India has to walk a tightrope amid a fluid world order
The ongoing monsoon session of Parliament has briefly halted high-level foreign visits by ministers, while uncertainty prevailing in India’s neighbourhood, as well as G7 partners are equally at play. War in Ukraine has also entered six months and the world is preparing for a harsh winter! All of these have major implications for India.
What was almost unthinkable in February this year, when Russia sent its troops into Ukraine is now turning out to be a living nightmare, impacting billions of people around the globe. When Russia went into Ukraine, everyone thought it would be a matter of a few days before a complete takeover. However, what wasn’t factored in was the sudden western unity and throwing in of ‘all it takes’ by US and Europe to win a moral war against Russia.
Western nations led by the US hardened the sanctions regime against Russia, reviving Cold War era power blocs. It also forced many powerful European countries such as Germany to reinvigorate their military programmes, thereby diverting funds from other pressing sectors such as climate change. The most significant outcome of the war is perhaps a working template for China for its future road to global dominance.
China is Russia’s most powerful global ally and has not restricted any trade with Russia, thereby reiterating the stated objective of ‘friendship beyond any limits’. China has even come out with statements as late as last month condemning and challenging the western alliance-led Cold War era sanctions regime against Russia. What China is closely analysing are the challenges Russia faces at present and in future, and how can China insure itself from these threats, if it decides to push for unilateral military aggression in any part of the globe.
India has been caught on the wrong foot geopolitically. It has a historic relationship with Russia, stretching more than six decades and is one of the largest buyers of Russian weapons. However, it may be noteworthy that in case of a large-scale military flare up with China, the weapons on both sides would be of Russian origin. It could also mean Russia may have to make a tough call between a powerful global ally (China) and an old trusted friend (India) on the global stage.
Chances are Russia would choose the former. Meanwhile, India and China negotiations on border related issues haven’t progressed significantly in the past six months. On the contrary both sides have made the north-western border points permanent military zones developing key infrastructure in the fragile Himalayan terrain. The winters of 2022 and many more to come are most likely to be tense, given China’s heightened aggression.
Meanwhile, at multilateral forums such as the BRICS summit China is aggressively trying to push for a reserve currency, which is aimed to scale down the importance of a dollar denominated trade. China is also pushing for trade transactions in Renminbi and wants to establish an alternative to current international Interbank Payment Systems, which is another dent towards Europe and US-led order. It may be mentioned that India too has allowed Rupee denominated international trade settlements, and has been working on an alternate, to cross border interbank settlements.
These trends could have established an alternate financial system, provided India and China could have come to the negotiating table to discuss the regulations, standards, and governing principles. India, China with their other BRICS partners, Russia and Brazil, could have persuaded many smaller economies to join the new financial system. However, that seems currently out of place due to the prevailing geopolitical canvas.
(The writer is a policy analyst. The views expressed are personal.)