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Executive Summary

Introduction

The digital ecosystem is complex, comprising both physical and virtual infrastructure as well as applications and services. The physical infrastructure includes connectivity—both wired and wireless—in the form of cables, mobile towers, and satellites; telephone exchanges and master switching centres (MSCs); data centres; and consumer equipment such as fixed-line phones, television (TV) sets, computers, closed-circuit television cameras (CCTVs), sensors, and mobile devices—both smartphones and feature phones. The virtual space encompasses digitised services, applications, and content in various forms, including emails, webpages, music, videos, instant messages, and more.

The governance ecosystem guiding its conduct is equally complex. A host of stakeholders—government ministries and departments, regulatory agencies, non-governmental and semi-governmental organisations, as well as individuals, communities, and associations—all influence its governance and regulation and, in turn, are impacted by the same.

The activities within and around the digital ecosystem can be classified under three broad categories: Carriage, Content, and Conduct—the 3Cs framework proposed in this report. Carriage refers to the underlying infrastructure over which content travels, using both wireline and wireless technologies. Wireline could be copper, optical fibre or coaxial cable, while wireless could be cellular, Wi-Fi, point-to-point links, and even satellite, among many other modes and technologies. Content includes data, voice and video, but could potentially also include touch, smell, and even taste. Conduct has multiple dimensions, such as competition, data protection, artificial intelligence (AI), cybersecurity, and sustainability, but could also include aspects such as quality of service (QoS) and data governance.

In the Indian context, multiple institutions govern conduct in distinct yet interconnected areas. Competition is governed by the Ministry of Corporate Affairs (MCA), the Competition Commission of India (CCI), and the Telecom Regulatory Authority of India (TRAI). Data protection and AI governance are primarily managed by the Ministry of Electronics and Information Technology (MeitY), although AI oversight is shared among several bodies, including the National Institution for Transforming India (NITI) Aayog, the Department for Promotion of Industry and Internal Trade (DPIIT), the Prime Minister’s Economic Advisory Council, and the Ministry of Consumer Affairs. Cybersecurity is governed by four key institutions: the National Security Council Secretariat (NSCS), the Department of Telecommunications (DoT), MeitY, and the Ministry of Home Affairs (MHA), reflecting its critical importance to national security. Sustainability considerations in the digital sphere fall under the Ministry of Environment, Forest, and Climate Change (MoEFCC), as well as MeitY. This multi-stakeholder framework highlights the complex and cross-cutting nature of digital governance in India.

The actions of the stakeholders concerning the digital ecosystem are naturally coming under increasing scrutiny due to their proximate, second- and third-order impacts within the broader political economy, societal context, and environmental concerns. A fragmented and unclear regulatory environment creates uncertainty for businesses, discouraging growth and potentially stifling the development of new digital services. A clear understanding of the institutional landscape helps assess how future-ready this ecosystem is for fostering innovation and serving the needs of a diverse society and rapidly growing economy with ever-evolving aspirations.

Contextualising India’s Digital Ecosystem

India’s digital ecosystem presents a fascinating mix of established traditional media alongside a rapidly growing digital landscape dominated by mobile connectivity, social media, and regional language content. As the nation embraces new technologies such as the Internet of Things (IoT), quantum computing, and AI, it also needs to address issues around the convergence of telecommunications, broadcasting, and information technology (IT), as well as newer challenges such as cybersecurity and competition concerns.

Institutions and instruments for the digital ecosystem have been evolving since their debut in the middle of the nineteenth century in response to technological advances and changes in the broader society, economy, and polity. While the Central government has enacted the Information Technology Act (ITA), 2000, and the Digital Personal Data Protection Act (DPDPA), 2023, every state government and Union Territory in the country has an IT Department and at least one IT policy or variant thereof. A range of entities regulate or oversee elements of the digital ecosystem, including the TRAI, the Reserve Bank of India (RBI), CCI, and the Unique Identification Authority of India (UIDAI), to name just a few. Many other ministries and departments in the Central government also have interests in this domain, including, but not limited to, the ministries of Home Affairs, Defence, Health and Family Welfare, External Affairs, and NITI Aayog. The division of responsibilities and activities has evolved, guided by historical factors, technological imperatives, and idiosyncratic influences stemming from the institutions and personalities involved in the process. Driven by the division of work across various ministries and departments, technological advancements, continuous changes within the political economy and socio cultural context, and globalisation, various institutions have been established or restructured all along. Similarly, different instruments have been introduced at various times.

Gaps and Overlaps

This situation inevitably leads to parallel, often uncoordinated efforts, resulting in incongruous and inconsistent outcomes. Besides the wastage of limited public resources, they may lead to confusion and occasionally prolonged litigation for the resolution of inter-agency contestations. Moreover, with rapid advancements in technology, business models, and the expanding role of the digital ecosystem in all aspects of life, it is crucial to examine whether the current institutional architecture and its framework of instruments are future-ready, given the rapid pace of digitisation and digitalisation with increasing breadth and depth everywhere. The digital economy thrives on the convergence of telecom, broadcasting, and IT. However, the blurring of boundaries across these previously distinct verticals is not only creating new and exciting opportunities but also a complex web of challenges. These challenges include inadequate state capacity, ambiguity around ownership and accountability of certain subject matter, difficulties in doing business, confusion for stakeholders, regulatory overreach, and the opportunity cost to the ecosystem.

Such regulatory gaps and overlaps cause uncertainty and confusion among stakeholders unless they are addressed in a timely, resolute, and skilful manner. Agile institutions and responsive instruments can minimise their adverse impact on the ecosystem, even if they cannot be completely mitigated. These gaps and overlaps are not unique to India, as other countries have also faced similar challenges with the rapid evolution of the digital domain.

Global Benchmarking

Policymakers’ approaches differ significantly across countries and over time with respect to institutions and instruments for the digital ecosystem. For example, the United States (US) has historically favoured a laissez-faire, market-first, techno-capitalist approach, encouraging its home-grown companies to become global leaders through a liberal trade policy on technology exports, which has led to wider global adoption. The European Union (EU), on the other hand, tends to prioritise individual rights within the context of digital sovereignty by adopting prescriptive regulations that allegedly impose a high compliance burden on foreign companies operating there. China is emerging as a strong technology innovator and a lynchpin in global value chains, adopting legislation and regulations that allegedly enable control and surveillance by the state. Although not explicitly articulated in any policy document, India seems to be adopting a fourth way, sometimes called “techno-nationalism”, using technology for inclusive, equitable, and sustainable development and exporting its model of digital public infrastructure. At the same time, it seeks to provide regulated flexibility and controlled freedom to global companies while retaining its global leadership as an outsourcing hub.

Notwithstanding several new pieces of legislation and regulations—some already enacted or enforced, others proposed or evolving—the existing governance and regulatory framework deserves a holistic review and necessary revision. This is essential to ensure that India does not miss out on potential benefits while adequately and effectively mitigating challenges. The time is therefore ripe to imbibe relevant lessons from global best practices and to reimagine public institutions and policy instruments within the Indian context.

Re-imagining Institutions and Instruments in India

The convergence of technologies presents significant regulatory challenges. The traditional boundaries between sectors such as telecommunications, broadcasting, and IT are blurring, creating overlaps and inconsistencies in existing regulatory frameworks. This convergence necessitates a re-evaluation of how different instruments and institutions, each with its specific mandate, interact and coordinate. The multiplicity of governing bodies, each with its sector-specific focus, can lead to fragmented regulation, hindering innovation and creating uncertainty for businesses operating in the converged digital space. This challenge is further complicated by the rapid pace of technological change, which often outstrips the ability of regulators to adapt and create appropriate rules.

Broadly, there are three options, and, of course, several possibilities in between, each with its promises and perils.

Status quo approach: This option maintains the current fragmented landscape by leveraging established systems and expertise within each agency dedicated to telecom, broadcasting, and IT. This approach preserves a system in which separate ministries and their departments or agencies oversee distinct or similar sectors. The DoT oversees wired and wireless infrastructure for telecom. The MIB oversees content on TV channels and over-the-top (OTT) content. MeitY regulates cybersecurity and data protection. For the continuation of this approach, it is critical to improve the information-sharing mechanism across the large and disparate ecosystems. Moreover, a coordinating mechanism is essential if challenges related to gaps and overlaps are to be addressed in a timely and resolute manner. Finally, when new opportunities arise, the establishment of a single unifying entity needs to be considered.

Separate ministries for carriage and content: Instead of the three incumbent ministries, another option is to create two vertical ministries—one dealing with “carriage” and the other with “content.” While policymaking should remain with the respective ministries, licensing or authorisation should be transferred to the statutory regulator, just as happens within the realm of financial services.

The benefit of this approach is that it eliminates the distinction between telecommunications and broadcasting. Furthermore, the regulation of content is consolidated into a separate, single entity. This has the potential to address challenges arising from parallel regimes in both carriage and content. The critical issue here would be the ability of the two power centres to work cooperatively, as any coordination-related stresses could quickly escalate into delays and gaps.

One ministry, one law, one regulator, one tribunal: The third option is to integrate telecoms, broadcasting, and IT under a single ministry, such as the Ministry of Digital Ecosystem (MoDE). Both carriage and content could be governed by a single piece of legislation. Additionally, there could be a single statutory regulator and a specialised tribunal dealing with all these domains. A single unified legislation covering both content and carriage would eliminate the confusion and potential conflicts arising from separate regulations. This could foster collaboration between content creators and carriers, potentially leading to faster innovation and more efficient service delivery.

However, such a comprehensive approach presents its challenges, as it could concentrate too much power in a single institution. Regardless of the path taken, the importance of the role of state governments requires a coordination mechanism. Moreover, local governments—both gram panchayats and urban local bodies—should be proactively leveraged for community engagement and for resolving local issues such as right-of-way, route alignment, network topology, and local prioritisation. This would require an enabling mechanism, which could be created at NITI Aayog.

Finally, it will not be easy to develop and implement pathways for transitioning to the new architecture for existing licences, registrations, and authorisations that are legally tenable and universally acceptable. However, they will need to be put in place, and the sooner this is achieved, the more rapid, robust and resilient India’s digital journey will be.

The post Governing Digital India: A Report on Institutions and Instruments first appeared on CSEP.

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Executive Summary

Copper lies at the heart of the energy transition as a critical component for transforming the Indian economy, from the power grid and electric vehicles (EVs) to construction and advanced manufacturing. Moreover, as India focuses on simultaneously achieving accelerated economic growth and a green transition, the growth in demand for copper is bound to intensify.

Various international agencies have projected significant growth in global copper demand under different scenarios. Global refined copper demand is projected to reach around 33 million tonnes in 2035 and 37 million tonnes by 2050 under the stated policy scenario (International Energy Agency, 2025). S&P Global forecasts it to rise substantially, reaching 53 million tonnes by 2050. Similarly, the International Copper Association (ICAI) anticipates that copper demand will reach about 50 million tonnes by 2050. Given that current global refined copper production stands at approximately 26.5 million tonnes annually, the demand–supply gap is expected to become acute unless there is a considerable increase in production capacity or technological advancements.

As discussed in this report, in India, projections indicate copper demand will increase significantly, reaching 3.24 million tonnes by Fiscal Year (FY) 2030 within the conventional sectors, with construction, industrial, and electricity primarily dominating copper usage. Additionally, the energy transition sector, although currently smaller, is expected to experience rapid growth, with demand projected to reach 274 thousand tonnes by FY 2030.

This report provides a comprehensive examination of the copper sector in India, highlighting its current status, strategic importance, and emerging vulnerabilities throughout the supply chain. By mapping India’s copper ecosystem against global trends, it identifies critical gaps and delivers actionable recommendations to secure a resilient, future-ready copper value chain.

This report aims to:

• Provide a global overview of the copper sector, mining, and processing.
• Estimate India’s copper demand in the energy transition and conventional sectors until FY 2030.
• Evaluate India’s domestic production constraints, global supply chain risks, and the impact of policies on copper mining, processing, and downstream industries.
• Assess India’s import dependency at different segments of the value chain by analysing trade patterns of ore and concentrates, cathodes, and semi-finished and finished goods.
• Assess the potential of copper recycling for circularity and examine the concomitant opportunities and challenges in providing a supplementary source of secondary raw material in India.
• Propose strategic recommendations to key Indian stakeholders to ensure a resilient and sustainable copper supply chain.

Methodology

The report adopts a qualitative research methodology supplemented by extant quantitative analysis from the Centre for Social and Economic Progress (CSEP) of copper demand projections. We have adopted the following sequence of steps:

• An extensive review of literature, government reports, acts and legislation, industry reports, case studies, and other policy documents pertinent to Indian and global copper supply chains and  industries.
• Research consultations with subject matter experts, stakeholder interactions, internal presentations, and meetings and discussions with scholars at CSEP.
• Focused group discussions, closed-door meetings, and interviews with government officials, industry and academic experts, and fellow researchers in other think tanks and research organisations.

Key Findings and Analysis

Global Copper Scenario: Supply Chain Risks

The global copper landscape is highly concentrated, with a few geographies dominating its extraction and China owning over 44% of global processing capacity. The copper supply chain is vulnerable to geopolitical turmoil, resource nationalism, regulatory and governance challenges, and sustainability concerns. By 2050, global refined copper demand is projected to reach 50 million tonnes, driven by energy transition and industrialisation needs.

• Resource Depletion and Limited Exploration: While reserves are depleting and ore grades are declining, increased exploration investment in recent years has not yielded significant discoveries. Of the total copper discoveries, very few have progressed towards actual mine development. Not much focus has been given to greenfield areas to unlock the intrinsic, uncharted potential.
• Export Restrictions: Export restrictions on critical raw materials, including copper, are increasing as countries leverage natural resources to benefit their national economies. For example, Indonesia’s planned ban on copper concentrate exports poses a risk to global supply stability.
• High Processing Costs and Plummeting TC/RCs: Copper processing requires high upfront Capital Expenditure(CAPEX) and Operational Expenditure(OPEX), with declining ore grades further driving up costs. Globally, treatment and refining charges (TC/RCs) are plummeting drastically due to the huge expansion of smelting capacity on the demand side, combined with supply crunches of ore and concentrates. This situation erodes smelters’ margins. Escalating costs with diminishing profit margins deter investor interest.
• Geopolitical and Environmental Risks: Geopolitical risks refer to uncertainty due to politically unstable sourcing regions and unprecedented export restrictions. Declining ore grades render mining more energy and water-intensive, increasing operational and logistics costs. Latin American mines face water scarcity issues and operational disruptions pertaining to social unrest over environmental concerns, while Africa’s mining sector grapples with governance challenges.

India’s Copper Scenario: Demand–Supply Gaps

India’s net-zero commitment by 2070, clean energy transition, infrastructure expansion, and rising private consumption will drive up the demand for copper. Despite significant reserves, India remains a net importer of copper due to low exploration success, outdated technologies, exhausted mines, the inefficacy of auctions to attract new mining and exploration blocks, insufficient investment, and limited private sector participation. At the current production rate, known copper reserves can be sustained for only approximately 45 years, necessitating the need for alternative supply sources and leveraging recycling potential. The closure of a major copper smelter in Tuticorin has reduced cathode output by 40%, exacerbating import dependence. Sourcing of copper from secondary sources is also limited due to low recycling capacity and nascent infrastructure. The rising import of copper-embedded finished products indicates domestic midstream processing constraints and undermines the scope for domestic value addition.

Challenges in the Indian Copper Value Chain

• Upstream: Under the current mining policy regime, India’s geological potential remains underexplored, coupled with a complicated auction regime and delayed statutory clearances, thus leading to a lack of new investments. The sole domestic copper miner, Hindustan Copper Limited (HCL), faces operational inefficiencies, leading to stagnant ore and concentrate production.
• Midstream: Raw material scarcity, technological inefficiencies, and plummeting TC/RCs reduce the competitiveness of the midstream sector. The closure of Sterlite’s Tuticorin smelter due to environmental non-compliance left Hindalco as the only primary supplier of refined copper. However, this situation has started to improve with the commencement of operations at Adani’s Kutch Copper Limited’s 0.5 million-tonne processing plant. Another new plant with a similar capacity will also be commissioned by 2029.
• Downstream: Increased reliance on imported copper products undermines domestic processing. Domestically produced cathodes are insufficient for downstream processing. Trade agreements and liberal import policies facilitate duty-free imports. At the same time, the easy import of finished products, many of which are subsidised in their exporting nations, has undermined the price competitiveness of India’s midstream and downstream copper sectors.
• Recycling: India’s secondary copper infrastructure remains underdeveloped, informal, and unregulated, raising safety and purity concerns. The domestic scrap market needs to be formalised, given the immense copper recovery potential from scrap and e-waste.
• Trade: India became a net importer of copper cathodes in FY 2019, while imports of copper ore and concentrates declined due to reduced processing demand. To secure raw materials, India is diversifying its supply sources, though Indonesia’s ban on copper concentrates poses a risk. Historically, a net importer of copper products such as wires, rods, pipes, and tubes, India has recently achieved a surplus in rod exports, indicating the growth of its domestic manufacturing sector and improving export competitiveness.

Policy Recommendations

Upstream: Enhancing Exploration and Mining

India is import-reliant for more than 50% of its copper needs. Given the rising copper demand across the world and India’s growing copper needs, India must explore and extract more copper, as large resources and reserves lie unexplored and hence not mined. Policy reforms are urgently needed to attract investment in exploration and mining activities to ensure a favourable return on investment. Given copper’s strategic significance to India’s economy, the mineral concession procedure—from auctioning to granting statutory clearances and commencing mining operations needs to be streamlined to avoid any unnecessary delays and backlogs.

Midstream: Strengthening Processing Capabilities

To stabilise eroding margins, smelters should consider diversifying revenue streams by capitalising on high-value by-products such as sulphuric acid, gold, and silver, as well as using more intermediate products, including blister copper, anodes, and scrap (Fastmarkets, 2025). Strategic collaborations, including joint ventures, contract manufacturing, and long-term commercial agreements among miners, processors, and downstream industries, are important to drive technological innovation, risk-sharing, and economies of scale. The existing environmental regulatory frameworks need to be strengthened. Domestic companies should be encouraged to achieve globally recognised certifications like the “Copper Mark” to reinforce credibility and transparent third party verification in responsible sourcing, processing, and recycling.

Downstream: Bolstering Domestic Manufacturing

The large-scale entry of Kutch Copper is expected to make domestic cathodes available and costcompetitive for downstream manufacturers, reversing India’s status as a net importer. There is a need to undertake a comprehensive review of existing trade agreements and duty structures, particularly the agreements with the Association of Southeast Asian Nations (ASEAN), Japan, South Korea, and the United Arab Emirates (UAE). Strategic vertical integration is required to streamline operations across the copper value chain, consolidating fragmented market segments for improved efficiency. Quality Control Orders (QCOs) should be reassessed to avert any supply crunches of cathodes to the downstream industries without compromising on quality.

Recycling and Circular Economy Measures

Regulatory oversight is needed to structure and formalise the scattered and unorganised sector engaged with collection, sorting, and reprocessing through adherence to environmental and safety standards. It is important to develop a robust domestic secondary copper market by facilitating direct linkages between scrap vendors, recyclers, and copper processors. Industries should be encouraged to use more recycled materials, guided by the overarching principles of the circular economy. Extended Producer Responsibility (EPR) rules need to be strengthened and made effective to ensure proper end-of-life management and resource recovery.

Leveraging Foreign Policy Instruments: Across the Value Chain

India should proactively engage with key copper-reserve-rich and copper-producing countries such as Chile, Peru, the Democratic Republic of Congo (DRC), Australia, and Zambia through resource diplomacy, strategic acquisitions, and effective partnerships. Apart from KABIL-led G2G initiatives, more Business-to-Business (B2B) and Government-to-Business (G2B) collaborations are essential in the areas of exploration, technology and knowledge exchange, value-added processing, and recycling. Existing bilateral relationships should be leveraged more effectively, along with multilateral forums such as the Mineral Security Partnership, Indo-Pacific Economic Framework, Supply Chain Resilience Initiative, and Quad–ASEAN, to deepen economic cooperation. Trade, investment, and offtake agreements should be used strategically as alternative finance mechanisms to secure a sustainable copper supply chain.

Concluding Remarks

India’s growing copper demand calls for a holistic and comprehensive strategy that integrates the domestic copper value chain with international partnerships, technological advancements, and sustainable practices. Strengthening upstream and midstream capacities while fostering a robust downstream manufacturing sector will be crucial in bridging the demand–supply gap and prioritising domestic value addition. By adopting strategic policy interventions and aligning with international best practices, India can enhance its copper self-sufficiency and secure a resilient supply chain for future industrial growth and energy transition.

The post The India Copper Report: Navigating Through the Demand and Supply Gap first appeared on CSEP.

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REPORT SUMMARY

This is the second report in a multi-year research project on China’s expanding influence in South Asia, from Afghanistan to Myanmar and Nepal to Sri Lanka. It offers a comprehensive
framework to understand the range, methods, and implications of China’s rising influence which has profound implications for the region’s political, economic and security future.

While much attention has been paid to China’s economic and security presence, the authors argue for a shift towards examining China’s less visible, long-term strategies of influence—particularly in the political, regulatory, cultural, and informational domains. There is significant research on China’s non-traditional means of influence in other regions such as Europe and Southeast Asia. This report provides an empirical survey of China’s influence strategies in South Asia by prioritising South Asian perspectives on China’s rise in the region.

The breadth of China’s presence in South Asia has increased since the Belt and Road Initiative (BRI) was launched in 2013. China has become a key trading partner and investor in infrastructure, as well as a provider of military supplies. Yet, beyond these visible sectors, China is also quietly shaping regulatory standards, education, media, and political contexts across the region. The reports throw light on two neglected aspects of China’s regional outreach: the agency of smaller South Asian states in drawing China in, and the diversity of China’s tools behind the scenes—ranging from party-to-party diplomacy to Buddhist soft power and influence operations.

The second phase of the project has 12 case studies across five thematic sectors: civil society and culture, economy and governance, conflict mediation, defence and security, and influence operations. These are arranged along a spectrum of types of engagement: from the more visible (‘in the open’) to opaque (‘behind the scenes’). While these case studies do not allow for sweeping generalisations, they offer crucial empirical insights into the complexity of China’s strategies, their varying impacts and the role of South Asian actors. This is of particular relevance to policymakers in governments, as well as other actors engaging with China across the region — including industry, media and civil society.

The post How China Engages South Asia: In the Open and Behind the Scenes first appeared on CSEP.

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Abstract

This chapter examines China’s propaganda and influence operations in Sri Lanka through Twitter/X. By analysing the activity of the Chinese Embassy in Sri Lanka (@ChinaEmbSL) and the Belt and Road Initiative (BRI) Sri Lanka (@BRI_SL) accounts from 2020 to 2024, it uncovers strategies employed to promote pro-China narratives and counter criticism. The research identifies key themes and strategic messaging patterns. While the Chinese Embassy account focuses on diplomatic relations, the BRI Sri Lanka account emphasises economic cooperation. Both consistently portray China positively whilst critiquing Western influence. The broader Twitter/X discourse around China–Sri Lanka relations reveal more diverse perspectives, particularly from Indian sources, highlighting the absence of strong, independent Sri Lankan voices. The research contextualises these findings within China’s global ‘wolf warrior’ diplomacy, concluding with a call for ongoing critical analysis of China’s evolving influence operations in Sri Lanka.

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This study examines methods, tactics, and objectives of China’s influence operations among the Tibetan diaspora in India and Nepal in the post-2008 period. While China’s influence operations show continuity from previous periods in terms of objectives and tactics, post-2008, China’s increasing use of digital methods is a marked change. Further, based on analysis of the budgets and institutional changes, the author shows that the Chinese state has invested significantly more resources to enhance state capacity. This is reflected in the multi-fold increase in the budget of security-legal apparatus. Other institutions, such as foreign affairs offices and the United Front Work Department (UFWD), enjoy greater resources and political power. Greater state capacity has a direct impact on influence operations in terms of the State’s effective penetration into local society and enforcement of restrictions on the cross-border movement of Tibetans. At the same time, internal institutions such as foreign affairs offices and the UFWD engage in influence operations abroad, marking enhanced state capacity as a key shift. Investing in institutions responsible for dealing with domestic-diaspora linkages and proactive engagement with sections of diaspora and population in Nepal and India, China’s influence operations underline the urgency to address a key aspect of the Tibet question, facilitated by greater resources at home.

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China’s influence in Nepal’s northern districts has intensified in recent years, driven by strategic interests in border security, economic development, and geopolitical positioning. By investing in infrastructure, extending border security measures, and expanding development cooperation in the bordering districts, China aims to solidify its presence in the borderlands. However, these actions have disrupted traditional cross-border interactions, livelihoods, and social dynamics.

The borderlands between Nepal and Tibet, characterised by customary cross-border movements and strong community ties, are now undergoing significant transformation. While China’s investments promise economic opportunities, the hardening of the border and securitisation have curtailed cross-border trade and cultural exchange. As a result, local communities face challenges in adapting to these new realities. Nepal’s capacity to balance its relationship with China while preserving its sovereignty and well-being of its borderland population is a critical issue.

The post Securitising Borderlands: China’s Interventions in Nepal’s Northern Districts first appeared on CSEP.

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China’s security relations with Sri Lanka are relatively understudied compared to its political and economic relationships with Sri Lanka—despite the publicity when military vessels or research vessels visit Sri Lankan ports. This research contributes to developing the conversation and knowledge surrounding China’s influence in South Asia by deliberating on the Sino-Sri Lankan defence relationship from 2012 to 2023. In doing so, the study makes two central inquiries: how is China using military diplomacy to achieve its foreign policy objectives, and what are the tools that China is using to implement its defence diplomacy? This paper relies on several primary sources of data, such as vernacular sources of literature on defence and security, interviews with bureaucrats and defence officials, data from the government of Sri Lanka and the People’s Republic of China, and media reports to address the questions. Secondary sources of data from various databases were also used to triangulate the data that was extracted from primary sources. Through a rigorous analysis of the content, the research paper sheds light on the exchanges, training, and funding China has provided to the Sri Lankan armed forces. This research provides two main findings on the nature of military diplomacy conducted, the motives for undertaking military diplomacy, and how they support China’s foreign policy objectives.

The post Navigating Seas of Cooperation: China’s Military Diplomacy in Sri Lanka first appeared on CSEP.

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The article analyses the dynamics of Sino-Bangladesh defence diplomacy by exploring the key drivers behind bilateral military relations. It explores the historical evolution of defence cooperation between two countries, followed by an examination of different modalities of Sino-Bangladesh military partnership, including bilateral visits, arms procurements, scientific and technical support to Bangladesh’s emerging military-industrial complex. The article also assesses the role of recent developments, such as the political shifts in Bangladesh after the 2024 uprising and the ongoing civil war in reshaping the overall bilateral defence ties. It argues that the defining characteristics of Sino-Bangladesh defence relations is the practice of dual-track diplomacy, where Beijing simultaneously maintains and develops ties with both military and civilian leadership of Bangladesh.

The post From Hardware to Heartware: China’s Evolving Military Relations with Bangladesh first appeared on CSEP.

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This chapter discusses the relationship between China and Myanmar following the 2021 coup, emphasising the impacts of Operation 1027. Launched by the Three Brotherhood Alliance (3BHA) against Myanmar’s State Administration Council (SAC) in October 2023, the operation aimed to eliminate scam gangs, primarily driven by the Myanmar National Democratic Alliance Army’s (MNDAA) territorial ambitions in the Kokang region. China’s tacit endorsement of the operation led to a partial ceasefire in northern Shan State but exacerbated conflicts in Rakhine State, affecting India’s strategic investments.

The analysis highlights China’s engagement strategies with the SAC and non-state armed actors, revealing the complexities and limitations of its influence. It examines the motivations behind China’s heightened focus on scam gangs in 2022, linking it to domestic political concerns and efforts to manage international perceptions. The chapter concludes by assessing the unforeseen consequences of Operation 1027, including the weakening of the SAC and the challenges China faces in mediating a ceasefire. The strategic implications for regional security are underscored, calling for deeper analysis to fully grasp China’s evolving role in Myanmar’s unstable political landscape.

The post Multi-layered and Multi-Agency: China’s Engagements with Myanmar and Operation 1027 first appeared on CSEP.

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This paper examines China’s involvement in Afghanistan’s peace process from 2014 to 2021, a period marked by significant regional transformations. As the United States withdrew, China’s engagement intensified, driven by strategic interests in maintaining stability, fostering its economic interests, and addressing security concerns posed by groups such as the East Turkestan Islamic Movement (ETIM). While initial optimism prevailed, China’s mediation efforts ultimately proved unsuccessful. A content analysis of Chinese Embassy communications from 2011 to 2021 sheds light on China’s approach to peace in Afghanistan. The findings reveal China’s persistent reliance on facilitating talks between the Taliban and the Afghan government and on reducing tensions between the Afghan and Pakistani governments. Hindered by its reliance on Pakistan and the Taliban’s evasion of negotiations, China lacked the leverage needed to mediate effectively, highlighting the complexities of its role in the region. This paper contributes to our understanding of the limits of China’s diplomacy and the challenges faced by external actors in volatile regions such as Afghanistan.

The post The Limits of Chinese Diplomacy in Afghanistan: Mediation Initiatives (2014–2021) first appeared on CSEP.

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This paper investigates the growth and expansion of Chinese companies in India’s electronics industry, specifically those manufacturing smartphones. It analyses their ability to embed themselves in the consciousness of Indian consumers and skilfully negotiate turbulences in the India–China bilateral relationship. A closer examination of their sales and marketing, alongside brand building and advertisement strategies, will aid in this endeavour. The paper also explores their relationship with governments in India, whose support is critical for successful and sustained operations. In decoding how the Chinese smartphone companies have been able to carve a niche for themselves in the Indian market (the second largest in the world for smartphones), the paper asks how Chinese smartphone companies negotiate the increased scrutiny and regulatory controls of the Indian government post the developments in Eastern Ladakh in 2020? The longevity of these companies in India can be explained by their ability to adapt and evolve even while retaining the confidence of consumers, thereby keeping their sights firmly fixed on the sheer size of the Indian market.

The post Building Influence by ‘Rising Step by Step’? Chinese Capital’s Permeation of India’s Electronics Industry first appeared on CSEP.

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This chapter explores the role of domestic law and institutions in selecting, approving, and contesting Chinese-funded infrastructure projects in Sri Lanka, an often-overlooked aspect of the broader discourse about China’s Belt and Road Initiative (BRI). This analysis raises two fundamental questions: Have Chinese-funded infrastructure projects in Sri Lanka influenced the country’s legal landscape, and if so, how? This chapter argues that they have had a considerable influence on Sri Lanka’s domestic legal landscape, with impacts extending from exposing lacunae in the country’s governance framework on development projects to prompting the enactment of new laws. They revealed gaps in certain applicable regulatory frameworks while prompting the establishment of new ones and necessitating the enactment of new laws either to facilitate specific Chinese-funded development projects or to address certain concerns associated with them. Some projects have allegedly violated applicable regulations, necessitated legal amendments, and tested certain public law mechanisms. The chapter delves into the nuances of these legal impacts, offering a novel analytical framework and an alternative interpretation of the already known legal issues and developments associated with Chinese-funded infrastructure projects in Sri Lanka.

The post Domestic Legal Impacts of Chinese-Funded Infrastructure Projects in Sri Lanka first appeared on CSEP.

Abstract

This chapter examines China’s public diplomacy towards Afghanistan through the media. Despite significant improvements in Afghan media before the collapse of the Islamic Republic of Afghanistan (IRoA) (2001–2021), which attracted generous support from the international community, China’s contribution was marginal. Nevertheless, China continued its engagement by employing and utilising Chinese media, supporting Afghan media, providing journalists with professional and technical training and trips to China, and maintaining relationships with media practitioners. This engagement has continued after the regime change in August 2021. How does China involve itself with the media in Afghanistan, and what are the dominant patterns of media interaction? This chapter explores China’s support of particular Afghan media outlets, its use of social media–primarily Facebook and X–and its attempts to expand its media presence while maintaining a selective yet proactive approach.

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Abstract

China’s involvement in Nepal’s tourism sector has grown significantly in recent years. Informed by the Belt and Road Initiative and capitalising on its increased economic influence, China has solidified its tourism partnership with Nepal through its engagement with both hard and soft infrastructure projects in Nepal. In this paper, I examine China’s engagement with Nepal’s tourism sector through an examination of the tools, instruments, and channels it deploys to pursue its interests and what that means for Nepal. The paper relies on both primary and secondary data collected over the last five years with various tourism and heritage stakeholders in Nepal. The paper finds that while the growth of Chinese tourism in Nepal diversifies Nepal’s tourism and eases Nepal’s over-reliance on tourists coming from south of the border, this also presents a challenge in that it introduces vulnerabilities as China’s diplomacy in other world regions has used its tourism dominance to exert political and other pressures. Additionally, China’s growing influence could shift the geopolitical balance in South Asia, and Nepal must align its tourism ambitions with national interests that will help affirm regional stability and long-term resilience.

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It has been 10 years (2013–2023) since China established the flagship project of its Belt and Road Initiative (BRI) in Pakistan, known as the China–Pakistan Economic Corridor (CPEC). During this time, it has proactively engaged in what will be referred to in this report as ‘awards diplomacy’, which helps create a positive image of China and CPEC in Pakistan. This study examines Chinese awards, including the Friendship Award, given to Pakistani citizens in recognition of their work. It draws on the author’s novel dataset of Chinese awards given to Pakistani citizens from 2013–2023. As such, this is the first time Chinese awards given to citizens in a BRI country have been studied. The findings reveal the importance of those who help disseminate goodwill towards China and CPEC in China’s public diplomacy engagement in Pakistan.

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This chapter introduces the report, offering an analytical framework for this multi-year research project and summarising its key findings and trends. The first section reviews the expanding and multifaceted, yet understudied, presence of China in South Asia, which sets the context for our research agenda. The second section identifies a gap in the existing literature, which focuses on the economic and security dimensions of China’s engagements—areas that tend to be more tangible and thus more visible. We argue for a shift in perspective to study the many opaque ways by which China builds long-term influence behind the scenes, often escaping public scrutiny. The third section describes the research objectives of the second phase of the project, of which this report is an outcome. These objectives include emphasising evidence-based assessments of Chinese actions, both overt and covert, methodological approaches that privilege empirical granularity, and the quest to build regional capacity through collaborations and comparisons. The fourth section summarises this report’s 12 case studies, organised into five sections in order of increasing difficulty in discerning the long-term impact or implications of Chinese activity. Based on these case studies, the chapter’s final section highlights two defining features of China’s engagements in South Asia: their range and creativity, and the calibration that underlines them. We examine how China may adjust its behaviour in South Asia amidst the United States’ (US’) changing geopolitical posture and conclude by suggesting some avenues for future research.

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This second volume is the result of that continuing study of China’s growing influence by scholars from the countries of the sub-region. The range of Chinese interventions in south Asia has grown in the last decade to include conflict mediation, influence and social media operations, and cultural diplomacy, apart from an expansion of traditional economic and defence engagements to new tools and methods. In the process of this study, we have expanded our research agenda and methods and understanding of this phenomenon, as will become apparent from the case studies contained here.

These essays are both timely and topical. By working together with a network of scholars from the countries concerned, we were able to learn from each other and the studies achieved granularity and common analytical rigour that is rare. I also hope that they will contribute to the ongoing debate and reshaping of south Asia’s international political and economic engagement with a world in churn and change. South Asia has much to learn from its own experience and the more we can share with each other the more we benefit.

It is also our hope that the south Asian experience of China may be of interest to others outside the subcontinent who may find echoes of their own policy options and dilemmas. If so, this exercise would have met another one of our initial goals, to see how and whether experiences and analytical frameworks developed in our context can be generalised or produce broader learnings.

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The Centre for Social and Economic Progress (CSEP) Annual Report for 2024-2025 provides a comprehensive overview of our achievements, initiatives, and impact throughout the year through our research papers, high-level conferences, and events, cutting across various disciplines, enriching dialogues and discussions.

Our Annual Report offers a transparent and informative glimpse into our performance and impact showcasing our journey of informing public discourse on emerging themes and persistent challenges through independent, policy-oriented, evidence-based research. Through the pages, you can explore the highlights of CSEP’s accomplishments in diverse domains from Foreign Policy, Climate Change, Energy, Macroeconomic Policies, Non-Fuel Minerals and Mining, and Health and Human Development. The report also lays out the roadmap for our journey ahead and plans for the coming year.

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The Centre for Social and Economic Progress (CSEP) Annual Report for 2023 provides a comprehensive overview of our achievements, initiatives, and impact throughout the year through our high-level conferences, excellent research papers cutting across various disciplines, enriching dialogues and discussions, media engagement, and notable team expansion.

Our Annual Report offers a transparent and informative glimpse into our performance and impact showcasing our journey of informing public discourse on emerging themes and persistent challenges through independent, policy-oriented, evidence-based research. Through the pages, you can explore the highlights of CSEP’s accomplishments in diverse domains from Foreign Policy, Climate Change, Energy, Macroeconomic Policies, Non-Fuel Minerals and Mining, and Health and Human Development. The report also lays out the roadmap for our journey ahead and plans for the coming year.

The post 2023 CSEP Annual Report first appeared on CSEP.

India’s journey towards climate resilience and sustainability is undeniably intertwined with international cooperation. Especially since the global landscape is fraught with fragmentation amidst geopolitical conflicts and divergent interests. Climate change, more than ever, underscores the need for collaborative efforts, even as it tests the limits of international diplomacy and governance. The United Nations system, traditionally a cornerstone of global cooperation, faces fragmentation, while multilateral development banks grapple with the need for reforms. In this evolving landscape, the path towards effective climate action becomes increasingly challenging for India and its partners, especially in the Global South.

This report is a culmination of a year-long research project co-led by our CSEP fellow Constantino Xavier and our non-resident fellow, Karthik Nachiappan, from the National University of Singapore. It is built around the contributions from Indian and international experts with seven case studies that offer a comprehensive view of India’s evolving global climate strategy. Benefitting also from consultations with policymakers and experts, through workshops and roundtables, this report reflects the growing intersection between Indian foreign policy and critical global challenges such as climate change.

The report emphasises that India has been more than a mere participant in the global climate discourse; it has been an innovator, contributing to novel solutions beyond the United Nations Framework Convention on Climate Change (UNFCCC) and the Conference of the Parties (COP) negotiations. The seven case studies, serve as a testament to India’s adaptability and innovation in pushing the boundaries of climate action. India’s progress in addressing the need for climate mitigation and adaptation has been both commendable and swift.

However, in the rush to embrace change and explore new tracks, it is imperative to pause and take stock of the achievements, challenges, and the path ahead. This report not only maps India’s journey in the climate arena but also contributes to a pressing and strategic debate on how to further accelerate its efforts. It offers both a reflection on what Indian diplomacy has accomplished and a blueprint for where it could go further.

The post Preface first appeared on CSEP.

How does India collaborate with European partners on climate action? This policy brief examines the 2016 India–EU Clean Energy and Climate Partnership and various climate-related partnerships that New Delhi has entered with member states of the European Union (EU). Having established a set of partnerships with the European Commission, the European Investment Bank, and several EU member states, India has attempted to engage European partners comprehensively in recent years. Some, but not all, member states have decided to join India-led climate institutions, such as the International Solar Alliance. The brief argues that Indian diplomacy should evaluate the balance between engaging at the EU level and at the bilateral level with EU member states and reflect on the resources allocated to implement these partnerships. It concludes with offering a few options for India’s future climate diplomacy with Europe.

1. Introduction

As the third- and fourth-largest emitters of greenhouse gases, the European Union (EU) and India are increasingly seeking ways to scale up joint climate action amidst the global climate crisis. With a shared priority to lead global climate action, the green transitions the two actors are targeting have emerged as pivotal areas of cooperation. Although the leaders at the virtual 15th India–EU Summit in July 2020 committed to “prepare and implement a new work programme” under the India–EU Clean Energy and Climate Partnership (India & EU, 2020), India entered a green strategic partnership with Denmark just two months after the summit. In light of India co-chairing the International Solar Alliance (ISA) with France, co-leading the Leadership Group on Industry Transition (LeadIT) with Sweden, and discussing an upgrade of the 2016 India–EU Clean Energy and Climate Partnership, New Delhi’s decision to proceed with Denmark as a green strategic partner made sense to some extent. India had fresh institutional memory of building partnerships around climate action and identified an opportunity to engage the Nordic wind power leader through a novel format. At the same time, the decision was perplexing, since India has limited institutional capacity to implement its existing partnerships. However, the new Indo–Danish green strategic partnership did not stop New Delhi and Brussels from agreeing on a new work programme at the India–EU Leaders Meeting in 2021. Yet, these diplomatic developments raise a core question: How does India collaborate with European partners on climate action?

This policy brief depicts India’s diplomatic engagements with the EU-wide institutions and bilateral relationships with EU member states as a balancing act between the bilateral level and the EU level. India collaborates not only with member states but also directly with the European Commission and the European Investment Bank (EIB) on climate action. While India and the EU have historically been on separate sides in formal climate negotiations under the United Nations Convention Framework on Climate Change (UNFCCC), their bilateral relationship significantly addresses climate action. The different levels of engagement reflect a broader trend in India–EU relations, where Indians and Europeans have been cooperating at the bilateral and EU levels. Previous research underlines that India prefers the bilateral level, whereas small and medium-sized EU member states prefer the EU level (Aspengren, Lidén, &Nordenstam, 2021). However, with numerous new climate partnerships inked in recent years, it is time for India to take a step back and reassess their impact, evaluate the balance between engaging at the EU level and the bilateral level with EU member states, and reflect on the allocation of resources to implement these partnerships. First, this brief offers an overview of India’s climate-related engagements with the European Commission and other EU institutions. Second, the brief discusses India’s engagements with EU member states and maps EU member states’ involvement with India-led climate institutions. Finally, the brief proposes options for India’s future climate diplomacy with the EU.

2. India’s Engagement with EU Institutions

India and the European Economic Community entered diplomatic relations in the early 1960s, and both continents have undergone vibrant societal and political transformations. After more than a century under British rule, independent India emerged and sought to make its voice heard in world affairs. The Europeans, in turn, sought closer market and political integration to build conditions for peace between countries that had been at war earlier. At this time, neither environment, climate, nor energy were priority issues for the bilateral relationship. As the decades passed, however, climate-related issues became a diplomatic concern in light of climate change. Over time, the European Economic Community transformed into the European Union. After two decades of being on separate sides of delicate climate negotiations under the UNFCCC, India and the EU agreed on bilateral initiatives and climate partnerships.

The first joint initiative India and the EU agreed upon was the India–EU Initiative on Clean Development and Climate Change in 2005. In the following years, a Joint Working Group was established on energy, clean energy, and climate change. Additionally, an Energy Panel emerged as an institutional dialogue platform for the partners. Simultaneously, India adopted a national action plan on climate change and national solar energy and energy efficiency missions. In 2012, the partners agreed on a joint declaration for enhanced cooperation on energy at the 12th India–EU Summit in New Delhi.

After a few years of a frosty India–EU relationship and scant climate cooperation, they entered into a Clean Energy and Climate Partnership at the 13th India–EU Summit in 2016. Agreed upon six months after the Paris Agreement at COP21, the partnership illustrated the constructiveness of finding new ways of realising concrete cooperation. Since 2016, the leaders have reiterated the importance of the partnership in joint statements at various India–EU summits. Even as the EU unilaterally adopted a Strategy on India in 2018, the Indian Ministry of External Affairs underlined the importance of cooperating on sustainable development while welcoming the strategy (MEA, 2018). Two years later, at the 15th India–EU Summit, India and the EU agreed on a Roadmap to 2025 with 20 paragraphs referring to either climate change, clean energy, or the environment (India & EU, 2020). Against this backdrop, it is not surprising that Indian and European officials convened a Climate Change Dialogue for the first time in 2021 and also added a working group dealing with clean and green technologies to their newly established Trade and Technology Council(TTC). Besides, the TTC also has a working group on resilient value chains (European Commission, 2023). However, it should be noted that the TTC working group on climate and green technologies does not replace the Energy Panel or the Climate Change Dialogue since different interlocutors are involved on the European side.[1]

The climate partnership with European actors has resulted in concrete action across Indian states. According to the India–EU Clean Energy and Climate Partnership dashboard, the EU-wide partnership has implemented at least 82 projects across 26 states and union territories. For instance, through EU Solar Park projects, 16 states received technical assistance, including the Kurnool Solar Park in Andhra Pradesh, the Pavagada Solar Park in Karnataka, and the Bhadla Solar Park Phase II in Rajasthan.[2]However, since the dashboard has not been updated, it is not possible to get a comprehensive overview of India–European cooperation, and further research is required to estimate the economic value of these projects.

The European Investment Bank (EIB) has several projects that include financial support to Indian states and cities. Between its inception in 1959 and 2013, the EIB had allocated 700 million euros to projects in India. However, since 2014, it has substantially increased its funding to sectors and projects in India. For instance, the EIB invested EUR 3.9 billion in India between 2014 and 2023, of which EUR 3.5 billion was meant for the transport and energy sectors (European Investment Bank, n.d.). The transport projects support the construction of metro rail infrastructure in Agra (EUR 250 million), Bangalore (EUR 500 million), Bhopal (EUR 400 million), Kanpur (EUR 350 million), and Pune (EUR 500 million). An example of the support allocated to energy-sector projects includes funding allocated to two photovoltaic power plants in Tamil Nadu (EUR 47 million).

It is noteworthy that the EIB is also planning to invest in the Indian green hydrogen market. In February 2023, the EIB joined the industry coalition, India Hydrogen Alliance, and announced the availability of EUR 1 billion for concrete projects on green hydrogen in India (Koundal, 2023).

Besides the EU-wide EIB, India has engaged with German and French developmental agencies for decades. For instance, the Deutsche Gesellschaft für Internationale Zusammenarbeit(GIZ) has supported projects in India since the 1960s, and the AgenceFrancaise de Développement(AFD) began partnering with India in 2008. To provide an example of the range and depth of engagement, GIZ currently runs 81 projects in India at a value of EUR 436 million (GIZ, n.d.).[3]Such support should be considered against the strong nexus of development and Indian climate policy, although some projects constitute development instead of climate cooperation.

2.1 Climate-Related Friction in the Trade Talks and the European Green Deal

In light of the economic angle of the partnership, it is unsurprising that climate-related issues feature in the current ongoing trade negotiations relating to a free trade agreement (FTA), an investment protection agreement, and a geographical indications agreement between India and the EU. The main reason for this is that the EU prioritises sustainability and environmental standards in its trade deals; in the past, sustainability and environmental standards have been challenging issues in the trade negotiations between India and the EU.[4]A decade ago, stalled trade talks between the EU and India had a negative impact on bilateral climate cooperation (Torney, 2019). Given that sustainability and environmental issues have become quite pressing, finding compromises may be critical to reaching common ground before proceeding with the implementation phase of a trade deal. While there is immense untapped potential in the economic relationship between the EU and India, there is also an urgent need to sort out some of the misunderstandings (Observer Research Foundation & Jacques Delors Institute, 2023).

Friction has also appeared pertaining to the European Green Deal. India has expressed scepticism about the Carbon Border Adjustment Mechanism (CBAM), which imposes taxes on carbon-intensive goods, as Europe transforms into a climate-neutral green economy. Since the carbon intensity of Indian steel plants is higher than the global average, steel exported from India to Europe could be affected by CBAM (Law, 2023). In response to the opposition to CBAM, India endorsed the Brazil, Russia, India, China and South Africa (BRICS) statements expressing their “grave concern” in 2021. And in 2022, the CBAM was highlighted as “incompatible with multilateral rules under the World Trade Organization” (BRICS, 2022). In response to Indian opposition, EU Climate Commissioner Frans Timmermans claimed that CBAM would be WTO-compliant and clarified to the Indian press that “if CBAM has undesired results, then we can correct it” (Kumar, 2023).

At the same time, the European Green Deal offers a major market opportunity for Indian industry since the EU seeks to decrease its dependency on China (Oertel, Tollmann, & Tsang, 2020). In 2021, 89% of the EU’s solar panel imports and 64% of wind turbine imports originated from China (Eurostat, 2022). As the implementation of the European Green Deal continues, Europe will need solar panels and wind turbines originating from elsewhere to de-risk the EU–China relationship. India could become a major beneficiary, with Europe diversifying its solar panel imports. However, to what extent India’s opposition to CBAM affected European interest in purchasing Indian-made solar panels remains to be seen.

Meanwhile, the preliminary design for the implementation of CBAM has triggered new proposals in the European policy debate. A proposal that India could potentially benefit from is a co-innovation fund for projects with priority partners based on incomes from CBAM and the EU Emissions Trading System (Engström, 2022). Since CBAM is expected to be fully operational by 2034, India and the EU still have time to discuss ways to address CBAM-related frictions.

3. India’s Engagements with EU Member States

India has entered into different kinds of partnerships with EU member states to foster cooperation. Interestingly, most of these partnerships were publicly announced in the presence of Prime Minister Modi at bilateral summits and, sometimes, during multilateral conferences. In short, India enters these climate partnerships on deliberately chosen occasions. As summits come with visibility and image-building opportunities for leaders, such temporal occurrences suggest that the prime minister has used these opportunities to underscore his reputation as a friend of the environment in his interactions with European leaders. Another reason could be that India and its partners see business opportunities in the green transition, which serve as a catalyst in fostering climate-related partnerships between them. While future research could examine how and why these partnerships came about, it is also likely that partners worry about the prospects of India becoming a new giant emitter such as China.

A few of the partnerships that India has chosen to formalise are quite attractive. For instance, the ISA that India co-chairs with France has evolved into a treaty-based institution after its inception in 2015. The Leadership Group on Industry Transition that India co-chairs with Sweden continuously attracts new members, including the United States in 2021 and Tata Steel in 2023. In September 2020, India entered into a Green Strategic Partnership with Denmark. A year later, India signed the Strategic Partnership on Water with the Netherlands. However, the list of climate-related partnerships that India has entered goes beyond these novel partnerships (see Table 1).

Besides climate-related partnerships, India has aimed to establish institutional frameworks by signing more than 30 Memorandum (s) of Understanding (MoUs) with 14 EU member states. Interestingly, every member state that currently has a climate-related partnership with India had, at some point, signed MoUs with India, indicating a gradual progression in the relationship—partnerships follow the MoUs. However, this progression could be construed as institutional upgrades, where investing in institutional capacity serves as a reminder of the importance of the relationships. Conversely, the partnerships could also be considered diplomatic expectation management, where institutional capacity is required to operationalise political instructions relating to the implementation of the already existing institutional frameworks.

In the past 15 years, the largest number of MoUs have been signed between India and Denmark. However, only three out of the six MoUs between Copenhagen and New Delhi were signed under the Modi government. In fact, with four different MoUs, it is France that has signed the most climate-related MoUs amongst EU member states during the Modi government.[5]Furthermore, several Indian ministries have finalised MoUs with EU member states. These include the Ministry of New and Renewable Energy; the Ministry of Environment, Forests, and Climate Change; the Ministry of Rural Development; the Ministry of Jal Shakti; and the Ministry of Urban Development.

An overview of the various MoUs paints a mixed picture of India’s climate diplomacy with EU member states. The optimistic interpretation is that India has successfully engaged half of the EU member states with these MoUs. The pessimistic view is that the other half remains unengaged despite widespread Indian diplomatic presence across Europe. For instance, the Baltic states do not have any MoUs with India on climate-related issues despite seeking closer partnership with India. Yet another interpretation is that EU member states prefer concrete joint projects rather than MoUs. Another view is that some EU member states simply do not need new MoUs since their partnerships are already functioning. Before inviting more EU member states to sign new MoUs as part of its climate diplomacy, India could benefit from formulating a policy on how to boost its current climate diplomacy with EU member states further.

EU member states have already been coordinating among themselves in New Delhi regularly. For instance, most European embassies have diplomats assigned to the climate change and energy portfolio since it is a priority issue. Amongst them, a group of 10–15 EU member states meet 6–8 times a year for internal coordination on concrete topics related to climate, energy, and environment,[6]convened by the EU Delegation in New Delhi. This is in stark contrast to the early 2010s, when the European diplomatic community in New Delhi lacked climate expertise (Torney, 2015).

In light of increasing European diplomatic capacity and coordination on climate change and energy in India, New Delhi should ask itself how well India is represented across Europe—in Brussels, small, medium-sized, and large capitals—to identify climate cooperation opportunities. To what extent does India’s current diplomatic presence in Europe assist New Delhi in acting proactively on climate-related issues and opportunities?

3.1 EU Member States in Climate Institutions Co-led by India

Following new collaborative frameworks that have emerged in recent years, a few EU member states have decided to join climate institutions co-led by India. Besides the support offered by the European Commission and other EU institutions to the ISA and the Coalition for Disaster Resilient Infrastructure, some members have chosen to engage further. For instance, nine EU member states have joined the ISA that India and France co-launched in 2015. Further, eight EU member states have joined LeadIT, which India co-chairs with Sweden since 2019. About four EU member states have joined the Coalition for Disaster Resilient Infrastructure that India launched together with the UN and a group of countries, including Italy, in 2019. Germany and the Netherlands are members of all three climate institutions. While this does not look very encouraging given that the EU is comprised of 27 member states that could have joined, it must be acknowledged that not all EU member states have as ambitious climate agendas as Germany. This explains why Indian diplomacy has had a lukewarm reception in Europe. Further, some EU member states are more eager to participate in climate engagements than others. Therefore, it may not be realistic to expect every EU member state to support new climate institutions.

Figure 1 shows the EU member states who are part of the three climate institutions co-led by India, based on calculations by the author.

4. Possibilities for India’s Future Climate Diplomacy

India’s commitment to tackling climate change is evident through its comprehensive engagement with the EU on climate action, as highlighted in this policy brief. India’s diplomatic green partnerships with the EU are marked by a range of bilateral and EU-wide partnerships. As India collaborates with the European Commission, EU institutions, and many EU member states on climate-related issues, India has chosen to pursue climate partnerships both at the EU and bilateral levels. Despite occasionally being on opposite sides in the formal climate negotiations, India and the EU have found ways to collaborate on climate action. Locating their climate partnership within the framework of the India–EU strategic partnership instead of climate negotiations alone seems prudent.

However, it is time India evaluated the impact and utility of these partnerships. Would New Delhi formulate a strategy or guidelines, as it did with its 2022 Arctic Policy? A few key questions India should consider while reviewing its partnerships and developing new pathways are as follows: How can the existing partnerships be leveraged to further engage with European actors across Europe? Does Indian diplomacy in Europe have the required resources to attract investments to India? How can New Delhi facilitate engagements between Indian states and European actors? What have been the opportunities and challenges in the implementation phase of projects linked to recent climate partnerships? These questions require analysis and reflection as India designs measures to cooperate with Europe on climate action.

On a more concrete level, India could consider the following options:

• In Europe, India could increase its outreach to European partners and invite more EU member states to join climate institutions co-led by India. India could proactively engage with European stakeholders, convincing them to opt for Indian goods and services, such as solar panels, which are needed for the implementation of the European Green Deal. At the same time, India could capacitate its understaffed embassies in EU member states and assign diplomats or climate envoys to Europe who work specifically on climate change and energy.
• New Delhi could encourage state governments to visit European capitals and engage with European counterparts. It should also encourage the private sector to explore ways of boosting Indian exports to the European market. Indian stakeholders interested in showcasing their products and services should be encouraged to do so at biennale large-scale exhibitions and meeting places along with European partners (Aspengren & Nordenstam, 2020). A major advantage of the biennale is that it would help clarify standards and procedures before Indian stakeholders attempt to export products to the European market that might not adhere to European regulations.
• At the next India–EU Summit, India should reiterate the importance of the India–EU Clean Energy and Climate Partnership. Instead of launching new partnerships, Indian and European leaders should encourage their bureaucracies to focus more on implementing existing partnerships. However, to use the EU-wide climate partnership to facilitate export to Europe, India will need to ensure that green products made in India—solar panels, green hydrogen, and green waste management—adhere to European standards. If not, India risks restricting the partnership for concrete projects in India and third countries while missing the opportunity to also treat it as an export-facilitating partnership.
• In the Trade and Technology Council (TTC), India could present forward-looking ideas in the working groups. For instance, in the working group on green technologies, India should push for the co-production of solar energy as a step towards ensuring that solar panels produced in India can be exported to the European market. In the working group on resilient supply chains, India should push for projects in its neighbourhood. Joint projects discussed in the TTC could potentially be funded through the EU Global Gateway project that will mobilise EUR 300 billion for infrastructure projects until 2027. Further, given that the TTC is separate from trade negotiations, it would be counterproductive to raise demanding negotiation issues in the TTC.

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Torney, D. (2019). India’s relations with the European Union on environmental policy. In N. Ciecierska-Holmes, K. Jörgensen, L.L. Ollier, & D. Raghunandan (Eds.), Environmental Policy in India (pp. 225–240). Routledge. Retrieved from https://www.routledge.com/Environmental-Policy-in-India/Ciecierska-Holmes-Jorgensen-Ollier-Raghunandan/p/book/9781032084572

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In 2021, the United States (US) and India renewed their commitment to shared energy and climate priorities in the US–India Climate and Clean Energy Agenda 2030 Partnership which has set the tone for cooperation in recent years. The Agenda 2030 Partnership builds on nearly two decades of cooperation between the US and India on energy and climate issues. To understand the factors driving India’s engagement with the US in this current and previous initiatives, this brief uses joint statements from the American and Indian governments to trace the achievements of US–India energy and climate cooperation across multiple US presidential administrations. It finds that the factors driving India’s engagement with the US are largely oriented towards the areas of development, technology, and commercial affairs in the energy sector. The Agenda 2030 Partnership continues these themes. Such bilateral engagement has advanced technological and commercial ties that support India’s energy transition, but this partnership fails to clearly articulate how its numerous activities connect with each other and to India’s ambitious 2030 goals regarding its nationally determined contribution (NDC) under the Paris Agreement. Moreover, engagement with the US under the Agenda 2030 Partnership has failed to yield appreciable finance or investment for India’s energy transition. Despite these limitations, energy and climate remain a high priority for the bilateral relationship, on par with topics such as defence and security. We recommend that India (i) clearly determines how the multitude of technical assistance achievements under the Agenda 2030 Partnership advance the needs of India’s energy transition and (ii) emphasises bilateral cooperation in clean energy with the US in more explicit commercial, trade, and financial terms beyond technology and development.

1. Introduction

The US is the world’s largest historical emitter of greenhouse gases and plays a significant role in the global energy scenario. It is one of the largest consumers and producers of energy, and an important source of technological innovation. Likewise, as one of the largest developing economies, India’s emissions and energy consumption, while dwarfed by that of the US, still constitute a considerable share of global totals, especially as the country grows to meet its economic aspirations. India’s relations with the US are vital to understanding how the country will navigate a challenge not faced by any other country of its size: how to grow and develop at scale in a carbon-constrained world (IEA, 2021). In 2021, both countries renewed their commitment to shared energy and climate priorities in the Agenda 2030 Partnership, which has set the tone for cooperation in recent years (US Department of State, 2021b).

The Agenda 2030 Partnership builds on nearly two decades of cooperation between India and the US on energy and climate issues (US Department of Energy, 2022). To understand the factors driving India’s engagement with the US in this current and previous initiatives, this brief first uses joint statements from the American and Indian governments to trace the goals achieved through the US–India cooperation across multiple US presidential administrations. It then finds that India’s engagement with the US is largely driven by factors such as development, technology, and commercial affairs in the energy sector. The Agenda 2030 Partnership continues these themes. Such bilateral engagement has advanced technological and commercial ties for India’s energy transition, but this partnership fails to clearly articulate how its numerous activities connect with each other and to India’s ambitious 2030 NDC goals under the Paris Agreement. The partnership has also failed to yield appreciable finance or investment for India’s energy transition. However, despite these limitations, energy and climate remain a high priority for the bilateral relationship, on par with topics such as defence and security. We recommend that India (i) clarifies how the multitude of technical assistance achievements under the Agenda 2030 Partnership translate to advances in India’s energy transition and (ii) emphasises bilateral cooperation in clean energy with the US, in more explicit commercial, trade, and financial terms beyond technology and development.

2. Achievements of US–India Energy and Climate Ties

During the Clinton administration, energy and climate had a nascent role to play in the bilateral relationship, but these efforts culminated in regular ministerial-level dialogues on a variety of energy issues during the Bush administration. Notable achievements during this period were the launch of the US–India energy dialogue, which established regular ministerial discussions on energy security, access, and markets in India and commitments to the environment in the form of cleaner, diversified technologies (The White House, 2005). Engagement during the Bush administration included all the above approaches to energy issues, focusing on both fossil fuels and renewable energy, with increasing alignment of energy policy with strategic policy in the bilateral relationship. This was motivated in part by the US–India civilian nuclear deal, which emphasised nuclear energy as a tool for both energy security and environmental sustainability (The White House, 2006, 2008).

Energy and climate cooperation with the US intensified between 2009 and 2017, with two notable changes: there was a greater emphasis on climate cooperation in addition to energy cooperation, and energy cooperation further emphasised clean energy. This period coincided with successive Obama administrations, the first Modi government, and the signing of the Paris Agreement. The countries established the Partnership to Advance Clean Energy (PACE) initiative between 2009 and 2011. This flagship framework started a range of initiatives to encourage the use of clean energy in India, including technical assistance agreements and joint research and development initiatives geared towards clean energy (The White House, 2009, 2010; US Department of State, 2010, 2011). By 2016, PACE grew to incorporate further initiatives that addressed more and more energy subsectors. Its notable achievements included USD 125 million devoted to joint research and development activities, USD 20 million in technical assistance programmes to deploy renewable energy in India, and about USD 2 billion of public and private investment in clean energy projects in India. In addition to financial gains, there were other positive outcomes from PACE, including increased clean energy capacity and emissions reductions (The White House, 2016; US Agency for International Development, 2016; US Department of Energy, 2012; US Department of State, 2014).

In recent years, after the Paris Agreement and the end of the Obama administration, climate and energy achievements in the bilateral relationship have been limited due to swings in US political leadership. The Trump era saw a significant shift in bilateral energy and climate cooperation between the US and India, where climate received little to no high-level attention, but energy access, security, and fossil fuel exports from the US to India gained prominence. Achievements during the Trump years included the US–India Strategic Energy Partnership (SEP) in 2018, which reorganised and continued existing energy cooperation across several areas. The SEP occurred during the first major fossil fuel exports from the US to India. By 2019, US crude oil exports to India increased tenfold, and India became a major destination for US liquefied natural gas exports and the largest destination for US coal exports (The White House, 2019; US Department of Energy, 2020). Despite the lack of head-of-state-level attention, collaboration on climate and energy continued at the ministerial and working levels.

The current Biden administration has brought about another swing in bilateral energy and climate cooperation between the US and India. This is due to this administration’s heavy focus on clean energy and climate action to reassert US leadership in these areas globally. However, new achievements have been limited, especially in climate finance. The two countries reorganised their cooperation through the U.S.-India Climate and Clean Energy Agenda 2030 Partnership with two tracks: a technology track, which is a continuation of the US SEP, renamed the US Strategic Clean Energy Partnership (SCEP), and a finance track, the Climate Action and Finance Mobilization Dialogue (CAFMD) (US Department of State, 2021b).

Within the SCEP technology track led by the US Department of Energy and the Ministry of Petroleum and Natural Gas, habits of cooperation have continued despite changes in political leadership due to relationships at the working level. The Biden administration has expanded the partnership and reverted focus to clean energy, while retaining some energy security themes from the Trump administration. The SCEP includes five pillars: power and energy efficiency, covering grid modernisation; renewable energy capacity; “responsible” oil and gas, focusing on ways to increase natural gas use in India and oil security; sustainable growth in long-term energy modelling and planning; and emerging fuels and technologies, such as electric vehicles and hydrogen. The SCEP’s numerous achievements outlined at its latest ministerial meeting in July 2023 have largely focused on technical assistance, consisting of pilot projects and knowledge exchanges between the US and India (US Department of Energy, 2023).

3. Development, Technology, and Energy Sector Commercial Ties

The factors that drive India’s engagement with the US in climate are development, technology, and commercial affairs in the energy sector, rather than climate ambition alone. This is true across successive US administrations. During the Bush administration, both countries signed the landmark civil nuclear

deal, but cooperation was not limited to nuclear energy. Rather, the dialogue covered research and development for clean energy, “clean-coal” technologies, energy efficiency, oil and gas, renewable energy, and broader energy sector strengthening through markets and data management. Collaboration on clean and renewable energy expanded further during the Obama administration, explicitly connecting concern for climate change to economic ties and development. While high-level attention to clean energy suffered under the Trump administration, engagement during this period saw greater emphasis on private-sector cooperation, with an increase in fossil fuel exports to India. These commercial ties again underscore India’s climate engagement with the US through economic needs and development.

The Agenda 2030 Partnership under the current administration continues these themes under the SCEP. This technology track of the partnership has illustrated the driving factors through its technical assistance activities involving multiple pillars. While SCEP builds on nearly two decades of growing collaboration and each of its pillars articulates priorities, it is difficult to ascertain an overarching strategy or objective for India through its numerous technical assistance activities.

Although the goal of the Agenda 2030 Partnership is to ostensibly help India meet its 2030 climate and energy goals and each pillar, to varying degrees, has articulated its priorities, they fail to describe how the numerous activities and outcomes fit together cohesively to advance progress towards these goals. In this latest iteration of the partnership, a coherent action plan is lacking, and the actual flows of capital and technology towards clean energy projects, beyond technical exchanges and feasibility studies, remain unclear. There is a risk that SCEP undertakes too many activities without specific, measurable, or time-bound goals.

Moreover, an ongoing theme in bilateral ties during the current US administration has been the joint industrial policy on clean energy between the two countries. This could make India a manufacturing hub for future clean energy supply chains, with cooperation in areas that China dominates, such as clean hydrogen, solar energy manufacturing, and critical minerals (The White House, 2023a, 2023b). SCEP has yet to address this theme beyond a public–private task force on hydrogen, but the recent announcement of a US–India Renewable Energy Technology Action Platform (RETAP), as a follow-up to the June 2023 state visit from India (Anand, 2023), touches upon these topics. With the US’s own push for clean energy subsidies through the Inflation Reduction Act and India’s Production-Linked Incentives, there is uncertainty about concrete outcomes.

4. Missing Energy Transition Finance Despite Increased Technological Cooperation and Commerce

India’s bilateral engagement with the US has advanced technological and commercial ties for India’s energy transition because these factors have driven much of the engagement. However, it has failed to yield appreciable energy transition finance.

In 2021, the Biden administration launched the CAFMD led by the US Department of State and the US Department of the Treasury. CAFMD’s vaguely articulated commitments include “Mobilize major capital flows to help India achieve its target of 450 GW of renewable energy capacity, demonstrate and scale innovative clean energy technologies, and promote bilateral clean energy investment and trade in the clean transition” (US Department of State, 2021a). As of 2023, the CAFMD has produced few achievements beyond a payment guarantee scheme for electric buses in India and an agreement for a joint platform for clean energy finance, which is under development. Both countries started negotiations for a Just Energy Transition Partnership (JET-P) agreement to phase down coal-fired assets under CAFMD. However, it has become clear that such an agreement is not suitable for the country and unlikely to come to fruition. India is reticent to accept terms that would imply any phase-down of its coal electricity, which it considers vital to its energy security and growing electricity demand. Moreover, JET-P agreements with South Africa, Indonesia, and Vietnam have been loan-based deals, so imposing more debt on a sector that has just decreased its contribution to stressed assets in the Indian banking sector is imprudent (Srivastava, 2023).

Despite no dollar amounts for energy transition finance under the Agenda 2030 Partnership, during the Obama administration, there was some public funding amounting to around a billion dollars sourced through various agencies and instruments between 2009 and 2017 (The White House, 2016; US Agency for International Development, 2016; US Department of Energy, 2012; US Department of State, 2014). US public funding has remained scant and will likely continue to be so. The money flowing to India from the US to support the former’s energy transition is difficult to quantify. Joint statements allude to various dollar amounts (to the tune of USD 2 billion during the Obama administration) mobilised by public money, but it is difficult to distinguish between public and private money, and whether this private money is additional or whether such investments would have occurred without any public resources. Climate finance accounting by mapping specific dollar flows will yield a clearer picture of the paradigm adopted by both countries: limited public money used to mobilise or incentivise bilateral private-sector investment. However, even if we assume large multipliers of private capital mobilised through public funding, it is important to manage expectations and set clear and achievable goals. Private funding mobilised by public US funding will likely never completely meet the needs for India’s energy transition (IEA, 2021).

5. Conclusions and Recommendations

Energy and climate have remained a top priority for both countries in the bilateral relationship, on par with other areas of cooperation such as security. Through successive US administrations, energy and climate, in one form or the other, have consistently garnered head-of-state and ministerial-level attention. Moreover, given the continued emphasis on energy and climate across Democratic and Republican administrations in the US, and different majority and coalition governments in India, engagement and cooperation have remained consistent across a range of topics at the working level despite different tones at the leader level. This suggests that channels of bilateral cooperation have endured changes in political leadership and that they will likely continue to do so. However, advancing strategic cooperation on a larger scale and on new topics in the future will require a high-level focus at the leadership level, as shown by new initiatives launched in the past 15 years.

In recent years, under the Agenda 2030 Partnership during the Biden administration, India has deepened its partnership with the US to cover technical cooperation in new clean energy sectors. However, the country must reorient its bilateral relationship with the US in the energy and climate by taking the following measures:

• Clarifying how the multitude of technical assistance achievements under the SCEP advance the needs of India’s energy transition. While Agenda 2030 is oriented to meet India’s 2030 goals, the pillars outline the countries’ respective priorities, and numerous activities have been conducted to exchange knowledge and technical expertise, the efforts taken lack overarching goals that are specific, measurable, and time-bound. While the technological and commercial ties from this cooperation may have positive spill-over effects, it is unclear whether the outcomes of these activities are coordinated or complement each other.
• Emphasising bilateral cooperation in clean energy with the US in more explicit commercial, trade, and financial terms beyond technology and development. Agencies such as the US Trade and Development Agency, US Export–Import Bank, US Development Finance Corporation, and US Department of Commerce offer a more diverse toolkit to advance economic development to achieve India’s energy and climate goals. During the Obama administration, these agencies successfully played a larger role in the bilateral relationship by mobilising finance. Greater private sector and commercial ties will be necessary, especially if India hopes to play a role in future global clean energy manufacturing supply chains. Private-sector investment is especially important because the US alone will not provide sufficient public climate investments to India and other developing countries. However, we also caution against over-dependence on the idea of “de-risking private investment”. Despite being a popular paradigm to deliver climate finance within the US–India relationship, it has only been proven at small scales.

References

Anand, S. (2023, August 30). US and India join forces to launch renewable energy technology action platform. Mint. Retrieved from https://www. livemint.com/news/india/us-and-india-join-forces-to-launch-renewable-energy-technology-action-platform-11693408975833.html

IEA. (2021). India energy outlook 2021. In World energy outlook special report (pp. 1-191). Paris, France: International Energy Agency. Retrieved from https://www.iea.org/reports/india-energy-outlook-2021

Srivastava, S. (2023, August 2). Repowering assets: NPAs in the Indian power sector and strategies for resolving them. Power Line Magazine. Retrieved from https://powerline.net.in/2023/08/02/ repowering-assets-npas-in-the-indian-power-sector-and-strategies-for-resolving-them-shantanu-srivastava-sustainable-finance-and-climate-risk-lead-south-asia-ieefa

The White House. (2005, July 18). Joint statement between President George W. Bush and Prime Minister Manmohan Singh [Press release]. Retrieved from https://georgewbush-whitehouse.archives.gov/ news/releases/2005/07/20050718-6.html

The White House. (2006, March 2). U.S.-India joint statement [Press release]. Retrieved from https:// georgewbush-whitehouse.archives.gov/news/ releases/2006/03/20060302-5.html

The White House. (2008, September 26). Fact sheet: The U.S.-India relationship: A strategic partnership [Press release]. Retrieved from https:// georgewbush-whitehouse.archives.gov/news/ releases/2008/09/20080926-10.html

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The White House. (2016, June 7). Joint statement: The United States and India: Enduring global partners in the 21st century [Press release]. Retrieved from https://obamawhitehouse.archives.gov/the-press-office/2016/06/07/joint-statement-united-states-and-india-enduring-global-partners-21st

The White House. (2019, September 22). Remarks by President Trump and Prime Minister Modi of India at “Howdy, Modi: Shared Dreams, Bright Futures” event [Press release]. Retrieved from https://trumpwhitehouse.archives.gov/briefings-statements/remarks-president-trump-prime-minister-modi-india-howdy-modi-shared-dreams-bright-futures-event/

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The White House. (2023b, June 22). Joint statement from the United States and India [Press release]. Retrieved from https://www.whitehouse.gov/ briefing-room/statements-releases/2023/06/22/ joint-statement-from-the-united-states-and-india/

US Agency for International Development. (2016). Partnership to Advance Clean Energy-Deployment (PACE-D) technical assistance program. Retrieved from https://www.usaid.gov/sites/default/ files/2022-05/PACE-D-Brochure-Feb-2016-1.pdf.

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US Department of Energy. (2022). U.S.-India energy cooperation. Retrieved from https://www. energy.gov/ia/us-india-energy-cooperation

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Recommended citation:

Sengupta, S., Prasanna, M. &Jarka-Sellers, P. (2023). India’s Climate Engagement with the United States: Factors and Ways Forward. In Xavier, C. &Nachiappan, K. (Eds). Tracks to Transition: India’s Global Climate Strategy. (pp. 67-74). Centre for Social and Economic Progress. Retrieved from https://csep.org/ MxBta5e

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Changing global economic landscapes and power structures have led to India augmenting its climate persona and engaging with other countries through various platforms to accelerate decarbonisation. Yet, despite global power shifts, international finance and technology transfer continue to revolve around Global North-South channels. Differing social, cultural, and institutional landscapes between the North and South as well as impasses within traditional donor-recipient hierarchies have caused bottlenecks to accelerated climate action.

This calls for alternative modes of cooperation between countries that share similarities in climate vulnerabilities, market mechanisms, physical infrastructure, and institutional capabilities. One such cooperative model, which remains understudied within the context of increased climate action, is triangular cooperation (TrC) wherein two or more developing countries implement projects with the support of a multilateral institution or a developed country. Under TrC, countries with similar developmental experiences can exchange and transfer the most effective strategies towards low-carbon transitions. TrC creates a platform that allows for shared learning within a horizontal mode of cooperation.

India has made significant strides in climate action through innovative local technological, policy, and financing options that are also well-suited for implementation in Africa, Asia, and the Indo-Pacific region through a TrC model. This policy brief highlights the agreements through which India currently promotes TrC and the challenges and opportunities within these engagements. Though India is actively engaged in TrC, projects tend to be fragmented and one-off, with little systemic evidence for scale-up. For India to be seen as an important partner, capable of providing solutions to tackle climate change, it needs to improve its institutional capacity for systematic, evidence-based technology and knowledge exchange. India can spearhead TrC by creating a knowledge hub where countries come together to understand and match technological needs and implementation mechanisms required to achieve their climate goals.

1. Introduction

India’s climate persona has undergone a significant evolution in response to changing global economic landscapes and power structures, allowing it to confidently and adeptly navigate the global arena more nimbly to drive decarbonisation (Nachiappan, 2023). Currently, India is part of various multilateral, minilateral, and bilateral agreements with countries such as the United States (US), France, the United Kingdom (UK), and Japan, where addressing climate change is often a top priority. At the same time, by leveraging domestic innovations and know-how, India increasingly provides policy, technology, and capacity-building assistance to countries in the Global South (Chaturvedi &Piefer-Söyler, 2021). Despite shifting power dynamics and emerging powers exerting themselves in the global order, international finance and technology-transfer mechanisms continue to revolve around North-South channels (Urban, 2018). Relying on North-South channels alone to facilitate climate action will probably not be sufficient for developing countries to meet their climate goals.

Emerging economies might face similar climate vulnerabilities as their Southern counterparts, which could make their technology more effective in similar socio-economic contexts. An example is the transfer of sustainable agricultural technology from India to Kenya, highlighting the potential for successful technology exchange and adaptation in these regions (Hosono, 2013; United States Agency for International Development [USAID], n.d.). Additionally, technologies tend to function within a specific social and cultural context, with market mechanisms, physical infrastructure, and local technical capabilities having to complement climate solutions (De Coninck& Bhasin, 2015) for successful implementation. For instance, individualistic cultures prefer formal contracts, while those in developing countries prefer solutions that rely more on arrangements arising from trusted community members and social networks (Intergovernmental Panel on Climate Change, 2014). Countries also tend to have different institutional capacities to absorb technology, and, hence, most transfers go to middle-income countries rather than the poorest countries as they are ill-equipped to deal with the vulnerabilities of climate adaptation (Kirschherr& Urban, 2018).

Triangular cooperation (TrC) is a form of cooperation for increased climate action that is relatively understudied. The United Nations (UN) defines TrC as “Southern-driven partnerships between two or more developing countries, supported by a developed global country(ies) or multilateral organization(s), to implement development cooperation programmes and projects” (United Nations Development Programme, n.d.). TrC for climate action came into global focus during the Buenos Aires Plan of Action for Promoting and Implementing Technical Cooperation among Developing Countries (BAPA) in 1978. However, subsequent negotiations continued to focus primarily on channels between historic emitters and emerging economies. More recently, with power shifts in the global economic order, the United Nations Office of South-South Cooperation (UNOSSC) has revived the importance of TrC, arguing that it can close the technology gap by mobilising expertise, resources, and different stakeholders to achieve climate goals (UNOSSC, 2023). This arrangement does not delink the responsibility of developed countries to help developing countries but rather allows cooperation to happen horizontally, with a greater emphasis on the needs of the recipient countries.

India’s experience with climate and energy innovations makes it a pivotal partner, particularly for countries in Asia, the Indo-Pacific, and Africa, where Indian technologies can be adapted locally (Mittal, 2020). Further, India can also benefit from TrC arrangements by engaging in multi-directional exchanges that are beneficial to all partner countries (Haug, Cheng, &Waisbich, 2023). TrC can play a critical role in allowing India and countries in the developing world to accelerate their climate transitions by easing bottlenecks in technology and knowledge transfer for appropriate and cost-effective solutions. TrC melds two different but complementary forms of cooperation—North-South and South-South—and tries to harmonise different actors to reach one common goal (Farias, 2015). It is not possible to achieve TrC goals with only South-South or North-South cooperation. This is because Southern countries often lack the financial and institutional capacity to scale up their assistance efforts, which makes it difficult for them to match their technical expertise with countries that have similar needs (Hosono, 2013).

Essentially, cheaper and more suited technology gets transferred between developing countries using well-established administrative, institutional, monitoring, and financial capabilities of the developed world. TrC brings a horizontal mode of cooperation by adding a third actor who changes the dynamics to one of reciprocity and provides an improved possibility for actors to pursue strategies that form better alliances and generate competition and mediation (Abdenur, 2007). This arrangement allows partners to utilise localised knowledge and sources of innovation that are often overlooked in traditional technical assistance. It also allows countries who have had similar development experiences to pass their knowledge to countries making the same low-carbon transition without resource and financial constraints. Further, such cooperation allows the creation of long-term institutional capacity, knowledge networks, and innovation hubs within the recipient countries. TrC generally offers greater flexibility for recipient countries to set the agenda for technical assistance, as they have Southern partners. Therefore, expanding climate cooperation beyond North-South channels to increase TrC could be the key to improved and accelerated climate mitigation and adaptation.

In this context, this brief explores the role that India can play in facilitating TrC for climate action. The first section reviews the status of ongoing TrC arrangements in India, identifying the varying success of different agreements and provides an indepth analysis of two case studies. The second section offers future policy options for India to be more proactive in TrCarragements to emerge as a leader in global climate cooperation.

2. India and Triangular Cooperation for Climate Change

Traditionally, India has been reticent to partake in TrC because it felt that its principles of developmental aid were different from those of Western donors. India’s assistance philosophy has been in line with Southern solidarity; it aims to provide demand-driven, non-conditional, non-colonial support for countries in the Global South. However, as it has begun to grow from an aid recipient to a donor, its political ambitions have changed. A desire for international recognition as a growing climate leader—combined with motivations to emerge as an alternative to the growing power of China’s influence in the developing world, particularly with the Belt and Road Initiative (BRI)—has prompted India and its industrialised partners to actively participate in TrC arrangements (Paulo, 2021).

India has been engaged with a number of countries, such as Switzerland, Norway, and Canada, over one-off triangular projects. Over the years, India has signed more long-term formalised triangular arrangements, which often include a climate and energy focus, with donor countries and multilateral organisations. However, these partnerships have not been equally successful (Mittal, 2020; Taniguchi, 2020; Wagner, Lemke, & Scholz, 2022). Table 1 lists a few crucial long-term agreements that were announced and the climate and energy projects that were developed under them. In the next section, two cases have been discussed when India’s TrC on climate and energy technologies has been successful.

Besides specific long-term triangular agreements, India has also initiated the creation of triangular platforms such as the International Solar Alliance (ISA) and the Coalition for Disaster Resilient Infrastructure (CDRI). These initiatives have moved beyond North-South cooperation, allowing for diverse actors from developed and developing countries to engage outside the usual bilateral and multilateral channels. These large global initiatives create institutional frameworks within which the possibility of triangular cooperation projects and paradigms can be explored (Paulo, 2021; Chaturvedi &Piefer-Söyler, 2021).

2.1 Case 1: India–US

In recent years, India’s relationship with the US has evolved from that of donor–recipient to the US seeing India as a strategic partner whose expertise and indigenous technologies can be used to address development challenges (Chaturvedi &Piefer-Söyler, 2021). The US recognises that India has policy expertise and technical knowledge that are suitable for other countries, particularly in renewable energy and climate-smart agriculture. This led to the Triangular Development Partnership (TriDeP), which was signed by the two countries in 2014. Ever since the agreement, the countries have carried out a slew of successful projects in vulnerable countries in Asia and Africa. One of the agreement’s key policies was to choose up to 30 innovations from India and try their effectiveness in a third country. Further, the partners signed a second amendment in 2021, extending the TriDeP between the US and India up to 2026 (AIR News, 2021). Amongst other sectors, clean energy and climate-smart agriculture have been at the forefront. Other areas include drip irrigation systems, integrated pest management, seed dribblers, food processors, and weather-resistant hybrid seeds in Kenya. The South Asia Regional Initiative for Energy Integration is yet another measure designed by USAID to promote cross-border electricity trade between Bangladesh, Nepal, and India by facilitating transmission lines between the countries (USAID, n.d.).

The ambitions of the US–India partnership continue to grow. Two recently published reports advocate expanding the presence of India and the US in the Indo-Pacific region and Southeast Asia (The Energy Research Institute, 2022). However, several projects and the objectives of the India–US agreements are incomprehensive and limited in scale and diversity (The Asia Foundation, 2022). While there are a few success stories, TrC is not widespread, with projects being niche, lacking large-scale or long-lasting impacts, and having limited funding. Further, the vision document is extremely ambitious compared to the actual level of implementation of the projects (Mittal, 2020).

2.2 Case 2: India–UN

India has taken a leadership role in UN projects, choosing to actively participate in various TrC arrangements. This is because TrC arrangements do not follow the typical North-South donor-recipient relationship, and the UN is seen as a neutral organisation (Paulo, 2021). This partnership resulted in the creation of the India–UN Development Partnership Fund in 2017, where India donated USD 150 million to help other developing countries achieve their development goals (UNOSSC, n.d.). The projects support Southern-led and demand-driven projects that help countries achieve global sustainable development goals (SDGs). These projects are spread across Africa (23%), Asia and the Pacific (32%), and Latin America and the Caribbean (42%) (UNOSSC, n.d.).

The arrangements tend to focus on small island and least-developed nations. Many of the projects target SDG 7 (affordable and clean energy) and SDG 13 (climate mitigation and adaptation). India has leveraged its experience with renewable energies and installed a 1.22 MW solar power plant in rural areas of Tuvalu, providing electricity to 20% of the population. It has also given USD 1.1 million to Kiribati for solar lighting and provided Haiti with solar pumps for agriculture (Sebastian, 2023). In Cameroon, India undertook projects to improve rural housing energy and promote energy efficiency, while in Dominica, it promoted sustainable agriculture and eco-tourism. India has expertise in handling extreme weather events as seen from its cyclone-resistant building, early warning systems, and evacuation protocols in Odisha. It used these experiences to install early warning systems in seven Pacific countries, design post-flood management using technology in Gambia, and help Gabon with its climate adaptation and resilience policy. In all these projects, India’s role has gone beyond being a facilitator, as it was deeply engaged in conceptualising appropriate fund structures and approaches and sharing feasible financial models (Paulo, 2021). These arrangements will help India have long-lasting and impactful engagement with the Global South.

3. Challenges and the Way Forward

3.1 Need for Standardisation of Technological and Financial Models

Quantifying India’s engagement in TrC is difficult, as India does not specifically report projects under this label (Paulo, 2021). Climate and energy projects that India has undertaken remain small scale and fragmented and occur on a case-by-case basis among countries that already have a history of collaboration with India. For effective scale-up of TrC projects, there needs to be technical matching of demand for development solutions and supply for practical experiences as well as matching for financial services and models, which would be effective in country-specific contexts (Rhee, 2011).

The report of a recent roundtable meeting between Indian and German officials, aimed at promoting triangular projects for sustainability, revealed that participants shared many examples of successful triangular projects (GIZ, 2022). Chaturvedi and Piefer-Söyler (2021) documented key triangular projects that have been carried out by India and its partners. However, learnings and takeaways from projects that allow standardisation and scaling-up remain scarce. Without institutional mechanisms to standardise implementation, projects have high transaction costs, as stakeholders must understand each other’s needs, settle on formal mechanisms for the arrangement, and align their agendas. Other countries involved in triangular arrangements should also assess specific requirements regarding mitigation, adaptation, and loss and damage in the recipient country. There needs to be better monitoring and evaluation of implemented projects to understand which models have worked or failed, the reasons for the project trajectories, and the potential to replicate these projects in different contexts. Standardised mechanisms ensure that donor countries are more assured that their financing will be used credibly. India should have an inventory of successful projects and learnings that can be easily adopted in countries which need those technologies. Such initiatives can be spearheaded by the Ministry of External Affairs in collaboration with think tanks and civil society organisations that can provide the required research support.

3.2 Creation of a Knowledge Hub Among the Global South

The Asia Foundation report on triangular development (2022) highlights that the identification of an effective collaborator in host and pivotal countries is key for the effective implementation of a project. While being facilitated by state actors, anchoring the projects in local organisations can be essential for mobilising resources and accelerating the rate of technology transfer. Further, the identification of multi-stakeholder engagement allows better exchange of ideas and innovation. Anchoring the project within a local organisation also promotes the project to have more local ownership. Indian civil society is vibrant, dynamic, and responsible for many grassroots innovations for climate and energy solutions, particularly in rural areas. However, the focus of civil society has primarily been domestic rather than focusing on solutions for countries outside of India. Yet, civil society organisations have played a crucial role in enabling the execution of TrC projects. Successful examples include the setting up of solar villages and training of villagers in many African and South Asian countries by the Barefoot College in Rajasthan and SELCO Enterprises (Chaturvedi &Piefer-Söyler, 2021). These organisations do not merely seek to replicate the successful models from India in the recipient country but build regional centres to understand what models will work given the regional context.

At the 2023 Voice of the Global South summit, the prime minister announced the intention to build a Global South Centre of Excellence. This centre is intended to bring together the best practices and solutions from all countries in the Global South so that they can exchange, collaborate, and learn from each other to promote developmental solutions (Roy, 2023). Such knowledge hubs will be imperative to promote better TrC, as the recipient and pivotal countries will need to identify organisations that can house and implement the projects. These centres should include private, public, and civil society organisations. Establishing such forums, which allow a transnational exchange of ideas, innovations, and practices, will also make it easy to facilitate partnerships between civil society across countries. These established relationships will guarantee the success of such projects.

