Political Science Department, St.Philomenas College-Mysore



India's Foreign Policy in a Changing World] >India's Foreign Policy in a Changing WorldiiiiiIndia's Foreign Policy in a Changing WorldV. P. DUTTVIKAS PUBLISHING HOUSE PVT LTDivVIKAS PUBLISHING HOUSE PVT LTD576, Masjid Road, Jangpura, New Delhi-110 014Phones: 4314605, 4315313 ? Fax: 91-11-4310879Email: chawlap@giasdl01..in ? Internet: First Floor, N.S. Bhawan, 4th Cross, 4th Main, Gandhi Nagar, Bangalore-560 009? Phone : 2204639F-20, Nand Dham Industrial Estate, Marol, Andheri (East), Mumbai-400 059? Phone : 8502333, 8502324Distributors:UBS PUBLISHERS' DISTRIBUTORS LTD5, Ansari Road, New Delhi-110 002Ph. 3273601, 3266646 ? Fax : 3276593, 3274261E-mail: ubspddel@del3..in ? Internet: 10, First Main Road, Gandhi Nagar, Bangalore-560 009 ? Ph. 22639046, Sivaganga Road, Nungambakkam, Chennai-600 034 ? Ph. 8276355? 8/1-B, Chowringhee Lane, Calcutta-700 016 ? Ph. 2441821,2442910? 5-A, Rajendra Nagar, Patna- 800 016 ? Ph. 672856,656169 80, Noronha Road, Cantonment, Kanpur-208 004 ? Ph. 369124, 362665Distributors for Western India: PREFACE BOOKSShivali Apartments, Plot no. 1, 25/4 Chintamani Co-operative Housing Society, Karve Nagar, Pune-411 052 ? Ph. 346203Copyright ? V.P. Dutt, 1999First Paperback Edition, 1999All rights reserved. No part of this publication may be reproduced in any form without the prior written permission of the rmation contained in this book has been published by VIKAS Publishing House Pvt. Ltd. and has been obtained by its authors from sources believed tobe reliable and are correct to the best of their knowledge. However, the publisher and its authors shall in no event be liable for any errors, omissionsor damages arising out of use of this information and specifically disclaim any implied warranties or merchantability or fitness for any particular use.Printed at Ram Printograph (India), Delhi - 110 064vTo My Brother Chandra PrakashviviiContentsPreface ix1. A. The Post-Cold War Scenario: An Era in Transition 1 B. Foreign Policy in a Changing World 202. India and the United States 303. From Soviet Union to the Commonwealth ofIndependent States : India and Russia 654. Central Asia 925. India and South Asia 108 I: India and Pakistan 108 II: India and Bangladesh 141 III: Relations Across the Palk Strait: 157 IV: India and Nepal 174 V:SAARC 1936. Neighbours 203A. India and China: Road to Recovery Background 203B. Storm in the Hermit Republic: India and Burma 2267. India and South-East Asia 2378. India and the Persian Gulf and West Asia 2679. India and Africa 29710. India: Japan: European Community 31911. Conclusions: Security and Foreign Policy 356Index 415viiiixPrefaceThe world has witnessed extraordinary turmoil and churning since this writer wrote his earlier work on India's foreign policy published by Vikas. India'sforeign policy has had to respond to the new challenges and opportunities as well, sometimes passively, sometimes reactively and sometimes with aplomband initiative. This book analyses the new trends in the international situation, the portents, the dangers and the possibilities.It particularly takes note of the new more potent factor, the economic struggle, the rise of new players on the scene, and India's foreign economic relationsthat have assumed a more critical importance.The Gulf War and the power transformations in its wake, the collapse of the Soviet Union, the phenomenon of a single super power and the shifting of theeconomic gravity to many parts of Asia and their meaning for and impact on and the modifications in India's foreign policy have been discussed in depth,so too India's relations with principal countries that matter to it, geographically, geopolitically and geostrategically and the book gives the importancethey deserve to relations with neighbouring countries.This writer was heartened by the response to the earlier book, India's Foreign Policy (1984 and 1987) that was revised and went into three reprints. Itis his earnest hope that this book will fill in some of the gaps that exist in the published material on India's foreign policy, as it brings the story,so to say, from where the earlier book left it, to the current developments. As international affairs keep evolving, there would be new developments, butthis writer modestly expects that the analysis would hold and that the basic premises would not need to be revised.This year India celebrates its fiftieth independence anniversary and also five decades of an independent foreign policy. This book is a very small offeringto the "long journey", the "tryst with destiny" that Jawaharlal Nehru spoke so passionately about in August 1947.I am grateful to Vikas Publishing House and Mr. R.K. Chawla for their patience and consideration in waiting for the completion of the book and their cooperationin demonstrating much greater despatch in publishing it than the writer showed in writing it.NEW DELHI V.P. DUTT1 June 1997x1Chapter 1A. The Post-Cold War ScenarioAn Era In TransitionThe old framework in India's foreign policy held sway and held good until suddenly the post-World War II system collapsed.1 One superpower just disintegrated.Not only the cold war ended, it was also the end of the Soviet Union. The disappearance of the Soviet Union and the Gulf war dramatically signified thecollapse of the world order since World War II and heralded a new era characterized by a highly uncertain world order. The world faced a new situationand so did India. The country had to think afresh and anew. Many of the old premises had to be replaced with a new hypothesis. The economic struggle hadbecome far more crucial than ever before, with palpable consequences for foreign policy. New directions were needed for India's foreign policy.That change was called for was axiomatic. But it was equally necessary to comprehend what kind of change was called for. The logic of one era could notbe applied to another era, nor could the present logic be carried back with retrospective effect. What was good today was not necessarily good yesterday;the reverse was no less true. Some analysts, trying to be wiser after the event, have railed at the entire "Nehru framework" of foreign policy. The "Nehruframework" of staying away from bloc politics, of non-alignment, of the quest for world peace, of the struggle against colonialism and racialism, of themaintenance of the autonomy of judgment, of independent development, of cooperation with all the big powers but subject to the preservation of India'sinterests, security and independence, of unity of action to the extent possible of the non-aligned and developing countries, all this was the conceptualframework answering to the objective situation prevailing after the post-war period, securing and enhancing India's independence. That a country with verylittle military muscle on the morrow of independence and with no economic clout either could still be a significant factor in the international arena testifiedto the basic validity of the Nehru framework, as it is often described (It was in fact an2Indian framework which Jawaharlal Nehru articulated more eloquently than anyone else).That era had now passed into history. In any case, to quote Mrs Indira Gandhi's words in another context to this author, one could not take the positionthat "here we stand, and here we shall stand forever". Those who bemoaned a change and wanted to stick to the letter of the old framework were turningtheir face against history and adopting an approach that Nehru himself would have rejected as dogmatic and unhistorical.However, change must relate to the actual situation, to the prospects opening before the world, to the geopolitical situation faced by the country, notjust to distant rumblings in a far off region, and to the deeper undercurrents of international politics of a particular period.Above all, we must understand that this was a transitional phase, may be a prolonged transitional phase, but a transitional phase nevertheless. The SovietUnion may have collapsed, the cold war may have wound up, but the world was in flux and would remain so for many years. In Shakespeare's language, theworld was out of joint. It was in serious imbalance.The world was in transition from the old order that was dead and gone to a new order that was yet struggling to be born. The struggle could stretch overmany years. It would neither be easy nor painless. It would be turbulent. It was certainly highly complex. International relations have frequently beenmarked by contradictory trends, but rarely was this complexity more evident, demanding more careful examination and analysis, as today. The contrarinessof the world today had rarely been surpassed. Unless we took into full account the contradictory trends, our responses would remain inadequate and half-formulated.The fact of the emergence of one superpower had to be balanced with the fact of the relative decline of that power. As we shall see, the stress had to beon both decline and relative, still leaving the United States way ahead of any other country in the totality of the power continuum. The Gulf war undoubtedlytransformed the world scene. It marginalized the Soviet Union which, despite Gorbachev's hapless efforts, could only flail its arms helplessly and whichwas in any case teetering on the brink of domestic disaster. The Gulf war confirmed that the U.S. alone had the requisite military and economic power tooperate on a global scale, which is the core definition of a superpower.The kind of new world order influential circles in Washington had in mind was evident from a 46-page policy document prepared by the Pentagon. Althoughdisowned subsequently because of the outcry within the U.S. and abroad, it was prepared at a sufficiently high level and was only awaiting clearance bythe Defence Secretary, Dick Chenney.2 The classified document, known as the Defense Planning Guidance, made a case for a world dominated by one superpowerwhose position could be perpetuated by constructive behaviour3and sufficient military might to deter any nation or group of nations from challenging U.S. primacy. The focus was on the concept of benevolent dominanceof one power. Implicitly the document foresaw building a world security arrangement that pre-empted Germany and Japan from pursuing a course of substantialrearmament, especially nuclear armament, in the future.The document exhorted the U.S. to "establish and protect a new order" that accounted "sufficiently for the interests of the advanced industrial nationsto discourage them from challenging our leadership while at the same time maintaining a military dominance capable of deterring potential competitors fromeven aspiring to a larger regional or global role." The analysts preparing the document were agreed that Germany, Japan, Russia and India were among theaspirants to global power status (the omission of China was surprising). The document discussed India's "hegemonistic aspirations over the other statesin South Asia and the Indian Ocean". On Asia, it advocated that the U.S. "must maintain our status as a military power of the first magnitude ... actingas a balancing force" so as to prevent the "emergence of a vacuum and a regional hegemon"."NINTENDO" WARS: WHO IS THE ENEMY?The Gulf war also confirmed the lethal efficacy of modern technology in warfare. Even without recourse to nuclear weaponry, the U.S. rained devastatingblows on the Iraqi forces and Iraqi population. The effectiveness of sea-launched cruise missiles (SLCM) for a land attack and the pounding an overwhelmingair power made nonsense of Saddam Hussein's daily enumeration to worried foreign dignitaries pleading compromise, of the number of tanks and guns and soldiersin his armoury. The Gulf war was aptly described as a Nintendo war.The "technologizing of war" had made high-intensity wars only marginal wars. Only mid-intensity wars were possible now and their theatre could only be the"third world" like the recent Gulf war (or low-intensity wars could take place among and within "third world" countries). In a mid-intensity war or theNintendo war, money inserted at one end generated a techno-power that inflicted one-sided destruction on the other end. It depended for its success ondenying the weaker side the technological and political means to fight back. As U.S. scholars put it, in this kind of mid-intensity war, the new "worldorder" would conceivably attempt to deepen the vulnerability of the entire non-Western world both by widening the technological gap through a process ofcontinuous innovation that improved the effectiveness of electronic warfare; and increasing the control and surveillance over "third world" acquisitionsof any weapons that might threaten the invulnerability of the West. This strategy would be directed against the South while promoting the collaborativeframework for the North.4Gen. Norman Shwarzkopf described the Gulf war in terms of a beagle chasing a rabbit". It had been all "pleasant surprises", with the hunter pursuing theprey without risk to himself.There would conceivably be attempts to impose a preconceived order on the countries in the South, a temptation to reorder the affairs of all regions andcountries within those regions outside of Europe. There would be pressures for a single prescription for the diverse economic problems of diverse countries.There would be an equally strong trend to make the economic clout of those who were fortunate to subserve political objectives that might be both dubiousand hegemonic. In this situation one scenario might be the continuing tensions within the regions of the South and tensions between the developed and thedeveloping. Yet, affluence and deprivation did not easily coexist and a peaceful world could not be built upon notions of hegemony and dominance.Clearly, the West's power was being targeted essentially at "third world" countries. The new military doctrine of the U.S. assumed that the major threatwould come, not from Russia, but from the "third world". The redesigning was aimed at the unpredictable, turbulence-prone, poverty, and disease-riddencountries of the world. Many in the West, particularly in Washington, were now preoccupied with the North-South angle, superseding the earlier East-Weststruggle.American strategy was particularly gearing itself towards meeting indeterminate and inchoate "threats" from the "third world". When George Bush, then Presidentof the U.S., was asked by a veteran Washington journalist in February 1990, during a visit by German Chancellor, Helmut Kohl, who the enemy was, now thatthe Soviets were "less and less" of a problem, Bush responded that the enemy was unpredictability and instability3 (italics added). Many U.S. analystswould agree that this was "a pair of abstractions", yet a great many of them seemed to trace the future threats coming from the same source. And, of course,this unpredictability and instability were chiefly the hallmark of the "third world". This unpredictability and instability was exacerbated by a "deepeningcrisis of governance" in much of the developing world, including parts of South America, West Asia, South Asia and Sub-Saharan Africa. Many of them wouldbe embroiled in domestic and regional crises with a spill-over impact that could jeopardize American interests. There were also the additional problemsof drug-trafficking and terrorism emanating from them and threatening the peace and cohesion of the West.4 America had also to be prepared to meet "low-intensityconflicts", mainly in the "third world".Obviously, the American dilemma was the location of an enemy. Foreign policy had so far focused on the "evil empire" and it was possible to align all policiestowards the Soviet threat. Now that that threat had dissolved itself, the Americans were agonizing over the targeting of their threat perceptions. Unpredictabilityand "instability" and even the "third world" regional5conflicts were too amorphous for focusing the country's attention on a specific enemy, even though at present this threat had to be underlined to justifyUSA's pre-eminent and ever-continuing military preparedness. So President Bill Clinton in his address to the UN General Assembly on 27 September 19935spoke about the "serious threats that remain": "Bloody ethnic, religious and civil wars" that raged "from Angola to the Caucasus to Kashmir". As weaponsof mass destruction fell into more hands, even small conflicts could threaten to take on murderous proportions, he told his audience at the Lake View.It another level the search for enemies continues, with the foreign policy analysts and academics taking the lead in this quest. A "brilliant" idea hascome from a prominent intellectual of the foreign policy community, who has painted an even more sinister enemy than Moscow could be. The conflicts ofthe future would be "civilizational conflicts", they would "occur along the cultural fault-lines separating civilizations". The Western civilization wouldbe pitted against the Islamic and Confucian civilizations, the Islamic component arising from "the bulge of Africa to Central Asia" with "bloody border,and the Confucian component "from East to South-East Asia". In this hair-raising view, "a Confucian-Islamic connection has emerged to challenge Westerninterests, values and power".6 It was virtually a case of the West versus the rest.GULF WAR CONSEQUENCESAll these alarmist visions came in the wake of the Gulf war and the break-up of the Soviet Union. Unfortunately Iraq's misadventure in Kuwait fuelled thesefears about the rise of "regional powers with hegemonic aspirations". So American strategy focused on strategic deterrence and defence, forward presence,crisis response and reconstitution. A vital component of this strategy was the creation and combat-readiness of "special operation forces", those air,army and naval forces intensively trained for a wide variety of missions at short notice for commando-style actions, unconventional warfare and counter-terrorism.No less disturbing was the utter confusion about self-determination in international relations. The international community had gone haywire in grapplingwith this problem, which had kept inflating after the end of the cold war, and the new, often violent, stirrings of ethnic, religious and linguistic loyalties.There was a tendency towards a totally completely arbitrary, highly indeterminate and selective application of the principle of self-determination. Therewas no clarity on where the line was to be drawn: whether it was to stop at the frontiers of a state or whether ethnic and religious groups within a statehad a right to ask for its dismemberment and claim the benediction of self-determination. Equally, of course, some states laid claims to—and occupied—areas which were not truly theirs, at the same time using the shield of non-6interference in internal affairs. Different yardsticks were applied at different places and there was a danger of the selective application of the principleof self-determination becoming the fig-leaf of an excuse to interfere in the internal affairs of another country. The principle itself was in any casea most complex area, laden with mischief-making potential, leading, possibly, to warlike situations.The collapse of Communism in East Europe and the death of the Soviet Union left the U.S. unrivalled and master of the field. The chief successor state,Russia, was so beggared and bedraggled that even with its nuclear weapons that could destroy the world, it was struggling for survival and stability, itssituation worse than that of Prometheus bound. Certainly it would take many years, may be decades, for this Prometheus to unbind itself.The dissolution of the Soviet Union led to the emergence of independent Central Asian states. Owen Lattimore once described Central Asia as the pivot ofAsia. These states, five of them, which had lived under Moscow's shadow, with generally monoculture or lopsided economies, fragile political and administrativestructures and acquisitive elite, were struggling for stability, buffeted by the wave of Islamic fundamentalism and troubled by the diversity of theirethnic mosaics, influenced also by outside countries like Iran and Turkey, with some others trying to keep their finger in the pie, like Pakistan and SaudiArabia, and continuing to feel the political and economic pull of Russia. Yet, again generally speaking, their traditions beckoned towards moderation anda secular system.But there was another side of the coin, the chinks in the economic and fiscal shield of the surviving lone superpower. From Lyndon Johnson to George Bush,the truth was being repeatedly revealed that guns and butter could not be combined. The Americans were paying too heavy a price for policing the world.Even the utterly one-sided war and the overwhelming triumph in West Asia could not blindside the world, or the Americans themselves for very long. It wasapparent that there could not be a unilateral American war enterprise.In the Gulf war, not only did Washington energize the UN Security Council to take decisions, it also ensured that the UN political resolutions become ashield under which Washington could unilaterally conduct it military operations. The war was funded largely by its allies. According to an American estimate,the total cost of the war was around $61 billion, out of which Washington spent only $7 billion. The rest was contributed by its allies.7 Nowhere werethe United States' limitations more graphically illustrated than in the Balkan imbroglio and Washington's quite apparent unwillingness, despite Westernproddings, to commit troops on any meaningful scale to Bosnia. The subsequent decision to dispatch American troops there was another of the dual (or eventriple) nature of the international situation.7Its astronomical military expenditure over the last four decades could be counted as a primary factor in the USA's economic decline. The triumph in theGulf war lost its shine all too rapidly. Bush-Baker administration held out visions of a new world order and a new international security system. Evenmany perceptive Indian analysts were temporarily swayed by the euphoria in Washington over the meaning are significance of the Gulf victory and were lemouningthe lack of an Indian response that would have made it possible to muscle in into the new international security system, a denouement insistently warnedagainst by over-optimistic American scholars close to the Washington establishment. Pessimists in the U.S. may have gone to the other extreme in seeingthe victory in the Persian Gulf as "the last hurrah of U.S. military power".8THE OTHER SIDEIn this context, it would be appropriate to quote at some length the analysis written as early as the close of 1991 by the Editor-at-Large of the U.S. Newsand World Report, David Gergen, no radical and no antagonist of the Washington elite:A year ago America stood astride the world. Its troops were poised to lead an international coalition against Saddam Hussein, its President showed greatermastery over foreign affairs than any chief executive since Franklin D. Roosevelt and its prestige was soaring. In every quarter other nations acknowledgedthat the United States had emerged from the Cold War as the only functioning superpower and that the ideas it espoused were increasingly triumphant. Aninfluential American columnist, Charles Krauthammer, wrote a year ago in this journal that a unipolar moment had arrived and that a confident United Statesshould learn to accept its new role, aggressively imposing its own vision.What a difference a recession makes. Few outside the White House talk anymore of creating a new world order, unless in jest. The United States cannot achieveorder in its streets or even in its capital, much less in the rest of the world. Staggered by an economic downturn that has taken a deeper psychologicaltoll than expected and frustrated by a paralysis in its politics, the United States toward the end of 1991 turned increasingly pessimistic, inward andnationalistic.9The United States' turning from a creditor to a debtor nation is a fact known all too well. The interest payments on its debt almost match its defence budget.It also needs no underlining, as the phenomenon is well-acknowledged the world over, that economic centres have in a substantial measure moved away frommilitary centres of power. The old concentration of military and economic strength has, at least in this era of history, lost its universal characteristic.Undue accumulation of military prowess appears to damage the economic foundation of big powers. The United States remains a superpower in military termsbut no longer enjoys a commanding role in international economy. Germany (within a8European Community) and Japan have risen as new economic powerhouses, combining incommensurate military power. It is a common myth that they do not spendon defence. Japan is the fourth largest military spender; Germany, too, is no babe in the military woods. But they have refrained from assuming crushingmilitary burdens and global policing responsibilities that would have a crippling impact on their economic growth.Some analysts could even detect a kind of division of labour among the rulers of the world in which the U.S. contributed manpower and weaponry, "while itsallies finance the budgetary, energy and trade deficits Americans incur through their unwillingness to make even minimal sacrifices in living standards."10This was so in the Gulf and so was it again in Somalia. But, of course, there was no way this arrangement would endure even in the short term. The distastewith which Washington responded to insistent calls for committing manpower in Bosnia indicated U.S. relictance to playing such a role. The decision tosend U.S. troops was taken amidst considerable domestic dissent. Washington would find the arrangement about the financing of the wars (and interventions),in which the Allies permit themselves to participate, provided manpower came from some other source, quite irksome. It would cheerfully use its militarytechnology and armament, particularly its air power, but sending the boys was quite another proposition.WEST EUROPE AND JAPAN: NEW FACTORSEven among what is broadly known as the West, three centres were radiating rays of attraction: USA, European Community and Japan. The European Communityaimed at extending economic integration to political integration. One might add in passing that a German Europe had emerged much faster than a EuropeanGermany. Bonn took independent initiative, without waiting for concurrence by other Western countries, to push German unification. It obtained Gorbachev'sacquiescence to German unification before it virtually presented USA with the fait accompli of the merger. France and Germany moved towards the creationof a military force that, they said—to soften the impact on the U.S. and other allies—would supplement NATO's arrangements. A great deal of critical commentcame chiefly from the American side, on how threatening this 3,500-man Franco-German army corps could be to the future of the Atlantic alliance.11The then President George Bush's Chief Security Advisor, Brent Scowcroft, was reported as noting that while Washington was pushing for an expanded missionof NATO, the West European countries were acting increasingly through the European Community and tended to present the U.S. with previously developed positions,which he conceded could then become very difficult to negotiate. The desire of the European powers to form a common front on9security issues, adopting positions distinct from those of the U.S. was still at an embryonic stage, but the trend was apparent.12A great many European and the U.S. public figures and analysts have spoken of a diminishing role for the U.S. in European affairs and expanding quarrelsover the question of "free trade" and protectionist policies that each accused the other of practising. These attracted worldwide attention since the endof the cold war in 1990. A report, for instance, in the Washington Post, after the NATO summit in November 1991, noted that in earlier days NATO summitmeetings provided U.S. presidents with an easy opportunity to demonstrate leadership without expending much effort. Apparently, those days had gone withthe cold war. There were clear signs of a diminished U.S. role."13A symposium in February 1992 in Munich (the annual Conference on Security Policy), had drawn leading European and U.S. politicians, diplomats and academicsto be bluntly warned by the U.S. participants about the growing U.S. impatience about Europe's policies and attitudes. Republicans and Democrats aliketold European leaders that America's new domestic focus was leading to a much tougher U.S. drive for free trade, for fewer U.S. soldiers in Europe, andeven a wavering commitment to the foundation of postwar foreign policy, the North Atlantic Treaty Organisation.14The "confusion" was described by Alan Soga, managing director of the Kissinger Associates consulting firm, as "the post cold-war sorting through of howthe world is going to work". Many Europeans believed that they were trying to put forward a vision of post-cold war Europe, but no similar thing was forthcomingfrom Washington. "It is hard to maintain the notion that NATO, the institution of the cold war, is forever going to survive the end of the cold war", saidDominique Moise, deputy director of the French Institute of International Relations. "The delicate question was how Europe and USA would manage this transitionin a way that maintained the fundamental identity of interest that had in the past outweighed the differences among them. A new phase in relations hadopened."15The spectacular emergence of Japan as an economic giant the generated nasty tensions between Washington and Tokyo underlined the dilemma about the natureof the political role that Japan would play or was expected to play in the new world order. Japan had become too powerful economically to be sidelined,or to allow itself to be sidelined (politically) for very long. It had the second largest gross national product (GNP) in the world and was set to outstripthat of the United States by the turn of the century. It was the largest creditor nation in the world as well as the largest donor nation. Despite allthe measures at liberalization and the continual appreciation of the Yen, Japan's trade surplus was bulging. Deficient in most of the acknowledged sourcesof power, Japan through its technological advance and mastery over the information revolution had achieved remarkable economic growth whose political leveragecould grow10in the coming years. Japan was still unsure and tentative about its future political role. Japan was currently engrossed in an expanding but confusing internaldebate on its future political role, and that neluctable consensus, the Japanese find themselves most comfortable with, was still eluding them.But the escalating tensions between USA and Japan were a fact of life and had radically changed the quality of U.S.-Japanese relationship. A 1990 surveyfound less than half of the American public willing to go to the aid of Japan in case of an attack on it.16 (Of course the situation could rapidly changeif there was an actual threat, as we saw in the case of the Iraqi invasion of Kuwait. The proneness of U.S. public opinion to volatility was not less markedthan that of many other countries.) The transformation of U.S. attitudes towards Japan was unmistakable, as Japan climbed up many notches in the threatperception among the people. There was a similar shift in the Japanese public opinion. The earlier admiration (in fact, adoration and idealization) ofthe U.S. gave way to what the Japanese called Kenbei, condescension, and not a very friendly condescension at that.There were nationalists on both sides who were far more tired of each other than the average opinion. American labour was angrier and a more militant advocateof protectionist policies vis-a-vis Japan. There were also Japanese-knowing intellectuals, like Chalmers Johnson, who were convinced that Japan was a closedeconomy, that Tokyo deliberately pursued closed-door economic policies and that, therefore, USA ought to push harder on Tokyo to compel it to change theeconomic system, or what was euphemistically called "structural deficiencies". Even many careful analysts, who felt the trouble lay not in the Tokyo starsalone but equally in the American loss of economic competitiveness, believed that Japan had been piggy riding American defence effort; and that while USAwas out defending democracy in the world, Japan entered the house and occupied it.Conversely, many influential Japanese resented the USA's panchant for pushing Japan around. I was told in Tokyo that many younger Japanese felt particularlyhurt by the "overbearing behaviour" of the Americans. The Japanese were singularly riled by a study, said to have been commissioned by the CIA, "Japan:2000", prepared at the Rochester Institute of Technology that described Japan as an "amoral nation" that sought "world-wide dominance" through financialand industrial power. It went on to surmise that Japan might form an alliance with the Soviet Union (now defunct) if the U.S. tried to roll back its power.Japan was described as "an undemocratic country where policy was controlled by a handful of bureaucrats and politicians," and a racist one which discriminatedagainst foreigners. The report regarded Japan not as an ally but as an adversary.17A more radical nationalist view was represented by Shintaro Ishihara who wanted "A Japan That Can Say No To America".18 This view was not shared by11perhaps a majority of the Japanese elite, but there was a widespread conviction that USA was trying to transfer the responsibility for its economic failuresonto the shoulders of Japan which had become a convenient whipping boy for American economic ills. In its opinion the cause fundamentally lay in Washington'sinability to impose fiscal restraints and reduce the burgeoning budget deficit, the imbalance between saving and consumption, in the downslide of the Americaneducational system and the failure of U.S. industry to recover its competitive edge in the world markets.In any case the management of U.S.-Europe, U.S.-Japan and Europe-Japan relationships would occupy a prominent place on the political and economic agendaof the twenty-first century. Lastly even many American intellectuals themselves have been quick to note that history has not afforded any instance of alasting hegemony. If a hegemonic power becomes too overbearing and drives others to the wall, the second-echelon powers tend to coalesce in order to counter-balancethe power of the hegemon. Eventually, the hegemon gets overcommitted; its economic resources and production become unable to sustain increasing militarycommitments; the commitments increasingly eat into the national cake; the economy progressively slides; and the hegemon gradually loses its hegemony.19That was why many U.S. analysts were advocating for their country the role of an arbiter, a facilitator, a moderator in international affairs so that itdid not lose its power and its overall authority in the world. Many of them called for going beyond hegemony to cooperation. But whether a hegemon canexercise these restraints and escape the historical process is a moot point: history alone will answer this question.TRIPLE DIMENSIONWe must also note the domestic constraints on the U.S. administration. Public opinion was unenthusiastic about committing American boys for military dutiesaround the world. Where American basic interests were perceived to be involved or where the media could be successfully managed, it became easier for theU.S. government to dispatch U.S. troops, but there were a whole lot of areas and situations (as for instance Somalia or Rwanda) where the people couldnot be persuaded to see any real American interests threatened and therefore any particular reason to be militarily involved and to get their boys killed.This constraint it is not only the U.S. government that has to keep reminding itself but over foreign policy framers as well.Considering the countervailing factors, one long-term possibility was also not to be discounted. That is the resurgence of Russia. Again and again in historyRussia has risen and fallen and risen again. With its resources, its scientific pool and its educated population, Russia would not remain down for toolong. It was one country with whom India had no basic conflict of national interests, nor any12major divergence of perceptions. India had not only to keep this perspective open but also be helpful whenever possible.Yet, contradictorily it seems, that brings us to the third dimension of the international situation. All said and done, USA remained the greatest powerwith immense capacity to influence world events and operate in distant lands. It was also among the most attractive markets of the world and a source ofhigh technology and capital investment. So a certain caution need to be exercised in analysing the opposing international trends.First, in regard to the U.S.-Europe tangle. It is salutary to keep noting that for all the huffing and puffing, and the developing of European positions,Europe continued to look to Washington for leadership and decisive action, even for purely European problems. The European Community endeavoured to developa European stance on the burning issue of the break-up of Yugoslavia, the emergence of Croatia and the terrible blood-letting in Bosnia-Herzegovina, butwas rapidly stalemated in the Bosnian imbroglio. It was obliged to look to Washington for critical action and resolve the increasingly messy tangle. Despiteall the public aversion towards sending American troops to new conflict areas, President Clinton sent substantial U.S. troops to Bosnia without any embarrassingopposition.A similar caution should inform our understanding of the U.S.-Japan relationship. Any talk of a rupture was wholly premature and raising visions of comingwar between USA and Japan was indulging in fanciful sensationalism. A third of Japan's foreign trade was with the U.S. Next to Britain, Japan's was thelargest foreign investment in the U.S. Japan was bonded with the U.S. through its security ties, and without the U.S. shield, Japan would still feel nakedin the world and could not afford to dispense with this relationship until it had developed other political relationships. How soon this would be donewould determine Japan's relative independence to chart its own course. Given Japan's caution and a tortuous search for an internal consensus, this wouldnecessarily be later than sooner. Yet the frictions would not go away and, unless handled wisely, could assume dangerous proportions.The complex duality of the international situation did not end there. The emergence of Europe is a well-recognized phenomenon. But it is not just the processof integration of the European Community but also the unravelling of Europe that we must note. The unravelling is specially notable in Central and EasternEurope. Even the integration in Western Europe, that the world talked about admiringly, is facing many serious roadblocks. It may be pushed again if Franceand Germany can get their act together, but the repeated currency crises and the problems accompanying the creation of a European currency demonstratethe as-yet brittleness of West Europe's integration, According to a New York Times report, four years after the Berlin Wall came down and West Europeanleaders proclaimed a new era of freedom and13prosperity, Western Europe was "transformed by gloom". The region was staggering through its worst recession since World War II and unemployment was strainingits social services to the breaking point. Instability and violent nationalism in South-Eastern Europe had prompted hundreds and thousands of refugeesto pour westward, setting off a racist backlash in Germany, France and even Denmark. Almost no job growth had occurred in Western Europe's private sectorin years, according to the Organization for Economic Cooperation and Development in Paris, and the unemployment rate for the twelve EC nations as a wholewas heading towards 11 per cent, prompting more and more people to believe that there was something fundamentally wrong.20 Marginal improvements here andthere did not basically alter the situation in the subsequent years. Europe continued to be plagued by unemployment, racial animosity towards migrant workersand the growing "community of the disadvantaged".21The "gloom" might have lifted somewhat, but basically the situation has not changed much three years later. As the Director of Studies at the Council ofForeign Relations, New York, put it:In Western Europe the figures of unemployment are frightening. In France, average unemployment between 1969 and 1973 was 2.6 per cent, today it is over11 per cent. In Belgium, the unemployment rate has quadrupled over the past 20 years. The Europeans have created a lost generation of workers and are nowsuffering for it in terms of increased crime, drug abuse, violence against immigrants, and the increasing popularity of extremist political groups. Inthis context it is sobering to realize that Germany's current level of four million unemployed is the highest since the early 1930s".22Such a situation pointed graphically to the complexity of the international situation. So did the Japanese scene. The world looked in astonishment at the"Japanese miracle", the super fast growth of the economy and the manner in which Japan became an economic powerhouse. But now the Japanese were wonderingin astonishment at the "bursting of the bubble economy", as many Japanese analysts were wont to put it, the difficulty that the economy was experiencingin getting out of the deep recession into which it had descended despite the pumping of billions of yen into it by the government. On top of it was thenew political scenario that had suddenly opened up in the land of the rising sun. The two outstanding characteristics that were supposed to be the hallmarksof the Japanese situation, political and economic stability, were both under considerable strain now.Yet Japan remained one of the most advanced economies of the world, an important financial centre and among the foremost sources of foreign aid and investment.Equally, European integration would continue, even if painfully and fitfully. The European Community as a power centre, with particularly its economicclouted remained, another important facet of the international situation.23Yet another important factor in the post-cold war world scenario was China, not only with its vast population and resources, but also a fast-developing(even if somewhat lopsided) economy and not-so-slow developing armed strength either. It was one of the five nuclear powers of the world and a permanentmember of the Security Council with veto power (an advantage not enjoyed by India). The duality (in fact it is triplity, to coin a word) that marked theinternational situation also characterized China's relations with the United States, its relations with Japan, its relations with South-East Asia and itsrelations with India.14The abrasiveness and the tensions that kept recurring in Sino-U.S. relations were not going away for a long time, considering the nature of the issues thattroubled their relations, Taiwan, first of all, human rights, Tibet, intellectual property protection, China's trade surplus with USA, export of missileand nuclear technology to Pakistan and (less evidently) Iran, and so on, so forth. But these were not expected to mask many positive factors in their relations,the fact of U.S. need for China's cooperation on many issues in order to get past China's veto, and also, among other things, a $30-billion trade and a$6-billion power in the nor Security Council investment in China and, of course, the lure of the China market.China's policy appeared to be to go softer on Japan and utilize these ties to mitigate some of the rigours of the relationship with USA without sacrificingthe core of that relationship. But the long-term contradictions, political, territorial and strategic in the Sino-Japanese relationship would not be soeasy to resolve. The duality of relations with Asean was too obvious to need much elaboration. The aggressiveness with which China was asserting its claimsin the Spratley and Paracel islands was to be contrasted with its expanding contacts with Asean, its membership of APEC and the Asean Security Forum. Therecent hardening in Chinese foreign policy was also a reflection of its growing military prowess in addition to the internal problems of the Chinese CommunistParty. The outcome of the economic compulsion clashing with political compulsions needed to be watched.Nor could we ignore the duality in India-China relations. The vast improvement in relations with India was combined by Beijing with critical assistanceto Pakistan, particularly in the nuclear field, that could primarily be targeted on India. In any case the China factor in the post-cold war world deservesfar greater attention than is being given in this book (because others will be writing on it).So too must be noted the transforming scenario of Asia-Pacific and the possibilities in this changing situation in Asia. Fast-rising economies in many Asiancountries have had mouths watering all around the world. The so-called little tigers, Korea, Hong Kong, Taiwan, Singapore, but also a number of other countries,Thailand, Malaysia, Indonesia, even Vietnam (although starting from a15smaller economic base) had been attracting corporations and capital worldwide. Their political and military clout was limited but their accumulating economicstrength was pushing the process of cooperation and integration that could be a helpful factor in bridging political voids and transatlantic divergences.In any case their economic strength was not an insignificant development in the post cold-war world.Added to these international complexities were the regional and sub continental compulsions and contradictions. The cold war may have ended in Europe, butnot in this subcontinent. The winds of detente may have been blowing among the big powers, but the chill had not left this region. However desirable, theWest European situation could not be mechanically replicated here. The fact of state-sponsored terrorism from across the frontier could not be turned intoa non-fact. The fact of Pakistan having crossed the nuclear Rubicon could not also be converted into a non-fact. The regional animosities continued tohaunt South Asia. Necessary as it was to take all possible measures for promoting a climate of peace and cooperation in the region, the geopolitical realitiescould not just be wished away.It is this new "triplity", so to say, this extreme complexity of the present phase in international relations, this contrariness, this presence of a strongcounter-trend in every trend, that India's foreign policy must contend with but also make skilful use of the contradictions to moderate the rigours ofhostile trends and challenges. To use Abraham Lincoln's words, we must be able to "think anew and act anew" and "de-enthral ourselves" from dogmatic thinking.In any case, to sum it all, the world had suddenly changed and India could not pretend that it had not. It needed to be underlined again that the economicstruggle had come to occupy centre-stage. Even the political struggles in the international community were revolving around the economic struggle. Thosewho could find the answers for economic growth would forge ahead, others would fall behind. Economic potential and growth could no longer be separatedfrom the measure of influence one exercised in the world. It was equally true that global-scale confrontation and conflicts were over and were unlikelyto recur for a long time in any case. The globalization of the world economy carried within it the elements of both contention and cooperation, but therewas an increasing recognition that cooperation would yield greater dividends, while contention would accentuate the economic malaise. Contention was notruled out, but a big war to achieve political or economic aims was becoming less and less of a practical proposition.OVERALL SITUATION: THE ECONOMIC IMPERATIVEIf one were asked to identify just one most notable trend in the world, one would say that the economic struggle had taken primacy over the political struggle.16Political struggles had not ceased and certainly in many countries the political struggle was often sharp and disorienting, but every country, except forthose being torn apart in ethnic and other convulsions, was giving primary attention to economic development, and even political struggles in many of themwere being conducted around economic policies. It was the ailing economy—in public perception the mishandling of it - that was the undoing of George Bush.It was the concentration on the economic issues that largely explained the triumph of Bill Clinton.In the new era no country could hope to play a meaningful international role if it did not manage well its economic problems and was not demonstrativelyregistering economic progress. The economic dimension became the most important dimension of foreign policy. A senior functionary in the Central Committeeof the Chinese Communist Party said to this author during a visit in November 1992, "If you don't have economic strength, no one will take you seriously."It was the economic issues that dominated the developed world too. If Bush went to Tokyo, he spoke mainly of "jobs, jobs, jobs" in the U.S. When John Majorwent back from his Indian visit, he gleefully pointed to his having secured 23,000 jobs in Britain through the economic agreements with New Delhi. Economicdevelopment, markets and jobs constituted the new lexicon of international relations. The U.S. administration was emphasizing to its diplomats that oneof their major duties was to promote American commercial interests.24 Hard economic sell had replaced the cold war. Among examples being lauded was thework of William Clark in India who had helped American companies clinch major deals that could have gone to foreign competitors.Economic development could no longer be an autarkic enterprise. Economically the world had already become a virtual one world. Historians like EmmanuelWallerstein pointed out that a unified world market was already arising in the eighteenth century. This process had now achieved spectacular heights. Ithad also been facilitated by the communications revolution. Anything happening anywhere in the world, the knowledge and awareness of it was immediatelybrought to the people's bedrooms through the communication revolution. Knowledge could not be denied easily to the citizenry, even in a dictatorship. Economically,no country could maintain itself apart from the rest of the world. Prosperity and economic growth had become contingent on economic interaction with othercountries and, consequently, with their economic development and prosperity too.In the new economic integration multinational corporations and economic cartels had come to be powerful actors and enjoyed significant economic leverage.Another consequence of this globalization was the increasing pressure of the North on the South and a further shift in the economic balance towards thedeveloped countries.17It would be a partial picture if we were not to note the counter-trends in this situation. The acute struggle for markets and jobs and the economic downturnin the developed economies was raising to a crescendo protectionist voices and the barriers of laws, legislation and practices to limit the opportunitiesfor other countries' goods and services were being put up. Free trade was turning into managed trade in the advanced economies. Despite all the homiliesabout free trade, the Uruguay Round of multilateral negotiations for new GATT ground rules floundered for a long time for lack of an agreement, primarilyamong the economically advanced countries. The terms of trade are continually moving against the developing countries.A number of countries in Asia were beginning to turn the corner and register impressive rates of growth, but taking the "third world" as a whole, to payoff foreign loans there was a net capital outflow of some $20 billion per year from the South to the North, reducing the per capita living standards bymore than 10 per cent in real terms, a social setback greater than the Great Depression of the 1930s. In addition, as a Washington economist tellinglynoted, the dramatic rise in U.S. interest rates from 9 to 19 per cent between 1971 and 1981, followed by the recession in the developed economies and theconsequent collapse of commodity prices, left both the LDC (least developing countries) borrowers and bank creditors overextended. For example, he pointedout, the interest expense to Argentina, Brazil and Mexico tripled while the terms of trade dropped by almost 10 per cent.25THE NEW PARAMETERSIt is this new duality, this extreme complexity of the new period in international relations, this contrariness, this presence of a strong counter-trendin every trend, that India's foreign policy has to contend with and to which it has to evolve suitable responses. The bipolar world had gone. The SovietUnion was no longer available as a counterfoil to the American power. The old framework of India's foreign policy had served India well, but in the newsituation it needed additional props. Many elements in the old framework, like autonomy of decision-making, strengthening of the independence of Indiaas the reference point and non-alignment remained useful guideposts, but India needed now to go beyond them and construct a new barricade. The old parametershad to be supplemented with new ones. We could not remain prisoners of the past.Foreign policy, now more than ever, must advance the economic interests of India. The economic imperative, no less than the security imperative, must governIndia's policies. Except in an emergency, like the imminent threat of war, international economic relations must now share the pride of place with themore traditional geopolitical considerations. The regional situation, the threats to India's security, the nuclearization around India's borders, the state-sponsored18terrorism from across the frontiers, all these factors must continue to engage India's concern and prompt India's vigil. The benign consequences of theend of the cold war and the spirit of the new era of cooperation had not yet permeated to this region. India had to function in accordance with the realitiesaround its borders.Nevertheless, the economic compulsions must equally govern foreign policy. As Jawaharlal Nehru noted, to talk of security without economic progress andthe enhancement of the well-being of the people was chasing a chimera. In the new international era, without economic development India would find itselfmarginalized, effectively sidelined, and in fact subject to even greater pressures that would quite likely seriously erode its independence and deny itany real place in the world. We must have our priorities right and among these must be to constantly keep in view India's external economic relations andthe requirements of economic growth.Often these may necessitate certain compromises, but the compromises should enhance long-term perspectives of growth. No country can function as an islandby itself, much less a country like India with its open society and free, democratic institutions. India has also to be sensitive to the currents in theworld. The basic characteristic of the new international phase is the urge for cooperation, mitigating and eliminating conflicts and enmities, regionaleconomic integration and economic development of each country. As we have seen, the regional scenes are not alike and artificial transplantation does notwork, but trends in the world today interpenetrate in different parts of the planet much more rapidly than ever before. There is need to be alive to themand to promote them whenever opportunity presents itself our way.Despite its stage of development India has many advantages that it could profitably utilize to enhance its position in the world, economically and otherwise.It has a middle clan of some 300 million people to say the least, which is among the largest in the world. It has a professional management corp that notmany developing countries, including China, can claim in numbers as well as quality. Its industrial infrastructure is also among the most advanced amongthe developing countries. A country of the size, population, resources and skills of India could not be lightly ignored. Particularly in a period of fierceeconomic competition among the developed economies, of the clashing, clanging race for markets, of the growing worry over jobs, and of the spectre of recessionif expanding markets are not found, India could offer an attractive area for investment and sale of machinery, goods and services.The visits of important leaders of the world to New Delhi have to be viewed in this context, among them John Major, Boris Yeltsin, Helmut Kohl, Jaques Chiracand a number of French ministers. Both John Major and Helmut Kohl, following each other in quick succession in January-February 1993, dwelt on the economicdimension of the relationship with India, extending appreciation and19backing of India's new economic policies, and hoping to meaningfully utilize the new opportunities as a part, even if a small part, of their drive to sustaintheir own economies. In the same category was the earlier visit by Prime Minister Narasimha Rao to Bonn and Paris in September 1992. Russian PresidentBoris Yeltsin too came in January 1993 in quest of a new economic and defence relationship with India.There are some essential prerequisites for successfully exploiting the opportunities. India's economy must be seen to be healthily developing and internationallythere has to be a sense of confidence about India's basic political stability. If there is doubt about India remaining fundamentally stable, no matterwhat the normal cut and thrust of policies may be and if the economy is seen to be stagnating, the opportunities would remain unrealized. In the finalanalysis it would be India's economic health, the well-being of the people and social and political cohesion that would determine India's place and rolein the world.20B. THE CHANGE AND FOREIGN POLICYWe have taken note thus far of the changing world in all its complexity and how India with its assets and weaknesses had to grapple with this change. Theold framework had to be modified and in fact India is still struggling with these modifications. There were now gaping holes in the old conceptual frameworkof Indian foreign policy, but it was somewhat presumptuous to suggest that a new conceptual framework was in place. Domestic developments also impingedon the clarity and determination with which foreign policy could be pursued. When governments struggled to survive, foreign policy also struggled to retainits coherence, and initiative and dynamism became a casualty of domestic uncertainty.POLITICAL INSTABILITY, ECONOMIC RECESSION AND FOREIGN POLICYRajiv Gandhi had lost power in the general election of November 1989—a year before his assassination. There ensued a period of political instability, achange of three governments and adhocism in foreign policy. A National Front with the Janata Dal as its core, had come into being,. led by some formerCongressmen, like V. P. Singh. The Janata Dal did not have a majority of its own and was supported from outside by the BJP (Bharatiya Janata Party) andthe Left. There was an electoral understanding between them that enabled them to defeat the Congress. It was not a hotch-potch of political parties frominside like the Janata Party, but a hotch-potch of political personalities inside, provided with electoral majority by a hotch-potch from outside.The new government had an able and articulate Foreign Minister in I. K. Gujral, but it suffered from two inherent disabilities. It was dependent for itssurvival on two opposite poles—the left and the right, two fundamentalisms which had temporarily combined in their enmity of the Congress. The Prime Ministerhad virtually no interest in foreign policy. Consequently, foreign policy lacked the vital input and active support that has necessarily to be the contributionof a prime minister. Moreover, constant political infighting took its toll of the initiative and dynamism in foreign policy.It was a time when India had to confront critical foreign policy problems. Indeed, the world changed while India floundered in political instability anda rising economic crunch. The Gulf crisis came at a time when India was politically and diplomatically unprepared. The crisis began with the invasion ofKuwait by Iraq's military forces in August 1990.No doubt Iraq had a long-standing border dispute with Kuwait. It was also unhappy with Kuwait surreptitiously deviating from OPEC-fixed ceilings on oilproduction and, in Baghdad's view, depriving Iraq of some oil earnings. Equally, it would appear that the United States, obsessed with Iranian "fundamentalism",21had adopted a highly ambivalent policy towards Iraq. There is reason to believe that the Bush administration had sent confusing signals to President SaddamHussein, which perhaps could have misled him into believing that Washington might not react strongly to an Iraqi attempt to take over Kuwait. The Americanambassador in Iraq, in her only meeting with the Iraqi President during her tenure on the eve of the Iraqi attempt to take over Kuwait, was rather ambivalentabout the American position on 'inter-Arab" conflicts. "We have no opinion on the Arab-Arab conflicts, like your border disagreement with Kuwait", AlanGlaspie told Saddam on 25 July 1991. Washington, in its overriding anxiety about Iranian fundamentalism, had secretly supplied arms to Iraq and allowedBaghdad to purchase high-tech hardware from USA that enabled it to spend more of its resources on its military machine.26Also, the Iraqi leader apparently decided to ignore the implications of his own awareness that the primary element in the West Asia scenario was oil. Oilpolitics determined responses to developments in that region. Hardly any big power would have bothered about the puny states there or their mutual antagonisms,if nature had not endowed them with such plenitude of the black golden liquid. There was no way that the West would allow further concentration of thecontrol of oil with one country. This was one of the primary reasons why George Bush reacted strongly and why he was able to garner so much support fromother Western nations.All the same, the world community was by and large strongly opposed to the Iraqi invasion. The UN Security Council, exhibiting a new U.S.-Soviet consensus,called upon Iraq to withdraw its forces and subsequently authorized member nations to take whatever action necessary to get the Iraqi action vacated. Notonly did the Iraqi action find India paralysed, the entire non-aligned movement was shaken to the core. With its misadventure, Iraq did no service eitherto itself or to the developing countries. In many ways the Gulf war transformed the world scene and international relations. It further marginalized the"third world" and imposed wholly new strains on India's foreign policy, as on the foreign policies of other non-aligned countries. It was an unfortunatecoincidence that even as the world was witnessing the advent of a new era, India was passing through a phase of uncertainty and instability. Three governmentsin as many years was not exactly conducive to the generation of serious and sustained thinking on the new international situation. India had a good foreignservice establishment, but was handicapped by the lack of political guidance. To keep one's head above the turbulent waters of the post-Gulf war and thepost-cold war era was all that was aspired for. Even that appeared to be a formidable task.The Gulf war was speedily followed by an escalating crisis in the Soviet Union. India, as much as the rest of the world, was taken by surprise by the precipitousdeterioration and disintegration in the Soviet Union. Suddenly India22lost a major countervailing friend and force in the world. India's internal preoccupations, left little time for expending serious thought on the unfoldingdevelopments in Moscow and evolving well-structured policy alternatives.The re-examination of foreign policy imperatives was further circumscribed by the onset of an economic crisis. The crisis had been coming for some if canas the wages of political instability and economic profligacy. The country had been living beyond its means for a number of years. The various governmentsthat came and went in New Delhi had been following a policy of all give and no take. The treasury was being emptied. The crisis was particularly acutein the balance of payments (BOP) position—the country had foreign exchange reserves for only one week of its needs. It had also neglected structural reformsof its model of development hitherto followed in the light of its own experience and the experience gained the world over.This model had been adopted when India started on the course of development from a very small base. It served the country well in establishing an industrialbase and a technologised infrastructure while avoiding heartless exploitation and lack of concern for the poor, and that within a democratic framework.But over the years the model had inevitably developed many imperfections, a bureaucratic stranglehold and a "licence-permit raj". The economy had developedto a point where it required removal of the fetters and a change in strategy. Indira Gandhi had started a process of liberalization and Rajiv Gandhi hadcarried it forward, but the pace was slow and was hampered by prolonged political uncertainty.By the time the Narasimha Rao government was installed in New Delhi, a foreign exchange crisis of major proportions, besides a decline in industrial production,had overtaken the country. There were short-term demands and long-term demands on foreign policy. Any detailed discussion of the new economic policy isinopportune here, but undoubtedly the first task of foreign policy was to take such measures as would alleviate the economic crunch. India needed immediateaccess to substantial amounts of foreign exchange to tide over the crisis, and this assistance was available on less than forbidding terms only from theinternational financial institutions like the World Bank and the Asian Development Bank, with their large American, and in the latter case Japanese presence.Prime Minister P.V. Narasimha Rao himself acknowledged that changes in the international situation had come with "bewildering rapidity" and that the governmentstood ready to reorient policy in alignment with the changed situation. The leitmotif of India's foreign policy was to "structure a regional and internationalorder based on harmony and a willingness to strive for peace and readiness to converge on basic issues and needs of mankind". The "overriding priorities",the Prime Minister underlined in a speech before Parliament on 20 December 1991, were: preventing any threat to India's unity and territorial23integrity, ensuring geopolitical security by creating a durable environment of stability and peace in our region, creating a framework conducive to theeconomic well-being of the people by encouraging a healthy external economic environment and trying to restore internationally the centrality and criticalityof development in the evolution of political and economic policies all over the world.27These "priorities" had also to by supplemented with an adjustment of foreign policy to the immediate needs of the country to tide over the economic crisis.The first three years of the Rao government saw a concentration on such fire-fighting. Even though India was not over the hump, the crisis appeared tohave abated by the end of 1993. Yet the "centrality" and "criticality" of development remained and was now a prime factor and objective in the foreignpolicy of India, as that of most other countries. Narasimha Rao's visits to Germany, France, Central Asia, Oman, Iran and other places were steps in thisdirection and in the process of adapting foreign policy to the changing international PLEX AND MIXED DEVELOPMENTS: CHINA, NAM, PAKISTANIndia faced a peculiar security environment in which the regional situation was out of alignment with the international developments. The cold war had suddenlydissolved, partly because of Gorbachev's policies, but partly also because of the disappearance of the Soviet Union itself. The all-pervasive atmosphereof international hostility and tension had abated. The dogs of world war had been put on leash. Conflict had not ceased, but great-power interventionson opposite sides had. Central Europe was filled with the smell of gunpowder. Butchery and barbarity terrorized the lanes and bylanes of Bosnia and Herzegovina.Ethnic cleansing had reached new heights (or was it depths?) in what was once a vibrant Yugoslavia playing a world role that could have been the envy ofmany a big country. Eastern Europe was less volatile but no less unstable. Nevertheless the big powers were not ranged on opposite sides and there waslittle danger of a world conflagration spreading from Sarajevo, as it did in 1914. The international security environment had become more benign.There was another positive development for India. Its cold war with China was also fading away. Relations had been improving ever since India sent an ambassadorback to Beijing in 1970, but the cold war (or the cold peace) really ended with Rajiv Gandhi's long handshake with Deng Xiaoping in Beijing in December1988 and further improvement was registered with Chinese Prime Minister Li Peng's visit to India and the Indian Prime Minister Narasimha Rao's to Beijing.The process of normalization was taken many steps forward by the accord on the line of actual control reached during Rao's trip to China. The tranquillityon the border and the steps being taken to nurture that tranquillity24made possible a relaxed and dynamic view of their future relations, although many obstacles have yet to be cleared.From India's point of view, another positive development was the strong support that the non-aligned movement received from its members at the tenth NAMSummit in Jakarta in September 1992. The Summit was meeting at a time when the movement was passing through a serious crisis. Amidst a painfully deleteriousinternational situation for the developing countries, the movement had been emasculated by the collapse of leadership, with the chairperson Yugoslaviaembroiled in its own crisis of identity. The movement, to all intents and purposes, was headless while all those momentous developments were taking placein the world. The Gulf war had already taken a heavy toll of the cohesion of the movement. The disintegration of the Soviet Union accentuated the crisis.Even some within its ranks, as President Robert Mugabe of Zimbabwe noted, doubted the continuing validity of the movement in the changing internationalsituation. By the time the tenth Summit met, the gavel of the Chairperson had passed on to Indonesia.Amazingly, in the circumstances, there were not too many takers for the winding-up of the movement. The overwhelming majority appeared to be determinedto keep it afloat. The sentiment was best expressed by Prime Minister Mahathir Mohamad of Malaysia: "It is not a case of confronting anyone. This groupis not in a position to confront. But we need to protect ourselves. Protection needs some strength. NAM may have to be renamed to reflect its new rolein a unipolar world. NAM must have a new set of principles and must be given new objectives."In the event, even a change in name was not favoured by the large majority, but the idea of self-protection was very much there in the minds of the participants.Necessarily NAM had to struggle for this role. Even so, it could provide only imperfect "protection" (protection understood not in terms of physical securitybut much more in terms of protection of interests), in the imperfect world dominated by the powerful, not just militarily but economically too. NAM stillpromised to be the most important leverage of the weak. It could not be the only avenue for promotion of the interests of each non-aligned country, norcould the individual countries comprising NAM put all their eggs in one basket, but there was no substitute to NAM for a collective shield.The changing concerns of NAM were underlined by President Suharto of Indonesia in his opening address at the Summit. Pointing out that, notwithstandingmajor-power conciliation, the world was still far from being peaceful and secure, he expressed the general belief of the members that as long as worldpeace was threatened, the freedom of nations diminished, the fundamental aspirations of the people were unmet, and economic injustices continued, so longwould NAM have to be in the forefront of the struggle to oppose these tendencies.25President Suharto asked for a firm stand by the non-aligned on the question of conditionalities attached to aid. "It is not really a question of whetherthere should be conditionalities or not, but of the nature of conditionalities", he said, "for, in practice, industrialized countries unilaterally setthese conditionalities, and often expand their scope to cover questions of democracy and human rights, applying only their own criteria which may not beappropriate." He called for a new consensus on the pressing need for development of the developing countries—"a new development consensus".28As in the past NAM was faced with some highly contentious issues. Chief among these was the trouble in Bosnia—Herzegovina between the Serbs and the Muslimsand large-scale killing of the latter. Equally unsettling were the Croatian atrocities in Bosnia and the ethnic cleansing indulged in by all the threeethnic groups, Serbs, Croats and Muslims. The Muslim member-states were greatly exercised and wanted the expulsion of the erstwhile Yugoslavia (now generallyknown as Serbia) whom they held responsible for the policy of 'ethnic cleansing" in Central Europe. Eventually, compromises were reached and the NAM Summitcondemned the killings in Bosnia and called for a halt to the pursuit of the policy of ethnic cleansing.India gave strong support to NAM at this time. Despite all the upheavals and despite all the failings, there was very considerable support, at least amongthe opinion makers, for the movement, as a largely attended seminar organized on the issue by the Ministry of External Affairs prior to the Foreign Ministers'meeting on the NAM Summit agenda demonstrated. India had also reason to be gratified by the outcome of the Summit as its deliberations and final statementreflected many of its concerns. The Summit condemned "international terrorism" which endangered the territorial integrity and security of states and calledupon all its members to fulfil their international obligations and refrain from organizing, instigating, assisting or participating in terrorist activitiesin other states, or abetting terrorist activities directed towards other countries.The NAM leaders called for restructuring, vitalization and democratization of the United Nations (another important concern of India), review of the SecurityCouncil membership, and balanced relationship between the General Assembly, the Security Council and the Secretary-General. They emphasized the need fora global and comprehensive approach to disarmament including nuclear disarmament, and demanded access to nuclear materials, equipment and technology forpeaceful purposes on a non-discriminatory, predictable and long-term basis.The Summit also asked the coordinating bureau to study further the question of a mechanism for the peaceful settlement of disputes among members. This wasa major enervating factor for the movement and there appeared to be no way out of such impasse. The Iran-Iraq war followed by the Gulf conflict had dealthammer blows to the effectiveness and cohesion of the movement. That the26movement survived was in itself an amazing phenomenon, but it survived for reasons discussed above.Not surprisingly, the movement expressed deep concern on the continued deadlock on the Uruguay round of GATT negotiations. The Summit called for a moreopen multilateral trading system, and improvement in the external economic environment for promoting development in developing countries and for enablingtheir economic liberalization programme to succeed. The Summit called for increased financial flows to the developing countries through direct foreigninvestment and strengthening of international financial institutions. Pointing out that the debt burden of developing countries had doubled to $1,400 billionin the past ten years, the Summit called for comprehensive debt relief measures to promote recovery, growth and development of these countries.29It was all very well to pass all these resolutions, but they lacked sting. Not only had NAM become somewhat unwieldy and amorphous, a mini UN—which in away was a tribute to its success—it was in serious danger of becoming irrelevant unless it could redefine its role and recover some cohesion. Its roleas the moral conscience of the world and a bridge between two warring blocks had ended with the end of the cold war. It was still relevant as a forum forthe distillation of the interests of the non-aligned and developing countries and as a subsidiary counterpoise to the dominance of a few developed countriesprovided it could recapture its cohesion and unity of purpose. But wars and ethnic bloodshed threatened to make short shrift of such cohesion. Nor wasoutstanding leadership available to the movement currently, such as was provided by Nehru, Nasser and Tito.Moreover, the subcontinental situation deteriorated sharply. Pakistan was fanning militancy and terrorism in Kashmir, providing sanctuary, training, armsand materials to the militants, encouraging insurgency and destabilization in order to snatch Kashmir through subversion and terrorism. Regardless of thedetente in superpower relationship (in fact as a result of the break-up of one superpower), and regardless of the relaxation in many other parts of theworld, the security environment for India remained as chilly as during the cold war days. Despite the meetings between the Prime Ministers of the two countriesat international gatherings, the relations dipped to a rather daunting level.' The pressure from Pakistan came to be combined with the pressure from theU.S. over Kashmir, as the Clinton administration seemed to feel its way towards resumption of military and economic relationship with Pakistan. There waslittle scope for India to relax. Indeed these have become the most serious foreign policy challenges to India.The advent of a new government in New Delhi with Inder Kumar Gujral as External Affairs Minister brought some relief in the relations with Pakistan. Hisdual approach towards Pakistan and the internal developments in Islamabad combined to light up a flicker of hope of a possible thaw in India—Pakistan27relations.* However, none of the problems had been resolved and it was premature to be too optimistic about the outcome.So some challenges are old and some the consequence of the new era. Also, one would say, some old challenges are being given a new twist by the new erain the international arena. These challenges, at least in the immediate time-space, are no less formidable than the ones during the cold war. The positiveand the negative coalesce and coexist—as before. The dispersal of the clouds of the cold war is a positive development of tremendous magnitude and is tothe advantage of India in reducing the risks of a possible large-scale foreign intervention in this region.Yet the negative factors continue to vitiate the atmosphere and have to be suitably counteracted. The degree of sophistication with which the country handlesthe contradictions and the modified parameters in the new era would determine the relative success or failure in minimizing the dangers to the securityand integrity of the country and carving out a meaningful role in the community of nations. Above all, India faces a daunting new international situation.The post-cold war international system has collapsed and a new era has dawned. We have discussed in the earlier section the nature of the post-cold warworld and the nature of the challenges facing India.While all students of Indian foreign policy are agreed that serious modifications are needed in the foreign policy framework that held good for nearly fortyyears of India's independence, there is no consensus or clarity on what should be jettisoned and what should not be. There are a couple of parameters,however, that could hardly be trifled with without impairing India's most deeply-felt vision.What gives distinction to India's foreign policy is the fundamental imperative that India must strive for an independent foreign policy and that even thoughthere are many long-term and short-term considerations and strong influences on foreign policy in an unequal world and a world where interaction amongcountries is getting more and more intense, the country's autonomy in decision-making must be kept intact. In the final analysis India should be able tojudge for itself what is in its interests and what its security requirements are. Nothing has happened to change this parameter basically.The other, often unspoken and infrequently written about parameter, inextricably connected with the first, stems from the belief that India is a potentialbig power and should not allow itself to be sidelined by those who dominate the international power structure. India has no intention to play the roleof a spoiler, what the Americans call a "destabilizer", but democratization of the international order is seen to be in India's interests and the strugglefor India's place in the sun is seen to be a continuing one, whose importance cannot*See the Chapter on India and Pakistan28be minimized. It is generally believed that the country does not want to abandon this parameter either.But many other postulates and premises of India's foreign policy have been taken over by history and needs reformulation. The cold war has gone with thewind and so has the Soviet Union. A wholly new international situation has developed. The economic struggle has assumed a critical role in determiningthe captains in the new ball game. The multinationals are moving around the world, decentralizing the production process, and controlling more and moreresources of other countries, and yet willy-nilly becoming the instruments of the spread of modern knowledge and technology. India cannot just go on repeatingthe old slogans. Foreign policy needs substantial modification in line with the new international realities, their complexity and contradictions, theirdangers and opportunities.NOTES1. For a detailed study of foreign policy in the preceding era, see V.P. Dutt, India's Foreign Policy, Vikas Publishing House, New Delhi, 1987 and 1994.2. The "wolfish" document was prepared by Paul D. Wolfowitz, Under-Secretary for Policy in the Department of Defence. It was first revealed by the New YorkTimes. See International Herald Tribune, Singapore, 9 March 1992, p. 1.3. See Michael R. Beschloss and Strobe Talbott, At the Highest Levels: The Inside Story of the End of the Cold War, Litte, Brown and Company, 1993, p. 192.4. See, for instance, Alberto R. Coll, former Principal Deputy Assistant Secretary for Defence, "America as the Grand Facilitator", Foreign Policy, no.87, Summer 1992, pp. 47-65.5. Times of India, 29 September 1993.6. Samuel P. Huntington, "The Clash of Civilizations", Foreign Affairs, Summer 1993, pp. 22-49.7. International Herald Tribune, 16 January 1992, p. 1.8. Terry L. Diebel (Professor of National Strategy at the National War College), "Bush's Foreign Policy: Mastery and Inaction", Foreign Policy, Fall 1991,pp. 3-23.9. "America's Missed Opportunities", Foreign Affairs, no. 1,1992, pp. 1-19.10. John Lewis Gaddis, "Towards the Post-Cold War World", Foreign Affairs, no. 2, Spring 1991, pp. 102-22.11. International Herald Tribune, 2 July 1992, pp. 1 & 4.12. Scowcroft, quoted in Ted Galen Carpenter (Director, the Cato Institute), "The New World Disorder", Foreign Policy, Fall 1991, pp. 24-39.13. International Herald Tribune, 9-10 November 1991, p. 1.14. Ibid., 10 February 1992, p. 1.15. Ibid., 2 July 1992, pp. 1 & 4.16. John E. Reilly, "Public Opinion: The Pulse of the '90s", Foreign Policy, no. 82, Spring 1991, pp. 79-86.17. Ryutaro Ozaki, "Are Japanese That Bad?", Sankei Shimbun, 23 June 1991, Translation Service Centre, June 1991.2918. Ishihara along with another Japanese nationalist wrote a book with the same title that has now become a celebrated thesis of the nationalist point ofview.19. The process has been well described and detailed in Paul Kennedy, The Rise and Fall of Great Powers, Fontana Press, London, 1989.20. See International Herald Tribune, 9 August 1993, p. l.21. See Tony Judt, A Grand Illusion? An Essay on Europe, Hill and Wong, New York, 1996.22. Ethan B. Kapstein, "Workers and the World Economy", Foreign Affairs, May-June, 1996, p. 22.23. For a discussion of European economic strength see Lester Thurow, Head to Head: The Coming Economic Battle among Japan, Europe and America, Waner Books,New York, 1993.24. See Far Eastern Economic Review, 16 April 1992.25. See Theodore H. Moran (Director of the Programme in International Business Diplomacy, School of Foreign Service, George Washington University), "InternationalEconomics and National Security", Foreign Affairs, no. 5, Winter 1990-91, pp. 74-90.26. David Gergen, Triumph Without Victory, Random Houte, 1992, pp. 13-14 & 25.27. Asian Recorder, 29 January-4 February 1992, pp. 221-5.28. Hindustan Times, 2 September 1992.29. Text as circulated by the Ministry of External Affairs.30Chapter 2 India and the United States Change and ContinuityThe international situation took a dramatic turn after the Gulf war and the subsequent debacle of the Soviet Union. These developments, with all their contradictoryand multidimensional implications have been analysed at some length in the first chapter. For India, it was undoubtedly a difficult situation. The SovietUnion had so far been a balancing force enabling India to resist any intolerable foreign pressures inimical to its fundamental interests. That countervailingforce had disappeared, leaving India, so to speak, somewhat naked.In a manner of speaking, India had to rebuild its relations with the U.S. in this new period, in which there was only one superpower but in which many otherfactors too had come to play a role. Economics had come to dominate international relations as much as politics. Nevertheless, a major change in the Indo-U.S.relationship was accompanied by certain continuities. It continued to be characterized by "contradictions" and to follow a zigzag course. Close cooperationin some fields and sharp differences in some others remained the dominant feature of this period. The one difference was that sharp differences on certainvital issues were not allowed to cloud the cooperation in other areas, some of them no less vital.The Gulf war threw up certain new challenges and anxieties for the U.S. and the collapse of the Soviet Union aggravated those anxieties, some of which wereraised to the level of a new policy in this region by the Clinton administration. Left with no visible enemies, instability and turbulence became enemiesfor the U.S., and the target of serious concern for which it had to remain vigilant and prepared militarily as well as politically. This perception wastaking shape even before the Gulf war reached its height and before the Soviet Union disintegrated, in the context of deepening detente with Moscow. TheU.S. Defence Secretary, Richard Chenney, in his annual report to Congress, in January 1990 warned about the danger of large-scale conflict in South andSouthwest Asia (emphasis added). American power was still require to meet other contingencies.131SUBTLE CHANGESNevertheless the Bush administration's stance first went through a subtle change and then a very apparent one with regard to India. It had all the hallmarksof the beginning of a new fruitful era. The new thinking, in its incipience, could be discerned before the outbreak of the Gulf war. This was given expressionby Richard Haas, Special Assistant to President Bush and Senior Director for Near East and South Asian Affairs, who told an Asia Society meeting in Washingtonthat the U.S. wanted a more "developed dialogue" with India,. "commensurate" with its "growing role". It depended, he said, on India's willingness to articulatea convincing and reassuring rationale for itself and its role in the region". He conceded that Washington had a special relationship with Pakistan, butindicated that he recognized India's "primacy" in the region.2As we have noted above, India's somewhat dithering reaction to the Iraqi invasion of Kuwait disappointed Washington, but the permission given by the Chandrashekhargovernment for refuelling of U.S. air force transport planes on their way from the Philippines to the Gulf delighted the Americans. It created a sharpcontroversy within India, with most leaders and political parties, including Rajiv Gandhi, criticizing the decision, as a result of which Washington hadto terminate the refuelling stopovers.3There were other abrasive issues complicating relations. India was again put under Special 301 to pressurize it to offer concession on the issue of intellectualproperty rights (IPRs) and the dispute over pharmaceutical patents.4 This was to remain a persistent effort by Washington to push India into acceptanceof the U.S. view on the issue of patents and IPRs. The Americans, however, offered negotiations and India worked for a give-and-take solution to the problem.There was also a move in the U.S. Congress to include India in the Pressler amendment. This world have equated India with Pakistan on the question of anuclear weapon capability quest and thus denied it a modest assistance programme of the U.S. government. The move, passed by the House of Representativeson 13 June,5 however, failed endorsement by the Senate and thus could not be written into U.S. law.6 Another hopeful sign came when the House of Representativesdeclined on 19 June to endorse a plebiscite in Kashmir. The move, sponsored by Congressman Dan Burton, who had been heading an influential anti-India lobby,was thwarted by India's staunch friend in the U.S. Congress, Stephen J. Solarz of New York. The House adopted an amendment by Edward Feigan asking Pakistanto stop abetting the Punjabi and Kashmiri terrorists. Feigan called upon the militants to cease the use of force for political ends and upon India to improvethe human rights situation.7The installation of the P.V. Narasimha Rao government on 20 June and the signal on wide-ranging economic reforms in the direction of strengthening a marketeconomy and liberalizing the economic regime towards foreign trade and entry of foreign business and investments set the ground for a major change in32U.S. perceptions of India. Indo-U.S. relations were on a course of vast improvement, the contradictions and setbacks notwithstanding. The new duality inthe American policy may be summed up as: keeping the heat on to bring India around to either signing the NPT or for a South Asia declaration of nuclearrenunciation; criticizing the perceived abuse of human rights by Indian security forces in Kashmir; stepping up pressure on India to open completely itsmarkets, its insurance, banking and other areas; stepping up pressure on patents and property rights that affected Indian industry as well as agriculture;but supporting India's economic reforms and showing greater sensitivity to India's concern about the aiding and abetting of terrorism from across the frontiers.The earlier U.S. tilt towards Pakistan was being quite obviously rectified.As early as 3 July, even before the economic agenda of the new government in New Delhi had become fully operative, the contours of the new line from Washingtonwere becoming clearer. U.S. Deputy Assistant Secretary of State, Teresta Shaffer expressed concern over reported Islamabad support to terrorism in Kashmir."Reports of support for Kashmiri militants continue. We would find any such activity dangerous and destabilizing." The official amplified that "this issomething we have discussed with the Pakistanis before, that if this kind of things were happening, it is something we would consider to be very dangerousand destabilizing".8 These statements were, no doubt, hedged, but obviously one would not express concern if there were no basis to the reports. The officialalso made it clear that Washington regarded it "impracticable" to keep harping on the U.N. resolutions of the forties that referred not only to a plebiscitebut also to a host of other things that did not take place. The standpoint of the Bush administration was made clear at a special press conference forIndian and Pakistani correspondents.9This view was taken further to a more logical standpoint when the U.S. administration conveyed it to the then External Affairs Minister, Madhavsinh Solanki,in Washington that USA favoured the resolution of the Kashmir issue bilaterally between India and Pakistan in accordance with the Simla Agreement.10 Theview was confirmed by the U.S. Under Secretary of State for International Security Affairs, Reginald Barthalomew, during his visit to India in November1991. He was reported to have conveyed to Solanki that Washington had asked Pakistan not to be tempted to provide "aid and sustenance to militants" inPunjab and Kashmir. Washington appreciated that the abetment of terrorism would have a major impact on the security of the region. He suggested bilateraltalks between India and Pakistan under the Simla Agreement.But this was not the only message that the American official had brought. He also came back to the American theme of nuclear non-proliferation and urgedhis Indian interlocutors to take confidence-building measures with Pakistan on the nuclear issue, a suggestion to which India promised to give seriousconsideration.11 USA still favoured a regional solution, but India continued to33take a dim view of a nuclear-free zone just for South Asia or proposed five-nation conference that would concern itself only with nuclear abstinence byIndia and Pakistan. Nuclear non-proliferation, in the U.S. perception, was confined to the horizontal type leaving out the vertical one, that is, the spreadof nuclear weapons to other countries rather than their continuing development and refinenent by the existing nuclear weapon states.In Washington, Solanki had a "warm" meeting with the U.S. Secretary of State, James Baker, who expressed his satisfaction with the state of relations betweenthe two countries. He was "deeply appreciative" of India's commitment to democracy and the manner in which it had conducted elections in the face of greatuncertainties following the assassination of Rajiv Gandhi. Solanki explained the new openness in the Indian economy and the policy of liberalization thatthe Narasimha Rao government had embarked upon. Baker expressed his belief that the changes in policies of India could well become a model for other developingcountries.On the issue of human rights, the U.S. Secretary of State reiterated the American position that India should allow Amnesty International to come in as itwould raise India's moral stature, while India's standpoint was that such visits often only complicated issues further. (India, however, conceded thisdemand subsequently.) The shift in the American position on both Pakistan's nuclear status and on assistance to militancy in Kashmir was obvious from theposition that Baker adopted with Solanki. He was very specific that Pakistan should not proceed with its nuclear programme and that because of this programmePresident Bush had declined to provide the certification needed for the continuation of U.S. aid. He suggested the need for some kind of regional solutionto the problem of nuclear proliferation. He was keen that something should be worked out so that the general atmosphere could be improved.The U.S. official was more forthcoming on the external support to militancy in Kashmir. He had cautioned Pakistan, he said, of the dangers of such actions,but he also advised India against over-reaction.12 Solanki told a local TV centre in New York that the U.S. was no longer urging for a plebiscite in Jamrnuand Kashmir and favoured India and Pakistan resolving the issue in accordance with the Simla Agreement.13This writer has pointed out elsewhere that both the Reagan and the Bush administrations knew about Pakistan's crossing of the nuclear threshold but hadgone on providing the necessary certification enabling Pakistan to continue obtaining aid, on the ground that Pakistan's availability as an ally was neededto get the Soviets thrown out of Afghanistan.The United States moved away from its earlier all-out support to Pakistan despite its apparent violations of the American laws. Its strategic position.changed with the withdrawal of the Soviet forces from Afghanistan and the subsequent collapse of Soviet communism, and equally the collapse of Pakistan's34status as a front-line state. The Bush administration decided not to blink anymore at Pakistan's nuclear weapons capability and at its interference in theKashmir situation. The State Department spokeswoman, Margaret Tutwiler announced on 29 January (1991) that no U.S. aid would go to Pakistan as "under thePressler amendment, Pakistan is not eligible to receive assistance unless the President certifies to Congress that Pakistan does not possess a nuclearexplosive device".14 The Bush administration now acknowledged that it was in no position to give any such certification, as Pakistan in fact had alreadygone nuclear.Baker, too, warned Pakistan that the Bush administration would be forced to brand it a "terrorist state" unless it ceased its support to the Kashmiri militants.Senior administration sources revealed that Baker had conveyed this warning to Pakistan's Prime Minister Nawaz Sharif in May through a letter deliveredby the U.S. Ambassador to Islamabad, Nicholas Platt. The sources believed that Baker's letter was prompted by the briefing provided by his pointsman forterrorism, Ambassador Peter Burleigh who had visited both Islamabad and New Delhi in April. Burleigh had been provided by India with a plethora of evidenceof Pakistani complicity in Kashmiri militancy in the Valley but he had also verified this from independent sources in Pakistan.15Indeed the U.S. gave notice to Pakistan subsequently in January 1993 that it had 120 days to show that it was not promoting terrorism in Kashmir or Punjabor else it would be declared a "terrorist state". The letter to this effect was handed over to Pakistan's Foreign Secretary, Shahryar Khan in Islamabadby the U.S. Ambassador, John Monzo. Simultaneously, a similar letter was delivered from the U.S. acting Secretary of State, Lawrence Eagleburger to Pakistan'sAmbassador in Washington, Abida Hussain.16DEFENCE EXCHANGESThe shift in the U.S. position and the beginning of a different relationship between "the two largest democracies of the world" was becoming more explicit.This was manifest in a new direction, in a new, albeit modest defence exchange, between the two countries. The new dimension to the relationship was kickedoff by the Kirklaiter proposals, that formed the basis of a new dimension to Indo-U.S. ties. The Kirklaiter proposals advanced in 1991 by the then Commanderof the U.S. Pacific Command, Admiral Kirklaiter, which specifically included annual visits by chief of staff, setting up of an Indo-U.S. Army executivesteering committee, holding strategy symposiums, staff talks between the two armies, training programmes for Indian officers in the U.S., observation oftraining exercises, participation in the Pacific Commands joint committee-level meeting programmes and information exchanges.This was certainly not the beginning of, and there was no question of, any military alliance with the U.S. It was not conceived to be a kind of relationship35that Pakistan has had with USA over the last four decades. Nevertheless both sides viewed the military contacts with some importance, and the new IndianDefence Minister at the time, Sharad Pawar gave a push to this relationship, rejecting the apprehensions of the Left opposition about an erosion of India'snon-alignment.Very considerable support to the development of these ties was reported from the higher echelons of the army leadership in India. The Russian connectionhad been disrupted and India could not put all its eggs in one basket. The vast changes in the world scenario had to be taken cognizance of and in thenew world situation it was useful to keep such ties. There was, also some hope among defence officials that these ties might help in the Americans usingtheir good offices to restrain Pakistan from arming and training militants in Kashmir and Punjab. Of course, India had made no request for large-scalearms purchase from USA, nor had the latter offered sale of any state-of-the-art military hardware.17A boost had been given to these ties by a goodwill visit at August-end of the Indian Army Chief of the Staff, General S.F. Rodrigues who had meetings withthe Chairman of the U.S. Joint Chief of Staff, General Colin Powell and the Deputy Secretary of Defence at the Pentagon, Donald Atwood. In these meetings,the two sides discussed matters of mutual security interests and areas of possible cooperation on security questions relating to South Asia and the IndianOcean region. General Rodrigues also called on the Deputy Secretary of State, Lawrence Eagleburger, who was believed to have conveyed to him the U.S. concernover the proliferation of nuclear-weapon states. While USA appreciated the fact that India had chosen not to develop a range of nuclear weapons despiteexploding a nuclear device in 1974, the U.S. was also keen to persuade India to sign the NPT. When Rodrigues raised the question of Pakistan's interferencein Punjab and Kashmir, according to Indian sources, Eagleburger replied that currently the U.S. had limited leverage over that country.18 The mutual exchangescontinued with the visit in October of Commander of the U.S. Pacific Fleet, Admiral Chuck Carson.The defence exchanges had developed satisfactorily to the extent that Sharad Pawar confidently told the Press Trust of India (PTI) in January (1992) thatthe two countries were poised for an "openness" in relationship between the armed forces and in the defence field. "We are moving towards opening our forcesand defence activities to each other as well as having tie-ups in ambitious defence projects like the Light Combat Aircraft (LCA)", he said. "Such cooperationcould also be with a number of other countries", he added, apparently trying to dispel any notion of exclusivity of Indo-U.S. defence ties.Pawar noted that the U.S. had taken a "positive stand" on state sponsorship of terrorism by Pakistan and had urged India and Pakistan to settle the issuethrough bilateral negotiations. "This is a reasonable and sensible stand and it would be only fair on our part to reciprocate and strive towards improving36relations between the two countries in all fields", he said, striking a very optimistic note. He also thought that the U.S. had adopted a reasonable standon state sponsorship of terrorism by Pakistan in Kashmir and had urged India to settle the Kashmir issue through bilateral negotiations.19Pawar made this statement shortly before the first meeting of the Indo-U.S. army steering committee, attended by a five-member American delegation headedby the U.S. Army Commander for the Pacific, Lt. Gen. Johnie Corus, on 24 January. The committee worked out modalities for exchange of officers on coursesand observers for exercises and specialized training. Indian army observers had been invited to the U.S. 25 Infantry Division exercise in Hawaii in June.The U.S. delegation expressed interest in high altitude training, firing and maintenance of weapon systems, specialized food and medicines and operationallogistics there. India, in turn, was interested in "force-multipliers"—subsystems like night-firing capabilities that enhanced a weapon system.20 The growinglinks were further promoted by the simultaneous visit of the Pentagon's Chief of Naval Operations, Admiral Frank Kelso, resulting in the two countriesagreeing to set up a similar joint steering committee for concretizing cooperation between the two navies.The military exchanges were further discussed during the then Foreign Secretary J.N. Dixit's visit to Washington in March that marked the beginning of aserious dialogue on political issues. While the political issues would be discussed separately, Dixit revealed that the two sides were discussing the feasibilityof holding joint naval exercises.21 The defence exchange dimension was broadened with Sharad Pawar's visit to USA a month later. In Washington Pawar pointedout that India had brought down its defence expenditure from 6 per cent to 3 per cent of GNP, but that India was surrounded by countries with a high defencespending. He appreciated the U.S. stand endorsing the Simla Agreement as the best framework for a solution of the Kashmir issue. The Defence Minister assertedthat the U.S. Defence Secretary had shown sensitivity to India's concerns and had told him that USA was not supporting Pakistan militarily in the samemanner as before. The kind of facilities available to Pakistan earlier were no longer available. Pawar believed that the Indo-U.S. defence cooperationhad started well. It was an important year for their cooperation because it marked the emergence of many new aspects of the world situation.22Pawar regarded this link as important enough to reject a widespread demand within Parliament for cancellation of the projected joint naval exercises afterUSA slammed sanctions on India under Super 301. He said that not participating in joint exercises would be short-sighted because of the changed geostrategicsituation.23 The joint exercises were held on quite a modest scale.In the final analysis, the political relationship casts its shadow on defence ties. The kind of defence cooperation that some people expected failed tocome37off as the political relations deteriorated. The military connection was on hold since 1993 after the Clinton administration replaced that of George Bushand its tilt towards Pakistan soured political relations.POLITICAL PRESSURESReverting to the political relationship, a constant concern of the U.S. administration has been the nuclear and missile programmes of other countries. Itbecame particularly concerned about the development of nuclear weapon capabilities in South Asia, of course only after Pakistan had crossed the nuclearRubicon. All along, the U.S. knew all that was happening but had turned Nelson's eye towards it. Now Washington wanted to lump India and Pakistan togetherand treat them on a par with regard to nuclear non-proliferation. It was stepping up the pressure on India either to sign the NPT, or alternatively toagree to a South Asian nuclear non-proliferation agreement guaranteed by the big powers. Under its prodding Pakistan had suggested a five-power conference(India, Pakistan, USA, Russia and China) to ensure non-proliferation in South Asia.The proposal was unacceptable to India for two reasons. First, it treated India and Pakistan in isolation of the total strategic situation in the region,putting them on a par, and ignoring the broader security problems and concerns of India. It just ignored the Chinese nuclear presence near India's border,the atomic weapons dangling over other people's heads in Kazakhstan and the fact that India was surrounded by nuclear powers and nuclear weapons. Secondly,it maintained in another form the discriminating nature of the non-proliferation system. There was no balance of obligations and it would not promote auniversal process of denuclearization.The American worries were conveyed to India by President George Bush in the first high-level political contact after the new Government took over in hismeeting with Prime Minister P.V. Narasimha Rao in New York, where both were attending the summit meeting of the United Nations to discuss its new rolein the new world situation. Bush and Rao met for half an hour and had a frank exchange of views on nuclear, security and bilateral issues.Bush stressed to Rao the need for a positive response from India to Pakistan's proposal for a five-power conference. Narasimha Rao urged him to take a broaderperspective and appreciate that such a sensitive issue could not be discussed in a vacuum. He made it clear that Pakistan's proposal was inadequate asIndia shared a border with China which was a nuclear weapon country. Nevertheless, so far as bilateral relations were concerned, the two leaders expressedsatisfaction at the level of economic cooperation between the two countries.24 In any case, it was too brief a meeting for any in-depth discussion andmeeting of minds between the two leaders.38India was not against nuclear non-proliferation, but against one-sided obligations and one-sided rights and privileges. Yet India could not just say "nyet"to the American proposals and concerns. India desired a better understanding by the Americans of the issues involved and security interests. India's economicrequirements in a situation of deteriorating balance of payments and the economic liberalization that was virtually forced upon the country by the economiccrisis entailed that India could not just brush aside U.S. pressure on the non-proliferation issue.The political dialogue was broadened with the visit of the Foreign Secretary, J.N. Dixit, to Washington. Besides an exchange of views on various aspectsof bilateral relations, Dixit asked for direct talks between USA and India before New Delhi considered the question of participation in the proposed five-powerconference. The Americans readily agreed, for they had at least made India open negotiations on the issue.25 It appeared from media reports as if Dixitgave different impressions to the Americans and the Indian media. To the latter, he seemed to take a more determined stand on the issue, whereas the Americansbelieved that India was not rejecting the proposal about the five-power conference. The U.S. perception was that India looked at the world quite differentlycompared to a year or two earlier and was well aware of the global non-proliferation movement.26Was Dixit stalling for time or was he indulging in the usual diplomatic an biguity? What exactly had he agreed to? Media reports made it appear that hewas not categorical about India's rejection of a five-power conference on South Asia with regard to the nuclear issue.The Indo-U.S. dialogue on the nuclear issue began on 12 November 1991 with the Indian side headed by Additional Secretary, C.S. Das Gupta and the secondround was held in New Delhi on 19 January 1992. It was at the third round of the dialogue led by Joint Secretary, Hardeep Puri that India skilfully managedto broaden the framework of the talks, to take into account India's objections and its arguments for a broader perspective. Since this materialized afterthe Clinton administration took over, we shall come back to it presently.We may now take an overview of Indo-U.S. relations during the Bush administration and the different strands of its policy towards this subcontinent. Onthe one hand there were mounting pressures on certain issues and on the other a greater reaching out to India in a more cooperative framework and betterunderstanding of some of India's security problems.First, the pressures. We have noted how Washington raised by many decibels the pressures on India and Pakistan to control their nuclear capabilities. Inthe case of Pakistan it spoke of rolling back Pakistan's nuclear programme, if Pakistan were to qualify for further aid, but in the case of India, itsmissile and space programme was being targeted. Washington's objective of a South Asian non-proliferation agreement had not been forgotten or abandoned.As the then39U.S. Ambassador to India, Thomas Pickering, a very senior diplomat in the State Department hierarchy, told a Washington audience, while most nations ofthe world had signed the NPT or signalled their intention to do so, India continued to insist on rejecting the treaty. But Washington was willing to workwith India and Pakistan to achieve progress towards the goal of non-proliferation. "It is not an issue we are prepared to give up on", he said, addingthat raising the nuclear threshold remained "the foremost policy goal" of the U.S. in South Asia.27Increasingly the "policy goal" was extended to India's missile and space programme. The U.S. was concerned about the advances in India's space programmeand was determined to put a halt to it. It warned Russia against the supply of cryogenic engines and their technology to India on pain of U.S. sanctions.The U.S. held the sale of rocket engines as inconsistent with the Missile Technology Control Regime (MTCR), unilaterally established by itself with nointernational legal sanction behind it.28 This was followed by a U.S. announcement of a two-year ban on trade and technology transfer with and to the IndianSpace Research Organization (ISRO) which had negotiated the deal with the Russians. The U.S. move evoked a sharp reaction in Parliament, but the governmentmaintained its cool and rejected the demand for cancellation of the projected joint naval exercises.29 Eventually the Americans exerted so much pressureon the Russians that, despite Yeltsin's assurances in India, the deal relating to cryogenic engine technology was cancelled (or "modified", as the Russiansput it). It was ironic that while the Americans were abdurate about scuttling the Indo-Russian deal, they offered to sell the technology to India understrict safeguards.30Pressures were escalated on the economic front too. The Americans were dissatisfied with India's patent laws (more elegantly described in current terminologyas intellectual property rights) and what they regarded as insufficient openings into the Indian market. The trouble, in particular, was about a few drugsand was the consequence of powerful lobbies of pharmaceutical industries in both countries. American trade laws, specifically Super 301 that allowed Washingtonto take punitive action against goods of offending countries, were kept dangling as a Damocles' sword over countries like India, China and Japan (a listin which Thailand also was a new addition), but more against India and China. Special tariffs were slammed against Indian Pharmaceuticals in April, whichwould no longer enjoy duty benefits under the generalized system of preferences (GSP). The Presidential action was taken under section 504(a)(l) of theTrade Act of 1974. India exported these products worth about $60 million annually—which in the overall trade figures between the two countries was notvery substantial.At the same time, U.S. Trade Representative Carla Hills announced that India would remain on a list of "priority countries" which would continue to be watchedunder the provision of Super 30131 and would be subjected to "larger40steps" if it did not heed American trade concerns. She said that the American action would became inevitable because of the "continued theft" of Americanpatents, failure of the trade talks both in New Delhi and Washington and India's refusal to cooperate with the U.S. in the GATT negotiations on the issue.32OVERALL IMPROVEMENTYet having noted all that, the more important and the more significant fact was the overall change in U.S. policy. The thrust of the policy towards thisregion now was a shift away from the earlier pronounced tilt towards Pakistan and equally noticeable warming up towards India. That the Bush administrationsent one of its seniormost and highly reputable diplomats, Thomas Pickering, as ambassador to India was in itself, as mentioned by the New York Senatorand former U.S. ambassador, Patrick Moynihan, a tribute to India's new importance in the eyes of Washington. The shift was certainly facilitated by India'seconomic liberalization and greater integration with the world market, but the political content of the new relationship could not be ignored. The Bushadministration now became anxious over Pakistan's nuclear weapon programme and suspended U.S. assistance to Islamabad under the Pressler amendment. Itdid not try to pretend (as the Clinton administration did later) that Pakistan's programme was the same as that of India and, therefore, excusable andto be put in the same category as that of India.The Bush administration also did not pretend (again unlike the Clinton administration later) that Pakistan was just extending "normal and political" supportto the militants in Kashmir and that the Pakistani tap on the supply of arms and training in terrorism had been shut off. It repeatedly warned Pakistanand even gave it notice that it might find company with outlaw states like Libya if it did not desist from aiding militancy in Punjab and Kashmir. Of courseit had no real intention of doing so, for the Americans believed they had important political stakes in Pakistan, but the warning showed some sensitivityto Indian concerns and at least obliged Pakistan to be less blatant in proclaiming support. The Bush administration became alive to the potential of Indiaand was, it seemed, getting ready for a new relationship.The U.S. Vice-President at the time, Dan Quayle put it succinctly when he said in an interview with India Abroad News Service (IANS), that despite the recentsharp differences, Indo-U.S. relations were "very good" and that the "relationship has never been stronger". As he put it, "I want to emphasize the importanceof the friendship and partnership that we want with India. We feel very close to India."Even though he strongly defended the American standpoint on nuclear weapons, ballistic missile proliferation and intellectual property rights and the recentpunitive action against the Indian Space Research Organization ISRO, for41its deal with Russia on cryogenic technology, he, nevertheless, affirmed that "India is beginning to make a turning point, specially with the demise ofthe Soviet Union, and this will allow India to look to the West more and more for new opportunities, new capital investments, new jobs, new help for thepeople. And the United States wants to have a strong partnership with India."He saw a role for India in the new world order. "It is the second largest country in the world, there is almost a billion people. It is a very importantcountry. We want to see India develop, we want to see India grow, to have more opportunities. We believe that a strong India is in India's best interests.We also believe that it is in the United States' best interests", he added. He believed that differences between friends were normal, as for instance U.S.differences with Great Britain as well as Germany and Japan. "That means that we are strong friends and that we can discuss our differences in pubic. Makesure that you emphasize that", he told the IANS.33CHANGE OF GUARD IN WASHINGTONGeorge Bush was defeated in the November presidential elections in 1992 and Bill Clinton headed a new Democratic administration after nearly a decade anda half of Republican rule. There was a misplaced belief in India that a Democratic administration in Washington would be more friendly to India, thoughthe record of the last quarter century did not bear out this somewhat simplistic understanding. In point of fact, as we shall see later, India has hadgreater difficulties with Democratic administrations than with Republicans. Even Ronald Reagan was more sympathetic to India than William Clinton turnedout to be.Nevertheless, initially there was greater hope in India for a continuing improvement in the climate of relations. The start was, perhaps deceptively, promising.The U.S. Ambassador in India asserted that the two-week-old Clinton administration would seek "a continuity of positive change" in its relations with theIndian government. He told HTV's national video magazine, Eyewitness: "You see now a President who called your Prime Minister right after his election.A President who has expressed to your Ambassador several times in Washington his strong interest in the Indian-American relationship and indeed one whofrom my personal knowledge is very interested in this country."Yet, he acknowledged that the new government would pay particularly close scrutiny to India's human rights record and nuclear non-proliferation. These were"high on the list of priorities for the new administration, so it does not require any crystal ball gazing to figure those out."But in them were the seeds of discord, not only because of American priorities, but because of what India saw as biased application and double-standardinterpretation by the new administration.42Very soon Indo-U.S. political relations soured, once again because of Washington's tilt towards Pakistan. Although it was not easy to fathom the real reasonsbehind the shift in the U.S. position, and there was considerable debate in India over these, the facts may be noted first while the factors could be discussedlater. That the Clinton administration had embarked upon a considerably different track than the Bush administration did in the last two or three yearsof its tenure became evident from the successive statements that came from the officials of the new administration. The first shot was fired by John Malott,Principal Deputy Assistant Secretary of State for South Asian Affairs, who stated the American position at an address at the India International Centre(New Delhi) that the U.S. considered all of Kashmir to be disputed territory, that this was an issue to be settled peacefully by India and Pakistan, takingthe views of the Kashmiris, both Muslim and non-Muslim, into account and that the U.S. was prepared to be helpful in this process, if that was desiredby both sides.Each of the three principles that he outlined carried a new implication. Even though it might have been the position of the U.S. all along that Kashmirwas a disputed territory, Washington had not cared to assert the position at least for the past two decades and to put it centre-stage in its policy towardsSouth Asia. Washington laid a new stress on taking the views of the Kashmiris into account. Even though Malott mentioned both Muslim and non-Muslim, thisdistinction was soon forgotten and the U.S. emphasis came to be on ascertaining the wishes of the people in the Valley only. The ill-conceived suggestionabout a U.S. mediatory role had not been asserted for over twenty years now.34Malott followed up with a warning that India's "human rights problem had the potential to affect the overall Indo-U.S. relations" and told the Voice ofAmerica that he had come to India to deliver a message.35 Obviously the message was about resolving the Kashmir problem, nuclear non-proliferation in SouthAsia and human rights.It was in line with the change of tack by Washington that the Clinton administration decided not to declare Pakistan a terrorist state. But in order tokeep Islamabad on the hook, Washington warned that the decision could be reversed at any time if Pakistan was found backing terrorist activities (as ifWashington did not know that such backing was continuing unabated in Kashmir). President Clinton himself added chagrin to the growing uneasiness in Indiaabout the change in U.S. policy by referring, even though in passing, to Kashmir in his address to the U.N. General Assembly. "Thus, as we marvel at thisera s promise of new peace, we must also recognize the serious threats that remain. Bloody ethnic, religious and civil wars rage from Angola to the Caucasusto Kashmir", he said at Lake Success on 1 September.37 In order to mollify Indian susceptibilites that were badly hurt by this gratuitous reference toKashmir, some half-hearted effort was made by the State Department to explain it away as a rhetoric flourish.43If there was any doubt about the "new thinking" and if Malott had put things in a more sophisticated manner, the lacuna was filled by Assistant Secretaryof State for South Asia, Robin Raphel* in a background briefing to South Asian journalists stationed in Washington on 28 October. While reiterating thatUSA regarded the whole of Kashmir as disputed territory, the status of which needed to be resolved, she asserted that "we do not recognize—and that meansthat we do not recognize—that instrument of accession as meaning that Kashmir is forever an integral part of India". As an official aide-memoire pointedout, Raphel had asserted that the U.S. government did not recognize the instrument of accession. "We do not recall any such articulation on Kashmir atthe senior levels of the U.S. administration", the aide-memoire pointed out in protest and added that Raphel's statement constituted a qualitative shiftin the U.S. position.Raphel in fact appeared to be questioning the validity of the Indian Independence Act and her statement bristled with far-reaching legal and political implications.She was also dismissive of the Simla Agreement, stating that it was "20-plus years old** and there have been few discussions, if any, under that accordin terms of resolving Kashmir issue ... Therefore, by definition it is de facto, it hasn't been very effective."Raphel also was virtually dismissive of Pakistan's role in fanning militancy in Kashmir. She could not have put it more bluntly: "I think it is very importantto point out that whatever outside support there might have been or might be for the insurgency in Kashmir, in our view there are very strong indigenouselements to that insurgency. And one can even argue that at this point it is really self-sustaining."38This was a very different tune from that of even Malott, whose testimony at the congressional Asia-Pacific subcommittee hearing earlier had acknowledgedthat the U.S. government was "particularly concerned about continuing reports of official Pakistani support for militants who commit acts of terrorismin India. We are keeping the situation under active continuing review and have raised this issue continuously with the Pakistani Government at the highestlevel."39Raphel's statement came at a time when there was a serious crisis over the seizure of the Hazratbal shrine by the militants in Kashmir and India was engagedin a critical effort to ensure a peaceful resolution of the problem. The Home Minister S.B. Chavan noted that the statement had been unhelpful and perhapsonly served to prolong the crisis at the mosque.40 Indian opinion had* Raphel was earlier a Counsellor in the U.S. Embassy in New Delhi and was helicoptered into this new position because of the "school ties" with the newU.S. President.** The UN resolutions that are being referred to by Pakistan and others were nearly half a century old!44already been slighted before Raphel added fuel to the fire, and Chavan accused the U.S. of helping Pakistan in aiding anti-social elements in India. ''Wehave no evidence", he told media persons on 24 October, "but there is no doubt that the United States is helping Pakistan in aiding and abetting terroristand anti-social activities in India."41Indian sentiments were further ruffled when, responding to a letter from some Congressmen, whom many in India regarded as India-baiters, President Clintonreferred to his concern about the protection of "Sikh rights". Indian sentiments were particularly hurt at this rather insensitive reference, because CongressmanCondict and others had urged the U.S. President to "assume an active diplomatic role in resolving the crisis in Khalistan". The President's letter of 27December, in reply to the Congressmen's letter of 17 November, did not refer to Khalistan, but the mention of "Sikh rights" was somewhat anomalous whenthe situation in the Punjab had returned to peaceful normalcy.It was subsequently clarified by anonymous State Department officials that the President had to reply to a letter by members of the U.S. Congress but thathe was in no way endorsing the concept of Khalistan.42 These clarifications, however, sounded hollow because in less than two months, the President toldthe Pakistani Ambassador, "We share Pakistan's concerns about human rights abuses in Kashmir." The Pakistani Ambassador, Maleeha Lodhi, while presentingher credentials, read out a long panegyric about the persecution and oppression of the Kashmiri people "who are terrorized by half a million brutal occupationtroops making their life miserable".43 Clinton gave the impression of taking Pakistan's side in the Kashmir dispute.However, India's ire was particularly aroused by Robin Raphel and she became the focal point of Indian anger, chiefly because of the apparent hauteur withwhich she seemed to address the problem and the insensitivity she was exhibiting in expressing herself on very sensitive issues. There was widespread criticismin Parliament, in the media and by virtually all the analysts for her provocative utterances. The External Affairs Minister said in response to a query:"We do not accept anyone's right to question the status of Kashmir as an integral part of India. We are surprised that even the validity of the Instrumentof Accession is being questioned".44 Prime Minister Narasimha Rao told visiting U.S. Senators Thad Cochran, Larry Pressler and Hank Brown that statementsby officials like Robin Raphel did not help the promotion of Indo-U.S. relations.45For a while Robin Raphel was unruffled by the storm she had created in New Delhi as she believed it was "easy to create a storm" there. She continued tofocus on Kashmir and human rights while some of the other high-level functionaries concentrated on the nuclear issue so that India was sought to be caughtin a pincer movement between one issue and the other. Even three months after her contentious "background briefing", and the consequent uproar45in India, Raphel muddied the waters further by comparing Kashmir with Afghanistan. She told a luncheon meeting of the Asia Society in Washington on 10 Februarythat the "seemingly intractable and tragic South Asian conflicts—the civil war in Afghanistan and the insurgency in Kashmir—would remain high on her agendafor U.S. South Asia policy. Even though she acknowledged that the two conflicts were very different in their genesis, she clubbed them together because,she said, both were exacting a terrible toll on civilians, both had potential to mutate into wider regional conflicts, in both the participants were notready to make the compromises needed for a durable peace and "both conflicts challenge our conscience and our imagination to develop incentives to bringthe warring parties to the peace talk".46The strongest response to Raphel's and other U.S. statements came from the Home Minister, S.B. Chavan who charged the U.S. in the Lok Sabha on 2 March withdeveloping "vested interests" in Jammu and Kashmir. "It seems clear to me", he told a cheering house, "that they are ... neither interested in helpingPakistan nor India. They will like to help themselves." Referring to President Clinton's remarks on Kashmir at the time of the presentation of credentialsby the Pakistani Ambassador, Chavan said, "I am not prepared to believe that the U.S. President was not properly briefed."47In another sharp reversal of the Bush administration's policy during 1990-92, the Clinton administration tried to scrap the Pressler amendment as "unhelpful"and "discriminatory", the same line as Pakistan was vociferously advancing. Pakistan had deposited the purchase prince of 38 F-16 aircraft it had ordered,but they could not be delivered, as, under the Pressler amendment, George Bush was no longer prepared to certify that Pakistan was not developing or didnot possess a nuclear device. When the Clinton administration realized that it would be extremely difficult to get the Pressler amendment repealed, itdecided to ask for a one-time waiver on the sale of these aircrafts in return for Pakistan agreeing to cap its nuclear weapon programme under international(read U.S.) supervision.The tough talk on Kashmir was accompanied by tough talk on nuclear non-proliferation in South Asia. Washington decided to treat India and Pakistan on apar in regard to the nuclear issue, despite the advanced dialogue on the issue between India and the U.S. and the earlier understanding believed to havebeen shown by the U.S. on India's standpoint. Three rounds of talks had taken place, as we have noted earlier, two of them under the Bush administration.The third round where substantial progress was achieved was in fact held after the Clinton administration took over. Through imaginative and somewhat innovativehandling, the Indian side had managed to broaden the agenda from a mere South Asian context to a larger framework for tackling the nuclear issue.46While rejecting a multilateral discussion centred on denuclearization only in South Asia, India and the U.S. had reached a certain understanding that amultilateral forum should consider the multilateral dimensions of the nuclear issue. India had all along stood for a comprehensive test ban treaty (CTBT)and a verifiable cut-off in the production of fissionable material. These could now form a common starting point, since the U.S. had also come around tothis view, and could form the basis for multilateral negotiations, provided the ban allowed for Indian needs of power generation at its atomic reactors.This was not unacceptable to Washington. But these obligations would be applicable to all countries, nuclear and non-nuclear, and would not be confinedjust to South Asia.48All this understanding was coming unstuck firstly by Washington's decision to treat India and Pakistan equally on the nuclear issue and secondly by itsannounced intention to press for a waiver of the Pressler amendment.49 Both decisions made short work of the understanding that had been reached in thethird round of talks in September 1993. Both were interrelated.As President Clinton's Under Secretary of State for International Security Affairs, Lynn Davis told pressmen on 8 February 1994, "what we are trying todo is ... to get away from country-specific policies that are marked in legislation, but rather to focus on the individual problems". She announced thatthe Clinton administration "will be looking at India and Pakistan equally and together as we seek to craft a non-proliferation strategy to limit theirdeployment of missiles, to gain their support for a cut-off of ... material for nuclear weapons purposes, their adherence to a comprehensive test ban."50She also told a Senate Foreign Appropriation Committee that the goal was to cap, then reduce and finally eliminate nuclear weapons and for that a "one-time"transfer of F-16 aircraft was "one small credible step to achieving non-proliferation". Many Senators were, however, sceptical how the supply of F-16 aircraftwhich could deliver nuclear weapons to the enemy's territory helped the goal of non-proliferation.51One could, in fact, detect a double-track policy being adopted by Washington, two different notes emanating at the same time through different officialsor alternately from the same officials, one a hard line and the other a somewhat gentler approach, not in disarray, but in orchestrated dichotomy. Raphelcame to India in March-end to mend some fences. Before coming, while she stuck to the core of her statements and to the new line on South Asia, she softenedthe abrasive edges to limit the damage done to the psychological feeling of friendliness between the two countries. Nevertheless she told the CongressionalAsia and Pacific sub-committee that as a consequence of American pressure "that tap"—Pakistan's assistance to militants in Kashmir—had been virtually turnedoff.52 That statement flew in the face of evidence that was available to both Americans and Indians and the report that the administration itself wouldbe sending to Congress shortly enough.47Despite the External Affairs Ministry's intention to give only a "correct welcome" to Raphel, the Congress Party rolled out the red carpet to her in thebelief that she was close to the U.S. President and, therefore, should be influenced for India's viewpoint. She made few concessions on her earlier statementsbut was more careful and sophisticated in the articulation of the new American stance on South Asia. There was only one area in which she resiled and inwhich there was a noticeable shift from her earlier comment. She was now a votary of the Simla Agreement and called for progress in resolving the Kashmirdispute in accordance with the Simla Agreement, and, of course, taking into account the wishes of the people of Kashmir.53The orchestrated dichotomy was evident from Deputy Secretary of State Strobe Talbott's visit a month later. Talbott was suave and gentle. He did not hithard on the Indian standpoints. He indicated that USA was now willing not to immediately link the talks with Pakistan and India on nuclear non-proliferation.He was pursuing separate talks with Pakistan, offering them F-16 combat aircraft in return for a supervised capping of Pakistan's nuclear weapons programme.The talks with India for a capping of its nuclear programme, that included its missile and space programme, would be pursued separately. In order to accommodateIndian views on a multilateral forum for discussion of nuclear control issue, America was now offering a forum of 5+2+2 (that is the originally proposedfive big powers, India and Pakistan, and Germany and Japan) but the framework was still related to the denuclearization of South Asia.Talbott also concentrated on the commonalities and on the appreciation of India's economic reforms programme, the growing Indo-U.S. economic interactionand the potential for such cooperation.54 Above all, he was reported to have told the Indian Prime Minister that although Washington had all these concernsabout nuclear proliferation, his visit was not focused on them. He had come to tell the Prime Minister that Washington regarded his visit to USA as importantin itself and was keen to make it successful. That was music to the ears of the Prime Minister and so the visit to the U.S. in May was clinched.There was meanwhile a widespread impression that India was buckling down under the U.S. pressure on the non-proliferation talks. Washington had alreadyjettisoned the understanding that appeared to have been reached in the third round of talks on broadening the framework and the agenda for non-proliferationtalks and had reverted to the application of pressure for a South Asian solution. The impression was strengthened by the so-called secret round of talksthat was arranged in London for April end, but that immediately leaked out amidst a great deal of uproar in India. It was suspected that the leak camefrom those inside sources who were extremely apprehensive about an erosion in India's hitherto principled standpoint.The leakage frustrated the purpose of the hush-hush talks for it obliged New Delhi to take a stronger stand than it might have otherwise intended to do,48resulting in an inconclusive end to the talks. The talks were related to the possibility of an agreement on nuclear and missile issues within a multilateralframework, including a cut in India's missile programme. The discussions had sought some common ground before Prime Minister Narasimha Rao's scheduledvisit to Washington.55The U.S. agenda was in no doubt. As a senior U.S. official told select journalists in Washington, it was necessary to have private discussions to "seekto verify an end to the production of fissile materials". One of the things, he said, they hoped would happen but obviously did not, was to get the discussionsgoing in a positive way. "This was to lay out precisely what we were seeking, how we would seek to verify an end to the production of fissile materials."He added—an obvious bait being offered to it—that if Pakistan agreed to the U.S. proposal, Washington and Islamabad could "again move towards the kind ofcooperation that we have had in the past and see the possibility, at least, that would become independent of what is happening to India's programme." 56At the same briefing, Lynn Davis acknowledged that the U.S. had identical nuclear non-proliferation goals for both India and Pakistan. She outlined a three-trackapproach that Washington was pursuing. The simultaneous but separate discussions with India and Pakistan constituted two tracks while the third tried totake into account New Delhi's security concerns regarding China. As an "incentive"—to Pakistan—the administration was seeking from Congress a onetime exceptionto the Pressler amendment. "Pakistan will have to accept the cap, including the details of the verification measures prior to the release of the F-16s",she said. This was an initial step "for the overall goal of reducing and entirely rolling back Pakistan's nuclear programme".With regard to India, she explained that Washington was seeking the same goals, including an overall cap on its fissile materials, "in exchange for enhancingand broadening our scientific and technical cooperation." The third track, she said, was "essential to our overall purpose because India looks not onlyto Pakistan as it views its own security, but also further beyond to China." Consequently Washington was pushing for a multilateral forum which would dealmore generally with South Asia's overall regional security.57Two points need to be underlined here. Washington's objectives included not just the capping of the production of fissile material but also that of India'smissile programme, as had been repeatedly made clear by Washington's spokesmen. Equally imporantly, the U.S. bid to include China in this multilateralframework was not intended to commit China to any nuclear disarmament programme in this region, but only to act as a guarantor for a nuclear-free and missile-freeSouth Asia.Washington's objective in this regard was as distant from India's concerns and requirements as the earth from the moon.49The Prime Minister denied in the Rajya Sabha that India had diluted its stand on the nuclear issue and asserted that it continued to stand for a universal,comprehensive and non-discriminatory nuclear regime as envisaged in the Rajiv Gandhi Action Plan. The government, he said, intended to set up a NationalSecurity Council. He claimed that everything was misunderstood—there is not a word on capping our missile programme nor have they asked us to sign theNPT.58 This was an extraordinary statement in the face of all that Washington was saying publicly.The Prime Minister visited USA shortly afterwards. But before we consider the visit, it would be pertinent to note another U.S. document.As in all democracies, including India, in the U.S. too the left hand did not necessarily know what the right hand was doing. While Robin Raphel was proclaimingthat the conduit for arms from Pakistan to India had dried up and that there was no hard evidence that Pakistan was giving material aid to the Kashmirimilitants, the State Department's report on "Patterns of global terrorism 1993", released on 9 May 1994, stated that "there are credible reports of officialPakistani support to Kashmiri militants who undertook attacks of terrorism in Indian-controlled Kashmir." There were also reports of support to Sikh militantsengaged in terrorism in northern India, it said. Some support came from private organizations such as the Jamat-i-Islami but the report refuted the suggestionthat support for Kashmiri militants had stopped or that it came only from private agencies. In any case, the report noted, some of the private agencieswere run by former officers of the Inter-Services Intelligence Agency.59Prime Minister Rao visited the U.S. on 15-19 May (1994). Both sides made efforts to make the visit successful despite their apparent differences on certaincrucial matters. The Americans made it clear that non-proliferation issues were high on their agenda for talks,60 whereas the Indian side maintained thatit was not the main issue.61 Rao's mission could be said to have been both political and economic. The political agenda included softening of the divergenciesand developing a rapport with President Clinton, and the economic dimension was to persuade American businessmen for higher investments in India. Speakingat Houston to top U.S. business executives under the aegis of Greater Houston Partnership on 17 May, the Prime Minister said that "I have come here personallyto invite you to invest in India and be honoured partners in India's development." By investing in the Indian economy, he said, "benefits would accrueto us as well as to the American industry." 62On the political level, speaking at a joint session of the U.S. Congress Rao called for multilateral talks on nuclear disarmament to move forward towardsthe goal of complete elimination of nuclear weapons. He also called for, as a beginning, a "no first use" agreement among nations with regard to nuclearweapons. He laid down "consolidation and concretization" of democracy as "the basic and most essential agenda" for the twenty-first century. He also reaffirmed50India's commitment to the protection of human rights but, equally, the protection of the citizen from terrorism. It was an onerous task that confronteddemocratic governments today "to maintain protection of human rights in the face of the most dangerous threat to the violation of human rights, namely,the bullets of terrorism." 