Events

Chair: Santosh Kumar
Discussants: G Balachandran and Jayshree Sengupta

The objective of this paper is to analyse the economic relations between India and United States. Dr. Samuel advocates taking a strategic approach to current economic relations between the two countries. This approach is necessary because of somewhat unique nature of India-US economic relations which is increasingly being built on synergies in knowledge based industries and services. The paper attempts to analyse the various components that make up overall India-US economic relations and locate priorities that can be taken up for dialogue under the bilateral engagement process.

According to Dr. Samuel currently both countries are going through a transition process to emerge as knowledge based economies. The ongoing transition process results into trade in goods and services based on intellectual property. Therefore it necessitates the governments to take more pro-active role since the rules of a global economy based on transaction in services are still being worked out. The new economy industries need support in terms of infrastructure, government policies and availability of capital to enable a viable ecosystem to develop.

Highlighting India’s emergence as a global economic player, Dr. Samuel pointed out that trade with the US, both export and imports, have been on an upward trajectory since 2002. The United States remained India’s largest trading partner on combined trade in goods and services, totaling $61 billion in 2007. While imports came to $27 billion, exports totaled $34 billion. The good and services trade deficit was $7 billion in India’s favour in 2007. While exports to the US stood at $12 billion in 2002, it had doubled to $26 billion (12.7 per cent of India’s total exports) by 2008. Against this, imports from the US went up by four times from $4 billion in 2002 to $18 billion (8.4 per cent of total imports) in 2008.

Dr. Samuel identifies future growth areas which includes defence equipment and technologies, and nuclear equipment and technologies. However, trade in both these areas is contingent on the easing of restraints on high technology and dual-use items which were imposed during the cold war era. Despite the existing restrictions on the export of dual use technologies and items to India, imports of high technology goods from the US rose from $1.2 billion in 2002 to $8 billion (45.8 per cent of total imports from the US) in 2007. Similarly exports of high technology goods from India also rose from $198 million to $708 million in 2007 before crossing the billion dollar-marks in 2008.

Dr. Samuel points out that mechanisms such as the High Technology Cooperation Group (HTCG) have met with only little success and the promised boost to bilateral trade is yet to materialize even after the civil nuclear agreement. Now there are clouds of suspicion over Obama administration’s continued commitment to the nuclear agreement. However as expected, defence trade between the two countries has gone up. Two defence deals have been concluded that for six Lockheed Martin Corp C-130J Super Hercules military transport planes and eight Boeing P-8I maritime patrol aircraft, worth in excess of $3 billion. Lockheed Martin and Boeing are also vying for the contract for multi-role fighter aircraft, estimated at $11 billion. India estimates that its military modernisation plans will entail the purchase of over $120 billion worth of defence equipment. Dr. Samuel points out a major obstacle that is the restraints imposed on technology transfer. It is in the interest of both India and United States to remove the obstacles inhibiting strategic trade.

Trade in services has the most potential for growth. Imports of services from the US totalled $9.3 billion in 2007 while exports totalled $9 billion. Of this, exports of software services from India were in the region of $4 billion while imports of software services from the US stood at $193 million. However there are hindrances such as severe criticism of the provision of software services to US companies by Indian companies and complaints about rampant misuse of the H1B specialty visas. According to Dr. Samuel legislations such as Grassley and Durbin proposal in the Senate on visa reforms and American Recovery and Reinvestment Act signed by President Obama soon after assuming the presidency, effectively bar companies from recruiting workers through the H1B programme unless they fulfill stringent conditions. The recent bills have been construed as protectionist measures, which might lead to counter-measures. Even at a time of economic recession, Indian economy is expected to continue growing at a minimum of 5%. Markets such as India and China have provided as much as 75% of growth even if that translates only into 25% of sales at the moment. US companies have been major beneficiaries of the opening up of the Indian markets and the liberalization of the economy. At this juncture tit-for-tat approach would hurt both countries immeasurably. He opines the misuse of H1B visas can be countered through closer supervision. Outsourcing is an integral part of globalisation and denial of it may have harmful effects on mutual as well as global economic growth.

