In Year Four, Modi’s Foreign Policy Needs Some Course Correction

The overall strategy underlying Modi’s foreign policy is sound. The challenge going forward must take into account the changed global geopolitical terrain.

Prime Minister Narendra Modi. Credit: Reuters/Rick Stevens/Files

Prime Minister Narendra Modi. Credit: Reuters/Rick Stevens/Files

We are at the threshold of Year Four of Prime Minister Narendra Modi’s reign and it is a measure of the unpredictability and rapidly shifting nature of international political and economic currents that the foreign policy outlook for India at this juncture looks decidedly different from the heady days of his first year in power.

Modi’s initial moves as prime minister, including successful visits to South Asian capitals, suggested that India at last had a leader for whom Neighbourhood First was not mere rhetoric but a strategic imperative. In reaching out to the large Indian diaspora, spread across the globe, Modi created an influential global constituency of support for India, though at time with a partisan flavour. Recall his early and successful forging of a stronger strategic partnership with the US, the promising outreach to Pakistan and the strong expectation that as two strong, self-assured and confident leaders, Modi and Chinese President Xi Jinping may at last be able to cut the Gordian knot of the long-standing boundary issue and launch their relationship into a more cooperative orbit. Under Modi, ‘Look East’ became the more energetic sounding ‘Act East’ and new vigour was infused into India-Japan relations. A much more intense engagement with the Gulf and West Asia reflected the critical importance of the country’s western flank as a key source of energy, as home to several million Indians and as a sectarian minefield whose toxic waves could wash over the delicate balance of India’s plural society.

As a charismatic leader, fascinated by the leap-frogging possibilities offered by technological advancement and publicly and unabashedly committed to economic reform and promoting the ease of doing business, Modi was successful in projecting India as the next big economic opportunity after China. If there were worries over rising sectarian and communal tensions within India and the contradictory pursuit by the political dispensation of modernity in parallel with obscurantist revivalism, these were muted, both in India and abroad, in deference to a pervasive sentiment that , under Modi, India at last had an opportunity – and an opportunity that may not come again – of finally realising its immense potential.

Many saw his acquiescence to these negative developments as tactical, necessary for political consolidation, but that the Modi agenda still focused on the strategic transformation of India into a front-ranking and thoroughly modern state.

At the end of three years, India finds itself in a far more complex and challenging external environment but conversely, the prime minister has consolidated the political power of the ruling party and his own personal authority, particularly after the BJP’s resounding success in the Uttar Pradesh assembly polls. In theory, political consolidation at home should enable Modi to deal with external challenges more effectively. But for this to happen, there should be a careful review of how far India’s existing foreign policy is aligned to a significantly altered regional and international political, security and economic terrain and undertake course correction as necessary. In doing so, it is important to confront developments adverse to India’s interests but also to recognise that the very fluidity in international affairs also offers opportunities to advance our interests.

Neighbourhood First, or not quite

Neighbourhood First – attaching the highest priority to relations with our neighbours in the sub-continent – is a self-evident proposition. It is by ensuring a politically stable and economically prosperous periphery that India can play a larger regional and global role. Modi’s invitation to South Asian heads of state/government, including Pakistan’s Nawaz Sharif, and his early visits to Thimphu, Kathmandu, Dhaka, Colombo and Kabul, succeeded in creating an unprecedentedly positive perception of India in the neighbourhood. A new momentum was imparted to regional connectivity projects, the promotion of regional trade and investment and in improving cross-border infrastructure. In some respects, progress has been achieved, for example, in the context of Bangladesh, Bhutan, India and Nepal (BBIN) sub-regional cooperation. But such progress does not match the expectations generated by the early moves of this government. The reason is the lack of structural changes which alone can put substance into the Neighbourhood First strategy.

India’s engagement with its neighbours continues to be episodic, driven by events such as high level visits or by political crises which erupt in one country or another. We have not created the capacity to engage with our neighbours on a sustained basis and at multiple levels. The Ministry of External Affairs needs expanded capacity in terms of diplomats and staff and of financial resources to translate the priority accorded to our neighbours into action on the ground. The failure to deliver, on time, the commitments made to neighbouring countries erodes India’s credibility – and credibility is one of the most important components of a successful foreign policy. There has been a longstanding proposal to set up an empowered development agency, under the leadership of the MEA, to ensure the expeditious implementation of projects committed to foreign countries. One hopes that in his fourth year, Modi will address these critical systemic weaknesses so that we do not create spaces in our neighbourhood which other more agile powers move in to fill.

The Pakistan challenge

Prime Minister Narendra Modi is greeted at the residence of his Pakistani counterpart Nawaz at Raiwind in Lahore on December 25, 2015. Credit: PTI

Successive prime ministers have recognised that India’s neighbourhood policy will remain sub-optimal as long as India-Pakistan relations remain confrontational. Every Indian leader has expended political capital in trying to bring about relative normalcy in state to state relations with Pakistan, even if contentious issues like Kashmir remain unresolved. There have been phases when relative normalcy has prevailed, for example, in the immediate aftermath of the Simla Agreement of 1971 and more recently, during the 2003-2007 period, when a plausible though limited, understanding on the Kashmir issue seemed within grasp. Modi also expended considerable political capital in trying to improve relations with Pakistan but perhaps his high profile visit to Lahore in December 2015 may have alarmed elements in Pakistan who have a vested interest in sustaining India-Pakistan hostility. There is no doubt that Pakistani hostility must be confronted and costs must be imposed on Islamabad for its continued use of cross-border terrorism as an instrument of state policy. However, if there is a decision to escalate military operations, there should also be a plan on how to handle the fallout from such escalation. For Pakistan, escalation helps in reinforcing its narrative that India-Pakistan relations are at an impasse and that there is danger of outright hostilities, including escalation to a nuclear exchange, unless there is international intervention. Even if we reject such intervention, we will be on the defensive internationally. We would have allowed an India-Pakistan hyphenation to re-emerge after having successfully buried it in the last decade.

There is insufficient recognition in this government, despite years of experience to the contrary, that dealing effectively with Pakistani hostility, cannot be de-linked from peace in the Kashmir Valley.

The use of military might may succeed in temporarily subduing the resentment and anger among the people of the Valley but not in dispelling such destructive sentiments. In my several visits to Kashmir, I found the Indian Army held in respect even by its detractors and in recent years it had taken welcome steps to prevent human rights violations by its personnel. The Army has now lost this hard earned respect by the one incident of its using a human shield to prevent stone pelting by an angry mob. Has this not undermined the image of India as a democratic country, as a country which respects the rule of law, whose armed forces enjoy the highest repute as a professional force ? The situation in Kashmir can only be stabilised through political dialogue. We do not want a return to a situation when around the world Indian diplomats had to constantly deal with a narrative of Kashmiri disaffection rather than focus on advancing India’s much broader foreign policy agenda.

The China challenge

Since 2003, when Atal Bihari Vajpayee paid a landmark visit to Beijing as prime minister, India and China have successfully maintained their relations on an even keel despite there being contentious issues such as the unresolved border issue, the political and military support extended by China to Pakistan and the sensitive issue of Tibet. There was a consensus between the two countries that both India and China were large emerging economies and had convergent interests in adjusting and shaping the world order to safeguard their interests. Being large and dynamic economies, each was an economic opportunity for the other and therefore, India welcomed the rise of China as China did of India. Furthermore, India and China were large and independent countries; neither could contain the other nor could they be contained by any other power. India-China relations were not only important bilaterally but had acquired a strategic dimension. The two sides agreed to resolve the border issue between them expeditiously, so that the decks could be cleared for them to work on larger convergent interests. In fact, India and China did work closely together in the WTO and in the multilateral climate change negotiations leading up to the Copenhagen summit in 2009.

China's President Xi Jinping (R) walks with Prime Minister Narendra Modi (2nd L). Credit: Reuters/Amit Dave/Files

China’s President Xi Jinping (R) walks with Prime Minister Narendra Modi (2nd L). Credit: Reuters/Amit Dave/Files

This erstwhile consensus no longer holds and India needs to review its China policy. The change has come about mostly because of a change in Chinese perceptions, particularly since Xi has come to power. First, there is now a constant Chinese refrain, articulated openly at track-2 interactions, that China now has a GDP five times that of India and, therefore, India needs to adjust to this change in the “co-relation of forces.” Secondly, the most important relationship for China is its “great power relationship” with the US, the world’s pre-eminent power; relations with other major powers are now of secondary importance. For example, in contrast to working together with India, Brazil and South Africa (the BASIC countries) to negotiate the Copenhagen accord with the US, Beijing made a deal with Washington on climate change before the Paris climate conference, which became the template for the subsequent Paris climate agreement concluded in December 2015. In shaping the emerging international order, China sees its interests better served through understandings reached with the US rather than having to work together with other emerging economies. In the Indian sub-continent and the Indian Ocean region, China now seeks pre-eminence rather than mere presence with the result that there is a sharper competition with India in these regions.

