India becomes target of low level hybrid warfare

India’s move to pursue economic and energy security independence away from the US dollar zone has made the country a target for destabilisation efforts by invisible adversaries.

The move away from the dollar zone has been in the making since Russian President Vladimir Putin’s India visit in December 2014. The negotiations were finally concluded and secretly finalised after Prime Minister Narendra Modi’s visit to Moscow in late December last year. Modi’s visit expanded bilateral currency trade to both oil and natural gas that Russia has agreed to supply India on a long-term basis.
India becomes target of low level hybrid warfare-1On February 24 this year India’s ambassador Pankaj Saran to the Russian republic confirmed the arrangement for settlement of bilateral trade in their respective national currencies, a virtual resurrection of the defunct rupee-ruble trade pursued till the collapse of the Soviet Union. Ambassador Saran in an interview to Novosti said, “Transition to mutual settlements in national currencies of the BRICS looks promising. Russian and Indian companies are interested in using national currencies in trade settlements.”

The Russian offer is for supply of 10 million tonnes of crude oil per year or 200,000 barrels per day to India. This is only for a single refinery owned by the Essar group Vadinar, Gujarat. But the public sector petroleum companies are also expected to increase oil imports from Russia on similar or finer terms.India presently imports about four million barrels per day. Along with oil India also needs gas, estimated at 713 million standard cubic metres per day.

Modi’s successful economic diplomacy had its repercussions.

On January 2, 2016, the Pathankot terrorist strikes began, where Indian defence forces suffered five casualties. Even as the dust on Pathankot terrorist strike events settled, a suicide by Rohit Chakravarthy Vemula on January 17, a student of Hyderabad University, sparked nationwide protests in campuses across the country. This, in turn, was followed by further campus unrest, in Delhi’s prestigious Jawaharlal Nehru University where a cultural event on February 11 led to some miscreant shouting slogans in support of terrorists and criminals leading to the arrest of the organisers. Even as this unrest was being resolved violent protests from Jat farmers in Rohtak broke out on February 16, leading to extreme violence and loss of life.

Coincidence or is India being subjected to a low intensity hybrid war for moving away from the dollar zone? Hybrid warfare rarely involves usage of conventional warfare techniques, instead employs asymmetrical conflicts (terrorism and criminalisation), mass mobilisation, cyber tools and extensive use of communication technologies for disinformation and mass mobilisation, including mass media against potential adversaries. Andrew Korybko, Washington-based researcher defines Hybrid warfare as any type of nonconventional (non-official military) force engaged in largely asymmetrical combat against a traditional adversary. Taken together in a two-pronged approach, Color Revolutions and Unconventional Warfare represent the two components that form the theory of Hybrid War.

The Pathankot terrorist strike along with unrest in the campuses and the Rohtak Jat protest, therefore have the clear making of low intensity hybrid war. Although this is not the first terrorist strike, this is first time that a clear pattern is emerging with all the similarities of Hybrid warfare. For mobilisation the protests of social media, (Twitter, Facebook and Google Maps) and mass media was extensively utilised for disinformation on casualties. Writing in the online news portal, globaresearch.ca, Korybko, says, “The grand objective behind every Hybrid War is to disrupt multipolar transnational connective projects through externally provoked identity conflicts (ethnic, religious, regional, political, etc.) within a targeted transit state.”

Although the events were unrelated, they appear to be clearly sequenced to bring pressure on the government. The timing of the sequence appears after the prime minister’s return from Moscow, with all the indications that the country is being subjected to low intensity hybrid warfare.

But is India really a target for this kind of warfare? In 1974, a report commissioned by the then secretary of state, Henry Kissinger, titled Implication of Worldwide Population Growth on US Security clearly identifies India as one of the potential threats to US interests due to its large population increases and recommends population moderation. The study warned that under pressure from expanding domestic populations, countries with essential raw materials will tend to demand higher prices and better terms of trade for their exports to the United States. The study, declassified by the White House recently raises the question: “How much more efficient expenditures for population control might be than (would be funds for) raising production through direct investments in additional irrigation and power projects and factories.” This implied pursuit of population reduction or population moderation in places of US strategic interest to ensure that the terms of trade remain favourable to the US.

Undermining national currencies

India’s defiance of US trade sanctions on Iran on petroleum imports imposed in 2011 and the recent sanctions imposed on Russia, also in pursuit of independent economic security, is also seen as a threat. In fact, it was during the tenure of sanctions on Russia that Modi had opted to visit Russia to sign bilateral currency denominated energy supply agreements and multi-billion dollar weapons purchase agreements.
Presently all energy trade is US dollar invoiced. That means a global demand for dollars, translating to the rest of the world keeping foreign currency reserves to fund their energy imports. The single beneficiary of the dollar demandis the U S nation itself that is in a position to run large fiscal deficits with little inflationary effects. The US a fiscal deficit of nearly 11 per cent of its Gross Domestic Product. For countries like India that figure is barely 3.5 per cent. Normally, large- scale resort to deficit financing translates to inflation, too much money chasing too few goods and services.”

Adverse terms of trade

For other countries importing oil, dollar invoicing does not necessarily bestow benefits. It means importers have to earn dollars or reliance on western markets and possibility of adverse terms of trade. However, it also implies that both dollar value changes against domestic currency and oil price volatility lead to inflation. So if oil prices go up, the dollar demand rises, destabilising importing countries’ economies as they are driven to larger borrowing from global capital markets. Even the reverse situation leads to destabilisation. Moreover, oil price denomination in dollars also means, that countries are vulnerable to economic warfare or sanctions. Iraq realised this in 2003 and attempted to shift to euros. The attempts to change currency resulted in regime change and killing of Saddam Hussian. The script was identical in the case of Libya in 2011.

A shift out of the dollar zone, however, does not just imply freedom from only sanctions. It also means the inflation and economic instability returns to the host country.

It is, therefore, hardly a coincidence that countries that have attempted to move away from the dollar denomination of exports have faced instability, regime changes and even colour revolutions.

Ashton Carter visit

Consequently, the shift away from the dollar zone and the timing these economic interchanges between India, Iran and Russia have clearly not gone well with the American establishments. US defence secretary Ashton Carter is due to visit India in April. Informed officials said that they expected the defence secretary to convey the U S establishment’s displeasure over India’s close relations with Russia, China and Iran all identified as potential adversaries.

That the economic engagements with Iran, Russia and China have not gone down well was apparent from the speculative attackson currencies of Russia, China and India. In just nine months, the rupee has shed about 10 per cent of its value on the back of capital flight. The Yuan has shed 5.2 per cent since March last year and the Ruble by 22 per cent.

For countries like India the currency depreciation has taken place despite the fact the reduced international petroleum prices could actually contribute to reduction in the international energy bills. The reduced bills, in turn, means narrow deficit on the current account (merchandise trade plus invisibles). This means that India’s import bills would be low whereas its export earnings coverage of imports would be high or favourable terms of trade. Ideally, this situation means that India’s currency should have appreciated against the dollar. Yet despite the favourable impact on the current account foreign institutional funds had opted to flee from the domestic capital markets. But then speculative currency attacks are also another form of hybrid warfare.

Although India has no interest in pursuing this kind of conflict for which it is ill prepared, the Modi government has little choice. Kargil was the Vajpayee government-led NDA government challenge. For the Modi-led BJP government it is hybrid warfare where the adversary wears the mask of a friend.


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