At a time when China is busy in extending its ‘String of Pearls’ in the Indian Ocean with an intention to encircle India, New Delhi has worked out an alternate strategy to checkmate Chinese ambition by inviting Trans-Atlantic powers in the region. President Xi Jinping on his recent visit to Pakistan signed a $46 billion agreement for 3,000 km China-Pakistan Economic Corridor (CPEC) which will connect Gwadar in Pakistan to China's western Xinjiang region. This CPEC will be a network of roads, railway and pipelines between the long-time allies and would give Beijing direct access to the Indian Ocean. China’s “all weather” friend, Islamabad has thus become its centre of “pivotal importance”.

Comparatively, New Delhi’s long cherished dream project of using Iran’s Chabahar port for connecting with Afghanistan and beyond to Central Asia and Europe and thus isolating Pakistan has not progressed well, given the difficulties of implementation owing to sanctions imposed on Tehran. India became involved in the project in 2002 and since then the progress has been tardy. After the new government led by Prime Minister Narendra Modi assumed office, India in October last year decided to invest $85.21 million in developing the port. It also decided to invest an annual revenue expenditure of $22.95 million to support the efforts. 

However, sensing the growing presence of Beijing’s “String of Pearls” in Pakistan, Sri Lanka and Myanmar, Prime Minister Modi has rightly favoured the involvement of Trans-Atlantic powers to stem Chinese ambition in the region. The major takeaway from his recent Trans-Atlantic tour to France, Germany and Canada was to raise the India-Canada bilateral relations to the level of strategic partnership and seeking Canadian involvement in defence research technology. He appreciated Canada’s keenness for Observer status at SAARC.

Prime Minister Modi also urged France to enhance its cooperation in the maritime domain, particularly in the Indian Ocean region. India intends to work closely with France in realising the objectives enshrined in the Charter of Indian Ocean Rim Association in which Paris enjoys Observer status. Prime Minister Modi and President Francois Hollande stressed the importance of joint military exercises between their armies, navies and air forces. French Carrier Battle group will participate in the joint naval exercise, Varuna, in the Indian Ocean in the coming weeks.

India acknowledges the US “pivot” and “rebalancing” game in the Asia-Pacific. The need for US presence not only in the Pacific but also in the Indian Ocean was emphasised in the joint statement during the last visit of President Obama. There was also talk of expanding the India-US-Japan trilateral. India also has bilateral military exercises with some countries in the Asia-Pacific.

The most important deal struck in matters of security with France during Prime Minister Modi’s visit was to pave the way for acquiring 36 Rafale jets in fly-away condition for the Indian Air Force. Prime Minister Modi and President Hollande agreed to ease the process through an Inter-Governmental Agreement (IGA) that will be on terms better than those offered by Dassault Aviation in the course of over three years of negotiations. It was agreed that the Rafale jets would be delivered “in time-frame that would be compatible with the operational requirement of IAF and that the aircraft and associated systems and weapons would be delivered on the same configuration as had been tested and approved by IAF and with a longer maintenance responsibility by France.”

According to India’s Defence Procurement Procedure (DPP) 2013, purchases under IGA need not follow the standard procurement procedure and standard contract document but can be based on mutually agreed provisions. It now depends upon how the IGA would be worked out and the terms to be stipulated relating to pricing, delivery schedule, training and maintenance. So far Modi has sought to address the urgent needs of the Indian Air Force by seeking to cut the delay and hoping for better terms. His much touted concept of ‘Make in India’ and technology transfer are not addressed in this agreement. But the eagerness to purchase 36 Rafale jets right away is a bold step keeping in view the low allocation for capital expenditure in the current year’s Defence Budget which is not sufficient for mega deals in pipeline like tanker aircraft deal with Airbus, two helicopter contracts with Boeing and Rafale fighter deal. Modi did visit the Airbus Facility at Toulouse when he was in France.

Another major takeaway from Modi’s France visit is the agreement between L&T and the French company AREVA for reducing the cost of Jaitapur nuclear power project by increasing localization in the spirit of ‘Make in India’, transfer of technology and development of indigenous nuclear energy industry in India. An agreement was signed between NPCIL and AREVA for early conclusion of techno-commercial study for construction of six 1650 Mwe nuclear power plants so that all parties – AREVA, Alstom and NPCIL – can firm up their price and optimize all provisions for risks.

In Canada an agreement was inked for long-term supply of uranium to energize nuclear power plants in India. Canada also agreed to share its pressurized heavy water reactor technology with India. Both France and Canada have supported India’s membership to four multilateral export control regimes and have assured India of intensifying their cooperation in space technology.

Prime Minister Modi got assurances of cooperation from all three Trans-Atlantic countries for his pet projects – modernization of railways, including semi-high speed trains, renewable energy projects, smart cities, heritage cities, skill development, Ganga cleaning among others. Major agreements were not signed with Germany as Chancellor Merkel is expected in India for the third Inter-Governmental Consultations (IGC) in October this year. During his visit to Canada, Modi did his best to rope in Prime Minister Harper to address India’s security concerns and nuclear energy security. He has thus laid the template for India’s cooperation with Trans-Atlantic countries for addressing security concerns in the Asia-Pacific and balancing the growing ambitions of China in the region.