March 23, 2018

The Iran-Pakistan border is a geopolitical powder keg

The Iran-Pakistan border is a geopolitical powder keg

Dr. Lawrence Sellin

The Iran-Pakistan border contains all the ingredients for a geopolitical explosion – regional rivalries, Sunni-Shia conflicts, ethnic insurgents, espionage, drug smuggling and human trafficking.

China considers the stability of the region so important that it brokered a series of border security meetings between Iran and Pakistan over the past year.

Much of China’s multi-billion-dollar investment in the China-Pakistan Economic Corridor (CPEC) hinges on the commercial viability of the Pakistani port of Gwadar, near the Iranian border, for which it has a 40-year operational lease. Moreover,  CPEC is the regional linchpin of the Belt and Road Initiative, an ambitious plan to connect Eurasia, the Middle East and Africa to China through a series of land-based and maritime economic zones.

Additionally, the planned Chinese naval base on Pakistan’s Jiwani peninsula, even closer to the Iranian border and located at the mouth of the Persian Gulf, is a critical military node in China’s “String of Pearls” facilities designed to dominate the strategic sea lanes in the Arabian Sea and Indian Ocean.

Such ambitions present a direct economic and military threat to India. Commercially, Gwadar competes with joint Iranian-Indian development of the port of Chabahar, just 150 miles to its west. 

According to numerous reports, Saudi Arabia contributes to the instability of the border region by sponsoring virulently anti-Shia Sunni militant groups, such as Jaish al-Adl, who launch attacks on Iran from safe havens in Pakistan. 

Iran retaliates by supporting the Baloch Liberation Front (BLF), an ethnic separatist group, whose sanctuaries and leader, Dr. Allah Nazar Baloch, are claimed to be inside Iranian territory and routinely conduct cross-border operations against Pakistani government targets. Members of the BLF are suspected to be in contact with Iranian intelligence, often through drug lords acting as intermediaries. BLF members are occasionally confused with their anti-Shia counterparts. Some months ago, a BLF team was mistakenly attacked by Iranian border guards. One member, shot in the encounter, was taken to Imam Ali Hospital in Chabahar for treatment, but later died of his wounds. The other team members were subsequently released by Iranian forces.

There are also narco-terrorists groups on the Pakistani side of the border with indirect links to the government in Islamabad. Lashkar-e-Khorasan, a alleged Islamic State affiliate, has been reportedly involved in “cleansing” western Balochistan of Sufi Zikris, Shia Hazaras, Hindus, Christians, Ahahmadis, Sikhs or anyone else who refuses to convert to the extreme form of Sunni Islam. The purported leader of Lashkar-e-Khorasan is Mullah Shahmir Bizenjo, a resident of Turbat, whose cousin is Senator Hasil Bizenjo, a member of the National Party and currently Pakistan's Minister of Maritime Affairs. According to the Daily Beast, one of the drug world's most notorious opium traffickers, also from Turbat, is Imam Bizenjo aka Imam Bheel, a National Party financier, whose son, Yaqoob Bizenjo, served as a member of the Pakistan National Assembly until 2013.

A more ominous portent of Iran-Pakistan border instability, is the return of the “Zainebiyoun” brigade. As a result of its involvement in the Syrian conflict, Iran created a unit composed of

Pakistani Shia volunteers trained by the Iranian Revolutionary Guard Corp (IRGC), who have gained extensive combat experience fighting for the Assad regime against Sunni militants. It is rumored that “Zainebiyoun” members are now infiltrating back into Pakistan to provide the cadre for a Hazara self-defense force, a community long under attack by virulently anti-Shia extremist groups in Pakistan.

Chinese efforts towards Iran-Pakistan reconciliation has borne some fruit. In recent months, there has been a flurry of agreements in tradedefenseweapons developmentcounter-terrorismbankingtrain serviceparliamentary cooperation and, most recently, art and literature

Iran seeks to separate Pakistan from Saudi Arabia, while Pakistan tries to balance relations with both states. China benefits by reducing tensions among all the regional players in order to advance its wider economic and military aims.

