How the rise of COVID-19 in China is shaping the industry with India

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Welcome to Foreign Policy’s South Asia overview.

This week’s highlight: China’s COVID-19 outbreak is spreading to India, Pakistan receives $10 billion in new flood pledges, and India’s commerce secretary visits the United States.

If you would like to receive the South Asia Summary in your inbox every Thursday, please register here.

Welcome to Foreign Policy’s South Asia overview.

This week’s highlight: China’s COVID-19 outbreak is spreading to India, Pakistan receives $10 billion in new flood pledges, and India’s commerce secretary visits the United States.

If you would like to receive the South Asia Summary in your inbox every Thursday, please register here.

What does the COVID outbreak in China mean for India?

As COVID-19 cases continue to rise in China, India is taking protective measures reminiscent of the earlier stages of the pandemic. Travelers arriving in India from China, as well as from Hong Kong, Japan, South Korea, Singapore and Thailand, will be required to be tested for COVID-19, and those who test positive or show symptoms are quarantined. Indian fitness officials have called for vigilance, but the most damaging effects for India may only be economic.

India has come a long way since its own catastrophic COVID-19 outbreak just two years ago. Almost 70% of the population is fully vaccinated, particularly up from 46% a year ago. Despite the potentially worrisome symptoms, less than 30% of Indians have gained a boost and studies have uncovered doubts about vaccines among the elderly – the number of new cases so far has remained solid amid China’s wonderful wave.

However, India’s biggest immediate fear would arguably be the effects of China’s COVID-19 crisis on the bilateral industry, which has remained physically powerful despite severe border tensions. For decades, the two countries have increased the volume of their industry. In India’s fiscal year 2022, the industry with China amounted to more than $115 billion, an increase of nearly 35% over the past year. Chinese exports to India are a major driving force of this trend and India’s record industry’s deficit with China.

This is why the COVID-19 outbreak in China is worrying some Indian industrialists. India’s most sensitive imports from China come from electronics, chemicals and pharmaceuticals. Exportaciones. Si this would possibly reduce India’s industry deficit, India’s exports may also fall due to China’s economic slowdown and falling demand. India’s engineering products have already noticed a significant decline. , to Russia.

However, the Chinese wave of COVID-19 has potential positive implications for the industry in India. The Indian pharmaceutical industry has a great opportunity, although Indian media reports that the growing Chinese demand for COVID-19 medicines has, in fact, led to the flooding of Chinese markets with reasonable and falsified Indian medicines. Another conceivable merit is that Western tech companies, which are already considering offshoring some of their production from China to India because of Beijing’s political environment, now have an additional incentive to focus on India.

So far, no South Asian country other than India has imposed new restrictions on travelers from China. But any surprises in the chain of origin can also prove negative for Pakistan, which relies heavily on China for economic aid and infrastructure assistance. Most countries in the region have gained investments from China in recent years. The volume of industry of other South Asian states with China is less than that of India and Pakistan, some small countries rely heavily on it for industry. For example, China is Nepal’s largest trading partner. .

India, which now has a positive macroeconomic outlook, can reap strategic benefits against the backdrop of the fitness crisis and economic tensions in China. In its intense strategic festival with Beijing, New Delhi can redouble its efforts to generate investments in South Asia, from infrastructure to COVID-19 vaccines. In early 2021, before its own increase, India was one of the leading suppliers of COVID-19 vaccines in the region. Beijing then capitalized on and improved its own vaccine delivery efforts.

Will Indian Prime Minister Narendra Modi donate COVID-19 vaccines to his Chinese rival?This is unlikely, and Beijing will most likely reject the offer as it has done in the past with Washington. With nine state elections in India this year and national elections According to polls looming in 2024, this may not be the time to make a comfortable gesture towards China either. But this is ruled out for a leader known for his ambitious and unforeseen moves.

What we track

Pakistan gets new pledges of flood aid. This week, Pakistani Prime Minister Shehbaz Sharif and UN Secretary-General António Guterres hosted a pledging convention in Geneva, where Pakistan won about $10 billion in pledges in food aid and recovery from last year’s devastating floods. Pakistan is still recovering from the disaster, which has submerged a third of the country and affected 33 million people.

