Context
The Arctic region has recently assumed considerable strategic significance as it has been underlined by the policies enunciated by major powers. The interests and concerns of the Arctic states are vast and varied. India, being an observer in the Arctic Council, has legitimate interests in the region and has, of late, come out with its own Arctic policy.
India’s Arctic policy notified as a draft document in early January 2021 has come as a shot in the arm for the country’s science diplomacy. The policy claims to concur with India’s fast expanding scientific-technological power status.
However, it has been drafted in a strategic milieu of countries like China having invested with great ambition in the region. Though India has stepped up with its sustainable engagement diplomacy in the Arctic, the question remains whether the draft policy adequately addresses the emerging power equations in the region. The article examines this challenging scenario in the Arctic region and explores the potentials and constraints of India’s Arctic policy.
India’s Arctic Policy (IAP)
As per the global ranking, India currently occupies the third position in scientific and technical person power in the world. Its research and development (R&D) expenditure and science and technology (S&T) publications also rose significantly. With the surge in S&T publications, India is globally at the third position.
China’s “Polar Silk Road” is essentially a part of its robust “Belt and Road Initiative” (BRI) which seeks to reinforce its geopolitical and geoeconomic posture in the region. India has stepped in at the right time with its “sustainable engagement” diplomacy and “SciTech” power in the Arctic.
Geospatially, the Arctic is located above the Arctic Circle, which encompasses the Arctic Ocean basin (roughly 6.1 million square miles) and the northern parts of Scandinavia, Russia, Canada, Denmark (Greenland), and the United States (US) state of Alaska. Canada, Russia, Denmark, Norway and Alaska have direct access to as well as jurisdiction over the Arctic Ocean.
The Arctic Council was formed as an intergovernmental forum with these countries along with Finland, Sweden and Iceland, following the Ottawa Declaration in 1996. The declaration has provisions [3(a), (b) and (c)] for non-Arctic states and organisations to participate in and contribute to the working of the council with an “observer status.” The council is envisaged as a forum to promote cooperation, coordination and interaction among the Arctic states, Arctic indigenous peoples and other Arctic inhabitants on common Arctic issues such as environmental protection and sustainable development in the region (Arctic Council 1996).
There are five states from Asia holding “observer status” in the Arctic council (India, China, Japan, South Korea and Singapore) and all joined in 2013. India renewed its membership in 2019 for another five-year period. The admission of “observers” in the council was made conditional upon recognising the “Arctic states’ sovereignty, sovereign rights and jurisdiction in the Arctic” besides recognising the broad international legal framework that has a bearing on the Arctic Ocean, such as the United Nations Convention on the Law of the Sea (UNCLOS).
The US had insisted at some point that the council “should not deal with matters related to military security” and this was added as an addendum upon signing the Ottawa Declaration. Curiously, after 20 years, the US Secretary of State, Mike Pompeo, in a statement in 2019 said that since the situation in the Arctic region had changed, that is, having become a terrain of “power and competition,” the eight Arctic states should “adapt to this new future”.
However, geostrategic concerns continued to generate anxieties among the Arctic states and, consequently, countries like Russia, Canada and Norway have had to bolster defence infrastructure in the region.
India and the Arctic Region
India’s Arctic contacts began a century ago with its signing of the “Svalbard Treaty” in February 1920 in Paris. A breakthrough in India’s Polar research came in 1981 when the country joined the nations engaged in Antarctic exploration.
However, its engagements did not make much headway till 2007 when the scientists undertook India’s first Arctic expedition with a view to initiating studies in glaciology, biological sciences, ocean and atmospheric sciences. In the following year, India set up a research station, Himadri, at the international Arctic research base at Svalbard, Norway.
In another six years’ time, scientists from the ESSO‒National Centre for Antarctic and Ocean Research (NCAOR) and the ESSO‒National Institute of Ocean Technology (NIOT) set up another facility at Kongsfjorden (which is part of the Svalbard archipelago in the Arctic Ocean).
The facility is India’s first multi-sensor moored observatory called “IndArc” which is to undertake studies and collect real-time data on the Arctic climate and its impact on the monsoon. The successful deployment of this facility is seen as a model of Indo-Norwegian scientific and technical cooperation in addressing global climate change.
