his first year as prime minister and is fulfilling it, by a whisker. He reciprocates a visit by the Chinese president, Xi Jinping, who came to India in September. Unusually, Mr Xi stopped off in Gujarat before he made his way to Delhi. In turn, before he goes to Beijing Mr Modi will visit Shaanxi province, birthplace of Mr Xi’s father, a comrade of Mao Zedong’s.

Both leaders are the first in their respective countries to have been born after the second world war, with a willingness to try fresh approaches. Both like to project an image of manly strength, keen on bold strokes in policymaking and ready to do business. And at home both leaders dominate foreign affairs along with much else. And so some analysts are looking to see indications of a breakthrough between the two giants that warily eye each other across a 4,000-kilometre (2,500-mile) disputed border in the Himalayas, scene of a brief if nasty war in 1962.

In that context, the name of Richard Nixon is never far from the lips of Indian strategists. Like Nixon, Mr Modi is a right-winger, a nationalist with form—for instance, in promising to be tough on China (as well as on Pakistan, China’s ally in South Asia). He is, in other words, probably better placed than previous Indian leaders to find a compromise that would settle the border dispute and make it acceptable back home. In conversation Mr Modi repeatedly emphasises the scale of his election victory last year. In international affairs, he implies, it gives him unusual latitude.

On the Chinese side, some also discern a potential for better bilateral relations. China’s main preoccupation is maritime: over disputed claims in the South China Sea and rumbling disputes with Japan. China might prefer to keep India, a rising naval power, away from such confrontations. In January Mr Modi issued a striking joint statement with America’s president, Barack Obama, declaring an interest in ensuring freedom of navigation in the South China Sea, way to India’s east. A senior Indian official talks of India having a legitimate interest because a Chinese “noose” is tightening on its friends and trading partners around the South China Sea.

China’s maritime fixation underscores the appeal of lessening worries over its terrestrial borders—at least that is the argument that some make in Beijing for seeking an agreement on the disputed border. In recent months the Indian government has talked of doubling the number of Indian soldiers near the Chinese border, and of building railways and new airports in the state of Arunachal Pradesh (which some in China call South Tibet). China does not want to be distracted by military challenges in the mountains. It adds up to some hopeful thinking about a deal.

Our interactive map demonstrates how the territorial claims of India, Pakistan and China would change the shape of South Asia

Yet the reality is probably less encouraging. India’s senior political figures and diplomats give no indication of anything out of the ordinary under way in terms of preparing for substantive border talks or of

coming up with new mechanisms for dealing with the dispute. Mr Modi’s travels, which will also take in Mongolia and South Korea, will emphasise economic co-operation. More trade and some Chinese investment in Indian manufacturing are the expected outcomes.

What is more, the trip will also have to be about patching up relations after Mr Xi’s visit last year ended in tatters. While he was in India, Chinese soldiers crossed the disputed border, camping in remote mountain territory that Indian soldiers said was clearly theirs. In private Mr Modi was furious about being humiliated by his guest. But, intriguingly, Mr Xi may have felt humiliated too. Some military observers have been told that the commanding officer of those border guards was summarily sacked. It will be enough next week to avoid confrontation and mishaps. The Nixon moment, if there is to be one, will have to come later.

Asia Pacific

Modi Calls on China to Rethink Stances That Strain Ties to India

By CHRIS BUCKLEY and ELLEN BARRYMAY 15, 2015

Photo

Premier Li Keqiang of China, left, welcomed Prime Minister Narendra Modi of India at the Great Hall of the People in Beijing on Friday. Credit Rolex Dela Pena/European Pressphoto Agency

HONG KONG — India’s prime minister, Narendra Modi, told China’s leaders on Friday that it was up to them to rethink policies that he said had hindered cooperation between the two Asian giants.

Mr. Modi made the comments to reporters in Beijing after meeting with Premier Li Keqiang and unveiling 24 agreements that both men said would help improve relations. But Mr. Modi added a proviso: that the Chinese government should consider India’s grievances.

“We covered all issues, including those that trouble smooth development of our relations,” Mr. Modi said of his talks with Mr. Li and, on Thursday, with China’s pre-eminent leader, President Xi Jinping.

The sources of contention between the two countries have included long-running border disputes, a heavy trade imbalance in China’s favor and India’s wariness toward China’s partnership with Pakistan, India’s rival.

“I stressed the need for China to reconsider its approach on some of the issues that hold us back from realizing full potential of our partnership,” Mr. Modi said in a room at the Great Hall of the People, the cavernous home of China’s national legislature, in remarks broadcast live by Indian television stations. He said, “I suggested that China should take a strategic and long-term view of our relations.”

