On May 23 the Chinese Foreign Minister Wang Yi received the Brazilian foreign policy adviser Celso Amorim in Beijing. The two sides discussed, inter alia, the conflict in Ukraine. After the meeting the Chinese news agency Xinhua put out a “six point common understanding” reached between China and Brazil for a possible resolution of the conflict in Ukraine. The six points are reproduced below:

1.The two sides call on all relevant parties to observe three principles for deescalating the situation, namely no expansion of the battlefield, no escalation of fighting and no provocation by any party.

2.The two sides believe that dialogue and negotiation are the only viable solution to the Ukraine crisis. All parties should create conditions for the resumption of direct dialogue and push for the deescalation of the situation until the realization of a comprehensive ceasefire. China and Brazil support an international peace conference held at a proper time that is recognized by both Russia and Ukraine, with equal participation of all parties as well as fair discussion of all peace plans.

3.Efforts are needed to increase humanitarian assistance to relevant regions and prevent a humanitarian crisis on a larger scale. Attacks on civilians or civilian facilities must be avoided, and civilians including women and children and prisoners of war (POWs) must be protected. The two sides support the exchange of POWs between the parties to the conflict.

4.The use of weapons of mass destruction, particularly nuclear weapons and chemical and biological weapons must be opposed. All possible efforts must be made to prevent nuclear proliferation and avoid nuclear crisis.

5.Attacks on nuclear power plants and other peaceful nuclear facilities must be opposed. All parties should comply with international law including the Convention on Nuclear Safety and resolutely prevent man-made nuclear accidents.

6.Dividing the world into isolated political or economic groups should be opposed. The two sides call for efforts to enhance international cooperation on energy, currency, finance, trade, food security and the security of critical infrastructure, including oil and gas pipelines, undersea optical cables, electricity and energy facilities, and fiber-optic networks, so as to protect the stability of global industrial and supply chains.

The following observations are warranted:

> Celso Amorim is the most influential foreign policy adviser to Brazilian President Lula and in that sense is way more consequential than the Foreign Minister of Brazil. So, the statement agreed upon by him with Wang Yi can be construed as Brazil’s official position on Ukraine.

>There is absolutely no reference to Russia having to withdraw from any of the Ukrainian territories it has occupied. What the Sino-Brazilian proposal does is to freeze the conflict calling for no further expansion on the battlefield and no further escalation of fighting. This may be expected to infuriate Ukraine, the EU and the West who have all been calling for a Russian withdrawal from Ukrainian-occupied territories as a pre-condition to any resolution of the conflict in Ukraine. The Sino-Brazilian proposal therefore is probably dead on arrival.

>Urging dialogue and diplomacy, it calls for an international peace conference at the right time which is supported by both Russia and Ukraine. It is clear neither China nor Brazil think of the impending Ukraine peace conference in Switzerland in June 2024 as either useful or legitimate.

>Both China and Brazil express themselves strongly against the threat or use of nuclear weapons and safety of nuclear installations. This is welcome and an extension of the Chinese position. The Indian position is similar as well.

>Both countries oppose the formation of political and economic groups. For China to say this is par for the course. But Brazil siding with China in implicitly opposing groups like AUKUS or even Quad, and calling for efforts to enhance international cooperation on energy, currency, finance, trade, food security and the security of critical infrastructure etc so as to protect the stability of global industrial and supply chains is cocking a snook at the US regarding its alliances in the Indo-Pacific, the sanctions in place against Russia & China, and its elaborate efforts at building resilient supply chains. Is this the beginning of some common positions by Brazil and China in the context of BRICS? We will have to wait and see.

It is well known that Lula is his own man and is capable of taking on EU and the West. What is also interesting is that the Chinese press has claimed that China and Brazil, in coming up with this six point common understanding are speaking on behalf of the Global South. India and others in the Global South should duly take note.

The CEO of NITI Ayog, the apex public policy think tank of the Government of India, delivered a speech at the annual business summit of the CII (Confederation of Indian Industry) on 17 May, 2024. The speech was interesting inasmuch as it proposed a radical overhaul of India’s trade and industrial policy. The fact that the person in question Mr B V R Subrahmanyam, was a former Commerce Secretary of the Government of India and he now heads NITI Ayog, whose proximity to the Government cannot be in doubt, makes the speech that much more interesting. He suggests nothing short of a major overhaul of India’s trade and industrial policy. The key elements of the speech are given below along with comments.

(1) Lowering the applied tariffs: It is well known that the Government has, over the last few years, systematically raised applied tariffs on selected items through executive decisions. While these are broadly WTO-legal (given the considerable gap between India’s bound and applied tariffs) and may possibly fetch extra revenue for the Government, they also contribute to enormous unpredictability for traders, not to mention that fact that its primary purpose is to protect domestic industry from competition thus keeping them fundamentally uncompetitive. Lowering applied tariffs therefore is worth considering.

