THE ART AND CULTURE

1. WHAT IS THE CONTROVERSY AROUND ODISHA’S JAGANNATH TEMPLE HERITAGE CORRIDOR PROJECT?

THE CONTEXT: The Archaeological Survey of India told the Orissa High Court this month that no permission was granted to the State government for construction around temple.

THE EXPLANATION:

• The Archaeological Survey of India (ASI) said on May 17, that a sculpture of a lion, which possibly dates back to the Ganga dynasty, was found during excavation for the controversial heritage corridor project around the 12th century Jagannath Temple in Puri, Odisha.
• This is the third such lion sculpture found during the excavation work. The East Ganga dynasty had ruled Kalinga, as Odisha was called in ancient times, from the early fifth century to the early 15th century.
• On May 9, the ASI noted in a report submitted to the Orissa High Court that there was every possibility of archaeological remains at the heritage site being destroyed due to the excavation work for the corridor.

What is the Puri Heritage Corridor Project?

• The Puri Heritage Corridor Project is a ₹3,200-crore redevelopment project of the Odisha government in Puri to create an international heritage site, including the 800-year-old Jagannath temple. Under the umbrella project falls the Shree Jagannatha Heritage Corridor (SJHC) or the Shree Mandira Parikrama Project, for the revamp of the area around the temple.
• Plans for the corridor had been in the making since 2016, with the State Assembly unanimously passing a resolution for the effective implementation of the Project’s plan in February last year. Soon after, the plan was approved by the Shree Jagannatha Temple Administration (SJTA). The Odisha government has listed three objectives for the revamp of the area around the temple- the security of the temple, the safety of devotees, and the creation of a religious atmosphere for devotees.
• The government allotted initial funds of ₹800 crore for the first phase of the Project from its Augmentation of Basic Amenities and Development of Heritage and Architecture at Puri (ABADHA) scheme introduced in 2019.
• Under the scheme, 22 development projects are planned, including the temple corridor, redevelopment of the SJTA building, the creation of a reception centre with a capacity of 6,000 for devotees visiting the temple, a cultural centre including a library, the Bada Danda (grand road outside the temple) Heritage Street scape Project, a plan to improve temple amenities such as building cloakrooms and toilets, a control and command centre, multilevel parking, the revival of the Musa River, and the Puri Lake Project. While the project has been taken up by the Odisha Bridge and Construction Corporation (OBCC) under the State’s Works Department, Tata Projects is the implementing authority.
• n February this year, when the OBBC started excavation work within 75 metres of the Jagannath temple to build public amenities such as toilets and cloakrooms, experts and members of civil society objected to the use of heavy machinery for digging, citing the possibility of an adverse impact on the 12th Century temple. Questions started being raised about whether the construction around the temple had the due permissions and clearances.
• The Jagannath temple has been designated a monument of national importance by the Archaeological Survey and is a centrally protected monument. As per the Ancient Monuments and Archaeological Sites and Remains (Amendment and Validation) Act (AMSAR), construction is prohibited within a 100-metre periphery of a protected area.
• The area extending to 200 metres around the monument in all directions is called a regulated area. As per the provisions of the AMSAR Act, the National Monuments Authority (NMA), set up in 2011 under the Ministry of Culture, is charged with protecting and preserving ASI-protected sites by managing the prohibited and regulated area in the periphery of such a site. If construction has to be undertaken in the regulated or prohibited area, permission from the NMA is required.
• Notably, the term “construction” as defined in the AMSAR Act does not include the construction of public toilets, urinals, and “similar conveniences”. It also does not include works for the supply of water, electricity or “provision of similar facilities for publicity”.
• Besides, ​​an impact assessment is also required to be done by the NMA before development around a monument if the built-up area of the monument is beyond 5,000 square metres. The built-up area of the Jagannath temple stands at 43,301.36 sq metres.

THE SOCIAL ISSUES

2. GLASS CLIFF

THE CONTEXT: A phenomenon that explains how women are promoted to leadership positions during times when an organisation is under performing, ensuring their failure.

THE EXPLANATION:

• The term ‘Glass Cliff’ was coined by researchers from the University of Exeter, United Kingdom after studying the disparity between the promotion of men and women in corporate organisations.
• They looked at the 100 companies included in the Financial Times Stock Exchange (FTSE) Index and found that women were more likely to be promoted to higher positions when the company was performing poorly or going through a crisis. By doing this, women were set up for failure which was likened to standing at the edge of a cliff.
• On November 11, 2003, an article titled, ‘Women on board: help or hindrance?’ was published in The [London] Times, where author Elizabeth Judge claimed that despite all the discourse on breaking the glass ceiling, women’s participation as members in London’s boardrooms worsened the companies, especially its share price performance. She came to the conclusion that appointing more women to company boards was detrimental to an organisation’s performance.
• It was this article that prompted Michelle Ryan and Alexander Haslam from the University of Exeter to study the phenomenon in 2005. Taking the sample of 19 companies in the London FTSE 100 that appointed male and female board members in 2003 and looking at their performance five months before and three months after board appointments, it was found that there was greater variability in company performance preceding and following the appointment of a woman.
• It was also found that women were appointed as board members mostly during an overall market slump or when the company was experiencing turbulence or when there was a decline in performance. Men, on the other hand, were appointed when the company was relatively stable, making sure that their success rates as board members or in higher positions were better.
• Thus, counter to Judge’s claims, the appointment of women was not related to the decline in company performance. The study further showed that, even during times of crisis, womens appointment to leadership positions despite its precariousness and risk, proved positive for the company, because in many cases its performance improved.
• The glass cliff is a phenomenon that reinforces stereotypes about women not being ideal in leadership positions. Although glass cliff mainly refers to the obstacles faced by women, the term also applies to the challenges faced by minorities and other marginalised groups when promoted to leadership roles. The phenomenon occurs in many different fields, including finance, politics, technology, and academia. When a company is performing poorly, it is associated with bad press, financial difficulties, and the need to restructure.
• During such periods, the company protects its male employees and promotes female employees to leadership positions. By promoting women, the company seems progressive but also sets them up for failure. Further, when the company fails to succeed, women can be replaced with their male counterparts, with the company also having a scapegoat to blame for their failures.
• Despite circumstances and studies that show that precarious positions do not necessarily appeal to women compared to men, women are more likely to take up these leadership roles because they rarely get other opportunities for advancement. Men, on the other hand, tend to turn down risky roles, as they are sure to get better opportunities for leadership positions elsewhere or when the companies return to stability.
• One of the notable examples of the phenomenon was when Marissa Mayer was appointed as the CEO of Yahoo! in 2012 after the company lost significant market share to Google. Despite the condition of the company in which she took over when she resigned in 2017 after failing to improve the company’s performance, critics attributed the failure of the company to her performance and effort, rather than to the environment in which she was promoted. She was later replaced by Thomas McInerny, a white male.
• There are many possible explanations as to why this effect prevails. One of the theories explains that when situations of stress or crises occur, women are preferred over men. This ‘think crisis think female’ theory perceives women to possess the qualities that help them deal with stressful situations better than men. Since stressful situations involve emotional management, women who are assumed to be better managers of people’s feelings and problems, are expected to make better leaders during such periods.
• Contrasting this, the ‘think crisis think not men’ theory explains how women are perceived to be less valuable than men, making it easier for the companies to throw them under the bus.
• A third theory explains how when a company is going through a crisis, bringing about a significant change in its structure can hold positive connotations. Thus, in order to signal a drastic change, especially to their relevant stakeholders, women or people from minority communities are promoted to positions of leadership as it deviates from the conventional idea of leadership.
• While the ‘glass ceiling effect’ hinders women and people from minority communities from advancing in their careers after a certain level in various organisations, the ‘glass cliff effect’ ensures that even when promoted, the leadership positions given to these groups are during periods of crisis, so that the company can look progressive and yet replace and blame them for the underperformance of the organisation. Both processes thus, help maintain the status quo and prevent women and members of minority communities from reaching positions of leadership.

