The Indian Fault Line

By Mr. Bharat Verma, India.

The genesis of the Indian fault line can be traced to many centuries of foreign domination of the subcontinent. Its scars are deeply etched in our psyche. It inhibits us from developing a cogent strategy for the nation. Notwithstanding the large resources, genius, skills, young population profile and an imposing geographical location in Asia, this limitation manifests in creating multiple fault lines across the national canvas. To develop a successful strategy, a nation must primarily take into account its own characteristics prior to incorporating other elements. For example, a military expert recommended demilitarisation of Siachen glacier with two riders. First, he suggested that there should be a role model treaty like the Indus Water Treaty to ensure Pakistan did not commit treachery in occupying the areas vacated by us. Second, even if it did so, we should make it clear that there will be serious repercussions on other frontiers with the concomitant collateral damage. As a military man he was acutely aware, it will be nearly impossible to regain the territory lost on the glacier given the adverse terrain and climatic conditions. Right? No. Wrong on both counts.

First, Indus Water Treaty is not a role model arrangement for the simple reason that hypothetically, if the direction of water flow were from Pakistan to India, this treaty would never have materialised in the first place! Indus Water Treaty survives because of our magnanimity. Second, New Delhi does not boast of any instinctive characteristic of military retribution ever, except in the case of 1971 conflict. Also, the Indian Fault Line disallows our elders to comprehend or scan the bigger picture. If they do indulge in such an exercise, they would be strategically prudent in not offering demilitarisation of Siachen in isolation to other negative elements that are intrinsic to Pakistan’s overall game plan. The tendency to create their own make-believe world convinced many of our countrymen that the invasions from our land frontiers for centuries could be ignored as the subcontinent assimilated the invaders in the existing society. How misplaced and erroneous, a perception. Invaders from the Northwest/Central Asia ruled over the locals by edge of the sword and forced their assimilation. Our helpless, bewildered ancestors with their petty bickering were left with little choice and therefore, tried to make a virtue out of consistent defeats. It persists in the Indian mind. No wonder; the terrorists across LoC ignore the fancy Cold Start Doctrine!

However, with generational change sweeping the entire spectrum of the Indian society, certain assertiveness is finally creeping in as witnessed during the Tsunami that was handled with finesse by New Delhi. The generation next is extremely focussed, capable of comprehending the entire strategic picture swiftly, and displays a fine balance between tolerance and aggressiveness simultaneously. The key question, in my mind, has always been whether India will be a surrogate or a ‘great power’. Fortunately, the generation next is impelling India towards the great power status. It is not a status quo generation, but remains confounded with New Delhi’s inability to define clear strategic objectives. In a discussion held recently, I asked a former prime minister what our national strategic objectives were? It took him good one and a half hour that included a lunch tuck-in to respond that the national objectives were to have a peaceful neighbourhood! Even if one agrees with that generality, than what exactly was the strategy to achieve it? It did not elicit any answer.

Our national objective should be to promote India as an eminent power in Asia by 2020 by developing it as the alternative geo-economic hub that integrates and influences our extended neighbourhood through economic and military diplomacy. India as a benevolent power is suitably placed and conveniently located, geographically, culturally and otherwise to play this role effectively. Equipped with the most powerful Free Media in Asia that can be intelligently utilised as a weapon platform to further national interests, it needs to develop strategies that influence Cetral, West and Southeast Asia. With all its inadequacies, it remains a democracy worth



emulating that checks formation of a medieval jehadi Caliphate that the terrorist organisations in our vicinity intend to create. It is the only power in Asia that is eminently poised to extend a helping hand to restore a debilitating situation in its surroundings; balance the negative fallouts from an authoritarian regime of China in the region, even as we enhance our multi-faceted cooperation with the dragon. Our strategy in the present unfolding favourable geo-political scenario should be to further strengthen the relationships with the existing friends while adding new strategic partners to the list.

However, it is imperative that the implications of the fault line are understood and erased as the generation next gradually takes over the instruments of governance. Even as we embark on expanding our influence on global scale, we need to resolve the adverse situation prevalent internally and on our land frontiers as explained with the help of a map along side.

• India is ringed by failed / failing states. Pakistan (land boundary with India 3310 kilometers) in the northwest. Nepal (land boundary with India 1751 kilometers) in the north. Bangladesh (land boundary with India 4095 kilometers) in the southeast. Myanmar (land boundary with India 1463 kilometers) in the northeast. India’s internal turbulence is inter-linked with external factors. On our North, in addition, we face China (India shares borders spanning 3440 kilometers) from whom we not only face conventional, nuclear and missile threats but it is also the guru that influences / or uses as proxy other countries mentioned earlier in every possible way to weigh India down. In a nutshell, India’s 14,058 km long land frontier is impacted by hostile or semi-hostile environment. Failed /failing states export instability, terrorism, religious fundamentalism, arms and drugs. Further, in the context of strategy, capabilities are more important than perceived intentions, as China has demonstrated not only to India but also to the world. It has intelligently diverted international focus away from itself to North Korea, Pakistan and countries like Iran through proliferation of sensitive technologies, even as it conveniently works to achieve a super power status by solidifying its status as the ‘Asian top dog’. For example, in the six country nuclear talks with North Korea, it is Beijing that calls the shots. It can switch on or off the negotiations at its will to derive the maximum strategic mileage. In comparison, New Delhi continues to remain in ‘also ran’ category.

• If China is the guru than in Pakistan it has found a suppliant disciple. Pakistan desires to be the Sarpanch of the subcontinent! The territory was given to it with an understanding that the entire Muslim community will transfer itself to the so-called land of pure. It was only approximately 15 percent which accepted the idea and made Pakistan their homeland. Others displayed great wisdom in choosing to remain in India with its liberal philosophy and where the prospects of prosperity were far greater. The community continues to produce Presidents, generals, diplomats, ambassadors, business tycoons etc.who served/serve the country with great distinction. Overall, the community’s contribution to India has been enormous. Since the majority refused to exit, as speciously argued by Pakistan founders, Islamabad should return the excess land given to it. Instead, since its creation, Pakistan has perpetually been resorting to war and export of terrorism to appropriate more Indian territory on one pretext or the other. The irony is that it has not been able to bring prosperity to the territory it holds. The only widely known export worldwide from Pakistan is terrorism. While India’s generation next profile is positive, Pakistan faces a negative profile of indoctrinated and unemployed youth trained in Islamic Jehad Factory against us. The profile becomes more worrisome because of Islamabad’s ethnic cleansing of minorities, that were 12.5 percent in 1947 but are only two percent today. Thus the voice of moderation has become feeble over the years. Besides, Islamabad’s military junta’s agenda to undo India, helps them to retain power. The obsession to harm us ultimately allured Pakistan to become rent-a–state country. It lives on others money. It not only carried out ethnic cleansing of its own minorities but created situations in J&K through terrorism to force the exit of minorities from there.

• Meanwhile, New Delhi instead of permitting and encouraging Indians of all hues to settle in J&K and the Northeast to consolidate the Union, remained a mute witness. Despite being broke, Islamabad continues to fuel anti-India activities through Nepal and Bangladesh with impunity. India remains the target and operating ground for Islamic fundamentalists and terrorist groups orchestrated by ISI, notwithstanding the weekly condemnation that Mushraff offers India after every terrorist attack on our soil. The parrot like statements emanating every month from New Delhi that “Stable and secure Pakistan is in India’s interest” is appreciated. However, the fundamental question is – will Pakistan ever be stable and secure? Never. Therefore, New Delhi needs to evolve an alternative strategy to comprehensively defeat the adversary’s nefarious activities that poses military, nuclear and demographic inversion threats. This is a do-able proposition provided our elders can think beyond the overwhelming burden created by the inherited fault line. In any case, appeasement cannot constitute an element of strategy for any country.

• To attain eminence in Asia by 2020, New Delhi needs to move on three axes simultaneously i.e New Delhi–West Asia, New Delhi–Southeast Asia and New Delhi–Central Asia. Out of the three, the most critical is the New Delhi-Kabul-Tehran-Moscow axis, on two counts. First, for centuries this is the route of invasions and will remain so. With Russia today threatened as much, an opportunity for a tie-up exists which could lend stability to the region. We can only afford to ignore this axis at our peril. Second, as the second largest consumer of oil and gas in Asia, and as one of the engines that will power the world economy, energy security is the most critical factor in India’s national security calculus. Future energy will be based on a combination of fuels – nuclear, oil, gas and coal. By 2010, a substantial amount of oil and gas will be delivered by Central Asia. This resource rich territory will fall prey to Pak sponsored Talibanisation if India and other countries do not preempt it. In fact, the American companies in such an eventuality will be expelled, particularly with Chinese gradually gaining ground and occupying positions that will dictate the agenda in Central Asia in future. Therefore, it may be prudent for American capital to join hands with the Indians in a JV, especially since we enjoy great deal of goodwill there. Many other sensible permutations and combinations for harmony in Central Asia can easily be worked out by New Delhi. This will in turn check the destructive influence of Islamabad and balance the Chinese strategic thrust.

