AEX Gold aims to invest in Greenland through a new gold mining project, focusing on asset growth and value creation.

CEO Eldur Olafsson states they have a five-year plan to start production at Nalunaq and use profits to fund wider exploration.

Many deposits have been found in the region, though developing them remains a challenge.

LKAB, Sweden’s state-owned mining company, found over 1 million tonnes of rare earth metals in northern Lapland.

LKAB views this discovery as a potential “significant building block” for Europe’s supply chain problems, but extraction may take at least a decade.

Rare earth minerals, a group of 17 elements including scandium, yttrium, and lanthanides, pose environmental concerns due to potential radioactive materials in their ores such as thorium and uranium.

The new Swedish find is considered significant for Western consumers, especially as the global supply is dominated by China, which has utilized its rare earth resources as a geopolitical instrument.

While rare earths are not actually rare, mining and refining them is complex and can generate hazardous waste.

Although the U.S. once led rare earth production, it now trails behind, with Brazil and Vietnam also holding significant but largely untapped reserves.

Australia is investing in a rare earths mine and processing plant, aiming to reduce dependence on China.

Rare earths have critical uses in technology like iPhone displays, electric vehicles, and wind turbines, key to the clean energy transition.

Europe welcomed LKAB’s discovery amid energy insecurity and its goal to become climate neutral by 2050.

E.U.

officials have highlighted China’s near-monopoly and rising rare earth prices as a geopolitical challenge.

Sweden's Deputy Prime Minister said European independence from Russian and Chinese supply will begin with local mining.

Greenland’s ice sheet meltwater contains sand with valuable mineral content, seen as increasingly valuable in the future.

AEX Gold aims to invest in Greenland through a new gold mining project, focusing on asset growth and value creation.

Title:

Content: AEX Gold aims to invest in Greenland through its new gold mining project

Traditionally known for its fishing and hunting industries, Greenland is fast becoming the next significant area of exploration for mining businesses. The largest island in the world, Greenland remains one of the least populated areas worldwide with 56,000 citizens, and it has sought to attract local and foreign investment across a number of new projects.

The island’s current position remains complex. A sovereign government, it is positioned under the Danish kingdom who provide grants to support its local economy. To further its independence and bolster its economy to create increased tax revenue, Greenland has embraced the exploration of new mining projects as well as utilising all the renewable and local resources it has to offer.

Rich in rare-earth minerals, gold, iron-ore, uranium, in addition to hydro and wind power, Greenland’s favourable legal framework and robust infrastructure, particularly in South Greenland, have factored into AEX Gold’s vision to explore through its Greenlandic subsidiary, Nalunaq Gold Mine, situated in the Nanortalik Gold belt, Southern Greenland.

Acquiring an existing Exploitation Licence in 2015, the company is at the advanced exploration stage of its Nalunaq property, including the previously operating Nalunaq Gold Mine.   It also holds Exploration Licences at the early exploration stage Vagar and Tartoq properties.

Hosting a high-grade NI 43-101 compliant gold resource estimate of 263k oz (inferred) at 18.7 g/t and a number of regional exploration targets, AEX Gold has undertaken three years of exploration at Nalunaq, developing an updated geological model and an extension of the main vein strike length up to 1km.

“The government is very supportive, so it's about having a sound exploration strategy. We are very much focused on that, as we have an asset package that we think we can grow and create a lot of value,” explains Chief Executive Officer, Eldur Olafsson.

Originating from Iceland, Olafsson has gained extensive experience of the local geography. Focusing on mining projects in Greenland since 2012, he has analysed the country’s potential against the backdrop of environmental responsibilities and associated legalities with partner SRK Exploration Services. Through this process, the business has turned its attentions solely towards gold exploration.

“The known gold deposits in Greenland are in an area where the climate is mild and, given our experience, logistics are relatively easy. Gold opportunities are easier to finance than larger base metals projects and our perception was that we could fully fund projects like these through our support here in Iceland and in the UK market,” he explains.

“We started looking for opportunities in the South Greenland Gold Province and became aware of this historically producing mine. We were attracted by the extremely high-grade potential of the resource and the fact that the project had significant infrastructure in place.  We believed there were significant opportunities to materially improve the mining operation that had been run by previous operators.”

Extensive exploration

Throughout the exploration of high-grade resources, Olafsson is proud to remain hands on and is regularly seen on site. By undertaking various technical studies, AEX has gained the ability to comprehensively analyse similar types of assets with potential.  After acquiring the Nalunaq project in 2015 the company has continued to expand its portfolio. Whilst Nalunaq encompasses the required licence to explore and recommence production at the old gold mine, they own the larger Vagar exploration licence, situated a few kilometres to the west of the mine, where AEX believes the ground is prospective for the discovery of further Nalunaq-type deposits.  In addition, they also own the early stage Tartoq Project to the North West of Nalunaq. Each licence area is at a different stage of exploration which supports AEX’s aim of having a continuous pipeline of projects being brought into production.

“We have a total of 690sqkm of licences in south Greenland and we're the only active listed gold company in Greenland. Previous operators undertook very little forward-looking exploration once the mine was in production.  It's a very under-explored region so we intend to recommence production within the next two years at Nalunaq in order to support our exploration in the larger licences in the next 5-10 years,” he says.

“Iceland is a short distance from Greenland, so logistically it’s good for us. Additionally, in Iceland you need to be really self-sufficient, and the same can be said for those in Greenland. We don't have as many people or the multitude of services that you would have in other countries which encourages you to think creatively,” he adds.

Consequently, the company has sought to maximise efficiency whilst keeping costs down, yet all the time adding increased value across its operations.

By acquiring a high-grade deposit, less material is needed to be broken down, lowering AEX Gold’s carbon footprint. Everything taken out of the mine from underground will be processed and shipped out to a different processing facility, or processed on site adhering to the current environmental guidelines. Historically, electricity has been generated through the use of traditional fossil fuels, something which is steadily changing throughout Greenland.

“We're using oil to put in generators or to power mobile mining equipment which is high cost both in monetary and environmental terms.   Greenland currently has five hydroelectric power plants and they are looking at building more in south Greenland,” says Olafsson.

Seeing huge opportunities, he explains that the use of hydropower and wind power would complement AEX Gold’s operations, not only in its existing exploration activities, but with the implementation of an electric mining fleet with electricity being obtained from local renewable resources.

Providing local opportunities

In the future, it will be essential for Greenland to gain further revenue to unlock opportunities and services for its citizens. This is something Olafsson believes that AEX Gold can help with due to its knowledge of Iceland as it has many similarities to Greenland and has been through a period of comparable change.

“Greenland is in a similar position to Iceland not so long ago. Iceland didn't have a high education rate and wasn’t wealthy compared to other European countries, with economic and cultural activities that were very insular. We are now at the highest level of all parameters in terms of education, wealth per family, etc. and this has stemmed from improving the breadth of schooling and creating opportunities for people to grow and develop outside of the traditional areas of agriculture and fisheries.

“Our aim is that the majority of employees will be Greenlandic, but it will take time. Greenland has a large number of people competing for jobs in the fisheries and tourist centres. It is important that Greenlanders are able to access programmes that will allow them to consider other career options. In Iceland we are importing a lot of people to work in different industries in our country because we don't have enough people. This might be the case for Greenlanders as well if the anticipated growth of the Mining Sector materialises but we want to ensure that, where possible, we use local people first before looking elsewhere.

“The Greenlandic Government provides good support for those who seek education.  There are an increasing number of Greenlandic students attending Danish Universities so that now, for example, we are seeing well qualified Greenlandic geologists available for employment.  There has been a Mining School at Sisimiut for the last 10 years which provides local qualified labour who can take advantage of opportunities in the Mining sector.  You need skilled labour and as we own a mine that was in production for 10 years previously, there is a fair bit of local knowledge that we have been able to use during our exploration work and which we are keen to utilise going forward,” he says.

“We are creating revenue for local communities, creating highly skilled jobs, and are providing benefits where local communities can live better lives and grow as individuals. We need to create opportunities for young people.”

