Indian Foreign Policy: Economic Diplomacy and Strategic Opportunities
The first and foremost defining aspect of India today is that it continues to be a democracy notwithstanding the huge diversity and disparity that prevails in the country. India became independent after the Second World War along with a large number of other countries. The generally accepted wisdom then was that democracy and poverty cannot co-exist together. That democracy and inequitable distribution of wealth don’t go together. For this thematic essay the topic of foreign policy in India, it's economic diplomacy, strategic opportunities and more will be analysed.
The economy is the building block of a successful foreign policy, as required resources then become available to erect defenses at home and to pursue interests abroad. India’s economic growth will be of key importance for tying our neighbors economically to the Indian market. It will be important to give stakes to a cross section of people in our neighboring countries in various sectors our economy. In this context the strengthening of SAARC should be a priority.
Lord Palmerstone of England once said ‘’There are no permanent friends, there are no permanent enemies, only permanent interests’’. This is particularly true for conducting a country’s foreign policy. At times the greatest challenge is to determine the permanent interests that motivate and inspire a country to act in a particular manner. It might be easy to identify our interests in a broad, macro context but application of this principle in any specific case or context could differ widely. It also needs to be remembered that morals, ideals, ethics and principles need to be meshed with considerations of practicality and realpolitik. Policy based either only on morality or ethics or only on short term practical considerations is more likely to become unsustainable and unworkable in the medium and long term.
The first aspect I would place in this category is the advent of ‘Globalization’, which should not be conceived as a sphere, but as a polyhedron. MK Gandhi, as himself was a product of globalization. He feels that the idea of Foreign policies was not evil but to believe that everything western was superior was not the correct stand to take. In the book “The end of poverty on global scale”, factors like Gini coefficient and Xenophobia showcases the decline nature of present system of economic policies.
The next distinctive feature I would like to emphasize is India’s youthful population, also called as ‘’India’s demographic dividend’’. More than 50% of India’s population is comprised of young people below the age of 25 years. India’s median age is around 26 years. While the whole world from USA to China, from Europe to Japan is greying and getting older, India will continue to benefit from the ‘’demographic advantage’’ at least for the next 30 years and more. There is both empirical as well as theoretical evidence to prove that countries blessed with the youth bulge can expect high rates of economic growth for several decades. India hence stands at the threshold of a rapid growth in its economy provided it can improve its governance, ensure that right policies are adopted and implemented and also that appropriate facilities in terms of physical and social infrastructure like roads, ports, education, skill development, health care etc are made available to our young, motivated and ambitious population.
However, the economic growth does not necessarily mean a reduction in poverty; in fact both can coexist. Economic growth indicators donot accurately reflect the growing disparities in wealth. Low income people are often excluded from economic induced opportunities.
The extraordinary changes of the last two decades are fundamentally transforming India’s economy and society. The consistent high economic growth in this period has not only helped empower a large number of our citizens but has also led to increased engagement of India with the outside world. If we can maintain high growth rates, leverage that growth to enhance the capabilities of our citizens, and maintain robust democratic traditions and institutions, there are few limits to India’s global role and influence. Our economic growth requires deepened economic engagement with the outside world at all levels: trade, labor, technology and ideas. And India now has an increasing range of interests, which are anchored in different parts of the world and which stem from a wide range of factors: for instance, the need to secure energy and other vital natural resources; the imperative of maintaining open shipping lanes; the imperative of seeking investments and trade opportunities overseas and so on.
While it may not be a foreign policy issue per se, the establishment of an indigenous defense manufacturing base is vital for acting independently on the world stage. No country that cannot independently defend itself can reach big power status. Our diplomacy will need to facilitate investment in hydrocarbon fields abroad as part of our energy security drive, besides working for avoidance of conflict in areas which are our biggest source of oil and gas. We have a shared interest with US in this but US policies in the Gulf region, driven by the Israeli and Iranian factors, are not in line with our interests as they keep the area on the boil. Having good relations with neighbors is not a unilateral exercise; it is a reciprocal one. If India should have good relations with its neighbors, then it is equally incumbent on the neighbors to have good relations with India. No one can argue that India’s conduct alone is deficient.
