canadainindia

$9.95

Canada and IndiaBroadening and Deepening the Relationship

Reeta Chowdhari Tremblay, Concordia University

2003-4Foreign Policy Dialogue Series

Printed in CanadaPrinted on oxygen bleached recyclable paper

Asia Pacific Foundation of Canada

666 - 999 Canada Place, Vancouver, BC V6C 3E1Tel: 604-684-5986Fax: 604-681-1370Email: info@asiapacific.caInternet: www.asiapacific.ca

ISSN 1706-919X – printISSN 1706-9203 – online© Copyright 2003 by Asia Pacific Foundation of Canada.All rights reserved. Canada in Asia may be excerpted orreproduced only with the written permission of the Asia Pacific Foundation of Canada.

September, 2003

– 1 –

ASEAN Association of Southeast Asian Nations

BJP Bhartiya Janata Party

BSF Border Security Force

CANDU Canada Deuterium Uranium (Pressurized Heavy Water Reactor)

CIDA Canadian International Development Agency

CTBT Comprehensive Nuclear-Test-Ban Treaty

DFAIT Department of Foreign Affairs and International Trade

FDI Foreign Direct Investment

HDI Human Development Index

NPT Treaty on the Non-Proliferation of Nuclear Weapons

NRI Non-Resident Indian

ODA Official Development Assistance

PAC Provincial Armed Constabulary

PIO Person of Indian Origin

SAARC South Asian Association for Regional Cooperation

UNDP United Nations Development Program

ACRONYMS

– 2 –

FOREWORD

The Asia Pacific Foundation of Canada is proud tosponsor the publication of the Canada in Asia Series onthe Foreign Policy Dialogue. This series is a collection ofpapers that the Foundation commissioned in early2003, in response to a dialogue on Canadian foreignpolicy initiated by Minister of Foreign Affairs BillGraham. As Canada’s leading think-tank on Asia, theFoundation is at the forefront of policy analysis onCanada-Asia relations, and we periodically draw on theexpertise of Canadian scholars to help us in our work.I am delighted Professor Reeta Chowdhari Tremblay ofConcordia University has prepared this paper on the“broadening and deepening” of the Canada-Indiarelationship and am confident that her insights andrecommendations will inspire further thinking onCanada’s role in Asia.

The task of rethinking Canada-Asia relations does notend with the Foreign Policy Dialogue. The Foundationproduces a range of print and electronic products thatprovide insight on key developments in Asia. Ourflagship publication — the Canada Asia Review — is anannual stock-taking and report card on major aspectsof the trans-pacific relationship. We also publish a dailynews service, weekly business intelligence bulletin,monthly investment monitor, quarterly economic andpolitical outlook, and periodic commentaries oncritical policy issues. In addition, the Foundation is theCanadian focal point for major Pacific Rim businessand economic cooperation networks. I invite you tosample our products at www.asiapacific.ca and tojoin us in further dialogue and debate on the futureof Canada-Asia relations.

John D. WiebePresident and CEOAsia Pacific Foundation of Canada

– 3 –

The Dialogue on Canadian Foreign Policy, launched byMinister of Foreign Affairs Bill Graham in January 2003,represents a modest but important effort to review keydevelopments in the world since the government’s lastmajor policy statement in 1995 — known as Canada inthe World. The intervening years have been momentous,especially the events surrounding 11 September 2001.With the conclusion of the dialogue and release of theofficial report in July 2003, the stage is now set for amore far-reaching and in-depth debate on the re-orientation of Canada’s foreign policy priorities.

In Asia no less, the period 1995-2002 has been one ofdramatic change. The Asian Miracle of the 80s and early90s gave way to the Asian Crisis of 1997-98, triggeringwaves of political change, economic restructuring andsocial transformation. Against the backdrop ofleadership transition, China not only avoided the AsianCrisis, but has also emerged as a formidable economicpower and a skilful practitioner of internationaldiplomacy. Japan, on the other hand, has experiencedeconomic stagnation through this period. Written off byso many commentators, the “sick man of Asia” stillhappens to be the richest and most technologicallysophisticated kid on the block, by a large margin.Structural reforms in Japan that strike at the core ofJapanese economic, political and social organizationhave gone largely unnoticed.

For its part, India has completed a decade of fitful, butlargely successful economic reforms and is anxious totake its place as a global and regional power. Indiatested nuclear weapons in 1998, followed shortly after byPakistan, raising the spectre of nuclear war in the sub-continent. Southeast Asia is going through its ownidentity crisis. Having largely shaken off the stigma of theAsian Crisis, it now has to compete with China for theaffection of global investors, while fending off unsavouryimages of the sub-region as “the second front in the waron terrorism.” More broadly, there has been aproliferation of bilateral trading arrangements and aresurgence in East Asian regionalism, led by China.

