Friday, March 31, 2017

Indian Cabinet Clears $650 Million For 100 Vajra-T Artillery Systems


The Indian cabinet on Thursday cleared $650 million deal for the procurement of 100 K9 Vajra-T tracked 155mm/52 caliber artillery system from Larsen and Toubro for the Army.

Larsen & Toubro had emerged as the finalist for the contract. L&T in partnership with Samsung pitched the 155 mm artillery guns. Vajra is a variant of the Samsung Techwin K9 Thunder. The artillery guns are specially designed for operation in the desert areas had been shortlisted.

Although the bids were made under the ‘Buy Global’ provision of the defence procurement procedure, the K9 Vajra-T gun will be made at its Talegaon plant near Pune by the L&T.

The evaluation process was completed in September last year, when L&T was informed of the ministry’s decision. After completing the bench marking process, the ministry, on December 22, opened the price bid of L&T as it was the only gun to qualify in the trials.

The first 10 guns are to be supplied by L&T to the Army within 18 months of signing, with the balance 90 guns to be supplied in the next two years. These will be the first howitzers to be inducted in the Army after the procurement of controversial Bofors 155mm guns nearly three decades ago.

Four companies, including the TATA, the OFB and the BEML, bid for the RFP (request for proposal) issued in January 2011.


Govt Clears Proposal To Procure 32 Dhruvs For Navy, Coast Guard


Mumbai, March 30: The government has cleared a proposal worth around ₹8,000 crore to acquire 32 Dhruv advanced light helicopters (ALH) to boost the maritime capabilities of the Indian Navy and the Coast Guard.

A draft proposal tabled by former Defense Minister Manohar Parrikar to buy the indigenously developed ALH from the government-run Hindustan Aeronautics Ltd (HAL) was cleared by the Cabinet Committee on Security. Both the Navy and the Coast Guard would get 16 choppers each.

Boost to HAL

Currently, the Indian Navy has deployed its fleet of Dhruv helicopters at its base INS Garuda in Kochi.

The deal is set to open a new chapter for HAL in defense equipment maintenance, since HAL is to not just provide the helicopters, but also develop the infrastructure for their operation. With this order, HAL is set to enter the sphere of Performance Based Logistics (PBL) for helicopters.

PBL Support

HAL has noted that a unique feature of the contract is the PBL support for five years for 16 helicopters for the Indian Coast Guard.

“The PBL is the purchase of logistics support as an integrated, affordable, performance package designed to optimize system readiness and meet performance goals for the product through long-term support arrangements with clear lines of authority and responsibility,” T Suvarna Raju, CMD, HAL, said in a statement.

Acquisition Strategy

The company added that Performance-Based Logistics (PBL) is emerging as a preferred acquisition strategy for defense acquisition and asset management.

While PBL ensures availability of products to the customer, the responsibility gets transferred to the contractor. PBL also envisages rewards or penalties based on performance.

Export Plans

Incidentally, HAL and Israel Aircraft Industries have an agreement to market the Dhruv helicopter worldwide.

Despite the termination of an earlier contract with Ecuador for the supply of seven helicopters, the companies are in discussion to push further sales. In 2009, India had bagged a deal to supply seven helicopters to Ecuador worth $45.2 million. However, when four of them crashed, Ecuador terminated the contract in October 2015, and put the remaining three helicopters on sale last year.

Sources indicated that the companies are in talks with several Southeast Asian nations such as Myanmar and Indonesia, as well as Sri Lanka, for the export of the Dhruv helicopter.

In all future contracts, sources added, HAL plans to propose long-term onsite maintenance support for more than three years.

HAL is awaiting the EASA (European Aviation Safety Agency) certification for the civil variant of Dhruv. Once Dhruv bags the EASA certification, a whole new market is expected to open up for HAL.

India’s Aerospace Industry: In Privatization Lies The Key

India has signed an agreement with Dassault Aviation to purchase 36 Rafale Multi-Role Fighters

by Gp Capt A.K. Sachdev (Retd)

India made its debut entrance into the international air show circuit two decades ago with an aerospace and defense event — the Aero India Show. The tenth edition (in 2015) was used by Prime Minister Narendra Modi to personally inaugurate the event — both the build up to the inauguration and Modi’s inaugural speech had ‘Make in India’ campaign as their single-minded focus.

Cynical comments lampooned the fact that the ‘Make in India’ campaign itself had been devised by a non-Indian company (Wieden+Kennedy, founded in the US). During the two years since then, Modi’s personal exhortations on ‘Make in India’ did not appear to influence the defense and aerospace market significantly. This year’s event, shorn of all its hype and statistics, was also a damp squib as far as ‘Make in India’ is concerned. This article addresses the relevance of the Aero India Show to ‘Make in India’ and vice versa.

India has made impressive economic progress over the last two decades but it is worth noting that ‘Make in India” cannot be attributed with any credit in this regard. As far as the Aero India Show is concerned, while it has developed into a defense business hub for Asia, it has not palpably helped Make in India — the response from international entities has been lukewarm, largely due to the slow pace of accompanying changes to make the business environment more friendly to global companies (as also their prospective Indian partners).

Indeed, Make in India as a whole is in need of an introspective exercise. The all-important ‘strategic partner’ chapter of the Defense Procurement Procedure 2016 is yet to make its appearance. There was a great expectation that it would be promulgated during this year’s Aero Show but the uncertainty continues.

The 2017 Show attracted 270 Indian enterprises and 279 foreign exhibitors from 51 countries. However, these impressive figures did not translate into equally impressive business transactions. A number of agreements and MOUs (not business deals), projected as Make in India, were signed.

The prominent ones were Thales UK signing up with Bharat Dynamics Ltd (BDL) to assess opportunities for transfer of technology of the STARStreak man-portable surface-to-air missile system; European group MBDA setting up a joint venture with Larsen & Toubro aimed at exploring the missile space for opportunities; and Raytheon Company of the US signing an MOU with a subsidiary of India’s TATA Group to jointly produce the Stinger ground-to-air missile parts in India.

Israel’s IAI (the company that provided the wherewithal to convert an IL-76 into an Airborne Early Warning [AEW] aircraft for use by the Indian Air Force) moved ahead further and signed an MOU with Kalyani Strategic Systems Limited to form a joint venture in India; an agreement with Dynamatic Technologies relating to mini-UAVs ‘to jointly address the needs of the Indian UAV market’ in terms of production, assembly and support; and a cooperative agreement with Taneja Aerospace & Aviation to develop, produce and market crash-worthy seats for both the defense and civil sectors.