He added, “I found the Chinese leadership responsive.”

Mr. Modi’s caveat departed from the mild, oblique language that most Asian leaders stick to in public after meeting with leaders in Beijing, and it offered a glimpse of the difficult balance sought by Mr. Modi.

He has courted Chinese business and investment to shore up India’s economy, and stressed that he wants to deepen ties. Indian officials said there had been progress on several nagging issues, including confidence-building protocols at the disputed border between the two countries, and a high-level task force aimed at expanding trade.

But Mr. Modi has also promoted himself as a vigorous defender of Indian security interests and international standing.

“For him to say we hope the Chinese will reconsider their approach — it’s very politely put, and he added that he saw sensitivity to India’s concerns,” said Siddharth Varadarajan, editor of The Wire, an online Indian news site. “But that’s quite a strong way to put it.”

For now, both governments appear committed to containing their disagreements and building stronger economic ties. China’s ambassador to New Delhi, Le Yucheng, had said that the deals signed during Mr. Modi’s visit to China could be worth $10 billion. Mr. Li, the Chinese premier, did not wade deeply into any controversies in his comments to reporters, and he praised Mr. Modi’s efforts to reinvigorate the Indian economy and to improve relations with China.

“For the true arrival of the Asian century, it must be seen whether China and India, these two most populous countries, will be able to overcome the difficulties facing us and steadily achieve the goal of modernization so people can live well,” Mr. Li said as Mr. Modi listened. “We both agree that political confidence between our two countries should be strengthened.”

Mr. Modi also stressed that India wanted closer ties with China, including more investment from China, greater access to its markets and a shared commitment to ensure that their disagreements remain in check. “We are committed to set a new direction between the two largest Asian countries,” he said. “This is one of our most important strategic partnerships.”

India and China both remain sensitive to any perceived challenges to territorial claims and affronts to national pride. Before Mr. Modi’s visit, Indian news outlets seized on a commentary in a popular Chinese tabloid, Global Times, that accused Mr. Modi of “playing little tricks over border disputes and security issues.” On Thursday, Indian media showed an image of a map used in a Chinese news program that showed India without its claimed territories of Jammu and Kashmir and of Arunachal Pradesh.

Despite the warm official welcome for Mr. Modi, many Chinese also remain wary and disdainful of India.

Mr. Modi “has deliberately looked for problems so that during negotiations with Chinese leaders he has more chips to bargain with,” Hu Zhiyong, the author of the Global Times commentary, said in a phone interview from Boston, where he is a visiting scholar. “We can’t have any hopes or expectations that Modi will make even the slightest concessions in negotiations with Chinese leaders on political and security matters.”

India has remained reticent on one of Mr. Xi’s central initiatives, an ambitious network of roads, railways and ports designed to link China to Asia and Europe, known as “One Belt, One Road.” Briefing reporters in Beijing on Friday, India’s foreign secretary, Subrahmanyam Jaishankar, called the plan “a Chinese initiative,” and said Beijing had never approached the Indian leadership about participating in it.

“We are open to discussing this with the Chinese whenever they want to,” he said.

Mr. Jaishankar indicated that the two governments had made some progress on the long-running border dispute between the two countries, saying they had agreed to increase the number of “border personnel meeting points” — currently there are four of them — and to hold more frequent meetings there. He also said the two sides had agreed to introduce a hotline between the military commands of the two countries.

During an address to students at Tsinghua University on Friday afternoon, Mr. Modi announced that a simplified online visa protocol would be expanded to include Chinese tourists, prompting a wave of applause. India has been gradually extending liberalized visa procedures to applicants from a long list of countries, but it was uncertain whether China would be included, because of lingering wariness within India’s security agencies.

The two dozen agreements signed as Mr. Modi and Mr. Li looked on mostly involved strengthening government cooperation, including in railways, mining and tourism. But Mr. Jaishankar said commercial agreements would be unveiled in Shanghai on Saturday, when Mr. Modi will attend a business forum there. “We can see more visible enthusiasm among Chinese businesses to invest in India,” Mr. Jaishankar said.

Mr. Modi also thanked the Chinese government for deciding to open a route through Chinese territory for Hindu pilgrims who have long sought an easier passage to Mount Kailash, where the Hindu god Shiva is believed to reside. The new route can be traveled by vehicle and will open in the summer, replacing the existing, longer routes through Nepal and the Indian region of Uttarakhand.