 THE INTERNATIONAL RELATIONS

3. ALL ABOUT THE QUAD, THE CURRENT SUMMIT, AND INITIATIVES

THE CONTEXT: The ongoing Russia-Ukraine crisis has triggered geopolitical shifts, driven up global inflation, and affected supply chains amid a slew of Western sanctions on Moscow. In March this year, Quad leaders discussed the situation in Ukraine in an unscheduled virtual meeting called by Mr. Biden.

THE EXPLANATION:

• The Quad is an informal multilateral grouping of India, the U.S., Australia, and Japan aimed at cooperation for a free and open Indo-Pacific region. The region, composed of two oceans and spanning multiple continents is a hub of maritime trade and naval establishments. While not stated explicitly by the leaders, one of the major basis for the grouping is to check China’s growing influence in the region.
• After the Indian Ocean Tsunami in 2004 wreaked havoc in the region now called the Indo-Pacific, India stepped up its rescue efforts not just in Tamil Nadu and the Andaman and Nicobar islands but also provided swift assistance to its maritime neighbours: Sri Lanka, the Maldives and Indonesia. Soon, the disaster relief effort was joined by three other naval powers — the U.S., Australia and Japan, with then U.S. President George W. Bush announcing that the four countries would set up an international coalition to coordinate the massive effort required.
• While the charge of the rescue operations was handed over to the United Nations shortly after, and the immediate mission of the four countries had ended, it led to the birth of a new framework: the Quadrilateral or Quad.
• Then Japanese Prime Minister Shinzo Abe, who had been promoting the idea of an “arc of prosperity and freedom” that brought the Quad countries closer together, developed the concept, and Prime Minister Manmohan Singh discussed it with him during a summit in December 2006. The grouping held a meeting in May 2007 but did not release an official statement.
• The 2007 Indo-U.S Malabar naval exercises also saw the partial involvement of Japan, Australia and Singapore. The exercises and coordination were seen by China as an attempt to encircle it, which termed the grouping as trying to build “an Asian NATO”.
• The Quad lost momentum post the 2007 meeting as the effort “dissipated amidst member leadership transitions, concerns about economic repercussions from China, and attention to other national interests,” according to the U.S Congressional Research Service.
• The grouping was only revived an entire decade later in 2017, at a time when all four countries had revised their assessment of the China challenge; and India had witnessed the Doklam standoff. Leaders of all four countries met in the Philippines for the ‘India-Australia-Japan-U.S.’ dialogue, not referred to as a Quad dialogue to avoid the notion of a “gang-up”. Even to this point, a set of objectives, areas of cooperation, and even the definition of Indo-Pacific were not fixed among Quad members.
• March 2021 was the first time, Mr. Biden, Mr. Modi, Australia’s outgoing Prime Minister Scott Morrison, and then Japanese PM Yoshihide Suga met virtually for an official Quad summit, releasing for the first time a set of objectives for the grouping in a joint statement called the ‘The Spirit of the Quad’.
• According to a statement released by the Ministry of External Affairs about the agenda of the May 24 summit, “The Leaders will review the progress of Quad initiatives and Working Groups, identify new areas of cooperation and provide strategic guidance and vision for future collaboration”.
• The Quad summit is expected to discuss the Russian war in Ukraine, and the impact of three months of Western sanctions. India is the only member of the Quad that has not joined sanctions against Russia, while also ramping up its intake of Russian oil, buying more oil in March and April, an estimated 40 million barrels more than it had in all of 2021.
• President Joseph Biden would also be unveiling the ‘Indo-Pacific Economic Framework’ (IPEF) in Tokyo on May 23, which, according to Reuters is a programme to bind countries in the region more closely through common standards in areas including supply-chain resilience, clean energy, infrastructure and digital trade.
• Modi would be attending the launch of the plan, seen as a significant step towards building economic ties amongst Quad countries, but India is likely to be cautious about its participation in IPEF as it could be seen as a counter to the 15-nation Regional Comprehensive Economic Partnership (RCEP) and the 17-nation Trans-Pacific Partnership (TPP) that China is a member of.
• Besides, the Financial Times reported that Quad members would be launching a plan to curb illegal fishing in the Indo-Pacific region. Several countries have objected to Chinese fishing vessels often violating their exclusive economic zones resulting in economic losses, while also engaging in deep-sea trawling, which causes environmental damage.

4. CAUTION AND CLARITY: ON THE U.S.-LED INDO-PACIFIC ECONOMIC FRAMEWORK FOR PROSPERITY

THE CONTEXT: In a sudden decision not previously intimated, India became one of a 13-nation economic initiative led by the U.S., as President Joseph Biden unveiled plans for an Indo-Pacific Economic Framework for Prosperity (IPEF).

