Can India wriggle out unscathed from the competing demands of G20 and SCO?
As the host of the Group of 20 (G20) nations and the Shanghai Cooperation Organization (SCO) later this year, India finds itself in a pickle. Although, the global attention is welcome but what follows could be unpalatable. In the best of times, it would not have been easy to balance the competing demands of the two groups, but due to the raging war in Ukraine, the exertions from both the groups have acquired an unexpected intensity that is posing a major foreign policy challenge to India, implications of which will be visible long after the curtains come down on the two events.
War of Wits
The denouement to this exciting war of wits could happen even earlier when Prime Minister Modi visits Washington on a first state visit in June. What needs to be seen is if the US will persuade New Delhi to not invite Russian President Vladimir Putin at the G20 summit, which will take place later in September this year. Sources who keep a close watch at the Capitol Hill in Washington, DC, claim that President Biden may not attend G20 summit if Putin, as a member country, decides to participate in it. In such circumstances, what will Modi really do? Can he muster the diplomatic guile like the Indonesian Prime Minister, Joko Widido, to get President Putin and President Biden to participate in the summit at Bali and also get everyone to agree to a statement despite the division caused by the Ukraine war? This seems like a big challenge as Indian defense and finance ministers failed to get all the ducks in a row to agree to a joint statement. The loud claims of some Indian officials that they were capable of building a consensus on contentious issues and had played a role at Bali expectedly turned short.
How would the Indian diplomats absorb the pressure that would come their way on many critical issues that would have a bearing on the success of the G20 event? Pressure on India could mount to stop buying cheap Russian oil in the future and also further reduce its dependence on defense equipment from Russia.
Quite visibly, the US has begun the exercise to reclaim its relationship with New Delhi before Biden meets Modi in June. They just want New Delhi to be lured by China and Russia. US NSA, Jake Sullivan, traveled to Riyadh for a meeting with not just Crown Prince Muhammad Bin Salman, but also India’s National Security Advisor, Ajit Doval, and UAE’s security boss to discuss ways to integrate the Middle East with South Asia through rail lines and sea lanes. Ostensibly, the endeavor was to keep in check growing influence of Chinese in the oil rich region, which had brokered a path-breaking peace deal between Iran and Saudi Arabia that not just rehabilitated Iran in the region, but ended a fratricidal war with neighboring Yemen. Besides, pushing Saudis towards Israel, the US also wanted to try stopping new foreign policy endeavors of Riyadh to join the China-Russia led Shanghai Cooperation, which is increasingly becoming an anti-West bloc.
It is from this standpoint that one has to see the statement that the Russian Defense Minister, Shoigu, made during his visit to India during SCO mefense ministers’ conclave. The long standing ally of India expressed dissonance over the creation of Quad group of countries and its obvious implications on how it was anti-China in its construct and imagination. Shoigu was critical not just of US, but also members of the Quad like India, which in his reckoning, follow the same anti-China policy as the West.
In some ways, Russian criticism of Quad was inspired by its close ally China that has been deeply anxious about the new grouping, even when India, Australia and Japan have taken pains to explain to Beijing that there is no merit in its criticism. Many believe that the Galwan clashes of 2020 were an attempt of Beijing to check whether Quad was a military alliance or not. As US did not come to India’s rescue, it became clear to them that New Delhi was fighting its own battles.
In fact, India was reluctant to join quad if it was meant to be a military compact designed to take on China, but it was reassured by other partners that it was meant to collaborate on other issues like production of vaccines to take on the pandemic etc. China was obviously not fooled by these clarifications as it has been under pressure to stop its hegemonic ways in Indo-Pacific region. Though, India has abundant reason to join any military alliance that keeps the Chinese threat in the Himalayan region at bay, but it has found Quad or, for that matter, other groupings limited to Indo-Pacific region. India still believes that a better way to manage China is through negotiations and also trade. In the last few years, India is also benefiting from Western powers’ attempts to decouple from China. For instance, Apple, the iPhone makers, are furiously shifting their plants from China to India and other western powers. Despite expressing misgivings about shifting from China, many Western private sector companies, whose concerns are driven by profit and predictability of the use of law and not by political reasons, are coming under pressure from Western powers to decouple from China.
New Global Financial System
The rapidity with which the world is changing after February 24, 2022, has seen China and Russia scramble to garner support from countries that are uncomfortable with the US hegemony of the global financial system. Due to this China is at the forefront of the new financial world order where trade will take place in national currencies and not in dollar. This process of de-dollarisation is attracting many countries of the SCO that are slowly doing business in renminbi, dirham, ruble and rupee. In all, 18 countries have jettisoned dollar in favor of this new arrangement. Iran, which is the new member of the SCO, has agreed to do business in yuan or renminbi, which allows it to beat the US sanctions. In fact it is working on creating a sanction free corridor with Russia. Moscow, too, is benefiting from this, but has problems with the large amount of rupees it has collected after the sanctions prevented it to trade in dollars with India. In future it wants to do trade in either yuan or ruble in export of oil or defense equipment like anti-missile system S-400. These are the kind of niggles that are showing up from SCO countries as the time for summit comes closer. Some SCO members have also expressed unhappiness over the partisan treatment shown to them. Whereas G-20 had 200 events organized all over the country, for SCO countries there were just a handful. Russia and China, it is believed, also expressed unhappiness to host India over the manner in which the SCO summit was postponed by a month to allow Modi to visit US. They claim that the SCO countries, in terms of GDP and size, are no less than G7 countries.
It will be interesting to watch how India emerges unscathed from this diplomatic quagmire it finds itself in.
A foreign policy analyst, Sanjay Kapoor is the founding editor of the New Delhi-based Hardnews magazine. He is a member of the Editors Guild of India having also served as its General Secretary.