Evolving Asiatic Axis: China-Russia-India | By Sampurna Mukherjee

Evolving Asiatic Axis: China-Russia-India 

By Sampurna Mukherjee 

 

 

In October 2019, Singapore, a South-East country, signed a Free Trade Agreement with the Eurasian Economic Union (EAEU), an economic trade bloc loosely modelled on the European Union (EU), in order to integrate and resemble an assembly of former Soviet Union states including Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. This is an especially significant development for a more prominent member of the group occupying the international stage to a larger extent than the others i.e. Russia.

Russia has managed to strike a “diplomatic score”, since such a agreement would expedite a two fold objective of granting an impetus to its companies or businesses as increased foreign capital inflow into the Russian economy using Singaporean subsidiaries and in turn propel and cushion China’s unavoidable growing influence on the Russian economy, a driving partnership of conflicting interests and nationalistic tendencies to combat the growing unilateralism of the Western world. An added advantage of signing the FTA with Singapore is the fact that it is  already a member of the Association of Southeast Asian Nations (ASEAN), which would allow Russian businesses incorporated in Singapore to penetrate and utilise free trade with the other South-Asian markets as part of ASEAN to the likes of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Thailand and Vietnam as well as engage with China and India through the FTAs that were signed between Singapore-China and Singapore-India.

Moscow, Russia | Photo by Alexander Smagin on Unsplash

It is no secret that Chinese goods have infiltrated global markets using a combination of theoretical strong-creatively skill trained blend of individual and indigenous cultural preferences to create a dedicated transboundary consumer base with competitive pricing, making it the country with the largest exports in the world accounting for 12.79% of the world’s exports.

China’s trade relationship with ASEAN has seen quantum leaps in the last two years from a modest $40 billion in 2000, $480 billion in 2014 to $641 billion in 2019, including a surprising rise of 0.5% in the first two months against the backdrop of Covid-19. Russia will now have an opportunity to thrust itself in the South-Asian market and use China’s high technological and mechanically equipped advancement in terms of both electrical and mechanical prowess gathered over the last few years which helped the former’s own economy reach a six-year high due to growing relations which has boosted its confidence after the Cold War era. Apart from this, in a separate yet tangent reading of another development this year, the Russia-led EAEU is in no mood to slow down as they expect an “early conclusion of the Free Trade Agreement between the EAEU and India with the next round of the Russian-Indian Strategic Economic Dialogue with the focus on transport, agriculture, small and medium enterprises”.

By doing so, Russia is also involving India as a partner to counteract China’s almost unchecked competition in Central Asian Republics for reasons mentioned above that make Chinese products lucrative for the world community. Now, at the onset, Free Trade Agreements are not always equally advantageous for the parties involved in it. If India obliges with EAEU on FTAs, security interests between Tajikistan and Delhi have the potential to deepen and solidify further as an introductory avenue into the Central Asian Republics (CARs) represented by two of the EAEU member states which is an important benefit to the Indian subcontinent in terms of its geopolitical significance. It would also not hurt the India-Kazakhstan relationship where the latter is India’s largest trading partner among the CARs. India’s exports to the five EAEU member states were valued at $1,539,617 million, while imports were approximately valued at $5,759 million, proving that the Eurasian market holds high potential for Indian goods.

On the flip side, predatory pricing, and increased vulnerability of new ventures could steer Indian hopes of capturing a substantial portion of the market in case the competition is disproportionately tilted to oust competitors and create a compact monopoly-like system. CARs are vastly important to both China and India since it covered half the Old Silk Route and this arrangement could help India to practically oppose the Belt Road Initiative (BRI), the aim of which is to capture more foreign markets and international trade dominance. Undertaken by China, it has been touted as the most ambitious project of the 21st century.

Russia has also moved to its Sino ally for a more pro-active role in the BRI project instead of being a “yes-man” only, by trying to involve institutions like the Russian led EAEU, as well as ASEAN that it now has an access to. BRI is not a fully altruistic-benevolent measure to both the host regions and China- debt risks, stranded infrastructure, environmental and social risks, and corruption are dangers cautioned by the World bank itself.

Regional blocs like The Shanghai Cooperation Organisation (SCO) is an example where all the three nation states as members converge. Interestingly, India and Russia are the largest trading partners of China within the SCO in 2018-19, overwhelming all the others present. SCO is also turning out to be a formidable economic union after the European Union (EU) along with ASEAN by accounting for 21% of the total global output and 19.8% of global trade.

With Russia in a position to mobilise South-Asian markets, including benefits of ASEAN as a group and an opportunity presented to India to secure its interests including a stomp on the objective of the OBOR, both countries stand to gain- Russia manages to stay under China’s shadows and bolster its economy at the same time to probably avoid playing second fiddle as a junior bloc in the Chinese dream of G2+ with America and compete as an equally strong economy while India’s vehement opposition to BRI also gets an alternative option-solution especially with the global health governance aspect of the BRI rejuvenated by China during Covid-19 along with a potential movement of goods in Russia due to the FTA apart from the other EAEU member states, CARs and ASEAN - keeping all interconnected centres in mind.

Russia’s entry ban for the Chinese raised eyebrows, and Russia has indicated its disapproval to be a part of the Trump proposed G7 extension that would  see “India, Australia, South Korea and Russia” come together in case there was a consensus, because it is an attempt to “exclude China” as a discriminatory act. China has also said that “a small circle against China is doomed to fail and is unpopular”, including threats of a trade war and tariff imposition. It is true that Russian-Sino relations have found common footing due to aligned interests. Inadvertently, India has higher chances of gaining albeit consciously or unconsciously.

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This article has been written by Sampurna Mukherjee. Her strong vocabulary and writing skills help her share her views eloquently, but she also loves to read, learn and paint to keep herself moving forward.

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All views presented in the article belong solely to the writer. The editor does not support or condemn the views, and neither does The Global Telescope. The Global Telescope remains impartial and promotes every individual's right to freedom of speech and expression while not holding any responsibility for the views presented whatsoever.