The sole business deal to be signed at the Show (a saving grace that warded off a complete whitewash) was between SAAB subsidiary SAAB Grintek Defense and Hindustan Aeronautics Limited’s Avionics Division for transfer of technology for maintenance (in India) of SAAB’s Integrated Defensive Aids Suite system for $8.5 million.

The ‘India’ part of the Show’s title was a bit of a travesty as the Indian content was pitifully meagre and the persistent pursuit of Make in India distressing in its failure to impress.

On the first day of the Show, an Embraer 145 turboprop aircraft with DRDO integration into an Airborne Early Warning & Control (AEW&C) aircraft was handed over to the Indian Air Force (IAF). HAL announced a new Indian Multi-Role Helicopter (IMRH) — its mock-up displayed at the show was mocked at by some as unlikely to be consummated.

The question of what is happening to the Kamov-226T utility helicopter manufacturing line that was to come up at the Tumakuru setup remained unanswered throughout the Show. HAL used the event as an opportunity to flaunt the Light Combat Aircraft (LCA) Tejas, the HTT-40 turboprop trainer, and the Advanced Hawk Trainer aircraft Hawk-I — a joint development with British Aerospace.

The licence-built Sukhoi Su-30 MKI multi-role air superiority fighter and the just contracted for Dassault Rafale French multirole fighter aircraft were also shown off at the Show.

The SAAB Gripen and the Lockheed Martin F-16 were present (and flown during the Show to appreciative audiences) so as to pursue the Make in India grail while Israel, a substantive aerospace and defense partner with 25 years of association with India, had, in the Israeli pavilion, the presence of 11 Israeli companies including IAI. Airbus Helicopters and Bell Helicopters were busy chasing Indian Navy’s twin-engine helicopter requirement which has now grown to an urgent and alarming need.

The Rafale deal with Dassault was a sordid story, yet to be concluded, and has certainly not left the French amused. US President Donald Trump’s cards are still unfolding and there is an element of uncertainty about whither India-US collaboration in aerospace and defense will go.

The US has indeed been pushing for India to purchase the F-16 as it moves ahead to replenish the Indian Air Force’s depleting squadron strength — the impending closure of the F-16 assembly line in Fort Worth is a matter of concern as well as an opportunity (for the Make in India push). The other contender for the 200-300 aircraft hiatus is Saab Gripen to whose procurement would be implicit the fact that it is powered by a US-produced GE engine.

India’s long standing defense sales partner is, of course, Russia but there is a shadow over future deals with Russia due to the US-imposed Specially Designated Nationals (SDN) sanctions on some Russian companies consequent to which Indian banks are unable to provide guarantees to most Russian companies for the purpose of bidding for any Indian project.

The S-400 Triumf air defense missile system deal stands threatened currently due to this reason.

Russia (and before that the Soviet Union) have been India’s most reliable suppliers of modern technology and equipment and even today the most valuable aircraft with the IAF are Russian in origin. The Fifth Generation Fighter Aircraft (FGFA) joint venture with Russia has been see-sawing for the last three years now and the future is not too clear yet on this design although its promise is mouth-watering. Despite these uncertainties, India has no choice but to enter into arrangements with one or more of them.

The reason is that indigenous aerospace industry is lagging dismally in the aircraft manufacturing space. While public investment in the aerospace and defense industrial complexes has been profuse and profligate, results have been incommensurate with the outlay, with the cheering exception of ISRO.

No civil aircraft has been developed and inducted into commercial use while in the military space ‘too little and too late’ is an apt description of Hindustan Aeronautics Limited’s productivity. Tejas, the only fighter aircraft produced indigenously, was thrust down a reluctant IAF’s throat while the Navy resisted staunchly and saved itself from being lumped with a mediocre aircraft (procuring which would have shut the doors on the search for a better one).

So What Is The Prognosis?

HAL’s internal inefficiencies, which have now assumed chronic consistency, are unlikely to produce a leading edge fighter aircraft in the foreseeable future unless HAL is privatized — HAL, with a strong lobby at the Center, will resist tooth and nail.

The solution lies in private participation which, in the field of aerospace, is scant and stunted. While some big groups have made inroads into aerospace manufacturing (more through foreign patronage than indigenous encouragement), their overall contribution is lowly. MSMEs are in an even worse situation. The strategic partners chapter of DPP 2016 is now a year delayed and one hopes it will bring some cheer to private industry, whenever it comes.

India has two biennial air shows (one run by the Defense Ministry and one by the Civil Aviation Ministry) but little to show in terms of indigenous aerospace manufacturing capability. The environment for doing business is one reason but the government’s patronage of the hugely inefficient HAL is the other.

If India is to become a global aerospace manufacturing power, privatization of the aerospace industry is the key. Each passing day, the nation pays for its procrastination in moving towards that objective.

The author is a former Senior Research Fellow at the Institute for Defense Studies and Analyses, New Delhi. Comments and suggestions on this article can be sent to editor@spsindia.in

SPS India


India, Russia Make Progress Toward Ka-226T Helicopter Production


by Vivek Raghuvanshi

NEW DELHI — India and Russia have drawn the road map for the joint production of Kamov Ka-226T light utility helicopters in the South Asian country, kick-starting the $1 billion program.

"With the road map now in place, the production of Kamov 226T helicopters has formally taken off," said a top executive of the state enterprise Hindustan Aeronautics Limited, which was the production agency nominated by the two nations.

Gopal Sutar, the chief of media communications at HAL, said: "The helicopters are to be produced through a joint venture company as per the inter-government agreement between the two countries in October 2016, and the road map for the acquisition is finalized."

The joint production of the helicopters in India now awaits formal approval by Russian President Vladimir Putin, which will lead to the new production entity Indo-Russian Helicopters Private Limited.

Russian government-owned Rostec Corp. will own a 49.5 percent stake in the new entity, and India's HAL will own the remaining 50.5 percent. Thereafter, the Indian Ministry of Defense will issue a single-vendor tender to Indo-Russian Helicopters Private Limited, which will then submit its technical and commercial proposal within six months.

While some analysts say the price of the helicopter remains an concern, the top HAL executive said the issue will be sorted out in the technical and commercial proposal.