Additionally, by working with local businesses as well as those who have been operating in Greenland for some time, AEX has made a conscious effort to hire companies which can support its growth. AEX have therefore acquired a longstanding relationship with Cartwright Drilling, due to the company’s extensive experience in Greenland and subsequent knowledge of the island’s government systems, processes and practices.

Planning to mine high-grade resources using significant infrastructure already in place, AEX Gold holds extensive licences managed by an experienced team. Previous operations produced between 50,000 to 100,000 ounces a year at 15.4 grams/ton produced and this has provided a benchmark for the company, who will utilise this cash flow to explore the wider region in the long-term.

“We have a five-year plan where we want to get into production at Nalunaq and use the cash generated to fund exploration in the wider district.   We envisage investing a significant amount in exploration assets to provide a portfolio of different deposits that we can bring into production. We are creating a company that has a long-term mission in Greenland to build up local know how to support our aim of ramping up to very profitable production across a number of projects,” notes Olafsson.

“It will create a dramatic effect on the local community and hopefully be a springboard for unlocking much larger potential in Greenland. There are plenty of deposits that have been found, but you have to be able to develop them. You can only do that that with support and cooperation from the local people who believe in your vision.”

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Eldur Olafsson

CEO Eldur Olafsson states they have a five-year plan to start production at Nalunaq and use profits to fund wider exploration.

Many deposits have been found in the region, though developing them remains a challenge.

LKAB, Sweden’s state-owned mining company, found over 1 million tonnes of rare earth metals in northern Lapland.

Title:

Content: Sweden's new rare-earth metal find likely big deal for Western consumers

Sweden has discovered what is billed as Europe's biggest deposit of rare earth minerals - a crucial component of electronics and clean energy technology - giving a significant boost to the continent's hunt for trade security.

LKAB, the Swedish state-owned mining company, announced Thursday that it found deposits of more than 1 million tonnes of rare earth metals in the country's far northern Lapland province.

Products ranging from smartphones to electric vehicles and even military jets require these rare earth elements, which are not currently mined in Europe, the company said. Much of the world's supply comes from China, which has used them as a geopolitical tool.

LKAB president Jan Mostrom said in a statement that the find could be a "significant building block" for Europe, which faces a "supply problem." But the company also said that it would take at least a decade before the rare earth minerals discovered hit the market.

READ MORE:
* GM reaches supply deals for electric vehicle motor magnets
* Why rare earths are a Five Eyes hot topic
* The race against China's 'rare earths weapon'
* Rare earth could be common in NZ

Here's what to know about this major discovery and what it means for Western consumers.

What are rare earth minerals and where are they found?

Rare earths are not actually that rare. They are a group of 17 chemical elements, composed of scandium, yttrium and lanthanides, according to the US Geological Survey.

But mining rare earth minerals is complex, as supply is not concentrated in one location. Mining them also affects the environment, since their ores can be laced with radioactive materials such as thorium and uranium. Refining the minerals can generate toxic and radioactive waste, which poses environmental and health risks if not properly disposed of.

China hosts the majority of the world's reserve of rare earth minerals and is the world's leading supplier. (The United States was the largest producer several decades ago.) While Brazil and Vietnam have significant reserves, they lag far behind in mining them.

Access to the minerals became an issue in the trade war with China during the administration of US President Donald Trump. Beijing threatened to cut off exports to the United States in 2019 to retaliate against Trump's measures, pushing prices up and prompting Trump to sign an executive order increasing domestic production. The Biden administration has also pushed for investments in that supply chain.

Other countries have also moved to reduce their reliance on China. Australia is spending millions to develop a rare earths mine and processing plant in its Northern Territory.

What are rare earth minerals used for?

Multiple household goods, including televisions, computers, smartphones and lighting use rare earth minerals. Yttrium and europium, for instance, light up iPhone displays and allow them to vibrate.

They are also key elements of US-made defence systems, including night-vision technology, jets and armoured-vehicle alloys.

Rare earth minerals are critical for the global clean energy transition, as they are components of the magnets used in electric vehicles and wind turbines - although recently some companies have developed motors for electric vehicles that do not require rare earths.

What does Sweden's discovery mean for the climate?

LKAB's find was welcomed in Europe, which has faced energy challenges amid the Russian invasion of Ukraine. The European Union also has a goal of becoming climate neutral by 2050.

In September, a senior EU official said Europe's climate ambitions were at risk without reliable supply chains. "Take China, with its quasi-monopoly on rare earths and permanent magnets and prices rising by 50-90% in the past year alone," wrote Thierry Breton, an EU commissioner. "Supply of raw materials has become a real geopolitical tool."

The European Raw Materials Alliance notes that while the European Union has a massive electric-motor manufacturing sector, "it is almost fully import dependent" when it comes to rare earth permanent magnets.

Swedish Deputy Prime Minister Ebba Busch said Thursday that Europe's independence from Russia and China would begin with this mine.

Political leadership in the continent, she said, "must give the industry the conditions to switch to green and fossil-free production."

The Washington Post

LKAB views this discovery as a potential “significant building block” for Europe’s supply chain problems, but extraction may take at least a decade.

Rare earth minerals, a group of 17 elements including scandium, yttrium, and lanthanides, pose environmental concerns due to potential radioactive materials in their ores such as thorium and uranium.

The new Swedish find is considered significant for Western consumers, especially as the global supply is dominated by China, which has utilized its rare earth resources as a geopolitical instrument.

Title:

Content: Democracy Dies in Darkness

Sweden’s new rare-earth metal find likely big deal for Western consumers

Sweden has discovered what is billed as Europe’s biggest deposit of rare earth minerals — a crucial component for electronics and clean energy needs — giving a significant boost to the continent’s hunt for trade security.

LKAB, the Swedish state-owned mining company, announced Thursday that it found deposits of more than 1 million tons of rare earth metals in the country’s far northern Lapland province.

Products ranging from smartphones to electric vehicles and even military jets require these rare earth elements which are not currently mined in Europe, the company said. Much of the world’s supply comes from China, which has used them as a geopolitical tool.

LKAB President Jan Mostrom said in a statement that the find could be a “significant building block” for Europe, which faces a “supply problem.” But the company also said that it would take at least a decade before rare earth minerals from the find hit market.

Here’s what to know about this major discovery and what it means for Western consumers.

What are rare earth minerals and where are they found?

Rare earths are not actually that rare. They are a group of 17 chemical elements, composed of scandium, yttrium and lanthanides, according to the U.S. Geological Survey.

But mining rare earth minerals is complex, as supply is not concentrated in one location. Mining them also impacts the environment, since their ores can be laced with radioactive materials such as thorium and uranium. Refining the minerals can also generate toxic and radioactive waste, which poses environmental and health risks if not properly disposed of.

China hosts a majority of the world’s reserve of rare earth minerals and is the world’s leading supplier of the product. (The United States was the largest producer several decades ago.) While Brazil and Vietnam have significant reserves, they lag far behind in mining it.

China hints it will choke off U.S. ‘rare earths’ access. But it’s not that easy.

Access to the minerals became an issue during the Trump administration’s trade war with China. Beijing threatened to cut off exports to the United States in 2019 to retaliate against Trump’s measures, pushing prices up, prompting Trump to sign an executive order increasing domestic production. The Biden administration has also pushed for investments in that supply chain.

Other countries have also moved to reduce their reliance on China. Australia is spending millions to develop a rare earths mine and processing plant in its Northern Territory.

What are rare earth minerals used for?

Multiple household goods, including televisions, computers, smartphones, and lighting use rare earth minerals. Yttrium and europium, for instance, light up iPhone displays and allow them to vibrate.

They are also key elements of U.S.-made defense systems, including night vision technology, jets and armored vehicle alloys.

Rare earth minerals are critical for the global clean energy transition, as they are components of the magnets used in electric vehicles and wind turbines. Though recently, some companies have developed motors for electric vehicles that do not require rare earths.

What does Sweden’s discovery mean for the climate?

