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India’s defence spending reaches a crossroads: Will New Delhi buy Russian or American weapons?

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Will Moscow’s long term partner bite the bullet and embrace Washington at its expense?

India ranks third globally in terms of defense budget and will increase its military spending this year. The country is facing challenges from Pakistan and China on its borders to the west, north and northeast, and New Delhi’s military might is in critical need of a technological upgrade. The problem is that India’s defense capabilities in recent years have oscillated in their dependency between Moscow and Washington. The moment is fast approaching when the world’s most populous country, one of its fastest growing economies, will have to choose between two rivals.

India’s new defense budget

India seeks to become a $5 trillion economy by 2025, which could have been achieved earlier had it not been for the Covid-19 pandemic. While bidding to achieve a growth rate of 6.1% despite the global headwinds due to the inflationary pressures that the West is facing, Indian Finance Minister Nirmala Sitharaman tabled her fifth consecutive Union Budget in early February.

Total federal spending under the fiscal year 2023-2024 budget, which starts in April, will be 45 trillion rupees, the equivalent of nearly $550 billion. Capital expenditure (capex) is being increased 33% year-on-year, to $122 billion, with a view to boosting India’s infrastructure.

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Data compiled by Stockholm International Peace Research Institute (SIPRI), an independent resource on global security, showed India’s military spending of $70.6 billion last year ranked third highest in the world, after the US’ and China’s.

This year, Sitharaman has allocated 12.95% more to the armed forces and the total amount of military spending will be 5.94 trillion rupees ($72.6 billion). According to the minister, 2.77 trillion rupees will be spent on salaries and benefits for the military, 1.38 trillion on pensions for retired military personnel, and the remaining amount on other expenses, including the purchase of new weapons, air assets, warships and other military equipment.

According to the latest budget document, India plans to spend about 242 billion rupees ($3 billion) on the navy and 571.4 billion rupees ($7 billion) on procurement for the air force, including aircraft.
New Delhi’s military needs

The capital budget, which caters to the modernization needs of the armed forces such as buying new equipment and firepower, has seen a modest increase of 6.57%, research and development (R&D) brings out the rear, despite a growing accent on indigenization.

Army veterans have been clamoring for R&D, speedy orders, creation of testing facilities, an ecosystem to support innovation for the defense and aero industry coupled with non-lapsable funds to expedite the modernization process.
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Indian Prime Minister Narendra Modi, who is in the penultimate year of his second successive term, has been laying emphasis on the country’s self-reliance, including the domestic manufacture of state-of-the-art weapons. This is a vital part of his vision of ‘Amrit Kaal,’ a term that comes from the ancient Vedic astrology as practiced by the country’s Hindu majority and means ‘golden era,’ during which India aims to “ascend to new heights of prosperity,” according to Modi.

The Indian government has implemented several changes to boost its defense sector and military might. For instance, data shows that the total capital allocation for the defense services sector has risen over 75% since 2013.

The Defence Production and Export Promotion Policy 2020, released by the Ministry of Defence (MoD), has put forth a turnover of $144 billion by 2025, including export of $4.3 billion in aerospace and defense goods and services. The cap on foreign direct investment (FDI) into India’s defense sector via the “automatic route” (without requiring government approval) was increased in 2020, from 49% to 74%.

Russia, the US – the best of both worlds

Historically, India has been importing weapons from Russia since the 1950s after it gained independence from Great Britain in 1947 –first the Ilyushin II-14 cargo transport aircraft and, later, MiG-21 fighters.

Now, the Indian Army is equipped with Russian-made tanks and Kalashnikov rifles. Indian Air Force uses Sukhoi fighter jets and Mi-17 transport helicopters, while the Indian Navy’s aircraft carrier INS Vikramaditya, also known as the Admiral Gorshkov, was formerly part of the Russian fleet. India has spent $12.4 billion between 2018 and 2021 in defense procurements, with Russia accounting for $5.51 billion, according to the SIPRI Arms Transfers Database.

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Similarly, India has been buying arms from the US since the collapse of the USSR in 1991 and significantly more in the past decade.

India has bought aircraft, helicopters and missiles worth $22 billion in the last decade or so. Talks are on to purchase military hardware and software worth close to $10 billion, including repeat orders for six P-8I Poseidon long-range maritime patrol aircraft and six C-130J transport aircraft.

Also, negotiations are underway for the purchase of 30 MQ-9 Predator-B drones worth $3 billion, as well as NASAMS-II, a missile shield meant to protect vital installations in New Delhi from aerial threats, and two intelligence, surveillance, target acquisition, and reconnaissance (ISTAR) aircraft.

