The G20 Foreign Ministers’ Meeting And Prospects

The Foreign Ministers’ meeting at the G20 will commence on March 2^nd 2023 at New Delhi. We know that Secretary of State Anthony Blinken from the US, Foreign Minister Qin Gang of China, and Foreign Minister Sergei Lavrov of Russia are definitely coming.

All the Foreign Ministers of the G20 countries as well as those from special invited guests - Bangladesh, Egypt, Mauritius, Netherlands, Nigeria, Oman, Singapore, Spain and the UAE are also expected.

 Anthony Blinken will also participate in a scheduled QUAD Security Dialogue meeting as well as the 8th Raisina Dialogue meeting to be attended by many other countries including QUAD partner Australia represented by Foreign Minister Penny Wong.

In the latter, all four QUAD  foreign ministers are expected together  to address a panel for the first time. However, it is uncertain, even now, whether the Japanese Foreign Minister Yoshimasa Hayashi will attend the G20 and the QUAD meetings because the Japanese DIET is in session. Japanese deputy  Foreign Minister Shigeo Yamada is likely to be despatched in Hayashi’s place according to media reports.

What this suggests about Japanese enthusiasm for the India hosted G20 and QUAD meetings diplomatically, despite close relations between Prime Minister Narendra Modi and the late Prime Minister Shinzo Abe as well as present Japanese Prime Minister Fumio Kishida, is at present a bit of a mystery.

It also raises questions, should Hayashi not attend, on the momentum of Indo-Japanese military cooperation in the light of Chinese aggression. Japan has recently met with China for security discussions for the first time in four years. China is concerned about Japanese pacifist policy changes and an ongoing military build-up. Japan has earlier announced in December 2022 its decision to collaborate with a pair of European nations, for the first time, namely the UK and Italy, for the development of a new fighter jet to enter service in the Japanese Airforce by the mid 2030s, that will, amongst other things, use Artificial Intelligence.

The Russian Foreign Minister, the veteran Sergei Lavrov, will attend the Foreign Ministers’ Meet at the G20 in New Delhi. The production of T 90 tanks, Sukhoi 30 MKI fighter jets, AK-203 assault rifles and other weapon systems and collaborations with Russia are in full compliance with India’s ‘Make in India’ policy thrust. India’s extensive cooperation with Russia is ongoing on multipole fronts.

The Finance Ministers’ Meeting ended without a joint statement, making do with a ‘Chairman’s outcome statement’ as India is not willing to condemn or censure Russia for the Russo-Ukraine War, and the same thing is likely to happen at the end of the Foreign Ministers’ meeting on March 3^rd.

Chinese Foreign Minister Qin Gang will mark his first visit to India after taking over from long standing former foreign minister Wang Yi. Though bilateral business between the two countries, particularly by way of Indian imports from China, have grown substantially, other areas of cooperation are frozen because of the deadlock over the tensions on the LaC since 2020.

 China would like to compartmentalise the disagreements on the LaC despite the skirmishes that have broken out and the major troop deployments and infrastructure build up on both sides. India however has made it clear to former Foreign Minister Wang Yi that it cannot be business as usual till the LaC tensions are resolved.

However, both China and India have been neutral to supportive of Russia despite considerable Western pressure. China has taken the initiative, possibly underlining its position as the No. 2 power in the world.

It has recently advanced a peace proposal to end the war in Ukraine that has evinced interest in both Moscow and Kiev, (with  Volodymir Zelenskyy proposing to go to China to meet President Xi Jinping on the proposals), but not so far, in Washington.

America sees the Chinese peace proposal as tilted in favour of Russia, presumably the ceding of considerable Ukrainian territory to Russia, even as the war has entered its second year as of February 24^th 2023.

That the QUAD meeting will follow soon after the Foreign Ministers’ Meeting in New Delhi is probably another irritant from China’s point of view, but not enough for it to stay away. China’s full participation in the G20 Foreign Ministers’ Meeting is a very positive gesture for an increasingly multilateral world. It is also a desire on its part not to be isolated and viewed as an absolute ally of Russia in a new Cold War 2.0.

The Ukraine-Russian War, it is clear, will cast a shadow over the entire G20 Summit deliberations in India. In session after session under India’s chairmanship the matter will crop up, even as India will try to make progress on consensus areas. These include Climate and Clean Energy, reform of the multilateral lending agencies, greater responsiveness to the needs of the large number of countries in the so-called Global South. India has repeatedly indicated its willingness to mediate and assist in the resolving of the Russo-Ukranian War if called upon to do so.

The G20 members together represent some 85% of global GDP, over 75% of the global trade, and 66% of the world population. In theory, they should collectively be a force for change in the world and the elimination of conflicts. But if they stay a house divided that is not possible.

The member countries include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, The UK, and the USA. It is remarkable however that many countries outside the G20 and some within it, the developing world, have refused to take sides in the Russo-Ukranian War.

It is unlikely therefore whether India will permit the Ukranian Foreign Minister Dmitry Kueba to address the gathering via a video link. The West of course, could well be pushing for it.

There could increasingly be Western media commentary suggesting that the Indian Chairmanship of the G20 is failing because of its stance on Russia. Pressure has come with the recent visits of American Treasury Secretary Janet Yellen who went on to visit Kiev as well in the wake of the Biden visit, and German Chancellor Olaf Schultz who tried to shift India’s diplomatic stance in favour of the West as well.

However, there is a growing admiration and support for India’s principled neutrality from many of the countries not captured ideologically by the Western camp. They are more focussed on the strong likelihood of India attaining the status of the third largest major economy in the world by 2027-2028. This is within this decade itself, as Columbia Professor Arvind Panagariya recently put it.

For Foreign Minister Subramanyam Jaishankar and Prime Minister Narendra Modi, this G20 Chairmanship will be a tight-rope walk through which good relations will have to be maintained with both the West and Russia. This via a consensus-based approach with multiple countries, both in the G20 and beyond. Recent humanitarian work done in Turkey will go some distance in blunting criticism for ‘Hindu Nationalist India’ from Turkey and the OIC.

In an increasingly multipolar world, troubled by high oil prices, food shortages, inflation, low growth, high debt, it is important to proceed on the basis of common ground rather than harp on differences. This may not satisfy on all parameters, but would deliver pragmatic, workable outcomes. India’s endeavour during this Foreign Ministers’ Meeting and indeed throughout this year, will be focussed on such practicalities.

(1,235 words)

February 28^th, 2023

For: Firstpost/News18.com

Gautam Mukherjee

 

Great Budget For Capital Expenditure And Railways, Not Bad For Direct Taxes

Finance Minister Nirmala Sitharaman began her speech by calling this budget the first one in Amritkaal. The reference, and indeed the implicit branding, is towards the next 25 years, during which India is expected to change for the better beyond recognition.  India will become an $20 trillion economy over the period, with a reasonable per capita income as well.