LKAB’s find was welcomed in Europe, which has faced energy challenges amid the Russian invasion of Ukraine. The European Union also has a goal of becoming climate neutral by 2050.

In September, a senior E.U. official said that Europe’s climate ambitions were at risk without reliable supply chains. “Take China, with its quasi-monopoly on rare earths and permanent magnets and prices rising by 50-90% in the past year alone,” wrote Thierry Breton, an E.U. commissioner. “Supply of raw materials has become a real geopolitical tool.”

The European Raw Material Alliance notes that while the European Union has a massive electric-motor manufacturing sector, “it is almost fully import dependent” when it came to rare earth permanent magnets.

Swedish Deputy Prime Minister Ebba Busch said Thursday that Europe’s independence from Russia and China will begin with this mine.

Political leadership in the continent, she said, “must give the industry the conditions to switch to green and fossil-free production.”

While rare earths are not actually rare, mining and refining them is complex and can generate hazardous waste.

Although the U.S. once led rare earth production, it now trails behind, with Brazil and Vietnam also holding significant but largely untapped reserves.

Australia is investing in a rare earths mine and processing plant, aiming to reduce dependence on China.

Rare earths have critical uses in technology like iPhone displays, electric vehicles, and wind turbines, key to the clean energy transition.

Europe welcomed LKAB’s discovery amid energy insecurity and its goal to become climate neutral by 2050.

E.U.

officials have highlighted China’s near-monopoly and rising rare earth prices as a geopolitical challenge.

Sweden's Deputy Prime Minister said European independence from Russian and Chinese supply will begin with local mining.

Greenland’s ice sheet meltwater contains sand with valuable mineral content, seen as increasingly valuable in the future.

Title:

Content: Greenland’s Melting Glaciers Spew a Complicated Treasure: Sand

Meltwater from the island’s ice sheet is loaded with the right kind of sand for concrete production—which further warms the planet.

Sand is both abundant and rare. Earth has vast deserts of the stuff, of course, but not the kind that’s in such high demand that sand mafias are killing for it. That special variety is a critical component of the concrete used in buildings and infrastructure, the production of which has skyrocketed exponentially over the last few decades. That has come at a significant climate cost: The industry now accounts for 8 percent of global carbon emissions.

Sand is also at the center of a strange climate story. Climate change is destroying Greenland’s ice sheet, producing an extraordinary amount of meltwater. (Even if we somehow totally stopped emissions today, Greenland’s melting could still contribute nearly a foot of sea-level rise.) And in a twist of fate, that meltwater is loaded with the right kind of sand for concrete production, which causes more warming and more melting. Great plumes of glacial sediment are swirling along the coast, actually adding land along the edges of the island. Even though Greenland is only three times the size of Texas, its ice sheet is the source of 8 percent of suspended river sediments flowing into the oceans.

The country now has to figure out whether exploiting that valuable, abundant resource on a wider scale would be environmentally, socially, and economically tenable. “It is quite controversial—we're saying Greenland can benefit from climate change,” says Mette Bendixen, a geographer at McGill University in Canada, who’s studying the idea. “Contrary to most of the other parts of the Arctic coast, Greenland is not eroding. It's in fact growing bigger, because the ice sheet is melting. So you can think of the ice sheet as a tap that pours out not only water, but also all the sediment.”

That sediment is special, indeed. Desert sand from, say, the Sahara is no good for making concrete because it’s too rounded and uniform. Over millennia, winds push those grains around, polishing them. If you make concrete out of such sand, “it's almost like building with marbles,” says Bendixen. “You want particles that are more angular in shape, not rounded. And that type of material is exactly what you get from rivers, for example, or material that has been deposited by glaciers.”

As Greenland’s ice sheet—which covers 700,000 square miles and is up to 10,000 feet thick—rubs against the land, it grinds up sediment, including sand, fine silt, and larger chunks of gravel. And as the ice melts, torrents of water carry all that debris to the sea, while the pounding of the rivers themselves further erodes the landscape. Compared to the thousands of years that sand spends rolling around the Sahara and becoming rounded, the particles coming off Greenland are fresher. They’re more angular and more diversely shaped. Instead of acting like marbles, they fit together like pieces of a jigsaw puzzle, which is good for concrete.

Greenland already harvests its sand for local, small-scale concrete production, since importing sand would be prohibitively expensive. This is limited to domestic companies, who have to win non-exclusive permits after passing environmental review by the government’s scientific advisers. They can also apply to export the sand, but that requires additional licensing. “We are basically also open for sand extraction aiming at export, but then it will be treated like any other mining activity,” says Kim Zinck-Jørgensen, of the Greenland government’s Mineral Licence and Safety Authority. “And for that you'll have a much greater setup with regulations and also environmental impact assessments, social impact assessments.”

Currently, dredging boats suck up sediment along the coast and filter out the sand, which is then brought back onshore. But if Greenland decides to scale up sand extraction for export, that would mean big ships would have to haul the stuff away to international ports. “It's important to stress that if you extract whatever natural resource, there will be environmental consequences,” says Bendixen. “But really, here the environmental consequences can be super broad.”

For one, those big ships will also be bringing in ballast, or the water they’ve collected from elsewhere and stored in their hulls for balance. If that ballast is released off the coast of Greenland, it may introduce invasive species. And, of course, dredging coastal sediments would further endanger underwater native creatures—and on land, increased mining operations might scare away the game that Inuit hunters rely on. (Greenland’s population is about 90 percent indigenous Inuit. The Greenland branch of the Inuit Circumpolar Council, an NGO representing Inuit peoples, declined to comment for this story.)

Interestingly, though, last month Bendixen and her colleagues published a survey of Greenlanders about their opinions on sand extraction. They found that 84 percent of adult residents are in favor of it, and three-quarters want it to be a national project. “It turns out that the vast majority of Greenlanders think that it should be primarily a Greenlandic enterprise,” says Rasmus Leander Nielsen, a political scientist at the University of Greenland, who did the survey with Bendixen. “Maybe you could have some smaller-scale, Greenlandic-led companies that could start off. And then eventually, when the business case is more favorable, then we could go into a larger export.”

About that business case: While the global demand for sand has gone wild, the economics of exported Greenland sand aren’t yet clear. A company would have to pay to run the local operations and foot the shipping costs to get the resource off the island. Those will be considerable, since sand is heavy and takes up a lot of room in a ship.

The Greenland government recently worked with a consultancy that did an assessment, finding that exporting the sand to Europe isn’t economically feasible at the moment. “Whether it's feasible to export it further on to the Middle East, I don't know,” says Thomas Lauridsen, chief adviser to Greenland’s Ministry of Mineral Resources and Justice. “But we will then be in competition with European companies that will dredge sand in Europe or closer to the customer.”

Lauridsen adds that it’s up to the private sector to determine whether selling Greenland’s sand is cost-effective or not. And that export cost calculus may change in the future. “By 2100, the demand for sand is going to rise 300 percent, and the price 400 percent,” says Bendixen. “So we don't have to look that much farther into the future to start seeing a different calculation here in terms of whether it's worthwhile.”

Yes, a world with more sand harvesting for making more concrete would also mean more carbon emissions, more warming, and more melting of Greenland’s ice sheet. But, Bendixen says, all that glacial sand need not go exclusively toward concrete. Coastal communities are increasingly clamoring for sand to hold back rising seas, a fortification known as beach nourishment. “Just think of the irony in using the sand for beach nourishment to mitigate sea-level rise,” says Bendixen, “which is caused by—to a large extent—the melting of the Greenland ice sheet!”


India and Russia signed a program of cooperation to boost trade and joint investment projects in Russia's Far East during Modi-Putin talks on Tuesday.

Russia and India are working together to implement the idea of a 'Greater Eurasian Space.'

Meanwhile, India’s strategic partnership with the U.S. has remained steady overall, though its refusal to condemn Russia’s invasion of Ukraine and increased energy trade with Moscow after Western sanctions have strained ties with Washington.

The India-U.S. partnership has experienced other stress points in recent years.

India’s close relationship with both the Quad and BRICS has strategic significance.