Asia Pacific

Narendra Modi and Xi Jinping Aim to Shelve Rifts Amid Economic Courtship

By ELLEN BARRY and CHRIS BUCKLEYMAY 13, 2015

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Prime Minister Narendra Modi visits Xi’an, a city in northwest China, where he met with President Xi Jinping. Credit China Daily/Reuters

NEW DELHI — The days before Narendra Modi left for China, his first visit as India’s prime minister, brought pinprick reminders of the geopolitical rifts dividing the two countries, even while they court each other for an economic charge.

A Chinese tabloid ran a commentary scorning Mr. Modi for visiting Arunachal Pradesh, a border state to which China also lays claim, prompting a news media uproar in India. In New Delhi, a top official noted that the government had lodged two formal complaints about China’s plan to build a highway through Pakistan-administered Kashmir, a border area also claimed by India.

The verbal sniping has brought a reminder of the thicket of territorial and historical tensions dividing Mr. Modi and his Chinese counterpart, President Xi Jinping. Indian and Chinese officials have promoted Mr. Modi’s three-day visit as essentially a business trip filled out with displays of good will and ancient cultural kinship. On Thursday, Mr. Modi arrived in Xi’an, a city in northwest China, welcomed by a traditional lion dance.

But the visit presents Mr. Modi with a particularly nettlesome test of his priorities.

He has promised economic reinvigoration at home and firmer assertion of India’s security interests. But those goals can be especially difficult to juggle while dealing with the country’s biggest and most powerful neighbor, which under Mr. Xi has also taken a tougher line on territorial disputes. Eight months ago, Mr. Modi’s first meeting as prime minister with Mr. Xi was overshadowed by a border confrontation.

“There are two Modis on China,” Tanvi Madan, a fellow at the Brookings Institution, and director of its India Project, said in a telephone interview. “There is the business-minded leader who wants to do business with China, almost like the C.E.O. in him. And there is Modi, the chief security officer.”

In China, Mr. Modi will “downplay the strains about things like the border incidents,” Ms. Madan said. “But I think he will also find subtle ways of also making clear that India is not going to be a pushover.”

Increased trade and investment between the two Asian giants could profit both. China is grappling with a slowdown in growth and would like greater access to Indian markets to make up for faltering demand at

home and in other export markets. India could use Chinese investment to build power plants, railways and other infrastructure, and to breathe life into its manufacturing sector.

“Prime Minister Modi really has put emphasis on the lack of infrastructure internally,” Jabin T. Jacob, a fellow at the Institute of Chinese Studies in Delhi, said in an interview. Mr. Modi’s “government has shown a far more open attitude,” he said, “simply because they are influenced by business lobbies and simple facts on the ground: that it is Chinese capacity that can deliver.”

Yet the courtship comes as China has been extending its political and military reach in South Asia, and when Mr. Modi’s administration is also being wooed by other nations, notably Japan and the United States, as a counterbalance to China. Prominent supporters of Mr. Modi say he can pursue both sets of priorities — the economic and the strategic — with equal vigor.

Mr. Modi “needs everyone on his side,” said Ashok Malik, a senior fellow at the Observer Research Foundation in Delhi. “He needs a window of relative strategic calm in his backyard to build the Indian economy. He cannot have the Chinese coming down his throat. For that, he needs to keep the Chinese happy. And he needs to keep the Chinese a little worried.”

India, whose economy two years ago appeared fragile and tumultuous to outside investors, is increasingly described as a bright spot; the International Monetary Fund predicted that its growth rate would outstrip China’s this year and that it would widen the gap in 2016. But India’s economy is one-fifth the size of China’s, with a weak manufacturing sector and one million new job seekers entering the market every month.

For Mr. Xi, steadier ties with India are a building block in his broader strategy of defusing territorial and geopolitical tensions by dispensing investment and trade opportunities, extending Chinese influence and diluting Washington’s sway.

“Since Prime Minister Modi took office, the general atmosphere in Sino-Indian relations has improved,” Ye Hailin, an expert on South Asia at the Chinese Academy of Social Sciences in Beijing, said in a telephone interview. “The basic policies of each side haven’t changed, but there’s a stronger emphasis on cooperation.”

Instead of receiving Mr. Modi in Beijing, the normal practice for leaders’ visits to China, Mr. Xi greeted Mr. Modi in Xian, the ancient city that is now the capital of Shaanxi Province in northwest China. Mr. Xi counts Shaanxi as his home province, because his father, a well-known revolutionary, came from there. His welcome of Mr. Modi there mirrors the gesture that Mr. Modi made last September, when he hosted Mr. Xi at a dinner on Mr. Modi’s birthday in his home state of Gujarat.

