At least 12 people were killed in neighbouring Uttarakhand state, including nine on Tuesday when debris fell on their vehicles on a national highway, officials said. A popular pilgrimage to the state’s Kedarnath temple, home to a revered shrine of the Hindu deity Shiva, was suspended due to heavy rains.Continue Reading
It’s looking increasingly like the time for sustainable finance to shine. After a fall in the year-on-year volume of green, social and sustainability (GSS) instruments globally during 2022, a rebound is forecast this year – to around US$1 trillion in issuance, forecasts S&P Global.
Asia Pacific (APAC) is well-placed to capitalise on this upswing. S&P Global’s projections, for example, are that GSS issuance volume in the region will jump by as much as 20%, to reach US$240 billion, roughly a quarter of the global landscape.
The longer-term story looks promising, too, especially amid ambitious climate goals. Even in South-east Asia alone, about US$180 billion needs to be invested in clean energy projects every year until 2030 to keep the transition journey on track, based on the International Energy Agency’s Sustainable Development Scenario. Putting this in context, from 2016 to 2020, investment in clean energy was $30 billion per year, on average.
Adapting to climate change is certainly a key driver. But according to more than 100 investors and borrowers in APAC who took part in the 6th annual poll by ANZ and FinanceAsia in April and May 2023, multiple dynamics indicate an ever-bigger role for GSS instruments.
Among the key factors is a mix of policy and regulatory initiatives to foster greater transparency. This should, in turn, boost investor demand and issuer appetite. At the same time, as this segment of the region’s capital market continues to mature, active GSS bond investors and issuers can expect greater potential for newer formats of issuance to help bridge social and environmental priorities such as biodiversity and gender equality.
10 top takeaways from the survey
Read more survey findings and analysis here
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By now, most of our subscribers will have received print editions of the latest FinanceAsia Magazine: Volume Two 2023.
Over the course of the summer, we look forward to sharing online our in-depth magazine features, including the detailed rationale behind our jury’s selection of winners across our recent flagship FA Awards process.
You can access the full online edition here.
To whet your appetite, read on for our editor’s note.
Positive predictions
As a snake (according to the Chinese zodiac), I have so far fulfilled my Year of the Rabbit prophecy in securing opportunity for career growth within the Haymarket Asia business. A successor will soon have the good fortune to step up as editor in my place, as I become content and business director and oversee the editorial strategy of our finance publications: FinanceAsia, CorporateTreasurer and AsianInvestor.
It is said that those born in 2023 will be blessed with vigilance and quick-mindedness. Very useful personality traits, I would think, as artificial intelligence (AI) advances globally, at pace. We are witnessing great development in this field in Hong Kong – and across the wider Asian economy, as emerging tech becomes the next positive disruptor and the capital markets work to respond through evolving regulation and new listing regimes.
In this summer issue, Christopher Chu delves into the value disruption put forward by generative AI, with consultants estimating its worth to breach $16 trillion by 2030. He explores its sophistication and how its potential is interwoven with political factors, while questions are posed around data ownership.
Also intertwined within the realm of transformative technology, is this edition’s flagship interview with BNP Paribas’ CEO for Asia Pacific, Paul Yang. He shares his journey navigating a career path that has taken him from IT coding in Paris, to leadership of the bank’s Asia Pacific business. He offers insights around his accomplishments to date and details plans to progress the bank’s 2025 Growth, Technology and Sustainability (GTS) strategy.
Reviewing activity across Southeast Asia, Liza Tan inspects the market’s prominent position in the ongoing start-up story, through assessment of the current venture capital (VC) fundraising landscape. Her discussion with experts asserts that fintech is inherently fused with human approach and that quality conversations and connections are key to future success.
Indeed, as FinanceAsia’s recent in-person awards celebration underlined, we have much to look forward to in the second half of the year and it is the human elements involved in dealmaking that have capacity to shape the road ahead. I think we all agree that recognising and nurturing talent is vital and so I hope you enjoy reading our evaluation of market resourcefulness, ingenuity and skill that informed the jury’s selection of award winners, amongst truly outstanding competition.
Finally, Sara Velezmoro and I explore the outlook for Asia’s debt capital markets – investigating what opportunity is on offer alongside the changing environment; and whether the momentum surrounding Japanese equities can be sustained, if the government were to reverse yield curve control.
