India's lack of opposition to Russia's invasion of Ukraine is becoming difficult to sustain.
In a much more minor matter Gessler from India has commented:
"It's been an eventful few weeks for India-Australia relations.
The biggest news was probably the signing of a Free Trade Agreement (called Economic Cooperation & Trade Agreement or ECTA. "Ecta/Ekta" meaning Unity in the Hindi language), while usually deals like this would be solely relegated to issues of trade & economy, this FTA also has a Strategic tinge to it - as summarized in some detail here in this Financial Express article by Harsh V. Pant, VP of the Observer Research Foundation (ORF), India's premier strategic think-tank:
In addition, there have
also been several MoUs signed for the setting up of Critical Mineral supply chains (especially Lithium), where Australia is a huge supplier of the
materials and India has a growing requirement. I'd imagine these deals are
following up on the coattails of objectives set by the QUAD summit in September
2021."
COMMENT
India joined the QUAD on the basis that the near enemies (US, Australia, Japan) of my enemy (China) are my friends.
But now those 3 QUAD members need to decide whether the friend (India) of our near enemy (Russia) is now not our friend.
Since February 2022 India's lack of criticism of Russian aggression towards Ukraine seems to be returning India to India's previous pro-Russian pseudo "non-aligned" status. With India economically supporting expansionist Russia, India's ECTA with Australia to some extent maintains ambivalent relations.
Wiki advises:
"In March 2022, when Western nations imposed economic sanctions on Russia in the aftermath of its invasion of the Ukraine, India and Russia explored alternative payment system due to exclusion of most Russian banks from SWIFT and Visa/Mastercard. Officials from both countries were discussing accepting RuPay and MIR cards. The Reserve Bank of India and the Bank of Russia seek to facilitate financial transactions through an independent rupee-ruble exchange system, particularly for the purchase of sunflower oil by India, and the export of petroleum products and fertilizers by the Russian Federation. India also depends crucially on Russia for its defence equipment and parts. Additionally, Indian Oil Corp. had reportedly reached a deal to buy 3 million barrels of oil from Russia’s Rosneft at a 20% discount to global prices.[58][59]"
It remains to be seen whether a Russia aligned India could be ejected from the QUAD.
9 comments:
Hi Pete,
Before actually addressing the possible reasons behind why India is doing what it's doing, it's important to make a few notes regarding the Indo-Russian economic relationship.
1) It's comparatively minor. Despite the decades-long strategic partnership, India's bilateral trade with the other Quad partner countries actually far outstrips the trade with Russia - United States ($146 billion), Japan ($18 billion), Australia ($24 billion) compared to Russia ($9 billion) - not to mention India enjoys a good trade surplus with the US which it doesn't get from Russia.
2) India's energy imports from Russia are miniscule. Far as oil/gas is concerned, the Middle East supplies India with about 80% of its needs, the US a further 7-8% while imports from Russia amount to less than 1% of the total. In the words of the Indian Foreign Minister "Europe buys more oil from Russia in an afternoon than India does in a month".
So its important to note that the Indian economy & energy matrix is actually fairly insulated from the Russian market. Whatever the reason why India is not interested in 'dumping' the Russian relationship, its not economic or energy related. It's strategic.
Of course with rising fuel prices, if there is a good deal to be made it will be made. Plus, any deal that takes existing production of Russian oil off the market at a discount price (meaning the Russians sell at a loss) is something even the US is okay with:
https://www.hindustantimes.com/world-news/indias-purchase-of-russian-oil-is-no-violation-of-sanctions-says-us-101649738874866.html
Which brings us to the strategic reasons why India thought it best not to abandon its 'old friend'...I must say I do not have a definitive answer, but several possibilities exist:
a) Russia & China becoming a unified coalition with deeply integrated strategic & economic linkages is a nightmare scenario for India (and certainly not a preferable outcome even for the Quad, I'd reckon...though the risk to the other three from such a coalition may not be as profound as to India ) - so any chance to drive a wedge between the two will be taken. If that means offering the Russian economy an "off ramp" which doesn't lead into Xi Jinping's lap, so be it - I think India is signaling its interest to at least partially present itself as an alternative to China for anchoring Russia's spiraling economy.
b) If and when the time comes for Russia to liquidate control over some of its critical strategic assets in exchange for economic breathing room (in the form of loans, grants or creative currency swap methods) - it would be in India's interest to prevent the likes of RUBIN or MALAKHIT Submarine Design Bureaus, NPO SATURN or KLIMOV turbofan engine companies etc from being acquired by the Chinese Government, together with their Intellectual Property Rights. India would probably prefer to acquire them instead.
