Research, Uncategorized, Writing

Enough Sermons on Climate, It’s Time for ‘Just’ Action

As Britain readies to host the 26th UN Climate Change Conference of the Parties (COP26) in Glasgow in November this year, there is a concerted effort to push countries towards publicly endorsing and adopting ‘Net Zero’—a carbon neutral emission norm—as policy. This is a demand for an inflexible, near-impossible, time-bound agenda to achieve what is no doubt a noble goal. And, as is often the case with climate-related issues, the nobility of intent is at risk of being overwhelmed by sanctimonious hectoring that raises hackles instead of ensuring meaningful participation.

On 3rd March, UN Secretary-General Antonio Guterres took to Twitter to call on governments, private companies and local authorities to immediately initiate three measures to mitigate climate change: Cancel all coal projects in the pipeline; end coal plant financing and invest only in renewable energy; and, jumpstart a global effort to a ‘just transition’ from carbon to non-carbon energy sources.

On the face of it, this was an unexceptionable call from the high priest of the UN to the global laity to rise in support of an important cause. But if we were to scratch the surface of the Secretary-General’s words, we would see that his call was little more than virtue-signalling.

For, there is nothing ‘just’ about the transition that he has sought without delay. Implicit in his call is the immoral proposition to disregard poverty, despair and the yawning development deficit between nations as he places them all on the same plane. Inherent in this approach is the unedifying complicity of global institutions in foisting an arrangement founded in the belief that the poor in the developing world should underwrite the climate mitigation strategy of the developed world. The climate high priests need to realise that depriving the world’s poorest of their aspirations can never be ‘just’ climate action. It can be convenient and, hence, it has much appeal in many quarters.

The climate high priests need to realise that depriving the world’s poorest of their aspirations can never be ‘just’ climate action. It can be convenient and, hence, it has much appeal in many quarters

An Alternative Script

A waffle-free alternative script for those given to sermonising to the world would focus on three other aspects that may actually lead to faster transitions and more justice. First, an impassioned call to those who control capital—managers of pension, insurance and other funds—to ensure larger amounts of money leave the country of origin and flow to countries of deficit for building sustainable, climate resilient infrastructure of the future. The Climate Policy Initiative has calculated that less than a quarter of climate finance flows across national boundaries; in other words, the overwhelming majority of climate finance is raised for domestic projects. The states expected to disproportionately do more to battle climate change are located in Asia, Africa and Latin America. Yet, they are inadequately funded and financed and cost of capital in these places dampens the scope of action. It would be stressing the obvious to say that the frontline states cannot be expected to engage in this battle without adequate inflow of climate capital at the right price for climate action.

Second, the assessors of risk—the intractable credit rating agencies, the cash-rich central banks and the big boys of New York, London and Paris—who decide how much capital should flow in which direction, should be called upon to recalibrate their risk assessment mechanism. Let it be said, and said bluntly, that objective ‘climate risk’ outweighs subjective ‘political risk’ which prevents the flow of capital to key climate action geographies. Risk must be reassessed objectively. Till then, the highfalutin sermons of the Pontiffs of Climate would be mere lip service, which none among the Climate Laity would bother to take seriously.

Third, and, perhaps, the most ‘just’ proposition the Secretary-General could make, would be a moral directive to all Western nations to shut down coal plants and fossil fuel- based enterprises immediately and entirely abandon carbon-fuelled energy for any purpose. After all, green energy sources need room to grow and space to mature and the OECD nations must allow this at warp speed. It is farcical to deny coal plants to countries that are still struggling to claw their way up the development ladder and demand that they turn carbon neutral while thousands of units and homes belch and blow climate emissions every day in rich economies. What is good for the rich cannot be bad for the poor.

Rich countries have failed to reduce their share of fossil fuel emissions. CSEP’s Rahul Tongia has calculated that the top emitting countries in terms of per capita emissions (nations above the global average emissions) still account for about 80 per cent of global Fossil CO2.  He further explains that the absolute emissions of these countries are rising even when measured in 2019. The rich took more than their fair share historically, and are still doing so. Any ‘Just Transition’ must involve evicting the squatters occupying carbon space to the detriment of others. Buying this space from the poorer is not ‘just’; it is another perverse business model based on extraction and mercantilism of centuries past.

Any ‘Just Transition’ must involve evicting the squatters occupying carbon space to the detriment of others. Buying this space from the poorer is not ‘just’; it is another perverse business model based on extraction and mercantilism of centuries past

In the run-up to COP26 at Glasgow, we are witnessing a new passion play of countries making a dramatic show of embracing the idea of Net Zero economies in the coming decades. The script of this passion play draws on starkly evocative narratives that seek to catalyse action through theatrical terms such as ‘climate emergency’. From appropriating the voice of the powerless to acquire legitimacy and crafting compelling narratives through a new cohort of well-funded ambassadors to push the envelope on climate change policy approaches, we are seeing varied actors engaging with climate issues in different ways. These different efforts have a common design, the economic objective of socialising the cost of climate action and making the poor carry the can for the rich.