These cross-currents, in addition to many other recentdevelopments in the region, provide ample complexity fora serious re-evaluation of Canada’s foreign policy towardAsia.

As a contribution to the Dialogue on Canadian ForeignPolicy, the Asia Pacific Foundation of Canadacommissioned seven papers to look at key issues in theCanada-Asia relationship. There were three country-specific papers — on China, Japan and India. Two papersdealt with regional issues — nascent East Asiancooperation and the post-September 11 securityenvironment in Southeast Asia. The remaining twopapers looked at different sides of the Asiandemographic in Canada – the supply of skilled workerimmigrants from Asia, and implications of the growingAsian population for Canada’s international relations.We also launched a web forum on Canada-Asiarelations, based on the seven papers, and held aworkshop in Ottawa on 27 March 2003. The Foundation’sofficial submission to the foreign policy dialogue,available at <http://www.asiapacificresearch.ca/caprn/discussion/papers/apfc.pdf>, is the product ofcollective wisdom from the commissioned papers,workshop discussion, in-house research, and otherexpert input.

The purpose of this publication series is to make theseven commissioned papers more widely available andto extend the ideas and recommendations beyond aforeign policy dialogue into foreign policy formulation.I would like to express my personal gratitude to theauthors for their contributions and for helping theFoundation in its mission to deepen the awareness andcritical thinking of Canadians on our relations with Asia.

Yuen Pau WooVice President, Research and Chief Economist and Series EditorAsia Pacific Foundation of Canada

INTRODUCTION

– 4 –

South Asia is a region vital to Canadian interests whichCanadian policy-makers cannot afford to ignore,economically or strategically. Following a shorthoneymoon with India (and to a lesser extent Pakistan)early in their relationship, Canadian foreign policyvis-à-vis South Asia has ranged from indifference toneglect over the last four decades, interrupted by a short-lived period of engagement in the mid-1990s. Untilrecent renewed efforts at engaging India, it would nothave been an exaggeration to echo Ashok Kapur’scomments in the early 1990s that “South Asia has fallenoff the Canadian agenda” and become “a black hole inthe minds of Canadian diplomatic and academicpractitioners.” Since the mid-1980s there have beeninstances of Indian and Canadian cooperation on avariety of domestic and international issues but theseefforts have been sporadic: the two countries signed anextradition treaty in 1987 over concerns that the Sikhdiaspora was involved in the Khalistan movement,worked together to end apartheid in South Africa, andencouraged Canadian investment in India through a TeamCanada visit in 1996. While Canada made serious effortsat redirecting its policy toward the Asia Pacific region inthe mid-1990s, particularly in trade and investment, SouthAsia did not form part of this initiative.

A major difficulty has been India’s nuclear program,which detonated its first device in 1974 usingplutonium from a research reactor built by Canada in1960. From that point on it was clear that if Indiadetonated another device, bilateral relations would beseriously damaged since such a program would almostcertainly draw on additional CANDU technologyprovided for peaceful purposes during the 1960s. Ittherefore came as no surprise when relations reached anall-time low after India’s next series of nuclear tests in1998. Besides concerns over human rights violations,Canada’s support for the universalization of the NPT andCTBT have kept relations frosty over the last decade.

Not long after Western sanctions were imposed aspunishment for these tests, nations like the United

States, Australia, and Israel began to re-engage India.They recognized new realities in the country: a largeeducated middle class, one of the world’s mostextensive consumer markets, the end of reliance onMoscow for security guarantees in the wake of theSoviet Union’s collapse, and the initiation of economicliberalization. Canada, however, remained attached toits “human and soft policy” and neglected to considerIndia’s relevance in strategic and economic terms. TheUS State Department’s constructive engagement ofIndia since 1998, featuring reciprocal visits by PresidentBill Clinton and Prime Minister Atal Bihari Vajpayee,has been predicated on policy convergence in the areasof counter-terrorism, economic liberalization, andstrategic interests in Southeast Asia. Meanwhile,Canada’s interest in India and the exploration of newways to improve bilateral relations (exemplified by theTeam Canada mission) have been overtaken by India’snuclearization. Canada, which considered these tests aserious threat to international security, joined severalnations in imposing economic sanctions, suspendingnon-humanitarian development assistance, andbanning military exports. But while most other Westernstates began to re-engage India, Canada stood virtuallyalone in its intransigence. The cooling of the relationshipresulted in Canada being taken off India’s foreign-policyradar and considered increasingly irrelevant to India’sforeign policy concerns.