Thirdly, China sees an opportunity for itself to eventually replace the US as an uncontested hegemonic power – first in Asia and then the world. It considers this necessary to safeguard its expanding economic assets across the globe and to be able to veto any decision by any other power which, in its own perception, is inimical to China’s interests. The old refrain that the world should move towards multi-polarity has been given up. The Belt Road Initiative (BRI) is a manifestation of these changed perceptions. It has economic drivers, but within a carefully crafted geopolitical frame. For India, as for several other major powers, the question is whether to sign up to this Chinese project on the assumption that there is no alternative to a Chinese dominated world order or to resist it. Some countries which are fearful of what this future order will mean for them, nevertheless wish to hedge, just in case. They decided to present themselves at the recent Belt and Road Forum in Beijing. India did not. One should support the determination of the Modi government to reject the notion that a Chinese dominated world order is an inevitability. However, India needs to develop an alternative narrative on why a multipolar order is a more stable and in fact indispensable to meeting current and global challenges which require collaborative responses rather than measures coerced by a hegemonic system.

India should continue to strengthen a countervailing coalition of countries that share its concern over a Chinese dominated order but it will have to be alive to the possibility of the members of this coalition making tactical compromises with China, as is already evident in the BRI case. This is not to suggest that India must confront China across the board. There are areas of convergence which should bring the countries together – economic and commercial cooperation being one such area. There may be opportunities to work together in institutions such as the Shanghai Cooperation Organisation, the Asia Infrastructure Investment Bank and the BRICS Development Bank. There may be a shared interest in stabilising Afghanistan and in confronting international terrorism even if Pakistan is kept out of the cross-hairs. These will be helpful in keeping India-China relations on an even keel even though the overall consensus of the last decade underlying the relationship has changed and this must be recognised.

The US and Europe

As indicated earlier, the Modi government has invested heavily in building a stronger strategic partnership with the US. This was based on the assumption that even with its geopolitical pre-dominance diminished, the US remained a formidable military power and an unmatched source of technological innovation and excellence. It shared India’s interest in preventing a China-dominated Asia and the world. It would, therefore, be an indispensable partner in India’s trajectory towards great power status. The Trump presidency has created uncertainty with respect to the US role in Asia and the world. Trump’s preoccupations at home mean that the US will be less engaged with regional and global issues and this hands an advantage to China. India will have to accept that this adds another layer of complexity in dealing with the China challenge and in navigating an even more treacherous international landscape. However, the strengths of the US are likely to be enduring and India should not dilute the relationship because of immediate concerns such as the issue of visas to our IT professionals.

Europe continues to fragment and it is unlikely that it would re-emerge as a relatively cohesive and powerful independent pole in international affairs. China continues to be a priority country for Europe because of economic factors and India is not fully on the radar screen in European capitals. Nevertheless, like the US, Europe continues to be an important source of capital and technology which India needs for its own development. Focusing attention on relations with Germany which is the most powerful and now increasingly assertive player in European affairs has been a good move on the part of the Modi government.

India may have been disappointed with Russia’s growing alignment with China and its friendly moves towards Pakistan. I believe that in the long term, Russia-China relations are likely to be more competitive than cooperative. Russia has a strong sense of itself as a major global power. It has intervened when its interests have been threatened in its so-called near neighbourhood – in Eastern Europe and in Central Asia. It is unlikely to accept a subordinate role except as a tactical move. India should, therefore, remain strongly engaged with Moscow, drawing upon the long tradition of high level engagement. There is a perception that India has downgraded its relations with Moscow. The Modi government should dispel this.

Japan, Australia, Vietnam and Southeast Asia

India’s Prime Minister Narendra Modi (L) poses for a photo with his Vietnamese counterpart Nguyen Xuan Phuc at the Government office in Hanoi, Vietnam September 3, 2016. Credit: Reuters/Kham

The Modi government has done well to intensify its relations with the potential members of a countervailing coalition in the Asia-Pacific region. India-Japan relations stand out in this respect. However, India has failed to take advantage of the growing trend in Japan to diversify its trade and investment links away from China. Talking to Japanese politicians and business leaders, one senses disappointment that the special relationship between Modi and his Japanese counterpart, Shinzo Abe, has not really translated into an economic and commercial partnership comparable to what developed between Japan and China in the early phase of the latter’s modernisation. It is not that Japanese investment in India has not gone up or that there is lack of interest in India among Japanese businessmen. It is the conviction among them that there could be a quantum leap in such investment if the business climate in India provided them with a level of comfort and predictability. Prime Minister Modi is well placed to respond to these expectations. The situation in South East Asia and even Australia is somewhat more complex. These are countries heavily dependent upon the China market and now, Chinese investment. Nevertheless they would welcome an increase in India’s economic and security profile in the region. Here, too, one gets the sense that Act East is not as effective as it should be because of capacity constraints rather than any policy deficit. These are the same as referred to in reviewing India’s neighbourhood policy.