THE EXPLANATION:

• The initiative is touted as a substantial step by the U.S. as part of its decade-old “pivot to Asia”, and an attempt at putting some “economic heft” into its Indo-Pacific presence that has been on the decline after its decision to quit the Transpacific Free Trade Agreement, the CPTPP, in 2017. Officials say the IPEF framework has four “pillars”: supply-chain resilience; clean energy, decarbonisation and infrastructure; taxation and anti-corruption; and fair and resilient trade.
• Biden’s visit to Japan and South Korea, attendance at the Quad summit and helming the IPEF launch is also aimed at reassuring the Eastern hemisphere about the U.S.’s focus. India’s joining is an equally strong statement of commitment to Indo-Pacific goals, and to broadening regional economic cooperation, particularly after it walked out of the 15-nation RCEP. It is significant that all IPEF members, other than India and the U.S., are a part of the RCEP free trade agreement, and yet have chosen to be part of the U.S.-led initiative.
• Despite the strong signalling from all sides, however, there are many aspects to the IPEF that bear further scrutiny. Monday’s launch only signals the willingness of the 13 countries to begin discussions on the contours. Much will depend, as Prime Minister Narendra Modi stressed, on how inclusive the process is. Second, U.S. officials have made it clear that it is not a free trade agreement; nor will it discuss tariff reductions or increasing market access, raising questions about its utility. Shorn of the rhetoric of Indo-Pacific cooperation, there must be more clarity on its framework.
• The four pillars also lend themselves to some confusion, drawing into question whether there is enough common ground among the 13 countries that are part of very different economic arrangements, as well as outliers (the U.S. and India), to set standards together, or be open to issues that vary for each country. The U.S.’s statement that the IPEF is essentially focused on “American workers” also raises questions on whether increasingly protectionist global trends will chafe. Each of the IPEF countries has considerable trade interests in China, with most having large trade deficits. So, it remains to be seen how much they will be willing to sign on with the IPEF.
• Already three ASEAN countries, Cambodia, Laos and Myanmar, have decided to stay out of the framework’s launch. Above all, given the fact that the U.S.’s previous initiatives (the Blue Dot Network and the Build Back Better Initiative) have made little headway in changing the region’s infrastructural needs, the IPEF faces a credibility challenge. Negotiators will need to move with both caution and clarity before making any big promises on its benefits for the region.

 THE ENVIRONMENT AND ECOLOGY

5. G20 CLIMATE GOALS JUST WON’T DO THE JOB

THE CONTEXT: None of the G20 countries have made climate commitments consistent with limiting global temperature rise to 1.5 degrees Celsius, as the Paris Agreement stipulates, data from a new report showed.

THE EXPLANATION:

• Australia, Brazil, Indonesia and Mexico submitted Nationally Determined Contributions (NDC) weaker than or on a par with previous versions, the report titled Keeping 1.5C Alive by the United States and the United Kingdom-based groups E3G and ECIU, and WRI, noted.
• The report assessed the climate goals of the G20 countries, which are responsible for around 75 percent of the world’s greenhouse gas (GHG) emissions. The countries are signatories to the Paris Agreement, a global treaty that aims to halt global warming.
• Brazil’s revised NDC has actually worsened as they made changes to the baseline year, and the rate of deforestation in the country has accelerated, the report stated. Egypt, India and Turkey did not submit new NDCs.
• China, Russia, and Saudi Arabia require much higher ambition in their NDCs, while the remaining countries have updated their NDCs but need to implement them to achieve their stated targets, according to the report. The UK came the closest to a 1.5C consistent target.
• It was decided at the 26th Conference of Parties (CoP26) to the United Nations Framework Convention on Climate Change (UNFCC) that countries would “revisit and strengthen” their commitments in 2022. This means they have to establish more stringent goals to cut GHG emissions.
• This should be done ideally before the next summit, CoP 27, to be held in Egypt in November 2022. But the “geopolitical context has changed considerably since CoP26, with Russia’s invasion of Ukraine in February 2022”, the report observed.
• The evidence is all around. Combatting high energy and food prices, and securing energy security are now the focus, rather than decarbonisation and climate action. The European Union is attempting to wean itself off Russian natural gas, and US is desperate to fill the vacuum with exports of its liquefied natural gas (LNG).
• The climate goals of US are “all but dead” with President Joe Biden’s climate-focused spending proposal stalled in Congress, held hostage by Joe Manchin, a politician with personal profits linked to coal.
• Meanwhile, China, the world’s largest coal consumer, has doubled down on its production of the polluting fuel, in the face of energy shortages.
• The new report calls India a “staller” since it is yet to submit its new NDC to the UNFCCC. In March 2022, India’s Environment Minister clarified that this will be done before CoP 27.
• India announced new goals at CoP26 such as a 500 gigawatts non-fossil energy target and carbon emission reduction of one billion tonne. There is, however, a general agreement among civil society that all the announced targets may not make it into the final submission. These have been called the “boldest new commitments at CoP26” in the report.

THE ECONOMIC DEVELOPMENT

6. INDIA MUST STABILISE THE VALUE OF THE RUPEE

THE CONTEXT: In May second week, the forex reserve of India has reduced to $595 billion from $635 billion in September 2021. Existing reserves are about 18% of nominal GDP which is a comfort zone.  Despite this, the value of rupee against US dollar fell almost by 6%to 77.4 in May 2022 from `73 in September 2021.  Such steep fall reveals that the value of the rupee is vulnerable to the net outflow of forex.

THE EXPLANATION:

• Historically, India has been in the trade deficit (goods & services) and therefore, the forex reserves are generally built from the “capital receipts” in shape of debt and equity.
• Net “inward remittance” in the current account is about$60-65 billion which is consumed in the part financing of trade deficit and mostly, India had been in “current account deficit”.
• The trade deficit is somewhat similar to “operating loss” and the current account deficit is similar to the”net loss” of a Nation in the international trade. This is not a good scenario for the stability of rupee. Ideally, India should be in “trade surplus” for a stable rupee. For appreciation of rupee value, India should have”current account surplus” on consistent basis.
• Import of energy (Petroleum & Coal) must be partially replaced with domestic production. India is having enough reserves of coal and its production must be increased through mineral and coal sector reforms.  India has also good reserves of oil and gas, as quoted by ex-petroleum Minister Veerappa Moily and also by Vedanta’s Anil Agrawal. However, this needs huge spending in prospecting.
• For replacing imports of electronics and defence items, Government has taken good steps; that may be pushed. Similar steps are also needed for other major imports. Government should bring a white paper for boosting exports and replacing imports with domestic production. Besides this, there is a vast scope of export of services in the field of tourism, consultancy (legal, accounting and engineering), shipping, education and health sector; that also needs a separate white paper.
• The financial savings of India are not adequate for financing the investment needs and therefore, the dependency upon the inflow of global funds shall continue for few more years. As an interim measure, the physical savings in gold must be reduced to almost nil through financial innovation, as suggested by author in his Book ‘Turn Around India’. Huge import of gold is indeed a drag on the trade balance.
• In 1992,the regime of the fixed exchange rate was ended. Thereafter, the value of rupee was almost stable from the year 2000 to 2010, as evident from the table below. It means that; it is feasible to maintain the stability of rupee. Simultaneously, the reasons for the subsequent fall in rupee value must be analysed and resolved. Total financial assets in the world are exceeding $200 trillion. Global investors are in search of such destinations which provide them a high return in terms of US dollars. In case, India succeeds in achieving stability of Rupee, the global funds shall rush in. In such a case, it is imperative that global funds are mostly used for the investment in productive assets and not for consumption.
• Failing which, the inflation might aggravate and the servicing of global funds might pose problem. For boosting investment in productive assets, the regulatory easement and the simplification of Tax laws are the prerequisites.
• The external risks, if any, arising due to outflow of forex and depreciation of rupee shall be totally eliminated. Rather, due to surplus forex reserves, the diplomatic relation of India shall improve, particularly with neighboring nations. And thus, India shall command high respect in the global fraternity. 