During his tenure as foreign minister, John Manley madeserious attempts at re-engaging India economicallyand politically while reiterating Canada’s commitmentto the NPT and CTBT. 2002 and 2003 witnessed visits toand from India by several key ministers and officials:Fisheries Minister Herb Dhaliwal was preceded byIntergovernmental Affairs Minister Stéphane Dion,International Trade Minister Pierre Pettigrew, DeputyPrime Minister John Manley, and Minister of Citizenshipand Immigration Elinor Caplan. Ottawa’s reasoningappears to have been that if good economic relationswere established, it would facilitate the resolution ofcontentious matters like the nuclear issue.

CANADA AND INDIABROADENING AND DEEPENING THE RELATIONSHIP

– 5 –

This begs the following questions. Is re-engagementpurely opportunistic or is there potential to build apositive long-term political and economic relationshipwith India? Will Canadian foreign policy continue toturn a deaf ear to its own practitioners, who haveconstantly emphasized the need to counter terrorismand militancy from Chechyna to the Philippines? Byengaging India in a limited manner, through commerceand development programs, will Canada deny itselfthe influence it could have as a mediator in regionalconflicts such as Kashmir or as a protector of humanrights? Will Canada be content not to exert itsinfluence while the world’s major players try to engageIndia in these areas? These questions have becomeincreasingly significant in light of new realities inIndia, and in addressing them, this paper suggests are-orientation of Canada’s foreign policy towardSouth Asia.

OBSTACLES TO PARTNERSHIPIt is generally assumed in Canadian (and some Indian)circles that the two countries should have a strongrelationship given their commonalities: a colonialhistory; a commitment to democratic values, federalism,and multiculturalism; parliamentary institutions; anda desire to broaden the international peace and securityagenda. This assumption may have been true in the1950s and 60s but it is no longer sufficient grounds toensure vibrant relations in the early 21st century. Amajor part of the problem lies in the fact that geopoliticalrealities in South Asia have changed during the lastthree decades. India has emerged as a confidentnuclear and regional power with a burgeoningeconomy, which seeks bilateral relationships onissues of mutual interest. Canada’s persistentreluctance, if not refusal, to recognize this new statusleaves it few options but to promote common value-structures as the basis of a relationship even thoughIndia considers this insufficient. India no longer wantsto be perceived as an aid-seeking or aid-dependentcountry. Nor will the present (or likely any future)government welcome moral admonitions about its

nuclear agenda. Canada’s re-engagement with Indiacan only be successful if it acknowledges India’snuclear status and conducts diplomacy on a peer-to-peer basis.

India’s demand for an equal or partner-like standing isevident in the difficulties faced by the Shastri Indo-Canadian Institute, heretofore the product of asuccessful academic and cultural relationship. For thepast 30 years, India and Canada have collaboratedclosely on cultural and academic matters, and theShastri Institute – founded in 1968 and funded by bothgovernments (via CIDA and DFAIT in Canada) – hasled the way through an active exchange program. InCanada, Indian Studies have benefited substantiallyfrom sending faculty and graduate students to doresearch and learn languages in India. Canadianuniversity libraries have benefited from a book-purchaseplan to import texts from India. Similarly, Indianscholars have benefited from the Shastri Institute’sCanadian Studies initiative. However, the Indiangovernment has refused to sign a memorandum ofunderstanding with the Institute until it recognizes anequal partnership between India and Canada in all itsgoverning structures.

From Canada’s point of view, the goal of an equalpartnership is predicated on India maintaining asecular democratic society. In this respect, Canadianforeign policy-makers can not ignore recent outbreaksof communal violence. 2002 featured the worst-everflare-up in Gujarat, where more than 2,000 citizens losttheir lives: a three-day retaliatory killing spree byHindus saw Muslim women raped and burned alive,Muslim property destroyed, and religious sites,dargahs, and masjids decimated. Most of the Indianpress agreed that these activities were preplannedand had the unofficial sponsorship of the BJP inGujarat state. The groups most directly responsibleincluded the Vita Hindu Paris had, the Baring Dal,the ruling BJP, and the umbrella organizationRashtriya Swayamsevak Sangh (National Volunteer

– 6 –

Corps) who collectively form the sangh parivar, or“family,” of Hindu nationalist groups.