On Friday, Mr. Modi will meet China’s prime minister, Li Keqiang, in Beijing, and the two governments are scheduled to unveil business and investment agreements that China’s ambassador to Delhi, Le Yucheng, has said could be worth more than $10 billion. Chinese officials have indicated that they hope the agreements will give Chinese companies a role in expanding and upgrading India’s railway network, as well as in other infrastructure projects like power plants and industrial parks.

Yet economic ties have failed to live up to the effusive promises of past summits. In 2010, the two governments vowed that by 2015 their trade would be worth $100 billion. Instead, last year their trade in goods was worth $70.6 billion, and India had a bilateral deficit of $37.8 billion, according to Chinese customs data. Chinese companies, like other outside investors, complain that their ventures in India have been stifled by bureaucracy and security barriers. Indian companies have said that they have been frustrated from expanding in China.

“For China and India, two countries with a combined population of 2.5 billion, our cooperation falls far short of reaching its due scale or level,” Mr. Li, the Chinese prime minister, told the newsmagazine India Today ahead of Mr. Modi’s visit.

Mr. Modi will be looking for China to open its markets in fields “where India has a very successful global footprint, but that footprint has not extended to China,” such as pharmaceuticals, information technology and some agricultural products, said the Indian foreign secretary, S. Jaishankar. Chinese engineering firms could get initial agreements for high-speed rail, one of the showpieces of Mr. Modi’s economic plan, and a project also

The Indian chief ministers who will accompany Mr. Modi on the trip are from coastal states, suggesting that commercial ports are another possible area of cooperation with China. But here, as in the power sector, experts said, Mr. Modi may encounter resistance from hawks in his own camp.

“You will have some of Modi’s supporters saying, ‘You’re opening the door to China in some sensitive sectors,’” said Ms. Madan, the scholar at the Brookings Institution. “He will try to make the case that this is the best way in the long term, that you cannot stop China’s rise, and they’re not going to try to.”

Since meeting with Mr. Xi last year, Mr. Modi has also built up leverage by strengthening his relationships with the United States, Japan and Australia.

These overtures evoked the joint military exercises that the four countries initiated eight years ago, excluding China. The exercises set off alarm bells in Beijing, ever mindful that three quarters of China’s imported oil passes through the Indian Ocean. Even before the four countries convened for their first joint meeting, Beijing had filed diplomatic protests to Washington, New Delhi, Canberra and Tokyo. The idea was quietly shelved.

There have been hints in the Modi government of reviving the plan, but that has yet to harden into a policy. In comments to The Times of India this week, unnamed military officials said Mr. Modi had decided that joint naval combat exercises with the United States planned for this fall “did not as yet include Japan.” A spokesman for India’s Navy said on Wednesday that he could not comment on the report, but that a final decision on Japan’s participation would be made in July.

Mr. Modi has also withheld endorsement of one of Mr. Xi’s key foreign policy projects: a network of trade and transport routes intended to deepen China’s ties with Asia and Europe, sometimes called a “new silk road.” Mr. Jacob, the researcher in Delhi, noted that the effusive flattery China showered on Mr. Modi when he first came to power seemed to have decreased.

The irritants could become far more disruptive if Mr. Modi and Mr. Xi fail to make progress in economic cooperation, said Jonathan Holslag, head of research at the Brussels Institute of Contemporary China Studies.

“This is a trial period, a period in which the Indians are trying to find out how far they can go in making a more equitable economic partnership,” he said. “Nothing is more dangerous in international politics than driving expectations up and then failing to meet them.”

China-India Brief # 51

Centre on Asia and GlobalisationLee Kuan Yew School of Public Policy

Guest Column

Prime Minister Modi’s Trip to China: Not Quite Business as Usual

by Tanvi Madan

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Just before the anniversary of his first year in office, Indian Prime Minister Modi travelled to Xi’an, Beijing and Shanghai for a 3-day visit. This wasn’t his first trip to China – he had been a number of times as chief minister of the state of Gujarat – but it was his first as prime minister. This was also not his first meeting with the senior Chinese leadership; by the time President Xi Jinping welcomed him in Xi’an, he had met with the Chinese president a number of times over the last year, including during Xi’s visit to India in September 2014 and at various summits. Chinese and Indian leaders do indeed meet on a more frequent basis than before. In the last 2 years, for example, there have been 4 leadership-level summits. In some ways, this fourth one followed the usual script; but in other ways, it was not business as usual.

