India Emerges the Biggest Winner of the Ukraine War and Growing US-China Tensions

"It may be dangerous to be America's enemy, but to be America's friend is fatal" Henry Kissinger

India is emerging as the biggest beneficiary of the Ukraine War and the US efforts to check China's rise. Indian businesses are busting US sanctions to take advantage of the vacuum left in Russia by the exit of western businesses since the start of the Ukraine War.  At the same time, the US is rewarding India by promoting it as an alternative to China in the global supply chain.  Meanwhile, Beijing is warning New Delhi that India "will be the biggest victim" of America's "proxy war" against China. 

L to R: Modi, Putin, Xi and Biden

Soaring Russia-India Trade: 

Since the start of Russia's invasion of Ukraine, India has ramped up its imports of Russian oil by a whopping 33 times, according to the Christian Science Monitor.  Dr. Nivedita Kapoor, an Indian expert at the Higher School of Economics in Moscow, told the Monitor: “Right now the focus is on pharmaceuticals, electronics, machinery, chemical products, medical instruments, and agricultural products,” says Dr. Kapoor. “We have already been exporting these goods to Russia, and there is potential for major increases. ... It may be harder to expand the list due to the threat of secondary sanctions. In this environment, the Indian private sector looks at Russia as a risky market. But the immediate potential is very big.”   

“The best solution would be for Russia to make an early end to this war,” Kapoor said. “We can envisage a situation where Western companies have already exited the Russian market, and burned their bridges, while the Indian private sector no longer regards business with Russia as a risky proposition, carrying the threat of secondary sanctions. All that would go away for us, but we need to see an end to this war”, she added. 

India in Global Supply Chain: 

With growing Washington-Beijing tensions,  the United States is trying to decouple its economy from China's. The Wall Street Journal has reported that the Biden administration is turning to India for help as the U.S. works to shift critical technology supply chains away from China and other countries that it says use that technology to destabilize global security.

The US Commerce Department is actively promoting India Inc to become an alternative to China in the West's global supply chain.  US Commerce Secretary Gina Raimondo recently told Jim Cramer on CNBC’s “Mad Money” that she will visit India in March with a handful of U.S. CEOs to discuss an alliance between the two nations on manufacturing semiconductor chips. “It’s a large population. (A) lot of workers, skilled workers, English speakers, a democratic country, rule of law,” she said.

China-India Border Conflict: 

India's unsettled land border with China will most likely continue to be a source of growing tension that could easily escalate into a broader, more intense war, as New Delhi is seen by Beijing as aligning itself with Washington

In a recent Op Ed in Global Times, considered a mouthpiece of the Beijing government, Professor Guo Bingyun  has warned New Delhi that India "will be the biggest victim" of the US proxy war against China. Below is a quote from it: 

"Inducing some countries to become US' proxies has been Washington's tactic to maintain its world hegemony since the end of WWII. It does not care about the gains and losses of these proxies. The Russia-Ukraine conflict is a proxy war instigated by the US. The US ignores Ukraine's ultimate fate, but by doing so, the US can realize the expansion of NATO, further control the EU, erode the strategic advantages of Western European countries in climate politics and safeguard the interests of US energy groups. It is killing four birds with one stone......If another armed conflict between China and India over the border issue breaks out, the US and its allies will be the biggest beneficiaries, while India will be the biggest victim. Since the Cold War, proxies have always been the biggest victims in the end". 

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Chan said…
US is always boasting about the supply chain moving out of China. What on earth the "supply chain" refers to? US banned almost all high end products import from China already. So the "supply chain" here is all about assembly factories for Apple phones, textiles, drug materials, daily goods. Are these items really important for China's economy?,2%20percent%20of%20our%20GDP.

"Those were record highs and China accounted for over half of 2021 US imports in both categories. At the macroeconomic level, China's goods exports to the US continue to account for approximately 3 percent of its annual GDP. The US reports goods imports from the PRC are the equivalent of a bit over 2 percent of our GDP"

Moh said…
There is truth to this.

The USA will simply not sanction India for things that it would 100% other nations for. National interests trumps everything after all, and when you're a global power you make your problem everyone else's problem.

I think India knows it'll be used if it goes into the US's camp so its elected to use the US instead and milk as much as possible before the US gets realizes whats happening. US policy makers are deluding themselves if they think they'll be able to buy India like they were able to do with other nations like Pakistan.
Syed said…
Indians are smart. Pakistan should follow their example.
Riaz Haq said…
Syed:"Indians are smart. Pakistan should follow their example"

Americans are not stupid. Nothing is free in this world. There'll be a cost to India for its foreign policy. Read below an excerpt of a recent Global Times Op Ed:

"Inducing some countries to become US' proxies has been Washington's tactic to maintain its world hegemony since the end of WWII. It does not care about the gains and losses of these proxies. The Russia-Ukraine conflict is a proxy war instigated by the US. The US ignores Ukraine's ultimate fate, but by doing so, the US can realize the expansion of NATO, further control the EU, erode the strategic advantages of Western European countries in climate politics and safeguard the interests of US energy groups. It is killing four birds with one stone......If another armed conflict between China and India over the border issue breaks out, the US and its allies will be the biggest beneficiaries, while India will be the biggest victim. Since the Cold War, proxies have always been the biggest victims in the end".
Riaz Haq said…
Close ties Russia won't help India if indeed Russia becomes a junior partner of China.

by Niels Graham

While Putin and Chinese President Xi Jinping present their countries’ partnership as a “no limits” friendship, Russia’s invasion of Ukraine has cemented Russia’s status as the junior partner of an increasingly one-sided relationship. As the West decouples itself from Russia, Moscow will increasingly rely on Beijing, not just for financing but a range of areas including trade, technology, and international diplomatic support.


Russia’s 2022 invasion of Ukraine, as well as G7 sanctions imposed in retribution, have expedited Moscow’s pivot to Beijing. While Russia’s economic reorientation has most prominently played out in its goods trade, particularly with hydrocarbons, Russia’s financial relationships have undergone a parallel shift. As a result, Russia’s economy is now heavily reliant on Chinese capital. Though this may be favorable for Russia now, overreliance on Chinese finance will reinforce Russia’s status as the junior partner in the two countries’ relationship.

Chinese authorities do not publicly report their banks’ consolidated positions, but alternative data sources suggest that Chinese lenders may have maintained or extended additional credit to Russian borrowers in the aftermath of Russia’s invasion of Ukraine. One notable example is syndicated lending—a type of loan provided by a group of lenders and preferred by international financiers, as it allows them to share risk. Syndicated lending data suggests loans originating from Chinese banks now account for nearly half the global total of syndicated loans to Russia. In the coming months, this overreliance will likely grow as financial institutions in other parts of the world, namely Europe, halt new lending to Russia and refuse to refinance or roll over existing loans, with many banks pulling out of the country altogether.
Riaz Haq said…
Close ties with Russia won't help India if indeed Russia becomes a junior partner of China.

by Niels Graham

While Putin and Chinese President Xi Jinping present their countries’ partnership as a “no limits” friendship, Russia’s invasion of Ukraine has cemented Russia’s status as the junior partner of an increasingly one-sided relationship. As the West decouples itself from Russia, Moscow will increasingly rely on Beijing, not just for financing but a range of areas including trade, technology, and international diplomatic support.


Russia’s 2022 invasion of Ukraine, as well as G7 sanctions imposed in retribution, have expedited Moscow’s pivot to Beijing. While Russia’s economic reorientation has most prominently played out in its goods trade, particularly with hydrocarbons, Russia’s financial relationships have undergone a parallel shift. As a result, Russia’s economy is now heavily reliant on Chinese capital. Though this may be favorable for Russia now, overreliance on Chinese finance will reinforce Russia’s status as the junior partner in the two countries’ relationship.

Chinese authorities do not publicly report their banks’ consolidated positions, but alternative data sources suggest that Chinese lenders may have maintained or extended additional credit to Russian borrowers in the aftermath of Russia’s invasion of Ukraine. One notable example is syndicated lending—a type of loan provided by a group of lenders and preferred by international financiers, as it allows them to share risk. Syndicated lending data suggests loans originating from Chinese banks now account for nearly half the global total of syndicated loans to Russia. In the coming months, this overreliance will likely grow as financial institutions in other parts of the world, namely Europe, halt new lending to Russia and refuse to refinance or roll over existing loans, with many banks pulling out of the country altogether.
DS said…
The US is coaxing India by using flattery, ego-boosting and bribery to actually invade China.

during the Galwan fracas modi said that Chinese did not encroach in to indian occupied territories nor did they take any lands, which Jaishankar later confirmed in a joint statement with his Chinese counterpart. now after amreeki encouragement he is reneging on that agreement and says that Chinese had changed the LAC/had taken areas previously under bharati occupation. he says it cannot be allowed to stand, thus are now making plans to retake them.

this amreeki protection is gonna cost them recognition-hungry retards dearly. they think that they will defeat China by piggy-backing onto NATO power but they will be sorry. even if China is checked/reduced in half, there will be no india left worth having.
Fan said…
In these nuclear wars, there is none the winner. That is exactly what USA wants - destruction among China, Pakistan, India and Russia/Ukraine.
Riaz Haq said…
Fan: "In these nuclear wars, there is none the winner. That is exactly what USA wants - destruction among China, Pakistan, India and Russia/Ukraine"

That would be the end of the dream for this century to be the Asian Century!
Riaz Haq said…
Schumer in India stresses economic ties as ‘crucial counterweight’ to China

Senate Majority Leader Chuck Schumer (D-N.Y.) says ties between the U.S. and India are a “crucial counterweight to outcompete China” as he leads a congressional delegation to New Delhi to meet with Indian Prime Minister Narendra Modi.

“We need nations such as India, the world’s largest democracy, to work with us to strengthen democracies in Asia and around the globe. In our meeting with Prime Minister Modi, we stressed that close ties between our two countries would be a crucial counterweight to outcompete China and responding to its authoritarianism,” Schumer said in a statement.

“India is one of the leading powers of the world and a strong U.S.-India relationship is a must for democracy, technology advancement, and a strong world economy.”

Joined by fellow Democratic Sens. Ron Wyden (Ore.), Amy Klobuchar (Minn.), Mark Warner (Va.) and Catherine Cortez Masto (Nev.), among others, Schumer met with Modi to discuss what he called “the growing U.S.-India relationship and the common interests that unite the two largest democracies in the world.”

Among the countries’ shared strategic interests, Schumer listed “outcompeting China, combating climate change, increasing trade and deepening bonds between our two countries” as well as “close cooperation between the U.S. and India in areas such as AI, green hydrogen and advanced tech manufacturing.”

“I strongly believe the continued and strengthened U.S.-India relationship will be the great story that will define the 21st century,” Schumer said.

Modi said afterward that it was “wonderful” to meet with the delegation and expressed appreciation for bipartisan congressional support on “deepening India-US ties anchored in shared democratic values and strong people-to-people ties.”

Schumer’s comments on out-competing Beijing comes amid heightened U.S.-China tensions after the Biden administration shot down a Chinese surveillance balloon over U.S. airspace earlier this month. Beijing has insisted the aircraft was a civilian weather device.

Secretary of State Antony Blinken on Sunday also said the U.S. was concerned China might move to provide lethal aid to Russia as it continues its war against Ukraine, though China hit back at the U.S. for the accusations on Monday.

The Biden administration has made out-competing China a priority, emphasizing the importance of strengthening international alliances to make that happen.
Riaz Haq said…
Sunak's refusal to defend the BBC against Modi is a threat to free speech
Imran Mulla , Peter Oborne

The Tories, usually quick to condemn countries for curbing media power, risk emboldening the premier's authoritarianism at a pivotal moment in India’s history

In recent weeks, UK Labour party leader Keir Starmer has opened up a cruel new attack line against Prime Minister Rishi Sunak.

That line says that Sunak is hopelessly weak, that he’s not big enough for the job, and that he’s too slow to deal with bullies. Time after time, Starmer drives these attacks home at Prime Minister’s Questions.

Over the past few weeks, a new bully has appeared on Sunak’s horizon - Indian Prime Minister Narendra Modi. And Sunak isn’t standing up to him either.

Modi’s government in India is renowned for brutal attacks on the country’s media. So much so that in 2022 an international media watchdog ranked India 150th out of 180 countries in its index of press freedom. Now the Modi government has turned its fire on the BBC, Britain’s national broadcaster and one of the most respected news organisations in the world.

Shockingly, neither Sunak nor his government has lifted a finger to defend it from the Indian prime minister's assault.

'Hostile propaganda'
Modi is furious with the BBC because in late January it released a two-part documentary on his relationship with India’s 200 million Muslims.

The first episode focused on the 2002 anti-Muslim pogrom in the western state of Gujarat. The violence, which happened when Modi was Gujarat's chief minister, saw more than 1,000 people killed.

The BBC documentary revealed that a British government report found Modi “directly responsible”. Although it was aired only in Britain, and featured interviews with members of India’s ruling BJP party who defended Modi, the Indian government’s response was ferocious.

It banned the documentary and called it “hostile propaganda and anti-India garbage”. It ordered YouTube and Twitter in India to block it on their platforms - and they seem to have complied.

When students at the prestigious Jawaharlal Nehru University tried to screen the documentary, the administration turned off the electricity and internet access. At Delhi University, 24 students were detained by the police for trying to screen it.

Throughout all this, neither Sunak nor his ministers said anything.

In parliament, a Labour politician asked Sunak about the documentary. The prime minister made no attempt to defend the BBC. Instead, he replied that he did not “agree at all” with the BBC’s characterisation of Modi.

Just weeks later, the Indian government launched a brazen attack on the BBC. On 14 February, over a dozen officials from the Indian government’s income tax department arrived at BBC offices in Delhi and Mumbai to carry out a three-day tax raid, or a “survey” as the government calls it.

The Ministry of Finance then accused the BBC of tax evasion.

Incredibly, though, there has been no statement of concern or condemnation from Sunak at this blatant harassment, no public defence of the BBC from the UK government. Astonishingly, the British High Commission in India, which is reportedly monitoring the situation, has not issued a statement.


Media watchdog Reporters Without Borders took the same view. “These raids have all the appearance of a reprisal against the BBC for releasing a documentary critical of Prime Minister Narendra Modi three weeks ago,” it said in an official statement.


Indian journalist Karan Thapar, speaking about the attack on the BBC, said that the "damage that has been done is to our country, to our country's reputation, to our country's standing as a democracy, and that means that the damage has been done to something that matters to all of us as Indian people”.

Riaz Haq said…
India is about to surpass China as the world's most populous country.

India has overtaken China in terms of the US F-1 student visas issued.

Graduate programs in STEM and business fields at US universities are dominated by Indian and Chinese students.

100,000 Indians and 56,000 Chinese students have been issued US F-1 visa in 2022.

Most Chinese students go back to China while the vast majority of Indian students stay in the US for employment after graduation.

So it makes sense that some of the top Indian students graduating from US universities rise to become CEOs of tech companies.

Riaz Haq said…
Hiring for top positions occurs mostly from within the company.

People like Parag Aggarwal, Satya Nadella and Sundar Pichai rose to these positions after working at Twitter, Microsoft and Google for many years.

All of them came to the US to study before being hired to work at these tech companies.

The probability of such promotions is a lot higher if there are lots of Indians coming out of US grad schools and working for these companies.

Currently, there are 199,182 Indian students and just 8,772 Pakistani students enrolled in US universities.
Riaz Haq said…
Infosys founder NR Narayana Murthy says IITs have become victims to rote learning due to coaching classes

As more and more students leave India for higher studies, Infosys founder Narayana Murthy proposed that governments and corporates should “incentivise” researchers with grants and provide facilities to work here. “The 10,000 crore per year grants for universities under the New Education Policy will help institutions become competitive", he said.

Infosys founder NR Narayana Murthy on Tuesday expressed concern over India’s education system saying that even the IITs are becoming a victim of learning by rote due to the “tyranny of coaching classes.” Murthy suggested that our education system needs a reorientation directed towards Socratic questioning.
The Infosys founder, who himself is an IIT alumnus, batted for Socratic questioning in the classroom in order to arrive at solutions to real-world issues. “Many experts feel that (in) our country, (there is an) inability to use research to solve our immediate pressing problems around us… (this) is due to lack of inculcating curiosity at an early age, disconnect between pure or applied research," he said.

As to what could be done to solve this, the 76-year-old suggested that the first component is to reorient teaching in schools and colleges towards Socratic questioning in the classroom to solve real-world problems rather than passing the examinations by rote learning. Socrates was a fifth century (BCE) Greek philosopher credited as the founder of Western philosophy.
Speaking at the 14th edition of the Infosys Prize event in Bengaluru, Murthy said that the nation’s progress on the economic and social front depends on the quality of scientific and technological research. Research thrives in an environment of honour and respect for intellectuals, meritocracy and the support and approbation of such intellectuals from society, he noted.

Riaz Haq said…
#BBC says it won't be deterred by #Indian gov't's censorship of #ModiDocumentary and tax raids on its offices. In an email to staff in India, BBC DG Tim Davie applauded reporters' courage in the face of attacks. #Hindutva #Fascism #freespeech #democracy

The BBC says it will not be “put off” from reporting in India after the government prevented a documentary critical of Prime Minister Narendra Modi from airing in the country and raided the broadcaster’s offices.

Indian tax authorities spent three days searching BBC offices in Delhi and Mumbai last week. The raids came nearly a month after the Indian government used emergency powers to ban the two-part documentary “India: The Modi Question.”

In an email to staff in India, BBC director general Tim Davie applauded their courage in the face of what press groups and India’s main opposition Congress party have condemned as an attack on press freedom

“Nothing is more important than our ability to report without fear or favour,” Davie wrote in the email, a copy of which was shared with CNN.

“Our duty to our audiences around the world is to pursue the facts through independent and impartial journalism, and to produce and distribute the very best creative content. We won’t be put off from that task”

Davie added that the BBC “does not have an agenda.”

Indian authorities have accused the BBC of tax evasion. India’s Income Tax Department said it had found “several discrepancies and inconsistencies” in the records of “a prominent international media company.” The BBC said last week that it would “respond appropriately to any direct formal communication received from the Income Tax Department.”

Davie said in his email that the BBC continued to cooperate fully with the Indian tax authorities.

Reporters Without Borders (RSF) said that the searches had “all the hallmarks of a reprisal,” coming as they did weeks after the Indian government prevented the Modi documentary from airing and blocked clips of it circulating on social media.

The documentary, which broadcast in the United Kingdom in January, criticized the role played by Modi as chief minister of the western state of Gujarat when riots broke out between the state’s majority Hindus and minority Muslims in 2002.

Modi was accused of not doing enough to stop the violence, which killed more than 1,000 people, mostly Muslims. Modi has denied wrongdoing, and a special investigation team appointed by India’s Supreme Court in 2012 found no evidence to suggest he was to blame.

The prime minister has been accused of silencing his critics in recent months and on Thursday, a senior member of India’s Congress party was arrested for allegedly insulting Modi.

— Swati Gupta and Manveena Suri in New Delhi, Olesya Dmitracova and Martin Goillandeau in London, and Alex Stambaugh in Hong Kong contributed reporting.

Riaz Haq said…
The war in Ukraine: Impact on Pakistan’s energy security

by Waqar Rizvi

Pakistan has long dealt with energy-insecurity, a state of affairs exacerbated by the disastrous economic effects of the pandemic, floods and war in Ukraine. While some experts warned Pakistan that its energy dependence was untenable, there were others who believed such concerns were overblown thanks to the abundance and low cost of Liquefied Natural Gas. The war in Ukraine has proven the latter group wrong, the subsequent sanctions disrupting energy supplies from Russia and driving up global prices. Europe's entry into the market and ability to meet any cost in securing limited worldwide supplies place Pakistan in an even more difficult position.

Pakistani officials already warn of mass gas shortages, and load-shedding in households is rampant with areas of the country experiencing daily power cuts that are 16 hours long. The country’s vital textile industry also stands to suffer from an interrupted and limited supply. This situation exists despite Pakistan's possession of exploitable natural resources, owing to policy-makers' dogmatic view that the development of these resources for self-reliance was unachievable. In addition, insecurity and political instability in areas such as resource-rich Balochistan have thwarted any remedial measures.

Pakistan’s alliances and loyalties with traditional allies are being tested at this difficult time. To encourage vital foreign investment in Pakistan's energy sector, the government can take advantage of the desire of the Chinese, Russians, Americans and Europeans to gain influence in the country. Restricted by geopolitical considerations from taking sides in the war on Ukraine, Pakistan must secure its national interests, especially energy security.

