When Modi ascended to power there were doubts about his diplomatic ability to gauge our neighbors who share boundaries with us and with other countries whose investment can tremendously help India. In the past few months his visit to Bhutan, Nepal, and Japan clearly demonstrated his diplomatic and business acumen of dealing with various East Asian countries. Modi's Japan tour is extraordinarily historic because no Indian Prime Minister has been able to extract such concrete investments in one single visit.
Back in 1993 when former PM Narasimha Rao coined "Look East" policy term it was for Indian diplomacy to look east of India to countries such as China, Japan, ASEAN - (includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam). Subsequent governments irrespective of parties contributed to this policy. At the beginning of 2000, former PM Vajpayee dedicated a lot of his diplomatic strength to make America a long standing ally of India in addition to engaging East Asian countries. His achievement was to change the definition of Indo-US ties forever. However, political, diplomatic and security compulsions led to this direction. The current PM Mr. Modi is leading this policy again of Look East but purely for economic gains. This is the first time an Indian PM is trying so hard to get China and Japan together to invest in India in very specific sectors.
Even though his tours of Nepal and Bhutan were significant for India an enormous excitement was in store for his Japan tour. The tour resulted in Japan investing close to 35 billion dollars in very specific sectors like High Speed Railways to give financial, operational and technical support. Unlike the World Bank loan which can be siphoned off easily without achieving the objective for which the loan was taken Japan will not give away hard cash. It is going to invest over 5 years and will monitor how India performs on speedy clearances and expedition of processes to ease business in India. Japan will participate in helping "Clean Ganga", "Develop Smart cities" and "Metro projects in Ahmedabad", "set up Industrial parks in the two countries", "make Varanasi like Kyoto"
(courtesy)
The key achievement was to sign up agreements specific to these projects to be implemented in a time bound manner. I hope that the agreement translates into a reality everyone would love to see.
Apart from the photo ops and speeches made by Modi it was clear that he needed to act on this investment in a transparent manner. He has decided to set up a special team to look into the way these funds are utilized and will have a member from Japan as well. This is good as we hope that the investment is sincerely utilized to realize the election promise and the dream of India getting the bullet train. The time of completion may be 10 years but it is important to get it started.
Besides Japan also decided to sell US-2 amphibian aircraft something India needs since it carries the strength of 21 firefighting helicopters. US2 will significantly enhance Indian Navy's capabilities. For more information on the abilities read here. It is no mean achievement that Japan lifted sanctions on India with respect to sell and transfer military equipment. After World War II this is the first time Japan has done so with India. One of the most important reasons why Modi was able to extract this from Japan is because Japanese PM Abe and Modi share a personal rapport and friendship of many years.
If Japan's tour was picture perfect, Chinese President Xi's visit to India was that of a big gamble. In my previous articles I had already articulated the reasons for India's defeat of 1961 war, the cause and solution of the disputes in the Ladakh and Arunachal region. Modi knew that just like Japan, Chinese investment in India and their expertise will be of great significance. He played this gamble in a near perfect manner until the intrusion in Ladakh region became the stumbling block.
Let's understand the role of China in the Asia Pacific Region in a larger context. There are 2 hard facts to consider:
1) The control of South China Sea for decades has been a bone of contention amongst several countries like Indonesia, Vietnam, Singapore, Malacca Straits, Cambodia, Thailand and many more.
1) The control of South China Sea for decades has been a bone of contention amongst several countries like Indonesia, Vietnam, Singapore, Malacca Straits, Cambodia, Thailand and many more.
(image courtesy: Wikipedia)
China has for ages dominated the control of this sea. In order to balance this domination US allied with Japan and together they form the other end of the control. However, in recent times China has begun to get in touch with all these countries giving them economic and financial aid thereby getting their support. With the US beginning to lose its grip it began to ally with India and Japan to balance the control. In this context since 2011 Indian diplomats began steps to secure friendship with countries such as Bangladesh, Vietnam etc. The "Look East" policy that was active in 1993 under Narasimha Rao and then under Vajpayee till 2003 suddenly lost momentum and again in 2011 gained slow speed under Manmohan Singh. Modi is accelerating this policy with targeted investments so that there is a win-win situation. South China Sea is known for huge oil reserves and all countries want to control it. With China having territorial disputes with almost everyone in the region has always upped the ante. China's arch enemy is Japan and both cannot stand each other.
In this context, recently India signed agreements to provide loan and sophisticated boats to Vietnam against China's territorial aggressions in return for getting oil supply from the waters around Vietnam. The Chinese categorically warned of consequences if India extracts oil from Vietnam.
