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Type: Op-ed

  • India’s economy and the challenge of informality

    Context

    Despite efforts by the government, formalisation of economy still eludes us.

    Prevalence of informality in India

    • Despite witnessing rapid economic growth over the last two decades, 90% of workers in India have remained informally employed, producing about half of GDP. 
    • Combining the International Labour Organization’s widely agreed upon template of definitions with India’s official definition (of formal jobs as those providing at least one social security benefit — such as EPF), the share of formal workers in India stood at 9.7% (47.5 million).
    • The prevalence of informal employment is also widespread in the non-agriculture sector.
    • About half of informal workers are engaged in non-agriculture sectors which spread across urban and rural areas.
    • Industries thriving without paying taxes are only the tip of the informal sector’s iceberg.
    • What remains hidden are the large swathes of low productivity informal establishments working as household and self-employment units which represent “petty production”.
    • To conflate the two distinct segments of the informal sector would be a serious conceptual error.

    Fiscal perspective of formalisation

    • Efforts to encourage formalisation: Currency demonetisation, introduction of the Goods and Services Tax (GST), digitalisation of financial transactions and enrolment of informal sector workers on numerous government Internet portals are all meant to encourage the formalisation of the economy.
    • The formal sector is more productive than the informal sector, and formal workers have access to social security benefits.
    • The above-mentioned efforts are based on the “fiscal perspective” of formalisation.
    • This perspective appears to draw from a strand of thought advanced by some international financial institutions such as the International Monetary Fund, which foregrounds the persistence of the informal sector to excessive state regulation of enterprises and labour which drives genuine economic activity outside the regulatory ambit.
    • Hence, it is believed that simplifying registration processes, easing rules for business conduct, and lowering the standards of protection of formal sector workers will bring informal enterprises and their workers into the fold of formality.

    Issues with fiscal perspective

    •  Early on, in an attempt to promote employment, India protected small enterprises engaged in labour intensive manufacturing by providing them with fiscal concessions and regulating large-scale industry by licensing.
    • Such measures led to many labour-intensive industries getting diffused into the informal/unorganised sectors.
    • Further, they led to the formation of dense output and labour market inter-linkages between the informal and formal sectors via sub-contracting and outsourcing arrangements (quite like in labour abundant Asian economies).
    • While such policy initiatives may have encouraged employment, bringing the enterprises which benefited from the policy into the tax net has been a challenge.
    • Political and economic reasons operating at the regional/local level in a competitive electoral democracy are responsible for this phenomenon, too.

    Role of underdevelopment

    • Global evidence suggests that the view that legal and regulatory hurdles alone are mainly responsible for holding back formalisation does not hold much water.
    • A well-regarded study, ‘Informality and Development’ argues that the persistence of informality is, in fact, a sign of underdevelopment.
    • The finding suggests that informality decreases with economic growth, albeit slowly.
    •  A similar association is also evident across major States in India, based on official PLFS data.
    • Hence, the persistence of a high share of informal employment in total employment seems nothing but a lack of adequate growth or continuation of underdevelopment.

    Impact of pandemic

    • Research by the State Bank of India recently reported the economy formalised rapidly during the pandemic year of 2020-21, with the informal sector’s GDP share shrinking to less than 20%, from about 50% a few years ago — close to the figure for developed countries.
    • These findings of a sharp contraction of the informal sector during the pandemic year (2020-21) do not represent a sustained structural transformation.
    • They are a temporary (and unfortunate) outcome of the pandemic and severe lockdowns imposed in 2020 and 2021.

    Way forward

    • Policy efforts directed at bringing the informal sector into the fold of formality fail to appreciate that the bulk of the informal units and their workers are essentially petty producers eking their subsistence out of minimal resources.
    •  The economy will get formalised when informal enterprises become more productive through greater capital investment and increased education and skills are imparted to its workers.

    Consider the question “What are the reasons for persistent informality in India? Suggest the way to ensure the smooth transition to the formality.”

    Conclusion

    Policy efforts to formalise the economy will have limited results as the bulk of informal units are petty producers.

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  • Finding a way to share IAS officers

    Context

    There are recent reports in the media about serious concerns of several state governments on Government of India’s proposed move to amend the IAS service rules to meet the shortage of officers at various levels at the Centre.

    How does central deputation work?

