Tag Archives | trade

No Pakistan-specific non-tariff barriers

Contrary to the prevalent myth, India doesn’t have any Pakistan-specific non-tariff barriers

It is a myth we have been perpetually fed, not only by Pakistani analysts but also by their Indian counterparts, both of whom wish to mirror-image India with Pakistan. We have been told that Pakistan’s decision to not grant the Most Favoured Nation status to India when India has already granted Pakistan the same status in 1996 has no meaning because India has applied Pakistan-specific non-tariff barriers for imports from Pakistan. As this has practically nullified the benefits of bestowing the MFN status on Pakistan, Pakistan’s decision to not grant the MFN status to India is justified.

Now the truth. Here is what Pakistan’s Commerce Secretary told Pakistani Senate Committee on Commerce:

He said the demand was made after exporters complained about Indian non-tariff barriers which could hinder trade. He however, said “there are no Pakistan-specific non-tariff barriers but India is strict in applying (quality control) standards”.[ET]

On such myths are the presumptions of India’s esteemed columnists, analysts and Track-2 types fed to this country. The truth is however, even now, unlikely to open their eyes. These Indians may have their reasons to be apologetic about Pakistan but why has the Indian government maintained a studied silence on the matter. None of its ministers or diplomats have put this information in the public domain.

This should not surprise us either because Indian governments have a history of being nice to Pakistan. In the words of Pakistan’s Commerce Secretary:

In 1996 India removed restrictive regime and gave Pakistan MFN status and since then it has remained subject of immense debate based on political considerations rather than purely on trade and economics.

India did not contest MFN status in WTO providing an opportunity to Pakistan to walk away despite violation of international trade laws. “Had India gone to the WTO, it would have embarrassed Pakistan”, said Mahmood.[ET]

From 1996 till date, India has had governments from across the complete political spectrum — Third Front, BJP-led NDA and now the Congress-led UPA. This period also coincides with the phase where India has suffered the most from terror controlled by Pakistani state agencies. It was during this period that Kashmir was wrecked by terror perpetuated by Pakistan, and the Kandahar hijacking, the Kargil conflict, and the 26-11 Mumbai terror strikes took place. At no point did India raise the subject of MFN status in the WTO and shame Pakistan in front of the world community. Moreover, it could have also raised questions about the viability of Pakistan’s continuation in the WTO, leading to its further economic isolation.

India, of course, never chose to exercise that option. This consensus across our political spectrum to be nice and apologetic to Pakistan — even under repeated grave Pakistani provocations which have consumed thousands of Indian lives — defies comprehension.

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India’s good behaviour

Pakistan is citing India’s good behaviour after suffering from terror as an example to Afghanistan

This is surreal. Pakistan’s ambassador to the UN, Abdullah Hussain Haroon lecturing Afghanistan President, Hamid Karzai by citing India’s example:

“I wish President Karzai could take a leaf out of the Indian book, instead of being accusatory towards Pakistan,” Haroon told PTI here. H said even if a “leaf falls on the grass in Afghanistan,” the Afghan leader points a finger towards Islamabad, saying the “Pakistanis must have done it. It does not work that way. I think India would be a good example for Karzai to follow in which he should realise that this accusatory game gets no where”.

The Pakistani envoy said if India and his country are building ties, Afghanistan should “take a cue” and also be on the same track and “learn from India which has shown, in my mind, such enormous maturity”. “Let’s talk to each other…. May be something good comes of it. That is what is happening between India and Pakistan. I think it is a proud moment for both countries,” he said.

Haroon further said the soothsayers who feel that another 26/11 would break up the India-Pak dialogue process should not be paid any heed to and instead a message should be sent that the talks will continue to progress despite any such incident in either country. “Despite whatever happens, we (need to) keep the talks going so that no one is encouraged to take the track off,” he said adding “now that we have started, we will keep talking”. Standards have been set in New York, New Delhi and Islamabad and the momentum has to be taken forward, he said.[Outlook]

As if almost on cue, India’s former foreign secretary Kanwal Sibal has a column in today’s Telegraph (Kolkatta) where he lambasts Indian government for the behaviour which has earned such high praise from the Pakistani diplomat.

The romantics in India never lose faith in the possibility of friendship with Pakistan. To that end they will advocate the proposition of an uninterrupted and uninterruptible dialogue with Pakistan, one that removes any pretence of a link between dialogue and terrorism and therefore suits Pakistan. This is why its neophyte foreign minister has begun touting the same phraseology.