Another atmospheric laboratory was established in 2016 at Gruvebadet in Ny-Alesund with the aim of initiating studies on clouds, precipitation, long-range pollutants, and other background atmospheric parameters. The Arctic research has helped to initiate studies on glaciers in the Himalayan region.
The importance of such comparative studies is underlined by the Annual Report 2018–19 of the National Centre for Polar and Ocean Research (NCPOR), which acts as the nodal agency for India’s Polar research programme, that also includes Arctic studies. According to the report, “the glaciers are melting world over and those in Arctic and Himalaya are no exception.
The Svalbard glaciers and ice caps cover an area of 34,600 km2 while Himalayas occupy nearly 38,000 km2 area. Observation revealed that for the last one and half decades, the process of glacier retreat has been significantly enhanced in both the regions”.
Needless to say, this has tremendous implications for the agroclimatic conditions of countries like India whose food security itself is dependent on ecosystem stability. The draft IAP itself says that “there are several synergies between polar studies and the study of the Himalayas.
Arctic research will help India’s scientific community to study melting rates of the third pole–the Himalayan glaciers, which are endowed with the largest freshwater reserves in the world outside the geographic poles” (India’s Arctic Policy 2021).
The institutions involved in Polar studies are not many in India. The Goa-based NCPOR, under the Ministry of Earth Sciences, focuses on Polar studies and research. While the Ministry of External Affairs looks after the engagements with the Arctic Council, other ministries such as the Ministry of Environment, Forests and Climate Change, Ministry of Science and Technology and the Department of Space are involved in Polar research.
In fact, India’s interest in Polar studies began in 1981 with the first scientific expedition to Antarctica. Since then, several projects have been underway in the areas of the Arctic, Antarctic, Southern Ocean and the Himalayas.
According to the note attached to IAP, “India seeks to play a constructive role in the Arctic by leveraging its vast scientific pool and expertise in Himalayan and Polar research. India would also like to contribute in ensuring that as the Arctic becomes more accessible, the harnessing of its resources is done sustainably and in consonance with best practices formulated by bodies such as the Arctic Council” (India’s Arctic Policy 2021).
The IAP is enunciated with five major areas of engagement which are science and research, economic and human development cooperation, transportation and connectivity, governance and international cooperation, and national capacity building.
It is clear that the IAP, apart from underlining the significance of science and research, sees the Arctic region as a potential area of engagement in diverse areas of human development and commercial activities. The document says “India seeks to engage in economic development in a manner that is sustainable and is of value to the Arctic residents, especially indigenous communities. The Arctic offers viable opportunities in different sectors where Indian enterprises can be involved, become part of international commerce, promote traditional indigenous knowledge, businesses and best practices” (India’s Arctic Policy 2021).
IAP sees the Arctic as “the largest unexplored prospective area for hydrocarbons remaining on earth” besides its vast reserves of mineral deposits. It also keeps in perspective India’s investment in Russia which amounts to $15 billion in oil and gas projects. Hence India seeks to explore “similar opportunities in other Arctic nations as well” (India’s Arctic Policy 2021).
The draft policy document is also confident of utilising India’s expertise in the digital economy for facilitating establishment of data centres for commerce in the region. It further explores “opportunities for investment in Arctic infrastructure in areas such as offshore exploration/mining, ports, railways and airports.”
This inevitably calls for encouraging participation by Indian public and private sector firms with an expertise in these sectors. India’s chambers of industry and commerce will be encouraged to enhance private investment in the Arctic and explore the public–private partnership model. The draft policy also indicated that Indian companies will be encouraged to obtain membership to the Arctic Economic Council (India’s Arctic Policy 2021).
Another area where India has leverage in the Arctic region is human development. The document says “Specialised cultures of the Arctic’s indigenous inhabitants are being inexorably impacted by climate change as well as economic development and improved connectivity. This is similar to the socio-ecological-economic predicament of the Himalayan peoples.
The disruption of unique ecosystems and erosion of traditional knowledge are common to both. India has substantial expertise in addressing such issues and is uniquely placed to make a positive contribution in assisting the Arctic’s indigenous communities cope with similar challenges” (India’s Arctic Policy 2021).
In the realm of transportation and connectivity, India has vital stakes. According to IAP, “India ranks third in the list of seafarer supplying nations catering to almost 10% of global demand. India’s maritime human resources could contribute towards meeting the growing requirements of the Arctic” (India’s Arctic Policy 2021).
