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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.

It is fair to say that a number of Pakistan experts have nowhere to hide at present. In the run up to the polls, it was widely predicted by many of them that the omnipotent military of Pakistan had rigged things in such a way that the old warhorse, Nawaz Sharif, will be “selected” as the next Prime Minister by the people. It is entirely possible that Nawaz Sharif may still emerge as Prime Minister of a coalition government. But there is no gainsaying the fact that the voters decided to send a clear message to the military establishment as to who the “boss” really was in Pakistani politics.

Consider the following. Imran Khan, the popular leader falls foul of the military before the polls. The military, not wanting to take any chances, puts him behind bars and encourages a number of Khan’s colleagues to either quit politics altogether or defect to other parties. Many, however, are allowed to fight elections as independents, perhaps a fatal error by the establishment in hindsight. On the other hand, the military makes it clear to anyone who cares to listen that Nawaz Sharif is the chosen one. Charges against him are dropped and he comes back from exile in time to campaign for his party, with his daughter and brother in tow. What could possibly go wrong?

In a classic demonstration of Murphy’s law, everything that can go wrong went wrong for the military establishment in these polls. First, even with every conceivable advantage, Nawaz Sharif and his party failed to win an absolute majority. Worse, the independents, the vast majority of whom belonged to Khan’s party, emerged as the single largest group in the results declared so far. From his prison, Khan congratulated the people of Pakistan for keeping faith in democracy. He stated a number of seats were “rigged” and urged his followers to take to the streets “peacefully” to protest this. Meanwhile, horse-trading has begun in right earnest. All this will play out with drama and theatre in the next couple of weeks.

The main implications of the election results in Pakistan are:

(1) The people of Pakistan took their vote seriously, despite serious odds.

(2) The military establishment has turned out to be less omnipotent than was believed earlier. Its reputation has certainly taken a beating.

(3) Imran Khan is by far the most popular politician in Pakistan today. As one Pakistan commentator put it, he has managed to score a century without a bat in his hand!

(4) A coalition government appears inevitable and a period of political instability may lie ahead. This is not ideal, given the myriad challenges that await this nuclear-armed nation of about 240 million people.

(5) It is for Pak experts to weigh in on this point, but India did not figure prominently in this election. This is no bad thing from our point of view.

(6) Did the “American factor” play a role in the electoral outcome? After all, it is an open secret that there is no love lost between the Americans and Imran Khan.

(7) The US, UK and the EU said they would work with the next government in Pakistan but did express serious concern over alleged irregularities. At the time of writing this, India has understandably not reacted to events in Pakistan.

What all this will mean for India’s policy towards Pakistan remains to be seen. A weak coalition government and a smarting military establishment is unlikely to provide a conducive environment for peace and reconciliation between the two countries. That said, abhi picture baaki hai!!

While the impending American presidential election is hard to predict, countries around the world are seeking to ‘Trump-proof’ their foreign and security policy. This is based on current wisdom that while Trump is not a shoo-in, it is virtually impossible to rule him out!

The one important point to ponder is that unlike the vast majority of politicians, Trump actually believes what he says. He therefore means what he says; this applies even to the outrageous things that he says on the campaign trail. Some may argue that Trump’s bark is worse than his bite. This is a dangerous argument. It is much better to assume that with Trump what you see is what you get!

The big question for the world is whether the US under Trump would turn isolationist and focus inwards in a significant way. After all this is the signature theme of MAGA i.e. Make America Great Again. Should this happen, the biggest casualty may be NATO. If the US treats NATO agnostically, then there are implications not just for Russia, but also the new entrants Finland and Sweden. It is however Ukraine which will face the Trump impact in almost an existential manner. Trump boasted recently that he could resolve the Ukraine issue in a matter of days, causing enormous consternation to Ukrainian President Zelensky. It is near certain that Trump will cut off military aid to Ukraine. In parallel, Trump is most likely to deal with Putin from a clean slate. Effectively, this means that a negotiated solution in Ukraine suddenly becomes possible; the trouble is this also means Ukraine will have to deal with Russia from a position of relative weakness. Territory occupied by Russia will most likely remain Russia’s. NATO may be weakened to the point where Ukraine’s potential membership in that organization may become meaningless.

