What the Taliban's Takeover of Afghanistan Means for India
Plus, a dive into the Indian government's asset monetization program
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What the Taliban's Takeover of Afghanistan Means for India
Since the fall of Kabul to the Taliban on August 15, Afghanistan has been the most significant foreign policy issue in the news, both in the United States and in India. The conversation in the United States has largely been focused on whether President Biden was right or wrong in his decision to withdraw from Afghanistan, or whether the chaotic withdrawal of U.S. forces could have been managed better by the current administration. For India, however, the takeover of the Taliban has puts its investments in Afghanistan over the last 20 years, as well as its security and foreign policy interests in the region, at considerable jeopardy.
The first priority for the Indian government has been to evacuate its citizens from Afghanistan. Like many other countries, it has been running evacuation flights from Kabul, as well as from Dushanbe, Tajikistan. So far, India has evacuated more than 260 Indian citizens from the country. However, India has also offered free visas to all Afghans who are looking to leave Afghanistan, and has brought back at least 290 non-Indians on its evacuation flights, including several Afghan refugees. However, a recent report indicated that there may be around 20 Indian nationals still in Kabul awaiting evacuation, which has become complicated following the Taliban’s establishment of checkpoints on routes to Kabul airport, and the growing security concerns of terrorist attacks, such as the suicide bombing this week by the Islamic State Khorasan Province.
However, beyond the immediate crisis of ensuring the safety of its citizens and evacuating them out of Afghanistan, India faces a number of challenges from the takeover of Afghanistan by the Taliban.
The first is to grapple with the prospect that Afghanistan, under Taliban rule, could yet again become a haven for terrorist organization that may seek to attack India. The Taliban, during its previous tenure in power before 2001, was often directly invovled in attacks against India, such as the hijacking of an Indian Airlines flight in 1991. As part of the negotiation for the hostages of the flight, the Taliban demanded the freedom of, among other terrorist, Masood Azhar, who has since created the terrorist organization Jaish-e-Mohammed (JeM), which has undertaken several attacks in India. While the Taliban has made assurances that it seeks to be a responsible actor and even ensure friendly ties with India, its history and long-standing relationship to these organizations mean India will have to remain vigilant.
However, the cost of remaining vigilant means that India may have to invest more in intelligence, reconaissance, and even counter-insurgency operations in order to prevent terrorist activity from Afghanistan via Pakistan in Jammu and Kashmir or in other parts of India. Doing so will mean rebalancing resources within its armed forces at a time when India faces the need to continue to maintain troops in Eastern Ladakh after Chinese attempts to make ingresses into Indian territory beginning in April 2020. Balancing its limited resources across these two competing threats will be a challenge.
However, while India continues to balance the need to deter China in Ladakh with the need to deter terrorist activity in Jammu and Kashmir, China has shown an apparent willingness to engage with the Taliban, such as hosting a Taliban delegation at a meeting with Chinese Foreign Minister Wang Yi, as well as making plans to expand infrastructure projects under its Belt and Road Initiative into Afghanistan.
Over the last 20 years, India has invested more than $3 billion in development assistance towards Afghanistan, and publicly supported the democratically elected but now-non-existent government of Afghanistan. The takeover of Taliban means that not only are these investments - from roads to bridges to dams to schools to buildings - likely in jeopardy, but that India will now see its chief rivals, China and Pakistan, expanding their diplomatic, military, and economic footprint in Afghanistan at the same time as India loses its own footprint in the country.
India now faces a bad hand vis-à-vis Afghanistan. But how it plays its remaining cards - its longstanding goodwill with the Afghan people, the possibility of engagement with the Taliban to secure some of its interest while the Taliban emphasize oa more moderate face to the world, or its ability to play a role in the United Nations Security Council on potentially preserving the sanctions regime against the Taliban - remains to be seen.
Further Reading:
Dhruva Jaishankar, Executive Director of the Observer Research Foundation America (ORF America): A tale of four presidents, Afghanistan, and India
Dr. Sumit Ganguly, distinguished professor of political science and the Rabindranath Tagore chair in Indian cultures and civilizations at Indiana University, Bloomington: What the Taliban Takeover Means for India
Dr. Aparna Pande, fellow and director of the Initiative on the Future of India and South Asia at the Washington-based Hudson Institute: India in the eye of the Taliban
Indrani Bagchi, Diplomatic Editor at The Times of India: What the Taliban takeover means for India
Dr. C. Raja Mohan, Director of the Institute of South Asian Studies at National University of Singapore: It is Pakistan’s moment of triumph in Afghanistan, but India must bet on patience
Lauren Frayer, International Correspondent covering India for NPR News: With The U.S. Exit From Afghanistan, India Fears An Increasingly Hostile Region
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Breaking Down India’s New Asset Monetization Program
On August 23, Finance Minister Nirmala Sitharaman announced an ambitious plan to monetize $81 billion (Rs. 6 trillion) worth of assets through a “National Monetisation Pipeline” over the next four years. So what is the National Monetization Pipeline? How will it work? And will it be a positive for India’s economy?
The National Monetization Pipeline (NMP) has been released as a two-volume report which has been prepared by the finance ministry, the various ministries that oversee types of infrastructure in India, and NITI Aayog, the government-run think tank. Here is the link to both reports (Volume I is a guidebook, while Volume II outlines the specific pipeline for India). Currently, the program only focuses on infrastructure projects, and has outlined specific targets it would like to achieve from specific types of infrasctrure sectors. Per Reuters, the government wishes to earn:
$21.83 billion (Rs. 1.6 trillion) from the roads sector
$20.75 billion (Rs. 1.52 trillion) from its railways assets
$6.17 billion (Rs. 452 billion) from power tranmission lines
$5.44 billion (Rs. 398.32 billion) from natural gas assets
$4.79 billion (Rs. 351 billion) from telecommunications projects
So how will this monetization work? The current structure is that the government would lease existing infrasture assets to private firms for a fixed term, wherein the government and the private sector entity would share the revenues from the asset. For example, a private company may take over the management of a tolled road, and split the profits with the government for a specific time period (such as 30 years). Throughout this period, the Indian government would retain ownership of the asset.
