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Category: Open Trade
Is This the End of Dollar Dominance?
At the Kazan Summit, Russia made a concerted push for the creation of a new payment system, aiming to provide an alternative to the global bank messaging network SWIFT. This proposal is part of Moscow’s strategy to circumvent Western sanctions imposed in response to its war in Ukraine.
Russian President Vladimir Putin envisions BRICS—recently expanded to include Egypt, Ethiopia, Iran, and the United Arab Emirates alongside Brazil, Russia, India, China, and South Africa—as a powerful counterweight to Western influence in global politics and trade. A cornerstone of this vision is an alternative international payment platform, designed to shield participating nations from Western sanctions and reduce reliance on the US dollar.
The Kazan Summit, held from October 22 to 24, 2024, was presented by Moscow as evidence that Western attempts to isolate Russia have failed. Central to Russia’s agenda was its call for overhauling the global financial system to diminish the dominance of the dollar.
Central to this initiative is a proposal for a new payment system based on a network of commercial banks linked through the BRICS central banks, as outlined in a document prepared by Russia’s finance ministry and central bank, and distributed to journalists ahead of the Summit.
The proposed system would leverage blockchain technology to store and transfer digital tokens backed by national currencies. This framework would enable these currencies to be exchanged securely and efficiently, bypassing the need for transactions in U.S. dollars.
Russia views this proposal as a solution to its growing challenges in settling trade payments, even with friendly nations like China, where local banks are wary of potential secondary sanctions imposed by the United States.
One specific mechanism under discussion is the BRICS Cross-Border Payment System, designed to facilitate trade in local currencies. This shift is partially driven by perceptions of increasing risks associated with the U.S. dollar. However, the focus on local currencies is not solely about de-dollarisation but also about achieving cheaper and more efficient transactions.
For Russia, cut off from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), this represents a financial lifeline. For Egypt, it offers a way to alleviate pressure on foreign reserves. Meanwhile, South Africa, Brazil, and India are adopting a more cautious approach, favouring diversification without fully divesting from the dollar.
Russian President Vladimir Putin, who presided over the closing session of the BRICS Summit, lauded the Bloc’s role in countering Western policies. He emphasised the need for a new payment system to bypass sanctions, aiming to counterbalance what he referred to as the West’s “perverse methods.”
Putin accused the West of attempting to suppress the rising power of the Global South through illegal unilateral sanctions, blatant protectionism, manipulation of currency and stock markets, and persistent foreign influence, all under the guise of promoting democracy, human rights, and the climate change agenda.
“Such perverse methods and approaches – to put it bluntly – lead to the emergence of new conflicts and the exacerbation of existing disputes,” Putin stated.
However, Yaroslav Lissovolik, founder of the BRICS+ Analytics think tank, noted that while the creation of such a system is technically feasible, it would take time. “After the significant expansion of BRICS membership last year, achieving consensus has arguably become more challenging,” he remarked.
The Russian document accuses existing institutions, such as the International Monetary Fund (IMF), of primarily serving the interests of Western countries and argues that these institutions need reforms to reflect the evolving global economy better. Russian Finance Minister Anton Siluanov recently urged BRICS members to establish an alternative to the IMF.
In addition to proposals aimed at facilitating trade and investment, Russia has put forward the idea of creating a ‘BRICS Clear’ platform to facilitate trade in securities. The document also calls for improved communication between credit rating agencies in BRICS countries, alongside the development of a common rating methodology. However, it stopped short of advocating the establishment of a joint BRICS rating agency, an idea that the Group had previously discussed.
A BRICS Grain Exchange
As the world’s top wheat exporter, Russia is also advocating for the creation of a BRICS grain trading exchange, supported by a pricing agency, to serve as an alternative to Western exchanges that currently set international agricultural commodity prices. Russia’s multifaceted initiatives underscore its determination to challenge Western dominance in global finance and trade. Whether these proposals gain traction depends on the ability of BRICS nations to navigate technical, political, and logistical hurdles. While the path to implementation may be fraught with challenges, the discussions signal a shift in the global economic order and the waning supremacy of the US dollar.
Cover Story16th BRICS Summit Strengthening Multilateralism for Fair Global Development and SecurityCover Story
The 16th BRICS Summit in Kazan, Russia, marked a transformative moment in the evolution of the Bloc, solidifying its role as a crucial platform for the Global South in addressing global challenges. As an inclusive multilateral forum open to emerging markets and developing countries, BRICS has positioned itself as a champion of international cooperation and sustainable development. With its continued growth and influence, the Bloc raises significant questions for the West about the keys to its success. For those seeking answers, the 2024 BRICS Summit offered many insights, writes Ivor Vaz.
The 16th annual BRICS Summit, held from October 22-24, 2024, in Kazan, Russia, was the first to feature Egypt, Ethiopia, Iran, and the United Arab Emirates as members following their accession at the 15th Summit. The theme, Strengthening Multilateralism for Fair Global Development and Security, underscored the Bloc’s commitment to a more equitable global system.
Strengthening Russia’s Global Presence
Patryk Kugiel, Chief Analyst at the Asia-Pacific Programme of the Polish Institute of International Affairs, highlighted the Summit’s role in reshaping perceptions of Russia. “The worst mistake the West can make is to dismiss the Summit as mere theatre,” he warned, emphasising its diplomatic and strategic significance.
Says Kugiel: “The Summit was historic for two main reasons. First, as expected, it provided an easy diplomatic victory for Vladimir Putin. The Russian President demonstrated that he has not been isolated, trading an extra seat at the Group of Seven (G7) for a central role in the ‘B9,’ and potentially in an expanded ‘B-more’ in the future. Moreover, by advancing discussions on prioritising transactions in national currencies, he further loosened the grip of sanctions. He also positioned himself as a mediator by facilitating talks between the leaders of China and India for the first time in five years.”
“Secondly, and more importantly, it marked the first expansion of the Group since South Africa joined in 2010. Not only did the Summit add four new members, but over 30 countries reportedly expressed interest in future membership. Additionally, 13 States have already been admitted to the newly created category of partner countries. While expansion may amplify internal differences with potentially negative implications for cohesion, it also underscores the growing appeal of BRICS in the Global South,” he added.
Fyodor Lukyanov, Chair of the Council on Foreign and Defence Policy (Russia), echoed these sentiments, “The 2024 BRICS Summit demonstrated that Russia’s isolation is a Western construct. The rest of the world sees little value in joining the policy of pressuring Russia, irrespective of their stance on specific Russian actions.”
Milestones and Innovations
The Kazan Summit introduced significant developments that could reshape global economic and political landscapes. The Summit formally welcomed the new BRICS members: Egypt, Ethiopia, Iran, and the United Arab Emirates (UAE). Notably, Argentina, expected to join, opted out in late 2023 due to a policy shift under President Javier Milei, reflecting a significant geopolitical development in Latin America, while Saudi Arabia is still considering its formal invitation.
Meanwhile, Miguel Díaz-Canel, the President of Cuba, was invited to the Summit but remained in Cuba due to the 2024 blackout. Aleksandar Vučić, the President of Serbia, could not attend because of a conflicting visit from European Union representatives to Serbia. Cuba and Serbia sent representatives to the Summit.
A core focus of the 2024 Summit was modernising security and economic cooperation, with key discussions ranging from counterterrorism to carbon-unit trading. The Summit also addressed critical security challenges, including cybersecurity, terrorism, and regional stability. Historically, the BRICS have been more successful in opposing Western dominance in global governance structures than in articulating a clear, cohesive vision for reform. The increased diversity within the expanded BRICS Bloc could complicate efforts to achieve unified policy positions, particularly in multilateral forums such as the Group of Twenty (G20).