The lesson for the United States is that Afghanistan is swimming in a sea of instability and not, as we seem to presume, the focal point of that instability. American policy should be focused on burden shifting, managing and, when appropriate, exploiting instability to thwart Chinese hegemony

India crafts its own ‘string of pearls’ to rival China’s naval jewels in the Indian Ocean

India crafts its own ‘string of pearls’ to rival China’s naval jewels in the Indian Ocean

Rob Edens says India is scrambling to secure alliances as China extends its naval dominance in the Indian Ocean, India’s traditional area of influence

Rob EdensUPDATED : Friday, 23 Mar 2018, 3:58PM


When it comes to the Indian Ocean, New Delhi is hedging its bets against an assertive China. India and France recently signed a strategic pact opening up their naval bases to each other’s warships across the Indian Ocean. This comes two years after a similar deal with the United States and signifies a web of strategic trust to thwart Beijing’s expansion into India’s traditional area of influence.

In recent years, Beijing’s push to contain Indiahas become more frenetic, including signing agreements with MyanmarSri Lanka, the Maldives and Pakistan. India’s deal with France is therefore an escalation of New Delhi’s capacity to project power. It grants the Indian navy access to strategically important French ports – including one in Djibouti, home to China’s single overseas military base and a focal point of strategic competition for the Indian Ocean. The installation can host over 10,000 troops and serves as a springboard for Chinese navy operations across the Indian Ocean.

China’s Djibouti military base: ‘logistics facility’, or platform for geopolitical ambitions overseas?

New Delhi has long feared being encircled in what is called China’s “string of pearls”, a network of installations in the Indian Ocean. The vision that global influence hinges on naval supremacy was most clearly articulated in China’s 2015 defence white paper, which demanded that the navy move from “offshore waters defence” to “open seas protection”. 

Albeit belatedly, India has realised that it needs to match China’s assertiveness

India is trying to get a foothold in Djibouti as well. Offering easy access to the Gulf of Aden and to key oil supply and trade routes, the port nation is strategically valuable. China’s relationship with the country’s president Ismail Omar Guelleh has led some to believe that Beijing is looking to kick out FranceJapanItalyand the US, who pay top dollar for access to the port. Showered with preferential loans and visiting Beijing regularly, Guelleh dismissed US concerns over allowing the Chinese to set up shop. He also seized privately operated port facilities, raising fears among other allies that they are about to be gifted to Beijing.

The Chinese navy’s system of alliances are a tactical nightmare for India since they limit its navy’s ability to counteract China’s moves across the Indian Ocean. With Pakistan’s Gwadar port, Beijing has struck a particularly sensitive nerve: a combined Pakistan-China maritime border fuses two of India’s most pressing strategic challenges into one. There are also reports of a Chinese military base planned in nearby Jiwani, and another in Bangladesh. These projects will embed China’s military in India’s backyard, with strategic access to the Bay of Bengal.


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India can strike anywhere in China with new nuclear-capable missile, government says

In early March, India got a taste of what an advanced Chinese navy presence means for its ability to operate in its usual proving grounds. After the pro-Chinese president of the Maldives declared a state of emergency, India sent aircraft and ships to its southern bases but called off any strong action after China dispatched its own naval combat force there.



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Driven by India into China’s arms, is Nepal the New Sri Lanka?

But India is not sitting idly by while China tries to make the Indian Ocean its own. Prime Minister Narendra Modi finalised an agreement for a new base in the Seychelles and negotiated military access to naval facilities at Oman’s port and airfields this year. A pact allowing deployments from each other’s naval facilities was signed with Singapore in 2017. With expanded bases on the Andaman and Nicobar Islands at the end of the Malacca Strait, India is raising the stakes in the fight over the waters of Southeast Asia.

Albeit belatedly, India has realised that it needs to match China’s assertiveness. India’s “Act East” policy and Washington’s “Free and Open Indo-Pacific” concept are starting points for pushing into China’s traditional waters in return. India might just be able to one-up Beijing and expand its reach into the Pacific. After all, the result of these joint military agreements is that Indian warships now have access to their own “string of pearls”, from Madagascar, via Djibouti, Oman and Seychelles, all the way to Singapore.

