Continuity amidst change

SHYAM SARAN

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SINCE the Modi government took office in May last year, there has been a notable activism and energy evident in the conduct of India’s foreign relations. Before the 2014 general elections there was every expectation that the main focus of the new Prime Minister would be on issues of domestic political and economic reforms. These were, after all, the themes highlighted in the election campaign. Few anticipated that once in office the Prime minister would devote considerable time and energy to the conduct of foreign policy.

In this respect he hit the ground running by his invitation to the heads of state/government of SAARC countries and Mauritius to attend his swearing-in ceremony. This was an unprecedented but imaginative initiative which ensured a highly publicized commencement to his tenure. It also underlined the priority he intended to attach to India’s relations with its subcontinental neighbours.

In the past few months the Prime Minister has undertaken several high profile visits to both neighbouring countries and key partner countries – the US, Japan and Australia. He has welcomed to India the Chinese leader, Xi Jinping, Russia’s President, Vladimir Putin and the US President, Barack Obama, the latter as the chief guest at India’s Republic Day celebrations. Most recently, the newly elected President of Sri Lanka has been welcomed in the Indian capital. It would be fair to say that in terms of high level visits alone, India has rarely witnessed such intense engagement with the outside world. Prime Minister Modi has displayed an enthusiasm and even flair for diplomacy that few suspected he had.

Is there any recognizable pattern that has emerged from Modi’s conduct of foreign relations so far? Are we witnessing a departure from the familiar and well established tenets of India’s foreign policy?

Some key priorities of the Modi government are already apparent. These are, as pointed out already, a renewed focus on relations with subcontinental neighbours; primacy accorded to economic diplomacy; special status given to the Indian diaspora as an instrument of promoting India’s economic interests, but also to enhance cultural affinity with the diaspora; pursuit of closer partnerships with major powers like the US, Germany and Japan, to secure both capital and advanced technologies, but also to hedge against the rising power of China; and finally, to engage as well as constrain China in an effort to preserve the maximum possible room for strategic manoeuvre, particularly in the Asia-Pacific region.

Modi reached out to Pakistan by inviting Nawaz Sharif to his swearing-in ceremony, but this promising start soon gave way to renewed tensions, both because of incidents at the border and the LoC, and the meeting between the Pakistan High Commissioner and the Kashmiri separatist leaders on the eve of scheduled talks between the Foreign Secretaries of the two countries. The meeting was called off by the Indian side. The Modi government also decided to raise the level of its retaliatory response to cross-border firing by Pakistani forces. The pressure on Pakistan to prosecute LeT terrorists responsible for the Mumbai assault in 2008 has also increased. It is likely that the India-Pakistan dialogue may be resumed soon, but in the present circumstances, when the Pakistani Army appears to have tightened its grip on the country, little progress is expected. Nevertheless, managing Pakistan and dealing with cross-border terrorism will continue to be a preoccupation for the government. The government has also signalled its resolve to respond in a much more muscular fashion in case of another major terrorist attack from elements based on Pakistani soil.

 

There does not appear to be a major departure in the conduct of India’s foreign policy. In fact, the changes are more in the form of nuances and emphasis rather than constituting major shifts. India’s foreign policy since independence has shown remarkable consistency, and change has mostly been incremental and gradual. Modi has by and large continued in the direction set by earlier governments, both the NDA led by Atal Bihari Vajpayee and the UPA led by Manmohan Singh. However, he has introduced some fresh nuances and pursued foreign policy objectives with a vigour and determination that was missing in the past few years. There is also a difference in leadership style and a greater preoccupation with public image and perception. It may be worthwhile to consider each key element in Modi’s foreign policy and gauge the extent of continuity and what, if any, are its novel features.

 

The priority accorded to our immediate neighbourhood has been a running theme in Indian foreign policy and acquired greater salience during the ten year tenure of the UPA government and the NDA earlier. This was reflected in a number of initiatives by India to energize the South Asian Association for Regional Cooperation (SAARC). It was Prime Minister Vajpayee who put forward the ambitious goals of a South Asian Economic Union, a SAARC currency and even a SAARC Parliament at the 2002 Kathmandu summit. During the UPA government, initiatives were taken to set up a SAARC Development Fund and a South Asia University. A number of cross-border projects were announced, including for new Integrated Check Posts and for road, rail, air and digital links.

