Indian dilemma affects her geoeconomics

Of late, India found herself on the horns of dilemma. Go with geopolitics or resort to geoeconomics. Put it in other way continue to pally with USA or seek a new beginning with arch rival China. Whatever is the outcome, geoeconomics has become a crucial arbiter.

The Indian experiment continues to foster in two minds. The elites throw the weight around the west, America leading the pack. That demands tying up with the rules based international order (RBIO) as a nuptial thread. But her umbilical connection was, is and continues to be on the side of socialism, non-alignment and Russo-friendliness. Most of her population supports the latter. In the contest between elites and masses, unfortunately the former are winning hands down.

Foreign policy, if it is to be a barometer, shows India aligning more with the western interests rather than with the global south. In fact like Janus India exhibits two faces, one looking at America led west and the other staring down at BRICS, SCO and other paraphernalia. Perhaps the time tested relationship with Russia is sometimes compromised as India plans to hike up her bilateral trade with America to the tune of US$ 500 Billion by 2030.

What fixes India to the western side is that she generates huge remittance income from abroad. In fact India is the largest recipient of remittance income, globally. An estimated US$ 135.5 billion fills her coffer this year alone. Remittance being about 15% of her national income, it is not a toy to play with. A crucial geoeconomics fact was hidden in this figures. Surprisingly, America is the primary source of avowed remittance, pushing Gulf to the second place.

Trump knows the maths. If he bans outgoing remittance to India from USA, that is match over for India. He can also persuade Gulf countries to hire more Pakistani and Bangladeshi labour. In any case, this is trending as Gulf is hesitant to renew existing labour contracts from India and might also dissuade new ones being negotiated.

Oligarchs and elites know their game. India cannot continue to buy Russian oil deep discounted and re-sell refined petroleum at windfall prices. Trump continues to torment India stating umpteenth number of times that he, who got the ceasefire between India and Pakistan. Another arrow in his arsenal is the number of planes India lost in the recent skirmish with Pakistan. He recently blurted out saying India lost seven jets to the chagrin of Indian establishment.

All these years India played on the side of geopolitics. Run with the hare and hunt with the hounds. Now her position is highly compromised. Trump made an astute move putting India on notice that if she continues buying Russian oil, she is in for trouble. On 27 August 2025, a 50% flat rate tariff is imposed on goods exported to America by India.

Now the contest begins whether geopolitics or geoeconomics is the saviour for India. My guess is as good as yours.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

Bury Geopolitics, bang on Geoeconomics

Gone are the days when America sneezes the globe catches the cold. Then it was America a lone star in any conceivable activity of post-war re-development. All three hats fit America’s head: geopolitics, geostrategy and geoeconomics. Time up to choose geoeconomics over the other two.

Geopolitics is hinged upon the power play in terms of politics, diplomacy, persuasion and also the aspect of command & control. United Nations being formed, Bretton wood sisters being organized, the globe looked at the American led group to be the saviour of world.  Cold war apart most if not all countries had vast population eulogizing American as Samaritan.

The predication came with the collapse of the bipolar world where earlier USA & Soviet Union had an unwritten law of keeping the distance and more than that keeping away from pressing the nuclear button. Throwing caution to win Gorbachev trusted Reagan and dismantled his massive Soviet State that consisted nations stretching from Eastern Indian Ocean to Western Atlantic. As Reagan exited presidency, America started to toy with the idea of unipolar world where the coteries of west European nations banded together in the NATO alliance beginning to set the “rules based international order” (RBIO) where American set the rules and the rest of the world had to follow suit.

Geopolitics is the key concept that drove western nations to be manacled under a single capitalistic system. Trade is the flow, Dollar is the conduit, and the system would not tolerate any disobedience. Then came the bolt from the blue. China begin to rise. USA ignored Napoleonic dictum. “There lies a sleeping giant. Let him sleep! For when he wakes, he will shake the world". On the contrary America befriended China using Ping-Pong diplomacy tactfully arranged by Pakistan.

Investments poured in from America to China. In fact an entire production system dismantled and shipped to Beijing gave China new found identity as an industrialized nation. Progress in the beginning was slow as it picked up it was soaring the heights of Himalaya. Richard Nixon who met Mao in February 1972, laid the foundation of Chinese revival. Soon the dragon filled the vacancy of veto carrying status in the UN Security Council vacated by Taiwan.

After a half century later in 2022 China is a peer competitor to USA. Not only that she is indeed, a near competitor to America led west in other geo areas: geostrategy, geotechnolgy and now in geoeconomics.

It is time for the American led west to bring some sense of balance into their foreign policy. Geopolitics must be given a fitting burial. The new challenge is not in politics or geo strategy but in geo technology and overarching geoeconomics. Bang on geoeconomics if you wants to survive America!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

Strategy revisits land as factor of production

Recent events force every business and every country to revisit land as factor of production when framing business strategy. The ongoing conflict in Ukraine accentuated this trend globally. Here are some snippets on this subject:

Resources are located in earth as well as in space. Right now the concentration is on earth consisting of land per se and the ocean bed. There are two types of countries and businesses. Resource rich and resource poor. America and India are indeed resource rich but when compared to Russia and Eurasian land -mass both are resource poor.

Russia which has the largest land area as well as Arctic Ocean bed, by far the most resource rich country in the world. Let us for the moment turn to Mackinder’s theory. Sir Halford John Mackinder British geographer is considered as the original thinker in both geopolitics and geostrategy whose concept of geography as a pivot land exemplified in his Heartland Theory where Eastern Europe was equated as the heartland and whoever control this heartland would control the world. This pivot land theory gives Russia immense power.

Further enunciation was provided by Nicholas Spykman, who improved upon Mackinder in his Rimland Theory where coastal regions of Eurasia are designated as Rimland due to land and sea interface that enables them to dominate the globe. He specifically pointed out that Eurasian Heartland fits this phenomenon. Interestingly, both Mackinder and Spykman had Russia in their mind after Russia won control in Crimea thence the Black Sea aftermath of Turkish-Russian wars.

The strategy underpinning both of their assertions is Russia remains the elephant in the room against whom a land power in the West or from across Atlantic could not wage war against Russia to any successful conclusion. Either the antagonists would be defeated in the battlefield or need to flee. A sea-power sails away and an air power flies away.

Now the question in geoeconomics is whether this pivot land or rimland as the case may be able to allow the use of land as the factor of production in order to improve upon the natural benefits bestowed upon Russia. Put it other way whether Russia can use her riches in effective and efficient manner to enhance manufacturing.

The short answer is yes, she can. Provided Russia sets in motion a conciliatory & complimentary approach to both America in the west and China in the East. Putin did that in his inimical manner. Here are pointers where he re-visited his business strategy navigating amid geoeconomics:

1. In association with China addressed both USA & EU calling for the implementation of open trade policy

2. Used discounted oil price to counter sanctions imposed against Russian oil export by the West

3.  When Trump introduced third party sanctions mainly targeted against China & India, Putin indirectly persuaded India to split away from American orbit.

4. When Trump forced countries to choose between America and the Global South, Putin threw his support to the latter emphasizing BRICS as an alternate power centre.

5. Finally, Putin met with Trump in Alaska heralding new era of US-Russian co-operation ignoring the Atlanticists.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist