GS Paper: GS2-18.Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

What’s the news?

• India, the world’s largest democracy, has taken a momentous stride onto the global stage by hosting the G-20 summit, a pivotal forum fostering international cooperation.

Central idea

• India’s hosting of the G-20 summit takes center stage, as the UK underscores its commitment to free trade and cooperation. The growing Indian middle class emerges as a potential boon for UK businesses. Bilateral trade thrives with an eye on a Free Trade Agreement, while cultural ties and the Alive with Opportunity campaign enrich the partnership.

Growing Indian middle class and bilateral trade relations

• Projected Middle Class Surge: By 2050, India’s middle class is set to expand to a quarter of a billion consumers, signaling a significant opportunity for the UK.
• Thriving Trading Partnership: The UK and India currently enjoy a thriving trading relationship that was valued at £36 billion in the year 2022.
• UK as Top Investment Source: Fresh statistics from the UK’s Department for Business and Trade underscore India’s sustained status as the second-largest source of investment projects for the UK. In the last financial year, 118 new projects emerged, contributing to the creation of 8,384 jobs across the UK.
• Reciprocal Trade and Investment: The partnership between the UK and India goes beyond investment, as the UK is also India’s sixth-largest investor. Over the period from April 2000 to March 2023, the UK invested $34 billion in India through foreign direct investment.
• Mutually Beneficial Business Ventures: The interplay of trade and investment benefits both nations. With 618 UK companies operating in India, the cumulative turnover amounts to approximately $50 billion, and they collectively employ around 466,640 individuals directly as of 2021.

Advancing an Ambitious Free Trade Agreement and Strengthening the Partnership

• Ministerial Meeting: Scheduled discussions with Commerce Minister Piyush Goyal in India focus on progressing an ambitious Free Trade Agreement (FTA) to elevate bilateral trade relations.
• UK’s Negotiating Expertise: Leveraging the UK’s trade negotiation track record, the objective is to expedite the FTA process with India. Addressing complexities in goods, services, and investment is crucial to establishing an encompassing agreement ensuring fairness and mutual benefit.
• Diverse Partnership: Beyond trade, the UK-India partnership extends across culture, sports, education, and tourism, as epitomized by Prime Minister Narendra Modi’s living bridge metaphor.
• Cinematic Bonds: Shared enthusiasm for Bollywood showcases the connection. The UK boasts one of the world’s largest Bollywood audiences. Landmarks like St. Paul’s Cathedral and Blenheim Palace feature in iconic films like Kabhi Khushi Kabhi Gham, cementing the cinematic relationship.
• Vibrant Indian Diaspora: The Indian diaspora, over 1.6 million strong, plays a pivotal role in the UK. Contributions span education to the workforce, with Indian students forming a significant part of the UK’s international student community, reinforcing enduring ties.

Unveiling the Alive with Opportunity Campaign

• Campaign Launch: The UK proudly introduces the £1.5 million Alive with Opportunity marketing campaign, serving as a tribute to the robust bond between the UK and India.
• Celebrating Exchange: This initiative is dedicated to celebrating the perpetual exchange of people, ideas, and culture between the two nations.
• Trade Growth Objective: Aligned with the vision to double trade with India by 2030, the campaign aims to stimulate interest and demand for UK goods and services.
• Business Growth Focus: The campaign also seeks to boost the UK’s potential for business growth through strengthened trade ties with India and by attracting fresh Indian investments.
• Illuminating Connections: Over the course of the upcoming year, the campaign will cast a spotlight on the dynamic business, trade, cultural, and sporting connections between the UK and India across diverse platforms.
• Emphasizing Opportunities: By highlighting these facets, the campaign underscores the significant opportunities embedded within the vibrant partnership.

Conclusion

• The India-UK-UKrtnership stands as a shining example of successful collaboration, underscored by burgeoning trade, investment, and shared values. As both nations continue their journey toward deeper ties, the prospects for mutual growth and prosperity appear brighter than ever.

What’s the news?

• India’s pivotal role in the upcoming BRICS summit in South Africa from August 22 to 24 underscores its evolving diplomatic challenges and potential impact on global geopolitics.

Central idea

• The global geopolitical stage is once again witnessing the active participation of India. With the BRICS (Brazil, Russia, India, China, and South Africa) summit around the corner, India finds itself at a crucial juncture of international diplomacy. This summit not only tests the waters of Indian diplomacy but also holds clues to the trajectory of global geopolitics.

All you need to know about BRICS

• BRICS is an acronym for the grouping of the world’s leading emerging economies, namely Brazil, Russia, India, China, and South Africa.
• Jim O’Neill, a British economist, coined the term ‘BRIC’ to describe the four emerging economies of Brazil, Russia, India, and China. He made a case for BRIC on the basis of econometric analyses projecting that the four economies would individually and collectively occupy far greater economic space and become among the world’s largest economies.
• The importance of BRICS is self-evident: it represents 42% of the world’s population, 30% of the land area, 24% of global GDP, and 16% of international trade.
• The five BRICS countries are also members of the G-20.