The India-Bhutan Friendship Treaty was revised and a willingness to consider a similar revision of the Indo-Nepal Friendship Treaty was also conveyed during previous governments. During his visit to Kathmandu, Prime Minister Modi gave a similar assurance to the Nepal Parliament. The Modi government has also taken up, as a matter of priority, the building of an oil pipeline from India into Nepal, which was mooted during the NDA tenure, and pursued by the UPA but without success. In the case of Bhutan, the present government has pledged to pursue an ambitious cooperation programme for hydropower development and to further enhance India’s contribution to capacity building among Bhutanese people at all levels. With Bangladesh too, the policies of the previous government will continue and it is likely that both the land boundary agreement and the river waters sharing agreement, which the BJP had opposed when in opposition, will be implemented by the Modi government.

Therefore, with respect to India’s relations with its neighbours, little has changed at the ground level. By undertaking early visits to Nepal and Bhutan and expressing renewed commitment to a large number of cooperation projects which are in the pipeline, Modi has created a positive and expectant mood among our neighbours. However, perception needs to be followed by addressing the serious lack of capacity in the Ministry of External Affairs and other ministries and agencies which deal with our neighbours. There continue to be delays in implementation of cooperation projects and this has eroded India’s credibility in the region. These structural issues have been inherited from the past and remain unaddressed.

 

With respect to Pakistan, the Modi government confronts the same dilemma as its predecessors. It has failed to break out of the familiar pattern of dialogue-disruption-dialogue, a hallmark of India-Pakistan relations for several years now. There have been phases of promising engagement and a lessening of tensions, followed by setbacks and interruption of bilateral dialogue as a result of either cross-border terrorist attacks or exchange of fire across the LoC and the border. The Modi government reversed the previous government’s stance of refusing to resume dialogue until the perpetrators of the Mumbai attack are brought to justice. However, very soon it was back to square one. With the visit of the new Foreign Secretary, S. Jaishankar, to Islamabad on 3 March 2015 as part of the Prime Minister’s ‘SAARC Yatra’, the dialogue has resumed without any apparent change in Pakistani behaviour. Thus, even though the present government has adopted a more muscular posture vis-a-vis Pakistan, it was unable to escape the familiar dilemma which has plagued previous governments.

 

Relations with Washington have taken centre stage with Modi’s high profile visit to the US in September 2014 and the more recent visit of President Obama as chief guest at India’s 65th Republic Day anniversary. There is no doubt that the new government and in particular Prime Minister Modi himself, have created a new upswing in Indo-US relations and there is renewed expectation that this upswing will be translated into a sustained and substantive partnership, something that was seen as a promise under UPA-1, but lost steam under UPA-2.

Though the Modi government has not broken new ground, it has carried forward and accelerated the shift that began soon after the end of the Cold War and was carried forward by successive governments in Delhi, regardless of their political persuasion. Though the BJP had opposed the Indo-US nuclear deal concluded by the UPA, it is Modi who resolved the nuclear liability issue in his talks with Obama and gave pride of place to the nuclear deal: ‘The Civil Nuclear Agreement was the centrepiece of our transformed relationship, which demonstrated new trust. It also created new economic opportunities and expanded our options for clean energy.’ These words could well have been spoken by his predecessor, Manmohan Singh!

The UPA had concluded the first ever Defence Cooperation Framework Agreement with the US in 2005. When its ten year tenure came to a close this year it was renewed, in an expanded form, by the Modi government. Thus we see strong continuity in this component of India’s foreign policy as well.

 

Prime Minister Modi enjoys a special and unusually cordial relationship with Japan’s Prime Minister Abe. Japan was among the first countries outside the neighbourhood on Modi’s itinerary after assuming office. The visit was a great success and India-Japan relations have never been closer than they are today. But lest we forget, Modi was building on the solid foundations laid by his predecessor Manmohan Singh, who had invited Abe as chief guest to the previous Republic Day anniversary. The Emperor and Empress of Japan too paid a historic visit to India during the tenure of the previous government.

