Our weekly newsletter, analysing global stories from an Indian lens
In Focus
France & India Present an Alternate Global AI Vision
The Paris AI Summit, co-hosted by President Macron and PM Modi on February 10, framed AI as a tool for collective progress- in contrast to the European approach of heavy regulation. Both leaders sounded optimistic about the future of job markets, advocating for public interest AI and investing in skilling and re-skilling initiatives.
With their shared vision of strategic autonomy, both France and India projected themselves as potential independent players in the AI race, moving beyond the role of bystanders and mere consumers of Chinese and American tech. Modi's call for “open source” and “free from biases” models implicitly references concerns about the proprietary nature and potential biases of some American and Chinese AI systems. The IndiaAI Mission is actively developing a domestic large language model, incorporating vast literature of India's many regional languages.
The U.S. and UK reportedly refrained from signing the Paris AI Summit declaration over use of language on the need to build “inclusive” and “sustainable” AI. Both Delhi and Paris, however, emphasize powering AI sustainably, with Macron responding to Trump’s “drill, baby, drill” with France’s commitment to “plug, baby, plug.” Nuclear power was critical in Modi’s agenda during his visit, and India has pledged funds and policy changes to embrace nuclear energy in a big way.
With India keen on expanding its strategic footprint in the Mediterranean, Modi also visited Marseilles. The Mediterranean is key to India’s connectivity goals through the India-Middle East-Europe Corridor. In recent years, India has also forged closer ties with Egypt and Greece in the Eastern Mediterranean.
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MIGA+MAGA: Modi and Trump Aim to Pick Up Where They Left Off
After France, Prime Minister Modi headed to Washington D.C. to meet his “friend” President Trump. Modi became only the fourth foreign leader hosted at the White House since Trump's second inauguration, signalling the priority both nations place on this partnership and the warm personal relationship both leaders share.
Modi and Trump covered a lot of ground, restoring trust in the relationship under their newly launched umbrella initiative, COMPACT (Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology).
Overall, a major win for India was the U.S. finally agreeing to extradite Tahawwur Rana, a key orchestrator of the 2008 Mumbai terror attacks, coupled with a commitment to decisively counter groups threatening India's territorial integrity - a clear reference to diaspora Khalistani elements. Both nations will now streamline arms transfer regulations, facilitating India's access to advanced U.S. technology. The U.S. will design nuclear reactors in India through significant localization and technology transfer. While teams are poised to negotiate the initial phase of a multi-sector trade agreement by fall, the U.S. has secured commitments regarding enhanced market access, increased energy procurement, and joint efforts to curb illegal immigration from India. The Autonomous Systems Industry Alliance is set to spur industry production and partnerships throughout the Indo-Pacific theater.
Major Shift in US Policy on Ukraine
President Trump’s call with President Putin to discuss peace negotiations with Ukraine marks a shift from Biden’s "nothing about Ukraine without Ukraine" policy. Germany, France, the UK, Italy, and Spain, in a joint statement, have reiterated the need to uphold Ukrainian sovereignty in these talks.
This shift appears to vindicate India's long-held position on the conflict. From the outset of the crisis, India has consistently resisted pressure to isolate Russia, urging both parties to prioritize peaceful negotiations. India's cautious approach, guided by core national interests, faced criticism from Western quarters advocating for a more assertive condemnation of Russia, asking India to stop "funding" Russia's war.
For India—the largest buyer of discounted Russian seaborne oil post western-sanctions —this has direct implications for oil prices. A 1% drop in oil prices on February 13, offsetting prior increases from U.S. sanctions, could boost domestic profit margins. With India’s import dependency for crude oil at 88% and refined petroleum exports reaching USD 47.7 billion in 2023-24, lower Russian oil prices may improve its export-to-import ratio in this category and increase government revenues.
RBI Intervention against Weakening Rupee
The Reserve Bank of India (RBI) has been actively selling large amounts of dollars this week, potentially between USD 4 billion and USD 7 billion, to stabilize the rupee amid portfolio outflows and global uncertainties like U.S. trade tariffs. The rupee rose to 86.69, up 0.7% from its previous close of 87.4750. This aggressive intervention indicates a concerted effort to prevent the rupee from weakening further, suggesting a proactive monetary policy stance. It also increases investor confidence in the rupee, reducing panic-driven outflows from Indian markets.
Trump’s Gaza Takeover Plan & India’s Delicate Balancing Act
With details on President Trump’s vision of a “long-term ownership position” of the Gaza Strip “riviera” unclear, and with Arab leaders coordinating a plan to rebuild Gaza without moving Gaza’s residents elsewhere, India has only said its “long standing” position on the question of Palestine has not changed. India continues to carefully balance its many, often contradictory interests in its extended neighbourhood: deepening its multilayered ties with the U.S., Israel, UAE, KSA, while also strengthening its development-focused pitch for leadership of the Global South as an alternative to China.
