Author Archives: Dr. Samir Saran
Raisina Chronicles: India’s Global Public Square
The Raisina Dialogue has become a feature today in the calendars of leaders around the world. It is a must-attend for all who seek to move the needle, disrupt the status quo, defend their beliefs, and create what shall be. India’s flagship conference on geopolitics and geo-economics enters its 10th year. In that time, it has emerged as a global, inclusive, and wide-band forum of international importance, transcending borders and ideologies, ages and agendas, hashtags and echo chambers. It is India’s ‘global public square’—located in New Delhi, incubated by the world. Its purpose is to preserve and promote the often-challenged art of dialogue and of working through differences. In keeping with Indian Prime Minister Shri Narendra Modi’s vision of delivering public goods for the benefit of all humanity, it is indeed a platform that serves this planet.
Raisina has been crucial in propelling discourse, nurturing collaboration, and fostering a sense of shared responsibility. It is a venue for celebrating diversity in all its shapes and forms: of thought, of approaches, of beliefs, of politics. It has captured the age-old Indian premise that within us all lies a desire and power to do good. Each view must be heard, and each suggestion must be considered. Pluralism, confabulation and heterogeneity is what makes us resilient and anti-fragile; and what drives the evolution of individuals and of societies. This is India’s own story as well; an enormous diversity that rests on a powerful timeless unity. or this reason, Raisina provides a rare opportunity for leaders and diplomats, scholars and policymakers, journalists and academics, teenagers and seasoned thinkers, business folks and civil society—to all come together to debate, deliberate, disagree, and discover shared futures and common pathways.
On this occasion, we celebrate the Raisina Decade: a period during which the Dialogue has helped build regional partnerships and transcontinental collaborations, while responding to global challenges. For three days every year, it has brought a fractured and polarised world together. This volume chronicles this journey, and reflects on its unique strengths and attributes. And this is best done by bringing together how it is perceived by eminent participants from different parts of the world. These are the thoughts of those who have themselves experienced Raisina and have contributed ideas, who have listened and spoken there and who appreciate the difference it has made.
Read it here.
Raisina Files 2024 – The Call of This Century: Create and Cooperate
This edition of the Raisina Files is infused with this conviction. The call of this century is to dispense with cynicism and to embrace what is appearing and emerging. A call to work towards inaugurating an inclusive and sustainable future. Rising up to the task requires us to create and cooperate, to build communities fit for this purpose.
This volume comprises contributions from an ensemble of thinkers who problematise, and attempt to answer, the pressing questions that matter. What are the power dynamics between a State and its citizens in this age of the digital? How do we protect our children in their always-online world, while preserving their agency and rights? If the current Western-led mechanisms of international aid are failing to meet the needs, how do we ensure that assistance truly reaches the grassroots? What transformations do our food systems require so they can be fit for the zero-hunger goal? As we move to the green frontiers, how will women lead the change? And how does the global financial system become just that—global?
Read it here.
Net zero by 2070: Financing India’s biggest infrastructure buildup
India’s goal of reaching net zero presents a crucial challenge and opportunity. Its success depends on financing key sectors effectively, thus, shaping the pace of decarbonisation.
At COP26, India set itself the ambitious target of achieving net zero carbon emissions by 2070. Fulfilling this target will require critical sectors such as power, industry, and transport to switch from current production methods to low-carbon technologies. To help manage the economic growth and minimise the negative impact on businesses and the public.
In essence, the net-zero target presents itself as India’s biggest infrastructure and employment generation opportunity for the next 50 years. As per some estimates, solar and wind installations will need to grow 70 times from current levels to reach 7,700 GWs to achieve net zero by 2070. In addition to this, the country will need to build infrastructure to support 114 MMTPs of green hydrogen production. Estimates for this asset buildup place the costs of transitions for electricity, industries, and transportation at over US$ 10.1 trillion. However, current capital sources are sufficient to cover asset buildup valued at US$ 6.6 trillion, leaving a deficit of US$ 3.5 trillion.
The net-zero target presents itself as India’s biggest infrastructure and employment generation opportunity for the next 50 years.
Therefore, the magnitude of the asset buildup and the management of the human aspects of the transition will pose the most significant challenge and opportunity for India’s economy in the coming decades. Finance will be critical in this aspect as the country needs an average mobilisation of over US$ 200 billion annually for the next 50 years. Not just the scale but also the delivery of the finance to these sectors will decide the eventual pace of decarbonisation.
We suggest six steps that could aid in achieving this scale of finance. Essentially, financing will depend upon a three-step function of raising capital, deploying it (e.g., making loans) and collecting it back (e.g., recovery of the principal and interest). Each of our suggestions aims to solve some key problems within this three-step financing process.
The first step should be to notify sectoral targets, if possible, all the way up to 2070 and create an aligned taxonomy for achieving the same. The taxonomy would allow financiers to understand the funding potential of projects and mitigate the transition risk by answering what’s green and what’s not. Such a step could also help augment the capital-raising ability of financial institutions and corporates as they can tap lines of credit that are aligned to these targets for e.g., green or transition bonds.
The taxonomy would allow financiers to understand the funding potential of projects and mitigate the transition risk by answering what’s green and what’s not.
The second step entails leveraging public funds to mitigate lending risks and enhance the accessibility of finance at competitive rates, particularly for emerging business models and innovative technologies. This step is particularly important for a financial system which is shifting from financing fossil fuels to new age low-carbon technologies. By using de-risking structures, financial institutions can feel more comfortable deploying loans into new-age and green businesses with unique requirements and limited credit histories. For instance, electric vehicles (EVs) are expensive upfront, and bankers may have a limited understanding of the technology, leading to conservative lending practices. Credit guarantees at attractive rates can both help alleviate these concerns and allow for deeper financing penetration.
Third, like China, which today houses four of the largest five banks in the world, India should look at building massive banks and infra-debt funds that could allow for improved finance availability for mega RE, green hydrogen and other infrastructure projects marked by long gestation period to be built at a pace not seen in the past.
Fourth, the country could moot the greater participation of the foreign banks, which could bring in the much-needed foreign capital as well as take the currency risk, to finance the asset buildup in the country. This will require greater coordination among policymakers and regulators, often a rarity in India, to identify the key bottlenecks that have led to many foreign banks shutting shop in the country or getting reduced to fringe players in the lending ecosystem of the country.
Fifth, deepening the bond market and boosting other refinancing instruments will help create a greater flow of debt capital towards greenfield projects in the country by freeing up the books of debt providers like banks.
India must increasingly leverage its growing global influence to drive reforms in the international financial system, which currently obstructs the flow of climate finance beyond the developed world.
Sixth, to address the quantum challenge, public money could be used to incentivise foreign investors to make investments, who at present shy away from the country since investments are inherently expensive owing to currency hedge costs, in green projects in the country.
Finally, domestic and currently available foreign sources alone will not be sufficient to meet this financial challenge. India must increasingly leverage its growing global influence to drive reforms in the international financial system, which currently obstructs the flow of climate finance beyond the developed world. Specifically, expediting the reform agenda of Multilateral Development Banks (MDBs) prioritised during the Indian G20 presidency is essential. These entities must now be equipped to better utilise their resources to mitigate risks associated with private climate investments in the Global South. India must also better utilise plurilateral groupings such as the BRICS to address specific challenges. This includes establishing a dedicated pool of capital aimed at lowering the costs of green financing and fixing flaws in the credit rating systems that continue to be biased against the EMDEs.
Co-authored with Vaibhav Pratap Singh for the ORF Website
Samir Saran 