With respect to East Asia and ASEAN, the new government has demonstrated its intent to add momentum to the Look East policy by adopting an Act East policy and that, of course, is a welcome move.

It should be evident by now that there is more continuity in India’s foreign policy than may be apparent at first sight. This is not surprising given the geopolitical reality in which India has to operate, a reality which, until recently, remained generally stable despite several regional conflicts and the emergence of newer challenges such as cyber security, climate change and global pandemics.

The end of the Cold War in the early 1990s inaugurated a phase of US predominance which prevailed up until the global financial and economic crisis of 2007-8. There was a seismic change in international affairs and this also impacted on India, which now had to contend with the virtual evaporation of the Indo-Soviet strategic partnership which was rooted in a shared perception of a threat from China and which had also supported India’s pursuit of self-reliant economic growth. This strategic partnership had been a stable and predictable element in India’s foreign policy at least from 1960 to 1990. Coinciding with the disintegration of this strategic partnership was India’s own balance of payment crisis which compelled the embrace of far-reaching economic reforms and liberalization, which then opened the door to the steady globalization of the Indian economy. Driven by these two powerful drivers, Indian foreign policy had to make significant adjustments that are still playing out.

 

In the post-1990 phase, India began to improve relations with both the United States and the European Union. With the collapse of the Soviet Union, China’s rise as an economic power was seen by western countries as a worrying trend. The expectation that the adoption of market economics and capitalist processes by China would transform it into a liberal democracy was belied by the brutal suppression of pro-democracy demonstrations in Beijing’s Tiananmen Square in June 1989. By contrast, India was seen as a successful and politically stable plural democracy and now also as a major commercial opportunity like China because of its accelerating economic growth. India’s nuclear tests in May 1998 may have somewhat retarded this realignment, but by the turn of the century India’s relations with the US and the West in general, had begun to crystallize into a mutually beneficial and substantive one.

This was also the period when India began to re-engage with its East Asian neighbourhood. The Look East policy was inaugurated in 1992, and this region has emerged as one of the most dynamic components of India’s external economic relations as well as a target for more robust security engagement. Russia continues to be an important partner and a significant source of advanced defence technologies and hardware. However, India has had to contend with the growing economic and security relationship between China and Russia, with Russia now supplying the same advanced weaponry to China as it did to India. By contrast, since 1989, neither the US nor its western allies were supplying weapons or defence related technologies to China.

 

The post Cold War international environment by and large endured for a quarter of a century up until the global financial and economic crisis erupted in 2007-8. As a result of the virtual monopoly of power enjoyed by the US, there was relative calm in great power relations. Neither Russia nor China were inclined to confront the United States, even if there were perceived transgressions of their interests.

On regional issues such as the conflict in the Balkans, the Afghan War and the invasion and occupation of Iraq, during the decade of the nineties and the first decade of the current century, China and Russia may have criticized but mostly acquiesced in the unilateral assertion of US power. On certain issues such as the Iranian and North Korean nuclear ambitions, there was a degree of coordination and cooperation among the major powers. There was a pervasive perception that the end of the Cold War had created a new phase in history, where there was no sharp ideological conflict among the major powers and that all such powers had accepted the logic of capitalist market economics. The western norms of global behaviour which had evolved over the past two centuries, were deemed to be of universal relevance and application.

From a western, in particular US, perspective, geopolitics had receded to the background, the probability of major power conflict had diminished and the prospects of major power cooperation on managing the global commons and dealing with regional and global challenges had significantly improved. Of course, geopolitics had never gone away from the perspective of non-western powers. In fact, geopolitical contestation had become sharper in West Asia and the Gulf, in several parts of Africa and in our own South Asian neighbourhood, in particular the Af-Pak theatre. From the perspective of Japan, RoK and South East Asian countries, the rise of China and its increasing assertiveness raised new fears and tensions. Therefore, when the US and West Europeans now speak about the ‘return of geopolitics’ as Walter Russel Mead has done in his celebrated essay in Foreign Affairs, it is from a much narrower western perspective.

