Economic Highlights

New Delhi, 16 June 2025

AI Crash Jolts Global Aviation

IGNITES PVT Vs PUBLIC DEBATE

By Shivaji Sarkar 

In a single fiery instant over Ahmedabad, the confidence in civil aviation—India’s and the world’s—came crashing down with Air India’s ill-fated Dreamliner. The death toll of 142 plus about another 20 deaths on the crash site at thehospital is tragic, but the fallout runs deeper. Investor panic, plunging Boeing shares, and over Rs 1,000 crore in insurance claims expose a volatile mix of corporate negligence, regulatory failure, and a sector increasingly driven by cost-cutting rather than caution. 

The Tata Group, which owns Air India, promptly announced a Rs 1 crore compensation per victim—a gesture as much about damage control as it is about accountability. Aviation analysts believe this move is less generosity and more recognition of the magnitude of the crisis—and the global scrutiny that now hovers over India’s civil aviation, the third largest in passenger volume and sixth in cargo worldwide. Apart international norms mandate such compensation. 

The impact has been swift and global. The crash has led to circumspection and crashing share prices rattle investor confidence. Boeing shares dropped by 8 per cent just days before the Paris Air Show, where the company is expected to showcase its productions. Boeing CEO Kelly Ortberg has announced cancellation of his visit to the air show as the crash revived concerns of about Boeings widebody jets. Boeing’s supplier of 787 fuselage, Spirit Aerosystems; and engine - GE Aerospace have also suffered 20 per cent losses. Total losses are estimated in billions of dollars though in percentage terms it might look small. 

This crash has reignited a long-standing debate: is Boeing’s private-sector-driven model more vulnerable than Airbus, a European government-backed consortium? The Dreamliner, despite its reputation as a safe aircraft, has faced repeated technical issues—chief among them, its lithium-ion battery system, which has caused electrical fires and aircraft groundings in the past across the world, including by Japan Airlines. These batteries, similar to those used in e-rickshaws around Delhi, are prone to thermal runaway: a condition where internal heat builds up uncontrollably, leading to fires, toxic gas release, and even explosions. 

In 2018-19 Boeing has paid $1.1 billion to avoid prosecution for its two 737 Max plane crashes.It has been mired in such controversies, including last year’s Starliner crash that stranded Sunita Williams and Butch Wilmore at the international space station (ISS). There are reports of Boeing workers complaining about shoddy production, including a claim by whistleblower that the Dreamliner had structural flaws, said to be six tonnes heavier, than it should be. No Dreamliner had crashed before the Ahmedabad incident. Another whistleblower, a Boeing engineer warned in 2024 that all 787s should be grounded due to structural flaws. One who reportedly expressed concerns about substandard spares, was later found dead under mysterious circumstances. 

The Ahmedabad tragedy also highlights vulnerabilities in India’s aviation ecosystem, increasingly dominated by just two players—IndiGo and Tata group airlines (Air India and Vistara)—which together control nearly 90 percent of the market. This quasi-duopoly, despite Udaan and other regional airline schemes, limits competition and raises concerns over pricing, service quality, and most alarmingly, safety. 

Flying is becoming costlier and more fragile. High aviation fuel costs in India—among the world’s highest—along with supply chain constraints have pushed airlines to cut corners. There are growing passenger complaints about air-conditioning being kept off during boarding to save fuel. Some aircraft remain grounded for lack of spares—especially engines from Pratt & Whitney. As of this year, 133 aircraft across airlines of India or 16 percent of the fleet were grounded. 

The Directorate General of Civil Aviation (DGCA) fined Akasa Air, Air India, and IndiGo for repeated safety violations. SpiceJet was ordered to halve its operations in 2022. The Bureau of Civil Aviation Security (BCAS) has also levied multiple penalties—for instance, Rs 30 lakh on Air India and over Rs1 crore in fines on airport operators across Lucknow, Bhavnagar, Chennai, and Delhi for violating the 1937 Aircraft Rules. This year Mumbai airport was also penalised for ignoring safety. 

Most recently, DGCA inspections of Turkish Airlines flights between May 29 and June 2, 2025, revealed alarming safety breaches—unauthorized ground personnel at Bengaluru, missing documentation for dangerous cargo, and unaccounted equipment at Hyderabad and Chennai airports.

