Archive for January, 2013

Will We Have to Sell Arunachal to China?

Thursday, January 24th, 2013

Will We Have to Sell Arunachal to China?


Col (Retd) Bhaskar Sarkar

As per data released by Government of India, India’s trade deficit touched a record high at $184.9 billion for 2011-12 as against $ 118 billion in 2010-2011. This trade deficit is about 10.5 percent of the GDP and is not sustainable. Oil imports rose 47 per cent to $155.63 billion during 2011-12 over the previous year’s $105.9 billion. The non-oil imports grew 26 per cent to $333 billion against $263.8 billion in the previous year. As per Forbes, increasing trade deficit will result in the current account deficit of India rising to $60 billion in fiscal year 2012-13. That will further weaken the rupee.

Trade Deficit with China

While the trade and current account deficits are alarming, India’s trade deficit with China is going to be disastrous. India and China officially resumed trade in 1978. In 1984, the two sides signed a Most Favoured Nation (MFN) Agreement. India-China bilateral trade was just US$ 2.92 billion in 2000. It reached US$ 51.8 billion in 2008, making China India’s largest trading partner in goods. In 2011, bilateral trade stood at US$ 73.9 billion. Unfortunately, the trade deficit with China for year 2011 was US$ 27.08 billion (about 25 percent of India’s total trade deficit of $118 billion). The deficit has been rising rapidly. India’s trade deficit with China has always been negative. It was 15.87 in 2009, 20.02 in 2010.

In 2011 India’s exports to China consisted of Iron Ores, Slag etc ($10.45 billion) cotton & yarn, fabric etc ($3.19 billion), copper and items ($2.16 billion), precious stones etc ($1.19 billion), organic chemicals ($0.99 billion), plastics ($0.69 billion), salt, sulfur, earth & stone ($0.51 billion), machinery, reactors, boilers etc ($0.43 billion), electric machinery TV etc ($0.43 billion), animal or vegetable fats etc ($0.32 billion), iron and steel ($0.32 billion), raw hides and skins etc($0.3 billion), Animal feed etc ($0.27 billion), artificial flowers etc ($0.22 billion) and fish/prawns etc($1.50 billion).

China’s exports to India during 2011 included nuclear reactors, boilers, machinery, etc ($12.34 billion), electric machinery, sound Equip, etc. ($10.75 billion),  organic chemicals ($4.62 billion), fertilizers ($3.54 billion), articles of iron or steel ($2.15 billion), iron and steel ($1.87 billion), plastic articles ($1.11 billion), medical and surgical instruments etc ($1.0 billion), vehicles and parts ($0.99 billion), textile fabrics and arts ($0.85 billion), oil bitumen or mineral wax ($0.66 billion), furniture, bedding, lamps etc ($0.61 billion), inorganic chemicals and rare earth metals ($0.59 billion), manmade yarns and woven fabrics ($0.5 billion) and ceramic products ($0.5 billion). Whereas some of the imports like machinery and rare earths are beneficial to Indian industry, a variety of consumer goods including electrical items used during Diwali festivals, furniture, cheap shoes, locks, tools, toys and even kites and other items are destroying domestic industries.

Indian Companies in China

With the growth in bilateral trade between India and China in the last few years, many Indian companies have started setting up Chinese operations to service both their Indian and MNC clientele in China. Indian enterprises operating in China are into manufacturing (pharmaceuticals, refractories, laminated tubes, auto-components, wind energy etc.), IT and IT-enabled services (including IT education, software solutions, and specific software products), trading, banking and allied activities.

Chinese Companies in India

According to information available with the Embassy of India, close to 100 Chinese companies have established offices/operations in India. Many large Chinese state-owned companies in the field of machinery and infrastructure construction have won projects in India and have opened project offices in India. A large number of Chinese companies are involved in projects in the Power Sector. These companies will also be repatriating their profits in dollars and adding. The situation will become even worse with introduction of FDI in retail.


China is the world’s hub of low-cost manufacturing. Its exports to India far exceed imports from this country. Chinese electric and electronic items are the most popular items in India though their quality cannot be guaranteed. Chinese exports have now penetrated to sectors as unconventional as Diwali decorations including icons of Hindu deities Lakshmi and Ganesh.