3.3 Creation of Centres of Excellence

Once sector-specific expertise has been identified, pivotal countries must learn how to innovate their local knowledge and transfer it to recipient countries. Instead of India undertaking one-off projects in other countries, donor countries should foster long-term partnerships with recipient countries where they already have ongoing engagements in Africa, Southeast Asia, and the Pacific Islands. Hosono (2013) argues that an effective way to foster TrC is for donors to help pivotal countries build centres of excellence. For instance, Japan assisted Brazil’s agricultural institute in developing a new strain of soya beans that could be grown in the tropical savanna regions of the country. This project was considered a great success, and Brazil’s agricultural institute, in turn, began to help other countries, such as Mozambique, in developing similar crops for their climates. Similarly, Japan helped Chile develop premier domestic aquaculture institutes, after which Chile went on to assist other Latin American countries, including Peru, Ecuador, Brazil, Colombia, Venezuela, and El Salvador, in developing their aquaculture projects.

These centres of excellence can become institutions that offer a deep understanding of the challenges of partner countries and establish a strong network between India and recipient countries that can lead to long-term collaborations. These centres can be designed based on existing expert institutions in India, such as the Centre for Excellence in Climate Change at the Department of Science and Technology, Indian Institute of Technology, Madras, which focuses on effective ways to address coastal adaptation and resilience (Press Information Bureau, 2021). This centre is part of a multi-country research initiative between Germany, Thailand, and India, specifically looking at how climate adaptation tools and technology can be scaled up and transferred across regions.

3.4 Leverage Existing Frameworks to Narrow Down on Climate Focus

Agreements such as the Asia–Africa Growth Corridor (AAGC) with Japan and the TrC Framework with Germany attract global attention and signal to the world the existing cooperation between India’s engagement with its allies. However, projects envisaged within these frameworks have not taken off and largely remain unused. If such plans fail to produce tangible results, it will reflect poorly on India’s institutional capacity and could adversely affect its diplomatic relations with other countries. Taniguchi (2020) argues that the reason such frameworks fail to materialise into actionable projects is that the pivotal and donor countries have shared goals, values, and geopolitical interests but no concrete plans of action. These agreements tend to be broad, covering a range of sectors from healthcare, education, infrastructure, agriculture and so on. Private players and non-state actors are reluctant to invest in these schemes, as they do not see a clear method of investment nor have access to local organisations within the donor countries.

This provides an excellent opportunity for India to assume global climate and sustainability leadership and prioritise increased climate development in the Global South within these agreements. India and the donor countries can focus on climate and energy policies within these frameworks, which are much needed in many parts of the developing world. They can establish networks that share information among the pivotal, donor, and recipient countries on how to participate in mutually beneficial engagements.

4. Conclusion

With the current shift in global power dynamics, it is possible to explore different modes of cooperation to enhance climate action. Triangular cooperation is a reasonable alternative cooperative model that facilitates the transfer of well-suited and inexpensive technology to developing countries while using established administrative, institutional, monitoring, and financial capabilities of developing countries. India has made significant strides in climate action, including technological, policy, and financing innovations, that are well-suited for implementation in other developing countries in Africa, Asia, and the Indo-Pacific region.

India has increasingly started signing triangular cooperation agreements; however, many of these agreements do not result in project implementation. Further, the projects that are carried out tend to be fragmented and one-off, with little documentation of success stories, standards of implementation, and learnings that can be replicated in other contexts.

For India to be acknowledged as a pivotal partner that offers innovative solutions to tackle the challenges of climate change, it needs to improve its institutional capacity for technology and knowledge transfer. There needs to be a more systematic monitoring and evaluation of projects and standardisation of documentation, technology, and financial models. India should aim to design long-standing developmental assistance projects by establishing centres of excellence with long-term technology assistance. Finally, to enable the best technology and knowledge matching, a knowledge hub is required where organisations from the recipient and pivotal countries come together to understand their requirements on climate action and the best way that India can help these countries achieve their climate goals.

India aspires to be the voice of the Global South and promote the bloc’s interests. Helping nations effectively tackle one of the world’s most pressing problems and demonstrating the effectiveness of alternate modes of cooperation, such as the triangular arrangements, can be a step towards India’s realising its ambitions.

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Recommended citation:

Ramamurthi, P. (2023). Alternate Paradigms: India’s Role in Triangular Climate Cooperation.In Xavier, C. &Nachiappan, K. (Eds). Tracks to Transition: India’s Global Climate Strategy. (pp. 57-67). Centre for Social and Economic Progress. Retrieved from https://csep.org/8bbttyy.

The post Alternate Paradigms: India’s Role in Triangular Climate Cooperation first appeared on CSEP.

Recognising the need for cooperation to address broader global challenges, the Quad—comprising Australia, Japan, India, and the US—established a Climate Working Group (CWG) in 2021 to broaden the scope and extent of the minilateral’s engagement. While it is too early to evaluate the CWG’s performance, the Quad has yet to put together a coherent climate agenda. The Quad’s identity as a counterbalance to China has exposed it to a policy see-saw in the past; however, Quad 3.0 holds greater promise with member states, especially India, demonstrating renewed enthusiasm. India has been credited with solidifying and reshaping the Quad’s position and is deemed the Quad’s driving force, spearheading climate-related strategies and environmental resilience. While specialised multilateral forums dedicated to discussing climate policy exist, the Quad should be mobilised for matters that might not find a place on the global stage due to anticipated counter-activism from China. This paper recommends the construction of a new narrative for the Quad based on a shared commitment towards a rules-based order to further climate action, which includes (i) expanding collaboration and partnerships on critical minerals to liberalise global supply chains pertinent to electric and green technologies and (ii) advancing action on the Indo-Pacific’s shared marine resources through the development of regional energy and economic infrastructure. These recommendations underscore the interlinkages between geopolitics, climate action, and economic policy, further highlighting the case for positioning climate action as a tangible agenda for future deliberations.

1. Introduction

The Quad, a burgeoning minilateral forum that emerged in the wake of the 2004 Indian Ocean tsunami, is now at the forefront of global cooperation. It was originally formed to provide humanitarian assistance and enforce a rules-based maritime security order in the Indo-Pacific region (Mehra, 2022). However, recognising the urgent need for cooperation to address broader global challenges in addition to its original objectives, the Quad established working groups in 2021, broadening its scope to encompass climate change and resilient infrastructure.

Today, it is imperative to strengthen and streamline climate actions on a global scale. The Quad countries, which include the United States in the Pacific, India and Japan in South and East Asia, and Australia, encompass critical regions experiencing the multifaceted impacts of cascading climate crises. In March 2023, the members established the Climate Working Group (CWG) to foster cooperation on climate mitigation, adaptation, resilience, new technologies, capacity-building, and climate finance and to align actions with targets set under the Paris Agreement on Climate Change at the domestic, regional, and global levels. While it is too early to evaluate the CWG’s performance or that of its individual members, it has been observed that the Quad’s commitments in terms of climate action are generally broad, reflecting a recognition of the differing priorities of the four powers. Regrettably, the Quad has yet to articulate a coherent climate narrative.

Nevertheless, the Quad’s shift in focus to climate action raises crucial questions. Can a select group of like-minded nations truly wield meaningful influence over immense global challenges? Considering that the CWG is still in its early stages, and existing forums already address a wide spectrum of climate-related issues, is the Quad well-positioned to drive the climate agenda in the Indo-Pacific region? Furthermore, which specific aspects of climate action offer the most promise for successful collaboration within the Quad? Given the varying levels of commitment to climate action among Quad member countries, who will step up to provide the necessary leadership for advancing the climate agenda?

The battle against global warming is already underway in the Indo-Pacific, a region that frequently experiences devastating weather events that result in numerous casualties. This demands resolute leadership and a readiness to confront challenges head-on. The leaders within the Quad must convince others that maintaining the status quo is no longer an option. As one of the key players in the Indo-Pacific region committed to achieving net-zero emissions, India stands poised to assume a leadership role in navigating these complex waters. However, the question remains: will the Quad enhance India’s climate interests? This policy brief examines the motivations for the Quad’s engagement with climate action, explores why India should collaborate with the Quad to advance its climate agenda in the Indo-Pacific, and offers an analysis along with recommendations for an actionable climate agenda that can yield tangible results.

2. Quad’s Climate Focus: A Path to Common Ground

To address the urgent global challenge of climate change, the Quadrilateral Security Dialogue, commonly known as the Quad, has emerged as a significant player on the international stage. The Quad has shifted its focus from primarily security matters to climate change and environmental concerns, mirroring a growing trend of minilateral cooperation among smaller groups of nations.

Since its inception, while the Quad has not played an active role in promoting defence and security with respect to counterbalancing China, it has, on various occasions, provided strategic support and presented a unified face on policy matters. This transformation began in March 2021 when the Quad held its inaugural leader-level summit. During this gathering, the members declared climate change a top priority for the Quad and the broader Indo-Pacific region. The group’s mission on climate was clear: strengthen the implementation of the Paris Agreement while fostering cooperation on climate mitigation, adaptation, resilience, technology, capacity-building, and finance.

In September 2021, the group expanded its objectives by adding the creation of a green-shipping network and the formation of a clean-hydrogen partnership to its agenda. The momentum continued in May 2022 with the launch of the Quad Climate Change Adaptation and Mitigation Package (Q-CHAMP). Despite this, the Quad is yet to generate a climate narrative for itself. The heads of the Quad countries’ development-financing agencies also convened to explore solutions for bridging the infrastructure–financing gap in the region (Mehra, 2022). At the 2023 leaders’ summit, the Quad issued a “Statement of Principles on Clean Energy Supply Chains in the Indo-Pacific”, and the leaders also announced a Clean Energy Supply Chains Initiative to fast-track the region’s transition to clean energy (Quad Climate Working Group, 2023). Additionally, the Quad initiated a shipping task force, bringing together prominent ports such as Los Angeles, Mumbai, Sydney, and Yokohama to establish two or three low-emission or zero-emission shipping corridors by 2030. The task force also facilitates meetings among Quad transportation and energy ministers to further enhance cooperation (Mohan &Govella, 2022).

Therefore, what prompted the Quad countries to make climate change a central focus? Their shared apprehension about the severe threats posed by climate change to their nations and the entire Indo-Pacific region was a driving force. Moreover, climate change has gained prominence on the domestic political agendas of these four partners in recent years, making coordination and cooperation a logical step (Govella, 2022).

The move towards minilateral initiatives like the Quad can be seen as a response to the perceived slowness and ineffectiveness of international institutions in addressing urgent global challenges. By concentrating on climate change and other non-traditional security issues, Quad members aim to showcase their ability to cooperate effectively and provide tangible benefits.

The inclusion of climate change in the Quad’s agenda marks a strategic shift towards improving the quality of public goods in the Indo-Pacific and the global community at large. Originally seen as a security-focused group, the Quad faced perceptions of being an anti-China coalition and of excluding smaller Indo-Pacific nations from important regional decisions. By broadening the scope of its engagements to include broader global agendas such as climate action, the Quad aims to foreground the “like-minded” nature of the partnership toward addressing key global challenges.

3. Climate Diplomacy: India’s Quad-Climate Nexus

China’s rise to superpower status through economic expansion has led to a perceived need for an appropriate strategy to challenge its economic dominance. Many of the member countries have felt the impact of Chinese aggression. Japan is concerned about China’s activities in the East China Sea; Australia faces trade disputes due to its call for an investigation into the origins of COVID-19; and the United States keeps a watch on China’s bullying of littoral countries in the South China Sea (Chatterji, 2021). China’s emergence was made possible by the global dependence on China for critical minerals (such as lithium, nickel, and graphite), global green supply chains, and technology licenses.

Though the Quad comprises four member countries, its remit also includes numerous nations situated along Indo-Pacific sea lanes that are key economic, political, and geographic partners to Quad members. While India has traditionally been cautious about entangling itself in alliance politics, several crucial sensitivities underscore its current stance. At this point, inaction and the absence of proactive climate efforts could lead to dire consequences.

The group’s uniting principles of fostering democratic and rules-based orders, free trade, and openness make it a forum with relatively less friction in addressing matters of global relevance, such as climate change. The newly formed working groups, including the CWG, help promote shared agendas and outlooks and highlight the group’s shift towards undertaking tangible action on all fronts, including climate-related resilience, as a crucial component of regional and global stability.

India has consistently advocated for the Quad to evolve into an open, constructive forum that addresses regional security and stability comprehensively, encompassing more than just security matters such as climate action. To counter China’s expanding footprint in the Indo-Pacific, India must invest in building regional energy architectures and a resilient green technology supply chain to boost its production prowess.

That being said, India’s strategy within the Quad extends beyond countering China’s influence. It seeks to strengthen ties with a wider group of countries and regions through non-military means, including climate change mitigation, supply chain strengthening, and infrastructure support. This multi-dimensional approach covers environmental, economic, and security aspects. India is the world’s largest market for a green growth model, considering its huge development needs and the green mandate being at the heart of growth pathways. Ventures such as renewable energy capacity expansion require liberal supply chains, access to raw materials, and technology transfers.

While the Quad has had a shaky start (The White House, 2021; Biden et al., 2021), the perception that the US is overreaching in a non-juridical region, in addition to the economic and geographic relationships between the members of the Quad and China, has remained the grouping’s Achilles heel, resulting in members downgrading the mandate of the initial Quad (Buchan & Rimland, 2020). Nonetheless, climate change and the need for resilient global supply chains and infrastructures have emerged as common threads. Under Quad 3.0, India has been credited with solidifying and reshaping the Quad’s position and is deemed as the Quad’s driving force, spearheading climate-related strategies and environmental resilience (Press Trust of India, 2022). This newfound prominence led to the group’s elevation to a leaders-level forum, reshaping perceptions resulting from China’s initial dismissal of it as mere “froth in the ocean” to a potential “ASEAN-NATO” (Rej, 2020; Roy, 2021).

While it might be premature to evaluate the CWG’s intent and effectiveness, it is imperative to examine how the climate issue serves the Quad’s purpose. While there are more specialised multilateral forums dedicated to discussing the broader climate agenda, the Quad should be mobilised for matters that might not find a place on the global stage due to anticipated counter-activism from China. Establishing the CWG is the first step, but its success hinges on members finding common ground with regard to this agenda. This common ground should not only provide a purpose for this working group but also accommodate individual perspectives on climate action and varying paces of action (Roy, 2021).

The Quad can offer a respite by focusing on specific actionable sub-agendas, particularly in areas where broad global consensus exists, such as climate action. In this context, the narrative should position China not as the central determinant but as a distinguishing factor in the equation. Mobilising a forum such as the Quad, which includes like-minded countries with similar outlooks and anxieties regarding countries holding dominance over resources, raw materials, and supply chains, is essential and imperative to secure the future of growth and development pathways in India.

4. Expanding the Rules-Based Order to Include Climate Action

The Quad’s third iteration, starting in 2020, marks a departure from its earlier institutional approach. The establishment of working groups, US President Biden hosting a landmark Quad Summit soon after assuming office, and the increasing frequency of high-level meetings indicate a growing inclination among member nations to leverage the Quad as a platform to further a broader global agenda.

Incorporating climate policy into this expanded institutional framework has numerous advantages for member nations. They can effectively address specific climate policy issues within a coalition of like-minded countries. This is particularly beneficial for India, which aspires to assume a leadership role in climate action within the Global South. While India’s development trajectory necessitates the use of carbon-based power for the foreseeable future, it has reframed its climate agenda to prioritise low-carbon development over the West’s decarbonisation framework. India has also steered the global climate discourse towards sustainable lifestyles (Mission Lifestyle for Environment—LiFE) and the use of per capita emissions as a robust metric for assessing climate action commitment rather than relying solely on aggregate national emissions. Further, India has consistently emphasised its domestic interests during the annual Conference of Parties (Roy and Mehta, 2023).

However, India’s future development will increasingly rely on the growing adoption of electric vehicles, emerging green technologies, and renewable energy sources such as offshore wind energy. At present, China controls critical aspects of the clean energy transition supply chain, including offshore wind energy infrastructure, vital mineral reserves, marine resources, and global battery manufacturing capacity. The recommendations for shaping a Quad climate narrative cover (i) expansion of collaborations and supply chain economics for critical minerals and EVs, and (ii) advancing shared economic resource Infrastructure in the Indo-Pacific which includes regional renewable energy infrastructure, for example – offshore wind technologies.

Minilateral cooperation has the potential to lay the foundation for broader regional and global initiatives. While climate change cannot be entirely resolved by the efforts of just four countries acting in isolation, minilateral endeavours can play a crucial role in aligning national interests and policies, preparing the ground for expanded initiatives involving additional nations. The sharing of knowledge and best practices among minilateral members can bolster policy effectiveness, spur innovation, and foster harmonisation.

It is essential to recognise the interconnectedness of climate change with other economic and security challenges. Consequently, climate considerations must be integrated into a comprehensive strategic approach; it cannot be tackled effectively in isolation from other pressing global concerns.

The Quad’s focus on climate change is currently limited to a working group, and it is not a topic for assigned leaders’ deliberation, limiting its potential impact when compared to a United Nations Framework Convention on Climate Change Conference of Parties. Keeping this in mind, fostering cooperation for mutually beneficial outcomes will require India’s strategic leadership within the Quad, where it will have to work toward narrowing fields of advocacy to tangible and actionable agendas.

4.1 Collaboration and Partnerships on Critical Minerals

Transitioning to a low-carbon future is an essential component of global climate action. Within this, clean energy and transport play vital roles in supporting a transition towards a more sustainable future. Thanks to technological advancements, renewables-based electricity generation has become cheaper and more accessible. However, currently, China influences each step of lithium-ion battery production, from mining raw materials, and engineering advanced battery technologies, to making electric vehicles (EVs). For example, China produces 60% of the world’s rare earth elements (REEs) and 34% of its supply of molybdenum. Approximately 69% of cobalt is mined in the Democratic Republic of Congo, with China accounting for the majority share in processing (65%) the mineral globally. Australia produces 52% of the world’s lithium, with China being a major importer and processor of 58% of the global supply. South Africa mines 72% of the world’s platinum output (Chadha et al., 2023). Though China has a limited national resource base, it has pursued a long-term strategy of building resilience and self-sufficiency in global resources through the ownership of mines in Congo and other African countries. China has steadily invested in Indonesia’s nickel production, which will make the country the largest controller of nickel, manganese, and graphite by 2027 (Chang &Bradsher, 2023).

If countries are to take firm steps towards transitioning to low-carbon growth models, the supply and trade of raw materials for battery manufacturing must be liberalised. The present Chinese hold over critical minerals does not end at extraction and production; the world is also heavily reliant on China for processing these minerals. Currently, China refines 95% of the global manganese supply, 73% of cobalt, 70% of graphite, 67% of lithium, and 63% of nickel, largely on account of Western economies possessing near-zero processing capabilities (Chang and Bradsher, 2023). For example, Australia’s first lithium refinery, which has some Chinese ownership, was approved in 2016 but failed to produce battery-grade lithium until last year (Fernyhough, 2022). Over the years, China has spent more than USD 130 billion on research incentives, government contracts, and consumer subsidies, due to which nearly 54% of all EVs manufactured globally originate from China (IEA, 2023). That being said, the recent slowdown of the Chinese economy presents a domestic consumption challenge, bolstering global interest in India on the EV front.

The growing domestic market for EVs gives India an edge over others, making it an opportune time to expand capacity and capability in the sector. The Indian transport sector is responsible for 13.5% of India’s energy-related CO2 emissions, with road transport accounting for 90% of the sector’s total final energy consumption, making the electrification of public and private transport an essential pathway for climate action (Climate Action Tracker, 2020). On account of India’s dependence on critical minerals to realise its climate and development goals, and the related potential threats to its sovereignty, advocacy to protect global supply chains is of vital significance to India and other countries—developed and developing. Securing a steady supply of lithium, cobalt, and other minerals from a diverse set of sources is in India’s interest and supports the call for a rules-based international order.

4.1.1 Leveraging the Multilateral Security Partnership

The multilateral Minerals Security Partnership (MSP) was announced in June 2022, with the goal of bringing together countries to build robust critical minerals supply chains needed for realising global climate objectives (US Department of State, 2022). This partnership includes the US, Canada, Australia, the Republic of Korea, Japan, and various European countries. India joined the group in June 2023, as its membership was crucial for India’s national security. The Quad presents itself as a useful platform for India to advance its agenda on this front, considering that all four countries are members of the MSP. The mandate of the MSP is to advance public and private investment in the critical minerals supply chain, which the Indian industry stands to greatly benefit from.

4.1.2 Diversifying the Critical Minerals Supply Chain for Liberalising Climate Action

The onus of ensuring critical minerals security in India is currently vested in KhanijBideshIndia Ltd. (KABIL)—a joint venture of three central public sector enterprises—which works towards facilitating supply chains, mine asset acquisitions, and government-to-government collaborations (Chadha & Sivamani, 2022). A notable achievement of KABIL was the signing of a Memorandum of Understanding (MoU) (a three-year Critical Minerals Investment Partnership) between the Indian and Australian governments for cooperation in the fields of mining and processing critical minerals. However, India must also build similar bilateral partnerships with the US and Japan (Gupta, 2023) to leverage the recent discovery of lithium mines in Kashmir and changes in domestic policy, such as the release of a critical minerals list and the amendment to the Mines and Minerals (Development and Regulation) Act, 1957, which opened up the sector for explorations (PRS, 2023).

4.2 Advancing shared economic resource Infrastructure in the Indo-Pacific

The Indian Ocean is among the largest tracts of open seas across the planet, encompassing the exclusive economic zones of 38 countries from the region. Its coastal countries are home to 2.7 billion people (Baruah, 2021). The Quad’s ultimate mandate of furthering a rules-based international order is more pertinent to this arena of marine and maritime resources and freedom than any other. Several fora already exist that focus on the preservation of rights and freedoms attached to the high seas, such as the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and the Indian Ocean Rim Association (IORA). However, the Quad remains unique in the dynamic of its membership, and the hegemony held by each of its members is unparalleled.

The term “blue economy” (BE) conceptualises oceans as “shared development spaces”, encompassing all economic activity relating to oceans, seas, and coasts, from fishing to renewable marine energy to coastal tourism. It is defined by the World Bank as the “sustainable use of ocean resources for economic growth, improved livelihood and jobs, and ocean ecosystem health” (The World Bank, 2017). Oceans will benefit immensely through emissions reduction, as a slower rate of ocean change provides greater adaptation opportunities to the communities dependent on it. But oceans are also a channel through which climate action can be enhanced by effectively mobilising ocean resources.

While the role of marine biotic resources in preserving global food security through a seafoods-driven global protein supply and commercial resources (navigation, aviation, and transport) has received adequate attention, the ocean’s role as a storehouse of abiotic resources (minerals, metals, and renewable energy in the form of offshore wind energy) has not been discussed enough in international relations and climate policy. There has also been significant deliberation on global platforms regarding the definition of a ‘blue economy’ and what it constitutes. While that may be ambiguous, working towards some well-defined and mutually beneficial outcomes can help advance the agenda in the interim.

The region is certainly resource-rich, but it requires a regional management strategy for sustainable development (Steinberg, 1999). There has been a significant rise in the number of preferential trade agreements in the past two decades (World Trade Organisation, 2011); yet, Indian Ocean countries lag behind the rest of the world, especially the United States and Europe, on the volume of free-trade agreements in place. In the absence of a regional approach to sustainable economic growth, bilateral arrangements and a Quad-driven mobilisation agenda on this front can help further mutual interests in the region and on the subject (Roy, 2019).

4.2.1 Demonstrating a Low-Carbon Growth Model Through Regional Renewable Energy Infrastructure

Offshore wind farms generate electricity that eliminates the single costliest resource involved in renewable energy generation—land. India plans to auction seabed mining licenses for 4GW of offshore capacity off the coast of Tamil Nadu in 2023 and has identified 14 sites in the state to which to expand this auction (Ramesh, 2023). Currently, constraints on account of the exclusive economic zone (EEZ), disruptions to marine life, and the lack of deep-sea construction technologies hinder the full realisation of this energy source as the future of renewable energy generation.

The US and Australia have made significant advances in this field, and India can benefit from knowledge sharing on this front and possibly even technology transfers. This will help the Quad effectively cooperate for the sustainable development of assets and showcase exemplary practices in establishing regional energy infrastructure in oceans and coastal regions. It will help boost energy security by diversifying sources of energy generation while fostering equity, inclusion, innovation, and modern technologies. Quad members hold significant stakes in the decarbonisation and climate agenda; hence, this point of action benefits each of their narratives. It can also open the gateway to cross-border investments in offshore wind energy capacity, opening up the world’s oceans for offshore wind energy capture.

4.2.2 Comprehensive and Effective Monitoring, Control, and Surveillance (MCS) Systems for Research & Development (R&D) in Oceans

To achieve the goals of reducing non-sustainable fishing practices and realising sustainable development in the Indian Ocean, it is imperative to efficiently use monitoring and enforcement mechanisms. This would increase the commitment of state and non-state actors to the blue economy and its oceanic dimensions. Data concerning the Indian Ocean and its scientific scrutiny is usually limited and poorly shared. To monitor and improve cooperation and governance across the Indian Ocean, it is necessary to develop integrated systems that can identify and deter non-compliance through independent verification and auditing. This can be achieved by collecting additional data, improving data sharing, and conducting scientific analyses on marine resources, activities, and their environmental impacts in the region (Roy, 2019). Additionally, there are constraints associated with maritime boundaries on the high seas. For instance, even though seabed exploration in the Indian Ocean has already started, there are major constraints in the commercialisation of these resources. These stem from limited public data on the resources available in the exclusive economic zone (EEZ) and are compounded by a lack of capacity beyond the public sector for the exploration, mining, and processing of these minerals. In this context, a collective effort by the CWG to build time series databases on marine resources will not only help enhance the region’s economic prowess but will also benefit each of the four member countries in identifying avenues for investments and climate finance that can further the achievement of their climate ambitions and goals.

5. Being a Force for the Global Good

If the Quad wishes to define global narratives for decades to come, synergies and confluences will need to be identified and even engineered. In this case, the horizontal expansion of the group across members and working groups will prove effective in increasing areas of collaboration.

Fostering linkages between working groups such as the Climate Working Group, the Critical and Emerging Technology Working Group, and the Infrastructure Working Group will advance the intersectional nature of climate action, which necessitates an interdisciplinary and cross-cutting approach to problem-solving. These three working groups embody natural synergies for collaborative agendas that benefit all four member states.

These collective attempts to shift the Quad’s narrative from being an anti-China group to a more holistic grouping in favour of a free and rules-based international order makes it more palatable to member countries and across the political spectrum in each of the countries. The wide-ranging nature of climate action and its global ramifications makes it a suitable subject for active cooperation amongst Quad countries, which are also part of various multilateral forums and in broad consensus on the subject. The recently increased engagement of the Quad, supported by all four members, also signals the potential of the group to go beyond its past achievements by developing focused agenda items that capture the aspirations of Quad members on the global stage. India, in particular, has championed the voice of the Global South, as demonstrated by its recent successes under the 2023 G20 Presidency. This shift in global narratives must be channelled to establish and cement the Quad’s agenda on climate action, and India is well-positioned to play the role of an orchestrator.

References

Baruah, D. M. (2021). What is happening in the Indian Ocean? Q&A. Carnegie Endowment for International Peace. Retrieved from https://carnegieendowment.org/2021/03/03/what-is-happening-in-indian-ocean-pub-83948

Biden, J., Modi, N., Morrison, S., & Suga, Y. (2021, March 13). Our four nations are committed to a free, open, secure and prosperous Indo-Pacific region. The Washington Post. Retrieved from https://www.washingtonpost.com/opinions/2021/03/13/biden-modi-morrison-suga-quad-nations-indo-pacific/

Buchan, P. G., & Rimland, B. (2020). Defining the diamond: The past, present, and future of the quadrilateral security dialogue. CSIS Briefs, Center for Strategic and International Studies. Retrieved from https://csis-website-prod.s3.amazonaws.com/s3fs-public/publication/200312_BuchanRimland_QuadReport_v2%5B6%5D.pdf

Chadha, R., & Sivamani, G. 2022. Why India needs to secure its critical minerals supply chains. Hindustan Times. Retrieved from https://www.hindustantimes.com/ht-insight/economy/why-india-needs-to-secure-its-critical-minerals-supply-chains-101662724450621.html

Chadha, R., Sivamani, G., & Bansal, K. (2023). Assessing the criticality of minerals for India. Working Paper, Centre for Social and Economic Progress. Retrieved from https://csep.org/working-paper/critical-minerals-for-india-2023/

Chang, A., &Bradsher, K. (2023, May 16). Can the world make an electric car battery without China? The New York Times. Retrieved from https://www.nytimes.com/interactive/2023/05/16/business/china-ev-battery.html

Chatterji, R. (2021). China’s relationship with ASEAN: An explainer. ORF Issue Brief, 459, Observer Research Foundation. Retrieved from https://www.orfonline.org/research/china-relationship-asean-explainer/

Climate Action Tracker. (2020). Decarbonising the Indian transport sector pathways and policies. Retrieved from https://climateactiontracker.org/documents/832/CAT_2020-12-09_Report_DecarbonisingIndianTransportSector_Dec2020.pdf

Fernyhough, J. (2022). Australian refinery close to producing country’s first lithium hydroxide for batteries. Financial Times. Retrieved from https://www.ft.com/content/302e7a9f-6693-415c-88ef-f9f6da13dca7

Govella, K. (2022). “Introduction”. In Building a Quad-South Korea Partnership for Climate Action, edited by Kristi Govella, 3-5. German Marshal Fund of the United States. Retrieved from https://www.gmfus.org/sites/default/files/2022-07/Building%20a%20Quad-South%20Korea%20Partnership%20for%20Climate%20Action.pdf.

Gupta, M. D. (2023, July 1). How joining the Minerals Security Partnership can help India harness critical minerals potential. The Print. Retrieved from https://theprint.in/india/governance/how-joining-minerals-security-partnership-can-help-india-harness-critical-minerals-potential/1650810/

IEA. (2023). Government Energy Spending Tracker. International Energy Agency. Retrieved from https://www.iea.org/reports/government-energy-spending-tracker-2

Mehra, J. (2022). An evolving agenda for the Quad. Stimson Centre Policy Memo. Retrieved from https://www.stimson.org/2022/an-evolving-agenda-for-the-quad/

Mohan, G., &Govella, K. (2022). The future of the Quad and the emerging architecture in the Indo-Pacific. GMF Policy Paper, The German Marshall Fund for the US. Retrieved from https://www.gmfus.org/sites/default/files/2022-06/The%20Future%20of%20the%20Quad%20and%20the%20Emerging%20Architecture%20in%20the%20Indo-Pacific.pdf

Press Trust of India. (2022, February 15). India driving force of Quad, says White House. The Hindu. Retrieved from https://www.thehindu.com/news/international/india-driving-force-of-quad-says-white-house/article65051307.ece

PRS Legislative Research. (2023). The Mines and Minerals (Development and Regulation) Amendment Bill, 2023. Bill Summary. Retrieved from https://prsindia.org/billtrack/prs-products/prs-bill-summary-4140

Quad Climate Working Group. (2023, May 20). Quad statement of principles on clean energy supply chains in the Indo-Pacific. Retrieved from https://www.pmc.gov.au/resources/quad-statement-principles-clean-energy-supply-chains-indo-pacific

Ramesh, M. (2023, June 2). Stumbling blocks delay India’s first offshore wind tender. Business Line. Retrieved from https://www.thehindubusinessline.com/markets/commodities/indias-first-offshore-wind-tender-stuck-on-two-counts/article66923782.ece

Roy, A. (2019). Blue economy in the Indian Ocean: Governance perspectives for sustainable development in the region. ORF Occasional Paper, 181, Observer Research Foundation. Retrieved from https://www.orfonline.org/research/blue-economy-in-the-indian-ocean-governance-perspectives-for-sustainable-development-in-the-region-47449/

Roy, A. (2021). Climate action and the Quad. Observer Research Foundation. Retrieved from https://www.orfonline.org/expert-speak/climate-action-and-the-quad/

Roy, A., & Mehta, C. (2023). Driving the G20’s Climate Agenda: Priorities for India’s Presidency, ORF Issue Brief No. 637, Observer Research Foundation. Retrieved from https://www.orfonline.org/research/driving-the-g20s-climate-agenda/

Rej, A. (2020). China and the Quad: From sea foam to Indo-Pacific NATO. The Diplomat. Retrieved from https://thediplomat.com/2020/10/china-and-the-quad-from-sea-foam-to-asian-nato/

Steinberg, P. E. (1999). The maritime mystique: sustainable development, capital mobility, and nostalgia in the world ocean. Environment and Planning D: Society and Space, 17(4), 403-426. Retrieved from https://doi.org/10.1068/d170403

The White House. (2021, March 12). Quad leaders’ joint statement: The spirit of the Quad. Retrieved from https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/12/quad-leaders-joint-statement-the-spirit-of-the-quad/

The US Department of State. Minerals Security Partnership. Retrieved from https://www.state.gov/minerals-security-partnership/

The World Bank. (2017). What is the blue economy? Retrieved from https://www.worldbank.org/en/news/infographic/2017/06/06/blue-economy

Recommended citation:

Roy, A. & Mehta, C. (2023). Leveraging the Quad for India’s climate ambitions. In Xavier, C. &Nachiappan, K. (Eds). Tracks to Transition: India’s Global Climate Strategy. (pp. 45-55). Centre for Social and Economic Progress. Retrieved from https://csep.org/vQKAuV1

The post Leveraging the Quad for India’s Climate Ambitions first appeared on CSEP.

This policy brief explores India’s engagement with a new, bespoke climate framework that focuses on solar energy—the International Solar Alliance (ISA). The ISA was envisaged as an alliance of “sunshine states”—a brand-new grouping of solar resource–rich countries that lie between the tropics. India’s role in the launch and operationalisation of the ISA is an indicator of how local interests and concerns—scaling up domestic renewable energy targets—get intertwined with international, transnational, and regional interests. This brief presents the ISA as a deliberate instrument of Indian economic statecraft that syncs its economic priorities (finance and technology for clean energy transition) with those of national security (energy security). It then goes on to highlight the gaps in the stated objectives of the new international organisation as well as implementation challenges. Based on the lessons emerging from the form and functioning of the ISA, this brief emphasises the need for India to refocus and deepen its engagement with this climate framework. Finally, it offers policy recommendations for India to leverage the ISA’s platform to secure its core negotiation interests of mobilising greater finance for climate action and, in turn, furthering its grand strategy of becoming a bigger power on the global stage.

1. Introduction

On November 30, 2015, the first day of the Paris Climate Conference, India and France jointly launched the International Solar Alliance (ISA) to boost solar energy in developing countries (UNFCCC, 2015). India had been under intense scrutiny over its potential role in either securing or scuttling a global climate deal in Paris, and this announcement signalled a willingness on the part of India to be an active player in global climate cooperation. The ISA was initially conceived by India as a coalition of “solar-rich” countries that would work towards addressing their energy needs and collaborate on addressing the identified gaps in solar energy deployment (ISA, 2015). The solar-rich or prospective ISA member countries were identified as those located between the Tropic of Cancer and the Tropic of Capricorn—that is, countries that were ideally located geographically for optimal absorption of radiation from the sun. Crucially, most of these countries are developing countries with poor or no energy access, and the underlying motivation for the formation of the ISA was to address the gap in solar energy deployment in such countries. On December 6, 2017, a little over two years since its launch, the ISA—led by India and backed primarily by developing countries in Asia and Africa—became a legal entity. At present, 116 countries have signed the main legal text of the ISA—the Framework Agreement—and among them, 94 countries have ratified the treaty text to become full members.

India’s leadership role in the creation and operationalisation of the ISA cannot be viewed independently of the rapid rise in solar photovoltaic (PV) installations in India. Today, India ranks fifth in the world in terms of total installed renewable energy power capacity after China, the United States (US), Brazil, and Canada. It also ranks fifth in total installed solar energy power capacity after China, the US, Japan, and Germany (IRENA, 2023). The National Solar Mission—India’s flagship solar policy—was launched in 2010 to create an enabling policy framework for the deployment of 22 GW of solar power by 2022. Leading up to the Paris climate talks in 2015, India ramped up its renewable energy targets and set a goal of achieving 175 GW of installed renewable energy capacity by 2022. Of this, the solar power capacity target was revised by almost five times to 100 GW of solar power by 2022 (PIB, 2015). India’s Nationally Determined Contributions (NDCs) submitted under the Paris Agreement underscore its renewable energy ambition, as it has set a goal of securing 50% of its total power capacity from non-fossil-fuel sources by 2030 (UNFCCC, 2022). Given the exponential rise of solar energy in India’s energy mix, this policy brief will explain India’s foreign policy motivation for the creation of the ISA. The first section details the strategic thinking behind leveraging a new geography of “sunshine states”. The next section goes on to analyse the functioning of the new international organisation, and brings out the gaps between the stated objectives and implementation of activities. Ultimately, it offers policy recommendations for India to refocus its engagement with this platform for global climate cooperation, and further its strategic interests of unlocking greater climate finance and becoming a global power.

2. Leveraging a New Geography

The creation of the ISA reflects an important shift in India’s foreign policy, wherein climate change was used to further India’s strategic interests: one, to take a leadership role in a climate-adjacent space—solar energy—and reinforce its commitment to climate action, and two, to assert its global power by creating a new treaty-based international organisation (Jha, in press). By 2015, under the stewardship of Prime Minister (PM) Narendra Modi, there was a marked shift in the country’s foreign policy agenda as India started aiming for a leadership role in global governance and began staking its claim among other major powers in global politics (Narlikar, 2017). Its role in the global climate deal came under intense scrutiny, and the Paris climate talks provided an opportune moment for India to become an important player in the next international climate agreement. India’s diplomatic positioning in Paris marked a complete departure from its previously defensive, nay-saying outings at multilateral climate negotiations because it intended to advance its strategic interest of becoming a global leader. As a result of the change in political leadership, the negotiators came empowered to strike a deal and went on to quickly ratify the Paris Agreement, allaying concerns that India would insist on developed countries first fulfilling their pre-2020 commitments under the second phase of the Kyoto Protocol (Mohan, 2017). At the same time, the launch of the ISA was a diplomatic success for India as it aimed to capture an issue-specific governance area (Ghosh, 2019) and straddle the G77 and G20 blocs in enabling the formation of a new intergovernmental organisation (Mathur, 2019).

PM Modi’s leadership on climate change–related issues, particularly with regard to solar energy, is the first instance of an Indian PM actively shaping India’s position in multilateral climate negotiations. As the chief minister of Gujarat, he was an early proponent of solar energy and first expressed his vision for a new grouping of nations with high solar power potential: “There are different League of Nations like OPEC[1]and others. A league should be formed among the nations which get more sun rays. India should play a prominent role in the formation of such a league and step up its R&D[2]to lead those nations” (PTI, 2012). This early idea to bring such sunshine states together as a new bloc eventually took shape as the ISA. Buoyed by the falling prices of solar energy globally, India also witnessed great success with a new business model based on the aggregation of demand coupled with bulk procurement in two sectors: light-emitting diode (LED) bulbs and PV solar electricity. There was a realisation that the large Indian market could be leveraged to enhance the adoption of low-carbon technologies, while simultaneously reducing their prices and strengthening the markets for these technologies in other developing countries. Therefore, the ISA was conceived as a “market-making” mechanism that could direct the flow of finance and technology towards solar-rich countries with enormous market potential for solar power deployment (Jha, 2021). India’s steering of the ISA is an indicator of how local interests and concerns—the scaling up of its domestic renewable energy targets—get intertwined with international, transnational, and regional interests to make solar energy affordable for the poor in all ISA member countries.

At the first assembly of the ISA in October 2018, PM Modi laid down the vision for “One Sun, One World, One Grid” (OSOWOG), which will be a transnational electricity grid supplying solar power across the globe (PIB, 2018). As per a draft plan prepared by the Ministry of New and Renewable Energy (MNRE), OSOWOG will connect 140 countries through a common grid that will be used to transfer solar power and will be divided into three phases: the first phase will connect the Indian grid with the Middle East, South Asia, and South-East Asia grids to share solar and other renewable energy resources; the second phase will connect the countries in the first phase with the African pool of renewable sources; and finally, the third, concluding, phase will be one of global interconnection (Jai, 2020). At the Glasgow Climate Conference, India, the United Kingdom, and the ISA officially announced the Green Grids Initiative (GGI) to create an interconnected global grid for trading energy from the sun (UN Climate Change Conference, 2021).

The ISA’s theory of change follows a three-pronged approach: first, facilitating energy access at the local level; second, ensuring energy security at the national level; and third, achieving an energy transition at a global level (ISA, 2022). Based on the geographies that the OSOWOG plan targets, the ISA clearly appears to be a first step in India dominating the global conversation around solar energy. But the question remains as to whether the ISA is merely indicative of India’s soft power or whether it will be successful in its ambitious efforts to promote the global diffusion of solar energy and consequently secure India’s energy future. The next section will highlight some of the lessons emerging from the form and functioning of the ISA and presents the policy brief’s main argument for a deeper and more strategic engagement by India with the climate cooperation framework under the ISA.

3. ISA, India, and Global Climate Cooperation

As a new international organisation that brings together states and non-state actors, the ISA is intricately connected to the energy transition not only in India, but also in other parts of Asia and Africa, which form the bulk of its membership. The making of the ISA illustrates how solar power became central to India’s strategies for a clean energy future and the geoeconomic strategy underlying India’s decision to take on a leadership role at the global level. I argue that the ISA is a deliberate instrument of Indian economic statecraft that syncs its economic (finance and technology for a clean energy transition) and national security (energy security) priorities. The treaty-making process—led primarily by India—illustrates a new kind of economic diplomacy, wherein India not only reached out to solar-rich developing countries with shared interests, but also actively sought to bring on board developed countries and other non-state actors with keen financial interests in these untapped markets.

3.1 Legal Form

The ISA’s legal form and structure, heavily influenced by the hybrid architecture of the Paris Agreement, is best described as “soft law in a hard shell”—that is, it uses the legal infrastructure of a treaty while relying on the social structure of participating actors for its future implementation (Jha, 2021). India was motivated by the twin concerns of ensuring legitimacy through legal status and flexibility by way of the legal terms used, which explains the design of the ISA: firstly, the “hard” legal form of a treaty and, secondly, the “soft” legal terms with opt-in and non–legally binding obligations. India also made a conscious effort to differentiate the ISA from other similarly situated organisations in the clean energy landscape, particularly the International Renewable Energy Agency (IRENA) and the International Energy Agency (IEA), by focusing solely on solar energy. The ISA emphasised its action-oriented profile as an important distinction from IRENA, which has a research-oriented profile and produces annual statistics on the state of renewable energy around the world.

Despite its characterisation as an action-oriented organisation, the ISA’s functioning since becoming a legal entity has been limited to research-oriented activities, which are focused on three priority areas: advocacy and analysis, capacity-building, and programmatic support to least-developed countries (LDCs) and small island developing states (SIDS). It has developed nine comprehensive programmes, each focusing on a distinct application that could help scale the deployment of solar energy solutions: solar applications for agricultural use, affordable finance, solar minigrids, rooftop solar, solar e-mobility and storage, solar parks, solarising heating and cooling systems, solar PV battery and waste management, and solar power for green hydrogen (ISA, 2023a).

With varying levels of member country participation, ISA’s programmes provide support on policy, regulatory and technical issues, and project preparation. In 2019, the ISA Secretariat conducted country missions to eight African countries—Benin, Guinea, Malawi, Congo, Mali, Togo, Uganda, and Niger—to carry out feasibility studies and prepare assessment reports for the deployment of various solar technologies in these countries (ISA, 2023b). Since 2019, the ISA’s flagship publication has been a yearly report on the “Ease of Doing Solar in ISA Member Countries” (ISA, 2023c). So far, it has been unable to fully exploit the flexibilities built into the treaty structure to rely on non-state actors for extensive solar energy deployment. The overall scope and implementation of ISA’s programmes are focused on off-grid solar applications rather than grid-connected solar power projects, which as I argue later, will be a big stumbling block to India’s strategic ambition of OSOWOG.

3.2 The Missing Finance Link

One of the stated goals of the ISA is to mobilise USD 1 trillion till 2030 for a large-scale deployment of affordable solar energy in the developing world, especially in the poorest regions of the world that still lack energy access. Despite highlighting the tremendous potential for market growth in solar-rich member countries, the ISA’s efforts to coalesce global finance and technologies in areas that need it the most have not yielded any significant results. Since its creation, India and France are the only two countries that have made financial contributions to the ISA: India has committed to extending nearly USD 1.4 billion worth of lines of credit, and the French Agency for Development has committed approximately EUR 1 billion for solar projects (France in India, 2018). In addition, the budget and financial resources of the ISA are dependent on voluntary contributions from member countries and partner organisations. India is the only country extending financial support for ISA’s corpus and recurring expenses—an initial corpus of USD 27 million was provided by India for a five-year period, with additional contributions of USD 1 million each by the Solar Energy Corporation of India (SECI) and Indian Renewable Energy Development Agency (IREDA). However, with membership fees being voluntary, the future of ISA’s functioning appears to be uncertain as the initial five-year period of the ISA corpus draws to a close.

At multilateral climate negotiations, India has maintained its long-standing position on the “differentiated responsibility” of developing and developed countries, and particularly that climate action in the developing world hinges on adequate funding and technology transfer. In Glasgow, PM Modi called out the hollow promises of the developed world to provide climate finance, insisting that the global ambition on climate finance cannot remain the same as it was in Paris (PIB, 2021). Given the already fractured nature of multilateral climate negotiations on finance, the ISA provides a new, alternative venue to mobilise finance and technology for solar energy deployment in the developing world.

I argue that this ties back into India’s historic stance on differentiated responsibility and provides an opportunity to demand greater accountability from the developed world with regard to finance and technology transfer commitments. Mobilisation of funds, including from the private sector, will be key to the successful implementation of the ISA in the coming years, and Indian climate negotiators should draw a clear, explicit link between the ISA and India’s core strategic interest during climate negotiations—finance for climate action. At the same time, India should leverage its own innovation and research landscape, as well as the enormous market potential in ISA member countries, to drive more private and philanthropic investment in solar energy deployment.

3.3 A Grand Climate Strategy?

In recent years, India has sought geostrategic gains from climate change issues and is choosing to highlight its responsibility through diplomacy and sustainable energy investments (Hakala, 2019). The creation of the ISA as a new international organisation demonstrates India’s willingness to be a more responsible power on the global public good—the sun. The expansion of the ISA with the OSOWOG plan could be of high strategic importance for India’s energy security. However, the ambitious plan is not immune to splintered implementation.

The MNRE is currently tasked with preparing the road map and implementation plan for OSOWOG (Bhaskar, 2020) and is the nodal ministry for all ISA-related activities. The Ministry of Environment, Forests and Climate Change (MoEFCC) remains the nodal ministry for all multilateral climate negotiations. Given the cross-border energy trade and connection of electricity grids under the proposed plan, any bilateral or minilateral engagement between countries is expected to fall within the ambit of several ministries, such as the Ministry of External Affairs (MEA), Ministry of Power, and Ministry of Commerce and Industry. Until the ISA is able to demonstrate actual gains from extensive solar energy deployment in the energy-poor regions of the world, shifting the focus towards the OSOWOG plan will merely obfuscate the organisational vision of mobilising investments for solar energy solutions.

The OSOWOG plan, touted as a counter to China’s Belt and Road Initiative, leaves many questions unanswered—for example, the mechanism for cost sharing, the high transmission losses that would occur when connecting grids between countries, issues concerning grid stability in different regions, and incompatible laws and policies on renewable electricity (Jhawar, 2020). Moreover, the ISA’s overwhelming focus on off-grid solar applications raises concerns regarding the ability of the organisation to shoulder the weight of connecting electricity grids across borders. For India, the OSOWOG plan will have significant implications for future climate and energy partnerships as it would necessitate better strategic planning and coordination, not only between the relevant ministries in India, but also between Indian diplomats and their counterparts in other countries. Going forward, India should refocus its engagement with the ISA and leverage the in-built flexibilities to meet the primary goal of promoting extensive deployment of solar energy in the developing world. Unmet promises on that front will only dent India’s grand strategy of using the ISA to supply solar energy across borders.

References

Bhaskar, U. (2020, May 28). India invites bid for One Sun One World One Grid to take on China’s Belt and Road Initiative. Mint. Retrieved from https://www.livemint.com/industry/energy/india-answer-to-china-belt-and-road-initiative-one-sun-one-world-one-grid-11590634870755.html

France in India. (2018, March 16). International Solar Alliance. Retrieved from https://in.ambafrance.org/International-Solar-Alliance-15319

Ghosh, A. (2019). Making sense on its own terms: India in the HFC and aviation negotiations. In N.K. Dubash (Ed.), India in a warming world: Integrating climate change and development (pp. 230-249). New Delhi, India: Oxford University Press.

Hakala, E. (2019). India and the global geoeconomics of climate change: Gains from cooperation? [ORF Issue Brief No. 291]. New Delhi, India: Observer Research Foundation.

IRENA. (2023). Country rankings. International Renewable Energy Agency. Retrieved from https://www.irena.org/Data/View-data-by-topic/Capacity-and-Generation/Country-Rankings

ISA. (2015). Working paper on International Solar Alliance and list of prospective members [Press release]. International Solar Alliance. Retrieved from https://isolaralliance.org/media/press-release

ISA. (2022). Newsletter, February 2022, volume 1. International Solar Alliance. Retrieved from https://isolaralliance.org/publications/news-letter

ISA. (2023a). Scaling solar application for agricultural use. Retrieved from https://isolaralliance.org/work/scaling-solar-application-agricultural-use

ISA. (2023b). Expert team mission reports. Retrieved from https://isolaralliance.org/publications/team-mission-reports

ISA. (2023c). Publications. Retrieved from https://isolaralliance.org/publications/publication

Jai, S. (2020, August 15). One Sun, One World, One Grid: All you need to know about mega solar plan. Business Standard. Retrieved from https://www.business-standard.com/article/current-affairs/one-sun-one-world-one-grid-all-you-need-to-know-about-solar-strategy-120081500417_1.html

Jha, V. (2021). “Soft Law in a Hard Shell”: India, international rulemaking and the International Solar Alliance. Transnational Environmental Law, 10(3), 517-541.

Jha, V. (in press). The making of the International Solar Alliance: India’s moment in the sun. Oxford, England: Oxford University Press.

Jhawar, P. (2020, June 17). One Sun One World One Grid: A journey of ironies? Down to Earth. Retrieved from https://www.downtoearth.org.in/blog/energy/one-sun-one-world-one-grid-a-journey-of-ironies–71815

Mathur, A. (2019). India and Paris: A pragmatic way forward. In N.K. Dubash (Ed.), India in a warming world: Integrating climate change and development (pp. 222-229). New Delhi, India: Oxford University Press.

Mohan, A. (2017). From Rio to Paris: India in global climate politics. Rising Powers Quarterly, 2(3), 39-61.

Narlikar, A. (2017). India’s role in global governance: A modification? International Affairs, 93(1), 93-111.

PIB. (2015, June 17). Revision of cumulative targets under National Solar Mission from 20,000 MW by 2021-22 to 1,00,000 MW [Press release]. Press Information Bureau. Retrieved from https://pib.gov.in/newsite/PrintRelease.aspx?relid=122567

PIB. (2018, October 2). PM inaugurates first assembly of the International Solar Alliance [Press release]. Press Information Bureau. Retrieved from https://pib.gov.in/Pressreleaseshare.aspx?PRID=1548295#:~:text=The%20first%20Assembly%2C%20in%20a,energy%20access%20at%20affordable%20rates

PIB. (2021, November 1). National statement by Prime Minister Shri Narendra Modi at COP26 Summit in Glasgow [Press release]. Press Information Bureau. Retrieved from https://pib.gov.in/PressReleasePage.aspx?PRID=1768712

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UN Climate Change Conference. (2021, November 2). Green grids initiative—One Sun One World One Grid: One sun declaration. Retrieved from https://webarchive.nationalarchives.gov.uk/ukgwa/20230105153200/https://ukcop26.org/one-sun-declaration-green-grids-initiative-one-sun-one-world-one-grid/

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UNFCCC. (2022, August 26). India updated first nationally determined contribution. United Nations Framework Convention on Climate Change. Re­trieved from https://unfccc.int/documents/611411?g­clid=EAIaIQobChMImbDmxOmbgQMV2gat­Bh3tHAnPEAAYASAAEgIWRfD_BwE

Acknowledgements

I would like to thank the editors of this special report and the reviewers for their generous and valuable feedback. Opinions expressed are solely my own and do not reflect the views or position of my employer.

Recommended citation:

Jha, V. (2023). International Solar Alliance: Bridging the Gap. In Xavier, C. &Nachiappan, K. (Eds). Tracks to Transition: India’s Global Climate Strategy. (pp. 37-43). Centre for Social and Economic Progress. Retrieved from https://csep.org/ShsefVt

The post International Solar Alliance: Bridging the Gap first appeared on CSEP.

The International Energy Agency (IEA) was set up in 1974 as a collective response to major disruptions resulting from the 1970s oil crisis when an embargo by major oil producers pushed prices to record-high levels and exposed the vulnerability of the global energy system. While energy security is still central to the IEA’s work, the institution has evolved to have a greater focus on clean energy transitions in response to the current global energy landscape and climate crisis. Today, while taking an all-fuels, all-technologies approach, the IEA provides analysis, data, and practical solutions to countries, and advocates policies that make energy more reliable, affordable, and sustainable.

IEA’s founding members included the major economies of that time, including the United States, United Kingdom, Japan, and Germany. As the global energy market evolved, India assumed a greater role in global energy affairs, leading to the IEA redefining its relationship with India. In 2015, the IEA introduced an “open door” policy to deepen collaboration with many emerging economies through the special status of “Association”. This was in line with their new focus on engaging with the emerging world, as well as their commitment to clean energy transitions, which were supported by activities under IEA’s flagship Clean Energy Transitions Programme. India officially joined the IEA in 2017 as an association country, and this bilateral cooperation now constitutes one of the IEA’s largest programmes, covering a broad range of work on energy, including energy efficiency, critical minerals, renewable energy, energy data, power-sector reform, and clean-energy technologies.

In the next 30 years, India will have the largest energy demand growth in the world. Its critical challenge will be to ensure secure and affordable energy for growth while advancing its energy transition. Today, India’s increasing influence in global energy affairs makes it a vital partner in the IEA’s work and efforts to continue to be a leading actor in the global energy dialogue. This brief looks at the progressive deepening and broadening of the relationship between India and the IEA and aims to provide insight into the future of this relationship.

1. Introduction

India became the world’s most populous country in 2023 and is poised to emerge as the world’s third-largest economy by 2027. There is no doubt that India is playing an increasingly prominent role on the international stage, which is of strategic importance for the global energy and climate conversation. This brief will set out the origins of the International Energy Agency (IEA) and the timeline of its engagement with India. Even as the institutional relationship between India and the IEA continues to evolve, it is pertinent to review the emerging importance of the IEA and India in recent years to provide vital insight into the future of this critical collaboration.

The IEA, the rationale for its initial structure, and its focus are a result of the 1973–74 oil crisis. In 1973, a few members of the Organization of Arab Petroleum Exporting Countries (OAPEC) collectively imposed an oil embargo on the United States and several other countries in response to their support of Israel during the 1973 Arab-Israel War. The embargo banned petroleum exports and introduced cuts in oil production. These actions led to a dramatic increase in global oil prices, with some spot transactions increasing by up to six times the original value. The impact of these market disruptions was massive. Oil-consuming countries were caught unprepared, consumer costs skyrocketed, and countries experienced economy-wide impacts. Without adequate information or means for coordinated action, the vulnerability of many countries to the oil shocks was evident.

As a result of the 1973–74 oil crisis, industrialised countries joined together to establish the IEA to take rapid, decisive, and remedial action through organised international cooperation. Some of the largest economies of that era, primarily major energy importers that were already working together through the Organisation for Economic Cooperation and Development (OECD), came together to cooperate on energy policies and ensure energy security through a shared emergency response system. The first constituent document of the IEA, adopted on November 15, 1974, was a Decision of the [OECD] Council Establishing an International Energy Agency of the Organisation (OECD, 1974a). The second was a treaty in the form of the Agreement on an International Energy Program (referred to as the IEP Agreement), which was signed on November 18, 1974 (OECD, 1974b).

2. From Oil Security to New Energy Imperatives and Emerging Economies

Oil and energy security at large were at the centre of the IEA’s mission and continue to remain at the core of its activities even today. The IEP Agreement established provisions for an oil emergency response system, including a stockholding system, and provided the framework for cooperation on a range of energy issues. Currently, each IEA member country is required to hold oil stocks equivalent to at least 90 days of their net oil imports. These stocks can be released to global oil markets through coordinated IEA collective actions in the event of a major supply disruption to mitigate the negative impact of such disruptions on the global economy. The mandate and vision of the Agency have enabled members to respond to energy crises that could not have been anticipated in 1974. It has also provided the basis for a focus on technology, innovation, and global collaboration to ensure members’ energy systems are sustainable, secure, and resilient. This proved to be useful in the Agency’s response to oil supply disruptions and, in more recent years, it has allowed the IEA to consider new energy imperatives, such as the need to transition to clean energy and energy efficiency to meet the needs of climate crises and increase access to energy.

As global energy markets have evolved, emerging and developing economies have begun to play a stronger role in the global energy debate. In 2015, the IEA established the Association framework and adopted an “opendoor” policy to deepen collaboration with key emerging economies such as India (IEA, 2015b). Enhancing collaboration with key countries within the Association framework has been a concerted step towards making the IEA a truly global agency. To signal the new course embarked on by the IEA, the newly elected executive director at that time, Dr Fatih Birol, made his first official visit to Beijing and New Delhi in 2015. Currently, IEA members, along with accession and association countries, together account for 80% of global energy consumption.

The IEA has worked with India since 1998. In 2015, it published a special report, India Energy Outlook 2015, which focused on how Indian policies such as the “24×7 Power for All“ or the “Make in India” campaign have impacted India’s energy outlook (IEA, 2015a). This relationship became deeper and was formalised with the IEA welcoming India as an association country in 2017, thereby beginning a new era in the IEA-India relationship (IEA, 2017a).

3. India’s New Energy Initiatives

India’s energy trajectory has been remarkable in recent years, moving from a focus on energy for development to quickly becoming a clean energy leader at the centre of global energy affairs. Since its independence, energy has played a crucial role in India’s developmental journey. From providing access to electricity, fuel for transport, and clean cooking fuels such as liquefied petroleum gas (LPG), India has leveraged energy to further the country’s growth. India’s robust economic growth has also been fuelled by the scaling up of power generation, coal mining and oil refining capacity, and the strengthening of energy infrastructure and distribution networks. Most notably, in 2018, India achieved universal village electrification, which involved bringing electricity to over 500 million Indians during the preceding decade (Dutta, 2018). The IEA called this feat “one of the greatest achievements in the history of energy” (Murphy & Daly, 2018). The ambition and complexity of India’s energy policies and their potential global consequences have made India an indispensable partner for the IEA.

India has the world’s fastest-growing energy demand. The share of Indians living in urban areas will rise from 35% in 2021 to over 50% by 2050 (IEA, 2022b). This rapid pace of urbanisation will also add to the robust growth in demand for energy and materials. According to the IEA’s Announced Pledges Scenario (APS)—which assumes all targets announced by governments are met on time—this growth in energy demand will increasingly be met by clean energy. Meanwhile, India is also greatly exposed to climate shocks. This combination of circumstances informs India’s energy and climate diplomacy priorities. Alongside its focus on clean energy technology and finance, India has spearheaded several international initiatives supporting climate action worldwide. For instance, the International Solar Alliance (ISA), which India co-founded with France, is one of the leading agencies on solar power, with a special focus on promoting energy access and transitions. In addition, the Coalition for Disaster Resilient Infrastructure (CDRI), a global partnership that was first proposed by Prime Minister Modi, aims to promote disaster-resilient infrastructure and has been hosted by India and has over 30 member countries. India has also been an active partner in other international initiatives, including Mission Innovation (MI) and the Clean Energy Ministerial (CEM), advocating for the interests of emerging and developing countries in international fora. At COP27, India succeeded in its historic proposal for the creation of a global loss and damage fund.

At COP26 in Glasgow, India laid out its bold ambition of achieving net-zero emissions by 2070. This was underpinned by a host of policies focused on achieving the clean energy transition. India is already the third-largest national market globally for renewables and has recently seen the growth of consumer-centric solutions, such as the spike in the distribution of solar photovoltaic (PV) cells, with rooftop solar growing 30 times in less than a decade (IEA, 2023). As part of its policy vision, India is pioneering a new development model, one where robust economic expansion is wholly compatible with emissions reductions. This is uncharted territory, one that developing countries and emerging economies around the world can use as a blueprint for the development of their own countries. Challenges remain for India on this front, including tackling air pollution, reducing fossil fuel imports, and ensuring reliable electricity supply, among others.

4. An Evolving IEA–India Partnership

Since becoming an association country in 2017, India and the IEA have increased their collaboration on a range of energy issues, the focus of which has been informed by India’s own energy and climate goals. The collaboration serves not only to support India’s domestic energy priorities but also to boost India’s greater role in global energy governance and international cooperation to address climate change. To this end, the IEA has developed knowledge partnerships, collaborative frameworks, and joint work programmes with Indian ministries, government agencies, industries, think tanks, and other international agencies in India, including the ISA and CDRI. Several IEA reports have a special focus on India, covering topics such as clean energy investment, renewables integration, rooftop solar, transport decarbonisation and climate policy.

As a sign of the significance of the relationship between the IEA and India, the IEA undertook two major analytical deep dives into India’s energy policies in recent years to support India prioritise its future energy policies. In 2019–20, the IEA conducted an in-depth review of India’s energy policy in partnership with NITI Aayog, following the same process as the in-depth energy policy reviews that the IEA regularly conducts of its member countries. The ensuing report, India 2020: Energy Policy Review, examined the entire energy sector of the country and offered recommendations for strengthening India’s energy policies (IEA, 2020). These recommendations have served as the foundation for joint work programmes between the IEA and the Government of India in subsequent years. The report also welcomed India’s efforts to progressively build dedicated emergency oil stocks as part of India’s strategic petroleum reserve to supplement the commercial storage available at refineries. Secondly, as part of the IEA’s flagship World Energy Outlook report series, the IEA published India Energy Outlook 2021, which explores the opportunities and challenges ahead for India’s energy sector, pathways out of the crisis following the COVID-19 pandemic, and other longer-term energy trends until 2040 (IEA, 2021b).

One of the main channels for IEA–India cooperation is the Clean Energy Transitions Programme (CETP), which was established in 2017 and is funded primarily by IEA member countries (IEA, 2017b). Through the CETP, the IEA works closely with Indian stakeholders to support India in achieving its ambitious clean energy transition goals. As highlighted earlier, India’s energy and development trajectory has shaped the focus of its climate and energy strategy on technology and innovation, investment, renewables, and climate resilience. The IEA provides support to India through CETP funding in various areas, including policy issues that will support India in the new phase of its energy transition, such as clean energy technology manufacturing, hydrogen and other low-emission fuels, and critical minerals.

Some recent examples of the ongoing cooperation between the IEA and India include the following:

• Accelerating clean energy transitions through workshops, analysis, and capacity-building on distributed solar PV, hydropower, biofuels, power-market reforms, clean energy investments, and hydrogen. This involves collaboration with the Ministry of New and Renewable Energy to expand knowledge on policy solutions that accelerate renewable energy deployment, including critical emerging technologies that will support India in attaining its goal of achieving net-zero emissions by 2070.
• Supporting energy security by working with the Ministry of Petroleum and Natural Gas to improve the country’s energy resilience in terms of emergency response measures and improved oil and gas data quality. In addition, under the new statement of intent with India’s Petroleum Planning and Analysis Cell, the IEA has been providing policy advice on natural gas, biofuels, and other alternative fuels in India’s energy economy.
• Strengthening data through exchanges and data validation exercises, supporting the implementation of recommendations from India’s cross-ministerial data working groups and training key stakeholders, including future energy leaders and state-level officials.
• Improving energy efficiency by providing comprehensive support, including regular policy training for officials on efficiency in buildings, cooling, industry, electric vehicle charging infrastructure, energy services, and smart grids.
• Encouraging a people-centred transition by sharing insights from international best practices with the Indian government and stakeholders from civil society.
• Supporting innovation in clean energy technologies, particularly energy storage, batteries, biofuels, hydrogen, and road transport. The IEA tracks spending on energy research, development, and demonstration. It also analyses India’s innovation policy framework and provides policy advice on specific technologies, including hydrogen, carbon capture usage and storage (CCUS), and energy storage. India also participates in 11 technology collaboration programmes hosted by the IEA that work to advance the research, development, and commercialisation of a wide range of energy technologies.

In 2023, a major focus of the IEA has been supporting India in its presidencies of the G20, the Clean Energy Ministerial (CEM), and Mission Innovation (MI), drawing on the IEA’s long-running experience in these fora. The IEA has been involved in every G20 process since the Pittsburgh Leaders’ Summit in 2009, particularly the creation of dedicated energy and climate working groups and the G20 Energy Ministerial; the IEA has contributed to all energy work streams of the G20. Further, the IEA hosts the CEM Secretariat and is a contributor to multiple CEM initiatives ranging from e-mobility to hydrogen to people-centred transitions.

During India’s first G20 presidency, the IEA contributed to each of the six energy policy priorities of the Energy Transition Working Group. It also supported two further areas in the Sherpa Track. The first was the Development Working Group, where the IEA provided insights on green development and analysis of the potential global benefits of India’s “Lifestyle for Environment” initiative. The second was the Disaster Risk Reduction Working Group, a new G20 group established by India as a global leader in disaster and climate resilience, to which the IEA contributed its expertise, emphasising the importance of energy infrastructure in climate and disaster risk reduction. Further, the IEA has made significant contributions to the Finance Track of the Indian G20 presidency, in particular, the Framework and Sustainable Finance Working Groups, by providing insights on the macroeconomic impact of energy security and energy transition pathways and finance for clean energy transitions, respectively.

These examples establish that the relationship between the IEA and India is continuously evolving. Even as the IEA responds to India’s priorities, India is emerging as an ever more powerful global energy player. In tandem, the institutional relationship between the IEA and India has equally developed. It took a new direction in 2021 when they signed the Framework for a Strategic Partnership, committing to strengthening their collaboration across a range of areas, including energy security and clean energy transitions (IEA, 2021a). This collaboration was further endorsed by IEA member countries at the 2022 IEA Ministerial Meeting, where IEA ministers agreed on the need for a pathway for opening up IEA membership to likeminded countries willing to commit to the mission and objectives of the IEA (IEA, 2022).

The development of the relationship between the IEA and India over nearly a decade illustrates a progressive deepening and broadening in strategic engagement. For both sides to reap the full benefits of this relationship, the current partnership with the IEA should be further deepened. As outlined in this policy brief, India faces formidable challenges to its ambitious energy transition. It is extremely vulnerable to the risks of climate change; it remains heavily dependent on imported energy; and it is the world’s most populous country, with a significant proportion of its population increasing its energy demands to support a higher standard of living. These challenges cannot be solved without a positive global environment of innovation, technology, finance, and cooperation. The collaborative international forum and the expert policy advice that the IEA offers can support India in its important energy transition. Equally, for the IEA, a growing partnership with India will be crucial to achieving its mandate to lead the global energy sector’s fight against climate change and to ensure energy security during the energy transition.             

References      

Dutta, S. (2018, April 29). Mission accomplished: PM Narendra Modi gives power to all 19,000 unelectrified villages. The Times of India. Retrieved from https://timesofindia.indiatimes.com/india/mission-accomplished-pm-narendra-modi-gives-power-to-all-19000-unelectrified-villages/articleshow/63963826.cms.

IEA. (2015a). India energy outlook 2015. International Energy Agency. Retrieved from https://www.iea.org/reports/india-energy-outlook-2015.

IEA. (2015b). Joint ministerial declaration on the occasion of the 2015 IEA ministerial meeting expressing the activation of association [press release]. International Energy Agency. Retrieved from https://iea.blob.core.windows.net/assets/9e4b932e-b553-4f2c-86c3-d677eddbae72/IEA_Association.pdf.

IEA. (2017a, March 30). India joins IEA family, a major milestone for global energy governance [Press release]. International Energy Agency. Retrieved from https://www.iea.org/news/india-joins-iea-family-a-major-milestone-for-global-energy-governance.

IEA. (2017b, November 8). World’s energy leaders gather for the IEA’s 2017 ministerial meeting [Press release]. International Energy Agency. Retrieved from https://www.iea.org/news/worlds-energy-leaders-gather-for-the-ieas-2017-ministerial-meeting.

IEA. (2020). India 2020: Energy policy review. International Energy Agency. Retrieved from https://iea.blob.core.windows.net/assets/2571ae38-c895-430e-8b62-bc19019c6807/India_2020_Energy_Policy_Review.pdf.

IEA. (2021a, January 27). India and the IEA enter new phase of closer collaboration with signing of Strategic Partnership Framework [Press release]. International Energy Agency. Retrieved from https://www.iea.org/news/india-and-the-iea-enter-new-phase-of-closer-collaboration-with-signing-of-strategic-partnership-framework.

IEA. (2021b). India energy outlook 2021. International Energy Agency. Retrieved from https://www.iea.org/reports/india-energy-outlook-2021.

IEA. (2022a, March 24). 2022 IEA ministerial communiqué [Press release]. International Energy Agency. Retrieved from https://www.iea.org/news/2022-iea-ministerial-communique.

IEA. (2022b). Global energy and climate model. International Energy Agency. Retrieved from https://www.iea.org/reports/global-energy-and-climate-model.

IEA. (2023). LiFE lessons from India: The benefits of advancing the Lifestyle for Environment (LiFE) initiative through the G20. International Energy Agency. Retrieved from https://iea.blob.core.windows.net/assets/9b6305e3-c2d6-470d-b9b4-f85b67c9598f/LiFElessonsfromIndia.pdf.

Murphy, B., & Daly, H. (2018, June 1). Electricity in every village in India. International Energy Association. Retrieved from https://www.iea.org/commentaries/electricity-in-every-village-in-india.

OECD. (1974a). Decision of the Council: Establishing an International Energy Agency of the Organisation. Organisation for Economic Co-operation and Development. Retrieved from https://iea.blob.core.windows.net/assets/ba8c3ef8-f5b3-45db-86d2-719502e8d4ef/decesionofthecouncil.pdf.

OECD. (1974b). Agreement on an International Energy Program. Organisation for Economic Co-operation and Development. Retrieved from https://iea.blob.core.windows.net/assets/c6be6d60-1ca8-4b99-b8c7-7ac508ec157c/IEP.pdf.

 Recommended citation:

Jayakumar, L., Chambers, H. & Singh, S. (2023). India and the International Energy Agency. In Xavier, C. &Nachiappan, K. (Eds). Tracks to Transition: India’s Global Climate Strategy. (pp. 29-35). Centre for Social and Economic Progress. Retrieved from https://csep.org/lOfvqCH

The post India and the International Energy Agency first appeared on CSEP.

The enhanced transparency framework (ETF), a crucial part of the rulebook of the Paris Agreement, was agreed upon and adopted at the 26th Conference of Parties (COP26). The ETF aims to help better understand countries’ progress on their commitments and build mutual trust among participating countries by tracking their progress on commitments. This will create a learning process between nations and establish a platform where their challenges are discussed and addressed. To achieve such multilateral climate governance, transparency of climate actions is pivotal. However, nations are at different starting points with respect to their capabilities and capacities. The newly agreed upon ETF demands more granular information than before, which suggests that member states—especially India and other developing countries—would need more enhanced support than before to adhere to these obligations.

This policy brief explores the evolution and significance of the ETF in the multilateral process. So far, India has participated in the transparency negotiations and complied with the associated obligations. However, given India’s vast landscape and complex governance structure, it would need more financial and technical support to effectively report and build sustainable institutional and technical capacity to regularly communicate, share, and review its climate efforts. The brief further maps India’s efforts to enhance reporting under the monitoring, reporting, and verification (MRV) arrangement, discusses existing challenges, India’s role, and offers recommendations for India to build capacity to fulfil these obligations.

1. Introduction

The Paris Agreement (PA) necessitates all countries to continuously enhance their climate targets in the form of nationally determined contributions (NDC) to limit the rise in temperature to less than 2°C while pursuing efforts to limit it to 1.5°C above pre-industrial levels. Regular monitoring and reporting are crucial to ensure that efforts by all countries are adding up and their challenges are discussed and addressed. Therefore, the enhanced transparency framework (ETF) was established under Article 13 of the PA under the United Nations Framework Convention on Climate Change (UNFCCC) to track countries’ progress, build mutual trust, and create a learning process among countries. Transparency is vital to keep countries informed about each other’s climate intentions and actions, enhance confidence and cooperation, and ultimately inspire more ambitious climate actions from all, given the complexity and breadth of the challenges within climate change negotiations (Appunn, 2018).

As a signatory to the PA, India is obligated to adhere to the ETF and submit biennial transparency reports (BTR) every two years (UNFCCC, 2021). The BTR demands information on greenhouse gas (GHG) emissions and domestic climate actions and supports the monitoring of the execution of their NDCs by providing necessary data. It serves the purpose of showcasing India’s progress internationally but also enables the country to make informed climate policy decisions, learn from its experience, and attract international financial, technological, and capacity-building support.

However, adhering to the reporting obligations poses multiple challenges not only for India but also for other developing and least-developed countries due to significant institutional, technical, and financial capacitydeficits in undertaking this exercise (UNFCCC Secretariat, 2022). With the first set of reports to be submitted by 2024, the expectation is that India will enter a new era of transparency (Initiative for Climate Action Transparency, 2019). However, the question is: How will India comply with the more stringent transparency requirements of the PA, given the challenges in adhering to the previous simpler transparency arrangements?

2. How Have the Transparency Negotiations Evolved?

For decades, countries have been engaged in the debate for transparency in climate action and support under the UNFCCC. At the 16th Conference of Parties (COP16) held in 2010, the monitoring, reporting, and verification (MRV) framework was established under the Cancun Agreements (UNFCCC, 2011)[1] and subsequently operationalised through the modalities adopted in Durban[2]at COP17 in 2011 (UNFCCC, 2012). Following these arrangements, developed countries followed rigorous reporting and review obligations and were subjected to detailed disclosure of sectoral GHG emissions. On the other hand, developing countries, such as India and others, were not subjected to detailed sectoral emissions and, consequently, had relatively simpler reporting obligations and facilitative sharing of views instead of stringent reviews (Prasad & Gupta, 2019).

It is critical to acknowledge that India and other developing countries are at different starting points in terms of their MRV capabilities. Their lack of capacity is evident from the fact that only 27 non-annex parties, mainly developing countries, out of 154 have submitted their third biennial update report (BUR)—a pre-2020 reporting obligation for developing countries—to date (Table 1) (UNFCCC, 2023).

The differences in MRV capacities have influenced how countries have approached negotiations on transparency. Between 2011 and 2015, developed countries continued to push for a common transparency framework for climate change actions, while India, along with developing countries, was inclined towards a differentiated approach owing to varying capacity constraints (Third World Network, 2016).

Eventually, in 2015, the PA established an enhanced transparency framework whereby all signatory countries to the PA—developed and developing—are subject to common enhanced reporting and review obligations. Therefore, all countries are now obligated to submit the BTRs that not only cover reporting on detailed sectoral emissions, NDC progress, projections, mitigation, and adaptation but also delineate flows of support received and provided on finance, technology transfer, and capacity-building. Additionally, it also encourages countries to report on measures to tackle loss and damage. However, it allows India and other developing countries to avail built-in flexibility in adhering to these obligations considering their capacity constraints (UNFCCC, 2019). These flexibilities can be “self-determined”, where countries indicate where flexibility is availed, elucidate constraints, and offer self-determined time frames for improvement on reported constraints.[3]However, this flexibility is not granted automatically. The country requesting flexibility needs to identify, update, and include areas of improvement, called plans, for the flexibilities availed in the BTRs (UNFCCC, 2019). To ensure continuous progress, these plans should be based on a comprehensive mapping of the country’s current capacity constraints, set clear objectives, and assess the progress in the defined time frame in light of the support—knowledge and financial—received.

With this being said, it becomes important for India to define a pathway for adhering to the reporting obligations, thus increasing its capacity as well as accountability while shaping the direction of climate transparency. As the newer reporting requirements demand more detailed information, India should see this as an opportunity to attract additional international support and increase accountability, given that complying with the new requirements under ETF requires further investments in resources and commitment.

3. How Has India Performed Under the MRV Arrangement So Far?

India has adhered to the international climate reporting obligations with utmost sincerity and dedication. Thus far, India has submitted two national communications (NC) and three BURs. These reports were acknowledged and applauded for their depth, clarity, and integrity by the negotiators at the conference during the facilitative sharing of views.[4]The preparation of the BUR is a comprehensive and resource-intensive process and is conducted by specialised institutions with sector-specific expertise, along with inputs from diverse ministries, government departments, and public sector undertakings. All this is challenging to accomplish when the past is marred by inaction, unfulfilled climate commitments, and poor flow of finance and technology—the two pillars of collaborative climate action—from developed countries.

In India, the reporting process is overseen by the National Steering Committee (NSC), chaired by the secretary of the Ministry of Environment, Forests, and Climate Change (MoEFCC). A technical advisory committee, consisting of members from the government, academia, and civil society, provides essential technical guidance to undertake this mammoth exercise (MOEFCC, 2021). To monitor its domestic climate actions, India’s policies are designed with an inbuilt evaluation or MRV process. The MRV for operational designs is implemented in a decentralised manner, with responsibilities allocated at multiple levels of governance (MOEFCC, 2021). The core elements of the MRV framework aim to track the effectiveness of domestic sustainable development programmes and schemes and monitor energy efficiency and emissions-related indicators in addition to other climate co-benefits. For example, the perform, achieve, and trade (PAT) regulatory instrument sets energy efficiency targets for key industrial sectors and firms that are then permitted to trade energy savings certificates (ECerts). The Bureau of Energy Efficiency (BEE) has developed stringent reporting procedures and guidelines, ensuring a reliable MRV framework to track the effectiveness of PAT and has been one of the most successful schemes (Express News Service, 2022).

In its third BUR, India also reported other efforts and the extensive work undertaken on updating and creating technical data repositories and dashboards and improving their access to the public (MoEFCC, 2021). Further, the Government of India (GoI) has developed several web portals and digital dashboards—especially in energy-related sectors, which impact emissions reduction, such as power, renewables, industry, and transport—for effective tracking of performance across all states on a single platform. Creating these web portals reiterates GoI’s intention of moving towards a digital India while simultaneously showcasing successful examples of transitioning towards transparency in governance (MoEFCC, 2021). Here are some examples:

• In the energy sector, the National Power Portal developed by the Central Electricity Authority (CEA) provides information on installed renewable capacity and its generation.
• In the transport sector, the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles in India (FAME India) scheme is monitored by the FAME dashboard, displaying the key outcomes and associated indicators (Ministry of Heavy Industries, n.d.).
• Within the agricultural sector, a farmers’ portal has been developed for estimating baseline emissions[5](Ministry of Agriculture and Farmers Welfare, n.d.).
• In the forestry sector, the Bhuvan geospatial portal provides services and applications related to satellite remote sensing data for public use.
• In the waste sector, the Swachh Bharat-Urban and Gramin dashboards track progress towards achieving their programme targets (Ministry of Housing and Urban Affairs, n.d.; Ministry of Jal Shakti, n.d.).
• To track India’s progress on sustainable developmental goals (SDGs), the NITI Aayog launched the SDG India Index, which monitors at the level of states and union territories the outcomes of government interventions and schemes related to the SDGs (NITI Aayog, 2022).

In addition to these initiatives, several mobile applications—such as BEE Star Label,[6]MERIT,[7]and Meghdoot[8]—are used to widen the reach of government initiatives and monitor their implementation. Further, there are several initiatives by non-governmental stakeholders such as the GHG Platform India (GHG Platform India, n.d.), the Renewable Energy Data Portal by Prayas (Kulkarni, Sahasrabudhe, Chunekar, & Dixit, 2019), Centre for Energy Finance (CEF) by Council on Energy, Environment and Water (CEEW) (CEEW, n.d.), and the India GHG Program led by World Resources India (WRI) India, Confederation of Indian Industry (CII), and The Energy and Resources Institute (TERI) amongst others to support India’s domestic capacity to manage and measure GHG emissions in Indian businesses (GHG Platform India, n.d.).

The range of such efforts demonstrates India’s leadership and commitment to its transparency obligations. While these efforts are laudable, India still requires support to further enhance its institutional capacity to report accurate data on time and address existing MRV challenges. Drawing on the experiences of diverse MRV systems established under various policies, India should plan for an integrated system that will be on par with international standards. To achieve this, India must address the existing MRV gaps, including some of the following key areas of action:

• Lack of data and data management systems: The availability of quantifiable information is critical for policymakers to analyse and draw useful interpretations. However, the information provided by ministries and departments represents merely a portion of the data that is available across the plethora of publications. Further, it is in a form that makes it difficult to be used seamlessly in conjunction with other data sources, especially in alignment with the ETF guidelines. Poor or non-availability of data and lack of regular updates often lead to imprecise estimates of emissions for the unorganised industrial sector and various sections of the formal manufacturing sector.

• Limited collaborative institutional arrangements: The lack of the necessary mandate to share data in easy-to-use formats within and across departments and ministries precludes a comprehensive evaluation of all efforts and inputs. While India already has an established network of institutions at almost every level of governance, closer coordination between them is necessary to address information gaps in the context of climate change mitigation actions and GHG inventories.

4. Implications of the Enhanced Transparency Framework for India

Though India has sound arrangements and processes in place to report on climate actions (Prasad & Gupta, 2019), it requires more formal and institutionalised arrangements focused on interdepartmental synergy and capacity retention. This is especially relevant in the context of ETF, which obligates reporting on areas where India has no prior experience. Table 2 provides a brief overview of the newer elements expected under the ETF.

Table 2 highlights the newer and enhanced reporting obligations for countries to adopt and adhere to, some of which signal fresh MRV challenges. For instance, India’s capacity to report on the 59 common reporting tables is varied. Thus far, India has reported through summary tables related to national GHG inventories across sectors for all gases and emission factors and tiers. In addition, substantial capacity exists for reporting on the energy sector. However, India may have to avail the flexibility option for reporting on certain sub-sectors of energy due to little clarity on emissions from the informal sector, lack of data for all sub-sectors at the desired frequency, mismatch in sectoral details across different published documents, and the technology advancement required to measure emission factors at regular intervals across industries (Prasad & Gupta, 2019). An overview of the sectoral tables shows that India can report on industrial processes and product use; agriculture; land use, land-use change and forestry; and waste with some degree of flexibility. However, India would be required (with flexibility) to report consistent time series from 1990 and develop projections on GHG emissions of fifteen years for which it has no prior experience and would have to build capacity.

Due to the extensive reporting obligations required under the ETF and the lack of domestic MRV capacity, India will need more financial and technical support as compared to other countries to meet the reporting Moreover, given its vast landscape and three-tier governance structure, it would be challenging for India to cover a larger area for reporting without adequate resources. Consequently, India will need dedicated technical and financial support to invest in the development of the requisite expertise and capacity to report on these elements.

5. Recommendations

Despite decades of cooperation under the UNFCCC, India and most developing countries are yet to build sustainable institutional and technical capacity to regularly communicate, share, and review their climate efforts. With their first BTRs due in 2024, the window to prepare for the transition from the current MRV requirements to the ETF is narrow. In this context, the following are key:

• First, developed countries need to provide targeted financial, technical, and capacity-building support for establishing a sustainable ETF mechanism in India. They should help in designing and implementing programmes that are scaled to meet reporting obligations by addressing acute MRV gaps between existing domestic arrangements and required capacities. On the other hand, India, along with other developing and least-developed countries, should develop a platform for wider stakeholder engagement for South-South cooperation to learn from each other’s experiences as the experiences of the Global North may not be replicable to the domestic realities and capacities in the Global South. The focus should be to put institutional and knowledge capacities in place to allow seamless operationalisation of the ETF.
• Second, the Consultative Group of Experts (CGE)—the UNFCCC’s official mandated body—also has a crucial role in supporting the transition. This includes the continuous provision of technical advice and support to India to fulfil its obligations. India should make use of existing tools to help the CGE understand its capacity constraints. For example, an enhanced transparency framework-capacity building tool (ETF-CBT) is currently being developed by the CEEW in partnership with the UNFCCC (CGE) to aid developing countries in reporting on climate change. This tool helps identify critical capacity needs and challenges, enabling the provision of commensurate resources (CEEW, 2022).
• Third, partnerships between different stakeholders, such as multilateral organisations, civil society, academia, and the private sector, must be explored to develop lasting practices and processes to enhance the capacity of individuals and institutions regularly to support India’s efforts toward transparency and accountability. While multiple research institutions function in this policy landscape, there is little to no provision to ensure knowledge transfer between them. Hence, inclusive mechanisms should be designed, across all levels of governance, that proactively engage all stakeholders and facilitate learning and knowledge transfer among them to standardise tasks and identify priorities for future improvement.
• Fourth, encourage non-party stakeholders to supplement India’s efforts toward transparency and accountability. Non-governmental organisations could do so by improving data for reporting; conducting independent assessments for reviews; informing the global stocktake; and assessing the collaborative platforms and initiatives that were launched in parallel to the PA (Ghosh & Prasad, 2017). States should make the participation of non-party stakeholders a more formal and legitimate part of the new transparency mechanism. For their part, research and independent non-governmental organisations (RINGOs) should form a task force with the mandate to share practices, develop common standards, and support capacity building. Philanthropic foundations, the Capacity-building Initiative for Transparency (CBIT) Trust Fund, and host governments should provide financial assistance for this exercise, along with support from developed and developing countries (Ghosh, 2018).

Transparency is the backbone of the Paris Agreement that builds confidence in the multilateral process. The evidence-based knowledge that all countries are equally committed and working hard towards a common goal infuses the much-needed trust in the international system. These are some suggestions that can possibly play a meaningful role in supporting India and other developing countries in their transparency-related capacity-building journeys. Given the limited time left to reduce global emissions and achieve climate-resilient societies, efforts must be towards smarter, effective, and sustainable implementation of the ETF and related capacity building. This must be done through integrated efforts and with regular support from the developed countries.

References

Appunn, K. (2018). Germany wants transparent global climate reporting to ensure trust. Retrieved from Clean Energy Wire: https://www.cleanenergywire.org/news/germany-wants-transparent-global-climate-reporting-ensure-trust

CEEW. (2022, March 24). UNFCCC and CEEW join hands to develop capacity-building tools for developing countries [Press release]. Retrieved from https://unfccc.int/news/unfccc-and-ceew-join-hands-to-develop-capacity-building-tools-for-developing-countries

Council on Energy, Environment and Water (CEEW). (n.d.). Centre for Energy Finance. Retrieved from https://www.ceew.in/cef/

Express News Service. (2022, December 3). PAT success to boost energy conservation across industrial sector. Retrieved from The New Indian Express: https://www.newindianexpress.com/states/andhra-pradesh/2022/dec/03/pat-success-to-boost-energy-conservation-across-industrial-sector-2524638.html

GHG Platform India. (n.d.). GHG Platform India. Retrieved from https://www.ghgplatform-india.org

Ghosh, A. (2018, December 3). Living up to the deal: Expectations from COP-24. Retrieved from Council on Energy, Environment and Water: https://www.ceew.in/sites/all/themes/ceew/images/CEEW_Press_Briefing_Living_up_to_the_deal_Expectations_from_COP_2403Dec18.pdf

Ghosh, A., & Prasad, S. (2017). Shining the Light on Climate Action: The Role of Non-party Institutions. Waterloo, Canada: Centre for International Governance Innovation.

