Everybody, Peter Zion, here it is the 21st of June. Here’s loci. Today we’re talking about Andy. Look, he’s from India, Bengal. Anyway, Prime Minister Modi is in Washington right now. And by the time you see this on Thursday, he’ll be getting ready for his address to Congress as well as official state dinner. There was some debate in Biden world about whether this is going to happen, because in the past Prime Minister Modi, especially before he was Prime Minister hasn’t been a particularly nice guy. Little on the corrupt side, a lot of the pocket the side is willing to use religious divisions in order to further his political agenda, which is, you know, relatively distasteful from the American point of view, and a lot of other points of view. Many would argue the Indian Point of View, anyway, he is still the leader of the most populous country in the world and up and coming power. So obviously, there was going to be a summit the question whether he would be welcomed as warmly as he has a few things we need to talk about India, the Indians and the relationship with the wider world in the United States in particular, first, and most obviously, the Biden administration has a few things that it wants from the Indian administration, they would like more cooperation on things like the Ukraine more in sanctioning Russia, they would like more cooperation on things like tech sanctions, and in general, the diplomatic isolation of China, and the Biden administration is going to get none of that. The key thing to remember about India, is that India looks out for India’s own best interests. And while every country does that, to some degree, the big difference between India and everyone else is that India is not really a country. It’s more like the Holy Roman Empire, where there is technically a central government, but almost all decisions that matter are made at the state and local level. And so while Modi is nominally the leader of this, and that does give him significant power and influence, he is only the most powerful of several dozen personalities across the Indian system, who have decision making power. And so the capacity of India to act like a state in the way that we think of that with France, and China and Japan to the United States, and the rest is very, very weak. Second, because of this internal fractious, ever shifting coalition and competition, India, first and foremost concerned about how the things in the world impact India, that makes it very, very difficult for the Indians to identify with any other power in terms of friendship, or family or alliances, and sometimes even partnership. So unless they see someone on the outside that is backing them into the hilt for absolutely every little thing they care about. They’re going to call the relationship at best complicated and cold. It’s a very myopic way of looking at the world. But India has a very peculiar geography. It’s basically locked off from the rest of the world by a series of geographic and geopolitical barriers. There are mountains and deserts and oceans, and jungles, and jungle mountain and jungle deserts. Not general desert, sorry, desert mountains, that separated from everyone. And that’s not even all of it. Because on a lot of these border territories, you’ve got hostile powers, whether it’s Pakistan, Bangladesh, Myanmar, or, of course, China. So the ability of India to interact with the rest of the world has always been circumscribed. And unless you are willing to back India on everything that involves their immediate neighborhood without question, they’re going to view with you with it suspicion. This is one of the reasons why the Soviets during the Cold War, were able to make India into a bit of a partner, because they had no interest in Southeast Asia. So they just backed whoever happened to be the biggest power India against everyone else. And so the Indians developed a bit of a shine on all things Moscow, which has persisted long after the communist system has ended. What this means for the United States is India can never be family, it can never be an ally, it can never be a friend. But it can be a partner from time to time. But because the Indians view everything through the very short sighted lens of national interest, they don’t have anyone who will watch their back. The Russians have proven they’re not a reliable partner, and the Indians are backing away from their defense cooperation with them, because the Indians now realize that the money that they’ve spent has been wasted, that the Russians can’t maintain their own output. They’re actually asking for some of the components back in order to support the war in Ukraine, and that the high end works like the BrahMos cruise missile, that’s just not going to happen at all. And so the aliens out there not dumb, the short side, there’s a difference and then eventually you get to a certain point where they realize that now they would only be putting good money after bad and that means the Russian partnership, if that’s the right term, is now functionally over as well. India is also not going to help the United States in boxing in the Chinese because they have Hard times seen past their own nose, and anything that reeks of American leadership, which obviously would be in play here is something that Indians are going to reflexively recoil against. Now, does this mean that I think India is doomed? No far from it, a couple of big things to keep in mind. Number one, geography works both ways. India has a hard time projecting out other powers have a hard time projecting and especially on land for naval powers, like the United States or Japan, that’s less true. And that’s one of the reasons why this quad idea exists. Because Japan, Australia, the United States, and India can cooperate to a degree on naval issues that affect the Indian ocean basin. Because Japan, Australia, United States don’t have strong interests in the Indian ocean basin, especially now that the war on terror has been closed down. There was a period for the last 20 years where Indian American relations were not hostile but problematic, because the United States had to be up to its hips in all things Pakistan in order to get military supplies to its operation in Afghanistan, now that that’s over the Indians and the Americans can commiserate about how much they dislike all things Pakistani, and that’s done wonders for the relationship. Second, India is the first major country after you leave the Persian Gulf, which means that no matter what happens with global commerce or global energy, India is the first in line and it will never really have an energy crisis compared to what’s shaping up for the rest of the world. That’s amazing. Third, India’s demographic structure, while not perfect is night and day different from the country they love to compare themselves to. And that is China. New data out of China in just the last few weeks indicates the demographic profiles far worse than even I thought. The Chinese are now publicly admitting they have about half as many five year olds as 10 year olds. So you carry that forward with some of the other problems that they’ve identified with their own demographic strategy. And it looks like whatever I was thinking was going to happen, which was already pretty atrocious, may have already happened. And we’re looking to complete hollowing out. Now India has started to industrialize in a big way 3035 years ago, and so the birthrate has dropped. But at current rates of birth rate decline, India will not find itself in a Chinese style situation for another 60 to 70 years. And that’s a long time for things to go. Right. So India does have a demographic dividend that goes along with young adults that have fewer children in the past, that generally spells an opportunity for a 20 to 30 year consumption driven growth opportunity. That’s not without risk, but on the mechanics of it, the next couple of decades look great. And then fourth, as the Chinese face problems, a lot of the manufactured goods that the world has been importing from the Chinese system, we’re gonna go away. Now. And that means if countries still want stuff, they’re gonna have to build out their own networks to build that stuff themselves. If that applies to India, just as much as everywhere else, so we should expect to see a two to three decade industrial boom in the Indian space as well. Now, it will be different from what’s happening in Mexico, because remember, India has no allies, no friends, and very few partners, and those partners are erratic. So the sort of manufacturing synergies that Canada, the United States and Mexico and to a lesser degree Central American Columbia can generate, India has to do it all itself. And that means it’ll be more expensive, more time consuming and slower to happen, use more labor, be less productive, less efficient, at the end of the day, have lower quality product. But in a fractured world, India will have something that a lot of countries won’t. It’ll still have stuff. And in that sort of world, India looks good. They are perfectly capable, the Indians of running an economy that is globally significant, without being one that is globally wired. So for Biden, do I think anything of substance is going to come out of the summit? No, the geography of India, the politics of India, the ideology, and it probably precludes that. But that doesn’t mean that the relationship has to be hostile. And if there’s going to be a major power in a different hemisphere in a strategically interesting area, you should at least have a conversation. And so think of that as what’s going on with the Biden administration right now. Not a plan for the future. A conversation about we could do a lot worse. All right. That’s it. Take care. Bye.