Amid uncertainty we must focus on potential, so please join me in acknowledging the positive strides being taken by Asia’s market movers.
Ella Arwyn Jones
(Please feel free to send feedback or suggestions to [email protected])
¬ Haymarket Media Limited. All rights reserved.
NEW DELHI: At least 15 people were killed in floods and landslides triggered by monsoon rains that battered northern India, with New Delhi receiving the most rainfall in decades, reports and officials said on Sunday (Jul 9). Roads in several parts of the capital were submerged in knee-deep water as itContinue Reading
MUNICH: Chinese Premier Li Qiang’s European tour last week made clear that Europe is not about to decouple from China. If anything, Sino-European cooperation will deepen on technology and, critically, on development issues in the Global South
Li is not only China’s second-ranking official but also Xi Jinping’s closest political associate since the time when the two worked together in Zhejiang Province, more than two decades ago. As Shanghai party chief, he expedited the Tesla Motors mega-factory that helped make China the world’s top auto exporter.
His visit included meetings with Chancellor Olaf Scholz and top German industrial leaders, as well as the up-and-coming prime minister of the state of Bavaria, and finished with an address to a Paris conference on development financing convened by President Emmanuel Macron.
Li called for a “global development partnership” to provide more resources to developing countries, and for “liberalization and facilitation of trade and investment” to “inject fresh growth impetus into developing countries,” rather than “trade protectionism and decoupling and severing supply and industrial chains in any form,” according to a Chinese government statement.
The 27 leaders of the European Community meanwhile will “resort to a soft tone on China” at their June 28-29 EU Council summit in Brussels, according to a draft resolution leaked to Politico.
“Despite their different political and economic systems, the European Union and China have a shared interest in pursuing constructive and stable relations, anchored in respect for the rules-based international order, balanced engagement and reciprocity,” the draft reads, adding that Europe “does not intend to decouple or to turn inwards” or adopt policies “to harm China, nor to thwart China’s economic progress and development.”
The draft language echoes Scholz’s comments to the German Bundestag.
China’s exports to the Global South have doubled since 2020 and now exceed its total exports to developed markets for the first time. China is also the largest lender to developing countries. As central banks in developed markets tighten credit conditions in response to inflation, bank lending in dollars and euros to developing countries has shrunk. Many countries of the Global South are turning to China’s renminbi for trade and development financing as a substitute.
China’s exports of digital and physical infrastructure to the developing world have enabled the Global South to increase its exports to developed markets. According to a forthcoming World Bank analysis, China’s exports of intermediate goods to East Asia-Pacific countries have risen in tandem with the exports of EAP countries to developed markets. That is the virtuous cycle of globalization of which Li Qiang spoke in his Paris address.
China’s role in building infrastructure in the Global South is important for Europe’s exporters, but European governments have a more urgent reason to cooperate with China. Immigration from the world’s poorest economies from Africa to South Asia is Europe’s most sensitive political issue. Without stabilizing the economies of the poorest countries, Europe can’t stop a tidal wave of migrants from seeking refuge on its shores. China is the only economy with sufficient resources and technology – especially in digital infrastructure – to make a difference in the Global South.
After Li departed for Paris, Scholz told the German Bundestag that he is striving for “a geopolitical Europe” – that is, a Europe that plays an independent geopolitical role – together with French President Macron.
Scholz also announced a November conference of the Group of 20 Compact with Africa in Berlin, to “strengthen economic cooperation with our neighboring continent.” In addition, the EU is scheduled to hold a summit meeting with the countries of Latin America and the Caribbean in July.
The German Chancellor added that before Li Qiang’s visit, he had held intensive exchanges with other European leaders in preparation for the European Council’s discussion of EU-China policy in the coming week. In this context, he stressed China’s role in food security, in helping heavily indebted states, in investing in future technologies, in the fight against poverty, and in the fight against climate change.
Li Qiang’s visit marked the first formal government consultation between Germany and China since 2018. Consultations of this kind are reserved for Germany’s closest partners, and the visit’s protocol was a clear indication that the German chancellor seems to have little interest in dismantling relations with China
Washington has urged Europe to “de-risk” its economic relationship with China – a euphemism for decoupling – but the facts on the ground point toward a deepening economic relationship with China
With its economy in recession, Germany’s economic relationship with China has taken on additional importance. China is Germany’s most important trading partner. Much more than other European countries, Germany has built up its trade relations with China over the last 20 years. The exchange of goods between China and Germany amounted to almost EUR 300 billion in 2022 – well ahead of the volume of EUR 249 billion exchanged with the United States. Conversely, Germany is also China’s most important trading partner in Europe.
