CONTENTS
OF THIS SECTION
19/09/09

"Looking at India's position in South Asia and the objectives of the Indian state's policy, the following observations stand out

1. South Asia has not so much been the target of Indian investment as of trade

2. The Indian big bourgeoisie is trying to ensure that its markets, ceded to it by the collaborating TNC seniors, are not just restricted to India but include all of South Asia.

3. Towards this end, the Indian big bourgeoisie is trying to ensure that the bourgeoisies of these other Countries remain subordinate to the Indian big bourgeoisie. cither processing materials for export to India or working with Indian equipment and machinery.

4. The trade pattern of India with its neighbours follows the classical colonial pattern of India exporting manufactures and importing primary products.

5.To ensure and reinforce this pattern of trade the Indian state has enforced a virtual customs union with some countries. Its objective is to move from a 'harmonisation' of trade policies to the formation of an economic union under its hegemony.

6. The loans and sometimes grants given in the name of "aid" have been aimed at enabling these countries to buy more of Indian commodities and serving the Indian states military interests, through the building of roads.

7. The "aid" programmes have seen considerable numbers of Indian experts being employed in these countries, able to provide both commercial and politico-military intelligence, and to influence local political developments.

8. India has a considerable trade surplus with the countries of South Asia. For the three major South Asian trade partners (Bangladesh, Nepal and Sri Lanka) the surplus was more than Rs. 200 crores in 1985-86  (Mirza, 1988) This surplus results in a transfer of hard currency from these countries to India.

9 The Indian state has intervened in and used various political movements in the neighbouring countries. e.g. the deposition of the Ranas in Nepal, the formation of' Bangladesh and the Tamil movement in Sri Lanka, to name just a few.

10. Along  with using these movements, the Indian state has also resorted to forms of various economic blockade and the threat or actual use of military force.

11. The Indian state has arrogated to itself the power deciding the levels and types of military equipment the neighbours should have.

12. The Indian bourgeoisie occupy important positions in the economies of some of the neighbours. This has helped the subversion of their independence and sovereignty.

l3. The Indian state has formally ended the independent existence of one neighbour (Sikkim) and restricted the independence of many of the others (Nepal, Bhutan and Sri Lanka)

14.. In its attempt to establish a regional hegemony the Indian State has enunciated a modified Monroe Doctrine. While demanding that India must have the predominant role in South Asian matters, it has also insisted that none of the neighbours should have relations with external powers. India alone in the region will maintain the external links."

India: an Empire in Denial

Indian Expansion - An Outline*

Dev Nathan,
Journal of Eelam Studies, Summer 1989

* Excerpts from a much longer unpublished paper by the author under the same title.
The author contributes regularly to Economic and Political Weekly (Bombay)

Introduction

In analysing Indian expansionism we must turn to three levels at which the denial of the rights of nationalities and nations operates.

The first is the centralisation of powers in Delhi and the economic, political and linguistic - cultural suppression of non-Hindi nationalities, manifested in the blocking of the paths of development of the existing or aspiring national (regional) formations.

The second is the denial of the right of secession of the border nationalities that either wish to secede (Nagas and Mizos) or do not accept their integration in India (Kashmiris).

The third is the whittling down of the sovereignty of the neighbouring small powers of South Asia.

The economic, political, military and cultural-linguistic processes operate at all three levels simultaneously. For example, we have existing today, the linguistic suppression of the Tamils, the military denial of the Sikh demand for federalism, the military suppression of the Naga movement for succession and the whittling down of Sri Lanka’s sovereignty - all operating together.

The differentia specifica of expansionism lies in the subjugation of sovereign states. But this is only the logical extreme of a process of denying the right of nations to self-determination, beginning with the suppression of the national development of the various nationalities that constitute India, advancing through the denial of the right of the border nationalities to secede and culminating in the whittling down of the sovereignty of existing nation states.

In a sense the crucial suppression is the first, for it is on the suppression of the national development of the various nationalities that the Indian state is founded. Further, it is the success in this endeavour that determines (along with the support of the relevant imperialism), the strength the Indian state can deploy in its subversion of the sovereignty of the neighbouring states.

Colonial Legacy

India was very much a base from which British imperialism operated in a large part of the world from Africa upto Australia. Indian finances were used to finance expeditions in this whole theatre. The colonial government helped Tatas set up a steel plant so as to be able to supply this theatre in the event of communication with Europe being cut. The Indian Army was used not only to police India and its environs but this entire theatre.

When the Indian ruling classes got a share of power in 1947 they did not repudiate this colonial legacy. Till today units of the Indian Army recount their exploits in the service of the British Empire.

The British colonial government had forced unequal treaties on neighbouring countries like Nepal, Bhutan and Sikkim, and reduced them to the position of protectorates. The colonial government had also extracted a number of extra-territorial privileges in Tibet.

The successor India Government moved to secure this colonial heritage and privileges It militarily annexed the loosely connected North-East and continued the unequal treaties and privileges extracted by the British.