• In the North, similarly Nepal continues to slip into the Chinese sphere of influence due to counter-productive policy by New Delhi. To apply the template of democracy being bandied by the west that is workable neither in Iraq nor in Nepal, we have walked into a trap of our own making. The King’s Army is at present unequal to the challenge posed by the Maoists for want of military hardware supplies and training. In Nepal, the Maoists have a sizeable influence in 45 of the 75 districts, their most formidable presence being in mid-western Nepal. The Maoists have linked up with the Peoples War Group (PWG) in India. The latter in a bid to expand its influence has carved a corridor encompassing the states of Andhra Pradesh–Madhya Pradesh–Chhatisgarh–Orissa–West Bengal–Jharkhand–Bihar as shown in the map. This corridor that has been formed with ease depicts the Indian Fault Line with stark clarity on ground.

• Combine the bleak picture above with Bangladesh and Myanmar borders and the Indian Fault Line engulfs most of the eastern half of the Union. Insurgency in varying degrees impacts on the Northeast with the exception of Mizoram and Arunachal Pradesh and has trans-border dimensions with Myanmar and Bangladesh. The 21 to 65 km wide and 200 km long narrow Siliguri corridor between Nepal and Bangladesh is delicately poised when also considering China in the north. This corridor threatened by Kamtapuri insurgency and demographic inversion by Bangladesh can cut off the only land link to the Indian Northeast and in such an eventuality supplies will have to be maintained by air. Consequently, Bhutan may also slip into the Chinese sphere of influence. There is already a nexus between Maoists in Nepal and ULFA in Assam and is being enlarged to include PWG in India and Islamic terrorist groups in Bangladesh. With Dacca’s geographical interface with five Indian states i.e. West Bengal, Assam, Meghalaya, Tripura and Mizoram; Indian security stands threatened by: demographic assault, arms and drug smuggling, and safe havens for Indian insurgent groups. Islamic groups in Bangladesh under ISI tutelage, Saudi finance, and China’s patronage, have become more vicious, thus adding another dimension to India’s security headache.

• To appreciate the grim reality on land frontiers, it is necessary to take it as one big wall of turbulence running from West to North and from there to the East. Pakistan, of course is the main culprit with military, mullah and ISI mix. Internally, inability to govern is the central issue. Besides, the shortage of Officers to the tune of 14,000 in the Army, ageing profile of the Defence Services, and the snail pace of modernisation of the military (when we have access to the latest technology worldwide and the money in our pockets to buy it) should be a point of worry to New Delhi. I am afraid; it does not cause sufficient stress!

• In this big picture of strategic deficiency, if a vertical line from Central Uttar Pradesh southwards to Eastern Andhra Pradesh were drawn, it would lead to an inelucta le observation that India’s Eastern Half is in turmoil. The Western Half is not only relatively progressive and peaceful but also generates most of the wealth along with the South. Even with this lop-sided generation of wealth by the Union, the Western agencies predict India to be the third largest economy by 2025. Just imagine the result if the Eastern Half along with Kashmir can be put in order through development and bold counter-measures, to ensure the requisite peace and stability, conducive to generation of wealth. In addition, the negative profile of the Eastern Half in times to come will tend to engulf the Western Half, if not resolved. However, if our elders display ineptness in dealing with Nepal, which mirrors Indian culture and is located in our backyard - what exactly can they handle?

To emerge as the great power that can lead Asia, the generation next waiting to take over the instruments of governance by 2010, should erase the Indian Fault Line from the map and psyche before other self-inflicted distortions by the Union on ground can be resolved.

Courtesy: Indian Defence Review, volume 20(3). Indian July-Sep 05 Issue. The writer is Editor, Indian Defence Review

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M&As – The Obvious Way to Go

By Mr. Jasbir Wasu, Vice Chairman, ASIS International New Delhi India Chapter 207, India.