Ministry of Environment, Forest and Climate Change. (2021). India: Third biennial update report to the United Nations Framework Convention on Climate Change. Retrieved from https://unfccc.int/sites/default/files/resource/INDIA_%20BUR-3_20.02.2021_High.pdf

Kulkarni, S., Sahasrabudhe, A., Chunekar, A., & Dixit, S. (2019). About the Electricity Supply Monitoring Initiative (ESMI). Retrieved from https://energy.prayaspune.org/our-work/article-and-blog/about-the-initiative

Ministry of Agriculture and Farmers Welfare. (2021). Farmer’s portal: One stop shop for farmers. Retrieved from https://farmer.gov.in/

Ministry of Heavy Industries. (2022). FAME India Scheme Phase II. Retrieved from https://fame2.heavyindustries.gov.in

Ministry of Housing and Urban Affairs. (n.d.). Swachh Bharat Mission Urban. Retrieved from http://sbmurban.org

Ministry of Jal Shakti. (n.d.). Swachh Bharat Mission – Gramin. Retrieved from https://swachhbharatmission.gov.in/sbmcms/index.htm

NITI Aayog. (2022). SDG India: Index and dashboard. Retrieved from https://sdgindiaindex.niti.gov.in/#/

Prasad, S., & Gupta, V. (2019). A capacity building assessment matrix for enhanced transparency in climate reporting. Retrieved from https://www.ceew.in/publications/capacity-building-assessment-matrix-enhanced-transparency-climate-reporting

Third World Network. (2016, May 25). North-south divide over transparency framework in the Paris Agreement[News update]. Retrieved from https://www.twn.my/title2/climate/news/Bonn18/TWN_update11.pdf

Initiative for Climate Action Transparency. (2019). Unfolding the reporting requirements for developing countries under the Paris Agreement’s Enhanced Transparency Framework. Copenhagen: UNEP DTU Partnerships. Retrieved from https://climateactiontransparency.org/wp-content/uploads/2019/11/ICAT-MPGs-publication-final.pdf

United Nations Framework Convention on Climate Change (UNFCCC). (2011). Report of the Conference of the Parties on its sixteenth session, held in Cancun from 29 November to 10 December 2010. Retrieved from https://unfccc.int/sites/default/files/resource/docs/2010/cop16/eng/07a01.pdf

UNFCCC. (2012). Report of the Conference of the Parties on its seventeenth session, held in Durban from 28 November to 11 December 2011. Retrieved from https://unfccc.int/sites/default/files/resource/docs/2011/cop17/eng/09a01.pdf

UNFCCC. (2016). Report of the Conference of the Parties on its twenty-first session, held in Paris from 30 November to 13 December 2015. Retrieved from https://unfccc.int/resource/docs/2015/cop21/eng/10a01.pdf

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The post Climate Transparency and India’s Leadership first appeared on CSEP.

A fraught geopolitical context is affecting and fragmenting global climate governance. Increasingly less focused on the United Nations Framework Convention on Climate Change after the 2015 Paris Agreement, India’s climate diplomacy has focused on proactively joining, engaging, and, occasionally, creating new cooperative mechanisms to negotiate pathways towards its 2030 targets and its goal of achieving net zero emissions by 2070. This chapter reviews the multiple—and sometimes also overlapping—tracks towards transition that shape India’s global climate strategy at the multilateral, minilateral, trilateral, and bilateral levels. We place India’s diplomatic behaviour in the context of fragmenting global governance regimes and proliferating international cooperation frameworks. Based on the seven case studies in this report, we describe the drivers and objectives of India’s engagement with four principal tracks. Finally, we conclude by discussing the limitations of continued engagement and proliferation and examine policy and institutional options that may help India draft a viable climate strategy that is aligned with its developmental priorities at home as well as its interests in the Global South.

Once a reluctant climate actor, India has now emerged as an indispensable player in global climate politics. Historically, New Delhi has resisted and rebuffed calls to erode the differentiation between developed and developing countries. Today, to some extent, it continues to centre climate actions around the principle of common but differentiated responsibilities (CBDR), which its diplomats negotiated and institutionalised in 1992 at the Earth Conference in Rio de Janeiro.

At the same time, India’s climate persona has evolved, especially after the 2015 Paris Agreement (PA). New Delhi works with and leverages existing and emerging international regimes and frameworks to advance widening climate interests. Concurrently, international climate politics has fragmented beyond Conference of Parties (COP) settings, as countries seek new ways to drive climate mitigation and adaptation. As noted by one of India’s foremost climate experts, Nitin Desai, “climate diplomacy has become a major feature of international relations” (2019, p. xiii). Climate and energy issues—concerning both mitigation and adaptation—are becoming a core foreign policy interest, as countries now realise the importance of domestic climate action to minimise and offset the pernicious effects of climate change. International policy on climate is also changing, and India is adapting to and with it (Nachiappan & Xavier, 2023).

India has thus been a proactive player in the “transnationalist” climate camp, engaging beyond the COP-centric climate regime traditionally advocated by the “multilateralist” approach. Responding to the growing need to identify “different types of [international] initiatives”, New Delhi’s evolving behaviour indicates a growing intent to “reconceptualize the UNFCCC[1]less as an authority that attempts to govern climate change in its entirety and more as a coordinating node in a diverse landscape of initiatives” (Betsill et al., 2015, p. 2-3). By engaging and innovating across four external tracks—multilateral, minilateral, triangular, and bilateral—India has embraced the strategic vision that “greater experimentation, which is possible through more diverse configurations and multiple agreements, might suggest new ways to achieve robust global action, as well as verification of those actions” (Bell et al., 2012, p. 61).

What we see now is an India that is diplomatically agile, working across multilateral, minilateral, trilateral, and bilateral tracks to secure financing, technology, and capacity to drive domestic decarbonisation. The case studies in this report show that moving along these four tracks simultaneously will facilitate India’s climate transition to achieve half of its electricity requirements from renewable energy by 2030 and net zero emissions by 2070 (Ahluwalia & Patel, 2022).

But merely engaging and exploring different tracks does not necessarily add up to a strategy. For now, it appears as though tactical engagements may not entirely sync with the long-term institutional engagement with COPs, which has changed since Paris. As India took a bold political position to shift—and approximate—goalposts, it will now have to ensure that these commitments are realised through strategic choices and commensurate institutional capacity to accelerate its pathways to transition.

We argue that New Delhi’s current pace and adaptive posture(s) across these various tracks is not sustainable, warranting a strategic reassessment of diplomatic resources, internal-external policy coordination, and institutional reforms. Rather than taking a presentist approach, one needs to start with 2030 and 2070 targets and work backwards to assess gaps in India’s climate diplomacy.
This introduction reviews the multiple, and often overlapping, tracks to transition that shape India’s global climate strategy at the multilateral, minilateral, trilateral, and bilateral
levels. We begin by placing India’s behaviour in the context of fragmenting global governance regimes and proliferating cooperation frameworks amidst rising geopolitical tensions. This power shift affects trade and other global commons issues, such as health, but also has a particularly pernicious effect on climate, given the urgency of scalable action before 2030.

The second section covers how India has responded to increasing climate fragmentation, putting India’s climate diplomacy in the context of its changing, more opportunistic, and risk-embracing foreign policy towards new frameworks of cooperation, beyond traditional multilateral institutions.

With reference to the seven case studies in this report, section three then describes the drivers and objectives of India’s engagement with four tracks, including challenges faced by i) multilateral adaptation, ii) minilateral innovation, iii) trilateral bridging, and iv) bilateral expansion.

The fourth section discusses how together, these four policy tracks are coalescing as the foundation pillars of India’s embryonic and still evolving global climate strategy. Finally, we discuss the limitations of continued engagement and proliferation and examine policy and institutional options that may help India develop a more effective strategy to accelerate climate action keeping in mind the 2030 and 2070 targets.

1. Beyond a COP-centric System

International climate politics has irrevocably changed. Climate discussions no longer occur only through the United Nations (UN). Like other issues, climate is now being discussed, negotiated, and addressed across a patchwork of institutions and frameworks, which include different constituencies (public and private), are spatially distinct (bilateral, regional, and global), and have varied focus (specific issues or broader economic and security concerns). Surveying the climate landscape, we can map the proliferation of different arrangements—especially, regional and minilateral initiatives—as well as partnerships connecting public and private actors. These arrangements have challenged the authority, legitimacy, and prominence of the United Nations’ Framework Convention on Climate Change (FCCC) activities, which is, ostensibly, the bedrock of global climate politics. While these shifts have not provoked uncertainty and anxiety over the role and relevance of the FCCC and COPs, they have complicated the process of how countries decarbonise as well as the international context facilitating or obstructing their transition goals.

To be sure, the effects of fragmentation and pluralism transcend the climate issue. In trade, the increased use of regional and plurilateral trade agreements—beyond the World Trade Organization’s (WTO) ambit—is changing global trade (Hoekman & Mavroidis, 2015). Multi-stakeholder initiatives—combining state and non-state stakeholders such as civil society, academia, and businesses—now discuss cyber and digital issues (Savage & McConnell, 2015). One example is the Paris Call for Trust and Security in Cyberspace, which sets principles for how states should behave online (Paris Call, n.d.). Similarly, the Global Internet Forum to Counter Terrorism (GIFCT) unites the technology industry, government, civil society organisations, and academics to prevent terrorist activity online (GIFCT, n.d.). The Bill and Melinda Gates Foundation has transformed global health governance and funding and oversees several initiatives for infectious and chronic diseases (Youde, 2013). Security-focused minilaterals, both trilaterals and quadrilaterals—wherein countries engage on issues such as maritime security, supply chains, infrastructure, and climate change—are sprawling (Patrick, 2015).

What is causing this fragmentation? Strategic factors are of significance. The ongoing shift in the global balance of power and rising tensions over the international order are creating fissures. Rising and middle powers are showing signs of growing frustration with global institutions as well as the apathy of the United States (US) towards the World Health Organization (WHO) and the WTO, which allegedly do not advance American interests or perform credibly. As a response, these powers are resorting to create and back new mechanisms that they can control and wield (Hoekman & Mavroidis, 2021). Washington has also leveraged minilaterals to transcend its existing alliances inherited from the Cold War, particularly in Asia, that could fail, given the prevailing China-focused deterrence demands. What has followed has been a US preference for networks such as the Quad, Australia, United Kingdom and the US (Aukus), and related trilaterals to shape regional order (Tow, 2019).

Also important is the dissatisfaction of rising powers with the existing system and its fallow appetite for reform, which is precipitating new institutions. For instance, the Brazil, Russia, India, China and South Africa (BRICS) grouping, the New Development Bank (NDB), and the Asian Infrastructure Investment Bank (AIIB), which is dominated by Brazil, China, India, and Russia (Qobo & Soko, 2015). International organisations can be captured by a state, or a group of states, making that institution immune to change. Dissatisfaction with certain countries could lead to a situation where either an attempt to reform occurs or a push to withdraw altogether. A few dissatisfied states may create a new institution having realised that it appears to be the best option. Fragmentation is also the product of the democratisation of global governance. This has meant more non-state actors—both non-governmental organisations (NGOs) and businesses—participating openly with authority and knowledge to shape international rules and norms. All these trends have consequently affected climate governance (Florini, 2013).

Global climate governance in the 1990s was characterised by the UNFCCC’s centrality. That process still exists, but it is no longer the only game in town. The US’ 2002 exit from the Kyoto Protocol presaged an era of climate being dealt over arrangements beyond the UN (Lisowski, 2002). Three types of climate fragmentation matter. First, climate has become prominent in other international organisations, like the World Bank or WTO, which are incorporating climate considerations into their work (World Bank, 2022). Climate issues are entering remits like trade, security, and finance to resolve other sector-specific issues. For instance, trade rules can support or thwart the climate strategies of countries by prioritising trade interests over climate concerns. As per WTO rules, countries have an obligation not to discriminate against foreign products or goods made with higher carbon emissions, but doing so spurs decarbonisation (Epps & Green, 2010).

Second, countries that share specific interests and values are forming new climate clubs or using existing institutions—Group of 7 (G7) or Group of 20 (G20)—to address climate issues (Falkner, 2016). The 2007 major economies process on energy security and climate launched by the US was an early initiative to discuss climate between leading economies (U.S. State Department, n.d.). That process continued under US presidents Obama and now, Biden to catalyse climate action. Frameworks like India, Brazil, South Africa (IBSA), BRICS, and the Quad are also addressing climate change now (Paik & Park, 2021). Such clubs or minilateral initiatives provide countries with a more amenable, less contentious, and highly informal atmosphere to drive climate progress (Falkner, 2016).

Third, new forms of governance arrangements formed through partnerships, bringing governments, corporations, and civil society organisations together. These initiatives generally have a narrow focus such as climate financing (for example, the Investors Group on Climate Change) or technologies (for example, the Carbon Sequestration Forum and the Global Methane Initiative). Some frameworks, especially those led by non-state actors, focus on climate justice and accountability, raising awareness of the carbon footprint of countries and firms (for example, the Carbon Disclosure Project). Some initiatives and mechanisms form and operate autonomously, without connecting to the FCCC process, while others derive direct support. Nonetheless, all these institutional innovations—and more—point to an increasingly fragmented global climate landscape.

2. India’s Approach to Climate Fragmentation

India has been central to international climate politics since 1992. Arguably, no other developing country has had more direct influence on FCCC negotiations. India’s position—that developing countries have different responsibilities given historic carbon pathways—laid the foundations for a strategy that lasted nearly three decades: to prioritise equity and deflect climate commitments without adequate support (Nachiappan, 2019). That approach has changed as the FCCC changed, over time moving toward a regime that placed the onus on how all countries can reduce emissions individually and without constraint. The move to accept some voluntary targets at the 2009 Copenhagen Summit to reduce emissions is an important marker not just because of India’s policy shift but also because India would have likely had to engage with different actors to meet its climate pledge—to reduce the emissions intensity of its GDP by 20%–25% against 2005 levels by 2020 (Dubash, 2013). India has since gradually aligned to a regime that prioritises global climate action, not just in developed countries, since Paris in 2015.

Between 2010 and 2015, a new form of climate politics surfaced, one that did not emphasise legally binding commitments or strict differentiation between Annex I and II countries (Youdon & Bajaj, 2022). Instead, the discourse moved to finalise commitments that would be more voluntary, less-differentiated, and bottom-up, which places the onus to set and achieve their emissions reduction goals on countries themselves (Youdon & Bajaj, 2022). These moves coincided with a time when India acknowledged the perils of climate change to its economic growth and development. At the COP17, held in Durban in 2011, India’s environment minister Jayanthi Natarajan agreed that climate change amounted to a pressing and serious challenge for India but one that had to be tackled without compromising poverty reduction (2011).

Rhetorically, Indian officials reinforced equity and CBDR but sought ways to concurrently reduce emissions and advance development. Subsequent COPs from 2011–2015 saw developing countries trying to ensure the FCCC refrains from eroding CBDR while overriding pressures to contribute regardless of historic positioning. At the same time, equity considerations gained urgency. This culminated in the 2015 COP21 in Paris, where all countries signed an agreement that provided space and flexibility to shape and determine their climate contributions to reduce global emissions (Sengupta, 2019).

India’s climate diplomacy post-2015 is also shaped by geopolitical fissures, specifically US climate intransigence during the Trump administration’s utter disregard for the PA that created a vacuum in countries like China and India could fill. After 2015, China intensified climate interactions with the European Union (EU), the Association of Southeast Asian Nations (ASEAN), African nations, BRICS member states, Japan, and the Republic of Korea through the Second Forum on Carbon Neutrality Goals of China (Yangling, 2023). Like China, India’s climate diplomacy accelerated after Paris. FCCC efforts aside, India has discussed climate bilaterally with the US, United Kingdom, EU, Denmark, France, and Norway, among other partners, and through multilateral frameworks like the Brazil, South Africa, India and China (BASIC) Ministerial Meeting on Climate Change, G20, BRICS, and the International Maritime Organisation.

Going further, Delhi has also driven the cooperation of new climate institutions. For instance, the International Solar Alliance (ISA) with France, to accelerate global solar adoption, and the Coalition for Disaster Resilient Infrastructure (CDRI), to reduce the damage to critical infrastructures (Jayaram, 2018). Besides geopolitics, Indian officials have realised that engaging on climate multilaterally remains an indispensable track to mobilise requisite political, technical, and financial support for accelerating domestic climate action. With the PA, India’s national interests vis-à-vis climate widened—it began to accept some commitments that would yield ‘co-benefits’ or reduce emissions as well as advance economic growth. This approach opened the door to discussing climate across frameworks as other institutions and new frameworks spawned to address climate change.

India’s climate diplomacy has largely been shaped by geopolitics and institutional changes within the FCCC architecture. Strategic considerations have intervened from 2020 onwards. The worsening of great power tensions, particularly between the US and China, has compelled New Delhi to engage strategically on climate with partners like the US and France. The US-India climate partnership has been developing bilaterally and through mechanisms like the Quad, where both countries discuss climate with Japan and Australia. All Quad member states have pledged to focus their efforts on achieving COP targets, covering national emissions, and clean energy deployment (Roy, 2021). There is optimism that the Quad, given its loose informal structure, can gradually include other issues on climate resilience, preparedness, or adaptation, not just mitigation.

Similarly, India and France have established a Roadmap on the Blue Economy to conserve and sustainably use the oceans, seas, and maritime resources through greater scientific research, infrastructural cooperation, coastal zone management, and development of new technologies. Paris and Delhi have also established the ISA, which advances solar energy access, particularly in developing countries (Shidore & Busby, 2019). That US-China and India-China ties have deteriorated in the last few years has given both Washington and New Delhi—and others—opportunities to leverage climate to acquire geopolitical and geoeconomic influence over China. Decarbonisation will likely be inflected by geopolitical pressures as countries vie with one another for resources, capital, and talent. Climate diplomacy is one key terrain where such struggles, or climate realpolitik, will occur.

3. India’s Engagements Across Four Tracks

With reference to the seven case studies in this report, this section describes the drivers and objectives of India’s growing engagements with four cooperation tracks, including respective challenges faced: i) multilateral adaptation, ii) minilateral innovation, iii) trilateral bridging, and iv) bilateral expansion. Together, these four tracks reveal how India is navigating, shaping, and exploiting the fragmenting global climate architecture.

3.1 Multilateral Adaptation: Working Within the Existing Regime and Institutions

India’s first strategic track can be defined as multilateral adaptation or seeking opportunities to work within the UNFCCC regime and also through closer engagement with existing multilateral institutions, for example, the International Energy Agency (IEA). Even as India’s climate diplomacy engages proactively and enthusiastically in what is called “forum shopping and institutional proliferation,” it continues to respond to the “centripetal pull” of existing governance arrangements under the UNFCCC (Draguljić, 2019, p. 476).

As a developing country and rising economy, India may not always have been comfortable with the principles and drivers of the existing climate regime as incarnated in the UN-centric, multilateral, inter-governmental, and top-down approach to climate action. So far, India has contributed to the ongoing fragmentation of climate governance by establishing new frameworks around the FCCC, for example, by founding new climate institutions and joining minilateral and bilateral climate partnerships. Yet this should not be confused with India neglecting, ignoring, or undermining the FCCC regime. On the contrary, evidence points to India’s renewed climate activism and contributions that have strengthened the FCCC regime and other international institutions that remain central to climate politics.

The first policy brief, by Jhalak Aggarwal and Sumit Prasad, illustrates India’s multilateral adaptation track with a case study on how India has developed more than adequate capacity to comply with its FCCC commitments to the enhanced transparency framework (ETF). The authors review India’s largely positive track record on reporting as well as domestic policy innovations and the potential to develop an ETF that could be shared under the FCCC mandate with other developing countries. By developing this South-South climate track for ETF capacity-building focused on reporting, verifying, and reviewing performance, India could contribute to the growing urgency of a climate regime information system that has the ability “to respond directly to the information needs of developing countries” (Ghosh & Woods, 2009, p. 24).

The second policy brief refers to another form of multilateral adaptation: India engaging to partner with existing inter-governmental organisations that are developing a new climate-centric profile. This is the case of the IEA, whose growing partnership with India is analysed by Lydia Jayakumar, Hana Chambers, and Siddharth Singh in the second policy brief. Here, we see India keen to cooperate with an international organisation that was founded in 1974 by the Organisation for Economic Cooperation and Development (OECD) states to insure their energy security. Today, India’s climate diplomacy shows growing comfort in engaging with such traditionally exclusive institutions as they expand both their policy and geographic mandates to renewable energies and climate-centric partnerships, making it imperative to bring India on board. Five years after having joined as an associate member in 2017, India is now exploring full membership of the IEA. Beyond its interest in research, analysis, and information-sharing mechanisms, India is particularly interested in an energy security- and climate action–oriented partnership with the IEA.

3.2 Minilateral Innovation: Tailoring Climate and Geopolitical Cooperation

Alongside multilateral engagement, India has pivoted to create alternative climate frameworks. India’s institutional entrepreneurship—for example, in the form of the ISA or the CDRI—is based on the understanding that these initiatives accelerate the transition to a low-carbon economy by enabling clusters of states to focus efforts on specific sectors and geographies. Rather than competing or conflicting, these minilaterals largely complement, and even reinforce, multilateral climate frameworks. India thus presents its minilateral innovations, such as the ISA or CDRI, as its contribution to the global public good, especially for the Global South, while advancing its geopolitical and economic interests. They are seen to increase options for states to engage in à la carte cooperation, depending on their transition interests and requirements.

This is not an entirely new track in India’s global climate engagement. In 2005, it co-founded the Asia-Pacific Partnership on Clean Development and Climate together with Australia, China, Japan, South Korea, and the US; Canada joined at a later stage. Looking back at that embryonic climate club’s prescient—and controversial—policy mandate, one recognises several key interests that drive India’s minilateral climate track today: “create a voluntary, non-legally binding framework for international cooperation to facilitate the development, diffusion, deployment, and transfer of existing, emerging and longer term cost-effective, cleaner, more efficient technologies and practices” (Lawrence, 2007, p. 200).

Recent examples indicate that these principles, along with the innovative track, have been excavated and expanded in India’s global climate strategy. Set up in 2019, the CDRI is one such example where India has taken the initiative to develop new frameworks beyond—but still aligned with—the FCCC that bridge the climate adaptation interests of developing countries to their growing demands for infrastructure modernisation. India is also pushing for more informal minilaterals, which are evolving as climate-centric clubs for policy coordination. This includes the Leadership Group for Industry Transition (LeadIT), which India co-founded with Sweden, and, more recently, the Global Biofuels Alliance (GBA), which was co-developed with Brazil and the US.

The third policy brief, by Vyoma Jha, analyses the most prominent outcome of India’s minilateral innovation track, the International Solar Alliance (ISA), which was announced as part of India’s Paris commitments. Set up in 2017 as a treaty-based international intergovernmental organisation, it focuses on harnessing the potential of solar rich countries to accelerate climate action. While it could technically also be considered a multilateral or triangular initiative, even in its terminology as an alliance, the ISA reflects a sector-focused, single-country–led, hybrid nature in sharp contrast with the archetype of a regional organisation anchored in international law. Jha describes the ISA as a “deliberate instrument of India’s economic statecraft that syncs its economic priorities (finance and technology for clean energy transition) and national security (energy security) ones.” Yet, she argues, five years on, the ISA’s immense potential for global reach and transition impact remains hobbled by legal, institutional, and financial challenges.

The second minilateral trend in India’s global climate strategy is marked by a realisation that growing geopolitical fissures, marked principally by US-China rivalry, are raising the costs and risks for global governance and climate action. Whether trade, health, or technology, states are increasingly making choices based on geopolitical interests and balance of power calculations. India’s minilateral penchant has consequently grown to address increasingly complex policy sectors and narrowing time horizons for decision-making. For India’s external affairs minister S. Jaishankar, these small and sector-oriented cooperation frameworks are now an increasingly central track in what he calls India’s “strategies for an uncertain world” (2020). Nowhere is this more apparent than with regard to its climate engagements. Unlike in the past, when Indian diplomacy was often reluctant to link sectoral policy areas in global governance—trade, health, education, or even human rights—to geopolitical currents and constellations, New Delhi now appears comfortable and even keen to align and embed its climate interests with different geostrategic frameworks.

Critical mineral supply chains that are essential to the development of green technology are being weaponised with export restrictions and strategic reserves. Energy security remains a key factor shaping climate transition pathways and, consequently, the shape of the future world order. This explains why India has been increasingly comfortable engaging with a small cluster of partners to strategise and coordinate policies on climate, energy, green technology, or critical minerals. Most recently, this was once again apparent as India became the first developing economy to join the US-led Minerals Security Partnership (MSP).

In a similar vein, new minilaterals and cooperation frameworks, such as the Quad, are playing a growing role as climate action becomes a strategically competitive terrain driven by great power politics. The fourth policy brief, by Aparna Roy and Charmi Mehta, illustrates this track with reference to India’s engagement in the Quad’s working groups on climate, critical technologies, and infrastructure. While the authors conclude that the Quad has “not been able to generate a climate narrative so far,” their survey highlights India’s growing comfort with expanding the Quad’s ambit to consultation and coordination on various transition-related priorities, including the development of green technologies, assessment of critical minerals, establishment of clean energy supply chains, and fostering green shipping. The Quad Climate Change Adaptation and Mitigation Package (Q-CHAMP), announced by the four countries, is perhaps the best example of how India tethers climate interests to specific geopolitically driven minilaterals.

3.3 Trilateral Bridging: Positioning India as a South-South-North Climate Hub

India is reviving “triangular” development partnerships with a particular focus on climate in the Global South. This position was communicated well during the G20 presidency and the Voice of the Global South summit, both of which India hosted in 2023 (Press Information Bureau, 2023). New Delhi utilised these platforms to articulate and promote the image of an India willing to serve as a bridge between the Global North mitigation-focused agenda and the Global South’s particularised interests in adaptation. By expanding the South-South agenda of the 1960s and 1970s, India seeks to forge a new climate identity, presenting itself as a hub to co-develop green technologies and attract and deploy finance to accelerate global climate action.

India’s objective in these triangular South-South-North climate partnerships is two-fold, on two fronts. On the one hand, South-South climate partnerships are expected to i) generate better alignment of transition tracks among developing countries, especially with Brazil, Indonesia, and other rising economies; and ii) increase political and diplomatic support to enhance India’s legitimacy and leverage at multilateral institutions and global climate negotiations. On the other hand, South-North partnerships with India at the centre are expected to i) attract climate finance, technology transfer, and investors to use India as a hub for co-development and innovation; and ii) position India as a springboard for international climate finance for developing countries for access to emerging markets in India and the Global South.

The fifth policy brief, by Pooja Ramamurthi, explores India’s recent attempts at reviving triangular development platforms with moderate success and the opportunities to refocus these frameworks to generate affordable, sustainable, and scalable climate action solutions for developing countries. This track of trilateral bridging offers New Delhi opportunities to partner with the US, the EU, and some of its member states, as well as with Japan. The challenge in these trilateral tracks will now be whether India can go beyond its current focus on one-off projects in low-emission least developed countries and island states and generate partnerships that can accelerate decarbonisation policies in larger, middle-income countries in Asia and Africa.

3.4 Bilateral Issue Linkage: Connecting Climate to the Economy

The final two policy briefs in this report cover the fourth track in India’s global climate strategy: bilateral climate partnerships. As the 2030 targets loom large, India has developed and deepened a series of bilateral climate partnerships. In tandem with its push for reform at multilateral development banks (MDBs), and other international institutions to finance its transition, India is pursuing new green partnerships with select industrialised economies including the US, the EU, Germany, and Japan. More recently, the Gulf economies have emerged as India’s privileged climate partners: in 2023, the joint statement with the United Arab Emirates (UAE) on climate change as well as the Memorandum of Understanding (MoU) with Saudi Arabia on energy cooperation feature a growing emphasis on renewables, including hydrogen, and broader steps to accelerate the climate transition (Ministry of External Affairs, 2023).

These bilateral frameworks have seen India strategically link climate transition targets to other issue areas, including cooperation to generate investments for the energy, technology, infrastructure, and transportation sectors. At home, before domestic audiences, this track allows India to package climate change mitigation and adaptation as part of a larger economic agenda in line with its developmental imperatives for 1.4 billion people. Across the larger South and Southeast Asian regions, which house almost one-third of humanity, bilateral green partnerships with Global North countries offer India the possibility to assume the lead role of a regional hub for climate transition as a public goods provider. This also creates the potential to lift neighbouring countries such as Pakistan, Bangladesh, and Indonesia along with itself. Globally, these bilateral climate partnerships create a playing field where India feels more comfortable negotiating and setting the agenda transactionally. This reflects the still exploratory and inchoate nature of bilateral climate partnerships, which also indicates that India is in search of clearer quid pro quos regarding finance or market access as well as shorter policy implementation horizons.

However, with respect to the US-India Climate and Clean Energy Agenda 2030 Partnership, the sixth policy brief by Shayak Sengupta, Medha Prasanna and Peter Jarka-Sellers shows that it is not always distinguishable how India aligns these bilateral partnerships with climate targets. Having evolved over two decades in multiple phases, the US-India Agenda 2030 Partnership now focuses largely on clean energy cooperation with a dual technology and finance track. Yet it remains unclear if and how American technical assistance has spurred India’s energy transition as well as why beyond commercial exchanges there is still a “missing energy transition finance.” The authors recommend India adopt a more strategic approach “underscoring commercial, trade, and financial terms rather than focusing only on technology and development.” The renewed focus on hydrogen and nuclear energy cooperation holds promise in this regard.

The seventh and final policy brief by Axel Nordenstam further illustrates India’s limited strategic clarity and capacity to realise bilateral climate partnerships with the EU. Signed in 2016, the EU-India Clean Energy and Climate Partnership reflects New Delhi’s growing intent to let climate seep into various EU-India cooperation domains. Focusing on green and clean energy technologies, the 2023 establishment of the EU-India Trade and Technology Council (EU-India TTC) at the ministerial level is the most recent example of this climate convergence between Brussels and New Delhi (Delegation of the European Union to India and Bhutan, 2023).

The European Investment Bank’s growing profile in India also reflects how New Delhi is refocusing its bilateral track to look specifically at lending and financing institutions, including the US’ International Development Financial Corporation (DFC), France’s Agence Française de Développement (AfD), and Japan’s Japan Bank for International Cooperation (JBIC). Nonetheless, as Nordenstam cautions, it remains unclear how the EU-India partnership aligns with the growing number of green partnerships that India has been signing with individual EU member states, including France, Germany, Sweden, and Denmark. While both levels are not incompatible, there are growing areas of overlap and redundancy, which New Delhi must avoid.

4. Deepening Tracks: Priority Areas, Policy Coordination, and Institutional Capacity

The seven policy briefs in this report reflect four transition tracks in India’s global climate strategy. These parallel climate diplomacy dimensions include i) multilateral adaptation by working within the UNFCCC regime and existing institutions, ii) minilateral innovation by tailoring climate and geopolitical cooperation, iii) trilateral bridging by positioning India as a ‘triangular’ South-South-North climate hub, and iv) bilateral expansion by connecting climate to economic cooperation through new green partnerships. The authors examine specific challenges and opportunities and propose recommendations for India to pursue a more effective international engagement strategy across these four tracks.

This section takes a step back to i) take a holistic view of these recommendations, ii) draw lessons from our year-long exercise and consultations with the contributing authors, policy stakeholders, and experts in India’s climate diplomacy, and iii) propose policy options for India to increase foreign policy coordination and institutional capacity to better align domestic and external priorities towards its 2030 and 2070 targets. There are two broad takeaways from our exercise which warrant more attention from policymakers. Both of these are only marginally covered in our report but will be the focus of a specific research agenda at the Centre for Social and Economic Progress.

4.1 The Growing Centrality of Climate Finance and Private Sector Networks

Our first takeaway relates to the growing centrality that climate finance must play across all four tracks of India’s climate diplomacy, especially through MDBs and emerging private capital, asset owners, and industry networks. Achieving the Paris goal of 1.5°C will require at least USD 4 trillion for the development and deployment of clean technology by 2030 (Bordoff & O’Sullivan, 2022). Our report uncovers how India engages on climate with existing and emerging institutions. It is illustrative, but not exhaustive, of India’s efforts and campaign to work with other countries toward decarbonisation. India’s activities also extend across other organisations and frameworks tackling climate, focusing specifically on finance and investment.

MDBs, such as the World Bank and AIIB, are driving intergovernmental and global conversations to generate and deploy capital for climate purposes. Both the MDBs and other new climate finance cooperation frameworks are critical as they perform a range of different functions that may help India accelerate its climate transition and achieve its targets. They can mobilise and deploy more finance to India, reduce the cost of capital necessary to finance projects, enhance the creditworthiness of climate projects which will reduce risks and bring additional sources of capital to the table, and drive regulatory change by forcing domestic climate agencies to adhere to higher standards and rules vis-à-vis climate risk and transparency.

India will matter greatly to these discussions given its economic size, its growing contribution to carbon emissions, and its potential to absorb financing to accelerate the development of low-carbon energy through technologies as well as public and private investments. Financing aside, getting MDBs to transform their lending operations to focus more on climate will also require institutional change, which India will have to shape and influence (Ahluwalia & Patel, 2022). Beyond MDBs, India will also have to do more to engage the International Monetary Fund and other related green banking and green finance cooperation frameworks. For example, compared to China, Malaysia, Singapore, and other Asian countries, India remains largely absent from the work streams and task forces of the Network of Central Banks and Supervisors for Greening the Financial System (NGFS).

India’s climate diplomacy must also engage the private-sector– and industry-led climate finance networks from which it is currently largely absent. The Singapore-based Asia Investors Group on Climate Change (AIGCC), for example, which is part of the Paris Aligned Asset Owners initiative, has worked closely with Chinese and Japanese stakeholders to build benchmarks for green transition but its Indian engagements remain limited. Other such private frameworks warranting greater attention from India include Climate Action 100+, the Leadership Group for Industry Transition, and the Glasgow Financial Alliance for Net Zero (GFANZ).

4.2 The Growing Centrality of the Global South

The second takeaway from this exercise relates to the growing centrality that the Global South must play across all four tracks of India’s climate diplomacy, especially large developing as well as least-developed economies in Latin America, Africa, and Southeast Asia. The case studies in this report reflect that the majority of India’s long-term climate diplomacy has involved engagement with larger, wealthier industrialised countries, focusing on access to foreign technology innovation and financial investments. This track is in line with India’s traditional stance that countries historically responsible for emissions must invest more in the low-carbon transitions of emerging countries. More recently, India has begun to realise that to emerge as a climate leader, it must reposition itself and rethink its engagements to deepen partnerships in the Global South.

The motivations for this are twofold. First, there is a need for countries in the Global South to emerge as a singular voice to demand concrete financial and technical assistance from wealthier countries. India could play a critical role in enabling a united voice for the Global South if it follows through on its recent initiatives at the G20 summit in New Delhi. Second, India strategically wants to improve its influence across countries both in terms of market access as well as soft power. New Delhi’s current engagements with the Global South tend to be projects that are one-off, small-scale, and in least developed countries or small island nations. However, through its rapid deployment of renewable energy, energy efficiency, and smart agriculture initiatives, India has demonstrated how a large emerging economy can move to vigorously tackle climate change. It is now time for India to showcase these policies, technologies, and financing innovations as models for other large economies to emulate. This would mean engaging more broadly with the Global South, towards more ambitious and scalable projects that require building institutional capacity and active civil society networks and private sector investments. Second, India is one of the countries that are most vulnerable to the calamities of climate change. This means that India can build collaborative platforms to champion more funding for climate adaptation research and development through a shared sense of purpose with other vulnerable countries.

4.3 Policy Coordination and Institutional Capacity

The two takeaways above are examples of what India could use as benchmarks to regulate the level and focus of its engagements across the four tracks. However, such strategic assessments will be ineffectual unless accompanied by investment to strengthen institutional capacity at home.

India’s climate diplomacy has a long history of being obstructed by organisational differences and a lack of top-down decision-making processes. Aditya Pillai and Navroz Dubash thus argue that India’s climate policy is now defined as “climate nodes spread across government, stitched together by relatively weak and unstable cross-ministerial coordination and strategy bodies” (2021, p. 94). This is one of the characteristics of developments in recent years where international engagements have often informed and set domestic priorities with a lack of obverse capacity to set interests at home and then pursue them abroad. We thus have a “centralised but thinly institutionalised decision-making structure in the PMO [2] harvesting ideas for domestic action as part of a concerted effort to re-make India’s image on the world stage” (Pillai & Navroz, 2021, p. 103). The inter-ministerial Apex Committee for Implementation of Paris Agreement (AIPA), which was announced in 2020 under the chairmanship of the secretary of the Ministry of Environment, Forest and Climate Change (MoEFCC), seeks to address these gaps internally. But this will not solve the growing gap between India’s domestic policy priorities and the rapidly fragmenting and increasingly complex global climate governance landscape.

Bridging this gap requires designated officials with the mandate and expertise on global climate issues who can draft, manage, and coordinate India’s international policies on climate change. Other competencies could include tracking India’s progress vis-à-vis Paris commitments and giving sufficient attention to climate adaptation, not just mitigation. Working with international financing institutions (IFIs) and MDBs as well as the private sector to unlock climate financial flows, supporting clean energy innovation efforts bilaterally with key partners and through IFIs like the World Bank, and understanding the climate dimensions of sectors like aviation, biodiversity, health, and trade are other key competencies.

As evidenced in this report, the climate terrain is fragmenting. Advancing both bilateral and minilateral agendas requires close consideration of where bilateral interests intersect with those of other countries such as Japan, the European Union or developing countries in the Global South. Therefore, countries are now engaging strategically on climate matters and discussing various issues in climate clubs. Moreover, how India negotiates at COPs will increasingly have to comport with its climate-related activities within mechanisms like the Quad, the issues it focuses on through bilateral climate partnerships with the US, EU, and Japan, and its engagements with other developing countries on issues like renewable energy or infrastructure financing. Increasing coordination and building capacity will become crucial.

From playing a leading role in India’s climate diplomacy in the late 2000s, the Ministry of External Affairs (MEA) is now one of the few foreign ministries among major economic powers without a dedicated department focused on climate. The ministry’s United Nations Economic and Social (UNES) division only has a limited role that is mostly restricted to the UNFCCC. While the MoEFCC remains the lead ministry on all climate-related matters, it would benefit from closer policy coordination and greater delegation of responsibilities to the MEA. As per one assessment, in 2020, the MEA only had two personnel with listed climate responsibilities (out of a total of 62 across the Government of India) (Pillai & Navroz, 2021, p. 109).

We propose four measures to bolster India’s climate diplomacy and support the strategic reassessments proposed in this report across the four international tracks towards transition. These measures could expand institutional capacity to ensure that India’s international climate interests and priorities are safeguarded by organisational, financial, and expert human resources.
Appoint a prime minister’s special envoy for climate cooperation. This position was in existence between 2007 and 2010, held by former Foreign Secretary Shyam Saran. He played a central role in preparing India’s international negotiation stances and coordinating between actors at the domestic and international levels. Whether in a similar dual, international and domestic, substantive (maximalist) role or a limited external and mostly representational (minimalist) role, such a high-level, senior expert, and cabinet ministerial–ranked position would help India voice its climate interests internationally. This is in line with what is already done by other special envoys representing the top-most leaders of China or the US. While other countries have opted for a foreign-ministry level representative (in the case of Brazil and, until recently, the UK), the envoy’s direct link to the prime minister would confer greater standing abroad and legitimacy at home.
Institute a new division on climate cooperation at the MEA. In line with other divisions created in recent years for new policy arenas (for example, Indo-Pacific and new emerging and strategic technologies), the MEA could institute a new climate division focused on international climate cooperation, headed by a joint secretary and with dedicated staff from the Indian Foreign Services, and on deputation from other ministries and civil services.

Create a secretary-level position dedicated to climate diplomacy in the MEA. This
position would be at par with the four existing secretary-level positions instituted in the MEA (besides the foreign secretary) focusing on east, west, economic relations, and consular/diaspora affairs. This secretary-ranked position would also help its holder to define, coordinate, and implement India’s climate diplomacy in coordination with the MoEFCC—and at par with other secretary-ranked officials from the other nodal ministries involved in India’s climate transition efforts—from multiple policy angles that all require international engagements.

Establish a ‘climate wing’ at India’s principal diplomatic missions abroad to track and accelerate key bilateral climate partnerships. India’s missions traditionally have diverse sectoral wings to define, propose, and implement policy to strengthen bilateral relations. India’s missions in Washington DC, Brussels, and Tokyo, among its largest, have a variety of specialised wings including political, economic, defence and military, trade and commerce, and science and technology affairs. The MEA could institute a specialised climate wing at these missions to track and facilitate progress in implementing the growing number and mandate of bilateral green partnerships. These climate wings in key capitals could also lead outreach to MDBs and other multilateral climate institutions where India is often thinly represented if not absent. These wings should be staffed by both generalist officials from the Indian Foreign Service as well as other experts on deputation from different civil services and ministries, especially with training in international law, science, economics, and other disciplines that can bolster India’s analytical and negotiation power abroad.

5. Conclusion

India has spent the last few years expanding engagements and diversifying and decentralising its climate diplomacy. These moves reflect New Delhi’s adaptability and sophistication, straddling and balancing different institutional burdens. However, the focus now must turn toward taking stock and assessing how these multiple climate tracks add up to a coherent low-carbon strategy toward 2030 and 2070. This report reveals the drivers, activities, and implications of India’s behaviour across the globally splintering climate landscape. Some engagements like the Quad, US-India, and EU-India are tactical, driven by strategic considerations and interests, whereas others are political and developmental like FCCC, ISA, IEA, and various triangular efforts shaped by India’s positioning as a developing country keen to do its part on mitigation without sacrificing development concerns.

To achieve its 2030 targets with long-term strategic commitments that move toward the 2070 net zero objectives, India will have to emphasise both development concerns and politics at COPs, reform IFIs and MDBs to support developing countries as they decarbonise, and urge developed countries to not craft and execute climate transitions at the expense of all other countries who will lack the capital and technologies to undertake that effort. The international politics of climate change is increasingly moving toward key jurisdictions—the US, EU, and China—that are deploying large amounts of capital and instituting unprecedented industrial policies to decarbonise their economies and societies. The distortionary effects of these transitions for the rest of the world are immense. New Delhi must raise political awareness regarding the prohibitive costs of such transitions and urge these countries to collectively move toward a greener future while concurrently working with ‘like-minded partners’ through specific frameworks on issues like climate technologies and financing.

As the climate crisis unfolds, India has little choice but to engage across these four tracks and multiple frameworks. As mentioned above, India will have to continue emphasising annual COPs, which remain the political anchor underpinning global climate action. Bilateral climate partnerships, like with the US and EU, could become subject to political winds, with progress hinging on the pace and scope of the larger relationship and how they view India, either strategically or instrumentally. Such relationships are driven by interests, which means that they are vulnerable to domestic political shifts and changes that could reorient core interests. Thus, India must remain vigilant to protect its interests. These political currents also inflect specific minilateral partnerships, like the Quad, which are centred on mutual interests, so their importance might wane over time.

For bilateral green partnerships to triumph and sustain, India might have to reform its domestic climate sector and market to allow greater climate trade and engagement with the US and EU private sectors. Regulatory reform might have to flow from progressive bilateral climate engagements. Opportunities, however, abound on the triangular front and for India to link and connect developed and developing countries. Saddled by domestic political constraints, neither the US nor the EU can help craft an ambitious climate agenda for the Global South. India appears to be the natural partner that could support liberal, mostly Western, groups—like the Quad—as well as illiberal, mostly non-Western, coalitions—like the BRICS—to undertake climate-focused initiatives. Moreover, demands to build cost-effective and competitive climate-focused infrastructure will only increase across the developing world even though we currently lack the coalitions and arrangements that could drive that transition.

Our report, and the seven case studies herein, are a small contribution to a strategic ends-and-means exercise that will have to be expanded across the government. This exercise will generate granular insights on where India should expand, refocus, engage, or disengage and, at the same time, help decision-makers to set specific policy targets across an increasingly large and complex landscape of multilateral, minilateral, trilateral, and bilateral climate initiatives. The last two policy briefs, which illustrate the rising number of bilateral tracks with reference to the US and EU, are perhaps the best reflection of a growing urgency to differentiate between tracks conducive to short- and long-term targets.

On the one hand, bilateral climate partnerships are, in principle, easier to reach and faster to implement, offering a tempting tactical track for India to achieve its immediate 2030 targets. On the other hand, both old and new multilateral institutions offer a strategic track towards accelerating net-zero in the long run, the latest by or ideally before 2070. These large frameworks are generally more difficult to sustain; they require large political, diplomatic, and technocratic investments in complex negotiations based on consensus and compromise. Minilateral and trilateral frameworks further add to this challenge of prioritising between multiple and often contending tracks. India’s climate future will likely be shaped by the diplomatic capacity and choices it makes on these international trade-offs between short- and long-term policy horizons, leading to a series of layered engagements.

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The post Introduction: Tracks to Transition: India’s Global Climate Strategy first appeared on CSEP.

An increasingly competitive geopolitical context is fragmenting global climate governance and traditional modes of multilateral cooperation. Increasingly less centred on the United Nations Framework Convention on Climate Change (UNFCCC), India’s climate diplomacy has responded by proactively joining and creating new mechanisms to negotiate its low-carbon transition and accelerate climate action. Featuring seven case studies by Indian and international experts, the report assesses India’s posture across four principal tracks: i) multilateral adaptation, by working within the UNFCCC regime and existing institutions; ii) minilateral innovation, by tailoring climate and geopolitical cooperation; iii) trilateral bridging, by positioning India as a “triangular” South-South-North climate hub; and iv) bilateral expansion, by connecting climate to economic cooperation through new green partnerships. The report examines how this policy diversification and innovation is throwing up new opportunities and challenges, especially the need for a comprehensive strategy to balance multiple and often also overlapping international tracks towards a low-carbon transition. It maps both what has been done in the past as well as the avenues towards a comprehensive climate strategy built on greater policy coordination and expanded state capacity for India to engage externally. The report offers research-based, actionable foreign policy options to accelerate India’s green transition and facilitate the road towards its 2030 commitments and its 2070 net zero target.

The post Tracks to Transition: India’s Global Climate Strategy first appeared on CSEP.

As the coronavirus pandemic emerged in Wuhan and swept across the world in early 2020, a few Twitter and Facebook accounts managed by Chinese nationals and entities affiliated with the Communist Party of China surfaced, seeking to shape and control the narrative, channel propaganda, and contain criticism. Since then, Chinese social media entities have amplified the official Chinese version of narratives surrounding Covid-19 and related issues in addition to propagating information on broader Chinese interests such as the Belt and Road Initiative. Senior Chinese diplomats have responded strongly to criticisms about ‘wolf-warrior’ content and commentary, though by some accounts in 2022, there appears to be a slow shift away from aggressive assertions on social media. What is global in nature, looks different domestically in nurture. This chapter looks at the emergence and evolution of key social media accounts aligned with, and within Sri Lanka, amplifying the policies of the Communist Party. It helps demonstrate the pivotal role played by social media in intensifying pro-China narratives in a world where Beijing has ambitions of shaping global norms to secure its interests. A quantitative study of domestic propaganda production, along with qualitative research, reveals the Chinese government’s long-term ideological goals as well as shorter-term objectives in this regard. The online operations, which mirror earlier offline initiatives to disseminate the Party’s propaganda, show high levels of coordination, strategic planning, and execution. The sustained dissemination of pro-China narratives, and the existing and proposed investments in Sri Lanka’s telecommunications infrastructure, including 5G, warrant extensive scrutiny and urgent policy review.

Introduction

Noting that while some aspects of Chinese media campaigns “are in line with traditional public diplomacy”, a Freedom House report released in 2020 cautioned that “many others are covert, coercive, and potentially corrupt” (Cook, 2020). The report went on to state that “the strategies being pursued have long-term implications, particularly as the Communist Party of China (CPC) and its international affiliates gain greater influence over key portions of the information infrastructure in developing countries.” In Sri Lanka, for instance, a comprehensive media report by journalist Bhavna Mohan (2020) revealed the hydra-headed nature of China’s influence operations. Among other initiatives, Mohan observed that the grooming of Sri Lankan journalists had gone on for well over a decade. Offline platforms such as the Sri Lanka-China Journalists’ Forum have existed since the early 2000s (Sri Lanka-China Journalists’ Forum, n.d.). The forum’s president, Nalin Aponso, stated that the Belt and Road Initiative (BRI) would facilitate media development in Sri Lanka (Ping, 2018). More recently, the forum, along with other organisations in Sri Lanka affiliated with China, have endorsed (Xinhua, 2020) the controversial national security legislation in Hong Kong (BBC, 2022).

‘I’m Sheng Li’, a Facebook account established in 2020 and studied in this chapter, was a featured author in the Sunday Observer newspaper as early as 2014 (Li, 2014). Li’s review of a book by Chandana Thilakarathna complemented Thilakarathna’s review of a book by Li a year prior (Li, 2013). Both articles spoke exceedingly favourably of the role, reach, and relevance of China Radio International (CRI) in Sri Lanka, which is the Chinese state media associated with propaganda (Lin, 2015).

I study propaganda directed at Sri Lankan social media users in the context of a growing body of research looking at China’s disinformation campaigns (Twigg & Allen, 2021). In 2012, almost a decade before “wolf-warrior” diplomacy came to be recognised as a weapon China employed widely in pursuit of its strategic objectives, an article published on the online civic media platform, Groundviews, flagged concerns regarding Beijing’s pervasive telecommunications investments in Sri Lanka (Hattotuwa, 2012). These campaigns need to be understood against the backdrop of highly problematic Chinese cybersecurity laws (Harris Bricken, 2019). Chinese disinformation, beyond social media (Elliott & Christopher, 2021), increasingly targets audiences in the United States (Timberg & Dou, 2021). In addition to similar initiatives by Russia (Kendall-Taylor & Shullman, 2020), Chinese propaganda is considered a growing threat to democracies (Cave & Wallis, 2021).

Concerns over disinformation aside, in 2020, there emerged a unique argot known as “wolf warrior diplomacy” among Chinese diplomats on social media (Westcott & Jiang, (2020). Examples include referring to the Canadian prime minister as a “running dog” (Rae, 2021) and other more egregious tweets (Zeng, 2020). Echoing this pugilism, the Chinese Embassy in Sri Lanka also tweeted exceptional comments (and imagery) against the former US secretary of state soon after an official visit to the country (Farzan, 2020). However, a focus on the appropriation of social media as a bully-pulpit to subvert diplomatic norms only distracts from China’s more sustained propaganda operations on social media, including those in Sri Lanka.

Chinese propaganda in Sri Lanka

Concerns around Chinese propaganda in Sri Lanka are not unwarranted. But they must be considered in the larger context of certain developments since October 2014, when The Sunday Times reported that former President Mahinda Rajapaksa’s government had imported surveillance technologies from Huawei (Hattotuwa, 2020d). At the speaker’s request in 2017, China gifted laptops for all members of parliament to use (Daily FT, 2017). Then, after the Easter Sunday terrorist attacks in April 2019, former President Maithripala Sirisena requested his Chinese counterpart to provide social media surveillance technology to the country (M. Fernando, 2019). Media reports also recorded “over Rs 5 billion worth of military support in terms of software and other surveillance equipment” (S. Fernando, 2019). All of Sri Lanka’s police communications began to increasingly rely on Chinese infrastructure (News Wire, 2021). Prior to this, in 2018, a Chinese digital forensics company trained Sri Lankan intelligence officials and others in surveillance technologies (Australian Strategic Policy Institute, n.d.), pitched as integral to the implementation of the BRI (Wayback Machine, 2019). Sri Lanka is among the countries that have accepted vital communications infrastructure gifted by China (Thomas, 2018). However, the lack of domestic privacy and data protection legislation at present raises legitimate fears around surveillance targeting of citizens by the state and third parties, including foreign governments ((Senaratne, 2020; Human Rights Watch, 2020).

These considerations aside, in April 2021, President Gotabaya Rajapaksa stated that the country “has prioritised developing relations with China and ‘firmly supports’ China’s positions on issues concerning its core interests” (Srinivasan, 2021). Before the president’s assurances, Sri Lanka’s foreign secretary Admiral Jayanath Colombage flatly denied any evidence of genocide or detention camps in Xinjiang (Xinhua, 2021). China considered Mahinda Rajapaksa an “old friend” (PTI, 2020). The Chinese ambassador publicly congratulated Mahinda Rajapaksa and conveyed greetings from Xi Jinping after a major constitutional crisis in late 2018 (Rajapaksa, 2018; Pillalamarri, 2018). China was one of a handful of countries that accepted Mahinda Rajapaksa’s unconstitutional appointment (Hattotuwa, 2018a), which was eventually rejected by Sri Lanka’s Supreme Court (United Nations, 2003).

For well over a decade, Sri Lanka’s clear political and policy orientation towards China, which has continuously accelerated since the Covid-19 pandemic (Imran, 2021) and the general election in August 2020 (Fernando & Shah, 2020), has provided the background for studying the social media content in this chapter. The data for this chapter was gathered using Facebook’s Crowd Tangle tool (Crowd Tangle, n.d.). The engagement data is accurate as of May 5, 2021. China’s offline engagements with select journalists pre-date, by decades, its online and social media initiatives. The grooming of journalists informs the production of content in traditional media, which through partial focus or strategic erasure, deflects a critical gaze and shifts public perceptions. However, the strategic cross-pollination of online and offline initiatives is complicated and beyond the scope of this brief study.

Facebook accounts of interest

Eight Facebook accounts were selected for this study, building on the initial research frameworks that I had published on Twitter (Hattotuwa, 2021b). Though active offline, Sri Lanka-China Journalists’ Forum does not have an official Facebook or Twitter account. Among several other accounts active on the platform in Sri Lanka, including those ostensibly linked to the Confucius Institute, the Association for Sri Lanka-China Social and Cultural Cooperation, Cheena Sinhala Handa, Seda Mali, Youyou Zhang, Waruni JZ, I’m Sheng Li, Sunimali, and Rasika Liu were chosen for the study. These accounts were chosen after an initial tweet thread looking into coordinated posts on Facebook (Hattotuwa, 2021c), as well as accounts running sponsored campaigns (Hattotuwa, 2021a). Facebook profiles linked to these seed profiles, through the related accounts feature of Facebook, or through the cross-publication of posts, were also studied.

At the time of writing, not a single personal profile studied in this chapter were labelled as ‘China state-controlled media’ by Meta (Facebook, n.d.a). All of the personal profiles in this study are now labelled by Meta as “partially or wholly under the editorial control” of the Chinese government, based on Meta’s “own research and assessment against a set of criteria developed for this purpose”. Meta’s policy goes on to note that the platform holds “these Pages to a higher standard of transparency because we believe they combine the influence of a media organisation with the backing of a state.” That Meta, subsequent to and independent of this research, flagged these accounts as state-controlled, reaffirms the validity of their selection for study.

There are significant contradictions between the content posted, the ostensible account holder, and the page classification on Facebook. For example, the categorisations of Rasika Liu as an NGO, Seda Mali as a local business, and two accounts as entertainment websites bear no relation whatsoever to the content published or the respective account holder’s profile. The individual accounts are tailored to Sri Lankan audiences, including their naming conventions and identity. The content and commentary are almost exclusively in Sinhala, with no statistically significant amount of information present in either English or Tamil, indicating a sophisticated media strategy around end-states linked to the capture, and retention of attention and engagement by Sinhalese audiences, who constitute the majority ethnic group in the country.

Seven of the eight accounts studied were created in the second half of 2020. Of those seven, five were created in August that year. Two accounts, Waruni JZ and I’m Sheng Li, were created on the same day. These accounts feature the same number of page administrators based in China and another undisclosed location. Given that Facebook (and Twitter) are blocked in mainland China, the location of so many administrators in that country calls for scrutiny. Unfettered access to the platform is unavailable to Chinese citizens. This raises the question of how these accounts (without any disclosure of ties to the Chinese government at the time, through state-controlled media labels (Facebook, n.d.a) can post freely and publicly, including from Beijing and other locations in China.

In under five months, from August 2020 to January 2021 (Hattotuwa, 2021b), the accounts studied showed a significant increase in followers (Hattotuwa, 2021b). This can be attributed in part to the paid page and post promotions (boosts) active on Facebook, first detected in Sri Lanka by journalist Maneshka Borham (Hattotuwa, 2021a ) in late January 2021. All the individual accounts examined primarily feature profiles of women who are young and conversant in Sinhala. Unfortunately, however, Facebook does not provide independent researchers with an accurate understanding of an account’s reach (Facebook, n.d.b). In the absence of this data, available only to those within the company, the number of followers provides a proxy indicator of an account’s potential audience and, thus, influence. Since January 2021, Facebook has focused on the number of followers as the primary metric for page engagement (Awan, 2021).

The significant increase in followers is evidence of an expanding audience on Facebook for these eight accounts, growing at pace. By engaging with the content published by these accounts (independent of paid promotions), the followers organically promote pro-China content to their own friends, extended family, colleagues, fans, and followers.

In all, the eight accounts have a total of over 1.5 million followers. As one of the older accounts and given the nature of its output, Cheena Sinhala Handa unsurprisingly accounts for around 1.2 million followers of the total figure. The six accounts created after August 2020 account for over 262,000 followers. When the growth of followers is visualised as time-series data, Seda Mali shows consistent growth from early August 2020. However, the rest of the accounts show significant growth only after January 2021, around the time paid promotions for these pages (and posts featured on them) started in Sri Lanka.

The growth trajectory of Waruni JZ is highly unusual and warrants emphasis. In the week of September 13–19, 2020, this account lost 75% of its followers, then regained some during the last week of December 2020, which resulted in a noticeable growth. However, all gains were wiped out in the first week of January 2021, and the number of followers dropped to zero. Just a week after that, the account gained around 46,800 followers. This rapid, pendulum-like swing in the number of followers is highly unusual, both in the sudden loss and rapid, significant gain. Available data is insufficient to determine the reason for these dramatic shifts but raises questions around the authenticity of followers and how they are generated (Winters, 2021; Hatmaker, 2020). The sustained output of the accounts has resulted in significant engagement with followers. From August 2020 to early May 2021, an average of two posts a day were published by all the accounts, driven by Cheena Sinhala Handa’s average of over 10 posts a day. During the study period — just over nine months (August 1, 2020 to May 2, 2021) — there was an average of 3,400 weekly interactions across all pages. This engagement included the sharing of content and comments.

Disaggregated by type, the content across accounts heavily favours photos. Out of over 4,000 posts studied, nearly 3,100 include photos. About 475 posts feature native videos on Facebook, and over 200 have live videos, streamed and archived on the platform. Videos and photos are the most popular content on Facebook in Sri Lanka (Hattotuwa, 2018b). The media strategically selected by all the Chinese accounts is geared to organically generate maximum virality, independent of paid promotions and boosts. What is present and promoted is as revealing as what is absent. Human rights, democracy, privacy, debt servicing, and censorship, for example, are issues and perspectives that are absent from these accounts. If these issues are even as much as hinted at, it is through a lens that promotes the Chinese government’s partisan and critical perspectives.

The videos across accounts regularly promote issues related to:

1. The Covid-19 vaccination (and China’s advances and gifts to other countries in this regard)
2. Knowledge of Sinhala or attempts to learn the language
3. Travel around mainland China
4. Ordinary life in Chinese cities, including Beijing
5. Technology (including AI) initiatives and parks
6. Agriculture in China
7. Infrastructure including model villages and other large-scale development initiatives related to
   housing and transportation
8. Buddhism and Sinhalese cultural events
9. Youth perspectives that are partial to China
10. Fashion (including the draping and selection of saris)
11. Dance and music videos in Sinhalese
12. Sampling various food from China and Sri Lanka
13. Lifestyle videos highlighting China’s commerce, industry, and commercial spaces like shopping malls.

In comparison, although the Indian High Commission’s official Facebook page also features several videos (India in Sri Lanka [High Commission of India, Colombo], n.d.), poor production quality, paltry engagement, and sporadic uploading indicate significantly different motives from the Chinese accounts. Over nine months, 476 videos published across the Chinese accounts generated 11.47 million views and 1.58 million shares. In the same time, the Indian High Commission’s official Facebook page published 13 videos, prompting just 6,000 views and 2,600 shares. Similarly, the US Embassy in Sri Lanka’s official account posted 16 videos in the same months, garnering around 25,800 views and 2,100 shares. Official accounts of the Canadian, Australian, and British High Commissions on Facebook, combined, produced just 111 videos, eliciting a total of 34,700 views and 14,200 shares. Evidently, the number of accounts employed, production value, paid promotions, sustained volume of content production, and significant engagement generated by Chinese Facebook accounts are unmatched by any other diplomatic account in Sri Lanka.

A look at the top five posts

The Association for Sri Lanka-China Social and Cultural Cooperation, Cheena Sinhala Handa, Seda Mali, Youyou Zhang, Waruni JZ, I’m Sheng Li, Sunimali, and Rasika Liu altogether generated just under 1 million interactions in the period of study. The top five posts (in terms of engagement) were made by two accounts, Cheena Sinhala Handa and Waruni JZ.

In addition to the significant engagement on the original post and content producer’s Facebook account, these posts — all videos — were shared by nearly 130 other accounts on Facebook. A study of the nomenclatures of accounts sharing the videos surfaces names invoking the Sri Lanka Podujana Peramuna (SLPP) which was the ruling party at the time and linked to the Rajapaksas, Sinhalese culture, and Buddhism. Many pages are a part of the junk news and gossip page ecology on Facebook, which is highly influential in shaping perspectives in Sri Lanka (Hattotuwa, 2019a). The total number of followers across pages that share original posts are in the millions. Reposting aids the amplification of content originally posted to the Chinese accounts in addition to paid promotions on Facebook that boost the reach of pages to existing followers and those that the platform determines may be interested.

To this end, it is instructive to compare the engagement figures of just the top five posts from two accounts with engagement data from the official Facebook accounts of the Indian, Australian, British, Canadian, American, and European Union diplomatic missions in Sri Lanka during the same time. Combined, these six accounts posted 148 videos, prompting just 205,900 views,[2] which is less than the reach of a single video posted by Cheena Sinhala Handa. Altogether, the accounts generated just 12,300 shares, which is less than a single video by Waruni JZ. Furthermore, the total of 12,666 comments and 144,600 reactions across these six diplomatic mission accounts clearly indicates that the appeal of, and engagement with, content from Chinese accounts is, by order of magnitude, far greater.

Hidden patterns

The activity of Chinese accounts on Facebook shows distinct signs of coordination and editorial oversight by a single, central authority. Disaggregating around 4,000 posts from the 9 accounts, a pattern emerges. Each day, three distinct peaks appear, showing when the highest number of posts are published on Facebook—one around 8 am and the other between around 12 and 1 pm. The third peak is around 5 pm. This unerringly rhythmic, sustained content production, geared to coincide with rush-hour commuters and lunch breaks, is a strategic choice. “The media day”, a term crafted by French sociologist Henri Lefebvre in 1984, speaks to how media content, published in an intentional and sustained rhythm, results in specific modes of engagement by consumers.

What can be studied as a new circadian rhythm is present elsewhere in Sri Lanka’s Facebook ecology and is strongly associated with the instrumentalisation of the platform.[3] In “The Permanent Campaign & Its Future”, Norman J. Ornstein and Thomas E. Mann (Brown, 2002) speak about political technologies that manipulate public opinion. Written 20 years ago, Ornstein and Mann’s thesis finds new relevance in the study of social media’s potential for propaganda. The sustained and systemic production of online propaganda echoes what Raymond Williams called, in the 1970s, a “planned flow” (Johnson, 2013). Williams noted that the conflation of independent journalism and advertising would ultimately result in greater engagement with content among a captive audience. Consumers would eventually stop caring about what they read, and consumption would become an end in itself. This uncritical approach to media engagement is now instrumentalised (by Chinese and other political entrepreneurs) on Facebook to promote propaganda under the guise of light entertainment or informative videos.

When studied across several accounts over time, Facebook recognises this pattern as a strong indication of coordinated inauthentic behaviour (CIB) (Facebook, n.d.c), which is disallowed on the platform. However, from the data studied for this chapter, this pattern is true for just one page — Cheena Sinhala Handa — which is the most prolific of the accounts reviewed. Figure 4 visualises data from just over 2,900 posts by Cheena Sinhala Handa and disaggregates the content by type. Adding to what was highlighted earlier in this chapter, the significant use of photos at specific times suggests the intentional production of content that is geared toward generating maximum engagement.

Figure 1 presents word clouds based on the text in each account’s posts. The Association for Sri Lanka-China Social and Cultural Cooperation and Cheena Sinhala Handa accounts have distinct word cloud patterns, pegged to each account’s focus and mandate. For example, Cheena Sinhala Handa, of late, emphasises vaccinations (in the context of the pandemic). Meanwhile, Seda Mali, Rasika Liu, I’m Sheng Li, Waruni JZ, and Sunimali all feature almost exactly the same words, which is highly unusual because these accounts do not explicitly or overtly show any inter-relationship, or subscription to a shared editorial framework. The emphasis (in Sinhala) on beautiful things, events, followers, ordinary people, daily and birthday greetings, ascertaining how followers are doing, and a uniformly deferential, polite turn of phrase overwhelmingly distinguishes the text used in all the posts. The resulting lack of significant diversity in discourse or individuality, coupled with the near pitch-perfect symmetry in Sinhala phrases used, strongly suggests strict editorial control and a high degree of coordination in framing strategic issues across accounts that do not show robust offline or online relationships with each other.

Conclusion

The eight Facebook accounts studied for this chapter highlight the degree to which Beijing instrumentalises the platform to promote propaganda in Sri Lanka in a highly sophisticated manner, with output and followers increasing at pace. Unlike Twitter, Facebook [4] provides Beijing with a direct vector, with significant potential to both attract and retain the engagement of young Sinhala Buddhists in Sri Lanka. Significant tropes featured in the Chinese accounts indicate Beijing’s propaganda model of “strategic patience” (Vilmer & Charon, 2020), where the goal is to shape public perceptions over the long term, not necessarily through coercion or censorship, but via a menu of native content designed to attract, entertain, inspire, or distract from critical questioning. The potential of this persuasive strategy is evident in the data signatures studied, where output is crafted with exceptional attention to tone, time, substance, engagement patterns, viral frames, and a grounded, conversational Sinhala expression that appeals to mainstream Buddhist sensibilities. A high degree of coordination between accounts, entirely hidden unless studied at scale, along with the large number of page administrators located in China, suggests that individual profiles mask a sophisticated propaganda machinery that determines what is posted, through which account, when, and how.

This research recommends urgent domestic policy review and parliamentary oversight of significant Chinese investments and initiatives. It also suggests sustained regional dialogue around the implications of online propaganda for national security, democratic potential, and electoral integrity. Finally, the design, execution, and impact of Beijing’s multi-platform, multi-media, vernacular, and country-specific propaganda model should be more closely studied, including by the diplomatic community. Much of the existing research looks at how Chinese disinformation impacts the West or at issues around cybersecurity. [5] This is vital and valid for those in Europe or the US, but it is less useful for understanding propaganda vectors in countries integral to China’s BRI in South and Southeast Asia. Amplified by the Covid-19 pandemic, this region, characterised by the complex interplay of demagogy, domestic politics, encroaching Chinese interests, and propaganda increasingly being spread via social media, is ripe with authoritarian entrenchment (Khalil, 2020).

As an archetype of this geo-political and socio-technological landscape, Sri Lanka presents an interesting case study in how, over the short term, policies favourable to China, and, in the long term, public perspectives partial to Beijing, can be influenced through well-disguised propaganda disseminated over social media.

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The post Patterns and Trends in Chinese Propaganda on Facebook in Sri Lanka first appeared on CSEP.

This chapter analyses the evolution of the Communist Party of China’s external messaging targeting Indian audiences on traditional and new media platforms, including prominent, global social media, during the recent India–China border crises in 2017 and 2020. Following a push by President Xi Jinping in 2013 to “tell China’s story well”, the country’s state media outlets have launched ambitious efforts to boost China’s messaging among Indian audiences. These efforts include advertorials published in Indian newspapers, fellowship programmes to host Indian journalists in China, and reaching out directly to Indian audiences through global social media platforms such as Twitter and YouTube. By embracing new media platforms, the Communist Party is now able to reach out to audiences in India directly as well as insert itself into domestic political debates—as seen during the border crises. This media strategy involves close coordination between traditional and new media. While the latter largely follows the narrative set by the traditional Party media, it has been given some space to refine the message to appeal to a foreign audience. However, broadcasting the official message abroad has invited new challenges for China, as it wrestles with the tension between domestic propaganda goals aimed at building support for the Party at home and external-messaging efforts to boost its image abroad. As China’s messaging efforts during the crisis in Doklam in 2017 and following the Galwan Valley clash in 2020 showed, resolving this tension between domestic and foreign audiences remains a key challenge for the nation.

Introduction

New media has emerged as a powerful platform for the Communist Party of China’s (CPC) messaging, both at home and abroad. This chapter explores how global social media platforms are being used to amplify the message of traditional Party media outlets in the context of India–China relations, specifically, during the border crises in 2017 and 2020. Global social media platforms such as Twitter have become important information battlegrounds to sway narratives and influence public opinion.

One such battle played out on social media during the India–China border crisis of 2020, particularly in the wake of the clash on June 15, 2020, in Galwan Valley, which marked the most serious violence on the India–China border since 1967. Still, the 2020 crisis was not the first instance where social media played a prominent role. The 2017 border stand-off in Doklam, along the India–China–Bhutan trijunction, was a seminal moment for China in testing out a new information strategy. As the PLA’s Western Theater Command put it following the stand-off, the strategy combined radio, TV, newspaper, and social media messaging to push China’s narrative at home as well as abroad (Tu & Ge, 2018).

This chapter will assess the evolution of China’s external messaging aimed at Indian audiences by examining its strategy across traditional and new media. By ‘traditional’ media, this chapter refers to Party-run newspapers and television. ‘New’ media refers to the use of digital platforms. However, the two categories are not distinct, considering that the most prominent users of Twitter and Facebook in China are Party-media organisations that are permitted to use platforms that are otherwise banned in China.

By embracing new media platforms, the Party is now able to reach out to audiences in India and around the world directly, which has enabled it to insert itself into domestic political debates. This evolving media strategy involves close coordination between traditional and new media, wherein the latter largely follows the narrative set by traditional Party media, but it is given some space to refine the message to appeal to a global audience.

Delivering domestic messaging to foreign audiences has created new challenges for China, as it wrestles with the tension between domestic propaganda goals that are aimed at building support for the Party at home and external messaging efforts to boost China’s image abroad. These two goals, as the India–China border crises showed, are not always aligned. Resolving this tension between domestic and global audiences remains a key challenge for China’s external messaging.

Telling China’s story well

The increasing importance of social media in the context of India–China relations was felt during the 2017 stand-off in Doklam. However, the rise of social media in China had dramatically altered the media landscape years before Doklam with the launch of the microblogging platform Weibo by the Internet giant Sina in 2009—the same year that China banned Twitter and YouTube in the aftermath of the riots in Xinjiang (July 2017). This was followed by the launch of WeChat by Tencent in 2011, which is an extraordinarily broad platform that spans instant messaging, a Facebook-like social network, along with an online payment system and e-commerce.

Social media was initially seen as a threat to the Communist Party’s monopoly over information, allowing Internet users to post information that would ordinarily be censored by state media, triggering a tug-of-war between Internet users and the state. The CPC, however, became increasingly adept in asserting its control over this new domain through a combination of censorship and the use of sophisticated approaches to steer the conversation (Qin, Strömberg & Wu, 2017). Chinese social media platforms emerged as a useful outlet for authorities to not only monitor local issues and protests and gauge public sentiment but also to disseminate propaganda through a layered apparatus, comprising official government accounts, official media, individual journalists, and a network of tens of thousands of pro-government accounts that are sometimes disparagingly called the ‘50 cent party’ in China, as that is the amount they are supposedly paid per post (Qin, Strömberg & Wu, 2017).

In this new social media landscape, the focus of China’s information strategy evolved from merely restricting information that is deemed sensitive to a more sophisticated approach of ‘guiding public opinion’. This applied to both internal and external messaging. As Xi Jinping put it in an ideology work conference in 2013, China’s media needed to prioritise “telling China’s story well” while “meticulously and properly conducting external propaganda, innovating external propaganda methods, working hard to create new concepts, new categories and new expressions that integrate the Chinese and the foreign, telling China’s story well, and communicating China’s voice well” (Bandurski, 2020).

China’s external messaging in India: Traditional platforms

The 2013 ideology work conference was a major turning point in China’s external messaging efforts, heralding changes in China’s external propaganda on traditional as well as new platforms. With a more ambitious plan backed by a flood of funding, the conference accelerated traditional Chinese broadcasters’ efforts to go global. Two new global hubs of CGTN or the China Global Television Network—a rebranding and expansion of China Central Television’s English-language channel—were launched in Kenya and the United States.

China’s ‘big four’ Party media—China Central Television (CCTV), People’s Daily (includes Renmin Ribao, the flagship Chinese newspaper; People’s Daily, an English-language website, and the Chinese and English editions of Global Times, or Huanqiu Shibao), Xinhua News Agency, and China Radio International (CRI)—all play key roles in external messaging. CGTN has had to rely on social media platforms such as YouTube and Facebook to grow its footprint as it faces regulatory hurdles in securing broadcast rights in many markets, for instance, in the UK and Australia (Tobitt, 2021). The channel is not widely available in India as well. However, it has grown its footprint on YouTube and has 2.82 million subscribers as of May 2022 (CGTN, n.d.). As part of its effort to go global, as well as to reach more Indian viewers, CGTN has hired international editors to refine its message and has sought out Indian journalists to help further its reach in recent years. As of August 2022, the channel employed at least four senior Indian editors in its headquarters in Beijing, all of whom had previously worked on Indian television channels.

CGTN is not alone in recruiting Indian journalists. China Daily, the official English-language newspaper of the State Council of the People’s Republic of China, employs at least three senior Indian editors. Journalists from India have been sought not only for their English-language skills but to help engage an Indian audience, which has emerged as the most significant source of traffic for English-language Chinese media after the US. [1] China Radio International (CRI), the most prominent official radio station, operates Hindi, Tamil, and Bangla stations, which employ Indian journalists. According to CRI, which also runs a network of listeners’ fan clubs in India and arranges for listeners to travel to China, its Tamil station is the most popular among its 53 international channels. The content focuses mostly on cultural issues, such as the history of China and the historical and civilizational links between India and China (Krishnan, 2013).

Another part of the effort to “tell China’s story well” is China’s purchase of advertorials in major foreign newspapers around the world, including those in India (Lim & Bergen, 2018). In 2020 and 2021, China Daily purchased several advertorials in Indian newspapers. Labelled ‘China Watch’, the advertorial included several pages of content that resembled news articles. A small label saying ‘advertorial’ in the corner of the first page was the only marker of it being paid content (Bagree, 2021; Deb, 2021). The Chinese Embassy in India also purchases advertorials in major Indian newspapers separately, a practice that predates the more recent launch of ‘China Watch’, to mark political anniversaries or showcase examples of China’s development, such as a 2019 advertorial headlined “Nathula: A Gateway of Friendship Where Hearts Meet” that detailed the efforts made by Chinese authorities to welcome Indian pilgrims on the Kailash pilgrimage as well as “Tibet Day” supplements to mark the anniversary of what China calls its ‘peaceful liberation’ of Tibet in 1951.

In terms of shaping Indian newspapers’ coverage of China, the most significant initiative in recent years was the launch of the South Asia Press Center in Beijing in 2015. The centre is run by the China Public Diplomacy Association, controlled by the Ministry of Foreign Affairs (MFA). Starting in 2016, the MFA has hosted around 100 foreign journalists from leading media houses in Asia and Africa. As part of an arrangement between the Chinese Embassy in New Delhi and the Indian media, reporters live in Beijing for 10 months, are paid monthly stipends, and are taken on all expenses-covered tours twice every month to different Chinese provinces. The first two cohorts of the programme were also awarded degrees in International Relations from Renmin University in Beijing, although this was subsequently discontinued (Krishnan, 2018).

The programme is modelled on fellowships hosted by the US State Department and other foreign governments and is the first of its kind for China. It was first launched for African journalists when Beijing set up a China Africa Press Center. After a successful test run, the China South Asia Press Center and the China Southeast Asia Press Center were launched. The journalists who are part of these programmes are accredited with these press centres and not their respective media outlets—an important distinction that limits the scope of their coverage and travel in China. Thus, the journalists are not stationed as correspondents of their newspapers but on visas hosted by the MFA. During the 10-month stay, they cannot undertake individual reporting trips unaccompanied by government minders as they are not independently accredited and, hence, are limited from reporting on issues deemed ‘sensitive’—from human rights to Tibet and Xinjiang. There have been three cohorts since the programme was launched. The Indian media organisations that participated in the programme include the Indo-Asian News Service (IANS), Jansatta, and The Indian Express (Krishnan, 2018).

The programme, which resumed in 2022 after a two-year gap on account of China’s COVID-19 travel restrictions, is a key element in the effort to “tell China’s story well” by overcoming the credibility gap suffered by Chinese organisations. Here, China’s story is being told well by foreign voices on their platforms. All three Indian organisations involved in the programme published reports from their correspondents without mentioning that their reports were on a Chinese government–hosted fellowship. When the programme was launched in 2016, none of these organisations had bureaus in China. The only Indian organisations present in China were the Press Trust of India, The Hindu, India Today, Hindustan Times, and The Times of India (IANS subsequently opened a bureau, which it has now discontinued). For the organisations, this presented a cost-effective way to cover China without spending on correspondents. The Indian Express said it did not see any conflict of interest in this arrangement, noting that, “The Chinese Embassy fellowship does provide a stipend but the journalists in the programme are paid their full salaries by The Indian Express for the entire duration of the programme. Just like all programmes, The Indian Express reporters participate in, there are no terms or conditions, no caution or advisory imposed on what they report from there. The work the fellows have done from Beijing speaks for itself” (Krishnan, 2018).

The rise of new media

While traditional media platforms remain an important platform for China’s messaging, social media has emerged as an information battleground. Media outlets are increasingly focusing on Twitter, Facebook, and YouTube, all three of which are banned in China. A presence on social media is the most effective route to Indian audiences. For example, CGTN relies on YouTube to reach foreign audiences. Similarly, the Global Times (English) and People’s Daily (English) use Twitter and Facebook and have 1.8 million and 6.8 million followers on Twitter, respectively. People’s Daily is particularly active on Facebook and has 86 million followers. In comparison, The Times of India, India’s biggest media outlet, has 10 million followers on Facebook.

The use of global social media is not limited to Chinese media. The MFA and its diplomats are increasingly active on Twitter as well. According to a study by The Associated Press and the Oxford Internet Institute (Kinetz, 2021), as of early 2021, at least 270 Chinese diplomats in 126 countries are active on Twitter and Facebook. The same study found that they posted close to one million times across 449 official accounts on Twitter and Facebook between June 2020 and February 2021. These posts were shared more than 27 million times. The study found that three-quarters of Chinese diplomats on Twitter joined the platform in the period since May 2019 (Kinetz, 2021).

The Chinese Embassy in India as well as its spokespersons have used Twitter to communicate China’s stand not only on India–China relations but also to critique Indian media coverage of China. In 2020 and 2021, the Chinese Embassy issued several statements, particularly on the Indian media reportage of COVID-19’s origins and on the coverage of Taiwan. The Embassy spokesperson tweeted in response to media interviews of Taiwan officials that the “Taiwan question is the red line that cannot be challenged” and that the Chinese side “urge relevant Indian media to take a correct stance on issues of core interests concerning China’s sovereignty & territorial integrity.” If the attempts appear to be aimed at shaping how Indian media cover issues sensitive to China, then whether the tweets and statements succeeded in doing so is less clear (Wang, 2021; Sharma, 2020).

Taking its cue: Coordination between old and new media in external messaging during border crises

The border stand-off in Doklam in 2017, the first major India–China crisis in this changing information landscape, was seen by those studying China’s media as “a game-changer”, marking a new approach in China’s external messaging (Haidar, 2020). Border stand-offs between India and China in the past were given relatively muted coverage by Chinese media and were often only mentioned in cursory statements by the MFA that described the border dispute as being “left over from history” and were faithfully reproduced in official media outlets (Xinhua, 2021). The stand-off in Doklam was marked by a multi-pronged messaging strategy. The objective was “to fully integrate the publicity forces of public opinion, radio, TV, newspapers and social media, and carry out a multi-wave and high-density centralized publicity in a fixed period to form favourable public opinion situation to allow for a final victory” (Tu & Ge, 2018).

This full integration of media was applied domestically within China as well, where there were campaigns on Weibo, such as the one by People’s Daily (Renmin Ribao), popularising the hashtag “The border line is the bottom line”, which went viral in China, and abroad, where Chinese media organisations put out multimedia content aimed at a global audience. One prominent example was a three-and-a-half-minute-long, English-language video published by the Xinhua News Agency and shared on YouTube, Facebook, and Twitter. A version with Chinese subtitles was released within China on domestic platforms. The contrasting responses the video received within and outside China underline the challenges faced by China’s media in putting out messages that can resonate with foreign and domestic audiences alike. Titled ‘The Spark: 7 Sins of India’, the video listed ‘seven sins’ or wrongs committed by India during the border dispute.

The video is an example of how new media communication closely adheres to the party line but is given some space to tailor the presentation of official arguments. The ‘sins’ mirrored what the MFA had said in official statements. The video, however, attempted to present the arguments in more accessible language. It featured a conversation between an English-speaking female anchor and a man dressed in a turban and beard and speaking in a mock Indian accent. The video immediately triggered a backlash not only in India but elsewhere in the world and was described in news reports as racist (Hu, 2017).

Following the end of the stand-off, Tu Ling and Ge Xiangran, two strategists with the Joint Staff Department of the People’s Liberation Army’s (PLA) Western Theater, the military command which was responsible for dealing with the stand-off, published a lengthy analysis of the media strategy on the WeChat account of the Western Command (Tu & Ge, 2018). The analysis reads, “On this ‘no-smoke battlefield, we comprehensively used various communication platforms…and always maintained the absolute superiority of the legal struggle against India.” They conclude that “initiative is the key of public opinion struggle” and “whoever grasps it will have an advantage, and whoever loses it will fall into passivity.” They argue that “To disclose the truth in time and seize the legal high ground, is the key to grasp the initiative of the legal struggle of public opinion” (Tu & Ge, 2018).

The key takeaway from their analysis is the dovetailing of official government announcements, official media coverage, and social media campaigns. Their analysis presents a detailed, chronological breakdown of how this coordinated messaging strategy unfolded. As an example of this coordination, they note that on August 3 and 4, 2017, “six ministries and agencies” of China—which they identify as the Ministry of Defense, Ministry of Foreign Affairs, Chinese Embassy in India, People’s Daily (Renmin Ribao), PLA Daily (Jiefangjun Bao), and Xinhua—issued their views on the incident. They write that subsequently, media outlets, such as the Global Times (Huanqiu Shibao), which is one step lower in the hierarchy, amplified and reposted the message published in the People’s Daily on social media, thereby “quickly forming a wave of public opinion and promoting the widespread dissemination of pictures and evidence of illegal Indian Army crossing the border.” (Tu & Ge, 2018)

Meanwhile, the English-language arms of these media organisations translated the content for their foreign audience. The strategists write, “We should choose the right time to produce evidence, grasp the favourable time to publish evidence, and maximize the publicity effect,” adding that it is also key to have “adequate preparation” to “counter” what the other side says. In their view, this media strategy effectively responded to the “three excuses concocted by the Indian side”, which were that they were protecting Bhutan, preserving the status quo of the trijunction, and had legitimate security concerns regarding China’s road construction. Three counterarguments were emphasised and disseminated to ensure consistency in messaging. Firstly, it was “repeatedly emphasised that Donglang always belonged to China and Bhutan is a sovereign country so India as a third party has no right to intervene.” Secondly, it was argued that the “border crossing point of the Indian border forces is 2,000 metres from and has nothing to do with the trijunction.” Thirdly, following the lead of the Foreign Ministry, the media pointed to “UN Resolution 3314 to show there can be no justification, political, economic, military or other, for the invasion or attack of the territory of another State by armed forces of one State” (Tu & Ge, 2018).

The PLA’s analysis of the Doklam media strategy presented it as an unqualified success domestically. Within China, the heated campaign garnered wide attention, including the support of Chinese public figures. Yet, whether this succeeded externally and in convincing the world of China’s arguments is far less clear since messaging, when travelling beyond borders, can get lost in translation—as is evidenced by the Xinhua video.

A similar dynamic played out three years later during the border crisis of 2020 when China’s media organisations launched another multi-wave and high-density messaging campaign, which was successful at home but arguably less so abroad. The Galwan clash of June 15, 2020, was a bigger challenge for China’s messaging. Twenty Indian soldiers and at least four Chinese soldiers died in the clash. For eight months after the clash, Beijing kept silent and did not confirm that it had lost lives in the immediate aftermath of the clash. It was only in February 2021 that China’s messaging strategy came into play. According to a Chinese media analyst based in Beijing, one possible reason for the delay may have been a desire to let the public passion in the aftermath of the clash subside.[2]

A high-intensity media campaign was built on an announcement by China that the PLA was honouring the four soldiers who had died. A documentary about the clash was played on the official broadcaster CCTV and portrayed India as the aggressor. Clips showed Indian troops crossing the Galwan river and Chinese soldiers standing their ground. What was left unsaid was that, as the Indian government suggested, the Chinese had transgressed the LAC in the valley first and had sparked the crisis (Tribune News Service, 2020).

The documentary was simultaneously broadcast with English subtitles on CGTN’s network as well as on its YouTube, Facebook, and Twitter platforms. The original documentary had been produced with the blessings of the Chinese military, part of a broader propaganda push that followed China’s announcement that it had lost four soldiers in the clash. CGTN aired a subtitled version, titled ‘Revealing truth on border clashes with India helps understand events’, as part of Beijing’s efforts to portray to the world its version of events. This version received 282,000 views.[3]

The post-Galwan messaging strategy extended the cross-platform coordination to global social media platforms on a scale that exceeded what was seen during the Doklam crisis. Here, many ‘unofficial’ voices were also incorporated in the messaging, unlike during Doklam, when it was limited to official media. During the Galwan crisis, unverified images, first shared on Chinese social media such as Weibo and WeChat, were subsequently posted on Twitter by social media handles that had somewhat unclear links with the Chinese government. Two particularly active Twitter handles during the Galwan crisis were Shen Shiwei, who described himself as an analyst without mentioning that he is a reporter for CGTN, and Eva Zheng, an account of a person who appears to be a Chinese national based in Pakistan at some point. The latter routinely posts detailed information on China’s military deployments on the India border and China–Pakistan relations and is also followed by several Chinese diplomats.

The use of social media during the Galwan clash allowed China to share its message directly with the Indian audience. In February 2021, Eva Zheng shared unverified images on Twitter that showed Indian soldiers tied up and held captive by the PLA in Galwan Valley (Zheng, 2021). The images appear to have been leaked by the Chinese military and were first posted on Weibo by popular “military fans” social media accounts that routinely post information about the military, usually in a positive light, but do not have any formal official linkages. These images were subsequently widely shared by Indian social media users.

Another post that garnered wide traction in India was a video by Shen Shiwei on January 1, 2022, showing PLA soldiers raising the Chinese flag in an unspecified location in Galwan Valley. The video, which garnered 1.7 million views on Twitter, triggered a heated political debate in India and led the opposition to ask the Modi government to “break its silence” and explain how the Chinese unfurled a Chinese flag in Galwan valley (Mohan, 2022) Indian officials later said that the flag-raising did not take place in the contested buffer zone in Galwan Valley but on the Chinese side of the LAC—a fact that was lost in the furore over the video. Subsequently, India staged a flag-raising to respond to the video (Press Trust of India, 2022). In the aftermath of the Galwan clash, fake “Chinese” Twitter accounts that shared images and videos of questionable authenticity mushroomed. These new accounts were earlier Pakistan-linked Twitter accounts that tweeted in Urdu, which subsequently assumed a ‘Chinese’ identity to spread disinformation about the clash. For example, the account ‘xiuying637’ was earlier run as ‘hinaarbi2’ while the handles ‘sawaxpx’ and ‘Zeping’, written in Chinese characters, tweeted in Urdu at one time. The accounts were eventually suspended (Krishnan, 2020).