While discussing investment positions in the two countries, Dr. Samuel pointed out that cumulative US investment in various sectors in India stood in the region of $13 billion at the end of 2007 of which 30% was in information technology services, and 21% in manufacturing. Finance and depository institutions together made up 24 % of the investment. However, Indian investment in the US has been more through the mechanism of mergers and acquisitions, with Indian companies acquiring over 83 companies in the US with a cumulative value of over $10 billion. The major deals of 2007 were Hindalco’s acquisition of Novelis for $6 billion, Rain Calcining’s acquisition of CII Carbon for $595 million, Wipro’s acquisition of Infocrossing for $568 million and FirstSource’s acquisition of MedAssist for $330 million.

Dr. Samuel opines that the US and Indian economies are poised to help each other through the creation of an eco-system that transcends geographical boundaries through available technological means and promotes innovation and creativity, ultimately leading to wealth creation. The promotion of a culture of enterprise and innovation must be encouraged in India which would lead to the creation of intellectual property rather than merely using the IP created by others.

Dr. Samuel suggested that to deal with the lack of venture capital investment currently, the two governments can adopt BIRD Foundation model of encouraging innovation as between Israel and the US where a bi-national fund has invested over $245 million in 740 projects, which have produced sales of over $8 billion. According to him this model can be replicated in other areas as well

Dr. Samuel concluded that the unfolding strategic environment would play a large part in deciding the direction of India-US strategic trade despite insufficient strategic underpinnings to provide it a fillip. Policy actions are required to provide the conditions necessary for the creation of an eco-system conducive for the growth of an innovation-led economy.

It would be a good strategy on the part of India to focus on removing the impediments to its services trade with the United States, which is relatively neglected despite its sizeable contribution to the bilateral trade pie. It should be impressed upon the US that the current moves towards protectionism are a detrimental step. There should be greater dialogue on easing the difficulties faced by entrepreneurs and service providers in travelling between the two countries as well as starting and sustaining businesses. A part of stimulus package in both the countries can be used to create public private venture capital funds to provide seed capital to start-ups in the new economy. In India returning professionals from the United States should be considered a resource, and a publicly accessible database should be created to enable greater networking. Government schemes to encourage entrepreneurship should be given greater publicity and lesser bureaucratic formalities. Dr. Samuel stated that the present time provides opportunity to turn the liberal-humanist rhetoric in the relationship into reality, given the similar ethos of the two ruling parties in both these democracies.

Points raised during discussions

• Despite much talk about the India-US strategic partnership, why are there so many hurdles in India-United States economic relations?
• India ranks 17th among US trading partners with trade amount only US $ 44 billion.
• US is closely watching India’s economic reforms. Reforms are required in other sectors as well. For example there are many obstacles in the labor sector. United States wants India to open its agriculture market. India is not ready to open it.
• There is talk of free trade between the two countries but this idea is politically charged.
• India-US Knowledge Initiative on Agriculture (AKI), which was signed by the Bush administration, is based on public-private partnership. Since India has population surge so Bio technology revolution is needed to enhance production. It is essential and helpful for India. It faced a lot of opposition in India because of the issues such as Bt cotton which was seen as the corporatisation of agriculture.
• Companies in India and United States need to identify areas where they can invest. India has internal security requirements and US needs reforms in energy and health care sectors. It would be helpful if private sector companies focus on these identified areas.
• There is cross-cultural communication gap between India and United States. India should focus on strategies to attract more businesses from United States.
• States in India should open trade promotion offices.
• On the H1B Visa issue, actually numbers do not mean much. What is more important is principles and what goes beyond it. The issue of H1B Visa should be looked in the broader context. The new bill introduced by Obama administration on H1B does not violate earlier rules but only tightens existing rules.
• Indian companies need to be proactive. There are a lot of companies in the United States either looking for help or filing for bankruptcy. Indian companies should go for mergers and acquisitions in the United States. An information database should be created for failing US companies as research institutes such as Institute for Business and Finance (IBFR) do carry out such studies.
• In high technology trade, there has been one way traffic. Indian companies are not in high technology development sector. It will take some time. Americans are very much methodological in their approach especially while dealing with high technology trade.
• In service sector, India can play important role in R&D. Signing MoU between the two countries is easy but the important question is how it will be converted in to reality.
• US is the biggest buyer of defence equipments. There are opportunities for Indian companies to invest in the US defence sector.
• The contribution made by Indian diaspora in the United States should not be ignored. The role of Indian migrants should also be factored in while studying India-US economic engagement.
• It is useful to create a common market in climate change and healthcare sectors if India wants to create a favorable environment to attract more companies.
• When companies go for investment, they want to ensure IP protection.
• There are problems in getting Indian Visas for US citizens as well.
• Service sector covers 53% of the Indian business and 81% in the United States.
• H1B Visa is important for the software sector. 45% professionals aspire for this Visa.
• High Technology Cooperation Group (HTCG) is a very important mechanism for high technology trade. It is matter of analysis whether it has contributed for enhancing India-US trade relations.
• The paper needs to clearly distinguish between what the government should be doing and what the corporate sector should be doing.
• The importance of the Indo-US relationship can only be properly understood if it is considered in the context of the future, as well as in terms of comparative growth, market size, and market potential, which forms a fundamental motivation for US interest.
• The United States has security interest in investing in a vibrant Indian economy.
• India has the potential to balance economic order in Asia.