Or a combination of A & B.
Continued...
..Continued from above
That said, India is actually not the only QUAD member-state that's unwilling to end economic ties with the Russians:
https://www.cnbc.com/2022/04/01/japanese-prime-minister-decided-weeks-ago-to-keep-russian-gas-reuters.html
"Japanese Prime Minister Fumio Kishida’s announcement on Thursday that he would not abandon a massive Russian gas project was decided weeks ago when he told top officials in private he wouldn’t risk Japan’s energy security."
Though Russia's share of Japanese energy imports is only about 8-10% (still much greater than India's), the Sakhalin LNG projects are crucial for Japan's decarbonization agenda.
++++
As of a QUAD without India, I'd think any geo-economic containment of China would either fail or at the very least introduce a whole degree of uncertainty in the minds of several Asian & South-East Asians nations if India were not on board with it.
But I doubt it would happen though - India is no more dependent or friendly with Russia today than it was back in 2017 when the "QUAD 2.0" started, if anything its less friendly now - thanks to being spited by Russia by way of exclusion from the 'Extended Troika' peace process for Afghanistan.
Thanks Gessler
For your very valid comments at Apr 17, 2022, 6:37:00 PM and Apr 17, 2022, 6:37:00 PM.
I admit I was intentionally a bit harsh in order to obtain your perspective on Quad issues since Putin's invasion of Ukraine.
I'll turn your comments into an article soon.
Regards Pete
Hi,
It's a bit ridiculous to think of Quad as an anti-Russian group rather than anti-China. Further, three nations out of four in the Quad are Asian powers, and the other who has an interest in Asia.
I understand the US positions, and even of Japanese. Japanese have a history with Ruskies, they fought wars against them. But even they are not so hell-bent on molding Indian FP toward Russia. And they have a lot of capital, leverage, and influence in India. Indians actually listen to Japanese advice, wife of the Indian foreign minister is of Japanese origin. But even that aside, they have alot of influence because of all low interests loans. And when something they say, we take it very seriously.
On other hand, it is Australia, like India, the Aussies never had a problem with Ruskies (not Soviets), like India, they don't face any kind of short or long-term threat from Russia. Like India, Australia is an Asian power, but the people of Australia want from their govt that the govt should decide foreign policy based on what threat matrix Europeans face? That totally bonkers my mind.
When Russians actually were supporting the Taliban in Afghanistan, and in backchannels, and we were telling Russians, we are not happy about it ( and we done alot of things in Afg which are very against Ruski interests which I don't want to mention here, and that's why Ruskies were propping Kashmir issue). But Aussies have not uttered a word about it, which is actually a national security threat to Australia from terrorism PoV.
Did the Aussies actually outsourced their whole foreign policy to Washington or to Europe, after the end of the day by de facto Russia is a European power, and Australia is an Asian power. I don't think Poland or Germany or France (might be the UK), going to come if China invades Australia.
Germany doesn't care about Australia, they not even cared about Ukraine before the invasion, thinking they care about Aussies is daydreaming. People are celebrating that the germans increased their defense budget, are they favoring us by increasing the budget? They facing a threat matrix, and deal with it according to that.
And India was always alone in dealing with China, in Nathu La, in Cho La, in Sumdorong Chu, during operation Checkerboard, in Depsang 2013, in Operation Juniper, and during OP Snow Leopard. Indians are very resilient and realistic people, we are capable of dealing with and managing it. We are not is any blindness that Quad is a treaty alliance, Indians know it's not, Indians are more like let's see whatever little we or anyone else can do against China.
One thing to point out, during OP Leopard, the Russians actually offered that the whole war reserve of Russia is open for India. Just a tidbit to ponder upon.
The world is not black and white, if Aussie people think it is, then its good they outsourced there security to Washington, otherwise even Jesus not able to save them.
Pete
I agree India is not being a great international citizen with regard to Russia sanctions. However the same could also be said of Germany and a few others.
All nations form their foreign policy based on their own self interest, including Australia. Other forces can also influence it, including past history and even business corruption. The oil industry is rife with corruption internationally, including, but not limited to, India.
Arpit
“ On other hand, it is Australia, like India, the Aussies never had a problem with Ruskies (not Soviets), like India, they don't face any kind of short or long-term threat from Russia. Like India, Australia is an Asian power, but the people of Australia want from their govt that the govt should decide foreign policy based on what threat matrix Europeans face? That totally bonkers my mind. ”
We will have to agree to disagree and I am interested in the timeframe when you formed this view? Australia has had a hostile relationship with Soviet Union and Russia dating back to the cold war in the 1950s. Read of “the Petrov Affair”. When I was a schoolboy Soviet submarines were photographed in the Tasman Sea. In my experience this did NOT stop at the end of the cold war. At best I think Australia was friendly with Russia for a few short years when Yeltsin was in power, but not before or after.