There was a greater level of candor in the remarks by Indian policymakers, especially Modi, and in the joint statement. Senior Indian policymakers often downplay bilateral differences during visits and focus more on the cooperative aspects. But in public remarks, Modi frankly outlined issues that “trouble smooth development of our relations.” He urged China to think strategically and “reconsider its approach,” including toward the border, as well as on visas, trans-border rivers, economic ties, and the region (an implicit reference to China’s relations with Pakistan, among others). The broader message was that these issues “that lead to hesitation and doubts, even distrust” could not be set aside and had to be dealt with if the two countries wanted to “realise the extraordinary potential of our partnership.” Premier Li Keqiang, on his part, said that the “existence of differences” could not be denied, but common interests were “far bigger.”

There were not any announced breakthroughs on the border dispute between the two countries—and indeed it was unlikely that any was possible at this stage. The joint statement did lay out the intention to enhance exchanges between the militaries for better communication on the border and to explore whether/how to increase trade at the border. But Modi also stated that the two countries “must try to settle the boundary question quickly” and do so “in a manner that transforms our relationship and [will] not cause new disruptions.” In the meantime, while he stated that the mechanisms managing the border were working fine, he proposed clarifying the Line of Actual Control, which he saw as a crucial.

Another focus of the trip was the economic relationship. Chinese and Indian companies announced agreements worth $22 billion, involving investment and financing from China, Indian companies increasing their presence in China, and facilitation of greater corporate ties. However, there was also frank acknowledgment of problems. India has a large trade deficit with China—one that contributes 27 percent of India’s total trade deficit. The joint statement acknowledged that the level of the trade imbalance was unsustainable. Modi also stated that, in the long-term, the partnership was not sustainable if Indian industry didn’t get better access to the Chinese market. The Indian foreign secretary noted that there hadn’t been enough “movement” on these differences, which was why China and India were establishing a “high-powered task force” to address them.

There was a greater-than-usual emphasis on building trust—not just for its own sake, but in order to facilitate the broader relationship and, potentially, to tackle some of the tougher differences. This involved a focus on at least 3 areas: first, improving government-to-government communication and coordination, including through enhancement and institutionalization of engagement at the leaders level, as well as between the foreign policy and planning bureaucracies, and the defence establishments. Second, increasing interaction between states and cities, including through the establishment of the State and Provincial Leaders’ Forum, which was convened for the first time during the visit. Third, facilitating people-to-people ties. There is limited connectivity and a lack of trust, knowledge and even interest between the publics. Modi asserted that China and India “must build more bridges of familiarity and comfort between our people.” To increase travel to India (and bring in tourism revenue), he announced that India’s e-visa facility will be made available to Chinese nationals. The two countries also agreed to establish consulates in Chennai and Chengdu. For greater learning about each other, there were also decisions to set up an annual bilateral Think Tank Forum, to institutionalise the High-Level Medium Forum, and establish a Centre for Gandhian and Indian Studies at Fudan University.

Regional and global issues were another area of focus. As the joint statement noted, the two sides have shared interests in West Asia and Afghanistan, as well as on counterterrorism and climate change. There was the first-time acknowledgement of India’s aspirations for membership of the Nuclear Suppliers’ Group and mention of cooperation in SAARC, as well as continuing cooperation toward an Asian Infrastructure Investment Bank. However, there was neither a more explicit Chinese endorsement of India’s desire for a permanent seat on the UN Security Council nor an Indian endorsement of China’s One Belt, One Road initiatives.Noting that China and India were increasing engagement in their “shared neighbourhood” and developing relationships with other countries—and that these could be “sources of concern—Modi emphasised the importance of “deeper strategic communication.” For those in China concerned about India’s relations with the U.S., he had a simple message: “Neither of us can be contained nor become part of anyone’s plans.” Through his actions, including high-level engagement with a number of countries in China’s periphery (Australia, Japan, Myanmar, Mongolia, South Korea, the U.S., Vietnam), however, Modi has also made clear that his government will not let Beijing serve as a veto on the development of these relationships.

As with most such trips, the “results” of this visit aren’t always evident during the visit, but manifest themselves over time. The Modi that went to China had the wind at his back, with India considered a “bright spot” on the global economic landscape and a year of successful engagement with countries in the Asia-Pacific. While making clear that he would not hesitate to talk about differences, he held out the promise of greater engagement and opportunity for China. He portrayed a confident, “re-emerging” India that Beijing should seek to do business with—on equal terms, with a “constructive model of relationship.” Whether Beijing will buy this narrative or not, will depend, among other things, on whether Modi can deliver on the strong, successful India that he has been pitching abroad and promising at home.