Hindu fundamentalism has been growing in India.Indeed, the rise of the Hindutva philosophy, espousedby the BJP, has resulted in a lack of tolerance for minoritycommunities, especially Muslims and Christians. InDecember 1992, the sangh parivar mobilized the Hindupopulation to destroy the Babri mosque in the city ofAyodhya to reverse the actions of the Mogul ruler Babar,who according to local legend built the mosque toreplace the temple of Ram. The mosque’s destructionhas come to signal a shift in the national discourse awayfrom secularism toward fundamentalism, as embeddedin the concept of Hindutva. Hindutva suggests thatthere can be only one identity in the Hindu nation, thatthe country can have only one Hindu culture, and thatthere can be “many flowers but one garland; manyrivers but one ocean.” This concept has understandablymade non-Hindus, particularly the 12% of the populationwhich is Muslim, politically and religiously insecure.Long-standing and still-festering communal issuesremain a cause for concern. The recent outbreaks ofviolence and BJP’s Hindutva agenda can be perceived asa constraint to government-to-government and people-to-people diplomacy.

However, it should also be noted that the BJPgovernment appears to be guided by two relatedconsiderations: the maintenance of its political power,and effective governance. For example, while the BJPhas not compromised its nationalist ideologicalagenda, it has forged coalitions with regional partiessuch as the Dravida Munnetra Kazhagam and itsoffshoots in Tamil Nadu, the Akali Dal in the Punjab,and the national conference in Jammu and Kashmir(hereafter Kashmir) – parties which have all demandedmaximum autonomy within the Indian federation. TheBJP government has skillfully maintained on the onehand an ideological association with the sangh parviar,and on the other a political alliance with regionalparties, ensuring its political power and support is

maintained while moderating its ideological uniformity.In order for India to expect an equal partnership withCanada (or any other Western democracy), the BJPgovernment cannot allow India’s secular credentials tobe in doubt.

What follows is a discussion of Canadian foreign policytoward India along three related fronts which I believewill define the policy context for the foreseeable future:economics, the diaspora, and security.

THE ECONOMIC FRONTThe world’s seventh-largest and second-most-populouscountry, India has long been considered a land ofunrealized potential. During the last decade, India hasundertaken sweeping economic reforms with far-reaching consequences. In the 1980s, annual GDPgrowth averaged 5.4%; from 1992 through 2001 thisfigure rose to 6.4%, exceeding countries like Brazil andthe Philippines. However, growth still undershot mostestimates due to the poor performance of the agriculturalsector, which grew at only 0.2%: it contributes toapproximately 30% of Indian GDP, and more than two-thirds of India’s population depend on it for theirlivelihood. Nevertheless, the state’s strategy of directattack on poverty through alleviation programs,pursued since the mid-1970s, has yielded promisingresults, reducing the poverty ratio from 54% in 1993 to35% in 2000. Similarly, India has improved its rank inthe UNDP’s HDI listing, moving from the “low HDI”category to the “medium HDI” category.

India has also fared well in stabilizing its inflation rateat 4%, substantially lower than rates reported inIndonesia (8%) or South Africa (6.8%). Meanwhile, theIndian economy is becoming increasingly integratedwith the global economy. Exports continued rising in2000-2001 thanks to continuing trade liberalization,including tariff reductions and greater openness toforeign investment in export-intensive sectors likeinformation technology. FDI inflows amounted to US$4billion in 1999 and US$4.5 billion in 2000. Foreign

CANADA AND INDIA:BROADENING AND

DEEPENING THE RELATIONSHIP

– 7 –

exchange reserves showed a healthy increase fromUS$38 billion in 1999-2000 to US$43.5 billion at theend of June 2001. Consistent with its earlier economicliberalization policies, the government launched asecond set of economic reforms in the 2001 budget.

Nevertheless, there are persistent concerns that Indiahas not fared as well as China in terms of globalintegration. While both enjoyed similar shares of worldtrade in the 1970s (less than 1%), China had dramaticallysurpassed India by 2000, garnering a share of 4%compared to India’s 0.7%. In an essay last year inEconomic and Political Weekly, Sanjaya Baru argued thatChina’s economic performance had given it a strategiccapability which India had not yet acquired:

“China has used its economic and trading power tobuild strategic relationships with all major powers and,equally importantly, with each one of her Asianneighbours from the Central Asian republics in the westto Japan and Korea in the east and ASEAN in the south.For India to be able to restore the balance within Asia itwill not only have to pursue faster economic growthand domestic economic modernization, but also increaseits share of world trade and widen its economic linkswith the Eurasian landmass as well as with the trans-Atlantic and Asia-Pacific economies.”1

