Can India Afford Economic Boycott of China After Ladakh?

Indian consumers are hooked to a whole range of Chinese products. India's industry sources critical components from China. Indian startups rely on Chinese venture capital. Can Indians really afford to boycott China without seriously hurting themselves after the killing of Indian soldiers by the Chinese Army in Ladakh?  Let's look at the data.

China-India Lopsided Trade. Source: Times of India

Volume of China-India Trade:

India accounts for $70 billion of China's export,  less than 3% of the country's $2.5 trillion in exports. Chinese products make up about 18% of India's total imports.

India imports almost seven times more from China than it exports to it, according Indian media reports. India runs huge trade deficit with China – its largest with any country. In 2018-19, India’s exports to China were mere $16.7 billion, while imports were $70.3 billion, leaving a trade deficit of $53.6 billion.

Indian Industries Dependence on China:

Indian industry depends on China for a range of raw materials. About a fifth of  components used by Indian automobile industry come from China. 70 percent of all electronic components used by Indian companies are imported from China.

Over 45% of consumer durables, 70% of APIs (active pharmaceutical ingredients) come from China. Nearly 75% of the telecom equipment used by Indian carriers is from China, according to the Sunday Guardian.

Chinese Venture Capital in India. Source: Economic Times

Indian Startup Venture Capital:

China is the biggest source of venture capital in India.  Chinese VCs have poured about $4 billion in 90 startups in India. Two-thirds of Indian start-ups valued at more than $1 billion have at least one Chinese investor.  High-profile startups like Byju, Flipkart, Ola, PayTM and Zomato.

India's startup ecosystem continues to be dependent on large swathes of foreign funding given the ongoing absence of home-grown pools of capital. It will face significant near-to-medium term cash constraints if investors from the world’s second-largest economy walk away, according to Economic Times. 

India-China Comparison. Source: Gaurav Dalmia


With growing Chinese trade and investment in India, the Indian economy has become significantly dependent on China.  Chinese VCs have poured about $4 billion in 90 startups in India. Two-thirds of Indian start-ups valued at more than $1 billion have at least one Chinese investor About a fifth of  components used by Indian automobile industry come from China. 70 percent of all electronic components used by Indian companies are imported from China. Similarly, 45 percent of consumer durables, 70% of APIs (active pharmaceutical ingredients) come from China. Nearly 75% of the telecom equipment used by Indian carriers is from China, according to the Sunday Guardian. Indians can not boycott China without seriously hurting themselves.

Related Links:

Haq's Musings

South Asia Investor Review

China in Ladakh

Pakistan's Startup Ecosystem

Consumer Durables in India and Pakistan

Digital BRI and 5G in Pakistan

Pakistan Tech Exports Exceed Billion Dollars

Pakistan's Demographic Dividend

Pakistan EdTech and FinTech Startups

State Bank Targets Fully Digital Economy in Pakistan

Campaign of Fear Against CPEC

Fintech Revolution in Pakistan

E-Commerce in Pakistan

The Other 99% of the Pakistan Story

FMCG Boom in Pakistan

Belt Road Forum 2019

Fiber Network Growth in Pakistan

Riaz Haq's Youtube Channel


Riaz Haq said…
Omnipotent Tencent eyes promising high-tech industries for future
By Zhang Dan Source:Global Times Published: 2020/6/24 22:12:33

Chinese tech giant Tencent has invested 10 billion yuan ($1.41 billion) in a large-scale big data center in North China's Tianjin, covering an area of 280 mu (18.67 hectares).

Equipped with 300,000 servers, the center will provide significant support to the company's business in North China and serve domestic internet users while offering comprehensive cloud platform services to other enterprises.

Closely following Tencent's investments in recent years, Liu Dingding, a Beijing-based veteran tech industry observer, found cloud-services have become top priorities for the company.

"Once finished, the data center will greatly facilitate Tencent's cloud service capacity and help with its partners," Liu said.

Owning China's most popular messaging app WeChat, the omnipotent tech giant is eyeing more.

And, Tencent is preparing to buy a stake in Oxford Nanopore, a biotech firm leading the UK's charge to develop testing kits for COVID-19, Sky News reported on June 19.

Investing in a diverse range of business sectors, from e-commerce to video gaming, from ride hailing to fintech, and from electric cars to social media, the tech giant has a vision for promising industries in the future.

So far, Tencent has built two major labs for artificial intelligence (AI) and cutting-edge technologies, covering AI, robotics, quantum computing, 5G and the Internet of Things.

"It is notable that Tencent has invested in multiple areas. More importantly, it does not seek control over the companies that it invests in. Instead, it empowers the companies and helps them grow together," Liu told the Global Times on Wednesday that Liu Qiangdong is still the decision- maker for e-commerce platform, rather than Tencent.

Like fellow conglomerate Alibaba, Chinese tech giants do not seek a particular label, but dabble in all areas, Liu said. "In the future, Tencent and Alibaba will perform as platforms, assisting developers and partners to explore, research, test and expand."

On Tuesday and Wednesday, Tencent's stock price soared. After eliminating weight price, the share surpassed a record high on January 29, 2018 and has witnessed 28 percent growth since 2020.

Liu noted that it shows the capital market remains optimistic about Tencent's future due to its far-sighted layouts in different industries, of which some have already achieved good results.

"The destiny of China will be driven by tech companies. The 'new infrastructure' is based on technological manufacturing and technological infrastructure building, relying on giants like Huawei, Tencent, Alibaba and the like," Liu said.

After domestic tech giants go international, they will definitely challenge the positions of Western tech giants, namely Google and Facebook, he said, giving credit to the better services and multiple functions of Chinese apps.

The Boston Consulting Group (BCG) recently published a survey of 2,500 global innovation executives and found Huawei had made an impressive leap - jumping 42 places to rank 6th among all the most innovative companies around the world.

Alibaba, Tencent and are all in the top 50.

"Digital, networked and intelligent applications make China's economy and Chinese society more resilient in the face of the COVID-19 outbreak," Ren Yuxin, chief operating officer of Tencent Holdings, said at the Fourth World Intelligence Congress in Tianjin on Tuesday.

He noted smart logistics, online healthcare services, online education and telecommuting have facilitated China's work resumption accurately and in an orderly manner.
Riaz Haq said…
Can #India afford to boycott #China? China is India’s second-largest #trading partner after #US. It accounts for nearly 12% of India’s imports incl #chemicals, #auto parts, consumer #electronics and #pharmaceuticals. $6.2 billion Chinese #FDI in India

India’s booming smartphone sector also heavily depends on cheap Chinese phones made by Oppo, Xaomi and others with the lion’s share of the local market.

Most consumer electronics makers say they’ll be paralysed if they can’t import crucial intermediate goods from China.

“We are not worried about finished goods. But most players across the globe import key components such as compressors from China,” says B Thiagrajan, managing director of Blue Star Limited, an Indian manufacturer of air conditioners, air purifiers and water coolers.

Mr Thiagrajan adds that it will take a long time to set up local supply chains, and that there are few alternatives for certain kinds of imports.

Chinese money funds Indian unicorns

India and China have also become increasingly integrated in recent years. Chinese money, for instance, has penetrated India's technology sector, with companies like Alibaba and Tencent strategically pumping in billions of dollars into Indian startups such as Zomato, Paytm, Big Basket and Ola. This has led to Chinese giants deeply "embedding themselves" in India’s socio-economic and technology ecosystem, according to Gateway House, a Mumbai-based think tank.

“There have been more than 90 Chinese investments in Indian startups, most of them made over the last five years. Eighteen out of 30 Indian unicorns [tech startups valued at over $1bn] have a Chinese investor,” says Amit Bhandari, an analyst at Gateway house.

At $6.2bn, direct Chinese investment in India appears relatively small. But, Mr Bhandari says, restricting the likes of Alibaba from creating monopolies in the Indian market will be crucial given the “outsized impact” of these investments.

To that effect, India has already amended its FDI (foreign direct investment) rules to stave off hostile takeovers of Indian companies.

While China has accused India of contravening WTO principles, it’s unlikely to cut ice under current circumstances "as there is no way of enforcing any decision if an inter-country conflict is cited as a reason to justify the violations”, Zulfiquar Memon, managing partner at MZM Legal, said in an email interview.
Riaz Haq said…
Retired Indian General Says #India vulnerable to #Sino-Pak cooperation on 3 fronts in #Ladakh: #Kargil (with #Pakistan), East Ladakh (with #China) and the central Karakoram-Siachen-Shyok (KSS) area with #Pakistan ranged against India. #CPEC #BRI #US

By Lt Gen (retd) Syed Ata Hasnain
From the very active western front in J&K with high-intensity anti-terrorist operations in the hinterland and the Line of Control (LoC), the security focus of the nation has shifted to Ladakh and the China-related front. We have been pursuing a policy of stabilising our relationship with China over the last many years with reasonable results. The economic benefits to both nations appeared a rational way forward although the trade relationship has been largely skewed in favour of China.

Doklam 2017 put a halt to the process of stabilisation temporarily but the same was revived through the informal summits at Wuhan and Mahabalipuram in 2018-19. Military stand-offs along the Line of Actual Control (LAC) have also been rife for some years, and the hot and cold in the relationship with China had come to be accepted as something both nations could yet live with. In May 2020, all this seems to have changed with a serious military stand-off at the LAC in Ladakh, leading to a higher level of military readiness all along the northern and eastern borders.

The recent incident in the Galwan Valley involving a major fracas between Indian and PLA troops led to bloodshed on both sides for the first time in 45 years. As tempers cool and heavy deployments continue, it is increasingly evident that besides just the Chinese connection to the Ladakh face-off, there is a serious Pakistan connect too. An understanding of this will assist in further appreciation of the situation in Ladakh.

There is no region better suited for Sino-Pak military collusion than Ladakh. Coordinated military operations from both can converge and this can seriously threaten India’s security in this area. On the political front, India’s declaration of intent to secure the areas of J&K under the occupation of Pakistan appears to have caused major concern in Islamabad.