While the Organisation of the Petroleum Exporting Countries Plus (OPEC+) will continue to manage the international oil market, the expanded BRICS energy profile could influence the sector in the long term. Including the UAE and Iran significantly boosts the BRICS energy profile, and if Saudi Arabia formally accepts BRICS membership, the Bloc will represent 42% of the global oil supply. The presence of major oil exporters alongside key importers, China and India—both of which did not favour Western sanctions on Russia—highlights the Bloc’s potential to establish alternative trade mechanisms that bypass the dominance of the U.S. dollar and the financial influence of the Group of Seven (G7).
Key Outcomes
During the Summit, BRICS members introduced a revolutionary payment system named BRICS Pay, designed to streamline transactions and enable the exchange of financial information between the central banks of member nations. This system is an alternative to the Western interbank system SWIFT, facilitating smoother and more autonomous international settlements.
The BRICS Kazan Declaration was officially adopted, signalling a unified commitment to significant global reforms. BRICS nations emphasised the need to reform the United Nations and its Security Council, advocating for the full participation of the State of Palestine in the UN, contingent upon achieving a two-state solution. Additionally, BRICS nations agreed to explore the feasibility of establishing an autonomous cross-border settlement and depository system. To this end, finance ministers will continue evaluating the utilisation of national currencies, innovative payment tools, and alternative platforms, with a detailed report expected during the forthcoming Presidency.
On October 24, Russia hosted a plenary session of the 16th BRICS Summit in the BRICS Plus/Outreach format. This gathering brought together leaders from the Commonwealth of Independent States (CIS), delegations from Asian, African, Middle Eastern, and Latin American nations, and heads of multiple international organisations, underscoring the Bloc’s expansive and inclusive approach.
In a significant step towards broader collaboration, 13 nations have been welcomed as BRICS partner countries. These include Algeria, Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Nigeria, Thailand, Turkey, Uganda, Uzbekistan, and Vietnam. This expansion highlights the growing appeal of BRICS as a platform for fostering global cooperation and addressing shared challenges across diverse regions.
Bilateral Dialogues: Deepening Partnerships
A series of high-level bilateral meetings during the Summit highlighted the Bloc’s role in fostering collaboration:
• China-Russia Cooperation
Chinese President Xi Jinping and Russian President Vladimir Putin held a bilateral meeting in Kazan, reaffirming the strength of China–Russia relations. Both leaders described their partnership as profound and resilient, even amidst turbulent geopolitical conditions. They emphasised the importance of advancing the comprehensive integration of the Belt and Road Initiative with the Eurasian Economic Union, a move aimed at facilitating and bolstering the high-quality development of their economies.
In anticipation of the 80th anniversary of the establishment of the United Nations and the victory in World War II in 2025, China and Russia agreed to deepen their comprehensive strategic cooperation. They pledged to uphold the international system centred on the United Nations.
The leaders also articulated a shared vision for enhancing the BRICS cooperation framework, to achieve what they termed “Greater BRICS Cooperation.”
Russia expressed interest in developing an alternative international payment solution within the BRICS framework to reduce dependence on traditional Western financial structures and mitigate the impact of U.S. secondary sanctions.
• India-China Rapprochement
Indian Prime Minister Narendra Modi and Chinese President Xi Jinping held their first formal bilateral meeting in five years, following the deadly military clash between the two nations in 2020. The leaders announced they had agreed to resolve the four-year-long standoff, including the complete disengagement of troops. President Xi underscored the significance of the two ancient civilisations in the Global South, asserting that a stable and cooperative India-China relationship could serve as a model for other emerging nations.
Prime Minister Modi highlighted that maintaining steady progress in India–China relations is essential for the welfare and future of their combined 2.8 billion people. He noted that this stability is vital for their respective populations and for fostering regional and global peace and stability. Both nations agreed to approach their relationship with a strategic and long-term perspective. They stressed the importance of preventing isolated issues from adversely impacting their broader ties.
• India-Iran Partnership:
Discussions between PM Modi and Iranian President Masoud Pezeshkian focused on strengthening trade and connectivity through the Chabahar Port and the International North-South Transport Corridor. They also addressed regional stability and the Israeli-Palestinian conflict.
President Pezeshkian accepted the invitation from PM Modi to visit India.
• Russia-South Africa Alignment:
South African President Cyril Ramaphosa held a bilateral meeting with Russian President Vladimir and reaffirmed Russia’s role as a “valued ally,” citing its support during the apartheid era.
Indian Prime Minister Narendra Modi and South African President Cyril Ramaphosa opted to attend the BRICS Summit over the 2024 Commonwealth Heads of Government Meeting (CHOGM), which took place in Samoa during the same week. The Independent noted that this decision highlights the prioritisation by these two Commonwealth nations of strengthening ties with China and Russia over the broader, yet less focused, agenda of CHOGM.
Brazil: Where Heaven Meets Earth
With its breathtaking waterfalls, vibrant culture, unique cuisine, some of the world’s most stunning beaches, and thrilling adventures, Brazil offers a variety of tourism experiences tailored to every preference. Prepare to be amazed by the wonders of this captivating country, as promised by Ivor Vaz.
Brazil, often regarded as one of the most underrated travel destinations globally, is a treasure trove of experiences waiting to be uncovered. While it is already a popular destination for tourists, with tourism playing a pivotal role in its economy, the country’s true essence remains underexplored. Iconic destinations such as Rio de Janeiro, Santa Catarina, São Paulo, Minas Gerais, Iguazu Falls, and the Pantanal offer unforgettable experiences for every traveller.
In 2023, Brazil welcomed 5,908,341 foreign visitors, a 62.7% increase from 2022 and just shy of the 6.3 million recorded in 2019 before the pandemic. These figures, reported by Embratur, the Ministry of Tourism, also exceeded the World Tourism Organization’s projections for Brazil by 3%.
Diverse Landscapes
Brazil boasts an astonishing variety of landscapes, from the lush Amazon Rainforest and pristine beaches of Rio de Janeiro to the vast Pantanal wetlands and the awe-inspiring Iguazu Falls. This diversity offers travellers a range of experiences, making it a paradise for nature lovers and adventurers alike.
Cultural Riches
Brazil’s cultural fabric is a vibrant mosaic woven from indigenous heritage, Portuguese colonial influences, and contributions from African, European, and Asian immigrants. This unique blend is reflected in its music, dance, art, and cuisine. Events like Rio de Janeiro’s Carnival, samba rhythms, and regional festivals celebrate the country’s rich cultural heritage.
Warm Hospitality
Renowned for their warm and welcoming nature, Brazilians create an inviting atmosphere that enhances the travel experience. Visitors often find themselves embraced by the genuine warmth of the locals, creating an inviting atmosphere that enhances the overall travel experience. The sense of community and the willingness to share their traditions make Brazil a welcoming destination.
Epicurean Delights
Brazilian cuisine is a delightful fusion of flavours and traditions. From the famous churrasco (barbecue) to feijoada (a hearty black bean stew), the culinary landscape caters to every palate. Food enthusiasts can explore bustling markets and street stalls to savour the authentic flavours of Brazil’s gastronomic wonders.
Adventure Opportunities
Brazil offers endless opportunities for thrill-seekers. Whether trekking through the Amazon, surfing in Florianópolis, or exploring the dramatic landscapes of Chapada Diamantina, adventure awaits at every turn for those seeking an adrenaline rush.