That said, some facts are irrefutable. The last decade has been the warmest in recorded human history and its effects are visible to all. In February this year, an iceberg larger than New York City broke off the frozen Antarctic  and my just be a prelude to what lies ahead. Indeed, the possibility of the Arctic turning into a benign waterway in the near future can no longer be ruled out. It would require extraordinary un-intelligence to argue that global warming and its fallout can be mitigated by business-as-usual decision-making. But even as there is trans-world consensus on climate change and its impact, many would and must disagree on the proposed burden-sharing and distribution of responsibilities as we respond as a collective.

The India Imperative

India will be significantly affected by climate change in the coming decades. It is already feeling the heat and is combatting challenges from its mountains to its coasts due to shifting weather cycles and changing climate. It needs clearheaded policies, backed by political will, on this single most important issue that will impact its growth, its stability and the very integrity of its geography comprising a multitude of topographies.

This is happening at a moment when India is poised to exit the low-income orbit and take off on a trajectory towards becoming a middle-income country. Its journey from a US $3 trillion economy to a US $10 trillion economy coincides with ongoing climate action, polarising climate debate and climate-impacted economics. India can neither isolate itself from this reality, nor can it be reticent or timid in making its choices known to the world. India cannot be a receiver of decisions made elsewhere; it has to be on the high table, co-authoring decisions implicating its future.

For India, the moment offers three opportunities in these challenging times. First, India has to prepare itself through its policies, politics and internal rearrangements to seize and realise the single biggest global opportunity of leading a global effort to mitigate emissions of the future. The IEA, in its India Energy Outlook 2021 Report, estimates that India’s emissions could rise as much as 50 percent by 2040—the largest of any country, in which case India would trail behind only China in terms carbon dioxide emissions. This need not happen and is an opportunity for India and the World.

India must grab this chance to lower its future emissions through the right investments, technologies and global partnerships. The developed world, too, must make a matching response: Just like the Marshall Plan invested billions to rebuild post-War Europe with Germany at its heart, a new age Climate Marshall Plan must see India at its core. India must prepare and offer itself as the single biggest climate mitigation opportunity for the world and the most important green investment destination.

The developed world, too, must make a matching response: Just like the Marshall Plan invested billions to rebuild post-War Europe with Germany at its heart, a new age Climate Marshall Plan must see India at its core

Second, neither the world nor India should forget the dictum that on climate, India solves for the world. The solutions that India experiments with and implements successfully will be fit to be repurposed for other developing countries with similar geo-topographical conditions and economic sensitivities. Many of them are frontline countries in the climate battle.

India can and must become the hub of climate action for this decade and beyond, offering services, technology and infrastructure through climate supply chains that span the developing world. The International Solar Alliance is just a modest beginning. The future holds multiple opportunities. The country must lead the charge through building financial institutions that will support and sustain green transitions and helping create green workforces fit for purpose for the coming decades, amongst others.

Third, as India celebrates 75 years of its independence in 2022 and leads the G20 in 2023, it has the chance to make its most significant identity shift. India moved from being a British colonial state to a free nation in 1947, and then moved from being perceived as a land of snake-charmers to becoming an internationally acknowledged technology hub at the turn of the century. This decade offers the chance for it to emerge first as aUS $5 trillion and then as aUS $10 trillion economy that will be green and low carbon in its evolution – the first large green economy of the fourth industrial revolution.

India’s expectations from Glasgow COP26 should be uncluttered—its single purpose must be to catalyse global flows and investments to India and other emerging economies. If India fails to attract investments, the markets will clearly have not signed on to the climate agenda. In this effort, India needs a leg-up from the Climate Pontiffs.

Perpetuation of global poverty and low incomes cannot be the rich world’s climate mitigation strategy. ‘Net Zero’ should not seek this end state. On the contrary, investing in the emerging world’s green transition is the only way to build a ‘just’ world. The UN Secretary-General could help ensure that the largest pool of new money flows to where the climate battle will be fought—in India and in the emerging world. That would be a just transition and an efficient one.

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The simultaneous rise of India and China will define the 21st century.

At a book launch event in Delhi, Samir Saran and EAM Subrahmanyam Jaishankar discuss this new moment that will undoubtedly redefine the tenants and principles of the international order.