The latter has been able to convince China of the potential Indian threat to their mutual interests in PoK and Gilgit Baltistan (GB), which are primarily about the China-Pakistan Economic Corridor (CPEC), a reasonably fragile communication artery leading from Xinjiang in China to the Indian Ocean port of Gwadar in Pakistan, along with connected projects. India’s greater political confidence in dealing with the J&K issue, as demonstrated by the decision to abrogate Article 370 in August 2019, is also leading to this consternation in the Sino-Pakistan sphere. Left at that, it is probably jointly appreciated by both that it will help boost Indian strategic confidence.

The strengthening Indo-US strategic partnership is also considered as a phenomenon that aids a scaled-up Indian confidence. Given the altered international strategic environment with the onset of the current pandemic, China views this as an opportunity to aggressively set the narrative for its domination in the post-pandemic world order. Intimidation and coercion of India are aimed at denting its strategic confidence, cautioning it in relation to its emerging partnerships with the US and its allies, and curtailing its ambitions that impinge on China’s interests. The latter primarily relates to the GB region.

Pakistan’s potential role in trying to militarily intimidate India in Ladakh can be better understood from the military geography. Three fronts exist here: Kargil (with Pakistan), East Ladakh (with China) and the central Karakoram-Siachen-Shyok (KSS) area with Pakistan ranged against Siachen and China against the Karakoram. Some interest seems to have been generated in Pakistani strategic circles about the details of the military geography of the KSS area.

Riaz Haq said…
#India bans 59 Chinese Apps, including #TikTok. The move came amid tension with #China following the June 15 clashes at #Ladakh in which 20 Indian soldiers died in action and more than 70 were injured. #BoycottChina #Modi #BJP via @ndtv

The Centre has blocked 59 apps with Chinese links that included the hugely popular TikTok, WeChat and UC Browser, amid a huge economic backlash against China following the June 15 clashes at Ladakh in which 20 Indian soldiers died in action. Sources said inputs from intelligence agencies suggested that the apps have been violating the terms of usage, compromising users privacy, and being used as spyware or malware. Within minutes of the announcement, the Indian government's TikTok account MyGov, which had 1.1 million followers, was disabled.
The move comes a day after Prime Minister Narendra Modi said India has given a "befitting response" to China. He also spoke of the countrywide call for boycott of Chinese goods, juxtaposing it against the government's "Atma Nirbhar Bharat" campaign. "We will buy local and be vocal for local and this will help India become stronger," he said.

In a statement this evening, the government said the apps were blocked "in view of information available they are engaged in activities which is prejudicial to sovereignty and integrity of India, defence of India, security of state and public order."

The statement from the Ministry of Electronics and Information and Technology said it had received an "exhaustive recommendation" from the Indian Cyber Crime Coordination Centre and the Ministry of Home Affairs.

The ministry said it also received representations from people on "security of data and risk to privacy" regarding certain apps.

"The compilation of these data, its mining and profiling by elements hostile to national security and defence of India, which ultimately impinges upon the sovereignty and integrity of India, is a matter of very deep and immediate concern which requires emergency measures. At the same time, there have been raging concerns on aspects relating to data security and safeguarding the privacy of 130 crore Indians," said the release.

The move comes amid a countrywide call from traders and civil society to boycott Chinese products and services after the June 15 clashes. The government had chipped in with a bar on Chinese equipment for the 4G upgradation of the state-owned Bharat Sanchar Nigam Ltd and sacking of a Chinese firm that had a Rs 471-crore railways contract.

Last week, the government also made the mention of the "Country of Origin" mandatory for sellers listing their products in the Government e-Marketplace -- a move that's expected to add to the odds against Chinese products. E-commerce companies including Amazon and Flipkart, have decided to follow suit.

Experts suggested that the ban on apps is a major blow to China's Digital Silk Route ambitions, eroding millions of dollars from valuation of its companies. This could also lead to more countries following India's path in acting against these Apps.

"The Modi government shows its tremendous resolve and dexterity of engaging China on multiple fronts and hitting China where it hurts the most," said a party source. "This is India's first salvo to China after the border clashes, showing that India has a diverse range of retaliatory options," he added.
Riaz Haq said…
#Modi's 50% cut in #Chinese #FDI poses bleak prospect for #Indian economy. #China has become a significant FDI source for #India in recent years, with some estimates pointing to investments totaling $10 billion from 2017 to 2019.- Global Times

Double blows from the COVID-19 pandemic and hostility of the Indian government may turn 2020 into a turning point for Chinese investment to India, according to a Global Times survey of experts on China-India economic and trade relations.

All experts surveyed by the Global Times predicted Chinese overseas direct investment (ODI) into India will drop "sharply" in 2020, with two experts forecasting a more than 50 percent cut. Globally, foreign direct investment is already expected to shrink by 40 percent in 2020, according to a UN report released in June.

Experts said the bleak prospect is a warning sign for the Indian government, which sees its economy running out of steam and could have counted on investment from China if Chinese investors' confidence had not been shattered.

China has become a significant FDI source for India in recent years, with some estimates pointing to investments totaling $10 billion from 2017 to 2019.

Qian Feng, director of the research department of the National Strategy Institute at Tsinghua University in Beijing, said that while investment from China steadily increased in the past few years, 2020 will not only see a 50 percent decline in Chinese investment but a turning point in bilateral economic and trade relations.

"Bad feelings go both ways, and the chance for China-India relationship to pick up in short-term is slim. Chinese investors are on the edge with risk-aversion instinct kicking in," Qian told the Global Times.

Since the deadly clash between Chinese and Indian troops in the Galwan Valley on June 15, hyper-nationalism has risen in India where calls for boycotting Chinese products and footage of Indian citizens destroying TV sets have been seen on social media. India's new investment regulation in April, which some claim is a thinly veiled policy to thwart Chinese investment in India, has also worsened ties, experts said.

Dai Yonghong, director of Institute of Bay of Bengal Studies with Shenzhen University, declared that age-old economic populism, unconstrained and unchecked by India's elite class, has simply made India an unfit destination for additional investment from China.

A sudden contraction of Chinese investment will affect India, experts pointed out, in contrast with Indian media outlets downplaying the role of Chinese capital.

Declining investment from China would further add pressure to the Indian economy, which is facing heavy growth pressure amid a severe domestic COVID-19 outbreak, Lou Chunhao, deputy director of the Institute of South Asian Studies at the China Institutes of Contemporary International Relations, told the Global Times.

"Raising thresholds or rejecting investment from Chinese companies will drop the rock on India's own feet," he said.

As India risks becoming the next epicenter of the pandemic, with more than 540,000 confirmed cases as of Sunday, its value as a viable investment destination also vaporized, analysts said.

In the IMF's latest world economic outlook released last week, India's 2020 growth projection was revised down 6.4 percentage points, from positive growth of 1.9 percent to a negative growth of 4.5 percent. The world's fifth largest economy is heading toward its first recession since 1979.

The June forecast is in marked difference with that of April's, in which India was believed to have a slightly faster growth rate for the year than China.

Liu Xiaoxue, an associate research fellow at the Chinese Academy of Social Sciences' National Institute of International Strategy, said it is economic situations that ultimately determine the flow of investment and the sudden rise in uncertainty in India would have a decisive consequence.

Riaz Haq said…
Economists say: No more a recession, India headed towards ‘depression’. From an output and employment point of view, #India is looking at anything between 15% and 22% contraction. #Modi #BJP #COVID #Economy #depression #Ladakh #Kashmir #Pakistan #China

While everyone now has accepted the inevitable, that the GDP will contract in the current financial year (2020- 2021), the estimates vary. The World Bank pegs it at 3.2 per cent while Crisil puts it at 5 per cent. An RBI survey paints the rosiest picture as of June 10, saying that the economy will contract by only 1.5 per cent.

However, several economists warn that the impact will likely be much worse. Surajit Das, assistant professor at JNU’s Centre for Economic Studies and Planning (CESP), puts a perspective to the situation.

“Since economic recovery does not happen overnight, economic activities in the next few quarters will also take some time to recover. Looking at GDP from an output and employment point of view, I would say you are looking at anything between a 15 and 22 per cent contraction,” he says.

Das’ ominous predictions are not without ground. According to India’s retail association, sales of non-essential items - such as clothes, electronics, furniture - fell by 80 per cent in May. Even sales of essential goods - such as groceries and medicines - dipped by 40 per cent.

An independent countrywide survey involving 1,000 respondents carried out by research scholars at CESP found out that at least 80 per cent of them have put off plans of purchasing consumer durables (ACs, washing machines, TVs and other white goods), automobiles and real estate while also postponing domestic travel plans.

Veteran economist Arun Kumar in fact thinks the contraction of GDP in the months of the lockdown has been even more severe.

“I would say about 75 per cent of the GDP was wiped out in April and about 65 per cent in May. Exports, investment and consumption, all three engines of growth went into a tailspin,” says Kumar.

Kumar goes further in saying, “India would be the first country in modern history to face a depression. It would take at least three to four years to emerge out of it.”

“In the current fiscal, the GDP is set to contract by at least 30 per cent. My estimate is that from Rs 204 lakh crore, our GDP will come down to Rs 130 lakh crore. Tax to GDP ratio will fall from 16 per cent to 8 per cent. In such a situation, it would be difficult for the government to pay salaries or finance the defence budget.”

Das agrees and says, “I will strongly urge the government to universalise the MGNREGA programme and expand it to urban areas. About 50 crore Indians live in urban and semi-urban areas and there are scores of non-salaried people there who do not work in the organised sector. I will also call upon the government to remove the 100 days cap and revise the pay from Rs 202 a day to Rs 350 in rural areas and Rs 450 in urban areas. These are absolute musts till these people find employment again,” he says.

While economists have been saying time and again wage-led growth that will boost demand is the only way to remedy the situation, the government seems to think supply-side interventions will save the day. More demand leads to more output and profit and more employment. Unless the government wakes up to the reality that without aggregate investment there would be no change in demand, output and employment, the situation is likely to get worse.