In December 2002, Finance Minister Jaswant Singhunveiled the country’s maiden mid-year economicreview, suggesting several measures to bolster growth.In addition to labour reforms, rationalization ofgovernment support for grain prices, reductions infertilizer subsidies, and state divestment of public-sectorunits, he announced a renewed push for FDI. This lastmeasure was seen as urgently needed since FDI for thefirst six months of the fiscal year had been US$3.6billion, well below the projected annualized figure ofUS$10 billion. India’s economic reforms are now likelyto endure and deepen. For example, the 2003 budgetpresented by Singh on 28 February, carries forward a“growth-oriented agenda” and presents proposals for

financial liberalization, allowing FDI of up to 74% inprivate Indian banks (an increase from 49%) as well asthe merger of private banking companies withnationalized banks.

Canada has not taken great advantage of India’sliberalization policy. While the US has emerged as India’slargest trading partner, Canada has lagged far behind.As Arthur Rubinoff points out, “In 1998 Canada’s exportsto India were just 0.1% of its world exports, whileCanada’s imports from India were a mere 0.3% of itsworld imports. Canada ranked 17th among foreigninvestors in India with only a 1.4% share. By the sametoken, India’s exports to Canada were only 1.6% of itstotal exports, and its imports from Canada were only0.8% of its total imports.”2

For decades Indian policy-makers have felt constrainedby the tradeoff between economic growth and povertyreduction through redistribution. It is becomingincreasingly clear from the Chinese and Indianexperience that, in large complex economies, growthand prosperity will exhibit pronounced regionalspecificities: i.e. there will be concentrated pockets ofextraordinary economic growth contrasted with regionsof relative stagnation. There is no single India. Rather,there are a number of regions, states, and cities withstrong economic prospects which differ significantlyfrom one another, with which investors have tofamiliarize themselves. Gradual deregulation of theIndian economy has been accompanied by competitionamong states to secure investment (especially fromoverseas) in manufacturing. This has exacerbatedregional imbalances and created have- and have-notstates. The “big three” of Maharashtra, Gujarat, andTamil Nadu account for approximately 40% of all valueadded in manufacturing. The success of these three inattracting foreign and domestic investment has dividedIndia into “forward” and “backward” states: thewestern and southern parts of the country generallyencompass forward states, while the eastern andcentral parts encompass backward states, particularly

– 8 –

Assam, Bihar, Madhya Pradesh, Orissa, and Rajasthan.Thus, the country is being parted along a diagonal axis,mimicking a trend seen elsewhere in the developingworld. As CT Kurien has shown, in every economic andhuman development indicator (education, privateinvestment, social development, per-capita income,poverty level, infrastructure spending) the forward statesfare much better than the backward ones.

If Canada does not want to be shut out of this hugemarket, its foreign policy will have to focus intensivelyon gathering business intelligence and informationabout the loci and particularities of the Indian economicphenomenon. From the point of view of trade, finance,and investment, Canada must behave as though it isdealing with several distinct rapidly-developingcountries under the umbrella of a larger entity. Providinga gateway to the enormous number of availableopportunities must be a priority of Canada’s commercialdiplomatic apparatus. Indeed, the notion that interactionamong nations is not merely a question of state-to-state relations but of market-to-market relations as wellappears to be increasingly true.

THE INDIAN DIASPORAThere are an estimated one million Canadians of Indianorigin – nearly one in thirty. After China, India is theleading source of immigrants to Canada. In addition toconstituting a strong socio-cultural bond between thetwo countries, the diasporic community has the potentialto improve economic links. Indeed, the strengtheningof bilateral relations should be predicated on theassumption that Indo-Canadians will foster deeper andbroader people-to-people contacts.

Foreign remittances from NRIs have been a significantsource of revenue and economic growth for India.According to one estimate, between US$12 billion toUS$15 billion of its US$70 billion in foreign exchangereserves comes from NRI remittances. At present, thegovernment is trying to facilitate collaboration withNRIs by converting remittances into investments and

taking advantage of the human resource they represent.In January 2003, the Ministry of External Affairs joinedwith the Federation of Indian Chambers of Commerceand Industry to organize Pravasi Bhartiya Divas, thefirst-ever major conference to consult with prominentmembers of the Indian diaspora. Prime Minister Vajpayeeinformed delegates that during the forthcomingbudget session of Parliament, the government intendedto introduce legislation allowing NRIs to hold dualcitizenship. This decision was based on therecommendation of a committee established in 2002under the chairmanship of India’s former highcommissioner to Britain LM Singhvi. It found that therewere persistent demands from overseas Indians(particularly those in North America and Europe) fordual citizenship. The 1955 Citizenship Act stipulatesthat a person loses their Indian citizenship if theyvoluntarily become citizens of another country. Initially,the proposed law would only apply to citizens of thosecountries who practice reciprocity: the US, the UK,Canada, Australia, New Zealand, Singapore, and a fewEuropean states. The government is also proposingthat dual citizens not be double-taxed in India. Theunderlying objective is to facilitate investment by NRIsin areas such as trade and tourism, with Delhiultimately hoping the diaspora will contribute to thecountry’s social, economic, and technologicaldevelopment.