A symbol in a budget initiative illustrates the point. India is going to give a big thrust to the R&D for laboratory grown diamonds which are otherwise indistinguishable from natural diamonds, except for massive cost advantages. In fact, many customers are sold these laboratory made diamonds abroad at the full price of equivalently sized natural diamonds. At present heaps of them are willy-nilly imported for processing in India, before being largely reexported. So, to grow them ourselves, will be a great boon. This is one new initiative that certainly went down very well in Surat.

For long there has been a school of thought that called for a doing away with  the thicket of exemptions in direct taxes. Last year, in response to this, the government offered a dual option. The old scheme with its various tax savings schemes, and another, with a lower taxation rate but no exemptions.

Unfortunately, there were few takers for the new scheme, because one could pay less taxes by using the various exemptions in the old scheme. This year, presumably to revive the new scheme, the Finance Minister Nirmala Sitharaman has sweetened it. This has been done to reduce, if not do away with the beneficial arbitrage aspects of the old scheme versus the new. The detailed calculations will have to be done, but if the new scheme is the more attractive now, it kills two birds with one stone. There will be less complicated tax calculations involved in using the exemptions, and actually lower tax liabilities just by going in for the new scheme. This works as long as the tax rates are not raised again in subsequent years.

On the face of it, the salaried middle class is very pleased.  The Finance Minister even reduced the surcharge on the highest slab to attract more of the well-heeled users.

Likewise, the stock market, that went up steadily during the minister’s speech, and stayed up after it ended. It got nothing, but at least there were no nasty surprises.

Cigarettes taxes have gone up 16%, but taxes on apparel, somewhat inexplicably, have also gone up.

The first half hour of the Finance Minister’s speech was concerned with the poorest of the poor, with a flurry of incentives and outreach efforts. There is an effort to encourage women in the rural workforce to increase their social security. Digitisation in agriculture, crop improvement initiatives with public- private cooperation, were spoken of. Millet production and popularisation is to receive a thrust. Fisheries and animal husbandry were also favoured, alongside more schemes for tribal people, particularly the most backward and vulnerable amongst them. The government will promote greater R&D in agriculture. Mangroves and wet lands are to be nurtured. Storage facilities are to be greatly enhanced for agriculture. However, there was no mention of the Blue Water Economy.

There is a careful consideration of the green economy to reduce India’s carbon footprint, in context of its its problematic dependence on fuel imports. Alternative fertilizers will be promoted, 10,000 bio-input resource centres will be developed.

There was a special mention of R&D for the pharmaceutical sector also.

There will be more nursing colleges, as many as 157 new ones. Digital and physical libraries for children. Mechanical cleaning of sewers and desludging- an absolute requirement for any civilised country.

Hydrogen production as an alternative clean fuel got an allocation of Rs. 19,700 crores. This is not a large sum as yet, but this initiative has great potential in a country that imports 80% of its petroleum. Unlike the thrust for electric vehicles alongside, which leaves a problem of a mountain of very large, and hard to dispose of spent lithium batteries. Hydrogen as a fuel can be indigenously developed, the green version is actually not too expensive to produce, and it does not have any residual waste problems.

There are moves towards youth empowerment. It is mentioned as one of the seven leading principles of Amritkaal, called the Saptarishis. There will be projects in coding, Artificial Intelligence, Robotics, 3 D printing introduced.

There is to be enhanced health infrastructure, and a mission for the elimination of Sickle Cell Anaemia.

There is to be a revamped Teacher’s Training Programme.

The entire budget is seeded with new ideas, even as old initiatives like the earlier Yojanas are strengthened. However, mention of some critical areas such as major defence manufacturing were not spoken of at all.

The boldest step in Budget 2023 is the enhancement of the capital expenditure budget to Rs. 10 lakh crores from Rs. 7.5 lakh crore. This represents 3.3 % of GDP, and is aimed at a faster development of infrastructure. The Indian Railways will receive a separate Rs. 2.40 lakh crores which will not only help modernise and grow the railways with new tracks, but turn it into a net revenue earner for the government,. This railway budget is nine times higher than the outlay in 2013-14.

Both these commendable allocations should go a long way towards reducing Indian logistic costs, a bugbear for international competitiveness in a season when we are trying hard to attract foreign manufacturers to relocate from China. The aim is to reduce logistics costs from the present 14%, to 9%.

There was no mention of the PLI schemes either in the minister’s speech. An exciting idea, not much elaborated on, is the thrust towards manufacturing one product per district of the country, largely expected to give a boost to handicrafts production and local employment. We shall have to see how the implementation turns out. Data storage centres too were highlighted.

Identifying the PAN card  for more than a direct tax identification device may turn out interesting for the millions who actually do not have one, particularly in the rural tax-exempt areas.

Tourism in India is always on the anvil for boosting, and this budget was no exception. Whether the development of as many as 50 new sites will be done with enough panache to attract new domestic and foreign tourists, remains to be seen.

However, religious tourism into Varanasi has proved very successful. More people went to Kashi than they did to Goa over the last year. Therefore Ayodhya should be a block-buster once the Ram Temple is built along with all the spanking new infrastructure there all around the city.

For an election year budget, even the last one before the general elections next year, it maintained its business as usual sangfroid while pointing out that tax collections were up and the economy was doing well. It was, as if,  the Modi government does not need to go in for populism even though the cost of living has gone up significantly with all everyday household products up by between Rs. 10 and Rs. 20. Compared to the rest of the world this is not a lot, but its nothing to be happy about. It remains to be seen how these price rises will affect the voting in nine assembly elections this year for a start.

(1,222 words)

February 1^st, 2023

For: Firstpost/News18.com

Gautam Mukherjee

 

Expectations From Union Budget 2023: The Great Leap Forward

As an annual accounting exercise for the nation, the Union Budget has been a fairly prosaic thing with incremental steps, underlined, almost always, by a constraint from the resources available. Even then, it is not as if, the occasional budget such as P Chidambaram’s ‘Dream Budget’ of 1997, with its emphasis on lower taxes and the Laffer Curve that expected lower taxes to furnish bigger yields, did not happen.

After 1991, and the era of liberalisation, the breaking away from the Licence-Permit Raj, it was in a way expected.

The last year’s budget for FY23 speeded things up considerably, when capital expenditure for infrastructure development was enhanced 24% to Rs. 7.5 trillion, more than double what it was in FY20. It will no doubt be enhanced to at least Rs. 10 trillion for FY24, which represents about 3% of GDP. This more so because this budget has been spent at a rate 63% greater in the first eight months of this fiscal up to November 2022, at Rs. 4.47 trillion. Infrastructure development is something of a hallmark of the BJP/NDA government.

 But now, as the nation reaches out to Amritkaal over the next 25 years, bolder steps and an even quicker pace are called for.