Liquidity infusion into banks is meaningless unless that money reaches the economy. Loans at lower interest will simply be used by old borrowers to service old loans and not get translated into aggregate investment. Already, non-food credit offtake growth is in the negative.
Riaz Haq said…
#Modi's ban on #TikTok devastates users in #India. #Chinese app made stars out of poor villagers in India. Then it was banned. 90% of TikTok’s revenues come from #China but it had hired 2,000 #Indians and planned to invest $1 billion in 3 years in India.

India’s TikTok nation has felt the sting.

“I am so dejected,” Gaikwad said by phone from Ambad, a village of cotton and millet farms 200 miles east of Mumbai.

By Monday, the day the ban was announced, her account had amassed nearly half a million followers. That night, she barely slept. She was mourning the loss of not just a favorite “timepass” — Indian parlance for a frivolous activity — but of a new way of seeing herself.

Gaikwad became known as the “mutton lady” after that early video and soon began posting several times daily — mostly snapshots of rural life, laced with zany comedy. Often, she is squatting over a stove on her tiled floor, stirring mutton cubes or kneading dough in her dark patterned nightgown. Or she’s lip-syncing old Bollywood love songs, using her bewildered husband, Ankush, as a prop.

In one clip, she’s sitting atop a brick wall like an Indian Lucille Ball, mock-shrieking: “I’m stuck! How do I get down?” That got 1.4 million views.

Celebrity isn’t something Gaikwad expected, growing up poor in Maharashtra state and raising four children with Ankush, who earns $120 a month as a local government employee. When she goes to the market now, she said, people stop her for selfies. Strangers ask to shoot videos with her. Some even come to her house.

“I never got into TikTok for money,” she said. “But I got respect, legitimacy and confidence. We are poor people. We have never received any attention in life. All we have gotten is disdain and scorn. TikTok turned it around.”

Akash Jadhav, a 21-year-old farmer’s son who drives a rickshaw in the rural town of Beed, is a voice for social justice on TikTok, where he posts about sexual harassment, acid attacks, alcoholism and domestic violence to more than 284,000 followers.

Now he is regularly invited to inaugurate offices and shops across the area, his travel expenses paid. His parents, who have struggled financially due to a years-long drought in the farming region, boast of him to relatives. Born into one of the lowest rungs of India’s ancient caste hierarchy, he described with pride the friendships he’d formed with a doctor, a lawyer and a police officer, men he considered far above his social station in heavily stratified India.

“TikTok opened up a new world for me,” he said.

Jadhav said he hoped India would introduce alternatives to the app. Instagram and Facebook, he added, were “dominated by a completely different section of society.”

Nikhil Pahwa, founder of Medianama, a website that covers the Indian digital industry, said that TikTok’s intuitive, full-screen design and emphasis on music made it a hit with rural Indians who found American apps too text-heavy or clunky.

“TikTok specialized in being a platform that is accessible irrespective of socioeconomic class,” Pahwa said. “That’s why it’s become a hub of creative activity from places that we didn’t expect.”
Riaz Haq said…
ICRA Sees #India's Real #GDP Shrink By Almost Double Digits In FY21. Rating agency now expects FY21 GDP to contract by 9.5%, a sharp downward revision from earlier forecast of 5% decline. Why: Rising #Covid19 and local lockdowns. #Modi Via @Bloombergquint

ICRA Ltd. has sharply cut its forecast for the Indian economy in FY21, citing localised lockdowns and rising Covid-19 cases. Its forecast is now the most pessimistic among major institutional forecasters.

The rating agency now expects FY21 real GDP to contract by 9.5%, a sharp downward revision of its earlier forecast of a 5% contraction. The climbing Covid-19 infections have resulted in a spate of localised lockdowns in some states and cities, arresting the nascent recovery that had set in during May-June 2020, it said in a statement on Thursday.

“The Indian economy had started to recover from the troughs experienced in April 2020, when the lockdown was at its severest, and many sectors seemed to be adjusting to a new normal. However, the unabated rise in Covid-19 infections in the unlock phase and re-imposition of localised lockdowns in several states, appear to have interrupted this recovery,” said Aditi Nayar, principal economist at ICRA.

Given the severity of the pandemic and the duration of the safety measures that need to be employed, we now expect a deeper pace of GDP contraction in Q2 FY21 relative to our earlier forecast, ICRA said. The agency said the economic impact would also be more uneven, as different regions move in and out of lockdowns and persisting labour supply mismatches affect supply chains and consumption patterns.

India recorded nearly 32,000 new Covid-19 cases on Thursday with the total number of cases rising to 9.6 lakh.

As a result of the spreading infections, economists, who were earlier anticipating the economic recovery to begin in the second quarter and strengthen in the third quarter, are now revisiting that assumption.

The timeline for a firmer recovery out of the contractionary phase is now being pushed ahead to at least Q4 FY21 from Q3 FY21. This presumes that a vaccine will be widely available by then, which now appears necessary for discretionary consumption to recover in certain sectors such as travel, hospitality and recreation.
Aditi Nayar, Principal Economist, ICRA
Also Read: Covid-19: Shape Of India’s Economic Recovery Goes From V To W-ish

ICRA expects the Indian economy to have contracted by 25% in Q1 FY2021. It now expects a shallower recovery in subsequent quarters than estimated earlier.

GDP is estimated to contract by 12.4% in Q2 FY21 as compared to a contraction of 2.1% estimated earlier.
GDP is estimated to contract by 2.3% in Q3 FY21, compared to an earlier estimate of GDP growth at 2.1%.
GDP forecast for Q4 FY21 too has been revised to a growth rate of 1.3% from 5% as per ICRA’s previous estimates.
The agency, however, does expect the rural economy to remain a bright spot. High frequency indicators in the rural economy such as kharif acreage and tractor sales continue to strengthen. “ICRA, thus, continues to expect agricultural gross value added to rise by 3.5-4.0% in FY21, supporting rural sentiment,” it said.

Despite the revised GDP forecasts, ICRA said it doesn’t see significant fiscal support due to the revenue pressures being faced by various levels of government.
Riaz Haq said…
What #Indians Lost From #tiktokban: Rural women who lacked access to any big platform found some measure of fame & newfound confidence in the face of oppressive societies. Independent musicians escaped #Bollywood stranglehold to find fame via @thewire_in

It’s not an overstatement to say this has been a tragedy for Indian users. Despite its myriad flaws, TikTok’s dominance of Indian social media was a nearly unalloyed good for many of the less well-off people who enjoyed it. In a highly stratified society, a video app with a notoriously addictive algorithm happened to cut across castes, faiths, and other gulfs, all so Indians could watch one another’s lip-syncs and skits. When the government pulled the plug—the app disappeared from the Apple and Google app stores, and users in the country can no longer access any videos—it deprived users of entertainment, a budding alternative media source, and in many cases income.

While the first prohibition was spurred by officials’ concerns over illicit and exploitative content on the platform (which the app then attempted to moderate by flagging and taking down millions of videos), this one followed India’s mid-June clashes with China stemming from decades long border disputes. In a move that month befitting Prime Minister Narendra Modi’s “Make in India” initiative, the Indian government removed 59 Chinese-made apps, TikTok among them, citing national security concerns. S....

but another popular app owned by ByteDance, Resso, is currently allowed in India. Yet a protectionist argument doesn’t make much sense, either: It’s not like India is keeping out Instagram’s new Reels feature, which is seen as a “TikTok clone” and had one of its first launches in the country. Reels is rapidly gaining fans—no surprise, since Instagram and Facebook are widely used in India. ....

...As of April, TikTok had had 610 million downloads and 600 million active users within India—about 44% of the population and over a quarter of total worldwide TikTok downloads. Not only did Indians love TikTok, but the app had recently become an effective tool to mobilize for protests and other forms of social education and organization. ...

......the app supported 15 different tongues in the country, transcending language and literacy barriers; and it could also be used on cheaper, budget-friendly phones.
Riaz Haq said…
#Indian #startup valuations uncertain amid uncertainty about more #Chinese investments. #China has already invested in 18 of India's 30 #unicorns that include food delivery apps, a ride-hailing app, a hotel chain & #edtech startup. #technology #Ladakh

Indian start-ups, still reeling from the effects of a global pandemic, are now faced with a fresh challenge: the ongoing military standoff between Delhi and Beijing.
India has been on an economic offensive since June, when a border clash in the Himalayan region of Ladakh left 20 Indian soldiers dead. The two sides have since accused each other of violating the border consensus, and tensions have been rising.
Chinese companies have already invested in 18 of India's 30 unicorns - technology companies with a valuation of over $1bn (£772m). The list spans popular food delivery apps, a taxi aggregator, a hotel chain and a company that offers e-learning programmes.
But now their fate - and that of start-ups that were hoping to attract Chinese money in the future - looks uncertain.
“Clearly one big source of capital has vanished,” Haresh Chawla, partner at True North, a private equity firm, said.
“The ecosystem is likely to see muted valuations and slower deal flows, since they [Chinese] were very active, especially in the mobile and consumer segment of the market.”
Delhi has already banned more than 200 Chinese apps, including hugely popular ones such as TikTok and PUBG. It also proscribed investment from China in highway projects and small and medium enterprises. And “boycott China” has become a loud rallying cry.

But all of this came on the heels of something bigger - in April, India introduced tighter foreign direct investment rules to prevent hostile takeovers during the pandemic.
The result has had an outsized impact on India’s capital hungry start-ups.
A decade ago, Chinese investment in India was negligible.
But data obtained by the BBC from start-up research firm Tracxn shows that 35 Chinese corporations and 85 venture capital and private equity firms have invested over $4bn in major Indian start-ups including PayTM, Snapdeal and Swiggy since 2010.
Chinese investment into India as a share of foreign direct investment has more than doubled during this period, from 5% to 11%.
India may have refused to sign up to Beijing’s multi-billion Belt and Road Initiative – a mammoth infrastructure project of overland and maritime routes, often called the modern Silk Route.
But the country “has unwittingly signed up for the virtual corridor,” Gateway House, a think tank, observed in a recent report.
“The impact is unlikely to be dramatic on early-stage investments," Mr Chawla said. "There is enough dry powder with many VCs to shepherd firms through.”
Riaz Haq said…
One hard truth that Indians have to contend with is that America has also had difficulty treating India with respect. In recent years, many Americans have proudly proclaimed that America and India have a friendship built on a strong foundation since both are fellow democracies. This argument cuts little ice among thoughtful Indians since most of them remember well that America stood shoulder to shoulder with communist China and dictatorial Pakistan for several decades during the Cold War and beyond. One of the critical weaknesses of Washington, DC, is that the administrations and their officials change regularly; they have poor memories. Many Americans, like many of their fellow Westerners, have a higher degree of respect for Chinese civilization than they do of Indian civilization. Many Americans will deny it because it is an uncomfortable truth. They will proclaim loudly that they respect India as much as they respect China. But you cannot feign respect: it is best demonstrated not through words but in deeds. Every country in the world demonstrates its respect for another country by the amount of time and attention it gives to that country, and America has devoted far more time and attention to China than it has to India. If America wants to develop a close long-term relationship with India over the long run, it needs to confront the deep roots of its relative lack of respect for India. Is it a result of a perception among Western scholars that Indian civilization is not as impressive as Chinese civilization? Is this a result of the fact that the American media has broadcast a steady stream of stories about poverty in India, so much so that just as Americans naturally associate Africa with poverty, they may also do the same with India? Or were America’s condescending cultural attacks a result of romantic fascination with British dramas set in British India, with Indian culture presented as inferior? Unless Americans reflect on the roots of their lack of respect for India, they will fail to develop a strong partnership of equals. The tragedy of this failure is that such a partnership would bring massive benefits to both countries. As the American century gradually fades away in the coming decades and an Asian century emerges in force, America will need to build bridges to engage the new self-confident Asian societies. Clearly, China cannot provide America a bridge to the new Asia as China will be perceived as the main challenger to America for the coming decades. However, India can, as there are several common links to build upon. The first is the exceptional success of the Indian community in America. America’s free enterprise system is, in many ways, the most competitive market in the world for human achievement as the best minds from nations all over the world migrate to America. The pool of migrants in America represents the highest achieving segments of societies around the world. When the best brains of the world compete on a level playing field, which ethnic community does the best? The data show it is the ethnic Indian community in America.

Mahbubani, Kishore. Has China Won? (pp. 239-241). PublicAffairs. Kindle Edition.
Riaz Haq said…
Time for #China to toughen up on insincere #India. Will India fire the first shot? The Indian military, or some of its forces, are influenced by right-wing #Hindu nationalist organization RSS, which pervade all facets of Indian society. - Global Times

Only three days after the sixth round of the China-India military commander-level meeting on Monday with consensus reached by the two sides to cool rising border tensions, The Hindu quoted a "senior [Indian] government official" and suggested "If PLA (People's Liberation Army) comes close, Indian troops can fire." Such hype only embodies India is being a coward in a lion's skin.

The two countries agreed to stop sending more troops to the frontline in their latest talks. This is relatively in favor of India, because New Delhi has deployed far more troops to border areas than Beijing. In the latest conflict near the Pangong Tso Lake, Indian troops illegally crossed the border, and initially occupied some highlands. India is hoping it could maintain such an "advantage," and therefore wishes the PLA will not "come close."

Will India fire the first shot? The possibility cannot be ruled out. The Indian military, or some of its forces, are influenced by nationalist sentiment and the right-wing Hindu nationalist organization Rashtriya Swayamsevak Sangh, which pervade all facets of Indian society. It may be true that some people want to provoke a war.

India has always been calculating on its rhetoric. If the situation is favorable to India, it would advocate that disputes could be resolved by negotiations. This is what happened in early May. But after the skirmish on June 15, when India believed it suffered a loss, the country started to clamor for war. After India's aggression near the Pangong Tso Lake at the end of August, it wanted to talk to China again.

When India tends to believe it has some advantages, it would hope to negotiate with China and try to make China concede in talks. This is what is going on for the moment. New Delhi is playing the tactic - using its small leverage to maximize returns, wishing Beijing to make a compromise in the entire region of confrontation.

The attempt to occupy more strategic heights in border areas has been India's consistent goal, a tactic through which India tries to nibble into more border areas.

However, India has difficulties to confront. Its domestic epidemic crisis is rising. Although it has deployed large-scale troops in border areas, the country's logistics sector is facing huge challenges, especially as winter approaches.

Logistics supplies play a decisive role in modern warfare. China's ability to send troops, weapons and ammunition, as well as supplies to the border far outweighs that of India. If India dares to fire the first shot, it will have no chance to fire a second one.

China wants no war and used to see India as a "brother" in developing countries. China has been proactively promoting cooperation with India, both on the bilateral level and in multinational platforms. There was a time when China hoped it could jointly rise with India, in an attempt to realize the rejuvenation of the two ancient civilizations, even the rejuvenation of Asia.

But India does not think so. It is trying to shape a new global industrial chain without China. It wants to stand with the US against the rise of China, and has been observing China's emergence from a geopolitical lens, fearing China could one day become the dominant power in Asia.

Riaz Haq said…
As #Chinese imports soar in #India, what happened to #Modi’s #MakeInIndia hype? #Indian govt data shows #China's share of the total imports in India has gone up from 13.7% last financial year to 18.3% in the 6 months to September. via @scmpnews

China not only remains India’s biggest source of imports, its share of the total actually increased in the six months to September, government data shows
Indian traders and manufacturers are struggling to end their reliance on Chinese goods partly thanks to a lack of high quality, locally made alternatives


Much of this has to do with the nature of India’s imports – more than half of which go towards producing finished goods – and the realisation that slogans popularised by Modi such as “vocal for local” might be easy to chant but are harder to put into practice.


Last week, the Reserve Bank of India announced the country had entered into a technical recession “for the first time in its history”, after recording a contraction – this time of 8.6 per cent – for the second quarter in a row. Between April and June, Asia’s third-largest economy shrank by 24 per cent, official figures show.
Despite this, Modi recently claimed India’s economy was on its way to recovery and would achieve his government’s target size of US$5 trillion by 2024 from the estimated US$2.8 trillion it is worth at present. Economic forecasters at Oxford Economics, however, said on Thursday that growth would continue to stall at around 4.5 per cent until 2025.
The government stills looks determined to walk the route of ‘self-reliance’ though. A day after 15 nations signed the Regional Comprehensive Economic Programme (RCEP) without India, Foreign Minister S Jaishankar said the country was determined to move away from trade arrangements towards a “self-reliant India” policy to “consolidate comprehensive national power”. Despite repeated attempts to reach them, officials in India’s commerce ministry did not comment.
The result is a deepening crisis for India’s traders and manufacturers, one of whom told This Week In Asia on condition of anonymity that the country’s smallest enterprises were the ones suffering the most. “The government asked us to not sack employees but offered us little relief or stimulus. Where we need substantial relief, we got a moratorium on our loans,” he said, referring to the government’s US$265 billion in economic aid announced in May.
Riaz Haq said…
#China’s #Trade Boom Continues in May on Strong Global Demand. #Exports to #India jumped more than 100% for the second straight month. Overseas demand for Chinese goods remained strong as economies from the U.K. to the U.S. emerged from months of lockdown

China’s exports continued to surge in May, although at a slower pace than the previous month, fueled by strong global demand as more economies around the world opened up. Imports soared, boosted by rising commodity prices.

Exports grew almost 28% in dollar terms in May from a year earlier, the customs administration said Monday, weaker than forecast and below the pace in April, but still well above historical growth rates. Imports soared 51.1%, the fastest pace since March 2010, leaving a trade surplus of $45.5 billion for the month.

Overseas demand for Chinese goods remained strong as economies from the U.K. to the U.S. emerged from months of lockdown. Exports to emerging markets like India and in Southeast Asia, which have seen a resurgence in Covid-19 outbreaks, also climbed. South Korea’s exports, a bellwether for world trade, surged the most since 1988 in May, a sign that the global recovery is strengthening.

“It’s still a fairly healthy set of numbers,” Jonathan Cavenagh, senior market strategist at Informa Global Markets, said in an interview on Bloomberg TV. “We know that global demand is still recovering and that trend is likely to continue towards the end of the second quarter and into the third quarter as the major developed economies open up.”

Exports to the U.S. moderated, although still grew at a healthy pace of about 21% growth, while shipments to the European Union slowed to an almost 13% expansion. Purchases by Indian companies jumped more than 100% for the second straight month.

There was also a shift in categories driving export growth. Sales of household appliances and lighting grew, while there was a more than 41% drop of textile and fabric goods, which includes masks and protective clothing. These changes “seem to be consistent with our view that strengthening exports of non-Covid related products offset weakening exports of Covid-related products as global vaccination proceeds,” Goldman Sachs Group economists wrote in a note.

Riaz Haq said…
India & China's political tensions are hitting the #smartphone market. But they need each other. Xiaomi is the top-selling brand in #India. China's Xiaomi, Vivo and Oppo together control more than 60% of the #Indian market. #Modi #BJP #QUAD #Ladakh

The Indian government is cracking down on the companies that make the country's most popular smartphones.

Indians love Chinese smartphones, but for the last two months, New Delhi has intensified the scrutiny of three top Chinese firms — Xiaomi, Vivo and Oppo. Together, these companies control more than 60% of the Indian smartphone market, according to data from research firm Counterpoint.
Xiaomi, the top-selling brand in the country, was the first company to face regulators' heat. In May, the country's main financial investigation agency accused Xiaomi's Indian subsidiary of making illegal remittances, violating foreign exchange laws.


Chinese technology firms have had a particularly rough time in India over the last two years, with New Delhi cracking down since border tensions escalated between the world's most populous countries.
In 2020, India banned more than 200 apps — many of which were Chinese, including the wildly popular video platform TikTok.
Chinese vendors have also come under the thumb of Indian regulators because "they have "grown very fast very quickly," noted Tarun Pathak, a research director at Counterpoint.
"More clarity is being sought by India on how Chinese firms do their business here," he said. "Their balance sheets are now being looked into."
He added that the Indian government is tightening regulations for foreign phone makers because they have realized that "these companies need India more than India needs them."
Although regulatory crackdowns are making business in India difficult, experts say it's unlikely New Delhi would put an outright ban on Chinese smartphones.
"Chinese firms are here to stay," said Pathak, adding that there are "no other takers."

