India’s decision to abrogate Article 370 and bifurcate the state of Jammu and Kashmir into two union territories has radically impacted the internal and external politics of Pakistan. In the aftermath of the decision, Pakistan’s entire state machinery was channelled towards convincing their own people as well as the people of Pakistan-occupied Kashmir (PoK) that the Pakistan state would support the Kashmiris on all fronts. This was followed by Prime Minister Imran Khan reiterating his commitment to the Kashmir cause in his address to the legislative assembly in Muzaffarabad on August 14 and again in his address to the nation on August 26. On both occasions, he declared himself as an ambassador of Kashmir and stated that the “whole nation and its government would go to the last extent to support the Kashmiris.” In his address to the nation, he even claimed Pakistan’s diplomatic victory on the Kashmir issue.

To boost his political image both within the army and at the wider domestic level as well as to divert the national attention away from the brewing internal crisis, Imran Khan found it convenient to ramp up the rhetoric on Kashmir in the coming days. He again visited PoK on September 13, where in his address at Muzaffarabad he reiterated his promise to act as an ambassador for the Kashmir cause and do everything possible to internationalise the issue by raising it in every possible forum. He also urged the people to hold their patience and not to cross the Line of Control (LoC) until he asks them to do so. Nevertheless, within Pakistan, his addresses were mostly labelled as ‘mere speeches’ with no delivery; instead most of the media chose to focus on growing discontent over worsening governance and economic conditions within the country.

The Imran Khan Government has since raised the Kashmir issue in the United Nations Security Council (UNSC) with the help of China, the United Nations Human Rights Council (UNHRC) and in his maiden speech at the United Nations General Assembly (UNGA), apart from raising it with countries it considers friendly. He also tried to up the ante by repeatedly threatening the global community of the risk of Kashmir issue snowballing into a nuclear conflict between two South Asian neighbours. His government has even encouraged the non-resident Pakistanis to organise protests in different parts of the world.

However, these initiatives have not yielded the desired results with the international community more or less endorsing India’s position. India has maintained that the decision to revoke the special status of Jammu and Kashmir is entirely its internal matter and that the step has been taken to ensure holistic development in the state. As for talks with Pakistan, India’s Defence Minister Rajnath Singh has stated that “Talks with Pakistan will be held only if it stops supporting terror. If talks are held with Pakistan, it will now be on PoK.” Subsequently, External Affairs Minister S. Jaishankar stated that “POK is part of India and we expect one day that we will have the physical jurisdiction over it.”

Meanwhile, the aggressive posture adopted by Pakistan has given the embattled Pakistan Tehreek-e-Insaf (PTI) led government a breather at a time when the opposition is increasingly vocal about the deteriorating economic situation and poor governance in the country. By raising the pitch on the Kashmir issue, Imran found an opportunity to hide his government’s failure on both internal and external fronts. There are also murmurs about a possible attempt by the opposition to topple the government, especially in the wake of Jamiat Ulema-e-Islam – Fazl (JUI-F) chief Maulana Fazl-ur-Rehman’s plan to organise a long protest march to Islamabad at the end of October this year.

In view of the growing domestic challenges, where government’s focus is likely to shift away from the Kashmir issue, it is worth examining how the evolving political dynamics within the country could potentially impact the future of Prime Minister Imran Khan and his 13-month old government.

Growing Domestic Opposition

It is well-known that the PTI, backed by the military and the judiciary to certain extent, left no stone unturned – before and after the elections – to split up opposition parties, buy loyalties of opposition legislators, and suppress anti-government voices to render them politically ineffective. The National Accountability Bureau (NAB) has been used as a tool to nab opposition leaders for their past omissions and commissions. The dissenting voices are either being coaxed to join the PTI or incarcerate behind the bars. All kinds of efforts are being made to break them down physically and emotionally.

In Imran Khan’s Naya Pakistan, the all-powerful military continues to pull the strings and very much retains its influence over the domestic, foreign and security polices of the country as well as the judiciary. Two former prime ministers, Nawaz Sharif and Shahid Khaqan Abbasi, and one former president, Asif Ali Zardari, are already behind the bars over allegations of corruption. According to a recent United States Congressional Research Service report, “Many analysts contended that Pakistan’s security services covertly manipulated the country’s domestic politics before and during the election to favor Khan. The PTI-led government has been criticized for unsteadiness and an inability to defy Pakistan’s military or to resolve the country’s fiscal crisis.” A purported ‘military-judiciary nexus’ allegedly came to favour Khan's party.