63The joint press conference addressed by Clinton and Rao revealed continuing serious differences on certain important issues but also the attempt by bothsides to keep the channels of communication open. The U.S. President said that while differences had not narrowed down on the nuclear proliferation issue,the stage had been set for further discussion of it. Answering questions, Clinton would not acknowledge that Pakistan was fuelling terrorism in India,but the farthest he was willing to go was to acknowledge that the U.S. had evidence that "private agencies" in Pakistan were "aiding and abetting militancyin the Valley". He also made another conciliatory statement that the U.S. was keeping an "open mind" on membership for India in the UN Security Council.His comment came in the context of the U.S. Ambassador-designate to India, Frank Wisner's earlier remarks that the U.S. would not support India's permanentmembership as it would not lead to cohesiveness in the Security Council. He also spoke of the desire of the two sides to step up high-level exchanges.64Rao's Washington visit could not be described as a failure, but the results were limited, and perhaps not very enduring. The U.S. media almost totally ignoredthe visit. It was patent also that India's visibility was not very high even on Clinton's political radar. Narasimha Rao was not in a position to makeany substantial concessions on the proliferation issue, but by keeping the dialogue going and making a pitch for the involvement of U.S. business in India'seconomy he hoped to moderate the abrasiveness resulting from Indo-U.S. divergencies and keep the relationship within manageable limits of these differences.Rao accepted U.S. Defence Secretary William Perry's suggestion for a military-to-military cooperation between the two countries and it was agreed that atimetable would be prepared to discuss the details.65 India and the U.S. also signed two memoranda of understanding, one on conservation of natural andcultural heritage sites and another on cooperation to combat production and distribution of illegal drugs.66Two positive outcomes of the visit were the "slew" of cabinet secretaries scheduled to come to India and the greater interest shown by American businessmeninvesting in India. Among the most influential aides of the U S. President, Security Advisor Anthony Lake took a more positive view of the Rao visit. Hebelieved that the heads of government had a very good meeting and that this helped strengthen the ties that had taken a nose-dive. But this in no way meantthat the U.S. had given up or even modified its objectives. As Lake admitted, one of the two important reasons for attaching importance to relations51with India was that the question of India's relations with Pakistan was "one of the most important issues in the world".67 And Defence Secretary Perry toldan NBC-TV programme that "one of our principal objectives... is that that both of them [India and Pakistan] have to back off these (nuclear) programmesand agree to a non-nuclear South Asia". Rolling back might not be immediately feasible, he said, but a freeze of the nuclear programme of India and Pakistanshould take place.68We have remarked earlier about the duality of the Indo-U.S. relationship, not just the duality between the political and economic relationship but alsowithin the political relations. As we mentioned earlier, the see-saw political relationship fluctuated within certain broad parameters and the pendulumwould rarely swing to extremes. Leaving aside the economic dimension for a while, positive developments within the political relationship were not absent.Among them must be counted the continuing defence contacts. A major Indo-U.S. naval exercise, the second in two years, took place off the coast of Ratnagiri,Maharashtra, in mid-September 1994. It was believed to have been a marine commando-training exercise and lasted for ten days.69 This was followed by animportant visit by Defence Secretary William Perry on 10-12 January 1995. The defence connection received a significant boost as Perry signed with theIndian Minister of State for Defence an agreed minute on defence relations seeking to enhance the level of bilateral defence cooperation. It envisagedcloser ties between the uniformed services and in the field of defence production and research. The civilian-to-civilian group would provide overall guidanceto the other two elements through periodic consultations between senior civilian officials of the defence ministries of the two countries and also otheragencies from the two sides. These consultations it was hoped, would provide opportunities for review of issues of joint concern such as post-cold warsecurity planning and policy perspectives, besides guidance to the joint technical group for cooperation in defence production.Perry, however, made it clear at a press conference that a deepened security relationship with India would not mean tilting away from Pakistan or from theprinciple of a balanced U.S. approach towards the two countries. He also ruled out joint technology development and arms transfer to India in the immediatefuture.70 Subsequently at a dinner hosted by the Indian Ambassador in Washington, Perry claimed that the reason for the coolness in Indo-U.S. relationshad gone away as a result of his visit and that the time had come for turning a new leaf.71 But Perry had also gone to Pakistan and his pronouncementsthere, criticizing the Pressler amendment and hailing Pakistan as a model of moderation to the "Islamic world", indicated that "this one-time strategically" of the U.S. was back in favour.72There was a bit of an exaggeration in Perry's optimistic remarks about Indo-U.S. relations, but many halpful statements made by the U.S. Ambassador, Frank52Wisner, tended to alleviate the tension in the Indo-U.S. political climate. Although there were some embarrassing comments from him when he was nominatedas envoy to India, he played a moderating role during his tenure in New Delhi. He was partially supportive of Indian efforts to revive the democratic processin Kashmir and to bring in greater transparency in its policy there.73 Later, he shocked the pro-Pakistan elements, including the leaders of Hurriyat-e-Kashmir,when during a visit to Kashmir, he welcomed the impending elections and exhorted them to participate in the democratic process.74Moreover, while Pakistan had been mounting a major lobbying offensive in the U.S., India too had managed to mobilize legislative and business opinion therein support of its cause. An India Interest Group was founded by some influential businessmen headed by General Electeric's CEO and was joined in by a numberof U.S. legislators to form an India Caucus.75 This mobilization acted as a brake on elements within the administration and outside who would ride roughshodover Indian concerns and interests.BROWN AMENDMENT AND AFTERThe U.S. abandoned its efforts to make over F-16 jets to Islamabad in the face of stiff opposition within the Congress. It now tried to sell them to a thirdparty and then refund the money that Pakistan had already deposited with Washington. More ominous from the Indian point of view, as was already known,an amendment was introduced on 5 August 1995 in the U.S. Senate for arms aid economic and to Pakistan.76 Although it was claimed to be a one-shot affairso far as the arms supply was concerned, there was apprehension in India that this would see a fresh arms race in the subcontinent.77 What caused moredismay in India was the type of weapons that were going to be supplied. These included C-Nite mod kits, M-198 Howitzers, TOW-2 launches, P-3C aircraft,and Harpoon missiles. Introducing his amendment, Senator Hank Brown explained that Pakistan had been an old friend and ally and had helped the U.S. Ithad played a critical role in the cold war in Afghanistan resisting the Soviets and had never backed out. "When we really needed them, they were therefor us."78Assistant Secretary of Defence for Near Eastern and South Asian Affairs, Bruce Beidel admitted before a Senate Foreign Relations subcommittee chaired byHank Brown that Senator Pressler's contention that the three missiles and torpedo-carrying P-3 aircraft included in the arms-aid package could reach thetip of India and beyond Kanyakumari from Pakistan was right. But he argued that without fighter-cover they would be sitting ducks for Indian jets. He informedthe committee that Pakistan would acquire yet another capability through the C-Nite kits which would enable Pakistani army's Cobra helicopters to firetheir TOW anti-tank guided missiles at night—a capability that Pakistan53did not possess earlier. He was at pains to convince the subcommittee that the package would not upset the balance of power that was in India's favour andyet conceded that India was not in a position to roll over Pakistan. India's advantage was not overwhelming, he said, and added that it was most unlikelythat India could win a decisive victory over Pakistan in a conventional war.79 A milder criticism of the U.S. decision came from the Prime Minister himselfand a much sharper one from his Home Minister. Speaking to the members of the Congress Parliamentary Party on 29 November Rao counselled the members toponder over the trends represented by the passage of the Brown amendment and hinted that a desire to put a spanner in the Indian efforts to resolve theKashmir issue would have been partly responsible for the U.S. decision. The beneficial effect of the end of the cold war seemed to have got ignored inthe case of this amendment, he said.80 Chavan, on the other hand, told the Rajya Sabha that the U.S. decision was calculated to "gain a foothold" in Jammuand Kashmir and he hit out at Washington for harbouring evil designs on Kashmir. He said he had levelled the charge against the United States "with fullsense of responsibility" and not in a bid to influence the voters in the forthcoming Lok Sabha polls.81Although the initial official U.S. reaction to Chavan's statement was rather curt and undiplomatic, it seems to have had some effect, for soon afterwardsRobin. Raphel told the House of Representatives subcommittee on Asia and the Pacific that the U.S. government no longer believed that a plebiscite waspossible to settle the Kashmir issue as contemplated in the earlier UN resolutions. She added that when she had said in her earlier statements that theKashmir issue be settled bilaterally between India and Pakistan taking into account the wishes of the people of Kashmir, she meant to include the peopleof Jammu and Ladakh as well.82A NUCLEAR TEST THAT WAS NOT AND THE CTBTNevertheless, the overall U.S. policy of equating India and Pakistan and keeping the pressure on India had not been abandoned. An inspired story was leakedout to the New York Times83 that India was preparing to conduct a nuclear test, with Washington following it up with a strong note of advice and cautionto India to desist.84 The Indian government strongly denied the story and the then External Affairs Minister Pranab Mukherjee described the report as "baseless".India had the capability, he said, but had deliberately opted not to manufacture nuclear weapons.85 There was an uproar in Pakistan about the impendingIndian nuclear test but nothing really happened.India regarded it as a red herring. The real U.S. objective was to put pressure on India to go along with the West on the Comprehensive Test Ban Treatywhich was coming up for discussion at the Disarmament Conference in Geneva, whose rules provided for a consensus for any resolution to be considered adopted.54Already the NPT had been given indefinite extension at a world conference by the signatories of the treaty, which India had not attended as it was not asignatory.The U.S. hope that the draft CTBT would have been adopted by the end of June 1996 but the Disarmament Conference's deliberations were extended because ofthe opposition of China and India. China's objections related to the procedures for inspection and verification, while India had more serious reservationsregarding the discriminatory nature of the proposed treaty.86 China's objections were met but in the case of India it was made even more difficult forit to allow its adoption through abstention. At the insistence of Britain, France and Russia, the draft treaty was amended so that it would not come intoeffect until the three threshold countries—India, Pakistan and Israel— had signed it. Initially USA did not seem to be very keen on such a clause, butit suddenly changed course and this became the position of the big powers.87 Contrary to all international law a country was being compelled to abide bya treaty to which it was not willing to be a signatory and made the treaty contingent on that country signing it.India's opposition to the proposed CTBT created very considerable heat in Washington and when it became clear that there was no way India would go alongwith it, Washington asked India to get out of the way and let the draft be adopted. Washington did not really believe that India would muster the willto veto its adoption under the consensus rule and the Use of the Indian veto on 20 August 1996 sent shock waves in Washington and other Western capitals.88The new External Affairs Minister had clarified that India might be willing to let the treaty be adopted through abstention if the amendment making itcontingent on India signing it was dropped,89 but as there was no effort to meet India's objection based on international law, India defied the U.S. andother pressures and vetoed the draft treaty. The draft treaty was subsequently pushed through the General Assembly on a resolution moved by Australia.Concluding the discussion on the Indo-U.S. differences on the CTBT and India's missile programme, it should also be noted that so far their relations hadnot been materially altered either negatively or positively by this serious divergence. The political tensions remained but so did the expansion of economicties. There was no move from Washington to choke off the economic cooperation in retaliation of India's defiance on the security issue. On the contrary,there were grounds for optimism about the development of those ties. But it would also have been for too opitimistic to state confidently that politicswould have no impact on economics. All that could be said with confidence was that the prophets of gloom were very much less than realistic in their direpredictions if India did not go along with Washington on the nuclear issue.55FUDGING ON SINO-PAK NUCLEAR COLLABORATIONAll the evidence coming from Washington made it patent that Washington had been deliberately confusing facts about the Pakistan drive for nuclear capabilityand China's role in enhancing that capability. The Clinton administration was clouding the evidence provided by its intelligence agencies about the Pakistanibid and the Sino-Pak cooperation. The Director of the Central Intelligence Agency (CIA) John M. Deutch confirmed in testimony before the Senate IntelligenceCommittee, reports that China was continuing export of "inappropriate nuclear technology and missiles" to Pakistan.90 The CIA was watching China's "menacing"movements in Asia on a "minute-by-minute" basis. Much to the chagrin of the State Department, he told the Senate committee that "there was not terriblymuch" ambiguity about the CIA's judgement with regard to the Chinese supply of M-11s to Pakistan. China's proliferation activities included "nuclear technologyto Pakistan, M-ll missiles to Pakistan and cruise missiles to Iran", he said.91Towards the end of August the Washington Post, quoting American officials, reported that Pakistan was secretly building a medium-range missile factory nearRawalpindi using blueprints and equipment supplied by China in violation of the non-proliferation laws. The partially completed factory, to be locatedin a suburb of Rawalpindi, was expected to be capable in a year or two of producing most components of a missile modelled on the Chinese M-ll.92 The reportwas described by Beijing as "groundless".The U.S. administration, however, softpedalled these reports so that it would not have to take any stiff stand against either Pakistan or China. Under Secretaryof State Lynn Davis claimed at a hearing of the House of Representatives' International Committee that the government was unable to confirm or deny thereport that Pakistan had deployed nuclear-tipped Chinese-made missiles because of insufficient evidence, but was certain that China had not supplied anymissiles to Pakistan after it made a commitment not to do so in October 1994. Even though rejecting Pakistan's claim that Beijing had not supplied anyring magnets to it, she expressed the administration's satisfaction with China's reported promise not to give Islamabad any more nuclear weapon-relatedmaterial and not to transfer any nuclear materials or equipment to an unsafeguarded facility.93The administration also contented itself with the plea that it was closely monitoring the report about a second missile factory being constructed by Pakistanwith Chinese assistance. Refusing to comment on the authenticity of the report, U.S. Vice-President Al Gore claimed that Washington had a "very active,vigorous programme" of monitoring Chinese technology exports and that it had "an active ongoing dialogue with the Chinese on this very point".94We shall discuss the possible reasons for these changes in the Clinton government's policies towards this region and these issues in our conclusion of56this chapter, after taking into account the economic dimension of Indo-U.S. relations.ECONOMICS VS POLITICSWhatever may have been the political problems, Indo-U.S. economic relations generally remained strong and were in fact getting stronger in recent years.The economic relationship with the U.S. was an important imperative of India's foreign policy. Even during the times when the political ties were ratherbrittle, the acrimony was moderated by the trade, aid and technology needs. Since the liberalization of the Indian economy began with an almost desperatehurry in 1991, the economic aspect assumed a vital significance and economics began to determine politics as much as vice versa.Washington was quick to welcome the process of liberalization and hoped to garner significant gains in terms of trade and investment opportunities. India'sneed for U.S. markets and capital and technology imports also registered a qualitative increase. If there were problems, these related to patents, IPRsand opening of the Indian market to foreign penetration. The U.S. was pressuring India against a limited opening of the Indian market. While proclaimingits intention to adhere to the new global arrangement, the World Trade Organization, the U.S. still wanted to retain its domestic legislation, to enforcecompliance on market access to the U.S. The previous U.S. Trade Representative, Mickkey Kantor told a Senate Commerce Committee that U.S. Trade Law underSection 301 would not lose its edge because of the emergence of a new world trade body.He claimed, for intance, that the manner in which the phase-out of the multi-fibre agreement (MFA) was structured, that gave a breathing spell of ten yearsto the developing countries, would give the U.S. ample tools to ensure a smooth transition. USA had fought hard, he said, to open markets abroad for U.S.textile and apparel products. He told the committee that Washington had refused to close on inadequate offers—notably those of India and Pakistan—and waspressing for improved offers from these and other countries. It is pertinent to note here that USA was India's second largest export market for textilesin value-added terms—to the tune of $1 billion. But the U.S. was also acutely aware of the emergence of a large middle class in Asia that would be thefuture market for U.S. products.95The U.S. was particularly interested in the sectors of power, finance and banking, telecommunication, insurance and consumer goods. India was responsiveto the power and telecom sectors, but less enthusiastic about total freedom in the banking and insurance sectors and approved selectively investments inthe core sectors of the economy.57One agreement in the power sector with a U.S. company highlighted the needs and possibilities as well as the problems. An agreement was signed on 14 September1994 with the Dhabol Power Company, promoted by American companies Enron, General Electric and Bechtel, under which the Government of India gave counter-guaranteesfor the first phase of 695 MW of a power project in Maharashtra that was to cost Rs. 3,000 crores. The second phase was for 1,320 MW with an estimatedcost of Rs. 3,000 crores. This was the first time that the central government was giving any such guarantees for a state project. The scheme of counter-guaranteeshad been conceived by the central government to encourage international investors to invest in the power sector which was facing a severe resource crunchat the state level, by the state electricity boards and by the country as a whole. The countre-guarantees could be activated if only Dhabol delivered theenergy but both the Maharashtra State Electricity Board and the government of Maharashtra failed to pay for it.96The deal unfortunately became a victim of domestic politics. The haste with which the agreement was reached created unnecessary suspicions. As it was concludedby the Congress government the opposition smelt many rats in it and allegations flew thick and fast how the state and the country had been gypped and howkickbacks had lined many pockets. The Bharatiya Janata Party and its ally Shiv Sena, who came to power in Bombay (now officially Mumbai), threatened tocancel the deal, but faced with the real task of administering the country and providing power and other services, they beat a hasty retreat, dropped mostof the allegations and renegotiated the agreement with the Dhabol Power Company with no radical departures. The last act of the nine-day wonder of theBJP government at the centre, which raised many eyebrows as it had bowed out before testing its strength in the Lok Sabha, was to reaffirm the counter-guaranteesto Dhabol.Some damage was done in the process to the country's need for foreign investments. It sent a wrong signal to foreign investors about the stability of governmentpolicies and the element of risk involved in investing in India. Although no serious problem arose eventually for the parent Enron Company, the fall-outof the controversy was negative for India's international standing and the confidence of foreign investors, atleast in the short run.To its credit, the U.S. government while sharing the concern of the foreign investors on the Dhabol issue, made no serious attempt to arm-twist India intocontinued adherence to the agreement that had been signed with Enron by the Narasimha Rao government at the centre and the Sharad Pawar government in thestate. The effort on both sides to expand economic cooperation continued. These received a major boost with the signing of twenty-five MOUs worth nearly$1 billion on 21 December for developing renewable energy technologies in India. The signing of the MOUs was presided over by the U.S. Secretary of Energyand the Indian Minister of State for non-conventional energy sources.58The agreements were predicted by the U.S. department of energy to have direct positive impacts on the U.S. and Indian economies/ increasing trade betweenthe two countries, thus increasing job creation, and economic expansion. 97Politics divided but economics would unite was the theme of many influential Americans and Indians, especially those who were somewhat removed from theperceived compulsions of security and strategic thoughts. This sentiment was pithily summed up by Jeffery Gerten, U.S. Under Secretary of Commerce forInternational Trade. Speaking at the Asia Society in Washington in early 1995, he urged the two countries to "work together to exchange old antagonismsfor new alliances". He noted that within the next decade or so India would become one of the world's biggest and most important emerging markets and thatthe U.S. would remain the world's most important and mature market."We will both play a major role", he said, "and are struggling to define that role. We both need in the new era ahead, where commercial ties and commercialenlargement will be at the core of bilateral and global interests." He acknowledged that there were still problems, like India's continued restrictionson the opening of the economy and U.S. restrictions on the export of high technology, but he was confident about the "main picture".98An important step forward was taken during the visit of the then U.S. Commerce Secretary Ronald Brown when he signed in New Delhi an MOU with the then CommerceMinister, Pranab Mukherjee, setting up, initially for two years, the Indo-U.S. Commercial Alliance, a super forum for bilateral consultations aimed atforging closer business-to-business links. Brown said that the alliance, to be co-chaired by the two countries' commerce chiefs and including broad-levelparticipation from industry representatives, meant the creation of an institutional framework to enhance trade and investment flows between the two countries.He thought that India-U.S. trade, which stood at $7.4 billion, would rise "exponentially". The plenary session of the Alliance was attended by a largeU.S. business delegation and leaders of Indian industry.Coinciding with the creation of the Alliance was the signing of eleven business collaborations, six in power, four in telecommunications and one in theinsurance sector—envisaging U.S. investment of about $1.4 billion. Many of the collaborations, however, related to old projects. 99The U.S. was the largest foreign direct investor in India. Between 1991 and 1995 foreign investments had touched the figure of some Rs. 600 billion (roughlyabout $22 billion), half of which came in 1995 itself. In terms of sectoral break-up, telecommunications took the lion's share, followed by fuels and metallurgicalindustries. The U.S. continued to be well ahead of other investor countries, accounting for nearly 25 per cent of the investments approval.100 The U.S.was also India's single largest market, home for nearly 20 per cent of India's total exports and receiving 10 per cent of imports from across the Atlantic.59CHANGE OF GOVERNMENT AND INDO-U.S. RELATIONSThe Congress government was defeated in the Parliamentary elections in June 1996 and a new United Front government took over. It is difficult to aver thatthere was a substantial change in the economic policies, but the new government's political constituents and allies had adopted a common minimum programmewhich, while welcoming foreign investments in infrastructure, cautioned against indiscriminate concessions to foreign multinationals and promised a morepro-poor approach than that of the Narasimha Rao, Manmohan Singh dispensation. However, both the Finance Minister, C.R. Chidambaram and the IndustriesMinister, Murasoli Maran were decidely pro-investor, both Indian and foreign, provoking the left parties within the United Front to keep sniping at thegovernment's economic policies.On the economic front the interaction with the Americans continued on a positive note. On the political front, however, Indo-U.S. relations could not registerany dramatic improvement as fundamental differences could not be bridged. There was a virtually unanimous support in Parliament and among political partiesto the government's determined stand on the CTBT. The External Affairs Minister, I.K. Gujral, stressed that India's standpoint on the CTBT would not (orshould not) have a deleterious impact on the overall relationship, and the Americans also gave no indication that they would slow down the economic relationshipbecause of India's vetoing of the draft treaty at the Disarmament Conference.*EVALUATIONEconomic interaction and political fragility has been the chief characteristic of Indo-U.S. relationship of the last four and a half decades and even moreparticularly of the 1990s and is unlikely to show a marked departure from this duality. Some change, as we have seen earlier, was noticeable during thelast two years of the Bush administration, but clearly the Clinton administration switched course soon after taking over.Many factors accounted for the change of tack by the new administration. While American concerns about human rights and non-proliferation could not be dismissedas faked, and the Clinton administration harked back to the Jimmy Carter regime's vocal advocacy of human rights, and India has to reckon with these concerns,these by themselves did not provide enough rationale for the change in line. India was a functioning democracy for the last half century and could notbe compared with dictatorial regimes, and even Pakistan has only recently had its first whiff of a popular government (even then no popularly elected governmenthas been allowed to last its full term). In any case,* This chapter was virtually completed before Winter 1996. Some of the later developments have been considered in the last chapter of conclusions.60Washington has always applied this principle selectively. There has been a thunderous silence on the human rights situation in Saudi Arabia where not evena dog can bark without the government's permission. Other examples could be cited of Washington holding its peace on flagrant abuses of human rights inits perceived security interests. Among the two most notable reasons of the change of course were Washington's reappraisal of its strategic needs in SouthwestAsia, the Gulf and the Central Asian region and Pakistan's place and role in these strategic needs. This was the Islamic arc characterized by unstableconditions and recalcitant governments, in which, in the Clinton administration's perception, Pakistan could be of considerable use as U.S. ally. Afterall Pakistan had always been with the U.S. in such situations, whether it was dealing with the emergence of radical regimes in Iraq and Iran or the suppressionof a radical movement of the PLO in Jordan in the early years, or whether it was the recent war in the Gulf.The instabilities in this Islamic arc, including Central Asia, were again presenting a darker, uncertain side to the Americans. Washington was keen to reviveits alliance ties with Islamabad, believing that it could play an important role in the developments there. India would not play that role as it kept onasserting its independence whereas Pakistan was a dependable ally whose only requirement was satisfaction of its political and strategic objectives againstIndia. As congressional aides, who received a briefing from administration officials on the recent sale of arms, told the New York Times, Pakistan wouldbe a better ally in the region if the weapons were delivered.101 A certain tilt towards Pakistan would enable it, so Washington hoped, to secure its relationshipwith Islamabad.The other most notable reason was the felt necessity to keep India contained—and not for the first time. India could pose a "political threat" in the nottoo distant future, as some in Washington saw it, and what better instrument than Pakistan to keep India in check. On the one hand India was on the pathof economic revival, which was in fact welcome because of its orientation towards a free market and the opportunities for trade and investment. On theother hand its missile and space programme could put India in the big league, which was an anathema to those already in it. In addition to the concernthat India's missile programme threatened to upset the so-called regional balance, India's space programme too sent ominous signals for the future. Indiacould conceivably become a commercial competitor in the use of space technology.Washington knew well that India had no atom bombs in the basement, even though it had that capability, and that nothing perturbing had been happening onthat front for many years. However, India's scientists headed by Dr Abdul Kalam (and before him Satish Dhawan), had given a wholly new dimension to India'smissile and space programme. If this was not capped, and if in addition India turned the economic corner, it would emerge as one of the big powers to reackonwith. India could also be expected to join soon enough as a rival in the61space market that could possible deny sizable amounts to those select few who already had a monopoly. Those apprehensions became the rationale for a sophisticatedpolicy of containment of India through various means, including the propping up of Pakistan.It is appropriate to conclude the consideration of this particaular factor that it comes naturally to those who are in the big league to be averse to newcomers.The acceptance of China had been a hugely painful affair and China actually gatecrashed into that syndicate. Those who are do not relish the prospect ofanother prize fighter. This has been the lesson of history too.Nevertheless there were many mitigating balancing factors. India could not be lumped with Iraq, Libya or even Iran (although it is really ridiculous tostamp Iran as a "rogue" state). There were limits to the application of pressure, let alone the use of force against India. Just as India could not slipinto extremist postures, Washington too had to keep itself within certain parameters in dealing with India. If India stood firm on its fundamental nationalinterests, there could be a price to pay, but not of a kind India could not live with.We have already remarked on the democratic dimension of the American polity and domestic public opinion that exercised its own constraints on the administration'sproclivity to reorder the world according to its own lights. As we go to the press, the developments with regard to the CTBT confirm our contention. TheClinton administration from its very inception, as we have seen earlier, applied very considerable pressure on India on the nuclear issue, directly aswell as indirectly through the Kashmir issue, but in the face of India's determined adherence to its basic standpoint, it did not try to slap sanctionsor adopt any overtly hostile posture. American influence was used to deny India a non-permanent seat in the U.N. Security Council, but there were otherfactors too in India's defeat at the hands of Japan. The duality of India's relationship with USA could not be clearer than in the aftermath of the CTBTissue.102India must evolve its own appropriate dual policy towards the U.S. keeping in view the complexity of the situation described earlier.*NOTES1. Hindustan Times, 1 February 1990.2. Ibid., 19 January 1990.3. For the refuelling controversy, see Asian Recorder, 4-10 March 1991, p. 21615.4. Times of India, 28 April 1991.5. Ibid., 15 June 1991.6. Hindustan Times, 28 July 1991.7. Times of India, 21 June 1991.8. Hindustan Times, 4 July 1991.9. Ibid.* Subsequent developments are considered in the last chapter.6210. Ibid., 29 September 1991.11. Asian Recorder, 1-7 January 1992, pp. 22082-3.12. N.C. Menon's report from Washington in the Hindustan Times, 29 September 1991. The report was obviously based on the briefing provided by the Indianside.13. Interview with "Vision of Asia", an ethnic TV network in New York. Hindustan Times, 29 September 1991.14. The Observer, 30 January 1991.15. Hindustan Times, 23 June 1992.16. Times of India, 10 January 1993.17. Seema Guha's report in the Times of India, 16 October 1991.18. Times of India, 17 January 1992.19. Hindustan Times, 9 April 1992.20. Times of India and Hindustan Times, 25 January 1992.21. Times of India, 13 March 1992.22. Hindustan Times, 9 April 1992.23. Asian Recorder, 10-16 June 1992, pp. 22354-5.24. Times of India, 1 February 1992.25. Hindustan Times, 12 March 1992.26. See Times of India, 13 and 25 March, 1992.27. Times of India, 19 September 192.28. U.S. spokesperson Margaret Tutwiler's statement to the press, ibid., 5 May 1992.29. Indian Express, 12 May 1992; also Asian Recorder, 17-23 June 1992, pp. 2367-9.30. James Baker was reported to have made the offer in a message to Prime Minister P.V. Narasimha Rao. Asian Recorder, 24-30 June 1992, pp. 22387-8.31. Times of India, 30 April 1992.32. Sunday Times, 3 May 1992.33. Hindustan Times, 5 June 1992.34. Official Text, released by the USIS, 19 May 1993.35. Hindustan Times, 28 May 1993.36. Times of India, 17 July 1993.37. Times of India, 17 July 1993.38. Transcript of the Foreign Press Centre briefing, 28 October 1993.39. Transcript of Prepared Statement of John R. Malott before the U.S. House of Representatives, Asia and Pacific sub-committee, 28 April 1993.40. Chavan said this to a group of visiting U.S. Senators, including Larry Pressler. Hindustan Times, 14 December 1993.41. Times of India, 25 October 1993.42. Hindustan Times, 25 January 1994.43. Ibid, 16 February 1994.44. Ibid., 31 October 1993.45. Sunday Times, 12 December 1993.46. Hindustan Times, 11 February 1994.47. Times of India, 3 Mary 1994.48. Conversations with senior officials of the Ministry of External Affairs. Also see Times of India, 22 September 1993.49. State Department spokesman Michael McCarray's press statement, 25 November, Times of India. 26 November 1993 and 11 April 1994.6350. Times of India report from Washington, 9 February 1994.51. Hindustan Times, 14 April 1994.52. Transcript of Robin Raphel's testimony.53. Times of India, 25 March 1994.54. Transcript of Strobe Talbott's press conference in India on 8 April 1996 with the author.55. Economic Times, report from London, 29 April 1994.56. Aziz Haniffa in an IANS report from Washington, Hindustan Times, 29 April 1994.57. Ibid.58. Indian Express, 4 May 1994.59. The Hindu, 10 May 1994.60. The Statesman, 15 May 1994.61. Indian Express, 16 May 1994,62. Economic Times, 18 May 199463. Indian newspapers and agencies, 19 May 1994.64. Times of India, 20 May 1994.65. Economic Times, 20 May 1994.66. Ibid.67. Hindustan Times, 25 July 1994.68. The Hindu, 18 August 1994.69. Times of India, 15 September 1994.70. The Statesman, 13 January 1995.71. Times of India, 31 March 1995.72. Hamish Mcdonald and Ahmed Rashid in Far Eastern Economic Review, 26 January 1996, pp. 14-16.73. See, for instance, his speech at Meridian International Centre, 21 December 1992, Hindustan Times 2 December 1992.74. Ibid., Hindustan Times, 29 June 1995.75. Economic Times, 4 March 1995.76. The Hindu, 6 August 1995.77. The then External Affairs Minister Pranab Mukherjee's interview in the Times of India, 31 July 1995.78. n.73.79. Hindustan Times, 16 September 1995.80. The Hindu, 30 November 1995.81. Indian Express, December 1995.82. Times of India, 8 December 1995.83. New York Times, 15 December 1995.84. Hindustan Times, 16 December 1995.85. Press Conference in New Delhi on 19 December. The Statesman, 20 December 1995.86. See the chapter on Security Problems.87. Hindustan Times, 19 June 1996.88. The Statesman, 21 August 1996.89. I.K. Gujral's comments to newsmen in Malaysia (18 August), Times of India, 19 August 1996.90. The Hindu, 24 February 1996.91. Ibid.6492. Times of India, 26 August 1996.93. Hindustan Times, 21 June 1996.94. Times of India, 27 August 1996.95. Economic Times, 12 June 1994.96. Hindustan Times, 16 September 1994.97. Economic Times, 23 December 1994.98. Hindustan Times, 14 January 1995.99. The Statesman, 17 January 1995.100. Times of India, 21 February 1996.101. As reported in Hindustan Times, 22 March 1996.102. As a postscript and as we go to the press we can note that the government has claimed that the defeat for a non-permanent seat in the Security Councilat the hands of Japan was the direct result of the pressure of "powerful countries" who resented India's determined stand on the CTBT and had cautionedthat for similar reasons India may be denied a permanent place in the Security Council. This is the price India had to pay for asserting its independence.External Affairs Minister I.K. Gujral's statement in Parliament, The Hindu, 6 December 1996.65Chapter 3 From Soviet Union to Commonwealth of Independent StatesDemise of a Special RelationshipWith the Soviet Union India had developed a kind of relationship that it did not have with any other country of the world.1 The political relationship wasbuttressed by a close economic relationship and an even closer defence link. Moscow was, at the very least, the second largest supplier of India's defenceneeds. India obtained not just modern weaponry but the technology to manufacture it indigenously too and paid in rupees, thus saving scarce foreign exchange,while providing the Soviet Union with numerous consumer goods and raw materials. The rupee-rouble trade arrangement was helpful to both sides, as the Sovietstoo were able to purchase apparel, footwear, tea and various other commodities without having to expend foreign exchange which they too did not have inplenty.Particularly the Indo-Soviet ties were an important factor in Asia, if not the world. They could counter any other equation in the region and, from India'spoint of view, contributed to the maintenance of peace, security and balance in the region. The threat that both countries perceived from the Pakistan-U.S.military alliance and at times from the Pakistan-USA-China equation was substantially mitigated by the Indo-Soviet link. From India's point of view, thisrelationship was not used for any aggressive purposes, but was significant in preventing any aggressive action against it, although inevitably both Pakistanand China were suspicious and unhappy about it. The U.S. too looked askance at this connection, but for India it provided security from the rigours ofthe peculiar, and often changing, security perceptions of these powers and helped it to insulate itself from the consequences of their actions in pursuitof their own strategic interests. For the Soviets too these ties with the second largest Asian country and the largest non-aligned country were beneficialin averting isolation in Asia, enhancing security and winning more friends in the non-aligned community around the world.66Equally important was the growing convergence of their world view. The convergence became marked with the unfolding of Mikhail Gorbachev's policies of detente,disarmament and reform. The vision of perestroika and glasnost was the nearest to Nehru's vision of the world, a world free from the threat of nuclearweapons and living in cooperation and peaceful cohabitation. The Delhi Declaration, jointly issued by President Gorbachev and Prime Minister Rajiv Gandhi,constituted the high point of this convergence.2 The declaration called for general disarmament and a non-violent world order. The political relationshipwas strengthened by the policies of reform and opening by the Soviet Union. Gorbachev placed a high value on ties with India. Relations were as strong,if not stronger, as they were under Leonid Brezhnev. There was in fact a spurt in Indo-Soviet economic relationship between 1986 and 1990. Both countrieswere diversifying their relations with other countries, but their mutual ties remained intact.NATIONAL FRONT INTERLUDEThat these bonds were not confined to particular governments or persons was evident from their continued solidity even with a change of government in NewDelhi. The installation of the National Front government with Vishwanath Pratap Singh as Prime Minister by itself made no difference to the quality ofthe Indo-Soviet relationship. As V.P. Singh said in Moscow during his first visit abroad as Prime Minister: "Friendship with the people of the Soviet Unionhad become a part of the psyche of every Indian." The Soviet Union repeatedly reaffirmed its commitment to friendship with India and to strengthening theexisting ties.This was also the period of increased tensions and exacerbation between India and Pakistan, chiefly over Pakistan's support to militancy in the Punjab andKashmir. The situation in Kashmir was becoming particularly volatile. To allay doubts that were being expressed in certain quarters about continued Sovietsupport to India and the Soviet stance on Kashmir, Soviet Prime Minister Nikolai Ryzkov made it clear that there was no change in the Soviet position.He said in an interview in Singapore that the Soviet position was the same as made known to India during President Gorbachev's last visit and Rajiv Gandhi'svisit to Moscow.3 The Soviet Ambassador in India affirmed that Moscow would not "accept any interference" in India's internal affairs and underlined hiscountry's view that all bilateral problems between India and Pakistan should be solved in the spirit of the Simla Agreement. He wanted India's territorialintegrity to be protected at all costs and warned that Moscow would stand by India as it had done in the 1971 war and on other occasions.4The Americans were greatly concerned over the tensions in the subcontinent and pressed Moscow for a joint statement against a war there. While the Soviet67Union was keen that there should be no war between India and Pakistan, it refused to make a joint declaration with the U.S. in this regard at the Washingtonsummit in May 1990.5Economic and commercial relations were also expanding significantly. The trade volume was in the range of Rs 70-75 crores. Under a protocol signed in NewDelhi on 16 April 1990 at the end of the second meeting of the Indo-Soviet working group on new forums of economic cooperation, the two countries approvedthirty-seven joint ventures. At the beginning of July 1989, there were twelve joint ventures between the two countries. Ten joint venture proposals inthe Soviet Union and sixteen in India were under consideration. According to the protocol more than forty joint ventures were under various stages of negotiationsbetween the parties concerned.6 In Moscow in May was signed an agreement on a new programme for cooperation in science and technology. The two countriesagreed upon cooperation in ten areas of common interest, such as new sources of energy, including combined use of solar and wind energies in arid zones,polymer materials and products (foam plastics, polymer membranes) and technology of production of steel and alloys.7All these details have been mentioned to underline the kind and the continuing nature of the Indo-Soviet link. This was further highlighted during PrimeMinister V.P. Singh's visit to the Soviet Union in July 1990. The four-day visit, beginning 23 July, saw the reaffirmation of mutual support and trust.The Indian Prime Minister gave unqualified support to perestroika and to the integrity of the Soviet Union, declaring, "We have an important stake in thesuccess of perestroika and in a stable, united and prosperous Soviet Union." He also gave "strong support" to and wished every success for Gorbachev'sefforts to integrate the Soviet Union into the mainstream of the world economy. India too was making efforts in the same direction, he informed the Sovietleader. "We are confident that greater integration and recognition of interdependence would contribute not only to economic growth and well-being but alsoto peace and stability",8 he said.India was thus expressing its fervent hope that the reforms would succeed and that the Soviet Union would maintain its strength and stability. This wasperhaps the first time that India was officially commenting on aspects of the internal developments in the Soviet Union, indicating indirectly the anxietyin India over some of the negative developments in the Soviet Union and extending its support to Gorbachev in his struggle to ensure reform as well asthe unity of the country. The Soviets were being buffeted by strong adverse winds and India just hoped that the storm would blow over.On his part President Gorbachev spoke of "Great India" and the "Indo-Soviet factor in world politics". Moscow warned against "interference by anyone inIndia's internal affairs". The Soviet Prime Minister said that this would be unacceptable. He told the Indian delegation that the Soviet perception wasthe68same as that of India, that the tension between India and Pakistan could be defused only through political dialogue and non-violent methods. Alluding tofears expressed in some quarters that there was a likelihood of the Indo-Soviet relationship being downgraded, he affirmed that this was a "a wrong interpretation.There was no way in which the Soviet Union could disregard India",9 he said.Economic relations, though, were becoming trickier on account of increasing decentralization in the Soviet Union, Soviet desire for trading on a free currencybasis and the vexed question of the rupee-rouble ratio. The Soviets were keen that future agreements between the two countries relating to trade and economicsshould provide scope for adjustment with the rapid policy changes taking place in the Soviet Union. Moscow was decentralizing production, financial andexport-related import decisions to individual enterprises. It was moving, although in a very haphazard manner, towards a market economy and enterpriseresponsibility and accountability. India favoured the setting up of nodal agencies and exchange of Soviet raw materials for Indian consumer goods and apolitical directive by both sides to increase trade between the two countries. The Soviets put more emphasis on joint ventures, as in leather, textilesand garments, machine tools and electronics.Immediately, the problem of the manner of handling trade was met by the rupee trade facility being extended till 1995. This mode continued to be advantageousto both sides. But the issue of rupee-rouble parity defied an early solution. The two sides could not reach any definite conclusion regarding a more realisticrupee-rouble ratio and decided to negotiate a new protocol in August governing the parity of the two currencies. The rouble had been falling in value rapidlyand the current rate was artificially kept at a high level in favour of the rouble. The last rupee-rouble protocol had been signed in 1978 with a baseratio of one rouble for ten rupees. The value of the rupee was determined in relation to a basket of sixteen currencies, using 1978 as the base. The currentrupee-rouble parity came to an unrealistic ratio of one rouble equal to Rs 31.78, leading to a massive depreciation of the rupee in Indo-Soviet trade.It may be noted parenthetically that by the beginning of 1992 one rupee was fetching 3-4 roubles on the black market, that the rouble had crashed to 160roubles to a dollar and that the slide was unabated.The Soviet Union also agreed to continue to provide India credit on soft terms for joint ventures. The two sides decided to set up a high-powered committeeto constantly interact on the modalities of a new long-term agreement to be initiated during the forthcoming visit of President Gorbachev to India, PrimeMinister V.P. Singh told newsmen on his return from Moscow. He believed that the visit had cleared the air of doubts expressed in some quarters that therewas a question mark before the Indo-Soviet relations in view of the changes there. He noted a positive Soviet response to the deferred payment69arrangement but conceded that India should be prepared for changes with the changing political and economic conditions in East Europe and the Soviet Union.10It was particularly noteworthy to Indian leaders and analysts that the Soviets were going all out in support of India despite the vast changes that weretaking place in the world and many of which were being unleashed by the Soviet leaders themselves. As the Soviets told the Indian delegation, Moscow wasunder intense pressure from the Americans to tone down its support to India on the Kashmir issue. The U.S. Secretary of State, James Baker had even senta letter to the Soviet Foreign Minister, Shevardnadze suggesting that the Soviets too send an emissary (like John Gates) to India and that subsequentlya joint delegation might go to India and Pakistan, but Moscow declined to oblige.11CHANGE OF GOVERNMENT IN INDIA AND COUP ATTEMPT IN MOSCOWThus far thus good, as the saying goes. This was particularly so of Indo-Soviet relations. Both countries were witnessing changes but the USSR was in thethroes of far-reaching events that changed the entire complexion of Indo-Soviet relations. There were swift developments in India, too, but its democraticstructure remained intact. The National Front government fell under the weight of its own contradictions in late 1990 followed by a brief interregnum ofa coalition headed by Chandrashekhar, but it too could not survive for long and fresh elections were ordered. In the midst of the election campaign camethe dastardly assassination of Rajiv Gandhi that shocked the Soviet Union as it shocked India and other countries. The Congress was back in power in June1991 as the single largest party in Parliament, and managed to provide stability to the country. P.V.Narasimha Rao became both Prime Minister and Presidentof the Congress Party.A change of government in India did not signify any change in policy towards the USSR. The policy of friendship with the Soviet Union was dictated by thenational interests of India and had become a truly national policy. It was the unfolding scene in Moscow that betokened a grave and volatile transformation,from India's point of view as much from the point of view of the Soviet citizen. Gorbachev had brought in fresh currents, but they were now turning intoa storm. There was no doubt that the Soviet leader had inconceivably changed the international situation. He had pushed the process of disarmament to apoint where a nuclear-free world did not appear to be a pipe-dream any more. He made the most significant contribution to the ending of the cold war andgave a new respectability to the concept of peaceful coexistence and a balance of responsibilities and rights. This made him a historic figure.70But he was unsuccessful at home and within the communist world. As the forces of change gathered momentum, the East European communist regimes tumbled andtoppled, one after another. The hurricane was headed towards Moscow itself. Gorbachev had moved away from dictatorship of the Communist Party and his glasnostand perestroika ushered in freedom of thought and speech. He was also cautiously pushing for economic reforms. But there were also serious errors of judgementand policy. The economic reforms were too tardy and came too late. Soviet economy did not receive the requisite boost and was increasingly in shambles.Consequently, the surge of centrifugal trends could not be successfully met. Political pluralism could not remain a robust driving force in the absenceof economic growth. Gorbachev also vacillated and excessively compromised with the Party hardliners. He came to be increasingly blamed for the politicalturmoil and economic anarchy deluging the previously centralized economy. Along with these troubles, more daring, and more ambitious reformers like BorisYeltsin were throwing a challenge to the authority of Gorbachev. Yeltsin was in particular basing himself on the support from by far the largest unit inthe USSR, Russia.For a while, things did not look too bad for Indo-Soviet ties. Their mutual trade was expected to touch Rs 10,000 crore in 1991-92. But the Soviet situationwas becoming even more fluid as decisions on many crucial questions about the corresponding roles of the centre in Moscow and the local units were beingawaited. According to Soviet sources, from fifty state trading organizations, foreign trade was going to be handled by about 7,000 firms. Centralized stateorganizations were shedding their monopoly and were being subjected to competition in the foreign market with other enterprises.The twenty years old Indo-Soviet Treaty of Peace, Friendship and Cooperation was renewed for another twenty years from the midnight of 8 August. Insteadof allowing for the provision of its automatic renewal for five years, a conscious decision was taken by both sides, as indicated in their joint declaration,to retain the provision of the agreement for another two decades. In a message on the occasion, President Gorbachev said that the treaty was a solid foundationfor Indo-Soviet relationship that had reached a new level of accord and accommodation.Yet the writing on the wall could not be ignored. The Soviet Union was in tumult; the disintegrative trends were too prominent to be ignored. There wasincreasing concern in New Delhi about the confused and confusing picture emerging in the land of its best international friend. The three Baltic republicsof Lithuania, Latvia and Estonia had already broken away and secured quick Western recognition followed by the rest of the world. Gorbachev was desperatelytrying to save the country as a unified entity and offered a new union statute to the republics that promised a new relationship with the centre in whichthe constituents enjoyed all the ingredients of autonomy short of total71independence. He had managed to obtain, through cajoling and pressurizing, the consent of almost all the republics, including the Russian Federation. Ifthe new treaty had been implemented, it would have turned the USSR into a genuinely federal union of states and also saved its unity and territorial integrity,maintaining its status as a world power and allowing scope for local economic growth.But on the eve of the signing of the historic new compact came the coup d'etat. On 19 August some hardline leaders of the Communist Party deposed Gorbachev,who was holidaying at a health resort, and took over the reins of government with Gennady Yanacv as the new acting President. The coup was short-livedbut it put paid to any chance of holding the USSR together. The statute that Gorbachev had painstakingly put together was virtually dead. Gorbachev cameback to Moscow, a shadow of his old self, vastly diminished in stature and authority, isolated from even his close friends and supporters, and the targetof growing public criticism. Boris Yeltsin had moved himself centre-stage through his courageous defiance of the coup leaders in Moscow and was no longerwilling to accept Gorbachev's superior authority. The Soviet Union hurtled fast towards extinction.India, like the rest of the world, was taken off guard and initially lacked a well-considered response. The first comment, and that from the Prime Minister,that the coup demonstrated the perils of undertaking reforms at too fast a pace, was a faux pas unworthy of a democratic government and could be put downto lack of proper briefing from our mission in Moscow (Some say the mission itself was guilty of misreading the situation). However, India was cautiousand did not immediately respond to the communication received from the coup leaders about their assumption of power. The drama in Moscow ended in threedays, saving New Delhi from the possible ignominy of having supported the return of a brutally dictatorial apparatus. The Prime Minister told the Sovietambassador that he was greatly relieved that President Gorbachev was not only back in Moscow but had resumed immediately his normal work schedule.Narasimha Rao expressed to the ambassador his "deep admiration" for the "courage, wisdom and universality of outlook" of Gorbachev, which were reflectednot only in the enlightened policies pursued at home but also in the foreign arena. It was India's hope, he said, that Gorbachev would have the opportunityof completing the tasks he had undertaken, and it would work closely with the Soviet Union in these endeavours. Much of the warmth and closeness of relationsbetween the two countries was linked to Gorbachev on the one hand and Rajiv Gandhi on the other, the Prime Minister recalled.1272DEATH OF A SUPERPOWER: INDIA'S DIFFICULTIESBut there could be no return to business as usual. The dynamics of the internal situation in the USSR militated against any such easy assumptions. The eventswere taking place with "bewildering rapidity", to use the Prime Minister's phrase for the new international situation, and India had hardly begun to takestock of the implications of the developments in the Soviet Union.Undoubtedly, India had high stakes in the health and well-being of the Soviet Union, political stakes, economic stakes, defence stakes. The proximity intheir world view and interests and the political need for each other needed no elaboration and was well understood by the people of the two countries.The unique multi-dimensional relationship had made the USSR amongst the most important countries in India's foreign policy. Some 15 per cent of India'strade was with the Soviet Union. Only a few months earlier the stepping up of this trade volume to Rs 10,000 crore by 1992 appeared a distinct possibilitybut it began slipping with the growing turmoil in that country. Actual trade fell short of its target in 1991 by at least 20 per cent.The Soviet Union was also an important supplier in the energy field. Nearly 25 per cent of India's oil needs came from there. Even with all the difficulties,Moscow had contracted to supply 4.5 million tons of crude and nearly 2 million tons of petroleum products in 1991. There were growing doubts, however,if the political uncertainty in the USSR would allow the contracts to be completed on time.No less worrisome was the question mark over the defence link. Much of India's military hardware came from the Soviet Union. Even more crucial was the supplyof spare parts. The Army relied for nearly 60 per cent of its requirements on the Soviet Union. The Air Force and the Navy felt similarly handicapped.The Defence Ministry believed that Moscow had backtracked on its commitments, including supply of spares. The repeated visits of Indian delegations, includingtwo by the Defence Minister Sharad Pawar, could not bring about a significant change in this situation.13The Power Ministry was also reported to be "gripped with panic". Would the Soviets be forthcoming with their credit promise of Rs. 10,000 crore? Of theprojects under Soviet commitment, Tehri hydroelectric project in Uttar Pradesh was promised a credit of 1,000 million roubles and Kayamukhulam, Mangaloreand Maitham 700 million roubles. Already Moscow had not met its commitments to supply several items, including coking coal, scrap iron, non-ferrous metalsand newsprint. The shortage of rupee resources was responsible for the Soviet inability to buy Indian textiles, jute and other products, rice and computersin accordance with the previous agreements.14The problem of the unresolved rupee-rouble ratio, was also assuming alarming proportions as India had already accumulated a debt figure of at least Rs 15,000crore under the old parity. The Russians appeared willing to consider a73new parity for current payments and calculations, but not for the old accounts. Persistent negotiations had failed to yield a solution nor was an earlysolution in sight. Moreover, the Russians were increasingly averse to the continuation of all exchanges in rupee payment. They preferred a significantportion, particularly under the category of defence equipment, to be paid in hard currency.India had, therefore, reason to look with trepidation upon the developments in the Soviet Union. The high-level delegations from India to Moscow were partof a frantic effort to save the core of the relationship. In pursuit of this effort the External Affairs Minister, Madhavsinh Solanki went to Moscow inmid-November, about a month before the break-up of the Soviet Union. He met both the Soviet and the Russian Federation leaders. While Gorbachev assuredSolanki that friendship with India was "our strategic course",15 Yeltsin was noncommittal. When Solanki mentioned the traditional friendship between Indiaand the Soviet Union, reportedly Yeltsin picked up a sheet of paper, soiled it up like a binocular, peeped through it and said that he didn't see the SovietUnion anywhere. Yeltsin wanted India to accept him as the chief, if not the only, interlocutor for Russia.The fact of the matter was that the Soviet Union was being rocked by internal storms. Gigantic changes were sweeping the country, the current surging forthso swiftly that India had little time to reconstruct its policy with any measure of planning. India had become used to dealing with a single point in Moscowin conducting its multi-faceted relations; that single point had ceased to exist. India had now to contend with multiple centres and multiple interestsand powerful external competition.16 It had now to deal with a myriad organizations at local levels, unsure of the fulfilment of pledges, promises andcontracts. It had hitherto been sheltered by treaties and annual plans setting down value, volume and variety of goods to be exchanged. Such exchangeswere also insulated from foreign exchange fluctuations and dearth of hard currency through a predetermined rupee-rouble exchange rate. The supply of militaryequipment was also decided at the highest levels.The framework of the political relationship was also laid down by the top leadership of the two countries. If Mrs Gandhi had to decide her moves on theBangladesh crisis, she dealt with Brezhnev and Kosygin; so too Rajiv Gandhi with Mikhail Gorbachev. That unique relationship was to be a major victim ofthe overturning in Moscow. In any case Russia's eyes were now turned towards the U.S. and Western Europe. The goals, objectives and priorities in foreignpolicy were all shifting. Russia was becoming Eurocentric. It was passing through a phase—even if temporary—of fascination, above all, with Washingtonand secondarily with Bonn and Paris.It had been coming for some time. The Soviets had come to a grinding halt and were increasingly in shambles. The leadership under Gorbachev was persistentlybut vainly appealing to the Western community, particularly the74U.S., for large-scale economic assistance. He could have all the sympathy of the White House, but the purse strings were not loosened. George Bush, whopublicly gushed with admiration for Gorbachev for bringing about the death of communism, warded off all pleas for help by averring that the Soviet economyhad not reformed sufficiently for such assistance, as if without such assistance the economy could be reformed. As a non-communist leader of Nicaraguaput it in relation to his own predicament with Washington, "a lot of talk, but no dough."Even more pathetic was the manner in which individual Soviet leaders were angling for U.S. support in their internal struggle. Gorbachev was pleading forU.S. backing in his own struggle for survival. Shevardnadze was sending messages to James Baker not to give too much importance to Primakov who had becomeGorbachev's special emissary, much to the annoyance of the then Foreign Minister, while Primakov wanted Washington to believe that he was the man to dealwith. Bessmertynkh, Foreign Minister for a brief period before the August coup, was trying to convey to the White House that he was the real dependablereformist in the Soviet administration. Not to be left behind, Yeltsin insisted with Washington that he was the man they should bet on.17It is difficult to resist the conclusion that Washington would have been quite gratified at the break-up of the Soviet Union. Its chief rival would disappearfrom the scene, leaving the field free for the remaining superpower to mould the world in its own image. That reality had a way of mocking assumptionsand expectations is quite another matter.Gone was the Soviet Union (with the wind, it almost seemed) and with it went the special Indo-Soviet relationship. It was replaced with twelve independentrepublics, of which the biggest was the Russian Federation with Boris Yeltsin as President, held together tenuously by a union treaty, with the high-soundingname of Commonwealth of Independent States (CIS). In New Delhi on 20 December the red Russian flag flew in place of the Soviet red flag with the hammerand the sickle at the Soviet embassy. Since the old Soviet Union had a highly centralized economic system, the republics were dependent upon each otherand all the others on the Russian Federation. It was essential for them to maintain some kind of link to meet their economic and even social and ethnicproblems. There were not only large Russian minorities in most of them, but also other ethnic minorities, suddenly insecure and vulnerable to oppressionand the cause of much violence, bloodshed and even civil war in some regions. The nuclear arsenal, to the great worry of the Western powers, was spreadover three republics, Russia, Ukraine and Kazakhstan, although the control levers were in Russian hands.The Russian Federation was by far the largest republic in the new CIS and 90 per cent of India's trade was with Russia, and so were the purchase and supplyof military equipment. Russia now had other priorities, other interests and other75commitments, with its gaze firmly fixed toward Washington. Having opted out of the superpower race, its foreign policy had undergone radical transformation.The unique link with India had snapped. In any case, Russia was far more vulnerable now to Western pressure and could no longer play the role that it didearlier.AGONIZING REAPPRAISAL: THE NEW COURSEThe demise of the Soviet Union was amongst the most serious challenges faced by India's foreign policy. It had to be restructured in the new era in whichthere was only one superpower. An important pillar of India's foreign relations had been knocked off, besides a substantial trading partner and even moresubstantial supplier of India's security needs. Painful adjustments had become necessary; in a way a new beginning had to be made. New relations had tobe carved out. A resilient and dynamic utilization of the positive aspects of the new international situation and minimization of the fall-out from thenegative trends—this was the exacting demand on India's foreign policy. Perhaps it was the complexity of the new era and the health of India's non-alignmentas well as the country's basic strength that saved it from being severely knocked around and that made the pangs of transition less intolerable and lesswounding. The policy of not going too far in any one direction had proved to be a handy pain-killer.Damage control was the first requirement in dealing with the new commonwealth. India had to rebuild relations with the newly independent republics, firstof all with the Russian Federation, but not least also with the Central Asian Republics (to be discussed in a separate chapter). Less than a month beforethe actual demise of the Soviet Union, when the writing on the wall was very clear and somewhat belatedly, India decided to establish direct relationswith the republics. The Prime Minister wrote to the Presidents of the Russian Federation, Kazakhstan, Turkmenistan, and Kyrgyzstan inviting them to India.New Delhi also decided to upgrade missions in Tashkent, Alma Ata and Kiev and to establish consulates in Vladivostok and St Petersburg18 (earlier knownas Leningrad). On 26 December, six days after their proclamation, India extended formal recognition to the Russian Federation and eleven other republics,including Georgia.19There was urgent need to repair relations with Russia for India still had important stakes there, trade and commerce, supply of spares for military equipment,oil and petroleum products, and so on. Neither was the need for continuation of these ties on a new basis one-sided. Russia, convulsed by economic disruptions,needed to expand its earnings. It needed to continue the sale of military equipment as an important component of its foreign trade. Consumer goods fromIndia would also be much cheaper than from the Western76markets. Old economic relationships were not easy to replace. The immediate problems related to new trade arrangements, the rupee-rouble parity and resolvingthe issue of the rupee evaluation of past credits from the erstwhile Soviet Union of which the Russian Federation was the successor state. To these wereadded the important issue of the supply from Russia of cryogenic engine technology for India's space programme. The larger picture and the look ahead intothe future will be discussed subsequently.India and the Russian Federation signed their first trade protocol in New Delhi on 22 February, envisaging a two-way trade of about Rs 7,500 crore during1992. It was agreed to continue the rupee payment arrangement as a transitional measure for 1992 until they had reached agreement on all aspects of theissue. Russia undertook to export crude, kerosene, diesel, non-ferrous metals, polythene, synthetic rubber and newsprint and to import from India tea,coffee, textile items, black pepper, soyabean extractions, castor oil, medicines, shoes, paints, cosmetics, detergents and plastic products. To facilitatetrade, India offered a technical credit of Rs 800 crores for 1992.20 The Russians also indicated their willingness to sell defence equipment and sparesto India on credit terms. They would accept part payment in cash and extend credit for the rest to be repaid over five to seven years.21The threads had to be picked up in both the political and the economic fields. Delegations had gone from India and a military delegation had come from Russiain this process of detailed negotiations to resolve the various relevant issues: An important step forward was taken with the visit in May of the RussianSecretary of State Gennady Burbulis, believed to be a close confidant at the time of Boris Yeltsin and number two in the administrative hierarchy. Commercialarrangements were finalized with the two sides signing a five-year trade agreement, stipulating that all payments and settlements would be "effective infreely convertible currencies". Another five-year agreement provided for the setting up of an intergovernmental commission at ministerial level on trade,economic, scientific and technological cooperation.22The political dialogue was no less important in the attempt to restructure the relationship. After three days of extensive discussions, the Russian Secretaryof State expressed his belief that there were "remarkable prospects" of strengthening the "permanent, historic ties" between the two countries. The RussianFederation had confirmed the validity of 67 of the 148 agreements signed by India and the former Soviet Union. The former Soviet Union had been providingdefence supplies for decades to India and the Russian Federation, he assured, would see to it that India's combat-readiness was not affected. Concreteprovisions would be made so that there was no "pause" in supplies. He also revealed that the articles of a new treaty to replace the earlier treaty offriendship were finalized at his talks with the Indian leaders, to be signed during the subsequent visit of the Russian President.23Burbulis conveyed to New Delhi that Russia attached importance to the relationship with India and that while Russia was building a foreign policy that eschewedthe granting of special preferences to regions or countries, it would not build its relations with other countries on foundations which did not fully takeinto account the dignity of the Russian state and the need for total exclusion of dependence on a third country, obviously seeking to allay the misgivingsin India and elsewhere that their relations with Russia would be influenced by Washington.While we are on the subject of commercial arrangements, we might also note that in October 1992 India formalized the norms of trade with the CIS (the erstwhileSoviet Union). The trade could take place in free convertible currency, counter trade, barter trade or any other recognized form of business cooperationinternationally, subject to specific stipulations for each form of trade.2477The problems of defence supplies were not amenable to easy solutions. The defence services were being noticeably affected by the erratic supply of equipmentand spares from Russia. The difficulties related not just to modes of payment but much more to the internal economic mechanisms and the chaos among theenterprises, concerning both operation and management. The problems were repeatedly negotiated with Moscow during 1991-92, enlminating in the visit ofthe then Defence Minister Sharad Pawar in September, the first high-level visit by any Indian leader.The Minister claimed to have achieved a breakthrough on this vital issue. All pending issues had been resolved, he said, and the supply of spares wouldbegin immediately. His visit had established that "all commitments of the former Soviet Union to India would be fully honoured and our defence cooperationwill be the highest priority for the Russian government." He denied that defence credit was discussed, nor was there any link, he said, between such creditand the resolution of the rupee-rouble debt.25It should also have been obvious that Russia needed to sell military equipment to India (and other countries) as much as others needed to buy. India wasMoscow's biggest client for military equipment. The Russian Federation exported some $4 billion worth of defence equipment in 1992. The Russian DefenceIndustries Committee Chairman, Victor Gluklukh told jane's Defence Weekly in London that Russia had lost $7.5 billion through observing sanctions againstLibya and Yugoslavia (now Serbia). Russia even eyed the Pakistan market for the supply of defence equipment, but Gluklukh was at pains to clarify thatarms deliveries to Islamabad would be possible only after consultation with long-standing defence partner, India. President Yeltsin would personally cleararms exports to Pakistan.26No one would have failed to notice the change in relationship. It was perhaps the first time that a high-level cabinet minister from India could not meetthe top-level leaders in Moscow. Pawar met the Defence Minister Pyotx78Grachev, the acting Prime Minister Yegor Gaidar, who was the driving force behind economic reforms even at the risk of serious dislocation and social pain,and Trade Minister Pyotr Aveu, but not President Yeltsin. An appointment was fixed only to be cancelled subsequently, reportedly because of his preoccupationwith the intense controversy surrounding his scheduled visit to Japan, which too incidentally was cancelled at the last minute.The problem of ensuring the supply of spares continued and even the next year the two sides were negotiating various aspects of the problem. The then AirChief N.C. Suri held extensive discussions (April 1992) with the visiting Soviet counterpart, Col. General P.S. Denkin on the matter of Russia meetingthe contractual obligations relating to supply of spares, overhauling of certain engines, product support and life extension of equipment. Keeping in viewthat the IAF's fleet of aircraft was essentially of Soviet origin, discussions also centred on application of air power, serviceability of the air fleetand understanding the usage of common equipment. The Russian air chief expressed optimism about the supply of critical spares despite the current politicaluncertainty in Moscow.27QUESTION MARKS OVER INDO-RUSSIAN RELATIONSIt must also be kept in view that Russia for the first time was passing through a pluralistic, even though somewhat chaotic phase. Even the government inMoscow was not speaking with one voice and different organs headed toward different directions. Nor can we overlook the developing struggle for power inMoscow for much of 1992 and 1993. In general the top echelons of the Foreign Ministry appeared to the public eye to be far more accommodative of Americanviews and precisely for that reason many others in the administrative and legislative structure were critical. An early instance of discordance at highlevels as it affected India related to the Russian stand on Kashmir.It appeared significant that even while the Russian Federation was in the process of assuming complete independence, the then Vice-President Alexander Rutskoi(who was subsequently involved in a major power struggle with Yeltsin) went to Pakistan on a four-day official visit. His observations in the Islamabadtalks conveyed a major change in Moscow's stand. Pakistan explained to the Rutskoi-led Russian delegation its "principled" stand on Kashmir and the Russianside "acknowledged" Pakistan's position. Both sides called for the establishment of a nuclear-free zone in South Asia, to which India had been totallyopposed, one of the reasons being that it did not address the question of security threats from ,outside South Asia. The joint communique issued at theend of the visit expressed the hope that India and Pakistan would resolve the Kashmir issue through peaceful negotiations "on the basis of internationalagreements".28 Pakistan claimed, not without justification, that through these statements Russia had shown much greater understanding of the Pakistani79sensitivities and had acknowledged that Kashmir was a disputed territory. Not insignificant was Yeltsin's offer through Rutskoi of a treaty of friendshipand cooperation to Pakistan.29These Russian moves had also to be related to its frustrations on the unresolved problems of the Afghanistan war. Rutskoi, an Afghan war veteran, had beennegotiating with the Peshawar-based mujahideen for the release of Russian prisoners of war, but the fractious and faction-ridden Afghan rebels had beenunable to deliver on their promises. Many in Moscow had obviously hoped that with these concessions, Pakistan could use its good offices to get their POWsback.30India was naturally anguished over these statements. As India protested strongly, Moscow disclaimed the interpretations being put on Rutskoi's observationsand the joint communique. The Minister Counsellor in the Russian Embassy, Alexander Kadakin clarified in New Delhi in an official statement that the "internationalagreements" in Rutskoi's statement referred to the Simla Agreement. The UN resolutions were not international agreements, he maintained. The settlementenvisaged was bilateral, to be arrived at peacefully at the negotiating table on the basis of the Simla Agreement. This clarification of his country's"unaltered stand", he said, had been conveyed to the Government of India.31There was evidence of a continuing debate among the ruling elite about relations with India in the next two years. At least some sections wanted a downgradingof these relations and a more "even-handed" approach to South Asia. Russian Deputy Foreign Minister Dimitry Kunadze told the open hearings in the Russianparliament that Russian-Pakistani ties should be upgraded to the level of Indo-Russian relations. This was contested by a sizeable section of officials,including Alexander Alexeyev, head of the Russian Foreign Ministry's South Asia Department, and the scholarly community associated with the South Asianregion.32Nor must we overlook the developing struggle for power in Russia both on personality and policy differences, a struggle in which yesterday's friends becameharsh opponents and critics. Rutskoi himself and Imranovich Khasbulatov, then Chairman of the Supreme Soviet of the Russian Federation, were two of thewell-known critics who parted company with Yeltsin and led a section of the opposition. As the economic reforms brought greater social pain, dislocation,rising unemployment, fall in industrial production, insecurity, emergence of a mafia (many mafias in fact) and general economic and social instability,Russian society was greatly fractured. Not a few blamed the West, the policy of "appeasement" followed by their government and the pace of reforms forthe deterioration. The lines were heavily blurred and critics ranged from extreme nationalists to liberal reformers and erstwhile communists. Inevitably,80foreign policy was not immune to the struggle and became enveloped in serious controversies about a proper course and Russian national interests.Amidst this developing struggle, of which subsequently the Russian parliament became the focal point, the Chairman of the Supreme Soviet Khasbulatov visitedIndia in August 1992. The turnabout in the standpoint of the Rutskoi-Khasbulatov combination was evident from his remarks to Indian pressmen in Moscowon the eve of his visit. "The Russian Parliament and I personally believe", he said, "that in no case should we bury in oblivion the good and friendlyties with India". He derided a view in the Russian Foreign Ministry that "India is not a prospective country" and could "frankly say that this is a wrongnotion and I do not share this view." As an economist, he could objectively predict that India would emerge as a "first class" economic power in the twenty-firstcentury. It was not far-sighted for Russia to see India as a second or third grade power. As a successor state of the Soviet Union, Russia needed to continuethe good relations with India. "We don't have any grounds to revise those positive and serious achievements of Soviet-Indian relations in the precedingdecades", he said.33Talking to newsmen in Delhi during his visit the Russian Speaker (that would be the parallel designation in India) asserted that Russia attached priorityto relations with India. The focus of his discussions with the President, the Prime Minister, the Lok Sabha Speaker and other leaders was on strengtheningthese relations. There was need to tackle the "real problems", mostly created by the break-up of the Soviet Union. Reflecting the emerging struggle withinRussia, Khasbulatov indicated that the position of President Yeltsin was not invincible and the outcome depended on the success or failure of his reformprogrammes. He also strongly criticized Gorbachev as primarily responsible for the disintegration of the Soviet Union.34THAT CRYOGENIC ENGINE TECHNOLOGY: ON AND OFFBy 1988 the Indian Space Research Organization (ISRO) was looking around for the acquisition of hardware and technology pertaining to geo-stationary launchvehicle (GSLV) using what was known as cryogenic engines which were critical to the development of India's capability in launching satellites in space.ISRO reckoned that if it could obtain cryo engines and related technology from friendly countries, the GSLV launch capability could be acquired in onlyfive years with none of the risks of failure and delays inherent in any research and development programme.In August 1990 the Space Commission of India approved ISRO's plan for the acquisition of cryo engines and related technology as part of the GSLV programme,relying on indigenous effort, at a cost of some Rs 756 crore. Negotiations were held between 1988 and 1990 with three foreign parties—81General Dynamics of the U.S., Arianespace of France and Glavkosmos of Russia—for acquiring these engines and their technology. The General Dynamics offerfell far short of Indian needs and talks with it were therefore terminated. The French and the Russian companies initially balked at parting with technologybut eventually agreed. The cost factor, however, favoured the Russians. For the same technology and equipment (that is, the engines) Arianespace quotedRs 710 crore and Glavkosmos Rs 235 crore. So the Russian offer was accepted and ISRO signed the contract with Glavkosmos in January 1991.35The Prime Minister told Parliament that the guidelines in the Missile Technology Control Regime (MTCR) adopted by the U.S. and six other Western countriesin 1987 specifically stated that the MTCR was "not designed to impede national space programme or international cooperation as long as these could notcontribute to nuclear weapons delivery system." While offering its cryogenic engine, General Dynamics had confirmed that it was a non-storable upper-stageand not practicable as a weapon system, he asserted. Both the French and the Russian firms had sought assurances of civilian use, non-diversion and non-transferof technology to third countries to satisfy MTCR guidelines. ISRO had given these commitments because India's programme was for peaceful purposes only,the Prime Minister said.36But with the break-up of the Soviet Union the deal ran into heavy weather. The Americans stepped up their pressure on India, but much more on the Russiansfor its cancellation as, they claimed, it violated the MTCR and the technology had military-related uses. The Russian reactions and actions, perhaps understandablein their vulnerability, hovered between defiance and anxiety, ending in pathetic surrender. For a whole year and more they kept assuring India at variouslevels that they would honour the contract and disputed American claims about the violation of the MTCR. Indian scientists too challenged the Americanassertions, made somewhat dubious by the fact that General Dynamics had itself been in the running for the contract, and pointed out that it would involvethe most cumbersome method to try to convert the cryogenic engine with its liquid propellant into military use for missiles.37The first to assure India about the rocket deal was the Russian Secretary of State Gennady Burbulis, who told PTI on the eve of his visit to India: "I don'tthink we are going to tolerate any pressure. Russia is interested in standing by the contract with India and prove that it (Russia) is a reliable partner."At the same time, he said Russia would like to go by international norms and demands and wanted the controversy resolved with the help of independent internationalexpertise.38 He repeated these assurances while in India.Similar assurances were publicly given by Supreme Soviet Chairman Khasbulatov during his visit to India. He said at a news conference in New Delhi thatRussia would fulfil its commitments for the supply of cryogenic engine82technology to India and that Russia should not allow any third country to interfere in their relations.39Even more authoritatively, President of India Yeltsin himself told his audience in New Delhi during his visit that the deal was intact and would go through.He was categorical in his assurances.40Of course ISRO Chief Dr U.R. Rao was all the time being assured by Glavkosmos that the contract would be honoured. Even as late as 11 July 1993 (five daysbefore Moscow's surrender) Rao was told in Moscow that Russia would deliver two cryogenic engines and transfer their technology by mid-1995. Rao told newsmenthat "as far as I am concerned both parties are agreed and everything is going on extremely well. There is no reason to doubt anything, there is no questionof going back on the contract." It was, however, being reported that the Russians were trying to meet American objections by providing in space agreementto be signed by India and Russia that India agreed to observe the principles of the MTCR. Indian official sources avoided a direct response on the agreement.41But the Americans were mounting their pressure. India could withstand these pressures but the Russians were increasingly feeling the pain. Washington slammedsanctions on ISRO and Glavkosmos in May (1992) and steadily escalated the pressure on Moscow. As usual, the Foreign Ministry under Andrei Kozyrev was readyto capitulate. Kozyrev, was reported to have agreed with U.S. Secretary of State James Baker that the deal with India was of an illegal nature and thathe would think about it again. He was also reported to have said at a public meeting in Krasnoyarsk that it was in the interests of Russia not to selltechnology that might add to proliferation. Glovkosmos protested strongly against his statements, accusing him of showing lack of understanding of theneeds of his country. A top agency official claimed that there were many lobbies operating in Russia, with one lobby being pro-American. The space agencyalso wrote to the Russian Parliament (Supreme Soviet) asking it to make a "judgement" about the Foreign Office's statement.42Glavkosmos was fighting a losing battle as Russia was vulnerable and the American pressure too intense. Oddly enough, or perhaps not so oddly, the firstpublic announcement about the revision of the deal came from Washington. A State Department spokesman announced on 16 July that Russia had agreed to freezepart of the contract with India to sell cryogenic rocket engines for India's weather satellite programme. The spokesman said that "some of the engineswill move to India, but Russia had agreed to freeze some of the engine technology." The contract would have to be renegotiated.43 So the engines wouldgo without their technology.Fret and fume as Glavkosmos might, it was helpless. A Department head associated with the rocket deal bemoaned "incalculable negative effects on Russia'sinternational image" and "serious economic damage to its aerospace83industry". In the Moscow region alone some 60,000 workers were involved in producing components to fulfil the cryogenic rocket contract with India. "Theindustry is in bad shape", he said, with most factories working at only 25 per cent of their capacity. Only those with foreign contracts were able to providetheir workers with a decent living.The Glavkosmos official scoffed at American charges that this technology could be used for delivering nuclear warheads. "No space expert in the world wouldever say such a thing. No one has ever used super-cooled liquid oxygen-hydrogen engines for military purposes", he said. It took three months just to preparesuch an engine for launch. There was only one possible application for this technology: to boost communication satellites into geo-stationary orbit, hestressed. The economic implications were enormous as geo-stationary satellites were vital to any nation's capability in telecommunications, weather monitoringand resource management. He was sure that the Americans "want to force Russia out of the Indian market for this type of service, and also prevent Indiafrom developing an independent capability to position satellites in geostationary orbit."44A very different note was sounded by the Chief of the Russian Space Agency (RSA). Defending the decision to go back on the rocket engine deal at the hearingsof the Foreign Affairs Committee of the Russian Parliament, he submitted that Russia should not create a rival in the world market by giving India thecryogenic technology. He contended that even if India refused to buy any engine, no Russian worker would lose his job.45 However, Speaker Khasbulatov describedthe decision as a "national disgrace".YELTSIN'S VISITThese obstacles notwithstanding, India and Russia were seriously engaged in reconstructuring their relations, even if on a new basis. Both needed each other—at least in economic and defence matters. Some of the efforts in this regard we have already noted. A high point was the visit of President Yeltsin toIndia in January 1993. He was accompanied by his wife, Foreign Minister Andrei Kozyrev, Defence Minister Pavel Grachev and other government leaders andkey presidential aides. The main impression that the Russian President conveyed on the eve of and during his visit was that Russia and he himself put ahigh value on ties with India and that Russia would protect these ties. On the eve of his visit he told a press conference that Russia would build a qualitativelynew relationship with India, while preserving all the positive aspects of the past. He stressed that India and Russia were "natural partners", but he wouldnot like to build a relationship on "special terms" that would be detrimental to the interests of any third country. "The interests of the two" (Indiaand Russia), he said, were identical. Both were committed to democratic principles. He pointed out the84need to maintain a balance with the East as well as with the West, with Europe as well as with Asia. It was time both countries restored the dialogue brokenoff since the last visit of the former President Mikhail Gorbachev. The problems— rupee-rouble parity and the Indian debt—would be resolved, the cryogenicengines and the technology would be supplied and, in fact space cooperation with India would be expanded, he added.46Yet, in his address at the Central Hall of Parliament he spoke just as an erstwhile Soviet leader would have spoken. There was an element of showmanship,but undoubtedly, he was trying to catch the spirit of the past Indo-Soviet friendship. He reiterated Russian support to India's position on Kashmir andheld out the assurance about protecting India's unity and territorial integrity. He discounted any substantial supply of military hardware to Pakistan.He put a high premium on ties with India in the new world situation.47He told a press conference the same day (29 January) that India must maintain its integrity and stay united and undivided. "Truth was on the side of Indiaand we intend to support and defend it", he said. He ruled out playing the India card against "world imperialism" or against China but, in the contextof public morality, he found India and Russia closer to each other as never before, having a relationship without political hypocrisy—a natural relationshipbased on trust.48 Important agreements were signed during the Russian President's visit and significant progress was made in enhancing Indo-Russian ties.A new fourteen-clause treaty of friendship and cooperation was signed, stipulating that the two countries would refrain from taking any action which mightaffect the security interests of each other. The preamble of the treaty took note of the 1971 pact that had enjoined upon them to consult and help eachother in the event of external aggression. The treaty, valid for twenty years, pledged to support the territorial integrity of the two countries and torefrain from interference in each other's internal affairs.49India and Russia also settled the vexed rupee-rouble exchange rate and the cut-off dates for settling India's outstanding debt totalling 9,871 million roubles.They agreed that the cut-off date for estimation of India's outstanding debts would be 1 January 1990, to be calculated at the rate of Rs 19.90 a rouble.Further, the exchange would be Rs 31.57 a rouble as of 1 April 1992 for the remaining amount. They also agreed that 63 per cent of the debts at the rateof 19.90 per rouble would be paid in accordance with the past protocols in a twelve-year period. The total debt on this account was estimated at Rs 19,693crore. At the higher rate of Rs 31.57 a rouble the debt total was put at Rs 31,093 crore.50Defence Minister Pawar signed an agreement with Russian Defence Minister Grachev under which Russia undertook to ensure guaranteed supplies of defence equipment,spare parts, product support and services needed for maintenance, repair and modernization of Russian armament deployed by the Indian Army, Navy and AirForce. The agreement was expected to boost India's85defence preparedness and relieve pressures on the three services which were facing a crisis in spare parts of equipment like MiG-29 fighters, upgraded T-72Mtanks, mobile anti-aircraft systems, warship missiles, spares for Mi-17 and other range, of helicopters and giant transport aircraft acquired from Russia.The agreement also provided for promotion of cooperation in defence science and technology, training, visits and exchange of personnel and collaborationin defence related research and development.51The signing of agreements were steps forward in finding concrete solutions, but it did not mean that all the problems were necessarily overcome. These problems,born out of the collapse of the Soviet structure without a new structure in position, required the creation of new mechanisms, besides less economic volatilityin Russia, and would obviously take much longer to work out. The proposed mechanisms were being continually discussed so as to promote trade and defencecooperation.Nevertheless, India and Russia continued to move forward in rebuilding their relations. Although Russia was going through a difficult period of politicaland economic volatility, the two countries had not stopped displaying a certain natural sensitivity for each other's concerns. India was a composite society,a multi-religious and multi-lingual country. Russia too was a multi-ethnic society and the erstwhile Soviet Union of which Russia was the core component,had a great deal of experience as a composite country. Both sides knew the threats that came from encouragement, particularly from outside, to parochialtrends, to minority apprehensions and susceptibilities and to majority undercurrents of chauvinism.A practical manifestation of this mutual understanding was the agreement against terrorism and organized crime signed between the Russian Interior Ministerand the Indian Home Minister in New Delhi on 18 October. The accord provided for cooperation against threat to life, health, freedom and dignity of personsand property and organized and international crime and terrorist activities. It covered cooperation in combating illicit operations in weapons, ammunition,explosives, toxic substances and radio-active materials, as well as trafficking in narcotic drugs. It provided for a regular and continuing exchange ofinformation, sharing of intelligence and planning coordinated counter operations. The agreement was valid for three years and could be extended for anotherthree years.52NARASIMHA RAO IN MOSCOWPrime Minister Narasimha Rao's visit to Russia at the end of June next year was in continuation of the process of the restructuring of Indo-Russian relations,on a different but more stable basis. The discussions and the agreements indicated how the same problems persisted, despite earlier claims that they had86been resolved. We have already noted the major problems that defied agreements earlier. The deliberations revolved around the supply of defence equipmentand spares, trade and economic relations and how to get moving, so to say, on debt payment to Russia as the successor state to the Soviet Union. Equallyimportant was the renewed effort to rebuild a political relationship after the collapse of the Soviet Union, signifying, in the words of a seasoned journalist,"the overcoming of the derailment in Russia-Indian ties", and initiating a constructive interaction on a broad range of bilateral regional and internationalissues, including "a joint search of ways of resolving contemporary problems."53Politically of very considerable significance was the new "Moscow Declaration" on the protection of the interests of pluralistic states, issued by NarasimhaRao and Boris Yeltsin on 30 June. The document declared "the determination of the two countries to protect the cultural and religious diversities of theirsocieties" from the dangers of "religious exclusivism, aggressive nationalism, terrorism and separatism", which were threatening the unity of pluralisticstates. The two countries supported "each other's territorial integrity as constituted by law and enshrined in their respective constitutions." The Declarationaffirmed that the peoples of India and Russia had already exercised their right of self-determination. "Russia and India, being among the largest multi-ethnic,multi-lingual and multi-religious states, recognize their responsibility for opposing the threats to democracy and peace together with other members ofthe world community",54 the document said. Obviously the two sides were endorsing each other's concerns about fanning ethnic and religious divides fromwithin or without and inflating minority rights or encouraging majority militancy.An accompanying document, entitled "Declaration on the Further Development and Intensification of Cooperation between the Republic of India and the RussianFederation", spoke of a new stage of interaction between the two countries, but "not directed against any third party." It reiterated the deep interestof the two countries in promoting peace and stability "in the area between the borders of the Republic of India and the Russian Federation". The referencewas obviously to Kashmir and the Central Asian Republics. The two sides expressed their serious concern at the continuing tension in Tajikistan and onthe Tajik-Afghan border. They expressed "their readiness to cooperate bilaterally and with all other states in combating terrorism, including that supportedfrom outside, subversive activities and international crime" which posed a serious threat to the territorial integrity and the democratic and secular natureof their states and the human rights of their citizens.55Russia also agreed to meet India's defence needs and signed two defence agreements with India. The first was a compact to form a joint venture company,the Indo-Russian Aviation Private Limited, in India to service and provide spares for military aircraft of Russian origin, perhaps the first of its kindfor Russia.87With a $400 million equity base, to be shared on a 50-50 basis, the joint venture was to be headed on the Indian side by Hindustan Aeronautics Limited (HAL)and Industrial Credit and Investment Corporation of India (ICICI). The other agreement extended a $830 million credit to India for purchase of defenceitems and spares. Other agreements signed included memoranda on cooperation in science and technology, information, tourism, environmental protection andthe exploration and use of outer space for peaceful purposes.56Another agreement provided for better utilization of the total debt of Rs 30,000 crores owed by India. For making fuller use of the annual payment of Rs3,000 crores India and Russia agreed to use the Russian money parked in India for setting up joint venture projects in the infrastructure.57On his return Narasimha Rao told the Lok Sabha that there was no discussion with Russia on India's missile and nuclear programme during his visit. "Theyknow our position so well that they did not raise it at all during my visit", he said.58ECONOMIC TIESTrade with Russia had jumped up by 43 per cent in fiscal year 1993-94, totalling some $898 million or over Rs 2,000 crores. India's exports to Russia duringthis period stood at $639.08 million, up by 22.7 per cent in dollar terms, whereas imports from Russia rose by as much as 43.64 per cent in terms of dollarsat about $258 million.59 This halted the earlier downward trend in their trade. A trade protocol signed on 25 August opened new areas of cooperation andcollaboration. This pertained to the ferrous and non-ferrous sector, particularly the aluminium, copper and zinc industry.60As in the defence sector trade too suffered from the uncertainty and somewhat chaotic decentralization in Russia. The free fall of the rouble, the spirallinginflation and economic and bureaucratic confusion made for volatility in trade and economic relations. Not many Indians had, therefore, set up joint venturesin Russia even though many Western companies had set up shop there. As was noted by some analysts, Indians know the Russian and other CIS markets verywell but not many were willing to invest scarce resources there. There were some thirty-five Indian joint ventures in Russia but many of them seemed tobe marking time, waiting for more settled conditions before putting in more money. The hotel business attracted the maximum attention. Potential was alsobeing manifested by pharmaceuticals, tea, leather goods, construction and service sector like insurance, software and tourism.61In the Russian view, as expressed by Prime Minister Victor Chernomyrdin, the problems in trade and economic cooperation between Russia and India were dueto the restructuring of the Russian economy. The "slow reaction" of Indian business to changes in Russia was an important factor in the existing difficulties,88he said. As a result, many Indian firms, in his view, lost their hard earned positions in the Russian market to more aggressive and less cautious competitionfrom "third world" countries.However, despite all the difficulties trade ties expanded rapidly, as the latest available figures revealed. They crossed Rs 5,000 crores during 1995-96,touching nearly Rs 7,000 crores (over $2 billion), with imports from Russia registering a hundred per cent spurt. These included mainly non-ferrous metals,fertilizer, iron and steel, newsprint and machinery. It was also an indication of improvement of conditions in Russia.62POLITICAL AND DEFENCE TIESSo we see the political ties between India and Russia being gradually strengthened. The Home Minister, S.B. Chavan paid a week-long visit to Moscow towardsAugust end (1994) seeking an extradition treaty with Russia. India was keen on such a treaty, believing that it would send the "right kind of message"to any terrorists using Russian soil or surrounding regions, or even otherwise, to militants. The Russians, however, wanted to study a proposed draft carefullyfor its legal implications. Nevertheless, the visit afforded an opportunity for deeper political interaction and Chavan described his visit as "very good."He had meetings with Prime Minister Chernomydin, his counterpart Yerin, Foreign Minister Kozyrev, Minister of Nationality Affairs and Regional Policy N.D.Egorov, chief of Russia's Counter Intelligence Services Sergei Stepashin and Commander-in-Chief of the Russian Border Guards, Gen. A.I. Nikolayev, whoseunits were deployed on the borders of the ex-Soviet republic of Tajikistan with Afghanistan.63Another substantial step in strengthening the political ties was the visit for the first time- of Russian Prime Minister Victor Chernomyrdin to New Delhitowards the end of December.64The Indo-Russian relationship also received a boost with the appointment of Yevgeny Primakov as Russia's Foreign Minister and his visit to India in March1996. Primakov replaced Kozyrev, who was perceived as focusing entirely on the West, had downgraded relations with India (came to India only once and thatas a part of Yeltsin's entourage) and believed that Russia should treat India and Pakistan on an equal basis. Primakov, on the other hand, was not onlyan orientalist (Chairman of the Institute of Oriental Studies in Moscow for a number of years) but also very familiar with India and had chaired or co-chairedmany an Indo-Soviet seminar and dialogue (some of which were also attended by this author both in the Soviet Union and in India). It was quite apparentthat Primakov would follow a more balanced foreign policy than his predecessor.An agreement to establish a hot line between Delhi and Moscow was signed during Primakov's visit, apart from two other agreements on scientific and89cultural exchanges. More significant was what Primakov said in New Delhi. He told his Indian counterpart at the time, Pranab Mukherjee, that strengtheningof relations with India was a "strategic goal" of his country's foreign policy. Russia considered India a priority partner and the two countries hopedto enter the next century with the common aim of combating certain dangerous international trends—terrorism and discrimination against some countries.Russia rated India as a global power, he said. He also backed India's stand that Kashmir was a bilateral matter to be resolved within the framework ofthe Simla Agreement.65As for as defence ties were concerned the relationship was picking up again, but the Russians were becoming keener on selling their armament. For a numberof years before the dissolution of the Soviet Union, Russian arms sales declined from over $17 billion in 1987 to just over a billion dollars in 1992.The Russian army was critically short of funds for even its ordinary maintenance and the Russian military R&D was seriously cash-strapped. Russia foundit desperately essential to step up its arms sales and India was a natural customer. Prime Minister Chernomyrdin told Indian newsmen that Russia attachedprimary importance to developing military-technical cooperation with India.66 Although the Russians were offering a large number of state-of-the-art weapons,India was both careful and choosy.67 India had ordered, apart from spare parts which was a major problem for the Indian Air Force and Army, a number ofitems, like 10 MiG-29 aircraft, the all-weather counter-airfighter which the Indian military brass believed was the only available plane that could matchPakistan's F-16s in dogfights.68Although India was keenly interested, besides MiG-29, in the latest Su-30 fighters, K-class submarines and an aircraft carier, there was no rushing intohuge purchases. The financial crunch was debilitating the army but there did not appear to be many alternatives available. Moreover, India apparently wantedto be very sure of both the battle-and cost-effectiveness of the military hardware it purchased.It must be mentioned, however, that Russia remained an important supplier of spare parts and modern weaponry for India. It would also be pertinent to mentionhere that despite occasional reports about a possible Russian supply of arms to Pakistan,69 Russia continued to excercise restaint and did not supply thekind of weapons that would upset India. This must be put down to the continuing defence sales relationship with India and its importance both as a buyerand in political terms.Postscript: It was after over a year's hard thinking and tough negotiations that India concluded a major arms deal with Russia to purchase 40 Sukhoi-30multiple fighters for the Indian Air Force. The long-range Su-30 fighter would replace the ageing MiG-23s and MiG-27s with the Air Force.7090NOTES1. The development of Indo-Soviet relationship, particularly during the Indira Gandhi and Rajiv Gandhi years as Prime Minister, has been discussed at lengthin the author's earlier volume, India's Foreign Policy, Vikas Publishing House, New Delhi, 1987 and India and the World, Sanchar Publishing House, NewDelhi, 1992.2. For details see the author's earlier work on India's Foreign Policy, Chapter 4.3. Times of India, 18 February 1990.4. Press Conference, 12 February, Times of India, 13 February 1990.5. Dilip Mukherjee in Times of India, 23 July 1990. This was also confirmed by sources at the Foreign Office.6. From the text of the protocol.7. Hindustan Times, 22 May 1990.8. Ibid., 24 July 1990.9. Times of India, 24 July 1990.10. Hindustan Times, 27 July 1990.11. Inder Malhotra in Times of India, 2 August 1990.12. Times of India, 24 August 1991.13. See M.K. Dhar in Hindustan Times, 11 November 1991.14. Ibid.15. Indian Express, 17 November 1991.16. See for instance, PTI report from Moscow, The Statesman, 5 November 1991.17. For a graphic blow-by-blow account of the inside story see Michael P.R. Beschloss and Strobe Talbolt, op. cit.18. Hindustan Times, 24 November 1991.19. The Hindu, 27 December 1991.20. Ibid., 23 February 1992.21. Hindustan Times, 22 February 1992.22. Indian Express, 4 May 1992.23. Hindu, 5 May 1992.24. Hindustan Times, 8 October 1992.25. PTI report from London, Times of India, 5 March 1993.26. Eventually Russia did not make any significant sale of arms to Pakistan.27. Times of India, 29 April 1993.28. The Hindu, 23 December 1991.29. See Pakistan's Secretary General Akram Zaki's interview to the Muslim, in Times of India, 26 December 1991.30. Zaki admitted the link between the two issues. Ibid.31. Hindustan Times, 28 December 1991.32. See Sumit Chakravarty in Hindustan Times, 11 February 1993.33. UNI report from Moscow in Hindustan Times, 3 August 1992.34. Indian Express, 6 August 1992.35. See Prime Minister P.V. Narasimha Rao's statement in Parliament, 23 April 1992.36. Ibid.37. Conversation with Dr Srinivasan, former head of ISRO.38. The Hindu, 1 May 1992.39. Indian Express, 6 August 1992.40. Yeltsin's address to the Parliamentarians at which the author was present.9141. Times of India, 12 July 1993.42. IANS from Moscow, Hindustan Times, 9 August 1992.43. N.C. Menon in Washington, Hindustan Times, 17 July 1993.44. Fred Weir in Moscow, Hindustan Times, 22 July 1993.45. Times of India, 5 August 1993.46. The Hindu, 25 January 1993.47. The author was present at his address in the Central Hall of Parliament.48. Asian Recorder, 19-25 February 1992, p. 22929.49. The Statesman, 29 January 1993.50. Hindustan Times, 29 January 1993.51. The Hindu, 29 January 1993.52. Indian Express, 19 October 1993.53. Anand Sahay from Moscow in Hindu, 1 July 1994.54. Text of the Declaration with the author.55. See fn.53.56. Times of India, 1 July 1994.57. Economic Times, 1 July 1994.58. Hindustan Times, 26 July 1994.59. Economic Times, 29 June 1994.60. Ibid, 26 August 1994.61. Ibid, 13 November 1994.62. Ibid, 21 December 1994.63. Ibid, 17 April 1994.64. The Hindu, 3 September and Ayesha Kagal in Times of India, 4 September 1994.65. Times of India, 31 March 1996.66. Economic Times, 21 December 1994.67. See, for instance, Manoj Joshi in Times of India, 8 November 1994.68. Hindustan Times, 30 May 1995.69. See, for instance, a story in Times of India, 16 November 1994.70. See also Conclusions at the end of the book.92Chapter 4 Central AsiaBACKGROUNDCentral Asia was once described by an eminent U.S. scholar, Owen Lattimore, as the pivot of Asia (also the title of his celebrated book). It was the cradleof civilization and has witnessed the march of history, of commerce and trade and, no less, the march of troops of diverse countries. Samarkand and Bukharawere the centres of commerce from the Orient to the Occident. Then war and conflict and ethnic animosities convulsed the region as did the czarist Russianadvance into the steppes and Turkestan. Then came the Soviet, revolution and Stalin's onward march, absorbing virtually the whole of Central Asia (excludingonly Afghanistan from its orbit). Islam had come to be the most dominant religious and cultural influence in Central Asia, but generally it sat lightlyon the people, subject as they had been to diverse influences in history.1Under Soviet rule Central Asia was transformed in many ways, some good and some not so good. In the fields of education and health Central Asia made rapidadvances, but economically and politically the fulcrum was moved to Moscow. Communist parties were established in the Central Asian region but most oftheir leaders were Moscow's appointees, and Stalin purged all those local leaders who in his view betrayed any feelings of regional loyalty.Then suddenly came separation and independence with the collapse of the Soviet Union in December 1991. As Central Asia has now come to be defined generally,it is composed of five states: Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan and Kyrgyzstan. Virtually all of them were ill-prepared for independence,with insufficient organizational capabilities and poor economic infrastructure. The communist leaders, who were in control in these countries, hastilyproclaimed their independence and assumed the reins of power of the new entities. But many of them were hugely troubled by ethnic conflicts, religious"fundamentalism" and armed struggles for power, many of these merging into each other.93So there are certain basic facts in the Central Asian situation. One is the ethnic diversity and mixture in almost all countries of Central Asia, addingto the volatility of the region. To take a few examples, the Uzbeks constitute about 24 per cent of the population in Tajikistan (besides 4 per cent Kazakhsthere), 13 per cent in Kyrgyzstan and 9 per cent in Turkmenistan. There are also 5 per cent Tajiks and 4 per cent Kazakhs in Uzbekistan, besides Germansand Ukrainians in some numbers in the region. Complicating the ethnic situation substantially is the sizeable Russian population in the region. It wasin 1991 as much as 38 per cent in Kazakhstan, 22 per cent in Kygystan, 10 per cent in Turkmenistan and 8 per cent each in Uzbekistan and Tajikistan.2 Althoughthere was an exodus to Russia during the period of turmoil, a sizeable number remains. The ethnic mosaic is a serious source of instability and conflict.Even more serious is the use of religious fanaticism to gain power. So-called "fundamentalist" movements are engaged in violent struggles in some countriesof Central Asia to dethrone the existing more tolerant and secular leaders to establish their brand of Islamic rule. This struggle has particularly emanatedfrom the mosques which have often received lavish funds from abroad. It is not Iran but Saudi Arabia that has been the pre-eminent source of "fundamentalism"in Central Asia, where it is believed to have devoted nearly a billion dollars in the last few years for the reconstruction of mosques and mosque education.At least one state in Central Asia, Tajikistan, is the direct victim of the fall-out of the Afghan civil war, where fundamentalist forces spilling overfrom Afghanistan have been engaged in a civil war against the anti-fundamentalist leadership which has been bolstered by Russian troops and the supportof Uzbekistan and Kazakhstan. No detailed discussion of the developments there is possible in this volume but the broad picture is being mentioned as thesetting for India's policy towards this region.The other fact of the Central Asian situation was that most of these countries had a mono-culture economy. Cotton was grown extensively but went almostentirely to the rest of the erstwhile Soviet Union. Even when there was some machine industry, there was no local or regional use for it. The region hascertain valuable mineral and natural resources, particularly Uzbekistan, Kazakhstan and Turkmenistan, with considerable resources of natural gas and oil.But it is handicapped by an underdeveloped infrastructure for full export use, having had mainly to go through Moscow. The Central Asian states had beenheavily dependent upon subsidies from Moscow. The immediate impact of the dissolution of the Soviet Union has therefore been critical.It should also be borne in mind that the situation was not uniform in all the Central Asian states, neither socially, nor strategically, nor economically.Kazakhstan, the second largest state with 17 million people but the largest in area (2,717,000 sq km.), was rich in resources—oil, iron ore, manganese,uranium, chrome, titanium as well as nickel, wolfran, molybdenum, bauxite and copper. It94also produced steel and ferrous metals. But its social situation was more complex with a near 40 per cent Russian population.Uzbekistan too was a large state with twenty one and a half million people and 447,000 sq. km. area and abundant natural resources, self-sufficient in energy,well supplied with grain and flushed with a quarter of the gold reserves of the former USSR. Its complex social situation stemmed from the fact that therewas a sizeable Uzbek population in most other Central Asian states, requiring diplomatic finesse in developing mutual relations. 3Turkmenistan, large (488,000 sq. km.) but sparsely populated (only about 4 million people, smaller than the population of Delhi) was abundantly endowedwith natural resources, being the fourth largest producer of natural gas in the world. On the other hand, much poorer and less developed are Kyrgyzstan(4.6 million people with 198,000 sq. km. area) and Tajikistan (5.7 million people with an area around 143,000 sq. km.) although the former possesses largereserves of gold, while the latter could be developed for tourism if it were not troubled by the Afghan war and civil conflict.Yet another basic fact of the Central Asia situation are the influences that have come from outside. Recent history and economic logic have determined thecontinuing Russian influence. Russia remains an important factor in Central Asia, both in economic and security terms. Political, economic and geopoliticalconsiderations led the Central Asian States to become members of the Commonwealth of Independent states (CIS). The leaders of the two largest states ofUzbekistan and Kazakhstan, Islam Karimov and Nursultan Nazarbaev took the initiative not only to form a Central Asian Community in January 1993 but alsoin setting up in Moscow on 8 August 1993 a regional security system with Russia by which the inviolability of the fronties of the Central Asian stateswas recognized as well as their obligation to defend each other against outside aggression.The outside influences also extend to Iran and Turkey. Historically, Turkey has had the widest influence in Central Asia, more particularly between thetenth and sixteenth centuries. Initially, Turkey believed itself to be the natural role model for these states. Iran too has had very considerable historicalinteraction with the region, tracing it to the pre-Turkic period, indeed until it was swamped by the Turkicization of Central Asia. Even today, the Kyrgyzpopulation speaks a variety of Persian. Iran too has been active in extending its relations with the new states.4 Yet another state that has had historicalinteraction with Central Asia is China, with common borders with three of them, and displaying considerable energy in developing relations and influencein Central Asia.Into this picture Pakistan too jumped with great alacrity, hoping to use the Islamic card and its ties with Iran and Turkey, perhaps looking over the shoulderat India and aiming at excluding, to the extent possible, any extension of Indian influence there. Immediately upon their achieving independence the Central95Asian states were invited by Pakistan, Turkey and Iran to join the Economic Cooperation Organization that they were already running. Tajikistan, Turkmenistan,Uzbekistan accepted the invitation immediately and so did Azerbaijan and Afghanistan, but Kazakhstan and Kyrgyzstan joined later. Even though Nawaz Sharif,then Prime Minister of Pakistan, opened the second conclave in Islamabad on 6 February 1993 with great fanfare5, the new grouping too faced many difficultand, perhaps, intractable problems. Besides the political difficulties, civil war in Afghanistan and the traditional Turko-Iranian rivalry, the new organizationwas constricted by paucity of capital and investment to become the engine of growth in the region.It is in this backdrop that India's relations with the Central Asian states have to be considered. It should be recalled that India had close historicaland cultural relations with Central Asia. The Silk Road was the route for commercial and cultural contact for India too. Nevertheless, after independence,India had to conduct its relations with the Central Asian states (through Moscow. The Indian foreign policy establishment was, therefore, thrown into considerableconfusion at the collapse of the Soviet Union and the sudden emergence of the new independent states in Central Asia. India was as ill-prepared to dealwith the new situation as they were in exercising their independence.India made hasty efforts to establish new relations with these countries with a number of foreign service emissaries rushed there, offering whatever assistancethey could and carrying invitations to the leaders of the new countries to visit India. But the situation was extremely complex and the road ahead forIndia was bumpy and tortuous. India had certain advantages but also some serious disadvantages.India's ancient cultural ties with Central Asia stood it in good stead. These were by themselves not at all sufficient to build or sustain a new relationshipwith them but were initially helpful. There was goodwill for India and no animosity. The Central Asian states were not living in the shadow of the fearof Indian hegemony as they did of Russian, Chinese, Iranian, Turkish and Western hegemonism. There were no unexpressed reservations in the developmentof relations between India and the Central Asian states, nor any apprehensions in the minds of the leaders of Central Asian states of the possibility ofa price to be paid or unacceptable concessions to be made for developing relations with India or for getting, goods and services that they needed. Therewas no protection money to be advanced. The Central Asian states desired no extangling alliances and wished to be non- aligned.India and the Central Asian states shared certain ideals of rationality and secularism. Although the Central Asian Republics had joined the Organizationof Islamic States, the leaders in both the regions were struggling against terrorism and significant forces of religious extremism and bigotry ("fundamentalism").Both wanted to keep at bay those who appealed in the name of religion to96capture power. Their target was power, their means so-called fundamentalism, the preaching of intolerance, hatred and violence. Eventually, the outcomeof the struggle would depend essentially on internal developments, but India certainly had a stake in befriending and helping with its limited means thesecularist leadership in these states.But there were numerous disadvantages too that India suffered from in establishing very close ties with the Central Asian states. India, of course, hadno direct land route to these states. It was a neighbour, but not an immediate one. Relations with Pakistan being what they were and Afghanistan in suchturmoil, that route was virtually closed to India. But direct route was not the only obstacle in the way of development of any special relationship withCentral Asia, or even a prominent role there. A more serious obstacle was the limitation on India's financial capacity. The Central Asian states primarilyneeded huge investments in developing their economies and markets and money for their produce. India was in no position to offer the kind of capital investmentthat they needed, nor could it lift the oil, gas and other materials that they produced in large quantities for lack of facilities and resources. The CentralAsian states also needed new routes for access to would markets for which also massive investments were needed. Iran was limited by shortage of capitaland India could play only a small role.To develop a significant a relationship in the region it was incumbent upon India to concert forces with Iran and Russia that had both historical contactsand land access. Russia still occupied a fairly central position in the economy of the region, and there was considerable commercial potential in the developmentof Iran's relations with the region. As we shall see later, India made some efforts to use this opportunity, especially through relations with Iran.Within these limitations India endeavoured to develop new relations with Central Asian states. Initially at least there was a warm response from these stateswhich were expecting (or over expecting) from India not only political support but also large-scale economic interaction, investments and technical andscientific help. Among the early callers was Kazakhstan's President, Nursultan Nazarbaev who came to New Delhi in February 1992, perhaps the first countryhe visited outside the CIS members.KAZAKHSTAN AND UZBEKISTANNazarbaev's world political outlook was close to that of India. Replying to media questions, the Kazakhstan President declared that his country would notencourage religious or any other kind of fundamentalism. He said this in the context of the concern in India about the possible rise of fundamentalismin the wake of attempts by Pakistan and some other states to forge close ties with Kazakhstan and other Central Asian republics. His government, he emphasized,97was committed to a clear-cut policy of fostering secularism, with all sections enjoying freedom of worship. If an Islamic fundamentalist state was to beformed, "it will take us many centuries back", he maintained. Central Asian states had been interacting with neighbours like India and Afghanistan forlong and were keen on revitalization of the relations with them, he said.6Nazarbaev and Rao signed an agreement on the basic principles governing relations between the two countries. Kazakhstan and India also signed on 22 Februarya framework agreement on cooperation in trade, economic relations and science and technology, one of the five agreements signed by the two countries. Itprovided for promotion of contacts between the trading and industrial enterprises of the two countries through exchange of business delegations, participationin fairs and exchange of information. Agreements were also signed in areas like culture and tourism.7A notable effort to boost ties with Central Asia was Rao's visit in May 1993 to Uzbekistan and Kazakhstan.8 Rao was in Almaty (the capital of Kazakhstan,known earlier as Alma Ata) on 25 May. With Kazakhastan too the framework of relations had been established with President Nazarbaev's trip to India inFebruary 1992. The talks in Almaty again revealed a propinquity of approach towards secularism and equality between various communities in Kazakhstan.There was an equally firm resolve in Almaty to keep the region free from extremist ideologies, terrorism and narcotics.Rao pushed to the extent possible economic relations with Almaty but was less enthusiastic about the Kazakh leader's proposal on security. Nazarbaev wasproposing a conference for interaction on confidence-building measures in Asia. Rao was believed to have pointed out that it was necessary to hammer outconcrete proposals, taking into account the difficulties and reservations of many countries before finally making a formal move on it. India did not wantsuch a conference to get bogged down in bilateral contentious issues.9Followed the Indo-Kazakh joint commission to identify areas of cooperation in New Delhi in July 1993. From Kazakhstan came the Deputy Prime Minister andMinister for Science and Technology, G.A. Abulsyitoy. He invited India to join the international company that was being established to utilize Baikanourcosmodrome. He was of the view that joining the proposed company world enable India to set up its own rocket-launching pad in Baikanour. Kazakhstan, hesaid, had opened up for the Indian industry such opportunities as food processing, extraction and processing of petroleum and construction materials forinvestment and joint ventures. A large number of students from Kazakhstan would study in technical institutes in India. India would also establish an Indo-Kazakhtechnical college in Almaty."10Kazakhstan also desired a long-term defence agreement with India on training of soldiers and servicing and maintenance of aircraft, in return offering tomeet some of India's requirements of spare parts. The Kazakhstan Defence98Minister, Gen. Sargadat Kochakmetovich Nurnagmbetov, came in early February 1995 heading a high-level defence delegation.11 No information was, however,available on what was agreed. Some training programme was on, but whether on the scale Almaty envisaged was not clear.Nazarbaev paid a second visit to India on 9 December 1996. Prime Minister H.D. Deve Gowda and President Nazarbaev in their talks expressed concern overthe developments in Afghanistan and were agreed that they posed a threat to "peace and stability in the area". They rejected external intervention anddesired respect for the soveregnty and territorial integrity of Afghanistan.12 The Indian and Kazakh positions on Afghanistan were stated to be similar.Nazarbagv's visit also became the occasion for India to explore opportunities for prospecting oil and natural gas and construction of pipelines in two areasaround the Caspian Sea in Kazakhstan. According to Secretary Raghunath, "The hydrocarbon sector is an important sector. We have made bid for two largeareas around the Caspian sea in Kazakhastan's north-west. The ONGC could also get involved in the pipeline construction". The reserves in the region wereexpected to become a major source of world energy in the twenty-first century.India was also hoping to increase the trade flow through greater use of the rail-sea route from Central Asia to India via Iran. Turkmenistan and Iran hadbuilt a 140 kilometre track unifying the railway systems of the former Soviet republics and Iran, thus providing all of them with access to the warm watersof the Persian Gulf.Subsequently, India and Kazakhstan also signed a tax reform agreement avoiding double taxation, and providing for lower rates of taxation in the case ofdividends, interest, royalties and fees for technical services provided by Indian companies and institutions to Kazakhstan. This agreement was intendedto provide a fresh impetus to the flow of investments, technology, trade and services. It also provided for mutual information to prevent fraud or evasionof taxes and mutual assistance in tax collection.13Coinciding with Nazarbaev's three-day visit, India's efforts for greater access to Central Asia received a useful push with Almaty seeking a trilateralarrangement with Iran and Turkmenistan for improved multi-nodal surface communication. In the talks during the Kazakh leader's visit, both sides underlinedthe need for improved communication between the two countries to realize the full potential of their mutual relations and for regular consultations on"leading" issues such as Afghanistan, towards their shared objectives of building a climate of peace and cooperation in the region. In their joint pressstatement, New Delhi and Almaty pledged to cooperate actively to preserve their state structures against separatism and different forms of terrorism andextremism.1499UZBEKISTANRelations were somewhat slower to develop with Uzbekistan, Uzbek President Islam Karimov had visited India in 1991 when Uzbekistan was still a part of theSoviet Union and he himself was the First Secretary of the Uzbekistan Communist Party. Relations with the independent state of Uzbekistan began pickingup with Prime Minister Nazrasimha Rao's visit to Uzbekistan and Kazakhstan in May 1993.Rao was in Tashknt, Uzbekistan's capital on 23-24 May. The quality of Indo-Uzbek understanding was evident from their announced decision to jointly fightreligious fundamentalism and international terrorism, to further strengthen their ancient relations and to extend full understanding and support for eachother.The treaty on the principles of inter-state relations and cooperation, signed by Prime Minister Rao and President Karimov, provided that the two countrieswould cooperate in the fight against international crime, terrorism in all its forms, and illegal international trade in narcotics and arms. They condemnedall forms of hatred, violence, fundamentalism and religious extremism.India agreed to open a line of credit for Uzbekistan up to $10 million for importing Indian capital and other goods. It carried a 7 per cent interest rateand a repayment period of eight years. The two countries extended the most-favoured-nation status to each other in trade and commerce.Replying to a question on Kashmir at a joint press conference Karimov said, "Uzbekistan stands for the unity and integrity of India. We are for peace andunity in all regions. Our position on Kashmir is clear. If somebody has raised an issue, we believe the two parties should settle the problem through peacefulnegotiations. I have told Mr Rao during our discussions that we stand by India's sovereignty and territorial integrity."It was quite clear that with the kind of challenges that the Cental Asian states were facing from militants from within and from without, the leaders ofthese states found themselves ideologically much closer to India. Rao also said at their joint press conference, "We agree fully that cross-border andstate-sponsored terrorism is not only a direct interference in the internal affairs but a threat to their sovereignty and territorial integrity as well... The region must be freed of extremist ideologies, training camps for militants, illegal infiltration of arms, terrorism and narcotics ... I must expressmy personal satisfaction with the remarkable commonality of perception that emerged in my discussions with President Karimov on these issues." Rao promisedall possible assistance to Uzbekistan for a successful culmination of the transition process. "The stability and prosperity of Uzbekistan is of crucialimportance to that of Central Asia as a whole-. Our stake in it is clear as our commitment to our relations with Central Asia and especially Uzbekistanis unambiguous", he said.15Soon afterwards came a visit by the Deputy Prime Minister T.M. Miryakubov, who was also the country's External Affairs Minister, for a meeting100of the Indo-Uzbek Joint Commission. The two sides signed five agreements to promote cooperation in the economic and commercial fields, and science and technology.The commission also deliberated upon better utilization of $2 million worth of Indian credit for setting up of joint ventures and transfer of technology.Both President Shankar Dayal Sharma and Prime Minister Rao in their talks with Miryakubov referred to the commonality of views on most international issuesand on the abiding commitment of the two countries to democracy, secularism and economic liberalization. Miryakubov underlined the importance that PresidentKarimov attached to the development of economic, cultural and other relations with India, as also increased cooperation in science and technology. Thejoint commission also endorsed the proposal to set up an Indo-Uzbek technology centre in Tashkent for promoting cooperation in science and technology.16Relations were given a further boost when President Karimov visited India a second time in early January 1994 and along with Prime Minister Rao visualizeda bright future for political and economic cooperation between India and the Central Asian states based on the common commitment to democracy, secularismand attainment of social justice. The two leaders reiterated their resolve to fight terrorism and religious fundamentalism. Rao was reported to have explainedto the Uzbek leader India's determination to counter cross-border terrorism so that people would live in peace and devote their energies to promoting theirwell-being. Karimov said at a press conference that his government and people had strongly resisted the threat from the south, that is Tajikistan, to enableUzbekistan to march along the road to development. The situation in Tajikistan was the result of "aggression" by fundamentalist forces, he said. On theKashmir issue he believed in non-interference in the internal affairs of other states and favoured the solution of any problem through negotiations.The Uzbek President invited Indian businessmen to set up joint ventures in his country, which was rich in natural resources, and exploit its trade potentialsince it was heavily dependent on the import of consumer goods. His country was passing through a period of transition from a totalitarian society to afree market economy and looked forward to learning from India's experiences in the economic field, he said.17Coinciding with the visit, India and Uzbekistan signed on 5 January six agreements on trade, joint ventures, science and technology, transport and transitand telecommunications.18TURKMENISTANRelations with Turkmenistan carried a special implication for boosting relations with the rest of Central Asia, as we shall see later. The Turkmen PresidentS.A. Niyazov was also an early starter, visiting India on 18-20 April 1992. He was surprised at how much the Indian officials knew about the101situation in Turkmenistan and how well-prepared the Indian side was for negotiations—there was no need for him to explain anything. Six agreements weresigned between the two countries, and Niyazov said, in reply to a newsperson's question, that it was not important whether the trade was in rupee or inconvertible currency. What was important was that the two countries had started an era of trade cooperation. The agreement on trade and economic cooperationwould be the basis for future trade cooperation.More significantly, the Turkmen President expressed his faith in non-alignment and in the development of bilateral relations among Central Asian states.Turkmenistan had a 760 kilometre border with Afghanistan, Niyazov said, and they were watching the situation there. His country supported the efforts tobring about a negotiated settlement. The Turkmen President and Prime Minister Rao signed a declaration of principles and the direction of cooperation.Agreements were also signed in the areas of culture, arts, education, science, tourism, and mass media.19A significant step in the development of Indo-Turkmen relations came three years later when in a unique move India, Iran and Turkmenistan concluded a memorandumof understanding that would give access to Indian goods to the Central Asian Republics through the Iranian land route. Signed in New Delhi on 18 April1995 by the External Affairs Ministers of the three countries, Pranab Mukherjee, Ali Akbar Velayati and Boris Shekhmuradov, the MoU provided for internationalcarriage of goods by road and rail vehicles registered in any of the three countries. The MoU also authorized the carriers of the three countries to establishoffices and appoint agencies in these territories. The three foreign ministers also agreed on India's suggestion to set up a trilateral commission to supervisethe implementation of the MoU and to expand cooperation in this sphere.20Shekhmuradov, who was also the Deputy Prime Minister, told his Indian audience that Pakistan had agreed to the extension to India of the gas pipeline thatwas proposed to be built from Turkmenistan to Pakistan. His country, according to the agreement signed in March during the summit meeting of the EconomicCooperation Organization in Islamabad, would supply gas to Sui in Baluchistan, and Pakistan had indicated that it had no objection if India joified theproject.21Prime Minister Rao made a second trip to Central Asia in September 1995, signifying its importance in India's scheme of things, this time visiting Turkmenistanand Kyrgyzstan. On the eve of his three-day visit beginning 19 September, Turkmenistan's Foreign Minister Boris Shekhmuradov underlined the importanceof relations with India by pointing out that India was the first country that President Niyazov visited soon after the independence of Turkmenistan.102Ruling out any anti-India Islamic axis he said, "For us it is out of the question." He termed the Kashmir question as a bilateral issue between India andPakistan that should be resolved within the framework of the Simla pact. He supported India's permanent membership of a reformed Security Council.Pointing out that Turkmenistan was the fourth largest producer and exporter of natural gas in the world after Russia, USA and Canada with some nine billiontonnes of deposits, he said, "We would like Indian business to help us develop our chemical industry." The two countries already had a legal frameworkin place for intensive trade and economic cooperation and some remaining documents would be signed during Rao's visit to his country, he said.The signing of the tripartite understanding between India, Iran and Turkmenistan would, in his view, transform Turkmenistan into a spring-board for India'straditional markets in Russia and other CIS countries by providing new and much shorter alternative trade route via the Iranian port of Bandar Abbas. Healso wanted India's help in training Turkmen military cadres, including pilots for the air force.22Rao's visit to Turkmenistan resulted in three agreements signed in Ashkhabad on 19 September. One agreement envisaged setting up of an intergovernmentalcommission on trade and economy. Two protocols were signed to continue promotion of cooperation in culture, arts, education, sports and mass media. Regularconsultations at ministerial and official levels on international and regional issues of mutual interest were proposed, as also the training of Turkmendiplomats in India.In his deliberations with Turkmen leaders, Rao expressed serious concern over the growth of terrorism in various parts of Asia and the fact of one countryfinancing and encouraging terrorist acts against another. Violence solved no problems and no political or social goal could justify the use of violence,particularly against innocent people, he said.Rao received a unique gift from President Niyazov—an Akhaltekin horse, which is the world's finest breed of horses.23KYRGYZSTANAmongst the most democratic—relatively speaking—and also among the smallest Central Asian republics, Kyrgyzstan is remote and poor in resources. Its onlyassets are gold (seventh largest reserves in the world) and a tourist potential if its beauty spots developed and peace could be ensured in the region.It also possesses a few important minerals. Its ethnic composition is mixed with nearly half a milion Uzbeks alongwith small numbers of other ethnic groups.Bordered by Tajikistan, Uzbekistan, Kazakhstan and China (in 1994 nearly a quarter of its trade was with China), Kyrgyzstan felt strongly the tremors ofthe conflict in Tajikistan.103Like other Central Asian states, the Kyrgyzstan leadership under Askar Akaev was determined to retain its secular character. It shared India's oppositionto extremism and terrorism sponsored from outside. It also expected economic assistance from India as it did from leading international institutions (infactthe republic was given and/or promised substantial assistance by the Western consortia and the Asian Development Bank).President Akaev, like most of his counterparts in Central Asia, was an early visitor in to India (March 1992). Six agreements were signed during his stayrelated to economic cooperation, cooperation in agriculture and science and technology, and the establishment of diplomatic relations.Akaev emphatically rejected in a news conference any suggestion that the five Central Asian' republics would eventually become an Islamic bloc. The peopleof Kyrgyzstan were very different in nature, he said, and they would never join such a grouping. His government, he stressed, was trying to build a genuinelysecular country and religion was merely an instrument to develop moral values. He envisioned a policy of permanent neutrality for his country. As far asIndia-Pakistan problems were concerned, he hoped that India and its neighbours would follow a policy of peace and resolve their differences through negotiations.24India had agreed to train Kyrgyz students in the field of agriculture, banking, management and foreign service. They also agreed to undertake joint venturesin mining. Kyrgyzstan indicated its willingness to export uranium to India under IAEA safeguards.25As noted earlier, Prime Minister Rao's second visit to Central Asia in October 1995 included Turkmenistan and Kyrgyzstan. During visit New Delhi and Bishkeksigned three agreements to give a "fresh impetus" to deepen Indo-Kyrgyz relations. The first agreement continued the programme of exchanges in the spheresof culture, arts, education, mass media, and sports for another three years. The second agreement related to cooperation in science and technology andthe third protocal aimed at promoting tourism between the two.Kyrgyzstan showed keen interest in opening up a surface transport route from India to the Central Asian republics and expressed a desire to join the trilateralagreement between India, Iran and Turkmenistan for opening up a transit route from Bombay to Bandar Abbas and onwards by road to the Central Asian region.Bishkek was also keen to acquire consumer goods, medicines and food products from India. India presented medicines worth $500,000 to Kyrgyzstan on humanitariangrounds.Prime Minister Rao said in Bishkek that both countries shared common concerns and faced common challenges. Both valued principles of secularism, toleranceand non-discrimination. Peace and harmony were vital for the survival of "our diverse ethnic populations following different religions", he said. BothNew Delhi and Bishkek regarded sectarian violence, religious intolerance and104extremism, terrorism and organized crime as enemies to be faced with determination.26One concrete result of the efforts to develop a meaningful relationship was the agreement announced by the two countries in New Delhi on 17 October 1995to set up a joint venture in the petroleum sector. Engineers India Limited (EIL) was nominated to follow up the proposal and finalize the details. Thiswas decided by the Indo-Kyrgyz Joint Commission. India offered technical expertise, trained manpower and modern technology to assist in all petroleum activitiescovering upstream and downstream sectors in Kyrgistan. The two countries agreed to explore the scope for mutual cooperation in exploration and productionof oil and natural gas in Kyrgyzstan.27 India had earlier announced a credit of $5 million for the modernization of Kyrgyzstan's agro-industries duringthe visit of its Vice-Prime Minister, Iozdan in April 1994. It was becoming easier also for Trade with Central Asia with the opening of the land routefrom Iran. India had signed an agrement during Narasimha Rao's visit to Iran for the development of a railroad link from Bander Abbas to the borders ofthe Central Asian Republics.TAJIKISTANWithin a year of Tajikistan's independence Prime Minister, Abdumalik Abudullojanov, visited India. Tajikistan was in a very peculier situation. Tucked betweenAfghanistan, Uzbekistan and China, the poorest of the Central Asian Republics with a population of some five million, it was racked by civil war and Islamicmilitancy fuelled by a spillover from Afghanistan. With very considerable military assistance from Russia and Uzbekistan, an old-guard communist leaderImomali Rahmonov barely managed to hold back the militants and recapture the capital Dushanbe. Nearly 70 per cent of the 600,00 ton cotton crop could notbe harvested in 1992-93, resulting in a loss of some $200 million in foreign exchange. The aluminium production went down by one-third, causing an estimatedloss of $170 million.28The Tajik leader expressed great concern about the resurgence of Islamic fundamentalism, not only in his country but also in neighbouring Uzbekistan, Turkmenistanand Kazakhstan. The other members of the Commonwealth of Independent States (CIS), he said, had agreed to send 2,500 of their troops to reinforce the Russianborder guards (an estimated 25,000) on the Tajikistan-Afghanistan border which had come alive as a result of the crossing of Amu Darya" river by thousandsof refugees fleeing the civil war in Afghanistan. He condemned the pernicious philosoply of "religious cleansing" adopted by the Islamic political rivalsand he saw more conflict ahead unless external support to fundamentalist elements stopped. He accused Afghan militants of training Tajik mercenaries.29105The Tajik and Indian Prime Ministers pledged to fight jointly the forces of religious fanaticism, state-sponsored terrorism and drug trafficking and toforge bonds of friendship and economic cooperation in the interests of peace and stability in the region. They signed six agreements to give substanceto their cooperation. They discussed at length the problem created by religious extremism and state-sponsored terrorism to destabilize governments, a clearreference to Pakistan and the Islamic militants in Afghanistan.Rao announced a line of credit of $5 million to promote economic cooperation with Tajikistan as well as a gift of 8.5 tonnes of medicines and blankets tohelp alleviate the current shortages of food and relief supplies. He also promised to give whatever assistance the beleaguered republic needed, includingmaking available Indian experts and also accepting Tajik trainees in India. Rao also announced India's decision to open a mission in Dushanbe in the nearfuture.30Tajikistan was offering markets for tea, coffee, leather products, cosmetics, household appliances, pharmaceuticals, etc. from India. It also identifiedareas of cooperation with India like cotton spinning mills, leather tanneries, rural telephone exchanges, and the like. Unfortunately, the unsettled conditionsin Tajikistan made it difficult to give a practical shape to these proposals.With a tenuous hold on the capital and parts of Tajikistan, President Imomali Rahmonov came to India in December 1994. During his visit, six agreementswere concluded on 12 December between the two countries, and a declaration outlining the future course of relations between the two was initialled. Theagreements covered economic cooperation, bilateral investment protection, science and technology, environmental protection and health care, and cooperationin the cultural sphere. Rao and Rahmonov emphasized the need for combating the growth of terrorism in the region while reiterating the desire to work togetherfor the enhancement of bilateral ties.31OVERVIEWWe have seen in the foregoing pages how India has been making a fairly strong pitch to develop relations with the newly independent Central Asian states.There has been a steady effort to establish durable trade links with these countries. The economic picture can be seen from the trade figures given inTable 1.table with 4 columns and 6 rowsCountryExportImportTotal?Kazakhstan2986.72657.05643.7?Kyrghyzstan13.62.916.4?Tajikistan1631.81115.12746.9?Turkmenistan309.0919.91228.9?Uzbekistan2303.83535.95857.7table endSource: Ministry of Commerce, Annual Report, 1995-96.Trade was picking up with Kazakhstan, Uzbekistan and, surprisingly despite unsettled conditions, Tajikistan. With, Uzbekistan and Turkmenistan India hadan adverse trade balance.However, notwithstanding the efforts that were being made, India's relations with Central Asia were still somewhat marginal. The good intentions from bothsides far outweighed the actual results. India was a solid friend, as the Central Asian states knew well, and within its means was being as helpful asthe system would allow, but they needed massive investments, particularly in infrastructure—roads, bridges, railways, pipelines, storages and so on—butIndia's capacity to invest was limited. The Indian system did not allow for too many sacrifices to be made in the interests of long-term foreign policygoals. However, it should be stated in conclusion that larger investments in the region, even at some cost, would pay handsome dividends subsequently,in economic terms certainly, but equally important, in the political goodwill that India could earn over the years of the Central Asian states. The geopoliticalimportance of the area should be understood better in the country.NOTES1. See Geoffrey Wheeler, The Modern History of Soviet Central Asia, Weidenfeld and Nrcolson, London, 1964, for local ethnic nationalism. Economically, too,the region was fully integrated with Moscow and these countries, despite possessing many natural resources, came to have a mono-economy, dependent on thesupply of one commodity to the other Soviet parts and for the supply of most goods on other parts of the Soviet Union.2. K. Warikoo (ed.), Central Asia: Emerging New World Order, Har Anand Publications, New Delhi, 1995.3. For a discussion of the politico-social problems and the continuing role of Russia from a Western point of view see Martha Brill Olcott, Central Asia'sNezu States, United States Institute of Peace Studies Press, Washington, 1996.4. For a more detailed discussion see Alvin Rubinstein and Oles Smolansky (eds.), Regional Power Rivalries in the New Eurasia: Russia, Turkey and Iran,M.E. Sharpe, Armonk, New Delhi, 1996.5. Economic Times, 7 February 1993.1076. Asian Recorder, 1 -7 April 1992.7. Times of India, 23 February 19928. Hindustan Times, 24 and 25 May 1993.9. Ibid., 27 May 1993.10. Times of India, 24 July 1993.11. Hindustan Times, 3 February 1995.12. The Hindu, 10 December 1996.13. Ibid.14. Indian Express, 11 December 1996.15. Hindustan Times, 24 and 25 May 1993.16. The Statesmen, 30 July 1993.17. Asian Recorder, 29 January-4 February 1994, pp. 23714-15.18. Hindustan Times, 6 January 1994.19. Times of India, 21 April 1992.20. Hindustan Times, 19 April 1995.21. Times of India, 20 April 1995.22. Asian Recorder, 8-14 October 1995, p. 25131-2.23. Ibid., 15-21 October 1995, p'.24148.24. Ibid., 22-28 April 1992, p. 22260.25. Ibid.26. Ibid., 15-21 October 1995, pp. 25141-2.27. Ibid., 12-18 November 1995, p. 25203.28. Steve Levine in Financial Times, reproduced in Times of India, 24 February 1993.29. Hindustan Times, 17 February 1993.30. The Hindu, 16 February 1993.31. Hindustan-Times, 13 December 1994.108Chapter 5 India and South AsiaI INDIA AND PAKISTANIndia-Pakistan relations during the period under study remained a sad tale of high tension, provocative statements, external intervention, mutual denunciationsand lowering of their own prestige in international fora.