    • Voluntary: Under the current dispensation, officers opt for central deputation from the states voluntarily.
    • The Centre then makes a selection from among these officers for posts which are vacant or are likely to be vacant in the near future.
    • While doing so, it considers the suitability of the officer based on his/her past experience.
    • Once the selection is finalised, orders are issued, requesting the state government to relieve the officer concerned.
    • Quota for each state: Each state has a certain quota beyond which its officers are not accepted by the Centre.

    Shortage of officers on central deputation

    • In the last decade, there has been a gradual decline in the number of officers who opt for central deputation.
    • Generally, of the total cadre strength of the states, about 25-30 per cent used to be on central deputation.
    • Currently, less than 10 per cent are working in various central ministries.
    • According to certain reports, in states like UP, Bihar, Odisha and Tamil Nadu and Kerala, the number is between 8 per cent and 15 per cent.
    • One of the reasons for this non-availability of officers for central deputation is the inadequate recruitment more than a decade and half ago.
    • But an important reason is also the comparatively better service conditions in the states.

    So, what do the proposed rules seek to achieve?

    • While fixing the cadre strength of states, about 40 per cent posts of senior duty are earmarked for central deputation.
    • Shortage to be shared equitably: Considering that recruitments in the past were not adequate, the proposed change in rules provides for shortage to be shared equitably between the Centre and states.
    • Time limit to relieve officers: Also, since vacancies need to be filled in time, there is a suggestion of a time limit in which states must respond and relieve the officer selected.

    Way forward

    • Respect the views of State: It has to be clearly understood that when states give the list of officers they wish to offer for central deputation, it will be the decision of the states alone.
    • The Centre, if it wishes to have an officer work for it, can suggest so to the state. 
    •  If the state does not wish to suggest his name for deputation, the Centre should respect their views, even though they have the power under cadre rules to do so.
    • Improving working conditions for officers: The Centre has to realise that improving working conditions for officers at the deputy secretary and director levels is critical to the success of cadre management.
    • Many of the officers at this level have concerns regarding education of their children, transport and the higher cost of living in Delhi.
    • A deputation allowance for the period of deputation in Delhi could be an option.
    • Non-adversarial manner: The states also have to look at this issue in a non-adversarial manner, where needs of both the Centre and the state have to be matched and met.
    • The Centre should dispel fears of states about misuse of central power.

    Conclusion

    Proposed amendment to service rules is needed to meet shortage of personnel, but Centre must dispel states’ fears about overreach.

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  • Unlock India’s food processing potential

    Context

    One of the largest producers of fruits and vegetables in the world to boost processed food in large quantities, India has formulated a unique Production-Linked Incentive Scheme (PLIS) which aims to incentivise incremental sales.

    Progress made so far

    • A sum of ₹10,900 crore has been earmarked for the scheme.
    • Beneficiaries have been obliged to commit a minimum investment while applying for the scheme.
    • Under Category 1, firms are incentivised for incremental sales and branding/marketing initiatives taken abroad.
    • Assuming the committed investment as a fixed ratio of their sales and undertaking execution of at least 75% of the projects, the sector is likely to witness at least ₹6,500 crore worth of investment over the next two years.
    • New alternatives are being explored which have immense potential in replacing the staples of rice and wheat in the form of Nutri-cereals, plant-based proteins, fermented foods, health bars and even fresh fortified foods for pets.
    • By welcoming the new brands in the category, PLIS aims to create an enabling ecosystem for innovation in both food products and processes.

    Way forward

    1] Improve infrastructure

    • A study in the United States concluded that a 1% increase in public infrastructure increased the food manufacturing output by 0.06% in the longer run (https://bit.ly/3rOeE0l).
    • This correlation holds good for India too as a higher investment is being concentrated in States such as Andhra Pradesh, Gujarat, Maharashtra, Tamil Nadu and Uttar Pradesh.
    • These States as reported by the Good Governance Index 2020-21, ranked among the highest in the ‘Public Infrastructure and Utilities’ parameter with ‘Connectivity to Rural Habitations’ showing the highest improvement.

    2] Improve profitability in export

    • For the exports market, it is now established that sales promotion is positively related to increased sales volume, but inversely related to profitability.
    • To bridge this gap, of the 13 key sectors announced under the PLIS, the ‘Food Processing PLIS’ earmarks a dedicated Category 3 for supporting branding and marketing activities in foreign markets. 
    •  This ensures that India’s share of value-added products in the exports basket is improved, and it may leverage on its unique geographical proximity to the untapped markets of Europe, the Middle East/West Asia, Africa, Oceania and Japan.