There is some apprehension that Indian intentions ingranting dual citizenship are garish. For one, the newlaw would allow the buying and selling of propertywithout having to obtain a visa: only a “PIO card”would need to be issued. Further, North America andBritain are major sources of funding for the BJP, and itis possible that this legislation was influenced by suchconsiderations. Still, as Ottawa has recognized, itappears that people-to-people relations provide a realopportunity for strengthening ties between the twocountries. The Indian diaspora in Canada may be lessorganized and influential than its US counterpart atpresent, but its weight is increasing: there are now

CANADA AND INDIA:BROADENING AND

DEEPENING THE RELATIONSHIP

– 9 –

many legislative members of Indian origin, and lobbygroups such as the Canada-India Business Council andIndo-Canada Chamber of Commerce are gainingmomentum. However, the preponderance of lobbyingactivity on Indo-Canadian relations to date has beencarried out by Punjabi (Sikh) and Kashmiri (Muslim)constituencies who support secessionist movementsand are hostile to Indian government interests.

This is almost certainly about to change. There is a strongcorrelation between lobbying activity and an immigrantgroup’s professional integration into the mainstream.That, in turn, reflects their level of educationalachievement. At present, Canada’s Indian immigrantcommunity is virtually polarized into two categories:highly-educated professionals and unskilled workerswith less than a grade-five education. Because educationis so highly valued in all segments of the Indiancommunity, we can expect the next generation of Indo-Canadians to enjoy a stronger and more homogeneouseducational and professional profile. As this happens, itis almost inevitable that the community’s lobbyingefforts in favour of closer and more positive bilateralrelations will expand and intensify. It would thus seemprudent for Canadian policy-makers to take this trendinto account and, at a minimum, lay the earlygroundwork for adapting to potential changes in thedomestic foreign policy context. It is encouraging tosee, for example, that as a result of the PIO conferencein India, Canada has diverted the attention of theFocus India group toward exploring ways in which theIndian diaspora can foster co-operation between thetwo countries.

THE SECURITY FRONTControlling cross-border terrorism is currently theprimary focus of India’s bilateral and multilateralrelationships. To this end, the Ministry of ExternalAffairs recently set up a counter-terrorism division tocoordinate its diplomatic efforts. Following the eventsof 11 September 2001, South Asia has returned toprominence in Western security and foreign policy

thinking. India’s interests, particularly in the fightagainst international terrorism, have increasinglyconverged with those of the United States. Consequently,it is time for Canada to reconsider what constitutes anappropriate trade-off between anti-proliferation on onehand, and anti-terrorism and South Asian economicdevelopment on the other.

India’s two major security concerns are the secessionistmovement in Kashmir and cross-border terrorismsupported by Pakistan. In 1989, the Kashmir Valleybecame engrossed in a nationalist mass-movementthat was accompanied by wide-scale politicalinsurgency. This movement arose against the backdropof India and Pakistan’s irreconcilable positions on theissue: while Delhi considers Kashmir an integral part ofIndia, Pakistan considers it a disputed territory, andneither is likely to budge from its stance. The reasonsunderlying secessionism appear to stem from internalIndian politics and the government’s relationship withthe people of Kashmir. These include (1) thegovernment’s de facto reversal of its constitutionalposition on the status of Kashmir; (2) Kashmir’s slow yetsteady integration in areas other than communications,foreign affairs, and defence; (3) India’s promise of alocal plebiscite to determine the state’s future status(a promise proclaimed in the UN Security Council);(4) the existence of a corrupt local regime based onpatronage politics; and (5) the persistence of a distortedand a corrupt electoral process.

