Latest news with #SoumyaBhowmick
Indian Express
25-07-2025
- Business
- Indian Express
India-UK FTA offers clear benefits, but long-term impact depends on execution and political will
Written by Soumya Bhowmick On a warm July afternoon at Chequers, Prime Ministers Keir Starmer and Narendra Modi finally signed the Comprehensive Economic and Trade Agreement (CETA), which negotiators from London and New Delhi have been pursuing since 2022. The deal is the largest the UK has sealed since Brexit and India's first with a G7 economy in over a decade, marking the end of a stop-start process that spanned four Indian budget cycles and two British prime ministers. For London, the agreement is intended to deliver the 'Global Britain' dividend that has eluded successive Conservative governments since the United Kingdom departed from the European Union. Labour's new leadership can now point to preferential access to a market of 1.4 billion people for sectors ranging from premium spirits to cutting-edge aerospace. At the same time, India gains early access to European markets just as its export-led 'Make in India for the World' strategy accelerates. Strategically, the pact aligns neatly with the wider India–UK Roadmap 2030, which already encompasses cooperation on climate action, critical minerals, and maritime security, providing both capitals with a rules-based alternative to supply-chain dependence on China. At the heart of CETA lie steep tariff cuts. Average Indian duties on British goods drop from around 15 per cent to just 3 per cent on 90 per cent of tariff lines, with the eye-catching reduction on Scotch whisky — from 150 per cent today to 75 per cent immediately and 40 per cent over ten years. High-end cars arriving from the UK will see levies plummet from well over 100 per cent to 10 per cent within a quota of 25,000 units, and British salmon, chocolates, and cheese will enter on near-zero tariffs. In return, the UK eliminates duties on almost every Indian export, from labour-intensive textiles and leather to gems, generic pharmaceuticals and marine produce. While India–UK trade currently represents a relatively modest share of each country's overall external sector — accounting for approximately 2.4 per cent of the UK's total trade and about 1.8 per cent of India's combined merchandise and services trade as of 2024 — the bilateral relationship has demonstrated consistent upward momentum. Investment linkages are equally significant, reflecting a mutually reinforcing economic interdependence supported by a dynamic ecosystem of transnational firms. Against this backdrop, the proposed trade agreement carries both symbolic and material promise. The UK Treasury anticipates an annual GDP increase of approximately £4.8 billion by 2040, alongside investment and export gains valued at £6 billion. Concurrently, India's Ministry of Commerce projects a potential expansion of up to US$34 billion in bilateral trade over five years. Though these figures may appear modest in terms of aggregate GDP — translating to less than half a percentage point of output for either country — they hold considerable significance at the sectoral and regional levels. Targeted tariff reductions and regulatory alignment are poised to deliver significant benefits for key constituencies, including Scottish distilleries, Midlands car manufacturers, Tirupur knitwear exporters, and India's rapidly growing processed food and marine sectors. Still, the agreement leaves several concerns unaddressed. Delhi had lobbied strongly for a more expansive 'Mode 4' mobility framework to facilitate the movement of its IT professionals — seeking concessions on par with those granted to Australia. However, Britain's domestic immigration politics constrained the scope of the offer. Meanwhile, Britain's financial and legal sectors are frustrated by the absence of the preferential access they enjoy under the UK-Australia deal, just as Indian agricultural exporters continue to face rigorous sanitary and phytosanitary checks on goods like mangoes, chillies, and seafood. Crucially, the bilateral investment treaty, intended to anchor investor-state dispute settlement provisions, remains under negotiation, leaving key protections undefined. The agreement's implementation is also not immediate — it must first pass through parliamentary scrutiny in Westminster and receive Cabinet approval in New Delhi — a process that could be delayed if domestic lobbies or legislators seek exemptions. India was also unsuccessful in securing an exemption from the UK's forthcoming Carbon Border Adjustment Mechanism, which could result in future tariffs on carbon-intensive exports. Moving forward, several critical dimensions merit attention: Whether subnational actors such as Maharashtra or Gujarat design targeted incentive frameworks to optimise access to UK public procurement markets; how India's existing goods trade deficit with the UK shapes domestic political discourse, particularly if imports of Scotch whisky or luxury vehicles expand