The three-year extension granted to the army chief General Qamar Javed Bajwa on the pretext of “regional security environment” by the Imran Khan Government proves the military’s continuing stronghold on the civilian government. It is to be noted that Bajwa had played a vital role not only in strengthening the army’s grip over the civilian government but also the judiciary and security. Referring to Transparency International’s assessment of Pakistan, an article published in the Express Tribune noted that “the current PTI Government’s probe avoided focusing on corruption during the Musharraf era and instead focused on the PPP and PML-N governments.” It also referred to the lopsided nature of the anti-corruption drive launched by the PTI Government and how it “lacks the required political will to enforce long-term measures for rooting out corruption.”

After grabbing power in two of the four provinces (Khyber Pakhtunkhwa and Punjab) and allying with a new pro-establishment party in another (Baluchistan), the PTI has attempted to dislodge the Pakistan Peoples Party (PPP) Government in Sindh. This includes a failed attempt to form a forward block within the PPP. There is also a view that the arrest of Asif Ali Zardari and his sister Faryal Talpur, including the latest arrest of the senior PPP leader Syed Khursheed Shah, under NAB are an attempt to pressurise the Sindh Government into accepting the federal government’s proposal to introduce local government in Karachi as per Article 140A of the Constitution.

In the face of stiff resistance from the Sindh Government, an attempt has been made to invoke the executive authority of the federal government vide Article 149 (4) to give directions to Sindh “as to the manner in which the executive authority thereof is to be exercised for the purpose of preventing any grave menace to the peace or tranquility or economic life of Pakistan or any part thereof.” According to the reports, a twelve-member strategic committee having six members each from the PTI and the Muttahida Qaumi Movement-Pakistan (MQM-P), headed by Federal Law Minister Farogh Naseem, was formed by Prime Minister Khan to confer on the issue. The Committee suggested that “Karachi’s administrative affairs under Article 149 of the Constitution” should be managed through devolution of power to the local bodies. The PPP Government in Sindh suspects that it is a diabolical move to split Karachi from Sindh in the name of providing better local governance.

The PPP chief Bilawal Bhutto has accused the government of making attempts to ‘occupy Karachi’. An editorial in Pakistan’s leading English daily, Dawn, has warned about the adverse effects of such a move and argued that “Such a move will set a dangerous precedent, and can be used elsewhere in the country to roll back the gains of the 18th Amendment.” This has stirred the political and intellectual circles in Sindh and the possibility of unrest and protest against the government in the coming days is not ruled out. 

There are also attempts afoot to split Pakistan Muslim League - Nawaz (PML-N) into two factions, one headed by Nawaz Sharif and his daughter Maryam Nawaz, and the other by his younger brother and currently leader of the opposition in the national assembly Shahbaz Sharif. The former is labelled as a radical faction while the later as a moderate one. Media discussions suggest that Shahbaz Sharif is considered amenable to the army and is being persuaded to come on board in favour of the ruling government. There are also strong rumours about both Nawaz and Maryam being offered a deal to leave the country and settle abroad. An Urdu newspaper, Ummat, has even hinted at the possibility of foreign ministers of Saudi Arabia and the United Arab Emirates (UAE), during their recent visits to Pakistan, having advised Imran Khan to go soft on Nawaz Sharif. Meanwhile, Nawaz Sharif has reiterated his support for JUI-F’s long march on Islamabad. He recently wrote a letter to his brother and president of PML-N, Shahbaz Sharif, asking the party leaders and workers to “ensure that the anti-government protest (Azadi March) is a success.”

Adding to the troubles of the PTI-led government, doctors across Khyber Pakhtunkhwa took out protest rallies towards the end of September against the Regional and District Health Authorities Act, 2019 that in short talks about the privatisation of the government hospitals, and was passed recently in the provincial assembly. Moreover, in the first week of October, after failed attempts to negotiate with the government over the complexities of documentation through the Federal Board of Revenue (FBR), the small traders and businessmen also came out on the streets of Islamabad to register their protest against the government on the issue. Meanwhile, the All-Pakistan Anjuman-i-Tajiran (APAT) has already announced a countrywide shutter-down strike on October 28 and 29, almost coinciding with the ‘Azadi March’ starting on October 27.

Maulana’s Long March to Islamabad

The JUI-F chief Maulana Fazl-ur-Rehman has been the most vocal critic of the PTI Government ever since it assumed office. In an effort to bring opposition parties under one umbrella, he had convened the first-ever all parties conference (APC) on June 26 this year in Islamabad. This was the first occasion for the opposition to put up a united front against the PTI Government and where seeds of a possible anti-government protest campaign from a single platform were sown. Before this meeting, Maulana had hinted at a possible Long March (Azadi March) or October Revolution in Islamabad led by the JUI-F and Muttahida Majlis-e-Amal (MMA) in an interview on Capital Talk with Hamid Mir in July.