Sikkim

Among the countries of South Asia, Sikkim has travelled the full distance from being a protectorate to becoming a colony, incorporated as a state into the Indian Union. This account of the annexation of Sikkim is based on *Sunanda Datta Ray's book 'Smash and Grab' (1984).

Till 1950, Sikkim's relations with India were governed by the 1861 Treaty of Tumlong. The Treaty described Sikkim as a "Country". Unlike the "native" states which handed over defence, and foreign relations to the Indian Government, Sikkim retained its right to raise and use an army. The Chogyal had transferred Darjeeling and its environs to the Briitish Indian Government and was paid a rent for the use of the same. This transfer became void on the lapse of paramountcy that followed the transfer of power.

In International law Sikkim had the status of a protectorate, with its foreign affairs and defence being in the hands of the British Indian Government. But with the transfer of power paramountcy was neither retained by the British Government nor transferred to the new Government of India.

The Government of India, however, arrogated to itself the paramountcy of the British Crown. It refused to implement Article 73 of the UN Charter which called on all members to progressively remove restraints on protectorates and such like non-self governing territories. Instead the Government of India moved in the direction of increasing the restraints on Sikkim and step by step extinguishing its existence as a separate state. Even if it were granted that Sikkim was a protectorate of India, a protectorate still remains a state under international law.

In 1949 there was a local movement, supported by India. This movement demanded the abolition of feudal estates and accession to India. The demand to abolish feudal estates, was in a way "democratic"; but rather than democracy the real objective was to secure "merger" into India. The occasion of the anti Chogyal movement was used to force the Government of Sikkim into making concessions with regard to its sovereignty The Treaty of 1861 was replaced by the Treaty of 1950. In Addition to the former restrictions on foreign affairs and defence, the Government of India forced acceptance of its role in internal matters too. These increased powers were grabbed both by the terms of the Treaty and by the letter subsequently sent by the Political Officer to the Chogyal.

Article 6 of the December 1950 Treaty placed all communications in the hands of the Government of India. It said:

(1) The Government of India shall have the right of constructing maintaining and regulating the use of railways, aerodromes and landing grounds and the air navigation facilities of posts, telegraphs and wireless installations in Sikkim; and the Government of Sikkim shall render the Government of India every assistance in their construction and protection;
(2) The Government of Sikkim may, however, construct, maintain and regulate the use of railways and aerodromes and landing grounds and air navigation facilities to such extent as may be agreed to by the Government of India;
(3) The Government of India shall have the right to construct and maintain in Sikkim roads for telegraphic purposes and for the purpose of improving cornmunications with India and other adjoining countries and the Government of Sikkim shall render to Government of India every assistance in the construction, maintenance and protection of such roads. ( Vohra 1980, 100) This very comprehensive clause gave the Government of India full control over Sikkim's communications.

The letter sent by the Indian Political Officer to the Chogyal on 25th February, 1951 (Datta - Ray, 1984, 61) arrogated to the Government of India (GOI) sweeping powers in the internal political and administrative affairs of Sikkim.

The letter proscribed the employment of foreigners without the permission of the GOI. It stated that the Principal Adviser would be nominated by the GOI; that any difference of opinion between the Chogyal (referred to as "Maharaja" in the letter) and the Principal Adviser would be referred to the GOI for decision.

The letter entitled the Chogyal to seek GOI aid for the maintenance of law and order. But, the letter made clear, "Independently of such a request the GOI will be entitled in such a situation to give such advice as they may consider necessary and appropriate for dealing with the situation and the Maharaja shall be bound to act in accordance with such advice".

From the position during the British time where Sikkim was to be guided in defence and foreign affairs by the British Crown, the position deteriorated in 1950-51 to one where the GOI also acquired complete control over communications and unlimited powers to interfere in local political and administrative matters.

Economically, Sikkim's wealth was concentrated in the hands of Marwari traders who had a strong hold over commerce. The firm of Jethmull Bhojraj acted as state bankers and took a cut on all transactions. The Marwari traders bought up Sikkim's cardamom for just Rs. 460 a maund and ,sold it in the middle east for Rs 2,000 per maund.

The GOI refused Sikkim's request for a separate foreign exchange account; and then rejected Sikkim's application to import machinery, on the ground that Sikkim did not earn any foreign exchange, though Sikkim cardamom was sold by Indian traders in foreign countries. In discussions on the Five Year Plans the Chogyal wanted sophisticated small scale industries, but Nehru stressed agriculture.

The GOI was bent upon maintaining Sikkim as a market for Indian manufactures. The "aid" given by India was set-off against the cost of the ropeways and other communication projects that the GOI took up for its own military needs, and for paying the high salaries of the Indian officials who were the agents of Indian intervention.

Along with all the economic, political, and military instruments, India also had those of political cum-ethnic movements From the nineteenth century onwards there had been a considerable migration of Nepalese into Sikkim. By the 1950s they were a majority I heir ethnic aspirations were combined with the demand for a measure of democracy. But under cover of both these movements there was the real movement for annexation by India.

