Background :-
The recent diplomatic engagements that played over a month upto the Seoul Plenary session of NSG and the subsequent developments has been at the center stage of Indian media.The consequence of India not getting a membership of NSG has been disappointing.However , while many have lauded the diplomatic pursuations few have criticized it on the basis of outcome. In this regard, here is our analysis of the issue :-
India has already got NSG waiver , so should we worry about membership ?
Ans– In this regard, there was an article that reads “India’s obsession with NSG” , although we have not gone through the entire article , it is quite indicative of its stance from the heading itself.The question is should India be obsessed with NSG ?
To answer the above question , we have been deliberating why and why not , however one of our UPSCTREE core member pointed out a very good arguments in this regard:-
“It is always better to be inside the room that takes decisions and makes policies than to be an outside of its door , waiting for the outcome”
So , in this ground , it is always better to be on the decision making table , becasue that changes the whole game altogether and most importantly , one will have a say in the decision making process – which is as important as the outcome of the decision itself.
In a nutshell, yes, India should put its all weight to get things done diplomatically and more so to get NSG membership.
The next question is the way the diplomatic engagement was launched and the way media played it out as if it is a do or die situation.
Ans :- In this regard, we firmly believe that every action that one pursues should be a do or die situation.Because there should not be regret afterwards that we have not done enough.That’s a regret one can not afford- whether preparing for an exam or getting a membership.
In this context , India did manage to punch above its weight , the outcome are indicative of it.
What are the lessons from the outcome ?
Here is the list :-
- India managed diplomatically pursue the matter and made enough noise about it, which is good.Noises are good in geopolitik , becasue right noise builds right perception and India’s geopolitics profile has only increased after this.
- The outcome clearly indicated who are our friends and who are our foes- pretty clearly.Which is good , becasue , then one knows who the foes are and how to fight it- you can not win a fight if you don’t know the opponent.We now know who is who and policy can be calibrated accordingly.
- The fact that all the major countries – 38 out of 48 out-rightly supported India , where as 9 remained neutral and one played the spoil-sport indicates India’s international importance.
- Moreover , nothing is stronger than an Idea whose time has come .India’s time has come , and it is just a matter of time.
- If one delves in to the philosophical angel of this question, Indian philosophy gives importance to work than outcome.Work is in our control , not the results- so working hard is not a bad thing.Means are as important as ends ,in diplomacy one should not only be judged by outcome but also by the means.
- Disappointment on the outcome is fine , but to be disheartened due to the outcome is neither necessary nor required.Diplomacy is a subtle art , everyone will pay their debt and everyone will get their credit – history stands testament to it.
- To blame the diplomats for putting all the effort is a no-brainer.The outcome is not the result of this particular endeavor, it has it’s past too.History clouds the judgements and has its way to influence geopolitics.Why China did what it did becomes obvious if we look at our past clearly.The efforts are new but the outcome is old.
Interestingly, the MEA has put a public statement saying that it will be difficult for India to implement Paris climate agreement as it hits NSG roadbloack.
Here is an article that explains rather clearly why China did what it did ?We are publishing it as is-
Editorial :-
If reports emanating from Seoul, where NSG plenary session was held on June23-24, are to be believed, India’s request for membership was turned down despite the fact that an overwhelming majority of 38 out of 48 member countries favoured India’s inclusion into the group. Nine other members were not against India’s inclusion but they wanted clear-cut criteria to be put in place simultaneously for inclusion of non-NPT signatories like New Delhi.
However, there was one country which was dead against India’s inclusion and it was none other than China, India’s arch-rival in Asia as well as one of the two neighbours with whom India had fought an overt and full-fledged war in the past.
Despite the strenuous efforts of Ministry of External Affairs and its diplomats, China refused to budge an inch from its stand. In fact, it was not even ready to discuss India’s case in Seoul. Facing tremendous pressure from other member states, it agreed for a discussion reportedly on the condition that India will not be granted membership, at least in this session.
Even the much-touted ‘personal touch’ diplomacy of Prime Minister Narendra Modi , who met Chinese President Xi Jinping on the sidelines of Shanghai Cooperation Organisation (SCO) on June 23 and pleaded for Chinese support, failed to work or break the ice.
Not only that, Chinese even refused to pay any heed to the sane advices that came from common friends like Russia and France. The US also tried its best to persuade China, although not at the same level they had worked phones in 2008 to ensure one time waiver for US-India civil nuclear deal, but to no avail.
Since NSG as a group takes all decisions through consensus, China’s strident anti-India posture ensured that New Delhi was denied entry into NSG, at least for the time being. China, obviously, played the spoilsport for India.
In international diplomacy, these things are neither unusual nor unheard of. It is only natural that a big group rather a cartel like 48-member NSG will take its own time before it arrives at a consensus on an issue which generates diverse viewpoints and opinions.
However, what has baffled observers is the obduracy with which China publicly took an anti-India stand this time. It’s a fact that even in 2008, China was not in favour of the India-specific favour but it had preferred not to go public with its opposition. At that time, Chinese relented after the then US President George Bush personally called up the then Chinese President Hu Jintao.
In fact, NSG is not the first instance in the recent times when China has taken an anti-India position.
On April 1, 2016, it had blocked an UN Security Council move to blacklist Jaish-e-Mohammad chief Masood Azhar who India has accused of masterminding the Pathankot airbase attack.