The wide traction that the Chinese images and videos from the February 2021 publicity campaign received on Twitter shows China’s ability to insert itself into domestic debates abroad. Both posts—particularly the Galwan Valley flag video—triggered heated political debates in India, even eliciting a response from the leader of the opposition party, who criticised government inaction over the issue. While these new multi-platform and high-intensity campaigns—along with censorship, including the arrests of online commentators who questioned the military’s version of events (Krishnan, 2021)—were able to mute criticism largely and rally support for the military within China, assessing their impact abroad on shaping views about China is harder. After all, if the broader goal of China’s external messaging is aimed at creating more favourable views towards China abroad, the stream of propaganda on the border arguably achieved the opposite result in India.

Recent examples suggest that broadcasting domestic messaging abroad remains a challenge for the Chinese propaganda machinery, as it is still learning how to produce content which will resonate with foreign audiences. The Xinhua video and the backlash it caused serve as examples of how content tailored for a domestic audience might not work abroad. Another case in point is a message posted on Weibo by a top Chinese law enforcement body mocking the number of COVID-19 deaths in India. The account posted two images of a rocket launch in China and an Indian cremation ground with the caption, “China lighting a fire, India lighting a fire” to its 15 million followers. The message was cheered by some nationalists in China but was met with revulsion in India. The post faced some backlash within China as well, where it was criticised for being insensitive (Buckley, 2021).

A more active approach on the part of the CPC to messaging, including the use of global platforms, has created new tensions between domestic and external propaganda. The use of social media by traditional Chinese state media organisations—at home and abroad—also poses new challenges when it comes to assessing Chinese messaging, as it has collapsed the traditional hierarchies that were seen as determining the legitimacy or authoritativeness of the information coming out of China. If in the past, the People’s Daily (Renmin Ribao) or the PLA Daily (Jiefangjun Bao), the military’s official paper, were regarded as conveying official viewpoints; how a tweet or Weibo post by them, or by their English-language platforms, might be interpreted, is less clear. But what is certain is that social media has emerged as an important information battleground and merits being studied as closely as traditional media outlets that are usually given primacy in studies of China’s messaging.

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The post New Messengers: The Role of Traditional and New Media in China’s External Messaging During India–China Border Crises first appeared on CSEP.

In recent years, much of the focus of China’s new engagements in Nepal has been on converging interests or increasing Chinese economic and political influence in the country. But little attention has been devoted to analysing China’s cultural diplomacy, which seeks to reinforce a positive image of China in Nepal, and how it shapes public narratives in the country. This chapter carries out a qualitative analysis of China’s soft power influence to show how Beijing positions itself as a ‘good neighbour’ to Nepal. It uses select case studies to analyse China’s preferred semiotics and visible public diplomacy in the years since 2008. In doing so, this chapter explains how China has attempted to forge a favourable narrative in Nepal that upholds its interests.

Introduction

China’s increasing political and economic influence in Nepal has been the subject of several studies in recent years, especially following the undeclared 2015 Indian ‘blockade’, Nepal joining the Belt and Road Initiative (BRI) in 2017, and the proposed trans-Himalayan railway network connecting Tibet to Kathmandu. However, a wider study on how China is perceived in Nepal, and how it shapes public narratives in the country via its diplomatic mission’s public outreach programmes, has not yet been conducted.

In this chapter, using select qualitative case studies, I argue that China has expanded its soft diplomacy efforts in Nepal since 2008 in a bid to create a narrative that is favourable to its goals. Similarly, the semiotics around China’s definition of bilateral ties inform us of its efforts to include Nepal within its international narrative. Finally, China’s outreach programmes in Nepal with respect to Tibet seek to emphasise its position in and sovereignty over Tibet in a neighbouring country with a large number of Tibetan exiles (and which has previously witnessed large-scale demonstrations by such exiles). Seen together, these soft diplomacy efforts intend to promote a positive image of China in a country that only became an immediate neighbour in 1950. As such, these efforts must be regarded as complementary to China’s wider influence in Nepal.

A focus on cultural outreach

In an interview in June 2007, the then Chinese ambassador in Kathmandu, Zheng Xianglin, began by saying, “China doesn’t speak out regularly about Nepal’s politics, but when it does, it does not mince its words”. One of the questions put to the ambassador was, “Why does China conduct a low-profile diplomacy in Nepal as compared to other influential nations?” (Sharma, 2007). In 2021, such a question would elicit extreme surprise. In 2020 alone, the current ambassador, Hou Yanqi, gave at least six interviews to the Nepali press[1] and wrote at least five articles for Nepali newspapers.[2] Chinese diplomacy in Nepal is no longer regarded as low profile, especially since the ambassador’s visits with Nepali political leaders during the crisis in the Nepal Communist Party in 2020 were widely covered by both domestic and international media.

Ambassador Hou’s term, which began in December 2018, is marked by a new scrutiny arising from China’s perceived influence on Nepali political actors and institutions as well as Kathmandu’s professed policy of non-alignment. Such scrutiny is natural. The global US–China contest has left its mark on Nepali internal politics, giving rise to much discussion on the US’ Millennium Challenge Corporation (MCC) Compact and Nepal’s involvement in China’s BRI. Similarly, high-level Indian authorities have alleged that Nepal’s protests against a new Indian road in the contested territory of Kalapani were encouraged by China, especially because Nepal has been perceived as growing closer to China since the 2015 ‘unofficial’ Indian blockade.

Prior to 2020, however, Ambassador Hou’s public presence was distinguished by her activities in the sphere of cultural diplomacy. In March 2019, on International Women’s Day, the ambassador and her colleagues danced to a Nepali song while wearing traditional Nepali attire (Hou, 2019b). In December 2019, she asked Nepalis to follow her and retweet her post about a Chinese film festival to win free tickets (Khabarhub, 2019). Then, on the last day of 2019, she posted several pictures of herself at various tourist sites in Kathmandu to promote the Visit Nepal Year 2020 campaign. She wrote, “Beautiful Nepal with history, diversity and nature deserves a visit” (Hou, 2019c). On Dashain, Nepal’s biggest festival, the ambassador released a video of her and her colleagues singing the popular Nepali folk song, “Resham Firiri” (see Chinese Embassy in Nepal, 2020).

Ambassador Hou’s push for cultural initiatives is, in many ways, a continuation of earlier Chinese moves towards cultivating soft power in Nepal. Her predecessor, Ambassador Yu Hong, had similarly launched books (Chinese Embassy in Nepal, 2018b), attended a Nepal–China literature seminar (Chinese Embassy in Nepal, 2018c) and the launch of the Nepal Tourism website in the Chinese language (Chinese Embassy in Nepal, 2018e), and joined the opening ceremony of a Chinese language training course (Chinese Embassy in Nepal, 2018d). As Yu wrote in August 2018,

“China held seven China Festivals and eight China Education Fairs successfully in Nepal. The exchanges of literature, publication, music and fine arts between the two countries are frequent… The Governance of China (Volume I) written by President Xi Jinping was translated into Nepali language and widely welcomed in Nepal.” (Hong, 2018)

Such public diplomacy comes into renewed focus with President Xi Jinping’s emphasis on cultural cooperation and people-to-people exchanges as a key element of Beijing’s foreign policy, especially in neighbouring countries. In 2013, Xi said,

“We should well introduce China’s domestic and foreign policies to the outside world, clearly tell China’s story, spread China’s voice, and integrate the Chinese dream with the desire of the people of the neighbouring countries for a good life, and with the prospects for regional development, letting the awareness of community of common destiny take root in the neighbouring countries.” (Ministry of Foreign Affairs of the People’s Republic of China, 2013)

With respect to Nepal, Chinese public diplomacy emphasises the shared histories of the two countries and places the overall bilateral relationship within a framework of mutual respect, while also underlining the importance of Nepal in Beijing’s worldview. Chinese diplomacy makes itself visible to the common Nepali through cultural diplomacy tools and raises Nepal’s prestige via efforts such as choosing Nepal to be the theme country at the Beijing International Photo Exhibition in October 2020 (RSS, 2020).

Such public outreach tools have increasingly been used by the Chinese mission in Nepal since 2008, when Kathmandu witnessed months-long protests against the Beijing Olympics by Tibetan exiles. This was also a year when China lost its “permanent friend” in the country—i.e., the monarchy—after Nepal became a republic (for more on this, see Mulmi, 2021). The then ambassador, Zheng Xianglin, urged the interim Nepali government under Girija Prasad Koirala to “honestly carry out its commitment and not allow these anti-Chinese activities to happen so rapidly in Nepal” (cited in Human Rights Watch, 2008, p. 58). While China has engaged widely with political and security establishments via aid and agreements, its efforts to change the way Tibet is viewed in Nepal have not been studied much.

In 2009, the Tibet of China: Past and Present photo exhibition was organised in Kathmandu on the “50th anniversary of democratic reforms” to show “the process of Tibet from darkness to brightness, from poverty to prosperity, from autocratic rule to democracy, and from self-seclusion to opening up” (Sitaula & Zang, 2008). The exhibition was among the first of its kind and sought to shift the narrative on Tibet to align more closely with Beijing’s views. The then Nepal minister for information and communications, Shankar Pokharel, said that the exhibit “unveiled the bitter truth of past as well as glimpse of prosperous present of Tibet” (Sitaula & Zang, 2008). Thereafter, although the scope of exhibitions has widened to include Chinese book fairs (in 2014), intangible culture (in 2017), and Tibetan embroidery and arts (in 2017), the emphasis has been on Xi Jinping’s new neighbourhood policy push for cultural cooperation as well as the need for China to promote its own narrative in Nepal.

These select instances, and an analysis of the semiotics of China in Nepal, allow us to grasp the Chinese view of Nepal and China’s success in shaping a positive perception of Beijing in the country. As former Nepali ambassador to China, Leela Mani Paudyal wrote in July 2020 on the 65th anniversary of Nepal–China diplomatic ties,

“A prosperous China is an opportunity for Nepal. The two countries maintain similar views on almost all regional and international issues, and cooperate on matters of world peace and regional stability. Because of growing ties and trust in each other, Nepal and China share an unbreakable bond, and are today trustworthy and excellent friends among neighbours.” (Paudyal, 2020a, translation mine)

The former ambassador also hailed the elevation of ties to a “strategic partnership” during Xi Jinping’s short but effective state visit in October 2019 as “historic”: “The strategic partnership will address contemporary needs. As a rising global economic power, China will fully assist the Nepali people’s aspirations for development and prosperity” (Paudyal, 2020a, translation mine).

Further, bilateral ties between the two countries are posited as “problem-free” and “everlasting” by Nepali diplomats; the countries are dubbed “good neighbors with mutual political trust” by Chinese envoys (see Maskey, 2020; Hou, 2019a ).

A former Nepali ambassador to China, Mahendra Bahadur Pandey, even went so far as to call reports suggesting that Nepal and China do not share good relations any more “fake propaganda”. In his words, “We don’t have any reason not to have very good relations with China… We have different political culture[s], but we still share many similarities” (Xie & Bai, 2020). China is regarded as a “true friend at the time of need” (Maskey, 2020), and Chinese aid is seen by Nepali diplomats as being implemented “without strings of political covenants and policy interventions” (Paudyal, 2020b). Such conceptions of the relationship, and the possible benefits Nepal can derive from growing closer to China, shape the narrative in distinctive ways, allowing China to be seen as a “good neighbour”. This positioning contrasts Nepal’s relations with other powers such as the United States (US) and India.

In recent years, Chinese foreign missions have become increasingly active on social media channels such as Facebook and Twitter, although both are not officially allowed in China. The Chinese Ministry of Foreign Affairs (@MFA_China) joined Twitter in October 2019 and Ambassador Hou Yanqi joined in June 2019 (@PRCAmbNepal). The mission in Nepal joined Twitter in December 2021 (@PRCSpoxNepal). An Associated Press investigation revealed that “Chinese diplomatic accounts have more than tripled on Twitter and more than doubled on Facebook since mid-2019” (Kinetz, 2021).

In a developing country like Nepal, where internet penetration is rapidly rising, social media channels allow foreign missions to convey their ideas directly to the population. At least 24 million Nepalis, or 82.79% of the population, have access to the internet today (RSS, 2021). Around 60% of users access the internet via mobile networks. While accurate statistics on social media usage are difficult to come by, a report suggests that 13 million Nepali users are active on various social media channels, with this number growing by 30% annually (Kemp, 2021).[3]

The semiotics of China in Nepal

In October 2019, before Xi Jinping visited Kathmandu, his essay highlighting areas for future cooperation was published in several Nepali newspapers, both in English and Nepali. China, he wrote, wanted to “deepen strategic communication”, “broaden practical cooperation”, “expand people-to-people exchanges”, and “enhance security cooperation” with Nepal. The op-ed cited the historical and cultural linkages between the two countries centred around Buddhism as examples of “lasting friendship between our peoples” (Xinhua, 2019). Xi called the growing bilateral relationship an example of “good brothers who always stand alongside each other”, listing the aid and effort provided by Nepal in the aftermath of the 2008 Sichuan earthquake and the rescue, relief, and reconstruction provided by China after the 2015 Nepal earthquake as “shining examples of how China and Nepal look out for each other like brothers do”.

By framing its policy to include Nepal within the ambit of kinship ties, and by subsequently creating an imagined community, Beijing allows for a closer—but more hierarchical—imagination of the relationship. The semiotics associated with China’s presence in Nepal, although yet to replicate the “gift of development” vocabulary seen in Tibet, emphasise the long-lasting friendship between the two nations. Geographer Emily Yeh (2013) documents this relationship as “a series of acts of altruism and generosity, bringing benefit and generating positive sentiment” (p. 14). This shared goodwill has been further cemented in the form of the Kalanki underpass built as part of the Kathmandu Ring Road expansion, a Chinese aid project that cost NPR 5.13 billion (Ojha, 2019).

In a November 2020 op-ed, amid reports of Chinese border encroachment in the far-west district of Humla and restrictions on cargo traffic at the two land border points of Rasuwagadhi and Tatopani, ambassador Hou acknowledged the Nepal–China border as bearing “testimony to peace and friendship between the two countries” and “a bond for win-win cooperation” (Hou, 2020). Suggesting that China had operated freight functions at the land border-crossings “to our best”, the ambassador ended the essay by calling for the border to become “a bond to build a shared bright future for China and Nepal”.

A description of the border as “a bridge for mutual assistance” gains significance when viewed within the context in which the op-ed was published. Several reports have highlighted, and continue to highlight, the erratic and unilateral disruptions to the movement of cargo traffic due to China’s concerns about Nepal’s handling of the Covid-19 pandemic, and traders equating the situation to an “undeclared blockade” (Prasain, 2021). Further, the ambassador described Chinese infrastructural developments in the Himalayan regions as benefiting Nepalis across the border. This was also repeated in the Chinese Embassy’s letter to the Nepali Congress after claims of border encroachment by a Congress MP from Humla (Basnet, 2020). In a February 2021 interview, ambassador Hou refuted all claims of an “undeclared blockade” and compared the ties between the two countries to “sailors in the same boat” (Pandey, 2021, translation mine). When asked why the passage of goods from China had become erratic, the ambassador cited the Covid-19 pandemic and the geology of the region, stating that China had never imposed a blockade on Nepal in the past or present and would not do so in the future either—here, the subtle reference to China’s position in contrast to India’s was not lost.

Beyond these superlatives, however, one of the most important takeaways from official Chinese semiotics in Nepal has been the pivot to the north, especially in terms of connectivity and economic worldview. During his 2019 visit, Xi Jinping said: “[China] will help Nepal realize its dream of becoming a land-linked country from a land-locked one” (Sharma, 2019). Beyond addressing Nepal’s insecurities of being a “land-locked” nation that is economically reliant on India, the Trans-Himalayan Multidimensional Connectivity Network, as posited under the BRI, will also open up new vistas for Nepali policymakers. As former ambassador Paudyal wrote in April 2019:

“Nepal can take advantage of the BRI to join the global economy via China and the latter’s growth in tourism. We have an opportunity to make our economy globally competitive by utilising China’s rapidly growing foreign investment in our infrastructure development, modernising agriculture, and enhancing industrial and services production and productivity… Nepal can take advantage of the recently inked transit agreement and China’s extensive rail network from Southeast Asia to Europe to connect it to the global economy and diversify our foreign trade.” (Paudyal, 2019, translation mine)

While the train from Tibet is one of the most discussed markers of this proposed network, smaller projects such as the optical fibre network from China, which became operational in January 2018, are also viewed as part of the connectivity network and as reducing Nepal’s dependence on India (Nepal was solely reliant on India for its internet bandwidth until then). Further, the imagination of Nepal as China’s gateway into South Asia via these connectivity projects looms large. As Xi wrote, “a trans-Himalayan connectivity network will serve not just our two countries but also the region as a whole” (Xinhua, 2019).

“Friendship across the Himalayas”: Nepal joins the Beijing narrative

Following Xi Jinping’s statement about the bilateral relationship being a “friendship across the Himalayas”, Chinese officials have increasingly begun to refer to Nepal–China ties as a “friendship across Mt. Zhumulangma”, the Sinicised name for Mount Everest,[4] as Ambassador Hou did in her November 2020 op-ed. After the joint announcement of the new height of the peak in December 2020, the Chinese foreign ministry spokesperson referred to the height as “a new milestone for China–Nepal friendship”, the “new height of China–Nepal cooperation”, and a “new level of human spirit”. Further, in connection to the Covid-19 pandemic, the spokesperson also said,

“No matter how high Mt. Qomolangma is, it can be climbed. No matter how great the difficulty is, it can be overcome… As long as countries work together in good faith as China and Nepal do, we will finally defeat the virus.” (Ministry of Foreign Affairs of the People’s Republic of China, 2020c)

China’s quest for driving the narrative on Everest—which it calls Qomolongma, a variation of the indigenous Tibetan name for the peak—began in the early days of its relationship with Nepal. The naming of the peak after the British surveyor-general George Everest is “unacceptable” to China, which regards the name “Everest” as a colonial relic (China Daily, 2002). It cites a 1958 paper by Lin Chao titled “The Discovery and Name of Qomolangma” which highlighted the Qing dynasty surveys in Tibet in the eighteenth century:

“Those who discovered Mount Qomolangma first were Tibetans living in southern Tibet and they so named it. And those who first recorded the peak on a map using scientific methods were Chinese surveyors Shengzhu, Churbizanbo and Lanbenzhanba, who conducted the survey in Tibet between 1715 and 1717.” (China Daily, 2002)
The mapping of the peak, according to China, precedes British attempts by at least 130 years. “The British approach to the name of Qomolangma was to insist on calling it Everest despite the fact that it had already had a Tibetan name. This was ridiculous” (China Daily, 2002; also see Xinhua, 2020).

Chinese insistence on the name was also evident during the 1960 border discussions between the then Nepali prime minister, B. P. Koirala, and Mao Zedong. When China claimed Everest entirely, Koirala countered Mao’s assertions. Mao replied, “But you do not even have a name for it in your language, and you call it Mount Everest”. Koirala writes,

“I remembered at that time, or someone had reminded me, that it was known as “Sagarmatha”. Even though I was new to that term, I replied, “You do not have a name for the peak either. ‘Chomolongma’ is a Tibetan name”. Mao replied, “Tibet is China”.” (Koirala 2001, p. 227)

Eventually, in 1961, a political decision was reached to share the summit as an international boundary line between the two countries.

The recent joint announcement of the new height was the culmination of a 15-year quest from the Chinese side. In 2005, Chinese surveyors measured the peak at 8,844.43 m. Nepal disagreed; it considered the height to be 8,848 m. In 2017, the Nepali Department of Survey began its own measurements, but it could not announce the results because the joint statement issued after Xi Jinping’s 2019 visit to Kathmandu declared that both countries would announce the height together. The department had not been informed of the agreement (Giri, 2019). In December 2020, the new height was jointly announced by Chinese Foreign Minister Wang Yi and his Nepali counterpart, Pradeep Gyawali (evidently, the peak had risen by 86 cm).

Gyawali called it a “special moment” and said that the Nepal–China relationship “will develop further as high as Mount Qomolongma”; his Chinese counterpart said the new height “not only represents the significant importance to the development of China–Nepal relations attached by both sides, but also the traditional friendship and mutual strategic trust between the two countries” (Ministry of Foreign Affairs of the People’s Republic of China, 2020b).

China’s insistence on the joint announcement is part of its quest to shape its own international narrative, which it believes is not favourable. As noted by researcher Nadege Rolland, the phrase “huayuquan”, translated as “speaking rights” or “international speaking rights”, “reflects Beijing’s aspirations not only to have the right to speak on the international stage but also to be listened to, to influence others’ perceptions of China, and eventually to shape the discourse and norms that underpin the international order” (Rolland, 2020, p. 7).

China seeks to establish its position in the international discourse around the peak, by insisting, since at least 2012, according to a report, that both countries agree on the height of Everest and that the name be internationally rejected in favour of the Sinicised Tibetan name (Khadka, 2020). China’s need to shape international discourse was most pressing during the Covid-19 pandemic, when the US accused China of mishandling the pandemic.

As international opinion on China grows more partisan, China’s response to the US’s accusations suggests that it will ask its bilateral partners to endorse China’s positions publicly. As with Everest, Nepal has joined the Beijing narrative on other issues. As early as April 2020, Nepal congratulated China “for successfully containing the spread of Covid-19”, and said that “China’s efforts and progress in outbreak control have set a fine example for the world” (Ministry for Foreign Affairs of the People’s Republic of China, 2020a).

In July 2020, at a meeting between the foreign ministers of China, Nepal, Pakistan, and Afghanistan, China announced that the four countries would “reject politicizing the pandemic”, a direct riposte to American charges; this statement was also repeated at the April 2021 meeting of the five ministers (Ministry of Foreign of the People’s Republic of China, 2021; Ministry of Foreign Affairs, Nepal, 2021). Nepal further supported the new Hong Kong security laws (Ministry of Foreign Affairs, Nepal, 2020) and was among the 50 signatories to a letter supporting China’s policies in Xinjiang at the United Nations in July 2019 (Putz, 2020).

Imagining cultural ties: Tibet, China, and Nepal

In November 2019, I visited China’s Tibet Trade Fair in Kathmandu, where Tibetan and Chinese sales representatives were selling bottled mineral water from a glacier below Everest (on the Tibetan side), pitching real-estate construction projects, and selling various herbal medicines. The emphasis on “China’s Tibet” was immediately perceptible. That Tibet is an inalienable part of China continues to be a core feature of the One China policy, and Nepal’s adherence to this is repeated in every joint statement by the two countries. Taken together with other cultural diplomacy efforts such as the March 2019 photo exhibition in Kathmandu marking the 60th anniversary of democratic reforms in Tibet, these public exhibitions seek to explicitly underline China’s sovereignty over Tibet and to showcase a narrative on Tibet that is entirely different from that led by the Tibetan government-in-exile, especially after the 2008 protests by Tibetan exiles in Kathmandu.

While China’s outreach to the political and security establishment after the 2008 protests drove home its primary interest in securing the border to curtail the passage of Tibetans into Nepal and prevent any Tibetan political expression within the country, its cultural diplomacy efforts intended to take its message, in line with the earlier quoted mission of “huayuquan”, to the larger population. In March 2009, an exhibition in Beijing sought to dispel the “western fabrications” around Tibet. The then Nepali ambassador, Tanka Prasad Karki, who was among the 150 diplomats who visited the exhibition, said,

“Tibet has undergone a massive transformation for the better. You cannot believe that so much transformation has already taken place in such a short period of time. The life of Tibetan people has already changed so much for the better.” (National People’s Congress of the People’s Republic of China, 2009)

The 2009 Tibet of China: Past and Present photo exhibition in Kathmandu, one of the first such outreach programmes after the 2008 protests, aimed to show that “Tibet is in its best period of historical development after its 50-year reform” (Sitaula & Zang, 2008). A Communist Party of Nepal (United Marxist-Leninist) leader said, “The old picture of Tibet has changed now” and that Nepal “should not be the playground to plot anti-China activities”. The official China Central Television (CCTV) report also quoted a Grade 12 student who said, “[A]fter visiting this exhibition I came to be informed about the drastic change in Tibet socially as well as economically” (Sitaula & Zang, 2008).

Similarly, in 2014 and 2016, Nepali delegates were part of the Forum on the Development of Tibet, China. In the Lhasa Consensus document released after the 2014 forum, the emphasis on steering the narrative on Tibet closer to Beijing’s version was clear (Chinese Embassy in Nepal, 2014). In 2018, the Chinese Embassy in Kathmandu held a reception to celebrate the Tibetan Losar New Year. During this event, Ambassador Yu Hong said the “support of the patriotic overseas Tibetans in Nepal contributes a lot to the development of China–Nepal relations” (Chinese Embassy in Nepal, 2018a).

What is most noticeable in these cultural outreach programmes is the absence of the Dalai Lama and any elements associated with him. These exhibits are grounded in China’s quest for sovereignty over the Tibetan plateau. It is also evident that while the Tibetan geography shapes contemporary discourse via infrastructure projects that intend to connect Tibet with Nepal, and that ancient Tibetan history with Nepal is recalled to give continuity to bilateral relations, the emphasis on “China’s Tibet” ensures that these exhibits—and other cultural diplomacy efforts—are in line with Beijing’s version of Tibet. Thus, China shapes its relations with Nepal via the ambit of Tibetan geography and history, but not via the Tibetan identity.

Conclusion

Much of the recent focus on the Chinese influence in Nepal has centred on its rising strategic, political, and economic clout in the country, contrasted with Nepal’s geopolitical sandwiching between its two giant neighbours and its immediate tensions with India since the 2015 blockade. However, a study of China in Nepal only along these lines misses the crux of the matter: China’s rising influence in the country is predicated—unlike in other developing nations—not on its economic investments (which are still fewer and smaller in value compared to those in other South Asian nations) but on it offering a greater political counterweight to India.

Bilateral ties, as we have seen, are regarded as problem-free, and China has been called an “all-weather friend” by Nepali leaders (Embassy of the People’s Republic of China in the Republic of Liberia 2021; The Kathmandu Post 2017). The Trans-Himalayan Connectivity Network is posited as being replete with opportunities for development and investment for Nepal and as being a pathway to reduce Nepal’s economic reliance on India by shifting its focus north. At the same time, China is equally keen to win the hearts and minds of the Nepali people, as its semiotics in the country clearly reflect. China positions itself as a neighbour that respects Nepal’s sovereignty; moreover, its insistence on an international narrative that claims Nepal as a partner strengthens its position in the global contest for influence while according Kathmandu respect. At the same time, Beijing’s cultural outreach programmes emphasise Chinese sovereignty over the Tibetan plateau, manifesting its insecurities even as it tries to draw attention away from them. Above all, such efforts in the public sphere create an imagination of China that is distinctive from how Nepal views its relationships with other countries.

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The International Department of the Communist Party of China has spread its reach to many developing nations, including Sri Lanka. It provides policy suggestions to Sri Lankan think tanks and political parties to encourage them to embrace and emulate China’s model of reforms. The global pandemic has accelerated such soft power projections. This is evident in how China is openly pursuing its dual approach of economic diplomacy coupled with the Communist Party of China’s activities and involvement in Sri Lanka. The close relations between the political party led by the Rajapaksas, the Sri Lanka Podujana Party, and the Communist Party of China is evident. The chapter will discuss the International Department of the Communist Party of China’s strategies of engagement in Sri Lanka. The analysis will explore the limitations of China’s political reforms arising from its Leninist political structure, which is causing tension within China between the reformists and power hawks. With the present politico-economic crisis, and in the post-Rajapaksa regime of Prime Minister Ranil Wickremasinghe, how will China’s approach fit in? What are the possible long-term implications?

Introduction

The “peaceful rise of China” was a phrase coined by Zheng Bijian, chair of the China Reform Forum, and former executive vice-president of the Central Party School of the Communist Party of China (CPC), in 2002. Zheng’s view was that China’s rise to prominence in the international arena would come with a commitment to protect global peace and sustainable prosperity through the projection of soft power. China’s trajectory between the tenures of General Secretary Hu Jintao and General Secretary Xi Jinping reflects a strong commitment to this view. The country has followed a strategy of leveraging soft power, which has led to the International Department Central Committee of the CPC (IDCPC) establishing its presence in many nations, including Sri Lanka. The IDCPC provides policy suggestions to think tanks and political parties in Sri Lanka to encourage them to embrace and emulate China’s model of reforms.

Such soft power projections have accelerated during the global pandemic. This is evident in how openly China is pursuing its dual approach of economic diplomacy coupled with CPC activity in developing nations such as Sri Lanka. The island nation’s ruling political party, Sri Lanka Podujana Peramuna (SLPP) led by the Rajapaksas, maintains a close relationship with the CPC. Joint seminars by the SLPP and the IDCPC demonstrate this close political collaboration and how the CPC is perceived as a possible model to be emulated (IDCPC 2020). Further, Sri Lankan policymakers and certain sections of the general public have expressed acceptance and praise of the Chinese model of development. These sentiments, expressed by those in the higher echelons of Sri Lankan politics, count among several factors that could weaken democratic governance in Sri Lanka.

The chapter will discuss the CPC’s strategies of engagement in Sri Lanka. It suggests that the nature of China’s political system and its involvement in Sri Lanka create a conflict within the island nation—a tendency towards centralisation of power rather than accountability to and oversight by parliament. With the present politico-economic crisis, and despite Mahinda Rajapaksa’s exit as prime minister, the CPC can be expected to play a more prominent role in the country’s political affairs.

China’s political model

Under its Leninist structure, members of the CPC are engaged in running the state and are also part of private-sector institutions and businesses. This tight control allows the Party to keep the communist model intact while calibrating reforms. Stephen Kotkin’s work shows how communist regimes that open their economies inevitably become more autocratic regimes (Foreign Policy Research Institute, 2020). This points to the danger in emulating China’s political model.

When China opened up its economy in 1978, it invited greater exposure to ideological influences from outside that could challenge the CPC’s control. Deng Xiaoping famously quoted, “If you open the window for fresh air, you have to expect some flies to blow in” (Punyakumpol, 2011). The CPC foresaw that opening up the economy would greatly benefit China’s economic trajectory but would also potentially cause a colour revolution in society. To prevent this ingress of liberal, democratic values, the CPC developed a centralised power structure and now oversees a surveillance state (Albert, Maizland, & Xu, 2021). Further, to counter ideas that oppose China’s political status quo, it exports its political vision through several means.

One such tool is the expansion of infrastructure diplomacy under the Belt and Road Initiative (BRI) across many continents. With its aggressive ‘wolf warrior diplomacy’ during the pandemic, the CPC has also taken a step toward engaging with developing nations and power centres in a more assertive manner (Balachandran, 2021). Several direct comments by the Chinese embassy in Colombo to the US ambassador signal this interventionist cum confrontational mode of engagement (Colombo Gazette, 2020a). A key part of this agenda is promoting the China model as a substitute for the liberal democratic model.

The dual challenge facing China is keeping the CPC Leninist structure intact while influencing developing nations to engage in an alternative model. In a report on the CPC’s influence on Europe, scholars from Mercator Institute for China Studies (MERICS) identified that China’s authoritarian ideals pose a significant challenge to liberal democracy as well as Europe’s values and interests. The same report explains the CPC’s use of various tools to achieve its goals (Benner et al., 2018). The same can be said of developing nations, particularly Sri Lanka, which has a significant Chinese sphere of influence due to its debt burden.

According to David O. Shullman (2019), “CPC conducts large-scale training of foreign officials about its development methods and provides increasingly sophisticated technology to authoritarian governments.” Further, he explains that “Chinese information efforts have factored into election campaigns in numerous developing countries across continents, including Zambia, Peru, Sri Lanka, and Nepal.”

According to Ambassador Shivshankar Menon, it was clear that China chose its preferred candidate, Gotabaya Rajapaksa, before the 2019 presidential elections, which is a clear indication of Chinese intervention in the domestic politics of Sri Lanka (ISAS Events, 2020). This comes after a previous accusation of China funding Rajapaksa’s political campaign (Abi-Habib, 2018). This could be seen as a political investment by China to secure its influence in the island nation.

China completely denies this assessment of internal political interference, claiming that it follows a non-intervention policy (Lo and Zhou, 2018). Foreign Ministry Spokesperson Lu Kang’s comment that “China will stick to the principle of not interfering” (Lo and Zhou, 2018) even during Sri Lanka’s constitutional crisis does not hold water due to China’s preference for the Rajapaksa regime.

IDCPC and the promotion of the Chinese model of governance

The International Department Central Committee of the CPC (IDCPC) has in recent years played an active role in the Sri Lankan political landscape (Table 1). The seminar held by the Sri Lanka Podujana Peramuna (SLPP), belonging to the Rajapaksa brothers, and the IDCPC on November 4, 2020, is a prime example of this (IDCPC, 2020). It was reported that the seminar was the result of a consensus reached between President Gotabaya Rajapaksa and President Xi Jinping and was held to promote regular engagement between the two and share in-depth insights on their governance experiences (Hui, 2020c).

This illustrates two visible political trends. First, CPC-affiliated organisations are increasingly promoting the Chinese model of governance in nations such as Sri Lanka. Second, political actors in such nations are willing to explore opportunities offered by the Chinese model of governance at the cost of liberal democratic values. The close monitoring of these two trends is essential to the discourse on the expanding influence of the CPC.

At the seminar, Song Tao, then Director of the IDCPC, stated that “expanding bilateral Belt and Road cooperation will boost the economic development of the two countries and bring more benefits to the two peoples”, while noting that Sri Lanka is an important partner for China in the construction of the BRI (Hui, 2020a). Further, Sri Lankan ruling-party policymakers — including Basil Rajapaksa, President Rajapaksa’s brother and political strategist of the SLPP — have accepted and praised the Chinese model of development (NewsWire, 2020). These are clear indications of an expanding Sino-Lanka political relationship.

Opposition, trade unions, and China

The socialist essence of the Rajapaksa coalition stems from the Sri Lanka Freedom Party and coalition partners such as the Communist Party of Sri Lanka (CPSL). Many coalition members, including CPSL leader Dew Gunasekera, are strong old-school advocates of the Chinese model and promote a strong Sino-Lanka relationship (Daily News, 2020a). The political push from these coalition partners has a significant impact on the higher committee levels of government. Sri Lanka’s ability to assess the ‘Chinese sphere of influence’ is thus adversely impacted. Such a poor assessment of the Chinese sphere of influence by the political leadership might have cost the nation important strategic projects such as the East Container Terminal (ECT) public-private partnership with India, the Millennium Challenge Corporation (MCC) Compact grant from the US, and the Japanese-funded Light Rail Transit (LRT) project. Such a lack of strategic foresight has further affected Sri Lanka’s bilateral relationships with these nations, with both economic and diplomatic costs.

During Indian External Affairs Minister S. Jaishankar’s visit to Sri Lanka in early 2022, a few important areas of concern for Indo-Lanka relations were discussed. The devolution of power, Tamilian grievances taken up at the United Nations Human Rights Council (UNHRC), and the stalled ECT development agreement were at the top of his agenda during discussions with President Gotabaya Rajapaksa (Mohan, 2021). A few days after the visit, a weekend newspaper called The Sunday Times claimed that Chinese intelligence was behind the delay in the execution of the ECT port agreement with India (The Sunday Times, 2021). Whatever the veracity of such claims, the newspaper did observe a broader Chinese geopolitical push into Sri Lanka’s strategic decision-making process.

The ECT, a tripartite agreement with India, Japan, and Sri Lanka, which was secured during the previous Sirisena-Wickramasinghe regime, was cancelled due to a massive trade-union protest in Colombo Port. The port trade unions threatened to stop all operations in the port if the government agreed to the development of the ECT under a public-private partnership (PPP) agreement with an Indian developer/port operator. The government bowed under this pressure, and the ECT contract was denied to the Indian company, Adani Group, on grounds of national interest. However, the Sri Lankan Cabinet of Ministers decided to award a USD 12 million renewable energy joint venture project to China MS/Sinosar-Etechwin at the same time (Rubatheesan, 2021). This was a national security concern for India due to the geographical proximity of the energy project to the Indian shoreline. With New Delhi now pushing its security concerns in turn, this latter project was eventually terminated by the Sri Lankan government (Bagchi, 2021).

Importantly, geopolitics was the unusual agenda for the protest against the ECT by trade-union leaders. Sanjaya Kumara Weligama, president of the Progressive Workers Association for Commercial Industry and Services, in a statement with the 23 unified trade unions belonging to the Colombo Port said that “none of the patriotic forces in the country wants to overthrow the Government but help direct the Government on the right path” (Daily News, 2021). Their effort was portrayed as protecting the nation’s strategic assets. However, patriotism of such magnitude was not seen when the Hambantota port was leased in a 99-year agreement to China. Compared to the Chinese Hambantota lease, the ECT tripartite agreement had no geopolitical concerns nor did it threaten the sovereignty of the nation. On the contrary, the development of the ECT with an Indian partner would have brought Sri Lanka substantial economic returns since “around 70% of Colombo Port’s transshipment business is India-related” (Sri Lanka Export Development Board, 2019).

President Gotabaya Rajapaksa’s earlier wish to proceed with the ECT for a 51/49 per cent government majority share was on the right path to achieving an important PPP with two key strategic partners—India and Japan. Therefore, the opposition to the project was driven by deceitfully orchestrated fear instigated by trade unions who weaponised nationalist sentiment. According to a media report, the “Indian diplomatic sources, said India is of ‘strong view’ that Chinese agencies were funding some protests against the ECT deal” (South Asia Monitor , 2021). Further a Sri Lankan popular newspaper reported that the “ECT initiative was promoted by Chinese Intelligence, with the objective of having it blocked” (Sunday Times, 2021). It can therefore be surmised that the protests had clear support from an internal political force backed by China.

The contrived fear that certain external powers will take over Sri Lanka’s strategic assets, hyped up by ultra-nationalists, further dragged the ailing economy into a narrow corridor of maligned mercantilism with very few opportunities (Abeyagoonasekera, 2021). The incessant displeasure with, and rejection of, agreements from western quarters such as the MCC grant (ColomboPage, 2020a), Status of Forces Agreement with the US (Gunasekara, 2019), Japan’s LRT (Reuters, 2020), and India’s ECT (Janardhanan, 2021) indicate the Sri Lankan government’s political allegiance towards China. China’s strong influence in Sri Lanka was cultivated by bribing and financing the policy circle, the elites, and other influence groups, including political parties (Pal, 2021).

The heavy Chinese influence could drag Sri Lanka toward a different economic and political model—from the existing free-market model, which promotes liberal values, to a malignant protectionist model with a semi-controlled economy. The recent market interventions and import bans by the government illustrate that this shift has already begun (Nordhaus & Shah, 2022). The ailing economy, with further borrowings such as the March 2021 currency swap deal of USD 1.5 billion, shows that the Gotabaya presidency prefers China as the most trusted partner for borrowing, akin to the administration of his brother, Mahinda Rajapaksa (2005–2015).

The Colombo Port City Project by China, with its reclaimed seafront sitting next to Colombo Port, was given full clearance by President Gotabaya Rajapaksa’s regime to operate a special economic zone with extra-jurisdictional rights. These are clear signs of the regime amalgamating the Chinese development model. Member of Parliament Wijedasa Rajapaksa compared the Port City acquisition to the Hambantota Port lease, adding that “the 1,100 acres reclaimed do not belong to Sri Lanka, the Western Province or the Colombo District. Through the bill, a commission will be set up to regulate that land. The Commission acts in accordance with the requirements of the Chinese company … this land has been released from all 14 tax acts including the Inland Revenue Act. Even Parliament cannot deal with this and its salaries are paid in foreign currency. If we go there and buy something, we have to pay taxes for it. This is completely similar to any other country” (ColomboPage, 2021).

China’s economic grip on Sri Lanka could have significant consequences for the Sri Lankan political model and political parties, especially the ruling SLPP. With the SLPP’s two-thirds parliamentary majority, and the October 2020 constitutional reforms transferring power to the executive, the country appears to be on a clear path toward authoritarian rule. “China does not necessarily advocate, much less force, other states to adopt one-party authoritarian rule for themselves. Instead, China wants to quash opposition and criticism of Chinese Communist Party rule abroad and ensure Chinese access to markets and natural resources” (United States Institute of Peace, 2020). From the inception of BRI in 2013, China has strategically managed to quash criticism in Sri Lanka by winning over policymakers who even promised the public that they would investigate Chinese projects for corruption (Daily Mirror, 2015).

Another area that Indian Foreign Minister Jaishankar highlighted was the long unaddressed minority community grievances and human rights concerns in Sri Lanka. A recent report by Human Rights Watch highlights serious challenges for Sri Lanka internationally, which can only be resolved through multilateral support and diplomacy. The United Nations High Commissioner for Human Rights, Michelle Bachelet, has warned that the council will reach a “critical turning point” in its dealings with Sri Lanka at the upcoming session due to Sri Lanka’s long unresolved commitments and the present unfavourable developments, especially the country’s recent militarisation (Human Rights Watch, 2021).

In contrast, this is of no concern for China as it reflects the central command model of the Chinese government. As the Sri Lankan government is challenged internationally for failing to resolve domestic issues concerning reconciliation, accountability, and the grievances of minority communities, it will expect more support from China, especially at the UNHRC. China has stood with Sri Lanka in the past, defending it at the UNHRC and against human rights concerns raised by the West (Tamil Guardian, 2022).

This indicates a space of uninterrupted political growth for China to expand its influence in Sri Lanka. It is also reflective of Sri Lanka’s dangerous multi-dependency on China for diplomatic, economic, and governance-related activities. Therefore, in the Gotabaya presidency, we see a strong departure from Sri Lanka’s liberal democratic values toward a China-centred value system in a geopolitical landscape where China’s influence has further expanded.

Militarisation in Sri Lanka

The increasing militarisation of different sectors under the Gotabaya presidency shows its affinity toward the China development model (Pereira, 2020; ColomboPage, 2020b). Nations with semi-autocratic majoritarian governments, weak democratic indicators, a lack of rule of law and respect for basic human rights, provide ideal sites for experiments with the Chinese model. Myanmar, with its recent coup, and Sri Lanka have drifted from democratic models toward a more military-centric, semi-autocratic model (The Economist, 2020). In both scenarios, China has been a key strategic partner who has defended the countries’ human rights agendas and backed the ruling regimes at international forums. In both these nations, China has a large infrastructure development agenda through the BRI and also direct political influence and interest.

President Gotabaya Rajapaksa is a former military officer and has appointed other former military officers to bring in their expertise and discipline to form a highly inefficient system of government. The new majoritarian regime of President Gotabaya Rajapaksa, with its 28 military appointments to various state sectors such as banks, health, aviation, and agriculture, has been negatively perceived by the western democratic front (Human Rights Watch, 2021; Tracking Militarization in Sri Lanka, n.d.). For example, Human Rights Watch, in its latest country report, highlighted militarisation as a threat to a democratic society.

This is the first time that Sri Lanka is undergoing such broad militarisation of government processes (Sri Lanka Army, n.d.; EconomyNext, 2021), which has had a strong impact on civil servants and the business community. One fifth of the presidential task force in Sri Lanka, responsible for formulating the country’s post-COVID economic response, was from the armed forces. Sri Lanka’s credibility as a free and open society has also been affected (Tracking Militarization in Sri Lanka, n.d.).

This model is reflective of the CPC model of centralised command control. In April 2021, a Military Assistance Protocol was signed during Chinese State Councillor and Defence Minister General Wei Fenghe’s visit to Sri Lanka (Ministry of Defence Sri Lanka, 2021). During the visit, President Rajapaksa expressed his interest in “governing experience from the Communist Party of China on poverty alleviation and rural revitalization” (CGTN, 2021). The multiple bilateral defence agreements between Sri Lanka’s military and the People’s Republic of China is a clear indication of the latter’s deepening influence on the civil-military balance in Sri Lanka.

China’s influence on Sri Lanka’s foreign policy

The “balanced and nonaligned” foreign policy of Sri Lanka, articulated in President Gotabaya’s election manifesto (Rajapaksa, n.d.), is struggling to maintain a balance due to the growing Chinese sphere of influence. The government’s earlier position that it will revisit the Chinese Hambanthota port 99-year lease agreement was mere rhetoric that never materialised (Bloomberg, 2019). In reality, the government prefers to hedge, executing two contradictory policies simultaneously hoping for one to materialise support. The decision to hedge with China and India while being rhetorically neutral can have serious policy consequences, including the erosion of the country’s principal values and commitments to international law, democracy, and human rights due to the acceptance of an alternative to the existing democratic liberal model.

The CPC is busy making inroads into Sri Lanka, influencing Rajapaksa’s SLPP as well as think tanks such as Pathfinder Foundation in Colombo. In 2020, Pathfinder Advisory Services signed a Memorandum of Understanding with Chinese telecom provider Huawei to establish a framework to jointly develop ICT solutions for ports, airports, education, and agriculture in Sri Lanka (Daily FT, 2020). At the conference of the ‘China-Sri Lanka Political Parties Belt and Road Consultation Mechanism’ on June 11, 2020, Pathfinder Foundation recommended a book titled Prevention and Control of COVID-19 by Dr. Zhang Wenhong to the health sector of Sri Lanka to explain the “health procedures recommended by the book are beneficial for more than just coping with COVID-19, but are also essential in sustaining a healthy Sri Lankan society” (Hui, 2020b).

The strategic community is being led by a China-favouring group of public intellectuals who continue to support China’s growing influence (Daily News, 2020b; Xinhua, 2021). There are clusters of such public intellectuals who are being given more prime time and have significant media coverage. Their arguments have helped sway public opposition against the development of the ECT and have fanned growing anti-India sentiments.

Thus, Sri Lanka has shifted from a balanced policy with India toward a hedging foreign policy with China. Seen as a strong future power in the region, it is departing from a balanced foreign policy. The above-described public intellectuals support such a deviation. This raises reasonable questions as to whether their activity is linked to CPC-related initiatives. As Stephen M. Walt points out in his work The Origins of Alliances, “the weaker the state the more likely it is to bandwagon rather than balance” (Walt, 1987). Deteriorating economic conditions, with multiple miscalculated strategic choices and the continued militarisation of government functions, will further reduce Sri Lanka’s options, creating greater opportunities for the CPC to expand its influence within the Sri Lankan sociopolitical network.

With the present political crisis, where three cabinets were appointed in two months in April and May 2022, there is a direct impact on Rajapaksa’s semi-autocratic political model and foreign policy, especially toward China (Gupta, 2022; Al Jazeera, 2022). The proposed structural adjustment to the Constitution, the 21st Amendment, which will revise the earlier 19th Amendment and shift power toward the legislature, will help redemocratise the political environment (PTI, 2022).

Push and pull factors

Chinese push factors for a CPC model in Sri Lanka are evident from high-powered delegation visits such as the seven-member delegation led by Yang Jiechi, Politburo member of the CPC Central Committee, in October 2020 (ColomboPage, 2020c). China is using its already well-established diplomatic relationship with the Rajapaksa regime to accelerate BRI projects with more loans and by supporting the ailing economy and pushing its CPC political model (Srinivasan, 2021).

The Chinese embassy in Colombo plays a critical role in this strategy, actively engaging on social media and promoting an alternative model in Sri Lanka. China’s endorsement of a particular kind of regime in Sri Lanka is clear; supporting the militarised model and voting in favour of Sri Lanka at the United Nations Human Rights Council resolution in Geneva are clear push factors from China. China is clearly pushing for an alternative political model, accelerating with the CPC centenary and founded on close historical and present associations at the political party level. China will also push at different government levels, including at the public sector and bureaucratic levels, on training for public sector efficiency (Sri Lanka Institute of Development Administration, n.d.). Another evident push factor of the Chinese political model involves media personnel, academia, and think tanks (Colombo Gazette, 2020b; Daily FT, 2018). According to a Chatham House report, Chinese State-Owned Enterprises have been actively involved in shaping Sri Lankan policies in labour, environment, and local institutions (Wignaraja, et al., 2020).

After China backed Sri Lanka by voting against the UNHRC resolution, Sri Lanka’s Foreign Secretary Jayanath Colombage, clearly expressed that the resolution was a “Western conspiracy” against the nation (Tamil Guardian, 2021). This assessment has accelerated a pull from the Sri Lankan government to adopt the Chinese model. The telephonic conversation between President Xi and President Gotabaya Rajapaksa after the UNHRC resolution provides a clear indication of this—President Rajapaksa thanked China for its support at the UNHRC and further explained, “The eradication of poverty is my prime concern for which we can take a cue from China.” The Chinese development model is to be emulated in the provincial areas of the country to bring development (Daily News, 2021), perhaps to support President’s ‘Gama Samaga Pilisandara’ (Direct Dialogue with the Village) initiative (Daily News, 2020c).

This strong pull factor will go beyond existing infrastructure diplomacy. Hambantota Port and Port City and their new laws are clear indications that China intends to stay on the island for a long time. The current development model in Sri Lanka, including its important component of majoritarian militaristic politics, shows a growing inclination towards the CPC’s development model and politics.

Conclusion

The strongly majoritarian government elected in Sri Lanka in 2020, comprising President Gotabaya Rajapaksa and his brother, Prime Minister Mahinda Rajapaksa, promised political reform, ranging from constitutional change to moving power from the legislature to the executive. Unsurprisingly, the political influence of the CPC in Sri Lanka has accelerated since then. The IDCPC has played a considerable role in the administration of Sri Lanka by President Rajapaksa and the ruling political party, SLPP. The partnership and strategic positioning of the SLPP and IDCPC have created an active affinity to adopt China’s political and economic development model.

There have been changes in Sri Lanka’s foreign policy, from a balanced foreign policy to a hedging one with China. The heavy militarisation of government functions, and the weaponisation of trade unions against multilateral development projects with India, Japan, and the United States, are all symptoms of this trend.

These symptoms indicate a growing domestic shift toward a more centrally controlled form of government, contrary to democratic principles, in a semi-autocratic model accepted by China. This political shift toward a semi-autocratic model has had significant consequences for Sri Lanka and the region. Under the Rajapaksas, the CPC’s approach fits well and will have long-term implications for the nation’s already frayed democratic fabric. How far this trend will continue will depend on the domestic political climate.

Table 1: Exchanges between CPC and political parties in Sri Lanka

Acknowledgement

The author thanks Shruti Jargad for developing the table, “Exchanges between CPC and political parties in Sri Lanka.”

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Globally, party-to-party diplomacy has been an integral part of China’s foreign policy since the 1950s, and, in recent decades, it has become more visible, especially in Nepal. China has been increasingly using party channels as vehicles of authoritarian learning, seeking ideological closeness with political parties that can influence state-to-state relations and provide ease of access for high-level decision-making. However, these attempts at collaboration with political parties, through ideological training, party exchanges, and visits with ideologically-aligned parties, have at times created turmoil among Nepali political elites. This chapter analyses the impact of party relations on Nepal’s domestic politics and, subsequently, how Nepali political parties view their cooperation with China. This study features primary interviews with political party leaders, public intellectuals, and stakeholders along with a desk review of key events in party relations. The chapter concludes that party-to-party relations have helped expedite Sino-Nepal cooperation, however, failure of political parties to align their own interests with the national interest has not only led to disruptions in overall party-to-party cooperation but is also a source of domestic conflict.

Introduction

After establishing formal diplomatic relations in 1955, the relationship between China and Nepal has evolved to extend beyond a historical exchange of culture and religion to extensive economic cooperation and state-to-state relations. China’s first assistance to Nepal was the funding of US$ 12.6 million in support of its first five-year plan (1956–1960) (Pant, 1961). Since then, six decades of Sino-Nepal relations were limited largely to small-scale aid donations with public diplomacy outreach restricted to state-to-state relations. It was only in 2015 when India’s unofficial blockade on the southern border drove Nepali political elites to favour China that Sino-Nepal engagements witnessed an acceleration. Not only was the Chinese humanitarian aid to Nepal after the 2015 earthquake the largest ever provided on foreign soil (Tiezzi, 2015), but other areas of public diplomacy, such as education, culture, and political exchanges, also saw greater cooperation. Around 114 political visits were recorded between Chinese and Nepali leaders and 15 party-to-party official visits between 2000 to 2017—the most by the Communist Party of China (CPC) among political parties of any country in the South and Central Asian region (Custer, et al., 2019).

China attempted to foster greater ideological closeness between the CPC and Nepali political parties—in particular the Nepal Communist Party (NCP)—through high-level meetings during the Chinese Peoples’ Political Consultative Conference in 2016, and workshop on Xi Jinping thought for socialism with Chinese characteristics with 200 NCP leaders in 2019 (Bhattarai, 2019b). According to Pal (2021), China “clearly accords considerable significance to having an ideologically-aligned counterpart in Nepal’s power structure” thus increasing overall Sino-Nepal engagement. It can also be seen as influenced by the ideological affinity of the two communist parties.

Globally, party-to-party relations have been an integral part of China’s foreign diplomacy since the 1950s, and in recent decades, this has only become more evident. Hackenesch & Bader (2020) argue that China increasingly uses party channels as a vehicle of authoritarian learning “by sharing experiences of its economic modernization and authoritarian one-party regime.” Yet, questions about the impact of party-to-party relations on Nepal’s domestic politics, and how Nepali political parties view their inter-party cooperation with China, remain. These questions go beyond the normal understanding of bilateral state-to-state relations and, thus, open a new avenue to understand party diplomacy as an important tool in foreign policy cooperation.

By conducting 10 primary interviews with bureaucrats, leaders of political parties, journalists, and public intellectuals, along with secondary source analysis of key reports, news articles, journals, video interviews, and so on, this chapter attempts to fill the gap in our understanding of evolving inter-party relations as a key consideration in foreign policy, especially when examining China’s global influence.

Party-to-party cooperation as China’s foreign policy

Since the founding of the Communist Party of China in 1921, its foreign affairs department has played a key role in the development of the party and the nation. The department sought to cultivate “political party orientation and internationalisation”, which helped build the guiding principles and framework for the Party’s foreign affairs work (Yang, 2021).

After 1949, the Party sought to establish foreign relations with Communist parties and left-wing organisations in socialist or non-socialist countries for “safeguarding nation’s independence and sovereignty” (Zhong, 2007). The Party’s increasing focus on integrating with state activities, with party secretaries playing a pivotal role, made it indistinguishable from the state (Brødsgaard, 2018; Thornton, 2021). Party-to-party relations, thus, became an integral component of China’s overall foreign policy—the CPC went on to establish relations with more than 400 political parties and organisations in over 160 countries around the world (Xinhua, 2021).

Party ties help strengthen state relations. In the case of China, it has helped bolster engagement with influential political actors in other countries, even more so if the political leaders are of the ruling party, allowing China to influence high-level decision-making. While the CPC is not keen on exporting its ‘China model’ overseas, it has been active in promoting it.

The mode of training largely involves capacity development of political leaders. Sun (2016) identifies three universal components of the CPC’s political party training programme: 1) lectures at Chinese institutions or universities, 2) field trips to local government(s) in China, and 3) cultural programmes promoting Chinese culture. In addition, attempts have been made by the CPC to train political elites abroad in ‘Xi Jinping thought’, highlighting the “virtues of strong centralized leadership” in developing countries and at various bilateral forums (The Economist, 2020; Li, 2019).

The focus is more on learning about the role of CPC’s governance in China’s development and then drawing inspiration to replicate such experiences in their own countries. Yet, does CPC maintain different kind of relationships with different political parties? Or are there common attributes to the CPC’s approach regardless of which party is in power? One way to understand the narrative is to focus on the CPC’s current leadership’s emphasis on party loyalty, and whether or not the same is expected of the coalition of parties it is building abroad.

Under President Xi, political loyalty has become an important aspect of diplomacy for party legitimacy, both domestically and with foreign political parties, which helps construct an international environment conducive to the CPC (Rabena, 2021). China has become more assertive under Xi Jinping, yet it seeks to maintain a “peaceful” environment overseas by increasing its number of friends, i.e., political parties (Loh, 2018). This model of ‘peaceful’ development for shared prosperity while openly rejecting ‘Western-centric’ development is attractive for many countries’ political parties that seek to engage in long-term cooperation with China.

However, the factors affecting the longevity of party-to-party relations are not limited to ideology. They are profoundly dependent on the position of the ruling party in the governments of developing countries, coupled with various other geopolitical considerations. These components need to be considered when evaluating how a political party’s relationship with the CPC impacts economic and political cooperation, and development programmes.

Overview of Sino-Nepal party relations

After the founding of the People’s Republic of China in 1949, and the establishment of democracy in Nepal in 1951, party relations played an important role in establishing diplomatic relations between the two countries. In 1953, Gauri Bhakta Pradhan, a representative of the Communist Party of Nepal, left for Beijing, where he received 10 months of political and ideological training at the CPC headquarters (Baral, 2021). Party-to-party relations became a stepping stone in formalising diplomatic relations in 1955, when he facilitated Prime Minister Tanka Prasad Acharya’s official visit to China (Nepalpage, 2021). After King Mahendra’s panchayat regime in 1960, the CPC considered the monarchy a stable force and, thus, cultivated close ties with the palace.

While the CPC maintained occasional party exchanges,[1] it kept intact the policy of “non-interference” because of its concern for Nepal to maintain stable relations with India. According to Zeng, when the Nepali parliament delegation visited China in 1963, the former ambassador of China to Nepal, Chairman Mao told the Nepali delegation “When it came to external relations, you should also properly handle the relations with your southern neighbor” (2016). Yet, as Nepal’s relations with India deteriorated in 2015 after the blockade, the Nepali political elite sought to turn to China, which eventually broke India’s monopoly on trade with Nepal and provided China leverage while participating in Nepal’s political and economic developments (Giri, 2018).

Impact of the CPC and NCP party-to-party relations

Since Jana Andolan II, also known as the People’s Movement II, which led to the downfall of the monarchy, perhaps no other incident had united almost all major political parties of Nepal as India’s unofficial blockade imposed in 2015.[2] Popular Nepali sentiments reflected a disdain towards India’s foreign policy in Nepal as the blockade restricted the supply of essential goods to Nepali citizens. The dire fuel shortages resulting from the blockade prompted China to provide Nepal with 1.3 million litres of gasoline, thus winning some of the goodwill that India had lost (Wagle, 2016).

In stark contrast to Delhi’s high-handed approach towards Nepali politicians, China’s subtle diplomacy, which was respectful of Nepali sensitivities, won it several allies. This included the three major political parties, i.e., the Nepal Communist Party (United Marxist-Leninist), Nepal Communist Party (Maoists), and Nepali Congress (Jha, 2021; Mulmi, 2021). This unity led to the NCP’s landslide victory in the 2017 elections. K. P. Oli was reinstated as the prime minister of Nepal, which became a stepping stone for CPC-NCP party relations.

Growing disdain against India led the Chinese to cultivate friendlier ties with all the major political parties. Qun & Wu (2017) propose that for non-communist parties, especially the Nepali Congress, developing friendly ties with the CPC would help “offset the pro-India color of the Congress party and win support of more voters in political process.” Yet, no relationship became as significant as the one between the CPC and the NCP — a communist ruling party on both sides allowed for enhanced cooperation.

The potential for a growing relationship was evident in the 2016 NCP feud between Pushpa Kamal Dahal (Prachanda) and Oli, when the Global Times ran an op-ed saying that the Chinese were concerned about “being treated as a card only when Kathmandu’s relations with New Delhi are at low” (Xu, 2016). This was emphasised time and again indicating the CPC’s desire to maintain the stability of the ruling party in Nepal. The unity and victory of the Communist Party of Nepal (CPN)-Maoist and Communist Party of Nepal United Marxists Leninist (CPN-UML) in the 2017 elections started an era where party relationships became a decisive factor in foreign policy and Nepal-China relations.

For instance, the decision to award the contract for the 1200 MW Budhi-Gandaki hydropower project to the China Gezhouba Group Corporation (CGGC) was changed four times during the reign of four prime ministers.[3] In May 2017, under the leadership of CPN-Maoist’s Prachanda, the government decided to award the project to CGGC. However, in November 2017, the new prime minister, Sher Bahadur Deuba (Nepali Congress), revoked the contract to mobilise domestic resources. In 2018, Energy Minister Barsaman Pun (CPN-Maoist) expressed a desire to reinstate cooperation on the project with China, stating, “We are willing to cooperate with China, whether it’s through intergovernmental cooperation mechanism or accepting preferential loans from China” (Joshi & Pakar, 2018).

The Chinese preference for the unification of the “left government” (Jha, 2016), along with Oli’s electoral promise of awarding the contract to CGGC, do not indicate an alliance of two parties based on shared values or a common agenda but rather a move to consolidate votes that ultimately favoured the Sino-Nepal engagement (Adhikari, 2017). We asked Keshav Pandey, who is a member of parliament and previously the head of the foreign affairs department of the NCP, what he thought of CPC stressing the importance of NCP’s stability. He stated:

“One thing I like about them (CPC) is that they do not wish to harm other neighbourhood parties. Instead, they see them as their own neighbour and always strive for peace and prosperity. Previously, the NCP were two political parties, and once they merged, it signalled a positive message to CPC and they have looked forward to more cooperation.”

Yet others have put forward a different opinion. Hari Sharma, a prominent public intellectual of Nepal, argued that “Communist parties in Nepal have more of a fraternal relation — in terms of ideology. However, there is an unequal relationship between Nepali political parties and the CPC—it is mostly transactional as to who gets what.”

The party-to-party relationship was more pronounced on the morning of September 24, 2019, as Prachanda and Oli were in a state of disagreement over power-sharing. Song Tao, head of the International Department of the Communist Party of China (ID-CPC), and Madhav Kumar Nepal, previous head of the foreign affairs department of the NCP, exchanged a bilateral agreement that formalised the relationship between the CPC and the NCP.

The CPC’s relationship with the NCP deepened after its members were trained in “Xi Jinping thought”, with more than 200 NCP and 40 ID-CPC members participating in the workshop (Himalayan News Service, 2019). Thereon the Chinese pursued active engagement in Nepal’s political atmosphere, which was new for Nepali politicians as well as across public discourse. CPC saw the communist alliance, bolstered by party unification, as conducive to the future of bilateral relations, a sentiment that only added to New Delhi’s anxieties (Upadhya, 2021).

The alliance received mixed reactions. Regarding the training workshops, some analysts were quick to argue that such an engagement “is likely to deprive Nepal of its independent and free decision-making” (Kaphle, 2019). Initially, the Nepali Congress objected to the training on the grounds that it would interfere with Nepal’s sovereignty and the Nepali Congress deemed the training program as irrelevant. Shekhar Koirala, a key figure in the Nepali Congress party, and a relative of B. P. Koirala, emphasised the need for party-to-party cooperation but warned Nepal to carefully guard itself against foreign policy fallacies and maintain a fine balance (Paudyal & Koirala, 2019). Raj Kaji Maharjan, a provincial member of the parliament and a member of the NCP, argued that such training was important for strengthening the party vision and was a system that works well. When we asked him what the implications of such exchanges could be, he said:

“The future of party relations also depends on mutual understanding and respect for each other. If you have a party that does not understand China or the governance of China, then there will be further challenges. CPC’s cordial relations with the NCP are a sign of a deeper connection, there are greater prospects for development and cooperation in future.”

The CPC-NCP relation cemented the importance of developing Sino-Nepal economic cooperation and development through party ties. This was made clear in 2020 when the NCP was on the verge of splitting again, and the ID-CPC sent its vice-minister, Guo Yezhou, to Kathmandu to conduct several meetings after Oli dissolved the parliament. His visit reaffirmed the “belief that China had preferred a government under a unified NCP; with new political calculations, however, China is now keen that it remains assured of its key interests in Nepal” (Giri, 2020b).

Although it is a party-to-party relationship, the CPC-NCP forms a part of the larger bilateral web between the countries. In one of the informal discussions, we were reminded that the Chinese ambassador to Nepal takes part in NCP meetings as a CPC representative. All of this has led to the elevation of ties between the two parties. While the CPC advocates for uniformity in its relationship with political parties, its NCP tie-up has raised eyebrows among other politicians. The two communist parties’ tie-up in 2019 was viewed by the Nepali Congress as a way of dismantling Nepal’s ‘non-alignment’ policy and even gave rise to speculations that NCP would fully incorporate the CPC’s model of governance (Poudel, 2019a). The situation escalated to the point that the then general secretary of the NCP, Madhav Kumar Nepal, had to provide assurances that it was a mere fraternal relation and that the NCP did not aim to copy the CPC’s governance style (Poudel, 2019b).

In the case of China’s foreign policy, developing countries that have strong party-to-party relations with China are better able to promote their foreign policy interests. When President Xi met with the NCP co-chairman Prachanda during his official visit to Nepal in 2019, both leaders emphasised strengthening party building and state governance for a long-term relationship to “help Nepal achieve national development and prosperity” (Xinhua, 2019). From the CPC’s perspective, “as the governing party, the interest of the CPC’s is identical with those of the state” (Zhong, 2007). In this sense, party relations can reinforce government ties: they provide additional means to achieve the same ends (Hackenesch & Bader, 2020).

To understand how the ruling party maintains a balance between party-to-party and government-to-government relations, we talked to the then finance minister of Nepal in 2020, Bishnu Poudel, who is also the general secretary of the NCP, on the difference between party-to-party and state-to-state cooperation for the ruling party in a multiparty democracy like Nepal. He answered:

“Party-to-party relations impact the overall state-to-state relations. We should keep sharing our experiences and maintain friendly relations between the NCP and the CPC. Being the ruling party, the NCP and CPC party as well as government relations have been moving forward smoothly. However, for party relations, we intend to take it through the party-to-party channel and do not link it too much with the state-to-state channel, as the state has its procedures.”

He emphasised that while state-to-state relations are crucial in encouraging investment flows and ensuring the sustainability of projects, it is the party-level diplomacy in Nepal that helps in sharing experiences and creating an enabling environment to promote such cooperation.

Yet, Rajan Bhattarai, who was the chief foreign policy advisor to the prime minister from 2018 to 2021, argues that party-to-party relations are a part of people-to-people relationships. According to him, in countries where people-to-people relations are better, its positive impact is reflected in state-to-state relations. In the context of China, he argues that party relations help support state relations, and if all political parties of Nepal can build a consensus on how to maintain relations with China, then there will be no issues in dealing with China, regardless of who is in power.

Nepali politicians, particularly those of the NCP, have oriented themselves to learning from the CPC and its governance. In 2019, a 15-member team of the NCP, led by Dev Gurung, visited China at the invitation of the CPC, where Chinese leaders shared their experience of “winning the hearts and minds of people and strengthen party’s organizational base” (Bhattarai, 2019b). Similarly, the CPC argues that for China to build even a moderately prosperous society, it must, firstly, establish friendly relations with political parties abroad and institute friendly dialogues.

The CPC, thus, projects itself as a reliable friend, ready to assist in times of need but mostly aiming to fulfil economic objectives. For instance, in 2020, the CPC and major Nepali political parties established a consultation mechanism for political parties on the Trans-Himalaya Connectivity network, an initiative to strengthen practical cooperation in the fields of “agriculture, economy, trade, tourism and culture and jointly promote the Belt and Road Initiative” (Ma, 2020). Party relations, thus, transcend beyond strengthening economic cooperation.

This notion was also shared by Yashoda Gurung (Subedi), a member of parliament and central committee member of the CPN-Maoist, who described the importance of party relations in government activities as:

“the party is the brain/mind and the government is the hands and legs. This is what we have to learn from China. It is not an individualistic concept as the government is governed by a party, not by a party member. CPC and NCP can help each other as they have ideological and emotional connections but we [NCP] can utilise the opportunity for building better party relations as well.”

However, party-to-party relations also come with challenges. As both are ruling parties, if the NCP and CPC relations do not reflect Nepal’s national interests, it will be difficult for relations to prosper. Krishna Khanal, former foreign policy advisor to late former Prime Minister Girija Prasad Koirala in 1999, recounts the experience of the former ambassador to China, Yadunath Khanal, who said:

“It is hard to understand Chinese’s reaction [4] towards political development in Nepal. It could be mostly due to Nepal’s political instability and the unstable system makes it complicated for the Chinese to maintain such relations.”

If the parties do not realign their party relationship with national interests, it will result in the downfall of the overall party-to-party relationship. As CPC seeks to maintain good working relations with all the political parties, it is also important for the ruling party to promote national interests in attaining its foreign policy goals.

Conclusion

Party diplomacy in Nepal has produced mixed results. Despite CPC’s ‘quiet diplomacy’ in Nepal, which exposed its preference for ties with the NCP, it will continue to undertake party relations to maintain unity among the communist parties of Nepal. Yet, it also presents an opportunity to create ripple effects as other political parties will be tempted to expedite their party relations with foreign political parties, which can bring innumerable challenges. In our final round of interviews with former Prime Minister Sher Bahadur Deuba in 2020, when he was President of the Nepali Congress, he stated that without adequate preparation and clarity in identifying needs concerning national interests, party interactions will not yield adequate results.

For China, party relations constitute an important component of overall bilateral state relations. Previously, the CPC’s relation with foreign parties was mostly to learn from advanced democracies, while power politics and propaganda were considered supplementary (Shambaugh, 2007). But China has grown stronger over the years abandoning its ‘quiet diplomacy’, and, hence, elite party relations and politics have become an integral component of the CPC’s foreign policy. The challenge remains as to whether, in China or Nepal, a particular political party can adequately promote national interests in bilateral engagements with the political parties of other countries, and whether engagements such as those promoted and developed by the ID-CPC supplement overall state-to-state relations or only end up serving a political party’s interests.

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Religion has emerged as one of the critical soft power tools for many countries worldwide, including China. China has a long history of integrating religion and religious outreach in its foreign policy and diplomacy. This chapter explores China’s use of Buddhism as a soft power tool in Sri Lanka enabling closer ties. It looks at China’s activities in the island state and identifies how Buddhism is used as a foreign policy and diplomatic tool. While China’s use of Buddhism as a soft power tool is a choice and a necessity for the Communist Party of China’s foreign policy objectives, given the nature of China’s economic statecraft, its Buddhist activities are viewed with some reservations.

Introduction

Religion has emerged as a critical soft power tool for many countries. Today, religion and religious outreach activities are integrated into the state’s foreign policy and diplomatic strategy. The manifestations of this soft power tool vary. While some make informal efforts to cultivate religious solidarity and a shared identity through historical and cultural similarities, others use more direct forms such as deploying religious institutions and actors to realise specific foreign policy goals. Countries in the Middle East use Islam to pursue foreign policy objectives (Mandaville & Hamid, 2018a, 2018b). Russia uses the Orthodox Church to expand its cultural and political influence (Petro, 2015; El Ghoul, 2015). India, especially under the leadership of Prime Minister Narendra Modi, has been using Buddhism as an important element of its soft power (Mazumdar, 2018; Scott, 2016; Kishwar, 2018).

This chapter explores how Buddhism is emerging as an important soft power tool in China’s statecraft strategy with Sri Lanka. It also attempts to identify if the use of Buddhism has helped China realise its foreign policy goals. The chapter uses publicly available information to trace China’s activities in Sri Lanka.

China’s Buddhist diplomacy

China has a long history of using Buddhism as a tool of diplomacy. Even though religions were vehemently attacked after the Communist Party rose to power in 1949, and its adherents persecuted during the Cultural Revolution, Mao Zedong used Buddhism to persuade foreign nations that the religion was thriving under communist rule, hoping that their Buddhist constituencies would push their respective governments to adopt pro-China foreign policies (Zhe, Fisher, & Laliberté, 2019, p. 27). It was with this objective that the Buddhist Association of China (BAC) was set up in 1953 (Zhang, 2013).

With China’s opening up in 1978, the government became more tolerant of religious faiths and slowly employed them in statecraft to boost Chinese soft power. During the post-Mao era, Beijing employed Buddhism as a diplomatic tool to enhance its relationship with South Korea and Japan, when China organised a Buddhist Friendly Interaction Conference between the three countries (Scott, 2016; Zhang, 2012). Communist Party of China’s (CPC) party leaders since Jiang Zemin have openly supported the development of Buddhism, making public appearances alongside temples (Ji et al., 2019). Jiang, in 2001, acknowledged that religion could act as a stabilising force in society and could be mobilised as a positive force for national development (Zhang, 2013). Hu Jintao approved the organisation of the World Buddhist Forums in 2006, 2009, and 2012 (Zhe, Fisher, & Laliberté, 2019).

Under Hu’s successor, Xi Jinping, China has accelerated the use and mobilisation of Buddhist diplomacy (Ramachandran, 2019). In 2006, during his time as party secretary of Zhejiang, Xi promoted the first World Buddhist Forum. In 2014, he welcomed the first World Fellowship of Buddhists meeting in Baoji. In March 2014, addressing the United Nations Educational, Scientific and Cultural Organization (UNESCO) in Paris, President Xi praised how Buddhism had impacted China. He went on to say that after the religion spread from India, it went through an extended period of integrated development with Confucianism and Taoism. He noted that Buddhism in China had “Chinese characteristics” and has profoundly impacted religious beliefs, philosophy, literature, art, and customs (Ministry of Foreign Affairs of the People’s Republic of China, 2014).

China is also involved in the Common Text Project undertaken by the International Council for the Day of Vesak under the stewardship of Maha Chulalongkorn University in Thailand (Asian News International, 2018). It is active in international Buddhist organisations such as the World Fellowship of Buddhists and the World Buddhist Forum. It hosted the 5th Session of the World Buddhist Forum in 2018 in Fujian with over 1,000 Buddhists, scholars, and representatives from 55 countries and regions (Ramachandran, 2019).

Buddhism represents one of the pillars of the Chinese tradition, which the CPC claims it aims to preserve (Laliberté, 2011). As a result, China is introducing a Buddhist narrative into its diplomacy despite being a self-proclaimed atheist country.

Historical China–Sri Lanka Buddhist relations

China and Sri Lanka’s shared Buddhist relations are centuries old. They have continued throughout different historical periods and kingdoms of Anuradhapura (377BC – 1017AD), Polonnaruwa (1017 – 1232 AD), Yapahuwa (1273 – 1284AD), Kurunegala (1287 – 1332AD), Kotte (1412 – 1597AD), and Kandy (1469 – 1815AD).

The earliest Buddhist connection between the two countries was when the Chinese monk, Fa Xian visited ancient Sri Lanka. According to his travel journal, Records of the Buddhistic Kingdoms (also knowns as Fo Guo Ji or The Travels of Fa-hsien), he spent two years in the monastery of Abayagiri Viharaya of Anuradhapura studying Buddhism. According to local legends, Fahian Gala cave (also known as Pahiyangala) and Fahian Temple in Kalutara allegedly got their names as Monk Fa Xian spent his days here during his visit to the island.

Inspired by Monk Fa Xian, another scholar-monk, Xuanzang (664 AD), set off on a voyage to Sri Lanka during the Tang dynasty. Even though he could not make it to Sri Lanka, his travelogue made frequent references to the island nation (Mendis, 2017). Both Monk Fa Xian and Monk Xuanzang’s travelogues became crucial sources of information for archaeologists in the nineteenth century to unearth Buddhist sites and unveil Buddhist history (Zhang, 2013).
The inscription on the stele found in 1911 of Zheng He’s mission states that he paid tribute to a local Buddhist temple on the mountains of Sri Lanka (which could possibly be Adam’s Peak according to historians), which is yet another example of the historical Buddhist links between the two countries (Senanayake, 2018; Wang & Ye, 2019: Daily FT, 2012). Sri Lanka was among the destinations where the emperor Zhu Yuanzhang (1368-1398) of the Ming dynasty sent two diplomatic missions led by Buddhist monks (Zhang, 2013). Similarly, a Sri Lankan monk Dharmaduta voyaged to Nanjing during the reign of Emperor Xiaowe (471-499 AD) (Senanayake, 2018; Bastiampillai, 1990).

Dual ordination procedures transmitted to China from Sri Lanka provide evidence of Sri Lanka’s influence on the development of Buddhism in China. More than a dozen Sri Lankan Buddhist nuns arrived in Nanjing through a mercantile ship and ordained 300 Chinese nuns in the fifth century, establishing the Bhikkuni order in China (Zhang, 2013; Bianchi, 2019; Heirman, 2001).

It is to be noted that Buddhist ties between the two countries were dormant during the period when Sri Lanka was a colony under the European powers—Portuguese (1597 – 1619), the Dutch (1658 – 1796), and the British (1796 – 1948). Since gaining independence, Sino–Sri Lankan relations have been revived, but Buddhist ties have not experienced the same progress. This could be a result of the political changes within China. The Cultural Revolution, waged between 1950 and 1979 in China, featured anti-religious campaigns, and all churches, mosques, and temples were closed. In recent years, the gradual development of Buddhist exchanges between Sri Lanka and China reflects changes in religious policies in post-Mao China. For instance, when modern China looked to re-establish dual ordination in the 1980s, China turned towards Sri Lanka again (Bianchi, 2019, p. 163). Additionally, in November 1986, five student monks from the Buddhist Academy of China were invited to study in Sri Lankan universities for five years and received bachelor’s and master’s degrees with distinctions (Zhang, 2022, p. 15).

China’s recent Buddhist diplomacy in Sri Lanka: Engaging with the community

The slow and steady growth in China’s and Sri Lanka’s Buddhist engagements and exchanges synchronises with Beijing’s use and mobilisation of Buddhist diplomacy during President Hu’s tenure. It also coincides with Beijing’s gradual foray into Sri Lanka since 2005.

One of the most important meetings was in March 2007, when President Mahinda Rajapaksa visited China at the invitation of President Hu, commemorating the 50th anniversary of establishing diplomatic relations. During the visit, the two countries discussed increasing exchanges in the form of Buddhist activities, including sending Sri Lankan delegations to the World Buddhist Forums. The Chinese welcomed Sri Lanka’s proposal to establish an International Buddhist Zone (Ministry of Foreign Affairs of the People’s Republic of China, 2007). Since then, there have been numerous interactions and exchanges between Buddhist communities in Sri Lanka and China. For instance, in May 2018, a senior delegation led by the Sri Lanka Buddhism minister visited Beijing. Both sides promised to strengthen Buddhist exchanges and cooperation (Zhang, 2022, p. 17).

There is limited information available in the public domain on the frequency and regularity of exchanges between the Buddhist communities in the two countries. However, the limited existing information shows an increase in the number of exchanges. These exchanges are mainly of two kinds: interactions between the Buddhist monks from China and Sri Lanka and Chinese engagement with the Buddhist community through the Sri Lanka-China Buddhist Friendship Association (SLCBFA).

Interactions among Buddhist monks

Since 2015, there has been a significant improvement in Buddhist ties between the two countries. This could be attributed to President Xi’s state visit to Sri Lanka in September 2014 and the 60th anniversary of establishing diplomatic relations in 2017.

In 2015, an exchange programme organised by the Chinese Embassy in Sri Lanka facilitated 100 Chinese Buddhists to visit Sri Lanka and 150 Sri Lankan Buddhist monks to visit China (The State Council of The People’s Republic of China, 2015). In the same year, on October 24th and 25th, a 25-member delegation from Sri Lanka participated in the 4th World Buddhist Forum jointly organised by the BAC and the China Religious Cultural Communication Association in Wuxi, Jiangsu Province of China. The Sri Lankan delegation included representatives from the Asgiri, Malwathu, and Amarapura Chapters, which are the leading Buddhist monastic fraternities of Sri Lanka (news.lk., 2015). Athuraliye Ratana, a parliamentarian and an influential monk in Sri Lanka’s domestic politics, was part of the delegation. Since then, the Sri Lankan delegation has frequently participated in World Buddhist Association events.

2015 also saw several visits by Chinese delegations to Sri Lanka. In May 2015, Ming Sheng Thera, vice president of the BAC and president of Guangdong Provincial Buddhist Association of China, visited Sri Lanka with a 30-member delegation. They met with Sri Lankan President Maithripala Sirisena and the chief prelate of the Ramanna Nikaya (Embassy of The People’s Republic of China in the Democratic Socialist Republic of Sri Lanka, 2015).

In 2016, a Sri Lankan delegation attended the first “Summit Forum of Theravada Buddhism” that was held in Xishuangbanna, Yunnan (Zhang, 2019). The forum is considered an important beginning for revitalising Theravada Buddhism in China, and this visit, therefore, marks an important landmark in growing Buddhist ties between Sri Lanka and China. Given the involvement of Sri Lanka’s leadership in practising and promoting Theravada Buddhism globally, this emerged as a new avenue for the two countries to engage. In 2017, Chinese monk Yin Shun led a delegation to take the relic of a Chinese Buddhist monk, Benhuan, to Sri Lanka to be worshipped (Zhang, 2022, p. 17). Monk Benhuan is a Chan master and a religious leader, the first abbot of the Honga Temple in Shenzhen, and the honorary president of the BAC between 2010 and 2012 until his death. In the same year, a nine-member delegation led by Guangquan, the deputy secretary-general of the BAC, the dean of the Hangzhou Buddhist Academy, and the abbot of Lingyin Temple in Hangzhou, and Qingyuan, director of the Tibetan and Southern Buddhism Office of the BAC visited Sri Lanka on the invitation of the Buddhist and Pali University of Sri Lanka (shandongfojiao.cn, 2017). In 2018, during the visit by Sri Lanka’s Buddhism Minister Gamini Jayawickrama Perera to pay homage to the Lord Buddha’s Relics at the Ling Guan Temple in Beijing, he met with senior Chinese Buddhist monks (Sri Lanka China Buddhist Friendship Association, n.d.c).

These exchange visits have paved the way for the two countries to reminisce about their long history and build good relationships and friendships among the countries’ Buddhist societies. They have opened avenues for China to build a fraternity within the Theravada Buddhist community.

However, what is most important is how these exchanges have led to the building of connections between Buddhist fraternities that have access to and influence domestic politics in Sri Lanka. Asgiriya Maha Viharaya is one of the chief Buddhist monasteries and the custodians of the sacred tooth relic of Buddha kept in Sri Dalada Maligawa. It is also the headquarters of the Asgiriya Chapter of Siyam Nikaya. [1] These temples and fraternities significantly influence Sri Lanka’s domestic politics.

The BAC is similarly established in China and operates under the patronage of the Chinese government. While it may have a limited influence on Buddhist citizens in foreign countries, its local temples, devotee associations, and delegations have used their contacts and exchange visits to develop relationships and fraternity with other Buddhist communities (Zhe, Fisher, & Laliberté, 2019, p. 24). For example, Sri Lanka was invited to the meeting hosted by China to discuss cooperation among Buddhist communities in the Lancang-Mekong region to combat COVID-19 and improve people’s livelihoods (Xinhua, 2021).

Engagement with the Buddhist community via the Sri Lanka-China Buddhist Friendship Association

China’s Buddhist diplomacy has even gone beyond engaging with monks and religious leaders. In 2015, the SLCFBA was established (Pal, 2021). According to its website, it was inaugurated in the presence of Sri Lanka’s chief monks from all Nikayas and Ming Sheng Thero during his visit in 2015. The website notes that the SLCBFA “has embarked on a journey to develop historical Buddhist friendship between Sri Lanka and China that spans the gulf of time, harkening back to several centuries” (Sri Lanka-China Buddhist Friendship Association, n.d.a).

The Association is engaged in various charity services and activities such as providing dry rations and IT equipment to poor families and communities (Chinese Embassy in Sri Lanka, 2020; Sri Lanka-China Buddhist Friendship Association, n.d.b). It also carries out small public service projects such as providing purified drinking water (Sri Lanka-China Buddhist Friendship Association, 2016, n.d.d). The Association also promotes Dhamma education in the country by providing materials and equipment such as public address systems, chairs, and desktop computers with printers (Sri Lanka-China Buddhist Friendship Association, n.d.b). According to the SLCBFA website, it receives financial assistance from the Embassy of China to carry out these projects. Representatives from the embassy often inaugurate these projects.

Additionally, the SLCBFA enables Chinese Buddhist temples, societies, and organisations to extend their charity work to Sri Lanka. In 2016, following a massive flood in Sri Lanka, students and families from three schools in the heavily affected Kegalle district received financial assistance worth 300,000 yuan (jjfj.com, n.d.). A total of 130 families benefitted from the stipends and donations provided by Kaiyun Temple in Fuzhou, Kaiyun Temple in Quanzhou, Kaiyuan Zhiye Culture and Education Charity Foundation in Fuzhou, and Kaiyuan Temple Poverty Alleviation and Disaster Relief Public Welfare Association in Quanzhou. The donation was organised by Benxing, the executive director of the BAC, the vice president and secretary-general of the Fujian Buddhist Association, and the abbot of Kaiyuan Temple (jjfj.com, n.d.). More recently, in December 2021, the Association facilitated the distribution of 2,500 gift packs from the China Charity Foundation to students from Dhamma schools.

China’s motivations

China’s religious diplomacy aims to promote international understanding and acceptance of its religious policy (Zhang, 2013). Using slogans such as building a “harmonious world”, China advocates for religious activities and attempts to improve its image. In recent years, China has been using Buddhism as a convenient diplomatic resource (Scott, 2016).

There is both domestic and international impetus for the CPC to promote Buddhism. Domestically, promoting Buddhism internationally would have a strong political appeal for the more than 100 million Buddhist followers in the country. Buddhism is historically rooted in the country and is largely a localised religion. Its doctrines and teachings have become a part of China’s national mentality, bearing strong “Chineseness” or Chinese identity in its cultural diplomacy (Zhang, 2012). Given the importance of the Buddhist demography in Asia, it is reasonable to assume that the flourishing of Buddhism in China could influence Buddhists elsewhere in the region to adopt the view that their coreligionists thrive in China. Therefore, they may conclude that what is good for China is good for Buddhism (Zhe, Fisher, & Laliberté, 2019).

Internationally, Buddhism is seen as a convenient resource given that many Asian countries have a large number of Buddhists (Wuthnow, 2008). China’s desire to use Buddhism as a soft power tool derives from the desire to maintain and expand its leadership role within the third world and reassure other states that its rise is non-threatening and that it is acting as a responsible, system-maintaining power (Wuthnow, 2008). It has used Buddhism to connect with smaller countries like Thailand, Myanmar, and Sri Lanka. Given the prominence of Buddhist communities in these countries, China has invoked Buddhism to identify itself as the most prominent Buddhist country in the world. The Chinese leadership may believe that it can sway public opinion through international religious networks and that Buddhism can play a role in promoting positive relations between China and Asian Buddhist countries like Sri Lanka.

Most importantly, connecting with Buddhist communities is viewed as a way of promoting the Chinese version of Buddhism and counterbalancing the influence of the Dalai Lama and the Tibetan cause outside China. According to critics, China’s single-most important motivation behind its Buddhist public diplomacy is to counterbalance the global popularity of the 14th Dalai Lama and the spiritual leader of Tibetan Buddhism (Ramachandran, 2019). They emphasise that China has vilified the Dalai Lama as a “wolf in monk’s robes” intent on “splitting up China and wrecking ethnic unity to exert strict control over Tibetan political, social, and even religious life” (Ai & Li, 2010; Xinhua, 2011).

That China has spread this message in Sri Lanka is an important aspect of China’s Buddhist diplomacy. Sri Lanka has repeatedly clarified that it will not contradict China’s position on the Dalai Lama. Despite the Dalai Lama being considered the most sacred spiritual leader for Buddhists worldwide, Sri Lanka has repeatedly refused his request to visit the Sacred Temple of Tooth-Relic in Kandy. The Dalai Lama was also not allowed to participate in the Buddha Jayanthi (the year commemorating the 2,600th anniversary of the Enlightenment of the Buddha) celebrations held in 2012. China in 2015 praised the Sri Lankan government for not allowing the Dalai Lama to visit the country (Press Trust of India, 2015). Even the Jathika Hela Urumaya, the country’s only Buddhist-monk-driven political party, seems to ignore the question of inviting the Dalai Lama to Sri Lanka. The former leader of the party, Ellawela Medananda Thera, commented that “in any event, the Dalai Lama is from the Mahayana school of Buddhism, and not from the Theravada form practised in Sri Lanka” (Sunday Times, n.d.). Notably, Sri Lanka emphasises its Theravada identity in its engagement with the Dalai Lama but promotes and engages with Chinese monks who follow a different sect of Buddhism.

Conclusion

For China, engagement with Sri Lankan Buddhist monks and the community is a platform to build fraternity and brotherhood with other sects of Buddhism. The Chinese government understands that China’s Buddhist sect is less influential than Theravada Buddhism or Tibetan Buddhism. For this reason, China may not be able to use its form of Buddhism alone as a tool of soft power.

The impact of this use of Buddhism as soft power is so far unclear. In general, the results of soft power influence cannot be seen immediately. In terms of dealing with the issue of the Dalai Lama, China has managed to convince the Sri Lankan government and the chief Buddhist leaders of its stance. Yet, it is unclear whether this has convinced the larger Buddhist community.