Prepared by Sanjeev Kumar Shrivastav, Research Assistant at Institute for Defence Studies and Analyses, New Delhi.

Chair: G Balachandran
Discussants: K C Singh & R R Subramanian

The India-United States civil nuclear cooperation agreement, announced through the July 18, 2005 joint statement, besides opening the doors for global nuclear commerce, is seen as a means to facilitate India’s greater integration with the global non-proliferation regime. India was always credited to be an adherent of the regime’s norms, but was deemed an outsider owing to its non-membership in the Nuclear Non-Proliferation Treaty (NPT), which is seen as the cornerstone of the regime. Through the nuclear agreement, the U.S. had volunteered to assist this assimilation process, the latest development being the India-specific exemption at the Nuclear Suppliers Group (NSG).

The emergent global nuclear order and the NPT

As a Cold War arrangement, the NPT sustained one of the most established international bargains whereby states without nuclear weapons pledged not to acquire them, while existing nuclear weapon states committed to eventually give them up. However, in the past four decades, the Treaty had attained the tag of being a system with unfulfilled objectives outnumbering its achieved goals, and failures accumulating as each of its articles were being violated with impunity. The Treaty was no longer seen to have the capability to address newer security threats arising out of a post 9/11 world, influenced by non-state actors and an increasing number of threshold states. What looked more portentous was the imbalance a non-state actor would inflict on the non-proliferation regime and the NPT, which were equipped only to handle the proliferation problem arising from states. Forty years later, the Treaty might pride on its record of restricting new weapons states to three or four. But as of today, the instances of non-compliance and likelihood of more threshold states emerging on the scene have increased, partly due to the security deficit created by current geo-politics.

India’s rendezvous with the non-proliferation regime

From its early days of disarmament activism, India had envisioned a third world leadership role for itself in the evolving non-proliferation regime, and vociferously advocated the non-dissemination of nuclear weapons technology. In the early 1960s, as a member of the Eighteen Nation Disarmament Committee (ENDC), India influenced the debate for a Nuclear Non-Proliferation Treaty and argued for a credible bargain whereby weapon powers would give up their arsenals while ensuring that others refrained from developing or acquiring such weapons. But when the grand bargain became discriminatory, India decided to stay away from the NPT. India’s decision to conduct a Peaceful Nuclear Explosion experiment was seen as the first challenge to the non-proliferation regime, which invoked new mechanisms like the NSG to add to what the Zangger Committee had already initiated.

India and the NPT: Towards Convergence or Drifting Apart?

The genesis of India’s confrontation with the NPT can be traced to the political power play enacted during the negotiations for the Treaty. Even before Ireland submitted a draft resolution to the General Assembly, India had launched its campaign calling for steps to stop the spread of nuclear weapons and exhorted weapon states to take the initiative, failing which non-nuclear nations would be tempted to acquire nuclear weapons. India was upset that the Irish draft talked of prohibiting acquisition of nuclear weapons, but imposed no restriction on its continued manufacture and maintenance. Later, India joined seven nations in the ENDC to submit a resolution (GA 2028 [XX]) with five principles of which the key ones were:

- The Treaty should be void of any loopholes for countries to proliferate;

- It should embody an acceptable balance of responsibilities and obligations;

- It should be a step towards complete disarmament.

The Other Challenges

Though India could be prodded to think of campaigning for reforms in the NPT, there are other areas like the Comprehensive Test Ban Treaty (CTBT), on which India would have serious reservations in its current form.

CTBT: India had vociferously argued for a test-ban, along with a fissile production cut-off, as part of its campaign to stop the production and development of nuclear weapons during the initial NPT debate. This was in consonance with its 1954 proposal calling for end to nuclear weapons testing. At the 1996 Conference on Disarmament, India, along with members of G-21, proposed a Programme of Action for the phased elimination of nuclear weapons by 2020. However, during the CTBT negotiations, weapon states refused to agree to any commitment on disarmament and pushed for a test ban while insisting on the Entry into Force clause (XIV), which required India along with specified countries to join the Treaty before it became operational.

FMCT: A key element of the July 2005 joint statement was India’s cooperation in negotiations for concluding a Fissile Materials Cut-Off Treaty (FMCT). India had strongly advocated a fissile production cut off in the NPT debate, but later on resisted an FMCT owing to its potential impact on its own nuclear weapons programme. Differences over issues like time-bound disarmament had led to stalemate in negotiations. After initial opposition arguing that an FMCT would curtail its nuclear weapons programme, India announced in 1998 its willingness to participate in the negotiations. There are some issues to be factored in India’s policy towards FMCT: (a) Does India have sufficient fissile material for its credible deterrent? (2) If not, can it be mobilised before the Treaty is ratified? (3) Would the Treaty benefit disarmament or would it be used to curtail the strategic capability of countries like India?

MTCR: Another commitment of similar character was compliance with the Missile Technology Control Regime (MTCR). Though India has updated its national controls lists with that of MTCR Annex, it is still treated as an outsider by the MTCR community for its defiance in pursuing its guided missile development programme. However, the merit in India’s case is that it had managed to develop its missile systems indigenously and also resisted transfer of missile systems to another country.

Conclusion

With the nuclear deal and NSG waiver, India is moving towards greater integration with the non-proliferation regime. By doing so, it would join ranks with the United States in evolving a new nuclear security order. However, the more India’s proximity with global non-proliferation objectives, the more would be the policy challenges on crucial issues connected with anti-proliferation. Irrespective of the success and acceptability of a new order, the instruments of the old order would continue to hold significance in nuclear politics. As an active member of the non-proliferation regime, India would have to initiate a dialogue with these instruments to ensure that its bonding with the regime is sustained.

The NPT continues to be the cornerstone of the global non-proliferation regime, despite its many shortcomings. Being a near-universal mechanism, the Treaty would continue to hold its primacy in global nuclear affairs. Though India managed to resist calls for membership all these years, its stakes and responsibilities would increase with its weapon power status and greater access to nuclear commerce. On the other hand, India has to realise that the driving spirit that motivated it to advocate the NPT and CTBT are still relevant. For decades, Indians have seen NPT as discriminatory so much so that even a rethink is now seen as blasphemous.

Discussion

A. Vinod Kumar presented this paper as part of the IDSA Weekly Fellows’ Seminar series. The seminar was chaired by Dr. G. Balachandran, Visiting Fellow at IDSA. Discussants in this seminar were Dr. R. R. Subramanian, former Senior Research Associate at IDSA and a renowned strategic analyst and Mr. K. C. Singh, IFS (Retd.). Mr. Sujit Dutta, Senior Fellow at IDSA and Dr. Rajiv Nayan, Research Officer at IDSA, also offered special comments as Discussants. Important points flagged during the discussion were:

• A favourable balance has to be struck between pragmatism and idealism on issues related to non-proliferation.
• Ideological and practical aspects are an important dimension of the debate on NPT.
• There should be a degree of caution in the way the nuclear deal is looked at. US posturing may be different from action and the idea might be to target India’s strategic programme. US is no longer a superpower but a hyper power; and it has no friends but only allies. Therefore there should be an element of scepticism in the way the nuclear agreement is perceived. One has to keep in mid the ‘trade offs’ in such arrangements.
• There is a debate on moralism versus pragmatism as India has been an over-moralising country in the past due to the Gandhian and Nehruvian legacy. Moralising kept India away from realpolitik for a long time. However, the moral strategy also helped in some ways and India introduced the concept of ‘Atomic Apartheid.’ There is a dichotomy between moralism and practicality. India is shedding its moralistic stand and taking a more holistic view of the nuclear agreement.
• The best thing about the deal is that India can trade with France and Russia
  India is the largest supplier of thorium (almost 60% of the total supplies).
• India is already a Nuclear Weapon State. There is no need therefore for enshrining this by India joining the NPT as a weapon state which is not likely in the near term.
• India is closer to signing CTBT than before.
• The signing of an FMCT will take time.
• The India-US nuclear deal is part of an American attempt to balance the strategic interest of making India a stakeholder to strengthen the international order and the American commitment to non-proliferation goals.

Prepared by Dr. Priyanka Singh, Research Assistant at IDSA.

Chair: Arun Bhagat
Discussants: S Y Thapliyal and Bibhu Prasad Routray

In India, the word terrorism came to be officially used for the first time in 1984 to characterise the violence in Punjab. This followed the enactment of the Terrorist Affected Areas (Special Courts) Act of 1984, the impulse for which was the assassination of Indira Gandhi in October that year. Before this, all armed action by the various groups in the North East or by the Naxals were referred to as extremism or militancy or Naxalism. Subsequently, the violence unleashed by domestic as well as foreign armed groups in Jammu and Kashmir came to be characterised as cross-border terrorism.

The 2007-2008 Annual Report of the Ministry of Home Affairs lists 32 different armed groups as banned terrorist organisations. Among others, these include several armed groups in the North East as well as the two Maoist groups. Yet, in the pages devoted to detailing what the report refers to as the “Current Status of Militancy in the North East” and in the section dealing with the “Naxal Situation,” the words terrorism and terrorist are not mentioned even once! The report also characterises the violence in Jammu and Kashmir as “terrorism/militancy”, in a bow towards the fact that all violence in that state does not constitute terrorism.

To avoid confusion about the phenomenon being confronted, it is imperative to understand what terrorism is. Moreover, a series of events in the last few years – the November 2008 terrorist attack on Mumbai, the various bombings carried out by the Indian Mujahideen, and the involvement of Hindu radical groups in bomb-throwing – points to a new wave of terrorism focused on the Indian hinterland. This necessitates a change in India’s approach towards counter-terrorism from one focused purely on cross-border aspects to domestic issues as well.

This paper explores what terrorism is. It analyses the new wave of terrorism buffeting the Indian hinterland, and excludes discussion of the Maoist insurgency, the armed activities of the various armed groups in the North East, and “militant” violence within Jammu and Kashmir. The paper also highlights some principles that should inform India’s approach to counter terrorism.

While cross-border terrorism sponsored and supported by Pakistan has been a security challenge since the late 1980s, a new wave of terror has begun to batter the Indian hinterland in recent years. Three distinct sets of players are involved in this new phenomenon. The first set comprises of Pakistani terrorist groups like Lashkar-e-Taiba (LeT) and Jaish-e-Mohammad (JeM), which have since the late 1990s begun to expand their ‘jihad’ in Kashmir into the Indian hinterland. The second set is composed of a network of rage-driven Indian Muslim youth and Indian criminal outfits, who, with the support of the first set, seek vengeance for the ‘sufferings’ inflicted upon their community. And the third set is formed by radical Hindu youth, bent on retaliating against Muslims for the terrorist attacks carried out by the other two sets of players.

Two events triggered this new wave. The first was the demolition of the Babri Masjid in 1992 and the communal riots that followed in parts of the country. The second event was the stalling of the separatist struggle in Jammu and Kashmir in the mid-1990s. Muslim youth and criminal networks were spurred by the Babri demolition and the ensuing communal riots to seek vengeance through terrorist attacks. Ten years later, the tragedy in Gujarat provided further fuel to their anger.

Pakistan has been providing material support to them in this enterprise. And when the Hizbul Mujahideen’s separatist struggle in Jammu and Kashmir began to wane, Pakistan began to funnel its own citizens and other “graduates of the Afghan war” into the state, thus transforming a local insurgency into a transnational jihad. When neither this change in actors nor the Kargil misadventure could shake the Indian hold over Jammu and Kashmir, the jihad was extended to the Indian hinterland in the late 1990s. This in turn incensed Hindu radicals who began to plan and unleash terror against innocent Muslims.

India thus has to contend with three sets of terrorist actors – one purely foreign, the second, domestic groups with linkages to these foreign players, and the third wholly domestic.

The approach to counter each of these players has to be distinct, though there are bound to be commonalities in measures adopted. In the case of Pakistani terrorist groups like the Lashkar-e-Taiba, domestic counter-terror measures have to be accompanied by diplomatic efforts to force Pakistan into taking stringent action against these groups and even covert intelligence campaigns to disrupt the terror infrastructure in that country.

India also needs to focus on domestic counter terror measures, which have indeed received a fillip in the wake of the Mumbai attack. States have responded to terrorism by adopting a combination of several responses, each of course specifically crafted to suit their particular circumstances. Though it might sound pusillanimous, “appeasement” is a most pragmatic response. Not appeasement in terms of conceding terrorist demands, but addressing the underlying causes that triggered the resort to violence in the first place.

A second set of responses is in the domain of intelligence and the legal framework to deal with terrorism. The development and maintenance of databases about terrorist groups is essential. This is in turn contingent upon enhanced intelligence work and capabilities, both human and technical. Related to this are greater intelligence and surveillance efforts through a network of closed-circuit television cameras, psychological profiling, infiltration of terrorist groups, etc.

Thirdly, it is crucial to identify and harden actual and potential targets like government buildings, corporate houses, vital installations like airports, power plants, and the like through security measures like x-ray baggage screeners, metal detectors, more security personnel, etc. The idea is to make it as difficult as possible for terrorists to carry out attacks, thus increasing the chances of mistakes and consequent reduction in the actual number of attacks.

The creation of special counter-terrorist forces and providing them with specialised training to deal with hostage negotiations is the fourth response. This needs to go hand in hand with the modernisation of the police force.

Important points raised in the discussion:

• India is the biggest victim of terrorism.
• The biggest act of Hindu terrorism was the destruction of Babri Masjid.
• Majority community needs to change its mindset towards the Muslim community.
• Revamping the intelligence structure is the need of the hour.
• There is complete lack of coordination among various security agencies. This has to be addressed.
• There is urgent need for police reform.
• Is Indian Mujahideen an independent terror group?
• Pakistan remains a security threat to India. India’s inability to deal with Pakistan has further compounded the situation.
• India should not expect much from the United States in dealing with Pakistan. However, India may consider something like the US Department of Homeland Security.
• There is an urgent need for political consensus on terrorism.
• Above all, there is need for security consciousness among the people.

Prepared by Dr. M. Amarjeet Singh, Research Assistant at Institute for Defence Studies and Analyses, New Delhi.

Chair: ?K Raghunath
Discussants: Divyabh Manchanda, Arun Sahgal and Arun Mohanty

The Shanghai Cooperation Organisation (SCO) represents a major development in the strategic landscape of the Central Asian region. The inclusion of India, Iran and Pakistan as observer states in the SCO mechanism suggests that it is gradually expanding into the wider South Asian region. In the next SCO summit meeting in Russia it is expected that Sri Lanka and Belarus will become dialogue partners of the SCO.

The changed attitude of the Central Asian regimes created a situation, which provided an opportunity to the SCO for a new geopolitical role. In July 2005 (during Astana Summit) the SCO member states called the US to set a deadline for withdrawing its military presence in the region. As a result, the US had to close down its air base in Uzbekistan in November 2005. In June 2006, the SCO summit took place against the backdrop of the crisis over Iran’s nuclear programme and both Iran and Pakistan sought full membership in the organisation. The Bishkek Summit in 2007 was important, where leaders from China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan pledged to work more closely to develop energy resources and boost security efforts within the SCO framework. The Dushanbe summit in 2008 was held against the backdrop of Georgian crisis and speculations about the start of a ‘new cold war’ between Russia and the US.

