Abe Shinzo made his mark as an astute statesman in international politics with intellectual bandwidth and a global vision to conceptualise grand strategic constructs such as the Free and Open Indo-Pacific anchored on universal values.
Abe Shinzo, one of post-war Japan’s most consequential prime ministers, departs from office almost a year ahead of his scheduled term, till September 2021. The Abe era will be defined by decisive, resolute and bold leadership that successfully repositioned Japan to step up as a stabiliser in the system, promoter of rules and custodian of global commons. He made his mark as an astute statesman in international politics with intellectual bandwidth and a global vision to conceptualise grand strategic constructs such as the Free and Open Indo-Pacific anchored on universal values. He wove together the Quad which dominates the foreign and security policy lexicon in the power corridors of major capitals in the world including Washington DC, New Delhi and Canberra. He also demonstrated Japan’s confidence in championing free trade and open markets refuting global trends against globalisation. He succeeded in putting Japan back on the global strategic map by steering monumental policy shifts in the domains of national security, foreign policy and economics.
It has been a momentous week in Japanese politics. The week began with Prime Minister Abe making history by outdoing his great uncle Sato Eisaku to become the longest-serving prime minister of Japan on August 24. And the week ended with his decision on August 28 to step down from office owing to his deteriorating health. Japan had a déjà vu moment. Earlier in 2007, Abe had decided to leave the top job for the same reason. Though he is leaving office before accomplishing some of the core agendas in his checklist, including amendment to Article 9 of the post-war Constitution, resolution of the North Korean abduction issue, and concluding a peace treaty with Russia, Abe has built a historic legacy both in national and international politics which will add value to the political repute of his family. Abe hails from one of the most influential political dynasties in Japan. He drew inspiration from former prime minister and his grandfather Kishi Nobusuke who was a key advocate of the constitutional revision movement but had to leave office as a political crisis unfolded following the revision of the US-Japan Security Treaty in 1960. His father Abe Shintaro was the foreign minister of Japan. Subsequently, in the years of his political ascendency, Abe Shinzo was mentored by then Prime Minister Koizumi Junichiro while he served as the chief cabinet secretary.
Abe presented incisive leadership while leading Japan through colossal structural challenges in its domestic landscape, in addition to reinventing its role in the international system. He assumed responsibility as the economy steered twin challenges posed by a society of centenarians affecting productivity and creating resource stress for the social security coupled with high government debt on the one hand, and the fluidity in the East Asian power balance and possible dilution of the US-led liberal international order on the other. Abe came to Nagatacho in 2012 following the chaos in crisis management over the triple disaster – the Great East Japan Earthquake, Tsunami, and the Fukushima nuclear meltdown – by the then Democratic Party of Japan (DPJ) administration. He rose to the challenge and brought in political stability and steered Japanese politics away from the culture of revolving-door prime ministers and leadership deficit. Under Abe, Japan witnessed centralisation of political power and administration around the Kantei and the Cabinet.
Abe has advanced two key national and international economic policies—‘Abenomics’ and Trans-Pacific Partnership (TPP). Driven by the colossal challenge to steer the economy exit deflation and revitalise Japan, he designed his signature programme, Abenomics, with three arrows including a bold monetary policy, flexible fiscal policy, and a growth strategy that promotes private-sector investment. Abe considered TPP as a key pillar for Abenomics and Japan’s trade strategy aimed at capturing the economic growth of the Asia-Pacific and rebuilding Japan’s economy. To this end, he pursued unpopular yet necessary reforms cutting through the deeply entrenched vested interests of the powerful lobbies, for instance, framing the nation’s ‘business versus agriculture’ debate (Keidanren/Keizai Doyukai versus the JA-Zenchu) and deregulation of the agriculture despite farmers being the bastion of conservative political support. Abe’s global leadership moment arrived once President Trump withdrew from TPP. He stepped in as the flag bearer of free trade, especially after effectively saving the TPP-11 and concluding the Economic Partnership Agreement with the European Union (EU) following Brexit. From agenda-setting with the Osaka Track for data governance at the G20 to the Ise-Shima Principles for Promoting Quality Infrastructure Investment at G7, Abe has offered Japanese solutions to key issues.
Navigating economic stagnation, a demographic dilemma and stern immigration controls, Abe pushed for difficult structural reforms. His ‘womenomics’ became the buzzword, an idea pushed by Kathy Matsui,1 to boost the gross domestic product (GDP) by bringing in more women into the labour force. Also, easing barriers to allow ‘Specified Skilled Workers’ while managing severe labour shortage in designated sectors triggered by the demographic challenge (ageing population and shrinking birth rates) despite the traditional focus on racial homogeneity, and thus framing the political discourse as gaikokujin no ukeire (acceptance of foreigners) and not imin no ukeire (acceptance of immigrants)2 as Japan’s population is projected to decline by one-fifth to around 100 million and dependency ratio rising to about 75 per cent by 2050.
The Abe era will be underscored by his resolve to decisively define Japan’s maiden national security strategy under the banner of Proactive Contribution to Peace. Even though his cherished ambition to amend the post-war constitution remained unfulfilled, he has worked relentlessly to reorient Japan’s security policy. He is leaving behind a Japan whose evolving character as a security actor is a key determinant in shaping the strategic equilibrium of the Indo-Pacific. From instituting the National Security Council, reinterpreting Article 9 and expanding the scope of the right to collective self-defence to debating “enemy-base strike” capability and its implications on the broad contours of the US-Japan alliance so far defined by the spear and shield strategy; from strategising aid to support maritime capacity building of member states of the Association of Southeast Asian Nations (ASEAN) to scrapping the defence spending limit of one per cent of GDP and easing the three principles of arms export to pushing defence-related investments with the establishment of Acquisition, Technology & Logistics Agency – Abe’s report card is impressive and may remain unmatched for some time to come.
Abe has also positioned Japan as a potent middle power invested in upholding an international order based on the rule of law, free trade, and multilateralism. As a key stakeholder in shaping the Indo-Pacific order, Abe emphasised on upholding a rules-based maritime order, pushing quality infrastructure financing, and championing trade liberalisation. He pragmatically adjusted Japan’s Free and Open Indo-Pacific “Strategy” into a “Vision” in order to avoid projecting it as a divisive strategy in order to amass support from ASEAN.3 Approach to Indo-Pacific is anchored on ASEAN centrality and Vientiane Vision focussing on Southeast Asia on one hand and African ownership in the Tokyo International Conference of African Development (TICAD) process on the other. He has shaped conversation with key Indo-Pacific powers advancing strategic coordination at the Quad Plus, Blue dot network on high-quality infrastructure, D-10 alliance of democracies on 5G, Global Partnership on Artificial Intelligence (GPAI), and also setting the stage for Japan’s entry into the Five Eye intelligence alliance.
Abe had a delicate balancing act in advancing Japan’s interest in the China-Japan-US triangle.4 China’s arrival as a major actor in the international system, alliance management under the Donald Trump presidency, and hedging against the US abandonment challenged his administration. Keeping US-Japan alliance at the core, Abe wove together a network of allies and strategic partnerships with maritime democracies in the Indo-Pacific. In this regard, India featured as a priority in Abe’s strategic thinking5 and is weighed as a key component in his idea of Asia, as argued in his book Utsukushii kuni e (Toward a Beautiful Country). As the rationale of value-oriented foreign policy gained traction, India has been accorded space in Japan’s strategic constructs.6 His political charisma has worked well in building a personal rapport with world leaders from President Trump to Prime Minister Modi. The optics of Trump-Abe golf diplomacy or Modi-Abe ‘Ganga Aarti’ will remain in public memory in decades to come. While he made good friends across the world capitals, his relations with East Asian leaders were weighed down by nationalism and historical baggage on the heels of the 75th anniversary of the Second World War.
History will also remember Prime Minister Abe’s tenure which oversaw Japan’s transition to the historic Reiwa era following the first succession to the Imperial throne from a living Emperor in two centuries. Moreover, he successfully realised Japan’s Olympics dream until it wasn’t for the global pandemic. However, 2020 did not unfold the way Abe had planned it. This year had a packed schedule for Abe with high profile events including Chinese President Xi Jinping’s state visit to Japan and the 2020 Tokyo Olympics. But the diplomatic calendar suffered due to the global pandemic. In subsequent months, erosion in approval ratings influenced by the handling of the COVID-19 outbreak, in addition to ongoing political corruption scandals, adversely hurt the Abe administration.
Nevertheless, Abe has been a towering political figure in Japan. Leading Japan after Abe will demand statesmanship, political vision, and innovative policy responses. Amidst a pandemic, stable and strong leadership is critical to avoid political dysfunction when dealing with challenges across the spectrum of economics to demographics to national security. As Nagatacho gets ready for a post-Abe leadership and the Liberal Democratic Party (LDP) prepares for an election in September, contenders for the position include Chairman of the LDP’s Policy Research Council Kishida Fumio, former Defence Minister Ishiba Shigeru and Chief Cabinet Secretary Suga Yoshihide.7 Suga, often considered an Abe loyalist and confidant, may garner favourable support in factional politics.8 Irrespective of how the factional politics will shape the post-Abe leadership, Japanese politics cannot afford to slide back to its legacy of revolving-door prime ministers and leadership deficit which will deeply impinge on key policy matters. Sustainable and effective political leadership is indispensable for good governance and in steering the country through its daunting demographic, economic, security and foreign policy challenges in the post-COVID order.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
The normalisation of relations between the UAE and Israel is a historic development and a step forward in the rapprochement between the Arab Gulf and Israel.
The US-Israel-UAE joint statement of August 13 might have come as a surprise for many, but for those following the trajectory of the growing contacts between the Arab Gulf States and Israel, this was long in the making. Released by President Donald Trump, the joint statement promises to normalise diplomatic, political, economic and cultural relations between Israel and the United Arab Emirates (UAE), strengthening the already growing political and diplomatic contacts between the two countries.1 The question, however, is how will it impact the complicated Israeli-Palestinian conflict and whether it will have any effect on the Israeli-Arab relations. Though only time will tell the true efficacy of the move, it is likely to positively impact the Gulf-Israel relations but unlikely to significantly alter the course of the Israeli-Palestinian conflict.
Notwithstanding the significance of the move, the timing of the announcement is important. It underlines President Trump’s attempt to show a tangible foreign policy achievement ahead of his re-election bid for the second term, especially given that the mismanagement of the COVID-19 pandemic has given Democratic contender Joe Biden a slight edge over him. The August 13 announcement might not help Trump’s effort to revive the Middle East peace process but it can be counted as an achievement for the “Deal of the Century” that the Trump Administration has for the last three and half years invested significant resources to bring to reality.
The announcement is indeed a momentous development akin to the 1978 Egypt-Israel peace or the Camp David Accord, as it came to be known. However, the likely impact of the UAE-Israel normalisation can be even bigger for the Arab-Israeli relations. This is especially true as the Camp David Accord only led to a Cold Peace between Israel and Egypt and did not gain much traction in the Arab world. But given the fact that some Arab Gulf countries have already expressed their support for Trump’s “Peace to Prosperity”2 plan and have quietly developed contacts with Israel, three things are quite clear.
Firstly, this is the clearest sign of change in the instance of the Arab Gulf towards Israel. The process began post-Arab Spring and the sharpening geopolitics in the Middle East (or West Asia) further expedited it. The threat perception among Saudi Arabia, the UAE and Bahrain vis-à-vis Iran’s regional policy and Israeli reading of Iran as a national security challenge led to increased security-oriented contacts between the Arab Gulf states and Israel. This was followed up with secret meetings between Israeli and Gulf officials as well as members of the royal families. While initially meetings were organised secretly in third countries, later they began to be held in public in Israeli or Arab territories. For example, a secret meeting between Emirati Foreign Minister Abdullah bin Zayed and Israeli Prime Minister Benjamin Netanyahu took place in Washington in 2012. The meeting remained a secret until it was reported in the Israeli media in 2017.3
Fast forward four years, in July 2016, an unofficial Saudi delegation led by a former Saudi military officer, Anwar Eshki, visited Israel to discuss prospects for the Arab Peace Initiative.4 In October 2018, Netanyahu visited Oman and met Sultan Qaboos while the Israeli Culture and Sports Minister, Miri Regev, visited Abu Dhabi along with the national Judo team participating in a Judo championship. Trump Administration’s effort to enlist the support of Arab Gulf States in reviving the Middle East peace process added to the rapprochement between the Gulf countries and Israel.
Secondly, the Gulf countries have worked towards overcoming the anti-Israel public opinion prevalent in the Arab-Islamic world. They have used various tools including popular culture, social media, and local influencers to moderate the public opinion that has largely been antagonistic towards Israel. For example, the Arabic entertainment channel, MBC, broadcast a television drama series Umm Haroun during Ramadan 2020 which explored the taboo issue of Jews who lived in the Arabian Peninsula.5 Similarly, Arabic newspapers owned or supported by members of the Saudi royal family, such as Asharq al-Awsat, have published columns advocating better ties with Israel to counter the Iranian threat.6 Considered a taboo until a decade ago, the public discourse supportive of better ties with Israel and in favour of improving Jewish-Muslim relations might not have been possible without the state patronage.
Thirdly, other Gulf countries especially Bahrain and Oman who have come out strongly in support of the Emirati move to normalise relations with Israel might follow suit. Saudi Arabia, Morocco and Qatar who also maintain unofficial contacts with Israel might eventually change their official position vis-à-vis Israel. Once the UAE-Israel normalisation agreement is formally signed, the Emirates will become the fourth Arab country to have done so. However, unlike earlier efforts at normalising ties between Israel and Jordan, Egypt and Mauritania7, which did not change the collective position of the Arab world, the normalisation of ties with the UAE, which is emerging as one of the most influential regional states, can be a breakthrough especially in terms of the Gulf-Israel rapprochement.
Notwithstanding the significance of the announcement for the Arab-Israel relations, the normalisation of the UAE-Israeli ties is unlikely to dramatically alter the course of the Israeli-Palestinian conflict. All Palestinian factions including the Palestinian Authority led by Mahmoud Abbas and Hamas that rule the Gaza Strip have been antithetical to the Gulf-Israeli rapprochement, and have condemned all moves by the Trump Administration to revive the peace process as biased in favour of Israel. They have reacted sharply to the August 13 joint statement and have condemned the Emirati move as a decision taken “at the expense of the legitimate Palestinian national rights.”8 Within Israel, the constituency supportive of the internationally accepted two-state solution based on the 1967 boundaries has become increasingly slender. It means that for any Israeli leader it will be difficult to give up claims over the West Bank, popularly referred to as Judea and Samaria in Israeli discourse. Though Netanyahu agreed to defer the West Bank annexation plan in lieu of this “diplomatic breakthrough,” it is unlikely to permanently alter Israeli claims over the Jordan Valley. This is especially so because it is critical to the Israeli security. It will also mean end of settlements in the disputed areas that will prove costly for any Israeli leader.
The normalisation of relations between the UAE and Israel is a historic development and a step forward in the rapprochement between the Arab Gulf and Israel. It can as well have a far-reaching impact on the regional geopolitics. For the Trump Administration, it can count as a significant foreign policy achievement, and for Netanyahu, it can be a gamble for his political survival. But, as far as the Israeli-Palestinian conflict is concerned, this may not be the breakthrough towards a lasting peace.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
India and Mexico: Celebrating 70 Years of Diplomatic Relations
Ruchita Beri
August 20, 2020
India and Mexico can jointly push for an effective response to international terrorism, reforming the multilateral system, and the adoption of a comprehensive approach to promoting international peace and security.