(2) Become part of GVCs: The CEO recognizes that India has been singularly unsuccessful in becoming part of the Global Value Chains (GVCs). He still holds out hope that this can happen, a view that may or may not be shared by others. The fact that China has a major excess capacity problem, that markets are saturated and there is protectionism raising its head in the West needs to be factored in. Still, it is worth a try. I myself would focus more on ensuring that India does everything to be part of the emerging Resilient Supply Chains. Of course, both strategies are not mutually exclusive.

(3) Government’s increase in CAPEX not matched by our Private Sector: There is no question that the Government has significantly increased CAPEX (Capital Expenditure) in infrastructure year on year for the last ten years. Curiously though, the Indian private sector has stubbornly refrained from keeping pace. It is time the Government had a detailed conversation (perhaps even at the level of PM) with our private sector titans to find out what is keeping them from doing this. The CEO has admitted that this is a problem, the first step in doing something about it.

(4) More ease of doing business: The CEO is remarkably frank in admitting that while some progress has been made, more needs to be done to improve the ease of doing business. He calls it “low procedures”, meaning less red tape. He should know, having been an Indian bureaucrat of long standing. He also makes a valid point of reforming both our contract and dispute settlement procedures, both of which are onerous and time consuming. It is hard to disagree with this point; who can dislike motherhood and apple pie!

(5) Continue Reform: The CEO hints at reform of the banking sector where he argues India needs “bigger banks” and must eventually have our own JP Morgans and Citibanks. Easier said than done you might say, but worth trying. While this is welcome, I would argue that both Agriculture and Land reforms are fundamental if India is to become a major destination for FDI. Triumph of wishful thinking?

(6) NTBs: Perhaps the most revolutionary proposal he makes is the way he says India should approach the whole array of non-tariff barriers (NTBs). These refer to barriers erected by industrialised (but also others) countries relating to labour, environment and more broadly, standards & regulations. The CEO argues dramatically that these are not barriers per se, but part of how the society in an importing country imposes conditions that they deem fair and fit. He therefore argues that Indian industry must simply adjust to it if it wants to export to these destinations, instead of cribbing about these. This is a radical departure from the typical thinking in our Commerce Ministry where until recently, these NTBs were considered anathema by our authorities and industry alike. In particular, he calls on our industry to adjust to the European Union’s proposal of Carbon Border Adjustment Mechanism (CBAM), something that should be music to the ears of the EU negotiators with whom we are negotiating a FTA. It will be interesting to know how our industry reacts to all of this.

(7) FTAs: The CEO makes a fervent plea for India signing more and more FTAs. He says, by and large, domestic industry must not be sheltered and exposed to foreign competition. India has embarked on a FTA signing spree, though the major ones with EU and UK are yet to be concluded. In these negotiations, Labour Standards, Environment, Government Procurement and Digital Commerce will figure prominently. By the way, foreign negotiators have told me in complete confidence that there are too few Indian negotiators who are saddled with FTAs and that India’s lack of negotiating bandwidth is also contributing to delay in these talks. This must be dealt with by the new Government.

Conclusion: It is possible that the CEO of NITI Ayog was being deliberately provocative so that the Indian intelligentsia and trade policy cognoscenti can debate and subsequently prepare the Indian political class and the public for the kind of measures that India may have to take eventually. Equally, it may also serve as an admonition to our industry that they should no longer expect to be mollycoddled.

In any case, the CEO has done great service by raising these profound issues. If it leads to a healthy debate among experts, academics and decision makers, the speech will have eminently served its purpose. The new Government must pay attention to the issues raised with a view to resolving them early in its tenure. Needless politicisation of these issues must be avoided since that will surely prevent progress. At the end of the day, India needs a trade and industrial policy that is fit for purpose and is in consonance with its overall strategic objectives; right now, it hasn’t got one!

One thing seems certain after more than two years since Russia invaded Ukraine and unleashed a war in the heart of Europe. While conventional wisdom is that there is a stalemate in the war, the prevalent prognosis by experts is that there is no way Ukraine can win this war from here. But perhaps, it is important to clarify what victory or defeat means in the context of the war in Ukraine.

For Ukraine to win this war, it has to regain all the territories it lost since at least February 2022 when Russia invaded it, if not since March 2014 when Russia took over Crimea. The latter seems more rhetorical as a war objective but the former seems critical if Ukraine is to declare “mission accomplished”. This means Ukraine must evict the Russian forces, which are occupying either fully or partially the following “Oblasts”: Donetsk, Luhansk, Kherson and Zaporizhiya. In the current context, that not only seems like a tall order, it appears well-nigh impossible for Ukraine. This uncomfortable truth is known not just to the US but also to EU officials. And yet, everyone from Macron downwards has been saying that Russia must not be allowed to win the war. It is hard to fathom what they mean when they say that unless they are hinting at a direct conflict between NATO and Russia. For now though, all Russia has to do is maintain the status quo which it is doing comfortably. Witness the latest Russian ingress in Kharkiv, putting Ukrainian troops under severe pressure elsewhere. Ukraine is beset by a multitude of problems: shortage of manpower, lack of ammunition and problems of corruption, war fatigue and bad governance. In sharp contrast, Russia’s war economy is doing okay, military conscription is proceeding apace and President Putin has just won another term. It is not that there are no problems in Russia, but it would seem the ability of the ordinary Russians to accept hardship is much more than was previously imagined. They also seem to have bought into Putin’s narrative of this being a fight for survival for the Russian State and Civilization.