With the FDI push in multi-brand retail, the trade deficit with China is set to increase. Walmart and other international retail chains source heavily from China. Some Indian companies have also set up manufacturing units in China as joint venture units. Thus more Chinese consumer products are likely to find their way into India. It will also have depressing effect on India’s manufacturing sector which is already in contraction mode.

Our Finance Ministry has finally woken up to the dangers of mounting trade and current account deficits and the declining value of the Rupee. But its knee jerk reaction in increasing import duty on gold will have little effect in reducing both. Indian society cannot live without gold. The measure will only increase smuggling and create new mafias.

Some viable options for India are:

  • Increases duties on all imported consumer items from cosmetics to clothes and accessories to discourage consumption and help Indian industries. Increasing taxes on deodorants like Axe Effects may reduce the instances of rape.
  • Increase gold production at Kolar and other fields and subsidise it if necessary. Expenses will be in Rupees and not in dollars. One can also put a limit on the quantity of gold which temple trusts like Tirupati and Shirdi. Government can buy the gold from the temple trusts and sell it in the open market. That will reduce the requirement of importing gold and reduce the demand for dollars.
  • Violate Western sanctions and increase bilateral trade with Iran. We need Iranian oil and can export everything they need to have balanced trade. We can have Rupee or Dinar trade with Iran if necessary.
  • Stop import of defence equipment and set up a meaningful defence production in partnership with Indian companies like Tatas, Mahindras, Adanis and others.

However, India is a soft state. We are a “Mango People in a Banana Republic.” How can we defy the US and displease China? We will persist with our neo-liberal Western dictated economic policies and continue to import more than we export till we are broke and the Rupee becomes 100 to the US dollar. We will continue to treat foreign exchange management as a Ponzi scheme and pay old investors with dollars received from new investors. Sooner or later all Ponzi schemes will crash. Then we can sell Arunachal and Andaman islands to China and Lakshadweep to Saudi Arabia and replenish our foreign exchange reserves.

Source: and

Will Congress Rule India for Ever?

Monday, January 21st, 2013

Will Congress Rule India for Ever??


Col Bhaskar Sarkar (Retd)


That seems to be a disturbing thought for many. Congress has ruled India for about 60 of the 65 years of its existence. Pandit Nehru set India on the path to industrialization and growth of technical education. But he also presided over a government that institutionalised corruption in all levels of the government, nepotism, crony capitalism, license raj and neglected defence preparedness.

Lal Bhadur Shastri during his brief rule stood up to Pakistani aggression and started the “Green Revolution” and set India on the road to self sufficiency in food. But his untimely death robbed India of a truly honest and capable leader.

Indira Gandhi certainly stands tall amongst all prime ministers as a gutsy nationalist who annexed Sikkim, made India a military power, defeated Pakistan in battle and created Bangladesh. She nationalized banks to stop hoarding and price manipulation by business houses (we are about to allow that again despite cautioning by World Bank), nationalized foreign companies unwilling to established Indian subsidiaries holding 51% stake. Unfortunately, she did not tackle corruption, nepotism, crony capitalism and encouraged psychofancy and dynastic rule. She also amended the constitution to allow defection and brought in “horse trading” to retain political power.

Rajeev Gandi, “Mr. Clean” failed to reign in corruption, nepotism and crony capitalism. He squandered an 84% majority in the Lok Sabha and failed to bring in any reforms.

Narsimha Rao, came to power by buying the support of Mr. Shibu Soren. He started neo-liberal capitalism, devalued the currency and sold India to western investors.

Less said about Manmohan Singh’s tenure the better. The silent aging prime minister sees no evil and hears no evil. His economic and foreign policies are dictated from Washington. He appears to be trying to win a Nobel Peace prize by bending backwards to bullying by Pakistan and China. He presides over a regime raked by scams, criminalization of politics, psychofancy, nepotism, crony capitalism, breakdown of law and order and unprecedented rise in crimes against women. His policy of unrestricted imports from China and the West has created the highest current account deficit the country has ever seen.

And he is set to be replaced by the scion of the Gandhi Family, Rahul Gandhi the “Unknown.”

Where is the alternative?