On August 1, 2020, India and Mexico ushered in the 70th anniversary of the establishment of diplomatic relations between the two countries. Mexico was the first country in Latin America to establish diplomatic relations with India in 1950. Despite the vast geographical distance that separates them, the two countries share certain commonalities. Both are democracies, diverse societies and share similar development priorities. This view is echoed by Octavio Paz, Nobel Laureate and former Mexican Ambassador to India, “From the beginning, everything that I saw inadvertently evoked forgotten images of Mexico. The strangeness of India brought to mind that other strangeness: my own country”.1
Over the years, Mexico and India have developed a warm and cordial relationship. In 2007, the two countries upgraded their bilateral relations to a “Privileged Partnership”. In 2016, during Prime Minister Narendra Modi’s visit to Mexico, the two countries decided to develop a roadmap to upgrade their relationship to a “Strategic Partnership”.2 This was followed by an exchange of visits at the ministerial level, including a visit to India by Mexican Minister of Energy Rocio Nahle and Deputy Minister of Foreign Affairs Julián Ventura Valero. Earlier this month, Indian Foreign Secretary Harsh Vardhan Shringla and Mexican Deputy Foreign Minister Valero exchanged views on several issues including the economic impact of COVID-19 pandemic and the need to further expand the bilateral relations.3
The 70th anniversary of the establishment of diplomatic relations provides an opportunity to enhance cooperation in four key areas, which are discussed below:
Economy
Mexico is currently India’s largest trading partner in Latin America. In 2018-19, it accounted for almost a quarter of India’s trade with the region. At the same time, India is currently Mexico’s ninth-most important global trading partner. The last decade has seen a spurt in trade between the two countries, which has grown from around $5 billion in 2015-16 to $9.4 billion in 2018-19.4 Crude oil dominates India’s imports from Mexico. It also imports electrical goods and machinery, electronic equipment and auto parts. India’s exports to Mexico comprise mainly of vehicles, organic chemicals, aluminium products, iron and steel, and ceramic products. Indian companies have so far invested around $3 billion in Mexico.5
The rise in trade and investment follows Prime Minister Modi’s visit to Mexico in 2016. It can also be attributed to the immense significance of Mexico as a gateway to both North and Latin America. A large number of Indian information technology (IT) and pharmaceutical companies have set up joint ventures in Mexico. Following the COVID-19 pandemic, there has been a surge in cooperation in the pharmaceutical sector. In July 2020, Indian pharma company Zydus Cadila received approval from the Mexican regulatory authority for clinical trials of the biological therapy ‘Pegylated Interferon alpha-2b’ for treatment of COVID-19 with a research organisation based in the country.6 Other potential areas of economic cooperation are agriculture, biotechnology and energy.
Energy
Mexico could be a key partner in the Indian energy security as crude oil is a major component of Indian imports from the country. According to the United States (US) Energy Information Administration, Mexico is one of the largest producers of petroleum and other derivatives in the world – fourth in the Americas after the US, Canada and Brazil. Mexico is also rich in non-fossil energy sources including solar, wind and geothermal energy. Global commitments towards climate change mitigation and reduction in greenhouse gas emissions are pushing countries the world over to move away from fossil fuel to cleaner fuels. A recent report from McKinsey suggests that Mexico has the potential to become a world leader in clean energy.7 It may prove fruitful for India to expand cooperation with Mexico in the renewables sector, particularly in solar energy.
Shared Interest in Africa
In recent years, Mexico has shown interest in developing closer ties with African countries. Unlike India, which shares a historical and structured relationship with Africa, Mexican contact with the continent, particularly Sub-Saharan Africa, has been limited. Mexico’s commercial and diplomatic footprint on the continent is small. It has eight embassies in Africa – Algeria, Egypt, Ethiopia, Ghana, Kenya, Morocco, Nigeria and South Africa.8 However, looking at the economic progress in Africa in recent decades, Mexico has shown interest in expanding diplomatic presence there.9 In 2019, Deputy Foreign Minister Ventura visited Ethiopia, South Africa and Ghana to further deepen the relations.10 On its part, India has initiated triangular development cooperation with like-minded countries such as Japan, the US and the United Arab Emirates (UAE) in Africa. India could consider sharing experiences with Mexico and also future collaboration in select African countries.
Shaping the Multilateral Agenda
Mexico and India have had different viewpoints on the issue of nuclear non-proliferation. However, during Prime Minister Modi’s 2016 visit, Mexico pledged support for India's bid to be part of the Nuclear Suppliers Group (NSG).11 This was primarily in recognition of India’s commitment to the international agenda of disarmament and non- proliferation of nuclear weapons. While the NSG membership still alludes India, the Prime Minister’s visit helped in tempering Mexico’s concerns on the issue.
Similarly, the two countries have differences on the issue of United Nations Security Council (UNSC) reforms. Mexico has been a member of the United for Consensus (UfC) group that, unlike India and the Group of Four members (Japan, Germany and Brazil), opposes the expansion of permanent membership in the UNSC. The UfC had, instead, called for the expansion of non-permanent membership in the UNSC. However, both India and Mexico are non-permanent members of the Security Council for the period 2021-2022. This is a good opportunity for both countries to set aside their differences on global governance issues, and work closely on areas of mutual interest. For instance, New Delhi and Mexico City share common concern over growing traditional and non-traditional security challenges, particularly the rise of global terrorism. They can jointly push for an effective response to international terrorism, reforming the multilateral system, and the adoption of a comprehensive approach to promoting international peace and security.
The increased contact between India and Mexico also has immense potential for enhancing commercial relations between the two countries. The 70th anniversary thus provides the impetus for both countries to further deepen their partnership.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
1. Octavia Paz, In Light of India, Harvill Press, London, 1997.
Israel and UAE: From Tacit Cooperation to Full Diplomatic Ties
S. Samuel C. Rajiv
August 18, 2020
Formal diplomatic ties between Israel and the UAE, two of India’s critical strategic partners, is indeed a welcome development.
The historic decision by Israel and the United Arab Emirates (UAE) on August 13, 2020 to establish full diplomatic ties has jolted the West Asian geopolitics. After the 1979 and 1994 peace treaties with Egypt and Jordan, respectively — and a short-lived diplomatic engagement with the Islamic Republic of Mauritania (a member of the Arab League) from 1999 to 2009, this is the first time Israel has established full diplomatic ties with a Gulf Arab country.
While both Israel and the UAE have engaged in tacit cooperation in the recent past, many believed that formal diplomatic ties were quite a distance away. This was especially so since the Arab countries had committed in 2002 that they would formally recognise Israel and establish diplomatic relations only after it withdraws from the territories it occupied in the 1967 war and a Palestinian state is established.1
Israel, on its part, has agreed to suspend declaring sovereignty over territories it occupies in the West Bank, ‘at the request of President Trump’, as highlighted in the Joint Statement released by the White House.2 Prime Minister Benjamin Netanyahu in the run up to the March 2020 elections and as part of agreements with his coalition partners ahead of government formation had promised to impose Israeli sovereignty over at least 30 per cent of the West Bank by the end June 2020.3 Strong opposition from major world powers along with the COVID-19 pandemic, however, put a spoke in Netanyahu’s plans.
The UAE Ambassador to Washington, Yousef Al Otaiba, a key interlocutor with the Israelis and who was present in the White House when Donald Trump’s ‘Deal of the Century’ was unveiled in January 2020, wrote an op-ed in an Israeli newspaper in June 2020, stating that “excited talk about normalization of relations” with the UAE and other Arab states and “Israeli plans for annexation” are a contradiction. He warned that annexation will “immediately upend Israeli aspirations for improved security, economic and cultural ties with the Arab world and with UAE”.4 His op-ed is seen as a critical marker in the run up to the August 13 announcement.
Almost immediately after President Trump’s announcement, there were differing interpretations of the exact import of the Israeli undertaking relating to annexation. The UAE Foreign Minister, Anwar Gargash, insisted that the UAE move in effect dealt a ‘death blow’ to the annexation of Palestinian lands.5 Prime Minister Netanyahu however, stated that Israel has only agreed to ‘delay’ the annexation decision.6
The extent to which such issues will impact the pace at which normalisation will take place, including the establishment of respective embassies, remains to be seen. A significant Israeli-Palestinian military escalation, while it may not derail the budding diplomatic engagement, could also potentially impact the pace of the normalisation process.
Be that as it may, predictably, the Palestinians, as well as the Israeli settler leaders, have reacted with dismay.7 Even as the UAE establishes diplomatic ties with Israel, its role as a critical provider of economic assistance to the Palestinians can be expected to continue. The UAE Foreign Ministry in July 2019 pointed out that it provided over $364 million in aid to the Palestinians over the past two years.8
While Trump can rightly claim a significant foreign policy achievement in the waning months of his presidency, a key factor that brought Israel and the UAE together was Iran. While Israel insists that concerns emanating from the Iranian nuclear programme are an existential threat, the UAE has long accused Iran of playing the sectarian card to destabilise the Gulf Arab states.
The UAE and Iran also have a long-standing territorial dispute, with Iran’s occupation of the islands of Greater Tunb, Lesser Tunb and Abu Musa a sore issue. These islands were occupied by the Shah of Iran in November 1971, just two days prior to the UAE gaining independence from Britain.9
Israel has had a diplomatic presence at the offices of the International Renewable Agency (IRENA), a United Nations (UN) agency headquartered in Abu Dhabi since 2015. Reports have also pointed out that the UAE uses Israeli-sourced (from third parties) surveillance equipment and sensors in critical national infrastructure and security grids.
Both Israel and the UAE have also taken part in multilateral military exercises, even prior to the establishment of formal diplomatic relations. In March 2017, for instance, the UAE was part of INIOHOS 2017, hosted by Greece, along with Italy and Israel. More recently, in July 2020, the UAE and Israeli high-tech companies entered into an agreement to jointly fight COVID-19.10
Amid such tacit cooperation prior to the establishment of formal ties, Israel and the UAE seem to have overcome the January 2010 killing of Hamas militant leader Mahmoud al-Mabhouh in a Dubai hotel. The then Dubai police chief, Dhahi Khalfan, who had called for the arrest, via Interpol, of then Mossad chief Meir Dagan for the Mabhouh killing, has welcomed the establishment of diplomatic relations with Israel.11
The Joint Statement released by The White House on August 13 notes that Israel will make efforts to expand ties with other countries in the Arab and the Muslim world.12 Prime Minister Netanyahu in his remarks following the Trump announcement had affirmed that he expects “more Arab countries join this expanding circle of peace”.13
It is pertinent to note that the first high-level visit by an Israeli political leader to the region in the aftermath of the Madrid and the Oslo peace processes was by Prime Minister Yitzhak Rabin to Oman in 1994. Soon thereafter, his successor, Prime Minister Shimon Peres visited Oman and Qatar in 1996 to open Israeli trade offices. The offices, however, had to be shut down as Israel’s relations with the Palestinians took a turn for the worse in the aftermath of the second Intifada in 2000 and Operation Cast Lead in 2008.
More recently, Prime Minister Netanyahu made an unannounced visit to Oman in October 2018 at the invitation of the late King Sultan Qaboos. Oman’s Foreign Minister in the immediate aftermath of his visit had called on his Gulf neighbours to accept Israel as ‘a state present in the region’.14
Oman, and Bahrain — another Gulf state with antagonistic relations with Iran, can be expected to break diplomatic ice sooner than later. Incidentally, along with the UAE Ambassador Otaiba, the Omani and Bahraini ambassadors to the US were also present at the White House when Trump unveiled his peace plan in January 2020. Israel and Saudi Arabia have also interacted closely in recent times, primarily to counter concerns vis-à-vis Iran.15
Israeli analysts have also pitched for the establishment of relations with other Muslim countries like Pakistan, insisting that “Pakistani national interests dictate better relations’ with the Jewish state and that Iran was another ‘point of convergence’”.16 Indian analysts have, however, pointed out that such a move by Pakistan would lead to a “weakened support base” for its stand on Kashmir at organisations like the Organisation of Islamic Cooperation (OIC) and that Israel cannot expect to use Islamabad as a counterweight to Tehran.17
Formal relations with other big Muslim nations beyond its neighbourhood like Bangladesh and Indonesia or Malaysia cannot be expected to fructify in the absence of any significant forward movement in the Israel-Palestine dynamics. Unlike the Gulf Arab states, Iran as a common threat is not a valid proposition vis-a-vis the nation-states of South and Southeast Asia.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
It would be helpful if MoD issues a formal order addressing the concerns expressed by various stakeholders about certain aspects of the negative list, especially its impact on projects that involve foreign OEMs and the purpose of bifurcating the capital budget.
The Ministry of Defence (MoD) announced an embargo on the import of 101 items through a press release issued on August 9, 2020.1 The annexure to this press release lists a wide range of embargoed ammunition, weapon systems, radars, simulators, and other platforms. The embargo will come into effect in December 2020 for 69 of the 101 items, and in phases between December of 2021 and 2025 for the remaining 32.
The objective of this exercise in self-restraint is to apprise the Indian defence industry about the anticipated requirements of the armed forces and offer it the opportunity “to manufacture the items in the negative list by using their own design and development capabilities or adopting the technologies designed and developed by Defence Research and Development Organisation (DRDO)”.2 The Technology Perspective and Capability Roadmap (TPCR) first issued in 2013 and later revised in 2018 had a similar objective,3 which is also the case with 53 ‘Make’ projects notified by the MoD.4
A second press release issued on August 10 clarifies that “for a product to be considered as an indigenous system, the percentage of indigenous content has to meet the minimum laid down specifications”, adding another dimension to the negative list.5 Read together, the two press releases indicate that the embargoed items must not only use technologies designed and developed by the Indian defence industry or the DRDO but also meet the specified requirement of indigenous content (IC).
In effect, it all boils down to one thing: from the date the embargo takes effect in respect of a particular item on the list, it can be procured only under the ‘Buy (Indian – Indian Designed, Developed and Manufactured)’ category, or ‘Buy (IDDM)’ for short, with IC of 40 per cent as stipulated in the Defence Procurement Procedure (DPP) 2016 but proposed to be raised to 50 per cent in the draft Defence Acquisition Procedure (DAP) 2020.
All other procurement categories envisaged in DPP-2016 – ‘Buy (Indian)’, ‘Buy and Make (Indian)’, ‘Buy and Make’, and ‘Buy (Global)’, or even ‘Make’ – or in DAP 2020 which includes a new category – Buy (Global – Manufacture in India) – would be irrelevant as all of them entail, or could potentially entail, procurement of products that are not designed and developed by the Indian industry or the DRDO. In most cases processed under these categories, the basic design and development are by foreign Original Equipment Manufacturers (OEMs).
If procurement of the embargoed items under ‘Buy (IDDM)’ category indeed constitutes the core of the exercise, the promulgation of the negative list may have little additional impact on furthering the cause of self-reliance in defence – a goal which is being pursued at least for the past 27 years since a committee headed by late Dr APJ Abdul Kalam recommended a plan in 1993 “to improve our self-reliance quotient from 30% in 1992 to 70% by 2005”.6 There is enough empirical evidence to support this.
The August 9 press release says that the negative list has been prepared by the MoD “after several rounds of consultations with all stakeholders, including Army, Air Force, Navy, DRDO, Defence Public Sector Undertakings (DPSUs), Ordnance Factory Board (OFB) and (the) private industry to assess current and future capabilities of the Indian industry for manufacturing various ammunition/weapons/platforms/equipment in India”.7
This leaves no doubt that the indigenously designed and developed items that figure in the negative list, with IC of 50 per cent (as proposed in DAP 2020), will be available when the embargo comes into effect.8 That being the case, the MoD will anyway have no option but to procure these items under the ‘Buy (IDDM)’ category which is the first of the five prioritised procurement categories prescribed in DPP-2016. The existing procedure will not allow the MoD to opt for any category that is lower down in the hierarchy of prioritised categories, like ‘Buy and Make’ or ‘Buy (Global)’.