Meanwhile, Ukraine is waiting with bated breath for US assistance to arrive. But it may be a case of too little, too late. One little noticed fact is the arrival of NATO soldiers in the form of “special military advisers” in Ukraine. Poland’s President Donald Tusk merely confirmed what people knew all along. That tens of hundreds of NATO soldiers are already in Ukraine. This is a paradigm shift to which Russia cannot be expected to remain immune. Macron was not exactly being facetious when he contemplated putting boots on the ground in Ukraine and called it “strategic ambiguity”. All this has the potential to bring NATO into direct conflict with Russia. Ukraine now has serious weaponry which can hit Russia deep within its territory. A war between Russia and NATO is still implausible, but not entirely inconceivable. President Putin’s occasional statements about nuclear preparedness is likely aimed at this horrific eventuality.

Russia has meanwhile started consolidating its military gains and begun focusing on economics. The replacement of the Defence Minister by an economist may hint at rationalising the expenditure of the Defence Ministry. Putting a civilian in charge of the Defence Ministry also shows Putin’s confidence about his war aims. The National Security Council team has been reshuffled as a result. It is clear the Russians are planning long term.

Against the above background, the impending visit of Russian President Putin to China and his summit meeting with Chinese President Xi Jinping is terribly important from a geopolitical point of view. Putin will push for more security and economic assistance from his “best friend” Xi Jinping. Xi Jinping, on the other hand, has just returned from a visit to Paris where he has been hectored to by Macron and von der Leyen on Chinese military support for Russia in Ukraine. Xi Jinping will therefore need to walk a tightrope. On the one hand, Russia making gains in Ukraine is in China’s short-term interest; on the other hand, China still needs the markets of US and EU for its goods and does not wish to risk further sanctions. Reading the forthcoming Putin-Xi Jinping summit scheduled to take place in China will be both interesting and difficult.

As I have said elsewhere, all major powers are jostling for influence till the American elections produce a clear winner and the European elections produce a new team in Brussels. It is clear the war in Ukraine will end in negotiations. It is equally clear the situation on the ground will not change substantially. It is simply a matter of time. In the meantime, the meaningless war grinds on consuming both lives and property.

India’s strategic landscape was adversely impacted when the war broke in Ukraine. This will change only when the conflict ends with a negotiated settlement. A diplomatic settlement in Ukraine will also potentially release Russia from its current junior status and excessive dependence on China; something that is also in India’s long-term strategic interest. Ironically, this would also be in Europe’s long-term strategic interest. After all, any durable security architecture in Europe has to include Russia, one way or the other.

There is unusual bipartisan consensus in the American Congress when it comes to China. Ironically, there is at present more consensus in America on policy towards China than on policy towards either Ukraine or indeed towards Israel. That is saying a lot.

While the telephonic call between Joe Biden and Xi Jinping was free from acrimony, visits since then from the US especially that of Secretary of State Anthony Blinken have hardened positions on both sides. Treasury Secretary Janet Yellen first raised thorny issues of Tik Tok, unfair trade subsidies and industrial overcapacity with her Chinese interlocutors. This met with the usual Chinese reaction that market forces and Chinese productivity/efficiency are at work. It is extremely unlikely that China will change its industrial policy upon the request of the US. Blinken’s visit was much more difficult and fractious. Indeed, the media in China was unusually harsh in treating the Blinken visit and urged the Chinese Government to take a hard line. After all, this visit was at the “invitation” of China, and the media was wondering why he was invited in the first place. Blinken, for his part, made clear that the main issue at present in the relationship was Chinese security assistance to Russia which according to Americans was tilting the war in favour of the latter. Ironically, Blinken said if China sought good ties with Europe it cannot possibly help Russia in the war in Ukraine. The other issue raised by Blinken, namely, China’s actions in the South China Sea and in the Taiwan Strait also drew a predictable response from China: defiance and denial.

Prior to Blinken’s visit from 24 to 26 April, the German Chancellor Olaf Scholz paid a visit to China for three days accompanied by who else but top executives from Mercedes Benz and BMW. On de-risking, the Chief Executive of BMW said it all to a Chinese news channel: We actually see more opportunities than risks in China. Must have been music to Chinese ears! Clearly, there is daylight between the China policy of Brussels and that of Berlin. Significantly, there was no clear demarche by Scholz to the Chinese about their military assistance to Russia; instead, he asked Xi Jinping to use his influence with Putin to urge the latter to end the insane war in Ukraine.

