GEO-POLITICAL ISSUES AFFECT GLOBAL TRADE, IN PARTICULAR ISSUES AFFECTING INDIA

Presented by:-Amish Narang(PGFA1615)Amisha Jain(PGFA1616)Apoorva Kumar SinghDevanshi TyagiDhruv Abhishek Singh

What is Geo-Politics?• Geo-Politics is the method of studying foreign

policy to understand, explain and predict international political behavior through geographical variables( Area studies, Climate, Natural resources, Demography, Topography and Applied science).

• This tells us that how human activities in a certain geographical location affects the world at large and in this presentation how it affects INDIA in Particular.

GEOPOLITICS IN RESPECT OF SEA ROUTE – INDIAN

OCEAN

INTRODUCTION TO INDIAN OCEAN

Only ocean named after a countryNamed on account of the dominant position of IndiaEarlier neglectedOne of the most important zones of Geopolitical activity after the second world war

WHAT MADE INDIAN OCEAN AN IMPORTANT ZONE?

Desire of US in collaboration with Britain to control sea lanesVital sea route between the West and the EastDirect and indirect involvement of western countriesShift in economic momentum from Europe and US to Asia PacificGrowing presence of China in Maritime Sea Route

WHY IS INDIAN OCEAN IMPORTANT FOR INDIA?

7,500KM coastline linking to Indian Ocean80% of India’s trade is through Sea route passes through Indian Ocean85% of oil and gas imported through Indian OceanFishing and Tourism dependent on itSecurity of countryVital for managing better relations with South-East Asian countriesIncreasing influence of China

GEOPOLITICAL RELATIONS OF INDIA WITH OTHER COUNTRIES

China and the maritime silk roadUS security provider in the Indian OceanChina - PAKISTANEuropean UnionSouth-East Asian CountriesMiddle east countries

CHINA

GEOPOLITICS IN RELATION TO OIL AND GAS

OPEC (The Organization of Petroleum Exporting Countries)

• OPEC, a consortium of 13 countries: Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela

• Opec created at the Baghdad Conference on September 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.

• More than 80% of the world's proven crude oil reserves are located in OPEC Member Countries• OPEC can affect the price of crude oil, by increasing

or reducing production among member countries.

MAIN PURPOSE & OBJECTIVE OF OPEC• THE MAIN PURPOSE OF OPEC IS TO COORDINATE AND UNIFY PETROLEUM POLICIES

AMONG MEMBER COUNTRIES TO ENSURE A STEADY INCOME TO THE PRODUCING COUNTRIES, A STEADY SUPPLY OF PETROLEUM TO THE CONSUMING NATIONS AS WELL AS A FAIR RETURN OF CAPITAL FOR INVESTORS IN THE PETROLEUM INDUSTRY ITSELF.

MAIN OBJECTIVES ARE • STABLE OIL MARKET, WITH REASONABLE PRICES AND STEADY SUPPLIES TO

CONSUMERS• OPEC WAS MADE TO MAKE SURE THAT THE PRICE OF THE OIL IN THE WORLD MARKET

WILL BE PROPERLY CONTROLLED. • THEIR MAIN GOAL IS TO PREVENT HARMFUL INCREASE IN PRICE OF OIL IN GLOBAL

MARKET AND MAKE SURE THAT NATIONS THAT PRODUCE OIL HAVE A FAIR PROFIT

Geo-Political factors that affected Oil and Gas Markets

• THE GULF WAR

• THE CASE OF TURKMENISTAN

• SAUDI ARABIA AND THE 2014-15 DROP IN OIL PRICES

THE GULF WAR• During the gulf war that began in 1990

WTI and Brent Crude oil prices doubled in the beginning of 1990

• It dropped 30% by end of that year.• US invaded Iraq in 2003 and during this

war brent crude oil rose by 7% and then declined by 12% by end of the war

• The geo political tensions led to supply disruptions, which increased global crude oil prices

• In The Gulf War supply dropped by 7%• In Iraq War the supply dropped by 3%• In 2013 middle east tension did not have

much impact on oil prices due to increased production in US

THE CASE OF TURKMENISTAN• Turkmenistan has very few choices of

transport routes, being it a land locked country.

• It contains several worlds largest gas fields

• Russia has monopoly power over its gas transmission

• Turkmen natural gas became a competitor with Gazprom, the Russian state monopoly

SAUDI ARABIA AND THE 2014-15 DROP IN OIL PRICES

• Energy prices started to fall downward in late 2014, when Saudi Oil began to flood energy markets

• This declined demand and the Iran nuclear deal

• The prices were cut half in less than a year, reaching lows that people have not seen since last global recession

IMPACTS OF GEO-POLITICS• Geo-Politics has contributed in the price fall• Geo-politics have controlled the economy of oil

producing countries• Strikes by Oil workers engaged at perceived

government corruption reduced Libyan oil production by 88% in 2013

• Oil and gas companies frequently engage with national and local governments. Thus, they are deeply affected by political changes.

DEFENCEMAJOR TRADING PARTNERS:

RUSSIA•  LEADING PARTNER FOR INDIA IN TERMS OF DEFENCE DEALS• DEFENCE TECHNOLOGY ACQUISITION, HYDROCARBONS, NUCLEAR

ENERGY AND SPACE COOPERATION• INDIA-US NUCLEAR DEAL• EXPECTED BILATERAL TRADE OF $30 BILLION BY 2025.• COASTAL DEFENCE SYSTEM.

ISRAEL• INDIA SIGNED THREE DEFENCE DEALS WORTH $3

BILLION WITH ISRAEL• A NEW MEDIUM RANGE SURFACE TO AIR MISSILES

(MRSAM) SYSTEM FOR THE INDIAN ARMY• ISRAEL IS ONE OF THE LARGEST ARMS SUPPLIERS TO

INDIA WITH ANNUAL SALES WORTH OVER $1 BILLION

USA• INDIA’S DEFENCE IMPORTS FROM THE US INCREASED TO $ 2

BILLION IN 2013• THE US BECAME THE TOP SUPPLIER OF DEFENCE COMPONENTS

AND MATERIALS TO THE INDIAN ARMED FORCES.• TRANS-PACIFIC PARTNERSHIP• BOTH THE COUNTRIES HAVE STARTED TO EXCHANGE NOTES ON

THEIR POLITICAL AND ECONOMIC SITUATIONS.

THANK YOU