significantly; and whether a potential digital trade protocol can facilitate UK fintech integration with India Stack's public digital infrastructure, contingent upon India's willingness to revisit data localisation policies. Finally, the India–UK trade pact may not constitute a transformational macroeconomic breakthrough, but it holds considerable geopolitical significance and commercial relevance across a diverse array of sectors. The substantive value of the agreement will depend less on its formalisation at Chequers and more on the efficiency of its ratification processes, the robustness of regulatory implementation, and the extent to which both governments can resist domestic protectionist pressures that risk diluting the intended liberalising thrust. The writer is a Fellow and Lead, World Economies and Sustainability at the Centre for New Economic Diplomacy (CNED) at Observer Research Foundation (ORF)
News18
17-07-2025
- Politics
- News18
Dalai Lama Flashpoint Is Part Of ‘Managed Rivalry', Won't Derail India-China Relations
The Dalai Lama's blunt announcement about continuing with the tradition of reincarnations without letting China meddle in it will spike tensions temporarily, but not break ties India and China's relations make for the most heated headlines. With a war in the past and at least three violent skirmishes in the last 10 years, the two nations seldom create good news. But behind closed doors, top officials both in India and China have lately started saying something unusual. They say the tiger-dragon relations have never been as good as they are now. This makes one believe that the Dalai Lama's blunt announcement about continuing with the tradition of reincarnations without letting China meddle in it will spike tensions temporarily, but not break ties. The Dalai Lama said in his speech: 'As far back as 1969, I made clear that concerned people should decide whether the Dalai Lama's reincarnations should continue in the future. I also said, when I am about ninety, I will consult the high Lamas of the Tibetan Buddhist traditions, the Tibetan public, and other concerned people who follow Tibetan Buddhism, to re-evaluate whether or not the institution of the Dalai Lama should continue. Over the last 14 years leaders of Tibet's spiritual traditions, members of the Tibetan Parliament in Exile, participants in a Special General Body Meeting, members of the Central Tibetan Administration, NGOs, Buddhists from the Himalayan region, Mongolia, Buddhist republics of the Russian Federation and Buddhists in Asia including mainland China, have written to me with reasons, earnestly requesting that the institution of the Dalai Lama continue. In particular, I have received messages through various channels from Tibetans in Tibet making the same appeal. In accordance with all these requests, I am affirming that the institution of the Dalai Lama will continue." Some think this could make things go ballistic. But it most likely will not shake up relations. Rising trade, growing diplomatic cooperation, and a world thrown into uncertainty but the US President's mercurial diplomacy will keep India and China invested in each other. Undoubtedly, China will keep using Pakistan (and possibly Bangladesh) as irritants against India and try to destabilise it internally by funding and weaponising dissent. India will also firmly stand by the Tibetan spiritual leadership in exile, make friends with China's enemies in the neighbourhood, and push the Quad agenda. But it would be done within the limits of what Soumya Bhowmick describes in his ORF Foundation piece as a 'managed rivalry'. India's evolving engagement with China reflects a strategy of managed rivalry—balancing selective cooperation with strategic hedging. Rather than decoupling, India is recalibrating its economic and diplomatic posture by diversifying partnerships, securing resilient supply chains, and reducing dependence on China, especially as Beijing deepens ties with Pakistan. This marks a shift from reactive diplomacy to a tactically layered approach, where competition is contained without collapsing ties. The growing trade between the two nations is perhaps the most robust bulwark against direct conflict. In the first quarter of 2025, India and China's bilateral trade swelled to $136 billion, marking a 9.2 per cent year-on-year growth. Although this trade is heavily skewed in favour of China, Beijing remains New Delhi's second-largest trading partner, with the US at number one. At the CNN-News 18 Rising Bharat Summit 2025, foreign minister S Jaishankar said India and China were discussing collateral issues related to Covid-19, direct flights, and the resumption of the Kailash Mansarovar Yatra. The India-China border agreement on October 21, 2024, led to the first meeting since 2019 between Indian PM Narendra Modi and Chinese President Xi Jinping on the sidelines of the BRICS summit. Military disengagement in Ladakh, regular dialogue on border management, and the rebuilding of bilateral ties