The only other pan Indian Party which could have provided an alternate government, the BJP, is in total disarray. On one side is the RSS which wants Hindu Raj. Its leader, Mr. Mohan Bhagwat, wants to see India go back to the male dominated middle ages where women worked as unpaid labour and sex slaves in the homes. (RSS could not change their dress which was the dress of British India’s police in 1932 in 80 years. How can RSS connect with young India)He cannot accept women leaders like Sushma Swaraj, Basundhara Raje or Uma Bharti as equals and works actively to sabotage them. He insists on RSS “pracharak” Nitin Gadhkari, under whose leadership BJP has lost every election except Goa, and who thinks it fit to make his driver and astrologer directors in his company (no law against it but would Tatas, Ambani or any other business house in the world do a thing like that except to cheat on taxes or do money laundering) to continue as president. RSS is an organization which has no following outside the states of Karnataka, Gujarat, Madhya Pradesh and Rajasthan and no following among women and the youth who form the majority of the country. On the other side is the Secular BJP with leaders like Atal Behari Vajpayee, L K Advani, Sushma Swaraj, Arun Jaitley, Yashwant Sinha to name a few, educated broadminded leaders of men who are acceptable to all sections of India and most regional parties as partners. This Secular BJP is the only hope of those who want to see the end of Congress Rule. Unless RSS stops interfering with the Secular BJP and gives it all support it can, BJP will win less seats in 2014 Lok Sabha Elections than it did in 2009.

Congress Party is not led by Fools

Mrs. Sonia Gandhi, the Congress President, is a leader of the masses. Many of her initiatives like the “Rights of Tribals to forest land and produce; MNERAGA; environmental protection; food security” are people oriented and laudable. Unfortunately, like her husband, she seems to be unable to stem the march of corruption, crony capitalism, nepotism, psychofancy and neo-liberalism. But she is no fool. She realizes that Congress on its own will not win enough seats to form the government after 2014 elections. So she is looking for allies.


NCP, SP and BSP are already with Congress. There is nothing to prevent BJD, JDU, AIDMK, YSR Congress, TRS, JMM, MNS, TMC, CPI and CPM form joining Congress and gaining a share of the pie. In any case they cannot and will not join RSS dominated Hindutya oriented BJP. Unless BJP can visibly establish that it is secular and not the B team of RSS by fielding Sushma Swaraj for PM and giving seats to Muslim candidates particularly  Shias, Bhoras, and Ahmedia candidates and Christian candidates in the North East and the South like they did in Goa, Congress will continue to rule for ever.

That may not necessarily be a bad thing. What India needs and patriotic Indians want is good governance. We want a government that is responsive to the needs of the ordinary people and not only to the rich and powerful. We want a government that will reign in corruption, criminalization of politics, nepotism, crony capitalism, minority appeasement and neo-liberalism. We want police reforms. We want economic and foreign policy that is in the best interest of the country and ensures that we are not economically colonized.

If Congress can provide such a government, why should it not rule India forever? I am ready to have a 100 years of Congress government than 5 years of Mohan Bhagwat and his RSS, Mylayam Singh or Mayawati.

Agenda of Fundamentalists: Both Hindu and Muslim

Tuesday, January 15th, 2013




Col (Retd) Bhaskar Sarkar

Understanding the Fundamentalists

Most Muslim Fundamentalists are Sunnis. Their ideology does not spring from the Koran but from the Hadith or interpretation of the Koran by Sunni religious teachers and judges. Their present day ideologues are Wahabis of Saudi Arabia and the Deobandis of Uttar Pradesh in India. They include the Taliban, the Salafis of Middle East and the Sunni Religious teachers of India. They want the rule by Shariah or rule by a single Caliph who will wield both religious and governing powers. What that means is no democracy and no rights for women and minorities and a return to medieval ages.

Hindu Fundamentalists are the Khaps or Caste Panchayets of Haryana and Rajasthan, Rashtriya Sayamsevak Sangh (RSS), Vishya Hindu Parishad (VHP), Bajrang Dal and similar fringe outfits and religious leaders like Asharam Bapu. Their ideology does not spring from Bhagwat Gita but Manusmriti. What they want is no rights for women and a return to medieval ages. In the medieval ages a Hindu woman was not supposed to be a person but a thing to be given away to a husband along with a dowry before she reached puberty and had a mind of her own. The woman was to follow the dictates of her father till marriage, the dictates of the husband till he died and the son if she became a widow. She had no right to visit or care for her parents without permission of her in laws. Only her dead body could return to her parental home. Man could have any number of wives. Women’s education was taboo. Women were encouraged to self immolate on the husband’s funeral pyre. A wife was a free domestic servant to cook and clean and a sex slave to be enjoyed or beaten up whenever desired.

Fundamentalists suffered under British rule. Western influence brought rights to Hindu women. Hindu men could not have more than one wife. They cannot divorce their wives without paying maintenance. Hindu women got the right to parental property and education. Sati was banned. Child marriage has been banned. Women are now educated, liberated and work shoulder to shoulder with men in all fields. They have also become financially independent and less dependent on their husbands or families.  Some of them are political leaders. Some head corporate houses. Unfortunately, most Muslim women do not enjoy the rights Hindu women do.

Agenda and Methods of the Fundamentalists

The growth in woman power has spooked both the Hindu and Muslim Fundamentalists around the world. The other word that terrifies them is “love”, particularly between a man and a woman. Love does not recognize caste, creed or religion and threatens the authority of elders to regulate the lives of the younger generation. Hindu and Muslim fundamentalists want to end the women’s liberation.

The methods adopted by the Taliban in Afghanistan and Pakistan to keep women under control are simple and brutal. Stop women from getting educated and going out to work at all cost. Kill women who do not fall in line. Indian Muslim and Hindu Fundamentalists are unable to do so due to the legal system that is prevailing in India. So they want women to be covered from head to toe. They want to prevent men and women from mixing. Muslim Fundamentalists use Fatwas to control women and to prevent them from dressing trendily or using mobile phones. The Hindu Fundamentalists like RSS are more subtle. They run over 30,000 Adarsh Vidya Mandir Schools to encourage medieval values and lifestyle. Girls are not allowed to study in these schools after class 5. RSS affiliates like VHP and Bajrang Dal and religious leaders like Asha Ram Bapu use sermons and try to enforce dress codes.  Khaps use honour killings, social boycotts and sanctioned rapes to discourage love marriages. The RSS prevents women leaders like Sushma Swaraj, Basundhara Raje and Uma Bharti from becoming prime minister or chief minister even at the cost of losing elections.


Fundamentalism, both Hindu and Muslim is on the rise. As the women become more assertive, the efforts of the Fundamentalists to subjugate them will become more widespread and brutal. Oh! The youth of India!  The future of your country and the problem of Fundamentalism is in your hands. May you have the wisdom to do the right things.


Tuesday, January 15th, 2013



Col (Retd) Bhaskar Sarkar

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The outrage over the gruesome border incident is typical of our country, protest, protest and protest. It is just one of the hundreds of ceasefire violations that take place every year and rarely given publicity. No quarter is expected to be given or received during these fire fights. It is only the brutal beheading that has brought the incident centre stage.

Understanding the Incident

Let us try to understand what happened. On a foggy day, an Indian army patrol was ambushed in own territory in Poonch sector of Kashmir. The throats of two soldiers were slit and one of them was beheaded. Pakistan has denied that it had anything to do with the incident. It challenged India to call international observers to investigate the incident and prove that they were involved. Why are they so confident that its army left no evidence of their involvement?  What really happened?

Slitting throat with a commando knife is a standard sentry silencing technique used by commandos during raids in all armies of the world. As the throats of the two soldiers were slit with knives, it is clear that they were surprised from behind and killed by well trained commandos. They had no chance to warn the rest of the patrol. There was no shooting, no tell tale ammunition cases and killers vanished across the LOC under cover of the fog. So there is no evidence that the Pakistani soldiers crossed the border. The slain Indian soldiers may have been resting or walking. It is clear that the Indian patrol was out smarted. Obviously, there was no early warning radar or if there was one, it must have been out of order or not attended. A Pakistani soldier had died in another incident a few days back. Indian commanders were aware that Pakistani Army would seek to retaliate and the troops should have been on high alert. Whether they were alert enough, whether the patrol was adequately trained and led is for the Indian Army to investigate and take appropriate corrective action.

