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Polarizing the World: USA, China and the opportunity for India

US-ASEAN summit provides an opportunity for India to play a greater role in Asia and Indo-Pacific with the US and its allies. 

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Last week the Chinese Vice Foreign Minister Le Yucheng cited the ‘Global Security Initiative’ (GSI) proposed by Xi Jinping a month ago at the Boao forum as a replacement for “confrontation, alliance and a zero-sum approach with dialogue, partnership and win-win results”. 

Since the Biden Administration came to power a shift was found from Trump’s idea that Allies are a burden, to the new American Rush to form alliances. A senior US official told the financial times, “The talks will focus on building interlocking and overlapping coalitions as opposed to a united front against China.” The formation of AUKUS can be taken as an example. Biden even tried to get a reasonable relationship with Putin so that the US could focus its energy on China. 

Bill Burns, the Director of the CIA in an interview with the financial times said, “(Putin) demonstrates that declining powers can be at least as disruptive as the rising ones.” With the Russia-Ukraine war entering its third month the idea of a Chinese invasion of Taiwan following a short and swift Russian takeover of Ukraine seems to have vanished. Yoon Suk Yeol’s victory in South Korea’s presidential election makes it even more clear how their nation would shift into the American Sphere of Influence. 

The US has managed to keep its balance between the Indo-Pacific and the unexpected Ukraine Crisis and not focus completely on a particular theatre except for those few times when they subtly asked India to join a side instead of sitting on the fence. Amidst it, India managed to walk the diplomatic tightrope, and with Modi’s successful European tour it looks so that as far as the discussion goes France is India’s New Russia. 

Russia-China “no limit” friendship brings Russia into the Chinese Sphere of Influence. Chinese Belts and Roads (BRI) initiative by 2022 has extended to about 146 countries signing the MoU. BRI still faces many geopolitical challenges. America’s Build Back Better World (B3W) is one of them. 

Yesterday, China signed a security pact with the Solomon Islands which now even allows them to have their military presence in the South Pacific. 

The Opportunity for India

The US already recognizes India as a key ally in its Indo-Pacific strategy, irrespective of their administration. For India the resumption of the Free Trade Agreement (FTA) with the European Union last year was something to be excited about. It won’t be a cakewalk but certainly something to up to. India’s concerns about the Chinese debt trap were enough to make it hold out the Regional Comprehensive Economic Partnership, and even BRI. 

Larger cooperation with Europe was on Modi’s agenda during his recent European visit. Europe and Indian partnership if kicked off properly can help India gain a lot of investment. The ideal approach for India is to use the European differences to its benefit. Germany faced a big problem due to the Ukraine Crisis namely suspending the certification of the Nord Stream 2. Unlike India which has a stagnant 10 Billion Dollar Trade with Russia, Germany has an ever-growing 65 billion dollar trade with Russia. Modi when met the Nordic Leaders even highlighted India’s beginning of an outreach to the smaller European countries. 

Coming to Asia, the Sri Lankan Economic Crisis even helped India to reduce the gap between Delhi and Colombo. Sri Lanka has about 50 million dollars as usable from the foreign reserves of 2.31 billion dollars. Sri Lanka is already scheduled to pay around 7-8 billion dollars this year of which an international sovereign bond worth 1 billion dollars matures this July, the island nation looks in big trouble. Sri Lankan authorities have already started the next round of negotiations with the IMF for a bailout. India as of now has provided more than 3.5 billion dollars to ease the problems. The economic crisis even turned into a political turmoil and India is closely watching those developments. This crisis for India is an opportunity to remove the Chinese foothold and bring the island again into the Indian sphere of influence. Nepal is also on the verge of a crisis like Sri Lanka. Nepal’s foreign reserves were reduced by 18% in mid-march. However, the attempt is to bring that India-Bangladesh equation to Nepal and Sri Lanka. 

The possibility of a Quad 2.0 had been going on in the strategic circles after the first anniversary of the Abraham Accords followed by the launch of the Economic Cooperation Forum (ECF). The idea of investments like the US, production capacity like India, innovation like Israel, and supportive capital like UAE had generated a lot of discussions. Indeed, utilizing the ECF for economic cooperation and progress is the best possible way to get things going. 

Lastly, a US-ASEAN summit provides an opportunity for India to play a greater role in Asia and Indo-Pacific with the US and its allies. 

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