PSIR Optional (Paper 2 Section B) (India and the Global South) by R.P.Singh Sir

Model Answer

Question #1. The Asia-Africa Growth Corridor

Hints:

• The Asia-Africa Growth Corridor highlights the growing importance of Africa in Indian foreign policy and also signals India's willingness to partner with like-minded countries, such as Japan, in this region.
• India and Japan institutionalised a dialogue on Africa in 2010. During the Africa Development Bank meeting, India unveiled the Vision Document of the Asian Africa Growth Corridor.
• The main objective of the corridor is to enhance growth and connectivity between Asia and Africa.
• The corridor will focus on four areas: Development Cooperation Projects, Quality Infrastructure and Institutional Connectivity, Enhancing Skills, and People-to-People Partnership. Agriculture, health, technology, and disaster management have been identified as the main areas of development cooperation.
• According to the vision document, AAGC will focus on enhancing skills and research and development capacities in Africa.
• It will also strive to develop institutional, industrial and transport infrastructure in the Asia -Africa region. The corridor will facilitate greater people-to-people exchanges amongst the participating countries.
• Experts believe that growth corridor is an alternative model of China's OBOR Model and reflection of institutionalize

India has made it clear that it is not interested in joining China's Belt and Road Initiative, which is seeking to revive the global economy through a 21st century silk road that traverses through Europe, Asia and Africa. Its refusal to participate in the Chinese initiative is due to concerns about sovereignty given that the China Pakistan Economic Corridor (CPEC), a part of the Belt and Road, passes through Indian territory under Pakistan's control. There is no doubt that comparisons will be made regarding the merits of the Indo-Japanese and Chinese initiatives.

Question #2. India's Oil diplomacy in Latin America

Hints:

• Closer cooperation with Latin America holds immense economic potential for India. Latin America’s collective GDP is more than $5 trillion. It has a combined population of more than 600 million, nearly half of which is under the age of thirty. The region constitutes a dynamic, growing and resource-rich part of the world that is witnessing increasing democratization and surging economic growth. These factors helped Latin America attract more $179 billion in FDI in 2013, more than any other region in the world. The profile is remarkably similar to India’s own growth story.
• Trend lines appear to be moving in the right direction within a wide array of sectors. India’s trade with the region has grown from less than $2 billion fifteen years ago, to $46 billion between 2013 and 2014, and includes everything from soybeans to aircraft to minerals. Prime Minister Modi’s home state of Gujarat represents more than 60% of this $46 billion total alone.
• Latin America has also emerged as a key contributor to India’s energy security. India now imports 20% of its crude oil from Brazil, Columbia, Mexico and Venezuela by some estimates. In 2012, India overtook China as the largest Asian buyer of Venezuelan oil. This milestone was no accident. India is one of the world’s largest importers of crude oil. For many years, New Delhi was Iran’s second largest purchaser of Iranian crude, but was forced to curtail its imports as the result of U.S. and U.N sanctions targeting Iran’s lucrative oil industry over Tehran’s nuclear program. New Delhi was compelled to search for alternate energy supplies. Latin America’s vast energy reserves quickly came into sharp focus, enhancing the region’s importance to New Delhi.
• India’s private sector has also invested billions of dollars into Latin America, sharply increasing trade flows and expanding India’s global brand. The country’s leading companies have become a ubiquitous presence in the region. India’s steel giant, Jindal Steel & Power, has invested $2.3 billion in an iron ore mine in Bolivia, the largest foreign direct investment project in Bolivian history. In Trinidad and Tobago, Essar Steel is in the process of constructing a 2.5 million ton steel plant. More than one hundred Indian companies have invested over $12 billion in Latin America across a wide variety of industries, including mining, metals, agriculture, petrochemicals, pharmaceuticals, plastics and plane parts.
• India also constitutes one of the largest suppliers of Information Technology (IT) services to Latin America. In 2002, India’s famed Tata Consulting Services, established a Global Delivery Centre in Montevideo, Uruguay. Of the fourteen Indian companies operating in Argentina, half are focused on IT-related services. According to some estimates, over 35,000 Latin Americans are now employed at Indian IT companies operating in the region. New Delhi is also actively promoting official policies intended to further expand Indian IT services in Latin America.
• The depth and scope of this economic activity in Latin America demonstrates the extent to which the region has arisen as a stable, attractive and viable market for Indian investment.