With the passage of the Private Security Agencies (Regulation) Act 2005, Mergers and Acquisitions are seen as the order of the day for the Private Security Industry

The power of the Indian entrepreneur has been the foundation of our economic revival. The government has been an invaluable catalyst in developing new technologies and providing thrust to identified areas of business. In the Private Security Industry (PSI) the growth over the last three decades has been fuelled only by the resilient persistence of the entrepreneur (read crusader) who has, against all odds and obstacles, prevailed and succeeded. The government had failed him time and again on all fronts. There existed no bank loans, subsidies, tax holidays, free trade zones or labour hassles-free environment. Yet the PSI crusaders have plodded on to register their profession and business in the Halls of Parliament and their echoes have obtained recognition for the industry in the garb of The Private Security Agencies (Regulation) Act 2005. Now that the PSI stands at the threshold of a boom era, its pre-eminence in the nation’s economy is well recognized. The vitality of our modern day free enterprise market-based economy has outlasted competing ideologies of state ownership and controls. Countries today are focusing on global economic competition rather than on military initiatives. There is a shift in the Indian government’s thinking from military orientation and state ownership towards promoting and protecting industrial proprietary information. This has prompted the government to view economic sabotage and industrial espionage seriously. Therein arose the need for The Private Security Agencies (Regulation) Act 2005 (PSARA) and the proposed Bill on regulation of Private Detectives & Investigators. The veiled threats to the PSI from the government’s well-meaning PSARA cannot be ignored. What a paradox it would be now to turn and shackle the Indian PSI’s innovative power to some faulted system of government controls. The government must balance a variety of interests and priorities. Reaching agreement takes time. The nodal agency for controlling or regulating the Indian PSI is the Ministry of Home in the center, further devolving into state sub-controlling powers vested with the State Home Secretary or his deputies. Their interests are governmental and wide-ranging. They may fail to direct and catalyze the boom-time growth that the PSI’s self regulating initiative could achieve. The PSI could evolve to be a cohesive structure organized around more narrowly defined goals and objectives. It would not be surprising that significant industry development processes could emerge from the PSI’s united efforts. In the overall Indian constitutional context the government recognizes the tradition of private property ownerships. When the PSI constituents have invested and risked all their labour and assets over the last three decades into a business fraught with hobbling and restrictive government controls of the socialist era, it is reasonable to expect the PSI to want to retain significant say over the rules and regulations to be framed for the state ‘controlling’ the PSI. It would be more necessary and desirable for government to recommend goals and objectives to the PSI and not inject intrusive controls that will directly infect and affect the PSI’s fast growth processes.

The restrictive controls of the Private Security Agencies (Regulation) Act 2005 are surely going to either squeeze and strangle the small and medium private security enterprises or force them into gray areas of business survival, wherein the government loses revenue, the employees lose minimum statutory and employment benefits, the ‘businessman loses’ on legitimate business, the end user exploits cheap security providers and the overall societal order gains notoriety from the possibility of increased crime and social disorder. The scenario is frightening. The alternatives would be for the small and medium PSI enterprises to amalgamate, merge or sell out to larger PSI bodies who are well equipped to handle the stringent contracts or to close shop and become security consultants. The author has perhaps acted in haste but has, in all his prudence, sold his small start up enterprise to a pan India corporate company Eagle Hunter Solutions Ltd., and has successfully negotiated a senior placement on the Board of Directors and continues to draw professional satisfaction.

The private equity investors and cash rich companies will be on a buying spree once the small and medium players, tired of compliance with the PSARA, decide to sell out. Mergers between larger players for consolidation, better margins and additional territorial rights will also be the order of the day.

News of headline grabbing deals will be commonplace. The Delhi based pan India guarding and total solutions provider Eagle Hunter Solutions Ltd., (EHSL) has opened its acquisitions account by taking over a small start up enterprise IPSEC Security & Automation. The deal is for an undisclosed sum but the offer was attractive enough for the proprietor of IPSEC Security & Automation Jasbir S. Wasu to not only sellout but also join EHSL as the Director Corporate and Business Development. The entire staff of IPSEC has also been accommodated. EHSL has added skilled members to its management and has brought on board a professional who is a pioneer and has been in the midst of industry happenings since 1970. The market news has it that SDB CISCO Ltd., the Indo-Singapore venture, is also on the prowl scouting for acquisitions and reportedly has already concluded one lucrative deal. In the National Security & Detective Conference held in Mumbai on 26th September 2005 at Hotel Kohinoor, Dr. Diwan Rahul Nanda, Chairman and Managing Director TOPSGRUP delivered a hard hitting talk to the elite professional gathering wherein without mincing words be clearly announced that time has come when either the small and medium players will have to close shop or labour to raise their performance levels. Dr. Nanda may have sounded harsh but his dynamism pronounced the transparency of his vision. He was not attempting to frighten. He was forewarning all players present that the time had come to pull up their pants and deliver upgraded standardized services to the customer or get ready to he edged out of competitive business. Earlier at the meeting, I had also brought home to the gathering similar messages of hope and boom times for those who would invest in competitive development of business and testing times for those who had been just managing business to eke out profits. Paramjeet Singh Sahi, Managing Director of Mumbai based NISA and Vice President of APSA had also voiced his hopes and apprehensions in a similar vein. It was evident that these industry leaders and visionaries were simply forecasting the winds of change that were likely to blow across the industry with the implementation of the Private Security Agencies (Regulation) Act 2005. Kunwar Vikram Singh, Managing Director of Lancers Network Ltd., and Chairman Convener of the Joint Action Committee of the Security Industry (constituted by OSAC-Overseas Security Advisory Council, APSA - Asian Professional Security Association India Chapter, ASIS-American Society of Industrial Security New Delhi India Chapter, State Associations and others) had also during proceedings of the day sent across a strong message to the gathering of various organizational heads to either "Brace up or fade out".