Affordability
Surprisingly budget-friendly, Brazil provides excellent value for travellers. Accommodations, meals, and activities are often more affordable than other global destinations, allowing visitors to maximise their experiences without overspending.
Off-the-Beaten-Path Gems
For those willing to venture beyond the iconic attractions, Brazil reveals hidden gems beyond the well-known attractions. Remote beaches, charming colonial towns, and untouched natural wonders await discovery.
Brazil’s status as an underrated travel destination underscores the vastness of its offerings, waiting to be explored by those seeking unique and enriching experiences. As you plan your next adventure, consider Brazil—a destination poised to exceed your expectations and leave you with memories to last a lifetime.
Eight Places You Must Visit in Brazil
There is an abundance to see and do in Brazil. Here are eight must-visit destinations in this Latin American paradise:
Rio de Janeiro
With over 450 years of history, Rio de Janeiro is a unique city that beautifully combines its geographic features—such as the sea, mountains, and forests—with vibrant human presence. To truly experience the energy of Brazilian culture, nothing compares to enjoying Carnival in Rio. Among the city’s most famous attractions are Sugarloaf Mountain, Christ the Redeemer, and Tijuca National Park. The Sugarloaf Cable Car, which operates at an altitude of 396 meters above sea level, connects Urca Mountain to Sugarloaf Mountain. Christ the Redeemer, with its open arms over Guanabara Bay, stands majestically on top of Corcovado Mountain, making it the largest and most renowned Art Deco sculpture in the world.
Commonly known as Sampa, São Paulo is a city that never sleeps. From theatrical performances and cultural exhibits to 24-hour bars and restaurants, visitors can always find something to do. The city shares its name with the state and boasts countless movie theatres, cultural centres, museums, historic buildings, parks, theatres, and art galleries. São Paulo’s nightlife is frenetic, creative, and inclusive, earning it a place among CNN’s list of the ten best places in the world for parties and nightlife. Additionally, the city is regarded as the Latin American capital of fine cuisine, featuring high-end international restaurants and sophisticated regional dishes crafted by renowned Brazilian chefs.
Belém
Belém, the capital of Pará, is a charming destination known for its beaches, forests, and historic heritage as well as modern tourist attractions. One of Belém’s main local highlights is a cultural complex called Estação das Docas (Wharf Station), which offers a variety of local cuisine, culture, fashion, and handicrafts. Visitors can enjoy performances of the carimbó, a traditional dance with Indigenous and African roots. As Belém is situated in the Amazon region, adventure seekers can explore trails in the forest or take boat rides to discover other beautiful beaches and islands in the region, such as Marajó, an island renowned for its natural beauty.
Manaus
Nestled in the heart of the Amazon Forest, Manaus is a city that boasts stunning architecture from the Rubber Boom era. The Amazonas Theatre, with its colourful dome adorned with 36,000 enamelled ceramic tiles, is a standout attraction. As the capital of Amazonas, Manaus serves as the main metropolitan hub of the region and is the natural gateway for exploring the Amazon Forest. Boats are the primary means of transportation to rainforest hotels and to witness the confluence of the Rio Negro and Solimões Rivers. Visitors can also observe Amazon River dolphins in Anavilhanas and visit places such as Moon Beach. Experience local gastronomy while touring the vast rivers and narrow streams that connect to riverside communities.
Foz do Iguaçu
In addition to the incredible Iguaçu Falls, Foz do Iguaçu boasts several attractions that will surely captivate you. Located in the extreme west of the State of Paraná, it is one of the icons of Brazilian tourism, thanks to the 275 majestic waterfalls that make up Iguaçu Falls. Situated in Iguaçu National Park, on the border between Brazil and Argentina, these Falls attract millions of visitors from around the world. Having earned a spot on the UNESCO World Natural Heritage List, the park’s stunning waterfalls were also voted one of the ‘World’s New Seven Wonders of Nature.’ Lonely Planet describes it as one of the top ten must-see places in the world, stating, “It’s an emotionally jaw-dropping experience. Everyone should see it at least once in their lifetime!”
Brasília
Brasília, Brazil’s third capital city, was planned just over 60 years ago, and its beauty lies in its intricate details, designs, and colours. Following Salvador and Rio de Janeiro, this audacious project has become a symbol of urban planning and modern architecture in the 20th century. Home to more than three million people, Brasília’s design, known as the Pilot Plan (Plano Piloto), was conceived by urban planner Lúcio Costa and architect Oscar Niemeyer. The layout resembles the shape of an aeroplane and has been included on UNESCO’s World Cultural Heritage List. Notably, Brasília is the city with the largest area on the Heritage List in the world. Its architecture stands apart from anything you have ever seen.
Fortaleza
Fortaleza, the capital city of Ceará in northeastern Brazil, has something for everyone. In addition to its countless stunning beaches, the city boasts a rich culture, delicious local cuisine, wonderful handicrafts, and beautiful architecture. Fortaleza offers various leisure options, including museums, theatres, handicraft markets, and a vibrant nightlife. Iracema Beach is a lively area where culture thrives, featuring movie theatres, a planetarium, and the Museum of Contemporary Art at the Dragão do Mar Centre of Culture and Arts. It becomes a bustling hub in the evenings with numerous bars, nightclubs, and live music. Visit the Central Market to take home an authentic souvenir from the city.
Salvador
The capital of the State of Bahia, Salvador, is renowned for its natural beauty and the strong influence of African culture. The Historic Centre of Salvador is where visitors can explore streets and architectural monuments dating back to Colonial Brazil, the Empire, and the First Republic. This culturally rich area includes the neighbourhoods of Sé, Pilar, and Pelourinho, which house historical monuments from the 17th, 18th, and 19th centuries. It is a popular destination for tourists seeking museums, theatres, churches, musical performances, local cuisine, and handicrafts. Salvador is home to more than 300 churches, including the São Francisco Church and Convent, classified as one of the Seven Wonders of Portuguese Origin in the World, and listed on the National Institute of Historic and Artistic Heritage List.
Forging Stronger Ties – A New Chapter in India-Sri Lanka Relations
President of Sri Lanka Anura Kumara Dissanayake’s three-day state visit to India was characterised by exceptional warmth and a welcoming atmosphere. The numerous meetings, a diverse range of topics discussed, and MoUs established during the visit reflect renewed vigour and energy in the bilateral relationship, writes Ivor Vaz.
Sri Lankan President Anura Kumara Dissanayake’s recently concluded three-day state visit to India (December 15-17, 2024) marks a significant milestone in the evolving relationship between the two neighbouring countries. His first official overseas trip since assuming office in September 2024 adheres to tradition and signifies continuity in India-Sri Lanka bilateral relations. The visit underscores a clear commitment to enhancing economic ties with India while addressing ongoing concerns about China’s influence in Sri Lanka. This is also Dissanayake’s first visit to India, which comes in the wake of the recently concluded presidential and parliamentary elections in Sri Lanka, amid a gradual recovery from the country’s economic crisis.
PM Narendra Modi presents a token of appreciation to the President of Sri Lanka,
Anura Kumara Dissayanake, at Hyderabad House, New Delhi
President of Sri Lanka Anura Kumara Dissayanake and PM Narendra Modi sign the joint agreement
Undertaken at the invitation of Indian Prime Minister Narendra Modi, the visit reflects Sri Lanka’s pivotal position in New Delhi’s ‘Neighbourhood First’ policy, given its 2,500-year-old civilisational ties, strategic location, and significant role in India’s regional initiatives. The choice of India as the destination for the new government’s first presidential visit highlights mutual trust, friendship, and strategic interdependence.