South Korean giant Samsung is the second-best-selling smartphone brand in the country and the only non-Chinese firm among the top five sellers in India, according to data from Counterpoint. But it "cannot grow its share of the market from 20% to 60% overnight," said Pathak.
Apple (AAPL) has had big plans for India for years now, but has only captured a tiny sliver of the market as its products are prohibitively expensive for most Indians.
Kiranjeet Kaur, an associate research director at International Data Corporation (IDC), also expects these companies to bounce back by the time the Diwali festival season — driven by shopping — begins in India in October. She added that these probes would hardly matter to Indian consumers.
After the border clashes, calls for a boycott of Chinese companies, including phone makers, had engulfed India, recalls Kaur.

Despite these protests, there was "not a dent in the shipment numbers" of these companies, and they continued to dominate the market, she added.
India's love for Chinese smartphones transcends any political tensions, mainly because they are seen as great value in a highly price-sensitive market.
While Indian manufacturers have come up with affordable smartphones in the past few years —including one developed by Mukesh Ambani, the billionaire head of sprawling Indian conglomerate Reliance, in partnership with Google — these have failed to make much of a splash among consumers.
"If you compare the features, Chinese smartphones offer a lot more, and cost only a little bit more," said Kaur.
And, despite the new legal challenges, China can't afford to abandon the Indian market.
Riaz Haq said…
India is now ever more dependent on Chinese #imports despite seeking self-reliance. #Indian imports from #China include iron & #steel, copper, #nuclear reactors, shoes, animal & vegetable fats, mineral fuels, inorganic chemicals. #MakeinIndia #Modi #trade

For the past few years, prime minister Narendra Modi’s government has been pushing businesses to “make in India” and lessen his country’s reliance on China-made goods.

The idea is to reduce India’s trade deficit with its neighbour. A trade deficit happens when a country’s imports exceed its exports.

Yet, after spending billions of rupees to build such self-reliance, China’s trade surplus with India has only exceeded $1 trillion, The Hindu reported yesterday (Oct. 20).

Bilateral trade between India and China
Trade ties between India and China began to grow in the early 2000s, driven by imports to India from China.

A large portion of these imports, according to the Indian government, include footwear, iron and steel, copper, nuclear reactors, animal and vegetable fats, mineral fuels, and inorganic chemicals among others.

In the past five years alone, imports from China have increased by nearly 30%, the Indian informed parliament in July (pdf).

“In 2021, annual two-way trade crossed $100 billion for the first time, reaching $125.6 billion, with India’s imports accounting for $97.5 billion, pegging the imbalance at close to $70 billion,” according to The Hindu.

Calls for Boycott of Chinese products
The increase in Chinese imports has come amid growing calls in India to boycott Chinese products.

Indian customers’ attitude towards Chinese products turned so hostile by the end of 2020 that some Chinese firms switched the “Made in China” label on their products to “Made in PRC” where PRC stands for the People’s Republic of China. This made the products’ country of origin a little less clear.

Tensions between the two nations increased when India banned a host of Chinese apps and the Modi government reportedly advised all states to avoid signing any deals with China.

None of these moves has apparently helped India. The country is now dependent on China more than it ever was.
Riaz Haq said…
China Border Resolution Leaves Some in India Unhappy

The resolution of a two-year border standoff between China and India has eased tensions between the Asian giants but left Indian critics saying their government gave up too much, local herders complaining of lost pastureland and analysts warning another escalation could come at any time.

The two nations’ militaries have disengaged from a border point in the Gogra-Hot Springs region in eastern Ladakh in accordance with an agreement reached in September, resolving one of several simmering border disputes that have kept the two countries on edge.

The Chinese withdrawal was confirmed in recent satellite imagery shared on Twitter by open-source intelligence analyst, Damien Symon, who tweeted, “imagery of Chinese side confirms what used to be a border camp, has now been removed, depth deployments, however, remain.”

But Pravin Sawhney, a former Indian army officer and widely published defense analyst, argued in an interview that China’s People’s Liberation Army “are not going back an inch” from the land they occupied more than two years ago. “The disengagements that have happened and the buffer zone that has been created are about 6 kilometers inside Indian territory,” he said.

Sawhney also pointed out that Chinese troops remain on land claimed by India in other critical areas of the Himalayan border region, including the Depsang Plains adjoining the Siachen Glacier, a militarily sensitive region bordered by India, China and Pakistan.

“In case of war, the Depsang Plains would be critical as it could facilitate one-front reinforced war with China and Pakistan,” Sawhney said.

Indian National Congress member Rahul Gandhi, a former leader of the opposition Congress Party, has also complained about the deal in a tweet.

“China has refused to accept India’s demand of restoring status quo of April 2020. [Prime Minister Narendra Modi] has given 1000 [square kilometers] of territory to China without a fight. Can [the government of India] explain how this territory will be retrieved?”

Sajjad Kargili, a political activist from the Ladakh region in Indian-administered Kashmir, told VOA that while the easing of tensions has been welcomed in the region, local herders are resentful at being shut out of their former grazing land in what is now part of the buffer zone.

“We have witnessed and lost access to our traditional grazing area, and now nomads have to move around over 15 kilometers to feed their livestock,” said Konchok Stanzin, who represents a border constituency on a local council. “The government should provide compensation to keep alive nomads’ culture and tradition in eastern Ladakh.”

He and others say the loss of the grazing land threatens the Pashmina wool business, which has been in operation for over 600 years and provides livelihoods for over a quarter of a million people.

Aparna Pande, research fellow and director at the Hudson Institute’s Initiative on the Future of India and South Asia, sees the Gogra-Hot Springs dispute as part of what some have described as Chinese “salami-slicing,” a strategy that “entails taking over territory and then claiming it as Chinese and asking the other to just accept reality and move on.”

“Between 2012 and 2020, there were four different occasions when the PLA came in and took over Indian territory along the border and each time while India disengaged and withdrew its troops, China did not reciprocate,” she said. “This time, India has disengaged but the extra troops will only be withdrawn if, and when, China does the same.”

Michael Kugelman, deputy director of the Asia program at the Wilson Center, a Washington-based research group, noted that China remains unhappy with India for several reasons, including its participation with Japan, Australia and the United States in a security dialogue known as “the Quad.”
Riaz Haq said…
#India's #Paytm shares down 79% since #IPO. Japan’s #Softbankグループ & SG sold their holdings in Paytm when lock-in period expired. Jack Ma's #alibabagroup, which was the largest investor in Paytm Mall, abruptly offloaded its entire stake (43.32%).

Looks like the troubles for Paytm are far from over. Ever since it went public in 2021, the company has been in the news for share price which is tumbling down uninterruptedly. Paytm shares hit an all-time low today, marking it the world’s worst first-year share plunge among large IPOs over the last decade.

Thursday morning at 9.30 am, November 24, 2022, the stock price of One97 Communications Ltd. (NSE:PAYTM) was trading at Rs 449.6, and has now reached a record low of Rs 441.

Surprisingly, the current Paytm stock price is over 79% down from its IPO issue price of Rs 2,150.

The below image shared by Bloomberg shows the world’s top five companies with their worst first-year share plunge. Bankia SA, a Spanish financial services company, saw a massive 82% decline in its share price within just a year of its IPO launch. Paytm is close behind with 75% YoY decline in its stock price.

Manoj Kumar Dalmia, Founder and Director of Proficient equities Private Ltd, advised investors to avoid buying Paytm stocks as they might drop further to a level of Rs 292.

According to media reports on November 22, 2022, several prominent investors, such as Japan’s SoftBank and Societe Generale, have sold their holdings in the Vijay Shekhar Sharma-led Paytm since the lock-in period expired. As a result, the company’s stock fell 11.2% to Rs 476.8 apiece. Paytm’s market capitalisation has also tanked from Rs 1.15 lakh crore a year ago to less than Rs 33,000 crore.

In May 2022, Jack Ma led Alibaba Group, which was the largest investor in Paytm Mall, abruptly offloaded its entire stake (43.32%) in the e-commerce company. As a result, Paytm’s valuation drastically fell from Rs 21,000 crores (US$ 3 billion) in 2020 to just INR 100 crore (US$ 13.5 million) in May 2022.

Paytm IPO debacle remained the talk of the town for a very long time last year. Before the debut, many investment advisory firms had warned people about the future prospects of Paytm’s stock due to the absence of the road to profitability. The company made many failed attempts to play down such reports but the impact was unavoidable. Despite listing its stock at a discounted price, the share dropped by 27% by the closing hours of the listing day.

Will the Paytm stock bounce back? Perhaps, it’s a bit early, and difficult as well, to get a convincing answer to it! The next few weeks are going to be crucial and decisive though.
Riaz Haq said…
Arvind Panagariya cautions against cutting trade ties with China

“Engaging China in a trade war at this juncture will mean sacrificing a considerable part of our potential growth... purely on economic grounds, it will be unwise to take any action in response to it (transgressions on the border),” the eminent economist told PTI.

Amid demands for snapping trade ties with China for its transgressions on the border, former NITI Aayog Vice-Chairman Arvind Panagariya has opined that cutting trade ties with Beijing at this juncture would amount to sacrificing India's potential economic growth.

Instead, Mr. Panagariya suggested that India should try to enter into free trade agreements (FTA) with countries such as the U.K. and the European Union to expand its trade.


Mr. Panagariya, currently a professor of economics at Columbia University, said both countries can play the trade sanctions game but the ability of a $17 trillion economy (China) to inflict injury on a $3 trillion economy (India) is far greater than the reverse.

"Now, there are some who want trade sanctions on China to 'punish' it for its transgressions on the border... if we try to punish China, it will not sit back, as amply illustrated by its response to sanctions by even the mighty United States," he observed.

Mr. Panagariya pointed out that even a large economy such as the U.S. has not been very successful with its sanctions either against China or even Russia.

