Indian Defence Review

Connect the Dots

Post collapse of Soviet Union in 1991, the US emerged as the sole superpower. Even though Warsaw Pact ceased to exist, but NATO was sought as a security guarantee in the future against a belligerent or expansionist Russia. As a result NATO kept growing absorbing the former Warsaw Pact nations thus inching closer to the Russian border.

The world noticed the US supporting anti-government uprising and regime changes around the Russian periphery. An expansion of US was noticed taking place in the Asia Pacific Region too, closer to the East and South China Sea. By 2010, the US had successfully closed on to the Western side of Russia as well the coastal side of China, thus effectively endangering both Russia and China’s access to warm waters which were major trading routes.

The Russian economy was also badly hit with oil prices plummeting due to excess production manipulated by the US resorting to ‘Hydraulic Fracturing’ or “fracking” technology, imposing number of sanctions on Russia as Vladimir Putin, President of Russia, declined to toe their line and had instead focused on reviving the Russian economy. The US also engineered a regime change in Ukraine in 2014 through which two major Russian oil and gas pipe line were passing to Europe.

That old adage still holds good – “The enemy’s enemy is my friend.” This saying came out to be true when the world got to witness a combined effort of two strong men – President Vladimir Putin and Xi Jinping, President of the People’s Republic of China when China helped the Russian economy to bounce back within a short time during the slump in the price of oil in the period 2015-2017.

The Politics of Trade in Oil

To understand the essence of the prevailing situation, one has to look back a little into the past. In the present global macro-economic context, it is important to note that by 1975, every member of the Organisation of Petroleum Exporting Countries (OPEC) had adopted the Petrodollar system i.e., agreeing to sell their oil in American currency. Today, the United States (US) dollar currently makes up two thirds of the global economy and serves as the reserve currency underlying global trade.

Russia and China getting into bilateral trade, opened the door for deepening economic ties between Moscow and Beijing. The central banks of Russia, China and few other countries opposed to the US, started the slow process of dumping the dollar and the rush for purchase of gold began in an increasing effort to promote trade in Yuan and non-dollar denominated currencies.

As the Russia-China partnership began to grow, albeit slowly, by the year 2016, the US realised that due to limited connectivity by pipelines and the absence of potential replacement of gas resources, Europe’s energy dependence on Russia had started to grow significantly.

Few Central and East European countries such as Germany, Hungary, Poland, Austria and Slovakia had by then started to meet over 60 percent of their requirements through energy imports from Russia. Interestingly, around the same time, the Gulf Cooperation Council (GCC) led by Saudi Arabia under Mohammed bin Salman Al Saud (MBS) went ahead and entered into several long-term energy price control agreements with both Russia and China in the year 2018.

India as well, signed currency swap agreements with countries such as Japan and the UAE among others, adding over $100 billion to essentially reduce the dependency on the US dollar in India’s bilateral trade and give a push for the use of local currencies. Also, as India had not increased its gold reserves in over 10 years, suddenly nearly doubled its reserve by the end of the year 2018.

The main concern of the US had now become to somehow curtail the increasing dependency of Europe for oil and gas on Russia and Iran.

Developments in Ukraine

Thus, to begin with, the US pulled out of the Iran Nuclear deal reinstating sanctions on Iran, essentially to push Iranian oil out of the market. Once the Iranian oil could no longer be traded freely on the international exchanges, the resulting gap in the supply of oil globally, was filled by the US itself. The US achieved a high level of oil production essentially by deregulating nearly the entire US coastline to offshore drilling as also 42 National Parks for extracting oil to emerge as the largest oil producer and grab the space in the market left by Iran.

However, Europe’s energy dependency kept increasing on Russian oil and then what followed, leading to the present situation, is for all to see.

So, what has the US really done till now to save their close friend Ukraine from facing the ongoing destruction other than issuing threat rhetoric at various levels and enhanced selling of their military equipment as also in addition putting number of sanctions on Russia? What keeps Zelensky still so emboldened and not caring for his own countrymen suffering so much? Is he singing someone else’s tune?

To get this answer just go back a little in time and one will realise that it is an accepted fact that American intelligence agencies and NGOs played a major role in organising a coup in 2014 and installing the far-right Nazi inspired regime in Kyiv. The nationalists who came to power as a result of the American-backed coup, forced the notion of Ukrainian nationalism on the people of Eastern Ukraine.

Soon after coming to power, the pro-West Government in Kyiv mandated the use of Ukrainian language in all public places and sign boards. Radio and TV shows were asked to commit certain number of hours in a day for their shows in Ukrainian language.

The Government in Kyiv also passed a law to ensure that only Ukrainian language is taught in pre-schools for children. Zelensky, a Russian speaker himself, after coming to power, arrested the opposition leader who came second in the elections and shut down three Russian speaking Ukrainian news channels that used to criticise him.

All these actions by the far-right nationalists under Zelensky who enjoyed the blessings of the Super Power, really hurt the sentiments of the minority in Ukraine and especially the other half of Ukrainian population that lives East of Dnipro River and who were ethnically Russian and spoke Russian as their first language. This led to a feeling of disenfranchisement among the ethnic Russians in Ukraine.

Sadly, the West continued to ignore these human rights violations in Kyiv and instead increased their focus on getting ‘NATO’ closer to Russian border essentially to finally choke the Russian gas and oil supply line. All these developments then finally boiled over leading to the ongoing conflict in 2022.

Ukraine continues to suffer while none of it’s so called ‘NATO friends’ have come forward with their military power to help Ukraine to embroiled physically along with them in the war on ground. Mere imposition of sanctions on Russia benefits whom? It is anyone’s guess that the biggest beneficiary of this ongoing conflict is the US followed by the UK. Ukraine is just being used as a fodder.

It is very interesting to note that though several European countries are supporting imposition of US sanctions on Russia, but somehow their oil and gas purchase from Russia has only increased manifold in the last one month. The Russian earnings have risen to three times more than the usual level.

India’s Clear and Firm Stand

Under the prevailing geopolitical dynamics, India has demonstrated a very clear and firm stand. It was very sad to hear the kind of statements made by Daleep Singh (an Indian American), the Deputy National Security Advisor in the US Government that were not commensurate with the laid out diplomatic norms and courtesies.

It is ironical that while Daleep Singh seemed very perturbed with Russian bombings in Ukraine; but strangely enough, he and his media have been totally silent on the repeated bombings done in Somalia, Gaza and Yemen during last one month. What a double standard!

Despite receiving veiled threats through demarches and strongly worded advisories from the US and its close allies, the effect of India’s firm stands taken on the Russian Military intervention in Ukraine, was clearly evident by the barrage of visits undertaken by Heads or Representatives of 18 countries in the last one month. India is currently the sixth largest economy and likely to become the third largest in next few years.

As India believes in a multi-polar world, she decided to adopt a neutral stand keeping her own interests in mind rather than picking a particular side to support. India has an interest-based alliance with the US, Russia, China, France, Japan, Australia, nations in the Middle East, Israel and several other countries.

Thus, by taking a ‘neutral stand’, India has conveyed a clear message to the world that neither India will dent the long-standing strategic partnership with Russia nor will it weigh the sanctity of every relationship with one another.

This also came out quite clearly during the recently concluded 2 + 2 meeting held at US as also during the one to one virtual meeting between Prime Minister Narendra Modi and President Joe Biden. Both sides agreed to cooperate and focus on mutual issues-based partnership only.

As far as QUAD is considered, India has always maintained that this is not a military alliance. Thus, India’s current stance is not going to have any effect on her position in the QUAD.

The Ukraine crisis will definitely push up wheat prices. Large number of countries that have been importing wheat from Russia and Ukraine, are now vulnerable due to the prevailing situation. India is the largest wheat producer in the world but somehow the World Trade Organisation under the supposed pressure of US Lawmakers, is always finding some excuse or the other to place restrictions to prevent India from becoming the largest wheat exporter.

Thus, bilateral deals are the best way to go ahead as already done with Egypt, Israel, Oman, Nigeria and South Africa so far.

India is growing economically in multi-domain and is becoming an attractive business hub for major countries of the world. Indian diasporas too, are increasing virtually all over the world. But one major concern which prevails is that which way the India–EU relationship will now turn to? The answer is very simple that national-interest always prevails under such circumstances.

We must remember that growth of India-EU relationship goes back to 2004 when both decided to build relationship based on common goals and principles.

Today, the EU looks at India as a global growth engine offering job creation and investment opportunities besides India providing a strategic connect between Europe and Asia. The ties between India and Europe are based on multilateralism covering broad spectrum including trade, investment, climate change, science and technology as well as artificial intelligence.

Today, while India is EU’s largest trading partner, EU is India’s third largest partner. Trade in goods between India and the EU has increased by 12 percent in the last decade which is little less than what India has with the US and China. Trade in services between the EU and India had reached $32 billion in 2020 and as a result, foreign investment flow increased from eight to eighteen percent in the last 10 years.

Today, some 6000 European companies are present in India. The largest sectors of India’s exports to the EU are engineering goods, pharmaceuticals, gems and jewellery, other manufactured goods and chemicals.

We must not ignore the fact that India presents itself as a great natural geographical segment extending deep into the Indian ocean acting like an unsinkable ship which is capable of effectively dominating all major sea trading routes. The US Indo-Pacific Command realises this fact and the role that India can play as a maritime dominant power.

The EU and India have also instituted several mechanisms for greater cooperation on pressing security challenges like counter terrorism, nuclear non-proliferation and maritime security. Information Fusion Centre (IFC) of the Indian Ocean Region (IOR) in New Delhi has recently been linked up with the Maritime Security Centre – Horn of Africa (MSC-HOA) established by the EU Naval Force (NAVFOR).

The scope for cooperation especially in the Indian Ocean is very large as it is the main conduit for global trade and energy flow. India and the EU see each other as partners in securing the Indian ocean by strengthening institutions, rule of law and a regional architecture. Today, India has very strong bilateral relationship with number of EU countries namely France, Sweden, Hungary, Poland and so on.

Thus, India’s neutral stand taken in the Russian Ukraine crisis will have no effect on EU-India relationship. This has been very evident with the number of visits by heads of states or representatives as also several one-to-one virtual meetings with senior functionaries having taken place reassuring bilateral relationships.

Conclusion

Today, India is being seen as a great investment hub which is inching closer to become the third largest economy in the world. The current unprecedented push given by the Government of India towards indigenous defence production, self-sustainable technological advancement and economic growth must be taken forward by participation of every citizen of the country.

Make in India is a catalyst to strategic autonomy and it will only help further to develop mutual interest and issue-based ties individually with all major powers of the world. Keeping this approach in sight, India is already a member of multi alliances such as the United Nations, G-20, QUAD, SCO, BRICS, LEMOA etc. With the growing clout, India now sooner than later, needs to be included as a permanent seat in the United Nations Security Council.

Today, all Indians must feel proud to be having a great visionary leader and an astute team at the top with sharp powers of judgement and foresight. This strong visionary outstanding team has clearly demonstrated as to how India’s foreign affairs involving global relationship and equation under the prevailing security dynamics vis-a-vis maintaining independent outlook and strategic autonomy has to be handled. Be it Russia, China, Pakistan, Sri Lanka and other neighbouring countries as also various world forums and multi alliances, India must continue to maintain her identity of legitimate one-to-one interest- based connect firmly.