India expects that ice free conditions in the Arctic would soon result in the “opening of new shipping routes and thereby lowering costs and reshaping global trade. Traffic, especially through the Northern sea route, is rising exponentially and is projected to quadruple by 2025.”
The draft policy also seeks to “explore the possibility of linking the International North-South Transport Corridor with the Unified Deep-Water System and its further extension to the Arctic.” India expects that “the North-South connectivity will result in lowering shipping costs and overall development of the hinterland and of indigenous communities more than East-West connectivity” (India’s Arctic Policy 2021).
India is well aware of the fact that the Arctic governance is very crucial in the geopolitical milieu and the region itself is “governed by numerous national domestic laws, bilateral agreements, global treaties and conventions and customary laws for the indigenous peoples.” Hence, the Arctic states’ “respective sovereign jurisdictions as well as areas beyond national jurisdiction” need to be reckoned within the framework of international and national regulations.
While the overall focus of capacity building is on science and technology, the draft document does not seem to have given adequate space for social sciences, including the strategic component in the making of India’s Arctic policy, even though the four sections of the five pillars IAP outlines deal with these diverse areas.
China and Arctic Policy
India notified IAP at a crucial time of global and regional power realignments, even in the midst of the pandemic. It was in 2018 that China declared itself a “near Arctic state” and brought out a white paper in this regard. Though China does not have territorial sovereignty and related sovereign rights in the Arctic, it has been so eager to establish a foothold in the region with its self-assumed identity as “near Arctic state.”
The strategic significance of China’s Arctic Policy (People’s Republic of China 2018) outlined through its white paper cannot be glossed over. It underscores that the Arctic is a region having “global implications and international impacts.” Referring to the Arctic situation, the white paper says that the geopolitical scenario “goes beyond its original inter-Arctic States or regional nature, having a vital bearing on the interests of States outside the region and the interests of the international community as a whole, as well as on the survival, the development, and the shared future for mankind” (People’s Republic of China 2018).
China has also gone to the extent of conceding, perhaps for the first time, that its interests in the Arctic region cannot be limited to scientific research but would move to an array of commercial activities. This obviously becomes a part of its project to build a “Polar silk road” that links China with Europe through the Arctic and fits in with the new “blue ocean passages” extending from Beijing’s Maritime Silk Road (MSR), put in place in 2013.
A document by the European Parliament Think Tank (EPTT) says that “China’s Arctic policy suggests a strong desire to push for the internationalisation of the Arctic’s regional governance system. The white paper is not a strategy document, and is more interesting for what it omits, such as the national security dimension that is a major driver of China’s Arctic ambitions”.
By calling itself as a “responsible major country,” China, however, tries to dispel concerns of the Arctic or non-Arctic states about the extent of its geopolitical ambitions in the region, by emphasising Beijing’s “commitment to international law and cooperation and balancing economic interests with environmental protection” as EPTT pointed out.
Though there were frequent references to UNCLOS in the white paper, experts contest China’s sincerity and credentials. In 2016, for example, as EPTT document says, “China bluntly disregarded the Permanent Court of Arbitration’s ruling on China’s maritime claims in the South China Sea versus the Philippines’ claims, and on the environmental damage China’s large-scale artificial island-building on several maritime features entailed”.
China became more assertive in its maritime policy during the last decade, but the scholars and experts were already absorbed in reimagining the Chinese power in the global strategic landscape.
For example, Li Zhenfu, who teaches at the Dalian Maritime University, and is one of the most ardent Chinese commentators on Arctic issues, wrote a decade back that “whoever controls the Arctic sea route will control the world economy and a new internationally strategic corridor.” Li said that China must “play an active, pre-emptive, and vigilant role in Arctic affairs”.
In Conclusion
No doubt, the Arctic is rich in resources (with as much as 13% of the world’s undiscovered oil and 30% of its undiscovered natural gas reserves). However, the Arctic has become so sensitive these years and the region is warming far more rapidly than anywhere else on the planet.
Scientists say that temperatures mounted almost 1.8 degrees Fahrenheit (or 1 degree Celsius) in the past decade alone. It certainly calls for extreme vigilance when powers like China and Russia think about transforming the Arctic into a terrain for big business and rapid economic development.