Recently, Maulana stated that “We have decided to enter Islamabad on October 31.” He had earlier claimed that along with the other opposition parties he will be able to mobilise more than ten lakh protestors to take part in the Long March to expose the real face of Imran Khan and his government. According to a Pakistani political commentator, Imad Zafar, Maulana might have the covert backing of certain sections within the security establishment who want to dismantle the Imran Khan Government. He added that “These people are angry over the Kashmir fiasco and the political engineering that resulted in the current political and economic turmoil in Pakistan.”

The PTI-led government has dismissed the JUI chief’s statement saying that brainwashing a few madrassa students and provoking them against the government in the name of religion is totally unacceptable. Nevertheless, the government betrayed its nervousness when it stopped Maulana’s interview to the Geo News – Jirga with Saleem Safi – from going on air.

However, with the idea of a Long March gaining momentum, the PPP chief Bilawal Bhutto’s statement not to take part in the planned sit-in at Islamabad came as a set back to the Maulana. While extending moral and political support to the Long March, Bilawal plans to travel to all parts of the country to make people aware of the failures of the Imran Khan administration, which he labelled as a puppet government. It is likely that Imran Khan’s government will face increasing flak in future on account of its failure to garner greater international support on the Kashmir issue as well as inability to deal with burgeoning economic crisis in the country.

Conclusion

Any effort by Pakistan to over-activate terror launch pads in order to draw world’s attention to the Kashmir issue can prove counter-productive for the Imran Khan Government. A protracted military engagement with India can worsen the political and economic crises at home. Moreover, Pakistan’s sponsorship of terror could result in it being blacklisted by the Financial Action Task Force (FATF) that will not only lead to international calumny but also restrict the flow of foreign funds for the cash strapped Pakistani economy.

Meanwhile, internally, if the government decides to tinker with the status of Karachi, there could be a massive uprising in Sindh. Also, the Long March together with Bilawal’s parallel country-wide tour, and with protests by doctors and traders gaining momentum, could unleash a political storm that may not be easy for an increasingly isolated PTI Government to weather. For now, with a failing foreign policy and a crippling economy, and growing domestic opposition as well as criticism within the army, Imran Khan and his government is clearly caught between the devil and the deep sea.

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

The September 14 drone strikes on Saudi Aramco’s Abqaiq refinery and Khurais oil field set off a flurry of writing about its impact on the global oil market. After all, Khurais is the kingdom’s second-largest oil field with a capacity to pump around 1.45 million barrels a day (mbd) and Abqaiq is the world's largest refinery processing around 4.9 mbd. The attack was believed to have affected 5.7 mbd or around five per cent of the global oil supplies leading to an immediate spike of 20 per cent in the international crude prices.1 However, with Aramco assuring early restoration of supplies, the prices subsequently came down though not to the earlier levels. Meanwhile, conflicting media reports that the prices will not be affected due to the comfortable supply situation as well as the slow pace of the global economy on the one hand, and that the prices have ended their bearish streak due to falling American inventories on the other have kept the global oil market tense, and with good reason.2

First, the damage wrought by the strikes for which the Houthi rebels, fighting against the Saudi-backed regime in Yemen, have claimed responsibility was substantial. Of the 20 strikes, 17 hit their targets. Aramco officials claim that 30 per cent of the production has been restored and that it will return to its full capacity by the end of October. Notwithstanding Saudi claims, much will depend on whether full production can be restored, and supplies can be met through inventories and strategic stocks. There are reports that Saudi Aramco has told the Chinese refiners that there would be a delay in shipments for contracts already signed, whereas other Asian clients have been told that they would be supplying mixed crude instead of the usual Arab light from October.3 This lends to the speculation that a portion of the supplies may be coming from Saudi Arabia’s strategic oil reserves and not from Abqaiq, an indication that it may be a while before Abqaiq is fully functional. Some recent reports even suggest that it may take months.4

Second, the Houthis have warned of further strikes on the Saudi oil facilities. Apart from that, tensions between the United States (US) and Iran are increasing following US and its allies accusing Iran of being responsible for the attacks and threatening retaliation, and Iran warning of an ‘all-out war’ in response. Although an imminent conflict has been ruled out for now, the new punitive sanctions that have been imposed on Iran’s Central Bank and National Development Fund of Iran are keeping the tensions alive.

Third, the geopolitical risk premium on oil is likely to go up over the next few weeks, particularly if the Saudi claims of normal production by the end of September5 do not bear out. Moreover, over the last few months, the region has seen several attacks and seizure of oil tankers — by Iran and other countries — as well as Israeli attacks against the Iranian-backed militia in southern Iraq. On May 14, the Houthis had claimed responsibility for an attack on Aramco’s East-West pipeline, launched from southern Iraq. The September 14 attacks could also have originated from Iraq.

