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23.5.21 English Editorials with thanks to original sources

After over a year, the stand-off between Indian and Chinese troops in eastern Ladakh shows no signs of resolution. Disengagement has stalled, China continues to reinforce its troops, and talks have been fruitless.

More broadly, the India-China bilateral relationship has ruptured. Political relations are marked by hostility and distrust. Reversing a long-held policy, New Delhi will no longer overlook the problematic border dispute for the sake of a potentially lucrative wider relationship; now, as India’s External Affairs Minister S. Jaishankar has made clear, the relationship is conditional on quietude on the border.

Even if — a big if — disengagement continues, the relationship will remain vulnerable to destabilising disruptions. On the Line of Actual Control (LAC) and beyond, India’s military and political leaders will need to learn the right lessons from Ladakh, to ensure they are better postured to meet the challenge of Chinese coercion.

Study and findings

In a recent study published by the Lowy Institute — The crisis after the crisis: how Ladakh will shape India’s competition with China — this writer has argued that the Ladakh crisis offers New Delhi three key lessons in managing the intensifying strategic competition with China.

Revamping strategies

First, military strategies based on denial are more useful than strategies based on punishment. The Indian military’s standing doctrine calls for deterring adversaries with the threat of massive punitive retaliation for any aggression, capturing enemy territory as bargaining leverage in post-war talks. But this did not deter China from launching unprecedented incursions in May 2020, and the threat lost credibility when retaliation never materialised.

In contrast, the Indian military’s high-water mark in the crisis was an act of denial — its occupation of the heights on the Kailash Range on its side of the LAC in late August. This action served to deny that key terrain to the Chinese People’s Liberation Army (PLA), and gave the Indian Army a stronger defensive position from which it could credibly defend a larger segment of its front line.

A doctrinal focus on denial will give the Indian military greater capacity to thwart future land grabs across the LAC. By bolstering India’s defensive position, rather than launching an escalatory response, such a strategy is also more likely than punishment to preserve crisis stability. Over time, improved denial capabilities may allow India to reduce the resource drain of the increased militarisation of the LAC.

Political costs

The second key lesson of Ladakh is that China is more likely to be deterred or coerced with the threat of political costs, rather than material costs. Admittedly, the Chinese military’s deployment to the LAC was also large and extremely expensive. But China’s defence budget is three to four times larger than India’s, and its Western Theatre Command boasts over 200,000 soldiers. The material burden of the crisis would not disrupt its existing priorities.

In contrast, India successfully raised the risks of the crisis for China through its threat of a political rupture, not military punishment. A permanently hostile India or an accidental escalation to conflict were risks that China, having achieved its tactical goals in the crisis, assessed were an unnecessary additional burden while it was contending with the instability of its territorial disputes and pandemic response.

The corollary lesson is that individual powers, even large powers such as India, will probably struggle to shift Beijing’s calculus alone. To the extent that China adjusted its position in the Ladakh crisis, it did so because it was responding to the cumulative effect of multiple pressure points — most of which were out of India’s control. Against the rising behemoth, only coordinated or collective action is likely to be effective.

Indian Ocean Region is key

The third lesson of Ladakh — and possibly the hardest to address — is that India should consider accepting more risk on the LAC in exchange for long-term leverage and influence in the Indian Ocean Region. From the perspective of long-term strategic competition, the future of the Indian Ocean Region is more consequential and more uncertain than the Himalayan frontier.

At the land border, the difficult terrain and more even balance of military force means that each side could only eke out minor, strategically modest gains at best. In contrast, India has traditionally been the dominant power in the Indian Ocean Region and stands to cede significant political influence and security if it fails to answer the dizzyingly rapid expansion of Chinese military power.

The Ladakh crisis, by prompting an increased militarisation of the LAC, may prompt India to defer long-overdue military modernisation and maritime expansion into the Indian Ocean. To keep its eyes on the prize, New Delhi will have to make tough-minded strategic trade-offs, deliberately prioritising military modernisation and joint force projection over the ground-centric combat arms formations required to defend territory.

This will be a politically formidable task — blood has now been spilled on the LAC, and for domestic political reasons, India cannot be seen to be passive on the border. Rebalancing India’s strategic priorities will require the central government, through the Chief of Defence Staff, to issue firm strategic guidance to the military services. This response will be a test not only of the government’s strategic sense and far-sightedness, but also of the ability of the national security apparatus to overcome entrenched bureaucratic and organisational-cultural biases.

As these three lessons show, the future of the strategic competition is not yet written. Thus far, India has suffered unequal strategic costs from the Ladakh crisis. Chinese troops continue to camp on previously Indian-controlled land, and worse, India may jeopardise its long-term leverage in the more consequential Indian Ocean Region. But if India’s leaders honestly and critically evaluate the crisis, it may yet help to actually brace India’s long-term position against China.


1.Stand-Off (N)-a situation in which agreement in an argument does not seem possible. गतिरोध

2.Fruitless (Adj)-failing to achieve the desired results. निरर्थक

3.Ruptured (V)-to cause a breach in relations or friendship. संबंध विच्छेद

4.Lucrative (Adj)-producing a great deal of profit. लाभप्रद

5.Quietude (N)-a state of stillness, calmness, and quiet in a person or place. शांति

6.Coercion (N)-the practice of persuading someone to do something by using force or threats. दबाव

7.Deterring (V)-to discourage or prevent someone from doing something by instilling fear or doubt in them. भय दिखाकर रोकना

8.Incursions (N)-an invasion or attack, especially a sudden or brief one. घुसपैठ

9.High-Water Mark (N)-the most successful point of something.

