NYT: Russia’s War Could Make It India’s World

LewisBraham

An important article you can interpret as an investor or 1,001 other ways:
https://nytimes.com/2022/12/31/world/asia/india-ukraine-russia.html
An excerpt:

A “world order which is still very, very deeply Western,” as he put it in an interview, is being hurried out of existence by the impact of the war in Ukraine, to be replaced by a world of “multi-alignment” where countries will choose their own “particular policies and preferences and interests.”

Certainly, that is what India has done since the war in Ukraine began on Feb. 24. It has rejected American and European pressure at the United Nations to condemn the Russian invasion, turned Moscow into its largest oil supplier and dismissed the perceived hypocrisy of the West. Far from apologetic, its tone has been unabashed and its self-interest broadly naked.…
….In other words, with its almost 1.4 billion inhabitants, soon to overtake China as the world’s most populous country, India has a need for cheap Russian oil to sustain its 7 percent annual growth and lift millions out of poverty. That need is nonnegotiable. India gobbles up all the Russian oil it requires, even some extra for export. For Mr. Jaishankar, time is up on the mind-set that “Europe’s problems are the world’s problems, but the world’s problems are not Europe’s,” as he put it in June.

The Ukraine war, which has provoked moral outrage in the West over Russian atrocities, has caused a different anger elsewhere, one focused on a skewed and outdated global distribution of power. As Western sanctions against Russia have driven up energy, food and fertilizer costs, causing acute economic difficulties in poorer countries, resentment of the United States and Europe has stirred in Asia and Africa….Grinding trench warfare on European soil seems the distant affair of others. Its economic cost feels immediate and palpable.
“Since February, Europe has imported six times the fossil fuel energy from Russia that India has done,” Mr. Jaishankar said. “So if a $60,000-per-capita society feels it needs to look after itself, and I accept that as legitimate, they should not expect a $2,000-per-capita society to take a hit.”

Here comes Prime Minister Narendra Modi’s India, pursuing its own interests with a new assertiveness, throwing off any sense of inferiority and rejecting unalloyed alignment with the West. But which India will strut the 21st-century global stage, and how will its influence be felt?
The country is at a crossroads, poised between the vibrant plurality of its democracy since independence in 1947 and a turn toward illiberalism under Mr. Modi. His “Hindu Renaissance” has threatened some of the core pillars of India’s democracy: equal treatment of all citizens, the right to dissent, the independence of courts and the media.

stayCalm

All countries look after their self interest whether direct or indirect. To assume otherwise is naive.

For example, the US does not shower Israel with $4B annual for love only.

UK exiting EU but still wanting favorable trade terms with Europe.

Etc..

WABAC

Well. As an investor, I would like to see a stable rule of law--mostly free of corruption--that does not sort winners and losers by caste, nationality, religion, etc.; before I invest in a specific India fund.

I think things are a little more complicated than where India buys its oil. European wars have a long history of involving other parts of the world far from Europe. And I doubt countries like India have forgotten that.

More broadly, I'm pretty sure India has no interest in a revanchist Russia joining a modern Great Game with a revanchist China on its frontiers.

I won't be selling out my investments in the US any time soon.

carew388

+1

LewisBraham

The article is by no means a recommendation to buy Indian stocks, but an exploration of a potential new world economic order and its implications. 1.4 billion people and India’s increasingly scary nationalism can’t be simply ignored. This is especially so as the U.S.’s relationship with China has frayed recently. U.S. businesses such as Apple are already beginning to substitute Chinese manufacturing facilities with Indian ones.

Old_Joe

"U.S. businesses such as Apple are already beginning to substitute Chinese manufacturing facilities with Indian ones."

If that works as well as the Indian "help desks", then may the gods help us all.

LewisBraham

Another excerpt:

The Ukraine war, compounding the effects of the Covid-19 pandemic, has fueled the country’s ascent. Together they have pushed corporations to make global supply chains less risky by diversifying toward an open India and away from China’s surveillance state. They have accentuated global economic turbulence from which India is relatively insulated by its huge domestic market.
Those factors have contributed to buoyant projections that India, now No. 5, will be the world’s third-largest economy by 2030, behind only the United States and China.
On a recent visit to India, Treasury Secretary Janet Yellen said that the United States wanted to “diversify away from countries that present geopolitical and security risks to our supply chain,” singling out India as among “trusted trading partners.”….
…. If the Biden administration has been unhappy with India’s business-as-usual approach to Mr. Putin since Russia’s invasion of Ukraine, it has also been accepting of it — American realpolitik, as China rises, demands that Mr. Modi not be alienated.
At the end of my stay, I traveled down to Chennai on the southeastern coast.
The atmosphere is softer there. The economy is booming. The electronics manufacturer Foxconn is rapidly expanding production capacity for Apple devices, building a hostel for 60,000 workers on a 20-acre site near the city.

WABAC

Chenai is home to Kollywood. Not exactly a hotbed of the sort of Hindu nationalism Modi's BJP is all about.

For those that don't subscribe to the NYT the story can be found here>

Sven

Thanks for the link.

India is at the crossroad of embracing the west or Putin. It needs cheap oil from Putin but it want to compete with China on multiple fronts in manufacturing, especially high valued products. One cannot ignore their large population and growing economy. It is their leadership that complicated things. As such I would not want to invest in single India fund/ETFs.

Old_Joe

Yes, Modi is doing India no favors.

kings53man

India is at the crossroad of embracing the west or Putin to the contrary - it is playing both cards - One side it is supplier of goods to sanctioned Russia & importer of crude and arms and on the other side - it is playing with the West from where it gets premium $$$ - supplier of 'brain' power, medicines etc. and sees US coming closer to them to negate the influence of China. They are in driver's seat.

Modi is a strong leader and enjoys majority support of Indian people (my neighbors are from India - all Doctors and Engineers).

We are weak here due to massive partisanship (divided house can't be strong).

Just take the case of Saudi Arabia - we have big presence militarily keeping them safe from Iran but they are busy cultivating relations with China and Russia - our arch nemesis.

Sven

Playing both sides is accurate.

LewisBraham

@kings53man The problem with the "strong leader" is the strongman leader is the hallmark of fascism. In fact, one could say the "only I can fix it" strongman leader is the defining characteristic of fascism. Usually, the leader's popularity and strength comes from oppressing or demonizing a minority within a nation and/or outside the nation. I prefer squabbling democracies where no one person has too much power. One thing the past few years have taught us is how fragile such democracies are. In fact, I think the world would be better off if nations didn't have a single leader at all such as a president or prime minister. Throw in a requirement that every politician has to put their own children and/or themselves on the front lines of any military conflict and the world would be a much more peaceful place.

stayCalm

Modi and his party do have an authoritarian bent but India has a rule of law and free and fair elections. At no point has India come anywhere close to a Jan 6 type event and the country does not suffer a situation where close to 50% of the population believe that a national election was rigged.

Elections in India are run much more efficiently because unlike the US, the Election Commission in India is an independent national body that sets and enforces rules. Significantly more efficient than the 3,000+ County level bodies here that manage a national election and where just a few bad apples at the state or county level can (cheat) swing the results for a Presidential election or affect the balance of power in Congress.

India is more corrupt than the US but the US does not have clean hands. Here the corruption is more refined, is relabeled as lobbying, wears suits and ties and calls itself House Reps and US Senators. Presidential loyalties are bought and sold on K Street. The US is a corporotacracy that has no equal.

India is playing both sides to its advantage much like any other country is expected to. No different than US cozying up to dictators in Pakistan and Saudi Arabia while still singing the praises of democracy. Or European countries enjoying the benefits of a US security umbrella but under contributing to UN and NATO budgets. Or Canada being a staunch supporter of human rights but panicking when a few hundred illegals breach the border.

Etc..

LewisBraham

There are 200 million Muslims living in India, a nation of 1.4 billion people. Hinduism under Modi’s nationalist regime is increasingly being seen as the state religion. The unsettling reality is you can still have an authoritarian nationalist ruler who oppresses a minority but who is also democratically elected by the majority and that leader can be very popular with the majority. You end up with situations like this:
https://hrw.org/news/2022/10/07/india-surge-summary-punishments-muslims

https://amp.cnn.com/cnn/2022/05/19/opinions/indian-muslims-violence-hindu-nationalism-singh-abbas/index.html

Derf

LewisBraham
January 2 Flag
Another excerpt:

"The atmosphere is softer there. The economy is booming. The electronics manufacturer Foxconn is rapidly expanding production capacity for Apple devices, building a hostel for 60,000 workers on a 20-acre site near the city."

A few years back Foxcon made a deal for screen production in the state of WI. somewhere around Milwaukee. I can't give you the numbers on how this worked out, only Foxcon didn't live up to it's end of the bargain.

I guess I know now where all those jobs went.

A quick search provided this : https://en.wikipedia.org/wiki/Foxconn_in_Wisconsin