Agenda of the BRICS

The regular annual summit and deliberation of BRICS has considerably widened over the years to encompass topical global issues such as:

• International terrorism
• Climate change
• Food and energy security
• International economic and financial situation
• Reform of the Bretton Woods Institutions
• Trade protectionism and the WTO

Significance of BRICS for India

• Economic Cooperation: BRICS countries together account for a substantial portion of the world’s population and GDP. For India, being part of this grouping allows for enhanced economic cooperation, trade, investment, and collaboration in various sectors, contributing to economic growth and development.
• Global Influence and Voice: BRICS provides India with a platform to engage on the global stage and express its views on important international issues. As a member of BRICS, India’s voice is amplified in discussions related to global economic governance, trade, climate change, and more.
• Geo-political: BRICS offers India the opportunity to diversify its economic and diplomatic engagements beyond traditional partners. It helps India strengthen ties with fellow emerging economies, reducing dependency on a few major economies.
• Strategic : The BRICS Summit provides India with a forum for engaging in strategic dialogues with like-minded countries on various geopolitical and security matters. This is particularly important given India’s strategic interests in its neighborhood and beyond.
• Trade and Investment Opportunities: BRICS countries offer substantial trade and investment opportunities for India. The collective market potential of these nations can help Indian businesses expand their global footprint and increase exports.
• Development Cooperation: BRICS member countries often cooperate in areas of mutual interest, such as development financing, infrastructure projects, and technology sharing. This cooperation can benefit India’s efforts to address its development challenges.
• Technology and Innovation Sharing: BRICS cooperation can facilitate the sharing of technology, innovation, and best practices among member countries, aiding India’s efforts to modernize its industries and infrastructure.
• Joint Efforts on Global Challenges: BRICS members often work together to address global challenges, such as climate change, sustainable development, and poverty alleviation. Collaborative efforts can amplify India’s contributions to these issues.

Achievements of BRICS

• Establishment of the New Development Bank (NDB): BRICS countries established the New Development Bank in 2014 to fund infrastructure and sustainable development projects in member countries and other emerging economies.
• Contingent Reserve Arrangement (CRA): The CRA was established to provide member countries with financial support in times of crisis. It acts as a mechanism to address short-term liquidity pressures and enhance financial stability among BRICS nations.
• Economic Cooperation and Trade: BRICS countries have increased economic cooperation and trade among themselves.The BRICS Trade Fair promotes business-to-business interactions, showcasing products and services from member countries and facilitating trade deals.
• Joint Efforts on Global Challenges: BRICS members have collaborated on addressing global challenges such as climate change, sustainable development, and poverty alleviation. BRICS members issued a joint declaration at the 2018 summit in South Africa, emphasizing their commitment to the Paris Agreement and sustainable development.
• Academic and Cultural Exchanges: BRICS countries have promoted academic and cultural exchanges, fostering mutual understanding and collaboration among scholars, students, and cultural groups from member states.The BRICS Network University fosters collaboration among universities in member countries, promoting academic research and exchange programs.
• Strengthened Global South Voice: BRICS has become a platform for emerging economies to assert their interests and perspectives on global issues. It has strengthened the representation of the Global South in international discussions.
• Infrastructure Investment: The BRICS NDB has funded various infrastructure projects in member countries, contributing to development and job creation while addressing critical infrastructure gaps.The NDB approved a $1 billion loan to South Africa for renewable energy projects, supporting the country’s transition to cleaner energy sources.

15th BRICS Summit 2023

The 15th BRICS Summit was held in Johannesburg, South Africa, from 22-24 August 2023.

The important highlights of the Summit are as follows:

• Theme: “BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development and Inclusive Multilateralism”.
• Gifts from India: The PM of India gifted Bidri Surahi, Nagaland Shawl, and Gond Paintings to BRICS leaders.
• BRICS-Africa Outreach and BRICS Plus Dialogue: India participated in the BRICS-Africa Outreach and BRICS Plus Dialogue:
• Participation: The meeting included leaders from BRICS countries along with guest countries from Africa, Asia, and Latin America.
• Invitation for International Initiatives: India extended invitations for countries to join international initiatives like the International Solar Alliance, One Sun One World One Grid, Coalition for Disaster Resilient Infrastructure, One Earth One Health, Big Cat Alliance, and Global Centre for Traditional Medicine.

Joint Statement: Leaders express support for India’s G20 Presidency.

