New Delhi: The swearing-in ceremony on 26 May 2014, marking Narendra Modi’s first term as Prime Minister in office, was distinctly different from those one had witnessed earlier in New Delhi. Apart from local dignitaries and the diplomatic corps, the heads of government of all neighbouring Saarc (South Asian Association for Regional Cooperation) countries—Afghanistan, Pakistan, Maldives, Sri Lanka, Bangladesh, Bhutan and Nepal, along with the Prime Minister of Mauritius—were also invited to his inauguration. Moreover, unlike in the past, there was significant public participation. Given the size of the audience, the swearing-in was administered in the forecourt of the Rashtrapati Bhavan, by then president Pranab Mukherjee.

Just over five years later, Modi discarded his earlier practice of inviting all the neighbours, giving important clues about the likely direction of India’s foreign policy over the next five years. The heads of government of all eastern neighbours—Bangladesh, Myanmar, Thailand, Sri Lanka, Nepal and Bhutan, along with the Prime Minister of Mauritius—were at the inauguration last week. The President of Kyrgyzstan, who is also chairman of the Shanghai Cooperation Organization, was also welcomed as a special invitee.

Modi’s sweeping victory in the recent general elections has been regarded as remarkable, not merely in India, but also beyond our shores. But his second swearing-in at the Rashtrapati Bhavan has understandably raised some eyebrows, as there was a distinct change in the list of invited countries. On this occasion, unlike in 2014, there was no presence of the prime minister of Pakistan. Many naturally attributed this to the Pulwama terrorist attack and the retaliatory airstrikes on the Jaish-e-Mohammed terrorist training centre in Balakot. But deep shifts in India’s foreign policy outlook have been under the works for several years now.

Calibrated policy change

The absence of Pakistan’s prime minister was the outcome of a carefully calibrated policy change, effected after the Uri terrorist strike in 2016. India responded to that attack with “surgical strikes" on multiple terrorist camps and supporting Pakistan army posts across the Line of Control.

While many in India would certainly not have welcomed the presence of Prime Minister Imran Khan in Rashtrapati Bhavan, especially after the recent tensions, the rationale for his not being invited needs to be carefully understood. Even as relations with Pakistan were steadily deteriorating ever since the terror attacks in Pathankot and Uri in 2016, the Modi government came to the conclusion that countries across the world were also losing patience with Pakistani doublespeak on terrorism across its borders—in both India and Afghanistan. There was no doubt that Pakistan’s army was sponsoring this terrorism. New Delhi was then also cultivating Islamic countries like Saudi Arabia and the United Arab Emirates (UAE), who were amongst the main funders and backers of Pakistan.

Sensing growing American and European anger and discontent with Pakistan’s continuing sponsorship of terrorism in India and Afghanistan, India commenced turning the screws on Pakistan—financially, militarily and diplomatically. Financially, India actively participated in the US-led effort to use the International Financial Action Task Force (FATF) to cut off, or drastically reduce, Pakistan’s access to financial aid from western donors and institutions like the World Bank and the Asian Development Bank (ADB). While China continued bilateral assistance to Pakistan for the China-Pakistan Economic Corridor, Beijing could not weaken the international financial squeeze on Pakistan, led by the US. This squeeze continues, forcing Pakistan, which desperately needs funds from the International Monetary Fund (IMF), to be seen as demonstrably taking action—like clamping down on groups like the Lashkar-e-Taiba and the Jaish-e-Mohammed.

These moves were accompanied by concerted efforts by India to isolate Pakistan diplomatically in South Asia. At the 2016 BRICS (Brazil, Russia, India, China and South Africa) Summit in Goa, where Russian President Putin and Chinese President Xi Jinping, together with the Presidents of Brazil and South Africa, led their respective delegations, India decided to exclude the participation of Saarc countries, which included Pakistan. It chose, instead, to invite the leaders of its eastern neighbours, who are regionally linked to it under the “BIMSTEC" grouping—comprising Bangladesh, Myanmar, Thailand, Nepal, Bhutan and Sri Lanka. While Pakistan was, thus, denied interaction with world leaders on Indian soil, a clear message was sent worldwide, that India would make Pakistan pay a heavy price for sponsorship of terrorism.

India’s message about its readiness to do what is necessary to isolate Pakistan regionally was reinforced tellingly, barely a month later, when India announced that Prime Minister Modi would not attend the forthcoming Saarc Summit, scheduled to be held in Islamabad on 15-19 November 2016. Contrary to public criticism that efforts to isolate Pakistan in Saarc would fail, and New Delhi would find itself isolated, Bangladesh and Bhutan followed suit, backing India, within days. Bangladesh announced: “The growing interference in the internal affairs of Bangladesh by one country has created an environment which is not conducive to hosting of the Saarc Summit in Islamabad in November 2016." Afghanistan’s reaction was even sharper, with Kabul declaring: “Due to the increased level of violence and fighting as a result of imposed terrorism on Afghanistan, the President Ashraf Ghani, with his responsibilities as the commander-in-chief, will be fully engaged and will not be able to participate in the Saarc Summit in the present circumstances." Bhutan’s reservations were similarly expressed. Nepal, Sri Lanka and Maldives, thereafter, pulled out of the summit.