Is Washington wooing New Delhi?

The US and India have been forging a partnership in a bid to share advanced defense and computing technology.

The Biden administration appears to be assiduously wooing New Delhi to wean it off Russian military hardware and simultaneously offer a way to counter a resurgent China, with which India has unresolved border disputes.

Last May, the US-India Initiative on Critical and Emerging Technologies, which aims to strengthen military, technology and political links between the two nations, was launched. Recently US National Security Advisor Jake Sullivan rekindled that initiative and singled out India over China’s aggressive overtures that had a “profound impact on the thinking in (New) Delhi.”

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India is known to be keen to jointly manufacture, and domestically, the General Electric Co jet engines it uses in its combat aircraft. A proposal to that effect is pending before Washington. The bilateral initiative also includes transfer of technology on artillery systems, armored infantry vehicles and maritime security, coupled with semiconductors, quantum computing and artificial intelligence.

Sullivan acknowledged the long-standing weapons trade between India and Russia, and New Delhi’s reliance on Moscow. Ending that partnership is apparently one of the intended goals of the US’ own advances towards India.

“I’m not going to say that facilitating the movement of India off of Russian equipment to other equipment is an irrelevant consideration – of course it is not,” he was quoted as saying by an international wire service.

However Sullivan’s overtures are unlikely to be a deciding factor in India’s foreign policy, where pragmatism has often triumphed over ideological moorings.

Putin or Biden?

Modi is likely to get face time with US President Joe Biden over the next few months. They will attend a Quadrilateral Security Dialogue (Quad) security partners’ summit in Sydney, Australia, in the middle of this year, which also includes Japan. In September, Biden is expected to travel to India for the Group of 20 (G20) leaders’ summit in New Delhi.

However, ahead of Modi’s scheduled meeting with Biden, the Indian PM will have a one-on-one with Russian President Vladimir Putin in May, in Goa, India, on the sidelines of the summit of the Shanghai Cooperation Organisation (SCO) – a Eurasian political, economic, international security and defense organization headquartered in Beijing. He will likewise have an opportunity to meet Putin during the G20 summit.

India, whose hands are tied because of limited defense budget for arms procurement, needs to make an informed choice – whether time-tested Russian military wares or those of ‘newfound ally’ the US make the cut.

Earlier, India’s refusal to join any camp over the Russia-Ukraine conflict earned PM Modi generous praise from Putin, who called the Indian leader a “true patriot” for following an independent foreign policy.

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OPINION

Disgraced ex-PM Liz Truss seeks to ruin any hopes for normal UK-China ties

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The former premier’s Taiwan trip is nothing but a provocation for Beijing to lash out at London, sinking any constructive dialogue

Liz Truss will always be remembered as a disastrous prime minister who spent only a month in office and was outlasted by a head of lettuce.

Her disastrous budget plans sent shudders through the UK economy, eliciting criticism from the British people, MPs and foreign leaders alike. Her ideology-driven political decisions found little sympathy with the public, which repaid her with abysmal approval ratings.

You’d think someone like that would have little credibility as a political adviser, but that apparently isn’t the case. Taiwan, which frequently pays washed-up Western right-wing fanatics to come and visit them as a political stunt, invited Liz Truss to Taipei on Tuesday and Wednesday.

Truss then gave a hawkish speech where she called for an end to all cooperation and dialogue with Beijing and the preparation of Russia-style sanctions in the event of a Taiwan conflict. She also repeated her suggestion of an “Economic NATO” – despite a track record that makes her the last person you’d want to listen to for economic advice.

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Since her brief stay in Downing Street, she has rebranded herself as a full-time anti-China hawk, and now uses her party position and credentials as a former prime minister to try to undermine her successor’s attempts to carefully edge back towards engagement with China. Truss was always a fantasist, a pro-Brexit zealot who embraced a confrontational stance during her time as foreign secretary.

However, as you can imagine, all you need to do to reinvent yourself these days is to become a China basher. It doesn’t matter how much of a joke you otherwise might be. Hence, the UK media made sure that her stay and words in Taiwan were given widespread coverage without the context of her political failures. The UK government has already distanced itself from her trip – a fact that Beijing should take careful notice of (and no doubt has).

