GSAT-9 diplomacy: The glue that is binding India's ties with its neighbours

Following the launch of the satellite in May 2017, signals from the various capitals around India are much more cordial, and several cross-border projects could now begin to intensify

Before January ends, Bhutan will get a ground station to communicate with the GSAT-9 satellite sent to space by India back in May 2017. Soon Nepal and Maldives will be assisted by Isro with similar facilities. They will join Sri Lanka and Bangladesh, which have independent capacities to set up ground stations to track the so-called Saarc satellite that can provide all sorts of services to them, ranging from banking to agriculture and education. 

The satellite was up in the skies one and a half years before the neighbours got their ring of stations on the ground. It is an indication how difficult it is to build relations even for a non-political project in the sub continent, where no trans-border project is apolitical. 

“But relations, especially on economic issues seem to be on the mend in early 2019,” says former IFS officer Amar Sinha. The former secretary, economic relations in the external affairs ministry, pointed out to the return to power of the Sheikh Hasina-led Awami League party in Bangladesh in the general elections held on December 30 last year, the end of the abortive coup in Sri Lanka in the same month and establishment of a new government in Maldives earlier in October as the troika of measures that have helped India diplomatically. 

Compared with the situation over the past couple of years, the signals now from the various capitals around India are much more cordial. Several cross-border projects could now begin to intensify, taking advantage of the current environment. While the space diplomacy through GSAT is one of those, of more salience is a dredging project under a ‘Protocol on Inland Water Transit and Trade’ to clean up the rivers for shipping between India and Bangladesh. 

Eighty per cent of the project costing about Rs 35 billion will be financed by India. It would clean a 470-km stretch on two rivers. Typical of such cross-border projects, Bangladesh is keen to take up the downstream Zakiganj-to-Ashuganj stretch of Kushiyara river first, as it lies totally within the country. India wants to focus instead on a trans-border Sirajganj-to-Daikhowa stretch of the Yamuna river. Once both the stretches are cleaned, they can support round-the-year water navigation from Kolkata all the way to Guwahati and Jorhat in Assam through Bangladesh. After sitting on it for a long time, Sheikh Hasina’s government finally cleared the project in November 2018. But possibly to make up for this delay, the new Bangladesh government is expected to ramp up imports of diesel from India by laying a cross-country oil pipeline from Siliguri in the West Bengal to Parbatipur located in Dinajpur district of Bangladesh. 

A more tricky area is the running dispute between the Nepal Rastra Bank (central bank of Nepal) and the Reserve Bank of India, over the opening a window for the citizens of the Himalayan state to exchange their stock of Rs 500 and Rs 1,000 notes, rendered useless after India demonetised them in November 2016. In a sign of thaw, the Nepal Rastra Bank acknowledged last week that it has written to the RBI to allow the use of new Indian currency notes higher than Rs 100 within Nepal. Kathmandu had issued a notification in December 2018 making the use of Indian currency notes of face value of Rs 200, Rs 500 and Rs 2,000 illegal in the country. Since it was issued without any further clarification, the impression gained ground that this was done in pique. 

Nepal had frequently remonstrated with RBI that many of its citizens were caught unaware with the demonetisation decision. While RBI has taken no decision on this request, the letter from Nepal Rastra Bank shows it is willing to accept one part of the bargain, that is, to make the higher value Indian currency notes valid again within its borders, even if the exchange offer does not come through soon. 

For island nation Maldives post elections, India has held out an offer of $1.4 billion financial assistance through a combination of budgetary support, currency swap agreements and concessional lines of credit. All of these would help, since the Free Trade Agreement Maldives had signed in a dramatic midnight session with China is likely to be terminated soon, according to former president Mohamed Nasheed, who is a strong supporter of the new government headed by Ibrahim Mohamed Solih.  

The most ambitious of these is the liberalised guidelines for cross-border electricity trade issued by the Central Electricity Regulatory Commission in December. In a welcome reversal of an inward looking order of 2016, the new one recognises the advantages of letting power generation companies come up in Nepal and Bhutan to feed into the vast Indian market, through spot exchanges. It erases fears inlaid in the earlier guidelines that a liberal regime would play into the strengths of Chinese power companies that can produce cheap power and who would then dominate the Indian market. “India seems to have acknowledged that the sinews of economic interdependency created by such arrangements have the political benefit of positioning India as a stable development partner rather than one inclined to defensive realpolitik”, writes Aditya Valiathan Pillai, senior researcher at the Initiative on Climate, Energy and Environment, Centre for Policy Research in an article in The Hindu.

These successes in the economic sphere stand in contrast with the embarrassment India has faced in trying to stitch together the first-ever military exercise of the regional grouping BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation). Nepal and Thailand did not send their full contingents, forcing India to scale down the level of ambitions at the event held in September, 2018 even though it was an idea mooted by Modi.