THE PRELIMS PRACTICE QUESTIONS

QUESTION FOR 25TH MAY 2022

Q1. Consider the following statements about Jagannath Puri temple:

1. It is built by kings of Pala dynasty
2. It is an example of Kalinga Architecture

Which of the statements given above is/are correct?

a) 1 only

b) 2 only

c) Both 1 and 2

d) Neither 1 nor 2

ANSWER FOR THE 24^{th of} MAY

Answer:D

Explanation:

• Vitamin D is needed for a process known as calcium homeostasis which is the maintenance of constant concentration of calcium ions in the body. This is needed for, among other things, bone development and strength, and its deficiency is a cause of conditions such as rickets and osteoporosis.
• Other diseases that are associated with vitamin D deficiency are cancer, Parkinson’s disease and dementia.

THE CONTEXT: India and Australia signed an Economic Co-operation and Trade Agreement (ECTA) with an eye on doubling bilateral trade to $50 billion in the next five years and easing the movement of people, goods, and services across borders. The negotiations for India-Australia ECTA were formally re-launched on 30 September 2021 (which were stalled since 2015) and concluded on a fast-track basis by the end of March 2022. This article analyzes different aspects of the deal and the significance of the bilateral trade for both countries.

THE ECONOMIC COOPERATION AND TRADE AGREEMENT (ECTA)

The Agreement encompasses cooperation across the entire gamut of bilateral economic and commercial relations between the two friendly countries and covers areas like:

• Trade-in Goods,
• Rules of Origin,
• Trade in Services,
• Technical Barriers to Trade (TBT),
• Sanitary and Phytosanitary (SPS) measures,
• Dispute Settlement, Movement of Natural Persons,
• Telecom, Customs Procedures,
• Pharmaceutical products, and
• Cooperation in other Areas.

KEY FEATURES OF THE AGREEMENT

PREFERENTIAL MARKET ACCESS:

Australia’s PMA to India: India will benefit from preferential market access provided by Australia on 100% of its tariff lines. This includes all the labour-intensive sectors which are of interest to India such as Gems and Jewellery, Textiles, leather, footwear etc.

India’s PMA to Australia: India will be offering preferential access to Australia on over 70% of its tariff lines. This includes lines of export interest to Australia which are primarily raw materials and intermediaries such as coal, mineral ores and wines, etc.

Both sides have also agreed to a separate Annexure on Pharmaceutical products under this agreement. This will enable fast-track approval for patented, generic, and biosimilar medicines.

SERVICES TRADE:

As regards trade in services, some of the keys offers from Australia in the services space include Quota for chefs and yoga teachers; a Post-study work visa of 2-4 years for Indian students on a reciprocal basis; mutual recognition of Professional Services and Other licensed/regulated Occupations, etc.

India has offered market access to Australia in around 103 sub-sectors and the Most Favored Nation in 31 sub-sectors from the 11 broad service sectors. This includes ‘business services’, ‘communication services’, ‘construction and related engineering services, and so on.

EXCLUDED TARIFF LINES:

India has kept many sensitive products in the exclusion category (29.8% of tariff lines) without offering any concession. These products include milk and dairy, chickpeas, walnut, pistachio nuts, wheat, rice, bajra, apple, sunflowers seed oil, etc.

The agreement also includes strict rules of origin to prevent any routing of products from other countries and provides for a safeguard mechanism to address any sudden surges in imports of a product.

SIGNIFICANCE OF INDIA AUSTRALIA TRADE AGREEMENT

AN ANALYSIS OF THE IND-AUS TRADE AGREEMENT

• Both India and Australia share a vision of a free, open, inclusive, and rules-based Indo-Pacific region, as well as cooperative use of the seas based on international law, including the United Nations Convention on the Law of the Sea (UNCLOS), and peaceful dispute resolution rather than unilateral or coercive actions.
• The India-Australia ECTA will strengthen the two countries’ already deep, close, and strategic relations by significantly increasing bilateral trade in goods and services, creating new job opportunities, raising living standards, and improving the general welfare of the two peoples.
• The India-Australia comprehensive interim free trade agreement is well-timed for both partners and will ensure an uninterrupted supply of key inputs to Indian industries, with Australian businesses gaining access to a more reliable alternative to China, which is resorting to sanctions against the Canberra.
• A special review mechanism is also envisaged for compulsory review after 15 years for certain aspects of the agreement in a time-bound manner. The review, if requested, is compulsory and has to be completed in six months. This is something new in bilateral trade relations which gives confidence in having a long-term cordial and collaborative relations wherein changes can be incorporated on mutually agreeable terms.
• India and Australia are members of the QUAD grouping, which also includes the United States and Japan, and bilateral ties will help strengthen cooperation and develop partnerships on several issues of common strategic concerns.

THE WAY FORWARD

• The government has successfully negotiated an excellent trade deal for businesses. However, Australia has 16 FTAs under operation which means accessing the Australian market wouldn’t be a cakewalk. India would have to work on improving its competitiveness, as in most trade sectors, it would be competing with China, ASEAN, Chile, Japan, Korea, and New Zealand, which have already-functional FTAs with Australia.
• Active diplomatic engagement would be required to make Australia fulfill its promise to amend its domestic tax law in order to stop taxation of the offshore income of Indian firms providing technical services to Australia. Once the amendment is made, the Indian tech companies would no longer be required to pay taxes on offshore revenues in Australia. This would enhance their competitiveness in the international market.
• India signed an FTA with the UAE in February 2022 and now an FTA has been negotiated with Australia. The success shall be used in negotiating its future FTA deals with Israel, Canada, the UK, and the EU.
• The India-Australia trade pact is the second big trade agreement signed by New Delhi in the recent past. It is in sharp contrast to India’s stand at the Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade agreement involving China and 14 other Asia-Pacific nations where India defended its stand by raising concerns about Chinese goods flooding the Indian market. India will have to forge several similar alliances, like the one with Australia, to make up for not being a part of RCEP. Furthermore, India needs to play this on the front foot and rise above political considerations and think in purely economic terms.

THE CONCLUSION: This agreement opens a big door into the world’s fastest-growing major economy for Australian farmers, manufacturers, producers and so many more. The India-Australia Economic Cooperation and Trade Agreement (ECTA) is a key step in enhancing bilateral economic ties between the two major Indian Ocean littoral states and reflects the growing strategic alignment between New Delhi and Canberra. While India’s strongest ties with Australia had hitherto largely centered around their common colonial legacy of cricket, best exemplified in the Border-Gavaskar Trophy, a more contemporary shared vision has emerged around the mutual need to strengthen their strategic and trade engagement.