* This author had examined in his earlier volume on foreign policy the background, the issuesand the developments between 1966 and 1988. As pointed out earlier, Indo-Pak relations were doomed for a long time almost in the act of the creation ofthe two states in 1947—their philosophies of state divergent, their world outlook poles apart, their goals dissimilar, their policies of a widely differentcharacter.1There is no need to cover the ground already sufficiently laid out in the earlier volume. But one crucial point needs reiteration. It is misleading to talkof Pakistan as a small country flanked by a colossus like India. If this were so, the relationship would not have been so troubled. The fact of the matterwas that Pakistan was a middle-ranking country, a country with over a hundred million people, among the more populous countries of the world, with a militarymachine that could be the envy of many in the "third world". Both USA and China had equipped its army with very modern weaponry. It spent more than halfof its budget on the army and had in addition been the recipient of liberal financial assistance, not only from the U.S. and China, but also from SaudiArabia, and to a smaller extent from Libya.Despite all the disclaimers, Pakistan has striven for parity with India and the two countries have yet to find a balance in their relationship. Pakistangives the impression that life begins and ends with Kashmir. For India, Kashmir is a symptom of the malady, not the malady itself. In any case the leveland quality of their relationship continued to deteriorate in the last five years, Pakistan increasingly assertive about the anti-Indian struggle in Kashmir,and India increasingly assertive over Pakistan's involvement in insurgency in different* This was written before India's nuclear tests.109parts of India, primarily Punjab and Kashmir, and subsequently particularly Kashmir. Pakistan upped the ante in regard to the struggle of the militantsin Kashmir and the international campaign against Indian security forces' "atrocities" and "brutalities", and India in regard to Pakistan's fanning ofterrorism in Kashmir and other parts of India.By the beginning of 1990 Indian democracy had ushered in a new National Front government headed by V.P. Singh and supported from outside both by the leftparties and the Bharatiya Janata Party (BJP). The period coincided with another sharp decline in India-Pakistan relations. V.P. Singh accused Pakistanof increasing interference in India's internal affairs and assistance to the insurgents in Punjab and Kashmir and warned his countrymen to be preparedfor a possible armed conflict with that country.Symbolic of the state of relations was the exchange of thinly - veiled threats when the Pakistani Foreign Minister Sahibzada Yaqub Khan visited India inlate January 1990, shortly after the change of government in New Delhi. External Affairs Minister at the time, I.K. Gujral told a Parliamentary ConsultativeCommittee on 27 January of his "distress" and "sadness" at the kind of threatening message delivered by the Pakistani Foreign Minister couched in undiplomaticlanguage when he spoke about the "dark clouds hanging over Jammu and Kashmir" and the perilous circumstances in which the people of Jammu and Kashmir were"entrapped". Yaqub Khan repeated his message four times during the three meetings that he had with his Indian counterpart, one in the presence of the PrimeMinister. Gujral also told the Committee that some unemployed Afghan mujahideens were being utilized by the authorities in Pak-occupied Kashmir to providetraining to militants. He also claimed that India's stand in the discussions was "firm" and "unequivocal" and that it was conveyed to the Pakistani officialin "unmistakable language" that India would not allow Jammu and Kashmir to secede from the Indian union.2Pakistan's increasingly tough posture over the next three-four years was rooted in three factors. One was the domestic power struggle in which each sideaccused the other of pursuing a weak-kneed policy towards India and Kashmir and had consequently to assume uncompromising postures to buttress the argumentagainst the opponent. Equally important was the rising stake in the turmoil and ferment in Kashmir, a major reason for which was the training, the armsand the sanctuary provided by Islamabad and its agencies to the Kashmiri militants.Thirdly, the trouble in Kashmir was aggravated by India's own mistakes of letting the problems fester and not attending to them in time. The political wheelingand dealing alienated a great many Kashmiris, who felt that the genuine process of democracy available to most parts in India was being denied to them.One of its saddest aspects were the communal passions that were being raised in a hitherto very tolerant and secular society that led to the large-scale110exodus of Kashmiri Pandits from the Valley to Jammu and elsewhere in pathetic conditions, their homes destroyed or occupied and their properties looted.Not only Kashmiri Pandits but many secular muslims who were opposed to the militants had also to run to other parts of India for dear life. The cult ofthe gun began to rule the Valley. The continual slide in Indo-Pak relations could be well-understood in this context.Some third countries were disturbed and believed that a flash-point might be approaching. Washington, as has been noted earlier, sent John Gates to thetwo countries to urge restraint and lowering of the tensions. However, war was not a child's play and both countries knew what the consequences could beof another such exercise in mutual destruction. Whenever there was a dangerously high rise in animosities, efforts were made to douse the tensions.Amidst this tense environment the Foreign Secretaries of the two countries had their first round of talks in Islamabad on 18 July 1990, breaking the icebut failing to make any substantial progress. India suggested a number of confidence-building measures, but Pakistan's contention was that the root causeof the current tension was the Kashmir issue and that the two countries should discuss how best to resolve it in accordance with the UN resolutions andthe Simla Agreement. Indian official sources claimed that the Indian Foreign Secretary had handed over to his Pakistani counterpart "massive, concreteand irrefutable evidence" of Pakistan's active involvement in Punjab and Kashmir.Despite the stalemate, the clouds of conflict were dispersed. The two Foreign Secretaries confirmed that neither side wanted a military confrontation anddescribed their first round of discussions as useful.3 Pakistan's Prime Minister Benazir Bhutto contended that Pakistan desired to resolve the Kashmirproblem peacefully through negotiations in accordance with international law.4 The net outcome of the dialogue was the reduction of tensions and reassuranceto the people of the two countries that war was not around the corner.But that was about all. With Pakistan determined to keep the pot boiling in Kashmir and India equally determined to retain its control, sources of tensionwere inbuilt. Prime Minister V.P. Singh blamed Pakistan for the worsening relations. In an interview with the BBC World Service he said, "Despite Pakistan'sclear hand in Punjab and Kashmir, we have not done anything which is unfriendly." India had offered confidence-building measures and exercised restraintand not "sent our troops to the trenches", he said, but Pakistan had not responded.5Benazir Bhutto had earlier been making the rounds of Islamic countries to mobilize support on the Kashmir issue. In May 1990 she went to Iran, Turkey, Syria,Sudan, North Yemen, Egypt, Libya and Tunisia, and the next month to Iraq, Kuwait, Morocco, Algeria and Bahrain. Pakistani officials described the visitsas "highly rewarding" and claimed that the Muslim leaders had "complete understanding" of Pakistan's stand on Kashmir. Indian sources, on the other111hand, believed that at many places she was advised to avoid any military confrontation and to find a solution through peaceful means.6 India too steppedup its lobbying with the Islamic countries through mutual visits at governmental level.The Foreign Secretaries manfully continued their dialogue, or at least the attempt to keep sustaining the dialogue, not just in this stern atmosphere butalso while political developments in both countries had been moving towards a situation of political uncertainty. In Pakistan, just on the eve of the secondround of talks, the Bhutto government was dismissed by President Ghulam Ishaq Khan and elections were announced for central and provincial assemblies.India expressed surprise at the dismissal of Benazir Bhutto, especially since her government had not lost its majority in the National Assembly, but affirmedthat it would continue to build a relationship of cooperation with Pakistan, despite "severe provocations", including its support to terrorism and subversionin India.7It was in the background of this political uncertainty in Pakistan that the two Foreign Secretaries met in the second round of talks in Delhi on 10 August1990. India made concrete proposals to Pakistan aimed at improvement of relations and the Pakistan Foreign Secretary promised to study them with the utmostconsideration. India expected statements from the leadership in Pakistan dissociating itself from the terrorist and subversive activities in Punjab andKashmir. The Pakistan Foreign Secretary was also told by Prime Minister V.P. Singh, when the former called on him, that the new leadership in Pakistanshould keep in view the long-term interests of the people of the two neighbouring countries and give up moves that were perceived to be unfriendly.8 ThePakistan official said at the end of the talks that he would have felt "more satisfied" had the Kashmir situation and the deployment of troops on bothsides of the border been discussed. "We shall have to find a way", he said, "to determine the correct force-levels at the border consistent with the defenceneeds of either country."9All this was, so to say, on the surface. According to one report, denied subsequently by the Foreign Office, it was one of the most abusive diplomatic meets.Both sides used very harsh language, the Pakistani side starting with a long harangue on India's abuse of human rights in Kashmir and its designs on Pakistan,and the Indian side sharply rebuking the Pakistani side for its proxy war in India.10 The truth perhaps was that it was not an abusive but a fairly sharply- worded dialogue that was symptomatic of their deteriorating relations.It was not surprising that Pakistan took the opportunity of the general debate in the UN General Assembly to make strident references to the Kashmir issue11and it became a hardy annual since then, as did India's response through counter-criticism. The issue was raised by Pakistan in virtually every UN forum,to be rebutted by India each time. Pakistan claimed that the Simla Agreement did112not inhibit it from raising the issue in international fora. India in its turn contended that Pakistan could not eat its cake and still have it. The bilateralapproach was vitiated if the issue was constantly brought up at international levels accompanied by vitupertive denunciation of India.In this deteriorating atmosphere it was also not surprising that the third round of talks scheduled for September were put off indefinitely. Domestic politicsin Pakistan were embroiled in an acrimonious election campaign in which the India card was sought to be used against opponents at the hustings. Each sidewas carrying on a bitter campaign and India became an easy whipping boy—both Nawaz Sharif and Benazir Bhutto accusing each other of being soft towards,or incompetent in dealing with, India. Nawaz Sharif obtained a majority in the elections, which Bhutto described as having been rigged. An early interviewby Prime Minister Nawaz Sharif with the Dubai-based Gulf News projected a reasonable approach, with Nawaz Sharif stating that he intended to meet PrimeMinister V.P. Singh at the earliest to resolve the Kashmir issue and that he was never against a dialogue. But then followed tough statements both by thePresident and the new Prime Minister. Ghulam Ishaq Khan in his address to the newly elected National Assembly described Kashmir as "our lifeline"12 andNawaz Sharif ruled out any compromise and reiterated continued support to the struggle in Kashmir.13Meanwhile other developments were noticeably altering the international landscape and the subcontinental scenario. The conflict in the Gulf, Iraq's invasionof Kuwait and the hitherto inconceivable partnership between the Western powers and a host of Arab countries, even including Syria, on the battlefieldsof the Arabian desert, the sidelining of Moscow in the conflict and the beginning of the end of the postwar international system were bound to impingeon the regional landscape.Coincidentally, it was India's turn now to go through a period of political instability. Both presented certain opportunities to Pakistan. In response tothe development in the Gulf Islamabad sent troops to Saudi Arabia in a gesture that not only cemented the traditional relationship between the two countriesbut also gave promise of bridging the gap with Washington which, under the Bush administration, had given evidence of increasing uneasiness about Pakistan'squest for nuclear weapon capability and support to terrorism and insurgency in India. As for the second development, it would not be unreasonable to assumethat Pakistan might have hoped to make use of the opportunities that might be available in Kashmir as a consequence of the political vacuum in India. Howmuch of this was a factor in Islamabad's policy would be known only when Pakistan's governmental archives become available to scholars.The Mandal-Masjid-Temple controversial developments led to the collapse of the V.P. Singh government and the induction of a "minority" (under the circumstances,it appeared to be a euphemism) government headed by113Chandrasekhar. Its first brush with Pakistan was at the SAARC Foreign Ministers' meet at Dhaka in November end. India would have liked to see Afghanistanin SAARC but Islamabad would have nothing to do with it.14 Pakistan wanted to change the format and procedures adopted in the SAARC Charter to allow discussionof bilateral issues that troubled relations between two member countries. It did not require any superior intelligence to understand that this way Pakistanhoped to raise the Kashmir issue at SAARC. The ploy did not work, but Chandrasekhar met Nawaz Sharif at the SAARC Summit at Male and tried to establisha personal equation with him. Both sides expressed satisfaction with the talks.15 However, it was still an untested hypothesis that personal equationscould pave the way for solving contentious issues without making very substantial concessions for which neither side was ready.The Chandrasekhar-Nawaz Sharif dialogue led to the third round of Foreign Secretary-level talks in Islamabad in. Both sides stressed the need for normalrelations, but on substantive issues there was nothing doing. President Ishaq Khan lectured about the Kashmir issue and communal situation in India whilethe Indian Foreign Secretary held that the core issue was Pakistan's assistance to subversion and terrorism in Jammu and Kashmir in clear violation ofthe Simla Agreement.While Pakistan's effort was to draw the international community into the Kashmir dispute by hammering on the theme of human rights abuses and the struggleof the Kashmiri people (which to Pakistan meant only the right to become a part of Pakistan), one problem that it faced was the increasing internationalawareness of its involvement in the insurgency in India. The Americans had their independent sources of information and were acknowledging this involvement.The U.S., as noted in an earlier chapter, was cautioning Pakistan against such involvement.The British government too was taking a more serious view of the encouragement to violence and terror in Kashmir. The Parliamentary Undersecretary of Statefor Foreign and Commonwealth Affairs, Mark Lennox-Boyd said in a statement in the House of Commons that Britain condemned militant violence in Jammu andKashmir. It was for the first time that London voiced support for India's efforts to deal with the terrorist threat. Britain had urged Pakistan to avoidany steps that might "appear to confirm that militants in the Valley received armed support from Pakistan", Lennox-Boyd said. Britain supported the Indianposition that the Simla accord superseded earlier Indo-Pakistan agreements on Kashmir.16In the wake of a spate of kidnappings of foreigners and Indians, the European Parliament also felt obliged to express concern over violence and terrorismin Kashmir. Its statement came in the aftermath of the abduction of two Swedish engineers, six Israeli tourists and a Dutch tourist, among others. Thestrongly worded statement in July 1991 called for the immediate release of all114hostages held by the militants and appealed to India and Pakistan to intensify their dialogue over Kashmir in a spirit of constructive compromise and toensure respect for human rights.17As against the growing concern in the West about externally supported terrorism in Kashmir, the Organization of Islamic Conference (OIC), at Pakistan'sprodding, talked about self-determination in Kashmir and called upon India to allow international human rights organizations as well as an OIC delegationto visit Kashmir. India promptly rejected the OIC proposal to send a three-man fact-finding mission and its attempt to inject itself into the Kashmir dispute.18The situation within the OIC was, however, more complex than the adoption of the resolution would indicate. While Saudi Arabia and Iran actively supportedPakistan on the Kashmir issue, other countries went along with the resolution without necessarily being enthusiastic about it or desirous of being draggedinto the dispute. In any case the OIC was a toothless tiger long on passing resolutions and short on any capacity to intervene anywhere, as revealed inthe Gulf wars and even the Bosnian crisis involving Bosnian Muslims.Pakistan continued to deny its involvement but with decreasing credibility. Meanwhile, two positive developments took place. The two countries exchangedinstruments of the agreement signed on 31 December 1988 undertaking not to attack the nuclear facilities of each other. With this ratification, the agreementtook effect on 28 January 1991.19 Also for the first time, some more substantial agreements took place in the fourth round of talks at the level of ForeignSecretaries in New Delhi on 6-7 April 1991. In a joint statement issued at the end of the talks, India and Pakistan agreed to resume negotiations on theSiachen issue, suspended in 1989, "at an appropriate time". They also decided to take up in July the Wular barrage-Tulbal navigational project which hadlast come up for discussion in 1986. They undertook to hold further discussions on the demarcation of the boundary in the Sir Creek area in the Rann ofKutch in August. Both sides expressed satisfaction at the outcome of the meetings of military experts of the two countries held in New Delhi, 1-4 April,that paved the way for the signing of two agreements on prevention of violation of each other's airspace and advance notification of military exercisesand troop movement.20The continued political instability in India was taking a toll of India-Pakistan relations. Many in India believed that it was encouraging Islamabad totake a bolder line in Kashmir and step up its intervention. Of particular note and concern was Nawaz Sharif's interview to Newsweek that claimed for thepeople of Kashmir the right of self-determination and even the right to invite outside aid as Kuwait did in the Gulf war.21 It was the first time thatsuch a blatant claim was made by a Pakistani head of government.115PAK PROPOSAL ON NUCLEAR ISSUEPakistan was not only taking the initiative in Kashmir, it was also active on other fronts in the international arena. Capitalizing on the internationalcommunity's concern about nuclear proliferation, Pakistan tried to seize the initiative with a new proposal on non-proliferation in South Asia. Speakingat the National Defence College in Rawalpindi, Prime Minister Nawaz Sharif suggested in June 1991 a five-power meet, with USA, Soviet Union, China, Pakistanand India as participants. The objective of the meet would be to ensure a ban on nuclear weapons in South Asia, to be guaranteed by USA, Russia and China.22The alacrity with which Washington took up and endorsed the proposal made many in India wonder about the origin and sponsorship of this proposal. Evenso, on the face of it the proposal appeared reasonable to many governments around the world.India's knee-jerk rejection, and initial failure to put forward alternative proposals, invited considerable criticism at home and abroad. New Delhi appearedto be adopting a policy of saying "No" to every proposal concerning relations with Pakistan. This was in fact a misreading, for India indeed had legitimatereservations about a proposal that militated against its basic principles and ignored its fundamental security requirements. In the first instance, Indiahad all along stood for a comprehensive approach to the nuclear problem, that would contribute to universal nuclear disarmament, wind up the division ofthe world into nuclear - haves and have-nots, and ensure a balance of obligations and rights in the world community.Secondly, the proposal virtually confined itself to India and Pakistan, putting them on a foundation of parity and made no reference to the wider securityconcerns of India. It pretended as if nuclear weapons were non-existent in China and took no account of the realities of the situation in the neighbourhood.The fact of the matter was that there were nuclear weapons all around the neighbourhood of India. There were nuclear weapons in China. There were nuclearweapons in Kazakhstan and Ukraine, in Russia and U.S. nuclear weapons in the Indian Ocean. Israel too was believed to possess some nuclear weapons andnow Pakistan too had acquired the capability. A piecemeal approach confined to India and Pakistan was both unrealistic and impractical and did not addressitself to the security threats faced by India. Parenthetically it may be added that experience elsewhere had placed in doubt the efficacy of supervisoryarrangements against violation of a nuclear ban unless they were as intrusive as they became in Iraq. Such an intrusive mechanism would hardly be acceptableto either India or Pakistan.India's initial simple "no" gave an avoidable propaganda advantage to Pakistan. Subsequently, India did put forward a number of alternative proposals, particularlyin its dialogues with the U.S. Here we are concerned mainly with the story of Indo-Pak relations. With a slight pause the deterioration continued and116so did fears about an Indo-Pak conflict. To reduce the tension, the Pakistan Foreign Secretary, Shahryar Khan, came to India (19-21 August) as a specialenvoy of Prime Minister Nawaz Sharif with a special message from him. The special envoy had detailed discussions with the Indian government leaders andForeign Office executives. This was the first meeting between a Pakistani official and the new Indian Prime Minister, P.V. Narasimha Rao.The fears about war were allayed and Shahryar Khan said that he did not see any "clouds of war". He was encouraged by the response from the Indian PrimeMinister and other leaders to embark upon a new chapter of friendly bilateral relations. The two sides had agreed to the fifth round of talks in Islamabadin September. He maintained that top priority would be given to the Kashmir issue, but he clarified that it was premature to say that India had agreedto negotiate on Kashmir. He realized that normalization of relations could not be achieved overnight but there was need to make a "positive movement forward".23Benazir Bhutto, on the other hand, condemned the Shahryar Khan mission, describing it as a "surrender" to Narasimha Rao and "a betrayal of the Kashmiris".Once again demonstrating how Kashmir was a factor in domestic politics, Bhutto was paying Nawaz Sharif back in his own coin. Sharif had harshly denouncedBhutto in 1989, when she was Prime Minister, for trying out a modus vivendi with late Prime Minister Rajiv Gandhi. Sharif, who was then in opposition,had charged her with selling the Kashmiri cause. Benazir now predicted an Indo-Pak armed conflict by September, and wanted all efforts to be bent towardssaving the country which the Nawaz Sharif government was not capable of doing, she said.24 The danger of war was, however, ruled out by the army chief,General Asif Nawaz Janjua who downplayed the skirmishes in Poonch.25CHANGE IN STRATEGYThe shifts in Pakistan's policy were increasingly noticeable in the next few years, no matter which government came to power. First, Islamabad upped theante both in Kashmir and internationally. Its involvement in insurgency in Kashmir became deeper and it also chose every possible international forum toraise the Kashmir issue and denounce India, hoping thereby to mobilize sufficient international support so as to create the conditions for a general uprisingin Kashmir and/or retreat by India to allow a plebiscite. Pakistan was confident of winning the plebiscite if the options were limited and Pakistan allowedfreedom to whip up sectarian passions in the name of religion—take away these two conditions, then the scenario could became topsy-turvy were).Secondly, Islamabad decided to downplay the Simla Agreement. References to it gradually almost disappeared from Pakistani pronouncements on the issue. Itdecided, on the other hand, to step up insistence on the past UN resolutions.117The UN resolutions had spoken of plebiscite, the Simla Agreement had made no mention of them. Actually the UN resolutions were much more complex than Pakistanipropaganda made it out, but that will be discussed in a subsequent section. To meet any international criticism, Pakistan's leaders, government spokesmen,media commentators and virtually everyone else there took recourse to the same phraseology, that Pakistan was giving moral, political and diplomatic supportto the struggle in Kashmir, a phraseology that would enable them to cover up the extension of arms assistance to the insurgents in KashmirBut war with India was not a part of this strategy. Pakistan's objectives were to be realized without recourse to a full-scale armed conflict, which couldinflict unacceptable damage; in the American coinage a "low-intensity" conflict was far more preferable to a war with incalculable consequences. It isanother matter that for India it was not a "low-intensity" conflict. What Pakistan was waging was a proxy war. As Narasimha Rao said later at a meetingof the National Integration Council, "I would say there is nothing like a foreign hand, it is a whole government, a whole state, involved in creating disturbancesin the two border states."26PRIME MINISTERS' MEETINGSYet the ups and downs in the level of tension in relations between the two was an inevitable consequence of such a situation and necessarily there weremore downs than ups. Subsequently even the pretence of a desire for dialogue was given up unless it was to be on Pakistan's terms, but as yet the needfor dialogue to lower the political temperature between the two countries was not abandoned. The fifth round of Foreign Secretaries-level talks were dulyheld in October 1991, deliberating upon measures to improve relations. Simultaneously talks were held in Rawalpindi between the two sides on the demarcationof land boundary in the Sir Creek area and the delimitation of the maritime boundary. Both sides reported a consensus to align their search for a solutionwith international law and conventions.27Soon after these discussions to pull the relations up, came the collapse of the SAARC Summit scheduled at Colombo. While the issue itself will be consideredin a separate section on SAARC, it may be noted here that Nawaz Sharif made use of the occasion to denounce India and raise the Kashmir issue.28Nevertheless at this time neither side rejected opportunities for keeping the dialogue going so that tensions did not get out of hand. The most positiveevent was the first-ever meeting between Rao and Sharif on 17 October at Harare where they were attending a summit meeting of the non-aligned countries,an hour-long meeting which was described by the Indian Prime Minister as "very good", "very friendly", a get-acquainted meeting that had resulted in abetter understanding of each other's concerns and their decision to continue the118dialogue.29 The Pakistan Prime Minister on his return to Islamabad spelt out their understanding about continuing the dialogue and added that "we are totallycommitted to this procedure."30The two Prime Ministers had two more meetings to improve the climate and move the dialogue forward, one at the SAARC Summit at Colombo and the other atDavos, Switzerland, at the World Economic Forum. At the Davos meeting on 2 February 1992, the two Prime Ministers reiterated their resolve to find a solutionto their outstanding problems through dialogue so that they could divert their energies towards economic development. They discussed the entire gamut ofIndia-Pakistan relations, the situation in the region and the global economic scene. The nitty-gritty of their relations, they told newsmen afterwards,would be discussed by the Foreign Secretaries.31THE THREATENED MARCH AND ITS FALL-OUTYet tensions were simmering—hardly below the surface. Even while these laudable declarations were coming from Davos, the Jammu and Kashmir Liberation Front(JKLF) under Amanullah declared its intention to cross the line of actual control (LAC) and Nawaz Sharif, not to be left behind, called for a country-widestrike to express solidarity with the people of Kashmir. India made it clear that it would not allow any intruders to cross the line and would take allnecessary steps to protect the integrity of the state.32 India stepped up its interaction with other major countries of the world. Foreign Secretary J.N.Dixit met the ambassadors of the U.S., Britain, France, Russia and China, reportedly to urge the permanent members of the UN Security Council to use theirgood offices and ask Pakistan to desist from letting the march take place. The meeting sent a wrong signal and gave the impression, even though deniedsubsequently, that India was seeking international assistance to a development that only concerned Kashmir and India and Pakistan.33Meanwhile, Pakistan came under intense international pressure to prevent the march. It had to declare that it would not allow the crossing of the line,while pledging its support to the Kashmiri separatists. Some seventeen persons were reported to have been killed in the aborted attempt. The march hadto be violently thwarted.The march that the JKLF was trying to steal over rivals for the leadership of the Kashmir militants obliged Islamabad to step up its efforts to internationalizethe Kashmir issue and to harden its stance. Nawaz Sharif threatened that Kashmir would be "liberated" by all possible means and would accede to Pakistansoon and that he would offer shukrana nawafil in the Jama Masjid of Srinagar.34119A particularly ignoble fall-out of the fast deteriorating relationship was in the treatment of diplomats in each other's country. The development wouldhave put to shame those who called themselves members of the international community. It started in May 1992 with the abduction and brutal torture of asenior Indian diplomat, Rajesh Mittal who was detained for six hours and tortured with electric shocks and forced to sign a confession.35 This set a precedentin which diplomats were virtually regarded as hostages, quite contrary to international practice. Pakistan too complained about the harassment of its diplomatsby the Indian Intelligence agencies. Both sides were now exercising strict surveillance of High Commission staffs of the other country. But all said anddone, the Indian diplomats in Pakistan were ostracized to a much greater degree than their counterparts in India. The beating and torture was repeateda second time subsequently. Each time this happened, the relations went into a downward tailspin and it took some time before the bitterness generatedby such incidents could be overcome. In any case no matter who did it, it was a particularly reprehensible international behaviour. The two sides subsequentlyagreed to a code of conduct for treatment of each other's diplomats, but the understanding was honoured more in its breach.The continuing deterioration had reached a stage where even a meeting of the Prime Ministers of the two countries could not find a way out. Narasimha Raoand Nawaz Sharif had a "heart-to-heart" talk at Rio de Janeiro (Brazil) where they were attending the Rio summit on environment. They agreed to reversethe downward graph in their relations but could not find ways of doing so. Rao blamed Sharif for not keeping his word that India would see a visible improvementon the ground as regards Islamabad's interference in India's internal affairs. Sharif alleged Indian interference in Sindh, which was gripped by turmoiland had been handed over to the army, but Rao reportedly described the allegation as "fantastic". Nevertheless, both sides agreed that the Foreign Secretaries'dialogue should continue.36TEMPORARY RETURN TO SIMLA ACCORDHowever, there was a sudden tactical change in Pakistan's approach. At the sixth round of talks, the Pakistan Foreign Secretary indicated Islamabad's willingnessto settle the Kashmir issue within the ambit of the Simla accord. On his arrival in New Delhi for five days of talks, he said, "we are fully consciousthat we have to depend upon the Simla Agreement for this core issue in bilateral relation." To which the Indian Foreign Secretary's response was, "We shalldiscuss Kashmir within the framework of the Simla Agreement without prejudice to each other's position." The Pakistan Foreign Secretary believed that boththe Prime Ministers wanted to change what the two countries had gone through in the past half century and hoped for at least "a few steps forward".37120On 17 August Pakistan formally proposed the discussion of the Kashmir question under article 6 of the Simla Agreement.India's response was unsatisfactory, even though there were legitimate reservations and grievances. India stood for a discussion of the whole gamut of relations,and not just the Kashmir issue. It was also opposed to Pakistan using the UN and other international gatherings to harp on the Kashmir issue, while itwas taking recourse to the Simla Agreement for discussing the Kashmir issue. India was also sore at Pak assistance to militancy and subversion in India.All the same, India could have agreed to Pakistan's proposal and added its own agenda to the discussions under the Simla Agreement. It could have theninsisted that discussions continue bilaterally, denying Pakistan the opportunity to use India's rejection to step up its propaganda in international gatherings,such as, at the Non-Aligned Summit in Jakarta in September. The refusal was conveyed in a letter by the Prime Minister himself to his counterpart, in whichhe called first for an end to Pakistan's interference in Punjab and Kashmir in order to create conditions for meaningful talks.39Nevertheless the two Foreign Secretaries signed a joint declaration in the sixth round on the renunciation of the production, stockpiling and the use ofchemical weapons and a code of conduct for the treatment of diplomatic personnel in either country. They also issued a schedule of meetings to discussSiachen, Sir Creek maritime boundary and combating drug-trafficking.40Rao and Sharif had another meeting on 3 September at Jakarta during the Non-Aligned Summit, but it was no more fruitful than the previous one at Rio. Sharifinvited Rao to Pakistan to hold talks on various bilateral issues, including the "core issue" of Kashmir and told a Pakistani press agency that his governmenthad made "effective efforts" to persuade India to agree to hold discussions on Kashmir. The Indian Prime Minister told newsmen on his return to New Delhithat "there was no progress as of now" in his talks with Nawaz Sharif, adding "but talks in themselves are desirable."41It would have been tempting to consider prime ministerial talks in either countries, rather than in third countries, but such talks would have aroused somuch expectation as just could not be fulfilled, given the wide hiatus in the understanding and perceptions of the two countries. The aftermath of failurewould have led to a lower threshold for the outbreak of conflictical situation. Yet, it appeared absurd that the Prime Ministers of the two countries hadto seek their meeting everywhere else except in their own countries.How far removed India's perception, from that of Pakistan was evident from Narasimha Rao's address to French policy-makers and intellectuals in Paris on30 September. India could never accept the theory, he said, that religion was the basis of a nation-state. This militated against the fundamental ethosof India. The accession of Kashmir was non-negotiable and it was an integral part of the121Indian Union.42 Kashmir was the symbol of the diverse society of India and its pluralistic polity.The Kashmiri organizations based in Pakistan-occupied Kashmir under the omnibus nom de plume of Jammu and Kashmir Democratic Alliance gave another callfor crossing the line of actual control on 24 October and tension again built up at the Kashmir border. Although Pakistan had to take steps to foil themarch, the temperature between the two countries rose considerably with the Pakistan National Assembly passing a unanimous resolution condemning "atrocities"committed by Indian troops in Kashmir and calling upon the international community to put pressure on India to agree to a plebiscite in Kashmir.43 Evidencehad also come up for the first time with the filming and interviewing by Eyewitness (a television network) of Afghan mujahideen joining the militancy inKashmir.44 This evidence received many other pieces of confirmation over the next year.Nevertheless, the two sides had agreed on 17 August to hold a fresh round of talks by their Defence Secretaries on the Siachen and Sir Creek maritime boundaryissues. These parleys opened in New Delhi on 2 November. The Siachen glacier, approximately 80 kilometres long and 10 kilometres wide at places, runs roughlyin a north-westerly direction. At its northern most peek it was 8000 metres high, the highest summit after Mount Everest. The Siachen glacier battlefieldis spread over 110 kilometres range and in eight years' war, according to some estimates, both countries have spent over Rs 15,000 crore. Since 13 April1984, when India launched "Operation Meghdoot" to push the Pakistani troops down from the Siachen glacier, the Defence Secretaries of the two countriesmet several times to resolve the differences on the question of ownership, or the dividing line between the two sides.The Siachen talks failed to make any headway as the basic position of the two sides was too far apart and had hardened recently. Pakistan wanted the acceptanceof the 1972 line as the dividing line between the two countries, while India insisted on the 1984 or 1985 position to prevail. In the absence of any generalimprovement of relations and a will to settle, there was no way in which the positions could be modified to achieve a compromise.45 Meanwhile relationswere seriously snarled over the events involving the Babri Masjid in India.BABRI MASJID AND AFTERThe dastardly destruction of the Babri Masjid on 7 December was condemned by virtually all segments of opinion in the country except one. It raised thecommunal temperature and gave comfort to all the forces of intolerance and irrationality. While anger among the Muslims was understandable, vandalism wasofficially encouraged in Pakistan leading to further deterioration in relations. More than thirty temples were destroyed across122Pakistan and the government ordered offices and schools closed to protest against the destruction of the disputed site at the mosque. The Indian ConsulateGeneral's residence in Karachi was vandalized and property burnt. Arrangements were made to repatriate 50 women and 66 children from Karachi.46While a large number of Indians hung their heads in shame over the vandahism in Ayodhya, the extremists in Pakistan had a field day, arousing the emotionsof religious bigotry and fanaticism, much to the delight of their Indian counterparts, some of whom had gleefully participated in the destruction of theBabri structure. In this situation relations were bound to tumble down further.Then came the Bombay blasts, in which more than 300 lives were lost, with the needle of suspicion pointing to Pakistan's involvement. Pakistan hotly deniedIndia's "Pavlovian" response,47 but in time Indian suspicions were confirmed. India believed that the prime suspects had fled to Dubai and from there toKarachi. India warned Pakistan of "serious implications" if Islamabad did not hand over to the Indian authorities six members of the Memon family who werethe main suspects in the explosions in Bombay,48 to which Pakistan's retort was that it was unable to trace them in Pakistan. The Indian government wasconvinced of the involvement of Pakistan's Inter-Services Intelligence (ISI) in the Bombay blasts. Prime Minister, Rao himself told Prime Minister Sharifin Dhaka at the time of the seventh SAARC summit that if Pakistan desired to arrest the deterioration in relations, it must pay due attention to the questionof tracing members of the Memon family.49The thirty-minute meeting, unscheduled and unstructured, was apparently focused on recent developments and did not entail any detailed discussion of themore basic issues. The Pakistan Prime Minister was reported to have repeated his earlier assurance of full cooperation in tracing the Memons. But, accordingto Indian sources, the earlier assurance had not led to any concrete action.50In Pakistan the temperature was being raised to boiling point, both for domestic political reasons and in the hope that that kind of pressure would makeIndia buckle under either through frustration because of inability to contain subversion in Kashmir or under international pressure. How bizarre the situationhad become between the two countries could be gauged from the reported remarks to a Delhi newspaper of Mr. Gohar Ayub Khan, them Speaker of the PakistanNational Assembly, who was in New Delhi attending an Inter-Parliamentary Union, that India would shortly disintegrate into "nice little states''. He assertedthat a "war of liberation" was being currently waged in Kashmir, drew a parallel with the Soviet defeat in Afghanistan and claimed that Kashmir would enormouslybleed India. He also claimed that Indian security forces were having to guard the tomb of Sheikh Abdullah for otherwise Kashmiri "boys" would "dig himout and thrash his bones" as a "quisling". He alluded to the caste system in India and claimed that the basic foundations of democracy123were non-existent in India.51 These remarks, bordering on paranoia, were made by a person high in the Pakistani elite and aspiring for the post of PrimeMinister in his country. They were astounding in their violation of normal diplomatic norms even if they were partly meant for internal audiences in theongoing struggle for power in Pakistan.That struggle for power was climaxed by the dismissal on 19 April 1993 by President Ishaq Khan of Nawaz Sharif's government and the removal of Director-Generalof the ISI, Lt. General Jawed Nasir. This was the second dismissal of an elected government by President Ishaq, first of Benazir Bhutto to pave the wayfor the return to power of Nawaz Sharif, and now of the latter in collusion with Bhutto and her Pakistan People's Party.India's armed forces were put on alert in view of the political crisis in Pakistan. The top brass of the armed forces were at hand in New Delhi for a conferenceaddressed by Prime Minister Rao, who told the service chiefs that reciprocation of friendly overtures would have to wait till the political situation stabilizedin Pakistan, but he said that India would continue its efforts towards peaceful solution of all bilateral issues as per the spirit of the Simla Agreement.52Pakistan's involvement in Kashmir was getting deeper and deeper, despite denials and the constant refrain employed by one and all that it was only extendingpolitical, diplomatic and moral support to the militants there. The U.S. State Department's annual report for 1992 on "patterns of global terrorism" carriedthe comment that "there were credible reports in 1992 of official Pakistani support for Kashmiri militants who undertake acts of terrorism in Indian-controlledKashmir, as well as some reports of support to Sikh militants engaged in terrorism in Indian Punjab." The report noted that the Government of Pakistanacknowledged that it continued to give moral, political and diplomatic support to Kashmiri militants, but the U.S. administration believed that Pakistan'sassistance went beyond the "moral, political and diplomatic".53Yet the U.S. administration decided on 14 July not to brand Pakistan as a state supporting terrorism, citing some helpful steps taken by Islamabad respondingto U.S. concerns. The most important step, it appeared, was the dismissal of Gen. Jawed Nasir as head of ISI, the agency that masterminded the supportto the militants. Nasir's dismissal was believed to be the result of U.S. pressure. It would, however, have been somewhat naive to believe that Nasir'sdismissal indicated the phasing out of Pakistan's material support to the militants. There were others in the ISI and in the Pakistan Intelligence Bureau,*headed by no other than Brigadier (retired) Imtiaz Ahmed. Of Kashmiri origin, Imtiaz was earlier in charge of the political wing of the ISI. It was Imtiazwho had played a crucial role in the formation of the Islamic Jamhoori Ittehad (IJI) and worked for its success in the elections of 1988.124POLITICAL TURBULENCE IN PAKISTANPolitical turbulence had gripped Pakistan during the past three years, which often found expression in one-upmanship on its policy towards Kashmir and India.First, one elected Prime Minister was dismissed by the President (Bhutto in 1990) and then another, her arch rival in April 1993. Earlier, the army seemedto be pleased with Benazir's dismissal and was probably a prime mover in the decision. But the dismissal of Nawaz Sharif was the consequence of a snowballingpersonal struggle between the President and the Prime Minister and the army leadership did not appear to be involved initially. The dismissal this timecreated a deeper constitutional crisis than had perhaps been anticipated by the President. Finally the army leadership moved in the crisis and obligedIshaq to resign as well. With a caretaker President, a caretaker Prime Minister was "imported" from the World Bank, one of whose Vice-Presidents, MoeenQureshi was called back to run the administration until the election process could be completed.But the caretaker Prime Minister functioned much more as a determined administrator than someone who was just filling up until the situation was democraticallycleared. He took a number of vital decisions to speed up economic reforms in the spirit of the World Bank philosophy and to spur economic growth? But sofar as India was concerned, he was as much of a hawk as any other Pakistani politician. Speaking to Pakistani media persons, he ruled out any talks withIndia on Jammu and Kashmir as, in his view, conditions were not conducive for such dialogue. He warned that Kashmir was the potential flash-point of conflictbetween the two countries. Pakistan was "weakened", he claimed, by U.S. actions, such as the Pressler amendment, and the nuclear deterrent was the onlypossible means to ensure security.54There were reports that the Foreign Minister Dinesh Singh had mooted India's quiet diplomacy between India and Pakistan. In an interview with Kliakej Timesof Dubai, he expressed the view that "Oslo-type" secret talks, that facilitated an agreement between Israel and the PLO, were a "good idea" for settlingthe Kashmir issue. Moeen Qureshi's terse response to the reported proposal was: "totally unacceptable".55While considering internal developments in Pakistan we may also note certain significant changes in the approach of the dominant units of the old establishment(comprising chiefly the army and the bureaucracy). The army particularly was a decisive factor. It was no longer allied with the one faction— the NawazSharif faction. Within the army too there seemed to be some divergence of opinion. Unlike the approach adopted by former army chief Gen. (retd.) AslamBeg, an important segment of the dominant opinion wanted to mend fences with the U.S. so that some of the old relationship could be resumed. The Americanpressure was principally exerted in favour of Benazir Bhutto. Washington wanted Benazir to be allowed to come to power if she won a fairly-125held election. It was only partially accepted by the army and the price was that it would still hold a veto on three fundamental issues: relations withIndia, Kashmir and the military budget. The dominant leadership in the army saw the advantage of utilizing Bhutto's equation with Washington to revivethe old links. On her part Bhutto was no longer assailing the army and was eager for an understanding with the army leadership—without that her road topower would be blocked. She was now all praise for the army and wanted it to conduct the elections. The old establishment had decided to accept Bhutto'sinduction in the power structure.So, with the army benignly overseeing the elections, Benazir Bhutto came back with a narrow majority and became Prime Minister. Trying to utilize the opportunityof a change of regime in Islamabad, Prime Minister Rao in a letter of felicitations offered a comprehensive dialogue on all matters of mutual concern includingissues related to Jammu and Kashmir. Bhutto's immediate response was positive. She said that her government was prepared to engage in "serious and purposefuldiscussions" with India to resolve the Kashmir issue and other problems between the two countries and that she gave the "highest priority to establishmentof normal, tension-free relationship with India". The information about the letters was released by the Foreign Office in Islamabad.56Soon enough, however, she backtracked and took the plea that New Delhi was offering only talks on matters relating to Kashmir, and not on Kashmir itself.This was an excuse to get out of a dialogue that she had perhaps accepted on the spur of the moment. The real reason for the turnabout was, as she herselfsaid to the heads of government at a Commonwealth Summit (CHOGM) in Cyprus, that the Indian offer was "a ploy to deflect world attention from the repressionin Kashmir."57Clearly the Pakistani establishment had convinced itself that India had been driven to a corner over Kashmir. It was now or never. In fact everyone in Islamabadseemed to think that if they stepped up the pressure internally in Kashmir, and externally through the mobilization of the international community, Kashmircould be prised out of India's control. Any talks with India at this stage would only ease the pressure on India and might even snatch away the momentof chance from Pakistan's hands.Yet Pakistan was under considerable pressure from the international community to hold talks with India. Even at the CHOGM meet where Benazir carried ona vigorous anti-India lobbying with governmental leaders assembled in Cyprus, she was advised by most of them to engage in dialogue with India. She avoidedany personal meeting with the Indian leaders but agreed to talks at the Foreign Secretary level. This was perhaps going to be the last round of talks forquite some time as Pakistan prepared itself for a "no-talks unless" approach vis-a-vis India.126Meanwhile India managed to resolve the Hazratbal shrine crisis in Kashmir without firing a shot. On the morning of 16 November, 62 persons, including armedmilitants, walked out in surrender to the security forces. It was also confirmed that the holy relic was safe.58 What could have been a serious sourceof trouble in Kashmir as well as between India and Pakistan was diffused peacefully. Additionally, to demonstrate India's earnestness in pursuing a peacefuldialogue with Pakistan, Minister of State for External Affairs, R.L. Bhatia was dispatched to Islamabad as special envoy of the Prime Minister to personallydeliver an invitation to Benazir Bhutto to attend the "Education for All" summit being held in New Delhi in mid-December. Although it was known that Bhuttowas hardly likely to be coming to New Delhi for any meeting New Delhi wanted to make a gesture to underline its commitment to negotiations with Pakistanfor the resolution of outstanding issues.59The Foreign Secretaries of the two countries met on 1-3 January 1994, but given the yawning gap in the positions of the two countries, little could be accomplished.If the tension in the relations between the two countries could have been lowered by the talks, that itself would have been a compensation for meagre resultsotherwise. But even that was ruled out by Pakistan's determination to keep raising the ante in Kashmir and around the world about Kashmir. The seventhround of talks led nowhere, and even though the joint statement at the end of the talks held in Islamabad did not rule out further dialogue, the PakistanForeign Secretary told newsmen, "We shall not schedule any talks, either at the Foreign Secretary level or any other level, until there is a visible improvementin Indian-held Kashmir."60According to the Pakistani media, their Foreign Secretary laid down four conditions for resumption of talks: withdrawal of Indian troops from Kashmir, endto human rights violations, opening up Kashmir to international organizations and release of all political prisoners in Kashmir.61 India, on the otherhand, decided to present a six-point agenda to Pakistan; proposals relating to Siachen, confidence-building measures and disarmament, nuclear non-proliferation,economic cooperation, delimitation of the maritime boundary in the Sir Creek region and Wular barrage. The confidence-building measures were designed tostabilize the situation along the line of control.62 The hiatus was obvious. Pakistan did not wish tp look at any other issues unless there was a substantivemovement forward in keeping with the Pakistani claims on Kashmir while India was against looking at the Indo-Pak relations in their entirety solely throughthe prism of Kashmir, and instead favoured steps to build a relationship of trust and understanding which could help resolve what Pakistan regarded asthe "core" issue.For its part Pakistan also submitted the so-called "non papers" on 19 January about finalizing modalities for holding a plebiscite in Jammu and Kashmir.According to the Pakistan Foreign Secretary, Pakistan had offered "a wide range127of possibilities on how to hold the plebiscite in Jammu and Kashmir."63 India immediately rejected Pakistan's proposals linking future bilateral talks tothe holding of a plebiscite in Kashmir. It might be clarified that the term non-paper was used for informal statement of a country's policy, which wasgiven to another country for eliciting a response for a future dialogue.As we have noted above, Pakistan had decided to raise the stakes, even if it meant engaging in some verbal brinkmanship. There could be no other explanationfor the bluster indulged in by Pakistan's Foreign Minister, Assef Ahmed Ali at Tashkent on 8 January 1994. He told a news conference during a visit toUzbekistan that unless the Kashmir dispute was solved peacefully in terms of international law and UN resolutions, there could not be any lasting peacein South Asia and there was always a danger of a fourth war in South Asia. "And this time around the concern of the world, the concern of South Asian countriesand regional countries is that if a war takes place in South Asia, it might become a nuclear war." He added for good measure, "It is very important forall countries in the region to recognize the immense danger to the world of a war in South Asia which could become the first nuclear war in the historyof this part of the world."64Subsequently, the Pakistan Foreign Office denied, not directly the statement, but its import. It became a pattern of the Pakistani establishment's conductfor leaders and diplomats to make statements and for the Foreign Office to follow up with a direct or an indirect denial.Pakistan's intent was to whip up international concern and scare, besides restraining India and firming up the militants in Kashmir, so as to bring theKashmir issue back into world focus. Islamabad not only ruled out further talks with India unless its conditions were met, but gave the impression thatany dialogue with India would be a favour done to New Delhi. Prime Minister Bhutto categorically declared that Pakistan would not hold further talks withIndia unless it stopped "repression" in Kashmir and released the Kashmiri leaders. She expected such "gestures" from the Indian leadership for a renewalof talks. "We do not want to give wrong signals to the Kashmir is by holding meaningless talks with India", she said.65KASHMIR AND THE UN HUMAN RIGHTS COMMISSIONMuch of it was a dress rehearsal for the forthcoming meeting of the UN Human Rights Commission in Geneva where Pakistan had decided to make a massive effortto raise the Kashmir issue and to get a resolution of some kind or the other adopted by the Commission in regard to the human rights situation in Kashmir.Pakistan depended on the support of the Muslim countries and some Western countries in the Commission for resolution. Bhutto herself led Pakistan's delegationand the attack on India on 1 February at the Commission's meeting,128with an impassioned recapitulation of the "atrocities" committed by India on the people of Jammu and Kashmir who only wanted "azadi".66 As another shotin what Pakistan regarded as a crucial battlefield, that is the Commission meeting, the government in Islamabad vied with the opposition in a call fora total strike in Pakistan on 5 February in support of the struggle of the militants in Kashmir.To give a cleaner gloss to the act, Benazir Bhutto implied in an interview with the BBC that she had given assistance to Prime Minister Rajiv Gandhi withregard to Sikh militancy in Punjab. Expectedly, the interview resulted in a domestic furore, with the opposition denouncing Benazir and calling her a traitorfor helping India. An official spokesman hurriedly clarified that Pakistan had not extended any practical assistance to India to crush the Punjab militants,and that "assisting" meant that Pakistan did not interfere in the internal affairs of India. He went on to explain, "Kashmir is not India's internal affair.It is a disputed territory."67 Lt. Gen. (Retd.) Hamid Gul, former chief of the ISI told the Pakistani media that the Sikh movement was a support base forPakistan's defence and the Kashmiris' independence movement. He asserted that while he was the ISI chief, no person in the country could have dared blockthe Sikh movement for a separate homeland. No such step to check the Sikh movement was taken by the army when he was ISI chief for six months during Bhutto'sfirst tenure, he said. He believed that if the Sikhs' independence drive had continued, it would have benefited Pakistan and Kashmiri freedom fighters.68It took time for India to become alive to the critical challenge posed by the Pakistani effort. It would have been a serious setback if the Commission wereto take any cognizance of Pakistan's allegations. India had sent its Finance Minister for its lead speech at the Commission's meeting. Manmohan Singh mayhave made an erudite speech but it was wholly inadequate in the face of the stiff challenge posed by Pakistan. Only then the political and bureaucraticleadership was put together to meet the threat.69 In line with this realization, on 22 February Parliament adopted a unanimous resolution, expressing thedetermination of the entire nation "to firmly counter all designs against its unity, sovereignty and territorial integrity", reiterating that Kashmir wasan integral part of India, and calling upon Pakistan to vacate the areas in Jammu and Kashmir occupied by it through aggression.70India had to mount an assertive, and even aggressive, diplomacy to deflect Pakistan's well-heeled campaign, exposing Pakistan's promotion of "unbridledterrorism" in Kashmir and making the countries represented in the Commission aware of the implications of any attempt to interfere in India's internalaffairs. In the face of this firming up of India's diplomatic effort, Pakistan's support base shrank. The Western powers were making it clear that theydid not wish to be involved in this dispute and many of the other members had second thoughts.Pakistan had introduced a resolution that would have the Commission send a fact-finding mission to investigate and report on the human rights situationin129Kashmir. In the face of the growing reluctance of Commission members for any such move, that in any case would have exposed half the members of the internationalcommunity to similar investigations, Pakistan tried to salvage something from the impending fiasco and dropped the reference to a fact-finding missionand instead, its resolution called upon India to ensure the protection of human rights in Jammu and Kashmir. India lobbied hard against the watered-downclauses, and, finally, faced with probable defeat, Pakistan, at the request of its friends, China and Iran, withdrew its resolution in what was a clearsetback to its campaign to internationalize the Kashmir issue.71Undoubtedly, the withdrawal was a recognition of the loss of any substantial support. The defeat would have been a more painful setback than the withdrawalunder appeal from various countries for many of whom the passage of any such resolution would have established highly dangerous precedents. While India,with its democratic and transparent political structure, could have lived with a resolution passed with the support of a few countries, the human rightsrecord of some of them would have left them vulnerable to far more rigorous interference subsequently. If it had come to the crunch, Iran and China couldhave abstained, yet this was not an option they would have liked to exercise. China, for instance, needed every possible vote for its own no-action resolutionagainst the European condemnation of its human rights record, particularly in Tibet. China got India's vote in return for its role in the withdrawal ofPakistan's resolution. Its no-action resolution was narrowly passed.There was some confusion and differing reports about what India had promised Iran and what Iran told Pakistan. According to Indian sources Iran in its originalappeal wanted to play some role in resolving the Kashmir issue, but this was rejected by India. Iran then, while appealing to Pakistan, had promised thatit would continue to make efforts towards a solution of the problem. Pakistani sources, however, claimed that India had promised Iran that it would allowrepresentatives of the OIC and the International Committee of the Red Cross to visit Kashmir to observe the situation about human rights, a claim deniedby India.72 As the Pakistani newspaper Dawn commented: "At Geneva Pakistan has done what wise generals do when faced with long and impossible odds: declarevictory and call off the task at hand."73 An International Red Cross team, however, did visit Kashmir on 21 March.As far as India-Pakistan relations were concerned, there was still no-go. India's Foreign Secretary had conveyed on 25 March India's response to the twonon-papers submitted by Pakistan. The Pakistan Foreign Secretary expressed his country's disappointment at India's response and reiterated Islamabad'sdecision against any talks with India unless certain conditions were met. Pakistan now listed those conditions as: reduction of Indian troops in Kashmir,removal of military bunkers around the Hazratbal shrine, release of top Kashmiri leaders130and permission to human rights organizations to visit Kashmir.74 This was in response to India's prodding of Pakistan for a dialogue. Prime Minister NarasimhaRao told Colombo's fortnightly Lanka Guardian that India had proposed to Pakistan continuation of Foreign Secretary-level talks and had urged Islamabadto respond positively.75One important fall-out of Pakistan's challenge in the UN Commission on Human Rights and elsewhere was India's decision to introduce much greater transparencyin the policy towards and access into Kashmir. It also began making new efforts towards a political normalization and revival of political process m Kashmir.In consequence many diplomats and foreign political leaders went to Kashmir, and no matter what the level of alienation might have been, they also sawirrefutable evidence of Pakistan's involvement in the insurgency there. To take one instance, Britain's shadow Foreign Secretary (of the Labour Party),on his return from a visit to Kashmir, said that after having seen the huge cache of arms and other weapons, including anti-tank mines and rocket launchers,captured by the Indian security forces, he was convinced that the armed insurrection in the Valley was supported and sustained by financial resources whichcould not be readily available within the Valley. The support was coming from across the border and he urged that Pakistan should ease its involvementin Kashmir. The Kashmir issue should be discussed bilaterally between India and Pakistan under the Simla Agreement, he said. He also believed that Indiawas not doing all it could to get its case on Kashmir across to the people in other countries.76DIPLOMATS AS HOSTAGESOnce again diplomats were treated as convenient whipping boys. An Indian diplomat, V.S. Chauhan, was abducted by Pakistani agencies from outside his houseon the night of 11 July and given the third degree treatment in a six-hour ordeal in which he was seriously injured with "subconjunctive haemorrhage inthe right eye, bruises on the face, wrist and ankle" and injuries on his hips and thighs, and, according to Indian allegations, forced to sign a document.In retaliation India expelled a' First Secretary and an upper division clerk of the Pakistan High Commission.77 The car of a Pakistan naval attache wasattacked and in retaliation two cars belonging to the Indian High Commission in Islamabad were stoned.78 Both sides strongly protested against each other'sactions. This author has already commented that no matter who did it, such uncivilized behaviour was in flagrant violation of diplomatic norms and practicesduly defined in the Geneva convention in this regard.India again offered talks for evolving a code for the treatment of diplomats at Secretary level, but Pakistan in line with its policy of no high-level talksexcept on the conditions it had laid down, rejected the proposal, suggesting instead131talks between the High Commissioner and the Foreign Office in each other's country. These talks led to bland statements, but there was no real guaranteethat such things would not recur.THE NUCLEAR ISSUESuch a plethora of contradictory statements have come from Islamabad, its government and political leaders, diplomats and retired generals on Pakistan'snuclear capability that one would think that it was an orchestrated cacophony to confuse and confound the world. It was that and much more. Like the policytowards Kashmir, the nuclear issue too became a part of the domestic political struggle.It was known to many in the international community that Pakistan had been pursuing a nuclear weapon programme for long. Zulfiqar Ali Bhutto had himselfstated in his last testament that he had ordered the quest for a bomb— even before India's Pokhran explosion in 1974. It was equally well known that DrAbdul Qadeer Khan was the person involved in this quest. He had declared in an interview that the monopoly of the West in the enrichment of uranium "hasbeen finished for ever". By the grace of God, he said, "Pakistan is now among those few countries which have acquired mastery over uranium enrichment."He claimed that Pakistan had left India behind by many years in this area. The know-how for the enrichment of uranium meant the bomb know-how as the timerequired for encasing enriched uranium into a bomb was negligible.Pakistan had been trying both the plutonium and the uranium route to make the bomb. How it acquired the material or how much critical help it received fromChina is another matter and is not being discussed here. In any case the general picture in this regard is well known.Yet Pakistan continued to deny that it was engaged in such exercise. The Americans knew what was happening but both the Reagan and the Bush administrationschose to ignore the evidence and to send certifications to the contrary to U.S. Congress in order to continue military and economic assistance to Pakistan.A former senior American official, Richard Barlow, had fully informed Washington about the facts in regard to Pakistan's nuclear weapon programme, buthis reports were hushed up so mat the President's certification could continue to be given. General Aslam Beg, the former Pakistan Army Chief also confirmedthat the Americans knew very well that Pakistan had crossed the line, but ignored the evidence because of the Afghan and subsequently the Gulf war.79Every now and then reports appeared in the U.S. media, media investigation as well as those of respectable think-tanks, that Pakistan had acquired a nuclearweapon capability. An authoritative report observed that "Pakistan, it appears, had become a juncture only in a very limited sense." Pakistan, the reportsaid,132was also actively pursuing the deployment of nuclear-capable ballistic missiles. The two new surface-to-surface missiles, Half-1 and Half-2, tested in 1989by Pakistan had payloads of 100 and 300 kilograms respectively, in effect making them powerful enough to carry relatively crude nuclear warheads. Half-2could reach New Delhi if its payloads were reduced.80China was believed to have provided essential weapon-related nuclear aid directly to Pakistan, including the design of nuclear device detonated in China'sown nuclear tests, uranium enrichment know-how, and quantities of weapons-usable highly enriched uranium sufficient to build two nuclear devices, accordingto the report. Six ongoing Pakistani nuclear projects depended critically upon material or design information clandestinely obtained from the advancednuclear supplier countries.81The evidence was getting to be so strong that by the end of 1990 the Bush administration could no longer pretend that it did not have sufficient informationand consequently, it could not obviate the Pressler amendment. By the end of 1991 the U.S. had suspended all military and economic assistance to Pakistanin view of Pakistan's nuclear ambition. Even then Pakistan continued to deny that its programme was anything but peaceful.82 Washington, too, still refusedto tell all that it knew on the pretext of these matters being "classified information".83But the pretence could not be prolonged further, even on Pakistan's part, for the "credibility gaps", to use the words of Pakistan's Foreign Secretary,were growing wider and wider. The first admission came from Shahryar Khan, then Foreign Secretary, who told the Washington Post on 7 February 1992 thatPakistan now had the "components and know-how to assemble at least one nuclear explosive device. The capacity was there, Pakistan possessed the elements,he said. The "elements" included potential weapons "cores" fashioned from highly enriched uranium, the fossil material used for a nuclear explosion. Hesaid he had not been told (!) how many nuclear devices could be assembled by Pakistan from existing components, but he claimed that his government hadpermanently frozen in 1991 production of highly enriched uranium and weapon "cores".84No one outside knew how much he revealed and how much he did not. Pakistan government and political leaders went on making contradictory statements. PrimeMinister Nawaz Sharif claimed that Pakistan did not possess a nuclear explosive device and did not intend to make one85 (He was to claim just the oppositesubsequently). Benazir Bhutto, them in the opposition, asserted that Pakistan had achieved a nuclear capability by June 1989 during her tenure and wasin a position to meet any threat to its security. "There was no need to cross any further line", she said in a forum organized by a Lahore-based newspaper.86It might be recalled that she had played the innocent when her American interlocutors had told her in 1989 of the information they had that Pakistan hadcrossed the nuclear Rubicon.87 This new statement was, however, partially133corroborated much later by Gen. Aslam Beg, who was Chief of Army Staff at the time. But he claimed an even earlier capability for Pakistan's nuclear programmethan Bhutto did.The general (retired) told the Daily Awaz International in London that Pakistan had acquired nuclear capability as far back as 1987. Pakistan had carriedout successful nuclear explosion, he said, and added that the "cold explosions" were as good as "hot explosions".88 Still later, speaking at a gatheringof lawyers and journalists in Lahore, he asserted that Pakistan had acquired complete nuclear capability, including the development of weapon deliverysystem, along with the ability for manufacturing devices. Pakistan had also decided at the highest level to continue development of nuclear weapon deliverysystem as early as 1989. The ruling troika, comprising the President, Prime Minister and the Army Chief, had in January 1989 decided to "cap" the country'snuclear programme, meaning continuation of the development of nuclear technology and delivery system but halting the manufacture of devices, he told hisaudience.89This statement would imply that Pakistan had earlier manufactured some devices, at the very least, which was being discontinued. This would also be in linewith the recent claim made by Nawaz Sharif that Pakistan had the bomb on the shelf, and not just a capability. The Interim Prime Minister Moeen Qureshiadmitted that Pakistan had the capability but denied that it had "an actual nuclear device" and repeated the others' statements that Pakistan had "stoppedand capped its nuclear programme after reaching a point."90Pakistan went on obfuscating the issue. Officially it denied it had the bomb, conceding only the capability to produce one. Despite the statements abouthaving capped the programme in 1989, Islamabad repeatedly asserted that it would not cap its programme unless India did likewise. This was along the lineit took about signing the NPT,91 and the five-nation proposal which was still on the table. As late as May 1994, the Interior Minister Nasirullah Babartold the Senate, "We will not go for unilateral capping, let alone reducing and ultimate elimination of our nuclear programme."92Then came the bombshell. The former Prime Minister Nawaz Sharif in a public meeting in Pakistan-occupied Kashmir on 23 August claimed that Pakistan actuallyhad the bomb, and not just the capability, and that if India attacked Pakistan, it would be used.93 He confirmed the statement subsequently and the sameclaim was made in his presence by Ziaul Haq's son.In the face of all this bluster, India had to keep a constant review of its policies. That India had the capability was undeniable, but that India did nothave a bomb on the shelf, was equally clear. A very senior atomic scientist, who must remain anonymous, scoffed at this author's suggestion, soon afterDr Q. P. Khan had made his assertion, that Pakistan was ahead of India in the nuclear field. A report in 1993 of the Stockholm International Peace ResearchInstitute134(SIPRI) believed that Pakistan's weapons-grade uranium stockpile by 1995 could weigh 430 to 520 kilograms or enough for about 20 to 50 atomic bombs. Quotinga U.S. official, the SIPRI report asserted that with the bomb design provided by China, Pakistan had a solid core of weapon-grade uranium. As a resultof this design, in 1991, Pakistan had enough material for about six to ten nuclear weapons, it said. The report maintained that weapon-grade uranium productionbegan in earnest in 1986 and continued uninterrupted until 1989. After a year's pause, production resumed, stopping again in 1991.94As for India, SIPRI believed that although India denied that it had deployed nuclear weapons, there was strong evidence that it could quickly deploy anarsenal of fission weapons. According to SIPRI, after the Pokhran explosion in 1974, India had "continued nuclear weapon research and development programme",apparently intensifying it in mid-1980 in response to Pakistan's progress towards nuclear weapons. The document contended that at the end of 1991, theweapon-grade plutonium inventory available to India for use in weapons was about 290 kilograms. Assuming that India would use about 5 kilograms of weapon-gradeplutonium in each weapon, it had enough for almost sixty nuclear weapons, according to the SIPRI report.95Nevertheless, even the Americans, with all their snooping paraphernalia, have not really asserted, nor offered any evidence, that India had any bombs onthe shelf. India kept the option open, and not just because of Pakistan, but had not actually manufactured the bomb. So in effect the programme, so faras actual fabrication was concerned, was "capped", to use the latest fashionable parlance.It was ridiculous to suggest, as some Western, chiefly U.S. commentators were doing, that India and Pakistan were playing with the bomb like a toy. Therewas no reason to believe that India and Pakistan would behave with less caution than, say, the big powers. The nuclear logic holds good for both Indiaand Pakistan, as it does for USA and Russia. Both countries knew very well that nuclear weapons were not meant to be used, only to deter. This was wellrealized by the military leadership in Pakistan, too. We have the statements of three retired military chiefs of Pakistan in this regard.Apart from Gen. Aslam Beg's statement that nuclear weapons were not for actual use, which some dismiss because he is regarded by them as a maverick, a formerAir Force chief, Air Marshal (retd.) Zafar Chaudhary speaking at a Lahore seminar cautioned against loose talk about nuclear arms or a war. Comparing thepopulation density of Pakistan's most populous, vulnerable areas and nuclear capability vis-a-vis India's, he said that while one stood in the ratio ofone-to-five, India had a five-to-one advantage in the case of the other. He explained, "While we may not be able even to touch India's far west, we wouldbe undergoing much greater destruction than our neighbour because of lack of depth ... Will it be a consolation for us that we have killed while riskingour own existence? Will it not amount to nuclear suicide?"96 And we have a recent statement by another135former Air Chief, Nur Khan, who made what would normally be regarded as heretical that Pakistan, burdened by disproportionately high defence expenditure,was heading the way of the Soviet Union and could go down begging. Speaking at a forum organized by the newspapeer Nation on 17 August 1994, he even suggestedthat "Pakistan should freeze its nuclear programme, provided it is guaranteed safe borders by the U.N. and the big powers". He advocated the acquisitionof a U.S. defence umbrella as "our armed forces are not in a position to sustain a war with India even for a short period, owing to the defence gap betweenthe two states which has widened substantially, definitely in favour of India." He pleaded for a reduction of Pakistan's military expenditure and concentrationon economic development.97Nor for that matter was India anxious to rattle the nuclear sabre. The very fact that no hysteria was whipped up over Nawaz Sharif's statement and thatIndia gave a very sober and studied response indicated that neither India nor Pakistan was readying to throw atom bombs on each other. Nevertheless India'ssecurity dilemma was worsened by the nuclearization of Pakistan and the presence of nuclear weapons in most of its neighbourhood. As Minister of Statefor External Affairs, Salman Khursheed said in response to the Nawaz statement, there was no reason to disbelieve it.98 The government, as usual, wenton claiming that its options were under constant review, but many analysts wondered if it was not a case of more smoke than fire. The prominent JanataDal member, I.K. Gujral (who subsequently again became External Affairs Minister in May 1996) noted that the government was using "brave words, but ifthese are not backed by action, it would be far more dangerous for the country."99India had not only to contend with the increasing nuclear capability of Pakistan but also the quest for missiles and the critical Chinese assistance inthese areas. The New York Times revealed (22 June 1995) a CIA report that in the three preceding months China had delivered to Pakistan important componentsthat could be used in M-ll ballistic missiles.100 Despite Pakistan's denials, U.S. sources insisted on the authenticity of the report. In fact, subsequentlyit was revealed by the Washington Post (2 July) that U.S. intelligence sources had asserted that Beijing had given Pakistan complete medium-range ballisticmissiles and that storage crates at Pakistan's Sargodha Air Force bases contained more than 30 Chinese made M-11 missiles.101 These missiles could be deployedwith nuclear warheads for threatening India.Denials notwithstanding, Pakistan also took the stand that it was responding to the security threat posed by the development of the Prithvi missile by India,which would be Pakistan-specific. Yet, through its own missile development programme, Pakistan would only be hastening the possible deployment of Prithviby the Indian armed forces.136KASHMIR OR NOTHINGFor most of the period between 1994 to the end of 1995 Islamabad stoutly refused any talks with India unless the "core" issue, Kashmir, was taken up firstand resolved—apparently to Pakistan's satisfaction. Islamabad rejected Prime Minister Rao's proposal (made at an election rally in Andhra Pradesh) forholding Indo-Pak talks for resolving bilateral issues. It said New Delhi was "insincere" about resolving the Kashmir issue.102 Nor did it agree to anyIndo-Pak meeting during the ensuing Commonwealth officials' conference. There were again ugly incidents involving diplomats of the two countries.Relations remained frozen until there was a change of government in Delhi. As a new United Front government with H.D. Deve Gowda as Prime Minister tookover in India, in a reversal of the earlier policy, Benazir Bhutto, then Prime Minister, invited India for an unconditional resumption of India-Pakistandialogue.103The new government in India lost little time in responding to the suggestion as the new External Affairs Minister, I.K. Gujral himself desired to get thingsmoving with Pakistan. However, subsequently Bhutto told the Khaleej Times of Dubai that talks could take place only after elections in Kashmir were outof the way.104 She claimed that the announcement of elections in Kashmir had put a damper on the preparations for talks.Yet another incident of abuse of diplomatic personnel took place in late October 1996 involving, for the first time, an attack by some Pakistani governmentagencies against a woman. In the incident, the wife of an Indian staff member in the High Commission in Islamabad, Ashok Wahi, was traumatized and severelyinjured, with a stab injury in the hand and a fractured foot. India threatened that it might have to review the whole gamut of relations with Pakistan.10However, the incident was allowed to die down and was soon forgotten.Meanwhile dramatic developments were taking place in Pakistan. President Farooq Leghari dismissed Benazir Bhutto and ordered new elections. As ExternalAffairs Minister, I.K. Gujral put it, "Pakistan today is different from Pakistan last week. A duly elected government has been sent home and a nominatedregime has taken over."106The democratic process was restored with the holding of elections that gave a massive victory for Nawaz Sharif and his Muslim League party. Sharif had takena softer line towards India during the election campaign, and with over two-thirds majority that he enjoyed in the National Assembly, the stage was setfor resumption of talks with India.107 India had already been sending signals to Pakistan in line with the new strategy adopted under the stewardship ofI.K. Gujral, that came to be described as the Gujral doctrine.There were a number of new elements in the strategy pursued during 1996 towards Pakistan. One was not to get involved any more in a slanging match137with Islamabad and to ignore its fulminations against India in the international fora. This was particularly noticeable during the deliberations on theCTBT and subsequently at the UN. Despite Pakistan's vitriolic attacks on the Indian position, India made no response and just stuck to the exposition ofits own policies and standpoint. The idea was to make it more embarrassing and futile for Pakistan to go on with its virulent campaign against India.The second element of the strategy was to go ahead and develop closer political, economic and trade relations with other countries in South Asia even ifPakistan was not immediately forthcoming. This was particularly demonstrated in the so-called sub-regional groupings in SAARC.108 In fact Pakistan showedconsiderable unease over this element of the Gujral doctrine as an attempt to isolate and marginalize it.Finally, the Indian effort was to probe and prompt Pakistan to resume a serious dialogue with India. As a token of its earnestness India conveyed to Islamabadits willingness to discuss all issues, including Kashmir. In making this proposal, it was India's hope that by holding parallel and simultaneous discussionson the various bilateral problems the two countries might be able to move forward wherever it was immediately possible while deliberations on other issueswould also continue, hopefully resulting in a more normal relationship.109Some of the elements in this strategy were in fact not new and had been suggested a long way back by many analysts. But perhaps the political will was lackingand was now more forthcoming. Also, quite possibly the psychological climate was more ripe now for better results in implementing this strategy.NOTES1. See V.P. Dutt, India's Foreign Policy, Vikas Publishing House, New Delhi, 1984 and 1994. See also the author's India and the World, Sanchar PublishingHouse, New Delhi, 1990 (Reprinted in 1991).2. Asian Recorder, 26 March-1 April 1990, pp. 21070-1.3. The Hindu, 20 July 1990.4. Hindustan Times, 20 July 1990.5. Ibid.6. Ibid., 16 July 1990.7. Statement in Parliament of the then Foreign Minister, I.K. Gujral, Times of India, 9 August 1990.8. The Hindu, 12 August 1990.9. Times of India, 13 August 1990.10. Anikendra Nath Sen in Times of India, 17 August 1990.11. Then Foreign Minister Yaqub Khan's speech in the UN General Assembly and Indian Foreign Minister I.K. Gujral's rejoinder, Times of India, 29 and 30September 1990.12. Hindustan Times, 4 and 9 November 1990.13. Indian Express, 9 November 1990.13814. This was revealed by Prime Minister Chandrashekar in a statement in Parliament on 7 January 1991.15. Indian Express, 26 November 1990.16. Hindustan Times, 22 February 1991.17. Times of India, 17 July 1991.18. Times of India, 10 August and Hindustan Times, 18 August 1991.19. Business and Political Observer, 29 January 1991.20. Indian Express, 8 April 1991.21. Subsequently Pakistan changed track and denied that it was giving material support to insurgency in Kashmir.22. Text of Pakistan Prime Minister's proposal with the author.23. The Hindu, 26 August 1991.24. Hindustan Times, 26 and 31 August 1991.25. Times of India, 1 September 1991.26. ibid., 1 January 1992.27. Indian Express, 29 October 1991.28. The Hindu, 9 November 1991.29. Ibid., 18 October 1991.30. Hindustan Times, 25 October 1991.31. Indian Express, 3 February 1992.32. Times of India, 5 February 1992.33. Hindustan Times, 7 & 8 February 1992.34. Speech at a dinner hosted by Pakistan-occupied Kashmir "Prime Minister".35. Times of India, 25 May 1992.36. Hindustan Times, 15 June 1992.37. Times of India, 17 August 1992.38. The text of the Agreement with the author.39. Hindustan Times, 1 September 1992.40. Times of India, 20 August 1992.41. Indian Express, 5 & 7 September 1992.42. Times of India, 1 October 1992.43. Hindustan Times, 25 & 27 October 1992.44. Ibid., 24 September 1992.45. Times of India, 7 November 1992.46. Ibid., 8 & 9 December 1992.47. Statement by the Foreign Office in Hindustan Times, 18 March 1993.48. Foreign Minister Dinesh Singh to Pakistan High Commissioner in India, Indian Express, 25 March 1993.49. Times of India, 12 April 1993.50. Ibld.51. Hindustan Times, 18 April 1993.52. Ibid., 21 'April 1993.53. Text of the report with the author.54. Times of India, 11 August 1993.55. The story emanated from Islamabad and was reported in the Hindustan Times, .0 September 1993.56. The Hindu, 21 October 1993.13957. Vinod Sharma from Islamabad in Hindustan Times, 26 October 1993.58. Hindu, 17 November 1993.59. Times of India, 10 December 1993.60. Indian Recorder, New Delhi, 15-21 January 1994, p. 33.61. Dawn, Karachi, 4 January 1994.62. Fn. 60.63. Times of India, 20 January 1994.64. News, Karachi, quoting Reuter from Tashkent, see Pakistan Opinions, Trends, Analysis and News Analysis, Pakistan Series (hitherto referred to as POT),12 January 1994, pp. 75-6.65. Dawn, 24 January 1994.66. Pakistan Times, 2 February 1994.67. POT, Pakistan Series, 19 February 1994, pp. 377-8.68. Ibid., p. 378.69. See the author's article in Hindustan Times, Sunday Magazine, 20 March 1994, p. 1. The political-bureaucratic leadership comprised of Salman Khursheedand Atal Behari Vajpayee at the political level and Satish Chandra, Prakash Shah and Neelam Sabharwal at the bureaucratic level.70. Text in Hindustan Times, 23 February 1994.71. Indian Express, 10 March 1994.72. Pakistan Times, 10 March 1994. See also Hindustan Times, 10 March 1994.73. Dawn editorial, 11 March 1994.74. Indian Express, 19 April 1994.75. Times of India, 30 May 1994.76. Hindustan Times, 26 March 1994.77. Times of India, 13 July 1994.78. The Hindu, 22 July 1994.79. Times of India, 4 April 1994.80. Carnegie Endowment report entitled "Nuclear Ambitions" released on 19 September 1990.81. Ibid.82. Pakistan Foreign Office statement, 15 January, in Hindustan Times, 16 January 1992.83. State Department spokeswoman Margaret Tutwiler's Press Conference, 15 January. Times of India, 16 January 1992.84. Indian Express, 8 February 1992.85. Times of India, 2 June 1992.86. Hindustan Times, 19 April 1992.87. See Critical Mass, op. cit.88. Times of India, 25 July 1993.89. Hindustan Times, 25 January 1994.90. Interview carried by The Muslim and reported in Times of India, 25 September 1993.91. Statements by President Ghulam Ishaq Khan (25 May 1992), Minister of State for Foreign Affairs, Siddique Khan Kunju (22 February 1992) and Prime MinisterBenazir Bhutto (7 April 1994—contradicting her own remarks to newsmen reported on 12 November 1993).14092. POT, Pakistan Series, 20 May 1994, p. 1121.93. The Hindu, 24 August 1994.94. Text of the document with the author.95. Ibid.96. POT, Pakistan Series, 10 January 1994, p. 68.97. Ibid., 22 August 1994, p. 1831.98. Indian Express, 25 August 1994.99. Times of India, 27 August 1994.100. Hindustan Times, 23 June 1995.101. Ibid., 4 July 1995.102. The Statesman, 22 November 1994.103. Hindustan Times, 5 June 1996.104. Interview with its editor, S. Nihal Singh, quoted in Hindustan Times, 29 August 1996.105. Times of India, 1 November 1996.106. Hindustan Times, 20 November 1996.107. Since many important developments took place after these pages were written, some of the more notable ones have been mentioned in the last chapterof the book, Conclusions.108. See the section on SAARC in this chapter.109. See also the chapter Conclusions at the end.141II INDIA AND BANGLADESHBACKGROUNDUneasy often, acrimonious at times, India-Bangladesh relations have settled into a less uncomfortable routine in the last few years. The roots of the troubledrelationship lie in the complex situation that surrounded the creation of Bangladesh and developments following that event. India had played a substantialrole in enabling the struggle in Bangladesh to succeed against Pakistani military might. The economic troubles of a fledgeling country, the assassinationof the founding father, Mujibur Rahman and the subsequent political troubles—the blame for many of these difficulties could be conveniently laid at thedoor of India. In addition many problems arose as they often do among neighbours, generating tensions with inflated reactions amidst suspicion and mistrust.1Naturally, the way Bangladeshis look at the situation is very different from the view from New Delhi. Some of them take an extremely dim view of India andfind India's hand behind each and everything that troubles Bangladesh. But a moderate view can be taken as typical of Bangladeshi perception and the problemthat it poses for India.Smaller than China, India is the second biggest country of the world in population, ranking tenth in engineering and technological development. It has theworld's fourth largest army, sixth largest navy and eighth largest air force. The six South Asian neighbours of India together add up to a third of India'ssize and are vastly outstripped by her in resources, economic, scientific and technological development. This asymmetry is characteristic of South Asia,and India stands out pre-eminent in every respect."2This is how the former Bangladesh Foreign Minister, Muhammed Shamsul Haq put it, revealing the big country-small country syndrome, which was often at theback of much of the occasional tension between the two countries and the undercurrent of hostility in Dhaka. But it needs to be pointed out that in thecase of the Bangladesh-India situation, smallness was a relative term. Bangladesh was not really a small country. Population-wise and resource-wise itwas among the large countries of the world, although it was currently poor and developing.PROBLEMSThe post-1975 relationship (that is after the assassination of Sheikh Mujib) was analysed by a Bangladesh weekly:"Indo-Bangladesh relations are not bedevilled by geopolitical contests as is the case with Indo-Pak relations—both pre-and post-natal. While the latterwill.142hopefully, give way to coexistence, Bangladesh has no stake in India's destability in the North-east. Nor is migration, a pet issue in India's domesticpolitics, a function of lebensraum. Then what really bugs India? It is the perceived anti-Indian ambience in Bangladesh, or a psychological extractionof eternal gratitude for India's help in the war of independence. This is poor logic and worse sentiment. Gratitude is a brittle foundation on which todevelop mutual relations between two sovereign nations. The support of India to Bangladesh's struggle is history well-remembered; but the Indian reactionto Bangladesh's post-75 polity is also not forgotten."3The reference was to the strong reaction in India to the developments arising from Mujib's killing and the frost that entered the relations for a numberof years thereafter. Mujib's assassination was followed by military rule first of General Ziaur Rahman, and, after his assassination, of General MohammedErshad.There were also some forces in Bangladesh for whom it seemed to be a self-assumed holy task to stir resentment against India and who would blame India foreven their natural calamities. These were the susceptibilities that India had to contend with in its interaction with Bangladesh. In addition a numberof major problems had accumulated in this interaction between the two neighbours. Some of the most important ones may be mentioned here. The "seeds ofdiscontent", euphemistically so described for the acrimony that erupted from them, lay in a host of issues, of which the principal ones should be notedas they would remain with us for much of the period under consideration.Among the most contentious and complicated problems that caused a great deal of bad blood between the two countries was the sharing of the waters of theGanga and the Farakka barrage construction by India to harness its waters.4 The core of the problem related to the sharing of these waters for five dry-seasonmonths between January and May. Sheikh Mujib and Indira Gandhi had agreed that the technical experts of the two countries should find an amicable solutionto the issue of sharing of these waters.But after the felling of Sheikh Mujib, the issue became increasingly tied up in political knots. Dhaka tried to internationalize the issue, without anyconspicuous success. It raised the issue at the Foreign Ministers meet at Istanbul of the Organization of Islamic Conference in January 1976. It also madea bid to raise it at the Non-Aligned Summit at Colombo in August 1976 and finally went to the UN the following month. The UN, prompted by the non-alignedcountries, sent the matter back to the two countries. Subsequently attempts were made by President Ershad to bring the water management issue to the UN,the Commonwealth and the SAARC, again without any fruitful result, but leading to a worsening of relations.The basic agreement was signed in 1977 by the Janata Party government in New Delhi for a five-year period regulating the flow to Bangladesh during the dryseason. But India's proposal to build a link canal was strongly opposed by Bangladesh, while India disapproved of Dhaka's attempt to bring Nepal into143what it regarded as a bilateral issue. Mrs. Gandhi continued the agreement signed in 1977. The memorandum of understanding signed in October 1972 expiredafter eighteen months but it was extended for another three years by Rajiv Gandhi. However, years of negotiations defied an "amicable solution" envisagedby Indira Gandhi and Sheikh Mujibur Rahman as both sides a adamantly stuck to their perceived national interests. India remained worried about the adequateflow during the lean months to Bihar and U.P. as well as about the fate of Calcutta port if it were denied sufficient water, while Bangladesh believedit faced the threat of ruin during the lean season because of insufficient waters available to it from India during this period.Others problems related to the completion of land boundary demarcation and the transfer to Bangladesh of the Tin Bigha corridor to Dahagram and Angopathenclave. A consequential problem was of occasional tension from the exchange of fire between the Bangladesh Rangers and the Indian Border Security Force.There was also the issue of and the delineation of the maritime boundary to be settled. To these Bangladesh added the complaint about a section of thehigher echelons of Indian bureaucracy taking it for granted during bilateral talks.5 From the Indian side would be added the problems of the return ofChakma tribal refugees to Bangladesh and the illegal presence of Bangladesh citizens in many parts of India. All these issues and many others formed apart of the mosaic of India-Bangladesh relations in the period under study.India had a change of government in December 1989 while Bangladesh was under Ershad's military rule. The change in government in New Delhi offered, as usualin international relations, an opportunity for improvement of relations.General Ershad welcomed the installation of the new government, in New Delhi and told the Jatiya Sangsad (Parliament) that Bangladesh was inspired by thenew Indian government's desire to improve relations with its neighbours and particularly mentioned the problem of the Ganga waters.6 Using the opportunitythe National Front Foreign Minister, I.K. Gujral visited Dhaka in mid-February 1990, where he stressed mutual trust, respect and confidence. He recalledthe Bangladesh struggle for independence and those "shared historic events with considerable emotion". It is doubtful, though, that that particular governmentwas particularly enamoured of references to that struggle. However, gradually the relations were picking up at the official level and the immediate pastwas being put behind them. How strong was the anti-India sentiment is evident from the noises that even the Awami League occasionally made against Indiain order to establish its bonafides. For instance, it repeatedly attacked the government for not annulling the treaty that a government led by the AwamiLeaguee had signed with India for peace, friendship and cooperation.However, the gathering process of improvement of relations was given a big push by the Indian Supreme Court's judgement on 5 May 1990 that the proposedtransfer of the Tin Bigha corridor to Bangladesh did not amount to ceding of144territory and that no constitutional amendment was needed to give effect to the agreements signed between the two countries (the first one between IndiraGandhi and Sheikh Mujibur Rahman in 1972 and another one in 1982 for the lease of the corridor). The agreement would enable the people Bangladesh to commutebetween Angorpota and Dahagram, which were separated by the Indian territory of Tin Bigha. For Bangladesh it had become a major bilateral issue as successivegovernments in India wrestled to overcome opposition by a section of the populace and some political parties. The case had gone to the constitutional benchof the Supreme Court. Bangladesh welcomed the judgement which in its view would remove a major irritant in bilateral ties.7NEW GOVERNMENTS IN NEW DELHI AND DHAKAThe opportunity for mending ties was strengthened by the induction of two newly elected governments in India and Bangladesh. The restoration of democracyin Bangladesh8 was a very positive step forward and was expected to have a beneficial impact on India-Bangla relations. The Bangladesh Nationalist Party(BNP) headed by the slain General Ziaur Rahman's wife, Khaleda Zia emerged as the single largest party with 140 out of 294 seats (Awami League with 84seats was the next largest party).9 The new Prime Minister Khaleda Zia called for a joint endeavour to further develop Indo-Bangla bilateral relations.10Her gesture in attending Rajiv Gandhi's funeral was well received. She met President R. Venkataraman, and expressed hope for better ties.11 The Awami Leagueobserved that the same imperialist and pro-imperialist forces that killed Mujib were responsible for the assassination o. lajiv Gandhi.12Thereafter, a new government headed by P.V. Narasimha Rao took over in India. In Bangladesh, the first time since the killing of the Bangabandhu, the countryhad an elected representative government. The two representative governments could start on a new note of good neighbourhood. The Bangladesh perceptionwas that the relations had slipped into a low ebb following the violent changes in Dhaka. Successive governments in Dhaka had endeavoured to improve tiesbut these efforts fell flat because of India's indifferent attitude. Over one and a half decade had elapsed but none of the bilateral issues had been tackled.13The Indian perception was that Bangladesh had deliberately been adopting an anti-Indian stance and hobnobbing with other countries (China, for instance)to hurt India.The three-day visit of the new Foreign Minister, Mustafizur Rehman to India beginning 26 August 1991 was a significant step in the search for a new relationship,but some of the problems were too complex to lend themselves to easy solutions. India and Bangladesh signed two agreements, one on avoiding double taxation,whose main beneficiaries would be airline and shipping145companies, and another one on extending a Rs 300 million credit-line to Bangladesh to purchase capital goods from India.14The Indian side also assured the visiting dignitory that the Tin Bigha corridor would be handed over by the end of 1991, as all decks had been cleared afterthe Supreme Court judgement. The Minister also discussed with his counterpart, Madhavsinh Solanki, problems relating to the sharing of Ganga waters, thereturn of Chakma refugees from the Chittagong hill tracts, balance of trade and the development of economic cooperation.15 It must be recalled that Bangladeshhad a large trade gap with India, importing goods worth Taka 7,814 million between July 1990-September 1991 and exporting goods worth Taka 1,037 million.16The Foreign Minister's visit was shortly followed by a meeting of the Indo-Bangladesh Coordination Committee in Sylhet when the two sides agreed to stringentmeasures to secure the frontiers against criminals and smugglers.17 But Bangla opinion was worked up over reports that the Indian Border Security Forcewas building an 80 kilometre-long border fence in Jampalpur in the state of Meghalaya. The Bangla press maintained that fencing within 150 yards of theborder demarcation line was a violation of international law.18Despite this repeated surfacing of latent animosity, the Bangladesh Prime Minister, Khaleda Zia, prepared to visit New Delhi in May end. There were a spateof anti-Indian articles in Dhaka on the eve of her visit; nevertheless, the visit itself produced favourable comments and Dhaka believed that "positiveheadway" was made to resolve long-standing bilateral issues. Begum Khaleda was given a warm welcome in India and the talks between the two countries wereheld in a cordial atmosphere. Rao told Khaleda, "We won't let down Bangladesh" and he declared himself in favour of a time-frame for resolving contentiousissues. On her part, Begum Zia thanked Rao for resolving the Tin Bigha issue.19Rao and Khaleda agreed that due emphasis should be laid on formulating a comprehensive and permanent plan for the sharing of water resources within a stipulatedtime-frame. Rao assured Khaleda that pending finalization of such a plan, "some arrangements" would be made to avert any hardship to the people of Bangladesh.The Secretaries in charge of water resources in the two countries were asked to work out the details. The two leaders understood the importance of creatingan atmosphere of mutual trust and understanding to solve the outstanding issues. On the influx of Chakma refugees into Tripura and some adjoining areas,Rao underlined the urgency of the early return of some 50,000 such refugees. India was prepared to allow Bangladesh officials to persuade them to go back.20The question of illegal immigrants and the links between insurgent groups like ULFA elements in Bangladesh came up for discussion between the Foreign Secretariesof the two countries. The two sides decided to146set up a joint task force to deal with the problem of Chakma refugees and illegal immigrants, to be headed by the Home Secretaries of the two countries.21CHANGE AND CONTINUITY: BETTER TIES AMIDST ANIMUSThe Tin Bigha corridor was finally leased out to Bangladesh on 26 June 1992 amidst violence and skirmishes in the state of West Bengal between the policeand the anti-transfer activists that claimed five lives.22 There was some resistance in Kuchlibari and North Dinajpur with the involvement of a few WestBengal politicians. The only party of consequence that opposed the transfer was the Bharatiya Janata Party. But the leasing of the corridor brought reliefto Bangladeshis living on the two sides of the enclave and removed an irritant in Indo-Bangladesh relations. As stipulated in the agreement the southernhalf of South Berubari was handed over to India and in exchange Dahagram and Angopata enclaves were given to Bangladesh. The sovereignty of the corridor,however, remained with India.23The channels of communication between the two sides were opening up. A Foreign Secretaries' meeting in August 1992 resulted in the agreement to revive theJoint Economic Commission co-chaired by the Foreign Ministers. In a way, this was particularly important for Bangladesh as the trade was heavily tiltedagainst it and the surplus accumulated by India stood at $1.3 billion. The two senior officials also discussed land boundary demarcation, exchange of enclavesand possessions that adversely affected each other, the repatriation of Chakmas, illegal migration and terrorist activities as well as transit facilitiesfor India through Bangladesh and prospective joint venture projects.24The issue of sharing water resources was again addressed in what was described as a serious endeavour when the Indian Minister for Water Resources, V.C.Shukla, visited Dhaka on 25-27 August. The two sides were stated to have initiated "a completely new approach" on sharing waters of common rivers, accordingto the Bangladesh Minister for Irrigation, Water Development and Flood Control. The new approach was believed to be based on an understanding that hadbeen reached between Begum Khaleda Zia and P.V. Narasimha Rao during the former's visit in May. Both sides expressed satisfaction with the talks and cautiousoptimism, leaving the actual details to be worked out by senior officials of the two sides.25The Bangladesh Commerce Minister visited India in early August and extended the trade agreement with India for another three years from the date of expiryon 3 October. He expressed appreciation of the resolution of the Tin Bigha issue and expressed the hope that the two other outstanding issues, sharingof waters and the Chakma refugees would be resolved in the same spirit of mutual understanding and cooperation.26147Visiting India in September, the Bangladesh Finance Minister called for greater cooperation among the SAARC countries to develop a concept of collectiveself-reliance and promotion of free trade. Addressing a meeting of Indian businessmen he listed facilities given by his government to foreign investorsand invited joint ventures by Indian businessmen in a range of areas, like cement, fertilizers, automobiles, computers, electronics and agricultural equipment.The presence of substantial number of controls and institutions in India, despite liberalization in many areas, was hampering economic relations and impedingthe expansion of Bangladesh business with India, he remarked.27His talks with Indian government leaders followed a similar line. He requested his Indian counterpart to dismantle trade barriers by reducing duty structuresand withdrawing restrictions from Bangladesh goods and services to narrow down the $1.3 billion trade deficit. He also sought more share of the Ganga waters.The latter reportedly assured him of cooperation in reducing the trade imbalance by liberalizing the import of goods and services from Bangladesh. TheBangladesh visitor described his visit as very fruitful and indicated that joint ventures would be set up in leather, light engineering, electronics, amongother sectors. He had offered fertilizers, newsprint, jute, jamdani sari, hilsa and other items to India at much cheaper rates.28VEXATIOUS ISSUES AND PRIDE AND PREJUDICEEven as these channels of communication were being revived, any number of issues, as we have seen, could suddenly ignite the smouldering embers of enmitytowards India, some of it also due to suspicion and distrust and the involvement of many issues in domestic politics and the internal struggle for power.As we have noted earlier, there were vested interests, particularly the Islamic extremists and those who never took kindly to the Bangla struggle for independence.On this was superimposed the big country-small country syndrome, and so it was not difficult to stir anti-Indian sentiments. This is not to deny that therewere genuine grievances as there often are among neighbours situated similar to India and Bangladesh. But the virulence with which these sentiments wereplayed upon could be ascribed to other factors.Among these was the allegation in a section of the Bangladesh press that India had a hand in a mob attack on the Chinese embassy in Dhaka in early July1992. The Indian High Commission in Dhaka was constrained to protest with the Foreign Ministry against such irresponsible reporting.29 Similarly, the newspaperInqlab, hammered at India for allegedly starting construction of a nuclear power station alongside the Sunderbans area of Bangladesh and warned of destructionof the flora and fauna in the region in case of any accident in future. Indians were poised, no less, for an attack with both water and nuclear weapons,while New Delhi had already brought ruination upon the flora of the Sunderbans by148increasing the salinity of the area with the removal of water from the upper reaches of the Ganga. It had now embarked upon a "conspiracy" to destroy therare wildlife and human habitat.30More serious and substantial was the condemnation by both the treasury benches and the opposition of the Indian policy of "push back" of illegal Bangladeshiresidents in India, which Dhaka described as a policy of "push in". Dhaka was said to have been taken aback when 132 persons, stated to be illegal entrants,were pushed back by Indian border guards on 11 September. Foreign Minister Mustafizur Rahman, speaking in the Bangladesh Parliament on 20 October, didnot accept the Indian contention that a large number of Bangladeshis were living in India illegally. People of a particular community, he charged, werebeing rounded up by India for dispatch to Bangladesh. Such a situation was a threat to peace and harmony in the South Asian region, he said.31The opposition particularly concentrated its fire on para 11 of the joint communique that had been issued on 11 May during Khaleda Zia's visit to India.By incorporating those lines, the Prime Minister had virtually admitted, they alleged, illegal infiltration from Bangladesh into India and demanded itsannulment. The paragraph in question read: "Taking into account problems being caused by large-scale illegal movement of the people across the border,they (the Prime Ministers of Bangladesh and India) expressed their determination to stop illegal movement of the people across the border by all possiblemeans including the existing arrangements and mutual cooperation in this regard."Dhaka's dilemma was apparent. No government could deny substantial illegal movement across the frontier, chiefly of Bangladeshis into India, in search ofemployment and economic improvement. But as the issue was an emotive part of the domestic struggles, it made difficult a solution based on mutual accommodationand cooperation. The complexity of the problem was enhanced by India's difficulties in this regard. It was not always easy to determine whether a personfrom a particular community and a particular language group was an illegal immigrant or a bonafide resident. The BJP's strident stance on the expulsionof illegal migrants tended to communalize the issue and become a vote-catching, agitational gimmick.The Dhaka press was afire with indignation and condemnation, and so were all the political parties, reading the most sinister motives into the Indian action.The only difference perhaps was that whereas the press carried on a shrill campaign against India and most parties, other than the ruling party, apportionedthe blame between India and the Khaleda Zia government, the Awami League concentrated its fire on the Dhaka government, accusing it of selling out nationalinterests to foreign countries. Sheikh Hasina wanted to know what secret deal Khaleda made during her visit to India.32 She joined in the general complaintthat illegally entered Indian goods were flooding the149Bangladesh markets and creating havoc with the Bangla economy. She also sharply denied the Indian allegation about large-scale infiltration of Bangladeshisinto India. What were the Indian border security forces doing so long and why did they not try to prevent such mass exodus of population from Bangladeshto India, she asked?33 The Jatiya Sangsad passed a unanimous resolution condemning India's "push-in" policy, but left the door open for future negotiations.34Operation push-back (meant to send back numerous illegal Bangladeshi immigrants), however, ground to a halt in the wake of mounting pressure, internal,no less than external. A total of 5,000 Bangladeshis were reported to have been deported, 1,700 from Delhi where there are estimated to be 200,000 of them.There was a hue and cry in Bangladesh, leading to its refusal to accept immigrants, despite an earlier agreement. But there were also increasing internalmisgivings about the manner in which the screening was being done. There were allegations of human rights violations and public protest by many Muslimorganizations and non-Muslim politicians also.35 It became a cantankerous issue not just between India and Bangladesh but also internally within India,with various political groups striving to get political mileage out of it from one community or the other. Many illegal entrants secured ration cards orother documents to buttress their claim to stay in India. It was no easy task to devise ways by which genuine residents were not harassed and at the sametime those who had come illegally were identified and sent back.While relations were even otherwise abrasive, the demolition of the Babri structure at Ayodhya brought about further deterioration in public reactions.The Muslim fanatics in retaliation demolished or damaged 118 temples and Hindu places of worship and attacked members of the minority community and burntsome of their houses in Bangladesh, which only demonstrated that fanatics of one hue or another were like birds of a feather.Nevertheless, just as all right-thinking persons in India felt outraged and condemned the vandalism at Ayodhya, a large number of organizations and politicalgroups in Bangladesh, and no doubt every sensible Bangladeshi, condemned the vandalism in Bangladesh, which they rightly saw as an attack on the secularcharacter of Bangladesh society.Begum Khaleda Zia, addressing a function on the occasion of the 44th World Human Rights Day lambasted India for the violation of human rights. The demolitionin Ayodhya, she said, had usurped the religious rights of a large section of the population in India,36 but made no mention of the vandalism in Bangladesh.But there were many intellectuals who made strongly worded statements, many organizations and parties also minced no words in denouncing it.37 The oppositionchief whip Mohammad Nasim said that there was no ideological difference between the BJP of India and the Jamaat Islami of Bangladesh. They were enemiesof humanity and democracy, he said. He also150flayed the Bangladesh government for its "weakness and failure" to protect life and property of innocent people.38Sheikh Hasina was equally unequivocal. She visited many areas that had witnessed communal violence and consoled the victims. "Those involved in arson anddestruction of places of worship in the name of Islam are worse than animals", she said categorically, "they are enemies of Islam. ... Looters have noreligion." She called for resisting the "evil, communal forces" by all means.39The right wing forces also organized a "long march" into India to protest the destruction of the Babri Mosque and "killing of Muslims in India". Some 20,000people were said to have left Dhaka for Jessore on 3 January for a grand rally the next day and to move towards the Indian border. The Dhaka governmenttook special security measures and in the clash that ensued on 4 January when a reported one lakh people (another estimate put the number at 40,000) nearJhekargaacha in Jessore tried to march towards the border, at least five persons were killed and a hundred injured. The march was then abandoned.40The volatile reactions and the ensuing situation led first to the postponement of the SAARC Summit to be held in Dhaka and then to India expressing itsinability to attend the rescheduled summit meeting in January in view of the threats to the Indian Prime Minister emanating from extremist organizationsin Dhaka and the unpropitious security environment. India maintained that its decision meant no lessening of its commitment to SAARC, but the collapseof the January summit engendered more bad blood within the region.41In the ups and downs syndrome of India-Bangladesh ties, there was a nosedive in relations during this period. There was a tough Indian reaction to a resolutionpassed by the Jatiya Sangsad on the Babri issue and the communal outburst there, virtually shelving all bilateral talks. India accused Bangladesh of interferencein its internal affairs and failure to protect lives and property and places of worship of the minority community, a charge denied by the Dhaka government.In any case the bottom had been reached in their relations and the two countries had to find ways of restructuring them.UPWARD CURVE: COMPULSIONS OF COEXISTENCEPhysical propinquity often made greater demands than pride and prejudice or ideological propinquity or antagonism springing from religious passions. Thiswas particularly true of Indo-Bangladesh ties. Over the next few months the two countries made an effort to bump back to some kind of normalcy in theirrelations. As the Bangladesh Foreign Minister put it, the relationship was a little cold, but not so cold as to be freezing, nor so hot as to be boiling.They were mendable and needed to be mended.42 It was, however, the holding of the SAARC Summit in April 1993 and the Indian Prime Minister's readinessto attend it that helped defuse the tensions and start the upward curve in relations.151Narasimha Rao's meeting with Begum Khaleda in Dhaka on 10 April, with the former spelling out some of the steps that he proposed to take in regard to thesharing of waters, indicated the resumption of dialogue on various outstanding issues.Of the three major outstanding issues, the river waters, the illegal entrants and the Chakma refugees, there was some movement forward on the last issue.India and Bangladesh agreed to begin the process of repatriation of 56,000 Chakma refugees from their camps in Tripura within thirty days. This was announcedin Parliament on 12 May by Minister of State for External Affairs, Salman Khursheed, who had accompanied Bangladesh Commerce Minister, Oli Ahmed to Chakmarefugee camps in Tripura. Dhaka agreed, according to the statement, "to accept all tribal Bangladeshi refugees from Chittagong hill tracts based upon theavailable records of both sides and information furnished by the concerned village headmen". Under a five-point agreement Bangladesh agreed to take allnecessary measures that would encourage the refugees to return and restore their homes and legitimate property and assure them that they would live insafety and security.44Underliming the difficulties in any attempts at improving India-Bangladesh relations was the virulent campaign against Oli Ahmed in a section of the Bangladeshpress. The minister told a press conference, that he was pained at the canards dished out in a section of the Bangladesh press during his visit to India.He was a freedom fighter, he said, and took a realistic view of things (Indeed, this might have been the real problem, that he was a freedom fighter andwas resented by those who had never taken to the freedom struggle). Answering a query that no other minister who went to India had been subjected to somuch criticism, he said that the reason could be that he was a freedom fighter. In any case, he was against doing anything that would hamper the improvementof relations between India and Bangladesh. He had had a 45-minute talk with Narasimha Rao and was told by Rao that water was life and that no hardshipshould be caused to the people of Bangladesh. He had expressed surprise that the issue had not been resolved despite good intentions on both sides.45The repatriation of Chakma refugees began on 15 February 1994 and some 1,841 Chakma tribals returned to Chittagong hill tracts. The second phase began on21 July with the projected return of 13,767 refugees by 5 August.46 Even though the problem had not been fully resolved the sting had been taken out.TASLIMA NAZREEN AND INDIAThe Bangladesh Muslim fanatics and extremists were dismayed and enraged when a doctor-turned literateur, Taslima Nazreen wrote a novel, Lajja, half documentaryin content, describing the travails of a Hindu family in Bangladesh and squarely blaming Muslim fanatics for the terror over and the killings of the152minority community. Their cup of rage brimmed over when Taslima suggested in an interview published in the Statesman 47 during her visit to Calcutta thatthe Sharial needed certain adjustments, but denied that she made any critical comments against the Quran. But the so-called fundamentalists in Bangladeshwere not bothered about any such niceties and, as in the case of Salman Rushdie by Iranian clerics, issued a fatwa and pronounced a death sentence on heras well as a price on her head. Unlike Rushdie, Taslima did not recant or apologize.The Dhaka government decided to prosecute her for blasphemy. Fearing the denial of a just trial and attempts at assassination, she escaped to Stockholm48with the help of the Swedish government and has been living in Europe since then. It must be mentioned in passing, to their credit, that secular elementsin Bangladesh took on the fundamentalists with a counter-agitation, resulting in a clash in which one person was killed and several hundred injured.49Several Muslim writers and intellectuals of Bangladesh also defended and supported Taslima, even though some of them believed that she was misguided increating this kind of controversy.50But Taslima was unrepentant. She had raised some fundamental issues and was willing to return to Dhaka if she was assured a fair trial. She advocated equalityfor women and rebelled against the mullahs' dominance and interpretation of religious laws in a way that perpetuated male and mullah dominance. She hadalso raised her voice against communalism and fanaticism and for humanism.In the nature of things and the issues she had raised it was inevitable that they would spill over into India. A segment of the Muslim opinion in Indiawas no less angry than their Bangladesh co-religionists at what they regarded as an attack on their religious beliefs. The liberal Muslim opinion, perhapsnot unusually, was both muted and ambivalent. But undoubtedly Indian opinion by and large admired Taslima for her courage and secular views. Of coursethere was a section of the so-called "genuine secularists" who were delighted at Taslima's description of the Hindu minority's travail at the hands ofthe "fundamentalists". But Taslima denounced "Hindu fundamentalists" equally vehemently. "I am against all forms of fundamentalism", she said. "If theBJP decides to misuse it, I cannot help it but that will only prove their own hypocrisy and dishonesty. I did not fail to hate them also in my book. Theyshould note it." She asserted that it was her mission to write for eliminating religion-based politics and communalism and for establishing secularism.51There was also a small group of literary critics who sneered at Taslima's literary attainment and claimed that Lajja had achieved fame because of the controversysurrounding it. Such a facetious approach was not shared by a great many in the intelligentsia in India. The government, however, adopted a hands-off attitude.Its misguided fears and pusillanimity in the face of such ticklish issues were evident from the denial of a visa to Taslima. The153government's timid response arose from the worry about a minority backlash in India. Even though the government did not cover itself with glory in the matter,the Bangladesh writer did not become an issue between the two countries.CONCLUSIONThe India-Bangladesh relationship can be best described as an up-and-down relationship, but our discussion of the course of this relationship should havemade it clear that there were perceptible limits to both the ups and the downs. The relationship was destined to remain, for a while, somewhat acerbicand uncertain, somewhat prone to tension but rarely so clogged as to render interchange and interaction a futile exercise. It is equally true that manyissues had become enmeshed in domestic politics, perhaps much more so in Bangladesh than in India.In India the illegal migrants from Bangladesh were now a ticklish problem, with some groups making one kind of political capital out of it by demandingwholesale deportations, while others hoped to get some political profit by resisting all attempts at identification and deportation. Chronic food shortagesand natural disasters sent many families in Bangladesh out into India, hoping for better prospects. There were concentrations of them in Delhi, Bombay,Calcutta and some other parts of West Bengal. Though in Indian politics this was still a very limited issue, in the domestic politics of Bangladesh suchoutstanding issues exercised a far more volatile impact. Every outstanding issue not only added acerbity to the ties between the two countries, but alsomuch more to the turbulence within Bangladesh.A new dimension was added to the internal turmoil in Bangladesh with the entire opposition ranged against the government. A political deadlock persisted,with the opposition demanding the resignation of the Khaleda government and fresh elections under the aegis of a interim government, a demand that BegumKhaleda Zia was unwilling to accept. One hundred and forty seven members of the opposition in Bangladesh parliament resigned from the House on 28 December,but the Speaker of Bangla Parliament did not accept the resignation.52 The maximum Khaleda was prepared to accept was to resign one month before the elections,but the opposition was in no mood to accept the suggestion.Even if some via media could be found to resolve the stalemate, the political scenario was likely to remain muddied for many years. Hardly a propitiousscenario for a calmer approach to tackling the outstanding issues between India and Bangladesh. Nevertheless, both sides could take a number of steps tomake the relationship less volatile. Undoubtedly India must do something to relieve Dhaka's anxiety about the dry threat during the lean season of theGanga and both sides needed to show greater flexibility and engineering and technical ingenuity to meet this problem that posed a threat both to Indiaand Bangladesh.154India could not dismiss Dhaka's problem and vice-versa. Ways must also be found to give a more balanced and productive content to India-Bangla economicties that could help rectify the present rather one-sided trade pattern between India and Bangladesh. It would also have been helpful if Bangladesh didnot trace the roots of every trouble to the machinations of New Delhi. Gradually both sides were learning to take a less inflamed view of each other. Itwas being realized that proximity need not have only disadvantages.POSTSCRIPTThe standoff, in fact a complete deadlock between the BNP government led by Khaleda Zia and the concerted opposition led by Hasina Wajed and her party AwamiLeague was finally resolved through the elections held in June 1996. The BNP's main election plank, the anti-Indian card failed to work with the electoratethe way it apparently had worked earlier. The Awami League emerged as the single largest party with 147 seats while the BNP could muster only 116 seats.The Jatiya Party floated by the imprisoned ex-President (later released) Hossain Mohammad Ershad, secured 34 while three went to Jamaat-Islami.53 SheikhHasina became Prime Minister in what was an amazing come-back from political wilderness for nearly twenty-one years. Daughter of Sheikh Mujib, she andher sister were the only survivors in the massacre of the family in 1975.The change in government in Dhaka was preceded by a change of government in New Pelhf. The new government in Delhi was committed to the improvement of relationswith neighbouring countries. The two countries got down to earnest negotiations with business-like dispatch. The new External Affairs Minister, I.K. Gujral'skeenness to resolve problems with Bangladesh were matched by the Bangla Foreign Minister Abdus Samad's earnestness in this regard. In a shrewd move Gujralinvolved West Bengal Chief Minister, Jyoti Basu as the chief negotiator from the Indian side on the "core" issue, as far as Bangladesh was concerned, thatis, sharing of the Ganga waters. Shrewd because West Bengal was to be chiefly affected by an accord on this issue. If Basu reached an agreement with theBangladesh side, it was less likely to invite virulent criticism in India.The two sides did reach agreement on the water issue, and the historic accord was signed on 14 December 1996 during Sheikh Hasina's first visit to Indiaas Prime Minister. The thirty-year treaty provided for a 50-50 share of the Ganga waters up to a certain level of water, and if the level fell below thata consultative machinery would be set in motion to decide on their mutual share.54The Bangladesh Prime Minister believed that "from trade and commerce to joint venture initiatives, to collective harnessing of common resources, windowsof opportunities are waiting to be opened." She spoke of the need to overcome "poverty and stagnation" without remaining "prisoners of the past" and to155"move ahead in a fast changing world where the interests of the economy and ecology have overtaken politics and conflict." Recalling the spirit of 1971she thanked the people of India for the "sacrifices made by them during our war of liberation."55The accord took, for the time being at least, the tension out of India-Bangladesh relations and was widely celebrated in Bangladesh. However, let therebe no mistaking, there were forces and groups in Bangladesh who would use it as another stick to beat India and to settle scores with Hasina. Begum Zia'scampaign against the accord was an indication of the latent hostility. In India too, the BJP expressed its misgivings and there were murmurings from CongressParty members in West Bengal who alleged that Bengal's interests had been sacrificed.Jyoti Basu, however, scoffed at the criticism as ill-informed. He said that the interests of Calcutta port had been better secured through the guaranteedflow of 40,000 cusecs for seven ten-day periods in January-February and 35,000 cusecs for three such blocs in March-May. No such guarantees were therein the 1977 agreement, he asserted.56The question might well be raised: why was not this kind of solution found earlier? Political will may have been lacking. But it could also be that thepsychological moment was absent earlier. Most of the earlier regimes in Bangladesh drew sustenance from baiting India. They would have gratuitously acceptedthe very substantial concessions made by India and yet continued with their anti-India agenda. The new government is not committed to an anti-Indian programme.Both sides, therefore, seized the opportunity to begin a new course in India-Bangladesh relationship.NOTES1. For relations and problems before 1989, see the author's India's Foreign Policy, Vikas Publishing House, 1987 and 1994 and India and the World, SancharPublishing House, 199C.2. Muhammed Shamsul Haq, Bangladesh in International Politics, Sterling Publishers, New Delhi, 1993, pp. 86-128.3. Holiday, Weekly, 29 May in POT, 4 June 1991.4. See also V.P. Dutt, India's Foreign Policy, Vikas 1987, Chapter on India and Bangladesh.5. Muhammad Shamsul Haq, n. 2.6. Times of India, 6 January 1990.7. The Hindu, 7 May 1990.8. The paranoia in some circles in Bangaldesh was amply demonstrated by the allegation made by the so-called Freedom Party, a Bangla party of a retiredgeneral whose record in Mujib's assassination was none-too-bright, that India was hatching a conspiracy to foil the holding of elections. POT quoting BangladeshObserver, 2 March 1991, p. 23.9. Summary of World Broadcasts (SWB), FE/1010,B/l, 2 March 1991.15610. Ibid., FE/1013, A3/5, 6 March 1991.11. POT, 30 May 1991, pp. 1269-70.12. Ibid., p. 1272.13. POT, 31 July 1991, p. 1880.14. All India Radio (English), 27 August 1991.15. SWB, FE/1167,3 September 1991, p. A3/10.16. POT, 17 January 1992, p. 176.17. SWB, FE/1164,3 September 1991, p. A3/4.18. POT, 17 February 1992.19. Ibid., 2 June 1992, pp. 1444-5.20. Times of India, 27 May 1992,21. Hindustan Times, 28 May 1992.22. The Statesman, 27 June 1992.23. Bangladesh Foreign Minister's statement before Bangla Parliament, Hindustan Times, 30 June 1992.24. Daily Star (Dhaka), 23 August in POT, 28 August 1992, p. 2450.25. Bangladesh Times, 27 and 28 August 1992.26. POT, 17 August 1992, p. 2232.27. Times of India, 4 September 1992.28. Bangladesh Observer, 5 September 1992.29. Hindustan Times, 8 July 1992.30. POT, 17 August 1992, p. 2234.31. Hindustan Times, 21 October 1992.32. Hasina's speech reported by the United News of Bangladesh, POT, 16 October 1992, p. 3079.33. "Speech in the Bangla Parliament as reported in the Morning Sun, POT, 24 October 1992, p. 3206.34. POT, 28 October 1992, p. 3255.35. Times of India, 3 November 1992.36. Daily Star, (11 December) in POT, 24 December 1992, p. 3741.37. Times of India, 29 December 1992.38. Bangladesh Observer, 14 December 1992.39. Daily Star (14 December) in POT, 28 December 1992, p. 3777.40. Hindustan Times, 5 January 1993.41. See The Hindu and Indian Express for December 1992 and January 1993.42. Ibid., 2 February 1993.43. Khaleda Zia's press conference, Bangladesh Observer, 13 April 1993.44. The Hindu, 13 May 1993.45. Jyonal Abedin from Dhaka in Hindustan Times, 22 May 1993.46. See Times of India, 24 January and Hindustan Times, 21 July 1994.47. Interview with Sujata Sen, The Statesman, 9 May 1994.48. The Hindu, 11 August 1994,49. Hindustan Times, I July 1994.50. Times of India, 14 August 1994.51. Interview with India Abroad News Service, Hindustan Times, 29 September 1994.52. See Times of India, 29 and 31 December 1994 and 24 February 1995.53. Times of India, 23 June 1996.54. The Hindu, 15 December 1996.55. Times of India, 14 December 1996.56. Hindustan Times, 14 December 1996.157III RELATIONS ACROSS THE PALK STRAITSIndia and Sri Lanka have far too much in common in history, geography, myths and beliefs and ethnicity to avoid close interaction. Such interaction in thenature of things leads to ups and downs in relations/ being a part of the process of adjustment between neighbours of different size with peculiar mutualproblems. The background and relations until 1988 have been discussed by this author in his earlier volumes.1 The larger as well as more specific dimensionsof their relationship may be noted, for the two are very much interrelated.The broader issue has all along been that of India's security perceptions and the sensitivity of the Sri Lankans (or Ceylonese as they were called earlier)over the perceived limitations placed on their sovereignty, a tension common to big neighbours bordering smaller countries. Since independence India'spolicy towards the South Asian region has been directed towards the exclusion of foreign intervention and the resolution of problems among countries ofthe region bilaterally. This perception has been common virtually to all political parties and all the governments that have ruled in New Delhi. In thecase of Sri Lanka, this led to considerable acrimony at times, for instance on the issue of granting facilities to the Voice of America on Sri Lankan territoryand facilities to the U.S. in the strategic port of Trincomalee.Sri Lanka has resented the application of what it regards as India's version of the Monroe Doctrine as an unacceptable fetter on its sovereignty. Many SriLankans have sometimes drawn even a sinister conclusion to India's security assertions. Reflecting this view a well-known and well-regarded Sri Lankanacademic believed that "India's security stake in Ceylon and her stake in the Island's international alignment is real enough to make an Indian occupationof Ceylon a distinct possibility in certain contingencies, such for instance, as the appearance of a hostile power in the Indian Ocean area, or pursuitby Ceylon of a foreign policy clearly injurious to India's interests."2 The author believed that the experience of the Indian Peace keeping Force in SriLanka (IPKF) bore out the correctness of this perception.Many articulate persons in India would demur. Not against the perception that India is vitally concerned with its security interests and is vehemently againstany foreign intrusion in the area, but against the belief that India would send an army of occupation into Sri Lanka. Apart from various other reasons,including the lessons of history advising against such a course, India just did not have the strength or will power to undertake such a venture. Indiacould adopt many other measures to deter Sri Lanka from inviting foreign military presence with in its territory or a foreign power from establishing sucha presence, but to believe that India would send forces of occupation was altogether fanciful.To paint the IPKF in the colours of an occupation force world be to mock at history. It was sent after a formal agreement with the Sri Lanka government.All158its operations were against the Liberation Tigers of Tamil Eelam (LTTE), whose depredations were endangening the very integrity of the island nation. Opinionis divided even in India whether it was advisable to have sent the IPKF at all, but it is undoubted that the IPKF helped preserve the unity and integrityof Sri Lanka at considerable price to India in men and money.As in Nepal, in the nature of things Sri Lankan nationalism was an easily excitable factor against India. Such, for example, was the claim, made by someSri Lankan analysts that at "a top secret meeting at which Prime Minister Indira Gandhi was present", a plan for an air borne invasion of Sri Lanka wasdiscussed. The source quoted for such a "top secret meeting" was a magazine called "India 2000."3 If this is the only evidence produced for such a majorassertion, it can only be put down to the feverish working of hyper-nationalism.In fact there is no evidence available of any such meeting. It should also be noted that Mrs. Gandhi was the Prime Minister and just could not have beenpresent at such meetings, she would have to be presiding over them.The "security dilemma of a small state" was compounded by the ethnic dimension of the relations between the two countries. Some of its aspects were discussedin the author's earlier volume. But one very significant difference must be noticed again. The problem that the two countries grappled with in the 1950sand 1960s was dissimilar to the crisis faced in the 1980s and 1990s.There are nearly a million Ceylon Tamils, as they were described, the history of whose emigration to Sri Lanka is still being explored, including the hypothesisthat they predated the Sinhalese. There are another million Tamils who went as indentured labour and in similar occupations during the British rule there.The former are concentrated in the northern region and the latter in the eastern. Initially, it was the problem of the latter that dominated relations,primarily the question of the citizenship and the repatriation of those who did not qualify for citizenship. Subsequently the Ceylon Tamils came to occupycentre-stage as did the issue of Sinhalese dominance and Tamil rights and by transference its impact on India-Sri Lanka relations. The difficulties wereaccentuated by Sinhalese nationalism, sometimes bordering on chauvinism, resulting in murderous rioting against the Tamils, as well as the struggle ofthe Tamils which ensued in the dominant position of the LTTE. The latter not only engaged in armed struggle for total independence but was also insensitiveand intolerant of any other opinion and of any other group.4Indian policy towards Sri Lanka all through this period and subsequently, even under different governments in New Delhi, had three central components. Indiastood for the unity and integrity of Sri Lanka and was not willing to countenance any vivisection of the island. At the same time India favoured a substantialdegree of autonomy for the Tamil-majority areas and a life of respect and dignity for the Tamils in Sri Lanka. Thirdly, India was also unalterably opposedto any foreign intrusion or intervention in Sri Lanka under any garb.159This approach has remained constant, no matter which party or coalition ruled India.It was under these premises that the Indian Peace Keeping Force (IPKF) was sent to Sri Lanka and bore the brunt of the fight against the Liberation Tigers.Junius W. Jayewardene, then President of Sri Lanka, had defended the accord, even after the decision on the withdrawal of the IPKF, as one that protectedthe security interests of both India and Sri Lanka. He put it in the context of the alleged earlier Indian support to the Tamil militants in Sri Lankawhich ceased after the accord was reached. He also quoted the then Indian High Commissioner in Colombo, J.N. Dixit, as saying that "we would never allow"Jaffna to be taken by Colombo by force.5The charge of assistance to Tamil militants, allowing them to establish camps in Tamil Nadu and providing arms to them, sullies India's image. But in fairnessthe circumstances and the internal dimension in India of the Tamil problem of Sri Lanka must also be kept in the picture. It was a period when Sinhalesemilitancy was at its height and the Tamils in Sri Lanka were facing oppression and pillage, insecurity of life and property and even cultural dominancethrough the language policy of Colombo. Not only were there an increasing number of refugees in Tamil Nadu from Sri Lanka but Tamil Nadu itself was onfire at what was perceived to be a grave threat to the lives and property of Tamils in Sri Lanka because of their ethnic origin. No government in Madrasor in New Delhi could ignore the developments without risking a major explosion in Tamil Nadu, not excluding violence and alienation on a large scale.In' any case by 1989 Jayewardene had been succeeded by R. Premadasa as President. The new President had all along been hostile to' the accord that broughtin the IPKF. He regarded it, as did a very large number of Sinhalese, as an unacceptable infringement of Sri Lankan sovereignty; nor was his attitude towardsIndia very positive. On 1 July 1989, speaking at a Buddhist temple on the outskirts of Colombo, he demanded the immediate withdrawal of the IPKF 6 andreminded India of Rajiv Gandhi's promise on 30 July 1987 (in the Lok Sabha) that the force would be withdrawn immediately on demand by the Sri Lankan government.New Delhi, however, wanted the full implementation of the accord to pave the way for the withdrawal of the IPKF, that included devolution of power to theTamil Provincial Council as envisaged in the India-Sri Lanka Accord.7.The process had been started with the passage of a bill on devolution on 26 May 1989 but had yet to be implemented. Meanwhile Premadasa had opened negotiationswith the LTTE and the communiques issued after each round of talks had a decidedly anti-India tone.8 Subsequently it transpired that the Premadasa governmenthad even supplied arms to the LTTE to keep the IPKF at bay9 (For such follies Premadasa paid a heavy price when his own life was taken away by suspectedLTTE militants). In any case, the entire political and160diplomatic effort of the Colombo government was focused on securing the withdrawal of the IPKF.A partial withdrawal began by the end of July 1989 but there was considerable divergence of views on the implementation of the Provincial Council for Tamils.A major diplomatic breakthrough was achieved when the two countries agreed on 18 September in Colombo on the time-table for the withdrawal of the IPKF(to be possibly completed by 31 December), devolution of power to the North Eastern Provincial Council and steps for the safety and security of the Tamilpopulation.10 But the problem was far from resolved. Premadasa's dissatisfaction with the agreement was apparent from his absence (as also of the ForeignMinister) during the signing of the agreement.11Before the year ended the Congress Party had lost the parliamentary election and a National Front government had come into power with V.P. Singh as PrimeMinister. The IPKF had not yet fully withdrawn. The Premadasa government stepped up its pressure on New Delhi for immediate withdrawal of the Indian force.At first Colombo dangled the promise of a friendship treaty to substitute for the withdrawal of the IPKF.12 Shortly thereafter Colombo took the view thatno friendship treaty could be signed while the Indian forces were on Sri Lankan soil as it would be regarded as an unequal treaty signed under duress.13The Sri Lankan Foreign Minister even accused RAW (Research and Analysis Wing) of India of attempting to destabilize Sri Lanka. The IPKF withdrawal wascompleted before the end of March 1990. But the friendship treaty was stillborn. Various drafts were exchanged but Colombo was not really interested insigning any such treaty with India. 