Earlier this year, India’s External Affairs Minister Dr. S. Jaishankar and National Security Adviser Ajit Doval visited Sri Lanka to participate in the Indian Ocean Rim Association (IORA) and the Colombo Security Conclave, respectively. Notably, Jaishankar’s visit marked the first diplomatic engagement by a foreign dignitary following Dissanayake’s assumption of office in September 2024.
During his meeting with PM Modi, Dissanayake expressed gratitude for India’s role in stabilising Sri Lanka’s economy during its collapse in 2022. He reiterated his vision for economic cooperation that prioritises sustainable development and recovery.
The visit culminated in a joint statement outlining various collaborative initiatives, from energy partnerships to regional security cooperation. India’s decision to supply liquefied natural gas (LNG) to Sri Lanka and partner in renewable energy projects reflects its ongoing commitment to help Sri Lanka diversify its energy sources. A major announcement was the agreement to build an energy pipeline connecting the two countries, a project involving the United Arab Emirates. This pipeline, alongside plans to establish Trincomalee as a regional energy hub, highlights India’s strategic interest in deepening its influence in the Indian Ocean region while addressing Sri Lanka’s critical energy needs.
Additionally, both countries emphasised the importance of resuming passenger ferry services and rehabilitating key infrastructure projects, such as the Kankesanthurai port, to enhance connectivity. India’s continued involvement in developing housing, transportation, and digital infrastructure aligns with its ‘Neighbourhood First’ policy and SAGAR (Security and Growth for All in the Region) initiative.
Balancing Opportunities and Challenges
While the agreements and announcements signal opportunities for economic recovery and stronger bilateral ties, concerns remain regarding their long-term implications for Sri Lanka’s sovereignty and economic independence. Criticism has emerged domestically, most notably from the Frontline Socialist Party (FSP), a breakaway faction of the Janatha Vimukthi Peramuna (JVP), which forms the core of the ruling National People’s Power coalition. The FSP has argued that these deals could disproportionately favour India while undermining Sri Lanka’s local workforce, resources, and autonomy. Such criticisms could impede the forward momentum of the Dissanayake administration, whose party had often criticised former President Ranil Wickremesinghe for his dealings with India.
In a statement, the FSP specifically raised alarms over the proposed development of Trincomalee into an Indian economic hub, which could displace over 7,000 families. The allocation of large tracts of land to foreign projects and the prospect of resource exploration rights being handed to Indian entities in regions like Mannar and Kuchchaveli have heightened fears that Sri Lanka’s natural wealth could be exploited at the expense of its people.
Another significant concern stems from the revival of the Economic and Technology Cooperation Agreement (ETCA), which Dissanayake had previously criticised. The FSP argued that ETCA’s provisions for liberalising trade in services could open Sri Lanka’s job market to an influx of Indian professionals, potentially displacing local workers. Critics warned that this could affect highly trained professionals and small-scale workers in industries like transportation, barbering, and street vending, as cheaper labour from India could overwhelm local job markets.
The energy sector, another key focus of the visit, also drew scrutiny. While India’s involvement in LNG supply, offshore wind power, and power grid interconnection could help address Sri Lanka’s immediate energy needs, critics argue that such partnerships could make Sri Lanka increasingly dependent on Indian energy infrastructure. The FSP highlighted Bangladesh’s experience with India, where energy agreements granted significant control to Indian conglomerates like the Adani Group, effectively reducing Bangladesh’s energy sovereignty. Similar fears are echoed in Sri Lanka, particularly as energy partnerships often lack transparency regarding long-term costs and benefits.
Geopolitical Considerations
These criticisms are further tied to broader geopolitical concerns. The FSP’s Wasantha Mudalige pointed to India’s long-term vision for regional dominance, citing the ‘Akhand Bharat’ concept, which imagines a unified South Asia under Indian influence. According to Mudalige, India’s increasing economic and strategic role in Sri Lanka could lead to an erosion of political autonomy, reducing Sri Lanka to a satellite state. Such sentiments reflect deep-seated anxieties within Sri Lankan society about maintaining national sovereignty while pursuing external partnerships.
Despite these concerns, Dissanayake’s visit also reflects a pragmatic approach to rebuilding the country’s economy following the devastating collapse of 2022. India’s financial support, which included $4 billion in aid for food, fuel, and medicines, played a crucial role in stabilising Sri Lanka’s economy during its most challenging period. The agreements reached during Dissanayake’s first presidential visit to New Delhi aim to build on that foundation by encouraging investment-led partnerships, improving connectivity, and enhancing trade. India’s plan to promote INR-LKR trade settlements could provide much-needed relief to Sri Lanka’s foreign exchange reserves, while proposed capacity-building programs, such as training 1,500 civil servants over the next five years, represent efforts to strengthen local governance structures.
Balancing the benefits of these initiatives with the risks they pose remains a challenge for Dissanayake’s government. Critics argue that Sri Lanka must approach these partnerships cautiously to ensure they align with the interests and aspirations of its people. While collaboration with India offers economic opportunities, transparency, equitable resource sharing, and protection of domestic industries must remain priorities. Dissanayake’s leadership will be tested in navigating these agreements to foster recovery without compromising Sri Lanka’s sovereignty or local livelihoods.
The visit has undoubtedly set the stage for a new chapter in bilateral relations. Its success will depend on how these agreements are implemented and whether they truly benefit Sri Lanka’s people. As the country strives to rebuild, Dissanayake’s government must strike a careful balance — leveraging India’s support while safeguarding Sri Lanka’s independence, economy, and long-term stability.
Significance of the Visit
The visit was pivotal in recalibrating relations under Colombo’s new administration. The Janatha Vimukthi Peramuna (People’s Liberation Front, also known as JVP) assumed the top executive role in Sri Lanka for the first time, bringing its Communist ideological framework to governance.
Historically, the JVP has been critical of India’s policies toward Sri Lanka. Thus, the visit offered a vital platform to address mutual concerns and strengthen cooperation in the face of emerging regional and global challenges.
Another significant aspect of the visit was to engage with India—a key development partner and primary responder—in addressing Sri Lanka’s ongoing financial crisis and recovery programmes.
From India’s perspective, the discussions were crucial for understanding the JVP’s policies, particularly regarding minority issues, and exploring ways to address its strategic interests in the region. The visit also aimed to expand this robust partnership and explore new frontiers of cooperation.
India-Sri Lanka Relations
The enduring friendship between India and Sri Lanka is exemplified by the extensive bilateral engagements since the establishment of diplomatic ties.
As India’s closest maritime neighbour, Sri Lanka plays a significant role in India’s Vision SAGAR (Security and Growth for All in the Region). Whether during natural disasters, the COVID-19 pandemic, or the 2022 economic crisis in Sri Lanka, India has consistently been the first to offer assistance.
Economically, India is Sri Lanka’s largest trading partner, with bilateral trade reaching $5.5 billion in 2023-24. India is also a top investor, with cumulative investments of $2.2 billion as of 2023. Furthermore, India has provided $5 billion in concessional loans and $600 million in grants as a development partner.
In defence and cultural spheres, the partnership includes training programmes, joint exercises, equipment provision, high-level visits, and goodwill visits by naval and coast guard vessels.
Visit Takeaways
The visit yielded several positive outcomes, underscored by the establishment of a new framework, ‘Fostering Partnerships for a Shared Future,’ aimed at deepening the comprehensive bilateral partnership.
Prime Minister Narendra Modi reaffirmed India’s unwavering commitment to assist Sri Lanka in its economic stabilisation and growth. His assurance of investment-led grants aimed at alleviating Sri Lanka’s debt burden underscores India’s long-term approach to fostering sustainable opportunities and economic growth in the region.
Key Outcomes
Financial Assistance: India announced $20.66 million in grant assistance to settle payments for seven completed line-of-credit projects and converted a $61.5 million credit project for rehabilitating Kankesanthurai Port into a grant.
IMF Collaboration: India’s pivotal role as co-chair of the Official Creditors Committee and its collaboration with the IMF continues to support Sri Lanka’s debt restructuring efforts.
Connectivity Initiatives
Plans for inter-grid connectivity, a multi-product petroleum pipeline, LNG supply, and progress on the Sampur Power Project.
Introduction of UPI services to boost digital connectivity in Sri Lanka.
Infrastructure and Development
$14.9 million in grant assistance for a signalling system on Sri Lanka’s Maho-Anuradhapura railway segment.
Accelerating the India-funded Unique Digital Identity project to establish a foundational digital ID program akin to India’s Aadhaar system.
Capacity Building
Launching an extensive scholarship program to support 100 economically disadvantaged students.
An MOU for training 1,500 Sri Lankan civil service officers over five years.
Trade and Taxation
Amending the Double Taxation Avoidance Agreement (DTA) to align with global standards, preventing tax treaty abuse.
This visit has set the stage for deeper economic cooperation, strategic alignment, and people-centric partnerships. However, its ultimate success will depend on how effectively these initiatives are implemented and balanced to respect Sri Lanka’s sovereignty while fostering regional stability.
India and Sri Lanka: Fostering Partnerships for a Shared Future
There was much to cheer about India and Sri Lanka’s joint statement that promised a long and strong partnership for a shared future…
India and Sri Lanka have embarked on a promising journey toward an enduring partnership, as outlined in their joint statement, highlighting a shared future of mutual benefit and collaboration. The meeting between India’s Prime Minister, Narendra Modi, and Sri Lanka’s President, Anura Kumara Dissayanake, on December 16, 2024, during the latter’s State visit to the Republic of India, marked a significant milestone in the bilateral relationship between the two neighbouring countries.
Strong Bilateral Foundations
The India-Sri Lanka relationship is deeply rooted in cultural, civilisational, and geographical ties, coupled with robust people-to-people relations. The two leaders reaffirmed their commitment to nurturing this partnership through cooperation in various domains. President Dissayanake expressed profound gratitude for India’s steadfast support to Sri Lanka, particularly during the unprecedented 2022 economic crisis. India’s assistance, both during and after the crisis, played a pivotal role in alleviating the suffering of the Sri Lankan people.
Reaffirming the commitment to shared goals, President Dissayanake acknowledged the importance of India’s support in fulfilling Sri Lanka’s aspirations for a prosperous future and sustained economic growth. Prime Minister Modi, in turn, reassured President Dissayanake of India’s unwavering commitment to supporting Sri Lanka’s recovery and development, consistent with India’s ‘Neighbourhood First’ policy and the ‘SAGAR’ vision (Security and Growth for All in the Region).
Both leaders emphasised that bilateral ties had deepened significantly over time, significantly contributing to Sri Lanka’s socioeconomic progress. They agreed on the importance of further strengthening their cooperation to foster mutual prosperity, reinforcing the foundation of a comprehensive partnership that prioritises the welfare of the peoples of both nations.
Political Engagements and Development Cooperation
Over the last decade, political exchanges between India and Sri Lanka have increased, leading to enhanced bilateral ties. Prime Minister Modi and President Disayanaka decided to step up political engagements at the leadership and ministerial levels. They recognise that regular parliamentary exchanges can advance democratic values and institutional best practices.
In the realm of development cooperation, India’s ongoing assistance has had a transformative impact on Sri Lanka’s socio-economic development. Despite the ongoing debt restructuring efforts, President Dissayanake lauded India’s continued support for critical projects, particularly those aimed at reducing Sri Lanka’s debt burden. Notable initiatives include the Indian Housing Project, the Hybrid Renewable Energy Project for three islands, and the High Impact Community Development Projects being implemented across Sri Lanka.
The two leaders also outlined several new areas for cooperation, focusing on people-oriented development projects, such as the completion of the Indian Housing Project’s Phase III and IV, and the solar electrification of religious places in Sri Lanka.
Training and Capacity Building
India has also played a vital role in supporting Sri Lanka’s capacity-building efforts. The two leaders agreed to organise focused training for 1,500 Sri Lankan civil servants over five years through the National Centre for Good Governance in India. Additionally, both leaders emphasised the need for further training programmes tailored to Sri Lanka’s specific needs in civil administration, defence, and legal fields.
Debt Restructuring and Economic Stability
India’s strategic support has played a vital role in Sri Lanka’s economic revival. President Dissayanake expressed his gratitude for India’s multi-faceted assistance, which included emergency financing, foreign exchange support, and India’s pivotal role in Sri Lanka’s debt restructuring process. As Co-Chair of the Official Creditors’ Committee (OCC), India facilitated the prompt finalisation of debt discussions, which was crucial in stabilising Sri Lanka’s economy.
Based on these efforts, the two leaders agreed to transition from debt-driven models to investment-led partnerships across various sectors. This approach is expected to ensure a more sustainable and resilient path to economic recovery, growth, and prosperity for Sri Lanka.
Enhancing Connectivity and Energy Development
The leaders recognised the importance of enhancing connectivity between the two nations, emphasising the potential for mutual economic growth. While they expressed satisfaction with the resumption of passenger ferry services between Nagapattinam and Kankesanthurai, both leaders agreed to expedite the re-establishment of the passenger ferry service between Rameshwaram and Talaimannar. Additionally, they explored the possibility of jointly rehabilitating the Kankesanthurai port with grant assistance from India.
Energy security remains a key priority for both nations. The two leaders underscored the significance of strengthening energy cooperation to ensure timely and affordable energy resources for both countries. Key initiatives discussed include the solar power project in Sampur, LNG supply from India to Sri Lanka, and establishing a high-capacity power grid interconnection. The leaders also explored joint offshore wind power development in the Palk Straits while prioritising environmental protection.
Both countries reaffirmed their commitment to developing Trincomalee as a regional energy and industrial hub to help Sri Lanka’s energy security and economic growth.
People-Centric Digitisation and Technological Cooperation
India’s success in people-centric digitisation has been a model for governance and service delivery. Sri Lanka expressed interest in adopting similar systems with India’s assistance. Both leaders agreed to expedite the implementation of the Sri Lanka Unique Digital Identity (SLUDI) project and collaborate on the rollout of Digital Public Infrastructure (DPI) in Sri Lanka. They also discussed expanding digital financial transactions and leveraging India’s expertise in digital platforms such as UPI, Aadhaar, and GeM.
In education and technology, the leaders agreed to strengthen collaboration in research and development, particularly in agriculture, aquaculture, digital economy, and healthcare. They also explored expanding academic exchanges and fostering cooperation between start-ups in both countries.
Trade and Investment Cooperation
The India-Sri Lanka Free Trade Agreement (ISFTA) has significantly impacted bilateral trade. Both leaders acknowledged the vast potential for further expanding trade and investment. They agreed to continue discussions on the Economic & Technological Cooperation Agreement and explore the possibility of enhancing trade settlements between the two countries in local currencies.
Both leaders emphasised the importance of encouraging investments in key sectors to boost Sri Lanka’s export potential. They agreed to pursue discussions for the early finalisation of a bilateral Social Security Agreement, which would provide greater protection for the workers of both countries.
