By standing firm with Bhutan and helping it militarily, India has displayed its resolve. Now it’s time to get down to some deft diplomacy.
As the military standoff over Doka La (or Doklam plateau) between India and China spills over into its second month, it is important to understand both the military and geo-strategic reasons behind the incident.
Technically the Doklam plateau is Bhutanese territory but New Delhi, as Bhutan’s closest friend in the region, has an obligation to stand up for Thimphu against the aggressive posturing by China, notwithstanding the subtle change in the language of an updated treaty signed in 2007 at the advent of Parliamentary democracy in Bhutan.
Article 2 in the earlier treaty, clinched in 1949 had said: “The Government of India undertakes to exercise no interference in the internal administration of Bhutan. On its part the Government of Bhutan agrees to be guided by the advice of the Government of India in regard to its external relations.”
This clause was amended in 2007 to read: “In keeping with the abiding ties of close friendship and cooperation between Bhutan and India, the Government of the Kingdom of Bhutan and the Government of the Republic of India shall cooperate closely with each other on issues relating to their national interests.Neither Government shall allow the use of its territory for activities harmful to the national security and interest of the other”
However Article 1 has remained constant. It reads in both treaties: “There shall be perpetual peace and friendship between India and Bhutan.” India, thus does have an obligation to defend Bhutan from any aggression.
China, in keeping with its policy of creeping advancement against smaller neighbours, has been pressuring Bhutan to settle the boundary dispute between the two. The boundary dispute exists in three pockets (see map) but for China, the one at tri-junction, is military, the most vital.
The Chinese want to gain control of the Doklam plateau for tactical military reasons by building a road into the Doklam plateau. The PLA has been trying to build a road up to Gyemochen, which is towards the lower end of the tri-junction. China claims Gyemochen is the tri-junction between India, China (Tibet) and Bhutan whereas Survey of India maps of 1956 show Batang La, north of Gyemochen, as the tri-junction. The Batalang tri-junction at the narrow end of the Chumbi Valley — wedged between East Sikkim and West Bhutan — leaves China very little depth or width to deploy its forces.
The border, as it stands today between both India and China and between China and Bhutan, affords India a tactical advantage since its forces based in North and North-east Sikkim can easily cut off the Chinese deployment in the narrow Chumbi Valley should China try any misadventure here.
The Kalimpong headquartered 27 Division can easily employ mechanised forces in north and north-east Sikkim and press home the advantage against the Chinese in the Chumbi Valley (towards the town of Yadong or Yatung in Tibet), the Gangtok-based 17 Division is well-poised to take care of any Chinese deployment from east Sikkim.
These formations have their tasks clearly defined to cut off Chinese forces by deploying rapidly from North, north-east and east Sikkim towards Bhutan. The Chinese forces in the narrow Chumbi Valley are currently in the line of sight and fire of Indian forces poised on the ridges along the Sikkim-Tibet border.
Aware of this vulnerability, the Chinese have been eyeing the Doklam plateau since any troops stationed there will be away from visible observation and beyond artillery range of Indian forces either based in North or north-east Sikkim. Moreover, once the Chinese gain control of the plateau, they can easily roll down the Zimplri ridge and undermine Indian defences in the Siliguri Corridor that connects rest of India to the seven north-eastern states. That is why India has kept a close watch on Chinese activities around the Doklam plateau since it has anticipated the possibility of the Chinese attempting to get behind Indian defences through Bhutan.
The Chinese did try to alter the ground reality once in 2008 but were unsuccessful. This time, the standoff began in late May and peaked on 5-6 June when Indian troops, alerted by their Bhutanese counterparts, blocked the Chinese construction party from extending the road into the Doklam plateau.
Tactical military compulsion apart, there is a geostrategic reason why China chose to up the ante. That Beijing made its first public statement on the standoff at a time when Prime Minister Narendra Modi was in the US for his first meeting with President Donald Trump clearly shows China’s annoyance with India’s perceived tilt towards the US. Peeved with India’s refusal to join the Belt and Road Initiative, Beijing chose to make a series of aggressive statements against India including one that sought to remind India of the 1962 war between the two, which India lost. The remark on 1962 received a riposte from India’s Defence Minister Arun Jaitley that ‘2017 is not 1962.’
Indeed, 55 years after the 1962 war, one can confidently say that the Indian Army has firmly and exorcised the ghost of 1962, thanks to a deeper understanding of the Chinese psyche and decisive victories in two major military face offs since then — one in 1967 and the other in 1987. In fact, the standoff at Nathula, not very far from the current impasse in 1967, gave the Chinese a bloody nose, just five years after 1962. The other eyeball to eyeball confrontation at Sumdorong Chu in Arunachal Pradesh, exactly 30 years ago too forced the Chinese to back down from its creeping encroachment.
There are a few firsts in the current stalemate. For once China is projecting itself as the aggrieved party. Two, Beijing has retaliated by cancelling the Mansarovar Yatra through Nathu La, one of the more easily implementable confidence building measures. Three, China has called India to withdraw its troops from what it calls Chinese territory for any further talks to commence.
A far more assured and confident India reacted to the barrage of intemperate statements by China with a measured statement and offered Beijing a way out. The statement said in conclusion: “India has consistently taken a positive approach to the settlement of its own boundary with China, along with the associated issue of the tri-junctions”.
“India cherishes peace and tranquillity in the India-China border areas. It has not come easily. Both sides have worked hard to establish institutional framework to discuss all issues to ensure peace and tranquillity in the India-China border areas. India is committed to working with China to find peaceful resolution of all issues in the border areas through dialogue.”
The belligerence displayed by some of India’s military veterans from the safety of TV studios notwithstanding, both New Delhi and Beijing have the wisdom and sagacity to resolve the latest dispute calmly. By standing firm and helping a weaker friend militarily, India has displayed its resolve. Now it’s time to get down to some deft diplomacy.
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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.