The nation must lay the groundwork for huge resource mobilisation, not just via sovereign borrowing, but massive private sector investment from home and abroad. This means the India story, with its huge domestic market and large work-force, must turn even more attractive. The paradigm shift called for is for this Amritkaal vision to drive the Union Budget, rather than a constant worry about deficits going out of control.

We may not meet the fiscal deficit target of 5-4.5% of GDP for a couple of years more, but if the extra money is spent in a worthwhile manner, this will not matter. Particularly since most development commitments are paid out in tranches over several years.

This could be the last full union budget to be presented by the incumbent Modi government. Next year, 2024, it is likely to be a vote-on-account to service the government’s liabilities, till a new government is sworn in. But, like 2019, the Modi government, in its confidence, may choose to submit a full budget in 2024 as well, with the proviso that large portions of it must be voted into effect after the new government takes charge.

As before in 2019, the new government too is likely to be a BJP/NDA government once more, giving them a consecutive three terms. The Opposition at present, disunited, disparate, under-funded, at loggerheads with the electorate, does not seem capable of mounting a serious challenge. This state of affairs must be calculated into budget 2023 and 2024.

For 2023 what should we expect? There may be some easing of direct taxation norms to please the salary earning middle class as the nation goes into 9 assembly elections before the general election in 2024. Likewise enhancements in rural spending to revive demand, and a slew of populist welfare measures to blunt the opposition tendency to offer freebies.

GST collections have been growing, and is expected to top Rs. 273 trillion in this fiscal against an earlier estimate of some Rs. 237 trillion. GDP too is growing at about 7% year-on-year and is expected to do so for a decade to come.

Any election year duo of budgets for 2023 and 2024, must work in the prospect of higher revenue collections and growth in GDP to deliver both immediate and longer-term benefits.

There may be some incentivisation of existing business and industry by way of tax reliefs, with a much greater incentive for expansion into new areas and greenfield joint ventures with foreign entities. This might be incremental and not really the bold moves called for.

With the government’s massive spending plans on infrastructure, defence, civic services, healthcare, education, and welfare, many are expecting the current account deficit to be let slip by 0.5%. Based on projected revenue and GDP growth, India can certainly afford it.

 Where should India enhance its budgets- certainly in defence manufacturing and procurement with an effort at keeping the money in country as much as possible. Accordingly, the amount set aside for domestic defence procurement in 2022 is 68% of the defence services capital acquisition budget of Rs. 1.24 lakh crore. To encourage private sector participation from the likes of L&T, Mahindra and Tata, certain dockyards and so forth, some 25% of the domestic procurement budget, or Rs. 21, 149 crore, has been earmarked for them.  Policy wise, these are good steps, but the sums involved are much too modest.

This defence acquisition budget of 1.24 lakh crores is itself all too paltry for our needs, both in terms of domestic capacity enhancement, and export ambitions. 68% may sound impressive as a domestic manufacture figure, but the pie is much too small, and then there is just a small amount going to the private sector. It is not incentive enough for domestic armaments manufacture to take off substantially as required. That is why it takes us so long to manufacture a single Tejas jet at HAL for example. It has near cottage industry capacity.

We have long been first or second in defence purchases in the world, fattening the purse of the Russians, French and Americans while being hamstrung for spare parts and ammunition. And indeed hard pressed to get them to stick to agreed prices, purchase, and post-purchase commitments.

Relatively, things have improved dramatically compared to a near non-acquisition for some quarter of a century, citing paucity of funds. This deeply compromised our national security and emboldened our enemies.

Today we have revamped ammunition production domestically and emergency purchased armaments to plug a lot of yawning gaps, but we still have a long way to go to develop a proper deterrent capacity.   

The fact that in the Republic Day parade 2023 the government chose to only display Made in India weaponry emphasised the change in our strategic thinking.

But the defence procurement budget should be more like Rs. 5 trillion with a 10% increase year-on-year. The percentages of domestic and foreign procurement may well be narrowed further as a consequence. Our latest commissioned submarine has a lot of India made parts. So does our aircraft carrier.

This is the only way we can create a formidable deterrent, and grow an export market in weapons to rival the vastly more expensive and sometimes not as innovative offers from the West and Russia. Our indigenous light combat helicopter and the recently commissioned Prachanda helicopters can operate with full weapon loads at 18,000 feet, unlike any of the imported helicopters even from the US.

Israel is a very useful joint venture partner and a fund of information on how to get the domestic armaments industry going as well. The 30 centres of excellence in various states that India has developed with Israel in the development of crops for semi-arid regions and advanced agricultural techniques, is a step already in the works.

No country that will be No.3 economically by 2028 can afford to be begging the big Western manufacturers for high technology weapons.

Next, we need a brand new, state-of-the-art and well-funded department of Research & Development, for defence- with much bigger budgets for DRDO, industry, manufacturing, construction, pharmaceuticals, agriculture, perhaps even a fresh ministry to look after it. DRDO now boldly says it can develop all sorts of engines for aircraft and ships. It has just supplied the propulsion system for the new Kalavari class submarine. A few years ago it was thought to be incapable. What is its future with political encouragement and lavish budgets?

This emphasis on R&D is essential as India aspires to become the new manufacturing hub of the world, as well as develop its own technology breakthroughs via its heavy industry, electronics, software and the world’s largest number of Unicorns and Start-ups. Artificial Intelligence, fighter, payload carrier and passenger drones, breakthroughs in alternative energy deployment, could all result in short order.

The pharmaceutical industry, expected to grow to $ 130 billion by 2030, particularly in generics, needs a major injection of funds and incentives to truly emerge as an unchallenged pharmacy to the world. This, with a wide range of life savings, drugs, medicines and vaccines. Our internal checks and balances and quality standard maintaining procedures must be made fool -proof if we are going to take on the global pharma industry- and avoid black marks such as the recent cough mixture controversies.

What is already being done to modernise and develop infrastructure, roads, ports, tunnels, dams must continue at a fast pace. The Indian Railways is being made financially viable and changed beyond recognition from its 19^th and 20^th century versions. The multiplying city Metro systems are renewing travel in logjammed cities. The long sea bridges, near sea coast transport including RO-RO ships, riverine transport at a fraction of the cost, all this must continue surging ahead, and not suffer any paucity of funds. This is the big push to reduce logistic costs from a high of 14% to less than 9%. It sets up a virtuous cycle for industry and attracts more and more foreign investment. The government seems well seized of this.

The commendable launch of an indigenous 5G system and burgeoning digitisation must continue apace. This is conjunct on India’s space programme because it will be satellites that will now connect the remotest parts of the country rather than terrestrial towers alone. The Spacex satellite system that has provided Ukraine its communications during this war are a great illustrator of what is possible. Of course, with India’s sheer numbers, unit costs soon become manageable and commercially viable.