India and Russia rely on each other beyond diplomacy, with mutual trust at the core of their engagement.

Prime Minister Modi and President Putin did not meet at major summits such as BRICS in Johannesburg or the G20 in New Delhi, as Putin was absent from both events.

Putin has described Modi’s policy as the main guarantor for developing bilateral ties, and Russia respects India's strategic autonomy.

Modi’s high-profile Russia visit, even at the risk of U.S. displeasure, shows India's commitment to pursuing its own foreign policy agenda.

Historical India–Russia relations, dating to the Cold War, have expanded further since Russia’s war in Ukraine, especially in energy trade, with India as a major buyer of Russian oil.

Modi is seeking to reinforce ties with Russia partly to counter Chinese advances in the region.

Ajit Doval’s high-stakes visits to Russia and the U.S. underscore India’s balancing act between rival superpowers.

India has emphasized enhancing cooperation with Russia in trade, energy, and defense.

India’s stance of non-alignment and deft diplomacy following Russia’s invasion of Ukraine has placed it in a strategic “geopolitical sweet spot.”
India is seen by the Global South as a voice highlighting the war’s impact on developing nations, though its growing potential is often discussed more than its current stature.

India and Russia signed a program of cooperation to boost trade and joint investment projects in Russia's Far East during Modi-Putin talks on Tuesday.

Title:

Content:
India and Russia signed a program of cooperation to boost trade and joint investment projects in Russia's Far East Region during Modi-Putin talks on Tuesday. At the same time, they agreed to strengthen connectivity and security linkages in the Eurasian space and Indian and Pacific Oceans.

The 22nd Russia-India Annual Summit will lead to a greater collaboration between the two countries in Russian Far East and the Eurasian space, including the Indian Ocean Region (IOR), according to experts.

The 81-paragraphbilateral Joint Statement underscored the "shared vision" to enhance transport and connectivity cooperation, as well as a "solid commitment" to enhance economic linkages in Russia's resource-rich Far East, Pravesh Kumar Gupta, an Associate Fellow at New Delhi-based think tank Vivekananda International Foundation (VIF), told Sputnik India.

The 22nd Annual Summit, a "unique and pivotal event in the current global geopolitical context" according to Gupta, exposed the disappointment of Western countries.

"Amidst global turbulence, the summit served as a crucial platform for leaders to engage in constructive discussions and strategic dialogues, with the aim of bolstering cooperation in vital areas such as trade, energy, connectivity, defence, and technology. This event has been widely acknowledged as a significant milestone in the ongoing development of the close ties between India and Russia, a success that stood in stark contrast to the disappointment felt by the Western world," the Indian think-tanker asserted.

Lauding the Summit outcomes, Gupta remarked that the leaders would intensify effort to develop "promising production and marketing chains in Eurasia" and stick to the new plan for the Far East in providing enhanced cooperation in different sectors, including transport and connectivity.

Specifically both leaders shared a vision pointing to three projects – International North South Transport Corridor (INSTC), Chennai-Vladivostok Corridor as well as the Northern Sea Route (NSR), or the Polar Route.

"Most importantly, these connectivity projects are free from any political agenda, unlike the Chinese Belt and Road Initiative (BRI), as clearly mentioned in the joint statement. Their implementation will be based on the principles of transparency, broad participation, local priorities, financial sustainability, and respect for the sovereignty and territorial integrity of all nations," the VIF pundit underlined.

Gupta expressed confidence that the proposal to establish a joint working group on developing the NSR would speed up the project, which promised "significant cost savings and reduced shipping times" for goods traveling between Europe and Asia.

"The route's increased accessibility due to melting Arctic ice has sparked increased interest in its potential for commercial shipping and trade, offering a bright future for global trade," Gupta stated.

In the context of the INSTC, the expert underscored that it could turn out to be the most "cost-effective and favourable" connectivity project to increase Indian exports to Eurasia and vice-versa. He explained that the 7,200-kilometre-long multimodal corridor was in line with Moscow's geo-economic focus on Asia-Pacific following the Ukraine conflict.

Russia, India To Implement The Idea of A 'Greater Eurasian Space'

In terms of bolstering cooperation in Asia-Pacific, or near India's own neighbourhood, Modi and Putin shared approaches on building a "new architecture" of a 'Greater Eurasian space'.

Although, initially Russia was focused primarily on the Red Sea and the Horn of Africa, the Ukrainian conflict completely changed the situation, Alexey Kupriyanov, an expert in the Indian Ocean Region (IOR) at Moscow-based think tank IMEMO RAS told Sputnik India.

At the same time, the think-tanker highlighted that a growing trade turnover between Russia and India was pushing Moscow to return to the Indian Ocean Region, primarily to ensure the protecting of Russian vessels in areas not covered by Indian Navy's operations, which include the Red Sea and the Mediterranean region.

"In the long term, this means that Russian ships will soon operate more intensively in the Indian Ocean and expand their presence," Kupriyanov stressed.

It would bolster India's security efforts and help it manage the power competition between China and the US, even as Indian Navy has intensified inter-operability with western maritime forces in recent years, the expert asserted.

"Since India's focus is primarily on the eastern part of the region, Russian ships in the western part could help fill the vacuum of security there. This will reduce the need for East African countries to seek help from China and the US to combat pirates, smugglers and drug traffickers," Kupriyanov concluded.

(With Inputs From Agencies)

In what fields are India and Russia cooperating?

In what regions do India and Russia have common strategic interests?

What formal frameworks do India and Russia cooperate within?

Russia and India are working together to implement the idea of a 'Greater Eurasian Space.'

Meanwhile, India’s strategic partnership with the U.S. has remained steady overall, though its refusal to condemn Russia’s invasion of Ukraine and increased energy trade with Moscow after Western sanctions have strained ties with Washington.

Title:

Content: ADVERTISEMENT

Is all well in Indo-U.S. partnership?

Updated - July 30, 2024 09:38 am IST

Published - July 29, 2024 02:01 pm IST

The overall trajectory of India’s strategic partnership with the U.S. seems steady. Many U.S. policymakers see the partnership with India as one of the most consequential bilateral relationships of the U.S. in the 21st century.

(This article is part of the View From India newsletter curated by The Hindu’s foreign affairs experts. To get the newsletter in your inbox every Monday, subscribe here.)

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Earlier in July, immediately after Prime Minister Modi wrapped up a bilateral summit with Russian President Vladimir Putin in Moscow, since first visit to Russia since the Ukraine war began in february 2022, the U.S.’s Ambassador in India made a rare public criticism of India’s Russia policy. “There is no such thing as strategic autonomy in times of conflict; we will, in crisis moments, need to know each other,” Ambassador Eric Garcetti said. In Washington DC, the State Department also expressed “concerns” over India’s ties with Russia, while National Security Adviser Jake Sullivan warned India of Russia’s deepening partnership with China. Public comments did not end there. On July 23, almost two weeks after Mr. Modi’s Russia visit, Donald Lu, Assistant Secretary of State for South and Central Asia, told lawmakers at a Congressional hearing in Washington that the U.S. was “disappointed” about the symbolism and timing of Mr. Modi’s visit.

The overall trajectory of India’s strategic partnership with the U.S. seems steady. Many U.S. policymakers see the partnership with India as one of the most consequential bilateral relationships of the U.S. in the 21st century. They also see an economically growing, democratic India as an effective bulwark against the Communist Party-ruled China. In India, economic, defence and strategic partnership with the U.S. is seen as critical for the country’s continued rise as a major Asian power. But the disagreements lie in the details. India’s refusal to condemn Russia’s invasion of Ukraine and its decision to ramp up energy trade with Moscow after it was sanctioned by the West did not go down well with Washington. Russia, cut off from the Western markets, found an economic lifeline in its booming trade with China and India, the world’s second and fifth largest economies, respectively.