Pakistan’s active political and military intervention inthe Kashmir issue has also impacted the secessionistmovement and the Indo-Pakistani relationship (twowars, after all, were fought over the state in 1947-48 and1965). Despite international pressure on Pakistan since11 September, cross-border terrorism has continued.While several parliamentary and assembly electionshave been held in the Valley (the most recent, in 2002,are considered by many the fairest yet), Kashmir is stillin the thrall of jehadi groups such as the HizbulMujahideen (both the local and Pakistan-based

– 10 –

contingents), the Jamiat-ul-Mujahideen (a breakawayfaction of the Hizbul), and the Pakistan-sponsoredLashkar-e-Taiba and Harkat-ul-Mujahideen (the latter,initially known as Harkat-ul-Ansar, changed its nameafter the kidnapping and murder of five foreign touristsin Pahalgam). The fidayeen suicide attack is one of thenewest and more successful strategies adopted bythese groups. The jehadi have continued killingcivilians (particularly Hindus) and security personnelin both the Valley and Jammu regions. Indo-Pakistanirelations reached their nadir after militants stormedthe Indian Parliament in December 2001. Indiaaccused Pakistan-based jehadi for this attack.Although Islamabad denied any involvement, the twocountries suspended travel and diplomatic ties andthreatened to go to war.

Only recently has there been something of a thaw inthese hardened relations. During a visit to the Valley inApril 2003, Prime Minister Vajpayee extended a hand offriendship to Pakistan and renewed his offer of talkswith both Kashmiri separatists and Pakistan. Vajpayeehas expressed special eagerness to enter intonegotiations with President Pervez Musharraf andsuggested that he would be willing to make seriouscompromises on Kashmir provided Pakistan createdgrounds for mutual confidence. While the softening ofIndia’s attitude and peace effort is viewed in someIndian circles as a pre-election strategy (Vajpayeewould relish going to the polls with a Kashmirsolution in hand), the Prime Minister’s efforts havereceived support in both India and Pakistan. India’sopposition leader, Sonia Gandhi, has extended theCongress Party’s full support. Similarly, during arecent visit to India, the hardline leader of Jamait-Ulema-Islami, Fazal-ur-Rehamn, declared thatdialogue, not violence, was the solution to theKashmir problem (much to the dismay of severalmilitant groups operating in the Valley). He favoursholding talks on this issue within the bilateralframework of the 1972 Shimla Agreement. India’srecent announcement that it intends to participate in

the January 2004 SAARC summit in Islamabad isanother encouraging sign.

While the latest developments are no doubt positive,tensions between India and Pakistan remain very real.Both countries are committed to their nuclearprograms and this external threat adds substantially toIndia’s security problems. Besides two wars overKashmir, India and Pakistan clashed over EastPakistan’s independence in 1971 and fought a borderconflict in 1999 (never mind countless smallerunresolved skirmishes). India’s preoccupation withinternal security is reflected in the growing volume oflegislation and constitutional amendments curbingindividual freedoms. These include the 42nd

Amendment (1976), the National Security Act (1980),the Terrorist-Affected Areas Special Courts Act (1984),the Terrorist and Disruptive Activities Act (1987), andthe Defamation Bill (1988) restricting press freedom.Such laws have in turn fostered the growth andwidespread use of paramilitaries. While the size of theregular armed forces has remained steady since 1965at about 1.3 million, the number of paramilitary forceshas increased rapidly to about 1.5 million. Theseinclude the Provincial Armed Constabulary, the BorderSecurity Force, the Central Reserve Police Force, theAssam Rifles, the National Security Guards (an eliteforce, created out of the army, used in the GoldenTemple operation of 1988), and the Rashtriya Rifles(formed in 1993 to deal specifically with internalsecurity problems). India has used these forces tosuppress secessionist movements in Punjab, Assam,and Kashmir. Not only have their members beenaccused of excessive violence and human rightsviolations like torture and rape, but they haveconsistently sided with Hindus. For example, the PACwas involved in the massacre of Muslims in Moradabadand Merrut in Uttar Pradesh, while Hindu temples inKashmir are now manned by members of the BSF.

Since its establishment in 1985, SAARC has beenineffective in initiating dialogue between the nations of

CANADA AND INDIA:BROADENING AND

DEEPENING THE RELATIONSHIP

– 11 –

South Asia. While it has pursued cooperation inuncontroversial social, economic, and cultural areas, ithas refused to place discussion of political and securityconflicts on its agenda and avoided other contentiousbilateral matters. Meanwhile, Pakistan-based jehadigroups have continued attacking civilian andgovernment targets in Kashmir – this despite PresidentMusharraf’s efforts, prompted by heavy US pressure, tocontrol domestic Islamic fundamentalism and put astop to cross-border terrorism. During the past year,India and Pakistan have also stepped up their missilerivalry. On 8 January 2003, Pakistan inducted theGhauri-I (Hatf-V), a homegrown medium-range missile,into its forces. The very next day, India responded bytesting the Agni-I, a missile with an 800-kilometre rangespecifically designed to hit targets in Pakistan. Delhi’s2001 budget raised total defence spending to US$14billion, 14% higher than levels proposed the previousyear. Although a recent Regional Security Assessmentconducted by Jane’s Information Group pointed outthat India’s spending had remained modest comparedto other countries with major security risks, thisdouble-digit increase is alarming given continuingIndo-Pakistani tensions.

