China, Research

The world is in flux. Self-reliance is vital

Three contemporary developments have challenged India’s engagement with the world and its security concerns in the past 24 months. The first was the decision by China’s Xi Jinping to pick a line from a map in imagined history and send 100,000 troops and more to alter the current political equation in the Himalayas. This was a whimsical and perverse exertion of power that resulted in a bloody clash and a still continuing face-off between Indian and Chinese troops. Xi’s actions then were no different from Vladimir Putin’s in recent days, both yearning for the expanse of empires past or even mythical. The global reaction, though ostensibly sympathetic to India, was timid when compared to the current aggressive response to a similar Russian effort to change the politics of Europe.

Continuing economic engagement with China and appeasement of the Dragon to the detriment of its partners and allies defined the western world’s response. The differential between geopolitics in Europe and geopolitics in Asia has been underscored again in stark terms. The frenzied media coverage and careless commentary continue to reinforce how values and ethics vary when ethnicity and geography change. This must affect the assessments of the West’s partners in the East.

Next, in August 2021, the world’s mightiest superpower, the United States (US), finalised an unethical and tragic arrangement with a band of terrorists, and deserted Afghanistan overnight. Women rights, individual freedoms and the “values” that were propagated while waging the so-called liberal war against terror, were all discarded in favour of what was expedient. The professors of democracy and the radical Taliban found common cause and sent Afghanistan back to the 1990s. For India, terrorists armed with American weaponry were no longer just a threat scenario but a reality at its door — one it would have to handle by itself.

The differential between geopolitics in Europe and geopolitics in Asia has been underscored again in stark terms. The frenzied media coverage and careless commentary continue to reinforce how values and ethics vary when ethnicity and geography change.

And now, Putin has decided to go one up on Joe Biden and take Europe back to the early 20th century. Russian troops invaded a sovereign country to enforce a political writ driven solely by the desire to preserve Russia’s influence over geographies that increasingly disagree with the politics and propositions of the Kremlin. While Russia’s fears of the purpose and method of the North Atlantic Treaty Organization (NATO)’s expansion must not be discounted, use of force and violation of a country’s sovereignty cannot be acceptable as an expression of disagreement.

The invasion of Ukraine has put India in an unenviable position of choosing between what is right and what it believes is right for itself. India’s tough words on Russian action in its statement at the United Nations Security Council (UNSC), even as it abstained from voting, demonstrated this. Yet this is insufficient for many in the liberal West who seek India to be part of the normative liberal order, as well as of a performative chorus against Russia.

The invasion of Ukraine has put India in an unenviable position of choosing between what is right and what it believes is right for itself.

What is more striking than India’s predictable vote is the mood on the street and views of the commentariat. It seems that the memories of the feeble support on China and the shenanigans in Afghanistan are still fresh.

The US invasion of Iraq in 2003 had triggered loud political debates and voices against India’s then position on American intervention. This time, the convergence across the normally sharp political divide is palpable and must be a moment for reflection for many.

Several questions confront New Delhi. First, does strategic autonomy equal neutrality, or is it the freedom to choose what is best for the country at any given time? Can we disregard growing strategic expectations from partners? What are the dependencies that are being created by our economic and security choices? Which of them are inimical to our interests? And, how can we integrate this aspect as we make choices in a multi-layered world?

Finally, there is a question for the trans-Atlantic order. Its tough line on Russia’s military adventurism, gaming of economic relations, and cyber and information operations have been compelling. Will it hold this line when it comes to China’s actions? Or will the happenings in Asia continue to be appraised through a “dollar”- driven values framework?

Trusted connectivity, diversified sources of materials and components and resilient financial and trading arrangements are no longer buzzwords but a strategic imperative requiring all of India’s consensus, including within its business community, lawmakers and all stakeholders.

But the single most important learning through the pandemic years and the three geopolitical developments that have created turbulence for India is the burial of the post-war assumptions of the century past that undergirded our modern societies and indeed the global project that was born around the same time as India’s Independence.

Between China, the US and now Russia, we have witnessed the weaponisation of everything. Innocuous supply chain components for electronics, minor supplements for medicines, components for vaccine packaging, energy and gas grids, SWIFT system and currency and minerals and sundry materials have all been used for political coercion, waging war, or for undermining others’ interests.

Prime Minister Narendra Modi’s call for Aatmanirbharta (self-reliance) has acquired a new salience and ironically, achieving it requires astute global interlinkages and perhaps even more dense global networks for a country that houses a sixth of humanity. Trusted connectivity, diversified sources of materials and components and resilient financial and trading arrangements are no longer buzzwords but a strategic imperative requiring all of India’s consensus, including within its business community, lawmakers and all stakeholders.