 

Geopolitics has made a comeback because the unipolar moment that prevailed over much of the 25 year period after the Cold War, has come to an end. Rival powers like Russia and China are no longer constrained to acquiesce in the US definition of the global order. The global financial and economic crisis has severely dented the ideological orthodoxy enshrined in the ‘Washington Consensus’. The US and, in particular, Western Europe, find themselves on the defensive, their own social and economic institutions are under heavy and sometimes debilitating stress. In many instances, it is the western countries who are the most guilty of violating their own solemnly proclaimed norms.

For India, the quarter of a century that followed the end of the Cold War was a benign phase and generally supportive of its economic advancement and conducive to the pursuit of its security interests. With the exception of China, four other members of the Security Council joined hands to make the Indo-US civil nuclear deal a reality. Post the Ukraine crisis, it is difficult to imagine that in today’s changed context, all major powers could have worked together to enable the NSG waiver in favour of India. China had to acquiesce essentially because of overwhelming support for India among the major powers, including middle powers like Brazil, Mexico and South Africa.

 

Similarly, all major powers supported India’s permanent membership of the Security Council, even though for some it was more of a rhetorical commitment. In Asia-Pacific, India’s rise was welcomed and within the two decades preceding and following the new millennium, India moved from being a sectoral dialogue partner of ASEAN to a full dialogue partner, a summit partner and finally, in 2012, a strategic partner.

The 9/11 terrorist assault by Al-Qaeda on the United States also brought about a significant change in attitudes towards cross-border terrorism, which could earlier be pursued with impunity under the guise of supporting a freedom movement. Pakistan could no longer rely upon US and international ambiguity to indulge in state sponsored terrorism against India or embark on adventurist actions on the LoC like the Kargil war and escape opprobrium. This was an important gain for India and derived as a collateral benefit of the global war on terrorism unleashed by the US.

In particular after the 26/11 terrorist outrage in Mumbai perpetrated by Pakistan-based LeT operatives and the subsequent assassination of Osama bin Laden, hiding in plain sight in the Pakistani cantonment city of Abbotabad, Pakistan has earned the unenviable reputation of being the breeding ground of jihadi terrorism. India and the US have today a level of counter-terrorism cooperation, including against Pakistan based terrorism, which would have been unthinkable even a decade ago.

So from this perspective, the decline of geopolitics for the US and the West has helped India deal more successfully with its geopolitical challenges. This benign phase may now be coming to a close as sharper contradictions come to characterize the evolving relations among the major powers. There is a new phase of geopolitical competition which India will need to navigate through and this confronts the Modi government with a more complex and challenging international environment.

 

This phase of geopolitical competition may be traced to the global financial and economic crisis of 2007-8 from which neither the US nor Europe have fully recovered, although the US appears to be in better shape today than its western allies. The persistence of this crisis has meant that the relatively open and liberal trading environment in the West, which allowed the export-driven economies of China and East Asia to flourish and emerge as major manufacturing platforms supplying the global market, is now under threat. In responding to lack of growth and shrinking markets, both the US and western economies are increasingly resorting to protectionist measures using non-tariff barriers such as imposing environmental or labour standards or more strict phytosanitary standards on imports.

For India which adopted economic reforms and liberalization comparatively late, these protectionist trends come at a time when there is a renewed effort to establish India as a globally competitive manufacturing hub. ‘Make in India’ will not enjoy an international economic environment as supportive as China did in the post-Cold War period. The US-led Trans-Pacific Partnership (TPP) in Asia-Pacific and its initiative for a Transatlantic Trade and Investment Partnership (TTIP), threaten to create vast trading zones with restrictive norms and standards, designed to keep away competition from countries like India, which otherwise enjoy comparative advantage. The erstwhile votaries of free trade have become its most threatening violators. India faces the risk of being pushed to the margins of the global economy. This also renders the strategic partnership between India and the US unstable and unbalanced. For a strong partnership, both the economic and security pillars must be strong and mutually beneficial.

 

As pointed out earlier, the global financial and economic crisis has altered major power relations. Europe has turned inwards and remains preoccupied with multiple crises. Its economies remain stagnant, even as social stresses and strains begin to spawn ultra-right and xenophobic sentiments across the continent. Extremism among its deprived Muslim communities has become a cause of concern. These negative trends may worsen if the economies continue to stagnate and unemployment remains high.