14 Its main objective was to secure the withdrawal of the IPKF and that had been achieved.In its endeavour to propitiate the LTTE, the Sri Lankan government decided to initiate legislation to dissolve the North Eastern Council, hitherto headedby Varatharaja Perumal, and hold fresh elections, as demanded by the Libration Tigers. Perumal and his colleagues had already left the island, fearfulof violent retaliation by the LTTE, as had been their wont with all rivals.15But the chickens came home to roost almost immediately. The LTTE was waiting for the withdrawal of the IPKF and it was no surprise that the Colombo-Figerstalks soon became deadlocked and heavy fighting ensued. The midsummer madness took a heavy toll in casualties and suffering of the northern copulation.16While Prime Minister V.P. Singh declared that Sri Lankan Tamil guerrilla groups would not be allowed to operate from Indian soil, he also autioned againstexcessive use of force by the Sri Lankan trooops and told lewsmen that India's concern about the humanitarian aspect had been conveyed o Colombo.17 Inthe final analysis, the difference in policy with the change in government in New Delhi was only nuances of articulation, not a substantial one 'f approach.161The Tamil problem was complicated by the emerging tension between the Tamils and Muslims in the eastern district. In retaliation of the massacre of Muslimsin two mosques, the Muslim militants killed a number of Tamils.18 A Muslim leader estimated that 730 Muslims were killed between 11 June 1990, when thefirst massacre took place, and mid-August. Since the LTTE regarded the Muslims as part of the Tamil population, it expected them to fall in line like theTamils in the North, and their failure to do so invited the wrath of the Liberation Tigers.19 But the killings did not remain one-sided. On 10 Septemberfifty Tamils were hacked to death by Sri Lankan troops and Muslim home guards in Batticaloa district. 20 However, the fighting gradually subsided and Muslimand Tamil political leaders and groups reached agreement on the controversial issue of the merger of northern and eastern provinces,21 a key demand ofthe Tamil leaders. But the LTTE remained hostile and under its ultimatum the Muslims fled in thousands from the northern and north-western districts dominatedby it.22A major development in India-Sri Lanka relations was the dastardly assassination of Rajiv Gandhi at Sriperumbudur. The manner in which he was killed bya suicide squad was disturbingly reminiscent of LTTE's methods though the LTTE made some weak denials of any involvement. It was widely believed in Indiathat he was killed at the behest of the LTTE, despite, not very stout, denials by the latter. In an interview with an Indian newspaper, one of the so-calledintellectual mentors of the LTTE, K. Elaventhen, while denying LTTE hand in the assasination, asserted that Indira Gandhi was "sympathetic and during hertime "we got ample training, arms and other help", but that things changed under Rajiv Gandhi and finally help stopped entirely in 1987.23 There was wide-spreadsentiment against the LTTE which was suspected of having no compunction in finishing off its perceived opponents. Already in March the Sri Lankan strongmanand Defence Minister Ranjan Wijeratne had been killed in a bomb explosion in Colombo that again was generally believed to have been the handiwork of theLTTE. (In parantheses it might be foretold that President Premadasa was killed in a manner resembling Rajiv Gandhi's assassination and still later thePresidential candidate Gamini Dissanayake was done to death.)The LTTE lost heavily in sympathy not only elsewhere in India, but in Tamil Nadu itself, and the government was pressed to ask for LTTE supreme Prabhakaran'sextradition to stand trial for the murder of Rajiv Gandhi. A new government headed by P.V. Narasimha Rao took office in New Delhi, but India-Sri Lankarelations remained somewhat acerbic and mercurial. Although in a very limited way, on the positive side after protracted preparatory exercises spread overseveral months, at the conclusion of the visit of the Sri Lankan Foreign Minister, India and Sri Lanka set up on 29 July a joint commission, headed bytheir Foreign Ministers, to provide an institutional framework for expanding bilateral cooperation.162The then External Affairs Minister, Madhavsinh Solanki, believed that the commission could have a major catalytic role if invested with the necessary politicalwill. But significantly, noting that the day was also the fourth anniversary of the India- Sri Lanka Agreement signed by Rajiv Gandhi and Jayewardene,Solanki made it quite clear that India continued to consider it as the basis of the current phase in bilateral relations.24To India the agreement had not lost its validity, and New Delhi did not fail to emphasize the need for full implementation of the 13th amendment to theSri Lanka Constitution that envisaged the devolution of powers for the north-east region. This could hardly have been music to the ears of the ForeignMinister from Colombo, as most recent comments there had stressed the datedness of the accord. Solanki also reiterated New Delhi's resolve not to allowactivities from its soil that would militate against Sri Lanka's territorial integrity. India and Sri Lanka had also to address themselves to the problemof the return of some 200,000 Tamil refugees in India.It may also be noted that the interest in India in Sri Lankan affairs had waned very considerably, together with the warmth that had characterized relationsbetween Rajiv Gandhi and Jayewardene. India also had little enchantment left with the LTTE and preferred the involvement of other Tamil groups in the searchfor a peaeful solution to the island's ethnic problem.Both sides faced painful dilemmas in dealing with the major problem between them, the dilemmas for India being no less acute than for Sri Lanka. India couldnot pretend that it had nothing to do with Sri lanka's ethnic problem. There were too many linkages between the Tamils of the two sides for India to justwash its hands of the matter. This did not justify the supply of arms to the Tamil groups in Sri Lanka, but it must also be kept in focus that repeatedriots and atrocities agaist the Tamils in Sri Lanka by the Sinhalese chauvinists and the indifference shown to their plight by the army created a volatilesituation in Tamil Nadu. Rajiv Gandhi tried to enforce peace and a place of honour for Tamils through an agreement with Colombo but was stymied both byLTTE duplicity and the determination and the intransigence of the Colombo administration.Indeed the wisdom of sending India's peace-keeping troops to Sri Lanka was questionable and this writer was among those not too enthused about the decision.But it is equally possible that had the post-Jayewardene Colombo administration cooperated with the IPKF, the LTTE might have been licked in another sixmonths. The Sinhalese, however, looked upon the presence of Indian troops as an affront to Sri Lanka's sovereignty. The Premadasa regime went even furtherand, as revealed by the former National Security Minister, Lalit Athulathmudali, secretly supplied arms to the LTTE to fight the IPKF. The IPKF had gonethere to uphold the unity and integrity of Sri Lanka, and suffered163nearly a thousand casualties in the process, besides incurring expenditure of millions of rupees.25Inevitably relations between the Premadasa government and New Delhi were marked by coolness and wariness The expulsion of an All India Radio correspondenton charge of sending a false report, despite an apology that it was unintentional, in a way was an indication of the ice that had entered the state ofrelations between the two. This ice was equally evident in the subsequent collapse of the SAARC Summit that was scheduled to be held in Colombo in November.It was a particularly low point in India-Sri Lanka ties. Both the Premadasa government and the Narasimha Rao regime eyed each other with very considerablesuspicion and distrust. India was sore with the less than spectacular manner in which the IPKF had to be withdrawn from Sri Lanka after what New Delhiperceived as the sacrifices made by the Indian force to maintain the unity and integrity of Sri Lanka. Colombo, on the other hand, fumed at what it perceivedas an Indian attempt at overlordship through the Tamil connection. In the prevailing atmosphere questions were also raised about the security of PrimeMinsiter Narasimha Rao in case he went to Colombo for the SAARC Summit that was scheduled for 7-9 November.Some mistakes were made by Colombo and some by India. Colombo was a little clumsy in its manner of inviting the Bhutanese King to the Summit. Somewhat hurt,the King excused himself from attending the Summit on he ground of prooccupation with internal problems. New Delhi used the Chogyal's absence as an excuseto insist that the heads of state or government of all member countries must participate for the Summit to be held. The Pakistani Prime Minister, NawazSharif and the Bangladesh leader, Khaleda Zia, had reached Colombo and the former grabbed the occasion to deliver a diatribe against India.There was no mistaking Colombo's anger at the collapse of the summit, for which it had made elaborate preparations and squarely blamed New Delhi for thedebacle.26 The Indian move was ill-advised and graceless. It hurt not just India-Sri Lanka ties but, unnecessarily, SAARC too. It put into question India'scommitment to regional cooperation. It also unnecessarily showed India in an unflattering light.Yet the interaction between the two could not be reduced, much less effaced. The situation is such that geographically, not to speak of ethnically, Indiahas to interact closely with all its neighbours. Neither India nor Sri Lanka could afford to adopt an attitude of "I will not talk to you" or even of benignneglect, no matter what the mutual grievances. Shortly after the collapse of the SAARC Summit and as the immediate anger dissipated somewhat, efforts weremade by the two sides to give a more positive direction to their relations. The then Sri Lankan Foreign Minister, Herald Herat, visited India (5-7 January1992) on a fence-mending mission. Already before his visit, the Foreign Minister had described Sri Lanka's relations with India as "absolutely cordialand friendly".164He was replying to charges by the opposition in parliament that the government had allowed relations with New Delhi to deteriorate. Anura Bandarnaike, thenof the Sri Lanka Freedom Party, giving examples of contentious issues that had arisen from 1977 onwards, including the Trincomalee port and the Voice ofAmerica radio station to illustrate his point, criticized the government, saying "You have been very consistent in your foolishness."27Tensions were defused somewhat with the convening of the SAARC Summit in Colombo on 21 December and with the Indian Prime Minister attending it.2S Thishelped soothe the ruffled sentiments of the Sri Lankans and to renew India's commitment to SAARC. The diffusion of tensions made it possible for the threadto be taken up again and for the promotion of bilateral ties.A well-represented delegation from Sri Lanka participated in the two-day India-Sri Lanka joint commission in its first meeting in the first week of January1992. On the political side the talks converged on the need for a negotiated political settlement within the ambit of the unity and integrity of Sri Lanka.In the commission itself the two sides reviewed the trade and investment possibilities and increased cultural, academic and scientific exchanges.29 Thecommission also reviewed the modalities for the repatriation of Sri Lankan Tamil refugees in India, beginning towards the end of the month. It was anticipatedthat the first batch of some 5,000 of an estimated 200,000 refugees would be repatriated to Trincomalee towards the end of the month.30The joint statement at the end of Herat's visit made no mention of the Indo-Sri Lanka accord, which greatly soothed the ruffled feelings. Colombo believedthat sadly it was Rajiv Gandhi's assassination that turned the tables and brought about the transformation hi India's policy 31 The fact is that it wasRajiv Gandhi who had set in the change. It was Rajiv who reduced and brought about the cessation of any arms training or supply of arms to the Tamil militantsand it was Rajiv who put tremendous pressure on Prabhakaran and whose forces fought there for nearly two years to preserve the unity of Sri Lanka. In anyevent, relations improved very considerably and tensions eased to make way for a more relaxed relationship.Perhaps a marc balanced view was provided by Mrs. Chandrika Kumaratunge, then in the working committee of the Sri Lanka Freedom Party (SLFP), headed byher mother (srimavo Bandaranaike), and now Prime Minister of Sri Lanka whose husband also became a victim of extremist violence, but of the JVP variety.Her party, she explained, had originally supported the agreement, but was turned off by the large-scale induction of the Indian army. "We were given tounderstand it would be 5,000 odd. But it became one lakh and caused a scare that India might take over Sri Lanka", she said. The Rajiv-Jayewardene agreement,when signed, offered "a logical, rational solution." It was one way of preventing Sri Lanka from breaking up. If it did not work, it was because the Jayewardeneadministration was not sincere, Chandrika told165Mohinder Ved of the Hindustan Times. The Premadasa government, she asserted, which actively helped the LTTE to collect arms, fight the Indian army, andoverwhelm rival Tamil groups, was actually taken for a ride by the LTTE.It was her view that a dynamic policy of cooperation must govern India-Sri Lanka relations, rather than the present ones which were "good, simply becausethe relationship is inactive". Not belonging to the political elite that suffered from the India mania, she said, the "India factor" had to be taken intoconsideration in Sri Lanka's international relations. It should mean a healthy relationship of cooperation and understanding. Sri Lanka, she pointed out,had "a proud history of being independent and non-aligned" and had "no desire to be dominated".32PRESIDENT PREMADASA'S VISITA further effort was made to infuse a little more warmth in India-Sri Lanka ties at the official level with the visit of President Premadasa on 10 October1992, but it also revealed the gap in the perceptions of the two sides. The Sri Lankan President came as the Chairman of the SAARC and stressed variouseconomic steps that could promote economic development and cooperation. The concerns of the Indian side were made clear when President Shankar Dayal Sharma,while speaking at the banquet he hosted for the visiting guest, called for an effective devolution of power within the framework of a united Sri Lankafor an early solution of the ethnic conflict in the island republic.33 Premadasa was not particularly keen to discuss in any great depth the Tamil problem.His focus was on SAARC and how its development could be buttressed as an achievement under, his chairmanship of SAARC. He spoke about poverty alleviationprogrammes, the signing of SAPTA (South Asia Preperential Trade Agreement) at the next summit in Dhaka, and the institutionalizing of the South Asian DevelopmentFund that was mooted at the seventh SAARC summit.34The joint statement on 3 October expressed the belief of the two countries about the validity of SAARC as a forum for achieving social goals and developingthe region's human resource potential. Cooperation among SAARC countries could substantially reduce terrorist activities in the region, the statement said.President Premadasa stressed during his talks with Prime Minister P.V. Narasimha Rao his government's commitment to a peaceful, negotiated settlement ofthe ethnic issue by involving all parties concerned. He said that the operations by the security forces in the north to ensure protection of innocent civilianswould continue. Narasimha Rao expressed the hope that a fair and equitable settlement to fulfil the legitimate aspirations of the Tamil commmunity withinthe framework of a united Sri Lanka would be achieved through the efforts of the people of the island themselves.35166The new element in the India-Sri Lanka relationship was the growing alienation of the LITE from Indian opinion. The hiatus had developed in Rajiv Gandhi'stime but had decisively widened after his assassination. The manner in which the LTTE had kept the IPKF at bay and its successful suicide-human bomberattacks against many Sri Lankan leaders and Rajiv Gandhi had made it even more arrogant and more intolerant of opposition. The LTTE's changing self-perceptionalso embroiled it in even more acrimonious incidents with India. A more significant incident was the death of a senior LTTE leader, Sathasivam Krishnakumaralias Kittu, LTTE's Jaffna area commander, in a ship intercepted by the Indian navy. The ship was carrying arms and when intercepted Kittu and some ofhis colleagues blew themselves up with explosives to escape capture by the Indian authorities.36 The LTTE made quite an ado about Kittu's death and the"illegal" interception in international waters and wanted, through a petition at the United Nations headquarters, the formation of a special UN tribunalto investigate the circumstances of his death and the forcible diversion of the ship to Indian shores.37Sadly but equally true was the inability of India or the regime in Colombo to protect other Lankan Tamil groups from the violence and fury of the LTTE.Sometimes one side and sometimes the other sacrificed one or the other of them in the expedient but elusive quest for an accommodation with the "Tigers",even though many of them could have played a moderating role and almost all of them wanted India to play a role that extended on one side to the protectionof the Tamils as a community and a peaceful and honourable political solution to the ethnic problem and on the other to protecting them from the wrathof the LTTE so that a free atmosphere could be created for democratic functioning within the Lankan Tamil community. Many of them became fugitives in India,forced to lead a marginal political existence and in mortal danger to their lives from the "Tigers".38VIOLENCE AND ASSASSINATIONSThe cult of violence was embedding itself in Sri Lanka (as it in fact was in India too but the agencies and forces involved were often different). Evenin Sri Lanka there was more than one element engaged in the game of killing select targets. Some of the targets have been noted above. Apart from the navalchief, the cult of violence claimed Lalit Athulathmudali, former minister for national security, and later leader of a break-away group from the rulingUnited National Party. He was shot dead at an election rally on 23 April 1993 in Colombo.39 Immediately his party, the Democratic United National Front(DUNF) moved the needle of suspicion to the ruling party.40 As often happens in such cases, the ultimate agency for the crime was not conclusively located.167A week later, among the most shocking consequences of the growth of the cult of violence, was the killing of President Premadasa on 1 May 1993 as he wasinspecting a May Day rally of his party. The assailant had activated the explosives which he had apparently strapped round his body.41 The entire modusoperandi of the killing was disturbingly similar to the one employed in assassinating Rajiv Gandhi. The LTTE was, therefore, the prime suspect in the killing.Premadasa's killing introduced an element of uncertainty in India- Sri Lanka relations which had been on the mend for the past one year. The felled Presidenthad apparently considerably strengthened his position internally and relations with India were also on the mend. In January he had fulfilled his wish andgone on a pilgrimage to Bodh Gaya. He had also managed to keep the LTTE at bay, first cultivating it and then fighting it alternatively. Possibly, thatis what decided the LTTE to go for him. Sri Lankan politics were thrown into a new turmoil with his exit from the scene. Both the major parties, the rulingUNP and the opposition SLFP were in the throes of a power struggle and a reshuffle of the leadership. The son, the earlier heir-apparent, left the mother'sparty, the SLFP, while the daughter returned to it. Anura Bandaranaike joined the UNP42 and subsequently Jemini Dissanayake, who had gone out of the UNPalong with Lalit Athulathmudali to form the DUNF returned to UNP and became its presidential candidate. The uncertainty in Sri Lankan politics was an indicationof realignment of political and social forces in Sri Lanka. The two years (1993 and 1994) saw a political churning, bringing about a major change of governmentas well as of political and social attitudes.NEW DEVELOPMENTS AND INDIA-SRI LANKA RELATIONSA number of developments that could impinge on the ethnic issue and relations with India deserve notice. The ruling UNP appeared to be losing ground, moreand more unsure of itself. Premadasa's successors were unable to maintain the hold he had on public opinion. The opposition was forging ahead. At thispoint of time the opposition comprised both the SLFP and the DUNF, the breakaway faction of the UNP. Something equally important was happening within animportant segment of the Tamil community of Indian originoo. The Ceylon Workers Congress, the chief representative body of the Indian plantation labour,under the leadership of S. Thondaman, moved away from its earlier close alliance with the UNP and supported the opposition in the elections to the provincialcouncils. It should be recalled that the CWC, earlier a partner of the UNP, had been instrumental in ensuring the UNP victory in the presidential and parliamentaryelections since 1977 by organizing en bloc voting by plantation Tamils of Indian origin.43168In yet another development in the elections to the local bodies in the northeast in early March (1994) the anti-LTTE groups won three out of four prestigiousurban bodies. Among the winners were Tamil Eelam Liberation Organization (TELO) and the Democratic People's Liberation Front (DPLF). This despite the threatsby the LTTE against the elections and the candidates.44 It was the first poll since the IPKF-supervised provincial elections in 1987. A 72 per cent turnoutin the Tamil Muslim (Tamil-speaking Muslims) and Sinhalese areas with the Sinhalese contituting only 25- 26 per cent of the population was a distinct featureof these elections.45 It demonstrated that if the fear of the gun was taken away, the LTTE would not enjoy unrivalled supremacy.But the haemorrhage in the support base of the UNP could not be stopped. A significant straw in the wind was the defeat of the UNP and the victory of thePeople's Alliance (PA) led by the SFLP in the elections to the Southern Provincial Council. The PA won an impressive victory with 33 out of 53 seats. Theelection was invested with a particular significance because the voters comprised an overwhelmingly Sinhalese Buddhist population. The verdict was a clearrejection of UNP President Vijetunga's strident communal appeal in the campaign.46 Patently, the Buddhist clergy was also losing its previous influenceand sway over the people. In any case this election result appeared to be a presentiment of things to come.India-Sri Lanka relations were markedly improving during this period. According to a Colombo analyst, the year 1993 saw a remarkable turnabout in India-SriLanka relations. "An increasingly close and cordial relationship replaced cool and distant dialogue, often marked by friction and moments of high tension."He believed that Indian diplomacy in recent times had been "markedly free of Big Brother condescension. Of course clapping required two hands. PresidentPremadasa had also soon realized the importance of good neighbours, and a quiet, stable neighbourhood. As he put it to a group of journalists, "you don'tneed a Ph.D. to realize that In4a is a regional power or to recognize that across the Palk Straits, there is a state called Tamil Nadu".47The political and social realignments could in fact boost the prospects of a continuing improvement of relations. The clear change of mood in Tamil Naduand the decline of chauvinism in both countries could act as a stimulant in the process of warming-up. Inevitably their geography determined that theycould not avoid incidents that tended to create acrimony, but if every incident was not taken to mean the involvement of national self-respect, the eventenor of relationship did not need to be affected. These incidents could relate to the ethnic issues, refugees from Sri Lanka, arms smuggling and the navalvigilance that both countries conducted, and fishing in the Palk Straits.As for instance, the killing of five Indian fishermen from Tamil Nadu by the Sri Lankan navy on 8 October 1993. Reminding Sri Lanka of several such incidents,169India said it was taking "a very strong view of these recurring incidents" and lodged a "strong protest" with the Sri Lanka government. A team of Indianofficials visited Colombo in early March 1994 for talks to find ways of avoiding such incidents. Colombo had consistently denied any wilfulness in thesematters by its navy. But in view of the deep suspicions in Colombo about the ethnic support from Tamil Nadu to the Ceylonese Tamils and about gun-runningby the LITE, it was not easy to find a solution to the problem.48 The Colombo talks ended' with both sides reiterating their positions and no new groundwas broken. However, since neither side wanted to escalate this into a major issue, the tension accruing from it could be kept under manageable control.Meanwhile major political changes were in the offing in Colombo. Mrs. Chandrika Kumaratung had taken over the mantle of leadership from Sirimavo Bandaranaike.The People's Alliance (PA), of which the SLFP was the major component, supported by the Sri Lanka Muslim Congress (SLMC) and upcoming People's Front, emergedas the largest party in the parliamentary election in mid-August one seat short of majority. The PA won 112 seats in a house of 225. Indicating the changeof atmosphere in the country, the Ceylon Workers Congress led by Thondaman, with seven members in the new parliament, offered "selective support" to thePA government.49 Subsequently the CWC joined the government of the new Prime Minister, Chandrika Kumaratunge.ETHNIC ISSUESNot only was the ethnic issue the most troublesome for India-Sri Lanka relations but had also become the central issue within the island republic. Peacewas the single most demanding task before any government in Colombo. The costs of the continuing war were heavy and well known and in the final analysisit was self-defeating. How to achieve peace with a force ranged against the government that was determined to accept nothing less than complete independence—thatwas Colombo's problem. How to preserve the unity and integrity of the country and yet devolve enough power to Tamil areas to assure the Tamils a life ofhonour and safety of their lives and property—that was the real issue, with no painless answers.Chandrika Kumaratunge was perhaps the best-suited Sinhalese leader to cope with the problem. She put a very positive foot forward to douse the passionsarid assure a reasonable deal for the Tamils. She announced what was under the circumstances a bold package on 3 August 1995, envisaging a change in thewhole complexion of Sri Lankan politics. Under the package, regional councils were to be established with unencumbered jurisdiction over some forty-fivesubjects. They would also have control over regional finance, police, judicial and public service commissions. The regional governors would be appointedby the President with the concurrence of the chief minister of the region. A chief170minister would not be removed from office as long as he enjoyed the confidence of the regional council assembly. Land—a serious contentious issue in thepast— would be a devolved subject. State land within a region would be vested in regional councils and state land within the region required by the centrewould be utilized by the centre in consultation with the regional council. Land settlement schemes would be given to persons first of the district andthen of the region.50 This measure was intended to check what the Tamils regarded as the threat of demographic changes in their regions through the earlierpolicy of settling much Sinhalese in the north-east.Undoubtedly the Kumaratunge plan went much further than the Indo-Sri Lanka Agreement of 1987 cenvisaged. It was a plan for a real change in the politicalstructure of Sri Lanka. However, there were two major catches. The proposals needed amendment of the constitution which had to be passed with two-thirdsmajority of parliament. Without the cooperation of the opposition UNP there was no way in which the government could manage a two-thirds vote for the package.The UNP has been chary of spelling out its exact standpoint and as yet-there is little certainty of the package being approved by parliament with the requisitemajority.The second catch was the intransigence of the LTTE and its insincerity in negotiations. The Tamil Tigers have not show any genuine inclination to negotiateon the basis of the government package. In fact the government itself embarked upon full-scale military operations and have in the onward offensive ofthe armed forces captured Jaffna, the erstwhile stronghold of the LTTE, but it also became a situation of all fight and no peace.It is too early to say whether this policy would finally succeed. Two months before the army stormed into Jaffna, President Chandrika herself had warnedthe people, on the occasion of the second anniversary of her People's Alliance government in power, that the country was "on the brink of disaster" andcalled for ethnic peace. The ethnic conflict had brought the entire nation to the point of ruin during the past few decades, affecting adversely all aspectsof national life, she said. In her words, "The ultimate consequence of this debilitating conflict is that a pall of gloom is cast over the life of thenation."51Ethnic peace was still eluding Sri Lanka. The political processes were virtually at a stand still while war raged in its full intensity. The trouble insuch situations is that thousands of innocent people suffer and leave behind a legacy of distrust and alienation. Victories were achieved on the militaryfront, but there was no advance on the political front. 52 The devolution package remained in limbo.171OVERALL RELATIONSIt would be idle to pretend that the suffering of the Sri Lankan Tamils would have no impact on public opinion in Tamil Nadu and consequently possibly onIndia-Sri Lanka relations. The lurking dangers could not be wished away. Nevertheless India-Sri Lanka relations had entered a new era in which the basichealth of the relationship had been restored and tensions had been greatly reduced.During a visit to New Delhi in mid-June 1996 the Sri Lankan Prime Minister, Lakshman Kadirgamar was remarkably upbeat about relations between the two countrieswhich were described as being in "exceptionally good shape". He paid rich tributes to Prime Minister Deve Gowda and to Tamil Nadu Chief Minister M. Karunanidhitoo for not letting the Sri Lankan Tamil factor come to the fore in the recent elections in Tamil Nadu.53 There were currently no great irritants in India-SriLanka relations and subsequently it was claimed that there was no better indicator of the warmth in their ties than that President Chandrika chose Indiafor her year-end family holiday.India had a useful economic relationship with Sri Lanka although it was far from fulfilling its potential. The second largest importer of Indian goods inthe South Asian region, Sri Lanka had been seeking concessions on tariffs, services, investment promotion and trade facilitation. India's exports to Colomborose from Rs 2,419 crore in 1994-95 to Rs 3,048 crore in 1995-96 whereas its imports from Colombo stood as 145.83 crore in 1995-96 as against Rs 96.49cror in 1994-95.54 India had some thirty-eight joint ventures with Sri Lanka, seventeen of them under operation, with an equity of Rs 11 crore, and twenty-oneunder implementation with an equity of Rs 82 crore, in a wide variety of fields including industry, manufacturing, assembly of commercial vehicles, managementand consultancy and hotels.55NOTES1. V.P. Dutt, India's Foreign Policy, Vikas Publishing House, 1987. Also see the author's India and the World, Sanchar Publishing House, 1991.2. Shelton U.Kodikara (ed.), External Compulsions of South Asian Politics, Sage Publications, New Delhi, 1993, pp. 226-45.3. See Ambolavanar Sivarajan, "Indo-Sri Lanka Relations in the Context of Sri Lanka's Ethnic Crisis", in P.V.J. Jayasekera (ed.), Security Dilemma of aSmall State, South Asian Publications, New Delhi, 1992, pp. 506-23.4. All these issues have been discussed at length in the author's India's Foreign Policy, n. 1.5. Jayewardene's statement, Times of India, 3 July 1991. There has been no clarification whether or not Dixit actually made such a statement.6. Asian Recorder, 27 August-2 September 1989, p. 20744.7. Ibid, p. 20745.8. Ibid, 6-12 August 1989, p. 20711.1729. Bee n.25.10. Text of the agreement in The Hindu, 19 September 1989.11. Ibid., 20 September 1989.12. See then Foreign Minister I.K. Gujral's statement in Trivandrum on 12 January after his meeting with the Sri Lankan counterpart in New Delhi on 6 January.Patriot, 13 January 1990. Also see the Foreign Ministry spokesman's comments on an impending friendship treaty, The Statesman, 7 January 1990.13. Seema Guha from Colombo in Times of India, 17 January 1990 and The Statesman, 18 January 1990.14. The Hindu, 5 February 1990; Indian Express, 17 February 1990.15. Times of India, 7 June 1990.16. Hindustan Times, 14 June 1990.17. Ibid., 25 June 1990. Also see Government statement, The Hindu, 29 June 1990.18. Times of India, and Hindustan Times, 15 August 1990.19. Seema Guha in Times of India, 22 August 1990.20. Hindustan Times, 11 September 1990.21. The Hindu, 18 September 1990.22. Indian Express, 29 October 1990.23. Times of India, 27 May 1991.24. K. K. Katyal in Vie Hindu, 30 July 1991.25. Times of India, 20 September 1991.26. The Hindu, 12 November; Times of India, 13 November; and The Hindu, 23 November 1991.27. The Hindu, 10 December 1991.28. Asian Recorder, 12-18 February 1992, p. 22150.29. Daily News, Colombo, 8 January 1992.30. All India Radio, home service in English, 7 January 1992.31. Mervyn de Silva from Colombo in Deccan Herald, 8 August 1992 .32. Hindustan Times, 10 September 1992.33. All India Radio (English), 2 October 1992.34. Lankapuvath news agency in English, 30 October in Summary of World Broadcasts (SWB), FE/1503/A1/2,5 October 1992.35. All India Radio (English), 3 October 1992.36. Times of India, 13 February 1993.37. Hindustan Times, 13 February 1993.38. Prominent among those who were so sacrificed was Perumal Vardarajan who had become acting Chief of the Tamil areas with the dispatch of the 1PKF toColombo. Also see EPKLF statement, Hindustan Times, 26 February 1992.39. Indian Express, 24 April 1993.40. Times of India, 26 April 1993.41. The Hindu. 2 May 1993.42. Hindustan Times, 12 and 27 October 1993.43. Hindustan Times, 30 November 1993.44. Ibid., 3 March 1994.45. Times of India, 10 March 1994.46. Hindustan Times, 26 March 1994.47. Mervyn De Silva in Times of India, 7 January 1994.17348. The Hindu, 10 March 1994.49. Hindustan Times, 18 August and Times of India, 22 August 1994.50. See The Hindu and Hindustan Times, 4 August 1995.51. Times of India, 20 August 1996.52. See Seema Guha in Times of India, 29 December 1996.53. Indian Express, 22 June 1996.54. Annual Report, Ministry of Commerce, Government of India, 1995-96.55. Summary of Joint Investments Abroad as on 31 December 1995, India Investment Centre, New Delhi.174IV INDIA AND NEPALUnited by history and geography, and sometimes also divided by the same history and geography, India and Nepal were bound to each other by ties of culture,religion and long association. Even the Himalayas stood testimony to their shared mythology and historical sentiments. One country did not naturally endwhere the other began. The two just extended into each other, with only the Himalayas as the natural termination point for either of them. Suspicious attimes they might be, sometimes a bristling relationship soured sentiments on both sides, but there was no way they could escape an intimate relationship.Many Nepalese leaders, including B.P. Koirala and K.P. Bhattarai, participated in the Indian struggle for freedom. They believed that freedom for Indiawould also strengthen the process of freedom and democracy in Nepal. Yet, inevitably, the cutting edge of Nepalese nationalism has often been directedagainst India—inevitably because India was big and near, while China was separated by a more forbidding terrain. Nepal was a land-locked country whosenatural access route lay through India. So was it dependent on India for the supply of various essential commodities. This sense of dependency can be easilyexploited to arouse resentment and fan latent chauvinism.All these factors and Indo-Nepalese relations between 1966 and 1989 have already been discussed in the author's earlier volume on India's foreign policy.1This volume carries the story forward to the middle of 1996.By 1989 relations between the two countries were again at a low ebb. India reacted angrily particularly to two acts of the authorities in Nepal where ahawkish Prime Minister seemed determined to adopt a tit-for-tat policy and to assert Kathmandu's right to do what it liked, irrespective of its impacton India's security perceptions and earlier agreements. The first was to acquire arms from China without consultation with India in what India saw as Nepal'sviolation of its treaty with India, signed in 1950.2 The second was Kathmandu's decision requiring work permits for Indian citizens in Nepal, again incontravention of the earlier agreements. In retaliation India decided to keep open only two access points to Nepal as enjoined by international agreementsand to withdraw other facilities for Nepalese purchase of Indian goods. The situation seemed to hark back to 1966 when also Indo-Nepalese relations hadcome unstuck for similar reasons and with similar consequences. Trade came to a near stand still and the people in Nepal had to face very considerablehardship.WINDS OF DEMOCRACYBut this time there was a new element that threatened to upset the applecart of the old power structure in Kathmandu. An upsurge from below, a massive massmovement for genuine democracy and a constitutional monarchy was175swelling up in the Himalayan kingdom. Spearheaded by the Nepali Congress, it was also joined by the leftists. The struggle was launched at a meeting ofthe Nepali Congress in Kathmandu on 18 January 1990. A unique feature of the conclave was the presence of representatives of virtually all major Indianpolitical parties barring the BJP, to offer their good wishes and moral support in the struggle for democracy. Only the BJP, in the name of supportinga Hindu kingdom, appeared to be sympathetic to the authoritarian rule of the Palace under the fiction of Panchayati Raj. The meeting was addressed, amongothers, by Chandrashekhar who subsequently had a brief spell as Prime Minister. The three-day meet, attended by some 5,000 delegates, issued a call fora mass stir for the restoration of democracy.While Nepal was plunged in this political turmoil, talks began at the official level between the two countries in an attempt to resolve the differences.The Nepalese Foreign Minister visited India in early January "and the official level talks began on 20 February. According to an official briefing, theNepalese side appreciated New Delhi's perceptions on security (which it had not done earlier). The minutes recorded the positions of the two sides andthe next step was for each side to prepare the draft agreements which the two would subsequently coordinate into a single document. A joint statement spokeoptimistically of the prospects of early agreement, now that the two delegations had made progress "towards a comprehensive solution of all outstandingproblems" and their discussions contributed "to greater mutual understanding of each other's serious concerns and sensitivities".3The political authorities in Kathmandu were divided over the agreement worked out by the officials, with the Foreign Minister, who quit shortly afterwards,taking a softer line but the Prime Minister continuing to adopt a hard stance. Meanwhile Nepal was astir and afire with the movement for democracy snowballinginto a vast people's movement. Scores of people were killed in the effort to suppress it. More and more sections of society were being drawn into it andit was taking on the attributes of a mass revolt. More than two hundred members of the Indian Parliament condemned the repression in Nepal and expressedtheir sympathy for the pro-democracy movement.Just at this time, incomprehensible to many in India, the Foreign Secretary decided to visit Kathmandu to finalize a new agreement covering both securityand trade and transit issues. The reasons offered were the fresh supply of Chinese arms to Nepal and the hardship being caused to the people of Nepal becauseof cessation of trade.4 But the move to reach an agreement with the King's men was poorly timed, when that country was witnessing a massive struggle andruthless suppression. Mercifully, India was saved from this folly in the nick of time by the King's surrender to the demand for democracy. It should alsobe noted that Beijing too had cautioned Kathmandu that it was not in a176position to meet all of Nepal's needs and that it should strive to resolve its problems with New Delhi through negotiations.On 8 April the King bowed to the popular demand and removed the thirty-year-old ban on political parties.5 He began a process of consultations with oppositionleaders, which culminated in the formation of an interim coalition government led by the acting President of the Nepali Congress, Krishan Prasad Bhattaraiand joined by the seven-party Left Front.6These developments cleared the ground for a constructive change in India-Nepal ties. Bhattarai declared that he gave priority to restoring normalcy to relationswith India. He proposed a meeting at the highest levels with India for a political settlement.7 As he prepared to visit India on a rectification mission,he asked for the restoration of status quo ante in India-Nepal relations. As a gesture of goodwill, he announced his government's decision to defer indefinitelythe purchase of the last consignment of Chinese arms ordered by the previous government.8 India was ready for such a revival of ties, provided the statusquo ante included the security issue and non-discrimination against Indians in Nepal.9STATUS QUO ANTEBhattarai's visit was hugely successful. On 8 June India and Nepal agreed to the restoration of status quo ante of 1 April 1987 in all aspects of theirrelations (emphasis added). This implied, among other things, reopening of all fifteen transit points along the Indo-Nepal border, instead of only twothat were opened following the expiry of the trade and transit treaties in March 1989. Prime Minister V.P. Singh told his Nepalese counterpart that Indiawas happy at the triumph of democracy in the Himalayan kingdom and that New Delhi wished to move in a positive direction in relations with Kathmandu.10The joint communique issued on 10 June reiterated the equality, territorial integrity and national independence of the two countries and non-interferencein each other's internal affairs. They agreed that Nepal and India would fully respect each other's security concerns. "In this context, neither side wouldallow activities in its territories prejudicial to the security of the other. The two countries shall have prior consultations with a view to reachingmutual agreement on such defence-related matters which, in the view of either country, could pose a threat to its security," the communique said. Statusquo ante, as on 1 April, 1987 was to be restored by 1 July 1990."Thus tariff concessions were mutually available and both sides resumed the concessions that they had been traditionally giving each other. The tension inIndo-Nepalese relations had been dissolved. Certainly, problems would keep bobbing up, but hopefully they would be more manageable, mainly because thedemocrats in Nepal did not need an anti-India campaign to preserve their power.177India's interests also lay in the maintenance of a close and cordial relationship with Nepal.Meanwhile democracy was further strengthened in Nepal with the promulgation of a new constitution on 9 November that made the King a constitutional monarchand formally set the kingdom on a course of multi-party democracy. Necessarily, democracy does not solve all problems, and often it adds its own problems.Power is a great divider, and in a democracy the rifts surface in the open rather swiftly. But democracy helps to absorb the resultant tensions withoutbringing the house down. It was also a difficult, painful period marked by some violence and the attempt by anti-social elements to take advantage of thefluid situation.The peculiar tie-up between the Nepali Congress and the United Liberation Front of the leftists could only be a temporary device, the child of a circumstantialneed for a union in the interest of their common objective of overturning a dictatorial regime that functioned in the garb of panchayti raj. But once theobjective had been largely achieved, given their different outlooks and perceptions, a growing divergence between the two was not surprising. It was normalin a democracy for differing viewpoints and political philosophies to contend for majority support. Perhaps more ominous was the rift among the leadersof the Nepali Congress, particularly between Ganesh Man Singh and K.P. Bhattarai on the one hand and G.P. Koirala on the other. This internal dimensionwas to have more serious consequences for Nepalese politics. But any detailed consideration of internal developments is outside the purview of this volumeexcept in so far as they would impinge on Indo-Nepalese relations.Bhattarai's visit had been followed up by the Indian External Affairs Minister, I.K. Gujral's trip to Kathmandu, 5-7 August 1990. The overturning in Nepalhad provided the basis for a smoother relationship. India agreed to a Nepalese request to open up three additional entry points for non-Indian touristsalong the border with Uttar Pradesh and it was decided that a team of Indian experts would go to Nepal to prepare a project report on connecting Kathmanduwith Raxaul in Bihar by railway. Gujral was keen to dispel Nepalese fears about India's huge size and advanced stage of economic development. India wasa natural market for Nepal and the source of investment and supply of essential commodities, but India was also heavily dependent on Nepal for the protectionof its "ecology rivers" that flooded the Gangetic plain yearly as India could not control these rivers that originated in Nepal without Nepalese cooperation.12But so far as India's security perceptions were concerned, these had not mutated with the change of government in New Delhi. Gujral told a Nepalese journalistthat "the 1950 India-Nepal Treaty spelt out the parameters of the cooperation between the two countries and was very much there". Il was fully valid andwas the basis for arriving at a comprehensive agreement on bilateral matters between the two countries.13178With Indo-Nepalese relations on a track of normalcy, Nepal's economy was back On its feet, so to say. But the impact of the dispute over trade and transitwith India was not as severe as was expected, partly perhaps because of good weather, according to a World Bank report.14 Nepal with a population of 18.1million, an annual population growth of 2.6 per cent, a GNP per capita of $160, a life-expectancy of 26 per cent, registered real growth of gross domesticproduct of about 2 per cent in fiscal year 1989-90 and had international reserves for about six months worth of imports.ELECTIONS AND THE INDIA FACTORMeanwhile elections on a multi-party basis were held in May 1991, resulting in a clear, though slender majority for the Nepali Congress with 100 seats ina House of 205 and a strong leftist presence. The Comunist Party of Nepal—United Marxist-Leninist CPN (UML) secured 69 seats and together with the extremeleftists' 11 seats, the left altogether garnered nearly one-third of the total number of seats.15 A major shock suffered by the Nepali Congress was thedefeat of the Prime Minister and acting President, K.P. Bhattarai at the hands of the general secretary of the Communist Party (Marxist-Leninist), MadanBhandari. G.P. Koirala, general secretary of the Nepali Congress and younger brother of the late B.P. Koirala, became Prime Minister. The seeds of dissidenceand bickering within the Nepali Congress were also sown at the same time that were to create a crisis situation subsequently. In any case, G.P. Koirala,reputedly direct and forthright, was more assertively opposed to the left.Interestingly the "India card" cut both ways. The left used it, though not too aggressively anti-Indian, against the Nepali Congress. Instead of being apologetic,the Nepali Congress tried to turn good relations with India to its advantage. The differing outlook about the treaty relationship with India was obviousduring and after the elections. The CPN (UML) favoured a review of relations with India. President of the party and leader of the opposition in Parliament,Manmohan Adhikari, who was a member of the undivided Communist Party of India for about a decade during his exile in India, and, therefore, had close relationswith the Indian communist leaders, did not want any "special relations" with India. He wanted his country's interests given "very favourable and sympatheticconsideration, India being a great and developed country". It should be realized by India, he said, that "the Nepalese cannot be part of India's securityperceptions". He added that in the left's view Nepal's relations with India had "special characteristics when we take into consideration the historic friendshipand cultural, social and religious affinities".16The Nepali Congress point of view was succinctly stated by its president, K.P. Bhattarai. He ruled out any tilt towards China and in any case denied anytilt altogether, whether towards India or China. "But, of course, with India we179have natural friendly relations because of the open borders, cultural heritage, social and religious intercourse and economic tie-ups", he said in an interviewto the Press Trust of India news agency. "We are very much affected by whatever happens in India in the economic field. Similarly, India also is affectedby what happens in Nepal", he told his interviewer.With regard to India's security perceptions in the Terai area because of Chinese presence close to the Indian border, Nepal "took care of security perceptionsof such a good neighbour like India so that the Chinese do not cross the limits. Some Chinese were even arrested", he said. He accused the previous Panchayatiregime of blackmailing India with the so-called China card. Talking about the "zone of peace", about which so much bad blood had been created with India,he was forthright. "What is the good of declaring a small place as zone of peace. The whole world should be declared a zone of peace." It was not a majorissue between the two countries. He did not buy the proposition that India was "the big bully in South Asia."17 (The volatility of the India factor inthe internal and even intral-party politics of Nepal may be judged from the fact that Bhattarai was himself constrained to take recourse to anti-Indianutterances during his bid to enter the Pratinidhi Sabha in a by-election in early 1994.Clarifying his country's foreign policy, Prime Minister Koirala told the House of Representatives (Pratinidhi Sabha) that the guiding principles of Nepal'sforeign policy were its sovereignty, commitment to human rights, nationalism, democracy and non-alignment. Nepal would expand and strengthen its foreignrelations by respecting the independence and territorial integrity of all countries, world peace and respect and adherence to the United Nations. Nepalwould also stress furthering an effective role for the South Asian Association for Regional Cooperation (SAARC) for an active implementation of the conceptof regional cooperation, he said. He maintained that the policy of tilting' in foreign relations on one side or the other was the practice of the Panchayatregime which had now ended forever.Koirala held that his government wanted to make its relations with Nepal's neighbours India and China more practical by further strengthening the mutualfriendship and understanding with them. Any reference to the inseparable ties with India in various matters constituted, according to the Nepal Prime Minister,only a statement of realities on the ground and did not in any way signal a leaning towards that country. As regards the question of the 1950 treaty withIndia and the 1965 accord, "our attitude is that any such agreement with another country should be looked at from the point of view of their overall impacton bilateral ties, rather than concentrating on just the wording involved." Every treaty or accord had its own special context and its effect would notremain exactly the same over time, nor would it last always, he said. He believed that there was need to develop between Nepal and India a permanent understanding180that was clearly defined so that mutual ties would be free of problems. This could be done with the cooperation and forbearance of all.As regards the question of common rivers, he said that the matter had been clarified before also that the term was used in the context of a joint feasibilityquest into the mutual use of rivers that flowed from Nepal to India. As the potential of the big rivers in Nepal was above anything that Nepal needed orcould use, the only feasible and sizeable market was India and the right approach, Koirala stressed, was one that took India's interests into account alsoso as to bring about involvement through investment.18An Indo-Nepalese Joint Commission had been constituted in 1986 but had made little headway because of subsequent political troubles between the two countries.Such joint commissions, generally ministerial in composition at the top, were created to give a push from above for developing bilateral relations amongcountries, particularly at the economic level, but these relations were often subject to the buffeting of hot and hostile political winds. The environmentnow was propitious to create a new momentum for Indo-Nepalese relations. A team of senior officials, visited Kathmandu comprising the cabinet, foreignand commerce secretaries, in early August in a bid of revive the joint commission and to provide more steam in the development of relations. The two sidesparticularly focused on issues relating to trade, transit, unauthorized cross country trade, multiple use of water resources and industrialization.19This was followed by a meeting between Nepalese and Indian high officials in Kathmandu in October finanlizing their report on recommendations submittedto the Nepal-India Joint Commission. Their recommendations were believed to have paved the way for raising the cooperation between the two countries toa new level.20The problem of mutually beneficial use of water resources was both important and ticklish. It should have normally been a binding factor, but it had allthe potential of becoming a fairly divisive issue. Many of India's rivers flowed from Nepal into India and their mutual cooperation was essential for harnessingthese rivers for irrigation and generation of electricity and for controlling the havoc they continually caused. The big country-small country syndromebred suspicion in Nepal about one-sided advantages accruing to India.The officials gave particular attention to Karmali, Pancheswar and Kosi river projects. Nepalese opinion was sore over the Kosi project and the belief wassedulously fostered that Nepal was cheated in the Kosi deal clinched in the fifties: The issue was particularly useful in the domestic struggle betweenthe Nepali Congress regime and the opposition. Even more hackles were raised subsequently over the Tanakpur project. The opposition contended that Nepalhad contributed to the building of the barrage and should, therefore, demand more concessions from India, utilizing the occasion of the negotiation ofthe agreement for the construction of a road connecting Mahendra Highway with181Tanakpur barrage. The agreement negotiated in this regard during G.P. Koirala's visit to India in December 1992 sanctioned for Nepal twenty million unitsof electricity annually for 150 cusecs of water. The opposition, particularly the Communists, alleged that the treaty had surrendered away basic Nepaleseinterests and even claimed that the Indian Minister of State for External Affairs, R.L. Bhatia had conceded Nepal's contribution to the barrage and ipsofacto, Nepal's claim for more concessions in an interview with Nepal television. The government telecast the original tape of Bhatia's interview to refutethe allegation, for he had said no such thing.21The Nepalese believed that they had a number of genuine grievances. A sober analysis of the problem mentioned the first grievance as the building of thebarrage without any consultation with Nepal. The river Mahakali, on which the barrage was built, was a border river, according to Nepalese opinion andNepal discovered only in 1992 that the construction of the project had started several years earlier. Nepal was neither consulted fully nor taken intoconfidence by India. Nepal's contribution had been the land for the left afflux bund (577 metres) and part of the pondage and the upstream waters of Mahakali.22It should be noted, however, that the land came in addition, and not during the period that India was constructing the barrage in its own territory.It was acknowledged that to install a 5 megawatt power station would have cost Nepal anywhere between 340 to 800 million rupees and that the fantasy ofearning hydro money without spending much from its own coffers had been a long one in Nepal. In view of Nepal's zero financial and technical involvementand the ensuing power crisis, 20 million units was "indeed an amount whose importance cannot be denied." The energy to be provided to Nepal from Tanakpurwas about one fortieth of the total hydro electricity available in Nepal and equivalent to approximately 90 million rupees a year. It was also acknowledgedthat the water would have remained unharnessed anyway but for the Tanakpur project and that as long as the existing water rights Nepal derived from theSharada barrage downstream and future projects in the upstream such as the Pancheshwar in the same basin were not hampered, Tanakpur need not arouse fearamong the Nepalese.23To set the record straight, a senior Minister disclosed that the decision to send a delegation to negotiate the Tanakpur Project, specifying its objectivesand terms, was taken by the interim government in which the Communists were coalition partners and were, therefore, a party to the agreement reached laterby the Koirala government.24 Obviously the Tanakpur project had become a live political issue in the internal struggle for power in Nepal.182NEW AGREEMENTSGetting back to the earlier period, the prospect at the time was promising. As a Nepalese diplomat put it, when the two sides met, the view was no longerblocked by their respective national flags! Prime Minister G.P. Koirala's visit to New Delhi in December 1991 resulted in the conclusion of a number ofagreements between India and Nepal. A five-year treaty on trade and transit ensured new concessions in duty and quota-free entry of Nepalese manufacturedgoods and labour. An agreement was also reached in regard to the control of unauthorized trade—but past experience was that all such exercises remainedgenerally on paper and the unauthorized trade (a euphemism for smuggling) continued unhampered. The bilateral cooperation in the sphere of harnessing ofwater resources saw a new high, with new agreements on Karnamli, Pancheswar and Kosi hydroclectic or multipurpose projects and on exchange of power, includingthe Tanakpur project which has already been discussed above. A memorandum of understanding was also reached on cooperation in the agricultural field andthe setting up of an Indo-Nepal Foundation in the name of the late B.P. Koirala.25 Besides, there were agreements on promoting joint ventures and on settingup with Indian assistance new institutes in Nepal.How much of a change there was in the perception of the Palace regime and the Nepali Congress government was evident from G.P. Koirala's press conferencein New Delhi on 8 December. Answering questions about the Pakistani proposal for declaring South Asia a nuclear-free zone, the Nepalese Prime Ministerexpressed his disagreement with Pakistan about making an exclusive nuclear-free zone in this region. "Why only South Asia, why not the whole world?", heasked. There could be no short-cuts in the matter of peace and he preferred that the issue be considered in a global context.Even on the question of the rights of the Nepalese population in Bhutan, a highly sensitive issue as there was strong Nepalese opinion about what they regardedas repression in Bhutan, the Prime Minister was even-handed in his reactions. He opposed human rights violations the world over, and this applied to Tibetand Bhutan. Repression in both the places was regrettable, he said. However, making a clear reference to Kashmir, he told presspersons that the turmoilin the Himalayan regions of India was an internal matter, and he had no comments to make.The Nepalese Prime Minister said that his visit to India had opened new vistas for mutual cooperation. India had extended its full support for the restorationof democracy in Nepal, and "now we are looking forward to its fullest help in Nepal's all-round development", he said.26Before we take a second look at the points of friction and the impact of domestic politics on them, we take note of yet another step in the developmentof Indo-Nepalese relationship. P.V. Narasimha Rao's visit to Kathmandu in October 1992 resulted in fresh concessions and new agreements over trade andtransit183and the harnessing of natural resources. India agreed to enhance the revolvhig stand-by credit facility for Nepal from the current Rs 35 crore to Rs 50crore at 7 per cent concessional rate. It was also agreed that Nepal would receive free of cost 20 million units of power annually from the Tanakpur barragepower station, and that up to 250 cusecs would be available round the year for irrigation of 4,000-5,000 hectares of land on the Nepalese side of the border.The two countries also agreed on a time-frame for investigations and preparation of project report for execution of Karnali, Pancheswar, Sapta Kosi, BudhiGandaki, Mamala and Bagmati hydroelectric projects. In another step to boost Nepalese trade, India agreed to include Nepalese labour content in determiningthe eligibility of a Nepalese product for duty-free access to the Indian market. The two Prime Ministers agreed in a joint communique that if the totalpercentage of three components—Nepalese material and labour content and the Indian material content—of a product exceeded 50 per cent of the product cost,it would have duty-free and quota-free access to the Indian market. Nepal was also allowed, in addition to the existing system of rupee payment, to importgoods from India by payment in freely convertible currency.27The Indian Prime Minister had discussions with a wide range of Nepalese personalities, among them King Birendra, the Nepali Congress leaders Ganesh ManSingh and K.P. Bhattarai, and senior leaders of the opposition, Manmohan Adhikari, Surya Bahadur Thapa and Gajender Narayan Singh. Responding to questionsat the Tribhuvan international airport, he said that both countries had started a new process which was full of determination and confidence. In replyto a remark that India was generally perceived as a big brother, he said that he had tried whatever was humanly possible to dispel such notions.28On the positive side the week-long visit of King Birendra to New Delhi in May 1993 gave a further boost to relations between the two countries. At a banquethosted by President Shankar Dayal Sharma, King Birendra said that a regional outlook, painstaking and even frustrating at times, needed to be adopted andpursued with preseverances keeping in view the well-being of the people of both Nepal and India and the region for generations to come. In the changedglobal scenario following the collapse of the old international order, he said, it was imperative for the region "to strive bilaterally and collectivelyfor fruitful cooperation among ourselves."29FRICTION POINTSYet friction points were not slow in coming. In the geographical and economic situation in which the two were bound to each other, Nepalese nationalismcould easily be stirred against India. Not that India was always without fault, but what might otherwise have been quite manageable difficulties and problemscould easily be made to loom larger than life. To take an instance,184in an ill-advised move, the Indian police crossed the Nepalese border and raided two houses in Baneshwar locality looking for an alleged murderer. Opinionin Nepal was inflamed and the opposition was not satisfied with the protest note given by the government to India. In any case, India apologised and assuredNepal that such instances would not recur.30On a more significant plane, there were three built-in friction points: Nepal's dependence on India for trade and supply of economic necessities, the securityproblems, and the common river waters. Tied up with the basic geographical reality was also the problem of the people of one country living and workingin the other's country. They have traditionally enjoyed certain rights and privileges that could not be abridged without hurting the other side. The issueoften became, as it did between 1988 and 1990, a victim of the political problems between the two countries. Many rivers flowed from Nepal into India andwithout mutual cooperation harnessing them for the benefit of the people was well-nigh impossible. However much Nepalese friends might dislike it or obfuscatereality there was no getting away from the fact that Nepal was perforce dependent on Indian assistance for the utilization of its water resources, fortaming them, for irrigation, for the generation of electricity, and so on.Yet this very dependence created an emotional chasm and was easily turned into a source of disaffection against India. India was exploiting Nepal and itswater resources—this was a widely-held belief in Nepal. Between perception and reality, it was often the perception that mattered. There was no other explanationfor the furore that followed an innocent observation by K.P. Bhattarai about the "common rivers" concept between India and Nepal. He was aghast at themanner in which the issue was blown out of all proportion. Bhattarai pointed out that many rivers from Tibet passed through Nepal and flowed on to Indiabefore joining the sea. How could the critics claim the rivers as their own? If one went by the critics' argument, Bhattarai said, China could also takeexception as most of the rivers originated in Tibet.31The case of the Tanakpur barrage is a typical case of the problem of perception. It was made into a hugely emotional issue. The Tanakpur barrage, it shouldbe recalled, is on the Indian side of the border, although the Sharada river (Mahakali as the Nepalese call it) flows from Nepal. Subsequent to the constructionof the barrage, an agreement was signed between India and Nepal, by which India undertook to create certain additional facilities for Nepal which havebeen discussed earlier. The negotiations for the agreement began when the Nepali Congress and the Nepalese Communists had a joint government but was formalizedunder the Nepali Congress government. But Nepalese opinion was /aroused that Nepal had been done in and had signed an unequal agreement. The entire oppositionwas up in arms, calling for its ratification by the Pratinidhi Sabha by a two-thirds majority, which the Nepali Congress could not have mustered. In thealternative, the opposition demanded renegotiation of the treaty185to wrest more concessions from India. The case even went to the Nepalese Supreme Court. Finally the Pratinidhi Sabha set up a joint committee to considerall the ramifications of the agreement. In the dynamics of domestic politics, the Nepali Congress was put on the defensive, accused of a pro-India tiltand of failure to protect Nepalese interests. Indeed it was not the Panchayati Party, which in any case could be expected not to look kindly towards India,but the Communists who spearheaded the anti-Indian campaign.The problems of the Nepali Congress were compounded by the escalating internal struggle between its top leaders, with G.P. Koirala ranged against GaneshMan Singh and Krishna Prasad Bhattarai. This led to a vertical split within the party, exposing it to concerted attacks from the opposition. The loss ofinternal cohesion put it on the defensive and increasingly inhibited it in meeting the mounting challenge from the opposition. Any detailed discussionof the domestic politics of Nepal is, however, outside the scope of this book and only the most crucial developments that had a bearing on relations withIndia have been taken note of.Matters were particularly precipitated for G.P. Koirala when two top-ranking Communist leaders were killed in a road accident, with the Communists alleginga conspiracy hatched by the government to do away with Communist leadership. The Communists next began a movement for the ouster of Koirala from the primeminister ship. The incumbent Prime Minister's problems were compounded by the expanding differences among the leaders and further exacerbated by the seconddefeat of Bhattarai in a Kathmandu by-election in February 1994. Bhattarai's supporters alleged that the election had been sabotaged by Koirala's men.Ganesh Man Singh was also sulking for what he believed to be lack of any consultation by Koirala and for his style of functioning. The reckoning came whenthe Prime Minister lost a vote of confidence on 10 July 1994 because of the split in his party, when a number of rebel members of parliament voted againsthim.32 On his advice the King dissolved the House and ordered fresh elections.NEPALESE COMMUNISTS AND INDIAInevitably, the question of India-Nepal relations was dragged into the election campaign by the opposition. The security treaty, trade and transit issues,and the Tanakpur barrage were also utilized by the opposition, chiefly the Communists, to condemn the Nepali Congress for its pro-India stance and the"betrayal" of Nepalese interest. India was a convenient whipping boy held responsible for all Nepal's problems and for its attempts to abridge Nepalesesovereignty.The main problem of the Nepali Congress, however, was not its so-called pro-India tilt, but the vicious internal dissensions. Despite the patch work186between Koirala and Bhattarai, dissidence ran deep within the party and infighting and sabotage were chiefly responsible for the defeat of the Napali Congressat the hustings. The CPN (UML) emerged as the largest party with 88 seats Out of a total 205, while the Nepali Congress declined from 100 to 83. The PanchayatiParty dramatically increased its representation from 4 to 20 and became the balancing force in the newly constituted Pratinidhi Sabha.33 Although the NepaliCongress was only a few seats behind the Communists, it wa3 a moral defeat, accepted so by Koirala. Following the logic of the poll, the Communists wereallowed to form the government with Manmohan Adhikari as the Prime Minister and Madhav Nepal as the Deputy Prime Minister, Foreign Minister and DefenceMinister, all rolled into one.The chief concern for India was how the new dispensation would affect India Nepal relations. The Communist's rhetoric against India had been vitriolic.The CPN (UML), particularly its president and now the Prime Minister, Manmohan Adhikari, raised a number of issues both during and after the elections.While claiming that he wished to maintain very good relations with India and that such good relationship was natural, considering their geographical reality,he focused on three issues. He wanted a review of the 1950 security treaty which he held to be an unequal treaty. Nepal, he contended, would not accepta security umbrella of India. He said that he stood for a policy that was neither pro-India nor pro-China. While assuring India that he would not let anyanti-Indian activities to be carried out from Nepalese territory, he asserted that Nepal should be free to buy arms from anywhere, including China.34 Accordingto the 1950 treaty, India had to be informed and its consent secured for any acquisition of arms by Nepal from outside India.That the issue bristled with complications and had the potential of souring India-Nepal relations could be gauged from the fact that regardless of whichgovernment and which party was in power in New Delhi, its stance on the security issue had not diverged very much. Both countries would face the test ofstatesmanship to bridge the gap between their perceptions but undoubtedly no Indian government would go beyond a rock bottom position in regard to itssecurity perceptions. A situation in which Indian nationals were not allowed to work in certain border areas while foreign nationals could have easy accessclose to Indian borders would be untenable from the Indian point of view. The manner in which foreign-sponsored terrorism had struck it would make Indiawary about any possible use of the Nepalese sanctuary for terrorist activities against India..The Nepalese Prime Minister also asked for better trade and transit facilities, particularly for trade with Bangladesh, Pakistan and also other countries.Pakistan had given no such facilities to India for trade with Afghanistan and some Central Asian countries, but so far as Bangladesh and Nepal and someother countries were concerned, it was possible for India to be more187accommodating. The Nepalese also pointed to the expanding deficit in trade with India and wanted more facilities to reduce the gap.The third issue raised by the Qommunist leader related to the Tanakpur barrage. He was going to demand more concessions from India, perhaps in the formof more electricity without charge or some similar concession.35 It would not have been very difficult to reach a suitable accommodation on many of theseissues, but the fundamental problem was the lurking suspicions and inflated susceptibilities.36The problems were perhaps exaggerated because Nepal was going through a very difficult period. No party had been able to secure a majority: the Marxistgovernment was a minority government and no one knew how long it would last. There was a strong temptation to use the anti-India card to explain away thedifficulties and the failures.However Prime Minister Manmohan Adhikari was more cautious and restrained in his formulations after assuming office than the election rhetoric suggested.He said that he would give high priority to India's security concerns and would like the two countries to discuss the various issues in a friendly manner.He maintained his position on the treaty and various other issues but did not obviously wish to adopt a make-or-break attitude.37 He also pointed out thatNepal was a small country and could not adopt the same reciprocal approach as India could on the issues of migration into Nepal and acquisition of propertyby Indians.38Adhikari, accompanied by his deputy prime minister, Madhav Nepal, visited India in April 1995. He raised the same issues but in a more moderate manner.He was not asking for the abrogation of the treaty as it was a friendship treaty, but only its updating in view of fundamental changes that had taken placein the past forty years or so. The concept of a security umbrella was outdated, an eighteenth century concept, he said. He repeated his assurance thatNepal would not allow any power to indulge in any activities which would affect Nepal's friendly relations with its neighbours, particularly India. Hecited the example of his government disallowing the proposed conference of Kashmiri separatists in Nepal and added that his country was committed to thesecurity of India. He also favoured free trade with India as Nepal was a land-locked country.39In a substantial concession made during Adhikari's visit, India agreed to provide additional transit facilities for Nepalese goods at Kandla and Bombay,customs clearance at another point in Raxaul and decided to continue discussions at "appropriate levels" on the review of the 1950 Peace and FriendshipTreaty. The transit of goods would take place in customs-sealed containers via the shortest designated railway routes. The joint communique issued on 12April by the two Prime Ministers said that they were "heartened" by the absence of any major problems between New Delhi and Kathmandu.40188(Subsequently India agreed to remove all restrictions on the "material content of Nepalese goods exported to India".41Political instability was becoming a feature of Nepalese politics also. The elections were not throwing up any clear verdict. In the last elections theCPN (UML) had emerged as the largest party but was short of an absolute majority. It had to depend on the support of the smaller parties, especially theRashtriya Prajatantra Party (RPP) for survival. The Communist government collapsed in about six months and recommended dissolution of parliament in mid-June1995. Fresh elections saw the emergence of the Nepali Congress as the largest party but again short of an overall majority. A compromise candidate withinthe faction-ridden Nepali Congress, Sher Bahadur Deuba took over as Prime Minister.MAHAKALI AGREEMENTOne of the most significant developments in India-Nepal relations was the initialling in January and the signing on 12 February 1996 of a treaty on theMahakali river basin. The treaty was initialled in January in Kathmandu by the then Foreign Ministers of India and Nepal, Pranab Mukherjee and Dr. PrakashChandra Lohani. They also signed a second agreement for the construction of twenty-two bridges on the Kohalpur-Mahakali sector of the East-West Highway.The treaty signed by P.V. Narasimha Rao and Sher Bahadur Deuba in New Delhi -marked a notable breakthrough in bilateral relations on the sharing of waterand electricity from the river Mahakali bordering the two countries. The treaty envisaged, in addition to the development of Sharada and Tanakpur barrages,the construction of the massive 2,000 MW Pancheswar power project over a period of eight years. The joint harnessing of water resources of the Mahakalicarried the promise of greater prosperity for Nepal and immense benefit for areas in Bihar and UP bordering the Himalayan kingdom in the spheres of irrigationand flood control.42Deuba also indicated that there was still divergence between the perceptions of the two contries over the 1950 treaty, but he expressed the hope that outstandingbilateral issues would be resolved to pave the way for enhanced cooperation. He claimed that the Mahakali agreement had created a positive impact in Nepal.His country too was drawing inspiration from the Indian experience of democracy.43 He told a press conference that his country, though bound by the 1950treaty, had the right to buy arms from wherever it liked at cheaper rates.44According to the constitutional position in Nepal, the Mahakali treaty had to be approved by a two-thirds majority of the Pratinidhi Sabha. This was notwithout its problems. A section of the Communist Party of Nepal was opposed to the treaty, and was raising a number of issues. However, the dominant sectionled by Madhav Kumar Nepal, secretary general of the party determinedly189worked for its endorsement and finally the treaty was approved by a two-thirds majority on 22 September 1996. Almost all the political parties in Nepalhailed the ratification of the treaty, describing it as a "landmark" in the history of Indo-Nepalese relations and expressing their confidence that theimplementation of the treaty would immensely benefit Nepal.45While the treaty ushered in a new era of Indo-Nepalese relations, not all the problems could be wished away. There would be pinpricks galore, as our earlieranalysis has shown. The 1950 treaty would remain a major issue for Nepal. It was time India gave earnest consideration to its revision consistent withthe country's security concerns. In the nature of things, India had to show greater consideration to its land-locked small neighbour with whom it sharedso much history, geography and mythology.ECONOMIC TIESTrade with India remained a complicated problem. Many ultra-nationalist Nepalese tended to believe that there was a so-called secret document of 1991 whichdid not become an official agreement. India, in their view, was imposing a colonial trade regime on Nepal, selling it overpriced goods and excluding itfrom cheaper international imports. According to Nepal Rastra Bank figures of the first-eight months of the financial year 1993-94, India accounted forabout 28.3 per cent (12,777.8 million Nepalese rupees) of Nepal's total trade of 44,760.3 million Nepalese rupees. But the country's total trade deficithad seen a rise of 59.6 per cent (18,479.1 million rupees), the deficit with India amounting to 9,316.4 million constituting slightly more than half thetotal. It must also be noted that during this period Nepal's exports to India soared by 51.9 per cent (1,675.7 million) while imports increased by 38.4per cent, and were a good 10,992.1 million rupees.46 Taking the latest available figures, India's exports to Nepal rose from Rs 377 crore in 1994-95 toRs 536 crore in 1995-96, and imports rose from Rs 114.89 crore to Rs 166.95 crore.47Prime Minister Narasimha Rao had assured Nepal during his October 1992 visit that the problem of the trade gap with India was being looked into, althoughhe thought Nepal should not worry too much about having a minus trade with one country and plus with another.Nepal's exports to India were generally traditional non-manufactured items like pulses, wheat, flour, mustard seed, linseed, ghee, salseed oil, rice branoil, ginger, large cardamom, turmeric, cinnamon, fruits, herbs, raw jute, jute cuttings, hessian, handicrafts, etc., while imports from India includedvegetables, fruits, tea, baby food and other milk products, salt, cuminseed and pepper, eggs, live animals, cotton and synthetic threads, pipe and pipefittings, enamel and other paints, cement, electrical equipment and goods, textiles, transport vehicles and190spare parts, other machinery and parts, cosmetic goods, medicines, LPG gas, coal, rice, wheat, chemical fertilizers, etc.Indo-Nepalese economic relations are intimate, with India being a major participant in Nepal's economic development. India has extended help in almost allfields including air services, irrigation, electricity, water supply, communications, agriculture, education, and so on. India helped in the constructionof the Tribhuvan International Airport and the Tribhuvan Highway. Six airports were built with India's cooperation. In the transport sector, apart fromthe Tribhuvan Highway, India has built Mahendra Highway, Sidhartha Highway, Kathmandu-Trishuli Road, Hanuman Nagar-Fatepur Road, and Hanuman Nagar-RajbirajaRoad. In hydropower projects, India's chief contribution went to the Devighat, Surajpur, Tribhuli, Katya and the Fasre Khob projects. Similarly India'sassistance was crucial in the irrigation projects of the Chhatara, Kosi and Gandak canals. Other important areas of assistance were the maternity hospital,industrial estates, district hospitals, goitre control programme, police hospitals, Bir hospitals, etc.48 And now India had signed for a massive powerprogramme with the Mahakali agreement.India's total investment in Nepal's joint ventures and foreign collaboration rose from US $9,341,000 in 1986 to $12,817,000, in 1994, a rise of some 37per cent. While India had to take more steps to reduce Nepal's trade deficit it had to be noted that Nepal's problem of exports had been somewhat compoundedby the fact that the decline in agricultural productivity together with a high rate of population growth had caused some erosion of exportable agriculturalsurplus.49Finally we have to take into account what has been called ethnodemography. Even those Nepalese analysts who were very critical of India recognized the intenseethnodemographic relationship between the two countries with their 800-mile long open border as its symbol. "High rates of migration, cross-border marriageand family relationship and extensive migrant remittances are the principal features of this relationship," in addition to the nearly 100,000 strong Gorkhaand other regiments, comprising Nepalese citizens, in the Indian military and paramilitary forces adding another dimension to this relationship, as oneanalyst, highly critical of India, put it.50 According to this analyst, nearly three-fourths of the first generation of Nepalese migrants to India hadacquired citizenship-related rights, while over 50 per cent of Indian-born migrants in Nepal had received Nepalese citizenship. There were no precise figureavailable but it was believed that there were anywhere between three to five million people of Indian origin in Nepal.191NOTES1. V.P. Dutt, India's Foreign Policy, Vikas Publishing House, New Delhi, 1984 and 1987. Also see the author's India and the World, Sanchar Publishing House,New Delhi, 1991.2. For a reference to the treaty, see ibid.3. Asian Recorder, 26 March-1 April 1990, p. 21073.4. See Times of India, 30 March 1990.5. The Hindu, 9 April 1990.6. Indian Express, 17 April 1990.7. Times of India, 23 April 1990.8. Times of India, 6 June 1990.9. See exclusive interview of India's External Affairs Minister, I.K. Gujral, in Rising Nepal, Kathmandu, 1 June 1990.10. The Statesman, 9 June 1990.11. Asian Recorder, 23-29 July 1990, pp. 21255-6.12. See The Hindu and other newspaper reports of 6-8 August 1990.13. Hindustan Times, 8 August 1990.14. Ibid., 27 October 1990.15. Times of India, 15-18 May 1991.16. Times of India, 10 June 1991.17. Hindustan Times, 28 July 1991.18. Rising Nepal, 11 July 1991.19. Ibid., 7 August 1991.20. Commoner, Kathmandu, 11 October 1991.21. Rising Nepal, 9 March 1993.22. The sober analysis was enunciated by K.C. Shyam, Civil Engineer, Department of Water Supply & Sewage, Kathmandu in Rising Nepal, 13 March 1993.23. Ibid.24. Statement by Minister Ram Channa Paudel in the Pratinidhi Sabha, Hindustan Times, 26 February 1993.25. The Hindu, 7 December 1991.26. Indian Express, 9 December 1991.27. Hindustan Times and Times of India, 21 and 22 October 1992.28. Ibid.29. Rising Nepal, 7 May 1993.30. Ibid., 30 March and 1 April 1994.31. Times of India, 11 June 1991. Apart from the potential of these issues for engendering mass disaffection against India they also became a part of domesticpolitics.32. The Hindu, 11 July 1994.33. See daily papers of 21,22 and 23 November, 1994.34. Interview in Indian Express, 22 November 1994.35. See Adhikari's interview with Economic Times, 3 December 1994.36. To take one instance of a mountain of perceived and fancied apprehensions and allegations regarding Indian policies and intentions, see Chaitanya Mishra'sarticle "Indo-Nepal Relations: A view from Kathmandu", in Shelton U. Kodikara (ed.)? External Compulsions of South Asian Polities, Sage Publications, NewDelhi, 1993, pp. 179-93. Some of the analysis of Indian objectives and ambitions is based on a so-192called secret agreement of 1965 that never came into being and another so-called secret document of 1991 which also did not become an official agreement.37. See Times of India, 1 December 1994 and 24 March 1995.38. Ibid., 10 April 1995.39. Hindustan Times, 10 April 1995. Also see the text of his speech at the India International Centre, 10 April.40. The Hindu, 13 April 1995.41. Times of India, 15 August 1996.42. Indian Express, 13 February 1996.43. Hindustan Times, 13 February 1996.44. Times of India, 14 February 1996.45. Hindustan Times, 23 August 1996.46. See Rising Nepal, 8 April 1994.47. Annual Report 1995-96, Ministry of Commerce, Government of India.48. See Shankar Man Singh, "Indo-Nepal Relations : Forging better ties", Rising Nepal, 29 April 1994.49. Idem in Rising Nepal,, 6 March 1994.50. Chaitanya Mishra, op.cit.193V SAARCSome ten years ago (December 1985) the seven-nation South Asian Association for Regional Cooperation was established with great fanfare/ but it was limpingsince then and only recently showed some promise of taking off. If one were to compare it with Asean, let alone the EC, it was still not out of its teethingtroubles. It remained enmeshed in internal political disputes and wranglings, particularly the troubles between India and Pakistan, even though, as weshall see presently, some progress had recently been recorded and events were just speeding up. The pleasantest summit was held in Pakistan in January1987 when hopes soared that the two youthful Prime Ministers of India and Pakistan, Rajiv Gandhi and Benazir Bhutto, would bridge the gap and provide aboost both to Indo-Pak ties and to SAARC. But subsequent events sent Indo-Pak relations plummeting to new depths and sullied the atmosphere for regionalcooperation. Other regional disputes also impinged on the growth of SAARC.If SAARC continued to dodder, it was not because of lack of fat documentation about projects and possibilities, diligently prepared by diligent officialsof the seven member nations, but because of paucity of political will. A SAARC secretariat had been set up in Kathmandu with the post of its chief executive,secretary-general, being rotated among member countries. The secretariat, with the cooperation of working groups of officials of the countries, preparedcommendably voluminous reports on possibilities of cooperation in trade, industry, commerce, health, education, women's welfare and child welfare, andso on. Their implementation would have boosted growth in many areas in the SAARC region but remained a hostage to political troubles among member countries.The first crisis came from Sri Lanka and involved India-Sri Lanka relations. As soon as President Premadasa took over in 1989, he began demanding the withdrawalof the IPKF and threatened to boycott the SAARC Summit scheduled for late 1990 in the Maldives unless it was so done. The SAARC Foreign Ministers' meetingin July 1989 was aborted. Even though the IPKF was withdrawn by the end of March 1990, the Sri Lanka President stayed away from the Male summit and insteadsent his Prime Minister D.B. Wijetunga.The Fifth Summit was attended, among others, by the new-and very temporary as it transpired-Prime Minister of India, Chandrashekhar and the new PakistanPrime Minister, Nawaz Sharif. Chandrashekhar strove to evolve a personal equation with Nawaz Sharif, but personal equations almost always got short shriftin the overall decline in the Indo-Pak relationship.194The Male summit decided to "immediately initiate steps" for launching joint ventures in cottage industries and handicrafts to "set the stage for promotingcollective self-reliance." The SAARC Secretary-General was asked to set up an experts' group to indicate the modalities. The Heads of State/Governmentasked the Standing Committee (of Foreign Ministers) to submit recommendations on the suggestion for the establishment of a SAARC fund, that would makeavailable moneys for identification and development of regional projects. The Summit accepted an Indian suggestion for giving importance to biotechnologyfor the long-term food security of developing countries and for exchanging expertise in genetic conservation and maintenance of germplasm banks and welcomedIndia's offer of training facilities. The Summit also directed the Council of Ministers to prepare a strategy for mobilizing regional resources. The SAARCconvention on narcotic drugs and psychotropic substances was signed by the Foreign Ministers. The Summit also decided to launch the special SAARC traveldocuments that would exempt its holders from travel within the region. The holders would include, apart from Supreme Court judges and members of parliament,heads of academic institutions, their spouses and dependent children. The Summit also underlined the need for early completion of the studies on trade,manufactures and services.2Consequently, a two-day SAARC workshop on "technology information and its linkages" was held in New Delhi on 24 September of the following year to considerspecific programmes in the areas of science and technology for implementation in member countries.3 A number of workshops were also held to explore avenuesof cooperation in many areas and many good and hefty reports were prepared by the experts, but they were unable generally to cross the hurdles of implementation.The second crisis for SAARC came from India and again involved relations with Sri Lanka. The Sixth Summit, scheduled to be held in Colombo on 8 November1991, had to be postponed because three members had expressed reservations, but chiefly India which refused to go there in the absence of the King of Bhutanwho had expressed his inability to participate because of domestic preoccupations.4 India insisted that the heads of all countries must be present forthe Summit to take place. There were other undercurrents too. India had been rattled at President Premadasa's attempt to isolate India and to bring bilateralproblems into the SAARC forum.The Sri Lankan government expectedly blamed India for the Summit disaster. In Colombo's view Mr. Rao was "adamant" and even rejected the Sri Lankan President'ssuggestion for informal consultations among heads of SAARC countries. Sri Lanka also pointed out that in earlier Summits heads of195government were sometimes represented by others. The Sri Lankan Foreign Minister said in that country's parliament that twice Pakistan President Ziaul Haqdeputed Prime Minister Junejo to attend the Bangalore and Kathmandu Summits.5 India's ostensible defence was that it was a Prime Minister of Pakistan whoattended the Summit and not a lower functionary. In any case it is not quite clear what India gained or what point had really been established by thisshow of strength.It was not India-Sri Lanka relations, however, that beset the development of SAARC with heavy roadblocks. It was the declining India-Pakistan relationshipthat constituted the Achilles' heel of regional cooperation. Even at the time of the aborted Colombo Summit the Pakistan Prime Minister, Nawaz Sharif,who had nevertheless reached Colombo as did Begum Khaleda Zia of Bangladesh, engaged in considerable India bashing in the dinner meeting hosted by PresidentPremadasa. Pakistan had lobbied at various Summits, with a few honourable exceptions, and at a number of ministerial-level meetings that SAARC should discussbilateral issues and was in favour of a change in the SAARC Charter that ruled out SAARC meetings taking up bilateral problems. India equally stoutly resistedthese attempts at involving other countries in purely bilateral issues. Pakistan had been making it amply clear that no worthwhile progress could be expectedunless India resolved the "core problems" of Kashmir to Pakistan's satisfaction.Nevertheless, the postponed Summit did take place in Colombo, although curtailed to one day and stripped of the usual frills that accompany such meets.Prime Minister P.V. Narasimha Rao participated, taking the heat out of India-Sri Lanka ties. SAARC had survived the crisis although it still limped along.The Summit called upon all member countries to take all necessary measures, including expeditious enactment of enabling legislation, to give full effectto their obligations under the SAARC regional convention on suppression of terrorism. The Summit statement accorded the highest priority to the alleviationof poverty in South Asian countries and to the question of child survival, protection and development. The declaration also commended the initiative ofMaldives drawing attention to the security of small states. The seven countires also agreed to work towards creating an institutional framework under whichspecific measures would be taken to liberalize trade between them and directed the intergovernmental group (IGG), set up on the recommendations of a SAARCcommittee on economic cooperation (CEC) to seek agreement on such a framework.6India urged the Summit to adopt a collective economic security system for the SAARC members. It wanted SAARC cooperation to ascend to the truly196regional, as distinct from a mere sum total of bilateral arrangements. Pakistan suggested that the Charter of SAARC should be modified to avoid "such disruptivepostponements in future" like the recent one. Lasting peace in the region, it said, could be achieved only if the countries abided by the UN Charter, fulfilledtheir bilateral and international commitments and settled disputes peacefully on the basis of justice and fairplay.7 No one else, however, raised the issueformally and a certain harmony was maintained, with President Premadasa anxious to make a success of the summit.A follow-up measure, the second SAARC Ministerial Conference on children met in Colombo on 16 September 1992 with a ringing call from President Premadasato achieve the five goals of welfare by the beginning of the next century: universal immunization of children, universal primary education, child nutrition,pure drinking water and adequate shelter. The conference deliberated upon the strategy to achieve these objectives.8 A meeting of the Governing Councilof the South Asian Cooperative Environment Programme (SACEP) was also held in Colombo on 23 September. It was commonly agreed that environment was an areaof common concern and required common action. The meeting drew up a programme of action for the next four years dealing with inter-state subjects likethe Himalayan ecology, river waters conservation, biotechnology and oceanography.9 As we have noted earlier, a good many reports were drawn up by expertsof the SAARC countries, but political disputes and tensions thwarted implementation in many cases.The jinx on the SAARC summits had not gone. The next summit scheduled in Dhaka for 12-13 December became a casualty of the aftermath of the destructionof the Babri Masjid in India. The large-scale violence that followed in Bangladesh and Pakistan despoiled the atmosphere for a summit. It was rescheduledfor 14-15 January but had to be postponed in view of the threats from extremist forces in Bangladesh to the security of the Indian Prime Minister. Indiamade it clear through the visit of a special envoy to Dhaka that the "atmosphere was not right" for holding the summit. Moreover Pakistan had declaredthat it wanted to amend the SAARC Charter and raise bilateral issues.10Eventually the Seventh SAARC Summit was held in Dhaka on 10-11 April L993. Only two of the leaders who had attended the First SAARC Summit (also in Dhaka)in December 1985 were there for the Seventh meet: the Bhutan King Jigme Singye Wangchuk and Maldives President Mamoon Abdul Gayoom. Rajiv Gandhi had beenassassinated, Ziaul Haq had perished in an aircrash, H.M. Ershad was cooling his heels in a jail in Bangladesh, J.R. Jayewardene had been succeeded byR. Premadasa and the King of Nepal had been obliged to become a institutional monarch.197The Summit passed off without serious hiccups. The leaders concentrated on a few vital issues, like economic cooperation and the bane of terrorism. Manymember states had begun to give more serious attention to making SAARC a useful economic instrument by which the gains of regional economic cooperationcould benefit the people of the region. Already the spade work was in progress for identifying areas and commodities for such preferential agreements andthe Council of Ministers had worked out "framework agreements" for the liberalization of inter-regional trade. The Seventh SAARC Summit renewed the pledgeto consolidate the gains of SAARC in expanding regional cooperation. A notable feature of the Dhaka declaration was the adoption of the South Asian PreferentialTrading Arrangements (SAPTA), envisaging liberalized trade among the seven member nations and calling for initiating necessary steps to begin the firstround of negotiations to exchange trade preferences among member-countries under the "framework agreement" signed by the SAARC Council of Ministers.The. declaration endorsed an integrated programme of action (IPA) on eradication of poverty in South Asia, trade, manufacture and services, environment,population, shelter, children, youth, disabled persons, women, science and technology, terrorism, drug trafficking, security of small states, people-to-peoplecontact, association of SAARC speakers and parliamentarians and South Asia Development Fund (SADF). However, no time frame was specified for the implementationof the preferential arrangements. The Summit reiterated the need for coordinated action to combat terrorism in the region.11 The Indian Prime Minister,Narasimha Rao, called for evolving common development for achieving common objectives. Speaking at a banquet in Dhaka he reminded the audience that "ourhistory, geography, cultures, languages, even our thoughts, display essential similarities of which we are all conscious." He pointed out that "internationallyour voice is better heard if spoken in unison." For all these reasons "we are determined to provide action, collaboration and mutual assistance to eachother in economic, social, cultural, technical and scientific fields."He was realistic enough to acknowledge that technical and cultural cooperation might languish for lack of more solid foundations of cooperation in economicareas. "With this realization dawning on us since the Male Summit two years ago, we have done much to identify the scope and direction the Associationshould take in the future", he said, and added, "What remains for us now is to demonstrate political will and wisdom.12But it was precisely that political will and wisdom that was not so easily available. The implementation of SAPTA, as of many other cooperative projects198among the SAARC countries, was held up because of political tensions among member countries, particularly between India and Pakistan. Nevertheless SAARCwas stumbling forward and gradually elements of cooperation were taking shape in many fields including education, health, child and woman welfare, drugcontrol, environment, poverty alleviation and science and technology. At the first SAARC Finance Ministers' Conference in Dhaka on 10 July Begum KhaledaZia, who was then Chairperson, averred that within SAARC "we are moving into the core area of cooperation reflected in the signing of SAPTA and adoptionof the report of the independent commission on poverty." Pro-poor plans, as the Seventh SAARC Summit had envisaged, had to be harmonized with open economiesand structural adjustment strategies. There was a consensus on the need for coordinated effort to alleviate poverty in the region.13 The social compulsionfor such a joint effort was evident from the fact that half of the world's poor lived in South Asia. SAARC countries also topped in infant and young mothersmalnutrition.By the time the Eighth Summit was to meet in New Delhi, some things were maturing from below, so to say. The smaller countries, joined in by Bangladesh(not really a small country) were increasingly determined that the benefits of economic cooperation must start flowing, that the SAPTA agreement must beimplemented and that each country must identify items for preferential treatment. Six countries—India, Nepal, Bhutan, Bangladesh, Sri Lanka and Maldives—hadalready submitted the list of commodities they would like to be included under SAPTA. Pakistan, still driven by animosity against India, was dragging itsfeet and stalling the finalization of its list of commodities. But it was coming under increasing pressure from other member countries to be forthcomingand could not afford to get isolated and finally handed in a long list for consideration by other member countries.14The SAARC Foreign Ministers meeting in New Delhi in April-end 1995 on the eve of the Eighth Summit formally agreed to SAPTA becoming operational from 8December and endorsed the exchange of lists of commodities for duty concessions among member countries. The launching of SAPTA was slated to coincide withthe tenth anniversary of the formation of SAARC.15 The SAARC Council of Ministers also agreed in principle to float a South Asian Free Trade Area (SAFTA)and establish a South Asian Development Fund (SADF) for economic and technical development of the region. They also agreed upon the expansion of the visa—exemptionregime for member countries.16In the first round of tariff concession India had allowed customs and excise relief on 106 items, Pakistan 35, Sri Lanka 31, Maldives 17, Nepal 14, Bangladesh12 and Bhutan 7. India also pledged Rs 20 million during 1995-96 for various199SAARC activities, while Pakistan pledged Rs 22 million, Bangladesh Takas 6 million, Bhutan Ngultrum 2 million, Maldives Rupiya 1 million, Nepal Rs 6 millionand Sri Lanka an equal amount.17 Already India had unilaterally announced tariff concession of nearly 50 per cent on a number of items for Sri Lanka. Theitems excluded industrial goods, except ceramics and to some extent tyres, and included items like blackgram, arecanut, clove, nutmeg, mace, chocolateand food preparations, articles of unvulcanized rubber, surgical apparel of rubber, porcelain goods, ceramic tableware and artificial leather products.18The Eighth SAARC Summit met in Delhi on 2-4 May 1995 with Pakistan Prime Minister Benazir Bhutto staying away and sending, instead, President Farooq AhmadKhan Leghari to attend the Summit. The Summit was characterized by the emergence of two trends. While all the member countries realized that tensions anddivisions were seriously impeding the development of regional cooperation in the manner that other regional organizations like EC and Asean were promoting,Pakistan and Nepal pitched for the organization to discuss bilateral issues. The Pakistan President said that he was aware that the SAARC Charter precludedthe discussion of bilateral issues, but he believed that "bold and decisive initiatives" would help achieve progress and offered the example of EC andAsean when progress was possible only after the political issues had been meaningfully addressed.19 It may be clarified in parentheses that countries inthese regional organizations may have sorted out some of their bilateral political problems, but it was invariably done outside the ambit of the regionalorganization and not through their discussion in the forum of the regional organization.The Nepalese Prime Minister Manmohan Adhikari, making a similar plea, observed that SAARC should face challenges and be ready to discuss bilateral issuesalso to overcome past prejudices. The Maldives President warned that mutual suspicions among members could jeopardize the future of the decade old SAARC.Begum Khaleda Zia, Prime Minister of Bangladesh, regretted that member countries were still deeply divided, and the King of Bhutan Jigme Singye Wangchukfavoured member countries manifesting the will to make use of the informal bilateral consultations during summits to resolve existing problems and difficulties.The new Prime Minister of Sri Lanka, Chandrika Kumaratunge, who perhaps made the best speech at the Summit, focused on the development of a free tradearea and regional economic cooperation. None of the other countries, apart from Pakistan and Nepal, asked for deliberation by the regional organizationof the contentious issues that troubled relations between some member countries. Narasimha Rao of course ruled out SAARC's mvolvement in bilateral issues.20He too emphasized economic development.200Quite clearly SAARC has been greatly stymied by internal bickening. Some member countries have been raising one or the other bilateral dispute as the coreissue in need of resolution for any meaningful development in regional cooperation. SAARC's potential was not being fully tapped and it was lagging waybehind thriving regional organizations like EC and Asean. However, SAARC was beginning to find its feet, even though somewhat shakily, and if the new trendcontinued, of more and more member countries pushing forward the area of regional cooperation and insisting on the recalcitrant ones to fall in line, asthey had done in the case of SAPTA and SAFTA, then willy-nilly SAARC would be taking important steps towards regional cooperation and integration.SILVERLININGThe most heartening developments on the SAARC front started taking place towards the end of 1995. SAPTA came into force on 7 December 1995 after ratificationby all member countries. India had offered 106 items for tariff concessions between 10 and 100 per cent, while other countries gave concessions on thebasis of their capacity and requirements. Pakistan offered 35 items with 15 per cent duty concession on 15 items for LDCs and the rest for non-LDCs with10 per cent concession. Among the major items identified were dry ginger, medicinal herbs, pepper, cloves, bamboo, raw jute, vegetable seeds and betelleaves21. Pakistan had still not granted MFN status to India, but that was another matter and was to be decided bilaterally between the two countries andcame under the World Trade Organization (WTO) Charter.Leaving aside Pakistan, the other countries in South Asia were prodding India to open its markets further by rolling up licensing curbs on imports and extendingspecial treatment to the "weaker economies". Over 30 per cent of Nepal's global imports were really from the SAPTA countries, whereas India's intra-regionalimports were a meagre 0.4 per cent of its global imports. Bangladesh was also facing a massive adverse trade balance with India, importing $540 millionworth of goods while exporting only goods worth $40 million.22India was gradually responding more and more favourably, and it was reported that India was entering the second round of South Asian trade negotiationswith an offer for tariff reductions for some 1,200 items.23 The SAARC countries were also extending their discussions and deliberations to usher in a SouthAsia Free Trade Area (SAFTA). The most immediate developments were, however, taking place by going ahead wherever natural economic cooperation was calledfor between different groups of SAARC nations201without waiting for the entire group to move forward. This came to be known as the sub-regional strategy of economic cooperation within SAARC.The initiatives for such "parallel ties" were coming from Bangladesh, Nepal and Bhutan. The two-day SAARC Council of Ministers meeting in New Delhi in thethird week of December 1996 carried this process further. India responded favourably to the suggestion for the creation of two sub-regional groups insidethe parent organization, one possibly consisting of north-eastern states of India, Nepal, Bhutan and Bangladesh and the other of the southern states ofIndia, Sri Lanka and Maldives. There were proposals for cooperation in these sub-regions in the areas of energy, transport, navigation and environment,as feasible in each circumstance.24There was initial opposition from Pakistan as it was apprehensive that this could be part of a stratgy to isolate it within SAARC, but India denied anysuch intention and expressed its willingness to extend economic cooperation with Islamabad.25 Faced, however, with strong support for the strategy froma number of SAARC countries, Pakistan gave up its opposition, and even Sri Lanka overcame its reservations. If these trends got strengthened and deepened,as seemed likely, SAARC was set to play a far more meaningful role in the extension of regional cooperation in the world.NOTES1. For a discussion of the period between 1985-1989 see the author's India's Foreign Policy, Vikas Publishing House, 1987 and 1994.2. The Hindu, 23 and 24 November 1990.3. Hindustan Times, 24 September 1991.4. Indian Express, 7 November 1991.5. Hindustan Times, 13 November 1991.6. See The Statesman and The Hindu, 21 and 22 December 1991.7. See also Times of India and Hindustan Times, 22 December 1991.8. Hindustan Times, 17 September 1992.9. Ibid., 24 September 1992.10. India's Minister of State for External Affairs, R.L. Bhatia's statement in Dhaka, 10 January, Indian Express, 11 January 1993.11. The Hindu and The Statesman, 13 April 1993.12. Hindustan Times, 12 April 1993.13. Ibid., 11 July 1994.14. See, Times of India, 31 March and Hindustan Times, 15 April 1995.15. The Hindu, 1 May 1995.16. The Statesman, 2 May 1995.17. Times of India, 2 May 1995.18. Economic Times, 24 April 1995.20219. Times of India, 3 May 1995.20. Press conference as the new Chairman of SAARC, Hindustan Times, 5 May 1995.21. The Hindu, 8 December 1995.22. Seminar organized by the Federation of Indian Chambers of Commerce and Industry (FICCI), with the participation of government and business representativesfrom Nepal and Bangladesh, New Delhi, 10 January 1996.23. Times of India, 7 February 1996.24. Prime Minister I.K. Gujral's press conference, 20 December, The Statesman, 21 December 1997.25. Ibid.203Chapter 6 NeighboursA. INDIA AND CHINA: ROAD TO RECOVERY BACKGROUNDIndia-China relations have been marked by many turns and twists.1 But these were truly the symptoms and manifestations of the more fundamental problemsof adjustment, of finding a new level of mutually acceptable relations in the new world in which they found themselves after the Second World War. Theywere not just two modern nation-states emerging on the world scene as independent entities, but also ancient civilizations with deep historical memories,not necessarily conscious memories, but often running as subterranean currents, influencing minds and attitudes. Their glorious past, their ancient history,their size, resources and the potential for development prompted widely-held the assumption that they were candidate big powers. That did not facilitatethe process of adjustment, for it tended to fuel the normal sense of rivalry.In the case of India a hurt nationalism in relation to China, in China's case an acerbic nationalism resentful of non-recognition by some of the influentialpowers acted as roadblocks to normal behaviour towards each other. Neither could accept an inferior or even lesser position than the other. Two ancientcivilizations with their deep undercurrents of pride were finding mutual adjustment an agonizing process. When two such civilizations meet as neighbours,the process of adjustment was even more tortuous.There were not many older civilizations that had survived, that were big countries and that were neighbours too. The example of Germany and France wouldcome to the mind of the readers, and how many hundreds of years it took them to achieve a peaceful balance of relationship. Indeed what finally broughtthem together was common prosperity. So many intractable issues and differing perceptions of interests suddenly dissolved into thin air as higher and higherlevels of prosperity spread through the populace of the two countries.The Himalayas kept India and China peacefully separate, and distance lent some enchantment, but modern communications broke down the physical204barriers and brought them face to face at a time when they were going through an acute phase of nationalist stirrings and hyper-sensitive responses to foreigncountries, because of their experience with imperialism and rather late emergence as nation-states, abrasive responses that rubbed off against each othertoo. Jawaharlal Nehru spoke about India's tryst with destiny on 15 August 1947, the day of independence. Mao proclaiming the establishment of the People'sRepublic of China on 1 October 1950 declared that China had stood up.This is the sum and substance of the India-China problem.These historical difficulties were aggravated by the very sharp and hostile activism of international politics in and around China as well as India. Theforeign policies of almost all countries were becoming hostage to the cold war. Jawaharlal Nehru wanted to draw China into the mainstream of the internationalcommunity and to humanize the Chinese revolution and bring about normalcy in its responses to the rest of the world. But driven by the logic of the coldwar, the United States administration was not prepared to compromise with China and so the mistakes that were made in relation to the Russian revolutionwere repeated and compounded in the case of China. The Sino-U.S. conflict and subsequently the Sino-Soviet conflict both had a disastrous impact on Sino-Indianties.Any detailed consideration of these developments is outside the scope of this volume and these difficulties have been dealt in the earlier writings of thisauthor. This is by no means to suggest that bilateral and regional issues were not important but to put these issues in a context that had critical bearingon their influence on their mutual ties. Again, these issues have been discussed at some length in the author's earlier writings and can only be mentionedin passing to complete the background for taking up the story from where we left it earlier.SOME MAJOR ISSUESGenerally speaking, perhaps for China, Tibet was the core issue and for India it was certainly the border dispute. Earlier after the emergence of the twonations into independence Tibet cast its shadow on India-China relations. As Jawaharlal Nehru remarked, it was not quite clear from whom the Chinese wantedto liberate Tibet, but China had been talking darkly of the activitieees of imperialist forces' while sending its army to occupy the entire region. Indiahad long-standing, traditional, cultural and regional ties with Tibet, but had no desire to maintain any presence that might be construed as imperialistic,and so surrendered the British-maintained installations in Lhasa. China's military occupation of Tibet triggered off a mass exodus of Tibetans headed bythe Dalai Lama to India that certainly had a highly negative impact on India-China relations.For many years this rankled with Beijing a great deal, although it should have realized that from Beijing's point of view, given the circumstances, the205course of action followed by successive Indian governments was the least undesirable development. The Dalai Lama was retired to Dharamsala with due respectand regard for his position and asked to look after the material welfare and religious and cultural needs of the Tibetans who had fled to India, but hewas unable to take part in any serious political activity, or head any government in exile. It is quite another matter that he continued to remain thesymbol of Tibetan identity and authority and that Beijing has not had any eminent success in arriving at a reconciliation with the Tibetans. But that wasa matter in which India did not come into the picture.The extreme Chinese sensitivity and what appeared to be a sense of insecurity about its control was evident from Beijing's insistence on a reference toTibet being a part of China in every high-level meeting with India since the process of improvement of relations began. From Rajiv Gandhi's visit to Chinain December 1988, India took recourse to a dual-track statement. India acknowledged that Tibet was a region of China, but also that it enjoyed autonomy.It was not stated formally that one was contingent on the other, but the two elements remained together in India's official statements with the Chineseon the subject. The Chinese appeared to be satisfied with this formulation.So far as India was concerned, the central issue was the border problem. The border conflict had poisoned India-China relations. In India's view the realreconciliation would follow a territorial settlement. However, there has been a substantial change in India's approach to the issue. For a number of yearsIndia insisted that a solution to the border issue should be accorded priority so that India-China ties could be normalised, while China advanced the viewthat the two countries should normalize their ties, build confidence and over the years, gradually, a mutually amicable settlement of the border issuewould emerge.2India changed tack with Rajiv Gandhi's visit to Beijing in December 1988 and decided to push ahead with relations with Beijing without waiting for a bordersettlement. That the normalization of relations was not contingent upon a settlement of the border issue was confirmed by President R. Venkataraman's visitto China in May 1992, and by what he has written regarding his proposal to emphasize the creation of conditions of tranquillity on the border.3 The Chinesetoo made one concession, at least a verbal one. They now acknowledged in their statements that the border problem was a serious roadblock and needed redressthrough serious negotiations.The border issue was complicated by additional, allied problems. Like the question of the Karakoram Highway that had given China direct access, albeit adifficult one, to Pakistan, made at least partially possible by Pakistan giving away some territory that India claimed to have been in illegal occupationof Islamabad. Much of the rest of the highway was under territorial dispute between India and China. Sikkim's accession to India was yet to be recognized206by China. India had taken a cool stance on this issue in order to deny China a major bargaining chip. Since the deed was already done, India could sit prettyand let China become gradually reconciled to it.Only a few years earlier Chinese support to insurgency in India on the pretext of spreading the revolutionary tide seriously impeded the improvement ofrelations. This support, actual or verbal, disappeared from the limelight, but it pointed to the "hidden dangers" (to use a Chinese phrase) in this relationship.Hopefully, experience transmitted the reality that such actions did not promote the revolution, only bitterness with other countries.While we are on the issue of divisive factors, we may note, as we shall be discussing it subsequently too, that Pakistan, as at one time South Asia generally,remained an important factor in India-China relations for good or bad, generally for bad. There could be no doubt that the initial momentum to China'srelations with South Asian countries came from the quarrel with India. Beijing's attempts for many years were to set one South Asian country after anotheragainst India and to use the "contradictions" between India and these countries to widen the gap between them and India. This thrust was particularly evidentin relations with Pakistan, Nepal and Bangladesh. Only recently was there a shift in Beijing's general stance in this region and the abandonment of anovertly hostile anti-Indian slant to its policies, opening the prospects for a healthier and more balanced relationship.Beijing found its greatest opportunity in Pakistan, with a population of over a hundred million, placing it among the top twenty countries of the world,and with a standing army equipped with the most modern weaponry that could take its place among the ten most advanced armed forces, as a counterpoise toIndia. Beijing (and Washington too at the time) grasped the potentialities early enough and developed a special relationship with it virtually unmatchedby any other country. Over the years Beijing became a major source of supply of arms and equipment to Pakistan. Islamabad's losses in the 1965 and 1971wars with India were made up by Beijing, and although recently Beijing's arms supply was taking a commercial aspect, a great deal of the earlier shipmentwas either gratis or at throwaway prices.Prime Minister Mohammed Khan Junejo of Pakistan acknowledged, while welcoming China's Defence Minister Zhang Aiping in July 1985, that Pakistan "today standsself-reliant in many of its defence requirements only because China had so generously transferred its technology and know how. It was with the PRC's assistancethat the Heavy Mechanical Complex at Taxila, the backbone for other major industrial projects, was set up. The factory at Taxila to rebuild tanks, theHeavy Forge and Foundry, the Aeronautical Complex at Kamra and the textile machinery manufacturing units" were all monuments to Chinese aid, Junejo said.4China extended significant economic assistance too. China also lent full support to Pakistan on the Kashmir issue, calling for self-determination and207plebiscite to ascertain the wishes of the people. It ruled out an independent Kashmir—which it still does even though its formulations on Kashmir have revertedto the stand it adopted during the early fifties when a certain warmth marked the relations between India and China.China's ties with Pakistan were further cemented by the war in Afghanistan which saw China, USA and Pakistan on the same side and which the Chinese seemedto regard as a Soviet pincer movement against Beijing in tandem with their relationship with India and Vietnam. But even counting without the impact ofSoviet armed forces' entry into Afghanistan, Beijing had established a deep relationship with Pakistan that had nothing to do with ideology or revolution.To cap it all (as we shall discuss later also) China gave critical assistance to Pakistan in the nuclear and missile field. All this pointed to a long-rangestrategy in which Pakistan occupied the pride of place. Nevertheless, for various international and domestic reasons, which have already been discussedin the author's earlier volume, there was a change in Beijing's approach and that was India's opportunity too. That opportunity was amply utilized by RajivGandhi in December 1988. Subsequent developments, that are the theme of this chapter, saw a further mend in Sino-Indian ties.AFTER THE THAWThe gradual improvement of Sino-Indian relations brought about a proliferation of exchanges in almost all fields—science, technology, agiculture, planning,industry, trade, health, medicine, sports, arts and so on—and visits of government leaders, political personages, specialists, technicians, academics,among numerous others, apart from agreements on cultural exchanges, festivals, exchanges of students and scholars and the like.Although Rajiv Gandhi was voted out of power and a new Janata Dai-National Front government took over in New Delhi by the turn of 1989, there was no basicchange in foreign policy. The new Foreign Minister, I.K. Gujral continued with the policy of seeking improvement of ties with Beijing, but there were nodramatic developments. Among the two important events during this government's tenure was the visit in March 1990 of Chinese Foreign Minister, Qian Qichen,who subsequently became a Vice Premier in addition, indicating his importance in the governmental hierarchy.As noted earlier about the concession that China was making in regard to the importance of the border dispute, Qian told newsmen in New Delhi that Chinastood for an expeditious solution to the boundary dispute. Similarly in line with the new formulation in regard to the Kashmir question (or rather thereturn, generally speaking, to an earlier formulation used during the early Fifties) the Chinese Foreign Minister said Beijing believed that India andPakistan should peacefully settle the Kashmir problem through mutual negotiations. The dispute208had its origin in the past, he said. He contended, replying to a suggestion about a Chinese media bias in favour of Pakistan, that the media had not takenany sides while reporting the events in Kashmir. He also ruled out any Chinese role as a mediator in the dispute between India and Pakistan.5 Accordingto both sides his visit strengthened the growing ties between the two countries.The other significant development was the second meeting of the Joint Working Group which had been set up to deal with the border problem and allied issues.The working group went about its work with great seriousness of purpose and earnest effort. The first meeting was held in Beijing in July 1989, the secondin New Delhi on 31 August 1990. A significant result of this meeting was the agreement on a mechanism under which the military personnel of the two countrieswould meet from time to time at an appropriate level to maintain peace on the border.6 The two sides also discussed further promotion of mutual ties.As we have noted in the earlier volumes, India-China relations were considerably boosted by the growing propinquity of their perceptions on various world,issues affecting them and the developing countries. This commonality of approach and certain common needs and demands, unlike in the sixties and earlyseventies when there was substantial divergence in their foreign policy stances and approaches, helped the process of reconciliation. Despite their caution,the Chinese too acknowledged the need for a broader dialogue on world issues. Premier Li Peng told a journalists' delegation that India and China shouldexchange views on the new international order. Based on the Five Principles of Peaceful Coexistence, content could be added to the new international order.That was a task they shared, he said. "In the recent past China and India have more and more similar points on major international issues and I'd say thisis a positive feature", the Chinese Prime Minister affirmed.7Li Peng acknowledged the existence of mutual suspicions and put it down to the "abnormal" relations between the two countries and hoped that this woulddissolve with greater contacts. "For the two countries to live in harmony, we should increase contacts, high-level contacts and people-to-people contacts,he said.During this time the Government of India had changed hands twice. The National Front government fell under the weight of the contradictions among its supporters,particularly the BJP which had earlier propped it up and then withdrawn its support, towards the end of 1990 followed by the nine-day wonder of the Chandrashekhar government (which lasted less than six months). Before a Congress government re-emerged in June, Rajiv Gandhi had been killed by a suspected LTTEfanatic, and a new Congress government assumed office under the stewardship of P.V. Narasimha Rao.Relations with China continued on the mend as the new government in India was as keen as the previous ones on improving ties with Beijing.209LI PENG VISITA significant step in the process of reconciliation was the visit of the Chinese Prime Minister, Li Peng, on 11-16 December 1991 to New Delhi. On the eveof his visit Li Peng told an Indian journalist that sincerity and patience was needed to resolve the border dispute. There was need to develop a consensuson both sides for a solution and it would be a protracted process. Meanwhile the border was calm and "we have established a system of regular meetingsbetween officials of the two countries. And in case of any accident, the border or the frontier officials of the two sides can meet and solve the problemson the spot by immediate consultations", he said.8Also on the eve of his visit, a spokesman of the External Affairs Ministry of India reiterated that "Tibet is recognized by India as an autonomous regionof China and the Dalai Lama is held in high esteem as a spiritual leader." It was also recognized, he said, that the Tibetans living in India would notengage in political activity and he made it clear that the Chinese authorities were fully aware of India's "clear, consistent and unchanging stand." Earlierthe Chinese envoy in India at a press conference had described Tibet as an "important problem" between the two countries and expressed his unhappinessat India's handling of demonstrations by the Tibetan exiles.9 Despite this so-called "unhappiness", the fact was that the government had rounded up a numberof Tibetans and during the Chinese Prime Minister's visit had used force to break up a Tibetan demonstration that was taking place miles away from wherethe Chinese guests were.In an appraisal of Li Peng's visit, this writer had said at the time that it was not a leap, but a step forward. Using the yardstick of the balance of interestsof the two countries, the visit had ended on a positive note and could be regarded as a step forward in the process of conciliation. The most importantgain of the visit was a deepening of understanding and mutual confidence, so essential for the resolution of bilateral problems. The atmosphere betweenIndia and China had remained vitiated for many years, in which an obsessive and aggressive Chinese nationalism played no mean role, just as India's injurednationalism made its own contribution. It was necessary to clear the cobwebs of mistrust that had gathered around the prism through which the two sidesviewed each other for any meaningful progress to take place on other issues. Rajiv Gandhi's sojourn to Beijing in December 1988 was a dramatic beginningof the process of dispersing the clouds, and this follow-up visit by the Chinese Prime Minister accelerated the tempo in the regaining of mutual trust.To take note of some of the developments in this visit, India and China pledged to make efforts to arrive at an early and mutually acceptable solution tothe boundary question through friendly consultations. In this connection, the two Premiers asked the Joint Working Group to step up its work in searchof an earliest possible solution. The two sides also expressed their determination to210maintain peace and tranquillity on the border and decided upon periodic meetings between the military personnel in the border areas to ensure tranquillity.They also agreed to resume their border trade and to encourage the expansion of their economic relations and joint ventures. The two Prime Ministers statedthat their countries would "actively engage in cooperation in the fields of health, education, energy and agriculture." It was also agreed that India wouldopen a consulate in Shanghai and China in Bombay (now functioning) and that festivals of India and China would be held in each other's country. Li Pengalso declared that China was willing to discuss any issue with the Dalai Lama except independence.The decision to reopen border trade, expand economic relations and establish consular relations in Shanghai and Bombay was designed to enhance mutual understanding.The Indian formulation on Tibet as an autonomous region of China was repeated to the dismay of many Indians who were rather put out by the continuing plaintivereference by China to anti- Chinese activities by the Tibetans in India.10 Some observers were dismayed at the lack of any reference in the joint communiqueto some of India's major concerns, but government leaders insisted that India conveyed in a forthright manner to the Chinese delegation the country's deepconcern over Beijing's supply of high-tech weapons to Pakistan and the state-inspired terrorism in which that country was indulging both in Kashmir andPunjab.11 The Defence Minister, Sharad Pawar also gave a detailed account of Pakistan's activities to Li Peng to which the latter was reported to haveresponded that China was opposed to all forms of terrorism.12The External Affairs Minister, Madhavsinh Solanki also told the Parliamentary Consultative Committee attached to his Ministry that the Chinese leader'sattention was drawn to Chinese arms supplied to Burma (officially Myanmar) finding their way to activists of the United Liberation Front of Assam. TheChinese leader responded that compared with the past, the level of the arms relationship between China and Burma had declined considerably as had the numberof high level visits. He also offered the explanation that it was the need to curb smuggling and to maintain border trade which impelled Beijing to dealin the manner that it was doing with the SLORC regime in Rangoon. To the expressions of concern about Pakistan's support to terrorism, Li Peng assuredIndian leaders that New Delhi's concern would be conveyed to Islamabad at an appropriate time.13India-China relations have had an important bilateral component, but there was an international dimension too. There were problems to be sorted out betweenthe two countries, yet there was a larger picture that was of equal relevance, and both the bilateral framework and the larger picture had to be kept inperspective, as mentioned earlier. The two countries were now part of a rapidly integrating world. They were both facing similar challenges and common211pressures. That was apparently the reason why the two Prime Ministers in their talks were officially stated to have expressed their opposition to "internationaloligarchies",14 undoubtedly referring to the attempt at dominance by a few developed countries of the international economic order and the penchant ofsome to give political orders to other countries on matters impinging on their security. There was considerable convergence of perceptions and policiesof the two sides on global issues which facilitated the process of normalization.Some criticism was voiced at home, but more particularly abroad, that the talks in New Delhi favoured the Chinese. Beijing secured accommodation on issueafter issue without yielding on any significant point on its own, it was alleged. While Li was facing international opprobrium for his policies towardsTibet, he had elicited an unequivocal Indian declaration that Tibet was part of China, with Indians apparently getting little in return, whether it wasthe Kashmir issue or Pakistan's support to militancy, the New York Times said.15It was also reported that Pakistan was quite happy with the outcome of Li Peng's visit. The deletion of any reference to the Kashmir dispute and Beijing'ssupport to Islamabad's proposal for a nuclear non-proliferation regime in South Asia was noted with quiet satisfaction. As Pakistan's Foreign Secretaryput it, the visit had not sent "any hairy signals to Pakistan."16 Sino-Pakistan ties had remained unaffected by the improvement of Sino-Indian relations.Defending the outcome of the visit, Prime Minister Narasimha Rao said in the Rajya Sabha that "we have not changed one comma from what we have always said."He believed the visit had "firmed up and gone a little ahead" in the normalization process that had begun in right earnest in December 1988. He was notparticularly concerned that the Chinese Prime Minister's visit did not bring about a breakthrough on the vexed boundary issue. India would have no optionbut to "match the kind of diplomacy, patience and staying power" of China; "we have to be very careful in dealing with this matter", he said. The firstpriority, in his view, had to remain the maintenance of peace and tranquillity on the border. The talks had resulted in going a little ahead in that direction.The Prime Minister pointed out that the Chinese Premier's statement on Tibet "is not a commonplace statement when he makes it on the Indian soil." Therewas complete concurrence of opinion between the two countries, he said, that development should be the matter of utmost priority for both countries. Healso hailed China's request to participate in the next meeting of the Non-Aligned Movement at Jakarta next year as an observer, describing it as a majordevelopment.17FOLLOW-UP AND R.V.S VISITLi Peng and Narasimha Rao had another opportunity of meeting at the UN Security Council summit in New York on 1 February next year and to review212bilateral relations. They decided to call a meeting of the Joint Working Group (JWG) at Foreign Secretaries level in New Delhi to strengthen the processof peace and tranquillity on the border. They also agreed to facilitate greater mutual confidence in their relations.18The JWG met the fourth time on 20-21 February 1992 and decided to institutionalize meetings between military personnel of the two countries by agreeingthat they would take place at Bumla Pass in the eastern sector and Spanggur Gap area in the western sector in June and October every year. Radio telephonelinks would replace semaphore signalling by flags, it was decided. The two sides believed that the stabilization of the line of control would contributeto the resolution of the border issue.19President R. Venkataraman's visit to China in May marked the culmination of the gradual process by which India put the border question on the back burner.R.V. shifted the emphasis to the exploration of various forms of cooperation.20 His host Chinese President Yang Shangkun (since retired) and the IndianPresident emphasized the need to strengthen economic ties in the light of China's opening to the world and India's liberalization programme. PresidentYang believed that the economic development of China and India constituted a stabilizing factor for peace in Asia and would not pose a threat to any othercountry. His suggestions included the pursuit of joint ventures not only in each other's country but also in third countries. The two countries were richlyendowed in natural resources, he said, and apart from the political aspects of bilateral ties, the two needed to cooperate in areas like science and technology,culture, sports and agriculture.21Some of the troublesome issues were, however, referred to in the Indian President's talks with Prime Minister Li Peng. The basic thrust of Li's stand wasthat more time and patience were needed for a settlement of the boundary question. Tibet too came up for reference. The Chinese leader, as usual, was nothappy with the Dalai Lama's activities and utterances. The Indian President repeated the Indian position that Tibet was an autonomous region of China.He also said that India did not support the Dalai Lama's political activities. He told the Chinese Prime Minister that Pakistan was aiding separatist movementsin India. Li Peng stated the Chinese view (the revised formulation) that India and Pakistan should have good-neighbourly relations and should resolve bilateralproblems in the spirit of the Simla Agreement and resolutions of the United Nations22 (something for both countries in this formulation!).The Indian President also met the Secretary-General of the Communist Party and Chairman of the Military Commission, Jiang Zemin (now President of the Republicalso) and exchanged views on the new economic policies being pursued by both countries. The President on his return after his six-day visit made no bonesabout his view about playing down the boundary question and concentrating on building confidence measures. He had stressed the need to213exchange information about the movement of forces and cautioned about tensions arising from the proximity of the forces of the two sides on the border.23It might have been a coincidence, but certainly the oddity could not be missed, that while the President was still there, China conducted its biggest-evernuclear test, as if to convey a message about China's power. Even during Rajiv Gandhi's visit that melted the ice in India-China relations, Beijing hadconducted a space shot. That each time it was just a coincidence was a bit hard to accept, and this without taking into account China's armed attack onVietnam while then External Affairs Minister Atal Behari Vajpayee was still on the Chinese soil.MORE CONFIDENCE-BUILDING MEASURESThe Prime Ministers of India and China had yet another occasion to meet at Rio de Janeiro (Brazil) at the time of what was called the Earth Summit. Thebackdrop to their discussion was the American pressure on India to halt its space programme and the pressure on Russia to cancel the contract to supplycryogenic engine technology to India as well as similar pressures on China. The Chinese Prime Minister endorsed India's space programme and blamed Washingtonfor putting pressure on developing countries on issues of genuine interest to them, such as technology transfer. The Indian Prime Minister was reportedto have given his Chinese counterpart a detailed briefing on India's peaceful space programme and the adverse effect that Russian backdown under U.S. pressurewould have on it. Both leaders agreed that USA was bringing pressure so as to prevent them from acquiring modern technology. Li Peng also endorsed India'sapproach to the question of improvement of relations with Washington and expressed the view that this should be done subject to considerations of sovereigntyon matters of national interest.24They also reviewed bilateral ties and expressed satisfaction that the two countries were taking steps to normalize their relations in all spheres. Theywere also of the view that high-level visits by the leaders of the two sides were pushing the momentum of improvement of relations. They agreed on exchangeof drafts on confidence-building measures by July and to advance the date of the meeting of the Joint Working Group to October.25The momentum was maintained by the visit to China of the Defence Minister, Sharad Pawar, soon afterwards. This was the first visit of an Indian DefenceMinister to China and indicated the level of confidence-building that was being attempted. After his talks with the Chinese counter-part General Qin Jiweiand other high-level defence and military officials, Sharad Pawar believed that they had taken a "useful step forward."26 Soon after his visit the DefenceMinister revealed at an investiture ceremony for the officers of the Indian Coast Guard that on request of the Chinese authorities made during his visitIndia would hold joint naval exercises with China. Similar joint exercises with a214number of other Asian countries were also on the cards.27 The Chinese also told the Defence Minister that they were keen to curb any military tension onthe border and apparently both sides were interested in exploring ways of possible reduction and redeployment of forces on the border.In the fifth meeting of the JWG, held in Beijing in early November, where important discussions were held on laying a firmer basis for removing the sourcesof tension on the border. It was subsequently indicated officially that India and China had in principle agreed to explore the possibility of moving backwardssome border posts close to each other and to establish high-level defence contacts in order to maintain peace and tranquillity along the line of actualcontrol. They also agreed to encourage people-to-people contact by facilitating border trade. Location of the land routes slated to be opened would, itwas agreed, depend on the logistics in the region and the alignment of the old trade routes.28Further significant steps were agreed upon in the sixth meeting of the JWG in Beijing in February 1993. The JWG adopted a set of additional measures tobring about greater transparency in the location of forward posts and military activities all along the Line of Actual Control (LAC). The measures alsoincluded prior notification of military exercises, prevention of air intrusions, and redeployment of forces along the LAC. The two sides also agreed inprinciple to open one more trade point, at Shipkila Pass (Himachal Pradesh), in addition to the one at Lipulekh in the middle sector of the boundary.29There were some differences over certain aspects of the previous agreements, but it was reported that with the help of military experts these were "tackledin a practical manner." As usual the Chinese side raised the issue of Tibet and the Indian delegation reiterated India's well-known position.30Meanwhile, China and India continued to expand their areas of cooperation. Among the significant new areas were two agreements entailing space programmesand steel production. The Indian Space Commission Chairman U.R. Rao, and Chinese Vice-Minister for Aeronautics Industry, Liu Jiayuam, decided in theirmeeting in Beijing to set up a joint committee to work out an agenda for cooperation. Both sides also expressed a desire to collaborate and reduce costsin the possible development of a Synthetic Aperture Radar (SAR) that could penetrate clouds.31 In the field of iron and steel and various other areas,a China Science and Technology Mission delegation reached an understanding with the Punjab, Haryana and Delhi Chamber of Commerce and Industry to explorethe setting up of joint ventures in mining and iron and steel. Chinese corporations were discussing with India the possibilities of opening trade officesin India to set up steel and iron, chemical, environment, fertilizer, pharmaceuticals, electronics, seeds and food processing plants in the form of jointventures to promote economic and trade ties.32215PRIME MINISTER RAO IN BEIJINGP.V. Narasimha Rao's visit to China, 6-9 September 1993, broke some fresh ground in the ongoing process of ensuring peace on the borders. Both sides pledgedon 7 September to "strictly respect and observe the Line of Actual Control" and not to use force or its threat as well as to keep their military forcesalong the LAC to "a minimum level". They also agreed to reduce their military forces along the LAC in conformity with the principle of "mutual and equalsecurity" to ceilings to be mutually agreed, this reduction to be carried out by stages in mutually agreed geographic locations sector wise within theareas along the LAC. The two sides also pledged not to undertake specified levels of military exercises in mutually agreed zones and to give the otherside prior notification of military exercises of specified levels near the LAC permitted under this agreement. The two sides also undertook to take measuresto hold mutual consultations in case of such intrusions.33Prime Minister Li Peng expressed the belief that Prime Minister Rao's visit had "a positive significance" for the continued expansion of Sino-Indian ties.Narasimha Rao commented that the two sides had not allowed differences to hamper the development of mutually beneficial cooperation. Three agreements weresigned (on 7 September), on enhancing trust in the border areas, on environmental cooperation and on cooperation in the fields of radio and television,and a protocol on expanding border trade. In the words of Li Peng, these agreements would "pump new vitality into the growth of bilateral ties."34 Rao'svisit was capped with an hour-long meeting with the Chinese President and General-Secretary of the Communist Party, Jiang Zemin and meetings with QiaoShi, senior Communist leader and the Chairman of the Standing Committee of the National People's Congress, and Hujintao, member of the Standing Committeeof the Politbureau of the Chinese Communist Party. Jiang told the Indian Prime Minister that the Chinese Communist Party attached importance to maintainingand developing friendly relations with the Indian Congress Party and increased contacts between the two parties would "not only enhance their mutual understanding,but will serve to promote friendly cooperation, both governmental and non-governmental, between the two countries as well." Rao invited Jiang to visitIndia at an early date.35 The invitation was accepted "with pleasure", but was as yet to materialize.The atmosphere during the talks was stated to be relaxed. The balance-sheet indicated an advance in confidence-building measures but also the need for caution,as many basic problems remained. The question of the Chinese standpoint on the Kashmir issue and Pakistan's support to terrorism in the state were discussedby the Indian Prime Minister with the Chinese leaders, but for Beijing Kashmir was a fall-out of history and needed to be sorted out by India and Pakistanby peaceful means through direct talks and there was to be no break-out of hostilities on the issue.36216The Chinese nervousness over Tibet and the Dalai Lama's activities was apparent once again, while the Indian Prime Minister restated India's position thatTibet was an autonomous region of China. India gave respect to the Dalai Lama as a religious and spiritual leader, but did not encourage any anti-Chinesepolitical activity on Indian soil.37Among the shared perceptions on international issues was their stand on missile technology control regime (MTCR). China was opposed to the sanctions imposedby the U.S. on transfer of missile technology. India shared China's concern and it perception that such restrictions were not correct.The Indian Prime Minister's visit was followed by that of a high-level Chinese dignitary to India, Politbureau member and Chairman of the Chinese People'sPolitical Consultative Conference, Li Ruihuan. Consequent upon the agreements reached during Rao's visit and taking advantage of the presence of Vice ForeignMinister Tang Jiaxuan, who was accompanying Li Ruihuan and who was Beijing's chief negotiator in the JWG, the two countries decided to set up an expertgroup to promote implementation of the agreement on demarcation of the LAC, on reduction of force levels, and on devising additional confidence-buildingmeasures.38The expert group had its first meeting in New Delhi in early February 1994 and set about its task as expeditiously as possible in the circumstances.39 Apartfrom these confidence-building measures, India-China ties were multiplying in various spheres. The economic links will be discussed presently, but thepolitical exchanges marked progress as well as persisting problems. Chinese Foreign Minister Qian Qichen, who had been elevated to a Vice-Premier's rank,came to India again in mid-July 1994 in the course of higher-level exchanges. During his visit, Qian called for "a forward-look approach" on the part ofthe two countries to develop friendlier relations, for which "the prospects were very good". Economic interaction had grown and there was scope for furtherdevelopment, he said at a press conference in New Delhi. He made it clear that China looked for improved relations with all countries of South Asia. Butthere was no advance on India's concerns with regard to China's military assistance to Pakistan and the latter's involvement in the insurgency in Kashmir.Qian reiterated Beijing's known position in this regard. Nor was there much comfort for India in Beijing's stance in regard to Sikkim's accession to India."We have not made any specific changes in our stand", he said, but hoped that the issue (of Beijing's acceptance of the accession) would be "resolved gradually".40Nevertheless, as Narasimha Rao said in Beijing, the two countries had decided to put aside the divisive issues and "walk on the path of peace" and cooperation.Even exchanges of military personnel were developing in evidence of relaxation of attitudes. Among the more noteworthy were the visits of a Chinese militarydelegation headed by a Deputy Chief of General Staff of the PLA Lient. General Xu Huizi, the Indian Chief of Staff General B.C. Joshi and the217Chinese Defence Minister, General Chi Haostian (The visit of the Indian Defence Minister, who was a civilian, has already been noted). Heading a high-levelmilitary delegation, General Xu held "frank and friendly conversations" with the Chiefs of Staff the of Indian Navy, Army and Air Force on 20 December1993. The visit symbolized an even more comprehensive improvement and development of ties between the two countries. The military leaders also reviewedthe accord relating to the maintenance of peace and tranquillity on the border.41 Followed the visit of General Joshi to China in July 1994 in order to"cement military to military relations further",42 and, no doubt, to carry forward the deliberations on further measures for ensuring peace on the border.From the Chinese side the military exchanges were capped by the visit of the Chinese Defence Minister, General Chi Haotian, 6-12 September 1994. This wasthe first visit of a Chinese Defence Minister since the establishment of diplomatic relations between the two countries. General Chi met Prime MinisterRao, who also held the Defence portfolio, and the two agreed that the current level of contacts should be maintained and that interaction at the parties'level should be enhanced. In the absence of a regular Defence Minister in India, General Chi's main interlocutor on the Indian side was the Commerce MinisterPranab Mukherjee and other aides. The common approach was to adopt a "progressive method" in regard to "problems left over by history" by addressing theeasier ones first and grappling with the difficult ones later. General Chi also held talks with high Indian military officials regarding bilateral relationsand the issues relating to border peace and tranquillity. He also visited several Indian military units in Goa and Bombay.43 According to Indian sources,issues that seriously concerned the country, like China's supply of M-ll missiles and aid to the nuclear programme of Pakistan and the establishment ofa surveillance station with a 250-mile range radar at Coco islands in Burma (Myanmar) close to the Andaman islands were touched upon during the ChineseDefence Minister's visit. Two similar radar systems had been put up at Zadaickyi and Ramree on the west coast of Burma. But it is unlikely that any satisfactoryreplies were received.One other high-level visit to China needs mention. Vice-President K.R. Narayanan went to China in late October 1994. It is well known that it was Narayanan'snote to Indira Gandhi in 1976, when he was a high-ranking official in the External Affairs Ministry that led to the beginning of a process of thaw andthe return of ambassadors to China. Mrs. Gandhi sent him as Ambassador to China, initiating the revival of diplomatic relations at the highest level. Therefore,he was no stranger to China. During his week-long visit he met President Jiang Zemin and other leaders. Marked by "bonhomie and goodwill", his visit focusedon economic cooperation. Reportedly, neither side raised any of the contentious issues, with both the Chinese President and the Indian Vice-218President expressing the belief that it was "high time" that more economic content was put into the growing ties.44While the links were multiplying and relations were developing apace, the "hidden dangers", as one Chinese ambassador put it in the context of the SumdorongChu "crisis" in 1982-83, could not be completely brushed aside. They were a reminder of the problems, one of which remained the issue of Tibet. Any demonstrationby or in sympathy of the Tibetans raised China's hackles. The recent, most instance was China's inflated reaction to one such meeting in Delhi in March1994. A so-called "international" conference convened by the intrepid George Fernandes under the signboard of All-Party Indian Parliament Forum for Tibetaroused the ire of Beijing more than any other political development between India and China in six years. A Chinese Foreign Ministry spokesman roundlycriticised the holding of the conference and "deeply deplored" the Government of India's failure to prevent it. Even though an Indian Embassy spokesmanhad drawn the Chinese government's attention to an Indian official statement in Parliament that the government was in no way associated with the conference,45Beijing did not realize, or chose not to believe it, that a free and democratic country could not throttle freedom of speech and association at will. TheChinese Foreign Ministry spokesman hoped that India would be "more careful in future" in handling political activities concerning Tibet. It is of someinterest that the statement released through Xinhua was carried only by the overseas edition of the People's Daily and not in the domestic edition; nordid it find mention in other major Chinese publications.Nevertheless India and China continued to build up their relations steadily and to step up measures for enhancing tranquillity on the border. Since NarasimhaRao's visit in September 1993, the most significant agreement on border peace came in August 1995 when the JWG meeting in New Delhi broke some fresh groundwith the two sides agreed upon mutual withdrawal from high proximity areas so as to reduce the chances of a clash. Four such spots were identified, inthe Sumdorong Chu valley, two from the Indian and two from the Chinese side. The agreement on disengagement was obviously the result of prolonged negotiations,but its conclusion at this time was another indication of the rapid evaporation of tension between the two countries. The agreement also provided for high-levelas well as medium-level contacts among the military officers of the two sides to preserve tranquillity on the border, including "ambiguous areas".THE ECONOMIC DIMENSIONThe economic relationship between India and China was a case of unfulfilled possibilities. It was hoped that after the defreezing of relations in the wakeof Rajiv Gandhi's visit, the economic ties would pick up expeditiously, but the219progress was both slow and fitful. A conventional notion was that competing economies, like those of India and China, would not expect to have profitableeconomic relations, a notion neither proved by history nor upheld by economic experience. The developed countries often fiercely competed with each other,but were also large trade partners of one another. A more plausible explanation for the lack of quick and substantial expansion in economic relationshipbetween India and China was relative ignorance of the other's market and absence of channels of communication in the economic field.46 This hiatus hadnot yet been effectively bridged, although greater efforts were being made in this direction.The volume of exports from India to China more than doubled—from Rs 6.2 crore in 1984-85 to about Rs 15 crore in 1987-88, but imports too raced ahead from.Rs 72 crore to Rs 125 crores, leaving an adverse trade balance of Rs 110 crore.47 But the fitful nature of the trade could be seen from the reversal thattook place just a couple of years later and yet another change in the offing more recently, as shall be discussed presently.In 1992, the trade volume stood at Rs 189.8 crore with imports from China at Rs 71.5 crore and exports at Rs 118.3 crore, signifying the reversal that hadtaken place and the favourable balance that India had achieved. More serious efforts were undertaken by both sides to take advantage of the economic growthtaking place in both countries as a consequence of their reform programmes. The joint economic group set up after Rajiv Gandhi's visit was activated withsenior ministers chairing its sessions. The fourth session of the joint economic group was held in Beijing in early January 1993 with both sides expressingtheir determination to quicken the tempo of the growth of economic ties between them. The Chinese Minister for Foreign Economic Relations and a co-chairmanof the joint group, Li Lanqing said that India was now a very important trade partner in Beijing's new trade policy.48 India proposed more points for bordertrade, specifically in Sikkim and Himachal Pradesh. A trade protocol was signed and it was decided that officials of the two sides could meet soon to discussthe Indian proposal.49The Commerce Minister and Deputy Chairman of the Planning Commission of India, Pranab Mukherjee offered China during a six-day visit in June 1993 a varietyof construction materials including steel, granite, electrical fittings and plywood. He also suggested two more border trade points Yadong and Shipki passin the Sikkim and Himachal Pradesh-China borders.50 As noted earlier, in the Sixth JWG meeting 25-27 June at New Delhi, the Chinese agreed to an additionalborder trade point at a pass between Namgya (Shipki, as the Indian side would name it) in Himachal Pradesh and Zhuba in Tibet.51 One concrete step to enhanceeconomic cooperation was the decision to set up a joint panel on coal taken during the Indian Coal Minister's visit to Beijing early next year. The agreementwas designed to help train Indian miners and experts in underground220mining technologies. China obtained 95 per cent of its coal underground as against India's 30 per cent.52As a result of the efforts made by the two sides not only officially (with the finance and trade and other ministers as well as official delegations invarious economic areas toing and froing between India and China), but unofficially also by the Chambers of Commerce in India and various trading organizationsin China, trade witnessed considerable expansion in 1993. In dollar value, according to Chinese figures, it doubled to reach $673 million. This, of course,included trade through Hong Kong. Indian exports to China shot up from $181 million in 1992 to $417 million in 1993—an increase of 170 per cent. India'simports reached $259 million, up 63 per cent from the year before. It was hoped that the figure would soon touch the $1 billion mark, although it was stilla fraction of 1 per cent of China's total trade. While iron ore had been a significant item for a number of years, steel was emerging as the newest andlargest one in India's exports, encompassing a figure of $177.5 million in 1993.53In a more optimistic vein the then Chinese Ambassador—to India spoke of Chinese plans to invest some $1 billion in India over the next three years in mining,fisheries and power sectors. Speaking at a function of the Delhi Exporters Association, he underlined China's keenness to establish joint ventures to processseafood for export in Western markets.54 A study by a U.S.-based research group, Centre for Global Trade Development, held out the potential of $25 billiontrade volume between India and China if they used their opportunities adequately.55Another trade protocol was signed in New Delhi on 15 June, coinciding with the visit of the Chinese Minister for Foreign Trade, Madam Wu Yi, and enlistingthe items each country expected to import from the other. The Indian list included raw silk, silk yarn, agricultural products like pulses, spices and resin,coking coal, dyestuffs, petroleum, tyres and tubes, newsprint, and oil drilling equipment. The Chinese mentioned iron ore, iron and steel products, tobacco,cotton, rice, spices, medicines, agro-chemicals, railway equipment, computer software, commercial vehicles, textile machinery and jewels and diamonds.The two countries decided to encourage direct mutual trade.56 They also agreed upon the minutes of the fifth session of the joint group on economic relationsand trade, science and technology.57According to Indian figures for the period April 1993 to February 1994, the total trade volume had risen to Rs 1636 crore, with Indian exports valued atRs 784.8 crore and imports from China at Rs 851.7 crore. This represented yet another fluctuation in their bilateral trade, with China posting a surplusfor the first time since 1991-92.58 That there were certain problems of competition among developing countries like India and China was obvious. Apartfrom the fierce competition in the textile and garment field, there were reports of the Chinese edging out the Indians in the shoe market,59 of bulk drugcompanies being hit by221Chinese dumping of bulk drugs60 of intense competition in handicraft exports, etc. However, there was also the flip side, of international urea prices crashingbecause the world's two biggest buyers, India and China, had formed a cartel to keep world urea prices in check.61There was one Indian joint venture in China already in operation, that of Ranbaxy, the fast-emerging Indian multinational in pharmaceuticals. Note shouldalso be taken of the memorandum of understanding signed by the state of West Bengal with China for the setting up of mini-steel plants with Chinese technology,involving an investment of Rs 2,500 crore. The agreement envisaged Chinese equity participation of about 10 per cent in each of the plants.62 A likelysecond Indian joint venture in was that of the Sura group, with large interests in real estate and banking, which bagged a $300 million project jointlywith a Chinese state-owned company to launch a mobile telephone project in Guangzhou (Canton). The Sura group was slated to hold a 60 per cent stake inthe project, with the rest held by the Chinese partner.63Thus there were a lot of things in the air, plans and even MOUs, and hopefully many or some of them would be transformed into reality, but a lot more hadto be done to give a meaningful content to their economic ties. It was not just the potential that needed to be realized, an economic content would itselfprovide a more lasting foundation for India-China ties. It could prove to be a more effective security against the proneness to derailment by accidentalhappenings. It could provide a more solid basis to the overall relationship.OVERALL ASSESSMENTUndeniably India-China ties were on the mend for over a decade. The process began with the visit of Huang Hua (then Vice-Premier and Foreign Minister) in1982. It was given a decisive push during Rajiv Gandhi's visit in December 1988, and received additional boost through high-level visits from both sides.The only person of consequence who had yet to visit India was President of the Republic and Secretary-General of the Chinese Communist; Party, Jiang Zemin.Exchanges proliferated in virtually every area. Even defence ties were being exchanged. Both countries realized the importance of exchange of specializedexperience and the expertise that each might have in certain areas. The principle of division of labour in international economic relations was equallyapplicable to India-China relations.The return to normalcy and good-neighbourliness was certainly facilitated by important internal and external developments. China turned a new page afterthe death of Mao Zedong, turning the focus on economic development. Militancy and revolution were no longer the concern of the Beijing leadership, growthcame first. This fundamental shift in the strategic understanding of the country's needs made possible, almost inevitable, the normalization of relationswith other222countries. This was the logic of the policy of opening to the world, the requirement of a peaceful environment to develop the economy, to expand foreigntrade and to attract foreign capital and technology.India too had embarked upon a more liberalized economic programme beginning 1980 but which was precipitated by the crisis in foreign exchange reserves in1991. Both India and China needed a peaceful environment and the creation of conditions in which faster economic growth could be ensured, an appropriateinfrastructure could be constructed rapidly and external resources could be tapped in the process. They both recognized that the challenge of contemporarytimes was the economic struggle that could not be substituted by political struggles, nor could it be won through tension and confrontation. Since bothwere learning this lesson, it became easier for them to turn away from verbal and actual wars and to walk onto the path of peaceful cooperation.Undoubtedly the transformation of the international situation propelled the process of normalization of India-China ties. The roots of the cold war haddisappeared. One of the contestants had collapsed. Security threats just could not be seen in the old way. The picture was now totally blurred. NeitherUSA nor the Soviet Union (or its successor state Russia) remained a factor in the India-China relationship as in the old days. Only Pakistan cast a shadow,the big powers no longer did. In many ways this more benign, or at least less threatening, international situation made it easier for India and China topromote better mutual relations.These positive factors continued to provide a solid ground for forgetting the past and looking towards the future. Yet some of the possible and potentialflashpoints could not be ignored if future grief was to be avoided. The troublesome difficulties over the Tibetan problem have been mentioned at considerablelength. So too Beijing's Pakistan connection. As the Americans came out with more and more information, about Beijing's assistance in Pakistan's nuclearprogramme and the supply of missiles (which could only be deployed against India), the depth of this relationship lay exposed, although there was no reasonto doubt it in the first instance. Even though Beijing had muted its public support to Pakistan, this Pakistan connection had a direct relevance to India'ssecurity.For India the central issue was the border delineation. Since China was the "satisfied" country and India the "unsatisfied one" on this issue, a settlementbecame more difficult because the "unsatisfied" country was asked to yield much more than it could politically justify. In order to avert a deadlock thatwould freeze all other relationship, India agreed to go along with the Chinese suggestion to put a border settlement on ice for the time being and to concentrateon building relations in other areas and on tranquillity at the border in order to create' conditions for an eventual settlement. Yet the issue bristledwith complications and could snarl relations in the future. Although a number of223useful and significant steps were taken by the two countries to keep the border peaceful, even the determination of the line of actual control would notbe an easily realized objective. The two sides were moving in the right direction, but extraneous developments could still derail the process.India could not ignore the steady build-up of the military strength of China. Beijing accused the West of raising a scare about China's military strengthto serve its own ulterior purposes,64 and it might have a point there, but the fact of such massive build-up was undeniable. A rise of some 6 per centin its military spending in the first half of the decade was no mean expansion—it was some $17-18 billion in 1993 (the Chinese official figures put thespending as $5.5 billion, but that could hardly be taken at its face value). The military asymmetry between India and China in the fifties and sixtieswas a major cause of the troubled relationship; in addition there was the nuclear asymmetry, as a further seriously aggravating factor. The relative rectificationof the asymmetry in their armed strength subsequently contributed substantially to the restoration of a balance in their mutual relations. Despite thenuclear problem, this balance helped melt the frost in their relations. Now this military balance was posing some threat again with the sharp escalationof China's military build-up in the past six years. The maintenance of a certain symmetry in their military strength was in the interest of peace withChina and peace in Asia. The developments between 1996-98 have been discussed in the last chapter, conclusions.NOTES1. For a discussion of Jawaharlal Nehru's policy towards China, see "Jawaharlal ? and China" in the author's India and the World, Sanchar Publishing House,New Delhi, 1991. For the period that degenerated into the border conflict, see the author's China and the World, Praeger Publishing House, New York, 1966.The subsequent period is analysed in the author's India's Foreign Policy, Vikas Publishing House, New Delhi, 1984,1987 and 1994.2. In a meeting with a delegation of the Indian Council of Social Science Research, of which this author was a member, Deng Xiaoping advocated this view.But the leader of the Indian delegation, G. Parthasarathy, who was carrying a message from Indira Gandhi for the Chinese leader, insisted that the borderproblem was like a cloud that must be dispersed to bring sunshine to the ties between the two countries.3. See R. Venkataraman, My Presidential Years, Indus, New Delhi, 1994, Chapter 43, pp. 619-40.4. Pakistan Times, 7 July 1985.5. Indian Express, 24 March 1990.6. The Hindu, 2 September 1990.7. Shobhana Bhartiya's report from Beijing on the Press Trust of India delegation's meeting with Li Peng, Hindustan Times, 12 September 1991.8. H.K. Dua's interview, Hindustan Times, 7 December 1991.9. Indian Express, 8 December 1991.10. See major Indian newspapers of 11-18 December 1991.22411. The then Foreign Minister, Madhavsinh Solanki in personal conversation with the author. Also see Hindustan Times, 15 December 1991.12. The Hindu and Times of India, 18 December 1991.13. The Statesman, 18 December 1991.14. Times of India, 13 December 1991.15. New; York Times, 15 December 1991.16. Times of India, 19 December 1991.17. Hindustan Times, 21 December 1991.18. Indian Express, 2 February 1992.19. The Statesman, 22 February 1992.20. See R. Venkataraman's, My Presidential Years, op. cit.21. An official Indian spokesman's briefing, Times of India, 19 May 1992.22. H.K. Dua's dispatch from Beijing in Hindustan Times, 20 May 1992.23. The Hindu, 23 May 1992.24. Hindustan Times, 14 June 1992.25. The Hindu, 14 June 1992.26. The Statesman, 26 July 1992.27. Hindustan Times, 22 August 1992.28. Ibid., 4 November 1992.29. The Statesman and The Hindu, 29 June 1993.30. Times of India, 29 June 1993.31. Hindustan Times, 8 December 1992.32. Ibid., 5 May 1993.33. Text of the agreement, The Hindu, 9 September 1993.34. Xinhua (English), 7 September 1993.35. Ibid.36. Ibid.37. Hindustan Times, 14 September 1993.38. The Statesman, 2 December 1993.39. Indian Express, 5 February 1994.40. Times of India, 19 July 1994.41. Xinhua (Chinese), 20 December 1993.42. PTI from Beijing, 21 July 1994.43. Xinhua (English), 9 and 12 September 1994.44. Hindustan Times, 24 October 1994.45. PTI from Beijing, Times of India, 23 March 1994; also Hindustan Times, 25 March 1994.46. China Daily (Beijing), 23 October 1988.47. See Gargi Dutt and V.P. Dutt, China After Mao, Vikas Publishing House, 1992, pp. 381-2.48. All India Radio (English), 4 January 1993.49. Ibid., 5 January 1993.50. PTI from Beijing, Ibid., 2 and 3 June 1993.51. Xinhua (English), 27 June 1993.52. Hindustan Times, 13 January 1994.53. PTI from Beijing, Times of India, 23 February 1994.54. Economic Times, 13 March 1994.55. Ibid., 26 May 1994.22556. All India Radio (English), 15 June 1994.57. Xinhua (English), 15 June 1994.58. Economic Times, 16 June 1994; also see Badar Alam Iqbal, "Sino-Indian Trade: 1990s", Patriot, 26 July 1994.59. Economic Times, 1 April 1994.60. Ibid., 1 June 1994.61. Ibid., 25 March 1993.62. Ibid., 16 March 1995.63. Ibid., 14 May 1995.64. See, for instance, commentary by Huai Chengpo, "Behind the Tale of China's 'Threat'", Xinhua (English), 15 February 1993.226B. STORM IN THE HERMIT REPUBLIC: INDIA AND BURMADespite their historical, cultural and administrative ties, relations between India and Burma (now renamed Myanmar by the military atuhorities)* are nowhostage to political vagaries in the "hermit" state. Buddhism moved from India to Burma and established abiding cultural ties between the two countries.As a part of India during the British rule, the Burmese administration was a part of the overall Indian administrative structure. Yet the Indian NationalCongress put a premium on its ideals and principles and supported the Burmese struggle for independence and separation from India.BACKGROUNDNecessarily the political links between the Indian and Burmese leaders were strong and the leaders in Rangoon were influenced by the struggle of the IndianNational Congress and by many of its leaders. The assassination of Aung San and many other leaders shocked Indian opinion, but the democratic leadershipthat assumed power in Burma maintained a cordial relationship. As this author has detailed in his earlier work on India's foreign policy,1 Nehru and UNu shared a common world view, besides their commitment to a democratic system. Indeed, as U Nu himself acknowledged, it was Nehru's timely assistancethat saved the Rangoon government tottering under the savage threat of insurgency. Even after the eclipse of democracy and the take-over by General NeWin in the sixties, India endeavoured to maintain a close and harmonious relationship with Rangoon. As General Ne Win's three visits to India during thatperiod and Indira Gandhi's travel to Rangoon indicated, India ignored Burma's walk-out of the Non-Aligned Movement and other isolationist policies andkept up its efforts to retain intact the age-old ties.2From India point of view three serious issues involved relations with Burma. The first related to the people of Indian origin there. There were nearly 300,000to 400,000 of them on the eve of Independence. Although a large number were Burmese Indians rather than Indian Indians, they faced increasing difficultiesin eking .out a reasonable existence as the Burmese road to socialism in the sixties took away their wholesale and retail trade and other economic activitiesand forced some 200,000 to move back to India by 1972,3 dispossessed of most of their worldly goods. Even then India did not let it develop into a majorissue, attempting rather to mitigate the hardship of the Indian community through quiet diplomacy.A far more serious problem was the insurgency in the north-east that found, in the hilly areas of north and north-western Burmese territory at the border,a* This writer will continue to use "Burma" and "Rangoon" until a popularly elected regime confirms the change of names.227haven for rest and replenishment and at one time a route to China for assistance in arms and training. For quite some while the Burmese government, preoccupiedas it was with a host of insurgencies, could give little attention to the distant happenings on its borders with India, but towards the late seventiesBurma became somewhat more alive to the problem. An unwritten understanding developed between the Burmese authorities and India, which allowed troops fromeither side to go into the other's territory up to a certain limit in pursuit of the insurgents. There were also cases in which troops of the two countriescooperated to meet the challenge of insurgency. All these developments have been discussed by the author in his earlier work, as mentioned before.That brings us to the third major factor, the China factor in the relations between India and Burma. The geographical and geopolitical situation of Burmabeing what it is, it was inevitable that a resurgent China would be an important factor in its foreign policy. But China made it its business too, in differentways under different circumstances, to influence developments that would greatly concern India also.In the sixties and early seventies China set much store by the pro-Beijing Communist factions' armed struggles in Burma and India and viewed with unconcealedhostility the relations between Burma and India. However, gradually China softened its attitude, ceased the overt assistance to Indian hostiles m the north-eastand began developing its own relations with Burma. Sino-Burmese relations were helped by the Burmese anxiety to bend every effort . towards smotheringChinese animosity, to the extent of virtually withdrawing from the rest of the world. High-level visits by Ne Win to China in 1977, 1980 and 1985, andof Deng Xiaoping in the beginning of 1978 and of then President Li Xiannian in 1985 to Burma gave a big push towards Sino-Burmese relations, while India-Burmarelations gradually entered a period of suspended animation.DEMOCRATIC RESURGENCEThe turning point in the deterioration of India-Burma ties came with the mass resurgence for democracy in September 1988. On 10 September Burma resoundedwith cries of democracy and tens of thousands, indeed millions, came out on the streets in support of the movement for the restoration of democracy ledby the late Aung San's daughter, Aung San Suu Kyi, whose deceptively frail body disguised the steely determination of character. Suu Kyi had studied inIndia and gone to the United Kingdom where she did her doctorate and married a British citizen, but had gone back to Rangoon at the call of the Burmesepeople's distress and yearning for a change from the suffocatingly harsh military dictatorship in Rangoon. She became a charismatic focal point of thestruggle for democracy. On 18 September a group of military officers headed by General Saw228Maung and in effect at the behest of General Ne Win, and giving themselves the name of State Law and Order Restoration Council (SLORC), seized power andcracked down on the mass movement in a massacre that was often compared with the one in Bejing in June 1989. Suu Kyi was put under house arrest and hundredsupon hundreds of other activists were put behind bars. Then to their "utter folly" (as it must have appeared to them subsequently) and to the delight ofthe people the military regime's leaders ordered relatively free elections on 27 May 1989. The result was a stunning victory for the National League forDemocracy founded by Suu Kyi and other activists, which won 396 out of a total of 485 seats, while the National Unity Party, political successor of theBurma Socialist Programme Party had to be content with a paltry 10 seats. But the regime had no intention of respecting the people's verdict and ignoredthe election results.This turn of events also brought about a major change in India's relations with Burma. The democratic upsurge had the sympathy and support of India. Indiadid not swerve from this position, even if the criticism might have been somewhat muted over time. The military crackdown was squarely denounced by India.In fact, as a perceptive Western analyst put it, India became the only neighbouring country that adopted a clear-cut refugee policy with the then ExternalAffairs Minister (later Prime Minister) Narasimha Rao telling a parliamentary panel that "strict instructions" had been given not to turn back any genuineBurmese refugees seeking shelter in India.4 India's standpoint was reflected in the soaring popularity of All India Radio in Burma for its reporting onthe developments there, marked by sympathy for the people's movement.This very development affected India's relations with Rangoon. India's clear stand on the democracy movement was bound to infuriate the military regime,which retaliated with furious attacks against AIR for interference in Burma's internal affairs and against India and Indians in general. Rangoon also accusedIndia of having financed some of the pro-democracy elements. Yet another fractious incident was the hijacking of a Thai airliner en route to Rangoon bytwo Burmese students who forced it to land in Calcutta on 10 November 1990. The students were arrested but were not handed over to the Burmese authorities,and were subsequently released on bail, further enraging the regime in Rangoon. It is believed that in a secret letter (reportedly dated 22 February 1991),the Vice-Chairman of the so-called SLORC condemned India as a country that encouraged internal insurgency and indulged in acts not compatible with thoseof a friendly neighbour.5India had hoped that the Rangoon regime would agree to a peaceful and orderly transfer of power to the elected representatives of the people but this hopewas belied by General Saw Maung, Chairman of SLORC, who publicly held the reins of power while Ne Win and the clique around him ruled from behind the scenes,warning that his regime would not tolerate a recurrence of the 1988229situation or the endangering of three basic duties of the state—preventing disintegration of the union, preventing disintegration of national sovereigntyand perpetuation of national independence and sovereignty.6Rangoon's hostility notwithstanding, as clarified by a spokesman of India's Ministry of External Affairs, India followed a "consistent policy of extendingmoral' and political support" for the struggle for democracy in Burma.7 The announcement of award of the Nobel Prize for Peace to Aung San Suu Kyi in October1991 was heartily welcomed in New Delhi, further demonstrating the gap between New Delhi and Rangoon. That there was widespread support in India for thestruggle was evident from speeches and addresses by prominent citizens from all major political parties at a function in New Delhi felicitating Suu Kyi,urging the military regime to release her and to honour the people's verdict in elections.8TENSIONSThe Burmese army's stepped-up military campaigns in the border areas brought a new sombre development in India's relations with Rangoon. It was also a reflectionof the state of ties between the two. Particularly with the Burmese military action in the border with Nagaland, hundreds of refugees fled to India bythe beginning of 1992. Some 700 were reported to have taken shelter on the India side of the Nagaland border within 48 hours. It was believed that a thousandhad come in by the time New Delhi protested to Rangoon and called upon it to take immediate steps for the return of the Burmese nationals.9 India set upa police station on the Manipur border to prevent illegal infiltration of Burmese personnel into India.10 That India was upset over the developments wasclear from a statement by the Minister of State for External Affairs who bluntly asked the Burmese authorities to stop atrocities on innocent villagerson the border by the army personnel.11 A similar campaign had led to large scale flight of Burmese Muslims into Bangladesh. This did not deter India fromexpressing its continued support to the struggle for democracy in Burma. In an unusual kind of reply while receiving the credentials of the Ambassadorfor Burma, President R. Venkataraman said that India was looking forward to the release of Aung San Suu Kyi and expressed concern over the delay and uncertaintyin forming a popular government in Myanmar (Burma). He hoped for an early and peaceful transition to democracy there.12India's support to the democratic struggle in Burma also had its fall-out in terms of the toning down of insurgency on India's north-eastern borders. Manyof the elements in Burma, which carried weight with the insurgents in the region, appealed to them to cease their activities against India. According toone report, there was a noticeable decline in insurgency in the north-east since the 1988 massacre and India's forthright backing for the pro-democracyelements. In230particular the Kachin Independent Organization (KIO), which was the critical sustaining force behind the insurgents, sharply scaled down its support. TheKIO was a member of the Democratic Alliance of Burma, and its leader Brang Sein its chairman. The north-east insurgent groups were said to be receivingcontinued support from the S.S. Khapling pro-Beijing faction of the "National Socialist Council of Nagaland", on a much lower scale than before. This dwindlingsupport in the Kachin area led to greater presence of ULFA and PLA camps in Bangladesh and greater Pakistani control of them.13It certainly appeared to be India's hope that the triumph of the democrats in Burma would contribute to the lowering of the insurgency level, enabling Indiato tame it and bring it under control.Even otherwise, India's commitment to the democratic cause in Burma had widespread support among the intelligentsia in the country. It was this commitmentwhich led to India's decision, despite initial hesitation, to allow the government-in-exile formed by the pro-democracy groups of Burma to open its officein New Delhi. The office was started on 7 July 1992 and was headed by Dr Tint Swe, a member of the Burmese Parliament. This government-in-exile, formedat Manerplaw near the Burma-Thailand border in December 1990 with Dr Sein Win as the Prime Minister had by now offices in eleven countries and was namedthe National Coalition Government of the Union of Burma. There were other piaa-democracy student groups also present and functioning in India.14Some of these groups had internal contradictions which led to bickering now and then. The Indian unit of the All Burma Students Union dissociated from theactivities of the National Coalition Government and regretted that the latter's representatives had caused embarrassment to India. They pledged to workwithin the framework of India's foreign policy and hoped that India would not change its policy towards the student refugees.15That was the flip side, but the flop side was that the military junta still was very much in control in Rangoon, its mischief-making capacity on the borderhad not abated, and it was now engaged in developing a new strategic relationship with China. 'This ground reality appeared to constrain India to mendsome fences with the Rangoon regime. Before we consider this effort, which was not without its critics, it is appropriate here to take note of the lengtheningshadow of Beijing over Burma and its implications.CHINA AND BURMAChina was among those few major countries which did not say a word either in support or even appreciation of Suu Kyi and the struggle for democracy or incriticism of the Rangoon regime's repression and refusal to accept the people's verdict. But perhaps this was to be expected, since Bejing itself did notbelieve in231that kind of people's verdict or in that kind of democracy. The September 1988 repression in Rangoon was compared with the subsequent massacre at Tiananmenin June 1989. Both Beijing and Rangoon displayed keenness in developing a new relationship in their mutual interest.The cooperation that was developing now encompassed many areas, and there were concrete gains for both sides. For Rangoon there was a bonanza. The new tiesmitigated the international isolation faced by the military regime. Equally significantly, the Burmese Communist Party was sidelined by Beijing, reducingits threat to the regime in Rangoon and turning it into a negligible force. Trade flourished at the border and so did drug trafficking and opium peddling.Rangoon secured very substantial quantities of military equipment from Beijing that could be crucial in keeping the populace suppressed and prolongingthe life of the military regime. In return China enlarged its presence in Burma and was reportedly given access to port facilities that gave it an openingto the Indian Ocean.By virtue of an agreement signed in October 1988 Rangoon acquired a vast quantity of arms from China estimated at about $1.4 billion. Deliveries until thebeginning of 1993 included light and medium tanks, APCs, F-7 fighters, Hainan class patrol vessels, anti-aircraft artillery and communication equipment.China also delivered 308 truckloads of military equipment in mid-January (1993), carrying small arms, 40 mm type 56 grenade launchers, 82 mm type 53 and120 mm type 53 mortars, and several 130 mm multiple launch rocket systems. They were also loaded with ammunition and spares of various calibre, accordingto Jane's Defence Weekly.16A Kyodo dispatch from Beijing quoted diplomatic sources to report that China was helping to build a naval base on the Andaman Sea coast under a secret agreementwith Burma. The Chinese Foreign Ministry had denied this information, but the Kyodo report quoted diplomatic sources to claim that the base was under constructionon an island at the mouth of the Bassein river, one of the rivers that formed the delta of the Irrawaddy river in southern Burma. The site was across thechannel from the Andaman and Nicobar Islands where India had established naval facilities. Kyodo said that in return for China's cooperation in constructingthe base, Burma would give China precedence in the use of the base. China was also reportedly constructing a radar facility on the Cocos Islands in Burmathat lie immediately north of the Andaman Islands.17There were a number of other agreements for Chinese assistance, including a contract to build two ground satellite stations.18 There was also much comingand going between China and Burma at high levels. The previous SLORC chairman, Saw Maung, and the new chairman, Gen. Than Shwe, both visited China, andthe Chinese Vice-Premier and Foreign Minister Qian Qichen and a number of other high-level dignitaries visited Rangoon. Burma never had such a close relationshipwith China earlier.232The Chinese visits were capped by the visit of the Chinese Prime Minister Li Peng in December 1994, only the fourth head of government to go to Burma sincethe military crackdown in 1988. Ending has first visit to Burma on 28 December, Li praised the military regime's efforts at "national reconciliation".He described the issue of the detained Nobel laureate Aung Suu Kyi as "entirely Myanmar's internal matter". He dismissed Western and regional fears aboutChina's expanding influence through Burma towards the Indian ocean as groundless.19 Nevertheless, the fact, as we have seen, of increasing military, politicaland economic cooperation between the two countries was undoubted. The military government of Burma was making good use of the China card and Beijing wasextracting the maximum mileage out of Burma's isolation in the international community. The two had now a thriving south-western border trade also despitethe problems and fears of drug smuggling. Official estimates put the two-way border trade at about $320 million a year, but unofficial reports doubledthat figure.20.The developing relationship was not unknown to New Delhi and was one factor compelling a new dialogue with the military regime, in addition to other problemsmentioned earlier. An effort was made by India to reach some working relationship with the military regime in Burma.EFFORTS AT IMPROVEMENTAn eight-member Burmese delegation led by U Aye, Director-General of the Political Affairs Department of the Ministry of Foreign Affairs visited India 11-14August 1992 and had discussions with their counterparts in the External Affairs Ministry, met the Minister of State for External Affairs, and had discussionswith the Home, Defence and Commerce Secretaries. This was the first India-Burma senior-level meeting since Rajiv Gandhi's visit in 1988. The Burmese delegation'svisit was supposed to be a misunderstandings- managing exercise, because the Burmese had created an impression about an Indian military threat. India'sForeign Secretary, J.N. Dixit was reported to have assured the Burmese side that India had no designs on Burma and to have sought its cooperation in resolvingoutstanding issues. The view generally taken in India was that the Burmese authorities were trying to discredit India and justify the facilities now beingextended to China to build a naval reconnaissance base in a sensitive area near the India border21 that would give China a presence in the Indian Oceanwith important geo-strategic consequences.The Burmese officials assured their Indian interlocutors (an assurance not to be taken seriously) that Burma was set to move towards a democratic set-upbased upon national consensus and in conformity with the requirements of the people. The ruling council intended to transfer power "at an appropriate time".According to an official spokesman the talks were "candid and cordial". (The233word "candid" is used in diplomatic jargon to convey differences in approach.) Recalling their age-old ties, the two sides expressed their desire to renewand encourage contacts.22It was reported by an Indian news agency that India had asked Burma to stop "unacceptable activity" along the border and drug-trafficking which indicated"elements of conflict and confrontation".23 The official spokesman said that the Indian side had conveyed in strong terms "our concern" for preventionof various kinds of "negative activities" in the border region and stressed the need for cooperative measures. He also mentioned that both sides discussedin a "preliminary manner" the possibility of entering into an agreement on cooperation to effectively counter drug trafficking and to strengthen bordertrade arrangements. The outstanding financial and consular issues were also discussed.24 India also reportedly made an unequivocal demand for the releaseof all political prisoners.25Subsequently the Burmese authorities denied that the government had ever encouraged or supported any insurgent groups, including Naga and Kuki Chin insurgents,who would pose a threat to a neighbouring country.26These denials and assurances were repeated subsequently. An official spokesman in Rangoon (Yangon is the new name) claimed on 6 October 1994 that Chinanever had bases or facilities on its soil, nor did Rangoon have any military pact or understanding with Beijing. As regards the visit to China of the headof military intelligence and a senior SLORC leader, Lt. Gen. Khin Nyunt, he pointed out that no high-level Myanmar delegation had visited China in thepast three years and that the objective was to enhance the existing friendship between the two countries and strengthen economic cooperation. The officialpointed out that Lt. Gen. Khin Nyunt had himself assured senior Indian officials that there would be no foreign bases in Myanmar or military cooperationwith any country.27Earlier in the year India had signed two agreements with Burma for better relations. Signed on 21 January in New Delhi, one agreement provided for resumptionof border trade while the other, a memorandum of understanding, for increasing people-to-people contacts along the border. The border trade was to be initiallyconducted through Moreh in Manipur and Champhai in Mizoram corresponding to Tamu and Hri on the Burmese side.28The border trade was resumed on 12 April at Moreh in the presence of the Indian Commerce Minister, P. Chidambaram and the Burmese Trade Minister, Tun Kyi.One obvious meaning of this step was that the multi-crore underworld business had become official and that the traders from both sides would have to paytax on the goods crossing the borders. Heroin, gold, precious stones, electronic gadgets and other consumer items were being smuggled into India throughthe earlier unofficial trade, with items like bicycles, truck spare parts,234yarn, baby food, medicines, petroleum products, cement, etc., moving from India to the other side.India had a substantial trade deficit with Burma. Official statistics put India's exports in 1994-95 and 1995-96 at Rs 71 crore and Rs 85 crore respectively,and imports at Rs 398 crore and Rs 527 crore.29 India imported mainly wood, wood products, and pulses whereas its exports comprised chiefly bicycles, spareparts and light engineering goods.While an unhappy relationship could be managed better - and that was done with the attempt from both sides not to exacerbate things, the fundamental problemremained: India's continued sympathy for the movement for democracy and Rangoon's unhappiness over India's stance. A working relationship was established,and there was less stridency in New Delhi against the repression in Burma, but the basic problem could not be easily resolved. India could not adopt thekind of stance that China had chosen, yet it could not change the ground reality in Burma. The ground reality was that the military regime had tightenedits hold and any immediate change did not appear to be on the cards. The regime was under some international pressure, but it was not so strong as to compelit to transfer power to elected representatives of the people.SUU KYI AND INDIA-BURMA RELATIONSThe international pressure, however, finally obliged the military regime to release Suu Kyi, who was freed on 10 July 1995, just one day before she wouldhave completed six years of incarceration. It is possible that Rangoon was also pushed by economic considerations to end the formal imprisonment of SuuKyi. With per capita income of just about $220 and an annual inflation rate of about 30 per cent, Rangoon has been in urgent need of foreign aid that wasdenied it because of Suu Kyi's imprisonment.Rangoon's calculation might not have been so wrong. Japan was the first country to announce its intention to resume aid30 and Asean too, unhappy even earlierat being obliged" to adopt a tougher stance than it would have otherwise done, relaxed its approach almost immediately on the announcement of Suu Kyi'srelease. Although USA and other Western countries had still not relented, Rangoon was obviously hoping for a gradual change there also. Indeed Britainhad already become the biggest foreign investor by 1 March with a total of $647 million, followed by France with $465 million.31India naturally welcomed the release of Suu Kyi and hoped that her release would herald an era of national reconciliation, freedom and democracy for thepeople of Myanmar.32The world community's hopes were, however, quite misplaced. The military regime had no intention of accepting the people's verdict or relaxing its controlover the levers of power. Gradually the leash was tightened and repression235escalated. Suu Kyi's supporters were increasingly harassed and imprisoned and she herself became a virtual house-prisoner again. International pressureswere neither widespread nor sufficiently extensive. The military regime was further strengthened by Asean's perception that it was wiser for it to welcomeBurma into its fold rather than to isolate it, despite the pressure from the United States and the European Community. The 29th Asean Ministerial meetingin Indonesia in July 1996 treated the military regime's representative, Burma's Foreign Minister, as an esteemed guest and future member. Burma was givenobserver status33 and it was made quite clear that Rangoon's formal entrance into Asean was only a question of time.India's dilemma was obvious. The general sympathy was with the movement for democracy. This was evident from the award of the Nehru Peace Prize to Suu Kyi.On the other hand, the military regime seemed to be firmly in the saddle. An influential section in the foreign policy establishment believed that therewere many important issues that needed continual sorting out and that India must have normal relations with whosoever was in power in Burma, particularlyso in the context of the intensive interest that was being demonstrated in it by many other neighbours. In fact this became the general thrust of India'sBurma policy. Suu Kyi was disappointed with India's stand and in a conversation with Indian correspondents, bracketed India and China as both having friendlyrelations with the military junta. "China is not a democracy", she said, "but we would like India to do whatever it can to help us in our movement fordemocratic reforms", and added, "I am not unaware of its difficulties, but India has a special duty to help promote democracy here."34 This writer mightconclude by saying that India's Burma policy demonstrated an uneasy balance between pragmatism and idealism.NOTES1. See V.P. Dutt, India's Foreign Policy, Vikas Publishing House, New Delhi, 1984 and 1987. Chapter on India and Burma.2. Ibid., pp. 245-52.3. Official statement, Asian Recorder, 26 February-4 March 1967, p. 7571.4. Bertil Lintner, "Different Strokes", Far Eastern Economic Review, 23 February 1989.5. Quoted in Asian Yearbook 1992, Far Eastern Economic Review Publishing Company, p. 92.6. Hindustan Times, 13 July 1990.7. All India Radio (English), 10 October 1991.8. Ibid., 6 November 1991.9. Ibid., 28 January 1992.10. Ibid., 23 March 1992.11. Eduardo Faleiro's public speech, ibid., 24 March 1992.12. Ibid., 3 February 1992.13. Prasun Sonwalker in Times of India, 25 October 1991.14. Times of India, 31 August 1992.23615. Times of India, 20 September 1992.16. Jane's Defence Weekly, February 1993.17. Chi-FBIS, Daily Report, 17 September 1992, p. 13.18. Xinhua (English), 25 October 1992.19. Asian Recorder, 22-28 January 1995, p. 24537.20. Ibid.21. Times of India, 14 August 1992.22. All India Radio (English), 14 August 1992.23. FTI from New Delhi, Summary of World Broadcasts (SWB), 17 August 1992, FE/1461/ AI, p. 4.24. Ibid., 21 August 1992, FE/1465/AZ, p. 4.25. Times of India, 20 September 1992.26. Radio Burma, 24 April 1993, in SWB, 1 May 1993, FE/1647/AZ, p. 4.27. Asian Recorder, 29 October -4 November 1994, pp. 24344-45.28. Ibid, 12 -18 February 1994, p. 23646.29. Annual Report 1995-96, Ministry of Commerce, Government of India.30. Far Eastern Economic Review, 31 August 1995, pp. 24-6.31. Hindustan Times, 25 September 1995.32. Asian Recorder, 30 July-5 August 1995, p. 2496733. Ibid., 26 August-1 September 1996, pp. 25859-60.34. Times of India, 12 December 1995.237Chapter 7 India and South-East Asia:REVERSAL OF ROLESThe precipitous decline in India's standing in the world war nowhere more graphically evident as in India's relations with South-east Asia, particularlymember countries of the Association of South-east Asian Nations (Asean—consisting of Indonesia, Malaysia, Thailand, the Philippines, Singapore and Brunei).*Time was when many of these countries looked up to India politically and, may be to a lesser extent, economically. But India could not match its policieswith their expectations. During Jawaharlal's time, most of the countries were sucked into the cold war and, barring the Indo-China states and Indonesiauntil the fall of Sukarno, aligned themselves with the Western bloc, and the political hiatus with a vigorously non-aligned India obstructed meaningfulrelationship with many of them. Indira Gandhi tried to change the focus and develop closer ties with Asean countries, but India's economic capabilitieswere limited, and India's own political troubles, domestic and foreign, put a cap on the development of any special relationship with them.1ASEAN AND INDIAIndia still had very considerable international standing, but it got gradually whittled down in the political instability at the turn of the eighties andthe subsequent economic downturn from which the country is still recovering. Meanwhile the Asean countries were forging ahead economically, in the processgaining new political importance, so that it was India that was left looking up to South-east Asian countries, rather than the other way around. It wasIndia that was trying to muscle into the various for a floated by Asean. While India's trade and economic relationship with some of the individual Aseancountries showed* Since these pages were written, Vietnam has also been admitted into Asean. Vietnam is being considered here separately, as in any case India-Vietnam relationswere qualitatively different from those with the other Asean countries.238a considerable boost and to an extent political ties deepened with some of them (which will be discussed later in the chapter), India as a suitor of Aseanhad for quite some time limited success.The only concrete result of India's very considerable effort at the time was that it was accepted as a sectoral dialogue partner of Asean and that it hashad some intensive discussions with the Asean officials for closer ties. The first high-level deliberation was held in March 1993 when the Asean Secretary-General,Dato Ajit Singh, led a delegation for a two-day meet with the Indian External Affairs Ministry officials led by the Foreign Secretary. The meeting decidedto set up an Asean-New Delhi Committee consisting of heads of missions of Asean countries to facilitate sectoral dialogue relations with India. It alsoagreed to the establishment of a joint Asean-India Business Council consisting of representatives of the private sector on both sides. Dato Ajit Singh,summing up the conclusions of the two-day meet, pointed out to the tremendous opportunities for India in the Asean market. In fact the meeting underlinedthe economic dimension of the Asean-India relationship, which dimension was now central to their relationship.2India proposed the holding of regular trade talks between India and Asean, establishing a mechanism for the exchange of trade and commercial data and regularinterface between business communities of the two sides. It was noted at the meeting that India would be establishing a fund under the Indian Technicaland Economic Cooperation (ITEC) to develop programmes and projects in the fields of tourism, administration and management, trade and investment, computersand informatics, and solar energy and environmental protection. The funds would be placed at the disposal of the Asean Secretariat and administered bya joint management committee established for the purpose. The Asean side emphasized greater information on trade and investment opportunities on both sides.3Despite the increasing economic ties and the enlivening of other contacts with Asean and its member countries, the kind of relationship that India soughtwith Asean continued to elude it. It took another two years before India became a full dialogue partner of Asean. India was not included in the Asia PacificEconomic Cooperation forum (APEC). The member countries and regions of APEC included Australia, Brunei, Canada, Chile, China and Taiwan, Hong Kong, Indonesia,Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Philippines, Singapore, Thailand and the United States. The grouping's 18-member economieshad a combined gross national product of $13.2 trillion in 1993 and 56 per cent of the world's annual output. The group put a moratorium on new membershipuntil 1996.4What can only be described as the ultimate humiliation was the establishment by Asean of a regional security forum (ARF or Asean Regional Forum) from whichIndia was kept out. The Forum was formally launched on 25239July 1994 and had, besides the Asean states, seven dialogue partners along with observers and consultative partners: USA, Canada, Australia, New Zealand,the European Community, Japan, South Korea and Asean's dialogue partners, including China.5 Obviously India was not considered significant enough to beinvited straightaway and its efforts to have the membership expanded were politely ignored, for the time being at least. It was widely reported that thereal reason for bypassing India was the ongoing regional tensions in South Asia and the fear that the new Forum could get troubled by the India-Pakistancold war.6Nevertheless India swallowed its pride and continued its efforts to seek membership of Asean's various forums. Prime Minister P.V. Narasimha Rao visitedmost of the Asean countries to promote bilateral relations but also to garner support for India's membership of these forums. On his return from his visitto one of the Asean nations, Malaysia (considered separately) he expressed optimism about an enhanced status for India in the Asean forums at a futuredate. He was certain that something beyond the present dialogue partnership would emerge but he was keen to force the pace of happenings. India's relationswith Asean had been developing and were being strengthened, he said.7 But how future the future date would be, it was still impossible to say. Perhaps,one could say, it would depend on India's economic strength and political cohesion. Finally, India was made a full dialogue partner in February 1996.We may now note India's relations with some of the major Asean countries. There appeared to be a particular effort from India to work its way through Thailand,Singapore and Malaysia and through its traditional relationship with Indonesia.THAILANDIndia had close historical and cultural ties with Thailand which even Thai names, temples and the language would testify to. It was reported in August 1991that recent discoveries had pushed back the dates of India's contacts with South-east Asia and extended its range. They demonstrated India's contacts withThailand and Bali (in Indonesia) in the late centuries B.C. and during the period of the Roman Empire. Excavation in Western Thailand yielded Indian beadsof glass and semi-precious stones dating the fourth century B.C. Cornelian lion pendants like those found in the Gandhara stupas of the Indus basin werethought to show the Buddha in his Shakyasima avatar, and bronze vessels also bore Buddhist imagery.8But these historical and cultural ties could not be fully utilized in promoting a new relationship because of divergence of political outlook in world politicsuntil very recently. Soon after the second world war when India and Thailand began functioning anew, they drifted apart politically. Thailand sought itssecurity in Western-sponsored military alliance system while India worked actively for the non-aligned movement and developed very close relations with240the Soviet Union. Politics increased the distance between the two and it was only after the Gulf war and the collapse of the Soviet Union, signalling theend of the cold war, that a real warmth in their ties could be noticed. Thailand blamed India for the earlier state of affairs, citing its proximity tothe Soviet Union and the Indian support to the Heng Samrin government in Cambodia backed by Vietnam,9 while in the Indian view, in the circumstances thenprevailing, the country had to protect its own national interests which determined its relationship with Moscow, Vietnam and Cambodia.In any case beginning 1991 India initiated a serious effort to bring a turnabout in Indo-Thai relations. An important dimension of this effort was the attentiongiven to the economic relationship. This was evident at the Fifth Indo-Thai Joint Trade Committee meeting in New Delhi 21-22 November which noted the rapidincrease in their two-way trade and set the target for $1 billion volume for 1992. The trade had already shot up from Rs 145.50 crore in 1987-88 to Rs558.49 crore in 1990-91. Major items that were obtained from Thailand were crude rubber, pulses, machinery, pulp and waste paper. Indian exports largelycomprised gems and jewellery, engineering goods, basic chemicals, cotton yarn fabrics, etc.10The economic ties were also pushed by the reforms underway in India. Ministers and officials from both sides were visiting the other country and exploringpossibilities of expansion of trade and joint ventures. India was only the fourteenth largest investor in Thailand. Bangkok complained about the largedeficit in its trade with India (about 19,000 million baht, according to Thai sources) and wanted India to buy more from Thailand.11Nor was politics ignored any more. At the meetings between ministers and officials of the two countries problems like the developments in Cambodia and Burmaand other issues of mutual concern were discussed much more intensively than ever before. The change in perception marked in the Indian approach was notunreciprocated in Thailand. At a meeting of the Thai International Studies Centre, a think-tank under the Ministry of Foreign Affairs, where the chiefguest was the Indian ambassador, a former Deputy Prime Minister and Foreign Minister and a highly regarded elder statesman, Dr Thanat Khoman expressedhis confidence that India would bounce back with renewed resilience in a short period. He saw India emerging as a major player in the region and outsideand called for Indo-Thai cooperation in South-east Asia. He advocated an intensive intellectual interaction between academics of the two countries andperiodic exchange of views.12PM'S VISITThe high point in the Indian endeavour to promote a new relationship was the visit by Prime Minister Narasimha Rao in April 1993. It was not fortuitous241that the first visit of Rao to South-east Asia was to Thailand, indicating the importance India was attaching to relations with that country. It was alsoan Indian Prime Minister's first visit to Thailand since Rajiv Gandhi went there in 1986.A.Thai view of the impending visit was that it demonstrated that Rao meant business—to reinforce the growing cooperation with Asean and boost trade andinvestment. For decades India had been fixed in the pattern of centrally planned economic development—that was the prevailing wisdom when the country becamefree. India also obtained modern weapons and heavy industrial parts from the Soviet Union so as to achieve its destiny of a great power. However, in thisview, India received a number of shocks. The East European countries broke free of Moscow, and the Soviet Union itself disappeared. South Korea and Taiwanbecame industrial competitors of the U.S., and South-east Asian countries, long seen by India as derivative cultures and comprador economies, prospered.India had to rethink its policies and its position in the world.13Rao arrived in Bangkok on 7 April with an "agenda", if it can be described so, of "accelerated programme of cooperation" with Thailand, to use the wordsof the Indian spokesman in Rao's entourage. His talks with the Thai Prime Minister, Chuan Leekpai, covered both political and economic issues, includingthe situation in Cambodia, Burma, problems of human rights and democracy, investment and trade. He desired that the two sides should interact yearly toidentify specific areas of cooperation and set time-frames for their accomplishment. He suggested cooperation to cover fisheries, agriculture and greatercontact between the private sectors of the two countries. Thailand was keen to secure scientific cooperation from India in the use of nuclear energy forpeaceful purposes. Both sides expressed concern over the post-election situation in Cambodia. India agreed with the international calls for democracy andpolitical reform in Burma, although India took the view that these should be determined by the government and people of that country.14To India's satisfaction, in a joint press statement issued at the conclusion of Rao's three-day visit on 9 April, Thailand concurred with India that internationalterrorism in all its manifestations was a common concern for all nations, and the two sides decided to maintain and strengthen their cooperation in combatingall forms of terrorism and its nexus with drug trafficking. Thailand appreciated the goodwill shown by India in proposing technology transfer in fibreopticsand computers, besides cooperation in nuclear technology for peaceful purposes. The two countries agreed to hold further discussions on these issues.The two sides explored avenues to increase trade (which had already hit the $999 million mark) and investment interaction both at the official and privatesector levels. Thailand welcomed the economic reforms in India and believed that this would help expand trade and investment.15 The two sides were alsobelieved to have set a target of $2 billion worth of trade between 1994-95.242Rao also promised the Indian community in Thailand that the Government would soon give a concrete shape to a proposal for providing all concessions to non-residentIndians that were normally available under dual citizenship, without actually granting dual citizenship as such.16 However, like many other such promises,the "concrete" shape had yet to be formally announced. The Government told the Rajya Sabha that India had offered to Thailand a nuclear research reactorof an advanced design under the safeguards of the International Atomic Energy Agency (IAEA). The design envisaged using only uranium as fuel and the reactorwould be designed for utilization in basic and applied research for the production of radio-isotopes.17Meanwhile the Thai Foreign Minister, Prasang Soonsiri came to India on 3 November for the Thai-India Joint Commission meeting (4 and 5 November). Thailandwas equally keen on developing economic relations with India but was also undeniably concerned about the continuing deficit in its trade with India. Therewere bigger objectives on both sides. In the Thai view, Thailand was also hoping that India would be a gateway to markets in other countries in South Asiaand the Middle East.18 Trade and investment were significant objectives. As a statement of the Thai Foreign Minister had noted in late October, the IndianGovernment was pursuing economic liberalization and India with its population of 880 million people offered considerable market opportunities for Thailand.19For its part India hoped to use better relations with Thailand and its good offices for becoming a full dialogue member of Asean and acceptance in the AseanRegional (Security) Forum (ARF). Then there were also issues like the Asean role in Burma, the three Indo-China states and the Asia Pacific Economic Cooperation(APEC) from which too India was excluded. Additionally, India was interested in securing Thai support in its efforts for expansion of the UN Security Counciland a seat in the permanent membership category.The Joint Commission reached an accord on trade and investment. It also set up a subcommittee on fisheries that would deal with various problems, includinglegal, that had arisen, as well as to promote cooperation in this area. It also agreed upon government-level discussions on aviation to encourage civilflights. It was also expected that an agreement on the peaceful use of nuclear energy and a memorandum of understanding on agriculture would be signedshortly.20 While the talks were principally focused on enhancing economic cooperation, as Thailand was making rapid economic strides and India with itsliberalization programme promised a bright prospect for markets and investment, they also provided on opportunity for the two sides to take stock of theirpolitical interests.Foreign Minister Prasang Soonsiri told the Bangkok Post that he considered India as a "balance" in a new Asian order featuring China and Japan and predominantpowers (as published). He had viewed India this way before he assumed the position of Foreign Minister, he said. India was the second largest243Asian country with a great potential, in his view. The newspaper analyst added that an "intelligence source" had noted that Thailand's wish to develop goodrelations with India came at a time when China was trying to firm up links with some Indo-Chinese states. China was also reported to have been permittedby the Burmese Government to use naval facilities on the Andaman Sea. The analyst also noted India's keen interest in joining the ARF and enhancing itscooperative status with Asean.Thai sources indicated an exchange of ideas during the Foreign Minister's visit on reforming the United Nations. Thailand agreed with the idea of reformof the UN but made no commitment on whether permanent membership of the Security Council should be expanded to include Japan or India, as a new Asian representative.21It was also noted that on the private sector level, the Thai Board of Trade and the Federation of Indian Chambers of Commerce met in parallel with thegovernment-to-government talks and agreed to continue their discussions for increasing cooperation in trade and ernment-level contacts continued through 1994-95. The Thai Deputy Foreign Minister, Dr Sarin Pitsuwan reviewed in New Delhi in November next year bilateralrelations, including trade and investment cooperation in fisheries, civil aviation, security and defence matters. He was also briefed on India's relationswith neighbours, with particular reference to the situation relating to the Kashmir problem.22The Thai Minister told newsmen that the two countries would expand their cooperation to deal with terrorism, narcotics traffic, arms smuggling, violentcrimes and flight of criminals and to draw up a framework agreement for establishing an order of the high seas. Exchange of information was taking placebetween India and Thai authorities regarding movement of criminals, terrorists and other unlawful elements and also drugs and arms smuggling. This wasa matter of concern to both countries, he said. He had also discussed in New Delhi concrete steps to develop prawn culture, poultry farming and piscicultureso that India could export more of such commodities. Answering a question he rejected the American proposal of prepositioning of U.S. arms in Thailand.He believed that the U.S. was a force for peace and stability in South-east Asia, but the presence of U.S. arms on Thai territory would not be acceptable.23Dr Pitsuwan hoped that India, Burma and Thailand would soon establish an order of the high seas to avoid friction and trespass into each other's territorialwaters and economic zones. This had become necessary because of the problems arising from poaching in the other's waters that had led to the arrest ofsome Thai fishermen. India and Thailand had hardly any real problem between themselves but there were a couple of issues that needed attention, one beingthe question of fishing in the Indian waters, and the other of illegal arms. The fisheries problem was being handled through agreement between the twocountries, but the question of arms smuggling was more ticklish.244A Thai newspaper reported that weapons were being smuggled across Cambodian and Laos borders into Thailand for transit to various battle and tension-pronezones, such as Burma, the Tigers in Sri Lanka and rebel groups in north-east India, like Nagaland, Mizoram and Manipur. It quoted the Sunday magazine fromCalcutta that Indian authorities had records of it based on interrogation of those arrested in this connection. The Thai paper alleged that weapons smugglingsurvived because it was protected by influential people in coloured uniforms, either in green (army) or khaki (police).24These issues were, however, too small to create a roadblock in Indo-Thai ties. These ties were developing along, but perhaps not as fast as the two sideswished. Another visit of significance, albeit only for one day, was that of Thailand's Deputy Prime Minister, Supachai Panitchpakdi in January 1995. Hecame to Calcutta to attend the centenary celebration of the Confederation of Indian Industries (CII). But in a press conference he urged India to startworking towards membership of Asean. The forthcoming century, he believed, would be the Pacific century with strong growth in East Asia and Asean, andhe wanted India to latch itself to this growth. Speaking on trade and investment, Supachai suggested that India use Thailand as base for entry into theAsean and other East Asian markets, even the Chinese market.He invited Indian financial companies to set up shop there, as Thailand was opening up the financial market. Other areas of cooperation identified by himincluded telecom, fisheries, tourism, gems and jewellery and chemicals. He sought India's expertise in developing a centre for trade in gems and jewelleryand offered Thai expertise in the fields of tourism and fisheries. The Thais were good managers of hotels, he pointed out.25ECONOMIC DIMENSIONIn conclusion we might take a brief stock of the trade and investment picture until 1995-96 for which figures were available. In 1992-93 India's exportsto Thailand totalled Rs 735 crore and in 1993-94 rose to Rs 1,121 crore. By 1995-96 the exports had jumped to Rs 1,586 crore. On the import side Thailandsent goods worth Rs 168.89 crore in 1992-93 and Rs 179.44 crore in 1993-94: these figures had jumped to Rs 538 crore in 1994-95 and Rs 562 crore in 1995-96.Thus even though India had a trade surplus, Thai exports had surged in the four years.26We may also note that by 31 December 1993, India had in operation some nine joint ventures in Thailand under implementation with an equity of Rs 1,000 lakh.New Delhi had also approved twenty collaboration proposals with Thailand within India by January 1994 with a proposed investment of Rs 34,880 million.By the end of 1995 there were ten joint ventures under operation and fourteen under implementation with equity of Rs 1,559 lakh and Rs 2,503 lakh respectively.27245SINGAPORE : THE LYNCHPINRelations with Singapore have since 1993 emerged as a principal factor in India's quest for new ties with Asean. What would appear on the surface an unlikelyconduit, Singapore has virtually become a kingpin in developing a different kind of relationship with the Asean countries. What would have been equallysurprising, Singapore too has not lacked in goodwill to actively respond, if not initiate, the establishment of new equations. Geopolitical and geoeconomicrealities have combined to give a kick start to the search for a new relationship.India's political relations with Singapore have traversed a zigzag course. In the early years Singapore itself was not certain of its identity and becamea part of the Malayan state. Even when it parted company and became an independent state, it was staunchly anti-communist, not just internally, and theperceptions and foreign policies of India and Singapore were considerably divergent, negatively impinging on both political and economic relations. Therewas some narrowing of the perceptional gap after the India-China border war. Singapore condemned the Chinese attack and publicly supported India. Singaporealso hoped that India would emerge as a major political and economic player on the Asian scene, but this was not to be and the two drifted apart. Singaporebecame increasingly more suspicious and hostile to the Soviet Union and warmed up to China for reasons that need not detain us here.28 But the divergencewith Indian perceptions was evident.What brought them closer again? The end of the cold war, the unfolding Asian scenario, the new economic struggle in the world, the emergence of Asean inthe big economic league and India's economic liberalization—all these contributed to a reappraisal of their relationship, a reappraisal in which Indiabecame a suitor, striving to enlist Singapore's good offices for a new role in the Asia-Pacific region, besides significantly developing bilateral relations.The decline in India's status and role in South-east Asia has been noted earlier in this chapter. This coincided with the rising economic power of Eastand South-east Asia, of which the four tigers (Taiwan, South Korea, Hong Kong and Singapore) were important components, besides Japan and a fast-developingChinese economy. The economic clout had its political implications which could not be lost upon the world, certainly not in Asia. It coincided with thetime that India had run into serious economic difficulties, even while it received a political setback with the disintegration of the Soviet Union. PoliticallyIndia set about the task of forging new equations, and along with it the Narasimha Rao government embarked upon major economic reforms in the area of freemarket and privatization that attracted attention from a number of countries, including Singapore. We shall consider the spoken—and unspoken—factors inthe calculations of both countries as we take note of the development of the new relationship.The real spurt in relationship came with the week-long visit to India of Singapore's Prime Minister Goh Chok Tong who was the chief guest on Republic246Day in January 1994. On the eve of his visit, Goh had spoken of sparking off a "mild India fever" and Singapore's strategy of opening a "second front".So far Singapore had focused on China whose economy was reputedly booming. Now the intention was to spur investments and joint ventures with India andVietnam. "Our two countries can complement each other. India has strengths we do not have. Likewise we are very international, very competitive in theopen market. If we can combine these strengths, we will reap mutual benefits", he told visiting Indian journalists shortly before his visit.29But he wanted India to open up its economy more rapidly than it had done so far, if it did not want to be marginalized. He advocated a change in the Indianattitude of looking to the West (never mind Singapore's own pro-American tilt) in favour of developing closer economic links with East Asia where the economieswould be booming for the next 15-20 years. As regards APEC, it was not considering new applications for the next three years. Meanwhile it would dependon India's economic growth, whether it would be significant enough to merit membership.Goh admitted that he had some doubt earlier about India's strategic intentions in acquiring a blue water fleet as he read an Indian general's remarks thatIndia intended to stretch its power from Singapore to Africa. But as he got to know India better, his misgivings were dispelled. He believed India hada legitimate interest to want to have a good navy to defend its long coastline.He gave an ingenuous explanation for why India was not included in the regional security forum that Asean had floated. The ARF was an attempt by countriesin the region to create a new structure where security problems could be openly discussed by the members. The priorities would be problems in East Asia—whetherChina's emergence could cause discomfort, Japan's reaction to that, the situation in the Korean peninsula. India was not a priority and that was meantin a positive sense in that it was not regarded as a threat in any way.30He was frank about cooperation between Asean and SAARC. The SAARC members had been "inward looking", he said and SAARC was an association of poor memberswhereas in Asean there were very few middle-income members. Where was the scope for regional cooperation, he asked?Accompanied by a 37-member business delegation the Singapore Prime Minister signed three agreements—on avoiding double taxation, on tourism and shippingand identifying telecommunications, financial services and infrastructure as priority areas of cooperation. While the two sides agreed to intensify bilateralas well as regional economic cooperation and to interact more closely in political matters, the thrust was on economic cooperation. The two sides exchangedassessments, the Indian Prime Minister's that of developments in the subcontinent and relations with Pakistan and the Singapore Prime Minister's that ofAPEC and its recent summit at Seattle, USA.247Undoubtedly India's major objective was relationship with Asean. As Rao said at a banquet in honour of Goh, India looked forward to a further expansionof its relation with its sectoral dialogue partner, Asean. Singapore's resources of capital, technology and export could find excellent networking, withIndia's agricultural and mineral wealth, skilled manpower and its markets. He believed that the time had come for India to step into the larger world,as it were, and claimed that it was doing so "in a well-considered systematic way", the integration of the Indian economy with the global economy.31Singapore on its part was keen to muscle in on the large India market and was particularly interested in the areas of real estate development and infrastructuralprojects in telecom, tourism (the hotel business for instance), transport, insurance and banking. Goh and his business delegation regarded the visit moreas probing of opportunities.32 Goh was, however, liberal with his advice to India on privatization and on opening up the market. He believed there wasa lot of "complementarity in contrast" between the two countries. India had a large industrial base, a big market and a reservoir of skilled manpower whileSingapore had the funds. These could be jointly harnessed even for third country joint ventures. He said he was looking for "strategic business alliances"between the private sectors of the two countries and cited as an example the Bangalore Information Technology park set to be launched within two days withan investment of U.S. $150 million (the partners were the Tatas, the Karnataka government and a consortium of Singapore companies). Goh was hoping to sparkan "India fever" among Singapore businessmen.33RAO'S RETURN VISITA further boost was sought to be given to ties with South-east Asian countries with Narasimha Rao's return visit to Singapore in early September 1994. India'spolitical objectives were heavily interlaced with economic possibilities, with trade and investment. The economic dialogue necessarily occupied centre-stage.There was some irony in the grand old man of Singapore Lee Kuan Yew welcoming Rao at a lecture-series with the statement that "India had always been orientedtowards the West... Now Prime Minister Rao has got India to look east, towards the dynamism of Asia-Pacific. History will record that he is the first Indianleader to look both West and East."34 The irony was that it was Jawaharlal Nehru who exhorted the Asian leadership not to become over-dependent on theWest, but then Lee was talking economics and not politics. Politically Singapore was still firmly anchored to the West. But economically Singapore andmany other East and South-east Asian countries had broken loose and raced ahead in their economic development. Economic and political ties with them werenow coveted and India was as much a suitor as any other country. In248any case the economic dimension had become as important as the political one, and India's road to the latter had to be through the former.In a dinner speech Prime Minister Goh said, "Singapore welcomes closer relations with India. India can use Singapore as a gateway to South-east Asia andthe Asia-Pacific." He believed that even though economic cooperation had just begun, the results were encouraging. He wanted to "deepen and broaden" thecooperation. On his way back home, Rao expressed confidence that a new era in India-Singapore cooperation was rapidly opening up as a first step towardscloser relations with Asean. Clearly Singapore was perceived as the key to Asean. The Indian Prime Minister was realistic enough not to push hard for APECmembership. "I don't knock on closed doors", he said. When a chance arrived, it would be utilized, he said.35As important as the official efforts were, the private sector was equally significant and under the circumstances its role was required by Singapore evenmore than that of the government. Rao too took a high-level business delegation with him. Indian and Singaporean businessmen held their own discussionsduring the Prime Minister's visit. They probed the possibility of a troika approach in which the companies of both countries would jointly work out manufacturingprogrammes for third countries. As a beginning fifty such ventures would be identified in Vietnam, they decided. In the coming days they proposed thatthe ventures would be in Africa. They believed that there were immense possibilities whether in trade or industry in Indo-Singapore joint ventures. Amongthe projects that were reported to have been identified for investment by Singapore were the Bangalore technology park, Bangalore convention centre, shipbuildingplant at Alang in Gujarat and the Madras industrial park.36Subsequently with the turn of the new year, memoranda of understanding (MoUs) for projects worth $130 million were signed in Calcutta between Indian andSingaporean companies which were participating in the CII centenary celebrations. These included a proposal to set up a 70-acre technology park at Gurgaon,an import terminal for petroleum products at Paradeep, a project for manufacturing telecom equipment and another for a shrimp plant.37OVERVIEWEven as the intentions about a new relationship were proclaimed loudly and boldly, the actual trade and investment situation was less satisfactory. India'sexports jumped from Rs 1,705 crore in 1992-93 to Rs 2,359 crore in 1993-94, they appeared to be on downward curve in the subsequent year. They stood atRs 2,419 crore in 1994-95 and Rs 3,048 crore in 1995-96 The import picture showed a figre of Rs 1,830.71 crore in 1992-93 increasing to Rs 1,966.44 crorein 1993-94, Rs 2,824.93 crore in 1994-95 and Rs 3,692.15 crore in 1995-96. India's249imports from Singapore were obviously surging more rapidly than its exports to Singapore.38It may also be noted that by the end of 1993, India had sixteen joint ventures in operation in Singapore with another thirteen under implementation. Theequity figures from the Indian side were Rs 527.51 lakh and Rs 821.92 lakh respectively. As far as Singapore collaborations in India were concerned, bythe end of 1993 (for which figures are available), nineteen technical and forty five financial collaboration proposals were approved with a total projectedinvestment of Rs 2,655 million.39MALAYSIA: A SECOND MOMENTUM ?India and Malaysia had had a cordial and fruitful relationship, particularly after the latter's transformation from Malaya into Malaysia. The relationshipextended to various fields, economic, political and cultural. The ethnic diversity of Malaysia with its balance between Malays and persons of Chinese originand a smaller Indian community made it akin to the cultural, linguistic and religious diversity of India. It has also been noted by this author in an earlierwriting on this subject that Malaysia was among those few countries which openly and boldly extended understanding and support to India during the borderwar with China in October 1962.40 In the balance of relationships then prevailing in Asia, as the author remarked earlier, India's capabilities, its economicand military strength and even its political stability did not match Malaysian and other Southeast Asian countries' expectations.The momentum of the relationship could not be maintained subsequently, although the ties were friendly. Then a serious perceptional difference clouded therelationship. While Malaysia and other Asean countries, particularly Thailand, were opposed to the entry of Vietnamese troops in Cambodia and supportedthe rebel armed movement against the Heng Samrin regime, India recognized and supported the Cambodia government led by Hun Sen and had close relationshipwith it. Added to this was the suspicion of the Soviet Union shared by most Asean countries and this had a spillover impact on Indo-Asean ties, more sobecause of its pro-Western bias.However, Malaysia was the first Asean country to shed this pro-Western approach for reasons that do not concern us here. India was working together withMalaysia in what was known as the group of 15 (G15), a low-key response to the G-5, the group of developed countries who set the economic and even politicalagenda for the rest of the world. Even otherwise, there was no conflict of interests or any other disputes between India and Malaysia. The importance thatIndia gave to the relationship with Malaysia could be seen from the fact that among the very few countries that V.P. Singh visited as Prime Minister in1990 was Malaysia. This visit had followed an earlier one by the Malaysian Prime250Minister, Dr Mahathir Mohamad in 1987. He also visited the Sepong centre which the Hindustan Machine Tools and the Indian Railway Construction Company wereinvolved in setting up for technical training of Malaysian experts.41Economic cooperation was also continuing even though some momentum had been lost. The first joint venture established in Malaysia commenced operation inApril 1968. A spate of joint ventures followed, but with the loss of momentum, about eighteen of them collapsed, even though some of them involved bigindustrial houses. Still, by the time the Indian Prime Minister went there in June 1990, there were twenty Indian joint ventures in Malaysia, the largestthat India had in any one country, most of them doing well, and principally in the fields of palm oil refining, power and transmission equipment.42The cooperation between India and Malaysia in the field of rail operations was further extended. New contracts were signed in February 1991 between IndianRailway Construction Company (IRCON), a public sector undertaking, and the Malaysian Railway Administration for construction of railway bridges, road overbridges and tunnels for a total cost of Rs 34 crore. IRCON was already executing two railway projects in Malaysia, one costing Rs 132 crore and the otherRs 95 crore. These projects were secured by IRCON amidst stiff international competition. For the new projects the Export-Import Bank and the State Bankof India undertook to provide financial facilities.43With the return of some political stability by 1992 and the initiation of economic reforms, what is generally known as liberalization, India sought a newmomentum in ties with Malaysia in both the economic and the political fields, for reasons that have already been discussed at the beginning of this chapter.Dr Mahathir had set Malaysia's face towards the East and that was hopefully helpful in strengthening Indo-Malaysian ties. But the essential differencewith the past must be noted again. India needed Malaysia more than the other way around—in stark contrast with the earlier situation.Malaysia was a fast-developing economy that had set its sight on joining the ranks of the developed by 2020. India was still struggling with its economicproblems and had just set upon a new economic course. Instead of India being the prop for Malaysia in securing a better balance in Asia, it was Malaysiathat was a prop that India was trying to rely upon for a new relationship with what is known as the Asia-Pacific region. India certainly had immense potentialbut presently, it was knocking at Malaysia's door, partly because its ties with Kuala Lumpur were important in themselves, but partly also because thisdoor would hopefully open other doors too. The Malaysian response was good, but not of the same kind. Malaysia took the view that Pakistan too had a claimif India were to be considered for APEC membership and that in view of their disputes, it was better to keep these from spilling over into APEC deliberations.The same view was taken about the so-called Europe-Asia dialogue.251Nevertheless India-Malaysia ties continued to develop. A new dimension was added with steps taken, even though modest, towards defence cooperation. Indiaattached more importance to it than, perhaps, Malaysia did, but certainly a new area of cooperation was contemplated by both sides. The visit of the MalaysianDefence Minister in March 1992, preceded by the visit of the Indian naval chief in February, were missions undertaken to develop a defence relationship.This was facilitated by the Malaysian decision to acquire Russian-built MiG-29 aircraft. Malaysia wanted servicing facilities and the supply of spare partsfor these aircraft. As Dr Mahathir told an Indian correspondent, this decision was not a big deal, but it was an important step towards bringing Indiaand Malaysia to a new level of cooperation.44 The Malaysian Prime Minister's stress on developing Indo-Malaysian ties also indicated that the expansionof the Indian navy was now seen in a non-threatening perspective by the South-east Asian countries.The defence ties were further boosted by the visit of the Indian Defence Minister at the time, Sharad Pawar, in January-February 1993. The two countriessigned a defence related memorandum of understanding (MoU) in Kuala Lumpur on 2 February, providing for logistic support by India to the thirty RussianMiG-29s recently acquired by Malaysia. The MoU focused on defence infrastructure build-up, modernization and training of ground forces, regular exchangeof personnel, spares and maintenance support on the British and Russian equipment purchased by Malaysia and limited joint production ventures in air andnaval armaments.45An area of concern to Malaysia was the sale of palm oil. Although Malaysia was on a fast track of economic growth, palm oil still remained a significantcomponent of its economy, and sales to India of palm oil were not to be slighted. There was some anxiety about the volume of these sales to India, althoughNew Delhi was also trying to buy as much as possible. Dr Mahathir had also referred to it in his interview mentioned earlier. He regretted that India wasbuying less palm oil from Malaysia; it could not be made up by expanding the volume of trade. But like other countries he praised India's new economicreforms and was confident that they would attract a large number of financial and investment companies from Malaysia.46However, India was not insensitive to Malaysian anxiety over palm oil export to India. Although India turned down Malaysia's offer of $258 million creditfacility, the Indian High Commission in Malaysia conveyed India's willingness to buy Malaysian palm oil over the next two years. The Malaysian IndustriesMinister, who was currently in India, was discussing the issue, he told Malaysian reporters.47 India's commitment to purchase 300,000 tons of palm oilfrom Malaysia in 1993 was confirmed at the first Ministerial meeting of the Indo-Malaysian Joint Commission in Kuala Lumpur in November 1992. The MalaysianForeign Minister acknowledged after the meeting that despite252improvement in its domestic oil seeds production and a trade balance of $98 million in favour of Malaysia, India was keen to see the volume of trade betweenthe two countries grow and that its commitment to continue importing palm oil from Malaysia was a reflection of the growing bilateral relations.The setting up of the joint commission provided another avenue for regular consultations between the ministers of the two countries, not only on bilateralmatters but also on issues that affected the region and other countries. Among the issues discussed in this first meeting was the forthcoming G-15 summitin Senegal (subsequently postponed), the recently held NAM summit in Jakarta and South-South cooperation. The agreement also paved the way for Malaysianand Indian businessmen to seek investment opportunities and contracts in each other's country.48Indo-Malaysian ties were further boosted with the visit of Dr Mahathir to India in December 1993. The visit came in the wake of an embarrassing postponementof the G-15 summit and was, partly at least, an exercise in damage control. Both the Prime Ministers referred to its importance while reaffirming theircommitment to cooperation among developing countries in their bilateral talks. Of course the focus was on the development of their mutual relations. In*fact they had an informal meeting with Foreign Ministers and Personal Representatives of the G-15 countries on 13 December.49During the visit of the Malaysian Prime Minister, the two countries signed five MoUs and one technical cooperation agreement designed to promote joint venturesbetween the private sector on both sides. The areas covering the agreements pertained to railway construction, telecommunications, rubber, professionaleducation and air-conditioning industry.While Dr Mahathir could not give a positive response about the possibilities of India being admitted as a member of APEC, as there was a "great deal ofresistance from some countries as India was not located on the Pacific rim", he accused the United States of trying to use APEC to counter the EuropeanCommunity. Addressing the Confederation of Indian Industries (CII), he said that his country had stayed away from the first summit of APEC held in Seattle(USA), because the U.S. President had not consulted all the APEC members on the summit. He was against a structured organization and wanted APEC to be"an informal gathering to discuss common economic affairs".50The Malaysian Prime Minister's visit was returned by the Indian Prime Minister in August 1995. On a three-day visit Narasimha Rao took a large businessdelegation (CII, FICCI and ASSOCHAM) with him. The Prime Minister told a select business gathering in Kuala Lumpur that India's economic reforms were irreversible,no matter which government came to power. In support of his assertion he pointed out that every state government, no matter what its rhetoric, was followingthe same policy. Speaking at a banquet hosted by the Malaysian Prime Minister, Narasimha Rao expressed India's keenness on developing closer253links with Asean. The commencement of a sectoral dialogue between India and Asean, he said, had provided a forum where India could gradually enhance itsinterface with the regional mechanism in this part of the world. India, consequently, attached great importance to its growing "constitutional links withthe Asean region", links that reinforced bilateral relations with individual countries of the region.51ECONOMIC DIMENSION AND OVERVIEWNotwithstanding the good intentions, the trade relations between the two countries were somewhat erratic. India's exports to Malaysia were of the orderof Rs 550 crore in 1992-93, rose to Rs 776 crore in 1993-94, to 900 crore in 1994-95 and Rs 1,311 crore in 1995-96. India had an adverse balance of tradewith Malaysia and imports from Malaysia demonstrated a rising curve after declining in 1993. The imports totalled Rs 1,175.48 crore in 1992-93, sloweddown to Rs 783.76 in 1993-94, but rose again sharply to Rs 1,538.78 crore in 1994-95 and Rs 2,861.75 crore in 1995-96.52So far as joint ventures were concerned, as we have noted earlier, India had the maximum number in Malaysia so far as Asean was concerned, some thirty-sixof them by the end of 1993 with a total equity participation of Rs 740 crore. By the end of 1995 their number stood at thirty-nine with an equity of someRs 8,271 lakh. There were at least thirteen of them in which the equity participation was nearly half or more than half the total investment, ranging fromsteel furniture, cotton and blended yarn, automobile gears, drugs and pharmaceuticals, specialty chemicals, dyed yarn, stainless steel, sugar factory andrailway controls.53INDIA AND INDONESIA: SO MUCH IN COMMON AND YET SO LITTLE TOGETHEROf all the Asean countries, India had the most extensive political relationship with Indonesia, but the relationship went awry for a while and has yet toblossom again, despite the absence of any real irritants for many years now. India had close historical and cultural ties with Indonesia, so evident inIndonesian art, architecture, dance and music.Indonesia's struggle for independence had the full support of Indian national leaders. Jawaharlal Nehru was particularly involved in the struggle for Indonesia'sindependence. His meeting with the Indonesian leader Mohammed Hatta, in Paris in 1926 at the League against Imperialism was the beginning of contacts betweenthe freedom fighters of the two countries. It might be recalled that Jawaharlal Nehru sent Biju Patnaik (who was then a flier) to rescue the then PrimeMinister of the provisional government set up by the freedom movement, Soetan Sharyar, from falling into Dutch hands and bring him to New Delhi.254When the Dutch were trying to re-establish their colonial rule, Jawaharlal called a meeting of Asian countries to mobilize support for Indonesian freedom.As is well known, India and Indonesia developed close relations after their independence and were, so to say, frontline states in the Non-Aligned Movement.Indonesia was a key state in South-east Asia and India well recognized this fact. It was in the late fifties and early sixties when China adopted a radicalcourse in world affairs that India and Indonesia drifted apart with President Sukarno moving closer to Beijing and making common cause with Pakistan. Themilitary take-over in the sixties turned the focus on internal developments. Gradually relations with India were repaired, but the old momentum was notcaught for a long time—perhaps it has still not been completely restored.54Relations under President Suharto had picked up and were on an even keel between 1985-1995. There were efforts to promote trade and investment and for closercooperation in the international field and in the Non-Aligned Movement of which Indonesia formally became Chairman in September 1993, although it had tostart functioning as such many months earlier because of the domestic turmoil in the erstwhile Chairman, Yugoslavia. The trade, commerce, and industriesministers of the two countries exchanged visits to step up trade and investment. India exported oil meal, cotton, iron, basic chemicals and Pharmaceuticals,engineering and cotton yarn fabrics, and imported items based on pulp and waste paper, vegetables, inorganic chemicals, primary steel and pig iron.55 However,the trade was small in 1990, a mere Rs 75-76 crore. India was down to the fourteenth place as an investor in Indonesia (total $186 million by 1990). Butit had 11 joint ventures in operation in Indonesia in sectors like cotton and synthetic yarn, engineering files, billets and wire rods and steel furniture.56The Indian Railways were active in bidding for the running of suburbun railways in Jakarta and in supplying railway materials.57 Some recent economic trendswill be noted later.255Relations were closer on international political issues, like the North-South problems and the Non-Aligned Movement. Indonesia hosted a meeting of the StandingCommittee for Economic Cooperation of NAM at Bali 10-13 May 1993. The meeting addressed itself to the question of relaunching of the North-South dialogue,as well as to South-South cooperation. India's representative, Minister of State for External Affairs, R.L. Bhatia strongly endorsed President Suharto'sinitiative in calling the meeting and the emphasis his opening speech placed on the need to revitalize and reorient the debate on structural issues andissues-of development. The second day's session was concerned with South-South cooperation. Bhatia deplored the fact that, while countries in the Southhad expressed their firm belief in it, in actual implementation of important projects and programmes, there was a "persistent lack of commitment", as mostof these programmes remained on the periphery. Even though there was no dearth of expertise, technical capabilities, and a fair amount of technology, theactualutilization of these capabilities in South-South cooperation had been minimal, he said, and asked for concrete steps to enhance the mutual utilization ofthe South's capabilities.58Prime Minister Narasimha Rao went to Jakarta in September 1993 to participate in the tenth NAM summit. It is doubtful, however, if there was much time forany intensive discussions with the Indonesian authorities on either bilateral issues or India-Asean matters, and to carry forward their cooperation, despitethe propinquity of their views on issues before the non- aligned and the general international situation.At the NAM summit President Suharto, who now became formal chairman of the movement, in his inaugural speech called for a new consensus on the pressingneed for joint action by developing countries and for a firm stand on the kind of conditionalities being enforced by foreign financial institutions andgovernments on their economic aid and loans. Narasimha Rao made a strong defence of the continued raison d'etre of the Non-Aligned Movement, with whichIndonesia fully agreed.59These third world-related contacts continued. The Indian Prime Minister sent a special envoy, R.L. Bhatia to Jakarta next month to invite President Suhartoto the G-15 Summit 13-15 December and the coinciding "Education for AH" conference on 16 December in New Delhi. The Indonesian President confirmed hisparticipation and stressed the importance of South-South cooperation, emphasizing its enormous potential that needed to be further explored so that theSouth could exercise more weight in the North-South dialogue. He spoke about his active involvement in pushing this process as chairman of NAM.60As it happened the G-15 was postponed for what can only be described as lack of sufficient motivation, with a majority of the heads of government expressinginability to attend. The "Education for All" summit was held, but it is doubtful if, with the presence of the executive heads of government of Malaysiaand Zimbabwe in India, any serious discussions on the expansion of Indo-Indonesian bilateral relations could have taken place. Thus with so much in commonin their outlook on the world and with a history of cooperation in the non-aligned movement, the two countries had not been able to realize the full potentialin their mutual relations.Even the economic relations had not reached any substantial level. India's exports during April-September 1994 were a paltry Rs 345 crore (during the years1993-94 they were Rs 700 crore) while imports for the same period showed a somewhat healthier growth, rising to Rs 455-51 crore in April-September 1994as against Rs 121 crore for the same period a year earlier. India's exports, however, spurted to Rs 2,212 crore by 1995-96 and imports to Rs 1,564.99 crore.Clearly trade was picking up.61 India had eighteen joint ventures in Indonesia by the end of 1995, eleven with a little over Rs 14 crore under operationand thirteen with some Rs 53 crore under implementation.62256INDIA: VIETNAM AND CAMBODIAIndia's ties with Vietnam have been very cordial, in fact very warm and there has been a tremendous convergence in their political viewpoints. Yet, somehow,the potential has not been fully realized. India appears to have missed the opportunity to evolve an abiding, special relationship with that country, perhapsbecause of India's own economic difficulties. As a Vietnamese Foreign Minister, . Nguyen Co Thach, told visiting Indian journalists in September 1990,not much had been achieved in forging closer economic ties,63 and this after a decade of Vietnam's quest for a closer relationship with India.Vietnam's keenness to develop a close political and economic relationship with India has been noted in the earlier book.64 Vietnam was in acute need ofeconomic assistance and it hoped for such assistance from India. That was the time and opportunity to seal a special relationship and India's own interestsrequired the establishment of such a relationship, but India did not or could not grasp the opportunity. It was mired in its own economic difficulties,but quite apart from them, such efforts were frustrated in bureaucratic labyrinths. One ministry's efforts would be nullified by another, and all weresubject to the veto of the Finance Ministry, regardless of the demands of the long-term interests of India. It was well said, God proposed, finance disposed.This is, of course, not to suggest that there were any problems between India and Vietnam or that their relations were not cordial, but only to underlinethe fact that an opportunity to establish a very special relationship like the one that exists between China and Pakistan, was missed and perhaps wouldnot come India's way ing back to the ties between the two countries during the period, it cannot be ignored that Indo-Vietnamese relations had an important Cambodian componenttoo. India was among the very few significant countries outside the Communist bloc (minus China and North Korea) that give considerable support to theVietnamese position in Cambodia and extended recognition to the Heng Samrin government, and India did it at some cost to its ties with Asean countries.In general India played a moderating role, trying to bring various parties in the conflict together and search for a political settlement. Behind the scenesand sometimes more publicly, both Vietnam and the Cambodian governments sought India's advice and good offices.65The Vietnamese connection was not a divisive political issue in India. No party opposed it, most had a positive attitude about it. Even though there wasa change of government in India December 1989, there was no diminution in the policy of friendship with Vietnam and the level of contacts with Hanoi andPhnom Penh. The new External Affairs Minister, I.K. Gujral, went to Hanoi in April 1990 to participate in the fourth meeting of the Indo-Vietnamese JointMinisterial Commission and to hold consultation with the Vietnamese leaders. During his visit, India and Vietnam agreed to establish a credit-line of Rs100257million in 1991 to be mainly used for railways and telecommunications as well as to increase the trade quotas between the two countries.66India offered to step up its imports from Vietnam and proposed joint ventures in hotels, sugar mills and pharmaceuticals. The items identified by Indiafor imports included silk, steel scrap, pig iron, rubber, tin and cashew nuts, while New Delhi urged Vietnam to increase its imports to rectify the adversebalance of trade with Vietnam. India suggested for import by Vietnam a wide range of engineering goods, dyestuffs and chemicals, mining equipment and pharmaceuticals.67Gujral also offered the Vietnamese that in whatever field Vietnam wanted cooperation or "whatever we know about technology and science that is requiredis always at the disposal of Vietnam, because we want Vietnam to develop fast, to consolidate economy and for this India will always be willing partnerand willing cooperator to try to help Vietnam advance."68The political affinities were also evident from the Vietnamese Foreign Minister's replies to newsmen on the Kashmir issue. Nguyen Co Thach said that they(Gujral and he) did not discuss much about Kashmir for the sole reason that both sides did not hold differing views. As Thach put it, in 1980 during hisvisit to Kashmir, former Prime Minister Pham Van Dong had made it clear that Kashmir was a sacred part of India. "Our stand is clear and unchanged. Wesupport the view that Kashmir belongs to India because this is a just cause."69India had also already established very considerable cooperation in the area of railway construction since 1977, including supply of rolling stock for VietnamNational Railways and training of their technical personnel.70 This cooperation was reiterated and further expanded during the nineties.The Indo-Vietnamese Joint Ministerial Commission meeting was followed by a trade pact reached on 3 May. Both sides pledged to strive for a turnover of US$100 million in the first year of its operation. The two sides also signed drafts for a trade protocol.71Yet another step forward was taken when the then Commerce Minister, Arun -Nehru, visited Vietnam and signed a three-year trade protocol which envisagedlifting the trade level from a meagre Rs 200 million to a target of $100 million annually as soon as possible. India undertook to achieve an import turnoverof goods worth $50 million during the first year of the operation of the protocol, gradually stepping up its imports from Vietnam, while Hanoi too decidedto strive for an import turnover of a similar volume. In continuation of the spirit of this agreement, India undertook to supply cotton worth $17 millionto Hanoi.India also spudded its first well in oil exploration in Vietnam in mid-1990. Of the total foreign investments in oil exploration, the U.K. contributed ashare of 20.8 per cent, France 18.8, Holland 14.3, Japan 14.2 and India 8.4 per cent. It may258also be noted that between 1978 and 1990 India had opened a credit-line of some Rs 850 million in addition to the Rs 450 million credit offered by the EximBank.Relations continued to be cemented through exchange of visits of dignitaries of both sides. The legendary hero of the Vietnam war of independence, GeneralVo Nguyen Giap and Madam Giap, who was a political and social worker in her own right, visited India in January 1991 and equally notably, President R.Venkataraman went to Vietnam in April 1991. The Indian President deliberated with the Vietnamese leaders, including Premier Do Muoi and Vietnam CommunistParty General Secretary Nguyen Van Linh, on bilateral and international issues. It was not a coincidence that his visit took place during the celebrationsof the birthday of Ho Chi Minh who, R.V. said in Hanoi, had, like Mahatma Gandhi, left behind "an indelible mark not only in their own nations but in thehistory of modern civilizations".72 The President pledged India's continued support to Vietnam, without any strings attached, for rebuilding its economy.73The visit resulted in an agreement by the two sides on an Indian proposal that it would set up an industrial estate with small and medium industries inVietnam to absorb Vietnamese labour. The agreement included the establishment of a rice research centre with Indian assistance and negotiations for a protocolon cooperation in civil aviation as well as banking cooperation, as a part of which India would open a branch of the State Bank of India in Vietnam. Inextension of their ongoing cultural cooperation programme, India undertook to reserve a number of Jawaharlal Nehru scholarships for Vietnamese studentsin India.The change of government in New Delhi made no difference so far as continuity of ties with Vietnam concerned. If anything, the return of a Congress governmentheaded by P.V. Narasimha Rao brought greater stability to this relationship. Both economic and political cooperation were further expanded.In the economic sphere, Vietnam expressed keenness to have an oil refinery with Indian assistance and was ready to supply crude to India by adding a 4 percent depressent in Vietnamese crude.75 India too conveyed its interest in the gas project in Vietnam and its capabilities in the field of providing servicesfrom project preparation to commissioning of the pipe-line system.The fifth meeting of the Indian-Vietnam Joint Commission took place in New Delhi on 24 March 1992, with new foreign ministers on both sides, MadhavsinhSolanki in India and Ngugen Manh Cam in Vietnam. The two foreign ministers also reviewed regional and international issues, including NAM and the potentialrole of the United Nations. They declared their intention to continue to stand "by each other and maintain new coordination in the conduct of their foreignaffairs. Their discussions no doubt revealed close identity of views on the international situation.76The Joint Commission identified new areas for cooperation including mining, rock phosphate, rubber plantation and related industries, cotton259development, cashew and tea plantation and processing of the transport sector, exploration for natural gas, maritime transport, remote sensing and sugarmills. India was also urged to examine the possibilities of assisting Vietnam for the restoration of the Cham monuments in central and southern Vietnamthat were the symbols of India's cultural interaction with Vietnam.77 The two sides also expressed satisfaction at the fact that a number of Indian businessdelegations had visited Vietnam for expansion of economic relations.Another highlight in the leadership exchanges was new Secretary General of the Vietnam Communist Party Du Muoi's visit 8-13 September 1992, accompaniedby a large delegation. He was the highest-ranking dignitary to come to India from Vietnam since Ho Chi Minh's visit in 1957. The visit provided the leadersof the two countries an opportunity to exchange views on the international situation, where very considerable propinquity was reflected in the joint statement.The visit pushed the process of cooperation to achieve a new depth as the two sides decided to further strengthen their ties both in political terms andin the economic sphere.78 The two sides agreed to implement more effectively the existing agreements and to identify more areas and forms of cooperation,with emphasis on joint ventures in the fields of oil exploration, exploiting and processing of minerals, small industry, agriculture and agro-based industries,hotel industry and marine products. They also decided to finalize as soon as possible an air services agreement and an agreement to avoid double taxation.79The relationship remained strong and contacts were maintained at ministerial and other levels. The Vice-President, K.R. Narayanan, visited Vietnam a yearlater. He was no stranger to Vietnam, having served there as a diplomat some thirty years earlier. The Indian Vice-President extended full support to theeconomic reforms programme now underway in Vietnam, or "creative renovation", as it was often described in Vietnam, and endorsed its foreign policy ofindependence, openness and diversified relations, as also Vietnam's efforts to strengthen relations with South-east Asian nations.80 General SecretaryDu Muoi in his meeting with Narayanan affirmed Vietnam's support to India's quest for a permanent seat in the UN Security Council. He also reiterated theVietnamese position that Kashmir was an integral part of India.81The Vietnamese desired the shifting of the focus in their ties to the economic dimension. This was reportedly indicated to the visiting Vice-President bythe Vietnamese Prime Minister, Vo Van Kiet.82 The Vietnamese, while welcoming joint ventures with India, were keen to obtain not just technical and technologicalassistance but investment of Indian capital too.83 They were greatly in need of capital investment, since it was extremely difficult for them to raisetheir own funds for joint ventures. India's trade with Vietnam by the end of that year was constituted by exports worth $22 million and imports worth $52million. Exports260jumped to Rs 184 crore in 1994-95 and Rs 412 crore in 1995-96 while imports remained marginal.84India-Vietnam ties received a further boost when Prime Minister Narasimha Rao made a call at Hanoi a year later, pledging to lift India's friendly relationswith Vietnam to a new level by giving them a strong and meaningful economic content. He told his Vietnamese counterpart at a banquet hosted by the latterthat India was "fully ready to be a partner in Vietnam's development",85 On his part the Vietnamese Premier Van Kiet extended Hanoi's support to Indiato expand its activities and enhance its role at the United Nations and welcomed India's efforts at participating in the activities of the nations in theAsia-Pacific region in particular and in the world as a whole. This was significant in view of the fact that Vietnam was a candidate for Asean membershipand India was striving to forge a closer relationship with Asean and with other Asia-Pacific forums.By this time even the business community had woken up to the business possibilities in Vietnam whose economy had begun to take a turn towards a thrivingdevelopment. A large and representative business delegation accompanied the Prime Minister to Vietnam (of course they were also going to Singapore, whichwas the Prime Minister's next port of call). The business delegation, led by R.P. Goenka, signed six joint venture agreements worth $158 million with Vietnam.The agreements included transmission tower manufacturing and turnkey transmission line, assembly of railway coaches, generation of power and fertilizerfrom municipal wastes, a sugar mill and truck tyres.86Reflecting the positive attitude of Indian business, Goenka expressed the belief that in the next five years Vietnam could expect a minimum investment of$500 million from India and that another 5-12 agreements would be signed in the coming six months.87 The Vietnamese Premier hoped for more exchanges atthe business and private sector levels. It should, however, be mentioned that for all the goodwill, India had by the end of 1995 just one joint venturewith Vietnam under implementation with an equity participation of Rs 5.5 crore.India and Vietnam agreed to establish a joint working group that would meet within a month to accelerate economic cooperation. Van Kiet referred to specificareas of cooperation, agriculture, food processing, sugar, small dairy farming, rubber industry, small and medium enterprises, gas-based industries andmining. The two countries also reached agreement relating to defence cooperation, avoidance of double taxation, foreign office consultations, and easingof visa regulations. The Indian delegation clarified that the defence agreements had no "security related overtone" and were confined to training and upgradingof equipment.88Summing up, it would be appropriate for India to put a high value on relations with Vietnam, both for own sake and for the sake of a healthier balance inEast Asia. Vietnam has been passing through a transitional phase. Vietnam261was equally subject to the winds of change that blew over and shook socialist countries, the stagnation of a highly centralized control over the economyand the demand for political change. Vietnam had to launch upon its own version of reforms, with its buzz word doi moi, often translated as transformation,new way or radical change.Even while the economy showed a rapid recovery, reforms ran into heavy political weather for both political and economic reasons. There were divisions withinthe Communist Party over the nature and pace of reforms. Hanoi's excruciating dilemma was strongly reminiscent of the debates in Beijing, both leadershipsfinally deciding to curtail political change, hoping to contain the problems through economic liberalization and the attendant improvement of living conditions.As in China, cadre corruption, inflation and inefficiency have plagued the system. The strong link between political and economic change cannot be severedso easily. Furthermore, economic transformation requires a structural change which is inevitably an agonizing and an agonizingly prolonged process.In any case in this transitional phase Vietnam requires large doses of foreign assistance both in terms of capital and technology for the construction andmodernization of its infrastructure. India could not have met all its needs but could have done better than it has done. It can still play a useful rolein Hanoi's economic development and in balancing its dependence on other countries.Vietnam is an important balancing force in East and South-east Asia. It resisted the American efforts to dominate the region and subsequently frustratedthe Chinese attempt to establish their hegemony. A strong Vietnam complements India's interest in the region. Earlier the Asean countries were wary ofVietnam because of the presence of Vietnamese troops in Cambodia and its bid to form an Indo-China federation. With the withdrawal of troops and abandonmentof any plans to bring together organizationally the countries of the peninsula, the way was cleared for closer relations with other South-east Asian countries.Not only has Vietnam become a full member of Asean, but the economic opportunities there are attracting worldwide attention. Thailand and Indonesia weremaking serious efforts at a substantial presence, Japan has moved in a big way, and even the United States, shedding its inhibitions, is eyeing Hanoi'seconomic potentialities. It was clearly in India's interests to keep expanding extensive relations with Hanoi, secure as much coordination as possibleand not be marginalized in the emerging situation.THE CAMBODIAN CONNECTION, CAMBODIA AND VIETNAMUndoubtedly relations with Vietnam have had a Cambodian dimension. India was one of the very few non-Communist countries that had recognized the Heng Samringovernment that was set up in January 1980 after the Vietnamese262troops swept into Cambodia and chased the Khmer Rouge away.89 This constituted a fairly valuable asset for the Vietnamese as well as for the new setup inPhnom Penh. Within the new regime it was Premier Hun Sen who emerged as one of the chief players in the new government. India maintained close liaisonwith Hun Sen and with the Vietnamese authorities as well as with most other parties involved, the Asean countries, France, Japan and USA.India was supportive of the international efforts to bring about a peaceful conclusion to the conflict in the region. The core problem was to harmonizethe differing interests and often sharply conflicting stances in finding a peaceful solution. Indian endeavours were directed towards finding common groundand moderating the extreme positions taken by the contestants. Of course, India had no contact, nor did it wish to have any contact, with the Khmer Rougewhich it regarded as a genocidal, maniac group, but kept its lines open to other groups, particularly with Prince Sihanouk who, in the Indian view, hadto play an important role in any peace settlement.Vietnam and Cambodia were particularly keen on a continuing Indian role. As the then Foreign Minister of Vietnam, Nguyen Co Thach, told a group of Indianjournalists on a visit to Vietnam, Vietnam wanted India to play an active role in the Cambodian peace process by joining in the UN interim administrationand the peace-keeping force to be set up to oversee the implementation of the agreement reached among the four warring factions. He recalled that Indiahad played an important role as Chairman of the Indo-China Commission in 1954 and should do likewise in any new mechanism that might be agreed upon forrestoring peace in Cambodia.90As we know the peace process was hugely complex. Soon enough there was a stalemate, as there were many stalemates earlier and many later. These stalematesgenerally related to the attempt of each faction to improve its own position vis-a-vis the others. The co-chairmen of the Paris International Conferenceon Cambodia appealed to the members of the coordinating committee to make concerted efforts to resolve the deadlock. In pursuance of this appeal Indiainitiated fresh moves to break the impasse, holding talks with various groups and countries that were involved in seeking a peaceful solution. In thisconnection Indian representatives held extensive discussions (6 January 1991) with the Vietnamese Foreign Minister, particularly on the peace proposalsthat had been put forward by the five permanent members of the UN Security Council.91Earlier the then Prime Minister, Hun Sen of Cambodia had come to New Delhi to confabulate with the Indian authorities on the Cambodian tangle. He stressedthe need for a viable cease-fire, without which the United Nations Transitional Administration for Cambodia (UNTAC) would not be very effective, and heexpressed Cambodia's hope that India might be associated with263it. Foreign Minister Gujral assured the Cambodian leadership that India had a vital interest in peace, and hoped to see the end of the civil war.92Representatives from twelve countries including India, had met in Jakarta 9-10 November 1990 to hammer out a plan to settle the twelve-year-old civil warin Cambodia. The participants asked Indonesia and France to prepare a comprehensive draft of the peace plan, keeping in view the blueprint developed inAugust (1990) by the permanent members of the Security Council. The peace plan would create a mechanism for governing Cambodia during the transitionalperiod before UN-monitored elections. It also involved human rights guarantees, arrangements for an end to fighting and measures to guarantee compliancewith the accord.93A particularly contentious issue was the powers of the UN transitional authority. The Hun Sen government and the Vietnamese wanted the UN role to be definedby the Supreme National Council (SNC) the warring groups had agreed to set up. The council comprised six members of the Phnom Penh government of Hun Sen,and six of the three .other factions that had been opposing it. India was not against a UN transitional authority in Cambodia but was opposed to the impositionof an agreement that would impinge on Cambodia's sovereignty.94An accord of sorts was reached among the warring groups and Prince Norodom Sihanouk became the Chairman of the SNC. Sihanouk told an Indian diplomat thathe deeply appreciated India's efforts for peace in Cambodia and believed that India had a major role to play in observing and monitoring the cease-firein Cambodia. He also complimented India for not deviating from the Indian path.95The new Congress government that had come to office in India was, if anything, even more interested in the peace process in Cambodia. Prime Minister NarasimhaRao offered India's "supportive role" in implementing the historic accord signed in Paris on 23 October 1991, hopefully bringing the long- standing conflictto an end. In a message, Rao assured Prince Sihanouk that India would do all it could to assist with the arrangements in the transition period and forthe reconstruction and rehabilitation of Cambodia. India looked forward, Rao said, to the emergence of a truly sovereign, independent, democratic, neutraland non-aligned Cambodia. It might also be mentioned in passing that India was also a participant in the Paris meet and a signatory to the accord reachedthere.96In pursuance of this declaration of support, and the first Indian minister to visit Cambodia, the then Minister of State