Germany’s automakers—the country’s largest industry—sell nearly 40 percent of the 14.2 million cars they make annually in China,
China also supplies indispensable intermediate products on which German chemical and electronics manufacturers depend. In addition, China has a quasi-monopoly on rare earths. These are required for batteries, solar modules or electric cars.
Germany’s business community, understandably, has expressed frustration with the hostility towards China of leaders of the Green Party and its ministers in the coalition government. Volker Treier, head of foreign trade at the German Chambers of Industry and Commerce (DIHK), recently said: “The business community is very angry about this ambiguous communication on the China strategy, given the importance of China for our economy.”
Li Qiang’s visit marked a departure from a confrontational tone that had been set by Green Party German Foreign Minister Annalena Baerbock in recent months. Baerbock’s trip to China in April raised political debates in Germany, with her critical remarks on issues such as Russia, Taiwan, and human rights drawing strong reactions from Chinese officials. Foreign Minister Qin Gang retorted, “We don’t need condescending lectures.” Baerbock characterized her trip as “shocking in parts” and claimed that China had become more aggressive internationally and repressive domestically, viewing it as a rival rather than a partner.
As the senior cabinet member for the Green Party, the second largest party in Berlin’s three-way coalition, Baerbock’s influence has waned along with support for the Greens, who won 22% of the national vote in last year’s federal elections but are now polling at just 13.5% of the voters.
By contrast, Li Qiang’s meeting with Bavarian Prime Minister Markus Söder in Munich underscores the political dynamics within Germany, where the governing parties face increasing pressure. Söder, a potential beneficiary of an early end to the governing coalition, previously aspired to the chancellorship in 2021. He organized for Li to meet with the heads of Siemens and BMW, leading German firms based in Bavaria, and arranged a gala dinner in the Munich Residence in Li’s honor.
Influential voices inside Scholz’s Social Democratic Party are urging more cooperation with China. The Seeheimer Circle, an official think tank inside the SPD, released a paper last April on Germany’s relationship with China calling for a “multi-dimensional” – that is, open – policy towards the Asian giant.
Within the center-left SPD, the Seeheimer group emphasizes the interests of industry and labor; it forms part of the personal support base of Chancellor Scholz. The Seeheim Circle has gained in importance within the SPD in recent months. It is known within the center-left SPD as a conservative group more interested in economic policy.
An “abrupt end to trade relations with China” would be “an economic disaster,” the paper argued, rejecting an “anti-China strategy.”
Before Li’s arrival, the German government rejected de facto a call from the European Commission to exclude Chinese companies like Huawei and ZTE from Germany’s telecommunications architecture.
In March, Germany’s Economics Ministry, controlled by the Green Party, warned of risks to the network from a future Chinese retrofit, but the Interior Ministry, under the aegis of the Social Democrats, announced only that it was monitoring the situation. Germany’s largest mobile phone provider Deutsche Telekom categorically rejected the charge that Chinese providers represented a security rest, stating that it had tested its networks exhaustively for such vulnerabilities.
Diego Fassnacht is an international economist and an investment advisor to individual clients and institutions. Prior to his work in finance, he served on the governing council (Deutschlandrat) of the youth organization (JU) of the main German opposition party, the CDU.
A little over a century ago, British and Indian archeologists began excavating the remains of what they soon realized was a previously unknown civilization in the Indus Valley.
Straddling parts of Pakistan and India and reaching into Afghanistan, the culture these explorers unearthed had existed at the same time as those of ancient Egypt and Mesopotamia, and covered a much larger area.
It was also astonishingly advanced: sophisticated and complex, boasting large, carefully laid out cities, a relatively affluent population, writing, plumbing and baths, wide trade connections, and even standardized weights and measures.
What kind of a society was the Indus Valley Civilization, as it came to be known? Who lived there and how did they organize themselves? Archeologists and other experts ask these questions to this day, but the first explorers were already noticing some unique features.
In Mesopotamia and Egypt, “much money and thought were lavished on the building of magnificent temples for the gods and on palaces and tombs of kings,” observed Sir John Marshall, who supervised the excavation of two of the five main cities, Harappa and Mohenjo-daro, “but the rest of the people seemingly had to content themselves with insignificant dwellings of mud.”
