Diplomacy

Four Big Foreign Policy Challenges that Modi Needs a Framework to Deal With

The last time we saw such an extensive shift in the global situation was probably between 1989 and 1992, when the Narasimha Rao government came to power and India adjusted her policies considerably.

As a follow-up to an earlier article I wrote for The Wire assessing the performance of Prime Minister Narendra Modi on the diplomatic front, I would like to explain why I think it necessary that there be a broader framework for the government’s foreign and national security policy and why I worry about India only continuing to do what she has done before.

The main reason I think India needs to articulate a framework for its foreign policy is because I see the external environment changing in rapid and fundamental ways. The last time we saw such an extensive shift in the global situation was probably between 1989 and 1992, when the Narasimha Rao government came to power and India adjusted her policies considerably. Today the global economic balance has already shifted, and local balances of power are shifting rapidly, even if the overall global military balance is still primarily in favour of the West.

The four most challenging changes that I see are:

The reordering of West Asia which has several dimensions. These include Iran’s rise and the prospect of a nuclear agreement with the United States, the rise, fall and return of the Muslim Brotherhood, the rise of the ‘Islamic State’ and its complex relationship with the West and Turkey, and so on. We see attempts by Turkey, Saudi Arabia and Iran to create a favourable geopolitical balance in the region, a balance of power that was destroyed by the Gulf Wars and domestic developments taking Iraq and now Syria and Egypt out of the equation. The struggle between these regional powers is being waged in their rimlands – in the Maghreb, the Levant, the Gulf and Yemen, with the active involvement of outside powers, and feeds into Afghanistan and Pakistan.

The geopolitical consolidation of Eurasia and its economic integration under Chinese auspices, which Russia is being driven by the West to participate in. The processes of this integration include the One-Belt-One-Road or Maritime Silk Route initiative, the connectivity of pipelines, fibre optic cables, roads and railways, new institutions like the Asian Infrastructure Investment Bank and the use of the RMB for payments and trade settlement, Pakistan’s integration into China’s economic space, the opening of the Arctic route for shipping, and so on.

Growing contention in the maritime and cyber domains, the two domains that are critical to our security, whether in the Indian Ocean, the South China Sea, Western Pacific, or in the littoral. The Chinese naval presence is now normal in the Western Pacific, since 2009, and in the Indian Ocean region, certainly since 2014, when their nuclear submarines paid three visits to the Indian Ocean; and, worryingly,

The diminishing attractiveness of India as a manufacturing base and investment destination (but not as a market). In the short term, the end of “quantitative easing” in the US, the rise of the dollar and Western interest rates, and the return of oil prices to levels between US $ 70-80 will contribute to this. In the longer term, we see China and the US concentrating on building their own economic blocs such as the Regional Comprehensive Economic Partnership (RCEP) and the Trans-Pacific Partnership (TPP) while simultaneously preparing to come to their own bilateral understandings. Structural changes in the advanced economies, and with a lag in China, will see them move into medical services, pharmaceuticals, services and other innovation based sectors, minimising the significance of labour in manufacturing and changing its nature. These changes make issues like intellectual property rights and market access in services increasingly critical to our relationships with those countries, issues that the government of India has found difficult to handle or resolve in the past. They will result in increasing pressure to open Indian markets and to limit domestic regulatory frameworks and protections, with limited foreign investment or willingness to integrate India into global manufacturing chains except to access the Indian market. Until foreign firms see Indian companies investing in India, they are unlikely to do so in any substantial measure.

How these challenges play out depends to a considerable extent upon how the relationship between the US and China evolves. The US seems schizophrenic about China’s rise and the challenge it poses to US preeminence. The US strategic community believes that China’s emergence as a peer competitor must be stopped or rolled back, and we will hear more such rhetoric as the US presidential campaign unfolds before November 2016. However, their economic and commercial inclination is to come to an accommodation with an economic superpower, China, with whose continued success their economic fortunes are tied. Given US history, the odds seem to me to be on the latter counsel prevailing in practice.

It is, of course, open to the Modi government to do what the Narasimha Rao government did in the face of fundamental changes in the international situation – to claim consistency with the past while undertaking basic changes in the practice of India’s policy. In other words, making fundamental shifts through stealth. Prime Minister Modi could choose to do this. So far, however, I do not see signs of either a new conception or any changes in the practice of our foreign policy.

Of course, one year is really far too short a time to come to definitive judgments. And the first year of every government is normally one of hope. Every Indian government since Rajiv Gandhi’s has claimed, with some reason, to have reinvigorated relations with the United States and reset relations with the neighbours. These are all worthy causes. And they seem likely to remain so.

Shivshankar Menon was India’s National Security Adviser from January 2010 to May 2014