The reform of international institutions is therefore very important and India’s discourse on this is legitimate. India should have a greater say in these institutions. Getting a permanent seat in the Security Council will remain a challenge as resistance to this will not go away soon. Self-esteem and confidence are reflected in India’s claim to a permanent seat. India is not begging; it is claiming. India should pursue this quest, if only to remind that the existing international institutions that uphold the present world order are no longer representative of the international community. At the same time, spurred by advances in technology and global communications, we have witnessed emergence of new opportunities, enhanced productivity and higher living standards across the world. People across remote corners of our planet can be in touch with each other in real time, thanks to the rapid and dramatic developments in internet technologies. Developments in distant places, which once took time to impact other parts of the world, are now known almost instantaneously. Technology and social media is empowering people and one example of that change is how events relating to the Arab Spring were triggered some years ago.
The very same processes of globalization and technological revolution that have brought with them so many benefits to the world have also exposed our collective vulnerability. Our strategic goals as I mentioned earlier are basically to enable the domestic transformation of India by accelerated growth and a strategic autonomy that safeguards the national interest at all times in this overall global context. These goals will not change for a long time. But this does not mean that India is going to be insular or inward looking. On the contrary, our engagement with the world has accelerated and grown exponentially over the last few years. We have benefitted from our integration into the global economy since the 1990s. And this engagement is only bound to grow as India actively pursues its interests in the world and remains ready to contribute within her capacity. We want to maintain an open global order at many different levels. Our vision of a secular, pluralistic and tolerant society within the country, embracing a multiplicity and diversity of opinions and outlook, is sought to be articulated in our dealings with the world.
In terms of geography, India's foreign policy has always regarded the concept of neighborhood as one of widening concentric circles, around a central axis of historical and cultural commonalties. From this point of view, it has always given due priority to the development of relations with the countries of Asia. An article of steadfast faith in our foreign policy has been to ensure a peaceful, secure and stable neighbourhood, so as to safeguard peace, security and development within our own borders and it is with this perspective that India is developing a mutually beneficial relationship with all her neighbors.
The interlinked issue of energy security and climate change can pose the biggest hurdle in our quest to achieve our social and economic transformation. In addressing our energy requirements, we do not intend to follow the business as usual approach or the conspicuous consumption pattern that may exist in some developed countries. At present our own greenhouse gas emissions are only about 4% of the global level of emissions, even with 17% of global population. We have also set out ambitious goals for increasing the share of solar energy, wind energy, nuclear energy and clean coal technology in our energy mix on the one hand and on the other to improve overall energy efficiency. We have committed to keep the per capita emissions below the average of those in the developed countries and to reduce the emissions intensity of India's GDP by 20 to 25% by 2020 as compared to 2015.
The final defining element that I would like to suggest for your consideration is India’s economic growth and development over the last 2 decades and the promise and potential of its huge market and innovative capability over the coming years. Notwithstanding the somewhat lackluster economic performance over the last 2 years, India has the potential to grow at 8-9% if the right policies are put in place. Our Savings rate is around 32%; our investment rate is also in the similar range; our inward remittances are the highest in the world at around USD 70 billion per annum.
In conclusion, it can be said that India faces unique geo-political challenges that will remain in the years ahead. At the end of it all, the internal and the external cannot be compartmentalized in any country. Success or failure at home will mean success or failure abroad. I have tried to reflect on broader trends and critical issues that we face today and would need to successfully manage. India is proud to play its due role and fulfil its responsibilities as a factor of peace, security, stability and prosperity in the Region and the World.
Finally, if there is any truth in the dictum stating “the more things change, the more they stay the same”, then it would seem that the future foreign policy challenges for India will remain the same in a different form: protection of our independence and sovereignty, friendship with all and enmity with none and a peaceful environment in which we can economically grow and meet our internal challenges.