As the ethnic factor combined with the idea for democracy pitted the Nepalese against the Chogyal, King Mahendra of Nepal tried to influence the Nepalese community to stand by the Chogyal. Koirala, the leader of the Nepalese Congress, used his influences to get the Nepalese community to stand in favour of "accession" to India -in the name of democracy, of course. (Sen Gupta 1988, 34)

In the wake of India's victory over Pakistan in the 1971 war, the GOI moved to strengthen its hold over Sikkim and to prepare the ground for its annexation.

An orchestrated campaign for "democracy" paved the way for Indian military intervention and the final denouement. In May, 1973, while the Assembly House in Gangtok was surrounded by the Indian Army and CRP the Assembly members were taken in covered army jongas to vote on the resolution for "accession" to India. Nur Bahadur Khatiawar, one of the participants in this military annexation was to later say

"The so-called request for participation in the political institutions of India and the resolution upon which the 35th amendment of the Indian Parliament, making Sikkim an associate state of India, was never passed in the Sikkim assembly. This fact, we as members of the Sikkim assembly can vouch for fearlessly. "(Dutta - Ray, 1984, 245)

After this fraud the Indian Parliament passed the 35th Amendment incorporating Sikkim as a state of the Indian Union. When this was challenged in the United Nations; the Indian representative completely falsified the status of Sikkim saying "Sikkim was a princely state under British protection exactly like the other 500 odd princely states that were protected by Great Britain". (Dutta-Ray, 1984, 253)

The truth was that Sikkim had been a protectorate of Great Britain and as a protectorate it still remained a State under international law. One of the few dissenting voices in the bourgeois press was that of B.G.Verghese, editor of Hindustan Times, who wrote,

“Elsewhere, protectorates are graduating to independence and colonies arc marc hing to freedom In Sikkim, a protectorate is moving to freedom within India by annexation through constitutional legerdemain". (Dutta Ray 1984, 230)

In the 1971 Bangladesh war the Indian State showed how it could turn national ethnic conflicts in South Asia to its own advantage. The annexation of Sikkim demonstrated the ruthlessness and utter disregard for norms of international behaviour with which the Indian state could end the independent status of a weak neighbour. This episode was a grim warning to Nepal and Bhutan, both bound to India by restrictive unequal treaties.

Nepal*

[*Since the paper was written in May 1988, it does not cover the subsequent efforts by the Indian Government to subjugate Nepal economically - Ed.]

Unlike Sikkim, Nepal was never a protectorate of the British. The British preferred to maintain it as an independent state, as a buffer between British India and China. The 1923 treaty of peace and Friendship recognised Nepal as an independent and sovereign state. On the eve of the transfer of power, in July, 1947, Britain reaffirmed Nepal's independence when their respective legations in Kathmandu and Nepal were raised to the embassy level.

Well before this, however the seeds of India's domination of Nepal had been sown. The Nepalese Terai contained a population of largely Indian extraction. Marwari and other Indian traders had spread through the country, occupying key positions in trade and commerce. They sold industrial products manufactured in British India and sent back rice and other agricultural commodities in return. In the second half of the thirties Indian big business groups set up jute, sugar and match factories in Nepal, (Lama, 1986. 150).

While encouraging a movement against the autocratic Ranas, the GOI signed the 1950 Indo-Nepalese Treaty, a treaty that holds even today and legalises some aspects of the unequal relations between Indian and Nepal.

According to Article 6 of the treaty, the Governments of India and Nepal agree to grant on a reciprocal basis to the nationals of one country in the territories of the other the same privileges in the matter of residence, ownership of property, participation in trade and commerce, movement and privileges of a similar nature. This combined with free movement across the borders and the full convertibility of currency has enabled Indian traders, contractors and industrialists to buy up economic assets in Nepal and dominate its economic life. The granting of formally equal rights only legitimises inequality, as the Indian migrants to Nepal are essentially businessmen of various hues, while the Nepali migrants to India are Gorkha soldiers and low-paid labourers, working in hotels, restaurants and as domestic help.

The letters exchanged with the Treaty spelt out the military aspects

(1) Neither Government shall tolerate any threat to the security of the other by a foreign aggressor. To deal with such a threat, the two Governments shall consult with each other and devise effective counter measures.

(2) Any arms, ammunition or warlike material and equipment necessary for the security of Nepal that the Government of Nepal may import through the territory of India shall be so imported with tire assistance and agreement of' the Government of India.

(3) Both Governments agree not to employ any foreigners whose activity may be prejudicial to the security of the other

What this effectively does is to tie down Nepal to India's perception of the military situation. The GOI can further determine the arms that Nepal may buy. The GOI has done this not only with regard to arms purchased through India, but all arms purchased by Nepal.

In 1987 the GOI objected to Nepal's purchase of anti-aircraft guns from China (India Today, Dec. 15, 1987). Nepal's right to employ any foreign nationals, of its choice is restricted by India's necessary agreement. Faced with the growing conflict in South Asia, Nepal has proposed that it be declared a zone of peace. India has objected to this on the ground that it implies a revision of the 1950 treaty, which forces Nepal to act on the basis of Indian military perceptions. Neutrality, when India is one of the partners in the conflict, is something that India is determined not to allow Nepal.