The British Conservative Party has always been rife with that sort of factionalism. While the opposition Labour Party tends to hard-line suppress the more ideological wing of its MPs (hence the purge of the left-wing Corbynite faction), Tory ideologues have long held power as a “disruptive” force on the government itself, undermining its foreign policy. It’s a fracture which emerged during the Margaret Thatcher era, where following the breakdown of the “post-war consensus” of economic pragmatism, ideology gained ascendency in the party and soon manifested into Euroscepticism.

This tug of war lasted 30 years, making it harder for Conservative prime ministers to maintain a working relationship with the EU, and eventually culminating in Brexit itself. Once that was out of the way, these ideologues found a new target: China. While Truss has opportunistically jumped on this bandwagon, former arch-Brexiter Iain Duncan Smith had already made himself the UK’s Sinophobe-in-chief. Their common goal is simply to undermine stable ties with Beijing and provoke conflict by spurring on backbench rebellions, making them a challenge for the government to handle.

Taiwan predicts timeline for conflict with China

Consequently, while Truss may be a national laughingstock thanks to her disastrous tenure as prime minister, this new role she is taking on enables her to cause disruption on this issue. Taiwan, of course, knows this, because its entire foreign policy is premised on trying to undermine the ties of other countries’ relationships with Beijing by spending large amounts of money on inviting figures such as Truss. The timing of the trip was deliberate, coming immediately after the British foreign secretary’s engagement with a senior Chinese official following the coronation of King Charles III.

Taipei hopes that Beijing’s backlash over the Truss visit will target the UK government as a whole and punish the country. China has a record for being abrasive like this, having done so with the Czech Republic in the past and not winning any friends there as a result. If Truss is therefore allowed to dictate the flow of UK-China relations, she wins. Besides her, the UK has never been provocative on Taiwan at a senior level such as with former Speaker of the House Nancy Pelosi’s visit last year for the US.

Thus, rather than causing a crisis, China should wait until the upcoming Taiwan elections take place and hope that the more pro-China Kuomintang Party (KMT), which once governed the whole country, will take power and stabilize cross-strait ties again. The Democratic Progressive Party (DPP) thrives off creating crises, as does the US with its military deployments, and amidst it all there is no intention for cool heads to prevail. While Pelosi was a blatant violation and huge provocation of the One China policy and US commitment to it, the Truss trip is an opportunistic PR stunt by a washed-up has-been who almost ran her country into the ground in a month. Ignore, move on and forget.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of TSFT.

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OPINION

India facing challenge to steer SCO agenda away from Western-dominated frameworks

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The Shanghai Cooperation Organisation is looking at ways to address the most pressing global issues without being a disruptive influence

The upcoming Shanghai Cooperation Organization (SCO) summit promises to be a watershed moment in the bloc’s history, coming amid unprecedented global challenges and new, emergent tensions.

While the SCO Foreign Ministers meeting, which took place on May 4 and 5, was tasked with preparing the agenda for the July 3-4 summit in New Delhi, there is still much work to do to ensure that India’s chairmanship will be a success.

The West has broken virtually all links with Russia because of the Ukraine conflict. Western sanctions against Russia are unprecedented in scope, carrying significant ramifications also for the developing world, including the economic disruptions caused by the weaponization of the US dollar. The European security architecture is in tatters. For the West to seek Russia’s strategic defeat while the country possesses formidable military and material resources makes no sense. Risking a potential nuclear conflict in particular is totally irresponsible.

The European Union has lost its already limited capacity to play an independent role, especially with Germany losing clout and Brussels appropriating more power. The doors of dialogue and diplomacy are being kept closed as NATO seeks military advantage over Russia, and uses Ukraine as a proxy.

At the other end of Eurasia, US-China tensions are rising over Taiwan, regional maritime disputes, strengthening of US-centered regional alliances and NATO overtures to Japan and South Korea. The US and the EU are warning China against supplying lethal arms to Russia under pain of sanctions, even as they seek China’s support in persuading Russia to end its military intervention in Ukraine, and this in the background of the high-level dialogue between the US and China having virtually broken down.

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Both Russia and China, the principal pillars of the SCO, are at loggerheads with the West to different degrees, and the summit agenda will inevitably reflect this reality. The SCO represents a building block of multipolarity within the global system at the political, economic and security levels, a goal reiterated at the Foreign Ministers’ meeting.

While the other SCO members have robust links to both Russia and China, their connections with India are not as strong, despite mutual goodwill and shared interests. This is largely due to a lack of contiguity and direct access to Central Asia. With Iran and Belarus joining as full members, the SCO will achieve greater Eurasian depth. Both of these countries have been politically and economically targeted by the West. The SCO Foreign Ministers meeting also agreed on May 5 to grant dialogue partner status to Kuwait, the Maldives, Myanmar and the UAE, in addition to the nine existing dialogue partners. The growing interest demonstrates the appeal of the SCO as a grouping of non-Western countries that provide an alternative platform for nations to pursue their interests outside the Western-dominated international system.

