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India faces important economic and strategic choices over the next decade, especially in terms of its diplomatic relations and defence industry. While there are limited signs that India has made positive steps to improve regional relations, urgent reform is needed at the national level to ensure its security.
By Oliver Housden for RUSI.org
The 2008 Mumbai terrorist attacks have forced the Indian government to urgently re-evaluate its national security policy. While the challenges posed by regional rivals such as China and Pakistan remain high on New Delhi's list of priorities, the threat posed by non-state actors and domestic terrorist activity has begun to increase.
Consequently, the architecture of defence spending and investment is changing to meet this new threat. This follows wider reforms in all aspects of the economy taken over the last decade, which have invigorated bilateral trade routes with major international powers such as the United States and Russia. The question is whether the changes implemented by the Indian government since the Mumbai attacks are sufficient to effectively deal with the range of domestic, regional and international threats - and responsibilities - that the world's largest democracy currently faces.
Domestic Terror Threat
While India has faced a number of internal security challenges from illegal armed groups and political movements since securing Independence in 1947, the threat of domestic terrorism is becoming more acute.
According to the South Asia Terrorism Portal, 765 people were killed in terrorist attacks committed by the Communist Party of India (Maoist) during the first three quarters of 2009. In particular, the number of Maoist-related security incidents has spiked in recent months, including several high-profile attacks on railway tracks, as well as one attack on a Bihari village on the 2 October which resulted in sixteen deaths. In response the government has launched a large-scale offensive in western provinces, granting the Indian Air Force greater autonomy to strike "Maoist-affected areas". It has also launched a $1.65bn development package to rebuild local infrastructure in Maoist strongholds such as West Bengal and Orissa.
The threat posed by Islamic extremism is equally pernicious. Pakistan's Inter-Services Intelligence (ISI) agency is frequently accused of spreading Islamic fundamentalism in the Indian mainland. For example, the Director-General of Police in Punjab accused ISI of sponsoring Islamic extremist groups in the region in October, much to the embarrassment of Islamabad.
New Delhi remains concerned about the porous nature of the Nepali and Bangladeshi borders and their use by extremist groups. For example, the government has become increasingly concerned by extremist activity instigated by ISI the in s madrassahs across the southern Tarai plains of Nepal. Furthermore, despite the election of a civilian government in Bangladesh in 2008, the United Liberation Front of Assam (ULFA) and insurgents operating in Magaland have crossed the border to take refuge there.
However, Pakistani state patronage and poor governance along the northern border have facilitated rather than caused the increasing threat of Islamic terrorism. India has the second largest Muslim population in the world, which in certain pockets of the country is vulnerable to Islamic extremist preaching.
Once radicalised, some Indian groups have adopted the Al-Qa'ida 'franchise' to promulgate their fundamentalist philosophy, rather than having direct regular contact with extremist leaderships in Pakistan. This has led to the inflated notion among Indian security policy-makers that Osama bin Laden's network is prevalent throughout India. Nevertheless, the well-coordinated Delhi bombing campaign on 13 September 2008 revealed the capacity of domestic Islamic groups to execute sophisticated terror attacks.
India's most problematic relationship is with China, and concerns a number of long-standing border disputes in the north-eastern state of Arunchal Pradesh and the north-western frontier near Ladakh. These disputes have lasted for decades but resurfaced over the last six months in light of numerous alleged Chinese helicopter incursions into Indian territory. This prompted India to bolster its defence capabilities along the entire border. The Nyoma airstrip near Ladakh, completed in early October 2009, is the third advanced landing area to be built in the North West following the revival of two more in Daulat Beg Oldi and Fukche.
Tensions have also mounted in Arunchal Pradesh. The Chinese have made persistent attempts to block a $2.9bn loan from the Asian Development Bank to India because $60m was allocated to flood-control projects in the disputed region. In an act of defiance by New Delhi, Manmohan Singh visited the Tawang area on 7 October, much to the anger of Chinese officials. Although China is unlikely to try to annex Arunchal Pradesh through force, military skirmishes with the Indian Armed Forces are highly plausible unless the two sides urgently restore peaceful dialogue.
Indo-Pakistan relations have been relatively quiet in recent months. However, the enduring conflict in Kashmir and the growing threat of Islamic extremism remain sources of antagonism which have the capacity to produce frequent diplomatic and military spats.
The Border Security Force in Indian-controlled Kashmir twice came under attack from the opposing side of the international border during the last two weeks of September 2009, prompting suggestions from Indian Intelligence that Pakistan is pushing militants into Jammu and Kashmir. India has also continued to apply pressure on Islamabad to bring the perpetrators of the Mumbai attacks to justice and has pushed for an open trial of Ujjwal Nikam, who was allegedly involved in '26/11'.