In their book, Pax Sinica: Implications for the Indian Dawn, Samir Saran and Akhil Deo analyse the key events and policies that have shaped the Asian Century since the elevation of General Secretary Xi Jinping. From the launch of the Asian Infrastructure and Investment Bank to the unveiling of the Belt and Road Initiative, China’s proposition presents a contested model of cooperation that is rearranging regional and sub-regional political alignments. India, amongst others, is responding to these developments to safeguard its own room to maneuver.

Soon after his elevation to the post of General Secretary of the Communist Party of China, Xi Jinping rapidly consolidated power at home and expanded China’s influence in the international system. His desire to achieve the ‘China Dream’ by the middle of the century has seen him steadily erode the norm of ‘collective leadership’ at home and has made China’s presence across Eurasia and the Indo-Pacific more expansive. He has determinedly set about reshaping the world order for the benefit of his Communist Party.

Samir Saran and Akhil Deo offer a retrospective reading of how this came to be—tracing the key policy shifts that have come to define China in the Xi Jinping Era. From the creation of the Asian Infrastructure Investment Bank to the Doklam standoff, they identify pivotal decisions and events that have shaped China’s engagement with the world—and how global powers, especially India, have responded to the Middle Kingdom’s rise.

Read here – https://rupapublications.co.in/books/pax-sinica-implications-for-the-indian-dawn/

Books, China, Research, Writing

PAX SINICA: Implications for the Indian Dawn

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More than three years after the Paris Agreement was finalised at COP21, it is evident that the developing world is unlikely to receive even the modest amount of US$100 billion annually in climate finance by 2020. This is primarily a result of the collective failure of the developed world to meet their moral and real climate obligations that pre-date the Paris Agreement. This lack of finance for climate action is exacerbated by the fact that the international financial community—banks, asset managers, investors and capital markets—have failed to align their operations with the goals of the Paris Agreement. The involvement of international financial investors, both private and multilateral, in financing green transitions in developing countries has so far been feeble, sporadic and arbitrary. Unless these resources can be leveraged to cater to the development needs of emerging economies, there is a real possibility that the green transitions that we all seek will be incomplete and mostly underwritten by the world’s poorest citizens.

For the past two years, ORF and the MacArthur Foundation have attempted to create a new framework to ensure that the global financial community better responds to the imperatives of the Paris Agreement. Our research acknowledges that official aid and grants are insufficient to meet the burgeoning energy and infrastructure needs of emerging economies. There is no doubt that we require new financial instruments and pipelines to support sustainable development in much of the world. This publication, comprising of 11 policy essays on the subject of climate finance, discusses this objective through multiple lenses. It is a culmination of our efforts to work with a global network of experts and stakeholders to identify bottlenecks and provide new solutions to ensure that emerging economies can access finance to meet their green development goals.

Our series on financing green transitions has largely focused on India, and for good reason: It will be the first large country that must transition to a middle-income economy in a fossil fuel-constrained world. India is also constricted by the same political, regulatory and financial challenges that confront much of the developing world. Given the weak efforts of the developed world to assist the developing countries so far, India has had to chart a path largely through its own economic and financial arrangements. Therefore, an assessment of India’s capacity to now leverage international financial flows and its ability to undertake a low-carbon transition may well provide a reliable template for developing countries to emulate.

Through 11 essays, we explore three broad themes: the role of international investors and institutions; India’s own development policy choices and lessons therein for other developing countries; and the role of human capital in climate-resilient investment.

Our first set of essays analyses the behaviour and financial practises of international financial institutions, investors and credit rating organisations. In “An Incomplete Transformation”, Mihir Sharma argues that Multilateral Development Banks have failed to create bridges between private capital and clean energy/climate resilient infrastructure demands in developing countries. He calls on MDBs to adapt to developing world priorities, crowd-in private capital, and streamline operational activities in emerging economies. In “Financing Climate Resilience”, Vikrom Mathur and Aparna Roy highlight the bias of international investors towards investing mostly in mitigation efforts. Conventional wisdom in the private sector holds that the costs of adaptation and resilience should be borne by governments. Taking a different approach to the problem, Mathur and Roy offer solutions focused on commercial and business opportunities. In two pieces, “Rating Resilience” and “Ratings for Renewable Energy”, Aled Jones studies the limitations of current literature and practices relating to credit rating of infrastructure projects and renewable energy projects and proposes a more holistic framework of risk metrics for both renewable energy and climate resilient infrastructure. Finally, in “The Political Economy of Basel”, Mihir Sharma outlines how the Basel norms have been designed to respond to the interests of a select group of developed nations. He argues that by prioritising macroeconomic stability and implementing new liquidity restrictions, these actors have failed to consider adverse implications on cross-border flows, especially with regards to long-term green investments.