In 2004-5, India and the EU forged a strong strategic partnership based on shared values of multi-ethnic, multi-cultural, multi-religious and multi-lingual plural democracies. Each side had a stake in the success of the other and India looked upon a strong, united Europe as a pole in its own right in the global order. That has changed in the past decade – thanks to the Euro zone crisis, which has muted the voice of Europe in international affairs.

The crisis has also contributed to the growing power and influence of Germany, which is now indisputably the strongest power in Europe. This has its own implications for the future of Europe. Some analysts see the crisis in Ukraine as a not too subtle attempt by the US and the UK to rein in Germany and retard its growing engagement with Russia. There is no doubt that the West is divided over how to deal with Russia. Few wish to return to the dangerous tensions of a renewed Cold War in Europe, but there is also legitimate apprehension over Russian intentions.

 

For India, the Ukraine crisis has introduced a new element of discomfort as it seeks to maintain its residual relationship with Russia without impacting on its growing partnership with the US. It is also uncomfortable over the tightening embrace between Russia and China, which can only work to India’s disadvantage. In provoking the crisis over Ukraine, the US does not appear to have thought through the incompatibility with its pivot to Asia. In the US-China-Russia triangle, it is China which now holds the levers, not the US as hitherto.

The Ukraine crisis has become interlinked with another recent development, that of falling oil prices. The sharp and unexpected fall in oil prices is attributed to oversupply, particularly from shale oil production in the US. However, there is a geopolitical element here too. There appears to be a tactical understanding between the US and Saudi Arabia, which is the most influential ‘swing’ producer of oil, to drive prices down in order to penalize Russia as also to put pressure on Iran, both of whom depend heavily on oil revenues for their economic well-being.

The current glut in the oil market is probably a temporary phenomenon. The current growth in demand for oil is one million barrels of oil/day, but the extent of replacement of declining oil production in existing fields is about five million barrels/day. Furthermore, each barrel of replacement oil costs more to produce. Therefore, most analysts expect oil prices to rise sooner rather than later. Therefore, should Russia tide over its current crisis for a year or two, as appears likely, it will then re-emerge as a key energy player with all the influence that this could bring to it.

The implication of this for India is that it should not assume a prolonged decline in oil prices in drawing up its long-term energy strategy. However, this temporary phase of low prices should be leveraged to reform energy subsides, acquire oil and gas assets abroad at more favourable prices and continue with a long-term strategy to bring about an accelerated shift from its current reliance on fossil fuels to an economy progressively based on renewable and clean sources, such as nuclear energy.

 

India’s energy security concerns are nevertheless currently tied to the situation unfolding in the Gulf and West Asia. Any major political upheaval in the region is likely to interrupt energy supplies to India, with negative consequences for our future prospects. The diversification of supply sources away from the Gulf is, therefore, an urgent necessity as is the need to ramp up domestic production.

Another related contingency to plan for is the impact of any political turmoil in this region on the welfare of the over six million Indians who live and work there. As was apparent during the abduction of Indian nurses and workers by ISIS in Iraq, expat Indians are vulnerable to shifting political changes in the region and India has few instruments of influence available among countries in the region. The evacuation of a few hundred Indians during a crisis is a major operation; if larger numbers are affected, India’s own resources can easily be overwhelmed.

 

The other dimension to consider is the sharpening sectarian divide in the region and its fallout on our own Muslim population. There is also need to carefully study the attraction of ISIS for young Muslim men and women across the world, including India. While ISIS is described as being medieval in its mores and conduct, its attraction for young men and women appears to be, paradoxically, because it offers an opportunity to break away from the conservative and repressive code of traditional Islam. For young women living together as ‘temporary wives’ of ISIS fighters, this can be a liberating experience rather than a relapse into repressive medievalism. This aspect has somehow been missed in the discourse over ISIS. Asking conservative family elders to warn their children against the barbarity and un-Islamic conduct of ISIS is unlikely to work if the point of attraction lies elsewhere. It is only by encouraging a more liberal and accommodating Islam, which prevailed before Wahabi influences crept into the subcontinent’s Muslim societies, that the lure of ISIS may be confronted.

