India and Brunei, the largest democracy and one of the oldest monarchies, have built their bilateral diplomatic relations, based on their historical and traditional relationship which was established on its civilizational linkages.
Officially known as the Abode of Peace, the earliest known history of Brunei dates back to 6th century. There is an explanation that Brunei was called “Puni” (possibly a distortion of the Sanskrit “Bhurni Karpuradvipa” or “Barunai”), or “Poli”. “Bhurni' means land and “karpuradvipa” which means 'camphor land' as in those days, Brunei produces a lot of camphor. The other explanation is another Sanskrit word 'Barunai' which means 'sea-born' as Bruneians in those days are said to be skilled sailors. Brunei, then a Hindu-Buddhist kingdom, had linkages with the famed Sri Vijaya and Majapahit empires of the region. In the late 14th century, Brunei converted into an Islamic Sultanate when its ruler, Awang Alak Betatar, married a Muslim Johore princess from Malacca, and embraced Islam to become Brunei’s first Sultan –Mohammed Shah.1
There wasn’t much political interaction between the two nations before the 80s as Brunei remained a British protectorate state. Notably, the year Brunei attained independence in 1984, diplomatic relations were established with India the same year. The interest in upgrading bilateral relations started in friendly meetings between late Prime Minister Rajiv Gandhi and the Sultan of Brunei at Commonwealth Heads of Government Meeting (CHOGM) etc. In response to Prime Minister Rajiv Gandhi’s invitation, the Sultan of Brunei paid a State Visit to India in September 1992 and an Indian resident diplomatic mission was opened in Brunei on 18 May, 1993. Brunei set up its High Commission in India on 12 August, 1992. By virtue of their common membership of UN, NAM, Commonwealth and ARF etc. and as developing countries with strong traditional and cultural ties, Brunei and India enjoy a fair degree of commonality in their perceptions on major international issues. Brunei was supportive of India’s ‘Look East Policy’ as well as welcomes its ‘Act East’ policy. It also has been using the ASEAN platform for expanding and deepening cooperation with India through a multilateral framework. Brunei was the India-ASEAN Coordinator from July 2012 for three years.2
During this period, India commemorated the 20th anniversary of relations and held the ASEAN-India Commemorative Summit held on December 20-21, 2012 in New Delhi. During the summit, ASEAN-India Dialogue relations were elevated to a strategic level.3 Due to Brunei’s support India turned into a full dialogue partner of ASEAN.
Having a population of 4,22,678 (as assessed in 20164), Brunei’s basic export items are petroleum and petroleum products. Notably, within the population which is mostly Malay in origin, there is the presence of Indian professionals and workers. A small portion of the Indian population came to Brunei with the founding of the Colony of Labuan by the British. They either came from the Indian sub-continent directly or were residents of Malay before coming to the island of Borneo, where Brunei is located.5 Within the 4 lakhs population, there are around 11,000 Indian expatriates, which is a mix of professionals, businessmen and semi-skilled workers. They have mostly retained their Indian citizenship. Indians professionals are mostly found as doctors, engineers, teachers, as well as in the financial sector. Citizens of Brunei, who originally came from India, have been found to work as Brunei Foreign Service officers. In 2016, around 124 Indians were employed in various institutions and schools in Brunei; which included 7 academics in the University of Brunei. At the same time, there were 842 Indians studying in the country although only 6 were enrolled at the university.6
Brunei’s ongoing economic struggle is to emerge from a long recession which has been exacerbated by low oil and gas prices. The government expects to attract foreign investment to diversify the economy to other industries, such as information technology and halal manufacturing that are permissible under Islamic law. The country benefits from moderately well-maintained monetary stability (the Brunei dollar is pegged to the Singapore dollar at parity) and a relatively high degree of market openness.7
Presently, bulk of Indian exports to Brunei constitutes of motor vehicles, meat of bovine animals, maize and other agricultural products, and various other engineering and mechanical products. Bilateral trade between India and Brunei stood at over US$ 504 mn in 2016-17.8 Major Indian imports from Brunei are pitch and pitch coke obtained from coal tar or from other mineral tars, which accounts for 99 per cent of total imports.9
India’s trade with Brunei more than doubled from US$ 243 mn in 2007 to US$ 500 mn in 2016, driven by India’s imports from Brunei. Exports grew from US$ 9 mn in 2007 to US$ 37 mn in 2016, imports grew to US$ 462 mn from US$ 234 mn during the same period. India is Brunei’s 7th largest trading partner and a net importer from Brunei, with a share of 6.7% in Brunei’s total international trade in the year 2016.