Mains Practice Questions:

1. Elaborate on how the growing India-Australia economic and commercial relations can contribute to the stability in the Indo-pacific region?
2. India has recently had bilateral trade deals with UAE and Australia and is in talks with other countries also. How will the bilateral trade agreements help India in realizing the $5T economy dream? Substantiate.

ADD TO YOUR KNOWLEDGE

India Australia Bilateral Relations

HISTORICAL TIES:

• India and Australia established diplomatic relations in the pre-Independence period, with the establishment of the India Trade Office in Sydney in 1941.
• India and Australia bilateral relations have undergone transformational evolution in recent years, developing along a positive track, into a friendly partnership.
• This is a special partnership characterised by shared values of pluralistic, parliamentary democracies, Commonwealth traditions, expanding economic engagement, long-standing people-to-people ties and increasing high-level interaction.

STRATEGIC:

• The India-Australia Comprehensive Strategic Partnership initiated during the India-Australia Leaders’ Virtual Summit on 04 June 2020 is the cornerstone of our multifaceted bilateral relations.
• Both countries also held first India-Australia 2+2 Ministerial Dialogue in New Delhi in September 2021 with focus on open, free, prosperous and rules-based Indo-Pacific region.

ECONOMIC AND COMMERCIAL RELATIONS:

• India and Australia have been each other’s, important trading partners and bilateral economic and commercial relations have continued to enhance and deepen over time.
• Growing India-Australia economic and commercial relations contribute to the stability and strength of a rapidly diversifying and deepening bilateral relationship between the two countries.
• Australia is the 17th largest trading partner of India and India is Australia’s 9th largest trading partner.
• India-Australia bilateral trade for both merchandise and services is valued at US$ 27.5 billion in 2021.
• India’s merchandise exports to Australia grew 135% between 2019 and 2021.
• India’s exports consist primarily of a broad-based basket largely of finished products and were US$ 6.9 billion in 2021.
• India’s merchandise imports from Australia were US$ 15.1 billion in 2021, consisting largely of raw materials, minerals and intermediate goods.

DEFENCE:

• In 2014, both sides decided to extend defence cooperation to cover research, development and industry engagement.
• The first-ever Bilateral Maritime Exercise, AUSINDEX, was conducted in Visakhapatnam (Bay of Bengal) in September 2015. The most recent one was conducted in September 2021.
• In 2018, the Indian Air Force participated for the first time in Exercise Pitch Black in Australia.
• INS Sahyadri participated in Kakadu, the biennial exercise of the Australian Navy held in 2018, in which 27 nations participated.
• The 4th edition of AUSTRAHIND (Special Forces of Army Exercise) was held in September 2019.

MULTILATERAL ENGAGEMENT:

• Both countries have close cooperation in multilateral platforms like Food and Agriculture Organization (FAO) and G20.
• The Quadrilateral Framework (QUAD) of India and Australia along with the US and Japan emphasize the collective resolve to maintain a free, open and inclusive Indo-Pacific region.
• Australia was also included in Malabar Exercise in 2020, which now is an annual Naval exercise of the QUAD nations.

THE CONTEXT: The 14^thannual bilateral summit between India and Japan has held in New Delhi in March 2022. Indian Prime Minister Narendra Modi and Japanese Prime Minister Fumio Kishida participated in the summit. This article analyses the outcomes of the summit and the recent trajectory in India-Japan relations.

THE OUTCOMES OF THE SUMMIT

FOUR-POINT PLAN ON UKRAINE: India and Japan will:

• ‘not tolerate’ any unilateral and forceful change in the status quo of Ukraine or any country in the world,
• continue to push for a peaceful settlement of the conflict,
• jointly address the situation whenever needed, and
• work together in giving humanitarian aid and assistance to Ukraine.

ON INDO-PACIFIC:

• Both countries expressed their commitment to a free and peaceful Indo-Pacific. Moreover, the leaders showed their commitment to promoting peace, security, and prosperity in the Indo-Pacific region.

ON QUAD:

• The two PMs affirmed the importance of bilateral and plurilateral partnerships among like-minded countries, including the QUAD grouping between India-Australia-Japan and the United States.

ON CHINA:

• India raises China-LAC standoff with Japan.
• Japan raised the matter of the East China Sea and the South China Sea with regard to China’s growing belligerence there.

ON TERRORISM:

• Both the countries expressed deep concern about the growing threat of terrorism and underlined the need to strengthen international cooperation to combat terrorism comprehensively and sustainably.

ON INVESTMENT:

• Japan’s PMannounced an investment to the tune of $42 billion (JPY 5 trillion) in India over the next five years.

LIST OF AGREEMENTS/MOUs SIGNED

INDIA -JAPAN RELATIONS: A HISTORICAL PERSPECTIVE

• Begun in the 6th century when Buddhism was introduced to Japan.
• After World War II, in 1949, India started relations with Japan warmly.
• Japan and India signed a peace treaty and established diplomatic relations on 28th April 1952. This treaty was one of Japan’s first peace treaties after World War II.
• In the post-World War II period, India’s iron ore helped a great deal in Japan’s recovery from the devastation.
• Japan started providing yen loans to India in 1958, as the first yen loan aid extended by the Japanese government.
• The visit of then Japanese Crown Prince Akihito and Crown Princess Michiko in 1960 elevated the relations to a new level. A test of the reliability of Japan as a friend was witnessed in 1991 when Japan was among the few countries that bailed India out of the balance of payment crisis.

PROGRESS IN THE RECENT PAST

RECENT RELATIONS:

• Prime Minister Yoshiro Mori’s visit to India in 2000 provided momentum to strengthen the Japan-India relationship.
• In 2005, Japan-India annual summit started.
• In December 2006, the relationship was elevated to the “Global and Strategic Partnership”.
• In September 2014, upgrade the bilateral relationship to “Special Strategic and Global Partnership.”
• In 2015 both countries resolved to transform the Japan-India Special Strategic and Global Partnership into a deep, broad-based, action-oriented partnership, reflecting a broad convergence of their long-term political, economic, and strategic goals.
• The announcement “Japan and India Vision 2025 Special Strategic and Global Partnership Working Together for Peace and Prosperity of the Indo-Pacific Region and the World” started a new era in Japan-India relations.
• in October 2018, both countries reiterated their unwavering commitment to working together towards a “Free and Open Indo-Pacific”.
• In September 2021 both countries again concurred to further develop Japan-India relations and work closely toward the realization of a “Free and Open Indo-Pacific”.

COOPERATION IN SECURITY FIELDS:

• In 2008, “the Joint Declaration on Security Cooperation between Japan and India” was issued.
• ‘2+2” meeting, annual Defense Ministerial Dialogue, and Coast Guard-to-Coast Guard dialogue.
• JIMEX, EX DHARMA GUARDIAN, SHINYUU Maitri, and Dharma Guardian are some military exercises between both countries. Apart from these, both countries are participatory in Malabar naval exercises.
• In September 2020, the Agreement concerning Reciprocal Provision of Supplies and Services between the Self-Defense Forces of Japan and the Indian Armed Forces (so-called “Acquisition and Cross-Servicing Agreement” or ACSA) was signed. ACSA came into force on July 11th, 2021

ECONOMIC RELATIONS:

• In recent years, the economic relationship between Japan and India has increased.
• India was the 18th largest trading partner for Japan, and Japan was India’s 12th largest trading partner in 2020.
• Japan was the 4th largest investor for India in FY2020.
• Japanese private-sector’s interest in India is rising, and, currently, about 1,455 Japanese companies have branches in India. Maruti Suzuki, Toyota, Mitsubishi, Honda, and Hitachi are some of the major Japanese companies operating in India.
• Currency Swap Arrangement of USD 75 billion between both countries.

ECONOMIC ASSISTANCE:

• India has been the largest recipient of Japanese (Official Development Assistance) ODA loans for the past decades.
• Delhi Metro is one of the most successful examples of Japanese cooperation.
• Japan continues to cooperate in supporting strategic connectivity linking South Asia to Southeast Asia through the synergy between the ”Act East” policy and ”Partnership for Quality Infrastructure.”
• Besides, Japan and India had committed to building a High-Speed Railway in India by introducing Japan’s Shinkansen System, the flagship project of Japan-India relations.

CULTURAL RELATIONS:

• The year 2022 marked the 70th anniversary of the establishment of diplomatic relations between Japan and India. Various cultural events took place in Japan and India to promote mutual understanding between the two countries, under the theme of “Resurgent Japan, Vibrant India: New Perspectives, New Exchanges.”

WHAT IS THE IMPORTANCE OF JAPAN TO INDIA?

FINANCIAL:

• Japan has invested in the $90 billion Delhi-Mumbai Industrial Corridor (1,483km high-speed rail and road line), which will set up new cities, industrial parks, ports, and airports.
• It is also backing the Ahmedabad-Mumbai bullet train service and has already released the first tranche of 5,500 crore rupees.
• Japan is the third-largest source of FDI ($28.160 billion between2000 June 2018) investment into India after Mauritius and Singapore.
• In Dedicated Freight Corridor, a project of close to Rs 50,000 crore of Japanese assistance has been about Rs 38,000 crore.
• A 75 Billion dollar currency swap agreement between countries is a significant step in enhancing economic ties.

DEFENCE:

• Japan is the most important partner in the Indo-Pacific region. Both countries are the part of QUAD group.
• After the joint army, navy, and air force exercises, the two nations are looking to allow their respective naval forces to use each other’s facilities.
• Both countries have conflicts with China and to counter its behaviour in the Indo-Pacific region, they need to continue helping each other.

TECHNOLOGY:

• The introduction of  Johkasou technology in India by Japanese companies for decentralized wastewater treatment will help in sewage water management.
• The Indian PM and the then PM of Japan Mr. Abe have also announced the launch of a new digital partnership that will cover Artificial Intelligence (AI) and the Internet of Things (IoT).
• In 2018, when the Indian PM visited Japan, he made a trip to FANUC Corporation, one of the world’s largest makers of industrial robots.
• FANUC facility is important in the context of India’s move towards Industry 4.0.

INFRASTRUCTURE COOPERATION:

• In 2016, India and Japan announced joint projects in Africa as part of the Asia-Africa Growth Corridor; the main aim of this project is to counter the BRI influence in South Asia and Africa.
• Apart from it, there are many joint ventures between the two countries.

THE AREAS OF CONCERNS

TRADE BETWEEN TWO COUNTRIES:

• Today, India-Japan trade languishes at around $18 billion, while Japan-China trade is around $300 billion.
• India’s major exports to Japan include petroleum products, organic chemicals, fish and aquatic invertebrates, natural or cultured pearls, precious or semi-precious stones, and machinery and mechanical appliances.
• India’s top import items from Japan are machinery and mechanical appliances, followed by electronics, iron and steel, plastics, copper, and its articles.

RELATIONSHIP CENTRED ON COUNTERING CHINA:

• Both countries have border issues with China. So the relations generally target China.
• It is interesting fact, that China is the biggest trading partner of Japan and India.

SECURITY TIES:

• In security ties, the Indo-Japanese relationship has remained below potential, and Japan does not accord due to importance to India in its security calculus.
• Japan has offered neither military hardware nor technology to India. There seems to be a difference in perceptions about China; Japan, while highlighting its own security concerns in the East and South China Seas, is seen to play down the multiple threats that India faces from China.
• Although both countries are members of QUAD and have 2+2 talks, there is a large scope to improve the security relations that are not developed as per the demand of time.

THE UKRAINE CRISIS:

• On the issue of the ongoing Russia-Ukraine war, while India took a neutral stance, Japan criticized the attack openly and followed NATO. This shows that despite being the partner of QUAD, both countries follow their independent foreign policy.
• During his visit, Japan’s Prime Minister pushed Narendra Modi to take a clear stance on Russia’s war on Ukraine. This shows a divergence between both countries but later, QUAD itself accepted India’s stand on the Ukraine-Russia war.

THE WAY FORWARD: HOW TO SHAPE THE FUTURE OF INDIA-JAPAN RELATION?

SHOULD GO BEYOND COUNTERING CHINA:

• The Indo-Japan relations are oriented toward countering Chinese Influence in the Indian Ocean and the South China Sea but now both the countries should go beyond.

SHOULD FOCUS ON THE BILATERAL TRADE:

• Both governments should focus on boosting trade which is standing at just $18 billion. It shows that bilateral trade needs to be increased.
• The scope in many areas for improving trade and the fourth industrial revolution can be a landmark in this regard.

LEVERAGE OPPORTUNITIES FOR COOPERATION:

• Japan gives India an opportunity to boost its relations with Indo-Pacific countries.
• There are many other areas providing opportunities such as the African continent through the Asia Africa Growth Corridor(AAGC) whose potential needs to be utilized and scaled up.

NEED STRONG SECURITY TIES:

• India and Japan are the members of Quad and India invited Japan in Malabar Naval Exercise but these are multi-country level ventures. Both counties should focus on their own security setup in their respective regions.
• As a significant naval power with a dominant peninsular location astride shipping lanes, India plays a major role in ensuring maritime security in the Indian Ocean and its environs.
• Close cooperation with a democratic India, located mid-way along trade routes connecting East Asia with the Middle East and Africa, would be advantageous to Japan.
• At the same time, a technologically deficient India has much to gain from a relationship with a country like Japan.

THE CONCLUSION: No doubt, India and Japan are among the most reliable partners in bilateral relations and Japan-India relations have evolved into an inclusive and multi-layered relationship based on cultural bonds, firm friendship, and common universal values. But, there is still scope for improving the bilateral relations which should be the agenda of their future relations.