The most likely impact of the negative list would, therefore, be on the number of procurement proposals getting approved under the ‘Buy (IDDM)’ category in the coming years. This should not affect proposals involving collaboration between the Indian industry and the foreign OEMs under other procurement categories and even the Strategic Partnership Model if the proposal does not relate to any item on the negative list.
Whatever be the advantage, the MoD has boxed itself into a corner by promulgating the negative list. If, for whatever reason, an indigenously designed and developed embargoed item with requisite qualitative requirements and IC is not available in the domestic market after the embargo comes into effect, and it is operationally imperative to procure it, there may be no choice left but to waive the self-imposed restriction. This could be time consuming, depending on what procedure is laid down to deal with such a situation.
Besides promulgation of the negative list, the August 9 press release also announced the bifurcation of the capital procurement budget 2020-21 for domestic and foreign procurements, earmarking nearly Rs. 52,000 crore for domestic capital procurement under a separate budget head. This amounts to roughly 50 per cent of the total capital budget allocated to the three services (excluding the allocation for DRDO, OFB and the Director General for Quality Audit) for the current year.9
Considering that the capital budget allocated to the services this year is approximately Rs. 59,416 crore less than what the services had asked for10 and the extent to which the allocated amount is already blocked for defraying expenditure on committed liabilities, the advantage of carving out a separate budget head to back up the negative list is not quite clear. It is also not known if this bifurcation is intended to be made a permanent feature of the capital budget in the coming years.
Formal bifurcation of the capital budget into two moieties could be problematic. For example, in a situation where funds remain unspent under one segment while the other segment is in dire need of additional funds, shifting of funds will require going through the time-consuming process of re-appropriation. The proposed bifurcation would also reinforce the unseemly practice of judging the efficacy of budgetary allocations through the prism of allocation and utilisation of funds, rather than with reference to the intended outcomes, measured in terms of accretion to the capability of the armed forces.
It would help if the MoD issues a formal order addressing the concerns expressed by various stakeholders about certain aspects of the negative list, especially its impact on ongoing and forthcoming projects that involve cooperation with the foreign OEMs, as well as the purpose of bifurcating the capital budget without increasing the overall allocation, which is the core problem besetting modernisation of the armed forces.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
10.“Demand for Grants (2020-21)”, Demand No. 20, Standing Committee on Defence (2019-20), Seventeenth Lok Sabha, Seventh Report, Lok Sabha Secretariat, March 2020, Para 1.7, p. 14.
Defence Acquisition, Make In India, Defence Production, Defence Industry
The negative list of embargoed defence items is one more step towards creating a strong domestic arms industry and making India self-reliant in defence production.
Following Prime Minister Narendra Modi’s May 12 clarion call for an Atma Nirbhar Bharat (Self-Reliant India), and subsequent defence-specific reforms announced by Finance Minister Nirmala Sitharaman on May 16, the Ministry of Defence (MoD) released on August 9 a negative list of 101 defence items which are banned for import.1 The list of embargoed items, which comes days after the MoD released two more domestic-friendly documents – the draft Defence Acquisition Procedure 2020 (DAP-2020) and the draft Defence Production and Export Promotion Policy 2020 (DPEPP-2020), was promulgated along with bifurcation of the capital procurement budget between the domestic and foreign sources.
What is the significance of the negative list and how will it promote India’s self-reliance in defence? Also, what it means for the foreign companies which have so far played a major role in India’s arms acquisition?
The Negative List and its Significance
The negative list of 101 items is a comprehensive one. It includes not just simple projects like water jet fast attack craft and offshore patrol vessel, but a host of complex weapons and platforms such as assault rifles, artillery guns, missile corvettes, attack helicopters, fighter and trainer aircraft and small transport planes. Among all the listed weapons and platforms, 69 items are banned for import from December 2020, 11 from December 2021, four from December 2020, eight each from 2023 and 2024, and one (long range land attack cruise missile) from December 2025.2 The staggering timelines seem to be driven by the current developmental status of various projects being undertaken by the Defence Research and Development Organisation (DRDO), Defence Public Sector Undertakings (DPSUs), Ordnance Factory Board (OFB) and the private sector at large.
With the negative list in place, the MoD estimates that orders worth Rs four lakh crore (US$ 53 billion) will be placed on the domestic industry in the next five to seven years. Of the total value, Rs 1,40,000 crore worth of contracts are expected to be placed by the navy, while the army and air force are likely to sign deals worth Rs 1,30,000 crore each. The expected orders are over and above Rs 3.5 lakh crore (US$ 47 billion) worth of orders already placed by the three armed forces between April 2015 and August 2020.3
The importance of the list is three-fold. One, the list recognises the ability of the Indian industry, which is otherwise known for inefficiency and poor innovation, to design and produce a vast range of complex weapon systems. Second, the listed items provide order visibility to the Indian industry in so far as the forthcoming requirements of the Indian armed forces are concerned. The industry can use the information in the negative list for advance planning and eventual manufacturing in India if they choose to do so.
Third and perhaps the most important, the list has been prepared by the newly created Department of Military Affairs (DMA), headed by the Chief of Defence Staff (CDS), and not by the Department of Defence Production (DDP), which is in charge of the Indian defence industry and responsible for indigenisation.
The DMA-prepared negative list seems to flow from one of the charters of the department, i.e. promoting the use of indigenous equipment by the defence forces. Although the list is prepared through a consultative process involving all relevant stakeholders – defence forces, DRDO, DPSUs, OFB and the private sector – its utility lies in greater acceptability and ownership by the armed forces, who are the ultimate users of the equipment and who have a major say in the source and category of arms procurement.
It is important to note that unlike the DDP, the DMA (as opposed to the Department of Defence, headed by the Defence Secretary) is now the administrative department for the armed forces. Besides, unlike the DDP, the DMA can hardly be accused of favouring the local industry, particularly the DPSUs and the OFB, which are often blamed for many woes of India’s defence production. The DMA’s responsibility towards indigenisation, its supposed neutrality, and jurisdiction over the armed forces are likely to ensure better synergy between the armed forces on one hand and the R&D and production agencies on the other. Previously, the lack of synergy among the stakeholders led to institutional biases, often to the detriment of the indigenous projects.
Role of Foreign Companies
With the negative list in place, the Indian industry is clearly the biggest winner as all the identified projects are to be executed within India. This does not, however, mean that the foreign companies will not have any role in the identified projects.
It is worth mentioning that all the projects listed in the negative list are expected to be executed through one of the five domestic-industry friendly procurement categories stipulated in the MoD’s capital procurement manual (see Table 1). A particular category will be used depending on domestic capability in the design and/or indigenous content in product manufacturing. As can be seen in the Table, in all the procurement categories there is a scope for import, which is maximum 40 per cent in Buy (Indian) category and 50 per cent in other categories, except in Strategic Partnership (SP) model in which the indigenisation roadmap is a critical factor in deciding which Indian vendor would execute a contract. In other words, the foreign companies will have a role to play in the listed items, though their role would be indirect by way of being a supplier of parts, components and technology to their Indian partners.
Table 1. Procurement Category for Embargoed Items
Category
IC and Other Requirement
Buy (Indian-Indigenously Designed, Developed and Manufactured)
≥ 50% IC and indigenous design
Buy (Indian)
≥ 50% IC for indigenous design, otherwise ≥ 60% IC
Buy and Make (Indian)
≥ 50% IC of the ‘Make’ portion
Buy and Make
≥ 50% IC
Strategic Partnership Model
IC to be decided on case to case basis
Source: Compiled from “Amended Draft DAP-2020”, Ministry of Defence, Government of India, July 27, 2020.
However, the foreign companies could have a direct and major role if the government decides to float tenders to subsidiaries of foreign defence companies operating in India. With the Modi Government enhancing the defence foreign direct investment (FDI) cap from 49 per cent to 76 per cent under the automatic route, the foreign vendors through their subsidiaries would like to be treated just like any other Indian company and demand a fair chance to participate in the tendering process for certain embargoed items. If this is permitted, it would put the Indian companies in tough competition with foreign subsidiaries and may drive a better price for the armed forces.
Summing Up
The negative list is one more step taken by the Modi Government to create a strong domestic arms industry and make India self-reliant in arms production. All eyes would now be on the MoD, particularly the DMA, as to how the projects are implemented.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
Banning the sale of imported items through the CSD could supplement the various domestic industry-friendly policy measures being taken by the government for a self-reliant India.
Following Prime Minister Narendra Modi’s ‘Vocal for Local’ call and launch of Atma Nirbhar Bharat Abhiyan (Self-Reliant India Campaign), the government has taken a number of steps to promote indigenisation. The need for self-reliance has further been intensified by the Chinese belligerence and killing of Indian soldiers in eastern Ladakh and the subsequent public outcry for banning Chinese products. Some of the steps taken by the government include restricting predatory acquisition of Indian companies by China, disallowing global tender enquiries in government procurement of goods and services of up to Rs 200 crore, and banning video-sharing TikTok app and several other Chinese mobile applications which are considered inimical to India’s national security and public order.
In the defence sector, the government has also taken a number of bold steps to promote self-reliance in arms production. The Ministry of Defence (MoD) has tweaked its defence capital procurement manual and released the draft Defence Acquisition Procedures 2020 (DAP-2020) to enable greater procurement from the local industry. To provide a further fillip to indigenous arms manufacturing, the MoD has also promulgated a draft Defence Production and Export Promotion Policy 2020 (DPEPP-2020) for public comments, besides articulating a negative list of 101 items which are banned from import. An area where the MoD could push Prime Minister’s Atma Nirbhar campaign further is through the Canteen Stores Department (CSD) – an attached organisation functioning under the MoD – by mandating it to ban selling of imported items and dealing primarily with only India-made items.
Canteen Stores Department
The CSD was created in 1947-48 with the objective of providing “easy access to quality products of daily use, at prices less than market rates.”1 It caters to the uniformed personnel, ex-servicemen and their families, select paramilitary forces and defence civilians. At the time of its creation, the CSD had only four depots, a portfolio of less than 200 items and 400 Unit Run Canteens (URCs). Today, its operations cover sourcing and distribution of nearly 5,500 items to over 3,900 URCs through a network of 35 depots. The CSD, with a workforce of 2,500 and a turnover of nearly Rs 20,000 crore, is now one of the largest retail chains in India, catering to the requirements of 12 million consumers.2 Its product portfolio ranges from biscuits, shoe brushes to high-end cars and other luxurious items. The product portfolio of CSD is categorised under the following seven groups (see Table 1).
Table 1. Category of Items Sold in Canteen Stores Department
Group
Item
Group-I
Toiletries and cosmetics
Group-II
Household requisites such as electrical / electronic appliances, cookers, crockery, wall clocks, kitchenware and sewing machines
Group-III
General use items such as hosiery, bicycles, plastic goods, footwear, luggage and undergarments
Group-IV
Watches and stationery
Group-V
Liquor
Group-VI
Food and medicinal items
Group-VII (Against Firm Demand)
Televisions, audio and video systems, refrigerators, washing machines, two-wheelers, cars, tractors, cooking ranges (ovens), air conditioners, microwave ovens, etc.
Source:Clientele, Canteen Stores Department, Ministry of Defence, Government of India.
Apart from being an extremely convenient way of shopping, especially for the uniformed personnel and their families, the attraction of the URCs lies in the savings not only on the monthly grocery bill but also on the occasional purchase of luxury items. The price at which all CSD items are sold is invariably less than the prevalent market price. This is made possible by the bulk-buy at a discounted price from around 600 suppliers and rent-free retail outlets run as URCs within cantonments and other establishments. This is a big relief as the rent of the property from which such utility stores are generally run constitutes a significant overhead cost which the retailers recover from the consumers.
An equally important reason why the retail price of the items is always lower than the normal market price is that the government subsidises half of the tax levied on the products. The total tax forgone by the government is around Rs 1,200 crore in 2018-19. Though the organisation is not driven by a profit motive, the savings accruing from rent-free accommodation and tax subsidy allows it to charge a marginal profit (of 6.5 per cent on an average) on products. Significantly, despite the margin profit, the price of goods remains significantly lower than the market price in most cases. Half the profit is deposited in the Consolidated Fund of India (CFI) and the remaining half is used for the welfare activities of the beneficiaries. During five years between 2014-15 and 2018-19, the CSD deposited a total of Rs 835 crore with the government.
Imported Items in CSD
Of the 5,500 items sold by the CSD, around 420 items are imported via various Indian suppliers. It is important to note that some of the items imported are manufactured by Indian companies operating in foreign lands. The imported items are procured from around 25 countries that include Nepal, Bangladesh, Sri Lanka, Vietnam, China, the United States (US), the United Kingdom (UK), France and Switzerland. Among all the countries, however, China accounts for the bulk of the imported items. Some of the Chinese items sold in the CSD include toilet brushes, diaper pants, rice cookers, electric kettles, sandwich toasters, vacuum cleaners, sunglasses, ladies handbags, laptops and desktop computers.
With the government launching the Atma Nirbhar Bharat Abhiyan, and given the tension on the northern borders, the selling of imported items by the CSD, particularly Chinese goods, raises the question as to whether an MoD-owned organisation should be permitted to sell foreign-made items, least of all Chinese. This assumes importance considering that the taxpayers’ money is used to partly subsidise items sold by the CSD.
Banning Imported Items in CSD
It is important to note that a ban on selling imported items will not affect the interests of consumers in any manner. Suffice it to say that at present the foreign-made items sold through the CSD constitute about six to seven per cent of the total sales value. More significantly, most of the imported items sold by the CSD are luxury items, the use of most of which is limited to a few, since about 97 per cent of the consumers consist of personnel of other ranks and their family members. Moreover, almost all the imported items could be substituted by items made in India. In any case, those who are rigidly or otherwise attached to a particular foreign brand and cannot change their preference are free to access the outside commercial market to satisfy their needs.
Summing Up
In view of the Atma Nirbhar Bharat Abhiyan, the MoD may like to supplement the various domestic industry-friendly policy measure taken by the government with a ban on the sale of imported items through the CSD. While banning imported items, the government, however, could take into account the larger picture as some of the imported items are procured from Indian companies which operate outside the domestic territory. Moreover, some concession may also be given for items imported from friendly countries and with which India has preferential trade agreements.
The author gratefully acknowledges the vital inputs given by various government authorities.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
1. See History, Canteen Stores Department, Ministry of Defence, Government of India.
While the steps stipulated in draft DAP-2020 to enable smooth acquisition of systems indigenously designed by DRDO and other public sector entities are a right move, they need to be strengthened further to make procedures more robust and conducive for timely completion of projects.
Following Prime Minister Narendra Modi’s “Vocal for Local” call and launch of Atma Nirbhar Bharat Abhiyan (Self-Reliant India Campaign), the Ministry of Defence (MoD) has tweaked its capital acquisition manual to promote greater self-reliance in defence production. On July 27, it released the draft Defence Acquisition Procedure 2020 (DAP-2020) for public comments.1 The draft incorporates suggestions received from various stakeholders on a previous draft – the draft Defence Procurement Procedure (DPP-2020) – which was also put in the public domain.
Among other features, the draft DAP-2020 improvises upon Chapter III A of the draft DPP-2020, which was articulated with the intention to streamline para 72 of Chapter II of the existing DPP that facilitates the acquisition of systems designed and developed by the Defence Research and Development Organisation (DRDO), Defence Public Sector Undertakings (DPSUs) and the Ordnance Factory Board (OFB).
Will the Chapter-III A make a difference in realising Prime Minister Modi’s call for an Atma Nirbhar Bharat? The answer lies in understanding the issues surrounding the indigenous development of defence equipment by the Indian entities, particularly the DRDO, and then juxtaposing them with the procedures articulated in Chapter III A.
Since its creation in 1958, the DRDO has been at the forefront of indigenous design and development of defence equipment. The organisation, which has 24,700 employees, including 7,300 scientists, and a budget of Rs 19,327 crore (or four per cent of the MoD’s budget for 2020-21), is known for many remarkable achievements in strategic programmes, a glimpse of which was the recent successful conduct of Mission Shakti, an anti-satellite (ASAT) missile test.
However, in regard to conventional arms, there has been a deep-rooted perception that the DRDO has not been so successful, even though the organisation, with all its human resource and budgetary constraints, has designed and developed a range of complex systems including Light Combat Aircraft (LCA), Main Battle Tank Arjun, Pinaka multi-barrel rocket system, advanced towed artillery gun, and myriad other weapons and sensors. In terms of value, the DRDO-designed products (other than strategic systems), whether inducted or in the process of induction, amount to Rs 2,65,007 crore, as of 2017.2
Notwithstanding these achievements, the ultimate users, i.e., the armed forces, often complain about time and cost overruns and performance shortfall of the equipment designed and developed by the DRDO.
It is important to note that unlike strategic systems in which the DRDO has greater freedom in the developmental process, in conventional weapon systems, most of which are developed through the Mission Mode, the DRDO has to navigate through a complex web of stakeholders and labyrinthine bureaucratic processes which often work as a stumbling block.
The involvement of various stakeholders, which include armed forces and production and quality assurance agencies, brings an element of diffused accountability as agencies involved are accountable to different administrative heads. The lack of synergy among stakeholders has been commented upon by various authorities, including the Comptroller and Auditor General (CAG) of India, for its adverse impact on timely completion of projects.
More significantly, the lack of synergy has sometimes generated rigid institutional biases, leading to undue delay in placement of orders even after projects have gone through the rigorous process of development and testing. This not only demotivates scientists and the industry involved in the project but directly affects India’s self-reliance as the budget which could have been utilised to procure home-grown technologies is ultimately spent on importing arms from external sources.
The Chapter III A of the draft DAP-2020 has attempted to address some of the abovementioned constraints by articulating detailed step-by-step procedures to enable smooth acquisition of systems indigenously designed by the DRDO and other MoD-owned/controlled design houses. The chapter has identified 12 steps to be followed, ranging from identification of projects for the DRDO and others to award of contract and post-contract management. The chapter also provides for the spiral development of weapons and platform so as allow quick induction of developed products and continuous capability enhancement of the inducted system through incremental technological improvements.
Significantly also, the chapter provides for Joint Project Management Team (JPMT) to bring a semblance of synergy among various stakeholders. Comprising representatives from the concerned armed force, design house, quality assurance and maintenance agencies and the Acquisition Wing of the MoD, the JPMT is intended to facilitate smooth progress of projects.
While the abovementioned steps stipulated in the chapter are a move in the right direction, they need to be strengthened further to make procedures more robust and conducive for timely completion of projects. One key area which needs improvement pertains to the power of the JPMT. In its present form, the JPMT can, at best, discuss issues arising during the developmental process without any power to take decisions on its own to facilitate timely completion of the project. The real power is vested with higher authorities who are not directly involved in the project’s day-to-day execution. In short, the JPMT is not empowered to be responsible to deliver projects on time and to the budget.
In comparison to the suggested JPMT in Chapter III A, similar institutions in other advanced defence manufacturing countries such as the United States (US), the United Kingdom (UK) and France are real drivers of the indigenous projects with necessary powers vested with the team to take decisions in the projects’ interest. Such an empowered arrangement would be desirable to promote R&D in Indian defence
Another area that needs refinement pertains to trial and testing of the equipment. The draft chapter in the present form lays emphasis on a multi-layered trial evaluation – developmental trials, user assisted technical trials, field evaluation trials, staff evaluation, and acceptance trials - before a product is finally inducted. Such a multi-layered trial provision does not necessarily add value; rather, they consume time and money and not necessarily in the best interest of product development. An empowered JPMT with the responsibility to undertake trial evaluation in its entirety would shorten the process, quicken the developmental pace, and enable India to become Atma Nirbhar in defence technology.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
The changes proposed in the offset guidelines require a fresh look, both on conceptual and empirical grounds, as the new regime is likely to yield diminishing returns.
The draft Defence Procurement Procedure (DPP) 2020, released by the Ministry of Defence (MoD) on March 20, exempted foreign vendors from discharging offset obligation in all ‘Buy (Global)’ cases exceeding Rs 2,000 crore other than those processed on the single-vendor basis under specific Inter-governmental Agreements (IGAs), including the Foreign Military Sales (FMS) programme of the US Government (USG).
The FMS programme is administered through a standing framework devised by the USG under which individual deals are finalised between the MoD and the Defence Security Cooperation Agency (DSCA) of the USG, which in turn enters into specific contracts with the US companies for supplying the equipment to India. The offset contract in all such cases is, however, negotiated by the MoD directly with the US company supplying the equipment through FMS, as the USG does not take any responsibility for offsets as a matter of policy.
Many thought this exemption was an oversight as the draft DPP 2020 also contained thoroughly revamped offset guidelines which seemed unnecessary if the non-exempted category of foreign contracts was to be narrowed down by excluding inter-governmental deals from its purview. It turns out that the exemption was not the result of an oversight.
The exemption has been retained, along with the revamped guidelines, as a part of the revised draft DPP 2020, rechristened as Defence Acquisition Procedure (DAP) 2020 and released by the MoD on July 27. The changes proposed in the offset guidelines require a fresh look, both on conceptual and empirical grounds, as the new regime is likely to yield diminishing returns.
The offset requirement was introduced in 2005 in a very rudimentary form based on the recommendations of the Kelkar Committee, but it was only in August 2012 that the objectives of the offset policy were defined for the first time. These were later incorporated in DPP 2013 and have continued unchanged since then.
The objectives of the current policy seek “to leverage capital acquisitions to develop Indian defence industry by (i) fostering development of internationally competitive enterprises, (ii) augmenting capacity for Research, Design and Development related to defence products and services and (iii) encouraging development of synergistic sectors like civil aerospace, and internal security”.1
These objectives have been tweaked in DAP 2020 by deleting the word ‘services’ from the second objective and the third objective altogether.2 This seems to suggest that the deleted objectives have either been met or the MoD considers it futile to pursue these objectives through offsets. Neither of these inferences is correct.
Of 54 offset contracts signed till October 31, 2019, as many as 32 related to procurement programmes of the Indian Air Force (IAF), followed by 15 of the Indian Navy (IN) and seven of the Indian Army (IA).3 Considering that 60 per cent of the offset contracts related to the IAF, manufacturing and services at least in the civil aerospace sector should have shown considerable progress for the MoD to conclude that this sector does not need any further incentivisation. But there is no evidence of that. The only alternative explanation is that these sectors are not viewed as priority sectors any more for reasons that remain unexplained.
The main issue, however, is not about the tweaking of the objectives of the offset policy but the need to continue with it in view of its past performance and the prospects of the Indian industry benefitting from it in future. It is unimaginable that the MoD’s sub-committee which has proposed the changes would not have considered these factors but it is possible that it did not contemplate recommending discontinuation of the policy as it was not a part of its terms of reference.
Be that as it may, there is a case for dispensing with the policy, especially in its proposed form, before it becomes a part of DAP 2020. The main reason for suggesting this is the likely reduction in the offset business for the Indian companies, which has anyway already shrunk with the threshold for foreign contracts entailing offset obligation being raised from Rs 300 crore to Rs 2,000 crore in 2016.
Several foreign contracts processed in the recent past have been only through the IGA/FMS route. This includes mega deals not only with the US and France but also with Russia. According to a July 2016 article, 70 per cent of the deals at that point of time were through IGAs.4 There is no denying that the MoD has been more comfortable with such deals, most of which are on a single-source basis. This has also proved to be a faster way of concluding complex contracts.
Consequently, with the formalisation of the proposed exemption, coupled with the high threshold for effectuating the offset clause, and growing emphasis on procurement of equipment from the Indian companies which does not attract offsets, the number of foreign contracts entailing offset obligation would inevitably come down very significantly.
It would also prompt major exporters of arms to India to formulate schemes similar to the FMS, or nudge the MoD to go in for deals through IGAs to save their defence industry from executing offset contracts in India, which has never been easy for them, not least because of the complex process of changing offset partners, rephasing offset implementation schedule, addressing audit observations on offset claims, and delay in earning offset credits. No wonder then that the pace of execution of the offset contracts has been slow.
To put it in perspective, the cumulative value of 54 offset contracts signed till October 31, 2019 was US$ 11.80 billion with the period of performance of the longest offset contract stretching up to 2024. However, as on that date, the prime vendors were required to discharge offset obligation worth US$ 3.6 billion only, against which the value of the obligation actually discharged by them stood at US$ 1.68 billion, resulting in the imposition of penalties to the tune of US$ 38.19 million.5 This is not indicative of the success of the offset policy, which seems to be focussed more on enforcing, rather than facilitating, execution of the offset contracts.
According to a study carried out by the Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA) for the MoD, as on October 31, 2019, the offset obligation was being discharged by 171 Indian Offset Partners (IOPs). However, till that date, approximately 87 per cent of the total offset obligation had been discharged by only 15 IOPs, with the top five accounting for 51.76 per cent and the top 10 accounting for 76 per cent of the total business done till then.6
Further, according to the same study, more than 90 per cent of the offset obligation was being discharged by the prime vendors through direct purchase of products and services from the IOPs.7
Whatever be the reason – and it is arguable if the proposed changes address them - there has been no transfer of modern technology or state-of-the-art equipment to the Indian companies, or critical technologies to the Defence Research and Development Organisation (DRDO), or much foreign direct investment (FDI) in the Indian defence companies, all of which were permissible avenues for discharging the offset obligation.
With the offset business being garnered by a handful of Indian companies and prime vendors shying away from transfer of technology and equipment or even FDI, it is hard to argue that the policy has served its stated objectives and strengthened the defence industrial base in India in the last 15 years since it was introduced. The situation is further muddied by the difficulties faced by the prime vendors in executing the offset contracts and avoidable controls exercised by the MoD on them.
In the circumstances, it is important to reconsider the decision to continue with the policy, also keeping in mind that there is a cost attached to discharging the offset obligation which is indirectly borne by the MoD as a part of the overall value of the contract. To put it differently, the MoD is incurring extra cost without the returns being palpably commensurate with this investment.
Policies have to be dynamic and if the offset policy has not served its purpose – or served it only to a limited extent - in the last 15 years, despite continuous modifications, it is unlikely to produce spectacular results with its applicability anyway being restricted to fewer offset contracts. It is time the need for its continuation is subjected to dispassionate cost-benefit analysis.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
The internal and external situation on the first anniversary of the historic revocation of the special status of Jammu and Kashmir appears assuring, even as the need for safeguarding the initial gains calls for sustained efforts.
If the COVID-19 outbreak had not roiled a return to near normalcy, Jammu and Kashmir would have been breathing a lot easier with notable improvement in the security situation a year after the abrogation of Article 370 provisions.
The recently released Ministry of Home Affairs report shows a dramatic 36 per cent decline in the number of terrorist incidents since the revocation of Jammu and Kashmir’s special status on August 5, 2019.1 Meanwhile, the number of terrorists killed by security forces increased to 136 from January 1 till July 15, 2020, higher than the tally of 126 in the same months last year. On the other hand, 35 security forces personnel and 22 civilians were martyred since the beginning of this year, compared to 75 uniformed personnel and 23 civilians in the first half of 2019. There has also been only one IED (Improvised Explosive Device) attack in Kashmir since January 1, compared to six IED blasts during the same period last year.
It is also noteworthy that security operations across the districts of Pulwama, Shopian and Kulgam, seen as the nerve centre of the militancy, have dealt a debilitating blow to many terrorist groups, most notably the notorious Hizbul Mujahideen. Facing one of its bleakest hours, this three-decade-old terrorist group reportedly lost 51 of its militants in the first half of 2020,2 including its longest-serving leader Riyaz Naikoo. Close on the heels of his death came the news of the killing of Tehreek-e-Hurriyat chief Junaid Sehraie on May 20, followed by the killing of Afghan war veteran and IED expert Abdul Rehman alias ‘Fouji Bhai’ of the Jaish-e-Mohammad.3
In addition, the top political leadership from National Conference (NC) and People’s Democratic Party (PDP) has been released in multiple batches within seven months of the scrapping of Article 370 provisions, which includes the release of NC leaders Farooq Abdullah and Omar Abdullah in March 2020. However, PDP chief and former Jammu and Kashmir chief minister Mehbooba Mufti is among the few who remain under house arrest. 4
However, the upshot of these successes has been tempered by a spurt in the COVID-19 cases (over 20,000), with over 370 deaths reported by August 2, in Jammu and Kashmir. The lockdown to fight the pandemic has been extended till August 5.5
Confidence sans Complacency
The impressive gains secured by the Indian security forces clearly controvert the unwarranted claims of a few radical Kashmiri leaders and academicians last year that any legislative action taken to de-operationalise Article 370 would result in a wave of unmitigated violence across the valley and beyond.6
However, most high-ranking military officials remain wary of being overly sanguine in their assessment of the situation, which is often described as stable but sensitive. Noted journalist and security issues expert Praveen Swami believes that violence levels ebb and flow in the valley and it would be wrong to make summary judgments too soon.7 Although the counter-infiltration grid has been made more robust and effective, the General Officer Commanding (GOC) of 19 Infantry Division in Baramulla, Major General Virendra Vats, told a press conference recently that intelligence inputs indicate that up to 250-300 terrorists currently wait at launch pads across the border to infiltrate into India.8
However, Jammu and Kashmir police sources are more concerned about local recruitment, which is said to have risen in the valley. According to the Inspector-General of Police (IGP), Kashmir, Vijay Kumar, “In 2020 so far 79 youngsters have joined various terror tanzeems (organisations) while last year in 2019, 135 were identified who joined various terror groups”.9 Economic hardships in the wake of COVID-19, unemployment and opposition to the new domicile law seem to be aggravating youth resentment. Some observers even opine that the absence of political protests might be pushing more youngsters toward terrorism.
Meanwhile, terrorist groups are trying to abort any revival of the political process by targeting the emerging political leadership. On July 8, 2020, unidentified militants gunned down Bharatiya Janata Party (BJP) leader Sheikh Waseem Bari, along with his brother Umar Sultan and father Bashir Ahmad Sheikh, in Bandipora District in North Kashmir.10 Undeterred, the Jammu and Kashmir BJP has planned a 15-day-long programme from August 5 to mark the first anniversary of the revocation of the special status provisions under Article 370.11 It is believed that the political process would gather steam following the completion of the ongoing delimitation exercise, which could pave the way for fresh elections.12
The New ‘Non-Jihadi’ Terror Tack
Meanwhile, a more insidious game is being played from across the border. To counter the disarray and infighting within a discredited Hurriyat and the terminal retreat of old terrorist groups like Hizbul Mujahideen, new terror outfits with non-Arabic, ‘non-sectarian’ nomenclatures have come to the fore.
The Resistance Front (TRF) has risen to prominence as a supposedly homegrown movement, despite markings of Lashkar-e-Taiba smudged all over it.13 It seems the usual masterminds across the border now prefer English titles for their terror proxies so that such groups are more favourably received in the West than their much reviled jihadist predecessors.
On the dark web, another terror fledgeling named ‘People’s Anti-Fascist Front (PAFF)’ recently issued a video calling on the Kashmiris to carry out attacks on the Indian forces.14 Perhaps, the inspiration for this name came from the Antifa (anti-fascist) movement in the United States. Thus, the hoax of pleasing Allah has given way to placating an anti-Donald Trump wave, which it is believed would sweep the US presidential elections in November.