Agriculture, Animal Husbandry, and Strategic Cooperation
Agriculture remains a priority for both nations, with a focus on modernising Sri Lanka’s agricultural sector. The two leaders agreed to establish a Joint Working Group to explore comprehensive development in the sector. They also discussed ongoing cooperation in the dairy industry to promote self-sufficiency and nutritional security in Sri Lanka.
In terms of defence cooperation, both leaders recognised the shared security challenges in the Indian Ocean Region and the need for closer collaboration in countering traditional and non-traditional threats. India reaffirmed its commitment to assisting Sri Lanka in strengthening its defence and maritime security, providing vital support, including maritime surveillance equipment and disaster response capabilities.
Both countries also discussed enhancing cooperation on terrorism, narcotics smuggling, and intelligence sharing. They agreed to explore the possibility of a formal Defence Cooperation Framework, along with joint exercises, training programmes, and capacity-building initiatives.
Cultural and Tourism Development
The cultural ties between India and Sri Lanka are strong, and both leaders agreed on the need to promote cultural and tourism links further. They highlighted the importance of enhancing air connectivity and promoting investments in Sri Lanka’s tourism infrastructure. With India being Sri Lanks’s primary source of tourism, both leaders committed to establishing a framework for developing religious and cultural tourism, as well as fostering academic linkages to advance cultural and linguistic ties.
Fisheries Issues
Acknowledging the challenges fishermen from both countries face, and considering the livelihood concerns, the leaders agreed on the importance of addressing these issues in a humanitarian manner. In this regard, they emphasised the necessity of preventative measures to prevent aggressive behaviour or violence. They also welcomed the recent conclusion of the 6th Joint Working Group Meeting on Fisheries in Colombo. They expressed confidence that through dialogue and constructive engagement, a long-lasting and mutually acceptable solution could be reached. Given the special relationship between India and Sri Lanka, they instructed officials to continue their engagement to address these issues.
President Dissayanake expressed gratitude to India for its initiatives supporting the sustainable and commercial development of fisheries in Sri Lanka, including the development of the Point Pedro Fishing Harbour, the rehabilitation of the Karainagar Boatyard, and cooperation in aquaculture through Indian assistance.
Regional and Multilateral Cooperation
Recognising their shared maritime security interests in the Indian Ocean Region, both leaders agreed to strengthen regional maritime security, bilaterally and through existing regional frameworks. In this context, the leaders welcomed the recent signing of the Founding Documents of the Colombo Security Conclave, headquartered in Colombo. India reiterated its support for Sri Lanka in advancing the objectives of the Conclave.
India also expressed complete support for Sri Lanka’s chairmanship of the Indian Ocean Rim Association (IORA). Both leaders stressed the need for a substantive action plan by IORA member countries to ensure the security and development of the region.
Additionally, both leaders reaffirmed their commitment to further strengthening regional cooperation under the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).
President Dissayanake requested the support of Prime Minister Modi for Sri Lanka’s application to become a member of BRICS. In turn, Prime Minister Modi expressed appreciation for Sri Lanka’s support for India’s candidature for a non-permanent seat on the UN Security Council for the term 2028-29. The leaders noted that the effective and timely implementation of the agreed measures, as outlined, would deepen the bilateral ties between their countries and set a new standard for friendly and neighbourly relations. Accordingly, they directed their officials to initiate the necessary measures for implementing these understandings and pledged to provide guidance wherever required. Both leaders further resolved to continue high-level engagement to enhance mutually beneficial bilateral relations, address Sri Lanka’s sustainable development needs, and contribute to the stability of the Indian Ocean Region. President Dissayanake invited Prime Minister Modi to visit Sri Lanka at his earliest convenience.
All Eyes On Accra As AfCFTA Gets Ready To Roll
Ghana has fulfilled all its obligations towards the establishment and the setting up of the AfCFTA Secretariat in Accra, following its selection by the AU Assembly. A flagship project of the African Union’s Agenda 2063, the AfCFTAcreates a market of 1.2 billion people with a combined GDP of USD 3 trillion.
GHANA PRESIDENT Nana AddoDankwaAkufo-Addo officially commissioned and handed over the Secretariat building of the African Continental Free Trade Area (AfCFTA) to the African Union Commission in Accra late last year.
At a symbolic ceremony at the African Trade House, the President handed the keys to the Secretariat to MoussaFaki, Chairperson of the AU.He also handed a scroll, the symbol of authority, to the Secretary-General of the AfCFTA, WamkeleKeabetweMene, kickstarting Africa’s push to create the world’s largest integrated market that would boost the continent’s growth and bring prosperity for its 1.27 billion people.
The Secretariat will house the offices of the AfCFTA Secretary- General and staff who would provide administrative support for the implementation of the AfCFTA Agreement brokered by the AU that requires member states that have signed unto the agreement to remove tariffs from 90% of goods to allow for free access to commodities, goods, and services across the continent.
Akufo-Addo, in his remarks, pointed out that the coming into being of the AfCFTA was one of the most important decisions taken by the AU considering the low intra-regional trade between African nations.He noted that increased intra-regional trade would contribute to the continent’s quest to end endemic poverty and ensure the desired economic growth for Africa and its people. “The last part of the growth and prosperity that we seek will come from us trading more amongst ourselves…We in Ghana believable increasing trade is the surest way to deepen Regional integration,” he stressed. Akufo-Addo was optimistic that Africa’s new sense of urgency for
GHANA PRESIDENT Nana AddoDankwaAkufo-Addo officially commissioned and handed over the Secretariat building of the African Continental Free Trade Area (AfCFTA) to the African Union Commission in Accra late last year. At a symbolic ceremony at the African Trade House, the President handed the keys to the Secretariat to MoussaFaki, Chairperson of the AU.He also handed a scroll, the symbol of authority, to the Secretary-General of the AfCFTA, WamkeleKeabetweMene, kickstarting Africa’s push to create the world’s largest integrated market that would boost the continent’s growth and bring prosperity for its 1.27 billion people. The Secretariat will house the offices of the AfCFTA Secretary- General and staff who would provide administrative support for the implementation of the AfCFTA Agreement brokered by the AU that requires member states that have signed unto the agreement to remove tariffs from 90% of goods to allow for free access to commodities, goods, and services across the continent. Akufo-Addo, in his remarks, pointed out that the coming into being of the AfCFTA was one of the most important decisions taken by the AU considering the low intra-regional trade between African nations.He noted that increased intra-regional trade would contribute to the continent’s quest to end endemic poverty and ensure the desired economic growth for Africa and its people.
“The last part of the growth and prosperity that we seek will come from us trading more amongst ourselves…We in Ghana believable increasing trade is the surest way to deepen Regional integration,” he stressed.
Akufo-Addo was optimistic that Africa’s new sense of urgency for economic integration would lay the foundation for an ‘Africa Beyond Aid’, and make the continent truly self-reliant.And with it, will come a rapid increase in the exchange of agricultural, industrial, financial, scientific and technological products, which he said, “will significantly enhance our economic fortunes as a continent create profit and provided opportunities for employment for the broad masses of Africans, particularly the youth.”
“It will provide the vehicle for us to trade among ourselves in a more modern and sophisticated manner; it will offer a huge opportunity to exploit the abundant wealth and resources of our great continent for the benefit of all our people; and it will give us protection in how to deal with other trading blocks,” he added.
The President also indicated that the coronavirus pandemic and the attendant disruption in the global supply chain had heightened the importance of the AfCFTA and reinforced the necessity for closer integration amongst countries “so that we can boost our mutual self-sufficiency, strengthen our economies, and reduce our dependence on external sources.”
He appealed to member states who were yet to ratify the AfCFTA Agreement to do so before the AU’s next extraordinary Summit scheduled for December 2020 to pave way for the smooth commencement of trading from 2021 onwards.