That brings us to the China policy of the other important European power, i.e. France. Chinese President Xi Jinping is expected to make his first European visit, post-pandemic, to Paris in the first week of May to celebrate the sixtieth anniversary of establishment of diplomatic relations between France and China. Xi Jinping is visiting Paris also as a measure of reciprocity after Macron decided early on to visit Beijing every single year of his presidency. While trade will be high on the agenda, China will seek to mollify France and the EU with large orders of Airbus. Still, the question is whether Macron will seriously take up with Xi Jinping the issue of China’s security assistance to Russia in the war in Ukraine. Or will he, like Olaf Scholz, urge Xi Jinping to persuade Putin to end the war and seek negotiations. If the war in Ukraine was truly existential for Europe, you would expect both Germany and France to raise the issue of critical military assistance from China to Russia which may be tilting the war. But this does not seem to be happening.

Behind all this is a waiting game. And that concerns the American elections. You can be sure that no major power is going to fundamentally alter its stance on Ukraine or reveal all its cards, until it knows who the next occupant of the White House is!

The phone call between US President Joe Biden and Chinese strongman Xi Jinping last week may be construed as a follow-up to the in-person meeting they had in November in San Francisco. To recapitulate, the main objective of the San Francisco meeting was to try and establish common sense guardrails so that “competition does not veer into conflict”. The first requirement for this is constant communication between the two sides at all levels and that seems to have been achieved. Indeed, after the telephone call, both sides agreed that the conversation was candid and constructive.

Indications are that Biden initiated this telephone call. This need not be overinterpreted to mean that the US needs stability in bilateral ties more than China does. Perhaps, both sides need it for different reasons. Biden would not want yet another theatre of conflict in Taiwan, in addition to the ones in Ukraine and Gaza, given the impending American elections. Xi Jinping faces way too many headwinds, all of which have been well documented. He needs a breather too, to set his house in order. So it suits them both to act all statesmanlike and signal a temporary truce, if nothing else.

Indeed, Xi Jinping after the conversation said ” Sino-US ties are stabilizing”. This is a far cry from two years ago when both sides were emitting hot air over a balloon! The US side may have initiated the telephone call because of possible Chinese cooperation on the question of “Fentanyl” and lesser intercepts of American military assets by China. Also, China has dialled down previous dangerous rhetoric on Taiwan. U.S. and Chinese military officials reportedly met last week for a series of rare meetings in Hawaii focussed on operational safely and professionalism.

In the near term, it is the technology denial regime sought to be put in place by the Americans that is causing angst in Beijing. Xi Jinping said as much when he asserted that attempts to “de-risk” by the West were actually creating more risks. Going further, Xi warned that if the US insists on suppressing hi-tech development and depriving China of its legitimate right to develop, then it will not stand by idly. All this against the backdrop of the saga over Tik-Tok’s ownership issue being played out in the US Congress. Last month, American lawmakers introduced a bipartisan bill giving Chinese tech firm ByteDance 165 days to divest TikTok or else the app would no longer be available on app stores or accessible on US-based web hosting services.

US Treasury Secretary Janet Yellen is visiting China and she is clearly a darling of the media there. The media has extolled her ability to use chopsticks and her gourmet choice of cantonese dishes in restaurants. She also stated after meeting Premier Li Qiang that while relations were on a more stable footing than two years ago, it was important for both countries to have what she called “tough conversations”. One such issue is Chinese factory “overcapacity” in particular Electric Vehicles, solar panels and other green energy products. There is real fear in the West that as the Chinese economy stalls and domestic demand remains tepid, the Chinese will start dumping their products in external markets.

In another indication that China and America are condemned to co-exist, Xi Jinping met with key American executives on March 27 and let it be known that China is open for business, when in actual fact it is anything but. The former Dean of Harvard Kennedy School Graham Allison and the author of the famous book “Destined for War: Can America and China escape the Thucidides’s Trap?” also met Xi Jinping and Wang Yi. The reason for this special treatment is clear. Allison has emerged as the biggest advocate of Sino-American rapprochement (a la Kissinger one might add) arguing that war between the two countries is not inevitable. Indeed, rumour has it that Graham Allison is the brain behind recent moves for detente between the two countries. Allison says that he asked for clarification from Xi Jinping who while talking about Sino-American ties used the following metaphor “I am in you and you are in me” to US Senate Majority Leader Chuck Schumer. It is not entirely clear what Xi said to Allison. But the irrepressible Global Times goes on to quote Allison as saying that the US and China are like inseparable, conjoined Siamese twins. A case of mixed metaphor?

It is conventional wisdom that Israel and the jewish lobby have enormous clout in the formulation and execution of American foreign and security policy. Recent events, however, have called into question the above reasoning.

A couple of factors have contributed to the unusual discord between the strongest of geopolitical allies. The first has to do with Israel’s war in Gaza and the civilian casualties accompanying it. It is now clear that most Americans disapprove of Israel’s war in Gaza; a Gallup poll puts the figure at 55 per cent. This is critical for the incumbent President Joe Biden who is running neck and neck with Donald Trump. Second, Biden faces a serious dilemma: he needs the support of the jewish lobby just as much as he needs the support of ALL democrats. But here is the thing. Last year a Gallup poll found that for the first time in more than two decades, democrats sympathized more with Palesitinians than with Israelis. Biden is thus walking a tight rope in a knife-edge election.

