CHAPTER VI Bilateral Relations The SAARC countries have been

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					                                  196




                           CHAPTER VI


THE IMPACT OF SAARC ON SOUTH ASIAN RELATIONS


      The pofiry of non alignment has united the South Asian
countries regionally and economically. Pakistan's membershipwith
SEATO and CENTO during earlier decadesdid not create a senseof
its identity in the region. As a result it came out of these military
alliances during early 1970, and embraced the             policy of

non-aliagnment. The end of the cold war has not diminished ttre
importanceand relevanceof non-alignment. growing popularity as a
                                       Its
movementwith 113 countriesis a manifestation its popularity. In
                                           of

South Asia all the countriesare following this policy of non alignment
to play an independentrole in internationalpolitics. The NAM has
contributed greatly for the emergence SouthAsian Unity.
                                    of

                                                        I
      The formation of the SAARC is another milestone in the
promotion and sustenance South Asian solidarity. It is true that
                       of
bilateral issues donot come within the purvrew of its charter yet,
                                             amongthem. The impact
indirectly it has facilitatedthe understanding
of the SAARC on SouthAsian Relationscan be examinedas follows:


                                            have beenableto
      Bilateral Relations:The SAARC countries
promote their bilateral relations in the meaningfirl menner. The
  socio-economic cultural
              and       programmes
                                 adopted the SA\r{IrC
                                       by            have
  createdunderstanding     lndia and Pakistan;
                     between                 betweentndia and
  Bangladesh;
           between
                 IndiaandNepal;IndiaandSrilanka.


  INDO-PAK BILATERAL RELATIONS:
                               ,r'

      -   Despite, the confontationist approach adopted by pakistan
 regarding the Jammuand Kashmir issue, the Gor ernmentof India has
 adopted a friendly and conciliatory approach towards it under the
 umbrella of SAARC.         Several agreementssigned between two
 countries in recent years are very helpfirl for the removal of
 misunderstanding.
                       'j
  .

          The agreements the nuclear restraint, art and culhre,
                       on

 education,and sportsare the landmarksin their bilateralrelations.l
 Moreover,the SAARCdeliberations
                               have influenced
                                             themto contain
 terrorism, drug trafficking, smuggling and    bordercrossins. The
 fourth SA'r{I{Csummitheld in 1989 in Islamabad
                                              furthercontributed
^' for intensiftingcooperations economic,
                             in         medical
                                              and culturalfielfu.
                went to Pakistan July 1989,His talks with prime
 Mr. Rajiv Gandhi               in
 Minister, BanezirBhuffowas fruitfrrl and both of themagreed end
                                                            to
 the confrontation the Siachen
                 in          area. They were hopefutof finding
 earlysettlement this issue.
               of
                                 198


      Severalroundsof talks betweenthe two countrieshave been
encouraged the SAARC deliberations
         by                                      In
                                 and declarations. April
1990India proposed package confidence
                 a       of         buildingmeasures
                                                   like
exchange information
       of              militarypositionandstopping hostile
                   about                         of
propaganda
         againsteachother. In the Fig. 9 military expenditure
                                                            of
thesetwo countries clearly indicatesthe fluctuating tendency. It
     uponttre situation the international
depend                 at               level. Both the countries
are including in arms race in the region. In L991 the Foreign
          of
Secretaries the two countries a meetingin New Delhi agreed
                            at                            on
      notificationof military excisesand preventionof airs space
advance
violation. Moreover, the sixth round of meetingat the Foreign
        levelhelpedin the signing two agreements
Secretary                        of                  the
                                              banning use
of chemical
          weaponsand the establishment a code of conductfor
                                    of
         of
deploments two cotrntries. The meetingbetweenPakistanPrime
Minister,Nawaz Sharifandthe IndianPrimeMinister,Narasimha
                                                        Rao
at the time of commonwealth
                          summitmeetingin Harare in October
1994firther helped cometo a closer
                  to             turderstanding.
     The recent developments
                           reveal the preparedness both the
                                                 of
countries sortoutbilateralissues
        to                      and promotemeaningful
                                                    dialogue.
The SAARC has contributed mite towards normalisingIndo-Pak
                         its
relationswithin certainlimitations. Meaningfulbilateral relationship
would help these two countriesto bring about rnutually beneficial
development crucialarraslike education,
         in                                  technology
                                      science,        trade,
communication
            etc.
                                         199




                              Fig.9.
    Militaryexpenditure percentag"oi gross domestic
                         as
                            t
                p r o d u c G . D . P1 9 8 5 - 1 9 9 0
                                     .