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In recent years, the India-U.S. partnership saw stress points in other areas as well. Indian nationals were accused of killing Hardeep Singh Nijjar, a Khalistan separatist, in Canada last year. The U.S. government has also sought accountability from the Indian government over a plot to kill Sikh separatist leader Gurpatwant Singh Pannun in New York. An Indian national is now in jail in the U.S. in connection with the case. India has denied any role in these incidents, but allegations have added to tensions in bilateral relations. And Prime Minister Modi’s visit to Russia, on the eve of a NATO summit in Washington whose main agenda was to strengthen Ukraine against the Russian invasion, seemed to have “disturbed” the Biden administration, as a Washington Post report claimed.

In its response, India’s Ministry of External Affairs said it values its strategic autonomy. “India, like many other countries, values its strategic autonomy. The U.S. Ambassador is entitled to his opinion. Obviously, we have different views,” MEA spokesperson Randhir Jaiswal said. “Our comprehensive global strategic partnership with the U.S. gives us the space to agree to disagree on certain issues, while respecting each other’s view-points,” he added.

What’s strategic autonomy, which India is fiercely protective about? “A simple definition of the concept is that countries should be able to make decisions that best serve their national interests, irrespective of the pulls and pressures from other parties,” I wrote in this July 19 Oped in The Hindu. And why is it significant for India? Watch the latest episode of Realpolitik, our video explainer column: What’s strategic autonomy and why is it important for India? | Realpolitik.

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‘Victory for Maduro’

Nicolas Maduro, Venezuela’s President who claims to be a successor of Chavismo, the socialist ideology championed by the late, charismatic President, Hugo Chavez, “won” a third consecutive term in Sunday’s election, according to Venezuela’s election authorities. Mr. Maduro, a former bus driver-tuned-politician, won 51% of the vote, while his main rival Edmundo Gonzalez garnered 44%. Before the vote, opinion polls had stated that Mr. Maduro, who rose to power after Chavez died of cancer in 2013, was trailing. And he had warned of a civil war and bloodbath if he lost the election. Mr. Gonzalez was not the opposition’s original pick against Mr. Maduro. Maria Corina Machado, arguably the most popular opposition leader who won the opposition primaries, was disqualified by the Supreme Court for supporting another opposition figure Juan Guaido’s rebellion against Mr. Maduro.

On Mr. Maduro’s watch, Venezuela’s economy, also battered by U.S. sanctions, contracted by 80% in 10 years. According to UNHCR, more than 7.7 million Venezuelans fled the country in a decade. In 2013, when Chanez passed away, Venezuela had a household poverty rate of 33.1% and extreme poverty at 11.4%, down from 61.5% and 30%, respectively, in 2003. In 10 years, the figures jumped to 82% and 53%, respectively. In other words, Mr. Maduro oversaw the total collapse of Venezuela’s economy. And he still managed to “win’ another term, extending his rule for six more years. What’s Maduro’s politics and how did he emerge as a strong man? Read this profile of the Venezuelan leader, written by my colleague Srinivasan Ramani: Nicolas Maduro | Chavism’s designated successor.

Sri Lanka to hold elections

Sri Lanka’s presidential elections will be held on September 21, the Election Commission announced on July 26. Some 17 million voters will have their first chance of electing the country’s leader, after a mass people’s uprising ousted former President Gotabaya Rajapaksa two years ago. President Ranil Wickremesinghe was among the first to formally get into the fray. His office announced making a cash deposit at the Commission for his candidacy as an independent, although he has relied on the Rajapaksas’ Sri Lanka Podujana Peramuna (SLPP or People’s Front) since his rise to Presidency through an urgent parliamentary vote, after Mr. Gotabaya’s resignation, reports Meera Srinivasan, from Colombo.

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The Top Five

1. The ‘geo-calculus’ of the Moscow visit

There was one clear message — of the sure bet the Narendra Modi government has placed on India-Russia ties, writes Suhasini Haidar.

2. The importance of both Quad and BRICS

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With India being the only country common to both Quad and BRICS and a founding member of both, it cannot afford to downplay one for the other, writes retired diplomat T.S. Tirumurti.

3. Between a fascist past and Right-wing present, Italy is fighting its many battles

Bursting at its seams with immigrants from the Global South and with a Right-wing government in power, Italy under Meloni finds itself in the eye of the identity politics storm; what complicates the matter further is the country’s perception as being on the wrong side of the not-so-long-ago history, Nishtha Gautam reports from Rome.

4. A new push in the Bay of Bengal

The intent of BIMSTEC member states to push forth with a bold vision for the region was evident at the 2nd Foreign Ministers’ Retreat, write Harsh V Pant and Sohini Bose.

5. Special relationship: On U.S. policy on Israel

The welcome Mr. Netanyahu received at Congress shows that he has the support of the elites. But the protest on the streets and the dissenting voices even among lawmakers suggest that the national consensus on Israel is eroding in the U.S., The Hindu writes in this editorial.

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How did India react to the war between Russia and Ukraine?

India did not directly oppose Russia's actions

India did not join the Western sanctions against Russia

How has Russia/ India trade evolved since the start of the war in Ukraine?

India's purchases of Russian oil increased

How has trade level between India and Russia changed under Modi and Putin?

In what fields are India and Russia cooperating?

The India-U.S. partnership has experienced other stress points in recent years.

India’s close relationship with both the Quad and BRICS has strategic significance.

India and Russia rely on each other beyond diplomacy, with mutual trust at the core of their engagement.

Title:

Content: 31 Dec, 2023 08:46

Deeper than diplomacy: There is a reason why New Delhi and Moscow rely on each other

Russia’s respect for India’s policy of strategic autonomy is the core strength of bilateral ties, as the Indian foreign minister’s latest visit proves

Indian External Affairs Minister Subrahmanyam Jaishankar’s five-day official visit to Russia was timely and significant for more than one reason.

India and Russia had held annual summits at the leadership level since 2000. This sent an important message in terms of the value attached by the two countries to bilateral ties, but it also conveyed a broader geopolitical message to other international partners of the two countries.

But this practice was broken largely because of Russia’s pre-occupation with the Ukraine conflict and its fallout. The last annual summit took place in 2021.

Indian Prime Minister Narendra Modi and Russian President Vladimir Putin could have held a summit on the margins of the BRICS summit in Johannesburg in South Africa or the G20 summit in New Delhi, but Putin did not attend either. While Jaishankar’s visit does not substitute for a summit meeting, it was intended to fill a political gap.

Jaishankar and Russian Foreign Minister Sergey Lavrov have met six times during the year, and the Indian external affairs minister also met with Russian Deputy Prime Minister Denis Manturov during the year on the economic agenda. For Jaishankar to visit Russia before the end of the year, undeterred by the Russian winter and holiday season, reflects the importance both sides attach to the further expansion of ties.

Putin has on several occasions praised the Indian prime minister and positively noted the country’s economic progress. At the ‘Russia Calling’ Forum in early December this year, he said that despite pressure from others, he “cannot imagine that Modi could be frightened, intimidated or forced to take any actions, steps, decisions that would at variance with the national interest of India and the Indian people.” He noted that sometimes he is surprised at Modi’s tough stance on Indian national interests. He added that the policy pursued by Modi is the “main guarantor” of the developing bilateral ties.

This is high and unusual praise by Putin. It can be interpreted on several levels – particularly as an acknowledgement that India has resisted pressure from the US and others to condemn Russia over the Ukraine conflict, impose sanctions, and reduce defense ties with Russia. India has, on the contrary, bought discounted Russian oil to the point that Russia has become its biggest oil supplier. It has argued that ensuring this market flow of Russian oil has helped avoid a major spike in oil prices and checked global inflation. Indian-Russian trade has expanded, while the G7 has broken economic and trade ties with Russia.

India played a major role as G20 president in negotiating the part in the Leaders’ Declaration on the Ukraine conflict despite the hardening of the G7 position and that of Russia and China after the G20 summit in Bali. The final text does not mention Russia by name, while the G7 was satisfied that the general formulations in it could be sold as being directed at Russia’s military operation in Ukraine.