The other demographic shift in the US is that more young Americans are critical of Israel than their elders. Again, Biden needs the support of this group to win in November. Last but not least, immigration may have also led to the spread of Muslim population in the US. This has led to protests against Israel in the unlikeliest of places: Huntsville and Boone! Again, Biden will want to ensure that these votes don’t go to Trump.

There is also the small matter of chemistry between Biden and Bibi. They may have started off being polite with each other, but the relationship has clearly soured and the strain is showing. All of this is taking place against the backdrop of relative decline of American power. If the US cannot persuade Israel, of all countries, to do what it wants then you can scarcely expect China or Russia to be intimidated by American power.

Finally, both Biden and Bibi may want to see the back of each other. It is true that Bibi is up against the wall in Israel, but he is nothing if not a survivor. Biden on the other hand hopes to prevail against Trump. Bibi however may fervently wish for Trump to prevail. After all, with Trump in the White House, Bibi if he is still around may have a freer hand. With Trump there is unlikely to be a debate of right versus wrong and a discussion of niceties like civilian casualties and famine affecting children.

It is probably premature to say that US-Israel ties have changed irreversibly. With a change in leadership either in Israel or indeed the US, things could quickly revert to status quo ante. But there is no gainsaying the fact that the once indestructible relationship is going through a turbulent phase!

The United States of America may have gone past its unipolar moment, but it still is by far the most pre-eminent power around in today’s world. China certainly threatened that position and bid fair to replace the US at some point in the future. But now, legitimate questions are being asked about whether China will ever overtake the US. At any rate, world history does not move in straight lines!

For a pre-eminent power, the strategy and tactics followed by the US to practice its public diplomacy is questionable. The original aims of public diplomacy have remained the same since times immemorial: to explain a country’s diplomatic stand on issues, seek understanding especially of the foreign audience for that stand and finally, to advance one’s own interests in the matter. The US has had an approach which can best be described as “megaphone diplomacy”. For the uninitiated, megaphone diplomacy is a term used to describe  negotiations between countries or parties that are held through press releases and announcements, aiming to force the other party into adopting a desired position. It stems from an unnuanced or a manichean world view and the message sought to be conveyed is deliberately provocative.

The United States has also practiced a brand of cowboy diplomacy for some time now. The earliest example of this from an Indian standpoint is the dreaded Special 301 process flowing from the US Omnibus Trade and Competitiveness Act of 1988 which has been described rightly as an instrument of aggressive unilateralism. This was used with impunity against countries like India during the Uruguay Round of trade negotiations to make the latter accept Intellectual Property Rights as a subject in the GATT/WTO system. Truth be told it worked for the US. But the point is it left such a bad taste with countries against whom it was targeted, that you have to wonder whether this form of public diplomacy is helpful in meeting the overall objectives for which it is intended. And yet year after year, the US continues with this practice treating friend (India) and foe (China) alike. Trump took this to a whole different level when he imposed tariffs using the pretext of national security.

US also delights in commenting on the internal affairs of other states, regardless of how strategically important those countries might be. It is one thing for the US to comment on whether or not the elections in Russia were fair or not. After all US and Russia are in the middle of an information war, as it were. But the US could not desist from commenting on the notification of the Indian Citizenship Amendment Act (CAA). Soon after the Government of India notified the CAA on March 11, a State Department Spokesperson expressed concern over the CAA and made gratituous remarks to the effect that respect for religious freedom and equal treatment under the law for all communities are fundamental democratic principles (sic). This led in turn to the Indian spokesman for the Ministry of External Affairs saying that this is an internal matter of India and is in keeping with India’s inclusive traditions and its long-standing commitment to human rights. The External Affairs Minister Dr S. Jaishankar, as is his wont, was scathing in his remarks and questioned the Americans’ understanding of India’s history. The trouble is if the US makes remarks on the internal affairs of India, any proud country like India will be forced to respond. This tit-for-tat does not serve either country and it certainly runs counter to what has been billed as the most “consequential partnership” between the world’s oldest and the world’s largest democracy.

The US must re-examine its strategy of public diplomacy which appears to have the opposite effect to that of winning friends and influencing people. There are basically two options available for the US. One, take up these things in private as normal friends and strategic partners do among themselves. Or have a closed-door bilateral dialogue giving each other equal opportunity to raise issues of mutual concern. Doing it in public through megaphone diplomacy is clearly counterproductive and it is hard to fathom what, if anything, the US gains from it all.

It is a truism to say that things in China are opaque. But even by Chinese standards, things under Xi Jinping are becoming more opaque. And so it was with the recently-held “Two Sessions” meeting.

The “Two Sessions” meeting refers to annual meetings of the National People’s Congress – China’s parliament- and the Chinese People’s Political Consultative Conference, an advisory body. The National People’s Congress, even though a rubber stamp gives an opportunity, especially for the Premier of the day (Li Qiang), to outline in some detail the economic targets for the year ahead. This year, the “Two Sessions” talked of “AI-plus” initiative and focused on the ” new three” which refers to solar panels, electric vehicles and batteries. It is clear the Chinese economy is looking into the future.