    3] Access to credit

    •  The access of micro, small, and medium enterprises (MSMEs) to finance is a perennial problem in the country, predominating due to a lack of proper credit history mechanism for MSMEs.
    • Smart financing alternatives such as peer-to-peer (P2P) lending hold potential for micro-food processors.
    • Access to working capital has in theory been addressed by the Trade Receivables Discounting System (TReDS), a platform for facilitating the financing/discounting of trade receivables of MSMEs through multiple financiers.

    Conclusion

    With growing populations, changing food habits and unrestricted use of natural resources, nations must come together and lay out a road map for a common efficient food value chain.

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  • The consequences of an ill-considered green strategy

    Context

    Europe’s push for renewable energy at the cost of conventional fuel may end up causing a global food crisis.

    Consequences of fuel shortage in Western Europe

    • Since August 2021, Western Europe has faced a problem with renewable energy – the wind doesn’t always blow when needed and the sun doesn’t always shine.
    • Commodity markets across the world operate on a balance of demand and supply — even seemingly “small” changes in either side of a few percentage points can push the prices up or down sharply.
    • High energy bills: Higher gas prices have pushed up energy bills for households and are expected to impact household spending and consumption as well.
    • High urea prices: Natural gas is used to produce urea – if gas prices go up, fertiliser also becomes expensive.
    •  Some poor and middle-income countries are already starting to face problems of fertiliser availability — there are reports from several Indian states as well. 
    • High food prices: The impact of expensive fertiliser will be felt some months down the line as expensive fertiliser and reduced harvests push up food prices.
    • India is relatively less affected as the share of natural gas in the country’s energy mix is low but will still face problems due to high food prices.
    • In 2007-08, when oil prices were high, there was a push to use “biofuels” led by the US and Europe.
    •  The effects of the 2008 food price crisis were felt around the world, especially by the poor.

    Lessons for India

    • Cheap and reliable energy sources should not be abandoned until the alternatives have been stringently stress tested.
    • India will be especially hard hit if oil prices spike as it imports close to 1.4 billion barrels of oil annually.

    Consider the question “What are the inherent dangers in rapid transition to the green energy? Suggest the way forward for India.”

    Conclusion

    A blind push to shut down traditional sources of energy and move to less reliable “clean” energy can have second and third order effects.

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  • The strength of our republic

    Context

    A republic is made robust and kept alive by its people. In its current form, the Indian republic marks 73 years of maintaining a dynamic balance.

    Directly elected representation

    •  It is to the credit of our people that today we have a pyramidal three-layered elected representative system that governs us.
    • This system today has over 3 million elected representatives (a million of them women), over 4,000 elected to the state legislatures and over 500 in the Parliament.
    • This scale of directly elected representation, perhaps, can be seen nowhere else in the world.

    Moral and spiritual basis of the Constitution

    • In Pilgrimage to Freedom, K M Munshi writes, “our Constitution has a moral background — to secure justice for every section of our society; as also a spiritual basis — to preserve and protect all religions in the exercise of their functions”.
    • The challenges continue in securing justice for every section of our society.
    • The Backward Classes, the Scheduled Castes and the Scheduled Tribes and the poor across all categories clamour for better opportunities and affordable justice.
    • What Munshi calls the spiritual basis of our Constitution in having to preserve and protect all religions is also seen under stress.
    • When the right to practise one’s religion is denied or threatened, the silence of the thinking public or the media weakens that constitutionally embedded protection.

    Challenges posed by social media

    • Through the power of technology and its capacity to broadcast at mass scale, an otherwise useful tool, social media, has become a challenge and sometimes a threat to one or several of the rights enshrined in our Constitution.
    • Curtailing them to protect the rights of citizens is seen as trampling upon the right to free speech.
    • Without any action, the damage caused to social harmony by such rampant false news can result in people losing faith in the Constitution itself.

    Constitution as a living, dynamic process

    • Our Constitution is the most amended of all constitutions in the world.
    • If there are more than 100 amendments made to the Constitution, there are more than 1,500 laws that have been repealed because they have outlived their times.
    • These deadwood laws, by remaining on paper, occasionally became a weapon in the hands of rent-seekers.
    • Their removal, as a part of administrative reform, has kept the role of the executive transparent and accountable.
    • That the Constitution is always evolving is best exemplified by the 101st amendment which rolled out the Goods and Services Tax.
    • his amendment brought in a unified indirect tax regime by subsuming most of the indirect taxes of the Centre and the states.
    • Yet to complete five full years, the GST Council has stood the test of challenging times even in its initial years.
    • It augurs well for cooperative federalism.