Finally, much of the comfortable supply situation in the global oil market is due to the US production and recent laws permitting exports. However, its crude inventories are down over a five-year average and rig counts have dropped substantially due to low oil prices affecting the bottom lines of the smaller shale oil producers.6 Hence, while in the short term prices may not be affected due to shipments having commenced before the strikes, but in the longer term several factors may see a bullish trend returning to the market.

India Hedging its Bets

Of immediate relevance to most countries, including India, is the impact of a possible increase in regional tensions on energy markets. While retail oil prices in India have seen a slight increase, the potential impact on the global oil supplies was reflected in other parts of the Indian economy. The stock markets have been volatile given the concerns about potential Gulf conflict and growing domestic political turmoil in the US. The emergence of US as a dominant oil and gas producer could have a major fallout on the global energy market. There were also concerns that inflation would further rise following a rise in oil prices, and that the current account deficit would grow given India’s high oil imports (85 per cent), along with a fall in capital inflows.

As for the possibility of actual disruption of supplies, there is no immediate shortage of oil as the market is balanced for the time being. Nonetheless, there are concerns that the political and security environment in the Persian Gulf region may worsen. While India’s supplies from Iran have stopped due to the US sanctions, supplies from the Gulf region per se may be affected if there is an escalation in the Saudi-Iran tensions, and prices may spike for the same reason.

Saudi Arabia accounts for around 17 per cent of the crude imports and 32 per cent of the liquefied petroleum gas (LPG) requirements of India. With Aramco opting to focus on crude exports instead of refined products, there could be a shortfall in the weeks to come. Moreover, after the strikes, Aramco has offered to provide more oil to India, albeit of heavy crude as against previous Arabian light, to keep its export commitments as well as to replace the sanctioned Iranian crude.

However, in the event of Aramco failing to deliver or if tensions in the region escalates, India will have to look for alternative sources. Following the attack on Abqaiq, India’s Petroleum Minister Dharmendra Pradhan held talks with the head of Russia’s largest oil firm, Rosneft, for supply of crude.7 During Prime Minister Narendra Modi’s recent visit to the US (September 21-27), talks were also held with the US oil and gas firms for increased supplies on concessional terms to help India tide over any potential shortages that may arise. India’s oil imports from the US as well as Africa and Latin America have already increased. Moreover, India has signed a term deal for the supply of liquefied natural gas (LNG) from the US,8 as India looks to meet its carbon mitigation goals by replacing carbon intensive resources like coal and oil.

While the government is taking steps to tide over any potential shortages, concerns over supply disruption and resultant price spikes are likely to increase, affecting the already nervous market sentiments. With India’s strategic oil reserves currently holding only 12 days of stock, a prolonged supply disruption or price spike will have a trickle-down impact on the economy. Recently, the Asian Development Bank (ADB) slashed India’s growth forecast to 6.5 per cent for the FY 2019-20 from its earlier estimate of seven per cent,9 despite the slew of measures announced by Finance Minister Nirmala Sitharaman. India has already cut its oil imports from the Organisation of Petroleum Exporting Countries (OPEC) to 78 per cent from the previous 83 per cent in order to reduce its dependence on a politically volatile region.10 It is, therefore, time to look more seriously at alternative sources — both in terms of countries as well as alternative energy resources — as attacks on the Saudi oil infrastructure could lead to more geopolitical tensions in West Asia.

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

• 1. Julian Lee, “Saudi oil attack: Where are we a week on and what happens next?,” The Economic Times, September 23, 2019.
• 2. Nick Cunningham, “Oil Prices Tank On Global Recession Fears,” Oilprice.com, October 02, 2019 and “Crude oil prices rise today breaking a 6-day drop,” LiveMint, October 02, 2019.
• 3. Daisy Xu, Gawoon Philip Vahn and Eesha Muneeb, “Three state-run Chinese refineries face delays in Saudi crude shipments in Q4,” S&P Global Platts, September 19, 2019.
• 4. Summer Said, Benoit Faucon and Rory Jones, “Aramco’s Repairs Could Take Months Longer Than Company Anticipates, Contractors Say,” The Wall Street Journal, September 22, 2019.
• 5. Frank Gardner, “Saudi oil facility attacks: Race on to restore supplies,” BBC News, September 20, 2019.
• 6. Nick Cunningham, “US Shale Production Is Set For A Steep Decline,” Oilprice.com, October 01, 2019.
• 7. “Post Saudi attack, India in talks with Russia to up crude supply,” The Economic Times, September 17, 2019.
• 8. Dipu Rai, “How the US is realising India's oil concerns,” India Today, September 24, 2019.
• 9. Indivjal Dhasmana, “ADB cuts India's economic growth projection to 6.5% from 7% for FY20,” Business Standard, September 25, 2019.
• 10. n. 8

In 2010, China had used its dominance over rare earth elements (REEs) to effectively implement its ban on exports to Japan, ostensibly following the collision of a Chinese fishing vessel with Japanese coast guard vessels. Almost a decade later, as China threatens to ban exports to the United States (US), a replay of the same could be in the offing.

