Russia-India Business Deal Turns Sour: 3 Trillion Rupees Wasted
For India, a country that always wants to compete with China, a nation that constantly claims "If Mumbai doesn't work harder, it will soon be caught up by Shanghai," has recently lost face on the international stage. Russia has refused to accept the Indian Rupee but recognizes the Chinese Yuan, the impact of which can be imagined.
On the surface, it appears that Russia does not recognize the capabilities of the Indian Rupee, but in reality, it is a denial of India's industrial level and economic foundation.
The triple blow in recent months should awaken Modi to the fact that India is still far from being a truly top-tier power and has a long way to go.
Indian Rupee Rejected by Russia
A significant event has recently occurred internationally, where the Indian Rupee has been rejected by Russia, which is a significant blow to the self-esteem of Indian citizens.
As we all know, in recent times, the global movement away from the US Dollar has been fervently underway, and the Modi administration also wants to take advantage of the situation, attempting for the Rupee to become a lucky beneficiary in the wave of de-dollarization.
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After the Russia-Ukraine conflict, the US and the EU imposed severe sanctions on Russia, freezing Russia's US Dollar and Euro assets. Under these circumstances, Russia had to abandon the use of US Dollars and Euros and instead turned to settling with other countries in their own currencies. At this time, the Chinese Yuan became an alternative settlement currency.
Due to the enhancement of China's comprehensive national strength, Russia is also very "fond" of the Chinese Yuan, which has also promoted the process of internationalization of the Yuan to a certain extent.
Seeing this, India also hopes to reach a settlement in its own currency with Russia, thereby enhancing the international recognition of the Rupee.Considering that India is an important customer for Russia's energy exports, Russia has also agreed. India sees this as a historic opportunity for the internationalization of the rupee. For Russia, it also wants to reduce its dependence on the US dollar. Under the sanctions of Europe and America, the number of customers has decreased, and the source of income has been greatly affected, finally accepting payment in Indian rupees.
The Indian authorities have also seized Russia's weak point, taking advantage of the comprehensive sanctions of European and American countries, and significantly lowering the price of Russian energy. What is paid to Russia is all in rupees.
The Russian trade representative in India said: Last year, the bilateral trade volume between Russia and India increased to $39 billion, while the goods purchased from India were only $2.9 billion, which means that Russia's trade surplus reached more than $36.1 billion (equivalent to about 300 billion rupees).
Russia sold a large amount of cheap energy, and in the end, it only got a pile of colorful Indian rupees. The money earned needs to maintain economic operation, so it has to be spent. If it can't be spent, it is like waste paper.
But now, Russia holds tens of trillions of rupees and finds that this money is going to be "trapped in hand".
On the one hand, the Indian rupee is only a small currency, and other countries do not accept it when trading with Russia. On the other hand, when Russia wants to purchase some urgently needed cars, various machinery, and industrial products from India, India fears that the Americans will sanction them and also refuses Russia's procurement.
India's operation has confused Russia, and there is a risk of 300 billion rupees becoming waste paper. On the surface, Russia has been trapped by India.
But it is also overdrawing India's international credit that wants to continue to become a top power. Who dares to believe them in the future!
India's move has also broken the desire of other countries to trade with India, because doing business with India also needs to maintain a good relationship with the United States, otherwise there will be a risk of being cheated.At present, the global trend of de-dollarization has become a reality, and India's way of doing things has largely been endorsing American hegemony.
Ultimately, Russia has also seen through the true face of Modi and had to unilaterally announce the suspension of negotiations on settling bilateral trade in rupees, hoping to use currencies such as the renminbi for payment.
Modi's dream of a great power has not even begun, and it has been severely educated by Russia in this way. The impact on India can be imagined.
On the surface, Russia does not want to settle in rupees, but in essence, the money earned after Russia's trade surplus cannot buy anything, which indirectly indicates the low standard of living in Indian society and the unstable economic foundation.
Unstable Economic Foundation of India
According to data from the International Monetary Fund, India will become the fastest-growing economy in 2023.
The main reason is that large companies such as Apple and Foxconn have moved their factories from China to India. Since 40% of India's population is under the age of 25, this has become a huge advantage for India's economic development.
In 2022, India's GDP reached 3.39 trillion US dollars, with a year-on-year growth rate of 6.7%. Behind the rapidly growing economy, there is an unstable economic foundation.