• Support for G20 Presidencies: Backed Brazil and South Africa’s G20 Presidencies in 2024 and 2025, focusing on global South representation.
• Opposition to Unilateral Measures: Condemned unilateral coercive actions, advocated inclusive multilateralism, and upheld international law.
• Global Governance Enhancement: Aimed to improve global governance through agility, efficiency, representation, and democratic accountability.
• Human Rights Cooperation: Committed to cooperating on human rights under equality and mutual respect principles within BRICS and international platforms.
• Agriculture and Food Security: Strived for fair agricultural trade, ending hunger, sustainable agriculture, and resilient practices.
• UN Reform: Supported comprehensive UN reform, including the Security Council, for enhanced democracy, effectiveness, and developing country representation.
• Peaceful Conflict Resolution: Committed to peaceful dispute resolution through dialogue and inclusiveness while recognising women’s participation in peace processes.

Expansion of BRICS

More than 40 countries have expressed interest in joining BRICS, and 22 have formally asked to be admitted. Therefore, leaders of the BRICS in the 15th Summit have agreed on mechanisms for considering new members.

• First phase of expansion: The countries including Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE have received invitations to join BRICS. This new membership is set to take effect from January 1, 2024.

Reasons for the BRICS expansion:

• China’s strategic move for global influence.
• FOMO: Fear of missing out on a visible club.
• Limited options in other groups.
• Anti-western sentiment and Global South unity

Challenges faced by BRICS

• Divergent National Interests: BRICS members have diverse economic and political priorities, which can sometimes lead to conflicting interests. Example: China’s emphasis on export-led growth might conflict with India’s efforts to reduce its trade deficit with China, creating economic tensions within the group.
• Economic Inequalities: Challenge: Economic disparities among BRICS countries can hinder equitable distribution of benefits from cooperation. Example: South Africa, with a smaller economy compared to China and India, might find it challenging to compete for investment and trade opportunities within the group.
• Geopolitical Competition: Geopolitical rivalries and regional conflicts among BRICS members can strain cooperation. Example: China’s territorial disputes in the South China Sea have led to tensions with other BRICS countries like India, which has concerns over freedom of navigation.
• Differing Political Systems: BRICS countries have different political systems and levels of political freedom, impacting their approaches to governance and international relations. Example: Russia’s political landscape differs significantly from the democratic systems in Brazil, India, and South Africa, potentially affecting consensus on certain issues.
• Infrastructure and Connectivity Gaps:  Inadequate infrastructure and connectivity gaps within BRICS countries can hinder trade and collaboration. Example: Insufficient transport and logistics infrastructure in some member countries can hinder smooth movement of goods and services.
• Institutional Limitations: The institutional structure of BRICS, including the New Development Bank, might face limitations in terms of resources, decision-making processes, and lending capacity. The NDB might struggle to finance large-scale projects without relying on external resources beyond the BRICS nations.
• Economic Volatility: Economic fluctuations and market vulnerabilities can impact the stability of BRICS economies. Example: The global economic recession triggered by the COVID-19 pandemic affected BRICS nations differently, leading to varying levels of economic contraction and recovery.
• Regional and Bilateral Disputes: Regional and bilateral disputes among BRICS members can strain the group’s unity and shared objectives. Example: The Doklam standoff between India and China in 2017 created tensions and highlighted potential areas of conflict within BRICS.
• Leadership Rotation and Priorities: Each BRICS member country holds the rotating presidency for a year, which can impact the continuity of the group’s priorities. Example: Each new presidency might emphasize different areas of cooperation based on its national interests and foreign policy goals.

Reforms needed in BRICS

• Inclusion of Civil Society and Private Sector: Involve civil society organizations and the private sector in discussions and initiatives to broaden perspectives and encourage innovation.
• Promotion of Sustainable Development Goals (SDGs): Align BRICS activities more explicitly with the United Nations’ SDGs to foster sustainable and inclusive development across member countries.Launch joint projects on renewable energy deployment across member countries, addressing SDG 7 (Affordable and Clean Energy).
• Humanitarian and Disaster Response Collaboration: Establish a BRICS Disaster Response Task Force to coordinate resources and expertise during natural disasters.
• Expanding Membership or Partnerships: Consider the possibility of expanding the membership or establishing strategic partnerships with other emerging economies that share similar interests and values.
• Promotion of Digital Connectivity: Foster digital connectivity and technological collaboration among BRICS members to capitalize on the benefits of the digital economy.
• Regular Assessment of Goals and Progress: Periodically evaluate the achievements, challenges, and relevance of BRICS objectives to ensure they remain aligned with member countries’ evolving interests.
• Climate Change and Environmental Cooperation: Establish a BRICS Environmental Fund to finance joint environmental protection and conservation projects.