Nepal is a land-locked country, or, rather, as it has sometimes been described an India-locked country. India has used this position to force various harmful "Trade and  Transit Treaties" on Nepal. The first Treaty of 1950 forced Nepal to levy export duties on Nepalese manufactures equal to Indian excise duties so that Nepalese manufactures may not become competitive. The Treaty prohibited Nepal from selling its good in third countries at rates cheaper than those in India. It imposed GOI control on the foreign exchange earned by Nepal, which was deposited in the Reserve Bank of India. Further, all goods imported by Nepal through India, were charged import duties at Indian rates. These monies were later refunded, not to the Nepali importers but to the Nepali Government.

What India had imposed on Nepal was a customs union, an area within which trade would be free, while the area would face the rest of the world with common import duties. Export duties on exports of Nepali manufactures to India equivalent to Indian excise duties, were aimed at discouraging Nepali manufactures. Food and other primary products from Nepal faced no such duties, thus their export was encouraged relative to that of manufactures.

At the same time imports by Nepal from third countries faced import duties at the same rates as levied by India. Thus, Indian manufacturers got the same protection in Nepal that they did in India. The scheme of returning these import duties to the Nepali Government, only made the Nepali Government a party to the destruction of Nepali manufacturer; it did not change the economic effects of the customs union.

As one study pointed out, "Urban petty manufacturing of 'industrial' goods has become increasingly threatened compared with the growth of new forms of production and servicing, by 'the Indian connection', which demonstrates the extent to which small scale 'industrial' enterprises are dependent on large scale factory production outside Nepal. The former includes brass and clay pot makers, straw mat weavers, and makers of bamboo screens or winnowing trays; and the latter motor mechanics, watch and radio repairers, and tailors using imported Indian cloth". (Blaikie et al, 1980, 56)

Questions of trade and transit have continued to be major issues in Indo-Nepalese relations. The GOI has insisted on clubbing together trade and transit, so that it can make use of Nepal's weakness in transit to force concession on Matters of trade. Nepal, on the other hand,. has been trying to get the two issues delinked and separate treaties entered into for both. It was only in 1978, during the Janata Party rule in Delhi, that the GOI agreed to enter into separate treaties for trade and transit.

The GOI has frequently used strong-arm tactics to force Nepal to accept its dictates. In 1971 there was a virtual economic blockade of Nepal, prior to the new Indo-Nepal Treaty (1971) being signed. India stopped supplies of petroleum products and Nepal was threatened with a virtual transport shutdown. Nepal had to give up its demand to separate trade and transit and to agree not to raise the tariffs on new industries (conceded in the 1960 treaty.) This economic blockade was the culmination of a series of trade measures in the late sixties.

As Nepal undercut India in raw jute and stainless steel utensils and synthetic fabrics that came into India (the factories for their manufacture in Nepal having themselves been set up by Indian business groups) the GOI in 1969 banned all imports of textiles from Nepal. At this time Nepal had also approached China for help in cotton cultivation in the Terai. The GO I insisted on keeping the Chinese out of the Terai and responded with an economic blockade.

Keeping the Chinese out of any projects in the Terai has been a clearly enunciated aim of Indian policy. The reason is supposed to be one of defence, but what this actually means is that of keeping Nepal as dependent as possible on India. To make sure that no project in the Terai goes out of Indian hands, the GOI has even used outright military, pressure. After China was awarded a contract to build a section of the East West Highway in the Terai, the Indian Army was moved into position along the Nepalese border and remained there till Nepal agreed to cancel the Chinese contract.

The net result of India's economic thrust, backed up by continuous pressure from the Indian Government, is that Nepal's exports are chiefly primary products, maize, rice, herbs, ghee, dried ginger, timber and jute. Some of these, like wheat, ghee and oil seeds, are re exported to Nepal in processed form. India's exports, on the other hand, are of a variety of manufactured goods, chiefly chemical and drugs, metal manufactures, and machinery and transport equipment.

The classical colonial pattern of the nineteenth century free trade (primary products versus manufactures) is the pattern Indian has imposed on Nepal. This pattern is reinforced by government pressure, and its aid programme. Needless to say, Nepal's terms of trade with India have deteriorated in line with the fall in primary  goods prices relative to those of manufactures.

The trade pattern has also led to a large deficit for Nepal, to cover which Nepal has, at times, had to convert several million dollars worth of hard currency into Indian rupees. Having a currency that is freely convertible in to Indian rupees, the Nepalese official exchange rate with  the dollar is determined by India. Nepal's trade deficit with India is largely covered by the remittances of the cheap labour it provides to India.

