[op-ed of the day] Not by wishful thinking

Mains Paper 3 : Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : How to make India a 5 trillion Economy


Note- Op-ed of the day is the most important editorial of the day. Aspirants should try to cover at least this editorial on a daily basis to have command over most important issues in news. It will help in enhancing and enriching the content in mains answers. Please do not miss at any cost.

CONTEXT

In early June, at a NITI Aayog meeting, Prime Minister Narendra Modi set a clear and bold economic target — to grow India into a $5 trillion economy by 2024. It is now for ‘Team India’, as the meeting was bannered, to translate this target into a plan and policies and programmes.

How realistic is this dream?

  • It is ₹350,00,000 crore of gross domestic product (GDP) at current prices, at ₹70 to a U.S. dollar exchange rate. India’s (provisional) GDP in 2018-19 at current prices is ₹190,10,164 crore (or $2.7 trillion), which means the annual per capita income is ₹1,42,719, or about ₹11,900 per month.
  • The target implies an output expansion by 84% in five years, or at 13% compound annual growth rate. Assuming an annual price rise of 4%, in line with the Reserve Bank of India’s inflation target, the required growth rate in real, or inflation-adjusted, terms is 9% per year.
  • To get a perspective, India officially grew at 7.1% per year over the last five years, but the annual growth rate never touched 9%. 

Comparison with Asian Countries

China – China, with a historically unprecedented growth record in its best five years, during 2003-07, grew at 11.7%;.

South Korea – South Korea, between 1983 and 1987, grew at 11%.

How to grow at such a fast pace

No country grew at such a pace without mobilising domestic saving and raising fixed investment rates.

1.Savings and investment rates required

  • In the last five years, on average, the domestic saving rate was 30.8% of gross national domestic income (GNDI), and the investment rate (gross capital formation to GDP ratio) was 32.5%.
  • Assuming the underlying technical coefficients remain constant, a 9% annual growth rate calls for 39% of domestic saving rate and 41.2% of investment rate.
  • Correspondingly, shares of private consumption need to shrink to about 50% of GDP from the current level of 59% of GDP at current prices, assuming foreign capital inflow remains at 1.7% of GDP.
  • In other words, India will have to turn into an investment-led economy as it happened during the boom last decade (2003-08) before the financial crisis, or like China since the 1980s.
  • Granting that rapid technical progress or changes in output composition could reduce the required incremental capital-output ratio (ICOR), it nevertheless will call for a nearly 8-9 percentage point boost to saving and investment rates.

The low domestic saving rate

History shows that no country has succeeded in accelerating its growth rate without raising the domestic saving rate to close to 40% of GDP.

FDI is not an alternative – Foreign capital can fill in some vital gaps but is not a substitute for domestic resources.

A decline in savings – The domestic saving rate has declined from 31.4% in 2013-14 to 29.6% in 2016-17; and gross capital formation rate from 33.8% to 30.6% during the same period.

NPA Crisis – The banking sector’s ability to boost credit growth is limited by non-performing assets (NPAs) and the governance crisis in the financial sector.

Baltic Dry Index indications –

  • Export to GDP ratio has declined rapidly, with a looming global trade war on the horizon, as has been indicated by the Baltic Dry Index.
  • The highly regarded leading indicator of global trade, currently trading at 1354 is forecasted to decline to less than 1,000 index points by the year-end (a decline from its historic high of 11,793 points in May 2008, just before the financial crisis set in).

Conclusion

Given the foregoing, the $5 trillion target appears daunting. It may yet be doable, provided policymakers begin with a realistic assessment, by willing to step up domestic saving and investment, and not by the wishful thinking of FDI-led growth accelerations in uncertain economic times.

Economic Indicators-GDP, FD,etc

Explained: How global warming could impact jobs in India

Mains Paper 1 : Climatic Change |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : About the report

Mains level : Impact of climate change on Labour


News

ILO report on impact of heat stress on labour productivity and decent work

  • By 2030, India is expected to lose an equivalent of 34 million jobs as a result of global warming, says a report released by the ILO.
  • The report, ‘Working on a warmer planet: The impact of heat stress on labour productivity and decent work’ anticipates an increase in “heat stress” resulting from global warming.
  • It projects global productivity losses equivalent to 80 million full-time jobs in 2030, and the projection of 34 million jobs would make India the worst affected.