for External Affairs, Eduardo Faleirowas sent to Phnom Penh (12-15 December) to consolidate relations with the new authorities. In meetings with Sihanouk and Hun Sen, he extended India's fullsupport to and solidarity with the supreme council. Coinciding with his visit an Indian ambassador presented his credentials to Prince Sihanouk. The Prince264lauded India's contribution to the restoration of peace in Cambodia and hoped that if would assist in the development of the war-torn country.97The Indian Minister also pledged Rs 30 million worth of commodities to Cambodia. Medicines worth Rs 11 million, he said, were already under shipment andanother Rs 15 million worth of aluminium foil and sheet were being dispatched shortly.98The zigzags of the peace process and the developments concerning the establishment of a new Cambodian government elected by the people need not concernus here. Be it noted briefly that the Khmer Rouge pulled out of the peace process and resumed guerrilla warfare. But the peace process was not abandoned.Under a UN administration elections were held in June 1993. The Royalist Funcinpec Party, led by Sihanouk's son Norodom Ranaridh, won a few more seatsthan Hun Sen's Cambodian People's Party. However, the two parties, in the interests of the unity of the country and of meeting Khmer Rouge's challengedecided to share power and provide a government to the country, which, in the nature of things, was bound to be continually shaky. India continued to maintainclose and cordial links with Cambodia and be of as much assistance as possible, even though such assistance could only be of a limited nature, given thecircumstances of the complex problems there.NOTES1. See the author's India's Foreign Policy, Vikas Publishing House, New Delhi, 1987 and 1994.2. Hindustan Times, 18 March 1993.3. The Hindu, 18 March 1993.4. See Economic Times, 25 October 1995.5. Hindustan Times, 26 July 1994.6. India had formally sent a letter of request for membership, but it was not taken up at the Forum meeting in Bangkok.7. The Hindu, 6 August 1995.8. The Statesman, 30 August 1991.9. Bangkok Post, 2 February 1993.10. Foreign Affairs Record, 22 November 1991, p. 228.11. Bangkok Post, 2 February 1993.12. Foreign Affairs Record, 26 March 1993, p. 87.13. Article in the Bangkok Post, 7 April 1993.14. Ibid, 18 April 1983.15. Asian Recorder, 7-13 May 1993 p. 23116, see also Hindustan Times, 10 April 1993.16. Indian Express, 10 April 1993.17. PTI report from New Delhi, 9 December 1993; also All India Radio (English), 16 December 1993, quoting a similar statement in the Lok Sabha.18. Bangkok Post, 29 October 1993.19. Article by Worannant Krongboonying and Nusara Thaitawat in Bangkok Post, 3 November 1993.26520. Bangkok Post, 6 November 1993.21. Woranant Krongboonying, analysing the talks between the Thai and Indian Foreign Ministers, in Bangkok Post, 13 November 1993.22. Hindustan Times, 10 November 1994.23. The Hindu, 12 November 1994.24. Siam Post, in Thai, 13 December 1993 in SWB, FF/1876/B, p. 3.25. Times of India, 6 January 1995.26. Ministry of Commerce, Government of India, New Delhi, Annual Report 1S94-95 and Annual Report, 1995-96.27. Source: India Investment Centre, New Delhi.28. For details see V.P. Dutt, India's Foreign Policy, op. cit.29. Ramesh Chandran in Times oflndia,\9 January 1994.30. M.K. Dhar from Singapore in Hindustan Times, 19 January 1994.31. Indian Express, 25 February 1994.32. Times of India, 25 February 1994.33. Ibid, 26 February 1994.34. Economic Times, 9 September 1994.35. The Hindu, 10 September 1994.36. Hindustan Times, 9 September 1994.37. Times of India, 6 January 1995.38. Ministry of Commerce, Government of India, Annual Report 1994-95, and Annual Report, 1995-96.39. Source: India Investment Centre, New Delhi.40. V.P.Dutt, India's Foreign Policy, op. cit.41. Foreign Affairs Record, 7 June 1990, pp. 142-3.42. Patriot, 13 July 1990.43. Foreign Affairs Record, 26 February 1991, pp. 15-16.44. Interview with Subhash Chakravarti, Times of India, 26 April 1992.45. Indian Express, 3 February 1993.46. Times of India, 3 February 1993.47. Now Straits Times, Kuala Lumpur, 16 August 1992.48. Ibid., 3 and 4 November 1992.49. Foreign Affairs Record, 14 December 1993, pp. 342-3; also SWB, 16 December 1993, FE/ 1873 A/2, quoting ISI Diplomatic Information Service, New Delhi,13 December 1993.50. SWB, 16 December 1993, FE 1973, A/1 quoting PTI, 14 December 1993.51. The Hindu, 4 August 1995.52. Ministry of Commerce, Government of India, Annual Report 1994-95.53. Source: India Investment Centre, New Delhi.54. For relations during the period from the sixties to the eighties, see V.P. Dutt, India's Foreign Policy, op. cit. There is also in Indonesian editionin English of this book.55. Foreign Affairs Record, 23 January 1990, p. 11.56. Ibid.57. The Hindu, 29 January 1990 and Foreign Affairs Record, 1 May 1992, pp. 82-3.58. Foreign Affairs Record, 12 May 1993, p. 130.59. The Hindu and other daily papers, 2-4 September 1993.60. Foreign Affairs Record, 7 October 1993, p. 281.61. Ministry of Commerce, Annual Report 1994-95 and Annual Report 1995-96.26662. Source: India Investment Centre, New Delhi63. PTI dispatch, 16 September 1990, in SWB, FE/0872/A3/2,18 September 1990.64. See V.P. Dutt, India's Foreign Policy, op. cit.65. In this connection a particularly effective role was played by Secretary Lakhan Mehrotra in the Foreign Office who did a great deal of running aboutbetween the various parties concerned and gave mature advice to the Cambodians and the Vietnamese. He was in close contact with Prime Minister Hun Senalso.66. Voice of Vietnam, 13 April 1990, in SWB, FE/0741/ A3/2,17 April 1990.67. PTI from Hanoi, 14 April in SWB, FE/0741 /A3/1,17 April 1990.68. Voice of Vietnam, 14 April, in SWB, 0740/A3/2,17 April 1990.69. Ibid.70. Foreign Affairs Record, 20 February 1990, p. 53.71. Ibid., 3 May 1990, p. 123.72. The Hindu, 25 April 1991.73. Times of India, 26 April 1991.74. Voice of Vietnam, 26 April 1991, in SWB, FE/1058/A3/2,29 April 1991.75. This was conveyed by the Vietnamese Minister of Heavy Industries to the visiting Indian Petroleum Minister, Foreign Affairs Record, 29 October 1991,p. 204.76. Foreign Affairs Record, 24 March 1992, pp. 132-3.77. Ibid., 25 March 1992, pp. 143-4.78. Hindustan Times, 10 September 1992.79. Foreign Affairs Record, 13 September 1992, pp. 286-9.80. Voice of Vietnam, 23 September 1993, in SWB, FE/1805/B/9, 28 September 1993. It may be mentioned here that subsequently Vietnam joined as a full memberof Asean.81. SWB, FE/1805/B/10,28 September 1993.82. PTI (23 September), SWB, FE/1905/B/9,28 September 1993.83. All India Radio (English), 22 September 1993.84. Source: Direction of Trade Statistics, Year Book, 1994, IMF, Washington D.C.; also Annual Report 1995-96, Ministry of Commerce, Nev* Delhi.85. Indian Express, 6 September 1994.86. Economic Times, 7 September 1994.87. Ibid.88. The Hindu, 7 September 1994.89. For India's policy with regard to the Cambodian developments in the period before 1989, see V.P. Dutt, India's Foreign Policy, op. cit.90. SWB, FE/0872/A3/2,18 September 1990.91. Ibid., FE/0964/A3/2, 8 January 1991.92. Hindustan Times, 9 October 1990.93. Indian Express, 12 November 1990.94. PTI, 10 January, in SWB, FE/0968/A3/1,12 January 1991.95. Sihanouk's meeting with Secretary in the External Affairs Ministry , L. Mehrotra in Beijing, 14 July. Hindustan Times, 15 July 1991.96. The Hindu, 25 October 1991.97. Times of India, 15 and 16 December 1991.98. SWB, FE/1255/A3/10,14 December 1991.267Chapter 8 India and the Persian Gulf and West AsiaWest Asia naturally falls into two or three parts. First there are countries that surround the Persian Gulf. The Gulf not only separated those around itfrom those away but often created a gulf among those who surrounded it, as the recent wars in the region demonstrated. But there was also another kindof division in West Asia. That was between the Shia Iran and the Sunni Arab countries with sizeable Shia populations. There were also extremist (or, asis more fashionable to describe them, fundamentalist) elements in both of them vying to spread the faith as they proclaimed it.Yet another fact of life in this region were the traditional rivalries that defied the logic of language and ethnicity. Using most of the criteria normallyemployed to gauge the potentialities of harmony or tension, the Arab countries had the most in common, language, culture, history, community, and so on,and should logically constitute the most cooperative and tranquil area, and yet theirs was among the most volatile and conflict-prone region. Internalfactors combined with external elements to bring about a highly combustible situation. Many countries, like Saudi Arabia, Iraq, Syria, etc. were beingruled by small sectarian groups who had often to adopt repressive measures to perpetuate their rule.Laid over the traditional animosities and tribal struggles was the intervention of outside powers—Britain, France, USA and Russia. Imperialism had createdartificial boundaries but also a determined resistance by its successors to any change (except for the short-lived UAR which in fact highlighted the difficultiesin the way of any attempt to undo the states that had come into existence). The creation of Israel in the heart of the Arab world became another majorsource of continued tension and conflict.West Asia's important asset was also the source of a great deal of trouble in the region. The area was awash with oil and natural gas whose continued anduninterrupted supply was critical to the economies of many developed countries and imparted to the region a high strategic significance. Apart from otherreasons, this factor alone made conflict an inherent probability.268India has had historical and modern contacts with most countries of the region, on the one hand significant historical and cultural interaction and on theother economic, trade and political relations with Arab countries like Egypt, Syria and Iraq and more recently with United Arab Emirates, Kuwait, Qatarand Bahrain. Historically, with Iran the relationship was even closer. India too had sizable Sunni as well as Shia Muslim communities.1GULF WAR AND INDIA: IRAQ AND KUWAITFor the period under consideration in this volume, the most consequential event was the Gulf war. In many ways it changed the world with all its plusesand minuses. We have already considered at some length the developments with regard to the Gulf war and their international ramifications and lessons inthe chapter on India and the United States. Suffice it to say that whatever may have been the historical claim and the roots of the conflict, Iraq's invasionof Kuwait was an act of aggression and a breach of international law.Equally, there is little doubt that a reluctant U.S. public and even more reluctant European opinion was brought around, partly through media managementbut essentially, as the then U.S. Senate majority leader, Robert Dole spelt it out, because of "o.i.l". The Secretary of State echoed the sentiment. "Theeconomic life-line of the industrial world runs from the Gulf and we cannot permit a dictator such as this to sit astride that economic life-line."2It is entirely probable that the war could have been wound up much earlier if the Bush administration had not kept on widening it. The strength of the Iraqiforces in Kuwait was grossly overblown (from the actual of some 300,000 to the officially claimed 600,000). Information was also withheld that just whenKing Fahd of Saudi Arabia was prevailed upon to invite the stationing of U.S. troops in his country, Iraq had begun withdrawing its crack Republican Guarddivisions from Kuwait entirely.Nevertheless the Gulf war caught the Government of India on the wrong foot. There were reasons for the embarrassing ambiguity with which New Delhi handledthe developments. Iraq was among the West Asian countries with whom India had closer relations. The economic ties with Iraq were stronger than with manyother countries in the region (of course there was also an important economic dimension with Kuwait). Iraq was also more secular in its outlook, besidesbeing socially more advanced than most other West Asian countries. From India's point of view, Iraq was a friend who had not fallen for the religious blandishmentthat Pakistan was dangling over the issue of Kashmir. Iraq had taken a far more positive approach and was also keeping away from the so-called Organizationof Islamic Conference, which Islamabad had been utilizing to drum up support in regard to the Kashmir issue.269The economic aspect was no less disturbing for India. Already Indians had suffered considerable damage in the Iraq-Iran war. A hundred Indian firms hadbeen operating in Iraq before the conflict. The Iran-Iraq war saw the number dwindle to less than 30. Nearly 50,000 workers, engineers and technicianshad been employed in Iraq but the Iran-Iraq war brought about an exodus, leaving less than 9,000 behind. Iraq owed very considerable sums to Indian firms,both public and private, some $500 million in deferred payment. In 1985 Iraq owed $1 billion to Indian companies, including Indian Railway ConstructionCompany (IRCON), RITES and two private companies, of which $500 million were realized by 1989. Moreover, Iraq was a significant source of oil imports byIndia. By an agreement concluded on 14 March 1990, India was to import 2.5 million tons of oil for 1990-91, 30 per cent of it to be adjusted against outstandingdues.3 India's problems could not be underestimated.Still, New Delhi's initial ambivalence hurt it internationally. This was the second time that Iraq had let down the entire developing community and thenon-aligned governments by its unilateral military action. The Iraqi push earlier into Iran had paralysed the non-aligned movement as it became one ofthe longest wars in history. This paralysis became virtually complete with Iraq's invasion of Kuwait in August 1990. India took some time, for reasonsdiscussed above but it did criticize the attack and declared its abidance by the sanctions imposed on Iraq by the United Nations. The Prime Minister atthe time, V.P. Singh, told a meeting of his parliamentary party that India had demanded the withdrawal of Iraqi forces from Kuwait and pledged to standby the UN commitment on trade sanctions against Iraq. The delayed Indian reaction, he explained, was due to the complex nature of the issue, requiringcareful consideration. The situation had to be tackled carefully, he added.4 Undoubtedly, however, this initial hesitation had greatly pained Kuwaiti opinion.In the absence of any real leverage with Iraq and unable to take, along with the Non-Aligned Movement, a peace initiative that would be acceptable to bothIraq and Kuwait with the USA now determined to teach Saddam a lesson (which would, incidentally, also establish U.S. supremacy), Indian efforts becamedirected towards the evacuation of Indians stranded in Kuwait and Iraq, of which a commendable job was done under the stewardship of the then ExternalAffairs Minister, I.K. Gujral.However, by the end of the year the National Front government had bowed out and a new government headed by S. Chandrashekhar, a small-minority governmentsupported by the Indian National Congress, had assumed office. It immediately committed a gaffe, so far as the Gulf conflict was concerned, by allowing,without prior consultations with other parties including the Congress, American C-141 transport planes headed towards the Gulf to refuel at Bombay's Saharinternational airport (beginning 9 January 1991). It became known that the refuelling was allowed at Madras also. As the news leaked out, there was an270uproar and the Congress, as well as many other parties strongly protested against the government's action, resulting in the withdrawal of the permission.5India also had to repair its relations with Kuwait, which were neither insignificant nor unimportant. India had nearly a hundred thousand (including families)Indian residents in Kuwait. One estimate was that of the Rs 28,000 crore of NRIs deposits in Indian banks, some Rs 6000 crore were held by the NRIs inKuwait, although they constituted only one-tenth of the NRIs in the Gulf states. Trade with Kuwait had been stagnating at Rs 200-250 million, heavily infavour of the Gulf state. Kuwait's biggest stores, restaurants and schools were run by Indians.6 Most importantly, it was widely believed here that Indiamust rush to join in the queue for the plums of billions of dollars worth post-war reconstruction projects in Kuwait. It was unclear, if not doubtful,however, how much of the so-called windfall would come India's way facing as it did U.S. and European competition. USA was the protector country and, therefore,had the first charge on any economic largesse coming from and in Kuwait.India had a few advantages that could be put to good use to improve ties with Kuwait. It was a leading country in the non-aligned community and could notbe simply ignored. It also had a large pool of skilled (and non-skilled) manpower and a level of technological development that often suited the needsof developing countries more than the high technology from very advanced countries. Soon after the restoration of its sovereignty, the Emir of Kuwait senta special envoy, Dr Abdul Rehman Abdulla al-Awadi, to begin anew the dialogue between the two countries. After meeting the Prime Minister (Chandrashekhar)and other government officials, he told a press conference that he had come to seek India's support in the Security Council (of which India was a non-permanentmember at the time) for a definite settlement before a final cease-fire, as well as a firm Iraq-Kuwait boundary. The question of reparations also neededto be addressed. Differences of views, he said, had been cleared and then the fact that he was in New Delhi within forty days of the end of the war showedthat "all was clear".He mentioned that India had offered to send food and medicines to Kuwait but they were unable to make use of the offer currently because all modes of accesshad been destroyed or disrupted by the Iraqis who had mined ports, water channels and most of the territory during the occupation. The airport could beused only for short periods during the day because of darkness caused by oil-well fires.7However, things were not so simple. As the Kuwaiti Deputy Prime Minister and Foreign Minister, Sheikh Salem al-Sabah told a group of Indian journalist,visiting Kuwait, India had acted "hurriedly" in closing down its embassy soon after the Iraqi occupation. "India did not support Kuwait. We had expectedyou to support us", he said. Pakistan's position was very clear, he added, and "we are grateful to it that it supported us."8271Yet it was only a question of time before the relations would be back to normal. The Government in India had changed hands again and a new government headedby P.V. Narasimha Rao had taken over in June 1991. The new Minister of External Affairs, Madhavsinh Solanki, visited Kuwait in August in a bid to bringback the old warmth into the relations. The Minister assured the Kuwaitis that India supported all the UN resolutions on Iraq. The Minister claimed thatthe two countries were on the way to exploring ways to promote bilateral cooperation, especially in the economic field. An agreement was signed to setup a joint commission for this purpose and Kuwait would send a team of experts for a discussion on the specifics of the two-way trade. There were alreadyabout 70,000 Indians in Kuwait, many of them, of course, without families now, belonging to various professions—engineers, doctors, nurses, school teachersand college professors.9 There was also currently a business delegation in Kuwait exploring the possibilities of economic cooperation.The Kuwaiti Communications Minister came to India in February next year and signed a protocol for cooperation in the communications sector. Kuwait, he said,was ready to make liberal investment in India in the communication sector. He lauded the work of the Telecommunications Consultants India Limited (TCIL)which had been awarded a Rs 20 million contract for setting up electronic exchanges and providing equipment in Kuwait. With the help of the TCIL, 95 percent of the communication system, badly damaged by the Iraqi forces, had been restored. Kuwait, he said, would send out technicians and experts for furthertraining in India as well as representatives of business and industry.10The demolition of the Babri Masjid in Ayodhya in December 1992 had a deleterious impact on India-Kuwait relations as it had on relations with other Gulfand West Asian countries. The Deputy Prime Minister of Kuwait during a visit to India in February 1993 expressed the hope that Prime Minister NarasimhaRao would stick to his promise of rebuilding the mosque. He also wanted India to introduce complete liberalization of the economy and not to take "twostep forward and one steps backwards."11 He was assured by the government that India wanted "strict observance of mandatory UN resolutions and the territorialintegrity of Kuwait."As an influential Pakistan paper noted, Sheikh Sabah, the Deputy Prime Minister, had expressed the same feelings and repeated the same statements in Indiaas he used in Pakistan a few days earlier. He expressed Kuwait's gratitude for the "principled support" extended by India during the Gulf conflict andsought India's continued support in the implementation of the relevant UN resolutions.Kuwait also adopted a standpoint on the Kashmir issue that was not inimical to India. Leaving aside the resolutions of the Organization of Islamic Conference(which nobody, not even the Islamic states themselves, took seriously), Kuwait's official position was that it should be resolved bilaterally through peaceful272means under the Simla Agreement and keeping in view the UN resolutions on the issue.12From India's point of view an important problem was the losses suffered by Indians in Kuwait as a consequence of the Gulf war. Kuwait recognized the problemsand wanted the compensation to Indians to be met by Iraq through sale of Iraqi oil as in the case of compensation for Kuwait's losses. India had forwardednearly 141,000 compensation claims from individuals and companies to the UN Compensation Commission amounting to over $3.2 billion. A high-level 11-memberdelegation from Kuwait came to India in January 1994 and reached an accord in New Delhi on the coordination of efforts to ensure "just compensation" forthe victims of the Gulf war on the basis of the UN resolutions which called upon Iraq to provide the necessary funds through sale of oil. Kuwait estimatedthe damage that it suffered at about $170 billion.13GULF AND SECURITY ORDERThere was talk without end, as we have seen in an earlier chapter, about a new world order, with a central new security order, but the promise of any suchworld order was killed by unilateralism, ambition and concentration of and on military power and solutions.14 The Gulf war had two consequences: SaddamHussein was defeated, and U.S. military supremacy was established, but not much more. Even the objective of an overturning in Iraq was not achieved. SaddamHussein continue to be at the helm in Iraq, despite the military seback and the shattering of the economy and the suffering of the people. The rigoroussanctions imposed on Iraq did everything to increase the misery of the people but nothing to shake Saddam Hussein's grip on the country. There was littlejustification for imposing such suffering on a whole generation, particularly the children.Initially the United States encouraged multilateral efforts at establishing a new security order or rather a peace process in the Middle East involvinga number of countries. For a while India was denied participation in the peace process because it did not have full diplomatic relations with Israel. ButIndia's entire policy towards West Asia was now under intense review. For a variety of reasons India had lent full support to Arab causes, sometimes atconsiderable cost, for the past three decades.15 Now the ground realities had been radically altered. The peace talks between the PLO and the Israeliswere one of the major transforming elements. There were other grounds also for a significant shift in India's stance. The element of reciprocity in Indo-Arabrelations was fast fading. While India supported the Arabs in their struggle, the Organization of Islamic Conference was passing harsh and inimical resolutionson the Kashmir issue. Even though the resolutions were meaningless as the OIC, as everybody knew,273was a paper tiger, it still rankled in the Indian hearts and minds that the Arab states were a party to these resolutions.So, even while continuing to sympathize with the struggle of the Palestinians for a homeland, India began moderating its unilateral support to other Arabcountries. Links with Israel were normalized, leading to the establishment of full diplomatic relations.*Yasser Arafat strongly pleaded for India's participation in the peace negotiations and declared that it was necessary that India be there in the process.16The Israelis were not against it provided relations between New Delhi and Tel Aviv were normalized. In the wake of the normalization, the U.S. announcedon 8 May that India had been invited to participate in the third phase of the peace process beginning shortly in Washington.17 The first phase began withan international conference in October in Madrid. The second phase was marked by bilateral talks between Israel and its Arab neighbours in Moscow. TheMoscow session decided to set up five working groups to deal with refugees, economic development, water resources, arms control, and environment. Indiawas invited to attend the arms control group. Other participants included thirteen Arab states, Canada, China, Japan, Turkey and Ukraine.It is another matter that all these essays in international diplomacy did not come to very much and finally the world was back to a virtual unilateral Americandiplomacy in the peace process. Washington succeeded in bringing about some accords between Yasser Arafat and the Israelis, but this ongoing peace processwas confronted with a host of landmines which continued to dim the prospects for full peace in the region. But it is hardly within the scope of this volumeto describe and analyse the developments or the problems.INDIA AND ISRAELTo correct a widely held misbelief, India had recognized Israel soon after its founding in 1948. But India refrained from establishing full diplomatic relationswith it. An Israeli consulate functioned from Bombay, in a somewhat sub-rosa fashion. It must also be recalled that India was in favour of an integratedstate comprising both Jews and Palestinian Arabs. India's misgivings were not misplaced as the creation of a purely Jewish state resulted in the displacementof hundreds of thousands of Palestinian Arabs.India had other difficulties too, subsequently. It is often overlooked that in its own interests India could not accept enlargement or annexation of territorythrough the use of force. This was the principle that India was trying to uphold against China in its border conflict with Beijing. There could not beone principle for China and another one for Israel. Besides, there were some twelve Arab states, with many of whom India had had long-standing historical,cultural and* These are discussed in the following section.274economic ties as well as strong contemporary political and economic interests. Most of them were members of the non-aligned community of nations.Nevertheless India had unnecessarily delayed the upgrading of its ties with Tel Aviv. It should have come at least a year earlier than it did—in January1992. The Arab sensitivities could no longer be said to be relevant - after all China did recognize Israel much before India did. The only person in theArab world who need have mattered for India on this issue, because he remained close to India, was Yasser Arafat and he was preparing the ground for hisown dialogue with Israel.In any case, the two sides started developing contacts even before the formal upgrading. From India's side, the change was obvious, with India voting inthe United Nations in favour of rescinding an earlier resolution that had equated Zionism with racism.18 Israel, for its part, was briefing India aboutthe peace negotiations and its Director-General of the Foreign Office told the media in Washington, where he had met Indian diplomats: "I think India isan important country which is getting only one side of the picture because of its having diplomatic relations with only one side."19 But Israel was insistingon full diplomatic relations before India could participate in the peace negotiations.Not only USA, but Israel was putting very considerable pressure on India for full normalization. Israeli Deputy Prime Minister and Foreign Minister DavidLevy said in Beijing that full-fledged diplomatic relations between India and Israel were not a matter of favour. It was a privilege for Israel but alsoa privilege for India. India must not discriminate against Israel because that was something that was against itself—as if it were putting shackles onits own hands.20Clearly India wished to coordinate with the PLO chief, who was in New Delhi on 20 January for a brief visit, before announcing a formal dicision. This muchwas obvious from Yasser Arafat's remarks to the press persons, "Exchange of ambassadors and recognition are acts of sovereignty, in which I cannot interfere."Relations with India were so strong, he said, that "they cannot be affected by other things."21India announced establishment of full diplomatic relations soon afterwards, on 29 January 1992.22 Prime Minister Narasimha Rao assured Isi Ubber, cochairmanof the World Jewish Congress, then in India to deliver a personal message of thanks from the Israeli Prime Minister, Yitzhak Shamir, that India would playa constructive, "even-handed" role in the West Asia peace process.23 The keenness of India was not unmatched from the Israeli side. Then Foreign MinisterShimon Peres said in New York, when he met the Indian Minister of State for External Affairs, Eduardo Faleiro: "For us India is not just a country buta culture in which many of our children were educated from Tagore to Gandhi." Israel had been waiting for the moment, he added, to meet India diplomatically,economically and otherwise and would cooperate as friends at all possible levels.24275Ties developed rapidly in the ensuing years. There was a great deal of coming and going between the two, more perhaps from the Indian side than the Israeli.Ministers and bureaucrats apart, delegations of scientists, agriculturists and businessmen trooped to Israel. The largest single item of trade with Israelwas diamonds. Extensive cooperation was developing in the agricultural field, in irrigation technology and water management in which Israel had very considerableexpertise, and collaboration was developing in the areas of educational technology, arid zone research and solar energy.25 It may also be noted that therewere 60,000 Indian Jews in Israel, many of whom had contacts with their kinsmen in Bombay.Shimon Peres came in May 1993 along with a high-powered Israeli business delegation, preceded by a mission of the Israeli Export Institute and a delegationof the manufacturers association of Israel. Peres believed that India and Israel could set up joint ventures in the areas of irrigation, aviation, software,electronics, tourism, textiles and food processing. He strongly pitched for cooperation at the level of universities to give a thrust to research and development,particularly because Israel had a strong scientific research base.26India and Israel signed in December 1993 a memorandum of understanding providing an institutional framework for extended technological cooperation. TheIsraeli Agriculture Minister, who was in Delhi to sign the agreement, stated the Israeli view that while the governments of both countries provided a "conducivepolitical, infrastructural support", the private sector of both countries would have to play a more committed and important role in availing of the opportunities.The joint ventures planned between the two countries placed particular emphasis on agricultural development. Israel had developed agriculture as an industryand had converted deserts into fertile land. It was one area where India could benefit very considerably through cooperation with Israel. India offereda huge market with a democratic system.27A notable visit was that of Presid .it Ezer Weizman of Israel who won many hearts with his nostalgic reminiscences about his earlier stay in Bangalore asa trainee pilot some fifty years ago during the second world war. Visiting India towards the end of December 1996, he told then Prime Minister H.D. DeveGowda that defence could be one field where "India will be a happy hunting ground for us". He offered to "bring over" computer software scientists fromIndia to Israel to fill the manpower shortage. Four agreements between India and Israel were signed during his visit: one on technical cooperation; anumbrella agreement on industrial and technological research for economic and commercial purposes; a memorandum of intent on a high-tech demonstration farm;and renewal of the agreement on educational and cultural cooperation.28Most of these efforts were still in the nature of probing and good intentions except the agricultural area where there was an impressive expansion of contacts.It required considerable time for such relationship, particularly the economic ties,276to mature. But contacts have been multiplying and undoubtedly are set to develop meaningfully. India's defence ties with Israel have also been expandingrapidly. It needs, however, some reminder that many Indians had a highly exaggerated notion of Israel's military and economic power and a wholly inadequateunderstanding of its heavy dependence on the United States in both areas. The development of relations with Tel Aviv was beneficial to both, but the criticalchallenges to India's foreign policy could not be met just through the ties with Israel.EGYPT: THE CENTRAL COUNTRYIts civilization among the oldest in the world, Egypt, justifiably proud of its place, .has been historically the central Arab country. It still was amongthe most important, even though it suffered from many wounds, some of them self-inflicted.It was with Egypt that India developed the closest political relationship in West Asia during the fifties and early sixties. Along with Yugoslavia, Indiaand Egypt became the core group in the Non-Aligned Movement, providing it with the necessary impetus and guidance. The close links were continued duringIndira Gandhi's time.29 As an earnest of their pleas for South-South cooperation they had agreed to grant one another preferential treatment in certaincommodities, although the experiment languished through lack of continued political inputs and determination.Gradually the relationship got atrophied as the two countries drifted apart under the compulsion of their own circumstances and developments around them.Anwar Sadat made peace with Israel and broke ranks with other Arab countries. He shifted his political and economic horizon towards the West, chiefly theUnited States. Egypt's commitment to the Non-Aligned Movement waned. Even so, India resisted a determined bid by some Arab countries to expel Cairo fromthe movement and helped save it from such humiliation.The assassination of Sadat and the succession of Hosni Mubarak as President brought about some modification in Egyptian policies. While the Israeli connectionremained intact and relations with the United States retained primacy of place, more political space was provided for functioning in the "third world"and ties with many Arab countries, more significantly with the PLO and Yasser Arafat, were repaired. Arafat was looking for his own opening towards Israeland he knew that this would require U.S. help. Hosni Mubarak's good offices would be an important assisting factor in this process.In any case, the momentum of Indo-Egyptian special ties had been lost and by the end of the eighties both the political and economic contacts had becomegreatly limited. The Gulf war did nothing to build the bridges between the two. Egypt was firmly in the camp led by the United States, contributing troopsfor277repelling the Iraqi invasion of Kuwait. It was preoccupied with the regional problems and its perceptions on the world and on the Non-Aligned Movement werediverging from those of India, even though there were still many areas in which their interests and outlook were similar.Egypt had veered around to the view that NAM in its original conception had lost its relevance and should be merged with the Group of 77, becoming a purelyeconomic grouping to look after the trade, commercial and economic interests of developing countries of the South.30 Egypt was actively engaged in mobilizingsupport for its proposed merger of the Non-Aligned Movement into the activities of G-77.India was strongly opposed to the idea as it firmly believed in the continued relevance of NAM. There were areas like disarmament, world peace, the interestsof the developing countries in the new global economic competition, a new political world order, extremism and terrorism, and the like, in which the movementhad to involve itself intensely and provide a corrective focus to balance the interests of the big powers and the developed countries. There was certainlyneed for fine-tuning and shifting the emphasis in line with the changed world situation, but the baby should not be thrown out along with the bath water.Nor could G-77 suitably replace the NAM and adequately represent the non-aligned community on various world issues.The two differed on the issue of Kashmir too. Egypt was a party to the strong and one-sided resolutions passed by the OIC under Pakistani pressure, althoughhow much conviction Cairo had about their feasibility was not quite certain. Generally Cairo had projected a secular outlook and its regime was a targetof the extremist and fanatical forces in West Asia, some indigenous and some finding their impulse from outside. Cairo suspected Tehran particularly inthis regard. In any case Cairo faced the threat of terrorism, financed and ideologically motivated from outside. This was a common threat to both Egyptand India and New Delhi expected more understanding from Cairo on the problems it faced in regard to Pakistan-sponsored terrorism.The Egyptian view had travelled a great deal away from the days of Nasser who once said that the Suez was as dear to Egypt as Kashmir was to India. TheEgyptian view now came to be based more on a recourse to an approach based on religion, as of the OIC, than its previous secularist stance. The Egyptiangovernment officials and many intellectuals justified the Egyptian standpoint on the plea that the United Nations had passed certain resolutions (in 1947and 1948) on Kashmir that formed the basis for Cairo's policy. Some intellectuals found a contradiction between India's standpoint on the emergence ofBangladesh, where New Delhi endorsed self-determination, and its policy on Kashmir where it did not.31Egyptian and Indian dialogues at high levels had virtually ceased. What was needed was a genuine initiative to restore their links and revive the dialogue.278The first such effort during this period was a visit by the then Minister for External Affairs, Madhavsinh Solanki, to Cairo in January 1992. This was anopportunity for both sides to put some life back into the relationship, at least to clear the cobwebs. Solanki's talks with his counterpart, Amre Moussa,and his meeting with President Hosni Mubarak, did precisely that. The differences were not removed, but a fresh start was made on various fronts.Reportedly, Solanki and his officials gave the Egyptians, specific evidence— maps, location of training camps, names of individuals trained in sabotage—ofPakistan's complicity in acts of terrorism in India, and expressed disappointment at the West's and Arabs' inability to ask Pakistan to desist from state-sponsoredterrorism. The Egyptians were believed to have responded that they hoped that with constant contact and frequent meetings, India and Pakistan would "reacha point of departure for solving all the issues". The Indians believed that this was nearer the Indian position and that New Delhi could live with thisstance. President Mubarak in his conversation with the Indian Foreign Minister was reported to have stated that he regarded the assistance to armed separatistelements in any country as "terrorism" and had advised against any country encouraging such methods.32The two countries decided to cooperate closely on security. If there was one area in which they completely saw eye-to-eye, it was on the question of "fundamentalism"and terrorism. Both countries were unalterably opposed to religious fanaticism and terrorism.33The demolition of the Babri Masjid in December 1992 was another unhelpful event which created very considerable uneasiness and confusion in the Arab countries.It appeared to them that India's secularism was under siege and could be swamped by Hindu fundamentalist forces. This one incident created more misunderstandingsthan all the developments in Kashmir could. So far as Egypt was concerned, it was also under very considerable pressure from the extremist Muslim organizations.The appeal to and of religion had spread among many sections, thus making the Egyptian position with regard to the communal problem in India and issueslike Kashmir more negative from India's point of view.However, there were certain countervailing factors at work. Hosni Mubarak was getting increasingly impatient with the situation in which Pakistan was becominga haven for Arab fundamentalists, whom Cairo described as mercenaries working for the overthrow of the Egyptian government. Some of these mercenaries weresent to Kashmir and a few, under Cairo's pressure, back to Cairo to face the law. So while the Islamic card was instrumental in getting greater sympathyfor Pakistan's cause in Kashmir, the threat of fundamentalism kept Cairo from espousing any extremist line. Nevertheless, Cairo's slight tilt towards Pakistanwas a matter of concern to New Delhi.279It was against this background that Prime Minister Narasimha Rao visited Cairo on his way to Cartagena in Colombia to attend the NAM summit. This was thefirst visit of an Indian Prime Minister after a lapse of some ten years. It was also the first high-level contact since Solanki's January 1992 visit. NarasimhaRao was believed to have discussed with President Hosni Mubarak and the Prime Minister Alif Mohammad Sedki, besides bilateral issues and the forthcomingNAM-summit, the issue of Pakistani support to Kashmir militants and Pakistan's misuse of the OIC forum for its own purposes.34How much satisfaction Rao received from his hosts on the Pakistani connection was not very clear but significantly, in the first such accord with an Arabcountry, India and Egypt signed an agreement to combat terrorism and to exchange information, experiences and techniques to check the menace of terrorism.Another agreement related to the upgrading of previous agreements on scientific and technological cooperation. The third accord provided for cooperationin the sphere of telecommunications.35 Rao and Mubarak also decided to review the Indo-Egyptian joint commission which had remained dormant since 1988.While the old Indo-Egyptian special relationship could not be revived, the relations no longer remained distantly cool.ECONOMICIn the heyday of the relationship, Indo-Egyptian trade was conducted under the Rupee Trade Agreement of 1953. A tripartite agreement signed in 1967 betweenIndia, Yugoslavia and Egypt gave 50 per cent tariff concession for some 129 commodities as an example of the development of South-South relations. Butthe political will was soon lost and the agreement became virtually meaningless. It was allowed to lapse in 1993.Indo-Egyptian economic relations have remained largely marginal. According to an Egyptian scholar there were 23 projects in Egypt with Indian investment,12 in chemicals, 5 in engineering, 1 in metallurgy, 1 in textiles, 1 in finance and 3 in tourism and hotel industry. The majority were "small-sized concernswith meagre capital with a strong preference for full or majority holdings".36Trade between India and Egypt occupied a small portion in the total trade volume of the two countries, with India enjoying generally a favourable tradebalance. Indian exports rose from some Rs 200 crore in 1991-92 to Rs 541 crore in 1995-96, while imports went up from around Rs 164 crore in 1991-92 toa little over Rs 242 crore in 1995-96,37 a mere 0.41 per cent of India's foreign trade and 1.24 per cent of Egypt's trade. India's exports to Egypt includedtea, iron, steel and aluminium, chemicals, vehicle parts and accessories, diesel engines, tobacco, synthetic yarn, rubber tyres and tubes, whereas Egyptianexports comprised preeminently crude oil, raw cotton, fertilizers, metal ores and metal scrap.38280SAUDI ARABIA: DIFFICULT RELATIONSHIPRelations with Saudi Arabia were a typical case of economic compulsions pointing towards one direction and political realities another. The relationshipwas complex and ambiguous. Riyadh was among the largest producers of oil in the world, with also perhaps the largest known reserves, enabling it to expandproduction when and if it so desired. A third of India's oil imports came from Saudi Arabia. Equally importantly, there were nearly 600,000 Indians workingin Saudi Arabia in the maintenance and service sectors. Their remittances to India contributed to meeting the foreign exchange gap. There was considerablepotential for India's participation in Saudi Arabia's economic programmes.The political environment was not always equally benign. Saudi Arabia was among the most orthodox Islamic countries and made no mean contribution to thespread of "fundamentalism" (not terrorism). It spent liberally around the world for the spread of Islam and the construction of mosques which often becamebeehives of fundamentalist movements in various countries with a majority or sizeable Muslim populations. The headquarters of the OIC were located in Jeddahand Saudi Arabia was a moving spirit behind the Islamic countries' organization.India's broad policy was to put a friendly foot forward and endeavoured to maintain and cultivate friendlier ties with Riyadh. It may be recalled that inApril 1981 Indira Gandhi in pursuit of better relations went to Saudi Arabia, which generally neither received nor welcomed too many women heads of government,and made considerable effort to upgrade relations with Riyadh. A joint commission was established under an economic and technical agreement signed duringher visit.The trouble with such efforts was that they quickly lost steam. The follow-up on both sides was meagre. The joint commission met twice—in Riyadh in 1983and in Delhi in 1986.The thread was sought to be picked up when the third session took place in November 1991.39 Meeting between 13-15 November, the Saudi Minister for Industryand Electricity presented a list of nearly fifty projects, including engineering, plastic, food processing and steel plants, being undertaken in Riyadh'sfive-year plan in which it would welcome India's participation. For its part India put forward a list of twelve projects that India would have liked toset up in Saudi Arabia that included hospitals and petrochemicals and suggested Riyadh setting apart Rs 260 crore for these projects.40 The thirty-eight-memberSaudi delegation had seventeen leading businessmen to meet their counterparts in India and, making use of India's new economic policies, develop privatesector cooperation. The two countries needed to give attention to their trade relations, as the balance was heavily in favour of Riyadh (mainly becauseof oil imports), with Indian exports valued at Rs 418 crore and imports at Rs 2,897 crore in 1990-91.281Some three years elapsed before the next meeting of the joint commission. Meanwhile eighteen small and medium joint ventures had been established in SaudiArabia (mainly in railways, hotels, foodstuffs, and electrical services). The joint Commission's meeting (3-4 December 1994) was described by the IndianFinance Minister as "very fruitful and a major step forward". India invited Saudi investments in oil refining and fertilizer sectors and agreed to studypossibilities of manufacturing drugs, pharmaceuticals and machinery spare parts in joint ventures with Riyadh. They agreed on a protocol for cooperationin the field of science and technology with specific reference to computer hardware, software and remote sensing capabilities.41Trade ties had expanded, but not as much as they could have, India's exports in 1993-94 amounted to around Rs 1,600 crore, consisting chiefly of rice, oilmeal, chemicals and fertilizers, while imports were as high as Rs 4,865 crore, revolving round crude oil, petrochemicals, phosphate and sulphur, leavinga billion-dollar deficit. Riyadh suggested a project for machinery spare parts of which the Kingdom's import bill was about $2 billion a year and couldprovide a substantial market for India.Much remains in the arena of proposals and proposed projects. The potential was yet to be realized and there was neither adequate back-up nor follow-up.Under the circumstances, in which politics keep churning and interacting with economic needs, New Delhi's meeting of the minds with Riyadh remained a difficultexercise.OTHER GULF COUNTRIESWith the other Gulf countries like the United Arab Emirates (UAE), Oman, Qatar and Bahrain, India had built, or was in the process of building up, substantialeconomic ties.Some of these were host to significant numbers of the Indian community, contributing not only to the hosts' economic development but also to the foreignexchange kitty of their home country. The UAE for instance, was home to some 400,000 Indians (including families). The UAE followed a soft pro-Pakistanline on Kashmir but did not allow it to deteriorate to an anti-Indian stance. The UAE was not only a member of the Arab League and the OIC, but also ofthe Non-Aligned Movement. It did not permit the stationing of foreign troops on its soil despite the perceived threat to its security in the wake of theGulf war.Relations were boosted when Indira Gandhi visited Abu Dhabi in 1981,42 but as usual the momentum was not maintained. A joint commission had been set upearlier in January 1975 and had had five sessions, but a sustained thrust was lacking. There were necessarily problems relating to the treatment of Indiansworking in the UAE and of cases where each believed they were fugitives from its own justice. Some Indians ran away from UAE laws with greater confidence282in the Indian judicial system. There was also the celebrated case of Dawood Ibrahim wanted in India as the prime suspect in the Bombay blasts case and atone time believed to be hiding in Dubai, with India unable to secure his extradition in time not only because of the absence of a treaty but also becauseof bureaucratic bungling.43Although the Indian and the UAE standpoints on the Gulf conflict were not fully convergent, the UAE made it clear that it would like to look towards thefuture, and not the past.44 It was in that spirit that the UAE President Shaikh Zayed bin Sultan al Nahayan visited India towards the end of April 1992.Although there was no structured agenda, the talks with the Indian leaders focused on various bilateral political and economic issues.Trade and economic relations picked up, although not to the extent the promise was. The two-way trade had picked up by 17 per cent by the end of 1993 inthe past three years. Indian exports had shot up to U.S. $1 billion in 1993. The UAE had already climbed to the fifth position in the approvals for foreigndirect investments in India in 1993. Abu Dhabi was showing increasing interest in the new economic environment in India and the opportunities for investment.The Indian Oil Corporation and the UAE International Petroleum Investment Corporation were negotiating UAE investment in an oil refinery in India. Feasibilitystudies were also discussed on the supply of bauxite to an aluminium project in UAE.All this was the subject matter of discussions at a three-day meeting of the Indo-UAE joint commission in January 1994. The commission identified new areasof cooperation in the fields of electricity, water resources and agriculture. The two countries also signed an agreement to check drug trafficking as wellas a cultural agreement for 1994-96.45 India's exports had gone up to Rs 4,766 crore by 1995-96 and imports to about Rs 5,408 crore.Overall, there had been substantial progress in the growth of Indo-UAE ties, but the push that the private sector could provide to the economic relationshiphas yet to reach a critical level that would qualitatively strengthen the political relationship. Efforts were being stepped up in this direction: FIEOsent a business delegation and set up a warehouse at Jebel Ali Free Trade zone of Dubai to facilitate trade with the UAE and the region around. Additionally,India had nine joint ventures in operation with the UAE and thirty-three under implementation, indicating the earnestness of the efforts with the UAE.There was a much larger economic dimension to India's relations with the Gulf countries than a political one, which was developing significant economicties with Oman, and to a smaller extent with Qatar and Bahrain. The Sultanate of Oman was seeking Indian expertise and technical skills for setting uplight and medium industries. India was among the largest suppliers of technical expertise and manpower to Oman. The 1991 volume of trade totalled OmaniRials (RO) 38.21 million, of which Omani imports from India accounted for RO 33.24 million283and non-oil exports for RO 4.97 million. Oman took chiefly cotton goods, electric motors and generators, milled rice, beef products, textiles, tea and cottonseeds from India, sending in return, apart from oil, copper (a major export item), dates and consumer goods.46A high point during this period was Prime Minister Narasimha Rao's three-day visit in June 1993, providing the political impetus for the development oftheir economic ties. The Prime Minister's spokesman claimed that Oman was very much on the same wavelength on secularism and on cooperation between thetwo countries. It was significant that neither Ayodhya nor Kashmir figured in the talks.47 The two countries agreed to accord each other the most favourednation (MFN) treatment, set up a joint commission and enhance cooperation in oil, gas, fertilizer and hydrocarbon spheres with the active participationof the private sector.An umbrella agreement on hydro carbons, a memorandum of understanding on setting up a gas-based fertilizer joint venture project in Oman and a pact on strengtheningeconomic, trade, commercial and technical cooperation were signed during Rao's visit. As a gesture of goodwill, India decided to gift to Oman a four-kilowattsolar power project worth Rs 25 lakh. Oman sought Indian assistance in providing remote sensors of water reservoirs through satellite, besides expertisein the fisheries sector. Prime Minister Rao believed that his visit had brightened the prospects of Omani investments in the oil, gas, fertilizer and otherindustrial sectors and that the two countries had identified a number of joint venture projects for mutual benefit.48A year later a detailed memorandum of understanding (MoU) was signed in Muscat on setting up a $900 million joint venture world-scale fertilizer projectin the Sultanate. The project's entire production of 1.4 million tonnes per annum of urea would be made available to India under a buy-back agreement.The plant was expected to consume annually 49 billion cubic feet of gas from Oman's vast reserves of gas.49 A joint business committee between FICCI, ASSOCHAMand the Oman Chamber of Commerce was also formed to boost economic relations. Trade had expanded but again not to its real potential. The trade volumebetween the two countries stood at nearly $100 million in 1993-94, but declined somewhat in 1994-95 to $71.42 million.50The most exciting and the most ambitious project mooted between the two countries was the laying of a $5 billion deep-sea pipeline for the supply of naturalgas to India. However, the project soon became troubled by various "technological, environmental and financial problems and its fate appeared to be sealed.However, Oman assured India that it was ready to supply alternative fuel, liquefied natural gas (LNG) to downstream units in India if the pipeline projectdid not take off.51 It may be pertinent to mention here that the Indian Government itself identified seven thrust countries in the region (Egypt, Iran,Israel, Kuwait, Oman, Saudi Arabia and UAE) for promotion of economic284relations, as these seven countries together constituted as much as 90 per cent of India's exports to the West Asian and North African region in 1995-96.INDIA AND IRANAccording to a well-known Iranian linguist, the origins of the people of India and Iran can be traced to the Aryans who migrated from Central Asia and thePamirs to Iran and India. They have had centuries of interaction which brought their cultures, faiths, languages and literature into close association.Of all the Gulf countries, historically India has had the closest association with Iran. The Farsi (Persian)-speaking, Shia-dominated country has had anintimate contact with India. However to maintain their links and give them new meaning in the new world with all its changed political and economic configurationsis the main challenge in their mutual relations.BACKGROUNDBoth countries have gone through many significant, even critical changes. India emerged as an independent country on the world scene in 1947 and for a numberof years was an influential factor in the world community. Its influence declined somewhat in recent years, but it gives promise of becoming a significanteconomic and political player again in the international community, if the present momentum of economic growth could be kept up. Iran too has seen traumaticchanges. It witnessed one of the few genuine people's revolutions in 1980. The Shah of Iran had introduced many modernizing elements but a great many Iranianssaw him as a Western client ruler. It was not the religious proselytizing passion of Ayatollah Khomeini that brought the people in their hundreds of thousandsto the streets but his appeal to Iranian nationalism.But Iranian nationalism became submerged in the religious fervour of the Ayatollah. It came into a serious clash with American nationalism and there hasbeen trouble ever since. Each regards the other as a satanic force. The U.S. is convinced that Iran is training terrorists and financing terrorism in theArab countries and elsewhere, hell-bent upon destroying Western influence wherever it possibly could, more certainly in the oil-producing world aroundit, and has denounced it as a rogue state. Iran was equally convinced that the chief U.S. objective was to wreck the new regime in Tehran and supplantit with a stooge government.India had developed substantial economic links with the Shah's Iran but the revolutionary change of regime required a rebuilding of relations, some of whichhave been discussed in my earlier volume.52 The religious dimension of Tehran's political preoccupations created some problems for India partially withregard to the Kashmir issue, with Iran as an active member of the OIC committing it to285resolutions that India could hardly be pleased with. The problem has affected their relations every now and then—at least twice in the past six years.Soon after the Janata Dal government took over in January 1990, the External Affairs Minister planned to go to Tehran, in his capacity as co-chairman ofthe Indo-Iranian joint commission, in his first trip abroad after assuming office, indicating the priority accorded to relations with that country. Earlierthere had been outbursts from Tehran against the Government of India (then with the Congress in power) regarding the killing or blinding of Muslims inBhagalpur. The spiritual successor of Ayatollah Khomeini, Ali Khamenei blamed the Indian Government for remaining silent and watching the carnage in Bhagalpur.The Iranian Majlis Speaker, Mehdi Karrubim, called for the formation of Hizbollah cells to defend Muslims everywhere.53 The External Affairs Minister'svisit could have helped in clearing the air to some extent and promoting bilateral ties, but the visit had to be cancelled at the last minute at the instanceof the Iranian authorities, apparently because Tehran had to demonstrate its interest in the well-being of Muslims in India.Relations remained somewhat forzen until the next External Affairs Minister, Madhavsinh Solanki visited Tehran in November 1991. There were many other criticalfactors that necessarily influenced Iran's foreign policy and necessitated a warmer response from Tehran in its relations with India. Its own relationswith its Muslim neighbours could hardly be described as cordial, not only with Iraq, but with the other Gulf countries as well. The Gulf war had removedsome warts but there was very little trust in their relationship with Iran. They all suspected Iran of fomenting or encouraging subversive elements intheir countries. It might be recalled that there were substantial Shia populations in many of these countries. There was also the undercurrent of rivalrywith Saudi Arabia for influence among the Muslims abroad.Much more serious were the problems with the United States and these problems were escalating. Iran was being boxed in. It could do with more friends tocounteract U.S.-sponsored isolation. The religious fervour had to be tempered with more hard-headed practical considerations. The economic potential ofthe relationship with India was not inconsequential.Gradually a greater amount of warmth came to be infused into the Indo-Iranian ties. The process was set off with Solanki's visit. Apparently Solanki's meetingwith President Rafsanjani went off quite well. He was reported to have told the visiting Indian minister that Iran considered the Kashmir issue an "internalmatter" of India and was against any internationalization of the issue. Iran had no wish, the Iranian President said, to interfere in the internal affairsof India. Iran desired close ties with India at all levels.54286IRAN AND KASHMIRHowever matters were not all that simple. Iranian foreign policy was a complex product of the pride in Iranian civilization, the desire to play a leadingrole in the Islamic movement and the need to develop political friendships and economic relations with many foreign countries, particularly faced as itincreasingly was with U.S. hostility. An important component of Iran's foreign policy has certainly been the Islamic ideological content. The clericalleadership of Iran believed that it was its mission to preserve and spread the pure Islamic thought, as understood by it, and that Iran was the true leaderof Islam in the world. It was its bounden sacred duty to assist in the protection of the rights of Muslims everywhere. It also necessarily wanted solidaritywith other Muslim countries—up to a point of course. This did not avert violent conflicts with other Muslim countries, but the impulse to stand by theMuslim countries and Muslims in general was strong. The rivalry with Saudi Arabia, the war with Iraq, and conflicts with many other Muslim countries lenta sharper edge to the Islamic ideological component in foreign policy.This also had an impact on Iran's stance on Kashmir and Pakistan, as we shall see presently. But first we must also note that the ideological componentwas strongly impregnated with Iranian nationalism. This element was manifestly present when the revolution ousted the Shah and brought Ayatollah Khomeinito the helm of affairs in Tehran. A large number, particularly the youth and the students who boosted the ranks of the rebels against the Shah's rule,were strongly motivated and influenced by the currents of nationalism, not necessarily by the proselytizing enthusiasm of the Islamic clergy. This dominatinginfluence of nationalism was also evident in the seven-year war with Iraq, bruising and crippling as it was, and has been no less prominent in the struggleagainst the United States.The Islamic ideological thrust in foreign policy was the strongest during Ayatollah Khomeni's times and during the Presidency of his successor, AyatollahKhamenei. It began to abate somewhat under President AH Akbar Hashemi Rafsanjani's rule. But even he took a had line on Kashmir for a number of years.During a visit to Pakistan in September 1992 Rafsanjani placed Iran "solidly behind Pakistan in its fight to secure for its Muslim brethren in Kashmirthe right to self-determination" and assured Pakistan that "anything which harms Pakistan, generally speaking, harms Iran."55 Iran also joined other OICcountries in adopting harsh resolutions on Kashmir, generally drafted by Pakistan.The duality of Iran's policy, and one might add the dilemma, had earlier been well illustrated in its Foreign Minister AH Akbar Velayati's comments, evenwhile stressing the need for good Indo-Iranian ties. Although, he said, the most important principle of Iran's foreign policy was non-interference in theinternal affairs of other countries, as an Islamic country it supported Muslims anywhere.287If Muslims in India and elsewhere were under pressure or if they were in a difficult situation, "we take decisions to provide support based on humanitarianaspects and Islamic principles. The situation is the same in Kashmir."56Iranian reactions were further inflamed by the destruction of the Babri Masjid on 6 December 1992 by fanatics bearing allegiance to the Hindu Vishwa Parishadand Bajrang Bali groups. The most vitriolic reaction came from Ayatollah Khamenei who called upon the Muslims of India not to tolerate such insults anddeclared that the Muslim nation and all the Muslim nations were standing behind Indian Muslims.57Gradually, however, the Islamic ideological component began to wane, if not wither, as other national requirements came to the fore, and in any case itcame to be applied quite selectively. A combination of developments, foreseen and unforeseen, forced a major reordering, almost a reversal, of the prioritiesin Iranian foreign policy. For one, Iran was a predominantly Shia-majority country, whereas all the other Gulf and West Asian countries were largely Sunni,and the Shia-Sunni divide ran as deep now as ever before. There were substantial Shia communities in most of the Arab countries, but these were occasionallylooked upon as possible subversive elements, on whom a vigilant eye should be kept. This sectarian reality in West Asia, although not decisive, put substantialconstraints on Tehran's functioning as the unquestioned leader of the Islamic bloc and its theological appeal. Quite apart from Iraq's invasion and theconsequent war, Tehran's relations with other countries in the region were none-too-cordial or even pleasant.GRADUAL CHANGEThe war with Iraq had weakened Iran considerably, and brought about a severe economic crunch. It necessitate broadening of economic relations. India wasa natural and more productive economic partner than most other countries in the region. Geographically and geopolitically the link with India was amongthe more attractive political and economic options. As the geopolitical and geostrategic constraints exerted their pressure on Tehran, relations with Indiashowed a notable change. The American squeeze made modifications in policies more compelling. Not that the Islamic ideological angle went out completelyso far as relations with India were concerned, nor that pinpricks and deviations would not take place any more, but certainly a much greater warmth beganto be infused in India-Iran relationship, with very considerable prodding from India too.The American factor came to be perhaps the most significant factor in bringing about new directions in Iran's foreign policy. Reference has already beenmade to it. The struggle against the "great satan" or the number one satan, USA, became the most constricting factor on Iranian foreign policy and Iranian288foreign economic relations. USA was the chief super power, and now the only super power in the world. Iran needed (and needs now) to break through the isolationimposed by the United States. Ayatollah Khomeini had himself started the process of limiting Iran's enmities. Even before the dissolution of the SovietUnion, as Gorbachev's policies achieved full bloom (towards Iran as much as towards other world issues), the supreme spiritual leader wrote a unique letterto the Soviet leader in January 1989 which was a virtual announcement of the winding up of the campaign against the second great satan, USSR.58 The dissolutionof the USSR and the reincarnation of Russia changed qualitatively their mutual relations, marked, despite irritants and suspicions and frequent divergenceof interests, by a new level of cooperation between Tehran and Moscow.RAO'S VISITThe trend towards a more pragmatic foreign policy was greatly strengthened under Rafsanjani's Presidency. The shift became noticeable in Tehran's Indiapolicy, particularly as mentioned earlier under New Delhi's constant pushing and prodding. There would still be many hiccups and deviations, but not ofa lasting nature. Perhaps the most noticeable turn came with Narasimha Rao's visit to Iran in September 1993. The groundwork to the visit was laid by thenForeign Secretary J.N. Dixit who was in Tehran in July, extracting an assurance from the Iranian authorities that they would not question India's territorialintegrity. It was also reported on the eve of the Rao visit that Tehran had not raised with Dixit the issue of the Babri Masjid.59On the eve of Narasimha Rao's visit President Rafsanjani gave a new call for an Asian axis. He advocated (15 September) wide ranging cooperation betweenIndia, Iran and China so that they could have an effective voice in world affairs. "If the aim of Asian cooperation is going to be achieved, India willbe one of the most important axes of such an inter-Asian cooperation", Rafsanjani said. He had discussed the idea of Asian cooperation with the Chineseleaders and also with Central Asian countries. The Chinese leaders had accepted the idea, he claimed. "What is important is to put this idea into practice",he said.The Iranian President also said that he would discuss with Narasimha Rao the concept of Asian cooperation, steps to give a boost to cooperation betweenIndia and Iran, balanced cooperation and regional and world issues, including Kashmir and Indian Muslims. "We do not like the existing situation in thatarea", he said. It was not in the interest of India. It was not in the interests of the people of Kashmir. "We do not want to interfere. We only want talksso that a solution can be worked out together", he said.60This very interview underlines the dichotomy between the religious pull and the secular demands of the international situation on the Iranian leadership.On289the one hand was the belief of its mullah leadership that it was the carrier of the true faith and custodian of the Muslim conscience, and on the otherhand were the international pressures and constraints that loudly insisted upon the pursuit of a policy of moderation and new openings that could mitigatethe harsh struggle with a super power. This uneasy compromise and the see-saw competition between the two lines continued for a number of years and wasreflected in the Indo-Iranian relationship too.The Indian Prime Minister took the bull by the horns, so to say, by himself raising the issue of Kashmir and the Muslims in the valley and told the IranianPresident that he wanted a realistic solution to the Kashmir issue and that he was prepared to discuss this issue with an elected government in Islamabadprovided it expressed a genuine desire to do so. He took strong exception to Pakistan's attempts at eroding India's territorial integrity by aiding andabetting terrorism in Kashmir. Under the circumstances India had to respond with measures of firm resistance.Rao was also believed to have allayed any misgivings about the treatment and position of Muslims and other minorities in India. He emphasized that "we area pluralistic, secular and democratic society." He added for good measure that there was no discrimination and that India knew how to manage its pluralisticsociety.61President Rafsanjani was reported to have responded by acknowledging that the Kashmir issue was an internal affair of India. However, he said that Indiashould solve the problem of the Muslims in the valley as quickly as possible and offered Tehran's help in any manner towards achieving a rational solutionwith Pakistan. He also held the view that cooperation between India and Iran could play a significant role in ensuring the economic and political stabilityof the Central Asian region. The two leaders underlined the need to gear up the existing machinery so that exchanges between the two countries were moreactive and regular.62 That the Iranians were putting a high value on Rao's visit was apparent from Rafsanjani breaking protocol and himself receiving theIndian Prime Minister at the airport and from the special consideration shown through a long meeting between Rao and the Iranian spiritual leader, ImamKhamenei.63The shift in the Iranian policy was noticeable when Pakistan tried to push a resolution through the United Nations Human Rights Commission criticizing thehuman rights situation in Kashmir in March 1994. Just before the vote was to be taken, then External Affairs Minister, the late Dinesh Singh, went to Tehranto attend a meeting of the joint commission. But the timing was significant and could not have been missed by any observer of the international scene.64Dinesh Singh .had fruitful talks with both President Rafsanjani and Foreign Minister Ali Akbar Velayati. What was no less significant was that the ChineseForeign Minister was also (coincidentally, or was it?) in Tehran at the time and confabulated with Dinesh Singh.290As a perceptive analyst put it, Iran desired a closer relationship with India but did not wish to lose the link with Pakistan.65 Some of the see-saw inthis trilateral relationship could be explained by this dilemma.Nevertheless Iran and China virtually forced Pakistan to withdraw its resolution from the UNHRC. Iran's role created wide spread disappointment in Pakistanand a section of the elite had even earlier started wondering if there was a real shift in Iran's policy.66 Subsequently Iran conveyed the impression thatas a kind of a quid pro quo India had agreed to a visit to Kashmir by a delegation of the Organization of Islamic Conference (OIC), an interpretation deniedby india. There were mixed motivations behind Iran's role at the UNHRC. India's pressure was one factor. But an equally important factor that weighed withTehran was the use of the UN forum for commenting on developments in other countries. So far as human rights were concerned Iran was far more vulnerable(and so was China) to Western denunciation than India. If Iran had voted with Pakistan on any such resolution, it could boomerang on Iran itself subsequently.In fact China was facing a similar resolution moved by the West immediately thereafter. Iran could have been subjected to the same treatment.SETBACKIndia's jubilation over the developments notwithstanding, it was clear that Iran was somewhat edgy and embarrassed because it was sensitive to complaintsabout deserting a Muslim brother-state and about the "fate" of the Muslim brethren in Kashmir—a theme that Pakistan played to the hilt. This dilemma facinga self-proclaimed theological leader of the Muslim world could have been responsible for the outburst of the Iranian ambassador—who visited Kashmir alongwith other ambassadors in India from the OIC countries—for not being allowed to move around freely in Kashmir to meet anyone he liked. It would also explainthe abrupt postponement of President Rafsanjani's projected visit to India in October 1994.Rafsanjani's visit was intended to cement the growing political and economic ties between India and Iran, economic no less than political, but it got caughtup in the contradiction between the Islamic ideological dimension of Tehran's foreign policy and the requirements of national interests. Pakistan embarkedupon a high falutin campaign capped by President Leghari's trip to Iran and the subsequent laments in Pakistan that the Iranian President should chooseto go to New Delhi at a time when India was "slaughtering innocent Muslims in Kashmir".67Rafsanjani's projected visit was preceded by that of the Deputy Speaker of the Iranian Majlis and National Security Advisor. Rohini (who was also Iran'sCommander-in-Chief during the Iran-Iraq war) took the unusual step of going to Hyderabad and meeting Muslim leaders there. He was credited with the view291that the participation of militants was essential in the talks between India and Pakistan on Kashmir, indirectly offering Iran's good offices at mediation.This was a view totally unacceptable to India and he was so told plainly by Indian officials. Nor were his comments on rebuilding the Babri Masjid at thesame place considered very helpful.68 Arguably, there were domestic compulsions on Rafsanjani, forcing him to take a harder line on Kashmir.NON-THEOLOGICAL COMPULSIONSWhatever the explanations, no one believed the Iranian official explanation about the plague in India for Tehran's decision to postpone its President'svisit. Yet the geopolitical and the geosrategic compulsions (stated earlier) were soon asserting themselves, putting Indo-Iranian relations on the railsagain. In fact an unintended fallout of these events might have been a more beneficial, a more realistic reassessment of their ties in the two capitals,but more particularly so in Tehran. India came to have a greater appreciation of the complex and multi-layered influences on Tehran's foreign policy. Tehranappeared to have realized more acutely that the geopolitical and geostrategic realities could not be wished away and that it could not hunt with the houndsand run with the hare.More particularly in relations with India it could not expect to develop meaningful ties without showing sensitivity to the issue of India's territorialintegrity. No matter how much India desired and valued the relationship with Tehran, it could not agree to Tehran appropriating the role of an arbiterin matters that impinged on its unity and integrity. Tehran had to keep in view what Narasimha Rao appeared to have told the Iranian President and otherdignitaries, the larger picture, the international scenario and the Asian geopolitical situation.To the geopolitical realities around Iran were added two more compelling factors that required Indo-Iranian cooperation. We have already noted (ChapterFour) how Iran had been downplaying the ideological-religious factor and emphasizing the economic and commercial dimension in its relations with the CentralAsian countries. India needed the Iranian connection for any meaningful role in Central Asia, more so in the context of Pakistan's misgivings and hostility.Iran required as much assistance as India could give in terms of technological and financial inputs for the expansion of its economic role in Central Asiaand commercial expansion of Central Asia through Iran. Tehran had already initiated an intensive dialogue with India for cooperative functioning in CentralAsia.Another emerging factor was the developing situation in Afghanistan. This was to assume a far greater importance in India-Iran relations subsequently butit is being mentioned here in its incipience for this too would impel greater cooperation between Tehran and New Delhi and possibly create discord betweenPakistan and Iran.292Relations were picking up again with inputs from both sides. With this objective Ali Akbar Velayati came to New Delhi at the turn of the year. He had cometo attend a meeting of the joint commission, but it was plain that the main thrust was on the repairing of relations and the reinfusion of warmth in theirties.69 Undoubtedly also new dates were fixed for President Rafsanjani's visit.RAFSANJANI VISIT AND AFTERHashemi Rafsanjani, then President of the Islamic Republic of Iran, came to India 17-19 April 1995 on a visit that could be said to have finally turnedaround the Tehran-New Delhi relationship. Narasimha Rao returned the courtesy that the Iranian President had shown him when he went to Tehran and turnedup at the airport to welcome the Iranian dignitary. It was Iran's first presidential visit to India and Rafsanjani told reporters, "You could say I havecome on a pilgrimage to India." There would be no formal agenda for his talks with Indian leaders. "It is an open field", he said. Speaking on the sameday at a three-day international conference on the teachings and writings of Caliph Ali, Rafsanjani paid rich tributes to India's secularism, setting thestage for Indo-Iranian talks.70What was more, he sidestepped the Kashmir and Babri Masjid issues in his speech to a large gathering in the eighteenth-century historic Asafi Imambara inLucknow, remarking that he hoped that "your enemies would not succeed in dividing you". He urged India, Pakistan and Bangladesh to come together to promoteunity, mutual respect and cooperation in South Asia. India's struggle for independence against the British was an ideal example for others, he said andadded, "We have also learnt a lot from your struggle."71A high point during the visit was the signing of a memorandum of understanding (as noted in Chapter Four) between India, Iran and Turkmenistan on providingroad and rail access for Indian goods to Central Asia through Iran and vice versa. In a rather novel provision, demonstrating the importance that Iranwas attaching to cooperation with India in Central Asia, the memorandum, signed by the foreign ministers of the three countries in the presence of theIranian President and the Indian Prime Minister, provided for the international carriage of goods by road and rail from Central Asia to Iran and throughit to India in vehicles registered in any of the three countries.72Besides this unique MoU, India and Iran also signed five other agreements relating to cooperation in tourism, telecommunications and postal services, preventionof narcotics trafficking, environment and cultural exchanges.73The Iranian President's visit had both political and economic implications, with both bilateral and multilateral aspects. This should be placed in the contextof his earlier call for an Iran-India-China equation. Whether this kind of a triangular relationship could come about or not, it certainly implied a highdegree of Indo-Iranian cooperation. Rafsanjani's visit was not only a signal but293an important step forward in the development of their mutual relations and set the stage for closer relationship if both sides could show the determinationto keep up the momentum.Yet another recent development has brought the lines from the two countries much closer. The events in Afghanistan leading to the empowerment of Pushtu-speakingTaliban with Pakistan's backing in two-thirds of Afghanistan, its fanatical and almost barbaric imposition of Islamic laws as perceived by it and the intolerantattitude towards other ethnic groups in Afghanistan caused considerable anxiety in Tehran as well as Delhi, obliging them to closer consultations and coordinatingtheir efforts to prevent a single-group dominance of that war-ravaged country. It may be recalled in passing that the Taliban were mostly Afghan studentsemerging from the mosque education within Pakistan's territory and it was widely believed that the Pakistan army was extending more than peripheral assistanceto this new fundamentalist force in Afghanistan. Moreover, the Taliban were not only Sunni but militantly anti-Shia.74A clear evidence of Tehran's change of tack and its new mood was its convening of a regional conference on Afghanistan towards the end of October 1996 andits invitation to India to participate despite Pakistan's protest and boycott of the conference. Speaking at the conference, the Iranian Foreign Minister,Ali Akbar Velayati came down heavily on foreign interference and intervention in Afghanistan and wondered why some countries were encouraging fratricideamong the Afghans to promote their own interests.75 Of course Tehran continued its efforts to involve Pakistan in bringing about a peaceful solution, butclearly Iran's efforts were directed towards the prevention of complete dominance of Afghanistan by the Taliban and this required greater political contactwith India in the new situation.ECONOMIC RELATIONSThis writer has already noted in his earlier work on India's foreign policy that very considerable momentum in economic cooperation had been built up inthe seventies, but that various developments subsequent to the overthrow of the Shah's regime and the assumption of power by the post-revolutionary regimeand the economic crunch troubling Iran seriously undermined the economic relationship. The conflict with the United States and the long war with Iraq tooka toll of the economic situation. Iran has been cash-strapped for a number of years. Many proposed joint ventures suffered consequently.76 Initially therewas some suspicion about the economic collaboration as it took place under the Shah's auspices, but over the years there has been a resurgence of interestin Iran for economic cooperation with India, but the economic constraints on Iran have been palpable in developing economic relations with India.294The natural areas of cooperation, in the economic conditions and achievements of each, remain fairly common: oil and natural gas, fertilizers, railways.Two commodities have been dominating the Indo-Iranian trade scene: petroleum from Iran's side and tea from India's side. However India has more successfullydiversified its exports to Iran in recent years, bringing down the share of tea from 70 per cent to about 35 per cent. Nevertheless, trade remains heavilyweighted in favour of Iran because of India's oil imports. India's exports to Iran, after taking a dip in the late eighties began rising from 1990 onwards.They were a little over Rs 300 crore in 1991-92 and stood at Rs 513 crore in 1995-96. The imports from Iran had also declined sharply in the late eightiesand picked up much more sharply in the same period as India's exports. Rising from just about Rs 129 crore in 1988-89 to Rs 1,434.86 crore in 1991-92,they further shoirup to Rs 1,968.88 crore in April-March 1997.77The main area of economic cooperation between the two countries would, it appears, centre round the proposed gas pipeline through Pakistan and the economicapproach to Central Asia. As we have already noted in the chapter on Central Asia, Iran, India and Turkmenistan signed a joint agreement allowing themcarriage of goods by rail and road through the carriers of each of the three countries. Iran was keen to use India's financial and technological resourcesfor providing outlets for Central Asia through Iran and to provide a conduit to India for functioning in Central Asia.Iran had proposed the construction of a pipeline through Pakistan to India for the supply of natural gas. India had agreed to the proposal and feasibilitystudies were being undertaken to determine the costs. There were also indications of a favourable response from Pakistan. However, it must also be notedthat it was too early to say whether the two countries could find the finances for the project. But it certainly indicated Iran's perception about closerIndo-Iran economic cooperation.NOTES1. For a discussion on the period between 1966-88, see V.P. Dutt, India's Foreign Policy, Vikas Publishing House, 1984 and "1987.2. U.S. News and World Report, Triumph without Victory, op. cit, pp. 178-9.3. See Hindustan Times, 15 March and 4 June 1990.4. Times of India, 18 August 1990.5. See Indian Express and Times of India, 27 January-1 February 1991.6. See Times of India, 3 August 1990.7. The Hindu, 20 March 1991.8. Ibid., 1 November 1991.9. Ibid.10. Patriot, 21 February 1992.11. Indian Express, 11 February 1993,29512. Deputy Prime Minister's statements in India and Pakistan, Frontier Post, 15 February 1993; also statement by the second highest-ranking official inKuwait's Foreign Office, Indian Express, 1 March 1993.13. Hindustan Times, 18 January 1994.14. See, Michael Shuman and Hal Harvey. Security without War, Westview Press, Colorado, 1993.15. See V.P. Dutt, op. cit., Chapter on India and West Asia. -16. Indian Express, 21 January 1992.17. The Hindu, 10 May 1992.18. Hindustan Times, 23 December 1991.19. Ibid., 13 January 1992.20. Times of India, 27 January 1992.21. The Hindu, 22 January 1992.22. The Statesman, 30 January 1992.23. Hindustan Times, 16 February 1992.24. Ibid., 26 September 1992.25. Robert Twite in Telegraph (Calcutta), 6 July 1994.26. Times of India, 18 May 1993.27. Indian Express, 22 December 1993.28. Times of India, 31 December 1996.29. See V.P. Dutt, op.cit.. Chapter on India and West Asia.30. See, for instance, The Hindu, 12 January 1992, dispatch from Bahrain by F.J. Khergamwale.31. Samaan B. Farajalb, "Egypt and the Kashmir Question" (unpublished paper), Second Indo-Egyptian Conference, Jawaharlal Nehru University. New Delhi, 2-4September 1996.32. The Hindu, 15 and 17 January 1992.33. Ibid., 17 January 1992.34. Rajiv Shukla from Cairo in Observer of Politics and Economics, 17 October 1995.35. The Hindu, 17 October 1995.36. Mohamed Fathi Sakr, "Indo-Egyptian Economic Cooperation", unpublished paper for the Second Indo-Egyptian Conference, op. cit.37. Ministry of Commerce, Government of India, Annual Report, 1996-97.38. Fn. 35.39. The Stateman, 12 November 1991.40. Times of India, 14 November 1991.41. Indian Express, 5 December 1994.42. See V.P. Dutt, op. cit., Chapter on India and West Asia.43. See, for instance, Hindustan Times, 15 May 1994. " 44. See The Hindu, 27 April 1992.45. The Statesman, 7 January 1994.46. Times of India, 19 November 1992.47. Hindustan Times, 15 June 1993.48. The Statesman, 16 June 1993.49. Economic Times, 31 July 1994.50. Ibid., 20 April 1995.51. Times of India, 21 April 1995.29652. See V.P. Dutt, op. cit.53. The Hindu, 22 January 1990.54. Hindustan Times, 12 November 1991.55. Times of India, 8 September 1992.56. Ibid., 23 and 24 April 1991.57. Ibid., 8 and 23 December 1992.58. See Mohiuddin Mesbahi, "New Thinking and Islamic Iran: From Containment to Reconciliation" in A.H. Entenar (ed.), Reconstruction and Regional Diplomacyin the Persian Gulf, Routledge, New York, 1992, pp.269-70.59. Times of India, 17 September 1993.60. Hindustan Times, 19 September 1993.61. See The Statesman and Times of India, 21-23 September 1993.62. Ibid.63. Since writing this chapter former Foreign Secretary J.N. Dixit's book, My South Block Years: Memoirs of a Foreign Secretary (UBS Publishers' Distributors,New Delhi 1996), has become available. Dixit avers that Rao's visit had a beneficial impact on India-Iran ties and that there was a "positive chemistry"between Rao and Rafsanjani. He also mentions that a significant result of the visit was the agreement to jointly work to expand economic relations withCentral Asia. Iran would allow India to use its ports to send in goods to Central Asia and vice versa and India would help in expanding Iran's port facilitiesand surface transport capacities up to its borders with the Central Asian republics. See pp. 147-53.64. Anand Sahay in The Hindu, 5 March 1994.65. Inder Malhotra in News Time (Hyderabad), 10 March 1994.66. See, for instance, Shafaat Kaleem's article "Rao's Iran Visit: Implications for Pakistan", The News, 27 September 1993.67. Inder Malhotra in Times of India, 29 September 1994.68. See, former Foreign Secretary J.N. Dixit's article in the Indian Express, 25 October 1994.69. The Hindu, 4 January 1995.70. Indian Express, 18 April 1995.71. Hindustan Times, 19 April 1995.72. The Hindu, 18 April 1995.73. Times of India, 18 April 1995.74. See Ahmed Rashid in Times of India, 10 October 1996,75. The Hindu, 30 October 1996.76. V.P. Dutt, op.cit.77. Ministry of Commerce, Government of India, Annual Report, 1992-93 and 1995-96.298Chapter 9 India and AfricaDespite the poverty and the underdevelopment Africa constitutes an area of very considerable importance for India. It is inhabited by some 750 million people,about 13 per cent of the world's population, of which nearly 560 million are in sub-Saharan Africa covering about 18 per cent of the land surface of theworld. Besides, a host of African countries are a part of the Indian Ocean rim and their cooperation is necessary in the interests of faster economic growthin the area.India has had a long involvement with Africa. Indeed India's struggle for freedom began in Africa. It was in South Africa that Gandhiji began his struggleagainst colonial and racial injustice through satyagraha (somewhat inappropriately translated as passive resistance)—the struggle of truth against falsehood,for human dignity and the self-respect of the oppressed. In a way there was a common heritage of this struggle between India and South Africa.Jawaharlal Nehru took an intense interest in African developments and in the ongoing struggle there. He strongly denounced the attempts of the imperialistcountries to take recourse to various pretexts and guises to suppress the African people and to maintain the primacy of the white settlers. He made itplain that India stood squarely by the African when he "is being kicked, hounded and shot down" and when the Indians there were praying for safety.1 Asthis writer has noted in his earlier work, Indira Gandhi continued the policy of supporting the struggle for racial equality and freedom in Africa anddeveloping close relations with them. India provided not insignificant aid, not excluding military, to the struggles in Namibia and Zimbabwe (formerlyknown as Rhodesia), MPLA in Angola, FRELIMO in Mozambique and PAIGE in Guinea Bissau.2Rajiv Gandhi not only continued India's support to African causes, but made it an important component of his activist foreign policy. He accorded full diplomaticrecognition to the Namibian national front, SWAPO even before independence had been formally achieved. He joined issue with Margaret Thatcher at the Commonwealthsummit on the issue of sanctions against South298Africa and used almost every international forum to advance the African cause. His t6ur of the frontline states of sourthern Africa in mid-1986 became alandmark when he announced at Harare the institution of an Africa Fund to concretely help the besieged states struggling to fight the policy of strangulationcarried on by the racist government of South Africa.3SOUTH AFRICA: ROAD TO EQUALITYThe subsequent period saw a focusing of the struggle in Africa on South Africa in particular, although attention was also given to bring about the terminationof the civil strife in Angola which had partly been kept going by the supply of arms by the South African racist government and some Western governmentsto a rebel group headed by Jonas Savimbi.The struggle in South Africa was as highly complex as it was extremely arduous. It was against both domestic racial repression by a small white minorityand their powerful friends abroad. The might of a well-heeled state machinery was brutally used against a defenceless people. South Africa's strategicposition on the horn of Africa, strident mouthing of anti-communist rhetoric in the worst days of the cold war, and its metal riches were fully exploitedto ensure the overt and covert support of some of the big powers. Yet despite these odds, the struggle under the leadership of the African National Congress(ANC) continued to gain strength along with more effective international support to it. The racist regime had eventually to bow to the writing on the walland first agreed to power-sharing and finally to the democratic one-man one-vote principle.However, to fashion a politically stable and economically developing multiracial state in a situation in which the majority had been segregated and suppressed,living in ghettos and shanties and now expecting quick improvements and a lion's share in the national cake, in which the elite was virtually all whitebut was needed precisely for that reason, in which tribal loyalties and passions could be easily incited, in which another small minority, the Indian communitycould make significant contribution but lived in fear both of the past and the future, in which the world was getting increasingly integrated economicallyand consequently in which South Africa would require investments and markets—to fashion relatively peaceful and progressive polity in such a situationdemanded statesmanship of a very high order.Only Nelson Mandela could have provided such a leadership. Mandela was 46 when he was taken in by the racist regime, he was over 70 when he came out. Suchlong incarceration would normally breed bitterness in anyone less far-sighted than Mandela. The situation was as daunting as it was confused and bristledwith all kinds of dangerous possibilities in the initial period of the change-over. On the one side there were strong diehard elements in the white communitynot reconciled to the impending loss of power and determined to stir299up as much trouble as they could especially through their security forces; on another side were certain tribal forces with their own agenda like the InkathaFreedom Party led by Chief Buthulezi in the Zulu-dominated Natal province, who wanted to keep their power and wrest concessions from the ANC, apparentlyprompted or put up by the white forces;4 and yet on the other side was the black majority under the ANC, many of whom after so many years of suppressionand repression could easily be provoked to violent retaliation.The initial period of the dismantling of the apartheid structure of society and government witnessed quite some rioting and violence. It could have degeneratedinto prolonged tribal and racial chaos but for the statesmanship displayed by Nelson Mandela. The country needed a healing touch. His was the voice ofmoderation. In this strife the Indian community suffered too as a target of violent attack.A million strong, persons of Indian origin constituted some 2.7 per cent of the population, but 80 per cent of them lived in the Natal province dominatedby the Zulus. The attacks on them caused concern, but India held the apartheid regime and its system responsible for this violence against members of theIndian community.5Nelson Mandela expressed his distress and unequivocally condemned the attacks on the Indians.6 He was all praise for their role in South Africa.7 He tolda 120,000 rally not to forget the Dadoo-Xuma-Naicker pact. This was the accord reached in 1948, against the backdrop of the whites provoking riots betweenthe blacks and the Indians, between the late leaders of the Indian community, Dr Yusoof Dadoo and Dr Monty Naicker, and Dr A.B. Xuma, the ANC leader, onAfrican-Indian friendship and joint struggle against racist dominance and suppression.8 Subsequently during his first visit to India, Mandela referredto the "historic pact of cooperation between the African and Indian Congress" in his speech at the banquet hosted by the President, Dr Shankar Dayal Sharma,and later speaking at a public rally in Calcutta, he said that the South African freedom movement was led by the Natal Indian Congress, the Transvaal IndianCongress, the South African Communist Party and the African National Congress.9Nelson Mandela came to India in October 1990 to receive the Bharat Ratna award, the only non-Indian so honoured thus far. He was given a head of state treatmentin Delhi, much before he actually became one, and the occasion was also marked by a mammoth welcome in Calcutta. The visit set the tone for cementing thefuture relationship between India and South Africa and indicated New Delhi's determination to work closely with him.Undoubtedly the Indian community was somewhat nervous and fearful. They were worried about being squeezed out of South Africa. (It had happened in Ugandaearlier.) These fears were bitterly expressed before two Ministers of State, Salman Khursheed (External Affairs) and Ghulam Nabi Azad (Civil300Aviation) who were visiting Johannesburg at the same time and together met residents of the Indian township of Laudium along with some Indian media persons.10However New Delhi put its faith in the commitments of the ANC to strive for a multi-racial society and a modern progressive polity.India had all along steadfastly supported the South African struggle for freedom and equality and was among the first countries to extend diplomatic recognitionto the ANC which had set up an office in India long before the apartheid regime began cracking. India also opposed the lifting of international sanctionsuntil the road to democracy had become transparent. It also deferred establishing official contacts with South Africa until 1993 when the process of theestablishment of democracy and freedom in South Africa had become irreversible.In some ways India had to start from scratch. There was a strong political link with the freedom fighters, but inevitably the economic link was missing.Inevitably, because India had snapped all economic contacts with the racist regime. There were no direct channels and everything had to be done de novo.There was considerable potential but it could not be exploited overnight. It would take some years to build up a substantial new economic relationship.As a first step an Indian Cultural Centre was established in Johannesburg in May 1993, a kind of forerunner to the formal establishment of diplomatic relations,and an air link was established by Air India in November. However, events were moving swiftly and full diplomatic relations were established on 22 November1993 after a gap of five decades when the Foreign Minister of the interim government, Dr Pik Botha came to India for the purpose. India set up its embassyin Pretoria in May 1994, while the cultural mission in Johannesburg was converted into a consulate-general and another was established in Durban in theNatal province that was home to a preponderant majority of the Indian community in South Africa.Among the more significant ideas that Dr Botha floated during the New Delhi visit was the establishment of an economic grouping of Indian Ocean countries,an idea that the South African delegation traced to articles appearing in India. He said at a press conference at New Delhi that he had in mind a cooperationarrangement covering East African and Gulf countries and India and Pakistan, which could initially take up environment, marine and similar issues and latermove on to trade. He stressed the importance of such an arrangement in the new world order where Japan, USA, and the European Community were already partof powerful economic groupings.11 India's response had necessarily to be cautious as South Africa was going through a transitional phase and India wouldhave to find out the views of the new government which was likely to be an ANC government.The first genuinely democratic election with equal rights for all was held in May 1994. The ANC was triumphant and formed the first free government of301South Africa with Nelson Mandela as President. (It might also be noted parenthetically that the new government under Mandela included five Indians— farin excess of their population ratio.) India sent the Vice-President, K.R. Narayanan for the inauguration of Mandela as President. Perhaps the best summationof Mandela came from the Vice-President who told Indian journalists present at the occasion: "With him you feel completely at ease. There was no evidenceof the turbulence through which he has passed. Like Ho Chi Minh, he was so much at ease with himself, a figure without the weight of achievement or greatness.He has the Gandhian capacity to forgive and understand one's enemy. Mandela has something of Gandhi in him. Such calibre of statesmanship I have not seenanywhere in the world."12Mandela told Narayanan at a breakfast meeting that it was Gandhi who had set the ball rolling by founding the first political organization in South Africa,the Natal Indian Congress, a hundred years ago. The U.S. Vice-President, Al Gore, who was representing his country at Mandela's inauguration, echoed thesentiment.Speculation was rife at the time, not least in the Indian press, that South Africa would continue to tilt towards Western countries in its economic interestsand in the interests of evolving a modern prosperous state - that was where the money and the technology was—and that, therefore, India should not expectany special bond with the new Pretoria. Narayanan gave his own assessment which was a more correct reflection of the reality. A special relationship betweenIndia and South Africa, he said, was history. What was needed today was the forging of "a new, strong and creative relationship". Certainly the South Africansexpected economic help from the West, but "politically and sentimentally the new South Africa would look to the non-aligned".The Vice-President believed that a well-organized programme could be evolved to discuss and determine the avenues for cooperation through a joint mechanismwith which private enterpries could also be associated. The crux of the problem, he said, was to apply science and technology to alleviate the lot of thepoor in South Africa. The Indian experience and expertise could be useful in this endeavour.The Vice-President mentioned that the theme of an Indian Ocean economic grouping had been brought up during his visit and he thought this could be "a majorbinding factor in the future" and could be an "important Indian dimension" to South Africa's relations with the rest of the world.13 Necessarily a conceptlike this needed careful preparation and it took two to three years before a beginning could be made.The question was whether a structured bilateral relationship would actually be put in place and the momentum maintained. An entirely new beginning had tobe made taking up the links from where they were snapped decades ago. Business delegations were exchanged and probings made about joint ventures.302South Africa was the leading exporter of gold and diamonds and of coal and non-ferrous metals. More than half the exports consisted of primary productsand nearly 35 per cent or more of the imports came from USA and Western Europe. India was now eyeing the South African market for export of garments, drugs'and chemicals, light engineering goods, machine tools, computer software, plastic goods, auto components and the like, while South Africa hoped to sellto India minerals and metals, phosphate fertilizers, rough diamonds and newsprint, to name a few items. The business delegations as well as governmentofficials were also probing and analysing avenues for the setting up of joint ventures and it would necessarily take some years before a full-blown economicrelationship could be built up.Meanwhile, political links were strengthened. President Nelson Mandela came to India in January 1995 as the chief guest on Republic Day—his second visit,but his first one as President of a new, democratic South Africa—and further cemented the close political relationship. Speaking to press persons on SouthAfrica's foreign policy on the eve of his visit and answering the inevitable question about Kashmir, the South African leader expressed his confidencein "the leaders of India and Kashmir to sort out their problems without any interference by people from outside."Speaking about the future foreign policy of South Africa, Mandela said that they would be guided on international issues by the Organization of AfricanUnity and the United Nations. South Africa had friendly ties with scores of countries in the world, he said.14Three agreements were signed during Mandela's visit. A significant step was the treaty on the principles of inter-state relations defining the frameworkfor relations between the two countries. The two sides affirmed the principles of peace, democracy, and (significantly) secularism. They resolved to continuethe struggle against apartheid, racial discrimination and religious fundamentalism. Apparently the concerns of both sides were being kept in view. Theyagreed to cooperate in countering international crime and terrorism in all its forms. The other two agreements related to the setting up of a joint commission,a protocol on consultations between the two Foreign Offices and an agreement on science and technology.15Delivering the Rajiv Gandhi Golden Jubilee memorial lecture, Mandela spoke about the "values and goals we share" and reiterated the need for cooperationamong the countries of the Indian Ocean rim. Thus there was some continuity of approach in the Both a concept and the ideas coming from the new South.African leaders. This continuity was in fact a reflection of the requirements of the modern age to which all governments needed to respond.The increasingly close interaction could be gauged from a number of ministerial visits between the two countries. Of particular significance was that ofthe Deputy President of South Africa, Thabo Mbeki, who would shortly be303succeeding Nelson Mandela. Mbeki came on 3-7 December 1996, accompanied by six ministers and a high-powered business delegation. While a number of agreementswere signed through the second meeting of the joint commission, perhaps the most significant dimension of his visit was his call for a strategic relationshipbetween India and South Africa, a theme that was to be enlarged subsequently.Geopolitically and geoeconomically South Africa and India were important to each other. South Africa was the gateway to black Africa; it was also criticalto any genuine development of cooperation among Indian Ocean rim countries. It was the richest country in sub-Saharan Africa with a self-sustaining economy.A high level of political and economic relationship was essential in any comprehensive India-Africa equation. The political relationship was already fairlyintimate, but the establishment of a close economic relationship could only be accomplished gradually over the years.Yet, economic and commercial relations were picking up fast. From a modest figure of US $2 million in 1992-93, their mutual trade shot up to $566 millionin 1995-96, with exports at $328 million and imports at $238 million. Among the commodities that India exported to Pretoria were textiles, leather, hidesand skins, chemicals, machinery and equipment, pharmaceuticals, light engineering products and vegetable products. South Africa sent to India base metalsand products, chemicals, wood pulp and paper, and mineral products. Some thirty industrial houses and a number of financial institutions, like the EximBank and the National Small Industries Corporation, established their presence in South Africa. The Exim Bank had extended a credit line of $10 millionto finance mainly the import of engineering goods from India.16AFRICA: FREEDOM AND AFTERThe successful conclusion of the South African struggle virtually completed the process of the liberation of Africa. Since the late sixties country aftercountry had been attaining freedom and racial equality either from the colonial masters or from settler racist dominance. The process of awakening, however,was a prolonged and painful one. Liberation from foreign rule or racial dominance was only the first—but essential—step. It did not by itself signify orlead to development or social cohesion. Many parts of Africa were racked by civil or tribal conflicts or were under the heel of rapacious military leadersor troubled by the resistance of the ruling elite to the urges and demands for political pluralism.Whether it was southern, west, central or east Africa, the situation was dissimilar from country to country and subregion to subregion. Among the causesof decay and decline were lack of economic growth, tribal and group tensions subverting the cohesion of the state, poverty and food scarcity, the304tension between the civil and military leadership, the proliferation of arms, and inter-state conflicts.As the Foreign Minister of Mauritius, Paul Berenger put it, there existed today two Africas. One was "an Africa of missed opportunities made up of starvation,famine, coups d'etat, civil war, drug trafficking, illiteracy, overpopulation and AIDS. It is the face of Africa that is better known to the world forit comes daily under the glare of the media". But there also existed another Africa. "The other face of Africa is best symbolized by post-apartheid SouthAfrica and, indeed, the region of Southern Africa, which by and large is politically stable and economically sound. Indeed, even as regards Africa as awhole, the World Bank looks upon the future with hope. It expects for the continent a growth rate of 3.7 per cent for the decade 1992-2002 in comparisonto the growth rate of 2 per cent between 1982 and 1992."17Despite all the difficulties, depite the pain and the agony in large parts, the Africans have been making brave efforts to promote cooperation and economicgrowth so as to overcome the threatened marginalization of Africa. The Organization of African Unity (OAU) was established in 1964 and most of the Africancountries have adhered to it. The OAU has striven to douse tensions and conflicts, monitor elections and otherwise promote the security and well-beingof African countries. But as the OAU was an omnibus organization its effectiveness was limited by the resistance of individual countries or their rulinggroups. Nevertheless the OAU has been performing an increasingly useful role in moderating conflicts and securing justice for the people.In addition many subregional organizations came into being. Africa's vastness required subregional cooperative efforts. One of the most promising was theSouthern African Development Community which with the entrance of South Africa and Mauritius, claimed a membership of twelve.18 Among the others were theEconomic Community of Central. African States (ECCAS), the Economic Community of West African States (ECOWAS) and the Inter-Governmental Authority (IGADD)in East Africa. The southern states have also decided to set up a political organization, to be known as the Association of Southern African States, forprevention and resolution of conflicts and to protect the region from instability.INDIA'S POLITICAL ROLE AND PARTICIPATORY EFFORTSIndia had established fairly close political relations with a number of African countries in the sub-Saharan region, particularly those who were activein the Non-Aigned Movement or where India had actively supported the struggle for freedom and equality, such as Zambia, Tanzania, Zimbabwe and Namibia,and economic relations with many others also, like Nigeria, Kenya, Guinea Bissau, Senegal, Ivory Coast, Ghana, etc.305With the struggle against direct forms of colonialism and racialism being virtually over, necessarily the focus of India's foreign policy in Africa hadto be the strengthening of political ties with as many countries as possible and, even more importantly, the promotion of economic cooperation and theretoo the stress had to be not just on trade but also on projects, joint ventures, consultancy services and investments in various areas in which India couldfeasibly and profitably participate in African development. In addition India had to address its interest to those areas where there were sizeable Indiancommunities, like east and southern Africa.As we have already noted, India had actively supported, morally and materially, the emergence of Namibia and had established strong political links withSWAPO and its leader Sam Nujoma. The Africa Fund, of which India was the Chairman, was notably used to help the Namibian struggle as well as the infantstate. Then Prime Minister V.P. Singh was present at the inauguration of the new President of Namibia and promised to extend credits and technical assistanceto the newly freed state.He subsequently told the Rajya Sabha that India would dovetail the developmental assistance to Namibia into the priorities fixed by the newly liberatednation. He also said that India was prepared to provide military training to the Namibians if they wanted it.19President Nujoma was awarded the Indira Gandhi Prize for Peace, Disarmament and Development (1990) and while in India he expressed his confidence that thebusiness communities of the two countries would overcome the fact that Namibia was located on the other side of the African continent from India.20 PresidentVenkataraman, while presenting the award, mentioned it as "an opportunity to pay our tribute to your valiant contribution in leading the people of Namibiato liberty."21 The high-level contacts were evident in President Shankar Dayal Sharma's visit in June 1995 and President Nujoma's second visit to Indiain February 1997. The political links remained close, but the economic relationship was yet to be worked out in any substantial manner.With Zimbabwe and Tanzania also the political relationship was quite intimate. (It does not have to be elaborated here that Zimbabwe was a part of southernAfrica whereas Tanzania fell in the east African region, but they are being bracketed here along with Zambia, also in southern Africa, because of theirpolitical relationship with India.) President Robert Mugabe of Zimbabwe was an important player on the NAM scene, having become its chairman too for aterm, and India and Zimbabwe had a high level of perceptional propinquity on international issues. They also kept in touch with each other about developmentsin southern Africa.Mugabe was in New Delhi in mid-November 1991 to receive the Jawaharlal Nehru Award for International Understanding, conferring which President Venkataramanhailed him as "a champion of the oppressed majority in South306Africa, a cause equally dear to India." Both countries were concerned about the rising violence in South Africa during the transitional phase (to whichreference has been made earlier) and called upon the South African government of William de Klerk to take firm steps to halt the violence in the blacktownships and discipline the security agencies. Mugabe also welcomed the recent signing of the peace protocol in Mozambique.22Regarding bilateral relations, Mugabe acknowledged that it was depressing to note that the level of trade had failed to match the political interaction,a major reason being the scaling down of barter trade that had represented a significant portion of the bilateral trade. He also drew attention to hisgovernment's new thrust on establishing small-scale industries to help reduce unemployment. President Venkataraman indicated that the Indian experiencein the area of small and medium-scale industries could be readily shared with Zimbabwe entrepreneurs.23President Mugabe visited India again in 1993. He was to attend the G-15 summit, but even though the meeting was postponed, he came nevertheless, to demonstratehis commitment to the G-15 concept as well as to exchange views on various international issues and bilateral relations. He expressed particular interestin cooperation with India in the transport and small-scale sectors.24 The political, economic and social contacts were maintained during the nineties,one other highlight of which was the visit of President Shankar Dayal Sharma to Zimbabwe in June 1995.Relations with Tanzania were also marked by durable political contacts. President Julius Nyerere, now an elder statesman, was also a stalwart of the Non-AlignedMovement and had worked closely with the Indian leaders in NAM and at other international forums. Close contacts have been maintained with his successorstoo. President Nolugu Ali Hassan Mwinyi visited India in May 1993, confirming the continuing political relationship, at the same time devoting considerableattention to the expansion of commercial and economic relations in the fields of agriculture, industry and human resource development.It is also interesting to note that the two outstanding African leaders who voluntarily decided to step down, one having already done so and the other readyto do so very shortly, Julius Nyerere and Nelson Mandela, were both admirers of Mahatma Gandhi and Jawaharlal Nehru.Tanzania switched over to a multi-party system and in the first elections held under the new system in October 1995, the Chama Cha Mapinduze (CCM) cameback to power with a strong majority, with Benjamin Mkapa as President. Relations under Mkapa have also remained stable and it was reported that the Indiancompanies had won five contracts during 1994-95 worth about U.S. $20 million against stiff international competition.25Similarly a close rapport had been the hallmark of relations with Zambia. Although Kenneth Kaunda, who was a prominent personality in the307Non-Aligned Movement, was ousted as President, and a multi-party system introduced, relations with Zambia remained cordial. President Frederick Chiluba'svisit in 1993 also signified the continuity in the close relationship between the two countries. There was also stress during his visit and the subsequentjoint commission meeting in Lusaka on cooperation in industry, transport, human resource development, small-scale industries, railways, food processingand rural development.There was significant economic cooperation between India and the two countries, Tanzania and Zambia. With Tanzania Indian exports were valued at Rs 207crore in 1994-95 and Rs 270 crore in 1995-96. India's imports stood at Rs 170 crore in 1994-95, but shot up to Rs 321 crore in 1995-96, chiefly becauseTanzania became a major source for the supply of raw cashewnuts. Nyerere has himself mentioned that "more than 700 public servants have benefited fromtraining in India at the expense of India ... of considerable importance has been Indian technical assistance and lines of credit for small-scale industriesof many different kinds."26 Tanzania was also host to two joint ventures with India, one of them being the setting up of a steel rolling mill. With Zambiaalso India had a deficit, but a more modest one, exports being Rs 87 crore and Rs 115 crore in 1994-95 and 1995-96 respectively and imports Rs 171 croreand Rs 202 crore during the same period.We have already mentioned that the presence of Indian communities in some of the countries of south and east Africa necessarily invited Indian attentionand interest. As noted earlier, they numbered a little less than a million in South Africa and there were pockets of them in some of the other southernAfrican states. But another area of their concentration was east Africa, chiefly Kenya and Uganda. They had a rather unhappy experience in Uganda where,in the early seventies, Idi Amin sent them packing, in fact drove them out without any packs, some 60,000 Asians (mostly of Indian origin and includingthose who shifted loyalty to Pakistan). It was not easy for them in Kenya either, but they had less turbulent times there. This writer has discussed thesedevelopments in his earlier work,27and it may be repeated in passing that of the 200,000 Asians in Kenya nearly half had left by the sixties and that theirestimated number in the eighties was about 59,000.There began a qualitative change in the Uganda situation, not just in the approach towards the Indian question but in economic policies and developmenttoo, when Yoweri K. Museveni, spearheading the National Resistance Movement, strode into power and became President by 1986. The new regime embarked upona policy of economic restructuring and liberalization, gradually turning the economy around and emerging as one of faster developing countries in Africawith a 7 per cent rate of growth by 1992-93.By the beginning of the nineties, relations between India and Uganda had been normalized and appreciably restored to the earlier interaction. In January1991 President Museveni publicly acknowledged the harm done by the expulsion308of the Asians and the injustice to them and invited them to come back and recover their properties. An estimated 6,000 Asians are believed to have returnedby the end of 1995, most of them being Gujaratis. Among the prominent houses to return were the Madhavani and the Mehta groups that had large economicinterests in that country, the former being involved in sugar, beer, and steel, confectionery, soap, cooking oil and tourism, and the latter in sugar,engineering, general insurance, merchant banking, cables, etc.28President Museveni visited India in October 1992 and repeated his invitation to all those Indians who had left to reclaim their properties. Those who didnot wish to come back could claim full compensation, he said. He was confident that there were "enough social forces in Uganda now to ensure that the earlierorder does not come back" and pointed out that of the half a million people Idi Amin's regime killed, only three persons were of Asian origin. He was lookingfor the resumption of trade and economic relations with India.29India and Uganda signed the framework of an agreement (15 October) for the rescheduling of the Rs 100 crore Ugandan debt to India. The debt had piled upover the years, chiefly from government credit extended through institutions like the Exim Bank and the Export and Credit Guarantee Corporation. Ugandaalso expressed interest in importing industrial goods from India, while offering the sale of phosphates in return. Speaking to a group of businessmen,Museveni hoped that Uganda could revive its textile industry with Indian assistance.30In the wake of his visit, several technical missions went to Uganda for feasibility studies and the Indo-Ugandan joint commission began functioning, withits first meeting in Kampala in January 1994. There was a lot of coming and going between the two countries, many dignitaries coming from there and manyIndian ministers and officials going there. President Museveni himself visited India again in September 1994, bringing with him a large business delegationas an earnest of his desire for expanding business with India. Addressing a CII meeting in Bombay he reiterated the favourable terms Uganda was offeringfor foreign investment and later held discussions with individual interested chief executives of Indian companies.31India's economic relations with Uganda were fast expanding, of which technical training and assistance was one significant aspect. The Indian Technicaland Economic Cooperation (ITEC) programme was becoming increasingly active in regard to Uganda. Since 1991-92 some fifty Ugandans have been offered trainingin various short-term courses in India every year; in addition a number of Ugandans were coming for training under the Special Commonwealth African AssistanceProgramme.32Overall, economic and commercial relations have been expanding but in some ways these have been rather one-sided. India has expanded its export market inUganda from Rs 106 crore in 1994-95 to Rs 124 crore in 1995-96. But Ugandan exports to India were still almost negligible. India imported modest309quantities of raw hides and skins, leather and wool. Phosphate, of which Uganda had large deposits, was a strong possibility but only if India investedin its mining. There were two Indian joint ventures, in jute goods and in the manufacture of TV sets. A number of important Indian business houses werealso beginning to establish their presence in Uganda.As we have noted earlier, the Indian community in Kenya were spared the kind of trauma that the Indians in Uganda experienced but conditions have remainedunsettled for quite some time and their number had come down to some 59,000 from nearly 200,000, the rest having turned to greener pastures. But Kenyatoo went through a major political change with the accession to power of Daniel Arap Moi as President by the end of the seventies. Relations were stabilizedthrough the visits of the President and the Prime Minister of India to Kenya and of President Moi to India in the eighties. India endeavored to maintainthe political relationship in the nineties and Moi stopped over twice in India-—on his way to Beijing in May 1994 and again in September 1995 on his wayto Malaysia. But the nineties have been troubled times for the Kenyan President as there was a rising demand for full-blown democracy and genuine multi-partysystem. The popular movement gained considerable strength in the mid-nineties and by the spring of 1997 Moi was facing demonstrations on an increasingscale and was in deep trouble.More than the political relationship, the economic ties between India and Kenya expanded very substantially. So far as commercial relations were concernedIndia was able to push up its exports from Rs 385 crore in 1994-95 to Rs 817 crore in 1995-96 as against Kenyan exports to India of Rs 48.37 crore in 1994-95and Rs 49.11 crore in 1995-96.33Nearly a thousand Kenyan students had been trained in India in the last ten years. Of all the African countries, Kenya had the second of highest numberjoint ventures in operation with the Indians. There were nine of them functioning well and one under implementation, covering the fields of woolen textiles,pulp and paper, automobile ancillaries, life and general insurance, enamelled copper and aluminium wire, distillery and bottling plant, manufacturing andmarketing of procured tyres, etc.34 The economic relationship was well established and there were good prospects of its further consolidation.It is worth noting that India's economic relationship with African countries was not necessarily commensurate with its political relationship. The closerpolitical relations with some countries had historical and even ideological roots but economic ties had their own logic. For instance, India's relationswith Francophone countries. India's economic relations with many of them like Senegal, Ivory Coast, Zaire, Malawi and Sierra Leone were running well aheadof political ties, and India had just begun to address itself to the possibilities and opportunities of strengthening political ties with them, as forinstance with Burkina Faso (population about 10 million) from where the first state visit was in3101993 and with whom a serious effort began with the visit of the Prime Minister Narasimha Rao in November 1996. The effort began with a Rs 15.8 crore AgriculturalDevelopment Project in Burkina Faso, with the Prime Minister himself handing over the first consignment of tractors and agricultural implements duringhis visit. The rewards, so to say, were immediate. It was reported that Narasimha Rao secured a clear commitment from Burkina Faso for India's bid fora permanent seat in the Security Council and a reiteration by that country that the Kashmir dispute should be resolved within the framework of the SimlaAgreement. Reportedly also, Burkina Faso's good offices would be available for promoting India's relations and interests with other Francophone countrieswhere its President Blaise Compaore was believed to have considerable influence.35Another case in point about the disparity between political and economic ties was Nigeria. Nigeria was the largest state in Africa and potentially a significantpower. India had developed political relations with Nigeria over the years but the confused and violent domestic scene was a major roadblock. Nigeria wasconvulsed by both ethnic conflicts and the clash between the urge for democracy and military dictatorship. On the other hand, the development of economicties had gone ahead even without sustained political interaction in the nineties. Oil was a major asset in Nigeria's hands and India had a large deficitin its trade with Nigeria primarily because of import of oil. Indian imports (read of oil) from Nigeria were valued at Rs 1,330.70 crore in 1994-95 risingto Rs 2,572.66 crore in 1995-96 whereas its exports were valued at Rs 343 crore and Rs 498 crore during the same period.36The largest number of joint ventures in Africa by Indian industrial houses were located in Nigeria. By the end of 1995 there were thirteen joint venturesin operation and one under implementation. These covered a wide field—light engineering goods, consultancy services, transmission lines, drugs and Pharmaceuticals,waste cotton yarn, blankets, asbestos cement products, machine tools, cable and conductors, soft drinks, stationery and chemicals, and trading servicesin diamonds and jewellery.37MAURITIUSAnother southern African country that was of very considerable importance to India was Mauritius for a variety of reasons—its location, its ethnic compositionand its relative economic development. About 2,040 square kilometres in area, Mauritius has a population of only about 1.1 million, but nearly 70 per centwas of Indian origin, 50 per cent Hindus and 16 per cent Muslims of Indian origin, a creole population of some 27 per cent, a small but historically dominantFranco-Mauritian community, and a small Chinese population of less than 1 per cent. It had a per capita income of about $2,980,311fairly high for any Asian-African country. The economic arteries—the plantations and the commercial institutions—were traditionally controlled by the Frenchsettlers, called Franco-Mauritians, but the Indians also had come a long way and by the fifties they owned most of the tea and tobacco estates as wellas nearly half the cultivable land.India's historical and contemporary interest in Mauritius is self-evident.38 Diversity of their societies was a common feature, although the ethnic diversityof Mauritius was of a different kind than the linguistic and religious diversity of India. A discussion of the ethnic balance and its reflection on governancewithin the country is well outside the scope of this book, but both its physical location and its ethnic Indian composition made an indifferent attitudefrom India infeasible and inadmissible.A tradition of exchange of top-level leadership became established, particularly after the trend-setting visit of Sir Seewoosagur Ramgoolam in the sixties.A close and cordial interaction developed, despite some hiccups created as a result of the reservations and misgivings at times by some Francophone leaders(although this seems to have been overcome lately). A large number of Mauritian students came to study in India and Port Louis also took advantage of theIndian Technical and Economic Cooperation (ITEC) programme of which Mauritius was among the larger beneficiaries. The establishment of a joint commissionin 1979 served to stimulate new initiatives and the second meeting of the joint commission in February 1984 at Port Louis had drawn up a comprehensiveagenda for economic, technical and cultural cooperation.The change of government at Port Louis did not alter the top-level relationship. When Sir Aneerood Jugnauth defeated Ramgoolam's party and became PrimeMinister, there was no change in New Delhi's attitude. Jugnauth was invited as the chief guest for the Republic Day in 1990 (the beginning of the periodof this study). India extended full support to the new Mauritius Prime Minister's demand for the return of Chagos peninsula, including Diego Garcia, whichhad been detatched by the British and where the Americans had set up a major military base. This was clearly stated by the Prime Minister of the time,V.P. Singh, while welcoming Jugnauth at a state banquet. He described India's relatio.nship with Mauritius as "a very special one" and offered India'shelp in expanding the multi-faceted cooperation covering traditional cultural exchange programme, radio astronomy and oceanography.39Certain specific proposals in the educational sphere, like the Mahatma Gandhi Institute in Port Louis and financial assistance from the Exim Bank of Indiaand medical treatment in India for cardiac patients from Mauritius had materialized, but there were a number of constraints in expanding economic relations.The volume of Indo-Mauritius trade had not crossed Rs 36 crore, about all of which represented Indian exports to that country, chiefly due to its312predominantly agrarian export structure with sugar contributing nearly 70 per cent of the foreign exchange earnings.The educational and technical programmes remained active and so did the diplomatic interaction. The quality of the political relationship was evident whenPrime Minister Jugnauth faced a potentially serious domestic crisis because of a sweeping strike by top electricity engineers, plunging the country intodarkness. Jugnauth was reported to have made a personal request to V.P. Singh for help. The Indian Prime Minister discreetly ordered emergency assistanceto Mauritius, with a number of Indian engineers reportedly flown to Port Louis in March 1990, so that Mauritius would not be crippled by the power crisis.Some thirty-five experts were believed to have been involved in this quiet "crisis management".40 It was a clear demonstration of India's stake in thesecurity and economic concerns of Mauritius.The political exchanges at the highest levels were maintained regardless of changes in government in either country. The new Prime Minister of India, P.V.Narasimha Rao visited Mauritius in March 1992 as the chief guest when that country decided to declare itself a Republic. He was welcomed by Jugnauth atthe airport with the Tulsidas couplet that "when the junior brother, Bharat, and his eldest brother, Lord Rama, met after a period of separation, the joyboth experienced mutually knew no bounds and challenged description". Pressed by both the Prime Minister and the Governor-General, Veeraswamy Ringdeo,Rao extended his stay by a day.41While all the visits of the dignitaries to each other's country need not be recalled here, it is perhaps worth mentioning that the very first visit abroadof the first President of the Republic (that Mauritius had declared itself a year earlier), Cassam Uteem after assuming office was to India. Arriving inIndia on 2 April 1993, President Uteem told reporters, "India is a country of our forefathers and nearly two-thirds of the people in my country are ofIndian origin. For me it is a pilgrimage."42 President Shankar Dayal Sharma noted that Indian entrepreneurs were now actively pursuing joint ventures andinvestment and technical collaboration proposals in Mauritius and believed that India's decision to set up a Rs 20 crore revolving fund for promoting India-Mauritiusjoint ventures was a timely step to promote cooperation. As he put it, India-Mauritius cooperation was multifaceted, ranging from sectors like cultureand language to the frontier areas of knowledge such as satellite tracking, radio-telescope and computer technology.43Although the expansion of trade was heavily weighted in favour of India (for reasons already discussed), other avenues were actively explored for establishinga closer economic relationship. Indian exports to Mauritius were valued at Rs 358 crore in 1994-95 and Rs 455 crore in 1995-96, Mauritius' exports couldnot exceed some Rs 3-4 crore. But exploring other avenues at the seventh meeting of the joint commission in 1994 India offered fifty training slots toMauritius and313deputation of twenty experts annually. India also undertook to provide expertise and equipment for a National Science Centre in Mauritius and the upgradingof the Upadhyaya Industrial Trade Training Centre. India had already extended a total assistance of about Rs 100 crore.44Assistance in other areas was also being sought by Mauritius. Prime Minister Navinchandra Ramgoolam during a visit here in August 1996 sought India's supportin reorganizing, restructuring and upgrading the technology of the island's seventeen sugar factories. Addressing the CII in New Delhi on 14 August healso focused on extending air links, tourism and jointly exploring the growing opportunities emerging in the Indian Ocean region and Africa. He made astrong plea to the captains of Indian industry to come to Mauritius with their expertise, technology and investments, "Mauritius can be your stepping stonefor accessing the untapped markets of Africa and the Indian Ocean region",45 he added.There certainly was increasing interest from Indian industry and business. By the end of 1995, while two joint ventures were in operation, as many as adozen were coming up in varying stages of implementation. These included fields like tyres, construction of houses, textiles, chemicals, telecom equipmentand shipping.46 Nevertheless this author cannot help concluding that considering the stakes, India could have done much more for Mauritius in its own intereststhan it has done so far.INDIAN ASSISTANCE PROGRAMMES IN AFRICAOne clear lesson in the economic relationship with Africa was that while there were certain inherent constraints on the expansion of commercial relationswith many African countries, and other forms of assistance at the current stage could not necessarily be the vehicle for such expansion, the latter wereimportant in themselves in promoting basic development which would subsequently be helpful in expanding commercial relations.Perhaps the most significant dimension of assistance was the technical assistance extended by India. The Indian Technical and Economic Cooperation (ITEC)programme, initiated in 1964, became a potent instrument for developing economic relations and extending assistance of a fundamental kind. Designed todevelop relations with the newly independent countries, including countries with substantial populations of persons of Indian origin, the programme wasestimated to have spent over U.S. $2.5 billion by 1996, around a quarter of it on African countries, primarily focused on Mauritius, Kenya, Ethiopia, Ghana,Uganda, Zambia, Tanzania, Somalia, Nigeria, Mozambique, Namibia and Zaire.In 1994-95, of the 875 slots allotted for technical training 270 were for African students. This was in addition to 475 slots allotted to African countriesunder the SCAAP. Training facilities have been provided to some forty countries in Africa314in a variety of fields like rural development, small-scale industries, development of water resources, diplomacy, railways, etc. Increasingly, many Africancountries have been employing Indian experts directly. Indian experts have helped in areas like transportation, geology, animal husbandry and telecommunications,as well as in the establishment of scientific laboratories and industrial estates.47 The INTEC is also focusing on consultancy services and project assistance,which now constitute half the expenditure on the INTEC programme.Overall, India had some forty-seven joint ventures in Africa, in varying stages of operation or implementation, not a very impressive number, and thesewere particularly concentrated in ten countries, Nigeria, South Africa, Kenya, Mauritius, Tanzania, Zambia, Zaire, Ghana, Uganda and Ethiopia.48 But theycovered significant areas like textiles, auto parts, paper and pulp, machine tools, electric fans, steel furniture, bicycles, razor blades, chemicals andsoft drinks.We may now take an overall look at India's commercial relations with select sub-Saharan African countries (see Tables 1 and 2).table with 3 columns and 22 rowsCountry1994-951995-96?Benin (Dahomey)2229?Canary Islands5784?Congo P.Rep.11?Ethiopia91113?Ghana6488?Ivory Coast16129?Kenya385817?Malawi3348?Mauritania73?Mauritius358455?Nigeria343498?Mozambque57109?Senegal16126?Sierra Leone2074?Somalia220?Swaziland317?Tanzania Republic207270?Tunisia1829?Uganda106124?Zaire Republic52113?Zambia87115table end315table with 3 columns and 11 rowsCountry1994-951995-96?Congo P. Rep.0.30__?Ghana34.1586.18?Ivory Coast87.41112.48?Kenya48.3749.11?Nigeria1330.772572.66?Mozambique22.5767.79?Senegal140.1361.45?Tanzania Republic170.62321.00?Zaire Republic96.50117.82?Zambia171.74202.07table endHowever, the latest figures of trade between India and Sub-Saharan Africa reveal that India is at least presently running a deficit with this part of theworld. India's total exports during 1996-97 came to Rs 4787.66 crore and imports to Rs 8,063.04 crore.49INDIA AND UN PEACE-KEEPING OPERATIONS IN AFRICAUndoubtedly one critical area in which India's role was quite distinguished was its contribution to the United Nations peace-keeping operations in Africa.Beginning with the Congo, the United Nations intervened to restore peace and stop the fratricide in a number of situations of civil strife or of warringtribesmen killing one another, and virtually in each of these operations India was asked to participate. The Indian troops acquitted themselves well. Indeedtwo important Somali clan leaders wanted Indian troops to stay on even if the UN pulled out its peace-keeping troops from the war-torn country.50 Thisin itself says volumes about India's role in strengthening the United Nations. The contribution made by India to the UN peace keeping operatins in Africa:51316table with 3 columns and 8 rowsOperationPeriodContribution?Congo1964-691200 troops?Angola1988observers.?Namibia1978-89Commandant of the force, observers, and police monitors for observing elections.?Mozambique1992one infantry battalion?Somalia1993-945,000 troops?Rwanda1994one infantry battalion?Angola1995one infantry battaliontable endCONCLUSIONClearly India functioned under many constraints. Its financial resources were not unlimited. Its expertise could be spread only selectively. The Indianbusiness class had also its own difficulties, and of course its own considerations, and the government could not compel it to go into countries and areaswhere it did not believe the risk was worth taking or the profitability sufficiently rewarding. Uncertain and troubled conditions in some countries werean additional deterrent factor. Nevertheless within these constraints India considerably contributed to the development of a number of African countries.Its political role in supporting the African struggle for freedom and equality was well acknowledged, but it had also exerted a great deal of effort toinvolve itself in the economic development of many African countries.Yet, equally without doubt, much more could have been done and the potential was not even half-realized. Africa is a vast continent and India has yet todevelop any meaningful relationship with many of the countries in that continent. With the Francophone countries the process of developing relations hashardly begun. Hopefully, a concerted effort will be made in the coming years to expand both political and economic relationship with more and more Africancountries.NOTES1. See V.P. Dutt, India's Foreign Policy, Vikas Publishing House, 1984 and 1987, pp. 462-3.2. Ibid., pp. 464-87.3. Ibid., Also see V.P. Dutt, India and the World, Sanchar Publishing House, New Delhi, 1990, pp. 90-1.3174. See J.R. Hiremeth in the Pioneer, 1 August 1993.5. Indian representative C.R. Garekhan's statement in the UN General Assembly, Financial Express, 15 September 1990.6. National Herald, 9 July 1990.7. In conversation with Seema Sirohi, Telegraph, 28 June 1990.8. Harjinder Singh in National Herald, 9 July 1990.9. Telegraph, 19 October 1990 and Sunanda K. Datta-Ray in The Stastesman, 21 October 1990.10. Kishore Bhimani in The Statesman, 29 June 1991.11. The Hindu, 23 November 1993.12. Ibid., 14 May 1994.13. Ibid.14. Hindustan Times, 21 January 1995.15. See Indian Express, 25-28 January 1995.16. Source: Ministry of External Affairs, Government of India.17. Paul R. Berenger, "Understanding Contemporary Africa: India and South-South Cooperation", in N.N. Vohra and K. Mathews (eds.) Africa, India and South-SouthCooperation, Har-Anand Publications, New Delhi, 1997, p. 47.18. Other members were Angola, Botswana, Lesotho, Malawi, Mozambique, Namibia, Zambia, Swaziland, Tanzania and Zimbabwe.19. Indian Express, 31 March 1990.20. Hindustan Times, 25 February 1992.21. Times of India, 26 February 1992.22. The Statesman, 15 November 1991.23. Hindustan Times, 15 November 1991.24. Ministry of External Affairs, Annual Report 1993-94, p. 47.25. Ibid., 1994-95, pp. 55-6.26. Julius Nyerere, in Vohra and Mathews, op. cit., p. 39.27. V.P. Dutt, India's Foreign Policy, op. cit., chapter on India and Africa.28. K.H. Patel, former Indian High Commissioner in Uganda, "Transition in Uganda", Africa Quarterly, ICCR publication, 2 November 1996, p. 24.29. The Statesman, 16 October 1992.30. Ibid.31. n.28.32. T.G. Ramamurthy in Africa Quarterly, n. 28, p. 15.33. Ministry of Commerce, Government of India, Annual Report, 1994-95 and 1995-96.34. Source: India Investment Centre, New Delhi.35. Janak Singh in Times of India, 6 November 1996.36. n.33.37. n.34.38. See also V.P. Dutt, India's Foreign Policy, op. cit, chapter on India and Africa.39. The Statesmen, 25 January 1990.40. P.S. Suryanarayana in Indian Express, 22 April 1990.41. National Herald, 15 March 1992.42. Patriot, 3 April 1993.43. Ibid.44. Hindustan Times, 17 May 1994.31845. Ibid., 16 August 1996.46. Source: India Investment Centre, New Delhi.47. For a discussion of the technical assistance programmes and other forms of assistance see articles by K.L. Dalai, Hari Sharan Chhabra and R.K. Dhawanin Vohra and Mathews, op. cit.48. Source: India Investment Centre, New Delhi; also see R.R. Ramchandani in Vohra and Mathews, op. cit.49. Source: Ministry of External Affairs, New Delhi.50. See Hindustan Times, 23 July 1994.51. Source: Ministry of External Affairs, New Delhi.319Chapter 10 India: Japan: European CommunityJapan and the European Community are two major economic poles in the world, in addition to USA, but unlike the USA they are yet to develop as politicalpoles. They have immense economic clout and have become notable sources of capital and technology. India has strong economic interests in developing relationswith them, but the political dimension is not inconsequential either. With Japan particularly, a political perspective will have long-range influence onthe balance of forces in the Asian region.Politics and economics get indistinguishably mixed in relations between India and Japan. It becomes hard to tell where one begins and the other ends. Economicshas been a bigger determinant of their ties than politics. Political relations between India and Japan are cordial, but they have hardly any special characteristic.Economic relations are pregnant with possibilities but they still remain in the realm of tantalizing expectations. There is more hope than actual achievementin India-Japan ties.There has been a history of unfulfilled expectations. Soon after the last world war Japan found itself in the dock as an international criminal, but theIndian judge on the war crimes trial refused to hold just Japan guilty and believed that the victorious powers must also share the blame for the war. Thismade a tremendous impression on Japanese public opinion. India also concluded its own separate peace treaty with Japan, even while refusing to sign theone-sided U.S.