Bharat Kumar, a defense analyst and retired Indian Air Force air marshal, said the intergovernmental agreement would have already provided a time frame for the delivery of 40 helicopters by Russia and the supply of kits, sub-assemblies and so on. "I am more than sure that the agreement would also have indicated the price and other financial details, including share holdings in the joint venture," he added.

Under the $1 billion deal for 200 Kamov Ka-226Ts, India will buy 60 helicopters in fly-away condition from Russia while another 40 will be assembled in India and the remaining 100 fully built in India.

The manufacturing will take place at a new complex in Tumkur near HAL's Bangalore helicopter complex.

"Apart from production, the plan also includes setting up repair and maintenance facilities to provide faster support to the armed forces," the HAL executive said.

However, the overall composition of the Ka-226T helicopter in regard to components and systems remains a concern, according to Baldev Singh Pawar, a retired Indian Army lieutenant general and former director general of Army aviation.

Pawar said the engine and some "key systems and avionics have been sourced by the Russian company from the global market," adding that Russia continues to be under U.S. sanctions.

An Indian MoD official insisted "all the obstacles will be cleared," but did not provide details.

India needs a light utility helicopter to replace its aging Cheetah and Chetak helicopters produced under license from France.

"The Cheetah and Chetak continue to be reliable and heavily used helicopters despite their age. The imperative to procure a replacement has as much to do with the growing requirement for light helicopters as creeping obsolescence of the existing light helicopter fleet," offered Vijainder K Thakur, a defense analyst and retired Indian Air Force squadron leader.

Although the Ka-226T program is making progress, the MoD has not quashed its requests for information that it floated separately in 2014 for the joint development of light utility helicopters for the Indian Navy and Air Force; and in this India may keep its options open for the procurement of light utility helos from other sources.


Two Interceptor Boats For Coast Guard Launched

Post induction, these boats will be based at Chennai and Karaikal

Chennai: Two Interceptor boats (IBs) built by L&T Shipbuilding were launched by the Coast Guard Region (East) at Kattupalli in Chennai today.

These boats -- C-431 and C-432 -- will be inducted into Indian Coast Guard (ICG) in May 2017 after completion of extensive trials on fitted equipment and machineries.

Post induction, these boats will be based at Chennai and Karaikal. The boats launched are part of the 36 IBs project contract which was signed between the Ministry of Defence and L&T Shipyard on in March 2010.


Out of these 36 IBs, 24 have been already been delivered by L&T Shipyard at Hazira in Surat, and six by L&T Shipyard, Kattupalli.

According to a MoD statement, these boats would be utilised for day and night coastal patrol and surveillance, anti-terrorist, anti-smuggling operations and coastal security.

The boats are equipped with ultra-modern technology including sophisticated navigational and latest communication system and are capable of operating in tropical conditions with expected life span of more than 15 years.

Built at a cost of Rs 23 crore each, the endurance of these IBs is six to eight hours. A 12-member crew, including an officer and two subordinates, will man these boats.

L&T Shipyard has offered a total solution from ‘concept to design’ for new built, as well as repair and retrofit for both defence and commercial vessels with 100 per cent safety record.


India To Provide China Serious Competition In Low Cost Manufacturing By 2020

‘Make in India’ drive: Workers assembling mobile handsets at Micromax's second facility that kicked off its operations at FAB city near Hyderabad, India

India can provide China a serious competition in cheap goods production in the near future. This topic was raised by Subrata Majumder, Adviser to Japan External Trade Organization (JETRO), New Delhi, and the author of numerous publications on economic issues, in his article “India will be new China in global low cost manufacturing competitiveness” published in foreign media.

“The Delloit survey on manufacturing competitiveness in 2016 ushered India into the future global factory for low cost manufacturing. USA, China, Germany and Japan will continue to be the top four countries in the global manufacturing competitive countries index. India will spurt to 5th rank in the global manufacturing competitiveness index in 2020 from 11th position at present and will outsmart South Korea, Taiwan, Mexico, Canada and Singapore in the race. No other country was projected to grow faster in manufacturing competitiveness like India in the coming five years,” the article says.

According to the author, the factors to be attributed to India’s strength in manufacturing competitiveness are large pool of English speaking scientists, researchers and engineers, coupled with low wage cost estimated 1.72 US dollars per hour in 2015.

“A foreign consultant boosts the foreign investors’ confidence in India’s manufacturing competitiveness, or say Make in India. […] Underpinning the American survey as harbinger for growth, foreign investment in India continued to spur despite demonetization. FDI flow in India surged by 22 percent during the nine month period of April-December 2016 – the record FDI flow ever,” Subrata Majumder writes.

According to him, the global influences of currency turmoil, recessions and the break-down of big trade blocks evoked a new landscape of manufacturing.

“The world is divided into two spaces – low cost manufacturing and high tech with high value manufacturing. While China will lose the powerhouse of low cost manufacturing competitiveness, the Mighty Five – the five Asia Pacific nations, including Malaysia, India, Thailand, Indonesia and Vietnam – will emerge the choice for low cost manufacturing in place of China. India will be the front runner with the four countries chasing,” the expert explains.

In his opinion, now China is in the transition period and will move to high tech manufacturing, conceding more space to India in the low cost manufacturing competitiveness.

“Currently, manufacturing goods in China is only 4 percent cheaper than USA, because wages in China increased by 80 percent since 2010 due to Yuan appreciation,” the analyst reminds.

From his point of view, India’s growth in manufacturing competitiveness jittered China.

“When Apple of US was considering to shift its manufacturing facilities along with supply chain to India from China and India broke the world record of largest number of satellite launch, the Chinese were aghast with India’s progress in manufacturing,” the article says.

According to the author, Chinese media and the think tanks raised concerns over India going ahead in low cost manufacturing.

“If Apple expands in India, more global tech giants may follow suit and China is likely to see a further transfer of the supply chain, given India’s abundant supply of working-age labor and low labor costs. China cannot afford losing jobs,” the expert quotes The Chinese Global Times.

According to the analyst, even some Chinese domestic companies are contemplating to shift to India in the attraction of low cost competitiveness.

“The decisions of Chinese largest telecom company Huawei Technologies Co Ltd and a number of Chinese vendors to set up smart phone manufacturing plants in India perturbed the Chinese media. It beaconed China’s loss of competitive edge and forecasted India to be on the way to become the world’s new hub for manufacturing. Vivo China has already set up a smart phone manufacturing unit in Greater Noida. Xiaomi , ZTE, One Plus, Gionee are in the queue to open their manufacturing shops in India,” Subrata Majumder writes.