Pakistan’s relations with India have become less volatile in recent months largely because of the Indian government’s extraordinarily soft approach. India will have another round of a composite dialogue with Pakistan; it is reconciled to Pakistani prevarications on justice for the Mumbai attack. Our approach seems to be that if our reasonable demands are not met, the demands should be dropped. We seek to deblock situations by exploring concessions.

We have lifted our objections to World Trade Organization-violative concessions by the European Union to Pakistan in the textile sector. At the recent summit of the South Asian Association for Regional Cooperation in the Maldives, we have promised a preferential trade agreement with Pakistan even though it continues to exclude India from the South Asian Free Trade Area. Pakistan’s backtracking on the granting of the most favoured nation status to India has not discouraged us from making ill-timed gestures and losing bargaining leverage unnecessarily. What diplomatic purpose is served by praising the prime minister of a country most hostile to us as a man of peace, particularly as he is in no position to deliver peace to us?[Telegraph]

This is the essence of the argument. If Indian approach is that ‘if our reasonable demands are not met, the demands should be dropped’, Pakistani establishment will love and adore the Indian officials. And their audacity has reached such surreal levels that they are lecturing Karzai on how to respond after suffering from terrorist attacks planned, organised and supported by Pakistani state agencies and their proxies — the way India has responded after every terror strike from Pakistan.

Indians deserve better than this craven behaviour from their own democratically elected government. And Government of India, you don’t need these good behaviour certificates from Pakistani diplomats when the perpetrators of terror against Indians continue to thrive in Pakistan. If Delhi needs to make something uninterrupted and uninterruptible, it has to be this demand to bring those perpetrators to book. The rest can wait.

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Most Favoured Notion

Temper your excitement over Pakistan granting MFN status to India

Forget the big announcement by Pakistan’s Information Minister (and reactions in the international media), the official statement of the government of Pakistan says something which err… isn’t exactly the same as grant of Most Favoured Nation (MFN) status to India. Dawn newspaper quotes the official press note on the subject in its story:

“The cabinet fully endorsed the efforts of the ministry for complete normalisation of trade relations and directed to implement in letter and spirit the decisions taken in this regard,” the statement read. It further said that the cabinet gave the ministry “the mandate to take the process of normalisation forward, which would culminate in the observance of MFN principle in its true spirit”.[Dawn]

Something that would some day in the future perhaps “culminate in the observance of MFN principle in its true spirit”!

But that is not all. Press Trust of India’s Pakistan correspondent Rezaul Hasan Laskar tweeted (here, here and here) that even that official press note was missing from Pakistan government websites today morning. And when Pakistan’s Ministry of Foreign Affairs was pressed about the issue in the evening, its spokesperson chose to read out  from the ‘missing’ press note in response.

Going by the way things work in that part of the world, it is possible that the MFN status may suddenly be again bestowed upon India. It would be a welcome gesture from Pakistan, but even by the standards of gestures between India and Pakistan, bigger gestures have failed to make an impact. There has been no bigger unilateral gesture for peace than the then Indian Prime Minister Atal Behari Vajpayee’s bus ride to Lahore which got the Kargil incursions as Pakistan’s response.

If it were to happen, this would not be the first time Pakistan would have granted the MFN status to India. As per G Parthasarthy, Pakistan had granted the MFN status to India in 1976 and withdrawn it three years later. Moreover, India had granted the MFN status to Pakistan in 1995 (at the peak of Pakistan’s proxy-war in Jammu and Kashmir) and it has taken 16 years for Pakistan to make an attempt to reciprocate it. That too when that declaration is a commitment Pakistan is bound to follow under its WTO obligations. As and when the announcement is made, it will have to be examined in detail to understand the meat in that announcement. For as we know from previous experience, it could be a hollow gesture with little substance.

In one way, it is an example of our rather low expectations from Pakistan that even a whiff of an announcement of a much-delayed gesture gets many Indians so excited that they are wiling to forget that all perpetrators of terror against India and Indians continue to be supported by the Pakistani state. This gesture of announcing the MFN status for India — and it has yet not happened — does nothing to alter the strategic calculus of Pakistani establishment about India. It is a desperate emergency measure to overcome their economic crisis. Trade with India will generate more revenues for a cash-strapped Pakistani state. Unless the nature of Pakistani state is altered, we all know where the major share of money from the Pakistani state coffers will go — to the Pakistani military-jehadi complex. And India is the most favoured nation of Pakistan’s military-jehadi complex. Most. Favoured. Nation.

