February 19, 2019

India’s Options after the Pulwama Attack

Note: A version of this article appeared on BBC World on February 19, 2019. Due to unapproved changes by the editors, the original draft has been reproduced below. The final published version can be read here.

On February 14, India experienced its worst Islamist terrorist attack in a decade when the car bombing of a paramilitary convoy in Jammu and Kashmir resulted in over 40 fatalities. While the suicide bomber was a local Kashmiri, the group that recruited, trained, and equipped him was Jaish-e-Mohammed, a United Nations-designated terrorist organisation that claimed responsibility for the attack and operates openly in Pakistan.

The incident at Pulwama adds to a long history of terror attacks in India by groups protected and supported by Pakistan’s security agencies, including the 1993 Mumbai bombings, the 2001 assault on the Indian parliament, the 2008 Mumbai attacks, and the 2016 targeting of military bases at Pathankot and Uri. With Indian general elections around the corner, the government is under pressure to respond to the latest provocation, or at least demonstrate that such actions are not without consequences. What are some of India’s options?

Diplomatic Efforts
At the political level, India-Pakistan relations have been frozen for almost three years. In his first two years in office after 2014, Indian Prime Minister Narendra Modi invited his Pakistani counterpart to his inauguration, resumed talks between National Security Advisers, made an unscheduled visit to Lahore, and approved a much-criticised effort at collaborative counter-terrorism investigations. Pakistan responded to these efforts with firing across the Line of Control separating the two sides, insisting on meeting with Kashmiri separatists in India, approving the attack on Pathankot, and arresting and sentencing to death an alleged Indian spy. By July 2016, as Pakistan sought to take advantage of renewed agitations in the Kashmir Valley, New Delhi’s patience dried up and its position on a number of issues hardened. Despite a new civilian government in Pakistan under Prime Minister Imran Khan, a meeting between the two countries’ foreign ministers at last year’s United Nations General Assembly was cancelled. Normal diplomatic channels have, however, continued.

After the Pulwama attack, India has undertaken a renewed diplomatic effort to make the case against Pakistan’s state support for terrorism. This outreach builds upon many years of India insisting on condemnation of Pakistan in its diplomatic pronouncements with other friendly countries, including the naming of individual groups such as Jaish-e-Mohammed, Lashkar-Taiba, and D Company. It has also linked Pakistan to the primary security challenges of its partners: for example, Japan’s concerns about North Korea. Such moves have sensitised others to India’s concerns about Pakistan, facilitated intelligence cooperation on Pakistan-based terrorist groups, and encouraged crackdowns on their financing by government authorities in many countries. New Delhi’s continued efforts in these respects also helps to create greater acceptability for economic or military costs that India might impose at a later date.

The challenge facing India is that other countries, however sympathetic, will continue to see value in retaining their ties with Pakistan. Although the United States has become increasingly frustrated with Pakistan’s duplicity on terrorism, China remains Pakistan’s closest ally, as it has for decades. It has provided Pakistan with nuclear and missile technology and equipment, conventional arms, and – under the China-Pakistan Economic Corridor – billions of dollars of investment in strategic projects. Saudi Arabia and the United Arab Emirates also have continuing economic and security ties with Pakistan, although both have also been warming their relations with India over the past few years. 

Even the United States and Europe differ in the priorities. The United States and European Union continue to offer Pakistan preferential trading benefits, in some cases resulting in lower tariffs on imports compared to India. Some EU officials have privately blamed the United Kingdom for Brussels’ accommodative approach towards Pakistan, and have intimated that they may take sterner measures after Brexit.

Economic Costs
The day after the Pulwama attack, India’s Cabinet Committee on Security announced that India was withdrawing Most Favoured Nation trading status with Pakistan. This had been in place since 1996, even though Pakistan had not reciprocated. The absence of MFN will significantly raise customs duties on Pakistani exports to India, effectively resulting in unilateral Indian sanctions. Given that direct trade between the two countries is negligible, this move is primarily symbolic.