Meanwhile, in his opinion, India launching record breaking 104 satellites in single rocket made some observers think that India can send commercial satellites into space at lower cost, giving the country’s competitiveness in the global race for burgeoning commercial space business.

“Chinese concern for losing its manufacturing edge was unveiled when China introduced ‘Made in China’ campaign, immediately after ‘Make in India’. ‘Make in India’ and ‘Made in China’ evoked similar resonance for creation of job opportunities. But, conceptually they are different. While ‘Make in India’ was a call to establish world’s biggest manufacturing hub in the area of low tech and low cost, ‘Made in China’ was to build up China’s manufacturing competitiveness into high tech, such as bullet trains, super computer, advanced roboting, 3D printing, Smart, connected products and others,” the article says.

The author believes that China’s slide in GDP growth engulfs China’s future for its dependence on manufacturing as a potential pillar for growth.

“China grew 6.9 percent in 2015 – a sharp slip from 11–12 percent growth since 2012 and the slowdown is likely to intensify to 6.3 and 6 percent in 2016 and 2017 respectively. One of the reasons was the slow growth in manufacturing activity, due to lower demand in the export , resulting excess capacity. Manufacturing share in GDP slipped from 41 percent in 2007 to 36 percent in 2014,” the expert explains.

According to him, despite the positives, India has many challenges.

“Make in India should be revisited and a wish-list of investors should be included in the policy tool to spur the investment potential in 22 sectors, enlisted in the campaign,” Subrata Majumder writes.

In his opinion, the main barriers to the investors are land acquisition, non- transparent tax system, delay in GST scheme and reluctance to open multi-brand retail to the foreign investors.

“Currently, the important part of ‘Make in India’ is easing of business procedures which were broaching the investors’ initiative to expand investment in India,” the author resumes.


Pakistan Maritime Agency, Indian Coast Guard To Hold Talks In April

Indian Coast Guard Hovercraft H-187, the first of the series of 12 Air Cushion Vehicles (ACVs)

ISLAMABAD: A meeting between Pakistan Maritime Security Agency (PMSA) and Indian Coast Guard will be held next month in New Delhi, the Foreign Office here announced today.

This would be the second meeting between officials of India and Pakistan after their interaction at the Permanent Indus Commission (PIC) meet here last week amid the chill in ties following a series of terror attacks in India carried out by Pakistan-based terror groups.

"The meeting between the Indian Coast Guard and Pakistan maritime agency will be held from April 16-19, 2017, in New Delhi," Foreign Office Spokesperson Nafees Zakaria said.

Indian Coast Guard sources said the two sides will discuss maritime issues, including the fishermen issue, apart from cooperation in search and rescue operations.

The visit is part of the MoU signed between the two maritime security agencies in 2006.

Last July, a three-member delegation of the Indian Coast Guard, headed Director General Rajendra Singh, had visited Pakistan to discuss maritime issues between the two countries.

"This will be a reciprocal visit by a delegation of PMSA headed by their DG," a senior Coast Guard official said.

The announcement of the meeting between the two sides comes after the arrest of fishermen of the two countries by each other's maritime forces for inadvertently trespassing into each other's waters.

More than 100 Indian fishermen were arrested and 19 of their boats seized on Sunday by Pakistan for allegedly fishing in their territorial waters off Gujarat coast.

The PMSA arrested the fishermen and seized the boats off Jakhau coast in Kutch district.

The PMSA had earlier this month also apprehended 115 fishermen and seized 19 boats.

Also this month, the Indian Coast Guard captured nine Pakistani nationals along with a fishing boat off Jakhau coast.

Last month, the BSF had apprehended four abandoned Pakistani fishing boats near Sir Creek in Kutch district, while on January 27, the Pakistani maritime agency had arrested 60 Indian fishermen and seized 10 boats.


Strategic Technology Might Disrupt India-China Status Quo


What does the quest by Chinese companies for “top-to-bottom” domination of digital platforms mean for India?

by Arun Mohan Sukumar

Ant Financial’s (the Fintech arm of the Alibaba Group) effort to acquire MoneyGram, one of the world’s leading money transfer companies, reflects China’s naked ambition to control technology ecosystems of the 21st century.

The range of products and services that Chinese behemoths have eyed (and in many cases, acquired) is astonishing. At the time of writing, this author found that Tencent, the Shenzhen-based messaging platform has bought a five percent stake in Tesla, leading many to speculate its plans for the self-driving car market. Last year, Chinese appliance manufacturer Midea announced its takeover of Kuka, a German robotics company that Europe digital commissioner saw as “important for the digital future of European industry.” Brazil’s most successful “online-discount” company Peixe Urbano was bought by Chinese search engine giant Baidu as early as 2014. And finally in 2015, India’s own Paytm ceded a 40 percent stake in Alibaba, China’s biggest e-commerce company.

These instances — a fraction of the global mergers and acquisitions (M&A) deals that Chinese companies have driven in the last five years — reveal a trend of strategic acquisition of technologies. They are attempts at vertical convergence and control of digital platforms. For example, by owning or being the dominant stakeholder in an e-commerce company (Alibaba), a payment gateway (AliPay/Paytm) and a money transfer platform (MoneyGram), Ant Financial aims to create an interoperable system that starts with a consumer receiving money in her e-wallet, and ends with her spending it on products anywhere in the world. Its investment in a leading robotics company (Kuka) suggests Midea is betting on an intelligent, Internet of Things driven environment, where “traditional” appliances are seamlessly connected by sensors responding to the needs of their owners. If consumer needs can be gauged without human input or intervention, they can be also be addressed by robots who automate daily tasks like cleaning or cooking. These M&As were likely given green signal by the political leadership in Beijing, given the close ties between China’s internet giants and the Communist Party.

What does the quest by Chinese companies for “top-to-bottom” domination of digital platforms mean for India? In an extreme scenario, Chinese applications and devices could not only become the custodians of Indian users’ data, but also the gatekeepers of security while shaping consumer behavior. To an extent, this is already the case with four of the top Chinese smartphone models (by market share) in India. The pervasive influence of Chinese technologies is an eventuality of enormous geopolitical significance for New Delhi. Should China gain levers over digital markets, it will mark the second phase of the economic relationship between both countries, heralding a shift from a demand-driven market for Chinese products to being necessity-driven. Needless to say, this scenario will curtail the strategic and military options of India’s foreign policy planners.