To understand why bilateral trade will not resolve problems between India and Pakistan, read this blogpost on the subject. And a more recent one which updates that argument.

*Title of the post courtesy this tweet by @joydas

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Bumpy road of Indo-Pak trade

Do not deny the reality. Bilateral trade isn’t diplomacy.

There is simply too much hype surrounding the bilateral trade talks held between the commerce ministers of India and Pakistan. Although the Joint Press Statement at the end of the ministerial talks didn’t go beyond platitudes, many analysts have pinned their hopes on these trade talks providing the breakthrough in Indo-Pak relations. The reality may be a bit different. Here are the reasons why.

One, there are few complementaries in trade between India and Pakistan. Even though it shouldn’t matter theoretically, the political nature of Indo-Pak relationship will not allow bilateral trade to flourish in the absence of such complementaries. If you compare this to the really flourishing bilateral trade partnerships that India has — with the US and with China — there are enough complementaries with them pushing the trade forward.

Two, more than trade, Pakistan actually needs Indian investment (or for that matter, any foreign investment). Considering the security scenario in Pakistan when even Chinese companies have been forced to pull out of that country, there is little chance that Indian businesses would be willing to invest there. The same was reaffirmed by Confederation Indian Industry (CII) in its latest report on Indo-Pak trade where it focused on the need to encourage bilateral trade — not investment — in healthcare, IT and entertainment.

Three, the veto over trade decisions concerning India in Pakistan is only with the generals at Rawalpindi. In India, the generals have no say but there are various business lobbies and interest groups — with their political constituencies — which influence decision-making over trade issues in India. Notwithstanding the statements from the Pakistani minister, it would be instructive to watch the stand that India takes in the WTO meeting on 20th October over the EU decision to provide trade concessions on 75 goods, primarily cotton apparels, representing 900 million Euros or 27% of the EU’s imports from Pakistan. Government of India has officially maintained a studied silence over the matter so far. Unless Bangladesh continues to block the EU move to provide concessions to Pakistan, India might find it hard to sell this political move to its cotton garment exporters, most of whom are based in the state of Tamil Nadu.

Four, Pakistan is obligated under the WTO rules to bestow the Most Favoured Nation (MFN) status on India, after India had done so in the 1990s.  But the official Urdu equivalents of the MFN, wherein the arch-enemy India would have to be called Sabse Pyara Mulk or “Pasandeeda Tareen Riyasat”, make it impossible for any government in Islamabad to do so. With a positive list of items which only can be imported by Pakistan from India in place — which is likely be replaced with a negative list in consonance with the SAFTA guidelines — granting of the MFN status by itself would make little difference to actual trade between the two countries. By linking these steps to India’s removal of non-tariff barriers — such as stringent certification codes, customs rules, security clearances and movement restrictions — Pakistan may end up further delaying this process of improving the trade ties.

This blogger has long believed that no volume of trade will resolve the problems between India and Pakistan, unless the structure and the nature of the Pakistani state, controlled by its military-jehadi complex, is changed. Trade is neither diplomacy by another means nor can it be an alternative to diplomacy. Trade will be driven by economic interests of people and businesses involved, and not by the strategic calculations of the two governments or the wish-lists of strategic analysts. While all attempts must be made to facilitate trade between the two countries, let us not raise unrealistic expectations and place all our hopes of normalcy on this one single mantra of bilateral trade. Else, we would be guilty of the mistakes committed by the candle-lighting brigade at Wagah — of denying the reality and treating hope as a policy.

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GHQ’s Most Favoured Nation?

In Pakistan, the army headquarters will decide whether India should be granted MFN status or not.

At the release of the findings of the NAF/NWC Pakistan Study Group’s report, “Pakistan and the United States: At a Strategic Crossroads,” Mohsin S. Khan, Senior Fellow at Peterson Institute for International Economics spoke about one the recommendations made in the Report: Promote Regional Trade. An extract from the recommendation:

