Prime Minister Modi’s Iran Visit: Chabahar and Beyond
The visit of Prime Minister Narendra Modi to Iran, 22 May to 23 May 2016 has generated a good amount of enthusiasm in India. Simultaneously, it is also aimed at sending a clear signal to the international community that India is serious and means business about its intentions to play its legitimate role in the region while balancing out its friends across all spectrums of Islamic world.
Ostensibly the underlying aim of the visit is to boost Indian connectivity with the region by signing the India-Iran-Afghanistan Trilateral Agreement on Transport and Transit Corridors to facilitate trade with Afghanistan, Central Asia, Russia and Europe for utilizing Chabahar port as a hub, giving boost to Indian access to Afghanistan and creating the International North South Transport Corridor (INSTC). Presence of Afghan President Ashraf Ghani during the signing of the agreement in Tehran signifies the importance Afghanistan attaches to the Development of Chabahar so as to end its isolation and total reliance on Pakistan for sea connectivity.
Series of events beginning with the conclusion of US-Iran Nuclear agreement in 2015 have provided a window of opportunity to re engage on economic issues and explore new avenues for cooperation for the three countries. India looking for an opportunity to establish its foothold moved at a considerable pace through high level bilateral visits involving three prominent Cabinet Ministers and sealing bilateral agreements for stake in Iranian gas field Farzad B, committing US $ 150 million for development of Phase I of Chabahar port and explore laying of rail network from Chabahar to Zahedan and onward connectivity to Zeranj-Delaram road. India also committed to clearing the Iranian dues for oil imports totalling US $ 6.5 billion.
The significance of visit has to be seen beyond connectivity to Afghanistan, setting up of International North–South Transport Corridor (INSTC) and enhancing Indo-Iran bilateral relations.
There are a few immediate takeaways from establishing Indian footprints in the region; most significant being India getting a foothold into the Strait of Hormuz and onwards to Persian Gulf and check the expanding Chinese designs in the region which it is aiming to achieve through development of Gwadar port and setting up of China Pakistan Economic Corridor (CEPC) besides expanding its economic relations with Iran. As per Pakistan’s Commerce Minister Khurram Dastgir Khan it envisages Gwadar as a bridge between Central Asia, Middle East and South East Asia. However development of Chabahar with shorter and more reliable links to Central Asia, Iran and Afghanistan will facilitate faster trade to South East Asia in comparison to Gwadar.
Iran has been waiting for an opportunity to play a significant role in the region and specially in Afghanistan, which is its immediate neighbour to the East and shares approximately 930 kilometres long border with considerable influence on Afghanistan’s Shia population. Earlier Iran could not play an active role in the region due to US direct influence on Afghanistan and imposition of sanctions for trade and transit. Iran was also kept out of all peace negotiations with Taliban, last one being the Quadrilateral Coordination Group (QGC) Forum – comprised of USA, China, Pakistan and Afghanistan, although China with just 76 kilometres of border through Wakhan Corridor with Afghanistan and with hardly any leverage with Taliban was included at the behest of Pakistan.
Near failure of talks due to Pakistan’s unwillingness to apply pressure on Taliban and Haqqani network and bring about any apparent change in ground situation in Afghanistan forced President Ghani to show his frustration with Pakistan and look for suitable options for a peaceful solution to its problems. Similar opinion was also expressed by USA State Department which stated, “We have consistently expressed our concerns at the highest level of the government of Pakistan about their continued tolerance for Afghan Taliban groups such as the Haqqani Network operating from Pakistani soil.” US frustration with Pakistan has become more profound with its Congress voting to increase restrictions on Pakistan and blocking immediate US $ 450 million in aid unless it meets certain conditions.
Iran therefore is a suitable and willing player to take an active role in bringing about stability in Afghanistan keeping in view its expanding ambitions to play a hands-on role in geo politics of the region, post removal of sanctions. With USA having expressed frustration with Pakistan due to its promoting proxies in Taliban and Haqqani network, it is likely to encourage an engagement between Iran and Afghanistan to the advantage of India. Afghan President looking for relevance in his country is likely to encourage Iran’s participation so as to bring a semblance of peace in the region.
Beyond expanding its footprints in its immediate neighbourhood, Iran is also looking for economic renaissance having been isolated for close to a decade. Chabahar provides it an opportunity to expand southwards since the development of the port will ease its reliance on exporting oil through Strait of Hormuz which has seen continued tensions due to changing dynamics of intra religious conflicts and hostilities with its immediate neighbours in the Gulf.
India during Iran’s years of isolation continued to engage with it deftly through trade and diplomatic engagement. In fact, Iran has been India’s second largest supplier of oil and gas. India did not miss the opportunity to consolidate this relationship with Iran as soon as sanctions were lifted so as to secure its interests in Afghanistan and Central Asia. Alongside India has also maintained a very mature engagement with other countries of Islamic world notably Saudi Arabia and UAE. It would be in India’s continued interest to maintain the momentum with respect to development of Chabahar and secure its strategic interests.
Draft ‘Trafficking of Persons (Prevention, Protection and Rehabilitation) Bill, 2016
- It seeks to establish DISTRICT ANTI- TRAFFICKING COMMITTEE
- The appropriate Government shall, by notification, constitute for every district, a District Anti Trafficking Committee, for exercising the powers and performing such functions and duties in relation to prevention, rescue, protection, medical care, psychological assistance, skill development, need based rehabilitation of victims as may be prescribed.