 The new Indian operating system to rival Android and the IOS platforms is an exciting development and must be backed with sufficient funds. It is said to be superior to IOS and Android but that needs to be proved on the ground as soon as possible.

The various PLI schemes expected to attract investment of Rs. 4 lakh crores must be vastly enhanced. Since its introduction in 2020 it has done much to galvanise 14 sectors of industry it applies to. India put out Rs. 2.5 trillion, which, in turn, is expected to add almost one percentage point to GDP per annum, and create 4 million plus new jobs. But the window of opportunity will not stay open for long. China is weak now. We should increase the PLI scheme to Rs. 5 trillion as well. It could attract as much as Rs. 10 lakh crores in investment at this time. We would be flattening the uneven field to compete with rivals trying to attract the China manufacturing ‘refugees’ at this time.

India will want to encourage more and more foreign entities to set up manufacturing here, not only for the exciting semi-conductor industry, but for every other company in any field that wants to relocate from China or elsewhere. This surge of manufacturing activity will grow our export markets exponentially, strengthen our currency to a desirable stability, and provide millions of new jobs backed by a much improved logistics infrastructure.

Budget 2023 must lay strong foundations and glide paths for Amritkaal even as it looks and feels like an election year budget.

(1876 words)

January 26^th, 2023

For: Firstpost/News18.com

Gautam Mukherjee

 

Pharmaceutical Giant Pfizer Was Surprised By Indian Audacity At Refusing Indemnity To Its Expensive But Inferior Covid Vaccines

Red China is in the throes of an impossible Covid situation, persisting in 2023, as the Chinese New Year is being celebrated. It is an unstoppable movement of millions to meet with family, and go on holiday, mostly to Thailand, where Chinese are being let in with minimal restrictions.

Complete lockdown of entire cities, ruinous economically, have not prevented the infection of most of the population, with Covid variants. And deaths in their millions. The problem, even three years after it all began, is a flawed and ineffective Chinese-made vaccine, and a vaccination policy that concentrated on China’s armed forces and the young. Coverage was low, sporadic, never in excess of 30% of the population. The Chinese vaccine, exported to island idyll The Seychelles, where the Chinese have garnered influence, resulted in almost the entire population being infected.

India’s example in contrast, is nothing short of a golden beacon for friend and foe alike.

But recent remembrances were catalysed by the ongoing conference at Davos, with the Pfizer CEO refusing to answer questions on its lousy vaccine, as well as a tweet from Indian Union Minister of State for Skill Development and Entrepreneurship, Rajeev Chandrashekhar. The latter pointed at a thick-skinned trio of misinformation peddlers. They are vociferous Congress cheerleaders, including crafty senior lawyer Chidambaram, still facing various criminal cases, the vacuous Rahul Gandhi, also out on bail on financial irregularity cases, along with his mother Sonia Gandhi, and no-holds-barred amplifier cum His Master’s Voice, the impractical and Leftist Jayaram Ramesh.

All three bayed loudly for the importation of unproven Western foreign vaccines at the height of the pandemic, and cast doubt on the effectiveness of Indian vaccines being manufactured and disseminated at the time.

Pfizer, now much criticised globally, initially claimed more than 80% efficacy for its vaccine, quite fraudulently, just to boost sales. But it knew the truth internally, and therefore asked for indemnity against the vaccine’s ineffectiveness from India, which fortunately was not granted.

Later, on examination it was found, that the Pfizer vaccine had only 12% efficacy, and did not prevent transmission. Millions around the world were cheated and bodily harmed. In India, those who think ‘West is Best’ used Pfizer vaccines too, paying through their nose for vaccines that did not work.

The Indian fifth column, true to form, wanted to do everything in their power to derail the Indian response to the pandemic. Their prime agenda was to discredit the Modi government by hook or by crook. India’s home-grown vaccine, Covaxin, had 77% efficacy, and was provided to most people completely free-of-charge.

In addition, millions of doses were donated to other countries abroad and exported to the West. The Astra Zeneca vaccine, Covishield, also provided free to many, made under licence in India, had similar levels of effectiveness. Boris Johnson, then prime minister of the UK, was administered Covishield from India, and made a complete recovery.

India vaccinated over a billion of its own people using made-in-India Covid vaccines, and created herd immunity amongst a massive population of 1.4 billion. This is serving us in good stead today.

For an emerging economy born out of centuries of colonial domination by the British, followed by a spiteful British instigated partition that killed more than half a million people, displacing and beggaring millions more - getting a raw deal has become routine, almost as if it is fated.

Initially, it was expected, because of our hopelessly anglophile leadership, but persisted for decades after independence, because of continued Indian post-colonial attitudes of servitude and lack of confidence.

In fairly recent times also, unequal treaties have been the bane of a weak and politically fragmented coalition government in India. The most humiliating in recent memory, was the hard fought for but blighted nuclear power deal. Prime Minister Manmohan Singh, ever the installed puppet, made a success of the nuclear power deal, with the out-of-the-way help provided by the Republican US President George W Bush. But the blockers who hate India making progress found another way. They asked for an indemnity against liability for any nuclear accidents for the reactors the American supplied. The French followed suit. This bogged it down, and the only nuclear reactors commisioned at Kudankulam I and now 2, are those supplied by old reliable Russia.  They are also India’s biggest reactors. India and Russia are planning to go ahead with Kudankulam 3 and 4 as well.

Of course, the American NGO universe riled up the locals to delay both reactors commissioned in 2013 and 2016 by several years. They had done likewise to retard the progress of the Narbada Dam that has fed water to large dry areas, by quite a few years too.

The fact that emerging economy India is now a middle-income economy at No.5 in GDP in the world amongst major economies, is leading to a lot of discomfort not just amongst enemy countries like China and Pakistan, but the G-7 countries of the West too. Combined with a markedly nationalist tone in the conduct of trade, foreign affairs, and defence today, it is giving the erstwhile colonial powers the jitters.

We have vastly increased our petroleum imports from Russia, fighting its war with the West, NATO, EU and Ukraine. This independent line taken that has greatly suited Indian interests is infuriating to the West. It realises that as long as the Hindu nationalist government succeeds in retaining the confidence of the Indian people, they cannot dominate our policies to suit themselves. As a consequence, the latest salvo is aimed directly at Prime Minister Narendra Modi by the UK government owned BBC. The national broadcaster has used discredited and unproven innuendo to paint Modi as a communalist, responsible for the Godhra Riots of 2002. The purpose of dredging up the topic from twenty years ago is to influence the forthcoming assembly elections of 2023, and the general elections of 2024, against the BJP.

The reaction on the ground to BBC’s scurrilous propaganda has been sharp and prompt, and is likely to consolidate the BJP vote further. Further efforts of this order from the West bent on maligning and taming the present government in India cannot be ruled out.