2) String of Pearl strategy by China: When China began to rise in 2001 it began this policy of involving all of India's neighbors to form a string so that upon necessity it can prepare for attack on India. For this it began to develop friendships with Nepal flooding its market with goods and helping it in financial aid. It then began to deepen its friendship with Pakistan to develop Gwadar port to the west of Gujarat, controlling ports in Bangladesh and putting pressure on Bhutan to support China in every way. Besides all these ventures China also began developing Tibet such that within an hour through roads and high speed railways can reach Indian borders if a situation arises. The UPA Government was least interested in acting upon these steps. Only in the last few years of UPA II the former PM Manmohan Singh began to take steps to mend friendships with Bangladesh.
Modi wanted to change the situation to make China an economic partner and go beyond just boundary disputes. Keeping the boundary issues aside he wanted to involve China to invest with a strong economic agenda. When he was Gujarat CM he visited China several times and often in his speeches he talked about China as the real competitor to India. When Chinese President Xi came to India the rumor was that investment would be to the tune of 100 billion dollars - thrice the amount Japan agreed to invest. It was a huge gain if China had invested this amount. However, it reduced to 20 billion dollars, which is less than Japan's investment. What triggered this?
Modi wanted to change the situation to make China an economic partner and go beyond just boundary disputes. Keeping the boundary issues aside he wanted to involve China to invest with a strong economic agenda. When he was Gujarat CM he visited China several times and often in his speeches he talked about China as the real competitor to India. When Chinese President Xi came to India the rumor was that investment would be to the tune of 100 billion dollars - thrice the amount Japan agreed to invest. It was a huge gain if China had invested this amount. However, it reduced to 20 billion dollars, which is less than Japan's investment. What triggered this?
Like Modi, Xi is considered reform oriented Chinese President. An investment to the tune of 100 billion would have benefited China as well. It looks like there was a hidden twist to this whole story. The Chinese, exactly hours before the meeting of Modi and Xi, infiltrated into Chumar region of Ladakh. The number was 1000. This is the highest number of soldiers entering the territory post 1962 war. This whole incident shadowed the event Modi had organized.
On one side Modi achieved a lot when agreements were signed to make Pune and Ahmedabad export and manufacturing hubs, train Railway officials to increase the speed of Bangalore-Mysore-Chennai train, rejuvenating Railway stations, setting up a Railway university, giving enhanced access to Indian agricultural and pharma products in China, and opening up a new route to Manas Sarovar through Sikkim.
On the other side he had to talk tough to ask Xi to withdraw his troops. The tough negotiations by Modi finally led to the withdrawl of the troops. However, things did not stop here. Two days after this meeting troops again entered the territory. This time the number was just 50. Since this is a mystery that will hardly be revealed, this article explains 3 possible reasons as to why the Chinese intruded right at this moment - a) The People liberation Army (PLA) that is controlled by the Chinese Government is not under Xi's control b) Xi knew this intrusion and was done intentionally c) Xi wanted PLA to do its work and he wanted to do his. So, one wing aggressively pursuing border issues and the other economically winning deals with India.
In my personal view the third reason is most probable since Chinese history is well know to all countries in South China Sea. China is probably the only country yet to have so many territorial disputes with everyone in its neighborhood. India has no options but to constantly monitor the situation and rise economically and strengthen its infrastructure in these regions.
Since Modi's ascent he seems to be planning to break the very trap China has set up. With India cozying up to Japan and the recent steps taken by his Government to engage Vietnam and Bangladesh to corner China this game of Chinese checkers is getting very interesting. China was quite naturally baffled and decided to intrude into Indian territory to increase the scale of provocation.
Such diplomatic games by China is hard to play with. With a single party and a single focused agenda Chinese government, economy and defense is way ahead of India by about 50 years, With changing political equations and central governments India lacks a consistent tough leadership. As long as Modi is going to rule India there will be tough moves by his government in every way possible.
At this point the country's economy is very important and the investments from China and Japan would play a critical role in realizing many projects which we do not have expertise in. Together this is the biggest investment India can dream of getting in to achieve its most complex goals.
Since Modi's ascent he seems to be planning to break the very trap China has set up. With India cozying up to Japan and the recent steps taken by his Government to engage Vietnam and Bangladesh to corner China this game of Chinese checkers is getting very interesting. China was quite naturally baffled and decided to intrude into Indian territory to increase the scale of provocation.
Such diplomatic games by China is hard to play with. With a single party and a single focused agenda Chinese government, economy and defense is way ahead of India by about 50 years, With changing political equations and central governments India lacks a consistent tough leadership. As long as Modi is going to rule India there will be tough moves by his government in every way possible.
At this point the country's economy is very important and the investments from China and Japan would play a critical role in realizing many projects which we do not have expertise in. Together this is the biggest investment India can dream of getting in to achieve its most complex goals.
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