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Adani’s global footprint and India’s infrastructure diplomacy  

Note4Students

From UPSC perspective, the following things are important :

Prelims level : NA

Mains level : Infrastructure diplomacy

infrastructure diplomacyContext

  • From mines to ports and logistics, the Adani conglomerate has been expanding across sectors, regions. This has gone hand in hand with India’s diplomatic and strategic outreach towards infrastructure diplomacy.

What is infrastructure?

  • Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function.

What are the features of infrastructure?

  • Power and the source of its production such as coal and oil;
  • Roads and road transport;
  • Railways;
  • Communication, especially telecommunication;
  • Ports and airports; and.
  • For agriculture, irrigation constitutes the important infrastructure.

infrastructure diplomacyWhat is infrastructure diplomacy?

  • Infrastructure diplomacy is to promote infrastructure cooperation and economic ties overseas through political means and to enhance political trust between countries via collaboration in infrastructure development.

Why in news?

  • “Several foreign governments are now approaching us to work in their geographies and help build their infrastructure. Therefore, in 2022, we also laid the foundation to seek a broader expansion beyond India’s boundaries,” chairman and founder of the Adani group Gautam Adani,now the world’s third-richest person.

infrastructure diplomacyBackground

  • Foreign presence much earlier: In fact, the Adani group had been scouting abroad much earlier. Since 2010, the Adani group has been in Australia, developing the Carmichael coal mine in Queensland.
  • A greenfield multi-purpose port: In 2017, Adani Ports and Special Economic Zones (Ltd) signed an MoU for a greenfield multi-purpose port for handling containers at Carey Island in Selangor state, about 50 km southwest of Kuala Lumpur.

What is situation now?

  • Company pursue international infrastructure projects aggressively: The last two years, however, have seen the company pursue international infrastructure projects aggressively. In May 2022, APSEZ made a winning bid of $1.18 billion for Israeli state-owned Haifa Port, jointly with Israeli chemicals and logistics firm Gadot.
  • Strategic joint investments: In August this year, APSEZ and Abu Dhabi’s AD Ports Group signed MoU for “strategic joint investments” in Tanzania. The new ASEZ-AD MoU will look at a bouquet of infrastructure projects besides Bagamoyo in the East African Indian Ocean nation — rail, maritime services, digital services and industrial zones.
  • India’s strategic objectives than has been possible so far: Is it just a coincidence that Adani’s global expansion closely shadows the Chinese footprint along its Belt and Road Initiative? Or is it that as Delhicompetes with China for influence in the neighbourhood and beyond, the Adani group’s size, resources and capacity are seen as a key element in achieving India’s strategic objectives than has been possible so far.
  • India’s infrastructure diplomacy: Is now becoming identified the world over with one company.
  • Public and private investment to bridge gaps: For the Adani group, described as India’s biggest ports and logistics company, there couldn’t be a better time. As the Quad grouping of Australia, India, Japan, and the US, competes with China in the Indo-Pacific, it has committed “to catalyse infrastructure delivery” by putting more than $50 billion on the table for “assistance and investment” in the Indo-Pacific over the next five years and “drive public and private investment to bridge gaps”.

infrastructure diplomacyImplications of infrastructure diplomacy

  • Win-Win deal: Adani’s new “no-hands” model of doing business with neighbours a power plant in Jharkhand, exporting all its output to Bangladesh has been seen as a “win-win” deal.
  • Economic interests lie at the heart of geopolitics: The link between diplomacy and commercial interests has generated its share of debate, especially in the US, where its diplomats, intelligence agencies and military interventions abroad have actively pushed the interests of big business first the hunt for cheaper raw materials, then for markets abroad, then to shift industry where manpower was cheaper. As seen in the new age trading blocs the US-led IPEF, and the Chinese dominated RCEP economic interests lie at the heart of geopolitics.

Conclusion

  • At a time when global rivalries are growing sharper in the shadow of the war in Europe, and as India looks out for its own interests, pushing powerful corporates to the centre-stage of its diplomacy, whether it is to build ports, buy or sell weapons or make chips, is inevitable.

Mains question 

Q. Economic interests lie at the heart of geopolitics. Analyse this statement in context of India’s active push for infrastructure diplomacy by including private conglomerates like Adani in it.

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