India’s Foreign Policy and Economic Challenges: Friends, Enemies and Controversies 3031202694, 9783031202698

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Global Power Shift

Silvio Beretta Axel Berkofsky Giuseppe Iannini   Editors

India’s Foreign Policy and Economic Challenges Friends, Enemies and Controversies

Global Power Shift Series Editor Xuewu Gu, Center for Global Studies, University of Bonn, Bonn, Germany Managing Editor Hendrik W. Ohnesorge, Center for Global Studies, University of Bonn, Bonn, Germany Advisory Editors G. John Ikenberry, Princeton University, Princeton, NJ, USA Canrong Jin, Renmin University of Beijing, Beijing, China Srikanth Kondapalli, Jawaharlal Nehru University, New Delhi, India Beate Neuss, Chemnitz University of Technology, Chemnitz, Germany Carla Norrlof, University of Toronto, Toronto, Canada Dingli Shen, Fudan University, Shanghai, China Kazuhiko Togo, Kyoto Sanyo University, Tokyo, Japan Roberto Zoboli, Catholic University of Milan, Milano, Italy

Ample empirical evidence points to recent power shifts in multiple areas of international relations taking place between industrialized countries and emerging powers, as well as between states and non-state actors. However, there is a dearth of theoretical interpretation and synthesis of these findings, and a growing need for coherent approaches to understand and measure the transformation. The central issues to be addressed include theoretical questions and empirical puzzles: How can studies of global power shift and the rise of ‘emerging powers’ benefit from existing theories, and which alternative aspects and theoretical approaches might be suitable? How can the meanings, perceptions, dynamics, and consequences of global power shift be determined and assessed? This edited series will include highly innovative research on these topics. It aims to bring together scholars from all major world regions as well as different disciplines, including political science, economics and human geography. The overall aim is to discuss and possibly blend their different approaches and provide new frameworks for understanding global affairs and the governance of global power shifts. All titles in this series are peer-reviewed. This book series is indexed in Scopus.

Silvio Beretta · Axel Berkofsky · Giuseppe Iannini Editors

India’s Foreign Policy and Economic Challenges Friends, Enemies and Controversies

Editors Silvio Beretta Department of Political and Social Sciences University of Pavia Pavia, Italy

Axel Berkofsky Department of Political and Social Sciences University of Pavia Pavia, Italy

Giuseppe Iannini Department of Political and Social Sciences University of Pavia Pavia, Italy

ISSN 2198-7343 ISSN 2198-7351 (electronic) Global Power Shift ISBN 978-3-031-20269-8 ISBN 978-3-031-20270-4 (eBook) https://doi.org/10.1007/978-3-031-20270-4 © Springer Nature Switzerland AG 2023 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Foreword

India at Core of the Indo-Pacific Space, the Western Waters of the Indian Ocean and Inner Asia: A Timeless Open Space. What Changed after Independence? The Indian Independence Act (15th August, 1947) anticipated the independence promised by former British Prime Minister Clement Richard Attlee for June 1948, and gave life to two independent entities: the Indian Union, which included 25 states, and Pakistan, composed of four provinces and an eastern territory: Bangladesh. The dawn of independence was stained with blood and signed with the blood of ethnic and religious strife, revolts against the British unilateral dictate, individual political ambitions and territorial disputes like the one in Kashmir—a dispute that remains unresolved until the present day. Indian independence resulted in an unbalanced political and diplomatic situation, which from the very beginning stood in the way of negotiations and diplomacy between India and Pakistan. It is misguided to view the present as an unicum per se, i.e. two regional nuclear powers concerned exclusively with boundaries, religious supremacy, and economic-technological aspirations in an allegedly ‘globalized’ world. A world and space characterised by an impending eco-systemic transition and a dominating digitalized reality transforming it into a new ‘liquid’ and digitalized space—one increasingly beyond human control.1 Today, we are confronted with a dimension in which the ‘strategic factor’ dominates in the realms of economic power and individual economic interests, both regional and global. A space in which the term and definition of ‘superpower’ has to be viewed against the background of a new ‘global’ vision of space, frontiers and security, defined by a multiplicity of factors, which often are viewed as abstract and timeless assumptions beyond traditional geographic spaces and frontiers of the twentieth century and the first two decades of this millennium. They are the threshold of an impending future, marked by the Covid-19 pandemic, human, social and economic 1

In this context the economic and social, ethno-anthropological analysis by C. Giaccardi & M. Magatti, Supersocietà. Ha ancora senso parlare di libertà? Il Mulino, Bologna 2022. v

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disasters, innovative communication methods and instruments, and the proliferation of armed conflicts. We are confronted with a dimension that is dominated by a new paradigm, which tries to put at its centre the ‘people’ and their welfare. The ‘people’ become the central (but imaginary) actor of international relations. They are regarded as a major element of political affairs, as victims of natural catastrophes and/or imposed political-economic and strategic choices, or as a force to overthrow external pressures, threats and violence. A dimension exalted by media and digital platforms of communication. Neither India nor Pakistan are immune to all of this. However, against this background and in the context of India-Pakistan bilateral realities, it is possible to perceive the tenuous lines of a political-administrative tradition that has its roots in the deep humus of a local culture, which has survived the evanescence of the present and the upcoming digital and robotic reality. For example, traditional family fortunes, bonds between wealthy families, links between the country’s elites and officials and bureaucrats who above all govern and administer the country on behalf of the elites. Undoubtedly, these are still very alive and kicking and closely linked to new visions of global power (economic and financial) and security (hard more than soft security). A system that leaves its mark in the Indian Union as much as it does in Pakistan (for example, in the shape of the constitutional position of tribes and family-forms in Pakistan and religious groupings and casts in India). What has changed since India’s independence? Put bluntly, very little. Beyond remarkable technological and scientific progress, beyond a westernized and highly educated elite, beyond densely populated towns with their suburbs and miserable dwellings, beyond skyscrapers and magnificent pompous buildings, beyond sophisticated constitutions and sophisticated constitutional amendments improving democratic governance and democratic elections, the financial-administrative interplay of power follows the same rules than in the past. Nowadays and in Indian on-the-ground realities and dynamics, these traditional forces continue to be present and influential. Lucrative public service jobs and the responsibility for collecting the revenues of no less lucrative economic and agricultural business are in the hands of traditional groups helping those in power to stay in power. A global albeit still liquid space moving towards new targets? Within this global-liquid stage and its visions, there are however some factors that should be considered: a society still close to its traditions, to bonds of religiously dominant elements (either Muslim, Sunni and Shi‘i, or Hindu, Zoroastrian, Buddhist and other), a society close to the bonds of traditional ‘clientelism’ and its dynamics, to traditional administrative and social practices, and a traditional management of power and force (‘force’ as in the armed forces and the country’s nuclear arsenal). However, it is possible to hope and strive for development and some changes: the social forces and their affiliations. The latter are presently evolving, standing for innovation with innovative forces of this millennium. They are increasingly incorporated into their fabric of modernity and future: a sort of middle class of well-educated young male and female citizens. They pertain to a new reality dominated by economic and strategic factors, in which the ‘liquid space’ is made up of idealism, where ‘global space’ is the dimension of the future, a reality, which is already relentlessly imposing

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its rules onto society. Young male and female citizens, who are emerging and forging a connection with the old aristocracy and power structures and their leaders in the name of the ‘people’ and social-economic justice. So far so good, but tensions persist and come to the forefront every now and then through a skilled manipulation of the public opinion, and the political polarisation of conflicts (like that of Kashmir). What and where is the Indo-Pacific space? The Western waters of the Indian Ocean? Inner Asia? From an Asian perspective, these are mere Western definitions moulded by ‘foreigners’ and foreign powers since the sixteenth century. Definitions, which mirror foreign, extraneous strategic interests and their concept and ideas of conceptions. India’s new generation largely disregards such definitions. Pragmatically, it aims at positioning the country within a new dimension forged by the present and its forces, challenging the impending future. However, traditional leaderships do not disregard such ‘alien’ definitions. Nor does the army. The armed forces are always prepared to subtly tackle the various international forces and their alliances, ready to grasp from them renewed support, power and advantages—not taking into account and indeed ignoring, what the new generations want and strive for. This is the post-1947 Indian Union with its rich cultural heritage and peaks of splendour, with its religious strains often mirroring social anxieties, with its socialpolitical system deeply rooted in past realities and underground forces. India, a country dominated by perennial tensions that no reforms have ever succeeded to erase or control, a country in which the economic-administrative factor is still the dominant power of India’s foreign policy and its numerous regional conflicts. Within the new dimension of this third millennium, the country’s economic power and reach gain prominence and become strategic factors and engines for India’s traditional ties (with the US, Africa and the Gulf countries) and partnerships (regional institutions and the Commonwealth, for example) and for new strategies (China and Japan). It is the engine for the reorganization of India’s foreign policy following patterns and a path targeting global markets and business. Silvio Beretta, Giuseppe Iannini and Axel Berkofsky have done a brilliant job editing this volume. The volume’s book chapters provide the reader with a comprehensive overview of India’s foreign policy, depicting a reality, which goes far beyond contingent times and frontiers’ spaces. The chapters mirror the developing essence of this third millennium with its new global-liquid spaces, and, within it, the multifaceted kernel of the Indian ‘continent’, its strategic and military positioning, policies and diplomacy. The analysis of India’s foreign policies, its interactions with the country’s close and not-so-close neighbours and the analysis of India’s regional and global economic and trade policies is inevitably not exhaustive. However, the volume’s authors cover numerous areas and aspects of India’s foreign relations and its economic and trade interactions with the rest of the world. Axel Berkofsky analyses India’s relations with China, Filippo Boni those with Pakistan, Giulia Sciorati examines India’s ties and interactions with the Association of Southeast Asian Countries (ASEAN), Francesco Mazzucotelli examines the country’s ties with and dealings in the Middle East, Michelguglielmo Torri examines India’s relations with the US and Emanuel Mangiarotti is analysing the importance of Kashmir for what she calls Indian Prime Minister Modi’s ‘ethno-nationalist’ idea of India. Mario Prayer, Silvio

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Beretta, Giuseppe Iannini and Gianluca Rubagotti in turn examine in great detail the historical and conceptual background of the Indian state and its foreign relations, India’s involvement and role in regional trade and investment and India’s position and positing in global trade and investment structures and flows. Finally, the editors have invited four Indian scholars—Gautam Chikermane, Jagannath Panda, Priyanka Pandit and Harsh Pant—to provide the reader with Indian perspectives on India’s overall foreign and security policy strategies, India’s security and defence relations with Japan, the country’s economic and trade ties with China and India’s reactions to China’s expanding footprint and influence in the Indo-Pacific Region, respectively. Valeria Piacentini Fiorani Università Cattolica del Sacro Cuore Milan, Italy

Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Silvio Beretta, Axel Berkofsky, and Giuseppe Iannini

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A Rising India in the Crossfire of Competing Grand Strategies . . . . . . . . Gautam Chikermane

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The Indian State and Its Foreign Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . Mario Prayer

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Rethinking “Interdependence”: The Changing Nature and Context in India–China Economic Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Priyanka Pandit

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India: Candidate Player in the Asian Economic Space—Problems and Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Giuseppe Iannini and Silvio Beretta

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India and International Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gianluca Rubagotti

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China’s Expanding Footprint in the Indian Ocean Region and the Indian Pushback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 Harsh V. Pant India and China—Two Countries Marching the March of Folly . . . . . . . . 119 Axel Berkofsky Kashmir as Frontier in Narendra Modi’s Ethno-Nationalist Idea of India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 Emanuela Mangiarotti India’s US Policy 1991–2019: The Gradual Loss of Strategic Autonomy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 Michelguglielmo Torri

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Framing India–Japan Ties for a Progressive Indo-Pacific . . . . . . . . . . . . . . 179 Jagannath Panda India and the Gulf: The Indo-Pacific Strategy Goes West . . . . . . . . . . . . . . 199 Francesco Mazzucotelli A ‘Nodal Centre’: Competing Interests in India’s Relations with ASEAN After Covid-19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 Giulia Sciorati India’s Responses to the Belt and Road Initiative: A Case Study of Indo-Pakistani Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233 Filippo Boni

About the Editors

Silvio Beretta is Professor Emeritus at the Department of Political and Social Sciences at the University of Pavia (Italy) and currently lecturer of international economic cooperation and development policies at the same department. Silvio Beretta is also former Dean and Director of the Department of Economics, Statistics and Law. He is member of the Istituto Lombardo-Accademia di Scienze e Lettere as well as Foreign Research Fellow at the Center of European Studies at the City University of New York and Honorary Member at the Academy for the Humanities and Sciences at the same university. Silvio Beretta is scientific director of the journal “Il Politico” and has extensively published on international and European economics, on decision-making processes of Italy’s economic policies, the territorial structure of financial systems and the history of economic policy and comparative economic systems. Axel Berkofsky is Associate Professor at the University of Pavia, Italy and CoDirector of the Asia Centre at ISPI. Axel Berkofsky is also Executive Committee Board Member of the Stockholm-based European Japan Advanced Research Network (EJARN) and Research Affiliate at the European Institute of Japanese Studies at the Stockholm School of Economics. Previously, Dr. Berkofsky was Senior Policy Analyst and Associate Policy Analyst at the Brussels-based European Policy Centre (EPC), Research Fellow at the Brussels-based European Institute for Asian Studies (EIAS). Axel Berkofsky has published numerous papers, articles and essays in journals, newspapers and magazines and has lectured and taught at numerous think tanks, research institutes and universities in Europe and Asia. His research interests are amongst others Japanese and Chinese foreign and security policies, Chinese history, Asian security and EU-Asia relations. Giuseppe Iannini is Professor (Ret.) of Monetary Economics and Economic Policy in the Department of Political and Social Sciences at the University of Pavia, Italy. Professor Iannini has worked on, among other subjects, banking and financial systems in emerging economies, in particular China and Russia. He has published a number

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of articles and books on banking and financial systems and has organized conferences and research projects in partnership with business and business associations. In addition to his academic and research activities, he has held courses at the Istituto per gli Studi di Politica Internazionale (ISPI) in Milan and has taught on master courses organized by the Italian–Russian Chamber of Commerce in Milan. Professor Iannini has led several scientific projects at the Center for Asia-African Studies at the University of Pavia and has on various occasions collaborated with the Italian economic and financial newspaper Il Sole 24 Ore on issues concerning the role of emerging countries in the context of financial global imbalances.

Introduction Silvio Beretta, Axel Berkofsky, and Giuseppe Iannini

Abstract Analysis, assessments and (at times very opinionated) opinions on numerous aspects of Indian domestic, foreign and trade policies. This is what is in this edited volume written and presented by Indian and non-Indian scholars and analysts with very different academic and scientific backgrounds. Unsurprisingly, the result is a volume in which the authors come to very different conclusions on the quality, the good, the bad and the possible future of Indian domestic and foreign policies.

India’s intellectual and policymaking elites think it is appropriate and indeed necessary to maintain a nuclear weapons programme despite being officially ‘poor’ and a developing country with a frustratingly low GDP per capita. As it turns out, however, from the government’s perspective not poor enough not to be able to afford a very expensive nuclear weapons programme using funds that could or indeed should be spent on, e.g. social welfare in a country with a GDP per capita of less than $2,000. India’s decision to deploy nuclear weapons despite widespread poverty, very high levels of inequality, equally high rates of analphabetism (18% for men and 35% for women, respectively) arguably stands for much of what is wrong with Indian politics today. This is indicative of India’s many internal contradictions—typically at the expense of the very large majority of the Indian population which suffers from wrong policies, mainly benefitting the country’s political, economic and military elites. This, of course, is not terribly surprising given that such policies are suggested and adopted by a very small group of the population not subject to and suffering from poverty, underdevelopment, analphabetism and daily difficulties to make ends meet in India: politicians, the business community, the military and academia often S. Beretta (B) · A. Berkofsky · G. Iannini Department of Political and Social Sciences, University of Pavia, Pavia, Italy e-mail: [email protected] A. Berkofsky e-mail: [email protected] G. Iannini e-mail: [email protected] © Springer Nature Switzerland AG 2023 S. Beretta et al. (eds.), India’s Foreign Policy and Economic Challenges, Global Power Shift, https://doi.org/10.1007/978-3-031-20270-4_1

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with degrees from Oxford, Cambridge and many other prestigious Western universities. Elites detached from reality in India. In fact, what the aforementioned (very) privileged in India few think, write and adopt are policies and views which could in many cases not be any more detached from the country’s social and economic reality, i.e. could not in any way be less than what a developing country like India needs. It is arguably that simple when one is asking oneself whether politicians and policymakers should be more interested in a nuclear weapons programme to be a member of the self-proclaimed club of ‘great powers’ (armed with nuclear weapons) or whether an overall very poor developing country’s priority should rather be policies aimed at eradicating poverty and misery as much and quickly as possible. The answer is, at least if one chooses to allow for good or common sense to rule of over vanity and greed, obvious. And this is where the authors of this volume and their contributions come in. European and Indian scholars and analysts who undertook the attempt to analyse various areas and aspects of Indian foreign, domestic and trade and investment policies. Analysis, assessments and opinions which at times and throughout this volume differ fundamentally, seemingly describing not one but several different countries. Again: not a surprise as non-Indian authors look from the outside in, measuring policies and policy outcomes by non-Indian standards while this volume’s Indian authors see and describe India as a quasi-economic and military superpower (allegedly) rightfully asking for a seat at the top table of international politics, security and trade. Demands that are typically brought forward by Indian scholars and analysts authors working in think tanks and research institutes with close ties to Indian governing and policymaking elites. There are obviously nuances, differences and differing analysis and conclusions among Indian scholars on what India should be and do in international politics and security, but judging by what Indian mainstream think tanks produce in terms of policy analysis and policy recommendations, it is fair to conclude that the aforementioned widespread underdevelopment and social inequality do not—at least as far scholars and analysts working for and with the government and the Ministry of Foreign and Ministry of Defence in New Delhi are concerned—stand in the way of India maintaining a very expensive nuclear weapons programme. In fact, when Indian scholars, military and policymakers talk and write about India’s strategic and military position and positioning, the very large (poor) majority of the Indian people do not feature in such papers and speeches. Instead, there is typically a lot of talk about India’s ‘great’ or ‘major’ power ambitions and/or entitlement, backed-up by the country’s nuclear weapons programme. To be sure, India is not alone in believing that a nuclear weapons programme is the entry ticket into the ‘club’ of self-proclaimed ‘great powers’— Pakistan, the UK and France have over the decades come to the same (arguably wrong) conclusion. Speaking of Pakistan. Pakistan’s annual GDP per capita is even lower than India’s (between $1,300 and $1,500), and according to the large majority of Pakistani scholars and policymakers, the reason why Pakistan ‘must’ allegedly have a nuclear weapons programme is because India has one. Obviously—and this is something India and Pakistan have very much in common—these are Pakistani scholars working in think tanks and research institutes with close ties to the government and/or the Ministry of Defence. The reason why many Pakistani think tanks are headed by

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retired military generals who instead of actually retiring opt for a second career of professionally and tirelessly warning of the alleged military and security threat posed by India—the country, which in their view can hardly wait to launch a nuclear attack against Pakistan. To be sure, retired Indian generals heading Indian think tanks argue along the same lines: the ‘rogue’ or ‘terror’ state Pakistan is about to attack India, as far as they are concerned. Indian policymakers therefore today obviously mention Pakistan when they explain the alleged ‘necessity’ to spend billions on maintaining a nuclear weapons programme but also add China and the (arguably) real and credible Chinese military threat to the equation. And here it comes full circle. India fears a nuclear attack from Pakistan and China and Pakistan fears a nuclear attack from India and aligns with China to avoid being attacked by India. Hence, it all makes sense, albeit only if one is a cynic and a believer that something ‘good’ could ever come from violence in general and nuclear deterrence in particular. Is India at least a Western ally then? Yes. Well, at least sometimes and when it suits its interests and when it needs Western, above all US, support for policies aimed at deterring and indeed containing Chinese territorial ambitions and expansionism in the Indo-Pacific in general and the Indian Ocean in particular. When on the other hand support for Western policies aimed at exerting political and economic pressure onto countries like Russia or China hurt India’s economic and security interests, India’s nationalist and populist Prime Minister Narendra Modi and its government hide behind the (alleged) fact that the poor and developing economy India cannot afford to support economic sanctions imposed onto countries which provide the country with badly needed cheap energy and weapons. It goes without saying that India’s refusal to condemn Russia’s invasion of Ukraine (by abstaining from a February 2022 UN resolution calling Russia’s attack on Ukraine an invasion) in return for Russian oil and gas at discount prices is meant in this context. While policymakers in Moscow (and China for that matter) must have cheered India’s decision not to confront Russia and instead significantly increase energy imports from Moscow after Moscow’s attack on Ukraine, the West had to find out that a debt paid is a kept friend in its relationship with India. Or: India deciding to let business rule over principle— a decision it was according to its own accounts entitled to take as a ‘developing economy’ (in economic crisis) depending on Russian gas and oil (and weapons for that matter). In such cases, i.e. India referring to itself as ‘developing economy’ when it suits its interests, the otherwise arch-enemies India and China usually align and behave in a similar fashion: playing the ‘developing economy’ trump card when there are emissions to cut, markets to open, environmental legislation to adopt and intellectual property rights to endorse and adopt. Fortunately, at least from a Western perspective, India’s global weight and influence in international politics and security are limited enough for its decision not to adopt sanctions against Russia not to matter too much. Put bluntly: it would have been good if India had supported Western sanctions on Russia, but the fact that it did not, mattered only so much. India is quite simply globally not important and influential enough and the West and its analysts understand that Prime Minister Modi is in the business of pleasing and flirting with democrats and fellow semi-democrats and nationalists according to the interests and issues of the day. To be sure, Western criticism was at the time relatively muted, and

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it can be speculated that Europe and the US felt that they do not have the luxury to point the finger too much at India in order not to provide China (and Russia for that matter) with the ‘ammunition’ to declare that the West does what the West (allegedly) always does: putting pressure onto countries which choose not to endorse Western policies and sanctions. Even if reality is decisively different than Chinese and Russian propaganda today suggest, propaganda spread through the kind of social media ordinary citizens in Russia and China do not have access to would have had a field day picking up on the alleged Western ‘bullying’ others into submission. All said and done, however, India could at the time in the West not be counted on as reliable partner as part of aWestern strategy and policies to deter and punish military aggression like the kind we have seen in Ukraine. All Indian attempts to justify its abstention when the very large majority of the UN General Assembly unequivocally condemned Russia’s attack on Ukraine might have had relevance in an Indian domestic context, but what really counted beyond domestic pro and contra presented by experts in India—the real and self-declared kind likewise—was the fact that India—at least from a Western perspective—chose to position itself on the wrong side of the argument. In sum, looking from the outside in, it is not a rosy picture in India—in fact, it is the very opposite of that: the world’s 5th largest economy with a depressingly low GDP per capita and staggering levels of inequality run by policymaking elites and policymakers detached from Indian day-to-day realities who seem to believe that nuclear deterrence and great military power ambitions are more important than lifting millions and even hundreds of millions of ordinary Indians out of relative or absolute poverty. And the contrast could not be any bigger: India is the world’s 5th largest economy, worth roughly $3 trillion, bigger than the French and Italian and British economies, while Indian average GDP per capita amounts to the aforementioned $2.000. In fairness, it should not go unmentioned that India’s economic and structural reforms adopted by then Prime Minister Manmohan Singh in the 1990s have undoubtedly facilitated India’s integration into the global economy and global trade flows. However, while the reforms—like economic and structural reforms in China in the 1980s and 1990s—have created the structural basis for a nascent Indian middle-class, the tangible and measurable benefits of Indian decade-long economic growth do not yet reach nearly enough ordinary Indian citizens and workers. To be sure, Indian scholars and policymakers counter such and related criticism by citing and referring to the ‘dangerous’ neighbourhood the country finds itself in, leaving India allegedly no choice but to arm itself with nukes in order to be prepared to militarily confront Pakistan and China. Something privileged Europeans, the argument in India typically goes, living in highly developed democratic countries know very little about. Maybe, but the fact remains that the resources invested in defence and the armed forces in India (like in Pakistan) are very disproportionate to the resources invested in poverty eradication policies, education and social welfare. And there is more on India’s domestic agenda which is not in any way compatible with India priding itself with being the world’s largest democracy: Prime Minister

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Modi’s restrictive and indeed oppressive policies towards the country’s 200 millionstrong Muslim minority. Instead, Modi’s track record of adopting anti-Muslim policies since he first took power in 2014 is arguably the very opposite of being worthy of a ‘conventional’ democratic country guided by inclusiveness, religious freedom and tolerance. In fact, Modi’s discriminatory policies towards the country’s Muslim population are in the literature cited as part and evidence of India’s ‘democratic backsliding.’ Policies adopted in formally democratic countries but in substance and consequence policies that should not be adopted in democratic countries embracing values and principles such as freedom of speech and expression, the protection of human rights, freedom of religion etc. Countries such as Turkey, Hungary and Poland too are currently typically cited in the same context. Needless to say that the analysis of Indian foreign, domestic, trade and investment policies in this volume is not exhaustive. In fact, it is not anything like that and there is no red or common thread to be found in this volume either. Instead, this volume covers numerous areas and fields of India’s domestic and foreign policies as well as trade and investment policies (for further details on who is writing what in this volume see Valeria Piacentini’s preface in this volume). As mentioned above, the perspectives and the nature of conclusions of what India does and does not do on the domestic and foreign policy fronts are several, and what Indian authors write about what India is and does is decisively not the same as what this volume’s non-Indian authors and scholars conclude. But that is the beauty of it: academic freedom as practiced by a group of very prolific international scholars writing in one and the same edited volume.