Rob Edens is a London-based researcher and commentator

Did Hasmukh Adhia compromise India’s national interest in the Rs.40,000 cr Vodafone Arbitration?

Why is Adhia trying to scuttle a case when Indian Govt. is on the verge of victory?

By Team PGurus -


March 24, 2018


Why is Adhia trying to scuttle a case when Indian Govt. is on the verge of victory?

The cobweb of complexities and the maze of unrelenting madness in which the Finance Ministry has tied itself in the Vodafone International Arbitration is a story of how an inept bureaucrat, with arguably limited knowledge of law and taxation, has compromised our national interest. Hasmukh Adhia, to further his naked ambitions, has buried the very idea the Prime Minister Narendra Modi preaches.

Apprehensive of tasting defeat in the arbitration under the Netherlands BIPA, in what is termed as a “devious” move, Vodafone moved for a fresh arbitration under the India-London BIPA.

The Vodafone case, as it is popularly known, involves a tax demand of Rs.11,000 crores ($1.7 billion) on Vodafone, for its Rs.55,000 crores ($8.5 billion) acquisition of a 67 percent stake in Hutchinson Essar Ltd.’s telecom business in India[1].  The interest and penal liabilities, in this case, are Rs.17,000 ($2.6 billion) and Rs.8,000 crores ($1.231 billion) respectively.

Income Tax department lost this case in the Supreme Court and the Government filed a review petition which was also dismissed. The Union Budget, in 2012, retrospectively amended the Income Tax Act 1962 to empower the income tax officers to scrutinize offshore merger and acquisition deals. Vodafone and the Indian Government entered into conciliatory negotiation and dispute settlement mechanism. In June 2013, a non-binding conciliation offer was made to Vodafone by the Indian Government but it did not yield any satisfactory result. The Government, later on, withdrew the offer when in April 2014, Vodafone moved for International Arbitration under the Bilateral Investment Protection Agreement (BIPA) between India and Netherlands. In June 2014, Arun Jaitley recused himself from the proceedings of the Vodafone tax dispute[2] and delegated the decision making in this case to Minister of State for Commerce Nirmala Sitharaman and the Revenue Secretary, as he had provided legal consultancy to Vodafone. Jaitley recused himself because he was the advocate for Vodafone and related companies before 2009.

From 2014 till 2017, the income tax authorities have put up a formidable battle before the Arbitration Tribunal. A senior Income Tax officer, on condition of anonymity, told PGurus that “it was almost certain that India was going to win the arbitration, the first and the biggest till date”. This case is the biggest tax dispute that the Income Tax department has got entangled in its history.

Apprehensive of tasting defeat in the arbitration under the Netherlands BIPA, in what is termed as a “devious” move, Vodafone moved for a fresharbitration under the India-London BIPA.

The Income Tax authorities handling this matter have been absolutely against the idea of India being a party to the second arbitration in this case, especially when India was winning this case and the 3-year arbitration was coming to its logical end. A policy decision was made on file to ensure that the Dutch proceedings are expedited and that India will not participate in the second arbitration proceedings. Adhia made the decision on file of India not participating in the second arbitration, as proposed by Income Tax and Minister of State approved the proposal on file. The matter must have ended there.

A mystery note, signed by the Finance Minister (FM) Arun Jaitley surfaced, a copy of which is available with PGurus. The note addressed to a senior official in the Prime Minister’s Office (PMO), is also copied to Adhia. According to the note, “a formal colleague from the legal fraternity” advised the Finance Minister[3] regarding the poor performance of the Income Tax (IT) Department in the international arbitration proceedings and strongly recommended that India participate in the second arbitration proceedings. This is an intriguing and extremely strange development shrouded in conspicuous suspicion as the Finance Minister has represented the Vodafone in the past and this is a clear conflict of interest. Who is the legal colleague the Minister was referring to? Did he or she represent or provide legal consultancy to the Vodafone in the past? What about the idea of due diligence before the Government spends around Rs 100 crores a year on legal consultants and lawyers only for this issue? Though officially recused from the Vodafone files, Finance Minister Arun Jaitley later started pressurizing the PMO and argued in favor of new arbitration in London as suggested by the telecom giant3.