India’s Major Exports to Brunei (2016)10
India’s Major Imports from Brunei (2016)11
There have been regular bilateral visits as well as meetings in multilateral fora between the two states. During the visit of the then Vice President Hamid Ansari to Brunei in February 02, 2016, three agreements on health, defence and youth and sports affairs were signed.
The agreement on health aims to establish cooperation by means of pooling technical, scientific, financial and human resources and to upgrade the healthcare, medical education and research between the two countries. The areas identified for bilateral cooperation under the agreement are exchange of doctors, other professionals and experts; exchange of information on health; medical and health research development; regulations of pharmaceuticals, medical devices and cosmetics and to promote business development in these areas; and health promotion and disease prevention.12
In the field of youth and sports affairs, the agreement provides a framework for exchanges of sports persons and sports teams; facilitate the exchange of expertise in coaching, sports talent identification, sports management and administration and exchange of information in the field of youth affairs.13
In the defence sector, the two countries agreed for bilateral cooperation through exchange of visits at different levels; exchange of experience, information, training and trainers; conduct of joint military exercises, seminars and discussions; and cooperation between the defence industries. Cooperation in defence between India and Brunei already exists in the form of naval ship visits, training of senior military officers in staff colleges and exchange of experience. The framework agreement seeks to institutionalize this cooperation.14
The ships that have paid goodwill visits through the years are INS Gharial (2013), ICGS Sagar and INS Shakti (2014),15 INS Ranvir and INS Jyoti (May 2016), INS Airavat, a landing ship tank (large)16, and the INS Satpura (F48), a Shivalik-class multi-role stealth frigate and the INS Kadmatt (P29), an anti-submarine corvette, visited Brunei at Port of Maura (November 2017).17 INS Airavat had visited Port of Maura on an earlier occasion in 2011 to participate Brunei International Fleet Review to mark the 50th anniversary of Royal Brunei Armed Forces. A Bruneian ship – ‘KDB Darulaman’ - participated in MILAN 2012 (Andaman).18
It was reported that India also offered to provide troops including retired soldiers from its own Gurkha Regiment. Brunei was a British protectorate for almost a century, and has continued to pay to host a battalion of British Army Gurkhas since 1962.19 The British Army Gurkhas were flown in 1962 when there were sporadic and unsuccessful attempts at rebellion, instigated by the North Borneo Liberation Army.20 The Sultan pays tens of millions of pounds annually to support a 1,000-strong British Army presence that informally guarantees his rule. It was reported that the proposal was “not a firm offer” and could be limited to provision of bodyguards rather than active military. Britain keeps a battalion of the Royal Gurkha Rifles in Brunei in an agreement with the Sultan. The Sultanate also has a separate military which includes a reserve Gurkha unit, made mainly of former British Gurkhas who decided to stay on in the country after retiring.21
It has been stated that Brunei’s main port, Muara — one of the main ports in Southeast Asia through which the bulk of the country’s oil and gas exports to India take place — is in the South China Sea region and will become a major component of India’s growing maritime partnership with Brunei.22
The Sultan’s most recent visit to India was to attend the 25 years of the India-ASEAN Dialogue Partnership. He was one of the chief guests to the 69th Republic Day celebrations on January 26. PM Modi and Sultan Bolkiah had positive discussions on cooperation in defence and security, energy, ICT, education, health and space.23
The Indian Cabinet, on May 16th, 2018 approved the signing of the tax information exchange agreement between India and Brunei. The agreement enables the competent authorities of India and Brunei to provide assistance through exchange of information, relevant to the administration and enforcement of the domestic laws of the two countries concerning taxes. It will stimulate the flow of exchange of information between India and Brunei for tax purposes which will help curb tax evasion and tax avoidance. It will also enable assistance in collection of tax revenue claims between both the countries.24
The extent of Brunei’s industrial base remains limited when the oil and gas sector is excluded. The main industries are cement production, garment making, production of pre-cast concrete structures, mineral water, canned food, dairy products, and publishing and printing. As per the World Bank, for ease of doing business, out of 185 countries Brunei is ranked 59. Both the countries already have a bilateral agreement on investment promotion and protection agreement (BIPA) that was signed in 2008. India and Brunei have yet to sign the Bilateral Avoidance of Double Taxation Agreement (DTA).