Afghanistan has always drawn special attention during the SCO summit meetings. The SCO Secretary – General Bolat Nurgaliev pointed out that cooperation among the member states should not only cover economy and trade but also anti-terrorism and other fields. The SCO-Afghanistan Contact Group was formed in November 2005 for the purpose of building cooperation between the SCO and Afghanistan on issues of mutual interest. The special conference on Afghanistan under the auspices of the SCO to discuss the issues of joint counteraction against terrorism, illegal circulation of narcotics and organized crime was proposed by the member states.

Iran, which has an observer status and has been seeking full membership in the SCO has major interest in Afghanistan. Tehran views outside powers to be the cause of problems. Pakistan’s Foreign Minister Shah Mehmood Qureshi argued that Pakistan has a central role in facilitating the stabilization process in Afghanistan and was committed to provide all needed help to reconstruct Afghanistan.

It can be evaluated that the SCO as an organisation will focus its activities mainly on problems of terrorism and narcotic control. At the same time, Afghanistan directly influences security of the Central Asian states. Experts believe that hopefully the Obama administration with their newly declared desire of “engagement” would be more receptive in coordinating their efforts with the SCO or at least with member countries on a bilateral basis. Hopefully, there will be a stabilization program jointly developed and implemented by Afghanistan and Dialogue member countries.

The current situation in Afghanistan is worrisome for India. Regional countries have greater stakes in Afghanistan because of their vested security interests. Today, India’s strong economy has the potential to contribute to the reconstruction of Afghanistan. It has contributed in a major way in the past few years but its activities have been hampered due to the deteriorating security situation within Afghanistan and constant efforts of extremist groups backed by Pakistan to sabotage India’s reconstruction work. New Delhi has emphasized the importance of regional cooperation because this can help in addressing trans-border issues, developing commercial and economic opportunity and ending cross-border infiltration and terrorism. India has contributed to the reconstruction process in Afghanistan at the bilateral level. Under the SCO mechanism India remains an observer state and thus doesn’t wield the same influence as Russia or China.

With the SCO’s increasing influence in the past five years within the Eurasian region, it is likely to play an important role in the future as well. The SCO’s geographical proximity to Afghanistan particularly, with the Central Asian countries, will necessitate that neighboring countries engage Afghanistan bilaterally as well as through the SCO in specific areas like controlling drugs and terrorism. However, the Russia –US and Russia-NATO and the US-Iran relations will determine future developments of the SCO.

Points in the Discussion:

The main focus of SCO in Afghanistan is in three areas: counter terrorism, drug trafficking and provision of infrastructure to rebuild Afghanistan.

SCO is used as a tool by big member states to maintain their geo-political status.

China is worried about the influence of other member states in the region particularly in the area of energy.

China and Russia do not want to accept the American presence in the Central Asian region because both countries have great influence and they are not ready to curtail their influence in the region.

At the bilateral level Russia and the Central Asian Republics try to engage more with Afghanistan.

SCO is focusing regional countries such as India, Iran and Pakistan to engage more on Afghanistan issues.

Russian believes that America is not keen to resolve Afghan issues swiftly because America and NATO have military bases only in Afghanistan to protect their interest in the South Asian region.

The SCO is a China dominated organisation. Moreover, China may try to limit and balance India’s influence by supporting Pakistan.

India needs to take a collective approach to resolve Afghanistan’s problem, because India is also observer state of the SCO.

Peace and stability in Afghanistan is a crucial issue for India, and India must be taken seriously.

Need to examine China’s dominance in the region and is really protecting its interest in CARs through SCO.

Need to examine if the SCO is really formed to counter NATO.

Why SCO did not offer Afghanistan observer status?

Prepared by M. Mahtab Alam Rizvi, Research Assistant at the Institute for Defence Studies and Analyses, New Delhi.