How excess heat impact?

  • The report defines heat stress as heat in excess of what the body can tolerate without suffering physiological impairment.
  • It generally occurs at temperatures above 35°C, in high humidity.
  • Excess heat during work is an occupational health risk and restricts workers’ physical functions and capabilities, work capacity and thus, productivity.
  • The report makes its projections based on a global temperature rise of 1.5°C by the end of the century, and also on labour force trends.
  • These projections “suggest that in 2030, 2.2 per cent of total working hours worldwide will be lost because of higher temperatures, a loss equivalent to 80 million full-time jobs.
  • This is equivalent to global economic losses of US$2,400 billion,” says the report.
  • The ILO says this is a conservative estimate, assuming that the global mean temperature does not rise more than 1.5°C.

The India projection

  • The region projected to lose the most working hours is southern Asia, at 5% in 2030, corresponding to around 43 million jobs, respectively.
  • A third of the southern Asian countries have already incurred losses greater than 4%.
  • India, which lost 4.3% of working hours in 1995 because of heat stress, is projected to lose 5.8% of its working hours in 2030, which corresponds to 34 million jobs.
  • The impact of heat stress on labour productivity and decent work’ anticipates an increase in “heat stress” resulting from global warming.

Losses in India

  • The report projects losses in working hours as 9.04% in agriculture (in shade), 5.29% in manufacturing, 9.04% in construction, and 1.48% in services.
  • Although most of the impact in India will be felt in the agricultural sector, more and more working hours are expected to be lost in the construction sector, where heat stress affects both male and female workers,” the report says.
  • There is little data in the country to corroborate trends of climate change and employment.
  • However, that there has been no direct job loss at present, with distressed workers switching from one vulnerable sector to another.

Global Scenario

  • Globally, the two sectors projected to be hit worst are agriculture and construction, with agriculture worse affected.
  • The ILO says 940 million people around the world work in the agricultural sector, which is projected to account for 60% of working hours lost due to heat stress by 2030.
  • In construction, an estimated 19% of global working hours is likely to be lost.
  • In addition to the massive economic costs of heat stress, we can expect to see more inequality between low and high income countries and worsening working conditions for the most vulnerable, as well as displacement of people.
  • To adapt to this new reality appropriate measures by governments, employers and workers, focusing on protecting the most vulnerable, are urgently needed.
Climate Change Impact on India and World – International Reports, Key Observations, etc.

US law to give India NATO ally-like status

Mains Paper 2 : Bilateral, Regional and Global Groupings and agreements involving India |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : NATO

Mains level : India-US strategic relationship


News

  • The U.S. Senate has passed a legislative provision that brings India at par with America’s NATO allies and countries like Israel and South Korea for increasing defence cooperation.

How will it benefit India?

  • The act provides for increased U.S.-India defence cooperation in the Indian Ocean in the areas of humanitarian assistance, counterterrorism, counter-piracy and maritime security.
  • It will clear the way to provide state-of-the-art weapons and sensitive technology to India.
  • It will make India a big associate of US in defence deals also it will increase India’s status.
  • Earlier, the US-India had signed Communication, Compatibility and Security Agreement (COMCASA) in 2018 for sharing sensitive information.

About NATO

  • The North Atlantic Treaty Organization, also called the North Atlantic Alliance, is an intergovernmental military alliance between 29 North American and European countries.
  • It is based on the North Atlantic Treaty that was signed on 4 April 1949.
  • NATO constitutes a system of collective defence whereby its independent member states agree to mutual defence in response to an attack by any external party.

Assist this newscard with:

India to be treated as NATO ally

Foreign Policy Watch: India-United States

Centre ratifies convention to curb company profit shifting

Mains Paper 3 : Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Base Erosion and Profit Shifting

Mains level : Read the attached story


News

  • The government announced that it had ratified the international agreement to curb base erosion and profits shifting (BEPS).
  • This has been done in a bid to stop companies from moving their profits out of the country and depriving the government of tax revenue.

Base Erosion and Profit Shifting

  • BEPS is a tax avoidance strategy used by multinational companies by exploiting gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.
  • In order to combat this, many countries entered into agreements to share tax information with each other to enhance transparency and make such profit shifting that much harder.
  • Here, profits are shifted from jurisdictions that have high taxes (such as the United States and many Western European countries) to jurisdictions that have low (or no) taxes (so-called tax havens).
  • The BEPS Action Plan adopted by the OECD and G20 countries in 2013 recognised that the way forward to mitigate risk from base erosion and profit shifting was to enhance transparency.