Association with the SCO increases their margin to maneuver, primarily at the political and economic levels. Diplomatic support, hedging against Western sanctions, access to non-Western development banks, benefits from connectivity projects and infrastructure development, cooperation against terrorism, extremism and separatism, are obvious advantages.

India has taken its current presidency of the SCO seriously, organizing and hosting more than 100 meetings and events, including 15 ministerial level meetings. Indian Foreign Minister Subrahmanyam Jaishankar has also stressed the great importance for India of developing multifaceted cooperation. He introduced the term ‘SECURE’ SCO on the basis of Security, Economic Development, Connectivity, Unity, Respect of sovereignty and territorial integrity, and Environmental protection.

As SCO Chair, India initiated an unprecedented engagement with the organization’s Observers and Dialogue Partners by inviting them to participate in more than 14 socio-cultural events. Many of the events hosted by India occurred for the first time in the framework of the SCO, such as the Millet Food Festival, Film Festival, Cultural Festival, the Tourism Mart, and Conference on Shared Buddhist Heritage.

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Jaishankar noted that as a result of the Covid-19 pandemic and geopolitical upheavals, global supply chains had been disrupted, leading to a serious impact on delivering energy, food, and fertilizers to developing nations. He viewed these challenges as an opportunity for SCO members to address them collaboratively, noting that with more than 40% of the world’s population within the SCO, its collective decisions would surely have a global impact.

Additionally, Jaishankar highlighted the unabated menace of terrorism, and that combating it was one of the original mandates of the SCO. He drew attention to the unfolding situation in Afghanistan where the immediate priorities included providing humanitarian assistance, ensuring a truly inclusive and representative government, combating terrorism and drug trafficking and preserving the rights of women, children and minorities. This was echoed by the Chinese foreign minister.

India expressed its willingness to share its expertise and experience in the field of startups having helped cultivate over 70,000, more than 100 of which were ‘unicorns’. Last year, it proposed the creation of a Startups and Innovation working groups as well as one focused on traditional medicines, and the SCO meeting approved plans to operationalize these initiatives.

India believes that the SCO should look at reform and modernization to keep the organization relevant in a rapidly transforming world, and noted that discussions on these issues had already commenced. It also sought support for its long-standing demand to make English the SCO’s third official language, as this would enable a deeper engagement with English-speaking members and would take the SCO’s work to a global audience.

India also proposed the New Delhi Declaration as an SCO Summit Declaration at the meeting, as well as four other thematic joint statements on cooperation in de-radicalization strategies, promotion of millets, sustainable lifestyles to address climate change and digital transformation. India sought support for a timely finalization of these documents for approval at the SCO Summit.

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According to Chinese Foreign Minister Qin Gang, all participating parties considered the SCO as an important platform for joint combat against terrorism, separatism, drug trafficking, as well as cyber crimes. All favored more cooperation in such fields as transportation, energy, finance, investment, trade, the digital economy, regional connectivity, deeper cultural and people-to-people exchanges, environmental protection, climate change, sustainable development, and SCO’s strengthened cooperation with the United Nations and BRICS countries.

The meeting also offered the gathered foreign ministers an opportunity for intense bilateral meetings. For example, Russian Foreign Minister Lavrov met his Chinese counterpart to discuss the implementation of agreements reached between Vladimir Putin and Xi Jinping in March.

The SCO continues to enlarge its footprint, widen its agenda, and carve out a non-Western space in the international system, but some key points of friction remain between members especially China and India. The two countries are currently embroiled in a border dispute that has yet to be settled. Additionally, India stands in opposition to China’s Belt and Road Initiative due to India’s concerns about connected sovereignty issues.

The other, less important fault line, is India-Pakistan relations. Pakistan’s Foreign Minister Bhutto Zardari did not help matters by making indirect jibes at India during his speech at the SCO meeting and further criticism of New Delhi in his interviews to the media. His comments elicited a sharp response by the Indian Foreign Minister, but only after the SCO meeting was completed. Pakistan is currently in the throes of a major internal crisis, which may affect its participation in the SCO summit. However, India-Pakistan differences are not germane to the SCO’s growing stature. Far more important is the Russia-India-China triangle.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of TSFT.