The transatlantic relationship (US-EU) will be in for a paradigmatic shift if Trump makes it to the White House. The EU’s “Common Security and Defence Policy” is still work in progress and is arguably inadequate to meet all of EU’s security requirements. More important, the “Strategic Compass of the EU”, announced with much fanfare in 2022 and aimed at a stronger and more capable EU in the field of security and defence unambiguously states that the transatlantic relationship and EU-NATO cooperation is key to its overall security. Trump therefore is unquestionably bad news in that sense for the EU. It is fair to say that EU will be left largely to fend for itself.

China’s case is rather interesting. On the one hand, the Chinese hate unpredictability and therefore will be loath to seeing Trump in the White House. On the other hand, Trump will be totally free of ideology and will be ever ready to do a deal. The Chinese may welcome this aspect of a Trump presidency. They must already be preparing a list of products and services that they can import from Trump constituencies and looking at potential investments they can make in Trump companies and properties.

ASEAN will be most worried about a Trump presidency, also because it is hard to predict where Sino-American ties will be headed. This probably holds true for Japan and ROK as well. Alliances such as AUKUS and the Camp David security pact between US, Japan and ROK will face unpredictability.

What of India? While most aspects of our relationship with the US can be handled by following a policy of forbearance and resilience, it is the trade, investment and IPRs dossier that may prove thorny and intractable. Trump is a classic “Luddite” when it comes to trade ties and he will harp on the trade deficit with India ad nauseum. Moreover, how Trump goes about dealing with China will have implications for our own ties with China. Trump’s unsophisticated and raw approach to foreign and security policy means that we must be ready for a weakened Quad, heightened criticism of India in the area of IPRs and a more disruptive G20. UN is likely to be a low priority for Trump. Conversely, the personal chemistry between Trump and Modi should be a real plus. Trump is also less likely to focus on democratic backsliding and absence of religious freedom worldwide.

Lots of people may construe the above as not so good news. But Trump’s age makes it certain that this will be his last term. There is only so much one can do or not do in 4 years’ time. So, just consider it a roller coaster ride and remember to wear your seat belt!

For the uninitiated, “The World Crisis” is a magnum opus written by Winston Churchill published in six volumes and gives a detailed account of the First World War. As his American biographer William Manchester said: Churchill’s masterpiece “The World Crisis” begins with the Great War’s origins in 1911 and ends with its repercussions in the 1920s. Magnificently written, it is enhanced by the presence of the author at the highest councils of war and in the trenches as a battalion commander. It was often said that the book was Churchill’s autobiography disguised as a history of the Universe. With Kissinger dead, it will be interesting to know who might write a magnum opus for the present period in world history like the one Churchill wrote. Perhaps a well-known figure from the Orient for a change?

I mention this not because I am a fan of Winston Churchill (it is hard for any Indian to be that) but because the conditions characterising the world order today resemble most the period obtaining prior to and during World War I. Indeed, it is possible to argue that the present period is much worse since most parts of the world are in a state of profound of crisis.

We begin with Latin America if only because it is often a forgotten continent when you happen to reside in India. Argentina is bang in the middle of a politico-economic crisis (when has Argentina been without one, you might ask) with a maverick leader who has just assumed office. Venezuela and Guyana are at each other’s throat over a piece of territory. Overall, Latin America and Caribbean will see their economic situation determined by actors outside the region, with resultant loss of agency.

US presents the million dollar question. Will Trump trump (pun absolutely intended) Biden? All signs point to it barring unforeseen events such as Biden voluntarily stepping down in favour of a younger Democratic nominee or Trump getting into such a legal quagmire that effectively prevents him from running and holding office. How does the world prepare for Trump 2.0? What should NATO, EU and Ukraine do by way of contingency planning? How should China prepare for a Trump administration? More significantly, Middle Powers around the world such as India, Japan and ASEAN will wonder what is in store for them. The policy planning outfits of Foreign Offices around the world have their hands full and must be churning out briefs after briefs.

Europe is already in full blown crisis thanks to Ukraine. The war in Ukraine shows no sign of abating. But the advantage seems to be shifting to Russia. Trump has already said he can resolve the Ukraine issue in 24 hours. Zelensky has responded to it bravely, but deep inside EU and Ukraine must be terribly worried about a Trump presidency. Russia may consider itself a fortunate beneficiary of a Trump administration, but who knows?

