The Russian ‘special military operations’ launched on 24th February took the world by surprise. Despite clear indications and warnings by the Western intelligence agencies over the past few months that Russia could launch military operations into Ukraine, the West was caught off-guard when President Putin called the bluff. What has followed is outrage and anger against Russia leading to the imposition of the most convenient and safest tool of punitive action i.e., economic sanctions, hoping that these measures would force Russia to recall its troops back. While the world and especially an ineffective UN watches as the events unfold and wait for Russia to finally halt the operations, it is Ukraine and its citizens who bear the brunt of it, feeling short-changed and betrayed by false assurances of the West, especially NATO and the EU.
Is this situation unique? Are there no similar cases that could manifest into something so ugly like in Ukraine right now? The answer is sadly – ‘No’. Global geopolitics is strewn with potential conflict points like in Ukraine. Coming years and decades could very well see some of them unfold, especially with strong national leadership and ‘globalization being replaced by nationalism’ in the past decade. China is one such nation that has been testing waters in its neighbourhood and is keen on expanding its reach and influence.
The ‘China factor’ is one of the fundamental reasons for the formation of multinational forums like QUAD, AUKUS etc., in the Indian and Pacific Ocean regions. China’s act of seeking unprovoked conflict across Indian Territory in Ladakh and the North-East in the recent past pose a danger of potential conflict in India’s immediate neighbourhood. While China may not lead any formal NATO type military alliance, a loose military pact with vulnerable countries, including a NATO type deployment overseas by China in such countries, cannot be ruled out in the future.
China and South Asia
China and its engagement in South Asia invoke two names straight away – Pakistan and India. While Pakistan over the past few decades has virtually become a vassal state of China, India has withstood China firmly, with an open hand of friendship but a strong and telling response to any military misadventure by China, be it Doklam in 2017 or the Galwan Valley in 2020. It is, however, the smaller nations in the Indian subcontinent, vulnerable to China’s advances, which need to be watched closely over the next years and decades.
China has been actively pursuing ties with nations in South Asia, often coming to their rescue with financial aid and building important infrastructure. In most such cases, it eventually turns out to be a debt trap as these nations are not able to pay back loans and end up leasing assets to China. The Hambantota port in Sri Lanka is one such example that has been leased for 99 years to China for more than one billion dollars as a debt swap for Chinese loans. Control of Hambantota port gives China a critical advantage in securing its trade transit through the sea lanes of Malacca Strait in the Indian Ocean. If and when the Chinese navy develops its base there, it will not only help secure its own sea trade but also present a strong deterrence capability against its adversaries.
Bangladesh too has been actively wooed by China. The two countries have a Defence Cooperation Pact which covers weapons production too. Chinese firm ‘Vanguard’ even secured a contract for setting up a Maintenance and Overhaul Facility for FM-90 Missiles in Bangladesh. In 2016, Bangladesh also joined the Belt and Road Initiative (BRI) of China.
The Maldives has been on China’s radar for a long time. China got a break in 2013 when Abdulla Yameen became its President and decided to open up to China. Maldives signed a Free Trade Agreement with China and soon became a formal member of China’s BRI. China has already executed major projects like a new 3,400-meter runway at the Male international airport and a bridge linking Malé to the island of Hulhumale to boost tourism.
Nepal too is vulnerable to pressure and coercion by China. Most recently, just a few months after the Galwan Valley clash in June 2020 between Indian and Chinese troops, Nepal presented a new political map that marked the Indian territories of Kalapani, Lipulekh and Limpiyadhura as Nepalese territory, which obviously took India by surprise. Earlier, in 2014, China overtook India as Nepal’s largest FDI partner and in 2019 President Xi Jinping paid a state visit to Nepal, the first by a Chinese President in 23 years, elevating their ties to “Strategic Partnership”. Nepal is also a part of BRI. China Study Centres spread across Nepal too are a source of concern for India.
Bhutan has historically relied on India for security but is not insulated from Chinese advances. Doklam standoff in 2017 was an indirect pock at Bhutan and recent media reports of China constructing two villages in territory well within Bhutan just 20 odd miles from Doklam are a clear sign of worry to both India and Bhutan.
As regards Pakistan, any access or advances by China in Pakistan are a no-brainer and ‘a given’. Pakistan has already ceded Aksai Chin in the North to China and the development of Gwadar port in the Arabian Sea as a Naval Base for China in the future cannot be ruled out.