                  1985 1987                        1985 1987
                  15.6%17.3o/o                     1 6 . 6 % 20.3Yo




                   1990      19 8 8                1990 19 8 8
                                                                                  1990
                  15.60,/o
                             16.3%                 16.1Yo1 7 . 1 %
                                                                                  19ia,6
      19 8 9                            1989                           19 8 9
      16.1o/o                          16.3",' e                       13.1o/o


  lndia                               Pakistan                        Sri Lanka

So u r c e : Qu o te di n P e rva i z q b a l Cheem a,' Ar m sbuildup in SouthAsia,
                                    l
lmpacton the process peaceand development the region' SMRC -
                            of                              in           In
2000 and beyond,       pp-50.
                                  200



      The Government India has taken the lead for improving
                   of
bilateralrelations the PrimeMinisterof India visitedPakistan
                 and                                       on
20th February1999. His journeyfrom Amritsarto Lahoreby road
created a new history in recent time.      He was receivedby his
counterpart Nawaz Sharif. This visit was described truly historic
                                                  as
visit which would heralda "new beginning" Indo-pakrelations.It
                                          in
was also observedthat so called "Bus diplomacy" would createa
congenial
        atmosphere
                 between two countries. Both the leaders
                        the
reaffirmed
         their commitrnent the goalsandobjectives the SAARC
                         to                     of
andto strengthen effortstowards realization SAARCvision
               their           the         of
with a view to achieve      growth,socialprogress cultural
                     economic                   and
development. The joint statementpopularly known as Lahore
declaration
          signed February
                on      21st 1999contained         points
                                         significant
for the promotion of better understanding
                                        between the two. The
followingaremostimportant
                        points.


    1. Discussiorrwere conductedon       the wide range of bilateral
issuesand regional cooperationwithin the SAARC framework. The
two leaders embodied their shared vision of peace and stability
betweenthe two countries. They decidedthat the Foreign Ministers of
the two countries would meet periodically to discuss all issues of
mutual concernincluding the nuclearrelated issues.
                                  201



    2. The Foreign Secretaries of the two cotmtries, signed the
Memorandum of Understanding to identifoing measure aimed at
promoting an environment of peace and security between the two
countries. The MoU signed by the Foreign Secretaries Lahore in
                                                   in
February has committed the two cormtries to hold consultations on
security concepts,and nuclear doctrines with a view to developing
meastrresfor confidence- building in the nuclear and conventional
fields to avoid conflict. It also included agreements inform each
                                                    to
other in advanceaboutmissile tests, an agreement prevent incidents
                                               to
at sea, and bilateral consultations on security, disarmament
                                                           and non-
proliferationissues.


      During his visit to Pakistan India prime Minister, A.B.vajapay
                                                 pakistan. He also
declaredthat India wanted a stable and independent
stressed point that both the countries shouldlive together. He came
        the

out in favour of India and Pakistan cooperatingin nuclear field.2 He
said, "as ofhow two countries getting information for third country

thereis a needto chanee
                      this".3


     Thus, it becameclear that the SAARC has certainlydone a
commendable to promotethe possible
         work                     partnership
                                            betweenIndia
and Pakistan. It is desirable permit the discussion the bilateral
                            to                    of
problerns the SAARC ministerial md summitlevel meetings. It
         at
would reduce the interferencefrom other courtries and mutual
                                     202



 suspicion.Even today Jammu and Kashmir is a burning issue in the

relationshipbetweenthe two countries.4 Trris has to be resolvedwith
firm determinationunder the SAv{ItC umbrella. This would put an end
to terrorism in Jammuand Kashmir.


      The two countries are also negotiating the solution to the
problems of SiachanGlacier and 'Sir Creek' a small place which
separates
        Gujrat (India) from the Pakistanprovince of Sind. The sixth
round of.talks held in November 1998,in New Delhi discussed
                                                          mainly
botndary issuein the "Sir Creek" area. According the opinion of two
countries. The Lahoredeclarationwould go a long way for the closer
understandingbetween two countries. The momentum of a forward
movement within the framework of the S,AARC needs to be
strengthened.
            The release of prisoners from both the countries on
March 22, 1999 was a right step in the direction of the forward
movement. "lndia's unwillingnessto allow any referenceto the Lahore
Declaration on the ground that bilateral issues are stnctly off the
agendaat the SAARC forum demonstrated inability to get out of the
                                    an
diplomatic rut .... It is a sign of the maturity of a multilateral grouping
when its membersagree to disagreeand not shy away from problems

evenbilateraloo.r.5
,,                                      203



            It may also be pointed out here that frequenttalks at the Foreign
     Secretaries'level have been conducted both in New Delhi and
     Islanabad to narrow down the differences on peace and securityand
     Kashmir, Siachen, wular Barrage, sir creek, terrorism and drug
     trafficking, economic and commercial cooperation, and promotion of