The pervasive influence of Chinese technologies is an eventuality of enormous geopolitical significance for New Delhi.

A second and more probable outcome is that New Delhi and Beijing will collaborate to tailor products and services for the Indian market. Current developments reflect the desire on both sides to pursue such efforts. The fourth India-China Strategic Economic Dialogue in October 2016, sought to strengthen cooperation “to take advantage of digitization in all areas of economy; […] jointly promote manufacturing technology, [promote] cooperation through the partnership of enterprises between the two countries in the area of high performance computing, smart cities [etc.].”

The communique also suggests: “[T]he complementary strengths of India and China in ICT sector, specially computer hardware of China and computer software of India should be leveraged for competitive and economic advantage.”

The goal of producing Indian technological solutions for Chinese platforms is many years away, but there is no doubt that Beijing will have to work with Delhi if it wants to further service India’s platform economy. Security testing of Chinese telecom equipment as well as applications, for instance, will be a sticking point for both sides to resolve at an early stage of talks.

No matter which scenario is realized, technology cooperation will cast away closely held beliefs that currently dictate Delhi’s approach with China.

  • The political relationship will be subsumed by economic factors, prompting Indian regulators to work with their Chinese counterparts to secure the digital economy. As a result, big-ticket, intractable issues like NSG membership or UN Security Council reform may be pushed to the back burner. That is not say such issues will matter less to India’s foreign policy moorings, but their potential to act as a spoiler in India-China ties may consequently diminish.

  • The Chinese private sector will emerge as an influential factor in bilateral ties. While it is true Chinese businesses are connected to the political establishment in Beijing, they are also driven by bottom lines and market shares. As their India operations expand, Chinese companies will exert considerable influence over the CPC, and perhaps even steer the trajectory of the relationship.

  • India and China will likely work together to develop technical standards and protocols for the interoperability of devices and digital platforms in Asia. Asian digital ecosystems are currently fragmented, given that no one company has a monopoly over its infrastructure. As Chinese devices and applications continue to penetrate the Indian market, they will also have to design technologies that address security concerns indigenous to India: vulnerabilities in cheap, handheld devices, the linking of mobile phones to India’s unique identity database, encryption standards for communication platforms, etc. Technology-based cooperation may also spillover into regional cooperation for standard-setting, given that digital economies in southeast and central Asia are booming.

  • Beyond technology standards, New Delhi and Beijing may also be prompted to coordinate national policies on data protection (or at a minimum, compare notes on how best to harmonize them) given the inextricable linkages between Chinese platforms and data from India contained in them. Policy questions addressed may include: What data should remain within Indian borders? What safeguards will apply to data of Indian citizens stored abroad? How can both sides create information sharing channels between Indian and Chinese law enforcement agencies to tackle cyber crimes? Policy coordination is an inherently political exercise, which will require high-level representation, making up for its deficit in current bilateral discussions.

  • Wary of expanding Chinese influence, American and European technology manufacturers and platforms will court the Indian market, offering New Delhi a bargaining chip that could be used for political ends. Currently, Chinese apps do not compete with their western counterparts in many markets, but that is set to change as they turn towards developing English language platforms.

Efforts by Chinese companies to control digital ecosystems in Asia and beyond must wake Indian policymakers up to their worrying consequences.

As digital platforms converge, it would be ill-advised if India ceded space to its eastern neighbor to determine the rules of governance in cyberspace. At the same time, economic and business imperatives driving Chinese companies to India offer an opportunity for New Delhi to bring China to the negotiating table. While China is able to pump money and resources into developing new technologies, their utility and interoperability will be determined by consumers in emerging markets like India. Regulatory norms or technology standards designed to exclude Chinese players can seriously hurt Beijing’s economic prospects, which is a card India should not hesitate to deploy. The negotiation process that follows may ultimately break the political stalemate that the relationship is currently hostage to.

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Resurgent Russia Joins Great Game In South Asia


South Asia’s foreign policy calculus is increasingly complex as Russia steps up to vie for power with the US.

by Harsh V Pant

Russia’s efforts to emerge as a more consequential global security actor center on diminishing US influence, and its next battleground could be South Asia.

Russia has revamped its South Asia policy in recent months with a major outreach to Pakistan and stepping forward as a power broker in Afghanistan, its former stomping ground. With the help of its new found strategic partner China, Russia intends to checkmate the United States’ regional pre-eminence. But the maneuvering has also brought Moscow in opposition to New Delhi with which it has traditionally shared robust ties. Any new power equation in the region will have long-term implications.

Since the 1960s Russia has been a close partner of India in South Asia. This relationship has stood the test of time even as global power equation changed after the end of the Cold War. During the Cold War, the high point of the relationship was the signing of the 1971 Indo–Soviet Treaty of Peace, Friendship and Cooperation, which signaled a decisive shift away from the West in response to an emerging US-Pakistan-China axis in South Asia. Though not an explicit military alliance, this treaty was sharp departure from India’s professed policy of non-alignment, and New Delhi emerged a close partner of the Soviet Union during the Cold War. The treaty in effect created deterrence against any form of US-Pakistan-China detente and rendered India increasingly dependent on the Soviet Union for defense capabilities.

The relationship’s economic dimension was never strong, and the fall of the Berlin Wall exposed the foundations of Indo-Russian ties to new vulnerabilities. Russia’s position as India’s defense supplier of choice has increasingly come under pressure since the 1990s when the West opened to India. Still, Russia and India continued to recognize the need for each other. India, the world’s top defense importer, is overseeing an upgrade of its mostly Soviet-era military equipment. Russia is the world’s second largest arms exporter, trailing the United States. In 2016, India and Russia signed major defense deals worth billions of dollars, including pacts for five S-400 Triumf air defense systems, four stealth frigates and a joint venture to manufacture Kamov-226T light utility helicopters in India.

India is a challenging market for US defense exporters, and Russia has traditionally been willing to go along with “make in India” policies promoting indigenous production. For its defense matrix, India cannot afford to marginalize Russia as it still is the only country selling critical strategic technologies to India.

In recent years India has grown concerned about Russia’s growing closeness to China and especially the overtures to Pakistan. Vladimir Putin, intent on viewing South Asia through the prism of Russia’s geopolitical competition with the West, may have decided that the time was right for tilting towards Pakistan. US-Pakistan ties may have hit their nadir and the new US administration, expressing isolationist tendencies, remains consumed by multiple domestic crises.