In January 2003, in order to manage its nuclear assetsand operationalize its nuclear deterrent policy, Indiaunveiled a new two-tiered Nuclear Command Authorityand created the position of chief of Strategic ForcesCommand – a structure that clearly delineates authorityover India’s arsenal. While this initiative unambiguouslyplaces decisions over nuclear matters in the hands ofcivilian authorities, it also, for the first time, adds thephrase “nuclear attack on Indian territory or Indianforces anywhere” as a qualification to the no-first-usepolicy. In light of these developments, Praful Bidwaihas aptly concluded that:

“The present situation is completely unacceptable.India and Pakistan are both behaving like rogueelephants or bullies bent on destroying each other. Ifthey can not restore normal diplomatic relations,

reduce the dangerous high level of tension whichfollows their costly 10-month-long confrontation, andnegotiate nuclear risk-reduction, then their conductwould warrant external intervention to draw and keepthem apart – perhaps through a multilateral bufferforce or some other means. But their leaders must notbe allowed to hold the sword of mass exterminationover the heads of more than a billion people.”3

If Canada truly wishes to re-engage India on security, itwill have to be within the new global framework forcontrolling terrorism. Fortunately, Canada was amongthe first countries to establish a relationship with Indiaon this matter: a Canada-India Working Group onCounter-Terrorism has existed since 1997, convened tocollaborate on the Air India investigation. This Groupcould provide the starting point from which to amplifythe scope of cooperation. Meetings, which rotatebetween India and Canada, have seen the activeparticipation of several government departments andagencies on both sides; in December 2002, the Groupheld its fifth meeting in New Delhi. Expanding activityon this front would allow Canada to accomplish twogoals: make direct progress in controlling terrorism,and obtain indirect leverage in the resolution of theKashmir dispute. Although India considers Kashmir aninternal matter and has strongly resisted externalpressure, the “war on terror” has placed the Kashmirdebacle front-and-centre on the international stage.This makes the latter goal entirely attainable. WhileIndia resists multilateral interference, anti-terrorismcooperation may make India more amenable tobilateral consultation on Kashmir. Canada would not beable to directly confront India’s position but it couldstill play an active role as, perhaps, an honest broker inthe state’s electoral process.

ACKNOWLEDGEMENTS

Paper Author: Reeta Chowdhari Tremblay, ChairDepartment of Political Science, Concordia University

Foreign Policy Dialogue Series Editor: Yuen Pau WooAsia Pacific Foundation of Canada

Associate Editor: Timothy EdwardsAsia Pacific Foundation of Canada

We would like to thank participants at the Asia Pacific Foundationof Canada’s Roundtable on the Foreign Policy Dialogue in Ottawa,27 March 2003, for their useful comments and suggestions.

THE AUTHOR

Reeta Chowdhari Tremblay (Ph.D,Chicago) is Professor of PoliticalScience at Concordia University, and has served as the DepartmentChair since 1998. Dr. Tremblay is considered North America’sleading authority on the Kashmir secessionist movement andIndian federalism, and is frequently called upon by Canadianpolicy-makers to consult on regional matters. She is the authorof State Autonomy and Public Policy in India (1991), the editor ofthree volumes on South Asian relations, and has written thirtyarticles and book chapters. She sits on the editorial boards ofPacific Affairs and India’s Malviya Peace Institute, and is thePresident of the Canadian Council of Area Studies Learned Societies.Dr. Tremblay’s current research centres on identity-based politics,public policy (including growth and equity, women and self-government, and peace and conflict resolution), and popular cultureand cinema.

NOTES

1 Sanjaya Baru, “Strategic Consequences of India’s EconomicPerformance.” Economic and Political Weekly, 37:26(29 June 2002).

2 Arthur Rubinoff, “Canada’s Re-Engagement with India,”Asian Survey, 42:6 (November/December 2002).

3 Praful Bidwai, “Nuclear South Asia: Still on the Edge,”Frontline, 20:2 (18-31 January 2003).

The views expressed in this publication do not necessarilyreflect those of the Asia Pacific Foundation of Canada.