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OPINION

China isn’t the biggest threat to Italy’s prosperity

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Rome is considering leaving the Belt and Road Initiative in a move which will place virtue signaling to other Western states above its own interests

Italy’s membership of China’s Belt and Road Initiative (BRI) is up for renewal at the end of this year, and Western media outlets are speculating that Rome may choose to leave the pact.

Italy became the first and only G7 nation to join China’s multi-billion-dollar infrastructure vision, signing a memorandum of understanding (MoU) just before a tidal wave of anti-China sentiment was unleashed on the world. Indeed, the country’s leadership was in a very different place then, with Italy being led by Giuseppe Conte of the Five Star Movement, whose populism faulted the Euro-Atlantic establishment for decimating the Italian economy through the 2008 debt crisis and the brutal austerity measures which followed. It is little wonder that Italy had decided to look eastwards.

Even 15 years on from the events of 2008, Italy’s economy still has not fully recovered. It was worth $2.4 trillion at the end of that year, but is only at $2.1 trillion now, and barely growing at all. New and concurrent economic crises have taken a toll. Italy’s current leadership no longer believes all roads lead to Rome, let alone to China’s modern-day Silk Road – rather, they lead to Washington. As pressure on the country has grown, its successive leaders, Mario Draghi and Giorgia Meloni, have sought to reset its foreign policy back to transatlantic-oriented goals, ending its rebellion against the establishment and thus contemplating quitting China’s grand initiative.

Italy may exit ‘New Silk Road’ – FT

Oddly enough, the truth remains that it is the EU and US that stand as the biggest threat to Italy’s prosperity, not China. While dumping the BRI will receive plaudits from the US-dominated commentary circles in these countries, the reality is that they offer no alternative, no plans, and no incentives to make Italy a wealthier country. It is the “sick man” of the G7, an advanced economy that has increasingly lost its competitiveness, but also one that has been thrust into decline by being a southern EU country and a net loser of Eurozone policies.

It is precisely because of the economic upheavals that the country has faced over the past 15 years and widespread political dissatisfaction, that radical and populist politics have gained ground. China was rightfully seen as an alternative, a country that could rapidly expand Italy’s exports and invest in crumbling public infrastructure. However, this has quickly become politically incorrect. Italy’s leaders argue that BRI participation has been a waste of time. However, the reality is that when Eurocrat Mario Draghi came to office, he sought to reset Italy’s foreign policy and began using new “golden powers” to veto and cancel Chinese investments in Italy on a large scale. In 2021 alone, he blocked three Chinese takeovers, including a seed and vegetable producer.

Following Draghi, Giorgia Meloni, despite her outward populism, has been even more prone to pledging Rome’s loyalty to the transatlantic cause, having decided to become vocal in support of Ukraine in its conflict with Russia and even visit Kiev. At this stage, it is very little surprise that her country is contemplating canceling participation in the BRI, something which can score political points and help dispel doubts about her loyalty to Brussels and Washington. Predictably, the mainstream media narrative readily depicts the BRI in predatory and malign terms, ignoring the obvious empirical truth that it is the EU that has saddled Italy with a national debt larger than its GDP, and not China. Of course, there is no alternative scheme or plan for Italy on offer should it leave the BRI, meaning it is cutting its nose off to spite its face.

EU defenseless against China – Berlusconi

By forfeiting its BRI membership, Italy will undoubtedly lose the opportunity to massively enhance its trade competitiveness, namely by opting out of projects such as Chinese-owned ports and railway links. As an example of this, Greece, to the southeast, has positioned itself as a “gateway to Europe” through Chinese ownership of Pireaus port and its connecting railways, which allows cargo to go up through the Suez Canal into the Mediterranean, into the port and then across Europe. Italy could have competed for a share of this, but it has chosen not to, and it’s not like it will be selling anything additional to the US with its protectionist “America first” policies, is it?

In doing so, Italy has chosen to stop being a leader pursuing its own path in the world to better strengthen its global clout, but instead to be a follower, to play second fiddle to the transatlantic establishment which doesn’t see it as a particularly prominent partner to begin with. Italy joined the BRI precisely because it was sick of being a “rule taker” from Brussels, in a similar vein to what Greece has experienced. Now it appears happy again to hold up the political orthodoxy of the elitist, US-led G7. In doing so, it can kiss goodbye any hopes of becoming a powerful and influential country again anytime soon. Italy is admired mostly for its past, as opposed to what it offers to the world presently, and if its current leadership has its way, that will likely remain the case.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of TSFT.

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