Interestingly, top oil exporters from West Asia, who are substantially dependent on India’s imports, took a rather neutral stance on the country’s new act and constitution amendment. They put their own domestic economic and trade interest ahead of all other issues. These countries are Iraq, the largest oil exporter to India in 2018-19 with about 46.6 million tonnes, followed by Saudi Arabia (40.3 MT), the UAE (17.5 MT) and Kuwait (10.8 MT). In fact, Saudi Arabia stood by India through the torrid times since last December, before Covid-19 shifted the global attention to the pandemic. Saudi Arabia follows probably the smartest and most intelligent diplomatic policy that puts its strategic and economic interests ahead of all other concerns. That explains why the country has remained the closest to the United States, a dear friend of its political enemy (Israel). The US diplomacy towards Shiite Iran, a staunch global opponent of the Saudis, may have something to do with its strong diplomatic ties with Saudi Arabia.
India is among the world’s top ten merchandise importers. According to the latest data released by the Union Commerce and Industry ministry on the country’s imports, exports and overall trade, India’s total trade — merchandise plus services — during April-March 2019-20 was estimated at nearly $1.27 trillion. The ongoing pandemic caused by the novel coronavirus outbreak across the world did deal a blow to Indian merchandise exports, with overall shipments dropping 34.57 per cent in March, 2020. The decline in exports has been mainly due to the ongoing global slowdown. The Covid-19 crisis resulted in large scale disruptions in supply chain and demand resulting in cancellation of orders. Major commodity groups recorded negative growth during the month. Imports too were lower in March by nearly 29 per cent. Oil imports also dropped in March. However, trade in services, both exports and imports, rose by 4.13 percent and 5.16 percent respectively. India expects an overall trade deficit of $70.16 billion in 2019-20.
Unfortunately, the country’s strong trade muscle had little influence on its global political and strategic diplomacy. Until recently, India’s trade and commerce diplomacy has been running almost independent of its political and strategic diplomacy. India’s growing import of merchandise from China till 2018-19, surpassing those from the US, ignores the country’s continuing deterioration of strategic and diplomatic relations with the Communist country. Many a times, India has chosen a trade partner, specially in the area of import, compromising on its strategic interest. For instance, India is reportedly going ahead with a $2.3 billion deal to manufacture fleet support vessels (FSVs) in collaboration with a Turkish shipyard ignoring Turkey’s links with Pakistan and its recent diplomatic tiff with the Recep Tayyip Erdogan government. The formal contract was signed days after India issued a strong statement rejecting all references made to Jammu and Kashmir in a joint declaration by Turkey and Pakistan during President Erdogan’s visit to Islamabad. Turkey’s TAIS emerged as the lowest bidder for a contract to manufacture five of the 45,000-tonne FSVs at the Vizag-based Hindustan Shipyard, last year, but the contract signing was put on hold in October following the repeated raising of Kashmir issue by Erdogan at international forums.
Similarly, it isn’t clear why India continues to feed Malaysia’s highly labour-intensive palm oil industry with billions of dollars worth imports, every year. Malaysia is one of India’s biggest critics on Kashmir in all major international Islamic or non-Islamic forums. Malaysia told the UN that India had "invaded and occupied" Jammu and Kashmir. Mahathir Mohamad had even asked India to work with Pakistan to resolve the issue. This has naturally angered India. But, India’s diplomatic anger is yet to sufficiently reflect on its trade relations with Malaysia. India is the world's biggest importer of edible oils. Palm oil accounts for nearly two-thirds of India's total edible oil imports. India buys more than nine million tonnes of palm oil annually, mainly from Malaysia and Indonesia.
During April-December, 2019, India was the biggest buyer of Malaysian palm oil, purchasing 3.9 million tonnes, according to the Malaysian Palm Oil Board. Countries such are Ukraine and Argentina are looking for participation in India’s edible oil imports market. What is preventing India from stopping palm oil import from Malaysia, its strong diplomatic adversary, in a tit-for-tat policy? According to Mumbai-based refiners, India will not face any edible oils shortage if buyers stopped palm oil import from Malaysia. "Indonesia is eager to sell more and more palm oil to India," a refiner said. India could also increase imports of soya bean oil from Argentina and sunflower oil from Ukraine to offset any drop in Malaysian palm oil shipments. Few will disagree that despite India’s growing position in the international trade, it has not been able to leverage the situation to the advantage of the country’s diplomatic relations. (IPA Service)
TIME TO USE TRADE MUSCLE FOR EFFECTIVE DIPLOMACY
POLITICAL ADVERSARIES CAN’T BE IDEAL BUSINESS ALLIES
Nantoo Banerjee - 2020-05-11 10:09
It is time that India boasting nearly a half-trillion-dollar annual merchandise import picks up right trade partner and not those who embarrass the country and challenge its diplomatic clout on every opportunity before international forums. The continuing critical response from some of the countries in West Asia and East and South East Asia to India’s internal matters such as Kashmir’s changed status and the Citizenship Amendment Act (CAA) is highly embarrassing as these countries are also India’s preferred import partners. Some of them have been staunchly opposing India’s permanent membership in an expanded UN Security Council and even in the Nuclear Suppliers Group (NSG). India is not recognised as a nuclear weapon state under the Nuclear Non-Proliferation Treaty – a “privilege” bestowed only on the world’s five major nuclear powers: the U.S., UK, Russia, France and China, which are also NSG members. India’s imports contribute billions of dollars to the economies of some of these strong political or diplomatic adversaries.