The Middle East is up in flames and enough has been written about it. A wider regional war seems possible, if not probable. Some would argue the wider war is already under way. The question is how Trump will deal with Israel. There was a Trump peace plan officially titled: Peace to Prosperity: A vision to improve the lives of of the Palestinian and Israeli people. This was rejected by Palestinians earlier and the peace plan demanded virtually no concessions from Israel. Would Netanyahu prefer to deal with Trump rather than Biden? It would certainly seem so.

Africa has a busy election calendar in 2024, with 19 countries slated for presidential or general elections. Two-thirds of these elections are packed into the last quarter of the year. Half of the elections are uncompetitive and will see incumbents triumph. But it is the economic situation that should worry the world. South Africa is expected to barely grow in 2024 and Nigeria may grow by a little over 3 per cent. However, poverty will persist and the achievement of SDGs actually hinges on Sub-Saharan Africa.

Will the Indo-Pacific see conflict in 2024? This is the one thing that will matter most not just for countries in Asia but also the world, since Asia is now the main driver of global economic growth. The answer to the question above will depend primarily on China. With the US distracted by domestic politics in an election year, the EU distracted by Ukraine, Taiwan having just elected an “independent-minded” leader and the Middle-East up in flames, will the Chinese leader Xi Jinping be tempted by adventure in South China Sea or the Taiwan Strait, or alternatively, will he hunker down to put China’s house in order.

India continues to find itself in a geopolitical sweet spot. Subject to brent crude not going through the roof, the new Government in India which takes office in May should usher in deep and difficult reforms in Land, Labour and Agriculture which have been elusive thus far. The other challenge is to make economic growth and prosperity more inclusive so that everyone has a stake. 2024 will therefore not merely pose challenges but also present significant opportunities which must be grabbed with both hands. After all, fortune favours the brave.

It is now clear in hindsight that when the Hamas carried out the horrific attacks in Israel on 7 October 2023 , it had certain strategic objectives in mind. Among them, the most important was to draw attention to the Palestinian issue by establishing a correlation between Israeli responsibility and the lack of fulfilment of Palestinian aspirations. In retrospect, it is hard to avoid the impression that Israel walked right into the trap set for it. The right thing for Israel would have been to carry out a proportionate military response and show the Hamas truly for what they are: a bunch of terrorists. But by conflating Hamas with all Palestinians, Israel may have committed a strategic error from which there is now no going back.

Any hope therefore that the Israeli response will be confined to specific Hamas targets in Gaza and limited in duration, turned out to be a pious hope by the international community. Israel’s response was not just massive and indiscriminate; it also demonstrated scant regard to civilian casualties, particularly involving women and children. Some estimates put this figure in Gaza at over twenty thousand civilian deaths. International condemnation was quick in coming. Even the US, Israel’s staunchest ally, rebuked Israel but to no avail. In fact, Israel within days of the incursion in Gaza, also carried out incursions in the cities of West Bank which saw increase in army and settler violence leading to the deaths of at least 288 Palestinian civilians.

While Israel was bombing the hell out of Gaza, beginning 17 October 2023 militias allegedly backed by Iran  initiated a coordinated series of more than 115 attacks on American military bases  and assets in Syria  and Iraq. Within days of the Hamas attacks and the Israeli response therefore, there were signs that this will not be confined to Gaza.  From 27 October 2023 to 4 January 2024, the US carried out multiple airstrikes in both Syria and Iraq in locations such as Abu Kamal, Deirez- Zor, Abu Gharib and Kirkuk. On 4 January 2024, the US military carried out a drone strike on the headquarters of Harakat al Nujaba  in Baghdad, with the specific target being Mushtaq Talib al-Saidi , a senior leader held responsible for orchestrating attacks against US forces. In response, the Iraqi PM  announced on 5 January 2024 that the Iraqi government would begin a process towards the removal of the U.S.-led international military coalition from Iraq.

In addition to the above, Lebanon entered the fray willy-nilly when Israel allegedly killed the top deputy commander of Hamas on 2 January 2024 in a suburb of Beirut through a drone attack. This part of Lebanon is Hezbollah territory and its leader Hasan Nazrallah vowed revenge on Israel. True enough on 6 January 2024, Hezbollah fired dozens of rockets (62 missiles to be precise) at an Israeli air surveillance base and said this was merely an initial response to the killing of the Hamas leader by Israel. It is hard to see either Israel or Hezbollah calming down.