The next set of essays focuses on India’s domestic challenges, particularly in its infrastructure and urban development policy and its efforts to transition to a low-carbon economy. In “PPP model, regulatory oversight and private financing: Evolutionary trinity of India’s infrastructure”, Gautam Chikermane offers a comprehensive historical account of the political economy of India’s infrastructure policy, documenting the many failures that have plagued it. Given that a stable infrastructure policy will have significant implications for green investment choices, Chikermane’s study of India’s policy failures provides valuable lessons. In “Financing Urban Infrastructure for an Evolving India”, Pritika Hingorani, Sharmadha Srinivasan, and Harshita Agarwal examine the reasons for the lack of private-sector involvement in India’s climate-resilient urban infrastructure. They analyse the current regulatory regime for urban infrastructure in India and provide a set of solutions, advancing both public and private sector participation in the future. In “Moving from Growth to Development: Financing Green Investment in India”, Neha Kumar, Prashant Vaze and Sean Kidney explore new financial instruments that India can employ to finance its green infrastructure needs. They outline how India can more effectively scale its green bonds market, leverage international debt capital markets, and harness blended finance to achieve this objective. Finally, in “India and the World,” Aparajit Pandey and I outline three key structural barriers that threaten to undermine India’s rapidly growing green energy sector: the state of its distribution companies, underdeveloped financial markets and inflexible international credit and risk assessment practices. Offering case studies from India’s state and municipal level policies, we argue that India’s ability to succeed in its low-carbon transition will open new pathways for emerging economies around the world.

In our final set of essays, we examine the role of human capital in enabling greater green investment, focusing on leadership and gender. In “Pay for Sustainable Growth”, Charanjit Singh, analyses the executive pay of 31 of India’s top companies showing that by linking management compensation to short-term performance objective, companies are failing to integrate sustainability objectives into their long-term vision. The chapter proposes a restructuring of the private sector’s approach to executive compensation, focused on long-term sustainable economic growth. Lastly, in “Gender and Climate Finance,” Vidisha Mishra posits that even though women and marginalised groups are likely to be more exposed to climate change related risks, they are severely underrepresented in the investment and regulatory classes. Her essay then unpacks the opportunities and benefits of meaningfully building gender concerns into climate finance mechanisms.

Our contributors have attempted to explore the reasons behind the significant shortfall in private finance in relation to low-carbon investments. They have also collectively offered solutions, both domestic and international, with regards to the flow of finance for climate projects. The success of these solutions, however, will be predicated on some boundary conditions that developing economies and the international financial community must meet.

First, developing countries must reclaim the power grid. The large-scale subsidisation of power in the developing world has created significant distortions in energy use, pricing and policy. State-level reform in India suggests that splitting the electrical grid for agricultural and non-agricultural sectors, implementing a credible metering system and providing subsidies as direct benefits can have significant positive effects on the power sector. Without a viable grid, green investments are likely to remain unviable.

The second is to build capacity amongst international investors to understand risk and opportunity in developing states. There is generally a bias stemming from lack of knowledge (information) and capacity (human resources) to assess risks in emerging economies. This ultimately translates into an inability to understand the economic landscape of recipient countries. Further, as one of our authors has highlighted, there are few institutional attempts at gendering climate investments and finance. A lack of female representation in the investor community, especially from the developing world, invariably means that the concerns and voices of the most vulnerable are ignored as financial plans are scripted.

Third, developing countries must build innovative policy tools to leverage new financial instruments and mechanisms. Currently, regulations related to debt and equity markets restrict the flow of international capital into climate action projects. Emerging economies must co-opt their financial sector in the fight against climate change. Financial markets that allow for debt financing and locally issued green bonds for example create a diverse set of instruments that different types on investors can rely on. More ambitious measures can include the creation of a “green investment bank,” which allow the crowding in of private investment in green assets.

Finally, there is a new imperative to overhaul regulatory systems around the world, both in recipient and investing states. Vast pools of money are held by multiple categories of investors, such as pension funds and insurance companies. However, existing regulations limit the ability of fund managers to invest in climate related projects. Further, international credit rating agencies reassess the methodology for assessments of green projects in developing countries. And perhaps most importantly, there is an urgent need to review the current set of Basel Accords as well as the next iteration of Basel IV accords. The macro-prudential regulations were designed to create a more risk-free international banking system but have unintentionally stymied the ability of the financial sector to contribute to climate resilience. The banking community must acknowledge that planetary risk is the largest systemic challenge to financial stability and that mitigating such risk is the most prudential practice.

While these solutions are far from comprehensive, they address some of the most persistent structural barriers to supplying and accessing climate finance. ORF and the MacAuthur Foundation will continue to explore new ways and means to ensure that developing countries can access financing to pursue their low-carbon transitions. We will also continue to study India’s own financial, technological and governance solutions in the hope that these experiences can benefit other countries and communities. We hope that the insights presented in this book will inform academics, business leaders and policymakers in their efforts to better understand the importance of the global financial community finally signing the Paris Agreement.