US President Donald Trump upped the ante when on August 01 he announced an additional 10 per cent tariff on the remaining US$ 300 billion worth of Chinese imports, starting September 01, 2019.1 Interestingly, rare earths were excluded from the list.

The REEs are a set of 17 minerals2 used to make, among other things, permanent magnets which are used in defence equipment, including actuators, to control guidance systems for airborne smart missiles, as well as in aerospace applications for aircraft components and airstrip maintenance equipment. REEs are also used in electronic items like television sets and cell phones and renewable energy equipment like wind turbines and solar panels. However, of the 17 minerals, neodymium and praseodymium form the majority of minerals used in permanent magnets, while dysprosium is used in neodymium‐iron‐boron (NdFeB) permanent magnets to improve their high temperature performance.3

Ironically, rare earths are not rare at all.  In fact, they are found in several countries including China, the US, Australia, Brazil, Burundi, India, Malaysia, Myanmar, Russia, Thailand and Vietnam – with global deposit reserves estimated at 120 million tonnes.  However, they are considered ‘rare’ as they usually exist as compounds fused with other metals, and they also oxidise quickly, making the process of refining and extracting them in commercially viable quantities very expensive, especially in countries with strict environmental and effluent standards. Moreover, many of these minerals are found in deposits mixed with radioactive thorium and uranium, which makes processing and disposal quite risky due to possible radiation leaks.

In the 1960s, the US emerged as the frontrunner in the REE production following the discovery that europium -- one of the REE elements – could enhance the colour red in television sets, and held on to that position till the 1980s. But, bringing rare earths under the same regulation as thorium mining by the Nuclear Regulatory Commission and the International Regulatory Agency made the REE mining uneconomical.4 Moreover, mining and processing REEs involve huge environmental costs including water contamination through radioactive materials. Introducing environment friendly technology also makes it economically unviable. In fact, one of the reasons why the US, despite having substantial reserves of REE, became dependent on imports was due to a small leak that prevented the last American mine to renew its operating license leading to its closure in 2002.5 As a result, at present, the US has just one operational rare earth mine and not a single processing facility. 

China was quick to exploit the situation to its advantage. Almost 30 years ago, in the 1980s, China took the decision to make rare earths a strategic commodity. Due to the country’s low labour costs and lax environmental regulations, it soon became a market leader. Although it possessed around 40 per cent of the REE deposits, it produced around 80 per cent of the global supply. To put China’s position in the REE export market in perspective, it may be noted that the second largest supplier, which is Australia, produces around 20,000 metric tonnes as against China’s 120,000 metric tonnes. Moreover, in China, the REEs are mostly located in clay deposits which makes it easier to extract. Also, the Chinese environmental standards are less stringent than in the US.

The first signs of Beijing’s intention to use REEs as a strategic tool became apparent during its dispute with Japan in 2010, although some studies suggest that the decline in the REE exports to Japan was a result of China’s decision to cut worldwide exports due to environmental concerns. However, at the end of May this year, Beijing indicated that it may weaponise its rare earth resources in the event of an escalation of the trade war with the US. In May this year, a spokesperson from the National Development and Reform Commission (NDRC), country’s powerful state planner, responding to a query about rare earths being used as a weapon in the trade war, stated that “If any country wants to use products made of China’s rare earth exports to contain China’s development, the Chinese people would not be happy with that.”6

US Response

Given the US dependence on China for sourcing the REEs, the US Department of Defence has been holding talks with REE miners worldwide to explore the alternative sources of supply. It has also restarted rare earth mining and has so far produced 15,000 metric tonnes, as against zero in 2017, and is examining the possibility of developing more sites. In December 2017, President Trump signed an executive order to create a federal critical minerals strategy, which would cut red tape and boost resources for exploration. In June 2019, the US Government released ‘A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals’,7 which according to a press release “directs the U.S. Department of the Interior (DOI) to locate domestic supplies of those minerals, ensure access to information necessary for the study and production of minerals, and expedite permitting for minerals projects.”8 A bill has reportedly been introduced (but is yet to be passed) to allocate finances to the Department of Energy and its National Energy Technology Laboratory (NETL) in order to develop technologies that could extract REEs from coal and coal by-products from the US mines. 9 However, it will take years before the US rebuilds its REE sector and is able to increase the supplies.

Options for India

Given China’s stated policy of using its dominance over the REE market for strategic purposes, countries have been looking for ways to diversify their sources of supply. India is one of the few countries that has substantial REE reserves. However, it ranks low in the REE market and is seen, at best, as a low-cost supplier of raw materials. Some of the estimates from 2016 indicate that with 35 per cent of the world’s beach sand mineral deposits, the Indian REE industry has the potential to generate about Rs. 121,000 crores.

Although over the years India has developed some expertise in extracting and processing rare earths from mineral ores (mainly monazite), it has yet to acquire the requisite expertise in the downstream sector, that is, in the manufacture of intermediate products like permanent magnets, phosphors, etc., mainly due to the volatility of the REE market prices.  

India imports most of the rare earths in finished form as electric vehicle manufacturing is still in its infancy. According to the Indian Mines Bureau, the total consumption of rare earths during the fiscal year ending March 2016 was 31.9 tonnes. Currently, India is dependent on importing most of the REEs from China, followed by Hong Kong and South Africa.10 However, by doing so, it is losing out on the opportunity to earn substantial revenues as a supplier of hi-tech equipment like neodymium magnets. Interestingly, Japan currently imports dysprosium from India, using it to manufacture advanced neodymium magnets which are of high value, and today controls a sizeable portion of the global neodymium magnets market.11

With growing global trends in clean technologies, the demand for critical rare earth minerals will grow. While late in joining the race, the Government of India is taking steps to develop and strengthen India’s position in the rare earths market. Moreover, if India wants to position itself as a global leader in renewable energy and be more self-sufficient in defence equipment, it should seek to reduce its dependence on import of renewable energy equipment like solar panels and modules as well as defence equipment. In 2015, India and Japan had set up a joint venture company -- Toyotsu Rare Earths India – in Visakhapatnam for the extraction and processing of rare earth oxides.

While a beginning has been made with the announcement of a National Mineral Policy 2019, covering non-fuel and non-coal minerals, India must strive to acquire expertise in valorising these minerals and shift to developing its downstream sector. To that end, India should seek to leverage its ties with Japan and other countries that have the requisite technology for manufacturing downstream equipment so that it can set itself up as an alternative source of the REE-based technology, with its own supply chain of minerals and metals required for the same, instead of being content with being a mere supplier of upstream materials. 

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

• 1. Yun Li, “Trump says US will impose 10% tariffs on another $300 billion of Chinese goods starting Sept. 1,” CNBC, August 01, 2019.
• 2. The 17 REEs are: Cerium (Ce), Dysprosium (Dy), Erbium (Er), Europium (Eu), Gadolinium (Gd), Holmium (Ho), Lanthanum (La), Lutetium (Lu), Neodymium (Nd), Praseodymium (Pr), Promethium (Pm), Samarium (Sm), Scandium (Sc), Terbium (Tb), Thulium (Tm), Ytterbium (Yb), and Yttrium (Y).
• 3. “The Important Role of Dysprosium in Modern Permanent Magnets,” Arnold Magnetic Technologies, September 2015.
• 4. Rick Mills, “How the US lost the plot on rare earths,” MINING.COM, January 25, 2019.
• 5. Keith Bradsher, “Amid Tension, China Blocks Vital Exports to Japan,” The New York Times, September 22, 2010.
• 6. “China indicates it may use rare earths as weapons in trade war,” Global Times, May 28, 2019.
• 7. “A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals,” U.S. Department of Commerce, June 04, 2019.
• 8. “Trump Administration Announces Strategy to Strengthen America's Economy, Defense,” Press Release, U.S. Department of the Interior, June 04, 2019.
• 9. Bryan Borzykowski, “Wyoming may hold the key to the rare earth minerals trade war with China,” CNBC, July 10, 2019.
• 10. Rosemary Marandi and Kiran Sharma, “India scrambles to look overseas for rare earths used in EVs,” Nikkei Asian Review, June 27, 2019.
• 11. Saurav Zangeneh, “State of India’s Rare Earth Industry – Understanding India’s Current Position,” ISSSP Reflections No. 57, International Strategic and Security Studies Programme (ISSSP), National Institute of Advanced Studies (NIAS), November 28, 2018.

The most convincing argument in support of a successful India-China military relationship is the fact that not a shot has been fired across the 3488 km long Line of Actual Control (LAC) in over 50 years.  It is also to the credit of the militaries of both countries that they have shown maturity and restraint in defusing potentially explosive situations such as those in Daulat Beg Oldi (DBO) in 2013, Chumar in 2014, and Doklam in 2017.  Over the last half a century, save a bloody confrontation at Nathu La in 1967, where the Indian Army showed ‘restrained aggression’, a slow, pragmatic and incremental set of confidence building measures (CBMs) have ensured a defined and established set of rules to peacefully deal with transgressions and avoid confrontations.

Despite these CBMs and a robust mechanism to settle the boundary dispute, a final settlement continues to remain elusive. In 2013, a standoff between the two militaries at DBO in eastern Ladakh spurred the signing of a Border Defence Cooperation Agreement (BDCA) in October 2013. This augmented the existing CBMs by laying down five implicit mechanisms to improve communication and cooperation in order to defuse confrontation, viz. flag meetings, periodic meetings between field commanders and government officials, the Working Mechanism for Consultation and Coordination for India-China Border Affairs (WMCC) at the Joint Secretary as well as Director General Border Affairs level, and an annual Defence Dialogue at the Defence Secretary level. These were followed up with greater interaction between field commanders through visits to each other’s military theatres, resumption of battalion level Hand-in-Hand exercises, port of call visits by Indian ships and visits by military delegations to each other’s training institutions.

However, the standoff at Doklam in the Bhutanese territory in 2017, which lasted 73 days and in the most inhospitable and treacherous terrain along the LAC, tested the mettle and resolve of the militaries of both India and China. It was finally resolved peacefully with both militaries backing off after hectic diplomatic consultations between the affected parties. India’s support to Bhutan, its closest ally in its immediate neighbourhood, was clear and unambiguous. After the bloody confrontation at Nathu La in 1967, in which almost 300 Chinese soldiers are believed to have been killed,1 the faceoff in Doklam and the buildup that followed called for mutual de-escalation without prejudice to each other’s position on the boundary issue. In what can be termed as ‘saving face’, the People’s Liberation Army (PLA) agreed to pull back while the Indian forces did the same to restore ‘status quo ante’. However, the PLA has since taken to building massive infrastructure and continues to deploy a large number of troops in the Doklam Plateau. Although Doklam standoff resulted in a strain in the India-China relations, it is again to the credit of both militaries that they displayed remarkable restraint and never let the situation escalate into a confrontation or exchange of fire.

The ‘Wuhan Spirit’

It was in the backdrop of the Doklam incident that Prime Minister Narendra Modi and President Xi Jinping met for an Informal Summit at Wuhan in China in April 2018 to review the bilateral relations. The two leaders thereafter agreed to direct their militaries to “earnestly implement various confidence building measures agreed upon between the two sides, including the principle of mutual and equal security, and strengthen existing institutional arrangements and information sharing mechanisms to prevent incidents in border regions.”2 Subsequently, the annual Hand-in-Hand joint exercise on anti-terror was resumed in 2018 along with visits by military delegations and ships to each other’s ports. India also participated in the August 2018 Shanghai Cooperation Organisation (SCO) joint military exercise involving Pakistani and Chinese troops.

Having 'reset' the bilateral relationship last year in April 2018, the return of the Modi Government to power in the recent elections has injected renewed vigour into India’s relationship with China. Developments such as China’s endorsement of Pakistan’s placement on the ‘grey list’ of the Financial Action Task Force (FATF) against terror financing in June 2018, and China’s lifting of the ‘technical hold’ on the declaration of Jaish-e-Mohammed chief Masood Azhar as a global terrorist under the United Nations Sanctions List in April 2019, have had a positive impact on bilateral ties. These developments augur well for Modi 2.0. The Bishkek Declaration issued at the recent SCO Summit has also lent credibility to India’s stance on terrorism. During the SCO Summit, Prime Minister Modi had clearly stated that “Countries responsible for aiding, supporting and providing financial assistance to terrorists should be held accountable.”3

Further, President Xi and Prime Minister Modi have developed a personal chemistry which continues to flourish, as reflected in Xi’s acceptance of the invitation for the second Informal Summit to be held later this year in Varanasi. With the year 2020 marking 70 years of the establishment of diplomatic relations between the two countries, Prime Minister Modi’s proposal that both countries should list 70 important events, 35 each in India and China, to mark the occasion has been accepted by President Xi.4 That should set the stage for a greater congruence on ideas and actions in the coming years, including on Military to Military (M2M) relationship.

Having resumed the M2M exchanges in earnest, India and China could sustain the momentum by cooperating in the following areas as well:

(a) Building CBMs at Sea – Over the last few years, there has been a growing focus on the Indo-Pacific Region (IPR). The importance of vital sea lanes of communication and commercial shipping traversing the region needs no emphasis.  In this context, the expanding footprint of the PLA Navy (or PLAN) in the IPR is a matter of concern.  With the Indian Navy firmly anchored in the Indian Ocean Region (IOR), there are both fears of confrontation as well as opportunities for cooperation between the two navies in the region. A beginning was made by establishing a formal Maritime Dialogue in 2016 to address areas of maritime concern.

The statement issued after the Second Maritime Dialogue held at Beijing in 2018 described the engagement as “an important mechanism between the two countries for consultations on maritime issues. They [the two parties] emphasized the need to further strengthen maritime cooperation as an important area of India-China bilateral relations, and as a platform to strengthen political and strategic mutual trust between the two countries.”5 As a next step, CBMs for peaceful conduct at sea, similar to the existing ones for maintaining peace along the LAC, can be explored. This can include communication protocols, aid and assistance at sea in case of emergent situations, and cooperation against piracy and maritime terrorism.

(b) Facilitating Exchanges Between Military Academic Institutions – Exchange programmes between war colleges and similar military academic institutions can facilitate a better understanding of each other’s views on various contentious issues. More importantly, mutual exchanges during these courses can help in building inter-personal relations, as well as an understanding of doctrinal precepts including issues pertaining to weapons of mass destruction (WMD) and non-traditional security threats. A permanent participation of officers from both countries at the National Defence College (NDC)/National Defence University (NDU) and war colleges involving all the three services could be considered.

(c) Strengthening Communication – Perhaps the most challenging aspect of a relationship is communication. While the ‘Wuhan Sprit’ is often characterised by the building of spirit of `Strategic Communication’, yet it is the operational and tactical communication that leaves much to be desired. The first major hurdle is language.  There are very few Chinese and Hindi language experts in each other’s militaries.  Resultantly, stand-offs and confrontations at the tactical level cannot often be easily resolved due to the lack of knowledge of the other’s language. A concerted effort is therefore required to train military personnel in each other’s language schools in order to build a cadre of translators and interpreters. 

Secondly, it would augur well to have a hotline at the Corps/ Military District levels similar to the ones existing between the operations branches at the highest level. Even exchange of radio frequencies and call signs for emergencies such as inclement weather, rescue of patrols, casualty evacuation, etc. can be beneficial in improving communications at the tactical level. Thirdly, the existing robust system of border meetings can be further improved through joint patrolling at mutually agreed schedules. While a beginning has been made, these can be further strengthened to prevent an inadvertent miscalculation between the two militaries.6 It will also help build confidence among the local population who are key stakeholders in the resolution of border issues.

(d) Jointly Tackling Non-Traditional Threats – The vast and inhospitable LAC is a test of human endurance. Avalanches, floods and landslides are a common occurrence, which occasionally cut off communication and road/rail networks, affecting communities on both sides. Often, border posts are also cut off or buried in heavy snow. Medical emergencies are a common occurrence as well. Humanitarian aid to each other’s people can deepen the bonds of goodwill and empathy between them. Protocols and standard operating procedures (SOPs) to enhance cooperation in such emergencies can be a positive step in further enhancing the CBMs.

Conclusion

The M2M initiatives carry considerable weight in the overall engagement between nations. The incremental and calibrated improvement in the India-China defence ties, despite bouts of estrangement, has withstood the test of time. It has helped in deferring confrontation. It is axiomatic that as India explores a more meaningful relationship of ‘cooperation and competition and not confrontation’ with China, there is a need to ensure that the borders are peaceful. This way energies could be devoted to issues of consonance and convergence rather than dissonance and divergence. The next step in building M2M relations would thus provide the required impetus to further accelerate the process of strengthening peace and stability along the LAC.

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

• 1. Vandana Menon and Nayanika Chatterjee, “Remembering the war we forgot: 51 years ago, how India gave China a bloody nose,” The Print, October 01, 2018.
• 2. “India-China Informal Summit at Wuhan,” Press Release, Ministry of External Affairs, Government of India, April 28, 2018..
• 3. “Translation of Prime Minister's intervention at the SCO Summit 2019 (June 14, 2019),” Ministry of External Affairs, Government of India, June 15, 2019.
• 4. “India, China to hold 70 events to mark 70 years of diplomatic ties,” ANI, June 13, 2019.
• 5. “Second India-China Maritime Affairs Dialogue,” Press Release, Ministry of External Affairs, Government of India, July 13, 2018.
• 6. Sushant Singh, “Staggered patrols, meetings, new drills lower Sino-Indian border tensions,” The Indian Express, July 13, 2019.