    Conclusion

    Our Constitution has served us well in these seven decades. Several republics in the post-imperial era have rejected their earlier constitutions and tested new ones. It is the people who can keep the republic robust and alive.

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  • A festival to salute India’s vibrant democracy

    Context

    This year we are celebrating our 73rd Republic Day. The Constitution has been our guiding force in the journey of the nation as a mature democracy among comity of nations.

    Historical background

    • The Constituent Assembly undertook intensive deliberations over a period of two years, 11 months and 18 days spread over 11 sessions, during which the Constitution of India took shape.
    • Our Constituent Assembly played a dual role after Independence, given the insurmountable task of nation-building.
    • Our Constituent Assembly had performed the functions of the provisional Parliament of India in the interval between the time our Constitution was enforced and the day when the new Parliament was formed following the first General Elections (October 25, 1951-February 21, 1952).
    • The Constituent Assembly of India acted as the first Parliament of independent India.

    Role of the Parliament

    • Representative institutions and democratic traditions have always been an integral part of our rich heritage
    • Our Parliament has been playing a pivotal role in the all-round development of the nation by adopting many parliamentary devices for ensuring free and fair discussions and dialogue.
    • We have to ensure that our institutions and governance ensure inclusivity and the participation of our population in our developmental journey, particularly our women, Scheduled Castes, Scheduled Tribes and all other marginalised sections become equal partners in our growth story.

    Ensuring the best legislative practices

    • Repository of the proceedings: To ensure that best legislative practices are shared, a national portal is being planned to serve as a repository of the proceedings of Parliament and all State/Union Territory legislatures in the country.
    • Research support is being provided to Members to help them participate better and meaningfully in matters brought before Parliament.
    • Review of the laws to make them relevant: It is also time in the journey of our nation to take stock and review laws that were enacted during the pre-Independence era so as to make them more relevant to our current requirements and future challenges.

    Conclusion

    Republic Day is an occasion for people’s representatives and all citizens of this proud nation to reaffirm faith in the ideals enshrined in our Constitution.

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  • Towards low emissions growth

    Context

    While many developing countries made net-zero pledges at COP26 in Glasgow, they face enormous developmental challenges in their attempts to grow in a climate-constrained world.

    Developmental challenges for India

    • For India, the national context is shaped by high youth unemployment, millions more entering the workforce each year, and a country hungry for substantial investments in hard infrastructure to industrialise and urbanise.
    • Growth with low emission footprint: India’s economic growth in the last three decades, led by growth in the services sector, has come at a significantly lower emissions footprint.
    • But in the coming decades, India will have to move to an investment-led and manufacturing-intensive growth model to create job opportunities and create entirely new cities and infrastructure to accommodate and connect an increasingly urban population.
    •  All of this requires a lot of energy. Can India do all of this with a low emissions footprint?

    What could India do to pursue an industrialization pathway that is climate-compatible?

    • A coherent national transition strategy is important in a global context where industrialised countries are discussing the imposition of carbon border taxes while failing to provide developing countries the necessary carbon space to grow or the finance and technological assistance necessary to decarbonise.
    • What India needs is an overarching green industrialisation strategy that combines laws, policy instruments, and new or reformed implementing institutions to steer its decentralised economic activities to become climate-friendly and resilient.

    Issues with India’s domestic manufacturing of renewable technology components

    • India’s industrial policy efforts to increase the domestic manufacturing of renewable energy technology components have been affected by policy incoherence, poor management of economic rents, and contradictory policy objectives.
    • India managed to create just a third of jobs per megawatt that China has managed to in its efforts to promote solar PV and wind technologies.
    • China has created more jobs in manufacturing solar and wind components for exports than domestic deployment.
    • India could have retained some of those jobs if it were strategic in promoting these technologies.

    Opportunities in decarbonising transport and industry sector

    • Technologies needed to decarbonise the transport and industry sectors provide a significant opportunity for India.
    • However, India’s R&D investments in these emerging green technologies are non-existent.
    • PLI is a step in right direction: The production-linked incentives (PLIs) under ‘Aatmanirbhar Bharat’ are a step in the right direction for localising clean energy manufacturing activities.
    • Focus on R&D: Aligning existing RD&D investments with the technologies needed for green industrialisation is crucial for realising quantum jumps in economic activities.
    • Encourage private entrepreneurship: India also needs to nurture private entrepreneurship and experimentation in clean energy technologies.
    • Besides China, Korea’s green growth strategy provide examples of how India could gain economic and employment rents from green industrialisation without implementing restrictive policies.

