|
Books on India
REPUBLICAN REFERENCE
Area (sq.km)
3,287,590
Population
1,049,700,118
Capital
New Delhi
Currency
Irdian Rupee (INR)
President
Abdul Kalam
|
Update No: 030 - (27/07/06)
TERRORISM
On July 11, 2006, a series of blasts rocked Mumbai's commuter trains during
rush hour killing more than 200 and injuring 800 people. The blasts came as a
shock to the Indian community and tested the nerves and resolve of Mumbaikars
(the term frequently used to refer to the people of Mumbai) to get back to their
daily lives. One of the most widely believed reasons for the serial bomb blasts
is the confrontation between two extremist political forces in Mumbai; India's
Hindu nationalist Shiv Sena party and Muslim reactionary forces. According to
intelligence sources, any of the terrorist outfits like the Lashkar-e-Toiba, the
Students' Islamic Movement of India (SIMI) and the Kafila-e-Shakt could be the
main organizations behind the 7/11 attacks. There is some speculation indicating
that members belonging to SIMI and Lashkar-e-Toiba have allegedly received
training for three to six months at camps in Jalalabad, Muzaffarabad and other
places in Pakistan-administered Kashmir. The terrorists are said to be deployed
in various parts of the country, and since they are well trained and highly
motivated, they do not need a lot of time to plan and carry out attacks when
required to do so. The Mumbai government has apprehended a number of suspects
but has not so far reached any conclusive findings.
In the aftermath of the Mumbai blasts, Indian Defence Minister Pranab Mukherjee
has made a statesmanlike formal declaration stating that India would continue to
maintain cooperative and friendly relations with Pakistan. However, he cautioned
that undemocratic states are often the ones that provide havens for terrorist
activities and pursue terrorism as a state policy. He further argued that there
was an important distinction between the way democratic and autocratic states
constructed their defence and security policies. Therefore, although Mukherjee
extended his hand of friendship to Pakistan, there was an underlying message in
his statement, that those who harbour terrorists, will be dealt with severely.
Despite the underlying reference to the threat of terrorism posed by Pakistan,
Mukherjee's basic focus has been on cooperation among South Asian nations to
accelerate economic growth and prosperity of their people. In his words,
"We want our neighbours to take full advantage of our growing market and
rapidly globalising economy".
INDIA -US RELATIONS
The US House of Representatives has passed landmark legislation approving
the US-India nuclear agreement by a massive 359-68 margin and rejecting several
'killer amendments' on the way. The US Nuclear Cooperation Promotion Act of 2006
is to be renamed the Hyde Amendment. 218 Republicans and 141 Democrats supported
the deal, and only nine Republicans and 59 Democrats opposed it. An amendment
that would have the US audit India's fissile material stock annually was
rejected by a 155-268 margin. Another amendment that would restrict the export
of uranium to India until the President certified that New Delhi had frozen its
fissile material production was rejected 184-241. When these two amendments were
defeated, opponents of the agreement tried to link the deal to India further
supporting US in its campaign against Iran. But that too was defeated 192-235 by
supporters who argued that New Delhi had already proved its loyalty to the US as
a faithful partner opposed to nuclear proliferation in the Iran context. About
the only significant amendment that was passed without contest was one that
enjoins the United States to only support India's civilian nuclear program, and
not any nuclear weapons capability enhancement.
On a separate issue, India blamed the US for its rigid stand on the
controversial issue of farm subsidies and the collapse of WTO talks in Geneva.
India said it would stick to its position until certain "structural
flaws" in the global trading system were corrected. Back from the meeting
of G-6 countries, which failed to bridge differences in the Doha Round of trade
talks, Commerce Minister Kamal Nath said in the Lok Sabha and later at a press
conference that there was "no roadmap for the future". "There are
big gaps in mindsets. The US brought nothing to the table. It (US) wants market
access in India and other developing countries for their subsidized agricultural
products at the cost of security of livelihood of our farmers and this is not
acceptable," he said. "The US offer (to reduce subsidies) is not
enough. In fact, it is no offer," he said. The US gives 19.5 billion
dollars as domestic support and wants the flexibility to increase it by another
three billion dollars. With the future of WTO talks uncertain, Nath said India
would be discussing ways to unite with other developing countries to surmount
the obstacles posed by the unfair rules of the WTO. It may be in India's favour
that the European nations have supported the cause of developing countries like
India and Brazil.Asked whether the breakdown of talks could impact India's
economic growth or trade, Nath's answer was a categorical "No."
