Leaving aside the bloviating at the World Economic Forum in Davos, the event often does at least reflect what’s going on in the world of politics and markets.
This year's edition was particularly interesting given Russia’s invasion of Ukraine, rising interest rates, and, of course, the ongoing COVID-19 pandemic. This year's buzzword seemed to be 'deglobalization,' a mild surprise given this trend has been underway since at least 2016 when Donald Trump was elected U.S. president and the U.K. voted for Brexit.
I'd argue this is less deglobalization than it is a realignment. Technology, culture, sports, transportation and more make globalization irrevocable. But alliances and priorities are shifting, accelerated by Russia’s ill-fated foray into Ukraine and Chinese policies on (not) protecting intellectual property, cyber-security, and its handling of the pandemic.
This all makes Russia certainly — and to some degree China — no longer crowd favorites on the world stage. Not surprisingly, both countries had zero and very limited presence, respectively, in Davos this year, with Russians banned because of sanctions while the Chinese were hindered because of onerous quarantine protocols.
India has had a strong presence at Davos for decades, with CEOs and senior government officials making the pilgrimage to this small Swiss mountain town. And while Prime Minister Narendra Modi didn’t attend, half a dozen senior offices did along with “at least 100 Indian CEOs,” according to the Business Standard.
During the World Economic Forum, most of the stores in Davos are converted into mini-promotion centers by giant companies like Google, Meta, and Cisco, or countries, including Indonesia, Poland, and Namibia, among others. India, though, made the biggest splash this year.
Indian companies like Wipro, Infosys, HCL and others were present on the Promenade in Davos, as well as Indian states. I counted six out of India’s 28 states — Telangana, Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Madhya Pradesh, plus the central government — taking over local shops.
(Sidenote: The most talked about storefront was "The Russia War Crimes House," — which showed scenes of war atrocities — in what was the Russia House in previous years.)
But back to India. Given the paucity of Russian and Chinese attendees — and with some 10% fewer Americans too — perhaps this presence was just a matter of India maintaining a strong showing while others dialed back. Some insiders, however, thought there was more to it.
“I think it’s a bit more than that,” a leading global Indian business leader told me inside the Congress Centre.
“India senses correctly, I believe, that there is an opportunity to enhance its presence, not just as a domestic market story, but as part of the global supply chain. They see the world worried about China and they are saying we can fill the gap. China has overshadowed India, but maybe not so much going forward.”
Indian media covers the action at Davos intensely — the Business Standard publishes a calendar of Indian events, for instance — and sometimes a trifle chauvinistically. “This year may well be the “India Everywhere” moment again," read the Economic Times. “Not only is India part of the global conversation, especially given its willingness to engage in pressing challenges to the world, India’s participation may be the third largest at the World Economic Forum’s annual meeting in Davos.”
And this from the Hindu Times: “The Indian contingent at this Swiss ski resort town is brimming with confidence when it comes to share their story of fighting the COVID-19 pandemic and attracting more investments…”
Dr. Nirvikar Singh, co-director of the Center for Analytical Finance at UCSC, offered this view: “This is part of an overall strategy of projecting the accomplishments of the Indian government and part of a strategy of attracting foreign investment,” he says.
“This is the proverbial full court press.”
Then there’s India’s troublesome relationship with Russia. Troublesome because India hasn’t condemned Russia’s invasion of Ukraine or imposed sanctions, raising the ire of the U.S. and Europe. Indians will tell you that it’s easy for Western powers to complain, but that Russia and India have longstanding ties.
India grew close to Russia for a number of reasons. For one, as a counter to China which shares a sometimes uneasy border with India, and for another because of the U.S. military’s support of arch-rival Pakistan.
Not surprisingly, then, Russia has been the primary supplier of military hardware to the Indian armed forces, which, given Russia’s track record in Ukraine, doesn’t look so smart. But India had been looking to wean itself from the Russian war machine (such as it is), even before the Ukraine invasion. The Wall Street Journal reports that “India’s reliance on Russian arms has been declining—down from 69% of Indian arms purchases in 2012-16 to 46% in 2017-21.”
Some also point to Indian purchases of Russian oil as another contributing factor, but that may be a red herring as the Journal also reports that though India has doubled its imports of Russian oil this year, it “still isn’t among the top 10 importers of Russian energy.”
“The Russian invasion of Ukraine has put India in a position where it has had to choose between condemning Russia, and protecting the partnership with the US,” says Dr. Ashley J. Tellis, a senior fellow at the Carnegie Endowment for International Peace.
“Privately [Indians] express a good deal of dismay about the invasion, while continuing to build a relationship with us, and encouraging us to understand their constraints as to why they can't cross swords with the Russians openly. There has been a challenge for India to manage both these relationships simultaneously, but thus far, it seems to have pulled it off.”
That’s complicated stuff, but not enough to deter the scores of Indians working the rooms in Davos.
“Indians sell hard,” notes the Indian business executive.
The Chinese, sitting at home in Beijing, should take note.
This article was featured in a Saturday edition of the Morning Brief on May 28, 2022. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe
Follow Andy Serwer, editor-in-chief of Yahoo Finance, on Twitter: @serwer