India's Crisis Could Be Its Opportunity

My friend Seshadri Kumar had this idea that I would like to expand upon, because I believe there is a real possibility of a breakthrough for India in terms of strategic security.

Consider this. As of late September 2016, India's security situation looks very troubled.

Kashmir has been in flames ever since the killing of Burhan Wani. Regardless of the view in much of India that Wani was a terrorist who deserved to be killed, the Kashmir Valley patently disagrees. The tough new Indian policy, of crushing popular protests with the hugely troubling use of pellet guns to deliberately blind young protesters, is exacerbating anger. Not only is Pakistan able to raise the Kashmir issue in many international fora, but its old allies in the OIC have stirred themselves as well. Turkey wants to send a fact-finding mission to Indian-administered Kashmir.

There has been yet another attack on an Indian military base (Uri) by what appear to be Pakistan-based terrorists. Pakistan defiantly denies all involvement. What's more, through word and deed, the country appears to be engaging in its characteristic brinkmanship by preparing for all-out war that could even go nuclear.

The US has indicated strongly that it will not approve of military action by India, nor does it support India's recent counter-gambit of raising the issue of Baluchistan.

There were initial reports that Russia had cancelled its first-ever planned joint military exercises with Pakistan in solidarity with India over the Uri attack. However, it turned out later that the exercises were going ahead.

China issued a veiled warning to India that it would not stand by and allow a military attack on Pakistan, nor would it countenance any disturbance in Baluchistan that would disrupt its plans for the CPEC (China Pakistan Economic Corridor) that will link Kashgar in China with Gwadar in Pakistan's Baluchistan state.

Iran, a country relatively friendly to India, has expressed interest in joining the CPEC project. Besides, Iran also has a Sunni Baluch-majority province (Sistan-o-Balochistan) bordering Pakistani Baluchistan. If the Baluch get too restive, egged on by India, and begin to demand independence for themselves in the form of a "Greater Baluchistan" carved out of Pakistan and Iran, India's support for the Baluch rebels will put Iran seriously offside.

In sum, India's old friends (Russia, Iran) appear to have cooled off and are warming to Pakistan.

India's new friend (the US) is unwilling to go all the way in the country's support.
India's old enemies (Pakistan, China) are turning up the pressure.

It's a perfect storm .To put it bluntly, India appears impotent to deal with regular and unceasing low-level terror attacks against its people. There is growing popular impatience with the government, and increasingly loud calls for action, but the Indian government's actions are highly constrained. Nothing can be done.

In some ways, the country's crisis today mirrors the crisis in 1991. In 1991, the crisis was economic in nature. India faced a balance of payments crisis which required the government to airlift 47 tons of gold to the Bank of England and 20 tons of gold to the Union Bank of Switzerland to raise $600 million. However, the final upshot of the crisis was hugely positive. India was forced to liberalise its economy, and the results are for all to see. From less than US$1 billion in 1991, India's foreign exchange reserves today are in excess of US$350 billion. GDP has increased from US$250 billion to over US$1.9 trillion in 2015. Hence a crisis need not be a disaster. It could be just the nudge the country needs to take the painful but necessary steps to a better tomorrow.

What is the equivalent in today's terms to the country having to airlift its gold reserves to stave off a collapse?

If Seshadri Kumar is right, what will probably have to give is India's intransigence in its border dispute with China.

Consider that China has no quarrel with India apart from its territorial claims. It does issue periodic warnings to India not to meddle in affairs that do not concern it, such as supporting Vietnam in drilling for oil in the South China Sea, but these are relatively minor issues. The major sticking point in India-China relations is China's claim to the entire northeastern Indian state of Arunachal Pradesh (which it calls South Tibet) and a part of Jammu & Kashmir state called Aksai Chin.

I believe the time is fast approaching when India will have to get creative about what it is willing to sacrifice to make the best of a pretty bad situation.

Consider that China once had border disputes with 14 countries, but has swiftly settled 12 of them. Only the disputes with India and Bhutan remain, and since Bhutan's foreign policy is managed by India, there is essentially only one country in Asia that refuses to negotiate with China.

If India is willing to swallow the bitter pill and discuss the issue of Arunachal Pradesh and Aksai Chin with China, the major source of tension between the world's two most populous nations might come to an end. Once the India-China border is agreed upon through a formal treaty, India can afford to withdraw the bulk of its soldiers from their ever-alert positions along that long border.

If the example of the 12 other countries is anything to go by, there is a possibility that China will be relatively generous with India in drawing the new border.

Beyond the border treaty, there are several benefits that could accrue to India. China sees fit to keep India off-balance primarily because India has positioned itself as a hostile rival. If India withdraws from a hostile position, China's interest in destabilising India automatically reduces. In fact, China is so anxious about the success of the CPEC that it would like greater stability all along the CPEC's path. Here is where India could prevail upon China to bring about a similar border treaty between India and Pakistan. Pakistan will not necessarily play ball in bilateral discussions with India, but it is very likely to listen to China. If the LOC (Line of Control) is frozen as the international border between India and Pakistan, then Pakistan also has no further territorial claims on India. It will disappoint the Kashmiri separatists a great deal, but it is equally likely that the Pakistani military will clamp down on them to oblige China.

If the two major border disputes of India are settled, and the Pakistani deep state is forced to maintain peace along the border (in the interests of the CPEC), that will benefit India as well.

Investments into the entire South Asian region will increase (including from cash-surplus China), infrastructure improvement in India can accelerate with the help of these investments, a SAARC free trade zone may become a reality, and standards of living can start to rise.

All these enormous benefits will accrue to the Indian people, but first, they must be willing to overcome their nationalistic pride and think seriously about giving in to China on the border issue.