In the Indus Valley, “the picture is reversed, and the finest structures were those erected for the convenience of the citizens. Temples, palaces and tombs there may of course have been, but if so, they are either still undiscovered or so like other edifices as not to be readily distinguishable from them.”
In its heyday, from about 2600 to 1900 BC, the Indus Valley Civilization created what may have been the world’s most egalitarian early complex society, defying long-held presumptions about the relationship between urbanization and inequality in the past.
Its large cities were expansive, planned, and boasted large-scale architecture, including roomy residential houses, and smaller settlements in the surrounding areas appeared to support a similar culture with a similar standard of living.
The most tantalizing feature of the ancient Indus Valley remains is what they appear to lack: any trace of a ruling class or managerial elite.
This defies the longtime theoretical assumption that any complex society must have stratified social relations: that collective action, urbanization, and economic specialization only develop in a very unequal culture that takes direction from the top, and that all social trajectories evolve toward a common and universal outcome, the state.
Yet here was a stable, prosperous civilization that appeared to remain that way for centuries without a state, without priest-kings or merchant oligarchs, and without a rigid caste system or warrior class. How did they manage it?
Unfortunately, in the early decades of exploration and research, archeologists tended to assume that lack of evidence of a top-down, hierarchical society in the Indus Valley remains meant only that they had not yet been found.
Some have argued that lack of evidence of inequality only indicates that the region’s ruling class was very clever at disguising the boundaries between itself and other social strata.
Pointing to the fact that Indus Valley burial sites contain no monumental tombs, some researchers suggest that the rulers may have been cremated or deposited in rivers, as was the practice in other imperial cultures.
But cremation is not archeologically invisible; the remains of other cultures often include evidence of it.
More recently, archeologists have been willing to go back to the original explorers’ observations and use the evidence directly in front of them to develop theories about ancient life in the Indus Valley Civilization.
Archeological data from South Asia have improved greatly, and there is much more information. Numerous Indus sites are now known to archeologists that decades ago were not, and the environmental contexts that enabled urbanization in the region – climate, natural resources – are now much clearer.
Archeologists have also honed a strong set of tools for identifying inequality and class divisions: from mortuary data, palace assemblages, aggrandizing monuments, written records, and soon, possibly, from household data.
Yet in a century of research, archeologists have found no evidence of a ruling class in the Indus Valley that is comparable to those recovered in other early complex societies.
In the late 1990s, Indus archeologists started to consider a new concept that seemed to fit the facts better. Heterarchy asserts that complex political organization, including cities, can emerge through the interaction of many different, unranked social groups, rather than from top-down decisions by an elite: that cooperation, not domination, can produce collective action.
It is now widely argued that multiple social groups contributed to the construction of Indus cities and the economic activities that took place in them, and that none seemed to dominate the others.
Bolstering this argument, no evidence exists that any group of Indus producers was excluded from the use of scarce materials that craftspeople had to obtain from long distances away, or that particular groups limited access to those materials to seize a higher position for themselves in Indus society.
One of the most distinctive and technically dazzling products of the Indus culture are stamped seals engraved with imagery and text; more than 2,500 have been found at Mohenjo-daro alone. But the seals were produced by many different groups of artisans in many locations, and there is no evidence that a ruling class controlled production.
Technological styles tended to cross-cut different groups of artisans, indicating a great deal of openness and knowledge sharing.
Indus city-dwellers built large- and small-scale public buildings; the Great Bath at Mohenjo-daro is a massive structure that contained a large paved bath assembled from tightly fitted baked bricks, waterproofed with bitumen and supplied with pipes and drains that would have allowed control over water flow and temperature.
At Mohenjo-daro, non-residential structures were built atop brick platforms that were as substantial as the structures erected on top of them, and would have required a great deal of coordinated action. It has been calculated that just one of the foundation platforms would have required 4 million days of labor, or 10,000 builders working for more than a year.
Yet at both Harappa and Mohenjo-daro, these large non-residential structures were relatively accessible, suggesting that they were “public,” as opposed to palaces or administrative centers restricted to a privileged class.
Some of these may have served as specialized spaces for exchange, negotiation, and interaction among different groups clustered in neighborhoods or along important streets and roads.