Pakistan should eschew inactivity despite the risk of being outbid in the competitive global LNG market. Responsible energy policymaking must be embraced, including the implementation and incentivisation of energy conservation measures, whilst shielding the lower classes from additional energy costs. Needed is a multifaceted energy policy that considers all available resources such as gas, oil, coal, solar, hydro and wind power. Experts must be involved in the formulation of sound strategies to exploit these sources, and Pakistan must learn from its mistakes, such its signing of bad-faith contracts with LNG middlemen, which allowed them to abandon Pakistan's agreements for profits.

However, political turmoil remains the largest contributor to Pakistan's energy insecurity. The government and opposition parties will need to put aside their partisan bickering to prioritize the country’s interests. Sound policies grounded in reality, as opposed to theoretical ones, are called for, and leaders must step up during crises.

Pakistan is in dire need of an infrastructural upgrade and must play all its cards to achieve it. Diplomatically, Pakistan holds significant influence in international forums and has valuable voting power at the United Nations. Economically, Pakistan can promise significant benefits to nations that invest in its natural resources.
Riaz Haq said…
The Wire

After S. Jaishankar said that India cannot pick a fight with China because the latter has a bigger economy, military veterans have accused the Narendra Modi government of having a "defeatist attitude" and "bowing down to a bully".

New Delhi: After external affairs minister S. Jaishankar said that India cannot pick a fight with China because the latter has a bigger economy, military veterans have accused the Narendra Modi government of having a “defeatist attitude” and “bowing down to a bully”.

In a podcast with ANI editor-in-chief Smita Prakash on Wednesday, Jaishankar said: “Look, they (China) are the bigger economy. What am I going to do? As a smaller economy, I am going to pick up a fight with the bigger economy? It is not a question of being reactionary, it’s a question of common sense….”

He added that India and China have an agreement not to bring large number of troops to the border, and asked if India should violate that agreement.

Former Navy chief Arun Prakash, a veteran of the 1971 war, tweeted: “If relative size of economies is seen as arbiter of int’l relations, how come nations like Cuba, N Korea & Iran thumb their noses at the USA or Vietnam at China? India, as a democracy, nuclear weapon state & significant economic & mil power must stand firm against hegemony.”

Major General Shail Jha (retired) tweeted: “Mr Jaishankar should know that its not India but China which is picking the fight.”

The veteran added: “Economy or no economy, if we bow down to a bully, we are abandoning our self-respect. Is it acceptable? What a shame. And the guy is being hailed as the greatest FM. It’s cowardice.”

Speaking to The Telegraph, a former lieutenant general said Jaishankar’s statement was “shocking” and was reminiscent of “unconditional surrender”.

“What happened to the so-called muscular nationalism that this government projects in election speeches? Modi’s self-declared muscular nationalism has now capitulated to Chinese aggression and bullying,” the veteran said.

Speaking about Chinese intrusions across the Line of Actual Control (LAC), the veteran told the newspaper that instead of “asking the Chinese troops to retreat”, the “New India under Modiji agreed to create buffer zones within Indian territories in eastern Ladakh as part of the disengagement agreement, thus ceding further territory to China

A retired colonel said Jaishankar’s “defeatist statement” spoke volumes about Modi’s China policy. “Where is Mr 56-inch Modi’s muscular nationalism when it comes to China?” the former colonel asked.

Riaz Haq said…
In less than a year, the #Indian government has saved an estimated $3.6 billion by ramping up #Russian #oil imports. The #West’s #sanctions on #Russia’s oil trade have benefited #India hugely. #Modi #UkraineWar #Hindutva #BJP #US

The amount is possibly much higher. For instance, in May 2022, supplies from Russia were priced at $16 cheaper than the average Indian imported crude oil barrel of $110. By then, Russia had already reduced $30 on every barrel sold to India, Quartz had reported.

India has subsequently bought Russian oil well below the $60-a-barrel cap imposed by the West.

“For some deals this month, the price for Urals (Russia’s flagship crude) in Indian ports, including insurance and delivery by ship, has fallen to around minus $12-$15 per barrel versus a monthly average of dated Brent, down from a discount of $5-$8 per barrel in October and $10-$11 in November,” Reuters reported on Dec. 14, 2022, citing unnamed sources.

India is among Russia’s topmost buyers
Russia changed the target market for its oil supplies to Asia after the US and Europe Union imposed sanctions after its invasion of Ukraine. Till then, Europe was its largest market.

Having ignored the West’s concerns, India now plays a significant role in keeping Russia’s oil balance sheet afloat. The country depends on imports to meet 85% of its petroleum needs. Private players like Reliance Industries and Nayara Energy account for more than half of its total inbound shipments.

This year, Indian refiners cumulatively imported around 1.3 million barrels every day during January 1-15. Private firms accounted for 60% of this, energy intelligence firm Vortexa estimated.

Russia’s increasing share of the Indian oil market
By June 2022, Russia’s share of India’s oil imports had risen from a mere 2% in February 2022—before the Ukraine war—to 18%. Soon after, Russia became India’s second-largest crude oil supplier after Iraq.

The constant lowering of prices compelled Iraq also to follow suit, although that didn’t stop Russia from becoming India’s top supplier.

India stood its ground in the face of criticism from the West over this association.

“Russia has been a steady and time-tested partner. Any objective evaluation of our relationship over many decades would confirm that it has actually served both our countries very, very well,” foreign minister S Jaishankar said in Russia in November 2022, confirming a continuance of policy.
Riaz Haq said…
#US Sec of State Tony #Blinken Says #India, #SouthAfrica Are on Slow Trajectory Away From Alignment With #Russia. Neither country has joined the West in denouncing Russia's invasion of #Ukraine. #NATO #China

WASHINGTON (Reuters) - U.S. Secretary of State Antony Blinken said on Thursday countries like India and South Africa, which have not joined the West in denouncing Russia's invasion of Ukraine, were likely on a trajectory away from alignment with Moscow but that process would not happen "in one fell swoop."

"There are countries that have long-standing, decades-long relationships with Russia, with the Soviet Union before, that are challenging to break off in one fell swoop. It's not flipping a light switch, it’s moving an aircraft carrier," Blinken said in an interview with The Atlantic, marking the one year anniversary of the war.

India has faced pressure from the West to distance itself from Moscow after Russian invaded Ukraine. New Delhi has thus far resisted that pressure, citing its longstanding ties with Russia and its economic and oil needs.

Russia has been India's largest weapons supplier since the Soviet Union days. However, Washington in recent years has looked to woo New Delhi away from its traditional military supplier. India is desperate to modernize its largely Soviet-era fighter jet fleet to boost its air power after concerns over Russian supply delays due to the Ukraine war.

"India for decades had Russia at the core of providing military equipment to it and its defenses, but what we’ve seen over the last few years is a trajectory away from relying on Russia and moving into partnership with us and other countries," Blinken said.

Blinken also added that he understood the reasons for South Africa's ties with Russia while acknowledging regret for Washington's "sympathetic" approach to the apartheid-era regime in South Africa.

The African National Congress party, which has governed South Africa since white minority rule ended in 1994, had strong ties to the former Soviet Union, which trained and supported anti-apartheid activists during the Cold War. Nelson Mandela, South Africa's anti-apartheid hero, who died in 2013 and was a global icon, was regarded with suspicion by Washington during the Cold War and was even on the U.S. terrorism watch list in that era.

"The Soviet Union was supportive of the freedom forces in South Africa, and of course unfortunately, more than unfortunately, the United States was much too sympathetic to the apartheid regime, so that history also doesn’t get erased, you know, overnight, it's a process," Blinken said.

(Reporting by Kanishka Singh in Washington; editing by Jonathan Oatis)
Riaz Haq said…
#US Treasury Sec Janet Yellen: #India part of ‘friendshoring’ plan for #tech #supplychains.“We are seeing progress; as an example, #technology companies like #Apple and #Google have expanded their phone #production in India” #China via @IndianExpress

India is an important part of the United States’ business strategy of “friendshoring”, by which supply chains to the country are being made resilient, Treasury Secretary Janet Yellen told tech business leaders in Bengaluru on Saturday.

“As we look towards to the future, I am eager to deepen our ties in the technology sector,” the US treasury secretary said at a meeting held on the sidelines of a G20 meeting of finance ministers and central bank governors.

“The United States is advancing an approach called ‘friendshoring’ to bolster the resilience of our supply chains. We are doing this by strengthening integration with our many trusted trading partners – including India,” the former Federal Reserve chair said.

“We are seeing progress; as an example, technology companies like Apple and Google have expanded their phone production in India,” she said. “We depend on each other on a daily basis: Indians use WhatsApp to communicate and many American companies rely on Infosys to operate.”

“The US is India’s biggest trading partner. In 2021, our bilateral trade was over $150 billion. Our people-to-people ties affirm the closeness of our relationship. 200,000 Indians are studying in America and enriching our schools and universities,” she said.

Yellen quoted President Joe Biden as saying that India was an indispensable partner of the US.

“Through the Partnership for Global Infrastructure and Investment, or PGII, we are investing in digital technologies that will drive inclusive, resilient growth in India. Under PGII, the United States has announced investments in agri-tech to enable climate-smart agricultural production, and in digital payments systems for micro-entrepreneurs,” she said.

Riaz Haq said…
“India's economic growth appears to be 'very fragile' and it may fall short of what the country needs for its growing workforce”.
So says RBI Monetary Policy Committee member Jayanth R. Varma

In India, Mr. Varma said he expects inflation to remain high in 2022-23 but come down significantly in 2023-24.

"However, growth appears to be very fragile, and monetary tightening is compressing demand," he told PTI.

Explaining further, he said rising EMI payments increases the pressure on household budgets and dampens spending, and exports are struggling in the face of global factors.

While noting that high interest rates make private capital investment more difficult, Mr. Varma said the government is in fiscal consolidation mode, thus reducing the support to the economy from this source.

"Because of all these factors, I fear that growth may fall short of what we need to meet the aspirations of our growing workforce given our demographic context and income level," he said.

The Reserve Bank of India (RBI) has projected India's economic growth at 6.4 per cent for 2023- 24. Gross Domestic Product (GDP) growth is estimated at 7% in 2022-23, according to the first advance estimate of the National Statistical Office (NSO).

The Economic Survey 2022-23 projected a baseline GDP growth of 6.5% in real terms for the next fiscal.

Mr. Varma , currently a professor at the Indian Institute of Management, Ahmedabad said he sees global inflationary pressures dissipating in the months ahead as the supply shocks from the pandemic and from the Ukraine war gradually resolve themselves.

"The world is learning to live with the war," he said, adding that. at the same time monetary tightening is putting growth at risk across the world.

Replying to a question on high inflation, Mr. Varma said 2022-23 is a year of high inflation due to various supply shocks as well as the delay in monetary tightening during the second half of 2022-23.

"However, I expect inflation to come down significantly in 2023-24. I anticipate a gradual glide path that brings inflation down close to the target," he said.

The RBI lowered the consumer price inflation (CPI) forecast to 6.5% for the current fiscal from 6.7%. India's retail inflation in January was 6.52%.

To a question on the Reserve Bank hiking the short-term lending rate, Mr. Varma opined that the balance of risks has shifted towards growth rather than inflation, and in this context, a pause is more appropriate.

While observing that rates are high enough for the MPC to wait and see how the situation evolves, he said, "In the unlikely event of inflation remaining stubbornly high, further rate hikes could be considered at that point of time." The Reserve Bank which has been hiking the short-term lending rate since May last year has cumulatively raised the repo rate by 250 basis points. The repo rate now stands at 6.5%.

Asked what would be the likely impact of hot weather on wheat crop and food inflation, Mr. Varma said he hopes that weather anomalies will prove transient and India have a normal monsoon.
Riaz Haq said…
#India #G20Summit : Diplomatic test for #Modi & #Jaishankar as #Ukraine war dominates talks. Any broader agreements that India hopes for will largely depend on one key factor: the war in Ukraine. #Russia #Putin #Biden #UkraineRussiaWar️ #G20India

India's own position has come in for scrutiny and reproach too. It has refrained from directly criticising Russia, with which it has long-standing ties, while increasing imports of Russian oil. Delhi's non-aligned approach initially did not please Western powers but an understanding seems to have evolved.

India may not have criticised Russia directly but it has talked about the importance of "the UN Charter, international law, and respect for the sovereignty and territorial integrity of states" in its past statements on Ukraine.

Prime Minister Narendra Modi's statement on the sidelines of the Shanghai Cooperation Organization summit last autumn was viewed as indirect criticism of Russia. "Today's era is not of war," Mr Modi told the meeting in Uzbekistan in the presence of President Putin.


India has been positioning itself as a leading voice of developing countries known as the Global South in recent years.

Now, as president of the G20, Delhi could not have a bigger stage on which to deliver.

The world's 19 wealthiest nations plus the European Union account for 85% of global economic output and two-thirds of its population.

But as its foreign ministers meet in Delhi, any broader agreements that India hopes to deliver will largely depend on one key factor: the war in Ukraine.

When G20 leaders gathered last autumn in Bali, under Indonesia's presidency, Russian missiles hit key Ukrainian infrastructure targets as world leaders sat down for dinner. The joint communique clearly showed differences, with India, China and Russia reportedly not agreeing to unequivocal criticism of the invasion.

Not much has changed since then: the war has continued with no sign of peace talks, the world remains as divided, if not more so, and many big economies are still in turmoil.

Riaz Haq said…
In an interview to journalist Karan Thapar for The Wire news portal, Tharoor said: “India undermined its own leadership of the G20 in order to placate the Russians. And, indeed, the Russians issued a statement thanking India for its ‘constructive role’ in not using the word ‘war’. Now, this is getting absurd.”

Further, he said, India could have told the Russians that “we will ensure that there is no condemnation of you, we will ensure there’s no sanctions proposed, we will not have you named in person”. But to say there’s a war in Ukraine and it ought to end is bromide; it’s motherhood and apple pie. For god’s sake, don’t stand in the way. Why we failed to do that is to my mind an absolute setback for the kind of Indian diplomacy I’ve been used to seeing....”


Former minister of state for external affairs and Congress MP Shashi Tharoor on Monday said India undermined its own leadership of the G20 by not managing to get finance ministers of the member countries to agree on a communique in Banglaore last weekend.

In an interview to journalist Karan Thapar for The Wire news portal, Tharoor said: “India undermined its own leadership of the G20 in order to placate the Russians. And, indeed, the Russians issued a statement thanking India for its ‘constructive role’ in not using the word ‘war’. Now, this is getting absurd.”

The news agency PTI had reported from Bangalore on Friday that “host India wants the geopolitical tension to be referred to as a ‘crisis’ or a ‘challenge’ while the US and other western nations want nothing short of ‘war’ to go in the communique” that was to be issued on Saturday evening.

“This is really something which India ought to be embarrassed about,” Tharoor said in the interview, contending that the Indian team should have explained to the Russians that they had to give in on the word “war” to bring about a consensus so that everyone could have a statement to sign on as was the case in Bali last year at the G20 summit.

“This was an example where India’s nerve failed.... Not having an agreed communiqué is a bigger failure for a chairman than having a communiqué with a word that displeases a friend.”

No communique could be issued after the first meeting of G20 finance ministers as Russia and China were opposed to the inclusion of paragraphs condemning the Russian aggression on Ukraine. Instead, a “Chair’s Summary and Outcome Document” was issued in which the Bali communique’s paragraphs on the Russia-Ukraine war were included with a note that Russia and China opposed their inclusion.

According to Tharoor, India could have told the Russians that as the Chair, New Delhi has to be attentive to the wishes of the majority of delegates who want to say that the war should end.

Riaz Haq said…
Other countries’ view of India is influenced by calculations and hopes that it can help counter Chinese expansionism in Asia

Written by Christophe Jaffrelot , Pratinav Anil

Today, the international media echo indices of democracy and freedom of expression prepared by institutions like Varieties of Democracy, Freedom House, and Reporters without Borders which are often comparing the evolution of India’s regime to the Emergency.

Researching our book on the Emergency, India’s First Dictatorship (HarperCollins, 2021), we found that the change in regime did not change the way Western democracies perceived New Delhi. Trade was one reason why they looked the other way. India bought Jaguar fighters from the UK, and the two countries set up the Indo-British Economic Committee in January 1976; the trade talks that took place in London in April were well attended, and not only by arms dealers. British support for the Indian government, moreover, was bipartisan, from Labour Left to Tory Right, as Rudra Chaudhuri shows in “Re-reading the Indian Emergency”. Michael Foot suggested that it was a “monstrous lie” that Mrs Gandhi “wanted to be a dictator”. Margaret Thatcher believed the Emergency served the Indians well in “tackling problems like world recession and inflation”. The FCO concurred: “An authoritarian regime is better equipped than a democracy to force through the reforms which are needed to make India less of a burden on the world.” Following this logic, in 1976, the Overseas Development Ministry increased aid to India by over 30 per cent.
Riaz Haq said…
What Limits Any U.S. Alliance With India Over China

Though sharing concerns about Beijing’s growing aggression, New Delhi has always been wary of aligning too closely with Washington.

By Michael Schuman

The front lines of the widening confrontation between the United States and China stretch from the halls of the United Nations to the island nations of the South Pacific. Yet, as in any great geopolitical game, certain countries carry more significance than others for American interests—foremost among them India.

As Asia’s other emerging power, India could act as a crucial counterweight to Chinese influence, both in the region and outside it. That’s why Washington has been courting New Delhi with gusto. President Joe Biden has grand plans to cement the U.S. position in the Indo-Pacific, which encompasses South Asia, East Asia, and the western Pacific, through a range of diplomatic, economic, and security initiatives. India could play a determining part in their success or failure.

Whether India can be counted on to support the U.S. is an open question. Historically, relations between the two countries have been marred by deep distrust and sharp differences.

That legacy weighs on the relationship to this day, but more important is the mercurial nature of Indian foreign policy, which has been a hallmark of the nation’s sense of its place in the world since its formation in 1947. One moment, India’s leaders appear aligned with Washington; the next, they march off in their own direction, sometimes to parley with America’s enemies.

Riaz Haq said…
#India’s #Economy Looks Shaky Under the Hood.
The key driver of India’s economy—#domestic consumer #demand—is weakening after a brief post-#pandemic spurt . #Modi #G20Summit

India’s economy is losing steam in the one place that has been the South Asian nation’s strongest bulwark against a possible global recession: robust domestic demand.

India’s economy slowed further in the December quarter, figures released this week showed, as postpandemic pent up demand ebbed and the country’s manufacturing sector continued to weaken. Asia’s third largest economy recorded year-over-year growth of 4.4% last quarter, down from 6.3% in the September quarter.

Weakness in private consumption stood out the most. India’s private consumer spending, which comprises about 60% of India’s gross domestic product, rose just 2.1% year over year, compared with an 8.8% increase in the September quarter. It was mainly hurt by higher interest rates and elevated inflation. Slower growth in rural spending after some pandemic-era subsidies were cut could have also played a role.

Higher borrowing costs will probably continue to pinch pocketbooks, especially in urban areas, as the Reserve Bank of India remains laser-focused on reining in stubborn inflation. It has raised benchmark interest rates by 2.5 percentage points since May last year and will probably hike by another 0.25 point to 6.75% in April, squeezing household budgets further. Despite an aggressive rate-raising cycle, retail inflation jumped to a three-month high of 6.52% in January.

A closer look at other numbers in the GDP data also paints a worrisome picture. Import growth fell more sharply than export growth, again signaling weak domestic demand. And while fixed investment growth was a relative bright spot, it still slowed for the second quarter in a row.

Fizzling momentum at a time of high global economic uncertainty and tightening global financial conditions also spells trouble for the country’s monetary policy stance. A weak external environment wasn’t entirely unexpected, but the emerging evidence of rapidly slowing domestic demand makes the central bank’s job much harder. A heat wave or subpar monsoon could make things even more difficult by hitting agricultural output, and boosting food price inflation.

Nomura economists Sonal Varma and Aurodeep Nandi think markets are still significantly underappreciating the risks to India’s growth. They say the country’s growth cycle has peaked, and a combination of weaker global growth and tight domestic and global financial conditions could spell further trouble for exports, investment and discretionary consumption.

The International Monetary Fund still projects India will be the fastest-growing major economy in 2023—largely on the back of resilient domestic demand. The Indian government forecasts that India will grow 7% in the year ending in March 2023, and another 6.5% the following year.