As if all this were not enough, Iran suffered a deadly bomb attacks in a crowded market which killed 84. While the Islamic State claimed responsibility, some in Iran pointed a finger at Israel and the US. Iranian authorities vowed revenge.

So, the areas affected so far by the conflict in Gaza are: West Bank, Israel itself, Iran, Lebanon, Syria and Iraq. If this is not regional conflagration, what is? The maritime theatre is also badly affected with Red Sea now a no-go zone for shipping giants such as Maersk which have decided to take the longer route via Cape of Good Hope. Except that the situation is neither good nor one of hope!

It has been customary for sometime now to label every year gone by as “Annus Horribilis”. 2023 was, alas, no different. As if the damage done by the Pandemic first and then the war in Ukraine was not enough, an additional theatre of war has now been added to the catalogue: the Israeli ground invasion of Gaza following the horrific attacks by Hamas on October 7.

In this scenario of global strategic turbulence, what are India’s main challenges in 2024? Plenty, one would say and our diplomacy will be tested to the limit.

The Israeli invasion of Gaza has the potential to adversely impact India’s geostrategic and economic environment, perhaps even more than the war in Ukraine. This is mainly, but not exclusively, on account of oil and what can happen to the price of Brent crude if the war in Gaza continues for an indefinite period and worse, expands geographically. There is the very real possibility of a wider conflagration in the Middle East, a nightmarish scenario for India with over 8 million citizens working in the Gulf states and the sea lanes of communication being choked, as we are now seeing with Houthi attacks in the Red Sea area. The Indian economy has recovered strongly but if oil prices go through the roof, all bets are off.

As for Ukraine, it is a pity that India’s words were ignored, by both the West and by Russia. India argued for a diplomatic solution right from the beginning. It is now incontestable that there was a possibility of a diplomatic solution as far back as March 2022, but this was vetoed by the US /UK, with implicit approval from then EU. What a grave error that has turned out to be, only time will tell. Equally, PM Modi’s advice in September 2022 to President Putin that ” today’s era is not one of war” was not followed by Russia in word and spirit. There are now ominous indications that the war will spill over into 2024 and may be even 2025.

India will need to find a modus vivendi with China in the medium to long term. The present status quo suits neither country, but it will begin to hurt us more as time passes. This is not to say we should cave in especially on our core interests , but perhaps to find a way to strongly convey to China that if it wants us to respect their core interests, then it will need to reciprocate and do the same with India’s core interests. We need to keep an eye on the future trajectory of Sino-American ties, since that holds strategic implications for our own relations with China.

It is in the fundamental nature of Indo-American ties that it will perhaps never be free of irritants and this is something both countries need to be conscious of. The trick is to manage the irritants in a way that allows the substantive relationship to move forward. For this to happen, India will have to engage not just with the State Department, Pentagon and the White House but also with Congressional Caucuses, the media and the think tank-strategic community. Easier said than done, but a job that is necessary from our perspective. Equally, the US must respect India’s sensitivities as much as they expect us to respect theirs.

Our ties with key European countries such as France, Italy and Germany are free of problems, but they need political impetus to break out of the current mould and grow exponentially, rather than incrementally as they do at present. Two things seem important in this regard: India must negotiate hard but negotiate pragmatically so as to conclude the FTA with EU as early as possible. Second, the India-EU Trade and Technology Council must meet more often and be outcome oriented. The EU may be distracted by Ukraine, but it is in our abiding interest to do both of the above.

2024 has already been declared as the year of elections with more than half of humanity going to polls. Our own election, as always, will be of vital importance. In addition, the one in the US and the ones in our neighbourhood (Bangladesh and Pakistan) will be watched closely in India.

India’s ties with Russia are crucial. And it was great to see our EAM Dr S. Jaishankar make a trip to Russia this week to iron out the wrinkles in our relations that have emerged post the war in Ukraine. Foreign Minister Lavrov saying Russia is respectful of India’s decision to diversify defence supplies and express readiness to “make in India” is very welcome. It is completely in our interest if Russia acquires the strategic space that it needs vis-a-vis China and India must do its bit in this regard.