followed. Jaishankar met his Chinese counterpart Wang Yi in November 2024 and discussed resuming talks of a religious pilgrimage in Tibet, data sharing on trans-border rivers, direct flights between India and China, and media exchanges. The two defence ministers, Rajnath Singh and Admiral Dong Jun, also met in November 2024. In December, NSA Ajit Doval met Wang for border talks. Then came foreign secretary Vikram Misri's Beijing visit in January 2025. India wants to move relations to a 'more stable and predictable path', while Beijing has called for the need to be 'partners rather than rivals'. The vagaries of a Trump-ian world—tariff wars and unpredictable diplomacy over international conflicts—is another reason to deepen ties with each other instead of scuttling what exists. Which is why the two nations will most likely cross the river of bile over the Dalai Lama episode and safely reach solid ground soon. First Published: July 02, 2025, 15:09 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Indian Express
07-07-2025
- Business
- Indian Express
BRICS signals strong Global South, less dependence on West
Written by Soumya Bhowmick Gathered in Rio de Janeiro on July 6-7, leaders of Brazil, Russia, India, China, and South Africa issued a declaration that signals perhaps the most ambitious turn yet in BRICS's evolving journey. At the heart of the BRICS Rio Declaration 2025 lies the conviction that existing international institutions — from the UN Security Council to the IMF and World Bank — no longer reflect the geopolitical and economic weight of emerging economies. BRICS leaders seek reforms that grant the developing world a greater voice, aiming not to dismantle the global order, but to modernise it for a multipolar reality. Even before its latest expansion, the bloc collectively represented over 40 per cent of the world's population and a significant chunk of global GDP. With the addition of new members such as Iran, Egypt, Ethiopia, and the UAE, BRICS is evolving into an even more formidable economic coalition. The inclusion of oil giants and mineral-rich nations enhances its leverage over energy markets and critical supply chains — a clear signal that the Global South aims to shape, rather than react to, global economic forces. The Rio Declaration also placed a strong emphasis on inclusive growth, sustainable development, and digital cooperation. BRICS leaders championed climate action that doesn't stifle development, stressed the importance of women's digital inclusion, and set new targets for knowledge sharing in AI, critical minerals, and green technology. Looking ahead to COP30 in November, also hosted by Brazil, the BRICS nations endorsed the Tropical Forest Forever Fund (TFFF) as a promising tool to secure sustained funding for protecting tropical forests. 'With the collective scale of the BRICS, we will combat the climate crisis while making our economies stronger and fairer,' the declaration affirms. Reducing dependence on the West is a central thread in the BRICS 2025 vision. The bloc is pushing initiatives such as trading in local currencies, integrating payment systems outside dollar-dominated networks, and strengthening the New Development Bank (NDB) to serve as an alternative source of funding. Proposals for a BRICS cross-border payments system and the expansion of the Contingent Reserve Arrangement also reflect a desire for financial resilience, offering a cushion against Western sanctions and economic volatility. Amid this surge of BRICS ambition, India has emerged as both a strong advocate for the Global South and a cautious voice determined to keep BRICS from becoming overtly confrontational toward the West. On the one hand, BRICS offers New Delhi a powerful platform to amplify its demands for UN reform, greater representation in global governance, and development finance tailored to emerging economies. The group's solidarity on counterterrorism (it condemned the Pahalgam terror attack), infrastructure finance, and digital cooperation aligns closely with India's national interests. On the other hand, India's deepening ties with the West — particularly the United States, Europe, and Japan — shape its strategic calculus. New Delhi has grown increasingly intertwined with Western partners, sharing technology, engaging in defence cooperation, and conducting goods trade worth approximately $130 billion with the US alone in 2024. In areas such as semiconductor manufacturing, renewable energy, and digital infrastructure, India views the West as a vital partner in bolstering its economic growth and strategic autonomy. Additionally, India's complex relationship with China remains a significant undercurrent within BRICS, marked by lingering mistrust despite recent diplomatic overtures following their 2020 border clashes. While bilateral trade has surged, India's substantial trade deficit highlights economic asymmetry and dependence on Chinese goods, prompting New Delhi to tighten scrutiny in sensitive sectors, such as technology. Strategic