Way Forward for India

• BRICS’ Role: BRICS can serve as an alternative platform to address global governance deficiencies, despite its imperfections. It could initiate discussions on more inclusive global governance.
• Navigating Complexity: India’s geopolitical choices are complex due to its affiliations in various forums. India’s participation in non-Western platforms reflects a response to historical inequities.
• Balancing Geopolitical Shifts: As competing blocs emerge, India must balance affiliations between a China-centric and a West-centric world order. Striking this balance is crucial to India’s global positioning.
• Managing China’s Rise: India needs to consider whether its actions inadvertently support China’s ascent. While India must moderate China’s influence, it should avoid alienating other global South nations.
• Safeguarding National Interests: India’s active participation in global forums must align with promoting equitable global governance while ensuring its national interests are safeguarded.

Conclusion

• Amid global uncertainties, India’s role in the BRICS summit gains prominence. Balancing between non-Western forums and Western ties, India aims for equitable global governance while managing China’s ascendancy. These decisions could mold India’s path and impact the evolving international landscape.

What’s the news?

• On the 75th anniversary of the Treaty of Friendship, Switzerland and India commemorate a historic alliance that has fostered achievements in diverse sectors and look forward to deepening collaboration in areas like innovation, sustainable development, and healthcare.

Central idea

• In the annals of diplomatic history, the Treaty of Friendship and Establishment signed between Switzerland and India in 1948 stands as a testament to the enduring bond that has flourished for 75 years. As we commemorate this significant milestone, it is both opportune and prudent to reflect on the accomplishments achieved and envision the promising avenues that lie ahead.

What is The Treaty of Friendship and Establishment?

• The Treaty of Friendship and Establishment between Switzerland and India, signed in 1948, holds historical significance as one of India’s earliest diplomatic agreements after gaining independence.
• It marked the establishment of formal diplomatic ties between the two nations and set the tone for their subsequent bilateral relationship.
• This treaty emphasized mutual respect and cooperation, laying the groundwork for collaborations across various sectors such as vocational training, economic investments, technological exchange, and sustainable development.

Historical Significance and Diverse Achievements

• India’s Earliest Diplomatic Endeavors: The 1948 Treaty marked one of India’s earliest diplomatic endeavors and established a foundation of mutual respect. The ensuing decades witnessed fruitful cooperation in various sectors.

• Investments in Skill Development: Switzerland’s investment in vocational training institutes and rail wagon factories aided India’s workforce development.
• Milk Cooperatives: The establishment of milk farmer cooperatives in Kerala contributed to the dairy industry’s growth.
• Technological Synergy: India’s IT expertise supported global undertakings, including Y2K bug resolution.
• Climate-Friendly Innovation: Swiss-Indian collaboration led to Limestone Calcined Clay Cement (LC3), a low-carbon cement alternative.
• Economic Partnership: Switzerland’s position as India’s 12th largest foreign investor fostered economic growth.

Future Trajectory in the Swiss-Indian Partnership

• Swiss-Indian Innovation Platform:
• An upcoming milestone, the Swiss-Indian Innovation Platform, is a testament to the commitment of both nations towards fostering innovation.
• By harnessing the strengths of India’s technological advancements and Switzerland’s innovation prowess, this platform aims to address pressing global challenges.
• Notably, the focus on combating Antimicrobial Resistance (AMR) showcases the partnership’s practical relevance in tackling contemporary healthcare concerns.

• Sustainable Development:
• Both nations share a steadfast commitment to sustainable development.
• Building on their historical collaboration, they are likely to channel their efforts towards joint initiatives that promote eco-friendly practices, address climate change, and ensure responsible resource utilization.
• Healthcare Cooperation:
• The partnership’s trajectory is expected to be marked by deeper collaboration in healthcare.
• Drawing upon India’s technological prowess and Switzerland’s pharmaceutical innovations, joint ventures can pave the way for groundbreaking medical solutions, contributing to global health and well-being.
• Investment and Trade:
• Switzerland’s position as India’s 12th largest foreign investor underscores the depth of economic engagement.
• With over 330 Swiss companies actively operating in India, this partnership has facilitated investment, job creation, and technology transfer, contributing to India’s economic growth.\
• Free Trade Agreement:
• Anticipating the horizon, discussions surrounding a Free Trade Agreement between the European Free Trade Association (EFTA) and India hold immense promise.
• This agreement not only deepens trade ties but also catalyzes increased investments and innovation in both regions, boosting economic vitality.
• Shared Values, Shared Growth:
• Built upon the foundation of shared values, the economic relationship is characterized by mutual respect and common interests.
• The economic collaborations not only boost trade figures but also underscore the friendship’s ability to drive prosperity for both nations.

Conclusion

• As we celebrate this milestone, the trajectory ahead appears promising, anchored in sustainable development, innovative solutions, and cooperative endeavors. It is a tryst with destiny that not only celebrates past achievements but anticipates an even brighter future for the intertwined destinies of Switzerland and India.

Also read:

India Switzerland Relations