9.  BUILDING BRIDGES - EXTERNAL AFFAIRS

9.1 EXTERNAL AFFAIRS

9.1.1 Overview: The past three years have been eventful for India's emerging role and status in the comity of nations. India's foreign policy has adapted to the rapidly changing global environment, while at the same time correlating with the remarkable changes taking place within India itself. India's engagement with the rest of the world community has grown notably, as it has become ever more important to ensure a peaceful and supportive international environment conducive to India's development goals. The UPA Government is determined to maintain India's independent foreign policy, built on national consensus and based on supreme national interests. To this end, the Government has accorded high priority to closer political, economic and cultural ties with India's neighbours and is expanding its network of international relationships, while preserving solidarity with traditional allies and strengthening new partnerships.

9.1.2 SAARC: The 14th SAARC Summit was successfully hosted by India in April 2007. At the Summit, Afghanistan was admitted as the eighth member of SAARC and for the first time, five observers - China, Japan, European Union, the Republic of Korea and the US - attended. There was a new sense of determination and purpose among the leaders of the member countries at the Delhi Summit. The Summit agreed to make operational the SAARC Development Fund, establish the South Asian University, create the SAARC Food Bank and set up the SAARC Arbitration Council. The Summit recognised the importance of physical, economic and people-­to-people connectivity for smooth flow of goods services, people, technologies, knowledge, capital, culture and ideas within South Asia and directed the Inter-Governmental Group of Transport to identify and develop sub-regional and regional projects based on the prioritised recommendations of the SAARC Regional Multimodal Transport Study and develop appropriate regional agreements. The SAARC Agenda for Culture was launched. It was decided that annual SAARC Festivals would be institutionalised. The Summit also called for urgent conclusion of a Comprehensive Convention on International Terrorism.

A meaningful milestone was achieved earlier with SAFTA coming into force from January 2006. India has followed up by accepting asymmetrical responsibilities and opening up its markets to less developed South Asian neighbours without insisting on reciprocity, committing itself to allowing duty-free access to India before the end of 2007 and further reducing the list of sensitive items. The Summit directed finalisation of agreements in the services sector, investment promotion and protection, and the harmonisation of customs procedures as well as technical and phytosanitary standards. The SAARC Standard Coordination Board has already been set up as a precursor to the SAARC Regional Standards Body. The Summit called for early development of a road map for a South Asian Customs Union and a South Asian Economic Union in a planned and phased manner. During India's chairpersonship of SAARC in the year ahead, the agenda endorsed by the Summit would be taken forward.

9.1.3 Pakistan: With Pakistan, the Government has pursued a policy of constructive engagement to establish peaceful, friendly and cooperative relations. The dialogue process is predicated upon the 6th January 2004 commitment of the President of Pakistan not to permit any territory under Pakistan control to be used to support terrorism. The Composite Dialogue made some progress over the past year with the signing of an agreement on Reducing the Risks from Accidents relating to nuclear weapons and a revised Shipping Protocol. India has the initiative of opening of five points on the LoC for movement of people, release of prisoners and fishermen, extending tariff concessions under SAFTA to Pakistan, starting of cross-LoC and cross-border bus services and the Khokrapar-Munnabao rail service. Joint Anti-Terror Mechanism has been set up during the Foreign Secretary level talks in November 2006 and will test Pakistan's resolve and commitment to combat cross-border terrorism. Efforts are under way to start the Srinagar-Muzaffarabad truck service across the LoC for trade. The two governments have already agreed in principle to expand the list of pilgrimage sites under the 1974 Protocol. However, the Government remains concerned over infiltration and cross-border terrorism, and the dialogue process is predicated on Pakistan fulfilling its commitment not to permit any territory under its control to be used to support terrorism in any manner. During the meeting of the Prime Minister of Pakistan with our Prime Minister on the sidelines of the 14th SAARC Summit held in April 2007, the Pakistani Prime Minister discussed a wide range of bilateral issues. Both the Prime Ministers agreed to review the status of each other's citizens held prisoner in the neighbouring country.