Besides the colonial trade relation, and the supply of cheap labour there is also the use or rather destruction, of Nepal's natural resources to India's advantage. The Kosi multi-purpose flood control power-irrigation project is one such. There were differences on the compensation to be paid for Nepali lands acquired for the project. The projects have resulted in a continuous soil erosion, while yielding negligible benefits in irrigation and flood control to Nepal (Lama, 1985, 130)

The stranglehold of Indians over trade and commerce, particularly in the Terai has already been mentioned. Many of these traders have for convenience taken Nepal citizenship, but they retain all other business and family links with India. Othcr traders areIndian citizens. It has also been mentioned that Indian investments in industrial enterprises began in the late 1930s. After world war II some of the Indian business groups set up joint enterprises in collaboration with the local Nepali businessmen, compradors of compradors, as the Indian business groups had themselves set up their industrial ventures in collaboration with the TNCs. Since then some industrial units have been set up by Indian business groups. Below, a few of the units have been mentioned. But, as noted by Morris (1987), the official number of Indian joint ventures is almost certainly an underestimate.

The Sahu Jain group set up a sugar mill in 1963; Dhirajlal, Brijlal of Calcutta a starch and glucose factory. Birlas have a zinc and lead project in which they hold 25% of the shares, with another 25% being held  bv Golden Moffit and Associates of U.K. Union Carbide of India Limited  have a dry cells plant. In Nepal Orind Magnesite, Orissa Industries hold '25% of the shares and the unit has a technical collaboration with Harbingar Walkar of USA. The ubiquitous Oberois have a hotel, while the Mohan Meakin group brew beer. These are also units for manufacturing of glue and conversion of wood into splinters. (All the above information from Lama, 1985)

The Indian joint enterprises in Nepal fall into two clear categories.

First, those in which the technology is quite standardized, as is the case with textile mills, beer brewing, sugar mills and so on.

Second, those in which the enterprise has a partner from the imperialist countries, in financial and/or in technical collaboration.

This confirms the earlier conclusion about the nature of capital export from India. In the case of Nepal, however, the virtual customs union between India and Nepal, which give Indian manufactures an access to the Nepali market just as though it were an Indian state, has inhibited Indian investment in Nepal. Selling to Nepal is more profitable than investing there. As a result the bourgeosie that does grow in Nepal is linked to the Indian bourgeoisie, running repair shops and service centres for machinery and equipment manufactured in India, or using Indian equipment in small establishments like tailoring shops.

India is by far Nepal's largest trade partner and aid giver. The customs union forced on Nepal has helped India maintain its position in Nepal's trade, a position reinforced by the Indian aid programme.

It was in the mid 50s, that India became Nepal's largest aid-giver, a position it has held since. Aid, of course, is a means to promoting trade. The sectoral distribution of aid shows to what extent this programme is meant to benefit India. More than 50% was for building roads and airports. Besides their strategic military importance, these means of communication help the spread of Indian factory made goods into the far corners of Nepal, destroying the local handicrafts like basket weaving and pot making, building up in its stead a class of comprador merchants based on the sale of Indian factory made goods. This process is very familiar to Indians who know of the role played by the railways in Britain's imperial scheme.

Productive activities like agriculture, horticulture and industries, or beneficial activities like education and health, altogether got less than 8% of the total aid. The other major sector to which Indian aid went has been "irrigation, power and water supply". As already pointed out, this was meant to benefit India and not Nepal. If anything, Nepal has paid the cost in terms of soil erosion and other forms of ecological degradation.

 Consequent upon this aid programme, Dewan Vohra (1980) has estimated the number of Indian experts in Nepal to be around 100,000

Bhutan

Bhutan was one Himalayan country that had never been conquered In a foreign power, not even by the British. Its peasant economy initially gave little scope for the expansion of trade links, except in textiles.

In 1949 India signed a friendship treaty with Bhutan. It was one more in the chain of unequal treaties binding the small. Himalayan neighbours of India. By the treaty Bhutan agreed to be 'guided' by India in its defence and foreign relations.

The Indian state did not pay much attention to Bhutan in the period up to the 1962 war against China, though Marwari businessmen continued to expand their trade and control, particularly at the strategic entry points from the plains into Bhutan.

After the 1962 war the Indian state began to pay increasing attention to Bhutan. The Indian military road building organisation set to work to build a network of roads that would link Bhutan firmly with India, and allow the Indian Army to outflank Chinese positions. More than 70% of Indian's so called aid to Bhutan is for this purpose of road-building. Taking up first the North-South roads that lead to India and could facilitate, when needed, the movement of Indian troops, it is only now that an East West road is being constructed.

The building of the road network and the related expansion of contracts have been accompanied by the spread of Indian business. The shifting of the capital from Yaro (close to the Chinese border) to Thimpu (which is much further south), brought about under Indian pressure, but using for that purpose ancient Bhutanese custom, has helped the expansion of Indian merchant capital. Except for some enterprises undertaken by sections of the Drukpa ruling clans (Dorji and Wangchuck), the Indian merchants dominate commerce and trade.

India has also begun using Bhutan's natural resources for its own economy The recently-commissioned Chuka hydel project will supply electricity to India.

The Indian military presence is in the guise of a training mission (IWTRAT) and the road-building organization (BRO). The Indian military not only builds and maintains the roads, but also controls movement on them.