Recently, there has been a large-scale disturbance on the northeastern border of India, and the Indian military has sent as many as more than 50 troops to the scene to quell the disturbance.Frankly speaking, the outbreak of conflict in Manipur does not come as a surprise. Historically and geographically, this region has little to do with Indian authorities. The population of the state is not large, with just over three million people, making them a clear minority in the new world's most populous country.
Currently, India has mobilized a large number of troops to quell the conflict, which will have varying degrees of impact on the entire northeastern border of India. Those familiar with India's national conditions know that India is a federal country with over 100 ethnic groups and regions, none of which submit to each other. In such a fragmented nation, aspiring to catch up with China and the United States is challenging, and even maintaining national unity is difficult.
Manipur is located in a remote area with poor transportation, and there is a high demand for independence. Coupled with the long-term neglect of the region's development and construction by the New Delhi authorities, various detrimental policies have accelerated the chaos in local social order.
In an attempt to completely "assimilate" the northeastern region, the New Delhi authorities have long encouraged immigration to the area, aiming to fundamentally change the local population's lineage.
The poor economic situation and humiliating media environment, along with the inherent sentiment of patriotism, have prompted the people of the six northeastern states to seek independence and establish their own nation.
Such actions have intensified internal friction in the short term and even led to significant conflicts.
According to comprehensive reports from foreign media, India has adopted a simple and brutal method to quell the unrest. However, fearing negative international repercussions, the Modi administration has cut off local networks to prevent the spread of information, so as not to be seized upon by Western countries.
In modern society, where everyone has a smartphone, scandals will eventually be exposed.
Now, under the influence of the unrest in Manipur, the unity and stability of the entire country will be greatly affected. This incident reveals that there are significant internal issues within India. If not handled properly, it could lead to a crisis.Due to India originally being a loose alliance, this is also a significant weakness for India, and it is also the key reason why the United States can manipulate India at will.
As long as India does not follow orders, external forces can easily manipulate the Indian authorities, causing their economic development to stagnate.
Industrial upgrading is controlled by other countries
It is well known that India has always had complex feelings towards China. When the Indian authorities act internationally, they will consciously or unconsciously always learn from China.
Many Indians still believe that they are more developed than China.
A few days ago, India's total population surpassed China, becoming the new global population superpower. The Indian people were ecstatic, and the Indian media was jubilant.
In order to get rid of its dependence on China's industrial chain, the United States has come up with tangible projects to transfer a lot of manufacturing from China to India, asking India to replace China.
Apple has also made up its mind. As a technology giant, it has expanded its supply chain to India, creating more than 100,000 jobs for India and driving local economic development.
India also wants to take advantage of the United States' big tree to quickly surpass China and realize their dream of becoming a great power. Apple's factory in India has also made Modi ambitious.India is poised to replace China as the recipient of the transfer of Western industrial chains, becoming the new world's factory. This implies that India's industry is a gift from Western countries, and once these industries are upgraded, they will be controlled by Western nations. Consequently, India will lose its autonomy and become susceptible to exploitation.
The United States' capital is not transferring the industrial chain to India to help it escape poverty and become wealthy; it is doing so in pursuit of higher profits. Once a better option becomes available, these capitals will migrate again. After the withdrawal of Western capital, India will be left without the Western-led resource allocation system, rendering the remaining assets useless, and the path to industrialization may become an illusion.
What's worse, the financial system could also be infiltrated by the West, leading to national instability and the loss of sovereignty and control. At present, under the domineering operations of the United States, the future world is expected to give birth to a completely new situation. At this critical moment of great changes, India has become a coveted prize for the West.
China is a friendly country that has always sincerely wanted to restore friendly relations with India, but India has always been indecisive. Regarding this competitor supported by the United States, China cannot ignore it and should try to maintain a necessary relationship. Although India is indeed not doing well at present, it is continuously developing.
Think about what our country was like decades ago; as long as it is determined to develop, it may not be prominent now, but it is always moving forward. If its scale continues to expand, there is an old saying about competitors: we should strategically despise the enemy and tactically take them seriously. We cannot relax or ignore the attractiveness of the Indian market and some industries.However, for India to become a top-tier power, it may still have a long way to go.