According to UNICEF’s latest update, approximately 15 million people in Pakistan are still in need of emergency food assistance and 10 million young people are in need of immediate assistance. An estimated $40 billion in flood damage contributed to an economic crisis that could lead to Pakistan. to the breaking point of non-compliance. Most of the new commitments come from multilateral organizations, with the Islamic Development Bank, the World Bank, the Asian Development Bank and the Asian Infrastructure Investment Bank offering maximum assistance.

Key main points about the pledges are not yet public, adding how the investment will flow and which government entities will oversee it. It will also take time for the budget to succeed in Pakistan. On Wednesday, Pakistan’s Finance Minister Ishaq Dar declared that nearly 90 percent of the pledges would be loans. With this new support, Islamabad cannot be complacent. But the government, distracted by an economic crisis, terrorist threats and a dispute with opposition leader Imran Khan, shows little sign it will cause flooding. Relief a sustainable priority.

Visit of the Minister of Commerce of India The Minister of Commerce of the United StatesU. S. Secretary of State Piyush Goyal visited New York and Washington this week, where he met with U. S. Treasury Secretary Piyush Goyal. U. S. Trade Representative Gina Raimondo and U. S. Trade Representative Katherine Tai attended the 13th India-U. S. meeting. U. S. Trade Policy Forum. In New York, Goyal met with top American leaders. In line with the expansion of bilateral relations, the volume of the industry between the United States and India recently reached new highs, setting a record $113 billion in 2021.

But the industry has also been a flashpoint for India and the United States. Disagreements over price lists nearly sparked a war in the industry under the Trump administration, and those issues remain unresolved. Despite common exchanges between business leaders on both sides, some Americans. financiers remain involved in problematic tax policies, overregulation and other features of India’s investment environment.

The aid leader called on the West to strengthen the Taliban’s commitment. The head of the Norwegian Refugee Council, Jan Egeland, is in Kabul this week to press Taliban leaders to rescind their ban on employing women in non-governmental organizations. While criticizing the Taliban’s decision, he called on Western states to send diplomats back to Kabul for the sake of the Afghan people. A senior UN official, Markus Potzel, made a comment last month when he pleaded with Western countries to reopen their embassies in Kabul.

At first glance, such a policy would probably seem only to praise the Taliban. Many officials, adding in Washington, are lately contemplating punitive measures that come with new sanctions against Taliban leaders and even cuts in humanitarian aid. There would be some other motivation for calling Western diplomats back to Kabul: it would allow imaginable lines of communication with Mullah Hibatullah Akhundzada, the ideal Taliban leader who legalized the group’s recent draconian measures.

Foreign diplomats are meeting with Taliban leaders in Qatar, where most of the staff of closed embassies in Kabul are now based. But those leaders tend to belong to the more moderate faction of the Taliban, some of whom disagree with Akhundzada’s measures. Akhundzada is hidden in the city of Kandahar and is not known to travel. Foreign diplomats probably wouldn’t be able to meet with him, but they would only know if they tried.

Under the radar

On Tuesday, the Nepal Army announced the start of joint army training with the United States that will last until February 3. Thirty-five Nepalese officials will participate with 19 members of the U. S. military. The year marks the twelfth iteration of those workouts, however, the timing of this year’s occasion is remarkable. The trainings began the day Pushpa Kamal Dahal won a confidence vote in parliament, paving the way for him as Nepal’s next prime minister after last November’s elections. .

Dahal, a veteran Maoist still known for his nom de guerre Prachanda, formed a new alliance with his former rival, former Prime Minister K. P. Sharma Oli, who oversaw an improvement in relations with China. Dahal’s alliance with Oli, along with his ideological similarities to China, has some Indian commentators who fear it will bring Kathmandu closer to Beijing’s orbit. However, Dahal says it needs relations with China and India, in line with Nepal’s long-standing official position.

U. S. Army training The US and Nepal can be interpreted as a mirror image of this policy, that it seems that Nepal’s new leadership may seek warmer ties with China, but this will not save it from wearing down activities that also correspond to India’s interests.

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