Day: April 20, 2021

The year gone by will for long be remembered as one of the most tumultuous years for the world in living memory. India’s economy was already under considerable strain and was showing early signs of systemic fault lines. The arrival of the pandemic at the beginning of the year and its quick spread exacerbated the already fragile situation, pushing the economy towards a downward spiral and into a recessionary mode. The economic shock and disruption caused by COVID-19 had a more telling and crippling effect on the unorganised daily wage sector and migrant workers, triggering a painful dislocation and social upheaval, causing much anguish and distress in rural India. In comparative terms, despite its dense population and fragile health infrastructure, India had till date managed the pandemic satisfactorily, especially so in respect of its fatality ratio. On the geopolitical front, India had a major spat with China after nearly sixty years. Large, heavily armed forces of both sides are as of now locked in a tense stand-off. Any military miscalculation or foolhardy adventure by either side can quickly snowball into a sharp and escalatory conflagration. An objective strategic assessment would suggest that both sides are on even terms, with perhaps a slight tactical advantage to India, allowing it a stronger negotiating posture. Going forward in the next year, one does not foresee any significant changes in the prevailing ground position. Any scope for de-escalation and disengagement can only happen at the highest political level of both sides. The chances of that happening soon are dim, as there is too much at stake for either side to show weakness. A stalemate in the near term is therefore more likely. India would have to be very alert once the campaigning season restarts in June, and both sides jockey for tactical advantage. One thing is for sure, that the clash had brought India and the USA closer together strategically and militarily. This relationship is likely to endure even under the Biden administration, as containing China by all possible means would continue to be the fundamental plank of US policy in the Indo Pacific. The clash had also given an impetus to the QUAD grouping; and the recent joint naval exercises are a pointer to a seriousness of intent. In the coming year, more developments and growth in QUAD and QUAD plus can be expected. Indo-Australian relations, both military and economic, will see an upward swing as Australia and China appear to be drifting apart. The UK, having left Brexit, will look towards India for increased trade, and economic relations will be on the upswing. Indian economy is coming out of recession and despite all constraints, is likely to be the world’s fastest growing economy with anticipated growth rate of 8 to 8.5% and going on to 9 plus in the ensuing years. Once the pandemic is fully under control and an effective vaccine is deployed, one can expect things to be hopefully normal by the second to third quarter of next year. Agricultural reforms introduced by the Modi Govt have met with much headwind. Even though the farm laws are technically good for the agricultural sector, sadly the government had brought them in a hurry and without building a reasonable consensus or communicating the benefits/ safeguards to the polity effectively. It is hoped that most of the contentious issues will be resolved. This though will involve very astute and benign handling, or else given the current mood it may spiral out of control. Nearly 5 Indian states go for elections in 2021 with West Bengal being the most crucial, followed by Assam and Tamil Nadu. The results of these state elections will be like a midcourse referendum of the current disposition. A change of government in West Bengal would be a tall ask for the BJP but TMC would definitely be weakened and lose its grip on the state. Whatever be the final result, due to the high stakes and passions involved, violence during the run up and during elections is likely and would need monitoring. 2021 will be a very eventful year, especially in terms of economic recovery, and revival of the travel and hospitality sector. Schools are likely to open early next year if the current COVID-19 declining trends continue. Security scenario on the borders both with China and Pakistan will continue to be tense with distinct possibility of clashes resulting in casualties. A full-scale war or even a sectoral conflict is less likely as both sides are unwilling to escalate matters. As we move forward, security professionals are likely to face dynamic and more evolving security threats worldwide. As leaders have been focusing on recovering from the impact of COVID-19, security concerns related to border conflicts with China and Pakistan, situations of civil unrest, technological risks and consequences of climate change will have its impact besides the non-traditional threats in both the physical and cyber realms. OVERALL BUSINESS CLIMATE FOR 2021 For India, 2020 was a year of multiple reckonings. Between COVID-19, the lockdown and the pandemic’s economic consequences, the standoff in Ladakh, caused by the largest Chinese military mobilisation in memory, farmer protests on the outskirts of the national capital, and even cyclones were crowded out of news cycles. In terms of geopolitical developments, regional tensions are expected to continue. Besides violent clashes between India and China at the Galwan Valley and a border dispute with Nepal, complexities persist with Pakistan. While India had managed to maintain its ties with Nepal, relations with China and Pakistan are likely to remain strained in the same manner. Tensions along both borders will remain top priorities for security establishments, with probability of more clashes along the Line of Actual Control (LAC) and continued cross border infiltration along the Line of Control (LoC). The impact of the 2020 pandemic in India had been highly disruptive as the country had contributed the second highest number of COVID-19 cases. While the market forecasts have predicted a drop of 18.3 percent, the Indian economy shrank…