Where do relations between New Delhi and Beijing stand following Prime Minister Narendra Modi’s visit to China the other week? Pretty much the same as before. The trip did little to alter the pattern of heightened strategic competition and modest economic engagement that began to congeal late last year.
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It bears emphasis that a key item India desires in its relationship with China is investment for its massive infrastructure challenges. This is what motivates New Delhi’s participation in two new Chinese-created institutions that are in the headlines these days: the New Development Bank, which will be based in Shanghai and whose inaugural president will be a veteran Indian banker; and the Asian Infrastructure Investment Bank, whose largest shareholders (per this Reuters report) will be Beijing (25-30 percent ownership stake) and New Delhi (10-15 percent).
Yet what will be New Delhi’s reaction when Beijing uses its massive leverage in these institutions to torpedo infrastructure loans destined for Arunachal Pradesh, a state in India’s northeastern region that China has taken to calling “southern Tibet” and claims as its own territory. In 2009, China blocked funding from the Asian Development Bank that had been earmarked for flood-control projects there. A related question concerns India’s response if either institution directs funding for the China-Pakistan Economic Corridor (CPEC), part of which will run through the disputed Kashmir region.
Mr. Modi reportedly voiced his concerns about the CPEC in his recent meetings with Chinese leaders. But one wonders whether New Delhi has ever had a frank exchange with Beijing about the NDB and AIIB funding issues.
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Self-inflicted wounds – whether in the form of poor domestic governance, decrepit infrastructure, a hostile business climate, and the absence of a unified national market – continue to hobble India’s ambitions in Asia and on the larger world stage. Prime Minister Narendra Modi’s forthcoming budget offers a good chance to make some progress here. But New Delhi is also held back by its tumultuous neighborhood and, as recent events demonstrate, the prospects for headway on this front are far less promising. This, in turn, creates a striking paradox: India yearns for a place in the first ranks of world power – Mr. Modi proclaims that he wants “to make the 21st century India’s century” – and yet it remains unable to purposefully shape events in its immediate environs. Continue reading
Last week’s blackouts illuminate three fiascoes holding India back
The massive, cascading power outages that left the northern half of India in the dark for two days last week bring to mind a telling juxtaposition of events in mid-1998. India had just concluded a momentous series of nuclear weapon tests, code-named “Operation Shakti” in reference to the Hindu concept of divine power. The action unambiguously propelled the country into the small fraternity of nations bearing nuclear arms, causing Prime Minister A.B. Vajpayee to boast “We have a big bomb now.” Yet at the same time, New Delhi was in the grip of sweltering summer heat and rolling blackouts. At his wit’s end, the municipal official in charge of electricity declared the power situation to be beyond his control and in the hands of God. He too, it seemed, was looking for some Shakti.
Fourteen years on, the continued development of its strategic arsenal is a source of national pride and part of India’s resume as a great power in the making. In recent months, the country has tested a long-range nuclear missile capable of striking targets deep within China and is reportedly on the verge of producing a submarine-launched ballistic missile – feats that only a very elite club of countries can replicate.
Yet the enduring inability to provide adequate amounts of electricity to its growing economy is a constant source of embarrassment, negating whatever reputational gains the nuclear weapons program has achieved. India may not be much of a factor at the Olympic Games in London, but it has now set a world-class record for the largest blackouts in human history – an exploit that is likely to stand for quite some time. The Economic Times, a leading business daily, succinctly summed things up with a front-page article titled “Superpower India: R.I.P.” while NDTV, a major news channel, broadcast an hour-long program called “Powerless Superpower: Are India’s superpower dreams a joke?” Compounding the chagrin is that the country was forced to turn to tiny Bhutan, essentially an Indian protectorate, for emergency allotments of power. Perhaps the only consolation – and this is not saying much at all– is that Pakistan’s power situation is no better off. Continue reading