Questions

1. ‘With strong India-Japan cooperation, 21^st century will be Asia’s century. Analyze the scope for India-Japan relations in changing geopolitical scenarios.
2. Highlight the importance of strong India- Japan relations for a free and secure Indo-Pacific.
3. ‘Without enhancing trade relations, India and Japan would not be able to counter China’s influence in Indo-pacific’. Critically Analyze.

THE CONTEXT: In Feb-March 2022, India and Maldives have dived into a new foray into strategic relations with bilateral meetings on various fronts. There have been high-profile visits of Indian dignitaries to the Maldives. This article analyses regional security and maritime safety issues along with socio-economic development, trade and investment, and tourism at a time when the “India Out” campaign is regaining momentum in the Maldives along with challenges of Chinese influence and others.

MOST RECENT DEVELOPMENTS IN INDIA-MALDIVES RELATIONSHIPS

DEFENCE COOPERATION DIALOGUE:

• Defence Secretary of India visited the Maldives on 13-14 Feb 2022, with the primary objective of discussions on the 3rd Defence Cooperation Dialogue(DCD).
• Both sides discussed joint efforts and capacity-building initiatives being taken by both the countries to deter trans-national crimes and bolster national security in the region.
• The Defence Secretary of India also inaugurated the Composite Training Center Phase-I Annex built with Indian grant assistance in the Maldives and handed over the refitted CGS Huravee – a made-in-India patrol vessel.

COLOMBO SECURITY CONCLAVE:

• NSA of India visited the Maldives on 7 March 2022 to attend the 5th NSA level Colombo Security Conclave (CSC) meeting.
• The four pillars of security cooperation (in CSC) include maritime safety and security, human trafficking, counter-terrorism, and cyber security.
• India, the Maldives, and Sri Lanka are the founding members of the Colombo Security Conclave. Mauritius was included as a new member of the conclave during the meeting, which was also attended by Bangladesh and Seychelles as observers in 2022.

CAG LEVEL BILATERAL MEET TO STRENGTHEN PROFESSIONAL CAPABILITIES IN MALDIVES:

• Steps were taken for furthering the cooperation between the two Supreme Audit Institutions (SAI) by operationalizing the MoU to strengthen the professional capacities and improve audit methodology.
• Emphasized the role of technology, in today’s rapidly changing world, which constantly creates fresh avenues for audit and makes audits more efficient. The exchange of knowledge and capacity development initiatives would equip both the SAIs in the use of emerging technologies for auditing.
• The MOU is signed at the most opportune time given the strategic shift towards future relevance which requires both the countries to cater to the demands of the knowledge economy and sustainable development.

VISIT OF EXTERNAL AFFAIRS MINISTER TO MALDIVES:

• Inauguration of National College for Policing and Law Enforcement (NCPLE):
• NCPLE is one of India’s largest funded projects in the island nation – in the Maldives’ Addu City
• One of the objectives of this training academy is to address the challenges of violent extremism and prevent radicalisation.
• On the domestic level in the Maldives, the training academy would help strengthen law enforcement abilities and counter drug trafficking, a major concern in the country.
• MoU for Training: A memorandum of understanding was signed by the
• Maldives Police Service and India’s Sardar Vallabhbhai Patel National Police Academy to enhance cooperation in training and capacity building. India has also increased the number of training slots for the Maldives at the police academy to eight.
• Support for Infrastructure: The project for the creation of police infrastructure facilities across the islands of Maldives with over $40 million financing from EXIM Bank of India has also been given necessary approvals.

INDIA OUT CAMPAIGN AND INDIA OUT BILL:

• India Out campaign has cropped up every now and then within the Indian Ocean island nation, mostly on social media. The campaign is led by critics who accuse the present government of allowing Indian boots on the ground and thereby compromising the sovereignty of the island nation. The ruling administration has time and again denied any Indian military presence in the country or a threat to Maldives’s sovereignty.
• India Out Bill is a draft Bill by the present Maldivian government that criminalises public campaigns that apparently harm Maldives’ relations with foreign countries.

AN ANALYSIS OF RECENT VISITS

• The Maldives holds strategic importance for India under the present government’s ‘Neighbourhood First’ policy due to its location in the Indian Ocean. However, the relations between the two countries were strained under the pro-China regime of their former President Abdulla Yameen. This can be reflected in the recent ‘India Out’ campaign led by Abdulla Yameen, against India’s massive developmental funding for creating physical, social, and community infrastructure, and incumbent President Solih’s government retaining two India-gifted helicopters and their operational military personnel.
• For India, the Indian Ocean is of utmost importance. Since 2014, India has taken a proactive approach to cement its role as the leader in the Indian Ocean by according priority maritime diplomacy and initiatives. This comes against the backdrop of rising Chinese assertiveness in the IOR and the growing interest of various powers in the Indian Ocean generally, and the Maldives in particular. As the pre-eminent South-Asian power and net security provider in the Indian Ocean Region, India needs to cooperate in all dimensions with the Maldives. The recent bilateral meetings between India and Maldives will offer India the right opportunity.

AREAS OF ENGAGEMENT INDIA-MALDIVES RELATIONS

GEO-STRATEGIC: The Maldives, a Toll Gate in the Indian Ocean:

• Located in the southern and northern parts of this island chain lies the two important Sea Lanes of Communication (SLOCs). These SLOCs are critical for maritime trade flow between the Gulf of Aden and Gulf of Hormuz in West Asia and the Strait of Malacca in Southeast Asia.
• Nearly 50% of India’s external trade and 80% of its energy imports transit these SLOCs in the Arabian Sea.
• The location of the Maldives, at the intersection of commercial sea lanes running through the Indian Ocean, makes it strategically important for India, particularly in light of China’s growing aggression in the region.

IMPORTANT GROUPINGS:

• Maldives is a member of the South Asian Association for Regional Cooperation (SAARC) and the South Asia Subregional Economic Cooperation (SASEC).
• Engagement with QUAD (India, Japan, Australia, and the US)
• Maldivian engagement with the ‘Quad’, has been growing over the last year, especially in the area of defense cooperation.
• The present government signed a ‘Framework for a Defence and Security Relationship’ agreement with the United States. It was welcomed by India.

The South Asia Subregional Economic Cooperation (SASEC) program set up in 2001 brings together Bangladesh, Bhutan, India, Maldives, Myanmar, Nepal, and Sri Lanka in a project-based partnership that aims to promote regional prosperity, improve economic opportunities, and build a better quality of life for the people of the subregion. SASEC countries share a common vision of boosting intraregional trade and cooperation in South Asia, while also developing connectivity and trade with Southeast Asia through Myanmar, the People’s Republic of China, and the global market.