Act East and West

An important achievement of the Modi government has been its successful outreach to countries on India’s western flank, including Iran, the Gulf kingdoms and Israel. Previous governments had recognised the importance of these countries to India’s economic and security interests but there was a certain diffidence born out of a reluctance to be drawn into the region’s often volatile and fractious politics. This diffidence is now a thing of the past and Modi appears to have successfully walked a fine line amidst the region’s turmoil, advancing India’s interests and narrowing Pakistan’s in the bargain. One would, however, have hoped that the strategically important Chahbahar port project in Iran and the associated North-South corridor into Central Asia would have been pursued with the single-mindedness they deserve. According to available reports, not much work has been undertaken on the ground so far.

Staying with the western flank, one should also welcome the efforts of the present government to continue and reinforce the broad-based engagement with Africa. This is a continent of the future and India’s long term prospects are closely tied to the success of its Africa strategy. Here it is important that India does not play a game of catch-up with China. Rather it is more important to leverage India’s own unique strengths, such as its contribution to capacity building, promotion of entrepreneurship, small and medium scale industry and digital connectivity. India has a high reputation in Africa while China is being seen increasingly as a selfish and extractive power. Let us not traverse the Chinese path in Africa.

The Latin Quarter

Prime Minister Narendra Modi with Mexican President Enrique Pena Nieto. Credit: Reuter/Files

Prime Minister Narendra Modi with Mexican President Enrique Peña Nieto. Credit: Reuters

If there is one region of the world where the previous government was perceived to be more engaged it is Latin America. Let us not forget the critical support of Brazil, Mexico and Argentina, which enabled India to obtain the Nuclear Suppliers Group waiver in 2008. As middle powers these countries will be significant partners in any middle power coalition India would want to construct to press its preference  for a multipolar order. Brazil is a particularly important country for India and there is every reason to reinvigorate this relationship. In the future India, will need a Latin America strategy on the lines of its current focus on Africa. An India-Latin America summit should remain on our diplomatic horizon.

The way ahead

There is no doubt that under Prime Minister Modi, India enjoys a higher profile in international relations than any time in the recent past. The overall strategy underlying Modi’s foreign policy is sound and there are strong continuities with the past. The priority accorded to India’s neighbourhood, the pursuit of strong economic and security partnerships with the US, Japan, Australia and countries of South-East Asia, managing the China challenge through a mix of competition and cooperation, the sustained and expanding engagement with Africa and the reaching out to the large and influential Indian diaspora are all elements of continuity but there is a new vigour and energy with which these are being pursued by Modi. The challenge going forward must take into account the changed geopolitical terrain, marked by the relative retreat of US from its global role under Trump, the pursuit by China of a hegemonic role taking advantage of Western disarray and its own accumulation of formidable economic and security capabilities and, as a consequence, its more interventionist role in our own immediate neighbourhood.

There are two key factors which will determine whether India can emerge as a key countervailing power to China’s assertion of predominance. One is whether Prime Minister Modi is able to mobilise his unprecedented political power and popularity to drive the economic reforms and structural transformation of the governance system India needs to begin bridging the yawning power gap with China. It certainly has the potential to do so. The focus must be on the China challenge and not deflected by preoccupation with Pakistan. which really is a side show.

Secondly, India’s quest for power should not just be about muscle and brawn. The late Singapore leader, Lee Kuan Yew used to say that India’s rise does not generate the same anxieties which China’s does precisely because India is an open, transparent and democratic country. I would add the perception of India as a successful plural democracy, able to handle immense diversity and possessing a culture that has universal appeal and resonance. These are invaluable, intangible assets which must never be devalued in an effort to be seen as tough in comparison to previous governments or in serving short term electoral gains. This applies as much to how we handle Kashmir as it does to how we appear to our neighbours. Posture is not policy.

This is, therefore, a good time for a course correction.

Shyam Saran is a former Foreign Secretary and is currently Member of the Governing Board of CPR.