Standard
Cyber Security, Digital India, Research

Time to reassess what is good, what is bad, and what is ugly about India’s tech regulations

The emergence of new technologies has digitalised markets, societies and nations. Once perceived as a strength, this proliferation of technology is now also a vulnerability. It has made tech-governance more  political and social, and less about the traditional modes of regulation such as permissions, standards and tariffs.

India is among the most technology adept nations, a function of its people’s comfort with IT products and services as well as its late-mover advantage. It must now engage with a spectrum of evolving needs around law and regulation. This is necessary to accelerate  population-scale opportunities and address widespread risks.

Three sets of issues emerge here – understanding the nature of technology-linked risks; assessing the challenges to governance; and being imaginative in embracing new modes of regulation.

Three sets of issues emerge here – understanding the nature of technology-linked risks, assessing the challenges to governance, and being imaginative in embracing new modes of regulation.

Let us begin with the risks, which themselves are creations of enhanced democratic access. For example, in roughly two decades India has added over a billion mobile phone subscribers, with over 50 per cent of them now using smartphones. This is transformational and unprecedented.

Improved access is credited with enabling financial inclusion, efficiency in  education and healthcare, and fostering local e-commerce as well as global trade. However, a large user base is also a double-edged sword. As a result, corrective interventions need to be nimble and at digital velocity and population scale. Legacy regulation is simply ineffective.

This is best illustrated by problems plaguing social media platforms. A 2021 study found a high rate of social media misinformation in India, and attributed this in part to the country’s higher Internet penetration rate, driven by smart phones. Between June-July 2021 alone, Facebook received 1,504 user complaints in India – with a significant proportion of these related to bullying, harassment or sexually inappropriate content. Concerns are also emerging across other digital ecosystems, such as online gambling and crypto-assets. The mobile phone is a communication device, a crime scene and also an unsafe personal space.

Several state-level laws regulate or entirely prohibit betting and gambling. However, research suggests India is among the top five countries in terms of income potential from online gambling, and that the domestic online casino market may grow by 22 per cent each year. People from several states, such as Maharashtra, Telangana and Karnataka, are among the most frequent visitors to online gambling websites. The market for illegal betting and gambling in India is highly lucrative, with some estimating its value at USD 150 billion.

Offshore gambling websites often channel black money, engage in illicit transactions and launder wealth through financial intermediaries. Their operators are invariably based outside India, which makes it difficult to enforce the writ of the state. Recent investigations by bodies like the Enforcement Directorate have revealed instances of locals being hired to open bank accounts and trade through various online wallets, revealing gaps in due diligence mechanisms.

For the digital economy to flourish, it is important to evolve approaches that help resolve systemic and structural risks. It is time to reassess what is good, what is bad and what is ugly in this new digital landscape. Online gaming and online gambling must not be conflated. Similarly blockchain and sensible DeFi must not be clubbed with predatory crypto-gaming. After all, if we don’t embrace disruptive technology markets through sensible regulation, others will. A failure to capitalise may see India lose key avenues for economic growth and investment. India risk environment will then be shaped by external jurisdictions, some inimical to the country.

For instance, there are approximately 15 million crypto-asset investors in India, with total holdings of INR 400 billion. However, the regulatory and policy uncertainty has compelled crypto-asset entrepreneurs and exchanges to look to operate in more favourable markets. Exchanges such as CryptokartKoinex and ZebPay have exited the Indian market. ZebPay, for instance, is now headquartered in Singapore. In late 2021, many crypto-asset founders in India were considering moving their businesses to either the UAE or Singapore.

What we need today is new thinking and a new imagination of the digital world as not merely a virtual extension of the real, but an entirely different paradigm.

By banning cryptocurrencies altogether, nations such as China have missed the bus. India must leverage its position as the world’s third-fastest growing technology hub and seize the opportunity created by Beijing’s command and control ethos that is antithetical to innovation.  India can  and should become a global norms shaper in tech.

Tech regulation at population scale is akin to writing a new constitution for a digital nation. What we need today is new thinking and a new imagination of the digital world as not merely a virtual extension of the real, but an entirely different paradigm. There needs to be a clear-eyed understanding of what is legal, what is illegal and what may be illegal and yet requires regulations to serve and protect users and citizens.

To use a real-world analogy, since the 1990s, many countries including India have consistently distributed condoms and undertook safety campaigns among sex-workers without legalising prostitution or made available safe syringes to drug users without legalising the act. For governments and regulators, the role is no longer one of a gatekeeper that has the ability to prevent or permit activities online; it is becoming more of an ecosystem shaper and reducer of public bads.

By taxing cryptocurrency assets but not recognising these as legal tender, India has shown some welcome flexibility. It would do well to retain this nimbleness and become a co-curator of relatively safe tech platforms, services and products of the future that respond to Indian jurisdiction rather that off-shore the production of risks along with the rewards.

Standard