Reviving SAARC to deal with China
Paper: II
Mains: General Studies- II: Governance, Constitution, Polity, Social Justice and International relations.
Context:
- As India-China border tensions continue to fester, a hegemonic China, as part of its global expansionism, is chipping away at India’s interests in South Asia.
- This should be a major cause for concern for New Delhi. China’s proximity to Pakistan is well known. Nepal is moving closer to China for ideational and material reasons.
- China is wooing Bangladesh by offering tariff exemption to 97% of Bangladeshi products, and has intensified its ties with Sri Lanka through massive investments.
- According to a Brookings India study, most South Asian nations are now largely dependent on China for imports despite geographical proximity to India.
Background:
- In the last few years, due to increasing animosity with Pakistan and India’s attempts at isolating Pakistan internationally for its role in promoting terrorism in India, India’s political interest in SAARC dipped significantly. SAARC has been in the doldrums since 2014.
- India started investing in other regional instruments, such as BIMSTEC, as an alternative to SAARC.
BIMSTEC vs SAARC: RSTV – The Big Picture
- Indian Prime Minister’s act of reaching out to SAARC leaders in the face of the COVID crisis was a laudable effort but there has been a lack of sustained engagement.
- China, as part of its global expansionism, is increasing its influence in the South Asian region.
- China shares a strong bilateral relationship with Pakistan and has invested heavily in Pakistan through the China Pakistan Economic Corridor (CPEC). The two countries also share strategic ties in international forums.
- Nepal is also seen moving closer to China for ideational and material reasons.
- China offers Nepal an alternative for its dependence on India and is capable of making high economic investments in the relatively underdeveloped Nepal.
- The Communist parties in Nepal share similar ideologies with China.
- China, through its economic diplomacy, is wooing Bangladesh by offering tariff exemption for 97% of Bangladeshi products.
- China has intensified its ties with Sri Lanka through massive investments.
- According to a Brookings India study, most South Asian nations are now largely dependent on China for imports despite geographical proximity to India.
- The increasing influence of China in the South Asian region is a major cause of concern for India given the fact that it results in the decrease of India’s influence in South Asia.
There are two major domestic challenges that India faces in revitalising SAARC.
- Of late, domestic politics have had an undesirable influence on foreign policy. This has had an effect on India’s neighbourhood relations and fuelled an anti-India sentiment in India’s neighbourhood.
- The economic vision of the current government focussing on atma nirbharta (self-reliance) and cutting down India’s dependence on imports should not seem like signalling a return to the obsolete economic philosophy of import substitution. A sense of protectionism might indicate India’s disinterest in deepening South Asian economic integration.
- India will have to ensure that domestic politics does not adversely affect India’s standing in the region and India’s economic policies consider the South Asian region into consideration in long term planning.
Key Details:
- As India-China border tensions continue to fester and there being increasing build up along the LAC, India while preparing militarily will also have to redouble its diplomatic efforts to counter China’s intransigence.
- Several foreign policy experts argue that India’s strategic dealing with China has to begin with South Asia. In this regard, it is important to reinvigorate SAARC.
Way forward:
- One way to reinvigorate SAARC is to revive the process of South Asian economic integration.
- South Asia is one of the least integrated regions in the world with intra-regional trade being a low 5% of total South Asian trade, compared to 25% of intra-regional trade in the ASEAN region.
- According to the World Bank, trade in South Asia stands at $23 billion of an estimated potential value of $67 billion.
- While South Asian countries have signed trade treaties, the lack of political will and trust deficit has prevented any meaningful movement in this direction.
- The negotiations of the SAARC investment treaty have been pending since 2007. According to the UN Conference on Trade and Development, intra-ASEAN investments constitute around 19% of the total investments in the region.
- India should take the lead and work with SAARC members to slash the tariff and non-tariff barriers. There’s a need to resuscitate the negotiations on SAARC investment and trade treaties.
- Deeper regional economic integration will create greater interdependence with India acquiring the central role, which, in turn, would serve India’s strategic interests too.