Not surprisingly, Putin complimented India for de-politicizing the G20. India chaired the SCO summit in July 2023 and participated in the BRICS summit in South Africa in August 2023. This countered G7 attempts to isolate Russia diplomatically. In fact, the New Delhi SCO Declaration spoke of more effective global institutions, a more representative, just, and multipolar world order based on international law and multilateralism, and criticized the unilateral application of economic sanctions – a clear critique of the Western-dominated global system.

It is against this backdrop that Putin received Jaishankar at the Kremlin, the first time that such a gesture has been made to him personally. The general unavailability of Putin to visiting foreign ministers is well-known.

Jaishankar delivered a personal message from Modi to Putin. During the meeting, Putin invited his “friend Modi” to visit Russia in 2024 and noted that Indian-Russian ties were on the whole developing well. He said that he had been briefing Modi on developments in Ukraine, remarking that he understands the Indian prime minister is willing to do his utmost to resolve the matter by peaceful means. He added that he would give additional information to Jaishankar on Ukraine.

India has continued to strengthen ties with the US, including in the defense domain. It is a member of the Quad and a strong supporter of the Indo-Pacific concept, both of which are intended to deter China’s regional ambitions. Russia has reservations about the Quad and the Indo-Pacific concept, which it sees as the US engaging in bloc politics in Asia.

Putin’s praise for Modi and India and the gesture of receiving Jaishankar takes into consideration these realities of India’s foreign policy which are meant to safeguard the larger national interests. At the core of this is Russia’s respect for India’s policy of strategic autonomy. Jaishankar’s high-profile visit and the vigorous language used to mark the importance of India’s traditional ties with Russia would have caught Washington’s attention.

Jaishankar noted that after talks with Lavrov, “what clearly came out was that India-Russia relations remain very steady, remain very strong, they are based on our strategic convergence, on our geopolitical interests, and because they are mutually beneficial.” The two leaders discussed political cooperation within international organizations such as BRICS, the SCO, etc.

Indian-Russian trade is at an all-time high, exceeding $50 billion last year, and should pass that figure this year. It includes energy, fertilizers, coking coal, and other items, for which long term arrangements were discussed. India intends to expand investments in Russia’s oil and gas sector.

On the nuclear side, two important amendments were agreed to which will take the Kudankulam nuclear power project forward. Mutual investments, progress on a bilateral investment treaty, and the resumption of negotiations between India and the Eurasian Economic Union for a free trade agreement will be resumed in the second half of January 2024.

Moscow and New Delhi will expand cooperation in the Russian Far East. India expects a large representation from this region at the Vibrant Gujarat Summit in January 2024.

Connectivity between India and Russia will be critical for expanding trade ties – connectivity from western India through the International North-South Transport Corridor, and connectivity from eastern India, from Chennai to Vladivostok, and the polar route. To promote tourism, India is open to increasing the number of flights from India every week.

The talks between Jaishankar and Lavrov were comprehensive. They discussed the global strategic situation, Ukraine, Gaza, the Indo-Pacific, ASEAN, Afghanistan, UN-related matters, the challenges facing the Global South, and the building of a multipolar order. China would undoubtedly have been discussed, but diplomatic discretion here would be normal.

In the joint press conference, Lavrov spoke of prospects for more defense cooperation, including joint production of modern weapons under New Delhi’s ‘Make in India’ program, and, importantly, expressed respect for India’s efforts to diversify its defense ties. He noted bilateral cooperation in rocket engine manufacturing and satellite navigation systems.

Jaishankar’s visit was productive in maintaining the momentum of Indian-Russian ties, which have been built over 60 years, a relationship that he believes is not just about politics, diplomacy, or economics, but is much deeper.

Where India Meets Russia – We are now on WhatsApp! Follow and share RT India in English and in Hindi

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.

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In what fields are India and Russia cooperating?

What do Putin and Modi officially characterize Russia/ India relationship as?

Prime Minister Modi and President Putin did not meet at major summits such as BRICS in Johannesburg or the G20 in New Delhi, as Putin was absent from both events.

What formal frameworks do India and Russia cooperate within?

Putin has described Modi’s policy as the main guarantor for developing bilateral ties, and Russia respects India's strategic autonomy.

Modi’s high-profile Russia visit, even at the risk of U.S. displeasure, shows India's commitment to pursuing its own foreign policy agenda.

Title:

Content: Homepage

Modi's Russia visit shows India isn't worried about making the US mad

  • In a move likely to anger the US, Modi is visiting Russia.
  • The move signals strong ties between Delhi and Moscow, and shows the world India is pursuing its own agenda.
  • Modi is aiming to correct the trade imbalance and address China's Indo-Pacific activities.
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In a move likely to anger the US, Indian Prime Minister Narendra Modi is visiting Russia on Monday for his first bilateral trip after winning a historic third term in office.

Modi's two-day visit to Russia — where he is scheduled to meet with President Vladimir Putin — is significant in that it signals strong ties between Delhi and Moscow. It also shows the world that India is not afraid to pursue its own agenda.

Vinay Kwatra, India's foreign secretary, told reporters in New Delhi that issues between Russia and India have "piled up" and "need to be addressed," per Bloomberg.

Russia's relationship with India goes back to the Cold War, and trade between the two countries has grown since Russia started the war in Ukraine. India is a major buyer of Russian oil. Russia is also India's biggest arms supplier.

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Kwatra underscored that the two countries' trade relationship has remained "resilient."

Still, Modi's trip will "rankle many Western observers," Ved Shinde, a researcher and contributor to Australia's Lowy Institute think tank, wrote in a note on Wednesday.

"Since the Ukraine war began, India's purchase of cheap oil from Russia has been seen as profiting from troubles in the heart of Europe," Shinde added.

Modi's visit to Russia will make the US look bad

Just like Putin's visit to supply-chain hot spot Vietnam, India's engagement with Russia isn't a good look for the US, as it comes while Washington is isolating Putin's regime.

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The US has raised "some concerns" about India's relationship with Russia with New Delhi, Kurt Campbell, the US Deputy Secretary of State, said last month.

However, Washington acknowledges that India's ties with Russia are different from its ties with the US.

"We have many areas of alignment, but it is not surprising that there would be areas where we've had perhaps different perspectives, views, historical ties," Campbell said about America's relationship with India.

India, for its part, is looking to balance its relationship with the world's key powerbrokers — the US, Russia, and China.

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"There are different degrees in India's multi-alignment. Make no mistake — the United States and its allies are more consequential for India's future than its relationship with Russia," wrote Shinde.

India needs to leverage its historical ties with Russia to secure its economy and security, so Modi isn't just in Russia for a goodwill trip.

Reducing the trade imbalance

A key agenda item for the visit is to reduce a huge bilateral trade imbalance, said Kwatra.

India imports about $60 billion of goods a year from Russia, but Russia buys less than 10% of this amount from India, per Bloomberg.

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Modi may also touch on China's activities in the Indo-Pacific region, said Kwatra.

India is trying to manage its relationship with China, which has been testy since a border dispute in 2020. Modi skipped the Shanghai Cooperation Organisation summit in Kazakhstan last week.

There's also the matter of Russia's ties with China.

At the summit last week, Putin said Russia's relationship with China is in the "best period in history."

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Modi now needs to cozy up to Putin to counter China's advances.

"The reason for the time-tested stability in India-Russia ties is to maintain a continental balance in the Eurasian heartland. That is, to balance China," wrote Shinde.

"Or to put it another way, don't go around making new adversaries when there are already two open fronts — China and Pakistan," Shinde added.

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How did India react to the war between Russia and Ukraine?

India did not directly oppose Russia's actions

India did not join the Western sanctions against Russia

Historical India–Russia relations, dating to the Cold War, have expanded further since Russia’s war in Ukraine, especially in energy trade, with India as a major buyer of Russian oil.

How did India react to the war between Russia and Ukraine?

India did not directly oppose Russia's actions

India did not join the Western sanctions against Russia

How has Russia/ India trade evolved since the start of the war in Ukraine?

India's purchases of Russian oil increased

How has trade level between India and Russia changed under Modi and Putin?

In what fields are India and Russia cooperating?

