The Hindu Editorial Analysis- 19th July 2024 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

 India and a Case for Strategic Autonomy 

Why in News?

On July 11, 2024, two days after Prime Minister Narendra Modi had concluded his first visit to Moscow since Russia invaded Ukraine on February 24, 2022, Eric Garcetti, the United States Ambassador to India, said, “In times of conflict there is no such thing as strategic autonomy; we will, in crisis moments, need to know each other.” When Mr. Modi was in Russia, on the eve of a North Atlantic Treaty Organization (NATO) summit in Washington, the Joe Biden administration had expressed its “concerns” publicly. “We have expressed those [concerns] privately, directly to the Indian government and continue to do so,” a U.S. State Department spokesperson said.

Key Highlights of the 22nd India-Russia Annual Summit

Diplomatic Achievements:

• President Vladimir Putin awarded Prime Minister Narendra Modi Russia's highest civilian honour, the "Order of Saint Andrew the Apostle."
• The Order of Saint Andrew the Apostle was established by Tsar Peter the Great in 1698 and reinstated in 1998.
• The award features a double-headed eagle emblem and a light blue silk moire ribbon.
• Named after Saint Andrew, the patron saint of Russia and Scotland, known for spreading Christianity across Europe and Asia.
• Prime Minister Modi was honoured for promoting the strategic partnership and friendly relations between Russia and India.
• The announcement of this award was made in 2019.
• Foreign leaders like Chinese President Xi Jinping and former Kazakh President Nursultan Nazarbayev have also received this award.

Economic Cooperation:

• New bilateral trade target: USD 100 billion by 2030 (previous target was USD 30 billion by 2025).
• Increase due to India's discounted imports of Russian crude after US and European oil sanctions on Russia.
• Agreement to develop a comprehensive "Programme-2030" for economic cooperation.
• IRIGC-TEC to coordinate Programme-2030, chaired by India's External Affairs Minister and Russia's Deputy Prime Minister.
• India and the Eurasian Economic Union negotiating a Free Trade Agreement on goods, exploring agreements in services and investments.
• Russian businesses to participate in "Make in India" and "Atmanirbhar Bharat"; Indian companies to invest in Russia.

Defence and Technology:

• Transition from buyer-seller to joint research, development, and production of advanced defence technology.
• Joint manufacturing of spare parts for Russian-origin defence equipment in India under Make-in-India.
• Setting up joint ventures for Indian Armed Forces and exports.
• New Working Group on Technological Cooperation to be established.
• Putin agreed to discharge Indian military recruits in the Russian military serving on the Ukrainian front.
• No signing of the Reciprocal Exchange of Logistics Agreement (RELOS), which would have supported military operations between Russia and India.

Transport and Connectivity:

• Development of transport corridors, including the Chennai-Vladivostok Eastern Maritime Corridor and the International North-South Transport Corridor (INSTC).
• Chennai-Vladivostok Maritime Corridor aims to reduce transport time to Russia by 40%.
• INSTC connects the Indian Ocean and Persian Gulf to the Caspian Sea via Iran, and to St. Petersburg and Northern Europe via Russia.
• Focus on increasing infrastructure capacity and reducing cargo transport time and cost in Eurasia.

International Cooperation:

• Russia appreciated India's UN Security Council non-permanent membership (2021-22).
• Russia supports India's permanent membership in a reformed and expanded UN Security Council.
• India supports Russia's BRICS Chairship in 2024.
• Emphasis on cooperation in international forums like the UN, G20, BRICS, and SCO.
• India looks forward to Russia joining the International Solar Alliance (ISA), Coalition for Disaster Resilient Infrastructure (CDRI), and International Big Cat Alliance (IBCA).

Global Issues:

• Climate Change: Commitment to combating climate change, achieving UNFCCC and Paris Agreement goals, cooperation on low-carbon development and green financing.
• Multipolar World Order: Need for a multipolar world order and regional security in Eurasia and the Indian-Pacific ocean regions.
• Counter Terrorism: Condemnation of terrorism and violent extremism, commitment to combating transnational crime, money laundering, terrorist financing, and drug trafficking.

Factors Contributing to Russia’s Status as a High-Income Country

Economic Growth Across Sectors:

• The World Bank classifies countries based on Gross National Income (GNI) per capita, using the Atlas method (accounting for purchasing power parity).
• Threshold for high-income (as of July 2024): USD 14,005.
• Russia's GNI per capita in 2023: USD 14,250.
• Notable sectoral growth: trade (+6.8%), financial sector (+8.7%), construction (+6.6%).
• Boosted both real GDP (3.6%) and nominal GDP (10.9%).

Impact of Military Spending:

• Increased military-related activities in 2023 bolstered economic activity.
• Experts caution that this growth might not be sustainable.

Trade Diversification:

• Western sanctions led to a shift in trade patterns.
• Reduced dependence on G7 and EU countries.
• Increased transactions with China, India, Türkiye, Central Asia, and the South Caucasus.

Resilient Energy Sector:

• Maintained steady overall export volumes despite sanctions.
• Leveraged global oil prices and strategic trade diversification.

Fiscal Stimulus and Investment:

• Government initiatives, including fiscal stimulus and increased defence spending (7% of GDP), supported economic recovery and growth.

Job Market and Consumer Spending:

• Low unemployment, rising wages, and strong private consumption contributed to economic stability and growth.

Adaptation to Earlier Sanctions:

• Overcame sanctions from 2014 by adapting economic policies and infrastructure investments.

World Bank's Country Income Classification

About:

• The World Bank Group assigns economies to four income groups: low, lower-middle, upper-middle, and high.
• Classifications are updated annually on 1st July based on the previous calendar year's GNI per capita.
• Reflects a country's level of development, using Atlas GNI per capita as an indicator of economic capacity.

Classification Thresholds:

• Low-income: USD 1,145 or less
• Lower-middle-income: USD 1,146 to USD 4,515
• Upper-middle-income: USD 4,516 to USD 14,005
• High-income: More than USD 14,005

Factors Influencing GNI per Capita:

• Economic growth
• Inflation
• Exchange rates
• Population growth

Regional Highlights:

• South Asia: Share of low-income countries fell from 100% in 1987 to 13% in 2023.
• India: Lower-middle-income since 2007; GNI per capita (PPP) in 2023: USD 10,030.
• Middle East and North Africa: Share of low-income countries increased from 0% in 1987 to 10% in 2023.
• Latin America and the Caribbean: Share of high-income countries climbed from 9% in 1987 to 44% in 2023.
• Europe and Central Asia: Share of high-income countries slightly lower in 2023 (69%) than in 1987 (71%).

Note:

• GNI measures the total domestic and foreign value added claimed by residents in a given period, usually a year, expressed in international dollars using PPP rates.
• It includes GDP plus net receipts of primary income from nonresident sources.

Conclusion

The 22nd India-Russia Annual Summit underscored the robust strategic partnership between the two nations, marked by significant diplomatic honours and ambitious economic targets. Despite global geopolitical challenges, both countries reaffirmed their commitment to enhancing bilateral ties across various sectors. The summit's outcomes reflect a shared vision for regional stability, economic growth, and mutual respect on the global stage, reinforcing the enduring nature of the Indo-Russian relationship amidst evolving international dynamics.