India has insisted on continuing the unequal treaty of 1949, whereby Bhutan "agreed" to be guided by India in matters of defence and foreign affairs. The Indian Government attempted to exclude Bhutan from participating in the 1968 Vienna Conference on the Law of Treaties, which was to discuss the termination of unequal treaties.

But the Bhutan Government came to know of the Conference and sent a delegation (Datta-Ray, 1984).

In 1979, when the Congress Party was not in power, Bhutan for the first time dared to express a difference on foreign policy, not following India's "guidance". This was at the Havana Non-Aligned Conference, when Bhutan voted differently from India on the Kampuchea issue. Indira Gandhi had pointed to this as the effect of a weak government at the Centre, and promised to undo this if she were returned to power.

While Bhutan has been trying to widen its political, economic and diplomatic relations with countries other than India, Indian business continues its penetration of Bhutan and the Indian military presence is as ominous as ever. As in the case of Sikkim, the Indian ruling class may well try to use the ethnic difference between the Drukpas and the Ncpalese to push Bhutan along Sikkim's path.

Bangladesh

An aspect of the national oppression of East Pakistan was its lack of industrialisation. East Pakistan exploited its raw materials in exchange for industrial products. Subsequent to the formation of Bangladesh the Indian big bourgeoisie stepped in to supply the industrial commodities that had formerly been supplied by West Pakistan. For this purpose loans were given by the Indian Government. Besides commodities of daily use, India also supplied equipment for road and rail transport, anticipating the role that the Indian big bourgeoisie and government were to later play in Sri Lanka after forcing Jayawardane to capitulate.

The Indian state's attempts to exploit and dominate Bangladesh have centred around the sharing of river waters of the Ganga and the Brahmaputra. Before the formation of Bangladesh, India insisted that that the Ganga was "almost" an Indian river and that East Pakistan had neither claim on the water of Ganga. nor any need of it. (Abbas, 1982. 3). All the while it proceeded with the construction of the Farakka Barrage, disregarding international norms that required agreement on the sharing of waters of rivers that flow through more than one country.

The Farakka barrage was completed in end 1974.

"The barrage was commissioned on the pretext of test running its feeder canal for the period 21 April to 31 May 1975. But even after the expiry of this period, India continued to withdraw water, at Farakka unilaterally. "(Abbas, 1982. 4)

Mujibur-Rahman's acquiescence in Indian actions on Farakka was one of the chief factors in his overthrow. After his assassination  the Indian state increased its pressure on Bangladesh. Border skirmishes accompanied increased withdrawals at Farakka. There was a severe crisis (soil erosion and salinity) in Bangladesh in the dry season of 1976 forcing it to take the issue to the UN.

It was only after the defeat of Indira Gandhi's emergency that Bangladesh got some relief on the Farakka issue. In the 1977 Treaty Bangladesh was guaranteed a minimum flow, and not just a share of whatever the flow, which was bound to decrease as irrigation was extended along the Ganga. Whatever the flow at Farakka, Bangladesh was guaranteed 80% of its agreed share.

The return of the Congress Party was followed by withdrawal of this guaranteed flow. The 1982 Memorandum of Understanding did not contain this 80% clause. (Crow, 1982)

Having a share of a rapidly declining flow, is not sufficient to meet Bangladesh interests. Soil erosion, increased salinity and desertification have been the results in Bangladesh of India's Ganga policy. Some of the costs of the Green Revolution are being pushed off on to Bangladesh. And these adverse effects will increase in the coming years. Ben Crow (1982) quotes a senior Indian negotiator in 1978 saying that, at current rates of irrigation expansion "there will be no water at Farakka (during the dry season) in fifteen years time".

How the dry season flow of the Ganga is to be augmented has thus become an urgent question. The Ganga river basin covers not only India and Bangladesh but also Nepal. India has till recently insisted on dealing with Nepal and Bangladesh on bilateral bases alone. This has been India's usual approach to relations with neighbours in South Asia, as it becomes easier for the Indian state to browbeat each small neighbour separately. Bangladesh has insisted on bringing Nepal into the talks on augmenting the dry season flow of the Ganga.

India has proposed a Brahmputra-Ganga link canal to bring the waters of the Brahmputra into the Ganga at Farakka. The barrage will be in India and the canal will mostly flow through Bangladesh.

Bangladesh is understandably suspicious of a scheme in which the controlling points will be in India's hands. Besides, the land loss for the canal will be mostly borne by Bangladesh. Just as India is now able to threaten ecological denudation of the North-Western parts of Bangladesh, a Brahmputru Ganga canal will give India similar powers in the Eastern parts of the country.

Bangladesh has proposed a scheme for collecting rain run-off and snow inch in a series of reservoirs in Nepal to be later released into the Ganga. The  scheme cannot be formulated or investigated without the participation of the Nepalese government and its officials. At least on the count of flood control in UP, Bihar and West Bengal, the Bangladesh scheme is superior to the Indian proposal. (Crow, 1982).