Modi is seeking to reinforce ties with Russia partly to counter Chinese advances in the region.

In what fields are India and Russia cooperating?

Why is maintaining a relationship with Russia important for India?

Ajit Doval’s high-stakes visits to Russia and the U.S. underscore India’s balancing act between rival superpowers.

Title:

Content: Opinion

Treading a fine line

Ajit Doval’s high-stake visits to Russia and the US are reflective of India’s consistent efforts to balance ties with the rival superpowers; writes Vinay Kumar

X

India’s security and strategic interests on important global platforms have been in focus over the last month as National Security Adviser (NSA) Ajit Doval made hectic trips to the US and Russia.

Doval headed to the United States in late January and held a meeting with his US counterpart, Jake Sullivan. Earlier this month, he paid a visit to Russia where he joined top security officials from China, Iran and a number of Central Asian states to participate in a multilateral meeting on Afghanistan.

NSA’s recent visits to the world’s most important political capitals underlined the importance that India attaches to striking a delicate balance in its relations with both the countries at a time when global security and geopolitical environment appear uncertain. His visits to Washington DC and Moscow show India’s priorities in forging vital initiatives.

In Washington, the two NSAs agreed upon a number of important arrangements under the Initiative on Critical and Emerging Technologies (iCET) which was launched in 2022 and has the potential to have a transformative impact on India’s partnership with the US in areas like military, science & technology and key high-tech fields.

Considering the fact that Russia and the US have been at loggerheads, more so in the wake of the Ukraine War which has completed one year, Doval’s trip assumes significance. The icing on the cake was that the NSA also had one-on-one meeting with Russian President Vladimir Putin, a rare instance of President Putin meeting a top-ranking official from India. His meeting with Doval also pointed towards the continued importance which both sides accord to each other in taking forward their engagement. At a time when Russia continues to face confrontation with the West over the war in Ukraine, Doval’s meeting with President Putin carries a special context. India, led by Prime Minister Narendra Modi, has lent its voice to the peace-making efforts in Ukraine, stressing that today’s era is not an era of war. In his telephonic conversation with President Putin last September, PM Modi voiced his concern, stressing upon the need to take the path of diplomacy and dialogue, a stance often reiterated at various global forums at the highest level.

While India, having to put up with the Chinese threat, has warmed up to the US, it has also taken pains to maintain its relationship with Russia; though Moscow, facing increased isolation in the global community over the war in Ukraine, does not appear to be too pleased with the initiatives surrounding the Indo-Pacific, with the active involvement of the US and further deepening of strategic defence and technological ties between New Delhi and Washington. India has also stressed upon furthering its cooperation with Russia in sectors such as trade, energy and defence.

With the US, under the iCET initiative, India is poised to forge closer cooperation in the areas of Artificial Intelligence (AI), 6G, quantum technologies etc. Other focus areas include defence innovation, technology cooperation and semiconductor supply chains. Doval stressed upon the need to pin down the deliverables in these key focus areas to ensure that no slip-ups or laxity creeps in. Co-production and technology development have left much to be desired, though India is now billed as a major defence partner of the US

The NSA’s discussions in Washington DC and Moscow also point towards India’s keen desire to safeguard its key interests, make advances in high-tech areas and, at the same time, be ready to hold on to its independent position and avoid landing in confrontationist stance, so far as the two rival powers are concerned, as new dynamics is emerging rather rapidly in the geopolitical arena.

Views expressed are personal

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India has emphasized enhancing cooperation with Russia in trade, energy, and defense.

How has trade level between India and Russia changed under Modi and Putin?

In what fields are India and Russia cooperating?

What do Putin and Modi officially characterize Russia/ India relationship as?

India’s stance of non-alignment and deft diplomacy following Russia’s invasion of Ukraine has placed it in a strategic “geopolitical sweet spot.”
India is seen by the Global South as a voice highlighting the war’s impact on developing nations, though its growing potential is often discussed more than its current stature.

Title:

Content: I wrote in May about how, thanks to India’s legacy of staying away from great-power camps and the current leadership’s deft handling of the new conditions created by Russia’s war on Ukraine, India found itself in a “geopolitical sweet spot”.

Essentially, the sense at the time – confirmed by a stream of major diplomatic engagements by foreign powers with New Delhi – was that India was being courted by all sides, and could, in a sense utilise the crisis to emerge stronger.

On the one end, the West was making an extra effort to help India reduce its dependence on Russian arms and build its capacity to balance China, while on the other, Moscow and – even to an extent Beijing – tomtommed New Delhi’s refusal to join the sanctions regime in an effort to convey the idea that the entire world was not toeing US President Joe Biden’s autocracies vs democracies line.

There was the concern that this balancing act could not last forever.

Yet, by all accounts, eight months into the war, India continues to inhabit that sweet spot, despite Prime Minister Narendra Modi’s harsher words for Russian President Vladimir Putin and grumbling from Western commentators about India’s abstentions in the United Nations Security Council.

From the Hindustan Times:

“Russia and Ukraine are fighting, but both want to be friends with India and have a degree of appreciation for its position on the war. Europe and the United States are key players in the war helping the Ukrainians, but despite Delhi’s indifference and refusal to participate in any of their measures to make life tough for the Russians, they are happy enough with India’s position. Smaller countries in Asia, Africa and Latin America don’t like the war and are aggrieved that they are suffering for no fault of their own. But the global South sees India as a voice of reason which can highlight the consequences of the war on the big power stage that they have little access to. And the top United Nations leadership is keeping India briefed on developments, and sees India as a valuable partner in its efforts to lower the temperature.

Both on the war, and beyond the war on the most pressing strategic and development issues of the day, the world is wooing India.”

Of course, the tightrope walk is not necessarily easy or inevitable.

If a cornered Putin further escalates civilian attacks in Ukraine, New Delhi may find it harder to maintain what is effectively a not-our-problem stance on the war.

On the other side, in the optics of its red-carpet welcome for the Pakistani Army Chief, the US ambassador’s visit to Pakistan-occupied Kashmir and the F-16 deal, Washington, DC, has offered a reminder that its growing relationship with India does not mean it will align with all of New Delhi’s stances either.

Despite these diversions, as long as the West continues to see Xi Jinping’s China as the long-term threat to global order, it will continue to seek way to align further with India. Even as it continues to delink from Russia, New Delhi will still look at pathways – such as its presence at the Shanghai Cooperation Organisation or among its BRICS, or Brazil, Russia, India, China and South Africa, peers – to sustain a multipolar world.

But this is no longer just a geopolitical moment for India.

As nations around the world grapple with high inflation and the prospect of a global recession, the spotlight has turned also to the Indian economy.

From The New York Times in September,

“As global economic growth slows sharply, with many major economies gripped with worries of recession, there has been a conspicuous exception: India.

The Indian government says the country’s economy remains on track to grow 7% or more this year, more than double the projections for global growth…

The rapid expansion in India reflects in part the depths to which the economy had fallen during the most devastating shocks of the pandemic, with lockdowns forcing an exodus of laborers from urban centers. It also reflects the insulated nature of India’s economy: It has avoided the worst of the global slump because it is driven more by local demand than exports.

But perhaps most important has been a suite of government policies, including increased public investment, relief to debtors, and credit guarantees to small and medium-size firms hit hardest by the pandemic. Policy interventions have kept inflation – which has historically been high in India – relatively in check. And purchases of discounted oil from Russia, against the wishes of the United States and Europe, have helped buffer rising global energy prices.”

The “sweet/bright spot” terminology has been embraced by many.

Naturally, the government has adopted it, talking up the successes of the Indian economy. But its use goes beyond just New Delhi’s cheerleaders.

Deutsche Bank chief executive Christian Sewing called India the “shining star” of the global economy at the moment. Citigroup Chief Jane Fraser, back in July, called this a “pretty unique point in time for India.” The International Monetary Fund’s Managing Director Kristalina Georgieva reportedly called India a “bright spot” in the global economy.

What explains this sudden optimism for an economy that was seeing a major slowdown in growth even before the Covid-19 pandemic hit?