These spaces may have helped the city-dwellers maintain a high degree of consensus on planning and policy and ensured that no one group was able to accumulate wealth at the expense of the rest.
The Indus Valley remains have yet to yield all of their riches. The Indus script has yet to be deciphered, and we still don’t know why the civilization started to decline in the 2nd millennium BC.
One of the most positive recent developments has been a dramatic increase in data and interest in the civilization’s small-scale settlements, which may shed light on the question whether these settlements were qualitatively different from one another or from the cities – and how far Indus egalitarianism extended across its broader landscape.
What we have already found, however, suggests that egalitarianism may have been a boon to collective action: that distinct social groups may have been more willing to invest in collective action if the benefits were not restricted to a subset of elites. That suggests that heterarchy may act as a kind of brake on coercive power among social groups, and across society as a whole.
If this is the case, and after a century of research on the Indus civilization, archeologists have not found evidence for a ruling class comparable to what has been recovered in other early complex societies, then it’s time to address the Indus Valley’s egalitarianism.
Urbanization, collective action, and technological innovation are not driven by the agendas of an exclusionary ruling class, the evidence suggests, and can occur in their total absence.
The Indus Valley was egalitarian not because it lacked complexity, but rather because a ruling class is not a prerequisite for social complexity. It challenges us to rethink the fundamental connections between collective action and inequality.
The priest-king is dead – or, in this case, most likely never existed.
This article was produced by Human Bridges, a project of the Independent Media Institute, which provided it to Asia Times.
Back in 2015, there was immense optimism surrounding the China-Pakistan Economic Corridor (CPEC), with expectations that it would elevate Pakistan’s global standing and position it as a leading force in South Asia. However, what was initially hailed as a well-intentioned effort to strengthen the bilateral relationship has become one of the primary factors contributing to Pakistan’s economic decline.
While there were a few significant Chinese-backed infrastructure projects in Pakistan prior to CPEC, the Belt and Road Initiative (BRI) ushered in a new era for Pakistan’s struggling public-sector projects and its chronically weak power and transportation industries. These sectors had long relied on government subsidies, leading to budget deficits.
After China announced its intention to support Pakistan and promote its ambitious Silk Road Economic Belt initiative, CPEC quickly emerged as the flagship project of the BRI.
Introduced in May 2013 during Chinese premier Li Keqiang’s visit to Pakistan, the economic corridor was lauded for its design, addressing Pakistan’s infrastructure gaps, establishing industrial zones, and creating trade routes to China through the strategically located Gwadar Port on the Arabian Sea.
The project initially required a substantial investment of US$46 billion, which quickly escalated to $62 billion in pledges, accounting for around 20% of Pakistan’s GDP. It encompassed several significant Early Harvest Projects (EHPs) in a country in dire need of international investment.
From a geopolitical standpoint, India has been a vocal opponent of the BRI since its inception in 2013. India viewed one of the key components of CPEC as a violation of its territorial integrity and sovereignty, particularly in relation to its claims on Pakistan-controlled Kashmir.
The initiative was seen as part of China’s broader strategy to encircle India and gain influence in the region. Concerns also arose regarding China’s easy access to Pakistani ports and the potential establishment of a naval base, raising significant security apprehensions for India.
India opted to oppose the BRI and focused on its own connectivity initiatives, such as the International North-South Transport Corridor and the Chabahar port in Iran, although it lacked a comprehensive strategy to enhance regional connectivity.
Initially, the introduction of the CPEC project brought hope and relief to the people of Pakistan, who had been grappling with persistent power and energy issues. Widespread blackouts caused by severe power shortages had paralyzed economic activities and cast bustling market areas into darkness.
The energy crisis stemmed from exorbitant energy rates charged by independent power producers (IPPs), neglected power plants, deteriorating transmission lines, and years of populist government policies.
For more than three decades, citizens endured daily electricity outages of about 10 hours in urban areas and up to 22 hours in rural regions. These power cuts disrupted revenue-generating markets, industries, educational institutions, health-care facilities, and social activities.
Figure 1: Division of CPEC Projects
China’s initial focus on constructing new coal-fired power plants within the framework of CPEC was initially seen as a positive step. However, in late 2021, China shifted its stance to align with the objectives of the UN Climate Change Conference (COP26), committing to avoid developing coal-fired power plants overseas and striving for carbon neutrality.