All decisions pertaining to the international arbitrations are made by the Inter-Ministerial Committee (IMC) consisting of officials from the Department of Economic Affairs (DEA), Law Ministry, Ministry of External Affairs (MEA) and the Revenue. Hasmukh Adhia chairsthese meetings.

Adhia, having been “convinced” by the Minister of this new approach, swung into action and demanded the file in less than 48 hours. He did a U-turn and forced the Income-tax department also to follow suit.

Interestingly, the IT department put up a point-wisereply to the FM’s note with a copy of the rebuttal addressed to PMO. Sadly, Adhia suppressed this rebuttal note and never forwarded it to the PMO. This is an absolute indication of moral debauchery by Adhia because it is known fact that the PMO would not have allowed this course and also the wastage of hundreds of crore of public money. Did Adhia – because of his incompetence in the subject matter – not place all the facts before the Finance Minister?

All decisions pertaining to the international arbitrations are made by the Inter-Ministerial Committee (IMC) consisting of officials from the Department of Economic Affairs (DEA), Law Ministry, Ministry of External Affairs (MEA) and the Revenue. Hasmukh Adhia chairs these meetings. To follow his master’s directions, all ethics and moral principles were thrown out of the window by Adhia. Strange as it may sound, Adhia did not allow senior officers from any Ministry to participate in the IMC meeting to decide on this issue. Junior officers were deputed by the Ministries to make the crucial decisions on a Rs.40,000 crores tax dispute which will have ramifications in the other tax disputes that have been lined up in Cairn and Vedanta cases next. Is the PMO aware of this shoddy IMC and the pathetic performance led by Adhia on this issue? Ideally, all the three – LawMEA, and DEA – ministries need to be pulled up for surrendering to Adhia and not doing their job in a diligent manner on such a major issue.

The Income Tax officer said, “Adhia records objections as the Head of Revenue Department in financial issues involving even a few lakhs. Why then throw hundreds of crore out of the window? Why not put up a strategic and tactical fight when what is at stake is not just Rs 40,000 crore but also India’s reputation in the first international tax arbitration it ever participated?”

Keeping the PMO in the dark, Adhia pulled off the show for the FM and pushed India into the second arbitration thereby opening up a Pandora’s box. Did Adhia act on his own volition or was he being his master’s voice? Did he realise that he was pulling the case from the jaws of success and putting at stake close to Rs 40,000 crores of public money? Is it not a colossal waste of money to be engaging counsels by paying them Rs 100 crore a year? Who are these counsels and who are the lawyers in the Lutyens Delhi who acted as middlemen and fixers in this deal? It is widely believed that being a lawyer, Jaitley’s opinion on engaging lawyers in London will have a value.

The Income Tax officer said, “Adhia records objections as the Head of Revenue Department in financial issues involving even a few lakhs. Why then throw hundreds of crore out of the window? Why not put up a strategic and tactical fight when what is at stake is not just Rs 40,000 crore but also India’s reputation in the first international tax arbitration it ever participated?”

Hasmukh Adhia needs to answersome critical questions in this regard –Firstly, why did he suppress the Income-tax note and keep the PMO in the dark?

Interestingly, the income tax officers did not give up. They went chasing behind the legal officers of the country. Adhia scuttled every move and did not take the opinion of the Attorney General or the Solicitor General on record. What followed is a series of awry moves that were soaked in an ego tussle between Income Tax and Adhia which has resulted in the entire matter going nasty and awry.

The Government faced a crushing defeat in High Court and then knocked the Supreme Court to take a call on the further course of the second arbitration. Things have come to such an outlandish pass that Vodafone is now ready to agree to club the two arbitrations into one. Long story in short is – India’s success was just snatched away in the last minute and a long and tiresome battle continues. It is a shame that the country’s best and the brightest who make up the Civil Services would deliberately botch prestigious international cases, for reasons best known to them.