It is also unclear if the shared Buddhist identity has convinced the larger Sri Lankan Buddhist community that China is a benign power. In recent years, Sri Lankans have raised concerns and expressed displeasure over China’s growing economic and political presence in the country, which is observable in the increased number of protests and opposition to Chinese projects (Shepard, 2017). This may prove that Beijing’s Buddhist diplomacy has not been enough to attract, persuade, and appeal to the Sri Lankan community. However, the sources of soft power do not always produce attraction, persuasion, appeal, and emulation (Li, 2011). Culture, ideology, values, and norms also often result in resentment, repulsion, hostility, and even conflict, primarily if a country pursues an aggressive cultural policy (Li, 2011).

For China, using Buddhism as a soft power tool is a choice and a necessity at the moment. For years, Chinese diplomats saw religion as a problem due to the CPC’s atheist policies. However, China now uses Buddhism as an asset to enhance relations. China’s increasing engagement with the Sinhala Buddhist community will likely enhance its image to some extent. Yet, given how China’s economic statecraft is unfolding in the country, its use of Buddhist diplomacy may also be viewed with some reservation.

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Since 2012, when Xi Jinping became general secretary of the Communist Party of China, China’s mediation tactics have moved in a different direction. In 2017, as violence swept across Rakhine State in Myanmar, there was an influx of Rohingya refugees into Bangladesh, placing enormous constraints on the developing country. China has maintained friendly relations with Myanmar, made investments in both Myanmar and Bangladesh via projects under the Belt and Road Initiative, and overseen two failed repatriation processes to send Rohingyas back to Myanmar. This raises the question of whether China, being an emerging global superpower, intends to preserve peace and stability or whether its actions reflect a salami-slicing strategy to expand its sphere of influence across the world. Given the uncertainty of the repatriation of the Rohingyas in Bangladesh, this chapter analyses China’s role as a mediator in the crisis and its implications.

Introduction

In August 2017, the Myanmar military–led brutal attacks against the Rohingya community in Rakhine State resulted in the deaths of over 24,000 Rohingya Muslims (Habib, 2019), mass destruction of their villages, and the fleeing of approximately 742,000 Rohingyas to neighbouring Bangladesh (United Nations Human Rights Council, 2019a). A United Nations (UN) fact-finding mission reported serious human rights and international humanitarian law violations and recommended investigations of senior military personnel for crimes against humanity, genocide, and war crimes (UNHRC, 2018a). Today, Bangladesh’s Cox’s Bazar region is host to some of the world’s largest and most densely populated refugee camps.

In September 2018, the UN Human Rights Council passed a motion to prepare a panel to investigate the possible genocide taking place in the state of Rakhine. However, this was met by strong opposition from China, with support from the Philippines and Burundi, whereas more than 100 countries were in favour (Routray, 2018).

The same year, in a conversation with Bangladesh’s foreign minister, Abul Hassan Mahmood Ali, and his counterpart from Myanmar, Kyaw Tint Swe, China’s state councillor, Wang Yi, was quoted as saying, “The Rakhine state issue is in essence, an issue between Myanmar and Bangladesh. China does not approve of complicating, expanding, or internationalising this issue. China hopes that the two countries can find a resolution via talks, and China would be willing to continue providing a platform for this communication” (Reuters, 2018). China’s then-deputy UN ambassador, Wu Haitao, also publicly reiterated the need for the international community “to view the difficulties and challenges confronting the government of Myanmar through objective optics, exercise patience, and provide support and help” (Reuters, 2018). He also added that, “all parties should work constructively to help reinforce this momentum, de-escalate the situation and alleviate the humanitarian conditions step-by-step” (Gao, 2017).

This chapter covers how China played the role of mediator between Myanmar and Bangladesh, despite having a non-interference policy, and explores the prospect of China playing a positive role in the Rohingya repatriation process in the near future.

Bangladeshi context of the Rohingya crisis

The massive influx of refugees in 2017 was not the first time Bangladesh witnessed such an event. Bangladesh has been housing Rohingyas facing persecution and violence in Rakhine since 1977. More than 2,00,000 Rohingyas made their way into Bangladesh between 1977 and 1978 (Faye, 2021). Further, in the early 1990s, about a quarter of a million Rohingyas fled to the neighbouring lands of Bangladesh when military presence in Rakhine increased, bringing with it forced labour, rape, and torture (Faye, 2021).

Ever since the Rohingya started fleeing from the crimes against humanity in Rakhine, Bangladesh has kept its borders open to fleeing Rohingya refugees, which is regarded as a sign of the country’s goodwill. With international support, Bangladesh has improved and expanded its existing refugee camps, negotiated with the Myanmar government, and is currently vaccinating children as well as registering the Rohingya population.

Since late 2020, Bangladesh has relocated around 20,000 Rohingya refugees to Bhashan Char and plans to move roughly 1,00,000 to the newly emerged silt island (Human Rights Watch, 2021), a solution intended to address the overcrowding in mainland camps in Cox’s Bazar. Though Bangladesh has been receiving international aid for the upkeep of these refugees, the pressure on the land has been significant (Kumar, 2021). Amid criticism, the rest of the world must take notice that Bangladesh has single-handedly managed the crisis, with no guaranteed solution in sight.

Bangladesh is strongly opposed to the idea of integrating the Rohingya into its population. Foreign Minister A.K. Abdul Momen reiterated this view in 2021 when he responded to the World Bank’s proposition for integrating Rohingyas into Bangladesh, “We took a very strong stance. We didn’t like it and opposed it strongly. We conveyed it” (Moinuddin, 2021). The movement of refugees into Bangladesh has put significant pressure on local public services while simultaneously aggravating climate vulnerability. As efforts to repatriate the refugees have made little progress and with international fatigue setting in, Bangladesh has restricted the free movement of Rohingyas and installed barbed wire around the camps.

China’s interest in Myanmar

Myanmar sits to the south of China and holds great strategic utility—it acts as a critical junction between South, East, and Southeast Asia. China’s interest in Myanmar is not only strategic but also economic. The proposed China–Myanmar Economic Corridor (CMEC) under the Belt and Road Initiative (BRI) aims to connect China’s Yunnan province with Mandalay in Central Myanmar while stretching southeast down to Yangon and southwest to Rakhine. In addition, China has heavily invested in Myanmar’s infrastructure sector, including the development of the Kyaukphyu Special Economic Zone (SEZ), which will revolve around the deep-sea port in the Bay of Bengal. The construction of this deep-sea port and the Kyaukphyu SEZ was one of 33 deals signed between China and Myanmar under the CMEC initiative during Xi Jinping’s two-day state visit in 2020, the first by a Chinese leader in 19 years (Aung & McPherson, 2020). In 2021, Chen Hai, ambassador of China to Myanmar, said: “[China is] committed to promoting national stability, economic growth and improvement of people’s livelihoods, and safeguarding democracy and rule of law” (Strangio, 2021).

Established ties between Myanmar and China through long-term investments, such as those in the Shan, Chin, and Rakhine provinces, may place China in a position to mediate between Bangladesh and Myanmar with regard to the Rohingya crisis. This may also bring about an impetus for positive change as clashes between the Arakan Rohingya Salvation Army (ARSA) and Myanmar forces have hampered several Chinese investments in the state of Rakhine.

Sino–Bangla relations

In a December 2018 seminar titled “China–Bangladesh Relations: Prognosis for the Future,” China’s Ambassador to Bangladesh, Zhang Zuo, in his speech, called attention to the various facets of the Sino–Bangla relationship, which was elevated to a strategic partnership of cooperation after the successful state visit of President Xi Jinping to Bangladesh in October 2016 (FMPRC, 2018a):

“China and Bangladesh are neighbors who look out for each other during either safe or disturbing times. In the face of opportunities and challenges, we should work together to be good partners for peace and cooperation…. China will continue to play a constructive role in properly solving the problem of Rakhine State in accordance with the three-phase solution of stopping violence, repatriation and development, and support Bangladesh and Myanmar to find a proper way for the repatriation of the displaced people, as well as a proper solution for the issue of the Rakhine State through dialogue and consultation… China encourages the construction of the ‘Belt and Road’ initiative… We should strengthen communications, improve cooperation mechanisms, promote the security of projects under the ‘Belt and Road’ initiative, improve law enforcement capabilities and safe construction cooperation, take effective measures to ensure the protection of life and property of employees of the projects, institutions and enterprises in the other country, and continue to deepen practical cooperation in all areas of law enforcement and security” (FMPRC, 2018a).

China and Bangladesh have been on relatively good terms since 1975. Their economic alliance was strengthened after Bangladesh formally signed the BRI in October 2015, a move that complements the strategic partnership between the two countries (Mint, 2021). In fact, the agreement made Bangladesh the second-largest recipient of Chinese funds in South Asia following Pakistan (Rahman, 2021). As in Myanmar, China has also heavily invested in Bangladesh, which is a large market for Chinese goods. To further strengthen the Sino–Bangladesh bilateral relationship, China granted Bangladesh duty-free access to 97% of tariff products under the Duty-free Quota-free scheme (Dhaka Tribune, 2020). China is now Bangladesh’s largest trading partner (Ramachandran, 2019). In October 2020, China signed 27 memorandums of understanding (MoUs) with Bangladesh, which were valued at US$ 24 million (Pitman, 2020). Bangladesh had to turn to China as Western sources had refused to fund several infrastructure projects. However, China has been steadily investing in Bangladesh’s infrastructure development, including upgrading Chittagong Port, constructing railway links (such as the Trans-Asian Railway), and investing US$ 1 billion for improving digital connectivity (Ramachandran, 2019).

China’s changing response to the Rohingya crisis

The first instance of information on aid released by the Chinese embassy in Bangladesh is on September 28, 2017, and it stated that 150 tonnes of aid had been released to “refugees who had poured into Bangladesh recently.” Declaring appreciation for the humanitarian assistance provided by Bangladesh thus far, the statement added that—as China’s “good old friend,” Bangladesh would continue providing support (Gao, 2017). Surprisingly, the Chinese foreign ministry, in its official statement, made no mention of the term “Rohingya” and rather used the word “refugees.” Perceived as an attempt to placate Myanmar, this move received heavy criticism from the international community. Moreover, in another statement provided by Lu Kang, the spokesperson for the Chinese foreign ministry, the term “refugee” was replaced by “displaced people,” a subtle insinuation of apathy and disassociation from the plight of the Rohingyas:

“The Chinese side is highly concerned about the difficulty facing Bangladesh in resettling the displaced people in the Myanmar-Bangladesh border area. In order to help the government of Bangladesh with the resettlement efforts, the Chinese government has decided to provide emergency humanitarian supplies to the government of Bangladesh, the Chinese side supports Bangladesh’s efforts to resettle the displaced people properly and stands ready to continue providing assistance to Bangladesh as its capacity allows” (Gao, 2017).

Despite the growing Sino–Bangla ties, Beijing appears to be determined to stand with Myanmar on the Rohingya issue. In 2018, Russia and China boycotted talks on a resolution drafted by the United Kingdom at the UN Security Council that aimed to convince Myanmar to allow the return of approximately 7,00,000 Rohingya refugees (Nichols, 2018).

Beijing officially steps in to play mediator: China’s “three-phase solution”

In November 2017, Chinese Foreign Minister Wang Yi, at a press conference with the then Myanmar State Counsellor Aung San Suu Kyi, announced a “three-phase solution” to the Rohingya crisis. The first phase involved a ceasefire in Rakhine State to halt further violence and displacement; the second encompassed bilateral dialogue between Bangladesh and Myanmar to find a feasible solution to the crisis; and in light of China’s description of the conflict as a by-product of impoverishment and underdevelopment in Rakhine State, the third solution pertained to poverty alleviation (China Global Television Network, 2017). However, Chinese claims that poverty was the root cause of the conflict were vague and dismissed key factors like the discriminatory 1982 Myanmar Nationality Law that denied citizenship to Rohingya ethnic minorities, thus rendering them stateless.

The “three-phase solution” also failed to acknowledge decades of systemic repression of Muslim Rohingyas at the hands of the Buddhist majority. The proposal blatantly disregarded the final report put forth by the Advisory Commission on Rakhine State led by former UN Secretary General, Kofi Annan under the umbrella of the Kofi Annan Foundation. The report was published on the eve of the 2017 ARSA attacks and highlighted the need for governments to address the socio-economic afflictions contributing to the disproportionate marginalisation and discrimination of the Muslim population in Myanmar. China’s conciliatory approach towards Myanmar has helped it build better relations with the Government of Myanmar, especially with the military. Though China maintained that it had no strategic interests in the region, its diplomatic approach has helped keep Western powers at bay while limiting the crisis intervention to China, Bangladesh, and Myanmar. However, China has failed to do anything substantial for the Rohingyas or for Bangladesh as the country shoulders the burden of incoming refugees.

After China announced its “three-phase solution” in early 2021, A.K. Abdul Momen, expressed optimism and confidence in China’s capacity to facilitate and moderate the Rohingya repatriation process. The following quotation by him suggests Bangladesh’s stance in early 2021: “We still have confidence in China. We maintain friendship with all. China and Japan have advanced. China’s progress [on repatriation talks], to some extent, is on the way to implementation” (The Daily Star, 2021).

However, after the colossal influx in 2017, despite attempts at drafting a repatriation mechanism, not a single refugee had returned to Myanmar a year later. In 2018, under diplomatic pressure from China, authorities from Bangladesh and Myanmar came together in a meeting to implement the repatriation agreement as agreed upon in 2017 (ICG, 2018).

China has advocated that both Myanmar and Bangladesh avoid negotiating the repatriation process at multilateral forums. Wang Yi also hosted a side meeting with Bangladesh, Myanmar, and UN Secretary-General Antonio Guterres in September 2017. The Chinese Public Security Minister, Zhao Kezhi, also met counterparts from Bangladesh and Myanmar after both countries met on October 30, 2017 (ICG, 2018).

As a result, the repatriation attempt took place in November 2018 between Bangladesh and Myanmar without consultation with the UN High Commissioner for Refugees (UNHCR) or representation from the Rohingya population. Only 2,260 people from 485 families were on the list, and the repatriation was to start with the return of 150 refugees each day. However, the refugees on the list went into hiding and refused to go back as they feared for their lives upon return to Myanmar. Subsequent attempts have also failed. Myanmar authorities have not been supportive, according to a Bangladeshi government official stationed at the Rohingya camps during the first repatriation attempt.[1] The Rohingya refugees on the list demanded citizenship, safety, security, shelter, and justice upon their return. Instead, the Myanmar government proposed a digital national verification card (VNC) process, stripping the Muslim Rohingyas of full citizenship (Milko, 2019).

The Rohingya do not perceive China’s involvement positively due to China’s policies against the Uyghur people in East Turkistan (Asat, 2020). It is difficult not to question China’s neutrality as a mediator. Like the “systemic and institutionalised oppression” committed on Rohingyas in Myanmar (Office of the United Nations High Commissioner for Human Rights, 2019, p.67), the Chinese government has detained over a million Uyghur Chinese Muslims in internment camps in the Xinjiang region (Hill, Campanale, & Gunter, 2021). On that note, the “unconscionable treatment” of the Uyghurs and the blatant sympathy demonstrated by Myanmar may have led to hesitation among the Rohingyas to comply with China (Asat, 2020). China’s efforts have also been questioned by UN diplomats in Yangon, as they believe China’s quick solutions might be apathetic towards human rights issues (McPherson, Paul, & Naing, 2020).

Conflict resolution diplomacy by China: Where it stands now

Between 2018 and 2020, China managed to arrange three meetings between Myanmar and Bangladesh and it remains positive about the Rohingya repatriation process (McPherson, Paul, & Naing, 2020). However, efforts by China keep failing, and as frustration grows, the Bangladeshi government has approached Russia to launch a similar trilateral initiative between the three countries. Russia may fare better than China as the country shares goodwill with the Myanmar junta, in addition to friendly ties with the Bangladeshi government, which is evident from its investment in the country’s first nuclear power plant in Rooppur. By starting a trilateral process of diplomacy with Russia and Myanmar, Bangladesh may be striving to amicably resolve the Rohingya refugee crisis (Kumar, 2021).

Even though Bangladesh has tried to engage with Myanmar bilaterally since the exodus, it has not managed to make any significant progress. Yet again, in 2019, A.K. Abdul Momen sat for a meeting with his counterparts from Myanmar and China (The Daily Star, 2019). Following the meeting, Momen developed a plan for a tripartite agreement, which led to the formation of a working group comprising the three countries (China, Bangladesh, and Myanmar). The group was formed by jointly evaluating and pushing forward the repatriation process. Similarly, in 2021, China established a tripartite framework and initiated a 90-minute virtual dialogue between Bangladesh and Myanmar, expressing its support in favour of the two nations forming a durable and quick solution to the Rohingya crisis. No concrete result has come of this group, and voluntary repatriation has stalled (Dock, 2020). The working group was supposed to meet on February 4, 2021, but its plans were disrupted following the Myanmar military coup on February 1 (Mostofa, 2022). The repeated failure to engage in fruitful discussions with Myanmar indicates that China either mishandled the diplomatic developments between Myanmar and Bangladesh or that Myanmar does not heed China’s instructions.

Considering China’s role in the Rohingya repatriation process, a government official commented,

“I worked in the field and was present during the first attempt of the Rohingya repatriation process, and in this regard, China played no role whatsoever in hastening the repatriation process or helping Bangladesh. They did not even make a significant contribution in terms of charity. In fact, USA and Turkey were the two biggest donors.”[2]

In 2021, referring to the recently held tripartite dialogue between Bangladesh, Myanmar and China, a senior Bangladeshi politician, Abdul Moyeen Khan said, “I do not believe that even after Chinese mediation the citizenships and rights issues of Rohingya will be ensured.” (Kamruzzaman, 2021)

Moreover, China’s approach as a mediator seems to be flawed given that the Rohingya refugees were excluded from the negotiation table and based on how quick China has been to defend Myanmar. For instance, despite the 2021 coup leading to socio-political chaos resulting in a civil war and a sudden surge in COVID-19 cases across Myanmar (Kurlantzik, 2022), China blocked the UN Security Council from issuing a statement of concern over violence across Myanmar and the failure to implement the Five-point Consensus issued by the 10-nation Association of Southeast Asian Nations (ASEAN) group. Though the Five-point Consensus called for reasonable action to end violence, the appointment of a special envoy for the mediation and facilitation of a constructive dialogue among all parties, and the immediate halt of violent activities across Myanmar, China vouched for a slower process as opposed to immediate action (South China Morning Post, 2022). Evidently, China wants to ease pressure on Myanmar from the international community to secure its vested economic interests (ICG, 2018).

With the junta in power, Myanmar may have initially wanted to reduce its dependency on China, as the country has been suspicious of China’s involvement in supplying arms to militant groups (Gupta, 2020). However, the military coup has led to pro-democracy protests within the country as well as added pressure from Western countries.

The US and European countries have already sanctioned Myanmar, placing restrictions on the import of military equipment by the latter. They further tightened sanctions in 2022 following the coup in February 2021. Given the current situation in Myanmar, the junta is uninterested in pro-democratic political alliances and are seemingly unfazed by the West. The neighbouring Southeast Asian countries seem inclined toward avoiding any involvement in the situation to prevent political and economic spill-overs.

The plans being developed by China and Myanmar for the construction of the CMEC are mutually beneficial in terms of being a potentially profitable commercial venture for Myanmar and a vital point of access to the Indian Ocean for China. This implies that both nations have far more to gain as an alliance than otherwise (Bremmer, 2021). Additionally, according to Chinese experts at the United States Institute of Peace, China’s support of the military junta is motivated by the following: first, limiting Western influences in the borderlands; second, preserving the stability of the China–Myanmar borderlands; and third, protecting the strategic economic corridor linking the Indian Ocean to China’s southwestern provinces (Tower, 2021).

At present, the plight of the Rohingya crisis is beginning to lose recognition in the international arena due to the recent return of the Taliban to power in Afghanistan and the war in Ukraine. The Rohingya crisis has been ongoing for nearly five years. With no progress in sight, the international community’s sympathy has started to wane, and the plight of the refugees does not dominate headlines anymore. The hospitality of the local population toward refugees sheltered in densely populated camps is starting to fade as well. With no signs of repatriation on the horizon, Bangladesh is in a tough spot as pressure is building on already burdened resources and climate degradation is setting in.

In this context, China has not been honest in its role as a mediator. It has enabled the Myanmar junta to prevent the return of the Rohingya. To sum up, the following timeline lists some of China’s geopolitical involvement in the Rohingya crisis.

Timeline: China’s mediation role between Myanmar and Bangladesh
2017

• • March 27: China disassociates from the consensus on the draft resolution at the UNHRC
    In the United Nations Human Rights Council (UNHRC), China disassociates from the consensus on the draft resolution entitled “Situation of Human Rights in Myanmar” to dispatch an independent international fact-finding mission to Myanmar. China expresses that the international community must respect Myanmar’s sovereignty and create a favourable environment for parties to resolve differences through dialogue (UNHRC, 2017a).

• • September 21: Wang Yi meets with U Thaung Tun during the United Nations General Assembly (UNGA) session in New York
    In his meeting with Myanmar’s National Security Advisor U Thaung Tun, State Councillor and Foreign Minister Wang Yi conveys China’s support for Myanmar in actively seeking dialogue with Bangladesh. He calls on the international community to treat the Rakhine State situation impartially and encourages both countries to seek a solution through friendly consultations (FMPRC, 2017a).

• • September 29: Chinese envoy commends Bangladesh’s efforts to improve the humanitarian situation for Rohingya refugee
    At the United Nations Security Council (UNSC), Chinese envoy Wu Haitao calls for the international community to encourage dialogue between Myanmar and Bangladesh to address the refugee crisis. As a friendly neighbour to both countries, China has been actively engaging with Myanmar and Bangladesh to influence them positively to address the issue through dialogue and consultation, he says (Xinhua, 2017a).

• • October 5: Bangladesh military personnel build relief tents supplied by China for Rohingya refugees
    China sends a second consignment of relief material for refugees in Chittagong, including 2,000 tents and 3,000 blankets. Bangladeshi Prime Minister Sheikh Hasina is expected to personally distribute the Chinese relief blankets on her visit to the Rohingya camps (Xinhua, 2017b).

• • November 16: China votes against the draft resolution in the UNGA
    In the UNGA, China votes against the draft resolution entitled, “Situation of Human Rights in Myanmar.” The draft resolution is adopted by a recorded vote of 135 to 10, with 26 abstentions (UNGA, 2017).

• • November 18: Wang Yi meets with Sheikh Hasina and Abul Hassan Mahmood Ali in Bangladesh
    In his talks with Bangladeshi Prime Minister Sheikh Hasina and Foreign Minister Abul Hassan Mahmood Ali, Wang Yi notes that the Rohingya issue should be resolved by Bangladesh and Myanmar through dialogue and consultation (FMPRC, 2017b). He welcomes the signing of an agreement on the repatriation of refugees and expresses China’s willingness to assist in the settlement of the issue (FMPRC, 2017c).

• • Wang Yi introduces China’s position on the Rohingya issue
    In a press interview in Bangladesh, Wang Yi expresses China’s willingness to play a role in resolving the Rohingya issue between Bangladesh and Myanmar. To this end, China has repeatedly advised the latter to achieve a ceasefire at the earliest in order to prevent more locals from entering Bangladesh, and to work with Bangladesh to find an acceptable solution, he says (FMPRC, 2017d).

• • November 19: China proposes a three-phase plan to address the Rakhine State issue
    In his meeting with Aung San Suu Kyi in Naypyidaw, Wang Yi outlines a three-phase plan to ease the crisis: first, to have a ceasefire and restore order; second, for Myanmar and Bangladesh to solve the issue through friendly consultation and sign and implement the repatriation agreement at the earliest; third, for the international community to help develop Rakhine State to achieve stability (FMPRC, 2017e). President U Htin Kyaw expresses Myanmar’s willingness to negotiate with Bangladesh to solve the problem as per China’s proposed three-phase solution (Xinhua, 2017c).

• • Wang Yi meets with Min Aung Hlaing in Naypyidaw
    In the meeting, Myanmar’s military chief, Min Aung Hlaing, thanks Wang Yi for his shuttle mediation between Myanmar and Bangladesh and agrees with China’s three-phase solution (FMPRC, 2017f).

• • Consensus reached by China, Myanmar, and Bangladesh
    In a joint press meeting with Aung San Suu Kyi, Wang Yi announces that China’s proposal of addressing the Rakhine issue through three phases was received positively by both countries. “I just concluded my visit to Bangladesh and the country clearly expressed its willingness to continue the bilateral consultations with Myanmar and Myanmar took the same stand,” he says (FMPRC, 2017g).

• • November 24: China seeks role in Myanmar’s peace process
    In a meeting with Min Aung Hlaing, President Xi Jinping expresses China’s willingness to play a greater role in Myanmar’s domestic peace process and in safeguarding the stability of the border region (Baijie, 2017).

• • December 5: China votes against a resolution in the UNHRC
    In the UNHRC, China votes against the draft resolution entitled, “Situation of Human Rights of Rohingya Muslims and Other Minorities in Myanmar.” The resolution is adopted by a recorded vote of 33 to 3, with 9 abstentions (UNHRC, 2017b).

• • December 21: Wang Yi meets with Ye Aung
    In his meeting with Myanmar’s Minister for Border Affairs Ye Aung, Wang Yi expresses that China is willing to play a constructive role in resolving the Rakhine State issue between Myanmar and Bangladesh through bilateral consultation. Both sides also exchange views to develop Rakhine State through the CMEC (FMPRC, 2017h).

2018

• • • March 23: China votes against a resolution in the UNHRC
      In the UNHRC, China votes against the draft resolution entitled, “Situation of Human Rights in Myanmar.” The draft resolution is adopted by a recorded vote of 32 to 5, with 10 abstentions (UNHRC, 2018b)

• • • April 22: Wang Yi meets with former Myanmar President U Thein Sein in Beijing
      In the meeting, Wang Yi conveys China’s support for bilateral negotiations between Myanmar and Bangladesh to settle the issue of the displaced people fleeing from Rakhine State. China also expresses hope that repatriation will be implemented at an early date (FMPRC, 2018b).

• • • May 14: Chinese envoy expresses hope that both countries resolve issues through bilateral dialogue
      At a meeting in the UNSC to brief members on the visit of the Security Council mission to Bangladesh and Myanmar, Chinese envoy Ma Zhaoxu makes a statement recognising the efforts of both countries in addressing key issues. He calls for the international community to increase humanitarian assistance to both countries (UN, 2018a).

• • • June 28: Wang Yi meets with U Kyaw Tint Swe in Beijing
      Wang Yi meets with Myanmar’s minister for the office of the state counsellor, U Kyaw Tint Swe, and notes that China supports friendly negotiations between Myanmar and Bangladesh to resolve the Rakhine issue and will continue to provide necessary assistance (FMPRC, 2018c).

• • • June 29: Wang Yi holds talks with Abul Hassan Mahmud Ali in Beijing
      The Chinese side states that due to the joint efforts of Bangladesh and Myanmar, the conditions for initiating the repatriation of refugees have been met and that China hopes that the first batch of repatriation work will be implemented at the earliest (FMPRC, 2018d).

• • • September 27: China votes against a resolution in the UNHRC
      In the UNHRC, China votes against the resolution entitled, “Situation of Human Rights of Rohingya Muslims and Other Minorities in Myanmar.” The resolution is adopted by a recorded vote of 35 to 3, with 7 abstentions (UNHRC, 2018c).

• • • Trilateral informal meeting between Wang Yi, U Kyaw Tint Swe, and Abul Hassan Mahmud Ali at the UN headquarters
      At an unofficial meeting at the UN headquarters, China, Myanmar, and Bangladesh reach a three-point consensus to resolve the Rakhine issue. The countries agree to first resolve the issue through friendly consultations; second, repatriate the first group of refugees; and third, hold a joint working group meeting to draft a roadmap and timeline for repatriation (FMPRC, 2018e).

• • • October 18: China objects to a security council briefing by the chairperson of the fact-finding mission on Myanmar
      In a written letter to the president of the Security Council, China expresses opposition to holding the UNSC briefing and cites that it is out of the mandate of the fact-finding mission to brief the UNSC (UNSC, 2018).

• • • October 24: China criticises the credibility of the report by the fact-finding mission on Myanmar
      In his statement to the Security Council, Ma Zhaoxu also pays tribute to the assistance provided by Bangladesh to the refugees and states that through meetings with both countries facilitated by China, Myanmar has pledged to develop a timetable for the repatriation of refugees (UN, 2018b).

• • • November 9: Wang Yi meets with Shahidul Haque in Beijing
      Wang Yi and Bangladesh’s foreign secretary, Shahidul Haque, exchange views on the issue of repatriation of refugees. The Chinese side commends both countries for the progress made in handling the Rakhine issue. Haque thanks China for its support and assistance (FMPRC, 2018f).

• • • November 16: China votes against a draft resolution in the UNGA
      In the UNGA, China votes against the draft resolution entitled, “Situation of Human Rights in Myanmar.” The draft resolution is adopted by a recorded vote of 142 to 10, with 26 abstentions (UNGA, 2018). China’s representative notes that Myanmar and Bangladesh had agreed to start the repatriation process and expresses China’s support (UN, 2018c).

• • • December 16: Wang Yi meets with U Kyaw Tin in Laos
      In his meeting with Myanmar’s minister for international cooperation, U Kyaw Tin, Wang Yi conveys China’s hopes that Myanmar maintains communication and cooperation with Bangladesh to realise the repatriation of the first group of people as soon as possible. He expresses Chinese support and calls on relevant agencies of the UN to play a constructive role (FMPRC, 2018g).

2019

• • • February 25–March 5: China’s special envoy visits Myanmar and Bangladesh
      During both his visits, China’s special envoy of Asian affairs, Sun Guoxiang, meets with Aung San Suu Kyi and Min Aung Hlaing in Myanmar as well as the state minister for foreign affairs, Mohamed Shahriar Alam and Shahidul Haque, in Bangladesh to encourage both countries to speed up the implementation of the repatriation agreement (FMPRC, 2019a).

• • • March 22: China votes against a resolution in the UNHRC
      In the UNHRC, China votes against the draft resolution entitled, “Situation of Human Rights in Myanmar.” The resolution is adopted by a vote of 37 to 3, with 7 abstentions (UNHRC, 2021).

• • • July 5: Wang Yi meets with A.K. Abdul Momen in Beijing
      In his meeting with Bangladesh’s foreign minister, A.K. Abdul Momen, Wang Yi underlines that China has followed closely the development of the Rakhine issue and is trying its utmost to mediate it. China encourages both countries to strengthen communication and integration and handle differences properly for early and smooth repatriation of the first batch of displaced persons. The Chinese side is willing to continue to offer necessary assistance (FMPRC, 2019b).

• • • July 6: Joint statement by China and Bangladesh mentions the Rakhine issue
      On the occasion of Sheikh Hasina’s official visit to China, both countries issue a joint statement and affirm that the solution to the Rakhine issue lies in the early return of the displaced people who have entered Bangladesh from the Rakhine State. China expresses that it will continue to host trilateral meetings between the three countries to provide a platform for dialogue to promote repatriation (FMPRC, 2019c).

• • • August 27: Wang Yi holds talks with U Kyaw Tint Swe in Beijing
      Wang Yi expresses that China is actively communicating and mediating for the resolution of the Rakhine issue and praises Myanmar’s practical measures for repatriation. China supports proper settlement through bilateral channels between Myanmar and Bangladesh and opposes the multilateralisation and politicisation of the issue (FMPRC, 2019d).

• • • September 23: Trilateral meeting between Wang Yi, U Kyaw Tint Swe, and A.K. Abdul Momen at the UN headquarters
      The meeting produces three points of consensus on the Rakhine issue: first, to realise the repatriation as soon as possible; second, to establish a China–Myanmar–Bangladesh joint working group for the implementation of repatriation under the political guidance of the foreign ministers of the three countries; and third, to strengthen tripartite cooperation to develop Rakhine State and the border areas (Xinhua, 2019a).

• • • September 26: China votes against a resolution in the UNHRC
      In the UNHRC, China votes against the resolution entitled, “Situation of Human Rights of Rohingya Muslims and Other Minorities in Myanmar.” The resolution is adopted by a recorded vote of 37 to 2, with 7 abstentions (UNHRC, 2019b).

• • • December 7: Wang Yi meets with U Kyaw Tint Swe and other ministers in Naypyidaw
      Wang Yi conveys that China is willing to continue to assist Myanmar in carrying out the repatriation and resettlement of displaced people, promoting economic development, and improving livelihoods in Rakhine State. The meeting is also attended by U Thaung Tun, Minister of Construction Han Zaw, and Minister of International Cooperation Kyaw Tin (FMPRC, 2019e).

• • • Wang Yi meets with Aung San Suu Kyi in Naypyidaw
      Wang Yi says that China is paying close attention to the Rakhine issue and is ready to provide assistance on repatriation-related work and help promote economic development in Rakhine State (Xinhua, 2019b).

• • • December 27: China votes against a resolution in the UNGA
      In the UNGA, China votes against the draft resolution entitled, “Situation of Human Rights of Rohingya Muslims and Other Minorities in Myanmar.” The draft resolution is adopted by a vote of 134 to 9, with 28 abstentions (UN Digital Library, 2019).

2020

• • • April 7: Wang Yi holds a telephone conversation with A.K. Abdul Momen
      In the meeting, Momen conveys hopes of starting the repatriation work as soon as possible, and Wang Yi expresses China’s willingness to continue to play a mediating role (FMPRC, 2020).

• • • October 23: Wang Yi holds a telephone conversation with A.K. Abdul Momen
      Both sides agree to hold a meeting of the China–Myanmar–Bangladesh joint working group at an early date. China has been actively engaged in mediation and communication to find a proper solution, says Wang Yi (Xinhua, 2020).

• • • December 31: China votes against a resolution in the UNGA
      In the UNGA, China votes against the draft resolution entitled, “Situation of Human Rights of Rohingya Muslims and Other Minorities in Myanmar.” The draft resolution is adopted by a vote of 130 to 9, with 26 abstentions (UN, 2020).

2021

• • • January 10: MoU between China and Myanmar
      China and Myanmar sign an MoU to conduct a feasibility study of a railway linking Mandalay with Kyaukphyu, a major town in Rakhine State. The Chinese Ambassador to Myanmar Chen Hai says that the railway will strengthen Myanmar’s national reconciliation and peace process (Xinhua, 2021a).

• • • January 11–12: Wang Yi visits Myanmar
      During the visit, Wang Yi conveys China’s support for Myanmar in properly resolving the Rakhine State issue, encouraging talks between Myanmar and Bangladesh and the early repatriation of displaced people to Myanmar from Bangladesh (Xinhua, 2021b).

• • • January 19: China–Myanmar–Bangladesh agree to maintain consultations at vice foreign minister level
      As a follow-up to implement the consensus reached during Wang Yi’s earlier visit to Myanmar, Chinese Vice Foreign Minister Luo Zhaohui hosts a video meeting with Myanmar’s deputy minister of international cooperation, Hao Dusong, and Bangladesh’s foreign secretary, Masud Bin Momen. China expresses its willingness to continue to actively mediate and support both countries to strengthen dialogue (FMPRC, 2021a).

• • • February 26: Chinese envoy says that Myanmar and Bangladesh must resolve the Rakhine issue through bilateral dialogue
      Speaking at an informal meeting of the UNGA, Chinese envoy Zhang Jun refers to the Rohingya issue in light of the military coup in Myanmar, “We do not hope to see new difficulties in solving this problem due to the domestic situation in Myanmar” (Xinhua, 2021c).

• • • May 21: Wang Yi holds a telephone conversation with A.K. Abdul Momen
      Over the phone conversation, Momen says Bangladesh wishes to resume dialogue to start repatriation as soon as possible. Wang Yi conveys that China understands Bangladesh’s legitimate concerns and supports addressing the issue through friendly consultations (FMPRC, 2021b).

• • • July 15: Wang Yi meets with A.K. Abdul Momen in Tashkent
      In the meeting, Momen conveys that Bangladesh wishes China to continue playing a mediative and constructive role to resolve the Rakhine State issue (FMPRC, 2021c).

2022

• • • April 27: Li Jiming visits settlement camps in Cox’s Bazar
      Chinese ambassador to Bangladesh, Li Jiming, visits households of displaced people and repatriation centres in the camp area. China has been making efforts to improve conditions in the camps; in the future, China will continue serving as a bridge of communication between Bangladesh and Myanmar and will play a positive role in facilitating early repatriation, says Li (Embassy of the People’s Republic of China in the People’s Republic of Bangladesh, 2022a).

• • • April 28: China gifts medical equipment to Sadar Hospital in Cox’s Bazar
      In the handover ceremony, Li Jiming notes that China has played the role of mediator between Bangladesh and Myanmar and has been working with relevant stakeholders, including the UNHCR, to facilitate the early repatriation of the displaced people (Embassy of the People’s Republic of China in the People’s Republic of Bangladesh, 2022b).

Acknowledgements

The authors thank Nitika Nayar and Shruti Jargad for developing the timeline, “China’s Mediation Role between Myanmar and Bangladesh.”

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With growing momentum in Nepal-China diplomatic ties, it is important to look at the scholastic exchanges through history, notwithstanding the political turmoil of the Tibet-China Wars, harsh weather conditions in the Himalayas, and China’s ‘closed-door policy’. Educational ties waxed and waned until the Cultural Revolution, which led to the establishment of China as a republic in 1949. The 1950s saw Nepalis starting formal education not only in Beijing but also elsewhere in the vast Chinese geography. Initially, many Nepali students pursued science, technology, engineering and mathematics and especially medicine. With increased Chinese government scholarships available to Nepalis and some institutions also teaching in English, there was a steady rise in the number of Nepalis heading to China. By 2019, China was the fifth most sought-after destination for Nepali students while English speaking countries and India have historically been major destinations for them. In 2020, China’s zero-Covid policy forced thousands of Nepalis to pursue online classes from home, which led to a serious compromise of their academic and career pursuits. This chapter traces the chronology of educational exchanges between Nepal and China, explores the volume of Nepali students there and why it has grown over the years.

Introduction

The reach of Beijing’s soft power in Nepal can be explored by tracing the evolution of educational ties between the two countries. From a handful of students on government scholarships in the 1960s and a hiatus during the Cultural Revolution, the number of Nepali students in China steadily increased after 1978.

After the Deng era, two milestones bolstered China’s attractiveness as a major education destination for young Nepalis. In 2008, the year Beijing hosted the Summer Olympics, Kathmandu saw large numbers of pro-Tibet protests—probably more than in other parts of the world combined—in terms of the frequency of the protests.[1] It was a wake-up call for Beijing. China began engaging with Kathmandu on multiple fronts. This was also the year that Nepal became a democratic republic. China discarded its traditional approach of treating Nepal’s monarchy as the centre of political power. This marked the beginning of the cultivation of intimate relationships between the political parties of both countries, most notably between the Communist Party of China (CPC) and the two leading communist parties of Nepal—the Communist Party of Nepal-Unified Marxist Leninist (CPN-UML) and the Communist Party of Nepal (Maoist Centre).

In 2017, Nepal became a signatory to the Belt and Road Initiative (BRI), as part of which China offered more scholarships for Nepalis. China now views young returnees—on scholarships as well as self-funded programmes—from its modern universities and institutions as ambassadors to expand its footprint in the geopolitical neighbourhood. Additionally, China has also demonstrated that it has the resources to challenge the traditional influence of India and western democracies on Nepal’s administration and public life. By all accounts, China will continue to be a major destination for Nepali students in the years to come. However, for the foreseeable future, India and English-speaking democracies (Australia, the United Kingdom, Canada, and the United States) remain the leading destinations for Nepali students because of cultural and linguistic familiarities as well as the immigration opportunities they offer.

Methodology

To trace the evolution of Nepal’s educational ties with China, one of the best empirical approaches would be to analyse official figures on Nepali students in China over the years, but they are scant and sketchy. As a result, my methodology includes drawing from books, academic and research papers, websites, and a wide range of interviews.

I interviewed 32 students, past and present, from various age groups, backgrounds, and disciplines. Most medical students, for example, were between 17 to 19 years of age, either in their final year or had taken a gap year due to the Covid pandemic, which had kept them out of China. Two of the medical students interviewed had studied in China in the 1960s during the Cultural Revolution.

In recent years, some students have been on Confucius scholarships, studying ‘Chinese as a Second Language’ (non-degree courses) for five years so that they can become Chinese-language teachers in Nepal. A mid-career Nepali government officer was enrolled in a master’s programme in Public Policy (2017–2018) at Peking University.

Several interviewees, mostly enrolled in Science, Technology, Engineering and Mathematics (STEM) subjects (aged 19–23 years), suffered from the discontinuity of stipends and were interviewed through WeChat groups for Nepali students. Around 10 of the students interviewed felt they were victims of unclear application processes and university requirements. Four undergraduate students, who were enrolled in social science courses, were self-sponsored and later received scholarships, either from the university to cover tuition fees or through city scholarships. The latter covered tuition fees but also offered an ‘extra amount’.

There were six interviews with officials, three of them Chinese. A Nepali academic based in China offered important insights that filled in some gaps. Several rounds of extensive interviews were conducted with Aneka Rajbhandari, a master’s student in Chinese politics at Renmin University in Beijing and now a member of ‘The Araniko Project’, which provides commentary and analyses on current events related to China with a focus on Nepal and South Asia.

China’s soft power through education can be best understood by exploring the trends in the numbers. How many Nepali students have travelled to China since 1978 and which cities and provinces have been their major destinations? However, the minimal and almost non-existent documentation on the part of the Nepali government and vague explanations on the part of the Chinese government makes the task difficult. Though we came across many Nepalis who knew someone studying in China during the interviews, no accurate public records of a) how many students are currently studying there and where, b) the ratio of students on scholarships versus self-funded programmes, and c) the overall breakdown of their disciplines was found. China annually releases a “Statistics of International Students” notice that enumerates the total number of international students and provides further information on students from the top 15 countries that send students to China; Nepal is not one of them. Among countries that made it to the top 15 in 2017 from South Asia were Pakistan and India, with 18,626 and 18,717 students respectively. (Ministry of Education, 2016).

The most recent figures released by the Chinese government put the total number of foreign students in Higher Education Institutions in China as of 2019 at 1,72,571, with 1,40,637 being graduates (Ministry of Education, 2019). According to a Nepal Embassy official in Beijing, finding the exact number and location of students is “tricky” because the numbers change constantly (for example, when a student graduates and returns home and the embassy is not informed, as there is no mandatory provision for reporting this). Given the lack of accurate figures, this chapter focuses on trends and dynamics: the geopolitical, cultural, and educational background of Nepali students in China and what has been observed over the years in the media, official communique, scholarly journals, and personal interviews conducted with Nepali and Chinese officials and Nepali students who studied in China.

Education as an enabler of China-Nepal ties

Given Nepal’s relatively small population of less than nine million, poor literacy, and the Rana rulers’ reluctance to educate the population, only the elite got to pursue higher education during their more than a century of rule. Under the Rana regime, until 1951, Nepalis rarely received formal education and the literacy rate was under 5%. After the collapse of the regime, when American aid allowed the public education system to expand rapidly, Nepali students also began travelling to China on Chinese government scholarships (Whelpton, 2005). According to Dong and Chapman (2008), the Chinese government started providing scholarships to international students in 1956 and provided financing to cover the daily expenses of only 50 recipients from around the world. In the same year, China offered 30 seats in self-financed courses for students from western countries but this was met with little interest. By 1960, this number increased to approximately 2,000 international students from 40 countries (Dong & Chapman, 2008).

In 1966, Mao Zedong launched the infamous Cultural Revolution. A Nepali medical student then, interviewed for this chapter, said he was sent home from his university based in a major Chinese city during that period and was recalled after the revolution. Nepal sent very few students to China during that period, and those who went did so on government scholarships. “Those were ‘cold times’ in Nepal-China ties and the Nepali students who were sent home were not sure when and if they would be invited back to complete their studies,” said another China returnee, now a senior doctor in Kathmandu.

When Deng Xiaoping came to power, China made dramatic changes in its foreign policy in an attempt to undo the damage of the Cultural Revolution. It also worked at re-building its relationship with its neighbours. This meant opening its doors to foreign students. In 1980, 52 academic majors in 42 Chinese higher institutions were deemed eligible to receive international students. By 1986, the number had grown to 300 majors in 82 higher institutions (Dong & Chapman, 2008). Since then, Nepal has seen a steady increase in the number of students looking to China as a viable option for higher education.

The 1980s saw a rapid growth of international student enrolment in China. By 1986, 300 majors in 82 higher institutions had already been approved for receiving international students (Dong & Chapman, 2008). From that period onwards, there was a marked increase in China’s engagement with Nepal on various fronts. A major factor behind China’s strong overtures was its security concern regarding Tibet—its soft underbelly bordering Nepal. In the runup to the Beijing Olympics in 2008, Nepal saw a sharp increase in pro-Tibet protests. Chinese surveillance and influence in Kathmandu grew as the Nepali police continued to receive funding and orders to quell pro-Tibet activities in Kathmandu (The Economist, 2012).

The year 2017 was another turning point. Nepal officially joined the BRI, Chinese President Xi Jinping’s ambitious project to reconfigure infrastructure and trade routes to connect Asia, Europe, and Africa. This gave Nepalis access to more Chinese Government Scholarships, such as those under the Silk Road Programme. Thereafter, one can witness a steady increase in the number of Nepali students opting to study in China, reaching more than 6,400 in 2018 (Nepali Times, 2019)[2]. The students are enrolled in a wide variety of disciplines, from STEM to Chinese-language courses, Chinese politics, and international economy.

Today, Nepalis see the relationship between the two countries as that of an ever-growing economy—now the world’s second largest—and a small neighbour who has faced constant economic struggles. As much was conveyed in 2018 by a senior CPC official, who urged a group of visiting Asian journalists to see his country as a civilization-state and not as a nation-state. He suggested that they read Martin Jacques’ When China Rules the World, “though we don’t agree with everything in the book.”[3] The CPC official wanted the journalists to carry home a strong message: China’s rise as a world power was inevitable, and Asian societies would do well to study and appreciate the long history of their civilizational ties with China.

Nepali students can currently apply to more than 100 universities across China, most of which are in Beijing (19), followed by the coastal Jiangsu and Guangdong provinces and Shanghai, while only one university is located in the north-western province of Xinjiang, which mostly receives foreign students from Central Asia. Significantly, no academic institution from Tibet has been enlisted on the Chinese Embassy website thus far. Though in low numbers, Nepali students have been enrolled in universities across China, from Heilongjiang and Xilin provinces in the northeast to Guangdong province and Hong Kong in the southeast to Yunnan and Sichuan provinces in the southwest and the central province of Jiangsu (Embassy of the People’s Republic of China in Nepal, 2004a).

Why Nepali students choose China: cost of attendance, proximity, and scholarships

The average tuition fee of a Chinese university classified as ‘affordable’ ranges from RMB 5,000 (CUCAS, n.d.a) to RMB 35,000 per year (around US$ 750 to US$ 5,250). The fees differ according to the level of education and subject areas. In Ningbo University (Zhejiang province, eastern China), the average tuition fee for a first-year undergraduate programme ranges from RMB 18,000 to RMB 25,000 per year (around US$ 2,700 to US$ 3,750). However, an MBA programme at the same university costs RMB 32,500 per year (around US$ 4,800) (CUCAS, n.d.b.). Similarly, a master’s programme at Yunnan University costs between RMB 8,000 to RMB 12,000 per year (around US$ 1,200 to US$ 1,800) (CUCAS, n.d.b.). On the other hand, universities classified as top-tier in the standout urban hubs cost upwards of RMB 50,000 per year (around US$ 7,500). For example, an MBA from Fudan University in Shanghai costs RMB 165,300 per year (around US$ 25,000) (Fudan University, n.d.). The same programme at Tsinghua University in Beijing costs RMB 198,000 per year (around US$ 30,000) (Tsinghua School of Economics and Management, n.d.).

To put this in perspective, 1 RMB is close to 19 Nepali rupees (NRs) or 12 Indian rupees and the gross salary range for a typical Nepali household is between NRs 16,000–54,000 per month or RMB 900–2,900/US$ 126–430 (CEIC, n.d.). Given these statistics, one can infer that only middle-class and upper-middle-class Nepalis can afford self-financed programmes in Chinese universities. Among the self-financed students who were interviewed, many agreed that Chinese universities were far more affordable than studying in countries such as Australia and the United States and that the fees could be covered with their family income and savings.[4] An obvious reason why Nepali medical students—among the largest segments of Nepalis enrolled in Chinese universities—choose China is affordability. A five-and-a-half-year MBBS course in Nepal costs around US$ 68,000 (NRs 87 lakh) (RMC, a) while in China, a six-year programme costs only around US$ 31,000 (NRs 39 lakh) (RMC, b).

Low-income households, on the other hand, rely solely on scholarships, and they are willing to travel to remote regions and little-known universities to access them. Some students even said that they had enrolled in programmes arbitrarily, in relatively backward regions, because they had received generous scholarships. Many of these students were looking to emigrate in search of better lives and use China as a transit point. As a significant share of Nepali students rely on Chinese scholarships to secure a better life, Nepalis will remain dependent on China for the foreseeable future.

However, China does not provide permanent residency easily. Only 1,576 permanent residency permits were granted in 2006 (The Economist, 2020). Unsurprisingly, Nepalis studying in China do not consider it their end goal. Instead, they opt for opportunities in high-income countries, such as Australia, which has a sizable Nepali population and offers higher wages and far better access to education for their children and a better quality of life. An interviewee said that some of his Nepali classmates who have managed to find jobs in Beijing could not afford international schools for their children and “the best they could afford are far less expensive Pakistani schools.”[5]

Since Nepal and China are neighbouring countries, travelling between them is fairly easy and affordable. An undergraduate interviewee said that they would need to save for just two to three months to be able to afford a round-trip ticket. This helped them maintain connections with their family, community, and culture.

There was a consensus among the students interviewed that the scholarships provided by the Chinese government were what attracted them most. In 2004, the CGS offered 6 undergraduate seats and 14 postgraduate seats to Nepali students. There were 45 Chinese government scholarships for Nepali students in the 2007/2008 academic year, with the majors being School of Basic & Biomedical Sciences, electronics, construction, and education (Embassy of the People’s Republic of China in Nepal, 2007a).

According to the Nepal government, China currently provides scholarships annually for Nepalis “not exceeding 100 students” (MFA, n.d.). A student explained that this number may look smaller than expected as CGSs are not the only scholarships provided by the Chinese government. Other scholarships include the Confucius Institute Scholarship and South-South Cooperation Scholarship depending on the type of programme. Still others start as self-financed students and later (after a semester or a year) apply for scholarships at the university or with the city government, which then covers a portion of their costs if not all.

Meanwhile, one interviewee claimed that in Nepal’s case, “most scholarships” are awarded to those within the intimate network of Nepal’s communist parties—mostly the two leading communist parties, CPN-UML and CPN-MC. The interviewee also claimed that the recipients, often the kin of senior communist leaders, receive the most lucrative scholarships, up to RMB 12,000 per month.[6] These scholarships are neither publicised nor documented. This in part explains the strong party-to-party relationships between the CPC and Nepal’s communist parties.

One such programme that has admitted many Nepalis is “a full scholarship set up by China’s Ministry of Education to support prestigious Chinese universities to recruit outstanding international students for graduate studies in China” (Myanmar Study Abroad, n.d.). The BRI Scholarship is available to students from the 146 member countries (Green Finance & Development Center, n.d.). The Economist (2019a) mentioned how the number of foreign students in China grew fourfold while those from BRI countries expanded eightfold between 2004–16: “In 2012, the year before BRI was launched, students from those countries on Chinese government scholarships were less than 53% of the total number of recipients. By 2016 they made up 61%. China says it reserves 10,000 of its scholarships every year for students from BRI countries.”

The scholarship for BRI countries, also marketed as the Silk Road Programme by provinces in China, is affiliated with many universities. The eligibility criteria for each of these universities are different. Most scholarships offered by the Chinese government—the BRI, Ministry of Commerce, and Jiangxi Provincial Government Scholarships—have an upper age limit ranging from 25 years to 40 years and require the applicants to be in “good health condition.” (Wuhan University, 2022) Here, we begin to understand that China looks to educate a younger, more productive cohort of Nepalis, perhaps also in the hope that they are a long-term investment.

“In countries such as Britain, Australia and America, foreign students are welcomed mostly because universities can make more money out of them than out of locals,” argues The Economist (2019a). “In China, it is the opposite. Foreign students enjoy big subsidies. Often, they are more generously treated than local students” (The Economist, 2019a). In 2020, there was a brief uproar on Weibo, a Chinese microblogging platform, when a Nepali student received RMB 13,000 (approximately US$ 1,955) as a monthly stipend. A Weibo user posted, “This is a letter of admission from a Chinese university awarded to a Nepalese student. What do you think of this special treatment?” One of the comments on the post stated, “Subsidies (scholarships) for foreign students should be completely cancelled and funds should be spent on Chinese students instead.” A second Weibo user pointed out that “China has 600 million people earning less than 1,000 RMB per month, which means less than 12,000 RMB per year. China gives Nepalese students 13,000 RMB per month.” (Weibo, 2020)[7]

The Chinese government is perhaps looking at these scholarships not only as an investment in fostering friendly relationships with other countries but also as an investment in its economy—as a means of ensuring a steady flow of productive and healthy youth into their universities and potentially also into its workforce, at least in the short- and medium-term. By offering substantial scholarships, China follows in the footsteps of India, the West, Japan, and the Gulf countries, which have attempted to establish themselves as cultural and educational hubs for Nepalis. However, unlike the aforementioned countries, China has gone a step further in establishing soft power through higher education. It is looking to not only buy influence but also construct a Sino-centric world. Xi Jinping’s regime attempts to re-establish China as a “civilization-state” and educational exchanges are designed to legitimise the CPC’s historico-cultural narratives (Pan & Joe, 2014).

Obstacles: language barrier and the pandemic effect

Many of the scholarships require candidates to meet certain Chinese-language proficiency levels or take a language course before their programmes commence. Many of these programmes, especially master’s courses, require a high level of language proficiency. Most of the universities designated for scholarships offer courses only in Mandarin. On the other hand, the Chinese Government Scholarship-Great Wall Program, funded by UNESCO, includes degrees that are fully in English and, hence, do not have a language requirement. By insisting on language proficiency, the government of China limits scholarship opportunities to foreigners. This means that students who do not have any background in or experience in learning Chinese do not have access to the scholarships. In doing so, China discourages a move toward diversifying its society.

For Nepali students, who can potentially qualify for Indian or western universities that offer English-medium studies, studying in China can be an ordeal, primarily because of the linguistic barrier in the classroom and outside the campus. Navigating provincial cities can be a nightmare without fluency in local dialects. Inside the classroom, one needs an even greater proficiency in Mandarin to keep up with fellow Chinese students, especially in master’s and PhD programmes in the social sciences and humanities, which call for both sound understanding and nuanced expression—both in verbal participation in the classroom and in written papers. Competitive Chinese universities provide conditional offers to international students: they first need to become proficient in Mandarin to get a confirmation of enrolment. A student currently in a university in Beijing found herself wondering even before she arrived in the Chinese capital, whether it was worth the risk, as even after learning Mandarin for two years, she could still be denied entry into the core humanities programme of her choice.

Despite all the facilities Chinese universities offer, this in part explains why another immediate neighbour, India, is still the number one destination for Nepali students. Additionally, India does not require a student visa, offers courses in English, and Nepalis are far more comfortable with Indo-Nepali cultural and linguistic similarities. Close to 65,000 Nepalis were enrolled in India in 2018, according to the All-India Survey on Higher Education carried out by the Indian government (New Business Age, 2020). This is 27% of the total foreign students in India for the year, making Nepalis the largest bloc of foreign students. The figure is 10 times the number of Nepali students in China in the following year. (Xinhua, 2019)

If a Nepali citizen wants to prepare for studies in China, access to Mandarin classes is limited, though there are Confucius Centres across Nepal that are funded by the Chinese government. The Confucius Institute at two of Nepal’s leading universities, Kathmandu University and Tribhuvan University, are high-level Chinese language and culture institutions, cooperatively established by Hebei University of Economics and Business and Kathmandu University. They offer short-term vocational courses in Nepal. Each year, they train 40 Nepali tourism professionals in a six-month Chinese-language course. The agreement, which came into effect in 2018, will only remain valid for five years. China has also sent many language teachers to Kathmandu, with many schools now adopting Mandarin as one of their required courses, though according to government regulations, schools are not allowed to make any foreign language other than English mandatory (Zhang, 2019). Still, many schools have chosen to ignore this as China offers to pay the salaries of Chinese-language teachers. A small number of private schools are now paying for these teachers, some of whom are Nepalis (PTI, Kathmandu, 2019).

According to the former Indian ambassador to Nepal, Ranjit Rae (2021), China has established 26 ‘China Study Centres’ across Nepal, aimed at strengthening cultural and educational interactions. According to Rae, many Nepali students study in Chinese universities, and there is a steady exchange of delegations and study visits between the two countries (Rae, 2021). In recent years, Confucius Centres have been dismissed for being propaganda machines of the CPC. China has now opened China Cultural Centres (CCCs) around the world. In 2015, the most recent year for which data are available, the Culture Ministry spent 360 million RMB (US$ 57 million) on these CCCs (The Economist, 2019b). The CCC in Nepal is “still in the stage of preparatory work and will be inaugurated soon” according to their website (China Cultural Center, 2015).

Students reported that some universities in China do not clearly state their eligibility requirements regarding language proficiency and entrance exams. International students are currently attending online classes while their Chinese counterparts are at university. International students who are new to the language and culture are often caught off-guard by impromptu class announcements, even though the classes are broadcast live or are recorded, said a student. The linguistic and cultural barrier also affects the admission process. Some students shared that they had to change their programmes after their first year of the Chinese-language course. A student who wanted to study psychology at a Beijing university eventually had to settle for international relations. Studying psychology required a higher level of mathematics (equivalent to the mathematics classes required to graduate with an engineering degree), and the student claimed she was not made aware of this.

Since the first COVID-19 cases broke out in Wuhan, over half a million international students from 196 countries have been sent home (Khadka, 2021).[8] The Nepali government sent in an aircraft to retrieve nearly 180 Nepalis in February 2020. This was a month before the WHO declared COVID-19 a pandemic. The swift action by the Nepali government was praised widely by the public, but the students who were aboard the flight were unable to return and resume classes in person for more than two years. An IT student at a university in Wuhan said he would graduate while still in Kathmandu and had given up on the idea of any Chinese exposure altogether—a factor that had primarily driven him away from a similar programme in Australia four years ago.

While the world adjusted to a new sense of normalcy, holding in-person events, classes, and even graduation ceremonies, China’s strict zero-COVID policy left no room for foreign students to return to campus life and experience the cultural immersion that they had expected out of their programmes in China. Many were also deprived of invaluable opportunities upon graduation. (Chitrakar, 2021)

Students enrolled in humanities programmes mentioned a lack of engagement after being outside the campus for more than two years. STEM students, who require a high degree of in-person experience and mentorship, seem to be the most aggrieved. They are unsure how they will be able to sit for their practical tests or if they will be able to do so at all. This cohort seemed most worried about their long-term career prospects.

Trapped in Nepal, medical and engineering students were not able to secure internship opportunities, initially due to the pandemic, and because the Nepali government refused to provide them with an alternative career path without completing their internships (Sangroula, 2020). While no official explanation has been given, the interviewed students think that it may be because of the scarcity of internship positions and a preference for students who studied in Nepal. Additionally, those who study in China need to go through a tedious academic equivalency process.

Many of these students also saw their stipends discontinued abruptly in mid-2020. While they have been promised that the accumulated amount will be paid once they return to China, they juggled jobs in Nepal and online classes in China. Unsurprisingly, this has forced some to drop out of their programmes altogether while others have opted for a gap year. However, taking a gap year is not an ideal situation, as the students risk losing their scholarships. The CGS covers a fixed period of five years (one year for the Chinese language course and four years for the degree), and when students on scholarships take time off, it means that they will be required to fund the gap year themselves.

Numerous WeChat groups (with a capacity of 500 students per group), created by the Embassy of Nepal in Beijing to communicate COVID-19 evacuation processes in 2020, are now being used to share various signed petition campaigns and to organise protests. These issues were also raised by the Foreign Minister of Nepal, Narayan Khadka, to the Chinese leadership when China’s Foreign Minister, Wang Yi, visited Nepal in March 2022. Wang assured that the return of Nepali students to China was one of his government’s immediate priorities and agreed to start the process at the earliest (Giri, 2022). It is still unclear what Beijing will do to address the concerns. In her interview in April 2022, the Chinese ambassador to Nepal, Hou Yanqi, said that the foreign ministries of the two countries were working on plans to ensure the students’ return to their universities. However, she also said that to prevent the spread of the pandemic, the Nepali side had “unilaterally” announced the suspension of international flights with most countries, which led to the suspension of direct flights between Nepal and China (Ghimire, 2022). On July 6, 2022, the ambassador said, “The Chinese side has promptly reviewed and approved the application of the first batch of Nepali students to return to universities in China. Some students have already arrived in China to continue their studies” (Hou, 2022).

Conclusion: a picture with mixed messages

This chapter explores the rise of Chinese influence, often described as soft power, through enhanced educational ties with Nepal. While only a handful of elite Nepali students were enrolled in Chinese institutions until the 1960s, the number steadily picked up after Deng Xiaoping came to power and China worked at re-building partnerships with its neighbours. Nepali students can currently apply to more than 100 universities across China in both self-funded and scholarship programmes. Between 2004 and 2016, the number of foreign students in China grew fourfold while those from BRI countries expanded eightfold. In 2016, China saw a total of 40,000 international students, marking a 35 percent increase from 2012 – 5,160 of those were Nepali students, out of whom 733 studied in China for less than six months and 4,427 students studied for more than six months (ChinaPower, 2016). The Chinese government is perhaps looking at these scholarships not only as an investment in friendly relationships but also in its economy over the short- and medium-term. These students are also seen as future leaders who will help China establish strong connections with Nepal’s academia and institutions. By offering substantial opportunities to Nepalis, China follows in the footsteps of India, the West, Japan, and the Gulf countries who are attempting to establish themselves as cultural and educational hubs for Nepalis.

Even so, the message from Nepali students returning from China is mixed. Most of the students interviewed seemed happy with their choice and the exposure they had received in China (Zuo, 2022). Some students had carried on with master’s programmes in China after completing their undergraduate studies, while medical students had come back to establish successful careers in Nepal (Kharel, 2013). However, there are reports of students applying to China after failing their MBBS entrance exam to get into medical colleges in Nepal. A student suggested that the reason behind the “consistently weak performance” by Nepali students who had graduated from Chinese medical schools is because of Nepal’s systemic laxity for students seeking to study abroad, particularly in China.

A parallel can be drawn between the current situation of Nepali students who have been pushed out of China due to the zero-COVID policy and those who were sent back to Nepal during the Cultural Revolution in the 1960s. The ebb and flow of these movements offer a metaphor for the Nepal-China relationship at large: though there have been many problems along the way, ties have evolved and have remained fairly stable. In keeping with Nepal’s growing relationship with China and the latter’s rise as a world power, there has been a significant increase in the number of Nepali students in China after the Cultural Revolution. After 1978, as China opened itself to the world and witnessed unprecedented economic growth, its doors were flung open to foreign students. This growth and renewed Chinese sensitivities over Tibet have been decisive in shaping China’s growing engagement with Nepal. This has also meant a strong emphasis on people-to-people ties and China opening its doors to Nepali students. China now views the young returnees from its modern universities and cities as new ambassadors poised to help expand its footprint in the geopolitical neighbourhood.

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The post Nepali Students in China: A Source of Soft Power for Beijing? first appeared on CSEP.

What emerges from this exercise is a picture of variety in methods, effect, and impact. There is clearly a serious Chinese effort to increase her influence in south Asia over the last decade and a half, and that effort is marked by considerable innovation and sophistication in its methods. But the efficacy of those methods in terms of outcomes is, at best, mixed.

The reasons for the varied effectiveness of China’s efforts to gain influence in south Asia differ from country to country. The one common factor that might explain the variance is the politics that seems inseparable from these efforts. This is true in terms of China’s own shifting policies: from the Cultural Revolution export of revolution, to Deng Xiaoping’s reforming emphasis on economics, to the securitisation of relationships under President Xi Jinping. It is also equally the case that Chinese influence operations are now often entangled in the domestic politics of south Asian countries, whether in Nepal, Sri Lanka or in Bangladesh. As a result, the proportion of local opinion favourable to China in south Asian countries, with the exception of Pakistan, has varied considerably over time and is not rising.

Equally important as the effort put in by China is the demand in south Asia for what China has to offer, particularly in terms of infrastructure building and financial support, which opens the door for China’s soft power. In this respect, south Asia other than India is no different from the rest of the global south. It remains to be seen whether this welcome will continue as China gains power and agency in the international system and behaves as other great powers do. Already China is willing to be seen taking sides and expressing preferences in the internal politics of Nepal and Sri Lanka, and this has occasioned natural reactions in the political sphere.

What we have in this volume are contributions to a serious effort to understand an evolving phenomenon. China itself, south Asia, and the international environment are undergoing rapid change on an unprecedented scale. It is our hope that this volume will contribute to the growing international scholarship and interest in the phenomenon of China’s growing international influence in a significant part of the world.

The post Preface first appeared on CSEP.

This chapter provides an introduction to the report, summarising its key objectives and findings. It reviews the drivers of China’s recent and rapid rise in South Asia as well as the themes, partners, and tools that regulate its engagement with the region. In the first section, we discuss the context that has enabled a rising China and what we know about its growing global influence. We note that much of the knowledge in this field of study is focused on hard economic and security issues, that it is predominantly produced in the West, and that the case of South Asia is mostly missing. The second section sets the context for China’s rapid rise in South Asia since the 2000s, with deepening and expanding engagements with all countries, though the divergence in India-China relations has complicated the regional picture. The third section presents the report’s objectives, the methodological choices and limitations of our case study-oriented approach, and a summary of each chapter. The fourth and final section reviews the main patterns and findings of the eight case studies, offering some conclusions and suggesting future avenues of research to expand our understanding of the themes, partners, and tools that will shape China’s future engagement with South Asia.

China’s rising influence

China’s presence is now felt in every corner of the world, in the Global North and the developing countries of the Global South alike. And as with other rising powers in the past, China’s growing economic capabilities and interdependence are pushing it to protect and promote its expanding interests abroad through a combination of traditional and new instruments. China’s modus operandi abroad reflects much of its domestic principles and experience, including its centralised, single-party-led political and economic models of organisation.

The infrastructure projects under the Belt and Road Initiative (BRI) might be the most visible aspect of China’s presence, reflecting its financial might through considerable investments, development assistance, and increased trade. But there are more subtle or even hidden aspects of Chinese influence. China’s diplomats, senior Communist Party of China (CPC) officials, and its media have engaged in multiple projects to exercise soft power, shape narratives, intervene in domestic politics, and mediate bilateral disputes. The nature and scale of these efforts may vary depending on the political and economic environment in the host countries, but increasingly, China is willing to get involved despite challenges, creating opportunities for itself to actively shape this geopolitical region.

As China garners greater political, economic, diplomatic, and security influence worldwide, its key objectives remain influencing public opinion and decision-making processes overseas to encourage policies that are favourable to Beijing and precluding or pre-empting decisions that would go against its core interests.

Even as Chinese influence grows globally, pushback and opposition to it have also escalated, often driven by increasingly passionate and ideological narratives. China’s influence has become progressively salient politically. From Europe to Australia, from Zimbabwe to the Philippines, and from Taiwan to the Solomon Islands, anti-China sentiments have become significant. Major global powers have begun deploying countermeasures to thwart overt and covert Chinese influence.

It is now widely accepted that China’s Confucius Institutes for language and culture training curtail academic freedom, attempting to prevent independent research on issues related to China and promoting one-sided and overly positive images of the Chinese party-state (Peterson, 2017). Several countries have responded by shutting them down. Australia has established several measures, including new laws, to ensure that Australian universities, non-governmental organisations, and political parties are less prone to Chinese influence. The United States has launched a tech war against China to safeguard sensitive information and the privacy and security of its citizens and enterprises. Indeed, the American tech measures followed India’s restrictions on Chinese apps and technologies after a deadly military confrontation between the two countries along their disputed boundary in June 2020.

In Europe, the 5G debate has unearthed a growing network of Chinese lobby companies that are shaping the governance and regulation of the telecom and other critical industries. New Delhi has also long placed restrictions on academic, cultural, and people-to-people links with China for security reasons, and the United States and other developed economies have followed suit in recent years by issuing sanctions, travel embargoes, and visa restrictions against Chinese citizens on various grounds, from human rights abuse to technology theft. The foreign activities of the United Front Work Department (UFWD) of the Central Committee of the CPC have also long been highlighted by scholars (Brady, 2017; Dotson, 2019; Hsiao, 2019).

Yet the literature on China’s rising influence continues to focus only on certain themes and geographies. First, economic and military dimensions continue to garner the most attention, reflecting the changing balance of power. In Europe, most studies have concentrated on China’s sudden rise as a commercial and investment partner, following the massive rise in Chinese foreign direct investment from €1.6 billion to €36 billion in just six years, between 2010 and 2016 (Huotari, 2018, p. 9). Besides the hard economic dimension, the rise of China has also been predominantly studied from the military angle, assessing how Beijing has modernised its defence forces and extended its power projection capabilities in Asia and beyond. Ghiselli (2021), for example, describes the slow “securitisation” of China’s foreign policy after 2011 to protect its extraterritorial citizens and economic interests.

Second, much of the work on China’s rise continues to originate in the United States and Europe, reflecting the continued centrality of Western universities and knowledge production systems. Beijing’s growing clout is naturally seen as a cause for concern, with China being described as a “strategic competitor” (Chabra, Doshi, Hass, & Kimball, 2021, p. 2). Even though similar, if perhaps less acute concerns about China’s growing leverage are felt in other countries and regions of the world, there has been less work done here compared to that in the more developed Western nations. Far less is known about how China has engaged other regions and how smaller and middle powers beyond the West have handled this increasing Chinese influence. There are now widely reported instances of Chinese presence and influence across different domains in Latin America, Africa, Southeast Asia, and the Pacific Islands.

But South Asia stands out as a particularly understudied geography when it comes to China’s engagements. This report seeks to help correct this situation by surveying the various dimensions of China’s engagement with four South Asian countries: Bangladesh, India, Nepal, and Sri Lanka. The eight case studies by scholars from the region help further our knowledge about China’s strategy and methods and about how different stakeholders in these countries are responding to China’s rise, whether by initiating, facilitating, or resisting engagement. What emerges is a clearer picture of the different themes, partners, and tools that have shaped China’s new ties with South Asia. The three main sections of this report are described below.

First, what are the dimensions that predominate in China’s engagement in South Asia? The themes include different sectors of engagement, from education to politics, as well as public narratives that support China’s engagement, from economic “win-win” cooperation to images of Beijing as an ally of smaller states and a counter against Indian and Western hegemony.

Second, who are the actors that shape China’s engagement in South Asia? The partners include a variety of both government and private actors, in China and in South Asian countries, who establish regular processes of consultation and cooperation to deepen engagement. In this case, the Chinese government often plays the role of a matchmaker, facilitating connectivity.

And third, how does China realise its engagement in South Asia, focused on different themes and partners? The tools include multiple methods to engage individual or institutional partners and countries, including a multiplicity of channels that are often, but not always, established by governments. The chapters in our report focus, in particular, on non-governmental communication instruments, including social media, as a preferred mode to signal and influence public opinion.

China’s methods and strategies in South Asia

Following China’s economic reforms and opening up, its rise as an influential economic and political actor in the global system has been frequently predicted. Its fall has also been predicted, if somewhat less frequently, across the same period. While the reasons for the rise are well known, the reasons for its predicted decline or fall are often ignored or forgotten. For one, China under the ruling CPC has a tendency to run into significant economic and political upheaval practically every decade—a trend that has been obvious since the creation of the People’s Republic in 1949. Consider, for example, the Great Leap Forward (1958–62) or the Cultural Revolution (1966–76) before the reform era, or since then, the student protests of 1989, the more slow-burning fuses of corruption—the target of a political campaign over the past decade—widespread local government debt, the Covid pandemic, and lately, demographic decline.

Both, China’s suffering during such upheavals as well as its surviving them, so far, have a great deal to do with the nature of the government in place in Beijing—or more precisely, the nature of its ruling party. China is, for all practical purposes, a single-party state with the CPC dominating and guiding the other minor political parties in what is on paper a multiparty system. China’s internal upheavals have not failed to affect its external policies, but the CPC’s confidence and experience, which come with being entrenched in power, have allowed it also to conduct the country’s foreign policy with a greater focus on the longue durée. Its activities in building up political, economic, and military influence in South Asia offer a case in point.

There is certainly a great deal that we do not know about how decisions are made within the Chinese system, and some characteristics of decision-making are unique to the kind of authoritarian system that China is. These do make it difficult to study Chinese foreign policy, but that does not mean it is impossible to study. Indeed, China is no longer a “black box”—a particularly widely held belief in South Asia. The CPC has been broadcasting its intentions loudly and clearly, especially in General Secretary Xi Jinping’s “new era” (Xi, 2017, 2022), and there are already works by scholars from the Global South that analyse these intentions—both domestic and external (Jacob & Subba, 2022a, 2022b)—as well as China’s methods (Abdenur, Folly, & Santoro, 2021; Benabdallah, 2020; Jacob, 2020a).

While China’s regional outreach and approaches in South Asia might have been something of a blind spot for a time, there have been some efforts to ameliorate this situation (Jacob, 2017b; Samaranayake, 2020; Wignaraja, Panditaratne, Kannangara, & Hundlani, 2020; Pal, 2021). There has also been some collaborative work between South Asian and Chinese scholars to assess changing dynamics (Ranjan & Changgang, 2021).

Given their experiences with the People’s Republic of China since its formation, most Indian policymakers have long watched warily Chinese attempts to expand their influence in South Asia (Gokhale, 2022a, 2022b; Menon, 2016; Saran, 2022). These early attempts did not amount to much or were unsustainable until China had also built up the economic muscle to go with its political propaganda and diplomacy.

With the launch of the BRI in 2013, any remaining doubts about China’s intention to reshape not just the regional order in South Asia, but the international order itself, have been more or less dispelled (Jacob, 2017a). Subsequent tensions on the disputed India–China boundary only provide added evidence of this Chinese intent.

This said, China is a relatively new player in South Asia compared to other external powers such as the United States, and, until recently, far from being either deeply involved or central to South Asian economies (Xavier, 2019, 2020). For these reasons, even as the number of studies on Chinese involvement in South Asia has grown in recent years, there is also much that needs to be studied. While there are trends in Chinese behaviour and activity in South Asia that are in line with what it displays in other geographies, there are also particularities that deserve greater attention from scholars and policymakers alike. These are the result of both South Asia’s unique features as well as the innovations that the Chinese party-state has responded with.

One of the unique features of South Asia is India’s preponderance as a political and economic actor besides its dominant historical and cultural ties to the region. This is quite unlike, say, Southeast Asia, where historically Chinese influence has contended more or less equally with Indian influence. Another is the fact that most of the region has—since the beginning of this century at least—tended to move away from authoritarian rule and has seen regular changes in government. This has both created opportunities as well as complicated bilateral relations for Beijing.

Nevertheless, India’s neighbours in South Asia view the BRI as offering them development opportunities that India itself has not been able to offer because of the latter’s shortage of capacity and its lack of economic integration with the rest of South Asia. As a result, China is knitting together a new economic order in South Asia through the BRI, in which many countries have more significant economic relationships with China rather than with India. India itself has China as one of its largest trading partners.

Alongside this change in the economic order, there has also been an increasing shift in the political order, where smaller South Asian countries have become more accommodating of Chinese interests. Nepal, for instance, has clamped down on the flow of Tibetan refugees, and its ruling Communist Party of Nepal has close ties with the CPC, with active party-to-party links exemplified by the latter holding training sessions for the former (Jacob, 2020b). Sri Lanka and the Maldives have each at different times been led by China-leaning strongmen who have made economic decisions favouring Chinese parties (Jacob, 2018).

While research on China in South Asia has largely focused on the influence of hard elements such as economics and security, greater attention needs to be paid to the softer aspects of influence. This report attempts to fill this gap using case studies from across the region, encompassing Nepali students in China, China’s approach to the Rohingya crisis that impacts Bangladesh, its cultivation of religious and political elites in Sri Lanka and Nepal, and external messaging and perception management across Nepal, India, and Sri Lanka.

Objectives, structure, and findings

This report is the main outcome of a two-year-long research project on China’s influence in South Asia at the Centre for Social and Economic Progress (CSEP). We began before India-China relations nosedived with the military clash at Galwan, in eastern Ladakh in mid-2020. Our exercise was guided by four main objectives and methodological choices and naturally faced some limitations.

Description to fill the knowledge gap

Our first and main objective was to describe China’s engagements with South Asia by undertaking evidence-based assessments of the themes, partners, and tools leveraged by China to do so. As noted in the previous section, China’s rise in South Asia is a relatively recent development, and scholarship is still catching up to empirically map this new phenomenon. The picture is relatively clearer on China’s economic and security presence in the region, including figures on trade, investments, or military cooperation. These concrete indicators are easier to track, and their centrality may also reflect India’s strategic priorities and concerns. But when it comes to the soft dimensions of China’s engagement, which are often less visible but just as substantive, the knowledge gap is far wider. We strive to better survey China’s presence in the region across different dimensions, beyond the more apparent economic and security domains.

Analysis over evaluation

A second emphasis of our empirical approach is the focus on analysis rather than evaluation. Some literature focuses on China’s operations to export its authoritarian model and undermine democracy (Charon & Jeangène Vilmer, 2021). At the other extreme, other literature portrays a selfless China as an altruistic actor seeking to counter India’s hegemonic role with cooperative “win-win” relations based on pure equality (Sangroula, 2018). These contrasting approaches may explain why much of the work of Indian authors tends to focus on the negative impact, while scholars from Nepal, Bangladesh, and Sri Lanka tend to emphasise the positive paradigm. We, therefore, asked contributing authors to focus on producing descriptive studies and not make any prior assumptions about the eventual negative or positive effects of China’s engagements with the governments and peoples of these countries. As will be evident to the reader, perceptions of China’s “influence” or “presence” in South Asia are not uniform among the authors in this report.

Case studies over quantitative generalisations

There are many approaches to studying China in South Asia. Quantitative methodologies seek to measure the scope and impact of China’s relations across South Asia based on hard data. Qualitative methodologies, on the other hand, focus on case studies for a thick description of China’s modus operandi in one specific sector. Driven by the project’s descriptive and analytical objectives, we decided to focus on the latter methodology, inviting scholars to do deep dives into one specific dimension of China’s engagement. Our report thus throws some light, but it does not comprehensively cover and illuminate all of China’s multifaceted engagements in South Asia. The case studies approach somewhat limits our ability to arrive at categorical conclusions about China’s intentions and effects across the region, but there is nevertheless enough meat in here for readers seeking an understanding or some sense of a Chinese “strategy” for South Asia.

Build regional capacity through collaboration and comparison

The fourth and final objective of this project was to expand regional research capacity on China. Through various online interactions, we were able to contribute towards building an emerging network of South Asian scholars working on China and its engagements in their respective countries and sectors of expertise.

While the project was hosted at CSEP, in New Delhi, all except one of the authors are from South Asian countries other than India, and at the time of writing, all except two of the contributors were located inside the region. Most are young or emerging scholars. By including only one case study that relates to India, we consciously tried to engage with and learn from voices in Nepal, Bangladesh, and Sri Lanka to balance the traditional India-centric focus that marks much of the study of China in South Asia. Far from being just subjects of great power rivalry in the region, these three countries have significant agency and their own history of dealing with China (Lim & Mukherjee, 2019; Plagemann, 2021). Even the most hawkish Indian policy towards China will have to be cognisant of different perceptions across the region.

Through several workshops, including discussions of draft papers, we also helped build a sense of community and collaboration for scholars to exchange and compare assessments across the region. Additionally, through a series of international workshops, “China’s Global Influence: Comparative Cases,” scholars from other regions presented their work on China’s engagements in Europe (MapInfluenCE, 2020), Southeast Asia (Xue, 2022), and South America (Abdenur et al., 2021) and also in the technology space (Hannas & Tatlow, 2021; Wallis et al., 2020) and at the United Nations (Piccone, 2018). This was a way to strengthen regional-global linkages. Scholarship on China in South Asia is comparatively less developed, and so there is scope for much growth as well as to note that there are learnings for other parts of the globe from South Asian experiences.

Limitations

No analysis of China’s foreign policy engagements and regional and global intentions can be complete without analysis from South Asia. At the same time, no analysis of China’s engagement with South Asia itself can be complete or comprehensive given the complexity of the countries in the region and a diverse extended geography that concentrates over a third of the world’s population. Our approach and choice of methodology naturally have their specific limitations, of which four stand out.

First, the choice of contributing authors located in the region was constrained by the limited number of experts on China. There is a significant gap between a small-sized and very senior generation of Sinologists and a new, still emerging but promising generation of South Asian scholars specialising on China.

Second, our project also reflects a limitation of what is methodologically feasible for researchers: there are several media reports (and much policy interest) about China’s covert operations in the region, including allegations about disinformation in India or electoral interference in Nepal. This is an important issue, but it would have been unreasonable and maybe even irresponsible to expect scholars to find the evidence necessary to prove this.

Third, regarding the selection of countries, our qualitative methodology forced us to often be opportunistic. For example, we have no case study from the Maldives or Bhutan, in the latter case because China’s presence is still very limited. We also left out three other neighbours of India—Afghanistan, Pakistan, and Myanmar—which are part of the greater subcontinent and on whose relations with China there is already some significant work.

Fourth, and most importantly, the choice of sectors is far from comprehensive, leaving out many aspects of China’s engagement that deserve further analysis, including, for example, its para-diplomacy and engagement of sub-national actors. Our case studies also do not always allow a temporal analysis that tracks the rise or decline of China’s influence, but they certainly suggest the existence of certain cycles and patterns.

Summary

The report contains eight chapters structured as three sections that focus on the themes, partners, and tools that shape China’s engagement in South Asia.

The first section, “Getting a Toehold,” assesses two examples of China’s initial, probing engagement in two thematic sectors. In Chapter 2, Akhilesh Upadhyay examines China’s forays into Nepal’s educational sector, assessing how the rising number of Nepali students in China and those who return are facilitating bilateral relations. Upadhyay also examines how China’s strict “zero Covid” policy has dented its positive image as an educational destination. In Chapter 3, Shahtaj Mahmud and Kriti Rai review China’s novel role as a conflict mediator between Bangladesh and Myanmar, following the Rohingya refugee crisis. Beijing stepped in to build peace between two neighbours in India’s periphery, but the authors find that it had limited, if not negligible, impact.

The second section, “Finding Partners,” looks at how China is engaging new partners in the region. In Chapter 4, Chulanee Attanayake surveys the role of religion and Beijing’s attempts to use Buddhism as a “tool of soft power” in Sri Lanka. The frequency and scope of engagement has been increasing in recent years, in tandem with the growing influence of the monkhood on its politics and public policies. Party-to-party links have also accelerated in the region. Based on primary interviews with Nepali politicians, Aneka Rebecca Rajbhandari and Raunab Singh Khatri analyse in Chapter 5 how the CPC has diversified its engagements with different political parties in Nepal. They show that ideology is no bar in Beijing’s attempts to influence Nepal’s domestic affairs. In the case of Sri Lanka, in Chapter 6, Asanga Abeyagonnasekera looks back at the 2015–21 period to assess the CPC’s engagement with the Rajapaksa family and their rule, which coincided with China’s rapid forays into the Indian Ocean region.

The third section, “Communication Strategies,” reviews the narrative and institutional tools that China deploys to engage with the region. Chapter 7 by Amish Mulmi surveys China’s cultural diplomacy initiatives in Nepal, seeking to reinforce a positive image of the “good neighbour” to the north. His assessment of the Chinese Embassy activities in Kathmandu demonstrates the rapidly growing and diverse range of outreach tools used to shape public narratives about China, including Tibet. In Chapter 8, Ananth Krishnan looks back at the 2020 India-China military confrontation in Ladakh to analyse the emerging patterns of the CPC’s external messaging that target Indian audiences on traditional and new media platforms. Krishnan argues that while messaging is still a limited and sometimes unintended consequence of growing national sentiment in China, it will have growing implications for India’s China policy.

In the final chapter of this volume, Sanjana Hattotuwa deploys novel methodologies to offer path-breaking insights into how China uses various Facebook accounts in Sri Lanka to propagate its policies and narratives. He argues that such “online operations” mirror earlier offline initiatives to disseminate the CPC’s propaganda, and they show high levels of coordination, strategic planning, and execution.

Key trends, patterns, and future research paths

Studying China’s growing and evolving engagements in the region, the chapters in this report offer several takeaways about some obvious patterns of Chinese behaviour in South Asia. Five such patterns stand out.

One, India’s centrality in the region is a factor that the Chinese emphasise to drive their engagement with other governments. This engagement shows both expected and unexpected patterns of behaviour. While Pakistan is not a case study in this work, it should be obvious that the fact that India is generally seen as a common adversary allows China to promote ties with Pakistan using conventional hard security and economic methods. Using this as a benchmark allows us to see more easily the innovation that China brings to the rest of South Asia in terms of the range of its approaches.

In each of the three smaller countries examined in this work—Nepal, Bangladesh, and Sri Lanka—India is seen as too big to ignore or to even anger beyond a threshold, but each country has a unique equation with New Delhi based on historical and cultural factors and a different degree of closeness in bilateral ties. Beijing is cognisant of these differences in degree as well as of both the limits of India’s influence in these countries and of the range of tolerance for New Delhi’s demands in their capitals. India’s overbearing nature—as commonly perceived by ordinary Nepalis and Sri Lankans—allows China to insinuate itself into closer ties with governments and ruling elites in Nepal and Sri Lanka.

In Bangladesh, meanwhile, where the ruling party is seen as traditionally aligned with India, the Chinese have had to resort to an unusual and riskier tactic to find a footing in popular and elite perception by trying to “help” Dhaka in dealing with the Rohingya crisis spilling over from Myanmar. Beijing’s intention, thus, is to find approaches and offer inducements and incentives that allow it to balance better against New Delhi. But this is not always easy as the case study from Bangladesh shows. It can also lead to new complications as suggested by the two case studies from Nepal of students with exposure to China and the latter’s cultural diplomacy.

Two, China pays careful attention to language and discourse, to “set the mood” as it were, in bilateral ties. “China’s Tibet” is an important placeholder in China’s relations with Nepal and other South Asian countries as is the “one China policy,” for example. It is not that the Chinese do not know that the former is an illegitimate claim that undermines historical and cultural linkages between South Asian regions and Tibet or that the latter is again a historically suspect claim. But it is precisely these weaknesses that make it imperative in the CPC’s worldview to stress and push such claims all the more loudly and visibly. Over time, the belief is that sheer volume and persistence will sediment these claims as normal and unexceptional among foreign audiences, including those in South Asia.

Three, China is adept at employing both traditional and new media in spreading its message. The case study from India shows the depth and sophistication of China’s approaches, even in what has traditionally been a hostile environment. China has invested much in its international radio and television services as well as in expanding its media presence across geographies. This investment is not simply monetary, which might see fluctuations over time, but also includes cultural and human investment in the form of language specialisations, support for its researchers to conduct fieldwork, and large embassies that include not just ministry of foreign affairs personnel, but also CPC officials and scholars embedded in critical positions, so as to promote knowledge of and exposure to the outside world.

Some of these approaches might become difficult over time with increasing concerns about Chinese intentions and popular hostility. Indeed, print and other traditional forms of media can be restricted by multiple means by governments. However, regulating disinformation via social media is an entirely different kettle of fish for governments, especially as the final case study in this volume, on China’s instrumentalisation of Facebook in Sri Lanka for propaganda purposes, shows.