The government has argued that this program would have tremedous benefits. Firstly, state-owned assets that are laying idle or are in dire need of repairs could be leased out to private companies to make them useful and productive again. Secondly, private management of assets might be more efficient and productive, thereby increasing the amount of revenue earned from the asset. Finally, it would help boost not only economic productivty, but also government revenues, which have been languishing due to the COVID-19 pandemic.
However, India’s opposition parties have opposed such a monetization project. Leaders from the Indian National Congress, such as former party President Rahul Gandhi and former Finance Minister P. Chidambaram, argued that the move would only benefit certain private players, thereby creating a monopoly within key infrastructure sectors. Gandhi alleged that the moves were aimed at benefitting “few industrialist friends of the Modi government,” and that the move amounted to “selling India’s crown jewels.”
So will monetization actually benefit India? The answer, like with most issues of policy, lies in the details. It’s not necessarily correct to say that monetization is the “sale” or the “privatization” of assets, since it is a lease under a public-private partnership model. However, the fear of “capture” of many of these investment by just a handful of players in a legitimate concern, and one that this government has done little to allay.
India Administers 10 Million Doses in a Single Day
On August 28, India administered a landmark 10 million doses in a single day.
This week, India also announced that ~50% of its adult population had now recieved at least one dose of the COVID-19 vaccine.
However, the major challenge for India remains in the low number of fully vaccinated people:
Of the total adult population, only around 15% have been fully vaccinated
Of the total population (including children), only around 10% have been fully vaccinated
As medical research has shown, immunity to the the COVID-19 virus, and especially the Delta variant of the virus, requires individuals to recieve both doses of the vaccine. One dose does not provide adequate protection from the virus.
News Roundup
As India responded to the evolving situation in Afghanistan, Prime Minister Modi spoke about the security situation in Afghanistan with his counterparts from three different countries last week:
The Indian Navy participated in the 2021 Edition of Exercise Malabar alongside the navies of all four “Quad” countries: the U.S. Navy, the Japanese Maritime Self Defense Force, and the Royal Australian Navy. The exercise, which took place from August 26-29 in the Western Pacific Ocean, focuesd on anti-surface, anti-air, and anti-submarine warfare drills, as well as other maneuvers and tactical exercises, and was hosted by the U.S. Navy.
Finance Minister Nirmala Sitharaman, along with Reserve Bank Governor Shaktikanta Das, chaired the second meeting of the BRICS (Brazil, Russia, India, China, and South Africa) Finance Ministers and Central Bank Governor’s meeting. The meeting comes ahead of the 2021 BRICS Leaders’ Summit, which India is scheduled to host this year. Minister Sitharaman spoke about the post-COVID recovery in the BRICS countries, while Governor Das focused on financial inclusion and monetary policy.
The Ministry of Defense signed a contract with Mahidnra Defense System Ltd for 14 Integrated Anti-Submarine Warfare Suites, under INdia’s “Buy and Make (Indian)” scheme of defense procurement. The contract totaled $183.6 million (Rs. 1,350 crore).
The Minstry of Civil Aviation released “The Drone Rules, 2021” on August 25, creating new regulations for the use of drones in India. The new rules are aimed at simplfying the process of obtaining approvals for drone operation by reducing fees and streamlining processes, as well as reducing the number of geographical restrictions on drone activity. The complete draft of the regulations are available here.
The Chairman of the United States Indo-Pacific Command, Admiral John C. Aquilino, visited New Delhi on August 24-26. During his visit, Admiral Aquilino met with India’s Chief of Defense Staff, Gen. Bipin Rawat, the chiefs of all three services of the Indian Armed Forces, as well as with the Defense Secretary.
India’s Minister for Power and for New and Renewable Energy, R.K. Singh, spoke on the pohne with the U.S. Special Presidential Envoy for Climate, John Kerry, on August 27. The conversation was focused on India’s plans to mandate the use of “Green Hydrogen” for fertilizer and refining purposes, as well as its plans to invite bids for 4,000 MW of battery storage.
The Indian Navy carried out a “Maritime Partnership Exercise” with the Philippine Navy on August 23 in teh West Philippine Sea. The exercise came as two Indian ships - the INS Ranvijay (a Guided Missile Destroyer) and the INS Kora (a Guided Missile Corvette) - are deployed in the Western Pacific.
Five to Read
Roshan Kishore, Data and Political Economy Editor at Hindustan Times: Three important medium-term questions about the economy - Hindustan Times
Debanji Ghosh, President of the National Association of Software and Services Companies (NASSCOM): The digital future of our country is distinctly being re-imagined - Livemint
Tajah McCray, Research Intern at the Center for Strategic and International Studies - Strengthening India’s Cyber Infrastructure - Center for Strategic and International Studies
Pranav Dixit, tech reporter for BuzzFeed News: Big Tech Thought It Had A Billion Users In The Bag. Now It Might Be Forced To Make Hard Choices To Get Them. - BuzzFeed
Tanu Kumar, postdoctoral fellow at the College of William and Mary - Housing is a welfare weapon. It can help people escape poverty - Hindustan Times
Thanks for reading this latest edition of Indialogue. Please let me know if you have any thoughts or feedback by emailing me at aman@amanthakker.com.