 

Tanvi Madan is a fellow in the Foreign Policy program at the Brookings Institution, and director of The India Project.

The Opinion Pages | Op-Ed Contributor

India’s Great Educational Divide

By AATISH TASEER

OCT. 9, 2015

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A cutout of Narendra Modi adorning a bus at his party’s headquarters in Mumbai. Credit Divyakant Solanki/European Pressphoto Agency

It is hard not to try to see in the politics of another country a version of one’s own. To match Democrat in America with Labour in England, or, say, Congress in India; to find an easy affinity between Republican and Tory, and now, perhaps, the Bharatiya Janata Party, or B.J.P., under Prime Minister Narendra Modi. Pleasing as these symmetries are, and flat as the world may seem, they are false equivalencies. In fact, every society has a unique history of power, of which its politics are an expression.

In India, the Congress Party was liberal, left-leaning and secular; but it was also the party of the colonized elite. That meant that practically everyone who was rich, and educated, and grew up speaking English, was also invariably a supporter of Congress.

I say this because, if for a moment we suspend our own political affiliations, and look at the forces of left and right simply in terms of the one as representing class movement and change, and the other as defending the existing order, it would have to be said that the Congress Party behaved much more like an old-fashioned conservative party — clubbish and aloof — than anything we can expect from the left. This was the party ousted from power last year by the election of Mr. Modi; and yes, if social revolutions at the ballot boxes of big democracies excite you, it was thrilling.

I spent the duration of the election shuttling between its crucible, in Eastern Uttar Pradesh and Bihar, and the drawing rooms of Delhi, where the political elite of the city, a cozy cabal of like-minded journalists and politicians, quaked at the rise of Mr. Modi. I had grown up in this world, and it was one in which class mattered much more than political difference. Nor was its cynicism confined to any one party. I remember being present when the son of a B.J.P. chief minister, a woman now in trouble over corruption, was asked why he wanted to enter politics. “Money,” he said easily, and no one minded. That was the kind of world it was.

Mr. Modi posed a mortal threat to the safety and entitlement of this world, and it was part of his appeal. Nor was there anything sinister in the mandate. Given his background in Hindu nationalism, he was justly an object of suspicion. But when journalists from Delhi would prod voters into giving sectarian reasons for electing him, a majority would stoutly reply, “Why are you asking us about temples, when we’re telling you that we’re electing him because we think he’ll bring development?” That was the mandate. It was very moving, and like many, I held my breath.

I see now that I was focused too much on the world the election would supplant, and too little on the one it would bring into being. Because if the Modi election has made anything clear, it is that, one, a social revolution of a kind has already occurred in India; and two, the people, now in charge, might not possess the intellectual power needed to run the country.

The cabinet, save for the rare exception, is made up of too many crude, bigoted provincials, united far more by a lack of education than anything so grand as ideology. At the time of writing — and here the one will have to speak for the many — Mr. Modi’s minister of culture had just said of a former Muslim president: “Despite being a Muslim, he was a great nationalist and humanist.”

Some 10 days later, there was the hideous incident in which a Muslim man was lynched by a Hindu mob in a village outside Delhi, on the suspicion of slaughtering a cow and eating beef. It was a defining moment, the culmination of 16 months of cultural chauvinism and hysteria under Mr. Modi, the scarcely veiled target of which are India’s roughly 170 million Muslims. This ugliness is eclipsing Mr. Modi’s development agenda, and just this week, there was yet another incident in which a Kashmiri politician was attacked in Srinagar for hosting “a beef party.”

Poisonous as these attitudes are, they have much more to do with class than politics. They are so obviously part of the vulgarity that accompanies violent social change. If the great drama of our grandparents’ generation was independence, and our parents’ that post-colonial period, ours represents the twilight of the (admittedly flawed) English-speaking classes, and an unraveling of the social and moral order they held in place. A new country is seething with life, but not all vitality is pretty, and there now exists a glaring cultural and intellectual gap between India’s old, entrenched elite and the emerging electorate.

In other places, education would have helped close the gap; it would have helped the country make a whole of the social change it was witnessing. No society is so equitable that men as economically far apart as Bill Clinton and George W. Bush — or as Ed Miliband and David Cameron, for that matter — would have attended the same schools. But, in England and America, there is Oxford and Yale to level the field, to give both men the means to speak to each other.