A Rising India in the Crossfire of Competing Grand Strategies Gautam Chikermane

Abstract This chapter argues that while the rise of China will not be peaceful and will create threats to Asian nations in general and India in particular, the actions of India as a provider of security in the region will stand on the shifting sands of changing global alignments and competing grand strategies. As a country that will become the world’s third-largest economy within the coming decade, India will need to create and pursue its own grand strategy within the ongoing crossfire of interests between great power, the US, and emerging power, China. Further, it will also need to fine-tune its actions with the grand strategies of other geographies, notably the EU, Russia, and Pakistan. Above all, India will have to do this as a developing nation, i.e., while bringing prosperity to its citizens. Arguing for India to put in place its grand strategy, this chapter offers the large pillars and big priorities on the chessboard of statecraft upon which to situate it. Part 1 introduces the context and the theme of grand strategy and argues for its clear articulation by India. Part 2 explores the specific grand strategies of China, the US, the EU, Russia, and Pakistan, which India will ward off, embrace and deal with over the next decade, and possibly till the middle of the twenty-first century. Part 3 offers streams of analyses around which India will construct its grand strategy, within which China and its proxy Pakistan will be hostile forces, the US- and the EU-led will be new alignments in the Indo-Pacific, Russia a neutral actor, and the economy a strategic input supporting India’s rise.

1 Introduction The first half of the twenty-first century will see the re-emergence of grand strategy as a precursor to the creation of new world order. This new order will be shaped by two competing forms of governance: democracy and authoritarianism. The fundamental designs of these two opposing ideas will be created by the US and China. United by G. Chikermane (B) Observer Research Foundation (ORF), New Delhi, India e-mail: [email protected] New Delhi, India © Springer Nature Switzerland AG 2023 S. Beretta et al. (eds.), India’s Foreign Policy and Economic Challenges, Global Power Shift, https://doi.org/10.1007/978-3-031-20270-4_2

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democratic voices, the Washington design will be complemented by Europe, Japan, India, and Brazil; led by the Belt and Road Initiative (BRI), the Beijing doctrine will attempt to amalgamate 60 countries (Chatzky & McBride, 2020), including Pakistan, North Korea, most of landlocked Central Asia, ASEAN nations through the recently signed Regional Comprehensive Economic Partnership (RCEP) agreement (Association of Southeast Asian Nations, 2020) and Russia (Zemánek, 2020). From the strategic debris of the twentieth century including a failing United Nations, but within the broad confines of these two bipolar ideologies, will emerge a multi-polar world and redefine the next 50 years of international relations. The parts that will comprise and complete the world will be smaller nations, each of which will trade its universe of national interest for money, power, security, or all three. A global convergence of consensus will be difficult to build, even within ideological or geographical subsets—the UK and Germany will approach the Washington design differently1 ; the direction of African nations (Lokanathan, 2020) and Kazakhstan (Cekuta, 2020) as regards the BRI will vary. A complex mesh of interests will simultaneously collide and complement one another, each in a state of constant flux. Some countries, such as South Korea, will embrace bits of both—Beijing’s Belt and Road Initiative (BRI) and the latest RCEP agreement on the one side, and Washington’s Indo-Pacific strategy on the other (Kim, 2018). The analyses that follow will reimagine the United Nations (UN) (Chikermane, 2020a, 2020b), reform multilateral institutions such as the IMF and the World Bank (International Monetary Fund, 2020), reshape global groupings like International Monetary Fund (2020) the idea of a G10 (G7 plus India, Australia, and South Korea)2 and force rethinks on bilateral relations between nations. This quad of changes will form a whole not very different from Brownian motion3 —each nation, grouping, institution, and bilateral, of different shapes, sizes, and stances, bouncing its interests off the others, adapting to changing pressures, morphing, and resurfacing to deliver security. Together, these emerging actors will play key roles in the bigger amphitheatre of international politics. This constant motion of interests will be led by grand strategies of nations, big and small. The pomposity of the word ‘grand’ aside, the lead role in this theatre will be played by the grand strategies of the US and China, both of which will influence the creation of grand strategies of other countries. Those nations that have grand strategies in place will consolidate them; they will adjust to the new realities of economic growth, power shifts, and changing priorities. The US (Brands, 2018), 1

On excluding Chinese firms from supplying 5G equipment, for instance, the UK has followed the US line, while Germany has not. 2 See Glosserman (2020) and Brattberg and Judah (2020). 3 See Feynman (1963) ‘Now if the atoms are always in motion, say in water, and we put a big ball of something in the water, a ball much bigger than the atoms, the ball will jiggle around—much as in a push ball game, where a great big ball is pushed around by a lot of people. The people are pushing in various directions, and the ball moves around the field in an irregular fashion. So, in the same way, the “large ball” will move because of the inequalities of the collisions on one side to the other, from one moment to the next. Therefore, if we look at very tiny particles (colloids) in water through an excellent microscope, we see a perpetual jiggling of the particles, which is the result of the bombardment of the atoms. This is called the Brownian motion.

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China (Stenslie & Gang, 2016), Russia (Monaghan, 2020), the EU,4 and recently Australia (Wesley, 2016), belong to this set. Those that don’t have a grand strategy in place will be forced to think about crafting them within the boundaries of their ‘means and ends’5 —strengths, weaknesses, and abilities to contribute to and work within broader frameworks of partnerships. The ASEAN and MENA (Cordesman, 2016) nations, and to some extent Japan (Wilkins, 2014) come under this head. As does India—it has no visible or clearly articulated grand strategy. There are several debates on and addressing recent changes in and around internal security6 and external security (Arunkumar & Sakthivel, 2017), economic security (Debroy, 2015a) and energy security,7 military affairs (Tarapore, 2020), including military technology and communications8 and strategic affairs (De Spiegeleire et al., 2017), all of which feed into India’s international relations and foreign affairs (Malone et al., 2015). Pushed by aggressive neighbours, India has a 75-year-long history of approach to and experience with war—four with Pakistan—in 1947–1948 (Dixit, 2002), 1965 (Gates & Kaushik, 2018), 1971 (Raghavan, 2013a, 2013b), and 19999 and one with China (in 1962) (Raghavan, 2010). Swept by global politics but keen to stay independent, nonalignment can be seen as India’s grand strategy throughout the twentieth century. Some conversations today seek to extend this grand strategy (Khilnani et al., 2020), while others hope to end it (Tellis, 2012). Labels aside, India clearly leaned towards the former Soviet Union during the Cold War period (Foshko, 2011), and is in the twenty-first century, within the superstructure of ‘strategic autonomy’10 tilting towards the US.11 Driven by aggressive policies and actions of Beijing and Islamabad, individually and/or together,12 India has become the world’s second-largest importer of arms to strengthen defences on its northern and north-western borders (Wezeman et al., 2019). However, there is no clear grand strategy in sight. On the peace side, India has done better. Plagued by poverty for four decades, it has had a shorter but impressive 30-year success with economic reforms that began in 1991,13 and have been continuing despite changes in governments (Chikermane, 2018), which have significantly reduced the malaise through increased growth rates and broadened the base-level economic security for hundreds of millions of Indians.14 4

Selected Presentations (2013) Forging an American Grand Strategy: Securing A Path Through A Complex Future. From A Symposium at The National Defense University (2013). 5 Tactics, operations, military strategy, ‘grand strategy’, and policy are all essentially the same thing—processes of interrelating means and ends—at different scales of time, space, and numbers of people and resources involved. See Bassford (2007). 6 See Manoharan (2013) and Kumawat and Kaura (2018). 7 See TERI (2015), Vijay Kelkar (2009) and Parikh (2010). 8 See Chikermane (2019) and Frickle (2020). 9 See Malik (2009). 10 See Jaishankar (2019) and Shivshankar Menon (2020). 11 See Smith (2020) and Mohan (2020). 12 See Vij et al. (2018), Abhijnan Rej (2028), and Lt Gen (Dr) Rakesh Sharma (Retd.) (2020). 13 Ministry of Commerce and Industry, Government of India (1991). 14 See Bhagwati and Panagariya (2013) and Anklesaria Aiyar (2016).

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Driven by a sharp rise in economic activity, India’s energy security is a stable work in progress (Bairol, 2020). The discourse on electricity, for instance, has shifted from shortages to surpluses with 750 million citizens gaining access to it between 2000 and 2019 (Ibid., p. 13). India today is an ‘emerging leader in the domain of climate action’ and with the US is widening its debate on climate change and policies to tackle climate change (Verma & Saran, 2010). A lot more needs to be done, of course, but the energy security infrastructure, comprising a global diversified basket of import as well as its domestic consumption management through tax policies, is in place. On internal security, while the number of violent incidents has decreased, a comprehensive and coordinated approach is needed (Kumawat & Kaura, 2018). As silos all these steps have delivered individual solutions. What is lacking is the strategic thought that bridges these issues and merges them as components supporting India’s grand strategy. The context in place and against the background of the need for a grand strategy, the forthcoming period will be one of turmoil, flux and reactive tactics of other actors. India will find itself in the crossfire of several kinds of grand strategy enacted by various different geopolitical actors. First, of immediate concern will be the grand strategies of a hegemonic China and its proxy Pakistan. Second, to counter China, India will engage more deeply with the grand strategies of the US, Europe and allied nations like Japan, Australia, and South Korea; these will be similar to India’s but not identical. Third, India will engage with the grand strategy of the Russian Federation, whose bilateral relationship with both India and China will force a balancing act between the two around the export of arms to India, and arms and gas to China. And fourth, in addition to a grand strategy, India will need to engage with alignments, not necessarily in the nature of grand strategies, of other nations such as member states of ASEAN, MENA and Africa. These will use any and every leverage they have— geography (Maldives and Mauritius), resources (Saudi Arabia, Iran and African nations), religion (Turkey and Malaysia), terror (Pakistan)—and play pivotal roles in this complex play of forces. It is in between these mostly conflicting but sometimes harmonious coalitions of interests, and as a build up to its democracy-led economy-driven self-becoming, that India will devise its grand strategy. The term ‘grand strategy’ is fuzzy and evolving. Although it began with military thought and war, it has expanded to embrace civilian policy and peace (Heuser, 2010), giving up Carl von Clausewitz’s nineteenth century hard and limiting notion that ‘war is thus an act of force to compel our enemy to do our will,’ (Von Clausewitz, 2007) in the changed twenty-first century paradigm. The fighting services, after all, cannot sustain without economic resources and manpower, they cannot exist without diplomacy, they cannot simply pursue war because the end result is peace.15 Further, globalisation of cultures, economies, and trade has added to leaders’ burden of protecting national interests. A grand strategy, therefore, becomes a crucial institution with which to use various instruments, from trade and markets to diplomacy and military, to articulate and execute these interests (Biddle, 15

Liddell Hart (1991) This book offers a detailed articulation of ‘grand strategy’ and its various arms.

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2015). Because domestic demands are greater, societies more complex, and the need to extend outside borders higher, grand strategy has mostly been the currency of discourse of large economies and great powers such as the US and the Soviet Union in the post-World War II years, and the US, China, and Russia today. As India enters this league of power and economy during the 2020s, it will have to do so by situating its aspirations and powering its rise by its own grand strategy. While there is extensive literature on what a ‘grand strategy’ is, the definition keeps evolving. From managing wars to managing peace, for instance (Matthews, 2004). Or, as in the twenty-first century, from managing physical intrusions to digital ones (Chikermane, 2019). Or, the combination of national resources and capabilities— military, diplomatic, political, economic, cultural, and moral—that are deployed in the service of national security (Bajpai et al., 2014). All of these are valid, but for the purpose of this chapter, Meghan L. O’Sullivan’s definition captures the essence: ‘A grand strategy is an all-encompassing concept which guides a country in its effort to combine its instruments of national power in order to shape the international environment and advance specific national security goals. It is generally considered to have three parts: a vision of a desired outcome or set of objectives (ends); instruments or tools (ways) by which these goals are pursued; and the resources (means) available to apply to the effort’ (O’Sullivan, 2013a, 2013b).

2 A Brief Illustration of Country-Specific Grand Strategies This section gives us an overview of the grand strategies of five players that affect India—China, the US, the EU, Russia, and Pakistan. Each of these has a different form of governance. China, Russia, and Pakistan are authoritarian with unique characteristics. China is communist, centralised, and authoritarian; Russia is centralised and authoritarian; Pakistan is run by the army-terrorist deep state, making elected governments insignificant. The US and the EU are both democracies, with distinctive levels of imperfection; the democratic expression of Sweden and Denmark is different from that of Italy and Greece; all of which have an ocean’s divide between the democracy in the US.

2.1 The China Grand Strategy The grand strategy of China sits on four pillars. First, to become the only power in Asia, leaving no space for the US and other large democracies such as Japan, India, and Australia. As a corollary, it seeks to weaken US influence in the region, as it does with India in countries around its borders. It does so by undermining strategic credibility—the example of Doklam in Bhutan, from which finally both China and India retreated (Mastro & Tarapore, 2017), is the latest such tactic. Second, to convert its economic power into military clout and push its grand strategy. With its growing

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economy, it binds Asian nations to itself, as a market as well as an investor. The Belt and Road Initiative that it now seeks to export to the West is a step in that direction. Third, to secure its authoritarian model of governance and the supremacy of the Chinese Communist Party (CCP) protected by the People’s Liberation Army (PLA). This it does by delegitimising democracies (Hilpert, 2020) and freedoms, and thereby weaponising everything from trade and technology (Chikermane, 2020a, 2020b) to its economic flagship BRI (Russel & Berger, 2020). And fourth, to ensure domestic stability at any cost, from which it seeks to revive its mediaeval instincts of territorial, financial, and now communications influence and power. The human rights abuses of Uighur Muslims in the Chinese province of Xinjiang and the silence of the Islamic nations on the issue is testimony to that grand Chinese success (Cohen, 2020). Essentially, keep the primacy and power of the CCP at the cost of its own citizens on the one side and a global expansionism of all flavours on the other. The incumbent ‘Chairman of Everything’ (The Economist, 2016) President Xi Jinping has accentuated the fault lines of China’s historic ambitions to regain lost pride and drive his grand strategy.

2.2 The US Grand Strategy The ‘secret Anglo-American plan for global domination,’ (Mead, 2010) has several ways, paths, and means to achieve it. Unlike China’s straight-line approach, the grand strategy of the US, as in all democracies, needs to function within limits. For instance, in hindsight and with 20/20 telescopic vision, the US support to the rise of China is possibly the superpower’s grandest grand strategy blunder. Lulled into strategic sleep by the seduction of markets, low-cost products and valuations, and above all, the grand dream of democratising China as an effective counter to Russia, the US got lost in the complexities of its grand strategy and ignored China’s. Functioning within the institutions of domestic politics, the US grand strategy is created by individual liberties, voted into action through democracy, through an ‘invisible hand of peace’ (McDonald, 2009). It is directed outwardly through diplomacy, information, military, and the economy, also known as DIME, with evolving acronyms such as MIDFIELD (military, informational, diplomatic, financial, intelligence, economic, law, and development) replacing them (Scott, 2018). Because it has democracy as its fundamental platform, the grand strategies of the US changed with successive administrations as well as with the changing states of the world and its interests. Because it has the rule of law as its fundament, some argue that the country’s constitution is the source of its grand strategy (Kuehn, 2010). The ability to use domestic power16 to influence global events17 such that they, in turn, strengthen the US in a virtuous

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This can be domestic markets, resources and stability. These include domination of the US in the UN, the G20 and other multilateral agencies, as well as all bilateral agreements.

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cycle, irrespective of values18 but always keeping the US interests in mind, energy for instance (O’Sullivan, 2013a, 2013b), alongside the protection of US territory, its citizens, its system of government and economic well-being (Hooker Jr., 2014) can be seen as the gist of the US grand strategy. Like it or not, ‘it works’ as Mead concludes (Mead, 2010).

2.3 The EU Grand Strategy The grand strategy of the European Union, though similar to the US and leaning on it for security, is a complex idea functioning within the opportunities as well as the limitations of 27 sovereigns, and the alliance crisis (Lute & Burns, 2019) in the North Atlantic Treaty Organization (NATO). Economically powerful EU member states (Germany, France, Italy, Spain, and the Netherlands), comprised 69.6% of EU’s $13.9 trillion GDP, while the EU’s smaller member states, including Slovakia, Luxembourg, Bulgaria, and Croatia, contributed less than 1% to the EU’s GDP (Eurostat, 2020). Some of them are relatively strong (France through United Nations Security Council membership, Germany with its powerful economy), while others are relatively weak. Coalescing such diverse nations into a cohesive grand strategy alongside sovereign interests that are not always in synch is not an easy task. But it is fair to say that strengthening and exporting ‘values’ such as liberalism, individual liberties, and freedoms and other values inherent of open societies, while managing collective security could be termed as its grand strategy. Another aspect of the EU’s grand strategy is its ability to manage collective centripetal force of values while allowing for centrifugal forces of culture and economy to flourish. Some argue the EU’s invisible grand strategy could be a mix of three basic components at three levels of analysis and the implementation of its (largely liberal) strategic goals.19 Others place it within six components—security in the neighbourhood; enlargement to areas of interest; engagements on trade, diplomacy, and aid; involvement in regional conflicts; support to multilateralism through engagement with global institutions; and conflict resolution and crisis management as a security actor.20 Within the EU, Germany has expanded its grand strategy to include the Indo-Pacific region (The Federal Government of Germany, 2020); other countries, such as France (Ministère Des Armeés, Government of France, 2019) and the UK (2019) (now outside the EU), are emerging. Because the EU grand strategy is fragmented by its 27 member states, 18

The support to Pakistan over India in the 1970s, to China in the 1980s to 2000s, and a stronger presence in the Indo-Pacific through Quad in the 2020s reflects the changing interest equations of the US. 19 Smith (2011) Physical security; economic prosperity; and value projection. Second, it analyses the content of the EU’s grand strategic goals at three levels of analysis: intra-EU; regional (or neighbourhood); and global. Finally, it analyses the EU’s implementation of its (largely liberal) strategic goals, particularly in terms of how they might compete with those of other global actors, such as the United States (US). 20 See Council of the European Union (2003) and European Union (2014).

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until the strategic cohesion is more coherent and focussed, this chapter considers it half a grand strategy, or work in progress, when dealing with EU collectively.21

2.4 The Russia Grand Strategy The Russian Federation has been through several rounds of grand strategy. From the Cold War years to Perestroika and ‘totalitarian state’ to a ‘democratising state,’ (McFaul, 1999) this resource-rich, ideology-shifting former superpower has seen its highs and lows. Because Russia’s foreign policy has been personality-driven, what is important today and for the foreseeable future is the vision of incumbent President Vladimir Putin. Like China’s Xi, Russia’s Putin leans on ancient grandeur and pride,22 which in turn drives his grand strategy. A hint of that strategy sits in Putin’s June 28, 2000 speech, during which he talked about forming a good-neighbour belt along the perimeter of Russia (Federation of American Scientists, 2000) that is similar but not identical with former Russian President Dmitry A. Medvedev’s version of such a belt,23 and has evolved since, with the word ‘perimeter’ removed.24 But as observers have noted, this doesn’t hold back Russia from re-integrating the states of the former Soviet Union (Wisniewska, 2013), around its perimeter—the face of which is Eurasian Economic Union (Mankoff, 2013), a grouping that merges the idea of re-integration and counters the economic expansions of China and the EU. As far as re-integration goes, Putin is not shy of using all the forces of power at hand—the military attack on Georgia in 2008, the multi-dimensional but non-military assault on Kyrgyzstan in 2010, and the invasion of Ukraine and seizure of Crimea and other territories in 2014 (Starr & Cornell, 2014). On the economic side, diversifying its gas exports from the EU member states without compromising the gas prices in order to rebalance its China relationship is another aspect of Putin’s grand strategy, of which the $400 billion Russia–China gas deal is a part of a tactic (Weitz, 2014). Finally, 21

The slow coming together of EU member states to ban Chinese equipment in their respective 5G rollouts shows a rising unity; but with Germany and France still not part of that digital security action it is difficult to frame what the collective grand strategy of the EU is. If even one of them allows Chinese equipment, it will impact the digital security of the rest of the EU member states. 22 At his swearing in ceremony on 7 May 2004, Vladimir Putin said: “We all are the inheritors of Russia and its thousand years of history, the inheritors of this land that has given birth to exceptional sons and daughters, workers, warriors, and creators. They have passed down to us this huge, great state. There is no doubt that we can draw strength from our past. But even the most glorious history is not enough to ensure us a better life. Today’s generations of Russians must reinforce this grandeur through their own acts.” The Kremlin (2004). 23 “The Foreign Policy Concept of the Russian Federation Approved by Dmitry A. Medvedev, President of the Russian Federation”, Permanent Mission of the Russian Federation to the European (2008) 24 “The Foreign Policy Concept of the Russian Federation Approved by President of the Russian Federation Vladimir Putin,” The Embassy of the Russian Federation to the United Kingdom of Great Britain and Northern Ireland, 30 November 2016, accessed 26 November 2020, https://www. rusemb.org.uk/rp_insight/.

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Putin has kept Russia’s defence industry going, through research, investments, and exports. The one point Putin has ignored in Russia’s grand strategy is economic prosperity, with its GDP standing at $1.7 trillion (after having touched a high of $2.3 trillion in 2013 and fallen to as low as $1.3 trillion), close to where it was in 2008 (World Bank, 2020a, 2020b). Finally, like China, Russia is suspicious of the US and as a member of the United Nations Security Council, wields a counter-influence there.

2.5 The Pakistan Grand Strategy For India, Pakistan is nothing more than a noisy, strategic nuisance. An otherwise insignificant entity in the larger scheme of things, a nuclear state, a global terror hub that uses terror as state policy and terrorists as agencies of executing that policy against India, the grand strategy of Pakistan has been Islamic jihad as a philosophy, Kashmir as an excuse and lending its geography to other powers (the US in the Cold War years and China today) as a revenue model. It has fought and lost four wars with India—in 1947–48 (Dixit, 2002), 1965 (Gates & Kaushik, 2018), 1971 (Raghavan, 2013a, 2013b) and 1999,25 while its terrorist camps have been destroyed twice in recent past—in the surgical strikes (Chadha et al., 2016) in September 2016 following Pakistani terror attack at Uri, and in Balakot26 in February 2019 in response to Pakistani terrorist attack in Pulwama. With these, ‘India has traded strategic restraint for strategic risk manipulation’ (Lalwani et al., 2020). With jihad as a central component of Pakistani grand strategy (Kapur, 2017), not just India but the world at large has been a victim of terror nurtured by and in Pakistan. But it has also brought one benefit to the country: domestic politico-religious cohesion. Beginning in 2019, however, its nuclear bluff has been called out through the Indian Balakot airstrike. Pakistan will continue to unleash proxy wars, either on its own accord or on behalf of its ‘iron brother’ China. But religious rhetoric has a finite shelf-life and this strategy is now endangering the survival of the Pakistani state. Bending before one terrorist group after another, we can see Pakistan heading towards becoming a failed state, and its grand strategy imploding.