9.1.4 Other South Asian neighbours: Our relations with Afghanistan reached a new height as India, along with Afghanistan, co-hosted the second Regional Economic Cooperation Conference on Afghanistan in November 2006. The decisions of this conference will provide templates for regional cooperation and identify opportunities for mutual benefit of all the countries in the region. The UPA Government has reiterated India's full support to the restoration of multi-party democracy in Nepal and the success of the peace process. An economic assistance package of Rs. 1,000 crore was offered to Nepal. Similarly, the UPA Government is interested in a democratic, stable and prosperous Bangladesh. It has been working on facilitating legitimate trade and commerce across the border with Bangladesh. On the ethnic issue in Sri Lanka, India has conveyed to the Sri Lankan side at high political levels the need for a negotiated, political settlement that is acceptable to all sections of Sri Lankan society. Bilateral trade as well as Indian investment and tourist influx in Sri Lanka have reached new highs, which are sought to be consolidated through the negotiations on a Comprehensive Economic Partnership Agreement that will build on the success of the Free Trade Agreement. The 1949 Friendship Treaty with Bhutan has been upgraded. The Government has approved an enhanced package of assistance to Bhutan for its Ninth Plan (2002-08) amounting to a sum of Rs. 2,610 crore.

9.1.5 United States: The transformation in the Indo-US bilateral relationship is being consolidated through implementation of existing initiatives and broadening of the bilateral agenda, which now includes strategic and security issues, defence, counter-terrorism, science and technology, health, trade, space, energy, maritime cooperation and environment. The visit of the US President to India in March 2006 underscored our common commitment to carry this partnership forward. Several steps were taken by both sides to implement understanding on resumption of civilian nuclear cooperation that was reached in July 2005. India finalised its plan for separation of civilian and defence nuclear facilities, while the US Government amended its domestic laws to legally enable it to resume full civilian nuclear cooperation with India. Both sides had started negotiations on a bilateral agreement for implementation of the understanding of 18th July 2005 and the March 2006 Separation Plan.

9.1.6 Europe: The highlight of the rapidly intensifying India-EU relations was the 7th Summit at Helsinki in October 2006, at which both the sides agreed to launch negotiations on a broad-based India-EU trade and investment agreement. Bilateral initiatives have been cemented with a large number of EU member countries.

9.1.7 Russia: Trilateral meetings have been held between India, Russia and China at the summit and foreign minister level in July 2006 and February 2007 respectively to discuss international issues and trilateral cooperation among the three countries. With Russia, India's ties expanded in the areas of energy, high technology, defence and space. The Russian President was the Chief Guest at our Republic Day celebrations this year. A meeting was held between the Russian President and India's Prime Minister in 2006 and a number of Cabinet-level exchanges took place.

9.1.8 China: India-China relations witnessed sustained and comprehensive development. The visit of the Chinese President to India in November 2006 strengthened this process. The two countries agreed on a 10-pronged strategy, as reflected in the Joint Declaration, to add greater content to their strategic partnership and to develop an action-oriented template for future development and diversification of relations. Our bilateral trade with China has expanded substantially and has crossed US$ 25 billion mark. The signing of the Agreement on Investment Protection and Promotion during the year will facilitate two-way investments flows. Cross-border trade through the land route has opened at Nathu La. New consulates have been opened in Kolkata and Guangzhou. The process of confidence building in border areas has been strengthened with border personnel meetings at a second point in the Eastern Sector (viz., Kibithu-Damai) becoming operational.

9.1.9 Japan: In recent years, there has been a marked upswing in Indo-Japan relations, which were elevated to a Global and Strategic Partnership during the visit of the Prime Minister to Japan in December 2006. Both sides also agreed to launch the Special Economic Partnership Initiative. The main element include the Delhi-Mumbai industrial corridors, setting up of multi-product SEZs / clusters, Free Trade and Warehousing Zones, encourage Japanese investment in India, Japanese support for Government initiatives on rural business and industrialisation, enhanced cooperation in the financial sector, etc. The dynamic growth in bilateral relations has been reflected in several high level visits, positive momentum in bilateral trade, increase in Japanese investment into India and enhancement of defence and security cooperation. Discussions have begun on a Comprehensive Economic Partnership Agreement to conclude it as soon as possible, preferably within two years.