The economy is on the boil and capital is coursing through its veins. Business assets in the PSI will be bought and sold in the coming two years like never before. The deal could be a corporate acquisition, a private investment, or even an initial public offer (IPO). Rumours are rife that large industrial corporates are eyeing this lucrative service sector and predatory deals and takeovers cannot be ruled out. Sporadic deals like the Indo-British takeover of Industrial Personnel & Security Services Pvt. Ltd. (IPSS) a couple of years ago will be commonplace. The Indian PSI has in the past two years or so witnessed the strategic growth of Group 4, which, through its meticulous mergers and acquisitions has pole-vaulted its empire to a global turnover of USD 7.8billion. G4S the present day entity was formed in 2004, after the merger of Denmark’s Group Falcon and UK’s Securicor. The group’s revenue in India in 2004 was Rs.700 crores and ‘profitability in India is about 6 per cent more than the industry norms’ says the Group Chief Executive Nick Buckles in an article featured in ‘Business World’. Above all, he is betting big on growing fast in the Indian market. In fact, G4S is making India its regional hub for training and sourcing personnel for South Asia & Middle East operations. He sees growth in the Indian market at 30 per cent a year – the group’s fastest growing and most profitable market in the world. Europe and North America have been giving G4S only a single digit growth in the last few years.

The Indian market’s exponential M&A growth in 2005 has also been benchmarked by consulting firm Pricewaterhouse Coopers (PwC) as twice the amount clocked in 2004 at USD 5.2billion. The Bloomberg study reflects similar tidings. India is the fastest growing mergers & acquisitions market in the Asia-Pacific region this year, second only to Japan, says Business World, with GDP growth in excess of 7 per cent. It will be the third consecutive year of the fast growth, a rarity in the Indian economic history.

Large inflows of foreign and private investments into the Indian economy have fuelled this growth. Substantial amounts of foreign direct investments (FDI) this year have gone into acquiring existing assets such as HOLCIM’s USD 800 million investment in ACC. It is said to be eyeing Ambuja Cements for becoming the largest cement player. A major part of the FDI inflows has been denied to the Indian PSI by the newly enacted Private Security Agencies (Regulation) Act 2005 which bans majority foreign holdings. However, economic revival will see bigger inflows into the PSI deals. The strategy wars in PSI have already been heralded with an upscaled surge in poaching of professionals by industry players. This comes as a Godsend for the professional managers who had for long been stagnating with average pay conditions. Security companies are now loosening their purse strings in a first stage attempt of doubling and tripling their market share. However, this predatory hiring frenzy will have to subside or see curtailment through the industry’s consolidated representative association and its emerging self-regulatory processes.

This birth of large-scale corporate ambition in the PSI will see the M&A frenzy take shape in mid 2006. PSI corporates rigid in their functional style may find it difficult to adopt the M&A route for growth. National players are going to be a very important part of PSI economic re-structuring. They are going to tap the huge opportunities to merge and acquire once they shed their inertia. “Our cash resources and flexible culture is fertile for mergers and acquisitions,” says B.R. Lohia, Chairman of Eagle Hunter Solutions Ltd. Buying local business with established regional goodwill and networking strength makes good sense and regional players can not only have their cake but can eat it too. If they make good deals they can sell out and while lining up their retirement nests still manage to retain their managerial positions minus all sorts of licensing pains that the industry will see and endure in the coming months. Regional and city based players may also have to sell out under competitive pressures. As the PSI corporates battle it out for larger established market shares, their growth strategies will have to explore newer territories. And that is why the oncoming wave of deals will be so different from the deals that have preceded it.

Courtesy: Col. (Retd.) Pritam Mehta, Editor, IndiaSafe Magazine, December issue.

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