A Memorandum of Understanding (MoU) was signed by Joint Secretary, Ministry of Commerce and Industry, Government of India and Permanent Secretary, Ministry of Foreign Affairs and Trade, Government of Brunei in May 2008, with the objective of establishing a joint trade committee.25 India and Brunei have signed MoUs on air services cooperation (January 1995) which later became a bilateral air services agreement (November 1995).26 However, there are no direct flights from India to Bandar Seri Begawan yet. Further MoUs have been signed on establishing the Nalanda University (October 2013) as an international institute of excellence.27
During the then Vice President Hamid Ansari’s visit on February 02, 2016 three MoUs were signed on health, defence and youth and sports affairs. The MoU on health cooperation has been signed envisioning exchange of doctors, professionals and experts, exchange of information on health, collective medical and health research development, and promoting business development in the field of pharmaceuticals, medical devices and cosmetics. Under the agreement, pharmaceutical and diagnostic companies from India would explore possibilities of greater business with Brunei.28
The second MoU was signed to enhance cooperation in youth and sports affairs. It can be noted, an exhibition of Islamic and other monuments of India was held in Brunei in December 201629 and an exhibition of Islamic Calligraphy from Rampur Raza Library, Rampur Uttar Pradesh, including verses from the Holy Quran and poetry in Persian and Arabic was held in the Festival of India in Brunei in November 2017.
The third MoU was on defence cooperation.30 India and Brunei already cooperate in the form of naval shop visits, training of senior military officers in staff colleges and exchange of experience. The MoU expands the scope of conducting joint military exercises, seminars and discussion as also engagement between the defence industries of the two countries.31 India will be participating along with Brunei in a military exercise – Rim of the Pacific (RIMPAC) that is set to begin on June 27, 2018 along with 24 other countries.32
Brunei assists the Indian space program as it has allowed the Indian Space Research Organisation (ISRO) in setting up a Telemetry Tracking and Telecommand Station in Brunei.
As suggested by the then Vice President Hamid Ansari during his visit to Brunei in February 2016, India and Brunei should come out of the typical seller-buyer relationship and head towards diversifying and value addition in the hydrocarbon trade.33 India’s proposal of building a fertilizer plant is in the process of being finalised. As proposed by the Indian ambassador to Brunei, Amb. Nagma Mohamed Mallick, platforms can be created for India to share its agricultural expertise, cooperation in between India and Brunei in ICT, especially building customised software programming for local and regional clients with Brunei as the hub and training and capacity building.34
Brunei has started constructing the world’s first global hydrogen supply chain demonstration plant at a project site located at Sungai Liang Industrial Park (SPARK). The plant is a collaborative project between the governments of Brunei Darussalam and Japan and a direct response to growing global concerns on greenhouse gas emissions and how these emissions have adversely affected the planet as outlined in the Paris Agreement. The plant will have the capacity to produce hydrogen from other energy sources other than crude oil.35 There is scope of collaborating on similar themes with India, in view of India’s high energy demand. Brunei is yet to be part of the International Solar Alliance and remain to be a prospective member.36
The existing relations needs to be intensified by finding commonalities, building regional and global value chains that would bring people, markets as well as communities closer together. Looking at the changing strategic and economic compulsions, India Brunei bilateral relations remain to be strengthened further.
* The Author, Research Fellow, Indian Council of World Affairs, New Delhi.
Disclaimer: The views expressed are that of the Researcher and not of the Council.
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