This is India’s reckoning moment

I am deeply saddened by the recent global development of conflict and violence in Ukraine. Talk of nuclear threats terrifies me. Despite the provocations and the reasons, however justified they may seem, the violence and the resulting loss of human life are extremely regrettable and avoidable. As Mahatma Gandhi’s nation, India must be a committed and tireless proponent of peace and non-violence both at home and in the world.

struggle and reshaping

The Russia-Ukraine conflict reflects a new form of the world order. Since the fall of the Berlin Wall in 1989, a paradigm of free societies, frictionless borders and open economies has evolved into governance in many countries. It catalysed the free movement of people, goods, services and capital around the world. Global trade and per capita GDP nearly doubled during this period, marking an era of general peace and prosperity. Societies and economies in the world are intertwined in pursuit of shared global prosperity. Such tight interdependence between nations would lead to fewer conflicts and promote peace, it was the established wisdom.

The Russo-Ukraine conflict has destroyed this knowledge. If mutual relations and trade between nations were mutually beneficial, it means that its dissolution and blockade would be mutually harmful. The retaliatory economic sanctions imposed on Russia have hurt all nations, though more so than some other countries.

Egyptians face food shortages due to their reliance on Russian and Ukrainian wheat, Germans face high winter heating costs due to their reliance on Russian gas, Americans need electric cars due to unavailability of car batteries. Faced with shortages that depend on Russian nickel, Sri Lankans have taken to the streets over the economic crisis and Indian farmers risk high fertilizer prices due to global shortages.

‘Global Village’, a living reality

‘Global Village’ is not just an academic term but a living reality for the nearly eight billion people on the planet. This ‘global village’ was built on the foundation of an advanced transportation network, cemented with the US dollar as the reserve currency and closed by integrated payment systems. Any disruption in this delicate balance runs the risk of sinking into the imbalance of the ‘Global Village’ and derailing the lives of all.

India has also greatly benefited from being an active participant in this interconnected world, with trade having tripled (as a share of GDP) and providing a large number of jobs over the past three decades. Trade with other nations should and will always be an integral part of India’s economic future. A reversal towards separatism and protectionism would be foolish and catastrophic for India.

The Russia–Ukraine conflict is a global geoeconomic conflict that threatens to return to the Cold War era of the two major power blocs. The nations that did not condemn the Russian invasion to the United Nations constituted more than half of the world’s population but accounted for a quarter of the world economy compared to nations that did not condemn Russia. The former, the Russia-China bloc, are large producers with increasing consumption power while the latter, the western bloc, are today’s largest consumers. Any new veil that descends and divides these two factions will cause great upheaval for the global economic balance.

a business opportunity

During the Cold War, when India pursued a prudent foreign policy of non-alignment, trade was a small part of India’s economy. Now, trade represents a significant portion of India’s GDP. India’s trade is dependent on both these power blocs and the current global economic structures of free trade, established reserve currency and transaction systems. As the Western bloc of nations seeks to reduce dependence on the Russia-China bloc of nations, it presents new avenues for India to expand trade.

The Western bloc of nations has expressed a desire to adopt a new paradigm of ‘free but principled trade’ that values ​​both morality and money. While this new doctrine can be argued, India, as the largest peace-loving democracy, stands to benefit greatly from this ‘principled trade’ aspiration of the Western bloc. This presents a tremendous opportunity for India to become a major producer nation of the world and a global economic superpower. However, to capitalize on these opportunities, India needs free access to these markets, an accepted and established global currency for trade and seamless trade settlement.

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The US dollar has emerged as a global trading currency, conferring an ‘extreme privilege’ over the dollar, much to the reasonable detriment of other countries. But forcibly and hastily abolishing this mandate and rapidly replacing it with a bilateral local currency arrangement could prove more harmful in the long run to the global economy.

I remember a time when I was part of bilateral currency negotiations such as the Indian Rupee-Russian Ruble Agreement in the late 1970s and 1980s, when we had mutually agreed exchange rates for trading purposes. Such isolated bilateral agreements are fraught with risks, but when trade is a small part of the economy and such agreements are limited to a few trading partners, it was difficult.

Required relationship on both sides

Now, with India’s strong external sector, a prosperous trade relationship with many countries and tremendous potential for expanding trade, such bilateral arrangements are durable, cumbersome and dangerous. Opportunities to buy discounted oil or commodities may be lucrative, but if it is a prolonged departure from the established mandate of a dollar-based trade agreement or jeopardizes established trading ties with Western bloc markets, it could mean India’s There could be long-term implications for export potential. In the long run, India stands to gain more from access to western bloc markets for Indian exports under established trade orders than from discounted goods purchased under the new bilateral currency regime, creating a new and parallel global trade. want to build a structure.

Thus India needs not only a non-aligned doctrine for the emerging new world order, but also a non-disruptive geo-economic policy that seeks to maintain the current global economic balance. By virtue of its sheer size and scale, India can be both a large producer and a consumer. With rising inflation, volatile crude oil prices, global uncertainty, weak domestic private investment and deteriorating financial situation, in the changed global situation, expanding external trade has the potential to revive India’s economy and create a large number of jobs for our youth and women. Presents the best opportunity. To make the best use of this opportunity, India needs not only cordial relations with the nations on both sides of the new partition, but also a stable and established global economic environment. It is important for India to adopt a strategic economic self-interest principle within the broader paradigm of its non-aligned foreign policy.

social harmony required

Just as it is in India’s best interest to balance the current geo-economic balance, it is imperative for India to maintain its domestic social balance. To be a mass productive nation, India needs millions of factories with crores of people of all religions and castes in all states to work together. Social harmony is the building of economic prosperity. Creating mutual distrust, hatred and anger among citizens, creating social disharmony is a shameful step towards destruction.

The restructuring and restructuring of the world order will be a unique opportunity for India to re-evaluate its foreign policy, economic policy and geopolitical strategy, and assume the reins of global leadership. Consolidating India’s global economic power through a cautious geo-economic strategy in the aftermath of the Russia-Ukraine conflict could potentially be a turning point in India’s economic history. As a peaceful democracy with economic prosperity, India can be the basis of this new global order. But for this, India must first stop the raging communal division within itself. I sincerely wish and hope that India can emerge as a harbinger of peace, harmony and prosperity in this new world.

Manmohan Singh was the Prime Minister of India from 2004 to 2014. (with the help of Praveen Chakraborty)