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On the prospects for economic cooperation between Russia and India
How it is possible not to slow down the development of the Indian economy and what its place is in the international division of labor, and also how the country is trying to cope with social inequality and population growth President of the Russian Federation for state support of young Russian scientists - "Soft power" in the foreign policy of modern India: a comprehensive analysis "(2016-2017 years) Natalia Emelyanova.
- The high growth rates that the Indian economy demonstrates are associated with significant, one might say fundamental changes in the minds of Indian elites who are ready to apply new management models, while having quite clear claims to possessing the status of a great power in the 21st century.
India's turn from an internally oriented economy to an open economy model began in the 1990-ies, becoming a kind of reaction to changes in the world order after the Cold War. India's orientation towards the countries of the socialist camp has exhausted itself, fresh approaches were needed that made it possible to rethink and revise the country's policy, including with regard to neighboring states, expand its presence in the APR zone, and integrate into the global economy as a whole.
Unlike China, which is still staking on mass industrial production, the Indian economy is focused on the services sector, the development of the banking system and the financial market, as well as the high-tech sector. India’s economic growth over the past five years is impressive: since 2014, it has become the third largest in the world in terms of GDP (on average, 2,2 trillion dollars), second only to the United States and China. The share of the middle class in the economy is growing.
And yet its own fly in the ointment is available. Despite impressive successes in the field of economic development, the country continues to face serious threats. First of all, this is social inequality, which threatens to further aggravate in the conditions of the current rates of demographic growth: according to various forecasts, in twenty years in terms of population, India will be able to catch up and even overtake neighboring China. At the same time, more than a third of the country's population, unfortunately, still lives below the poverty line.
- In which industries is India the leader or leading power in the world division of labor?
- I would particularly note the successes in two areas: in the field of IT technology and the pharmaceutical industry. Thus, the share of information technology in the structure of national exports reaches 15%, which is about 85 billion dollars a year. A quarter of the world's medicines accounted for India. A separate development of these industries is registered in the ambitious program "Make in India", implemented under the leadership of Prime Minister Narendra Modi, which, without exaggeration, can be described as a program for the new industrialization of the country.
- How can you characterize the role of India in the current balance of Asian and world political forces?
- With regard to geopolitical interpretations, the position of the country looks curious. A very common point of view not only identifies a country as a rising power (rising power), but also to some extent offensively designates it as the weakest of the rising forces. However, Indian experts believe that for the upcoming strategic decisions in the foreign policy of the country, the position is in fact not so weak as it may seem at the first approximation. For example, political analysts Harsh Pant and Yogesh Joshi believe that this “imaginary weakness” allows us to assess the current geopolitical position of the country in the categories of “middle power”. In Asia, it is able to strengthen its position, thanks to the skillful maneuvering between the largest "players" - China and the United States, to receive support from the United States, wishing to balance the role of the PRC in Asian politics. Politically, the positions of India and the United States with respect to the PRC are increasingly converging. Moreover, the National Democratic Alliance in power believes that the American “Pillar in Asia” strategy in assessing the current balance of power in Asia is very close to the Indian strategy “Act in the East”. And it’s not only and not so much about Delhi’s concerns. Beijing, in its desire to hold back India, has taken a number of measures over the last decade that are of great concern to Indians: this counteracts India’s admission to the UN Security Council, and Pakistan’s increasing military-technical support. Separately, the Indian establishment “tickles the nerves” of the Chinese strategy “Pearl String” in relation to the Indian Ocean water area: the logic of its implementation by the Chinese side threatens Delhi with a strategic sea environment.
And yet India is able to say its weighty word on the world stage and is preparing for this, and in many different areas. On the one hand, opportunities are growing in the development of humanitarian technologies, various campaigns are being developed in the field of soft power. On the other hand, military power is growing. According to the Global Military Strength Index, India regularly enters the Top 10 states with the strongest armed forces. According to the London International Institute of Strategic Studies in 2016, the defense budget of the country was estimated at 51,1 billion dollars. For military expenditures, it outstripped Germany, Italy and France. The Stockholm Peace Research Institute in its reports also notes India's high spending on arms purchases, for the period from 2011 to 2015. India bought arms at 14 billion dollars, coming in first, outperforming Saudi Arabia (2 billion dollars) and 7 times China (3 billion dollars) by 4,7 times.
- How does India participate in territorial conflict situations in South and South-East Asia and why does it increase its military power?
- The territorial disputes between India and China and Pakistan remain unresolved, which destabilizes the development of the Indian states of Jammu and Kashmir and Arunachal Pradesh, which China calls South Tibet. However, in recent years, both sides have made serious attempts to resolve the border dispute in Arunachal Pradesh through actual control (unofficial border).
The situation in the Indo-Pakistani territorial dispute is more difficult to assess in a positive light. Despite the relative status quo, the configuration of forces in South Asia is changing rapidly. At the same time, the role and importance of South Asia in the system of modern international relations is growing. Whereas earlier regional security was more determined by Indo-Pakistani interactions, now the region is in the grip of two trends: on the one hand, India and China with their growing power, on the other, Pakistan and Afghanistan as destabilizing forces - two unstable states "in a state Decay ".
In the near future, it is possible to tighten Indian rhetoric towards the northern neighbor, who is now weakened and forced to transfer armed forces from the Indo-Pakistani border to fight the Taliban in the north-west of the country. One of the main goals of the current Indian leadership is to achieve international isolation of Pakistan. Moreover, with active involvement of the US, gradually narrowing their ability to maneuver between Delhi and Islamabad and using their interest in strategic partnership.
As for why India is increasing its power? She is not alone in this process and is in the general course taken by the countries of the Asian region: military budgets are growing, militarization is increasing, numerous alliances are developing. All this can be regarded as a factor in the formation of a new balance of power in Asia. India's increased military might demonstrates that it does not intend to remain outside, and is ready, if necessary, to participate in the formation of a new agenda.
- What could be more close economic cooperation between Russia and India at the moment, when we have made some progress in the sphere of oil production?
- Yes indeed. Russian-Indian cooperation in the field of oil production has improved in recent years. I would have outlined more broadly: there are serious shifts in the oil and gas field as a whole for such landmark projects as Sakhalin-1, Sakhalin-2. Here the serious contribution is carried out by the Working Group on Energy of the Russian-Indian Intergovernmental Commission.
In general, energy shortage is an acute problem of the Indian economy, so the Indians are actively investing in various oil and gas projects. A vivid example is the Farzad gas field in Iran, in which the Indian side is ready to invest up to 20 billion dollars. The activity in Central Asia has grown. The region is betting in the context of solving the problem of diversifying energy supplies. Thus, the largest oil and gas corporation Oil and Natural Gas Corporation (ONGC) has been actively investing in Kazakhstan during the last 10 years. The Indian authorities are ready to invest in trunk pipeline projects: in particular, the Indians are ready to invest up to 7,6 billion dollars in the Turkmenistan-Afghanistan-Pakistan-India pipeline with a total length of 1 thousand 680 km. For our part, we are striving to more actively involve Indian partners in the implementation of the joint project with China, "The Power of Siberia." But there are no sensational breakthroughs yet.
A particular interest is the activity of Indian oil refineries. Such as Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL). These companies are trying to unite their efforts in the global market. The strongest of them IOC builds a model of a transnational energy corporation and is ready to implement major projects in Russia.
But, as I noted earlier, we need to monitor the growth of opportunities in the fields of IT and pharmaceuticals. In these areas, unfortunately, we do not yet sufficiently develop the joint potential of cooperation. The big Indian business in these areas is obviously extremely motivated in reaching the world level, although while in terms of promoting their brands, Indian companies see their priorities in the US and Europe. Therefore, they are not too active in Russia. Nevertheless, I would mention the companies Infosys, WiPro and Cognizant Technology. These are large Indian outsourcers for the production and support of software. Infosys is the most influential of the presented, vivid example of the success of a technological incubator in Bangalore, a well-known Indian analogue of the Silicon Valley. Indian technology companies Micromax, the largest manufacturer of mobile devices in the world in a low price segment, and also the company-manufacturer of cars Tata Motors are opened to cooperation. Tata Motors is integrated into the global automotive market, with large blocks of shares in Rover, Land Rover, Jaguar, Daimler. Indian pharmaceutical companies are developing rapidly. Reddy's Laboratories, Ranbaxy, Aurobindo Pharma, Natco Pharma, Mylan Laboratories, etc. Their main advantage is the production of high-quality and simultaneously available drugs.
- Projects in what other areas can potentially be of interest to Indian investors in Russia and, perhaps, Russian in India?
- In addition to the oil and gas sector, information technology and pharmaceuticals, Indians are traditionally interested in procurement of weapons. Especially now, when the Indian army is modernizing. But this is a topic for a separate conversation. Indians are also interested in projects in the field of construction, retail and wholesale trade.
Without a doubt, India will, as they say, "call more and more for themselves." Indian Prime Minister Narendra Modi came to power on a wave of promises to modernize India, ensuring high growth in the economy. He can do it. As Governor of the State of Gujarat, he made from him a state-leader in the investment climate in India.
At the state level, the main work on attracting investment is now led by the National Investment Promotion Agency InvestIndia. First of all, it is aimed at promoting infrastructure projects. Here we are talking about the participation of Russia in the industrial corridor "Delhi-Mumbai". This “growth corridor”, due to the special freight railway 1,5 of thousands of kilometers, should connect the capital Delhi with the economic center of the country Mumbai.
Among the measures that stimulate the flow of investment in India are the abolition of licensing of production activities, allowing foreign participation in projects up to 100% and the absence of dividend restrictions and requirements for the maintenance of local components.
As far as I know, there are studies of possible preferences of Russian investors in India: these are manufacturing industries, the financial sector and trade.
- What are the prospects for the development of scientific cooperation between the two countries?
- At the state level, this issue is regulated within the framework of the Intergovernmental Russian-Indian Commission on Trade, Economic, Scientific, Technical and Cultural Cooperation, the Complex Long-Term Program of Scientific, Technical and Innovative Cooperation up to 2020 and the Basic Program of Scientific Cooperation.
For a long time, the Russian Academy of Sciences and the Indian National Academy of Sciences have contributed to the development of Russian-Indian scientific ties. Nevertheless, over the past two decades there has been a serious shortage of funding and proposals in the field of scientific exchange.
Now, for a number of reasons, the model of interaction between the two countries in the scientific sphere is changing. Funding goes through the competition of joint projects, which are supervised by the RFBR and RNF jointly with the Department of Science and Technology of India (DST). In the framework of co-financing, 100 projects are being implemented. In general, projects are supported in the field of physics, biotechnology, engineering and electronics, alternative energy sources, etc.
India is also interested in high-tech start-ups: they are granted tax holidays for 10 years.
Since 2015, the Russian-Indian Association of Universities is operating, which includes 9 Indian and 21 Russian universities. In addition to the fact that the association is included in the grant programs of the two countries, its activities are designed to increase the academic mobility of Russian scientists within the framework of the Indian government's Global Initiative for Academic Networks (GIAN). It remains only to wish that this program as possible and more successfully implemented. Without academic mobility, modern science is impossible.