Essentially, it should be clear that China has a wide spectrum of activities in its quiver, ranging from traditional diplomatic “charm offensives” in the form of scholarships and exchange programmes for students to targeted fellowships and organised visits for particular individuals and institutions, and from traditional media outreach via print and radio and television waves to using the internet and social media to amplify its outreach. While China’s tools and methods are multiple, its objectives and messages are always on point—to sustain the CPC in power using foreign policy and influence in foreign capitals to protect its interests—control over Tibet, claims over Taiwan, and dislodging the United States as the global hegemon and regional powers like India from positions of influence. To this end, China employs a mix of both fact and fiction. While the greater volume and intensity it can deploy is not in doubt, it is another matter, however, to assume that China’s propaganda efforts, its disinformation campaigns, or its interventions in elite politics in other countries are always successful.

This said, complete success might not be as important an objective for the Chinese at this early stage of their intervention in South Asia as establishing a presence and being counted as a player in regional capitals—spaces that, from Beijing’s perspective, have been dominated for too long by only India or the United States.

Four, while it is easy to observe that China can often overreach and suffer blowback—consider the common impression that it has backed one or the other political formation in Sri Lanka, Pakistan, or the Maldives or that it simply does not deliver as promised—it is important to note that China learns from its mistakes. It is quick to adapt and to change course as well as methods. In Sri Lanka, for instance, the contretemps over Hambantota led to the replacement of a regular ambassador from China’s diplomatic corps with one from the CPC’s UFWD (Cheng Xueyuan), who not just engaged in damage control, as a traditional diplomat is wont to do, but attempted assiduously to cultivate Maithripala Sirisena, Mahinda Rajapaksa’s successor as president, and to raise China’s profile even further in that country. UFWD ambassadors—with their greater weight in the political system back home than regular ministry of foreign affairs ambassadors—have also served in Bangladesh (Zhang Zuo, Li Jiming) and Pakistan (Nong Rong), perhaps with similar briefs to resolve crises and to push the envelope for their country still further.

Five, China is increasingly becoming experienced and comfortable with engaging with South Asia’s many and diverse political traditions and systems—including the instabilities and upheavals that plague them. It is also becoming savvier about social and ethnic diversities in the region as is evident from its social media outreach and investments in multiple languages and reaching out to various ethnic and religious minorities—Muslims and Tamils in Sri Lanka and Buddhists in Bangladesh, for example. While the CPC’s belief in the right of countries to “independently choose social systems and development paths” (Ministry of Foreign Affairs of the PRC, 2023) is essentially a criticism of Western-style democracy and electoral politics, it remains willing to engage with the democracies of South Asian countries through ties with various political formations—both the ruling party and the opposition—even as it tries to promote its own political system whether overtly, through “Xi Jinping Thought” study sessions for political parties in the region, or covertly, through social media propaganda. We should expect China to deploy ever greater resources to influence and shape political, economic, social, and media spaces; legislative agenda; regulatory environments; and above all, civil society in South Asia.

This study is hopefully only the beginning of a trend of longer-duration and more in-depth studies of Chinese activism in South Asia. China’s tasks in the South Asian countries that have been examined in this work are only getting more complicated. For example, perceptions in Sri Lanka following the country’s debt default, and China’s reluctance to help finalise an International Monetary Fund assistance programme, or popular perceptions in Pakistan that is reeling under an economic crisis despite its great faith in Chinese assistance deserve more granular analyses. China’s thinking, its responses, and the instruments that it will deploy in response should form part of a useful and important research agenda for the future.

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Wignaraja, G., Panditaratne, D., Kannangara, P., & Hundlani, D. (2020, March 24). Chinese investment and the BRI in Sri Lanka. Retrieved from https://www.chathamhouse.org/2020/03/chinese-investment-and-bri-sri-lanka.

Xavier, C. (2019). Converting Convergence into Cooperation: The United States and India in South Asia. Asia Policy, 14(1), 19-50. Retrieved from https://www.nbr.org/publication/converting-convergence-into-cooperation-the-united-states-and-india-in-south-asia/

Xavier, C. (2020). Across the Himalayas: China in India’s Neighborhood. In Kanti Bajpai et al (Eds.). Routledge Handbook of China-India Relations. London: Routledge. Retrieved from https://www.routledge.com/Routledge-Handbook-of-ChinaIndia-Relations/Bajpai-Ho-Miller/p/book/9781032400495

Xi, J. (2017, October 18). Secure a decisive victory in building a moderately prosperous society in all respects and strive for the great success of socialism with Chinese characteristics for a new era. 19th National Congress of the Communist Party of China. Xinhua. Retrieved from http://www.xinhuanet.com/english/download/Xi_Jinping’s_report_at_19th_CPC_National_Congress.pdf.

Xi J. (2022, October 16). Hold high the great banner of socialism with Chinese characteristics and strive in unity to build a modern socialist country in all respects. Report to the 20th National Congress of the Communist Party of China. Xinhua. Retrieved from https://english.news.cn/20221025/8eb6f5239f984f01a2bc45b5b5db0c51/6793c777df4c49c5add56e9eccbd2d3b_Full%20text%20of%20the%20report%20to%20the%2020th%20National%20Congress%20of%20the%20Communist%20Party%20of%20China.doc.

Xue, G. (2022, January 25). Chinese mining companies and local mobilization in Myanmar. Washington, DC: Carnegie Endowment for International Peace. Retrieved from https://carnegieendowment.org/2022/01/25/chinese-mining-companies-and-local-mobilization-in-myanmar-pub-86262.

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After several decades of limited engagement, China has rapidly deepened and diversified its relations with India and its neighbouring countries. However, beyond the economic dimension, not much is known of the other aspects of China’s growing footprint in the region. As it garners political, diplomatic and security influence, China has also become increasingly entangled in various domestic processes of South Asian democracies, from shaping public opinion to influencing policy-making. As with other great powers, China’s objective is two-fold: to encourage policies that are favourable for itself, and to pre-empt decisions that would go against its core interests. This report assess how China is becoming increasingly influential beyond just trade and other economic ties with India and its neighbours. Based on eight case studies by analysts and scholars from Bangladesh, Nepal, India and Sri Lanka, the report examines China’s growing role in a range of sectors in these four countries, including education, public diplomacy, technology, social media, civil society, party politics, religion, and governance. It is among the first systematic, case study and evidence-based analyses of China’s new methods and strategies of engagement with South Asia. Going beyond an India-centric perspective, the report also expands our understanding of how other South Asian countries perceive China and seek to promote their own interests and concerns.

The post How China Engages South Asia: Themes, Partners and Tools first appeared on CSEP.

The Hilsa shad (Tenualosa ilisha) is among hundreds of other species of aquatic animals and plants collectively referred to as “blue foods” in the Bay of Bengal. They form a crucial source of food, livelihood, and culture for millions of coastal communities in India, Bangladesh, Myanmar, and Sri Lanka. This policy brief highlights the need to take on a regional ecosystem approach when it pertains to the conservation of aquatic biodiversity and the sustainable management of the Bay of Bengals´ productive, albeit stressed fisheries resources (blue foods). The various challenges, including overfishing, pollution, and habitat destruction are major threats to aquatic biodiversity and in turn threaten the livelihoods and lives of millions of people in this region. As the demand for blue foods grows in the Bay of Bengal countries, emerging political powers will come under immense pressure to safeguard their dwindling fish stocks and protect their citizens’ interests. Therefore, beyond tackling the scientific questions, there is a need to address the capacity deficit, both at the intra- and inter-governmental levels. This brief argues for a sustained capacity development strategy that will be implemented at multiple levels, viz., the local (community level), mid-management (forest and fisheries), national and regional. An regional approach to managing the Bay of Bengal marine ecosystem that also considers the entire watershed from mountains to ocean – the Aquascape will be crucial.

Aquatic species and the Blue food system of the Bay of Bengal

The Hilsa shad (Tenualosa ilisha) is the national fish and part of the very identity of Bangladesh, almost always served at weddings and religious ceremonies, and exported to Bengali stores the world over. Approximately six million people are engaged in the Hilsa value chain in the countries of the northern Bay of Bengal where 95% of this fish is caught. Bangladesh nets the highest quantities (76%), followed by Myanmar and India (Bay of Bengal Large Marine Ecosystem Project, 2010). It contributes to about 10% of the total fish production in Bangladesh and to approximately 1% of the country´s GDP (Fisheries Resources Survey System, 2014).

The Hilsa is among hundreds of other species of aquatic animals and plants collectively referred to as blue foods. They form a crucial source of food, livelihood, and culture for millions of coastal communities. However, these blue foods, particularly in the Bay of Bengal, are subject to various challenges, including overfishing, pollution, and habitat destruction— problems that transcend local communities and affect their livelihoods (Ghosh & Lobo, 2017).  Interestingly, while the Hilsa is known to be a resilient species whose population can recover if appropriate management measures are put in place, the same might not be the case for several other species that may be far more vulnerable but receive much less attention. These include the Gangetic Shark (Glyphis gangeticus), the Northern River Terrapin (Batagur baska), and the Ganges River Dolphin (Platanista gangetica gangetica)—all aquatic animals threatened with extinction.

Beyond its socio-economic and cultural significance, the Hilsa can also be considered a conservation mascot of sorts for the Bay of Bengal region. In its short life of approximately four years, the fish traverses several geographies. From the Bay of Bengal, the adult fish swims upriver to lay its eggs, covering several hundred kilometers from the sea to freshwater. The eggs hatch and the young fish migrate downstream towards the Bay. By the time they reach the estuarine areas of the Sunderbans, they grow to a size called Jatka. From here they move into the Bay and are said to reach their productive best between August and November. Most importantly, the Hilsa highlights the fact that nature does not know the political boundaries we draw for ourselves.

The case study of the Hilsa highlights the need to take a ‘fish-eye’ view when approaching issues pertaining to the management of aquatic natural resources like blue foods and other threatened marine wildlife, particularly in a common sea like the Bay of Bengal. Beyond tackling the scientific questions, there is a need to address the capacity deficit, both at the intra and inter-governmental levels. This will require a sustained capacity development strategy that will be implemented at multiple scales viz., the local (community level), mid-management (forest and fisheries), and national and regional.

Socio-ecological and Economic Challenges

The stronghold of the Hilsa is the Ganges delta, the world´s largest delta covering an area of approximately 100,000 sq.km, formed by 3 major rivers—the Ganges, the Brahmaputra, and the Meghna which flow into the northern Bay of Bengal.  Approximately two-thirds of the delta lie in Bangladesh, while the rest is in the Indian state of West Bengal. Large volumes of silt deposited by these rivers and their distributaries, along with the mixing of fresh water with the salt, create the perfect conditions for mangroves, the coastal forests that straddle these transitional zones, to thrive in. It is not surprising then that the world´s largest delta also happens to host the largest contiguous patch of mangrove forests, the Sunderbans, which covers a total area of 9,630 sq.km shared by India (38%) and Bangladesh (62%). However, despite its vastness and socio-ecological and economic significance, this region is faced with a whole host of challenges.

First, overfishing, pollution, and habitat destruction along various sections of the hilsa´s aquascape threaten a large number of aquatic species. Additionally, dams built on these rivers affect the migration of the Hilsa and a host of other aquatic species. This has been one of the most significant causes of decline of the Hilsa catch. Among the most notable is the 2.3 km long Farraka barrage that was constructed on the Ganga, close to the India-Bangladesh border and was attributed to bringing about precipitous declines of Hilsa catches in both India and Bangladesh. Before the construction of the barrage there are records of Hilsa migrating up the Ganga right till the towns of Agra, Kanpur, and Delhi, covering maximum distances of approximately 1,400 km from the Bay of Bengal.

The decline in catches of the Hilsa shad is easily felt by communities and generally reflected by marked increases in prices, prompting governments in both countries to put in place several moratoria to reverse this decline. In Bangladesh this has included fish sanctuaries, seasonal fishing bans, bans on fishing for Jatka as well as ‘fish ladders’ being tested out in the Farraka barrage to enable fish to scale the dam and reach their spawning grounds on the other side.

Second, the Bay of Bengal, particularly the continental shelf areas, are subject to heavy fishing pressure from both industrial and artisanal fleets. The industrialisation of fisheries in the Bay of Bengal began with the introduction of mechanised trawlers in the 1960s. Since the trawlers were introduced, the area covered by fishing fleets expanded four times till 2000 (Bhathal & Pauly, 2008) which are usually managed on a single species basis, has led to calls for ‘ecosystem management’, along with the development of various ecosystem indicators. The Marine Trophic Index (MTI). Trawling is a highly efficient, albeit destructive, fishing method responsible for over half of the total seafood landings in India and is responsible for the destruction of the sea floor ecosystem. The nets with extremely small mesh size capture a large number of species, beyond the target (commercially important) species, and often in far greater proportions than the target catch. ´Trash fish,´ the degrading term for this non-target fish biomass, was traditionally discarded. Trash fish constitutes hundreds of species, each playing a different role in the marine food web and are vital to food and nutrition security to coastal communities. ´Trash fish´ is now landed, dried, and ground before being sold at low rates as fishmeal to the fast-growing poultry and aquaculture industries in the country (Lobo, Balmford, Arthur, & Manica, 2010).

The resultant effect is not just seen in the Hilsa population, but among other species as well. For instance, India´s eastern coastal state of Odisha, also located along the Bay of Bengal, hosts the largest rookery (nesting beach) for sea turtles in the world. In 2015, at one of the mass nesting beaches in Rushikulya, Odisha, an estimated number of  170,939 Olive Ridley sea turtles (Lepidochelys olivacea) came ashore to nest over a span of six nights (Chandarana, Manoharakrishnan, & Shanker, 2017). Interestingly, sea turtles nesting on the beaches of Odisha are known to travel south  to feeding  grounds off the coast of Sri Lanka (Behera, Tripathy, Choudhury, & Sivakumar, 2018). Although it is illegal to hunt or kill of sea turtles in all the countries of the Bay of Bengal, they are accidentally caught as bycatch in fishing nets and die of drowning. Thousands of dead sea turtles that suffer bycatch related mortality drift to the shore along the East coast of India, a fate shared by a large number of other marine mammal species which include Dolphins, Dugongs and even large Baleen whales (Dudhat, Pande, Nair, Mondal, & Sivakumar, 2022) population health and status of marine ecosystems. Opportunistic reporting of strandings also serve as a powerful low-cost tool for monitoring these elusive mammals. We collated data over ~ 270 years available through various open access databases, reports and publications. Annual strandings along the Indian coast (mean = 11.25 ± SE 9.1).

Third, large scale (industrial) aquaculture, to meet the global demand, just like industrial fisheries which is a big producer of the country´s protein, comes with its own set of environment and social challenges. It is predicted that the global demand for blue foods will roughly double by 2050 and most of this will be met by aquaculture production. In 2020, of the total of 214 million tonnes of blue foods (aquatic animals and seaweed) produced globally 58% came from the farmed sector, while wild harvests including capture fisheries accounted for the remaining 42% (FAO, 2022). Asia has dominated the farm sector for the production of blue foods for decades now and in 2020 accounted for 91.6% of the total production with India, being the second biggest producer after China.

However, the dominant form of coastal aquaculture practiced in the wider Bay of Bengal region is intensive shrimp aquaculture. In India, the coastal state of Andhra Pradesh along the country´s east coast is the stronghold of the shrimp aquaculture industry.  The Pacific white-legged shrimp (Litopenaeus vannamei), a species originally native to the Pacific coast of Central America dominates the production—a monoculture of sorts–in the country. Between 2019 and 2021, the state of Andhra Pradesh alone accounted for 69% of the shrimp produced in the country, wherein 73% of this was attributed to the non-native white-legged shrimp (Koshy, 2021). While this intensive shrimp aquaculture is capable of generating huge profits, if not properly regulated, can come at a high cost to coastal ecologies and livelihoods. These farms received a lot of criticism for releasing untreated water into the adjoining waterways. This often leads to the spread of diseases to surrounding ponds and pollutes estuaries and nearshore coastal ecosystems. Coastal aquaculture has also driven the conversion of several important coastal ecosystems such as tidal mudflats, mangroves, salt pans, and agricultural ecosystems into aquaculture ponds.

An aquascape approach to managing the Bay of Bengal’s large marine ecosystem

Any management plan to sustainably manage blue foods and conserve other highly mobile aquatic species in the Bay of Bengal will require an approach that spans multiple aquatic ecosystems (from freshwater to estuarine and marine) and international borders—the aquascape. This will require a serious effort by individual states in the Bay of Bengal region to imaginatively look beyond protected areas and international boundaries. This will not only help better manage fisheries but will help strengthen conservation efforts of other flora, fauna, and habitats, while helping reduce pressure on species such as the Hilsa that depend on a continuum of aquatic habitats from marine to freshwater. Beyond inter-agency coordination within each country, this will require better transboundary cooperation to implement such plans.

As the demand for blue foods grows in the Bay of Bengal countries, emerging political powers will come under immense pressure to safeguard their dwindling fish stocks and protect their citizens’ interests with regard to growing protein and livelihoods needs. The mismanagement of these ecosystems could spark conflict as desperate fishers, in their struggle to stay profitable, violate international laws and agreements and cross-border transgressions increase, a pattern that is being observed in several parts of the world (Higgins-Bloom, 2018). Fishing transgressions and consequently arrests seem to have become a regular occurrence in the India-Bangladesh maritime space (Bose, 2021). Transgressions by Indian trawlers in Sri Lankan waters of the Palk Bay have long been the cause for diplomatic tensions. This is particularly significant as Sri Lanka is currently reeling under the effects of the worst economic crisis in its history, and fuel shortages have impacted patrolling efforts and have led to a consequent decline in the enforcement by their navy (Ramachandran, 2022).

Any recommendation or solution for a situation as complex as this will likely come with trade-offs. However, it is often the poorest and most marginalised communities that bear the brunt of such interventions, whether it is due to the setting up of a new Marine Protected Area (MPA) or fisheries management measures to enforce regulations against the capture and trade of contraband marine species such as sharks, sea horses, coral, sea cucumbers, etc. It is crucial that ocean equity and justice be made central to any plan and underrepresented communities, including small-scale fishers and indigenous groups, have a say in the planning process.

Managing a Bay without borders

An initiative that deserves a special mention when it comes to transboundary ecosystem management in this region is the Bay of Bengal Large Marine Ecosystem (BOBLME) project, a FAO/GEF-funded project that started in 2009 and is currently in its second phase of implementation. This project is a coordinated effort involving eight countries in the Bay of Bengal region viz., Maldives, India, Sri Lanka, Thailand, Indonesia, and Malaysia.

To its credit, the BOBLME project adopted a macro approach to manage the Bay. It employed an Ecosystem Approach to Fisheries Management (EAFM), an integrated approach that promotes the conservation and sustainable use of the ecosystem as a whole. This is of particular relevance in the context of tropical marine ecosystems that are characterised by a high diversity of species caught using a wide range of fishing craft and gear. One of the significant achievements of the project was the production of “a Transboundary Diagnostic Analysis (TDA) that identifies the major shared issues affecting the Bay of Bengal ecosystem” and it also “developed a Strategic Action Programme (SAP) that set out the actions needed to address these issues and their causes” (BOBLME, 2010).

There is also the Bay of Bengal Programme-Inter Governmental Organization (BOBP-IGO). This is a Regional Fisheries Advisory Body (RFAB) of the countries bordering the Bay of Bengal. It serves as “the think tank on transboundary and contemporary national issues of the member countries concerning fisheries management” (BOBP-IGO, n.d.).

30 by 30: Marine Protected Areas and other effective area-based conservation measures

The 30 by 30 target is a global initiative for governments to designate 30% of the world’s land and oceans under some form of protection by 2030.  It is one of the 21 action-oriented targets (specifically Target 3) of the Post-2020 Global Biodiversity Framework of the Convention on Biological Diversity (CBD). Most countries of the Bay of Bengal are now part of this initiative. In fact, this target to protect at least 30% of the oceans is based on scientific evidence as the minimum area required to safeguard biodiversity, reverse adverse ecological impacts while continuing to deliver ecosystem services including fisheries, climate regulation, and sustaining long-term ocean health (Woodley, Locke, Laffoley, MacKinnon, Sandwidth, & Smart, 2019).

Many countries in the Bay have taken proactive steps towards meeting this target. For example, the Government of Bangladesh has greatly augmented its MPA network, covering a total area of 7,367 km², approximately 8.8% of the EEZ of Bangladesh. In 2019, Bangladesh had also declared Nijhum Dwip as a MPA, covering an area of 3188 km². Interestingly, unlike most MPAs in South Asia that focus on conserving species and ecosystems with no-take areas prohibiting extractive activities, this MPA was created with the Hilsa as the focal species and was done to boost sustainable fisheries and livelihoods while protecting the marine biodiversity of Bangladesh. The inception and creation of this MPA was based on the research recommendations of three organisations viz., the World Fish Centre, the International Union for the Conservation of Nature (IUCN), and the Wildlife Conservation Society in Bangladesh, as well as extensive and sustained consultations with the local community.

However, simply increasing the area under MPA coverage will not necessarily guarantee effective marine conservation. To be effective this target requires a more nuanced view that recognise several other elements including ecological effectiveness, biodiversity, representation, connectivity, and ecosystem services (Spalding, Meliane, Bennett, Dearden, Patil, & Brumbaugh, 2016).

In the populous countries of the Bay of Bengal, declaring protected areas often comes at a massive social cost (Jalais, 2007). While the significance of MPAs is well understood, securing the access rights of poor coastal communities, particularly small-scale fisheries, to these marine spaces should be well embedded in the planning process.

The WTO agreement on ending harmful fisheries subsidies

 The basis of the agreement was to do away with harmful fisheries subsidies, which were responsible for contributing to overfishing globally. Subsidies, particularly fuel subsidies, often allow fisheries that have become unprofitable due to overfishing, to continue because they subsidise operational costs (in this case fuel). This exacerbates the crisis and can lead to a collapse of fish stocks, threatens the integrity of the marine ecosystem, and poses a threat to the livelihood sustainability of the region. The three focal areas/ pillars for prohibition include: (1) subsidies that support IUU fisheries; (2) subsidies in areas where stocks have been overfished; (3) subsidies that contribute to overcapacity and overfishing. Doing away with subsidies that promote unsustainable fisheries practice could be a step in the direction of a more sustainable transition. However, the withdrawal of these subsidies would require a nuanced approach, especially because livelihoods in the artisanal and small-scale fishing sector could be heavily impacted as a result.

Bolstering community adaptation to global change

Considering the impact on local communities, including displacement, any management/ conservation intervention in an MPA to draw up new fisheries regulations including the withdrawal of harmful fisheries subsidies can have a huge social cost that is often felt the most by the poorest and most marginalised sections.

Any new plan, whether it involves large-scale coastal/ ocean development, ports, or the implementation of new management/ conservation regulations, should also include strategies that are just and equitable and will enable local communities to adapt in a nature-positive way. However, context is key when it comes to implementing any such development intervention. Identifying and building on the capacity assets and innovations that exist in the region, rather than introducing models that are alien, are the most likely to yield the best results and be sustainable.

Restorative ocean farming for ecosystems and communities

Mentioned below are a few development interventions that hold great promise when it comes to safeguarding natural resources, while providing sustainable livelihoods to local communities. While aquaculture is the fastest-growing food producing sector in the world, the dominant intensive model can do with some significant changes that restore ecosystems, promote biodiversity, and improve the lives and livelihoods of poor coastal communities. New research shows that it is possible to produce high quality nutritious seafood while contributing to the recovery of ecosystems and biodiversity. Farming of species such as shellfish and seaweed with the right practices and places can help restore ocean health. Production of species such as these require near zero inputs in terms of feed, freshwater or land area, and results in minimum GHG emissions.

Seaweed mariculture is already showing promise in the region—in Cox’s Bazar in Bangladesh and the Palk Bay and Gulf of Mannar regions of India. The USAID funded ECOFISH II project being currently implemented by WorldFish (an international non-profit research institution), piloted a community-led seaweed culture project in Bangladesh. This project is showing good results in terms of providing livelihoods to fisher communities (especially women and youth), weaning them off declining fisheries and providing them with an important source of nutrition.

Another example of restorative ocean farming is silvo-aquaculture, a form of aquaculture where controlled mangrove growth is promoted in the pond. Versions of silvo-aquaculture exist in several parts of Asia and can be a great climate adaptation strategy while promoting biodiversity. These methods are often based on traditional technologies, they promote biodiversity, and the mangroves perform additional services in that they stabilise the coast and sequester carbon. However, these traditional technologies are not considered attractive as short-term returns can be low. Traditional coastal communities can be encouraged to take up such initiatives provided they are supported with capital, technology, and know-how. “Trap and Hold” is one such traditional silvo-aquaculture model practised in Myanmar, which was incentivised by the government through a performance-based compensation scheme in which Community Forest Groups were awarded a long-term lease if they restored abandoned aquaculture ponds using this approach. The abandoned ponds were previously intensive shrimp ponds, and in most cases were cleared of mangroves. The restored areas were incentivised to grow a polyculture of native species that included giant tiger prawns, mud crabs, and Asian sea bass. Through government and development aid funds, hatcheries were set up to incentivise farmers who undertook mangrove restorative activities by providing post-larvae of several species including mud crab and tiger shrimp to stock their ponds and avoid overharvesting from the wild.

We now have the necessary tools to identify and scale up good practices within a particular context. This would no doubt require appropriate resources in terms of funding. Identification of such restorative models that are context specific, along with appropriate capacity development interventions that build on the necessary skills of the community as well as government and non-governmental actors, can help develop sustainable pathways going forward.

References

Bay of Bengal Large Marine Ecosystem Project (BOBLME). 2010. Status of hilsa (Tenualosa ilisha) management in the Bay of Bengal. BOBLME-2010-Ecology-01. Retrieved from https://aquadocs.org/handle/1834/34003

Behera, S., Tripathy, B., Choudhury, B.C., & Kuppusamy, S. (2018). Movements of Olive Ridley Turtles (Lepidochelys olivacea) in the Bay of Bengal, India, determined via satellite telemetry. Chelonian Conservation and Biology, 17(1), 44–53. Retrieved from https://doi.org/10.2744/CCB-1245.1

Bhathal, B. & Pauly, D. (2008). ‘Fishing down marine food webs’ and spatial expansion of coastal fisheries in India, 1950–2000. Fisheries Research, 91(1), 26–34. Retrieved from https://doi.org/10.1016/j.fishres.2007.10.022

Bose, S. (2021). Finding solutions to fishermen transgressions in the India-Bangladesh maritime space. Observer Research Foundation. ORF Occasional Paper No. 331. Retrieved from https://www.orfonline.org/research/finding-solutions-to-fishermen-transgressions-in-the-india-bangladesh-maritime-space/

Chandarana, R., Manoharakrishnan, M., & Shanker, K. (2017) Long-term monitoring and community-based conservation of Olive Ridley turtles in Odisha. CMPA Technical Series No. 7. Indo-German Biodiversity Programme, GIZ-India, New Delhi. Retrieved from https://www.dakshin.org/wp-content/uploads/2018/11/Chandarana-Manoharakrishnan-Shanker_2017_Long-term-Monitoring-and-Community-based-Conservation-of-Olive-Ridley-Turtles-in-Odisha.pdf

Convention on Biological Diversity. (2021). First draft of the post-2020 global biodiversity framework. Retrieved from https://www.cbd.int/doc/c/abb5/591f/2e46096d3f0330b08ce87a45/wg2020-03-03-en.pdf

Dudhat, S., Pande, A., Nair, A., Mondal, I., Srinivasan, M., & Kuppusamy S. (2022). Spatio-temporal analysis identifies marine mammal stranding hotspots along the Indian coastline. Scientific Reports, 12(1), 4128. Retrieved from https://doi.org/10.1038/s41598-022-06156-0

FAO. (2022). The state of world fisheries and aquaculture 2022: Towards blue transformation. Retrieved from https://doi.org/10.4060/cc0461en

Fisheries Resources Survey System (FRSS). (2014). Fisheries Statistical Yearbook of Bangladesh: 2012–2013. Bangladesh: Department of Fisheries, 30:52. Retrieved from https://document.bdfish.org/2015/08/fisheries-statistical-yearbook-of-bangladesh-2012-2013/

Ghosh, A., & Lobo, A.S. (2017, January 31). Bay of Bengal: Depleted fish stocks and huge deadzone signal tipping point. The Guardian. Retrieved from https://www.theguardian.com/environment/2017/jan/31/bay-bengal-depleted-fish-stocks-pollution-climate-change-migration.

Higgins-Bloom, K. (2018). Food fight: Why the next big battle may not be fought over treasure or territory—but for fish. Foreign Policy, 230, 26–29. Retrieved from https://foreignpolicy.com/2018/09/12/food-fight-illegal-fishing-conflict/

Jalais, A. (2007). The Sundarbans. Whose World Heritage Site? Conservation and Society, 5(3), 335–342. Retrieved from https://www.jstor.org/stable/26392892#metadata_info_tab_contents

Koshy, N.E. (2021). A case for a human rights-based approach to Indian aquaculture systems. A literature review. Chennai, India: International Collective in Support of Fishworkers (ICSF) Trust, p. 74. Retrieved from https://www.icsf.net/wp-content/uploads/2022/05/930.ICSF219.pdf

Lobo, A.S., Balmford, A., Arthur, R., & Manica, A. (2010). Commercializing bycatch can push a fishery beyond economic extinction. Conservation Letters, 3(4), 277–285. Retrieved from https://conbio.onlinelibrary.wiley.com/doi/full/10.1111/j.1755-263X.2010.00117.x

Ramachandran, S. (2022). Rising tensions in Palk Bay over fishing rights. The Diplomat, 9 March. Retrieved from https://thediplomat.com/2022/03/rising-tensions-in-palk-bay-over-fishing-rights/

Spalding, M.D., Meliane, I., Bennett, N.J., Dearden, P., Patil, P.G., & Brumbaugh, R.D. (2016). Building towards the marine conservation end-game: Consolidating the role of MPAs in a future ocean. Aquatic Conservation: Marine and Freshwater Ecosystems, 26(S2), 185–199. Retrieved from https://doi.org/10.1002/aqc.2686

Woodley, S., Locke, H., Laffoley, D., MacKinnon, K. Sandwidth, T., & Smart, J. (2019). A review of evidence for area‐based conservation targets for the post-2020 global biodiversity framework. Parks, 25.2, 31–46. Retrieved from 10.2305/IUCN.CH.2019.PARKAS-25-2SW2.en

The post Lessons from the Hilsa: An Aquascape Approach to the Sustainable Management of Blue Foods and Threatened Aquatic Species in the Bay of Bengal first appeared on CSEP.

This policy brief discusses the complex emergency in the Bay of Bengal region and the deficits in regional governance. The complex emergency is a major humanitarian challenge posed by social, economic, and political turbulence, conflicts, violence, and atrocities. This challenge in the Bay of Bengal region emerges mainly from the crises in Myanmar related to the mass atrocities on the Rohingya people, and the violence against the opposition to the 2021 coup, producing mass displacement. States in the region neither perceived nor treated the complex emergency with great urgency. They prioritised their political and security agenda over human lives. The region also lacks comprehensive instruments and a regional governance framework to address the challenge. The situation demands greater ‘political connectivity’ among the countries in the region. The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) can serve in the driver’s seat in searching for short- and long-term solutions to the ongoing complex emergency. Relevant actors also need to rethink regional approaches and collective responses by adopting ‘flexible engagement’ and a ‘whole-of-government, whole-of-society’ approach.

Introduction: What is at stake?

The Bay of Bengal region is currently facing multiple crises, one of which has stemmed from a complex emergency, a multifaceted challenge caused by social, economic, and political turbulence, conflicts, violence, and atrocities. The situation is primarily tied to the ongoing crises in Myanmar, a country that has seen political violence and mass atrocities in recent years. These events have led to mass displacement of the population internally and their migration to other countries in the region. The two major groups in focus are the Rohingya from Myanmar’s southwestern coastal Rakhine state bordering Bangladesh, and those fleeing persecution by the State Administration Council (SAC), the country’s ruling junta, in the events following the 2021 coup. According to the United Nations High Commissioner for Refugees (UNHCR) estimates, as of June 2022, 1.1 million people from Myanmar have sought refuge in its neighbouring countries, mainly in Bangladesh, and more than half a million are internally displaced. These people have experienced human rights violations and atrocities in their country of origin, while in transit, and at the destination.

The persecution and violence against the Rohingya in Rakhine have taken place over several decades and in many forms, from arson and rape to mass killing. The more contemporary atrocities started during the time of General Ne Win’s administration between 1962 and 1988 when the Burmese state made the Rohingya stateless. The findings from the Independent International Fact-Finding Mission on Myanmar indicated that the Myanmar Armed Forces were the main perpetrators of the violence (Office of the United Nations High Commissioner for Human Rights, 2019). The United States Department of State (2022) recently declared mass atrocities on the Rohingya in 2016–17, which forced more than 750,000 of them to flee to escape ‘genocide,’ a crime punishable under international laws. The International Organization for Migration has reported that as of March 2022, more than 900,000 Rohingya had sought refuge in Cox’s Bazar, Bangladesh, with an urgent need for humanitarian support (IOM, 2022). Most displaced persons are dependent on aid as livelihood opportunities are drastically limited.

Many Rohingya took boats on the sea to seek a better future in other Southeast Asian nations, including Indonesia, Malaysia, and Thailand. Most of them were lured by people smugglers, and may have paid up to US$ 4,900 for the journey (UNHCR, 2021), with no guarantee that they would arrive at their intended destination. Many fell victim to human traffickers who sold them into forced labour and sexual exploitation. Some reached their destination but later experienced precarity and unemployment, and may have been arrested for illegal entry (Nungsari, Flanders, & Chuah, 2020). The Rohingya, therefore, were vulnerable to violence and destitution at all stages of their journey. UN Secretary-General, Antonio Guterres, referred to the Rohingya in a 2018 tweet as “one of the most discriminated against and vulnerable communities on Earth”, and called the Rohingya refugee crisis “a humanitarian and human rights nightmare” (Guterres, 2018).

The February 2021 coup in Myanmar unleashed another wave of violence and conflicts across the country. A broad swath of the population opposed the coup. They participated in the Civil Disobedience Movement (CDM) and/ or joined the People’s Defense Forces (PDFs). The Ethnic Armed Organisations (EAOs) reactivated their military capabilities and engaged in fights against the Myanmar Armed Forces. The events that followed the coup eventually triggered another mass movement of the forcibly displaced. Nearly 700,000 people were displaced internally, with more than 60,000 crossing international borders to seek refuge in Myanmar’s neighbouring countries, especially Thailand and India (UNHCR, 2022).

People on the move experienced similar asylum challenges regardless of their direction. At the border, Thai officials, for example, pushed some groups back into Myanmar or persuaded them to return after allowing them to seek refuge for a few days. Many who got into border towns such as Mae Sot in Thailand, had to pay bribes for ‘police cards’ to secure themselves from the threat of deportation (Tak Cops, 2022). Some spent considerable sums to obtain a valid official document, hoping to stay on legally in Thailand. However, several displaced persons were arrested and detained in the immigration detention centre pending deportation. The resettlement opportunity was extremely limited, with only exceptional cases getting expedited for movement into a third country (Jittiang, Sirijintana, & Wangpuchakane, 2022).

However, migration challenges faced by the forcibly displaced in the Bay of Bengal region are not a stand-alone crisis. They are connected and contribute to larger societal issues ranging from political instability to food insecurity. The number of forcibly displaced people inside and from Myanmar keeps growing in part because the situation is spiralling downward into what the Myanmar Study Group (2022) of the United States Institute of Peace (USIP) describes as ‘civil war.’ The military airstrikes in many parts of the country adversely affected agricultural production and crop yields, driving up food prices and making access to food more challenging. Many people eventually decided to leave in order to survive. In May 2022, the World Food Programme (2022) projected that by the end of the year, nearly four million people might need assistance, twice the number it is currently helping. As many displaced persons are on the move, they are also on the verge of poverty and marginalisation.

What are the challenges?

The complex emergency in the Bay of Bengal, especially the one that emerged from multiple crises in Myanmar, is currently neither perceived nor treated with a sense of urgency. Many states are in denial over its wide-ranging impact, and continue to prioritise their political and security agenda over human lives. Besides, the Bay of Bengal region lacks comprehensive instruments and political connectivity to address the challenge effectively.

National security vs. Human security and development

The outlook of states in the Bay of Bengal towards the complex emergency is currently problematic. The arrival of the forcibly displaced is often seen as a threat to national security; these people are perceived as being a financial and social burden on the host population (Moretti, 2022). The assistance by states is also seen as a pull factor for new arrivals. This view emerged during the Cold War when the region was plagued by mistrust, and the movement of the forcibly displaced could attract cross-border attacks and military operations, and has continued to exist even after the end of the Cold War.

This complex emergency in the region requires a different worldview. In fact, the ongoing situation is not simply a migration challenge but is connected to multiple complex issues, especially since the profiles and movements of displaced persons are heterogeneous. In Thailand, for example, Jittiang et al (2022) found that the new arrivals can be classified into three groups based on their movement patterns and intentions: temporarily displaced, economic migrants, and activists, intellectuals, and high-profile cases (HPCs). Each group poses challenges to the host government and demands a different management approach.

Therefore, implementing a one-size-fits-all national security solution for forcibly displaced groups may not be the appropriate response. Finding a remedy beyond the migration challenge is essential to addressing the intertwining problems, so as to incorporate the human security approach and development issues to balance the national security perspective. The new paradigm will offer a solution to the protection question, and find ways for the state to utilise the human capital of the forcibly displaced while safeguarding their national security interests. Some groups can be employed and be allowed to live with dignity, lessening the burden on the host government. The host state can also take this opportunity to foster closer people-to-people connectivity, which can be strategically significant for long-term international relations and cooperation, especially after the forcibly displaced are able to return to their country of origin.

Lack of comprehensive and effective regional instruments and governance

Another major challenge in addressing the complex emergency in the Bay of Bengal is the lack of comprehensive and effective regional instruments and governance, which emerge in part from the absence of new regional political initiatives and leadership. In the present decade, the geopolitical priority and agenda in the region are dominated and driven mainly by the major power rivalry, especially between China and the US, with the Belt and Road Initiative (BRI) and the Indo–Pacific Strategy. These larger conversations do not necessarily take into account issues specific to the region, because the interests of the major powers do not always align with those of regional governments.

In addition, the governments in the region steadfastly observe certain international principles, especially non-interference, and get involved in the polarisation caused by the major power rivalries. Hence, they are less flexible and unwilling to engage, not to mention cooperate, in issues of shared regional interest. As a result, the complex emergency has created a disproportionate burden for some governments who can only respond to the tip of the iceberg but cannot address the larger issues. This scenario is evident, for instance, in the desperation of the Government of Bangladesh, whose prime minister and other high-ranking officials have consistently called for more international attention, support, and assistance for more than one million Rohingya refugees.

Therefore, the Bay of Bengal region needs leadership from actors who can spearhead regional governments and other relevant stakeholders to address issues of common regional interest, such as the complex emergency. States in the region, in particular, need to recognise that taking a systematic and regional approach can mitigate short-term humanitarian challenges and help establish regional stability. Successful management of the complex emergency will allow member states in the Bay of Bengal to refocus on regional prosperity and socio-economic progress.

What needs to be done?

This policy brief proposes two major recommendations for the relevant stakeholders in the Bay of Bengal region. First, BIMSTEC, as the prevailing regional architecture, needs to serve as a bridge, a platform, and a key actor in the driver’s seat to resolve the complex emergency. The possibility of realising this goal depends on member states’ political will and connectivity. Second, countries in the Bay of Bengal region need to rethink the regional approach and collective responses by adopting ‘flexible engagement’ and a ‘whole-of-government, whole-of-society approach.’

 Centrality of BIMSTEC

Regional challenges demand regional solutions. BIMSTEC, as the critical regional organisation, needs to serve as the nerve centre—a bridge and a platform—from which conflicting and affected parties can engage in meaningful dialogues. This opportunity will allow BIMSTEC to move beyond its role in technical and economic cooperation to political and security partnership and engagement, which can be more substantive and fundamental to regional stability and prosperity. It will also enhance BIMSTEC’s recent emphasis on security cooperation, which has included counterterrorism and intelligence sharing but not the human security dimension. This role will enable BIMSTEC to establish regional order and manage regional dynamics that external powers may not prioritise. In other words, it is an invitation to BIMSTEC members to focus on their regional issues rather than deal with issues that interest external actors.

The commitment of India’s Prime Minister Narendra Modi to prioritise regional security within the BIMSTEC framework during the summit in March 2022 is an essential next step for the centrality of BIMSTEC to be crystallised. As one of the countries affected by the complex emergency unleashed by the crises in Myanmar, India can closely collaborate with Bangladesh and also Thailand, which is the chair country for 2022–23, to create a regional mechanism that serves as a focal point to cope with the challenge. The institution can be modelled after the ASEAN Coordinating Centre for Humanitarian Assistance on Disaster Management (AHA Centre), established as an intergovernmental organisation to coordinate and facilitate emergency response to disasters. This institutional arrangement will allow BIMSTEC to streamline initiatives and strategic actions now and in the future. With Thailand’s membership in both BIMSTEC and ASEAN, its government can help bring about synergy and collaboration between the two regional blocs to address complex emergencies, some of which, like the Rohingya migration, span both regions, thereby establishing cross-bloc connectivity.

 Rethinking regional approaches and collective responses

Rethinking regional approaches and collective responses is also significant. The Bay of Bengal states must recognise the limitations of non-interference and their adamant adherence to the national security agenda. The strong emphasis on both doctrines prevents states in the region from having a meaningful conversation on issues of shared interest, including the complex emergency. It also demobilises other actors, especially civil society organisations and business sectors, who can provide essential resources to support and advance regional initiatives. For this reason, new approaches need to be considered and adopted.

 Flexible engagement

One possibility is adopting the ‘flexible engagement’ approach, which Surin Pitsuwan, a former Thai Foreign Minister, proposed in the ASEAN context to engage with Myanmar. It emphasises openness and the possibility for other regional member countries to raise the stakes on issues of regional importance. Adopting this approach will allow states in the Bay of Bengal region to be more vocal on the socio-political issues affecting them, paving the way for their engagement in constructive dialogue and taking proactive actions towards troubled actors and relevant conflict parties. This approach will demand that states reduce their emphasis on the non-interference principle and national security priority, and commit more to collective regional actions and interests along the lines of the African Union and European Union.

 A whole-of-government, whole-of-society approach

The complex emergency will also require the engagement of all sectors across governments and societies. The issue is not one-dimensional, and each government will need to pull resources beyond its own agency and coordinate closely with the focal contact at the regional level. In some areas where government and regional mechanisms lack the resources, cooperation with civil society organisations and businesses can make a difference. For example, a chamber of commerce can navigate the local economic terrain to create employment opportunities for the forcibly displaced, and charity organisations can help raise funds to provide financial and in-kind assistance for people on the move as a short-term remedy. The whole-of-government, whole-of-society approach can also be used to engage other existing mechanisms of the United Nations bodies, especially UNHCR, and the European Union, such as the European Civil Protection and Humanitarian Aid Operations (ECHO), to streamline solutions and address complex emergencies.

 References

Guterres, A. [@antonioguterres]. (2018, July 2). The Rohingya are one of the most discriminated against and vulnerable communities on Earth. The Rohingya refugee crisis is a humanitarian and human rights nightmare. I thank Bangladesh for its generosity in hosting the refugees [Tweet] Twitter. https://twitter.com/antonioguterres/status/1013473938003947520?lang=en

International Organization for Migration. (2022). IOM Bangladesh appeal 2022: Rohingya humanitarian crisis. https://bangladesh.iom.int/resources/iom-bangladesh-appeal-2022-0

Jittiang, B., Sirijintana, W., & Wangpuchakane, T. (2022). Ad hoc and as usual: The Thai government’s responses to the Myanmar crisis since the 2021 coup. Brisbane: Asia-Pacific Centre for the Responsibility to Protect. https://r2pasiapacific.org/files/8231/2022_Thai_response_myanmar_crisis.pdf

Moretti, S. (2022). The protection of refugees in Southeast Asia: A legal fiction? London: Routledge.

Myanmar Study Group, United States Institute of Peace. (2022). Anatomy of the military coup and recommendations for U.S. Response. Washington, D.C.: United States Institute of Peace. https://www.usip.org/publications/2022/02/myanmar-study-group-final-report

Nungsari, M., Flanders, S., & Chuah, H.-Y. (2020). Poverty and precarious employment: The case of Rohingya refugee construction workers in Peninsular Malaysia. Humanities and Social Sciences Communications 7(120). Retrieved from https://doi.org/10.1057/s41599-020-00606-8

Office of the United Nations High Commissioner for Human Rights. (2019). Report of the independent international fact-finding mission on Myanmar (A/HRC/42/50). Retrieved from https://www.ohchr.org/sites/default/files/Documents/HRBodies/HRCouncil/FFM-Myanmar/20190916/A_HRC_42_CRP.5.docx

Tak cops hawk stay in country cards. (2022, April 9). Bangkok Post. Retrieved from https://www.bangkokpost.com/thailand/general/2292614/tak-cops-hawk-stay-in-country-cards.

The United Nations High Commissioner for Refugees. (2021). Left adrift at sea: Dangerous journeys of refugees across the Bay of Bengal and Andaman Sea. https://www.unhcr.org/asia/611e15284.pdf

The United Nations High Commissioner for Refugees. (2022). Myanmar emergency update (as of 1 June 2022). https://reliefweb.int/report/myanmar/myanmar-emergency-update-1-june-2022

United States Department of State. (2022). Genocide, crimes against humanity and ethnic cleansing of Rohingya in Burma. https://www.state.gov/Myanmar-genocide/

World Food Programme. (2022). Situation report – Myanmar. https://www.wfp.org/publications/situation-report-myanmar

The post Complex Emergency in the Bay of Bengal Region and the Regional Governance Deficits first appeared on CSEP.

The Bay of Bengal has become a hotbed of irregular human migration in recent years, with Rohingya refugee boats making their way south to safer sanctuaries in Southeast Asia. The illicit drug trade has flourished especially during the COVID-19 pandemic, with supplies originating from the Golden Triangle region using Southeast Asia as the transit point on the way to other regions. These developments highlight the need for greater maritime security cooperation between South Asian and Southeast Asian governments. Both these sub-regions within the broader Indo-Pacific region, have their own maritime security capacity shortfalls. While piracy and armed robbery targeting ships in the Malacca Strait, a key waterway astride the Bay of Bengal, is no longer as serious a threat as in the early 2000s, there is nevertheless a need for maritime security cooperation between South and Southeast Asia in the Bay of Bengal in areas of irregular human migration and illicit drug trade. Promoting better maritime domain awareness and information-sharing between these two regions would be a good start.

Maritime security threat

When discussing maritime security in the Bay of Bengal, one should not forget about the contiguous Andaman Sea. The interconnectedness between these two water bodies is more salient, from a policy perspective, than an artificial division via the Andaman and Nicobar Islands. Such interconnectedness makes it essential to treat the Bay of Bengal and the Andaman Sea as a single maritime geostrategic construct. Myriad security threats straddle this vast maritime domain, even though some of these challenges are confined mainly to the distinct water bodies. For example, the incidence of piracy and armed robbery in the Bay of Bengal and Andaman Sea is mainly in the immediate coastal waters of the littorals, such as the cases recorded close to Bangladeshi shores, mainly in the anchorages and, in particular, around Chittagong Port. However, as Table 1 shows, piracy and armed robbery against ships do not constitute a major issue in the Bay of Bengal and Andaman Sea. The author is, of course, mindful that available statistics indicate reported incidents, and that there could be cases that went unreported.

Table 1: Piracy and armed robbery against ships in the Bay and Bengal and Andaman Sea

Source: Piracy and armed robbery against ships in Asia: Annual report – January to December 2021, ReCAAP Information Sharing Centre, p. 11. Figure for Bangladesh in 2018 denotes 11 reported incidences, of which two were attempts and the remaining nine were actual attacks.

However, some other maritime security challenges do pose a more serious problem to the Bay of Bengal and Andaman Sea littorals. The Rohingya refugee problem was a severe one in 2015, leading to the ‘boat crisis’ that afflicted countries along the Andaman Sea coast, such as Indonesia and Malaysia. The Rohingya sea movements are one of the best examples to highlight the interconnectedness of the Bay of Bengal and Andaman Sea, and demonstrates how a security challenge emanating in a distinct maritime area can affect countries in a contiguous area. Amidst economic hardships during the height of the COVID-19 pandemic in 2020, there was a spike in the number of Rohingya who undertook the perilous southbound voyage compared to the previous years (see Figure 1).

To worsen the problem, these voyages also became fatal. As Table 2 shows, while the number of Rohingya making the risky seaborne dash saw an almost 100% increase from 2019 to 2020, there was a disproportionate explosion in the number of people killed or missing, from 4 to 209, over the same period. The situation was serious enough for the United Nations High Commissioner for Refugees (UNHCR), International Organization for Migration (IOM), and United Nations Office on Drugs and Crime (UNODC) to release a joint statement in May 2020 expressing deep concern that the “boat crisis” of 2015 might return. The statement calls on regional states to uphold the commitments of the 2016 Bali Declaration (Joint statement by UNHCR, IOM and UNODC on protection at sea in the Bay of Bengal and Andaman Sea, 2020). This declaration promulgated in the following year the Bali Process on People Smuggling, Trafficking in Persons and Related Transnational Crime, which sought to promote multilateral dialogue, awareness, information sharing, and cooperation on human trafficking, smuggling, and related crimes (Regional Treaties, Declarations and Related, 2016).

Table 2: Rohingya sea movement trends: 2018–June 2021
Source: Left adrift at sea: Dangerous journeys of refugees across the Bay of Bengal and Andaman Sea, United Nations High Commissioner for Refugees, January 2020 – June 2021, p. 10.

The other serious maritime security challenge in the Bay of Bengal and the Andaman Sea is the illegal drug trade. Available data on seizures and major trafficking cases reported in 2020 from countries in East and Southeast Asia point to “continuous large-scale manufacturing of methamphetamine in Shan state, Myanmar, situated in the three-country border area known as the Golden Triangle” (Global SMART Programme, 2021). Notwithstanding COVID-19, seaborne drug trafficking along the Andaman Sea and Malacca Strait to transport crystalline methamphetamine to Southeast Asian countries such as Indonesia and Malaysia, and further afield to countries such as Australia and Japan, gained importance in the same year. Kuala Lumpur reported that, since the beginning of the pandemic, stringent land border controls had resulted in increased use of sea routes, including from southern Thailand (SMART Programme, 2021). Besides traditional seaborne routes from Myanmar via the Andaman Sea, the UNODC also identified emerging routes from West Asia through the Bay of Bengal (see Figure 2). Transnational drug traffickers continue to use Indonesia’s Aceh province as their main entry point into the country to import drugs such as crystalline methamphetamine. According to Indonesia’s National Narcotics Agency Commissioner General Heru Winarko, “the drugs are smuggled into Aceh province from such countries as Thailand and Malaysia through the seas and alternative paths to be then distributed to various areas in Indonesia” (Harris & Nasution, 2020). Aceh was in a “state of emergency” over the drug scourge (Nasution, 2021).

 Figure 2: Crystalline methamphetamine trafficking flows in East and Southeast Asia 2020

Source: United Nations Office on Drugs and Crime, Synthetic drugs in East and Southeast Asia: Latest developments and challenges 2021, p. 13.

 Limits to Existing Measures

The Bay of Bengal and Andaman Sea littorals together, at least on paper, muster a sizeable pool of maritime forces that could have dealt with the extant maritime security threats. However, the development of capabilities has been “beset by funding constraints, competing strategic and domestic priorities, lack of interagency coordination, and insufficient assets and resources” (Benson, 2020, p. 74). The addition of assets in the last two years (see Table 3) to these countries’ maritime forces that are suitable for tackling such transnational security challenges as irregular human migration and drug trafficking chiefly came about from programmes that pre-dated the pandemic. And the count here does not take into account the geographical distribution of these maritime forces. For example, the entire holdings of Indonesia’s maritime assets have been represented here, and by no means does the country deploy all of them to the Andaman Sea coasts given other equally, if not more pressing, concerns elsewhere throughout the vast archipelago. Even though India musters the largest pool of assets in the region, it still has to address security concerns on its western seaboard.

Table 3: Maritime forces in the Bay of Bengal and Andaman Sea
Source: International Institute for Strategic Studies, Military Balance 2019, 2020, 2021, 2022 editions. Figures represented here are surface combat and patrol vessels that belong to both navies and civilian maritime law enforcement agencies, whereas only maritime surveillance/patrol aircraft from both military and civilian agencies are counted.

Compounding the capacity limitations in the foreseeable future is the present economic hardship faced by several countries. Even though regional countries have embarked on a gradual road to economic recovery starting from early 2021, current challenges—the Russia-Ukraine War and global supply chain disruptions—cast a pall of uncertainty over post-pandemic recovery and growth prospects. At the same time, external debts have continued to spike over the COVID-19 period (see Table 4) as regional governments took loans amidst reduced revenues to fund pandemic-related programmes. Sri Lanka, at the time of writing this paper, was arguably the hardest hit by the economic turmoil, especially its maturing debts and dwindling foreign exchange reserves. While not suffering the same fate as Colombo, the neighbouring countries in the Bay of Bengal and Andaman Sea are seen to be tightening their belts for fiscal prudence, devoting significant attention to public healthcare (given the emergence of new mutated strains, and social security.

 Table 4: External debt-to-gross national income of Bay of Bengal and Andaman Sea littorals 2018–2020 (%)
Source: Data compiled from International Debt Statistics 2022 (Washington D.C.: World Bank Group, 2021), augmented by national government statistics.

To augment their national capacities, the Bay of Bengal littorals actively participate in both multilateral and bilateral forms of military cooperation, which has “helped to generate mutual trust, enhance operational interoperability, and facilitate information-sharing across the region” (Benson, 2020, p. 72). India plays an outsized role in providing crucial maritime security public goods to the region, for instance training, intelligence-sharing, and other forms of maritime capacity-building support (Benson, 2020). The Bali Process, which arose from the Rohingya “boat crisis” in 2015, would have been an ideal arrangement to cope with the extant maritime security challenges in the Bay of Bengal and Andaman Sea, considering that all the resident littorals and some world powers such as the United States and China are signatories. However, the UNODC has determined that such mechanisms as the Bali Process—of which all Bay of Bengal littorals are members—“have failed to live up to their promise” (UNHCR, 2021, p. 1).

Broad multilateral mechanisms such as the Bali Process are hamstrung by familiar problems among regional countries, such as inequitable burden-sharing and lack of implementation. Notably, in the case of the regional response to the Rohingya boat-people phenomenon, as per the UNHCR (2021, p. 15), “there are to date no regional mechanisms to ensure equitable and predictable disembarkation of refugees and migrants in distress at sea, despite the maritime obligations of all states in the region” and the political commitments made by all signatories of the Bali Declaration. Bangladesh has borne the brunt of this challenge, with Foreign Minister Dr A.K. Abdul Momen lamenting that while Bangladesh was requested to provide shelter to the Rohingya on humanitarian grounds, other countries in the region were not asked to do the same (United News of Bangladesh, 2020). Malaysia did back Bangladesh by calling for proportionate responsibility-sharing, particularly among the signatories of the 1951 Refugee Convention, to receive more Rohingya refugees (Bernama, 2021). However, neither the Bay of Bengal states nor primary destination countries such as Malaysia and Indonesia are signatories to the 1951 Refugee Convention.

The way forward

The Bay of Bengal and the Andaman Sea constitute a singular maritime geostrategic construct, considering how the natural connectivity between these water bodies also brought about extant common security challenges at sea. Irregular human migration and illicit drug trade are among the most common security challenges faced by littorals sitting astride the Bay of Bengal and Andaman Sea. Faced with capacity shortfalls of maritime forces amidst economic challenges, regional governments envisage confronting practical challenges in “going alone” with tackling security threats. In any case, transnational threats mean national self-help alone has clear limitations. As discussed in this brief, while regional mechanisms such as the 2016 Bali Process exist, they are constrained by persistent problems among the participating nations, especially where it comes to burden-sharing and commitment to those initiatives.

If broad multilateral mechanisms such as the Bali Process have fallen short, it might be useful to consider smaller-scale, sub-regional initiatives. The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is a noteworthy example. Comprising seven littorals including Myanmar and Thailand as the Southeast Asian member states, BIMSTEC has in recent times engaged in maritime security-related cooperation. Notably, the inaugural meeting of BIMSTEC national security chiefs held in 2017 focused not only on counter-terrorism cooperation but also “emphasized the importance of maritime security in view of the significance of the Bay of Bengal for the well-being, prosperity, security and socio-economic development in the BIMSTEC Member States and decided to examine ways to further strengthen maritime security cooperation” (Ministry of External Affairs, 2017). However, BIMSTEC initiatives are yet to gain the support of all members; Thailand for example withdrew from the joint training exercises due to budgetary restrictions (Benson, 2020). Moreover, considering that maritime security challenges in the Bay of Bengal are not necessarily confined to the bay itself and can extend to the contiguous Andaman Sea, the absence of Indonesia and Malaysia from BIMSTEC appears odd. There is also a lack of institutionalised cooperation between BIMSTEC and these two Southeast Asian countries.

This policy brief proposes the following measures aimed at rectifying problems in the short and longer terms. In the short term, considering the ongoing economic challenges of post-pandemic recovery and inflationary pressures, regional governments are not likely to drastically increase maritime security capacities. However, while maritime forces capacity-building could be stymied by the overarching need for fiscal prudence, the Bay of Bengal and Andaman Sea countries can promote better coordination among national agencies, especially those dealing with not just maritime but land-based issues, given the obvious land-sea nexus of such security threats as drug trafficking.

Currently, regional maritime security agencies rely heavily on bilateral relationships to strengthen enforcement capabilities and maritime domain awareness (Benson, 2020). In the long term, the solution is not to create new mechanisms but to improve upon existing ones such as the Bali Process and BIMSTEC. Within the Bali Process, signatories should work towards a regional mechanism for predictable and equitable disembarkation of the Rohingya refugees (or other migrants) so that some governments do not have to bear the entire burden (UNHCR, 2021). In the long term, one should envision the future possibility of Indonesia and Malaysia getting BIMSTEC membership or observer status. Having more comprehensive coverage across the Bay of Bengal and the Andaman Sea littorals as an institutionalised mechanism may be helpful in ensuring more information and burden-sharing. Initiatives such as India’s Information Fusion Centre – Indian Ocean Region (IFC-IOR), which is modelled on the Singapore-based Information Fusion Centre and with which it maintains close institutional links, is a step towards this direction.

References:

Benson, J. (2020). Stable Seas: Bay of Bengal. One Earth Future. Retrieved from https://www.stableseas.org/post/stable-seas-bay-of-bengal.

Bernama. (2021, October 27). Malaysia called refugee convention signatories to receive more Rohingya refugees. New Strait Times. Retrieved from https://www.nst.com.my/news/nation/2021/10/740292/malaysia-calls-refugee-convention-signatories-receive-more-rohingya

Global SMART Programme. (2021). Synthetic drugs in East and Southeast Asia: Latest developments and challenges. Vienna: United Nations Office on Drugs and Crime (UNODC). Retrieved from https://www.unodc.org/roseap/uploads/documents/Publications/2021/Synthetic_Drugs_in_East_and_Southeast_Asia_2021.pdf

Harris SA, M. & Nasution, R. (2020, March 25). Aceh still main gateway for drug smuggling: police. Antara News. Retrieved from https://en.antaranews.com/news/144630/aceh-still-main-gateway-for-drug-smuggling-police.

Joint Statement by UNHCR, IOM and UNODC on Protection at Sea in the Bay of Bengal and Andaman Sea [Press Release]. (2020, May 5). UNHCR. Retrieved from https://www.unhcr.org/news/press/2020/5/5eb15b804/joint-statement-unhcr-iom-unodc-protection-sea-bay-bengal-andaman-sea.html.

Ministry of External Affairs. (2017, March 21). First meeting of the BIMSTEC national security chiefs [Press Release]. Retrieved from https://mea.gov.in/press-releases.htm?dtl/28193/First_meeting_of_the_BIMSTEC_National_Security_Chiefs_March_21_2017.

Nasution, R. (2021, April 8). Aceh in the grip of growing drug problem. Antara News. Retrieved from https://en.antaranews.com/news/172034/aceh-in-the-grip-of-growing-drug-problem.

Regional Treaties, Declarations and Related. (2016, March 23). Bali Declaration on People Smuggling, Trafficking in Persons, and Related Transnational Crime. Retrieved from https://www.refworld.org/docid/5799ef3c4.html

United Nations High Commissioner for Refugees (UNHCR). (2021). Left adrift at sea: Dangerous journeys of refugees across the Bay of Bengal and Andaman Sea January 2020 – June 2021. UNHCR Asia Pacific. Retrieved from https://www.unhcr.org/asia/publications/operations/611e15284/left-adrift-at-sea-dangerous-journeys-of-refugees-across-the-bay-of-bengal.html.

United News of Bangladesh. (2020, April 28). Other nations also have responsibility to shelter Rohingyas floating at Bay: FM. United News of Bangladesh. Retrieved from https://unb.com.bd/m/category/Bangladesh/other-nations-also-have-responsibility-to-shelter-rohingyas-floating-at-bay-fm/50701.

The post Promoting Maritime Security in the Bay of Bengal and Andaman Sea first appeared on CSEP.

Existing free trade agreements (FTAs) among countries in the Bay of Bengal region have failed to effectively address non-tariff barriers (NTBs) to trade, take initiatives to expand existing FTAs, or negotiate new regional agreements. Addressing shortcomings in NTBs is vital to improving trade connectivity in the region. One important NTB that stifles trade is the time and cost taken to demonstrate compliance with importing country standards. This policy paper proposes a solution to this problem that can be implemented outside the ambit of FTAs. It takes the example of the challenges faced by food exporters of Sri Lanka to India by highlighting the time-consuming and complex standards compliance procedures at the point of entry to India. This arises out of India’s reluctance to recognise testing and certification conducted outside its borders. The proposed solution is a Mutual Recognition Agreement (MRA) which enables mutual recognition of conformity assessment procedures carried out between recognised institutions in the two countries, and can be easily implemented. An MRA will allow Indian agencies to accept test reports and certifications issued by Sri Lankan agencies, reducing the unnecessary delays and costs incurred in demonstrating compliance with Indian standards, and thereby boost trade between the two countries. This policy brief is prepared based on the research report compiled by Verité Research tilted “Improving Trade with India, Mutual Recognition in Conformity Assessment.”

Introduction

Entering into free trade agreements (FTAs) is a key strategy followed by governments to reduce trade barriers faced by their exporters in partner countries. However, lowering of tariff barriers is not sufficient to guarantee market access. In addition to tariff barriers, exporters face a vast array of non-tariff barriers (NTBs) in the form of rules, regulations, and procedures at the borders of the importing country that increase the cost and time of trading. Failure to effectively address such NTBs prevents exporters from making maximum use of the market access created by the removal of tariff barriers. Lack of strong provisions to tackle NTBs is a key limitation in most existing FTAs among countries in the Bay of Bengal region. This is particularly true of FTAs signed by Sri Lanka with its South Asian neighbours such as Pakistan and India. The agreements exclusively focus on phasing out of tariffs but have no provisions to address NTBs. The new initiatives taken by the countries in the region, including Sri Lanka, to expand/strengthen the existing trade agreements (e.g., the Comprehensive Economic Partnership Agreement (CEPA) between India and Sri Lanka) or to negotiate new agreements (e.g., the Bay of Bengal Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) FTA) have made little progress.

This policy brief focuses on an important NTB that stifles trade within the region and offers a simple and practical solution the countries could pursue to overcome it. The NTB in focus is unduly restrictive procedures to demonstrate compliance with the importing country’s product standards, also known as conformity assessment procedures (CAPs) (Appleton, 2013). All countries have the right to maintain product standards to achieve legitimate public policy objectives of protecting consumers, the environment, and plant and animal life. Exporters also have a responsibility to ensure that the products exported comply with the importing country’s standards. While the right to implement CAPs is recognised globally, it is also acknowledged that CAPs should not be a hindrance to trade by increasing the time and cost of trading (World Trade Organisation, 1995).

To demonstrate the existence and impact of CAPs, this policy brief discusses the experience of processed food exporters from Sri Lanka to India. It serves as a useful case study to understand how, despite duty-free access, standards and regulations can unduly restrict trade, and how exclusively focusing on removing tariff barriers is not sufficient to guarantee market access. The brief also shows how mutual recognition in conformity assessment can be a simple and a practical solution that can be adopted by countries in the Bay of Bengal region faced with such NTBs, without the need for lengthy FTA negotiations.

Background 

In 1998, the India-Sri Lanka Free Trade Agreement (ISFTA) was signed to strengthen trade relations between the two countries. The ISFTA came into effect in 2000.

The agreement eliminated tariffs for 4,227 Indian products and 2,802 Sri Lankan products (Institute of Policy Studies, 2017). The product list of India included mostly the fresh and processed foods exported from Sri Lanka to India. The FTA allowed for Sri Lankan food exporters to enter the large and fast-growing Indian market located in close geographical proximity. At the time, no other country had similar duty-free access to the Indian market for food products. Hence, Sri Lanka had a significant competitive advantage over other countries in exporting processed food to India. The Most Favoured Nation (MFN) tariffs imposed by India at the time on processed food imports tended to be prohibitively high. The average tariff rate was over 30%, and tariffs for some products (e.g., processed meat) went up by 100% and 150%. However, the processed food exporters failed to reap the full benefits of this market opportunity due to numerous NTBs that prevented them from entering the Indian market despite having duty-free access. One key NTB faced by food exporters was the time and cost of adhering to CAPs related to Indian product standards. The problem of NTBs could not be addressed within the FTA framework, as it lacked any provisions to do so.

Challenges for India-Sri Lanka CAPs

To understand why processed food exporters struggled, Verité Research conducted a study of processed food trade between Sri Lanka and India in 2015 (Verité Research, 2015). The study employed a desk-based review of public documents including trade agreements, government publications, and statistics pertaining to trade between India and Sri Lanka as well as key-person interviews with food exporters, standards issuing and testing bodies, and government officials and policy practitioners. The study revealed that the cost and time taken to comply with Indian standards and regulations at the point of entry was the biggest obstacle faced by exporters. The main reason for this, according to the exporters, was the unwillingness of Indian authorities to accept compliance certificates issued by laboratories located outside India for most food products. As a result, even if Sri Lankan exporters obtain certification stating compliance with Indian regulations and standards prior to export, the products were tested again by Indian authorities upon arrival at the Indian port. CAPs at the point of import in India acted as an obstacle to trade due to the following reasons.

1. Delays: Depending on the port, the time taken to obtain and issue laboratory test reports varied from 20-30 days and an overall 30-40 days to release goods from customs. Fresh produce such as fruit was held up for up to 5 days while processed foods like cordials, sauces, and jams for up to 3 months. These delays significantly shortened the shelf life and quality of the products, and at times made them unfit for consumption at the time of release from the port. The problem was exacerbated by another rule that required the product to have a shelf life of more than six months at the time of clearance. If not, the goods were not permitted entry by the Directorate General of Foreign Trade (DGFT) in India. Thus, the longer the products were held, the higher the risk exporters faced of not being able to sell their products in the Indian market.
2. Costs: As a result of shipments being held at the port due to delays in issuing test reports by the authorities, the exporters have to bear demurrage and storage costs. This is in addition to paying the cost of testing, which was significant for small and medium exporters who shipped smaller quantities.
3. Uncertainty: The delay in obtaining test reports and the time taken to clear cargo varied by shipment and by port, causing difficulties for exporters in coordinating marketing and distribution plans with buyers. Since the date of release was unknown, obtaining necessary retail shelf space, warehouse storage, etc. was made more complicated for both Indian importers and exporters who were forced to adopt a ‘wait and see’ approach. If delays and costs are known and consistent, exporters can account for these and plan accordingly. However, inconsistency and the resulting uncertainty made it challenging for Sri Lankan exporters to retain buyers and continue to export.

Policy Options

Compliance-related costs and delays that result at the point of import were not the only problems faced by food exporters, nor were they unique only to trade between India and Sri Lanka. This is a common CAPs-related barrier to trade faced by many countries and exporters around the world. Much groundwork had already been done across countries in terms of mechanisms to overcome this barrier. Broadly, the study by Verité Research identified four approaches that can address the issue of compliance related NTBs:

1. Harmonisation of Standards: The adoption of common or identical standards and regulations by a group of countries can, in principle, be an effective way to reduce duplication of compliance costs, of having to comply with varying sets of standards in different types of exports, and can make international markets more efficient and competitive by reducing transaction costs and improving transparency. However, in practice, it has proven to be a difficult and time-consuming goal to achieve due to lengthy negotiations between countries with different standards, the cost of adjustment, and the restrictions it places on the ability of the countries to choose standards that are more appropriate based on their context.
2. Equivalency Agreements: In effect, equivalence allows two different standards to serve as alternatives to each other by allowing countries to maintain differing standards or regulatory procedures for a product parameter but treat them as equal since both standards are implemented to achieve the same objective. While potentially a powerful tool, this system is likely to be more feasible where regulatory differences among jurisdictions are minimal and do not implicate highly sensitive issues.
3. Accreditation of Foreign Manufacturer: This refers to the foreign manufacturer directly obtaining accreditation from the national standards body of the importing country. This requires individual exporters to bear the cost of facilitating checks by the national standards body of the importing country. This system of certification, however, will only assist a few large-scale businesses in a country that can afford this certification.
4. Mutual Recognition of Conformity Assessment Procedures (CAPs): Partner countries mutually agree to recognise the competency and capacity of each other’s Conformity Assessment Bodies (CABs) to assess conformity of products with the importing country’s national standards and regulations. MRA on CAPs require partner countries to work with each other to assess capacity to conduct the testing and certification to ensure compliance certificates issued by the exporting country standards bodies/ laboratories are acceptable to the importing country.

The benefits of an MRA on CAPs compared to the previously discussed solutions is that it allows countries to keep their own standards, and hence can be implemented fairly quickly compared to harmonisation of standards. It can be implemented even between countries with significant differences in standards, and it prevents exporters from having to obtain recognition on an individual basis at a higher cost. It achieves the same outcome expected from other types of arrangements, i.e., reduced time and costs of trading by preventing the products from being retested at the border of the importing country.

In the case of Sri Lankan food exports to India, the proposal on the table at the time Verité Research did this study (2015) was to tackle this problem within the proposed Comprehensive Economic Partnership Agreement (CEPA) between the two countries. There was also a proposal on the table on harmonisation of standards between the two countries. However, the study conducted by Verité Research identified an MRA in CAPs as a far better and a more feasible solution compared to what had been proposed. CEPA negotiations commenced as far back as in 2005 but faced many hurdles, and there is still no end or completion of negotiations in sight. Harmonisation is likely to take a long time, given the differences in standards between the two countries. In contrast, MRA on CAPs is a better option because (i) it allows each country to maintain its own standards within its borders; (ii) benefits both small and large exporters alike; and (iii) it is easier to implement because it focuses on a single issue and can even be implemented at an institutional level. Further, MRA on CAPs is unlikely to attract opposition from the public or domestic industry compared to, for example, negotiating and concluding CEPA, which covers multiple sensitive sectors and issues.

It is heartening to note that this proposal has received the attention of policymakers. The Export Development Board (EDB) of Sri Lanka initiated discussions in 2018 with the Food Safety and Standards Authority of India (FSSAI). EDB submitted the names of five local state-owned and private sector labs for the approval of the Indian food standards regulator to allow these labs to issue certificates which would not be rejected in India, viz., the laboratories at Registrar of Pesticides (ROP), Industrial Technology Institute (ITI), Tea Board, SGS Lanka Ltd., and Bureau Veritas. At the time, FSSAI had not registered any laboratory outside India (Export Development Board of Sri Lanka, 2018). An audit team comprising officials from FSSAI, the National Accreditation Board for Testing and Calibration Laboratories (NABL), and Export Inspection Council (EIC) to audit these laboratories arrived in Sri Lanka. Following the audit, FSSAI recognised three labs to test processed food exports to India: ITI, SGS Lanka Ltd, and Bureau Veritas (FSSAI, 2018). Thereafter, the FSSAI put forward new policies for the recognition and accreditation of food testing laboratories located outside India (FSSAI, n.d.).

Wider implications for improved trade connectivity in the Bay of Bengal

Unlike FTAs, which cover many sectors, products, and issues requiring lengthy negotiations, MRAs on CAPs can be implemented relatively quickly to improve trade connectivity by reducing standard compliance-related NTBs faced by traders. In fact, an agreement is required only for the national standards body in the importing country, in this case FSSAI, which accepts certificates of conformity issued by recognised, competent, and accredited CABs in the exporting country (i.e., food testing laboratories in Sri Lanka), confirming that the product meets with the importing country’s standards and regulations. Since conformity is assessed and confirmed at the point of export, exporters do not have to go through the hassle of proving compliance at the border of the importing country. Another advantage of the MRA approach is it can fast-track priority export products before being gradually extended to other products as local laboratories expand their capacities to certify for importing-country standards.

Given the pace of trade negotiations among the countries in the region, the MRA approach presented in this case study can be a quick and effective way of dealing with compliance-related NTBs, especially given the lack of standards and regulations for common products. It is especially relevant for neighbouring countries seeking to boost their exports in a large and fast-growing Indian market. In fact, several countries, especially in the ASEAN region, have included MRAs in their trade negotiations and agreements with India in recent years, such as Singapore, Malaysia and Korea, among many others (Department of Commerce, 2005; 2011 and; 2009)

References

Appleton, A.E. (2013). Conformity assessment procedures. In T. Epps and M.J. Trebilcock (Eds.). In Research Handbook on the WTO and Technical Barriers to Trade (pp. 81-119). Gloucestershire, The UK: Edward Elgar Publishing.

Department of Commerce.  (2009). Comprehensive Economic Partnership Agreement between India and Korea. New Delhi: Ministry of Commerce and Industry. Retrieved from https://commerce.gov.in/wp-content/uploads/2020/05/INDIA-KOREA-CEPA-2009.pdf.

Department of Commerce. (2005). Comprehensive Economic Cooperation Agreement between The Republic of India and the Republic of Singapore – Chapter 5. New Delhi: Ministry of Commerce and Industry. Retrieved from https://commerce.gov.in/wp-content/uploads/2020/05/ch5.pdf.

Department of Commerce. (2011). India Malaysia CECA. New Delhi: Ministry of Commerce and Industry. Retrieved from https://commerce.gov.in/wp-content/uploads/2020/12/Chapter-07-TBT.pdf.

Export Development Board of Sri Lanka. (2018, May 21). Food Safety and Standards Authority India to recognise Sri Lankan Food Labs. Sri Lanka Business. Retrieved from https://www.srilankabusiness.com/news/food-safety-and-standard-authority-india-to-recognise-sri-lankan-food-labs.html.

Food Safety and Standards Authority of India. (2018, July 13). Three Sri Lankan Labs Obtain FSSAI Authorisation for F&B Certification. Retrieved from https://fssai.gov.in/upload/media/5b4dc1d54957dFSSAI_News_Srilanka_Labs_Hospitality_14_07_2018.pdf.

Food Safety and Standards Authority of India. (n.d.). Policy for Recognition/Accreditation of Food Testing Laboratories located abroad. Retrieved from https://fssai.gov.in/upload/uploadfiles/files/Policy-ForeignLabs.pdf.

Institute of Policy Studies. (2017). Handbook on India Sri Lanka Free Trade Agreement. Colombo, Sri Lanka: Institute of Policy Studies and High Commission India. Retrieved from https://www.ips.lk/wp-content/uploads/2017/01/HB-India-SL-FTA-final.pdf

Verité Research. (2015). Improving Trade with India: Mutual Recognition in Conformity Assessment. Position Paper.Retrieved from https://www.veriteresearch.org/wp-content/uploads/2018/05/Improving-trade-with-India-1.pdf

World Trade Organisation. (1995). Agreement on Technical Barriers to Trade. Retrieved from https://www.wto.org/english/docs_e/legal_e/17-tbt_e.htm#articleVI

The post Improving Trade Connectivity Through Mutual Recognition Agreements in Standards: A case study of processed food exports from Sri Lanka to India first appeared on CSEP.

Despite numerous examples to illustrate that dominating the maritime sector is a significant contributor to regional economic growth, the Bay of Bengal region, with its strong geographical advantages, did not explore its full potential in the maritime sector. This region lies strategically halfway along the East-West trade lane, and connects India, a major economy, to the rest of the world. However, the maritime logistics facilities, including seaports, in this region focus on intra-region competition rather than exploring a win-win solution through regional cooperation to develop synergetic power to outperform competitors outside the region. Besides the major ports located in Sri Lanka, India, and Bangladesh, ports in Singapore and Malaysia too, play a vital role in serving the Bay of Bengal region, creating overlapping market coverage. Owing to geographical characteristics, hub and spoke networks dominate in the Bay of Bengal region, allowing major ports such as Colombo and Singapore to be promoted as transshipment hubs. Despite the deviation distance and infrastructure limitations, Indian ports attract some transshipment cargo from Indian feeder ports. However, high network connectivity, together with a strong cargo base, is essential to sustain a transshipment hub in a competitive market. The intense competition among ports in this region discourages the concentration of maritime networks and transshipment cargo at a single port, thereby decreasing competitiveness of the region.

While focusing on the transshipment hubs in the Bay of Bengal region, this policy brief addresses the connectivity and cooperation deficit in the maritime sector, and the associated untapped potential that hinders regional development. Best-case scenarios for regional development are presented and analysed. Policy recommendations are provided as actionable steps for realising goals, while also addressing issues concerning stakeholders, and resource constraints.

 Introduction

As the most economical mode of transportation for international freight distribution, maritime shipping contributes significantly to economic growth, especially in regions that have geographical advantages. The Bay of Bengal region is strategically located halfway along the East-West trade lane. Despite this, the countries in the region have not been able to leverage the full potential of their location. One of the reasons for this is the infrastructural limitation at the hub and feeder ports in the region.

The hub and spoke configuration of maritime networks optimises transport cost by linking the large mainline vessels and small feeder vessels between the origin and destination ports. This model helps to overcome the infrastructure constraints associated with some ports in the region. In the Bay of Bengal region, for instance, the hub and spoke networks are centred on the Port of Colombo, as illustrated in Figure 1, which helps in overcoming the infrastructure limitations at Indian feeder ports, such a draft, terminal handling capacity etc. Other than Hub and Spoke networks, the relay networks improve voyage cost by integrating multiple mainline services. A transshipment hub port is vital in both networks to facilitate an economic space for cargo handling activities.

Figure 1. Hub and spoke networks centred on the Port of Colombo

Source: Developed by the author

Considering their contribution to regional economic growth, the key players such as port authorities, terminal operators, logistics service providers, among others in the Bay of Bengal region should embrace new strategies to enhance the entire port-based value chain. However, due to intense market competition and conflicting objectives, the interactions among these players have become complicated. For example, in India and Sri Lanka, different parties operate the ports, and they focus on maximising port-level profit rather than developing a common framework for the economic well-being of the countries and the region (Kavirathna, Hanaoka & Kawasaki, 2022). Although the cost-driven approaches of shipping lines such as strategic alliances, vessel size enlargement, limiting ports of call, and hub hopping encourage port operators to balance their competitive interactions, they still focus on enforcing competitive power over each other.

The Hub and Feeder Ports in the Bay of Bengal Region

In the Bay of Bengal region, the Port of Colombo is a significant transshipment hub serving the South Asian and a part of the African feeder markets, with transshipment cargo comprising over 75% of the share in port throughput. Colombo serves the Indian sub-continent feeder market because many major shipping services do not call directly at Indian ports due to the latter’s infrastructure limitations in accommodating larger vessels, and the greater deviation from the trunk sea route required to access these ports. However, India has made a significant effort in the last decade to develop port infrastructure, enabling Indian ports to accommodate larger vessels. Due to these developments and the growth in captive cargo volume, mainline services have commenced direct calling at Indian major ports, degrading the transshipment volume at Colombo. As stated by Kawasaki, Tagawa, and Kavirathna (2022), the Colombo and Nhava Sheva ports receive 30 and 16 vessel calls respectively from East Asian services per week, and both ports receive 10 vessel calls from European services per week in 2018.  Therefore, Nhava Sheva has only 2.1% transshipment rate at Colombo. However, the V. O. Chidambaranar Port (also known as Tuticorin port) in Tamil Nadu, India, does not receive vessel calls from European and East Asian direct services, and hence has a 73.5% transshipment rate at Colombo. The authors have highlighted that even relatively smaller Indian ports in the Bay of Bengal such as Tuticorin, Krishnapatnam, and Visakhapatnam would obtain direct routes to Europe and East Asia if high Indian cargo demand and port expansions support potential de-hubbing.

Although the competition between Colombo and Indian major ports is highlighted, a hub port competition can extend beyond regional boundaries. With multiple hub ports possibly serving the same feeder market, the Bay of Bengal region experiences cross-regional hub port competition. Therefore, ports in Singapore and Malaysia also play a vital role in serving the Bay of Bengal region, creating overlapping market coverage for South Asian and Southeast Asian hub ports. Hence, Colombo and Indian major ports experience competition from neighbouring hub ports such as Singapore, Kelang, and Tanjung Pelepas. An analysis of shipping services between the Indian feeder ports and these cross-regional hub ports indicates that except for Tuticorin and Cochin ports in South India, most other feeder ports have a high service frequency with Southeast Asian hub ports (Kavirathna et al., 2018a). Figure 2 shows the total annual frequencies and slot capacities of services connecting Indian East, South, and West-coast feeder markets and four competitive hub ports, indicating strong competition among hub ports in serving these feeder markets. According to the Lloyd’s List Intelligence (2020) port ranking, Colombo is ranked below the Southeast Asian hub ports, and Indian ports have even lower rankings. Although Colombo or Indian major ports do not have a significant role in relay networks, other neighbouring hub ports such as Singapore, Tanjung Pelepas, etc. would also take relay transshipments due to their high network connectivity. Despite these challenges from cross-regional hub ports, the South Asian ports compete rather than explore a win-win solution through regional cooperation to develop a synergetic power to out-perform competitors from other regions.

Figure 2. Annual frequency and slot capacity of services connecting hub ports and feeder markets.

Source: Made by the author based on Data collected from MDS Transmodal Inc.

Note: Colombo, Singapore, Kelang, Tanjung  and Pelepas are abbreviated as CMB, SIG, PKG, TPP respectively.

To exploit the advantages of the Bay of Bengal region, its maritime logistics facilities must be utilised most effectively. Shipping lines prefer a minimum voyage cost when optimising a hub and spoke network. Thus, the maximum usage of hub ports in this region would enable shipping lines to reduce feeder costs because these regional hub ports are located closer to the feeder market, as illustrated in Figure 3, where Colombo has significantly shorter distances with all feeder ports than the Southeast Asian hub ports. However, high network connectivity and a strong cargo base are essential for a transshipment hub to attract shipping lines. The intense competition among regional ports discourages the concentration of maritime networks at a single port, thereby decreasing the region’s competitiveness. Thus, the proximity of Colombo or Indian major ports to the South Asian feeder market with a potential of saving voyage costs does not guarantee high transshipment volumes. This is because shipping lines would consider multiple factors beyond the transport cost when selecting a transshipment hub, as illustrated in Table 1 which shows the higher performance of Singapore in numerous hub port selection criteria. As a result, import and export cargo of South Asia would be transported via maritime networks with high voyage costs, degrading their competitiveness in the world commodity market. Moreover, reducing vessel calls at regional ports diminishes the additional income generated from bunkering and other ancillary services. Hence, the cooperation deficits in this region have roots in the untapped potential that hinder regional development. The vulnerability of the transshipment market creates adverse impacts for the entire region.

Figure 3. Feeder link distance between competitive hub ports and feeder ports in the Bay of Bengal

Source: Voyage Planner, Marine Traffic (www.marinetraffic.com)

Table 1. Performance of competitive hub ports concerning hub port selection criteria

Source: Kavirathna et al. (2018)

Note: Colombo, Singapore, Kelang, Tanjung  and Pelepas are abbreviated as CMB, SIG, PKG, TPP respectively.

Maintaining Buoyancy Between Competition and Cooperation

Strategically, an ideal way to address the cooperation deficits in the Bay of Bengal region would be to have an appropriate balance between the extreme ends of competition and cooperation among market players. Such a balanced approach derives strategic implications for players in the same market to create win-win outcomes rather than fostering traditional win-loss outcomes. If this strategy is applied to the ports in the Bay of Bengal region, they would cooperate with each other to create a bigger business opportunity for the entire region while also competing to absorb a large portion of this expanded business opportunity. Since this policy encourages simultaneous competition and cooperation among regional ports, it is essential to identify the areas where they should cooperate or compete with each other. For example, if the regional ports have an extreme price competition, and each port tries to attract more shipping lines by lowering the port charges than their competitors, this unhealthy competition will eventually result in a discounted average port charge for the entire region, and shipping lines would benefit from a high bargaining power. However, port operators and investors will not benefit from a discounted port charge, and the attractiveness of the entire region would be adversely affected. Also, extreme competition encourages port operators to focus on individual profits leaving fewer avenues for sharing resources and competencies to reduce negative externalities. Conversely, if ports have an extreme level of cooperation, the market would have a monopolistic high price, which would eventually reduce its attractiveness for the shipping lines. Moreover, extreme cooperation discourages port operators from innovation, specialisation, and enhancing operational efficiencies. Thus, an appropriate balance between competition and cooperation will enable win-win outcomes for the entire region.

Value creation and value capture are the fundamental concepts for drawing up policy objectives. Value creation addresses the common benefit of cooperation among ports in the region such that all ports would benefit from it. For example, value creation efforts can be devoted to enhancing the region’s competitiveness by drawing up regional tariff and rebate policies, developing the regional export sector, and creating joint marketing campaigns for shipping lines. With that, the Bay of Bengal maritime market can be expanded with more business opportunities enhancing regional economic growth. On the other hand, value capture is the individual effort made by each port to enhance its competitiveness. Therefore, while maintaining regional cooperation for value creation of the entire region, each port makes an effort at value-capturing to perceive more individual benefits from expanded business opportunities in the region. The next section emphasizes on several policy objectives to address the cooperation deficits among ports in order to exploit the untapped potential in this region, considering the short, medium, and long-term perspectives.

In the short-term, regional ports should cooperate on addressing existing market challenges such as shipping line alliances and hub-hopping, among others. As for value capturing, each port should make an effective port marketing effort which is currently lacking in this region. As discussed by Notteboom, Pallis, and Rodrigue (2022), a survey carried out in Europe revealed that 81% of port authorities lead their port marketing activities, and a survey of 70 cruise ports in the Mediterranean Sea indicates that 71.4% of port authorities lead their port marketing activities. Accordingly, their port marketing strategies deal with a network of stakeholders, including three main categories: business-related stakeholders (e.g., shipping lines, terminal operators, logistics companies), societal groups and local communities, and institutional stakeholders focusing on policy and legislative interventions. Moreover, port operators can cooperate to share underutilised port infrastructure and reduce port congestion. Port performance should also be enhanced considering qualitative aspects because shipping lines consider numerous factors for hub port selection. While attracting transshipment cargo, ports should cooperate on generating additional revenue from ancillary services and common user facilities.

The captive cargo volume can be increased in the medium term by developing regional imports and exports. Moreover, regional ports should consider optimising maritime networks to secure the most economical network configuration for international trade. Hence, the competitiveness of import and export cargo in the world commodity market should be enhanced by lowering transport costs. Since hub port competition is affected by shipping lines, port authorities, terminal operators, and other logistics service providers, an effective integration among them should be one of the medium-term objectives.

In the long term, it is essential to have an effective functional allotment for regional ports and clarify the transshipment hub status. The regional port operators should get together to discuss the directions for port development with a long-term master plan. Port customers should get the best possible deals with service providers without jeopardising their possibilities of enhancing the infrastructure and services. Port efficiency can be enhanced by encouraging private-sector involvement in port operations.

Although policy interventions address the regional cooperation deficit, significant challenges and constraints would influence achieving those objectives. Developing countries in the region have to overcome resource constraints of the maritime sector with the help of all stakeholders, including port administrators and operators, governmental bodies, international organisations, and shipping and logistics companies. The following section recommends measures to achieve these policy objectives.