9.1.10 The East: In pursuance of the 'Look East' Policy, India has developed multi-faceted relationship with countries in the South East Asia and South Pacific including Australia and New Zealand. The Prime Minister participated in the India-ASEAN and East Asia Summits held in Philippines in January 2007. It was agreed at the India-ASEAN Summit that efforts would be made to finalise India-ASEAN FTA by July 2007. India's trade with most of counties in the region has shown significant improvement during the year. India has continued development assistance in the Indo-China and the Pacific islands, extended humanitarian assistance to Indonesia and the Philippines in the aftermath of natural disasters, and undertook defence cooperation and cultural exchanges. Singapore, China, Japan, Korea and other countries have shown great interest in the Nalanda Project, which seeks to create an Asian centre for inter-civilisation dialogue in India.

9.1.11 West and Central Asia, Africa, Latin America and the Caribbean: The Government has been working to further deepen and diversify India's relations with countries in West Asia, Central Asia and Africa. The first round of negotiations on a Free Trade Agreement between India and the Gulf Cooperation Council countries has been held. India donated emergency humanitarian assistance of Rs. 10 crore each to Palestine and Lebanon and, in the wake of the crisis in Lebanon evacuated around 1,800 Indian nationals from Lebanon, besides nationals of neighbouring countries. India has provided direct assistance to a number of countries in response to humanitarian emergencies as well as in the context of longer-term development projects. Multi-million dollar worth of concessionary lines of credit for infrastructure development projects were extended. India continued to be one of the largest contributors to peacekeeping forces in Africa. The Indian contribution to UN peacekeeping has increased three-fold over the last two years to more than 9,000 troops currently. The Pan-African E-Network Project has rolled out to enable the use of Indian expertise in areas like IT, education and healthcare for delivery of affordable distance education and medical services in remote locations in Africa. Dialogue at the highest political levels with South Africa was sustained through bilateral interactions between the Prime Minister and South Africa's President during the 1st India-Brazil-South Africa (IBSA) Summit at Brasilia in September 2006 and during the Prime Minister's visit to South Africa in September-October 2006. During the IBSA Summit, five trilateral agreements were signed. India has intensified its engagement and expanded its trade and investment with the nations of Latin America and the Caribbean. India participated in the NAM Summit at Cuba in September 2006, reflecting India's commitment to promoting South-South cooperation.

9.1.12 Trade and economic diplomacy: A Trade and Economic Relations Committee chaired by the Prime Minister has been set up for evolving the extent, scope and operational parameters of our economic relations with other countries in a coordinated and synchronised manner. The Committee has reviewed and guided free trade and regional trade agreements, comprehensive economic cooperation agreements, WTO negotiations, bilateral trade and investment issues, etc. Our Framework Agreement for Comprehensive Economic Cooperation with the ASEAN involving a Free Trade Area has been usefully complemented by bilateral and sub-regional attempts towards economic cooperation, including bilateral agreements with Thailand and Singapore. Considerable stress has been made on economic diplomacy for providing increased access to international markets, sources of energy and advanced technologies as well as harnessing higher levels of FDI, especially in critical areas such as infrastructure. Recognising that our economic growth is closely linked to that of other countries, India has strengthened institutional linkages with economic groupings such as SAARC, ASEAN, BIMSTEC, Mekong-Ganga Cooperation, IBSA, G-15, G-8, Indian Ocean Rim and the East Asia Summit. India has also placed a significant role in the WTO and other international economic institutions. The Government has adopted an overall liberal approach in the matter of grant of traffic rights under bilateral agreements with various foreign countries. Traffic rights have been enhanced through signing of agreements with the US, the UK, Germany, Canada, Japan, Russia, Australia, New Zealand, China, Netherlands, France, Belgium, Singapore, Mauritius, the UAE, Thailand, Italy, Taiwan, Finland, Maldives, Tanzania, Sri Lanka, Kuwait, Span, Oman, Egypt, Sweden etc. This will not only lead to more flights and better connectivity from these countries to India but also provide more commercial opportunities to all operating carriers.

