Editorials, GS-2, GS-3, Indian Economy, International Relations, Uncategorized

Arctic opportunities

The Indian Express

One of the most dramatic effects of global warming is seen in the Arctic region. In recent years the ice in the Arctic Sea has been melting rapidly. In 2007, a large part of the Arctic Sea became ice free in summer months for the first time in living history.

The melting of the ice in the Arctic Sea has had two major geopolitical impacts:

  • One, new shipping routes between the Atlantic Ocean in the west and the Pacific Ocean in the East, linking Europe with Asia in the north, have opened up. These consist of the Northern Sea Route (NSR) and the North West passage.
  • Second, opening of the Arctic Sea has given way for resource mapping in the Arctic region. The Arctic Sea is estimated to have as much 10 to 20% of the world’s oil and nearly 30% of natural gas.

Importance of arctic region:

  • The territories in the Arctic Circle regions of Russia, Norway, Sweden and Finland have large minerals, particularly, the iron ore. Mineral exploration and exploitation is expected to pick up as Arctic shipping develops further in the future.
  • Apart from the minerals, the Arctic regions will emerge as a new source of fishing. The region is already being called the ‘kitchen of Europe’. The releases of new lands as a result of melting of ice will lead to development of the agriculture in the region.
  • Polar tourism is picking up too. The small Norwegian town of Kirkenes attracts nearly 200,000 tourists in the year.
  • The opening of the new sea routes and the scramble for resources makes for new geopolitics. The Arctic Council, an inter-governmental forum of eight countries — Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the US — set up in the 1996 to deal with Arctic issues has been transformed into an active organisation where the future of the Arctic might be decided.

arctic council

India and the Arctic:

India’s engagement with the Arctic dates back to nearly nine decades when it signed the ‘Treaty between Norway, US, Denmark, France, Italy, Japan, the Netherlands, Great Britain and Ireland and the British overseas Dominions and Sweden concerning Spitsbergen’ also called the ‘Svalbard Treaty’ in February 1920 in Paris.

India has been closely following the developments in the Arctic region in the light of the new opportunities and challenges emerging for the international community due to global warming induced melting of Arctic’s ice cap. Today India’s interests in the Arctic region are scientific, environmental, commercial as well as strategic.

India and the Arctic council:

In May 2013, India became an Observer at the Arctic Council, which coordinates policy on the Arctic. (The Arctic Council has eight states as members, the five coastal states, Canada, Russia, the U.S., Norway and Denmark (through Greenland), and Sweden, Iceland and Finland.)

Other countries that joined India as Observers were China, Japan, South Korea, Singapore and Italy. The United Kingdom, France, Germany, Poland, Spain and the Netherlands are already Observers.

In becoming an Observer, India had to agree to the following criteria set by the Council:

  • Recognise the sovereign rights of Arctic states.
  • Recognise that the Law of the Sea and the U.N. Convention on the Law of the Sea, constitute the legal basis and the legal framework within which the Arctic will be managed.
  • Respect indigenous peoples, local cultures and traditions.
  • Be able to contribute to the work of the Arctic Council.

Why South Korea is important for India in this regard?

It is proposed that India should leverage trade talks with South Korea to have a greater say in the arctic, especially since we can’t have strategic partnerships with Russia or China going by our current US-leaning foreign policy. Our dependence on oil, especially crude oil, should make the Arctic doubly important when looking at India’s perpetual problem of energy security.

  • Currently, oil comes to Asia through the Suez Canal and is stored in Singapore, making Singapore the world’s biggest oil storage hub. When the Northern Sea Route (NSR) opens up, it will be a challenge to Singapore because the NSR is a shorter route and piracy issues plague the Suez Canal. Having sensed this opportunity, South Korea is emerging as the next hub for oil storage by planning to add tanks for storing almost 60 million barrels of crude and refined products by 2020. Korea has also come up with a master plan for the Arctic consisting of three policy goals, four strategies and thirty-one projects connected to the Arctic region.
  • Hence, having a stronger trade relation with South Korea is a politically sound judgement. To begin with, should the FTA come through, potential tariff concessions on Arctic oil (storage or transport) could help India immensely in the next 10-15 years. India is still heavily dependent heavily on fossil fuels with oil constituting more than 30 per cent of India’s total imports. ONGC and other domestic oil producers have been facing falling outputs each year, a trend that will most likely continue as India’s crude oil needs rise.

Way ahead for India:

India cannot remain immune from the developments in the region even though the area is remote and far away. India has a long tradition of polar research. It maintains a permanent research station in Svalbard. Much of the naval equipment India imports from Russia is based and tested in the northern regions of Russia.

The opening of the sea routes and the exploration of hydrocarbons present economic opportunities which Indian companies can also exploit. On the negative side, the enhancement of economic activity in the Arctic Region will accelerate global warming and lead to large sea level rise impacting the global climate to which India cannot remain indifferent.

Conclusion:

Whether or not India likes, the Arctic Sea is unlikely to be governed by an Antarctica type international treaty which makes the region a global common. India should remain engaged with the leading organisations like the Arctic Council where many important decisions on the future of the Arctic region will be taken. These can have direct or indirect impact on India. Indian universities and think tanks should pay greater attention to the study of analysis of the developments in the Arctic Region.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s