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India-Pakistan relations weigh down heavily on the SAARC. This affects the economic development of the region. The highlight opportunity for India and Pakistan to separate politics from economics.

Economic integration

• There is a growing, but unstated, realisation that neither India nor Pakistan can wrest parts of Kashmir that each controls from the other.
• A fair peace between India and Pakistan is not just good for the two states but for all the nations constituting the South Asian Association for Regional Cooperation (SAARC).
• While SAARC has facilitated limited collaborations among its members, it has remained a victim of India-Pakistan posturing.
• World Bank publication titled ‘A Glass Half Full’ conclude that there is explosive value to be derived from South Asian economic integration.
• An economically transformed and integrated South Asian region could advantageously link up with China’s Belt and Road Initiative and even join the RCEP.

Important role of India

• Collectively with a population of slightly over 1.9 billion, South Asia has a GDP (PPP) of $12 trillion.
• However, India’s enjoys an overwhelming ‘size imbalance’ in South Asia.
• The shares of India in the total land area, population, and real GDP of South Asia in 2016 are 62%, 75%, and 83%, respectively.
• The two other big countries in South Asia are Pakistan and Bangladesh with shares in regional GDP of only 7.6% and 5.6%, respectively.
• Given its size and heft, only India can take the lead in transforming a grossly under-performing region like South Asia.

Consider the question “How India-Pakistan relations affects the potential of SAARC? Examine the role both countries can play in the prosperity of the region through economic integration.”

Conclusion

This is the moment for India to think big and act big. But for that to happen, India needs to view peace with Pakistan not as a bilateral matter, but as essential and urgent, all the while viewing it as a chance of a lifetime, to dramatically transform South Asia for the better, no less.

Relations between Russia, China and the US have not always been the same. The changes in triangular dynamic offers lessons for India. The article deals with this issue.

India’s changing relations with great powers

• The recent visit of Russian foreign minister Sergei Lavrov to Delhi and Islamabad is among multiple signs of India’s changing relations with the great powers.
•  At the same time, Delhi’s growing strategic partnerships with the US and Europe have begun to end India’s prolonged alienation from the West.
• Also, New Delhi’s own relative weight in the international system continues to increase and give greater breadth and depth to India’s foreign policy.

Shifts in triangular relations between Russia, China and America

1) Russia-China relations

• The leaders of Russia and China — Joseph Stalin and Mao Zedong — signed a formal treaty of alliance in 1950.
•  Russia invested massively in the economic modernisation of China, and also gave it the technology to become a nuclear weapon power.
• However, by the 1960s, their relations soured and two were arguing about ideology and a lot else.
• The Sino-Soviet split had consequences way beyond their bilateral relations.
• None of them more important than the efforts by both Moscow and Beijing to woo Washington.
• The break-up between Russia and China also opened space for Delhi against Beijing after the 1962 war in the Himalayas.
• Under intense American pressure on Russia in the 1980s, Moscow sought to normalise ties with Beijing.
• Stepping back to the 1960s and 1970s, China strongly objected to Delhi’s partnership with Moscow.

2) Russia-US relations

• Russia, which today resents India’s growing strategic warmth with the US, has its own long history of collaboration with Washington.
• Moscow and Washington laid the foundations for nuclear arms control and sought to develop a new framework for shared global leadership.
• But Delhi was especially concerned about the Nuclear Nonproliferation Treaty system, with all its constraints on India’s atomic options, that Moscow and Washington constructed in the late 1960s.

3) US-China relations

• Despite fighting Korean War with the US in the early 1950s, China normalised relations with the U.S. in 1971 to counter the perceived threat from Russia.
• Deng Xiaoping, refused to extend the 1950 security treaty with Russia that expired in 1980.
• China turned instead, towards building a solid economic partnership with the US and the West that helped accelerate China’s rise as a great power.

Lessons for India

• The twists and turns in the triangular dynamic between America, Russia and China noted above should remind us that Moscow and Beijing are not going to be “best friends forever”.
• India has no reason to rule out important changes in the way the US, Russia and China relate to each other in the near and medium-term.
• In the last few years, India has finally overcome its historic hesitations in partnering with the US.
• India has also intensified its efforts to engage European powers, especially France.
• Prime Minister Boris Johnson’s visit to India later this month promises a fresh start in India’s difficult postcolonial ties with Britain.
• India is also expanding its ties with Asian middle powers like Japan, Korea and Australia.
• Despite the current differences over Afghanistan and the Indo-Pacific, India and Russia have no reason to throw away their mutually beneficial bilateral partnership.
• The current troubles with China seem to be an unfortunate exception to the upswing in India’s bilateral ties with global actors.

Consider the question “What are the lessons India can draw from the  twists and turns in the triangular dynamic between America, Russia and China.”

Conclusion

India has successfully managed the past flux in the great power politics; it is even better positioned today to deal with potential changes among the great powers.

The article highlights the key takeaways from Pakistan’s vacillations on resuming the trade ties even in the face of impending economic crisis.

U-turn on resuming trade

• On March 31, Pakistan announced the decision to import cotton, yarn, and sugar from India.
• However, it took a U-turn on that announcement about resuming trade ties.
• This highlights the internal differences and the emphasis on politics over economy and trade.
• It also signifies Pakistan cabinet’s grandstanding, linking the normalisation of ties with India to Jammu and Kashmir.

3 takeaways from the decision

1) Immediate economic needs

• Pakistan’s decision was to import only three items from India, namely cotton, yarn and sugar.
• It was based on Pakistan’s immediate economic needs and not designed as a political confidence-building measure to normalise relations with India.
• For the textile and sugar industries in Pakistan, importing from India is imperative, practical and is the most economic.
• This is because cotton and sugarcane production declined there by 6.9% and 0.4%, respectively.
•  By early 2019, the sugar prices started increasing, and in 2020, there was a crisis due to shortage and cost.
• Importing sugar from India would be cheaper for the consumer market in Pakistan.

2) Politics first

• The second takeaway is the supremacy of politics over trade and economy, even if the latter is beneficial to the importing country.
• The interests of its own business community and its export potential have become secondary.
• However, Pakistan need not be singled out; this is a curse in South Asia, where politics play supreme over trade and economy.
• The meagre percentage of intra-South Asian Association for Regional Cooperation (SAARC) trade and the failure of SAARC engaging in bilateral or regional trade would underline the above.

3) Emphasis on Jammu and Kashmir issue

• The third takeaway is the emphasis on Jammu and Kashmir by Pakistan to make any meaningful start in bilateral relations.
• This goes against what it has been telling the rest of the world that India should begin a dialogue with Pakistan.
• There were also reports that Pakistan agreeing to re-establish the ceasefire along the Line of Control (LoC) was a part of this new strategy.

Consider the question: “Trade is unlikely to triumph over politics in South Asia; especially in India-Pakistan relations. This is a curse in South Asia, where politics play supreme over trade and economy.” Critically Examine.

Conclusion

Pakistan has been saying that the onus is on India to normalise the process. Perhaps, it is India’s turn to tell Islamabad that it is willing, but without any preconditions, and start with trade.