9.1.13 Development cooperation: An International Development Cooperation Agency is being established to implement various programmes of development cooperation extended by India to other nations in a focused and timely manner.

9.1.14 Consular, passport and visa services: It is proposed to open new passport offices at Amritsar, Dehradun, Raipur, Shimla, Coimbatore and Madurai in 2007. A number of measures have been taken to make the passport issue system simpler and speedier through measures like decentralisation and online applications. Indian embassies in the Gulf region have introduced provision of free legal aid for Indian workers in order to resolve labour issues. Visa waiver agreements have been entered into with 35 countries. The process of computerisation of passport and visa sections has been completed in almost all diplomatic missions.

9.2 OVERSEAS INDIANS

9.2.1 Overseas citizenship: The scheme for Overseas Citizenship of India has been extended to cover all overseas Indians who emigrated after January 26, 1950. Overseas Citizens have been granted parity with NRIs in respect of facilities in economic, financial and educational fields, with some exceptions, besides lifelong multi-purpose multi-entry visa and exemption from registration with local authorities. Till 2006, over 78,000 online applications had been filed and over 36,000 overseas citizenship registration certificates had been granted.

9.2.2 Voting by NRIs: A bill has been introduced in Parliament to permit Indian citizens outside India who are absent in their ordinary place of residence to get themselves registered in the electoral rolls of the constituency of their ordinary place of residence.

9.2.3 Social security: A Social Security Agreement has been entered into with Belgium, exempting overseas Indians on short-term contracts of up to five years from payment of social security contributions and providing for export of social security benefits for those on long-term contract, after they relocate to India on retirement. The Government has initiated the process for entering into similar agreements with other countries like The Netherlands, Sweden and France. The Government has entered into a bilateral MoU on manpower with the United Arab Emirates on a wide range of issues concerning the protection and welfare of overseas Indian workers, including non-payment or delay in payment of wages, harsh working and living conditions, substitution of contracts, retention of passports, cheating by intermediaries, physical abuse, etc. Conclusion of a similar MoU with Kuwait has been approved, which would facilitate recruitment of manpower, prohibit changes in terms and conditions of employment contracts to the detriment of workers, lay down the procedure for authentication for employment contract place responsibility on employers to arrange the work permits, and protect workers who are otherwise not covered under local labour laws. More such MoU are expected with other Gulf countries, including Bahrain, Saudi Arabia and Oman, as well as with Malaysia.

9.2.4 NRI / PIO university: The UPA Government has approved a policy frame for setting up a university for children of NRIs and PlOs.

9.3 MANAGING BORDERS

9.3.1 Border infrastructure: The UPA Government has engaged proactively with neighbours, improved border management and laid emphasis on development of infrastructure along our borders. With a view to improving infrastructure at the major entry points on our land borders, the Government has approved setting up of the Land Ports Authority of India for overseeing construction, management and maintenance of Integrated Check Posts at identified entry points on our borders with Nepal, Bangladesh, Pakistan and Myanmar. 13 Integrated Check Posts will be constructed.

9.3.2 Border fencing: The work of fencing along the India-Bangladesh border has been given greater focus and priority and an around 2,500 km of the border has been fenced out of total sanctioned length of 3,284 km. Important link roads on our side of the border are being identified for development.

9.3.3 Cross-border services: Srinagar-Muzaffarabad, Rawalkot-Poonch, Delhi-Lahore, Amritsar-Lahore and Amritsar-Nankana Sahib bus services and Khokrapar-Munnabao rail service across the Indo-Pak border / LoC have been made operational. Infrastructure at the Wagah-Attari border is being upgraded.