Indian Defence Review

If the Brexit triggers a recession in EU, in all probability the price of oil would fall, as the demand in the second largest oil market would reduce. The decline in the oil price could lead to a reduction in the oil production by OPEC, to cater for the demand and price; this in turn may have a ripple effect on the growing economies of India and China. A recession in Europe could also have significant effects in the ASEAN, as some of the members have a substantial trade exposure in the EU and British markets.

Britain, home to some 1.4 million Indians, is India’s 12th-largest trading partner, and being one of the only seven countries with which India has an export surplus, which totals $3.7 billion. A falling currency, consequently, could hurt that surplus. Brexit would also force India to reassess the not yet implemented, Broad-based Trade and Investment Agreement, a free-trade agreement New Delhi launched in 2007 with the EU. This will probably create the space for India to negotiate a separate trade agreement with Britain.

India is Britain’s third-largest source of foreign direct investment, with approximately 800 Indian firms employing 110,000 people. These include Tata Steel, England’s largest steelmaker, and Tata Motors, which owns England’s largest carmaker, Jaguar Land Rover (JLR). One of the reasons to set up base in Britain was to ensure access to the European Union; if Britain would no longer be a part of EU, then companies may have to rethink their business strategies.

A nationalistic Britain that would emerge with Brexit could also create issues with stringent visa requirements for Indian IT professionals. Racist taunts have begun, though mainly against the Polish immigrants, but the Indians too are feeling insecure. In the end, Britain could become more dependent on India to outsource its IT needs, but the coming months, with the market volatility, would be crucial to assess the effects of Brexit.

SCO

An important item that did not get much prominence in the media was the Indian membership to the SCO. The SCO is a Eurasian political, economic, and military organisation founded in 2001 in Shanghai, by the leaders of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. These countries, except for Uzbekistan had earlier been members of the Shanghai Five, an organisation founded in 1996; after the inclusion of Uzbekistan in 2001, the present name was adopted. In July 2015, the SCO decided to admit India, which had been an observer for 10 years. India signed the memorandum of obligations on 24 June 2016, at Tashkent, along with Pakistan, thereby starting the formal process of joining the SCO as a full member; the process would be complete by the next meeting at Astana in 2017.

Membership in the group potentially offers India greater access to the energy resources of Central Asia. It will also provide an opportunity to intensify anti-terror cooperation with all nations, especially China and Pakistan; anti-terror cooperation is a subject under the SCO that all member countries have to undertake. Western media observers, however, believe that one of the original purposes of the SCO was to serve as a counterbalance to NATO and in particular, to avoid conflicts in areas bordering both Russia and China that would give an excuse for USA to intervene. There have been many discussions and commentaries about the geopolitical nature of the SCO; many analysts believe that the SCO is aiming to gain greater access to the Persian Gulf, once Iran, now an observer, becomes a member. The Western nations, hence, are following the expansion of the SCO with keen interest.

Concluding Thoughts

India is the world’s second most populous country, the world’s most-populous democracy and one of the fastest growing major economies. As the seventh largest economy by nominal rates and third largest economy in terms of purchasing power parity, India is a regional power, a nascent global power, and a potential superpower. In the last few years, India has emerged as a growing international influence and a prominent voice in global affairs. With such testimonials India has formed groups, and sought membership of other major world groups, for economic and security cooperation; it is not a part of any major military alliance, yet it has close strategic and military relationships with most of the major powers and developing nations, alike.

24 June 2016 is a date that will be well remembered in the history of Indian foreign relations. Whatever happened on this day, India has not to lose hope as far as membership to the NSG is concerned. It should pursue its efforts with renewed vigour as a mature future world power. There are talks of India withdrawing its commitment towards the Paris Climate Agreement; it would be an ill-advised move, and would irreparably harm India’s credibility. Brexit need not worry India too much, though it will have some economic repercussions, which will become clearer as days go by. The membership of SCO must be viewed in totality; what the organisation was in the post-9/11period, and what it is today, must be seen with full consciousness of geo-political realities.