Most significantly, improved trade with India represents a natural source of potential growth for Pakistan, and also a potential leverage point for easing tensions between the two states. Just as after World War II former enemies France and Germany created the coal and steel common market that spawned the European Union, the more India, Pakistan and other regional players collaborate along economic lines, troubling political issues will begin to be seen as nuisances in the way of an emerging regional prosperity. Populations gathered into a cycle of growing, interdependent prosperity will have even more intense motives to avoid violence and build effective governance. India retains high tariffs on Pakistani imports, Pakistan has not yet reciprocated Most-Favored Nation (MFN) status with India (although it has said the matter is under consideration), and little effort has been made to enhance the less than $2 billion in official and unofficial bilateral trade that goes on (as opposed to estimates of 10 times as much which could take place in a depoliticized environment). [Page 15]

Here are the tweets on Mohsin’s statement made at the release of the Report:

[blackbirdpie url="http://twitter.com/#!/afpakchannel/status/109286378130518016"]

[blackbirdpie url="http://twitter.com/#!/afpakchannel/status/109286631055433728"]

[blackbirdpie url="http://twitter.com/#!/afpakchannel/status/109286767055745024"]

But the most intriguing was this statement:

[blackbirdpie url="http://twitter.com/#!/afpakchannel/status/109286959335227393"]

For all the reports about Pakistan planning to grant Most Favoured Nation status to India that were making news recently, the reality is that it is the Generals at Rawalpindi who will decide whether India and Pakistan can trade freely or not. If this sounds absurd, it is so because it is absurd.

This has two direct lessons for policy-makers in India. One, at no point in time should they forget who the real masters in Pakistan are, especially when it comes to formulating policy towards India. Two, it bolsters the argument made by this blogger (see this post) that bilateral trade cannot dramatically alter the relationship between India and Pakistan unless the Pakistan military-jehadi complex is dismantled first.

Let us harbour no illusions. India’s path for seeking permanent peace with Pakistan has to begin with the dismantling of the Pakistani military-jehadi complex. Nothing less will suffice.

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Underwhelming CBMs

Only two concrete Confidence Building Measures on Kashmir after the foreign ministers meeting

A few Confidence Building Measures (CBMs) on Kashmir were expectedly announced after the meeting between the foreign ministers of India and Pakistan. The outcome was underwhelming and far lesser than the expectations. It has been speculated for a few months now that these CBMs could include starting a Kargil-Skardu bus, increasing the frequency of the Srinagar-Muzaffarabad bus, a banking mechanism to replace the existing barter system, enhancing the list of items allowed to be traded, and increasing the number of trading days from two to four every week.

While the list of CBMs, as laid out in Paragraph 11 of the Joint Statement, does sound rather long, most of it is full of promises. There are, in fact, only two concrete measures among the list.

iii) The number of trading days stand enhanced from 2 to 4 days per week. Truck movements shall take place on Tuesdays, Wednesdays, Thursdays and Fridays, both on Srinagar-Muzaffarabad and Poonch-Rawalakot routes.

v) Both sides will expedite the processing time for applications, which shall not be more than 45 days.[link]

Rather than the 3-4 months it currently takes to process applications for travel across the LoC, bringing the time down to 45 days or less is indeed a positive step. Those in the know suggest that the increase in days for cross-LoC trading was done for security purposes as the authorities found it difficult to search the vehicles during two days of trade earlier.

If the cross-LoC trade has to flourish, the most important step is to find a banking mechanism to replace the existing barter system. No modern trade can work on barter system of 21 items undertaken by two parties who are not even in direct communication with each other. It is disappointing that the two countries could not find a way to get this essential prerequisite for trading in place.

No one expected a major breakthrough at the meeting of the foreign ministers but this announcement of CBMs — after the deliberations of a Joint Working Group on the subject —  is seriously underwhelming. Perhaps, it is time we tempered our expectations on minimal incremental positive steps from such interactions even further.

Meanwhile, the Indian MEA continues to finely parse its foreign secretary’s comment over a sentence in the Joint Statement. The sentence in question was indeed diplomatic drafting of a high calibre: “The ministers reviewed the status of bilateral relations and expressed satisfaction on the holding of meetings on the issues of Counter-Terrorism (including progress on Mumbai trial) and Narcotics Control….”

So the government of India is satisfied with holding of meetings to discuss progress on Mumbai trial but not satisfied — actually silent — about the progress of trials per se. Sounds bizarre. Maybe because it is bizarre.

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PM’s Africa trip

Quick thoughts.

Now that the Indian Prime Minister is at the fag-end of a historic week-long Africa trip, it is time to ask a fundamental question: What is the goal of India’s Africa policy?