About the convention

  • India has ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (multilateral instruments (MLI)).
  • This was signed by the Finance Minister in Paris on June 7, 2017 on behalf of India, along with representatives of more than 65 countries.
  • The MLI is a result of concerted work by the G20 countries to tackle the issue of base erosion and profit shifting, something that affects them all.
  • India was part of the Ad Hoc Group of more than 100 countries and jurisdictions from the G20, OECD and other interested countries, which worked on the finalizing the text of the Multilateral Convention.

Impact of the MLI

  • The MLI will be applied alongside existing tax treaties, modifying their application in order to implement the BEPS measures.
  • It will modify India’s tax treaties to curb revenue loss through treaty abuse and base erosion and profit shifting strategies by ensuring that profits are taxed where substantive economic activities generating the profits are carried out.
Tax Reforms

Tamil Yeoman declared Tamil Nadu’s state butterfly

Mains Paper 3 : Conservation, Environmental Pollution & Degradation, Eia |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Tamil yeoman

Mains level : Not Much



News

  • Tamil Yeoman (Cirrochroa thais) butterfly species endemic to Western Ghats has been declared the state butterfly of Tamil Nadu.

About Tamil Yeoman

  • Uniformly orange in colour with a dark brown outer ring, Tamil Yeoman is among the 32 butterfly species found in the Western Ghats.
  • This butterfly species moves in groups in large numbers, but only in a few places.
  • Also known as Tamil Maravan, which means warrior, these butterflies are found mainly in the hilly areas.
  • An expert team was involved in identifying butterfly species to be declared state butterfly.
  • The team had shortlisted two butterfly species – Tamil yeoman and Tamil Lacewing.
  • The Tamil Yeoman was selected. Both butterfly species are unique in their own ways.
  • The Tamil Lacewing butterfly is very rare and difficult to sight which may have been a reason for the government to prefer Tamil Yeoman.

Why it’s special?

  • For the first time Tamil Nadu has declared its state butterfly and only fifth in the country to do so.
  • Maharashtra was the first to declare Blue Mormon as its state butterfly, followed by Uttarakhand (Common peacock), Karnataka (Southern bird wings) and Kerala (Malabar banded peacock).
Wildlife Conservation Efforts

[pib] Ramayana Circuit

Mains Paper 3 : Infrastructure: Energy, Ports, Roads, Airports, Railways Etc. |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Ramayana Circuit, Swadesh Darshan Scheme

Mains level : Development of Tourism


News

Ramayana Circuit

  • Ramayana Circuit is one of the fifteen thematic circuits identified for development under the Swadesh Darshan scheme of Ministry of Tourism.
  • The destinations under the circuit will be developed by bridging infrastructural gaps like provision of drinking water, accommodation facilities, etc.
  • Then the 15 places will be connected to form a circuit.
  • The scheme will be a joint effort of the states and the central government. It has a larger aim of providing job opportunities to local artisans, as it promotes local art and craft.

Destinations under Ramayana Circuit

The Ministry has initially identified fifteen destinations for development under the Circuit theme namely:

  • Ayodhya, Nandigram, Shringverpur & Chitrakoot (Uttar Pradesh)
  • Sitamarhi, Buxar & Darbhanga (Bihar)
  • Chitrakoot (Madhya Pradesh)
  • Mahendragiri (Odisha)
  • Jagdalpur (Chattisgarh)
  • Nashik & Nagpur (Maharashtra)
  • Bhadrachalam (Telangana)
  • Hampi (Karnataka)
  • Rameshwaram (Tamil Nadu).

Other such Tourism Circuits

  • Krishna Circuit, Buddhist Circuit and Spiritual Circuit are three of the other 12 circuits under the Swadesh Darshan Scheme, which seeks to boost religious tourism in India.
  • As of now, 10 destinations have been finalised under the Krishna Circuit, which will pertain to his journey in India.
  • The 9 remaining circuits, though not for religious tourism, aim to connect all major cultural heritage spots and other touristy spots of India, making travel-planning easier.
  • A similar scheme, the Pilgrimage Rejuvenation and Spiritual Augmentation Drive (PRASAD), with the same objectives as the Swadesh Darshan scheme, aims to develop 13 pilgrimage cities across India.
Tourism Sector

[pib] National Electric Mobility Mission Plan (NEMMP)

Mains Paper 3 : Infrastructure: Energy, Ports, Roads, Airports, Railways Etc. |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : FAME India Scheme

Mains level : Early adoption of EVs in India


News

NEMMP 2020

  • The National Electric Mobility Mission Plan (NEMMP) 2020 is a National Mission document providing the vision and the roadmap for the faster adoption of electric vehicles and their manufacturing in the country.
  • This plan has been designed to enhance national fuel security, to provide affordable and environmentally friendly transportation and to enable the Indian automotive industry to achieve global manufacturing leadership.

Other initiatives

  • As part of the NEMMP 2020, Department of Heavy Industry formulated FAME India Scheme in the year 2015.
  • It was aimed to promote manufacturing of electric and hybrid vehicle technology and to ensure sustainable growth of the same.

FAME I

  • In this phase, market creation through demand incentives was aimed at incentivizing all vehicle segments i.e. 2-Wheelers, 3-Wheelers Auto, Passenger 4-Wheeler vehicles, Light Commercial Vehicles and Buses.
  • The demand incentive was available to buyers of EV in the form of an upfront reduced purchase price to enable wider adoption.
  • Based on outcome and experience gained during the Phase-II of FAME India Scheme was launched.

FAME II

  • This phase will mainly focus on supporting electrification of public & shared transportation, and aims to support through subsidies 7000 e-Buses, 5 lakh e-3 Wheelers, 55000 e-4 Wheeler Passenger Cars and 10 lakh e-2 Wheelers.
  • The scheme will be applicable mainly to vehicles used for public transport or those registered for commercial purposes in e-3W, e-4W and e-bus segments.
  • However, privately owned registerede-2W will also be covered under the scheme as a mass segment.
  • In addition, creation of charging infrastructure will be supported in selected cities and along major highways to address range anxiety among users of electric vehicles.

Assist this newscard with:

[pib] Technical Analysis of FAME II Scheme 

Electric and Hybrid Cars – FAME, National Electric Mobility Mission, etc.

[pib] Scheme for Trans-disciplinary Research for India’s Developing Economy (STRIDE)

Mains Paper 2 : Health & Education |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : STRIDE Scheme

Mains level : Trans-disciplinary Research in India


News

  • The University Grants Commission (UGC) has approved a new scheme – ‘Scheme for Trans-disciplinary Research for India’s Developing Economy’ (STRIDE).

STRIDE Scheme

  • STRIDE will provide support to research projects that are socially relevant, locally need-based, nationally important and globally significant.
  • It shall support research capacity building as well as basic, applied and transformational action research that can contribute to national prioritiers with focus on inclusive human development.
  • It shall support creation, development and integration of new ideas, concepts and practices for public good and strengthening civil society.
  • It will strengthen research culture and innovation in colleges and Universities and help students and faculty to contribute towards India’s developing economy with help of collaborative research.

 A move for Trans-disciplinary research

  • Trans-disciplinary research is a team effort of investigators from different disciplines to create new conceptual, theoretical, methodological innovations that integrates and transcends beyond discipline-specific approaches to address a common problem.
  • Trans-disciplinary research goes beyond mere production of knowledge and extends to the practical use of the knowledge outside academic endeavour.
  • In essence, it takes into consideration the societal impact of knowledge enunciating as what should be the main aim of research.
  • It creates unity of intellectual frameworks beyond the disciplinary perspectives and solve problems by going beyond the boundaries of disciplines to involve various stakeholders.
  • Trans-disciplinary research generates knowledge through use of multi and inter-disciplinary concepts and integrates new theories among science and society.

Objectives

  • To identify young talent, strengthen research culture, build capacity, and promote innovation and support trans-disciplinary research for India’s developing economy and national development.
  • To fund multi institutional network high-impact research projects in humanities and human sciences.

Components of the Scheme

Component-1

  • It will endeavour to identify the motivated young talents with research and innovation aptitude in universities and colleges.
  • It will provide research capacity building in diverse disciplines by mentoring, nurturing and supporting young talents to innovate pragmatic solutions for local, regional, national and global problems.
  • This component is open to all disciplines for grant upto 1 crore.

Component-2

  • It will be mainly to enhance problem solving skills with help of social innovation and action research to improve wellbeing of people and contribute for India’s developing economy.
  • Collaborations between universities, government, voluntary organizations and industries is encouraged under this scheme.
  • This component is open to all disciplines for grant upto 50 lakh – 1 crore.

Component-3

  • It will fund high impact research projects in the identified thrust areas inhumanities and human sciences through national network of eminent scientists from leading institutions.
  • Disciplines eligible for funding under this component include: Philosophy, History, Archaeology, Anthropology, Psychology, Liberal Arts, Linguistics, Indian Languages and Culture, Indian Knowledge Systems, Law, Education, Journalism, Mass Communication, Commerce, Management, Environment and Sustainable Development.
  • Grant available for this component is upto 1 crore for one HEI and upto 5 crores for multi institutional network.
  • To encourage high quality high impact research in humanities, there is a provision to identify experts and invite them to develop a proposal.
  • UGC is also proposing to provide a grant of Rs 2 lakh for developing proposals.
Higher Education – RUSA, NIRF, HEFA, etc.

[op-ed snap] Healthcare’s primary problem

Mains Paper 2 : Health & Education |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : Reforms in primary health care sector


CONTEXT

The deaths of 154 children in Bihar due to acute encephalitis syndrome (AES) has laid bare the precarious capacity of the State’s healthcare apparatus to handle outbreaks. AES has been linked to two factors: litchi consumption by starving children and a long, ongoing heat wave.

Preventable Disease

  • AES is largely preventable both before and just after the onset of the disease, and treatable with high chances of success on availability of medical intervention within 2-4 hours of symptoms.
  • Therefore, the first signs of an outbreak must prompt strong prevention measures.

Measures that should have been taken

  • These include, apart from a robust health education drive and replenishing primary health centres (PHCs) with essential supplies, extensive deployment of peripheral health workers (ASHA workers) and ambulance services to facilitate rapid identification and management of suspected cases.
  • Vacant doctor positions in PHCs must be urgently filled through deputation.
  • Furthermore, short-term scaling-up of the Poshan Abhiyaan and the supplementary nutrition programme — which makes available hot, cooked meals for pre-school children at Anganwadis along with take home ration for mothers and distribution of glucose/ORS packets in risk households — are imperative.
  • Nearly every one of these elements lies undermined in Bihar.

Crumbling healthcare in Bihar

  • In Bihar, one PHC caters to about 1 lakh people rather than the norm of 1 PHC per 30,000 people.
  • Furthermore, it is critical for such a PHC, catering to more than three times the standard population size, to have at least two doctors.
  • However, three-fourths of the nearly 1,900 PHCs in Bihar have just one doctor each.
  • Muzaffarpur has 103 PHCs (about 70 short of the ideal number) with 98 of them falling short of basic requirements outlined by the Health Management Information System
  • . Bihar, one of the most populous States, had a doctor-population ratio of 1:17,685 in 2018, 60% higher than the national average, and with only 2% of the total MBBS seats in the country.
  • There is also a one-fifth shortage of ASHA personnel, and nearly one-third of the sub-health centres have no health workers at all.
  • While the State reels under the highest load of malnutrition in India, a study found that around 71% and 38% of funds meant for hot, cooked meals and take home ration, respectively, under the supplementary nutrition programme, were pilfered.
  • Meals were served for just more than half the number of prescribed days, and only about half the number of beneficiaries on average actually got them.
  • Even those PHCs with adequate supplies remain underutilised.
  • Perennial subscription to selective healthcare services by PHCs, like family planning and immunisation, have cultivated the perception that PHCs are inept as centres of general healthcare.
  • This leads patients either directly to apex government hospitals situated far away or to unqualified private providers.
  • This results in a patient losing precious time in transit and landing up in a hospital in a critical and often irreversible stage of illness.
  • Merely strengthening the tertiary care sector will be inefficient and ineffective.
  •  A narrow focus on the hospital sector will wastefully increase costs, ignore the majority of cases, increase the number of cases that are in advanced stages, while continuing to overstretch public hospitals.

Revamp primary health infrastructure

  • The solution lies in building more functional PHCs and sub-health centers; scaling-up the cadres of ASHA workers; strict monitoring of nutrition programmes; and addressing the maldistribution of doctors and medical colleges.
  • The resultant robust primary care system can then be geared towards being more responsive to future outbreaks.
  • We should also bolster our technical capacity to better investigate the causes of such outbreaks and operationalise a concrete long-term strategy.