Read here – orfonline.org/research/financing-green-transitions-47553/

Books, Environment, Research, Writing

Financing Green Transitions

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The future of work in India is uncertain, but full of opportunities. This report attempts to answer key questions around the present and future of transformative technology in India and its impact on job creation, workplaces, employment trends and relations, and the nature of work itself.

Our research reveals that companies in India are optimistic about the future and are open to the possibilities presented by new technologies and digitisation. This optimism is likely to stimulate innovation and adoption of new technology and drive transformation, growth and progress. This report sets out a roadmap for an inclusive future of work in India that capitalises on the opportunities presented by technological disruption and digitisation. By using the opportunities at hand, India can:

  • Generate sufficient new employment opportunities for the existing and growing labour force.
  • Create decent jobs with better wages, security, protections and safety, necessary for improving individual and household welfare and well-being.
  • Ensure equal opportunities for women, youth and other marginalised communities previously unable to participate equally in the paid economy.
  • Establish an ecosystem better equipped to prepare the workforce for changing skill and educational requirements.
  • Create of an inclusive policy environment which balances the need for job creation with the interests of workers.

This report outlines findings from the Future of Work, Education and Skills Enterprise Survey. Data was collected from 774 companies in India, from micro-sized firms to those employing more than 25,000 workers. It presents findings on the pace of technological adoption and digitisation among Indian companies, and its impact on job creation, displacement and nature of work. In addition to the effects of the changing nature of jobs on wages, contracts, protections and security. Finally, the report includes recommendations on policies, programmes and action needed for India to leverage the possibilities of technological disruption, manage the associated risks, and enhance its preparedness for the future of work in the digital age.

Read here – https://www.orfonline.org/research/future-of-work-india/

Books, Research, Writing

The Future of Work in India: Inclusion, Growth and Transformation

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Raisina Files 2018 unpacks disruption and its interaction with global politics. Disruptive forces have been grouped along the lines of actors, processes, and theatres: three major nation-states whose external engagements are seeing shifts; three processes that are re-organising political, economic, and social spaces; and two old and new arenas where geopolitics are having local, regional, and global repercussions.

Raisina Files, an annual ORF publication, is a collection of essays published and disseminated at the time of the Raisina Dialogue. It strives to engage and provoke readers on key contemporary questions and situations that will implicate the world and India in the coming years. Arguments and analyses presented in this collection will be useful in taking discussions forward and enunciating policy suggestions for an evolving Asian and world order.

  • Debating Disruption: Change and Continuity | Ritika Passi and Harsh V. Pant, ORF

ACTORS

  • Is the US a disruptor of world order? | Robert J. Lieber, Georgetown University
  • Russia as a disruptor of the Post-Cold War order: To what effect? | Dmitri Trenin, Carnegie Moscow
  • China as a disruptor of the international order: A Chinese View | Yun Sun, Stimson Center

PROCESSES

  • Globalisation, demography, technology, and new political anxieties | Samir Saran and Akhil Deo, ORF
  • Minority Report, Illiberalism, intolerance, and the threat to international society | Manu Bhagavan, Hunter College
  • Fourth Industrial Revolution: Evolving Impact | Pranjal Sharma, author, Kranti Nation

THEATRES

  • Revolutionary Road: Indo-Pacific in Transition | Abhijnan Rej, ORF
  • Middle East: Cascading Conflict | Tally Helfont, Foreign Policy Research Institute
  • Climate Change, Transitions, and Geopolitics | Karina Barquet, Stockholm Environment Institute

Read here – orfonline.org/research/debating-disruption-world-order/

Books, Raisina Dialogue, Research, Writing

Debating Disruption in the World Order

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Over the years, India earned the epithet of a reluctant power in Asia — exuberant in its aspirations, yet guarded in its strategy. However, as the challenges in its immediate neighbourhood and beyond continue to evolve, India is today gearing up to embrace a larger role in the far wider theatre of the Indo-Pacific.

Forming the core of the ongoing global economic and strategic transitions are a rising and assertive China, an eastward shifting economic locus, and the faltering of Western-led multilateral institutions. These converge with domestic development and national security objectives to demand that India strive to expand its presence, reach, and voice both on land and in the sea in its extended neighbourhood. Today, New Delhi is actively seeking to create opportunities for mutual development in the Indo-Pacific, in the Arabian Sea and in Africa even as it engages like-minded nations in the pursuit and preservation of a rules-based order that promotes transparency, respect for sovereignty and international law, stability, and free and fair trade. In both these endeavours, the United States is an appropriate and willing partner. As Indian Prime Minister Narendra Modi stated in his address to the US Congress in 2016, “[a] strong India-US partnership can anchor peace, prosperity, and stability from Asia to Africa and from the Indian Ocean to the Pacific.”

The US has been a principal architect and the traditional guarantor of a liberal economic and maritime order in the Indo-Pacific. While the commentariat in the US and India might express apprehension at the idea of US President Donald Trump’s ‘America First’ strategy, this moment must be seen as an opportunity to rebalance the Indo-US relationship to reflect a real convergence of strategic interests, as opposed to an abstract engagement based on values alone and one that has disregarded the core interests of both countries.

Even as the phrase ‘free and open Indo-Pacific’ replaces ‘Pivot to Asia’, it is clear that the US will continue to play an important role in the region.

The US is acutely aware that disengagement is not an option when the contests of the region are, in fact, irrevocably moving both westwards and eastwards, and ever closer to its own spheres of influence. Thus, maintaining an influential presence and assets in the region effectively responds to its agenda. The US continues to retain an unequivocally large military presence in the Indo-Pacific. Moreover, Washington appears intent on finding ways to address shortfalls in its defence budget. The most recent defence bill specifically authorises the establishment of the new Indo-Pacific Stability Initiative to increase US military presence and enhance its readiness in the Western Pacific. As it remains an invested actor across the Middle East and in Afghanistan, and as it confronts an unrelenting North Korea, it must seek to empower regional like-minded nations such as India, which it recognises as having an “indispensable role in maintaining stability in the Indian Ocean region.”

US Secretary of State Rex Tillerson’s remarks at the Center for Strategic and International Studies a few days before his visit to India in the fall of 2017 is a testament to the continuity of the relationship: “The increasing convergence of US and Indian interests and values offers the Indo-Pacific the best opportunity to defend the rules-based global system that has benefited so much of humanity over the past several decades.” In a way, the title of his speech, “Defining Our Relationship with India for the Next Century”, should set the tone for the Indo-US relationship; and this new direction must not be influenced even by changes in leadership in the two capitals. It must first be imagined and then crafted as a multi–decade relationship that engages with the disruptions that abound in a multipolar world. This 21st century partnership must take into account each country’s economic trajectory, political values and strategic posture. The Indo-Pacific region will be the theatre in which this partnership will truly be realised. Both President Trump and Prime Minister Modi seem cognizant of this reality, and are intent on creating a new blueprint for this long-term engagement.

The terms of this bilateral cannot be limited to maintaining the regional balance of power. Rather, both countries, in concert with other likeminded powers, have a stake in enabling and incubating a peaceful, prosperous, and free Indo-Pacific. As these countries align in their desire to see a new regional architecture emerge, the following present themselves as the most crucial domains where a strengthened India-US The New India-US relationship can have deep and influential impact in a region that matters to the whole world:

Defence trade and technology

India’s designation as a ‘major defense partner’ of the US, and the Defense Technology and Trade Initiative provide a bilateral platform for defence trade and technology sharing with greater ambitions and at a faster pace. The ‘Make in India’ initiative strengthens scope for coproduction and co-development. The new appetite for business reforms is catalysing the largest volumes of foreign direct investment ever received by the country.

As India undertakes broader defence transformation initiatives, US defence companies can collaborate with New Delhi in its USD 150 billion military modernisation project. They can do this by jointly identifying the gaps and working together to equip Indian forces in the short run. This must be followed by cooperation on advanced technologies to help build up the country’s defence manufacturing base in the longer term.

Continuous progress on these fronts will enhance Indian capabilities, enable greater readiness of Indian forces, and level the playing field. Specifically, priority military hardware, technologies and areas for joint production need to be identified. Pending sales, such as that of the Guardian RPVs, need to be expedited, along with the micro unmanned aerial vehicle project. Further, the matter of quality and subsequent liability of equipment made in India through joint Indian-US ventures needs immediate attention. Additionally, the hesitation of US companies in sharing proprietary and sensitive technology is a concern that will need to be taken up on a case-by-case basis.

Maritime freedom and security

There is a rare moment of clarity in US and Indian policy circles on the importance of each other in this region. This is important if the countries are to act as “anchor of stability” in the Indo-Pacific.

It is time to begin conversations on new arenas of military cooperation, intelligence sharing, and strategic planning, to include advanced platforms like fifth-generation fighters, nuclear submarines, and aircraft carriers. Already, the two countries share a maritime security dialogue, which was instituted in 2016, as well as working groups on aircraft carrier technology and jet engine technology. They should be strengthened further and complemented by new working groups.

The annual Malabar exercise, which now formally includes a third partner, Japan, is another key feature of military cooperation, improving coordination and interoperability. Adding to these efforts are the Logistics Exchange Memorandum of Agreement, which will create maritime logistic links, and a white shipping agreement which promotes regional maritime domain awareness.