Those numbers may turn out to be optimistic if private consumption doesn’t pick up the pace again soon.

Riaz Haq said…
India Derailed: A Falling Investment Rate and Deindustrialisation

Falling investment rates and declining manufacturing growth rates have marked the Indian GDP growth reversal since the mid-2010s. These structural defects have not yet been addressed. The current optimism can be realised only with a public investment push that would crowd in private investment.

The current financial year of 2022–23 has witnessed a sharp recovery of the Indian economy in spite of being buffeted by supply disruptions caused by the Russia-Ukraine war and a consequent rise in commodity prices. In 2022–23, according to the first advance estimates, the economy is expected to expand by 7% over the last year.

Policymakers claim success in having met the challenges of global health and economic shocks because India has reportedly emerged as one of the fastest growing countries in recent quarters. There is therefore considerable optimism that India is now on the cusp of an economic upswing.

Contrary to many apprehensions, output recovery from the pandemic has been sharp and V-shaped. India’s real gross domestic output (GDP, net of inflation) grew at 1.5% in 2021-22 over the pre-pandemic year (2019–20) (Figure 1). According to World Health Organization (WHO) estimates, Covid-19-related deaths were said to be high in India – much higher than the officially reported figures – but they were modest relative to the country’s population.

How did India manage to restrict the negative economic fallout of the pandemic? Reportedly, public expenditure on both consumption and investment as a proportion of GDP were higher during the pandemic years compared with 2019–20 (Economic Survey, 2022-23). An increase in public consumption expenditure partly made up for the decline in private expenditure. The rise in public investment was mostly on road construction – a labour-intensive activity that created much-needed unskilled employment.

Public consumption was raised largely by expanding the distribution of free foodgrains to the poor under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY). Data show that the offtake (under all schemes) from the Public Distribution System (PDS) peaked at 109.3 million tonnes in April 2020, was 90.8 million tonnes in August 2021, and 67.8 million tonnes in November 2022. Boosting expenditure on the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), a national, legally mandated, food-for-work programme, to meet its growing demand during the pandemic helped mitigate the fall in private employment (Figure 2). It would perhaps be fair to say that these public expenditures during the pandemic helped the economy cushion the crisis of hunger.

India’s recovery looks better compared to China’s self-inflicted wound of the Zero-Covid policy and repeated lockdowns that have caused enormous human suffering and output disruptions.

Be that as it may, India’s claim of a return to 'normalcy needs to be seen against the decade-long derailment of the economy in the 2010s compared to the growth acceleration witnessed after the 1980s. This essay addresses the setback to growth, investment, and consequent deindustrialisation.

Growth During the 2010s
In 2022 India will be the world’s fifth largest economy with a GDP of $3.2 trillion in current dollars, according to International Monetary Fund (IMF) estimates. In July 2019, Prime Minister Narendra Modi set an ambitious growth target of a $5 trillion economy by 2024, up from a $1.9-trillion economy in 2019. That target looks unachievable by 2024. With a per capita income of $2,191 in 2021, India ranked 144th amongst 194 IMF member countries.
Riaz Haq said…
India Derailed: A Falling Investment Rate and Deindustrialisation

Over the long term, India was amongst the countries that witnessed a steady growth in output between 1960 and 1992. India’s annual average GDP growth rate increased from about 3.5% between the 1950s and 1970s to 5.5% per cent during the 1980s and 1990s. According to a well-known classification of global growth patterns, India was one of the very few “growth accelerators” in the 20th century (Hausmann et al. 2005). Growth further increased to more than 7% per year in the 2000s coinciding with a global boom in trade, output, and capital flows. I had termed this “India’s Dream Run” (Nagaraj 2013) and it lasted till the global financial crisis in 2008.

Never in the past seven decades has India witnessed such an economic reversal, and the gravity of the problem is perhaps yet to sink into the minds of policymakers and the public.
However, India went off the rails in the 2010s as the growth momentum petered out and it staggered into the “mountain” category, according to Prichett’s description of patterns of development (Pritchett 2000). Annual GDP growth rate slowed to 3.5–4% by 2019–20 from 7–8% until 2010–11 If the critics of the current series of GDP estimates are right, the annual growth rate during much of the 2010s decade would be still lower at 4–5% (Figure 3) (Subramanian 2019; Morris 2019).

Expectedly, the deterioration in growth took a toll on related economic aggregates. Well-documented evidence shows a fall in employment levels (with adverse changes in its composition), a rise in the rate of absolute poverty in rural India, and deterioration in the rate of malnutrition (Nagaraj 2020; Kapoor 2020; Subramanian 2019). Never in the past seven decades has India witnessed such an economic reversal.

The gravity of the problem is perhaps yet to be fully appreciated by policymakers.

A notable manifestation of the decade of declining growth rates is premature deindustrialisation which is defined as a sustained decline in the share of output and employment in the manufacturing sector before attaining industrial maturity as the developed nations did. On premature deindustrialisation, Dani Rodrik writes:

In most of these countries, manufacturing began to shrink (or is on course for shrinking) at levels of income that are a fraction of those at which the advanced economies started to deindustrialise. These developing countries are turning into service economies without having gone through a proper experience of industrialisation (Rodrik, 2015).
India’s manufacturing sector output growth rate had fallen to a negative 0.4% in 2019–20 from 13.1% per year in 2015–16 (Figure 4 (i)). (All growth rates are at constant prices, unless otherwise specified. ) The deceleration in the growth rate needs to be seen against the stagnant share of manufacturing in GDP for three decades since 1991 (Figure 4 (ii)).

The manufacturing sector’s share in employment fell to 11.3% in 2019–20 from 12.5% in 2011–12, with a corresponding rise in agriculture’s share in the second half of the 2010s (Figure 5). This indicated a reversal of the structural transformation of the labour force (that is, workers moving to lower-productive sectors from higher-productive sectors, including to construction in the informal sector). There was a further decline in 2020–21. However, we ignore this because the pandemic contributed to the decline in 2020-21. It is perhaps worth remembering that structural transformation of the labour force is a defining characteristic of Kuznetsian modern economic growth.

Riaz Haq said…

Ritesh Kumar Singh
Most of incentives and #tax breaks funded by the Indian taxpayers are being used to buy Chinese materials and parts to assemble in #India, be it #Electronics #EVs or #SOLAR power #equipment
#PLI #exports #imports #GreenEnergy
Riaz Haq said…
Ex Central Bank Chief Raghu Rajan: 'India dangerously close to Hindu rate of growth'. #Hindu rate of growth is a term describing low #Indian economic growth rates from the 1950s to the 1980s, which averaged around 4%. #Modi #BJP #economy #Hindutva

Sounding a note of caution, former Reserve Bank Governor Raghuram Rajan has said that India is "dangerously close" to the Hindu rate of growth in view of subdued private sector investment, high interest rates and slowing global growth.

Rajan said that sequential slowdown in the quarterly growth, as revealed by the latest estimate of national income released by the National Statistical Office (NSO) last month, was worrying. Hindu rate of growth is a term describing low Indian economic growth rates from the 1950s to the 1980s, which averaged around 4 per cent. The term was coined by Raj Krishna, an Indian economist, in 1978 to describe the slow growth.

The Gross Domestic Product (GDP) in the third quarter (October-December) of the current fiscal slowed to 4.4 per cent from 6.3 per cent in the second quarter (July-September) and 13.2 per cent in the first quarter (April-June).

The growth in the third quarter of the previous financial year was 5.2 per cent. "Of course, the optimists will point to the upward revisions in past GDP numbers, but I am worried about the sequential slowdown. With the private sector unwilling to invest, the RBI still hiking rates, and global growth likely to slow later in the year, I am not sure where we find additional growth momentum," Rajan said in an email interview to PTI.

Recently, Chief Economic Advisor V Anantha Nageswaran had attributed the subdued quarterly growth to the upward revision of estimates of national income for the past years. The key question is what Indian growth will be in fiscal 2023-24, Rajan said, adding "I am worried that earlier we would be lucky if we hit 5 per cent growth. The latest October-December Indian GDP numbers (4.4 per cent on year ago and 1 per cent relative to the previous quarter) suggest slowing growth from the heady numbers in the first half of the year. "My fears were not misplaced. The RBI projects an even lower 4.2 per cent for the last quarter of this fiscal. At this point, the average annual growth of the October-December quarter relative to the to the similar pre-pandemic quarter 3 years ago is 3.7 per cent. "This is dangerously close to our old Hindu rate of growth! We must do better." The government, he said, was doing its bit on infrastructure investment but its manufacturing thrust is yet to pay dividends. The bright spot is services, he said, adding "it seems less central to government efforts." On a query regarding the production-linked incentive (PLI) scheme, Rajan said any scheme in which the government pours money will create jobs and any scheme which elevates tariffs on output while offering bonuses for final units produced in India will create production in India, and exports. "A sensible evaluation would ask how many jobs are being created and at what price per job. By the government's own statistics, 15 per cent of the proposed investment has come in but only 3 per cent of the predicted jobs have been created. This does not sound like success, at least not yet," Rajan said.

Furthermore, even if the scheme fully meets the government's expectations over the next few years, it will create only 0.6 crore jobs, a small dent in the jobs India needs over the same period, the former RBI Governor said. "Similarly, government spokespersons point to the rise in cell phone exports as evidence that the scheme is working. But if we are subsidising every cell phone that is exported, this is an obvious outcome.
Riaz Haq said…
Ex Central Bank Chief Raghu Rajan: 'India dangerously close to Hindu rate of growth'. #Hindu rate of growth is a term describing low #Indian economic growth rates from the 1950s to the 1980s, which averaged around 4%. #Modi #BJP #economy #Hindutva

Furthermore, even if the scheme fully meets the government's expectations over the next few years, it will create only 0.6 crore jobs, a small dent in the jobs India needs over the same period, the former RBI Governor said. "Similarly, government spokespersons point to the rise in cell phone exports as evidence that the scheme is working. But if we are subsidising every cell phone that is exported, this is an obvious outcome.

The key question is how much value added is done in India. It turns (out to be) very little so far," he said. Rajan said cell phone parts imports have also gone up, so net exports in the cell phone sector, the relevant measure that no one in government talks about, is pretty much where it was when the scheme started. "Except, we have also spent money on subsidies. Foxconn just announced a big factory to produce parts but they have been saying they will invest for a long time. I think we need a lot more evidence before celebrating the success of the PLI scheme," he said.

Currently, Rajan is the Katherine Dusak Miller Distinguished Service Professor of Finance at The University of Chicago Booth School of Business. He further said the most developed economies of the world are largely service economies, so you can be a large economy without a large presence in manufacturing.

"Services do not just account for the majority of our unicorns, services can also provide a lot of semi-skilled jobs in construction, transport, tourism, retail, and hospitality. So let us not deride service jobs – indeed while the fraction of manufacturing jobs has stagnated in India, services have absorbed the exodus from agriculture." "We need to work on both manufacturing and services to create the jobs we need, and fortunately, many of the inputs both (services and manufacturing) need schooling, skilling...," he said.

On what measures the government should take to improve oversight of private family companies to address worries after the Hindenburg allegations on Adani Group, Rajan said: "I don't think the issue is of more oversight over private companies". The issue is of reducing non-transparent links between government and business, and of letting, indeed encouraging, regulators do their job, he said. "Why has SEBI not yet got to the bottom of the ownership of those Mauritius funds which have been holding and trading Adani stock? Does it need help from the investigative agencies?," Rajan wondered.

Adani group has been under severe pressure since the US short-seller Hindenburg Research on January 24, accused it of accounting fraud and stock manipulation, allegations that the conglomerate has denied as "malicious", "baseless" and a "calculated attack on India".

Riaz Haq said…
India's oil deals with Russia dent decades-old dollar dominance | Reuters

India in the last year displaced Europe as Russia's top customer for seaborne oil, snapping up cheap barrels and increasing imports of Russian crude 16-fold compared to before the war, according to the Paris-based International Energy Agency. Russian crude accounted for about a third of its total imports.

NEW DELHI/LONDON, March 8 (Reuters) - U.S.-led international sanctions on Russia have begun to erode the dollar's decades-old dominance of international oil trade as most deals with India - Russia's top outlet for seaborne crude - have been settled in other currencies.

The dollar's pre-eminence has periodically been called into question and yet it has continued because of the overwhelming advantages of using the most widely-accepted currency for business.

India's oil trade, in response to the turmoil of sanctions and the Ukraine war, provides the strongest evidence so far of a shift into other currencies that could prove lasting.

The country is the world's number three importer of oil and Russia became its leading supplier after Europe shunned Moscow's supplies following its invasion of Ukraine begun in February last year.


Some Dubai-based traders, and Russian energy companies Gazprom and Rosneft are seeking non-dollar payments for certain niche grades of Russian oil that have in recent weeks been sold above the $60 a barrel price cap, three sources with direct knowledge said.

The sources asked not to be named because of the sensitivity of the issue.

Those sales represent a small share of Russia's total sales to India and do not appear to violate the sanctions, which U.S. officials and analysts predicted could be skirted by non-Western services, such as Russian shipping and insurance.

Three Indian banks backed some of the transactions, as Moscow seeks to de-dollarise its economy and traders to avoid sanctions, the trade sources, as well as former Russian and U.S. economic officials, told Reuters.

But continued payment in dirhams for Russian oil could become harder after the United States and Britain last month added Moscow and Abu Dhabi-based Russian bank MTS to the Russian financial institutions on the sanctions list.

MTS had facilitated some Indian oil non-dollar payments, the trade sources said. Neither MTS nor the U.S. Treasury immediately responded to a Reuters request for comment.

An Indian refining source said most Russian banks have faced sanctions since the war but Indian customers and Russian suppliers are determined to keep trading Russian oil.

"Russian suppliers will find some other banks for receiving payments," the source told Reuters.

"As it is, the government is not asking us to stop buying Russian oil, so we are hopeful that an alternative payment mechanism will be found in case the current system is blocked."

Riaz Haq said…
China is right about US containment | Financial Times

By Edward Luce

But encircling Beijing is not a viable long-term strategy

Here is a thought experiment. If Taiwan did not exist, would the US and China still be at loggerheads? My hunch is yes. Antagonism between top dogs and rising powers is part of the human story. The follow-up is whether such tensions would persist if China were a democracy rather than a one-party state. That is harder to say but it is not obvious that an elected Chinese government would feel any less resentful of the US-led global order. It is also hard to imagine the circumstances in which America would willingly share the limelight.

All of which suggests that loose talk of a US-China conflict is no longer far-fetched. Countries do not easily change their spots: China is the middle kingdom wanting redress for the age of western humiliation; America is the dangerous nation seeking monsters to destroy. Both are playing to type. The question is whether global stability can survive either of them insisting that they must succeed. The likeliest alternative to today’s US-China stand-off is not a kumbaya meeting-of-minds, but war. This week, Xi Jinping went further than before in naming America as the force behind the “containment”, “encirclement” and “suppression” of China. Though his rhetoric was provocative, it was not technically wrong. President Joe Biden is still officially committed to trying to co-operate with China. But Biden was as easily blown off course last month as a weather balloon. Washington’s panic over what is after all 19th-century technology prompted Antony Blinken, the US secretary of state, to cancel a Beijing trip that was to pave the way for a Biden-Xi summit. Washington groupthink drove Biden’s overreaction. The consensus is now so hawkish that it is liable to see any outreach to China as weakness. As the historian Max Boot points out, bipartisanship is not always a good thing.

Some of America’s worst blunders — the 1964 Gulf of Tonkin resolution that led to the Vietnam war, or the 2002 Iraq war resolution — were bipartisan. So is the new House committee on China, which its chair, Mike Gallagher, says will “contrast the Chinese Communist party’s techno-totalitarian state with the Free World”. It is probably safe to say he will not be on the hunt for contradictory evidence.

A big difference between today’s cold war and the original one is that China is not exporting revolution. From Cuba to Angola and Korea to Ethiopia, the Soviet Union underwrote leftwing insurgencies worldwide.

The original idea of containment, laid out in George Kennan’s 1947 Foreign Affairs essay, The Sources of Soviet Conduct, was more modest than the undeclared containment that is now US policy. Kennan’s advice was twofold: to stop the expansion of the Soviet empire; and to shore up western democracy. He counselled against the use of force. With patience and skill the USSR would fold, which is what eventually happened.

Today’s approach is containment-plus. When Xi talks of “suppression”, he means America’s ban on advanced semiconductor exports to China. Since high-end chips are used for both civil and military purposes, the US has grounds for denying China the means to upgrade its military. But the collateral effect is to limit China’s economic development.

There is no easy way round this. One possible side-effect will be to accelerate Xi’s drive for “made in China” technology. The Chinese president has also explicitly declared Beijing’s goal of dominating artificial intelligence by 2030, which is another way of saying that China wants to set the rules.
Riaz Haq said…
US strengthens tech ties with India but doesn’t seek decoupling from China, Raimondo says

The U.S. government is not seeking to “decouple” from China, nor is it seeking “technological decoupling,” but Washington “would like to see India achieve its aspirations to play a larger role in the electronics supply chain,” U.S. Commerce Secretary Gina Raimondo said on Friday.


But even as India and the U.S. tighten their tech ties, Washington is not looking to cut reliance on China, she insisted. “We see India as a trusted technology partner and we want to continue to deepen our technological relationship with India. But I also want to make it clear that the United States doesn’t seek to decouple from China.”

“What we seek to do is ensure that certain technologies where the United States is ahead and where China’s explicit strategy is to have these technologies and deploy them in Chinese military apparatus, those are technologies that we have used export control to ban the sale to China. So we enjoy trade with China. The vast majority of trade with China is in benign products and that will and should continue.”

The closer ties with India isn’t about decoupling, but it’s about keeping “eyes wide open to the fact that China is explicitly trying to get access to American technologies for use in its military and we need to protect ourselves and our allies and partners,” she added.

The partnership comes as India is aggressively offering $10 billion in incentives to win manufacturing projects from international chip firms. New Delhi has been able to attract a number of firms to expand their presence in India, but many industry leaders including Intel and TSMC have yet to make a broader play.

On its part, the U.S. signed a memorandum of understanding with India on Friday to cooperate in the semiconductor sector.

The semiconductor industries in both the nations are beginning to assess the resiliency and gaps in the supply chain network, said Raimondo, whose department is overseeing pouring of about $52 billion into the U.S. semiconductor industry.

“You don’t have to believe me when I say that this is a consequential relationship and the U.S. government is excited to lean into this relationship with the government of India… the fact that ten leading CEOs from the U.S. came here and have pledged to do more business in India… I think that’s a testament,” she told reporters at a press conference in New Delhi.

India, the world’s second most populous nation, holds key importance in the ever-shifting geopolitical relationships among many powerful nations. The U.S.’s increasing alliance with India, with whom it also maintains a strategic dialogue through a Quad group with Japan and Australia, is emblematic of the growing concerns from American policymakers to cut reliance on China.
Riaz Haq said…
Opinion Washington has succumbed to dangerous groupthink on China

By Fareed Zakaria

We are often told that the United States is deeply divided, that polarization makes it impossible to make any progress in policy, and that our country is so internally conflicted that it cannot project unity and strength to the world. But on the most important foreign policy issue confronting policymakers, the problem is closer to the opposite. Washington has embraced a wide-ranging consensus on China that has turned into a classic example of groupthink.

To watch Tuesday’s hearing of the new House select committee on China was to be transported back to the 1950s. Members of both parties tried to outdo one another in their denunciations of China, describing — as committee chairman Mike Gallagher (R-Wis.) did — the Communist Party as an “existential” threat to the United States, and blaming it directly for every problem in America, from drug use to covid-19 to unemployment. (An odd charge since unemployment is currently at its lowest in more than 50 years.)

One could dismiss some of this more extreme rhetoric as the usual congressional grandstanding, but it creates a dynamic that makes rational policy difficult. Consider what happened a few weeks ago. The president of the United States, in what can only be described as a panic, ordered the U.S. military to shoot down three balloons that were probably private weather balloons — similar to hundreds of such objects in the sky around the world — that posed no threat to anyone. The sorts of balloons used by hobbyists and meteorological clubs can cost as little as $12. The missiles used to shoot down the recent offending objects cost more than $400,000 each. The shootdowns were ordered, of course, so that no one could claim Joe Biden was soft on China.