This is not true of India. In India, one class has had access to the best private schools and foreign universities, where all the instruction is in English; the other has had to make do with the state schools and universities Indian socialism bequeathed them. The two classes almost never meet; they don’t even speak the same language. It has left India divided between an isolated superelite (and if you’re an Indian reading this, you’re probably part of it!) and an emerging middle class that may well lack the intellectual tools needed to channel its vitality.

The prime minister himself — and his background makes Mr. Clinton’s poor Arkansas childhood seem like Greenwich — is a case in point. He’s no fool; his instincts are superb; but his ignorance is startling.

Speaking to the journalist Fareed Zakaria last year, before his United States visit, Mr. Modi chose to answer a question, through a translator, on Russia’s annexation of Crimea this way: “There’s a saying in India that the person who should throw a stone first is the person who has not committed any sins.”

There is of course no such saying in India. The prime minister was unknowingly quoting the Bible — John 8:7 — to international audiences, and in the bargain giving President Vladimir V. Putin of Russia a clean chit. It was hard to watch, hard not to ask the inevitable question: What else did a man who knew so little not know? And were his limitations not responsible for the most serious of the charges his government now stood accused of: the tinkering reforms, the ham-handed responses to dissent, the inability to control the fringe, the interference with education and, perhaps most damningly, of overlaying a still unchanged Indian reality with a lot of well-intentioned but empty talk?

In another society, with the benefit of a real education, Mr. Modi might have been something more than he was. Then it would be possible to imagine a place with real political differences, and not one in which left and right were divided along the blade of a knife by differences in class, language and education. But just as that other society does not yet exist, neither does that other Modi. Indians will have to make do with the Modi they have; and, as things stand, perhaps the cynics are right: Perhaps this great hope of Indian democracy, with his limited reading and education, is not equal to the enormous task before him.

Aatish Taseer is the author, most recently, of the novel “The Way Things Were,” and a contributing opinion writer.

NYT

Narendra Modi Struggles to Fulfill His Plan to Rejuvenate India

By GEETA ANANDFEB. 29, 2016

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Prime Minister Narendra Modi of India in New Delhi in January. His promise to create jobs for the one million people who enter India’s work force each month has become subsumed in political turmoil. Credit Bernat Armangue/Associated Press

MUMBAI, India — A flash fire sent the star-studded audience at Prime Minister Narendra Modi’s “Make in India” convention fleeing into Mumbai’s streets last month. But that was minor compared to the political

firestorm caused by his government’s arrest that same weekend of a student leader accused of participating in a university rally in support of a man put to death for a terrorist attack in India years ago.

The arrest, and the government’s ensuing campaign against people deemed unpatriotic, dominated the headlines, once again distracting attention from the promise of economic rejuvenation that lay at the core of the electrifying campaign that won Mr. Modi overwhelming support in elections nearly two years ago.

That has largely been the story of Mr. Modi’s administration. His promise to shake things up and create jobs for the one million people who enter India’s work force each month has become subsumed in political turmoil, often stirred up by radicals in his party pushing a Hindu fundamentalist agenda.

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Farmers washing crops on Monday in Kanachak, India. Mr. Modi’s spending plan focuses on rural India, which has suffered from two years of drought. Credit Channi Anand/Associated Press

And so, as his administration on Monday presented a $287 billion spending plan for the coming year, its third, it did so amid growing disappointment inside and outside India with Mr. Modi and with Asia’s third-largest economy.

“He came to power with high expectations that have not been met,” said Harsh V. Pant, who teaches international relations at King’s College London.

China’s weakness and a sluggish global economy have given India a rare opportunity to draw foreign investment, but, “When you don’t use it, you lose it,” Mr. Pant said in an interview.

He and other experts say India missed the boat because Mr. Modi’s third budget, like his first two, did not call for major structural reforms. They blame the prime minister’s reluctance to wage those battles on political struggles at home as well as on his party’s losses in local elections last year.

“Unless he reins in the Tea Party elements of his party, he’s not going to be able to take India where it has the potential to go,” said Surjit Bhalla, a New Delhi-based columnist and macroeconomic adviser on India to the Observatory Group, a consultancy in New York.

India’s economy is performing well, with 7.6 percent growth and the lowest inflation in decades, but even by the government’s own admission, growth is below the 8 to 10 percent needed to provide jobs to India’s rapidly growing population of young people.