What has changed since 2008 that has forced China to take an unambiguous anti-India stand on international forums like NSG and UNSC?
In fact, there are a host of issues and developments that has made China wary of India’s rising international profile.
In Seoul, China objected to India’s NSG entry on the ground that New Delhi is yet to sign the NPT but in reality, the NPT was just a fig leaf that Beijing used to thwart India’s candidature.
Despite being a NPT signatory, China’s own record on proliferation – from Pakistan, North Korea and Iran – is pathetic.
The actual reasons behind China’s anti-India hostilities go beyond NPT. In fact, they have nothing to do with NPT.
Let’s have a look at some of these factors:
1. China’s growing unease over deepening Indo-US military ties
It’s an open secret that China has always been suspicious of deepening military ties between India and the United States.
China believes that through these military tie-ups, United States is trying to prop up India as Beijing’s counterweight in Asia-pacific reason.
China did not hide its concern over the recent Indo-US logistics exchange agreement under which militaries of India and the US can use each other’s assets and bases.
US willingness to sell India cutting-edge military hardware including local manufacturing of F-16 fighter jets has further added to the Chinese fears.
The recent statement of an US official that Washington will do everything to boost India’s naval power has been seen by China as yet another American attempt to undermine and challenge its strategic interests in Indian ocean region.
China knows that it can’t stop two sovereign nations from engaging into military cooperation but its frustration over its helplessness is now getting manifested in its increasingly anti-India posturing on international platforms.
2. Beijing’s fears on Indo-US interference in South China sea dispute
China’s construction of artificial islands in the Spratly Islands have been objected to by many countries. In fact, China has faced resistance on this issue from time to time by many countries including Brunei, Malaysia, Philippines, Vietnam and Indonesia.
The dispute also involves clash of interest between different nations on issues like acquiring fishing areas, the potential exploitation of crude oil and natural gas under the waters of various parts of the South China Sea, and the strategic control of important shipping lanes.
The United States has openly opposed the Chinese move and India has also started calling for restraint and peaceful resolution of the dispute.
The two countries have started mentioning South China Sea in joint statements recently although during last US visit of Modi, the two sides deliberately omitted the topic given the fact that India was hopeful of Chinese support on NSG issue.
China sees a design in India and US taking a similar line on South China Sea dispute and considers it a ploy to curtail its influence in the region
3. China alarmed over India’s military ties with its adversaries like Japan and Vietnam
The recent reports of India trying to sell supersonic BrahMos missile to Vietnam has also alarmed China. Some media reports have also pointed out that Vietnam has expressed keen interest in Light Combat Aircraft (LCA) Tejas as well.
The growing military ties between India and Japan have further annoyed china. Much to China’s discomfort, India, Japan and US are regularly holding naval exercise, Malabar 2016 being the latest one.
Obviously, China is not taking these military moves kindly.
4. Not ready to welcome New Delhi on big table and de-hyphenate India and Pakistan
China does not want India to emerge as a rival power in Asia and as part of the strategy, it wants India to remain bogged down with Pakistan.
That’s one reason why China encouraged Pakistan to apply for NSG membership just after a week India moved its application.
China knows that as long as India is forced to compete with Pakistan on international platforms, it can’t acquire the respect to claim a seat on the table meant for big powers.
5. Chinese concern over aggressive diplomacy of PM Modi in neighbourhood
China is also looking with suspicion at the aggressive diplomatic posturing of PM Modi.
The recent Chabahar port agreement between India and Iran has also ruffled the Chinese feathers.
Chinese believe that Indian presence in the neighbourhood of Gwadar port (that it is developing in Pakistan) may also give a foothold to Americans as the two countries now share a logistics exchange agreement.
PM Modi’s outreach to countries like Saudi Arabia, UAE, Iran, Qatar and Afghanistan has further raised the eyebrows of the Chinese. It is concerned over the impact of India’s new aggressive diplomacy over its client state Pakistan.
Should India retaliate against China?
India’s attempt to get entry into NSG may have failed this time but this is not end of the road for New Delhi.
As the Americans have pointed out, the process has begun and India may get the membership by end of this year. The American official pointed out that even in the case of India’s MTCR (Missile Technology Control Regime) application, the members deliberated upon it for nearly a year and then arrived at a conclusion.
There have been suggestions that India should curtail trade opportunities for Chinese as a retaliatory measure but there is no unanimity among experts on that.
“This will be very immature. In international diplomacy, ups and downs are part and parcel of the game. Even Chinese have faced similar situations. There is no need for any knee-jerk reactions,” former diplomat TCA Rangachari pointed out.
Ambassador Rangachari is not the only one who advises against any knee-jerk reaction from India. Former diplomat Kishan S. Rana agrees with him.
“ It’s true that China is opposing India’s NSG bid and wants to support Pakistan on this issue. But we have to take every call with a cool mind,” Ambassador Kishan S. Rana said.
On their part, both India and China look to keep each other engaged both bilaterally as well as on multilateral platforms.
Prime Minister Narendra Modi will be travelling to Hangchou in September to attend G20 summit while Chinese President Xi Jinping is coming to India in October to attend BRICS summit.
That India will be finally included in the NSG club is almost certain but whether Chinese will fall in line easily or will delay India’s entry for a longer duration remains to be seen.
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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.