- The District Anti Trafficking Committee shall consist of the following members, namely:- (i) the District Magistrate or District Collector- Chairperson; (ii) two social workers out of which one shall be a woman to be nominated by the District Judge – Member; (iii) one representative from the District Legal Services Authority nominated by the District Judge- Member; (iv) District Officer of the Social Justice or Women and Child Development Department of the concerned States/UTs- Member Secretary
- It Seeks to establish STATE ANTI-TRAFFICKING COMMITTEE
- State Anti–Trafficking Committee constituted for a State/UT, shall consist of the following members, namely:- (i) the Chief Secretary- Chairperson; (ii) Secretary to the Department of the State dealing with Women and Child-Member; (iii) Secretary of the State Home Department – Member; (iv) Secretary of the State Labour Department- Member; (v) Secretary from State Health Department- Member; (vi) Director General of Police of the concerned State- Member; (vii) Secretary of the State Legal Services Authority – Member;
(viii) two social workers out of which one shall be a woman and to be nominated by the Chief Justice of the High Court – Member.
- State Anti–Trafficking Committee constituted for a State/UT, shall consist of the following members, namely:- (i) the Chief Secretary- Chairperson; (ii) Secretary to the Department of the State dealing with Women and Child-Member; (iii) Secretary of the State Home Department – Member; (iv) Secretary of the State Labour Department- Member; (v) Secretary from State Health Department- Member; (vi) Director General of Police of the concerned State- Member; (vii) Secretary of the State Legal Services Authority – Member;
- It seeks to establish Central Anti- Trafficking Advisory Board
- The Central Government shall constitute a Central Anti–Trafficking Advisory Board headed by the Secretary, Ministry of Women and Child Development and representatives from the concerned Ministries, State/UTs and members from civil society organisations as may be prescribed
- It seeks to establish Special Agency,for investigation of offences under the provisions of the Act.
- Support Services:-
- Protection Homes:-Protection Homes shall provide for shelter, food, clothing, counselling and medical care that is necessary for the rescued victims and such other services in the manner, as may be prescribed.
- Special Homes:-One or more Special Homes in each district for the purpose of providing long- term institutional support for the rehabilitation of victims, in the manner as may be prescribed.
- Other facets of the bills:-
- Rehabilitation and social integration
- Employment opportunities and placement agencies
- Penal Provisions:-
- Punishable with imprisonment for a term which may extend to 3 years or with fine which may extend to fifty thousand rupees, or with both.
- It also has provision of confiscation,forfeiture and attachment of property of the offender
- It also aims to provide Special Courts, anti-trafficking fund etc.
Facts:-
- Prime Minister Narendra Modi during his recent visit to Meghalaya tried his hand in beating Khasi traditional drum ‘Ka Bom.’
Recent Posts
Petrol in India is cheaper than in countries like Hong Kong, Germany and the UK but costlier than in China, Brazil, Japan, the US, Russia, Pakistan and Sri Lanka, a Bank of Baroda Economics Research report showed.
Rising fuel prices in India have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.
The rise in fuel prices is mainly due to the global price of crude oil (raw material for making petrol and diesel) going up. Further, a stronger dollar has added to the cost of crude oil.
Amongst comparable countries (per capita wise), prices in India are higher than those in Vietnam, Kenya, Ukraine, Bangladesh, Nepal, Pakistan, Sri Lanka, and Venezuela. Countries that are major oil producers have much lower prices.
In the report, the Philippines has a comparable petrol price but has a per capita income higher than India by over 50 per cent.
Countries which have a lower per capita income like Kenya, Bangladesh, Nepal, Pakistan, and Venezuela have much lower prices of petrol and hence are impacted less than India.
“Therefore there is still a strong case for the government to consider lowering the taxes on fuel to protect the interest of the people,” the report argued.
India is the world’s third-biggest oil consuming and importing nation. It imports 85 per cent of its oil needs and so prices retail fuel at import parity rates.
With the global surge in energy prices, the cost of producing petrol, diesel and other petroleum products also went up for oil companies in India.
They raised petrol and diesel prices by Rs 10 a litre in just over a fortnight beginning March 22 but hit a pause button soon after as the move faced criticism and the opposition parties asked the government to cut taxes instead.
India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil.
As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices
The government charges about 167% tax (excise) on petrol and 129% on diesel as compared to US (20%), UK (62%), Italy and Germany (65%).
The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.
Here is an approximate break-up (in Rs):
a)Base Price | 39 |
b)Freight | 0.34 |
c) Price Charged to Dealers = (a+b) | 39.34 |
d) Excise Duty | 40.17 |
e) Dealer Commission | 4.68 |
f) VAT | 25.35 |
g) Retail Selling Price | 109.54 |
Looked closely, much of the cost of petrol and diesel is due to higher tax rate by govt, specifically excise duty.
So the question is why government is not reducing the prices ?
India, being a developing country, it does require gigantic amount of funding for its infrastructure projects as well as welfare schemes.
However, we as a society is yet to be tax-compliant. Many people evade the direct tax and that’s the reason why govt’s hands are tied. Govt. needs the money to fund various programs and at the same time it is not generating enough revenue from direct taxes.
That’s the reason why, govt is bumping up its revenue through higher indirect taxes such as GST or excise duty as in the case of petrol and diesel.
Direct taxes are progressive as it taxes according to an individuals’ income however indirect tax such as excise duty or GST are regressive in the sense that the poorest of the poor and richest of the rich have to pay the same amount.
Does not matter, if you are an auto-driver or owner of a Mercedes, end of the day both pay the same price for petrol/diesel-that’s why it is regressive in nature.
But unlike direct tax where tax evasion is rampant, indirect tax can not be evaded due to their very nature and as long as huge no of Indians keep evading direct taxes, indirect tax such as excise duty will be difficult for the govt to reduce, because it may reduce the revenue and hamper may programs of the govt.