“In a letter to India’s PM, Mohamed bin Zayed expresses thanks for the kind invitation to attend India’s Republic Day celebrations”, adding, in a second tweet: “Our strong relations are deeply rooted in history; our strategic cooperation has increased, driven by our mutual aspirations to develop it.”
While such mutual acknowledgements and appreciations are nothing new, what is new is the freshness and vibrancy in a relationship that had been allowed to sink into a sense of indifference and apathy. This applies not just to the UAE, where Prime Minister Narendra Modi visited in August 2015 (reciprocated by Shaikh Mohammed bin Zayed in February 2016), but to virtually all the other countries of the Gulf Co-operation Council (GCC).
Much of the fault lies on the side of past Indian governments. Note, for instance, that the last visit to the UAE before that of Modi was in 1981 by Indira Gandhi.
This is the sort of inattention paid to a country that happens to be one of our largest trading partners (nearly $60 billion in two-way trade in 2014-2015), and where over a million Indian expatriates reside (out of more than 2 million in the GCC as a whole).
Things are changing, and fast. There are a number of reasons for this, and one cannot give all the kudos to the current government. But it must be credited with recognising the opportunities and grasping them with vigour.
Relations with virtually every GCC country is on the fast track – namely, Saudi Arabia, the UAE, Oman, Qatar, Kuwait and Bahrain. And they have taken a very robust strategic dimension; defence related engagements have picked up across the board, and it would be fair to say that the GCC now views India as a net security provider in the Arabian Sea, as a trusted partner in those waters.
What is becoming clear is that India is now beginning to ease into an enhanced defence engagement with these countries bilaterally. This is, again, not something new in that the momentum has been building for years. But now the geo-political environment is primed for a much closer partnership. Consider these realities:
Iran is now out of the woods, and back in the good books of the US (relatively speaking). This changes the regional dynamics significantly, given that the GCC states are either in an antagonistic posture with Tehran, or managing a very delicate balancing act.
The US seems to gradually disengaging from the region, from a strategic perspective, or so it would appear to those who have observed President Obama’s reluctance to engage with the GCC quite as intensively as they might have liked (considering especially Washington’s Iranian outreach).
Pakistan, long a reliable supplier of soldiers for rent to the GCC countries, has of late developed a distaste for overseas deployments of its men in uniform. At a time of need, when the GCC countries requested Islamabad to support them in their military campaign in Yemen, Pakistan refused. From the Gulf rulers’ point of view, that refusal showed an untrustworthiness that will be hard to ignore.
In all the above cases, India can be a force of positivity for the GCC states. A long-standing relationship of trust and loyalty with Iran means New Delhi can be an effective go-between in the event the relationship between Tehran and the Gulf countries deteriorate.
The US, having carefully observed India’s role in the region and having dramatically expanded its own relationship with New Delhi, is happy to have a responsible power shouldering some of the security management burdens in the strategically vital area between the Strait of Hormuz and the Horn of Africa, at the mouth of the Red Sea.
As for Pakistan, it will surprise no one that the GCC states are well aware that their strengthening ties with India are bound to make Islamabad extremely uncomfortable. From their point of view, considering Islamabad’s posture on Yemen, that is a happy by-product (not the objective) of a natural growth in the content and sophistication of their engagement with New Delhi.
As India’s economy grows and as the commercial linkages with the GCC develop in quantity and quality, we can be certain that military co-operation will expand apace.
The UAE and India have already instituted a $75 billion India Infrastructure Fund. Undoubtedly, Saudi Arabia and Qatar will join the fray in a comparable way. It is not inconceivable that, within the next decade, India could have security agreements with these countries that will envisage a protective role.
The Modi government has hit the ground running in terms of its relationship with the GCC states, and is now sprinting ahead. The invitation to Shaikh Mohammed bin Zayed Al Nahyan is a harbinger of much more to come.
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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.