Narendra Modi at SCO meet: Trade, defence ties with Russia, China likely to eclipse presence of Pakistan

It seems that there are good winds favouring the upcoming Shanghai Co-operation Organisation meeting (9-10 June) at Qingdao, in China. A series of “before the summit’ statements and events  indicates that the meeting of the heads of state may lead to a shoring up of the organisation and lay the groundwork for some realistic co-operation among members. The SCO includes China Russia  and India among the large powers, as well as Pakistan and nearly all of Central Asia as permanent members. Among the 6 dialogue partners and 4 observers are Afghanistan, Iran, Nepal, and Sri Lanka in southern Asia, and Turkey, Belarus and Armenia. The kingdom of Cambodia and Mongolia are also represented. That’s a lot of territory, particularly since it covers almost all of India’s neighbours. As the organisers are prone to pointing out, this covers half the world’s population and about 20 percent of world GDP. Not surprisingly, a series of events preceded the summit between the heads of states.

In April, both the external affairs minister Sushma Swaraj and defence minister Nirmala Sitharaman were in Beijing for the SCO meetings on respective issues. The assembled ministers approved an Action Plan for 2018-2022 on the Implementation of the Treaty on Long-Term Neighbourliness, Friendship and Co-operation. Swaraj signed in on everything, but refrained from attesting to the Belt and Road Initiative. The defence ministers' meeting chalked out a series of military exercises between member states. That means India and Pakistan – the two new members of the grouping – will also be operating side by side at such exercises. That’s quite an achievement for everyone. A certain coming together on Afghanistan and Iran was apparent in the final declaration. Somewhere in the middle, NSA Ajit Doval also met with top diplomat Yang Jeichi. That was not formally part of the upcoming summit, but seems to be a reach out to the Communist Party leadership.

In May, the heads of the National Security Councils of member states met in Beijing, with China in the chair. India was represented by Rajinder Khanna, the Deputy National Security Advisor, while Pakistan had General Janjua attending for the first time. It could not have been very comfortable for the latter. Much of the meeting's output was focussed on terrorism of all kinds, including cyber security and developing counter-terrorism co-operation. However, the crux of the SCO effort as a whole is encapsulated in the statement which calls for “the importance of joining forces to create the architecture of a common, comprehensive, sustainable, equal and indivisible security”. That’s part of the so-called “ Shanghai Spirit”. Nations create verbiage towards a specific goal. For India, this was once built around non-alignment, as a protection against expansionist powers. Only time will tell what the Shanghai spirit embodies.

Narendra Modi being welcomed on his arrival in . Twitter/@MEAIndia

Narendra Modi being welcomed on his arrival in Qingdao, China. Twitter/@MEAIndia

One aspect of this spirit was soon apparent. On 5 June, Russia's president Vladimir Putin flagged India, China and Russia as the major players in the SCO due to their strong economies. Seething under a series of the most stringent sanctions yet launched by the United States, Moscow is scrambling to find ways to sustain its recent rise of influence in world affairs. These sanctions target not just government, business entities and financial and clearing institutions, but also the innermost circle of Putin supporters. Russian oligarchs don’t look kindly at such happenings. With that level of threat, the president has a strong motivation to look harder at the growing Indian market, and make the most of Chinese investment circles. Moscow, therefore, sees the SCO as an alternative financial and trading platform that can nullify the effect of US sanctions. While the sheer breadth of SCO representation is considerable, the reality is that the global financial markets are still dominated by the US, and about 50 percent of world trade is conducted in US dollars. However, an SCO that stands together against sanctions and trade wars is undoubtedly a power to contend with.

Russia has lobbied hard to get India into SCO, and the trade-off was apparent at the informal summit at Sochi, where Prime Minister Narendra Modi not only reiterated assurances of friendship, but also indicated that India would go through with pending defence deals. At the summit, India can count on Russian support in an organisation which has sworn to fight the “three evils” of terrorism, separatism and extremism. That’s the language India likes to hear.

In China, the upcoming summit has been on a ‘countdown mode' in the media, signifying how important it is to the powers that be in Beijing. As tensions in the South China sea continue to heat up, Beijing has every inclination to take on new allies. China’s own concerns tally remarkably with that of India and Russia in terms of tariff wars and trade sanctions. However, New Delhi has not hesitated to put up its own tariff barriers in the face of a $51 billion trade deficit with China. A commerce ministers level meeting in March 2017 almost came to a dead end, but eventually both sides were able to agree to a 'roadmap' to allow Indian products like basmati rice and rapeseed. A road map is not an agreement, and a solution to this will remain central to a government which is focussed on 'Make In India'.

Meanwhile, at the summit itself, Russia, China and India are likely to be on the same table on the issue of US sanctions on Iran. New Delhi has shown itself determined to go ahead with the Chabahar port, with the explanation that India only needs to follow UN sanctions and not US directives. China has invited Iran’s president Hassan Rouhani to attend the summit, while Russia recently signed on to an interim agreement for free trade together with members of the Eurasian Economic Union. Again, this is a commonality of interests that defies the US vision of a world order.

India’s positioning at the summit, however, is likely to be highly ‘nuanced’, playing to different audiences. The summit comes at a time when the US has made a rather grandiloquent gesture of renaming the Pacific Command as the Indo-Pacific command under a “Hollywood to Bollywood” tag line. Add to this that the second meeting of the so called “Quad” – comprising the US, Australia, Japan and India took place on the sidelines of the ASEAN meeting. Though India was represented only at the Joint Secretaries level, and issued its own statement largely reiterating earlier principles, it also added a phrase stating that India’s vision for the region was outlined in the prime minister's keynote address at the Shangri-la dialogue.

Members of the Indian diaspora in China welcome Narendra Modi in Qingdao, China. Twitter/@PMOIndia

Members of the Indian diaspora in China welcome Narendra Modi in Qingdao, China. Twitter/@PMOIndia

That speech by Prime Minister Modi may well turn out to be a defining one for Indian foreign policy making. Pegged on India’s very real historical ties with the region, it goes on to provide one of the finest balancing acts in diplomacy seen in recent times. At one go, the speech spliced together the concept of a multipolar order, ‘privileged’ ties with Russia, the overcoming of hesitation in deepening ties with the US, and a ‘layered’ relationship with China that was tagged with a ‘vision of co-operation’ to stabilise Asia. In addition to all that was a mention of the South China Sea – clearly deliberate even if linked to trade routes – and references to expanding military/naval ties with the countries of south east Asia. This was a statement of clear self-interest, and seemed to hark back to non-alignment with one difference — this time, policy is likely to be backed with a hefty dose of confidence in dealing with the world, unlike the diffidence of the past, when flowery phrases replaced strong action.

This is what India will bring to the SCO – a clear understanding that it will play according to its own rules, and is unwilling to be tied to the apron strings of any power. New Delhi will continue to oppose the Belt and Road Initiative, even while increasing its own connectivity plans to south east Asia through Myanmar, the Multi Modal transport agreement with Central Asian countries, and the North South transport corridor with Russian. None of this is directly of SCO concern, and India will focus on trade wars, terrorism particularly with regard to Afghanistan, and increasing defence co-operation; all of this while keeping a wary eye on further Chinese entry into the neighbourhood. For SCO to succeed, China has to understand Indian red lines, and the informal chat at Sochi, and the meeting at Qingdao should cement this one critical aspect.

To many commentators, the significance of the summit is that for the first time, both Pakistan and India will attend as permanent members of the body. Actually, this is the least important aspect. Pakistan may rant and rave about Kashmir. But events have moved far ahead, and we have bigger fish to fry.


Updated Date: Jun 09, 2018 15:36 PM

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