Indian economy can’t back costly border tensions

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Source: Global Times

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India’s economy is sinking, but it is perplexing that the Modi government appears more interested in drilling more holes in its economic ship instead of fixing it.

As the coronavirus pandemic has had devastating impacts on the country’s business activities, India’s GDP plunged 23.9 percent in the three months to the end of June, marking its worst plunge since India started compiling quarterly GDP data in 1996. And with the world’s third-highest number of coronavirus death toll, India is still far from bringing the virus under control.

In the face of such unprecedented economic shocks, the Indian government hasn’t responded with any massive fiscal policy, but instead has been reportedly accelerating its weapon purchases these days. Such a choice might have geopolitical considerations, but it doesn’t make any economic sense at all, given the fact that India’s current economic conditions cannot back the border tensions for long.

On Monday, Indian troops once again illegally crossed the Line of Actual Control (LAC) near the south bank of the Pangong Lake and Reqin mountain pass, according to China’s Western Theatre Command. As new border tensions flare up, both sides have deployed tanks and additional troops, India media reported.

Supporting LAC deployment in large numbers at a high-altitude region is expensive, which may exhaust India’s financial capability with logistics and supplies costs of a lot of money each day. As the winter approaches, the military spending for essential troop supplies may soar even higher.

While India’s army officials like Chief of Defence Staff General Bipin Rawat already claimed that the military was ready for deployment in harsh winter, such radical and hardline tone may sound fragile and feeble under the heavy cost pressure of military supplies.

The Indian government may be trying to create new border tensions to show that there is something more important than bringing the coronavirus outbreak under control or solving its economic woes, but that is simply a lame attempt to hide its inability to address its domestic problems. It is true that economic setbacks may make it easier for India’s nationalistic sentiment to be incited, but the political elites should see that the costly border tensions is nothing but a poisonous relief for domestic frustration over the economic slump. Geopolitical tensions will not only hurt a country’s foreign cooperation, and affect its integration into the regional industrial chain, but also deliver a blow to market confidence, thus scaring off investment and trade.

India needs to recognize the real economic repercussions of the war shadow, as the costly military logistics and supplies for winter deployment seem increasingly unaffordable for its shaky domestic economy.

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