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<keyword id="22003705" type="General" weightage="20" keywordseo="Indian-traders" source="keywords">Indian traders</keyword> involved in <keyword id="22003703" type="General" weightage="20" keywordseo="border-trade" source="keywords">border trade</keyword> with China through the <keyword id="22003704" type="General" weightage="20" keywordseo="Lipulekh-pass" source="keywords">Lipulekh pass</keyword> in Pithoragarh district since 1992, have requested the central government to take up the issue of resumption of border trade through this route with Beijing. The trade route was closed rather suddenly after the outbreak of the Covid-19 pandemic in 2019, forcing Indian traders to return from the <keyword id="22003706" type="General" weightage="20" keywordseo="Taklakot-mart" source="keywords">Taklakot mart</keyword> in Tibet leaving behind their woollen products. Five years have passed but the route has not been opened, an organisation of border traders in Dharchula said. The traders who belong to the <keyword id="22005864" type="General" weightage="20" keywordseo="Bhotia-tribe" source="keywords">Bhotia tribe</keyword> started to raise their demand for reopening of the trade route through Lipulekh after China recently began the process of implementing a pact, in which it had agreed to open all 14 trade passes with Nepal. The implementation of the agreement inked by China and Nepal in December, 2022 began on May 25 this year, when China opened Piangi pass situated in Dolpa district of eastern Nepal, president of Bharat Tibetan Simant Vyapar Samiti, Dharchula Jeewan Singh Rongkali said. Three more passes along the Indo-Tibet border in the western region of Nepal that fall in the districts of Humla, Bajang and Darchula will be opened on June 20, 30 and 25 respectively, he said. "We have so far sent 22 applications to the government of India requesting it to take up with the Chinese authorities the reopening of the trade route through Lipulekh pass but have received no response so far," Rongkali said. According to Rongkali, Indian tribal traders from Dharchula alone have left trading items worth Rs 15 lakh in <keyword id="22005865" type="General" weightage="20" keywordseo="taklakot" source="keywords">Taklakot</keyword> Mart of Tibet at the time of closure of border trade in 2019, following the Covid-19 pandemic. "We have no information if our stored goods are safe or in a state of decay. They were stored in plywood covers at the time of closure of trade," Rongkali said. "We want trade with China to be resumed through Lipulekh pass but if for some reason it is not possible then the traders should be given 15 days' time to go to Taklakot to ring back their goods," he said. Goods of over 450 Indian tribal traders have been lying there for the last 5 years, he said. According to Rongkali, over 450 Indian traders used to supply essential goods to villagers of over 45 villages of western Tibet through this trade route since 1992. "Out of over 1.5 crore trade annually, we have paid lakhs of rupees towards customs duty and other taxes to the government of India," said Rongkali. China announced in the year 2022 that it will build trans Himalayan multi-dimensional connectivity with Nepal to restructure the road and communication network with that country, Rongkali said. "As China has not given permission to open our passes along the Indo-China border, we have an apprehension that the mart made for Indian traders in Gakkhu town of Taklakot could be handed over to Nepalese traders," said Rongkali.

Indian traders demand resumption of border trade with China through Lipulekh pass

<ul class="summary-list"><li>China's Xi Jinping negotiated a truce with India's leader, Narendra Modi.</li><li>They agreed to a patrolling arrangement on a disputed Himalayan border.</li></ul>At the <a target="_blank" class="" href="https://www.businessinsider.com/russia-hosts-brics-summit-defy-west-us-economy-china-dollar-2024-10">BRICS summit</a> in Russia this week, China's leader Xi Jinping and India's Prime Minister Narendra Modi shook hands for the first time in five years.The symbolic moment came after a deal was struck to resolve a long-standing feud between the Asian superpowers.In the lead-up to the summit, the countries announced they had reached a patrolling agreement that would reduce tensions along a disputed <a target="_blank" class="" href="https://www.businessinsider.com/india-china-buying-new-light-tanks-for-himalayan-mountain-warfare-2023-6">Himalayan border.</a>The dispute had led to deadly hand-to-hand combat in recent years, taking the lives of 20 Indian troops and at least four Chinese soldiers.After their meeting at the summit hosted by Russia's President Vladimir Putin, Xi and Modi said they would continue discussions on resolving the issue.<h2 id="997cee52-7fd6-4283-bf77-94e40a12b5cc">A setback for the US</h2>Some analysts believe it is a development that's unlikely to be welcomed in Washington, DC.The US has sought to recruit India to help it contain China's growing regional aggression alongside other members of the Quadrilateral Security Dialogue, a security pact that also includes Japan and Australia."So definitely, this is a setback for the United States of America's Indo-Pacific outlook, given the kind of rapprochement we are seeing in India-China relations, and particularly India, China and Russia coming together," Jagannath Panda, head of the Stockholm Center for South Asian and Indo-Pacific Affairs, told Business Insider."Putin, Xi, and Modi meeting definitely signals that there is a kind of understanding under the carpet that has happened, which is quite subtle," he said.It's an assessment echoed by Zhiqun Zhu, professor of political science and international affairs at Bucknell University."The thaw in India-China relations is a boon to both countries. This is particularly significant for China because India may now be less inclined to confront Beijing as part of Quad," Zhu told <a target="_blank" class="" href="https://www.voanews.com/a/india-china-deal-raises-questions-about-us-indo-pacific-strategy-/7838623.html">Voice of America. </a>"In this sense, the effectiveness of Quad would be diluted with a less enthusiastic India."<h2 id="baf534cf-4366-41b8-b9ef-d526ffe91fda">Competition between Asia's rival powers intensifies</h2>Tensions have been building between China and India for years.As the two biggest economies in Asia, the countries have long jostled for regional power, with the dispute over the Himalayan border a flashpoint that led to clashes in 2020, 2021, and 2022.Amid the stand-off, Chinese vessels have reportedly surveilled the Indian Ocean in <a target="_blank" class="" href="https://www.reuters.com/world/india/another-chinese-research-vessel-spotted-off-india-fuelling-unease-2024-03-11/">what experts told Reuters</a> was a likely intelligence-gathering operation, while India has strengthened its security ties with China's chief global rival, the US.In 2017 India played a key role in restarting the Quad, an alliance designed as a bulwark against growing Chinese influence and aggression in the Asia-Pacific region.But India has long sought to balance its relationship with rival superpowers the US and China, and does not at this point want to tie itself too closely to either side, say analysts.In addition to being a member of the Quad Alliance, it is a founding member of the BRICS, an <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-asia-countries-flaunt-russia-putin-diplomacy-relationship-brics-2024-9">association of non-Western economies </a>that China has sought to transform into an alternative global economic power base to the US.<div type="image" title="India-China border" height="683" width="1024" msid="114594056" hostid="261" sizebytes="158650"></div>"This explains why it remains part of multilateral groupings with contradictory goals," said Praveen Donthi, a South Asia analyst with the Eurasia Group in Washington, DC, pointing to both its membership of the US-aligned Quad and China-dominated BRIC group.The truce comes with China on the back foot diplomatically, said Panda, pointing to its damaged relations with Europe and the US after its support f<a target="_blank" class="" href="https://www.businessinsider.com/russia-and-china-anti-us-coalition-is-growing-more-threatening-2024-9">or Russia's invasion of Ukraine.</a>"One could draw a conclusion at this point that probably the Chinese are more interested to rebuild the ties with India than the other way round," said Panda.He said there's also the possibility that Xi has reached an agreement with Modi behind the scenes for India to remain silent if China acts on its longstanding ambition to seize back control of Taiwan.Such a move would likely draw in the US and its other regional allies, who have pledged to help defend<a target="_blank" class="" href="https://www.businessinsider.com/china-taiwan-drone-swarms-uav-us-playing-catch-up-production-2024-10"> Taiwan's independence.</a>"I think China's bigger ambition and target is the Taiwan issue, and therefore they would not really like to continue the kind of tensions they were engaged in with India for the last three to four years," he said."Therefore, they would like to rebuild, and they would like to ensure that India does not react to the Taiwan issue so sensitively."In any case, its a setback in US attempts to include India in a deeper security alliance, he said."For a long time, the US has tried to develop security and defense ties with India," said Panda.For the time being, a truce suits both Russian and Chinese interests, Rahul Bhatia, an analyst at the Eurasia Group, said. But, he added, tensions remain.He said that though both parties have opened discussions about the border dispute, the underlying problem remains unresolved, and future flare-ups are likely.Donthi said the progress between the leaders could also be derailed if tensions between the US and China increase."This comes as a relief after four years of eyeball-to-eyeball troop deployment in the Himalayas. However, it's only the beginning," he said.