The global arms market has become more difficult for Russia to navigate, with China deciding to produce its own weapons rather than procuring them from Russia. Moscow needs new buyers.

Moscow and Islamabad held their first joint military exercise in September 2016 and their first bilateral consultation on regional issues in December. Russia lifted an arms embargo against Pakistan in 2014 and will send four Mi-35M attack helicopters this year. Russian troops participated in this year’s Pakistan Day military parade. And the China-Pakistan Economic Corridor linking Xinjiang to the Pakistani port of Gwadar could be merged with the Russia-backed Eurasian Economic Union.

But causing real consternation in New Delhi is Moscow’s decision to side with China in ensuring that Pakistan does not get isolated globally. At the 2016 BRICS summit in Goa, Russia did not back India’s demand to name two Pakistan-based terror groups as perpetrators of terrorism against India, thereby shielding Pakistan from censure.

This shift in Russian stance is also evident in the role that it envisions for itself in Afghanistan, coming almost four decades after the 1979 Soviet invasion of the country. Russia hosted a February six-nation conference in Moscow on Afghanistan’s future with participation from India, Iran, Pakistan, China and Afghanistan. This was Russia’s second initiative after the first trilateral conference in December, including only China and Pakistan.

The December conference agreed upon “a flexible approach to remove certain [Taliban] figures from [United Nations] sanctions lists as part of efforts to foster a peaceful dialogue between Kabul and the Taliban movement.” The three states underscored their concern “about the rising activity in the country [Afghanistan] of extremist groups, including the Afghan branch of IS [the Islamic State]” and underlined that the Taliban is a necessary bulwark in the global fight against the Islamic State. Kabul and other partners like New Delhi were surprised, while the Taliban was ecstatic. “It is joyous to see that the regional countries have also understood that the Islamic Emirate of Afghanistan is a political and military force,” noted a statement issued on the Taliban’s behalf. “The proposal forwarded in the Moscow tripartite of delisting members of the Islamic Emirate is a positive step forward in bringing peace and security to Afghanistan.”

Russia faced flak for not inviting Afghanistan to the December conference. The US-backed Afghan government had registered a strong protest after its exclusion, underlining that, regardless of participants’ intentions, excluding Kabul would not help stabilize the country.

So Moscow was more careful for the February meeting, broadening outreach by inviting India, Iran, Afghanistan and most regional stakeholders while pointedly excluding the United States and NATO. It was left to Afghanistan to underscore US centrality in the country’s unfolding dynamic and to push for inclusion of the United States as one of its most important partners to “end war and usher in sustainable peace in Afghanistan.”

Afghanistan also took on Pakistan at the conference when it underlined the need to “effect a change in the behavior of certain state actors” to end the violence that has reached record levels in the last year. Afghanistan also strongly pushed back against the “good Taliban, bad Taliban” discourse being championed by Russia, China and Pakistan. The Afghan representative at the talks, M. Ashraf Haidari, argued: “the key challenge to the process remains a policy selectivity by some to distinguish between good and bad terrorists, even though terrorism is a common threat that confronts the whole region, where if one of us doesn’t stand firm against it, others’ counter terrorism efforts will not bear the results we all seek.”

Of course, New Delhi welcomed that stance, arguing that Afghan-led and Afghan-owned reconciliation efforts should be facilitated by “friends and well-wishers of Afghanistan.” Targeting Pakistan, India also reiterated that denying “safe havens or sanctuaries to any terrorist group or individual in countries of our region,” remains central for the long-term stability of Afghanistan.

Russia is now planning to host another round of talks on the conflict in Afghanistan on April 14, and 12 countries, including the United States and five Central Asian nations, have been invited to attend. Ahead of this meeting, Pakistan recently brought together seven top Taliban leaders in Islamabad to cajole them for the peace talks.

Moscow has established itself as the leading power broker in the conflict-ridden country, since most NATO forces withdrew in 2014 and where 8,400 American soldiers remain. NATO’s supreme allied commander in Europe, General Curtis Scaparrotti, recently warned that he had “seen the influence of Russia of late – increased influence in terms of association and perhaps even supply to the Taliban.”

Russia, in concert with China, challenges US strategic priorities on multiple fronts, and regional theaters like South Asia are likely to face the brunt of this geopolitical competition, putting older relationships under strain even as new ones take shape. The new Great Game for South Asia has only just begun.

Harsh V Pant is a distinguished fellow and head of the Strategic Studies Program at Observer Research Foundation, Delhi, and a professor of international relations at King’s College London


China Willing To Push Forward All-Weather Ties With Pakistan

It was the first-time China's People's Liberation Army troops took part in a parade in Pakistan

Besides joint anti-piracy training with Pakistan navy, Wu said China also worked with the Indian navy in the region to escort ships.

China Thursday said it is willing to work with Pakistan to push forward their “all-weather” strategic partnership, as it highlighted the significance of its troops’ participation in the ‘Pakistan Day’ parade for the first time. The Chinese military, at a media briefing, today screened a video of the combined contingent of Chinese army, navy and air-force personnel taking part in the Pakistan Day parade in Islamabad on March 23.

“Hearing it 100 times is not as good as seeing it for once,” China’s Defence spokesman Col Wu Qian said ahead of the screening of the video, a rare gesture to showcase solidarity with Pakistan.

It was the first-time China’s People’s Liberation Army (PLA) troops took part in a parade in Pakistan.

Screening the video, Col Wu translated into Chinese the Urdu slogan of “China-Pak Dosti Zindabad” (Long live China-Pak friendship) raised by the PLA troops during the parade. Saudi Special Force’s contingents and Turkish Janissary Military Band also participated in the parade.

Elaborating the relations between the two countries following the launch of China-Pakistan Economic Corridor (CPEC), Wu said the bilateral military relations are signified by “three key words”.

“In terms of friendship between Chinese and Pakistani armed forces, three key words are All-weather brotherly friendship, substantive mutual support and assistance and deep mutual strategic mutual trust,” he said.

“We are willing to work together with Pakistan side to push forward continued development of China-Pakistan all weather strategic partnership,” he said.

Wu, however, played down the recent write-ups in the state media that the PLA participation in the Pakistan parade is a first step for China’s military toward safeguarding regional stability and world peace.