This change had dire consequences for Pakistan’s coal-dependent power sector, as ongoing CPEC projects aimed at expanding the country’s power-generation capacity by 20 gigawatts were halted or shelved.
The economic viability of CPEC projects, along with Pakistan’s ongoing financial distress and its involvement in the “war on terror,” further complicated the situation. Rumors of impropriety on the Chinese side added to the challenges, leading to project delays and an increasing burden of unproductive debt.
While Pakistan’s unsustainable external debt and economic difficulties predated the CPEC agreement, the initiative exacerbated the country’s widening current account deficits and depleted foreign-exchange reserves. Despite recommendations from the International Monetary Fund (IMF), Pakistan imported significant volumes of materials for the projects before seeking a $6.3 billion bailout from the intergovernmental body.
The foundation of CPEC, heavily reliant on Chinese equity holdings in Pakistan’s infrastructure projects, has made Pakistan liable for 80% of the investments related to the corridor. This has raised concerns that the former flagship initiative of the BRI is flawed and a costly misstep for China.
China has consistently refused to defer or restructure pending debt repayments, fearing that it would set a precedent for other debtor nations and result in a collapse of bad loans. However, it is in China’s interest to assist Pakistan in maintaining its image as a reliable ally to the developing world.
Given these circumstances, it is crucial for economies in the region, particularly BRI countries like Pakistan, to monitor closely and manage the share of China’s debt in their total external debt.
Pakistan’s involvement in CPEC has led to impractical projects heavily reliant on foreign loans, exacerbating the country’s economic difficulties. Soaring trade deficits and low levels of foreign direct investment have been caused by excessive reliance on external borrowing without addressing underlying macroeconomic challenges.
Therefore, Pakistan needs to prioritize credit diversification and debt restructuring to regain control of its external sector and tackle the pressing macroeconomic issues at hand.
A more detailed article by this author can be found here: Debt ad Infinitum: Pakistan’s Macroeconomic Catastrophe.
Getty ImagesIndian Prime Minister Narendra Modi’s visit to the US has assumed huge significance amid global economic and geopolitical headwinds.
The White House is pulling out all the stops to welcome Mr Modi – it’s a state visit, the highest level of diplomatic protocol the US accords to visiting leaders. Mr Modi will be given a ceremonial welcome at the White House on Thursday before he holds direct talks with President Joe Biden.
Then there is the state dinner, a meeting with CEOs, an address to the joint session of the Congress and speeches to Indian-Americans, which have been highlights of Mr Modi’s past US visits.
But behind the carefully crafted ceremonies lie discussions that have the potential to not only infuse new energy into India-US relations but also have an impact on the global order.
The Indo-Pacific is where the US possibly needs India’s influence more than anywhere else right now.
The US has long viewed India as a counterbalance to China’s growing influence in the region, but Delhi has never been fully comfortable with owning the tag.
It may still be reluctant to do so but China continues to be one of the main catalysts driving India-US relations.
But India has not shied away from taking decisions that irk China. It held a military drill with US forces last year in Uttarakhand state, which shares a Himalayan border with China. Delhi has also continued to actively participate in the Quad – which also includes the US, Australia and Japan – despite angry reactions from Beijing.
Indian diplomacy has been getting more assertive about saying that this is the country’s moment on the global stage. It has good reason – India is one of the few economic bright spots in the world right now.Geopolitics is also in its favour – most countries want a manufacturing alternative to China, and India also has a huge market with a burgeoning middle class. This makes it a good option for countries and global firms pursuing a China plus one policy.
Tanvi Madan, director of The India Project at the Brookings Institution in Washington, DC, says that what matters to the US is what India does and not what it publicly says about China.
“At the end of the day, whether or not India has publicly embraced the tag, it is very clear that Indian governments have seen the US relationship as helpful as they deal with China,” she said.
Michael Kugelman, director of the South Asia Institute at the Wilson Center think-tank in Washington, added that the two countries had now started “seeing eye to eye on the broader Indo-Pacific theatre”.
“We are starting to see the US recognise the importance of western components of the Indian Ocean region. For many years, India’s main concern, for good reason, was the Indian Ocean region. Whereas for the US, it was the Pacific and the South China Sea. They will look at maritime security for the region now,” he said.
The joint statement may not mention China directly but it will be high on the agenda as the two leaders discuss ways to consolidate their presence in the Indo-Pacific.