India's GDP would continue to grow at 8-9 per cent per year.
INDIA, NEPAL AND BANGLADESH
India is stepping up vigil on its borders with Nepal and Bangladesh after
investigations into the Mumbai bombings revealed the possibility of militants
and weapons being smuggled from these areas. While the number of border guards
on the open frontier with Nepal would be doubled to nearly 11,000, troops are
engaged in building up a fence on the Bangladesh border and use high-technology
equipment to monitor the area. The Inspector General of Police is believed to
have said that "with penetration impossible from the northern side due to
strong presence of army and police, the militants are using the eastern side to
infiltrate." Two of the four men arrested so far in connection with the
blasts were from the eastern state of Bihar, which along with West Bengal and
Sikkim states, shares borders with Nepal. India shares a 1,750-km open border
with Nepal and a 4,000-km frontier with Bangladesh. While about half the
Bangladesh border being fenced, there are no barriers along the Nepal frontier.
"The border with Nepal and Bangladesh is emerging prominently in our
investigation as the terror route," said KP Raghuvanshi, the chief of the
Anti-Terrorist Squad investigating the blasts in India's financial capital.
"Militants are using the twin borders to send their cadres to Pakistan and
this is a big threat to India's security," he said. According to the media
Indian investigators suspect Pakistan-based Islamist militant group
Lashkar-e-Taiba and the Pakistani military spy agency Inter-Services
Intelligence to be behind the attacks, although it should be noted that ISI are
always likely to be blamed in such circumstances (when the culprits are not yet
identified). They say the two outfits were suspected to have armed and trained
Indian Muslims to bomb train carriages and railway platforms in the crowded
city. Pakistan has denied any connection with the bombings and Pakistani
President Pervez Musharraf said New Delhi should desist from a "blame
game" without any evidence.
INDIA, JAPAN AND SRI LANKA
Japan's special envoy to Sri Lanka, Yasushi Akashi, has urged India to play
a "more influential role" in salvaging the country's peace process. In
an interview at his office in Tokyo, Akashi said he attached "great
importance for the role India does play and can play in the future" in Sri
Lanka, where a Norwegian-sponsored peace mission has run into rough
weather." Akashi was aware that Indians had suffered a great deal at the
hands of the LTTE in the 1980s and India's intervention in Sri Lanka had
indirectly led to the assassination of Prime Minister Rajiv Gandhi. Despite,
India's unsavoury experience in Sri Lanka, Akashi believes that India's stake in
maintaining peace and stability in Sri Lanka is "unmistakable." Akashi
also remarked that "Norway is the diplomatic facilitator, Japan is the aid
coordinator, while the US has its unquestioned military and political clout, and
the European Union combines the resources of Europe. So if India could sort of
associate itself with us, if not organizationally at least in substance, with
India's unquestioned role in South Asia, I think the international community
will have added weight to bear on the Sri Lankan situation." Akashi is
scheduled to visit Sri Lanka again next month, and the Japanese diplomat also
plans to meet LTTE Velupillai Prabhakaran too. India once provided sanctuary to
Sri Lankan Tamil militant groups. But in 1987 it signed a peace pact with
Colombo to end Tamil separatism. Indian troops deployed in Sri Lanka's
northeast, however, ended up fighting the LTTE, and returned home in March 1990
after suffering nearly 1,200 dead. India in 1992 became the first country to
outlaw the LTTE in the wake of the Gandhi assassination. In recent times India
has been urging Sri Lankan leaders to evolve a national consensus on devolving
powers to the minorities. It will be interesting to see how New Delhi responds
to this proposal made by the Japanese diplomat. While it is true that India has
a stake in maintaining peace and stability in South Asia, the costs of doing so
in Sri Lanka might outweigh the gains, compelling India to hold back and just
remain a mere spectator.