China is a serious strategic competitor, the most significant great-power challenger the United States has faced in many decades. That is all the more reason for Washington to shape a rational and considered foreign policy toward it — rather than one forged out of paranoia, hysteria and, above all, fears of being branded as soft. Whenever policy is made in those latter circumstances, as in the cases of Vietnam or Iraq, it turns out badly. In 2003, when then-Senate Minority Leader Tom Daschle (D-S.D.) tried to make the case for more diplomacy before war with Iraq, then-Speaker Dennis Hastert (R-Ill.) suggested Daschle was giving comfort to the enemy. The select committee on China spoke of those who dared to suggest improving relations with Beijing in similar terms.

Six years ago, before Donald Trump came into power, one would have described the U.S.-China relationship as difficult, perhaps even strained — and yet manageable, with regular dialogue between the two nations at the highest levels. When Washington confronted China on certain issues, such as currency manipulation and economic espionage, Beijing would make some effort to address the charges.

Today, U.S.-China relations are a mess. China continues to do things that alarm Washington but there is no discussion between the two sides. Beijing is actively supporting Russia economically and diplomatically in its war in Ukraine. Were that support to expand to include military assistance, Russia would gain an almost unlimited supply of armaments, transforming the war. Then-Speaker Nancy Pelosi’s August visit to Taiwan gave the People’s Liberation Army a golden opportunity to practice a multi-day blockade of the island, their most likely military intervention in the event of a crisis. Were current Speaker Kevin McCarthy (R-Calif.) to visit Taiwan, the PLA would likely use it as a pretext to practice a longer and more complete cutoff strategy, showing Taiwan that it could be isolated at will.

Riaz Haq said…
China's trade with Russia surges at double-digit pace in Jan-Feb | Reuters

BEIJING, March 7 (Reuters) - China's exports and imports with Russia surged at a double-digit pace in January-February from a year earlier, customs data showed on Tuesday, as China said it had to advance relations with its northern neighbour in an increasingly turbulent world.

China's exports to Russia jumped 19.8% in the first two months, to a total of $15 billion, while it recorded shrinking demand from markets elsewhere. Imports from Russia soared by 31.3% to $18.65 billion.

That left the world's second-biggest economy's trade deficit with Russia at about $3.6 billion.

China's seaborne imports of Russian oil are set to hit a record this month after refiners took advantage of cheap prices as domestic fuel demand rebounded following the lifting of COVID-19 curbs, Reuters reported last week.

Foreign Minister Qin Gang told a news conference on the sidelines of an annual parliamentary session in Beijing on Tuesday that China had to advance its relations with Russia as the world becomes more turbulent.

Asked whether it was possible that China and Russia would abandon the U.S. dollar and euro for bilateral trade, Qin said that countries should use whatever currency was efficient, safe and credible.

"Currencies should not be the trump card for unilateral sanctions, still less a disguise for bullying or coercion," he said.

China's trade with Russia hit a record high in 2022 as Western countries imposed sanctions on Russia over its invasion of Ukraine.

Riaz Haq said…
Who are India’s friends & foes? Modi govt is caught in a messy US-China-Russia-Pakistan jalebi

Think China-Russia-America-China-Pakistan to begin with. There’s plenty of evidence in the public domain that Russia cannot last more than a few weeks in its war with the West (via Ukraine) without China’s help. The latest trade data available from the Chinese customs department shows that business between the two has boomed in a year when China’s economy has slowed down and overall trade declined.

Much of the growth is contributed by Russian exports. There’s a popular view — particularly in self-congratulatory India — that it is our purchase of Russian oil that’s driving their economy and war effort. The Chinese contribution to the Russian economy is several times greater. No surprise.

Plus, the prospect of at least the supply of softer military merchandise is always a near-term possibility. India’s oldest ally, therefore, is truly dependent economically, politically and — ultimately — militarily only on one country, our most formidable long-term adversary, with nearly 60,000 troops sitting battle-ready threatening us. That takes care of the first part of our jumbled equation: Your adversary being the closest friend of a friend.

Let’s cut to the next bit. This adversary (China) is best friends with the worst enemy (Russia) of a country you now call an essential strategic ally. We pick that description from the many joint statements issued by Indian prime ministers and American presidents. Further on, the same adversary is also the patron, friend and master, lender of first resort and security guarantor of your most immediate irritant, Pakistan.

If it is challenging to simplify this, it also underlines the complexities of the world we inhabit. Our military dependence on Russia is deep, and will likely remain so for at least five more years. Nobody can replace 95 per cent of the tanks, 70 per cent of the combat aircraft, the flagship and a majority of the flying assets of the Navy overnight.


Which brings us back to our jumbled, ‘jalebi’ formulation of India’s strategic universe: Russia, an inalienable friend dependent on China, and Pakistan, a permanent adversary that has no other source of strength — or money. And the US, an essential strategic ally.

Pakistan’s desperation is of a different order. The Gulf Arabs are wary of it and it is alienated from the West, though the British are working hard behind the scenes for some sort of rehabilitation in Washington.

If Pakistan is selling critical tank and rocket ammunition to Ukraine, it isn’t a purely autonomous act, whatever its need for dollars or wheat in barter. This is an application for forgiveness to the US for past crimes.

It is this complex strategic world that India is navigating. Behind the talk of the Global South, equidistance, strategic autonomy, however, the business end of the strategic stuff is going on fine. A NATO team met its Indian counterparts to explore more cooperation in the Indo-Pacific even as conflicted interests reigned at the G-20.

The latest Quad statement had a paragraph on Ukraine categorically asking Russia (without naming it) to vacate its aggression with respect to Ukraine’s sovereignty, territorial integrity and the rules-based international order. It also said the ‘threat of use of nuclear weapons is inadmissible’.

Meanwhile, US Secretary of Commerce Gina Raimondo arrived in Delhi, and not only to play Holi at Defence Minister Rajnath Singh’s home. On the agenda is a partnership on semiconductors. This follows the progress made earlier on high-tech areas during National Security Advisor Ajit Doval’s Washington visit.

Riaz Haq said…
#Pakistan to procure #Russian #oil at deep discount ($50 a barrel). Pak to pay #Russia in currencies of friendly countries, including #China, #SaudiArabia & #UAE. First shipment from #Moscow is scheduled to arrive in Pakistan by the end of next month

Cash-strapped Pakistan is making concerted efforts to procure Russian crude oil at USD 50 per barrel, at least USD 10 per barrel less than the price cap imposed by the G7 countries due to Moscow's invasion of Ukraine, media reports said on Sunday. Crude oil is currently being sold globally at USD 82.78 per barrel.

Pakistan, which is currently grappling with high external debt and a weak local currency, is desperate to purchase cheap crude at discounted rates from Russia.

Moscow will respond to Pakistan's request for discounted crude oil only after it completes formalities such as mode of payment, shipping cost with premium and insurance, according to The News.

The first consignment of crude oil from Moscow is scheduled to arrive in Pakistan by the end of next month, paving the way for a bigger deal in the future, the paper said.

The shipping of crude oil from Russian ports will take 30 days, which would mean an increase of USD 10-15 per barrel due to the transportation costs, it added.

Russia was initially concerned "over the seriousness of Pakistan to mature the oil deal," but in a recent meeting between officials from the two countries, Moscow asked Islamabad to import "one oil cargo" as a test case to bridge the trust deficit, according to The Express Tribune newspaper.


Energy accounts for the biggest share of Pakistan's imports, and cheaper oil from Russia will help Pakistan in containing the ballooning trade deficit and balance-of-payments crisis.

As Pakistan continues to suffer from a severe shortage of foreign exchange reserves, any short or long-term deals with Russia to take crude and oil products at low prices would help reduce the nation's financial burden.

Pakistan's foreign exchange reserves, which fell to a critically low level of USD 2.9 billion a few weeks ago, have now risen closer to USD 4 billion, even as the country eagerly waits for the USD 1.1 billion tranches of funding from the International Monetary Fund, according to the State Bank of Pakistan estimates.

The reserves at the start of the fiscal year on July 1, 2022 were around USD 10.309 billion, registering a drop of USD 7 billion in just seven months.

The cataclysmic floods last year inundated a third of the country, displaced more than 33 million and caused economic damages to the tune of USD 12.5 billion to Pakistan's already teetering economy.

Riaz Haq said…
Is India ready to take China’s place in the global economy? That’s just wishful thinking

by Sameer Basha

Australia and other US allies looking for potential trade and investment partners to reduce their reliance on China are knocking on India’s door

But India’s modest economic size, challenging investment environment and substandard infrastructure are major deterrents to fruitful collaboration


India has been increasingly viewed as a natural ally to countries like Australia, which see it as an economic and military counterweight to China. They believe the best way for this to happen is through foreign direct investment into the country, to allow for a gradual transition of enterprises from China to India.
In its 2022 Investment Climate Statement on India, the US State Department called the country “a challenging place to do business” and highlighted its protectionist measures, increased tariffs and an inability to adjust from “Indian standards” to international standards.
The 2023 Index of Economic Freedom ranks India 131st in the world and 27th out of 39 economies in the Asia-Pacific region. The Indian government places equity limits on foreign capital in some sectors of the economy. In these sectors, according to the government’s circular of its FDI policy, beyond the cap imposed on foreign ownership, the entity must be “owned by/held with/in the hands of resident Indian citizens and Indian companies, owned and controlled by resident Indian citizens”.
In addition, ambiguities in the tax code have meant companies like Vodafone, Cairn Energy and GE Capital have found themselves in the cross hairs of tax authorities, putting into question India’s maturity as an FDI hub.
Such actions have seen India’s FDI inflows, as a share of the global total, fall from 3.4 per cent to 2.8 per cent between 2019 and 2021, whereas China’s share has have risen from 14.5 per cent to 20.3 per cent. In recent years, companies like Harley-Davidson and the Royal Bank of Scotland have either downsized or exited India, with German retailer Metro AG selling its operations after two decades in the country.
When one compares the relative size of their economies, China had a nominal gross domestic product of US$17.7 trillion in 2021, while India’s was US$3.2 trillion. India invests only 30 per cent of its GDP, compared with 50 per cent for China; and 20 per cent of its economy comes from manufacturing, as opposed to 30 per cent of China.
Investing in a domestic network of roads, airports, seaports and rail lines, as well as streamlining FDI regulations, allows China to move its products from factories to consumers efficiently, making it an attractive prospect for investment. That is not to mention the world-class infrastructure that has transformed the urban landscapes of both old and new cities within the country.
Despite India’s economic progress, poverty is still a defining feature in its sprawling metropolises. Former Reserve Bank of India governor Raghuram Rajan has also weighed in on the India-China competition, stating: “The argument that India will replace China is very premature as India is a much smaller economy as of now.”
Unfortunately, India is not currently in a place to deliver on the expectations placed on it by countries like Australia, which remain stuck in a geopolitical gambit with China. Simply banking on its large population is a fickle way of viewing the options amid a decoupling from China’s economy. India is still decades away from realising its true potential.
The two countries’ goals also differ. China is transforming itself into a technologically driven economy in order to exceed the potential of the US. In contrast, India is attempting to position itself as a market-driven economy utilising its large population as a manufacturing base to compete with China.
Riaz Haq said…
Is India ready to take China’s place in the global economy? That’s just wishful thinking

by Sameer Basha

Australia may be merely continuing along the tried and tested path of seeking “great and powerful friends”, as it has done in the past with the UK and America, to take care of it and help protect its interests. It may see in India a stable and uncomplicated trading partner compared to China.
However, thorough planning is required to meet the challenges and avoid the risks before conducting business in such an environment, which appears absent from current conversations. In 2021, India was Australia’s sixth-largest two-way goods and services trading partner, valued at A$34.4 billion (US$22.9 billion), and the fourth-largest goods and services export market, valued at A$19.3 billion, representing a 4.2 per cent market share of Australia’s total exports.

However, China is Australia’s largest two-way trading partner, at A$267 billion, representing 32.2 per cent of Australia’s total trade. Some A$178 billion of goods and services made it to Chinese ports in 2020-2021. Australia hopes to expand bilateral trade to A$100 billion with India.
Anyone in Canberra who sees India as a viable substitute for China is seriously out of touch, and will be putting the nation’s export industries in a precarious position with their wishful geopolitical decisions not based on the realities on the ground.
Sameed Basha is a defence and political analyst with a master’s degree in international relations from Deakin University, Australia


When faced with sanctions from Beijing, Canberra exhibited a resilient front. Still, internal anxieties about the impact on its economy led Prime Minister Anthony Albanese to visit India recently, a potential export market and replacement for Australia’s economic ties with China.
Comparing China to India is like comparing apples with oranges, with the only similarity being their billion-plus populations. The United States is encouraging its allies like Australia to bet big on India as the slow process of decoupling investments from China begins.

Riaz Haq said…
HomeIndia NewsIndia Says Situation With China "Fragile, Dangerous" In Himalayan Front
India Says Situation With China "Fragile, Dangerous" In Himalayan Front

"The situation to my mind still remains very fragile because there are places where our deployments are very close up and in military assessment therefore quite dangerous," S Jaishankar said.

The situation between India and China in the western Himalayan region of Ladakh is fragile and dangerous, with military forces deployed very close to each other in some parts, Foreign Minister S Jaishankar said on Saturday.
20 Indian soldiers died for the country and more than 40 Chinese soldiers were killed or injured.when the two sides clashed in the region in mid-2020, but the situation has been calmed through rounds of diplomatic and military talks.

Violence erupted in the eastern sector of the undemarcated border between the two nations in December but did not result in any deaths.

"The situation to my mind still remains very fragile because there are places where our deployments are very close up and in military assessment therefore quite dangerous," S Jaishankar said at an India Today conclave.

Riaz Haq said…
Is India's Rise Actually Good for the West?

India has also used the moment (G20 summit) to finger-point at Europe, rather than condemn Russian aggression. Last year, India’s foreign minister, Subrahmanyam Jaishankar, said, “Europe has to grow out of the mindset that Europe’s problems are the world’s problems.”

Jaishankar’s critique of Eurocentrism has merit. It’s also shared by many in the Global South, who bristle as the West has committed well over $100 billion in aid to Ukraine, but falls short in addressing challenges like climate change, the debt crisis, and food insecurity that are hurting poorer countries. Many of these problems have been exacerbated by the Russia-Ukraine war.

India has rightly put these issues on the G20 agenda this year. But it’s actually doing little more than paying lip service to them. The G20 finance ministers’ meeting last month concludedwithout any tangible commitments to debt-distressed countries like Sri Lanka.

In reality, India is using the G20 presidency and other global platforms to engage in sanctimonious posturing to gain space for the naked pursuit of its self-interest. It’s also leveraging them to project Prime Minister Narendra Modi’s image as a Hindu strongman at home.

India is no ally of the West or the Global South. It is a selective partner only out for itself. It seeks a multipolar world order in which the power of the West is diminished. Paradoxically, the U.S. and its allies are aiding India in reducing their global influence.

Policy elites in Washington and other Western capitals must come to terms with this reality. Naively, they see India’s rise as a world power as an indisputable good in countering China, so much that they ask for little in return. They give India the benefit of the doubt, even when it so brazenly pursues its interest at odds with their own.

If the behavior of India isn’t telling enough, its words are loud and clear. Jaishankar — India’s chief grand strategist — writes in his 2020 book that India should focus on “advancing national interests by identifying and exploiting opportunities created by global contradictions.” A top advisor to Modi, Jaishankar promotes a commitment-free foreign policy, arguing that India should leverage “competition to extract as much gains from as many ties as possible.” In other words, India is playing all sides against one another.

To its detriment, the West gives India easy wins without asking it to make real sacrifices or protect human rights. Its indulgence of India’s grandstanding and flaccid responses to taunting by Jaishankar and others also furthers Modi’s domestic Hindu nationalist agenda.

It allows Modi to not only project India as a “vishwa guru” or “world teacher,” but also furthers his own image as a mighty Hindu who is humbling the West and can act with impunity. Indeed, as civic and religious freedoms erode in India, Western governments balk at condemnation let alone punitive action.

The domestic symbolism of India’s global theatrics is lost on Western leaders. This is partly because the U.S. and other Western countries have failed to develop the institutional knowledge of the Hindutva (Hindu nationalist) ideology, lexicon, and networks. By contrast, there’s tremendous work on the Chinese Communist Party.

Case in point, when Australian Foreign Minister Penny Wong cited India as a “civilizational power” this month, she inadvertently endorsed the BJP’s idea of a Hindu civilization or a “Hindu Rashtra,” in which Muslims are debased and erased.

Sadly, Western officials allow themselves to imagine a world in which the Hindutva ideology does not exist. They continue to proclaim that they are bound with India by “shared values,” as German Chancellor Olaf Scholz did last month, ignoring India’s very blatant authoritarian, majoritarian turn.

There is much to worry about when it comes to India’s future course. But the West is simply choosing to look away.
Riaz Haq said…
Great Power Rivalry May Fan China Border Spat: India Army Chief

US-China tensions impact ties of the Asian neighbors
Quad grouping seen as a counter to China’s assertiveness

As ties between Washington and Beijing worsen, border tensions between India and China could spiral into a bigger conflict, the South Asian nation’s army chief warned.
Contested borders and boundary transgressions “remain a potential trigger for escalation,” General Manoj Pande said. Bilateral ties between the two nations “do stand influenced by the great power rivalry currently playing out between China and the US.”
Pande who was speaking at the Savitribai Phule University in the western Indian city of Pune on Monday is the first official to draw a link between the growing rivalry between the US and China and a potential deterioration of already tense ties between the Asian neighbours.

New Delhi and Washington, along with Japan and Australia are members of the so called Quad grouping seen as a counter to China’s growing assertiveness in the Indo-Pacific. Beijing has criticised the group as a “clique” that could stoke a new Cold War.

US and China ties have been sliding over Russia’s war in Ukraine. While the US is leading allies to isolate and punish Vladimir Putin, China has stood by Moscow. Chinese President Xi Jinping recently visited Russia where the two countries agreed on greater cooperation.

India and China share a 3,488km-long disputed Himalayan border. The two are locked in a border conflict – the worst in four decades – for the last two years with soldiers on both sides killed in one clash in June 2020. Both sides have mobilised thousands of troops, artillery guns and fighter aircraft.
The two sides have had 17 rounds of diplomatic and military talks to resolve the border crisis but have had incremental success.

Riaz Haq said…
Tranche of purported U.S. and allied military secrets leaked online in possible major intelligence breach

The U.S. Defense Department confirmed that some of the material was genuine but claimed it had been selectively edited.

One document labeled “TOP SECRET” allegedly originated from the CIA. It contains an assessment that Viktor Orban’s Hungary, a NATO and EU member—albeit one still close to Russia—now considers the U.S. to be one of its most significant geopolitical adversaries. Another assessment details the Russian Wagner mercenary group’s attempt to build contacts with the Haitian government. The spelling of the mercenary corps is “Vagner,” a common Russian phonetic spelling of the organization but one that is rarely used in material designated for public consumption. However, Yahoo News found previous examples of this transliteration being used in internal Defense Department maps, such those contained in an assessment of Wagner Group operations in Libya from July 24, 2020.

Another document details the proposed opening of a Russian-made weapons repair facility in the United Arab Emirates in coordination with Moscow. The UAE, an American ally in the Middle East, operates a significant amount of weaponry from Russia, most notably the Pantsir air defense system and the BMP-3 infantry fighting vehicle. It is unclear from this assessment whether refurbished military hardware would be for Russian use in Ukraine, a situation that would certainly tax Washington’s relationship with Abu Dhabi.

An alleged "CIA Intel Update" dated March 1 states that the leaders of Israel's Mossad intelligence service were egging on national protests against Prime Minister Benjamin Netanyahu's controversial judicial reforms.

One printout posted on Discord contains significant technical detail about the numbers and potential failures of a specific weapon system provided by the United States to Ukraine. The document is marked “SECRET/NOFORN,” — with “NOFORN” meaning “Not Releasable to Foreign Nationals.” That is an explicit classification used to indicate intelligence information that “may not be released in any form to foreign governments, foreign nationals, foreign organizations, or non-U.S. citizens,” according to the Defense Department.

Another text suggests that the United Kingdom is planning to deploy one of the Royal Navy’s new Queen Elizabeth-class aircraft carriers to the South Pacific to counter Chinese influence in the region. It also assesses the priorities of the U.K. opposition Labour Party and how Beijing would react to an incoming Labour government scrapping the South Pacific plan in order to focus resources closer to home. This is also designated for American eyes only.