However, at the same time, it is being recognised by the World Bank, the IMF and others, that India will become the No.3 economy by 2028, if the BJP wins another majority in 2024. So, the West, led by America, is keen on ostensibly allying with India, particularly in the QUAD, AUKUS, G-20 and other fora, both to contain China, and recognise the inevitable rise of a power whose time has come. Other alliances such as the I2U2 are also full of promise.

Middling powers such as Britain, burning with post-colonial envy, is setting about it all wrong if it wants to sign an FTA with India in the near future. Not only does India have options, it is quite willing to exercise them to its benefit.

Making up lies about India may be all that countries like China, Pakistan, Turkey, and indeed their fifth column supporters in-country are left with. But such shenanigans will neither unseat a highly popular government, nor provide any succour in the coming general elections. The visible progress that India is making on multiple fronts is a matter of pride for its citizens, and the Opposition are looking more and more like dangerous anti-national dissidents. Dissidents being aided and abetted by those forces who don’t want to see India grow and prosper. It is a back-handed compliment that we could well do without.

(1,255 words)

January 20^th, 2023

For: Firstpost/News18.com

Gautam Mukherjee

 

Prime Minister Narendra Modi Is India’s Deng Xiaoping And Has Been Thus Inspired From The 1980s

Prime Minister Narendra Modi has been Chief Minister in Gujarat from soon after the dawn of the millennium in 2001. He was installed in the hot seat by the BJP party leadership including Prime Minister AB Vajpayee and Home Minister LK Advani, after a spell of some years in New Delhi as an assistant, an RSS Pracharak, and sometimes, an arresting TV commentator.

Of course, Narendra Modi has been an RSS Pracharak, winding his way through the dusty roads of Gujarat, and even in many places abroad, while on tour with his modest jhola, since before the Emergency, and at least the 1980s.

His ideas on development formed in those early years when not in power. He was not just spiritually inspired by Swami Vivekananda and others, but often wondered why a country with the calibre of its great men through the ages and recent times was not progressing as much as might have been hoped. Speeches he made in the eighties at RSS gatherings, that have survived, have made this clear.

In Gujarat, he was at the helm for fifteen years continuously, leading a majority BJP government.  During these years, he pulled close ideologically to the Deng Xiaoping model of development, its immense talent at manufacturing in China, which he sought to replicate in Gujarat. He was also drawn to the discipline and aesthetics of Japan. He met his friend and like-minded leader Shinzo Abe, during these years at the helm in Gujarat. There were regular Gujarat based development jamborees to which many foreign entities came.

Of course, some of his efforts were stymied and marred because he was perceived as a major threat by the UPA government.  Chief Minister Modi and his Home Minister Amit Shah were constantly put under pressure by the Centre, branded as Hindu communalists, and everything possible was done to tarnish their reputation. This even stretched to requesting foreign governments, including the US, to not even grant Modi a visit visa!

Modi’s innings in Gujarat did get off to a stormy start with the infamous Godhra riots in Ahmedabad in 2002. However, the people of Gujarat stood by his leadership, as they still do as prime minister, and gave him an uninterrupted three terms. Modi transformed Gujarat, his home state, into one of the most prosperous and developed states of the Indian Union in this time. There were no more communal riots in Gujarat after Godhra at all, and they have not returned even after Modi personally moved to New Delhi as prime minister in 2014, with Amit Shah in tow.

Modi’s imprint on the administration of Gujarat was so deep, and his continued nurture of the state so attentive, that the BJP has retained the state without interruption in the eight years since, winning yet another five-year term recently.

Today, Prime Minister Narendra Modi’s great emphasis on modernisation and infrastructural development continues at great speed. He seems singularly determined to transform India into a developed state, certainly in the top three of all major economies, but also into a major pilar of a multipolar world that is emerging in geopolitics.

Deng Xiaoping could only come back into contention after the end of the Mao Zedong era, and used 30 years of double-digit growth and exports to the US and the West to propel China into the No.2 slot. That Xi Jinping, now in his third-term in power, is increasingly trying to bring back the Mao era, replete with disastrous economic notions and hard imperialistic tendencies, does not bode well for the CCP, and the future of China under its leadership. It could even bring Communism in China down before very long.

This current state of affairs in China, including the resentments worldwide caused by the Covid pandemic perceived to have originated in, and still perpetuated by China, is seen as an economic opportunity by Modi’s India.

The BJP has always sought to steer a path between Socialism embraced by the earlier dispensation, and Capitalism, as in the private sector. A Welfare Statism, aimed at the bottom of the pyramid, has been in place in the Central Government, but alongside huge expenditure on infrastructure, to encourage entrepreneurship and manufacturing.

Now, the time has finally come to see manufacturing growing to claim more than 30 per cent of the economy, or more, up from about 25% now. This is expected to manifest via multiple fields, including electronics, automobiles, the digital revolution, space, the blue economy, alternative energy, defence manufacturing, semiconductors. A page, if you like, out of the Gujarat development book, that saw a higher growth rate for over a decade than the national average, with greater productivity, and indeed that of Deng Xiaoping’s keep your head down but work hard economics.  

As a democracy, introducing the GST regime, the bankruptcy law, demonetisation to reduce the influence of the cash economy, widespread digitisation of the financial and credit systems, amongst other initiatives such as the administration of the richest cricket club in the world- the BCCI, and even the ICC for a spell, have also contributed immensely.

Privatisation has been a bumpy road so far, though unloading Air India to an eager Tata has been a stellar accomplishment, because the government just ran it into the ground with ongoing and massive losses.

Modi had no occasion to try privatisation in Gujarat. It is, overall, much simpler to run one’s home state. At the Centre, to find buyers willing to pay fair value for badly-managed government assets is problematic, both politically and economically. Asset strippers are readily available, but not nurturing entrepreneurs, willing to take on largely unproductive government employees, and superannuated assets, besides the land and buildings.

However, the three Gujarati stalwarts, Ambani, Adani, and Tata, have been of the greatest assistance in moving into high investment infrastructure areas such as ports, airports, power, as well as in acquiring struggling businesses. Others, such as L&T, Mahindra, and Tata again, are now prominent in defence manufacturing too.

While India is broadly in favour of globalisation and free trade, the Modi government has placed national self-interest stage centre in the mix. It wants reciprocity and mutual advantage, or it tends to lean towards aatmanirbharta.

In a sense, both the tendencies of the RSS/BJP economic thought that favour globalisation on the one hand, and protectionism on the other, are being served via the prism of national self-interest.

Other thorns such as the failure of the Farm Laws in the face of stout opposition from vested interests; when to go in for genetically modified seeds for bumper crops at a cost; labour reform, and land acquisition difficulties, keep Modi’s India shackled to its feudal/socialist past to a significant degree. And this despite two majority governments at the Centre, that might become three in 2024.  