It is our nation’s curse, said this income tax officer that domain experts and subject specialists are totally ignored & insulted and the decision making, like in this case, is placed in the hands of a generalist who neither has special knowledge in law, taxation nor arbitrations. “There is only one way in which the world will come to know about the nefarious designs that have been adopted by the Secretary Hasmukh Adhia, in compromising the Indian National Interest – place the relevant files in public domain. The files have an uncanny knack of speaking for themselves” said the officer.

Hasmukh Adhia needs to answer some critical questions in this regard –Firstly, why did he suppress the Income-tax note and keep the PMO in the dark? Secondly, is it true that he deliberately bamboozled senior officers from External Affairs, Economic Affairs and Law from participating in these Inter-Ministerial Committee meetings and insulted the Income-tax officers who are domain experts who did not agree with his views? Thirdly, why does Adhia still not reveal to anyone as to who was the “mysterious lawyer” who gave a note to the Finance Minister[4] which changed the tide in the Rs 40,000 crore dispute? Fourthly, did he deliberately mislead the Ministers of State (Finance) – Santosh Gangwar and Shiv Pratap Shukla and personally get these files signed from them? (it is a known fact in the Ministry of Finance that Adhia has utter contempt for all the Ministers of State (Finance) and does not keep them in the loop on any issue) Fifthly, is the “mysterious lawyer” a consultant to Vodafone? Sixthly, when there was an explicit direction from Arun Jaitley in June 2014 that in case of any dispute on the Vodafone arbitration issue, the matter must be referred to the Prime Minister, why did Adhia notescalate this to the PMO? Did he betray the Finance Minister in the process? Lastly, did Adhia keep the Prime Minister in the loop on this Rs.40,000 crore ($6.15 billion) issue which is expected to have very serious ramifications on the Cairn and Vedanta arbitrations also? Or did he unilaterally decide in his usual arrogant and devious style?

It is extremely unfortunate that Prime Minister India is being misled and let down by the dubious and devious actions of certain bureaucrats he reposes his faith and trust on. We only hope that the Prime Minister Narendra Modi is made aware of these nefarious designs at the earliest.

1. The conversion rate used in this article is 1 USD = 64.98 Rupees.


[1] (Re)conciling the Vodafone-India tax dispute: the whirlwind isn’t stopping – Jul 12, 2013,

[2] Vodafone case: Jaitley recuses himself from decisions – Jun 18, 2014, The Hindu

[3] Violating Conflict of interest Jaitley intervenes in Vodafone case – Jun 19, 2017,

[4] FM Arun Jaitley violates conflict of interest in the controversial Vodafone arbitration case – Sep 27, 2017,

March 22, 2018

Arithmetic eclipses chemistry in UP

When your supporters refuse to stand behind you, your strength goes down.

By Ravi Shanker Kapoor -

March 22, 2018


Arithmetic eclipses chemistry in UP

Some of the traditional supporters may be voting for anti- BJP parties. Which means that even chemistry may be going against the ruling party.

In the run-up to the 2014 general poll, Narendra Modi was asked by an interviewer how he would cross the magic figure of 272, as the numbers were not adding up. His answer was simple: this is not an election of arithmetic but of chemistry. He was right: the exceptionally bad two successive governments under the Congress-led United Progressive Alliance had created such a political situation that people began yearning for something better, something new. Modi fitted the bill. The BJP ‘s (Bharatiya Janata Party) dismal performance in the recent by-polls in UP and Bihar, however, has underlined that chemistry is dead, and arithmetic is back in the reckoning.

In fact, being an exact science, arithmetic has always played a role in Indian politics; in exceptional circumstances, however, chemistry eclipses arithmetic. That is, Modi was able to convince a large section of the electorate that he was the right choice; the convincing was so thorough that all the calculations of analysts and experts went awry; the BJP won decisively.

