Global Optimism Towards India: RSTV- Big Picture

Global Optimism Towards India:- Download PDF Here

Anchor: Frank Rausan Pereira

Guests:

1- Manjeev Singh Puri, Former Ambassador

2- Prof. Swaran Singh, Chairperson, Centre for International Politics, JNU

3- Patrick Gerard Buchan, Director, Center for Strategic & International Studies

What’s in the news?

• India offers a perfect combination of openness, opportunities, and options for other nations to invest in a variety of sectors in the country.
• In the post  Covid-19 new world order, there is global optimism towards India.
• The world is looking towards India to play a major role in the Indo-pacific region and beyond, to look for multi-faceted solutions in the short and long term.
• Bilateral meetings and summits addressed by the Indian Prime Minister have  created  fruitful outcomes.

Why are several nations around the world looking towards India?

• India has become the fifth largest economy in the world.
• The International Monetary Fund (IMF) projects India to be the fastest growing major economy in 2020.
• India has developed closer relations with other major democracies of the world.
  • India is negotiating dialogue with QUAD plus grouping.
  • It has welcomed the idea of the US for convening an expanded gathering of the G-7 leaders including Australia, South Korea along with India.
• India is becoming an attractive economic destination globally.
  • Owing to the anti-China sentiment in the US and other nations,  leading multinationals are shifting bases from China to India, Vietnam and Taiwan.
• What makes India an attractive destination for economic investment ?
  • Nearly 18% of the global population stays in India.
  • Before the Covid-19 pandemic,  India had reached the highest mark of Foreign Direct Investment (FDI) of about  49 billion dollars already.
  • China was the second largest FDI recipient in 2019. After the pandemic India is likely to attract more foreign investment in various sectors.
  • New wave of economic reforms being introduced in India like revised labour laws, relaxations for the MSMEs, corporate tax reductions to 22% and only 15% taxation for new manufacturing companies (which will be set up after October 1, 2020) makes India an attractive destination for investment.
  • The Covid-19 pandemic is estimated to shrink the world GDP output by 3% in 2020. India has a relative advantage of 1.9 % growth. It is among leading economies of Asia besides China.

India in the global perspective:

• The US considers India as a major strategic partner and acknowledges the huge success of the Indian diaspora in the US.
• The US is keen on a strategic and multi-faceted  partnership with India in the Indo-Pacific region. It also wants  to involve smaller powers like Japan, South Korea and Australia.
• India has currently adopted a flexible foreign policy instead of its post independence non alignment stance, by associating with other nations with similar interests.
• India has become more active in participating in various bilateral and multilateral forums.
• Geographically India is situated between two oceans which make it an ideal geo-strategic power.
• The US considers India, a perfect partner in its efforts towards offsetting rising Chinese expansionism.

India’s relationship with it’s neighbours in the present scenario:

• The Reserve Bank of India (RBI) has signed a currency swap agreement with the Central Bank of Sri Lanka.
  • The agreement was signed under the SAARC Currency Swap Framework 2019-22 would be valid till November 13, 2022.
• India has signed a trans-shipment deal with Bangladesh for trans-shipment of goods to its North-eastern states through Bangladesh’s Chattogram (Chittagong) port.
• India demonstrated its “neighbourhood first” policy by sending medical aid and food supplies to Maldives, Mauritius, Seychelles, Madagascar, and Comoros onboard Indian Naval Ship ‘Kesari’ in its Operation Samudra Setu.
• India presents an attractive investment market to the neighbouring countries. It is also a huge consumer market for goods and services from these nations.
• India is a major supplier of medical assistance to neighbouring countries, especially  Nepal.
• A  high level trade and investment dialogue underway to oversee the finalisation of India – EU Free trade agreement.
• India has become the second-largest source of foreign direct investment (FDI) in the United Kingdom
• India is growing  both in terms of outflow and  inflow of FDI and  transfer of  technologies across various platforms.
• India  is taking up FTA negotiations with the US in the defence and energy sectors.
• The first batch of the Rafale fighter jets from France ( under the  inter-governmental agreement with France for 36 Rafale to boost the IAF’s combat capabilities)  has  reached India.

The best way forward:

• In the new global scenario, India could consider reviving Free Trade Agreement (FTAs) like the Regional Comprehensive Economic Partnership (RCEP).
• India should continue to expand its economic potential and carve out an important strategic position in the world.
• The Indian PM highlighted during the US  Business Council’s Ideas Summit 2020, that India is focusing on ‘Openness, opportunities and options’ when it comes to the Indo- US  relations.
• The US must acknowledge the contribution made by Indians to the growth of the US economy and must revamp it immigration rules for Indians.
• India could become the factory of the world, as Indian MSMEs are rapidly scaling innovation and manufacturing to take advantage of the new opportunities.
• Countries like Japan and Australia should cooperate with the US and India in the Indo-Pacific region to push back China.