India faces huge hurdles to growth, including widespread corruption, a suffocating bureaucracy, enormous social spending, a stifling business environment and woeful infrastructure. But Mr. Modi’s spending plan, presented by Finance Minister Arun Jaitley in a 90-minute speech in Parliament, focused mainly on rural India, which has been suffering from two years of drought. The plan called for a raft of new policies, including crop insurance and credit programs for farmers, even as Mr. Modi put an extra $5.6 billion into a program started under the previous government guaranteeing 100 days of work to every rural household.

The budget stuck with the government’s plan to lower the fiscal deficit to 3.5 percent of India’s gross domestic product in the next year, as urged by Raghuram Rajan, the widely respected governor of the Reserve Bank of India, the central bank.

The austerity measures, combined with increased social spending, were accomplished by allocating far less money than needed to recapitalize government banks, which are struggling with bad loans and are less able to lend to India’s cash-starved corporate sector. Infrastructure spending was higher in the proposed budget but fell far short of the enormous infusion needed to spur growth, experts said.

Mr. Modi came to power in May 2014 on the promise of bringing more growth and jobs, with his government pledging to make the economic changes needed to lure private investment.

He did try to change the investment climate, raising foreign investment caps for military contractors and insurance companies to 49 percent, from 26 percent. But the refusal to allow outsiders to gain majority stakes remains a disincentive for foreign investors.

Mr. Modi ran into political trouble when he tried to ease India’s strict land-use laws to make it easier for the government and private companies to build industrial plants and infrastructure. Opposition parties used a Hindi phrase to cast him as running a “suit and boot” government, working only in the interests of the rich, and Mr. Modi stopped pushing the plan.

He also proposed a constitutional amendment aimed at creating a more business-friendly environment by putting in a simplified nationwide tax system to replace a patchwork of state levies, but that stalled in Parliament last year.

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Workers carried bags filled with copies of the 2016-17 federal budget, which were to be given to lawmakers in Parliament in New Delhi on Monday. Credit Manish Swarup/Associated Press

And Mr. Modi’s Bharatiya Janata Party suffered a crushing blow in a November election in Bihar, one of India’s largest states. His party had already lost a local election in New Delhi last year to a new anticorruption party.

Adding to Mr. Modi’s woes, he has found himself on the defensive as the right wing of his party and offshoots have adopted an aggressive agenda that has sometimes spilled over into violence.

An offshoot group began a “ghar wapsi,” or “homecoming,” campaign, holding ceremonies to convert Muslims and Christians to Hinduism. Members of Mr. Modi’s party pushed for bans on eating beef, which many Hindus do not eat because they believe cows are sacred. Late last year a Hindu mob killed a Muslim man in a village near the capital, saying — mistakenly, as it turned out — that he had killed a cow. Some members of a local group that initiated the attack were affiliated with the youth wing of Mr. Modi’s party.

There was also a series of attacks on Christian schools and churches.

So outraged were some of India’s top writers that, starting in September, they protested what they called an atmosphere of intolerance by returning awards the government had given them over the years.

Mr. Modi has made some conciliatory steps, including giving a speech at a Christian church in Delhi early last year, saying he would not “accept violence against any religion, on any pretext,” but his efforts fell short in the estimation of many.

“The people who supported the B.J.P. were voting for Mr. Modi, overlooking the radical right wing of his party, because he promised to focus on jobs and growth,” Mr. Bhalla said, referring to the Bharatiya Janata Party. “It’s a mystery as to why he hasn’t acted more strongly to rein in the Neanderthals. He has to take action.”

The latest political frenzy surrounds the government’s arrest of students at Jawaharlal Nehru University in New Delhi on Feb. 12. The students are said to have participated in a rally in support of Afzal Guru, a Kashmiri convicted and hanged for his role in a deadly attack on the Indian Parliament in 2001.

Despite widespread criticism, the Modi government has gone on the offensive, with the education minister denouncing the students in a passionate speech in Parliament last week. Business was adjourned in the ensuing mayhem.

Tarun Das, a former director general of the Confederation of Indian Industry who works informally on Indian relations with the United States, said Mr. Modi had worked behind the scenes to stop the right-wingers in his party, and that the prime minister would do so again.

“He will take action, just give him some time,” Mr. Das said.

“This is India, there will always be a new eruption,” he added. “But believe me, this prime minister is determined not to lose sight of his economic agenda, and calm will return.”

Nonetheless, Mr. Modi’s popularity has diminished as observers question his desire or ability to implement the ambitious agenda of economic changes.

“The economic and the political cannot be separated,” Mr. Bhalla said. “The prime minister needs public opinion on his side to get bills through Parliament. How can he have public opinion on his side if he’s arresting students?”

“It will make economic progress impossible,” he added.