2.6 Seven Megatrends that will Influence Grand Strategy in the Twenty-First Century Complexifying these geography-specific grand strategies are tectonic shifts that will become seven megatrends in the twenty-first century. First, despite the benefits to all economies through the 1970s onwards, the post-COVID-19 world is seeing a 25 26

See Malik (2009). Government of India (2019).

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rising political discontent with globalisation (Farrell & Newman, 2020), impacting international relations, and global politics. Second, as a corollary, the rise of nationalism is influencing domestic politics; nation-first narratives are outshouting oneworld conversations (Schou Tjalve, 2016). Third, ideologically, the economic success of China is delegitimising democracies and empowering authoritarian regimes, by functioning within extant institutions (Jones, 2018). Fourth, the intrusive nature of modern technologies, from communications and digital life to artificial intelligence and neurosciences, is being weaponised; China leads this change in 5G equipment (Chikermane, 2019). Fifth, the economic shift to the east will be further accentuated by a fundamental demographic shift27 ; ageing societies in Europe, China, and Japan on one side and younger societies in MENA and India on the other are creating global demographic imbalances; medical technologies could create an artificial equilibrium for a few decades by extending healthy lifestyles of older people, but finally human frailties will catch up and impact migration. Sixth, combined with power in the hands of the informed, migration trends will be driven by knowledge. This will create its own set of strategic bridges, say by turning universities into geopolitical objects of competition (Moisio, 2018). And seventh, information technologies have democratised governance discourses and raised challenges of privacy, security, and narratives (European Commission, Joint Research Centre, 2020); this will create echo chambers of political discourse and carve out geopolitical imbalances by slowing down governance decisions in liberal democracies, and strengthening leaders of authoritarian regimes, who control such freedoms (Rød & Weidmann, 2015). These seven shifts will need to be factored into domestic and global debates on the consolidation of a more widespread rules-based international order (Jain and Kroenig, 2019). This centripetal force of global cohesion and the ongoing flux around it raises the challenges for India to write its own grand strategy.

2.7 India in the Crossfire of Grand Strategies and Megatrends With Xi steadily and strategically taking China towards what looks like a Chinese ‘rogue state’ openly hostile to India, managing and countering Beijing’s grand strategy becomes New Delhi’s first goal. Xi’s China is to Modi’s India what Putin’s Russia is to Biden’s US. Looking at the two authoritarian regimes from two ends of the planet, geographical and strategic, there is an inversion of perceptions regarding these two nations. For the US, Russia is a rogue state, not China (Dobbins et al., 2018); for India, China is a rogue state but not Russia. While the narrative of what a rogue state is has been defined by the US establishment, the view from India is 27

“The transformation, which is often called ‘global aging’, is not a transitory wave like the baby boom many affluent countries experienced in the 1950s or the baby bust they experienced in the 1930s. It is, instead, a fundamental shift with no parallel in the history of humanity.” See Jackson et al. (2008)

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simple: China is a rogue nation that individually and collectively with another rogueterrorist nation Pakistan consistently acts against the interests of the Indian people, using all means at its disposal that include, but are not restricted to, the weaponisation of trade, technology, terrorists, and the abuse of its position as a member of the UNSC. From India’s perspective, Russia is today a friend and has been a stable supplier of weapons for decades, particularly when the US leaned towards Pakistan and against India to accomplish its own strategic objectives during the Cold War. To rephrase the definition, one nation’s rogue state can be, and often is, another nation’s ally. If China’s assault on the US were not simply financial or technological but physical (as it is in the case of India) and its location not separated by 11.000 km of blue waters of the Pacific Ocean but attached to it with a 3.488-km-long border (as India is), the US would not have handheld China into the WTO, and it probably would have labelled China a rogue state early on. Furthermore, a post-Xi Beijing may, given the economic, political, and strategic implications of China’s ongoing isolation, choose to leave geopolitical roguery behind and start afresh. In the second decade of the twenty-first century, therefore, India’s grand strategy can be seen to be standing in the crossfire between the unpredictable US and aggressive and rogue China.28 But grand strategies are more stable entities than the whims of an autocrat or shifts in democratic demands. Intrinsically, grand strategies are constructed with capacities to withstand megatrends, endure technological leaps, adjust for strategic threats, and changes in citizen expectations. Thus hanging India’s mega engagements with the world on the ongoing tensions between the US and China could be tactical, not strategic. More so because the equations between the two powers may change—the US may reduce pressure in return for lesser intellectual property theft by China, or Beijing may give in to less tech intrusions through 5G equipment to get access back to the US and the EU markets. None of that will or should change India’s grand strategy towards China. The window through which China looks at India is different from the one it engages with the US. To China, the US is a global competitor, and India is a regional one. The US is the stronger sovereign, India the weaker. The US is half a world away, and India stitched with a 3.488-km-long border to China. India is China’s biggest strategic-economic-moral challenge in the region. India not joining the expropriative BRI or the exploitative CPEC, both grand projects of Xi, is unacceptable and needs (in Beijing’s view) punishing as it makes Beijing and the CCP look weak. Worse, while India not joining is bad enough, India has created a moral telescope with which to view these two China initiatives that are forcing other countries too to rethink their stances. Finally, everything else on one side and crossing the red line by attempted border intrusions on the other will ensure that in the foreseeable future, there is no major constituency left in India today that has a favourable view of China. In a democracy, this matters. And this will be reflected in India’s grand strategy. 28

At the time of writing, Donald Trump was on his way out and Jo Biden on his way into the White House. Trump was an unpredictable, erratic and impulsive deal-maker. How Biden navigates this area during his presidency remains to be seen.

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For the US, India is a partner of scale bound to it by several threads of values. India is the world’s largest democracy, Asia’s third-largest economy, a strategically located geography that can be and is a bulwark against the two biggest actors of destruction—an authoritarian China and Islamic terror hub Pakistan—both of which need to be contained. As part of its grand strategy, the US used Pakistan and shunned India when the challenge was the Soviet Union during the Cold War. Following the implosion of the Soviet Union, the strategic threat from Russia has reduced, while that from China increased. Accordingly, China’s ‘iron brother’ has been discarded and a hand of friendship and a deeper strategic relationship with India was offered. Several analysts believe India must grab this offer with both hands. Perhaps at a tactical level that would be a sensible thing to do, and may even happen. But not as part of India’s grand strategy, which must evaluate US interests, resonate with it when required, and have the flexibility to withdraw when necessary. This is not nonalignment, but ‘strategic autonomy’. As far as the EU grand strategy goes, it is not one that meddles in India’s affairs or has any regional ambitions of note. The first strands of an Indo-Pacific presence have come from Germany and others, notably France, will likely join. No longer a member of the EU, the UK too will add its weight here. All these are riding the tailcoats by the decision of the US to contain China in the South China Sea and as strategic investment for the Indian Ocean region that spans from Australia and Pacific Rim countries to the East to the African coast on the West. The strategic coalition with the US in the South China Sea is as much to safeguard trade routes as to decouple from China’s supply chains. Securing the area, therefore, is both, a geopolitical as well as geoeconomic imperative. The grand strategy of India will intersect with that of the EU’s on three counts. First, the EU as a strategic partner in the Indo-Pacific. Second, the EU as a market and a provider of capital. And third, the EU as a destination for peaceful and integrating Indian high-tech workers amid an ageing population and as a productive, tax-paying counterbalance to immigrants fleeing from, but recreating, Islamic terror there. In the case of Russia, Putin has been able to manage a strategic-economic balance between India and China. It supplies arms to both countries, but arms sales are skewed towards India (27% of its arms exports) against China’s 14% (Wezeman et al., 2019). This is significant, as Russia is the world’s second-largest arms exporter (21% share), after the US (36%) and far ahead of France (6.8%), Germany (6.4%), and the UK (4.2%) (Ibid.). Given that the arms industry is Russia’s second-largest source of revenue after natural resources, particularly gas, its economic interests as well as its grand strategy will ensure that it remains a neutral party to India. This will continue in the foreseeable future. After that, the democratising forces of Russia could force a diversification of economic activity. Here both countries will need to work closely— India to secure its arms and Russia to remain diversified. This relationship may, at times, create small sparks of strategic friction between the US and India, but in the overall scheme of things and broader grand strategy objectives, they will be par for the course of engagements between mature democracies rather than deal breakers. The final, or possibly the first, base of India’s grand strategy will lie within India. As a relatively poor country (its per capita income is $2.104, compared to

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China’s $10.262, Russia’s $11.585, the EU’s $34.843, and the US’s $65.118) (World Bank, 2020a, 2020b), India will have to punch way above its economic weight while devising and executing its grand strategy. Sustained high economic growth is already a political necessity, it will now have to become a grand strategy goal. In order to do that, it will need to secure its energy needs; what helps here is that the cost of energy has fallen and is likely to remain low, while India is gradually gaining scale in alternative energy sources and pushing policy initiatives there. Higher economic growth cannot come without a change in business laws that need to become easier and catalysts for wealth creation rather than continue with a past that saw entrepreneurs as a necessary evil. The entire edifice of legislating laws, both at the central level and in federal states, needs a grand strategy rethink. Keeping inflation low will be a grand strategy goal, and not merely political or economic objective—it is the best tool to make the best of a low starting per capita income and preventing a financial burden on the poor. Finally, India needs a grand strategy consensus within the political establishment. For this, India will need to create new institutions that stand the test of changing governments and shifting ideologies within the grand strategy continuum. Politically, this will be India’s biggest challenge. Through all this, India needs one crucial introspective conversation that will define not only the country but the twenty-first century itself: violence as a tool of grand strategy peace. Will India, for instance, need to change its existential DNA in tune with the two biggest threats to its security—China and its proxy Pakistan, both of which want to grab territory through violence? In other words, does India, which has been a peaceful nation for centuries and been invaded over and over again, continue to remain a defensive nation in the twenty-first century or should it start raising the stakes, first by getting what is its own (occupied Kashmir) and then expand to the beat of ‘barbarians’ at its doors? Neither China nor Pakistan have been taken to task by the international community for their transgressions. If that is the new geopolitical normal, should India play that game? Should it start attacking and not merely defending? Should military aggression be part of India’s grand reciprocity strategy? Should India lay down its own attack narrative rather than allow hostile nations to set it for India? These questions are not merely political rhetoric, behind them lies the survival of the Indian state.

3 Conclusions Irrespective of the outcome of these debates, the time for India to have a grand strategy debate has come and is here to stay. Most importantly, these debates have to be framed within, and anchored to the question: ‘Who Are We?’ That is, understanding that India is an old civilisation but a new country (Sood, 2020). In other words, the wisdom of the past that has been erased from mainstream education must inform the country as it redefines its place in history. There are deep grand strategy insights that India in the twenty-first century can glean and adapt from its ancient past. India, as S. Jaishankar says, must rely on its own traditions to equip them in facing a tumultuous

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world. ‘That is certainly possible in an India that is more Bharat’ (Jaishankar, 2020). This Bharat, as ancient India was known and as the very first article of the constitution of India29 reminds us, has several treatises that explore the subject, the Mahabharata (Bibek Debroy, translator 2015b) and the Arthashastra (Shamasastry, 2015). Modern India needs to take history lessons from ancient India to navigate the twenty-first century—the lack of a grand strategy does not befit a country with a GDP of $3 trillion that is projected to head towards becoming the world’s thirdlargest economy within this decade and a $10 trillion economic powerhouse by the early 2030s. The components of such a strategy are in place. But each part of an increasingly complex statecraft is functioning within the limitation of silos and turfs. The playground of economic aspirations finances but does not engage with military strategies; the internal security infrastructure is not cohesive as powers are divided between the union and state governments. It is up to the Prime Minister’s Office to lead these debates and negotiations and build a national consensus around India’s grand strategy on the one side, and for think tanks and other stakeholders and interested parties to help supplement and design them through policy articulation in a manner that gets its economy, its politics, its society to feed into, complement and supplement its security and strategic requirements on the other. A grand strategy of India will not emerge from a top-down command but rather from a noisy discourse in the robust democracy India is. This chapter captures all these disparate narratives, from foreign affairs to domestic economics, and offers an intellectual edifice upon which practitioners and scholars can build the grand strategy of India.

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The Indian State and Its Foreign Relations Mario Prayer

Abstract This chapter analyses the continuity in India’s foreign policy over the decades, taking into account the structural and ideological origins and development of the Indian state. The ideas and practices introduced during British colonial domination provided the basis for the construction of the Nehruvian ‘socialistic’ state. Non-alignment perfectly suited the necessities of the newly independent state and remained the main focus of India’s foreign policy even after the end of the Cold War. More recently, the rise to power of the Bharatiya Janata Party and the transition to a Hindu-nation-state brought about an increased emphasis on India’s profile as a world power and a major actor in global capitalism.

1 Introduction India’s foreign policy has been characterized by a remarkable continuity over several decades after achieving independence in 1947. Various authors (Andersen, 2001; Dalmia & Malone, 2012; Mazumdar, 2011; Prasad & Nooruddin, 2019; Rauch, 2008; Tripathi, 2013) have identified a core of issues which have evoked a consistent response from Indian governments of different orientations, mainly centred on the idea of non-alignment, even after the overall context of international relations changed dramatically with the end of the Cold War. It is only after the Bharatiya Janata Party’s resounding victories in the general elections of 2014 and 2019 that changes in Indian foreign policy became evident. The reasons behind this prolonged continuity and the recent apparent re-orientation of Indian foreign policies are related to certain unique characteristics of India’s domestic political landscape.1 There are several internal structural factors which condition the development and management 1 Literature on the domestic dimension of foreign policy in the Indian context is discussed by Basu (2016) with reference to Bandyopadhyaya (1979), Appadorai (1981), Tharoor (1982), Kapur (1994) and Jha (2002). Also see Dubey (2012).

M. Prayer (B) Department Italian Institute of Oriental Studies, Sapienza University of Rome, Rome, Italy e-mail: [email protected] © Springer Nature Switzerland AG 2023 S. Beretta et al. (eds.), India’s Foreign Policy and Economic Challenges, Global Power Shift, https://doi.org/10.1007/978-3-031-20270-4_3

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of a country’s foreign policy: the country’s geographic location, the morphology of the land and the availability of resources for economic purposes. In the case of India, several political and national security needs arise from the overall regional configuration of South Asia. Bordering hostile countries to the north-west, north and north-east, and being the largest state in the region enjoying a dominant position at the centre of the Indian Ocean, India is singularly posed between two sets of unequal confrontation. On the one hand, in dealing with threats from China or Pakistan it needs to flex muscles and, if necessary, strike hard. On the other, building up strategic partnerships with Nepal, Bhutan, Bangladesh or Sri Lanka often requires a soft attitude of concession and accommodation. Moreover, given the growing scarcity of water resources in various parts of its territory, the shared utilization of frontier-crossing river flows is bound to be reflected in its relations with those neighbours. While issues arising from India’s geo-strategic and resource management needs must be analysed against the background of various theatres of international life at different points of time, it is also necessary to consider a deeper, underlying factor pertaining to India’s subjectivity as an international actor. This chapter argues that understanding the approach of Indian political leaders towards foreign affairs requires the analysis of the trends in India’s political culture leading up to the gradual formation of a modern state. It is also necessary to examine the kind of relationship the Indian state has developed with various societal groups in various phases of its evolution. In the early Nehruvian period, the multicultural, pluralist Indian state aimed at including the entire society in one common sphere of civil rights and political participation and in organizing economic development along centralized ‘socialistic’ lines. Later, neo-liberal economic reforms and changes in the state-society intercourse favoured the transition to a nation-state with its core community in a homogenized Hindu identity, excluding other communities from fully enjoying citizenship rights. This change was also reflected in a shift in foreign policy from the initial appeal to universal rules of equality and recognition for all countries as means to establish a fair international order, to the recent pursuit of international leadership and a fuller integration with global capitalism. In this complex scenario, perceptions of the past, current needs and aspirations for the future are combined to form fundamental views of India’s place and position in the world. In this chapter, the concepts of nation and modernity play a prominent role. This should not be seen as suggesting to dismiss the post-modern critique of the nation as an ideological buttress holding up Western dominance. The reality of the nation tends to dissolve once a focus is placed on the fragmented dimensions of actual individuals and localities (Chatterjee, 1993). Forces of globalization have further contributed to such dissolution by establishing direct links between the ‘location’ and the worldwide web of communities (Holton, 1998; Menon, 2009). Even then, the nation does maintain much of its validity as an analytical category when applied to the wide area expanding between, and linking up the micro and the macro, which actually encompasses many of the issues related to the state-society interactions. In India, a variety of discourses has been a salient feature of public and political debates from the nineteenth century until today, so that the nation’s dominant narrative appears firmly entrenched ‘as a compulsion, which lives in every Indian’s psyche in varied

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and often conflicting conditions’ (Tripathi, 2007, p. 355). Similarly, to assert that the modern state was first introduced in India during the colonial period does not imply that all forms of Indian modernity are foreign in their origin. Rather than a unilinear historical development towards Eurocentric modernity, one should acknowledge the complex interaction of ‘connected histories’ (Subrahmanyan, 2004). The transition from the Nehruvian pluralist state to the Hindutva nation-state is presented in the next five sections. In Sect. 2, a very brief sketch of pre-modern state forms will single out historical experiences of political theories and practices. These are contrasted in Sect. 3 to the new ideas and practices introduced by the British colonial government along with their social and cultural impact. Section 4 focuses on the legacy of the nationalist movement and the foundation of the Nehruvian state and its foreign policy. Section 5 deals with aspects of the present transition to a Hindutva nation-state and the gradual shift in the management of international relations under India’s BJP-led government.

2 The Pre-Modern State Over the centuries, India witnessed a variety of state forms constituting a plurality of political traditions. Even as late as in the latter part of eighteenth century, the subcontinent saw the continuance, rise and evolution of very different state systems such as the Mughal Empire with its regional potentates, the Maratha Confederacy, the Mysore state and a plethora of ‘little kingdoms’ widely scattered across the land. While it would be misleading to attach a paradigmatic value to any one of these state forms, it is nonetheless useful for the purpose of this chapter to highlight certain shared traits with specific reference to the nature of power vested in the state and its relationship with other sources of authority. One aspect that stands out is the secondary role of state power in the configuration of social life. As pointed out by Kaviraj (2000), different types of state organizations which can be observed in different phases of India’s history were similar in that they did not set out the rules by which social behaviour was configured. These were left to societal self-determination, often on a local and customary basis and in accordance with specific rights informing caste and other community relations. The Hindu king was at times called upon to protect these rights by use of legitimate force (dan.d.a), but in so doing he would be acting as an enforcing agency, rather than the fountainhead of law and justice. The legitimizing source was the received wisdom of traditional texts conceived as a hazy corpus (included in the broad category of the s´a¯ stras) amenable to ad hoc reconstitution and reinterpretation. Similarly, the ruler extracted economic resources from his subjects through taxation as a key feature of his authority. He was also committed to improving agricultural cultivation in his territory through infrastructure work, so as to increase resources and population and thereby help with the consolidation of his regional power. But it would not be part of his power to impose a structure or mode of production and trade, which were instead left to economic self-regulation. The king’s duty to ensure the

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well-being of his subjects and the prosperity of his kingdom was instead achieved through consecration (abhis.ekha) and other rituals aimed at maintaining cosmic order, harmony among elements of nature and continued access between man and divinity (Kulke, 1997, pp. 237–239). Related to the marginality of state power in social life was the existence of an articulated structure of subsidiary authority centres, each working in a separate domain— be it economic, religious or juridical—and jointly propping up the structures of a ‘segmentary state’ (Stein, 1980). These authority centres were mostly vested in individuals who enjoyed the trust of specific social segments on account of their personal qualities, such as competence, command over human and material resources and formal deference to shared views of traditions and customs. The legitimacy of an authority would thus be constantly tested and evaluated against the backdrop of perceived justice and a kind of shared public morality. Moreover, the management of local resources would be in the hands of influential groups forming vertical alliances competing for power and control within the autonomous dimension of social politics. The king or ruler, on his part, enjoyed complete freedom in seconding his ambitions and proving his capabilities in the arena outside the domestic domain, i.e. in the bellicose or friendly relationship with his neighbours. The outward-bound dynamism of the king was also functional to a pluralistic political system articulated along a three-tier structure of nuclear, peripheral and tributary areas, where administration and revenue were largely decentralized (Kulke, 1997, pp. 242–256). Among the ranks of lords and chieftains, each player had opportunities for upward mobility by providing support and service to the head of the alliance. In that sense, the overlord as first among the kings (r¯aj¯adhir¯aj¯a) was a guarantor of the legitimate aspirations of his subordinate allies and ensured fairness in dealing with them. State politics and social politics thus formed separate domains of power and authority. As compared with traditions of Hindu kingship, the Mughal state enacted a more systematic integration of the aristocracy and assumed a markedly centralized character by introducing a unified method of land revenue assessment, a standardized pattern of provincial bureaucracy and the notion of absolute sovereignty resting on a theory of the emperor’s moral obligation towards social needs and his religious function as ‘spiritual guide’ (Ali, 1997, p. 268). Nevertheless, the Mughal state did not introduce substantial changes in its relations to society, so that ‘people at large were indifferent to whether they were under an imperial or a regional regime’ (277). The fundamental features of pre-modern political culture in India summarized above were not entirely abolished after the introduction of new values and norms by the colonial state during the nineteenth and early twentieth centuries. Some of these remained as substratum and influenced the reception of Western political modernity. In the encounter between these different traditions, the distinct characteristics of state culture in independent India were formed.

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3 The Colonial State The introduction of a new type of political principles and institutions under colonialism was a long and complex process. The variety of colonial ideologies and the degree of local participation to the colonial world yielded diverse results in different parts of the subcontinent. Even then, a few elements may be identified as entailing a profound innovation on the overall relation between society and state as well as on the source and nature of political power itself. The colonial government and its institutions marked in many ways a sharp departure from Indian political and social traditions and practices. Administration, economy, justice, the military and all the other ‘segments’ of the state were brought under one nucleus of authority, whose ultimate source of legitimacy lay in a faraway country. The subcontinental economy was entirely reorganized in order to suit the interests of the empire, with deep and lasting repercussions on almost all sections of the local society. In the first half of the nineteenth century, moreover, the government took up the task of reforming ‘savage’ social customs through specific laws, such as the Bengal Sati Regulation of 1829 and the Hindu Widows’ Remarriage Act of 1856. The caste communities, which could not be abolished through government action, were consistently and unequivocally exposed as the very foundation of India’s social and religious backwardness. Often with the concurrence of Christian missionaries, a number of schools, colleges and universities were set up in order to spread European science and literature, which would ideally replace ignorance and superstition and redeem Indian civilization from what was considered its present state of barbarism and decay. After 1858, some of the formal institutions of the British modern state were gradually introduced, including Legislative Councils with a representative element and a distinction between spheres of central and provincial governments. The working of these institutions, and the principles of political theory guiding them, familiarized an élite of English-educated Indians with the current political culture of the West and led them to demand an even fuller implementation of the modern state in India, with an expansion of the Indian representatives’ contribution to self-government. Many peripheral areas, however, were not exposed to the larger impact of modern ideas and values and maintained aspects of previous political culture even when local traditional authorities and production relations had been formally affected.2 Post-enlightenment liberalism posited the notion of an undivided public sphere where society and government could interrelate and influence each other. In India, the process of civil society formation began in the early nineteenth century, when a new type of ‘associationism’ arose among the modernizing élites. In these associations, the ascriptive, all-encompassing identity of caste and religious community was substituted by a voluntary act of joining an interest-based collective for a specific purpose (Kaviraj, 2000, pp. 149–151). With the old class of rulers now gone or confined to marginal, subordinate ‘princely states’, these economically and socially upward-mobile classes soon acquired the optimistic dynamism of pioneers 2

See, for instance, Das Gupta’s (2011) discussion of tribal authority systems in Chotanagpur.