The absence of trade is indicative of a general lack of direct economic leverage that India enjoys with Pakistan. This is because, in some ways, it has been implementing punitive measures against Pakistan for years. To give but one example, India has not played Pakistan in a bilateral Test cricket series since late 2007, in part because such a series would result in a financial windfall for the Pakistan Cricket Board.

Other, more severe, measures such as abrogating the 1960 Indus Waters Treaty have been suggested. Such a step would have significant costs, including eroding India’s relations with other countries with which it has water-sharing arrangements (such as China, Nepal, and Bangladesh). That said, India is already inclined to making fuller use of the waters of Indus and its tributaries, within the ambit of the existing treaty.

Beyond bilateral issues, India will likely continue to employ diplomatic pressure to raise the costs of economic and business ties with Pakistan. One expected effort will involve advocating for Pakistan to join Iran and North Korea on the black list of the Financial Action Task Force, an intergovernmental body that coordinates policies to combat financial crimes. This would raise scrutiny on financial transactions involving Pakistan, with second-order effects for its currency inflows, credit rating, stock market, and banking sector. However, such a move will likely be resisted by China, which only dropped its opposition to Pakistan’s ‘grey listing’ last year in exchange for India’s support for Beijing’s vice presidency of the organisation. Other multilateral efforts may extend to leveraging India’s position at various export control groups in which it recently acquired membership.

Military Options
The primary challenges of military responses are that Pakistan possesses a nuclear deterrent – including possibly one of the fastest growing nuclear arsenals – as well as a potent conventionally-armed military. For all the sabre-rattling in the Indian press and public, these are realities that the Indian leadership must keep in mind.

However, both Pakistan and India have explored options below the nuclear threshold. In 1999, Pakistani forces made an incursion onto India’s side of the Line of Control resulting in the limited Kargil War. On a number of subsequent occasions, India retaliated to Pakistani provocations with coordinated small-scale raids across the Line of Control. The 2016 attacks, in response to the Uri attack, became widely known as ‘surgical strikes.’

Beyond limited ground forces operations under the nuclear threshold, countries such as the United States and Israel have made use of other kinetic options in similar situations. These have included air or missile strikes against terrorist sanctuaries and military facilities, military blockades, and various covert operations.

Other military options would be long-term in nature. The challenge of countering cross-border infiltration from Pakistan into India has already benefited from the use of various new security technologies as well as intelligence partnerships with other countries. Improvements in these areas, including through the acquisition of unmanned aircraft and enhanced technical intelligence cooperation, would represent major investments in countering the strategic challenge of cross-border terrorism from Pakistan.

Of course, these represent only some of the many ways in which India might choose to respond. If recent history is any guide, we may witness something entirely unprecedented and unexpected.

February 18, 2019

India has been squeezing Pakistan economically even before Pulwama

The following article originally appeared in The Print on February 18, 2019. 

In the aftermath of the Pulwama tragedy – the worst Islamist terror attack in India since 2008 – what can and should India do? In this instance, Pakistan’s role is certain, with its continued support to the Jaish-e-Mohammed to recruit, expand its financial network and training infrastructure. There are a number of kinetic options for retaliation, through military force or covert action, and these are undoubtedly being contemplated. Such retaliation may or may not deter Pakistan from future attacks, but they will certainly be retributive. In the meantime, what are the economic costs that India can bring to bear?

At Friday’s Cabinet Committee on Security meeting, India announced that it would withdraw the Most Favoured Nation trading status, in place since 1996 despite Pakistan’s lack of reciprocity. This imposes high customs duty on Pakistani imports to India and, as a targeted discriminatory economic measure, represents the formalisation of Indian sanctions against Pakistan.

But perhaps, there is little appreciation for how India has been making a sustained effort for many years to isolate Pakistan economically, in a bid to compel it to stop its state support for terrorism. For a variety of reasons – largely due to Pakistan’s own behaviour – these efforts have only recently become effective. But mostly due to the pathologies of Pakistan’s security state, these have not had the effect of compelling Pakistan to overturn its support for terrorism – yet.