Dashed Hopes in Joe Biden
After being “disappointed” by the poor response to his international outreach on the Kashmir issue last year, Pakistan Prime Minister Imran Khan has announced a new plan to rake up the issue on the August 5 anniversary. Still, expectations have been managed somewhat as the planned global outreach is limited to three countries this time – Turkey, Malaysia and China, in addition to a visit to the Pakistan-occupied Kashmir (PoK) on that day.15
Following recent India-China border clashes, US Democratic Party presidential nominee Joe Biden has issued a clear statement that the India-US partnership will find “high priority” in his prospective administration, which might have dashed any Pakistani hope for a change in US policy on the Kashmir issue, with the possible coming of a new president.16
In sum, the internal and external situation on the first anniversary of the historic revocation of the special status of Jammu and Kashmir appears assuring, even as the need for safeguarding the initial gains calls for sustained efforts.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
Abe Shinzo made his mark as an astute statesman in international politics with intellectual bandwidth and a global vision to conceptualise grand strategic constructs such as the Free and Open Indo-Pacific anchored on universal values.
Abe Shinzo, one of post-war Japan’s most consequential prime ministers, departs from office almost a year ahead of his scheduled term, till September 2021. The Abe era will be defined by decisive, resolute and bold leadership that successfully repositioned Japan to step up as a stabiliser in the system, promoter of rules and custodian of global commons. He made his mark as an astute statesman in international politics with intellectual bandwidth and a global vision to conceptualise grand strategic constructs such as the Free and Open Indo-Pacific anchored on universal values. He wove together the Quad which dominates the foreign and security policy lexicon in the power corridors of major capitals in the world including Washington DC, New Delhi and Canberra. He also demonstrated Japan’s confidence in championing free trade and open markets refuting global trends against globalisation. He succeeded in putting Japan back on the global strategic map by steering monumental policy shifts in the domains of national security, foreign policy and economics.
It has been a momentous week in Japanese politics. The week began with Prime Minister Abe making history by outdoing his great uncle Sato Eisaku to become the longest-serving prime minister of Japan on August 24. And the week ended with his decision on August 28 to step down from office owing to his deteriorating health. Japan had a déjà vu moment. Earlier in 2007, Abe had decided to leave the top job for the same reason. Though he is leaving office before accomplishing some of the core agendas in his checklist, including amendment to Article 9 of the post-war Constitution, resolution of the North Korean abduction issue, and concluding a peace treaty with Russia, Abe has built a historic legacy both in national and international politics which will add value to the political repute of his family. Abe hails from one of the most influential political dynasties in Japan. He drew inspiration from former prime minister and his grandfather Kishi Nobusuke who was a key advocate of the constitutional revision movement but had to leave office as a political crisis unfolded following the revision of the US-Japan Security Treaty in 1960. His father Abe Shintaro was the foreign minister of Japan. Subsequently, in the years of his political ascendency, Abe Shinzo was mentored by then Prime Minister Koizumi Junichiro while he served as the chief cabinet secretary.
Abe presented incisive leadership while leading Japan through colossal structural challenges in its domestic landscape, in addition to reinventing its role in the international system. He assumed responsibility as the economy steered twin challenges posed by a society of centenarians affecting productivity and creating resource stress for the social security coupled with high government debt on the one hand, and the fluidity in the East Asian power balance and possible dilution of the US-led liberal international order on the other. Abe came to Nagatacho in 2012 following the chaos in crisis management over the triple disaster – the Great East Japan Earthquake, Tsunami, and the Fukushima nuclear meltdown – by the then Democratic Party of Japan (DPJ) administration. He rose to the challenge and brought in political stability and steered Japanese politics away from the culture of revolving-door prime ministers and leadership deficit. Under Abe, Japan witnessed centralisation of political power and administration around the Kantei and the Cabinet.
Abe has advanced two key national and international economic policies—‘Abenomics’ and Trans-Pacific Partnership (TPP). Driven by the colossal challenge to steer the economy exit deflation and revitalise Japan, he designed his signature programme, Abenomics, with three arrows including a bold monetary policy, flexible fiscal policy, and a growth strategy that promotes private-sector investment. Abe considered TPP as a key pillar for Abenomics and Japan’s trade strategy aimed at capturing the economic growth of the Asia-Pacific and rebuilding Japan’s economy. To this end, he pursued unpopular yet necessary reforms cutting through the deeply entrenched vested interests of the powerful lobbies, for instance, framing the nation’s ‘business versus agriculture’ debate (Keidanren/Keizai Doyukai versus the JA-Zenchu) and deregulation of the agriculture despite farmers being the bastion of conservative political support. Abe’s global leadership moment arrived once President Trump withdrew from TPP. He stepped in as the flag bearer of free trade, especially after effectively saving the TPP-11 and concluding the Economic Partnership Agreement with the European Union (EU) following Brexit. From agenda-setting with the Osaka Track for data governance at the G20 to the Ise-Shima Principles for Promoting Quality Infrastructure Investment at G7, Abe has offered Japanese solutions to key issues.
Navigating economic stagnation, a demographic dilemma and stern immigration controls, Abe pushed for difficult structural reforms. His ‘womenomics’ became the buzzword, an idea pushed by Kathy Matsui,1 to boost the gross domestic product (GDP) by bringing in more women into the labour force. Also, easing barriers to allow ‘Specified Skilled Workers’ while managing severe labour shortage in designated sectors triggered by the demographic challenge (ageing population and shrinking birth rates) despite the traditional focus on racial homogeneity, and thus framing the political discourse as gaikokujin no ukeire (acceptance of foreigners) and not imin no ukeire (acceptance of immigrants)2 as Japan’s population is projected to decline by one-fifth to around 100 million and dependency ratio rising to about 75 per cent by 2050.
The Abe era will be underscored by his resolve to decisively define Japan’s maiden national security strategy under the banner of Proactive Contribution to Peace. Even though his cherished ambition to amend the post-war constitution remained unfulfilled, he has worked relentlessly to reorient Japan’s security policy. He is leaving behind a Japan whose evolving character as a security actor is a key determinant in shaping the strategic equilibrium of the Indo-Pacific. From instituting the National Security Council, reinterpreting Article 9 and expanding the scope of the right to collective self-defence to debating “enemy-base strike” capability and its implications on the broad contours of the US-Japan alliance so far defined by the spear and shield strategy; from strategising aid to support maritime capacity building of member states of the Association of Southeast Asian Nations (ASEAN) to scrapping the defence spending limit of one per cent of GDP and easing the three principles of arms export to pushing defence-related investments with the establishment of Acquisition, Technology & Logistics Agency – Abe’s report card is impressive and may remain unmatched for some time to come.
Abe has also positioned Japan as a potent middle power invested in upholding an international order based on the rule of law, free trade, and multilateralism. As a key stakeholder in shaping the Indo-Pacific order, Abe emphasised on upholding a rules-based maritime order, pushing quality infrastructure financing, and championing trade liberalisation. He pragmatically adjusted Japan’s Free and Open Indo-Pacific “Strategy” into a “Vision” in order to avoid projecting it as a divisive strategy in order to amass support from ASEAN.3 Approach to Indo-Pacific is anchored on ASEAN centrality and Vientiane Vision focussing on Southeast Asia on one hand and African ownership in the Tokyo International Conference of African Development (TICAD) process on the other. He has shaped conversation with key Indo-Pacific powers advancing strategic coordination at the Quad Plus, Blue dot network on high-quality infrastructure, D-10 alliance of democracies on 5G, Global Partnership on Artificial Intelligence (GPAI), and also setting the stage for Japan’s entry into the Five Eye intelligence alliance.
Abe had a delicate balancing act in advancing Japan’s interest in the China-Japan-US triangle.4 China’s arrival as a major actor in the international system, alliance management under the Donald Trump presidency, and hedging against the US abandonment challenged his administration. Keeping US-Japan alliance at the core, Abe wove together a network of allies and strategic partnerships with maritime democracies in the Indo-Pacific. In this regard, India featured as a priority in Abe’s strategic thinking5 and is weighed as a key component in his idea of Asia, as argued in his book Utsukushii kuni e (Toward a Beautiful Country). As the rationale of value-oriented foreign policy gained traction, India has been accorded space in Japan’s strategic constructs.6 His political charisma has worked well in building a personal rapport with world leaders from President Trump to Prime Minister Modi. The optics of Trump-Abe golf diplomacy or Modi-Abe ‘Ganga Aarti’ will remain in public memory in decades to come. While he made good friends across the world capitals, his relations with East Asian leaders were weighed down by nationalism and historical baggage on the heels of the 75th anniversary of the Second World War.
History will also remember Prime Minister Abe’s tenure which oversaw Japan’s transition to the historic Reiwa era following the first succession to the Imperial throne from a living Emperor in two centuries. Moreover, he successfully realised Japan’s Olympics dream until it wasn’t for the global pandemic. However, 2020 did not unfold the way Abe had planned it. This year had a packed schedule for Abe with high profile events including Chinese President Xi Jinping’s state visit to Japan and the 2020 Tokyo Olympics. But the diplomatic calendar suffered due to the global pandemic. In subsequent months, erosion in approval ratings influenced by the handling of the COVID-19 outbreak, in addition to ongoing political corruption scandals, adversely hurt the Abe administration.
Nevertheless, Abe has been a towering political figure in Japan. Leading Japan after Abe will demand statesmanship, political vision, and innovative policy responses. Amidst a pandemic, stable and strong leadership is critical to avoid political dysfunction when dealing with challenges across the spectrum of economics to demographics to national security. As Nagatacho gets ready for a post-Abe leadership and the Liberal Democratic Party (LDP) prepares for an election in September, contenders for the position include Chairman of the LDP’s Policy Research Council Kishida Fumio, former Defence Minister Ishiba Shigeru and Chief Cabinet Secretary Suga Yoshihide.7 Suga, often considered an Abe loyalist and confidant, may garner favourable support in factional politics.8 Irrespective of how the factional politics will shape the post-Abe leadership, Japanese politics cannot afford to slide back to its legacy of revolving-door prime ministers and leadership deficit which will deeply impinge on key policy matters. Sustainable and effective political leadership is indispensable for good governance and in steering the country through its daunting demographic, economic, security and foreign policy challenges in the post-COVID order.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
The normalisation of relations between the UAE and Israel is a historic development and a step forward in the rapprochement between the Arab Gulf and Israel.
The US-Israel-UAE joint statement of August 13 might have come as a surprise for many, but for those following the trajectory of the growing contacts between the Arab Gulf States and Israel, this was long in the making. Released by President Donald Trump, the joint statement promises to normalise diplomatic, political, economic and cultural relations between Israel and the United Arab Emirates (UAE), strengthening the already growing political and diplomatic contacts between the two countries.1 The question, however, is how will it impact the complicated Israeli-Palestinian conflict and whether it will have any effect on the Israeli-Arab relations. Though only time will tell the true efficacy of the move, it is likely to positively impact the Gulf-Israel relations but unlikely to significantly alter the course of the Israeli-Palestinian conflict.
Notwithstanding the significance of the move, the timing of the announcement is important. It underlines President Trump’s attempt to show a tangible foreign policy achievement ahead of his re-election bid for the second term, especially given that the mismanagement of the COVID-19 pandemic has given Democratic contender Joe Biden a slight edge over him. The August 13 announcement might not help Trump’s effort to revive the Middle East peace process but it can be counted as an achievement for the “Deal of the Century” that the Trump Administration has for the last three and half years invested significant resources to bring to reality.
The announcement is indeed a momentous development akin to the 1978 Egypt-Israel peace or the Camp David Accord, as it came to be known. However, the likely impact of the UAE-Israel normalisation can be even bigger for the Arab-Israeli relations. This is especially true as the Camp David Accord only led to a Cold Peace between Israel and Egypt and did not gain much traction in the Arab world. But given the fact that some Arab Gulf countries have already expressed their support for Trump’s “Peace to Prosperity”2 plan and have quietly developed contacts with Israel, three things are quite clear.
Firstly, this is the clearest sign of change in the instance of the Arab Gulf towards Israel. The process began post-Arab Spring and the sharpening geopolitics in the Middle East (or West Asia) further expedited it. The threat perception among Saudi Arabia, the UAE and Bahrain vis-à-vis Iran’s regional policy and Israeli reading of Iran as a national security challenge led to increased security-oriented contacts between the Arab Gulf states and Israel. This was followed up with secret meetings between Israeli and Gulf officials as well as members of the royal families. While initially meetings were organised secretly in third countries, later they began to be held in public in Israeli or Arab territories. For example, a secret meeting between Emirati Foreign Minister Abdullah bin Zayed and Israeli Prime Minister Benjamin Netanyahu took place in Washington in 2012. The meeting remained a secret until it was reported in the Israeli media in 2017.3
Fast forward four years, in July 2016, an unofficial Saudi delegation led by a former Saudi military officer, Anwar Eshki, visited Israel to discuss prospects for the Arab Peace Initiative.4 In October 2018, Netanyahu visited Oman and met Sultan Qaboos while the Israeli Culture and Sports Minister, Miri Regev, visited Abu Dhabi along with the national Judo team participating in a Judo championship. Trump Administration’s effort to enlist the support of Arab Gulf States in reviving the Middle East peace process added to the rapprochement between the Gulf countries and Israel.
Secondly, the Gulf countries have worked towards overcoming the anti-Israel public opinion prevalent in the Arab-Islamic world. They have used various tools including popular culture, social media, and local influencers to moderate the public opinion that has largely been antagonistic towards Israel. For example, the Arabic entertainment channel, MBC, broadcast a television drama series Umm Haroun during Ramadan 2020 which explored the taboo issue of Jews who lived in the Arabian Peninsula.5 Similarly, Arabic newspapers owned or supported by members of the Saudi royal family, such as Asharq al-Awsat, have published columns advocating better ties with Israel to counter the Iranian threat.6 Considered a taboo until a decade ago, the public discourse supportive of better ties with Israel and in favour of improving Jewish-Muslim relations might not have been possible without the state patronage.
Thirdly, other Gulf countries especially Bahrain and Oman who have come out strongly in support of the Emirati move to normalise relations with Israel might follow suit. Saudi Arabia, Morocco and Qatar who also maintain unofficial contacts with Israel might eventually change their official position vis-à-vis Israel. Once the UAE-Israel normalisation agreement is formally signed, the Emirates will become the fourth Arab country to have done so. However, unlike earlier efforts at normalising ties between Israel and Jordan, Egypt and Mauritania7, which did not change the collective position of the Arab world, the normalisation of ties with the UAE, which is emerging as one of the most influential regional states, can be a breakthrough especially in terms of the Gulf-Israel rapprochement.
Notwithstanding the significance of the announcement for the Arab-Israel relations, the normalisation of the UAE-Israeli ties is unlikely to dramatically alter the course of the Israeli-Palestinian conflict. All Palestinian factions including the Palestinian Authority led by Mahmoud Abbas and Hamas that rule the Gaza Strip have been antithetical to the Gulf-Israeli rapprochement, and have condemned all moves by the Trump Administration to revive the peace process as biased in favour of Israel. They have reacted sharply to the August 13 joint statement and have condemned the Emirati move as a decision taken “at the expense of the legitimate Palestinian national rights.”8 Within Israel, the constituency supportive of the internationally accepted two-state solution based on the 1967 boundaries has become increasingly slender. It means that for any Israeli leader it will be difficult to give up claims over the West Bank, popularly referred to as Judea and Samaria in Israeli discourse. Though Netanyahu agreed to defer the West Bank annexation plan in lieu of this “diplomatic breakthrough,” it is unlikely to permanently alter Israeli claims over the Jordan Valley. This is especially so because it is critical to the Israeli security. It will also mean end of settlements in the disputed areas that will prove costly for any Israeli leader.