After the parade, Global Times quoted a “military source” as saying that the PLA’s participation in the Islamabad military parade is another step for China’s army to go abroad to safeguard regional stability and world peace.

Asked to elaborate on Chinese military playing a role in regional stability especially in the context of India-Pakistan military tensions, Wu said China is willing to conduct exchanges and cooperation in defense field with various countries to strengthen mutual trust.

“Also we have an active participant in regional and international security affairs. We are a staunch force in maintaining world and regional peace and stability,” he said and referred to Chinese navy’s anti piracy operations in the Gulf of Aden.

Besides joint anti-piracy training with Pakistan navy, Wu said China also worked with the Indian navy in the region to escort ships.

“In regional counter terrorism, China has conducted joint exercises and training with both Pakistan and India, so as to improve the joint capabilities of relevant countries in maintaining regional peace and stability under the new situation,” he said.

He declined to comment on Global Times report after the Pakistan Army Chief Gen Qamar Javed Bajwa’s recent visit that China plans to step up missile cooperation with Pakistan, including ballistic and cruise missiles, besides joint mass production a multi-role combat aircraft.


India Must Abandon Its Namby-Pamby Approach To Dealing With Kashmir


After the recent encounter in Kashmir’s Budgam, where the army found itself fighting on two fronts – terrorists in front and stone-pelting mobs behind – India must hunker down for a long war of attrition with the Jihadis. Three “civilians” – a misnomer for Jihadis in civilian garb but without AK-47s – were killed as the army decided to strike back.

It is good that the Army Chief has made good his promise that those aiding terrorists will be dealt with like terrorists themselves, but there are discordant notes being struck by politicians who still think talks can sort out the situation, including Chief Minister Mehbooba Mufti and Congress leader P Chidambaram.

It is silly to expect that talks with Pakistan or Kashmiri separatists will somehow bring peace to the Valley. It won’t. The only way peace will come is when the security forces wear down the Jihadis and Pakistan-backed terrorists over years, and the local population realizes that they have no alternative but to be a part of secular India. There is not going to be any instant nirvana in this deadly game.

We made a huge mistake when we failed to reverse the exodus of the Pandits in the 1990s. When ethnic cleansing is not quickly reversed, it changes the ground situation. Those evicted grow roots elsewhere, and the Valley ceases to be a place for return. Older Kashmiris may occasionally regret the exit of the Pandits, but their children don’t have that problem.

This was precisely Pakistan’s plan. Once you make the Valley a Muslim-only place, a generation will grow up thinking Kashmir is only for Muslims. Most of today’s teenage stone-pelters have probably not seen a Pandit in their lives, and for them Kashmiriyat has only a territorial meaning. This is why one top Hizbul Mujahideen commander, Zakir Rashid Bhat, no longer felt it necessary to pander to Kashmiriyat or even azaadi. He was brazen enough to emphasize that the fight was for Islam, and nothing else. The malcontents in the Valley thus think nothing of waving Pakistani or Islamic State flags, for this is the goal they now find easier to identify with – with no Hindus in sight in the Valley.

There is no easy way out of this mess, and we must grit our teeth to claw back the advantages we had earlier. The tough decisions we need to take include the following:

First, we need to unilaterally change some of the terms of Kashmir’s accession, especially clauses that allow no Indian to settle in the Valley. We must repopulate the Valley and change its demographics – this can be held out as a threat to force Kashmiri militants to abandon their violence, and if they don’t, the threat must be made good by changing the law. We need a Rajya Sabha majority for such changes. Hopefully, this can happen by early 2018-19. Ideally, the Congress party should be brought on board, but if needed, this must be done unilaterally. Without displaying the loaded gun of a potential change in demographics, the Valley will be overrun by Jihadis. In any case, if J&K is a part of India, a part of India must be free to settle in J&K.

Second, there must be significant investment in intelligence and irregular fighting units apart from the state police and central security forces. The Jihadis are now targeting Kashmiri police officials at home, which means they will now feel intimidated. The only way to counter this is by using irregular forces to fight the jihadi groups. This is going to be a long-drawn war of attrition, and we must prepare for this. The main job of fighting terrorists must be done by irregular units, and not the army. The Central Reserve Police Force (CRPF) and the army must be in the background. Another thought: if many of the stone-pelters are paid agents or mercenaries, as this India Today investigation proves, one wonders why the Indian state finds it so difficult to buy their loyalties in some way.

Third, the Pandits must be sent back to the Valley in defensible enclosures. Their exile needs to end, and India’s war can be better fought if Hindu Kashmiris are there to provide a counter-argument to Islamism. The Pandit exile cannot continue indefinitely. If the Jihadis oppose their re-entry, it will expose them for what they really are: Islamist bigots masquerading as freedom-fighters. If the Mehbooba Mufti government demurs, the Center must allow it to fall, and use Governor’s rule to get this done.

Fourth, India must keep up the pressure for independence in Baluchistan and Sind so that Pakistan gets a renewed message that its own existence will be in peril. The Chinese must be told quietly that their interests in Gwadar and Baluchistan will be safer if they are willing to lean on Pakistan to end the insurgency in Kashmir. China has a long-term interest in building a road to Gwadar Port, which they are financing, and also the China-Pakistan Economic Corridor (CPEC), which has to pass through Gilgit-Baltistan. China is believed to be pressuring Pakistan to declare Gilgit-Baltistan as its fifth province so that the CPEC passes through officially-declared national territory, and not Pakistan-occupied J&K. Even though India is not about to give up its claims to Pakistan-occupied Kashmir, including Gilgit-Baltistan, the incorporation of the latter into the Pakistani state means that the old UN resolutions on holding a plebiscite are invalid. It also means that azaadi is no longer a tenable objective of the Kashmiri struggle, with Pakistan having swallowed Gilgit-Baltistan. We should have no qualms in making J&K a fully Indian state.

The fight in J&K is between Islamism and secularism, not India and Kashmiriyat. We should have no doubts on what our end-goals should be here. Full incorporation of J&K into India.


Nikki Haley Says Open To Ideas On UNSC Reform


NEW YORK: US Ambassador to the UN Nikki Haley said she is open to ideas on the reform of the United Nations Security Council but did not name countries such as India that could be permanent members in an expanded Council.

Haley, addressing a question on Security Council reform following her speech yesterday at the Council on Foreign Relations (CFR), said she is still in "learning mode" and knows there is conversations of reform of Security Council.