Indian attempts at isolating Pakistan date back to the Cold War, even when India had a much weaker hand. In the 1980s, for example, India successfully lobbied the United States to refrain from extending certain military assistance to Pakistan. Efforts at isolating Pakistan continued after the 9/11 attacks in 2001, when India felt the international mood shift against cross-border terrorism.

But as during the early Cold War years and the Afghan War of the 1980s, the post-9/11 climate found Pakistan proving itself useful to the United States and others. India found commiseration, even sympathy, in many international capitals, but its concerns about Pakistan’s sponsorship of terrorism were ultimately ignored in favour of larger political considerations, namely: paranoia about Pakistan’s nuclear programme, ground lines of communication to Afghanistan, and limited counter-terrorism support that Pakistan provided under duress.

Indian efforts finally began to bear fruit only after 2007-2012. These years saw a number of developments – the Lal Masjid raid in Islamabad at China’s insistence, the 26/11 attacks in Mumbai, the 2009 attack on the Sri Lankan cricket team in Lahore, the Raymond Davis incident, the 2011 Salala skirmish between NATO and Pakistani forces, the killing of Osama bin Laden in Abbottabad, and the Haqqani Network siege of the US Embassy compound in Kabul – that collectively tarnished Pakistan’s reputation. Subsequently, India was able to include condemnation of Pakistan-based terrorist groups – from Lashkar-e-Taiba to D-Company – in joint statements with foreign leaders. And such steps started having real economic implications, as they filtered into economic, trade, and financial policy.

Last year’s downgrading of Pakistan by the Financial Action Task Force (FATF) – an intergovernmental body that coordinates efforts against money laundering, terrorist financing, and financial crimes – is a good example. Pakistan’s ‘grey listing’ was being pushed by India and the United States, among others, but was being blocked by China. India supported China’s elevation to the Vice Presidency of FATF in exchange for Beijing lifting its hold on Pakistan. This move is not simply a rhetorical rap on the knuckles: it has raised the costs of financial transactions involving Pakistan, with repercussions for its credit rating, stock market, banking sector, and currency inflows.

Another good example is US aid to Pakistan. For many years, the United States provided military and economic support to Pakistan to buy logistic cooperation for the war in Afghanistan, get information about its nuclear programme, and receive occasional counter-terrorism intelligence. In 2009-2010, the US Congress – in a misguided attempt at buying long-term goodwill from the Pakistani people – passed the Kerry-Lugar-Berman Act to boost non-military aid over five years.

But sustained efforts to present India’s case to the US lawmakers coupled with growing frustration in Washington meant that such financing was not renewed, in contrast to consistent long-term US aid packages to the likes of Egypt. Total US aid to Pakistan, including military reimbursements, fell from $2.6 billion in 2012 to $345 million in 2018. There were many reasons for this, primarily US anger with Pakistan’s duplicity. But as attested to by the overwhelming support for India from the US Congress, India’s advocacy also played an important role.

If Pakistan believes that none of this will matter because of continued economic assistance from China, it is somewhat mistaken. The China-Pakistan Economic Corridor – a major prong of China’s Belt and Road Initiative – is certainly underway, with a host of port, road, rail, and power projects. But its economic value is grossly overstated. Chinese officials have privately admitted that they do not expect it to cross $19 billion in total investment, rather than the $60 billion or more pronounced by Pakistan. They also believe that “China’s maximum annual direct investment in Pakistan should be around US$1 billion.” Moreover, these investments are not necessary productive. Many projects have been beset with problems – including imported Chinese labour – and the one area of some success, power generation, has not been accompanied by necessary reforms to make them sustainable. This means that Pakistan will be slammed with debt to China when repayments of these loans are due in the coming few years. By contrast, despite latent security concerns and India’s boycott of the Belt and Road Initiative, Chinese direct and portfolio investment in India has continued. It may well be that total Chinese investment into Pakistan will only be marginally more, and possibly even less, than total Chinese investment into India.