tensions extend beyond commerce, with China's ties to Pakistan, territorial disputes over Arunachal Pradesh, and Beijing's regional infrastructure projects fuelling India's wariness of China's influence both bilaterally and within BRICS. Meanwhile, Chinese President Xi Jinping's absence from the Rio summit, along with the diverse geopolitical stakes of new members such as Iran and Saudi Arabia, highlights the internal complexities and delicate balance that BRICS must navigate to maintain cohesion. The Rio summit concluded with a strong sense of purpose, as BRICS leaders unveiled initiatives such as expanded financing tools and digital cooperation frameworks aimed at giving the Global South greater agency over its future. Yet significant challenges remain in turning these plans into reality, as ambitions such as trading in local currencies, building alternative financial networks, and undertaking new infrastructure projects require not only political consensus but also technical capacity and confidence among members. Finally, as India prepares to chair BRICS in 2026, its diplomatic skills will be crucial in steering the bloc toward tangible outcomes rather than ideological posturing, aiming to transform BRICS into a practical engine for development, with a focus on projects spanning African infrastructure to digital public goods. For India, the challenge lies in harmonising its multipolar aspirations with its deep ties to the West, ensuring that BRICS serves as a bridge to a fairer world rather than a divider in global geopolitics. The writer is a Fellow and Lead, World Economies and Sustainability at the Centre for New Economic Diplomacy (CNED) at Observer Research Foundation (ORF)
Indian Express
30-06-2025
- Business
- Indian Express
India's trade strategy with China will have to rely on a ‘managed rivalry'
Written by Soumya Bhowmick India's trade relationship with China sits at the intersection of economic necessity and national security anxiety. While bilateral commerce continues to thrive in volume, it remains fundamentally distorted by strategic asymmetries. India's widening trade deficit, its reliance on Chinese technology inputs, and Beijing's growing support for Islamabad have sharpened the dilemma facing Indian policymakers: How to engage economically without compromising sovereignty and security. In response, New Delhi is reimagining its economic diplomacy through a 'China-plus-one' playbook — anchored in diversification, industrial policy, and regional recalibration. Bilateral trade remains substantial between the two countries, but it is significantly imbalanced. In FY2024–25, India's two-way merchandise trade with China reached approximately US$127.7 billion, making China India's second-largest trading partner after the US. However, this came at the cost of a record trade deficit of US$99.2 billion — the highest on record — highlighting deep structural dependencies in India's economy, particularly in the technology and pharmaceutical sectors. In light of these dynamics, Indian policymakers have adopted a cautious approach. Under a policy introduced in 2020, all foreign direct investment (FDI) from China and other countries sharing land borders with India must obtain prior government approval. In April 2025, Commerce Minister Piyush Goyal reiterated that India 'does not intend to encourage' Foreign Direct Investment (FDI) from China. By the end of 2024, Chinese firms accounted for only about 0.37 per cent of India's total FDI inflows. While easing these restrictions in non-sensitive sectors such as solar energy and batteries may be helpful, the prevailing geopolitical climate has stalled such proposals. Instead, India has intensified scrutiny of Chinese technology and infrastructure investments, banned dozens of Chinese apps, and maintained strict regulatory oversight over the telecom and electronics sectors. China's overt support for Pakistan has further deepened Indian scepticism. Beijing's financing and arming of a country India considers a direct security threat has amplified concerns about the strategic costs of deeper economic ties. In response, India has adopted diversification strategies, including strengthening economic partnerships with the United States, Japan, and the Association of Southeast Asian Nations (ASEAN), as well as promoting domestic manufacturing under the 'Make in India' initiative. These measures aim to reduce dependency on any single partner while retaining space for selective engagement with China. This hedging strategy reflects a broader shift in India's foreign economic policy — from passive openness to strategic selectivity. India's answer to the widening trade gap with China is a two-pronged strategy: Build deeper commercial coalitions with trusted partners and turbo-charge domestic manufacturing so that tomorrow's supply chains run through, not around, India. The result is a deliberate 'China-plus-one' realignment that now threads through New Delhi's engagements with Washington, Tokyo, and ASEAN while anchoring