Statistically, Boeing appears to fare worse than Airbus on safety metrics in the U.S. Since 2014, Airbus aircraft have faced 10 technical malfunctions, but no fatal crashes. Boeing, in contrast, has reported 32 malfunctions and multiple fatal issues. While more Boeings are in operation, the frequency of groundings and incidents raises red flags.Despite this, the Tata Group has inked a massive deal for 500 Boeing aircraft to be delivered over the next decade—a stark contrast from earlier decades when India, through Indian Airlines and Air India, maintained a balance between Boeing and Airbus procurement under public ownership. 

Every time an aviation tragedy strikes, the default explanation tends to be “pilot or human error.” While human error is real, this narrative often absolves aircraft manufacturers and operators of deeper accountability. In the Ahmedabad case, it’s imperative that investigations go beyond the cockpit and scrutinize systemic safety lapses, fleet maintenance records, battery safety, and manufacturing standards. 

The DGCA’s report on an earlier in-flight shutdown incident on a B-787 (VT-ANW) in August 2023 is one of many warning signs. In November that year, the government admitted in the Rajya Sabha that 18 safety violations had been recorded across airlines, airports, and ground service providers in just three years. 

The aviation sector—by design—cannot afford to operate on the edge. When corporate profit, regulatory apathy, and weak oversight intersect, the result is not just turbulence—it’s tragedy. The Ahmedabad crash is not just an accident; it is a wake-up call. India’s aviation authorities must seize this moment to launch a full-scale, independent safety audit of all domestic fleets. Because in the sky, there is no room for error, and no margin for complacency.---INFA 

(Copyright, India News & Feature Alliance)

Spotlight

New Delhi 14 June 2025

Trilateral Dialogue in Beijing

China’s Model of Stabilization or Regional Dominance?

By Piotr Opalinski               

On May 21, 2025, an informal, tripartite meeting of the foreign ministers of China, Wang Yi, Pakistan’s Ishaq Dar, and Afghanistan’s Amir Khan Muttaqi was held in Beijing. The aim of this Chinese initiative was to ease tensions between Islamabad and Kabul, which had intensified after the deportation – from April 1, 2025 – of over 84,000 Afghans from Pakistan under the second phase of the Illegal Foreigners Repatriation Plan. The meeting also served as a platform for dialogue on deepening economic and infrastructure cooperation, including the extension of the China-Pakistan Economic Corridor (CPEC) project to Afghanistan. It was announced that the next round of talks would be held in Kabul. 

China pursues a highly pragmatic policy towards the Taliban government. Despite the lack of formal recognition, it maintains full diplomatic relations at the ambassadorial level – indicating de facto recognition resulting from strategic and economic calculations. This pragmatic approach is driven by both security considerations – particularly those related to the situation in the Xinjiang region and countering extremism – and important economic interests. 

Chinese companies have already signed concession agreements with the Taliban government, including in the field of oil extraction (USD 540 million), and are also planning investments worth USD 10 billion in the lithium deposits sector. Work is underway to launch a copper mine in Mes Aynak – one of the largest unexploited deposits of this raw material in the world, managed by the Chinese company MCC. Beijing is also financing the construction of road infrastructure, including a route connecting Badakhshan province with Chinese Xinjiang via the Wakhan Corridor. These investments not only strengthen China's economic presence, but also aim to create a safe transport corridor, bypassing areas not controlled by the Taliban. 

From a security perspective, Beijing expects the Taliban to firmly curb the activities of Islamist groups that threaten China, especially the East Turkestan Islamic Movement (ETIM). Chinese authorities have consistently emphasized that Afghan territory cannot be used as a base of operations for separatist groups. 

China’s relations with Pakistan are strategic and long-term. Islamabad is considered by Beijing as an “iron friend for all seasons,” which is reflected in infrastructure, economic and military cooperation. Of fundamental importance is the expansion of CPEC, a flagship project of the Belt and Road Initiative (BRI), which provides China with land access to the Indian Ocean through the port of Gwadar. 

Beijing is pressuring Pakistan to step up protection of Chinese investments and personnel in the face of repeated terrorist attacks. The joint coordination of policies toward Afghanistan aims not only to limit the influence of armed groups but also to create effective trade routes and promote stability in the difficult border region. 

The Beijing meeting is part of China's broader strategy of building a regional security architecture independent of Western influence. The tightening of cooperation with Pakistan and Afghanistan can be interpreted as an attempt to form a "regional stabilization triangle" based on diplomacy, infrastructure investment and energy security. 

Extending CPEC to Afghanistan could transform the country into a regional trading hub , linking the Middle East, Central Asia, and Europe. While the project promises economic growth and stability, it has also drawn opposition—particularly from India—that has hindered broader regional integration and increased the risk of geopolitical polarisation. 

