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The ongoing crisis affecting the Adani Group, triggered by a January 24, 2023 report from U.S. firm Hindenburg Research that had accused the company of stock manipulation and fraud – charges the Group has denied – has ramifications not only for India’s economy but also on the foreign policy front.
While India’s Ministry of External Affairs (MEA) denied this was the case – this was “not a foreign policy issue”, the Ministry said – a financial crisis rocking an Indian company with a major overseas footprint will likely have an impact beyond India’s borders. Reports last week said an Adani Power project planned as a major Indian infrastructure push to provide electricity to Bangladesh may be delayed by another six months, according to local media. As Suhasini Haidar reports the project is one of a number in the neighbourhood — including those in Bangladesh, Sri Lanka, Nepal and Myanmar — that have accompanied the Narendra Modi-led government’s “Neighbourhood First” initiative in the past few years.
Reflecting the company’s global ambitions, Adani chairperson Gautam Adani has met with regional leaders, including Bangladesh Prime Minister Sheikh Hasina in September 2022 and then-Sri Lankan President Gotabaya Rajapaksa, while Adani family members have met with senior officials from Myanmar and even Indonesia. Now, governments in neighbouring countries are watching the company’s market situation closely.
When India’s companies have become important regional and global players, their financial health will certainly have a bearing on India’s diplomacy in countries where they are have a prominent presence. Moreover, as an editorial last week in The Hindu observed, at a time when India holds the G20 presidency, authorities will need to ensure the country’s regulatory framework is seen in nothing less than the best light as the government weighs a response to the crisis.
Funding Indian diplomacy
Curious youngsters seen watching the live telecast of the Budget speech by the Union Finance Minister Nirmala Sitharaman from Parliament House. | Photo Credit: Sushil Kumar Verma
India’s Budget, presented last week, was received positively by the markets, although the Adani issue wiped out those gains. In the allocations for the Ministry of External Affairs under “Grants and Loans to Foreign Governments”, Bhutan received the largest share, reports Kallol Bhattacherjee. Under the budgetary plans, Bhutan will receive ₹2,400 crore ($291 million) out of which ₹1,632 crore ($198 million) will be grants and ₹768 crore ($93 million) loans. An amount of ₹550 crore ($66 million) has been allocated for Nepal as grants and ₹200 crore ($24 million) for Afghanistan.
The Budget estimate for the 2023-2024 allocation for the Ministry of External Affairs is around ₹18,050 crore ($2.19 billion), up by ₹800 crore ($97 million) from the previous financial year (2022-2023). The Budget has allocated ₹990 crore ($120 million) for India’s G20 Presidency, which will include a string of preparatory meetings and the summit of leaders in September.
Hot air over a balloon
The remnants of a large suspected Chinese spy balloon drift above the Atlantic Ocean, just off the coast of South Carolina, with a fighter jet and its contrail seen below it, Saturday, Feb. 4, 2023. | Photo Credit: AP
The United States on Sunday shot down what it called a Chinese surveillance balloon over its airspace. The appearance of the balloon over the State of Montana last week triggered an unexpected diplomatic crisis, days ahead of United States Secretary of State Antony Blinken’s highly anticipated visit to China which was set for Monday, and was to be the first by a top American diplomat since 2018. The balloon punctured plans for the visit that were made when Joe Biden and Xi Jinping met in Bali in November and Blinken called off his trip, while both sides over the weekend exchanged heated remarks over the balloon – the latest, even if somewhat unexpected, diplomatic row to inflate tensions between the world’s two biggest powers.
Pervez Musharraf’s mixed legacy
File photo of Pakistan’s then President Pervez Musharraf during the ODI match played between India and Pakistan, in Rawalpindi, Pakistan. Musharraf passed away on Sunday, Feb. 5, 2023, due to prolonged illness. | Photo Credit: PTI
Former Pakistan President and Army Chief, General (Retd) Pervez Musharraf, who proposed what he entitled the “Musharraf formula” to resolve the Jammu-Kashmir dispute between India and Pakistan, passed away in Dubai on February 5. Suhasini Haidar reflects on his mixed legacy. Musharraf spent half a decade of his childhood in a Mughal-style haveli in old Delhi’s Daryaganj, as Ziya Us Salam writes.
The Top Five
What we are reading this week - the best of The Hindu’s Opinion and Analysis.
- Suhasini Haidar on the significance of India issuing a notice to renegotiate the 62-year-old Indus Water Treaty with Pakistan.
- Former Indian Ambassador to Myanmar Rajiv Bhatia writes that the country today remains pessimistic about its future, two years on after the military staged yet another coup, derailing Myanmar’s quest for democracy.
- Jayadeva Uyangoda on the controversy casting a shadow over Sri Lanka’s celebration of the 75th anniversary of its Independence (February 4, 1948), and why angry citizens are asking questions of the country’s government.
- In a conversation moderated by Suhasini Haidar, Satish Dua and Manoj Joshi discuss whether the Indian government should put out a white paper on Ladakh to clarify the situation along the Line of Actual Control (LAC) with China, in the wake of a report prepared for a security conference in Delhi setting of a controversy by stating that India had lost access to 26 of 65 patrolling points. Their conversation is also available as a podcast.
- Ganeshan Wignaraja makes the case for greater trade within Asia, and for South Asia to look east, with the International Monetary Fund (IMF) on January 31, 2023, warning that global trade would slow down from 5.4% in 2022 to 2.4% in 2023.
