India: corruption affecting investment and economic growth December 13, 2012Posted by southasiamasala in : Future Directions International, Guest authors, India , 1 comment so far
Transparency International released the results of its annual Corruption Perceptions Index on 5 December 2012. India was ranked 94 out of 174 countries in corruption, a claim highlighted by the scandals that have hit the Indian National Congress-led government this year.
India, and the Congress-led United Progressive Alliance government in particular, have felt increasing pressure over the levels of corruption. This year’s Corruption Perceptions Index (CPI) illustrates that although the situation has improved since last year, an underlying culture of corruption still exists in India. Such endemic corruption may cause a decline in India’s attractiveness for foreign direct investment (FDI).
India-Pakistan visa deal: a glass half empty? September 14, 2012Posted by aungsi in : Gordon, Sandy, India, Pakistan , 1 comment so far
On September the 8th, India and Pakistan agreed to liberalise their visa arrangements. The deal came during three day talks between Pakistani foreign minister Khar and Indian counterpart Krishna at Islamabad. Under the deal eight categories of visa will be liberalised, including the provision of visa on entry at the land border for the elderly and young, and most importantly, the provision of multiple entry and multiple city visas for business people with turnovers of over Rs 3 million annually.
The latter is particularly significant in view of recent trade developments. These include Islamabad’s decision to grant most favoured nation (MFN) status to India – which had been granted by India to Pakistan in 1996. Pakistan has promised by December this year to grant MFN to India by eliminating the system allowing only stipulated items to be traded in favour of a small ‘negative’ list covering defence-related and other sensitive items. India has also liberalised its regime by agreeing to remove yarn and textiles from its ‘sensitive’ list and allowing Pakistani businesses to set up in India.
The India–US–China–Pakistan strategic quadrilateral May 14, 2012Posted by southasiamasala in : India, Merrington, Louise, Pakistan , Comment
Louise Merrington, ANU
Although the disputed border between China and India is often highlighted as the major sticking point in Sino–Indian relations, in reality it has remained relatively peaceful since the end of the 1962 war, and the potential for overt military conflict in the region remains minimal.
Of much greater concern is the strategic quadrilateral relationship in South Asia involving China, India, the United States and Pakistan. It has both regional and wider implications. At the heart of this matter is the India–Pakistan conflict over Kashmir, and continuing US involvement in Afghanistan and Pakistan.
The relationships between these four actors are extremely complex. China’s support for Pakistan in its conflict with India is a serious and ongoing source of tension in the Sino–Indian relationship, while the US relationship with Pakistan is looking increasingly fraught even as its relationship with India improves in the wake of the 2008 civilian nuclear deal. Growing closeness between India and the US has caused some concern in China about the possibility that the US may be establishing a policy of containment or encirclement, and this concern in turn affects China’s relationship with both the US and India. Understanding this complex web of relationships is key to understanding the issues which are at the heart of China–India relations and which affect markedly how these two countries interact in the region.
Indian car sector booms but transport infrastructure lags February 13, 2012Posted by southasiamasala in : Guest authors, India , Comment
Guest author: Mahendra Ved
Reprinted from East Asia Forum, 7 February, 2012
While the Indian car sector is travelling in the fast lane, road and public transport projects have not kept pace. Indians bought about 2.5 million cars last year, worth US$30 billion, while another half a million were exported.
This year, assuming that car-loan rates decline and the economy improves, the market could grow by 10 to 12 per cent — and even if rates remain static, the car market will still grow by 5 to 7 per cent. But even these figures pale in comparison to the 30 per cent growth experienced in 2010, at which time interest rates were lower and the economy was booming, and the double-digit annual sales throughout the 2000s. No wonder global automakers scrambled to attend the 2012 Delhi Auto Expo earlier this year, where some 60 new models were launched.
China-India relations in 2012: bilateral ties set to expand January 27, 2012Posted by southasiamasala in : DeSilva-Ranasinghe, Serge, Future Directions International, India , Comment
First published in Future Directions International on 25 January 2012
After holding talks for the 15th round of boundary negotiations in New Delhi on 16-17 January, China’s State Councillor, Dai Bingguo, and India’s National Security Advisor, Shivshankar Menon, signed the ‘India-China Agreement on the Establishment of a Working Mechanism for Consultation and Co-ordination on India-China Border Affairs’, which will be headed by high-level diplomatic and military officials from each country.
Building on the spirit of previous border agreements signed in 1993, 1996 and 2005, the 2012 accord is an important practical and symbolic step towards normalising bilateral ties, as both countries pledge to build what has been officially termed the ‘India-China Strategic and Co-operative Partnership for Peace and Prosperity’.
From a broader strategic perspective, the new working mechanism is a clear indication that China and India see increasing benefit from peaceful relations, although they remain strategic rivals competing for regional influence and engage in contradictory and counterproductive acts.
CHOGM: our complex relationship with India November 1, 2011Posted by southasiamasala in : Guest authors, India , Comment
First published in The Conversation on 26 October 2011
India is one of Australia’s largest trading partners – and yet, our relationship at times appears hopelessly fraught. This week, Prime Minister Julia Gillard ruled out changing the government’s stance on uranium exports to India. This has been an increasingly contentious issue between the two countries as India seeks to further expand its nuclear-powered electricity to meet its growing energy needs. With the announcement that India will significantly ramp up its manufacturing sector to create 100 million jobs over 10 years, this pressure will only increase.
In August, India’s Prime Minister Manmohan Singh unexpectedly withdrew from CHOGM, opting instead to send vice president Hamid Ansari. Media reporting of concerns of racism towards Indian students has also done little to perpetuate positive views from both countries.
Emerging economic power
There is a perception that the Australian government has been unable to establish an optimal relationship with India – as a diplomatic cable leaked to whistleblower website Wikileaks revealed in March. Yet, why this is the case isn’t exactly clear. Like Australia, India was relatively unscathed by the global financial crisis. It is the fourth-largest economy in the world by purchasing power parity and the 11th by GDP. While its rate of growth has recently slowed to 7.7% against a target of 9%, India’s Reserve Bank has raised rates yet again in a bid to combat inflation.
There are 55 Indians with assets over $1 billion on the Forbes Rich List – seven are in the top 100, two are in the top 10. By the end of last year, India was our seventh largest two-way trading partner (up from 10th in 2008) and our third largest export market. By contrast, the United Kingdom is our fifth largest trading partner. In return, Australia is India’s sixth largest trading partner.
At a diplomatic level, India continues lobby for a permanent seat on the United Nations Security Council, while we are lobbying for one of the rotating seats. There is a Strategic Partnership between Australia and India and a Bilateral Investment Promotion Treaty between the two countries. We are negotiating a Free Trade Agreement. So there is potentially much in common. (more…)
The Indian prime minister’s empty chair October 31, 2011Posted by southasiamasala in : India, Weigold, Auriol , Comment
Indian and Australian media have trawled backwards and perhaps forwards, over the message to Australia’s Prime Minister, Julia Gillard, in the Indian Prime Minister, Manmohan Singh’s decision announced in August, that he would not attend the Commonwealth Heads of Government Meeting (CHOGM) in Perth, taking place this last weekend in October.
Australian print media, notably the Financial Review on 28 October and The Weekend Australian, 29-30 October, have linked Manmohan Singh’s remarkable absence to Australia’s reversal of its agreement to sell uranium to India after Labor won the 2007 election.
Some Indian media were quick to correct that impression, pointing out that their Prime Minister has a heavy schedule of multilateral meetings in November (as has Julia Gillard) but also to indicate that Vice President Hamid Ansari who is in Perth in place of Manmohan Singh is expected to raise the issue of Australian uranium sales again.
China’s investment spurs Bangladesh development June 22, 2011Posted by southasiamasala in : Bangladesh, DeSilva-Ranasinghe, Serge, Future Directions International, India , Comment
This article was first posted in Future Directions International on 15 June 2011
On 9 June 2011, Bangladesh signed a loan agreement worth US$211 million ($198 million) with the Export-Import Bank of China to upgrade the country’s telecommunications network. Such initiatives by China to develop critical infrastructure are illustrative of the central role it has played in strengthening Bangladesh’s economy and connectivity to the region.
Bangladesh established formal relations with China in 1975 and thereafter bilateral relations were steadily enhanced by frequent diplomatic visits to both countries. Subsequently, in 1986, the Bangladesh-China People’s Friendship Association was formed, which helped set the pattern in two-way trade and investment, especially throughout the 1990s, fostering China’s emergence as a vitally important partner and ally.
Indeed, from the time relations were first established until October 2000, China provided cumulative assistance worth US$217 million ($205.6 million) to Bangladesh. In the same year, bilateral trade reached an unprecedented high at US$715 million ($677.6 million).
Later, in 2002, on a visit to Bangladesh, Chinese Premier Wen Jiabao signed nine bilateral agreements to enhance co-operation in a variety of fields. Among the crucial agreements signed was a defence co-operation accord, which strengthened China’s position as a key supplier of weapons, equipment and ammunition to the Bangladeshi military. ‘Bangladesh wanted time-befitting armed forces for the country. China will co-operate with Bangladesh for this purpose,’ stated Morshed Khan, the former Bangladeshi Foreign Minister. He added: ‘[The] intention is there to co-operate in defence sector; now the two sides will co-operate with each other. This umbrella agreement is not directed against any country and would not affect Bangladesh’s relations with India.’
India-Australia: skepticism beyond the economics March 17, 2011Posted by southasiamasala in : Guest authors, India , 1 comment so far
Guest author: Nabeel A. Mancheri, Postdoctoral Associate, National Institute of Advanced Studies, Bangalore
This article was first posted in East Asia Forum on 16 February 2011.
Recent developments in India-Australia relations indicate that both countries are now rigorously advancing their international partnership. There has been increased engagement between the two, with a greatly expanded diplomatic presence. There are many developments on all fronts — economic, political and strategic — yet deep engagement between the two countries remains elusive for a number of reasons.
Economic relations between Australia and India have improved in recent years. India is now Australia’s third-largest export market and its fifth-largest trading partner. Australia is India’s sixth largest trading partner. In 2009-10, India’s exports to Australia stood at just US$1.38 billion, while imports amounted to a whopping US$12.4 billion, translating into an Indian trade deficit of about US$11 billion with Australia. At the same time Australia’s and India’s relative importance to each other has grown. The share of Australia in India’s imports is 3.5 per cent and Australia exported about 8.1 per cent of its total exports to India and imported around 0.9 per cent of its total imports from India.
Looking west again – to the Indian Ocean and India February 16, 2011Posted by southasiamasala in : India, Weigold, Auriol , 2comments
An article in The Australian, published on 31 March 2010, notes Australia’s inconsistent interest in the Indian Ocean Region (IOR) in its headline ‘We must look west to the Indian Ocean …’. It goes on to remind that Australia should be a ‘pre-eminent country’ in the IOR and notes that a ‘new maritime great game’ is visible as ‘strategic competition between India and China’ grows. These ideas, verging on directives, are drawn from Bateman’s and Bergin’s Australian Strategic Policy Institute Paper, Our Western Front: Australia and the Indian Ocean, launched by Australia’s former Foreign Minister, Stephen Smith, on the same day in 2010. The Australian concluded its article by reporting that Australia’s policies vis-a-vis the Indian Ocean have been ‘relatively opaque and spasmodic’, and should be embedded in the mainstream of foreign policy.
Despite its inconsistent and often neglectful approach to engagement in the Indian Ocean as a whole, Australia has had an historical interest in the Indian Ocean, which is vital to its import and export markets and sea-lines communications. It relies on Indian Ocean sea-routes and access points for its globalised trade, and the ever-increasing importance of security and stability demand deeper engagement: geographically Australia is well-placed to play a prominent role in the Indian Ocean region.
Crew of HMAS Melbourne board a pirated Chinese tanker in the Indian Ocean, Photo ABC