India has expressed strong opposition to the expansion of the China-Pakistan Economic Corridor into Afghanistan, viewing it as a violation of its sovereignty and a threat to its strategic interests in the region. The main sticking point is the fact that CPEC runs through the Pakistan-administered part of Kashmir, which India considers an integral part of its state. As such, any infrastructure projects in this area are considered illegal and unacceptable by New Delhi. 

Expanding CPEC also raises concerns in India about the strengthening of China and Pakistan in the region, which could undermine New Delhi’s strategic ambitions in Central Asia. India has invested heavily in developing the Chabahar port in Iran, which is expected to provide a key link in an alternative trade route to Afghanistan and beyond to Central Asia. Including Afghanistan in CPEC could limit the significance of this project and reduce India’s influence in the region. 

In addition, New Delhi is concerned that China's presence in Afghanistan could increase security threats, including the risk of Afghan territory being used by groups operating against India. New Delhi therefore appeals to the international community to heed these concerns and refrain from supporting projects which it believes have the potential to deepen instability and perpetuate geopolitical divisions. 

Although New Delhi does not formally recognise the Taliban government, it maintains pragmatic contacts with it – mainly concerning security and trade, motivated by strategic considerations and concern for its own interests in the region. According to unofficial media reports, in early May, during the escalation of Indian-Pakistani tensions after the Pahalgam attack, Mullah Muhammad Ibrahim Sadr, the Taliban's deputy interior minister for security, was supposed to be in the Indian capital. A few days later, on May 15, Foreign Minister Subrahmanyam Jaishankar had a telephone conversation with the acting head of Afghan diplomacy Amir Khan Muttaqi, thanking him for condemning the attack and distancing himself from the Pakistani narrative. Issues of economic, visa and transport cooperation were also raised, including the use of the Chabahar port bypassing Pakistani territory. 

In addition, despite the closed border crossings with Pakistan, India allowed 160 Afghan trucks carrying dried fruits to enter through the Wagah-Attari border. These actions indicate India's pragmatic approach, which is trying to secure its interests in Afghanistan and balance the influence of China and Pakistan in the region. 

Through simultaneous diplomatic engagement towards Pakistan and Afghanistan, China is consistently building a narrative of its own role as a mediator and guarantor of regional stability. Its infrastructure and economic investments are both a tool for building influence and a challenge to regional and supra-regional powers such as India and the United States. 

Beijing knows that its presence in Afghanistan and involvement in projects such as CPEC will be met with further criticism and resistance from many countries, notably over sovereignty issues and ethnic and religious tensions. But it’s clear “connector” strategy – between Central Asia, South Asia and the Middle East – points to China’s growing role as a regional leader. 

The meeting in Beijing is an important step towards building a trilateral format of cooperation that can bring stability, but also potentially contribute to new divisions in South Asia. The China-Pakistan-Afghan "triangle " shows that the geopolitics of this region is taking on a new dimension, combining economic interests with security challenges and great-power rivalry. The development of the situation will depend on the parties' further ability to compromise, which may prove to be particularly difficult due to the deep prejudices and distrust between Kabul and Islamabad, as well as the reactions of external actors, especially India and the US, which will not easily accept Beijing's growing influence.---INFA 

(Copyright, India News & Feature Alliance)

Round The World

New Delhi, 13 June 2025

The Ukraine War

NEW DELHI MUST REENGAGE

By Dr. D.K. Giri

(Prof of Practice, NIIS Group of Institutions) 

The rivalry with Pakistan leading to a limited 88-hour war has deflected India’s attention on the war in Ukraine. However, the tell-tale experience of the war should nudge India to reengage with Russia-Ukrainian war. It is so critical as the war with Pakistan has revealed the crux in India-European ties, so-called India-American growing friendship, India-Russia historical relations and India-China continued antagonism. One could surmise that India’s position and role (or lack of it) had a visible bearing on India-Pakistan war. 

The war in Ukraine is rapidly descending into a catastrophe for Europe and by implication, most of the world. The battle is now full-blown with no holds barred. Russia is hurling swarms of drones and missiles at Ukraine. This ceasefire has not happened despite Donald Trump’s tall claim that he was to bring it about in days after assuming the office for the second term. In fact, he was trying to seduce a tiger which had tasted blood with sweet talks. Vladimir Putin sized up Trump and realised that the latter had no gall to militarily back Ukraine. So, conversely, Putin intensified the war aiming at a total victory. He perhaps, thinks that Europe is no match for his military power or nuclear deterrence. Apparently, Ukraine is hitting back with calculated military plans like Operation Spiderweb. 

Kyiv is claiming to retaliate to bullet to bullet, drone to drone and has downed several Russian aircrafts. But the obvious reality on the ground is that Russia is inching forward and nibbling away territories and towns of Ukraine. Europe is not able to resist despite its full backing to Ukraine. NATO spending has increased. Germany has unblocked funds for military expenditure. European countries, mainly the border states like Sweden, Norway and Poland are undertaking massive preparations to face the expansion of war into their respective territories. Denmark Foreign Minister supposes that Putin will attack Europe in less than five years. Indeed, if unchecked, the Ukrainian war could spiral into entire Europe. 

The situation became worse for Europe after Trump returns to the White House. He told off Europe and asked them to prepare and pay for their own defence. He almost threw NATO under the buss. Left alone, Europe cannot match Russia’s nuclear power or military strength. The former is only a deterrent, but the tactical nuclear bombs could be used. Putin has already threatened that he could used them. Its non-use has been attributed to Prime Minister Modi who persuaded Putin against it. Militarily Russian army is 1.5 million strong. 

Where does India stand on Ukrainian war? It has been neutral since it started. New Delhi harped on diplomacy and dialogue to resolve the problem. This stance amounted to tacitly supporting Russia which is the invader and has been increasingly occupying Ukrainian land. New Delhi stuck to its policy of strategic autonomy and Vishwabandhu (friend of the world). India’s war with Pakistan has exposed the limitations of these approaches. If dialogue and diplomacy are the way to go, why is New Delhi open to dialogue with Pakistan? Prime Minister Modi has maintained that there can be no dialogue with Pakistan until terrorists are publicly disowned. After the recent war, Modi has added another pre-condition for dialogue, which is return of PoK to India. Apply the same approach to Ukraine. How can Ukraine dialogue with a country that is occupying its territory? The dialogue can start if the war stops or ceased. 

It is now obvious that Vladimir Putin did not invade Ukraine to prevent it from joining NATO. Zelenskyy will be more than willing to give up any desire of joining NATO if his country’s territorial integrity and security is respected by Russia. From the course of the war, it is not hard to realise that Putin wants complete subjugation of Ukraine. Will India still be sympathetic to Russia’s position and witness the forceful takeover of Ukraine? 

The fallout of India’s neutrality, strategic autonomy or multi-alignment could be seen in India-Pakistan war. No European country openly came in support of India. There is no quid pro quo in Pakistan and Ukraine. The game is not over in Ukraine, nor Asia Pacific, where India is facing an adversarial China-Pakistan axis. It is time India re-focussed on Ukraine, did the course-correction and revive partnership with Europe. As such, New Delhi is individually friendly with many European countries. 

As India and Europe go for the re-set of their bilateralism, let us deal with the elephant in the room, that is Russia – India’s historical security and defence ties with the country. But times have changed. Is Russia protecting India’s interest against China? Moscow and Beijing have a strong ‘eternal bond’. China is poking India off and on and now with its proxy state Pakistan. Russia has not deterred China against India. So is it not wise for India to negotiate with Europe and America who could ably support India to take on China? 

New Delhi should work with individual countries of Europe. In this new strategy, Poland is a case in point. It borders Russia, has been invaded and occupied by its former incarnation USSR. Warsaw has become a part of EU and NATO, has bilateral security ties individual countries like France. Warsaw has just decided to train every adult in warfare to raise its military strength to 500,000 personnel. India could team up with Poland in ending the Ukrainian war. If that happens, Poland could be more vocal and nudge other EU countries to back India against China. India and Poland have upgraded their ties to strategic partnership. Modi visited Poland last year and en route to Kyiv, 45 years after PM Morarji Desai had been there. 

It is time for India to seriously rethink its strategy vis-à-vis Ukraine. It may not take sides, but could pull all stops to stop the war. Trump is failing, which does not mean no one else can succeed. Prime Minister Modi could. He can bring about reconciliation between Russia and the West. That will be the safest bet for India. New Delhi can no longer remain aloof from Ukrainian war. The world security depends on the resolution of this continuing war in Europe. Let us remember that the security players in the world consist of America, Europe, Russia and China. How can India stay away from this security apparatus and isolate itself? ---INFA 

(Copyright, India News & Feature Alliance)

Round The World

New Delhi, 7 June 2025

China Weaponises Brahmaputra

NEW DELHI MUST REACT

By Dr. D.K. Giri

(Professor of Practice, NIIS Group of Institutions) 

China has apparently threatened to curtail the flow of Brahmaputra water to India. This is in retaliation to New Delhi suspending the Indus Water Treaty with Pakistan. It may be Islamabad’s bluff to garner international support against India’s recent military action. Whatever may be the provocation for Beijing to take this drastic action, New Delhi must give a strong reaction. In fact, China needs no excuse to work against the interest of India.