ECONOMY
India's decision to block sales of stakes in state-owned companies could be
a blow to investor sentiment as it raises fears that the country's larger
program of economic changes might get entwined in politics. Prime Minister
Manmohan Singh said that privatisation plans were "pending review"
after a coalition partner whose support was crucial to the government's survival
threatened to withdraw support. As a consequence of this, the benchmark stock
market index in Mumbai fell 258 points. "This is not good news," said
Chetan Ahya, executive director and India economist of JM Morgan Stanley in
Mumbai, Global investors will view this as a "reaffirmation of the
government's inaction over privatisation," Ahya said. The 10 per cent
stakes that were to be sold in National Aluminum and the power generator Neyveli
Lignite are relatively insignificant in themselves, as the government owns more
than three-quarters of each. But investors see setbacks to the whole process of
economic restructuring. Foreign institutional investors are bullish about the
Indian economy and its 8 per cent growth rates poured more than US$10 billion
into equities in 2005 and US$8.4 billion in 2004. But a stock market sell-off in
May reversed the mood. Now, analysts say the move to stop sales of stakes in
government-owned companies could further discourage investors. "The reform
process is much larger than just the sale of stakes in a few companies,"
said Mahesh Vyas, chief executive of Center for Monitoring Indian Economy, a
research group in Mumbai. "We are moving in the general direction of
economic reforms." But even the larger process of economic restructuring
has become mired in politics. The government, for instance, has been unable to
make changes to the often convoluted rules that govern the hiring or dismissal
of employees. Similarly, proposals like selling stakes in Indian banks have been
repeatedly discussed and shelved. And while global retailers like Wal-Mart
Stores and Tesco knock on India's doors, the government has rejected foreign
direct investment in retailing. In India, consensus politics rules, Vyas said
and added that "The government has to be sensitive to the concerns of all
its allies in and out of the government." Even in sectors like
infrastructure and finance, where restructuring is relatively uncontroversial,
the pace has been slow. About the only recent decision of any significance has
been the privatisation of India's busiest airports, in Mumbai and New Delhi.
Still, some investors say India's fundamental growth factors are still in place.
"We remain positive and unambiguous about India," said Narayanan, of
Carlyle Group. But Ahya, the economist, said investors could "go through
some pain" because of the slowing of the program of economic changes.
Japanese auto giant Honda plans to double its production capacity in India by
next year, set up a fully owned subsidiary and invest US$650 million into its
business there over the next decade, according to President and CEO Takeo Fukui.
Fukui said that Honda Motors sees India as a more important market than China,
and the growth potential here is the highest. Expanding business in India is
"one of Honda's three key global strategies, together with strengthening
the foundation of our business in the US and Japan, and enhancing Honda's
leadership commitment to protect the environment," Fukui said after a
series of meetings with Indian partners. But the company won't commit to any
big-ticket investment right away. As of now, it plans to invest about 30 billion
rupees (US$650m) - much less than the billions of dollars the company has
invested in China - over the next 10 years. Although India's booming economy has
increasingly lured Western investors in recent years, Japanese firms have been
cautious about expanding their operations here, largely because of stringent
labour laws and doubts over whether the current boom would be sustained. Both
Honda and Toyota have had labour unrest at their plants. But Fukui said Honda
usually prefers to scale up its operation "step by step" as it did in
other places including the US. "In Honda, we say: 'start small and grow
big'." Its auto plant in Greater Noida, which neighbours New Delhi,
currently has a capacity to make 50,000 cars. Honda entered India in 1984,
setting up a joint venture with a local company to manufacture motorcycles. That
company - Hero Honda Motors - has since become India's largest motorcycle
manufacturer, selling 3.6 million bikes last year, according to company figures.
Masahiro Takedagawa, who will head Honda's new subsidiary, said the company
expects its share in the Indian motorcycle market - the world's second largest
after China - to increase from the current 48 per cent in the coming year.
« Top
|