India is still a long way from economically isolating Pakistan. In addition to Chinese support, financing from the Gulf Arab states is ongoing, and Pakistan continues to derive trading benefits from the European Union and the United States. But India’s efforts, coupled with Pakistan’s own disastrous policies, have already had a major impact on Pakistan’s economy. In 2008, when the 26/11 attacks took place in Mumbai, the per capita GDPs of India ($1049) and Pakistan ($1038) were almost identical in dollar terms. In the decade since, India’s has almost doubled ($2016) while Pakistan’s has grown only by about 50 per cent ($1527) and has been surpassed by Bangladesh ($1736). As another point of comparison, Pakistan’s GDP today ($307 billion) is less than that of Maharashtra, a single Indian state (about $390-$400 billion). The instability of Pakistan’s economic situation is best represented by its paltry foreign exchange reserves – $8 billion – which when combined with its overall debt, put it on the brink of defaulting.

If India’s efforts, combined with growing international frustrations and Pakistan’s misguided policies, have put Pakistan in such an economically precarious situation, why has that not stopped its support for terrorism against India? The answer lies, in large part, with the strategic culture of the Pakistan Army, best captured in American scholar Christine Fair’s book Fighting to the End. After assessing the Pakistan Army’s own literature, Fair argues that the army will see itself victorious as long as it continues to resist a supposedly belligerent India. Its revisionist policies – including cross-border terrorism – will therefore endure even at the cost of weakening the fundamentals of the country, including its economy. “Pakistan will suffer any number of military defeats… but it will not acquiesce to India,” Fair concludes. “This, for the Pakistan Army, is genuine and total defeat.”

February 15, 2019

Pakistan Has No More Excuses for Supporting Terrorism

The following article originally appeared in Foreign Policy on February 15, 2019.

On the afternoon of Thursday, Feb. 14, a massive explosion rocked a Central Reserve Police Force (CRPF) convoy in Pulwama in the Indian state of Jammu and Kashmir. At least 40 personnel belonging to the CRPF—a 300,000-strong paramilitary force under the Ministry of Home Affairs involved in law-and-order and counterterrorism duties—were killed as a suicide bomber drove an SUV reportedly loaded with about 600 pounds of explosives into their bus. Jaish-e-Mohammed, a terrorist organization based in Pakistan, has claimed responsibility for the attack, and the group’s role has been confirmed by Indian officials. The assault comes weeks before India’s general elections, which are expected to be held in March and April.

The next morning, India’s Cabinet Committee on Security—consisting of the prime minister and four senior ministers—held an emergency meeting and, as a first step, announced the revocation of “most favored nation” trading status for Pakistan. India had granted this status to Pakistan in 1996, although Pakistan had never reciprocated. But this is just one of the retaliatory measures likely to be taken after the worst act of Islamist terrorism in India since the Mumbai attacks in 2008.

The full article can be read here.

India has much goodwill in Afghanistan but that may not be enough

The following article originally appeared in The Hindustan Times on February 15, 2019. 

What are we to make of the rapidly shifting situation in Afghanistan? The country’s welfare has direct security implications for India: We are approaching 20 years since the hijacking of IC 814 to Kandahar. But Afghanistan’s future is so difficult to anticipate because a multitude of internal and external variables are at play.

First, consider the domestic security situation. Attacks in Kabul are still frequent. Several Indian citizens, many engaged in development assistance, have lost their lives, including in the recent Kabul bomb blast of January 14. Parts of the country that were once deemed relatively peaceful — including central Afghan provinces such as Bamiyan — now feature periodic Taliban assaults, including devastating attacks against Afghan security forces.

Second, Afghanistan’s political situation is in considerable disarray. Parliamentary elections were repeatedly postponed, and their execution was hardly seamless. The field in this year’s presidential elections has become incredibly crowded, with former interior minister Hanif Atmar emerging as the most significant challenger to incumbent Ashraf Ghani.