India has all along been proceeding with such works in the Indo-Nepal region. But it has insisted that this is a bilateral matter between India and Nepal. It is only recently after continuous pressure in SAARC, that India has agreed to multilateral discussions on the Ganga water question.

In the first flush of the victory  over Pakistan in 1971 ambitious plans were formulated for virtually integrating Bangladesh into the India economy.  These were proposals for a common electricity and water grid, (covering the whole of eastern India and Bangladesh (Rao, 1972, 150) These have not fructified so far; but the plans have not been given up, they are being implemented in a piece-meal manner.

In trade matters too there has been continuous pressure on Bangladesh to keep its economy open to imports of manufactures from India. On the external trade front, Bangladesh initially was a supplier of only raw jute as  the jute mills were all located in West Pakistan. India tried to get as much of Bangladesh jute crop as possible.

In the immediate post  war period there was an open looting of Bangladesh jute. After Mujib's overthrow. Bangladesh developed a jute textile industry of its own. Since then India has been trying to get Bangladesh to stop its competition in the international jute market and instead came to an agreement with India on the marketing of jute. So far Bangladesh has refused to come to such an agreement, which would protect India's market share.

Indian investments in Bangladesh will pick up with proposed $400 million gas based fertilizer plant in which KRIBHC0 will be a partner. Haldor Topsoe of Denmark is the main contractor. Bangladesh will supply gas at a lower price than in India or elsewhere. (Times of India December 23, 1986) KRIBHCO will be able to buy back the product. Bangladesh cheap gas will in this way be harnessed to the Green Revolution in India.

As is the case with other South Asian Countries, Bangladesh too has a considerable deficit in trade with India.

Sri Lanka

It has already been mentioned that Indian investments in Sri Lanka are quite considerable and much higher than the official estimates. Sri Lanka was one of the targets of the Chettiar trade expansion under the British flag. Unlike the case of Burma, from where they were expelled in large numbers, in Sri Lanka the Chettiar traders continued their operations often with their headquarters being in Tamil Nadu.

While the Chettiars continued  their operations, in the 1950s and 60s, India and Sri Lanka competed in the world tea, rubber and coconut markets. These were Lanka's main exports. Along with this competition  India showed it, determination to maintain an unequal relation when it objected to Air Ceylon's resumption of overseas service and only reluctantly its right to carry passengers to or from Bombay (Kumar 1986. 62)

With the setting up of a fairly elaborate industrial structure in India (a large and dominant p part of it in collaboration with some imperialist power or the other) many of the joint enterprises began to use their Indian (or specifically Madras Offices) to carry out activities in Lanka.

The British Indian Ashok-Leyland and German-Indian TELCO are the main suppliersof trucks and buses. Bajaj has a virtual monopoly in the supply of three Wheeler auto-rickshaws. The Star Textile Engineering Corporation and the Lakshmi Machine Works, both manufacturing textile machinery with various foreign collaboration, sell their machinery in Sri Lanka and have set up textile mills there.

The Danish - Indian ECC  has been a major construction company. The biggest of  the Indian Tamils carrying on business in Lanka. Gnanam, has, with Japanese collaboration set up industrial enterprises, including a flour mill at Trincomalee and a cement plant. This cement plant was destroyed by fighters uf EROS (much of this information was provided by friends in Madras)

The growing economic relations were however clouded by political differences between the two states. In the 60s Lanka had not supported India in the border dispute with China, rather it had tried to mediate in the dispute. During the 1971 war Sri Lanka provided refuelling facilities to Pakistani aircraft. Further, Lanka's military was being trained by Pakistan.

The movement of the Eelam Tamils for self-determination provided  the Indian state with an opportunity to intervene in Lanka and force the Government of  Jayawardene to capitulate. The GOI's military actions against the Eelam Tamils is proof that its one time advocacy of their rights was entirely aimed at advancing the economic - political interests of  the Indian state (and its super power backer)

Along with the Accord the exchange of letters between Rajiv Gandhi and Jayawardene reveals the extent of capitulation. In the letters it was stated that the two would reach agreement

"about the relevance and employment of foreign military and intelligence personnel with a view to ensuring that such presence will not prejudice Indo-Sri Lanka relations" (Frontline, August, 8-21,.I987)

What this meant was that Lanka would cut off military relation with powers not approved by India. A senior Indian army officer made it plain, "Pakistan's military involvement in Sri -Lanka came to an end on July 29, 1987, and intend to make certain it stays that way" (India Today, Dec. 15, 1987).

The letters agree,

"Trincomalee or any other ports in Sri Lanka will not be available for military use by any country in a manner prejudical to India's interests".

Again it is India that will determine which forces are allowed to use Sri Lanka's ports. Given the strategic alliance between the Soviet Union and India, it is US imperialism, Pakistan and China that will be debarred from using Sri Lankan ports.

Further,  "The work of restoring and-operating the Trincomalee oil tank farm will be undertaken as a joint venture between India and Sir Lanka. "

This is a direct economic benefit written into the Accord. The earlier contract awarded to a Singapore firm was cancelled.

