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Make India the world’s factory

opinionMake India the world’s factory

For strategists who favour Zero Sum outcomes, there is a chain of logic in the way in which President Bill Clinton behaved towards the newly born Russian Federation. This was in effect to continue the policy pursued during the Soviet period, of trying to weaken the country that the Kremlin ruled. The reason was the calculation that Russia was the only country (with land) in Europe that had the potential to displace the US as the primary power where influence on Europe was concerned. In much the same way, the PRC’s continuous effort to reduce the stability and growth of India springs from the realisation that India is the only country in Asia that has the heft to challenge Beijing’s primacy in this continent. Even during the days when Francis Fukuyama was (correctly) predicting the victory of the US during the Cold War with the USSR and (incorrectly) claiming that the world was witnessing the “end of history”. Such a claim was as bizarre as the effort of Bill Clinton to make the conditions specified in the Nuclear Nonproliferation Treaty eternal. Even 99-year treaties are not honoured, as for example the honouring of the agreement that took away the rights of Afghanistan to Pashtun territory south of the Durand Line, so it is difficult to understand how any serious policymaker could will himself to believe that a treaty could be made eternal where adherence of signatory states was concerned. At a time when finally the brainchild of Deng Xiaoping of making China the factory of the world appears to have run its course. Demography, increasing costs of production and shifts in geopolitical tectonic plates are causing countries such as the US that outsourced most of their manufacturing to the PRC to now look elsewhere. During the era when Emperors of China ruled from inside the Forbidden City, a country that was not directly ruled from Beijing had to either acknowledge the status of a vassal state to China or to be treated as an enemy. That policy of Imperial Overreach has been resuscitated by CCP General Secretary Xi Jinping, that too transparently.

Given the impossibility of taking over Taiwan with the consent of the people of that country, either Xi will have to admit that his objective of annexing Taiwan is an illusion, or try to extinguish the sovereignty of the island by kinetic means. Which is why the supremo of the CCP is delighted that the US and the rest of NATO have been trapped in the quagmire of Putin’s Special Military Operation. Both a weakened Russia as well as an exhausted NATO suit his designs perfectly, as such a situation helps generate a situation where NATO will find it practically impossible to suitably defend Taiwan, both as a consequence of the war in Ukraine as well as the resultant anti-war sentiment within NATO countries caused by the economic consequences of the sanctions regime imposed on the Russian Federation. When the Philippines lost control over the Spratly Islands and India was attacked and its sovereignty challenged by the PLA, the response of Washington was feeble in comparison to the manner in which the drums of war have been sounding in the White House since Russia launched its invasion of Ukraine. In a twist of history, Japan, Taiwan and the US in particular are facing a kinetic threat from the very country that they helped turn into a superpower. Small wonder that their appetite to further boost the economy of the PRC through investing massively in that country has flagged.

The obvious alternative to the PRC as a platform for manufacturing is India. For US defence companies in particular, only relocating much of their manufacturing to India can ensure that they hold on to markets where Beijing and Moscow are providing more and more competition. Given the differences in the political chemistry of China and India in particular, the geopolitical fallout of investing in India is very different from that created by investing in China. Prime Minister Narendra Modi has within his grasp the possibility of catalysing in India the same transformation from a low income country into a superpower that China has witnessed since the 1990s. It is a once in a lifetime opportunity, and for the sake of the 1.4 billion people of India, the opportunity birthed by geopolitical and demographic shifts needs to enter an advanced stage during the next three to five years.

MDN

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