"I'm open to hearing anyone on what they have to say and looking at it and going further," she said.

CFR President Richard Haass asked her about the Security Council reform and said some of the previous US administrations have raised the issue of expanding the number of permanent members to include Germany, India and Japan to "better match" the realities of the world of 2017.

Haley, 45, was the fifth Indian-American to be appointed to a senior position in the Trump administration. She was serving her second term as the governor of South Carolina when President Donald Trump named her his nominee for the UN job this year.

Former US president Barack Obama had endorsed India's long-held demand for a permanent seat on the Security Council, saying in a speech to the Indian Parliament in 2010 that he looked forward to a "reformed United Nations Security Council that includes India as a permanent member."

India has for long been pushing for completing the reforms of the Security Council.

In a bid to get the reform process moving, India and other G4 nations earlier this month said they were willing to not exercise "veto" as permanent members of a reformed Security Council until a decision on it has been taken.

The other G4 nations are Brazil, Germany and Japan.


Pak ISI Trying To Instigate Innocent Boys In Kashmir: J&K DGP


JAMMU: Jammu and Kashmir police chief S P Vaid today said that the Pakistan ISI was trying to instigate and provoke innocent young boys to come out from their houses and reach the site of exchange of fire in Kashmir Valley.

Vaid met Union Minister of State in PMO, Jitendra Singh in New Delhi yesterday and held a detailed discussion with him about the prevailing situation in Kashmir, in the aftermath of Tuesday's violence which resulted in the death of three persons and injuries to others as well as to the security personnel.

"As per the inputs received, Pakistan ISI is trying to instigate and provoke innocent young boys to come out from their houses and reach the site of exchange of fire," an official statement quoting the Director General of Police (DGP) said.

"There are also recorded messages indicating that as soon as an encounter begins, the Pakistan propaganda mill immediately gets into action," the DGP said.

Singh said that it is the responsibility of both the administration as well as the civil society to make the youth of Kashmir understand the reality.

"Time has come, for that the common youth of Kashmir should demand that if this so-called Jehad is so holy and great, then each of the separatist or Kashmir-centric leader should set an example by sending their own children to pelt stones and to stand in the line of fire during the counter-militancy operations," he said.

Lauding the role of security forces including the army, paramilitary and Jammu and Kashmir police, Singh said, we have among the best forces in the world and the nation is eternally indebted to them.

Therefore, he said, none of us should say or do anything which tends to lower the morale of the forces.

Describing the stone pelting as a "mercenary" exercise, Singh lambasted the "so-called Kashmiri leaders who are sponsored by Pakistan and are separatist only by convenience".

Denouncing the remarks of a former chief minister who is contesting Lok Sabha by-poll and using separatist rhetoric, Singh took a dig saying, "If he becomes a minister tomorrow, he will overnight turn a nationalist."


Indian Army Chief To Arrive In Dhaka Friday


Ahead of Prime Minister Sheikh Hasina’s upcoming New Delhi visit, Indian Army chief General Bipin Rawat is scheduled to arrive in Dhaka on a three-day visit Friday.

This visit is part of the ongoing high-level exchanges between the Armed Forces of both the countries, says a press release issued by the Indian High Commission in Dhaka.

He will lead a four-member delegation during the visit with his wife Madhulika Rawat accompanying him.

He will call on President Abdul Hamid, Prime Minister Sheikh Hasina and the senior army officials.

He is also scheduled to address the student officers at the National Defence College in Mirpur.

According to the statement, Bipin will visit Dhaka on an invitation from the Chief of Army Staff Bangladesh Army General Abu Belal Muhammad Shafiul Huq.

Bangladesh Army chief Abu Belal Muhammad Shafiul Huq visited India in September 2015 and the chiefs of Air Force and Navy had also visited India in 2016.

The Indian Air Force and Navy chiefs had also visited Bangladesh in 2016. The Indian army chief will also be visiting Nepal as per the long standing tradition.

The Indian Army chief shares a historic association with the Bangladesh War of Liberation.

His battalion had fought with distinction in the Northern Bangladesh and participated in battles at Pirganj, Goraghat, Gobindganj Saulakandi, Mahasthan Bridge and Bogra. During this visit he will also visit some of these battle sites.


ISIS Module In Ujjain Train Blast Made Failed Bid To Target PM Modi's Rally: NIA


NEW DELHI: The ISIS-inspired terror module, allegedly involved in the Ujjain train blast, had made a failed bid to carry out an explosion at Prime Minister Narendra Modi's rally in Lucknow on Dussehra last year, according to NIA probe reports.

According to the reports of interrogation of Mohammed Danish and Atif Muzzafar accessed today, the duo, along with other friends owing allegiance to the banned ISIS, had planned to plant a bomb at Ramleela ground in Lucknow where the prime minister was scheduled to address a rally on October 17 last year.

The duo is currently in the custody of National Investigation Agency (NIA).

The group, says Danish in his statement, was desperate to carry out blasts to "test the level of radicalization" and in the process had made several unsuccessful attempts at planting bombs at various places.

He alleged that Atif Muzzafar, who was the self- designated 'Amir' (chief) of the module, assembled a bomb using steel pipes besides chandelier bulbs for which he also had extended help.

Atif is among the six person arrested by the NIA after the March 7 blast at a railway track in Ujjain in Madhya Pradesh.

The accused claimed that Atif had procured two packets of splinters (iron ball bearings) from a cycle shop and also carried out a reconnaissance of the venue with another accused identified as just Asif.

Atif, in his statement, corroborated the version of Danish and said they went to buy cracker material from Moolganj in old Kanpur.

Atif said in his statement that he gave the bomb to G M Khan, a retired IAF personnel, who took it to Lucknow on his bike which had a IAF sticker on it.

On October 11, he along with other members of the group went to Lucknow where they purchased a new SIM card and called Khan so that the bomb could be placed in or around the venue.

Before Dusherra night, according to Danish, Atif readied the bomb and switched on the timer and kept it in garbage bin near the venue of the rally.

The ISIS-inspired module was eagerly waiting for news of a blast which never came, according to the reports.

After two days, Atif went to the spot to check the fate of bomb but could find only a few wires which he had used in the crude bomb, Danish said in his statement.

Giving other details, Danish told the interrogators that Atif had learnt assembling of bombs from 'Inspire', an Internet magazine which is reportedly unloaded by a group affiliated to banned al-Qaeda.