                       These8 issuesare popular known as "two plus six"
     friendly exchanges.
     issues.India has offered to hold secretary- level talks in June 1999.
     The growing relafionshiphas facilitated the establishment a joint
                                                             of
     chamberof commercein April, 1999. This was envisaged the Prime
                                                         by
     Minister of both countries in February, 1999. Speaking on the
     inaugural on April 10th in New Delhi leading industrialists from
     Pakistan cailed upon India to permit transit of goods between the
     SAARC countriessuch as Nepal, Pakistan and Bangladesh facilitate
                                                          to
     greater regional trade. tndia also underlined the regional cooperation
     in view of globalisation
                            and liberalisation.Indias Minister for indusbry
     Mr. Sikandar Bakht said: "BOth India and pakistan have
     acknowledged emergence the global village. We shouldshed
                 the      of
     our inhibitions and join hands for enhancing our bilateral trade to

     mutual advantage".6The        Fig. f 0. shows that, -apart from this
     dwelopment,both the countriestrade balancefrade relationsgoing
     normallywith maintaining
                            balance
                                  trade in SouthAsia.
;                                               201
i




                                    Fig. 10..
                     Pakistan Trade with SAARC Countries




    c)
    o)
    (g
    -
    q)
    L
    o
    o-
    -
    a
    0)
    -t

    E




           1 9 8 0 1 9 8 1 1 9 8 2 1 9 8 3 1 9 8 4 1 9 8 5 1 9 8 6 1 9 8 7 1 9 8 8 1 9 3 9 1 9 9 01 9 9 1



                 EE  India-Export            EtrBangladesh-Export
                 & l S ri L a n ka -E xpor t - lndia- lmpor t'
                 xB a n g l a d e sh -lmpor t Sr i Lanka- lmpor t
                                             +

         Source: Directory TradeStatisticYearBook1985and lgg2.
                             of
         IMFWa sh i n g to D .C .
                           n
                                205


SAARC'S       CONTRIBUTION            TOWARDS       IMPROVED
RELATIONS BETWEEN INDIA AIYDBANGLADESH:


      The birth of Bangladesh 1971with supportof India is an
                            in
unforgettableevent in both countries.The Treaty of Friendship
Cooperation Peace
          and    signed March 19, 1972by IndiraGandhi
                       on
and Sheikh Mujibur Rehman became landmark for excellent
relationshipbetweenthe two countries. India supportedthis new
counbryin all respects. But the nilitary upsurgein Bangladesh
                                                            in
August 1975 harmedthe relationshipbetween the two countries.
However,the emergence SAARC in 1985 became blessing
                    of                    a       in
disguise for the removal of misurderstandingbetween the two
countries          :                        -
                   i
      The SAARC hasgreatlyinfluenced two countries resolve
                                   the           to
their bilateraldisputepeacefi.rlly
                                without outsideinterference. 1992
                                                           In
India solved the problemof "Tin Bigha" by handingover it to
Bangladesh a long-termleasebasis for the period of 99 years.
           on
Regardingthe disputeover the "New Moore Island" in the Bay of
Bengal,India hasbeenfollowinga caustions
                                       approach.


     During the meetingwith the Prime Minister of Bangladesh,
SAARC relatedmatters,
                    bilateral
                            iszues
                                 suchas sharing riverwaters,
                                               of
demarcation of land boundary, transit facilities and economic
                                 206



 cooperation discussed thePrimeMinister,p.V.Narasimha
           were      by                             Rao
in his visit to Dhakaon 10-11April lg%.7 India and Bangladesh
relations
        remained high during 1994-95
                                   rvith the exchange several
                                                    of
highlevelvisitsduringFebruary August lgg4.ln the same
                              to                       yearon
20 December, Bangladesh
          the                                       jointly
                      Festivalof Arts was inaugurated

by India and Bangladesh.8 Indian scientists
                          The               met on september
l9th in Dhakaon a scientific
                           cooperation
                                     concluded agreement
                                             an         for
   -9
1993 4 with Baneladesh.


      The dispute regarding     sharing the Ganga water has been
solved peacefully.. India has cooperatedto solve this water dispute
ever sincethe emergence Bangladesh. The interim agreements
                      of                                 of
1975 and 1977 aimed at peacefi.rlsolution to the problem. The
SAARC has provided greater opportunity to find the permanent
solution to the problem. A landmark 3O-yeartreaty on sharing of
Gangawater was concludedbetween two the countrieson December
12, 1996at New Delhi. This hashelpedto restore special
                                              the    bilateral
relationship. According to Bangjadeshsource,the sharingof Ganga
flows at Farakkaduring the dry seasonsof 1998 and 1999 were very

satisfactorv.9


     The 33rd meeting of the Indo-BangladeshJoint Rivers
Commission held in New Delhi on April 10thand llth 1999.It
         was
discussed
        issuesof mutual interestin the area of water resources
                                207



 including tying up of the embankments corrrmonborder rivers,
                                      on
 sharingaspectsof the Ganges, Teestariver water, improvement
                                                           of
flood forecastingand warning,sharingof other commonrivers and
problemof commonborderrivers.Both the countriesagreed work
                                                      to
out arangements for long- term sharing of river waters ooftlmon
between both countries endorsed good will generated
                     and        the                    benneen
themin recenttimes. Indiaoffered assistance the implementation
                                its       in
of ttre Ganga Barrage Project in Bangladesh. In the words of
Bangladesh PrimeMinister Sheikh Hasina"the treaty could influence
the courseof bilateralrelations theyearsto come".
                              in