    Way forward

    • India should set its pace based on its ability to capitalise on the opportunities to create wealth through green industrialisation.
    • India should follow a path where it can negotiate carbon space to grow, buying time for the hard-to-abate sectors; push against counterproductive WTO trade litigations on decarbonisation technologies; all while making R&D investments in those technologies to ensure that it can gain economic value in the transition.

    Consider the question “What are the challenges India faces as it strives to reach the goal of net-zero emission by 2070. Suggest the strategy India should follow to maximise the developmental gains.”

    Conclusion

    The government should neither succumb to international pressure to decarbonise soon nor should it postpone its investment in decarbonisation technologies and lose its long-term competitiveness in a global low-carbon economy.

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  • Dealing with the macroeconomic uncertainties

    Context

    Macroeconomic uncertainties are mounting.

    Impact of US Fed’s decision

    • Against the backdrop of possible interest rate hikes by the U.S. Federal Reserve and the taper tantrum, there is pressure on the Reserve Bank of India (RBI) to increase its interest rates to prevent capital outflows.
    • The monetary policy corridor is still “accommodative” to support the growth recovery.
    • Globally, central banks have started increasing the interest rates.

    Macroeconomic uncertainties

    1] Inflationary pressure

    •  In India, the wholesale price index (WPI) inflation rose to a record high of 14.32% in November 2021 as per the data released by the Ministry of Commerce and Industry.
    • The consumer price index (CPI) inflation now is 5.03%, though that is still within the comfort zone of the inflation targeting framework envisaged in India’s new monetary framework.
    • The official nominal inflation anchor in India is 4%, with a band of variations of +/- 2. 

    2] Absorbing excess liquidity

    • The RBI Financial Stability Report, published on December 29, 2021, revealed a possible worsening of the gross non-performing asset (GNPA) ratio of scheduled commercial banks — from 6.9% in September 2021 to 9.5% by September 2022.
    • Absorbing the excess liquidity that was injected to stimulate growth as part of the pandemic response is crucial to reversing trends in non performing assets (NPAs).
    • Absorption of excess liquidity was attempted by increasing the cut-off yield rate of variable rate reverse repo (VRRR) to 3.99%, and curtailing the government securities acquisition programme.

    3] Interest rate structure and implications for government borrowing

    •  The call money market rates are below the repo rate.
    • The bond yields are increasing ahead of the Union Budget 2022-23.
    • The rise in bond yields will result in higher borrowing costs for the Government.

    Way forward for fiscal policy

    • Maintain accommodative policy stance: Given these macroeconomic uncertainties, maintaining an accommodative fiscal policy stance in the upcoming Union Budget for FY23 is crucial for a sustainable recovery.
    • Don’t focus on fiscal consolidation: Any attempt at fiscal consolidation at this juncture employing capital expenditure compression rather than a tax buoyancy path can adversely affect economic growth. 
    •  Public investment — infrastructure investment in particular — is a major growth driver through “crowding-in” of private corporate investment.
    • Strengthening investments in the health-care sector is crucial at this juncture as a prolonged lockdown can accentuate the current humanitarian crisis and deepen economic disruptions.
    • When credit-linked economic stimulus has an uneven impact on growth recovery, the significance of fiscal dominance cannot be undermined.
    • Address unemployment: Rising unemployment needs to be addressed through an urgent policy response that strengthens job guarantee programmes.

    Conclusion

    The upcoming Union Budget for 2022-23 should maintain an accommodative fiscal stance in order to support the sustainability of the economic growth process and also for financing human development.

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  • Places in the news: Sittwe Port

    Context

    Notwithstanding the unfortunate developments since the Tatmadaw took over, a recalibration exercise for developing a robust relationship with Naypyidaw is the need of the hour.

    Need for proactive neighbourhood policy with Myanmar

    • Security and economic interests: India should implement an unbiased and proactive “Neighbourhood First” strategy that facilitates the Act East policy crucial for India’s long-term security and economic interests.
    • Myanmar — regardless of who governs its polity — is not only the decisive lynchpin for India’s Act East policy but critical for the economic development and security of India’s Northeast.
    • China factor: Such a policy should take into account the measures that China has taken to arm the Tatmadaw.

    How to support Myanmar?