Beijing’s belligerence against New Delhi is no secret. It has been doing so ever since it acquired Tibet by hoodwinking Jawaharlal Nehru. Giving away Tibet conceded the advantage to China in geo-political and security terms. Tibet was created by the British Colonial administration as a buffer state between India and China. Nehru did not secure any reciprocal obligations for letting Tibet go to China. The river Brahmaputra originates from Tibet. However, Chinese threat on Brahmaputra may not inflict a fatal blow to India.

River water experts suggest that China controls at the most 30 per cent of Brahmaputra water and the rest 70 per cent or more is generated in India. The river grows after entering the Indian soil. The river is enriched by several tributaries and the water flowing down from Khasi, Garo and Jaintia Hills. The tributaries into Bramhaputra are Subansiri, Lohit, Kameng, Manas, Daansiri, and Jia Bharali China could not control the water discharged in India. However, the dam building on Brahmaputra river, storing the water and diverting it is a cause of concern.

Dams are built on the upper side of the river. So if the dam burst accidentally or is broken deliberately, India as a riparian state will suffer, the North Easten states will be submerged with heavy toll on life and property. The second probability is remote as China will not try to damage parts of India by flooding them unless both countries are at war. That should demystify the so-called Damocles sword hanging over India in Brahmaputra river.

The larger point is how has India got into this situation where it is being targeted by Pakistan and China and is kept afar by other countries. Even the United States which is perceived to be engaging India as a counterweight to China seems to have “unfriended” it. Only a few days before, the American Secretary of Trade, openly and rather undiplomatically told off India for being part of BRICS, i.e. at the behest of Beijing, is seeking to de-dollarise the world economy; and doing brisk business in the face of sanctions with the other member, Russia.

At the same time, it is worrying to realise that in the recent war with Pakistan, not a single country came out openly for India. Various arguments could be made about the current India’s foreign policy strategy. A good many observers thought that the recent war with Pakistan sounded a wake-up call to India. Again there were several interpretations of that call. I proffered my perspective in this column only last week. Let me expand on that formulation.

India is left alone in the international community for its faulty conception of world politics and thus the consequent struggle to find friends in need. That is that a multipolar world exists or can be constructed. That India can represent one pole, or can be a part of more than one pole. That India can lead the developing world. That New Delhi’s approach of strategic autonomy enables India to deal with any country at the same time— Ukraine and Russia, Israel and Iran, China and Taiwan and so on.

Some of us have debunked these formulations many times. It needs to be told and time again until the leadership heeds it in the interest of India. Thankfully, Prime Minister Modi has taken a correct position against Pakistan. He could do the same on China. But he seems to be bedevilled by the lack of committed international support against Beijing, also in the absence of correct inputs on China. It should have come from the Foreign Minister Jaishankar who served in China as India’s ambassador. Alas, Jaishankar has failed to click on China.

The present foreign policy strategy that is unmaintainable could be attributed to the External Affairs Minister. His combative, seminarian, self-righteous, almost narcissist style has failed to befriend countries. The Prime Minister with his personal warmth and charisma could get many a world leader to openly stand by India if he had a foreign minister who understood India’s critical security needs. If he did, Modi would not have sent delegations of MPs to explain Indian positions.

Modi made a profound statement on how to navigate international politics. He said, “the road to peace is paved by power”. This was in the context of Pakistan. But that could apply to all countries. Now here is where Modi is let down by his foreign minister. How does India deal with Pakistan and its friend China. When China-Pakistan alliance is established which mobilises support from other countries, who does India stand with. Or is it the case that India does not have allies and it plans to take on China and its friends or Pakistan with its friends.

Remember that someone who is every body’s friend is no body’s friend. Even in Mahabharata, both sides of the battle, both Kauravas and Pandavas went around making Allies. Both armies were invincible, yet they both actively sought partners. Even Lord Krishna offered Himself and his army to either party. Jaishankar has succeeded in making India friendless. Even the United States is perhaps reviving its patronage to Pakistan.

Last word in this piece is, if New Delhi focussed its foreign policy on countering China, things would have fallen in place. India has had a reactive China policy, it is time to revise it and have a pro-active China policy which puts Beijing on the defensive. It is not too late to make that dramatic and drastic shift in India’s China strategy.---INFA

(Copyright, India News & Feature Alliance)