America's Justice Department and SEC have targeted India's Adani Group with a bribery case. Using Nationalistic sentiment doesn't help. Yes, law has been weaponized and India's sovereignty compromised but not how they think. A definitive guide to understanding the case.
There was a clear warning from Putin on provision of long range missiles that could hit deep into Russia to Ukraine. It would be consider as a direct attack by NATO on Russia. Biden has done just that!
While game-playing the future, one of the main flashpoints we came across, where the global conflict can start, was the Arctic. We look at it in complete detail.
A multipolar world brings its challenges. Scalpels replace hacking axes. India is growing in this complex world. It has been here before. Has it learned from the lessons of the past?
As the COVID fury was still raging in the world and India was fighting against many odds [please read "How India Battled the COVID Tragedy"] Germany's Chancellor Angela Merkel made a rather off-color remark.
That Europe "allowed India to become such a large pharmaceutical producer" and why Europe will have to "rethink". It was a veiled warning.
Over time, many scandals have been associated with to quality of Indian drugs, specifically those exported to Africa. Not just that, Indian leading pharma companies have become targets of cyberattacks.
When you look at the state of global inflows and outflows for the pharma industry, you suddenly see the reason why.
Europe was the largest exporter. And Africa was the largest importer of pharmaceuticals.
India became the disruptor.
It wasn't going to be easy.
Business success and economic rise bring in challenges. Strategic, geopolitical and even militaristic.
It is imperative to recognize them and prepare accordingly.
When we look at an interconnected world and global value chains, we only focus on physical goods. But the global value chains are far more than just goods and services.
They include flows of goods, services, capital, people, data, and ideas.
A McKinsey Global Institute analysis is very intriguing. It finds that the world is deeply interconnected even now. The flows are - counter-intuitively perhaps - quite resilient.
And we all face one truth in our faces - no region today is self-sufficient.
The research is based on a comprehensive assessment of trade (30 global value chains spanning resources, manufactured goods, and services), capital, people, and intangibles flows as well as an analysis of about 6,000 globally traded products.
What they also found was that the foundations of interconnectedness in the world is shifting from goods to intangibles, services and talent!
So what do you find when you put the data together?
International students come right after Data (which is the largest) and the IP.
Suddenly, Indian PM Modi's decision to take Canada on and in the process making it an undesirable destination for Indian students becomes so much more potent in geopolitical terms.
Data is correctly described at the biggest global flow. It is what trade goods used to be at one time. It is not just a combination of bytes anymore. It is a natural resource.
Desh Kapoor
By 2030, India is poised to significantly impact the global talent landscape, particularly in the technology sector, with projections indicating a surplus of over one million highly skilled tech professionals.
Such a talent pool is an output of India's strategic investments in digital infrastructure, education, and skill development. That it helps India grow is one thing. It also aligns with the future source of India's geopolitical strength.
The global dispersion of 17.5 million Indians across different regions highlights the country's profound influence on the international talent market. This diaspora not only contributes to the global economy but also fosters cross-border collaborations, innovation, and cultural exchange, enhancing India's geopolitical power and establishing it as a critical hub in the global talent ecosystem.
And this diaspora is large. The largest in history.
The Indian diaspora is one power that India's PM Narendra Modi not only recognized early in his political career but has used it for greater negotiation power with the hosts.
A diaspora that was known for its low profile, fragmented existence, and minimal expectations - suddenly became a source of power. They came together in several thousand and became visible as a group. What that did internally for the diaspora within a country was unprecedented.
It gave them a sense of purpose. A unique collective identity. And a prowess to organize themselves. In ways they had never done before.
What Modi's critics - like Suhasini Haider in "Mr. Modi’s Diaspower" - miss is the unleashing of the diaspora's collective strength within and outside of their host countries. The politicians who never cared about the Indian group, suddenly saw their strength and wealth. That opened their eyes. And the willingness to engage. In fact, a race to engage.
Meanwhile, the ideological and even physical attacks on Indians also show that the diaspora became a target of those unscrupulous groups who wanted to fight the Indian power.
India needs a more robust Data strategy. But it has the People's strategy very clearly laid out to be the winner in the coming decades of a connected world.
This brings us to the role and criticality of multinationals in the world of supply chains.
Multinational corporations can have a disproportionate influence on flows because they are the current center of the system. They account for about two-thirds of exports, and they are overrepresented in sectors where intangibles are the most relevant and where concentration is the most pronounced.
The multinationals have always wielded immense geopolitical power and influence that has during history compromised the national security of the countries they operate in.
Here are some important ways the MNCs can impact the countries of their operations.
Economic Dominance and Sovereignty: Multinationals have vast financial resources. So large that their earnings can be comparable to or greater than entire countries. For instance, the revenues of companies like Apple and Walmart surpass or are close to the GDP of countries like Malaysia and Sweden, respectively.
This economic power enables them to undertake massive investment programs and influence market trends and economic policies, potentially compromising the economic sovereignty of nations.
The manipulation of regulatory and tax regimes by multinationals to shift profits to tax havens is a testament to their ability to undermine national financial systems and regulations.
Avoiding taxes is an art that companies have perfected over the last few decades. In the 1970s and 1980s, according to data from the E.U. Tax Observatory, barely any profits were shifted to tax havens, countries like Bermuda and Ireland where companies based in relatively highly-taxed places like the U.S. and Europe could move operations on paper and only pay minimal (or in some cases zero) taxes on their profits. But that changed in the 1990s and 2000s, when about one-third of the foreign profits of U.S. multinational corporations were shifted to tax havens. In 2010, U.S.-based companies began to shift even more profits—around 50%—and the level has remained elevated ever since, according to the Tax Observatory report. About $1 trillion in profits were shifted in tax havens in 2022, the report finds. (Source: "How Giant Corporations Can Still Get Out of Paying Taxes" / Time)
In 2021, the Organization for Economic Cooperation and Development (OECD) facilitated a landmark accord, establishing a universal base tax rate of 15%. This agreement also outlined several mechanisms for nations to enforce this tax, ensuring compliance even in the face of non-cooperative tax havens and corporations. But even that did not stop these companies from circumventing the laws.
Technological and Infrastructure Control: Multinationals often lead in technological innovation and infrastructure development, areas where governments may lag. This leadership positions them at the forefront of significant projects, such as space exploration, which traditionally were the domain of nation-states.
Such dominance can shift the balance of power and control in critical technological and infrastructural sectors away from governments, potentially affecting national security. Companies now have capabilities exceeding those of the governments.
Proxy for State Activities: Multinationals can sometimes serve as proxies for state activities, providing a degree of plausible deniability to governments engaging in cyber espionage or other forms of cyber aggression. This makes it challenging for affected countries to attribute attacks and respond appropriately, thereby complicating national security efforts. And it is not a new idea.
The top US corporations have regularly worked with the C.I.A for espionage on other countries.
The Central Intelligence Agency's use of the Howard R. Hughes organization to disguise its recovery of a sunken Soviet submarine is but the most recent example of a long‐standing practice in which dozens, perhaps scores, of American companies have lent their names and reputations—usually for a price—to shield covert C.I.A. activities abroad. According to one intelligence source thoroughly familiar with the practice, these relationships between the C.I.A. and American‐based multinational corporations, known as “commercial cover agreements,” have resulted in the placing of career C.I.A. officers in the overseas offices of legitimate companies that range from some of the largest in the world to others unknown to the general public. The source named more than 20 American companies that he said had entered into such agreements with the C.I.A. over the last 15 years. (Source: "C.I.A. Covert Activities Abroad Shielded by Major U.S. Companies" / New York Times)
The US is not alone. Every country uses its largest corporations to make inroads and then create espionage infrastructure to compromise those countries. China is doing to the US what the US has always been doing to other countries.
With this background, one needs to closely analyze the multinational companies. Companies that make a huge difference with respect to the power dynamics between countries
The distribution of the top 100 multinational companies by country of origin shows a significant concentration in a few countries, primarily the United States and China. According to Visual Capitalist, the United States is home to the majority of these companies, with a strong presence in sectors such as technology, consumer discretionary, and health care. This is attributed to the dominance of American companies in important industries and sectors like Apple, Alphabet (Google), Tesla, and Walmart, which are all based in the U.S.
China is the second most represented country among the top 100 multinational companies, with significant players like Tencent and Alibaba contributing to its position. The country's rise in the global market is not only limited to well-known tech and consumer companies but also includes significant contributions from the finance sector.
Other countries with representation in the top 100 include Taiwan, France, Switzerland, South Korea, Denmark, the Netherlands, India, Australia, and the United Kingdom, among others. However, their representation is much smaller compared to the dominance of the U.S. and China. For instance, Taiwan is home to TSMC, a leading technology company, while France's LVMH is a major player in the consumer discretionary sector.
The sectors that dominate among the top 100 companies are technology, consumer discretionary, and health care, reflecting the global economic shift towards these industries. The energy sector is also represented, with companies like Saudi Aramco from Saudi Arabia being among the largest by market capitalization.
Here is an interesting infographic showing the details of the top global companies and their statistics.
This distribution highlights the global economic power dynamics, with the U.S. and China leading the way and other countries playing a more minor role in the landscape of the top multinational companies. The concentration of these companies in a few countries and specific sectors suggests a significant influence of these economies and industries on the global market.
Does having a big economy push a country to go for a larger power structure in terms of its military?
When you look at the empirical evidence, you will that the economic growth and military expenditure of the countries have grown simultaneously. And that makes sense because the larger the economy, the stronger the attacks on its sovereignty because such a player has greater potential to impact the world.
In a world of power, this posits a growing economy directly in competition with the established players.
In time, economic development and the military might start to go hand in hand.
The major empirical finding of this article suggests that this is indeed the case. In hundreds of battles and wars between 1898 and 1987, states with higher levels of economic development consistently outfought less developed opponents. This is not surprising. What is surprising is that many of the political and social factors posited to affect military capability either seem to be irrelevant or have the opposite effect of that found in previous studies: when economic development is taken into account, culture and human capital become insignificant and democracy actually degrades warfighting capability. In short, the conventional military dominance of Western democracies stems primarily from superior levels of economic development, not societal pathologies or political institutions. (Source: "Economic Development and Military Effectiveness" / Michael Beckley Columbia Univ - Taylor and Francis)
As countries grow economically, the need to increase their military strength grows. It has been a historical verity. See this analysis by Rand Corporation.
And that remains a fact even today.
This makes sense because as per data from the Stockholm International Peace Research Institute (SIPRI), Average Military Expense Growth has been seen to have a 0.75 coefficient correlation with Average GDP growth.
In this relationship, the only exception has been that of Europe.
Europe basically piggybacked on military guarantees provided by the United States.
The NATO arrangement basically is one where the United States has predominantly taken on the role of providing security, while European nations have focused on reaping benefits.
After World War II, this strange arrangement allowed Western European countries to develop highly sophisticated welfare systems, utilizing funds that might otherwise have been allocated to their own defense, thanks to the protective expenditures made by the United States. Concurrently, the financial commitments of the U.S. to NATO have led to a scaling back of its own welfare initiatives.
This is the only time in human history that while the GDP of the top economies grew, their military spending came down.
And it shows clearly in the charts.
When you start comparing the European expenditure on defense versus the United States, the picture is very clear.
But that era and its practices are a-changing. European countries are increasing their own defense expenditures at record levels.
Because they no longer trust the guarantees from the United States.
If in the next election, the United States gets Donald Trump as the new President, the NATO guarantee will fall apart even further.
And nothing has exposed Europe's pusillanimity as clearly as the Ukraine war. They have not been able to share the arms burden
Just over a year into Russia’s invasion of Ukraine, there is a growing sense that Europe’s reawakening on defense policy has already faltered. Germany’s much-hyped Zeitenwende, which promised a significant boost in defense spending, has so far yielded few tangible new investments in military capabilities and been overshadowed by the government’s various perceived prevarications on arming Ukraine. European militaries’ stores of critical munitions and equipment have been found wanting amidst the rush to support Ukraine’s resistance, and its defense industrial base faces significant challenges in ramping up production to replenish, let alone grow, its customers’ stockpiles. (Source: EUROPE SHOULD NOT TRY TO GO IT ALONE ON DEFENSE / War on the Rocks)
The largest military exporting power in Europe is France.
France's defense industry is one of the largest in Europe, accounting for over 25% of the region's military capabilities. France's defense technological and industrial base (BITD) has 4,000 companies, including 600 exporters and 450 strategic companies. France's BITD's annual revenue flows were €30 billion in 2020, compared to a global defense market of over €531 billion that same year. (Source: France Diplomacy and France’s Weapons Industry Is Growing Rich off Dictatorships / Jacobin)
It is already the world's third-largest arms exporter and on its way to becoming the world's number two.
France overtook China as the world’s third-largest arms exporter in 2021. The 2022 SIPRI report documented France increasing its sales by 59 percent over the previous 10 years – more than any other country. Whether France will surpass Russia as the world’s No. 2 arms exporter remains uncertain. Other suppliers, such as South Korea, are experiencing their own significant growth. For his part, Wezeman thinks it’s a very real possibility. “It may be possible that in 2024, 2025 or 2026, France becomes equal to – or surpasses – Russian arms exports.” (Source: France may soon overtake Russia as the world’s No. 2 arms exporter / France 24)
But even France has been a "one-trick pony" with its major supply being of the fighter jet Rafale.
Which, strangely, it has not been able to sell within Europe. When Germany wanted to buy 35 new fighters in 2022, guess where it went? Lockheed Martin for the F-35s. Not Rafales!
Germany will buy 35 U.S. F-35 fighter jets to replace its ageing Tornado, it said on Monday, announcing a first big defence deal since Chancellor Olaf Scholz pledged a 100-billion-euro upgrade to the military in response to Russia's invasion of Ukraine.The move appeared to be part of a tectonic shift in German security policy, including a pledge to reach NATO's 2% target for defence spending, after years of accusations that Germany was too dovish towards Moscow in compensation for its Nazi past. (Source: Germany to buy 35 Lockheed F-35 fighter jets from U.S. amid Ukraine crisis / Reuters)
You see, within the group of European nations that are part of NATO, there's a pronounced inclination towards the Lockheed Martin F-35 Lightning II aircraft, primarily due to its capability to deploy U.S.-manufactured nuclear weapons, notably the B61 nuclear bombs.
This preference is underpinned by the F-35's advanced technological features, such as stealth capabilities, superior avionics, and sensor fusion, which collectively enhance its role in both nuclear and conventional warfare. The aircraft's ability to operate undetected in hostile environments and deliver precision strikes makes it a valuable asset for NATO's strategic deterrence and defense objectives.
Even more importantly, the F-35's interoperability with NATO forces and infrastructure further solidifies its favorability among European member states, ensuring a cohesive and flexible response capability within the alliance's collective defense framework.
This is precisely what Macron called out in June 2022. Europe needs to back Europe. And conversely, it means, getting out of the American orbit.
But we will also have to reorganize ourselves into Europeans. Let us be clear-sighted about ourselves: europe has long thought of itself as a market. You've been hearing me for 5 years, saying she needs to rethink her sovereignty, her strength. We have started to do that, and I welcome that. We need to go much further, and in this respect what the European Commission proposed to us a few days ago is very much in the right direction. I am pleased that many European Nations, which will themselves be massively financing and moving forward, are here. But let's not go back to reproducing the mistakes of the past: spending a lot to buy elsewhere is not a good idea. We have to spend a lot, but we have to think of a European industrial and innovation strategy, because it'is good for our industries and industrialists, it is good for jobs in our countries, it is good for having the dual innovation capacity that our economy needs, it is good for our economy, and it's good for our strategic sovereignty. (Source: Emmanuel Macron's speech at Eurosatory in June 2022)
That move will have larger ramifications.
Both for the US and for Europe.
Simply speaking it means:
So if you think that the world is multi-polar today. Tomorrow will proliferate substantially more geopolitical poles!
When the current Indian establishment took over in 2014, India was the world's 10th-largest economy. Growth in various sectors has led to it being the world's 5th largest economy in terms of nominal GDP.
India is poised to be the world's 3rd largest in 2030. However, some believe that it can happen even earlier.