Third, the Taliban too is divided and has been since Mullah Akhtar Mansour was killed on Pakistani soil by the United States (US) in a 2016 drone strike, although the return of Mullah Baradar may prove significant. Still, the Haqqani Network is not represented in leadership council meetings. The arrival of the Islamic State in eastern Afghanistan has added further complications, with some using this development to justify accommodating the Taliban.

Fourth, peace talks between the US and the Taliban are underway, with a parallel Moscow process also ongoing. The Taliban talks are still at a very preliminary stage, despite bold announcements of breakthroughs. The possibility of a ceasefire has been mooted, but the Taliban wants assurances, including the release of prisoners currently in US custody. While Donald Trump has made the withdrawal of US forces a priority, the American security establishment has reason to slow it down, raising the prospect of a withdrawal in name only.

Fifth, Pakistan is unable to take full advantage of a situation that it once deemed desirable. Some of it is due to its own pacification efforts in its northwest, initially conducted under pressure, while some of it can be explained by Pakistan’s relative international isolation, economic weaknesses, and internal political divisions. But it is also increasingly clear, as following the Soviet withdrawal in the late 1980s and after 9/11, that a firm resolution in Afghanistan was never the preferred outcome for Pakistan’s security establishment.

Sixth, China’s role has been thrown into sharper relief. Beijing had previously been uncertain about its own objectives when it engaged in a quadrilateral dialogue with Afghanistan, the US, and Pakistan at the latter’s insistence. But it is now considering a presence in Afghanistan’s Wakhan Corridor to stem Islamist infiltration into Xinjiang.

Seventh, Russia has adjusted its position vis-à-vis the Taliban. Romantic notions of India recreating old alliances are no longer particularly realistic, as the fault lines have changed significantly since the 1990s. Moscow’s motivations include taking advantage of a US pressure point.

So where does all this leave India? Not in a good place. India has staked out two positions in Afghanistan after 2001. One is as the most stringently anti-Taliban external actor, a position that some observers have criticised as hopelessly unrealistic. But not only has this bought India credibility with virtually all major parties within Kabul, it has also placed India in a position to grant legitimacy, as when former warlord and Hezb-e-Islami leader Gulbuddin Hekmatyar agreed a peace deal in 2016. Former Indian diplomat Amar Sinha recently clarified India’s position on the issue of Taliban talks, and subtly warned against undercutting Kabul.

Additionally, India has continued to be involved in state-building efforts, which remain poorly appreciated even within India. It has been among the largest providers of aid to Afghanistan since 2001, developed significant electricity and healthcare infrastructure, built the country’s parliament, and trained large numbers of students, security personnel, and administrators. Being at the vanguard of Afghanistan’s air freight corridor programme, India has become the largest destination of high-value Afghan exports. At the same time, Indian efforts at developing the Iranian port of Chabahar represents a long-term investment in bolstering Afghanistan’s commercial links.

India’s state-building efforts have won it widespread goodwill among the Afghan population. But its ongoing political and assistance efforts will remain subject to the security situation and it has ruled out the possibility of military boots on the ground. India therefore finds itself with many carrots and few sticks. But as security deteriorates, politics becomes more unstable, and external actors alter their approaches, some creative ways to secure Indian interests in Afghanistan will have to be contemplated.

January 21, 2019

Australia articulates its Indian Ocean priorities

The following article originally appeared in the Lowy Interpreter on January 21, 2019. 

At the Raisina Dialogue, India’s flagship geopolitical conference held last week in New Delhi, Australia’s high-level presence was noticeable. Foreign Minister Marise Payne led the delegation from Canberra and was accompanied by Chief of Defence Force General Angus Campbell. Campbell’s appearance on a panel with four-star admirals from India, the United States, Japan, and France was certainly a symbolic highlight. But of greater substantive interest was Payne’s articulation of an Indian Ocean approach for Australia.