Plausibly, India’s draft Arctic policy is embedded in its basic approach which underlines the significance of sustainable engagement through its SciTech power. IAP is also cognisant of the “vulnerability of the Arctic to unprecedented changes in the climate” (Ghosh and Aggarwal 2021b). Hence, its emphasis on “rule-based” governance architecture in the region fits in with India’s long-standing policy.
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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.
Globally, around 80% of wastewater flows back into the ecosystem without being treated or reused, according to the United Nations.
This can pose a significant environmental and health threat.
In the absence of cost-effective, sustainable, disruptive water management solutions, about 70% of sewage is discharged untreated into India’s water bodies.
A staggering 21% of diseases are caused by contaminated water in India, according to the World Bank, and one in five children die before their fifth birthday because of poor sanitation and hygiene conditions, according to Startup India.
As we confront these public health challenges emerging out of environmental concerns, expanding the scope of public health/environmental engineering science becomes pivotal.
For India to achieve its sustainable development goals of clean water and sanitation and to address the growing demands for water consumption and preservation of both surface water bodies and groundwater resources, it is essential to find and implement innovative ways of treating wastewater.
It is in this context why the specialised cadre of public health engineers, also known as sanitation engineers or environmental engineers, is best suited to provide the growing urban and rural water supply and to manage solid waste and wastewater.
Traditionally, engineering and public health have been understood as different fields.
Currently in India, civil engineering incorporates a course or two on environmental engineering for students to learn about wastewater management as a part of their pre-service and in-service training.
Most often, civil engineers do not have adequate skills to address public health problems. And public health professionals do not have adequate engineering skills.
India aims to supply 55 litres of water per person per day by 2024 under its Jal Jeevan Mission to install functional household tap connections.
The goal of reaching every rural household with functional tap water can be achieved in a sustainable and resilient manner only if the cadre of public health engineers is expanded and strengthened.
In India, public health engineering is executed by the Public Works Department or by health officials.
This differs from international trends. To manage a wastewater treatment plant in Europe, for example, a candidate must specialise in wastewater engineering.
Furthermore, public health engineering should be developed as an interdisciplinary field. Engineers can significantly contribute to public health in defining what is possible, identifying limitations, and shaping workable solutions with a problem-solving approach.
Similarly, public health professionals can contribute to engineering through well-researched understanding of health issues, measured risks and how course correction can be initiated.
Once both meet, a public health engineer can identify a health risk, work on developing concrete solutions such as new health and safety practices or specialised equipment, in order to correct the safety concern..
There is no doubt that the majority of diseases are water-related, transmitted through consumption of contaminated water, vectors breeding in stagnated water, or lack of adequate quantity of good quality water for proper personal hygiene.
Diseases cannot be contained unless we provide good quality and adequate quantity of water. Most of the world’s diseases can be prevented by considering this.
Training our young minds towards creating sustainable water management systems would be the first step.
Currently, institutions like the Indian Institute of Technology, Madras (IIT-M) are considering initiating public health engineering as a separate discipline.
To leverage this opportunity even further, India needs to scale up in the same direction.
Consider this hypothetical situation: Rajalakshmi, from a remote Karnataka village spots a business opportunity.
She knows that flowers, discarded in the thousands by temples can be handcrafted into incense sticks.
She wants to find a market for the product and hopefully, employ some people to help her. Soon enough though, she discovers that starting a business is a herculean task for a person like her.
There is a laborious process of rules and regulations to go through, bribes to pay on the way and no actual means to transport her product to its market.
After making her first batch of agarbathis and taking it to Bengaluru by bus, she decides the venture is not easy and gives up.
On the flipside of this is a young entrepreneur in Bengaluru. Let’s call him Deepak. He wants to start an internet-based business selling sustainably made agarbathis.
He has no trouble getting investors and to mobilise supply chains. His paperwork is over in a matter of days and his business is set up quickly and ready to grow.
Never mind that the business is built on aggregation of small sellers who will not see half the profit .
Is this scenario really all that hypothetical or emblematic of how we think about entrepreneurship in India?
Between our national obsession with unicorns on one side and glorifying the person running a pakora stall for survival as an example of viable entrepreneurship on the other, is the middle ground in entrepreneurship—a space that should have seen millions of thriving small and medium businesses, but remains so sparsely occupied that you could almost miss it.
If we are to achieve meaningful economic growth in our country, we need to incorporate, in our national conversation on entrepreneurship, ways of addressing the missing middle.
Spread out across India’s small towns and cities, this is a class of entrepreneurs that have been hit by a triple wave over the last five years, buffeted first by the inadvertent fallout of demonetization, being unprepared for GST, and then by the endless pain of the covid-19 pandemic.
As we finally appear to be reaching some level of normality, now is the opportune time to identify the kind of industries that make up this layer, the opportunities they should be afforded, and the best ways to scale up their functioning in the shortest time frame.
But, why pay so much attention to these industries when we should be celebrating, as we do, our booming startup space?
It is indeed true that India has the third largest number of unicorns in the world now, adding 42 in 2021 alone. Braving all the disruptions of the pandemic, it was a year in which Indian startups raised $24.1 billion in equity investments, according to a NASSCOM-Zinnov report last year.
However, this is a story of lopsided growth.
The cities of Bengaluru, Delhi/NCR, and Mumbai together claim three-fourths of these startup deals while emerging hubs like Ahmedabad, Coimbatore, and Jaipur account for the rest.
This leap in the startup space has created 6.6 lakh direct jobs and a few million indirect jobs. Is that good enough for a country that sends 12 million fresh graduates to its workforce every year?
It doesn’t even make a dent on arguably our biggest unemployment in recent history—in April 2020 when the country shutdown to battle covid-19.
Technology-intensive start-ups are constrained in their ability to create jobs—and hybrid work models and artificial intelligence (AI) have further accelerated unemployment.
What we need to focus on, therefore, is the labour-intensive micro, small and medium enterprise (MSME). Here, we begin to get to a definitional notion of what we called the mundane middle and the problems it currently faces.
India has an estimated 63 million enterprises. But, out of 100 companies, 95 are micro enterprises—employing less than five people, four are small to medium and barely one is large.
The questions to ask are: why are Indian MSMEs failing to grow from micro to small and medium and then be spurred on to make the leap into large companies?
At the Global Alliance for Mass Entrepreneurship (GAME), we have advocated for a National Mission for Mass Entrepreneurship, the need for which is more pronounced now than ever before.
Whenever India has worked to achieve a significant economic milestone in a limited span of time, it has worked best in mission mode. Think of the Green Revolution or Operation Flood.
From across various states, there are enough examples of approaches that work to catalyse mass entrepreneurship.
The introduction of entrepreneurship mindset curriculum (EMC) in schools through alliance mode of working by a number of agencies has shown significant improvement in academic and life outcomes.
Through creative teaching methods, students are encouraged to inculcate 21st century skills like creativity, problem solving, critical thinking and leadership which are not only foundational for entrepreneurship but essential to thrive in our complex world.
Udhyam Learning Foundation has been involved with the Government of Delhi since 2018 to help young people across over 1,000 schools to develop an entrepreneurial mindset.
One pilot programme introduced the concept of ‘seed money’ and saw 41 students turn their ideas into profit-making ventures. Other programmes teach qualities like grit and resourcefulness.
If you think these are isolated examples, consider some larger data trends.
The Observer Research Foundation and The World Economic Forum released the Young India and Work: A Survey of Youth Aspirations in 2018.
When asked which type of work arrangement they prefer, 49% of the youth surveyed said they prefer a job in the public sector.
However, 38% selected self-employment as an entrepreneur as their ideal type of job. The spirit of entrepreneurship is latent and waiting to be unleashed.
The same can be said for building networks of successful women entrepreneurs—so crucial when the participation of women in the Indian economy has declined to an abysmal 20%.
The majority of India’s 63 million firms are informal —fewer than 20% are registered for GST.
Research shows that companies that start out as formal enterprises become two-three times more productive than a similar informal business.
So why do firms prefer to be informal? In most cases, it’s because of the sheer cost and difficulty of complying with the different regulations.
We have academia and non-profits working as ecosystem enablers providing insights and evidence-based models for growth. We have large private corporations and philanthropic and funding agencies ready to invest.
It should be in the scope of a National Mass Entrepreneurship Mission to bring all of them together to work in mission mode so that the gap between thought leadership and action can finally be bridged.