  • Furtherance of bilateral trade with Africa, mainly by promoting Indian private sector businesses in Africa
  • A quest to secure Africa’s resources — oil, gas and minerals — to quench a fast-growing India’s thirst
  • Formulate a long-term strategic relationship with Africans by deeply engaging various sections of African society, businesses and government
  • Ensure African support for India’s bid for a permanent seat at the UN Security Council
  • Pure altruism to promote democracy, ensure growth and bring prosperity to Africa

Whatever be the theoretical proclamations by the mandarins at Delhi, Indian policies towards Africa in practice will always remain complex mixtures of benevolent liberalism, transactional calculation and strategic realism, with one or more of these facets dominating the others depending on the geo-political and geo-economic situation, and the focus of the Indian government at that point in time.

By the way, did anyone else also notice that military cooperation agreements between India and African countries are conspicuous by their absence during PM’s Africa trip? Delhi seems to have missed a trick here by perhaps forgetting that “Smart Power = Soft Power + Hard Power”.

The darkest thing about Africa has always been our ignorance of it. ~George Kimble

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Shun the talk of talks

Another round of India-Pakistan peace talks is an idea not even worth considering now

The clamour for next round of India-Pakistan peace talks seems to be slowly building up in the Indian media. It is driven by people who indulge in mirror-imaging and search for equivalence in actions on both the sides — from Delhi and Islamabad — for the current state of India-Pakistan relations.

Of course, their reason for recommencing the bilateral talks remains the same — there is no alternative. In that sense, the talks are important just for the sake of talking. This, in turn, is led by a naive belief that talks with Pakistan equate peace in India. Read this old blogpost on why peace-talks do not actually mean peace. If the proof is in the pudding, then the drastic reduction in number of terror strikes in India since the stalling of talks with Pakistan in November 2008 — only the Pune bakery and Varanasi blasts have occurred since — should be a contrarian exemplar for these advocates of peace-talks.

Now, whom are we going to be talking to in Pakistan? The puppets in Islamabad’s foreign ministry can change but when it comes to India, the strings will always be pulled by the GHQ at Rawalpindi. The Washington Post recently reminded us that General Kayani “is one of the most anti-India chiefs Pakistan has ever had,” is what one US official said. This is also borne by the report in the Dawn by Cyril Almeida, where the unnamed senior official who spoke to him, as it emerged later, was none other than General Kayani himself.

“The people of Pakistan measure the strength of US-Pak relations on the scale of US-India partnership.” [Kayani] went on to argue that while Pakistan could not afford to be in a “state of perpetual conflict with India” and has to “strike a balance between defence and development”, “we cannot afford to ignore our basic defence needs.”

In sum, the comments on Afghanistan, India and the US suggest the Pakistan Army’s ‘India-centric’ approach to strategic issues is still very much in place, with only minor adjustments made to accommodate the changed regional security environment in the 21st century.[Link]

Most people failed to notice that in December 2010, Pakistan’s National Command Authority, chaired by its Prime Minister, declared a shift from its stated nuclear policy of ‘credible minimum deterrence’ to ‘credible deterrence’ — the word ‘minimum’ is now missing. A change to credible deterrence implies that Pakistan may develop an assured second-strike capability and build advanced, compact and boosted fission warheads and even develop thermonuclear weapons.

Isn’t it logical then that we should be talking to GHQ directly? No. As this blogpost explains, the idea is unworkable because India simply doesn’t have the capacity to make the GHQ listen.

Many Pakistani commentators have suggested in recent weeks that Pakistan should follow the China model in its relationship. Despite the unresolved boundary dispute, China and India have a flourishing trade and business relationship and Pakistan could follow suit with India. Many Indians believe that only stronger economic ties can lead to a permanent peace between India and Pakistan. This old blogpost explains why this idea of long-term peace is based on faulty premises. In any case, Shuja Nawaz has openly stated that the establishment (an euphemism for Pakistan army) has vetoed any such proposals of Indo-Pak trade.

After six years, even a committed peacenik like the Indian Prime Minister Manmohan Singh seems to have realised the futility of these bilateral talks. Let us at least grant that man the sagacity, the wisdom, the knowledge and the experience of knowing what he is doing, or not doing here. It also confirms this blogger’s belief that the current sentiment of a peace-process between India and Pakistan is but a proverbial dead horse.