"Its close ally, EU, has had to pay a very high price of the sanctions against Russia. So, this is a very slippery slope," he observed.

The trade deficit, the difference between imports and exports, between India and China touched $51.5 billionduring April-October this fiscal. The deficit during 2021-22 had jumped to $73.31 billion as compared to $44.03 billion in 2020-21, according to the latest government data According to the data, imports during April-October this fiscal stood at $60.27 billion, while exports aggregated at $8.77 billion.
Riaz Haq said…
Putin to Xi: Russia seeks to strengthen military ties with China

The US has expressed concern over Beijing’s alignment with Moscow amid the ongoing invasion of Ukraine.

Russia’s ties with China are the “best in history”, President Vladimir Putin told his Chinese counterpart Xi Jinping, as he said Moscow would seek to strengthen military cooperation with Beijing.

The two leaders spoke via video link on Friday, and Putin said he was expecting Xi to make a state visit to Moscow in 2023. If it were to take place, it would be a public show of solidarity by Beijing amid Moscow’s flailing military campaign in Ukraine.

In introductory remarks from the video conference broadcast on state television, Putin said: “We are expecting you, dear Mr chairman, dear friend, we are expecting you next spring on a state visit to Moscow.”

He said the visit would “demonstrate to the world the closeness of Russian-Chinese relations”.

Speaking for about eight minutes, Putin said Russia-China relations were growing in importance as a stabilising factor, and that he aimed to deepen military cooperation between the two countries.

In a response that lasted about a quarter as long, Xi said China was ready to increase strategic cooperation with Russia against the backdrop of what he called a “difficult” situation in the world at large.

Earlier this month, Russia and China conducted joint naval drills, which Russia’s army chief described as a response to the “aggressive” US military posturing in the Asia-Pacific region.

Xi “emphasized that China has noted that Russia has never refused to resolve the conflict through diplomatic negotiations, for which it [China] expresses its appreciation,” Chinese state broadcaster CCTV reported of the call.

The Chinese leader told Putin that the road to peace talks on Ukraine would not be smooth and that China would continue to uphold its “objective and fair stance” on the issue, according to CCTV.

“The Chinese side has noted that the Russian side has said it has never refused to resolve the conflict through diplomatic negotiations, and expressed its appreciation for this,” he was quoted as saying.

Xi, however, made clear the ideological affinity between Beijing and Moscow when it came to opposing what both view as the hegemonic US-led West.

“Facts have repeatedly proved that containment and suppression are unpopular, and sanctions and interference are doomed to failure,” Xi told Putin.

“China is ready to work with Russia and all progressive forces around the world that oppose hegemonism and power politics…and firmly defend the sovereignty, security and development interests of both countries and international justice.”

In February, China promised a “no limits” partnership with Russia, which set off alarm bells in the West. Beijing has refused to criticise Moscow’s actions in Ukraine, blaming the United States and NATO for provoking the Kremlin. It has also blasted the sanctions imposed on Russia.

The US State Department on Friday expressed concern over China’s alignment with Russia. “Beijing claims to be neutral, but its behaviour makes clear it is still investing in close ties to Russia,” a spokesperson said, adding Washington was “monitoring Beijing’s activity closely.”

Russia leading supplier of oil to China
Putin also said Russia has become one of China’s leading suppliers of oil and gas.

“Russia has become one of the leaders in oil exports to China”, with 13.8 billion cubic metres of gas shipped via the Power of Siberia pipeline in the first 11 months of 2022.

Russia overtook Saudi Arabia as China’s top crude supplier last month.

Putin added that Russia was China’s second-largest supplier of pipeline gas and fourth-largest of liquefied natural gas (LNG). He said in December, shipments had been 18 percent above daily contractual obligations.
Riaz Haq said…
Fear of truth, fear of escalation: China has assessed Modi correctly | Deccan Herald

Fear of truth, fear of escalation: #China has assessed #Modi correctly. #India government hiding the truth only emboldens China, which has seen through the veneer of Modi’s image. #BJP #Hindutva
| Deccan Herald

As China’s army was inflicting defeats on Indian forces on the disputed border in November 1962, Parliament had been convened to discuss the conflict and bilateral relations. L M Singhvi, an independent MP from Jodhpur who would later join the BJP, backed by some Opposition MPs, requested that it should be a secret session of Lok Sabha as they were to discuss a “sensitive” matter. Prime Minister Jawaharlal Nehru rejected the idea.

“I gave careful consideration to it. I think that, at the present moment, it would not be desirable to have a secret session,” Nehru replied. “The issues before the House are of high interest to the whole country. Right at the beginning to ask for a a secret session would have a bad effect on the country.” He then went on to personally answer all the questions raised about India’s China policy and the ongoing conflict.

In contrast to Nehru, Narendra Modi and the ruling BJP have gone one step ahead of Singhvi in keeping under wraps what’s going on in the border crisis with China. In the past 32 months, since the Chinese ingresses into Ladakh came to light, the the government has refused to discuss the matter altogether, not even in an ‘in camera’ session. Leave alone a debate or discussion in the House, it has not allowed any questions on the subject in Parliament to be accepted for answers. The mention of border clashes has been restricted to a few perfunctory statements by the Defence Minister.

In late 2020, then Chairperson of the Rajya Sabha Venkaiah Naidu had asked the government to brief Opposition leaders in private, but that was never done. After the infamous all-party meeting in June 2020 where PM Modi claimed that no Chinese had entered our territory – essentially validating the Chinese claim that the Indian soldiers who died in Galwan were on Chinese territory – there have been no more meetings. Neither have journalists been allowed to report freely from the frontline, as was the case during the 1999 Kargil War.

Riaz Haq said…
Fear of truth, fear of escalation: China has assessed Modi correctly | Deccan Herald

Supporters of the government argue this total clampdown on information is essential to provide it the requisite space for diplomatic negotiations. This argument could hold water for a couple of months after the crisis started but has no meaning after 32 months when India’s negotiating strategy has failed to achieve disengagement in important areas like Depsang and Demchok, or de-escalation in areas where disengagement has taken place. In the 17th round of talks this month, the Chinese side flatly refused to discuss these issues and its foreign ministry has already publicly ruled out any suggestions of a return to status quo as it existed in early 2020. If the Modi government hides behind euphemisms like “friction points” and cannot acknowledge that China has denied Indian Army control of its territory, what force of argument can it bring during the talks? By now, it is evident that China has successfully exploited the Indian government’s penchant for secrecy as a personal weakness of PM Modi. Beijing first learnt the lesson after the Doklam crisis in 2017, when the Indian Army went into Bhutan to stop the Chinese from constructing a road to Jampheri ridge. It resulted in a 72-day long faceoff, when a similar clampdown on information was applied by the government. As government sources declared a win after both sides announced disengagement, it soon emerged that the Chinese had stepped back by only 150 metres and constructed a military base, helipads, and infrastructure with a permanent deployment there. The Modi government claimed “victory” while the Chinese got their way. Ladakh would have been similar but in this case, Beijing has refused to give Modi a face-saver to somehow claim an honourable resolution. The government wanted to bury the clash at Tawang, where PLA soldiers reportedly fired rounds in the air, but had to concede the truth after a couple of journalists reported it. That the Chinese have constructed an all-weather road and a military camp 150 metres short of the clash site in 2022 is not easy for the government to explain.

This information came out from publicly available satellite imagery put out by an Australian think-tank while other commercially available imagery from HawkEye360 has shown PLA and Indian infrastructure and military deployment all along the LAC. Foreign governments would definitely have far more detailed information available to them. It is often betrayed by foreign diplomats and visiting officials in their private interactions in New Delhi. This nails the claim that a parliamentary debate would make operational details available to the adversary. China has correctly assessed that fear of a military escalation in Delhi holds back any bold Indian moves, diplomatic or military. The Modi government is gripped by a fear of provoking China. MoS for Home Ajay Teni deletes a tweet within minutes of proclaiming that he had met a Tibetan delegation. US officials are told not to mention Chinese aggression on the border in any statement, and New Delhi has stalled any security-centric moves under Quad. The attitude, approach and actions of the Modi government on China give credence to claims that it is hiding something. Instead of defending our borders, it is more intent on defending the strongman image of the Prime Minister. Provided a regular dose of Hindutva nationalism by the ruling party and mainstream media, many Indians believe that India can militarily defeat China. The gulf between image and reality is being packed by propaganda, PR, and fake news.

Riaz Haq said…
Fear of truth, fear of escalation: China has assessed Modi correctly | Deccan Herald

Democracy has been India’s strength, and public opinion should be used smartly by the government during negotiations with China. Hiding the truth only emboldens China, which has seen through the veneer of Modi’s image. A free and frank discussion in Parliament will not tie the hands of a leader who is self-confident and sure of himself. Running away from the truth is not only evasion of democratic accountability but 32 months after the border crisis with China, also a strategic folly.
Riaz Haq said…
Why India and China Are Fighting in the Himalayas

By Ajai Shukla

Mr. Shukla is a strategic affairs analyst and former Indian Army officer.

Soldiers from China and India, nuclear-armed Asian neighbors, have been clashing on their disputed border with an alarming frequency owing to the rise of aggressive nationalisms in President Xi Jinping’s China and Prime Minister Narendra Modi’s India. Insecurity is also growing in New Delhi and Beijing over intensified construction of border infrastructure by both countries. And mutual suspicion is deepening as China contemplates the increasing strategic cooperation between the United States and India as competition and conflict between Washington and Beijing intensifies.


Throughout the 1960s and the ’70s, India’s military, traumatized by China’s comprehensive victory and fearful of setting off another conflagration, deployed well to the rear of the border, which was covered only by long-range patrols. In the early 1980s, the Indian military leadership came to be dominated by a new generation of bolder commanders and New Delhi greenlighted a move forward, much closer to the Line of Actual Control.


Between 1989 and 2005, the Indian and Chinese sides had 15 meetings and no blood was shed for 30 years. After the Gandhi-Deng meeting, the two sides signed an agreement in 1993 for restraint and joint action on the disputed border whenever Indian and Chinese patrols differed on the alignment of the LAC. It was followed by four more pacts, aimed at keeping the peace on the border.