Some of it has to do with China’s continued adherence to the zero-Covid strategy, meaning the country just about avoided contraction in the April-June quarter and is unlikely to see much annual growth – prompting global capital to look elsewhere for investment opportunities (in addition to the efforts to diversify from China that have become more urgent for many Western businesses over the past few years).

Some of it has to do with India appearing to weather the current “polycrisis” better than many of its neighbours and peers, with the rupee holding firmer than a number of other currencies, external debt being under control and prices not seeing the runaway inflation that is affecting much of the world.

Here, there is a general sense that, despite the mismanagement of economy prior to the pandemic, and the fears of demand destruction because of limited fiscal spending during the crisis, India’s policymakers successfully kept the ship steady and weathered the storm better than many others.

Some of it is in reaction to the news that India overtook the United Kingdom to become the world’s fifth-largest economy – an important development, given the colonial history of the two countries, but also a complex one given the huge per capita disparities.

The “sweet spot” plus “bright spot” conversation has placed India in a prominent place on the world stage, reviving “superpowerpredictions (despite the rather unfortunate recent history of the ‘Superpower 2020’ trend). But much of it is based on extrapolating from India’s potential, rather than its current stature. There are plenty of challenges to tackle before India can achieve that potential.

Even if you put aside the “risks [to] social harmony” that “Raghu Sanjaylal Jaitley” mentions here in a thoughtful evaluation of India’s “sweet spot” moment, there is the much touted economy to consider. While India’s gross domestic product, or GDP, growth figures will undoubtedly be the fastest of any major economy this year, and most likely the year after, the numbers themselves have been disappointing relative to original expectations.

As Mihir Sharma explains on Bloomberg:

“India’s official statisticians reported 13.5% growth in the April to June quarter of this year. This meant that the country whooshed into top place as the world’s fastest-growing large economy — and, incidentally, replaced Great Britain as the world’s fifth-biggest economy.

Unfortunately, that’s where the good news about India’s growth prospects ends. Those GDP numbers were actually a disappointment, given that the same quarter last year saw India shut down amid its devastating Delta-driven Covid wave; a Bloomberg survey of economists expected growth in excess of 15%.

Over the past three years, in fact, GDP in India has grown just over 3% – and less than 4% since the last quarter before the pandemic. This financial year – which will end in March 2023 – is unlikely to break any records: Most now expect that real growth will not reach 7% even off a low base.”

Indeed, growth estimates for this financial year (2022-’23) have been cut by the Reserve Bank of India (from 7.2% to 7%), the State Bank of India (from 7.5% to 6.8%), the International Monetary Fund (from 7.4% to 6.8%) and the World Bank (7.5% to 6.5%). Japanese brokerage Nomura said it expected India to hit 7% this year, but to sharply decelerate afterwards, coming down to 5.4% (as opposed to the 6.1% expected by the International Monetary Fund, for example).

“While we broadly agree with our interlocutors on the growth prospects in FY23, we believe the optimism in FY24 may be misplaced and that the spillover effects from the global slowdown are being underestimated,” analysts from Nomura said, in a note.

As TN Ninan explains, “the signs of an economic slowdown are unmissable. Whether it is industrial production, electricity generation, exports, or revenue from goods and services tax, there is a loss of momentum.”

This is obviously connected to the expectation that a third of the world will be in recession next year, which cannot but affect India, especially as it has depended heavily on exports to power growth over the pandemic years. But it also reflects weaknesses in the underlying economy.

Abhishek Anand, Arvind Subramanian and Josh Felman write in the Business Standard,

“Is the Indian economy truly booming? The short answer is that the latest data flatters to deceive. The economy is out of the ICU, but its health remains fragile and still needs the doctor’s attention…

In GDP terms, the economy is just 3.8% cent larger than it was three years ago. And it is worth noting that 2019-’20 was a year when the economy was in ICU, with most indicators showing negative growth as Figure 1 shows. Thus, a comparison with the healthier 2018-’19 would present a much dimmer picture…

All the heady optimism has overlooked the vulnerable state of the macro-economy. Headline inflation has been above the target 4% for 35 consecutive months, above the ceiling of 6% for 21 of the 35 months, and core inflation remains close to this ceiling rate. According to the IMF’s latest estimates for 2022, the general government fiscal deficit is almost double-digit, and the current account deficit is 2.9% of GDP. When we compare the macro index to India’s own past, vulnerabilities are at their highest since the fallout from the Global Financial Crisis even if India’s high but depleting foreign exchange reserves provide cushion against real crisis.”

One of the key worries is that, despite all the reforms and policy adjustments meant to make the business environment friendlies, private investment – which would provide an engine of growth even at a time when the global market is struggling – simply hasn’t taken off.

You know things are bad on this front when politicians have to complain to industry leaders about why they are not investing. Here is Finance Minsiter Nirmala Sitharaman in September at a corporate summit:

“I want to know from the Indian industry what is it that they are hesitant about… Since 2019, when I took charge of the finance ministry, I have been hearing industry doesn’t think its (environment) is conducive. Alright, the (corporate) tax rate was brought down. I keep defending the industry even when people provocatively ask me what I would like to tell the private sector. We will do everything to get industry coming and investing here. Give PLI, we have given PLI. I want to hear from India Inc: what’s stopping you?

Is it like Hanuman? You don’t believe in your own capacity, in your own strength and there’s got to be someone standing next to you and say you are Hanuman, do it? Who is that person going to tell Hanuman? It can’t certainly be the government.”

And why isn’t private investment taking off?

One answer is that, despite these positive GDP growth numbers indicating a recovery from the depths of the pandemic-created contraction, businesses have little confidence that there is consumer demand over the coming months and years will be robust and broad-based.

Consumption has indeed been growing at the premium end of the market, but numbers remain worrisome across the broader economy, reinforcing the sense that India’s recovery from the pandemic has been “K-shaped” – meaning extremely positive for the affluent, and disappointing for everyone else.

“The confidence of the private sector on the sustainability of demand is low, given economic headwinds. This is leading to lower appetite for investing to build capacity,” Ranen Banerjee, leader economic advisory Services, PwC India, told Business Standard.

Niranjan Rajadhyaksha has for some time now been writing about how India’s post-lockdown recovery – as measured through GDP growth, buoyant tax numbers and healthier balance sheets – has been led by corporate profits, rather than wages. That in itself is not a problem: higher profits can lead power an economic recovery, but only if conditions are right. And for India, right now, they do not seem to be.

Rajadhyaksha writes:

“A higher share of profits can boost economic activity if companies use their net income to expand capacity in their factories by buying new machines; however, companies will prefer to use their net income to either save money or pay off old debts when there is no compelling reason to buy new machines because of excess capacity or business uncertainty…

This year’s festive season has started off well, but companies, policymakers and analysts have to be alert to the possibility that a lower share of wages in national income, persistent inflation and a gradual whittling down of the excess financial savings accumulated during covid lockdowns can lead to weaker consumer demand in the coming quarters.”

Still, the government – which continues to spend heavily on public capital expenditure with the aim of driving growth until the private sector kicks in – is hoping that the cleaner balance-sheets and availability of credit will act as a springboard for whenever businesses start investing.

From the Ministry of Finance’s July economic review:

“Conservative estimates of medium-term potential growth for India may be missing a trick as they overweight the decline and subsequent stagnation in capital formation in the country in the second decade of the millennium. That was due to the stress in the financial system. As and when the Indian private sector embarks on the long-awaited capital expenditure cycle, building on the government’s capital expenditure of recent years, India’s potential and estimated economic growth performance in the rest of the decade will inevitably be revised higher.”

That “as and when” is crucial. Will it be in the next few months? Or is it several years down the line – years that are likely to include a global recession, rising energy costs and no guarantee that the corporate profits and tax revenue spikes of this financial year will be sustained?

Will global headwinds, persistent inflation and a K-shaped recovery prevent India’s economy from taking advantage of its “bright spot” moment? Or will the government – or indicators from the broader economy – finally convince Hanuman to step up in time?

This article first appeared on India Inside Out.

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