Policy Options

An effective balance between competition and cooperation will not emerge voluntarily. Therefore, it is essential to enforce rules and/or incentives in the short term. Regional port cooperation should share resources and expertise to improve trade volume, assuring a sufficient cargo volume for shipping lines to enable their vessels to call at regional hub ports. Since global terminal operators have competitive advantages with economies of scale, expertise, and increased market power from a worldwide terminal network, inviting them to operate regional ports would enhance the market power of the entire region. Although several shipping services currently call at South Asian and neighbouring regional hub ports such as Colombo and Singapore simultaneously, calling at two adjacent regional ports by the same service will be limited in the future because shipping lines try to reduce their voyage costs. Therefore, vertical integration with shipping lines by offering dedicated terminals, on-arrival berths, and free dwell time for transshipment containers will encourage them to call at South Asian hub ports continuously. Moreover, governments may encourage shipping lines to invest in port infrastructure, giving them a sense of ownership in port facilities; thus, they would take initiatives to enhance port throughput. For example, offering concession agreements such as Build–Operate–Transfer (BOT) to shipping lines and rebates on port tariffs would enable shipping lines to invest in port facilities, especially if the port has geographical advantages. Also, port authorities should focus on developing supporting logistics infrastructure in the hinterland, such as high-capacity logistic corridors, multi-modal hubs, empty container depots, container freight stations, etc., while enabling advanced operations such as multi-country consolidations. A majority of the regional ports, especially in Sri Lanka and India, have severe issues with hinterland connectivity due to congested transport corridors and gaps in logistics infrastructure, which eventually decrease port competitiveness. Since a few shipping alliances dominate this region, vertical integration between alliances and port operators should be encouraged. Apart from developing infrastructure, it is essential to create professionals in maritime logistics to carry out efficient shipping agency functions and customs procedures, etc., to attract global shipping companies.

The possibility of hub port relocation is significant for transshipment markets. For instance, Maersk Sealand relocated its transshipment hub from Singapore to Tanjung Pelepas in 2000. Thus, ports should consider appropriate incentives to encourage shipping lines to relocate their transshipments from external hub ports to the Bay of Bengal region. Moreover, its connected markets should be expanded beyond the Indian sub-continent, especially targeting minor ports in East Africa and the Arabian Sea. Since an effective integration among market players is one of the medium-term objectives, Kavirathna et al. (2020a) highlighted the possible cooperation among terminals in Colombo to reduce port congestion and waiting time. Accordingly, despite their different ownership, Colombo Port’s terminals agree to handle excess vessels of competitive terminals when they have idle berth facilities, which guarantees the optimum utilisation of port infrastructure and high customer service with a potential for reducing over 1,600 hours of cumulative vessel waiting time per month at Colombo. The private sector can be involved in port operations by offering concession terminals. However, the profit-oriented objectives of private operators would have both positive and negative consequences; thus, effective enforcement is required from public port administrators.

Kavirathna et al. (2018) have highlighted berth availability as the most critical factor for hub port selection. Moreover, feeder connectivity and high cargo volume are significant for hub and spoke networks. Therefore, this region should attract more feeder operators offering dedicated feeder berths and tariff rebates in the short term. However, improving cargo volume is essential in the long term to maintain a strong feeder network because feeder lines consider volume stability when allocating their vessel space to multiple mainlines. Moreover, geographical features play a significant role in westbound and eastbound voyages. When considering export cargo originating from India’s East coast and destined for the Far Eastern countries, using Southeast Asian hub ports would be an advantage. However, if these exports were destined for European countries, their transshipment at Colombo would be economical. However, these advantages are hard to absorb because the port selection is affected by many other factors. As illustrated in Figure 4, Kavirathna, Kawasaki and Hanaoka (2018) estimated that most Indian East coast feeder ports would offer higher transshipment volumes to Singapore than Colombo due to the high efficiency and network connectivity in Singapore, although Colombo is located closer to these feeder ports. Colombo and major Indian ports have less competitiveness in relay transshipments because of their poor network connectivity. Thus, ports should cooperate on developing a highly connected hub port within this region to optimise their maritime networks. Moreover, having a highly connected hub port would reduce waiting time for shippers and consignees, enhancing regional competitiveness.

Figure 4. Estimated market shares for competitive hub ports

Source: Kavirathna, Kawasaki and Hanaoka (2018)

Note: Colombo, Singapore, Kelang, Tanjung  and Pelepas are abbreviated as CMB, SIG, PKG, TPP respectively.

Moreover, structural changes are observed in this region when changing the role of the feeder port to a direct calling port. For example, due to their adequate port infrastructure, Mundra and Nhava Sheva ports receive vessel calls directly from mainline services. Besides, India is trying to develop Vizhinjam port as a transshipment hub in the southern coastal area. Since India has a solid captive cargo base and the potential to serve several South Asian landlocked countries, creating its own transshipment hub would be possible. However, Chittagong port and some Indian minor ports still use Colombo as the central transshipment hub. Considering the least deviation of Colombo from the East-West trunk sea route, concentrating hub and spoke networks at Colombo would be ideal for this region. This is especially important because the feeder costs between Colombo and Indian East, South, and West-coast feeder ports might be lower than the costs of transporting containers via land transport corridors to their own transshipment hub due to the large land size of the Indian subcontinent. Therefore, port operators should develop a commonly agreed policy on ports’ function allotments to avoid over-investment in port development and unhealthy port competition. For example, in Sri Lanka, Hambantota port is being developed as a container port by China Merchant Port Holding, although the potential unhealthy competition between Colombo and Hambantota ports would threaten the transshipment hub status of Colombo (Kavirathna et al., 2020b).

However, attracting relay networks would reduce the vulnerability of Colombo’s transshipment volume even with these minor ports’ development. Besides, cooperation among regional ports on developing multi-modal transport infrastructure and outsourcing logistics would improve this transshipment market. For example, suppose one regional player has more competency in bunkering service, then other ports may outsource bunkering operations to this player, eventually reducing the overall cost with more economy-of-scale advantages. In the short term, cabotage restrictions can be reconsidered to offer more options for shipping lines to transport cargo within this region. Relaxing cabotage restrictions would encourage more global shipping companies to call at these regional ports, especially considering the potential growth in trade volumes from India and Bangladesh. Thus, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) members should agree on a liberal cabotage law while ensuring positive economic impacts for all members with an effective mechanism for sharing rewards. Due to the transshipment market competition, the market power of individual ports can be threatened if they continue to act as isolated entities. Therefore, port operators should synergise their competitive advantages to develop the Bay of Bengal region as the dominant maritime market in the world.

References

Kavirathna, C.A., Kawasaki, T. & Hanaoka, S. (2018). Transshipment hub port competitiveness of the port of Colombo against the major Southeast Asian hub ports. The Asian Journal of Shipping and Logistics, 34(2):71–82. Retrieved from http://doi.org/10.1016/j.ajsl.2018.06.004.

Kavirathna,A., Kawasaki, T., Hanaoka, S. & Matsuda, T. (2018a). Transshipment hub port selection criteria by shipping lines: The case of hub ports around the Bay of Bengal. Journal of Shipping and Trade, 3(4). Retrieved from https://doi.org/10.1186/s41072-018-0030-5.

Kavirathna C.A., Kawasaki, T., Hanaoka, S. & Bandara, Y.M. (2020a). Cooperation with a vessel transfer policy for coopetition among container terminals in a single port. Transport Policy, 89:1–12. Retrieved from http://doi.org/10.1016/j.tranpol.2020.01.010.

Kavirathna C. A., Hanaoka. S., Kawasaki, T. and Shimada, T. (2020b). Port development and competition between the Colombo and Hambantota ports in Sri Lanka. Case Studies on Transport Policy, vol. 9, no. 1, pp. 200–211. Retrieved from http://doi.org/10.1016/j.cstp.2020.12.003.

Kawasaki, T., Tagawa, H., Kavirathna, C.A. (2022). Vessel deployment and De-hubbing in maritime networks: A case study on Colombo Port and its Feeder Market. Journal of Marine Science and Engineering, 10(3), 304. Retrieved from http://doi.org/10.3390/jmse10030304.

Kavirathna C.A., Hanaoka, S. and Kawasaki, T. (2022). Terminal pricing decisions of the port authority and the global terminal operator of the competing ports in Sri Lanka. Journal of South Asian Logistics and Transport, 2(2), pp. 43-77. Retrieved from http://doi.org/10.4038/jsalt.v2i2.49.

Lloyd’s List Intelligence. (2020). One Hundred Ports, The Definitive Ranking of the World’s Largest Container Ports. Retrieved from https://lloydslist.maritimeintelligence.informa.com/one-hundred-container-ports-2020

MDS Transmodal Inc. (2016). MDS containership databank. Retrieved from https://www.mdst.co.uk/data

Notteboom, T., Pallis, A. and Rodrigue, J. (2022). Port Economics, Management and Policy, New York: Routledge. Retrieved from http://doi.org/10.4324/9780429318184.

The post Transshipment Hubs in the Bay of Bengal Region first appeared on CSEP.

Railways have become an important geo-strategic infrastructure in South Asia. In the last decade, India has focussed on expanding its rail connectivity in the neighbourhood with the revival and inauguration of railway lines with Bangladesh and Pakistan, and the commencement of the first India-Nepal passenger rail service in 2022. However, a railway line connecting India and Myanmar is yet to be developed, despite various steps taken in the past. Beyond domestic and regional needs, the increasing emphasis on expanding rail connectivity also comes in the backdrop of China’s increasing investment in the development of pan-Asian railway connectivity in Southeast Asia within which infrastructure linkages between Myanmar and Thailand are crucial. This policy brief makes a case that the India-Myanmar railway is both geo-strategically and economically important for India. Furthermore, this rail connectivity will only be beneficial if it is a part of an economic corridor between South and Southeast Asia, and is connected further with Thailand. The brief also highlights several challenges in the implementation of rail projects between India, Myanmar, and Thailand and charts out various policy options for the governments in the region.

Expanding rail links to Myanmar and Thailand

India’s emphasis on increasing connectivity with its neighbouring countries through investments in strategic infrastructure stands at the heart of its neighbourhood policy today. The focus on increasing linkages through rail, road, and waterways reflects the need to correct decades of regional insularity by diversifying the transport links to increase cross-border commerce and strengthen people-to-people connectivity. In the last two decades, India has operationalised nine Integrated Check Posts with the neighbouring countries for cross-border movement of trade and passengers, moved goods to Northeast India via Bangladesh using the India-Bangladesh Inland Waterways Protocol route, and built South Asia’s first petroleum pipeline with Nepal, with a second one under construction with Bangladesh.

The railway sector has seen significant progress including the revival of five railway lines with Bangladesh and the inauguration of the first India-Nepal passenger rail service in April 2022. From having a dense network of railways in the 19th and early 20th centuries (developed during the colonial period), South Asia today lags in rail connectivity. Between 1996 and 2016, the rail density within South Asia (India, Bangladesh, Pakistan, and Sri Lanka) has only grown by 5% (The World Bank).[1] Furthermore, cross-border movement by rail (freight and passenger) is among the lowest in the South Asian sub-region. This is also reflected in the trade figures. In 1948, intra-regional trade in South Asia was 18%, which dropped to 6-7% in 2010. Today, trade stands at a mere 5% (The World Bank, 2018). The logistics cost in the region is among the highest in the world at 14% (Logistics Performance Index). For passengers, road and air are the predominant modes of cross-border travel (Sinha & Sharma, 2020).

In the last decade, India has revived the old (and developed new) cross-border railway links with Nepal, Bangladesh, and Pakistan. However, a railway line connecting India and Myanmar is yet to be developed. In December 2020, the former Indian Foreign Secretary, Harsh Shringla, while delivering an address at the Northeast Festival, highlighted that it is possible to think about railways linking India to Myanmar and further to Thailand and other Southeast Asian countries in the future (Das, 2021). In his Independence Day speech in 2021, Prime Minister Narendra Modi announced that all state capitals in India’s Northeast Region (NER) will be connected with rail service, and under India’s Act East Policy, the NER, Myanmar, and other Southeast Asian countries will also be connected (Modi, 2021).

The India-Myanmar rail link is important for two reasons—first, it is a crucial link in India’s Act East Policy to strengthen inter-regional connectivity between South and Southeast Asia. Second, it is also important for the economic development of NER, connecting it to the key seaports of the region and developing commerce and people-to-people linkages.

In Myanmar, there is also a dire need for the upgradation of rail infrastructure. The country is surrounded by three economic giants, including India, China, and the ASEAN countries. Yet it has not been able to reap many benefits from the economic rise of its neighbours. The Asian Development Bank (ADB), in its ‘Myanmar Transport Policy Note’ (2016) estimated transport investments worth approximately US$ 60 billion (2016-2030). It also highlighted that the abysmal condition of roads, railways and highways has left almost 20 million people without basic access. A bilateral railway link between India and Myanmar may not be enough to exploit the untapped potential of the region. There is also a need to consider expanding the link to Thailand and other Southeast Asian countries to increase access to the markets. Several regional value chains with high trade potential have already been identified by the Government of India (GoI) in the sectors including the textile and garment sector, pharmaceuticals, gems and jewellery, automobiles, processed foods, etc. (Das, 2016).

In Thailand, facilitating connectivity and acting as a link between the Indian subcontinent and Southeast Asia, especially through the institutional mechanism of the Bay of Bengal Multi-Sectoral Initiative for Economic Cooperation (BIMSTEC), is a priority. At the BIMSTEC Summit (2018), General Prayut Chan-o-cha, Prime Minister of Thailand, emphasised that both South and Southeast Asia are the ‘strategic link’ between the two major oceans of the world—the Indian Ocean and the Pacific—and better infrastructure connectivity between both corresponds with Thailand’s Look West and India’s Act East policies. Thailand is interested in developing a high-speed railway line along its North-South and East-West economic corridors. The latter links the Andaman Sea to Vietnam, which is of importance to India’s connectivity plans in the Indo-Pacific and requires investments for development.

For India, expanding the railway line to Thailand will also make economic sense. Currently, India-Myanmar trade is limited, comprising only 0.20% of India’s global trade, and 2% of its total trade with the ASEAN countries. India’s trade with ASEAN is approximately 10% (2021–22) of its global trade, the majority of which is with Singapore (26%), Indonesia (20%), Vietnam (16%), and Thailand (14%) (Export Import Data Bank, Government of India). Myanmar is an important gateway for the movement of goods to these Southeast Asian economies. Therefore, the India-Myanmar railway will only be beneficial if it is a part of an economic corridor between South and Southeast Asia. In terms of the logistics cost, transportation of a full container (twenty-foot equivalent unit) from Kolkata Port to Bangkok takes between 10-20 days and the average cost is US$ 2,000 per container. Seamless rail connectivity is likely to reduce the time and cost of transportation between India and Thailand. However, according to a former Indian Ambassador to Myanmar, if rail connectivity is built between India and Myanmar, India will have to take the lead and responsibility for its construction.[2]

Beyond domestic and regional needs, the increasing emphasis on expanding rail connectivity also comes in the backdrop of China’s increasing investment in the development of a pan-Asian railway connectivity in Southeast Asia within which infrastructure linkages between Myanmar and Thailand are crucial. In August 2021, China inaugurated the high-speed railway line from the Chinese commercial hub of Chengdu to the Myanmar border, which further links China to the Indian Ocean by road. This is a rail-road-sea link China-Myanmar transit corridor (Krishnan, 2021). This link is a part of the China-Myanmar Economic Corridor (CMEC) under the Belt and Road Initiative (BRI). China also has plans to develop a seaport in Kyaukphyu in the Rakhine state in Myanmar and extend it by rail to the Yunan province. As part of the Kunming-Singapore rail connectivity plan, China has already laid out a plan to connect Yangon with Bangkok and then onwards to Singapore. In Thailand, China is invested in the North-South Corridor, constructing a high-speed railway line that connects Bangkok with the Nong Khai province. It is a crucial link in Beijing’s plan to connect Kunming to Singapore by rail, providing the country access to land routes that can be used as an alternative to the maritime route (Takahashi, 2022).

India has come a long way from a policy of regional insulation to being actively involved in building strategic infrastructure with its neighbouring countries. This is also in line with the Government of India’s assessment in the 2000s that there is a need to complement hard security with other connectivity initiatives for a holistic approach to border management. Rail connectivity provides a faster and more viable alternative to road transportation. Several routes, at the international, regional, and bilateral levels have been planned.

 Planned routes

Historically, no railway line existed between India and Myanmar (or colonial Burma before 1948). After the second Anglo-Burmese war in 1852, the British conducted a survey for a railway line from India to Yunan via Burma. Plans were also made for an Assam- Burma railway project but it remained only on paper. A preliminary survey had been completed in 1896 (Yhome, 2015).

In the last two decades, several multilateral and bilateral plans have been devised to connect India and Myanmar via rail. The United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) planned a project, the Trans-Asian Rail Network, to create an integrated freight railway network connecting Europe and Asia. Its overall goal is to see the development of an international, integrated, intermodal transport and logistics system for the region. An Intergovernmental Agreement on the Trans-Asian Railway Network drafted by the UNESCAP was adopted in April 2006 and came into force on 11 June 2009. Several countries in the region (South Asia and the Bay of Bengal), including Bangladesh, India, Myanmar, Nepal, Pakistan, Sri Lanka, and Thailand are signatories to the agreement (United National Treaty Collection, n.d.).

 At the bilateral level, establishing rail connectivity with Myanmar is an important part of India’s Act East Policy to facilitate trade and people-to-people connectivity. The India Transport Report (2014) had suggested that new railway lines with Myanmar, including one from Sittwe in Myanmar to Tirap in Arunachal Pradesh, may be important to improve regional transportation. Over the last two decades, the Indian Railways has been planning a railway link connecting Jiribam in Manipur to Mandalay in Myanmar. A feasibility study for this was conducted by Rail India Technical and Economic Service Limited (RITES) in 2005. This divided the length of railway connectivity in two sections—Section I is the link in India from Jiribam-Imphal-Moreh (236 Km) and section II includes the link in Myanmar from Tamu to Kalay (128 km) (Press Information Bureau (PIB), 2016).  The project was rejected in 2008 because it was regarded as financially unviable. However, the project was taken up again in 2019. Construction is ongoing on the Jiribam-Imphal railway line and is expected to be completed by 2024. Former Minister of Railways, Piyush Goyal, stated in a reply to a Lok Sabha question that the anticipated cost of the project is INR 12,264 crores, approximately 90% of which was incurred till March 2020. An additional outlay of INR 800 crore was provided in the budget 2020–21 (PIB, 2020). This exemplifies the renewed focus and allocation of resources on the project since its introduction in 2003–04 and several delays thereafter.

In 2022, India’s Railway Board also approved and started work on the location survey of the Imphal-Moreh railway line, citing it as a ‘strategic line’ (Dash, 2022). The government of India also envisages connecting this line to Thailand to exploit its full economic potential, also as a part of the Trans-Asian Railway Network.

Beyond the focus on cross-border railway links, India has also expanded the construction of railway lines in the Northeast region. This is a significant part of India’s Act East Policy, which also focuses on the development of India’s Northeast region as an essential prerequisite to connectivity with Southeast Asia. This includes plans to develop the 44 km Sivok-Rangpo line in Sikkim and the 51.38 km Bairabi-Sairang line in Mizoram. In a significant achievement, earlier in January 2022, a passenger train arrived from Silchar in Assam to Vangaichungpao railway station in Manipur, and later in the same month, a goods train reached the Rani Gaidinlu station in Manipur (Laithangbam, 2022). Since 2014, several rail development projects have been commissioned in the region including 270 km of new lines, 972 km of Gauge Conversion, and 114 km of doubling at an average rate of 193.71 km per year—94% more than the average commissioning during 2009–14 (Deol, 2021).

 On the regional front, however, there is a different take on expanding rail connectivity. In BIMSTEC, for example, there is a recognition that railways have become less important for intra-regional transport. Instead, the BIMSTEC Masterplan on Transport Connectivity (April 2022) emphasises on developing railway connectivity between ports, dry ports, and borders, and their hinterlands. There is less emphasis on developing a regional railway network due to technical difficulties.

 Decline in regional rail connectivity

There are several reasons for the decline in rail connectivity in the region through the decades, and these pose challenges to its revival as well. First, the partition in the subcontinent and the India-Pakistan wars fragmented many railway connections. The railway lines, developed during the colonial period, were stopped post-independence and subsequent wars between India and Pakistan led to a further decline in rail linkages, especially with Bangladesh (or East Pakistan before 1971). With Myanmar, while a cross-border railway did not exist, the hilly terrain and lack of feeder roads make building rail connection difficult. The resultant issues in the transportation of raw materials for construction make this a very time-consuming and costly infrastructure. Therefore, in India’s NER and Myanmar, there is a need for holistic development of infrastructure.

Second, there is heterogeneity in rail gauge systems in the region. Over the last 165 years, Indian railways were built on a multi-gauge system. The GoI decided to change this system in 1991 to a uni-gauge system. Myanmar operates on narrow gauge networks (DLCA, n.d.). Additionally, according to a report, about 60% of Myanmar’s railway is in a poor condition which restricts the operating speed of freight train, and the lines and bridges are in a poor condition (DLCA, n.d.). Thailand, on the other hand, operates on a standard gauge system. The governments have to navigate different gauge systems. While the Indian freight railways operate on a broad-gauge railway line, Myanmar railways run on a narrow gauge. It varies further in South-east Asia; for instance, Thailand operates rail on a standard gauge. Therefore, the construction and expansion of inter-regional railways with Myanmar and Thailand will require significant investment and needs to take into account other factors such as the international gauge systems (for inter-regional linkages) and the financial viability of the project. China, for instance, has been developing gauge-changing high-speed trains since 2016 to connect with the neighbouring countries in Central Asia that use the Russian gauge system (Shang-su, 2020).

Third, in both India and Myanmar, high freight costs, infrastructure gaps, and limitations in the standard operating procedures (SOPs) of rail services have contributed to the decline in the popularity of rail as a mode of transport. The cumulative cost of transportation through rail (first and last-mile logistics along with the rail freight) is one of the highest in the region. In Myanmar, freight transportation is mostly done in the northern division (out of 11) from Yangon via Nay Pyi Taw to Myitkyina, in Kachin State, only because it is less costly than road transportation. In other divisions, road transportation is preferred (DLCA, n.d.).

Fourth, there is a need to update the feasibility study conducted on the Moreh (India)-Kalay (Myanmar) rail line by RITES in 2004–05. The Government of Myanmar had requested the Government of India to conduct another feasibility study from Tamu to Mandalay through Monywa, Segyi Kalay with a new alignment (Ministry of Transport and Communications, 2021). However, this is still pending. There is a need for a greater presence of Indian public sector units such as RITES in Myanmar to expedite the railway project.

Fifth, though railways are a faster mode of transportation, the lack of integrated connectivity reduces the chances for a modal shift. For instance, transportation by road includes first and last-mile connectivity, however, transportation by rail includes the time taken for modal shift from road to rail, rake loading time, long haul, etc.

Finally, the 2021 military coup in Myanmar had led to the suspension of several official development assistance loans for development of Myanmar’s critical infrastructure. For instance, the Japan International Cooperation Agency (JICA) was financing the construction of the Yangon-Mandalay railway line, Korea was preparing a project to improve the Mandalay-Myitkina line, and the Ministry of Transport and Communications had approached Asian Development Bank to improve the Yangon-Pyay line (ADB, 2018). These projects were revived six months after their suspension in February 2021, albeit at a slower pace (The Irrawaddy, 2022). The coup has also restricted the Myanmar junta’s ability to secure foreign aid and loans.

Policy options

From initial assessments, building a railway link from India to Thailand via Myanmar requires high investments—both in terms of political will and financial resources. However, the strategic nature of this infrastructure makes it essential to construct, especially for India to push forward its Act East Policy. Building rail connectivity with Myanmar (and onwards to Thailand) will require several interventions, both in terms of policy and technical assessments.

First, there is a need to create a focussed sub-group on India-Myanmar-Thailand infrastructure connectivity under the Ministry of External Affairs-led Inter-Ministerial Coordination Group (IMCG) on neighbouring countries. The first meeting of the IMCG was convened and led by former Foreign Secretary Harsh Shringla in April 2022 with participation from various Indian ministries including Ministries of Defence, Railways, Economic Affairs, Commerce, the National Security Council etc. Within the IMCG, a focussed sub-group on the IMT Infrastructure project will enable detailed discussions and track progress. The sub-group should also hold regular consultations with the relevant ministries/departments in the partner countries. While the IMCG is an inclusive group, it must also learn from the failure of the previous Inter-ministerial group which met only six times between 2010-12. (Ministry for the Development of the North-Eastern Region, 2010).

Second, the proceedings and developments of the IMCG must be included in India’s Gati Shakti platform for the exchange of project-related information and developments with all stakeholders. In a press release, the Ministry of Railways emphasised that ‘completion of any railway project depends on various factors like quick land acquisition by the State Government, forest clearance by officials of the forest department, shifting of infringing utilities, statutory clearances from various authorities, geological and topographical conditions in the area, law and order situation in the area of the project site, number of working months in a year for a particular project site due to climatic conditions etc., and all these factors differ from project to project and affect the completion time’ (PIB, 2020). The Gati Shakti platform would enable transparency and accountability for the timely completion of the projects. For Indian PSUs engaged in the neighbouring countries, this platform can also facilitate tracking the progress of India’s external development projects. Additionally, in India’s Union Budget 2022–23, it was announced that four multi-modal logistics parks will be developed in the next three years as part of the Gati Shakti plan (Simhan, 2022). The Government of India should focus on developing one of these parks in the NER to facilitate the multi-modal cross-border movement of cargo.

Third, beyond policy issues, there are several infrastructure and regulatory barriers that also need to be addressed. The lack of accessibility to freight wagons, mirror infrastructure on both sides of the border, cargo handling infrastructure, and mechanisation of processes are some of the barriers faced in rail transportation currently. There is a need to address these on a priority basis to ensure efficient use of the rail connectivity infrastructure by the trade.

Fourth, in the initial phases, there is a need to incentivise a modal shift from roads to railways. More cargo moving through rail would attract competition and price concessions. Additionally, given the risks involved in road cargo transportation in hilly terrain such as the one at the India-Myanmar border, there needs to be increasing engagements by the governments on both sides with the local trading bodies and chambers to communicate the benefits of using rail as the preferred mode of transportation.

Finally, the role of international financial institutions such as the World Bank, Asian Development Bank, European Investment Bank, and the Asian Infrastructure Investment Bank will be key in the construction of the railway line from India- to Thailand via Myanmar. This is a cost-intensive project and requires it to be built around international standards to enable quality connectivity. This is important also in light of China’s investments in developing rail connectivity in Myanmar and Thailand.

 References

 Asian Development Bank. (2016). Myanmar transport sector policy note. Retrieved from https://www.adb.org/sites/default/files/publication/184794/mya-transport-policy-note-es.pdf

Asian Development Bank (2018). Proposed loan Myanmar: Railway modernization project. Retrieved from https://www.adb.org/sites/default/files/project-documents/47087/47087-006-cp-en.pdf

BIMSTEC Masterplan for Transport Connectivity. (2022 April). Retrieved from https://www.adb.org/sites/default/files/institutional-document/740916/bimstec-master-plan-transport-connectivity.pdf

Das, A.J. (2021, February 23). Railways linking India, Myanmar, Southeast Asia possible in future: Foreign Secy Shringla. EastMojo. Retrieved from https://www.eastmojo.com/news/2020/12/19/railways-linking-india-myanmar-southeast-asia-possible-in-future-foreign-secy-shringla/

Das, R.U. (2016). Enhancing India-Myanmar Border Trade: Policy and Implementation Measures. Ministry of Commerce and Industry and Research and Information Systems for Developing Countries. Retrieved from https://ris.org.in/sites/default/files/Publication/Enhancing_India-Myanmar_Border_Trade_Report%20%281%29.pdf.

Dash, D.K. (2022, January 5). Railway Board sanctions final location survey of Imphal-Moreh Line within hours after Vaishnaw’s reassurance. The Times of India. Retrieved from http://timesofindia.indiatimes.com/articleshow/88718329.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst. Accessed on April 20, 2022.

Deol, Taran. (2021, August 17). Modi govt wants all Northeast capitals connected by rail. Here’s how many are linked now. The Print. Retrieved from https://theprint.in/india/modi-govt-wants-all-northeast-capitals-connected-by-rail-heres-how-many-are-linked-now/716477/ Accessed on June 6, 2022.

Digital Logistics Capacity Assessments. (n.d.) Myanmar railway assessment. Retrieved from https://dlca.logcluster.org/display/public/DLCA/2.4+Myanmar+Railway+Assessment

Export Import Data Bank, Ministry of Commerce and Industry, Government of India. https://tradestat.commerce.gov.in/eidb/default.asp

K. Yhome. (2015). The Burma Roads: India’s search for connectivity through Myanmar. Asian Survey, 55(6), 1217–1240. Retrieved from: https://www.jstor.org/stable/10.2307/26364333

Krishnan, A. (2021, 31 August). China opens first road-rail transport link to Indian Ocean. The Hindu. Retrieved from https://www.thehindu.com/news/international/china-opens-first-road-rail-transport-link-to-indian-ocean/article36210663.ece

Laithangbam, I. (2022, January 29). First-ever goods train reaches Rani Gaidinlu station in Manipur. The Hindu. Retrieved from https://www.thehindu.com/news/national/other-states/first-ever-goods-train-reaches-rani-gaidinlu-station-in-manipur/article38343234.ece. Accessed on April 24, 2022.

Ministry for the Development of the North Eastern Region. (2010, April). Minutes Of The First Meeting Of The Inter-Ministerial Group. Retrieved from https://mdoner.gov.in/contentimages/files/Minutes_of_the_IMG_meeting_on_Indo_-_Myanmar_Border_Roads_and_Ports_held_on_8th_April_2010.PDF

Ministry of Foreign Affairs, Thailand. (2018, August 30). Speech for H.E. General Prayut Chan-o-cha, Prime Minister of the Kingdom of Thailand, Fourth BIMSTEC Summit. Retrieved from https://mofa.gov.np/wp-content/uploads/2018/08/PM-Speech-Thailand.pdf

Ministry of Transport and Communications. (2021). Rail Sector Development Activities in Myanmar. Retrieved from https://greatermekong.org/sites/default/files/Appendix%2017%20MyanmaRailways.pdf

Modi, N. (2021, August 15). Highlights from PM Modi’s Independence Day Speech. Retrieved from https://www.narendramodi.in/2021-the-prime-minister-shri-narendra-modi-addressed-the-nation-from-the-ramparts-of-the-red-fort-on-the-75th-independence-day-556739. Accessed on May 18, 2022.

National Transport Development Policy Committee. (2014). India Transport Report: Moving India to 2032. P. 82 Retrieved from https://niti.gov.in/planningcommission.gov.in/docs/sectors/NTDPC/rep_ntdpc_v1.pdf

Press Information Bureau. (2016, May 11). Indo-Myanmar Railway Network. Retrieved from https://pib.gov.in/newsite/PrintRelease.aspx?relid=145244

Press Information Bureau. (2020, September 21). Jiribam- Imphal Railway Line. Retrieved from https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1657353

Shang-su, Wu. (2020, 18 November). Gauge-changing train is no game changer for China. The Interpreter. Retrieved from https://www.lowyinstitute.org/the-interpreter/gauge-changing-train-no-game-changer-china

Simhan, T.E. Raja. (2022, February 1). Big push in budget for multimodal logistics. The Hindu Business Line. Retrieved from https://www.thehindubusinessline.com/economy/budget/big-push-in-the-budget-on-multi-modal-logistics/article64961171.ece

Sinha, R. & Sharma, B. (2020). Travel South Asia: India’s tourism connectivity with the region. (New Delhi: Brookings Institution India Centre). P. 11. Retrieved from https://csep.org/wp-content/uploads/2020/07/Travel-South-Asia-Tourism-Connectivity.pdf

Takahashi, T. (2022, January 16). China’s pan-Asian railway sputters to a halt in Thailand. Nikkei Asia. Retrieved from https://asia.nikkei.com/Economy/China-s-pan-Asian-railway-sputters-to-a-halt-in-Thailand. Accessed on April 20, 2022.

The Irrawaddy. (2022, January 14). Suspended international infrastructure projects resumed in Myanmar. The Irrawaddy Publishing Group. Retrieved from https://www.irrawaddy.com/news/burma/suspended-international-infrastructure-projects-resumed-in-myanmar.html

The World Bank. (n.d.). Rail lines data. Retrieved from https://data.worldbank.org/indicator/IS.RRS.TOTL.KM.

United National Treaty Collection. (2006, April 12). Intergovernmental agreement on the Trans-Asian railway network. Retrieved from https://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XI-C-5&chapter=11&clang=_en.

The post Roll East: A Proposal for India- Myanmar- Thailand Railway Connectivity first appeared on CSEP.

The geographic location of Bangladesh makes it a critical player in several inter- and intra-regional connectivity initiatives, including the Trans-Asian Railway and Asian Highway. Furthermore, as the founding member of the two regional cooperation processes in the sub-region—SAARC and BIMSTEC—Bangladesh is now the epicentre of the key regional and sub-regional frameworks. This makes regional connectivity an important component of Bangladesh’s foreign policy. Moving beyond large regional institutions, Bangladesh has shown the readiness and flexibility to work through sub-regional mechanisms to take the connectivity agenda forward. Over the years, Bangladesh has also adopted a multifaceted approach to connectivity by focussing simultaneously on hard infrastructure development while also advocating soft connectivity through increased people-to-people interactions in the region. This brief delves into Bangladesh’s changing approach to connectivity over the years while also highlighting the challenges and progress in implementing some of the regional connectivity plans, including the land ports and regional inland waterways. It concludes by highlighting that the success of many connectivity initiatives within and beyond South Asia would depend on bilateral and sub-regional relations between the countries.

Recovering past linkages

Bangladesh is located at the top of the Bay of Bengal, one of the world’s largest Deltaic plains, crossed by three major river basins. It shares maritime and land boundaries with India and Myanmar, making it a key gateway from South to Southeast Asia. The Bengal Delta approximates today’s territory of Bangladesh and the Northeast Region (NER) of India together, which forms a subregion with common historic, economic, and political ties. For many centuries, this was the nodal hub for a vibrant Bay of Bengal region, acting as a ‘maritime highway’ between India and China (Amrith, 2013, p. 24).

Before the 1947 partition of the subcontinent between India and Pakistan, the Bay of Bengal region was a unique space, integrated both geographically and economically, and more developed compared to many other parts of British India. The goods produced in this region were transported to other parts of India by rail and road through East Bengal (today’s Bangladesh) or exported globally through the Chittagong Port (Hasan & Naim, 2021). It was an economically viable and thriving area until the 1930s.

The partition of the Northeast region (NER) of British India into India and Pakistan (then East Pakistan) resulted in the creation of eight states of NER which were disconnected from the rest of India, except through the narrow Siliguri corridor (also known as Chicken’s Neck). Geographic, ethnic, and religious fragmentations, as well as separatist movements coupled with disrupted connectivity, resulted in the economic decline of the NER since 1947. The hostile relationship between India and Pakistan failed to bring back the integrated nature of the sub-region.

The independence of Bangladesh in 1971, however, brought changes in the geopolitics and geo-economics of this subregion. The visionary leadership of the Father of the Nation of Bangladesh, Bangabandhu Sheikh Mujibur Rahman, realised the economic and business potentials of a connected Bangladesh. During his first state visit to India in 1972, Bangabandhu stated,

“Let there be an end, once for all, to the sterile policy of confrontation between neighbours. Let us not fritter away our national resources but use them to lift the standard of living of our people. As for us, we want to cooperate with all concerned for creating an area of peace in South Asia where we could live side by side as good neighbours and pursue constructive policies for the benefit of our peoples.” (Hussain, 2020)

But the vision of Bangabandhu remained unrealised for decades. Despite the obvious logic of gains through connectivity between Bangladesh and India’s NER, political rivalries in the then East Pakistan, coupled with the fact that Bangladesh, in the post-1971 period, did not take any steps to create a larger economic space in the subregion until the 2000s, impacted the economic potential of the region.

However, following a series of bilateral engagements—most notably the visit of the Prime Minister of Bangladesh Sheikh Hasina to India in January 2010 and the visit of then Prime Minister, Dr Manmohan Singh, to Bangladesh in September 2011—the agenda for Bangladesh, India, Nepal, and Bhutan sub-regional connectivity gained momentum (Ministry of External Affairs [MEA], 2010; 2011b). The two Prime Ministers agreed to put in place a comprehensive framework of cooperation for development in the areas of power, water resources, transportation and other forms of logistics, food security, tourism, education, environment and sustainable development to mutual advantage. The Framework Agreement on Cooperation for Development was signed during the 2011 visit and further consolidated the intent of the highest political leadership by agreeing to harness the advantages of sub-regional cooperation (MEA, 2011a).

The Foreign Ministers of Bangladesh and India carried forward this resolution and the first meeting of the Joint Consultative Commission (JCC), held in May 2012, welcomed the formation of technical-level teams for sub-regional cooperation in water, power, physical connectivity, and transit (MEA, 2012). Later, during the second and third JCC meetings, the idea of connectivity was consolidated and many connectivity projects were initiated. Also, in the joint statements issued following the visits in 2015 and 2017, the two Prime Ministers emphasised the advantages of sub-regional cooperation in the areas of connectivity for mutual benefit (MEA, 2017).

The logic of cooperation on Bangladesh-India connectivity in the wider sub-regional context was also captured during the exchange of visits between Bangladesh and Bhutan at the highest levels (Islam, 2020). Through these visits, a broad understanding has been reached by the two countries to cooperate in a multitude of areas.

Bangladesh’s renewed approach to connectivity

As part of global and regional supply chains, deepening connectivity is essential for Bangladesh. Encouraged by the Association of Southeast Asian Nations (ASEAN) and Greater Mekong Sub-region (GMS), Bangladesh has opened up over the decades to its extended neighbourhood. Its approach is to link all nodes, ports, growth centres, and connectivity networks in a seamless way with the goal to create a contiguous landscape from the Far East through Bangladesh to India and beyond. This logic of connectivity underpins Bangladesh’s engagements in the various connectivity initiatives in Asia-Pacific, specifically in the sub-region (Bangladesh and NER). In the latter, it is expected that the opening-up of economies and societies through multimodal connectivity will naturally create a new re-alignment in terms of market synergies and economies of manufacturing and distribution across borders.

Beyond the geographical coverage, Bangladesh’s approach to connectivity is also multi-faceted, ranging from infrastructure and logistics connectivity to that between people, institutions, and services (Bhuiyan, 2019). It argues that well-connected regions surely contribute to securing peace and stability across communities.

Prime Minister Sheikh Hasina articulated her vision of connectivity during the 18th South Asian Association for Regional Cooperation (SAARC) Summit in Kathmandu in 2014,

“Physical connectivity is important in ensuring overall peace, progress, and stability across South Asia. Multimodal physical connectivity links territories and communities …… Bangladesh approaches connectivity in a wider context. We believe in connecting ideas, knowledge, technology, culture, people, road-rail-air, movement of goods, services and investment” (SAARC, 2014).

Bangladesh believes that the people are at the centre of all endeavours for any form of connectivity. Connectivity is about securing well-being, dignity, and realising the right to development for people and communities, especially for the people at the grassroots. It is also about the realisation of sustainable development.

Bangladesh provides a critical link to any inter-regional connectivity initiative, particularly of the Trans-Asian Railway and Asian Highway initiatives. At the same time, as the founding member of the two regional cooperation processes in our sub-region—SAARC and BIMSTEC—Bangladesh is now at the epicentre of these key frameworks. It is engaged with its development partners to help actualise the sub-regional gateways, measures, and infrastructure. It assumes that the connectivity projects will connect and integrate Bangladesh with its neighbouring regions particularly bordering areas of NER of India as well as countries like Nepal and Bhutan, and eventually also with the ASEAN region.

Sub-regional connectivity: Progress and opportunities

In terms of connectivity in the Bangladesh and NER sub-region, road, rail, and waterways play a vital role. In 2018, Bangladesh and India formalised the cooperative use of the Chittagong and Mongla ports (Ministry of Shipping, 2018). It provided access to the two Bangladeshi sea ports to India’s Northeast, Nepal, and Bhutan, through Bangladesh territory. Bhutan was also allowed to use a northern airport in Bangladesh. Talks in an advanced stage are underway to establish a transit corridor for Bangladesh through India to Bhutan and Nepal. Direct bus services have been launched connecting two key cities in North-east India (Guwahati, Shillong), and Kolkata and Agartala through Dhaka. More bus and train services are in the pipeline to connect cities (Khulna, Jessore) with Kolkata (Press Trust of India, 2015). The old rail links in western and eastern Bangladesh are being revived. A Dhaka-Kolkata passenger train service is operating since April 2008. A container-handling yard is being planned in south-west Bangladesh (Jashore).

Sub-regionally, India has granted Bangladesh access (Rohanpur-Singhabad and Radhikapur-Birol routes) for rail transit to Nepal through India (Jha, 2021). Talks with Nepal are in progress for a bilateral agreement for the carriage of transit/trade cargo so that Nepal can carry out third-country trade through Bangladesh seaports. Bangladesh authorities are in talks with Nepal for Dhaka-Kathmandu bus and rail services. Bhutan can also do the same. The ongoing Bangladesh and Bhutan transit agreement will allow Bhutan’s transit cargo through Bangladesh territory and ports for third-country trade. Dhaka is also working on a Dhaka-Thimpu direct bus service. Riverine connectivity with Bhutan and Nepal also holds promise for transit cargo using Bangladesh’s inland waterways.

Under a coastal Shipping Agreement, India and Bangladesh have agreed to the development of connection ports along the coastline. Trials have been conducted successfully. Small traders across the two countries are particularly upbeat as this will eventually establish direct coastal shipping up to Sri Lanka, the Maldives, Myanmar, and further afield. It will also allow goods to be taken through the riverine hinterland deep inside Bangladesh. Additionally, Bangladesh and India are also discussing the movement of containerised cargo on a commercial basis, beginning with trans-shipment arrangement through Bangladesh.

Beyond the road-rail connections, the work on developing and tapping the region’s power and energy potential is progressing well. SAARC already has a Framework Agreement for Energy Cooperation and for creating a Market for Electricity. Through the Bangladesh-India Power Grid, Bangladesh is importing 500 MW from eastern India. Plans are afoot to import another 600 MW from North-East India (Tripura). A cross-border pipeline carries diesel from a refinery in Northeast India (Assam) on a commercial basis. Another commercial pipeline carries LNG from Indian points to Bangladesh. The private sector in India is also discussing the possibility of more pipelines to carry LPG from India to a plant in Chittagong and for future supply to India.

Upgrading land border management

The sub-regional transportation and power connectivity initiatives discussed above also require simultaneous improvements in border management. Given the geographical contiguity and historical physical links, addressing the challenges in land-border management in the sub-region will play a key role in facilitating many of these connectivity plans by reducing the time and cost of the initiatives. In the last decade, the development and modernisation of land-border management infrastructure has received some attention in Bangladesh, India, and Nepal.

Strengthening the Integrated Check Posts/ Land Ports

India’s Integrated Check Posts (ICPs) are sanitised zones at India’s land border that play a key role in facilitating cross border movement (both for trade and travel). These are land border entrance and departure points that house a variety of facilities like customs, immigration, and border security, among others, all inside a single-facilitation zone. At present, India has four active ICPs with Bangladesh, including at Petrapole, Agartala, Sutarkandi, and Srimantapur. In 2019–20, 40% of India’s total trade with Bangladesh was routed through the ICPs (Sinha, 2022).

In recent times, the Government of Bangladesh has focussed on facilitating export-import through land routes. The major activities include infrastructure development, efficient cargo handling, improvement of storage facilities, and fostering public-private partnerships for effective and better service delivery. It has also been decided that Bangladesh would build port infrastructure in an integrated manner like India’s ICPs to enhance the efficiency of the port operation.

So far, overall, 24 Land Customs Stations (LCSs) nearing neighbouring countries, both with India and Myanmar, have been declared as land ports. The Bangladesh Land Port Authority currently operates seven (out of 11) land ports with India at Benapole, Bhomra, Burimari, Akhaura, Nakugaon, Tamabil, and Sonahat. Private participation at the land ports in Bangladesh is also active with four ports along the border with India (Sonamasjid, Hili, Bibir Bazar, and Banglabandha) being operated by the private players on a Build, Operate, and Transfer (BOT) basis. More land ports are also being developed by private operators (Bangladesh Land Port Authority [BLPA], n.d.).

 Figure 1: India’s land border checkpoints with Bangladesh and Myanmar

Source: Linking land borders: India’s Integrated Check Posts (Sinha, 2021)

In some cases, LCS/ ICPs, as part of development activities, are to be developed within 150 yards along the Bangladesh-India international border. Para no. 38 of the Joint Statement endorsed during the visit of Hon’ble Prime Minister of Bangladesh to India in 2017 said that “both leaders directed their respective agencies to ensure that development work including construction of lCPs/ Land Ports will be allowed within 150 yards of zero line on the prior intimation from other side” (MEA, 2017).

Sometimes, construction work of LCSs/ ICPs is stalled due to objections raised by either the Border Security Force (BSF) of India or the Border Guards Bangladesh (BGB). Objections may arise out of design-layout of LCSs/ ICPs, design of fencing, number of gates, time of construction (day/ night), etc. Additionally, several common challenges exist across the LCSs/ICPs, including harmonisation of working hours with neighbouring countries, limitations in truck movement, absence of partner government agencies such as plant and animal quarantine, paucity of warehousing space, lack of digitisation on both sides, port limits due to a lack of cargo-handling infrastructure (Sinha, 2021). Both the countries want to address the existing challenges in order to promote seamless regional trade and logistics.

Reviving regional waterways

In the last few years, India and Bangladesh have strengthened cross-border transportation through the inland waterway network. This provides a viable alternative to the congested land routes of travel and is also in line with India’s primary interest “to efficiently connect the northeast with the main hinterland by using the waterways” (Chawla, 2017, p. 4).

Bangladesh and India signed the Protocol on Inland Water Transit and Trade (PIWTT) in 1972, with an agreement to renew it every two years. Despite this, the renewal remained irregular. It was only in June 2015 during Prime Minister Modi’s visit to Bangladesh that the two governments decided to renew and move forward on the protocol (Chawla, 2017).

Through the PIWTT, India and Bangladesh have re-opened and upgrade another route for trade and commerce. It also established the standard operating procedure, including on expense sharing, voyaged permissions, and tonnage. In May 2017, the two governments also decided to start day-to-day passenger services and cruise vessels through an MoU (Ministry of Shipping, 2017).

Exemplifying interests in bilateral economic and political cooperation, India and Bangladesh have implemented their plans on waterways efficiently. Since a major part of the PIWTT routes inevitably passes through Bangladesh, this will give Bangladesh leverage to control the river routes.

According to Vasudha Chawla (2018), Bangladesh is also seeking to use the inland waterway routes to its advantage. For instance, it is argued that Bangladesh, with a dominant vessel fleet in the region, has a strategic advantage over India and can leverage this for geopolitical ramifications especially in terms of making India sign the Tessta Water Treaty.

Beyond geopolitics, however, there are several challenges that the waterways need to navigate for efficient use and functioning. The seasonal changes in the region and their impact on the water levels, siltation of rivers (especially in the Sundarbans delta), requirement of regular dredging, and installation of additional infrastructure (such as locks) will need to be addressed to make the waterways navigable.

The way ahead

Bangladesh is set to graduate from the UN’s Least Developed Status to a middle-income economy by 2024. This carries several economic implications for the country including a likely increase in exports. Therefore, investing in regional connectivity projects to gain economic dividends and offset the removal of concessional financial benefits becomes important.

For sub-regional connectivity, Bangladesh can leverage its strategic location, in particular access to the sea. The connections between Bangladesh and the NER of India will open new avenues for trade, commerce, investment, and other activities, which can be further facilitated through the development of protocol routes of waterways. The effective development of the waterways, rail, and road routes might also benefit the BBIN agreement if Bhutan opts for waterways to supplement roadways. In addition to BIN (leaving out Bhutan from BBIN), the implementation of the proposal to establish a South Asian Sub-Regional Economic Cooperation (SASEC) consisting of Bangladesh, India’s NER, Nepal, and Bhutan could be a productive way to connect this sub-region. SASEC could also complement the BIMSTEC infrastructure and logistic initiative. It will help to enable a continuous geo-economic space for Bangladesh and Northeast India.

The realisation of the full potential of the Bangladesh-NER of India region will also depend on bilateral relations. The resolution of some of the outstanding issues between the two countries such as the Teesta River Agreement and joint water management of other transboundary rivers will add to the peaceful and productive connectivity in the subregion.

The immediate agreement on the proposed Bangladesh-India Comprehensive Economic Partnership could bring in added momentum to the Bangladesh-NER of India sub-regional cooperation.

References:

Amrith, S.S. (2013). Crossing the Bay of Bengal: Furies of nature and fortunes of migrants. Cambridge, Massachusetts: Harvard University Press. P. 1.

Bangladesh Land Port Authority. (n.d.). Overview. Retrieved from http://bsbk.portal.gov.bd/sites/default/files/files/bsbk.portal.gov.bd/page/1da6d5ad_5287_4dc7_8146_0326260b1894/overview%20%28Nov%2717%29.pdf.

Bhuiyan, H.K. (2019, November 13). Dhaka prefers regional economical, development initiatives to political, social coalitions. Dhaka Tribune. Retrieved from https://archive.dhakatribune.com/bangladesh/dhaka/2019/11/13/dhaka-prefers-regional-economical-development-initiatives-to-political-social-coalitions

Chawla, V. (2017, June 16). India-Bangladesh maritime trade: protocol on inland water transit and trade (PIWTT). New Delhi: National Maritime Foundation. Retrieved from https://maritimeindia.org/india-bangladesh-maritime-trade-protocol-on-inland-water-transit-and-trade-piwtt/ https://maritimeindia.org/india-bangladesh-maritime-trade-protocol-on-inland-water-transit-and-trade-piwtt/

Hasan, V.A.H.R. & Naim, S.J. (2021). Bangladesh and Northeast India: Planning communication links under GATT Article. In H. Srikanth, & M. Majumdar (Eds). Linking India and eastern neighbours: Development in the northeast and the borderlands. New Delhi: Sage Publishing.

Hussain, S.A. (2020; October 24). The architect of Bangladesh foreign policy. Daily Sun. Retrieved from https://www.daily-sun.com/printversion/details/513625/The-Architect-of-Bangladesh-Foreign-Policy.

Islam, M.T. (2020). Bangladesh and Bhutan: Fostering win-win bilateral relations. Institute of South Asian Studies [ISAS] Insights. Retrieved from https://www.isas.nus.edu.sg/papers/bangladesh-and-bhutan-fostering-win-win-bilateral-relations/.

Jha, R. (2021, February 9). India facilitates transit traffic from Bangladesh to Nepal. DD News. Retrieved from https://ddnews.gov.in/international/india-facilitates-transit-traffic-bangladesh-nepal.

Ministry of External Affairs. (2010, January 12). Joint Communiqué issued on the occasion of the visit to India of Her Excellency Sheikh Hasina, Prime Minister of Bangladesh, Ministry of External Affairs. Retrieved from https://mea.gov.in/bilateral-documents.htm?dtl/3452/

Ministry of External Affairs. (2011a, September 6). Framework Agreement on Cooperation for Development between India and Bangladesh. Retrieved from https://pib.gov.in/newsite/PrintRelease.aspx-?relid=75687

Ministry of External Affairs. (2011b, September 7). Joint Statement on the occasion of the visit of the PM of India to Bangladesh. Retrieved from https://mea.gov.in/bilateral-documents.htm?dtl/5147/Joint+Statement+on+the+occassion+of+the+visit+of+the+PM+of+India+to+Bangladesh.

Ministry of External Affairs. (2012, May 7). Joint Statement by India and Bangladesh on First Meeting of the India-Bangladesh Joint Consultative Commission. Retrieved from https://mea.gov.in/incoming-visit-detail.htm?19864%2F

Ministry of External Affairs India. (2017, April 8). India-Bangladesh Joint Statement during the State Visit of Prime Minister of Bangladesh to India. https://www.mea.gov.in/bilateral-documents.htm?dtl/28362/India++Bangladesh+Joint+Statement+during+the+State+Visit+of+Prime+Minister+of+Bangladesh+to+India+April+8+2017.

Ministry of Shipping. (2018, October 25). Standard Operating Procedure of MoU on Passenger and Cruise Services on the Coastal and Protocol Route between the Government of the People’s Republic of Bangladesh and the Government of the Republic of India. Retrieved from https://shipmin.gov.in/sites/default/files/1516954744aggrement2.pdf

Ministry of Shipping. (2018, October 25). Agreement on the Use of Chattogram and Mongla ports for movement of goods to and from India between the People’s Republic of Bangladesh and the Republic of India. Retrieved from https://shipmin.gov.in/sites/default/files/agree.pdf.

Press Trust of India. (2015, June 6). Two Bus Services Launched Between India and Bangladesh. The Hindu. Retrieved from https://www.thehindu.com/news/national/Prime-Minister-Narendra-Modis-two-day-Bangladesh-visit/article60327487.ece

SAARC. (2014, 26 November). Prime Minister Sheikh Hasina’s statement at the 18^th SAARC Summit. Retrieved from https://www.mofa.go.kr/cntntsDown.do?path=www&physic=SAARC_summit_declaration.pdf&real=SAARC_summit_declaration.pdf.

Sinha, R. (2021). Linking land borders: India’s integrated check posts (CSEP Working Paper 9). New Delhi: Centre for Social and Economic Progress. Retrieved from https://csep.org/working-paper/linking-land-borders-indias-integrated-check-posts/.

The post The Role of Bangladesh in Sub-Regional Connectivity first appeared on CSEP.

Most of the global trade takes place between corridors that connect major economic or logistics clusters. The efficient operation of these corridors, therefore, assumes great importance for the trading economies connected through them. Some of the most important corridors criss-cross overland borders with road, rail, inland water, and coastal linkages between economies. As India advances on an integrated approach to transport infrastructure development under its ambitious Prime Minister’s Gati Shakti initiative that includes several industrial and economic corridors, it is important to understand how these programs to improve connectivity within the Indian hinterland can be synergised with cross-border regional connectivity to further regional economic integration. An important aspect of achieving such synergy would be to develop a holistic framework for agencies of the countries in the corridors to work together and address the physical and regulatory bottlenecks that impede the efficient movement of goods across borders. Such cooperation should focus on coordinated development of border infrastructure, use of technology to simplify processes on both sides of the border, and protocols for information exchange between regulatory agencies. Successful collaboration on these issues will lead to increased facilitation within the corridor. This policy brief builds on these ideas and focuses on the concept of a Highly Facilitated Trade Corridor (HFTC). An HFTC can be considered to be a combination of initiatives to address all major impediments to efficient transport and border operations and ensure effective regulatory collaboration. Developing such HFTCs focusing on the most important trade corridors connecting countries in the Bangladesh, Bhutan, India, and Nepal (BBIN) or the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) sub-regions would not only support better regional integration, but the demonstration effect of operationalising such a corridor would lead to the adoption of similar facilitation measures in other cross-border corridors resulting in an overall improvement in regional integration objectives across the region.

Shortfalls in regulations and procedures

The basic premise of an efficient global market is the smooth flow of goods, services, technology, and people across borders, in other words, connectivity. Literature on trade and transaction costs has dealt extensively with the idea of political borders as barriers (Bougheas, Demetriades, & Morgenroth, 1999). The lack of effective economic connectivity has been a much-discussed policy issue in the context of Bangladesh, Bhutan, India, and Nepal (BBIN) sub-region. The borders between India and Bangladesh that dissect the BBIN region have long been considered one of the worst managed and subjected to the most severe transaction costs (Lakshmanan, Subramanian, Anderson, & Leautier, 2001). Generally, poor infrastructure and a small number of operational rail and road cross-border corridors create congestion which is further aggravated by the poor governance of border procedures (i.e., enforcement of customs and other allied regulations) and lack of institutional solutions to facilitate trade (Roy & Banerjee, 2010).

Statistics show that tariff reduction under South Asian Free Trade Agreement (SAFTA) has not helped improve economic integration beyond a certain level. Most studies indicate improvement in connectivity including the institutional and procedural aspects of connectivity that will be the key to improving economic integration in the BBIN region (Raihan, 2015).

Regional integration in the BBIN sub-region has been held hostage by connectivity-related barriers. The BBIN sub-region is a part of the larger geography that I would like to call Southern Asia, including the BBIN and all of mainland South-East Asia (i.e., Myanmar, Thailand, Cambodia, Vietnam, Laos, Peninsular Malaysia, and Singapore). Such connectivity-related barriers can be broadly categorised under hard infrastructure-related issues and soft policy and procedural issues. More specifically, they can be summarised under five distinct categories as represented in Figure 1.

Figure 1: Connectivity-related issues

Source: Developed by the author

Border regulations and procedures for goods and people refer to trade facilitation and immigration issues, respectively. Border regulations for transport define the rules and procedures that govern the cross-border movement of vehicles (including trucks) and trains, such as the physical inspections and paperwork to comply with such regulations. For example, most trucks take anything between 60 to 100 hours to cross the Petrapole-Benapole land port at the India-Bangladesh border. Typical border crossings in the US-Mexico border or the border between European Union (EU) and non-EU border states take less than 30 minutes.

Trade policy regimes relate to tariff and non-tariff measures that are applied to goods, while the immigration policy regime refers to the rights and privileges of foreign citizens as defined by the visa requirements and rules.

Cross-border transport infrastructure challenges refer to last-mile connectivity between many border points and the main trunk infrastructure. A good example of challenges in this context is the road between Kolkata and Petrapole leading to the India-Bangladesh border that runs through congested towns with several illegal encroachments along this route. There is also a busy railway crossing en route where trucks have to stop and wait for trains to pass, thereby adding to transit time. Other challenges include examples of inadequate infrastructure such as the Bangabandhu Bridge in Bangladesh which is currently unable to bear the weight of fully-loaded container trains impeding direct container rail connectivity between Dhaka and the Indian border.[1]

Border management infrastructure consists of an ecosystem of land ports (serving both rail and road) that act as gateways through which the cross-border movement of goods and people is regulated. Inadequate or poorly planned infrastructure at the border can thus impede the efficient movement of goods and people.

Conceptualising Highly Facilitated Trade Corridor in Southern Asia 

This policy brief introduces the concept of Highly Facilitated Trade Corridors (HFTC) which provides a holistic approach for addressing all of these connectivity-related challenges except trade and immigration policy (issue no. 3 in figure 1).

Most of the global trade takes place between corridors that connect major economic or logistics clusters. The efficient operation of these corridors, therefore, assumes great importance for the trading economies connected through them.

Such corridors can represent a land-based corridor connecting contiguous countries. A good example of this is the Lobito Corridor that connects the hinterlands of landlocked Zambia and the Democratic Republic of Congo (DRC) with the port of Lobito in Angola. This corridor will link these three countries, as well as link landlocked Zambia and DRC with other countries through the port of Lobito.

Such corridors can also be multi-modal. For example, EU-China Smart and Secure Trade Lanes (SSTL) corridor covers both the overland railway route connecting China with the EU via Kazakhstan and Russia, as well as the maritime linkages connecting the main ports in Belgium, France, Germany, and Italy with the port of Shanghai.

The HFTC can be considered to be a combination of initiatives to address all major impediments to efficient transport and border operations, and ensure effective regulatory collaboration. Developing such HFTCs focusing on the most important trade corridors connecting countries in the BBIN sub-region would not only support better regional integration, the demonstration effect of operationalising such a corridor would also lead to the adoption of similar facilitation measures in other cross-border corridors leading to an overall improvement in regional integration objectives across the board.

There are four inter-related objectives for developing an HFTC for land corridors:

1. Facilitate seamless cross-border transport operations: By focusing on eliminating trans-shipment between trucks of the neighbouring countries at the border, congestion can be reduced.  This can be further streamlined by minimising customs-related procedures and inspections currently undertaken at the border locations on both sides.
2. Collaboration between customs and other regulators at the border to minimise time and complexity for clearance of goods: Achieving the first objective is not possible without the active cooperation and trust between regulators on both sides of the border with proper institutional mechanisms for sharing information, intelligence, and putting in place formal systems for operational cooperation. Ideally, such collaboration could lead even to regulators working together with single-point clearance, sharing facilities and conducting joint physical inspections, wherever possible
3. Systems inter-operability between regulators and land ports: The second objective requires institutionalised protocols for information exchange between regulators that would provide information in advance for faster clearance of cargo. Digital exchange of information would eliminate the need for physical documents issued/endorsed by one administration to be submitted across the border to the other administration which adds to delays in clearance.
4. Coordinated border infrastructure development and management: Efficiency of cargo throughput, including dwell time at land ports, depends on the quality of infrastructure on both sides of the border. Otherwise, the side with inadequate/inferior infrastructure will become a bottleneck. Coordinated development (which includes upgrading existing infrastructure deemed inadequate or inferior on both sides) ensures that such impasses do not arise.

In the context of the fourth objective, the BIMSTEC Masterplan for Transport Connectivity developed by the Asian Development Bank (ADB), in partnership with BIMSTEC member governments, assumes importance.[2] This Masterplan identifies most of the last-mile to-the-border and at-the-border infrastructure gaps, making it integral to the ten-year action plan. These identified gaps, as also applied to the HFTC, have to be addressed on priority.

The next section provides a concise deliberation of the key actionable items and specific interventions required to achieve the four objectives.

Building blocks of HFTC

Developing HFTCs would broadly require the following ten interventions, under the two broad umbrellas of a) ensuring seamless cross-border transport operations and movement of goods, and b) maintaining efficient border infrastructure.[3]

Seamless cross-border transport operations

1. Managing the temporary admission of vehicles: This includes a set of comprehensive protocols that will allow the right of trucks and other commercial vehicles to cross borders by eliminating the need for trans-shipment between vehicles. These protocols would define the rights and obligations of foreign vehicles, as well as issues of vehicular standards, driver licensing, insurance, transit fees, and customs guarantees related to the vehicle. The BBIN Motor Vehicles Agreement (MVA) and BIMSTEC MVA would provide such protocols in the Southern Asian context. The greater operational flexibility the protocols allow, the more optimal and efficient transport operations would be (elaborated in point 2 below). Mandatory use of technology such as the Global Positioning System (GPS) would provide maximum assurance to regulators while allowing for minimum pre-requisites.
2. Allowing the movement of trailers and flatbeds, and not just trucks and change of drivers: Critical flexibilities in the MVA protocols will include allowing trailers and flatbeds to cross-borders, for e.g., allowing an Indian trailer/flatbed to switch to a Bangladeshi tractor (prime-mover) at the border. It should also allow change of drivers at the border, for e.g., allow a Myanmar driver to take over the truck from a Thai driver at the border.
3. Customs Related Protocols that allow for inland clearances: The most important facilitation would be to allow the seamless movement of sealed containerised cargo (or closed trucks in general) between hinterland customs stations along the corridor, without any procedures being done at the borders. This could be facilitated using Radio Frequency Identification (RFID) e-seals for containers/closed trucks and the use of non-intrusive inspection technologies at border crossings. Containers/trucks would be sealed and cleared by customs in an inland location (say, Kolkata in India) and e-sealed. The truck would be scanned and weighed using advanced X-ray scanners allowing non-intrusive inspection and weigh-in-motion (WIM) technology, and the RIFD seal would be checked by sensors for any violation, all of this in a matter of minutes, and the truck would be allowed to cross across the border. It would proceed to an inland customs location (say in Dhaka) and customs and other clearance of goods would take place there. The concept of inland clearances would also apply to the movement of cargo by trains along the corridor. Point 5 below expands on the additional facilitation that should be applicable to the movement of cargo by rail. Similar facilitation should be extended to trucks/trains transiting through foreign territory (for e.g., a Nepalese truck transiting India to travel to Bangladesh). Protocols should allow for trusted transporters and trusted trader schemes (adoption of mutually recognised AEO programmes). [4]
4. Cooperation on operational and safety standards and associated physical inspection and handover of trains between administrations: International Union of Railways (UIC) has developed the framework Agreement on Freight Train Transfer and Inspection (ATTI) to help enable seamless handover of trains between two different rail administrations across borders.[5] HFTCs should adopt a framework (or a guiding principle) through which institutionalised cooperation will ensure seamless movement of freight trains with minimum duplication of inspections, checks, documentation etc. without compromising on security, while developing shared best practices in standards and their enforcement.
5. Institutional mechanism to enable seamless cross-border movement: Effective management of cross-border movement requires close institutional cooperation between multiple agencies of different countries in a corridor. In light of this, it is important to put in place a formal institutional mechanism for cooperation. A good example of such an institutional framework can be found in the US-Canada Transportation Border Working Group (TBWG) that brings together multiple transportation and border agencies, and other organisations, to coordinate transportation planning, implement policy, and deploy technology to enhance border infrastructure and operations. Such an institution can also be tasked with the responsibility of developing operational protocols and SOPs between different sets of regulators or border managers that ensure smooth management of cross-border movements and expeditious solution to any challenges that arise.
6. Coordinated planning, development, and management of land border facilities Focus on infrastructure and inter-operability: Critical focus is required in two areas. First, the upgradation or development of adequate road capacity between the land ports and economic centres along the corridor, including bridges to handle heavy freight movement and a large volume of traffic. Second, the development of rail linkages that allow inter-operability, for e.g., double gauging (provision for both metre gauge and broad gauge). This will require standardisation in signals and other operational aspects of railroad movement for thorough end-to-end operations between the different systems and the upgradation or development of bridges with adequate load-bearing capacity.
7. Coordinated development of cross-border gateways with best-in-class design, technology and management Standard Operating Procedures (SOPs): Investing in border facilities without coordinating with the other side is a poor strategy. The throughput at any border facility, no matter how advanced, will always be subject to limitations on the other side of the border. This is where land borders fundamentally differ from maritime and air gateways. Since resources are always limited, the concept of developing HFTCs would have to include the identification of mutually agreed cross-border points on which countries on both sides of the border would focus their energies. This has indeed been the global best practice in all successful land-border corridors. Essential features in such border facilities will have to include infrastructure to support the technology enablement needed for seamless cross-border movement of trucks and trains, i.e., dedicated lane/pass through facility equipped with:

• • Weigh-in-motion (WIM) devices to capture the axle and gross-vehicle weights of passing trucks/train wagons.
  • Advanced X-Ray inspection systems used for scanning cargo containers, trucks, train wagons and other vehicles in high-volume operations.[6]
  • Overhead RFID e-seal scanners that check whether seals put in place by customs have remained intact in transit. In addition, large proportion of this trade in the Southern Asian region is related to bulk goods (industrial raw materials) and agro-produce which is often not containerised. Such shipments would still undergo checks and customs clearances at the border posts. Managing such cargo would require the following facilities to be in place:
  • Modern customs bonded warehouse with adequate space for temporary storage.
  • Well-designed truck parking bays equipped with handling equipment that allows fast, safe, and efficient loading and unloading of goods.
  • Facilities for handling and storage of special products. These include food, agro, and pharma requiring temperature-controlled environment.
  • Container yard and holding bays for loaded trailers with containers/bulk or oversized goods within the bonded secure area. This would facilitate cross-border moves where the parties do not want trucks, but the loaded containers/trailers to cross borders.

8. Joint deployment of regulators and shared facilities: Given the significant quantum of physical infrastructure, equipment, and associated operational and regulatory human resources required for a well-functioning road and rail land border facility, opportunities need to be explored for developing business processes that reduce repetitive activities for regulating human resources, especially customs. Further, customs and other regulatory administrations from both countries at the border can devise protocols that allow joint inspections and scrutiny of documentation.[7] This can be further facilitated by digital integration between customs systems, and protocols for sharing data discussed subsequently.
9. Digital integration and information exchange protocols: A critical trade facilitation measure for customs and other clearances related to the overland movement of goods is the exchange of pre-arrival (i.e., arrival at the land border check post) customs declaration data between neighbouring customs administrations. The receipt of such information a few hours prior to the arrival of a truck or train (empty or carrying goods) at the border allows customs administration to carry out risk assessment and clearance protocols in advance, thereby significantly speeding up the process of actual clearance.
10. Joint Monitoring mechanism and total transit time, time release study, and dwell time: Last but not the least, countries across the corridor should set up a joint monitoring mechanism that regularly tracks the total transit time for cargo across the corridor, joint time release studies for customs processes on both sides of the border to establish total time taken for goods clearance, and release end-to-end at a land-border involving regulators of both countries, and combined dwell time of cargo at both ends of a land-border. To the extent possible, real-time data available from multiple digital sources can be used to measure total transit time, helping to pinpoint specific issues and impediments as they happen (Banerjee, 2020). Joint monitoring and identification of problems will help create a joint sense of purpose and ownership for all countries in the corridor.

Implementation plan for HFTC 

HFTC interventions can be staggered and implemented in phases. A successful HFTC would first require a comprehensive agreement between the countries in the corridor outlining the specific interventions and related protocols associated with different initiatives that both countries would need to implement in each phase. Post this, in-principle commitment to the set of reforms and interventions required to achieve the connectivity and facilitation-related objectives of the HFTC, a time-bound implementation plan needs to be put in place.

In this context, given that India accounts for a bulk of the geography, especially in the BBIN sub-region, the recently launched PM Gati Shakti initiative, which intends to provide seamless multi-modal connectivity across India, including last mile linkages to the major land border gateways, provides a great opportunity for more integrated regional planning and corridor development. There is an urgent need for greater coordination between India’s PM Gati Shakti program, and the infrastructure and economic corridor development programs in Bangladesh and Nepal to start with. Such coordination will provide an overall implementation framework for the expedited development of the physical infrastructure of roads and railways. In combination with the interventions highlighted in this article, this will provide a broad structure for HFTC development.

One way to achieve such coordination on both the infrastructure, as well as the procedural reforms and technology-adoption initiatives, is to set up a working group for HFTC implementation that includes all the key departments and agencies responsible for regulating the flow of goods and conveyances across borders of the countries in the identified corridor. This would include customs, transport authorities, border security agencies, land-port authorities, and agencies enforcing product-related regulations connected to human, animal, and plant health and safety, product standards, and the environment.

The HFTC working group should be made responsible for implementation with deadlines, and employ an SOP for escalation to higher officials if specific challenges to on-ground implementation arise and lead to delays. The progress in implementation being made by the working group should be subject to regular monitoring by the political leadership in the corridor countries to underline their commitment to its achievement. In addition, the BIMSTEC Transport Connectivity Working Group can proactively monitor progress and support the HFTC working group to escalate challenges with governments and their agencies.

The successful development of one such HFTC in Southern Asia will not only act as a catalyst for regional integration and have a multiplier effect on economic growth and employment, but also provide a working model for the development of other HFTCs in the region and beyond, thus bringing transformational change in the way this region manufactures, trades, and does business.

References

Banerjee P. Sengupta, S, and Stobdan P. (2010). Economic growth, exports and the issue of trade facilitation: Integrating East India with Bangladesh and North India with Central Asia. In Barua, A. & Stern, R.M. (eds). The WTO and India: Issues and negotiating strategies (pp.169-195). Hyderabad: Orient BlackSwan

Banerjee, P. (2016, May 25). How to create a united Southern Asia. The Diplomat. Retrieved from https://thediplomat.com/2016/05/how-to-create-a-united-southern-asia/

Banerjee, P. (2016). Operationalizing connectivity and trade facilitation: Role of BBIN Motor Vehicles Agreement. Asian Journal of Transport and Infrastructure,19(2), 72–89.

Banerjee, P. (2017). Development of East Coast economic corridor and Vizag-Chennai industrial corridor: Critical issues of connectivity and logistics (ADB South Asia Working Paper Series, 50). Manila: Asian Development Bank. Retrieved from https://www.adb.org/sites/default/files/publication/225626/sawp-050.pdf.

Banerjee, P. (2020). Transforming logistics performance in BBIN Countries: Towards creating a lasting legacy (CUTS Discussion Paper). Jaipur: CUTS International. Retrieved from https://cuts-citee.org/pdf/discussion-paper-transforming-logistics-performance-in-BBIN-countries.pdf.

Banerjee, P. (2021). Improving land connectivity around the Bay of Bengal is essential for integration (Asia Pacific Bulletin no. 562). Washington D.C.: East West Centre. Retrieved from https://www.eastwestcenter.org/system/tdf/private/apb562.pdf?file=1&type=node&id=40081

Bougheas, S., Demetriades, P.O., & Morgenroth, E.L. (1999). Infrastructure, transport costs and trade. Journal of International Economics, 47(1), 169–189. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S0022199698000087

De, P. (2020). Bay of Bengal integration: The new agenda. In trade and regional integration in South Asia (17–32). Singapore: Springer.

Lakshmanan, T.R., Subramanian, U., Anderson, W.P., & Léautier, F.A. (2001). Integration of transport and trade facilitation: Selected regional case studies. Washington D.C.: The World Bank. Retrieved from https://elibrary.worldbank.org/doi/epdf/10.1596/0-8213-4884-1.

Raihan, S., (2015). South Asian economic union: Challenges and tasks ahead. South Asia Economic Journal, 16(2_suppl), 3S–18S. Retrieved from https://doi.org/10.1177/1391561415594727.

Roy, J, & Banerjee, P. (2010). Connecting South Asia: The centrality of trade facilitation for regional economic integration. In Sadiq Ahmed, Saman Kelegama, & Ejaz Ghani (eds). Promoting economic cooperation in South Asia: Beyond SAFTA (pp 110-138). India: SAGE Publications and World Bank.

The post Conceptualising Highly Facilitated Trade Corridors in Southern Asia first appeared on CSEP.

The COVID-19 pandemic has set off an exhaustive reorganisation of supply chains. The restructuring was precipitated by sourcing dependencies of several major chains (e.g., semiconductors, pharmaceuticals, energy, and food) in a few countries and the functional risks arising from sourcing disruptions in those locations. Anxieties over prominent sourcing hubs ‘weaponizing’ economic influence for extracting geopolitical benefits are also motivating the restructuring. Noteworthy multi-country initiatives for safeguarding strategic supply chains include the Supply Chain Resilience Initiative (SCRI) (Press Information Bureau, 2021) among India, Japan, and Australia and the efforts by the Quad (United States, India, Australia, and Japan) (The White House, 2021). As chains restructure and re-shore, specific regional geographies are poised to emerge as new hubs of supply chains. The Bay of Bengal region is a distinct possibility in this regard. The region’s economic heterogeneity makes it a suitable geography for hosting a variety of supply chains. Much of its success in hosting new supply chains will depend on the degree to which it can accelerate the growth of intra- and extra-regional connectivity, enabling easy movement of goods, capital, technology, and people.

Supply chain restructuring and the Bay of Bengal

The COVID-19 pandemic is the most catastrophic global public health crisis since the Spanish Flu in 1918. It has also been a huge disruptor for supply chains. No other event in the last few decades has drawn as much attention to the vulnerability of supply chains as COVID-19.

Production halts across the world following the pandemic outbreak led to complex and spatially fragmented global supply chains rupturing rapidly. The meltdown began from Wuhan in central China’s Hubei province, the first city in the world to go into lockdown on 23 January 2020 (Illmer, Wang, & Wong, 2021). The closure had a profound impact on global supply chains, several of which were linked to the city. More than 200 Fortune Global 500 firms were present in Wuhan, and more than 100 Fortune 1000 firms had direct Tier 1 suppliers in Wuhan and its neighbourhood (Kilpatrick & Barter, n.d.).

As the lockdown became prolonged, supply chain managers across the world began panicking over dwindling inventories of raw materials and intermediates sourced from China. In India, the biggest concern was over diminishing stocks of drug intermediates and active pharmaceutical ingredients (APIs). Further concerns for India arose over disruptions in imports of coal, fertilisers, electrical machinery, automobile parts and components, and a large number of other essential items.

Geopolitics of sourcing and resilience initiatives

India and several other large economies with significant import dependencies on China, such as Australia, Japan, the United Kingdom, and the United States, were worried about not being able to access essential imports from China. These anxieties underpinned the importance of securing sourcing. This realisation was backed by the worry that countries like China, enjoying near-monopoly prominence as sourcing hubs for critical natural resources, raw materials, and industrial components could, if they wished, exploit their advantage for geo-political ends.

With supply chains getting rocked by sourcing malfunctions and being identified as instruments of geopolitical ‘power’ projection, efforts began for safeguarding sourcing and supplies. Regional efforts to safeguard chains have focused on minimising risks arising from unexpected disruptions from unforeseen events such as the pandemic, or deliberate ‘weaponization’ of the strategic advantage enjoyed by the sourcing locations (Palit, 2022). The major initiatives for reorganising supply chains for making them secure and resilient include the Supply Chain Resilience Initiative (SCRI) between India, Japan, and Australia, and efforts by the Quad (US, India, Australia and Japan).

Bay of Bengal and supply chains in the Indo-Pacific

As supply chains restructure and re-shore, specific regional geographies are poised to emerge as new hubs of supply chains. The Bay of Bengal region is a distinct possibility in this regard.
The Bay of Bengal has an interesting economic geography. In a geographically contiguous sense, it comprises countries on the rim of the Bay of Bengal—India, Bangladesh, Myanmar, Thailand, and Sri Lanka. Formalisation of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC)—the most prominent regional architecture of the Bay of Bengal—has added Nepal and Bhutan to the Bay of Bengal’s core community. The pan-economic understanding of the region, however, stretches well beyond this community.

A maritime vision of the Bay of Bengal drawn from cross-continental passenger and cargo shipping routes links the waters of the Bay of Bengal to the Strait of Malacca and the Pacific Ocean to the east, the Indian Ocean to the south, and the Gulf of Mannar and the Arabian Sea to the west. Moving further west and south-west, the region connects to the Persian Gulf and the African continent.

The maritime perspective of the Bay of Bengal region leaves no doubt that it is a pivotal part of the geo-strategic vision of the ‘Indo-Pacific.’ The Indo-Pacific, as articulated by the former Japanese Prime Minister Shinzo Abe in his address to both Houses of the Indian Parliament on August 22, 2007, is a ‘confluence of the two seas’, the Pacific and the Indian Oceans (Abe, 2007).

As supply chains scramble to reorder within the Indo-Pacific region in the aftermath of COVID-19, they are searching for amenable locations. The Bay of Bengal’s attractiveness in this regard is undisputed.

From a supply chain perspective, the Bay of Bengal’s appeal arises from the significant agglomeration benefits it offers to cross-border back-and-forth movements of goods and people. It connects by water to extensive stretches of maritime traffic across the eastern and western hemispheres. By land too, it connects the East European, Central, West, and South Asian regions to Southeast Asia—through Myanmar and the former French Indo-China group of countries (Cambodia, Laos, and Vietnam)—to the Malaysian peninsula.

Thus, the Bay of Bengal region’s success in emerging as an active hub of supply chains depends crucially upon its connectivity capacities—both within itself and with other regions. Strong and well-managed connectivity can be a true enabler for accommodating a variety of supply chains in the region.

Supply chains and regional connectivity

It is important for the Bay of Bengal economies and the BIMSTEC to comprehend the significance of the economic and strategic prospects for the region that can accrue from its maturing into an energetic hub for supply chains.

Benefits of hosting supply chains

Greater integration of the region with global and regional supply chains would bring it substantial benefits through higher trade in goods and services. More supply chains would result in greater movements of commodities across borders, both intra- and extra-regional, leading to enhanced goods trade. Strong supply chains would also lead to greater movement of business visitors, along with an increase in several cross-border services such as shipping, rail, aviation, finance, education, and retail, leading to a substantial increase in several segments of the services trade.

Growth of supply chains would also facilitate new investments. These investments, apart from their focus on creating new production facilities within the Bay of Bengal economies and thereby generating new jobs and livelihoods, would also flow into infrastructure services for expanding regional connectivity.

A supply-chain focused investment outlook makes prospects of long-term foreign direct investment (FDI) from Japan, Australia, Singapore, the United Arab Emirates (UAE), and the US in regional logistics facilities particularly bright. These countries, which are major capital exporters and core actors in various supply chains, are keen on committing to a new generation of resilient supply chains diversified in sourcing and concentrated in strategic parts of the Indo-Pacific geography like the Bay of Bengal.

Supply chains, logistics and trade facilitation

A supply-chain focused approach will attract extra-regional investments into logistics and augment national logistics capacities of the Bay of Bengal economies, most of which are currently low on global logistics performance indicators. Except Thailand and India, which are ranked 32nd and 44th in the global logistics performance index (LPI) of the World Bank, the remaining BIMSTEC economies are ranked quite low in the LPI (The World Bank, 2018). Low LPI ranks reflect relatively higher costs of cross-border transportation and are obstructive to the growth of a diverse range of supply chains.

The COVID-19 pandemic has emphatically reinforced the role of logistics in safeguarding supply chains. As cracks began surfacing in supply chains due to sourcing problems during the pandemic, businesses and countries realised that the disruptions were not only due to factories closing down; they were significantly attributable to logistics failures as well.

Ports were congested as containers faced long delays in offloading and onloading cargo with the number of on-site staff reducing fast due to rising infections. The same problem hit the invoicing and back-end movement of cargo from various ports to their hinterlands. The problems were greater in ports that were relatively more labour-intensive in on-site functions. Digitized ‘smart’ ports were able to avoid these problems to a large extent. Such ports, however, are rare in the Indo-Pacific region, with the exceptions of Shanghai, Singapore, Busan, and Adelaide.

The emphasis on supply chain resilience in initiatives like the SCRI and Quad focuses strongly on the digitisation of logistics functions. This is just what the Bay of Bengal region needs for drawing investments into new generation logistics facilities enabled by cutting-edge trade facilitation.

Better trade facilitation improves the quality of logistics and brings down the cost of cross-border movement of goods. The emphasis on supply chains will encourage investments in trade facilitation geared towards institutionalising regional best practices.

Extra-regional economies and major stakeholders in the Indo-Pacific such as Japan, Australia, Korea, and Singapore, could be long-term partners for the Bay of Bengal in investing in ‘best practices’ for trade facilitation, like paperless systems for documenting exports and imports. Investments in such ‘smart’ logistics would also contribute to the greater goal of sustainable development.

Supply Chain Resilience and the BIMSTEC Transport Connectivity Master Plan

An important condition for the Bay of Bengal region in increasing its appeal as a location for supply chains is to dovetail its vision of connectivity to that of safeguarding regional supply chains. Unfortunately, till now, the congruence between fostering efficient supply chains and connectivity has hardly been featured in discussions on connectivity within BIMSTEC. This emphasis needs to be promoted urgently for drawing closer the imperatives of supply chain resilience initiatives in the Indo-Pacific with those of connectivity growth in the Bay of Bengal.

How can supply chain resilience projects in the Indo-Pacific, such as the SCRI, be aligned with connectivity initiatives in the Bay of Bengal? The obvious solution is to do so through the transport connectivity master plan of the BIMSTEC, developed in collaboration with the Asian Development Bank (ADB, 2022).

The transport connectivity master plan, approved at the last BIMSTEC summit held in Colombo during March 30-31, 2022, has several projects that can contribute to the goal of making supply chains resilient, thereby serving both the objectives of securing supply chains and expanding regional connectivity. Indeed, a robust regional transport infrastructure, as envisioned in the master plan, would be of great help in making supply chains secure by minimising disruptions in the movement of products through various trade routes, both intra-region as well as those between the region and the rest of the world.

Supply chains and connectivity: The policy agenda

Safeguarding supply chains requires intra- and extra-regional cooperation, and addressing trade facilitation issues in various segments of multi-modal connectivity. This cannot be achieved without scaling up the perspective and vision on regional connectivity from a limited view of land and maritime links within the BIMSTEC to one where various transport and systemic connections link businesses and customers seamlessly between the BIMSTEC and extra-regional Indo-Pacific economies.

A comprehensive set of policies is required for a regional connectivity agenda that would create enabling conditions for safeguarding supply chains and encourage their positioning in the Bay of Bengal region. Some of the key elements of the policy agenda are as follows:

1. BIMSTEC members should commence Track 1.5/ Track 2 dialogues with extra-regional member economies—Japan, Australia, Singapore, Korea, Vietnam—that have commendable records of trade facilitation in regional connectivity and major presence in regional supply chains. The dialogues should focus on ‘learning’ of best practices in cross-border supply chain management.
2. BIMSTEC, in consultation with major regional economies engaged in supply chains, should identify industries whose supply chains have strong prospects in the region. It would be sensible to identify a priority group of industries for maximising trade facilitation and connectivity efforts. India, Thailand, and Bangladesh should take the lead in identifying industries.
3. India is part of the SCRI initiative. As the largest BIMSTEC member and a key stakeholder of SCRI, it must work on exploiting the synergies between SCRI and the BIMSTEC transport connectivity master plan.
4. The Advanced Logistics Project (REG-TF-029)1 in the BIMSTEC Transport Connectivity Master Plan—a regional flagship project—can become a part of SCRI. The project resonates with the SCRI’s intent to ‘facilitate joint projects for supply chain resilience’ and ‘promote supply chain principles in the region’ (Joint Statement on the Supply Chain Resilience Initiative by Australian, Indian and Japanese Trade Ministers, 2022).
5. The Advanced Logistics Project was to be implemented from 2019–2023. However, it is yet to find funders. A close engagement between key investment promotion agencies such as Austrade, Invest India, and JETRO, can help in identifying funders. Funding opportunities can also be identified through the Bay of Bengal connectivity partnership between Australia and India, being implemented through the Australia-India Infrastructure Forum (Minister of Foreign Affairs, 2022).
6. India should work with other Bay of Bengal economies to extend its initiative of digitisation of bills of lading and trade documents (e.g., e-delivery orders, e-certificates of origin, letters of credit) across the region. The trade facilitation has been enabled through a blockchain platform and is currently operational at 19 ports connecting more than 16,000 corporate stakeholders (The Maritime Executive, 2020). Prospects of supply chains in the region would greatly expand if other BIMSTEC members adopt the practice.

The biggest challenge that BIMSTEC and the Bay of Bengal community must overcome is the sluggishness that has historically characterised policy implementation in the region. A weak BIMSTEC secretariat with limited capacity for steering connectivity projects is a hindrance to progress, as is a lack of focused discussion and understanding of supply chain management issues within the grouping. Summoning the necessary energy for expediting a policy agenda addressing the twin needs of supply chain management and connectivity won’t be easy. A lot will depend on the proactive role played by the leading BIMSTEC members, India and Thailand, and extra-regional actors like Japan and Australia, in committing to the policy agenda.

References:

Kilpatrick, J. & Barter, L. (n.d.). COVID-19: Managing supply chain risk & disruption. Delloite. Retrieved from https://www2.deloitte.com/content/dam/Deloitte/ie/Documents/Risk/COVID19-Managing-Supply-Chain-Risk-and-Disruption.pdf

Palit, A. (2022). The Geopolitical imperative for reorganising global supply chains (ORF Issue Brief No. 533). Observer Research Foundation. Retrieved from https://www.orfonline.org/wp-content/uploads/2022/04/The-Geopolitical-Imperative-for-Reorganising-Global-Supply-Chains.pdf .

Abe, S. (2007). “Confluence of the two seas” speech by H.E.Mr. Shinzo Abe, Prime Minister of Japan at the parliament of the Republic of India [Speech transcript]. Ministry of Foreign Affairs of Japan. Retrieved from https://www.mofa.go.jp/region/asia-paci/pmv0708/speech-2.html .

Asian Development Bank. (2022). BIMSTEC masterplan for transport connectivity. Manila & Dhaka: Asian Development Bank and BIMSTEC. Retrieved from https://www.adb.org/sites/default/files/institutional-document/740916/bimstec-master-plan-transport-connectivity.pdf .

Joint Statement on the Supply Chain Resilience Initiative by Australian, Indian and Japanese Trade Ministers. (2022, March 15) [Press Release]. Ministry of Economy, Trade and Industry of Japan. Retrieved from https://www.meti.go.jp/press/2021/03/20220315008/20220315008-1.pdf .

The Maritime Executive. (2020, June 11). India launches digitization of the bill of landing and trade documents. The Maritime Executive. Retrieved from
https://www.maritime-executive.com/article/india-launches-digitization-of-the-bill-of-lading-and-trade-documents.

