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Extractive summaries and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 301 | June 16-22, 2023.

Joe Biden and Narendra Modi are drawing their countries closer

The Economist | June 15, 2023

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No country except China has propped up Russia’s war economy as much as oil-thirsty India. And few big democracies have slid further in the rankings of democratic freedom. But you would not guess it from the rapturous welcome Narendra Modi will receive in Washington next week. India’s prime minister has been afforded the honour of a state visit by President Joe Biden. The Americans hope to strike defence deals. 

The global clout of the South Asian giant is rising fast. Its economy is the world’s fifth biggest. Its 18m-strong diaspora is thriving, from America to the Gulf. And India has become indispensable to America’s effort to assert itself in Asia and deter Chinese aggression. Yet though huge, capitalist, democratic and wary of China, India is also poor, populist and dismissive of the vestiges of the post-1945 Western order. The relationship is therefore a test case for the messy alliance of democracies emerging in a multipolar world. Can both sides gain the business and security benefits of co-operation even as they share fewer principles than they may care to admit?

The relationship faces two potential sources of friction. First, India’s pro-Western tilt—which became more pronounced after border skirmishes with Chinese troops in 2020—is essentially pragmatic. Ideologically, it is suspicious of Western countries and flatly rejects their claim to global leadership.  The second sticking-point is Mr Modi’s attacks on liberal norms. Under his Hindu nationalist, Islamophobic party, India is increasingly hostile to over 200m of its own people. Lynchings and the dispossession of Christians and Muslims are becoming more common. The press is cowed and the courts are largely pliant. Though India seems sure to remain a democracy—not least because Mr Modi is almost guaranteed re-election next year—it is an illiberal one. 

Some suggest that America risks repeating its history with China, by showering economic advantages on a rival that ends up turning against it. That seems unlikely. Mutual suspicion of China alone should keep India close. Primly rejecting co-operation with India because its ideology and democracy do not conform to Western ideals would only empower China. It would also show that America has failed to adapt to the multipolar world that lies ahead.  To work, the relationship will have to function like a long-term business partnership: India and America may not like everything about it, but think of the huge upside. It may be the most important transaction of the 21st century.

3 key takeaways from the article

1. No country except China has propped up Russia’s war economy as much as oil-thirsty India. And few big democracies have slid further in the rankings of democratic freedom. But you would not guess it from the rapturous welcome Narendra Modi will receive in Washington next week.  Can both sides gain the business and security benefits of co-operation even as they share fewer principles than they may care to admit?
2. The relationship faces two potential sources of friction. First, India’s pro-Western tilt—which became more pronounced after border skirmishes with Chinese troops in 2020—is essentially pragmatic. The second sticking-point is Mr Modi’s attacks on liberal norms.
3. To work, the relationship will have to function like a long-term business partnership: India and America may not like everything about it, but think of the huge upside. It may be the most important transaction of the 21st century.

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Topics:  India, USA, International Politics, Defence, Economy