India-US maritime security cooperation is critical because it supports efforts that prioritise joint stewardship for ensuring freedom of navigation and unimpeded trade across a maritime common that is a major conduit for commercial and energy supplies, and is rich in natural resources, ecosystems, and biodiversity. Moreover, the Indian Ocean Region is extremely vulnerable to extreme weather events that are likely to increase significantly in the coming years. To address these developments, the US and India can cooperate to provide humanitarian assistance and disaster relief missions in the region.

Further, the two sides are committed to resisting the aggression that China has displayed in the South China Sea and elsewhere in the Indo-Pacific. Indo-US cooperation in the Indo-Pacific must also serve to affirm the principles of freedom of navigation and peaceful settlement of maritime disputes.

An expanded bilateral maritime partnership that involves transfer of technology to build India’s capacity in the Indian Ocean Region will help create a more stable and balanced security architecture there. This same partnership should explore new forms and formats of joint exercises and naval drills, such as anti-submarine warfare and maritime domain awareness missions, and encourage support for Indian leadership as “force for stability” in the IOR.

Blue economy

India and the US must also collaborate to promote a market-driven blue economy as a framework for growth and prosperity in the Indo-Pacific — home to bountiful hydrocarbon, mineral, and food resources, as well as burgeoning coastal populations.

India and the US can further elevate cooperation in marine research and development to create common knowledge hubs and share best practices. They can collaborate to develop mechanisms and foster norms that ensure respect for international law. The US can support regional collaboration in the Indo-Pacific to explore new and environmentally conscious investment opportunities in maritime economic activities and industries, such as food production and coastal tourism. Direct investments in Indian efforts, such as in identified coastal economic zones and the Sagarmala initiative, and participation in regional groupings like the Indian Ocean Rim Association, are two ways in which it can do so.

Effectively, the US can support India in creating a resilient regional architecture in the Indo-Pacific that places an emphasis on stability, economic freedom, growth and maritime security.

Connectivity

Today, states in the Indo-Pacific are in dire need of funds and expertise to improve infrastructure development and regional connectivity. Beijing has introduced its own project — the Belt and Road Initiative — through which it is investing in infrastructure initiatives across Eurasia and the Indo-Pacific. While connectivity is undoubtedly the primary aim of the project, it is increasingly clear that China seeks to expand its political and military influence in the region under the aegis of the BRI. To prevent the emergence of an Asian order inimical to the rules-based order, states must work together to forge a more inclusive approach towards an emerging regional architecture. This framework must be willing to accommodate everyone, including China, in connectivity projects from Ankara to Saigon, or the sea lanes seeking to link ASEAN with Africa.

For this to occur, pragmatic, democratic, and normative powers need to first create a political narrative within which Asia’s connectivity will take place. This narrative must underscore the importance of good governance, transparency, rule of law, and respect for sovereignty and territorial integrity. This can then be posited against strictly bilateral projects such as the BRI, which burden participating countries with debt and environmentally unsound projects. This alternative proposition to China’s BRI can then become the blueprint for connectivity and integration from Palo Alto to Taipei, Bengaluru to Nairobi, and Tel Aviv to Addis Ababa. The possibilities are endless and straddle hard infrastructure, digital connectivity, knowledge clusters, and value chains in
the Indo-Pacific space.

The India-US partnership has an important role to play in this respect. The American vision of the Indo-Pacific Economic Corridor supplements India’s Act East policy, and India-US cooperation in physical and soft infrastructure can link cross-border transport corridors; help create regional energy connections; and facilitate people-to-people interactions. Further, India and the US can cooperate as “global partners”, with US investment in Indian projects in Africa. Accordingly, the Asia-Africa Growth Corridor proposed by Japan and India can provide a common platform to all three states. Further, the US can nurture burgeoning regional partnerships between Japan, South Korea, Australia, and India, as these countries work towards building a consultative and collective Asian framework.

Digital connectivity, trade, and technology

Digital connectivity merits particular attention. After all, in the next decade, the largest cohort of internet users will emerge from the Indo-Pacific region. China is working aggressively to ensure that digital platforms in the region will be influenced by its own model for cyberspace premised on sovereignty. A major part of China’s BRI is the new “information silk road”, which facilitates investments by Chinese companies in South Asia’s internet architecture.

Accordingly, the US and India must cooperate to ensure that digital platforms, trade, connectivity and norms are shaped according to the democratic and open nature of the internet. To do so, they must create a framework that responds to developing-country imperatives such as affordable access, local content generation and cybersecurity. Already, Prime Minister Modi’s ‘Digital India’ programme provides a model for other states in the region to use internet-enabled technology to spur economic growth. India’s Aadhaar initiative, a unique digital identity programme, has already generated significant interest amongst South Asian states. American companies have increasingly sought to adopt standards and technologies to leverage this platform and build new markets in India. For example, WhatsApp has integrated with India’s unified payments interface to provide digital payments. Examples of other development initiatives are also abundant. Elsewhere, the Google RailTel initiative aims to provide WiFi at 400 railway stations across India by 2018.