As per many projections, India is expected to surpass Germany and Japan to hold the third position by 2030. This feat could be achieved even earlier than this by 2027 or 2028, according to a report by the State Bank of India's Economic Research Department. In a report released last month, SBI's economists said that the path taken by India since 2014 revealed that the country is likely to get the tag of the third-largest economy in 2027 or FY28 based on actual GDP data as on March 2023. (Source: "Here's when India is likely to become world's 3rd largest economy" / Business Today)
At this rate, India could be the world's largest economy by the year 2052 with a total GDP of $45 trillion!
Please remember that the British plundered at least $45 trillion from India.
As per Ms. Patnaik, Professor Emeritus at Jawaharlal Nehru University (JNU), the total drain between 1765 and 1938 was around $45 trillion.
Eminent Indian economist Professor Utsa Patnaik (Jawaharlal Nehru University) has estimated that Britain robbed India of $45 trillion between 1765 and 1938, However it is estimated that if India had remained free with 24% of world GDP as in 1700 then its cumulative GDP would have been $232 trillion greater (1700-2003) and $44 trillion greater (1700-1950). Deprivation kills and it is estimated that 1.8 billion Indians died avoidably from egregious deprivation under the British (1757-1947). (Source: Britain Robbed India Of $45 Trillion & Thence 1.8 Billion Indians Died From Deprivation / Concurrents)
That such a large amount was stolen from India is quite disheartening. Specifically when it will take another 30 years to reach there.
To put it in context fully. America's GDP today is roughly $28 trillion!
India's GDP - if India had not been colonized - would have been 10 times America's GDP today!
So when you want to understand what India lost due to colonization, THAT is what India lost!
The reason why India lost its wealth at that time was because, despite its wealth, it did not invest in its military and strategic strength compared to the global players. It allowed these players to come to India beat it militarily and plunder it.
If there is one important lesson that India's history from the beginning of 1000 AD to now gives it is that:
Has India learned that lesson?
If one looks at how the government works with the large companies within their country to synchronize geopolitical and commercial interests it would seem that the Indian establishment has learned its lessons well.
For example, Adani Group's investments are closely aligned to initiatives that are significant for India in geopolitical terms.
And it is not the foreign policy objectives that the Adani group has focused on. Even concerning domestic strengthening - while making a profit - Adani group is aligned with the objectives of the current establishment.
Ambanis would play a somewhat similar, though a much watered-down version, role in the recent past and in some cases even today.
However, the Ambanis have been known to be mavericks with their own set of objectives that are not necessarily always aligned with the country's geopolitical goals.
Adani's rise in such a short period has not just become a counter-weight to the Ambanis but also provided a better partner in the larger geopolitical arena.
Corporate alignment is not the only major change that has occurred in India's new way of handling the world.
The Indian establishment has a new doctrine. A new way to work with the world!
What is the Jaishankar Doctrine?
First, let us understand what is a doctrine.
The Jaishankar Doctrine is not something that India's Minister of External Affairs, Dr. S. Jaishankar personally attributes to himself. In fact, he attributes it to "his boss", Indian PM Narendra Modi. So, he's fine with calling it the "Modi Doctrine". But while Modi may be the broad designer of the contours of that doctrine and policy direction, Jaishankar is the actual surgeon working the scalpel very carefully in the sinews of the geopolitical body.
Broadly speaking this "Modi-Jaishankar Doctrine" emphasizes a nuanced approach to India's foreign policy, balancing between strategic autonomy and active engagement on the global stage.
This doctrine is reflective of India's evolving stance in international relations, characterized by pragmatism and a refusal to be tied down by rigid alliances. The Modi-Jaishankar duo, instead favors a plurilateral approach that allows India to navigate the complexities of a multipolar world effectively.
A key aspect of this doctrine is the emphasis on maintaining strategic autonomy, particularly in the context of India's relations with major powers like the United States, Russia, and China.
Jaishankar advocates for India to engage with these countries in a manner that protects its national interests without compromising its sovereignty.
It is a multipolar world, you see. And in such a world there is no clear leader. In such a situation, whoever can work with different players with carefully crafted responses to different challenges as opposed to having one set of ideological responses for the players.
Which is precisely what Dr. Jaishankar is a master of. A Geopolitical Scalpel.
In that sense, while the doctrine recognizes the importance of strengthening ties with the United States, especially in economic and developmental domains, it also calls for a cautious approach in political and security matters, particularly where it involves sensitive relations with Russia and China.
If one has to share the parts of Dr. Jaishankar's own writings, then these portions best demonstrate what the "Modi-Jaishankar Doctrine" really stands for. Specifically, the portion that has been blocked out in red shares the actual prescription by the player.
This was the same message that Dr. Jaishankar shared in his opinion piece for the Economist.
In that process, India demonstrated during 2023 how to navigate the east-west polarisation around Ukraine and bridge the north-south developmental divide. The impact of skewed globalisation, covid damage, conflict in Ukraine, big-power competition, climate events and now violence in the Middle East have certainly made the world far more volatile and unpredictable. To rise in such challenging circumstances requires nimble and “multi-vector” Indian diplomacy. Working with partners on agreed issues was evident in the Quad mechanism, the Indo-Pacific Economic Framework, BRICS expansion and creative Middle East initiatives. (Source: S. Jaishankar on India’s growing global role / Economist)
The important thing is that the Modi-Jaishankar doctrine aligns with the fundamental Indian way of looking at relationships at the global level.
When you look at the fundamentals espoused by Chanakya in his treatise Arthashastra, you will see clear parallels to the Modi-Jaishankar-Doval-Shah strategies.
As a political realist, Kautilya assumed that every nation acts to maximize power and self-interest, and therefore moral principles or obligations have little or no force in actions among nations. While it is good to have an ally, the alliance will last only as long as it is in that ally's as well as one's own self-interest, because "an ally looks to the securing of his own interests in the event of simultaneity of calamities and in the event of the growth of the enemy's power." 54 Whether one goes to war or remains at peace depends entirely upon the self-interest of, or advantage to, one's kingdom: "War and peace are considered solely from the point of view of profit." 55 One keeps an ally not because of good will or moral obligation, but because one is strong and can advance one's own self-interest as well as the self-interest of the ally, for "when one has an army, one's ally remains friendly, or (even) the enemy becomes friendly." 56 Because nations always act in their political, economic, and military self-interest, even times of peace have the potential to turn abruptly into times of war, allies into enemies, and even enemies into allies. Burton Stein notes correctly that Kautilya was describing a foreign policy not of a great empire like that of the Mauryas, but of small warring states in incessant conflict, such as India experienced before the Mauryan empire. 57 Kautilya probably assumed that peaceful empires cannot last forever, and that conflict among smaller states is more common in history. For Kautilya, this principle of foreign policy—that nations act in their political, economic, and military self-interest—was a timeless truth of his science of politics, or arthasastra. He did not believe that nations never act in an altruistic manner—indeed, Kautilya advocated humanitarian acts that also coincided with one's self-interest—but he did believe that one must assume, if entrusted with political or military power, that one's neighbors will eventually act in their own interests. Put another way, one would be betraying one's own people if one did not assume a worst-case scenario. A nation forced to rely on the kindness of neighboring states is weak and, unless it can change rapidly, doomed to destruction. (Source: "Kautilya's Arthasastra on War and Diplomacy in Ancient India" / The Journal of Military History)
These are timeless lessons that Indian rulers and establishments have forgotten over its history.
India's economy is growing at an unprecedented pace.
It is not the first time this has happened.
The last time India was here, it abandoned its strategic and geopolitical objectives and strengths. It paid a very heavy price.
That cannot and should not happen again.
Never again.
America's Justice Department and SEC have targeted India's Adani Group with a bribery case. Using Nationalistic sentiment doesn't help. Yes, law has been weaponized and India's sovereignty compromised but not how they think. A definitive guide to understanding the case.
While game-playing the future, one of the main flashpoints we came across, where the global conflict can start, was the Arctic. We look at it in complete detail.
North Korea launched its most advanced monster missile yet. China is readying its 'mysterious' amphibious ship. Russia is advancing in Ukraine while losing men. America goes to poll and civil uncertainty. Global economy is on the brink. What is coming? Let's game plan it.
Current American establishment's quest for control and "teaching countries lessons" is pushing the geostrategic chessboard in a certain direction. The resultant Indo-China rapprochement may be a watershed moment in this century. A detailed analysis.
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