As usual, China offered the backdrop. In the session that immediately followed Payne’s address, India’s Navy Chief Admiral Sunil Lanba succinctly described China’s naval modernisation and growing presence in the Indian Ocean: "Since 2008, there has been a permanent presence of the Chinese Navy in the Indian Ocean region in the form of an anti-piracy escort force. The 31st anti-piracy escort force is presently in the Gulf of Aden. So at any given time there are 6 to 8 Chinese navy ships in the northern part of the Indian Ocean. Also, two years ago they commissioned their first overseas facility, or base, in Djibouti.

"The stated aim of this deployment is to protect their trade, which is flowing through this area, from piracy. That included deployed submarines for anti-piracy operations, which is the most unlikely platform to be used for this role. There is no doubt they are spending a huge sum of money in developing their military capability. They are modernising their forces, they are modernizing the command structure. And in my opinion, no navy has grown so rapidly in the last 200 years as the Chinese navy. They’ve added 80 new ships in the last five years. So the Chinese navy is a force, and it is a force which is here to stay."

In her remarks, Payne clarified that “none of us want to see confrontation become the dominant shaper of US-China relations,” but argued that “the peaceful and open character of the (Indian) ocean is a vital national interest for Australia.” She reminded her audience that Australia has a long Indian Ocean coastline, boasts a large Exclusive Economic Zone, and bears responsibility for the Ocean’s largest Search and Rescue Zone. She noted that Australia possessed territory closer to New Delhi than to Canberra and had major oil and gas reserves off its north-west shore. “Few Australians would consciously be aware of this,” she said, “but more than half of all of Australia’s exports depart from Indian Ocean ports.” The minister also highlighted steps Australia was undertaking to secure the Indian Ocean. These included Australia’s largest annual naval deployment, Indo-Pacific Endeavour; its bilateral naval exercise with India (AUSINDEX); continuing military rotations in the northwest Indian Ocean and Middle East; cooperation in response to natural disasters; and future military investments in Western Australia.

The mainstay of Payne’s remarks, however, was the articulation of a four-pronged Australian approach to the Indian Ocean. Chief among these was a closer partnership with India. “We welcome India’s leadership in the Indian Ocean,” she said. She argued that the two countries held similar worldviews as “free, open, and independent democracies” that respect international law, support an open and inclusive Indo-Pacific, and believe that “might is not right.” India’s success, she said, is a reminder “of the merits of democracy, of the rule of law, of a strong private sector and an increasingly open market economy.”

A second element involved building stronger regional institutions and norms. This included Australia’s continued support for the Indian Ocean Rim Association (IOR) and its Jakarta Concord of 2017. While name-checking cooperation among the Quad (Australia, India, the United States, and Japan), the minister also echoed Indian Prime Minister Narendra Modi’s call for nations to support ASEAN centrality. The two approaches, she argued, were not contradictory: “Our view is that mini-lateral cooperation in the Indian Ocean region can complement the region’s architecture.”

Third, she argued that India needed to support countries’ resilience to withstand coercion, mirroring similar Australian initiatives to its east. These include a $2 billion Australian Infrastructure Financing Facility and the development of regional peacekeeping and disaster infrastructure in Fiji.

Finally, Payne argued for policies to promote economic growth and market liberalisation. A major focus of these efforts, she said, would be India and South Asia. She reiterated support for the India Economic Strategy commissioned by the Australian government and also announced a new South Asia Regional Infrastructure Connectivity (SARIC) initiative, a $25 million, four-year programme focused on improving transportation and energy infrastructure.

Taken together, Payne made a strong case to both an international and domestic audience for Australia having important equities in the Indian Ocean region. While the totality of Australia’s military and institutional involvement appeared impressive, and the direction clear and concise, expectations could yet increase for Canberra on the economic front. There’s only one hitch: to a considerable degree, the direction and priority of Australia’s Indian Ocean policy will depend on the outcome of this year’s federal election. New Delhi, for one, will hope Payne’s successor can only build further upon her remarks at Raisina.