Myanmar and beyond India’s immediate neighbourhood Afghanistan are equally vulnerable to China and have often indicated their growing reliance on China in developing their nation’s economic and security apparatus. Any developments there too have a direct impact on India’s national security interests.
Implications for India
India has long and turbulent land and sea borders to protect. In addition, it has two proven adversaries on its flanks, Pakistan and China. The vulnerability of its neighbours to Chinese advances compounds India’s security dilemma. Although, unlike NATO, China does not have any formal military alliance but its economic favours slowly turning the screws into a loose and coerced military/security pact, even if done bilaterally with some nations, cannot be ruled out. Unlike in the past when China was not known to seek military bases outside its territories, its outreach in the past decade has already resulted in its naval base in Djibouti, with the possibility of more additions when some of the leased out civilian ports too start basing Chinese naval assets. The BRI is already giving unparalleled reach into the countries which are part of it.
India has been so far successful in thwarting China’s advances in its neighbourhood with deft diplomacy and has even helped its neighbours with credit to prevent them from falling into China’s debt trap. But, can such a model sustain itself all the time? What if China can establish itself militarily in its neighbourhood? If and when such development takes shape, what should India do? Should India keep holding off till it reaches a ‘no further’ situation like Russia faced, having witnessed NATO’s expansion eastwards in Europe for the past three decades before finally saying ‘enough is enough’ and take punitive military measures to safeguard its sovereignty?
If India is forced to do so, what will be the implications? Will it too be put under severe economic sanctions and cut-off from the international banking and financial systems? Like Russia, India is a nuclear weapons power. However, it does not have the ‘veto’ in the UN Security Council nor does it have large reserves of crude oil and natural gas to be used as a bargaining chip. Also, like in the past during the 1971 War and the Pokhran nuclear tests in 1998, India cannot bank on Western support. With China being the antagonist in the scenario, India will again have to bank upon Russia for support among the ‘big nations’ along with other friends. India has to be prepared for such an eventuality.
India is among the top emerging economies of the world. It is however heavily dependent on imports in some of its very critical sectors; energy, defence, technology etc. To safeguard its interests and withstand any external pressures, it has to take a conscious effort to reduce import dependence in such sectors. The Atmanirbhar Bharat (Self-reliant India) initiative of the government is one such step in the right direction.
Presently, India imports almost 70 per cent of its defence equipment, with Russia being the major supplier. However, two things have changed in the past few years; indigenous production and diversification of import basket beyond Russia. Rafale aircraft from France, Apache and Chinook helicopters from the US and large numbers of drones, missiles, sensors and communication technology from Israel are some such examples of diversification. Tejas fighter aircraft, nuclear-powered submarines, a third aircraft carrier, Agni/Prithivi/Brahmos missiles, artillery guns are some of the examples of the ‘Make in India’ initiative through extensive partnership with private industry. Such steps could, in the coming decades, ensure a well-diversified basket of defence production and overcome reliance on one country.
As regards energy, India is majorly dependent on imports of oil and natural gas. While we have a diversified portfolio of nations from where it is imported from; West Asia, Nigeria, US, Russia and even Venezuela (to some extent), the supply and price volatility has always been a matter of concern to India. Specific deals with Saudi Arabia, UAE to develop and store strategic oil reserves, developing alternate sources of energy through renewable energy, use of agriculture products to produce ethanol, nuclear power plants etc., are some of the measures already being undertaken to help India overcome crisis.
Economically, while India is now the sixth-largest economy by GDP, it is heavily dependent on external factors like dollar exchange rates and western digital payments systems (SWIFT, Master card, Visa etc.) As per the RBI, in September 2021, the Reserve Bank held 743.84 metric tonnes of gold reserves of which 451.54 metric tonnes of gold is held overseas in safe custody with the Bank of England and the Bank for International Settlements (BIS). The Russian example clearly indicates that such a large amount of gold reserves offshore and heavy dependence on the Western financial system could prove restrictive, especially in the case of economic sanctions.
