China has realized that it has become a target of the west, first by announcing a strategic partnership with Russia and then backing Russia against the west in the Ukraine war, and it is worried about facing sanctions similar to those against Russia, according to Ambassador Shyam Saran, Former Foreign Secretary and Former Chairman of the National Security Advisory Board.
“China is on the defensive today and it will be a little more cautious in its dealings with India than it has been in the recent past,” he says.
Ambassador Saran delivered a talk on India’s choice between staying neutral and switching its position on Russia’s invasion of Ukraine in the 57th edition of All India Management Association’s LeaderSpeak programme.
The session was moderated by Mr C K Ranganathan, President, AIMA and Chairman and Managing Director, CavinKare Pvt Ltd, and it was attended by several CEOs and top executives.
Ambassador Saran argued that whatever reservations India has about the west-dominated world order are overcome by the reservations about an alternative world order dominated by China and Russia. “India’s interest lies in adjusting the existing order,” he said. He qualified it by saying that India’s future lies in its economic, technological and military transformation by accessing both capital and technology from the most prosperous and advanced countries because iIt cannot expect any other country to fight on its side against China.
He also pointed out that despite much talk during the covid pandemic about western companies moving production from China to India and elsewhere, it is China that is shifting low-value production to Vietnam and Bangladesh and India is not yet a preferred destination for global investors because of its laws and red tape. Even India continues to rely on Chinese imports for its exports despite the government’s efforts to decouple the economy from China, he said.
In any case, Ambassador Saran argued, India has no reason to switch its position on Russia’s invasion of Ukraine despite the hostile press in the west and some criticism at home. He pointed out that India’s neutrality position is well understood and appreciated by the US, Europe and Japan, as India has not endorsed Russian invasion or condoned its human rights violations. “India has not taken a position supportive of Russia,” he said.
India’s stand on not participating in the sanctions against Russia is consistent with its long-term policy of abiding by sanctions approved only by a UN resolution and not any sanctions imposed bilaterally, Mr Saran clarified. He pointed out that the US has sanctioned a large number of countries, including Iran, but India is not obliged to comply.
Mr Ranganathan remarked that India’s economic prospects are tied to the US, which sees India as they key to isolating Russia and marginalizing the emerging China-Russia axis. However, he added that India faces the challenge of balancing its economic interests with its policy sovereignty.
Ambassador Saran clarified that India-Russia relations are not the same as the India-Soviet relations, as India has very little trade with Russia, and the west understands that there is not much of a threat of India and Russia getting together because of the long-term trend of marginalization of India-Russia relations. In addition, he argued, the west appreciates that India’s compulsions are similar to those of the Europeans who are the biggest buyers of Russian oil and gas and even through the war, Russian oil and gas has flowed from Russia to western Europe via Ukraine. He pointed out that despite cutting Russia out of the global financial system, some Russian banks are exempted so that the west European buyers can pay for Russian gas.
Regarding the focus on India’s defence dependence on Russia, Ambassador Saran said that India has diversified its defence purchases since the 1990s and it depends on Russia only for technologies that the west continues to deny India, such as nuclear submarines and missile defence systems. However, he reminded that a large part of Indian defence hardware is of Russian origin for which India still needs parts from Russia. In a curious twist, Russia now needs all the spares it can get and because of that supplies to India are affected, he said, adding that the marine engines for India’s newly acquired Russian frigates have to come from Ukraine, where much of the Soviet Union’s engineering and defence production was based.
Another key reason, India’s relations with Russia are not as critical as those with the Soviet Union, according to Mr Saran, is that China ceased to be a common adversary in the 1990s. He reminded that India’s economic surge allowed it to be considered the next China and that perception was key to the India-US nuclear deal, which was also endorsed by China. At the same time, he mentioned, after Soviet Union’s dissolution, there has been rapprochement between Russia and China, mainly because a weaker Russia has sought close relations with a stronger China, as both perceive a threat from the west.
Regarding the end game in Ukraine war, Ambassador Saran said that Russia has already lost the war because its originally stated objective was to prevent NATO’s expansion on its borders, and its efforts in Ukraine have only turned two more of its neighbours into the NATO fold. “The best Russia can hope for is to extricate itself by declaring some sort of a victory in the form of securing the Russian-speaking region of Ukraine and Crimea,” he said..
The session was held in a hybrid mode and it was also livestreamed on AIMA’s social media channels.
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