However, Islamabad is unlikely to release dossiers on the Mumbai attacks, especially when it is preoccupied with an urgent domestic threat after the terrorist atrocities in Peshawar and Rawalpindi in early October. As Indo-Pakistan relations remain caught in an uneasy stand-off, a quick resumption of the Composite Dialogue is doubtful.
The United States and India
The Indo-US relationship developed rapidly during the Bush Administration, capped by a nuclear deal in June 2008 which provided India with civil nuclear technology, reactors and fuel. The deal gives the US exclusive access to Indian civil nuclear energy trade and significant leverage over Indian foreign policy. This has proven especially important for blocking Indian trade routes with states ambivalent or hostile to the US, such as Iran, and also for influencing India's role in Afghanistan.
The McChrystal Report, while lauding Indian development activities, warned that greater Indian involvement in Afghanistan could jeopardise its key relationship with Pakistan in rooting out the Taliban and Al-Qa'ida. However, the US will have to offer India more than access to nuclear civil and military technology if it is prevent New Delhi from trading with Iran and checking involvement in Afghanistan.
A three-week joint army exercise in Uttar Pradesh, which has focused on counter-insurgency and counter-terrorism operations in semi-urban environments, is the largest exercise of its kind between the US and India and signals the additional support Washington will need in order to sustain its leverage over New Delhi.
Changing Times in the Defence Industry
The Indian defence and aerospace landscape is changing rapidly. For the fiscal year 2009-2010, the government has pledged to increase defence spending by 34 per cent. An augmented military budget and weak global financial climate has made India a highly lucrative market for foreign investment.
The United Kingdom, for example, has expressed its desire to create new trade links with India's aerospace industry. On the 21 September 2009, UK Trade, Investment and Business Minister Lord Mervyn Davies undertook a four-day visit to India to investigate new trade possibilities. UK Defence Secretary Bob Ainsworth is also due to visit India next year. Such deals will facilitate the expansion of Indian defence systems by $40bn over the next fifteen years.
Renewed economic ties between India and Russia are a further indication of growing bilateral trade deals in the defence market. A trade forum held on 29 September 2009 brought together finance ministers, business leaders and security analysts from India and Russia, stating their ambition to boost bilateral trade to $15bn over the next three years. By 2015, the two sides also pledged to develop a new hypersonic cruise missile BrahMos with a range of 290km. Problems with this relationship could surface over the coming weeks, primarily because of a brewing row over the quality of technology used in another joint project to produce a medium-haul military transport aircraft. Nevertheless, such Indo-Russian projects follow an increasing trend of joint ventures in all aspects of the Indian economy.
In addition to financial stimulus, the locus of defence investment has shifted in accordance with the changing security threat. Given that the Mumbai attackers entered the city via the sea, the Indian Defence Ministry announced significant changes to sea-border security in March 2009. This includes assigning the Navy as the chief coordinator of coastline operations. Moreover, on 26 July 2009 India launched its first domestically built nuclear-powered submarine 'Arihant' to patrol its shores to counter the threat of non-state terrorist activity and the rising naval capacities of the Chinese armed forces.
Implications for the Future
India has made significant strides in its security and defence industry and has bolstered its regional presence. Through opening its markets and encouraging foreign investment it has created a successful model that has triggered the growth of indigenously built aerospace technology.
Analysts predict that economic growth will jump to 7.5 per cent in the fiscal year 2010-11 as India continues to diversify its trade basket. In spite of its notable progress, however, the sophistication of India's arsenal lags behind regional rivals and other leading international powers. India lacks the number of production facilities and sufficient trained labour found in other countries as economic reforms have been relatively recent. Furthermore, the rapid liberalisation of the Indian market means its defence industry faces stiff competition from domestic and foreign firms in rival industries in order to attract top Indian talent. It will take time for India to consistently secure the biggest global defence contracts.
India faces important economic and strategic choices over the next decade, especially in terms of its political relationships and defence industry. However, while it has implemented progressive economic reform, there are few signs that India has strengthened the bilateral relations with regional allies that are needed to improve border security and counter the threat of domestic terrorism.
The Indian Intelligence services, bereft of information networks and strategic vision, are particularly fallible in this respect, remaining reactive rather than proactive in their policing. Counter-insurgency and counter-terrorist strategies lack the required technical expertise to respond to broad range of threats which face India today. Although development packages in the west were welcome, greater efforts must be focused on political and economic engagement with affected provinces.
Without reforming this aspect of national security policy, dislocated regions of the country will remain vulnerable to terrorist networks and the threat of extremism will continue to grow.
The views expressed above are the author's own, and do not necessarily reflect those of RUSI.