India has already undertaken some measures, largely due to the government’s emphasis on self-reliance. Rupay card (as an alternate to Visa/Master-Card), UPI System of digital payment, Rupee payment deal with specific countries like Iran are some of the steps already undertaken by India to offset this vulnerability, but such steps need to be pursued further to insulate India from external pressures. The rupee needs to develop as a freely exchangeable global currency in Forex payments and India could take the lead in reducing global dependence on dollar trade with like-minded countries. The announcement of digital currency ‘Digital Rupee’ by the Finance Minister in the Annual budget too is an interesting development to watch out for.
Technology, especially IT (Hardware) is another Achilles’ heel for India. While we are masters in developing software technologies, for hardware, we are still dependent on imports. The development of high-tech semiconductor chips, motherboards, servers etc., has still not taken off fully. A recent call by PM Modi to promote localisation of servers in India to ensure the security of data, incentives to private industry to set up labs for the production of semiconductor chips etc., steps in the right direction but it is still a long way off. Satellite navigation system NavIC developed by India is a major technological boost on self-reliance as it reduces dependence on US-based GPS system for navigation, critical for military weapons requiring precise guidance for accuracy.
Next is the field of Agriculture and Mineral resources. While India is a large producer of most bulk products like wheat and rice, it still imports agricultural products like pulses, vegetable oil etc. The only substitute for reducing dependence on these as well as other attractive and imported agriculture products, in the long run, is to incentivise their production locally. Minerals, being natural resources are dictated by geography and there is very little that India can do except to diversify ports of import to reduce dependency on one/group of nations. Rare earth metals and coal form the major group of minerals imported, with rare earth metals being crucial components in high technology devices.
What Should India do
While the possibility of what has been discussed may seem remote and farfetched, China’s roadmap for the Twenty-first century may indicate otherwise. India, therefore, has to remain alert. SAARC is a defunct forum and will always remain hostage to Indo-Pak issues. India has to therefore forge/formulate other suitable forums with neighbours to seek convergence on regional security issues. Bilaterally too, India could forge defence and security structures that guarantee that no foreign forces, especially China, are so positioned as to be a threat.
A clear set of rules need to be defined, as to what India will consider as red lines when its security and territorial integrity is considered threatened. Will India tolerate the positioning of China’s military assets in several neighbouring countries before such a red line is called out or will it be called out at the first instance that China’s military assets are positioned in the neighbourhood? Will a Chinese incursion across the LAC like Doklam or Galwan coupled with threatening military posturing in such a country is considered a red line? If it happens, what could be the scale and scope of punitive measures undertaken by India? Will China’s military presence/positioning in Pakistan too form a red line or is it already factored into India’s war plans?
How India will build up its argument in the international forum and which nations can it bank upon for support, will have to be clearly worked upon. Direct military action by external powers may not follow, especially considering that India is a nuclear power with a well-established Nuclear Triad, but economic sanctions are the norm now and should be expected. In such a scenario, what are the kind of expected sanctions and how will they impact our critical sectors need to be brainstormed. As a ‘thumb rule’ India should indigenise and diversify in the next decade in all such sectors in such a manner that we are self-reliant on at least one-third of our requirements and that no more than one-third of India’s finances/security/defence equipment/imports are adversely affected if one part of the global community boycotts India.
Endorsing the idea of self-reliance, Gen Naravane, Chief of the Army Staff, speaking at an event on 8 March acknowledged that the biggest lesson of the Russia-Ukraine war is that we have to be ready to fight future wars with indigenous weapons.
The Russia – Ukraine war has challenged the global norm, accepted and practised to a large extent after WW II. It has thrown open possibilities which were hitherto fore discussed only as a part of academic discussions. India is located in a very vulnerable neighbourhood with potent adversaries on its flanks and it cannot afford to relax. It has to take proactive steps to safeguard its national security interests and reduce its dependence on imports in critical sectors, and thereby, its vulnerability to sanctions if it comes to that.
China has demonstrated that it is not a neighbour that can be relied upon. Any military misadventure by China which goes beyond locally manageable issues can spiral out of control very quickly and bring us face to face with two nuclear weapon powers with their guns trained at each other. India’s deft diplomacy will hopefully hold out as the first line of defence and prevent any mishap. But we need to be prepared for all possible outcomes. The current matchup between the Dragon and the Elephant looks delicately poised and ready to unfold in the ensuing decades. Only the alert and well prepared will prevail.
Col Rajeev Agarwal (Retd)