Conclusion

  • Policy documents, while emphasising on financial and managerial aspects of public health, fail to address the aberrant developmental paradigm of our health services.
  • Decades of hospital-centric growth of health services have eroded faith in community-based healthcare.
  • In these circumstances, even easily manageable illnesses increase demand for hospital services rather than PHCs. There is need to work on inculcating confidence in community-based care.
Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

[op-ed snap] Terms of estrangement

Mains Paper 2 : Bilateral, Regional and Global Groupings and agreements involving India |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : Contentions in India and USA relationship


CONTEXT

While India and the US claim to be strategic partners, the bones of contention are now more numerous and more substantial than they’ve been in the last two decades — after Bill Clinton’s visit in 2000.

1.Freedom of religion issue

  • For more than half a decade, the annual report of the State Department on Freedom of Religion accuses India of not treating its minorities in the right manner.
  • In April, the 2019 report not only mentioned the role of vigilante groups involved in “mob lynchings” but cited organisations: “A multifaceted campaign by Hindu nationalist groups like Rashtriya Swayamsevak Sangh (RSS), Sangh Parivar, and Vishva Hindu Parishad (VHP) to alienate non-Hindus or lower-caste Hindus is a significant contributor to the rise of religious violence and persecution.

2. Trade Issues

E-commerce –

  • In February, India introduced new e-commerce rules that affected foreign online retailers, including Amazon and Walmart, which could no longer negotiate exclusives on products and sell items via vendors they hold an equity stake in, like Flipkart (that Walmart bought for $16 bn last year).
  • Amazon India and Flipkart represent 70 per cent of e-commerce in India today and these new rules were intended to help domestic sellers to resist the American giants.

Generalised System of Preferences –

  • Trump waited for the Indian elections to be over, but on May 31 he terminated India’s designation as a beneficiary developing country of the Generalised System of Preferences.
  • The withdrawal of duty-free access to Indian exporters is bound to damage the Indian economy.
  • The Modi government retaliated in June by imposing tariffs on 29 American goods.

3.Visa Issues

  • Indians are not as welcome in the US as they used to be. Not only have thousands of techies seen their demand for an H1B visa extension rejected, but the Trump administration is contemplating imposition of a 10-15 per cent quota of all the H1B visas on migrants from countries forcing foreign companies to store data locally.
  • India is one of them and is, therefore, criticised by companies like Mastercard and Visa, which have effectively lobbied the Trump administration.
  • Such a cap on the Indian H1B visas would be an additional blow as Indians get about 70 per cent of the 85,000 H1B visas granted every year by the US.
  • One may argue that such practices are unfair, but India’s attempts at regulating migration in the North-east reflect the same agenda — the kind of agenda on which national-populists are elected.

4.Strategic autonomy issue –

  • The Indian policy of multi-alignment or strategic autonomy is another.
  • This approach is hardly sustainable when the world scene gets so polarised that memories of the Cold War come to mind.
  • India thought it could be a strategic partner of the US and still buy S-400from Russia.
  • It went ahead with the deal at a cost of Rs 40,000 crore (without any tender) in spite of US warnings — and now it has to negotiate in order to get a sanctions waiver.

5.Balancing Iran and USA

  • Similarly, to be a friend of Iran and the US at the same time is getting more and more difficult.
  • New Delhi has had to bow to Washington when the Trump administration ended on May 2 waivers that allowed India (among others, including China) to continue their oil imports for six months after American sanctions over Iran were re-imposed.
  • After all, India needs Iran because of Chabahar and Afghanistan — where the American withdrawal is another bone of contention.
  • An important question is arising in DC too: How far can the US rely on India to contain China?
  • In the last Shanghai Cooperation Organisation meeting at Bishkek, Modi did not rule out India joining hands with Russia and China in the emerging trade war with the US.
  • The decision India will make regarding 5G will send a significant signal: Will it boycott Huawei, like the US, or will it say “no” to the US and deal with Huawei?

Conclusion

At Osaka, Modi thanked Trump for his “love towards India” and the latter said that both countries “have never been closer”. But these words may not reflect the full picture of the US-India relationship at a time of resurgent nationalism and national-populism.

Foreign Policy Watch: India-United States