      Furttrerthe Gujral Doctrineenunciated Gujral, the Foreign
                                          by
affairs Minister in the United Front Governmentalso contributed
largely for improvedrelationswith neighbouringcountriesincluding
Bangladesh. Its key elementssuch as mutual non-interference
                                                          in
internal affairs of anothermutualrespectfor each other'stenitorial
integnty and sovereignty, peacefirl
                        and          settlement disputes the
                                              of        on
basis of bilateralismhave influencedBangladesh-Bhutan, Srilank4
NepalandMaldivesto dealwith Indiarespectfrrlly.lO


      since 1986,therehavebeenfrequent
                                     visits by the leaders two
                                                         of
countriesto continuefriendly dialogue. I.K. Gujral who rvas the
ForeignMinister in the V.P SinghGovenrment,
                                          went to Dhakain 1990
andthe Bangladesh   PrimeMinisterBegrrmKhelide zia visitedIndiain
                                 208


                                         prime Ministerto New
May 1992. Againthe visit of the Bangladesh
Delhi in December1996, the visit of lndia's prime Minister Mr.
Devegowda Bangladesh January1997went a long way for the
         to        in
consolidation bilateralrelationship.His visit, the fust by an Indian
            of
PrimeMinistersince1973,
                      coincided
                              with SilverJubileecelebration
                                                          of
Bangladesh
         liberafion.


      The Chalcnarefugees
                        problemis considered a minor irritant
                                           as
in the relationsbetweentwo countries. Thereare more than 60,000
Chakmarefugees India. Hence,India has been negotiating
              in                                      with
Bangladesh therepatriation thoserefugees Bangladesh.
         for             of            to          They
are the indigenous
                 Buddhisttribals who havefled to India with n fear
of persecution the handsof Muslim fundamentalists.
             at                                  Most of them
arestayingin Tripuraiand       pradesh.Theyarenot recogmzed
                       Arunachal
aslndiancitizens.


      It is gratifinng note that in the field of trade and commence
                      to
therehasbeena marked
                   improvement the bilateralrade relationship
                             in
with growingtradecollaboration.
                              Bangladesh's
                                         fade shareof imports
increased
        over the years. It is also beneficialto all SAARC member
countries.Table17giesthe detailsin this regard.
                                                      209




                                                  'I'able
                                                         l7
                     Bangladesh's
                               Tradervith SAARC Countries

               Exports                 Inlports
                                                       Trade     Exports Irnports Shareof Shareof
  Year                                                balance     Total   Total
          Value      Grorvth      Value Grorvtlr                                  exports lmports
                         )
                      191,               (%)

  I 980   68 60                   96.20                - 2 76    790.2      26t 0.6   8.68   3.68
  l98l    65 40       - 4.66      124.30 29.21         - 58.9    791.3      265t.4    8.26   169
  1982    63.00       - 3.67      72.30 - 4 t . 8 3    - 9.3     768.0      2418.5    8.20   3.28
  I 983   61.60       -) 11       60.00 - 1 7 . 0 1     1.6      724.0      2291.1    8.51   ) A )


  I 984   t 0 65 0   - 72.89      79.20 32.35          273       9 3t . 3   2870.3    1144
                                                                                       .     2.76
          "t6.50 -
  | 985            28.17          87.40     I0.35      - t0.9    998.8      )s)6,1    7.06   3.46
  l 986   5 3 . 9 0 - 29.54       9 r . 1 0 4.73      - 37.2     888.9      2550.4    6.06   3 . s 7i
  1987    44.20      - 180       I t 6 . 9 0 28.32    - 72.7                          .r.
                                                                 I076.8     2730.3      t0   1.28
                                 I
  | 988   64 60       4 6 . 1 5 r60.20 37.04          - 95.6     l29l.l     3034.
                                                                               I      5.00   5.28
  | 989     e0
          50.        - 2 1 . 2 1 r 6 2l.0   t .t 9    - n2.2     130-lc)    36t7.6    1.90   448
  I 990   60.50       1 8 . 8 6 249.90 5 4 1 6        - | 87.4   l67t 8     3656I     3.62   684
 |991     79.30      31.07      25I .80     0.76      - 172.5    1687
                                                                    5       1381.4 1.70      715


Source:Directory Trade
               of             year Book r9g5 andl992tMF
                      Statistics




                                Ers
                                    210



 INDIA AND NEPAL - THB GROWING PARTNERSHIP:


       Nepal, a landlocked country in the Himalayan region has been
 respectedand helpedby India. Both the countrieshave almostsimilar
 customs, rituals and religious practices. They also share common
 culhre and hencethey have a,specialrelationship. Nepales are free to
 carryout trade, own property,take up any private and Govemmentjobs
 in India. An estimatedfour million Nepalees live in India and some
2,00,000Indiansresidein Nepal.


       After tndia becameindepandentshe committed to develop the
special relationshipwith Nepal. This was culminatedin the treaty of
peace and friendshipsigned by two counfriesin July 1950. Many
reciprocal privileges in such matters as residence, ownership and
participationin tradeand commercehave been includedin this treaty.
This treafy has a provision for equal treatmentof the nationals of each
other's countries. At present both the countriesallow each other's
citizenswithout visas.


      Since 1985 India has greatly contributedfor the comprehensive
developmentalwork in Nepal. The Rajiv Gandhi region took some
measuresfor the beneficial Indo-Nepal relations. This was continued
during the period of v.P.Singh,I.K.Gujral, Minister for externalaffairs
                                 2tr

 said "Nepal'sproblems
                     and concerns
                                will considered us not only
                                              by
with understanding alsowith genuine
                 but                                     l
                                   syrnpathy friendship,,.l
                                           and


      The visit of PrimeMinister,
                                chandrasrr.karon February
                                                        l3-15.
1990was a landmarkin the bilateralrelations. He said:"I call upon
Nepali friends to discard their earstwhile hatred and with full
confidence accepthandof cooperation offer". A visit to Indiaby
                                    we
the NepalesePrimeMinister,KrishnaprasadBhattaraiin June,1990
hadimprovedthe Indo-Nepalese
                           relations.Further,Indiaalsohasfied
to help Nepal in many projectsof economicdevelopment.These
includedevelopment communication,
                  of               constmctionof irrigationand
power projects,constructing educational
                          of          and technicalinstitutions,
andAutomaticTelephone
                    Exchange Kathmandu.India hasalsoset
                           at
up Phoneexchange Nepal.She alsoagreed setup a telephone
               in         has       to

link at Rangeliin Morang district.l2 India has decidedto supply
10,000million tonnesof wheatand 130.00million tonnes nce to
                                                    of
Nepala gesture friendlyrelatinship.The agreement effecting
             of                                for       the
supplies
       was signedbetween
                       India and Nepal Food Cooperatrons
                                                      on
May 28th lgg2.l3


     Further,India hasgreatlycontributed economic
                                        for     development
and democratisation political systemin Nepal. The SAARC has
                  of
given a great boost for the strengthening multi purpose
                                        of             relationship
                                  212



betweenthe two countries. India has had dispelledthe Nepali fear that
it would dominateNepal underthe 1950treaty.


      The crown prince of Nepal paid first official visit to India in
August lgg4"and the NepalesePrimeMinister visitedto India in 1995.
Thesetwo visits were very important to remove the misunderstanding
between the two counties regarding the Free Trade Area in the

SAARC region to galvanir. ..onorny.l4 The visit of Indias Foreign
Minister kanab Mukarji in January 1996 to Nepal gave a fresh
impetus to enhance the bilateral trade and economic cooperation.
India-Nepaleconomic relationshave gained the stable and positive
framework provided by the treaties of trade and hansit. Nepalese
exportto India during 1993-94was estimatedto be Rs.1,176,3
                                                         million
and importsfrom India valuedworth of Rs.7,874,43million. Indiahas
a free trade arrangement
                       with Nepal. The Fig. 11. showsthat Nepal's
Trade in imports value increased among the SAARC member
countries.


      Since 1986 the SAARC has profoundly encouraged two
                                                   the
countriesto enise the misunderstanding
                                     and to concludeseveral
bilateraltreaties. Both the countries          to     proposal
                                    have agreed discuss
to updatethe treaty of 1950, and to boost the bilateralfiade. The
Mahakali
       treatysignedby the two countries 1996aimsat integrated
                                       in
development Mahakaliriver projects Nepal.
         of                      in
                                                 213




                                                                                         i;
                                                  F i g .1 1 .
                           Nepal's
                                 Trade
                                     with SAARCCountries

      250


     200

     .f qn

@
?

€    100
=
,g
Q
o
-t    50
E
        n



     -50


     -100
             1 9 8 01 9 8 1 1 9 8 21 9 8 3 9 8 41 9 8 51 9 8 61 9 8 71 9 8 81 9 8 91 9 9 01 9 9 1
                                          1
                                             -         Year

              source: Directory rradestatistic
                              of             YearBooklggs and19g2.
                                                                 IMF
              Washington D.C.
                                214


REIVEWED        FRIENDSHIP        BETWEEN         INDIA      AND
SRILANKA:


      CulturallyandraciallytherearemanysimilaritiesbetweenIndia
andSri Lanka. lndia'sobjectives Snlanka
                              in       constitute restoration
                                                 the
                relations their traditional
of India-Srilanka        to               level of cordialityandto
strivefor the safety,securityanddemocratic         of
                                         aspirations the Tamils
and Srilankansin that country. However,many Srilankanshave
                       towards India becauseof its size and
developedan apprehension
prominent in SouthAsia.
        role


                                               has
      The Government India sinceits independence respected
                   of
the independence sovereignty its small neighborsincluding
               and         of
                                   India and has shown a great
Srilanka. Srilankahas also respected
      for               ln              war
desire friendlyrelations. theIndo-Pakistan of l97l Srilanka
had remainedneutral. In the sameyear on the requestof Srilankan
Government,   India offeredmilitaryassistance containinsurgency
                                             to                  in
that courtry. Thedisputed  "Kachchativu" islandwas givento Srilanka
       Reasons misunderstanding: Ethnicproblem
:rn1975.     for              The             erupted
in   1983 has been greatly responsible for        the occasional
               betweenthe two countries. The Nebru-Kotewla
misunderstanding
                                   pact
agreement 1954,andthe Shastri-Sirimao of 1964did not solve
       of
                            Lakhsof IndianTarnil ongtnhavebeen
the ethnicproblemin Srilanka.
lirring in Srilanka for a long time, and they have fonned many
                                 215



 organizationsto fight for their rights including citizenship and
 self-determination.


      After the birth of SA\r{IlCthere was a greatdesirebetweenthe
two countries resolve
            to       this ethnicc.isis.l5 Hence,
                                               India offeredits
mediationin 1987. The result was the signing of India-srilanka
agreement July 2.9,1987 colombo by theprimeMinisterof India,
       on             at
Rajiv GandhiandSrilanka
                      President Jayewardane. Rajiv GandhiSaid.
"Thisagreement
              wouldremove  pasttensionandmisfirrst marksthe
                                                  and
beginningof new chapterin Indo-Srilankarelations".However,the
despatch tndianPeace
       of           KeepingForce(lpKF) was not welcomedby
some leading politiciansof srilanka. After premadasa  becamethe
Srilank'sPresident
                 relationswere strainedover this issue. Although,
IPKF went to Srilankaon the request of that Government
                                                     under the
1987agreement, srilankanpresidentgavea deadline to India for
               the
the withdrawalof IPKF beforeJuly 1989. It may be recalledherethat
the V.P singhGovernment India withdrewthe IpKF 1990.
                     of


     The congressGovernment by Narasimha
                          led           Rao did not want
to involve directly in this ethnic issues. He followed the
non-interventionist
                 approach this respect. This was welcomedbv
                         in
the SrilankaPresident
                    Premadasa.
                                 2t6


       After the assassination premadasa lgg3,the new president
                            of         in
 of SrilankaMs. Chandrika
                        Kumaratunga
                                  committedherselfto improve
 bilateralrelations. Her visit to lndia in 1995 and 1996providedan
 opportturityto reaffirm srilankan'sfriendshipwith India within the
 SAARC framework. The united Front Governmentof India also
decidedto follow a non- intervenitionist
                                       policy towardsSrilankaand
otherneighbors the sub continent. The Indian ForeignMinister I.K
             in
Gujral who visitedSrilankain JanuarylggT announced India and
                                                 that
Srilankahad agreed the formationof an action goup undersection
                  to

of 8 of the SAARCcharter promote
                       to      economic
                                      cooperation.l6This
action stD  would compriseIndia Srilankaand Maldives. He also
saidBhutan,lndia, Nepaland Bangladeshwould set up another
                                                        action
goup for economiccooperation. He firrther remarkedunder the
SAARC umbrellarelationsbetweentndia and Srilankavery cardinal.
andcooperative friendly.
             and

      In an era of      globalisation, liberalization and market
oriented-economy, two countries
               the            haveboostedbilateraleconomic
and commercialties. India is a leading country which exports to
Srilankamachineries equipments the transportsectorand other
                  and             in
*.ur.l7

      The two-way fade between the two countries has been
increasing
         rapidlysince1986. Relations
                                   with Srilankacontinued be
                                                        to
basedon friendship,understanding good neighbourliness.The
                               and
                                    217



Srilankan Foreign Minister briefed the Indian leadership about thdu'
srilanka government's agenda including the peace process,
constifutional reforms and economic policies stressed Srilanka's
keeness sourd and cardinal relationswith India.
        for


      In his address rhe l0th SAARC summit at colombo held in
                   to
July 1998,the Indian Prime Minister A.B. vajpaye pointed out the
growingfade partnership   befweenthe two counfies in the followine
words- "on its part, India is willing to take liberalizafion.I take this
opportunity offer tha! as a specialgesture,
          to                                    India will lift qualitative
rcstrictions maintainedfor Balance of payments reasons on a
preferentialbasisfor SAARC countrieswith effect from August I,
1998. Thuswouldinvolve1iftingrestrictions over2,000products
                                        on
and would substantial
                    increasethe opporhrnities our SAARC
                                            for
parhers access marketandincrease exports".l8
       to    our               their
                                  2r8

     Ths table 18 below grves bilateral trade figures from 19g6 till
 November1998.The Fig. 12 shows the Srilanka's   Trade with stu{I{c
 membercountries.India's import is higherthan other countries.

               Table 18. Srilinaka's Trade with India.

   YEAR            IMPORTS FRONI                  EXPORTS TO
                   INDIA                          INDIA

   1986                   55                              8
   t987                   6l                              5
   1988                   7l                             l5
   1989                   57                              8
   1990                  il8                             20
   1991                 217                              t3
  1992                  302                              ll
  1993                  34s                              20
  r994                  404                              24
  1995                  470                              32
  1996                  564                              43
  1997                  5s9                              44
  1997                  493                              39
(UptoNov 1998)          493                              39
(Upto Nov)              514                              32

Source:TheHindu,Feb4, 1999.
                                                219




                                     Fig. I2.
                     Sri Lanka'sTradewith SAARCCountries




o
o,
(d    100
o
o
o
o-
.c
 c)
 f
]il




            1 9 S 0 9 S l 1 9 8 21 9 8 31 9 8 41 9 8 51 9 8 61 9 8 71 9 8 81 9 8 91 9 9 01 9 9 1
                   1


        Ellndia-export ElBangladeshexport&tMaldives-export
                       elndia-import
        ElPakistan-export                Fi'Bangladesh-import
        +Maldives-import Pakistan-import
                       A


       Source:Directory TradeStatistic
                      of             yearBook,19g5and
       1992,
           lMF,WashingtonD.C.
                                  220



      Because of increasing bilateral trade both the cormtries
           joint
 established venhtres institutional
                      and              mechanism.Moreover,the
 concept Free Tradebetween two countries beenadvocated
       of                 the          has
 by thepeople two countries manyyears. It took concrete
             of           for                         shape
 following the announcement economicpolicy by the Srilanka
                          of
 govemment september1994 and at the tenth SAARC summit
             in
 meeting.In order to strengthenthis, the Indian prime Mrru-dter
 A.B vajpayenotedat the lOthSAARCsummit follows:
                                          as

     "we should
               aim to conclude treaty(SAFTA) and have it in
                              this
placeby the year 2001. India would also be willing to consider
bilateral Free Trade Agreementswrth those countries which are

interested movingfaster".19
         in


    The Free TradeAgreement
                          was signedby two leaden in New
Delhion December, 1998.Thisaimsat phased
                 28,                    elimination tariff
                                                  of
on certainitems. This agreement give a fillip to the efforts to set
                              will
up mechanisms removeunnecessary
               to                  restrictions trade. under
                                                on
this,the tariff on several
                         specifieditemswould be phased within a
                                                      out
time-frame. This agreement cameinto effectfrom March lggg.India
will reduce tariffto zeroin threeyears,
           the                         while Srilankamay do so in
eightyears. Thereis a provisionfor yearlyreview. It is believedthat
this free trade agreementis expectednot only to improve firther
bilateraltradebut alsoenco'rageIndianjoint ventures.The Board of
                                   22r


Investnentof Srilanka aheadyidentifierd
                     has              computer
                                             softwareand
training, light engineering,
                           rubber productsand pharmaceuticals
                                                           for
promotionof Indianinvestrnent Srilanka.
                            in


INDIA'S RELATION WITH MALDIVES AND BHUTAN:


      India's relations with Maldives and Bhutan are excellent and
time tested. Maldives and Bhutan aJe not harbouring any kind of
misunderstanding
               with India. Basically lndia'srelationswith Maldives
is very friendly within the framework of the SAARC India is giving
assistance Maldivesfor variousprogrammes projects. Bilateral
         to                            and
cooperation in areas like infrastmctural development, manpower
resource development,health, communicationcivil aviation, culture,
fisheries,defencetrade and commerceetc. are strengthening.India has
also assisted it regarding educational and training facilities, various
fields like science,         medicineandtelecommunication.
                   technology,


      Indo-Bhuthanese
                    relationshavebeenestablished the basisof
                                               on
mutual help and collaboration.The King of Bhutan Jigme Wangechuck
said that there are no problem areasbetweenthe two countriesand he
addedthat decks have been clearedfor further economic cooperation.
India has provided a solid basis for a close and warm relationship
marked by mutual understanding the fields of science,technology,
                              in
medicine and telecommtrnication. The SAARC forum is institutional
                                 xn


 strategyfor the consolidationand continuation the friendshipand
                                             of
 cooperation.