Discarding SAARC

The decision by India to discard Saarc as the primary grouping for promoting regional cooperation, including for trade and economic cooperation, was preceded by a number of Pakistani actions over the years. These actions made it clear that Islamabad was determined to stall progress on promoting cooperation in crucial areas like regional trade, investment, and terrorism. When the Saarc grouping was set up in 1985, the expectation was that it would serve as the focal point for regional economic integration and devise modalities for cooperation in areas like education, environment, tourism and terrorism. As globalization spread rapidly in the 1990s, it soon became clear that Saarc should follow the example set by groups like the European Union (EU) and Association of Southeast Asian Nations (Asean) to integrate economies and promote regional trade and investment. A Preferential Trade Agreement between Saarc countries was signed in 1993 and came into force in 1995. In the meantime, Saarc leaders set up an “Eminent Persons Group" to draw up a road map for economic integration in South Asia. This group recommended in 1999 that Saarc should strive to make South Asia a free trade area by 2010, a Customs Union by 2015, and an Economic Union like the EU by 2020—a deadline that is just one year away.

After prolonged discussions, Saarc ministers agreed on South Asian Free Trade Area (SAFTA) in 2004 at the Saarc Summit in Kathmandu. Article 5 of the agreement states: “Each Country shall accord national treatment to the products of other countries." It was agreed that customs duties on all goods traded would be reduced to zero by 2016. Pakistan has, thereafter, blatantly flouted the provisions of SAFTA by drastically limiting the list of items that can be imported from India. India’s free trade agreement concluded with Asean, however, now covers exchanges in both goods and services. While Pakistan is grossly flouting the provisions of a signed agreement on free trade in goods, it is clear that given its opposition, there can be no hope of it agreeing to free trade in services.

As an integral part of its “Look East" policies, India signed a free trade agreement with Asean, covering ten Asean member states on 13 August 2009. Annual trade with Asean has now reached $81.3 billion. Interestingly, India also has “Comprehensive Economic Cooperation" partnerships with Japan, South Korea, Singapore and Malaysia, which cover free trade in both goods and services. Our trade relations over the past decade have resulted in the formation of a free trade zone for us, extending from our shores across the Bay of Bengal to the shores of South Korea, Japan, and the Philippines.

The way ahead

One of India’s most remarkable diplomatic achievements has been that it has settled its maritime boundaries with all its eastern neighbours. This was done not only with bilateral agreements on maritime boundaries with Sri Lanka, Myanmar, Thailand, Indonesia and Bangladesh, but also tripartite agreements to determine tri-junctions, with Myanmar and Thailand; Indonesia and Thailand; and Sri Lanka and Maldives. Even arriving at an agreement to demarcate our maritime frontiers with Pakistan will not be difficult once an agreement is reached on demarcating the land boundary in the Sir Creek area (in Gujarat). Pakistan, however, remains our only neighbour with whom maritime boundaries have not been finalized.

India has finalized its land and maritime boundaries with all its partners in BIMSTEC. We also have free trade agreements with all BIMSTEC member states. We are ready to provide transit facilities to Bangladesh ports if our landlocked neighbours, Nepal and Bhutan, find our port facilities inadequate for their needs. We make extensive use of Colombo in Sri Lanka for international trade. We are now looking at prospects for land corridors through Myanmar to Thailand and possibly Vietnam. Pakistan allows the transit of goods from Afghanistan to India across its soil, while denying India this same route for its exports to Afghanistan. This is a gross violation of the entire concept of free transit of goods, between members of a regional free trade agreement.

India also faces problems on extradition of persons involved in acts of terrorism on its soil finding safe haven in Pakistan. The mastermind of the 1993 terrorist bomb explosions in Mumbai, Dawood Ibrahim, lives comfortably in one of the high-end suburbs of Karachi. Pakistan denies his presence on its soil. Zakiur Rehman Lakhvi, one of the masterminds of the 2009 terrorist attack in Mumbai, lives comfortably under military protection in Pakistan. These Pakistani actions violate the letter and spirit of the Saarc regional convention on suppression of terrorism.

Pakistan is now going through a serious economic crisis, with its foreign exchange reserves falling periodically to just around $10 billion despite regular doles from China, Saudi Arabia, and the UAE. US-led economic pressures could, however, deny cash-strapped Islamabad the money it needs desperately from the IMF, World Bank, the ADB and oil-rich Arab countries like Saudi Arabia and the UAE. These donors would be reluctant to bail out Pakistan, while it faces pressures from the international community for its links to terrorist groups which are fomenting terrorism in India and Afghanistan. In these circumstances, actions like denying Pakistan international legitimacy by isolating it in South Asia, as we are now doing, serve a useful purpose. They contain Pakistan’s ability to inflict damage on its neighbours by using terrorism as an instrument of state policy.

India will, in course of time, engage Pakistan diplomatically and discreetly to assess how sincere Rawalpindi is in dismantling its infrastructure of terrorism. Diplomatic and backchannel contacts will inevitably be utilized to directly ascertain what Pakistan proposes to do, on issues like terrorism. India has to be careful on this score, as Imran Khan’s government is widely perceived as being subservient to the army—in the conduct of not just Pakistan’s foreign and security policies, but also in crafting the country’s internal politics, economic management, and internal security.

The new foreign minister S. Jaishankar has personally dealt with countries that influence Pakistan for decades. He has dealt with Pakistan directly as foreign secretary for over three years. He is a realist, especially on issues of national security.

G.Parthasarathy is a former diplomat. He served as India’s high commissioner to Pakistan and Myanmar.

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