If there is one geopolitical crisis that could derail India’s further prospects and impact on its social cohesion and plural culture, it is the very real likelihood of the current turmoil in Gulf/West Asia spreading to the sheikhdoms and Saudi Arabia. Planning for this contingency should be a priority in our national security strategy.

One does not envisage much change in India’s China strategy. It will continue to be a mix of both engagement as well as competition with the precise mix varying according to changes in the regional and global situation. Prime Minister Modi went out of his way to accord an unprecedented warm welcome to Chinese President Xi Jingping in September last year. However, the visit coincided with renewed tensions on the border leading to doubts about Chinese intentions. Perhaps this was a not too subtle move to appraise the new Indian leader. If so, Modi reacted firmly and did not hesitate to publicly assert that such incidents were incompatible with the stated Chinese desire for closer relations. It is now clear that this government is open to exploring opportunities for mutually beneficial economic and commercial relations but will, at the same time, seek to enhance India’s defence preparedness to confront aggressive moves by the Chinese.

 

There is an expectation that with both India and China headed by strong leaders, there may be a window of opportunity to seek a political resolution of the long-standing boundary dispute. The key question is on what terms and conditions the dispute could see resolution. To be politically acceptable in India it would have to be a LAC plus solution. China’s current posture does not appear to hold out a possibility of such an agreement in the foreseeable future. There is also the lingering issue of Tibet which hangs over the relationship. Therefore, managing the dispute through confidence building measures, reducing its salience in the overall relationship and continuing the practice of regular engagement at the summit level will contribute to the relationship remaining stable despite its essentially competitive underlay. In addition, a strong set of diversified relationships with major powers, in particular the United States, gives India greater room for manoeuvre vis-à-vis China rather than provoking its hostility. As long as India refrains from becoming a member of an anti-China military alliance, China has more to gain by increasing its engagement with India than through confrontation. It is inevitable that each side will continue to develop relations with the other’s neighbours. For India, the strategy has to be delivering on the stated priority to our subcontinental neighbourhood so that we do not leave spaces that China or others can take advantage of.

 

To recapitulate, Indian foreign policy under Prime Minister Modi would have to take into account the following important factors:

One, we have entered a new phase of renewed great power rivalry and incipient confrontation, which presents India with a more complex and polarized international environment. This could limit the country’s room for manoeuvre.

Two, the global financial and economic crisis, which still has to run its course, has made the international economic environment less supportive of India’s development ambitions than compared to the two decades following the end of the Cold War. Protectionist trends are gaining strength and new and powerful regional economic blocs are emerging which may marginalize India and push it to the periphery of the global economy.

Three, India could face a major crisis as a fallout of intensified political turmoil and sectarian conflict in the Gulf and West Asia, with few levers available to influence events. This would be in the nature of a more immediate challenge.

Four, managing the rise of China would qualify as both an immediate as well as a more long-term challenge. For the foreseeable future, India will have to cope with the growing power asymmetry with China whose economy is now four times the size of India’s and growing. At the same time, India is perhaps the only country which has the potential to draw level with and even surpass China over a longer trajectory. This will only be possible with a determined leadership making hard choices. The current leadership in India does appear to have that quality.

 

The key asset which India could leverage is its potential to emerge as the world’s fastest growing major economy as China’s own growth decelerates. A period of sustained and high rate of growth would enable India to move towards the centre of the global economy from the margins and be able to negotiate from a more favourable position. This would also expand India’s options in its foreign relations both in Asia and beyond.

India’s growing economic and security profile finds greater acceptance regionally and globally as it is perceived as a non-threatening and benign power. This has much to do with its success as a liberal democracy and is a major advantage compared to China, whose rise is creating anxiety and concern both in its periphery as well as among major powers. India must continue to retain this perceptional advantage through deft diplomacy.

The priorities set forth by the Modi government and the initiatives it has taken so far reflect some of the elements this analysis has drawn attention to. There are no major departures from the direction set by the previous governments, but there is a more determined and energetic pursuit of the objectives set forth already. There will, however, be need for some course correction and fresh initiatives as the international environment becomes a more contested space and the frequency and salience of regional and resource related conflicts increase.

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