Earlier, it had happened in 1977, when Indira Gandhi and her son Sanjay Gandhi’s tyranny, along with the excesses of the Emergency, cost the grand old party dearly; for the first time after Independence, it lost power. It happened again in 1989 when an ingenuous Rajiv Gandhi lost to the disingenuousness of a crafty V.P. Singh.

Modi regime is essentially socialist in ideology, mindset, and disposition.

But Modi and his man Friday Amit Shah seem to have lost sight of the fact that chemistry is not a regular occurrence; in the last 13 general elections, it played the critical role thrice only. It presupposes a mood: it was anger (with authoritarianism) in 1977, disappointment (with Rajiv’s cluelessness) in 1989, and hope (emanating from Modi’s promises) in 2014.

And without chemistry, arithmetic asserts itself, as it did in UP in particular, with the unexpected tie-up between the arch-rivals SP and BSP. In Bihar, there were no changes: while the Rashtriya Janata Dal retained the Araria Lok Sabha constituency as well as the Jehanabad Assembly seat, the BJP managed to keep the Bhabhua Assembly seat.

It is UP, the largest and most important state, which is sending ominous signals to the saffron party. Less than a year ago, it gave thumbs up to whatever Modi said, did, and stood for. UP’s people even forgave, rather rewarded, him for the disastrous demonetization of high-currency notes he had unilaterally carried out in November 2016. Millions of jobs were lost, the entire ecosystemswere hurt or destroyed, and the economy suffered just because the Modi-Shah duo was desperate to win a state election. The duo succeeded in convincing the populace that everything was for the good of the man in the street and, equally importantly, to penalize the corrupt and the rich. The mass feeling is best described by the German word ‘schadenfreude,’ described by as ‘satisfaction or pleasure felt at someone else’s misfortune.’ Not the noblestof feelings indeed, but then there is little noble in politics, certainly in Modi-Shah’s politics.

But the bottom line was that they won handsomely, winning over three-fourths of Assembly seats.

Unfortunately, the ruling dispensation has not been as capable in policy formulation as it is adept in winning elections. It can promise but it can’t deliver; and this is primarily because the Modi regime is essentially socialist in ideology, mindset, and disposition. I have written copiously about its orientation; whether it is the issue of the ownership of public sector banks, labour reforms, or opening up the farm sector, the government is usually in agreement with big state enthusiasts.

When a party’s core constituency shows apathy to polls, it should get worried.

And because the big state needs big money all the time, the government under Modi is always in search of it. The long spell of low crude prices filled the exchequer at the expense of vehicle owners, but the hunger for more never gets quelled. Income-taxpayers have got little relief in the last four years; traders, shopkeepers, and businessmen are tormented by GST. And the government, unresponsive to the concerns of the taxpayer, is just telling them that their money is being used for nation-building. Of course, part of nation-building is also keeping the Vijay Mallyas, the Nirav Modis, and the Mehul Choksis in good humour, but that’s another story.

The upshot is that the salaried class, traders, and shopkeepers—indeed the entire middle class—are suffering because of the unimaginative policies, the callous approach of the government, and the overbearing attitude of taxmen. Come to think of it: though urban areas are usually BJP strongholds, in the Assembly segment of Allahabad North the voter turnout was just 21.65 percent and in Allahabad West it was 31 percent (bother in Phulpur). Similarly, Gorakhpur City saw 33 percent voting.

When a party’s core constituency shows apathy to polls, it should get worried. The BJP, though, is unbothered. In my discussion with party supporters when I point out the middle class’ disillusionment with Modi, they say, “Where else would they [middle-class people] go?”

What the BJP doesn’t realize is that they may not go anywhere—that is, they may just skip voting. Many of them did in UP; a few months ago, a similar pattern was noticeable in Ajmer and Alwar, the two Lok Sabha constituencies in Rajasthan where the BJP was trounced. When your supporters refuse to stand behind you, your strength goes down. This is common sense and simple arithmetic.

Worse, some of the traditional supporters may be voting for anti-BJP parties. Which means that even chemistry may be going against the ruling party.

1. Text in Blue points to additional data on the topic.
2. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus