The “Malabar” naval exercises in the Bay of Bengal came to an end earlier this week with a close formation drill involving Indian aircraft carrier INS Vikramaditya, the US flat-top Nimitz, and Japan’s new helicopter carrier, the JS Izumo. The expansive scope and complexity of the engagement led many to portray Malabar 2017 as a maritime response to China’s aggression in Dokalam where the Indian Army and People’s Liberation Army troops remain locked in a tense stalemate.
Indeed, with over 20 ships, including two submarines and over 100 aircraft and helicopters involved in complex manoeuvres, the strategic messaging to China seemed more than clear. Notably, Indian commentators cast Malabar as a strategic precursor to a more proactive sea-denial strategy aimed at challenging People’s Liberation Army Navy (PLAN) ships and submarines in the Indian Ocean.
In the run-up to Malabar, the media had reported a “surge” in Chinese naval presence in the subcontinental littorals. PLAN units prowling India’s near-seas reportedly included the Luyang III class destroyers, hydrographic research vessels, and an intelligence-gathering ship, Haiwingxing, presumably to keep track of naval ships taking part in the trilateral exercises. But Indian analysts seemed more distressed by the reported presence of a Chinese conventional submarine in the Indian seas, confirmed by the docking of the Chongmingdao, a submarine support vessel, in Karachi last month.
For many Indian observers, the emphasis on anti-submarine warfare (ASW) exercises in Malabar is a sign of India’s growing willingness to leverage its maritime partnerships in Asia to counter PLAN operations in the Indian Ocean. Not surprisingly, much of the commentary in the Indian media highlighted exercises involving P-8I and P-8A reconnaissance aircraft, MiG-29K fighters and Japanese ASW helicopters, lending credence to accounts that an Indian “sea-denial” strategy was at work in the Bay of Bengal.
Yet, there is something essentially flawed about the idea that Indian naval power can prevent Chinese warships and submarines from accessing India’s near-seas. Modern-day trading nations regard the oceans as a shared global common, with equal opportunity rights for all user states. Consequently, unless a sea-space is a site of overlapping claims (as in the case of the South China Sea) or a contested enclave in a geopolitically troubled spot (as the Persian Gulf), no coastal state ever actively denies another the use of the high seas.
This balance only changes during war, when navies seek to block adversaries from entering critical sea spaces in the contested littorals. During peace-time operations, however, maritime forces enjoy assured access to the seas that lie beyond national territorial waters (even if a coastal state insists on prior notification).
Given Beijing’s key role in the politics and geoeconomics of the Indian Ocean region, a peacetime plan to deny its warships entry into India’s surrounding seas is unlikely to succeed. With the PLAN expanding its diplomatic engagements along the Indian Ocean rim, many regional states have been welcoming of Beijing’s maritime initiatives and investments in the Indian Ocean. India’s plans to constrain Chinese naval power in South Asia are bound to meet with regional opposition.
New Delhi, in fact, might do well to take a leaf out of Beijing’s maritime playbook by leveraging naval operations for geopolitical purposes. In recent years, the PLAN has sought to project power in the Indian Ocean region through a constant naval presence in India’s near-seas. By refusing to accept the Indian Ocean as an Indian backwater, it has made successful inroads into India’s geopolitical sphere of influence. India too must now resort to a strategy of counter-power projection by expanding the scope of its naval deployments in the South China Sea, long considered a Chinese preserve.
Raising the tempo of Indian naval operations in South-East Asia does not mean challenging China’s naval might in the Western Pacific. By gradually expanding security presence along the critical sea lanes of the Western Pacific, the Indian Navy must plan to use the South China Sea’s geopolitically sensitive spaces for the strategic power projection.
Such a strategy is bound to have a deterrent effect on China’s naval posture in the Indian Ocean region. Beijing’s constraints in opposing Indian maritime presence in the Western Pacific are similar to New Delhi’s limitations in the Indian Ocean, where the Indian Navy has struggled to offer push-back to China.
What’s different is that Beijing’s political and territorial ambitions in the South China Sea make it far more sensitive to naval forays by unfriendly states. After an arbitral tribunal’s ruling in July last year invalidated many of China’s historical rights within the nine-dash line, Beijing has been extremely cagey about perceived challenges to its authority in the waters of the South China Sea.
China’s vulnerability in its near-seas must be taken advantage of by India. To challenge PLAN incursions into the Indian Ocean, the Indian Navy must plan for counter-presence in China’s near-seas, where Beijing cannot prove a territorial infringement, and yet feel the pinch of a perceived violation of its political sphere of influence.
India’s maritime planners know well that a nuanced high-seas presence in the Western Pacific is unlikely to ever cross the threshold of provocation which could lead to full-fledged conflict with China. Nagging Indian naval presence in the South China Sea is better suited to signal Indian resolve than any attempt to deny PLAN assets access into maritime South Asia.
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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.