India needs huge foreign direct investment for infrastructure, for combating climate change and for its social sector. Three things are worth considering in this regard. It does not make much sense for India to oppose the plurilateral discussions on Investment Facilitation that are currently on in the WTO. We must join these. Second, India should aim to conclude a top class investment treaty with EU for which the negotiations are ongoing. A good investment treaty with the EU can provide a massive boost to foreign direct investment. Last but not least, when the new Government comes to power in India, deep and difficult reforms in Land, Labour and Agriculture (among other things) must be done by taking the bull by the horns. Whether India can become a 10 trillion dollar economy and whether we can effectively combat poverty depends substantially on the above. This will also enable the transition of India from a balancing power to a leading power. (Read my latest Book “India’s Moment” by Harper Collins to know more.)

The World will be more of the same in 2024 as it was in 2023. Only more unpredictable, more unstable and more inscrutable. In response, India must basically hunker down, set its internal economic house in order and insulate itself as much as possible from the deleterious impact of the goings-on. Be prepared for more “Gray Rhinos” if not “Black Swans”!

In recent days, attacks on commercial shipping vessels particularly in and around the Red Sea have shown a marked increase. Two immediate repercussions are being felt. One, shipping companies have been forced to avoid the Red Sea route involving Bab el-Mandeb and take the more circuitous route involving Cape of Good Hope. This has obviously led to delays in commercial freight. Two, the costs of freight and shipping are rising not just because of delays but also because of increased insurance premiums.

This comes at a particularly bad time for world economy. Global economy was finally showing signs of emerging from a covid-led recession and tepid recovery was taking roots. 30% of global container traffic and billions of dollars of traded goods and supplies pass through the Red Sea every year, meaning that delays referred to above can affect oil prices, the availability of electronics and other aspects of global trade. This is something the world can do without.

So, who is carrying out these attacks and why now? It is generally believed that the Houthi rebels based in Yemen are behind the attacks. Who are these Houthi rebels? The Houthi movement is an Islamist  political and military organization that emerged from Yemen in the 1990s and is predominantly made up of Shias with their namesake leadership being drawn largely from the Houthi tribe. They are in a battle involved with the Yemeni Government and with Saudi Arabia. The US believes Iran is behind the Houthi attacks providing the latter with military intelligence and tactical weapons. But Iran has vehemently denied this and said the Houthis are acting on their own, considered implausible by many. In effect, the Houthi rebels have used sophisticated UAVs (Unmanned Aerial Vehicles), drones and ballistic missiles to attack shipping vessels. These are not your customary Somali pirates, that is for sure!

Why now? Well, the Houthi rebels say that this is in retaliation to Israel’s bombardment of Gaza following the horrific Hamas attacks against Israel on October 7. But it is hard to specifically target Israeli ships what with flags, ownership and registration complicating the identity of shipping vessels these days. So a number of shipping vessels have come under Houthi attack.

If the attacks continue indiscriminately, it is hard for the international community to turn a blind eye to these Houthi rebel actions. The US has launched “Operation Prosperity Guardian” to deal specifically with the Houthi attacks. But the operation is handicapped by the fact that both Saudi Arabia and UAE, key countries in this regard, have not signalled willingness to participate yet in this American-led operation. Even European countries like France, Italy and Spain have been reluctant to participate in the purely American-led operation, saying they prefer to function under NATO command. The US so far has indicated that it will implement “Operation Prosperity Guardian” through its Fifth Fleet under the Task Force 153, as part of the Combined Maritime Forces based in Bahrain. It is worth noting that India has recently become part of the Combined Maritime Forces structure based in Bahrain.

Whichever way one looks at it, the Houthi Rebels cannot be allowed to hold the Red Sea maritime route (a global good) to ransom through their attacks on shipping vessels. At a time when there is a proliferation of plurilateral groupings centred on maritime security, it would be supreme irony if the international community cannot get its act together on keeping the sea lanes of communication open, free and unimpeded for vital global commerce.

Postscript:

At the time of posting this, BBC reports that a ” Liberia-flagged, Japanese-owned and Netherlands-operated” chemical tanker was hit by a drone launched from Iran ( according to the Pentagon) in the Indian Ocean, some 200 nautical miles from the coast of India. No reports of casualties. 

If proved this is from Iran, it is certain to ratchet up tensions in the maritime theatre, as if the land wars in Ukraine and Gaza are not enough!