In this respect I think Australia is different to India. Australia after Whitlam got on reasonably well with China until quite recently, whereas the relationship with Russia was always frosty. It may be a valid criticism that Australia too blindly followed first the UK and then US in this respect. Also Australia’s view of China was too optimistic for too long. Whatever the reason though, when I worked in government, Australia was never friendly to Russia.
Arpit I do agree with you that all countries must set their foreign policy based on rational self interest. Done intelligently, this should be based on long term self interest, not short term. Hence Australia has many reasons to pursue friendly ties with India, which I support. That is true in both economics and military fields. We do not compete in markets; our economies compliment.
Likewise with Australia and Japan. This is why I think the QUAD can be a stable relationship and should be developed in both military and economic spheres. However I would agree that USA must step up in QUAD in economic terms. USA must be willing to trade more reciprocally if it wants other nations to participate in QUAD fully.
As Gessler rightly mentions, the picture is nuanced as are most foreign policy conundrums.
India's energy reliance on Russia is so laughably low that, Jaishankar rightly mocked the US for making it a sticking point.
I remember telling you that diplomatic memories are elephantine. The west has done itself no favours with its hypocritical lecturing and blatant power politics based arm twisting, all under the guise of 'promotion of human rights' (another risible claim on so many fronts, let us leave it there).
The bottomline remains that US support for India has been tepid at best with the grandstanding part getting to a point where a Buddha or a MK Gandhi could become tetchy.
Nations will look out for their own interests first like Germany and France have done with Russian energy purchases.
India's position in the quad should stand on its own merits and frankly the US could do itself and everyone a great favour by allowing Australia and Japan to lead the quad dynamics along with India. The US could quietly and passively get what it wants rather than stick to incorrigible grandstanding behind any lectern they can grab.
I would like to point out the following.
1/ Russia is an Asian power (as well as an European power). A quick look at a map should suffice.
2/ USA is physically closer to Asia than Australia is. Note : Alaska is a US state. Again - look at a map.
3/ India has a reasonable amount of high end Russian military gear. Some of this gear requires Russian support to keep viable. What do you do with a fighter jet that needs a new engine that can only come from Russia? What do you do with dozen’s of such fighter jets? What do you do if it’s actually just a $20 part? You can buy grain, gas, oil etc from other countries. You can reverse engineer a bolt out of a machine gun. Reverse engineering a combat fighter jet engine is not for the faint hearted (ask China).
I agree with Anonymous and think that Russia’s military technology capability, rather than its economic power, explains India’s position. In this regard, past reluctance of western powers (except France) to sell their latest military technology to India may have been a bit self defeating.
That being said, I think the course of the war in Ukraine demonstrates that it may be time to call Russia’s bluff on their illusions of military greatness. Since the cold war Russia has struggled to maintain even part of the huge military it inherited from the former Soviet Union.
Putin may still dream of a Russian Empire, but the simple fact is that Russia does not have a big enough economy to finance the dream. Russia’s economy is not much bigger than Australia’s - about the size of Canada’s. Canada occupies a huge landmass too, but nobody expects them top be a military superpower.
Even worse Russia is spending a lot of its defence budget maintaining old Soviet ships, tanks and planes that Ukraine is demonstrating have no place on a modern battlefield, whether land, sea or air. The Moskva was big, heavily armed, and yet had an inferior radar and anti-sea-skimming missile defence to what we have on our Anzac Frigates. No phased array, no decoys. Not surprising, considering that the Moskva was a design contemporary of our preceding Adelaide (Perry) class of cold war frigates.
As western sanctions bite on Russia’s oil exports, Russia’s economic woes are going to get worse. Without oil and gas exports Russian exports would be comparable in value to Indonesias. So what to do about Russia? How do you treat a former superpower with a wounded ego that still has enough nukes to start world war three? Clearly appeasement is not the answer.
One solution is to encourage client states to leave Russia’s orbit. India buying weapons from Russia is a good example. It would benefit India and the west and weaken Russian arms exports if that were to stop. The west needs to be willing to offer India better alternatives, such as SSNs. France? Perhaps this is the AUKUS consolation prize Australia should encourage. Support France selling nuclear Barracudas to India.
Hi Anonymous [at Apr 19, 2022, 9:29:00 PM]
See my response at https://gentleseas.blogspot.com/2022/04/france-barracuda-ssn-secrets-to-russia.html
Regards Pete
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