Modi’s Three-nation Visit: As it Turned Out

Modi's Three Nation Tour Image

Modi's Three Nation Tour ImageNarendra Modi recently went on a six-day three-nation tour in East Asia. His tour started with the visit to China that lasted from 14 to 16 May. The next stop on the itinerary was Mongolia where the Indian PM arrived on 17 May. The last port of call was South Korea. This is the first time that Modi visited China as a Prime Minister. This is also the first time in several years that an Indian leader visited Mongolia. This was also Modi’s first visit to Seoul since taking office a year ago.

Expectations from the China Visit

Traditionally, there are so many areas that this visit expected to address. The border dispute has been a bone of contention between the two countries in the last 50 years. One expects that both countries will sit down and find a peaceful solution to this issue, which refuses to die. However, it is pretty evident that the main intention of this tour by Modi was economic – getting more investments on board and looking at newer areas of cooperation and strengthening existing ones.

What Transpired?

In China, Modi signed several deals worth $10 billion with the CEOs of some of the leading companies. Both the countries also reached a consensus on improving the railways sector of India. The Indian PM and the Premier of China worked out plans on issues such as increasing the speed of trains to 160 km per hour. Both the countries signed 24 bilateral agreements covering crucial areas like education.

Expectations from the Mongolia Visit

Mongolia, as has been said already, is a virgin territory for India as no Indian PM after Jawaharlal Nehru had ever gone there. The only visit by a prominent Indian leader there was in 2011 by the then President, Pratibha Patil. One of the reasons for Modi’s visit to Mongolia was to get access to the abundant uranium resources of the landlocked Asian nation. In addition, the country has rich reserves of copper, iron and coal. The experts were keen to see what approach Modi would take to firm up the relationship with Mongolia.

What Transpired?

Narendra Modi has announced that India will furnish a credit line of $1 billion to Mongolia. This amount is expected to help Mongolia improve its economic capabilities as well as infrastructure. Modi also announced India’s move to help Mongolia’s defence establishment establish a cyber-security centre. Both the countries also took their partnership to a strategic level.

Expectations from the South Korea Visit

With South Korea, it was mostly about strengthening the existing ties. At the moment the bilateral trade between both the countries amounts to somewhere around $16 billion and both India and South Korea want to see it increase. Modi was also supposed to pitch for more investment by Korean companies in India. Both the nations were expecting something significant to come out of this address at the India-Republic of Korea CEOs forum.

What Transpired?

India signed an agreement to avoid double taxation with South Korea. This is a revised version of one that had been signed before. Both the countries also consented to start discussions from mid-2016 on the possibility of a free trade agreement, which can provide a significant fillip to the economic cooperation. Park Geun-hye, the President of South Korea, and Modi also organised a summit where both the leaders exhorted their respective business fraternities to come together and play a bigger role in using the positive relations between the two nations for greater economic prosperity.

Impact on Indian Economy

The biggest benefit that India will accrue from Modi’s visit to Mongolia is that it will get access to its rich mineral resources, especially uranium. Even though Mongolia will not be able to start the supply process immediately at least it will be expedited.

China has signed some key pacts with India. It already has a significant presence in the Indian market, especially in the IT sector. There are companies such as Huawei sponsoring Royal Challengers Bangalore in the IPL. However, it is the railway sector where the benefits of association with China will be felt the most. Modernising the railways is a major dream of Modi and China can play an important role.

As of now there are 300 companies from South Korea operating in India. In all, they have invested approximately $3 billion and provided employment to almost 40,000 people. With better economic ties, there will be greater investment and more jobs for all. Experts are also saying that shipbuilding is one industry that will benefit because of India’s greater economic cooperation with South Korea. On the other hand, Indian companies will also gain access to IT and pharmaceutical markets of South Korea.

Impact on Relations with China

Narendra Modi has stressed time and again, and with good reason, that there needs to be peace in Asia for the region to prosper. For peace to become a reality in Asia it is important that both India and China keep their differences aside and come together with the aim of making Asia the hub of global economic activity. It is difficult but not impossible.

Indian presence in Mongolia is something that China will be watching keenly. As it is, Mongolia is still regarded by some in China as a part of the country and the former is looking to come out of its economic dependence on China. India could offer a viable alternative in that regard. China will not wish to cede ground to India in Mongolia.

It has also objected to India’s increasing presence in the South China Sea region in countries such as Vietnam, Myanmar and Philippines and one feels that there could be some problems in the future regarding India’s activities in Mongolia as well just as Pakistan has complained of India’s increasing clout in Afghanistan. However, it is also expected that both the countries will understand the basic fact that the benefits of association are so very important and thus, look for solutions rather than exacerbate the problems.


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