Xi undercut the West by negotiating a truce in China's long feud with India

<keyword id="19895063" type="General" weightage="100" keywordseo="India" source="keywords">India</keyword> is well positioned to be a driver of greater wealth, according to a <keyword id="22444977" type="General" weightage="20" keywordseo="global-wealth" source="keywords">global wealth</keyword> report by <keyword id="19896306" type="General" weightage="20" keywordseo="Boston-Consulting-Group" source="keywords" meta.keywordsubtype="org" meta.entityname="Boston Consulting Group" meta.hostid="153" meta.entityid="Boston Consulting Group">Boston Consulting Group</keyword> (BCG). In 2023, India generated roughly $590 billion in new <keyword id="22367734" type="General" weightage="20" keywordseo="financial-wealth" source="keywords">financial wealth</keyword>, marking its largest increase in the history. India will add about $730 billion annually to the overall growth of the region through 2028. The report says <keyword id="19894886" type="General" weightage="20" keywordseo="China" source="keywords">China</keyword> and India are positioned to drive global <keyword id="20231223" type="General" weightage="20" keywordseo="wealth-creation" source="keywords">wealth creation</keyword>, "Notably, China and India are positioned to drive wealth creation, having collectively generated $588 billion in financial wealth in 2023. India is expected to add about $730 billion annually to the overall growth by 2028," said Yashraj Erande, India Leader Financial Services, BCG. Financial wealth in the Asia-Pacific region grew by only 5.1% in 2023, predominantly due to a slowdown in wealth creation in China. However, the report anticipates a significant increase through 2028, with the Asian region likely to contribute nearly 30% of new financial wealth by 2028. The report also observed that global net wealth registered a growth of 4.3% in 2023, following a decline of 4% in 2022. Much of this growth was due to a rebound in the financial market, as financial wealth, a subset of global net wealth, rose by almost 7% after a 4% decline in 2022. Looking ahead, the report estimates that $92 trillion of financial wealth will be created over the next five years. It also noted that Generative AI (GenAI) will play a crucial role in the digital transformation of <keyword id="21006652" type="General" weightage="20" keywordseo="wealth-managers" source="keywords">wealth managers</keyword>, with use cases along the entire value chain. "The financial wealth market has seen an uptick in the last year since its slump in 2022. The trajectory has been fairly well but not as good as it was between 2014-2021. For the wealth creation market to go back to its previous era the condition should continue to be favourable" added Erande. The report also highlighted that financial wealth in North America and Western Europe bounced back in 2023. Supported by strong equity markets, North America was among the fastest-growing regions, accounting for over 50% of all new financial wealth in 2023. The recovery was not as strong in Western Europe, where financial wealth rose by 4.4%. "Wealth creation resumed in 2023--but even so, wealth managers cannot afford to stand still. To capitalize on growing global wealth, industry players, among others, will need to set a clear digital transformation strategy and leverage GenAI to manage costs and improve client experience," said Michael Kahlich, a managing director and partner at BCG and a co-author of the report. The report stated that the most remarkable growth dynamics emerged in the United Arab Emirates (UAE). The UAE is currently the world's seventh-largest booking centre and is expected to surpass the Channel Islands and the Isle of Man as the sixth-largest by 2028. Hong Kong's anticipated rise to become the top global financial hub was stalled by a temporary but significant slowdown in Chinese inflow. Singapore now appears to be in a position to challenge Hong Kong's rise over the long term. Switzerland remains the largest booking centre worldwide, growing in line with its historical average of 4.8% and gaining the most wealth in absolute dollar terms. However, Switzerland and other European cross-border booking centres, including the UK and Luxembourg, are growing at a slower pace than Singapore, the UAE, and the US. This shift is occurring mostly because of a stronger demand for geographic diversification, reflecting a continued surge in wealth generation in Middle Eastern and Asian markets.

India and China to drive new wealth creation globally, Asia to contribute 30% of new wealth, says BCG report

<ul class="summary-list"><li>India wants to unseat China as the new factory of the world.</li><li>Modi is set to stay in power for another five years, but the results of the election are going to make it harder to beat China.</li></ul>India's economy is on a roll, chalking up <a target="_blank" href="https://www.mospi.gov.in/sites/default/files/press_release/PressNoteGDP31052024.pdf">8.2% GDP growth</a> in the last fiscal year and a boom in <a target="_blank" href="https://www.reuters.com/business/finance/india-eyes-100-bln-annual-foreign-direct-investment-coming-years-it-minister-2024-01-17/">foreign investments.</a>The growth is in part thanks to a <a target="_blank" href="https://www.businessinsider.com/china-india-supply-chain-covid-sanctions-manufacturers-relocating-tariffs-options-2022-12">shift in supply chains</a> and investment flows as companies try to stop relying solely on China.This has boosted Indian Prime Minister Narendra Modi's appeal, sending him to a historic third term as the country's prime minister in the country's general election.But Modi's win this time around also <a target="_blank" href="https://www.businessinsider.com/indian-election-results-shocking-blow-narendra-modi-2024-6?mrfhud=true">comes with a huge loss</a>.While Modi is still hugely popular in India, his party — <a target="_blank" href="https://www.businessinsider.com/indian-election-results-shocking-blow-narendra-modi-2024-6">Bharatiya Janata Party, or BJP</a> — lost its majority in Parliament, reflecting resentment among voters amid rising <a target="_blank" href="https://www.reuters.com/world/india/indias-richest-1-has-highest-concentration-wealth-decades-study-shows-2024-03-20/">inequality.</a>"The problem is most Indians have not adequately participated in the fruits of an economy with gaudy headline numbers," wrote Atman Trivedi, a senior fellow with the Atlantic Council's South Asia Center in a <a target="_blank" href="https://www.atlanticcouncil.org/blogs/new-atlanticist/experts-react-modi-loses-ground-electoral-surprise/">Tuesday note.</a> "Growth is unequal, and jobs are few and far between."India's unemployment rate rose to 8.1% in April from 7.4% in March, according to the <a target="_blank" href="https://cmie.com/kommon/bin/sr.php?kall=warticle&amp;dt=20240502160006&amp;msec=476">Centre for Monitoring Indian Economy,</a> a private think tank. The country has a <a target="_blank" class="" href="https://affiliate.insider.com?h=881bbd696b99c4065e343b97a60624443ddd9aabed87bc59213e9c4e53b5de60&amp;postID=665fc5bbe01a10ede1be40ec&amp;postSlug=india-election-results-complicates-plans-unseat-china-modi-bjp-2024-6&amp;site=bi&amp;u=https%3A%2F%2Fwww.nature.com%2Farticles%2Fd41586-023-03915-5">longstanding brain drain issue.</a><h2 id="2c7371a5-8197-477c-a8db-86744aed6de4">India wants to unseat China as the factory of the world</h2>BJP's likely loss of its majority is a testament to India's political system — but it will also make the dream of becoming the next China harder to achieve.<a target="_blank" href="https://www.businessinsider.com/india-business-market-entry-barriers-tariffs-supply-chain-china-2023-6">Decision-making and policy changes</a> in the world's largest democracy, after all, can take far longer than they do in Communist China — a one-party state."Coalition governments require compromises. That reality could complicate any plans for ambitious structural reforms on land, labor, or opening India's markets to unfinished and intermediate inputs," wrote the Atlantic Council's Trivedi, who is also a partner at Albright Stonebridge Group.India's stock markets tanked on the shock election results, with the benchmark <a target="_blank" href="https://markets.businessinsider.com/index/sensex">Sensex</a> index crashing over 5% in one day on Tuesday following the news. It rebounded on Wednesday.Despite the knee-jerk reaction, most analysts are optimistic about India's economic outlook given that Modi is still in charge."Modi's broader economic reform agenda is likely to remain intact. And so, fears of India's key economic reforms unraveling are overdone," wrote Vishnu Varathan, the chief economist of Asia excluding Japan at Mizuho Bank.<h2 id="d51e0b52-c0b2-432c-977a-5640abaef074">India needs to get rich before it gets old</h2>But India has a longer-term problem: aging.India is the world's <a target="_blank" href="https://www.businessinsider.com/india-overtake-china-worlds-most-populous-nation-2023-un-2022-7">most populous country</a>. With a 1.4 billion population, it has a huge pool of young people; <a target="_blank" href="https://www.spglobal.com/en/research-insights/special-reports/look-forward/india-s-demographic-dividend-the-key-to-unlocking-its-global-ambitions">65% of its population</a> is under the age of 35.But aging is "rapidly progressing," according to the <a target="_blank" href="https://india.unfpa.org/en/news/indias-ageing-population-why-it-matters-more-ever">United Nations Population Fund.</a> By 2050, one in every five persons in India will be 60 years old or above, the fund wrote in a <a target="_blank" href="https://india.unfpa.org/sites/default/files/pub-pdf/20230926_india_ageing_report_2023_web_version_.pdf">report last year.</a>So, even though India has grown rapidly in recent years, it will need to grow much faster to get rich before it gets old, Raghuram Rajan, a professor at the University of Chicago Booth School of Business, told <a target="_blank" href="https://www.npr.org/sections/planet-money/2024/06/04/g-s1-2226/india-election-democracy-china-economy-manufacturing">NPR's "Planet Money"</a> in a podcast.It's not enough to power up India's manufacturing sector in the wake of China's breakneck growth — because so many other countries are doing the same thing, added Rajan, who is a former head of the Central Bank of India and a former chief economist of the International Monetary Fund.He said India will do better to capitalize on its services industry, especially since so many Indians are English speakers.Despite its challenges, India is still expected to post healthy growth in the near future. The IMF <a target="_blank" rel="noreferrer noopener" href="https://www.imf.org/en/Countries/IND">forecasts</a> India's economy will grow by 6.8% this fiscal year and 6.5% next fiscal year.

India wants to be the new China. Modi's shock election result shows it won't be easy.

<ul class="summary-list"><li>US lithium production is set to spike with new projects advancing in Nevada and California.</li><li>The expansion aims to reduce reliance on China for critical minerals and electric-vehicle batteries.</li></ul>The US is on the cusp of a lithium boom after years of laying the groundwork for an electric-vehicle supply chain that doesn't rely on China.Within the past month, the Biden administration has approved the Rhyolite Ridge lithium-boron mine in Nevada and loaned $2.6 billion to the company developing Thacker Pass, another lithium mine in the state. A project in California's Salton Sea started construction earlier this year. The three sites, expected to come online between 2026 and 2028, would massively increase the US's lithium supply. Since the 1960s, only one site, Silver Peak, in Nevada, has operated in the country.The expansion is aimed at curbing China's control over the metals used in EV batteries and other renewable-energy technologies that countries need to decarbonize their economies. While most of the world's lithium is produced in Australia and South America, some two-thirds of it is processed in China, which also dominates EV-battery manufacturing. The US imports about 25% of its lithium supply from Chile and Argentina, but an analysis of federal data by the Atlantic Council found that it relied on China for about 70% of its lithium-ion batteries in 2023."If we're electrifying the transportation industry, you don't want to rely on any one country," Bernard Rowe, a managing director of Ioneer, which is developing Rhyolite Ridge, told Business Insider. "There was a recognition that there had to be domestic production."<div type="image" title="A customs officer holds powdery white lithium carbonate during an inspection at Shanghai İnternational Port on June 6, 2022." height="683" width="1024" msid="114817441" hostid="261" sizebytes="27062"></div>The Biden administration is encouraging US mining and manufacturing through a mix of loans, grants, tax breaks, and research and development programs — a lot of which was authorized under the Inflation Reduction Act. The incentives cover activities including extracting critical minerals like lithium; manufacturing solar, wind, and battery parts; buying EVs; and recycling components.Rowe argued that while the US alone can't meet the skyrocketing demand for lithium due to rising sales of EVs and battery storage, some of the supply has to be sourced domestically for national security reasons.Karl Friedhoff, a fellow for Asia studies at the Chicago Council on Global Affairs, agreed. He said there's no world in which the US and its partners can quickly compete with China on critical minerals; China already has so much capacity that it sets global prices."The question then is, can the US and other partner countries create a supply chain that meets their basic requirements," Friedhoff, who's part of a project exploring how the US, Japan, Australia, and India can cooperate to shift supply chains away from China. "Can we supply our own batteries? Can we build our own battery technologies? Do we have enough rare-earth elements for defense?"Based on estimates from Ioneer and other lithium project developers, the US could produce more than enough supply for the 1.4 million EVs sold in the country last year, which accounted for 7% of the auto market.The Biden administration wants EVs to account for at least 50% of car sales by 2030, and states like California and Texas are quickly deploying more battery storage to help balance stressed power grids. In September, the White House said US lithium production was on track to meet one-fifth of global demand outside of China this decade.<h2 id="c11b28df-2899-481e-8b55-b52898315793">Some environmentalists, Native tribes are alarmed</h2>The lithium projects haven't been without controversy, however. The Center for Biological Diversity <a target="_blank" href="https://biologicaldiversity.org/w/news/press-releases/blm-grants-final-approval-to-nevada-lithium-mine-threatening-biodiversity-cultural-landscapes-2024-10-24/?_gl=1*jmu4dt*_gcl_au*MTc3Mjg1OTA3Ni4xNzI5ODYzNzkz">has threatened to sue the Biden administration</a> over its permit for Rhyolite Ridge, arguing that the project could drive an endangered wildflower to extinction. The Western Shoshone Defense Project, which works to protect the Western Shoshone peoples' native homelands, says the mine threatens local water sources and culturally important sites.<div type="image" title="A Tiehm's buckwheat plant in Esmeralda County, Nevada, grows beside where the Rhyolite Ridge lithium-boron mine is planned." height="682" width="1024" msid="114817435" hostid="261" sizebytes="82450"></div>Thacker Pass faced similar opposition, but a federal judge last year dismissed a lawsuit from three Native tribes who argued that the mine's construction near a sacred site along Nevada's border with Oregon violated the law, <a target="_blank" href="https://apnews.com/article/lithium-mine-tribes-climate-energy-lawsuit-nevada-7a65eee7d78d93a1e44e3f8e10445143">the AP reported</a>.Rowe said Ioneer redesigned the Rhyolite Ridge mine to limit its footprint in the critical habitat of the endangered wildflower, Tiehm's buckwheat. He said Ioneer would also monitor the pollinator population and adopt dust-control strategies. The Biden administration, in issuing the permit for the mine, said it would not jeopardize the flower's survival.Some companies are working on <a target="_blank" href="https://www.businessinsider.com/lithium-mining-electric-vehicles-climate-crisis-2023-5">direct lithium extraction techniques</a> that don't involve open-pit mining or large evaporation ponds and therefore could require less land and water and produce less toxic chemical waste. Controlled Thermal Resources is developing such a project in the Salton Sea, where lithium-rich brine is already being used to power geothermal plants.Tapping the US's newly discovered lithium resources likely hinges on the new extraction techniques, which currently cost more than traditional methods and still haven't been used commercially. The US Geological Survey this month estimated that there's enough lithium underneath southwestern Arkansas to meet the projected global demand for car batteries in 2030 nine times over.Actually extracting that lithium, including from brines left over from oil and gas production in the region, depends on whether the direct extraction techniques are viable, USGS researchers said.