As with all COP meetings, the COP 28 meeting in Dubai also ran overtime and finally agreed on consensus language relating to fossil fuels: the bugbear of all climate activists. The main outcome of the COP 28 may be summarised as follows:

(1) Mention of fossil fuels for the first time which has caused people to go ecstatic. Strictly speaking, fossil fuels comprise coal, oil and gas. However, Coal has been the subject of discussion in past COPs so it is fair to say that Oil and Gas find mention for the first time in a COP meeting.

(2) Phase-down of Coal was agreed upon in Glasgow (2021) with India bang in the middle of the controversy surrounding it. But the ”UAE Consensus” now talks of “transitioning away” from fossil fuels in a just, equitable and orderly manner. There is a technical difference between “phasing-down” and “transitioning away”. The former signals an end goal; the latter is a notional undertaking.

(3) More problematic for countries like India is the stated goal of achieving global net zero by 2050. India has already announced that it will aim to do so by 2070. There is simply no way India can revise forward its already announced target in this regard. So developed countries will have to go “net negative” if this goal of net zero by 2050 along with the increasingly chimerical objective of limiting global warming to1.5 degree centigrade is to be met by the world.

(4) China and US, the two biggest GHG emitters on this planet can go around doing what they have been doing: China burns more Coal than the entire world put together and the US is the largest producer of oil and gas in the world. China shows no sign whatsoever of fulfilling the Glasgow promise of phasing-down Coal. US will continue to produce oil and gas for the foreseeable future with an unknown transition period.

(5) The Loss and Damage Fund was operationalised but with highly inadequate funds. Alliance of small island states (AOSIS) are known to be unhappy at the UAE consensus document. Indeed many of them were not even in the room when the document was gavelled. They will now have to be enticed with financial incentives.

(6) India can be justifiably happy that the Delhi G20 Summit declaration language of tripling global renewable energy capacity and doubling the rate of energy efficiency by 2030 was reflected in the final COP 28 document.

(7) On the crucially important issue of climate finance, there is a declaration on a Global Climate Finance Framework but little else. Lots of good intentions in the UAE consensus document but it is fair to sat that the developing countries are yet to see the colour of the money.

This is one of the COP meetings where India appears to have kept a low profile. This is smart diplomacy. In the past, India has sometimes taken a needlessly high profile or allowed itself to be bracketed with China which is a far bigger producer of GHG emissions than India will ever be. By focusing on climate justice and equity, India made its case softly but firmly in Dubai. The language in the final document accepts the need for equity and fairness.

India can certainly live with the so-called UAE consensus document. Some caveats however. We must emphasize that energy transition in countries such as India must be just, orderly and equitable, as suggested in the final document. Especially in the case of Coal, India has to work this out carefully. Second, while the world appears to favour a net zero by 2050, individual countries like India must be given flexibility in this regard. Last, on Methane a difference must be made between industrial emissions and those emanating from Agriculture. 70 percent of India’s Methane emissions are from Agriculture. COP 28 talks of accelerating and substantially reducing non-carbon-dioxide emissions globally, including in particular methane emissions by 2030. Agriculture is politically sensitive and India has an uphill task in this area.

It is important to underscore that COP declarations are non-binding and only provide broad guidance. At the end of the day, it is for individual countries to implement the general pledges made at COP meetings through what is known as Nationally Determined Contributions (NDCs). The next round of strengthened NDCs is due in 2025. That is when we will know whether the world is on track to achieve the overall goal of limiting global warming to 2 degree centigrade (1.5 degree centigrade is already a pipedream) or whether this COP was all meaningless rhetoric.  In particular, the NDCs of the two big polluters, namely China and US, when they come out in 2025 will be closely watched by the world. India too will come under pressure and must already start preparing the ground for the next round of NDCs.

It has been stated, somewhat ambitiously, that the COP 28 meeting is the beginning of the end for fossil fuels. The jury is still out on that.

Coming close on the heels of the summit meeting between the Chinese leader Xi Jinping and American President Joe Biden in California last month, the Chinese supremo received the two EU leaders, namely, EU Council President Charles Michel and EU Commission President Ursula von der Leyen in Beijing on 7 December, 2023. It was the 24th annual EU-China summit meeting.