“We are now the world’s largest free trade area since the formation of the World Trade Organisation, and we must make it count,” he stressed.
54 member states have signed unto the Agreement. But only 30 have so far approved its ratification.
Akufo-Addo urged the AfCFTA Secretary-General to work towards building a strong, efficient and effective Secretariat, with the capacity to implement the various trade rules, in line with the text of the Agreement, to help build credibility, and reduce trade policy uncertainty in the continent.
“The world is watching to see whether the Secretariat will, indeed, provide the springboard for Africa’s economic integration and rapid growth, and I am confident that, under your tenure, it will.Mr. Secretary-General, be rest assured of the firm support of the Government of Ghana for your work and activities,” he added.
Akufo-Addo also commended the Nigeriene leader, MahamadouIssoufou, who is also the current Chair of ECOWAS, for the work he has done in championing the African Continental Free Trade initiative.
He congratulated the South African President, Cyril Ramaphosa, current Chair of the Authority of the Assembly of the AU, for the benign, progressive guidance and supervision he has offered to make the handing over ceremony possible.
A statement on behalf of South Africa President Cyril Ramaphosa, who is the Chairperson of the AU, was delivered on the occasion of the handover ceremony of the AfCFTA Secretariat. “On behalf of the African Union and the entire Continent, I express our profound gratitude to the Government and people of Ghana for generously offering the building and residences, which house the AfCFTA. This day is indeed a milestone and a strong affirmation of the vision of an integrated Africa, which was envisioned by the founding fathers of the OAU, including Kwame Nkrumah, 57 years ago. It is a fitting tribute that the AfCFTA Headquarters are being housed in Ghana.”
“When successfully implemented, the AfCFTA will be a huge milestone towards the realisation of Agenda 2063, the Africa we want.As AU Chair, I also wish to assure you of the AU’s commitment to the successful implementation of the AfCFTA, as a practical contribution to economic development of Africa,” he added.
AfCFTA Secretary-General WamkeleKeabetweMeme noted that Africa continued to be trapped in a colonial economic model, which required the aggressive implementation of the AfCFTA as a tool for effecting a fundamental structural transformation of Africa’s economy.
“The AfCFTA is therefore a critical response to Africa’s developmental challenges. It has the potential to enable Africa to significantly boost intra Africa trade and to improve economies of scale through an integrated market.It has the potential to be a catalyst for industrial development, placing Africa on a path to exporting value-added products and improving Africa’s competitiveness both in its own markets and globally.It also sends a strong signal to the international investor community that Africa is open for business, based on a single rule-book for trade and investment,” he said.
He thanked the government and the people of Ghana, for hosting the Secretariat and for providing world class facilities that will enable Africa to progress on the historic vision of achieving an integrated Africa.
African Continental Free Trade Area (AfCFTA)
The AfCFTA aims to boost intra-African trade by providing a comprehensive and mutually beneficial trade agreement among the member states, covering trade in goods, services, investment, intellectual property rights and competition policy.
The African Continental Free Trade Area (AfCFTA) is a flagship project of Agenda 2063 of the African Union, Africa’s own development vision. It was approved by the 18th Ordinary Session of Assembly of Heads of State and Government, held in Addis Ababa, Ethiopia in January 2012, which adopted the decision to establish a Continental Free Trade Area. This is an initiative whose immediate implementation would provide quick wins, create impact on socio-economic development, and enhance confidence and the commitment of Africans as the owners and drivers of Agenda 2063. The AfCFTA aims at accelerating intra-African trade and boosting Africa’s trading position in the global market by strengthening Africa’s common voice and policy space in global trade negotiations.At the time of writing, 36 countries have ratified the AfCFTA agreement.
The African Continental Free Trade Area (AfCFTA) will cover a market of 1.2 billion people and a gross domestic product (GDP) of USD 2.5 trillion, across all 55 member States of the African Union. In terms of numbers of participating countries, AfCFTA will be the world’s largest free trade area since the formation of the World Trade Organisation.It is also a highly dynamic market. The population of Africa is projected to reach 2.5 billion by 2050, at which point it will comprise 26% of what is projected to be the world’s working age population, with an economy that is estimated to grow twice as rapidly as that of the developed world.With average tariffs of 6.1%, businesses currently face higher tariffs when they export within Africa than when they export outside it. AfCFTA will progressively eliminate tariffs on intra-African trade, making it easier for African businesses to trade within the continent and cater to and benefit from the growing African market.Consolidating this continent into one trade area provides great opportunities for trading enterprises, businesses and consumers across Africa and the chance to support sustainable development in the world’s least developed region. ECA estimates that AfCFTA has the potential both to boost intra-African trade by 52.3% by eliminating import duties, and to double this trade if non-tariff barriers are also reduced. Located in Accra, Ghana, the African Continental Free Trade Area Secretariat is the administrative organ to coordinate the implementation of the AfCFTA. The Secretariat is responsible for convening meetings, monitoring and evaluating the implementation process and other duties assigned to it by the Committee of Senior Officials, Council of Ministers, and the Assembly of the African Union (AU).
The Assembly of the AfCFTA is the highest decision-making organ of the AU, consisting of all AU Heads of State and Government. It has exclusive authority to adopt interpretations of this Agreement on the recommendation of the Council of Ministers, andprovides oversight and guidance on the AfCFTA. The Council of Ministers comprises Ministers for Trade of the State Parties. It will take decisions on all matters under the AfCFTA Agreement, and reports to the Assembly through the Executive Council of the AU. The AfCFTA Council of Minister is separate from the AU Ministers of Trade (AMOT). The Committee of Senior Trade Officials comprises Permanent Secretaries or other officials designated by State Parties. It is responsible for the development of programmes and action plans for the implementation of the AfCFTA Agreement.
The Protocols of the AfCFTA Agreement establish various technical committees to assist with the implementation of the Agreement. They include the Trade in Goods Committee and Trade in Services Committee.
India-Russia: Partnership for Peace, Progress and Prosperity
Amidst growing differences between India and Russia due to India’s growing closeness with the US and Russia’s congruence with China, India and Russia held the 21st India-Russia Annual Summit to discuss the entire gamut of bilateral relations, including regional and global issues. Recent events saw the distancing of Russia from India through the re-evaluation of its position as regards to AF-Pak region and the Indo-Pacific. Further Russia’s worsening relations with the West and lack of support for its position including from India saw the necessity to sit down and discuss the issues and reduce the trust deficit among the two. India and Russia focused on ways to boost bilateral cooperation in areas ranging from defence to energy and a coordinated approach to regional issues. N Chandra Shekar reports…
INDIAN PRIME MINISTER Narendra Modi welcomed Russian President Vladimir Putin emphasising the importance of strategic relations between the two nations. Referring to the Russian President as a “friend”, PM Modi said “our meeting today will strengthen our Special and Privileged Strategic Partnership. The initiatives that we take today will further increase the scope of our cooperation to new areas’.
Modi also noted in his opening remarks that this was only Putin’s second foreign visit since the start of the Covid-19 pandemic and reflects his personal commitment to bilateral relations. The year 2021 is important for bilateral ties as it marks five decades of the Indo-Soviet Treaty of Peace, Friendship and Cooperation of 1971 and two decades of the bilateral strategic partnership, he added.
In his opening remarks ahead of the bilateral meeting He said, “2021 is also special for our Strategic Partnership. Today was the inaugural meeting of the 2+2 dialogue between our Foreign and Defence Ministers. This has started a new mechanism to enhance our practical cooperation,”. India-Russia relations have been one of the success stories of global diplomacy and PM Modi’s warm relationship with President Putin has stood the test of the dynamic geopolitical situations and their congruence on global issues will influence regional and global politics.