at home under the Make in India and Production-Linked Incentive (PLI) drives. This strategy is not just about trade — it is about securing India's place in a reconfigured global production map. Such shifts reflect the growing convergence of commercial logic with strategic alignment. Washington has become India's largest goods-trade partner for the fourth consecutive year, with bilateral merchandise commerce reaching US$131.8 billion in FY 2024-25 — up from barely US$88 billion in 2019 — and resulting in India having a healthy surplus of more than US$41 billion. The new backbone of that relationship is the Initiative on Critical and Emerging Technologies (iCET), which has already green-lighted joint semiconductor, AI, and space projects and prodded both governments to prune export-control frictions. Tokyo complements this pivot by underwriting supply-chain security and industrial upgrading. More than four-fifths of Japanese firms operating in India intend to expand over the next two years, according to JETRO's latest global survey, by far the highest figure among major host economies. At the policy level, the Supply-Chain Resilience Initiative (SCRI), in collaboration with Japan and Australia, has targeted investment in electronics, batteries, and rare-earth processing hubs in India, specifically designed to mitigate single-country dependency. Japan's role is pivotal, not just as an investor, but also as a norm-setter for resilient and transparent value chains. Southeast Asia forms the third pillar. India's two-way goods trade with ASEAN hovers around US$110 billion. Still, both sides have agreed to fast-track a review of the ASEAN-India Trade in Goods Agreement to reduce non-tariff barriers and open services markets. Simultaneously, niche collaborations — such as semiconductor ecosystem talks with Singapore and defence-manufacturing tie-ups with Indonesia — are knitting India into 'China-plus-one' production networks across the region. This eastward economic orientation reinforces India's Indo-Pacific vision and places regional connectivity at its core. External diversification is reinforced at home by the PLI programmes, which now span 14 sectors with approved investments of approximately US$18.7 billion. One headline success is electronics: India has become the world's second-largest mobile phone maker, producing 99 per cent of the handsets sold domestically. Smartphone exports alone surged 55 per cent in FY 2024-25 to US$ 24.1 billion, leap-frogging petroleum and diamonds to become India's single most oversized export item and signalling a decisive shift toward higher-value manufacturing. India's industrial push is not only about import substitution — it is about export-led competitiveness in sunrise sectors. India's evolving economic strategy increasingly hinges on deepening ties with alternative partners across the Indo-Pacific. This pivot is also visible in recalibrating subregional engagement through BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation). As SAARC remains paralysed by India–Pakistan tensions, BIMSTEC has emerged as the primary forum for regional cooperation, offering a platform that bypasses Islamabad and aligns with India's Act East policy. At the 6th BIMSTEC Summit in Bangkok in April 2025, member states adopted the Bangkok Vision 2030. They signed new agreements on maritime connectivity and security cooperation, signalling intent to re-anchor the Bay of Bengal as a geoeconomic hub. For India, BIMSTEC complements its external diversification efforts by linking its northeastern states to Southeast Asian economies, spurring regional infrastructure, trade, and logistical corridors that sidestep China. Finally, India's evolving engagement with China reflects a strategy of managed rivalry — balancing selective cooperation with strategic hedging. Rather than decoupling, India is recalibrating its economic and diplomatic posture by diversifying partnerships, securing resilient supply chains, and reducing dependence on China, especially as Beijing deepens ties with Pakistan. This marks a shift from reactive diplomacy to a tactically layered approach, where competition is contained without collapsing ties. The writer is a Fellow and Lead, World Economies and Sustainability at the Centre for New Economic Diplomacy (CNED) at Observer Research Foundation (ORF)
India Today
26-05-2025
- Business
- India Today
On debt bed, Pakistan to hike defence budget amid India's Operation Sindoor