In the past, the Premier read out from a prepared text and then addressed a press conference which no doubt was “choreographed” well in advance. Nevertheless, it was followed closely by foreigner investors, scholars and China experts for reading the tea leaves. At least symbolically, the Premier was supposed to be number two in the hierarchy. At the end of the day, the “Two Sessions” meet is a way for foreigners to understand how Chinese “democracy” works.

Imagine the surprise then when the much-awaited press conference by Premier Li Qiang was cancelled without explanation this time around. The following questions arise immediately:

(1) Is this Xi Jinping’s way of making sure no one else grabs any limelight other than himself. Li Qiang had already stated unambiguously in his report that: We owe our achievements in 2023 to General Secretary Xi Jinping, who is at the helm charting the course. Mao was known as the “Great Helmsman” so the above description was not lost on anyone.

(2) It is clear that Xi Jinping does not want a Premier like the one before i.e. Li Keqiang who passed away recently and was popular enough to attract crowds at his funeral. He certainly appeared to have enjoyed lot more powers than his successor. It may now be reasonably argued that there is no number two in the Chinese hierarchy at present.

(3) By cancelling a press conference, albeit a highly choreographed one, Xi Jinping was also letting it be known that he is not too concerned about what signal this sends to foreigners, about lack of transparency etc. This concerns the Chinese economy and is of enormous interest to foreign investors. But that does not seem to bother Xi Jinping in the least. It is CCP control and his own position that is predominant.

(4) Are we also seeing a more emphatic shift in the power balance between the CCP and the State Council/Government, in favour of the former. The Premier typically heads the State Council/Government. The Government is now merely an instrument perhaps to implement the CCP’s wishes.

(5) There are also other small tell tale signs. The CEOs of Hong Kong and Macau used to meet separately with the President and the Premier in the past. Now they meet with just President Xi Jinping with the Premier sitting in.

(6) There may have been other changes as well. Foreign Minister Wang Yi now apparently reports directly to Xi Jinping. This was hardly the case with Wang Yi’s predecessors. Our China experts may be able to confirm this.

It is well known that Xi Jinping has been consolidating his base and concentrating power in his hands. Xi Jinping is no longer first among equals; there is virtually no one equal or even comparable to him anymore.

While this development is not new and has been in the offing for some years now, the key question is to ask what geopolitical implications this will have for China’s partners and adversaries. From our perspective, it seems clear in retrospect that Ladakh could not have happened without Xi Jinping’s explicit instructions. Equally, things can improve only if he wishes it. The trouble for India is that our two leaders are not meeting anymore, so chances of improvement in bilateral ties seem bleak at least in the short run.

US and EU will have taken note of this as well. If Xi Jinping is the only one who counts in China, it is hard to attach too much importance to the likes of Foreign Minister Wang Yi or even Premier Li Qiang. It is Xi Jinping all the way, for better or for worse.

The WTO stopped functioning the way it should have, a long time ago. Yet, meeting after meeting at the Ministerial-level takes place at regular intervals to make some incremental progress, probably saving it from obvious extinction. The meeting at Abu Dhabi (hereinafter referred to as MC 13) was no exception to this.

The question is why it is not allowed to die? Well, one reason is that international organizations rarely disappear. Even UNIDO which was to have been wound up some years ago, has managed to reinvent itself and is now surviving, if not flourishing. In the case of the WTO, there has been enormous investment by the industrialised West in the organization. It was fine as long as the West benefitted from the WTO, the classic example being the Uruguay Round of trade negotiations which enabled the transition from the erstwhile GATT to the WTO in 1995. The Uruguay Round was broadly based on the “Washington Consensus”, a notion propagated by the West.

But China, among other countries, changed the fundamental Western calculus with regard to the WTO. China negotiated for 15 long years to get into the WTO. But once they got inside in 2001, they played the WTO game in a way no one could have previously imagined. Basically, for China, if something was not explicitly forbidden by the WTO rules, it was kosher. And they had a “hybrid capitalist” system which the WTO did not provide for, much less bargained. Take industrial subsidies. The degree of opacity in China in this respect is so acute that the prevailing system of depending on the voluntary disclosure to the WTO Secretariat by countries concerned regarding industrial subsidies is nothing short of ludicrous. Or take forced transfer of technology or IP theft by China. There are really no disciplines in the WTO for forced tech transfer in the WTO; on IP theft, it is hard, if not impossible, to prove. All in all, China turned the WTO rules on its head to benefit tremendously from it. The West, especially the US, EU and Japan tried taking them to dispute settlement but found that the Appellate Body actually ruled in favour of China a great deal of the time. This was frustrating for the West to say the least. Hence the American opposition to the Appellate Body. All this in the midst of a major power shift in the world from the West to the East. So, China cannot be steamrollered the way India was in the late eighties in the Uruguay Round.

Against this backdrop, the MC 13 did what it could, which was modest. Thorny problems were kicked down the road and enough decisions were made to keep the WTO afloat. In a development unusual in the WTO, a China-led plurilateral initiative for an agreement on Investment Facilitation for Development (backed by well over 100 countries) was prevented from happening by India and South Africa, the latter two objecting to it on grounds of principle, rather than for substantive reasons. This prompted some observers to quip that there was trouble in the BRICS paradise!