The normalisation of relations between the UAE and Israel is a historic development and a step forward in the rapprochement between the Arab Gulf and Israel. It can as well have a far-reaching impact on the regional geopolitics. For the Trump Administration, it can count as a significant foreign policy achievement, and for Netanyahu, it can be a gamble for his political survival. But, as far as the Israeli-Palestinian conflict is concerned, this may not be the breakthrough towards a lasting peace.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
India and Mexico can jointly push for an effective response to international terrorism, reforming the multilateral system, and the adoption of a comprehensive approach to promoting international peace and security.
On August 1, 2020, India and Mexico ushered in the 70th anniversary of the establishment of diplomatic relations between the two countries. Mexico was the first country in Latin America to establish diplomatic relations with India in 1950. Despite the vast geographical distance that separates them, the two countries share certain commonalities. Both are democracies, diverse societies and share similar development priorities. This view is echoed by Octavio Paz, Nobel Laureate and former Mexican Ambassador to India, “From the beginning, everything that I saw inadvertently evoked forgotten images of Mexico. The strangeness of India brought to mind that other strangeness: my own country”.1
Over the years, Mexico and India have developed a warm and cordial relationship. In 2007, the two countries upgraded their bilateral relations to a “Privileged Partnership”. In 2016, during Prime Minister Narendra Modi’s visit to Mexico, the two countries decided to develop a roadmap to upgrade their relationship to a “Strategic Partnership”.2 This was followed by an exchange of visits at the ministerial level, including a visit to India by Mexican Minister of Energy Rocio Nahle and Deputy Minister of Foreign Affairs Julián Ventura Valero. Earlier this month, Indian Foreign Secretary Harsh Vardhan Shringla and Mexican Deputy Foreign Minister Valero exchanged views on several issues including the economic impact of COVID-19 pandemic and the need to further expand the bilateral relations.3
The 70th anniversary of the establishment of diplomatic relations provides an opportunity to enhance cooperation in four key areas, which are discussed below:
Economy
Mexico is currently India’s largest trading partner in Latin America. In 2018-19, it accounted for almost a quarter of India’s trade with the region. At the same time, India is currently Mexico’s ninth-most important global trading partner. The last decade has seen a spurt in trade between the two countries, which has grown from around $5 billion in 2015-16 to $9.4 billion in 2018-19.4 Crude oil dominates India’s imports from Mexico. It also imports electrical goods and machinery, electronic equipment and auto parts. India’s exports to Mexico comprise mainly of vehicles, organic chemicals, aluminium products, iron and steel, and ceramic products. Indian companies have so far invested around $3 billion in Mexico.5
The rise in trade and investment follows Prime Minister Modi’s visit to Mexico in 2016. It can also be attributed to the immense significance of Mexico as a gateway to both North and Latin America. A large number of Indian information technology (IT) and pharmaceutical companies have set up joint ventures in Mexico. Following the COVID-19 pandemic, there has been a surge in cooperation in the pharmaceutical sector. In July 2020, Indian pharma company Zydus Cadila received approval from the Mexican regulatory authority for clinical trials of the biological therapy ‘Pegylated Interferon alpha-2b’ for treatment of COVID-19 with a research organisation based in the country.6 Other potential areas of economic cooperation are agriculture, biotechnology and energy.
Energy
Mexico could be a key partner in the Indian energy security as crude oil is a major component of Indian imports from the country. According to the United States (US) Energy Information Administration, Mexico is one of the largest producers of petroleum and other derivatives in the world – fourth in the Americas after the US, Canada and Brazil. Mexico is also rich in non-fossil energy sources including solar, wind and geothermal energy. Global commitments towards climate change mitigation and reduction in greenhouse gas emissions are pushing countries the world over to move away from fossil fuel to cleaner fuels. A recent report from McKinsey suggests that Mexico has the potential to become a world leader in clean energy.7 It may prove fruitful for India to expand cooperation with Mexico in the renewables sector, particularly in solar energy.
Shared Interest in Africa
In recent years, Mexico has shown interest in developing closer ties with African countries. Unlike India, which shares a historical and structured relationship with Africa, Mexican contact with the continent, particularly Sub-Saharan Africa, has been limited. Mexico’s commercial and diplomatic footprint on the continent is small. It has eight embassies in Africa – Algeria, Egypt, Ethiopia, Ghana, Kenya, Morocco, Nigeria and South Africa.8 However, looking at the economic progress in Africa in recent decades, Mexico has shown interest in expanding diplomatic presence there.9 In 2019, Deputy Foreign Minister Ventura visited Ethiopia, South Africa and Ghana to further deepen the relations.10 On its part, India has initiated triangular development cooperation with like-minded countries such as Japan, the US and the United Arab Emirates (UAE) in Africa. India could consider sharing experiences with Mexico and also future collaboration in select African countries.
Shaping the Multilateral Agenda
Mexico and India have had different viewpoints on the issue of nuclear non-proliferation. However, during Prime Minister Modi’s 2016 visit, Mexico pledged support for India's bid to be part of the Nuclear Suppliers Group (NSG).11 This was primarily in recognition of India’s commitment to the international agenda of disarmament and non- proliferation of nuclear weapons. While the NSG membership still alludes India, the Prime Minister’s visit helped in tempering Mexico’s concerns on the issue.
Similarly, the two countries have differences on the issue of United Nations Security Council (UNSC) reforms. Mexico has been a member of the United for Consensus (UfC) group that, unlike India and the Group of Four members (Japan, Germany and Brazil), opposes the expansion of permanent membership in the UNSC. The UfC had, instead, called for the expansion of non-permanent membership in the UNSC. However, both India and Mexico are non-permanent members of the Security Council for the period 2021-2022. This is a good opportunity for both countries to set aside their differences on global governance issues, and work closely on areas of mutual interest. For instance, New Delhi and Mexico City share common concern over growing traditional and non-traditional security challenges, particularly the rise of global terrorism. They can jointly push for an effective response to international terrorism, reforming the multilateral system, and the adoption of a comprehensive approach to promoting international peace and security.
The increased contact between India and Mexico also has immense potential for enhancing commercial relations between the two countries. The 70th anniversary thus provides the impetus for both countries to further deepen their partnership.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
Formal diplomatic ties between Israel and the UAE, two of India’s critical strategic partners, is indeed a welcome development.
The historic decision by Israel and the United Arab Emirates (UAE) on August 13, 2020 to establish full diplomatic ties has jolted the West Asian geopolitics. After the 1979 and 1994 peace treaties with Egypt and Jordan, respectively — and a short-lived diplomatic engagement with the Islamic Republic of Mauritania (a member of the Arab League) from 1999 to 2009, this is the first time Israel has established full diplomatic ties with a Gulf Arab country.
While both Israel and the UAE have engaged in tacit cooperation in the recent past, many believed that formal diplomatic ties were quite a distance away. This was especially so since the Arab countries had committed in 2002 that they would formally recognise Israel and establish diplomatic relations only after it withdraws from the territories it occupied in the 1967 war and a Palestinian state is established.1
Israel, on its part, has agreed to suspend declaring sovereignty over territories it occupies in the West Bank, ‘at the request of President Trump’, as highlighted in the Joint Statement released by the White House.2 Prime Minister Benjamin Netanyahu in the run up to the March 2020 elections and as part of agreements with his coalition partners ahead of government formation had promised to impose Israeli sovereignty over at least 30 per cent of the West Bank by the end June 2020.3 Strong opposition from major world powers along with the COVID-19 pandemic, however, put a spoke in Netanyahu’s plans.
The UAE Ambassador to Washington, Yousef Al Otaiba, a key interlocutor with the Israelis and who was present in the White House when Donald Trump’s ‘Deal of the Century’ was unveiled in January 2020, wrote an op-ed in an Israeli newspaper in June 2020, stating that “excited talk about normalization of relations” with the UAE and other Arab states and “Israeli plans for annexation” are a contradiction. He warned that annexation will “immediately upend Israeli aspirations for improved security, economic and cultural ties with the Arab world and with UAE”.4 His op-ed is seen as a critical marker in the run up to the August 13 announcement.
Almost immediately after President Trump’s announcement, there were differing interpretations of the exact import of the Israeli undertaking relating to annexation. The UAE Foreign Minister, Anwar Gargash, insisted that the UAE move in effect dealt a ‘death blow’ to the annexation of Palestinian lands.5 Prime Minister Netanyahu however, stated that Israel has only agreed to ‘delay’ the annexation decision.6
The extent to which such issues will impact the pace at which normalisation will take place, including the establishment of respective embassies, remains to be seen. A significant Israeli-Palestinian military escalation, while it may not derail the budding diplomatic engagement, could also potentially impact the pace of the normalisation process.
Be that as it may, predictably, the Palestinians, as well as the Israeli settler leaders, have reacted with dismay.7 Even as the UAE establishes diplomatic ties with Israel, its role as a critical provider of economic assistance to the Palestinians can be expected to continue. The UAE Foreign Ministry in July 2019 pointed out that it provided over $364 million in aid to the Palestinians over the past two years.8
While Trump can rightly claim a significant foreign policy achievement in the waning months of his presidency, a key factor that brought Israel and the UAE together was Iran. While Israel insists that concerns emanating from the Iranian nuclear programme are an existential threat, the UAE has long accused Iran of playing the sectarian card to destabilise the Gulf Arab states.
The UAE and Iran also have a long-standing territorial dispute, with Iran’s occupation of the islands of Greater Tunb, Lesser Tunb and Abu Musa a sore issue. These islands were occupied by the Shah of Iran in November 1971, just two days prior to the UAE gaining independence from Britain.9
Israel has had a diplomatic presence at the offices of the International Renewable Agency (IRENA), a United Nations (UN) agency headquartered in Abu Dhabi since 2015. Reports have also pointed out that the UAE uses Israeli-sourced (from third parties) surveillance equipment and sensors in critical national infrastructure and security grids.
Both Israel and the UAE have also taken part in multilateral military exercises, even prior to the establishment of formal diplomatic relations. In March 2017, for instance, the UAE was part of INIOHOS 2017, hosted by Greece, along with Italy and Israel. More recently, in July 2020, the UAE and Israeli high-tech companies entered into an agreement to jointly fight COVID-19.10
Amid such tacit cooperation prior to the establishment of formal ties, Israel and the UAE seem to have overcome the January 2010 killing of Hamas militant leader Mahmoud al-Mabhouh in a Dubai hotel. The then Dubai police chief, Dhahi Khalfan, who had called for the arrest, via Interpol, of then Mossad chief Meir Dagan for the Mabhouh killing, has welcomed the establishment of diplomatic relations with Israel.11
The Joint Statement released by The White House on August 13 notes that Israel will make efforts to expand ties with other countries in the Arab and the Muslim world.12 Prime Minister Netanyahu in his remarks following the Trump announcement had affirmed that he expects “more Arab countries join this expanding circle of peace”.13
It is pertinent to note that the first high-level visit by an Israeli political leader to the region in the aftermath of the Madrid and the Oslo peace processes was by Prime Minister Yitzhak Rabin to Oman in 1994. Soon thereafter, his successor, Prime Minister Shimon Peres visited Oman and Qatar in 1996 to open Israeli trade offices. The offices, however, had to be shut down as Israel’s relations with the Palestinians took a turn for the worse in the aftermath of the second Intifada in 2000 and Operation Cast Lead in 2008.
More recently, Prime Minister Netanyahu made an unannounced visit to Oman in October 2018 at the invitation of the late King Sultan Qaboos. Oman’s Foreign Minister in the immediate aftermath of his visit had called on his Gulf neighbours to accept Israel as ‘a state present in the region’.14
Oman, and Bahrain — another Gulf state with antagonistic relations with Iran, can be expected to break diplomatic ice sooner than later. Incidentally, along with the UAE Ambassador Otaiba, the Omani and Bahraini ambassadors to the US were also present at the White House when Trump unveiled his peace plan in January 2020. Israel and Saudi Arabia have also interacted closely in recent times, primarily to counter concerns vis-à-vis Iran.15
Israeli analysts have also pitched for the establishment of relations with other Muslim countries like Pakistan, insisting that “Pakistani national interests dictate better relations’ with the Jewish state and that Iran was another ‘point of convergence’”.16 Indian analysts have, however, pointed out that such a move by Pakistan would lead to a “weakened support base” for its stand on Kashmir at organisations like the Organisation of Islamic Cooperation (OIC) and that Israel cannot expect to use Islamabad as a counterweight to Tehran.17
Formal relations with other big Muslim nations beyond its neighbourhood like Bangladesh and Indonesia or Malaysia cannot be expected to fructify in the absence of any significant forward movement in the Israel-Palestine dynamics. Unlike the Gulf Arab states, Iran as a common threat is not a valid proposition vis-a-vis the nation-states of South and Southeast Asia.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
It would be helpful if MoD issues a formal order addressing the concerns expressed by various stakeholders about certain aspects of the negative list, especially its impact on projects that involve foreign OEMs and the purpose of bifurcating the capital budget.
The Ministry of Defence (MoD) announced an embargo on the import of 101 items through a press release issued on August 9, 2020.1 The annexure to this press release lists a wide range of embargoed ammunition, weapon systems, radars, simulators, and other platforms. The embargo will come into effect in December 2020 for 69 of the 101 items, and in phases between December of 2021 and 2025 for the remaining 32.
The objective of this exercise in self-restraint is to apprise the Indian defence industry about the anticipated requirements of the armed forces and offer it the opportunity “to manufacture the items in the negative list by using their own design and development capabilities or adopting the technologies designed and developed by Defence Research and Development Organisation (DRDO)”.2 The Technology Perspective and Capability Roadmap (TPCR) first issued in 2013 and later revised in 2018 had a similar objective,3 which is also the case with 53 ‘Make’ projects notified by the MoD.4
A second press release issued on August 10 clarifies that “for a product to be considered as an indigenous system, the percentage of indigenous content has to meet the minimum laid down specifications”, adding another dimension to the negative list.5 Read together, the two press releases indicate that the embargoed items must not only use technologies designed and developed by the Indian defence industry or the DRDO but also meet the specified requirement of indigenous content (IC).
In effect, it all boils down to one thing: from the date the embargo takes effect in respect of a particular item on the list, it can be procured only under the ‘Buy (Indian – Indian Designed, Developed and Manufactured)’ category, or ‘Buy (IDDM)’ for short, with IC of 40 per cent as stipulated in the Defence Procurement Procedure (DPP) 2016 but proposed to be raised to 50 per cent in the draft Defence Acquisition Procedure (DAP) 2020.
All other procurement categories envisaged in DPP-2016 – ‘Buy (Indian)’, ‘Buy and Make (Indian)’, ‘Buy and Make’, and ‘Buy (Global)’, or even ‘Make’ – or in DAP 2020 which includes a new category – Buy (Global – Manufacture in India) – would be irrelevant as all of them entail, or could potentially entail, procurement of products that are not designed and developed by the Indian industry or the DRDO. In most cases processed under these categories, the basic design and development are by foreign Original Equipment Manufacturers (OEMs).
If procurement of the embargoed items under ‘Buy (IDDM)’ category indeed constitutes the core of the exercise, the promulgation of the negative list may have little additional impact on furthering the cause of self-reliance in defence – a goal which is being pursued at least for the past 27 years since a committee headed by late Dr APJ Abdul Kalam recommended a plan in 1993 “to improve our self-reliance quotient from 30% in 1992 to 70% by 2005”.6 There is enough empirical evidence to support this.