I was asked by a correspondent why was the soldier beheaded. The answer is simple. Why does a jilted lover throw acid on a girl? It is retaliation. It is also a warning to women in general to be intimidated and submissive. It is a warning to the Indian Army. “Do not mess around with us. Here is an example of our fighting abilities.”

I was asked by the same correspondent as to whether the beheading will affect the morale of the army. My view is that such incidents do not demoralize the army. It fills them with anger and motivates them to seek revenge. If the comrades of the soldiers are not angry and wanting to retaliate, they are not fit to fight. They are a disgrace and should be sent home. What really demoralizes our soldiers is the timid response of our government, our leaders and their senior officers who never stand up for them.

Our Response

The Indian response to the incident is pathetic. We are a country of 1.2 billion. We have a 1.2 million army, albeit ill equipped, ill trained and inadequately led (there is a shortfall of over 15,000 junior officers who led from the front in our victories in 1965 and 1971 wars mainly because the Army practices a deliberate policy of keeping junior positions vacant to improve promotion prospects). We are the fifth largest economy in the world. But we shiver in our pants when we think of retaliating against Pakistan or China for ceasefire violations. Pakistan violated cease fire about 75 times in 2012. We responded passively. Pakistan sponsored terrorists attack our parliament. We did not strike back. We cannot even hang the perpetrators of the attack who have been found guilty by our courts. Pakistani sponsored terrorists attack killed hundreds in Mumbai. We responded by protesting and liberalizing trade and visa procedures, by allowing cricket to be played between the two countries, by inviting their politicians and singers to the country. We dare not break off diplomatic relations or recall or High Commissioner. We are worried that Uncle Sam will be displeased.

We keep the armed forces under the bureaucrats thumb, impotent and with no freedom to retaliate. We accept that the Pakistan Army is a non state actor over which Pakistan government has no control and hence do not hold their government to account for their aid to terrorists. Hafeez Saeed roams free making belligerent speeches while we have special investigation teams have rounded up so called Hindu terrorists who try to respond to Pak sponsored terrorism in their amateurish ways.

The fact is that we are a Hindu majority soft state led by a timid prime minister. Guru Govind Singh, who raised the Khalsa Army to fight Muslim oppression, must be pacing up and down in heaven tearing his hair in despair at timidity of one of his esteemed follower. Our economic and foreign policies are not decided in New Delhi but in Washington. We do not even publicly acknowledge border incidents and intrusions by China and Pakistan where we always come second best. The son in law of the Congress Government, Mr. Robert Wadhra rightly called us “Mango people of a Banana Republic”. After all, he has his roots in Pakistan.


The situation was not always so. In 1965, when Pakistan, emboldened with the receipt of latest American military equipment, sent infiltrators to capture Kashmir by proxy, the then prime minister Mr. Lal Bahadur Shastri gave a free hand to the Indian Army equipped with Second World War tanks and guns to attack bases in POK from where  the infiltrators came. When Chinese forces fired at and killed Indian soldiers at Nathula, Sikkim, in September 1967, Indira Gandhi ordered full scale retaliation which led to a five day border war in which 62 Indian soldiers were killed. The casualties on the Chinese side are not known but must have been sufficient to deter further misadventures in the sector. In 1971, under Indira Gandhi, India decimated the Pakistani Army in East Pakistan and created Bangladesh in spite of opposition from the US. When the American President Richard Nixon sent the 7th Fleet to assist East Pakistan, Indira Gandhi told the Army to capture Dhaka before the fleet could arrive and they did. Rajeev Gandhi sent Indian troops to Sri Lanka to protect Tamils in 1986. Atal Behari Vajpayee conducted nuclear tests against the wishes of the West. What is the use of having a 1.2 million army and spend lakhs of crores of rupees on it if it is not allowed to strike back at Pakistani or Chinese aggression or used to further national interests?

India is a soft state with a timid leader. We will continue to be pushed around by China, Pakistan and the US till we have national leaders like Lal Bahadur Shastri and Indira Gandhi or at least Rajeev Gandhi or Atal Behari Vajpaee.

The youth of India have been outraged by the government’s apathy to crimes against women and taken to the streets in protest. Will the people of India be outraged by the timidity of our government in dealing with Pakistan’s belligerent and provocative support to Muslim terrorism in India and take to the streets and demand a fitting response from the Government?

May God save India.