What about India? Well we were and will always be sui generis, especially in the WTO. So much so, our satisfaction with WTO Ministerial meetings is inversely proportional to the degree of success that the meetings enjoy. The MC 13 was a relative failure by all accounts; so, our joy knew no bounds!

India approached the MC 13 with some specific objectives: restoration of the Appellate Body, permanent solution to the issue of Public Stockholding (PSH), 25 year Special & Differential Treatment on Fisheries Subsidies, preventing plurilateral initiatives in the WTO and stopping the extension of moratorium on customs duties on electronic transmissions. There were other supplementary objectives as well.

In my latest Book “India’s Moment”, I have designed an integrated assessment framework for evaluating India’s negotiating positions. So, with your indulgence, I will now apply that framework’s six criteria to assess India’s positions in the MC 13:

(1) Poverty Veto: The decision to seek a permanent solution to the PSH issue is rooted in the poverty veto in the form of the Pradhaan Mantri Garib Kalyan Yojana which reportedly feeds 800 million people. If it was not for this programme, poverty levels would have soared during COVID. This is not to say the prosperous farmers from Punjab are right in their protests, they are in fact dead wrong. But the larger issue of reform of Agriculture in India is crucial. This is one issue where the WTO has no credibility to tell us what to do, having allowed the US and EU in the past to subsidize without limits. The Agriculture Agreement of the Uruguay Round is one of the most unfair and unjust Agreements, especially with regard to developing countries. If there is one issue on which India can and should take on the entire WTO, it is Agriculture.

(2) Policy Space: In my Book I argue that India needs much more policy space than other comparable countries. This is the reason we are seeking 25 years’ transition period for fisheries subsidies (over-capacity and over-fishing) with disciplines for developed countries as well. Other countries view 25 years as excessive, and it is hard to blame them for thinking that. But we make haste slowly in India and have perfected that art! Indian fishermen are local in character and have livelihood concerns. This is in stark contrast to EU, Japan, China and Taiwan which have large fishing fleets and engage in heavily subsidized deep sea fishing. Comparing our subsidies with theirs is a bit like comparing our current coal consumption to that of past misdeeds by the West and current misdeeds by China in this regard.

(3) Domestic Politics: With general elections not far away, the Government was keen to be seen as doing everything to protect the interests of farmers and fishermen, two vital electoral constituencies. So much so, on the fisheries subsidies issue, the EU negotiator blamed India as the only country blocking a positive outcome. In the negotiations at the WTO, domestic politics is never far behind.

(4) Geo-political Imperatives: While our objecting to the China-led initiative on Investment was seen as a by-product of the Ladakh imbroglio, the truth is that India objected to it on grounds of principle. If you allow this plurilateral initiative, then the flood gates will open in the WTO. Still, it is hard to deny geo-politics did play a small part. Interestingly, our Commerce Minister reached Abu Dhabi only after the Chinese Minister left, so no tete-a-tete between them. On the other hand, we did not name the US by name as the culprit for holding up single-handedly a solution on the Appellate Body issue. The geopolitics in the WTO is interesting. Brazil, India’s former ally, has moved on and its interests no longer coincide entirely with India in Agriculture. With China and Brazil out, India will have to rely more and more on the Africa Group for support in the WTO. US elections may prove critical for WTO in particular. One source in the “Heritage Foundation” tells me Trump, if elected, will withdraw from the WTO and have a reciprocal trade act passed in the Congress so he can deal with all partners bilaterally. After all, he knows the “The art of the deal” !

(5) Commitment to Principles: Our objection to plurilateral initiatives in the WTO is because we say we believe in the multilateral character of the WTO and that there must be a consensus among ALL countries before a subject can be included in the WTO. This position will come under pressure in the future as more and more countries want to negotiate subjects like E Commerce, Investment, Gender and Environment and we along with a handful of countries block it on grounds of principle. Interestingly, while the WTO operates on the basis of consensus (in practice and by convention) the rules actually provide for voting! Two major countries object to voting in the WTO: the world’s richest democracy and the world’s largest democracy. Talk of supreme irony!

(6) Realpolitik: It was also interesting that the Indian Minister Goyal said that he had reluctantly agreed to the extension of moratorium on customs duty on electronic transmissions only because of a personal request from his UAE Counterpart. This moratorium has thus been extended by a further two years. India had earlier decided to block the extension of the moratorium.

There is a disconnect between India’s strategic/foreign policy discourse and its trade policy discourse. The former makes it sound like India is already a ten trillion dollar economy or will become one soon. The latter gives an impression that it is still a one trillion dollar economy. This needs bridging. There is thus an imperative need for India to become a ten trillion dollar economy with major trading credentials. If not, our strategic/foreign policy ambitions will take a hit at a time of possibly a Trump-led US, an assertive China, a distracted EU and multilateralism in terminal decline.