Other material contained in the tranche is less sensitive, such as an assessment of efficiency of the government response to the outbreak of the Marburg virus in Equatorial Guinea or the progress of the Nigerian election.

The timing of the leaks, coming at a moment when the Ukrainian military is preparing to launch a much-anticipated offensive, and also the method of their dissemination raise many questions about how these documents were obtained and also about their veracity.

The Ukraine documents that were circulated by pro-Russian sources contained crudely photoshopped modifications to casualty figures to suggest that Ukrainian forces had suffered significantly more casualties, and Russian forces significantly fewer casualties, than had actually been assessed by American intelligence. Whoever doctored them put the estimated killed-in-action figure for Ukraine, 16,000-17,500 — in the Russian field, which originally gave 35,500–43,500 killed in action. It also transposed the digits for the Ukrainian assessment, changing 16,000-17,500 to "61,000-71,500."
Riaz Haq said…
Why India, China's Bitter Foe, Won't Become a U.S. Ally

But even as New Delhi takes unprecedented steps toward shoring up relations with the Washington, there appears to be little chance the traditionally non-aligned nation will establish any formal defense alliance with the U.S.

"In fact, we do refer to India and the USA as natural allies," former Indian ambassador to China Ashok Kantha told Newsweek, "but this is not in the sense of a military alliance."

Such an alliance would run contrary to more than 75 years of India's post-colonial history after winning its independence from the United Kingdom and suffering a violent partition with Pakistan, sparking the first of several wars over disputed territory with the neighboring Islamic Republic as well as one with China six decades ago. Even during some of the nation's most dire crises, however, India has opted to not choose sides among world powers.

"We had to suffer a period of colonial subjugation lasting two centuries, and then we emerged as one of the most populous countries in the world, which was also innovative in democracy, in multiculturalism and in an open society," Kantha said. "We came to the conclusion during the Cold War period that India cannot be a camp follower of either great power, at that time the USA and the Soviet Union, that we will work with both countries."

Today, this policy referred to by India as "strategic autonomy" continues amid growing frictions between the U.S. and China, even if New Delhi saw Washington as the better partner.

Swaran Singh, a visiting professor at the University of British Columbia with decades of experience lecturing at India's major diplomatic and military institutions, also argued that managing this relationship was essential for achieving the long-term objectives of both powers.

"De-escalation is the only way as both China and India cannot afford to derail their development trajectories and miss their imagined historic resurgence to the center stage of world affairs," Singh told Newsweek. "But as two rapidly growing economies and peer civilizational states reclaiming their place under the sun, their competition remains inevitable."


Still, China's growing clout in the economic, military and diplomatic spheres have presented both risk and opportunity for New Delhi.

"While China has demonstrated an unprecedented economic growth that undergirds its political influence and military modernization, China's rise has made India the preferred partner for status quo powers in the U.S.-led liberal world order," Singh said. "This has opened doors for technology transfers and defense cooperation for India, making India the only neighbor that has showcased capacity to stand up to China."

India has also doubled down on its participation in another multilateral group, the Quadrilateral Security Dialogue, commonly known as the Quad, alongside the U.S., Australia and Japan. The quartet has intensified cooperation among members and it is regularly accused by China of representing an attempt to form a bloc built on containing the People's Republic.


"The power gap between India and China, is certainly a major factor driving the current convergence of U.S.-India ties," Joshi said. "But India's positions are mainly driven by its size and interests. It perceives a significant security threat from Pakistan, whereas the U.S. has been at various times a major military ally of Pakistan. And where it sees Iran as a relatively benign actor in the Persian Gulf and a friend, the U.S. has seen Tehran as a hostile player."

"This rules out the possibility of a formal military alliance with the U.S.," Joshi said, "something that would require a much closer identity of views."
Riaz Haq said…
India desperately wants to decouple from China but it can't.

By Kunal Purohit

A study by the Indian Institute of Foreign Trade (IIFT), a state-backed university in New Delhi, found that Chinese imports were boosting India’s manufacturing and its exports in key sectors, including inorganic chemicals, pharmaceuticals, iron and steel.

It also found that rising imports in all the selected industries, except iron and steel, had led to a corresponding rise in output in those industries.

It also found that rising imports in all the selected industries, except iron and steel, had led to a corresponding rise in output in those industries.
From sectors where Chinese goods were the cheapest choice to industries where they were the sole option, the paper highlighted the crucial role of such imports and recommended a re-evaluation of Prime Minister Narendra Modi’s campaign to make India self-reliant.

“The current policy thrust on ‘self-reliance’, or atmanirbhar bharat, will not be effective unless the domestic manufacturing is propelled to high-technology products. Then rising imports will not be a concern as they lead to an increase in exports,” stated the paper by IIFT Professor Sunitha Raju.
It recommended the Indian government lower trade barriers and encourage imports to strengthen the country’s domestic manufacturing capabilities. Such an approach, the paper argued, would boost manufacturing growth and create greater employment opportunities.
India’s Commerce Ministry declined to comment on the issue when contacted by This Week in Asia.
Since 2020, when clashes between Indian and Chinese soldiers led to a stand-off at numerous points along their border, Delhi has been attempting to decouple India’s economy from China’s.
It has placed restrictions on Chinese investments in India, blocked Chinese firms in sensitive sectors such as power and railways, and banned hundreds of mobile apps originating from China, including the popular TikTok.
Despite these efforts, trade between the two countries has skyrocketed. In 2022, bilateral trade reached a record US$135.98 billion, according to Chinese customs data.
To Delhi’s dismay, Indian imports of Chinese goods accounted for more than US$100 billion of total trade. The Modi government in January summoned 18 top ministries to discuss ideas to cut down imports from China.
IIFT’s latest research might lead to second thoughts in Delhi about cutting Chinese imports. The paper found such imports not only provided crucial raw materials but also bolstered productivity in other industries. “All this also leads to an increased manufacturing output,” Raju said.
The study found that of the 32 product subcategories imported from China, it was the cheapest supplier in nearly one-third of cases. For the remaining 70 per cent, there were cheaper alternatives available, and yet, the Chinese product was preferred.
“There is a misconception that Chinese imports are preferred only because they are cheaper,” said Raju, adding that the quality of goods provided by Chinese suppliers varied, depending on the price buyers were willing to pay. “We found many domestic buyers who said they preferred the quality of products from China to the products made elsewhere.”
Complicating the matter further is the fact that China was the sole supplier for 16 products, leaving domestic manufacturers with little choice.
On the ground, traders and experts agree.
Riaz Haq said…
From Red Carpet to Doghouse: Macron Returns From China to Allied Dismay

Criticism of the French president’s performance in Beijing has been scathing among some allies, who saw him as cozying up to Beijing.

In short order in China, Mr. Macron managed to alienate or worry allies from Warsaw to Washington, with his embrace of what a Sino-French declaration called a “global strategic partnership with China.” He adopted the Chinese lexicon of a “multipolar” world, freed of “blocs,” liberated from the “Cold War mentality,” and less reliant on the “extraterritoriality of the U.S. dollar.”

Most worrisome, particularly for the United States, he suggested in an interview with Politico and French journalists on the way home that the security of Taiwan is not the problem of a Europe that must resist becoming America’s “vassals.”

How Taiwanese democracy and freedom differ from Ukrainian democracy and freedom, and how the threat of Russian autocracy differs from the threat of a Chinese autocracy that backs Moscow, were two questions left unanswered by Mr. Macron.

Speaking of Taiwan, he said: “The worse thing would be to think that we Europeans must become followers on this topic and take our cue from the U.S. agenda and a Chinese overreaction.”

By Tuesday the Élysée Palace, home to the president, felt it necessary to clarify France’s allegiances, so muddied had the optics become. France, it said, “is not equidistant between the United States and China. The United States is our ally, with shared values.”

The fact that this clarification was necessary suggested how much Mr. Macron had unsettled his allies.

“The alliance with the United States is the absolute foundation of our security,” Mateusz Morawiecki, the prime minister of Poland, said on Tuesday in an evident riposte to Mr. Macron, noting that some Western leaders “dream of cooperation with everyone, with Russia and with some powers in the Far East.”


Ms. von der Leyen received none of the lavish attention showered on Mr. Macron. China prefers nation states to transnational entities, and had bristled at a speech she made this month in which she criticized China as “more repressive at home and more assertive abroad.”

On the face of it, Taiwan does matter to Europe for economic and political reasons. The world runs on Taiwanese chips. The island democracy produces over 60 percent of the world’s semiconductors and about 90 percent of the most elaborate ones.

After China’s crushing of democratic aspirations in Hong Kong, the implications of a Chinese invasion of Taiwan and the suppression there of liberal democracy would be devastating for the very causes Europe and Mr. Macron have committed to defend in Ukraine.

The French presidential statement said: “Our position on Taiwan is constant. We support the status quo and maintain our exchanges and cooperation with Taiwan, which is a recognized democratic system.”
Riaz Haq said…
iPhone Exports from India Double to Surpass $2.5 Billion

Foxconn Technology Group and Wistron Corp. have each shipped more than $1 billion of Apple’s marquee devices abroad in the first nine months of the fiscal year ending March 2023, people familiar with the matter said. Pegatron Corp., another major contract manufacturer for Apple, is on track to move about $500 million of the gadgets overseas by the end of January, the people said, asking not to be identified revealing private information.

Apple’s rapidly growing export numbers illustrate how it is ramping up operations outside of China, where chaos at Foxconn’s main plant in Zhengzhou exposed vulnerabilities in the Cupertino-headquartered company’s supply chain and forced it to trim output estimates. That compounded a broader problem with evaporating demand for electronics as consumers weigh the risks of a global recession.

Apple, the world’s most valuable company, began assembling its latest iPhone models in India only last year, a significant break from its practice of reserving much of that for giant Chinese factories run by its main Taiwanese assemblers including Foxconn.

While India makes up just a fraction of iPhone output, rising exports bode well for Prime Minister Narendra Modi’s plan to make the country an alternative to China as factory to the world.

China’s Covid Zero policies and an episode of violence at the Zhengzhou plant — nicknamed iPhone City as the world’s biggest production center for the device — laid bare the dangers of relying on the country. While Beijing has since dropped that approach to containing the virus, Apple and other global names are exploring alternative locations more than ever before.

India’s vast workforce, Modi’s support and a thriving local market make it a prime candidate to take on more electronics manufacturing. Foxconn, Apple’s largest supplier, began building facilities in the country more than five years ago in anticipation of a need to extend its geographic range.

One recent selling point is a raft of new government incentives, a cornerstone of Modi’s drive to make India an electronics manufacturing hub. Foxconn has won 3.6 billion rupees ($44 million) of benefits in the first year of the so-called production-linked incentives scheme, while Wistron’s claims are currently being processed, the people said.

Representatives for Apple, Foxconn and Wistron didn’t respond to emails seeking comment. A Pegatron spokesperson declined to comment.

Apple’s contract manufacturers currently make iPhones at plants in southern India. But production in the country is just beginning. About 3 million of the devices were made in India in 2021, compared with 230 million in China, according to Bloomberg Intelligence estimates.

Foxconn began making the iPhone 14 in India a few months ago — sooner than anticipated — after a surprisingly smooth production rollout that slashed the lag between Chinese and Indian output from months to mere weeks. Apple’s three Taiwanese partners currently assemble iPhones 11 to 14 in India.

But moving out of China, where Apple has built a deep supply chain for close to two decades, isn’t easy. A Bloomberg Intelligence analysis estimated it would take about eight years to move just 10% of Apple’s production capacity out of China, where roughly 98% of the company’s iPhones are being made.

India tracks production and exports of all smartphone makers who enjoy financial incentives as part of Modi’s push.

Beyond smartphones, the country is drawing up plans to boost financial incentives for tablet and laptop makers, hoping to woo Apple to make everything from earphones to MacBooks locally as well as attract other brands. The iPhone maker is also expected to open its first retail store in India in 2023, after meeting certain criteria imposed on foreign retailers.
Riaz Haq said…
India is sliding into Putin’s hands
Story by Angela Barnes

India is now the largest country in the world by population, having surpassed China in the latest UN figures. It’s also now the biggest buyer of Russian crude oil in the world, and its armed forces are largely equipped with Russian weapons.

The West has traditionally seen India as a friend, but when it comes to actions rather than words the world’s fifth biggest economy pays more attention to what Vladimir Putin wants than it does to the desires of Washington or London.

Karan Mehrishi, Indian economics commentator, tells the Telegraph that Russian imports have saved India around $3bn in the past year, compared to its total annual oil import bill of nearly $120bn. Russia has even knocked the Organization of the Petroleum Exporting Countries (OPEC) off the top spot for supplying India, since Western nations rejected Kremlin-supplied black gold following Putin’s invasion of Ukraine.

India will probably find, like Germany and other European nations before it, that becoming dependent on Putin for critical energy supplies is to place oneself far too much under his control. Indian Prime Minister Narendra Modi, however, seems to believe that India is simply seizing the opportunity to snap up cheap crude to meet its rising demand.

In March, for example, Indian fuel requirements jumped by 5 per cent year-on-year to 4.83 million barrels per day (bpd).

“The Indian economy is the fastest growing on Earth and is expected to become the world’s third largest by 2025. It will attain the $10tn GDP threshold by 2031,” says Mehrishi.

An economy that big needs huge amounts of energy, and India is heavily dependent on imports.

“Inflation worries rather than geopolitical concerns have taken centre stage, leading New Delhi to brush away Western reprobation about increasing economic ties with Moscow,” comments Susannah Streeter, head of money and markets at Hargreaves Lansdown. “The approach appears to be working, with India’s headline inflation rate going in the right direction, helped also by lower food prices. But the price spiral is still not unwinding fast enough to meet the central bank’s target.”

Osama Rizvi, energy analyst at Primary Vision, describes the relationship between Russia and India as a marriage of convenience.

“They are interdependent: India, which imports more than 85 per cent of its oil, and Russia, which depends on the proceeds from oil and gas for almost 50 per cent of its revenue,” he told the Telegraph.

India’s appetite for Russian crude has resulted in Moscow overtaking Iraq for the first time to emerge as its top oil supplier, pushing Saudi Arabia down to third place in the last fiscal year.

“Refinitiv Oil Research analysis forecasts that India will import 1.94 million barrels per day from Russia, more than doubling since last July and exceeding total imports from the Middle East region,” Streeter says.

As a result, Russia has been able to escape the worst effect of the penalties imposed by the West to isolate it. Non-sanctioning countries like India have propped up the crude oil export sales which are one of the main factors preventing Russia from going bankrupt.

India’s close ties to Russia might seem more obvious since the war in Ukraine started in February last year, but good relations between the two countries go back a long way. A positive relationship between the two countries has existed since the 18th century reign of Tsar Paul – albeit interrupted by the period of British rule, when Russia was seen as a threat by the colonial government. Following independence from Britain, India once again established firm diplomatic ties, beginning with Nehru’s 1955 visit to the Soviet Union.

“Apart from getting oil at below market rates, India could have also been obligated to buy Russian oil to help a friend,” Mehrishi says.

Riaz Haq said…
India is sliding into Putin’s hands
Story by Angela Barnes

Since the 1960s, the Soviet Union has supplied the Indian military with advanced weaponry that it would have had difficulty obtaining elsewhere: and India has in fact often looked to the Soviets and then Russia as a potential ally against the West. Perhaps the strongest example of Soviet Union military support came during the 1971 Bangladesh Liberation War, when the Kremlin deployed nuclear submarines to the Indian Ocean to ward off any Western meddling with Indian interests.

That long-standing supply of weapons to India continues. Russian state news agencies in February set arms exports to India at around $13bn over the past five years. New Delhi has placed further orders with Moscow for military equipment and weapons exceeding $10bn.

Tellingly, prime minister Narendra Modi has never condemned Russia's invasion of Ukraine. Meanwhile, relations between India and Russia are only set to strengthen with the two countries in advanced negotiations on establishing a free trade agreement – a move that will further stoke tensions with the West.

“Pushing down energy prices will be the priority of the Modi administration, so maintaining good trade relations with Moscow will continue to be seen as in the national interest, despite sharp disapproval behind diplomatic doors,” Streeter adds.

A lot of Westerners think of India as a benign, neutral democracy which should naturally align with liberal values against the bloody-handed tyranny of modern Russia. But the Indians don’t see it that way: and the blunt truth is, they are keeping Vladimir Putin in business for no better reason than slightly cheaper oil.
Riaz Haq said…
#America’s Bad Bet on #Modi.
#Delhi Won’t Side With #Washington Against #Beijing. #India’s significant weaknesses versus #China, & its inescapable proximity to it, guarantee that Delhi will never involve itself in any #US confrontation with Beijing. #BJP

by Ashley Tellis

For the past two decades, Washington has made an enormous bet in the Indo-Pacific—that treating India as a key partner will help the United States in its geopolitical rivalry with China. From George W. Bush onward, successive U.S. presidents have bolstered India’s capabilities on the assumption that doing so automatically strengthens the forces that favor freedom in Asia.

The administration of President Joe Biden has enthusiastically embraced this playbook. In fact, it has taken it one step further: the administration has launched an ambitious new initiative to expand India’s access to cutting-edge technologies, further deepened defense cooperation, and made the Quad (Quadrilateral Security Dialogue), which includes Australia, India, Japan, and the United States, a pillar of its regional strategy. It has also overlooked India’s democratic erosion and its unhelpful foreign policy choices, such as its refusal to condemn Moscow’s ongoing aggression in Ukraine. It has done all of this on the presumption that New Delhi will respond favorably when Washington calls in a favor during a regional crisis involving China.


India’s priority has been to receive American assistance in building up its own national capabilities so it can deal with threats independently. The two sides have come a long way on this by, for example, bolstering India’s intelligence capabilities about Chinese military activities along the Himalayan border and in the Indian Ocean region. The existing arrangements for intelligence sharing are formally structured for reciprocity, and New Delhi does share whatever it believes to be useful. But because U.S. collection capabilities are so superior, the flow of usable information often ends up being one way.


The fundamental problem is that the United States and India have divergent ambitions for their security partnership. As it has done with allies across the globe, Washington has sought to strengthen India’s standing within the liberal international order and, when necessary, solicit its contributions toward coalition defense. Yet New Delhi sees things differently. It does not harbor any innate allegiance toward preserving the liberal international order and retains an enduring aversion toward participating in mutual defense. It seeks to acquire advanced technologies from the United States to bolster its own economic and military capabilities and thus facilitate its rise as a great power capable of balancing China independently, but it does not presume that American assistance imposes any further obligations on itself.

As the Biden administration proceeds to expand its investment in India, it should base its policies on a realistic assessment of Indian strategy and not on any delusions of New Delhi becoming a comrade-in-arms during some future crisis with Beijing.
Riaz Haq said…
#India's ties with #Russia remain steady. But #Moscow's tighter embrace of #China makes it wary. It appears “this (#Delhi-Moscow) relationship is going down from being a very high-value strategic partnership to a transactional one" #Modi #US #Ukraine

India’s relationship with Russia remains steadfast as both sides seek to deepen their economic engagements.

But Moscow has also grown close to Beijing since invading Ukraine, and that raises critical national security concerns for New Delhi, say observers.

India’s leaders are “carefully watching” as Russia becomes more isolated and moves closer to “China’s corner,” said Harsh V. Pant, vice president for studies and foreign policy at Observer Research Foundation, a New Delhi-based think tank.

It appears “this relationship is going down from being a very high-value strategic partnership to a transactional one,” said Sreeram Chaulia, dean of the Jindal School of International Affairs, adding Moscow’s “tighter embrace of China” doesn’t bode well for India’s national security needs.

India’s relationship with Russia remains steadfast as both sides seek to deepen their economic ties. But Moscow has also grown close to Beijing since invading Ukraine, and that raises critical national security concerns for New Delhi.

Indian external affairs minister S. Jaishankar recently said the country was ready to restart free trade negotiations with Russia.

“Our partnership today is a subject of attention and comment, not because it has changed, but because it has not,” he said, describing the relationship as “among the steadiest” in the world.

Russia also wants to “intensify” free trade discussions with India, Deputy Prime Minister Denis Manturov said during a visit to Delhi. Manturov is also Moscow’s trade minister.

Despite the display of economic cooperation, India’s leaders are “carefully watching” as Russia becomes more isolated and moves closer to “China’s corner,” said Harsh V. Pant, vice president for studies and foreign policy at Observer Research Foundation, a New Delhi-based think tank.