10.Trade-Offs (N)- an agreement to do something if someone else does something.


🛑India challenges $1.2 bn Cairn award, says never agreed on tax arbitration

Press Trust of India | 23/05/2021 | 2 hours ago

India has challenged an international arbitration tribunal asking it to return $ 1.2 billion to UK's Cairn Energy Plc on grounds that it had never agreed to arbitrate over a "national tax dispute", the finance ministry said on Sunday.

While the government appointed a judge on the three-member arbitration panel and fully participated in the proceedings against India seeking Rs 10,247 crore in back taxes from Cairn, the ministry said the tribunal "improperly exercised jurisdiction over a national tax dispute that the Republic of India never offered and/or agreed to arbitrate." India had seized and sold shares of Cairn in its erstwhile India unit, confiscated dividend due and withheld tax refunds to recover the tax demand it had levied two years after passing a law in 2012 that gave it powers to levy tax retrospectively.

Cairn invoked arbitration under the India-UK bilateral investment treaty.

In December last year, Cairn won an award that held the levy of taxes using the 2012 law unfair on the company and the tribunal asked the Indian government to return $ 1.2 billion plus cost and interest.

In a statement, the finance ministry called the 2006 reorganisation of Cairn's India business for listing on the local bourses as "abusive tax avoidance scheme that were a gross violation of Indian tax laws, thereby depriving Cairn's alleged investments of any protection under the India-UK bilateral investment treaty." "The award improperly ratifies Cairn's scheme to achieve double non-taxation, which was designed to avoid paying taxes anywhere in the world, a significant public policy concern for governments worldwide," it said, adding the government on March 22 challenged the arbitration award in a court in The Hague -- the seat of the arbitration.

It is not clear if a court in The Hague can go into merits of levy of taxation by the Indian government over a corporate amalgamation scheme.

Precedence dictates that challenges to international arbitration award are restricted to tribunal not following due process.

The tribunal that went into Cairn's challenge consisted of three judges -- one judge each being named by the company and the Indian government and a third neutral presiding officer.

The three-member panel unanimously overturned the tax and asked India to return the value of shares sold, dividend seized and tax refund withheld. This together with interest and cost comes to $1.72 billion.

With India refusing to pay, Cairn registered the award in nine jurisdictions including the US, the UK, Canada and Singapore and has started a process to recover the money from government-owned entities.

Earlier this month, it filed a plea in a court in New York for declaring Air India as India's alter ego so it can be forced to pay the award.

"The Government of India is vigorously defending its case in this legal dispute. It is a fact that the Government has filed an application on March 22, 2021 to set aside the highly flawed December 2020 international arbitral award in The Hague Court of Appeal," the Department of Revenue in the Ministry of Finance said in the statement.

India's appeal before The Hague Court also says that the claims underlying the award are based on an abusive tax avoidance scheme that was a gross violation of Indian tax laws, thereby depriving Cairn's alleged investments of any protection under the India-UK bilateral investment treaty.

It further said the proceeding before The Hague court is pending and the government is committed to pursuing all legal avenues to defend its case in this dispute.

It added that Cairn's CEO and its representatives have approached the government for discussions to resolve the matter.

"Constructive discussions have been held and the Government remains open for an amicable solution to the dispute within the country's legal framework," the statement added.

If the New York court were to recognise Air India as the alter ego of the Indian government, Cairn can seek attachment or seizure of its assets in the US such as airplanes, immovable assets and bank accounts to recover the amount it was awarded by the arbitration tribunal.

Even if Cairn succeeds in getting Air India recognised as the alter ego of the government, it would not mean that the airline's assets will fall into the hands of the British firm, sources said.

All it means is that Cairn can seek seizure of any asset Air India may have in the US. There may not be many such assets.

The only threat there could be is that when an Air India airplane lands at any US airport, Cairn would be able to move court and get that attached before it flies out.

🛑Depression in Bay of Bengal to develop into cyclonic storm by May 24: IMD

Press Trust of India | 23/05/2021 | 2 hours ago

A low-pressure area in the Bay of Bengal has intensified into a depression that will cross the West Bengal and Odisha coasts on May 26 as a "very severe cyclonic storm", the India Meteorological Department (IMD) said on Sunday.

The depression is expected to intensify into a cyclonic storm, "Yaas", by Monday, it added.

"It (the depression) is very likely to move north-northwestwards and intensify into a cyclonic storm by 24th May morning and further into a very severe cyclonic storm during the subsequent 24 hours. It would continue to move north-northwestwards, intensify further and reach Northwest Bay of Bengal near West Bengal and north Odisha coasts by 26th May morning," the Cyclone Warning Division of the IMD said.

"It is very likely to cross north Odisha-West Bengal between the Paradip and Sagar islands by evening of 26th May as a very severe cyclonic storm," it added.

The state governments as well as the Centre are preparing for the cyclone that will bring winds with a speed ranging 155-165 kmph and gusting to 185 kmph.

Prime Minister Narendra Modi on Sunday called for a timely evacuation of those involved in offshore activities as he chaired a high-level meeting to review the preparedness of the state and central agencies to deal with the situation arising out of Cyclone Yaas.

He asked officials to work in close coordination with the states to ensure safe evacuation of people from the high-risk areas and stressed the need to ensure that the time duration of outages of the power supply and communication network is minimum and these links are restored swiftly, a statement issued by the Prime Minister's Office (PMO) said.

Modi also asked the officials to ensure proper coordination and planning with the states to ensure that no disruption is caused to the treatment of COVID-19 patients in hospitals and vaccination against the viral disease.

He called for involving various stakeholders such as the coastal communities and industries by directly reaching out to them, the PMO said.

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