The August 9 press release says that the negative list has been prepared by the MoD “after several rounds of consultations with all stakeholders, including Army, Air Force, Navy, DRDO, Defence Public Sector Undertakings (DPSUs), Ordnance Factory Board (OFB) and (the) private industry to assess current and future capabilities of the Indian industry for manufacturing various ammunition/weapons/platforms/equipment in India”.7
This leaves no doubt that the indigenously designed and developed items that figure in the negative list, with IC of 50 per cent (as proposed in DAP 2020), will be available when the embargo comes into effect.8 That being the case, the MoD will anyway have no option but to procure these items under the ‘Buy (IDDM)’ category which is the first of the five prioritised procurement categories prescribed in DPP-2016. The existing procedure will not allow the MoD to opt for any category that is lower down in the hierarchy of prioritised categories, like ‘Buy and Make’ or ‘Buy (Global)’.
The most likely impact of the negative list would, therefore, be on the number of procurement proposals getting approved under the ‘Buy (IDDM)’ category in the coming years. This should not affect proposals involving collaboration between the Indian industry and the foreign OEMs under other procurement categories and even the Strategic Partnership Model if the proposal does not relate to any item on the negative list.
Whatever be the advantage, the MoD has boxed itself into a corner by promulgating the negative list. If, for whatever reason, an indigenously designed and developed embargoed item with requisite qualitative requirements and IC is not available in the domestic market after the embargo comes into effect, and it is operationally imperative to procure it, there may be no choice left but to waive the self-imposed restriction. This could be time consuming, depending on what procedure is laid down to deal with such a situation.
Besides promulgation of the negative list, the August 9 press release also announced the bifurcation of the capital procurement budget 2020-21 for domestic and foreign procurements, earmarking nearly Rs. 52,000 crore for domestic capital procurement under a separate budget head. This amounts to roughly 50 per cent of the total capital budget allocated to the three services (excluding the allocation for DRDO, OFB and the Director General for Quality Audit) for the current year.9
Considering that the capital budget allocated to the services this year is approximately Rs. 59,416 crore less than what the services had asked for10 and the extent to which the allocated amount is already blocked for defraying expenditure on committed liabilities, the advantage of carving out a separate budget head to back up the negative list is not quite clear. It is also not known if this bifurcation is intended to be made a permanent feature of the capital budget in the coming years.
Formal bifurcation of the capital budget into two moieties could be problematic. For example, in a situation where funds remain unspent under one segment while the other segment is in dire need of additional funds, shifting of funds will require going through the time-consuming process of re-appropriation. The proposed bifurcation would also reinforce the unseemly practice of judging the efficacy of budgetary allocations through the prism of allocation and utilisation of funds, rather than with reference to the intended outcomes, measured in terms of accretion to the capability of the armed forces.
It would help if the MoD issues a formal order addressing the concerns expressed by various stakeholders about certain aspects of the negative list, especially its impact on ongoing and forthcoming projects that involve cooperation with the foreign OEMs, as well as the purpose of bifurcating the capital budget without increasing the overall allocation, which is the core problem besetting modernisation of the armed forces.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
The negative list of embargoed defence items is one more step towards creating a strong domestic arms industry and making India self-reliant in defence production.
Following Prime Minister Narendra Modi’s May 12 clarion call for an Atma Nirbhar Bharat (Self-Reliant India), and subsequent defence-specific reforms announced by Finance Minister Nirmala Sitharaman on May 16, the Ministry of Defence (MoD) released on August 9 a negative list of 101 defence items which are banned for import.1 The list of embargoed items, which comes days after the MoD released two more domestic-friendly documents – the draft Defence Acquisition Procedure 2020 (DAP-2020) and the draft Defence Production and Export Promotion Policy 2020 (DPEPP-2020), was promulgated along with bifurcation of the capital procurement budget between the domestic and foreign sources.
What is the significance of the negative list and how will it promote India’s self-reliance in defence? Also, what it means for the foreign companies which have so far played a major role in India’s arms acquisition?
The Negative List and its Significance
The negative list of 101 items is a comprehensive one. It includes not just simple projects like water jet fast attack craft and offshore patrol vessel, but a host of complex weapons and platforms such as assault rifles, artillery guns, missile corvettes, attack helicopters, fighter and trainer aircraft and small transport planes. Among all the listed weapons and platforms, 69 items are banned for import from December 2020, 11 from December 2021, four from December 2020, eight each from 2023 and 2024, and one (long range land attack cruise missile) from December 2025.2 The staggering timelines seem to be driven by the current developmental status of various projects being undertaken by the Defence Research and Development Organisation (DRDO), Defence Public Sector Undertakings (DPSUs), Ordnance Factory Board (OFB) and the private sector at large.
With the negative list in place, the MoD estimates that orders worth Rs four lakh crore (US$ 53 billion) will be placed on the domestic industry in the next five to seven years. Of the total value, Rs 1,40,000 crore worth of contracts are expected to be placed by the navy, while the army and air force are likely to sign deals worth Rs 1,30,000 crore each. The expected orders are over and above Rs 3.5 lakh crore (US$ 47 billion) worth of orders already placed by the three armed forces between April 2015 and August 2020.3
The importance of the list is three-fold. One, the list recognises the ability of the Indian industry, which is otherwise known for inefficiency and poor innovation, to design and produce a vast range of complex weapon systems. Second, the listed items provide order visibility to the Indian industry in so far as the forthcoming requirements of the Indian armed forces are concerned. The industry can use the information in the negative list for advance planning and eventual manufacturing in India if they choose to do so.
Third and perhaps the most important, the list has been prepared by the newly created Department of Military Affairs (DMA), headed by the Chief of Defence Staff (CDS), and not by the Department of Defence Production (DDP), which is in charge of the Indian defence industry and responsible for indigenisation.
The DMA-prepared negative list seems to flow from one of the charters of the department, i.e. promoting the use of indigenous equipment by the defence forces. Although the list is prepared through a consultative process involving all relevant stakeholders – defence forces, DRDO, DPSUs, OFB and the private sector – its utility lies in greater acceptability and ownership by the armed forces, who are the ultimate users of the equipment and who have a major say in the source and category of arms procurement.
It is important to note that unlike the DDP, the DMA (as opposed to the Department of Defence, headed by the Defence Secretary) is now the administrative department for the armed forces. Besides, unlike the DDP, the DMA can hardly be accused of favouring the local industry, particularly the DPSUs and the OFB, which are often blamed for many woes of India’s defence production. The DMA’s responsibility towards indigenisation, its supposed neutrality, and jurisdiction over the armed forces are likely to ensure better synergy between the armed forces on one hand and the R&D and production agencies on the other. Previously, the lack of synergy among the stakeholders led to institutional biases, often to the detriment of the indigenous projects.
Role of Foreign Companies
With the negative list in place, the Indian industry is clearly the biggest winner as all the identified projects are to be executed within India. This does not, however, mean that the foreign companies will not have any role in the identified projects.
It is worth mentioning that all the projects listed in the negative list are expected to be executed through one of the five domestic-industry friendly procurement categories stipulated in the MoD’s capital procurement manual (see Table 1). A particular category will be used depending on domestic capability in the design and/or indigenous content in product manufacturing. As can be seen in the Table, in all the procurement categories there is a scope for import, which is maximum 40 per cent in Buy (Indian) category and 50 per cent in other categories, except in Strategic Partnership (SP) model in which the indigenisation roadmap is a critical factor in deciding which Indian vendor would execute a contract. In other words, the foreign companies will have a role to play in the listed items, though their role would be indirect by way of being a supplier of parts, components and technology to their Indian partners.
Source: Compiled from “Amended Draft DAP-2020”, Ministry of Defence, Government of India, July 27, 2020.
However, the foreign companies could have a direct and major role if the government decides to float tenders to subsidiaries of foreign defence companies operating in India. With the Modi Government enhancing the defence foreign direct investment (FDI) cap from 49 per cent to 76 per cent under the automatic route, the foreign vendors through their subsidiaries would like to be treated just like any other Indian company and demand a fair chance to participate in the tendering process for certain embargoed items. If this is permitted, it would put the Indian companies in tough competition with foreign subsidiaries and may drive a better price for the armed forces.
Summing Up
The negative list is one more step taken by the Modi Government to create a strong domestic arms industry and make India self-reliant in arms production. All eyes would now be on the MoD, particularly the DMA, as to how the projects are implemented.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
Banning the sale of imported items through the CSD could supplement the various domestic industry-friendly policy measures being taken by the government for a self-reliant India.
Following Prime Minister Narendra Modi’s ‘Vocal for Local’ call and launch of Atma Nirbhar Bharat Abhiyan (Self-Reliant India Campaign), the government has taken a number of steps to promote indigenisation. The need for self-reliance has further been intensified by the Chinese belligerence and killing of Indian soldiers in eastern Ladakh and the subsequent public outcry for banning Chinese products. Some of the steps taken by the government include restricting predatory acquisition of Indian companies by China, disallowing global tender enquiries in government procurement of goods and services of up to Rs 200 crore, and banning video-sharing TikTok app and several other Chinese mobile applications which are considered inimical to India’s national security and public order.
In the defence sector, the government has also taken a number of bold steps to promote self-reliance in arms production. The Ministry of Defence (MoD) has tweaked its defence capital procurement manual and released the draft Defence Acquisition Procedures 2020 (DAP-2020) to enable greater procurement from the local industry. To provide a further fillip to indigenous arms manufacturing, the MoD has also promulgated a draft Defence Production and Export Promotion Policy 2020 (DPEPP-2020) for public comments, besides articulating a negative list of 101 items which are banned from import. An area where the MoD could push Prime Minister’s Atma Nirbhar campaign further is through the Canteen Stores Department (CSD) – an attached organisation functioning under the MoD – by mandating it to ban selling of imported items and dealing primarily with only India-made items.
Canteen Stores Department
The CSD was created in 1947-48 with the objective of providing “easy access to quality products of daily use, at prices less than market rates.”1 It caters to the uniformed personnel, ex-servicemen and their families, select paramilitary forces and defence civilians. At the time of its creation, the CSD had only four depots, a portfolio of less than 200 items and 400 Unit Run Canteens (URCs). Today, its operations cover sourcing and distribution of nearly 5,500 items to over 3,900 URCs through a network of 35 depots. The CSD, with a workforce of 2,500 and a turnover of nearly Rs 20,000 crore, is now one of the largest retail chains in India, catering to the requirements of 12 million consumers.2 Its product portfolio ranges from biscuits, shoe brushes to high-end cars and other luxurious items. The product portfolio of CSD is categorised under the following seven groups (see Table 1).
Item
Group-I
Group-II
Group-III
Group-IV
Group-V
Group-VI
Group-VII (Against Firm Demand)
Source: Clientele, Canteen Stores Department, Ministry of Defence, Government of India.
Apart from being an extremely convenient way of shopping, especially for the uniformed personnel and their families, the attraction of the URCs lies in the savings not only on the monthly grocery bill but also on the occasional purchase of luxury items. The price at which all CSD items are sold is invariably less than the prevalent market price. This is made possible by the bulk-buy at a discounted price from around 600 suppliers and rent-free retail outlets run as URCs within cantonments and other establishments. This is a big relief as the rent of the property from which such utility stores are generally run constitutes a significant overhead cost which the retailers recover from the consumers.
An equally important reason why the retail price of the items is always lower than the normal market price is that the government subsidises half of the tax levied on the products. The total tax forgone by the government is around Rs 1,200 crore in 2018-19. Though the organisation is not driven by a profit motive, the savings accruing from rent-free accommodation and tax subsidy allows it to charge a marginal profit (of 6.5 per cent on an average) on products. Significantly, despite the margin profit, the price of goods remains significantly lower than the market price in most cases. Half the profit is deposited in the Consolidated Fund of India (CFI) and the remaining half is used for the welfare activities of the beneficiaries. During five years between 2014-15 and 2018-19, the CSD deposited a total of Rs 835 crore with the government.
Imported Items in CSD
Of the 5,500 items sold by the CSD, around 420 items are imported via various Indian suppliers. It is important to note that some of the items imported are manufactured by Indian companies operating in foreign lands. The imported items are procured from around 25 countries that include Nepal, Bangladesh, Sri Lanka, Vietnam, China, the United States (US), the United Kingdom (UK), France and Switzerland. Among all the countries, however, China accounts for the bulk of the imported items. Some of the Chinese items sold in the CSD include toilet brushes, diaper pants, rice cookers, electric kettles, sandwich toasters, vacuum cleaners, sunglasses, ladies handbags, laptops and desktop computers.
With the government launching the Atma Nirbhar Bharat Abhiyan, and given the tension on the northern borders, the selling of imported items by the CSD, particularly Chinese goods, raises the question as to whether an MoD-owned organisation should be permitted to sell foreign-made items, least of all Chinese. This assumes importance considering that the taxpayers’ money is used to partly subsidise items sold by the CSD.
Banning Imported Items in CSD
It is important to note that a ban on selling imported items will not affect the interests of consumers in any manner. Suffice it to say that at present the foreign-made items sold through the CSD constitute about six to seven per cent of the total sales value. More significantly, most of the imported items sold by the CSD are luxury items, the use of most of which is limited to a few, since about 97 per cent of the consumers consist of personnel of other ranks and their family members. Moreover, almost all the imported items could be substituted by items made in India. In any case, those who are rigidly or otherwise attached to a particular foreign brand and cannot change their preference are free to access the outside commercial market to satisfy their needs.
Summing Up
In view of the Atma Nirbhar Bharat Abhiyan, the MoD may like to supplement the various domestic industry-friendly policy measure taken by the government with a ban on the sale of imported items through the CSD. While banning imported items, the government, however, could take into account the larger picture as some of the imported items are procured from Indian companies which operate outside the domestic territory. Moreover, some concession may also be given for items imported from friendly countries and with which India has preferential trade agreements.
The author gratefully acknowledges the vital inputs given by various government authorities.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
While the steps stipulated in draft DAP-2020 to enable smooth acquisition of systems indigenously designed by DRDO and other public sector entities are a right move, they need to be strengthened further to make procedures more robust and conducive for timely completion of projects.
Following Prime Minister Narendra Modi’s “Vocal for Local” call and launch of Atma Nirbhar Bharat Abhiyan (Self-Reliant India Campaign), the Ministry of Defence (MoD) has tweaked its capital acquisition manual to promote greater self-reliance in defence production. On July 27, it released the draft Defence Acquisition Procedure 2020 (DAP-2020) for public comments.1 The draft incorporates suggestions received from various stakeholders on a previous draft – the draft Defence Procurement Procedure (DPP-2020) – which was also put in the public domain.
Among other features, the draft DAP-2020 improvises upon Chapter III A of the draft DPP-2020, which was articulated with the intention to streamline para 72 of Chapter II of the existing DPP that facilitates the acquisition of systems designed and developed by the Defence Research and Development Organisation (DRDO), Defence Public Sector Undertakings (DPSUs) and the Ordnance Factory Board (OFB).
Will the Chapter-III A make a difference in realising Prime Minister Modi’s call for an Atma Nirbhar Bharat? The answer lies in understanding the issues surrounding the indigenous development of defence equipment by the Indian entities, particularly the DRDO, and then juxtaposing them with the procedures articulated in Chapter III A.
Since its creation in 1958, the DRDO has been at the forefront of indigenous design and development of defence equipment. The organisation, which has 24,700 employees, including 7,300 scientists, and a budget of Rs 19,327 crore (or four per cent of the MoD’s budget for 2020-21), is known for many remarkable achievements in strategic programmes, a glimpse of which was the recent successful conduct of Mission Shakti, an anti-satellite (ASAT) missile test.
However, in regard to conventional arms, there has been a deep-rooted perception that the DRDO has not been so successful, even though the organisation, with all its human resource and budgetary constraints, has designed and developed a range of complex systems including Light Combat Aircraft (LCA), Main Battle Tank Arjun, Pinaka multi-barrel rocket system, advanced towed artillery gun, and myriad other weapons and sensors. In terms of value, the DRDO-designed products (other than strategic systems), whether inducted or in the process of induction, amount to Rs 2,65,007 crore, as of 2017.2
Notwithstanding these achievements, the ultimate users, i.e., the armed forces, often complain about time and cost overruns and performance shortfall of the equipment designed and developed by the DRDO.
