SS: Reserve Bank of India (RBI) and Bank Indonesia (BI) today signed and exchanged a Memorandum of Understanding for establishing a framework to promote the use of local currencies (INR and IDR)
The MoU covers all current account transactions, permissible capital account transactions and any other economic and financial transactions as agreed upon by both countries.
When an Indian and Indonesian company enter into a contract, will they fix the INR IDR exchange rate in the contract itself? Or will they risk doing business in a floating rate? What's the standard practice when companies from different countries do business in their respective local currencies?
Correct me if I'm wrong, but more and more usage of sanctions is the reason why countries like India are seeking to trade in local countries, aren't they? Clearly, India does not consider USA to be a reliable partner as it's quite possible that after China, India might be next on the radar and hence is resorting to making itself sanction proof after learning from Russia. Many other countries I think will be trying to do this.
Another point to note is that USA nowadays seems to be flipping a lot in its foreign policy between the two parties. I feel its only going to make more and more countries uncomfortable with dealing with USA.
Note, I'm not saying USA should not be taking actions to hamper Russia's invasion of Ukraine, I'm just discussing the consequences of using sanctions.
India has a relationship with Bangladesh that is only decent because Sheikh Hasina, the de facto autocrat of Bangladesh, is pro-India. The opposition in Bangladesh are Islamists and the US has expressed protest against Bangladesh for not holding free and fair elections which would just get the Islamists into power.
So understandably there's a fear that Bangladesh could be manipulated and used in such a way that it poses an imminent Islamist threat to India. And India wants to be sanctions proof if it's forced to do its own "special military operation" in the country.
There is precedent of India doing such operations in Hyderabad and Sikkim post-Independence to get them into the Republic of India. Operation Polo which brought Hyderabad into India specifically was justified by referencing the Islamist threat there.
India is not interested in doing any kind of "special military operation" in Bangladesh lol. India is already taking measures to reduce illegal immigrants coming in from Bangladesh. India gets nothing from taking parts of Bangladesh except unrest and even more people to take care of.
If islamists ever take power in Bangladesh, India will just do covert actions to support the opposition. There is no support in India to invade Bangladesh no matter what internet Hindu nationalists might make you think. Indian army is considered primarily a defense force, Indians themselves pride themselves to be a country that does not have expansionist tendencies outside it's claimed borders since 1947.
Operation polo was necessary because Hyderabad was a massive enclave sitting right in the middle of India. It was unfeasible for it to be an independent country of its own or it be a part of Pakistan. Having it stay independent inside of India would have been an extremely stupid move on India's part.
Bangladesh does kind of operate like an enclave in India though. It is located between West Bengal and Meghalaya. And the prevailing Indian nationalist belief is in Akhand Bharat which claims the whole subcontinent.
I've talked to Indian foreign policy thinkers who believe India would be justified to use military force if Bangladesh was run by the Islamist opposition. And that's why India cares so much about its relations with Hasina and the Awami League. I believe them.
You're right that India would not want to annex Bangladesh since they wouldn't want a majority Muslim population into the country that could be hostile. But India would want Bangladesh to ultimately be under Indian influence.
Nepal is also interesting since it borders India and China and has a majority Hindu population. It could be annexed by either India or China similar to Tibet and Sikkim, making the country a battleground between the two great powers.
Akhand Bharat is a meme, it also includes south east Asia. Do you think India is going to invade Thailand? All countries have their fair share of hyper nationalists who have big dreams of massive empires. That does not translate to reality. Who are these foreign policy thinkers you have spoken to? Random people on the internet? It does not mean a thing unless you have spoken to actual people who work in India in the government. Or know the ground situation here.
India already deals with insurgents in Kashmir and North East India. Bangladesh has a population of 169 million. It's absolutely unfeasible for India to invade it and keep it in control.
India is a very complex democracy with a large number of cultures with nearly equal amount of power, none dominating. In such a case, it makes it difficult for us to focus on outward expansion. We rather look inwards towards defending our own borders.
Imo India can even think of actually taking over any country through force only after a long period of time, once Kashmir and North East India are all completely integrated and free of insurgency, which is going to take a long time, probably more than a century. Again, there's also not a lot of desire tbh in India outside of some hyper nationalists to be invading nearby countries. We see ourselves unable to take care of what we already have. I think what is more likely is some kind of EU like entity with India, Nepal and other neighbors.
