Striking deals

New Delhi sees intense diplomatic activity in December as leaders of three important countries come visiting in quick succession.

AFTER the high-profile visit of United States President Barack Obama in November, three other important world leaders were in Delhi before the year ended. New Delhi appears to be the favourite destination of Western heads of state as they eagerly seek contracts relating to the arms and nuclear industry. The three-day state visit of Chinese Premier Wen Jiabao in the third week of December was an exception and was undertaken mainly to repair frayed bilateral relations.

The visits of the French and Russian Presidents were business-oriented and aimed at cementing their countries' positions as major suppliers of defence material. Both France and Russia are already committed to constructing nuclear power plants and are angling for more contracts in this lucrative sector. India has plans to expand its atomic power-generation capacity tenfold by 2020. The contracts, estimated to be worth more than $100 billion, are likely to be shared by American, Russian and French companies. With India's defence budget burgeoning, multi-billion contracts are up for grabs. There is keen competition among the major world players. Top on their list is a pending $11-billion tender for 126 war planes.

Sarkozy's visit

In early December, French President Nicolas Sarkozy came with a big business delegation and spent four days in the country, accompanied by his glamorous wife, Carla Bruni. Sarkozy said during his visit that the French company Areva was becoming a key partner to the Indian nuclear industry. He signed deals worth more than $20 billion relating to defence, civil aviation and nuclear industries. The most important was the general framework agreement for the construction of two nuclear plants at Jaitapur in Maharashtra.

The French side did not create much of a fuss over the nuclear liability Bill passed by the Indian Parliament. During the Obama visit, the American side had conveyed its displeasure about its provisions. Areva has already signed a preliminary agreement to build the first two of the six nuclear power plants and supply fuel for 25 years. Areva's chief executive, Anne Luvergeon, also emphasised that the civil liability Bill was not a deal-breaker as the Americans tried to portray.

Sarkozy, like the other Western leaders who visited Delhi, was supportive of India's bid for a permanent seat in a restructured United Nations Security Council. He criticised the presence of terror groups in Pakistan, saying: It is unacceptable for the world that terrorist acts should be masterminded and carried out by terrorist groups inside Pakistan. He advised the authorities in Pakistan to step up their efforts and show that they are resolute in combating the criminals.

Wen Jiabao's visit

The Chinese Prime Minister was also accompanied by a 400-strong business delegation. China is India's largest trading partner. Two-way trade between the two countries stood at $60 billion this fiscal year. However, unlike the other important dignitaries, Wen Jiabao conspicuously chose to include Pakistan in his itinerary. The Indian government let it be known that it does not look favourably on the coupling of visits to India and Pakistan by world leaders. Western leaders in recent years have gone out of their way to defer to the sensibilities of India. New Delhi has also articulated its suspicions about the close political and military relationship between Beijing and Islamabad.

China, on its part, is unhappy with the presence of the self-styled Tibetan government in exile in India. Beijing was particularly angry with the Dalai Lama's visit to Tawang, the second holiest place for Tibetan Buddhists. Tawang is situated in Arunachal Pradesh, over which China still makes territorial claims. China has also been wary about the India-U.S. nuclear deal, which has paved the way for closer military cooperation between the two countries and made India a close strategic ally of Washington. China's Ambassador to India, Zhang Yan, said before Wen's visit that Sino-Indian relations are fragile easy to damage and difficult to repair.

Just as the Chinese Premier was leaving for Delhi, another controversy over the border issue cropped up after a report in the Chinese media stated that the disputed Line of Actual Control (LAC) with India was only 2,000 km long. The Indian side insists that the border is more than 3,500 km long. The Indian side has construed that Beijing no longer treats the border with Jammu and Kashmir as belonging to India.

Other Chinese officials had a more positive take on the state of bilateral relations. Before Wen's departure for Delhi, the Chinese Assistant Foreign Minister, Hu Zhengyue, told the media that the leaders of the two countries had agreed that there is enough space in the world for China and India to develop together and enough areas to cooperate with each other. India and China found a common cause in the Copenhagen Climate Change summit last year when industrialised nations tried to force a legally binding treaty on the developing world.

Upon his arrival in Delhi, Wen said that his visit was aimed at promoting friendship and expanding cooperation. In his discussions with Prime Minister Manmohan Singh, issues relating to the disputed border, Kashmir and the growing trade imbalance were discussed. The two Prime Ministers agreed that the world was big enough for both countries to prosper together. Wen, in a speech delivered after the meeting, said that relations between the two countries have transcended beyond their bilateral dimension and have acquired global and strategic significance. He said that when the two countries have a heart to heart conversation the whole world will listen. He emphasised during the trip that the two countries are friends, not rivals and that this must be the firm conviction of every Chinese and Indian. He said the 21st century was the Asian century and was also the century in which the two countries could make great achievements.

Unlike the other visiting leaders, he did not openly endorse India's entry into a reconstituted Security Council. Foreign Secretary Nirupama Rao told the media that China had been saying for some time that it supported the interests of the developing countries in the enlargement of the Security Council. She said that China was very much cognisant of the fact that India was the biggest among the developing countries.

Many factors restrain Beijing from openly endorsing India's candidature as a permanent member of the Security Council. Its close relationship with Islamabad is an obvious reason. The other is the joint diplomatic campaign that India has launched with another aspirant for a permanent seat Japan for the expansion of the Security Council. It is no secret that China is loath to see Japan on the diplomatic high table. Relations between the two countries are at an all-time low at the present juncture.

The prickly issue of stapled visas for Indian visitors hailing from Jammu and Kashmir also figured in the official talks during Wen's visit. New Delhi had conveyed that the issue impinged on India's sovereignty. Indian officials said that Wen had taken the issue seriously and called for an in-depth discussion between the two countries to sort it out amicably. In the joint statement issued after the visit, there were no references to China's sovereignty over Tibet or reaffirmation of India's support for a one-China policy. This is an indication that India is prepared to play the Tibet card more aggressively. In fact, many analysts believe that the root of the current friction between the two countries can be traced to New Delhi's increasingly overt support to the Dalai Lama.

Wen's statements in Pakistan on terrorism and related issues after reaching there from India could not have gone down well in New Delhi. In his address to the country's Parliament, he promised to stand by Pakistan in fighting extremism in the country. He said that Pakistan's fight against extremism should be recognised and respected by the international community. His speech came immediately after U.S. Secretary of Defence Robert Gates said that Pakistan needed to do more to control the flow of extremists. The Indian government has been crying hoarse since the 2008 Mumbai terror attacks that Pakistan has become the epicentre of terrorism.

During Wen's visit to Pakistan, Chinese companies signed investment deals worth $30 billion.

Besides, China donated $229 million for the repair of infrastructure damaged during the devastating monsoon floods of 2010. The all-weather friendship between the two countries seems to be going from strength to strength.

Medvedev's visit

The two-day visit by Russian President Dmitry Medvedev was the last big-ticket diplomatic event of the year in India. It ended with a slew of multi-billion dollar agreements, mainly pertaining to the defence, nuclear, space and hydrocarbon sectors. Both Medvedev and Manmohan Singh emphasised that the two countries shared a special and privileged relationship. Medvedev said that Russia wanted India to be firmly in an expanded Security Council and would also back its full membership in the Nuclear Suppliers Group (NSG) and other multilateral export groupings.

No new deals were signed on the setting up of additional nuclear reactors. Russia is already committed to building four. Evidently, Moscow wants first to ascertain the kind of deal the Indian government is offering to American nuclear firms. The Obama administration is demanding concessions on nuclear liability provisions. Russia, having had a head start over other nuclear suppliers, is confident of getting a large slice of the lucrative contracts to instal nuclear reactors in India. During his March visit to Delhi, Prime Minister Vladimir Putin agreed to supply India with 16 reactors. Russian officials have said that they have no objections to the nuclear liability law but are only looking for some clarifications before firming up contracts for more reactors to be set up in India.

In the field of defence, for the first time both sides will collaborate in the joint development and production of a fifth generation fighter aircraft (FGFA). The two sides signed a preliminary design contract during Medvedev''s visit. If it fructifies, it will be one of the biggest deals in the country's defence sector. It is estimated that India will spend around $35 billion for the induction of 250-300 stealth fighters into its air force by 2020. The two countries hope to market the futuristic plane to friendly third countries.

India and Russia also signed an agreement to share high-precision signals from the Global Navigation Satellite System (GLONASS) for civilian and military use. It will allow the military to pinpoint targets, and will have manifold civilian uses. It is similar to the Global Positioning System used by the U.S. In the hydrocarbon sector, the two countries agreed to undertake joint projects.

Medvedev seemed to be much more in sync with the Indian view on terrorism in the subcontinent than the Western leaders who preceded him. He called for the expeditious punishment of the perpetrators, authors and accomplices of the Mumbai terror attacks. In a joint statement, the two leaders stated that states that aid, abet or shelter terrorists are as guilty of acts of terrorism as their actual perpetrators. The joint statement went on to add that successful stabilisation in Afghanistan would be possible only after the elimination of safe havens and infrastructure for terrorism and violent extremism that are present in Afghanistan and Pakistan. As India transits from non-alignment to so-called multi-alignment, the special relationship with Russia, despite minor hiccups, is going from strength to strength.