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.

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