New Delhi: At a time when investability in China is being questioned, shifting geopolitical realities offer India an opportunity to shine, Morgan Stanley said in a report.
When the 15-nation UN security council hastily called for a vote in February to condemn Vladimir Putin’s invasion of Ukraine, India joined China and Qatar to abstain.
It was a difficult balancing act. Delhi did not want to alienate Russia, an important historical friend, which supplies 46 per cent of its military equipment, without also antagonizing the US, its largest trading partner.
India also depends on Russia’s diplomatic support at the UN for its claims over Kashmir.
After all, the Soviet Union has used its veto six times at the Security Council on India’s behalf, Morgan Stanley said in the report.
For Delhi, though the abstention vote was an embarrassment, the clear and present dangers come from a prickly Pakistan and a muscular China.
India is forging its own geopolitical path in this multipolar world and focusing on its strategic interests, Morgan Stanley said.
That means siding both with Russia and joining Western alliances, such as the Quadrilateral Security Dialogue, alongside the US, Australia, and Japan.
From Brussels to Tokyo to Washington, governments are determined to lower their dependence on Beijing.
Coupled with its geopolitical stance, India’s economic condition is looking favourable for the rest of this decade.
India has not been able to realise the kind of industrial transformation that turned countries like China and South Korea into miracle economies by building their manufacturing capabilities.
Instead, India’s economic growth was led by services unlike the Asian tigers.
Recently there has been a change in the mindset from the Gandhian principles of small is beautiful, to actively incentivizing large scale manufacturing capacities through production linked incentive (PLI) schemes, the report said.