When you are riding a dead horse, buying a stronger whip or greater riding ability won’t help it move forward. Harnessing several dead horses together to increase the speed or asserting that “This is the way we always have ridden this horse” won’t help either. Tribal wisdom says that “when you discover that you are riding a dead horse, the best strategy is to dismount.”[link]

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Trading terror with Pakistan

The idea of fattening the Pakistani elite is detrimental to the Indian cause of securing long-term peace.

Over at The Acorn, my fellow blogger Nitin Pai makes a strong case for what he teasingly calls “fattening the Pakistani elite”. This is his way of asking India to unilaterally drop all trade restrictions against Pakistan which will create vested interests among Pakistan’s rich and powerful to ensure stable bilateral relations with India. This seems to be a logically sound and persuasive argument until we examine it a bit closely.

The argument singularly fails to notice the nature of the Pakistani elite. The business establishment in Pakistan is predominantly the feudal land-owning gentry; there is a growing class of entrepreneurs but it is still nascent in shape. The feudal economic elite thrives not on free movement of goods but on quotas, special favours and dispensations. Their ability to thrive in a competitive market is limited. Ergo, free entry of Pakistani goods in India does not necessarily imply their acceptance in the Indian market. Therefore, the argument that unilateral opening of Indian markets will benefit traditional Pakistan elite is rather weak.

Notwithstanding that dissonance, the argument is further predicated on the premise that the Pakistani elite, if it so wishes so, has the capacity to influence the behaviour of the Pakistani Military-Jehadi Complex [MJC], which is the primary Pakistani entity hurting India. It is a question of judgement for there is little historical data available to suggest that the Pakistani elite has had the gumption to take on the Pakistani military establishment ever earlier. However, there are two examples — though not directly India-related — which lead us to doubt this fundamental premise.

First, the conduct of nuclear tests by Pakistan against the advice of, and despite promises of a liberal economic package by the international community if Pakistan were not to do so. These tests may have hurt the business interests of the Pakistani elite in a big way but it had to still go along with the wishes of the Pakistani military for the sake of patriotic pride.

Second, Sharif brothers, with their land holdings, business interests and political clout, would perfectly fit the bill of the Pakistani elite that India would hope to engage by dropping trade restrictions. Despite being backed by the Saudis, when the Sharifs chose to take on the Pakistani military establishment led by General Musharraf, the Sharifs were promptly kicked out of their own country.

Evidently, whatever may be the interests of the Pakistani elite, their ability to influence the MJC is constrained and limited. When the question concerns India, Pakistan’s arch-enemy in the eyes of its MJC, the situation for the Pakistani elite would be rendered even more difficult due to the issue of patriotism.

Moreover, the creation of the vested interests in bilateral trade with India would only be a powerful enough tool if the Pakistani elite were solely dependent on India. This means that India would have already diplomatically manoeuvred to demolish the existing strong client-patron relationships that Pakistan has — with the US, China and Saudi Arabia — and which benefit the Pakistani elite immensely. But if India were able to achieve this diplomatic coup, it would then render the whole debate over trade relations with Pakistan meaningless.

But the argument goes that there is no harm in giving the suggestion a try as it only “involves modest risks and is reversible.” Modest or not, the biggest risk is that any unilateral action by India is liable to be considered by the Pakistani MJC as a reconfirmation of its tactics, such that its adversarial attitude towards India pays dividend in the form of unilateral concessions. This will embolden the Pakistani MJC even further and could lead to a misadventure as witnessed earlier in 1965 and 1999. Now that both the countries are declared nuclear weapon states, such a misadventure could be truly catastrophic.

Another obvious advantage of this suggestion is that rather than merely call off talks or threaten to wage a war, India would have another option — to re-enforce the trade restrictions. In case of another terror attack, India’s options may not be solely limited to calling off talks or threatening military action; cutting off trade ties would potentially punish the Pakistani elite. While this may not be possible so easily due to vested interests generated on the Indian side by this trade, and due to the international pressure brought upon India — as is the case with bilateral peace talks — there is a far bigger danger involved here.

Now, the additional space available to the Indian government should allow it to defuse any explosive situation from turning into a full-blown conflict. While this should theoretically secure peace, even the limited space available by way of calling-off and recommencing peace talks has paradoxically acted as a disincentive for successive Indian governments to modernise and upgrade its military capabilities. A credible military capacity is the only guarantor for long-lasting peace with Pakistan. Besides being an important component of any Indian plans to destroy the Pakistani MJC in the long-run, it is the only way to drive a behavioural change in Pakistani MJC and force it to shun the use of jehadi terror as an instrument of state policy against India and Indians in the mid-term. Unfortunately, the lack of political will in New Delhi means that the space available to the Indian government for any non-military action must necessarily shrink if durable peace between India and Pakistan is to be achieved. This has its own attendant dangers and pitfalls but that is a risk worth taking for the sake of securing long-term Indian interests.

Finally, even if the Pakistani elite were to somehow miraculously generate that leverage over the Pakistani military, the MJC itself is not an homogeneous entity as was the case in its previous avatars. There are divisions between the jehadis themselves which means that any such leverage is unlikely to protect India from all types of jehadi terror. In fact, the usual Pakistani argument of “we are all victims of terror” and “this is the doing of non-state actors” could easily lead to a situation where these unilateral trade concessions end up as the new bilateral peace-talks between India and Pakistan. Terror, talks and trade could then all go together.

This is not to say that the idea of unilateral trade concessions creating dependencies is devoid of any merit. It is perhaps the only long-term structural solution for lasting peace between India & Pakistan; but these links can only come into play once the Pakistani MJC has been dismantled. Neither can the establishment of these trade links precede the real big issue of dismantling the Pakistani MJC nor can it be allowed to distract India from working towards that goal.

Relations with Pakistan is a mess inherited by us from the past. It would be a tragedy if we were to use this as an excuse to pass this mess on to our future generations.

in case of another terror attack, India’s options amy not be solel;y limited to calling off talks or threatening military action; cutting off trade ties would potentially punish the pakistani elite 

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The pay commission wrangle draws to a close

But enough damage has been done — trade unionisation of the defence services by the military brass and concomitant political brokering by the government. And will anyone spare a thought for the veterans.

Wealth is thoughts, not things. ~Robert G. Allen

Although it has not been declared officially yet, the final recommendations of the Group of Ministers over the SCPC award for the armed forces personnel are strewn all over the media. From whatever these press reports give out, the outcome of the four core issues is way off the demands of the defence services.

  1. Equivalence of Lieutenant Generals with DGs of police — Not accepted by the GoM.
  2. Equivalence of grade pay of Colonels and Brigadiers with higher civilian counterparts — Not accepted by the GoM.
  3. Enhanced rates of pension for PBOR as per earlier scales — Accepted, with a caveat that it will be till the lateral entry of soldiers to paramilitary forces is not finalised.
  4. Upgradation of Lieutenant Colonels to Pay Band-4 — Accepted, but with two caveats. One, a new scale of grade pay lower than lowest in PB-4 has been created for Lieutenant Colonels. And two, this is only applicable to officers in combat roles and not for officers on deputation with other services and departments.

There are two more related issues that have been highlighted in the media reports. Firstly, the armed forces will have a pay commission of their own from here on. Whether that is a useful development or one that will cause more harm to the services will only be known from experience. Secondly, a comprehensive review to resolve issues relating to command and control functions and the status of the armed forces vis-à-vis the paramilitary and civilian government employees will be undertaken by a high-powered committee.

The trade unionist behaviour displayed by the services has been met with a typical political compromise with caste groups formula employed by the government. The real issues of rot in the defence services and a crumbling higher defence management structure had been off the radar through out the controversy. In any case, the whole debate had eventually boiled down to either emotional rants about sacrifice and tough working conditions or technicalities about grade pay and Warrants of precedence.

The Chairman COSC, Admiral Sureesh Mehta has continuously reiterated that the four core issues with the SCPC were “not about money, but about status and command and control”. Only two demands out of four have been partially accepted by the government and the questions about “status” remain unanswered. But the PMO has told the ministry that the new package is non-negotiable. So what will the service chiefs do? Will they again dare to confront the government or defy the Union Cabinet?

This blogger’s bet is that there will be no further brinkmanship by the service chiefs. The services will try to put a spin on these decisions and portray it as a victory for the armed forces. Not that the government will mind it in the least for the politicians would like to be remembered as the ones who looked after the defence services well. The newschannels (like Times Now and Headlines Today) who championed the cause of the armed forces, would also like to portray this as a victory for the armed forces. Because it will be, by association, a victory for the “activism” of these channels. All’s well that ends well.

Will anyone even spare a thought for the veterans in the whole fracas? This blogger had long held that the veterans were merely being used by the armed forces as a front to project the cases of serving officers. Now that the matter of the serving officers has been finally brought to a close — satisfactorily or otherwise — the veterans will be left stranded to wage their own lonely battle.

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