Minor Chinese intrusions in Ladakh in 2008, 2013 and 2014 were resolved through dialogue. A major escalation followed in June 2017 in the Doklam Plateau in the Himalayas, where India, China and Bhutan meet. The Chinese military was building a road into the area, which is claimed by both China and Bhutan.


The plateau is close to “Chicken’s Neck,” a narrow corridor of Indian territory that connects mainland India to its northeastern states, an area the size of Oregon, where 45 million people live. India saw the Chinese incursion and construction as a dangerous move toward control over the Doklam Plateau, and it reawakened New Delhi’s fear of China cutting off northeastern India in a war by taking over Chicken’s Neck.


For New Delhi, China’s new aggressiveness presents a clear dilemma: Should India continue to build strategic and military relations with the United States and the partnership of America, Australia, Japan and India — known as the Quad — even though Beijing has made it clear it sees the Quad as an anti-China grouping? While the Quad, and its more overtly militaristic version, the AUKUS (Australia, the United Kingdom and the United States) alliance, constitute a viable deterrent to China in the maritime Indo-Pacific theater, India is the only partner that confronts China on its land border.

From New Delhi’s perspective, the Chinese military aggression on the disputed border is the price India is paying for joining hands with the Western alliance. New Delhi takes pains to portray its independence, even turning down an American offer of assistance against China at the time of the 2020 intrusions in Ladakh. New Delhi has restricted Indo-U.S. cooperation to the realm of intelligence and privately asked Washington to lower the rhetoric over China. This is unlikely to change.

Within India, Mr. Modi’s strongman image has taken a dent from the confrontation with China. His insistence that India has not lost territory to China provides ammunition to his supporters, but the numbers of his blind supporters have dwindled. The Chinese military’s most recent aggression shows that Beijing continues to fuel the confrontation, and relations between India and China face a negative spiral without a predictable end. The political cost to Mr. Modi, it seems, will eventually be decided in Beijing as much as in New Delhi.

Riaz Haq said…
For the most part, Chinese news outlets have downplayed the recent clash. Unlike the proliferation of articles about the clash in the Indian news, Chinese media such as Xinhua News Agency, Caixin, People’s Liberation Army (PLA) Daily, and Pengpai have published only a few short articles. These mostly emphasize that the skirmish was quickly resolved in a diplomatic manner and call for the Indian side to work together with China to maintain peace on the border. They also lay the blame squarely on India, claiming that the clash occurred because the Indian army illegally crossed the LAC while the Chinese side was undergoing a routine border patrol. These brief accounts differ from the lengthy coverage in Indian media, which blames Chinese troops as the instigators.

The Chinese media response to the December (India-China border) clash is not surprising when seen in the larger context of how China views India.

While the 1962 war was seminal for India, prompting it to pour money into military modernization, China never saw it as a game-changing moment. Moreover, China’s laser-like focus on the United States means that it often erroneously views India through the frame of U.S.-China relations. For example, a recent op-ed by Tsinghua professor Li Xiguang made the astonishing claim that Himalayan countries (read India) view the Himalayan border and corridor through the eyes of Western analysts and “lack original knowledge production” (quefa zizhu de zhishi shengchan) on Himalayan issues. Professor Li’s prescription was for China to generously offer to rectify this lack and unify the region with its own expansive thinking along with the help of other scholars from the region.

These attempts by China to downplay not just December’s incident but the border dispute as a whole indicate a precarious misreading of the situation and the depth of India’s mistrust of China. In just the past few days, India has inaugurated several infrastructure projects along its border with China, aiming to develop the area for enhanced defense preparedness. These projects include the new Siyom bridge in Arunachal Pradesh, which will facilitate the delivery of rations and military equipment, and the recent purchase of three hundred rough terrain vehicles that can be used for the transportation of loads and casualty evacuations in high altitude areas.

While the risk of uncontrolled escalation on the border is said to be low, these sporadic clashes do nothing to mitigate the mistrust between the two nations, and instead deepen their rift. The ongoing instability is exacerbated by China significantly underestimating the importance that India places on the border and the occurrence of these clashes. For the bilateral relationship to improve, or even to maintain the status quo, China needs to take India’s concerns seriously.
Riaz Haq said…
Ukraine war impacts spare parts supply for Indian military: Army chief

India’s army chief said Thursday the war in Ukraine has impacted the supply of spare parts for India’s military.

Gen. Manoj Pande made his comments to reporters while discussing the border situation with China, which he described as stable but unpredictable. The two countries remain in a nearly two-and-a-half-year standoff in the eastern Ladakh area. He added that the countries were continuing to talk both at the diplomatic and military levels, and that India’s military maintains a high level of preparedness.

“The sustenance of these weapons systems — equipment in terms of spares, in term of ammunition — is one issue that we have addressed,” Pande said, without providing more details.

“We have adequate forces. We have adequate reserves in each of our sectors to be able to effectively deal with any situation or contingency,” he added.

Experts say up to 60% of Indian defense equipment comes from Russia, and New Delhi finds itself in a bind amid the standoff with China over a territorial dispute. Twenty Indian troops and four Chinese soldiers died in a clash in 2020.

The Times of India newspaper reported Thursday that India is having problems transporting back one of its diesel-run submarines after a major refit in Russia, which was hit with sanctions over its invasion of Ukraine.

India says China occupies 38,000 square kilometers (14,672 square miles) of its territory in the Aksai Chin plateau, which India considers part of Ladakh, where the current faceoff is happening.

India says any unilateral change in the border status quo by Beijing is unacceptable.

The Line of Actual Control separates Chinese- and Indian-held territories from Ladakh in the west to India’s eastern state of Arunachal Pradesh, which China claims in its entirety. India and China fought a deadly war over the border in 1962.

Riaz Haq said…
US becomes India's biggest trading partner in FY23: Report

(Indian) Exports to China dipped by about 28 per cent to USD 15.32 billion in 2022-23, while imports rose by 4.16 per cent to USD 98.51 billion in the last fiscal. Trade gap widened to USD 83.2 billion in the last fiscal as against USD 72.91 billion in 2021-22.


The US has emerged as India's biggest trading partner in 2022-23 on account of increasing economic ties between the two countries.

According to the provisional data of the commerce ministry, the bilateral trade between India and the US has increased by 7.65 per cent to USD 128.55 in 2022-23 as against USD 119.5 billion in 2021-22. It was USD 80.51 billion in 2020-21.

Exports to the US rose by 2.81 per cent to USD 78.31 billion in 2022-23 as against USD 76.18 billion in 2021-22, while imports grew by about 16 per cent to USD 50.24 billion, the data showed.

On the other hand, during 2022-23, India's two-way commerce with China declined by about 1.5 per cent to USD 113.83 billion as against USD 115.42 billion in 2021-22.

Exports to China dipped by about 28 per cent to USD 15.32 billion in 2022-23, while imports rose by 4.16 per cent to USD 98.51 billion in the last fiscal. Trade gap widened to USD 83.2 billion in the last fiscal as against USD 72.91 billion in 2021-22.

Experts believe that the trend of increasing bilateral trade with the US will continue in the coming years also as New Delhi and Washington are engaged in further strengthening the economic ties.

Federation of Indian Export Organisations (FIEO) President A Sakthivel said that increasing exports of goods such as pharmaceutical, engineering and gems and jewellery is helping India to push its shipments to America.

"The trend of increasing trade with the US will continue in the coming months also," he said.

FIEO Vice President Khalid Khan said India is emerging as a trusted trading partner and global firms are reducing their dependence only on China for their supplies and are diversifying business into other countries like India.

"The bilateral trade between India and the US will continue to grow as our exporters are getting good orders from that country," Khan said.

Rakesh Mohan Joshi, Director of the Indian Institute of Plantation Management (IIPM), Bangalore, too said that India provides huge trade opportunities for the US as India is the world's third largest consumer market and the fastest growing market economy.

"Major export items from India to the US include petroleum, polished diamonds, pharmaceutical products, jewellery, light oils and petroleum, frozen shrimp, made ups etc. whereas major imports from the US include petroleum, rough diamonds, liquified natural gas, gold, coal, waste and scrap, almonds etc," Joshi said.

America is one of the few countries with which India has a trade surplus. In 2022-23, India had a trade surplus of USD 28 billion with the US.

The data showed that China was India's top trading partner since 2013-14 till 2017-18 and also in 2020-21. Before China, the UAE was the country's largest trading partner.

In 2022-23, the UAE with USD 76.16 billion, was the third largest trading partner of India. It was followed by Saudi Arabia (USD 52.72 billion), and Singapore (USD 35.55 billion).
Riaz Haq said…
Chris Kay
The more India tries to ramp up production, the more it depends on China for components and raw materials, report


Fun Zoo Toys is an Indian manufacturing success story. The maker of heart-shaped cushions and “Little Ganesha” dolls started out as a family business in 1979 and has grown to be one of the nation’s major manufacturers of fluffy toys.

Sales doubled after Prime Minister Narendra Modi’s Made-in-India push saw import duties on toys ramped up from 20% to 70% over three years to 2023. But that’s just half of the story: the production surge to meet those sales wouldn’t have been possible without raw materials like metallic pins, integrated circuits and LEDs imported from China.


The Make in India dream keeps colliding with the Chinese reality

Read more at:

Last month, External Affairs Minister S. Jaishankar said Indian businesses need to stop looking for a "China fix", while terming the Make in India programme a strategic statement to spur the country's manufacturing.

Jaishankar was voicing the general sentiment that China's cheap imports de-industrialise India, take away millions of jobs and keep it dependent on China, therefore India's trade imbalance with China calls for more local manufacturing. India's trade gap with China widened to $83.2 billion in the last fiscal as against $72.91 billion in 2021-22. Exports to China dipped by about 28 per cent to $15.32 billion in 2022-23, while imports rose by 4.16 per cent to $98.51 billion in the last fiscal.