 CONCLUSION:


 .    The impactof sAARC on the SouthAsian relationshas been
impressiveand positive to some extent. India as large country is
suspected a "Big Bully" or "Big Brother" by some leaders in
         as
Snlank4NepalandBangtadesh. Kashmirissuehascaused  pennanent
headache the relationbetweenIndia and Pakistan.
       in                                     The leadersof
Pakistan
       havebeentrying to internationalise issue advocating
                                        this   and       a
policy of self-determination the people of Jarnmu
                             for                   and Kashmir.
The terroristactivitiesare supported ISI of pakistan,
                                    by              and thereby
perpetuating Kashmirdispute. This dispute alsocontributed
           the                           has            for
nuclear
      armsracebetweenIndia andPakistan.Thenuclear
                                                explosions
conducted the two countriesin 1998has clearlydemonstrated
        by                                              the
nuclear
      progralnmes two countries.Therefore is advisable the
                of                      it           that
bilateral issuesmay also be allowed for discussion     for amicable
solutionboth at the ministeriallevel and summitlevelof the SAARC.
Ths would also lead to the possibleprevention Westerninfluence
                                             of
intervention SouthAsian affairs. It is happy to note that at the
            in
bilaterallevel relationsamong the sAARC counries have greately
improvedbecause the bold initiatives taken by them particularly
              of
India. The water-sharingagreementwith Bangladesh,
                                                free trade
                                   223



 agreement with Sri Lanka and the LahoreDeclarationof Febnrary
 1999, are the manifestations the positive bilateral movement.
                             of
 Attemptsmust also be made to implement
                                      schemes sub-regional
                                               of
 cooperation agreed Bangladesh,
           as       by           Bhutan,IndiaandNepalin 1996
 at the ministerial
                  conference Foreign
                           of       Ministers.
                             ,r'

   -   In addition to economic and trade cooperation,theSAARC must
 addressitself to security aspectsof the region in the wake of western
 threatsin different parts of world. The successfirlimplementation of
 bilateral agreements
                    and core issuesof economrccooperationamong
the SAARC countries would solve many problems and encourage
developmental
            activities in both bilateral and multilateral fields. South
Asian problemsmust be solvedby SouthAsian themselves.
                                                    Ultimately
it would lead to the ahergence of SouthAsian solidarity. This would
help the development the region and to meetthe challenges next
                   of                                   of
cenhry. During the last fwo years, the political climate for regional
cooperationin South Asia has improved geatly becauseof the interest
shown by the Sfu{ItC countries. The recent developmentsin the
world economy, globalisation, liberalisation, and privatisation have
compelledthem to consolidatethe SAARC as a symbol of regionalism.
Many cormtrieshave tried to meet the challengesof world economy
and neo-colonialismby developing regional groupings. The SAARC
has to strengthen itself z$ a symbol of positive and constructive
regionalism. It will enable the member-countries only to face the
                                               not
                                 224


threatsof neo-colonialism arsoto make the SouthAsian region
                        but
vibrant and resilient. The settingof Group of Eminent
                                                    persons
                                                          (GEp)
in the Male summitheld in rggT is the manifestation the SAARC
                                                    of
vision. This grouphas submitted report in June,l99g in which it
                              its
suggested creationof Economic
         the                     union of SouthAsia by the year
2020- As a preludeto this it recommended create freetradearea
                                       to      a
by 2010 and customs   union by 2015. The goal of South Asian
economicintegration to be achieved
                  has            within a reasonable
                                                   periodof
time to improvethe standard life in this regionin the2lst cenhry.
                          of
                                   225


 Reference:


 l.    chopra, surendra, "Indo-pakistan Rerations" in 1990's
      Mainstream,
                1995


 2. The Hindu, February
                      22,1999.


3. Bhola B.c. "Past cold war developmentin South Asia", Jaipur,
      1995.


        M.B "A security
4. Naque,             perspective SAARC" Defence
                                on             Joumal,
      Vol 15, Oct/Nov
                    1989.


5. The Hindu,(ed)dated
                     March,23,1999.


6. The Hindu,April ll,1999.

                                                    I
7. India, 1993. A Reference Annual, Research,
                                            Referenceand
      Training Division, Ministry of Informationand Broad coasting,
      NewDelhi-l994,p.1G5


8.rbid.,


9. The flindu, April 10,1999.
                              226


10.Frontline,Aprill,1997.


ll. Neighbourhood
                Diplomacy,
                        Mainstream
                                 vol. xxxVIII, No.2,
   Jan.I 990.


12.P.T.I.Data,India,
                   Jan.13-19,311992.


13.Ibid, Janl-7, 23/1992.


14.The Hindu,April,11,1995.


15.Verendra
          Grover,
                (ed)lndia's               policy. lgg2.
                          Neighbors Foreign
                                  and
                  ,
16.The Hindu, Jan2l,1997.


17.Ibid,February
               4,1997.


18.Ibid.Febmary ,1999.


r9.rbid.