SECURITY COOPERATION:

• India and Maldives conduct the joint military exercise ‘Ekuverin’ every year since 2009.
• Mauritius was included as a new member of the conclave during the fifth meeting of national security advisers of the Colombo Security Conclave. It is a maritime security grouping of India, Sri Lanka, Maldives, and Mauritius to forge closer cooperation on maritime and security matters among these Indian Ocean countries.
• MILAN, a Multilateral Naval Exercise hosted by India, made a modest beginning in the Andaman and Nicobar Islands in 1995 with the participation of four littoral navies. This biennial congregation of friendly navies, over the last two and a half decades, has progressively grown in magnitude with the latest edition in 2022 being attended by 42 countries including the Maldives.
• Maldives is also a member country of the Indian Ocean Rim Association (IORA). The objectives of IORA are:
• To promote sustainable growth and balanced development of the region and member states
• To focus on those areas of economic cooperation which provide maximum opportunities for development, shared interest, and mutual benefits
• To promote liberalization, remove impediments, and lower barriers towards a freer and enhanced flow of goods, services, investment, and technology within the Indian Ocean rim.

DISASTER MANAGEMENT:

• The Maldives has been one of the biggest beneficiaries of the Covid-19 assistance and vaccines delivered by India among India’s all neighbouring countries. The Maldives was the first beneficiary of India’s Vaccine Maitri initiative.
• When the world supply chains were blocked because of the pandemic, India continued to provide crucial commodities to the Maldives under Mission SAGAR.

ECONOMIC COOPERATION:

• Tourism is the mainstay of the Maldives’ economy. The country is a major tourist destination for some Indians and a job destination for others.
• In August 2021 India signed a contract for the largest-ever infrastructure project in Maldives which is the Greater Male Connectivity Project (GMCP).
• Under the bilateral agreement, India provides essential food items like rice, wheat flour, sugar, dal, onion, potato, and eggs and construction material such as sand and stone aggregates to the Maldives on favourable terms.
• Blue Economy as defined by World Bank is the sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of the ocean ecosystem. The Maldives can play a significant role in India’s Vision of New India by 2030 as the Maldives also aims to achieve a more sustainable development model by making better use of its ocean resources.

DEVELOPMENT ASSISTANCE PROGRAMME:

India has helped the Maldives in many diverse areas to bolster the development of the Maldives e.g.

• Indira Gandhi Memorial Hospital, Maldives Institute of Technical Education (now called the Maldives Polytechnic),
• India-Maldives Faculty of Hospitality & Tourism Studies,
• Technology Adoption Programme in Education Sector in the Maldives,
• a port on Gulhifalhu,
• airport redevelopment at Hanimaadhooand a hospital and a cricket stadium in Hulhumale etc.
• Under the Greater Male Connectivity Project (GMCP) project, a 6.74 km long bridge and causeway link will be built to connect the capital city Male with adjoining islands of Villingli, Gulhifalhu, and Thilafushi.

DIASPORA:

• There is a significant Indian diaspora in the Maldives. Innumerable Indians work across the hospitality, education, and healthcare sectors of the Maldives economy.

IMPORTANCE OF INDIA FOR MALDIVES

FOOD SECURITY: Maldive’s food security depends a lot on imports from India. Food articles such as rice, flour, sugar, chicken, eggs, potatoes, onions, and lentils as among the basic foodstuffs consumed by Maldivians in substantial quantities and supplied by India.

INFRASTRUCTURE: Sand and gravel for construction are also supplied by India.

TOURISM: India is also a major source of the tourism sector for the Maldives, the nation’s economic mainstay.

HEALTH AND EDUCATION: India is also a preferred destination for Maldivians for education, medical treatment, recreation, and business. According to MEA more Maldivians are seeking long-term visas for pursuing higher studies/medical treatment in India.

CURRENT CHALLENGES IN INDIA-MALDIVES RELATION

CHINA’S STRATEGIC FOOTPRINT IN INDIA’S NEIGHBOURHOOD: The Maldives has emerged as an important ‘pearl’ in China’s “String of Pearls” construct in South Asia. Given the uncertain dynamics of Sino-Indian relations, China’s strategic presence in the Maldives remains a concern. Also, the Maldives have started using the China card to bargain with India.

POLITICAL INSTABILITY: India’s major concern has been the impact of political instability in the neighbourhood on its security and development. The consequent political crisis and the “India Out” Campaign have posed a real diplomatic test for India’s neighbourhood policy.

RADICALISATION: Radicalisation is not a new challenge that the Maldives has been tackling, but the bomb attack on former president Mohamed Nasheed in May 2021 has put the issue into sharper focus and has become a pressing concern. The attack clearly indicates that radical groups are actively advancing their position in the Maldives. Radical ideology has strengthened itself in the Maldives and has, in the recent past, been assisted by state institutions.

UTHURU THILA FALHU (UTF) HARBOUR PROJECT: UTF Agreement was signed between India and the Maldives in February 2021. The speculation that the project would be turned into a naval base by India has also been a reason for internal political instability in the Maldives. However, the agreement was to develop a dockyard for Maldives National Defence Force (MNDF) and operate a Dornier aircraft for surveillance.

THE WAY FORWARD

• Mobilising ordinary citizens through the ‘India Out’ campaign is a cause for concern for India. India has to work on perception management in the Maldives.
• The potential for both countries to work together on adaptive and mitigating measures against the adverse maritime impacts of climate change is enormous. This potential must be realised through imaginative foreign policy and maritime security initiatives.
• The ‘India-First Policy’ of the Maldives and India’s ‘Neighbourhood First Policy’ are intuitively complementary, implementing these policies with cultural, geo-economics, and geostrategic sensitivity is imperative for both nations.
• India and Maldives have not yet signed a Free Trade Agreement. To reap the benefits of continued efforts in the economic cooperation and infrastructure developmental projects India should think of having an FTA with the Maldives. (Maldives have FTA with China).
• India-Maldives defense cooperation shall be enhanced to monitor Chinese maritime and naval movements along vital sea lanes of communication that run alongside the Maldives.
• Encourage the Indian private sector to deepen its engagement in the Maldivian economy.
• Countries complain that India doesn’t deliver on projects and they tend to make comparisons with China. Delivering projects on time would help India in mitigating some concerns that may exist in the Maldives.

 THE CONCLUSION: While India-Maldives relations have always been close, cordial, and multi-dimensional, recent regime instability in the Maldives has posed some limitations, especially in the political & strategic arena. Therefore, the main challenge to India’s diplomacy is balancing out all these contradictions into harmonious relations.

MAINS PRACTICE QUESTION:

1. “Recent India-First Policy of the Maldives and India’s Neighborhood First Policy are intuitively complementary”. In the light of recent agreements signed between India and Maldives discuss the strategic importance of the Maldives to India.
2. “India’s Vision of New India by 2030 and Maldives aims to achieve a more sustainable development model by making better use of its ocean resources are complementary to each other. “Elaborate in the context of the Blue Economy.

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