The annual Davos jamboree of global finance and economy leaders began this week. Interestingly, this year the top leaders of the United States, Britain, France, Russia and China gave it a miss. US President Donald Trump and China’s Xi Jinping are of course enmeshed in a trade war. President Trump has also shut down the US government in a standoff with the new Democratic-led Congress over funding for a US-Mexico border wall. Theresa May’s British government is in the middle of an unending political crisis over Brexit, the deadline being March 29 with or without a deal with the European Union. France’s President Emmanuel Macron has been weakened by domestic street protests and his climb down for peace.
The situation in India is analogous. The massive “Mahagathbandan” of the Opposition parties at Kolkata’s historic Brigade Parade Ground has sounded the poll bugle.
Prime Minister Narendra Modi responded with bravado, reverting to his familiar chant that while he wants development, all that the Opposition wants is his head.
Consequently, the focus has largely shifted from foreign affairs, other than hosting Mauritian PM PravindJugnauth at the PravasiBharatiya Divas at Varanasi, the PM’s Lok Sabha constituency, and South African President Cyril Ramphosa coming as the chief guest for this year’s Republic Day. The six-yearly KumbhMela at Prayagraj, formerly Allahabad, also provides an additional prop for rallying all Indians — resident or non-resident. Astrologers need to divine why since 1977 only twice has the Kumbh or Mahakumbh fallen in a Lok Sabha election year — 1977 and 1989 — and both times the ruling governments lost. It remains to be seen if it will be any different this time.
However, like time and tide, diplomatic developments cannot wait while nations are in election cycles. Four international events can in fact impact the domestic political scenario. One is the longest-ever US government shutdown. Its economic impact will start deepening if it persists, with consequences for all nations as America is the biggest trader. Second is the Sino-US trade war, that has already caused China’s GDP in the last quarter to be the lowest in many years. China is also crucial to the global supply chains. Third is Brexit, which is causing uncertainty in European markets. While India may ultimately benefit, with Indo-UK trade rising as duties hit European products, in the short run there could be turbulence, particularly if there is a “no-deal” Brexit. Fourth and last is the global price of oil, which immediately impacts the consumer in India. It has already started creeping up as Saudi production cutbacks are reflected in the futures market. India has little control over this, but all these issues should be on the table of the national security adviser so that he can develop India’s policy options.
As China comes under tighter oversight in its dealings with the West over technology acquisition and market penetration, it will shift its focus to newer markets like India. Chinese President Xi Jinping’s vision of “China 2025” has rung alarm bells in the West as it indicates China’s desire to compete with the best in developing advanced technologies. America’s ban last April on their companies trading with Chinese technology giant ZTE almost shut down its operations before Washington relented. The lopsided Sino-Indian trade relations have been raising red flags in New Delhi for some time. Of greater concern is the deep penetration of Chinese electronic products and even apps on mobile phones in India that can be used for data and information collection. The Indian Army has apparently directed its personnel to de-install 42 Chinese apps that were suspicious. Alibaba’s UC Browser has crossed 130 million users in India, and the company has been reportedly asked to explain its data transfers out of India.
India’s markets are less regulated than China’s and are thus becoming a new battlefield between Western and Chinese e-commerce and digital platforms. The two Indian bills on data protection and localisation are necessary, but they need closer scrutiny to ensure that what is being sold as safeguards do not facilitate Indian oligarchs to capture e-markets vacated by foreign entities. India desperately needs something similar to America’s anti-trust laws to control crony capitalists from market dominance or even control. The Competition Commission is inadequate for this task in its current shape. The Indian consumer thus stands between the devil and the deep sea as the world transitions to the digital order.
China has 800 million Internet users, comprising 60 per cent of its total population. In India, the number is closer to 500 million. The two nations combined outnumber the total users in 37 OECD countries. It is expected that India’s digital economy will expand to over $1 trillion by 2025. But only about 100 million Indians are proficient in English. Thus, all major companies, including Amazon, are developing multilingual apps to expand their reach. China’s Belt and Road Initiative includes a Digital Silk Road (DSR) network that will use its physical infrastructure for a digital connectivity platform, likely doubling up for information-gathering. China is already well advanced in the use of Artificial Intelligence (AI) for facial recognition software that it has installed in Xinjiang for civilian surveillance and for what they call “preserving the social order”. India has to ensure it remains at the forefront of this race without succumbing to the statist proclivities of the Chinese.
Therefore, the use of such technologies by India’s intelligence agencies need stricter regulation. Sketchy details emerging from the warfare within the Central Bureau of Investigation show the probable phone-tapping of rivals, indicating extremely lax oversight. The Supreme Court stopped Aadhaar turning India into a dystopian state, but there is no guarantee that covertly the agencies have stopped breaching the privacy of citizens with their new gadgetry and software. The next Lok Sabha election is thus critical as a more transparent and accountable government is vitally needed to balance digital capabilities against privacy and human dignity. Indians are caught today between the international Internet and e-commerce behemoths that are interested in their purse and the Indian government which wants to remain in power at all costs. A good case exists in India for a neutral and undistracted interim government comprising high-minded individuals at election time, with contesting parties left to campaign without old and new levers of the State to exploit. Such caretakers will also ensure that foreign policy and national security aren’t sacrificed due to electoral expediency or political theatre.