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entering a resourceful terrain. They discovered a new method of self-promotion as the previous system of mutual, personal support between a king and his prominent subjects was replaced by an increasingly impersonal and standardized bureaucratic process where demands were evaluated against a general context of governmental criteria for priorities and objectives. This process was instrumental in the creation of a public space of debate, where interest groups could get recognition and consolidate themselves through the circulation of printed words (newspapers, magazines, pamphlets, books) and public lectures. Significantly, India’s emerging civil society situated itself in a political horizon which transcended the natural borders of the subcontinent and embraced the vast and diverse composition of the British Empire. Even early nineteenth-century reformers like Ram Mohan Roy were considering the requirements of colonial Indian society in the light of the contemporary world (Bhattacharya, 2010). As literature and personal experience further enriched the Indian élites’ awareness of the political culture that fostered the mighty British political system, they began to see the colonial government in India in the light of an imperfect (and hostile) political agent, whereas the universal principles of justice and progress were rather embodied in the impartial, supra-political empire of Great Britain’s Queen Victoria (Banerjee, 2018; Mukherjee, 2010). The modern state in India was thus regarded as a fundamental progress over the previous forms of kingship, except that it was still incomplete as it accorded only a limited statute of rights to its Indian ‘subjects’ and denied them full citizenship (Kumar, 2017). Moreover, the economic policies of the colonial government were not geared towards India’s interests, which resulted in the systematic ‘drain’ of local resources for the benefit of the empire and contributed to the colony’s state of passive subjection. Only a responsible government, accountable to the people, would be able to substitute exploitation with development—admittedly, one of the objectives of the modern state. Within that broad context of the empire, India naturally acquired its identity as one of the distinct ‘nationalities’ that bejeweled the British Crown. In this sense, the missed recognition of colonial India’s civil society, in contrast to what the British were doing both in the metropolis and in other dominions, led to a politicization of civil society itself and to the birth of new associations, like the Indian National Congress in 1885, for the assertion of Indian national interests. Provincial delegates to such all-India forums decided to work together to solve a fundamental problem of legitimacy in the dialogue with the colonial administration which could not be tackled in reference to specific policy grievances in their respective localities, but needed national unity as a more effective platform for political mobilization. And they continued to look at examples and models elsewhere, for instance, in Ireland and Italy, in their search for a more encompassing integration of the Indian nation in the advancing course of history. The nineteenth century was thus a seminal period for Indian modern political culture (Bayly, 2012). The Indian élites assimilated and appropriated the constituents of political modernity such as citizenship, civil liberties and equality of all before the law, even if the colonial state did not actually put many of these concepts into practice. The Congress nationalist movement sought to redress such shortcomings by voicing dissatisfaction and by organizing popular campaigns of protest in an

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escalating confrontation. The British responded alternating firm repression with marginal, gradual concessions in the form of enlarging the scope of representation in the Councils. Such representation, however, was aptly differentiated on the basis of religion, caste, ethnicity and other categories which did not belong to the discourse of the modern state. This encouraged the rise of an alternative domain of politics within a legal framework where the colonial government remained the only source of legitimate power. India’s political leaders were engaged not only in fighting repression and injustice through mass agitations and opposition in the Councils, but also in neutralizing the much more subtle apparatus of ideology and discourse that undergirded colonial power (Inden, 1990; Kaviraj, 1999; Metcalf, 1994). The exceptionalism of the modern state in India existed, according to this discourse, due to the historical trajectory of India’s civilization which made British colonialism necessary and providential. It was then ‘the white man’s burden’ to save India from the political, social, economic and cultural decay which had set in during long centuries of ‘oriental despotism’ and ‘social anarchy’. Divided into a myriad of water-tight social compartments, deprived of the allegedly masculine qualities of constructive statesmanship and incapable of producing a common effort towards progress and development, India was projected as structurally unfit for full participation in the institutions of modernity. India’s English-educated élites were, in Viceroy Lord Dufferin’s words, only a ‘microscopic minority’ within a large patchwork of fossilized, history-less identities, unworthy of the role of a proper civil society. Similarly, the colonial government refused to acknowledge the native vernacular press as a legitimate participant in public debates (Israel, 1994). The opinion of colonial society was ignored or tolerated at the most, but never actually engaged in a discussion over governance and policies. Despite the efforts for spreading English education in India as the idiom of modernity, the British Raj maintained its ‘benevolent’ autocratic nature while Indians were kept at a distance. In other words, the relationship between the colonial rulers and their subjects could only be political. There was a ‘difference’ between the two sides which could not be overcome, and which prevented a dialogic form of participation in the public sphere (Chatterjee, 1993, pp. 14–34). At the same time, the British had from the late eighteenth century onwards consistently exalted the incomparable achievements of ancient India in philosophy, literature and arts. The discovery of a large corpus in Sanskrit dating back to the early centuries of the first millennium BC had an important impact on European intellectual life (Kejarival, 1983). The British actively promoted this association between Indian civilization and a golden age of ancient culture, as an integral part of the orientalist representation of India as a country divided into two irreconcilable, yet deeply entangled dimensions—the ‘poetic’ élan of the remote past rising to unsurpassed heights in the history of mankind and the present lack of even the most basic elements of practical knowledge. This view inspired influential writings like James Mill’s History of British India (1817) or Thomas Babington Macaulay’s Minute on Education (1835). In the latter, for instance, it was argued that ‘the department of literature in which the Eastern writers stand highest is poetry. […] But when we

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pass from works of imagination to works in which facts are recorded and general principles investigated, the superiority of the Europeans becomes absolutely immeasurable.’ Such ideas effectively served the purpose of removing contemporary India from the map of international relations and encircling it in the exclusive imperial embrace as a colonial appendix to Britain—a situation that Indian nationalist leaders of varied orientation tackled in parallel with their domestic political agitations.

4 Indian Nationalism and the Nehruvian State As mentioned above, India’s nationalism had an intrinsic claim to international recognition in its fabric. Before the colonial era, India had been a major global trading hub thanks to its strategic location in the middle of the Indian Ocean and to the variety of economic resources it could employ on markets near and far. Along with commodities, ideas steadily moved across the region to keep it on the forefront of material innovation and cultural creativity. While India’s connection with world trade was maintained in the colonial period as well, although reoriented to suit the interests of the empire, there was an increasing limitation on India’s exchanges and encounters with the world. Indian curiosity for developments in other countries had nevertheless continued and by the end of the nineteenth century, it had even become a political necessity (Bose, 2006; Bose & Manjapra, 2010). Congress activists and other nationalist leaders established personal contacts with many international fora, many of which had a distinct anti-imperialist character, such as the League against Imperialism and Colonial Oppression, the International Labour Organization, PEN for Freedom, Women’s International Congress for Peace and Freedom, or the committees of the League of Nations. Many of them often visited England, where pro-India societies had been existing since the 1860s (Visram, 1986), as well as other central and southern European countries and the Soviet Union. In the 1920s, a group of Bengali scholars started the Greater India Movement with the aim of recovering a lost chapter in history, when India inspired civilizations in neighbouring countries particularly in South-east Asia (Bayly, 2004; Prayer, 2021). The shared legacy of Buddhism in India, Japan, China and Tibet was also emphasised in the context of pan-Asian ideals of continental solidarity (Saaler & Szpilman, 2011). Especially in the inter-war period, these foreign relations and interactions were aimed at promoting the case of India’s struggle against colonial subjugation and projecting the country’s aspiration to a recognition of its autonomous subjectivity. There was, however, another level where the international resonance of the binary colonial representation of India’s past glory and present degradation had prompted an Indian response. As representatives of an ancient civilization still capable of delivering its redeeming message to the world, men of religion and spirituality devised a global counterstrategy by which the colonial discourse on India could be, at least partly, turned on its head. The notion that India, though materially (and only temporarily) inferior to the West, was nevertheless superior in the spiritual sphere was thus presented before sympathetic Western audiences by several standard-bearers of

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this revised version of ‘Indian tradition’, often appearing in a religious or quasireligious garb. Swami Vivekananda, to mention just one example, toured the United States and England in 1893–1896 and delivered lectures proposing the philosophy of Advaita Ved¯anta as a remedy to the West’s drift to materialism and India’s contribution to a more balanced development of the modern world (Sen & Gupta, 2003). Saluted on his return to India as the restorer of India’s international stature, Swami Vivekananda established the Ramakrishna Mission in 1897 to help in the cultural and material regeneration of the Indian people. This was done by a group of modern sanny¯as¯ıs (renouncers) devoting their life to spreading cultural self-awareness and a militant national spirit among their oppressed countrymen. As in the colonial representation, the golden age of India’s ancient philosophy and literature became the repository of national pride and the reconstruction of Indian identity had to begin with the recovery of such a self-declared glorious past. In this context, Ved¯anta, an ancient philosophy based on the negation of ontological substance to empirical reality, was projected as compatible with the militant, re-masculinized character of a self-assertive nation (Mohapatra, 1996). While Swami Vivekananda did not offer a well-defined political proposal about the state in future independent India, the search for the ‘spiritual’ nation as preceding and perhaps subsuming the state was later transposed to the sphere of historical roots in the ideological formulations of Hindutva (or Hinduness) from the 1920s onward (Jaffrelot, 1993). According to Vinayak Damodar Savarkar, one of the founders of the movement, the initial step towards the recovery of India’s past splendour was the individuation of the sources of national identity. In his essay Hindutva: Who is a Hindu? (1923), he described the Indian nation in terms of historical antecedents and cultural belonging as pitr. bh¯umi and pun.ya bh¯umi, i.e. the land of the fathers and the land of virtue. Drawing from the orientalist stereotype of Indian civilization as essentially defined by religion and transcendence, Savarkar constructed a Hindu identity as the sum total of the ancient religions and philosophies which had originated on India’s sacred soil, from Buddhism to Jainism to Brahmanism and with the later addition of Sikhism. To this legacy of ‘virtue’ every true national Indian, that is, every Hindu had to show deference and veneration. Islam and Christianity, which had been exported from the West into India, were obviously not original constituents of the culture of the land. Muslims, in particular, were welcome to remain in India as long as they accepted Hinduism as the basis of their national identity. Otherwise, they would have only enjoyed limited rights in a Hindu R¯as..tra, a nation-state based not on citizenship but on the collective identity of the Hindu people. For Savarkar, the present colonial subjection was not a result of the British suppression of India’s nascent civil society or of an imperfect liberal state, but rather a consequence of the still undeveloped historical self of the Hindus. In 1925, an association of ‘national volunteers’, the Rastriya Swayamsevak Sangh (RSS) was established with the objective of spreading these ideas and promoting the Hinduization of India’s past, present and future. This would then create the conditions for the establishment of a supposedly pure form of nation-state based on the core group of Hindus, in contrast with the multicultural liberal state based on universal citizenship as advocated by the Congress.

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Along with the liberal and secularist political culture of the Congress and the communal overtones of Hindutva and the RSS, there was another set of ideas and programmes which became a fundamental component of independent India’s political ethos. Mohandas Karamchand Gandhi, who spent about two decades in South Africa before returning to India in 1915 at the age of 54, had spent most of his life away from the main currents of Indian politics and found himself out of tune with the programmes and methods of the Congress leadership upon his return to the country. In the most systematic exposition of his political views, Hind Swaraj (1909), he had expressed his repudiation of civil society and strongly criticized Western modernity, Western parliamentary systems, industrialism and international trade for their ‘moral failure’ as reflected in the plight of India’s poor villagers (Chatterjee, 1986, pp. 85–130). Taking up ‘an epistemic point situated outside the thematic of postenlightenment thought’,3 Gandhi viewed the reconstruction of the local dimension of socio-economic life through the restoration of autonomy to India’s villages, and consequently had no use for political agitation within the Legislative Councils. In a way, he was trying to salvage whatever remained of ‘traditional’ society’s autonomy vis-à-vis the state. He envisaged the future independent India with a decentralized political system with the central government only executing limited functions of general coordination and was averse to maintaining the institutions of the modern state, whether under British or Indian control, as the problem in his view did not lie in the nationality of the rulers, but in the nature of the polity. Gandhi did not conceive of the Indian nation in terms of Hinduism either, as he looked at Indian society as a family of inter-related communities who would find ways to coexist in peace once they were allowed to recover their autonomy. This recovery did, however, entail a political engagement with British colonialism. Gandhi thus gave a fundamental contribution to the mobilization of the Indian rural masses in the Congress campaigns by combining modern instruments of political struggle, like the creation of a widespread network of party committees or the publication of militant newspaper articles, with a set of traditional values and symbols, such as the moral appeal to truth, the adherence to non-violence or the wearing of hand-spun cotton clothes. Among the three major conceptions of India’s identity mentioned above, the one based on a liberal, multicultural and secular character of the state took the political lead at the historical junction of the transfer of power in 1947. The Congress leadership under Jawaharlal Nehru inherited the administrative structure of the British Raj as well as its underlying politico-cultural assumptions and embarked on a project of fulfilment of its undelivered promises by turning them into cornerstones of the reconstituted Indian state (Guha, 2007). In fact, although a debate on what one author has called ‘the idea of India’ (Khilnani, 1997) and the future independent state had been taken place for quite a few years before 1947, it was only in the Constituent Assembly that this was made the subject of articulated and prolonged discussion. While opinions presented on that occasion varied, the idea that India should become a democratic state based on universal individual citizenship, with a federal structure to allow for pluralism and ‘unity in diversity’, was largely prevalent among the 3

Emphasis in the original.

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members. The constitution, adopted on 26 January 1950 as a solemn resolution by ‘the people of India’, signified the primacy of the general legal framework of the state over executive power, and made the government an instrument for securing its objectives, i.e. justice, liberty, equality and fraternity (Constitution of India, Preamble). The full recognition of all citizens’ civil rights and liberties served to strengthen the sphere of public debate and legitimize the expression of diverse political opinion. There were thus no second thoughts among the Nehruvian leadership about the modern state model and its suitability for independent India. On the other hand, the political modernity that was, at least in theory, introduced during colonial times was still unknown to large sections of society at the state’s margins. India’s political life thus came to be marked by the presence of two distinct ‘political idioms’ or ‘political cultures’, one traditional and rural, the other modern and urban (MorrisJones, 1964; Rudolph & Rudolph-Hoeber, 1967; Weiner, 1965), with the state acting as a mediator between them and an educator of the former in preparation for the latter. The constitution, moreover, accorded immediate relevance to the role of the state in promoting the welfare of the people by implementing economic policies for a balanced and fair distribution of resources and development opportunities among the population (Constitution of India, art. 38, 39). This prompted the Nehruvian leadership to set economic development as the top priority for newly independent India. In the absence of a vibrant private entrepreneurship and against an overall stagnant backdrop, the state took up the central role of planning and coordinating all sectors of the economy along ‘socialistic’ lines. The ground lost due to colonial exploitation had to be regained, to begin with, through the creation of a large, labour-intensive industrial sector and the promotion of ‘scientific temper’ for a technologically advanced use of natural resources. This lent an omnipresent, almost omnipotent character to the state, at times even raising worries about individual freedom (Kaviraj, 2005; Nandy, 1973). Debates in the Nehruvian period on economic development stressed the need for India as a modern nation to be equipped with all the productive power necessary to maintain its autonomy and avoid a politically dangerous dependence on foreign intervention. The Gandhian model was therefore marginalized, though not entirely abandoned (Zachariah, 2005). Of much greater relevance for the new nation-state was the symbolic value that came to be attached to Mahatma Gandhi as the ‘Father of the Nation’. By mobilizing the Indian masses in the freedom movement through nonviolent methods, he had provided legitimacy to an independent India both in terms of peoples’ struggle against imperialism, and of modernizing India’s philosophic and religious heritage. His assassination by an RSS sympathizer on 30 January 1948 was seen as his last sacrifice for India’s social harmony and actually became a crucial moment of cohesion and pacification for the nation in the aftermath of Partition (Khan, 2011). Gandhi as a national symbol epitomized the redemption of India’s toiling masses and the establishment of a secular, multicultural state endowed with an ancient, resilient tradition holding a message of peace and progress for the entire world. Even though the accountability of governments in the Nehruvian period was almost entirely referred to the domestic arena and foreign policy never figured

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among the main issues in election campaigns, there was an inherent, indissoluble link between domestic and foreign policies. British domination had not only deprived India of its global economic and cultural power, but it had also obscured its capacity of establishing relations on equal terms with other advanced nations. This capacity had to be regained in tandem with the domestic reconstruction of its polity and economy. In this regard, it can be argued that the colonial legacy offered a doublesided complex of circumstances which conditioned Nehruvian India’s orientation in favour of anti-imperialism, non-alignment and multilateralism (Appadorai & Rajan, 1985). In view of the enormous difficulties the programme of economic recovery would face, the Indian government had under great difficulty to ensure a multiplicity of potential cooperation partners and, at the same time, protect Indian operators from foreign competition. Joining either camp in the Cold War line-up of alliances would reduce India’s ability to conduct free and fair negotiations to that aim and impair the free development of India’s potential. From a regional perspective, India as a country newly emerging from colonial subjection attached extreme importance to territorial integrity as a recognition of its sovereignty (Chatterjee-Miller, 2014). Peaceful relations with its immediate neighbours were, however, endangered by confrontations about contested borders set up by the British to the north and the west in country, namely the MacMahon Line and the Radcliff Line, resulting in prolonged military exchanges along two Himalaya sectors with China and in the contested areas of Kashmir with Pakistan. Under the pressure of these threats, India naturally sought to keep other powers away from the great South Asian basin and secure it as an area of Indian influence. This at times conflicted with India’s general attitude against the expansion of a country’s power beyond its boundaries and in favour of free and equal intercourse among nations. On a positive note, India’s modern political culture in continuation and fulfilment of colonial times experiences meant that, in contrast with its neighbours and enemies China and Pakistan, India could establish its credentials as a democratic and secular country, which in turn lent additional weight to its voice. Having wrested freedom from the British Empire by developing and applying its ‘inner strength’, India was now in an ideal position to lead other countries in their advance towards decolonization. Non-alignment would provide a common platform for many small ‘Third World’ countries which would otherwise be forced to approach either superpower for their security needs and thus once again fall prey to a new type of imperialism. In this respect, multilateralism as mainly embodied in the general assemblies of the United Nations seemed to offer the same kind of impartial guarantee of universal justice which the British emperor had once ideally represented. India’s foreign policy was, therefore, inspired by an insistence on rules of international morality and the rejection of all forms of discrimination. Even in other multilateral contexts, such as the Doha round of WTO, or nuclear proliferation and later climate negotiations, India took up an uncompromising stance in demanding equal treatment (Prasad & Nooruddin, 2019, p. 23). In taking up a guiding role among developing countries, India could also benefit from the cultural traits of its national identity as constructed under colonialism. India’s case showed how an ancient oriental civilization with a rich treasure trove of achievements in philosophy and spirituality could rightfully

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become the standard bearer of democracy. The image of Mahatma Gandhi would thus serve the purpose of combining age-old wisdom and contemporary politics as a new international morality, giving Indian identity its unique character among the nations. As this range of views and ideas shows, domestic and foreign policies were closely inter-related within the developmental and pluralistic mission of the Nehruvian state—and remained so even after the end of the Cold War, while India’s political system was undergoing a process of profound transformation (Rauch, 2008).

5 Transition to Hindutva India’s general elections of 2014 and 2019 marked the rise of the Bharatiya Janata Party (BJP) as the new centre of single-party political majorities both at the centre and in many states. This was the culmination of a three-decade-long process that saw a gradual decline of the Nehruvian state originated, as has been pointed out, by the very ‘success’ of Indian democracy (Kohli, 2001). By enacting, however imperfectly, the Directive Principles of State Policy stipulated in the constitution, Congress-led governments did favour economic development and the democratization of India’s society, bringing formerly underprivileged sectors to participate in the state institutions (Jaffrelot, 2003). On the other hand, the negotiations rapport established by the state with those sectors remained largely confined to what Partha Chatterjee has called the ‘political society’ as distinct from the space of ‘civil society’ where governance is the subject of a dialogical, open confrontation in the context of a shared political culture (Chatterjee, 2011). The new leaders came to represent the aspirations of formerly marginalized, largely rural but affluent communities, in forms which varied in different regions of India (Doron, 2010; Witsoe, 2009). Reorienting the domain of social politics towards the state, they applied the logic of factional alliances for taking control of portions of the state and its resources. In the process, social categories like caste and religious community which did not belong to the political philosophy of individual rights were fundamentally altered and they, in turn, altered the nature of state politics (Kothari, 1970; Nandy, 1984). This favoured the rise of parties whose ideologies were based on community identity rather than universal civil liberties, like the Janata Dal and above all the BJP. Even the Congress, once the older generation of regional leaders retired or was removed during the 1970s, embraced the new electoral opportunities of vote banks and started renouncing its own secularist, anti-communal orientation, for instance, during the Babri Masjid-Ramjanmabhumi controversy (Frankel, 1990). Once the BJP managed to neutralize the negative electoral impact of its upper-caste elitism in the name of Hindu unity, the stage was set for a deep reorganization of India’s political culture and day-to-day domestic politics. The restructuring of the Indian state according to the Hindutva ideology is an ongoing process. A few distinctive elements have, however, emerged by now. Despite

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the stress on ancient India’s cultural heritage and the ‘modernity’ of Hindu tradition,4 it actually moved even farther away from certain features of Hindu kingship, such as political pluralism, non-intervention in social matters or the personal accessibility of authorities to the general public (Brass, 1990, p. 14; Nandy, 1989, p. 7). At the same time, a shrinking of society’s ability to participate in the political decisionmaking process has been observed along with a reduction of occasions for governmental accountability. Even the transformation of Jammu & Kashmir and Ladakh into Union Territories in August 2019, a drastic measure of constitutional relevance, was enacted without consulting local authorities, public opinion or opposition leaders. Through administrative and other interventions, the scope for press freedom is being radically curtailed, a fact which has been denounced by independent observers as well (Reporters sans frontières, 2019). There is, instead, a tendency to unilateral self-representation of the government’s work through electronic and social media addressing individual users, which excludes all forms of debate or dissenting views and opinions. In an erosion of the multiplicity of authorities and responsibilities, established ministerial procedures are bypassed by decisions taken in the Prime Minister’s Office. While the federal system is becoming more and more centralized, the balance of powers which characterizes Tocquevillian democracy is also being eroded by the dominance of the executive over legislative and judiciary—thus accelerating Indian democracy’s ‘drift to soft despotism’ (Rahe, 2009), with only the formal institutions of democracy remaining in place as instruments of legitimation of Hindu majoritarianism. The most controversial element of change is perhaps the introduction of a new citizenship law placing many Muslims families at risk of losing their civil rights, in a context where advanced technology applications for the universal collection of personal data, such as Aadhaar, may give rise to an encompassing ‘political society’ where the nation works as one homogenized faction under government control with little room for political dissent or cultural diversity. In the economic field, the neo-liberal reforms introduced in the early 1990s gave a fresh impetus to private enterprises and reduced the scope for a ‘socialistic’ state’s direct involvement in production activities. The state, however, maintained a crucial role as a coordinator of national resources towards the establishment of a new economic system, including subsidies to limping sectors and control over credit, and as an international mediator procuring opportunities for Indian operators through trading and investment ties with global actors. While Narendra Modi’s achievements in promoting development in his previous capacity as Chief Minister of Gujarat provided the most prominent theme in the BJP’s election campaign of 2014, a substantial departure from the previous management of the country’s economy does not seem to have happened in the subsequent five years. The impact of the rise of a Hindu-centred nation-state on India’s foreign policy is slowly becoming visible, rather than in dramatic shifts, instead in certain attitudes revealing India’s

4

For instance, Sanskrit is described as a superior language for current scientific and technological purposes like computer programming (Scroll, 2015), while cow urine is supposed to neutralize Covid-19 (The Hindu, 2020).

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new ambitions as a world superpower and in a wider internal resonance of international affairs. On the one hand, the BJP government has been moving along established trends in many respects, although the need for fuller integration in global capitalism and the search for profitable economic ties have determined a preference for specific purpose and regional formations like BRICS and ASEAN over general multilateral fora. The increasing confrontation with China both over border issues and in the bid for a permanent seat in the UN Security Council has also conditioned New Delhi’s stance (Chatterjee-Miller & Sullivan de Estrada, 2018; Hall, 2016). The considerable promotion of the army in home affairs is reflected in expanding military cooperation with Japan, Australia and the US to form a grouping a likeminded countries sharing the same security concerns and strategies extending from the Indian Ocean to the Pacific Ocean as a measure to counteract China’s expansion towards India’s own regional sphere of influence (Schöttli, 2019). In this respect, one of the priorities of the Modi-led governments seems to have been moving the US away from the former support to Pakistan in order to isolate the latter internationally and favour a final solution to the decade-long India-Pakistan so-called ‘hyphenation’ (The Print, 2019). Leaving Pakistan behind is seen as essential for India to become a global protagonist with a wide range of opportunities for alliances and interventions. Similarly, India seeks to shed the previous role as leader of ‘developing’ countries in the recognition of its ‘developed’ status. Against that background, even a revitalization of the Non-Aligned Movement under India’s lead, it is argued by some in India, could be considered an option in order to enhance India’s international leverage (The Diplomat, 2020). On the other hand, the renewed alliance-style relationship with the US is in many ways an illustration of India’s new diplomacy, where the spectacular depiction of the Prime Minister’s personal engagement in tours abroad and in welcome receptions to world leaders often appears to be the main objective, regardless of the actual substance of agreement terms (Bloomberg, 2020). In the construction of a two-sided national identity combining the powerful with the saintly, India has been consistently playing the ‘soft power’ card to win over the sympathies of foreign audiences (Mazumdar, 2018). While Buddhism is at times emphasised when evoking India’s shared cultural heritage with countries like Japan and Vietnam, fitness-oriented versions of yoga and Ayurveda are often present in addressing European countries and the West in general. In both cases, India is projected as a provider of ancient spirituality and wisdom to the whole mankind, which is also supposed to be reflected in its current status as the world’s largest democracy. This has also led to a softening of India’s position with respect to climate change negotiations. The rhetoric of peace and dialogue displayed internationally stands in stark contrast with the militant, masculine and muscular image of a ‘selfreliant’ India projected in domestic speeches, and in the RSS-backed notion of the Indian peoples’ preparedness to take up arms against their enemies.5 This is not entirely surprising since a double-sided representation of Indian past and present is always a characteristic feature of the Hindutva reading of national identity. 5

Similarly, there seems to be a disconnect between domestic anti-Muslim policies and friendly relations with Muslim countries of the Middle East.

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India is thus aiming at acquiring a world leader status as a ‘natural’ consequence of its economic advance and national spirit of self-reliance. As reputation becomes itself the focus of foreign policy (Shankar, 2019), the Prime Minister’s taking centrestage marks a shift in India’s attitude to international relations even as a distinct ‘Modi doctrine’ is still in the making (Hall, 2015; Tandon, 2016). The global prominence India acquired in the early years after neo-liberal economic reforms and the sheer size of its population are important props to this endeavour, while the ultimate result will also depend on India’s capacity to build up a balanced and consistent relationship between domestic politics and foreign relations.

6 Conclusions The trajectory of the Indian state can be traced with reference to the imperfect colonial modern state and its ultimate fulfilment in independent India. The ideas and practices adopted by the Nehruvian leadership in the establishment of a multicultural, secularist and ‘socialistic’ state based on civil liberties and universal rights strongly conditioned India’s political development both in the domestic and international arenas. In the latter context, a variety of factors made non-alignment the main focus of India’s foreign policy for several decades even after the end of the Cold War. The construction of India’s identity as a modern heir to an ancient civilization with a moral message to the world considerably helped in establishing India as a significant actor in international relations. More recently, the rise to power of the Hindutva movement—also a product of colonialism—and the transition to a Hindunation-state—brought about an increased stress on India’s profile as a world power. The Nehruvian insistence on justice and equality in international relations has been replaced by an effort for closer integration with leading capitalistic countries. Foreign policy has thus become a function of the nation, rather than of the state. At the same time, the internal erosion of civil liberties has questioned India’s democratic credentials especially in the globalized sphere of social media and rights activism. It remains to be seen if this additional international dimension of debate and mobilization will ultimately revitalize India’s endangered civil society, or on the contrary, offer a new platform for the further consolidation of the political culture of Hindutva.

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Rethinking “Interdependence”: The Changing Nature and Context in India–China Economic Relations Priyanka Pandit

Abstract The current crisis in India–China relations demonstrates a significant challenge to the longstanding claim that economic interdependence inhibits interstate hostilities and leads to cooperative political relations free from military confrontation. In this chapter, I make an attempt to analyse the various causal mechanisms which had created frameworks of cooperation in India–China relations in the past as well as the factors leading to the recent outbreak of military hostilities. The chapter primarily contends that the ability of trade and economic exchanges to promote cooperation and reduce hostility depends on the nature and context of the economic linkages and that the trade-conflict relationship cannot be generalisable across the history of the interstate relations.

1 Introduction The June 15, 2020, clash between Indian and Chinese soldiers in the Galwan Valley region of the Himalayan border has fundamentally altered the dynamics of SinoIndian ties (Gokhale, 2021). The brutal clash that led to the killing of 20 Indian and unknown number of Chinese soldiers has unfolded a new phase in bilateral relationship marked by intensifying rivalry and heightened trust deficit. During the normalisation of Sino-Indian ties in the late 1980s, the two countries agreed to delink the boundary dispute from other aspects of bilateral relations such as trade, economic cooperation, people-to-people exchanges, etc. (The Hindu, 2020c). In particular, the leaders from both the sides, despite the lingering differences over Line of Actual Control (LAC) prioritised economic cooperation which led to bilateral trade of around $92 billion by the end of 2019 (Varma, 2020). The post-June 15 2020 clash, however, made sure the assumption that economic interdependence will offset bilateral political tensions and dissuade the two sides from initiating conflict has increasingly come under stress. A profound shift is now underway, in which both sides have toughened their postures as well as sharpened their nationalist rhetoric against each other. P. Pandit (B) Shiv Nadar University, New Delhi, India e-mail: [email protected] © Springer Nature Switzerland AG 2023 S. Beretta et al. (eds.), India’s Foreign Policy and Economic Challenges, Global Power Shift, https://doi.org/10.1007/978-3-031-20270-4_4

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The significant improvement of Sino-Indian relations from the late 1980s onwards has generated a lot of scholarly interest in the economic aspect of the bilateral relationship. Many commented that the growing economic interdependence would not only reduce the bilateral distrust but also create peace and stability in India–China relations (Palit, 2013; Panagariya, 2005, 2008). In their view, the costs of conflicts were going to be higher as the two neighbours expanded their trade and investment ties. With the growing complementarities between the two economies, the idea of China–India Free trade agreement (FTA) also gained traction in the mid-2000s (Panagariya, 2008). Despite the differences, the leadership in both New Delhi Beijing and sides considered trade and economic contacts as one of the key pillars of the bilateral relations. This was borne out of the realisation that the growing bilateral relationship offers increasing opportunities to the rising China and India to expand their influence regionally and globally. In the post-2008 period, multilateral groupings like BRICS comprised of Brazil, Russia, India, China, and South Africa had raised considerable hopes about the rise of new centres of economic gravity acquiring a prominent place in the global supply chain and production networks (Pandit, 2017). With their increasing participation in the international institutions, countries like China and India, in some cases, have also attempted to challenge the norms that govern these structures. The emerging economies that constitute BRICS have had their deep-seated resentment about and frustration with the developed nations’ efforts towards the current reform of the global financial system and their inability to address concerns of developing and least developed countries in the global trade regime (Kondapalli & Pandit, 2017). In 2012, the BRICS countries expressed reservations towards making further contributions to the IMF and announced that “any future contribution would be subject to the BRICS having confidence that the entire membership is truly committed to implement the 2010 reform” (Delhi Declaration, 2012). At the BRICS meeting in Durban in 2013, Chinese President Xi Jinping called upon the BRICS countries to play a bigger role and to “strive for common prosperity of all countries” and “deepen mutually beneficial cooperation and seek win–win results” (eThekwini Declaration, 2013). Both China and India along with Brazil and South Africa have been collectively pressing for an early conclusion of Doha Development Round in the World Trade Organisation (WTO) and argue for expanding the “development” content of the package drafted in July 2008 (Palit, 2013). India–China relations therefore provide an interesting case to revisit the links between trade and conflict as well as the longstanding claim that economic interdependence inhibits interstate hostilities and leads to cooperative political relations from free military confrontation. In this chapter, I make an attempt to analyse the various causal mechanisms which had created frameworks of cooperation in India– China relations in the past as well as the factors leading to the recent outbreak of military hostilities. The chapter primarily contends that the ability of trade and economic exchanges to promote cooperation and reduce hostility depends on the nature and context of the economic linkages.

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2 Trade Promotes Peace? A review of the causal mechanisms regarding interdependence and conflict indicates a complex web of interests at the domestic and international levels. The liberal argument suggests that economic exchanges between India and China create economic interdependence and it becomes costly for governments to disrupt such interdependence (Doyle, 1997; Haas, 1958; Keohane, 1990; Lindberg, 1963). The leaders on both sides believe that gains from economic activities outweigh the gains from military conflict and in that case, cooperation becomes the most viable option. Also, the increase in bilateral economic interactions benefits certain groups in society more than others and these protagonists act as credible constraints for the governments or political leaders from taking actions such as military ones—actions that would be harmful to the economy. While domestic politics is considered crucial for influencing interdependence, the role international institutions play remains equally significant in influencing the relationship between interdependence and conflict (Mansfield & Pollins, 2001). For instance, international institutions reduce uncertainty in economic transactions and provide incentives for governments to cooperate and enter into commercial agreements (Keohane, 1998). In the post-cold war period, countries, which have been part of the same regional or multilateral trading arrangements or groupings are more inclined to rely on the institutionalised process for reducing conflicts and achieving collective gains.

2.1 Domestic Factors With the gradual shift in the political economies of both India and China during the mid-1980s, the ‘economy’ acquired primacy in their foreign policy formulations (Virmani, 2006). The two countries became convinced of the imperatives of global interdependence and undertook several efforts to integrate into the global economic system. The growth of economic globalisation from 1990s had not only highlighted the virtues of free market capitalism but had also provided a strong rationale for policy changes in developing countries. In China, the government accelerated efforts towards export promotion, and its bid for WTO membership was aimed at both expanding trade as well as diversifying its trade partners (Li, 2009). In the 1990s, China was heavily dependent on the US, Japan, and the EU for its export markets (Lai, 2001). Concerned with the narrow regional distribution of trade, the Chinese leadership subsequently shifted its attention to South and Southeast Asia. The Chinese policy of so-called “good neighbourliness” became a necessary strategy in this direction, through which the Chinese government pursued stable relationships with the surrounding neighbours to expand trade ties and for attracting foreign trade and investment (Womack, 2003). Policymakers in Beijing realised the significance of maintaining a stable and peaceful neighbourhood since China’s economic, diplomatic, and even military influence and cultural influence will increasingly be felt

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first and foremost in the surrounding Asian and Pacific countries (Zhao, 1999). This shift in China’s domestic political thinking also paved the way for the normalisation of its relations with India. The Indian Prime Minister Rajiv Gandhi’s visit in 1988 played what is referred to as “ice-breaking” role, marking a new era of economic exchanges and people-to-people contacts between the two sides. In India, although the memories of 1962 were still fresh, the new leadership led by Rajiv Gandhi in mid-1980s, chose diplomacy as an instrument to resume relations with China (Bhattacharjea, 1994). The domestic conditions motivating the leadership on both sides to improve the bilateral relationship was similar. Like China, the Indian government in the 1980s had pushed for economic reforms that were directed at export promotion, domestic deregulation (including ending state monopolies in several sectors), the privatisation of inefficient public sector enterprises, promotion of inward FDI, and the reduction of tariff and non-tariff barriers on imports (Panagariya, 2005). The business communities in India were eager to tap into the opportunities provided by globalisation for the country’s overall development. And improving relations with neighbours became an important political priority. The Indian side in fact showed greater willingness vis-à-vis China to explore the potentialities of bilateral cooperation in the fields of trade, commerce, industry, science and technology, education, and culture (Virmani, 2006). Think tanks in New Delhi and Beijing had carried out research and published studies exploring the trade potential covering goods and services. In the early 2000s, a joint study group was set up to lay groundwork for Chinese President Wen Jiabao’s visit to India in April 2005 (Mohanty, 2005). Among the many outcomes, economic agreements were the highlights of the visit. Wen’s first stop was not Delhi, but Bangalore, which clearly revealed the importance that the both sides at the time assigned to the development of trade, commerce, and technological exchanges (MEA Press Release 2005). Despite the irritants that exist in the form of unresolved border disputes, China’s “all-weather friendship” with Pakistan, India’s sheltering of the Dalai Lama, and Beijing’s ambiguous stance on New Delhi’s ambitions for a permanent membership seat in the UN Security Council, the leaders in China and India viewed expanding economic and commercial gains as a means to advance their interests regionally and globally. Also, the elevation of the bilateral relationship from a “constructive cooperative partner”, to a “strategic and cooperative partnership for peace and prosperity” indicated the mutual willingness to diversify and delink the bilateral economic engagements from the Indian-Sino border disputes and move forward (Acharya, 2005). Chinese former President Hu Jintao during his 2006 visit to India reiterated similar sentiments that a “dynamic India–China friendship would lead to peace, stability and prosperity not only in Asia but the world as a whole” (Panda, 2006). Building on that momentum, Chinese Premier Wen Jiabao was joined by 400 Chinese business leaders during his visit to New Delhi visit in 2010 (BBC News, 2010). The presence of a large number of business representatives from China clearly indicated how economic engagements benefitted certain domestic actors in the society, who in turn influenced political leaders to adopt the kind of foreign policy, which benefits business and trade ties. With their vested interests in economic interdependence, these actors often limit the leadership’s policy choices and insist on the continuance of cooperative political and economic relations

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with other countries. For instance, despite then ongoing tensions between the two countries over Beijing’s issue of stapled visas to residents of Jammu & Kashmir and Chinese construction activities in Pakistan-occupied Kashmir (PoK), the two sides agreed in 2010 to establish the Strategic Economic Dialogue and an India–China CEOs forum along with the signing of some fifty deals in power, telecommunications, steel, wind energy, food and marine products worth $16 billion (Pandit et al., 2011). As the two sides set the bilateral trade target at the US $100 billion for 2015, they welcomed each other’s participation in national and regional trade fairs, encouraged trade facilitation, exchange and cooperation of pharmaceutical supervision, and agreed on a speedier completion of phytosanitary negotiations on agricultural products (Wee & Neogy, 2010). In the financial sector, India and China at the time concluded a memorandum of understanding (MoU) between the Reserve Bank of India and the China Banking Regulatory Commission.

3 International Institutions The emerging economies of China and India have become far more integrated into the global economy, including international economic institutions which were traditionally dominated by the established Western powers. The cooperation gained further prominence in the aftermath of the 2008 global financial crisis. They became key advocates of economic reform in the post-crisis period. As the crisis exposed the fault lines of the global capitalist system, countries like China, India, and Brazil raised a series of questions relating to the structure, scope, and effectiveness of the global institutions underpinning the system (Pandit, 2017). New groupings like BRICS, IBSA (India, Brazil, and South Africa) also gained importance as a class of development actors in the global political economy, strengthening the global south agenda in the international economic system (Stuenkel, 2013; White, 2009). Despite their political differences, India and China agree on a common set of ideals like sovereignty, territorial integrity, constitutional structures, non-intervention, and desire for autonomy in foreign policies, which continue to inform their interactions at multilateral institutions. At the WTO Doha Round, e.g., China joined India as part of the G-20 group of countries on agriculture and expressed disappointment over the lack of progress in dismantling subsidies and market support on agricultural products from developed countries (Narlikar & Tussie, 2004). Both India and China acknowledge the significance of the WTO, and the need to strengthen the organisation, update its rules so that it can better support food security, rural livelihoods, and improve the functioning of markets for food and agriculture in developing countries. On key WTO principles like the special and differential treatment (S& DT), India and China share similar positions and are key advocates of preserving equity-based differentiation in the global trade regime (Pandit, 2019b). In a joint paper submitted to the WTO, China and India pointed to the divide that exists between the developing and developed economies on a wide range of indicators like GDP per capita, poverty levels, levels of under-nourishment, and the persistence of the low standard of living

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in many developing countries despite some significant growth stories among developing economies (Pandit, 2019a, 2019b, 2019c). In their view, developing countries are still amidst domestic economic transformation, which requires policy space, flexibility, and support for carrying out various policy experimentations. The WTO, being the key institution promoting fairness and justice in international trade negotiations, should therefore in their view build what they called “development-friendly regime” that allows the developing countries to utilise the S&DT benefits from time to time (Kathuria, 2019). They are considered as active participants in all dialogues relating to reforming the organisation and making it more fair and more inclusive. For example, India and China have urged WTO members to address the long pending concerns over public stockholding of food grains and special safeguard measures and seek a permanent solution that would prevent import surges in farm products (Sen, 2021). At the Bali Ministerial Conference in 2013, WTO members agreed to a peace clause on public stockholding programmes for food security provided by the developing countries (Bali Ministerial Declaration, 2013). The role of a price-support-backed food security policy cannot be underestimated in the fight against hunger, especially in the current pandemic where millions are facing livelihood and food insecurity issues. Multilateral institutions like the WTO, therefore offer a common ground for the two countries to collaborate bilaterally as well as part of a coalition or collective of emerging market economies. Talking about the empirical significance of BRICS, within the span of two decades, the BRIC countries have consolidated and even further expanded their strong position in the world economy. Institutions like the NDB has emerged as a popular development financing institution in the global south. Countries like India have been working closely with that development bank and it has so far approved 18 projects in India, including emergency loans of $2 billion to support health spending during the Covid pandemic (Mishra, 2021). Along with the NDB, the BRIC countries have also created an alternate fund called Contingency Reserve Arrangement (CRA), which would help them during times of capital flight (Pandit, 2017). The major institutions of Bretton Woods, during financial crises, had unfairly imposed inappropriate structural adjustment programmes on developing countries, which the developed countries themselves refused to implement in their own economies in return for funding. The CRA, therefore, is aimed at assisting the BRIC nations to deal with “short-term liquidity pressures”, strengthen the global financial safety net and promote greater interdependence and cooperation among its members (Fortaleza Declaration, 2014). Multilateral or regional arrangements, especially economic ones, therefore can foster economic interdependence and prevent the onset of conflict by mitigating commitment problems between the members. It also assists in the process of bargaining between states by “increasing interaction opportunities, lengthening the shadow of the future, and raising the reputation costs for reneging on agreements” (McLaughlin Mitchell & Hensel, 2007). India and China since the mid-2000s have been using multilateral and regional economic arrangements to reduce the trust deficit and cement their bilateral relationship.

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4 Rethinking “Interdependence” The liberal assumption which views a positive correlation between interdependence and conflict has come under criticism after the violent face-off between Chinese and Indian soldiers along the Line of Actual Control (LAC) in 2020. Its harshest critics, the realists, argue that gains from interdependence do not influence India and China equally and in turn have failed to deter them from initiating hostilities. In their view, the two sides, despite the cooperative framework created by increased trade, failed to bargain peacefully fuelling temptation of one of the disputants to renege from the previous agreements reached. The retaliatory action with India banning 59 Chinese mobile phone apps, further reinforces the negative effects of economic interdependence on conflict: failed bargains might encourage the use of bans, sanctions or threats of force (The Economic Times, 2020). While there are merits to the arguments on both sides, neither liberals nor realists have paid enough attention to the causal mechanisms underlying the relationship and how these conditions influencing interdependence vary across time with differing implications for the bilateral relations. Another major weakness is the lack of proper conceptualisation of the term “interdependence” and “conflict” and that the varying notions of interdependence and conflict could produce different outcomes (Mansfield & Pollins, 2001). For example, the asymmetric nature of trade relations between India and China has made India more dependent on China than vice versa (Rusko & Sasikumar, 2007). Although bilateral trade had increased from $3 billion in 2001–2002 to $75.6 billion in 2012, India’s trade deficit with China has also been on the rise (Pandit, 2019a, 2019b, 2019c). The current trade deficit stands at $69.4 billion, up from $45.9 billion in 2020 and $56.8 billion in 2019 (Krishnan, 2022). More significantly, China has emerged as India’s largest trade partner since 2009 with imports from China accounting to $97.5 billion against India’s $28.14 billion to China (Dhar, 2012). The scale of Chinese investments in India has also grown over the last ten years especially in India’s unicorns, pharma, and construction sectors. India’s increasing trade deficit with China can be attributed primarily to the different composition of trade baskets between the two countries. With regard to the items exported to China, the basket mainly consists of intermediate goods and raw materials accounting for 56 and 20%, respectively, of total exports in 2017 (Pandit, 2019a, 2019b, 2019c). Such items include petroleum oils, seafood, vegetable fats, animal feed, iron ore residue, and so on, which China has sourced from India and other Asian countries to process its exports of finished or assembled goods. India’s imports from China on the other hand are dominated by manufactured items, particularly electronics, telecom products, electrical equipment, and pharmaceuticals. Most of India’s electrical and electronic requirements, including smart phones and computer hardware, are met by China. More than 90% of the Active Pharmaceutical Ingredients (APIs) for several antibiotics and vitamins are also imported from China, which implies that India does not have many other options for meeting its API requirements (Dhar & Rao, 2020). The bilateral trade composition clearly points to a mismatch in which India has a high vulnerability dependence owing to its demand

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for Chinese goods in key sectors and the difficulty in locating substitutes for these products (Dhar, 2022). In contrast, given the relatively small share of imports from India, it makes it less costly for the Chinese to replace these connections through trade diversifications or by making domestic economic adjustments. Also, the two sides have somewhat been wary of security-related concerns associated with trade and investment in sensitive sectors. For New Delhi, in particular, the increasing influx of Chinese capital in telecom and other technology sectors, security implications have become a growing concern (Krishnan, 2020). Towards the middle of the previous decade, the two governments were in active consultations to initiate negotiations of a free trade agreement (FTA). These preparations went astray as the Indian government faced opposition from major industry associations (Pandit, 2019a, 2019b, 2019c). These associations were apprehensive about their ability to stand up to competition from relatively cheap Chinese products and were, therefore, unwilling to allow the lowering of tariffs through an FTA. Another reflection of the unease of Indian businesses with imports from China is the large number of anti-dumping complaints registered against Chinese firms. For the past few years, New Delhi has been very vocal about its rising trade deficit and the high tariff barriers that the Indian companies face for certain Chinese items and sectors. For example, in its submission to the WTO in 2018, India complained that the trade deficit with China was becoming “unsustainable” and that Indian products such as farm produce and meat face entry restrictions from Chinese regulatory policies despite the protocols in place. India remains the only country till date to file the maximum number of anti-dumping investigations against China at the WTO (The Hindu, 2021). Most of these cases are import restrictions filed against toys, textiles, mobile phones, tyres, and chemicals from China. The anti-dumping-related concerns have also motivated India’s decision not to join the Regional Comprehensive Economic Partnership Agreement (RECP) in 2019. Once duties are eliminated or reduced under the RCEP framework, the fear was that the influx of Chinese goods would hurt local businesses and the small medium-sized enterprises (SMEs) to a large extent (Raghavan, 2019). Despite the auto-trigger provision in place to manage the import surges beyond the threshold limit, New Delhi was apprehensive about the RCEP countries’ adherence to the rules of origin (ROO) and the increase in thirdcountry imports (Sen, 2021). What many Indian businesses apprehended was that the enhanced market access and flexible standards related to ROO would prompt the flooding of cheap goods from China via South East Asian countries into India. Additionally, New Delhi has flagged concerns over the stringent Chinese visa regime preventing Indian professionals to travel and work in China for longer durations (Mishra, 2018). The strains on the Chinese domestic political economy have been evident for quite some time. (Zhang & Chen, 2017). The old economic model founded on subsidised finance, low-end manufacturing, and export-led growth that propelled China’s growth over the decades is no longer sustainable. The challenge of being stuck in the middleincome trap has become real for China (Zhou & Hu, 2021). On the financial front, the number of bad loans accumulated by the Chinese banks have grown considerably (The Economic Times, 2021). Plus, the trade war with China initiated by the Trump

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administration since 2019 has negatively affected Chinese imports, forcing many of the Chinese manufacturers to relocate their operations to countries such as Vietnam and Indonesia (Haas & Denmark, 2020). Many countries including India had joined Washington in strengthening the screening of foreign investments, particularly from China. Many countries in Europe and Asia grew sceptical of the Chinese tech giants like Huawei and ZTE after Washington had accused them of carrying out espionage for the Chinese government (The Hindu, 2020a, 2020b, 2020c). As tensions with Washington have intensified, the Xi Jinping-led government has become more suspicious of the India–US relationship, especially in the IndoPacific. The revival of the Quadrilateral Security Dialogue (QUAD)—a dialogue forum bringing together Australia, India, Japan, and the United States—has generated a great deal of unease among Chinese policymakers (Buchan & Rimland, 2020). They not only remain wary of Washington and its allies trying to tilt the regional military balance and contain China but also have deep anxieties about India’s position in the initiative. The Chinese wariness about India–US relations thus kept growing since 2017 and no amount of convincing from the Indian leadership was enough to assuage Beijing about India’s role in the QUAD. While India has all along addressed Chinese core security issues with deference and desisted from voicing concerns over the violation of democratic and human rights in Tibet, and Xinjiang, Beijing, on the other hand, has carried strong views on India’s internal matters (Gokhale, 2021). It is the deepening mistrust that lies at the heart of the Galwan 2020 border crisis, which has transformed the relatively peaceful and productive ties into a risky and competitive dynamic.