The World Bank. (2018). International LPI global rankings 2018 [Interactive Map]. Retrieved from https://lpi.worldbank.org/international/global .

Illmer, A., Wang Y., & Wong, T. (2021, January 22). Wuhan lockdown: A year of China’s fight against the Covid pandemic. BBC News. Retrieved from https://www.bbc.com/news/world-asia-china-55628488 .

Press Information Bureau Delhi. (2021, April 27). Australia-India-Japan Trade Ministers’ Joint Statement on Launch of Supply Chain Resilience Initiative [Press Release]. Retrieved from https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1714362 .

The White House. (2021, September 24). Fact Sheet: Quad Leaders’ Summit [Press Release]. Retrieved from https://www.whitehouse.gov/briefing-room/statements-releases/2021/09/24/fact-sheet-quad-leaders-summit/#:~:text=Launch%20a%20Semiconductor%20Supply%20Chain,semiconductors%20and%20their%20vital%20components

Minister of Foreign Affairs. (2022, February 14). Strengthening out ties with India [Press Release]. Retrieved from https://www.foreignminister.gov.au/minister/marise-payne/media-release/strengthening-our-ties-india .

The post Can the Bay of Bengal be a New Hub for Regional Supply Chains? first appeared on CSEP.

Despite being at the heart of what is now called the Indo-Pacific region, the Bay of Bengal has long been more of a geo-economic divider than a link between the Indian subcontinent and Southeast Asia. From India and Sri Lanka to Indonesia’s Sumatra and from the Ganges and Irrawaddy deltas to the Andaman and Nicobar Islands, this is a geography marked by abysmal levels of connectivity, missed economic opportunities, and rising security risks. This introduction addresses the sources of these gaps, identifies solutions to mitigate challenges and proposes ways to cooperatively enhance connectivity in the Bay of Bengal region.

In its most narrow scientific definition, the Bay of Bengal includes the littoral states of Sri Lanka, India, Bangladesh, Myanmar, Thailand, and Indonesia. Yet in a wider environmental and economic sense, any development in the Bay of Bengal is also intertwined with the destinies of the Himalayan states of Nepal and Bhutan, the Maldivian archipelago and the Malacca Strait’s funnel state of Malaysia. Over two billion people live in and around this region which has recently seen unprecedented economic growth but also persistent challenges to sustainable development, including devastating cyclones and military conflicts.

From the broadest geostrategic lens, the Bay of Bengal is also a constituent of the Eastern Indian Ocean which connects to the Pacific Ocean via the neighbouring South China Sea and the twelve seas and two gulfs of the East Indian Archipelago, mostly part of Indonesian waters. This wider space is assuming increasing centrality as the world’s demographic and geo-economic weight shifts to the East, predominantly shaped by the economic and security interests of India, China, Japan, and other Asian actors but also those of other extra-regional actors, including the United States, Europe, Russia, and Australia.

Reviving connectivity: Opportunities and risks

The Bay of Bengal was once one of the most connected, integrated regions of the world, featuring an enviable density of interactions and exchanges. Until the mid-20th century, it was the hub of a thriving Indian Ocean region, knit together through dense economic, social, and political interdependencies (Amrith, 2015). The Bay of Bengal was then a pivotal part of global supply chains, a period when the prosperity of a South-eastern Indian city like Madras was deeply tied dependent on that of its intra-regional peers such as Calcutta or Rangoon. The Bay of Bengal was then a region in its own right, featuring high levels of intra-regional connectivity, as well as inter-regional connectivity with the rest of the Indian Ocean and Asia. This economic centrality naturally found geopolitical expression in the visions of “one Asia” that drove the developmental and foreign policy visions of regional leaders like Nehru in the 1950s (Singh, 2011). Of the five co-sponsors of the Bandung Conference, four were leaders of Bay of Bengal countries: Jawaharlal Nehru (India), Sukarno (Indonesia), U Nu (Burma), and John Kotelawala (Ceylon).

Today, however, the contrasting reality is rather different and grim. Whether it is trade or transportation, people-to-people exchanges, or cooperative institutions and frameworks, the Bay of Bengal continues to feature deep divides and formidable barriers. From New Delhi, it is often still faster and cheaper to ship a container all the way to Singapore than to the geographically closer cities of Dhaka or Yangon. While one of South Asia’s once busiest railway routes (Kolkata-Dhaka) was restarted in 2008, after 43 years, dozens of links between India and Bangladesh remain inactive (Xavier, 2018).

The same barriers are also apparent in today’s limited air connectivity, contrasting with the 1970s when the Northern Sri Lankan city of Jaffna had direct flight connections to several South Indian cities and one could also fly from Burma’s Sittwe across to Chittagong, in Southern Bangladesh. Human mobility poses a further challenge to intra-regional connectivity: for example, it is easier for a citizen of China to get visas for countries in the Bay of Bengal region than for most people from within the region to cross borders to visit the neighbouring country (Xavier & Sinha, 2020). By most definitions of integration and criteria of connectivity, the last few decades have eroded the reality of the Bay of Bengal as a distinct region.

These barriers to mobility reflect almost half a century of economic and strategic divergence between the states of the Bay of Bengal, from the late 1950s until the 1990s. For decades, India found refuge in the comfort of economic insulation and subcontinental isolation, drifting apart from the rest of Asia. The Western and security-oriented focus on Pakistan also led India to neglect its eastern borderlands, including the landlocked North-eastern states. During much of the late Cold War period, after the 1970s, India perceived the Bay of Bengal as a buffer region separating the subcontinent from the US-centric security alliances and increasingly China-centric economic developments to the east, in Indochina and Southeast Asia. The idea of regional cooperation and integration in South Asia, which made a belated institutional appearance in the 1980s in the form of the South Asian Association for Regional Cooperation (SAARC), was thus naturally a controlled experiment limited to the Indian subcontinent.

India’s economic opening after 1991 was the precondition for change, leading New Delhi to adopt the Look East policy and a variety of new sectoral, dialogue, and summit partnerships with the Association of Southeast Asian Nations (ASEAN). The most visible expression of this economic reorientation towards the Bay of Bengal came with the formation of Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) in 1997. Founded in Bangkok and initially premised as a sub-regional initiative, BIMSTEC was more of an inter-regional initiative, seeking to transform the Bay of Bengal into a bridge between the two geo-economic poles of South and Southeast Asia. On the other hand, in tandem with a strong economic embrace of China, Myanmar’s entry into ASEAN in 1997 reflected the military regime’s priority towards Southeast Asia. BIMSTEC was meant to balance that with a Westwards focus to the subcontinent, but this met with limited success.

Twenty five years later, the idea of a connected and cooperative Bay of Bengal as a pivot between South and Southeast Asia remains to be fulfilled. As a regional organization, BIMSTEC remains weak, understaffed and unable to deliver on the promise of a free trade agreement that all members committed to back in 2004. And despite cyclical military rule and political strife, Myanmar’s economic and strategic outlook has determinedly shifted eastwards, towards the East Asian growth engines and the Southeast Asian regional integration process.

While progress since the late 1990s has thus been limited, there are a few positive trends emerging with the promise to correct the Bay of Bengal’s connectivity gap. The last few years have seen a flurry of new initiatives. They are creating new interdependencies and throwing up opportunities to accelerate integration but, at the same time, they are also increasing new tensions and risks. Witnessing a moment of convergence, driven by economic and geostrategic interests, the region’s states and other stakeholders are finding ways to enhance interdependence (CUTS International, 2019).

For instance, regional transport infrastructure is witnessing rapid development, with a record number of new deep sea ports being planned or established along the littoral, including in India (Paradip and Kamarajar), Sri Lanka (Hambantota, Colombo), Bangladesh (Matarbari), Myanmar (Sittwe, Kyaukphyu, Dawei), Thailand (Ranong) and Indonesia (Sabang). States are also investing in new road, rail and air linkages with their neighbours, including under the Asian Development Bank’s initiative for South Asia Subregional Economic Cooperation (SASEC). The region’s large consumer markets and consistent growth rates, most notably in India and Bangladesh, are driving new demands to link up the Bay of Bengal through new supply chains with Southeast and East Asia. This positive trend towards connectivity is bringing countries closer together, but it also brings up the challenge of coordination to explore these opportunities and expand cooperation. The consequent policy paradox is clear: while the Bay of Bengal is seeing rising levels of physical infrastructure connectivity, this has not been commensurately matched by new cooperative habits. There is a manifest lack of cooperative mechanisms to manage and sustain regional connectivity.

While the deficit of such collective governance instruments may decrease developmental benefits, growing regional interdependencies also generate risks and costs that are less visible. This is a negative side-effect of growing connectivity that is often neglected but warrants urgent attention. New areas of friction and tension are emerging as the Bay of Bengal shrinks as a geo-economic, cultural, and political space. Competition and conflict over resources will pose an added burden if not addressed jointly. The rising complexity and disruptive effects of such transnational challenges require cooperative solutions.

Climate change is having a disproportionate destabilizing impact on the region, affecting weather patterns, forcing population displacement and aggravating the destructive impact of cyclones. Political conflicts have generated refugee waves, as most recently seen with the Rohingyas from Myanmar to Bangladesh. The lack of coordinated action between different naval forces and coast guards continues to enable various transnational criminal networks to operate across the Bay of Bengal, from illegal fishing to the trafficking of people, narcotics, and weapons (Stable Seas, 2020). The gap between rising connectivity initiatives and absent cooperation habits risks slowing down the developmental convergence for the entire region, with negative consequences for the rest of Asia.

This report addresses these two contrasting facets of growing interdependence in the Bay of Bengal region. It reviews both the positive (opportunity) and negative (risk) dimensions of rising connectivity and suggests ways to address them cooperatively, between different states and institutions that shape the region’s rapidly changing reality.

Proliferation of connectivity initiatives

Reducing the connectivity-cooperation gap in the Bay of Bengal is particularly urgent now that the region is becoming the site of growing global attention and competition. The proliferation of connectivity initiatives risks turning into a policy burden for countries whose state capacity remains limited and increasingly exposed to external pressures. Sri Lanka’s systemic collapse in 2022 serves as an apt reminder of how perennial state fragility poses a major threat for countries navigating the turbulent regional context, including rising expectations demanding difficult strategic choices. Other countries in the Bay of Bengal region, including Myanmar and Bangladesh, are among Asia’s worst performers on economic, political or security resilience, with frail governance frameworks (OECD, 2022).

This institutional fragility is particularly challenging as countries in the region are witnessing a rapid change, moving from the past problem of scarcity to a new problem of plenty: Which of the many connectivity initiatives to engage, and with what priority and on what terms? How to scrutinize, implement, and sustain infrastructure projects with external assistance even while not falling into a debt trap or other forms of dependency that impinge on sovereignty? How to coordinate across different, often also competing bilateral, regional, and multilateral connectivity initiatives?

First, at the country- and bilateral level, there is a flurry of new initiatives, including the India-Bangladesh connectivity partnership, or the modernization of Sri Lanka’s port sector. India, Bangladesh, and Thailand have all realized the importance of interdependence, devoting growing priority and resources to foster regionalism. New Delhi has reoriented its Neighbourhood First policy eastwards, manifest in its developmental focus on the Northeast region, as well as new lines of credit and other economic instruments to support Bangladesh, Myanmar, and Sri Lanka.

The landlocked Himalayan states of Nepal and Bhutan have prioritized energy and transportation links with the Bay of Bengal littoral to stimulate exports and access the ASEAN markets. Despite the coup in 2021, Myanmar’s military regime has continued to push for more connectivity projects with India, including the India-Myanmar-Thailand highway or the Kaladan multi-modal project. And Thailand is betting on a land bridge and a new deep sea port on the Andaman Sea to foster trade opportunities between Southeast Asia and the Indian subcontinent.

Second, at the regional level, there are also several new developments, including the revitalization of BIMSTEC and its growing focus on regional connectivity since 2016. The organization has streamlined and reduced the number of its focus areas from 14 to 7, adopted a new charter and held more regular summits, and adopted a more realistic and practical agenda of cooperation. The 2022 BIMSTEC Masterplan for Transport Connectivity reflects the regional focus on the fundamentals of upgrading physical infrastructure before seeking to reach higher hanging fruits such as a free trade agreement. BIMSTEC has also been making progress on developing a sub-regional power grid and it has served as an important socialization platform for officials from across the region to share best practices and institutional expertise on a wide range of sectors, from disaster management to tourism and cybersecurity.

Third, and most importantly, there is a new extra-regional dimension to connectivity in the Bay of Bengal. Following their economic opening, countries have diversified their trade baskets and investment partnerships. Their growing consumer markets are attracting a variety of global stakeholders. And the rise of Sino-American tensions in Asia has increased the Bay of Bengal’s strategic importance, as a site for economic power projection and strategic influence (Raja Mohan, 2020). Such centrality was last seen during World War II, albeit then with a military focus and largely destructive effects. Today, the Bay of Bengal is the object of growing economic attention, but that will only translate into beneficial impact if states in the region are able to make informed, independent, and strategic choices.

China’s Belt and Road Initiative had the most important extra-regional role in spurring the agenda of growth and connectivity in the Bay of Bengal. Driven by massive investments in new trade and infrastructure initiatives that connect China’s hinterland to the Eastern Indian Ocean, Beijing has persistently delivered where many others had failed in the past. Wherever China found obstacles to connect with the Bay of Bengal, for example via an economic corridor from Yunnan to Bangladesh via Myanmar and India (the BCIM corridor), it developed alternatives, especially by bypassing India. The record is mixed, as apparent in the ongoing debate about the causes of Sri Lanka’s debt, but it is now clear the BRI played a catalyst role in accelerating connectivity in the Bay of Bengal.

This encouraged several other extra-regional players to deepen their own engagement. Japan has been pushing its vision of a Free and Open Indo-Pacific through an emphasis on what it calls “quality infrastructure.” With Bangladesh and like-minded partners, Tokyo has pursued the vision of BIG-B (The Bay of Bengal Industrial Growth Belt), which is being implemented since 2014 with support from Japan International Cooperation Agency (JICA) and The Japan Bank for International Cooperation (JBIC). Japanese investments in the transportation sector span the entire Bay of Bengal littoral, including the construction of the first deep sea port at Matarbari, in Bangladesh, and various economic initiatives to enhance connectivity through new supply chains between India, Bangladesh, and the Southeast and East Asian manufacturing hubs.

Tokyo has also coordinated its Bay of Bengal engagement with India, Australia, and the United States. The Quad has featured exercises on humanitarian assistance and disaster relief in the Eastern Indian Ocean, as well as discussions on infrastructure financing and supply chains. The United States has also been deepening its engagement with the Bay of Bengal, most notably through new USAID-financed development and connectivity initiatives focused on Bangladesh, Sri Lanka, and Thailand.

The region’s new geostrategic and economic importance has also attracted the attention of other, traditionally less visible actors. In 2022, Australia announced a new financial programme to foster connectivity in the Eastern Indian Ocean focused on maritime shipping, disaster resilience, and information sharing. And guided by the European Union’s new Indo-Pacific strategy, the European Investment Bank is also now on the lookout for strategically salient projects in the region, mostly focused on Bangladesh and the Bangladesh, Bhutan, India, Nepal (BBIN) sub-region.

All these new, extra-regional and bilateral connectivity engagements are developing in parallel to similar efforts by international financial institutions and multilateral groupings. The Asian Development Bank has played a pioneering role with the SASEC initiative, since 2001. The World Bank, traditionally focused on encouraging South Asia’s Western connectivity initiatives between India and Pakistan, has also been redirecting its efforts eastwards. And most recently, the Asian Infrastructure Investment Bank (AIIB) has also entered the Bay of Bengal race to connect South and Southeast Asia.

Lagging capacity and cooperation

The recent financial collapse of Sri Lanka does not augur well for other states in the region seeking to navigate this increasingly competitive context of contending connectivity initiatives. A more crowded region with competitive connectivity pressures from extra-regional powers will further stress state capacity and institutional resilience to make and enforce strategic choices for sustainable development.

As with the resource curse for many African countries in the past, which stifled their developmental prospects after the focus on oil and other natural resources, states in the Bay of Bengal risk turning into the victims of an analogous connectivity curse. Burdened by external pressures to align with one or the other connectivity initiative, states have often succumbed to policy paralysis or top-down, short-sighted political decisions. Lack of technical expertise and eroding institutional and technocratic autonomy have all led to missed opportunities and new risks, exposing the region’s systemic frailties.

With rising competition between different connectivity initiatives, especially between China and the Indo-Pacific powers, there are growing concerns about conflict over natural resources, securitization of sea lines of communication, and environmental sustainability. These Bay of Bengal commons now risk being depleted or fragmented, reducing the prospects of stability and welfare in the region.

Connectivity will not have the desired developmental and stabilizing effects in the Bay of Bengal unless there are commensurate cooperative and coordination mechanisms between different states and extra-regional stakeholders. Yet this gap is growing by the day, leaving the regional commons unregulated and ungoverned.

Habits of cooperation remain largely absent from this region, creating a vacuum for competition and growing unilateral behaviour. Institutionally, organizations like BIMSTEC remain weak and under-resourced to address these transnational challenges. From India and Sri Lanka up to Thailand and Indonesia, the maritime space of the Bay of Bengal and Eastern Indian Ocean continues to lack basic governance mechanisms. Whether to regulate fishing and shipping, to respond to non-traditional security challenges such as refugee flows or natural disasters, or to coordinate infrastructure financing in ports or underwater sea cables, the cooperation deficit is rising.

Geography, infrastructure and the regional commons

This report is the outcome of a two-year-long research project under the Sambandh Initiative of Regional Connectivity at the Centre for Social and Economic Progress in New Delhi. The main objective was to generate actionable policy recommendations, based on evidence-based research, to bridge the Bay of Bengals’ connectivity gap in different sectors through cooperative mechanisms. By engaging experts principally located in this region through research workshops and policy dialogues, the project also aimed at building capacity and habits of collaboration between scholars in South and Southeast Asia.

We asked contributing experts to focus on one sectoral issue in the Bay of Bengal region that reflects a cooperation deficit. Each brief thus focuses on three dimensions—1) identify a specific, sectoral connectivity and cooperation gap in the region and describe its implications for the region; 2) set a policy target or objective within a specific time horizon to correct this cooperative deficit; and 3) recommend a policy path with actionable steps towards achieving that objective. We organized the nine papers in three clusters: leveraging geographic location, building transportation and regulatory infrastructure, and managing the region’s non-traditional commons.

The first set of three papers explores ways for the Bay of Bengal to reclaim its past centrality by leveraging its geography. First, at the broadest level, how can the region play a more prominent role in a rapidly changing global context? Chapter 2 by Amitendu Palit offers a macro picture, situating the Bay of Bengal in an increasingly competitive geo-economic environment. He argues that the Bay of Bengal could a) emerge as a new regional hub for global supply chains that are in the process of restructuring and reshoring; b) that the regional organization BIMSTEC should play a central role in anchoring these new regional supply chains; and c) that their implementation should rely on significant investment from global financing partnerships, including from India, Japan, and Australia.

Second, how can the Bay of Bengal region correct its internal connectivity gaps? Rather than an impediment, can its geographic diversity be transformed into strength? Chapter 3 by Pritam Banerjee focuses on this intra-regional dimension, arguing that the Bay of Bengal requires a collaborative approach between border, transport, and regulatory operations to link up the hinterland’s economic clusters to the coastal areas and Indian Ocean’s sea lines of communication. Banerjee recommends the establishment of Highly Facilitated Trade Corridors to bridge this gap, with a strategic and holistic approach to multi-modal transportation and communication.

A third, an even closer geographic lens shows that the Bay of Bengal is also composed of multiple sub-regions. Such clusters offer distinct comparative advantages but their political economies often also transcend political borders. In Chapter 4, Shahidul Haque focuses on the most significant case of the BBIN sub-region, with special emphasis on India’s North-eastern states. Haque explains why it is in Bangladesh’s developmental interest to leverage its location as a maritime link to these landlocked areas and proposes policies to enhance such sub-regional connectivity between East South Asia and the wider Indo-Pacific.

The report’s second section then moves on to the critical challenge of building truly transnational and regional infrastructure to correct the inter-country connectivity gaps. This requires a dual focus on “hard” or physical infrastructure—from ports to roads, rail and digital—as well as on the “soft” or regulatory infrastructure, including joint standards and the digital realm. Free trade agreements, for example, have proven largely futile when not matched by improvements in trade facilitation, especially through transportation, logistics, and regulatory cooperation. Building the Bay of Bengal’s infrastructure is thus a fundamental precondition to lock in patterns of interdependence and integration.

Chapter 5 by Riya Sinha and Chapter 6 by Chathumi Kavirathna focus on the “hard” dimensions of railways and ports, respectively. Kavirathna makes the economic case for more strategizing and cooperation on developing trans-shipment hubs in the Bay of Bengal. Amidst rising competition between major ports, her case studies suggest that there is significant potential to develop a hub and spoke system with smaller ports and coastal shipping feeding into global maritime routes.

Sinha, on the other hand, argues in chapter 5 that the region’s developmental ambitions, including through export-oriented manufacturing hubs, will also rely on a rail route to the Southeast Asian markets and beyond. Railways are the last, missing transportation link to connect South and Southeast Asia over land. While the India-Myanmar-Thailand Highway (IMT) is making slow but steady progress, Riya Sinha shows that it must be complemented with a railway link, especially for India and Bangladesh to truly act East.

Chapter 7 by Subhashini Abeysinghe and Hasna Munas focuses on the “soft” dimension of connectivity infrastructure. They show how rather than large and complex tariff-focused agreements, small and targeted policy initiatives can work wonders to enhance economic interdependence in the Bay of Bengal region. Their case study on processed food exports from Sri Lanka to India examines the benefits of mutual recognition agreements in testing and standards and argues for replicability between other Bay of Bengal countries.

The report’s third section focuses on ways for states along the Bay of Bengal to cooperatively manage the regional commons. Connectivity initiatives cannot be thought of in a vacuum, divorced from political ground realities and the security environment. The governance deficit is large in the region, marked by a myriad of active conflicts, latent civil wars, and cyclical humanitarian and environmental crises. The Rohingya refugee crises have made this apparent in recent years, stalling several important land connectivity projects. While connectivity and interdependence are often seen as enhancing the prospects for inter-state peace and cooperation, the opposite also applies: connectivity projects will not progress unless there is political stability and popular support on the ground.

Chapter 8 by Collin Koh Swee Lean examines the maritime space of the Bay of Bengal as a regional common that requires more cooperative approaches, especially in the Andaman Sea. He proposes better maritime domain awareness and information-sharing mechanisms to address irregular human migration and illicit drug trade. Beyond a sum of bilateral initiatives, he also emphasizes the need to improve upon existing regional initiatives such as the Bali Process and BIMSTEC.

Chapter 9 by Bhanubhatra Jittiang lays out the growing systemic failures in the region and how a “complex emergency” exposes regional governance deficits to address social, economic, and political turbulence. He argues that states in the Bay of Bengal region should recognize the limitations of non-interference and their adamant adherence to the national security agenda and instead adopt new cooperative principles like ASEAN’s “flexible engagement.”

Finally, chapter 10 by Aaron Savio Lobo takes on an “aquascape” approach that looks at the Bay of Bengal from a natural resources angle, with a focus on its waters as an environmental common. He cautions that states are competing to safeguard their dwindling fish stocks, leading to a blind competition that impedes the sustainable management of blue foods. Lobo proposes a multi-level, coordinated governance approach at the local, national and regional levels to manage the Bay of Bengal marine ecosystem that considers the entire watershed from the Himalayan mountains to the Indian Ocean.

Policy parameters to foster cooperation

From leveraging geography to building the infrastructure and managing the commons, the nine papers in this report contain valuable and practical recommendations to bridge the gap between growing connectivity and lagging cooperation in the Bay of Bengal region. While they address different sectors and geographies, there are five lines of continuity that stand out in these contributions.

First, all papers alert to the rising costs of non-cooperation between different states and other stakeholders in the region. The failure to collectively address the region’s transnational policy challenges represents a growing loss of welfare. The European Union, for example, regularly estimates the quantitative “cost of non-Europe” in different sectors, from the single market, to energy, environment, or justice (Mayer, Vicard, & Zignago, 2019). In the Bay of Bengal, these costs are even more significant. While the much wealthier EU member-states may be willing to absorb the costs of non-cooperation or integration for political reasons, in a least-developed region like the Bay of Bengal this an unsustainable proposition. Whether it is on trade, climate or mobility, lack of cooperative habits will stifle development and, in some cases, also increase the risks of conflict with severe repercussions for regional stability.

Second, the papers also refer to the changing global context, marked by an economic slowdown and growing geostrategic competition. The pandemic and the Russia-Ukraine war have hit developing countries in the Bay of Bengal particularly hard, as manifested in the Sri Lanka crisis, and mounting economic stress in Bangladesh and Nepal. The economic slowdown will continue to have political implications across the region, with inflationary pressures, growing inequality, social discontent and governance instability that deter much-needed external financing.

Geostrategic competition is also expected to accelerate in the region. China’s subdued response to Sri Lanka’s financial collapse has left many wondering to what extent Beijing is either unable or unwilling to support developing countries in hard times such as these. This has also generated much introspection on whether countries in this region are sufficiently equipped to manage external offers, expectations, and pressures. If one looks, for example, at professional debt management as a critical indicator of state capacity, the panorama in the Bay of Bengal region looks rather bleak. Extra-regional actors will have to consider the decreasing marginal utility of more financing for big-ticket infrastructure projects and how to shift resources to the increasing need to build institutional capacity and resilience through technical assistance.

Third, several contributions refer to the neglected normative dimension of connectivity. Trade and infrastructure are often described as neutral elements that are fungible, developed in an ideological vacuum. In fact, however, even physical infrastructure is developed in a deeply political context that varies according to regime type: building a bridge either in China or in Bangladesh is a fundamentally different exercise that is shaped by contrasting governance realities and political principles.

Setting standards and reforming regulatory contexts are processes that require states to make informed choices, for example on the degree of accountability and transparency during environmental and social assessments of infrastructure connectivity projects. In line with the Sustainable Development Goal principle 16 on peace, justice and strong institutions, the Bay of Bengal states will have to find ways to ensure that connectivity initiatives are developed through decision-making that is responsive, inclusive, participatory and representative at all levels (United Nations, 2022).

Fourth, many of the recommendations in these papers also stress the importance of regional institutions to foster connectivity in the Bay of Bengal. While bilateral initiatives may be tempting for they often offer quick solutions, they are not always perfect substitutes for minilateral or multilateral settings. The sum of several bilateral relations does not amount to a multilateral process. Almost all contributions stress the importance to strengthen formal top-down organizational initiatives like BIMSTEC or more flexible cooperative platforms like BBIN.

There are also recommendations for the Bay of Bengal states to adopt and adapt different cooperation mechanisms from the far more advanced ASEAN framework. Especially in larger countries like India, policy-makers will naturally be inclined to follow the more expedient bilateral route, but there will also be occasions where they must adopt a longer horizon to realize more sustainable, inclusive connectivity initiatives through larger, regional cooperation frameworks.

The exact modalities of cooperation depend on the issue area and actors involved. In some cases, cooperation can start with the low-hanging fruit of bilateral agreements that can be replicated in succession. In other cases, cooperation can be fleshed out as flexible minilateral initiatives, focused on consultations and coordination in a specific sector, without formal agreements. This is the case of the BBIN initiative on water or transportation connectivity. Finally, at the highest level, cooperation in the Bay of Bengal can assume an institutionalized and multilateral form, such as through BIMSTEC or other regional organizations.

Fifth and finally, the nine contributions also reflect the reality of an increasingly open, inclusive Bay of Bengal. As with the outdated xenophobic mantra of “Asia for Asians,” which even China has begun to abandon, there is no value to insist on keeping the Bay of Bengal closed to extra-regional, global influences. Historically at the cross-roads of different economic, social and political currents, the region will only develop and thrive if it returns to its role as a connector with adjacent regions and the rest of the world.

This condition of geo-economic and strategic openness was presciently noted by Bangladesh’s Prime Minister Sheikh Hasina back in 2011: “the South Asia of the future has to be a region connected by physical linkages as well as through ideas, individuals and initiatives within and beyond South Asia.” (Bangladesh Ministry of Foreign Affairs, 2019, emphasis added). The same holds true today for the Bay of Bengal: deeper connectivity within the region will require more cooperation beyond the region.

References:

Amrith, S. S. (2015). Crossing the Bay of Bengal: The furies of nature and the fortunes of migrants. Cambridge, Massachusetts: Harvard University Press.

CUTS International. (2019). Bridging the East: Trade and Transport Connectivity in the Bay of Bengal Region. Retrieved from
https://www.cuts-international.org/bbinmva/pdf/Project_Report_on_Bridging_the_EastTrade_and_Transport_Connectivity_in_the_Bay_of_Bengal_Region.pdf

Mayer, T., Vicard, V., & Zignago, S.: The cost of non-Europe, revisited. Economic Policy, 34(98), 145–199.

Bangladesh Ministry of Foreign Affairs (2019). Selected Speeches of Prime Minister Sheikh Hasina during official visits.
https://mofa.gov.bd/sites/default/files/files/mofa.portal.gov.bd/publications/32c5e7ea_bdcd_4b42_ac9c_e93789035ab4/Select%20Speeches%20of.pdf

OECD (2022), States of Fragility 2022, OECD Publishing, Paris. Retrieved from https://doi.org/10.1787/c7fedf5e-en

Raja Mohan, C. (2020). The Bay of Bengal in the Emerging Indo-Pacific. ORF Issue Brief No. 416, Observer Research Foundation. Retrieved from https://www.orfonline.org/research/the-bay-of-bengal-in-the-emerging-indo-pacific/

Singh, S. (2011). From Delhi to Bandung: Nehru, ‘Indian-ness’ and ‘Pan-Asian-ness’. South Asia: Journal of South Asian Studies, 34(1), 51–64.

Stable Seas. (2020). Bay of Bengal. Retrieved from https://www.stableseas.org/post/stable-seas-bay-of-bengal

United Nations. (2022). The Sustainable Development Goals Report. Retrieved from https://www.un.org/sustainabledevelopment/peace-justice/

Xavier, C. (2018). Reactivating a legacy of integration through BIMSTEC. Seminar 703, Retrieved from https://www.india-seminar.com/2018/703/703_constantino_xavier.htm

Xavier, C. & Sinha, R. (2020). Regional connectivity and India’s BIMSTEC policy. National Security, 3(1), 34–51. Retrieved from https://www.vifindia.org/sites/default/files/national-security-vol-3-issue-1-article-CXRS.pdf

The post Introduction: Fostering Cooperation to Connect the Bay of Bengal Region first appeared on CSEP.

Then why is this one of the least integrated sub-regions of the world today in terms of formal trade
and investment within itself and with the rest of the world?

Part of the answer lies in the modern attempt to create nation-states in the plural and open
geography of maritime southern Asia. Intrinsic to the modern nation-state has been the creation of
hard borders and unitary loyalties, with contested citizenship and imagined identities cutting across
the patterns of history and geography. It has taken technology and globalisation, and the growth
of trans-boundary value and supply chains to bring attention back to the benefits to our people of
connectivity and cooperation across the Bay of Bengal region.

The tension, however, remains between the economic and welfare logic of connectivity and the
contradictory pulls of political nationalism and identity politics, as is evident from the Rohingya
refugee crisis. Reading this volume suggests that one possible way to deal with the tension between
the demands of domestic politics in some littoral states and the economic logic presented here
might be to take discrete steps among those who are willing and able to provide public goods such
as maritime security, and in other aspects of managing and securing the commons. That is probably
a work for the future.

For the present we have here a volume that makes the argument, based on solid academic scholarship, for the feasibility of connectivity within the Bay of Bengal region and between the region and the rest of the world. The arguments marshalled here make clear the benefits and positive outcomes that could be expected from a push to renew and build connectivity in the Bay of Bengal region. The editors and authors are to be congratulated for this academically rigorous and timely reminder of the opportunities that exist for us to enhance the welfare of our peoples around the Bay of Bengal through connectivity and cooperation.

The post Preface first appeared on CSEP.

While the Bay of Bengal is located at the fulcrum of the Indo-Pacific, between the Indian subcontinent and Southeast Asia, it continues to act more as a divider than a link between land and maritime neighbours such as India, Sri Lanka, Bangladesh, Thailand or Indonesia. With the rise of competing connectivity initiatives, especially between China and the Indo-Pacific powers, there are growing concerns about conflict over natural resources, securitization of sea lines of communication, or environmental sustainability. This risks depleting or fragmenting the Bay of Bengal regional commons and reduces the prospects of stability and welfare. New connectivity initiatives will therefore not have the desired developmental benefits unless there are commensurate cooperative and coordination mechanisms between different states and extra-regional stakeholders. This report addresses nine areas of growing interdependence in the Bay of Bengal region and proposes solutions to reduce the connectivity-cooperation gap. The chapters review the opportunities and risks of rising connectivity and recommend policies to address them cooperatively. The contributing experts located in and around the region suggest collaborative ways to leverage geography (supply chains, trade corridors and sub-regional connectivity), build new infrastructure (railways, transhipment hubs and mutual standards) and manage the commons (maritime security, complex emergencies and sustainable fishing).

The post Connectivity and Cooperation in the Bay of Bengal Region first appeared on CSEP.

Funded by the Ministry of External Affairs (MEA) and executed by Public Sector Enterprises (PSEs) or private contractors, most of the Indian infrastructure projects are situated in the neighbouring countries of Nepal, Bangladesh, Bhutan, and Myanmar. However, a vast majority of these investments have faced chronic delays, or even halted, due to a myriad of challenges. Access to unimpeded land in these neighbouring countries is among the most significant reasons why India’s infrastructure projects get bogged down. This is due to both the Indian and host governments’ lack of expert and technical capacity on land issues – including on managing records, property right frameworks, litigation and lack of enforcement, or deficiencies in surveying.

This paper examines these issues in the case of Nepal. Focused on in-depth case studies of two Indian-funded projects in Nepal – 1) The East-West Postal road (or Hulaki Rajmarg) project, and 2) The Jogbani-Biratnagar cross-border railway line – it surveys the institutional impediments and expertise deficiencies that led to years of delays in the process of land acquisition. Such issues led to protracted problems, on the ground between central, local, public, and private Nepali stakeholders, to occasional tensions in bilateral government relations, and most importantly, to significant escalation in costs to India’s public exchequer.

Additionally, the paper also contributes to the evolving policy and institutional debates on how the Indian government, and the MEA in particular, can enhance its expert and technical capacity to engage in future land acquisition processes abroad, especially in the case of Nepal and other neighbouring countries. It makes the case for the Indian government, via MEA, to:

• Encourage interactions between diplomatic generalists and various domestic Indian expert stakeholders involved in land governance and property rights at the central and state levels. This should help in the development of clear benchmarks for all land and property-rights related issues involving Indian infrastructure projects abroad.
• Deepen bilateral engagements between Indian officials and their counterparts in Nepal to exchange best practices on property rights and land acquisition governance, including, for example, digitisation of land records.
• Coordinate with other national and multilateral development cooperation agencies to exchange best practices and develop Indian guidelines and standards for land acquisition, resettlement, and rehabilitation processes abroad. This could, for example, include the Asian Development Bank and Asian Infrastructure Investment Bank or the Japan International Cooperation Agency (JICA), and the United States Agency for International Development (USAID).

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Healthcare expenditure is financed through various sources in a country. It can be financed by the government (state or union), insurance schemes (public or private) or borne by households directly in the form of out-of-pocket expenditures (OOPE). More financing by the government implies less financial burden on households in the form of huge out-of-pocket expenses. The World Health Organization’s (WHO) data on global health expenditures reveals that when it comes to out-of-pocket expenditure as a proportion of current health expenditure, India does much worse in comparison to the world average (65% for India versus world average of around 20% in 2016). A comparison with other Asian countries also reveals a similar scenario. Thailand and China have reduced the proportion of out-of-pocket expenditure over time, while Sri Lanka and Bangladesh witnessed an increase over time.

The state-level scenario is not very different from the national picture which reveals that the burden of health expenses falls mostly on households. In the state of Bihar, out-of-pocket expenses are a whopping 80% of the total health expenditure. In Uttar Pradesh, India’s most populous state, OOPE forms three-fourth of the total health expenditure. Some states do relatively better, such as Karnataka, Himachal Pradesh, and Gujarat, but even in these states, households bear almost half of the total health expenditure as OOPE.

OOPE warrants special attention as it leads to impoverishment, with 7% of the households falling below the poverty line on account of health expenses. OOPE has increased in both rural and urban areas with the expenditure attributable to medicines forming the single largest category. Medicines are an integral part of any medical treatment and the expenditure incurred on them is quite substantial. The share of medicines in OOPE was around 51% in 2013-14, this figure reduced to 43% in 2015-16, but still remained the biggest contributor to the OOPE incurred by households. Lastly, out of the total pharmaceutical expenditure incurred by households, 18% is for in-patient treatment while 82% is for out-patient care. These figures suggest that the cost of pharmaceuticals is an important area for policy intervention.

While access to affordable medicines is important, the quality of medicines is essential to achieve desired curative outcomes.

In this report, we focus on three important aspects of medicines in India – accessibility, quality, and affordability of drugs. The first part analyses access to drugs from two main perspectives – the accessibility of medicines via Jan Aushadhi (JA) stores and e-pharmacies. With branded generic drugs priced far higher than their unbranded generic counterparts, access to reasonably-priced drugs is limited in India. To address this, the Jan Aushadhi scheme was launched in 2008 to increase access to affordable and quality medicines. The key features of this scheme included setting up pharmaceutical stores with government support and making cheaper drugs available to consumers. Using district-level demographic and economic characteristics, we find that more JA stores are found in districts with larger proportions of urban population, higher literacy rates and a greater level of development. Despite the incentive-based nature of the scheme, which rewards store owners for the volume of business, some districts in the Northeast and Central India failed to attract any JA entrepreneurs. Lastly, with the proliferation of the internet in urban cities, we have witnessed the growth of e-pharmacies. The market share of this segment is currently small but the convenience and price discounts offered by startups in this domain are set to propel the e-pharmacy sector in the coming years. In this relatively new, innovative space, business growth has to be balanced against important regulatory needs. Without an accurate prescription validation mechanism, we could witness a rise in antibiotic resistance over time or overuse and habit formation for opioids.

While access to affordable medicines is important, the quality of medicines is essential to achieve desired curative outcomes. In the second chapter, we look at drug-testing capabilities and bottlenecks such as the shortage of manpower needed for inspections. We draw upon publicly available information from the Central Drugs Standard Control Organisation (CDSCO), Lok Sabha questions, and notifications related to substandard and spurious drugs released by individual state regulatory bodies. Based on CDSCO data, we find that the overall percentage of substandard and spurious drugs in India is around 3-4% for the years 2014-16. Data from six individual states show that most notifications related to substandard drugs originate from manufacturing units within the same state. However, a substantial proportion of these alerts are ascribed to drugs originating from other states such as Himachal Pradesh and Uttarakhand. The state regulatory machinery is powerless when it comes to punitive actions against manufacturing units located outside the state’s administrative boundaries.

In the final chapter, we focus on past policies that have struck a balance between providing affordable and reasonably priced medicines to consumers and enabling the pharmaceutical industry to grow with sufficient profit margins. Price regulation of pharmaceutical products is the policy instrument that has been used to address the affordability of medicines in India. It is implemented by the Department of Pharmaceuticals under the Ministry of Chemicals and Fertilisers via Drug Price Control Orders (DPCOs), with the National Pharmaceutical Pricing Authority acting as the executing body.

The recent drug price regulation extended price control to 347 drugs (with over 800 formulations) that are on the National Essential List of Medicines. The ambit of regulation increased from just 74 drugs being regulated between 1995 and 2012 to 347 drugs post-2013. This report aims to examine how drug price regulation has evolved over the last four decades during which three-drug price control orders were executed. We also analyse how this regulation has kept pace with the changing disease burden in the country during the same time period. Though the scale of the regulation has increased over time, there was a brief period of deregulation as a result of DPCO 1995. We observe that recent orders have increased drugs under regulation in all therapeutic classes, especially drugs used to treat cardiovascular and respiratory diseases, which have witnessed an increase in disease burden as well.

This report examines how price regulation, the policy instrument used to address the affordability of medicines in India, has evolved over the last four decades.

It is important to consider all aspects of drug accessibility – affordable medicines will lessen the financial burden on households; easy availability of generics would mean less reliance on expensive alternatives, and good-quality of drugs is the minimum requirement for effective treatment. Through our analyses in each of these three chapters, we put forth recommendations aimed at addressing issues in the quality of medicines, increasing the availability of medicines and the structure of price control in our country.

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Reviving Higher Education in India Hindi India has seen a dramatic increase in the capacity of its higher education sector in the last two decades. Enrolment in higher education has increased four-fold since 2001. With a Gross Enrolment Ratio (GER) of 26.3% (AISHE 2018-19), we are close to achieving the target of 32% GER by 2020. However, many important questions such as the quality of Higher Education Institutions (HEIs) and employment of graduates merit further examination.

In this report, we address these questions by examining the enrolment trend and patterns; graduation and employment patterns; and the quality assurance framework for HEIs in India. We also track the policy shifts that enabled this expansion. We offer context to India’s expansion by comparing it to other countries. We also compare the growth of India’s higher education sector to that of China over the last 25 years.

Despite the increasing number of professional colleges, three-year degrees in arts, commerce and sciences remain the most popular programmes as evidenced by high enrolment rates.

• India has seen a rapid expansion in the higher education sector since 2001. There has been a dramatic rise in the number of higher education institutions (HEIs) and enrolment has increased four-fold. The Indian higher education system is now one of the largest in the world, with 51,649 institutions.
• Despite the increased access to higher education in India, challenges remain. Low employability of graduates, poor quality of teaching, weak governance, insufficient funding, and complex regulatory norms continue to plague the sector. India’s gross enrolment ratio (GER) in 2018-19 was 26.3% but still far from meeting the Ministry of Human Resource Development’s target of achieving 32% GER by 2022.
• As the government evaluates proposals to reform the University Grants Commission and implement the recently proposed Draft New Education Policy 2019, this Brookings India report takes a wider view of reforms necessary to respond to challenges facing higher education in India today. It examines the capacity of HEIs with respect to students as well as teachers; governance and accountability; funding and affordability; research and innovation; and, regulatory regime, to create a globally relevant and competitive ecosystem that can produce employable graduates and sophisticated knowledge workers.
• The exponential growth of the sector has been due to the increased demand for higher education. The higher education sector has grown across all levels and disciplines. However, broad trends and patterns in enrolment, graduation and placement suggest that access to higher education continues to remain a challenge, especially at the postgraduate level.
• Given the low proportion of students that go on to pursue postgraduate and doctoral education, a shortage of qualified teachers is a further problem that is plaguing even the best universities in India. High entry barriers, poor incentive structures, stringent tenure rules and rigid promotion practices lead to a limited supply of faculty.
• Faculty shortage, low inputs available for research and inadequate industry linkages amplify the existing limited uptake of good quality independent research in HEIs across all disciplines. We find that while countries like the United States, China and South Korea have invested in research to build a skilled, productive and flexible labour force, HEIs in India, in contrast, lack the culture of independent academic research.
• The higher education sector in India is crippled due to the lack of financial, academic and administrative autonomy granted to institutions. Overall, this has resulted in the poor quality of institutions as well as education. Under the affiliating university model, the supervisory authority for most colleges is the university or a government authority; both lack the capacity to effectively regulate their constituent colleges and hold them accountable. In contrast, autonomous HEIs are at an advantage since they have the power to constitute their own academic councils and make decisions on academic matters.
• In the last three decades, the government has taken a step back from its role as the primary funder of higher education. Union funding for government and government-aided HEIs is skewed in favour of central universities, and state governments spend a lot more than the central government on higher education. While, there is little to no data on how the higher education sector is funded, we do know that household expenditure on higher education is now the biggest source of funding. Private HEIs are funded almost entirely by student fees. Research suggests that the average tuition fee for an engineering degree from a private institution is almost twice as that of a public institution, while private HEIs account for three-fourths of all enrolments.
• Limitedassessment and accreditation capacity of the NAAC and NBA has been a significant barrier in linking the performance of an institution to autonomy and funding decisions. Thus far, NAAC has retained the exclusive power to accredit HEIs, allowing corruption and profiteering to creep into the sector.
• Several proposals, committees and draft policies in the last decade have suggested the need to revamp the University Grants Commission in order to resolve the numerous roadblocks in an over-regulated regime in the Indian higher education sector. The distribution of functions, roles and responsibilities among several agencies and providers has inhibited innovation and creativity, and led to issues with accreditation of HEIs, their autonomy and inadequate funding. Some recent measures for instance, granting Institution of Eminence status to select HEIs, enactment of IIM Bill 2017, many proposals made under the DNEP19 demonstrate that these issues have been acknowledged and reforming the regulatory regime is non-negotiable.

ISBN 978-81-941963-4-1

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Abstract

For the first time, India has sufficient or even surplus electricity generation capacity.  Headline numbers show India’s gross installed electricity capacity is over 350 GW, but the maximum load met has been approximately 180 GW. Does this mean we have sufficient buffer for years to come?

A significant fraction of this gap between demand and supply is explained by grid-level losses (even before distribution) losses, infirm capacity (Renewable Energy, or RE), as well as plants under “outages”, which span both technical outages as well as lack of demand, lack of fuel, etc. Examining all the outages across all plants, we find that the “recoverable surplus” is only about 30 GW, sometimes less. This assumes fuel adequacy, as well as willingness by Discoms to buy such power, i.e., demand.

A projection of demand growth (over 10 GW/year) as well as capacity growth, including the impacts on capacity due to planned compliance with new pollution emissions norms for coal power plants, shows any surplus might only last 2-3 years. Going forward, India needs peaking power, storage, and load-shifting as tools to balance demand and supply, combined with more flexible and time-of-day reflective pricing for electricity supply.

Key Findings

1. India’s gross installed capacity is around 349 GW, but peak load met over FY 2018-19 at a grid level has been about 175 GW. For a number of days, the daily peak load met has been measurably lower. This is the supply consumption is far lower, reflecting in-state losses, both transmission and distribution.

2. At the national level, India’s peak electricity demand usually occurs in the evening. Meeting this demand requires relatively firm supply which variable Renewable Energy (RE) cannot supply in the absence of storage.

3. Firm capacity outage at any time of the year varies between 60 GW to 90 GW, leaving the available firm capacity between 180 GW to 210 GW. Auxiliary consumption, which is generation consumed within the plant and thus not fed to the grid, varies by type of generation and further reduces the net firm capacity available to meet demand.

4. There are a multitude of factors contributing to outages of capacity, which broadly fit within three types:
a. Technical issues (faults, planned maintenance, unplanned maintenance, etc.)
b. No or low demand (too low to be met by a generator in practice)
c. No fuel availability [There are a few other regulatory and other reasons for outages as well, but (a) to (c) contribute to over 90% of outages.]

5. Approximately 13 GW of firm capacity outage could be recovered quickly based on proper planning and co-ordination e.g. by ensuring the availability of coal and gas. This is distinct from low plant load factors (PLFs) of many generators which run at or near the peak demand period.

6. Firm capacity outages vary by season as well as region. For example, outages due to coal shortages were predominant in the Western Regional Load Dispatch Center (WRLDC) all year round and in the Eastern RLDC between October-January (using recent data).

7. Meeting the average requirement of energy (TWh, or billion units, aka BU) will be less of a problem in the future than meeting the requirement of instantaneous capacity (megawatts). RE is growing at a fast pace in India, but based on daily and seasonal differences, and in the long run without storage, it plays a very small (about 3% observed during December 2018) role in meeting the peak demand (which mostly occurs in the evenings).

8. With a growth of nearly 10 GW in peak demand anticipated every year, perhaps more, the current capacity surplus as well as the planned installation of non-coal firm capacity might not be enough to meet the peak demand as early as 2021 or 2022. Some form of additional peak supply would be needed at most by 2022, after exhausting the recoverable outages of about 25 GW (a mix of no fuel and no demand today). Deciding on the best type of generation capacity to meet the peak is a separate calculation. A new coal plant may not be optimal, unless it is well under construction and nearly built, and can operate viably at low or modest PLFs. A better focus will be peakers, storage, demand side management/demand response, load shifting etc.

9. 62.7 GW of firm capacity has been planned to be built between 2017-2022, averaging at about 12.5 GW per year. However, for the one-year period between October 2017 and September 2018, only 3 GW of capacity has been commissioned. Unless projects are heavily stacked towards the end
(2022), it is highly unlikely that all the planned capacity will be commissioned by that time.

10. One big unknown is compliance with upcoming environmental norms, which will result in downtime for retrofitting existing coal plans, or even retirement of some older capacity. Almost all the planned upgradation of the power plants to meet upcoming environmental requirements is scheduled in 2021-2022. This will lead to many power plants being shut down simultaneously during that period. It would be beneficial if the upgradation schedule is front loaded or at least more evenly distributed between 2019-2022, to reduce the impact of lost capacity to meet peak demand.

11. Future studies should investigate the optimal generation mix required, from the perspectives of true technical economics (distinct from contractual economics), greenhouse gas (GHG) emissions and grid stability in a high RE future. Also, a detailed analysis for the reasons of coal and gas shortages is required, to chart out a reasonable course of action to overcome these. Different Regional Load Dispatch Centres (RLDCs) have different strengths and weaknesses, with some performing better than others when it comes to capacity outages. There is a need to share the best practices among the various RLDCs, and coordinate for planned maintenance, including upgrades to meet environmental norms.

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Achieving the ambitious sustainable development goals (SDGs) by 2030 will take an estimated $5 to $7 trillion per year, with a financing gap of $2.5 trillion in developing countries.In India alone, the outsize challenge has been translated into a financing gap of $565 billion. While the country has seen huge progress across the social sectors, enormous challenges remain. For example, only slightly over half of all children enrolled in standard 5 can read at least a standard 2 level text, while just 21% of mothers receive full antenatal care.

Closing this gap requires action on several fronts; efficient and effective domestic resource mobilisation, outcome-focused donor efforts to ensure that money is spent well and harnessing private capital for good. In recent years, interest has grown globally amongst governments and markets to develop new investment approaches, such as impact investing or purpose-driven finance. Impact investment refers to the provision of finance to organisations with explicit expectations of financial returns as well as measurable social outcomes.

According to a recent analysis by the Global Impact Investing Network (GIIN), over 1,300 organisations manage $502 billion in impact investing assets globally. The impact investing sector in India attracted over $5.2 billion between 2010 and 2016, with over $1.1 billion invested in 2016 alone.

With the emergence of impact investing as a new asset class in India, investors are not only providing capital and support to social enterprises but also growing to understand the potential of this new form of investing. Given the risks and complexities of serving the social finance sector, several innovations have emerged – not only the way capital is structured but also how impact is delivered. There has also been a rise in public-private partnerships, largely driven by government budgetary constraints, the new public management ethos and the fact that innovation is increasingly cooperative and network-based. Financing development through extra-budgetary means and public-private partnerships offer potential solutions, such as a focus on outcomes and improved performance management for service providers.

India has a thriving social enterprise ecosystem; many organisations, however, struggle to access the capital they need. In a survey of Indian social enterprises, 57% identified access to debt or equity as a barrier to growth and sustainability. And despite the developing ecosystem and potential of the impact investment space, the literature on impact investing in India is limited. The number of impact investors in India, the sectors and areas they choose to invest in and the future of instruments remain unclear. This report aims to provide an analysis of the state of the impact investing sector in India, with specific focus on the health, education and agriculture sectors, as well as examining how impact is measured. The report also investigates several instruments, including equity and debt investments as well as market-based, innovative solutions such as social and development impact bonds (SIBs and DIBs hereafter) and innovation or outcomes funds.

IMPACT INVESTING

Within the broader spectrum of social investment models, approaches range from purely profit-driven investing without expectations of social impact to pure philanthropic grant-making by donors and foundations. Corporate social responsibility (CSR), socially responsible investing (SRI) and a focus on environment, social and corporate governance (ESG) have also gained traction in the last decade in India and abroad. Globally, some of these trends have been driven by government-led advances in bringing analysis and rigour into public spending and social outcomes.

Impact investing differs from corporate social responsibility, environmental, social and governance or socially-responsible investing as it goes a step further to include only those investments that have clearly defined intentionality for achieving “measurable” impact, alongside financial returns. Financial returns for impact investing range from simply preserving the principal amount to matching the principal amount to even exceeding mainstream market returns. Impact investors also focus on investing in social enterprises that do not just mitigate negative impacts but also generate net positive impacts. Positive impacts may be demonstrated in various ways – from creating jobs and employability to serving low-income consumers through housing, education, accessible healthcare or inclusive finance. What further distinguishes impact investing from traditional philanthropy has been the investment and return motives of impact investors where scalability, entrepreneur characteristics and experience weigh in. Despite the promise, cumulative assets under impact investing remain marginal compared to the billions of dollars invested under CSR, ESG or SRI. The field is new and evolving fast in India, with approximately 30 firms in the market, a subset of which is registered with the Impact Investors Council (IIC) in India. The impact investing market in India has mimicked the trends and challenges of the global impact investment industry. However, there are several peculiar aspects of the Indian market which make it interesting and critical to examine from a policy perspective.

IMPACT BONDS

Impact bonds refer to a specific form of outcome-based or payment-for-success contracting that often employs upfront impact investment capital. The impact bond model aims at improving development outcomes for specific groups or beneficiaries. Impact bonds in financial terms do not qualify as bonds, since unlike bonds, impact bonds tie financial returns to the achievement of outcomes. Impact bonds have several potential advantages: when investment is tied to outcomes, rather than activities, service providers gain greater flexibility to adapt and improve their programs; governments have the potential to transfer the financial risk of a program to the private sector by only paying for a program when pre-agreed outcomes are achieved. Such instruments may help promote a culture of data generation and use and performance management. Impact bonds in India remain at a nascent stage, with two contracted in education and one in healthcare.

RESEARCH METHODOLOGY AND MOTIVATION

Our methodology involves a primary survey of different stakeholders in the impact investing market in India. The survey instrument is available in Appendix 1 at the end of this document. Our sample includes a variety of stakeholders, including those involved in impact bonds in India and portfolio companies where impact investments were made. The survey captures the flow of current investments, average expected returns, sectors of investment as well as the future of innovative financing in India.

We designed a mixed survey that consisted of both multiple-choice and open-ended questions. We then compiled a list of entities involved in the impact investing and innovative financing space in India and contacted their representatives for interviews. Given the small size of the impact investment industry in India, our survey sample size remains small – 27 organisations. This is, however, the largest survey of the industry. Earlier surveys were limited in scale as they were confined to firms with membership to the IIC (approximately 12 firms in 2016). They were also limited in scope and did not capture detailed disaggregated industry characteristics. Our survey addresses a larger number of industry features, including innovative financing instruments and sector-level trends which highlight the complexity and future potential of the impact investing industry in India. Of the total number of firms that we surveyed, 17 identify themselves as impact investors, eight as impact bond players and two as social enterprises. The interviews capture a range of perspectives from a dynamic industry that is at a nascent stage. The early empirical trends, however, hold promise of a future with far-reaching influence on India’s development in sectors including health, education, agriculture and financial inclusion.

Our analysis also incorporates the data provided by the IIC. Collected in collaboration with a team from Duke University, the IIC data provides summary statistics of how members of the council measure impact, the size and nature of their relative investments and the average returns they earned. For a global perspective, we conducted an extensive literature review of global research on impact investing from developed and emerging markets.

MAIN FINDINGS AND POLICY RECOMMENDATIONS

Each chapter of this report provides stakeholders with takeaways and learnings from the survey and research around impact investing in India. With the first chapter, we outline a history of the Indian impact industry and initial results from the survey – these touch on average sizes of investments, types of investments, average returns across the industry and some sector-level analysis of returns. In the second chapter, we deep dive into key sectors of investment primarily, health, education and agriculture and present trends and challenges investors face while operating in these markets. The third chapter presents information on innovative financing tools such as social and development impact bonds, the market in India and the future of these novel approaches. In the fourth chapter, we show trends on measurements of impact and provide guiding steps for the industry to define impact more transparently and robustly.

Through the course of our research, we find several trends, many that mimic the international market and many that remain unique to the Indian context. Our main findings show how the Indian impact investment story is continuously evolving and changing. Impact investments are shifting from financial access, microfinance and energy towards traditional philanthropic sectors such as health, education and agriculture. Average returns beat market returns, even in sectors which are traditionally social sectors with low returns. We see impact investors playing hybrid roles, somewhere between private equity (PE) investors and accelerator/incubator style mentors. And find a strong focus on tech-based investments to achieve scale and reach. We find impact to be defined loosely and a lack of cohesion on measures and indicators at a sectorial and investment level. And a need to build an evidence-backed knowledge base for innovative financing and impact bonds.

The last chapter of the report provides key policy recommendations to build a case for mainstreaming impact investment as a complement to government and philanthropic spending. We aim to contribute to the conversation around outcome-based approaches. We recommend impact investors move beyond “easy-finds” and push for innovations beyond tech-based solutions. And the acceptance of global best practices and the promotion of greater transparency in measurements, through coordination and facilitation by industry organisations, such as the Impact Investors Council and Quality Council of India (QCI). We recommend investments of time and energy on search processes and truly filling gaps in provision, by bringing innovations in products and solutions. We also recommend the investigation of outcomes contracting at scale through the creation of an Outcomes Fund at a government or quasi-government level. Ultimately, a robust Indian impact investment market will depend on accurately identifying and improving hindering factors and constructing a strong ecosystem that fits its needs.

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The paper discusses the need to focus attention on the primacy of growth as a policy objective. As the achievement of annual economic growth of about 7% has almost become commonplace, the country is now in danger of suffering from a degree of complacency. If India is to eliminate poverty and achieve upper middle income status in the foreseeable future, by around 2035, it must elevate its growth trajectory to the next level. This paper analyses the key macroeconomic tasks ahead to take growth back to 8-9%: sustained increase in savings and investment, fiscal consolidation through enhanced tax revenues, and a step up in infrastructure investment.

It also highlights the need to revive animal spirits in the private sector to rekindle investment, particularly in an internationally competitive manufacturing sector. This would need the maintenance of a realistic competitive exchange rate, along with implementation of long overdue bold land and labour reforms, incentivising labour using manufactured exports, and a focus on industrial research and development.

Efficient growth promoting private sector functioning requires the next generation of reforms to concentrate on the institutional and technical strengthening necessary to empower government at all levels, which enables it to ensure delivery of essential public goods and services, particularly in health and education.

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A new study by Mohd. Sahil Ali and Rahul Tongia examines the growth and changes in India’s 2030 electricity supply, using quantitative scenario-based modelling.  This analysis builds on a separate paper on bottom-up modelling of India’s electricity demand in 2030, which indicates a significant slowdown in electricity demand growth rates compared to the past,  after accounting for scenarios of captive use, electric vehicles, 24×7 supply, and other aspects of growth and development directly affecting power (irrigation, housing, manufacturing, space cooling, mobility and cooking).

This study models the generation requirement from thermal power plants by 2030 based on developments in non-fossil capacity and electricity demand. This is with the objective of deriving application-wise (grid and captive) and source-wise (domestic and imported) demand for coal in 2030.  A mix of scenarios are presented combining changes in demand growth as well as alternatives for non-coal capacity. Generation requirement and, subsequently, coal demand are derived as residual in the model that simply matches the supply with the demand (at the bus-bar).

A total of nine scenarios are presented in the study, out of 81 modelled. These include three cases of demand and three of non-fossil characterised as low, mid, and high. Mid scenario is at the intersection of the 3×3 matrix, and can be understood as the representative value (note: it is not the median or the average of the extremes). The ‘likelihood’ of the mid scenario depends on the convictions of the reader in the future bets they are willing to make. For the authors, mid value represents a plausible but not necessarily the most probable future scenario, after consultations with a wide variety of stakeholders and experts.

Past Highlights

• In the previous decade, energy and peak deficits have fallen to less than 2% from over 10%. Within the same time, thermal power PLFs have also reduced by nearly 20 percentage points. Between 2012 and 2017, thermal capacity addition grew by nearly 12% CAGR, thermal generation by 9%, while end-use electricity demand by only 6%.
• In 2017, grid-based thermal plants performed at an average efficiency of 33.72%; of the thermal capacity, over four-fifths is sub-critical. Grid-based plants consumed 575 million tonnes (Mt) of coal, out of which 67 Mt were imported. Including captive power plants, the total coal consumption in 2017 was672 Mt of which 82 Mt was imported. The share of imported coal has grown rapidly in recent years.
• The average domestic coal grade has been declining across CIL subsidiaries in addition to grade slippage (failing to meet contractual grade commitments), resulting in lower energy delivered per ton of coal. Other policy and logistical issues cancellation of captive mining blocks and transportation bottlenecks built an impetus towards imports. We calculate the average GCV of domestic coal in grid power plants as 3,058 kcal/kg in 2017. Approximately 39 Mt of lignite, 20 Mt of washed non-coking and 38 Mt raw coking (non-metallurgical) coal also form a part of the domestic coal mix to the power sector.

Key FUTURE TRENDS

• Grid electricity requirement is projected to grow to 2,057-2,341 TWh (4.6-5.6% CAGR) by 2030, of which coal may contribute 1,090-1,779 TWh (1.8-5.7% CAGR) – a substantial range dependent on non-fossil penetration. Coal will remain a dominant source with over 50% share in generation. Net generation from captive is projected to grow to 318-361 TWh (4.6-5.6% CAGR) with coal contributing two-thirds, down from over 80% in 2017. A grid-based coal capacity of 260 GW suffices across scenarios, with some adjustments required along the extreme scenarios to remain within 60-75% PLF.
• Overall coal demand for the power sector increases from 672 Mt in 2017 to 827-1,277 Mt by 2030 (1.6-5.1% CAGR), marking a considerable slowdown from 6.7% CAGR between 2012 and 2017. The analysis indicates that it is unlikely we will see peak coal by 2030, unless 500 GW of solar and wind capacities are deployed with adequate storage and alternatives. Due to a relatively younger fleet mix and higher share of supercritical, generation efficiency improves by 2.5 percentage points by 2030. The average grid specific coal consumption (SCC) drops to 0.57 kg/kWh in 2030 from 0.62 kg/kWh in 2017.
• Based on historical trends and assessment of future coal quality, plant specifications and logistics, imported coal’s share may grow from 12.2% in 2017 to 15.5%, reaching 129-198 Mt by 2030. Falling domestic coal calorific value could raise the requirement for mining around 75 million tonnes of domestic coal, and worsen SCCs. To check growth in share of imports, greater substitution by washed coal is required to the tune of 20-25 of domestic coal mix used for generation.

Insights and Recommendations

• There are several potential threats and opportunities at the cusp of India’s energy transition. Our study suggests a cautious and phased deployment of planned coal capacity while adding no more, but accelerating retirements and retrofits to meet pollution norms. This requires phasing such activities in a gradual manner instead of close. Further, there needs to be an overhaul in domestic coal quality control, transportation and logistics. The coal value chain supports diverse aspects of the economy, including the Indian Railways given the location specific nature of coal (eastern India) and RE (southern and western India).
• India needs to check its falling coal quality domestically and also offer a value proposition against imported coal, especially for new technologies. In this respect, washed coal use needs to be seriously ramped up our calculations suggest at least a four-fold increase in existing non-coking washing capacity (and improving utilisation to 75%) to keep the imported coal below 2017 levels. Due on the relative slowdown in growth rates, a key challenge before power sector coal is not the quantum but the quality of coal, along with issues of linkages and logistics.

Scenarios of net generation (billion units) from coal, RE and other sources

Scenarios and sensitivities of coal demand (million tonnes) by 2030

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A changing global order, energy transitions and climate change and rapid technological advancement – India’s next government has the difficult task of steering the country through an interesting and crucial time. India 2024: Policy Priorities for the New Government, edited by Dhruva Jaishankar and Zehra Kazmi, is a compendium of policy briefs from scholars at Brookings India, which identifies and addresses some of the most pressing challenges that India is likely to face in the next five years. Each policy brief is based on longer, in-depth and academically rigorous publications from the scholars.

For a fast-growing large democracy, human capital will be the driving force behind future growth. India must significantly invest in health and education to leverage its demographic dividend. Ayushman Bharat is a big step towards easing the healthcare burden on poor households. But to improve health outcomes, equal emphasis must be placed on the scheme’s other objective of improving primary health infrastructure at the local level. Scaling up this initiative would require expanding and strengthening primary health infrastructure, enforcing quality standards and conducting periodic audits.

While effective and affordable healthcare is on top of the agenda, education – at both the primary and higher levels – deserves close attention as a priority. Data shows that in India, unemployment is highly concentrated among the most-educated in the society. Nearly 35% of those with post-graduate degrees are unemployed, as opposed to only 6.2% uneducated young workers. This raises questions about the gap between skill and educational degrees. Against this reality, we analyse India’s higher education sector and find that the government must make significant efforts to expand capacity, incentivise research and ease the regulatory burdens that bind educational institutions to small scale and low quality.

In modern India, cities have emerged as the engines of growth and opportunities. For people to thrive, cities must thrive as well. An increasingly urbanising country needs to address its crisis of affordable housing supply in urban centres. Empowering metropolitan bodies for better governance, boosting rental housing and funding urban local bodies emerge as some of those solutions.

On the global stage, India has a significant role as the world’s largest democracy. Containing Pakistan, deepening partnerships with existing allies, and balancing Eurasia continue to be priorities. But the biggest external challenge India faces right now is China’s rise and assertiveness. New Delhi’s focus must be its neighbourhood, finding ways to open up to smaller countries and shape their long-term incentive structures to favour India. We must ask ourselves, what can India do to become a credible alternative to China? Does the solution lie in New Delhi improving its aid delivery and implementation in the neighbourhood, currently riddled with gaps?

Our foreign policy experts examine this in detail and suggest that India must adjust its strategies and structures in accordance with the new reality. Any reforms in this sector, however, are contingent upon building sufficient internal capability. The government must expand foreign services’ intake, train manpower and allot adequate resources for public diplomacy and outreach initiatives. Our experts also argue for urgent defence reforms a strong, secure India needs defence self-reliance and indigenisation.

The third pillar of this compendium deliberates India’s transition towards a nation that balances its energy needs with sustainability. Brookings India scholars have long grappled with the choices and opportunities this transition presents, writing extensively about how it affects sectors such as coal, natural gas, renewable energy and power. A consensus that emerges is the need to manage resources more effectively. One suggestion, to attain this objective, is the consolidation of the various ministries into a single Ministry of Energy and Environment – a single decision-making body that will shape policy. Simultaneously, there is a call for the government to step away from some of its current activities in energy production and distribution, to reboot the Discoms (distribution companies) and introduce independent and empowered regulators.

There have been significant gains through schemes such as the Saubhagya Yojana. It has ensured electricity access in the most remote areas of the country. The question now is: how can India further improve its electricity supply to each household? Similarly, while we have made great strides in renewable energy which is cheaper and cleaner than coal, but moving forward we have to ask: what about the systems-level costs that it imposes? India has set ambitious targets for electric vehicles, but how will it resolve the challenges of battery technology and costs? These are some key questions raised by our experts, who also provide some specific policy recommendations to address each problem statement.

The last several years have witnessed the emergence of India as the fastest-growing large economy in the world. The next five years in India will be a window of opportunity to push further policy reforms for sustained long-term growth. India has succeeded in lifting hundreds of millions of people out of poverty in the last 28 years, and now the focus of the government must be to ensure inclusive sustained development for the future. This compendium from a team of scholars at Brookings India provides specific policy recommendations to attain some of these targets.

India 2024: Policy priorities for the new government | Edited by Dhruva Jaishankar & Zehra Kazmi

SECTION 1
DEVELOPMENT & GOVERNANCE

A Healthy India by Prachi Singh
A Highly Educated India by Neelanjana Gupta and Shamika Ravi
An Urban India by Sahil Gandhi An Informed India by Prerna Sharma and Shamika Ravi

SECTION 2
FOREIGN & SECURITY POLICY
A Secure India by Shivshankar Menon
A Global India by Dhruva Jaishankar
A Neighbourly India by Constantino Xavier
An Interdependent China and India by Ananth Krishnan

SECTION 3
ENERGY, ENVIRONMENT & SUSTAINABILITY
A Green India by Vikram Singh Mehta
A Sustainable India by Rahul Tongia
An Energised India by Swati Dsouza
A Productive India by Sahil Ali A Clean India by Ajai Nirula

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Take education, for example. Despite the Indian government’s commitment to education and a right to education act, India has some of the worst education indicators in the world. According to the ASER 2018 report, only slightly over half of all children enrolled in Standard 5 could read at least a Standard 2 level text and only 28.1% of Standard 3 children could subtract. In rural parts of certain states, Rajasthan for example, a girl is more than twice as likely to be out of school compared to a boy.

Policies and programmes in India are often riddled with inefficiencies and neither established institutional norms nor public discourse have sufficiently demanded evidentiary support for decisions that have wide-ranging consequences. This enables governments and bureaucratic organisations to carry on with the status quo. Hence, demands for sound policies backed by evidence are the need of the hour.

Cross-Match Multiple Data Platforms
Going forward, high-quality data and information management before, throughout, and after a development program or intervention will prove to be crucial. Building this data infrastructure – whether from the top-down or the bottom-up will be a fundamental requirement for a sustainable and responsive policy framework. Data availability instead of data existence also appears to be the great challenge in India, where a variety of government institutions – such as the Ministry of Statistics and Program Implementation and others – collect vast amounts of data but there is limited coordination or alignment on data-access policies. In addition, quality and reliability of data appears to be a challenge, in particular regarding individual-level information. One of the greatest challenges continues to be different data systems and platforms within the government, which are not set up to be cross-referenced. This creates data silos and significantly impacts the reliability of information, as government institutions apply different assumptions and models to a social problem, cutting across various agencies. A possible remedy is hiring data analysts and technical coders who are able to cross-match multiple platforms. Faster cross-matching can move the needle from collection to analysis. 

In addition, Indian government institutions engage only in a limited way with the private or the non-profit sector in terms of data collection despite the massive scale and reach of civil society in India. Social service providers and private research institutions gather large volumes of proprietary information (for example, through surveys or focus groups) that have great potential to complement government databases. The institutionalisation of data-sharing policies can contribute to creating a more open data culture, in which both public and private actors share information top-down as well as bottom-up.

Leverage Private Actors for Impact Evaluations
Bridging the gap between sound data analysis and the operational, legal, ethical and political issues that bureaucrats and politicians are confronted with on a daily basis requires critical analysis – this is where research meets policy. Ultimately, what matters in evidence-based policy is not just evidence but understanding. This becomes the most important use of collected data, to cumulatively understand and combine evidence with context to make informed choices. 

On one hand, there remains a vast amount of meaningful research which can directly inform and enrich policymaking and implementation, but researchers often do not tailor their work to answer or solve particular policy questions. On the other hand, there is a dearth of ideas and analysis on niche and sector-specific issues, where policy planners and bureaucrats who implement crucial programs daily could use help.

While it is important to link evidence to policy, investments must be made in building the capacity of policy planners to leverage what is already available. Going forward, data and evidence must be clearly analysed, as this lays the ground for future impact modelling. Knowledge and resources of academic institutions must leverage the process of building impact evaluation capacity.

As governments continue to search for the best ways to achieve real impact, certain provider participant relationships can be incentivised such that they inform the design of government programs. These include Pay-For-Success programs and instruments such as Social and Development Bonds. When implemented effectively, payment structures based on successfully meeting agreed social outcomes can increase efficiency, lower costs, and have a profound impact on program success.

Given the early stage development of such techniques, measurement and evaluation must be given importance. This will prove effective in not only establishing a data culture within governments, but in highlighting the importance of informed policymaking based on rigorous quantification.

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Empower Metropolitan Bodies

Metropolitan regions are major growth drivers of the economy and hence worthy of policy attention and nurturing. However, metropolitan governance in India currently suffers from serious problems, including a lack of coordination among different organisations for provision of services such as solid waste management, transit, and mitigating pollution. Regional growth and its concomitant problems may also traverse state boundaries creating additional challenges of coordination among different state agencies.

Article 243ZE of the 74th Constitutional Amendment Act specifies that every metropolitan area in India should have a Metropolitan Planning Committee (MPC). The idea behind proposing an MPC was to create a coordinating body comprising ministers from state governments, locally elected councillors, and other professionals on metropolitan issues and for preparing regional plans. MPCs, where they have been constituted, have not been successful in discharging this role largely due to lack of finances and functionaries. Instead, metropolitan development authorities, which are state-controlled, are playing a significant role. The existing set-up needs to be restructured with a more empowered metropolitan body replacing both the MPC and development authority. This two-tier (city and metropolitan level) set-up should have a clear delineation of functions at the local and regional level along with revenue allocations. There is precedent for this kind of restructuring; metropolitan regions like London and Toronto have experimented extensively in order to improve outcomes at the metropolitan level. Restructuring metropolitan governance will require amending the 74th Constitutional Amendment Act.

Implement a Rental Housing Voucher Scheme

The situation of affordable housing supply in cities continues to be dire despite policy efforts by central and state governments. Direct provision of public housing has not succeeded in meeting its targets. To make matters worse, governments often implement land use regulations and controls such as restricting Floor Space Index or building heights that choke supply and drive up house prices. Given the vast number of households that do not have access to formal housing, the issue cannot be successfully resolved with a policy focus on creating a stock of ownership housing alone and requires rental housing to thrive. In urban India, the share of rental housing to total housing fell from 54% in the year 1961 to 28% in 2011.

Boosting rental housing must become the primary component of a comprehensive affordable housing policy. This involves addressing both supply side and demand side issues with regard to rental housing. Due to the fear of stringent rent control laws and extremely low rental yields, homeowners often prefer to keep houses vacant rather than renting them. Supply side reform will require state governments to amend rent control laws along the lines of the Centre’s Draft Model Tenancy Act 2015. The Centre can use the levers of grant finance and add a clause that states need to do this in order to get access to funds under different centrally sponsored schemes.  On the demand side, the focus should be on creating and implementing a targeted rental housing voucher scheme. Under this scheme, households below certain income thresholds would be identified as beneficiaries and provided rental vouchers that cover the difference between the monthly rent and 30% of their monthly income. A potential challenge is lack of information on incomes making targeting difficult, but the issue is resolvable.

Transfer Revenue to Urban Local Bodies

Urban local bodies have to undertake a wide range of functions mandated by the 74th Constitutional Amendment Act. However, many do not have requisite revenue sources for fulfilling their responsibilities. There is a clear mismatch between the functions they have to undertake and their revenue streams. In the absence of reliable and autonomous revenue sources, a crucial way to provide predictable fund flows is through fiscal transfers directly to the third tier of government. Economist and former chief of Finance Commission, Vijay Kelkar, has proposed that both the state and the centre can share part of the GST revenues with urban local bodies this will require a constitutional amendment. These revenues will be in the form of untied grants with local bodies free to utilise them in any form. Such an arrangement is also justifiable on the grounds that it gives taxpayers a stronger say in how revenues generated from GST may be utilised.

While these reforms may not seem to be very radical, they will be instrumental in improving the lives of millions. The new government needs to be willing to undertake these for the sake of ensuring a smooth urban transition.

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As the global economy is undergoing structural transformation, there will be a shift in labour market requirements. India will require workers in newer and more diverse job roles: sophisticated researchers, innovators, and knowledge workers. Institutions have failed to identify the true potential of a higher education system that provides necessary skills. Systemic issues will need to be addressed to create globally relevant and competitive institutions that can produce employable graduates.

Enhance Postgraduate Capacity
There is close to 80% enrolment in HEIs at the undergraduate level. While postgraduate enrolments have more than doubled since 2009-10, there remains a disparity in undergraduate and postgraduate enrolment due to a lack of capacity. Postgraduate education is a unique avenue to achieve specialised training and allows for improved employability. But apart from Masters of Arts, Science, and Commerce degrees, only MBA has become a popular degree due to the bright employment prospects it offers. Research degrees account for a very small proportion of enrolments, and the proportion of PhDs awarded has fallen in the last decade. Only 36.7% HEIs run postgraduate programs, and merely 3.6% run PhD programs. A direct consequence of low enrolment in postgraduate programs is the shortage of qualified teachers in the higher education system.

The government must lead the effort in expanding postgraduate capacity sufficiently. Private institutions do not find it commercially feasible to run postgraduate programs, other than in courses like management and engineering. Mandating all HEIs to have postgraduate departments in fields where there is a paucity of postgraduates and teachers can help bridge the gap. Incentivising postgraduate education and awarding fellowships in all subject areas will be significant motivation. Providing students with greater access to postgraduate education will position India well to cater to the changing requirements of the labour market by delivering a highly skilled and job-ready workforce.

Build Research-Focused Institutions
Research in HEIs in India is not viewed as a primary and vital function. Institutions view teaching and examining masses as their core function. HEIs have failed to recognise that teaching and research are complementary and mutually supportive activities. Basic fundamental research, funded by the government, takes place in academic settings. India’s gross expenditure on research & development (GERD), as a proportion of GDP, has declined since 2001 and is now lower (0.62%) than it was in 1996 (0.65%). This decline is reflected in India’s poor research capacity as well as inadequate research output and impact when compared to countries like China.  

Two decades ago, China’s GERD was lower than India’s. It has quadrupled since then. In addition to increased investment, China has built research-focused institutions by incentivising research and innovation. More than two dozen research agencies are actively involved in higher education policymaking in China; these are absent in India. Policy reforms have fostered world standards among Chinese HEIs. It is leading the way in publications, patents and has, by some measures, four of the top ten-ranking academic institutions globally. China’s transformation into a knowledge-based economy suggests that funding, primarily from the private sector, is key to producing top-class research. There are limited sustainable market solutions to support research. Applied research has to be industry-driven, for its use. Currently, Indian HEIs are poorly connected to corporate entities.

The government must facilitate university-industry linkage to transfer knowledge from academic to applied settings. Corporate endowments can help build sound infrastructure for research in HEIs and set up R&D facilities on campuses, which, at present, are rare. Support extended to research through Corporate Social Responsibility should be formalised under CSR rules. India should encourage philanthropic contribution for scholarly research, as China has.

Relax Complex Regulatory Norms
For far too long, India has subjected itself to a challenging regulatory environment with a centralised control mechanism. Multiple agencies (state governments, professional councils, affiliating universities, etc.), their overlapping functions, and stringent rules have resulted in fragmentation of the higher education system. The University Grants Commission (UGC) has not been able to successfully monitor the quality of HEIs and implement standards.  Limited capacity of accreditation agencies to assess all HEIs has resulted in failure to recognise and reward high performing institutions. Further, an ‘affiliation’ setup between colleges and universities has weakened the potential of institutions that could have otherwise excelled.  

While recent reforms such as granting graded autonomy to HEIs have promoted academic freedom, more must be done to ease the regulatory environment. A UGC overhaul is expected soon. The new apex regulator should solely aim to promote quality in academic instruction. Accreditation, by empanelled quality assurance agencies with specialised focus areas, should be made mandatory for all HEIs. The move will also improve accreditation coverage. Then, the next step should be to ensure that assessments are made actionable. Decisions of recognition, autonomy, and affiliation can be linked to accreditation results. Grant disbursal to HEIs should be handled independently, on the basis of merit. This will ensure accountability among regulators and accreditation bodies and transparency of the funders.

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Scale Up Health Insurance
In September 2018, the government announced the National Health Protection Scheme (NHPS), also called Pradhan Mantri Jan Arogya Yojana (PMJAY) or Ayushmaan Bharat (AB). AB has twin objectives, the first of which is financial protection for healthcare of up to Rs 5 lakh per family per year (a total of 10.74 crore families are the target beneficiaries) and the second being to operationalise 1.53 lakh health and wellness centers to provide primary care. As the scheme adds more beneficiaries, there are important aspects that warrant closer attention.

On the demand side, for any insurance scheme to be successful, the pool of beneficiaries should be diverse and large enough to mitigate risks for the insurer. Also, the scheme will have limited impact if the number of beneficiaries remain small or if the target population end up not availing medical care. For this purpose, awareness campaigns should be mobilised so that greater information can reach poorer households who are the intended beneficiaries. Any reservations regarding seamless healthcare delivery should be allayed by providing a robust IT system which can ensure quick and assured treatment.

On the supply side, tertiary healthcare take-up critically depends on the quality and availability of empaneled hospitals. Hospitals take a profit-driven decision to become an empaneled hospital under PMJAY. In this regard, the reimbursement rates provided for various treatments have to be intelligently designed. Rates should be flexible to take into account the location of the hospital as costs can be less in rural areas but are much higher in the cities. This difference in costs should be reflected in reimbursement rates. The government already gives land free of cost or at very low rates to new hospitals being set up in backward areas to incentivise them to become empaneled. As on the demand side, a strong data infrastructure can be beneficial to ensure timely payments to the hospitals.

Improve Public Health Infrastructure
To provide free, effective, accountable and quality health care, India’s current health infrastructure relies on a network of primary care facilities which comprise of Sub-Centers (SCs), Primary Health Centers (PHC) and Community Health Center (CHC). Despite a good network of public health infrastructure, studies have shown that households still overwhelmingly depend on private providers for healthcare services. This has mainly been driven by the poor quality of infrastructure and care provided by India’s public healthcare system.

Various government policies have been designed to address maternal and child health, as well as preventable communicable and non-communicable diseases. But the ambitious plan of providing comprehensive health care under PMJAY needs to be guided by a formal assessment of the current state of health infrastructure in India. Despite overall high growth in the availability of sub-centers, India still faces critical shortages in supporting infrastructure and most of these facilities are in a dilapidated condition. Addressing this shortcoming will require at least four steps.

First, there is a need to expand primary healthcare infrastructure further to meet population demands. While some states have a surplus, others such as West Bengal, Bihar and Uttar Pradesh face acute shortages. Overall, India still needs 32,900 more SCs, 643 more PHCs, and 2,188 more CHCs to meet its basic health infrastructure requirements. Second, the Indian Public Health Standard (IPHS) norms must be met. At present, 93% of SCs and 87% of PHCs and CHCs fail to meet the basic standards based on the revised IHPS norms of 2012. This will require, among other things, improvements in waste disposal, hygienic conditions for labour rooms, ensuring antiseptic conditions for operation theatres and newborn care units, and the maintenance of adequate stocks of medicines. Third, existing facilities must be supplemented with supporting infrastructure & services, such as water, electricity, and road connections. This will also require frequent audits to ensure functioning. Finally, population norms must be revisited. The current population norms are based on an old National Health Policy dating back to 1983. With the growing burden of non-communicable diseases, these population norms should be revisited to ensure that the health infrastructure meets India’s modified disease burden.

Provide Affordable, Quality Medication
Indian households spend nearly half of their out-of-pocket expenditures on pharmacies, far outpacing expenditures in hospitals. The affordability, accessibility, and quality of medicines are three important dimensions which require urgent attention from policymakers. First, this will require creating a drug database for price comparisons among pharmacies, to direct consumers to the cheapest available options. This can benefit from the implementation of the Goods and Services Tax (GST), which tracks sales in individual pharmacies. Second, doctor prescriptions should be encouraged to focus more on generic medications, which would save consumers money. Third, a public database for substandard and spurious drugs needs to be created. Currently, no such database exists to inform consumers. Fourth, the hiring and training process for inspectors must be standardised, with a focus on local inspectors. Additionally, quality checks should be boosted at the manufacturing site to counter problems at the source. Finally, a centralised manufacturing licensing system is necessary. At present, Indian states are powerless to stop substandard drugs manufactured out-of-state. Centralising the licensing system can reduce the number of substandard drugs in the market and hold all states accountable to licensing approvals.

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Coal provides about half of India’s commercial primary energy supply today and is the dominant fuel for power production in India. In 2014, Prime Minister Narendra Modi established ambitious goals for renewable energy (RE) development, aiming to quadruple its capacity by 2022. Despite expected growth in RE, we project that coal will remain the dominant fuel for electricity generation in India through 2030 and beyond, even though its share of generation will fall.¹ Although coal will continue to dominate power supply, the coal industry in India faces significant challenges and upcoming change.

Coal India Limited (CIL) is the world’s largest coal mining company and produces 84 percent of India’s thermal coal.² Most coal is sold to power producers, predominantly under fuel supply agreements, at administered prices. But, for years, CIL has not kept up with growing demand. The Indian government now allows end-users to produce their own coal and is moving toward allowing more private-sector mining. However, these changes do not address the underlying challenges of increasing domestic coal production primarily, obtaining the necessary land and permits to expand production. India also imports coal, which is particularly used in coastal areas far from the coal mines of India’s east.

The coal industry is knit into the fabric of the Indian economy. The central government owns a little over 75 percent of CIL,³ which provides significant revenue to the national treasury through dividend payments. CIL is also a major employer, and, in many parts of India, the largest one. Levies on coal are an important source of revenue for the central government and especially for coal-producing states, among the poorest in the nation. Finally, Indian Railways’ freight charges for coal subsidize passenger transport, and coal provides 44 percent of freight revenues, despite being only 40 percent of total freight tonne-kilometers. ⁴ For power plants located far from mines, transport can be the largest component of the delivered coal price.

India needs both coal and renewable energy to meet its growing power needs, but the structure of the Indian power industry raises challenges for the complementary growth of these two technologies.

In the last few years, India has moved from chronic power shortfalls to a situation of near surplus in power generation capacity. Growth in coal-fired power generation capacity has outstripped demand growth over the last several years. At the same time, the growing supply of RE is beginning to displace coal-fired generation in an opportunistic manner (when it is available), decreasing the load factors of some coal-fired plants and therefore decreasing their profitability. Coal plants already make up a significant category of financially distressed assets for the Indian banking sector. The most competitive coal plants in the future will be newer, more efficient plants, and those that can efficiently decrease production to accommodate variable RE generation. Plants located close to mines also have a clear advantage with respect to coal transportation costs. Older plants that require extensive upgrades to meet environmental rules or rules requiring generation flexibility will be less competitive.

India needs both coal and RE to meet its growing power needs, but the structure of the Indian power industry raises challenges for the complementary growth of these two technologies. State-level power distribution companies (DisComs) generally buy power from generators through power purchase agreements (PPAs) static and rigid contracts that treat all power the same, regardless of whether it is intermittent or dispatchable, or by the time of day of availability. Competitive power markets with market-based fuel prices and time-of-day wholesale prices would send the right signals for developing new power sources, unlike the rigid PPAs in place today. However, the DisComs are nearly bankrupt, and, on average, lose money on every kilowatt-hour (kWh) sold, complicating the establishment of a competitive market. “Fixing” India’s coal system is nearly impossible without addressing distortions across the entire value chain that spans coal mining, railways, power generators, and DisComs. Distortions also exist at the retail level, where commercial and industrial customers pay higher rates to subsidize other electricity consumers. Customers paying higher rates are those most likely to shift to RE self-generation, robbing the DisComs of their best customers.

Coal faces headwinds globally and there are two main types of opposition to coal. First is the concern over coal’s externalities, both local pollution and greenhouse gas emissions with global consequences. Second is the belief that India doesn’t need as much coal, as renewables now provide a cheaper alternative, and coal represents a risky and expensive investment.

Both forms of opposition rely on renewable energy as the alternative, but there are subtle differences. For the latter, the alternative just happens to be renewables; it could be any cheaper and available source. For example, natural gas is displacing coal in the United States. For the former, the framing is that is a country should be willing to pay more for cleaner power. If decisionmakers properly priced externalities, then the economics would favor alternatives to coal. However, in India, like in many emerging economies, development needs have often been paramount over environmental concerns.

Although coal use is growing, India is on track to meet its commitments under the Paris Agreement. Nonetheless, high RE targets have a lower impact on emissions than capacity numbers suggest, because baseload coal operates at about three times the capacity utilization of RE. Achieving deep decarbonization of India’s energy mix will take time, and may require a combination of storage technologies, a more flexible and smarter grid, and efforts beyond the electricity sector.

In the meantime, India is focused on bringing electricity to 100 percent of homes, providing affordable power, and making utilities financially viable. The environment is also important, but climate change is not the main driver. Local air pollution is a more urgent issue, and upcoming stringent environmental norms may force some older and dirtier plants to shut down. Despite RE’s visibility and ascent, cleaning up coal, including through more efficient plants, is a more realistic goal than wishing it away.

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