Russia’s “weak and vulnerable position” and growing reliance on China for economic and strategic reasons, will definitely be worrying for India, he told CNBC.

It’s becoming “more difficult with every passing day because of the closeness that we are witnessing between Beijing and Moscow,” Pant noted. “The pressure on India is increasing, it certainly would not like to see that happen.”

New Delhi will try as much as possible to avoid a potential “Russia-China alliance or axis,” Pant added. “As that will have far reaching consequences and will fundamentally alter India’s foreign policy and strategic calculation.”

There are national interest reasons “why India continues to buy cheap Russian oil and trade with them, this FTA is part of that,” said Sreeram Chaulia, dean of the Jindal School of International Affairs in New Delhi.

But it appears “this relationship is going down from being a very high-value strategic partnership to a transactional one,” he noted, adding Moscow’s “tighter embrace of China” doesn’t bode well for India’s national security needs.

India, which holds the current G-20 presidency, still hasn’t condemned Russia over its invasion of Ukraine.
Riaz Haq said…
#India-#Russia Ties ‘Nose Dive’; After S-400 Shipments, Russia Could Now Suspend #Oil #Exports To India. @vkthakur. In Goa at #SCO2023 , Lavrov bluntly implied that in its dealings with Russia, India wants to eat the cake and have it too. #China #US

India, which has been lapping up cheap Russian oil for domestic consumption as well as export as refined commodities, hasn’t been compensating Russia for its oil imports.

Lavrov pointed out that Russia has accumulated billions of rupees in Indian banks that Russia cannot use.

“This is a problem. We need to use this money. But for this, Rupees must be converted to another currency, and this is now being discussed.”

India and Russia have been exploring options for settling their trade in rupees or rubles since the start of the Russian Special Operation (SMO) in Ukraine in February 2022, but they have made little headway even after more than a year.

Trade Imbalance Between India & Russia
The problem is – India’s imports from Russia far exceed its exports. As a result, Indian rupee payments to Russian bank Vostro accounts in Indian banks are of no use to Russia.

The obvious solution is for India to step up its exports to Russia. Unfortunately, Indian exports are severely constrained by the lackluster quality of Indian goods. Also, Russia is a resource-rich country, so India doesn’t have the option to export commodities to Russia.

India could pay the accumulated billions of rupees to Russia by converting them to a currency like the Chinese Yuan, however, that would entail bearing the cost of conversion. China’s massive trade surplus with India makes the rupee particularly weak against the Yuan.

Suspension of Rupee-Rouble Trade
According to Reuters, rupee-rouble trade between India and Russia has now been suspended. The suspension will likely restrict, if not end, the import of cheap Russian oil since the start of the Ukraine war.

The Imperative To Increase Exports
Nations become economic powerhouses by increasing their exports. To do so, they need to manufacture quality goods in demand across the world.

For example, Russia has the ability to make for itself just about everything that it needs, but that doesn’t make Russia an economic powerhouse. Russian exports are also constrained by quality when compared to goods manufactured by China, Japan, and many European countries.

Russia’s pivot towards Asia is a historic opportunity for the Indian private sector to increase exports to Russia. Our response to the crisis in Ukraine so far has been akin to a trader’s response, not the response of an entrepreneur. India can easily carve a niche for itself with the export of consumer goods to Russia.

Impact On Defence Relationship
India’s deep-rooted defense relationship with Russia, which has stood India in good stead for decades, has been threatened for some years now by US CAATSA sanctions. The suspension of Rupee trade with Russia will seriously impact India’s defense capability, possibly at a time when India can least afford enfeeblement.

It’s likely that Russia held back the supply of an additional two S-400 regiments to India earlier because of India’s inability to compensate Moscow. Russia could continue to supply oil to India because Russia has surplus oil, but it couldn’t continue supplying S-400 because it doesn’t have surplus S-400 regiments. Not now, at least, when it’s fighting a war.

Willing Make-In-India Partner
Russia has expressed its enthusiasm for participating in Make-in-India defense projects through industry-to-industry collaboration.

India’s defense minister Rajnath Singh held a bilateral meeting with the Minister of Defence of Russia, Army General Sergei K Shoigu, on the sidelines of the Shanghai Cooperation Organisation (SCO) Defence Ministers’ meeting in New Delhi on April 28, 2023.

Riaz Haq said…
#India-#Russia Ties ‘Nose Dive’; After S-400 Shipments, Russia Could Now Suspend #Oil #Exports To India. @vkthakur. In Goa at #SCO2023 , Lavrov bluntly implied that in its dealings with Russia, India wants to eat the cake and have it too. #China #US

The two Ministers discussed wide-ranging issues of bilateral defense cooperation, including military-to-military ties as well as industrial partnership. They expressed satisfaction over the continued trust and mutual respect between the two countries, particularly in defense, and reiterated their commitment to strengthening the partnership.

Wary of US CAATSA sanctions, India is seeking joint venture development and local manufacture of weapon systems from Russia, and Russia has been forthcoming.

India and Russia have discussed technical collaboration for local production of S-400 systems in India. In September 2019, Russia’s state corporation Rostec CEO, Sergey Chemezov, said that both India and Russia are currently in talks to launch a local S-400 production line in India.

“Yes, we are discussing the localization [of S-400 production] with India as well”, Chemezov reportedly told Russia’s RBK TV.

Russia is participating in the competitive bid for the local manufacture of P-75I submarines in India. Russia is ready to transfer its Amur 1650 submarine technology to India, and it’s ready to collaborate with the DRDO in fitting the submarine with an AIP system

Russia is ready to provide technology for India’s new tanks. The Russian Federal Service of Military-Technical Cooperation (FSVTS) said that Moscow can share its advanced Armata modular tracked platform with India. Vladimir Drozhzhov, the deputy director of FSVTS, told Russian media that Moscow is keen on jointly developing India’s main battle tank with modern Russian technology.

Other JV development offers from Russia include the Su-75 Checkmate stealth fighter.

Disconcerting Lack Of Urgency On The Part Of India
The lack of urgency on the part of our negotiators to work out a trade mechanism is disconcerting. As Lavrov said, Russia, which is fighting a war, needs to use the money that India owes to Russia. As a strategic partner with special privileges, you would expect India to be sensitive to Russia’s concerns.

It will indeed be deeply ironic if Indian tardiness (Or perhaps Western pressures?) derail a deep-rooted mutually beneficial relationship that has stood the test of time.

The indirect impact of the derailing – Russia would likely be forced to lean more heavily on China – could have a more ominous negative impact on India’s long-term security.

Cost Competitiveness of Russian Weapons
There is a good reason why India continues to seek Russian defense technology despite its access to Western arms manufacturers in Israel, France, the UK, and the US; Russian defense technology is more cost-effective than Western technology in certain areas, such as submarines, hypersonics, and armor.

India has been a good market for Russian defense OEMs. However, if Russian defense OEMs are unable to operate in India, the loss will be India’s more than Russia’s. Russian OEMs will easily find alternative markets – in the Middle East, South America, and Africa – as this world inexorably moves towards multipolarity.

India, on the other hand, would slip from being a regional power to being a regional US vassal.

Riaz Haq said…
Geopolitics is shrinking India’s risk premium | Reuters

India is also benefiting from worsening relations between Washington and Beijing. Companies are looking to shift supply chains out of the People’s Republic, while money managers need a place to deploy long-term funds with fewer risks of financial sanctions.

In some cases, the pivot is stark: Apple suppliers Foxconn (2317.TW) and Pegatron (4938.TW), for example, are building factories in Karnataka and Tamil Nadu. JPMorgan analysts reckon India will make one in four iPhones within two years, even though manufacturing costs are higher than in China. Ontario Teachers’ Pension Plan, Canada’s third-largest retirement fund, closed part of its China equity investment team based in Hong Kong in April, seven months after opening an office in Mumbai.


MUMBAI, May 9 (Reuters Breakingviews) - Indian tycoons and financiers are sitting back as global business comes to them for a change. Apple (AAPL.O) CEO Tim Cook, Microsoft (MSFT.O) boss Satya Nadella and Blackstone (BX.N) President Jon Gray have all visited India this year. They are lured by a country whose potential as an alternative investment destination to China increasingly outweighs the local challenges of doing business.

Visitors see many attractions. India’s $3 trillion economy is forecast to grow by 6.5% this fiscal year, continuing to outpace the rest of the world. Plentiful imports of cheap Russian oil are keeping inflation in check. Meanwhile, the workforce of the world’s most populous country offers low costs, high numbers of technology engineers, and hundreds of millions of people who speak English.

Executives and investors also see a business-friendly government that is likely to remain in power for the next half-decade. Opinion polls suggest Prime Minister Narendra Modi will win a third term next year: the biannual Mood of the Nation survey, published in January, found 72% of respondents rated Modi’s performance as good, up from 66% in August. If he wins re-election with an outright majority, businesses would not have to worry about unpredictable coalition politics.

Yet India is also benefiting from worsening relations between Washington and Beijing. Companies are looking to shift supply chains out of the People’s Republic, while money managers need a place to deploy long-term funds with fewer risks of financial sanctions.

In some cases, the pivot is stark: Apple suppliers Foxconn (2317.TW) and Pegatron (4938.TW), for example, are building factories in Karnataka and Tamil Nadu. JPMorgan analysts reckon India will make one in four iPhones within two years, even though manufacturing costs are higher than in China. Ontario Teachers’ Pension Plan, Canada’s third-largest retirement fund, closed part of its China equity investment team based in Hong Kong in April, seven months after opening an office in Mumbai.

Riaz Haq said…
Geopolitics is shrinking India’s risk premium | Reuters

India is also benefiting from worsening relations between Washington and Beijing. Companies are looking to shift supply chains out of the People’s Republic, while money managers need a place to deploy long-term funds with fewer risks of financial sanctions.

In some cases, the pivot is stark: Apple suppliers Foxconn (2317.TW) and Pegatron (4938.TW), for example, are building factories in Karnataka and Tamil Nadu. JPMorgan analysts reckon India will make one in four iPhones within two years, even though manufacturing costs are higher than in China. Ontario Teachers’ Pension Plan, Canada’s third-largest retirement fund, closed part of its China equity investment team based in Hong Kong in April, seven months after opening an office in Mumbai.


MUMBAI, May 9 (Reuters Breakingviews) - Indian tycoons and financiers are sitting back as global business comes to them for a change. Apple (AAPL.O) CEO Tim Cook, Microsoft (MSFT.O) boss Satya Nadella and Blackstone (BX.N) President Jon Gray have all visited India this year. They are lured by a country whose potential as an alternative investment destination to China increasingly outweighs the local challenges of doing business.

Visitors see many attractions. India’s $3 trillion economy is forecast to grow by 6.5% this fiscal year, continuing to outpace the rest of the world. Plentiful imports of cheap Russian oil are keeping inflation in check. Meanwhile, the workforce of the world’s most populous country offers low costs, high numbers of technology engineers, and hundreds of millions of people who speak English.

Executives and investors also see a business-friendly government that is likely to remain in power for the next half-decade. Opinion polls suggest Prime Minister Narendra Modi will win a third term next year: the biannual Mood of the Nation survey, published in January, found 72% of respondents rated Modi’s performance as good, up from 66% in August. If he wins re-election with an outright majority, businesses would not have to worry about unpredictable coalition politics.

Yet India is also benefiting from worsening relations between Washington and Beijing. Companies are looking to shift supply chains out of the People’s Republic, while money managers need a place to deploy long-term funds with fewer risks of financial sanctions.

In some cases, the pivot is stark: Apple suppliers Foxconn (2317.TW) and Pegatron (4938.TW), for example, are building factories in Karnataka and Tamil Nadu. JPMorgan analysts reckon India will make one in four iPhones within two years, even though manufacturing costs are higher than in China. Ontario Teachers’ Pension Plan, Canada’s third-largest retirement fund, closed part of its China equity investment team based in Hong Kong in April, seven months after opening an office in Mumbai.

India appeals as more than a manufacturing base, though. Its economy also dangles the promise of Chinese-style growth. GDP per capita was $2,379 in 2022, less than one fifth of its eastern neighbour. Over 1.2 billion people have mobile phone connections; half of which are smartphones. Morgan Stanley analysts and strategists expect India to become the world’s third-largest economy and stock market before the end of the decade.

India remains a tricky destination for international companies and investors. New Delhi has a long-standing fondness for import tariffs and is infamous for wrangling over tax with multinationals including Vodafone (VOD.L) and energy group Cairn.

Riaz Haq said…
Last week’s stellar revival in Adani Group stocks has helped India reclaim its position among the world’s five largest stock markets.

India lost its fifth position to France after the US-based Hindenburg Research in January, accused the country’s ports-to-power conglomerate Adani Group of “brazen stock manipulation” and “accounting fraud,” Bloomberg reported today (May 29). The allegations triggered a sell-off in Adani stocks, dragging the indices sharply lower.

However, as of May 26, stock market capitalization stood at $3.3 trillion in India, driven by foreign fund inflows into Indian shares—and a sharp recovery in Adani stocks. 

Foreign investors bought shares worth $4.5 billion in May so far, a little more than a two-fold increase from last month, according to India’s National Securities Depository. Adani’s listed entities added around $15 billion to their market value last week, recovering some of their post-Hindenburg losses.

Now France has been pushed out of the top-five list again after the country’s stock indices lost more than $100 billion in market value last week. This was caused by a sell-off in shares of luxury goods companies such as LVMH Moet Hennessy Louis Vuitton and Vivendi, due to fears of a slowdown in China and the US.

Investors are choosing India over China
India’s prospect as one of the world’s fastest-growing economies is alluring. 

Rival China, on the other hand, seems to have taken a backseat due to a stuttering economy. Beijing’s isolationist Covid-19 policies, turmoil in its real estate industry, and a harsh anti-trust campaign against the country’s valuable tech firms have crushed sentiments for Chinese assets, economists say.

Mark Mobius, founder of Mobius Capital Partners and a market expert, also sees India as a viable alternative. “You’ve got a billion people (Indians), they can do the same thing that the Chinese do. They can do the same kind of manufacturing and so forth,” Mobius told Fox Business in March.

Last week, Christopher Wood, strategist at Jefferies Financial Group, increased the weight of Indian stocks in his Asia Pacific portfolio, excluding Japan, Bloomberg reported. This reflects the dismay among investors when it comes to the Chinese stock market.
Riaz Haq said…
#Modi's #semiconductor #manufacturing plan flounders as firms struggle to find #tech partners. Modi has made it top priority for #India's economic strategy to "usher in new era in electronics manufacturing" by luring global companies. #MakeInIndia

NEW DELHI/OAKLAND, California, June 1 (Reuters) - Big companies including a Foxconn joint venture that bid for India's $10 billion semiconductor incentives are struggling due to the lack of a technology partner, a major setback for Prime Minister Narendra Modi's chipmaking ambitions.

A planned $3 billion semiconductor facility in India by chip consortium ISMC that counted Israeli chipmaker Tower as a tech partner has been stalled due to the company's ongoing takeover by Intel, three people with direct knowledge of the strategy said.

A second mega $19.5 billion plan to build chips locally by a joint venture between India's Vedanta and Taiwan's Foxconn is also proceeding slowly as their talks to rope in European chipmaker STMicroelectronics (STMPA.PA) as a partner are deadlocked, a fourth source with direct knowledge said.

Modi has made chipmaking a top priority for India's economic strategy as he wants to "usher in a new era in electronics manufacturing" by luring global companies.

India, which expects its semiconductor market to be worth $63 billion by 2026, last year received three applications to set up plants under the incentive scheme. They were from the Vedanta-Foxconn JV; a global consortium ISMC which counts Tower Semiconductor (TSEM.TA) as a tech partner; and from Singapore-based IGSS Ventures.

The Vedanta JV plant is to come up in Modi's home state of Gujarat, while ISMC and IGSS each committed $3 billion for plants in two separate southern states.

The three sources said ISMC's $3 billion chipmaking facility plans are currently on hold as Tower could not proceed to sign binding agreements as things remain under review after Intel acquired it for $5.4 billion last year. The deal is pending regulatory approvals.

Talking about India's semiconductor ambitions, India's deputy IT minister Rajeev Chandrasekhar told Reuters in a May 19 interview ISMC "could not proceed" due to Intel acquiring Tower, and IGSS "wanted to re-submit (the application)" for incentives. The "two of them had to drop out," he said, without elaborating.

Tower is likely to reevaluate taking part in the venture based on how its deal talks with Intel pan out, two of the sources said.

Riaz Haq said…
Interview: India’s exaggerated value and the danger of S Jaishankar’s ‘new world order’ posturing

To start off, how do you read Jaishankar and India’s articulation of a multipolar world, either as an aspiration or as a reality?

I’ll start with the reality: Of course, it is not [a multipolar world].

There are different ways of defining polarity. Academics by and large look at it as either unipolar world or a transition to a bipolar word. Some argue that the world may be bipolar in the Indo-Pacific region because of China’s power there, but not bipolar in a global systemic sense. Since this is a peaceful period – not marked by war – it’s very hard to identify the boundary between unipolar and bipolar. But my sense as an analyst is that the world is already bipolar, because the way polarity is measured is purely in terms of material capacities, and on this, clearly China has the wealth and the intention.

Wealth by itself doesn’t fully define polarity, it has to be converted into things like military capacity. So Japan or Germany becoming closer to the US in terms of GDP [gross domestic product] levels would not constitute bipolarity. But in many ways, the US and China are closer to each other than anyone else. China’s GDP is now almost comparable to the US, or by some measures it is greater. Polarity is not an exact science – it doesn’t need to be exactly at the same level for bipolarity. If you look at the US-Soviet balance for example, at no point did the Soviet Union cross even the 50% threshold in comparison to the US economy. Nevertheless we called it bipolar.

China is already well past that stage. The other part of polarity is that there has to be sufficient distance between the polar powers and other great powers. And if you look at US-China and everyone else, the gap is huge. So it’s both the fact that US and China are comparable, and the huge gap between them and everyone else, that makes it a bipolar system. The only reason there is some doubt about whether it is unipolar or bipolar is because the US has a global [military] capacity, and that China still hasn’t developed that capacity.

But that measurement is also a problem because the Soviet Union never developed that global capacity in the way that the US did. As I see it, China in the Indo-Pacific, the Asia-Pacific, has that capability and is also projecting now – it’s building a large number of aircraft carriers, it has a military base in Africa – we can expect more of that to happen. It will reach beyond its region. Also, we don’t see any immediate possibility that this will change, that others will catch up, because the gap is already so huge. Somebody crossing that threshold is very difficult for the immediate future. So it is going to be bipolar for at least a decade.

If I had to throw in an outsider’s question: If these concepts are fuzzy even to academics, why is it important to identify what sort of polarity we have right now? What is the importance of the concept?

Most people use it in a descriptive manner. But the real importance comes from an IR [international relations] theory perspective. Some IR theories project a theoretical utility to characterising polarity. They would argue that in a bipolar system, states behave in a different way than in a unipolar or multipolar system. There are consequences in terms of state behaviour and outcomes.

Riaz Haq said…
Blinken calls China ‘most serious long-term’ threat to world order - POLITICO

“China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military and technological power to do it,” Blinken said. “Beijing’s vision would move us away from the universal values that have sustained so much of the world’s progress over the past 75 years.”

Riaz Haq said…
Washington and New Delhi Share Interests, Not Values
By Daniel Markey

As the former diplomat Dennis Kux wrote in India and the United States: Estranged Democracies, “The effort succeeded.” During President Dwight Eisenhower’s second term, Kux notes, “US assistance grew substantially, surging from about $400 million in 1957, to a record $822 million in 1960.” Eisenhower himself seemed committed to India’s democratic future. As the president stated in remarks at the opening of the World Agriculture Fair in New Delhi in December 1959, “Whatever strengthens India, my people are convinced, strengthens us, a sister republic dedicated to peace.” Six months later, Eisenhower signed a breakthrough multiyear deal with India to deliver $1.28 billion in food aid under the United States’ Food for Peace program, because India’s domestic farmers were routinely unable to meet the country’s food needs.

But if Kennedy and Eisenhower hoped that praising India would turn New Delhi into an ally, they were sorely mistaken. In 1954, Indian Prime Minister Jawaharlal Nehru had explicitly declared that his country would remain nonaligned in the Cold War, rankling Eisenhower. Kennedy, as president, hoped he could bring India closer by having Nehru visit Washington in 1961, but the trip changed nothing. The prime minister rebuffed all his efforts to bring India into the United States’ orbit.