5 Conclusions Although the resolution of Indian-Sino boundary disputes has become central to improving Sino-Indian relations, such breakthrough appears unlikely in the immediate future. For New Delhi, the peace on the border remains a prerequisite for the rest of the relationship to develop in contrast to Beijing’s emphasis on delinking the border from the rest of the relationship (The Hindu, 2022). Efforts are also being made by the Indian government to reduce the economy’s dependence on China. Some of the major policy initiatives include tightening of FDI rules, increase in safeguard taxes and changes in public procurement norms. For example, a few days after the Galwan valley border incident in 2020, the two Indian state-owned telecom firms BSNL and MTNL were instructed not to use gear from Chinese firm Huawei for a network upgrade (The Hindu, 2020a, 2020b, 2020c). As part of Indian government’s “Atmanirbhar” (self-sufficiency) campaign, the government procurement portal has mandated sellers to mention the “Country of Origin” while registering any new products online (Mukul, 2020). Although the directive doesn’t explicitly target China, the underlying objective is to identify Chinese-origin goods and the anti-dumpingrelated activities. India has also extended safeguard taxes on imports of solar cells and modules as well as imposed anti-dumping duty on several goods to discourage

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imports from China and encourage Indian companies to procure locally (Prasad, 2020). While these remain significant steps towards strengthening the “Make in India” initiative, there is a long road ahead. In fact, the bilateral trade grew by 43.3% in 2021 despite calls for “boycott of Chinese goods and investments” from the public and policy restrictions (Singh, 2022). New Delhi now finds itself caught between a deteriorating political relationship and rising trade volume China. While the security stakes remain high for the Indian side, diversification-related options too, look difficult. Chinese economy’s quick recovery from Covid has re-established Beijing’s dominance in the regional and global manufacturing supply chains, and reshoring will be an extremely onerous and costly affair for Indian businesses. It is therefore difficult to have a binary approach to understanding interdependence. It is much more complex than often depicted by theorists (Barbieri, 1996). The nature and context of economic linkage become important. Also, the tradeconflict relationship can’t be generalisable across the history of interstate relations. With changing indicators of interdependence, the nature of consequences varies. In India–China relations, where conflict and cooperation co-exist, it is important to consider the “hurdle effect” whereby the benefits of interdependence offset tensions only to a certain extent after which the intensity of bilateral relations, might intensify conflict.

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Priyanka Pandit Ph.D, is a Ashoka-Harvard Yenching Post-Doctoral Fellow in China Studies at Shiv Nadar University, India.

India: Candidate Player in the Asian Economic Space—Problems and Perspectives Giuseppe Iannini and Silvio Beretta

Abstract India, a very large Asian country and one of the world’s most populous, took a development path that is not aligned with other Asian countries which—in different periods—have contributed to the continent’s formidable economic growth. Even after having partially abandoned the constraints of the ‘raj system’ as a result of the economic reforms of the 1990s, the country is still poorly integrated both with the most dynamic regions of the Asia–Pacific area and within the value chains that increasingly involve those regions. This reluctant economic protagonism is broadly inconsistent with the ambitions of the Act East policy aimed at building close ties with the region of Southeast Asia and, in particular, with the ASEAN countries. There are also controversial economic and commercial relations with its powerful neighbor, China, a country that over the last 20 years has pursued a pervasive ‘encirclement’ in the South Asia region, creating exclusive links with the ASEAN countries and, in the northwest, with Pakistan and Central Asia. On the flip side the ambitious Act East policy struggles to be implemented in a decisive manner. Because of a complex set of old and new reasons every action aimed at integrating the country with the most dynamic areas of the continent in a more intense and competitive way ends up being implemented in a problematic and contradictory fashion. The chapter aims at outlining that set of reasons and the characteristics of India’s network of economictrade relations with other regions of Asia, while at the same time highlighting the causes for its relative economic ‘isolation’, which one can attribute, in addition to the political-strategic ones, to the endogenous imbalances of the country’s economic system.

G. Iannini · S. Beretta (B) Department of Political and Social Sciences, University of Pavia, Pavia, Italy e-mail: [email protected] G. Iannini e-mail: [email protected] © Springer Nature Switzerland AG 2023 S. Beretta et al. (eds.), India’s Foreign Policy and Economic Challenges, Global Power Shift, https://doi.org/10.1007/978-3-031-20270-4_5

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1 Asia is Ever More Integrated Inside Its Economic Space Over the last twenty years, India’s international dimension has acquired visibility and relevance, in an increasingly interconnected and multipolar global context. In 2014 the Indian government initiated what was termed ‘Act East Policy’ approach with the purpose of renewing, in a broader and more ambitious version, the now surpassed ‘Look East Policy’ program developed in the first half of the 90s (1991–1996). As a consequence of this approach, the country has turned to expanding its geostrategic and geopolitical projection capabilities. Not only Southeast Asia becomes a privileged destination for its foreign policy but also what with some emphasis is now referred to as the Indo-Ocean-Region (IOR) has progressively taken on a pivotal role in India’s international outreach (Jaishankar, 2019). This new geopolitical ‘mission’, which can be explained by reasons of demographic, geographical space as well as the country’s political history, does not seem to be in tune with the not particularly visible economic momentum of India within the Asian continent. It can be argued that India, a political giant, has not yet reached the corresponding weight and influence of an economic giant. This contradiction is evident when we engage in analyzing the Indian economy in the context of Asian economies, which is thought to be destined to achieve an economic weight comparable, if not greater, to that of the other advanced world areas. The available indicators speak for themselves. In fact, it is expected that Asia’s overall GDP (at market prices) will reach USD 174 trillion in 2050 starting from USD 17 trillion in 2010, thus coming to represent about half of the world GDP, while percapita income will tend to conform to that of more advanced countries (Harinder et al., 2011). Consumption in turn will increase from 40% of global consumption in 2017 to 54% in 2040 (at constant 2015 prices) (McKinsey Global Institute, 2019). Even more relevant is the growing role that some Asian countries have taken on as recipients of foreign direct investment (FDI), especially those from advanced countries and oil producers, a process recently scaled down by the pandemic, but offset by the high volume of indigenous investments. Despite the reduction of inflows, the entire Asia–Pacific region absorbed 33.1% of global net foreign direct investments in 2019, while the share of intraregional direct investments remained stable at 51.7% (Asian Development Bank, 2021, p. 45). Although the uncertainties due to the health situation and, in the longer term, to geopolitical tensions make predictions difficult, it seems reasonable to conclude that the concentration of capital in the area, even if non-homogeneously distributed among the various countries and regions of the continent, will provide a substantial boost to economic growth and the modernization of the productive apparatus. However, the most striking element is the area’s leading role in international trade, a phenomenon destined to have significant consequences on the global geo-economic configurations of the first half of the current millennium. The massive shift in international trade, which began in the second half of the 1960s with Japan, and fuelled by the economic leadership of the ‘Asian tigers’ in the mid1980s, received a formidable boost from China after its entry in the WTO in the year 2001. Those steps made Asia the second exporter after Europe and ahead of

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the United States.1 However, this extraordinary picture turns out to be misleading if the analysis does not take into account the deep internal differences of the Asian continent: India is certainly one of the factors of this complexity and one of the most complex to investigate. These elements can be summarized as follows: • The geo-economic landscape of Asia is extremely diversified, with regional and national realities at different levels of economic and social development. Furthermore, the intensity of their economic relations does not present a homogeneous structure: while some are moving toward an increasingly advanced integration, others muddle through on the margins, with inevitable consequences in terms of growth. In this scenario, India’s position displays numerous elements of weakness2 since, despite its demographic dimension and geographic location, it is held back by political, cultural and economic conditions. • Despite the heterogeneity of the integration process, recent data highlight the significant acceleration among the most dynamic regions of the continent due to a significant extent to the recent phenomena of re-relocation of global value chains within the Asian continent (especially China and ASEAN). In essence, the process of internal integration would be favored by a diminished involvement of Asian countries in global value chains. A process which, if somewhat attributed to the pandemic phenomenon and to the trade disputes between China and the United States, can also be considered as the natural outcome of the attainment of a greater maturity and productive diversification of some regions of Asia, which in turn implies a weaker dependence on advanced economies outside the regions themselves, in particular the United States and Europe. It is therefore useful to examine the degree of resilience with which the Indian economy contributes to this trend. • The economic performance of Asia provides a rather misleading image since the acceleration of the last twenty years is strongly driven by China’s exceptional economic performance. The advent of the Asian century is therefore connected to that of the so-called China century (Romei & Reed, 2019), as shown by the data 1

In 2010 Asia accounted for 36.1% of world exports against 38.2% for Europe and 8.4% for the United States. However, the growth rate in the period 2003–2020 is more significant: Asia: + 38.3%; Europe: –20.9%, United States: –16.7%. Data obtained from https://www.wto.org/english/res_e/ statis_e/wts2021_e/wts2021chapter05_e.pdf; if we consider global trade (exp + imp) the picture does not change substantially. Period 2014–2017: Asia: 33%, Europe: 38%, United States: 16%; 2000–2002 period: Asia: 25%, Europe: 44%, United States: 21%. Data obtained from McKinsey Global Institute (2019). 2 The growing attention devoted to the integration process of the area is witnessed by the fact that for some years the most important international economic organizations have published periodic reports explicitly dedicated to it. In particular: The Asian Development Bank has published since 1915 the Asian Economic Integration Report which originates from the Asia Regional Integration Center (ARIC, see https://aric.adb.org/aeir), while the International Monetary Fund emphasizes economic integration in the periodical Regional Economic Outlook for Asia and Pacific, see https:// www.imf.org/en/publications/reo. The World Bank is also paying increasing attention to integration in the periodical World Bank East Asia and Pacific Economic Update. see https://documents.wor ldbank.org/en/publication/documentsreports/documentdetail/986041616771340170/overview

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cited above.3 This polarization of development has given rise to strong industrial ties between some regions of Asia and its most dynamic country: China. The complex manufacturing value chain that comes out of those ties is acquiring more and more structural characteristics and has significant effects on country-level geopolitical choices. Also in this scenario, India plays a non-trivial role, which deserves to be studied in depth to evaluate its development prospects within Asia. One of the success factors underlying ‘Asia’s future’ is undoubtedly represented by the strengthening of the commercial integration of the most dynamic regions of Asia–Pacific (ASEAN, China, Japan) in the medium term. In fact, interregional trade represented 57.5% of overall trade in 2019, in line with the average value of the years 2012–2018 (56.5%), significantly higher than that of North America (40.9%) and lower than that of Europe (63.2%). However, two characteristics of the economic integration of Asia are more interesting. On the one hand, the reshaping of commercial relations has assigned China a primary role at the expense of both the United States and Europe, while on the other hand the formation of interdependent economic areas and of economic-logistic ‘corridors’ end up integrating (and in part replacing) the existing global value chains (Asia-Rest of the world). In fact, while North America (24.8%) and Europe (17.6%) were the most important partners of Asia (excluding China) in 1990, trade flows underwent a substantial change in the following thirty years with the downsizing of North America (12.4%) and Europe (11.0%) and with the affirmation of the primacy of China, which jumped from 5.8% to 24.4%. Within the Asian continent, the economic scenario highlights a marked diversification, which reflects the differentials of development and production potential of the various sub-regions.4 If we exclude the sub-region of The Pacific and Oceania, which is of little relevance since it is structurally dependent on external resources, the regions most integrated with the rest of the continent were in 2019 Southeast Asia (68.4%) and East Asia (55.7%). South Asia and Central Asia meanwhile stay below 3

Some indicators highlight this weight: the share of China’s GDP of the entire Asian economy was 33.7% in 2010 and 48.8% in 2019, international trade of China’s (exp + imp as % of that of Asia) 34.6% in 2010 and 35.6% in 2019, gross capital formation (as % of GDP Asia) 14.8% in 2010 and 20.9% in 2019. Our elaborations on data published by the ADB (Asian Development Bank), at https://kidb.adb.org/themes/regional-tables. Data refer to ADB member area countries with the exception of Australia and New Zealand and do not include the Middle East. 4 The breakdown by subregions follows the one adopted by the statistics published by the Asia Development Bank (ADB), in particular: (1) Central Asia (Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, Uzbekistan); (2) East Asia (Hong Kong China, Mongolia, People’s Republic of China, Republic of Korea, Taipei China); (3) South Asia (Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka); (4) South East Asia (Brunei Darussalam, Cambodia, Indonesia, Lao People’s Dem. Rep., Malaysia, Myanmar, Philippines, Singapore, Thailand, Timor-Leste, Viet Nam); (5) The Pacific and Oceania (Cook Islands, Federated States of Micronesia, Fiji Kiribati, Marshall Islands, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu); (6) Developed ADB Member Economies (Australia, Japan, New Zealand); India is included in the South Asia region together with Bangladesh, Nepal, Bhutan, Sri Lanka, Maldives. See https://www.adb.org/publications/keyindicators-asia-and-pacific-2021#accordion-4-1.

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40%. More significant than the integration dynamics are also the intra-subregional trade shares, which place East Asia (34.7%) and Southeast Asia (22.4%) at the top, while all the other regions are below 10% (Asian Development Bank, 2021, pp. 17–18). Direct investments and financial flows constitute additional critical variables for a more complete, especially qualitative, analysis of the integration of the Asian economy. Despite the collapse of trade flows5 caused by the pandemic and international trade disputes, the regional share of greenfield Asia-to-Asia foreign investments was 47.7% in 2020, lower than in 2019 (51.7%), the last pre-pandemic year, but still higher than the 40% of 2009 (ESCAP 75, 2021), i.e. the year immediately following the global financial crisis. In this case too one must acknowledge that the growth of Asia as outward investor in its regional market was triggered by the growing dynamism of Japan, but above all by that of China. For about a decade China has covered the dual role of important recipient of global FDI flows (around 20%) and of primary investor in the Asian area.6 Both countries have been actively moving as regional players in the role of development promoters in emerging Asian countries (Emerging Asia), a group to which China conventionally belongs. With reference to this geographical group, in 2013–2017 only China absorbed 16% of the total flows of FDI (inflows + outflows) against the 31% destined for the ‘Advanced Asia’ and 31% to the other countries of the same ‘Emerging Asia’, while only 3% were destined to the ‘Frontier Asia and India’. In total, this region (Emerging), which is widely considered one of the most dynamic ones (globally), activated in the same period a partnership with the other Asia–Pacific countries that is equivalent to about 80% of the inbound and outbound FDI.7 In order to deepen our understanding of economic integration in Asia, and of the specific role played by some countries and sub-regions in its quantitative and qualitative features, we take a closer look at financial relationships and productive connections within the manufacturing value chains. According to these parameters, the Asia–Pacific region, not comparable in geographical extension and demographic weight to Europe, is significantly less integrated than Europe. Strong differences in currency and regulatory systems, poor coordination of monetary policies and heterogeneity of domestic financial markets significantly affect the circulation of financial flows within the area (ESCAP, 2017, pp. 36–43). Furthermore, the dominant role of the dollar as the denomination currency of financial transactions, in particular on the asset side, represents a permanent element of risk and uncertainty, especially 5

The collapse of global FDI in 2020 was dramatic across the Asia–Pacific region albeit to a lesser extent than in other large areas of the world when we consider its ability to hold the lead in the largest destination for global inflows in 2020 (53.0%). Interregional FDI plummeted by 52% in 2020, from USD 138 billion to USD 66 billion, more than the decrease in global investment in the same area. See ESCAP 75 (2021). 6 If we exclude 2020, an anomalous year owing to the sharp decline in all real and financial flows due to known health causes, and in which the share of China (including Macao and Hong Kong) reached 46% of interregional foreign investments, followed by ASEAN countries with 22%. 7 Tonby et al. (2019), in the paper (pp. 40–41) we can find the taxonomy that identifies the degree of development of Asian countries.

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for developing and emerging countries.8 On the eve of the pandemic (end of 2019) two-thirds of both total assets (including FDI) and liabilities were ‘non-regional’: in particular, the regional banking component in the cross-border sector was limited to 11%, down from the 14% of 2015. These essential data highlight the asymmetry of a region that on the one hand has become both a manufacturing and exporting giant, reaching a high level of internal productive integration, but that on the other hand remains deeply integrated into the international financial system, weighed down by elements of weakness and shortcomings that are a remnant of those pervading the financial crisis of the 1990s. (Ibid.)9 If the data above examined seem to show that economic growth of Asia is associated with the intensification of internal integration, numerous indicators identify the relocation (into the continent) of some segments of the manufacturing value chain as a possible co-factor that helps explain this growth performance (McKinsey Global Institute, 2020, pp. 59–71). Apart from dealing with structural phenomena such as ‘decoupling’, a hypothesis worthy of further in-depth analysis, it is important to highlight how a denser network of regional manufacturing chains can have two important consequences: (1) to trigger spillover phenomena in less developed areas, especially those belonging to Central Asia and South Asia; (2) to spark the emergence of leading countries, in addition to Japan, as promoters of productive decentralization processes linked to value chains, especially in high-tech sectors. Overall, in the context of value chains, Asia, in the last decade, has shown marked progress in the regional component (RVC), although still limited as compared to the global component (GVC).10 Within the RVC network, the interregional direction of flows is still strongly unbalanced: while the Southeast Asia region has intensified its ties with China and Northeast Asia (in particular Japan and South Korea) even in sectors with a higher content of technology, the interregional traffic volumes of the other regions, such as Central Asia and South Asia (including India) still remain modest and limited to raw materials and textiles.

2 India and Asia, an Unfinished Integration The framework outlined above highlights how economic integration of the Asia– Pacific region unfolds according to an uneven distribution of development opportunities among the various regions. As for the South Asia region, of which India 8

At the end of 2019, nearly half of the region’s asset holdings were denominated in US dollars while two thirds of the liabilities were denominated in local currencies. See Asian Development Bank (2021). 9 Especially as a consequence of the pandemic, phenomena such as ‘banking non-performing loans’ and ‘corporate sector debt quality deterioration’, both related to capital flight, negatively affected the economies of emerging countries. See Ibid.: 85–86. 10 The participation rate in RVC, which involves exports and production exclusively within the continent (Asia to Asia), rose from 46% in 2000 to about 50% in 2010, remaining around this value in the following decade. See Asian Development Bank (2019).

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is a significant part (89.7% of GDP in 2010 compared to 87.1% in 2019; approximately 85.5% of the population), the indicators capturing the degree of economic dynamism show a certain marginality of India compared to other regions in the Asia– Pacific region (with the exception of Central Asia), despite the country’s demographic weight. The history of India’s economic relations with the rest of the Asian continent is complex and has undoubtedly been affected by the non-linearity of the geopolitical approach to international relations and by the difficulties that the country has encountered in the last twenty years in addressing the imbalances that afflict its economy. However, it should be noted that Indian economic reforms adopted in 1991 have profoundly affected the economic fabric of the country, freeing it in part from the constraints imposed by a leadership characterized by closure outwards, by internal protectionism and by rigid sectoral regulations that had created vast areas of inefficiency and entrenched corporate interests (Nirvikar Singh, 2009). The dismantling of the ‘license raj system’, which helped foster growth and efficiency of domestic firms, was accompanied by reforms that opened the Indian economy to foreign investment and international trade after the long post-independence period, during which industrial policy was inefficiently anchored to the controversial ‘infant industry defense’ and ‘import substitution’ arguments. The policy of reducing customs tariffs, from 56% in 1992 to 9% in 2018, the abolition of the export–import licensing system, the abandonment of exchange rate defense mechanisms and the liberalization of capital movements have placed India closer to the other ‘virtuous’ economies of Southeast Asia in terms of openness to the rest of the world. Supported by important interventions in the institutional, social and educational system, on the one hand, and in the banking-financial and fiscal system on the other, the pro-growth reformist change did not take long to bear fruit. India’s real GDP grew by an average of 6.8% from 1992 until the outbreak of the pandemic, reaching an 18-fold growth in real GDP and three-fold in nominal terms. The improvement of the quality of life of the population was also significant: from 2005–2016 roughly 270 million Indians left the status of absolute poverty behind while the ratio of basic education among the population was raised. In 2017–2018 literacy was extended to 84.7% of men and 70.3% of women, compared to 53% and 29%, respectively, in 1981, while higher education has gradually spread over the last twenty years reaching a Gross Enrollment Ratio (GER) of 26.3% in 2019 (https://en.wikipedia.org/wiki/Education_in_India). As for the average quality of life standards, in 2018, 95% of Indian families had access to electricity, compared to 72% in the previous decade, while the entire population has acquired the right to access health care. The virtuous path undertaken at the beginning of the last decade of the last century, however, suffered a double setback under the blows of the global financial crisis of 2008 and the recent pandemic. Growth of the Indian economy has failed to maintain the previous pace, meaning that the goal of achieving the status of an economic giant that is capable of competing with China seems to have moved further away. The data cited on the rate of regional integration of Asia–Pacific show a scenario in which China, Southeast Asia and Japan, when compared with the other Asian regions, appear strongly integrated both with each other and within Asia. Unquestionably,

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Table 1 Interaction with Asia Index (%)* Interaction with Asia—Intraregional share (%)

Connectedness with the world

Countries

Goods exports, 2017

Capital (import + People travel exports), (imports + 2013–2017 exports) 2018

Weighted average of intraregional shares

MGI Connectedness Index global rank, 2017

Japan

57

50

79

62

17

South Korea

63

62

84

70

15

Mainland China

46

50

73

56

9

Indonesia

69

81

82

77

53

Thailand

64

88

82

78

24

Vietnam

46

83

83

71

18

India

33

43

32

36

33

Pakistan

29

61

8

33

n/a

*

Data obtained from: McKinsey Global Institute (2019). For the methodology of construction of the Connectedness Index global rank see Huha and Park (2018)

this successful integration is at the root of its most dynamic development engine, with China in a pre-eminent position. More in detail, some indicators highlight a picture of relative marginality of India compared to the rest of Asia, which reduces the Indian aspirations of economic power of the continent (Table 1). Compared to the other main Asian countries and to some countries of ‘emerging Asia’ such as Thailand and Vietnam, India shows, like Pakistan, the lowest level of integration in Asia, in terms of trade and capital movements, including currency flows related to the movement of people. These data, published by Connectedness Index Global, highlight both the relative regional isolation that has characterized the Indian subcontinent for decades and the hesitation of the reform policy, which is constantly struggling with the inefficiencies of the post-colonial system. The value is the second highest after that of Indonesia, which, however, unlike India, has made enormous progress in terms of regional economic integration. There is a broad consensus that India’s low level of integration in Asia is largely due to the failure to complete reforms aimed at developing a labor-intensive manufacturing system (Codrina Rada & Von Arnim, 2014) that is capable of absorbing part of manufacturing lines delocalized by China and replaced (in China) by other lines occupying higher niches in the value chains.11 Rich in low-cost labor, India excels in the high-tech and digital sectors but, because of insufficient investments in 11

McKinsey Global Institute has calculated that, in the period 2014–2017, India hosted 0.2% of manufacturing production transited from China (–3.1%) and from other areas outside Asia (–0. 4%) against 0.4% in Cambodia, 0.3% in Bangladesh, 0.2% in Thailand, 2.2% in Vietnam: a share therefore that does not respect the distribution of labor resources and settlement spaces which India disposes with respect to neighboring countries. See: McKinsey Global Institute (2019).