-drafted San Francisco treaty, and waved any claims for reparations.Yet India-Japan relations became hostage to the cold war. With Japan firmly anchored under the U.S. political tutelage and concentrating on economic developmentand India firmly rooted in the Non-Aligned Movement, the relations were generally somnambulant . India failed to appreciate in time the need for maintainingclose links with Japan when Japan was not merely struggling but quietly building up economic strength. By the time India woke up to the rise of this newpower—an economic giant in any case—its own strength and elan were ebbing and Japan's interest in India became marginal.320This bald kind of background does not do justice to all the nuances of the relationship and the problems, but simplification sometimes helps to highlightthe essentials. All through the eighties, and the nineties as well (the period of study of this volume), India wooed Japan for trade, investments and technologyas well as for a more intimate political relationship, but with limited results. As we have mentioned earlier, the political relationship could not beseparated from the economic relationship and, therefore, the two would necessarily have to enmesh and be considered together.FUNERAL DIPLOMACYTowards the end of the eighties India used a good psychological moment to boost its ties with Japan. The death of Emperor Hirohito in February 1989 plungedthat country into a kind of national grief which foreigners found hard to comprehend. It was a psychological moment and India did well to send PresidentVenkataraman to attend the funeral. In a courtesy call the President spent forty-five minutes with the new emperor Akihito, who expressed appreciationof India having declared a three-day national mourning for the deceased emperor. R.V. also met Prime Minister Noboru Takeshita and discussed bilateralrelations.1A year later Prime Minister Toshiki Kaifu came on a visit to South Asia and was in New Delhi 28-30 April 1990. It may be mentioned by way of backgroundthat Kaifu was regarded as a clean and reformist Prime Minister, but without the kind of political clout and authority that the leaders of the dominantfactions within the ruling Liberal Democratic Party (LDP) had, yet they had to make way for Kaifu with the smallest group in the LDP because of their allegedinvolvement in a number of scandals that were currently being exposed. Kaifu was also friendly to India, as demonstrated by his subsequent association(until the time of writing) with the India-Japan Committee.The visit had both political and economic aspects to it. India wished to enhance its political cooperation with Japan, hoping to secure a better understandingof the problems India faced from the terrorism and violence aided and abetted by Pakistan in Kashmir, even as India sought at the same time higher investmentsfrom Japan.The first one was evident when Prime Minister V.P. Singh told his Japanese guest that any incitement to secessionism aided by terrorism and distortion ofreligion would be firmly rebuffed by the Indian people. Kaifu said that he believed that the basis of cooperation between India and Japan lay in friendshipand that he had the fullest understanding of India's deep commitment to peace in the region in particular and Asia in general. Later, however, a Japanesespokesman clarified that Tokyo's standpoint was that India and Pakistan should exercise restraint and settle their differences through negotiations inthe letter321and spirit of the Simla Agreement.2 So whatever Kaifu might have intended to convey in a friendly statement, the Japanese establishment ensured that noone should remain in doubt about Japan's strict neutrality on the issue. Kaifu himself repeated the official formulation while addressing a joint sessionof both house of the Indian Parliament.On the economic side, Japan was on a more comfortable plane. V.P. Singh expressed apprehension about exclusive trading blocs and the bypassing of the multilateralprocess. Singh also expressed the hope that Japan would take the initiative for a North-South dialogue at the forthcoming meet of the G-7 in Paris. TheJapanese Prime Minister shared the view as Japan too stood for promoting free trade and prosperity through a free market economy and not through the creationof economic blocs. He hoped that Europe would not organize a restrictive economic grouping. His country had no desire, he said, to counter this possibilitywith an Asia-Pacific bloc.India and Japan agreed to work together for avoidance of unilateral actions and excessive arrangements in international trade.3 Kaifu also indicated thatJapan would offer a loan of Rs 1250 crore in the coming fiscal year. It was pointed out by a Japanese spokesman that South Asia remained a priority areain the foreign economic diplomacy of Japan as the region still accounted for 20 per cent of the total economic assistance of $50 billion over the five-yearperiod 1988-92.Japan did announce a concessional loan of about Rs 1,200 crore at the Aid-India Consortium meeting in Paris on 19 June, representing a hike of 8.4 per centover the previous year's loan in terms of the Japanese yen.4 Japan remained the top donor to India on a government level.This was also the time that India found itself mired in an acute balance of payments crisis, worsened by the Gulf crisis. India found in Japan a sympatheticaid-donor willing to make its contribution to bail it out of its sudden predicament. Faced with an extremely difficult situation, India turned to Japan,whose government showed a great deal of flexibility. Although Tokyo held that it would be calling for an extraordinary meeting of the Aid-India Consortium,it short cut the consortium by announcing on 25 April 1991 a grant of $150 million in early disbursement and another $350 million to be made availablein May.5 The amount of nearly half a billion dollars would have been available in any case if the consortium had met in time but its meeting had been postponedas a consequence of the political uncertainties in India in 1990 and early 1991.The fact that Japan, rather unusually, moved in to help India out indicated that India was not a negligible consideration in the Japanese view. Japan therebybecame the largest source of hard currency for India at the time. According to one estimate, the cumulative Japanese assistance to India in terms of governmentaid, the loans granted to Indian public sector companies by the Japanese Exim322Bank, commercial banks and the Samurai bonds together came to somewhere between $1.5 billion and $2 billion per annum.6In June India and Japan signed three new agreements totalling $410 million for three specific Indian development projects. This Official Development Assistance(DDA) came from Japan's Overseas Economic Cooperation Fund (OECP) which was administered the Foreign Ministry. Of the total amount of 55,624 billion yen,49,318 billion yen were earmarked for the Anpara power transmission, 16,050 billion yen for the karnataka state comprehensive land use management, andthe rest 20,256 billion yen for small-scale industries development programme there. Two of the projects involved ready cash in response to India's requestfor relief in the aftermath of the Gulf crisis.7Meanwhile India had embarked upon what appeared to be a crash programme of economic reforms, liberalization and recourse to market economy. Like many otherdeveloped capitalist countries of the world, Japan too was intently eyeing Indian developments in the economic field. Eijirow Noda, co-Chairman of theIndia-Japan Study Committee and the China-Japan Foundation (and a former ambassador to India) said in New Delhi in August 1991 that the Japanese companieswere keenly watching the progress of the Indian perestroika and that there was now "genuine interest" in India among Japanese investors. Japanese companieswere very cautious, he reminded his Indian friends, and they wanted to be 150 per cent sure about the safety and profitability of their investments. "Butonce they are convinced they will jump in."The new interest in India among Japanese companies was in conformity with the official line that henceforth Japan should accord priority to Asian countries,Japan's own version of "look East" policy. Since Japanese investments had already reached a saturation point in South-east Asia, Japan had to turn to Chinaand India. Noda believed that India-Japan relations were warming up. There were signs of it in the setting up of two new forums in Tokyo—South West IndianForum headed by the Japanese Minister for Foreign Affairs and the Fukokawa Committee, chaired by a former vice-minister of the Ministry of InternationalTrade and Industry (MITI). There was also the India-Japan Business Committee headed by another vice-minister of MITI.8Japan's economic importance for India could be in no doubt with the announcement by Tokyo in September of new concessional loans totalling 106,594 millionyen, or about Rs 2,000 crore, for the new financial year, an increase of 1.7 per cent in yen terms, although it appeared to be a 50 per cent increase inrupee terms. The loans carried a 2.6 per cent interest per annum and were repayable in twenty years with a grace period of another ten years. It shouldalso be clarified that this included the $300 million (40.5 billion yen) that had been made available to India under two agreements on an emergency basis.The first emergency loan of $150 million was extended for the import of diesel oil in May 1991 and the second of an equal amount in June to strengthenthe financial resources of the lending operations of the Small Industries323Development Bank of India. Nevertheless, the new loans confirmed Japan's position as the largest donor of developmental assistance to India.9POLITICAL AND ECONOMIC PROBLEMSYet there were both political and economic problems to be resolved between the two countries. In the first instance Japan's own economic woes were beginningto haunt it for a whole decade. The "bubble economy" was bursting, requiring deep structural adjustments in the economy for redressal and revival. Japanwas in the throes of an economic slump for much of the nineties. Inevitably foreign assistance becomes a primary casualty during an economic recession.The Japanese Finance Ministry's decision to substantially cut foreign aid for fiscal year 1992 was undoubtedly going to affect India as much as any othercountry. It was advising the government against maintaining the target of 8 per cent growth as in the past few years. However, subsequently the ExternalAffairs Minister, Madhavsinh Solanki in the first high-level Indian visit since R.V.'s rather symbolic trip in 1989 was assured by the Japanese FinanceMinister of qualitatively improved and increased aid to Indian's development.Japan was meanwhile pressing India to sign the Nuclear Non-Proliferation Treaty (NPT). What was causing concern were the persistent reports that the aidmight be linked to the signing of the treaty. A Reuters report from Tokyo, quoting Foreign Ministry officials, asserted that Solanki was urged by his Japanesecounterpart, Michio Watanabe, to sign the NPT and warned that countries with nuclear weapons or selling nuclear-related materials could be denied aid.Solanki was unmoved by the Japanese stand and made it clear that India under the prevailing circumstances could not sign the NPT. On the north China wasalready a major nuclear power. In the north-west Pakistan was reported to be acquiring nuclear weapons. In this situation, Solanki told Watanabe, Indiacould not sign the treaty which was, in any case, discriminatory and put entirely unequal obligations on those who had the bomb and those who did not.10Solanki, however, was believed to have cleared the air in his meeting with the Japanese Prime Minister, Kiichi Miyazawa. As a consequence there was muchbetter understanding of India's position on the NPT. Solanki clarified at a press conference in Tokyo that the NPT issue would not affect Japanese aidto India. Both the Japanese Prime Minister and the Indian External Affairs Minister were agreed that there was an absolute need for the two countries tointensify their dialogue aimed at building a reliable foundation for cooperation. Miyazawa favoured India and Japan working together for a structural renovationof the United Nations to make it more representative.11 It may be recalled that both Japan and India were strong candidates for permanent membership ofthe Security Council.324Political problems could not be regarded as sharp or even central to India-Japan relations. Earlier India's closeness to the Soviet Union and Japan's toWashington, and perhaps no less Tokyo's suspicion of and animosity towards Moscow created some psychological barrier between New Delhi and Tokyo, but eventhat had lost its relevance with the disappearance of the Soviet Union. But it was in the economic arena that there were some serious barriers.The wish may father the thought but not the result. There were a series of obstacles that came in the way of the kind of intimate economic interaction thatIndia desired and that the Japanese might have welcomed. Certainly from the Japanese side there were many complaints and their corporations were reluctantto take the plunge into India. In fact the situation saw no radical change for many years, and perhaps even now has not been basically transformed.The Japanese case was finely and fully elaborated in the charter of twenty-one demands (no reference to the infamous twenty-one demands made on China in1913!) presented in New Delhi on 28 January 1992 by a high-level delegation from Tokyo. The 100-member delegation led by Rokura Ishikawa, chairman of theJapan Chamber of Commerce, attending the Indo-Japan Business Cooperation Committee, made these "requests" at the committee meeting as well as with theCommerce Minister, P. Chidambaram. The demands included the lifting of the restrictions on foreign equity participation currently pegged at 51 per cent,delinking profit repatriation from export earnings, removal of restrictions on capital goods imports for new joint ventures, early revision of India'sForeign Exchange Regulation Act (FERA) and further liberalization of provisions governing commercial activities of foreign corporations and real estateacquisitions. Ishikawa stressed the need for early formulation of an exit policy, removal of restrictions on emergency imports, reduction of import tariffs,relaxation of import licensing, priority in budget allocations for improving industrial infrastructure like power and telecommunications, reduction inprotection of small-scale industries and abolition of restrictions on banking activities.12It was somewhat ironic that what all the Japanese were demanding were at least some of the things that the United States was asking of Japan. Both wantedfrom the other further liberalization, transparency and restructuring. In any case, Manmohan Singh and Chidambaram were stated to have assured the Japanesethat the reforms they were suggesting were very much on the agenda of the government and a point by point response was given.13 A special cell to attractmore Japanese funds was set up by the India-Japan Business Cooperation Committee14The distance between appearances and reality was quite considerable. There was more talk than action. India was eagerly looking for higher Japanese investmentsand a number of Japanese companies were proposing to invest in certain specific areas, and a lot of interest was being shown in the liberalizing of325the business climate of India, but the reality was that by the early nineties Japanese direct investments had actually dwindled by 28.7 per cent.NARASIMHA RAO IN TOKYOIndia was making a sustained effort, both officially and non-officially, to attract Japanese corporate interest in Indian economic development and to raiseIndo-Japanese relations to a new level. The Finance Minister Dr Manmohan Singh's trip to Tokyo in April 1992 was followed by the Prime Minister's visitin June. Clearly the visit had a major economic content but was not without significant political overtones.Rao went with a large business delegation. His first engagement was to exchange views in separate meetings with the Japanese multinational corporations'tycoons and he spent two successive days doing it. He was assured by many Japanese industrial houses that they would like to be associated with more areasof Indian economic development.15 Rao, on his part, assured the Japanese business leaders that the pace of economic reforms would be accelerated, but explainedthat a consensus in the country had to be evolved and for that he needed some time. While the government would be open to ideas for improving the investmentand trade climate, the Japanese industry should also be mindful of the country's current constraints and look at India from a long-term perspective.16From the political angle, the same problem of signing the NPT maintained the divergence of the two countries points of view. The Japanese newspapers unanimouslyreported, no doubt briefed by official Japanese sources, that the Japanese Prime Minister, Kiichi Miyazawa, put pressure on Narasimha Rao for adheringto the NPT. The Indian spokesmen denied the Japanese reports. Narasimha Rao himself was rather evasive and told a press conference that the issue was discussedbut that what Miyazawa said "did not sound like pressure". According to Japanese reports Narasimha Rao explained to the Japanese Prime Minister why Indiacould not sign the treaty at this stage, but Miyazawa told Rao, "Even if the NPT is not problem free, it is necessary to prevent the spread of nuclearweapons within the framework of the NPT."17The Japanese Prime Minister suggested, and Rao accepted, the proposal for the setting up of working level consultations, saying "we wish to hold more substantialbilateral consultations than ever". The official spokesmen of the two sides jointly told the press that the two countries had agreed "to explore togetherthe elements of a new international consensus on non-proliferation".18These differences notwithstanding, the Indian Prime Minister believed that his visit had been fruitful and constructive and had paved the way for boostingIndia-Japan relations in the political, economic, technological and cultural fields. The Japanese side indicated to Rao that Tokyo would raise the Japanese326contribution to the Aid-India Consortium (scheduled to meet in Paris immediately thereafter) by 6 percent—from 106 billion to 112 billion yen, includinga fast-disbursing assistance of $250 million in the hydro-carbon sector.19Indeed Japan's official developmental assistance continued to rise. Tokyo announced 119,640 billion yen (equivalent of Rs 3,250 crore) loan assistance forthe year 1993-94—a rise of some 7 per cent over the previous year. For the seventh year running Japan remained the largest single donor of official assistanceto India. The aid pledge covered one on-going and two projects in the power sector, two new projects in the transport sector and a line of credit to theSmall Industries Development Bank of India.20 A year earlier Japan had pledged a loan of Rs 403 crore for the Yamuna action plan and the two sides hadagreed to cooperate in the environment sector as well as on global environmental issues.If ifs were horses or if wishes could automatically be translatable into concrete action, India-Japan economic ties would have reached enviable heights.It was not any political issue that was preventing the unlatching of the door, but the latch even though being shaken was still not giving way becauseof economic dissonance. The distance between what Japanese business was hoping and asking for and what steps India could take—at least immediately—wasin Japanese perception of critical importance why promise was short of achievement. There were constraints on both sides that held up faster progress.The Japanese corporate sector had three core demands and it was sore that even a year later, it had not received any real satisfaction on them or even onmany of the other requests. Indeed even after four years or so action on those core demands remains elusive. Japanese business houses had been pressingfor the formulation of an exit policy. They wanted the freedom to fold up in case of failure. Theoretically liberalization of the economy and the rightto exit would go together, but in point of fact, it had large social implications, for any blanket right to pull down the shutters could result in serioussocial dislocation and tension.As the then Finance Minister Manmohan Singh told the 29th joint meeting of the India-Japan Business Cooperation Committee, India could not sanction an outrightexit policy that would allow companies to hire and fire workers at will. The government could not afford large-scale political backlash. Workers neededthe assurance that liberalization was not a conspiracy against them, but rather it aimed to create more job opportunities. For that an appropriate climateneeded to be created and a social safety net firmly established, he said.21The second core demand related to the freedom for full and unrestricted repatriation of the profits earned by the Japanese companies. But that would haverequired full convertibility of the rupee. Most Indian economists were agreed that the Indian economic development had not reached the stage where fullconvertibility would be feasible. The third core demand concerned the relaxation of the equity ratio for foreign business houses presently pegged at 51per cent. India was willing to be more flexible on this demand, but the327government could not be indifferent to the apprehensions of the Indian industrialists about the take-over bids by foreign multinationals and many of whomhad come together in what came to be known as the Bombay Club, demanding a "level playing field" to ward off unequal competition from foreign companies.A QUESTION OF TRUST?The Japanese corporate world continued to confirm its interest in the Indian economic reforms and Indian economic development. They were studying the Indiansituation and carefully watching developments here. A number of delegations of top-level businessmen and executives visited India to examine the opportunities.Mostly they took a positive approach. Many well-known Japanese corporate giants, like Sony, Suzuki, Mitsubishi, C.Itoh and many others also became householdnames in India. Almost every one of them expressed admiration for India's economic reforms and confidence in India's potential to become a major economicplayer. The World Bank Vice-President, Joseph Wood, went on a mission to Tokyo to promote "high quality" private capital flow into India and found stronginterest among Japanese investors and business leaders in investing in India.22 Yet until now, generally speaking they were still sitting on the fence,waiting and watching.There were an array of complex reasons why Japanese investments in India were still a pittance of what Japanese business had invested elsewhere—a mere 0.1per cent of Japan's overseas investments. We have already referred to the prolonged economic drought in Japan. The days when Japan, it was widely believed,was permanently into a growth rate of 8-10 per cent had faded into memory. The present reality was negative growth rates and a Japan struggling for a 1-2per cent rate of growth. The overall Japanese investments abroad had declined. This was one factor, but not the only one, and not necessarily even thedecisive one.As a matter of recent history Japanese capital went into USA (43.87 per cent), Latin America (about 12 per cent), Asia (15.49 per cent, and within Asiato Southeast Asia, particularly Indonesia, and China), Europe (19.58 per cent), Middle East (1.09 per cent) and Africa (6.15 per cent). Japan cannot atthe first whiff of change move from one country to another. It needs to be recalled that whereas China began its economic reforms in 1976, the Japanesedirect investments were only a trickle until the beginning of the nineties. Much of the private Japanese capital infused into China moved in only duringthe last five years—almost fifteen years later than the launching of the reforms.The Japanese knowledge of the Indian infrastructure sector was still not adequate. The leader of the first-ever high-level delegation from the premier Japaneseorganization of the industrial houses, Keidanren, comprising over fifty328members, Katsuhira Utada, said that Japanese companies did not have much experience in investing in infrastructure sectors in countries like India. Theyhad to look into it more carefully, he said. However, recently Japan had shown interest in investing in the power sector. Japanese business houses werevery impressed by policy changes in India, but they were still looking for better policy environment.23To sum it up, as the top Japanese businessmen conveyed to an Indian business delegation accompanying Finance Minister P. Chidambaram in Tokyo towards theend of 1996, investment was an act of faith and Japanese business had yet to acquire 100 per cent faith in future India policies.24However, it would not be a true picture to end on a negative note. It is inevitably a slow and gradual process, but slowly and gradually Indo-Japanese economicrelations are being strengthened and the future is not without considerable hope. The tally of Japanese investments is as follows:table with 3 columns and 5 rowsYearInvestment??1993Rs 2574.3 million($81.72 m)?1994Rs 4009.0 million($127.25 m)?1995Rs 15142.6 million($445.37 m)?1996 (up to September)Rs 7695.83 million($219.88 m)table endSignificantly also a survey of the Export-Import Bank of Japan published in January 1996 on the promising destinations for Japanese investments in the mediumterm (three years) and long term (ten years) revealed a significant improvement in India's position over earlier years, rising from eleventh in 1994 toseventh in 1995 in the medium term category and from seventh in 1994 to third in 1995 in the long-range category. Currently it ranks second in the lattercategory with the number of votes for India rising from 38 to 195 and that for China declining from 265 to 195.25OFFICIAL POLICY: PARTNERSHIP WITH INDIAThe dichotomy between official assistance to India and the approach of the business houses was patent. As we have mentioned earlier, Japan extended significantdevelopment assistance to India. It was raised every year. In 1990 it was Rs 1,250 crore, it was 3,230 crore in 1993-94 and rose further to Rs 4,140 crorein 1996-97.26 The Japanese government's sentiments could not be more eloquently evident than the unorthodox approach adopted by then Minister for InternationalTrade and Industry (and now Prime Minister), Ryutaro Hashimoto when he came himself, instead of sending a message as was the usual practice, to addressa two-day meeting in Tokyo in April 1995 of business executives from private and public sectors of the two countries. He was making it clear that the329Japanese government viewed India as a new frontier partner in international economic relationship. He associated Japan with India's liberalizing economyin unprecedented terms and gestures that took business executives at the 26th annual joint meeting by surprise. He emphasized Japan's growing interestin India and assured delegates from both countries that they could count on the Japanese government as an active supporter of India-Japan economic cooperation.27Perhaps there was also a message being conveyed to Japanese industry that economic cooperation with India should develop into a national policy.Japan was an important trading partner of India, from India's point of view. India accounted for less than 1 per cent of Japan's foreign trade, but Japantook 8 per cent of the share of India's foreign trade. Nevertheless trade with Japan was growing year by year. During 1993-94 the trade between the twoaggregated to some Rs 10,231 crore, with Indian exports valued at Rs 5,482 crore (as against Rs 4,160 crore in 1992-93) and imports at Rs 4,749 crore (comparedto Rs 4,135 crore in 1992-93), leaving a small trade balance in favour of India. Exports rose to Rs 6,368 crore during 1994-95 and again to Rs 7,414 crorein 1995-96, whereas imports too climbed to more than Rs 6,405 crore in 1994-95 and further to about Rs 8,061 crore in 1995-96.28 If this trend continues,India's small favourable trade balance is changing into an adverse trade balance.RIVALS FOR A SECURITY COUNCIL SEAT?India found itself battling it out with Japan for a rotating two-year non-permanent membership of the UN Security Council vacated by Indonesia in December1996 but for which election was held in October. A traditional Asian seat, Japan fought long and hard for it throughout the year, pulling out all stopsto win it. According to a well-known Japanese daily, in its all-out no- holds-barred campaign, Japan's decisive edge came from its aid power. Japan hadassembled a number of its senior diplomats to mobilize support around the world. Japan carried out a well-oiled and well-heeled aggressive campaign forthe seat. Money was no consideration. The Asahi Shimbun analysed that India depended on its non-alignment record, while Japan collected votes as a majoraid-provider. The daily noted wryly that Japan did not get the support of many of its Asian neighbours like China, South Korea and several other Asiancountries.29In the event, Japan won handsomely and India lost rather poorly. There was considerable criticism in the country of India's failure to assess properly itsprospects and its lackadaisical approach (and of course disappointment with the non-aligned community) and its refusal to accept an earlier Japanese offero sharing the seat for one year each. The incident could have had a not a y negative impact on India-Japan relations, but both sides soft-pedalled theissue330and allowed it to be forgotten. The Japanese Foreign Minister rang up his Indian counterpart after the election result was out to mollify any injured feelingin the South Block, and the Indian External Affairs Minister reciprocated the sentiment behind the telephone call.OVERALL ASSESSMENTIndia-Japan ties have been on a steady upswing over the last six years. Economic relations dominate the totality of their relationship, but have not yettaken off the way Japan's relations with China and South-east Asia have developed. No serious or major political or even economic problem threatens todamage their ties, unlike Sino-Japanese, Japanese-Asean or U.S.-Japanese relations. But the quality of India-Japan relationship will depend not only ontheir economic interaction but also on other developments concerning Japan's role in the world and Japan's relations with many other countries in the region.Impelled partly by internal compulsions and partly by external prodding, Japan has been almost flailing around for a new, more active role in the world.Its economic clout was not proportionately reflected in a global political role. Its contribution to decision-making on the burning issues (non-economic)in the world has been almost negligible. Till a point of time it appeared to be a comfortable position, but the maturing of Japan and its global economicstrength made this position more and more untenable, or at least anachronistic. Japanese nationalism may not be so apparent on the surface as that of manyother countries, like USA, China and India, but it certainly is a strong undercurrent in Japanese long-term perspective. The difficulty is that there stillis no censensus in the country over the exact kind of political role it should play in the world. Japan's first priority is to secure a permanent seatin the Security Council that would automatically bring it into the political big league.Japan was also being prodded by USA to play a larger defence role. Washington was constantly urging Japan to assume a bigger share in the burden of thedefence of the region, although the definition of the region was deliberately allowed to remain vague in deference to the sensitivities of its neighbours,particularly China and Korea. A bigger role was also obvious in— what appeared to be at first a reluctant but now a definite part of the new politicalrole—its participation in peace-keeping operations of the United Nations. In any case, as the Americans push Japan for a larger share in the defence burden,Tokyo must opt for a bigger say in decision-making.There is no doubt that as China fears the revival of Japanese military power, Japan is wary of Chinese dominance of the region, and Japanese nationalisticfeathers are also ruffled at being pushed around by Washington. There would be need for harmonizing the nationalisms of the various countries of the region.As Japan's role in Asia enlarges, the ties between India and Japan would also have331to deepen to provide a healthier balance in Asia. Just as China and Russia and India and Russia have embarked upon "strategic partnership", even thoughJapan does not as yet recognize the necessity, as things are developing, circumstances would demand a new strategic (non-coercive as in the case of India-Russiarelationship) dialogue between India and Japan to promote prosperity and avert the appearance of hegemonies in the Asian region.B. INDIA-EUROPE AND THE EUROPEAN COMMUNITYThe re-emergence of Europe has been a significant development of the last quarter of the twentieth century. Europe is one of the focal points of the worldin the nineties. The integration of Western Europe that came about with the coming into effect of the European treaty on the midnight of 31 December 1992created a market of some 337 million people, and with Europe-12 enlarging subsequently into Europe-15, the market came to comprise 380 million people—thelargest market in the world. If the European Union were to succeed in absorbing the rest of Europe (another 500 million people) it would constitute aneconomy which hardly anyone else could match. "Europe's 850 million people are the only 850 million people on the face of the globe that are both well-educatedand start out not poor."30 By 1994 the European Community's share in world exports was a good 19.4 per cent and in world imports 18.8 per cent. It couldonly grow as further integration took place and as more countries joined it.Although political integration has been much slower than the economic integration, as individual countries were reluctant to part with any elements of sovereignty,it is nevertheless crawling ahead. It would require many more years—may be even decades—to achieve genuine political integration, but the process is virtuallyirreversible. The House of Europe, as some have described it, is going to be among the most potent centres in the world.Europe is equally important for India. As a unit the European Union (EU) is among the largest trading partners of India. It provided a market for 26 percent of India's total exports in 1993-94 as against 17.7 per cent in 1985-86. Also in 1993-94 as much as 30 per cent of India's imports came from the EU.31Although India's share in the European Community's foreign trade was virtually negligible, its importance for India cannot be understated.Politically too Europe cannot be ignored by India. Developing closer relations with Europe is one way of adding more leverage and flexibility to India'sforeign policy. It brings a better balance to relations with the United States and very indirectly with China and Pakistan. An increasingly integratedEuropean Community, as one pole in the half-formed post-cold war political world order as well as the rapidly globalizing economic order, constitutes aprincipal area of concern and attention for India's foreign policy and foreign economic relations.332Within the European Community India strove to develop closer relations with some of the major countries, principally United Kingdom, Germany and France.Before we consider in some detail India's interaction with the European Community, it would be appropriate to give some attention to the development ofrelations with these three important countries, from India's point of view, during the nineties.The background for the developing ties with these three principal countries of Western Europe was, of course, the economic reforms initiated in 1991. Thereforms excited interest, as the impression of a new emerging market (subsequently described as the soon-to-be third largest economy in the world) gainedcurrency, and won accolades in the European capitals. This spurred a flurry of contacts at the official and corporate level. Equally, it was amazing howmuch effort India did expend in promoting ties with Western European countries.India had both economic and political objectives in striving for a stronger interaction with Europe. India needed aid and investments from London, Bonn,Paris, Rome and other European capitals. But India also had significant political considerations in intensifying its dialogue with Europe. Securing greaterleverage and flexibility was one objective. India hoped for European sympathy and support for other reasons as well. India believed itself to be the targetof terrorism from across the western border, first Punjab and then Kashmir and strove to mobilize support from influential European states against Pakistani-sponsoredterrorism and the attempt to internationalize the Kashmir issue. There was also the issue of the permanent membership of the Security Council for whichIndia wanted the support of the European countries.There is no doubt that Europe's interest in India was rekindled by New Delhi's economic reforms. The political importance was being rediscovered only whenit appeared that India would be emerging as a major economy in the world. The political and economic dimensions of the relationship thus went hand in handand would have to be considered together.UNITED KINGDOM: A SPECIAL NEW RELATIONSHIPIndo-British relations have had their ups and downs, but certainly there has been very considerable interaction between them. In addition the large Indianand Pakistani communities (including Mirpuri) in the United Kingdom made their own contribution to hiccups or growth in the relationship. But what wasremarkable was the development of a new, almost special relationship between India and the Tory government in London, belying the traditional belief thatIndia was more comfortable with Labour. The relationship spawned both economic and political ties. What was witnessed during 1991-95 can only be describedas a flowering of relationship in all its aspects.333The process of strengthening relations began with President R. Venkataraman's visit to England in April 1990. R.V. conveyed to the British Prime Minister,Margaret Thatcher India's serious concern at Pakistan's involvement in terrorist activities in Punjab and Kashmir of which incontrovertible proof had beengiven to the Pakistanis. He also suggested to the British Prime Minister that the absence of an extradition treaty need not come in the way of extraditionof terrorists. Mrs Thatcher also expressed her concern over the upsurge of fundamentalism in the world and was firmly of the view that no country couldever think of negotiating with terrorists who were acquiring more sophisticated techniques and that their challenge must be met by the governments withgreater determination and superior techniques.32Mrs Thatcher was soon afterwards succeeded by John Major who gave a new dimension to Indo-British ties and raised the relationship to a level never achievedbefore. He gave a big boost to both the political and economic relationship.Britain was among the first countries to put in a special effort to take advantage of the economic reforms of India. As it was, in 1991 Britain, it wasclaimed, was the largest foreign investor in India. Of the 100 foreign companies in India, 49 per cent were British and were earning 59 per cent of theforeign exchange earned by all foreign-controlled companies.33 British companies were evincing a new interest in investing in India.That the John Major government had brought about a turn around in the British approach was apparent from its first statement that came in the British Parliamenton the Indian situation. Replying to a question, the British Minister of State in the Foreign Office, Tristan Garel-Jones justified the exceptional measurestaken by New Delhi to deal with terrorism in the Punjab and called upon Pakistan not to support the terrorists. He said that a handful of Sikhs had organizeda violent campaign against India which had its dens in Britain, Canada and the United States. He was affirmative that the British government would notpermit a handful of Sikhs to plan or finance terrorism in India.34The ground was thus ready for a much closer Indo-British political and economic relationship. India was already negotiating with Britain agreements forthe confiscation of money and property of the drug traffickers and terrorists operating from the United Kingdom. This was further discussed by the BritishSecretary for Home Affairs, Kenneth Baker during his brief visit in January 1992. His meeting with the Minister for External Affairs Madhavsinh Solankimust have been the most satisfactory from the Indian point of view, for Baker was reported to have described India as a "genuine victim state". He agreedwith Solanki that the rising tide of religious fundamentalism coupled with terrorism posed a particular threat to democratic societies like India. He undertookto convey to the Pakistani leaders India's serious concern in this regard during his forthcoming visit there.35334Close on the heels of the Baker visit came the British Foreign Secretary, Douglas Hurd in mid-January. Hurd hailed India's economic reforms and carriedforward the discussions on an extradition treaty and other political issues. He believed that even though both countries were confronted with the problemof terrorism efforts should be made to ensure that there were no human rights violations as alleged by some groups in Kashmir. The two countries agreedon an official level Indian delegation to visit London to pursue negotiations on an extradition treaty.36The firm stand taken by the British government on the issue of terrorism was emphatically stated by the British Prime Minister in his correspondence withLord Avebury, a militant supporter of the "Jammu and Kashmir Liberation Front". He told Avebury, who had asked him to spell out his government's policyon Kashmir, that Britain was not satisfied with Pakistani assurance that Pakistan was offering only moral and political support to the Kashmiris in theiropposition to India. "We have urged the Pakistani government to make efforts to prevent Kashmiri militants from operating safely from Pakistani-controlledterritory", he said and added, "It is clear that some elements within Pakistan are providing material support. The continuing violence can only hurt thepeople living in Kashmir, and make it harder to achieve a peaceful, lasting solution."Major also rejected, in his second letter, Lord Avebury's suggestion that the United Nations Security Council assert the right to intervene in Kashmir."We doubt whether it would be helpful to try to do so", he said. The British Prime Minister also told Avebury, "We believe that ultimately the disputecan only be solved by a peaceful agreement between India and Pakistan ... as both have committed themselves to do in the 1972 Simla Agreement. We haveoffered to help but only if both sides wish us to do so."37Indo-British relations were on the bounce and perhaps the most important development in this regard was John Major's visit to India as the chief guest atthe Republic Day parade on 26 January 1993. Apart from a British Aerospace (BAC) delegation, Major was accompanied by perhaps "the most prestigious groupof British businessmen ever to accompany a British Prime Minister abroad", as he himself put it subsequently.The British and the Indian Prime Minister were in complete agreement on the need to combat religious fundamentalism and expressed total abhorence of terrorismwhich had tragically affected both the countries. The British Prime Minister said at a banquet speech that those wwho sought to bring about change throughviolence did so because they could not secure democratic assent. India and Britain were both resolutely committed to opposing such methods.38If the political relationship was being enormously strengthened, the economic dimension of the visit was no less significant. The two sides were agreedupon the establishment of Indo-British Partnership Initiative (IBPI) led by the private sector and supported by the two governments. The highlight of the335economic side was a joint venture agreement signed by British BAe and Hindustan Aeronautics Limited (HAL) for setting up a software company—HAL BAe Software,based in India. With 49 per cent equity participation of HAL and 40 per cent of BAe, the company would make speciality software, for mainly engineeringapplication, for sale to third parties.39Flanked by his own industrialists and speaking to the captains of Indian industry, the British Prime Minister promised that "Britain will move up the battingorder since the wicket is more friendly in India." He was responding to a comment by an Indian industrialist that "Britain, which was the opening batsmanhas gone down the batting order as far as foreign direct investment was concerned." He also assured India that Europe would not become a fortress and thattrade barriers must be removed. He invited Indians to invest in Britain to have a direct access to the European market since "Britain is back in business."40That the British Prime Minister was extremely pleased with his visit was clear from his subsequent comments in the House of Commons. Speaking during thequestion hour he claimed that the contracts signed by the British companies during his visit were worth billions of pounds and could help in creating 20,000jobs. He referred to the ?100 million supply contract for British Gas and a ?140 million power transmission contract for GEC Alsthom. "We established anew rapport with the Indian government and the Indian business community that will bear rich fruit in trade, investment and jobs." His comments came inthe backdrop of some criticism of his visit as a waste of time, particularly a virulent attack by The Times, London.41 A few months later, speaking atan Indian High Commission luncheon, John Major said that he saw in India something of a romance.42The next day marked another milestone in the development of Indo-British ties. The House of Commons approved the Indo-British extradition treaty by an overwhelmingmajority. The treaty had been signed earlier in September 1992, sending a clear signal to anti-Indian militants operating from British soil that Britainwould no longer be a safe haven for them. The treaty brought Britain's extradition arrangements with India at par with those already existing with USAand most other European countries.43 Curiously, however, not a single member of the Labour Party voted for the treaty, while 31 of its members voted againstit along with 4 Liberal Democrats and 3 Tories.44 Before the end of the year India and Britain had finalized tie-ups and contracts running to almost ?1billion as part of the Indo-British Partnership Initiative (IBPI). The agreements related mostly to the power sector. Speaking on the occasion of the signingof the agreements aboard the royal yacht HMY Britannia off the Bombay shore, British Foreign Secretary Douglas Hurd remarked that the IBPI was "much thebiggest trade effort made by the British".45As we have remarked earlier, economics and politics went hand-in-hand in Indo-British relationship. Britain made it clear that there was no change in336Britain's Kashmir policy. While welcoming the proposed resumption of talks between India and Pakistan, the Minister in the Foreign Office, Mark Lennox-Boydreplying to an adjournment motion in the House of Commons on the human rights situation in Kashmir, maintained that a bilateral dialogue under the SimlaAgreement provided a framework for the solution of the Kashmir issue. The external support for violence in Kashmir should cease and the human rights situationthere should improve. The Minister expressed the government's view that the UN resolutions on Kashmir had, to some extent, been overtaken by events andthat in any case neither side had fully implemented these resolutions. The issue had been raised by a couple of members (like Max Madden) who were knownto be harsh critics of India.46Yet another significant step in the development of economic relations was taken when the two countries signed a ten-year agreement to promote and protectinvestments in the two countries during Prime Minister P.V. Narasimha Rao's visit to Britain in mid-March 1994. The agreement, signed in the presence ofboth Narasimha Rao and John Major was hailed as an important achievement of the IBPI, which was extended by another year with the intention focusing onsmall and medium companies to boost trade links. The two co-chairmen of the IBPI, the British and the Indian, in their report made a number of recommendationsto the two governments for strengthening economic links and identified business opportunities in different sectors, including power, agro-foods, processing,manufacturing technologies, telecommunications and telematics, industrial components, infrastructure and environment, oil and gas, financial and legalservices, and consumer goods.47On the political side John Major was reported to have suggested to Narasimha Rao that some confidence-building measures might be taken to ease tension andfacilitate talks with Pakistan. India was willing to resume talks with Pakistan but believed that the resumption of the dialogue was linked with the cessationof border terrorism. The British understood India's position on militancy and the problems it posed for the army, but still favoured greater transparencyin the observance of human rights. The British government also demonstrated greater sensitivity to India's concerns on the nuclear non-proliferation issueand the matter was not raised during Narasimha Rao's visit. The Indian Prime Minister was extremely satisfied with his visit and believed that "our relationsare marked by mutual trust, confidence, understanding and awareness of many shared interests and values" and that an additional cementing factor were thestrong inputs given by business and industry of both countries to their economic relations.48337LABOUR AND INDIAThe conventional belief has been—and it was not wrong up to a certain period—that intellectually and even emotionally India felt itself nearer and moreakin to the British Labour Party than the Conservatives. Historically many eminent persons of the Labour Party had been sympathetic to India's strugglefor independence and India's political leadership had many personal contacts with a number of British Labour leaders. Even after the attainment of independenceit was believed that the British establishment, particularly the British bureaucracy (that had been ruling India) and the media was tilted towards Pakistan,not having "forgiven" India for its defiance of the British empire, whereas there were still a number of personages in the Labour Party sympathetic toIndia's aspirations and democratic, secular polity. In fact the situation was changing right after independence and by the eighties any special relationshipwith the Labour Party had become defunct. The position was actually reversing itself by the nineties. Whereas a new relationship was developing betweenthe Conservative government and India, there was increasing disenchantment in India with the Labour Party. The differences centred on the Kashmir issue.Labour's approach towards the Kashmir issue was more and more influenced by constituency politics. The Pakistani community, especially the Mirpuri community,in England constituted a significant segment of the voting population in some constituencies and the Labour MPs (or candidates) dependent on these votesnot only became hyperactive in championing the Pakistani cause on Kashmir but came to have an enormous clout over Labour's standpoint on Kashmir.Even though the leader of the Party would take a more moderate position, a sufficient number of vocal members, including some in the leadership, gave amore virulent twist to the official policy. At the beginning of the nineties, Neil Kinnock was the leader of the Labour Party and his standpoint was moremoderate than that of his shadow home secretary and foreign secretary.Kinnock's stand was reflected in the Party manifesto which said, "The Labour government will make itself available to our friends in India and Pakistanto assist in achieving a negotiated solution to the problem of Kashmir that is acceptable to all the people of Kashmir—Muslims, Hindus and Buddhists."The manifesto also promised to set up a human rights division in the Foreign and Commonwealth Office requiring all Britain's diplomatic posts abroad toappoint an officer to monitor human rights.But both the shadow home secretary Roy Hattersley and shadow foreign secretary Gerald Kaufman (both of whom had large Kashmiri or Pakistani constituents)were harping on the theme of self-determination in Kashmir and a plebiscite to determine the wishes of the people. The shadow home secretary was promisingthat if Labour formed the government, it would move the United338Nations on Kashmir as well as on Punjab. Both were promising to give priority to the Kashmir issue if Labour was voted to power.49As it happened, Labour was defeated in the April 1992 elections and Neil Kinnock made way for John Smith. Both Hattersley and Kaufman faded out at leastfor the time being from the political scene, although there were others to take their place in India-baiting, like Max Madden, who, however, was a backbencherand not the Labour spokesman. Smith brought balance and sanity back to the Labour policy towards India. He supported bilateral talks between India andPakistan, beginning of a political process in Kashmir and cessation of support to terrorism in Kashmir from outside. He was enormously impressed by India'sdemocratic ethos and indirectly supported India's entrance into the Security Council as a permanent member.50 But Smith's sudden death in May 1994 broughtthe position back to square one, so to say, and divided Labour opinion again, with a number of Labour dignitaries taking the usual anti-India positions.With approaching elections the rhetoric over Kashmir was again raised by many decibels for obvious domestic political reasons, even while the official Labourstandpoint tended to be more sober. The manifesto of the Labour Party released by Tony Blair in June 1996 asserted that a Labour government in Britainwould more actively mediate to facilitate a solution to the conflict in Kashmir and claimed that a Labour Britain "would be well-placed to help facilitatethe Indian and Pakistani Governments to find a solution to the conflict in Kashmir, which would have to be acceptable to all the people of the region—Muslims,Hindus and Buddhists."51A Labour Party delegation led by the shadow foreign secretary Robin Cook and including the well-known NRI industrialist, Lord Swaraj Paul, came to Indiaend October on what might be called a familiarization four-day visit, followed by a trip to Pakistan (but without Swaraj Paul). Robin Cook's response wasmore positive than that of the critics of India in the Labour Party, but the Party was still speaking with many voices, no doubt largely influenced byelectoral considerations. Speaking at a meeting of the Kashmiri separatists in Halifax in Yorkshire, the Party spokesman on foreign affairs, Derek Fatchettdeclared that his party wanted self-determination for Kashmir and would "press for a settlement before the 50th anniversary of those resolutions" (duein 1998). He also ridiculed India's quest for a permanent seat in the Security Council with the dimissive remarks, "The world will tell her to clear themess in her own backyard before we can take her seriously."52 What politicians can do or say in order to win an election is well known.As was expected Labour was swept to power in May 1997 and the first indication given by its Foreign Secretary (foreign minister in other countries) wasthat of an activist foreign policy, with considerable attention to human rights and339environment, but outlining the priorities of his government's foreign policy, he made no reference to India, Pakistan or Kashmir.53Remarkably also, the new Prime Minister Tony Blair put a virtual cap on statements on Kashmir, and the Labour government has been very discreet on the conflictualsituation in the subcontinent. Yet many of the ambiguities of Labour's approach to the subcontinent remain and there is no knowing when they might againcome to the fore. If some of the fears entertained in India over Labour policy turn out to be unfounded, then the growing economic and commercial tiesbetween India and the United Kingdom could well continue to develop and forge ahead. But if driven by electoral politics, Labour leaders try to meddlein Indian affairs, it would not only negatively affect their political relations but also impede the development of other relations.INDIA AND GERMANYAs we have noted earlier, India made sustained effort in the nineties to reach out to Europe, and more particularly to UK, Germany and France. Germany wasimportant to India as a trading partner, as a supplier of technology, as a central state within the fast-emerging European Economic Community and now developinginto the European Union.Germany and India shared fundamental political beliefs of democracy and rule of law, even though there were differences of perception about nuclear non-proliferationand human rights and a slightly contentious issue of intellectual property rights and complaints about bureaucratic delays, despite the economic reformpolicy being pursued by the Indian government. Nevertheless, India's economic reforms had elicited a great deal of interest both in the German officialand business world.Among the first countries that Prime Minister Narasimha Rao headed for in Europe was Germany. Germany was the second largest official donor of concessionalassistance to India. Trade with Germany had been rising and stood at a healthy DM5 billion by the turn of the eighties as against DM2 billion at its beginning.It stood fourth in the destination for Indian exports, and first among the EEC countries. Even the heavy deficit in India's trade with Bonn had come downby 32 per cent by 1990.54 But there were certain disquieting aspects too. Indian goods were still not competitive enough, troubled by low technology, lowvalue-added and high cost of industrial raw materials.Rao received a very cooperative welcome from the German government, with a DM400 million pledge of concessional aid for the current year 1991-92 (almostthe same as for the previous year) and a categorical statement from Chancellor Helmut Kohl that his country would "remain fully committed to our developmentcooperation with India" despite its heavy commitments elsewhere (in what was East Germany earlier in particular). Most of this assistance was for340the fast disbursement track. Kohl praised India's efforts at the modernization of its economy and Rao took the opportunity to explain to the governmentleaders as well as to German businessmen India's policies of reform and deregulation.''5 One concrate result was the establishment of an Indo-German ConsultativeGroup. While on his way back, Rao told newsmen that he expected Germany to be more forthcoming in economic cooperation with India as a result of his visit.56Soon afterwards the Indo-German joint commission, attended by the German Minister for Economic Affairs, Jurgen Moelleman, met in New Delhi and the jointstatement spoke of the German appreciation of the need to accelerate the flow of capital and investment from the developed countries to India. The Germandelegation reiterated its country's commitment to support India bilaterally as well as in the international fora in India's efforts to revitalize its economy.Of course between good intentions and their implementation there was still considerable distance. Germany was feeling the pinch of its own constraints,the slowdown in the economy and the outflow of funds for the rehabilitation of the eastern half.Nevertheless Germany continued to be a major economic partner of India. German bilateral aid to India had substantially increased in 1991, "reaching anall-time record of Rs 734 crore".57 Bonn's bilateral aid in 1992 was now stated to be of the order of Rs 943 crore in addition to Rs 575 crore being committedthrough multilateral institutions like the World Bank, IDA, Asian Development Bank, UN bodies and the European Community.58Chancellor Helmut Kohl was the recipient of the 1990 Jawaharlal Nehru Award for International Understanding which he came to receive in February 1993, thevisit scheduled for 1992 having had to be postponed because of the pressing domestic problems. Kohl donated the award money to a non-official project ofIndo-German cooperation—the Health Care Centre in Howrah. The visit provided a significant opportunity for deepening the economic cooperation between thetwo countries.As such there were hardly any troublesome political problems between India and Germany. There were necessarily some differences of perception on some globalissues, but not of a kind to have any direct bearing on their ties. Chief of these perceptional differences related to the issue of the NPT. Bonn supportedit and Kohl again urged India to sign it which would, he said, help future Indo-German cooperation. However, as he himself made it clear at a press conferencesubsequently, India's opposition to the NPT would have no impact on Indo-German relations. The issue, in his view, could have different dimensions in oneregion than in another and he had every reason to respect India's views. Nevertheless efforts needed to be made to eliminate New Delhi's reservations.59Germany was also not prepossessed with the India-Pakistan syndrome and showed no intention of equating the two. Kohl made it apparent that the German standpointwould be to whole-heartedly support the efforts to peacefully341overcome the "antagonism" in Indo-Pak relations. The thrust of the German approach to India was centred on economic cooperation as was evident from thelarge business delegation that he brought with him. The German industrialists, Kohl suggested to his Indian hosts, would on their return prepare a summaryof what they considered to be specific priorities which needed to be acted upon in a ten-month period. The achievements under the list of priorities neededto be monitored to ensure implementation.60Addressing a joint meeting of the Indian and German businessmen the German Chancellor held out the promise of deepening Indo-German economic ties. He haddrawn up an agenda with Prime Minister Narasimha Rao, he said, for dealing with the problem areas between the two countries during the next twelve monthsand a review would be made at the end of which the Indian Prime Minister would be visiting Germany. He mentioned red-tapism (bureaucratic hurdles in otherwords) as an obstacle to be removed.61As Kohl had mentioned during his visit Narasimha Rao did go to Germany a year later in this ongoing process of strengthening Indo-German cooperation. Thevisit, his second in three years, took place in the context of a new Asia policy adopted by the German government. The seventeen-page document, "Concepton Asia" pointed to the Asia-Pacific region for excellent prospects in the twenty-first century and affirmed that an active policy towards Asia and thePacific would be in the political and economic interests of Germany. It mentioned China, Japan and India as major political powers of the region, foreseeinga similar status for Indonesia and Korea in the near future, and pinpointing Asean as the best functioning regional organization. India was also mentionedamong the countries which could be among Germany's "foremost partners" in the future.Narasimha Rao extended India's full support to the new Asia policy of the German government and Kohl responded by affirming that India with its politicalstability would be a "focus" for Germany. The two leaders agreed to have a continuous political dialogue and sort out all legal and procedural difficultiescoining in the way of a closer bilateral economic relationship. They acknowledged that a double taxation avoidance agreement and an extradition treatywould be major steps towards realization of the Asia policy concept. They also agreed on the establishment of a high-level Indo-German commission for scienceand technology.62With all the bonhomie, there were a number of issues that had to be addressed. In Germany the concern with issues like human rights, environmental degradationand child labour had risen enormously. They became public issues as elections were due both for parliament and provincial assemblies. The ruling partycould not ignore them and had to be seen as equally concerned as the opposition. This does not mean that it was not genuine in its concern but a rulingparty necessarily had to be more responsible in its responses.342At a breakfast meeting with the Indian Prime Minister, the Vice-Chancellor and Foreign Minister, Dr Rlans Kinkel, raised the issue of human rights in Kashmir.He was believed to have told Rao that in doing so he was not pointing an accusing finger against India. Rao gave him a briefing on the Kashmir situation,pointing to the strident statements of Benazir Bhutto, and the terrorism exported from the neighbouring country, and expressed his willingness to put asidethe contentious issues for the time being and move forward towards cooperation in other areas as India had done with China.India needed Germany's help in the UN Human Rights Commission where Pakistan was poised for a major attack on India.It was significant that Bonn did not raise the issue of the NPT during the Indian Prime Minister's visit, but there were a number of other issues that neededattention. Kinkel requested Rao for further expansion of Lufthansa airline services to India and permission for a direct Lufthansa flight to Madras. Raopromised to look into the request. Moreover the German industry had prepared a memorandum after Kohl's visit that was sent by the German Chancellor tothe Indian Prime Minister. Kohl confirmed that the Indian reply had been received and that it was being examined by the relevant associations of Germanindustry.63Some of the demands made by German industry appeared to be rather unreasonable. They wanted changes in the Industrial Disputes Act and faster introductionof product patents, both of which had larger implications and could not be amended in an ad hoc manner to suit the interests of individual investors. Theyalso invoked the environment issue in demanding certain norms for certain packaging and raw material content.On the heels of Narasimha Rao's visit, India and Germany signed a financial cooperation protocol by which Bonn undertook to provide concessional loans andgrants totalling Rs 760 crore (DM380 million) for a number of projects and programmes, including Rourkela modernization, expansion of the Neyveli lignitemining project, promotion of rural small-scale business, purchase of fertilizers from Germany, and co-financing of a financial sector-related adjustmentprogramme. The programmes to be financed by grants included a primary health project in Maharashtra, a social marketing programme, a low-cost housing programmefor lower income groups and a rural water expansion programme in Rajasthan.64The aid package of DM380 million comprised a concessional loan component of DM230 million and the rest was in the form of grants. The loans carried an interestrate of 0.75 per cent per annum, repayable over forty years with a grace period of ten years and were earmarked for specific projects. The visiting GermanEconomic Cooperation Minister, CD. Spranger explained the enhanced importance of India in Germany's new Asia policy concept. He had brought with343him a large number of distinguished journalists to explain to the German people the purpose of development cooperation with India.65The aid was later set at Rs 920 crore (DM460 million), of which a little less than Rs 500 crore constituted a soft loan, when Kinkel visited India in July1994 accompanied by twenty-two top German businessmen. The German Foreign Minister spoke of the "increasing economic interlinking" between the two countries.He reiterated that German foreign policy was giving "major attention" to India because of the significant role that could be played by the latter in theAsia-Pacific region. The (by now) sixteen-nation European Union, of which Germany was the current president, had also been asked to accord a similar treatmentto India. Although Indian exports to Germany had increased by 22 per cent in 1993 there was enormous potential to augment it, he added.Responding to questions on the Kashmir issue, Germany was strongly opposed, he said, to outside mediation for resolving the issue and supported a solutionthrough a dialogue between India and Pakistan without internationalizing the matter. Tension between India and Pakistan was a cause of worry to the worldcommunity and Germany wished to see the resumption of the Indo-Pak dialogue and the acceleration of the conciliation process.66Using the opportunity of the Kinkel visit India conveyed to the German side its concern over Pakistan's acquisition of nuclear technology and materialsclandestinely from Germany for its nuclear bomb programme. Pakistan had been able to reach nuclear-weapon capability after acquiring technology and componentsfrom several countries, including Germany. The German side clarified that it was conscious of the matter and strongly disapproved of such private dealsand that the government had taken strong action against the German firms involved in such illegal transfer of materials and technology to Pakistan.67For his part Kinkel urged India to help resolve the problem of some 10,000 Indian illegal immigrants in Germany who were refusing to leave. The German sidealso suggested an investment promotion agreement and a revised double taxation avoidance agreement to boost investment and cooperation. It was decidedto activate the Indo-German Consultative Group to handle the various economic issues.68 The group was supposed to provide a fast-track route for issuesto be discussed by the heads of government of the two sides.Yet despite all these efforts, the results were mixed. Trade was expanding, Indian exports were going up, but the investments were slow in coming in andthe trade gap still remained wide. From the third largest investor in India, Germany had slid to the tenth position. In 1995 German FDI totalled less thanRs 16 crore. Nevertheless Germany was important both as a trading partner and source of technology and as the heartline of Europe. In 1994-95 India exportedgoods worth Rs 5,488 crore rising to Rs 6,634 crore in 1995-96 - the highest to any country in Europe. Its imports from that country totalled Rs 6,967crore in3441994-95 to over Rs 10,493 crore in 1995-96, again the highest from any European country. Its trade volume with Germany was second only to that with theUnited States. That the efforts to boost economic and political relations continued, despite the differences on the NPT and human rights was evident fromthe visits of the German Defence Minister, Foreign Minister (Kinkel's second visit) and the Economic Minister—all in 1996-97.INDIA AND FRANCEFrance was among the three or four countries of Europe (if we include Luxembourg as the headquarters of the European Community) with whom India made specialefforts to interact economically and politically. The process acquired momentum with the liberalization of the economy embarked upon by the Narasimha Raogovernment, which attracted wide interest in France as in many other European countries. But equally India itself was active in raising the French connectionto a higher level. As Narasimha Rao had remarked, India had had very good relations with France and wanted their further consolidation.As we have noted earlier, Prime Minister Narasimha Rao went to Germany in September 1991 in pursuance of India's efforts to boost relations with Europe,and two months later he paid a two-day visit to Paris on his way to Caracas for a G-15 meeting.Narasimha Rao's objective was to strive for a vastly enhanced economic and political interaction with Paris. France was a key European country and a significantplayer both on the European and the international theatre. France was also a supplier of nuclear fuel for the Tarapur power plant. French investments inIndia and the bilateral trade between the two countries were still rather modest. The joint ventures totalled 353, but their total value was only Rs 435million. The volume of their trade had risen from Rs 1,320 million in 1987 to Rs 1,681 million in 1990, weighted very appreciably in favour of France.Rao addressed the leaders of French industry and business and assured them that there would be no difficulty in enacting the necessary laws to implementthe various reform measures. Inviting French investments in the new congenial environment, he particularly mentioned two areas, solar energy applicationand agro-industries, including food processing. These could be in addition to areas like oil exploration and telecommunications.Rao met the French President Francois Mitterrand and the two leaders agreed that Indo-French economic relations should be upgraded and the ongoing collaborationand joint ventures diversified through transfer of technology in areas like solar energy and agro-based industries. They also shared a common resolve againstoutside interference in internal disputes and called for settlement of all disputes through dialogue without resort to use of force, a clear referenceto Pakistan and the Kashmir issue. The two sides were in complete agreement345that it was not in the interests of the international community's stability that forces based on very narrow considerations were unleashed.69It was reported that there was no discussion on the NPT but on Kashmir Rao explained the problem of militancy supported from outside and emphasized thatthe Kashmir issue should be resolved within the framework of the Simla Agreement.70Narasimha Rao paid a more formal visit to France a year later. To the question of giving a new dimension to Indo-French economic relations was also addedthe question of French cooperation in space research and nuclear energy. Although Rao did not obtain satisfactory responses to some of them, he not onlygot a warm welcome in Paris but so far as economic cooperation was concerned, he had reason to be optimistic.On his arrival in Paris on 28 September he had a session with the French Prime Minister, Pierre Beregovoy, which the Indian Prime Minister described as"immensely satisfying". The two leaders agreed on the need to infuse greater dynamism in the Indo-French relationship, with the Indian Prime Minister stronglypleading for increased French investments and technology flows. They also shared the view that the Indo-French bilateral relations could serve as a usefulforce in global stability. The Prime Minister sought the cooperation of France and other developed countries for assistance in making a success of India'sliberalization drive.71 India had been somewhat surprised, if not dismayed, that the French had not demonstrated the same public effusion about India'seconomic reforms as Bonn and London had done.But the French Prime Minister expressed full appreciation of India's liberalization programme and encouraged expectations of greater economic cooperationand investment of technology and capital. Rao also spoke to his French counterpart about terrorism of which India was a victim, particularly as it wasfanned from a neighbouring country. Paris was opposed to terrorism, but the French Prime Minister's response was guarded. Terrorism was an important problem,he said, and issues such as terrorism, drugs and AIDS needed concerted action by the world community. These issues needed to be discussed further, he said.The French side also explained to Rao the recent developments in Europe and sought to allay fears about the European Community pursuing exclusionist policies.72Speaking at an official function Narasimha Rao gave fulsome praise to French civilization, literature and role in the world. He spoke about the "emotionaland intellectual" ties between India and France. "Our democratic traditions and ideals and commitment to social justice bind us together", he said. Theworld was indebted to France, he added, for the inspiring ideas of its thinkers and the enormous contribution it had made to art, literature "and to everythingthat adds joy and beauty to life". The French ingenuity and progress in the fields of science, technology and industry represented an inspiring346example for a country like India in its economic and scientific advancement, he said. And then more frankly to his French hosts, "If I open up and liberalizemy economy, I expect mutually beneficial investments and even more so, a humanizing understanding of developing societies and their challenging and excitingtasks. ... This is my definition of a real North-South dialogue with a completely human face." 73Rao was pitching an appeal for shared values, including an independent foreign policy pursued by both countries in their own ways for an enhanced relationship.So far as generalities were concerned, Rao had reason to be satisfied with his subsequent meeting with the French President, Francois Mitterrand. The FrenchPresident assured the Indian Prime Minister that definite steps would be taken at the government and political level to give an impetus to Indo-Frencheconomic cooperation. He also assured India that France had no intention of building Europe into a fortress that would not allow others to share its prosperityand promised that France would be particularly receptive to the concerns of developing countries like India. Indicating the propinquity of views betweenFrance and India on many issues, the two leaders agreed that any unipolarity in the global power structure would not be conducive to stability. They alsobelieved that there should be wide deliberation, including that between France and India, on the reform of the United Nations system.74The growing ties were evident from the decision to step up ministerial level contacts in a big way. Four senior French ministers set up schedules to visitIndia in the coming six months, including Minister for Space Research, Defence Minister, Foreign Minister and Minister for Industry and Foreign Trade.But there was no denying that there were certain important differences in their viewpoints, primarily relating to nuclear power and space research cooperation.Although, according to the official Indian briefing, the subject of the NPT and the supply of nuclear fuel for the Tarapur power plant were not discussed,Paris gave sufficient indication that future cooperation in the nuclear power and space research programme would be contingent on India's adherence tothe Missile Technplogy Control Regime (MTCR) and the NPT. It should have been clear to India that eventually it would have to be self-reliant if it wantedto stick to its position on these issues.On the economic and political front, however, the Prime Minister's visit strengthened the relationship. Narasimha Rao struck a very positive note on hisvisit on his return to New Delhi and revealed that India and France would soon hold joint discussions on combating the menace of terrorism. This was anarea where the views of the two countries converged, Rao said. The French were "very, very concerned" about terrorism, especially terrorism across theborder, as the Prime Minister put it. On the economic side, Narasimha Rao noted that the agreement for avoidance of double taxation signed during his visitwould go a long way in encouraging French investments in India.75 Whatever the347discussions that took place on the subject of terrorism, it should be clear that any concrete or coordinated response jointly by France and India was hardlypossible or feasible. But French appreciation of concern on terrorism was politically helpful to India.While there was a lot of coming and going, domestic changes were taking place in France. Over the next two years the Socialists had to make way for theConservatives (or the neo-Gaullist Rally of the Republic—RPR), first in the French parliament and then in the Presidency. A key person in the new set-upwas Alain Juppe, first as Foreign Minister 1993-94 and then as Prime Minister when Jacques Chirac became President in 1995. The changeover in Paris wasnot really to the disadvantage of India. Juppe was among the most sympathetic French politicians towards India.In an interview on the eye of his visit to India in April 1994 the then French Foreign Minister told an Indian journalist that he believed that if Indiacontinued to proceed at the pace it was giving it would acquire by the turn of the century a place among the leading economic powers of the world and that"through its political system, human resources, and global economic potential India had certainly the means to bring about a solution to the problems ofpoverty and to come out of her dependency".As for human rights, of course Franace was attached to a universal view of human rights. Everyone knows, he said, that the legal institutions of India madeit a secular, democratic republic, based on universal suffrage wherein human rights were explicitly recognized. India was a party to almost all the UnitedNations conventions signed in this regard. There could be human rights violations, he said, because of specific socio-economic reasons but these were reportedin the Indian press which was completely free. The conception of liberty and rights was common to both France and India. He welcomed the formation of theNational Commission on Human Rights as well as the policy of "transparency" pursued by the Indian government, partucularly in Kashmir.To a specific question on Kashmir, the then French Foreign Minister (subsequently Prime Minister) said that France was very concerned about the violencethere but the consistent French position was that the conflict should be settled directly through a dialogue between India and Pakistan. "I do not thinkthat the internationalization of this conflict would be a good thing since it would result in other powers interfering in the regional problems", he said.As regards Indo-French economic relations, he agreed that they were not up to the expectations, but he did not take a gloomy view. France was the eighthbiggest supplier to India—a position better than it had in the Chinese and Japanese markets. India had been one of the major beneficiaries of the Frenchbilateral assistance—some 800 million francs per year for the past twelve years in mixed credits to India. India had become one of the leading customersof the French civil and military aeronautical industry with a fleet of 40 Airbuses and 49348Mirage 2000s. There was also sectoral cooperation in the fields of coal, mining, telecommunications as well as in the area of water management, Juppe toldhis interviewer.76He expressed similar views during his visit to India. He reiterated the French opposition to the internationalization of the Kashmir issue and support toa bilateral approach under the Simla Agreement. He also averred that France condemned terrorism and violence in any shape or form and agreed with NarasimhaRao that there should be no outside interference in India's internal affairs. It was also decided during his visit to set up a France-India forum, witheconomists, intellectuals and political personalities of both countries as members with a flexible agenda, as well as to reactivate the ministerial-levelIndo-French joint commission.77Yet the results so far were hardly commensurate with the efforts that had been made through high-level visits from both sides, more especially from theIndian side. As the External Affairs Minister at the time, Pranab Mukherjee, who also was in Paris in early April 1995 on a mission to "hardsell" India,as it was then described, acknowledged, despite all the high-level visits, investments had not climbed up as expected. Between 1991 and the end of 1994French direct investment approvals doubled over the eighties to $75 million (Rs 235 crore). The actual investments were, however, considerably lower. TheFrench position in the approvals for investment had declined to the fifteenth globally and the fifth among the European countries. Trying to allay thefears about the slowdown in the reform process during 1994-95 and about political stability in the country, Pranab Mukherjee told a gathering of Frenchindustrialists and political leaders that there was a national consensus on economic reforms and the question of whether the Congress remained in powershould not make any difference.78Meanwhile, efforts continued to boost the economic relationship between the two countries. In a significant step forward, an Indo-French task force wasset up by Club "I" of Paris, the most powerful business body of France with sixty top enterprises, the Federation of Indian Chambers of Commerce and Industry(FICCI) and the Indo-French Chamber of Commerce and Industry, to facilitate trade and investment between the two countries. The agreement, signed in NewDelhi on 2 June, was designed to provide a strong fillip to Indo-French economic relations. The Chairman of Club "I" said on the occasion that the lackof information between Indian and French companies was one of the major reasons for the slide down in the economic cooperation between the two countries.The task force would plug the loopholes and endeavour to disseminate business information and facilitate exchange of delegations.79The Indian Prime Minister was in Paris again on 11 June on a two-day official visit, his third since assuming office, and was accompanied by Indian businessdelegations representing FICCI, ASSOCHAM and CII. France had had a new President a month earlier, Jacques Chirac, heading the Conservative349new-Gaulist Rally of the People, and Alain Juppe had become Prime Minister. French business was concerned about the uncertainties of the Indian market andof the Enron power deal which had become the subject of acrimonious controversy with the change of government in Maharashtra. And Narasimha Rao's firstbusiness in Paris was to speak to the French industrialists and to disabuse them of their apprehensions about the continuity of economic reforms, and evenabout the Enron power project agreement, which he said was being reviewed by the Maharashtra government and that they need not prejudge the result of thereview.80 While asserting that the reforms process was irreversible, he invited French industry to participate in a big way in the quiet economic revolutiontaking place in India.81President Chirac gave an overview of developments in Europe, Russia and Central Asia while listening to Narasimha Rao's assessment of the situation in SouthAsia, including Sri Lanka, India's economic development, and its relations with neighbours, like China and Pakistan. Rao told the French President thatEurope was the largest customer of India and should remain open to India and other developing countries.His talks with his counterpart Alain Juppe also went off well. The two leaders extended their support to the Indo-French Forum that had been recently established.They also decided that the Finance Ministers of the two countries would meet soon to sort out financial problems to help accelerate French investmentsand to sign a new financial protocol. They also agreed on the intensification of political discussions at various levels and stressed the need for developingIndo-French relations to their full potential.As we have seen earlier, there was no difference of opinion on how the Kashmir issue should be resolved. Juppe was entirely supportive of resolving it throughbilateral talks between India and Pakistan under the Simla Agreement and he was appreciative of the policy of transparency and accessibility to Kashmirthat India had adopted and of its permission to a European Union delegation to visit Kashmir to see things for itself.82The only perceptional difference was on the NPT. France wanted India to sign the NPT while India reiterated its opposition to an invidiously discriminatorytreaty. In any case, the French Premier could not have sounded very convincing about non-proliferation as the French President had just announced the decisionto conduct eight nuclear tests in the South Pacific.Meanwhile, the French domestic scene itself became volatile even before the year 1996 was over. Juppe's economic reforms programme, particularly his planof action to cut the budget deficit from 4.2 per cent of GDP in 1996 to 3 per cent by the end of 1997 to qualify for the European Monetary Union plannedfor 1999, involved social pain which the French people seemed unwilling to endure. Chirac gambled and lost on fresh elections in June 1997 way ahead ofschedule for the National Assembly, and the way was paved for the return of dual350authority in French polity, with a Conservative President and a Socialist Premier (Lionel Jospin) of a Socialist-Communist coalition in the National Assembly.The new government in Paris is still struggling with the domestic problems in their European context—how to meet the new requirements of the European Unionwithout hurting the social securities enjoyed by the French people and while reducing unemployment (over 12 per cent currently) and creating more jobs.It would need considerable push at the top to rejuvenate the Indo-French political dialogue at the highest levels.INDIA AND THE EUROPEAN COMMUNITYNow we can take an overview of India and the European Community, or rather now the European Union (EU). As we remarked at the beginning the economic importanceof the European Union cannot be underestimated either for the world or for India. Both in terms of trade and investments as well as in terms of sourcesof technology transfer the relationship with Europe needed to be bolstered. This was so in the context of the traditional relationships, but no less inthat of the present realities. If the plans to launch a single European currency fructify according to schedule (even if a few members join the singlecurrency market subsequently), the importance of the European Union would become even more crucial.The fears of India and other developing countries about an exclusionist Europe have been referred to earlier. Indeed already two-thirds of the EuropeanUnion's trade was intra-European, within the European Union itself. However, the one-third that was left was still very sizeable, nearly ECU (Europeancurrency unit) 545 billion (1995 figures) (one ECU=$1.17). India had a long-time traditional, strong trade relationship with many members of the EuropeanUnion, like the United Kingdom, Germany, Belgium and Luxembourg, France, Italy and the Netherlands, but also with many others like Sweden and Denmark.The European Union as at the time of writing comprised Austria, Belgium, Luxembourg, France, Germany, Finland, Greece, Spain, Portugal, UK, Ireland, Italy,Sweden, the Netherlands and Denmark.India-EU trade, if we also take into account the new members, Austria, Sweden and Finland, jumped up by over 72 per cent from ECU 9.97 billion to ECU 17.218billion. India's position among the supplier countries improved from twenty-fifth in 1990 to seventeenth in 1995, and its share in the EU market from 0.98per cent to 1.43 per cent. Of course India lagged very considerably behind USA, Japan, Switzerland and China and even somewhat behind Taiwan, South Koreaand Malaysia.India had a negative trade balance with the EU, which deteriorated from ECU 140 million in 1994 to 679 million in 1995. Only with the United Kingdom, ofits major European trade partners, did it enjoy a surplus, but there were351sizeable adverse balances with Germany, France, Belgium and Luxembourg, and Italy. India's trade with the European Union was still largely in the traditionalfields, jute products (40.76 per cent), carpets (23.26 per cent), granites (22.48 per cent), leather (13.03 per cent), gems and jewellery (7 per cent),textiles and garments (5.94 per cent) and marine products (3.47 per cent). Although the export of engineering and electronic goods was picking up theystill constituted only 0.58 and 0.18 per cent respectively.The European Union is also an important source of investments and technology, even though the potential of this source has not been fully exploited in India,or even in Asia in general. Out of the three major centres for foreign direct investments (FDI), Japan's contribution in Asia is 12 per cent, USA's a littleless than 11 per cent and the EU's a meagre 2.2 per cent.The foreign direct investments of the EU-15 between 1991-95 totalled some Rs 11,000 crore as against Rs 15,421 crore of the United States, Rs 2,835 croreof Japan and over Rs 2,702 crore of the NRIs. It was also estimated that the total EU investments for the first eight months of 1996 came to about Rs 4,769crore, while those of USA were valued at Rs 7,975 crore, of Japan at Rs 770 crore and of the NRIs at Rs 1,332 crore.83 The lion's share of the EU FDIscame from UK, Germany and France and the Netherlands. The positive aspect of it was that the approvals for European investments were showing a rapid increase,constituting nearly 40 per cent of the total approvals of foreign investments in 1995-96.While concluding we may also note that the European Union had also been making efforts in the past five years to upgrade relations with India. A ministerialtroika (a group of ministers from three member countries) had been formed by the European Community to interact with India on both economic and some politicalissues. The European Community had made this arrangement for a few select countries of the world. The EC delegation which met the Indian representativesfor the annual Indo-EEC consultations in Brussels (the headquarters of the European Community) in March 1990 decided with the Indians to create a new forumto enable the Indian government and the business community to come together for continuing a dialogue on the new opportunities and changes taking placein the Community and in Eastern Europe.84 The Indian delegation was led by the then External Affairs Minister I.K. Gujral (now Prime Minister at the timeof writing).Politically too Indian and EC perceptions kept coming closer over the years. In November 1991 the EC asked Pakistan to take effective steps to prevent anyviolent interference in Kashmir from the territory under its control. Urging India and Pakistan not to take any action that might add to the tensions inthe region, it said that the terrorist violence must be resisted, but at the same time Indian security forces must "respect law".85 The EC's perceptionabout terrorism was strengthened with the gradual appreciation of the Indian decision to adopt a352policy of increasing transparency and accessibility as well as the restoration of the democratic processes in Kashmir.The European Union came into being in December 1992 and showed continuing interest in fostering relations with India. India and the EU signed a new agreementin March 1994 on "partnership and development" designed to promote a much closer relationship between themselves. New Delhi hailed it as a landmark agreement.So far only Brazil and Mexico had a similar agreement with the EU. The two sides issued a joint statement on political dialogue, affirming their resolveto reinforce and intensify their mutual relations in political, economic, technological and cultural fields. They also committed themselves to the establishmentof lasting links of solidarity and new forms of cooperation.These dialogues and the efforts to further develop economic and political relations continued. In March 1995 the first Vice-President of the EU, ManuelMarin visited India and extended an invitation from the EU for a high-level political dialogue in early April in Paris during the meeting of the EuropeanCommission "troika", comprising the then president from France, the immediate past president from Germany and the incoming president from Spain. This meetingwith the highest decision-making body of the EU was the first of its kind that the "troika" was holding with any country. The Paris talks involved mattersconcerning peace, security and regional and global developments. India's demand for a permanent seat on the Security Council was also on the anvil, althoughthe EU wanted to "go about it slowly". The motivation for the dialogue was the EU perception that, as Marin put it, "India has a unique position in Asiain the global context warranting the upgrading of the political ties."87It was also made clear that the European Union had no intention of projecting itself in a mediatory role in Kashmir which, in its view, had to be resolvedbilaterally by India and Pakistan. The troika talks, held on 6 April, were led on the Indian side by Pranab Mukherjee, External Affairs Minister at thetime. Alain Juppe, then French Foreign Minister, represented the Presidency of the EU. The talks covered mostly political issues, although the economicissues were also touched upon.Another context in which the dialogue was being held was the forthcoming EU-Asian summit, the "Asian" component being Asean plus China, South Korea andJapan, but from which India was being excluded. Perhaps the EU realized that a summit with Asia without India was somewhat incomplete and was thus holdingits own political deliberations with India.In any case an annual dialogue with India became an established precedent, with the ninth round held on 9 March 1996. There were also other initiativestaken to give a push to relations with India. A European business information centre had been established in Bombay on 1 January 1995. A major India-EUinvestment forum was organized in November 1996 with the participation of353nearly forty businessmen and decision-makers from Europe and India and an Economic Cross Cultural Exchange Agreement was signed in November 1996. To capit all, an India-Europe Partenariat is envisaged for early 1998.A year later (in September 1997) the European Union announced a grant assistance of ECU 200 million (Rs 788.6 crore) to help overhaul India's family healthcare system—ECU's largest-ever programme in Asia. Simultaneously it was agreed at the annual EU-India Ministerial Troika meeting to create an EU-Indiaexperts group that would examine how their relations could be deepened and to hold regular senior officials' meetings for better-prepared Ministerial Troikameetings.88 The Vice-President of the European Commission, Manuel Marin told a press conference at Brussels that the EU was now the largest trading partnerand the biggest source of investments actually implemented in India. However, he believed that their "geopolitical dialogue" had been "much weaker" inthe past and he was confident that now "a clear road plan" had been established for "reinforcing this geopolitical dialogue.89Although India has not really yet muscled into the European market or as yet successfully tapped its large pool of technology and surplus capital, therecould be no doubt that India had to persist with greater determination to engage the EU both economically and politically. There are other developmentstaking place within the EU which can only enhance its importance in world affairs. On 1 January 1999 at least eleven countries would form a European MonetaryUnion with 277 million people and a GDP of $5.4 trillion, and gradually other countries of Europe would also join. India must keep developing its relationswith this powerhouse. The European Union's reactions to the nuclear tests of India have been touched upon in the last chapter, conclusions.NOTES1. Times of India, 24 February 1989.2. The Statesma n , 30 April 1990.3. Indian Express, 30 April 1990.4. The Hindu, 20 June 1990.5. Hindustan Times, 26 April 1991.6. Ibid.7. Times of India, 14 June 1991.8. Tapan Das Gupta in Times of India, 7 August 1991.9. The Hindu, 21 September 1991.10. The Statesman, 21 January 1992.11. Indian Express, 22 January 1992.12. The Hindu, 29 January 1992.13. Times of India, 30 January 1992.14. Hindustan Times, 30 January 1992.15. Times of India, 23 June 1992.16. Hindustan Times, 24 June 1992.17. Times of India, 25 June 1992.35418. Ibid.19. Hindustan Times, 24 and 27 June 1992.20. The Hindu, 8 December 1993.21. Times of India, 10 November 1994.22. Economic Times, 4 June 1995.23. Times of India, 3 February 1995.24. Economic Times, 26 November 1996.25. From author's own sources.26. See Hindustan Times, 8 December 1993 and The Hindu, 4 January 1997.27. Economic Times, 7 April 1995.28. Ministry of Commerce, Government of India, Annual Report, 1993-94 and 1995-96.29. PTI from Tokyo, Hindustan Times, 29 October 1996.30. Lester Thurow, Head to Head—The Coming Economic Battle among Japan, Europe and America, Warner Books, USA, 1993, p. 245.31. Atul Sarma, Gerrit Falur and Pradeep Kumar Mehta, Meeting the Challenge of the European Union, Sage Publications, New Delhi, 1997, pp. 71-2.32. Times of India, 5 April 1990.33. The outgoing British High Commissioner, Sir David Goodall's interview, ibid., 21 September 1991.34. Hindustan Times, 1 December 1991.35. The Hindu, 4 January 1992.36. Indian Express, 17 January 1992.37. Hindustan Times, 5 April 1992.38. The Statesman, 26 January 1993.39. Ibid.40. Hindustan Times, 27 and 28 January 1993.41. Ibid., 4 February 1993.42. Ibid., 21 July 1993.43. Times of India, 23 July 1993.44. Hindustan Times, 1 August 1993.45. The Hindu, 17 November 1993.46. Times of India, 11 December 1993.47. The Hindu, 13 March 1994.48. Vijay Dutt in Hindustan Times, 15 March 1994.49. See for instance, Hindustan Times, 5 October 1991 and Times of India, 8 and 10 April 1992.50. See Hindustan Times, 16 May 1994.51. Ibid., 1 August 1996.52. Ibid., 24 December 1996.53. Ibid., 5 May 1997.54. See K.B.Lall, H.S. Chopra and Thomas Meyer (eds.) India, Germany and the European Community, Radiant Publishers, New Delhi, 1993, pp. 107-9.55. The Hindu, 7 September 1991.56. Indian Express, 9 September 1991.57. German Ambassador at the time Dr Hans-Georg Wieck's statement at a press conference, The Hindu, 2 October 1992.58. Ibid.35559. Indian Express, 23 February 1993.60. Times of India and Hindustan Times, 20 February 1993.61. The Statesman, 21 February 1993.62. The Hindu, 4 February 1994.63. Times of India, 4 February 1994.64. Ibid., 15 February 1994.65. Ibid.66. Economic Times, 30 July 1994.67. Hindustan Times, 4 August 1994.68. Ibid.69. The Hindu, 11 November 1991.70. Hindustan Times, 28 November 1991.71. Ibid., 29 September 1992.72. Times of India, 29 September 1992.73. The Hindu, 30 September 1992.74. Indian Express, 1 October 1992.75. Times of India, 2 October 1992.76. Interview with Ramesh Chandran, Times of India, 4 April 1994.77. Hindustan Times, 5 April 1994.78. Economic Times, 7 and 12 April 1995.79. Hindustan Times, 3 June 1995.80. The Enron deal was in fact kept intact subsequently by the Maharashtra government.81. Indian Express, 13 June 1995.82. The Hindu, 15 June 1995.83. Source: Ministry of Industry, Government of India.84. Hindustan Times, 9 March 1990.85. Times of India, 22 November 1991.86. The Hindu, 21 December 1994.87. Times of India, 28 March 1995.88. Delegation of the European Commission in India Information Service, Brussels, 3 September 1997.89. Ibid.356Chapter 11 ConclusionsSECURITY AND FOREIGN POLICYA country's foreign policy is principally and critically concerned with security. Its primary function is to enhance the country's security. Security connotbe trifled with by any nation. But it is not easy to define security, much less to ensure it. It is a tricky proposition, for just as one man's marinacan be another's poison, one country's security could well be seen as the insecurity of another country.A comprehensive concept of security would include a country's cohesion, emotional integration, well-being, domestic peace and development, and not a narrowlyconceived power quantum in military and strategic terms at its disposal. This would be the correct understanding of the real security situation of a country.However, for purposes of a study confined to international relations, it necessarily has to focus on the external security environment, "threat" perceptionsand the options available to the country to meet the challenges and to foster an environment of peace around its borders.The security requirements of the country have to contend with the international security perceptions of the big powers, chiefly of the United States, asthe remaining global power in the world today, and its Western allies. As we noted earlier, for the U.S. and its Western allies the threats to internationalsecurity emanated principally from "instability and uncertainty", from the proliferation of weapons of mass destruction (WMD) as well as from ethnic strifesin different parts of the world, be they in Bosnia, Rwanda and Burundi or Somalia. To these are added the threat perceptions from Islamic fundamentalismand nuclear proliferation along with terrorism and drug trafficking. These threats are often put down in colourful terms as coming from "rogue" states,like Iran, Iraq, and, sometimes, Libya. Washington also remains concerned about another lurking threat : another state emerging so powerful as to becomeregionally dominant or to pose a challenge to U.S. hegemony in the world.357Not always do the security perceptions of India coincide with those of the United States; often they diverge sharply. In any case, the international securityscenario remains murky, with no visible enemy alliances or formations, but with the necessity to justify continuing massive military expenditures and state-of-theart readiness by pointing the finger at shifting threats, menacing voices from the dark and the need to maintain world peace and order without losing Americancapability to keep it under control.The world has not yet left behind conflicts over territory, resources or what states might regard as an unacceptable transgression of their national interestsor over the search for wealth and military security. The domestic balance of forces can be a major security issue in certain situations; nor can one denythat ruling ideas in a country (democracy, human rights, and social justice) can constitute a powerful factor in dealing with security problems of a countryor of the world in general. Similarly, economic influence and dominance form an integral part of the security mosaic now. Undoubtedly also, many partsof the globe are convulsed by ethnic conflicts. Even more than inter-state wars, intra-state conflicts are threatening peace and the people across thecontinents. Yet the concept of ethnicity has become a much abused concept. It is being employed indiscriminately to include quarrels that are far removedfrom ethnic differences. The West is using the concept as an omnibus category to embrace virtually every regional quarrel.President Clinton's description of ethnic conflicts raging in the world from the "Caucasus to Kashmir" (in his address to the UN) was a case in point. TheIndia-Pakistan quarrel is not an ethnic conflict. The Hindu-Muslim problem in India is not an ethnic issue. The trouble in Kashmir is not related to ethnicity,for the people involved in these explosive issues do not belong to different "ethnic" groups. Religion and ethnicity should not be confused with each other.India's security dilemmas arise not from ethnic eruptions but from international pressures and regional rivalries overlaid by the long shadow of nuclearweapons around its borders. For long years India had to contend with two hostile neighbours. India fought three wars with Pakistan and one on the borderwith China. The conflict with Pakistan could have been managed rather less painfully and India would have had a more normal relationship with Pakistanbut for the latter's involvement in the game of international politics. Despite India staying away from power blocs, the cold war took its toll as faras India's security problems were concerned.First the United States propped up Pakistan with the infusion of arms aid on a generous scale in the fifties. When that source appeared to taper off somewhat,China stepped in and provided arms aid to Pakistan almost free of cost. Infact China gave far greater critical assistance to Pakistan than the U.S. Islamabad'slosses in military hardware both in the 1965 and the 1971 wars with India were made good by China. More ominously for India, Beijing also extended critical358assistance to Pakistan in its quest for nuclear weapons capability and has now made decisive contribution to the development of Islamabad's missile programme.Meanwhile in the eighties U.S. military assistance was resumed as Pakistan became a "frontline state" in the struggle in Afghanistan. Thus a major securityissue has not been Pakistan' s hostility, but the support extended to it by two important power centres in the world.India fought at two fronts for many years. The tension with Pakistan had not ended, the easing of tensions with China was of a recent date. However, Indiamanaged to achieve a measure of tranquility on its northern borders and India and China were engaged in building confidence and understanding each otherbetter. This in no way implied any real dilution of China's relationship with Pakistan, but the logic of normalization of relations with India determinedthat China pursue its commitment to Islamabad less obstrusively, more subtly and with greater sophistication. The various confidence-building measurestaken by India and China at the northern borders allowed greater flexibility to India's external policies.THE NUCLEAR DILEMMAThe most excruciating dilemma of India's security relates to the nuclear issue. There are nuclear weapons, or the capability to produce them, all aroundthe vicinity of India. Infact India is sorrounded with nuclear weapons, There are nuclear weapons in China (and nuclear bases in Tibet). There are nuclearweapons in Kazakhstan and Ukraine and, of course, in Russia. U.S. ships carrying nuclear weapons cruise the seas around India regularly and Diego Garciaremains a major nuclear base of the United States. And then there is at the very least the nuclear weapons capability of Pakistan, although Nawaz Sharifhad once claimed publicly that Pakistan had actually nuclear weapons on the shelf.1 The central question, however, lay elsewhere.The real dilemma that India had to resolve was to decide what kind of a place it wanted for itself in the international community. Would it be content withremaining in the periphery or would it demand its right to a place at the core of the international political structure? In a way this has been the strugglesince India attained independence. Over the years five countries had declared that they were to be the only nuclear powers in the world. Infact there wereonly four of them who wished to maintain their monopoly, USA, Soviet Union, Britain and France when they conceived the Nuclear Non -Proliferation Treaty(NPT). China denounced and defied the NPT and gatecrashed into the Nuclear club. But having done so, it gradually became a vociferous supporter of theNPT and a five-power monopoly became its official line.359Of the five, only the U.S. was a genuine superpower with global reach and both political and economic clout. Soviet Union was considered a superpower butcollapsed because it could not maintain the reach and confrontational obligations imposed upon a superpower. But Russia as the successor state still hadthe capability to destroy the world with its weapons and had economic potential as well, despite its present precarious economic situation. Britain andFrance were in no position to match either the military power of the United States or Soviet Union but their status in the big power league owed much moreto the European power plays in the 19th and early 20th century and the aftermath of the Second World War. China was far behind the other four in economicterms when it blasted its way into the nuclear powers' league because it had begun the process of acquiring nuclear weapons.The U.S. as the virtual leader of the "Big Five" was willing to accommodate Germany and Japan, not into the nuclear club, but into the big powers' league,,partly, but only partly, to prevent them from going nuclear. Most other countries were placed at various rungs of the periphery. Thus a highly iniquitousworld order had been imposed with one set of obligations and rights, mostly rights, for those who were nuclear states, and mostly obligations for the non-nuclearstates. Even the NPT allowed interaction among the nuclear and the non-nuclear states for advance of human knowledge about peaceful uses of nuclear energy,including transfer of technology-infact even the NPT made this an obligation of the nuclear haves towards the nuclear have-nots. But this was virtuallyoverridden by new control regimes that were set up outside any international legal structure. They had, in fact, no sanction in international law. Theyonly represented the will of a few powers.The will or the willingness to move towards genuine nuclear disarmament was almost totally lacking. START II had not even been ratified by the two big nuclearstates which, in any case, had provided that by the year 2003 both countries (USA and Russia) were to have reduced their strategic warheads to between3000 to 5000, enough with each to destroy the entire world. At present both USA and Russia have some 10,000 warheads each. There is no movement forward- the only concern is with nuclear non-proliferation, not with nuclear disarmament. China had been refusing to come into the nuclear disarmament processuntill the nuclear arsenals of the big powers came down to its own level. All the pleas by India for nuclear disarmament were laughed away as unrealistic.All the pleas of India about its broader security concerns fell on deaf ears. The attempt by some big powers at least was to limit the problem to SouthAsia and disregard the broader security concerns of India. The proposal that China, USA and Russia should become guarantors to ensure good behaviour byIndia and Pakistan was adding insult to injury. The CTBT was the child of the NPT and was designed to perpetuate the discriminatory world order. When itwas being drafted, both India and China demurred over a number of clauses. China's360concerns were met and the treaty draft suitabily modified, but India's concerns were just brushed out of hand. India asked for some kind of a time-framefor nuclear disarmament to be mentioned in the CTBT-even a fifty-year time-frame was acceptable to it. But the nuclear powers would have none of it, clearlyconveying the message that they had no intention of accepting nuclear disarmament in the forescable future.So you either attain the economic heights of Germany and Japan (a century of effort) or you have to be a nuclear state to merit participation in the internationalcommunity's decision -making processes otherwise you are consigned to the periphery. That was the kind of international order that would broadly prevailin the world. This the real dilemma before India and this the real struggle India was involved in far the past many years. The capability that India demonstratedin October 1974 with Pokhran-I was ignored because India did not press ahead. It is in this larger context that India's subsequent tests on 11 May 1998have to be viewed, despite the Government's clumsy attempt at assuaging Washington's hackles by trying to portray its decision as one or two country-specific.There were, of course, particular concerns also, and while these remain very relevant to the security situation confronting India, they should not obscureother central factors that provided the cutting edge to India nuclear dilemma. As regards particular geographical concerns these were not related merelyto Pakistan. Pakistan constituted just one component, and not necessarily the most agonizing. We may consider this component first, before we deal withthe broader picture.Undoubtedly Pakistan has been determinedly chasing nuclear capability-indeed, contrary to the assertions of many Western analysts - much before the Pokhranexplosion (or implosion as the Indian scientific community likes to put it) in 1974. Zulfiqar Ali Bhutto has claimed in his last testimony that he wasin charge of the nuclear programme of Pakistan during 1958-1977 and that he sent thousands of young Pakistanis to study abroad in the field of nuclearscience and that he was training them for Pakistan's nuclear programme.2 A former U.S. Secretary of State, Warren Christopher called it Pakistan's "obsession"with the nuclear bomb.3Pakistan acheived nuclear capability sometime in 1987, four years before the U.S. formally acknowledged it. The information sent by a senior official, RichardBarlow, based in Islamabad that "Pakistan had crossed the line" was ignored by the U.S. government and allowed Pakistan to continue with its nuclear programmeand yet receive substantial U.S. military assistance.4 It was only in January 1991 that the U.S. announced the discontinuance, or at last sharp reduction,of its assistance programme to Pakistan.5 As we have already noted in an earlier chapter that Pakistan played the ambiguity card until 1992 when on 7 FebruaryShahryar Khan, then Pakistan's Foreign Secretary, admitted, in what361appeared to be a well-calculated gambit, during an interview with the Washington Post that Pakistan had the capability of assembling "at least one atombomb".6Gradually the admissions became less coy and more explicit. Also for a while the Pakistani establishment, no matter whether it was under Nawaz Sharif orBenazir Bhutto adopted what would be the more acceptable line internationally, that after achieving the capability Pakistan had not gone ahead in its nuclearization.Nawaz Sharif, then Prime Minister (June 1992), asserted that Pakistan had not manufactured a nuclear device.7 General Aslam Beg made the same claim atone time even though contradicting himself at another time. The care-taker Prime Minister Moen Quereshi repeated the claim in September 1993 that Pakistanhad "stopped and capped its nuclear programme after reaching a point'.8 Benazir Bhutto, who had become Prime Minister again by 1994 repeated the assertionthat the nuclear programme had been frozen at the stage of development it was in July 1990, although she held that the decision to cap it was taken bythe Nawaz Sharif government.9 Undoubtedly the chief objective in fudging the Pakistani nucelar capability was to get past the Pressler amendment so thatU.S. aid could be secured again.However, all this talk of the nuclear programme having been capped was debunked by the man who was commonly referred to as the "father" of the Pakistanibomb. Dr.Abdul Qadeer Khan told the Frontier Post in Peshawar in mid-1995 that Pakistan's nuclear programme had neither been capped nor rolled back.10It was going on as before. On the one hand he claimed that it was meant only for peaceful purposes, and yet, on the other hand, he proudly restated itsdeterrent value against India, which, if correct, could only be in terms of nuclear weapons.It is now common knowledge that China gave material assistance to Pakistan in achieving a nuclear - weapons capability. Various official reports of theUnited States either lent credence to or clearly pointed the finger towards Beijiiig as having "mothered " the Pakistani bomb. U.S. Senator John Glenn(incidentally, the first American astronaut in space) who had access to U.S. intelligence reports as a senior member of the Senate Armed Services Committeeand of the Senate Select Committee on Intelligence, asserted in a press interview that Beijing provided Pakistan with a proven Chinese design for a nuclearbomb that had been tested many times in China.11The China-Pakistan nexus was equally responsible for the development of Pakistan's missile programme. Again, it was pointed out in earlier chapters12 thatalthough for reasons of perceived political and economic needs, the U.S. refused to determine the transfer of nuclear and missile technology, or actualparts thereof, the U.S. intelligence had no doubt at all of such assistance by China to Pakistan, specifically the supply of 5000 ring magnets as wellas M-11 missiles. As John Deutch, the then Director of the CIA. testified before a U.S. Senate362Intelligence Committee, "There was not terribly much ambiguity about the CIA's judgement"13, a point of view at odds with the State Department's claim thatthese allegations remained unproven.His successor, George Tenet also confirmed that Beijing had made weapons of mass destruction (WMD) technology-related sales to Pakistan and Iran. "Thereis no question that China had contributed to WMD advances in these coountries", he testified before the Senate Intelligence Committee at the beginningof 1998.14 This should be seen in the context of the U.S. reports that China had transferred M-11 missiles to Pakistan in August 1996 and that Chinesemissile assistance was continuing.15Pakistan test-fired a medium-range missile (Hatf III) of upto 800 kilometres range, it was reported by a leading Pakistani newspaper on 2 July 1997. Pakistanhad earlier developed Hatf-I with a range of 100 km and Hatf-II with a range of 300 km16. Then with great fanfare the Ghauri surface-to- surface ballisticmissile with a range of 1500 kilometres was claimed to have been successfully "test-fired", apparently on land, by the Pakistani government.17 More evidencewould be required to determine how exactly the new missile came to be developed, and it would not do to reject out of hand Pakistan's claims, but Indianinformation was firmly of the view that Pakistan's missile programme was largely the contribution of Chinese technology, designs and even scientific manpowerassistance. Whether indigenous or of North Korean, or Chinese origin or aided by Chinese assistance through North Korea, what was undoubted was that thedevelopment created a new security parameter, for the new missile would reduce the advantage of strategic depth enjoyed by India and had already enforceda serious re-examination of the country's security situation and requirements.BROADER PICTUREThe Pakistani dimension to India's security was only one of the Indian security dimensions, and not necessarily the most difficult one. India's nucleardilemma stemmed from the widespread presence of ballistic missiles and nuclear weapons or nuclear weapon capability around India's borders, shores andwhat the Russians would call "near abroad". As we have mentioned at the beginning of the chapter, nuclear weapons and missiles, or the capability to producethem, abounded in the neighbourhood of India, of which the nuclear arsenal of China was perhapse the most important and long-term challenge. We need totake stock of the total picture.It may be recalled that in addition to the five nuclear-declared states-China, France, Russia, Britain and USA- and apart from the nuclear capability ofIndia and Pakistan, Israel had nuclear weapons. It may also be recalled that on 24363March 1993 President de Klerk of South Africa had declared that his country had mades six nuclear warheads between 1974 and 1990. The warheads were reportedlyeliminated and the nuclear programme dismantled as South Africa decided to adhere to the NPT, but it is difficult to be one hundred per cent certain insuch matters. Certainly South Africa's nuclear capability does not stand eliminated.At least three of the former Soviet republics and now independent countries, members of the Commonwealth of Independent States, were repositories of nuclearweapons and ballistic missiles - Kazakhstan, Belarus and Ukraine -, formally under Russian control, but the situation is far murkier them this bare statementwould indicate. Not just India, Americans have themselves been anxious about the safety and control of these weapons. Kazakhstan was host to about 104SS-18 missiles with an 11000 - kilometre range, many of them MIRVed. It also had a number of long-range strategic bombers based on its soil. Belarus couldboast of at least 80 SS-25 missiles with a single RV.18So far as Ukraine was concerned, it had an even larger nuclear force stationed on its territory. Besides 120 ((MIRVed) SS-19, 10000-kilometre range missiles,46 SS-24 and 80 SS-25 missiles, a larger number of strategic bombers like TU-95 and TU- 160 were located there.19 There are a number of contentious issuesinvolved in the dismantling of the nuclear weapons based on its territory. As the well-informed London-based journal, Military Balance, has pointed out,whether Russia could acquire full operational control of the strategic nuclear weapons on Ukraine's territory was open to question and it must be onlya question of time before Ukraine possessed the ability to prevent them from being fired and, over a longer period, to be able to fire them itself. Itshould not be ignored that two of the three Soviet plants to manufacture ballistic missile guidance systems were located in Ukraine.20Then there is China which may be said to have a modest nuclear arsenal so far as the two big nuclear powers were concerned, but which was formidable inthe context of the security challenge to india. A nuclear China's long term challenge was much greater than that of the relatively smaller nuclear capabilityof Pakistan.Hard evidence about the exact size of China's nuclear armoury is harder to come by. China had some 400 - 500 nuclear warheads, operationalized through strategicaircraft and land-based and sea-based missiles. These included 120 H-6 and 30 Q-5 aircraft, the former with a range of 3000 km. and the latter of 400 km.It had 50 DF-3A (CSS-2) missile targetting a 2800 km range, 20 DF-4 (CSS-3) missiles with 4700 km. range, 7 DF-5A (CSS-4) boasting a range of 13000 + km.,and 36 DF-21A (CSS-5) claiming a range of 1800 km. It thus has a battery of short range, intermediate-range and intercontinental ballistic missiles. Inaddition Beijing had also deployed 12 SLBMS with a range of some 1700 km.364International experts also found evidence of China developing two other ICBMs. The DF-31 had a range of 8000 km. and carried one 200-300 kt warhead, believedto have been deployed in 1997, and the 1200-km range DF-41 was scheduled for deployed in 2010 and might be MIRVed.21These known facts about China's nuclear prowess speak for themselves. Any government in New Delhi has to be alive to these developments and to shun complacency.What constitutes a much greater chailange to India's security is the coordination and cooperation in nulcear and missile technology between the two nuclearneighbours of India, and mostly India -specific. China's own chailange was quite formidable but its surreptitious support to Pakistan's nuclear and missilecapability has enlarged the challenge. India is obliged to weigh very carefully and soberly its options. This becomes even more essential if we take intoaccount the total picture that we have outlined earlier, all the nuclear weapons and missiles and the capabilities all around India in the region and beyond.The options were not limited to either self denial and leaving your security to rani bharose, or, alternatively, going for a big bang and declaring Indiaa nuclear-weapon state so that the country's security from nuclear blackmail by any hostile power or combination of powers could be ensured. There werea number of other options available to the country.Ofcourse the second option, mentioned above, was also perhapse the hardest to excercise, for it would let loose all the possible international pressuresthat could be applied on India, including threats to cut off all international assistance and the application of stringent sanctions. If India could displaythe will power and resilience to withstand political and economic ostracization for about a year or two, the option would have come good. But it requiredimmense determination and capacity to absorb pressures and willingness to forego some short-term benefits.However, India could also consider other options. A simulated cold laboratory test followed by a simple statement that India was a nuclear state was oneoption or, alternatively the continuance of the present state of ambiguity in which everyone knows you have the capability but no one is quite certainhow far you have gone or might go. The problems with this option was that you continued to suffer from all the disabilities imposed upon non-nuclear stateswithout enhancing your security and yet most powers knew how far you had really gone. Moreover the current developments in the region rendered this optionless and less credible.Yet another option was to resume the testing and further development of the Agni missile. Under U.S. pressure the Narasimha Rao Government had put a capon the development of the Agni missile sometime in 1994. The Americans knew about it but the Indians generally were in the dark and learnt the fact subsequentlyfrom the Americans. Agni could be further developed and refined,365its range increased and it could be operationalized to deter a nuclear threat. Expressing a broadly held view, Former Minister and an influential Congressleader, Madhav Rao Scindia speaking during a special debate in the Lok Sabha on 26 August 1998 (Hindi text with the author) called upon the Governmentto actively resume the development of the Agni missile and take all other steps to ensure the security of the country. In any case India had to weigh allthe costs and consequences and benefits for each option in order to take an appropriate decision. India could not pretend that nothing very much had happenedand that it could continue with the old policy. Inaction was no longer an option available to the country.NUCLEAR BLASTS AND AFTERThe new BJP-led government decided to excercise the big bang option. On 11 May at 3.45 pm India conducted three underground tests in succession at Pokhran,one of them being thermonuclear (demonstrating a capability to produce a hydrogen bomb)22. Two days later India conducted at the same site two more undergroundnuclear tests with a low yeild to obtain "additional data for improved computer simulation of designs", and to attain "the capability to carry out sub-subcriticalexperiments, if considered necessary"23 India had become a nuclear state with a capability to miniaturize nuclear weapons and mount warheads on Prithviand Agni missiles. This also completed the process started by Indira Gandhi in October 1974, with Pokhran I being succeeded by Pokhran II and PokharanIII. Pokhran I had been declared to be designed for peaceful uses of atomic energy, although demonstrating India's nuclear capability, but no bones weremade about the current blasts.The Prime Minister, Atal Behari Vajpayee declared in an interview with India Today two days after the second series of tests that "we have the capacityfor a big bomb now for which necessary command and control system is also in place". "India now is a nuclear weapons state," he said. India had indicatedits readiness to discuss certain provisions of the treaty on a reciprocal basis, but taken as a whole, Vajpayee maintained, the CTBT was discriminatorybecause it allows nuclear weapons states with advanced technology capabilities to continue their nuclear weapons programme. So also was the NPT. Indiawould not be cowed down by any threats and punitive steps and had the sanction of its own past glory aand future vision to become strong in every senseof the term, he asserted24Speaking at a party rally on the same day, the Prime Minister came out with a promise of "no first use" of nuclear weapons. India would use its nuclearcapabilities only if it was warranted in "self-defence", he said.25366The Chief Scientific Advisor and the Head of the Department of Atomic Energy, the men who ranked with Bhabha, Sarabai, Dhawan and Ramanna in taking thecountry to the scientific heights in the nuclear, ballistic missiles and space fields that it had now achieved, Dr. A.P.J. Abdul Kalam and Dr. R.Chidambramtold a press conference that "Nuclear weaponization is now complete. We have a reliable size, weight, performance and environmental condition for nuclearweaponization." Dr. Kalam confirmed that the indigenously developed Prithvi and Agni surface-to-surface missiles could now be armed with nuclear warheads.He observed that the five tests had "provided critical data for the validation of our capability in the design of nuclear weapons of different yields fordifferent applications in different delivery systems. These tests have significantly enhanced our capability in computer simulation of new designs andtake us to the stage of sub-critical experiments in the future, if considered necessary". The Government had given the go-ahead to conduct the five explosions(code named Shakti I to V) 30 days prior to 11-13 May blasts, Dr. Kalam revealed.The joint statement of the Department of Atomic Energy (DAE) and the Defence Research Development Organization (DRDO) claimed that India had acquired state-of-the-artnuclear weapons capability after testing a 45-kiloton yield hydrogen bomb on 11 May at Pokhran. A total of three tests of different intensity were simultaneouslyconducted that day. "The DRDO and the DAE have effectively and efficiently coordinated and integrated their respective technological strengths in a nationalmission to confer the country with a capability to vacate nuclear threats", the statement averred.Dr. Abdul Kalam also told the press conference that India had made a quantum technological leap in the weapons delivery systems, with several variants ofextended range surface-to-surface Agni IRBMs being developed by the DRDO. The BJP-led Government had given clearance to the extended range version of Agnimissile and it was in an "advance stage of development", Kalam told newsmen.26Two dimensions of the nuclear issue should be kept in mind. The decision to excercise the nuclear option was largely welcomed in the country and there wasbroad support for the decision, but not the manner in which the post-explosion situation was handled politically. But it should be remembered particularlyby those for whom the Nehru legacy is anathema that it was precisely the Nehru legacy that made the achievement of today possible. It was Jawaharlal Nehru'sstress on science and his policy of keeping abreast with nuclear research that enabled India to maintain its nuclear option. It was the previous four regimesthat had kept the ground ready for the tests that took place on 11 May. The preparations had started as early as 1980- 81 under Indira Gandhi, continuedunder Rajiv Gandhi and were in full readiness under Narasimha Rao, Deve Gowda and Inder Kumar Gujral. It is believed that Narasimha Rao was on the367verge of giving the go-ahead signal for conducting this very type of nuclear tests in 1995, but the Americans got wind of it through their satellite spystations and mounted pressure on Rao. Buckling under the pressure Rao decided not to give the formal signal to proceed. The preparations remained intactunder the UF governments, until the green signal was given by Mr. Vajpayee.The power symmetry has somewhat stabilized in the region. It is believed that starting in 1989 India has now about 60-100, Pakistan about 15-30, and aswe know China has about 400-500 nuclear warheads. All the three countries have ballistic missiles and a delivery system, although China's is much moreadvanced than that of the others. The Indian government is seeking a minimum nuclear deterrent, although what constitutes a minimum deterrent and whatits geographical range should be has not been made clear. An important problem before India is a command and control system which has yet to take fulland effective shape. Moreover, to the best of this author's knowledge, India has not yet deployed any nuclear weapons.Addressing a press conference on 21 May the Principal Secretary to the Prime Minister Brijesh Mishra declared that "we have already put a moratorium onfurther nuclear tests and offered to formalize it into an obligation through negotiations with the world powers". He also added, "let it be clear thatwe opted for nuclear weaponization to set right the power asymmetry in the region. But we sincerely hope that the need for using these weapons will neverarise". He also cooled down the rhetoric in some ministerial as well non-official circles on Pakistan and China. He offered talks to Pakistan, includingthe Kashmir issue, if it so desired, in line with the decisions already taken in the previous rounds of discussions. About China, it was time to cool down,he said, and engage in serious and fruitful dialogue. India has had some concerns which it had been conveying to them from time to time, he said, and theimportance of dialogue with China, therefore, lay in the fact that India wished to remove those concerns.27Like the rest of the world, the political parties in India, particularly those in the opposition, were taken by surprise by the tests and took sometimeto formulate a considered response. Their initial reaction was to welcome the tests, barring the Left parties who from the outset took a dim view of them.Both the former Prime Minister, I.K. Gujral and the former Defence Minister, Mulayam Singh Yadav spoke positively about the tests.28 The Congress President,Mrs. Sonia Gandhi , was reported by the media to have told the Congress Working Committee on 14 May that "the nuclear question is a national matter", nota partisan one, and put on record the "pride we feel in this achievement of our nuclear scientists and engineers for putting India's nuclear capabilityin the front rank". She recalled "with equal pride that successive Congress governments have ensured that India's nuclear capability remained up-to-dateso that our368security is not compromised". She also remarked that the Congress remained committed to a nuclear weapons-free and a non-violent world which remained the"sheet anchor" of India's policy. She reiterated the commitment to peace in the region so that India and her neighbours could move ahead in acceleratingeconomic growth, eradication of poverty, illiteracy, and improving living conditions of all citizens.29However, as the BJP appeared to be grasping for every ounce of political advantage from these tests, as it seemed to be inciting jingoism in the country(like the call for building a temple at Pokhran and fiery speeches regarding neighbours), as even its ministers were making provocative statements aboutthe neighbouring countries, as the Government through its inept handling revived an acerbic relationship with China, and as the government appeared tobe amiss in building any consensus with the opposition, the unanimity that seemed to be building collapsed. The opposition went more and more on attackand achieved a united stance which could be summed up as : congratulate the scientists for their achievement, sharply question the timing of the testswith the political motives of the BJP behind them, criticise the manner in which China and Pakistan were named as the adversaries, and oppose any programmeof further weaponization. Nevertheless there was no direct opposition to the tests as such, and the Opposition made it clear that it would oppose the impositionof any sanctions by the United States.Predictably the international community, chiefly its chief spokesmen from the developed countries reacted adversely against the tests. The chorus of denunciationsby Western countries and Japan has now been joined by China for different reasons. The U.S. announced the imposition of sanctions and Japan followed withsuspension of aid to India. While reactions from, and relations with, Pakistan, USA and China are considered separately in subsequent sections, a few notableaspects may be mentioned here.The disapprovals notwithstanding, India's nuclear tests have exposed the fallacious and self-serving logic that the nuclear powers have so far been employing.Their determination to keep their own nuclear arsenals in fine fettle, their obvious reluctance to take manifest steps towards nuclear disarmament andyet their insistence on all the other countries practicing nuclear abstinence made a mockery of their claim that the possession of nuclear weapons didnot confer any special status on the possessors. It is inconceivable that India would have acquiesced for long in such an unequal and discriminatory internationalorder and it was even more odd that the big nuclear powers thought that India would and that they showed so much indifference and insensitivity to India'sconcerns.India's nuclear tests should make the big nuclear powers do some agonizing rethinking. This sentiment was well- expressed by Kofi Annan, Secretary Generalof the United Nations.369He regarded India's nuclear tests as a "wake-up call". The self- proclaimed five nuclear powers needed to rethink their positions. "You cannot have an exclusiveclub (whose members) have the nuclear weapons and are refusing to disband it and tell them [India and Pakistan] not to have them"30 Kofi Annan said. Similarlyformer U.S. President Jimmy Carter has questioned the moral right of the nuclear powers to denounce and deride India when they have not even ratified theCTBT, much less shown any inclination to reduce their nuclear arsenals.Some of the other leading developed countries have generally not followed the U.S. lead in imposing sanctions against India. Japan has suspended officialaid. So have Norway, Sweden, Denmark, the Netherlands and Canada. Germany has in any case been reducing foreign aid because of domestic budgetary crunchand has not related it to India's nuclear tests. France has made no move to reduce its economic interaction with India. Russia was willing to do businesswith India even while urging it to sign the CTBT. Collective denunciation has not been accompanied by collective punitive action. The U.S. did not succeedin getting collective action taken against India by the G-8 in their meeting at Birmingham on 17 May. The Russians made it clear that sanctions were invariablycounterproductive and that they were opposed to imposing sanction against India as a matter of principle. The European Commission President, Mr. JacquesSanter revealed that different countries had expressed different views and so it was for individual countries to decide on sanctions as each state haddifferent levels of relations with India.31India had, however, no reason to be complacent. The lurking dangers were evident in the toughly-worded statement issued by the European Union on 25 May,virtually delivering an ultimatum to India to sign the CTBT and refrain from taking any further steps towards nuclearization.32 India's equally tough rejoinderpoints towards coming difficulties. It was Britain, the current president of the European Union, that prodded the European Union to adopt a more hawkishanti-Indian stance. While opposition by France, Germany and Belgium staved off any specific sanctions that were implied in a British-led draft, the Britishrepresentative, Foreign Minister Robert Cook succeeded in including in the final statement threats for stricter measures and for possible deferment ofloans from the World Bank and other international financial institutions. It was also reported that Prime Minister Vajpayee had assured Russia in a telephonicconversation with President Yeltsin that India would not conduct any more tests and expressed New Delhi's willingness to hold talks on the CTBT.33Robert Cook had apparently not forgotton or forgiven his embarrassment and discomfiture for speaking out of cue about intervening in the Kashmir disputeand being snubbed by New Delhi when he accompanied Queen Elizabeth during her visit to Pakistan and India. However, as usual,370subsequently the British Prime Minister Tony Blair brought about a softening and a greater balance in the British approach.Nevertheless, the European countries were scared about the possibility of a nuclear conflict in South Asia and the apparently escalating tensions in theregion. Pakistan was taking full advantage of these fears with its incessant rhetoric about the possibility of a nuclear conflict over Kashmir. Also underWashington's prodding, the Security Council, the P-5 (the five nuclear powers), the G-8 and the European Union adopted almost identical resolutions. Theydemanded that India and Pakistan desist from carrying out any further tests and to sign the CTBT unconditionally and forthwith, otherwise they might haveto face tougher consequences. They also asked India and Pakistan to start talking about Kashmir and resolve their differences. They hinted at internationalmediation. The most curious suggestion that came from the European Union was a virtual invitation to China to involve itself in the Indo- Pakistan problemsand mediate a solution. The European Union did not seem to realize that this was in a way the ultimate insult to India, trying to foist China as an arbiterover India. It also seemed to have turned a blind eye towards the history of the last 40 years, the history of Sino-Indian relations, but no less the historyof Sino-Pakistan relations and their nexus of the last four decades.Nevertheless, India should demonstrate to the European countries that it was sensitive to their fears and