India-US bilateral cooperation in using the digital as a tool for economic development and empowerment can be the template to connect the three billion emerging users in other developing countries in the Indo-Pacific and across Africa. As digital norms are institutionalised — whether pertinent to data flows and e-commerce, or related to critical infrastructure, defence, and public services — there is a real opportunity for India and the US to build and subsequently provide a model working relationship for the digital economy. Effectively, the US and India can propose a set of ‘Digital Norms for the Indo-Pacific’ that can be operationalised under their various dialogues and mechanisms for cooperation in the region.

Read here – https://www.orfonline.org/wp-content/uploads/2018/01/ORF-Heritage-Hudson.pdf

Books, Defence and Security, Indo-pacific, Non-Traditional Security, Research, Writing

The new India-US partnership in the Indo-Pacific: Peace, prosperity and security

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Water shortage has become a subject of intense public debate in the present political narrative on resource management and riparian rights. In an attempt to discern the divergence on core issues and mainstream media reporting, Re-imagining the Indus is a methodological study based on Media Content Analysis of the reporting on water issues related to the Indus, in the leading dailies of both India and Pakistan. This monograph seeks to capture the existing discourse and stimulate policy dialogue on the subject.

Read here – https://www.orfonline.org/research/re-imagining-the-indus-mapping-media-reportage-in-india-and-pakistan/

Books, Media, Research, Writing

Re-imagining the Indus: Mapping Media Reportage in India and Pakistan

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The BRIC countries are today an increasingly cohesive group of nations with a common vision and shared commitment to collaborate and shape a more equitable and prosperous world order. All four nations are leading economies, large markets and emerging knowledge creators; their interactions within the grouping and with other nations hold promise for their own people and for other developing countries.

This Edited Volume, the outcome of an event hosted by Observer Research Foundation, assesses the potential for cooperation between the BRIC countries on finance, energy, trade, technology and multi-lateral pluralism.

Read here – https://www.orfonline.org/research/bric-in-the-new-world-order-perspectives-from-brazil-china-india-and-russia/

Books, BRICS, Research, Writing

BRIC IN THE NEW WORLD ORDER – Perspectives from Brazil, China, India and Russia

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The financial crisis across the globe and the ensuing responses by nations and non-state actors has dominated both public consciousness and political debate in the recent past. The discussion on suitable stimulus packages, the causes for the financial disorder and future restructuring of the financial systems has often been dominated by the rhetoric of specific constituencies serving individual interests even as it loses sight of the substantive argument. In India too, the eagerness to commend our regulatory practices has tended to brush the larger debate on the actual economic fallout of the crisis under the carpet.

The financial crisis across the globe and the ensuing responses by nations and non-state actors has dominated both public consciousness and political debate in the recent past. The discussion on suitable stimulus packages, the causes for the financial disorder and future restructuring of the financial systems has often been dominated by the rhetoric of specific constituencies serving individual interests even as it loses sight of the substantive argument.

In India too, the eagerness to commend our regulatory practices has tended to brush the larger debate on the actual economic impact of the crisis under the carpet. As the world economy lurches ahead, the fallout on the country and the innovative measures necessary to guide the Indian economy through this downturn need to take centre stage. The recently concluded G-20 summit at London too did not result in any concrete measures and the outcome was a litany of intentions rather than actions.

This paper examines the “conservative and prudent practices” within the Indian financial sector that cushioned the direct impact of the institutional meltdown witnessed in the West and discusses the measures that the country must pursue to regain the growth momentum and help restructure the global financial order. It seeks to highlight some of the priorities that must guide India’s responses on the path to economic recovery.

The main policy recommendations are as follows:

(i) Give highest priority to public investment in infrastructure and social sector;

(ii) Ensure credit for private sector to enable participation in infrastructure and manufacturing sectors. This would generate employment and spur GDP growth;

(iii) Encourage public and private investments through tax and other incentives in Rural Development and Agriculture sectors. Make supply chain infrastructure a national mission;

(iv) Develop alternate business models to ‘SEZs’. Policy must encourage ‘rural business hubs’ along with development of rural markets.

(v) Develop domestic BPOs and IT services markets. Special emphasis on development of IT infrastructure in rural and peri-urban areas;

(vi) India must seek out a new geo-economic space for itself through regional and international trade arrangements.

Read here – https://www.orfonline.org/research/india-and-the-economic-meltdown-challenges-and-possible-responses/

Indian Economy, Research

India and the Economic Meltdown: Challenges and Possible Responses

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