As Kux recounts, Kennedy’s Cold War successors were similarly frustrated by New Delhi. President Lyndon Johnson found Indian Prime Minister Indira Gandhi’s 1966 criticism of U.S. involvement in Vietnam to be particularly galling; his ambassador to India later recalled that the president’s reaction ranged “from the violent to the obscene.” Gandhi’s subsequent decision, in 1971, to conclude a “Friendship Treaty” with Moscow was later described by former U.S. Secretary of State Henry Kissinger as a “bombshell” that threw “a lighted match into a powder keg,” inflaming relations between India and Pakistan. And in January 1980, when India’s permanent ambassador to the United Nations effectively endorsed the Soviet Union’s invasion of Afghanistan, President Jimmy Carter was livid. Carter’s ambassador in New Delhi told Gandhi “what a devastating statement it had been from the American point of view and what a terrible backlash it had caused in the United States.”

Nonetheless, U.S. policymakers often praised India in the following decades, and policymakers continued to argue that India’s democratic principles made it a good partner. In his address to India’s Parliament in 2000, President Bill Clinton asserted that the strength of India’s democracy was the first of several important lessons it had taught the world. The administrations of Presidents George W. Bush and Barack Obama routinely employed the “oldest and largest democracies” formulation to describe Washington and New Delhi and their longtime ties. In a 2010 speech to the Indian Parliament, Obama repeatedly stressed the unique bond shared by “two strong democracies.” He then endorsed India’s effort to obtain a permanent seat on the UN Security Council, suggesting that cooperation between India and the United States on the council would strengthen “the foundations of democratic governance, not only at home but abroad.”
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Washington and New Delhi Share Interests, Not Values
By Daniel Markey

New Delhi’s position on Ukraine certainly cuts against its espoused values. But it is far from India’s biggest democratic failure. Since winning two sweeping national victories, one in 2014 and another in 2019, Modi’s Bharatiya Janata Party has made India’s own attachment to liberalism more and more dubious. The BJP has hollowed out institutions that can check the prime minister’s behavior, including by politicizing India’s civilian bureaucracy and turning its Parliament into a rubber stamp for the party’s priorities. Modi also tolerates no criticism in the media, academia, or civil society. The government, for example, imposed an outright ban on a 2023 BBC documentary that detailed Modi’s role in the state of Gujarat’s deadly 2002 communal riots. The organizations that compile the three biggest rankings of democracy across the world—the V-Dem (Varieties of Democracy) Institute, Freedom House, and the Economist Intelligence Unit—have all downgraded India’s score since Modi took office.

New Delhi’s democratic failings extend beyond eliminating checks and balances. The BJP is deeply intertwined with the Rashtriya Swayamsevak Sangh, an organization that aims to give India an exclusively Hindu identity (and to which Modi belongs). Created in 1925, the RSS was modeled on interwar European fascist groups and charged with promoting, in the words of one founder, “the military regeneration of the Hindus.” This goal was directly opposed by Mohandas Gandhi and Nehru, who championed freedom of religion, celebrated diversity, and defended minority rights. That is why a radicalized Hindu nationalist and RSS member assassinated Gandhi in 1948.

India’s autocratic turn creates many problems for the United States. One is that it simply makes New Delhi less trustworthy. Democratically accountable leaders need to justify and defend foreign policies to their own citizens, which makes their decisions more transparent and predictable. Authoritarian decisions, by contrast, are far harder to predict. In addition, the more ethnonationalist New Delhi becomes, the less secure India will be. India is home to roughly 200 million Muslims—almost the size of Pakistan’s entire population—and it has an extensive history of communal violence. By repressing its minorities, India risks its tenuous stability in the near term and mounting and debilitating violence in the long term. And an India consumed with internal security challenges will have fewer resources, less bandwidth for foreign policy, and less legitimacy to play a constructive role beyond its borders.

India’s Hindu nationalism at home also leads it to promote illiberal aims abroad. Hindu nationalists believe that one of their top foreign policy achievements has been mobilizing overseas RSS-affiliated groups in the Indian diaspora to lobby other capitals, including Washington, to support BJP initiatives. Hindu nationalists also believe that India should be a sprawling, civilizational power, and many of them say they want to create Akhand Bharat—a greater “Undivided India”—in which New Delhi would build a “cultural confederation” of territory stretching from Afghanistan to Myanmar and Sri Lanka to Tibet. In 2022, for example, the RSS chief Mohan Bhagwat claimed that this could be a reality in as little as ten to 15 years. His statements raised questions about what a Hindu cultural confederation would actually mean, and they have prompted at least some regional consternation about whether India’s drive for leadership will be as peaceful as the country claims.
Riaz Haq said…
Washington and New Delhi Share Interests, Not Values
By Daniel Markey

Despite the obvious evidence of the BJP’s illiberalism, top Biden administration officials have avoided publicly criticizing the Modi government. Instead, they have brushed aside concerns by declaring, as Blinken did in 2021, that every democracy is an imperfect “work in progress.” Presumably, that is because Biden believes that expressing any concerns about Indian policies would cause too much harm to the relationship.

This fear is not baseless. Like most countries, India does not like to be criticized, so an honest airing of grievances would not go down well. But the current, disingenuous approach has its own price. Soft-pedaling concerns about India’s authoritarian slide, for example, weakens Washington’s ability to champion democracy around the world. In fact, it might actively encourage democratic backsliding. India is no garden-variety struggling democracy: it is the world’s most populous country and a leader in the global South. When Modi uses his association with Washington to burnish his democratic credentials and even to strengthen his self-serving narrative that Hindu India is “the mother of democracy” (as he declared during Washington’s 2023 Summit for Democracy), it sets back liberalism everywhere.

Praising India’s democracy also makes it hard for Biden to build the domestic political alliances he needs to cooperate with New Delhi on security. Many powerful U.S. constituencies, including evangelical Christian groups, are deeply concerned about India’s poor treatment of minorities, its crackdown on religious freedoms, and its stifling of the press. The New York Times and The Washington Post, along with other top U.S. media outlets, run stories and columns on these issues so frequently that BJP leaders have gone out of their way to label the publications “anti-Indian.” And influential figures in Washington are expressing growing alarm about India’s illiberal policies. In March 2021, for example, Senate Foreign Relations Committee Chair Bob Menendez wrote a letter to Secretary of Defense Lloyd Austin, asking that he use his upcoming India trip to “make clear that in all areas, including security cooperation, the U.S.-India partnership must rest on adherence to democratic values.” If Biden continues to emphasize principles in his pitch for better relations, his calls could face mounting opposition.

India’s turn away from democracy is deeply unfortunate. But New Delhi is still an invaluable partner for Washington. In addition to being the world’s most populous state, India boasts the world’s fifth-largest economy, the world’s second-largest military, and a significant cadre of highly educated scientists and engineers. It has a large arsenal of nuclear weapons. And like the United States, India is deeply concerned about China, which it sees as a dangerous power intent on challenging the regional and global order. In a way, now may be the best moment for the United States to cooperate with India. The question is how far Washington should go.

In many cases, the decision to help India is easy. When China began encroaching on Indian territory along the Chinese-Indian border, prompting deadly clashes between the two countries’ militaries in 2020, Washington rightfully provided New Delhi with urgently needed cold-weather gear and intelligence on Chinese positions. It also expedited already planned deliveries of surveillance drones. Since then, U.S. officials have correctly concluded that they can have far more candid discussions with India’s leaders than they have had in the past about defense cooperation, both on land and at sea. They hope that the threat from China, combined with Russia’s disastrous invasion of Ukraine, presents Washington with a once-in-a-generation opportunity to decisively (if not immediately) get New Delhi to shift its heavy reliance on Russian-made military gear to U.S. systems.

Riaz Haq said…
Washington and New Delhi Share Interests, Not Values
By Daniel Markey

Greater U.S.-Indian alignment on China also means the two states could cooperate on certain kinds of technology. Washington, for example, could work with New Delhi to develop alternatives to Chinese-built information and telecommunications infrastructure as a means to compete in a global industry that Beijing has threatened to dominate. The United States could also speed up its efforts to diversify essential industrial inputs away from China and toward India. New Delhi, in turn, would benefit from new economic investments.

But Washington must be careful about the ways it deals with New Delhi. It must remain keenly aware that India’s desire to work with the United States is born of circumstance, not conviction, and could quickly disappear. New Delhi, after all, spent most of the post–Cold War years vacillating about what role it should play between Beijing and Washington, and it often signed on to the former’s initiatives. Even after the border clashes, China and India have roughly the same volume of trade as India and the United States have. New Delhi is still part of the Beijing-founded Shanghai Cooperation Organization. And many Indian policymakers and analysts would much prefer a multipolar world in which India is free to navigate flexible relationships with other great powers to a world led by the United States or defined by a new cold war between Beijing and Washington—a world in which New Delhi must take sides. One of New Delhi’s greatest fears is being indefinitely consigned to the geopolitical sidelines.

For U.S. officials, then, cooperation with India must be tightly targeted to countering immediate threats posed by China. It is fine, for example, for the United States to conduct joint military exercises with India near the Chinese border, as the two states did in November 2022. It is also fine for Washington to strike transactional deals that obviously advance U.S. interests, such as a deal that gives the United States access to Indian seaports in exchange for finite technology transfers or additional intelligence. But when U.S. policies do not clearly enhance U.S.-Indian cooperation with respect to China, they should not receive the benefit of the doubt. The United States should think twice, for example, before approving a proposal General Electric put forward earlier this year to co-produce and transfer U.S. technology to India for advanced fighter jet engines. Washington may benefit from a better Indian military in the short term, but the GE deal could strengthen India’s indigenous defense industry for decades, which might not serve U.S. interests in the long term.

U.S. officials must understand that, deep down, India is not an ally. Its relationship to the United States is fundamentally unlike that of, say, a NATO member. And India will never aspire to that sort of alliance. For this reason, U.S. officials should not frame their agreements with India as the building blocks of a deeper relationship. The country is not a candidate for initiatives such as the AUKUS deal among Australia, the United Kingdom, and the United States (which will help Australia develop nuclear submarine technologies) because such deals entail sharing important security vulnerabilities that only sturdy liberal democracies—ones with broadly shared values and aspirations—can safely exchange. India’s uncertain commitment to democratic principles is also why Washington will never be able to share intelligence with New Delhi in the way that it does with its so-called Five Eyes partners: Australia, Canada, New Zealand, and the United Kingdom.
Riaz Haq said…
Washington and New Delhi Share Interests, Not Values
By Daniel Markey

In fact, Washington should qualify its support for greater Indian participation in the international organizations to which New Delhi already belongs. India’s voice is essential on the world stage, especially because of its vast and diverse society. But considering how often India and the United States diverge on important issues, it is not a bad thing that no one has taken up Obama’s proposal to offer India a permanent seat on the UN Security Council. Washington should similarly temper its expectations for the Quad—the Quadrilateral Security Dialogue, among Australia, India, Japan, and the United States. The White House clearly hopes that the Quad can be an Indo-Pacific league of liberal democracies. But given India’s identity, it simply cannot. What the Quad can do is better deter Chinese aggression in the region, and it should dedicate itself to that task.

As the Biden administration pivots away from seeking an imaginary relationship based on values to acknowledging a real one based on mutual interests, it must be forthright. The administration ought to explain to Indian and U.S. audiences alike that shared concerns about China and a wide array of other common interests create strong and constructive incentives for cooperation; there is much that the two sides can do together. But Washington needs to cease endorsing Modi’s BJP. It must stop altruistically subsidizing the rise of another illiberal Asian giant. And the Indian government should know that its domestic political decisions have the potential to complicate and endanger relations with Washington. Indian voters should know that, too.

The Biden administration should also write and publish more reports that accurately depict India’s record on human rights, freedoms, and democratic practices. Such analysis should then become required reading for U.S. leaders, including Pentagon policymakers and uniformed officers, who need to understand how undemocratic the world’s largest democracy is. These reports must be scrupulously accurate, because they will certainly draw fire from Indian diplomats. But Biden should not worry that U.S. criticism will derail cooperation. Unlike Chinese military activities, a critical report from the U.S. Commission on International Religious Freedom does not materially threaten New Delhi. If India and the United States are going to be strong partners, both sides need to learn how to navigate serious disagreements without sweeping them under the rug, even if that means suffering some unpleasantness along the way. U.S. officials can unapologetically explain the American perspective without being undiplomatic, just as their Indian counterparts frequently do.

Many U.S. opponents of the Modi government would go even further, arguing that criticism of India’s democratic shortcomings should be bolstered by active U.S. government initiatives—such as giving material support to Indian rights groups. Some critics have even encouraged Washington to withhold U.S. security cooperation unless India rolls back recent autocratic measures. But New Delhi is likely to balk at conditional defense ties, and pro-democracy investments will not be effective. India is almost unimaginably enormous and complicated, making it nearly impervious to outside political influence. As a postcolonial state, it is quite practiced at resisting, ignoring, or mitigating external interference. Better, then, to leave the task of strengthening India’s democracy to the Indians themselves.

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Washington and New Delhi Share Interests, Not Values
By Daniel Markey

For now, that means the United States will have to deal with an unsavory government in New Delhi. But for Washington, this is nothing new. The United States has spent years cooperating with regimes it dislikes in order to bolster its security. At one point, it even worked with the country New Delhi and Washington are now trying to outcompete. The Nixon administration’s 1972 opening to China was intended to exploit the differences between Beijing and Moscow to deliver a decisive advantage to the United States in the Cold War. It succeeded: President Richard Nixon’s gambit deepened splits in the global communist movement, helped tie down Soviet army divisions along the border with China, and provided Washington with additional leverage over Moscow.

What followed, however, is much more controversial. Nixon’s opening eventually led to a deluge of U.S. investment in China’s economy and cooperation across many sectors—including, at times, defense and security. The United States’ contributions helped China quickly become the world’s second-largest economy. Washington instead should have had a greater appreciation for the ways in which U.S. and Chinese interests would most likely diverge as China’s power grew. American policymakers could have then lowered their expectations, narrowed the scope of official cooperation, and even ruled out certain types of commerce. In hindsight, it is clear they could have partnered with Beijing to contain Moscow without contributing so much to the rise of a peer competitor.

India, of course, is not China, and it may never pose the same sort of challenge. And New Delhi’s authoritarian turn has not been total. Despite the government’s best efforts, India still has free (if not fair) elections and a vocal domestic opposition. Americans and Indians can, and should, hold out hope that India’s diverse society will remake India into a liberal democracy more fundamentally aligned with the ideals that Washington seeks to uphold.

That, however, is not where India is today. The country is instead led by an ethnonationalist who tolerates little dissent. It is in thrall to an illiberal and increasingly undemocratic party, and that party’s grip on politics is only becoming firmer. Unless that changes, the United States will not be able to treat India as it treats Japan, South Korea, and NATO allies in Europe. It must instead treat India as it treats Jordan, Vietnam, and any number of other illiberal partners. It must, in other words, cooperate with India on the reality of shared interests, not on the hope of shared values.

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India, US need to refresh ties in new world of ‘frenemies’, says Jaishankar | Latest News India

External Affairs Minister S Jaishankar on Tuesday said India and the United States will need to “refresh” ties as the old globalized world order built after 1945 gives way to an emerging arrangement marked by a “proliferation of frenemies”, friends who differ and competitors who cooperate.

The minister said the emerging order will be “multipolar” and “intensely competitive and driven by balance of power” instead of one based on “shared endeavours” and “collective security”. Competing powers will work together based on “convergence” of interests, not “congruence”.

The new era, the minister said, “calls for both India and the United States to press the refresh button of their relationship as the really important relationships in the world are the less transactional ones. They are driven by global assessments and are based on strengthening each other”.

Jaishankar did not explain what about the current state of India-US ties had prompted his call for hitting the refresh button, but he went on to express confidence in the state of the relationship.

“Recent events in our ties confirm that the deep convergences developed over the last two decades are now in full play. I am confident that a strategic appreciation of the emerging global landscape would only bring us closer.”

India’s relations with the US have been more transactional on President Donald Trump’s watch than in the past, as is true for all the other US relations.

The two sides are negotiating a trade deal to end current and outstanding issues going back by decades. They have also sought to manage competing interests regarding India’s traditional ties with Russia and Iran, one an arch-rival and the other a sworn enemy.

Jaishankar, who is highly regarded as a strategic thinker and is well known in US academia and policy circles, was speaking at the Center for Strategic and International Studies, a leading US think-tank, on “Preparing for a Different Era”, and his vision of a changing world order.

The foreign minister has had a series of think-tank events at which he has spoken expansively on all aspects of international relations with India in the middle — the US, Europe, China, the Gulf and the neighborhood. The host of one of them — not the CSIS — remarked the minister’s pronouncements could be the start of “the Jaishankar Doctrine”.
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US-India relations: A test case for the Sullivan Doctrine

One challenge is that the two countries do not agree on some key international economic issues. For example, India’s minister for power and renewable energy, Raj Kumar Singh, has criticized the Biden administration’s climate initiative, the Inflation Reduction Act, on grounds that it disadvantages developing countries that are unable to subsidize their own transition to green energy. India has also opted out of the Indo-Pacific Economic Framework’s trade pillar, which is the Biden administration’s signature trade initiative.


the council also maintains that the relationship needs to be reciprocal and that the U.S. should press Modi to adhere to democratic principles amid signs of backsliding. In this regard, it views the outcome of Modi’s visit as a litmus test for a “values-based U.S. trade policy.”

India also poses a test for how National Security Adviser Jake Sullivan’s vision of international trade might be implemented. In an April speech at the Brookings Institution, Sullivan argued that the “Washington consensus” that favored free trade and globalization should be replaced with a new consensus that “invests in the sources of our own economic and technological strength.”

For Financial Times journalist Edward Luce, however, Sullivan’s vision represents a loss of faith in economic multilateralism. He observes: “The old consensus was a positive sum game; if one country gets richer others did too. The new one is zero sum; one country’s growth comes at the expense of another’s.”

My take is that the rejection of free trade in favor of industrial policies dismisses the achievements from the mid-1980s through 2007 when globalization served as a launch pad for developing economies to emerge from poverty via export-led growth and increased foreign investment.

President Biden’s overture to Modi hopefully will mark a new phase in deepening and broadening U.S.-India relations. While India has a long-standing non-aligned status, Russia’s overtures to China should encourage India to move closer to the U.S. when U.S. multinationals seek to diversify their supply chains away from China. As The Wall Street Journal notes, big deals for jet engines and chips during Modi’s visit are a promising start.

For the ties to be enduring, however, the mutual political and economic interests of the two countries must continue to expand as India becomes more prominent globally.

Nicholas Sargen, Ph.D., is an economic consultant for Fort Washington Investment Advisors and is affiliated with the University of Virginia’s Darden School of Business. He has authored three books, including “Global Shocks: An Investment Guide for Turbulent Markets.”

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India in a world of asymmetrical multipolarity

Author: Jagannath Panda, Institute for Security and Development Policy

"India’s multipolar focus is its second pillar of diplomacy. India envisages itself as a major pole in global politics, after the United States, Russia and China. For a long time, India has been dubbed a state with enormous potential — but has remained a middle power, unable to tap into this promise"


Russia and China proclaimed the emergence of a ‘new multipolar order’ in a February 2022 joint statement at the Brazil, Russia, India, China and South Africa (BRICS) and Shanghai Cooperation Organisation (SCO) summits. Major and middle powers are also considering their own distinct outlooks in a multipolar world. In 2022, German Chancellor Olaf Scholz noted that Russian President Vladimir Putin’s invasion of Ukraine marks a turning point in global politics.

Among all the powers, India seems the most committed to a multipolar world, and has portrayed itself as a strong leader of the developing world. More importantly, India strives to shape a multipolar world that rejects great power politics and reflects today’s diversity and hinges on inclusive cooperation.

The evolution of Indian foreign policy is often seen through the prism of non-alignment to multi-alignment to pointed alignment, based on realpolitik. This is evidenced by India’s recent handling of the Russia–Ukraine war and the West versus Russia conundrum. New Delhi has adroitly projected itself as a neutral centrepiece within the China—West divide.

India’s so-far successful hedging between Russia and the United States is reminiscent of the US–China dilemma faced by most Asian states. But silent and invisible Russia–China competition presents a distinct challenge to India — Russia is India’s historical partner while China has been a constant adversary.

China’s contentious rise has propelled India’s inclusion into US-led Indo-Pacific institutional architecture. This takes shape primarily through forums such as the Quadrilateral Security Dialogue (Quad), Quad Plus and Indo-Pacific Economic Framework for Prosperity.