It is important to note that unlike strategic systems in which the DRDO has greater freedom in the developmental process, in conventional weapon systems, most of which are developed through the Mission Mode, the DRDO has to navigate through a complex web of stakeholders and labyrinthine bureaucratic processes which often work as a stumbling block.
The involvement of various stakeholders, which include armed forces and production and quality assurance agencies, brings an element of diffused accountability as agencies involved are accountable to different administrative heads. The lack of synergy among stakeholders has been commented upon by various authorities, including the Comptroller and Auditor General (CAG) of India, for its adverse impact on timely completion of projects.
More significantly, the lack of synergy has sometimes generated rigid institutional biases, leading to undue delay in placement of orders even after projects have gone through the rigorous process of development and testing. This not only demotivates scientists and the industry involved in the project but directly affects India’s self-reliance as the budget which could have been utilised to procure home-grown technologies is ultimately spent on importing arms from external sources.
The Chapter III A of the draft DAP-2020 has attempted to address some of the abovementioned constraints by articulating detailed step-by-step procedures to enable smooth acquisition of systems indigenously designed by the DRDO and other MoD-owned/controlled design houses. The chapter has identified 12 steps to be followed, ranging from identification of projects for the DRDO and others to award of contract and post-contract management. The chapter also provides for the spiral development of weapons and platform so as allow quick induction of developed products and continuous capability enhancement of the inducted system through incremental technological improvements.
Significantly also, the chapter provides for Joint Project Management Team (JPMT) to bring a semblance of synergy among various stakeholders. Comprising representatives from the concerned armed force, design house, quality assurance and maintenance agencies and the Acquisition Wing of the MoD, the JPMT is intended to facilitate smooth progress of projects.
While the abovementioned steps stipulated in the chapter are a move in the right direction, they need to be strengthened further to make procedures more robust and conducive for timely completion of projects. One key area which needs improvement pertains to the power of the JPMT. In its present form, the JPMT can, at best, discuss issues arising during the developmental process without any power to take decisions on its own to facilitate timely completion of the project. The real power is vested with higher authorities who are not directly involved in the project’s day-to-day execution. In short, the JPMT is not empowered to be responsible to deliver projects on time and to the budget.
In comparison to the suggested JPMT in Chapter III A, similar institutions in other advanced defence manufacturing countries such as the United States (US), the United Kingdom (UK) and France are real drivers of the indigenous projects with necessary powers vested with the team to take decisions in the projects’ interest. Such an empowered arrangement would be desirable to promote R&D in Indian defence
Another area that needs refinement pertains to trial and testing of the equipment. The draft chapter in the present form lays emphasis on a multi-layered trial evaluation – developmental trials, user assisted technical trials, field evaluation trials, staff evaluation, and acceptance trials - before a product is finally inducted. Such a multi-layered trial provision does not necessarily add value; rather, they consume time and money and not necessarily in the best interest of product development. An empowered JPMT with the responsibility to undertake trial evaluation in its entirety would shorten the process, quicken the developmental pace, and enable India to become Atma Nirbhar in defence technology.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
The changes proposed in the offset guidelines require a fresh look, both on conceptual and empirical grounds, as the new regime is likely to yield diminishing returns.
The draft Defence Procurement Procedure (DPP) 2020, released by the Ministry of Defence (MoD) on March 20, exempted foreign vendors from discharging offset obligation in all ‘Buy (Global)’ cases exceeding Rs 2,000 crore other than those processed on the single-vendor basis under specific Inter-governmental Agreements (IGAs), including the Foreign Military Sales (FMS) programme of the US Government (USG).
The FMS programme is administered through a standing framework devised by the USG under which individual deals are finalised between the MoD and the Defence Security Cooperation Agency (DSCA) of the USG, which in turn enters into specific contracts with the US companies for supplying the equipment to India. The offset contract in all such cases is, however, negotiated by the MoD directly with the US company supplying the equipment through FMS, as the USG does not take any responsibility for offsets as a matter of policy.
Many thought this exemption was an oversight as the draft DPP 2020 also contained thoroughly revamped offset guidelines which seemed unnecessary if the non-exempted category of foreign contracts was to be narrowed down by excluding inter-governmental deals from its purview. It turns out that the exemption was not the result of an oversight.
The exemption has been retained, along with the revamped guidelines, as a part of the revised draft DPP 2020, rechristened as Defence Acquisition Procedure (DAP) 2020 and released by the MoD on July 27. The changes proposed in the offset guidelines require a fresh look, both on conceptual and empirical grounds, as the new regime is likely to yield diminishing returns.
The offset requirement was introduced in 2005 in a very rudimentary form based on the recommendations of the Kelkar Committee, but it was only in August 2012 that the objectives of the offset policy were defined for the first time. These were later incorporated in DPP 2013 and have continued unchanged since then.
The objectives of the current policy seek “to leverage capital acquisitions to develop Indian defence industry by (i) fostering development of internationally competitive enterprises, (ii) augmenting capacity for Research, Design and Development related to defence products and services and (iii) encouraging development of synergistic sectors like civil aerospace, and internal security”.1
These objectives have been tweaked in DAP 2020 by deleting the word ‘services’ from the second objective and the third objective altogether.2 This seems to suggest that the deleted objectives have either been met or the MoD considers it futile to pursue these objectives through offsets. Neither of these inferences is correct.
Of 54 offset contracts signed till October 31, 2019, as many as 32 related to procurement programmes of the Indian Air Force (IAF), followed by 15 of the Indian Navy (IN) and seven of the Indian Army (IA).3 Considering that 60 per cent of the offset contracts related to the IAF, manufacturing and services at least in the civil aerospace sector should have shown considerable progress for the MoD to conclude that this sector does not need any further incentivisation. But there is no evidence of that. The only alternative explanation is that these sectors are not viewed as priority sectors any more for reasons that remain unexplained.
The main issue, however, is not about the tweaking of the objectives of the offset policy but the need to continue with it in view of its past performance and the prospects of the Indian industry benefitting from it in future. It is unimaginable that the MoD’s sub-committee which has proposed the changes would not have considered these factors but it is possible that it did not contemplate recommending discontinuation of the policy as it was not a part of its terms of reference.
Be that as it may, there is a case for dispensing with the policy, especially in its proposed form, before it becomes a part of DAP 2020. The main reason for suggesting this is the likely reduction in the offset business for the Indian companies, which has anyway already shrunk with the threshold for foreign contracts entailing offset obligation being raised from Rs 300 crore to Rs 2,000 crore in 2016.
Several foreign contracts processed in the recent past have been only through the IGA/FMS route. This includes mega deals not only with the US and France but also with Russia. According to a July 2016 article, 70 per cent of the deals at that point of time were through IGAs.4 There is no denying that the MoD has been more comfortable with such deals, most of which are on a single-source basis. This has also proved to be a faster way of concluding complex contracts.
Consequently, with the formalisation of the proposed exemption, coupled with the high threshold for effectuating the offset clause, and growing emphasis on procurement of equipment from the Indian companies which does not attract offsets, the number of foreign contracts entailing offset obligation would inevitably come down very significantly.
It would also prompt major exporters of arms to India to formulate schemes similar to the FMS, or nudge the MoD to go in for deals through IGAs to save their defence industry from executing offset contracts in India, which has never been easy for them, not least because of the complex process of changing offset partners, rephasing offset implementation schedule, addressing audit observations on offset claims, and delay in earning offset credits. No wonder then that the pace of execution of the offset contracts has been slow.
To put it in perspective, the cumulative value of 54 offset contracts signed till October 31, 2019 was US$ 11.80 billion with the period of performance of the longest offset contract stretching up to 2024. However, as on that date, the prime vendors were required to discharge offset obligation worth US$ 3.6 billion only, against which the value of the obligation actually discharged by them stood at US$ 1.68 billion, resulting in the imposition of penalties to the tune of US$ 38.19 million.5 This is not indicative of the success of the offset policy, which seems to be focussed more on enforcing, rather than facilitating, execution of the offset contracts.
According to a study carried out by the Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA) for the MoD, as on October 31, 2019, the offset obligation was being discharged by 171 Indian Offset Partners (IOPs). However, till that date, approximately 87 per cent of the total offset obligation had been discharged by only 15 IOPs, with the top five accounting for 51.76 per cent and the top 10 accounting for 76 per cent of the total business done till then.6
Further, according to the same study, more than 90 per cent of the offset obligation was being discharged by the prime vendors through direct purchase of products and services from the IOPs.7
Whatever be the reason – and it is arguable if the proposed changes address them - there has been no transfer of modern technology or state-of-the-art equipment to the Indian companies, or critical technologies to the Defence Research and Development Organisation (DRDO), or much foreign direct investment (FDI) in the Indian defence companies, all of which were permissible avenues for discharging the offset obligation.
With the offset business being garnered by a handful of Indian companies and prime vendors shying away from transfer of technology and equipment or even FDI, it is hard to argue that the policy has served its stated objectives and strengthened the defence industrial base in India in the last 15 years since it was introduced. The situation is further muddied by the difficulties faced by the prime vendors in executing the offset contracts and avoidable controls exercised by the MoD on them.
In the circumstances, it is important to reconsider the decision to continue with the policy, also keeping in mind that there is a cost attached to discharging the offset obligation which is indirectly borne by the MoD as a part of the overall value of the contract. To put it differently, the MoD is incurring extra cost without the returns being palpably commensurate with this investment.
Policies have to be dynamic and if the offset policy has not served its purpose – or served it only to a limited extent - in the last 15 years, despite continuous modifications, it is unlikely to produce spectacular results with its applicability anyway being restricted to fewer offset contracts. It is time the need for its continuation is subjected to dispassionate cost-benefit analysis.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
The internal and external situation on the first anniversary of the historic revocation of the special status of Jammu and Kashmir appears assuring, even as the need for safeguarding the initial gains calls for sustained efforts.
If the COVID-19 outbreak had not roiled a return to near normalcy, Jammu and Kashmir would have been breathing a lot easier with notable improvement in the security situation a year after the abrogation of Article 370 provisions.
The recently released Ministry of Home Affairs report shows a dramatic 36 per cent decline in the number of terrorist incidents since the revocation of Jammu and Kashmir’s special status on August 5, 2019.1 Meanwhile, the number of terrorists killed by security forces increased to 136 from January 1 till July 15, 2020, higher than the tally of 126 in the same months last year. On the other hand, 35 security forces personnel and 22 civilians were martyred since the beginning of this year, compared to 75 uniformed personnel and 23 civilians in the first half of 2019. There has also been only one IED (Improvised Explosive Device) attack in Kashmir since January 1, compared to six IED blasts during the same period last year.
It is also noteworthy that security operations across the districts of Pulwama, Shopian and Kulgam, seen as the nerve centre of the militancy, have dealt a debilitating blow to many terrorist groups, most notably the notorious Hizbul Mujahideen. Facing one of its bleakest hours, this three-decade-old terrorist group reportedly lost 51 of its militants in the first half of 2020,2 including its longest-serving leader Riyaz Naikoo. Close on the heels of his death came the news of the killing of Tehreek-e-Hurriyat chief Junaid Sehraie on May 20, followed by the killing of Afghan war veteran and IED expert Abdul Rehman alias ‘Fouji Bhai’ of the Jaish-e-Mohammad.3
In addition, the top political leadership from National Conference (NC) and People’s Democratic Party (PDP) has been released in multiple batches within seven months of the scrapping of Article 370 provisions, which includes the release of NC leaders Farooq Abdullah and Omar Abdullah in March 2020. However, PDP chief and former Jammu and Kashmir chief minister Mehbooba Mufti is among the few who remain under house arrest. 4
However, the upshot of these successes has been tempered by a spurt in the COVID-19 cases (over 20,000), with over 370 deaths reported by August 2, in Jammu and Kashmir. The lockdown to fight the pandemic has been extended till August 5.5
Confidence sans Complacency
The impressive gains secured by the Indian security forces clearly controvert the unwarranted claims of a few radical Kashmiri leaders and academicians last year that any legislative action taken to de-operationalise Article 370 would result in a wave of unmitigated violence across the valley and beyond.6
However, most high-ranking military officials remain wary of being overly sanguine in their assessment of the situation, which is often described as stable but sensitive. Noted journalist and security issues expert Praveen Swami believes that violence levels ebb and flow in the valley and it would be wrong to make summary judgments too soon.7 Although the counter-infiltration grid has been made more robust and effective, the General Officer Commanding (GOC) of 19 Infantry Division in Baramulla, Major General Virendra Vats, told a press conference recently that intelligence inputs indicate that up to 250-300 terrorists currently wait at launch pads across the border to infiltrate into India.8
However, Jammu and Kashmir police sources are more concerned about local recruitment, which is said to have risen in the valley. According to the Inspector-General of Police (IGP), Kashmir, Vijay Kumar, “In 2020 so far 79 youngsters have joined various terror tanzeems (organisations) while last year in 2019, 135 were identified who joined various terror groups”.9 Economic hardships in the wake of COVID-19, unemployment and opposition to the new domicile law seem to be aggravating youth resentment. Some observers even opine that the absence of political protests might be pushing more youngsters toward terrorism.
Meanwhile, terrorist groups are trying to abort any revival of the political process by targeting the emerging political leadership. On July 8, 2020, unidentified militants gunned down Bharatiya Janata Party (BJP) leader Sheikh Waseem Bari, along with his brother Umar Sultan and father Bashir Ahmad Sheikh, in Bandipora District in North Kashmir.10 Undeterred, the Jammu and Kashmir BJP has planned a 15-day-long programme from August 5 to mark the first anniversary of the revocation of the special status provisions under Article 370.11 It is believed that the political process would gather steam following the completion of the ongoing delimitation exercise, which could pave the way for fresh elections.12
The New ‘Non-Jihadi’ Terror Tack
Meanwhile, a more insidious game is being played from across the border. To counter the disarray and infighting within a discredited Hurriyat and the terminal retreat of old terrorist groups like Hizbul Mujahideen, new terror outfits with non-Arabic, ‘non-sectarian’ nomenclatures have come to the fore.
The Resistance Front (TRF) has risen to prominence as a supposedly homegrown movement, despite markings of Lashkar-e-Taiba smudged all over it.13 It seems the usual masterminds across the border now prefer English titles for their terror proxies so that such groups are more favourably received in the West than their much reviled jihadist predecessors.
On the dark web, another terror fledgeling named ‘People’s Anti-Fascist Front (PAFF)’ recently issued a video calling on the Kashmiris to carry out attacks on the Indian forces.14 Perhaps, the inspiration for this name came from the Antifa (anti-fascist) movement in the United States. Thus, the hoax of pleasing Allah has given way to placating an anti-Donald Trump wave, which it is believed would sweep the US presidential elections in November.
Dashed Hopes in Joe Biden
After being “disappointed” by the poor response to his international outreach on the Kashmir issue last year, Pakistan Prime Minister Imran Khan has announced a new plan to rake up the issue on the August 5 anniversary. Still, expectations have been managed somewhat as the planned global outreach is limited to three countries this time – Turkey, Malaysia and China, in addition to a visit to the Pakistan-occupied Kashmir (PoK) on that day.15
Following recent India-China border clashes, US Democratic Party presidential nominee Joe Biden has issued a clear statement that the India-US partnership will find “high priority” in his prospective administration, which might have dashed any Pakistani hope for a change in US policy on the Kashmir issue, with the possible coming of a new president.16
In sum, the internal and external situation on the first anniversary of the historic revocation of the special status of Jammu and Kashmir appears assuring, even as the need for safeguarding the initial gains calls for sustained efforts.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
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