Topic: General Studies 2:
- Effect of policies and politics of developed and developing countries on India’s interests
- Regional groupings involving India and/or affecting India’s interests.
Reviving SAARC to deal with China
Context: As India-China border tensions continues, a hegemonic China, as part of its global expansionism, is threatening India’s interests in South Asia
China’s growing presence in South Asia
- China’s proximity to Pakistan is well known and friendly relations with it is crucial for success of CPEC project
- Nepal is moving closer to China for ideational and material reasons.
- China is wooing Bangladesh by offering tariff exemption to 97% of Bangladeshi products.
- China has also intensified its ties with Sri Lanka through massive investments.
- According to a Brookings India study, most South Asian nations are now largely dependent on China for imports despite geographical proximity to India.
India and SAARC in recent years
- Several foreign policy experts argue that India’s strategic dealing with China has to begin with South Asia and it is important to reinvigorate SAARC
- In the last few years, due to increasing animosity with Pakistan, India’s political interest in SAARC dipped significantly.
- India has been trying hard to isolate Pakistan internationally for its role in promoting terrorism in India. This has had detrimental effect on SAARC functioning
- India started investing in other regional instruments, such as BIMSTEC, as an alternative to SAARC.
Can BIMSTEC emerge as alternative to SAARC?
- BIMSTEC cannot replace SAARC for reasons such as lack of a common identity and history among all BIMSTEC members.
- Moreover, BIMSTEC’s focus is on the Bay of Bengal region, thus making it an inappropriate forum to engage all South Asian nations.
How to reinfuse life into SAARC?
- One way to infuse life in SAARC is to revive the process of South Asian economic integration.
- Deeper regional economic integration will create greater interdependence with India acquiring the central role, which, in turn, would serve India’s strategic interests
- South Asia is one of the least integrated regions in the world with intra-regional trade at barely 5% of total South Asian trade, compared to 25% of intra-regional trade in the ASEAN region.
- While South Asian countries have signed trade treaties, the lack of political will and trust deficit has prevented any meaningful movement.
- According to the World Bank, trade in South Asia stands at $23 billion of an estimated value of $67 billion.
- India should take the lead and work with its neighbours to slash the tariff and non-tariff barriers.
- There’s a need to resuscitate the negotiations on a SAARC investment treaty, pending since 2007. According to UNCTAD, intra-ASEAN investments constitute around 19% of the total investments in region
What are the domestic challenges that India faces in revitalising SAARC?
- First, the divisive domestic politics fuels an anti-India sentiment in India’s neighbourhood. Anti-Pakistan rhetoric, Bangladeshi migrant issue (CAA controversy) and Islamophobia in Indian soil, influences foreign policy in undesirable ways.
- Second, mission of atma nirbharta (self-reliance) and ‘vocal for local’ signals India’s need to cut down its dependence on imports and sliding back to protectionism.This might obstruct deepening South Asian economic integration.
Deeper regional economic integration will help India both economically & strategically to counter China’s aggression in the region
Connecting the dots:
- India’s Act East policy
- RCEP and why India opted out of it?