But while they agree on China, the two countries have had differing approaches to the Ukraine war.
Delhi has not directly criticised Russia, which analysts say is largely due to its huge dependency on Russian defence imports and its “time-tested ties” with Moscow.
India relies on Moscow for nearly 50% of its defence needs, but that’s not the only reason. India has always taken pride in following its policy of non-alignment – or strategic autonomy, as it has been called in recent years. It doesn’t want to be confined to a specific power centre in the global order, which irked Washington diplomats in the early months of the invasion.
But the US has softened its stance in recent months – it has even overlooked India’s continuous purchase of crude oil from Russia.
India too has gone a step forward by publicly calling for an end to the war.
Ms Madan added that the different responses to the invasion weren’t a deal-breaker in India-US relations.
“When there is strategic convergence, the two countries are incentivised to manage their differences. Maybe not eliminate them, but manage their differences. And I think that has happened with their differing stands on Russia,” she said.
Meanwhile, other key areas of discussion include technology, defence and global supply chain management.
The two countries have signed what they call the Initiative on Critical and Emerging Technology. The deal will allow US and Indian firms and universities in different sectors, including IT, space, defence, artificial intelligence, education and healthcare, to work together.
The leaders may also announce more co-operation in technology, especially in semi-conductor manufacturing where China is the biggest player.
Defence is another area that has emerged as a key point of convergence.
India is the world’s biggest arms importer and Russia still accounts for a major chunk of it at 45%, data analysed between 2017 and 2022 suggests. But the headline here is that Moscow’s share used to be 65% until 2016 – that’s where the US sees an opportunity.
Washington’s share has grown but it’s still just 11%, behind France’s 29%. So some big-ticket defence deals are inevitable – they are likely to announce India’s purchase of the battle-tested MQ-9A “Reaper” drones and a deal between GE and Indian state-run firms to manufacture fighter jet engines in India.
Mr Kugelman says defence co-operation between the two nations “has come a long way”.
“If you look at the recent track record, one could argue that the treatment the US gives India is not dissimilar from what it gives to many of its allies,” he said.
While defence and technology will most likely see some big announcements, the same can’t be expected in trade.
The US is now India’s top trading partner at $130bn, but analysts say there is still huge untapped potential. The two countries have had major differences over tariffs and export controls.India has signed a free trade agreement with Australia and Dubai and is discussing similar deals with others including Canada, the UK and the EU.No such deal is on the cards this visit but the leaders may discuss or at least lay the ground for solving trade-related issues in the future.
Mr Kugelman said the differences were not discarded but set aside in the interests of more mutually beneficial areas of co-operation.
But he added that trade between Indian and US firms has flourished in recent years despite inter-government differences.
It may not be the top priority but trade will certainly feature when the two leaders discuss global supply chain issues owing to the pandemic and China’s monopoly.
“Trade used to be a sore subject but I think the two sides are approaching trade policy differently today. But you can’t look at global supply chain issues without eventually discussing trade,” Ms Madan said.
The timing of the visit is also interesting as both countries will hold elections next year and the two leaders will be looking at sellable headlines for their domestic audiences.
So some big headline-making deals are inevitable. But then, US-India relations have always been complex – with decades of mistrust followed by rebuilding of trust and then occasional flare-ups.
But Mr Biden seems determined to make India-US relations shine even though some in his country have questioned India’s record on human rights under Mr Modi.
US Secretary of State Anthony Blinken’s recent statement says a lot about the status of the relationship: “We know that India and the United States are big, complicated countries. We certainly have work to do to advance transparency, to promote market access, to strengthen our democracies, to unleash the full potential of our people. But the trajectory of this partnership is unmistakable and it is filled with promise.”
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India Meteorological Department data shows Ballia reported a maximum temperature of 42.2 degrees Celsius on Friday, which is 4.7 degrees Celsius above normal. The scorching summer has sparked power outages across the state, leaving people with no running water, fans, or air conditioners. Many have staged protests. Uttar Pradesh ChiefContinue Reading
In Pakistan, Sherry Rehman, minister for climate change and environmental coordination, said that all relevant departments of Sindh and Balochistan provinces have been placed on high alert. Pakistan’s Civil Aviation Authority asked airport officials to immediately take steps to ensure the safety of aircraft and cargo. Biparjoy is the firstContinue Reading