The US is on the cusp of a lithium boom to loosen China's grip on EVs

<ul class="summary-list"><li>India's Prime Minister Narendra Modi is in Russia to visit its president Vladimir Putin. </li><li>It's a visit that risks annoying India's ally the US. </li></ul>When India's prime minister arrived in Moscow on Tuesday, he greeted Russia's famously chilly president, Vladimir Putin, with an exuberant bear hug.It was a move likely <a target="_blank" href="https://www.businessinsider.com/modi-putin-russia-india-relationship-not-worried-us-biden-mad-2024-7">to rile the US, </a>India's most important geopolitical ally, which has placed pressure on New Delhi to loosen its ties with Russia over Putin's invasion of Ukraine.But Prime Minister Narendra Modi's fear of China — a key Russian ally — means that he's willing to risk American anger to keep Putin close."New Delhi sees Moscow as an important buffer in their relationship due to Moscow's strong ties with Beijing," Sarang Shidore, an analyst at the Quincy Institute, told Business Insider."It is not in Russia's interest to have China and India at loggerheads, so it could, to a degree, act as a restraining agent."<h2 id="0ad4840d-1eb0-4f3e-a27c-3953a5a682f0">India ignores US pressure to cut Russia ties</h2>During the Cold War, the Soviet Union was among India's most important allies, with the Kremlin providing military support during India's clashes with Pakistan.They've remained close ever since, but the relationship is being tested anew in the fallout from the Ukraine war.The US has attempted to persuade India to take part <a target="_blank" href="https://apnews.com/article/russia-ukraine-united-nations-general-assembly-biden-narendra-modi-india-82c9273cf3143cf16e9da23c3dd48170">in its campaign to isolate</a> Russia over the Ukraine invasion — but with little success."Russia is one of India's oldest strategic partners, and New Delhi wants to maintain this relationship regardless of Russia's diplomatic isolation following the war in Ukraine," Rahul Bhatia, an analyst at the Eurasia Group, told BI.India has increased its purchase of Russian goods, including oil and fertilizer, at reduced prices after the US imposed sanctions on Russia.It continues to buy Russian armaments, with around <a target="_blank" href="https://economictimes.indiatimes.com/news/defence/more-than-60-70-of-india-armed-forces-equipped-with-russian-origin-weapons-indian-envoy/articleshow/76903811.cms?from=mdr">70% of its weapons systems believed to be Russian</a>-made, and its military reliant on the Kremlin for spare parts and upgrades."Taking a hardline position against Russia could have both economic and security ramifications for India," said Richard Rossow, an analyst at the Center for Strategic and International Studies.<h2 id="a68bd311-605c-44db-97ac-44c2056c27c0">China's threat to India increases</h2>The threat from Chinese leader Xi Jinping is another key factor in Modi's determination to ignore US pressure and retain good ties with Putin.China's regional might is growing, and it's menacing India, Asia's other major economic power.In 2020, a long-simmering border dispute resulted in deadly clashes between Indian and Chinese troops. China ha<a target="_blank" href="https://www.businessinsider.com/china-produces-vast-undersea-maps-submarine-warfare-report-says-2024-1">s bolstered its presence in the Indian Ocean</a>, and the two are jostling for influence in countries in the region.China has built stronger ties with Russia in the wake of the Ukraine invasion, hoping a Russian victory<a target="_blank" href="https://www.businessinsider.com/xi-china-putin-russia-frenemies-limits-power-sphere-influence-2024-7"> will damage US power and enhance its own global</a> might. And it's this friendship Modi's seeking to drive a wedge between."There is a real chance of future conflicts, and India would prefer to avoid Russia exporting advanced military hardware to China," said Rossow.Some Indian analysts believe that China poses a greater threat to Russia than NATO in the long term and that India can exploit those differences."The Russia-China 'alliance' may be short-term in nature, and that historical conflicts between the two, such as over their long border and under-developed natural resources in Russia's east, will resurface and trigger renewed tensions," said Morrow.But for the time being, Russia's new "no limits"<a target="_blank" href="https://www.businessinsider.com/russia-economy-china-no-limits-partnership-yuan-bank-loans-sanctions-2024-2"> partnership has got Modi worried</a>, and he'll likely be hoping for a swift end to the Ukraine war. By maintaining good relations with Putin he's hoping he can contain the fallout."The war does not at all benefit its interests. The war also opens the door to legitimizing violations of territorial integrity, and endangers a principle that New Delhi has backed strongly," said Shidore.

Fear of China is behind India's exuberant display of friendship with Vladimir Putin 

<ul class="summary-list"><li>Russian imports of goods from China surged in September.</li><li>A new trade agreement between Russia and China was finalized in late August.</li></ul>Russia's imports of goods from China increased sharply last month, a sign that Moscow is leaning more heavily on Beijing after the two countries affirmed their economic ties.China exported around 80 billion yuan worth of goods to Russia in the month of <a target="_blank" href="http://english.customs.gov.cn/Statics/2c024a8b-3aea-4f87-a405-046557ad558f.html">September</a>, a 9% increase from the 73 billion yuan worth of goods it exported the prior month, according to Chinese customs data published on Tuesday. That's larger than the increase recorded over the last several months, with Chinese exports to Russia rising 3% in <a target="_blank" class="" href="http://english.customs.gov.cn/Statics/21dcbdc9-a5c7-4ce5-8884-d45f6ab35488.html">August</a> and 1% in <a target="_blank" class="" href="http://english.customs.gov.cn/Statics/672cd557-3c4e-48bb-8e7c-40cc02a20c7e.html">July</a>.The surge of trading activity follows a fresh <a target="_blank" href="https://www.cnn.com/2024/08/21/europe/china-li-qiang-russia-belarus-trip-intl-hnk/index.html">cooperation agreement</a> Russia and China finalized in late August, which vowed, among other things, to deepen trade ties. The deal reaffirmed the "<a target="_blank" class="" href="https://www.businessinsider.com/russia-ukraine-war-putin-china-trade-partnership-economy-moscow-beijing-2024-4">no limits</a>" <a target="_blank" class="" href="https://www.reuters.com/world/china/moscow-beijing-partnership-has-no-limits-2022-02-04/">partnership</a> Moscow and Bejing have sought to expand since 2022, which took both country's <a target="_blank" class="" href="https://www.businessinsider.com/china-russia-trade-record-ukraine-war-xi-jinping-vladimir-putin-2024-1">trade with one another to a fresh record</a> last year."Our trade relations are not only developing but flourishing, thanks in part to the efforts of our Chinese friends," Russian President Vladimir Putin said in a meeting with China's premier, Li Qiang, per a Kremlin <a target="_blank" href="http://en.kremlin.ru/events/president/news/74910">transcript</a> of the event. "The attention and commitment shown by both governments towards the development of trade and economic relations have yielded positive results."Total trade between Russia and China notched 1.28 trillion yuan from the start of the year through September, up 3.5% from the same period last year, customs data shows.Moscow has grown more reliant on Beijing as an economic partner since being targeted by Western sanctions in 2022. Trade restrictions from the West have pushed Russia into an increasingly <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-ukraine-war-putin-moscow-budget-isolation-west-sanctions-2023-12">isolated position</a> in global markets, economists say, with countries like <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-russia-china-barter-trade-us-secondary-sanctions-payments-2024-8">China</a> and India among the nation's small circle of major trading partners.Russia's trade with China has stumbled recently, however, due to payment issues abroad. In August, most Chinese banks were reportedly <a target="_blank" href="https://www.businessinsider.com/russia-economy-all-china-banks-refuse-yuan-ruble-transfers-sanctions-2024-8">refusing to process payments from Russia</a> after the US threatened to impose secondary sanctions on institutions helping Russia continue to do business and fund its war in Ukraine.

Russia's imports from China surged in September as Moscow and Beijing deepen economic ties  

India was the fourth largest military spender globally in 2023 with an expenditure of USD 83.6 billion, behind the US, China and Russia, according to a report by an independent international think-tank. The report by Stockholm International Peace Research Institute (SIPRI) shared on its website in April also said the "rise" in global military spending last year can be attributed "primarily to the ongoing war in Ukraine and escalating geopolitical tensions in Asia and Oceania and the Middle East". The military expenditure went up in all five geographical regions, with major spending increases recorded in Europe, Asia and Oceania and the Middle East, it said. The report comes amid ongoing conflicts in various parts of the world such as the ones involving Israel-Hamas, Iran-Israel, Russian-Ukraine besides volatility in the Red Sea region. "World military expenditure increased for the ninth consecutive year in 2023, reaching a total of USD 2443 billion. The 6.8 per cent increase in 2023 was the steepest year-on-year rise since 2009 and pushed global spending to the highest level SIPRI has ever recorded," according to the report. The <keyword id="21404979" type="General" weightage="20" keywordseo="world-military-burden" source="keywords">world military burden</keyword> -- defined as military spending as a percentage of global gross domestic product (GDP) -- increased to 2.3 per cent in 2023. Average military expenditure as a share of government expenditure rose by 0.4 percentage points to 6.9 per cent in 2023 and world military spending per person was the highest since 1990 at USD 306, it added. With military expenditure of USD 83.6 billion in 2023, India was the "fourth largest spender globally". Indian spending was up by 4.2 per cent from 2022 and by 44 per cent from 2014. The increase in India's military spending was "mainly a result of growing personnel and operations costs" which made up almost 80 per cent of the total military budget in 2023, the <keyword id="20911352" type="General" weightage="20" keywordseo="SIPRI-report" source="keywords">SIPRI report</keyword> claimed. "This aligns with the government's priority to strengthen the operational readiness of the armed forces amid ongoing tensions with China and Pakistan. In comparison, capital outlays to fund military procurement remained relatively stable at around 22 per cent of the budget in 2023," it said. A total of 75 per cent of these outlays went towards equipments produced domestically, which was the highest level ever and up from 68 per cent in the previous year. The continued shift towards domestic procurement reflects India's goal of becoming self-reliant in arms development and production, the think-tank said in its repot fact sheet shared on its website. The Indian Army has maintained that deployment of its troops and other elements along the LAC is "extremely robust" and "balanced". The eastern <keyword id="21271073" type="General" weightage="20" keywordseo="Ladakh-border-standoff" source="keywords">Ladakh border standoff</keyword> erupted on May 5, 2020, following a violent clash in the Pangong Lake area. The ties between India and China nose-dived significantly following the clash in the Galwan Valley in June 2020 that marked the most serious military conflict between the two sides in decades. SIPRI is an independent international institute dedicated to research into conflict, armaments, arms control and disarmament. Established in 1966, it provides data, analysis and recommendations based on open sources to policymakers, researchers, media and the interested public. The Stockholm-based think-tank monitors developments in military expenditure worldwide and maintains the most comprehensive, consistent and extensive publicly available data source on military expenditure, according to its online portal. The US military spending was USD 916 billion in 2023, which was 2.3 per cent more than in 2022 and 9.9 per cent more than in 2014, the report said. The US remained by far the largest spender in the world, allocating 3.1 times more to the military than the second largest spender China. "The biggest percentage increase among all US military spending categories in 2023 was for 'research, development, test and evaluation (RDT&amp;E)". The Stockholm-based think-tank also said in its report that Ukraine was the "eighth largest spender" in 2023 after a spending surge of 51 per cent to reach USD 64.8 billion. This gave Ukraine "a military burden of 37 per cent and represented 58 per cent of total government spending". "Ukraine's military spending in 2023 was 59 per cent the size of Russia's. However, Ukraine also received at least USD 35 billion in military aid during the year, including USD 25.4 billion from the US. Combined, this aid and Ukraine's own military spending were equivalent to about 91 per cent of Russian spending," the report claimed. According to the report, Russia's military spending increased by 24 per cent to an estimated USD 109 billion in 2023. "China, the world's second largest military spender, allocated an estimated USD 296 billion to the military in 2023, an increase of 6 per cent from 2022. This was the 29th consecutive year-on-year rise in China's military expenditure. China accounted for half of total military spending across the Asia and Oceania region. Several of China's neighbours have linked their own spending increases to China's rising military expenditure," the Stockholm-based think-tank claimed in its report. In 2023, the 31 <keyword id="20763732" type="General" weightage="20" keywordseo="NATO-members" source="keywords">NATO members</keyword> accounted for USD 1,341 billion, equal to 55 per cent of the world's military expenditure, the report said. SEE ALSO:<a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-8a-may-be-more-expensive-than-its-predecessor-as-per-a-new-leak/articleshow/109499394.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-8a-may-be-more-expensive-than-its-predecessor-as-per-a-new-leak/articleshow/109499394.cms" target="_blank">Google Pixel 8a may be more expensive than its predecessor, as per a new leak</a><a href="https://www.businessinsider.in/tech/mobile/webstories/best-smartphones-under-25000-in-india/slidelist/109529634.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/webstories/best-smartphones-under-25000-in-india/slidelist/109529634.cms" target="_blank">Best smartphones under ₹25,000 in India</a><a href="https://www.businessinsider.in/sports/webstories/at-17-indian-chess-prodigy-d-gukesh-becomes-youngest-challenger-for-world-championship/slidelist/109492021.cms" target="_blank"></a> <a href="https://www.businessinsider.in/sports/webstories/at-17-indian-chess-prodigy-d-gukesh-becomes-youngest-challenger-for-world-championship/slidelist/109492021.cms" target="_blank">At 17, Indian chess prodigy D Gukesh becomes youngest challenger for World Championship</a>

India fourth largest military spender globally in 2023: SIPRI report

<ul class="summary-list"><li>"We will not stop at that (three carriers)," India's defense minister recently said.</li><li>Five or six aircraft carriers would give India a force equal to that of China.</li></ul>India may build a fleet of five to six new aircraft carriers, according to a comment from the country's defense minister that's been widely debated about whether that's a good strategy or if the offhand remark was even serious.The Indian Navy operates two small aircraft carriers. Four more would give India a carrier force on par with China's growing one. And it would not be much smaller — at least in number of vessels — than the US Navy's 11 supercarriers.But whether this ambitious shipbuilding project will happen is another matter. Many Indian experts are convinced it's a bad idea.Exactly what the Indian government is thinking isn't clear. During an <a target="_blank" href="https://www.tribuneindia.com/news/india/work-on-third-aircraft-carrier-to-start-soon-more-to-follow-says-rajnath-621319">interview</a> with an Indian newspaper regarding plans to construct a third aircraft carrier, Defense Minister Rajnath Singh said India would build yet more. "We will not stop at that (three carriers)," he said. "We will make five, six more."Some Indian experts aren't sure the government is even serious about this. The defense minister "seemingly made an off-the-cuff remark that was picked up by the media," Abhijit Singh, a former Indian naval officer and now an analyst at the Observer Research Foundation think tank in New Delhi, told Business Insider. "He was only trying to dispel suggestions that the government is resistant to a proposal for a third aircraft carrier."Nonetheless, there are compelling reasons why India might want a large carrier fleet. India's rival China now has three carriers, including the newly launched 80,000-ton <a target="_blank" href="https://www.businessinsider.com/chinas-newest-aircraft-carrier-seen-with-aircraft-mock-ups-images-2024-4">Fujian</a>, and may aim for a fleet of six carriers by 2035. China — which <a target="_blank" href="https://www.businessinsider.com/chinese-troops-beat-indian-soldiers-batons-wrapped-in-barbed-wire-2020-6">fought</a> border clashes with India in the <a target="_blank" href="https://www.businessinsider.com/after-himalayan-clash-india-prepares-navy-to-take-on-china-2021-6">Himalayas</a> in 2020 — is beginning to project its power into the <a target="_blank" href="https://warontherocks.com/2024/05/its-still-the-indian-ocean-parsing-sino-indian-naval-competition-where-it-counts/">Indian Ocean</a>, which is India's maritime backyard."It is expected that the Chinese will permanently station one of its CBGs [carrier battle groups] in the Indian Ocean, supported by its various bases in Djibouti (on the western edge of the Indian Ocean), <a target="_blank" href="https://www.businessinsider.com/rapid-construction-at-cambodia-base-amid-concern-about-china-presence-2021-6">Ream in Cambodia</a> (on the eastern edge of the Indian Ocean), and Gwadar in Pakistan, Hambantota in Sri Lanka, and Kyaukpyu in Myanmar," warned India's <a target="_blank" href="https://swarajyamag.com/defence/countering-chinas-expansion-india-to-build-five-to-six-more-aircraft-carriers-in-future-defence-minister-rajnath-singh">Swarajya</a> magazine.Interestingly, Swarajya magazine also suggested that carriers could project Indian power into the South China Sea, which is China's maritime backyard. Indian warships have periodically sailed in those waters.<div type="image" title="A view from the sloped bow of the INS Vikrant that carries MiG-29K fighter jets." height="1333" width="2000" msid="110619274" hostid="261" sizebytes="239670"></div>India has two carriers of around 45,000 tons each: the Vikramaditya (a refurbished former Soviet vessel) and the Vikrant, India's first home-built carrier. Both are <a target="_blank" href="https://interestingengineering.com/lists/ski-jumps-catapults-aircraft-carrier">ski-jump</a> designs that launch the troubled Soviet-era MiG-29K under its own power because it lacks catapults. Despite early speculation that the proposed third carrier would be a 65,000-ton ski-jump design similar to Britain's <a target="_blank" href="https://www.businessinsider.com/uks-flagship-carrier-embarrassing-setback-pulls-out-big-nato-exercise-2024-2">Queen Elizabeth-class</a>, the Indian government appears to be opting for a <a target="_blank" href="https://www.newsweek.com/india-third-aircraft-carrier-china-indian-pacific-ocean-region-1847935">45,000-ton vessel</a> similar to the Vikrant, and carrying French-made <a target="_blank" href="https://www.businessinsider.com/frances-rafale-fighter-jet-popular-dassault-cant-keep-up-2024-3">Rafale fighters</a>.This means that Indian carriers would continue to be less than half the size of the 100,000-ton, nuclear-powered US Nimitz- and Ford-class behemoths, which are equipped with steam or electromagnetic catapults that can launch heavier planes, especially airborne early warning aircraft; China's Fujian also uses an advanced electromagnetic catapult. They would also be less expensive, with the third Indian carrier estimated at around $5 billion, compared to $13 billion for a Ford-class carrier.In fact, some Indian naval experts would prefer a larger carrier equipped with catapults. "Small aircraft carriers, like those India possesses, are increasingly vulnerable and unlikely to play a significant role in future conflicts," Singh, the defense analyst, said. "Unfortunately, the country lacks the funding for a large carrier and can only afford another small flattop. This presents a predicament with no easy solutions."On the other hand, there is a reason why America builds enormously expensive aircraft carriers. Its global interests arguably require the ability to dispatch and maintain floating airfields around the world, often in distant places where airbases aren't available. For India and China, which have a more regional focus, smaller vessels may suffice.For India, carriers are more than floating airfields. They are symbols of national power. Thus regardless of their military utility against a powerful adversary like China, carriers would enable India support other operations, such as humanitarian, peacekeeping and anti-piracy missions."The consensus among India's maritime observers is that the aircraft carrier remains central to maritime strategy, not just for its ability to dominate the littoral but also for its crucial peacetime role," said Abhijit Singh. "In less-than-war situations, the flattop can shift the psychological balance in ways no other naval platform can. Despite its drawbacks, the aircraft carrier's aura and impact in peacetime operations are unmatched."Michael Peck is a defense writer whose work has appeared in Forbes, Defense News, Foreign Policy magazine, and other publications. He holds an MA in political science from Rutgers Univ. Follow him on <a target="_blank" href="https://www.twitter.com/@mipeck1">Twitter</a> and <a target="_blank" href="https://www.linkedin.com/in/mipeck/">LinkedIn</a>.

A bizarre comment stirred speculation India may try to match China's carrier fleet 

<ul class="summary-list"><li>Tim Cook discussed manufacturing in Indonesia with president Joko Widodo, Reuters reported.</li><li>Such a move would help Apple reduce its reliance on manufacturing in China. </li></ul>Apple has put Indonesia in the frame as it looks to reduce its reliance on manufacturing in China.After meeting president Joko Widodo in Jakarta on Tuesday, CEO <a target="_blank" href="https://www.businessinsider.com/tim-cook">Tim Cook</a> said the iPhone maker will <a target="_blank" href="https://www.reuters.com/technology/apple-ceo-says-looking-into-possibility-building-manufacturing-facility-2024-04-17/">"look at"</a> Indonesia, Reuters reported."We talked about the president's desire to see manufacturing in the country, and it is something that we will look at," Cook said.His comments come amid a broader push by Apple to diversify its production beyond China, more than <a target="_blank" href="https://www.businessinsider.com/apple-dependent-on-china-economy-manufacturing-problem-2023-9">two decades after it began manufacturing</a> there.Cook also posted photos on X with several content creators he met on his trip to Indonesia on Wednesday. About 14% of its iPhone production came <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-04-10/apple-s-india-iphone-output-hits-14-billion-in-pivot-from-china">from India</a> in the last financial year, Bloomberg recently reported. The company also opened <a target="_blank" href="https://www.businessinsider.com/apple-india-store-bkc-mumbai-spans-20000-sq-feet-2023-4">retail stores in India</a> last year.Apple has also turned to Vietnam to help diversity its manufacturing. Foxconn, its major Chinese assembler, <a target="_blank" href="https://www.businessinsider.com/exclusive-foxconn-to-shift-some-apple-production-to-vietnam-to-minimise-china-risk-2020-11">moved production</a> of iPads and MacBooks there in 2020 following a request from Apple.Cook visited Vietnam earlier this week. Apple said in a statement on its Vietnamese website that it <a target="_blank" href="https://www.businessinsider.com/tim-cook-apple-ceo-arrives-vietnam-key-manufacturing-hub-2024-4">plans to boost spending </a>on suppliers in the country.The tech giant's attempts to reduce its dependence on China come amid <a target="_blank" href="https://markets.businessinsider.com/news/stocks/us-china-tensions-taiwan-kevin-mccarthy-war-politics-biden-xi-2023-4">growing tension</a> between the US and China. That's been sparked by issues including <a target="_blank" href="https://markets.businessinsider.com/news/stocks/trump-china-trade-war-tensions-rise-ahead-of-tariff-escalations-2019-10-1028584484">trade disputes</a>, competition over chips used for AI and cars, as well as <a target="_blank" href="https://www.businessinsider.com/china-has-found-another-way-to-hurt-usa-inc-2024-3">tough export controls</a>.Apple didn't immediately respond to a request for comment from Business Insider, made outside normal working hours.

Apple keeps looking for new places to make its stuff that aren't China

<ul class="summary-list"><li>The West's sanctions are pushing Russia to develop alternative payment systems with its trade partners.</li><li>Russia's SPFS and Mir systems, China's CIPS, and India's UPI help aim to challenge SWIFT's dominance.</li></ul>The West's tightening sanctions are driving Russia nearly up against the wall — but <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-how-moscow-pays-war-economy-afloat-sanctions-ukraine-2024-2">Moscow keeps finding ways</a> to keep the country's economy going.Russia's trade partners, too, are looking for ways to continue doing business with the country via alternative systems to rival the Western-led, US dollar-dominated global financial order.Discussions about <a target="_blank" class="" href="https://markets.businessinsider.com/news/commodities/de-dollarization-reasons-why-countries-move-away-us-dollar-2023-7">de-dollarization</a> have been gaining traction in recent years as Western-led sanctions against Russia related to its invasion of Ukraine are making other countries wary of the potential consequences of crossing Washington.There's been some success, with trade between Russia and China, as well as Russia and India, chugging along until recently. Now, even <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-all-china-banks-refuse-yuan-ruble-transfers-sanctions-2024-8">Chinese banks</a> — buckling under the pressure of tightening US sanctions — are pushing back on processing transactions for Russian companies.But Russia and its partners have been looking at other ways to do business outside the Western-led order, in part because technology is making it easier to process payments and get around the US-dollar-dominated global financial order.As <a target="_blank" class="" href="https://www.brookings.edu/articles/the-changing-role-of-the-us-dollar/">Brookings researchers</a> Sam Boocker and David Wessel explained in an August post, "innovations in payment technology could reduce the dollar's role in the global economy."To be sure, <a target="_blank" class="" href="https://markets.businessinsider.com/news/currencies/king-dollar-reign-supreme-3-reasons-dedollarization-fears-yuan-euro-2023-5">king dollar</a> is entrenched in the world's financial system, so it's unlikely to be dethroned, most experts say. However, new platforms are coming up that could chip away at its dominance.These are some of the alternative trading and payment systems that are trying to crack the US-led trade and payments order:<h2 id="e3db2e40-91e6-40ce-8ea6-bd2555a945d0">Russia set up SPFS and Mir years ago, citing 'risks'</h2>Russia prepared for even more sanctions years ago, following trade restrictions after it annexed Crimea in 2014."There are risks in using the global financial networks," Elvira Nabiullina, governor of Russia's central bank, told <a target="_blank" class="" href="https://www.cnbc.com/2018/05/23/russias-central-bank-governor-touts-moscow-alternative-to-swift-transfer-system-as-protection-from-us-sanctions.html">CNBC in 2018.</a> "Therefore, since back in 2014, we have been developing our own systems."Some Russian banks were banned from the SWIFT messaging system for banking transactions following Russia's full-scale invasion of Ukraine. Moscow has been touting its homegrown ruble-based payment system — the System for Transfer of Financial Messages, or SPFS — that was set up in 2014.<div type="image" title="Russian President Vladimir Putin meets with Central Bank chief Elvira Nabiullina" height="3605" width="5408" msid="112978409" hostid="261" sizebytes="1587422"></div>At the end of 2023, users of SPFS included 556 organizations from 20 countries. Of these, 159 — about a quarter of total participants — were foreign and their use of the messaging system more than doubled from 2022, according to Russia's central bank, per <a target="_blank" class="" href="https://interfax.com/newsroom/top-stories/103040/">Interfax</a>.In July, Russia and Iran — another heavily-sanctioned country — finalized details to connect the banking systems of the two countries, Iran's <a target="_blank" class="" href="https://en.mehrnews.com/news/217372/Iran-Russia-finalize-integration-of-national-payment-systems">Mehr news agency</a> reported.This means that Russia's Mir payment system would work with Iran's Shetab banking system, allowing for both pariah states to trade more smoothly.<h2 id="dc8236fe-da57-4f21-8a5f-0a2f6f46c77a">China's CIPS is growing quickly</h2>China's Cross-Border Interbank Payment System, or CIPS, is an alternative system that processes payments in Chinese yuan.Launched in 2015, CIPS has about <a target="_blank" class="" href="https://www.cips.com.cn/en/2024-08/01/article_2024080115043180408.html">2,000 participants as of July,</a> compared to <a target="_blank" class="" href="https://www.swift.com/about-us">11,000 for SWIFT.</a>CIPS "has been growing rapidly in recent years," the Brookings researchers wrote.In 2023, CIPS processed over 6.6 million transactions, totaling 123 trillion Chinese yuan, or $17.3 trillion — up nearly 30% by value from a year ago, according to <a target="_blank" class="" href="http://www.pbc.gov.cn/en/3688110/3688172/5188125/5327700/2024041216580199504.pdf">China's central bank.</a><h2 id="a578a224-e5df-4b31-8404-e02cff739d93">India's UPI is already used extensively</h2>India — now a key trading part of Russia — also has its own system.The country's <a target="_blank" class="" href="https://www.npci.org.in/what-we-do/upi/product-overview">Unified Payments Interface,</a> or UPI, was developed in 2016 and is <a target="_blank" class="" href="https://edition.cnn.com/2024/04/29/tech/india-digital-payments-upi-growth-hnk-intl/index.html">used extensively</a> in India today, even among everyday consumers.The payment system has gotten so big that it's not just limited to India. The National Payments Corporation of India, which runs the platform, has partnered with financial institutions in other countries, including France, the United Arab Emirates, and Singapore.<div type="image" title="A man behind piles of fruits at his stall in India that features a QR payment code." height="701" width="1024" msid="112978412" hostid="261" sizebytes="98408"></div>If the UPI's footprint expands to more countries, it could be a way to bypass the SWIFT banking system, wrote Evan Freidin, an international relations analyst, for the <a target="_blank" class="" href="https://www.lowyinstitute.org/the-interpreter/india-s-plan-world-without-cash">Lowy Institute,</a> an Australian think tank."It is significant that UPI can also be used to bypass the SWIFT banking system, enabling payments with sanctioned countries such as Russia, thereby weakening US financial hegemony," Freidin wrote in July.<h2 id="48c27799-0d46-40f6-b4b7-e9225b102131">Central banks are looking at digital currencies</h2>Countries are also increasingly looking to build central bank digital currencies, or CBDCs. These currencies are similar to cryptocurrencies but are <a target="_blank" rel=" nofollow" href="https://www.weforum.org/agenda/2023/11/cbdcs-how-different-cryptocurrency-stablecoin/">issued and backed by central banks</a>.The <a target="_blank" rel="" href="https://markets.businessinsider.com/news/currencies/cbdcs-crypto-central-banks-bis-digital-currencies-bitcoin-stablecoins-tether-2021-9">Bank for International Settlements,</a> an organization of central banks, is overseeing the trial of a CBDC platform for wholesale cross-border payment.Participants of the project, called <a target="_blank" class="" href="https://www.reuters.com/technology/saudi-arabia-joins-bis-led-central-bank-digital-currency-trial-2024-06-05/">mBridge,</a> include China, Hong Kong, Thailand, the United Arab Emirates, and Saudi Arabia. It's dominated by Beijing, which has already rolled out the digital Chinese yuan.<div type="image" title="Woman with a face mask using a touch screen at an exhibition booth for the e-renminbi." height="746" width="1024" msid="112978411" hostid="261" sizebytes="54016"></div>The Brookings researchers wrote that these CBDCs could "upend the dollar's role as a currency 'middleman' by reducing settlement times, making it cheaper and easier to trade non-dollar currencies."The CBDCs integrate messaging and payments, unlike current systems like SWIFT and major US dollar clearing system CHIPS.<h2 id="67caf2a1-65f8-470a-8a88-3f2e381242e9">Russia rushes into crypto</h2>As doors to transact in fiat money close, Russia is now looking to trade in cryptocurrencies.It's in such a rush to get the system up and running that it plans to start crypto exchange trials as soon as September 1, anonymous sources told <a target="_blank" rel=" nofollow" href="https://www.bloomberg.com/news/articles/2024-08-26/russia-close-to-starting-trials-of-crypto-payments-exchanges?srnd=homepage-americas">Bloomberg in late August.</a>Creating this mode of payment has gotten more pressing because even <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-all-china-banks-refuse-yuan-ruble-transfers-sanctions-2024-8">banks from China</a> are rejecting most transactions with Russian entities.<a target="_blank" rel=" nofollow" class="" href="http://www.kremlin.ru/events/president/news/74566">Russian President Vladimir Putin</a> himself said in July that Russia had to <a target="_blank" rel=" nofollow" class="" href="https://tass.com/economy/1818055">"seize the moment"</a> to create a legal framework for digital assets, as they are being increasingly used to settle international payments.<h2 id="15b13f44-3051-4887-85cf-66563ce70c10">Going back to barter trade</h2>If all else fails, there's also the age-old method of barter trade.In August, <a target="_blank" rel=" nofollow" class="" href="https://www.reuters.com/markets/first-russia-china-barter-trade-may-come-this-autumn-sources-say-2024-08-08/">Reuters</a> reported that Russia and China are planning to revive the practice of <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-russia-china-barter-trade-us-secondary-sanctions-payments-2024-8">barter trade</a> to get around Western sanctions.The deals could involve agriculture and could come as soon as this fall, the news agency reported, citing anonymous trade and payments sources.The two countries are no strangers to barter.It was practiced during the <a target="_blank" rel=" nofollow" href="https://www.joc.com/maritime-news/soviet-union-allows-return-barter-some-trading-deals-partners-former-e-bloc_19910708.html">Soviet era</a> and <a target="_blank" rel=" nofollow" href="https://www.nytimes.com/1998/09/06/world/as-ruble-withers-russians-survive-on-barter.html">in the years following the bloc's collapse.</a> At the time, China was a key trading partner.In August 2022, the <a target="_blank" rel="" class="" href="https://www.businessinsider.com/taliban-import-russia-oil-barter-exchange-afghanistan-raisin-minerals-medicine-2022-8">Taliban regime in Afghanistan</a> also discussed barter trade with Russia that could involve trading Russian crude oil products in exchange for raisins, minerals, and medicinal herbs, according to RIA Novosti, a Russian state-owned news agency.Last year, cash-strapped <a target="_blank" rel=" nofollow" class="" href="https://www.voanews.com/a/pakistan-allows-barter-trade-with-iran-afghanistan-russia-/7120806.html">Pakistan</a> authorized the barter trade of specific goods with Russia.In 2019, China <a target="_blank" href="https://www.reuters.com/article/markets/currencies/china-in-barter-deal-for-200000-tonnes-of-malaysian-palm-oil-report-idUSKCN1T22W0/">traded $150 million worth of palm oil</a> from Malaysia for a range of products and services, including natural resources and defense equipment.

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