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infrastructure sectors and in view of the uncertainties of the rules governing industrial relations, the labor market and the tax system, its economic ties and interactions with China and other major economies in the Indo-Pacific region are still relatively underdeveloped. The difficulty in achieving more balanced standards similar to those in China is also reflected in the bilateral economic relations that bind the two countries. The gap between their economic systems and their different relevance in the Asian economic space inevitably translates into the persistent structural deficit that India records annually vis-à-vis other Asian economies. Such phenomenon deepened in the pre-COVID decade compared to the first decade of the century, when China was more dependent on imported intermediate goods and non-native technologies, with an advantage (at the time) for Indian production (Beretta & Targetti Lenti, 2012). The data in Table 212 display the asymmetries of the sector mix that characterizes the trade between India and China. In particular in sectors such as high tech (electronics and machinery), automotive, fertilizers, mobile phones, intermediate products for the pharmaceutical industry, capital equipment, the shares of Chinese exports systematically exceed (and often by far) two-digit percentage values. An opposite sign (surplus in favor of India) highlights the ‘poorer’ component of the trade balance, in particular raw materials, precious metals and, with the exception of the low technological content of Indian products, plastics and pharmaceuticals.13 As a partial explanation of these significant differences, it should be remembered that non-tariff barriers and subsidy policies practiced by China have hindered the commercial penetration even of goods and services that are potentially competitive with Chinese ones (for example cotton, textiles and clothing). The marginal share destined to Chinese market within the Indian global exports relating to this product sector is proof of that.14

3 Connectivity, a Missing Target of Act East Policy Another problematic aspect of India’s economic strategy in Asia concerns the countries of Southeast Asia and, in particular, ASEAN member states. Economic and

12

The average data in the table show minor distortions caused by the effects that the recent pandemic has produced on trade flows in the period 2010–2021 of the entire Asian area and of those worldwide. For verification see International Economics, Implications of Coronavirus (COVID-19) on India’s Economy and Trade, https://www.tradeeconomics.com/iec_publication/implications-of-covid-19on-indias-economy-and-trade/. 13 On the different patterns of industrial production between China and India see Beretta and Targetti Lenti (2011) and the references of that article. 14 Aware of the weak exports in of some technology sectors, the Ministry of Electronics and Information Technology recently launched a five-year roadmap to strengthen the sector, which will push production levels from the current 75 to 300 bn USD. One of the strengths of the program lies in the diversification of global value chains. See https://www.livemint.com/news/india/it-ministry-rel eases-five-year-roadmap-for-electronics-sector-in-india-5-points-11643076697247.html.

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Table 2 India trade with China (average data 2014–2021)

India’s Total Trade with China (bn.USD)

79.94

China’s share of India Export

5.46

China’s share of India Import

17.17

a. India’s Trade balance with China (bn.USD)

51.65

b. Share of (a.) in Total trade deficit of India

43.03

Source Sharmila Kantha (2020)

commercial relations with these countries are an indispensable tool of the aforementioned Act East policy for India (Dhruva Jaishanka, 2017). While taking into account the distortions produced by the pandemic in the year 2019–2020, the data in Table 3 highlight some important critical issues in pursuing the objectives of the Act East Policy. First, a structural deficit in the trade balance that originates in large part from the dependence on the regions producing energy raw materials (Middle East, GCC Countries, North Africa). Secondly, an equally problematic dependence on two regions, the first which includes some emerging economies members of ASEAN, the object of India’s geopolitical ambitions, and the second which includes the ‘manufacturing powerhouses’ of the continent, namely China, Japan and South Korea (Northeast Asia). These critical aspects are even more evident if the comparison is restricted to Asia–Pacific (thus excluding the Middle East and the Gulf countries). Compared to the average total imbalance of the period, Northeast Asia and ASEAN do record Table 3 India’s Trade 2014–2020 with Asia and North Africa 1. Total trade 2014–2020 (bn. USD)

2. Average 2014–2020 (bn.USD)

3. % on Average total trade

4. balance of Trade (bn. USD)

5. Average balance 2014–2020

6. % on Average Total Trade

North east Asia

861.41

147.29

34.36%

−414.85

−69.14

− 16.13%

Asean countries

478.19

79.70

18.59%

−95.94

−15.99

− 3.73%

South Asia

148.80

24.80

5.79%

108.57

18.09

4.22%

93.89

15.65

3.65%

−49.66

−8.28

− 1.93%

8.73

1.45

0.34%

−3.57

−0.60

− 0.14%

958.43

159.74

37.27%

−284.08

−47.35

− 11.05%

2549.45

428.63

100.00%

−739.52

−20.54

Oceania *CAR’s Countries Middle East + *GCC Countries + North Africa Tot.

*CAR Central Asia Republics; GCC Gulf Cooperation Council; Our elaboration on data obtained from: Government of India, Department of Commerce, Export Import Data Bank, various Years

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Table 4 India trade with Asean by share of commodities’ sector Export Sector (2 digit)

Import

2014–2015 (%) 2019–2020 (%) 2014–2015 (%) 2019–2020 (%)

Mineral, fuels and derivatives, iron & steel, other metallurgy products

33.79

35.82

36.17

32.51

Food, fisheries and agricultural products (agri-industrial included)

27.13

15.15

23.88

14.67

Chemical, pharmaceutic products

9.98

12.49

8.28

6.84

Manufacturing products

24.48

31.62

30.05

44.02

4.62

4.92

1.63

1.97

100.00

100.00

100.00

100.00

Pearl, precious, jewellery, etc Total

(to India’s disadvantage) –25.7% and –6% differences, respectively. To note, these levels are compatible with the shares that the two regions represent in the trade that India has with them (respectively, 54.8% and 29.6%). Again not surprisingly there is poor economic and trade integration of India within South Asia, with which it enjoys a robust trade surplus (Table 3). China’s close trade ties with Pakistan, the substantial uniformity of India’s productive specialization model (which weakens the effect of comparative advantages) and the persistence of complex non-tariff rules make this region one of the most disconnected regions in the world.15 If we observe the evolution of India’s trade with the ASEAN countries in the period 2014–2015/2019–2021, one can note that, in a relatively short time span, its dependence on the manufacturing sector, less relevant at the beginning of the period, has been exacerbating in recent years (Table 4), while the component of chemical and pharmaceutical products has been rebalancing. Our elaboration from http://www.dgcisanalytics.in/dgcis/EXIM-Analytics#/ home?_g=() However, it should be emphasized that in 2019–2020, compared to approximately 8.5 bn USD of exported manufacturing products, India’s imports amounted to just under 22 bn USD, while recording a substantial balance in the chemicalpharmaceutical sector. Despite these shortcomings, however, India’s economic interactions with ASEAN countries are intensifying after thirty years of interactions

15

The trade agreements adopted by India with some countries in the area in previous years have poorly performed. In particular, the Preferential Trading Arrangement (SAPTA) signed in 2004 within the SAARC (South Asian Association for Regional Cooperation), the ASEAN-India Trade in Goods Agreement (AITGA) signed in 2009 and other bilateral agreements with Sri Lanka and Myanmar. The intensification of Pakistan’s ties with China sealed by the China-Pakistan Free Trade Agreement (CPFTA) signed in 2006 has conditioned the direction of trade flows in the region. See Sinha and Sareen (2020).

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and commitment.16 However, these initiatives run up against structural obstacles which are in turn the result of past choices. In particular, ASEAN countries, with different timescales and in proportion to their respective levels of development, have embarked on a divergent path (the East Asian economic miracle) compared to India, which has instead focused on the diffusion of the labor-intensive manufacturing and export-oriented sectors. The opening to foreign capital and the liberalization of trade, accompanied by interventions in agriculture and education, have favored, despite the recent financial crises, large increases in productivity, allowing some countries to reach the status of middle-income countries. For the countries of Southeast Asia, the advantageous alternative of ever closer integration with China does contribute to the divergence, as compared to India, of their national development path. If the initial thrust of the integration process of China toward Southeast Asian countries fulfills its policy of ‘going out’ undertaken for about a decade, in more recent years a further incentive is represented by the partial shift of the value chains from China to the Southeast Asia, which is partially due to the increase in labor costs in that country and the consequent decentralization of some phases of the production processes. Even if the growth of integration between Southeast Asia and China faces the risk of being reduced by the recent pandemic as well as by the Chinese new course referred to as ‘dual circulation’ (García Herrero, 2021), it is unlikely that it will stop a process that seems to have by now assumed structural characteristics. Proof of this is the fact that China has maintained its position as the first commercial partner of ASEAN since 2009 with an exchange volume that doubled since 2010 (from USD 235.5 bn to 507.9 in 2019, 18.8% of the ASEAN total) and almost quadrupled since 2005 (the year of the signing of the ASEAN-China Trade in Goods Agreement). This pattern has also been fueling an increase in deficits of the countries of the Association from USD 10.4 bn in 2010 at USD 102.9 bn in 2019. In addition, the flow of FDI reached USD 9.1 bn in 2019, 5.7% of the total received by the region, a figure that placed China fourth as a source of capital within the ASEAN’s Dialogue Partners.17

4 An Economic Change of Pace is Needed The long and complex path that India is trying to follow to insert itself in a more active and determined manner into the economic bloc that, on Chinese initiative, was formed east of its borders, and to improve the connectivity network in that area and market, is not without contradictions and uncertainties. Aware of the structural 16

2022 was proclaimed the ‘Asean-India Friendship Year’ to confirm the thirty years of relationships that have given rise to thirty dialogue initiatives within the three pillars:—security, economy, sociocultural integration. See: Udai Bhanu Singh (2011). 17 The intense commercial relations between ASEAN and China are the result of the establishment of the ASEAN-China Free Trade Area (CAFTA) in 2002, which came operational on January 1st 2010. See https://asean.org/our-communities/ economic-community/integration-with-globaleconomy/asean-china-economic-relation/ and http://www.asean-cn.org/index.php?m=content&c= index&a=lists&catid=193.

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weakness of its economy compared to China’s, India continues to show reluctance to participate in the RCEP (Regional Comprehensive Economic Partnership) which entered into force on January 1st, 2022 after the ratification by Australia and New Zealand.18 This plan of remaining ‘outside’, understandable due to the safeguarding of some local products, especially agricultural, is in continuity with the traditional isolationism of the country with respect to some important economic organizations that emerged in Asia. Furthermore, it constitutes an aspect of its protectionist tendencies, as well as the international choices implemented after the Second World War and maintained until the early 1990s.19 However, China’s expansionism in Asia and its attempts at forging extensive economic-trade ties with Asian and non-Asian countries through the construction of infrastructure and investments, have raised an intense debate in the country on whether to join the RCEP (Gulshan Sachdeva, 2018). Despite the lack of involvement in potentially profitable Chinese-sponsored new Silk Road projects, the Indian market has not remained marginal with respect to the Chinese strategy of continental penetration. The modest percentage of Chinese FDI out of the total incoming FDI (approximately USD 2.43 bn, 0.51 of the cumulative investments in the period March 2017–September 2020) (https://www.india-briefing. com/news/india-fdi-policy-position-china-what-we-know-21824.html/) must not be misunderstood, since the largest share of FDI enters into the country via Mauritius and Singapore, two hubs benefiting from tax agreements with India. In reality, investments of over five bn USD calculated only in 2018 (Amit Bhandari et al., 2020) show a strategy of penetrating one of the potentially largest markets in the world. According to a Gateway House Report (ibid.), Chinese economic presence is focused on a wide range of sectors: digital, consumer electronics, e-commerce, logistics, pharmaceuticals, automotive, services (which include financial, banking, insurance, non-financial/business, outsourcing, R&D, courier, tech., testing and analysis). In essence, China aims to control a non-marginal share of activities included in the variegated area of new digital technologies and related sectors.20 A strategy that alarms India’s public opinion and policymakers for the potential negative effects on 18

The RCEP is a predominantly ‘Asian’ agreement, especially of a commercial nature centered on tariffs, which absorbs and simplifies the previous FTA agreements, largely bilateral, between the participating countries (the ASEAN countries and their respective trading partners). It covers 32% of world GDP, in particular due to the weight of China. See https://rcepsec.org/ and Asian Trade Center (2022) The Launch Of RCEP, January 4; http://asiantradecentre.org/talkingtrade/thelaunch-of-rcep. 19 India still remains out of initiatives such as APEC (Asia–Pacific Economic Cooperation) which represents 60% of the world’s GDP and ASEAN + 3 (ASEAN + China, South Korea and Japan). However, since 2016 India is a member of the AIIB (Asian Infrastructure Investment Bank), of which it is the second shareholder with a share capital of 8.6%. At a trans-continental level (with Russian participation) and with a not exclusively economic horizon, India has been a member of the SCO (Shanghai Cooperation Organization) since 2017. 20 Gateways House has identified the presence of important Chinese companies and funds like Alibaba, ByteDance and Tencent which have funded 92 Indian start-ups, including unicorns such as Paytm, Byju’s, Oyo and Ola. Moreover Chinese investors are very active in the start-up fields: more than half of India’s 30 unicorns (start-ups with valuation of over USD 1 billion) have a Chinese investor. See Amit Bhandari, Ibid.

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individual and collective security, for the penetration in platforms and in the national networks of standards and practices connected to external techno-systems as well as for the reduction of the spaces of the national industry.21 Furthermore, if these investments promote innovation in some sectors and contribute to the productivity of the economic system of the destination country, even with the risks highlighted above, they do not improve the scope and quality of the infrastructural system and do not provide a substantial contribution to the integration of the manufacturing sector in Asian and global networks. On the contrary, given the unsatisfactory state of integration and connectivity between India and neighboring regions, it does not take advantage of China’s approach to implementing the BRI infrastructure programs in Asia and in the regions that connect the Asian economy to other world markets. The preferences of foreign investors to intervene in the Indian market’s economic sectors are not, however, exclusive to China, but are consistent with the tendentious choice of favoring services, telecommunications and trading over the manufacturing sector, probably also due to the constraints still present in the country despite the liberalizing reforms of the 1990s. In particular, if we examine the shares of FDI by sector in the year 2019–2020 (Table 5), a year affected by backlash of the pandemic, the services, digital, telecommunications and trading sectors absorb almost 50% of the resources invested, a value higher than the cumulative sum of the resources invested in the same sectors in the period 2000–2021 (43%) (Government of India, 2021). Therefore, if the decision not to join the BRI is understandable for geostrategic reasons and due to problematic economic-financial relationships that the initiative creates for countries part of the BRI, Indian policymakers are in any case called upon to tackle the problem of investments in physical capital. It is a crucially important choice both to improve the provision of infrastructure functional to the program and to expand and deepen the connectivity networks with the other neighboring regions, consistent with the objectives of India’s ‘Act East’ policy, and for a better insertion of the Indian manufacturing sector in Asian value chains. Despite the resumption of FDI in the financial years 2019–2020 and 2020–2021, which places the country among the top 20 FDI host economies and makes it the largest host in the sub-region, the formation of nationally sourced capital is an essential condition for the achievement of the aforementioned objectives and must correspond to an ‘environment’ that favors the completion of reforms, which are decisive for economic development, especially in sectors where inefficiencies and protectionism prevail.22 The ambition is to overcome the dichotomy characteristic of an economy, such as the Indian one, which indeed displays some favorable macroeconomic indicators but also typical features of an underdeveloped economy. 21

Recently, the Indian government has considered more stringent approval measures for FDI from ‘border’ countries to avoid “curbing opportunistic takeovers/acquisitions of Indian companies due to the current Covid-19 pandemic”. See Deepshikha Sikarwar (2021). 22 Isha Agarwal and Eswar Prasad identify the reforms in the banking system and the financial market as a key factor in completing the process of modernization of the Indian banking and financial system, which are still stiffened by the excessive presence of the public sector and by poor competitiveness and efficiency. See: Agarwal and Prasad (2018).

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Table 5 Sectors attracting highest FDI equity inflows 2019–2020 (April–March) (mil.USD)

% Total FDI

Services sectors**

7.85

23.30

Computer software & hardware

7.67

22.76

Telecommunications

4.45

13.19 13.57

Trading

4.57

Automobile Industry

2.82

8.38

Construction development

0.62

1.83

Construction, (infrastructures) activities (INFRASTRUCTURE) ACTIVITIES

2.04

6.06

Chemical (other than fertilizes)

1.06

3.14

Drugs & pharmaceuticals

0.52

1.54

Metallurgical industries

2.10

6.23

Total Highest

33.71

67.44

Total FDI

49.977

100.00

**Services sector includes Financial, Banking, Insurance, Non-Financial/Business, Outsourcing, R&D, Courier, Tech. Testing and Analysis, Other. Our elaboration on data obtained from Government of India (2021)

Taking into account that the gross fixed capital formation has undergone a significant slowdown starting from 2013, after the high levels recorded in the 2004–2012 period, and has been further compromised in recent years due to the pandemic (https://tradingeconomics.com/india/gross-capital-formation-percentof-gdp-wb-data.html#:~:text=Gross%20capital%20formation%20), India benefits from some substantial advantageous factors. In addition to an appreciable ranking in terms of destination of foreign capital, India stands out in fact for a high rate of savings and investment, for a public debt denominated in domestic currency and predominantly held by Indians and for a favorable external position due to adequate foreign exchange reserves for precautionary purposes.23 A public investment policy is therefore indispensable in order to attract private investments necessary to maximize the country’s growth potential, especially to create the infrastructure for connectivity and integration with the value chains that currently see China as a key player in Asia.24 The ‘China connectivity revolution’ (Baruah & Mohan, 2018) in fact presses India to strengthen its presence in the ‘corridors’ more functional to its geopolitical interests: among these, the South-Bengal 23

The investment rate (% GDP) has fluctuated around 30% in the last five years and the IMF expects a value of around 31% in the next five years, while the savings rate has recorded values of around 30% for the same periods. See: International Monetary Fund (2021). 24 Raghuram Rajan focuses on a more resolute action in order to attract “stable capital flows that will stay for the long run…encourage infrastructure projects and other projects that have limited foreign earnings…” but overall “…encourage foreign investors to ‘Make in India’”. See: Rajan (2016).

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corridor that connects India with Southeast Asia and strengthens the commitment already stipulated in the SAARC and BIMSTEC initiatives.25

5 Some Competitiveness Comparisons and Conclusions If the future of Asia is promising, at least according to the Western view, that of India on the other hand appears fraught with difficulties. A country of significant potential, with millenary history and traditions and a democratic system that represents a reference for both Asia and other areas of the world, India is facing a challenging crossroad. While its geopolitical ambitions project it toward a wider continental area, its economic resources (not to mention the linguistic, ethnic and religious heterogeneity of its population) set a serious limit to its leadership. It was emphasized that Chinese activism, aimed at integrating the regions of South Asia and Southeast Asia with its economic system through ‘corridors’ and logistics and infrastructure networks, functions as a powerful barrier against competitors. India’s choice to remain ‘neutral’ with respect to the BRI, as it is concerned about the ‘encirclement’ implemented by its Chinese neighbor both on the continent and in the Indo-Pacific region through the ‘Maritime Silk Road’,26 is confronted with obstacles that are difficult to overcome. This choice might confine India to a residual position with respect to infrastructural initiatives of strategic importance, preventing it from pursuing, with adequate times and methods, the objectives of connectivity and integration with the East Asia countries and in particular with ASEAN members. If India is unlikely to compete with the positions of the dominant players in the regions that fall within its strategic horizons (East Asia and Indo-Pacific) in the short-medium term, it will have to pursue adequate development policies and complete the reforms initiated in the 1990s. Since the contribution of foreign capital, although significant compared to the Indian GDP, has a selective destination that favors the ‘intangible’ sectors of new technologies and in any case the service sector, a reform commitment is required among Indian policy makers in the manufacturing and infrastructural sectors, in banking/finance and labor. However, some economic interventions undertaken in recent years indicate a positive reform commitment functional to making the country’s economy compatible with its geopolitical ambitions. The reduction of corporate tax, one of the highest in the world, tax concessions in favor of cross-border investments (ending retrospective tax reduction), the partial opening to foreign investments in sectors previously excluded, are signs of openness, even if the abolition or the reduction of many constraints and rigidities remain 25

SAARC: South Asian Association for Regional Cooperation is the regional intergovernmental organization and geopolitical union of states in South Asia (1985); BIMSTEC: Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation is a regional organization comprising seven Member States lying in the littoral and adjacent areas of the Bay of Bengal constituting a contiguous regional unity (1997). On this issue see: Bhandari (2021). 26 https://www.unwto.org/maritime-silk-road. For an interesting analysis of the strategic importance of the Indo-Pacific for the countries of the area and for China see: Sam Bateman et al. (2017).