In reaction, the Opposition becomes more rigid in its cling to obsolete socialist dogma, but mainly because it does not want to be obliterated altogether.

All in all, a 7% odd growth in nominal GDP rates year-on-year, expected for the next ten at least, suggests the mixture of policies adopted by the BJP government with no hard-line ideological moorings works quite well. It is not only the fastest rate of growth in any major economy in the world, but is proving consistent in the post Covid scenario.

Modi’s own instincts to take over the world’s manufacturing and supply chains from China, including the raw materials and components, have to work alongside our democracy and historical baggage. However, India is not threatening in the perception of foreign investors. It is stable, and has the largest intelligent and young work-force in the world. Most understand the global lingua franca English, and can be readily skilled.  

Circumstances and contours are different from when China was inducted into the Western geopolitical matrix in the 1970s. Mao Zedong and Nixon may have agreed to cooperate, partially to bring the Soviet Union down, but it was Deng Xiaoping, domestically exiled under Mao, who could bring the promise to flower and fruit.

Likewise, a man of destiny in the shape and form of Prime Minister Narendra Modi is not only making a reality of his early vision, but opening the gates wide to the Amritkaal he often speaks of, this time, for the country.  

(1,372 words)

January 10^th, 2023

For: Firstpost/News18.com

Gautam Mukherjee

 

The Indian Economy In 2022 And What Can We Look Forward To In 2023

As the year 2022 draws to a close, the most notable achievement for the Indian economy was that it overtook that of the United Kingdom in GDP terms. And this, in the very first quarter of FY 2022-2023. This made it the 5^th largest economy in the world, on its way towards $ 4 trillion in GDP before long.

The feeling of continuum is a key feature of the Indian economy in 2022 and going forward. The days of abrupt changes in policy that were seen to be disruptive have ended with the departure of coalition governments, as of 2014, and are unlikely to return, even post the general elections of 2024. This is crucial for India’s economic outlook. Without continuity, all bets are off.

By 2028, India is expected, by a number of international lending and rating agencies, to reach the No.3 slot, having overtaken both Germany and Japan. It will then be behind only the US at No.1 and China at No.2. This is on nominal GDP terms, though India is very well placed already, at No.3 in purchase power parity (PPP) terms.

This PPP also helps India’s vast population of 1.40 billion and climbing, because the low per capita income of Rs. 1.5 lakhs in 2022, still buys quite a lot in comparison. Two earning members from a family at the bottom of the pyramid can still pull in Rs. 3 lakhs per annum.

A ‘developed’ country like Britain, in contrast, with per capita in the region of $ 46,510.30 in 2021, has its common people in difficulty to meet basic food and energy costs at present.

One of the reasons for 2022 doing so well for us, is India’s excellent and quick bounce back from the Covid pandemic.  Its handling of the Covid pandemic by inoculating over a billion people, mostly free-of-cost, and at a fast pace, with at least one highly effective home-grown vaccine, was nothing less than spectacular.

The other was the Astra Zeneca licensed vaccine, which has also performed very well. Both have demonstrated an efficacy of over 75%. No other country can claim such dramatic success with consequent low loss of life, even though most developed countries have vast budgets and very small populations. India has also shipped Covid vaccines free of cost to a number of countries that requested them along with other medicines.

This clear staking out of India’s position as ‘pharmacy to the world’ over the period 2020 to end 2021, gave it immense global stature, particularly amongst the ‘Global South’. This benign and beneficial stature, will not be forgotten as it goes into 2023 as the Chair of the G-20 Summit. Nearly 30 countries will participate including some 10 invitees. How 2024 turns out will have a lot to do with agreements arrived at with the G 20 participants.

However, India did not make much money from medicines, nor does         it intend to profiteer in future, because its largely generic drugs are not high-priced, even as they pose a long-term commercial threat to the Western pharmacological industry. Consequently, there is a fair amount of malicious misinformation against Indian efficacy and quality.  

The Indian economy is presently growing at between 6% and 7% per annum according to various independent estimates. It is adding $ 400 billion per annum to its tally according to Morgan Stanley.

The World Bank has revised its estimates upwards in October 2022, and expects India to grow at 6.9% in 2022-2023 and at 6.4% in 2023-2024.  It is also expected to maintain this momentum year-on-year for at least a decade going forward. 

By way of contrast, in 1990, just before a sharp balance of payments crisis and the urgent, sweeping reforms in 1991, the entire Indian economy was at less than $400 billion.

This sluggishness over four plus decades, was due to an over reliance on socialist policies and a highly regulated economy that failed to deliver.  Now, both the size of the Indian economy and the momentum of its growth have picked up considerably. India is acknowledged as the fastest growing economy globally.

 Exports, which were never India’s strong suit in the past, came to the rescue during the pandemic, when various other sectors of the economy were depressed or even inactive. They are expected to touch $ 1 trillion by 2030, according to the Commerce Minister Piyush Goyal.

In the nearly one year of the ongoing Ukraine war, India has exported rice, grain and other food items, as it is food surplus. Another feature that is now descriptive of the Indian economy, that was dependent on food aid in the 1950s and 1960s when the population was less than a third of what it is now.

The vast domestic market however is India’s mainstay, with consumption and investment accounting for 70% of the economy. This makes it an attractive destination for foreign investors as well.

India, on its part has been pumping up its capital expenditure in infrastructure, capacity building, connectivity, and modernisation at an unprecedented pace. This, in turn, is having a entirely positive knock-on effect on the economy by removing chronic bottlenecks and inefficiencies at a dynamic pace.

At a time when multiple Western countries are keen to reduce their dependence on a Chinese supply chain, India stepping up to the plate with the requisite infrastructure and the offering of incentives to relocate/manufacture here is very timely. Giants such as Apple Industries have already taken advantage of the opportunity. Several high-end semiconductor manufacturers from Taiwan and elsewhere are in the process of starting factories in India.

Electronics and automobiles including componentry are already growing fast and are big employers. Other unicorns and start-ups, valued at over 332 billion,  making India the unicorn/start-up capital of the world, offer exciting employment possibilities.  Development of Artificial Intelligence (AI) applications alone holds out the prospect of millions of new jobs.

India’s macro-economics are solid beyond just the growth statistics. Its current account deficit is well financed by foreign direct investment and dollar reserves that are hovering close to $ 600 billion, even after dipping to try and shore up the falling rupee against a surging US dollar.

India is working hard to enter into rupee trades with Bangladesh and Sri Lanka after establishing a rupee-ruble format for trade with Russia. This will, as it grows, reduce India’s dependence on the American dollar.

This even as clean energy initiatives, meaning non-fossil fuel, will cut 40% of India’s ever growing and costly petroleum import bill. With a current 80% dependency on imported fuel, this is the hardest inflationary item to manage and roils the strength of the rupee vis a vis the dollar.