As for WTO, India must prepare for a contingency when the WTO is more plurilateral than multilateral, when it is based on the old GATT system of dispute settlement and when the WTO is open to negotiating on subjects like environment, gender etc which we have traditionally considered as “non-trade” subjects.

24 February 2024 marks the second anniversary of the Russian invasion of Ukraine. Russian action in 2022 set off a conflict in the heart of Europe upending decades of peace on the Continent. The conflict has now reached a tipping point with most observers seeing the momentum shifting in favour of Moscow. So, it is time to ask how this war has played out and where things are heading.

Any expectation that this war will be swift and decisive has been completely belied by events. Two predictions made by Russia experts have turned out to be absolutely prophetic: (a) That this will be a long war of attrition; and (b) That there is no way Russia can lose this war given the obvious advantages in manpower and material that it enjoys. This broad assessment has stood the test of time so far, despite some spectacular initial success that Ukraine enjoyed. Ukraine simply flattered to deceive, especially when it failed abysmally in its counter-offensive.

The loss of life and destruction of property has been extensive for both sides. But again, given the huge disparity in size between Russia and Ukraine, the per capita impact has been much more catastrophic for Ukraine than for Russia. Russia has gained momentum lately, so it does not have any incentive to negotiate now. In the case of Ukraine, it ought to be willing to negotiate if common sense prevailed, but it is politically suicidal for Ukraine and EU to negotiate now after investing so much in the war. Moreover, both sides are in a wait and watch situation particularly with regard to the US elections which may see a certain Mr Donald Trump in the White House. And if that were to happen, all bets are off.

EU clearly finds itself in a bind. It cannot not support Ukraine, but its support is increasingly turning out to be inadequate and divisions within EU are beginning to emerge. So, in practice EU will be able to support Ukraine only as long as it can, not necessarily as long as it takes. And Russia knows this only too well. EU has effectively talked itself into the following: (1) That Ukraine must not be allowed to lose this war. (2) This is not just Europe’s war, it is something that should concern the entire world including the Global South. (3) Russia will not stop at Ukraine. If it is allowed to get away in Ukraine, it will attack other countries, including those that belong to NATO. (4) Russia is EU’s implacable arch-enemy. The trouble with the above propositions is that they are all liable to becoming self-fulfilling prophecies, with disastrous strategic implications for the EU, the US, the NATO and more broadly the West.

It is proper after two years of the war in Ukraine to ask what it has done to the world order and international relations. Some broad-brush conclusions:

(a) There has been a serious fragmentation of the world order into at least three constituent parts: the West, the anti-West and the non-West (to borrow a phrase from the Indian External Affairs Minister Dr S. Jaishankar). The G7 represents the first faction; Russia, China, North Korea and Iran represent the second faction. A number of other countries like India represent the non-West faction. The complicated dynamics of the interaction between these three factions may well determine the broad contours of the geopolitics of today’s world.

(b) While the Russia experts were absolutely right about many things including the length of the war and Russia’s edge in it, I think it is fair to say that many of them were just plain wrong when they argued that Russia will never accept “junior status” vis-a-vis China. Russian junior status vis-a-vis China is no longer arguable; it is demonstrably true, even if reversible in the medium to long term.

(c) China emerges a major winner from the war in Ukraine, mainly because it enhances the strategic options for it even while shrinking the strategic space for its main adversaries including the US, EU and India.

(d) The war in Gaza, predictably, takes the US focus away from Ukraine to the delight of Russia and to the satisfaction of China.

(e) Like long-COVID, could this be a long-war that all of us have to get used to? If so, India will have to hasten its plans for diversification away from Russian defence ties and also deal with the de facto Sino-Russian alliance. Africa will need to grapple with food insecurity. And Europe will be distracted for a long long time. Security in the Indo-Pacific may be a casualty.

(f) If one compares the initial war aims of Russia and Ukraine, it is fair to conclude that neither one has substantially achieved those. But Russia has gotten the territory that it really coveted and conversely, Ukraine has lost close to twenty per cent of its land to Russia. On the other hand, it is hard to deny that Russia’s strategic scenario has become much more adverse with Sweden and Finland joining NATO and Ukraine eventually set to join Western institutions.

(g) The energy scene has been complicated by the war in Ukraine and countries have been forced to overlook environmental considerations. The war against climate change thus has taken a back seat.

(h) EU is going to be hobbled by economic and financial travails for the foreseeable future as a result of the war in Ukraine. And if the US is less forthcoming, then the war effort will have to be more or less entirely financed by the EU.

(i) The question as to what the conflict might have been if Ukraine was in possession of nuclear weapons is not lost on any one. Many countries in vulnerable situations must be evaluating their nuclear options. Nuclear non-proliferation may become a casualty.

Where does the world go from here? There is simply no traction at present for a negotiated settlement for the conflict in Ukraine. But a force majeure kind of event, such as the election of Trump in the US or massive infusion somehow of money/weapons into Ukraine may change the course of the conflict and eventually spur willingness for negotiations between the parties. Until then, Europe will sadly continue to be the killing field it resembles at present.