Fears and antagonism consolidated in 2022. China’s ‘no limits’ partnership between Moscow and Beijing — as opposed to India’s ‘principled’ Russian stance based on pure national interests — is one. Border clashes have also accelerated mistrust.

China is India’s foremost security challenge and is gradually being recognised as a permanent threat. China–India rivalry is not limited to land border disputes. It also encompasses geopolitical issues within the maritime domain. India is pursuing across-the-spectrum bilateral engagements with states that have significant stakes in Indo-Pacific stability, and is also working with trilateral, minilateral and multilateral forums.

Preserving strategic autonomy is an essential objective for New Delhi. Foreign Secretary Harsh Shringla has interpreted strategic autonomy as self-reliant thinking drawn from Indian philosophical practices and adopted this ‘Indian nature of strategic thinking’ as the first pillar of Indian diplomacy.

India’s multipolar focus is its second pillar of diplomacy. India envisages itself as a major pole in global politics, after the United States, Russia and China. For a long time, India has been dubbed a state with enormous potential — but has remained a middle power, unable to tap into this promise.

Still, India will be able to move beyond the middle power construct and close this gap with major powers. India has been gaining confidence by unapologetically forging relations to maximise its position without alienating partners and rivals alike.

Asian unity has always been central to India’s future worldview. India is working towards bringing Indo-Pacific middle powers together to achieve common developmental goals.

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Modi uses speech to Russia-China-led group to swipe at Pakistan, avoids mentioning Ukraine

India’s prime minister on Tuesday took a veiled swipe at rival neighbor Pakistan and avoided mentioning the war in Ukraine while addressing a group of Asian countries led by China and Russia

India’s prime minister on Tuesday took a veiled swipe at rival neighbor Pakistan and avoided mentioning the war in Ukraine while addressing a group of Asian countries led by China and Russia.

In his opening speech to the Shanghai Cooperation Organization, Prime Minister Narendra Modi said the group should not hesitate to criticize countries that are "using terrorism as an instrument of its state policy."

"Terrorism poses a threat to regional peace and we need to take up a joint fight,” Modi said without naming Pakistan. India regularly accuses Pakistan of training and arming insurgent groups, a charge Islamabad denies.

Russian President Vladimir Putin, Chinese President Xi Jinping and Pakistan Prime Minister Shebaz Sharif are scheduled to address the day-long virtual summit.

Modi also warned of global challenges to food, fuel and fertilizer supplies. Trade in all three has been disrupted by Russia's 14-month-long war in Ukraine, but SCO members have largely avoided direct mention of the war.

Putin is participating in his first multilateral summit since an armed rebellion rattled Russia, at one of the few international grouping in which he enjoys warm relations with most members.

For Putin, the summit presents an opportunity to show he is in control after a short-lived insurrection by Wagner mercenary chief Yevgeny Prigozhin.

The Shanghai Cooperation Organization is a security grouping founded by Russia and China to counter Western alliances from East Asia to the Indian Ocean. The group includes the four Central Asian nations of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, all former Soviet republics in which Russian influence runs deep. Pakistan became a member in 2017, and Iran, which is set to join on Tuesday. Belarus is also in line for membership.

The United Nations Secretary-General Antonio Guterres in a message to the summit that it was taking place amid growing global challenges and risks. "But at a time when the world needs to work together, divisions are growing, and geopolitical tensions are rising.”

"These differences have been aggravated by several factors: diverging approaches to global crises; contrasting views on nontraditional security threats; and, of course, the consequences of COVID-19 and Russia’s invasion of Ukraine,” he said.

This year’s event is hosted by India, which became a member in 2017. It’s the latest venue for Prime Minister Narendra Modi to showcase the country’s growing global clout.

Days after his return from a high-profile visit to the United States, India’s Prime Minister Narendra Modi on Friday had a telephone conversation with Putin about the recent developments in Russia, India’s External Affairs Ministry said.

Modi reiterated calls for dialogue and diplomacy between Russia and Ukraine, ministry spokesman Arindam Bagchi said.

India has avoided condemning Russia for its war on Ukraine and abstained from voting on U.N. resolutions against Russia.
Riaz Haq said…
The West needs to get real about India | The Strategist

The problem is that Modi’s government can only lend itself to highly qualified identification with democratic principles.

Elections in India are generally fair, and Modi’s sway is vigorously contested by the main opposition party, by Congress and by regional parties. That’s good.

However, Modi remains an unabashed Hindu supremacist whose political machine largely disregards the aspirations of Muslims and other minorities. It reacts vengefully to criticism and scores badly on most of the international indexes that measure democratic freedoms. To some, India is an illiberal democracy; to others, it’s an electoral autocracy. But, for sure, it is not a liberal democracy.

Western interests dictate that we put grunt into our relationship with India with energy and determination. It is unquestionably an increasingly important country. But we must have realistic expectations of India and deal with as it is, not as we might like it to be. Otherwise, we risk disappointment.

Riaz Haq said…
India can aim lower in its chip dreams

BENGALURU, July 5 (Reuters Breakingviews) - India’s semiconductor dreams are facing a harsh reality. After struggling to woo cutting-edge chipmakers like Taiwan Semiconductor Manufacturing (2330.TW) to set up operations in the country, the government may now have to settle for producing less-advanced chips instead. Yet that’s no mere consolation prize: the opportunity to grab share from China in this commoditised but vital part of the tech supply chain could pay off.

Prime Minister Narendra Modi wants to “usher in a new era of electronics manufacturing” by turning India into a chipmaking powerhouse. So far, the government has dangled $10 billion in subsidies but with little to show for it. Mining conglomerate Vedanta’s $19.5 billion joint venture with iPhone supplier Foxconn (2317.TW) has stalled; plans for a separate $3 billion manufacturing facility appear to be in limbo, Reuters reported in May. In a small win for the government, U.S.-based Micron Technology (MU.O) last week announced it will invest $825 million to build its first factory in India in Modi’s home state of Gujarat, though the facility will be used to test and package chips, rather than to manufacture them.

Even so, the Micron investment could pave the way for the country to move into the assembly, packaging and testing market for semiconductors, currently dominated by firms like Taiwan’s ASE Technology (3711.TW) and China's JCET (600584.SS). It’s not as lucrative as making or designing them but global sales are forecast to hit $50.9 billion by 2028, according to Zion Market Research.

An even bigger opportunity awaits in manufacturing what are known as trailing-edge semiconductors. Recently, New Delhi expanded fiscal incentives for companies to make these lower-end products in the country. It’s a far more commoditised part of the market but there’s much to play for. Analog chips, for example, are vital for electric cars and smartphones. Last year, sales grew by a fifth to $89 billion, per estimates from the Semiconductor Industry Association, outpacing growth for memory, logic and other types of chips.

The majority of the world’s trailing-edge semiconductors are currently made in Taiwan and China. So rising geopolitical tensions between Washington and Beijing, as well as worries of military conflict in Taiwan, will make India an attractive alternative for companies like U.S.-based GlobalFoundries (GFS.O) that specialise in this segment. Booming domestic demand is another factor: the Indian market is forecast to hit $64 billion by 2026, from just $23 billion in 2019.

Aiming lower could be just what India’s chip ambitions need.

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(The author is a Reuters Breakingviews columnist. The opinions expressed are his own. Refiles to add link.)

U.S. memory chip firm Micron Technology on June 28 signed a memorandum of understanding with the Indian government to build a semiconductor assembly and testing plant, its first factory in the country.

Construction for the $2.75 billion project, which includes government support, will start in August, according to Ashwini Vaishnaw, India’s minister of electronics and information technology in an interview with the Financial Times published on July 5, with production expected by the end of 2024.

Riaz Haq said…
The Illusion of a U.S.-India Partnership

by Arundhati Roy

The state visit by Prime Minister Narendra Modi of India to Washington last month was billed as a meeting of two of the world’s greatest democracies, and the countries duly declared themselves “among the closest partners in the world.” But what sort of partners will they be? What sort of partners can they be?

President Biden claims that the “defense of democracy” is the central tenet of his administration. That’s commendable, but what happened in Washington was the exact opposite. The man Americans openly fawned over has systematically undermined India’s democracy.

We needn’t be shocked by America’s choice of friends. The enchanting folks that the U.S. government has cultivated as partners include the shah of Iran, Gen. Mohammad Zia ul-Haq of Pakistan, the Afghan mujahedeen, Saddam Hussein of Iraq, a series of tin-pot dictators in South Vietnam and Gen. Augusto Pinochet of Chile. A central tenet of U.S. foreign policy has, too often, been democracy for the United States, dictatorship for its (nonwhite) friends.

Mr. Modi certainly does not belong in that rogues’ gallery. India is bigger than him. It will see him off. The question is: When? And at what cost?

India is not a dictatorship, but neither is it still a democracy. Mr. Modi heads a majoritarian, Hindu-supremacist, electoral autocracy that is tightening its grip on one of the most diverse countries in the world. This makes election season, which is just around the corner, our most dangerous time. It’s murder season, lynching season, dog whistle season. The partner that the U.S. government is cultivating and empowering is one of the most dangerous people in the world — dangerous not as a person but as someone turning the world’s most populous country into a tinderbox.

What kind of democrat is a prime minister who almost never holds a news conference? It took all of the U.S. government’s powers of persuasion (such as they are) to coax Mr. Modi into addressing one while in Washington. He agreed to take two questions, only one of them from a U.S. journalist. Sabrina Siddiqui, The Wall Street Journal’s White House reporter, stood up to ask him what his government was doing to prevent discrimination against minorities, particularly Muslims. Given the worsening abuses against Muslims and Christians in his country, it’s a question that really ought to have been raised by the White House. But the Biden administration outsourced it to a journalist. In India, we held our breath.

Mr. Modi expressed surprise that such a question should be asked at all. Then he laid out all the bromide that he had brought along in his baggage. “Democracy is our spirit. Democracy runs in our veins. We live democracy.” He added, “There’s absolutely no discrimination.” And so on.
Riaz Haq said…
The Illusion of a U.S.-India Partnership

by Arundhati Roy

In India the mainstream media and Mr. Modi’s vast fan base reacted as though he had hit the ball clean out of the park. Those who oppose him were left sorting through the debris for shreds of reassurance. (“Did you notice Biden’s body language? Totally hostile.” And so on.) I was grateful for the hypocrisy. Imagine if Mr. Modi had felt confident enough to tell the truth. Hypocrisy gives us a sort of ragged, shabby shelter. For now, it’s all we have.

Mercilessly attacked by the ruling Bharatiya Janata Party’s cheerleaders and other Hindu nationalists on Twitter, Ms. Siddiqui was accused of being a biased Pakistani Islamist hatemonger with an anti-India agenda. Those were the more polite comments.

Eventually the White House had to step up and condemn the harassment as “antithetical to the very principles of democracy.” It felt as if everything that the White House had sought to gloss over had become embarrassingly manifest.

Ms. Siddiqui may not have anticipated what she walked into. The same cannot be said of the State Department and the White House. They would have known plenty about the man for whom they were rolling out the red carpet.

They would have known about the role Mr. Modi is accused of having played in the 2002 anti-Muslim pogrom in the state of Gujarat, in which more than 1,000 Muslims were killed. They would have known about the sickening regularity with which Muslims are being publicly lynched, about the member of Mr. Modi’s cabinet who met some lynchers with garlands and about the precipitous process of Muslim segregation and ghettoization.

They would have known about the hounding of opposition politicians, students, human rights activists, lawyers and journalists, some of whom have received long prison sentences; the attacks on universities by the police and people suspected of being Hindu nationalists; the rewriting of history textbooks; the banning of films; the shutdown of Amnesty International India; the raid on the India offices of the BBC; the activists, journalists and government critics being placed on mysterious no-fly lists; and the pressure on academics, both Indian and foreign.

They would have known that India now ranks 161st out of 180 countries on the World Press Freedom Index, that many of the best Indian journalists have been hounded out of the mainstream media and that journalists could soon be subjected to a censorial regulatory regime in which a government-appointed body will have the power to decide whether media reports and commentary about the government are fake or misleading.

They would have known about the situation in Kashmir, which beginning in 2019 was subjected to a monthslong communication blackout — the longest internet shutdown in a democracy — and whose journalists suffer harassment, arrest and interrogation. Nobody in the 21st century should have to live as they do, with a boot on their throats.

They would have known about the Citizenship Amendment Act, passed in 2019, which barefacedly discriminates against Muslims; the massive protests that it touched off; and how those protests ended only after dozens of Muslims were killed the following year by Hindu mobs in Delhi (which, incidentally, took place while President Donald Trump was in town on a state visit and about which he uttered not a word).

They might also have known that at the same time they were feting Mr. Modi, Muslims were fleeing a small town in northern India after Hindu extremists affiliated with the ruling party reportedly marked Xs on their doors and told them to leave.

It’s time we retired that stupid adage about speaking truth to power. Power knows the truth far better than we do.

Riaz Haq said…
The Illusion of a U.S.-India Partnership

by Arundhati Roy

And what kind of an ally will the United States be to India in the event of a confrontation with China? The United States is far from the potential battlefield. The only price it might pay if things go badly is a bloody nose and a last helicopter ride out of the war zone as collaborators hang on to its landing skids. We need only look around our neighborhood at the fate of America’s old friends Afghanistan and Pakistan.

A bad moon is rising in the South China Sea. But for India, its friends and enemies are all wrapped up together in a tight ball of wax. We should be extremely, exceedingly, exceptionally, extraordinarily careful where we place our feet and float our boats. Everybody should.

Riaz Haq said…
#European companies suffer €100 billion hit from #Russia operations. Losses concentrated in #energy sector. #Germany is the biggest loser. #UkraineWar
Energy and utility groups have reported more than half the combined losses, according to FT analysis of direct impact of the Ukraine war

Europe’s biggest companies have suffered at least €100bn in direct losses from their operations in Russia since President Vladimir Putin’s full-scale invasion of Ukraine last year, according to analysis by the Financial Times.

A survey of 600 European groups’ annual reports and 2023 financial statements shows that 176 companies have recorded asset impairments, foreign exchange-related charges and other one-off expenses as a result of the sale, closure or reduction of Russian businesses.

The aggregate figure does not include the war’s indirect macroeconomic impacts such as higher energy and commodities costs. The war has also delivered a profit boost for oil and gas groups and defence companies.

Moscow’s decision to seize control of the Russian businesses of gas importers Fortum and Uniper in April, followed by the expropriation of Danone and Carlsberg last month, suggests more pain lies ahead, according to analysts.

More than 50 per cent of the 1,871 European-owned entities in Russia before the war are still operating in the country, according to data compiled by the Kyiv School of Economics. European companies still present in Russia include Italy’s UniCredit, Austria’s Raiffeisen, Switzerland’s Nestlé and the UK’s Unilever.

“Even if a company lost a lot of money leaving Russia, those who stay risk much bigger losses,” said Nabi Abdullaev, partner at strategic consultancy Control Risks. “It turns out that cut and run was the best strategy for companies deciding what to do at the start of the war. The faster you left, the lower your loss.”

The heaviest costs of withdrawal are concentrated in a few exposed sectors. Those with the biggest writedowns and charges are oil and gas groups, where three companies alone — BP, Shell and TotalEnergies — reported combined charges of €40.6bn. The losses were far outweighed by higher oil and gas prices, which helped these groups report bumper aggregate profits of about €95bn ($104bn) last year. Defence companies’ shares have been buoyed by the conflict.

Utilities took a direct hit of €14.7bn, while industrial companies, including carmakers, have suffered a €13.6bn blow. Financial companies including banks, insurers and investment firms, have recorded €17.5bn in writedowns and other charges.

Simon Evenett, economics professor at University of St Gallen, said: “You have a small number of companies which have taken a big hit. Once you get away from big ticket charges, the average writedown is probably fairly manageable given the limited Russian footprint.”

Looking at global investment flows into Russia, “even if Europeans were the only investors there, which they are not, the country would account for just 3.5 per cent of their total outward investments”, he said.

BP reported a $25.5bn charge, announcing three days after the invasion that it would sell its 19.75 per cent stake in state-owned oil group Rosneft.

It took TotalEnergies longer to report a total cost of $14.8bn. The French energy group has yet to write down its 20 per cent stake in the Yamal LNG project. Shell took a $4.1bn charge, while Norwegian oil and gas group Equinor and Austria’s OMV have reported €1bn and €2.5bn respectively.

German group Wintershall Dea in January said the Kremlin’s expropriation of its Russia business had wiped €2bn of cash from its bank accounts. In turn Wintershall’s owner BASF wrote down its stake in the energy explorer by €6.5bn.

Uniper, which was bailed out by the German state last year, booked €5.7bn in impairments, while Finland’s Fortum took a €5.3bn hit.

Riaz Haq said…
Ritesh Kumar Singh
Replacing a supplier from China with one in a friendly country would seem to make a supply chain more resilient to a potential China-US conflict; but it may create a false sense of security, considering that many friendly suppliers still rely on China for key inputs


Aug 18, 2023
Since the 2008 global financial crisis discredited the old liberal orthodoxy, the door has been open for simplistic policies, in part because most people tend to focus only on a policy’s first-order effects. Unfortunately, everyone will have to learn the hard way why such policies fell out of favor in the first place.

CHICAGO – Even in the best of times, policymakers find it difficult to explain complex issues to the public. But when they have the public’s trust, the ordinary citizen will say, “I know broadly what you are trying to do, so you don’t need to explain every last detail to me.” This was the case in many advanced economies before the global financial crisis, when there was a broad consensus on the direction of economic policy. While the United States placed greater emphasis on deregulation, openness, and expanding trade, the European Union was more concerned with market integration. In general, though, the liberal (in the classical British sense) orthodoxy prevailed.

So pervasive was this consensus that one of my younger colleagues at the International Monetary Fund found it hard to get a good job in academia, despite holding a PhD from MIT’s prestigious economics department, probably because her work showed that trade liberalization had slowed the rate of poverty reduction in rural India. While theoretical papers showing that freer trade could have such adverse effects were acceptable, studies that demonstrated the phenomenon empirically were met with skepticism.

The global financial crisis shattered both the prevailing consensus and the public’s trust. Clearly, the liberal orthodoxy had not worked for everyone in the US. Now-acceptable studies showed that middle-class manufacturing workers exposed to Chinese competition had been hit especially hard. “Obviously,” the accusation went, “the policymaking elites, whose friends and family were in protected service jobs, benefited from cheap imported goods and could not be trusted on trade.” In Europe, the free movement of goods, capital, services, and people within the single market were seen as serving the interests of the EU’s unelected bureaucrats in Brussels more than anyone else.
Riaz Haq said…
India may soon be forced to choose between Brics and the West

India has so far managed to stick to its non-aligned policy, but with China’s vision looking to win out in the Brics grouping, it will have to pick a side
If it chooses the West, New Delhi will stand on the wrong side of history, while Brics could benefit from the inclusion of Iran


India’s foreign policy embodies elements of the thought of Chanakya, the philosopher and statesman from 300 BC, whose realist ideals helped create the first pan-Indian empire. His interpretation of human nature often led to a pragmatic but pessimistic outlook on the state’s functioning, one in which the national interest was key.

In his Arathshastra, he elucidated his Rajamandala theory, which sheds light on India’s foreign policy. He recommended forming alliances with countries surrounding the state’s hostile neighbours and preventing them from becoming too powerful and threatening its security.

There are echoes of this approach in Indian Foreign Minister Subrahmanyam Jaishankar’s statement that, “this is a time for us to engage America, manage China, cultivate Europe, reassure Russia, bring Japan into play, draw neighbours in, extend the neighbourhood, and expand traditional constituencies of support”. He says India’s foreign policy today involves advancing its national interests by “exploiting opportunities created by global contradictions”.


The loss of India may only be a short-term concern as Iran could be a valuable replacement for the “I’ in Brics. Iran shares many of the same concerns as China and Russia as it has borne the brunt of US-led isolationist tactics. Tehran has drawn closer to Moscow and expanded defence and economic ties, making it a key stakeholder for any alternative global framework.
India faces a crucial decision in the next decade: either embrace China’s mutually beneficial approach or risk being caught in a zero-sum game orchestrated by the US. Attempting to have it both ways is not a viable long-term strategy, and following an ancient playbook will relegate it to the pages of history.
Sameed Basha is a defence and political analyst with a master’s degree in international relations from Deakin University, Australia

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