The solar dilemma
India's solar industry is an example of how India faces a complex challenge to fulfill its Make in India ambition. India might cut its import duties on solar panels to half, Reuters has reported recently. The renewable energy ministry has held talks with the finance ministry to approve its request to cut the import tax on solar panels from 40% to 20%,

India's nascent solar modules industry, which has been growing in the shelter of high tariffs, dread such a steep cut in import duties. The duty cut will deliver a blow to India's ambition of quickly expanding local production.

But local plants can’t keep up with rising demand and India must import solar modules to fill the gap. India is aiming to install 280 gigawatts of solar generation by 2030, compared to about 64 gigawatts now, as it overhauls its coal-dominated power grid, according to news agency Blomberg. That would require the addition of 27 gigawatts of capacity every year for the rest of the decade — more than double the volume installed last year.

While its local industry can't meet the rising demand, India must import more solar modules. But that imperils its nascent domestic industry which must grow to support the solar energy targets. “Such volatile changes in government policy show that businesses can’t be dependent on policy support,” Vinay Rustagi, MD at Bridge To India, a renewable energy consulting firm, told Bloomberg recently. “It’s a dampener for domestic manufacturing prospects.”

The China conundrum
Even when India tries to become more self-reliant by increasing local manufacturing capacity, it still has to depend on China for critical intermediate inputs. Take the case of Apple's iPhones made in India by Tata. Almost 90% components used for Apple phones by Tata are sourced from Mainland China, even as Apple looks to shift manufacturing to India, ET has reported recently. Items such as brackets, industrial glues, screws, mesh, pressure sensitive adhesives and metal parts are all shipped from China as per Apple’s instructions.
Riaz Haq said…
The Make in India dream keeps colliding with the Chinese reality

The China conundrum
Even when India tries to become more self-reliant by increasing local manufacturing capacity, it still has to depend on China for critical intermediate inputs. Take the case of Apple's iPhones made in India by Tata. Almost 90% components used for Apple phones by Tata are sourced from Mainland China, even as Apple looks to shift manufacturing to India, ET has reported recently. Items such as brackets, industrial glues, screws, mesh, pressure sensitive adhesives and metal parts are all shipped from China as per Apple’s instructions.

Only Apple’s old-time vendors such as Foxconn, Pegatron and Wistron manufacture “end-to-end” phones in India. In FY23, India accounted for 5% of iPhone’s total global production and exported phones worth $5 billion, a near four-fold surge compared with a year ago.

Localisation of manufacturing, the domestic value addition, however, can't happen before manufacturing achieves critical mass. Till then, India will have to depend on China for imports of intermediate goods. If you add to it the import of finished items where India cannot compromise growth, such as in the solar sector, it indicates a heavy reliance on China. It means India's project to become self-reliant in manufacturing must depend on imports from China, at least initially.

Many electric two-wheeler companies cornering subsidies, aimed at promoting domestic manufacturing to meet the ambitious green mobility goals, from the government without fulfilling the localisation requirements is a case in point. Many parts are imported from China due to lack of sufficient local manufacturing.

What are the prospects?
Global supply chains are not easy to shift from countries where they got embedded in a vast local manufacturing ecosystem. The countries trying to do that must develop comparable ecosystems which can't happen overnight. Meanwhile, they will have to depend on imports from China. Tariffs alone can't help local industries.

But India's concerted push for self-reliance in manufacturing, powered by hefty production-linked incentives, is not without results. India's imports of electronic goods such as laptops, personal computers, integrated circuits and solar cells from China declined during 2022-23, according to a report by economic think tank Global Trade Research Initiative (GTRI). The fall in imports is notable in electronic items where the incentives scheme is operational. Import of medical equipment declined 13.6 per cent to $2.2 billion last fiscal year as compared to 2021-22. Similarly, import of solar cells, parts, diodes slumped 70.9 per cent to $1.9 billion in 2022-23.

However, import of lithium-ion batteries surged about 96 per cent to $2.2 billion last fiscal year. India's green mobility goals will only increase these imports steeply. For India to keep its growth steady, meet its energy goals and expand its manufacturing base, the Make in India must be supported by Make in China.

Read more at:
Riaz Haq said…
Ashok Swain
The US ambassador to India (2017-2021) Ken Juster says Modi even tells the US not to make China angry! How can one expect Modi to confront China. All his bravado comes against Pakistan.


India asked Washington not to bring up China’s border transgressions: Former US ambassador

Kenneth Juster made the statement on a Times Now show when asked why the United States had not made any statement about Beijing’s aggression.

Former United States Ambassador to India Kenneth Juster has said that Delhi did not want Washington to mention China’s border aggression in its statements.

“The restraint in mentioning China in any US-India communication or any Quad communication comes from India which is very concerned about not poking China in the eye,” Juster said on a Times Now show.

The statement came in response to news anchor and Times Now Editor-in-Chief Rahul Shivshankar’s queries on whether the US had made any statements about Beijing’s aggression.

India and China have been locked in a border standoff since troops of both countries clashed in eastern Ladakh along the Line of Actual Control in June 2020. Twenty Indian soldiers were killed in the hand-to-hand combat. While China had acknowledged casualties early, it did not disclose details till February 2021, when it said four of its soldiers had died.

After several rounds of talks, India and China had last year disengaged from Pangong Tso Lake in February and from Gogra, eastern Ladakh, in August.

Juster, who was the envoy to India between 2017 and 2021, had said in January 2021 that Washington closely coordinated with Delhi amid its standoff with Beijing, but left it to India to provide details of the cooperation.

During the TV show, defence analyst Derek Grossman claimed that Moscow was not a “friend” of India, saying that Russian President Vladimir Putin met his Chinese counterpart Xi Jinping at the Beijing Olympics. Grossman told the news anchor that Putin and Xi had then said that their friendship had “no limits”.

He claimed that India’s strategy to leverage Russia against China did not have any effects. “In fact, Russia-China relations have gotten only stronger.”

To this, Shivshankar said that before passing any judgement on India and Russia’s relationship, he must ask if US President Joe Biden had condemned China’s aggression at the borders along the Line of Actual Control or mentioned Beijing in a joint statement with Prime Minister Narendra Modi.

Grossman said: “To my understanding, the US has asked India if it wanted us to do something on the LAC but India said no – that it was something that India can handle on its own.”

Juster then backed Grossman’s contention.
Riaz Haq said…
Lightspeed says India not for the faint-hearted amid Sequoia split

Tiger Global partner Scott Shleifer echoed similar sentiment earlier this year. India is likely to produce the highest equity returns globally in the future, he said, but admitting that the world’s second-largest internet market had delivered below average returns for the investor giant historically and the local startup ecosystem was grappling with governance and unit economics challenges.

“Returns on capital in India have sucked historically. If you look at the market-leading internet companies, whether it is Google, Facebook, Alibaba or Tencent, revenue for them got bigger than cost more than a decade ago. You had a great legacy of the last 17-18 years of materially profitable internet companies. So returns on equity in the internet got really high and the returns for investors have been really high. But that did not happen in India,” he said.


Bejul Somaia, the founding partner of Lightspeed India, staunchly defended the allure of South Asia’s investment landscape, even in the wake of unsettling movements such as Sequoia’s decision to segregate its Indian venture.

“The startup and venture model is predicated on learning and adapting fast, navigating to high upside and understanding that the few companies that really succeed drive economies and humanity forward and create enormous value,” Somaia wrote in an essay, posted on Twitter.

“And those that don’t succeed contribute to a cycle of creative destruction that is essential to the development of an innovation economy. The potential of India remains incredibly compelling: a sizable market, high-quality founders and one-way adoption of technology. The question is not whether there is potential, but how best to navigate this potential.”

Somaia’s remarks come on the heels of an escalating critique from certain industry figures who have been openly skeptical about Sequoia’s decision to cut the India and Southeast Asia arm. The storied venture firm said earlier this month that it intends to separate its Indian and Chinese operations from the U.S. mothership, a move that has instigated heated debate in the industry.

Chamath Palihapitiya, the billionaire founder of Social Capital, said he was puzzled by Sequoia’s decision to split up the India business. “I was surprised why they would allow India to leave,” he said on his podcast All-In last week. “India is a country growing at 6% a year. It literally looks like China in 2008-09. I think you would want to attach them to yourself because it makes the U.S. business look better.”

Palihapitiya said he doesn’t buy the idea — the on-record justification provided by the venture firm — that Sequoia is splitting the business because of portfolio conflict concerns.

“Sequoia China is frankly over the last 15-20 years is as good or probably better than Sequoia U.S. Sequoia India, I don’t think, has much to talk about and maybe what Roelof [Botha, Managing Partner at Sequoia Capital] decided was that this team is just not very good, so we might just as well cut it and revisit it later.”

Sequoia India and SEA, the most prolific investor in the region, raised $9.2 billion across 13 funds over the past decade-and-a-half and backed over 400 startups. The firm, now known as Peak XV Partners, has delivered $4.5 billion of realized exits.

Lightspeed India, which also started investing in India over a decade ago, has raised $1.6 billion to date and returned about $1 billion to its limited partners and the value of its current asset holding is $3.4 billion, Somaia said.

“India is not for the faint-hearted. India is tough. But India is worth it,” he wrote.
Riaz Haq said…
Unlike China, which has developed its end-to-end supply chain solutions over the last four decades, India’s manufacturing sector has been small relative to its agricultural sector. India has yet to develop its capability to produce electronic parts domestically. India imported $12 billion worth of China-manufactured electronic parts in a five-month span last year, making up more than a quarter of its China imports. Netherlands-based Philips said in October that, despite the call to derisk from China, it will continue to source Chinese components including nuts, bolts, plastics, electronics, monitors, and other semi-finished goods for its operations around the world.

To develop a connected national market, the Indian government is building motorways, airports, and railroads to stimulate material and people movements between states. However, even when this new infrastructure is put in place, there will be wide gaps between states. GDP per person in Uttar Pradesh is around $4,000, compared to $10,000 in Kerala.

Besides the income gap, there is a cultural gap. Unlike China, where 92% of the population belongs to the Mandarin-speaking Han ethnic group, India has a very diverse population that speaks many languages. Cultural differences, language problems, and state-specific business regulations make expanding a business from one state to another a challenge.

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