 The purchase of most of India’s oil and gas needs from Russia and others at discounted rates over the last year has however contained domestic inflation to reasonable levels. India has also been exporting refined petroleum products at an elevated pace during the logistic difficulties posed by the war in Ukraine.  Prices have been aggravated by international sanctions, sharp cuts in production by OPEC and other oil and gas producing countries. This has kept oil prices high at a time when Europe and America are struggling with higher rates of inflation of between 6% and 11% never seen by these economies in the decades since WWII.  

India’s thrust towards aatmanirbhar manufacturing have borne fruit in 2022 with several beginnings in the defence manufacturing industry. With 68% of items proscribed from the imports list, Indian industry, both public and private sector are reaping the benefits. In addition, because of the quality of armaments made in India, a new defence export market is growing. Brahmos missiles were exported to the Philippines in 2022. Other countries, such as Vietnam, UAE and Egypt have lined up for these and other Made in India missiles. Armenia has bought Indian rocket launchers and radars. The Tejas fighter aircraft are not only filling shortfalls in the Indian Air Force, but are also being looked at with interest by other countries. Indian drone manufacture is growing fast. So are the manufacture of automatic machine guns, cold    weather gear, bullet-proof vests, boots, ammunition, rifles, armoured cars, transport aircraft in a joint venture between Airbus and Tata, light tanks, heavy tanks, howitzers, rocket-launchers that are mobile, and superior to the Russian ones they are replacing, with a longer range. There are frigates, submarines both nuclear and conventional, aircraft carriers. The Indian Defence Industry has not only been growing significantly in 2022, but has the potential to become a percentage player in the global arms markets at a fraction of the price of its Western competitors.

Certain things, like fighter engines, and naval gas turbine engines, are yet to be developed, but vigorous joint venture talks are on with France, the US and Britain. This, even as we scale up Indian R&D on an urgent basis to take care of the threats posed by a two-front war with both China and Pakistan. Making our own aircraft and naval engines will go a long way towards essential security.

ISRO has made great strides, not only by launching heavy rockets and multiple satellites into orbit itself but by also hosting private players to do likewise. But there was a            time, decades ago, when it was denied cryogenic engine technology by the West and Russia, and had to develop it on its own. Now, like NASA, it is also working on a reusable space vehicle for multiple visits to space.

A sector that now rivals agriculture both in share of the GDP and the numbers it employs is the real estate sector. This activity has been and will continue to be a magnet for surplus rural labour. After a number of years with oversupply, it  picked up in 2022 and is expected to continue surging in 2023. The demand for housing and commercial properties is almost insatiable in a country like India. People see it as security only next to gold and refuse to let naysayers and economists dissuade them from buying either.

And yes, India’s contribution from agriculture to the GDP is now at 20.19%. It is services that account for 53.89%, and manufacturing is slowly growing to claim 25.92%. Will the share of the service sector shrink going forward, as manufacturing, exports, real estate etc grow? It is likely, but it will only be a slightly smaller percentage of a bigger pie.

In future, the leading factor that will distinguish the Indian economy is the degree of its digitisation that is already advanced when compared with the West. 5 G and 6 G, both developed domestically, will play their part to deliver goods and services and blow-out the financial economy.

The number of Indian companies that will attain scale of being billion and multi-billion-dollar companies will be significant in 2023 and beyond. You cannot compete internationally without this scale. This even as the  Micro, Small and Medium Enterprises (MSME) sector, often touted by Communists as the neglected Hoi Polloi, will rapidly convert itself to supply this giant series of corporations. There will be greater integration, better quality, less overlapping wastage.

In a sense, India is simultaneously moving on all fronts. This, of course, is essential to a well-rounded economy. That the Indian economy is not over burdened with debt, particularly external debt, puts it in a good position to realise its ambitions in 2023 and beyond. This is what pleases the World Bank and the International Monetary Fund (IMF) the most, because they can count on less volatility, something they can’t say too often in today’s troubled world.

 

 (1,922 words)

December 29^th, 2022

For: News18.com

Gautam Mukherjee

 

Size Of Economy & Military Matters

A Last Chance to Malign And Disrupt India’s Progress, Because By 2028 It will Be Too Late

When an economy is No.5 in the world, having surpassed its former colonial masters, the United Kingdom, and despite its 1.40 billion population; it is time to recalibrate perceptions of its place in the world.

Multilateral agencies like the World Bank, the IMF, already have. So have a number of leading international rating agencies.

India has begun chairing the G-20 along with nine invited guests including Egypt that is mulling an extensive defence manufacturing cooperation with India, including its Tejas fighters, its helicopters, howitzers, armoured vehicles, light tanks, drones, missiles.

But, in due course, perhaps a decade from now, when India becomes a percentage player in defence exports, it will challenge the vastly more expensive military industrial complexes of the West. A prospect they do not welcome. Unlike copycat Chinese armaments that nobody wants, India’s military demands and gets a quality product that can consequently be exported. A long list of countries want to follow the Philippines to import the Brahmos missiles already.

China chose December 9^th 2022 to attack, yet again, with clubs and stones, in a carefully planned operation at Tawang, Arunachal Pradesh. Perhaps it is time for India to authorise the use of artillery and other weapons at these intrusions.

The Chinese came with as many as 300 troops, but were promptly repulsed by just 50 to 70 Indian soldiers with over two dozen Chinese injured in intense hand-to-hand fighting. India suffered six soldiers injured. The timing suggests that Xi Jinping was trying to embarrass Narendra Modi just before India takes over the G 20 from January 1^st 2023.

But sovereign Western nations being overtaken economically, all members of the G7 and NATO, also find the rise of India hard to digest.

Even Japan, otherwise warm and cooperative towards India, a QUAD member, has decided to develop a new generation of fighter plane, for the first time since WWII, along with Britain and Italy, as it diversifies away from the US, its erstwhile sole defence partner.

An article by Somnath Mukherjee, Managing Partner at ASK Wealth Advisors, suggests that Warren Buffet’s investment dictum of ‘Never bet against America’ is beginning to apply to India too.

He writes ‘The biggest variable in India’s favour is in our numbers-a population of 1.4 billion works the probabilities in its favour. Even if 10% of the population approach Korea-level productivity, that is a market the size of Russia at Korean levels of income. This small cohort itself would generate an income pool of nearly $ 5 trillion’.

To illustrate this point in a razmataz manner, today’s news says India’s well-heeled will purchase 450 super cars this fiscal, up from 300 last year, each at over a couple of crores in price.

In Dubai five-star hotels, only super-cars like Maserati, Ferrari, Bentley and their ilk get to park in the portico and front parking lot nowadays. Apparently, staff valet-park BMWs, Mercedes Benzes and Audis in the back lot, as they are now regarded as taxi worthy, if not taxis. In Dubai, with its tiny population, this sort of thing, excessive as it is, still makes a point, but in India it could be the beginning of a tsunami.   