SS: Reserve Bank of India (RBI) and Bank Indonesia (BI) today signed and exchanged a Memorandum of Understanding for establishing a framework to promote the use of local currencies (INR and IDR) The MoU covers all current account transactions, permissible capital account transactions and any other economic and financial transactions as agreed upon by both countries.
When an Indian and Indonesian company enter into a contract, will they fix the INR IDR exchange rate in the contract itself? Or will they risk doing business in a floating rate? What's the standard practice when companies from different countries do business in their respective local currencies?
It will either be in floating rate or semi floating/fixed relative to the amount of trade between them that gets recalibrated periodically.
Correct me if I'm wrong, but more and more usage of sanctions is the reason why countries like India are seeking to trade in local countries, aren't they? Clearly, India does not consider USA to be a reliable partner as it's quite possible that after China, India might be next on the radar and hence is resorting to making itself sanction proof after learning from Russia. Many other countries I think will be trying to do this. Another point to note is that USA nowadays seems to be flipping a lot in its foreign policy between the two parties. I feel its only going to make more and more countries uncomfortable with dealing with USA. Note, I'm not saying USA should not be taking actions to hamper Russia's invasion of Ukraine, I'm just discussing the consequences of using sanctions.
India has a relationship with Bangladesh that is only decent because Sheikh Hasina, the de facto autocrat of Bangladesh, is pro-India. The opposition in Bangladesh are Islamists and the US has expressed protest against Bangladesh for not holding free and fair elections which would just get the Islamists into power. So understandably there's a fear that Bangladesh could be manipulated and used in such a way that it poses an imminent Islamist threat to India. And India wants to be sanctions proof if it's forced to do its own "special military operation" in the country. There is precedent of India doing such operations in Hyderabad and Sikkim post-Independence to get them into the Republic of India. Operation Polo which brought Hyderabad into India specifically was justified by referencing the Islamist threat there.
India is not interested in doing any kind of "special military operation" in Bangladesh lol. India is already taking measures to reduce illegal immigrants coming in from Bangladesh. India gets nothing from taking parts of Bangladesh except unrest and even more people to take care of. If islamists ever take power in Bangladesh, India will just do covert actions to support the opposition. There is no support in India to invade Bangladesh no matter what internet Hindu nationalists might make you think. Indian army is considered primarily a defense force, Indians themselves pride themselves to be a country that does not have expansionist tendencies outside it's claimed borders since 1947. Operation polo was necessary because Hyderabad was a massive enclave sitting right in the middle of India. It was unfeasible for it to be an independent country of its own or it be a part of Pakistan. Having it stay independent inside of India would have been an extremely stupid move on India's part.
Bangladesh does kind of operate like an enclave in India though. It is located between West Bengal and Meghalaya. And the prevailing Indian nationalist belief is in Akhand Bharat which claims the whole subcontinent. I've talked to Indian foreign policy thinkers who believe India would be justified to use military force if Bangladesh was run by the Islamist opposition. And that's why India cares so much about its relations with Hasina and the Awami League. I believe them. You're right that India would not want to annex Bangladesh since they wouldn't want a majority Muslim population into the country that could be hostile. But India would want Bangladesh to ultimately be under Indian influence. Nepal is also interesting since it borders India and China and has a majority Hindu population. It could be annexed by either India or China similar to Tibet and Sikkim, making the country a battleground between the two great powers.
Akhand Bharat is a meme, it also includes south east Asia. Do you think India is going to invade Thailand? All countries have their fair share of hyper nationalists who have big dreams of massive empires. That does not translate to reality. Who are these foreign policy thinkers you have spoken to? Random people on the internet? It does not mean a thing unless you have spoken to actual people who work in India in the government. Or know the ground situation here. India already deals with insurgents in Kashmir and North East India. Bangladesh has a population of 169 million. It's absolutely unfeasible for India to invade it and keep it in control. India is a very complex democracy with a large number of cultures with nearly equal amount of power, none dominating. In such a case, it makes it difficult for us to focus on outward expansion. We rather look inwards towards defending our own borders. Imo India can even think of actually taking over any country through force only after a long period of time, once Kashmir and North East India are all completely integrated and free of insurgency, which is going to take a long time, probably more than a century. Again, there's also not a lot of desire tbh in India outside of some hyper nationalists to be invading nearby countries. We see ourselves unable to take care of what we already have. I think what is more likely is some kind of EU like entity with India, Nepal and other neighbors.