Despite grappling with a deepening financial crisis that is pushing it at bailout mercies, Pakistan has confirmed that it is preparing to increase its defence spending in the next fiscal year, beginning in July. The increase is likely to be announced as the budget is presented on June 2. This comes even as Pakistan reels from military setbacks from India's Operation Sindoor, and the allocation of more funds to the military comes despite Pakistan's dire economic situation. Only last week, the IMF approved a loan tranche of $1 billion (around Rs 8,500 crore). The country is burdened with over $22 billion in external IMF loan made Pakistan the fourth-largest borrower of the multilateral financial body. Pakistan's Planning Minister, Ahsan Iqbal, on Saturday confirmed that the federal government would raise its defence budget for the upcoming 2025-26 fiscal year, citing the recent military escalation with India and New Delhi's suspension of the Indus Waters Treaty as key factors behind the decision, reported Karachi-based newspaper said there was no pressure from the IMF in shaping or finalising the federal announcement came just weeks after Pakistan's federal government, led by the PML(N), reportedly approved an 18% hike in defence expenditure, raising the allocation to over Rs 2.5 trillion in the upcoming budget. It, too, cited the escalation in tensions with India as a key reason for the defence budget SPENDING RISES EVEN AS PAKISTAN'S ECONOMY BLEEDSadvertisementThe increased defence spending amid economic fragility in Pakistan has always been the subject of reliance on bailouts and foreign aid continues to empower its military establishment, even as critical sectors like education, healthcare, and poverty alleviation remain reflects a deeper paradox of elite-driven economic decision-making, where national priorities are often shaped by security concerns over social welfare, according to Soumya Bhowmick, a Fellow at the New Delhi-based Observer Research Foundation (ORF).Pakistani economic journalist Afshan Subohi, in her May 19 column in Dawn, questioned who would bear the cost of the defence hike in a cash-strapped economy. The piece was published after the federal government signalled it would raise the defence budget by 18%."The current tense regional environment likely underpins the government's proposal, endorsed by its largest coalition partner, the Pakistan Peoples' Party, to raise the defence budget by 18 per cent for the next fiscal year. The critical question for a resource-constrained country, however, remains: who will pay for it?" asked in June 2024, Pakistan's defence forces got a nearly 17.6% budgetary hike, amounting to Rs 2.12 trillion (PKR)."Pakistan's tax revenues are relatively modest, but its defense spending is massive, largely because the military is the country's de facto ruler. A bankrupt Pakistan is already receiving one IMF bailout and is seeking another, yet it unveils a 17.6% rise in its big defence budget," geostrategist and academic Brahma Chellaney wrote on X in June PAKISTAN TO HIKE DEFENCE SPENDING AMID TENSIONS WITH INDIAadvertisementIslamabad's announcement of an increase in its defence budget follows India's Operation Sindoor, in which Indian forces targeted terror bases in Pakistan and Pakistan-occupied Kashmir (POK), after the April 22 Pahalgam Sindoor successfully destroyed nine terrorist camps linked to Lashkar-e-Taiba, Jaish-e-Mohammed, and Hizbul Mujahideen in Pakistan and Pakistan-occupied Kashmir, killing over 100 terrorists, including high-value targets like Yusuf Azhar and Abdul Rauf advanced airpower, with precision strikes in a 25-minute operation, exposed gaps in Pakistan's air defence targeting of military and civilian areas made Indian armed forces retaliate by striking key military installations in Pakistan and cripple its air Pakistan's drone and missile attacks on Indian civilian and military infrastructure, Indian air defence systems effectively neutralised Pakistani strikes. Moreover, Indian forces hit key military infrastructure, like airbases at Noor Khan and Rahimyar Khan, where its technological superiority and strategic restraint were on heightened military tensions in the lead-up to India's Operation Sindoor, Pakistani daily The Express Tribune reported in early May that the government was weighing additional hikes to the proposed defence budget to counter "Indian aggression" and boost investment in indigenous research and in response, raised concerns about Pakistan's fiscal priorities, with Foreign Secretary Vikram Misri urging the IMF to reconsider its bailout packages due to the potential misuse of funds for military SPENDING BAILOUT MONEY ON DEFENCE AMID CASH CRUNCHPakistan's reliance on IMF bailouts, 25 loans since 1950, including four in the last five years, reveals its chronic economic instability. Pakistan's loans from the IMF alone stood at $6.2 billion as of March 31, 2025, according to the despite this cash crunch, Pakistan's civilian regime, whose reins lie in the hands of the military, is prioritising defence spending, which already accounts for nearly 18% of the federal the IMF warned that tensions with India could jeopardise Pakistan's fiscal and reform goals, Finance Minister Muhammad Aurangzeb claimed that the recent escalation with India would have "minimal fiscal impact" and could be accommodated within the current fiscal choosing to prioritise defence spending amid economic freefall, Pakistan is once again leaning into its military-first doctrine, despite the long-term risks to its economic recovery and human Watch