Nevertheless, in 2022, India is still an emerging economy, albeit with the fastest growth rate of a major economy in the world at between 6-7 per cent per annum. It is headed to become the No.3 economy behind the United States and China by 2028. It will then be a $10 trillion plus economy, up from nearly $ 4 trillion in GDP presently.

Morgan Stanley says India is adding $ 400 billion to its GDP annually now, a figure bigger than its entire economy till even 1990, when it was at $ 320 .98 billion.

China, at No.2 presently, at $18.32 trillion in 2022, is still growing at 3.2 %, and some reports say it may overtake the American economy by 2028.

Not, of course, if America can help it, but the intertwining of the economies has been built over more than 30 years, and disengagement where in many case both the raw materials and the manufacturing is Chinese, is not easy.

China has long been suggesting that it shares hegemony over the world with the US - the Atlantic for America, the Asia-Pacific and Indian Ocean for China. Of course, this is errant nonsense, and unacceptable to the present world order. But China is still pushing this envelope in the absence of an outright domination of America.

India is about to attain these dizzy economic and strategic heights soon, provided it can keep building its military deterrence and using it to good effect when challenged. But getting there will buffet the power structure of the dominant West no matter how diplomatic India may choose to be. Still, size and heft has its compensations.

India is quietly building its second indigenous aircraft carrier, other nuclear powered submarines, stealth frigates, fighters and other aircraft, armoured cars, light tanks, missiles in a great variety, and is proceeding as quickly as it can on a wide range of military aatmanirbharta.

Why is it that China, despite being a repressive, autocratic, imperialistic, near dictatorship under President Xi Jinping, does not receive much criticism from the Western media?

Democratic India, on the other hand, receives daily brickbats from the West. Is it because the West realises that if India’s progress is to be slowed, now is probably the last window of opportunity to make it happen. It is not easy though, because even today, India is a nuclear weapons power with a large market and considerable technological prowess, and a new determination to not be pushed around by China.

There are a multiplicity of weapons manufacturing countries willing to collaborate with India if the terms are right. But India is making more and more of its military equipment indigenously and more often than not, shops only for componentry, engines, radars and the like.

India, it has become something of a cliché, is seen as a possible bulwark against Chinese hegemony in the Asia Pacific, the Indian Ocean and farther afield. The leading Western powers are officially keen on cultivating India. But, another, more hawkish school of thought from the West is not averse to seeing China knock some spots off India to make it more amenable to negotiations that favour the West, as always.

The West is uncomfortable dealing with a sovereign independent-minded India with a freshly declared intent to pursue policies and alliances that best suit its national interest.

So, at a low-cost minimum, the West and even radical regimes like Qatar in West Asia, uses its media. It encourages pressure groups such as diverse often ISI backed resident Pakistani organisations, Khalistanis abroad in Britain and Canada, Kashmiri radicals likewise, who want to see J&K severed from India. Then there are China supported academics, celebrities, Leftists, Communists, Islamists, terrorist organisations, drug cartels, parts of the OIC, who are given free play to constantly snipe at India.

This affords plausible deniability to Western governments, and the detractors of India are positioned as people exercising democratic rights to dissent, criticise and influence. Ideas that India says it professes.

So Prime Minister Narendra Modi’s government is portrayed as fascist and communal, its freedoms of expression curtailed, its minorities targeted, practicing a narrow chauvinistic Hindu nationalism that is out to destroy its erstwhile pluralism and so on.

Rounds of little-known NGOs issue reports from European countries putting India near the bottom of the pile on many such parameters with great regularity.

That none of this bears any resemblance to the truth, and actual circumstances on the ground do not bother this spreading of calumny. Fortunately, India has grown thick-skinned and Western approval from its fringe operators that trash journalistic and professional ethics every day, is not very high on its list of priorities.

One has to actually pity groups like the Khalistanis and their supporters. They gave it their best shot backed by Pakistan in the 1980s, and were squarely routed. Today, it makes no real sense, as neither they, nor any of their backers stand a chance of actually creating a Khalistan out of Punjab. So why does the West pamper such no hoper third-rate terrorists, drug-dealers, smugglers, and murderers?

What good, this hypocritical policy does in a time when India is not likely to be deterred by any amount of Western propaganda, is anybody’s guess. Perhaps it is designed to put off those who would invest in India, but if so, these would be only the ones who do not do their research properly.

The Apples and semi-conductor manufacturers, the aircraft joint ventures, are not the least bit put off.

The counter narrative sees Narendra Modi as a visionary world leader and India as a terrific business destination. But of course, there is much controversy and tumult even as the rag-tag opposition tries to latch on and get a grip and traction.

China, on the other hand, is handled with kid gloves because of massive supply chain dependencies and billions of dollars in bilateral trade. This despite efforts to get away from it post the Covid pandemic that originated in Wuhan.

It is not as if the atrocities against Uigurs in Xingiang do not receive censure and bad press internationally. But it all seems quite muted and largely  cosmetic in comparison to the magnitude and audacity of the systematic repression of an ethnic minority. Similarly, China’s treatment of Tibetans, and indeed its own Han Chinese in Hong Kong is seen more or less as an internal matter. Even its acute sabre-rattling against Taiwan is largely glossed over. Likewise its attempts to project sovereignty over all of the South China Sea, ignoring other countries in the littoral, and even international laws on the freedom of the seas, is not accepted by the West, but it tries not to provoke the dragon beyond aggressively patrolling the important waterway.

While India’s problems with China along the long LaC as well as via the Pakistani proxies are acknowledged by the West, the defence of the border is regarded as a largely Indian matter.

Similarly, when China menaces the Senkaku Islands in the East China Sea, the region said to be rich with unexploited oil deposits, it is mainly up to Japan to defend its sovereignty over the islands.

America has retreated from playing universal globocop, and having to foot the bill as a consequence. But this too has encouraged China’s ambitions.

In a sense the West, particularly America, was the architect of China’s meteoric rise to prominence. So much so, that China now wants the No. 1 spot in naked terms. This is the stuff of pride before the fall because a vastly superior American military will simply not allow it.

It has happened over and over in history, and caused both the world wars of the 20^th century, but China under Xi Jinping, seems impervious to the warnings of such history. Instead, the strategy is to keep chipping away at the Western room to manoeuvre. And yet, the West treats China like a foregone conclusion, like a bad habit perhaps, and objects, out of pique, jealousy, nascent racism, against a resurgent India.

It is more than likely that both China and the West will fail in their interwoven machinations, and India will prosper regardless, passing between the chinks in their armour. One major reason is the vibrancy of its domestic economy dependent on none, and its ability to feed itself. The other is that it will remain the most populous but young country in the world for the rest of the 21^st century.

(1,930 words)

December 13^th, 2022

For: Firstpost/News18.com

Gautam Mukherjee