What the Russia-Ukraine War means for Semiconductors
Dear Reader,
We hope you and your loved ones are well. This edition assesses how the Russia-Ukraine war has affected the semiconductor supply chain, examines the worsening relations between Afghanistan’s Taliban government and Pakistan, and highlights the implications of China’s increasing defence budget on India.
Semiconductors and the Russia-Ukraine War
The invasion of Ukraine by Russia has raised a lot of questions about the effect it might have on international technology supply chains. In our new research document, Arjun Gargeyas, Aditya Pareek and Pranay Kotasthane tackle how the Russia-Ukraine war has affected the semiconductor supply chain.
The involvement of Ukraine and Russia in providing/exporting crucial materials (such as Neon and Palladium) that remain integral to the seamless functioning of the entire industry has increased fears of a global chip production dip again. But how valid are these fears? The paper argues:
The existing dependencies on Russia and Ukraine are not critical, and redundancies or alternatives have been set in place for the efficient running of the global semiconductor industry for the time being.
The US’s sanctions, embargoes, and export controls will result in a chip import starvation to Russia. They will harm Russia’s nascent domestic semiconductor industry, especially sectors such as space, telecommunications, and the automotive industry.
Russia can look to exploit certain circumventing measures to continue chip supply due to Chinese chip imports being affected, with Chinese semiconductor firms under threat of secondary sanctions from the US government for any future exports to Russia.
What Next for Afghanistan-Pakistan Relations
After six months of its takeover, the Taliban has stabilised its interim government in Afghanistan. At the same time, the resurgence of TTP activity in Pakistan and growing tensions along the Durand Line are impacting Afghanistan-Pakistan relations. Shrey Khanna examines these tensions in a Takshashila issue paper.
What China’s Increasing Defence Budget Means for India
China announced its annual defence budget of RMB 1.45 trillion (approximately $229.6 billion) in March 2022, a 7.1 per cent year-on-year increase over its 2021 budget of RMB 1.36 trillion ($209.2 billion). In 2020, China had increased its defence budget by 6.6 per cent to 1.27 trillion yuan (US$178 billion).
In an article in Firstpost, Swayamsiddha Samal and Megha Pardhi analyse the implications of China’s increasing defence budget. They write:
The increased expenditure will likely translate into a larger gap between the Chinese and Indian military capabilities. Combined with China’s modernisation drive and emphasis on high-tech applications in the military, India has a significant gap to fill in terms of sheer hard power.
At around $70 billion, India’s military expenditure is very less compared to China’s, and given the difference in the size of economies, it is unlikely that India’s spending will catch up soon. To compensate for this gap, India needs to take a leaf from China’s playbook itself and focus on the modernisation of the military and explore technological solutions. Some progress on this front is visible on leadership level.
Run The Marathon to Transform India (And Your Career)
Applications for the May 2022 Graduate Certificate in Public Policy (GCPP) cohort are open. The GCPP is offered over 12 weeks and is the ideal introductory course to public policy and governance for working professionals. It will help you master the fundamentals of economics, policy evaluation, ethical reasoning, effective communication and public persuasion.
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The DFA stream will teach you how to analyse current international affairs by providing a solid foundation in international relations, strategic studies and economic analysis.
The TP stream is for those who wish to understand the political economy of technology. Participants will be equipped to navigate the rapidly evolving technology ecosystem to capitalise on the opportunities while managing the risks.Â
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The May cohort of GCPP begins on 7th May, and applications close on 30th April.
How Indians View the World
A few days before Russia’s invasion of Ukraine, we published the findings of India’s Global Outlook Survey 2022. As India attempts to walk a diplomatic tightrope by abstaining from voting on several UN resolutions condemning Russia’s actions, it is helpful to understand how India’s strategic affairs community, policymakers & the general population view the world and India’s role in it.
The survey does just that. It was conducted through online polling in English between August and October 2021. It consisted of 26 questions, some of which required the participants to rank choices in order of priority.
Prasanna Naidu, Shrey Khanna and Manoj Kewalramani created a video highlighting key findings from the report. Watch it now!
Indian Political Ads on Facebook
A 4-part investigative series by the Reporter’s Collective, Ad.watch and Al Jazeera pointed to the existence of surrogate advertisers and differential ad pricing for political ads on Facebook. In the 29th March episode of All Things Policy, Prateek Waghre and Sapni GK joined Rohan Seth to discuss the implications of this investigation, the knowledge gaps it highlights and potential areas for follow-up investigations.
What We Have Been Reading
This week’s book is Lenin’s Tomb by David Remnick. Reccomending it, Arjun Gargeyas said:
The current invasion of Ukraine by Russia has opened fissures dating back to the collapse of the Soviet Union in the early 1990s. Lenin's Tomb, is a stark example of how and why the Soviet model failed in the 20th century. It delves into the final years of the Soviet Union and has unique interviews and anecdotes about the socio-economic conditions at the time.
The book also focuses on how different Soviet states ultimately decided to declare independence and move on. It is definitely an intriguing read into understanding the actions of modern-day Russia and the misunderstandings that still exist in the region.
Get reading!
That’s it from us this week. Take care and stay safe!