President Putin said Russia perceives India as a “great power” with whom relations “are developing and are looking to the future”. Though trade turnover declined by more than 17% in 2020, the growth was more than 38% in the first nine months of 2021, he said. Total bilateral investments now stand at $38 billion, and this is roughly equally divided, with slightly more investments from the Russian side, Putin said, adding the two sides are also cooperating in areas such as energy, high technology and space. “We continue to work actively in the international arena, and… our positions on very many issues do coincide. We are undoubtedly concerned about everything related to terrorism and the fight against it, as well as drugs and organised crime,” he said. The two sides are also concerned about the developing situation in Afghanistan, he added.
India-Russia economic relations have been lopsided and marked by a steep imbalance favouring Russia. India-Russia annual trade in goods is about $10 billion. Whereas Russia’s trade with China is around $100 billion. In contrast India’s trade with US and China is around $100 billion. During the last 20 summits both sides have been repeatedly reiterating the need for enhancing trade and investment ties. One of the most visible glaring aspect of India Russia ties is its failure to boost trade. Trade between India and Russia has been one way with India becoming Russia’s largest armament buyer other than energy. This summit has dawned on both of them a new sense of realisation to leverage on the strong historical ties and lay new grounds for expansive economic cooperation.
The India-Russia Joint Statement called ‘Partnership for Peace, Progress and Prosperity’ said, “The completion of 5 decades of the 1971 Treaty of Peace, Friendship and Cooperation and 2 decades of Declaration on Strategic Partnership is symbolic of the long standing and time-tested India-Russia relations characterized by mutual trust, respect for each other’s core national interests and similarity of positions on various international and regional issues.” The meeting saw the signing of 28 agreements across sectors from defence to energy to space exploration, science and technology, heavy engineering, to trade and investment.
Agreements/MoUs signed during the 21st India-Russia Annual Summit in New Delhi
Roadmap for science, technology and innovation cooperation between the Ministry of Science and Higher Education of the Russian Federation and the Ministry of Science and Technology of the Government of the Republic of India.
Memorandum of cooperation in the field of intellectual property between the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of the Republic of India and the Federal Service for Intellectual Property, Russian Federation.
Agreement on Program of the Military-Technical Cooperation from 2021-2031. [This 10-year defence cooperation programme outlines the ongoing defence cooperation and future possible cooperation between the two countries. Such agreements have been signed since 1994.]
A MoU between Joint Stock Company Rosgeologia (ROSGEO), a legal entity incorporated under the laws of the Russian Federation and Geological Survey of India (GSI), Ministry of Mines, Government of the Republic of India on cooperation in the field of geoscience. [It seeks cooperation in the field of earth sciences and geological study of subsoil, long-term cooperation in the area of geological onshore and offshore exploration works.]
Protocol on introduction of amendments to the Merchant Shipping Agreement between the Government of the Republic of India and the Government of the Russian Federation. [It introduces an amendment leading to recognising the seafarer’s identity documents.]
A cultural exchange programme between the Ministry of Culture of the Government of the Republic of India and the Ministry of Culture of the Russian Federation for the years 2021-2024.
Protocol between the Department of State Support of the Art and Folk Creativity of the Ministry of Culture of the Russian Federation and Indian Council for Cultural Relations under the Ministry of External Affairs of the Republic of India on the organisation of culture festivals between the Russian Federation and the Republic of India for 2022-2023.
An agreement between the Government of the Republic of India and the Government of the Russian Federation on technology protection due to cooperation in the field of research and use of outer space for peaceful purposes and building and operation of launch vehicles and ground-based space infrastructure.
Protocol between Government of the Russian Federation and Government of the Republic of India on allotment of land plots for allocation of Consular offices of the Republic of India in the Russian Federation and terms of housing the Consulate General of the Republic of India in the city of Vladivostok.
Commercial and other Agreements/MoUs
A MoU between Opto-electronics Factory, Dehradun and JSC Rosoboronexport.
A cooperation agreement between Reserve Bank of India and the Bank of Russia in the field of responding to cyber attacks
A MoU on cooperation between ICAI (The Institute of Chartered Accountants of India) and IPAR (The Institute of Professional Accountants of Russia). [It seeks to establish collaboration through joint research, quality support, capability and capacity building.]
A MoU for cooperation in the power sector between NTPC Ltd, Government of India Enterprise and Inter Rao-Export LLC.
A memorandum of cooperation between SAIL and Russian Company SSC FSUE TsNIIchermet im. I. P. Bardin. [It seeks to join efforts in carrying out research, technological and strategic work in the field of metallurgical technologies.]
A memorandum of cooperation between JSPL (Jindal Steel and Power Ltd) and Russian Company SSC FSUE TsNIIchermet im. I. P. Bardin. [It seeks to join efforts in carrying out research, technological and strategic work in the field of metallurgical technologies.]
A MoU between JSW Steel Ltd and Russian Company SSC FSUE TsNIIchermet im. I. P. Bardin. [It seeks to join efforts in carrying out research, technological and strategic work in the field of metallurgical technologies.]
A statement of intent of collaboration between IOCL and SIBUR. [It seeks to consider the possibility to explore the feasibility of setting up a Dual Feed Cracker Unit along with downstream units at Odisha.]
A MoU between National Sports University, Imphal and Russian International Olympic University (RIOU), Sochi, Russia.
A MoU between Indian Institute of Science Education and Research Kolkata (India) and A.V. Zhirmunsky National Scientific Centre of Marine Biology of the Far Eastern Branch of Russian Academy of Sciences (NSCMB FEB RAS) (Russian Federation). [It seeks to establish Centre for Excellence in Blue Economy for collaborative exchanges]
A MoU between Lovely Professional University, Phagwara, India and Southern Federal University, Russia. [It seeks to collaborate on academic and research activities, exchange of academic information, student and faculty exchange etc.]
An agreement for academic collaboration between University of Delhi and Skoltech University, Moscow. [It seeks to promote capacity-building and expertise in scientific areas and is aimed at developing programmes and exchanges for national technological development.]
An agreement between the Federal State Autonomous Educational Institution of Higher Education I.M.Sechenov First Moscow State Medical University of the Ministry of Health of the Russian Federation (Sechenov University) and University of Delhi. [It seeks to promote cooperation in life sciences in the fields of Nano-medicine, Regenerative Medicine, Molecular Medicine, Bio-medical Science, Translational Medicine, Pre-clinical and Clinical Research, New Drug Discovery, Industrial Technologies and Entrepreneurship.]
A MoU between Uttar Pradesh FICCI and BCCI, Russia. [It seeks to establish links, exchange experience in international cooperation, small and medium businesses.]
A MoU on manpower supplies between Magic Billion and Volshebny Milliard.
A statement of intent of collaboration between IOCL and Gazpromneft for VGO Hydrocracking Technology, Catalytic Iso-dewaxing for lobs and catalyst regeneration for fixed bed catalyst.
A MoU between Rosneft and OVLled Indian Consortium on Training Cooperation. [It seeks to provide education and training programs in the oil and gas sector.]
A MoU between Indian Trade Promotion Organisation and Roscongress Foundation for bilateral trade cooperation.
A crude oil supply agreement between Rosneft and Indian Oil Corp. Ltd. [It seeks to renew the previous contract between Rosneft and IOCL.]. FOCUS 28 Oct-Nov-Dec | 2021 OPEN TRADE African Continental