The GOI gave loans to the Sri Lanka government to be able to buy various kinds of Indian equipment and manufactures, buses and the like. Improved business condition for the Indian compradors was signalled by the India-Sri Lanka joint Business Committee meeting after a gap of eleven years.

While the Indian Army has become an army of occupation, the civil administration of the Tamil areas have also been taken over by the Indian state. IAS officers have been sent to run the administration. Doordarshan has begun telecasts for Jaffna and nearby areas. The areas occupied by the Indian army are being economically integrated into India. Sri Lankan customs and trade authorities have been expelled from the areas, and Sri Lankan customs regulations have ceased to apply. Movements of Indian merchants and commodities into these areas is now no different from any part of India. There have been reports that the unregulated import of goats (to feed the Indian army of occupation) has spread foot-and-mouth disease among the cattle in these areas.

No wonder that Rajiv Gandhi told a Congress Party meeting (Indian Express July, 31) "Sri Lanka would come under the Indian orbit like Bhutan under the terms of the agreement." (Sengupta, 1988, 253).

Pakistan:

Of all the countries of South Asia it is Pakistan that has most resisted Indian expansionism. It has refused to open up its economy to trade with India, instead protecting its industries from competition with India. While India has held that the economies of the SAARC countries are complementary. Pakistan has held that its trade is competitive with India..A note on Indo Pak  trade (Mirza, 1988) points out that the main items of exports and the main items of exports of both India and Pakistan are more or less the same.

So far Pakistan has allowed private trade with India in just 42 items. There were reports that Pakistan is willing to increase the number of times in which private trade may be allowed. While Pakistan has proposed a "no-war pact" with India which could give it the security it needs, the GOI has proposed a "Treaty of peace and friendship". The Indian state's objective is to get Pakistan to open up its economy to trade with India. This has been resisted by Pakistan. In fact, it was a pro-India stand on this issue that led to the removal of Mahboob UI Haq front the post of Pakistan's Economic Minister.

Summing Up

Looking at India's position in South Asia and the objectives of the Indian state's policy, the following observations stand out

1. South Asia has not so much been the target of Indian investment as of trade

2. The Indian big bourgeoisie is trying to ensure that its markets, ceded to it by the collaborating TNC seniors, are not just restricted to India but include all of South Asia.

3. Towards this end, the Indian big bourgeoisie is trying to ensure that the bourgeoisies of these other Countries remain subordinate to the Indian big bourgeoisie. cither processing materials for export to India or working with Indian equipment and machinery.

4. The trade pattern of India with its neighbours follows the classical colonial pattern of India exporting manufactures and importing primary products.

5.To ensure and reinforce this pattern of trade the Indian state has enforced a virtual customs union with some countries. Its objective is to move from a 'harmonisation' of trade policies to the formation of an economic union under its hegemony.

6. The loans and sometimes grants given in the name of "aid" have been aimed at enabling these countries to buy more of Indian commodities and serving the Indian states military interests, through the building of roads.

7. The "aid" programmes have seen considerable numbers of Indian experts being employed in these countries, able to provide both commercial and politico-military intelligence, and to influence local political developments.

8. India has a considerable trade surplus with the countries of South Asia. For the three major South Asian trade partners (Bangladesh, Nepal and Sri Lanka) the surplus was more than Rs. 200 crores in 1985-86  (Mirza, 1988) This surplus results in a transfer of hard currency from these countries to India.

9 The Indian state has intervened in and used various political movements in the neighbouring countries. e.g. the deposition of the Ranas in Nepal, the formation of' Bangladesh and the Tamil movement in Sri Lanka, to name just a few.

10. Along  with using these movements, the Indian state has also resorted to forms of various economic blockade and the threat or actual use of military force.

11. The Indian state has arrogated to itself the power deciding the levels and types of military equipment the neighbours should have.

12. The Indian bourgeoisie occupy important positions in the economies of some of the neighbours. This has helped the subversion of their independence and sovereignty.

l3. The Indian state has formally ended the independent existence of one neighbour (Sikkim) and restricted the independence of many of the others (Nepal, Bhutan and Sri Lanka)

14.. In its attempt to establish a regional hegemony the Indian State has enunciated a modified Monroe Doctrine. While demanding that India must have the predominant role in South Asian matters, it has also insisted that none of the neighbours should have relations with external powers. India alone in the region will maintain the external links.

References:

Abbas B.M. The Ganges Water Dispute, Delhi, Vikas
Blakie, Piers John Cameron and David Sheddon, Nepal in Crisis, Delhi, QUP, 1980
Crow, Ben 1982 'Appropriating the Brahmaputra' - Economic and Political Weekly, December 25
Datta-Ray, Sunanda K 1981 Smash and Grab - the Annexation of Sikkim, Delhi, Vika
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Kumar, Vijay 1986 India and Sri Lanka - China Relations, Delhi Uppal Publishing House
Lama, Mahendra P. 1985 The Economics of Indo Nepalese Cooperation, Delhi MN Publishers
Mirza, P.S. 1988 'Indo Pak Trade: Possibilities of Expansion' Economic and Political Weekly, March 12
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