India’s Prime Minister Narendra Modi and China’s President Xi Jinping experienced very contrasting fortunes last week.
After U.S. forces shot down an alleged Chinese spy balloon over the Atlantic, Xi continued to grapple with the fallout from the incident. Washington and its allies increased scrutiny on Beijing’s evolving surveillance strategy. U.S. President Joe Biden spoke in strong words about countering unidentified objects in U.S. airspace and made “no apologies for taking down that balloon.” Japan followed that up with anger over balloons wandering in its own airspace and called them unacceptable.
The episode evidently left Xi looking somewhat muddled. For months, as the Chinese economy was limping out of prolonged COVID-19 restrictions, Beijing had been trying to manufacture a thaw with Washington, culminating in a trip to China by U.S. Secretary of State Antony Blinken. The balloon fiasco jeopardized that progress and left analysts wondering if Xi had been sabotaged by his own people.
In the meantime, things could not have been more different across the border. Last week, India hosted a wildly successful aviation and defense exhibition that helped take the spotlight away from the sundry controversies plaguing the Modi government.
Attended by some 800 firms from around the world, the Aero India 2023 show in Bengaluru somewhat shifted the center of gravity of the global aviation market, even if only for a week. Hundreds of deals reportedly worth $10 billion were signed as world leaders toasted India.
The star of the show was undoubtedly Air India – the previously debt-laden, beleaguered state-owned national airline that was recently sold to the storied Tata Group. In a spate of history-breaking deals, Air India bought a record number of aircraft from manufacturers Airbus and Boeing – nearly 500 of them – as it sought to revive its operations.
The deals drew praise from far and wide for their expected economic impact. “This purchase will support over one million American jobs across 44 states,” Biden said. It will create an additional 450 manufacturing jobs in the U.K., said his British counterpart, Prime Minister Rishi Sunak. In a separate call with Modi amidst the deal-making, France’s President Emmanuel Macron hailed “new areas of cooperation with India.”
It made sense that the West was excited by the deals. In the wake of unending troubles with China, Europe and the U.S. have been yearning for India to step up to the plate economically.
Aviation is as good a place as any to start. Driven by a burgeoning young population and a proliferation of low-cost carriers, India has now become the third-largest domestic market in the world, according to India’s national investment promotion agency. It’s also the fastest growing market in the world, estimated by the government to grow to over $4 billion by 2025.
The military front is no less significant. Driven by great power aspirations and the threat from China, the Modi government ramped up defense spending quite significantly for 2023-2024 – up by 13 percent from the previous period’s initial estimates. About $7 billion of that sum is expected to be spent on air force procurements, including new aircraft.
Modi has also been trying to court foreign buyers for India’s indigenously-built fighter aircraft and ambitiously declared that he wants to triple annual defense exports to $5 billion over the next couple of years.
All this size and scale affords India significant market power as an arms importer, something that was evident at the Bengaluru aviation show last week. The exhibition was dominated by a performative outreach from Washington, which sent one of its largest delegations ever and flew in the coveted F-35 fighter jet – long sold only to America’s closest strategic allies.
But that did not deter India from also hosting marquee Russian aircraft and mulling joint development of Sukhoi jets with Moscow. In the run-up to the Aero India show, Russian state media claimed that India had bought some $13 billion worth of arms from Moscow in the last five years, making New Delhi the biggest client for Russian supplies.
Many in the West expect India to wean itself off Russian arms in the years to come, in favor of a partnership with the U.S. and its allies. Yet, India remains steadfastly dedicated to its non-alignment stance on most matters of importance to Washington, from Ukraine to Taiwan, North Korea, and beyond. And if there was one thing evident in Bengaluru last week, it was that for the sheer size of its own market and China’s belligerence, India is unlikely to be swayed one way or the other by fancy business deals.