anxieties, without abandoning its basic approachof bilateral resolution of any dispute with neighbouring countries. This was the time when diplomacy must move in and take over from the achievements ofour scientists. Just as diplomacy could not be a substitute for a minimal sufficient nuclear deterrent, nuclear deterrence was no substitute for diplomacy.The government handled rather clumsily the post-tests political and international situation. It was totally unnecessary to name adversaries and make thenuclear capability any country-specific. The provocative language used by some of the ministers in the Vajpayee government was both undesirable and inadmissible.The attempt to foster jingoism was misconceived. This was precisely the time to turn a benign face towards the world and to adopt a more reassuring attitudetowards the neighbours as well as towards the international community. The more reasonable we appeared the easier it would be to overcome the anxietiesof the European and other countries. India's diplomatic motto should be: unite with all those countries and elements therein with whom it was conceivablypossible to unite, underplay the differences, and strive to mitigate the enmities.There is no question but that the country would be made to feel the pain for its "defiance of the international community". Those who claimed that therewould be no bill to foot were hardly being realistic. The resolution of the G-8 released on 12 June 1998 agreeing to work together "for a postponementin consideration of other loans [other than humanitarian] in the World Bank and371other international financial institutions to India and Pakistan, and to any other country that would conduct nuclear tests" 34 was a sufficient pointerto the trials ahead. While the imposition of the sanctions by the United States, and their implications, would be discussed in a subsequent section onIndia and the United States, there could be no doubt that India would be going through a rather prolonged difficult period.India would have to find as many ingenuous ways as possible to mitigate the rigours of the sanctions regimes as well as the political pressures that wouldcontinue to be exerted on the country. The transition could be facilitated through the pursuit of a flexible political and economic diplomacy. The morereasonable India appears, the more sensible its stances, the more intense its political and economic interaction with other countries, the less abrasiveits responses and reactions to others countries' statements and formulations, the more helpful could it be for India to cope with the coming pressures.India would need to walk in opposite directions at the same time, so to say. India cannot go back to a non-nuclear status, or being treated as such. Onthat issue the road to compromise had come to an end. On various allied issues the road to compromise was still open. India would have to insist that itbe accepted and regarded as a nuclear state. Whether India should actually further manufacture and deploy nuclear weapons was open to debate and therewere cogent agreements either way. If India was not threatened and its nuclear status was accepted, the question of further actual weaponization couldbe a useful lever for negotiations with the U.S. and others for a satisfactory mutual understanding and perhapse more formal arrangements and agreements.An opposite kind of pitfall would equally have to avoided. The country must never lose sight of its real goals and objectives. The goal, so far as Indiawas concerned, was nuclear disarmament, a nuclear weapons-free world. That objective must continue to be pursued with utmost vigour and the plan of actionthat Rajiv Gandhi had initiated for phased and rigorously supervised total nuclear disarmament must remain on our active agenda of diplomacy and actionin the international arena. Nuclear weapons are not meant for use. They are weapons of terror, of mass destruction. Their only purpose is to deter andto avert nuclear blackmail. But their continued presence hangs like the Democles' sword over the heads of the people of the world. They breed dangerousinstability and insecurity. Almost since independence India has committed itself to work for a nuclear weapons-free world. This should remain our principalcommitment and the country must exert all its efforts towards securing the elimination of all nuclear weapons in the world and all testing of these weapons,including laboratory testing.Political developments within the country would have an impact on the interaction with USA, the G-8 the P-5, and the European Union, and the shape of thingsto come. If the present government survives over some length of time, the372interaction would be under one set of circumstances and conditions. It was not clear whether the present government was unalterably committed to furtherand appreciable nuclearization and the actual deployment of nuclear weapons. If so, the situation in which India would find itself would be considerablydifferent and the negotiations with the concerned powers would be of a very different order carrying a very different price tag. If, however, the presentgovernment failed to survive for long and was replaced by a new government (which in the present circumstances could only be a Congress-led government)the ball game could change materially. Since the entire opposition, including the Congress, had publicly put itself on record against further and evenmore substantial weaponization, it was possible that the new government could negotiate arrangements, agreements and obligations that, while preservingthe nuclear status of India, took into account the concerns and anxieties of the international community.A FITFUL DIALOGUE : INDIA AND PAKISTANA changeover both in Delhi and Islamabad during 1996- 97, with some time-gap between the two, had aroused hopes about a renewed effort to break the logjambetween the two. During the campaigning for the Pakistani elections, Nawaz Sharif had adopted a more dovish approach towards India and had called for betterrelations with the neighbouring country. Indeed Benazir Bhutto herself acknowledged that her "hawkish policy" (her own words) on India had been rejectedby the people who had interalia endorsed Nawaz Sharif's standpoint on opening negotiations with India.35 Nawaz Sharif told newsmen immediately after theelections that he would create "an atmosphere for meaningful dialogue with India."36 But he made it quite plain during his acceptance speech on being electedthe leader of the house in the 217-member National Assembly that the Kashmir question remained high on the country's agenda.If there was any doubt or confusion in anybody's mind, General Jehangir Karamat, Chief of Army Staff of Pakistan, removed it and asserted that Kashmir couldnot be put on the back burner in any Indo-Pak dialogue. "The talks should move in the direction of improving the atmosphere. But it should be defined (simultaneously)as to how the Kashmir problem is to be tackled", he told an Indian correspondent.37The insistence on tackling the Kashmir issue could not obscure a very important concession that Pakistan was making for the first time. It was no longermaking "progress" on the Kashmir issue a precondition for a deliberation of other avenues in improving relations, like trade and encouragement of exchangesin various areas and fields. What Islamabad was now - apparently at least - prepared for was to simultaneously address the Kashmir and other issues.373Whether Islamabad would subsequently link action in other areas to a satisfactory rate of progress on the Kashmir dispute was an open question.India, of course, had been sending signals for a resumption of dialogue since the new government took over. The Foreign Minister, I.K. Gujral, was knownto be keen on reducing the tensions and promoting a civilized conversation between the two countries. The first Prime Minister of the new United Frontgovernment H.D. Deve Gowda, after first having dismissed the idea of putting Kashmir on the India-Pakistan dialogue agenda,38 offered a dialogue on allissues between India and Pakistan and even expressed his willingness to discuss "minor adjustments in relation to Kashmir within the scope of the SimlaAgreement"39___a wholly premature and diplomatically unwise statement.The Foreign Secretaries of India and Pakistan met in New Delhi towards the end of March in somewhat inauspicious circumstances. The political ground hadslipped as an internal political crisis gripped India just when a further momentum could be given to the talks. The Congress Party withdrew its supportfrom Deve Gowda making his exit a virtual certainty. The talks ended inconclusively since they needed a political input for sustenance which was not availableat the time.40Immediately afterwords Pakistan's Foreign Minister Gohar Ayub Khan was in New Delhi attending a non-aligned conference and had a breakfast meeting withthe new Prime Minister of India, I.K. Gujral who told him that in a meeting with the UN Secretary General he (Gujral) had said that even if you had todefrost a refrigerator, it took time. Gohar said to Gujral that it was good that he recognized that there was a refrigerator to defreeze. That refrigeratorwas Kashmir, he said.41The new Prime Minister in his first public comment to reporters on the subject ruled out the possibility of converting the Line of Actual Control (LoC)in Jammu and Kashmir into a permanent border with Pakistan.42 This had become necessary in view of Mr. Deve Gowda's earlier indiscreet suggestion aboutwillingness to make "minor adjustments" at the border. You do not announce concessions even before the commencement of negotiations ! But Mr. Gujral wasequally anxious about resuming negotiations with Islamabad.The opportunity came when the two Prime Ministers met at Male (capital of Maldives) during the ninth summit of SAARC May 12-14. After a two-hour meetingon 12 May at Male I.K. Gujral and Nawaz Sharif agreed to the formation of working groups on various subjects to be identified when the Foreign Secretariesof the two countries held their second round of talks in Islamabad. It was also decided to release fishermen who had been held as prisoners in each other'scountry (some 190 Indians and about 220 Pakistanis). The two Prime Ministers also agreed to set up a hotline between themselves in case of emergency. Gujralbelieved that they had started on a "clean slate". India also374proposed to purchase electricity from Pakistan, but the proposal was yet only "in a conceptual stage."43Although it was agreed between the two sides to discuss all bilateral issues including the Kashmir dispute, there was no clarity regarding the agreementon the setting up of the working groups. Pakistan's Foreign Secretary claimed that the working groups would include one on Kashmir but the Indian ForeignSecretary disputed it and asserted that the working groups would be identified only when he meets his counterpart in Islamabad.44 So the seeds of misunderstandingwere sown in the ambiguity of the ageement itself. This ambiguity was heightened after the two foreign office chief excutives met in Islamabad.Meanwhile a U.S. report created new tensions and anxieties in Pakistan. The Washington Post, quoting U.S. intelligence sources, reported on 3 June thatless than a dozen Prithvi missiles had been moved from the production centre in Hyderabad to a prospective launching site near Jullundur. Some of the anonymousU.S. officials quoted in the report claimed that it was the first operational deployment of the Prithvi since its development began more than a decadeago, while others cautioned against rushing to conclusions as Washington's best judgement was that all the equipment and specially trained troops requiredto launch the missiles were not yet at the proposed launching side.45The report was bound to act like the cat among the pigeons. As was to be expected Pakistan reacted strongly and Gohar Ayub Khan shot off a letter to U.S.Secretary of State Madeleine Albright warning that the Indian action had created a "dangerous security environment" that bore "the potential of unleashinga ballistic missile race in South Asia."46 Prime Minister Gujral strongly denied reports of deployment of the Prithvi missile in any part of the country."We have successfully acquired missile technology, but missiles have not been deployed as reported", he told pressmen. He added that India was very keenthat there should be peace in the South Asian region.47 The official explanation was that the missiles had been moved from Hyderabad for lack of storagespace. One view in India was that through a calculated leak some U.S. agencies were deliberately throwing a spanner into the India-Pakistan dialogue.48WORKING GROUP ON KASHMIR ?The Foreign Secretaries met for the second time amidst this muddied atmmosphere. The Indian delegation included the present Foreign Secretary, K.Raghunath.After some prolonged deliberations in Islamabad the two sides announced an agreement to set up working groups to consider various bilateral issues. Therewas very considerable sense of satisfaction in Pakistan where it was made out that India had agreed to the establishment of a working group to375discuss the kashmir dispute. Prime Minister Nawaz Sharif jubilantly welcomed the conclusion of the talks as a "major breakthrough" since it included theKashmir question on the agenda for further discussions for the first time. Foreign Minister Gohar Ayub Khan informed the National Assembly about the outcomeof the three-day talks as a "major breakthrough" since it included the Kashmir question on the agenda for further discussions for the first time. He toldthe National Assembly about the outcome of the three-day talks amidst thumping of desks by members of the house who congratulated the Prime Minister onthis achievement. The Pakistan Foreign Minister told the National Assembly that the talks were held in a "cordial and constructive atmosphere" and thatboth sides agreed to take all possible steps to prevent hostile propaganda and provocative action against each other.49The then Indian Foreign Secretary Salman Haidar asserted on his return from Islamabad on 25 June that there was no question of any negotiations with Pakistanon the status of Jammu and Kashmir which was an integral part of India. "Our part of Kashmir is not a dispute, but there are issues relating to Pakistan-occupiedKashmir", he told newsmen in New Delhi.50 He also said in reply to a reporter's querry that the question of linkages (between settlement of the Kashmirissue and progress in other areas identified by the Foreign Secretaries) would certainly be an important one at an advanced stage of negotiations.51The two statements of Haidar were entirely contradictory to each other. On the one hand he was saying that India would discuss with Pakistan only the questionof the occupied part of Kashmir and on the other hand he was implying that the Kashmir question would be crucial for the ongoing talks. Neither statementwas really tenable and reflected rather poorly on the competence and credibility with which the chief executive had at least publicly handled the issue.In any case, India denied that it had agreed to the establishment of a separate working group to discuss the Kashmir issue. What had then the Indian andthe Pakistani delegations agreed to? How was it that Pakistan came to have such a different understanding about what the two had agreed upon? Did Indiarethink subsequently and renege on its agreement with Pakistan? For a clear understanding it is necessary to refer in detail to the joint statement issuedby the two Foreign Secretaries in Islamabad on 23 June 1997; only then would it be possible to establish the correct position.The joint statement declared that with the objective of promoting a friendly and harmonious relationship between Pakistan and India, the Foreign Secretariesagreed as follow:52376i) To address all outstanding issues of concern to both sides including, inter alia:a) Peace and Security, including CBMsb) Jammu and Kashmirc) Siachend) Wullar Barrage Project/Tulbul Navigation Projecte) Sir Creekf) Terrorism and Drug-traffickingg) Economic and Commercial Cooperationh) Promotion of friendly exchanges in various fields.ii) To set up a mechanism, including working groups at appropriate levels, to address all these issues in an integrated manner. The issues at (a) and (b)above will be dealt with at the level of Foreign Secretaries who will also coordinate and monitor the progress of work of all the working groups.The two Foreign Secretaries also had a preliminary exchange of views on the composition of the working groups and their methodology. It was decided to continuethe consideration of this matter through diplomatic channels.It bears underlining that the issues at (a) and (b) referred to peace and security, including CBMs and Jammu and Kashmir and it was expressly stated thatthey would be dealt with at the level of the Foreign Secretaries. It was thus crystal clear that not a working group but the Foreign Secretries would behandling the "core" issue (from Pakistan's point of view) of Kashmir. Pakistan's claim that India had agreed to the establishment of a separate workinggroup on Kashmir was thus wholly untenable. On the contrary, Pakistan had agreed that Kashmir would be considered but only at the level of the ForeignSecretaries.The new Foreign Secretary, K.Raghunath, who was present at the talks, told this author that Pakistan was evading the actual joint statement and making falseclaims about what had been agreed upon, mostly because of domestic compulsions.Despite these differing perceptions India made gestures to demonstrate its earnestness in improving relations with Pakistan, espacially in promoting contactsamong the people of the two countries. The Government announced on 28 June visa relaxations for the nationals of Pakistan who visited India. They couldnow visit 12 cities instead of 8. Reputed artists would be given visas with permission to perform in India, a facility that would be particularly helpfulto a number of Pakistani singers who were earlier obliged to generally give private performances. A number of categories of people like artists, journalists,students, writers, businessmen recommended by the SAARC Chambers of Commerce, senior citizens and children could be exempted from reporting to the police,and most of them, except businessmen, would be given cost-free visas.53377There were also reports, both before and after the talks that Pakistan had offered negotiations to sell 3000 MW of power to India and that India and Pakistanwould soon be discussing various aspects involved in such a deal, like matching transmission lines and identifying transit points.54 India was apparentlygreatly interested in such a deal as its energy* requirements far outstripped its domestic availability and even the then Union Minister for power, Y.K.Alagh lent credibility to the reports by telling the Rajya Sabha that India would be negotiating with Pakistan the offer to sell 1000 MW of power. Alaghwas immediately contradicted by the Pakistani minister for petroleum and natural resources. "No such offer had been made to India and neither is such aproposal under consideration", he told a Pakistani newspaper. He acknowledged that the proposal to sell power had been discussed between Gujral and Sharifat Male, but claimed that there had been no progress on the issue. There were "lots of other things" that had to be determined, he said, obviously Kashmirbeing once again the sticking point.55The same justification was given for the refusal to consider a mutual defence cut. Prime Minister Gujral had suggested a mutually-agreed defence pruningaimed at providing social stability to the people. Nawaz Sharif, however, curtly tossed the proposal out saying that a slimming down of Pakistan's militaryexpenditure was not possible unless the outstanding differences, including the Kashmir issue, were resolved. The talks had to succeed before Pakistan couldconsider such a proposal, he told the BBC television.56For Pakistan the chief stumbling block was the Kashmir dispute, for India Pakistan's complicity in fanning and aiding militancy and terrorism in India.His keenness to bring a turn around in Indo-Pakistani relations notwithstanding, Gujral accused Pakistan of sponsoring terrorist activities in Kashmir,Punjab and other parts of India. He told the Lok Sabha that Pakistan was not only providing sanctuary to terrorists, but also supplying arms and ammunitionto the terrorists and assisting them in infiltration. The Government, he said, was aware of militant training camps based in Pakistan and Pakistan-occupiedKashmir. There were reports that Afghanistan under the Taliban had handed over some of its terrorist training facilities to Harkat-ul-Ansar for conditioningPakistani youth to take up militant activities against India. This had been repeatedly brought to the notice of the Pakistani authorities and even at Malehe had taken it up with Nawaz Sharif. He was, however, keen to continue the dialogue with Pakistan.57The atmospherics for the attempts to relax tensions could not have been brightened by the heavy firing along the LoC in Kashmir towards the end of August- a bare two weeks away from the scheduled resumption of talks between the Foreign Secretaries of the two countries. The firing took place almost alongthe entire stretch of the LoC-in Siachen, Kargil, Tanghdar and Uri down to the Poonch, Rajouri and Jammu sectors. There were serious casualties on bothsides. India alleged that the unprovoked firing from the Pakistani side claimed378the lives of three Indian soldiers including a Major and a JCO as well as three civilians and several Pakistani soldiers when India retaliated. Such a high-scaleof firing at the LoC was unprecedented. A day later, Pakistani casulties were being put at 70 officers and men, dead or wounded.58Various theories were mooted regarding Islamabad's motive behind the firing on such an intensified scale. The first reaction in the army sources was thatPakistan aimed to provide cover for the infiltration of militants into the Indian side59. Another theory advanced was that Pakistan was trying to involvethe U.S. in the India-Pakistan problems by creating incidents that could be considered by Washington as a threat to world peace. Yet another hypothesisbeing bandied about was that the army in Pakistan was trying to sabotage the Indo-Pak dialogue and was sending its own message to the government in Islamabad.Only the reaction attributed to the Indian army sources seemed to hold some validity for, significantly, Pakistan made no initial noises about the firingand infact, the Pakistani defence ministry sources claimed that there was "no unusual" activity along the LoC and that "minor incidents of firing are alwayshappening along the LoC".60 Subsequently, Pakistan blamed India for starting the firing and alleged that New Delhi's attempt was to find an excuse to wriggleout of the earlier agreement to set up a working group on Kashmir. It also dismissed Indian estimates of Pakistani casualties as fictional.61The Foreign Secretaries of the two countries resumed their dialogue in New Delhi on 16 September but were stuck on Kashmir. After four days of talks theyfailed to provide, to use the official euphamism, "operationalization of the mechanism" to address contentious issues between the two countries. The twoForeign Secretaries decided to "adjourn" the talks62 to meet at an unspecified later date, hopefully receiving in the meantime fresh inputs from the politicalleadership. It was already known that Inder Gujral and Nawaz Sharif would be meeting later in the month in New York where both were heading for their separatemeeting with the U.S. President Bill Clinton as well as to attend a meeting of the UN General Assembly. Pakistan blamed India for resiling from a previousagreement on evolving a mechanism to tackle the Kashmir issue. It boiled down to the question, as was pointed out earlier by this writer, as to what wasagreed upon in the second round of talks in Islamabad.Yet, neither side wished to acknowledge any failure of talks. Pakistan's Foreign Secretary Shamshad Ahmed discounted the suggestion that the talks had failed.Every round of talks was not supposed to produce an agreement or a joint statement. "This is an ongoing process and may be it will take a long time beforewe reach our goal. We have no illusions because we are dealing with issue which are complex and rooted in our history," he said. There could be no miraclesor quick fixes for any major breakthrough, he told newsmen after his return from New Delhi. He hoped that the Prime Ministers of India and Pakistan intheir379meeting in New York on 23 September would give further impetus to the India-Pakistan dialogue, which had resumed in March after being frozen for more thanthree years.63The two Prime Ministers had a breakfast meeting in New York on 23 September where they agreed to take steps to stop incidents of firing along the LoC inJammu and Kashmir. They reiterated their commitment to continue the dialogue. They had apparently broken no new ground but were intent on improving theatmospherics. Nawaz Sharif described the meeting as "very good" and told newsmen after the meeting that the two sides would continue the Foreign Secretary-leveltalks. Pakistan would have liked, Sharif said, a working group on Kashmir in accordance with the "understanding" reached earlier, but India's perceptionon the issue was different64. Mystifyingly, the Indian Prime Minister left the venue without talking to newsmen and the Indian official spokesman abruptlycancelled his normal briefing session. It was made to appear that India wanted to change the focus from the media obsession with Kashmir to Indo-U.S. relations.Despite the high-level intent to end the armed skirmishes on the LoC, serious clashes still took place to disconcert the political processes between thetwo countries. At least 18 civilians were killed and scores of others injured in Kargil town and sorrounding villages from Pakistani firing between 29-30September. The Indian army too responded with heavy firing and claimed to have inflicted numerous casualties on the Pakistani troops.65Meanwhile India had taken a firm decision that it could not give in to the combined U.S.-Pakistani pressure for a working group on Kashmir. This pressurewas evident during the visits of Inder Gujral and Nawaz Sharif to New York. The U.S. administration made it clear that it would closely follow the Indo-Pakistandialogue.66 India, however, made explicit its determination to hold on to what was clearly specified in the joint statement which envisaged talks on theissues of Kashmir and peace and security only at the level of the Foreign Secretaries. Inview of India's firm standpoint, Nawaz Sharif was reported tohave told his cabinet that Pakistan would have to "review its policy" towards the whole process of the bilateral dialogue with India.67 The foreign secretary-leveltalks were deadlocked and Islamabad perceived no purpose in carrying them on unless the Kashmir issue was to be resolved.68GUJRAL DOCTRINEA word would be in place here on what has come to be known as the Gujral doctrine. It came into vogue when Inder Kumar Gujral became the Foreign Ministerof the United Front Government in 1996. Put at its simplest it means a conscious and consistent effort to bring about a new level of relationship, a380relationship of greater understanding and harmony with the neighbouring countries, particularly those in the SAARC region. India should be prepared to offereven unilateral concessions, if necessary and where required, to turn around the relationship with these countries. It was with this perspective and inthis spirit that India recently negotiated fresh agreements with Nepal, Bangladesh and Sri Lanka. Necessary adjustments were made in India's responsesto the concerns of these countries on a number of vital issues in the relations with India. What was significant was that the element of reciprocity wasgenerally not insisted upon in resolving issues with these countries.Gujral believed that no vital interests of India need be abandoned in adopting this approach and the dividends obtained in terms of good will and betterunderstanding outweighed the concessions preferred. He had also secured a measure of consenses in the country on the manner some of the outstanding issueswere handled, like with Nepal and Bangla Desh. Since the neighbouring countries (here China and Burma are not included) were of varying sizes, resources,and potential, many of them small, some resource-short, all of them considerably less developed than India, the principal of reciprocity could not be automaticallyapplied. It was, basically, the mindset or the approach with which you deal with your neighbours that greatly mattered in determining the state of relationship.It was this approach as much as the adjustments made that helped in changing the relationships. This approach has had a highly benign impact on relationswith Nepal, Bangla Desh and Sri Lanka.But it should not be ignored that this doctrine cannot be, and one believes was not meant to be, applied mechanically to every neighbouring country andevery situation. The general approach was very good but what is possible and feasible in the case of one country may become infeasible when it comes toresolving the problems with another country. This was demonstrated in the case of Pakistan which was a completely different ball game. For one, Pakistanwas really among the large and populous countries of the world with a well equipped modern army. This point has been elaborated earlier while discussingIndia's relations with Pakistan. Second, the price that Pakistan insisted upon for betterment of relations was virtually the gifting away of Kashmir undersome garb or the other, under one mechanism or another. It was not a price that India could just smile and pay. A way had to be found to bring India andPakistan closer, and the approach of a continuing dialogue was a good approach, but there were no instant solutions.POSTSCRIPTApart from the perceptional chasm which, as we have noted, had already taken a toll of the dialogue between the two countries, the political turmoil inIndia and the ensuing elections for parliament put on hold any further381negotiations until the picture was clearer in India. One of the main contending parties, the Bhartiya Janata Party (BJP) stated in its manifesto that itwould take a second look at India's nuclear policy to decide whether the nuclear option should actually be excercised. This was enough to raise the hacklesof Pakistan and Foreign Minister Gohar Ayub Khan's diplomatic activity around the world went into high gear issuing dire warnings against the prospectof India inducting nuclear weapons in its armoury. As the possibility of a BJP-led government emerged on the political horizon of India, his rhetoric toobecame shriller.Besides warning the international community about Pakistan's resolve to do the same as India did, Gohar Ayub Khan demanded international sanctions againstIndia for its alleged plans to go nuclear. He also rejected new Indian Defence Minister George Fernandes' statement that India's nuclear policy was defensive.69It may also be recalled here that Fernandes had also stated that any new decision with regard to the nuclear weapons would be taken; only after a fullreview of the security needs of the country and left open the question of the type of weapons that might become necessary to induct even if the reviewfound them necessary to meet the threats to India's security.Islamabad also vociferously blamed India (in particular RAW) for a series of bomb blasts in the country, a charge which India rejected as frivolous butwhich General Karamat insisted Islamad had solid proof about.70 The evidence has yet to be published, but in any case Islamabad has in recent years beenwracked by sectarian violence, no matter what RAW might or might not be doing.The flip side of it was also instructive, if not amusing. While there would be genuine concern in many circles in Pakistan about the implications of theemergence into power of what was perceived to be a Hindu fundamentalist party for Indo- Pakistan relations and for Indian muslims, many influential circlesin Pakistan, in the ISI and among the conservative religious groups actually welcomed the development. A Hindu India justified the islamization of Pakistanand the two-nation theory and would provide the ideological underpinnings for the kind of societal polarization in the subcontinent as well as in the internationalcommunity. They fervently desired the recreation of an India in their self-image, a kind of theological victory for them. They would not have to cope withthe complexities of meeting the political challenge of a secular Indian polity, with all its diversity, rule of law, and equal rights for all citizens,regardless of community and religious persuasions.Nevertheless, with the induction of a new 18-party coalition government with its national agenda that omitted all the contentious issues that were the stapleof the BJP's political diet, Indo-Pakistan relations got a more hopeful start than the earlier rhetoric would have indicated. The new Prime Minister, AtalBehari Vajpayee's first public appearance was at an Indo-Pakistan hockey match, a symbolic gesture for a more relaxed approach towards each other's country.Vajpayee also received a warm and helpful message of greetings from Nawaz382Sharif 72 which was responded to equally warmly laying the groundwork for the possible resumption of the dialogue.73It was necessary to keep talking and to continuing exploring ways of bridging the gap between the two countries. They still remained poles apart. How widewas the perceptional divide was evident from Nawaz Sharif aide and Information Minister, Mushaid Hussain's comments to an Indian journalist on the developmentsin India. Pakistan was ready for a dialogue, he said, but only on issues, and not on non-issues, "a dialogue which focusses on Kashmir as a core question".The Kashmir question must be settled under the United Nations resolution calling for "a free and impartial plebiscite", he insisted.As regards the BJP's agenda to take a relook at the nuclear policy, he claimed that Pakistan was glad that the BJP was talking of doing publicly what previousIndian governments were doing secretly. The previous Indian governments talked of peace, he said, but actually prepared for war through their aggressivedesigns .. like the nuclear explosion of 1974 and testing of Prithvi and Agni missiles". Pakistan's defence was capable of meeting any eventuality, ing then to the heart of the historic philosophic dilemma dividing India from Pakistan, like many others in the Pakistani elite he too claimed that theelection victory of the BJP was a vindication of Mohammed Ali Jinnah's two-nation theory. "Besically India is a hindu India and Pakistan is a muslim Pakistan",he effused to the Indian correspondent. Undeniably, many circles in the ruling elite in Pakistan desired nothing better than that India should embraceHindutva and thereby justify the raison d etre of the theocratic state philosophy of Pakistan.74AFTER THE BLASTSPakistan's hyper-inflamed reaction to the Indian nuclear tests was to be expected. After the launching of Ghauri missile a wave of euphoria had swept Pakistanfortifying the feeling that it had bested its "arch-rival" with whom it had striven for parity for the last half century. Hardly had the euphoria abatedwhen came the Indian nuclear blasts. It was inevitable that the euphoria would be dampened and give way to anger and alarm. The Urdu media particularlyand the opposition noisily demanded that Pakistan also explode a nuclear device.Nawaz Sharif was under intense pressure to give the go-ahead signal to the nuclear chief Dr. A.Q. Khan who had claimed that he was ready and waiting forthe Prime Minister's nod. But the Americans were putting their own heat on Pakistan to refrain from testing and in return were offering a new militaryand economic package, including the F-16s that had been impounded under the Pressler amendment (which also reportedly might be scrapped if Pakistan fellfor the U.S. blandishments). A high-level U.S. delegation led by Deputy Secretary of383State Strobe Talbott was despatched to Islamabad (May 13) to dissuade the Pakistani establishment from conducting a nuclear test. But it failed to get anycategorical assurance from Nawaz Sharif75A high-level Pak delegation led by the Foreign Secretary was in Beijing (18 May) to consult the Chinese on Islamabad's future course of action.76 What adviceand assurances Beijing gave to the Pakistanis is not known presently, but a certain common understanding between Beijing and Islamabad had been in placefor a long time. It stands to reason to assume that Pakistan had got Beijing's consent for its own subsequent nuclear tests.Pakistan was infact making intense preparations for the tests for which everything was in place (and had been so since 1987 at least), and only the nutsand bolts, so to say, had to be driven tight. Psychologically, perhapse, Pakistan could not have "lived" without the tests. For a few days Nawaz Sharifgave the impression of being in an excruciating dilemma and seriously pondering over the appeals, backed by lots of carrots, of the United States and otherWestern powers, whereas actually Islamabad was readying for its own blasts.To build up further an atmosphere of fear of Indian pre-emptive aerial attack on its nuclear installations, the Indian High Commissioner, Satish Chandrawas aroused at 1 am on the night of the 27 and the early morning of the 28th May to be warned against an imminent Indian attack. The allegation was immediatelydenied by General V.P. Malik, Chief of Army Staff, who stated categorically that "we have received no such orders, there are no such plans and there isno such movement on the ground. It was just an excuse to carry out their own nuclear tests."77 Subsequently Pakistan also alleged that there was a clearthreat of Israeli air attack in addition to the Indian strike. As is well known, if the Israelis wished to destroy Pakistan's nuclear installations, theywould have gone ahead and done it stealthily and efficiently.In any case, amidst public jubilation and celebrations Pakistan's bangs took place on the 28th and again on the 30th when one more nuclear test was conducted.There was some doubt as to how many nuclear tests were acctually conducted but that need not concern us here. Pakistan was a nuclear-weapons state now,as Gohar Ayub asserted on the 30th and vowed to retaliate to any attack from its neighbour "with a vengeance". He also made it clear that the long-rangeGhauri missile would be armed with nuclear warheads.78The primary question in their mutual relations now was where did they go from here? What next? Some people on both sides had been making provocative statements.This author has earlier mentioned that such statements coming from the Home Minister and the Minister for Parliamentry Affairs and many lesser fries onthe political spectrum in India were highly inadvisible. Some similar statements came from Pakistan too. The Pakistan Foreign Minister, Gohar Ayub Khanwent to the extent of claiming that Pakistan's nuclear weapons were superior to those of India and that in any war India would surrender in two384hours.79 Such statements from either side were both silly and inaccurate. Silly and inaccurate because nuclear weapons were weapons of mass destruction.A nuclear war would be tantamount to mass hara-kiri on both sides. The "superiority" of some nuclear weapons over others was a mythical concept which theAmericans and the Russians realized a long time ago. They knew too well that the nuclear weapons were only a deterrent and that there were no winners ina nuclear war. Despite all their mutual enmity they engaged in a realistic dialogue to work out arrangements and understandings to control any accidentalunleashing of the nuclear genie.There was considerable concern in the international community, particularly in the West, whether Pakistan's bomb would come to be an "Islamic bomb" (whateverthat might mean) and whether (a more real concern) driven to economic desperation Pakistan might turn over the nuclear knowhow to some other Muslim countriesfor cash considerations. However, Nawaz Sharif stoutly denied during a visit to Saudi Arabia that Pakistan's nuclear weapons capability was an Islamicbomb. "Nuclear explosions have no religion and we should not mix religion with the bomb," he asserted. However, Iran's Foreign Minister Kamal Kharrazihad claimed that Pakistan's nuclear capability would counter Israel's suspected atomic arsenal and make Muslims more confident.80Undoubtedly, as we have remarked earlier, Pakistan's chief objective at the moment was to utilize the fears set off in the international community by thenuclear tests of the two South Asian states to focuss international attention on the Kashmir issue. It has been raising the vocal rhetoric by many decibelson the nuclear stand-off between the two countries chiefly to secure irresistible international pressure on India, not just to resume the dialogue butinfact to ensure some kind of international mediation on Kashmir, for the second time since it tried to grab the valley through the use of armed forcein 1948 and the issue went to the UN General Assembly. To some extent it has succeeded as the resolutions of the "big powers" indicated. It was perhapsethe most horrendous challenge that India faced since the fifties. It would require the utmost national will and the ability to forge a broad consensuswithin the country to resist the pressures and maintain the Indian approach since independence of keeping intact the bilateral framework of the India-Pakistanissues, including Kashmir.Both India and Pakistan have made offers for resumption of dialogue, and there is not reason why the dialogue should not begin as early as possible. Itwould be totally unrealistic to expect any easy or early solutions. The fundamental nature of their differences over their approach to state, society andreligion made their resolution so much more difficult. But the search must continue and war was a counsel of evil.Meanwhile, India and Pakistan must function as responsible nuclear states. Whatever the modalities employed, whether it was no-first use agreement or hotlinesor other confidence-building measures, there was no escape from their385reaching such understandings as would minimize the risk of an accidental hurtling towards holocaust. The threat of rattling nuclear weapons was totallyirrelevant to the solution of problems. It would perhaps take some time before Pakistan realized that Kashmir could not be snatched away through shrillnoises threatening the rattling of nuclear weapons.INDIA AND CHINA : PROMISE AND PITFALLSThe rapid meltdown of the frost between India and china has been discussed in an earlier chapter. Apart from the exchange of delegations and personnel thetwo countries focussed on two fronts. Particular attention was paid to the expansion of confidence-building measures on the border and to the politicaldialogue at higher levels. Both were crucial for achieving an India-China detente. The two sides had already committed themselves to the maintenance oftranquility at the border and had taken a number of measures to advance their goal.The political dialogue was continued at the highest levels during 1996-1998. The first Prime Minister of the United Front government that assumed powerin 1996, H.D. Deve Gowda had a meeting with his counterpart Li Peng in Rome on 17 November (1996) where both had gone to attend the Food Summit. They reviewedthe political situation and expressed satisfaction over the steady improvement of relations between the two countries. Li Peng noted the tranquility prevailingat the borders and stated his keenness to ensure a peaceful solution of the problem. He was also reported to have said that if India and China cooperated,they could be a major force in the world.Not surprisingly, and as usual in every high-level exchange with China, the Tibetan issue, the Dalai Lama's activities and India's policy in this regardwas invariably raised by the Chinese side. So was it in this meeting. The Indian Prime Minister assured his Chinese counterpart that there was no changein the Indian policy and that the Dalai Lama was regarded as a religious leader, not as a political personage. The Chinese leader was in turn asked aboutBeijing's policy on Kashmir, and Li Peng give the stock reply that China had frindly relations with both India and Pakistan and expressed the hope thatthey would resolve their problems peacefully through direct talks.81Before the end of the month the President of the People's Republic, the General Secretary of the Chinese Communist Party and Chairman of the Military ControlCommission, Jiang Zemin came on a first visit to India by a Chinese Head of State and head of the Party. In a way India-China relations had now taken afull circle. Ziang Zemin said at a banquet hosted in his honour by the Indian President, Shankar Dyal Sharma, on 28 November that the "common interests"of the two countries far outweighed their differences, "as neither of us386poses a threat to the other". He emphasized the need for an enhanced Sino-Indian cooperation in bilateral fields and the international arena. "I am convinced",he said, "that the Chinese and the Indian people joining hands will be a great force and an important guarantee for peace in Asia and the world at large."Consultation and dialogue rather than confrontation in settling disputes marked the new international political and economic order, he observed, and asmajor powers, China and India would be making a collective contribution to humanity by becoming stronger and more developed, taking advantage of the currentfavourable international environment in which power politics and hegemonism were becoming increasingly unpopular, Ziang observed.President Shankar Dyal Sharma expressed New Delhi's willingness to continue working with Beijing to resolve the boundary question. "We must preserve inour joint efforts to find a fair, reasonable and mutually acceptable settlement within the framework of national interests and sentiments of both our peoples",he remarked. Alluding indirectly to China's military and nuclear cooperation with Pakistan, Dr. Sharma reiterated New Delhi's desire for friendship withall its neighbours. "Actions and developments that adversely affect the security environment in our region causes concern to us", he remarked and addedthat "The Government and people of India are determined to concentrate on economic and social development of our country. We do not wish to be deflectedfrom this path. China is engaged in a similar endeavour."82Ziang's visit was a goodwill visit and no formal joint statement or communique was issued, but some significant agreements were signed during this period.Among them was the agreement to maintain the the Consulate-General of India in Hong Kong after its return to Chinese sovereignty, and a confidence- buildingagreement along the line of actual control.The agreement on confidence building measures worked out by Joint Secretary T.C.A. Rangachari and other Indian officials with their Chinese counterpartsand signed on 29 November was perhaps the most important of such agreements with China. A virtual no-war pact, the two countries pledged through this agreementthat they would not use their military capabilities against each other. "No armed forces", Article I of the agreement provided," deployed by either sidein the border areas along the line of actual control as part of their respective military strength shall be used to attack the other side, or engage inmilitary activities that threaten the other side or undermine peace, tranquility and stability in the India- China border areas".Article III enjoined upon the two sides to "reduce or limit the number of field army, border defence forces, para military forces and anyother mutuallyagreed category of armed forces deployed in mutually agreed geographical zones along the line of actual control to ceilings to be mutually agreed upon".The major categories of armaments to be so reduced were listed as : combat tanks, infantry combat vehicles, guns with 75mm or bigger calibre, etc.387India and China also agreed to exchange data on their respective military forces and armaments to be reduced, not to hold large military exercises, andto inform each other in case any such change was being contemplated at the border.83Undoubtedly apart from the border and border-related issues many other issues of mutual concern, issues that exercised both India and China, like Chinesenuclear assistance to Pakistan and Tibet, one troubling India and the other China, came up for discussion between the Indian government leaders and ZiangZemin's entourage, which included the Chinese Minister for Foreign Affairs, the Minister for Foreign Trade, and the Minister for Civil Affairs. The deliberationsof the two countries included a broad overview of the international situation as well as mutual ties that among other things encompassed economic relations.Both countries were putting considerable importance on trade and joint ventures.Subsequently the then Prime Minister Deve Gowda told Nawsweek that "President Ziang made it categorically clear that they have not sold any arms to Pakistanthat could be used against India" (an assurance that needs to be taken with a pinch, if not large doses, of salt). Gowda said that he honestly got theimpression that the Chinese wanted to build a warmer relationship with India. He did not think that they would go against India's interests.84Chinese Foreign Minister (and also a Vice-Premier) Qian Qichen had conceded in his talks with I.K. Gujral (then Foreign Minister) missile assistance toPakistan but maintained that this had not changed the overall military balance in the subcontinent. He was surprised by thr tough talking that Gujral gavehim.Ziang Zemin's visit boosted India-China relations in many ways and in many directions. It encouraged the consolidation of the climate of confidence thatwas being gradually built up between the two countries. It contributed to the further relaxation of hardened attitudes and rigidities on both sides. Ithelped enliven the economic relationship also as both sides laid stress on promoting trade and joint ventures. What was more significant, it obliged Chinato take a more moderate and less partisan public stand on Indo-Pakistan issues. The new formulation on the India-Pakistan disputes were a considerableimprovement over the earlier stock answers.This was evident during the Chinese President's visit to Pakistan that followed his trip to India. As was their wont whenever foreign dignitaries came,the Pakistani leaders harped on the Kashmir issue. In reply the Chinese President advised that the "states in the region should look at the differencesor disputes from a long-term perspective, seeking a just and reasonable settlement through consultations and negotiations, while bearing in mind the largerpicture. If certain issues cannot be resolved for the time being, they may be shelved temporarily so that they will not affect the normal state-to- staterelations".85 The388reference to kashmir was unmistakable. In a way this was what India had also been telling Islamabad.This was certainly an advance on the previous Chinese position. But we should disabuse our mind of any notion that Beijing was distancing itself from Islamabador, that it had any intention of abandoning Pakistan at least in the short run. In the same visit Ziang Zemin made it quite clear that China's cooperationwith Pakistan in the nuclear field would continue, and nobody could be fooled that it was an innocent excercise in the peaceful uses of the atom. Despiteall the improvement in Sino-Indian relations, Beijing had continued to provide crucial assistance in nuclear weapon and ballistic missile technology toPakistan. But Jiang's new formulation on Indo-Pak relations carried the promise of the possibility of a lessening of Beijing's commitment to Pakistan overa longer period of time if the India-China detente stayed on course.The process of improvement of India-China relations continued as well as the exchange of visits by senior officials and political persons, not excludingsenior military personnel. The Defence Ministers of the two countries had already exchanged visits in a process of enhancing confidence in the securityfield. In this ongoing process the Vice-Chief of staff, Lt.General V.P.Malik* was in Beijing towards the end of May 1997 for a week-long visit at the invitationof the Chinese army authorities. Welcoming him Chinese Defence Minister, Chi Haotian sought to assure him that China would never seek hegemonism and thatit desired the development of friendly relations with India as it was essential for peace and stability in the Asia-Pacific region and in the world asa whole. He was confident that the senior Indian army official's visit would boost the exisiting friendly relations between the armies of the two countries,coming as it did in a series of exchanges between senior leaders of the armies of the two countries.86 We might note in parenthesis that General Malik'svisit was followed in April 1998 by a visit to India by the Chinese Vice-Chief of Staff but, as we shall see, under less auspicious circumstances.The new Prime Minister of the UF government, Inder Kumar Gujral carried on with the China policy that had been in place now for nearly a decade, that ofactively seeking development of relations with Beijing while privately conveying its anxieties on various issues of concern in regard to Chinese policiesor actions, anxieties which have already been detailed above.The 10th meeting of the joint working group was held in Delhi on 4-5 August 1997. The two sides exchanged the instruments of ratification of the agreementon confidence- building measures that had been signed during Jiang Zemin's visit and concluded a protocol on cooperation between the foreign offices ofthe two countries. But there was no doubt that some momentum had been lost in the progress towards confidence- building measures, delineating the lineof actual*He is now Chief of Staff.389control (LAC) and resolution of the border problem, the Chinese were yet to provide India with a map that would indicate their perception of the LAC. Theyappeared to be chary of laying their cards on the table. Nevertheless the very fact that the border had become quiet and fairly tranquil was beneficialto their relations.High-level contacts continued with the visit to India of Wei Jianxing, member of the Standing Committee of the Politbureau of the Chinese Communist Partyin December 1997. The then Prime Minister, I.K. Gujral was officially stated to have told the visiting dignatory that "the induction of sophisticated weaponsin Pakistan always acted as a destablizing factor in the region." Gujral argued with Wei that missiles posed a threat to the security environment in thispart of the world. Wei was said to have told Gujral that China had not supplied any missiles to Pakistan. However, despite this divergence of views, bothGujral and Wei shared concerns on many global issues like human rights and non-alignment. They reiterated the two countries' commitment towards findinga "fair, reasonable and mutually acceptable settlement" of the border dispute.87NEW GOVERNMENT AND CHINAQuestion marks had been put before the foreign policy of the BJP-led 18-party coalition government that came into power in Marel 1998. Would the new governmentmaintain the continuity of foreign policy or would it introduce major changes? What stance would it adopt towards China in particular? The new Prime Minister,Atal Behari Vajpayee assured Parliament that there would be no major change in foreign policy. The continuity in foreign policy would not be affected.However, the new Defence Minister George Fernandes seemed to have set the cat among the pigeons, or rather set off a media bomb by publicly stating, whatwas always an underlying subterranean feeling, that the greatest "potential threat" to India's security came from China. He declared China as "potentialthreat number one" with its military and naval involvement beginning to "encircle" India along the border with Pakistan, Burma (Myanmar) and Tibet. Hisinterview with a television network and his speech at the Krishna Menon Society taken together, Fernandes cited four important recent developments in supportof his assertion.One, he drew attention to the transfer of missile technology and nuelear know-how to Pakistan. Second, the nuclear weapons stockpiled in Tibet along theborder with India. He disclosed that there had been a lot of elongation of military airfields in Tibet, where the latest versions of the Sukhoi aircraftwere being parked. Third, on the eastern frontier with India, Beijing had trained and equipped the Mynmar (Burma) army whose strength had shot up from1,70,000390to 4,50,000. Fourth, the scenario of the Chinese involvement along the Indian borders from Pakistan right up to Burma, including Tibet, extended to theIndian Ocean. The Coco Islands of Burma, on the northern tip of Andaman and Nocobar, had been taken on loan and converted into a monitoring post throughinstallation of "massive" electronic surveillance equipment, he asserted."There is no doubt in my mind", the Defence Minister observed, "that China's fast expanding navy, which will be the biggest navy in this part of the world,will be getting into the Indian Ocean fairly soon". He pointed to Beijing's plans to transform the Coco islands into a major naval base - which would bea direct threat to India - and the construction of harbours on Burma's western coast where Chinese ships could be towed in. "To underplay the situationacross the Himalayas is not in national interests... I think there is a reluctance to face the reality that China's intentions should be questioned. Thisis where our country had made mistakes in the past for which we paid the price." He crowned all this by asserting that while the previous governments hadnot ruled out the nuclear option the new government had "ruled it in".However, he also observed that "India is against war and believes in peace. Discussing confidence-building measures with our immediate neighbours is notenough. We want negotiations to be carried to a decisive stage while discussing CBMs" and addded that "We must get down to serious talks given the factthat countries in the neighbourhood are in possession of weapons of mass destruction that could cause havoc". 88 A day later the Defence Minister alsostated that his ministry was looking into reports that China had constructed an airstrip in the "no man's land" along the border in U.P. an assertion demicllater by the Prime Minister.89This author has quoted extensively from what George Fernandes actually said so as to guard against criticism about media - led sensationalism for Fernandeshimself complained subsequently that newspaper headlines had put words into his mouth.Not surprisingly, Fernandes' statements stirred a storm of controversy within the country and a stinging rejoinder from Beijing Most of the opposition partiesexpressed strong reservations about what they regarded as George's fusillades and believed that they had damaged India-China relations. They did not thinkthat anything new had happened to warrant such statements90. A Chinese Foreign Ministry spokesman, using language not normal in diplomatic parlance, reekingsomewhat of arrogance, described the argument that China was the biggest threat to India as "absolutely ridiculous and not worthy of refutation". Assertingthat his accusations regarding China's relations with other countries was "utterly fictitious and entirely baseless" he observed that "remarks by Fernandeshave seriously sabotaged the favourable atmosphere for improving bilateral relations between China and India. China cannot but express its utmost regretand resentment"91391The media speculated a great deal on George Fernandes speaking out of cue and the Prime Minister's Office and the Ministry of External Affairs blushingwith embarrassment, but the evidence was mixed on whether the Prime Minister was really upset at his Defence Minister's calculated utterances on a highlysensitive issue. The Ministry of External Affairs (headed by the Prime Minister who had retained the Foreign Affairs portfolio) in a considered statementissued on 6 May reiterated India's commitment to develop "a friendly, cooperative, good neighbourly and mutually beneficial relationship with China, ourlargest neighbour". The statement noted that "steady improvement in India-China relations" in recent years towards building "a constructive and cooperativerelationship oriented towards 21st century" so that their "respective economies are developed" and "standard of living of their peoples improved". Thestatement pointed out how there had been high-level political dialogue, increased trade and economic cooperation and growing interaction among "academicians,think-tanks, officials and people from different walks of life". India saw the relationship as one in which "the two sides would be responsive to eachother's concerns".92Briefing newsmen, the External Affairs Ministry spokesman observed: "This is an extremely carefully-worded statement drafted at the highest level. Beyondthat I am not in a position to say anything. Hopefully, the controversy should end here."93 This appeared to indicate that the Prime Minister wished toset the record straight and limit the damage that his Defence Minister seemed to be doing. It was also followed by the Army Chief, General V.P. Malik'scomment to newsmen that "the Chief of Army Staff of China and myself have recently met and relations between the two countries are improving."94 However,the fact that the Prime Minister, otherwise quite loquacious, chose to remain mum and did not, or at least was not reported to have contacted the DefenceMinister could be construed as indicating that perhaps he was not really that upset or displeased with the latter's histrionics.Undoubtedly many of the concerns mentioned by George Fernandes were excercising the minds of many people in India. This author has drawn attention of hisreaders to all these (and more) concerns of India. But it is arguable whether the Defence Minister of this country should have been publicly identifyingits largest neighbour as "potential threat number one "and, in a way, reactivating two fronts against India. It appeared to be a needless excercise inengaging the Chinese, not in confidence- building talks, but in an acrimonious public debate. India and China had been engaged in a gradual and measuredprocess of normalization of relations, building of contacts at every level, restoring and preserving peace and tranquility at the border, adopting a step-by-stepapproach to moderating the anxieties of both the countries and resolving the bilateral issues, including the border dispute. George Fernandes' public pronouncementsimperilled that process without any visible compensatory gains.392The only justification that could be given for these altogether unnecessary forays into the area of foreign policy was that he was preparing the groundfor providing a larger perspective for India's nuclear blasts that took place a week later. This is, of course, assuming that he was privy to the go- aheadsignal that had been given in the highest secrecy by the Prime Minister to the top scientists involved for carrying out the tests. Even so, public denunciationswere no substitute for hard-headed diplomacy and it was wholly unnecessary in the present era in international relations to officially brand one poweras the chief threat to your country. The same concerns could be conveyed in a more nuanced and sophisticated manner.CHINA AND INDIA'S NUCLEAR TESTSIt is noteworthy that China's first reaction to India's nuclear tests was rather restrained and moderate. China regretted India's decision to hold nucleartests and cautioned that these would heighten tensions and insecurity in the South Asian region. But China's second reaction was very sharp, borderingon the abusive. Three days after the blasts, the Chinese Vice-Foreign Minister Wang Quangya summoned the Indian ambassador, Vijay Nambiar, and conveyedBeijing's displeasure in strong terms."This act of India", a foreign ministry statement read, "is nothing but an outrageous contempt of the common will of the international community for thecomprehensive ban on nuclear tests and a hard blow to the international effort to prevent nuclear weapon proliferance". Beijing accused India of usingnuclear tests as part of a strategy to dominate South Asia while trying to point to Beijing as a threat to regional stability. The Chinese Foreign Minister,Tang Jiaxuan, had a telephonic conversation with the U.S. Secretary of State, Madeleine Albright and according to Xinhua, both sides held that the internationalcommunity should take a clear-cut and firm stance on the matter and described the Indian tests as "unacceptable for the international community"95 In yetanother angry reaction from Beijing, Xinhua released a signed statement that accused India of aggression against China in 1962, claiming that India wasaccupying 90,000 square kilometres of Chinese territory.96In a similar and even sharper vein the PLA paper Jiefang Junbao, alleged that "due to India's policy of aggression and expansion towards its neighbouringcountries, there existed a pattern of "India's overlordship" between weak and small nations in South Asia and India". As far as China was concerned, Indiahad occupied more than 90,000 kilometres of Chinese territory located on the eastern sector of the Sino-Indian boundry region and maintained its militarysuperiority over China along the border. The commentators writing in the paper also accused India of believing itself to be the "natural successor to thegreat British393empire" and striving to bring the Indian Ocean in its own sphere of influence. They reminded New Delhi of the possibilities of the Gulf countries joininghands to deal with India and of the territorial claims of Indonesia and Malaysia over Andaman and Nicobar peninsulas of India.The commentators, taking a big swipe at Indian strategies, noted:"India thinks that since its strategic intention on the land has been basically fulfilled, it must begin to pursue its "regional deterrent" strategy toexpand its strategic scope to the Indian Ocean. The real meaning of this strategy is to continue to take an offensive posture against Pakistan with superiorforce. In other words, while preparing to fight a full-scale war against Pakistan, India must have the capability to thoroughly destroy the country. Indiahas taken a defensive posture against China to maintain its military superiority in Sino-Indian boundary region to consolidate its vested interests andeffectively contain China. In meantime, it is waiting for the opportune moment for further expansion to continue to maintain its control over weak andsmall countries in South Asia, and defend its hegemonist status in the region. India must advance southward to effectively subdue navy of the neighbouringsmall countries, contain navy of big nations to the maximum limit, and also control the waters of the Indian Ocean to the maximum extent. Over the past50 years since its independence, to establish and consolidate its hegemonist status in the South Asian region, India has successively fought four larger-scalepartial wars against Pakistan and China."The article gave a detailed account of India's nuclear and space research programme and concluded97:"India's practice of openly conducting nuclear tests further exposed its ambition of scrambling for military hegemony in the region. Following its independence,India inherited the mantle of the British imperialists and pursued the policy of aggression and expansion. In 1962 India illegally nibbled at a large amountof China's territory and stirred up the Sino-Indian border conflict; in 1948, 1965, and 1971, India stirred up the Indian- Pakistani wars on three occasions,disintegrating Pakistan and occupying two-thirds of Kashmir territory. Under such a situation, however, India still regarded China and Pakistan as itsgreatest threat, believing that only the development of nuclear weapons could enable it to resist China and Pakistan, scramble for the initiative in thearmament race, and consolidate its hegemonic position in South Asia.Of course, India could reply back that after having railed against nuclear monopoly by a few powers, Beijing was now using the same logic as that of the"imperialist powers" that it denounced not so long ago, just because it had joined that exclusive club. China had so far blasted off at least 44 nucleartests and the last series as late as June-July 1996. It was, therefore, illogical for China to take a high moral stand against Indian tests.However, the more vituperative reactions from Beijing could be related to Prime Minister Atal Behari Vajpayee's letter to President Clinton in defence of394the nuclear tests (published by the New York Times) in which he held India's relations with China, its nuclear assistance to Pakistan and to the latter'sstatus as a covert nuclear weapons state as the rationale behind the nuclear tests of India. He referred to the deteriorating security environment, particularlynuclear environment, faced by India during the past some years. "We have an overt nuclear weapon state on our borders, "Vajpayee wrote to Clinton, "a statewhich committed armed aggression against India in 1962. Although our relations with that country have improved in the last decade or so, an atmosphereof distrust persists mainly due to the unresolved border problem. To add to the distress that country has materially helped another neighbour of ours tobecome a covert nuclear weapons state. At the hands of this bitter neighbour we have suffered three aggressions in the last 50 years", and it had beenfanning terrorism in Punjab and Kashmir and elsewhere in India, Vajpayee wrote.98The Chinese were no doubt reacting to Mr. Vajpayee's accusations, but they too were overreacting and in a way exposing their nexus with Pakistan. They werein fact demonstrating the lack of consistency in their own position on the question of the NPT (and of course their practice). It is instructive to recallthe commentry (written perhapse by Mao Zedong himself) published in the Renmin Ribao of 13 June 1968":What sort of thing is this "treaty on non- proliferation of nuclear weapons"? To put it bluntly, it is something imposed on the non-nuclear states to bindthem hand and foot, Under this treaty, the U.S. imperialists and Soviet revisionists are not only allowed to produce and stockpile nuclear weapons andincrease the number of their nuclear bases; they also undertake no commitment whatsoever not to use nuclear weapons against the non-nuclear states. Thelatter, on the other hand, are totally deprived of their right to develop nuclear weapons for self-defence and are even restricted in their use of atomicenergy for peaceful purposes. As the saying goes, "the magistrates are allowed to burn down houses while the common people are forbidden even to lightlamps." In reality, this is tantamount to a demand that other countries accept for ever the U.S. imperialist and Soviet revisionist position of nuclearmonopoly and place themselves at their mercy. This throughly unequal treaty dished up by the U.S. imperialists and Soviet revisionists is even more unscrupulousand outrageous than the "tripartite treaty" they cooked up five year ago.China had now joined the ranks of the "magistrates". India was not a signatory to the NPT and was, therefore, not bound in interational law to abide byits provisions. However, having taken note of China's inconsistencies, it needs to be restated that it was both unwise and somewhat incorrect to have putIndia's nuclear tests in the context of China and Pakistan in view of the larger historical struggle in the international arena that India had been engagedfor almost half a century.This public naming of China could be said to be the major factor in the subsequent Chinese outbursts against India. The Chinese hackles had already395been raised by George Fernandes' earlier declarations about China being the major potential security threat. The government's strategy of loudly proclaimingChina and the Sino-Pak nexus as the major threats was an unbalanced scenario to raise in the situation that India faced. It did not convince the Americansbut embittered China and indirectly contributed to the strengthening of the Sino-Pak connection. It was one thing for a government to be alive to the potentialchallenges and to take appropriate responsible action and also one thing for academcians and analysts to objectively analyse a situation, but quite anotherthing for a government to proclaim its "enemies" from the housetops. It was wholly unnecessary to start a new cold war with China.Beijing continued to support Pakistan in all the international fora. In the meeting of the so-called P-5 (that is the five big nuclear powers) China wasthe only country to blame India for being principally responsible for Pakistan's nuclear tests. India-China relations had slipped again into an abrasivephase.India recalled its ambassador Vijay Nambiar for consultations (he has since gone back) and the Government considered various measures for improving relationswith China. It is not going to be so easy as some people might imagine. It would take quite some while and quite some doing before the relationship couldbe put on the track of normalcy again. India and China have to learn to live together as friendly neighbours like France and Germany. India has to be alittle less edgy about China's other relationships and China has to realize that the realpolitik approach of the 19th Century in which its policies weresteeped was somewhat less appropriate to the international currents of the 21st century. In any case, now that India was a declared nuclear state, andChina was already an internationally recognized one, the most appropriate course for India, that would serve the interests of both the countries, was tointensify the dialogue with the Chinese, to promote confidence-building measures, and to foster greater trust in each other that would, hopefully, overthe long run moderate the Chinese commitment to Pakistan and result in a more enduring, peaceful relationship between the two big neighbouring countries.Hopefully also, a healthier power symmetry between India and China should help in achieving a new understanding with our largest neighbour.This author suggests the following four steps to be taken by India and China to return to the path of building confidence and trust:1. Both sides should stop attacking each other and agree to cease the mutually hostile polemics.2. Both sides should start talking and addressing themselves to each other's concerns and resume the trek towards establishing greater confidence and trustin each other.3. The two countries should not only resume exchange of non-official personages in every field but also intensify the non-official interaction, includingin the area of foreign policy so as to achieve a better understanding of each other's point of view.3964. The two countries should strive to raise the level of their economic relationship and step up trade and joint ventures so that their economic relationshipcan gradually inure them against political volatality.If there were will on both sides the relations could be repaired in a shorter period than appears likely at present.OPPORTUNITY AND CONCERN : INDIA-USAIndo-U.S. relations can be summed up in two words : opportunities and concerns. There were opportunities from both sides and concerns on each side, oftenthreatening to overwhelm the opportunities, but never quite succeeding, making for a complex relationship where the trees may often be confused for thewoods. The opportunities continue to lift and the concerns continue to dog this relationship.There were opportunities earlier also but fresh opportunities had enfolded in the last six years or so. On the positive side, from the U.S. point of view,there was increasing recognition that India was home to every sixth human being in the world, that it had immense potential as a new market for U.S. goodsand capital and that its economic reforms portended the possible emergence of a new economic player on the scene. The growing "market-friendly" policiesof New Delhi were offering new opportunities to American investors. In the words of the new U.S. Assistant Secretary of State, Karl F.Inderfurth, U.S.firms of all sizes were becoming increasingly engaged in a potentially "enormous and profitable" market. Trade promotion organizations such as India BusinessCouncil and the India Interest Group had "drawn the support of some of our largest and most important corporations, and their work is complemented by governmentto government institutions such as the Indo-U.S. Economic-Commercial Subcommittee and the U.S.-India Commercial Alliance".100The growing economic relations (already noted in Chapter 2) were the brightest spot in Indo-U.S. relations. They provided an insusrance against high volitilityand imposed constraints on the unnecessary widening of political differences. The United States had survived the economic decline of the early nineties.Its economy was on the bounce again with low inflation and low unemployment. It remained the wealthiest market as well as the largest trade partner ofIndia. India's economic performance was somewhat erratic with high growth registered in 1994-96 and a recessionary decline in 1997-98. Nevertheless theoverall economic situation had not demonstrated the kind of dismal picture that the East and South-East Asian economies were currently presenting. Theinterest of U.S. business in the Indian market had not flagged and it was necessary to strengthen U.S. engagement in the Indian economic development. Thiswould help both sides to keep the relationship on a healthier track.397Economic relations too have had their share of disputes and disappointments. The U.S. wants to see the complete opening of the Indian economy, includingparticularly the insurance and financial sectors. The U.S. is also irked about the quantative restrictions on certain items of Indian imports and sincethe establishmment of the World Trade Organization (WTO) it has been urging it to compel India to lift its import restrictions. The potential of U.S. investmentsin India has yet to be realized. From the Indian point of view a particular area of disappointment has been the transfer of high technology from the UnitedStates. A much-hailed technology agreement had been signed between India and USA, but it has almost remained on paper. The U.S. has pursued a fairly restrictivepolicy on the transfer of technology under one excuse or another, mostly as a consequence of India's refusal to toe the American line on non- proliferation.Still, the economic relationship was an important component of their total relationship and was optimistically viewed by both sides. It also needs somerepitition that a shared democratic system creates its own affinities and wards off against overly hostile postures towards the other side. The argumentcan be overstated as the relationship has remained at the level of an uncertain smile, and Washington has often chosen to feel more comfortable in thecompany of dependable dictators than critical democracies abroad. Yet, undoubtedly India's sustained democratic functioning over the last half centuryhas created a favourable constituency in the United States which it must nurse and enlarge without being apologetic.While the opportunities are many, some of them fully shared by the two countries, the concerns of the two are almost totally divergent. Washington's concernsare almost wholly related to nuclear and missile non-proliferation in the region and India-Pakistan relationship.In his testimony before the Senate Foreign Relations Committee during the hearings for his nomination as Assistant Secretary of State, a post held earlierby Robin Raphael, Karl Inderfurth strongly underlined U.S. preoccupation with proliferation in the region. He made clear the U.S. worry over the nuclearweapons and ballistic missiles programmes of India and Pakistan. Emphasizing that the U.S. had worked hard to discourage further development (in otherwords the capping) of these systems, he assured the Committee that Washington would continue to maintain resolution of its "proliferation concerns as atop priority for us in the region." No one should be under any doubt that in the U.S. view, global non-proliferation arrangements such as the CTBT anda convention to ban the production of fissile material for nuclear weapons would offer Pakistan and India "meaningful steps to enhance their security interests."1India, on the other hand would like to believe that the world extended beyond South Asia and what happened beyond it could be of great concern to India.It was unwilling to accept that non-proliferation be kept confined to the398South Asian region, in effect to India and Pakistan. India could be subject to other proliferation threats and blackmail than the one emanating from Pakistan(or from India to Pakistan - in the evenhanded Washington view). India also remained rooted to its view that a unidimensional approach to proliferationdid not enhance either Indian or universal security. Not just horizontal but vertical proliferation also must end; not just the modest nuclear arsenalsor capabilities of the smaller powers should be controlled, but the terror weapons, the WMD should be dismantled universally; not just nuclear arms control,but nuclear disarmament should be the objective and the goal.In the Indian perception, Washington was obsessed by Indo-Pak relations and the maintenance of a mythical parity between the two countries. If a U.S. dignatoryvisits India, he must also go to Pakistan, otherwise the tour appears to be incomplete. If a U.S. President meets the Prime Minister of one country inthe subcontinent, Washington develops an uncomfortable feeling unless he meets the other country's prime minister also, almost at the same time. The attemptat parity can be taken to amusing, if not pathetic, limits. Washington keeps Indo-U.S. relations hostage to Indo-Pak relations.Certainly there have been times, at least recently, when the United States administration sought to convey the impression that it would work towards developingan independent and completely bilateral relationship with India, and more recently, it has invested the Indo-U.S. talks with the dignity of "strategicdialogue". But the tendency is to quickly backslide to the India-Pakistan syndrome, for Pakistan would come back in the U.S. perception as "a nation thathas been a valuable friend of the United States during the last five decades and a nation to which we have turned for advice and assistance on many occasions".102It was in line with this kind of approach that President Clinton invited the Indian Prime Minister, I.K. Gujral for a meeting in New York. The U.S. Presidentwas scheduled to address the UN General Assembly on 23 September. The Pakistan Prime Minister was also reaching the UN around this time and a meeting betweenthe two heads of government was slated. Washington apparently believed that it was necessary for the U.S. to express its vote of confidence for Nawaz Sharifto bolster his position domestically.Mr. Gujral, on the other hand, was reaching New York on 29 September for his address to the General Assembly. Washington was obviously uncomfortable withthe U.S. President meeting only one prime minister and not the other one of the subcontinent. So an invitation and a request came from the President tothe Indian Prime Minister to prepone his visit to the UN and meet him at New York on 22 September.103 This could also provide an opportunity to PresidentClinton to urge the two prime ministers to intensify their dialogue with whatever help they needed from Washington.Whatever the circumstances sorrounding the invitation, New Delhi had to weigh carefully the advantages of a summit meeting with the U.S. President to399carry forward the Indo-U.S. dialogue. India's two concerns in this regard were largely allayed by the U.S. administration. Washington made it clear thatit had no plans to hold a trilateral meeting of the three heads of government. It also assured India that the focuss of the talks would be on Indo-U.S.relations. Karl Inderfurth explained that normally U.S. goals would be to strengthen bilateral relations and also to explore with both leaders where theywere leading their countries and where they would like to see their countries several years down the road. He described Gujral as "a man with his own visionin foreign policy" and expressed the U.S. view that "it is a vision which is quite compatible with that of President Clinton." The new U.S. approach wasto place the areas of disagreement with the States of the region in the "broader context of the full relations" and to move away from the ups and downsof the past.104Gujral took his Finance Minister P.Chidambram and Foreign Secretary K.Raghunath with him. The 40-minute meeting took place on 22 September, too brief foran indepth interchange of views but possibly providing an opportunity for clearing some cobwebs and strengthening the India - U.S. dialogue. Accordingto the media reports President Clinton told Gujral and his aides that the world was waiting for a resolution of the Indo-Pak differences as the two countriescelebrated their 50 years of independence after the hopeful developments in the Northern Ireland peace talks, while grieving over the stalling of WestAsian talks and the deadlock over Cyprus between Greece and Turkey.105As a matter of fact and contrary to press reports, neither Clinton nor his aides spoke very much, rather they listened - apparently attentively and sympathetically- to the exposition of India's point of view. That being so, it gave more time to the Indian side to expound its perceptions. Gujral outlined in detailthe security problems India faced and its legitimate concerns in this regard, explaining cogently why India could not sign the CTBT, faced with the peculiarsecurity problems that it did. He also elaborated his view (known as the Gujral doctrine) that in the new era economic developments were taking precedenceover politics, creating a new climate for cooperation. He mentioned the new developments in SAARC and the plans to set up the South Asia Free Trade Association.Gujral also reportedly pointed out to the U.S. President India's record as a highly responsible country in regard to the entire regime of internationaltreaties.106The Indians took comfort from the fact that President Clinton did not mention the word Kashmir during the meeting with Prime Minister Gujral and that thetalks had led to better atmospherics for a more positive ongoing dialogue evidenced from the line up of important dignataries set to visit India in thecoming months, Secretary of State Madeleine Albright and before her Thomas Pickering, Undersecretary of State, and subsequently Commerce Secretary WilliamDaley, to be climaxed by a visit by President Clinton in 1998.107400It must be understood that such talks are invariably held in a cordial atmosphere. Clinton was not going to lecture Gujral on Pakistan or Kashmir, nor wouldGujral be interested in scoring points. The whole purpose of the summit excercise was to strengthen relations and broaden the areas of agreement or atleast the understanding of each other's point of view. According to spokesmen from both sides, Clinton told the Indian side that he was eager to deepenthe bilateral relationship. The two sides tried to identify the areas where they could cooperate. Clinton clarified to the Indians that he did not wishto interfere in any way in the outstanding issues that India had with Pakistan, although the U.S. strongly supported the Indo- Pakistan dialogue that wasunderway.In a recent conversation, former Finance Minister P.Chidambaram took a very positive view of the mini summit in New York and confirmed this author's informationthat it was the Indians who did most of the talking. He himself briefed the U.S. President and his aides on the economic reforms of India and the outlookahead, which the U.S. side listened to even more attentively and sympathetically. This much appeared to be evident from the nod that Clinton gave to Chidambaram'srequest for a longer period than the U.S. was earlier insisting upon for lifting quantitative restrictions on certain imports. Soon after the talks camethe U.S. clearance signal for India's request in regard to quantitative restrictions.In a subsequent letter that he wrote the chief ministers (reminiscent of Jawaharlal Nehru's practice) about his New York trip, Prime Minister Gujral saidthat he had told the U.S. President about the need for the countries of South Asia to settle issues among themselves through direct dialogue and that Clintonhad been appreciative of the new orientation in India's policy towards its neighbours. Gujral also wrote in his letter to the CMs that outside interventionto resolve bilateral issues among South Asian countries tended to have an adverse impact. The U.S. President backed India's ongoing dialogue with Pakistanand ruled out any interference in resolving mutual issues.108The Gujral-Clinton summit provided some momentum to the Indo-U.S. relationship. Those dealing with the U.S. policy in the region in the State Departmentwere making efforts to cut loose from the straitjocket imposed by the India-Pakistan syndrome, to a large extent of Washington's own making, and raisethe bilateral content of the relationship. That was the perspective in which the visits of both the Under Secretary of State for Political Affairs, ThomasPickering, followed by that of the Secretary of State Madeleine Albright took place.For the first time the U.S. officials extended the prestigious acronym of "strategic" to the ongoing dialogue between Washington and New Delhi. Senior StateDepartment officials said on the eve of his visit to New Delhi that Under Secretary Thomas Pickering would engage his Indian counterparts in a "strategicdialogue", although what "strategic" meant was not really clear to any one.401There were so many "straegic" dialogues going on. The U.S. was also engaged in a "strategic" dialogue with China, as well as with Pakistan. Russia was engagingChina in a "strategic" dialogue. India and Russia were "strategic" dialogue partners, and so on so forth.The State Department officials themselves denied any implication of "political, military or geostrategic connotation". It only meant a "high-level, comprehensiveand forward-looking dialogue" which led to an agenda "where issues can be resolved and agreements can be reached" - a rather streched meaning of the termstrategic. The State Department offficials briefing the press added that such dialogue must "strengthen our relations, lead to joint projects and sharedviews". The Indo-U.S. dialogue, they said, was not a "grocer's list", checking off items. "We want to examine underlying assumptions, ... get a bettersense of the futures that are being projected by the countries" (India and Pakistan), they added.109With this kind of background agenda Thomas Pickering came to New Delhi on 17 October (1997) and then Madeleine Albright a month later. Both visits weresignificant in developing greater mutual understanding and areas of co-operation. Although the Secretary of State's visit had to be shortened because ofdevelopments in the Gulf region, she kept her major engagements in New Delhi. The two - hour discussion with Prime Minister Gujral and his aides was reportedto have been "broad based", encompassing bilateral, regional and international issues. Foreign Secretary Raghunath described the talks as having "openeda new chapter in Indo-U.S. relations with new areas to be taken up for the dialogue"110Taking an overall view of the agenda of all these visits from both sides, we can take note of the concerns and issues in the accelerated dialogue. Bothsides had been deliberating with each other on issues of international security and world peace as well as peace and security in the region. Quite clearlythe U.S. would like to see India signing the NPT and CTBT as well as adhering to the Fissile Material Cut-off Treaty (FMCT). It was also using all itsleverage to halt (and subsequently reverse) India's ballistic missile programme. It was keen to see the resolution of the Kashmir issue, the observanceof human rights and the intensification of the Indo- Pakistan dialogue. Washington was equally interested in securing better conditions for trade withand investment in India. It was urging India to carry forward the process of economic reforms and further open up the economy for foreign competition,abolish or sharply restrict the import restrictions and particularly restructure the financial sector. Yet, the Americans remained greatly interested indeveloping economic relations with India.India was conveying during these talks its concern about the discriminatory nature of the international regimes that were being set up, including the NPT,CTBT, FMCT and MTCR. Even while giving in to U.S. pressure and putting a hold on Agni and Prithvi, India was resisting the signing of the NPT and the402CTBT and other such one-sided international regimes. It was urging the United States to use its leverage with Islamabad to cease its terrorist activitiesin Kashmir and elsewhere in India. Above all, India strove (with very limited success so far) to overcome the U.S. insistence on maintaining a postureof parity between India and Pakistan.India was also lobbying (again with rather limited success) for support from the United States for its bid for a permanent seat on the Security Councilif and when it was reformed and expanded. As yet Washington was non-committal, if not opposed. New Delhi was probing Washington for cooperation in thepeaceful uses of nuclear energy. India was particularly unhappy at the highly restrictive policy that Washington pursued with regard to technology transfersto this country. It was keen on raising the level of trade and securing larger investments from the U.S. and was trying to smoothen the irritants overintellectural property rights and the restraints on imports.Clearly, to anchor the relationship, India must focus on economic cooperation. Without giving up its basic standpoint on its security-related issues andon its fundamental interests, India needs to step up its economic relationship with the United States, and to make more effective use of its economic diplomacywith the U.S. In the United States too those who deal with trade and business have a somewhat different perspective than those whose business it is todeliberate upon and decide security issues. We have noticed this earlier in the kind of statements that came from the political wing of the Clinton administrationand those coming from the trade and commercial wing.Now also, we have noted the messages that were coming from the political side. These can be contrasted with the perspective presented by the U.S. CommerceSecretary, William Daley who visited India in December 1997. It was also not without significance that the Commerce Secretary decided to go ahead withhis visit despite the collapse of the Gujral government. Speaking at the Council on Foreign Relations on the eve of his visit, the Commerce Secretary describedIndia as "one of the world's most dynamic emerging markets with an economy growing at 6-7 per cent a year" and predicted that India would "overtake Chinaas the world's largest economy by the middle of the 21st century."Daley made it clear that his mission would not be deterred by the political uncertainty in India. Emerging markets, by definition, did not guarantee a smoothride. "President Clinton", he said, "targetted them with the knowledge and understanding that there might be bumps along the way. We cannot give up onIndia and other developing countries during times of political or economic stress. Rather, we must step up our engagement, to help promote stability andenhance our own strategic interests".111 Dramatic geopolitical changes in recent years had offered the chance of a new beginning, and President Clintonhad seized the opportunity, "putting India at the centre of our national export strategy", he said.403He took note of India's deeply-rooted commitment to democracy and believed that Indian democracy predated 1947, going back to ancient village republics,which adhered to the parliamentary principles. Such commonalties apart, India was bristling with investment opportunities, including its staggering infrastructureneeds, and Daley held forth the prospect of an estimated $ 33.7 billion on its road network in the next seven or eight years, about $ 53 billion in thenext decade to add 82 million telephone lines and $ 7.3 billion in port modernization.It was not that there were no complaints. As the Commerce Secretary put it, "part of the problem is that, too often in India, contracts signed and agreementsreached, have not translated into projects completed and bills paid". For every dollar of American investment actively circulating in the Indian economy,he pointed out, there were seven more dollars that had received approval, but were waiting on the many individual clearances still required to move a projectfrom the drawing board to full implementation.112These were the concerns that India should have been addressing expeditiously and this was the route that India should have determinedly pursued to bringabout greater stability in Indo-U.S. relations. Not that other issues did not matter, nor that important differences on those issues would not remain,causing many hiccups, but these differences would have been and could be significantly moderated, if the other route was widened, asphalted and made abusy two-lane road. Naturally, both the countries had their own economic interests to preserve, but there were no irreconcilable contradictions, and manyof the issues could be settled in a give-and-take spirit.THE NUCLEAR FALL-OUTThe above was written before India's nuclear tests. The basic picture remains as discussed above, but certainly the nuclear tests of India have introduceda new element in Indo- U.S. relationship that would impinge adversely on this relationship in the short term , but could also bring about a new dimensionin their relationship in the long run.Undeniably, Washington was taken by total surprise at the nuclear tests at Pokhran. Their elaborate spy system, both human and electronic, had failed. Thisadded to the anger and anguish of the United States. India had already upset Washington with its implacable refusal to sign the CTBT, but now this defiancethat went against the grain of Washington's nuclear philosophy was entirely unacceptable. In any case U.S. laws made for almost automatic application ofsanctions against any country that broke the nuclear monopoly of the five powers. President Clinton announced in Berlin on 13 May that he had ordered theimposition of sanctions against India.113404A great many aggresively hostile statements came from the official spokesmen in Washington. The scope and range of sanctions will not be clear for manymonths, if at all they become totally clear. There are so many different elements involved. Direct government to government assistance is rather modest,but sanctions would include loans and credits that India might be otherwise eligible for, the approvals and guarantees that the EXPORT-IMPORT Bank (EXIM)extended to U.S. companies and exporters, and U.S. opposition to approvals of loans from international financial institutions. The Americans have beentalking in terms of punishing India to the tune of $ 21 billion.114 This was obviously exaggerated, and certainly the impact can only be known fully overone or two years.The range of sanctions was finally announced on 18 June that included stoppage of pending investments, new financial commitments and military assistance.The details were handed over by the State Department to the Indian ambassador in Washington. All U.S. foreign assistance to India (and Pakistan) was cutoff with the exception of humanitarian aid such as food or other agricultural commodities. New U.S. government credits of sales to both countries werehalted (India was receiving about $ 300 million annually in such support). U.S. banks were prohibited from granting loans to the Indian and Pakistani governments,but the banks could continue to do business with private firms in India and Pakistan. The U.S. would oppose all loans (except humanitarian) by the WorldBank, the IMF and other international financial institutions to India and Pakistan (expected to cost India about $ 2.5 billion)115The sanctions turned out to be a degree less harsh than was earlier expected or presumed. Partly, it was believed, because the Clinton administration didnot wish to put a back- breaking burden on Pakistan which was more vulnerable than India to the rigours of the sanctions. Again there were many grey areasand many uncertainties. The estimates of the price tag varied from $ 1.7 billion to $ 10 billion in many Indian circles. But this still was in the realmof guesswork. It took account of the expressly stated projects and proposals that had been put on hold but not what could possibly be sanctioned by theinternational financial institutions but would not be now. Moreover, there could be no doubt that looking for alternative sources of credit, the cost couldbe appreciably higher than it would have been otherwise. The presumption of this author was more correct that sanctions would hurt for quite sometime andthat the country should be prepared for the new burdens.It appeared that functions were being divided with one set of senior-level functionaries in the Clinton administration daily denouncing India, using harshand almost intimidating language, while the other set made somewhat more reasonable and moderate gestures. The first set was led by no less than the Secretaryof State Madeleine Albright along with the two spokesmen, James Rubin and Mike McCurry, while the second set assigned for a more cajoling405stance was fronted by Deputy Secretary of State, Strobe Talbott and Assistant Secretary of State, Karl Inderfurth.Madeleine Albright mocked at the so-called past glory of India (that Vajpayee had referred to), almost saying that even Timbucktoo could claim it, and wasno justification for breaking the ground rules established by the five nuclear powers. She rejected any claim by India to being a nuclear state. Tell usnot how much you can destroy, but how much you observe human rights, she told India.116 The U.S. Secretary of State did not seem to notice the irony ofher words, coming as they did on the eve of the Presidential visit to China. Both Rubin and McCurry were equally denunciatory of India, often using languagethat set new records in non-cold war diplomacy. Sometimes the comments appeared to be somewhat paranoic like McCurry's observation that the heat in Delhiwas due to the tests and that as a consequence India had to declare a state of emergency.117On the other hand, Strobe Talbott and Karl Inderfurth had been assigned the role of sending a more soothing message to India through the use of more moderateand more persuasive language. Even while announcing the range of sanctions Talbott sought to convey the impression that USA did not intend to punish thepeople of India, only to dissuade India from going down the path of nuclearization and that Washington valued India's democratic system.118 He was alsomade the interlocutor from the U.S. side for any special envoys ( currently Jaswant Singh) sent by New Delhi for explaining India's point of view. KarlInderfurth appeared to be even more forthcoming and in a number of statements claimed that Washington understood the security concerns of India in regardto China and was keen to keep the channels of communication open with New Delhi.119However, President Clinton's statements in Beijing during his visit and particularly the joint statement issued by the Presidents of the United States andthe People's Republic of China, William Clinton and Ziang Zemin, made it quite apparent that Washington's real face towards India was reflected throughthe harsh statements made by Madeleine Albright and James Rubin.The joint statement issued in Beijing by Clinton and Ziang left little scope for any doubt that the Clinton administration's current strategy was to establisha Sino-U.S. duopoly of dominance in Asia with Japan tagged along as a minor ally of the United States in the big league in which the major players wereonly USA and China. How Japan felt about it was quite another matter. The joint statement issued on 27 June condemned the nuclear tests by India and Pakistanand demanded that they enter into firm commitments not to weaponize or deploy nuclear weapons and missiles capable of delivering them. They proclaimedthat "States that do not adhere to the Treaty [NPT] cannot expect to be accorded the same benefits and international standing as are accorded to NPT parties.Not withstanding their recent nuclear tests, India and Pakistan do not have the status406of nuclear weapons states in accordance with the NPT." Of course, it was not very clear what benefits the non-nuclear states were supposed to derive fromsigning the treaty. In any case, China and USA agreed to continue to work closely together, within the P-5, the Security Council and with others, to preventan accelerating nuclear and missile arms race in South Asia, strengthen international non-proliferation efforts and promote reconciliation and the peacefulresolution of differences between India and Pakistan. The two countries "recognized their responsibility to contribute actively to the maintenance of peace,stability, and security of the region and do all we can to address the root causes of tension". They stood ready to assist India and Pakistan, whereverpossible, "to resolve peacefully the difficult and long-standing differences between them, including the issue of Kashmir."120Clinton had also made it clear in China that he believed that "as two great nations, we have a special responsibility towards the world" and pointed outto the recent Sino-U.S. cooperation on stability in South Asia and the Korean peninsula "We Americans admire your accomplishments, your economy, your hardwork and vision, your efforts against hunger and poverty, your work with us on peace and stability in Korea and South Asia", he proclaimed.121The greatest democracy was joining up with the greatest autocracy against the largest democracy in the world. The history of international relations aboundedwith such ironies.India immediately and forcefully rejected the thrust of the joint statement with the accusation that it reflected a "hegemonistic mentality" of a bygoneera in international relations that was completely unacceptable. "India categorically rejected the notion [ of the U.S. and China] arrogating to themselvesjoint or individual responsibility for the maintenance of peace, stability and security in the region.", a spokesman of the External Affairs Ministry saidin an official response to the joint statement. It was "most ironical", he said, referring to Beijing and Washington presuming to prescribe norms for non-proliferation after having "directly and indirectly" contributed to unabated proliferation of nuclear weapons and delivery systems in India's neighbourhood.122Thus, as even before the tests we had remarked, one of the principal tasks before Indian foreign policy was the management of relations with the UnitedStates. India's perceptions of its national interests and security requirements remained fairly divergent from those of USA and there was little hope ofany. early reconciliation and approximation of their perceptions.India would need to use all countervailing elements and factors available to it to cope not only with the sanctions but also with the Clinton administration'sapparent inclination to go overboard in developing a nexus with China, partly at least directed against India, although it would affect other countriesalso, like Japan and Korea. There could be no objection to, indeed it would be welcomed, an improved relationship and reduced tensions between USA andChina, but the407attempt to establish a Sino-U.S. overlordship was quite another matter. In any case, India would have to keep its cool and develop effective measures totide over the extremely difficult situation.Some relief was available in two recent developments. One was the sanctioning of a loan to the tune of $ 543 million for agricultural development in AndhraFradesh.123 The loan announced on 25 June indicated that the option of humanitarian aid would be somewhat liberally interpreted. The second developmentwas equally, if not more, significant. Under pressure of business houses, the U.S. Senate leaders appointed a task force to review the economic sanctions.Senate majority leader Trent Lott clarified that the 18-member panel would initially focus on U.S. sanctions imposed against India and Pakistan. The panelwould look at what sanctions were now in place, whether they were effective and what procedures were in place for lifting them. The task force would reportback to the Senate by July 15 on the India-Pakistan sanctions, and would prepare a separate report by 1 September on overall U.S. sanctions policy.124The report prepared by a bipartisan Senate task force sought to mitigate the harshness of the sanctions essentially to protect U.S. business interests.It sought to exempt agricultural export credit and trade finance from sanctions, even as the sanctions on military sales would remain. It would enablethe U.S. to support various types of World Bank and IMF loans to both India and Pakistan. It would enable the U.S. EXIM Bank and the Overseas Private InvestmentCorporation to resume lending to U.S. trade in the region. It would also authorize the U.S. President to waive other penalties imposed on the two countriesif he considered it necessary for U.S. interests.125However, the actual bill that was rushed through the U.S. Senate provided exemption only for agricultural products126 and was a victory for the farm lobbyin USA. The new legislation would benefit Pakistan greatly as unlike India, it was now a major importer of U.S. grains. Nevertheless, this was not theend of the matter and further legislation could ease some of the other restrictions regarding trade financing. On 16 July 1998 the U.S. Senate approvedby a voice vote legislation authorizing the President to lift non-military sanctions for a year127. But this was not the end of the matter. As we go tothe press, the legislation has to be approved by the lower house of Congress and then a joint Senate-House committee would have to hammer out an agreeddraft for final approval as legislation.Even after the proposed legislation becomes law, it would not necessarily and automatically mean the lifting of sanctions. Whatever may be the intermediatesteps taken by the U.S. President, the lifting of sanctions would be related to the satisfaction of certain American demands and goals. One of them hasalready been spelt out by Assistant Secretary of State, Karl Inderfurth. The U.S. was no longer objecting to India and Pakistan developing ballistic missiles,408but demanded that they not be deployed. The second condition would certainly relate to the signing of the CTBT.Moreover an immediate American objective appears to be to bail Pakistan out of a fairly precarious economic situation.128 Whatever is agreed upon betweenUSA and Pakistan would have to be watched carefully by India as what the U.S. administration says has been agreed upon does not necessarily turn out tobe the real story, for Washington has been known to fudge on these issues both in relation to Pakistan and China, in the pursuit of its other objectives.India would have to be very vigilant and various countervailing factors available to it needed to be utilized in effective diplomatic maneuvers. U.S. businessinvolved with India or proposing to get involved was the principal force and should remain India's chief focus for countering the Clinton administration'spropensity to go overboard pandering to China and Pakistan and in "punishing" India. The U.S. congressional circles, the media and the intellectuals werenot to be ignored either. They were powerful elements in moulding public opinion and proposing or modifying U.S. legislation.In any case, the current situation constituted a serious test for the Government's resilience in pursuing its diplomatic objectives with the United States.So far the effort has been rather patchy, one reason for which has been both the absence of a full-fledged dynamic Minister for External Affairs and insufficientuse by the Government of the human and intellectual resources available with the Foreign Office bureaucracy. Attempts to short-circuit the Foreign Officehave not been productive in the past either.In the short term Indo-U.S. relations are destined to pass through heavy weather. The Clinton administration's anger and pique at the Indian nuclear testshave yet to run their course. Nor has its tilt towards China yet found a better balance. But over the long run the United States would realize that therewas no real arms race in South Asia and that a nuclear India with a modest deterrent far from being a destablizing force contributed to the establishmentof a better power balance in Asia.THE WORLD CHANGETH AGAINWe took cognizance in the first chapter of the extreme complexity of the international situation, its "triplity" where every trend has a counter-trend withina counter-trend and the international scene keeps shifting. We noted the relative decline of the United States and yet its continuing global reach, therise of new economic powerhouses of Japan and Germany and yet the growing economic difficulties in which their economies were finding themselves, the growthof "tiger" economies of Asia (and their decline now) and the emergence of China as an important player in the world today with its ups and downs and upsin its relations with the United States as well as with India. One current409appears to be advancing at one particular time only to be subsumed temopararily by a counter-current whose surge also does not remain for long.This extreme complexity remains the hallmark of the world today even as it continues to spin and hurtle forward. The eighties and the first half of thenineties witnessed the gradual shift of the centre of economic gravity to Asia, certainly the Asia-Pacific region. If the trends noticeable in 1993-94were to persist, the Asian share of the world's total output by 2010 could be close to 40 per cent.129 Even the United States, depite all its strategicinterests in Europe, has been engaging itself more and more with Asia both economically and politically. By mid-nineties, one-third of U.S. exports wentto and one-fourth of its imports came from Asia.But as we turn towards the end of the 20th century two notable developments have overtaken the previous trends, even though we do not know how long theywould last. First, the United States has come out of its recessionary phase and its economy is once again going strong. Second, the Japanese and the "tigereconomies" of Asia are either facing collapse or are in deep economic freeze. The impact of the economic crisis has been the severest in Indonesia andThailand, followed by South Korea and Malaysia while Japan has slipped into a recession. Even the Hong Kong economy has been weakening, and pressures ofthe economic crisis in Asia on China have been mounting. It is a paradoxical turnaround. All the values and practices that were earlier lauded as the drivingforces behind Asia's, chiefly East and South-east Asia's rapid economic growth, family ties, connections leading to quick decisions, governmental patronage,and so on, are now being blamed for Asia's economic troubles, and the particular market factors that determine U.S. economic development that were earlierregarded as the villain of U.S. economic decline are now being touted as the cure-all for the ills of the world economy.There is need to recall that the U.S. economy has experienced these cycles of capitalist development for almost 40 years now. Recession and revival havebeen the chief characteristics of the U.S. economy at least since the close of the sixties. A discussion of the economic factors responsible for the economiccrisis in Asia is outside the scope of this work. As Paul Krugman observed, there were "flaws at the top" and bad policies accounted for the crisis thatgot escalated by panic in the Asian markets 130But there is some danger of the world elite opinion jumping from one extreme to another, of writing the epitaph on Asian economies and ignoring the manybasic strengths they have and on the other hand, regarding the current U.S. economic revival as necessarily a permanent phenomenon and turning the blindeye towards its many weaknesses. The U.S. surge of economic strength, even while deserving plaudits and a fact to be kept in mind in assessing the future,has been, as well-noted by Prof. John Gray, the result of some very unique advantages not available to most other countries and has been achieved at410considerable social cost and pain within the U.S. society,131 nor does it preclude future declines that, again, might not necessarily be permanent.India is also passing through a difficult economic period. A sluggish industry, a decline in 1997-98 of agricultural production, a set-back to exports,and a rise in deficit financing have led to a slowing down of the economy. The Asian economic crisis and sanctions imposed recently by the United Stateshave contributed to the economic downturn. However, the downturn, so far at least, has nowhere been of the order of the decline in East and South-eastAsia. As a U.S. study in the mid-ninties concluded, if India's economic growth could be sustained at just 5.5 per cent over the next decade and a half,the Indian economy would grow from $ 1.2 trillion in 1994 to $ 3.7 trillion by 2015, an increase from 46 per cent of Japan's 1994 GNP to 82 per cent ofits GNP in 2015.132Another transforming factor in the world today is modern technology and its diffusion among an increasing number of countries. There can be no doubt thattechnology will be the cutting edge of a country's economic development and its role in the world. Japan has already demonstrated what is possible evenfor a resource - poor country through the development and use of technology. The spread of technology holds the promise of enabling more and more countriesto be heard in the world councils. In any case the politico-strategic situation in Asia has been decisively transformed. Excluding Israel, there were nowfour nuclear powers within the region (Russia, China, India and Pakistan) and one most influential external nuclear power in Asia, the United States. Andthere is Japan with its capability hovering on the nuclear threshold but which, even otherwise, with the second largest economy in the world, an economy8 times as big as that of China and twice as big as all the rest of Asia put together, was a principal player on the Asian scene. Future developments inthis region, with its certain impact on world politics and economy, would to a considerable extent depend on the interaction among and between these countries,sometimes bilaterally, sometimes collectively, and on the developments within them. As Jawaharlal Nehru envisioned, India will be a major player in theinternational community.India must be sensitive to and energetically utilize all the currents and crosscurrents, all the twists and turns, all the contradictions, all the opportunitiesand openings to be able to meet the challenges ahead. India's foreign policy has traditionally been one of "temperance", of balance, of extending the handof friendship to all countries, particularly those in the neighbourhood, while preserving the security and other national interests of the country buttrying to harmonize them with the larger interests of the people of the world, of responsible responses to the world's problems, of close interaction withthe international community, and of acccording a high place to promoting the economic welfare and prosperity of the Indian people. The focus must remainon that kind of balance and temperance.411NOTES1. This has already been discussed in Chapter Five.2. Zulfiqar AH Bhutto, If I am Assassinated...., Vikas Publishing House, New Delhi, 1979, pp.137-38.3. Christopher's testimony before a Senate Foreign Relations Committee hearing. Hindustan Times, 15 January 1993.4. Former Pakistan Chief of the army, Afzal Beg speaking at a meeting in Karachi made these assertions. See Sunil Narula from Islamabad in Times of India,4 April 1994.5. State Department spokeswoman Margaret Tutwiler's press statement. Hindustan Times, 30 January 1991.6. Hindu, 8 February 1992.7. Interview with Egyptian Mail, cited in the Times of India, 2 June 1992.8. Interview with the Muslim, cited by Sunil Narula from Islamabad, Ibid, 25 September 19939. Press Conference in Karachi quoted in the Hindustan Times, 24 November 1994.10. Ibid, 26 May 1995.11. Interview with IANS, ibid, 5 November 1992.12. See both chapter Two and Five.13. Times of India, 24 February 1996.14. Text of the testimony made on 28 January 1998 with the author.15. A Majority Report of the Sub-committee on International Security, Proliferation, and Federal Services, January 1998 Text with the author.16. Nawa-e-Waqt's news reported in Times of India, 3 July 1997.17. See Indian Express, 7 and 8 April 1998.18. Military Balance 1996-97, International Institute of Strategic Studies, London, pp.241-43.19. Ibid.20. Ibid., p.23021. SIPRI YEAR BOOK 1997, Oxford University Press, New York.22. See The Hindu and Indian Express, 11 May 1998.23. Hindustan Times, 14 May 1998.24. The Hindu and Times of India; 16 May 1998.25. Hindustan Times, 16 May 1998.26. Times of India, 18 May 1998.27. See Indian Express and The Hindu, 22 May 1998.28. Times of India, 14 May 1998.29. Hindustan Times, 15 May 1998.30. Times of India, 18 May 1998.31. 1b id., 20 May 1998.32. Text of the EU communique with the author.33. See Vijay Dutt in Hindustan Times, 28 May 1998.34. International Herald Tribune, 13-14 June 1998.35. Times of India, 16 February 1997.36. Hindustan Times, 11 February 1997.37. Ibid., 18 February 1997.41238. Speech at a public meeting in Jammu, Hindu, 14 February 1997.39. Interview with S.Nihal Singh of The Khaleej Times, cited in Times of India, 24 February 1997.40. Indian Express, 1 April 1997.41. Interview with Dina Vakil in Times of India, 28 April 1997.42. The Hindu, 28 April 1997.43. Indian Express, 13 May 1997.44. Hindustan Times, 13 May 1997.45. Washington Post, 3 June 1997.46. The Hindu, 6 June 19997.47. Asian Age, New Delhi 12 June 1997.48. Hindustan Times, 10 June 1997.49. Asian Age, 25June 1997.50. Indian Express 26 June 1997.51. Asian Age, 26 June 1997.52. Text circulated by the Ministry of External Affairs, New Delhi.53. The Hindu, 28 June 1997.54. See, for instance, Economic Times, 13 June 1997.55. Asian Age, 31 July 1997.56. Times of India, 14 August 1997.57. Economic Times, 31 July 1997.58. The Hindu, 25 and 26 August 1997.59. Times of India, 25 and 26 August 1997.60. Ibid, 26 August 1997.61. Gohar Ayub Khan's statement in Pakistan's National Assembly, ibid., 29 August 1997.62. The Hindu, 19 August 1997.63. Hindustan Times, 21 September 1997.64. See Asian Age, Indian Express and Times of India, 24 and 25 September 1997.65. See The Hindu and Hindustan Times, 30 September and 1 October 1997.66. Asian Age, 2 October 1997.67. Ibid.68. Gohar Ayub Khan's statement at the meeting of the standing committee of the Pakistani Senate, Hindustan Times, 11 October 1997.69. Asian Age, 28 March 1998.70. Ibid., 19 March 1998.71. See M.B. Naqvi's despatch from Pakistan in Times of India, 21 March 1998.72. Indian Express, 22 March 1998.73. Pakistan's Information Minister Mushaid Hussain expected the two Prime Ministers to meet at Colombo during the forthcoming SAARC summit at Colombo inJuly 1998, hopefully calling for a renewal of the India-Pakistan dialogue. Hindustan Times, 28 March 1998.74. Ibid.75. See International Herald Tribune, 18 May 1998.76. Ibid., 19 May 1998.77. Hindustan Times, 29 May 1998.78. Times of India, 30 May 1998.41379. Asian Age, 17 June 1998.80. Ibid, 9 June 1998.81. Hindustan Times, 18 November 1996.82. The Hindu, 29 November 1996.83. Text of the agreement with the author.84. See Newsweek (U.S. edition), 9 December 1998.85. See Times of India, 3 December 1996.86. Indian Express, 29 May 1997.87. Times of India, 12 December 1997.88. See particularly Hindustan Times, The Hindu and The Statesman, 5 May 1998.89. Times of India, 5 May 1998.90. Asian Age, 6 and 7 May 1998.91. The Hindu, 6 May 1998.92. Indian Express and The Statesman, 7 May 1998.93. Times of India, 7 May 1998.94. Hindustan Times, 8 May 1998.95. Asian Age, 15 May 1998.96. Indian Express, 19 May 1998.97. Liu Yang one and Feng, "What is the Intention of Wantonly Engaging in Military Ventures - India's Military Development Should Be Watched Out For", JiefangjunBao, (Beijing), 26 May 1998.98. For text of Vajpayee's letter see Hindustan Times, 14 May 1998.99. An authorized English translation was published in Beijing Review, 25 June 1968.100. Inderfurth's testimony at his confirmation hearings before the Senate Foreign Relations Committee. Times of India, 12 July 1997.101. Ibid.102. Ibid.103. See The Hindu, 28 August 1997.104. Hindustan Times, 20 September 1997.105. Asian Age 23 September 1997.106. N.C. Menon from Washington in Hindustan Times, 24 September 1997.107. See Swaminathan S.Anklesaria Aiyer's despatch from New York, Economic Times, 23 September 1997.108. Times of India, 12 October 1997.109. The Hindu, 16 October 1997.110. Hindustan Times, 20 November 1997.111. N.C. Menon from Washington, ibid, 5 December 1997.112. ibid.113. The Hindu, 14 May 1998.114. Economic Times, 17 May 1998.115. Hindustan Times, 19 June 1998.116. Asian Age, 1 June 1998.117. Economic Times, 31 May 1998.118. See Indian newspapers of 19 and 20 June 1998.119. See, for instance, Inderfurth's interview with ANI TV in Washington, report in Hindustan Times, 27 June 1998.120. Text of the joint statement with the author.414121. PT1 from Beijing, Indian Express, 26 June 1998.122. The Statesman, 28 June 1998.123. Economic Times, 17 June 1998.124. Ibid., 28 June 1998.125. Ibid, 10 July 1998.126. The Statesman, 11 July 1998.127. International Herald Tribune, 17 July 1998.128. See Karl Inderfurth's testimony before a Senate Foreign Relations subcommittee. Economic Times, 15 July 1998.129. International Monetary Fund, World Economic Outlook, Washington D.C, May 1994.130. See the noted U.S.-economist Prof. Paul Krugman's two articles in the Economic Times of May 1998.131. See a remarkable study by (Professor) John Gray, "False Dawn: The Delusions of Global Capitalism, Granta Books, U.K., 1998.132. RAND study by Charles Wolf and others quoted in Zalmay Khalilzad and Ian O.Lesser, Sources of Conflict in the 21st Century, RAND, Santa Monica, California,1998, p.152.415IndexAbdulla al-Awadi, Abdul Rehman, 270Abdullah, Sheikh, 122Abudullojanov, Abdumalik, 104Abulsyitoy, G.A., 97Adhikari, Manmohan, 178,183,186-87,199Africa Fund, 298, 305Africa India relations, 297-316.freedom and after, 303-04Indian assistance programme, 313-15India's political role and participatory efforts, 304-10Mauritius and, 310-13UN peace keeping operation in Africaand, 315-16African National Congress (ANC), 298-300Ahmed, Imtiaz, 123Ahmed, Oli, 151Ahmed, Shamshad, 378Aid India Consortium, 326Akaev, Askar, 103Akihito, 320 Al Gore, 55, 301Alagh, Y.K., 377Albright, Madeleine, 374, 392, 399,401, 403,405Alexeyev, Alexander, 79Ali, Assef Ahmed, 127Ali, Caliph, 292Amin, Idi, 307-08Annan, Kofi, 368-69Arafat/Yasser, 273-74,276Asahi Shimbun, 329Asean Security Forum, 14Asia Pacific Economic Cooperation(APEC), 238, 242, 246, 248, 250, 252Asian Development Bank, 22, 340Athulathmudali, Lalit, 162,166-67Atwood, Donald, 35Aung San, 227Avebury, 334Aveu, Pyotr, 78Awami League, 143-44,148,154Azad, Ghulam Nabi, 299Babar, Nasirullah, 133Bahrain-India relations, 281-84Baker, James, 7,33-34,69,74,82Baker, Kenneth, 333-34Bandaranaike, Anura, 164,167Bandarnaike, Srimavo, 164,169Bangkok Post, 242Bangladesh-India relations, 141-55background, 141change and continuity, 146-47compulsion of co-existence, 150-51issues in, 147-50problems in, 141-44Taslima Nazreen issue, 151-53under new governments, 144-46Bangladesh Nationalist Party (BNP), 144, 154Barlow, Richard, 131, 360Barthalomew, Reginald, 32Basu, Jyoti, 154-55Beg, Afzal, 124,131,133-34, 361Beidel, Bruce, 52Beregovoy, Pierre, 345Berenger, Paul, 304Bessmertynkh, 74Bhabha, 366Bhandari, Madan, 178Bharatiya Janata Party (BJP), 20, 57,109, 146,148-49,152,155,175Bhatia, R.L., 126,181, 254-55416Bhattarai, K.P., 174,176-78,183-85Bhutto, Benazir, 110-12,116,123-28,132, 136,193,199, 342, 361Bhutto, Zulfiqar Ali, 131, 360, 372Birendra, King, 183Blair, Tony, 338-39, 370Bosnia-Herzegovina ethnic crisis, 25Botha, P.K., 300 Brang Sein, 230Brezhnev, Leonid, 66Brown, Hank, 44,52Brown, Ronald, 58Brown amendment, 52-53Burbulis, Gennady, 76-77,81Burleigh, Peter, 34Burma-India relations,background, 226-29China and, 230-32efforts at improvement, 232-33Suu Kyi and, 234-35tensions, 229-30Burma Socialist Party, 228Burmese Communist Party, 231Burton, Dan, 31Bush, George, 4, 6-8,16, 21, 31-34, 37-38, 40-41,45, 74Buthulezi, 299Cam, Ngugen Manh, 258Carson, Chuck, 35Carter, Jimmy, 59,369 Central Asia,fundamentalism in, 93,95-96history of, 92-96India relations, 96-106Soviet rule over, 92trade with India, 105-06Cylon Workers Congress, 167,169Chandrashekhar, S., 31, 69, 113, 175, 193, 208, 269-70Chaudhary, Zafar, 134Chauhan, V.S., 130Chavan, S.B., 43-45, 53, 88Chenney, Dick, 2Chenney, Richard, 30Chernomyrdin, Victor, 87-89Chi Haostian, 217Chi Haotian, 388Chidambaram, C.R., 59Chidambaram, P., 233, 324, 328, 399-400, 366Chiluba, Frederick, 307China-Burma relation, 230-32China-India relations, 203-23, 385-96after the thaw, 207-08assessment, 221-23confidence-building measures, 213-14economic dimensions, 218-21Li Peng visit to India and, 209-11major issues, 204-08Narasimha Rao visit to China, 215-18nuclear test by India and, 392-96Venkataraman's visit to China, 211-13Chirac, Jaques, 18,347-49Christopher, Warren, 360Clark, William, 16Clinton, Bill, 5,12,16,26,30, 37-38,40-42, 44-46,49-50, 55-56, 59-61, 357, 378, 393-94, 398-400,402-06,408Clinton, William, 41, 405Cochran, Thad, 44Commonwealth of Independent States—India relations, 75-78Communist Party of Nepal-UnitedMarxist-Leninist, 178,186-88Compaore, Blaise, 310Comprehensive Test Ban Treaty (CTBT), 46, 53-54,59, 61, 359-60, 365, 369, 397, 399, 401-03, 408 Cook, Robin, 338, 369Corus, Johnie, 36Council of Foreign Relations, New York, 13Cryogenic engine technology, 80-83Dadoo, Yusoof, 299Dadoo-Xuma-Naicker Pact, 299Daily Awaj International, 133Daley, William, 399, 402-03Das Gupta, C.S., 38Davis, Lynn, 46, 48, 55Dawn, 129De Klerk, William, 306, 363Defense Planning Guidance, 2417Democratic People's Liberation Front, 168Domocratic United National Front(DUNF), Sri Lanka, 166-67Deng Xiaoping, 23, 227Denkin, P.S., 78Deuba, Sher Bahadur, 188Deuth, John M., 55, 361Deve Gowda, H.D., 98,136, 171, 275, 366, 373, 385, 387Dhabol power issue, 57Dhawan, Satish, 60,366Dissanayake, Gamini, 161Dissanayake, Jemini, 167Dixit, J.N., 36, 38,118, 159,232, 288Do Muoi, 258-59Dole, Robert, 268Dong, Pham Van, 257Eagleburger, Lawrence, 34-35Economic Community of Central AfricanStates (ECCAS), 304Economic Community of West African States (ECOWAS), 304Egorov, N.D., 88Egypt-India relations, 276-79Elaventhen, K., 161Elizabeth, Queen, 369Ershad, H.M., 196Ershad, Mohammed, 142-43,154European Community-India relations, 13, 331-32, 350-53Eyewitness, 41, 121Fahd, King, 268Faleiro, Eduardo, 263Fatchett, Derek, 338Feigan, Edward, 31Fernandes, George, 218, 381, 389-91, 395Fissile Material Cut-off Treaty (FMCT), 401Foreign Exchange Regulation Act (FERA), 324Foreign policy of India,change in international environment and, 20-23economic recession and, 20-23NAM and, 23-26nuclear dilemma, 358-85nuclear tests and, 365-72, 403-10political instability and, 20-23security and, 356-58France-India relations, 344-50French Institute of International Relations, 9Frontier Post, 361Fukokawa Committee, 322Gaidar, Yegor, 78Gandhi, Indira, 2, 22, 73,142-44,158,161, 217, 226, 232, 237, 276, 280-81, 297, 365-66Gandhi, Mahatma, 258, 297, 301, 306Gandhi, Rajiv, 20, 22-23,31, 33,49, 66, 69, 71, 73,116,128,143-44,159,161-62,164, 167, 205, 207-09,213,218-19, 221, 241, 297, 302, 366, 371Gandhi, Sonia, 367Garel-Jones, Tristan, 333Gates, John, 69,110Gayoom, Mamoon Abdul, 196Gergen, David, 7Germany-India relations, 339-44Gerten, Jeffery, 58Giap, Vo Nguyen, 258Glaspie, Alan, 21Glenn, John, 361Gluklukh, Victor, 77Goenka, R.P., 260Goh Chok Tong, 245-48Gorbachev, Mikhail, 2, 8, 23, 66-71, 73-74, 84,288Grachev, Pavel, 83-84Grachev, Pyotx, 77-78 Gray, John, 409Gujral, I.K., 20,26,59,109,135-36,143, 154, 177, 256-57,263,269,351, 366-67, 373-74, 377-80, 387-89,398-402Gujral doctrine, 136,379-90Gulf News, 112Gulf War, 1-8, 21, 30-31, 268-73analysis, 7-8consequences of, 5-7cost of, 6impact over international relations, 30-6India and, 268-73418Haas, Richard, 31Haidar, Salman, 375Hamid Gul, 128Haq, Muhammed Shamsul, 141Hashimoto, Ryutaro, 328Hatta, Mohammed, 253Hattersley, Roy, 337-38Hazratbal Shrine incident, 43Heng Samrin, 249,256,261Herat, Herald, 163-64Hills, Carla, 39Hindustran Times, 165Hirohito, 320Ho Chi Minh, 258-59, 301Huang Hua, 221Hujntao, 215Hun Sen, 249,262-64Hurd, Douglas, 334-35Hurriyat-e-Kashmir, 52Hussain, Abida, 34Hussain, Mushaid, 382Hussein, Saddam, 3, 7, 21,272IAEA safeguards, 103 IDA, 340 IMF, 404, 407Ibrahim, Dawood, 282Inderfurth, Karl F., 396-97, 399, 405, 407 India, andASEAN, 237-39Gulf war, 268-73nuclear dilemma, 358-65nuclear proposal of Pakistan, 115-16SAARC, 193-201Taslima Nazreen issue 151-53 relations withAfrica, 297-316Bahrain, 281-84Bangladesh, 141-55British Labour Party, 337-39Burma, 226-35Cambodia, 256-64China, 14,203-23, 385-96Commonwealth of Independent States, 75-78Egypt, 276-79European Community, 331-32, 350-53France, 344-50Germany, 339-44Indonesia, 253-55Iran, 284-94Iraq, 268-73'Israel, 273-76Japan, 319-31Kazakhistan, 96-98Krygyzstan, 102-04Kuwait, 268-73Malaysia, 249-53Nepal, 174-90Oman, 281-84Pakistan, 108-37,362-85Persian Gulf states, 267-94Qatar, 281-84Russia, 78-79SAARC countries, 193-201Saudi Arabia, 280-81Singapore, 245-49South Asia, 108-201South East Asia, 237-64Soviet Union, 65-89Sri Lanka, 157-71Tajikistan, 104-05Thailand, 239-44Turkmenistan, 100-02UAE, 281-84UK, 332-39US, 30-61, 396-403Uzbekistan, 96,99-100Vietnam, 256-64West Asia, 267-94India Abroad News Service (IANS), 40-41India Interest Group, 52India Nepal Treaty, 177India-Sri Lanka Accord, 159,162India Today, 365Indian Independence Act, 43Indian Peace Keeping Force (IPKF), in SriLanka, 157-60,162-63,166,168,193Indian Space Research Organisation(ISRO), 39-40, 80-83Indo-Bangladesh Coordination Committee, 145419Indo-Kazakh Joint Commission, 97lndo-Kyrgyz Joint Commission, 104Indo-Nepalese Joint Commission, 180Indo-Soviet Treaty of Peace, Friendshipand Cooperation, 70Indo-US Commercial Alliance, 58Indonesia-India relations, 253-55Industrial Credit and Investment Corporation of India (ICICI), 87Inkatha Freedom Party, 299Inqlab, 147Institute of Oriental Studies, Moscow, 88Inter-Service Intelligence Agency, 49International relations,China and 14-15economic imperative, 15-17Europe and, 8-13Gulf war impact on, 3-8, 30Japan and, 8-14Nehru framework, 1-2,18new parameters, 17post-cold war scenario, 1-3triple dimensions, 11-15USA and, 8-14 Iraq-India relations, 268-73Iran-India relations, 284-94background, 284-85economic relations, 293-94Kashmir issue and, 286-87new shift in, 287-88non-theological compulsions, 291-92Rafsanjani visit to India, 292-93Rao's visit to Iran, 288-90setback in, 290-91Ishihara, Shintaro, 10Ishikawa, Rokura, 324Islamic Jamhoori Ittehad, 123Israel-India relations, 273-76Jamaat lslami of Bangladesh, 149Jamat-i-Islami, 49Jammu and Kashmir Democratic Alliance, 121Jammu and Kashmir Liberation Front(JKLF), 118Jane's Defence Weekly, 77, 231Ianjua, Asif Nawar, 116Japan-India relations, 319-31assessment, 330-31faith in, 327-28funeral diplomacy, 320-23Narasimha Rao visit to Japan, 325-27official policy and, 328-29political and economic problem, 323-25security council seat in UN and, 329-30Jayewardene, Junius W., 159,162,164,196Jiang Zemin, 212, 215, 217, 221, 385, 388jiefang lunbao, 392jinnah, Mohammed Ali, 382Johnson, Chalmers, 10Johnson, Lyndon, 6Joshi, B.C., 216-17Jospin, Lionel, 350Jugnauth, Aneerood, 311-12Junejo, Mohammed Khan, 195, 206Juppe, Alain, 347-49, 352Kachin Independent Organization (KIO), 230Kadakin, Alexander, 79Kadirgamar, Lakshman, 171Kaifu, Toshiki, 320-22Kalam, A.P.J. Abdul, 60, 366Kantor, Mickkey, 56Karamat, Jehangir, 372, 381Karimov, Islam, 94, 99Karrubim, Mehdi, 285Karunanidhi, M., 171Kaufman, Gerald, 337-38Kaunda, Kenneth, 306Kazakhstan-India relations, 96-98Kelso, Frank, 36Khialeej Times, 124Khamenei, Ali, 285Khamenei, Imam, 289Khan, Abdul Qadeer, 131, 361, 382Khan, Gohar Ayub, 122, 373-75, 381, 383Khan, Ghulam Ishaq, 111-13,123-24Khan, Nur, 135Khan, Q.P., 133Khan, Sahibzada Yaqub, 109Khan, Shahryar, 34,116,132, 360Khapling, S.S., 230Kharrazi, Kamal, 384420Khasbulatov, Imranovich, 79-81, 83Khin Nyunt, 233Khoman, Thanat, 240Khomeini, Ayatollah, 284-88Khursheed, Salman, 135,151, 299Kinkel, Rlans, 342-44Kinnock, Neil, 337-38Kirklaiter, 34Kissinger, 9Kittu, 166Kohl, Helmut, 4,18, 339-42Koirala, B.P., 174,178Koirala, G.P., 177-81,185-86Kosygin, 73Kozyrev, Andrei, 82-83, 88Krauthammer, Charles, 7Krishnakumar, Sathasivam, 166Kumaratunge, Chandrika, 164,169-70,199Kunadze, 79Kuwait-India relations, 268-73Kyrgyzstan-lndia relations, 102-04Lajja, 151-52Lake, Anthony, 50Lanka Guardian, 130Lattimore, Owen, 6, 92Lee Kuan Yew, 247Leekpai, Chuan, 241Leghari, Farooq, 136,199, 290Lennox-Boyd, Mark, 113, 336Levy, David, 274Li Lanqing, 219Li Peng, 23, 208-13, 215, 232, 385Li Ruihuan, 216Li Xiannian, 227Liberal Democratic Party (LDP), Japan, 320Liberation Tigers of Tamil Eelam (LITTE), 158-62,165-68Lincoln, Abraham, 15Linh, Nguyen Van, 258Liu Jiayuam, 214Lodhi, Maleeha, 44Lohani, Prakash Chandra, 188Lott, Trent, 407Madden, Max, 336, 338Mahathir, Mohamad, 24, 250-52Major, John, 16,18, 333-34, 336Malaysia-India relations, 249-53Malik, V.P., 383,388,391Malott, John, 42-43Mandela, Nelson, 298-99, 301-03,306Mao Zedong, 204, 221, 394Maran, Murasoli, 59Marin, Manuel, 352-53Mauritius-India relations, 310-13Mbeki, Thabo, 302-03McCurry, Mike, 404-05Military Balance, 363Miryakubov, T.M., 99Mishra, Brijesh, 367Missile Technology Control Regime(MTCR), 39, 81-82Mittal, Rajesh, 119Mitterrand, Francois, 344, 346Miyazawa, Kiichi, 323, 325Mkapa, Benjamin, 306Moelleman, Jurgen, 340Moi, Daniel Arap, 309Moise, Dominique, 9Monroe doctrine, 157Monzo, John, 34Moussa, Amre, 278Moynihan, Patrick, 40Mubarak, Honsi, 276, 278-79Mugabe, Robert, 24, 305-06Mukherjee, Pranab, 53, 58, 89,101, 188, 217, 219, 348,352Museveni, Yoweri K., 307-08Mwinyi, Nolugu Ali Hassan, 306Nahayan, Shaikh Zayed bin Sultan al, 282Naicker, Monty, 299Nambiar, Vijay, 392, 395Narasimha Rao, P.V., 19, 22-23, 31-33, 37, 44, 48-50, 53, 57, 59, 69, 71,82, 85-87, 97, 99,102-05,116-17,119-20,122-23,125, 130,136,144-46,151,161,163,165,182,188-89,194-95,197,199, 208, 211, 215-18, 228, 239-45, 247-48, 252, 255, 258, 260, 263, 271, 274, 279,283, 288-89, 291-92, 310, 312, 325, 336, 339-42, 344-46,348-49, 364, 366-67421Narayanan, K.R., 217, 259, 301Nasim, Mohammad, 149Nasir, Jawed, 123Nassir, 26, 277Natal Indian Congress, 299, 301Nation 135National Front Government in India, andIndo-Soviet relations, 69-71National League for Democracy, Burma, 228National Socialist Council of Nagaland, 230National Unity Party, Burma, 228Nazarbaev, Nursultan, 94, 96-98Nazreen, Taslima, 151-52Ne Win, 226, 228Nehru, Arun, 257Nehru, Jawaharlal, 2,18, 26, 66, 204, 226, 237, 247, 253-54, 258, 297, 306, 366, 400,410Nepal, Madhav Kumar, 186-88Nepal India relations, 174-90democracy in Nepal and, 174-78economic relations, 189-90election in Nepal, 178-81friction point, 183-85Mahakali agreement, 187-89Nepalese communists and, 185-88Nepali Congress, 175,177-78,180,184-85 blew York Times, 12, 53, 60,135, 211, 394Newsweek, 114, 387Nikolayev, A.I., 88Nintendo War, see, Gulf warNiyazov, S.A., 100-02Noda, Eijirow, 322Non-aligned movement, and India, 24-26North Atlantic Treaty Organisation(NATO), 8-9Nuclear dilemma, 358-62Nujoma, Sam, 305Nurnagmbetov, SargadatKochakmetovich, 98Nyerere, Julius, 306-07Official Development Assistance (ODA), 322, 326Oman-Indian relations, 281-84Operation Meghdoot, 121Organization for Economic Cooperationand Development (OECD), 13Organization of Islamic Conference (OIC), 95,114,142, 268, 271-72, 277, 280-81,284, 286, 290Organization of African Unity (OAU), 304Overseas Economic Cooperation Fund (OECF), 322Pakistan India relations, 108-37,362-85Babri Masjid incident and, 121-23diplomats abuse, 130-31Human Rights Commission on Kashmirand, 127-30Kashmir issue and, 127-30,136-37, 374-80nuclear issue and, 115-16,131-35, 362-74, 383-85Pakistan proposal on nuclear issue and, 115-16political turbulence in Pakistan and, 124-27Prime Ministers' meeting, 117-20shift in Pakistan's policy, 116-17Simla accord and, 119-21threatened march by JKLF and, 118-19, 121Panitchpakdi, Supachai, 244Patnaik, Biju, 253Paul, Swaraj, 338Pawar, Sharad, 35-36,57,72,84, 210,213, 251People's Alliance (PA), Sri Lanka, 168-70People's Daily, 218Peres, Shimon, 274-75Perry, William, 50-51Perumal, Varatharaja, 160Pickering, Thomas, 39-40,399-401Pitsuwan, Sarin, 243 Platt,Nicholas, 34Powell, Colin, 35Prabhakaran, 161,164Premadasa, R., 159-61,163-65,167,193,196Pressler, Larry, 44Pressler amendment, 31, 40, 45-46, 48, 51-52,124,132,361,382422Primakov, Yevgeny, 74, 88-89Puri, Hardeep, 38Qatar-India relations, 281-84Qian Qichen, 207, 216, 231, 387Qiao Shi, 215Qin jiwei, 213Quayle, Dan, 40Qureshi, Moeen, 124,133, 361Rafsanjani, Ali Akbar Hashemi, 285-86, 288-92Raghunath, K., 98, 374, 376, 399, 401Rahman, Sheikh Mujiubur, 141-44,154Rahman, Ziaur, 142,144Rahmonov, Imomali, 104-05Rajiv Gandhi Action Plan, 49Ramanna, 366Ramgoolam, Navinchandra, 313Ramgoolam, Seewoosagur, 311Ranaridh, Norodom, 264Rangachari, T.C.A., 386Ranmin Ribao, 394Rao, U.R., 82, 214Raphel, Robin, 43-47, 49, 53, 397Rashtriya Prajatantra Party (RPP) Nepal, 188Reagan, Ronald, 33, 41Rehman, Mustafizur, 144,148Ringdeo, Veeraswamy, 312Rodrigues, S.F., 35 Rohini, 290Roosevelt, Franklin D., 7Rubin, James, 404-05Rushdie, Salman, 152Russia-India relations, 78-89cryogenic engine technology issues, 80-83defence ties, 88-89economic ties, 87-88Kashmir issue and, 66, 78-79, 84, 89Narasimha Rao visit to Moscow, 85-87political ties, 88-89Yeltsin visit to India, 83-85Rutskoi, Alexander, 78-80Ryzkov, Nikolai, 66Sabah, Sheikh, 271Sadat, Anwar, 276Salam al-Sabah, Sheikh, 270Samad, Abdus, 154Santer, Jacques, 369Sarabai, 366Satish Chandra, 383Saudi Arabia-India relations, 280-81Savimbi, Jonas, 298Saw Maung, 228, 231Scindia, Madhav Rao, 365Scowcroft, Brent, 8Security, and foreign policy, 356-58Sedki, Alif Mohammad, 279Sein Win, 230Senate Foreign Appropriation Committee, 46Shaffer, Teresta, 32Shakespear, 2Shamir, Yitzhak, 274Sharif, Nawaz, 34, 95,112-20,122-24, 132-33,135-36,163,193,195, 358, 361, 372-73, 375, 377-79, 381-84, 398Sharma, Shankar Dayal, 165,183, 299, 305-06, 312, 385-86Shekhmuradov, Boris, 101Shevardnadze, 69, 74Shukla, V.C., 146Shwarzkopf, Norman, 4Sihanouk, Narodom, 262-64Simla agreement, 32-33, 36, 43, 47, 66, 79, 89,110-11,113,116-17,119-21,123, 130, 272, 321, 334, 336, 345, 348-49, 373Singapore-India relations, 245-49Singh, Dato Ajit, 238Singh, Dinesh, 124, 289Singh, Gajender Narayan, 183Singh, Ganesh Man, 177,183,185Singh, Jaswant, 45Singh, Manmohan, 59,128, 324-26Singh V.P., 20, 66-68,109-12,160,176, 249, 269, 305, 311-12, 320-22Sino-Japan relations, 14Sino-Pak nuclear collaboration, 55-56Sino-US relations, 14Small Industries Development Bank of423India, 322-23, 326Smith, John, 338Soga, Alan, 9Solanki, Madhav Singh, 32-33, 73, 145, 162, 210, 258, 271, 278-79, 285, 323, 333Solarz, Stephen J., 31Soonsiri, Prasang, 242South African Communist Party, 299South Asia-India relations, 108-201South Asian Association for RegionalCooperation (SAARC), 193-201South Asian Cooperative EnvironmentProgramme (SACEP), 196South Asian Development Fund, 165,197South Asian Free Trade Area (SAFTA),198, 200, 399South Asian Preferential Trade Agreement(SAPTA), 165,197-98, 200 Soviet Union,disintegration of, 30, 72-75India relations,coup attempt in Moscow and, 69-71disintegration of Soviet Union and, 72-75during Narasimha Rao period, 69-71during National Front Government in India, 66-69Space Commission of India, 80Spranger, C.D., 342Sri Lanka Freedom Party (SLFP), 164, 167-69Sri Lanka India relations, 157-71ethnic issues and, 169-70new developments in, 167-69President Premadasa's visit and, 165-66violence and assassinations impact on, 166-67Sri Lankan Muslim Congress, 169Stalin, 92 Statesman, 152Stepashin, Sergei, 88Stockholm International Peace ResearchInstitute (SIPRI), 133-34Suharto, 24-25, 254-55Sukarno, 237, 254Suri, N.C.,78Suu Kyi, Aung San, 227-30, 232, 234-35Tajikistan-India relations, 104-05Takeshita, Noboru, 320Talbott, Strobe, 47, 383, 405Tamil Eelam Liberation Organization (TELO), 168Tang Jiaxuan, 216, 392Tenet, George; 362Thach, Nguyen Co, 256-57,262Thailand-India relations, 239-44Than Shwe, 231Thapa, Surya Bahadur, 183Thatcher, Margaret, 297, 333Third world, unpredictability and instability in, 4-5Thondaman, S., 167Times, 335Tint Swe, 230Tito, 26Tun Kyi, 233Turkmenistan-India relations, 100-02Tutwiler, Margaret, 34U Nu, 226 US-India relations,Brown amendment and, 52-53CTBT and, 53-54change and continuity in, 30-61change of governments and, 59defence exchanges and relations, 34-37during Bill Clinton, 41-52economic relations, 56-58evaluation of, 59-61Kashmir issue and, 35,40, 42-45,47, 53nuclear non-proliferation issue in, 39, 41,45-49, 53-54opportunities and concerns in, 396-403political relations, 37-52, 56Sino-Pakistan nuclear collaboration and, 55-56subtle changes in, 31-34weapon supply to Pakistan and, 46-47, 52-53US Japan relations, 9-12US News and World Report, 7US Trade Act of 1974, 39US Trade Law, Section 301, 31, 39, 56Ubber, Isi, 274424Unemployment, 13United Arab Emirates (UAE)-India relations, 281-84United Kingdom India relations, 332-39United Liberation Front, Nepal, 177United National Party (UNP), Sri Lanka, 166-68,170United Nations Transitional Administration for Cambodia (UNTAC), 262Utada, Katsuhira, 328Uteem;Cassam,312Uzbekistan-India relations, 96, 99-100Vajpayee, Atal Behari, 213, 365, 367, 369-70, 381, 389, 393-94, 405Van Kiet, Vo, 259-60Ved, Mohinder, 165Velayati, Ali akbar, 101, 286, 289, 292-93Venkataraman, R., 144, 205, 211-13, 229, 258, 305-06, 320, 323, 333Vijetunga, 168Wahi, Ashok, 136Wajed, Sheikh Hasina, 148,150,154Wallerstein, Emmanuel, 16Wang Quangya, 392Wangchuk, Jigme Singye, 196,199Washington Post, 9, 55,132,135, 361, 374Watanabe, Michio, 323Wei Jianxing, 389Weizman, Ezer, 275Wijeratne, Ranjan, 161Wijetunga, D.B., 193Wisner, Frank, 50-52Wood Joseph, 327World Bank, 22,124, 340, 404, 407World Trade Organization (WTO), 56, 200, 397Wu Yi, 220Xinhua, 218, 392Xu Huizi, 216-17Xuma, A.B., 299Yadav, Mulayam Singh, 367Yanacv, Gennady, 71Yang Shangkun, 212Yeltsin, Boris, 18-19, 39, 70-74,76-85, 369Yerin, 88Zhang Aiping, 206Zia, Begum Khaleda, 144-46,148-49,151, 153-55,163,195,198-99Ziang Zemin, 385-88, 405Zia-ul Haq, 133,195-96 ................
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