There was no Joint Statement issued after the above meeting, perhaps a sign of the times. There was no Joint Statement after the Biden-Xi meeting in California either. One inference may be that ties between the major powers are so fraught that the very fact of their meeting at summit level must be welcomed as a positive and only achievement. Differences appear tough to resolve, so the maximum that can be expected is to “manage” these differences by good optics.

From press reports it is clear what EU conveyed to Xi Jinping. The Chinese readout from the Ministry of Foreign Affairs, in contrast, is general and rhetorical.

EU seems to have emphasized the following in its message to China:

(1) While China is EU’s most important trading partner, the current trade deficit of about Euros 400 billion is unacceptable for EU. Chinese response was to say that it was not deliberate Chinese trade policy to have a trade surplus! EU, on the other hand, believes this is directly attributable to “overcapacity” of the Chinese manufacturing industry and to Chinese barriers faced by EU companies. EU said it had tools at its disposal to deal with this but that it would prefer a mutually acceptable solution. EU stated the idea was not to decouple from China but to de-risk!

(2) Digital economy was stressed and EU sought easing of cross border data flows.

(3) Cooperation in the context of the ongoing COP 28 climate conference was emphasized.

(4) EU welcomed the resumption of Human Rights Dialogue in February 2023 and reiterated its deep concerns of the human rights situation in China especially in Xinjiang, Tibet and Hong Kong.

(5) While EU reiterated its One China policy, it did express concern about the tension in the Taiwan Strait and at unilateral measures to change the status quo in the South and East China sea.

(6) EU asked China to put pressure on Russia to stop the aggression in Ukraine. EU reminded China of its special responsibility as UNSC P-5 Member to uphold the UN Charter and the sovereignty and territorial integrity of Un member states. On Ukraine, China said a ceasefire must be instituted asap. The European Union wants Beijing to use its influence on Russia to stop the war, and urged Xi to stop Chinese private companies exporting European-made dual-use items to Russia. Brussels initially left these Chinese firms off its latest Russia sanctions package unveiled last month, but could just as easily change course. China’s response to all this was that Russia is a sovereign and independent country and that Putin took decisions based on its national interest!

(7) On the conflict in Gaza, the only thing both sides agreed was their joint commitment to a two-state solution.

For China’s part, the summit meeting with the EU is really part of a diplomatic strategy to promote a multipolar world. China’s interpretation of this is to encourage the EU to be an “independent actor” and practice “strategic autonomy”. It is clear that China expects this independence and strategic autonomy to be practiced by the EU vis-a-vis the US. It also helps China that there is no consensus among the 27 member states on a unified policy, much less strategy, with regard to China. Italy for instance has announced that it is withdrawing from the Belt and Road Initiative, a serious setback for China. China’s spokesperson at the Foreign Ministry said that China firmly opposes smearing and undermining cooperation in building the Belt and Road Initiative, and opposes stoking bloc confrontation. This is puzzling since Italy’s decision was sovereign and based on its national interest.

Be that as it may, the Chinese side called the talks candid, frank, in-depth and constructive. Xi reportedly said that China and the EU should handle their differences through dialogue and warned the EU against confrontation with China adding that the two sides should not regard each other as rivals because of different systems. Cooperation rather than confrontation was emphasized by Xi. But the EU sees China not just as a partner for cooperation but an economic competitor and a systemic rival. It is difficult to square this circle.

The EU may not sound as belligerent as the US towards China, but deep inside it does have the same concerns about China. For instance, the EU has begun subsidy investigation against Chinese exports of electric vehicles, thereby drawing China’s ire. EU has also put in place restrictions on export of sensitive European technology to China, which the latter believes are unjustified.

Most importantly, Xi Jinping is reported to have said that “all kinds of interference” must be eliminated from EU-China ties, a not so subtle reference to the influence of the US and the Transatlantic Alliance. The Chinese side in its readout only stressed the following: EU does not wish to decouple from China, that EU reiterated the One China policy and the fact that EU desired to have close communication and coordination with China, uphold multilateralism and the purposes and principles of the U.N. Charter, and work for the settlement of regional hotspots including Ukraine and the Middle East. Really motherhood and apple pie kind of language.

Last year in April 2022 after a similar EU-China summit, EU High Representative for foreign policy, Josep Borell, said that it turned out to be a “dialogue of the deaf”. It is hard to see how this year’s EU-China summit can be described any differently.