    • Critical requirements: India should find ways to support Naypyidaw for its critical requirements of systems and platforms like UAVs, surveillance systems and communication equipment.
    • Economic engagement: There is a need for dynamic economic engagement with Myanmar, to expedite the completion of the earlier agreement on the operationalisation of the Sittwe port, the establishment of an oil refinery and joint vaccine production facilities at a cost of $6 billion.
    • People-to-people goodwill: India also needs to proactively employ the existing “people-to-people” goodwill and proximate ties between the two armies.
    • Engage with military leadership to stop highhandedness: India has the singular advantage of acceptability from both factions in Myanmar and it is, therefore, imperative that it takes the lead in engaging with the ruling military leadership, to stop the highhandedness.
    • The visit by India’s Foreign Secretary to Myanmar in the last week of December 2021 was significant.
    • It conveyed the message that India, notwithstanding its commitment to democracy, is amenable to conduct business with the country, regardless of who is in the seat of power.

    Conclusion

    It is of the utmost importance for India to positively engage Naypyidaw and stave off attempts to exploit Myanmar by countries inimical to India’s growth. Any ambiguity or delay in India’s constructive engagement with Myanmar would only serve the interests of anti-India forces.

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  • India’s challenge in European geopolitics

    Context

    For India, an important strategic priority today is to rebalance the Indo-Pacific. Delhi, however, recognises that this expansive challenge can’t be met by any one power, including the US. A larger European role in securing Asia therefore becomes critical.

    Importance of Russia in balancing China

    • Peace with Russia in Europe might be necessary for America to focus on Asia has been the key motivation behind President Joe Biden’s decision to intensify engagement with Vladimir Putin in the last few months.
    • On the question of Ukraine’s membership of NATO, the US and its European allies have suggested that membership is certainly not imminent; but they are unwilling to say Ukraine will “never” be admitted.

    Contradiction in Europe

    • 1] Europe remains geopolitically unstable: None of the three European settlements of the 20th century — in 1919 after the First World War, in 1945 after the Second World War, and in 1991 after the Cold War — has endured.
    • 2] The difficulty of integrating Russia into a European order: Russia was part of the great power system in Europe through the 18th and 19th centuries.
    • If the 1917 Bolshevik Revolution put Russia and the West at odds with each other, the collapse of the Soviet Union has not resolved the contradiction.
    • 3] Growing tension between the US and Europe: Since the Second World War, Europe has relied on the US for its security.
    • However, Europe has never stopped resenting the American dominance over its geopolitics.
    • The EU’s foreign policy chief, Josep Borrell, has repeatedly objected to the US and Russia deciding the future of Ukraine over European heads.
    • But Russia does not take the EU seriously and is betting on negotiations with the US.
    • 4] Europe still remains a weak security actor:  While the EU has become a powerful economic entity (with its $17 trillion GDP), it remains a weak security actor.
    • Whatever might be the outcome from the gathering conflict over Ukraine, these European contradictions are not going to disappear any time soon.

    Why Europe remains a weak security actor?

    • Dominance of the US and Russia: The ambition to construct a strong geopolitical personality for the EU is hobbled by divisions over the role of Russia and the US in the region.
    • Mutual suspicions: The historically rooted mutual suspicions among European states also plays role.
    • Reluctance to spend on defence: This is compounded by the reluctance to spend more on defence and the inability to develop collective defence arrangements outside of NATO led by the US.

    Suggestions for India

    • The contradictions in Europe demand that Delhi discard its tendency to view the region through the “East versus West” binary.
    • Delhi today could profitably take a leaf out of the book of the Indian national movement.
    • In the late 18th century, as European powers competed for influence in the subcontinent, many Indian princes sought to take advantage of the contradictions between Britain and France.
    • Imperial Germany supported the formation of a nationalist government of India in Kabul in 1915 headed by Raja Mahendra Pratap Singh.
    • Eager to accelerate Indian independence during the Second World War, Netaji turned to Germany and Japan, the world’s newest great power.
    • The sharpening struggle for Indian independence, and more broadly the liberation of Asia between the two World Wars, inevitably involved exploiting the contradictions between different imperial powers.
    •  This was complicated, however, by rapid realignment among the major powers —friends became adversaries and enemies became allies.
    • The Indian and Asian national movements were deeply divided in coping with the shifting great power dynamic.
    • The world enters a similar moment today that could rearrange relations between the US, UK, Europe, Russia, China and Japan.

    Consider the question “What are the contradictions in Europe today? How these contradiction can play role in India’s international relations with the European countries?”

    Conclusion

    Greater engagement with Europe and dealing with its multiple contradictions must necessarily be important elements of India’s international relations today.

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