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the subject of persistent political and social disputes. To sum up, the path the country must pursue cannot be the one described by Ruchir Sharm in ‘Foreign Affairs’ who states: “India’s complex polity makes it impossible for anyone leader to push a reform agenda aggressively as leaders in China have in the past, commandeering land for development, opening borders to trade, shuttering state factories, and killing off millions of redundant jobs” (Ruchir Sharma, 2019), at the same time India cannot resign itself to a fate of ‘stalled rise’ and ‘stifled growth’ (Subramanian & Felman, 2022). As final thoughts, also to better clarify the above considerations, it is useful to refer to the data that a European research institute, the IMD World Competitiveness Center of Lausanne, annually draws up since 1989. The IMD Center makes available to scholars and practitioners the IMD World Competitiveness Yearbook on the basis of information provided by institutions of individual countries considered (for India the National Productivity Council). With reference to 2021 (IMD World Competitiveness Center, 2003/2021), the Yearbook is listing the remaining five challenges that India is called upon to face. If two of them (“Minimizing negative impact of COVID-19 on society and economy” and “Ensuring speedy vaccination of the entire population”) concern the pandemic still ongoing worldwide, the size of India as well as the extent and territorial dislocation of its population gives both recommendations particular importance and urgency: those two challenges cannot not be separated from the other three, namely “Addressing poverty and gainful employment”, “Balancing fiscal deficit, economic growth and employment generation” and “Resources mobilization for infrastructure development”, each of them correlated internally and with each other. As for the “Overall Performance”, India ranks 43rd among the 64 countries considered by the Yearbook, in a constant relative position compared to the previous two years (2019 and 2020) and slightly better than the 2018 ranking (44th). If the challenges India has to face are those reported (two relatively transitory but all five of strategic importance), the assessment of the country’s overall competitiveness (43rd out of the 64 countries analyzed) originates from the measurement of four criteria, each of which in turn is divided into five parameters. The first criterion is that of Economic Performance assessed on the basis of: (1) Domestic Economy, (2) International Trade, (3) International Investment, (4) Employment and (5) Prices. If the evaluation of the first four parameters places India in a better position than the overall one (the values of the relative international positions are in fact 30, 26, 28 and 28) it is with reference to the fifth, that relating to ‘prices’, that the position of the country worsens significantly, settling at level 55. As for the criterion of the overall Economic Performance, India is ranked 37th among the 64 countries considered, losing ground in comparison with the previous four years, since it was 18th in 2017, 21st in 2018, 24th in 2019 and 37th in 2020. The second criterion is that of Government Efficiency assessed on the basis of: (1) Public Finance (position 41), (2) Tax Policy (position 34, the best of the criterion), (3) Institutional Framework (position 45), (4) Business Legislation (position 43) and (5) Societal Framework (position 53, the worst of the criterion): despite the high variability of the position of the individual parameters, the overall position is relatively stable over the five-year period, even signalling a slight improvement (48th in 2017, 50th in 2018, 46th in 2019, again 50th

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in 2020 and again 46th in 2021). The third criterion is that of Business Efficiency assessed on the basis of: (1) Productivity and Efficiency (position 45), (2) Labor Market (position 15), (3) Finance (position 28), (4) Management Practices (position 36) and (5) Attitudes and Values (position 22): in addition to a high variability of the relative position of the individual parameters, there is also a slight worsening of India’s Business Efficiency in the international ranking (29 in 2017 and 2018, 30 in 2019, 32 in 2020 and 2021). The fourth criterion (strategic for the country given, among other things, its size and the federal structure of its political system) is that relating to Infrastructure, assessed on the basis of: (1) Basic Infrastructure (position 45), (2) Technological Infrastructure (position 21), (3) Scientific Infrastructure (position 28), (4) Health and Environment (position 64) and (5) Education (position 59). Even within these areas, a high variability of the ranking can be noted, but also significant deficiencies in particular in the environmental and health sectors and in the basic infrastructure sector. As for the level and trend over time of this ranking India’s position is not favorable (although improving), ranging from 60th place in 2017 to 56th in 2018 to 55th in 2019, and finally to 49th (same ranking in 2020 and in 2021). The table below shows the data from 2017 to 2021, by the international position of India with reference to each of the four criteria used by the IMD World Competitiveness Yearbook to evaluate the overall performance (Overall Ranking) of the country in the same period. In the last column of the table the values of the same criteria estimated with reference to 2003 are shown (Table 6 and Fig. 1). Table 6 India in the overall ranking 2003

2017

2018

2019

2020

2021

Economic Performance

12

18

21

24

37

37

Government Efficiency

19

48

50

46

50

46

Business Efficiency

19

29

29

30

32

32

Infrastructure

27

60

56

55

49

49

Overall Ranking

20

45

44

43

43

43

Source IMD World Competitiveness Center (2003/2021).

Fig. 1 India’s ranking in the competitive trend (Source https://worldcompetitiveness.imd.org/cou ntryprofile/IN/wcy

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In conclusion, for the Indian ‘system’, which in the years at the turn of the millennium had reached the 20th place in world rankings. This is the result of not too divergent ‘sectorial’ positions and trends (positive those of economic performance, and less satisfactory those of infrastructures). The data on the five-year period 2017– 2021 instead show: (1) a marked worsening in the Economic Performance ranking over the entire five-year period, (2) a relative stability, but at much lower levels than twenty years earlier, of India’s international position in terms of Government Efficiency, (3) a similar stability, still at an unfavorable position but with better absolute values, of Business Efficiency, (4) a trend toward a slight recovery, but in correspondence with particularly negative values, of Infrastructure, (5) a significantly worsened position as a result (43rd place in the rankings in 2021 compared to the 20th in 2003, as mentioned above) of the overall ranking of the system. However, the importance of the commercial and financial relations that India has with partner countries in Asia makes it appropriate to add some synthetic but comparable data relating to these countries with reference to the same criteria, their international position and corresponding trends. The partner countries considered are China, Indonesia, Korea, Malaysia, Thailand. As regards the main competitor in Asia, China, the values of its international position in terms of Economic Performance in the five-year period 2017–2021 are largely positive although they signal a contraction in the last two years: 2nd in the first 3 years, subsequently 7th in 2020 and 4th in 2021. As for Government Efficiency, China recorded, in the five-year period, better position values after an unfavorable starting: respectively, 45, 46, 35, 37 and finally 27. Stable and highly positioned are instead the rankings for Business Efficiency: 18, 15, 15, 18 and 17. The international position of China in the Infrastructure sector also improved: respectively, 25, 19, 16, 22 and 18. As a result, the overall position of China has tended to improve over the five-year period, with the following rankings: 18 in 2017, 13 in 2018, 14 in 2019, 20 in 2020 and 16 in 2021.27 In Indonesia, the values of the country’s international position in terms of Economic Performance 27

The IMD World competitiveness Yearbook 2021 expresses itself (p. 27) very positively on the performance of China in 2021. It emphasizes in particular: “China improves…as a result of advancements in all competitiveness factors. In economic performance, it shows a strong recovery in international trade (when compared to 2020). There is a sharp improvement in government efficiency, mainly because of hefty boost in tax policy but also to lesser increases in public finance, business legislation and institutional framework. Despite a downturn in productivity, labour market, management practices and attitudes and values, business efficiency shows a slight gain. This is due to an improvement in finance, all sub-factors of infrastructure improve with the exception of scientific infrastructure which remains in the same position”. On the same page, the report instead limits itself to noting that “India remains at position 43” when analyzing the international position of the Indian economy. In the IMD World competitiveness Yearbook 2003 (p. 33), the assessment on China’s performance is equally positive (in fact, the 8.0% growth rate in 2002 and 9.9% in the first quarter of 2003 is underlined); that on India, in turn, is certainly problematic but still careful to highlight the potential of the system. In fact, it is stated that “India’s relatively weak performance in 2002 at 4.4% growth (compared to 5.6% in 2001) is probably the result of a difficult year in the agricultural sector, which accounts for about one fourth of the GDP. However, India has ‘pockets’ of competitiveness, which are not to be underestimated, especially the region of Bangalore, or the states of Maharashtra or Gujarat. India has a huge reserve of qualified, English-speaking workers, who are more and more recruited by global companies for back office and processing activities”.

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recorded a trend comparable to those of India, starting from a significantly worse value in 2017 (33 against 18 in India) to settle on a slightly better one in 2021 (35 against 37 in India): in the intervening years the values were 27 against 21, 25 against 24 and 26 against 37. On the other hand, the position of Indonesia regarding Government Efficiency is systematically better than the Indian one over the entire period (from 30 against 48 to 36 against 50 to 25 against 46 to 31 against 50, and finally to 26 against 46). Although initially worse, the comparative Business Efficiency of Indonesia is progressively improving (from 30 against 29 for India to 35 against 29 to 20 against 30 to 31 against 32, and finally to 25 against 32). As for Infrastructure, the values taken on by the international position of the two countries are systematically similar throughout the period, however showing a worsening of Indonesia over the last two years, the respective values being: 59 against 60 for India, 59 against 56, 53 against 55, 55 against 49 and finally 57 against 49. The overall international position of Indonesia is, on the whole, systematically higher than that of India, although only slightly: 42 against 45 in 2017, 43 against 44 in 2018, 32 against 43 in 2019, 40 against 43 in 2020 and 37 against 43 in 2021. Korea, for its part, maintains a generally uniform international position over the entire period, and is constantly higher than that of India in terms of Economic Performance, however reporting a marked improvement at the end of the period, the relative values being 22, 20, 27, 27 and 18 in the six years considered.28 A similar trend, and the same ratio compared to Indian values, is recorded for Government Efficiency (with positions 28, 29, 31, 28 and 34 over the five-year period). The positive trend of the Korean position with regard to Business Efficiency is also significant and stable, with values that improve with time, from 44 to 43 to 34 to 28 and lastly to 27. As for infrastructure, Korea maintains a constant international position over the entire five-year period (24, 18, 20, 16, 17 in the five years considered) placing itself in a decidedly favorable position with respect to both India and Indonesia and comparable with that of China. Substantially stable, albeit with a significant improvement at the end of the five-year period, the overall position of the country, is still at levels lower than the Chinese ones, but higher than both the Indian and the Indonesian ones (precisely 29, 27, 28, 23, 23). Malaysia is another significant competitor of India. As for Economic Performance, its international ranking is high in the five-year period (13, 8, 11, 9, 15), second only to that of China, while Government Efficiency is placed at lower levels (25, 23, 24, 30, 30). The performance of Business Efficiency (19, 17, 18, 29, 24), in turn, is better than both the Indian and the Indonesian and Korean ones. As for infrastructure, Malaysia ranks lower than both China and Korea, but higher than 28

Even in 1985, well before the reforms of the early 1990s, India was included, with other Asian countries including Korea (but also Hong Kong and Singapore), in the group of ‘semi-peripheral’ systems according to the ‘dependency/world-systems’ à la Wallerstein, in the essay by Roger et al. (1985). In turn, the two authors were inspired, however, limiting their analysis to the economic aspects of the relationships between systems, by the pioneering work of Snyder and Kick (1979), who extended the reference parameters from trade to geopolitical variables (Military Interventions, Diplomatic Exchanges, Treaty Membership) also placed India in an area between the ‘peripheral’ and ‘semi-peripheral’ countries, with other Asian countries including Taiwan, Pakistan and Malaysia.

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Table 7 Overall and factor rankings 2003

2017

2018

2019

2020

2021

India

20

45

44

43

43

43

China

12

18

13

14

20

16

Indonesia

28

42

43

32

40

37

Korea

15

29

27

28

23

23

Malaysia

4

24

22

22

27

25

Thailand

10

27

30

25

29

28

Source IMD World Competitiveness Center (2003/2021)

India and Indonesia. Overall, Malaysia surpasses Korea in the first three years of the five-year period but falls behind it in the last two (24, 22, 22, 27, 25), ranking overall behind China but ahead of India and Indonesia. Finally, as for Thailand, its Economic Performance is better than that of Malaysia in the first three years of the five-year period (10, 10, 8), but is placed in a lower position (14, 21) in the last two, still overtaking the other countries considered (including India) with the exception of China. Its position tends to be constant over time in terms of Government Efficiency (20, 22, 20, 23, 20), like that of Business Efficiency, with an improvement trend in the last two years (25, 25, 27, 23, 21). As for Infrastructure, the country’s position is significantly backward, albeit slowly improving (49, 48, 45, 44, 43), but still more favorable than that of India and Indonesia. The country’s Overall Performance is similar to that of Korea and Malaysia, but higher than that of India and Indonesia (27, 30, 25, 29, 28 in the five-year period) (Table 7). The relatively low value of India’s international position in terms of overall competitiveness and its relative stationarity over the last five years justify, in conclusion, the reservations made about the Indian system’s suitability to pursue successfully its own geopolitical ambitions. The permanent structural weaknesses, which can be seen largely, but not exclusively, in the sectors most sensitive to efficiency requirements, and in particular in the infrastructure sector, especially in the health, environmental and education sectors, in fact hinder India’s achievements of its geopolitical objectives. These considerations also appear to be supported both by the comparison between India’s current international competitive position and that recorded at the beginning of the millennium, and by the similar values relating to other countries in the Asian area, in particular China and Korea.

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International Economics, Implications of Coronavirus (COVID-19) on India’s Economy and Trade. https://www.tradeeconomics.com/iec_publication/implications-of-covid-19-on-ind ias-economy-and-trade/ International Monetary Fund. (2021, October). India. Country Report, No. 21/230. Jaishanka, D. (2017, May). Actualising East: India in a multipolar Asia. ISAS Insights, Institute of South Asian Studies, National University of Singapore, No. 412–23. Jaishankar, D. (2019, October). Acting East: India in the Indo-Pacific. (Brookings India Impact Series 102019-02). Brookings Institution India Center. Kantha, S. (2020). Changing patterns in India-China trade (ICS Occasional Paper No. 39). Institute of Chinese Studies. http://www.dgcisanalytics.in/dgcis/EXIM-Analytics#/home?_g=() McKinsey Global Institute. (2019, September). The future of Asia (p. 5). McKinsey Global Institute. (2020, August). Risk, resilience, and rebalancing in global value chains. Rajan, R. (2016, 12 March 2016). India in the global economy. Text of the First Ramnath Goenka Memorial Lecture by Dr Raghuram Rajan, Governor of the Reserve Bank of India. https://www. bis.org/review/r160316b.pdf Roger, J., et al. (1985). International trade and world system structure: A multiple network analysis. Review, 8, 517–560. Romei, V., & John Reed, J. (2019, March 26). The Asian century is set to begin. Financial Times. Sachdeva, G. (2018). Indian perceptions of the Chinese Belt and Road Initiative. International Studies, 55(4). https://doi.org/10.1177/0020881718807359 Sam Bateman, S. et al. (Eds.). (2017, July). Asean and the Indian Ocean the key maritime links (RSIS Monograph No. 33). S. Rajaratnam School of International Studies. Sharma, R. (2019, March/April). No country for strongmen, How India’s democracy constrains Modi. Foreign Affairs, 98(2), 96. Sikarwar, D. (2021, March 3). Large Chinese FDI only in sectors critical for India. The Economic Times. https://economictimes.indiatimes.com/news/economy/finance/large-chinese-fdi-only-insectors-critical-for-india/articleshow/81302189.cms Singh, N. (2009, May). India’s development strategy. Accidents, design and replicability (UNUWIDER, Research Paper No. 2009/31). United Nation University. Singh, U. B. (2011, November 29). ASEAN—India Summit 2021: Outcomes and prospects. MPIDSA, Issue Brief. https://www.idsa.in/issuebrief/asean-india-summit-2021-ubsingh-291121021 Sinha, R., & Sareen N. (2020, May). India’s limited trade connectivity with South Asia. Brookings India, Policy Brief. https://www.brookings.edu/research/indias-limited-trade-connectivity-withsouth-asia/ Snyder, D., & Kick, E. L. (1979, March). Structural position in the world system and economic growth, 1955–1970: A multiple-network analysis of transnational interaction. American Journal of Sociology, 84, 1096–1126. Subramanian, A., & Felman, J. (2022, January/February). India’s stalled rise, how the state has stalled growth. Foreign Affairs, 101, 1. Tonby, O., et al. (2019, September). The future of Asia (Discussion paper, p. 42). McKinsey Global Institute.

India and International Trade Gianluca Rubagotti

Abstract This chapter gives an overview of India’s role in international trade. After a brief introduction on the evolution of the multilateral system of international exchanges in goods and services, the focus will be on India as a global trade actor. Firstly, the case of India’s position in the negotiating processes, notably in the agricultural sector, will be outlined. Secondly, the level of India’s integration in the global system will be measured against the manner in which some of the most important rules of the World Trade Organisation (WTO) are applied domestically, especially in terms of customs duties. Thirdly, due consideration will be given to the participation of the country in the dispute settlement mechanism of the WTO. Finally, the focus will shift from the multilateral to the bilateral and regional dimensions, where India faces both challenges and opportunities, which will be highlighted also in a post-COVID world.

1 Introduction: Globalisation and the Establishment of the World Trade Organisation The multilateral system of international trade in goods and services has developed, since the end of World War II, into a more and more structured set of rules which apply to an increasing number of countries and territories. The underpinning economic theories are those elaborated by David Ricardo, starting from that of ‘comparative advantage’, according to which every country should specialise and invest in what it does best, and sell those products to the rest of the world, instead of trying to produce something at a lesser level of efficiency compared to other countries.1 The result—at least so the theory goes—will be a ‘win–win’ situation, in terms of an increase in international exchanges and therefore in global wealth. 1 The theory was then refined through new models, such as the Heckscher-Ohlin, which focuses on the factors endowments of a particular country or region.

G. Rubagotti (B) Ministry of Foreign Affairs, Rome, Italy e-mail: [email protected] © Springer Nature Switzerland AG 2023 S. Beretta et al. (eds.), India’s Foreign Policy and Economic Challenges, Global Power Shift, https://doi.org/10.1007/978-3-031-20270-4_6

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The debate, both at academic and journalistic levels, on what globalisation exactly means has intensified significantly with the establishment of the World Trade Organisation (WTO) in 1995 (Van den Bossche & Zdouc, 2017), The starting point to define globalisation, on which general consensus has emerged, is the integration of markets, which means the possibility of moving goods, services and people in a faster and more efficiently. Joseph Stiglitz, in 2002, defined globalisation as ‘the closer integration of the countries and people of the world, which has been brought about by the enormous reduction of costs of transportation and communication, and the breaking down of artificial barriers to the flow of goods, services, capital, knowledge, and (to a lesser extent) people across borders’ (Stiglitz, 2002), while Thomas Friedman had previously highlighted how ‘it is the inexorable integration of markets, nation-states and technologies to a degree never witnessed before’ resulting in an interaction between individuals and between States and individuals (including corporations) ‘farther, faster, deeper and cheaper than ever before’ (Friedman, 2000). The emphasis is therefore on the creation of a borderless global economy in which the production factors move without limits or boundaries, and according to Friedman (Friedman, cit., p 47) this has become possible through the process of democratisation as regards technology, finance and information. In other words, many more people than in the past can take advantage of better technology, more diversified finance options and more information. Although a more direct access for a higher number of persons cannot be denied, after 25 years we should maybe wonder if this is really what democracy means, in terms of actual and effective empowerment of people, given the reduced role of public institutions, traditionally considered the guardians of people’s needs, in favour of private actors, whose interests do not necessarily move in the direction of the common good.2 A crucial point in the history of the integration of markets is therefore January 1st 1995, the day when the World Trade Organisation (WTO) started operating. The WTO is an international organisation, based in Geneva, with a membership of 164 States and territories, representing 98% of world trade. The accession process is a dynamic one, and today over 20 countries are seeking to join the WTO.3 Its functions, as set out in the Marrakesh Agreement,4 governing the organisation, are: administering WTO trade agreements, acting as a forum for trade negotiations, handling trade disputes, monitoring national trade policies, providing technical assistance and training for developing countries, cooperating with other international organisations. 2

See Rodrik D (1997) Has Globalization Gone Too Far? Institute for International Economics, p 85: “Globalization […] is part of a broader trend that we may call marketization. Receding government, deregulation, and the shrinking of social obligations are the domestic counterparts of the intertwining of national economies. Globalization could not have advanced this far without these complementary forces”. 3 According to the WTO website (https://www.wto.org/english/thewto_e/acc_e/acc_e.htm), the Countries whose accession process is in progress are: Algeria, Andorra, Azerbaijan, Bahamas, Belarus, Bhutan, Bosnia and Herzegovina, Comoros, Curaçao, Equatorial Guinea, Ethiopia, Iran, Iraq, Lebanese Republic, Libya, Sao Tomé and Principe, Serbia, Somalia, South Sudan, Sudan, Syrian Arab Republic, Timor-Leste, Uzbekistan. 4 The Marrakesh agreement was signed on 15 April 1994.

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Such an ambitious scope of action was considered necessary, and the emergence of a supranational effective institutional framework was the only way to govern the system, especially considering the shortcomings of the previous regime, centred on the General Agreement on Tariffs and Trade (GATT), signed in 1947 after difficult negotiations and hailed as a new beginning, albeit with a less ambitious outcome than many had hoped for, as the world which was recovering from the devastations of WWII (Santana, 2017). The main features of the GATT system, which underpin the international regime of trade exchanges until today, are the principle of nondiscrimination, with both an external (no discrimination between foreign products) and an internal (no discrimination against foreign products) dimension, the prohibition of quantitative restrictions, the provision of tariff concessions, and a continuous negotiation process. Nevertheless, over the years, the shortcomings of the GATT system emerged, and the international community felt the need of an institutional framework which could at the same time allow goods and services to flow more easily, without every country having the possibility to block the process, and guarantee the rights of all members. The rules set out in the GATT were often too easy to circumvent, important sectors of international exchanges, like services and intellectual property rights, were not included, the resolution of disputes could be blocked by a single member (evidently the one fearing of losing the case). With the Marrakesh Agreement the new system of international exchanges of goods and services was established: a stronger institutional framework guaranteed by the World Trade Organisation, clearer rules,5 a broader scope of the covered-sectors, with the inclusion of services and intellectual property rights,6 a permanent and independent body to settle the disputes arising between member states, the introduction of the so-called ‘inverted consensus’. According to this principle, instead of giving every single member the power to block the main decisions through the rule of consensus, these are adopted unless all WTO member states oppose, including the countries that would benefit, making this possibility extremely unlikely. After 25 years, in a world still shaken by unintended consequences of globalisation, the unhindered movement of a highlyinfectious virus like COVID-19, we can ask ourselves: how has India taken part in and contributed to the shaping of the new order? In this chapter, we will try to highlight how India has contributed to the multilateral system of international exchanges of goods and services in three ways: (a) in the different negotiation rounds, with a focus on the agricultural sector; (b) in the internal application of the rules, analysing in particular the tariffs structure; (c) in the participation in the system of dispute resolution. Furthermore, we will try to outline the role of India in a regional context, in line with the recent trends of finding a more limited geographic ambit of trade exchanges. 5

As opposed to the original GATT, the new version emerging from the Marrakesh Agreement is referred to as GATT 1994. 6 The regulation of international exchange of services is contained in the GATS (General Agreements of Trade in Services), while intellectual property rights are covered by the TRIPs (Trade-related Intellectual Property rights).

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2 India as a Global Actor in the International Trade Exchanges India has seen its economy growing constantly in the recent years, regularly achieving annual growth of between 6–7%, before the outbreak of the COVID-19 pandemic. Recent data from the International Monetary Fund place India as the world’s fifth largest economy in 2019, in terms of nominal GDP, leapfrogging France and the United Kingdom. This result is even more important if we consider that in 2010 India ranked 9th, behind Brazil and Italy, and since 1995, the country’s nominal GDP has increased by more than 700%.7 Also India’s integration in global markets is progressively increasing. Traditionally, India has implemented an inward-looking model of economy, based on import-substitution policies in the industrial sector and high-protective measures for agricultural production. The latest data collected by the WTO (https://www.wto.org/english/res_e/statis_e/statis_maps_e.htm) demonstrate that trade has become a significant part of the domestic economy, accounting for 20.4% of GDP for the years 2016–2018. However, the role in the global system of free exchanges varies depending on what is being traded in terms of goods and services. If we compare more specific data with the performance of India’s neighbour and main competitor, China, a significant gap exists in merchandise trade, for which India’s share in world total export amounts to just 1.71%, compared to China’s 13.21%. One of the main strengths of India’s economy, on the other hand, is services, and in fact the margin with China narrows down significantly, with the former’s share in commercial services world total exports at 3.52%, compared to the latter’s 4.64%.8 But as explained above, we will try to assess the integration of India into the overall system under different angles. We will start with the contributions, particularly in the agricultural sector, to rule-creation, which is fundamental in a regulated system like the present one. Then we will try to understand how such rules are implemented domestically, with a focus on the domestic customs duties policies, and finally we will look at the participation in the resolution of disputes, through the different roles that can be played (as a complainant, as a defendant and as a third party).

3 India Negotiating the Rules India is one of the 23 founding members of the GATT, which means its voice has always been one to consider. The main idea underpinning the Indian position and positioning in trade negotiations can be identified as the attempt to bring about a common vision within the community of developing countries, which could prevent 7

See the International Monetary Fund World economic outlook, at this website page https://www. imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD. 8 See https://www.wto.org/english/res_e/statis_e/daily_update_e/trade_profiles/IN_e.pdf for India and https://www.wto.org/english/res_e/statis_e/daily_update_e/trade_profiles/CN_e.pdf for China.

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the imposition of a Western-dominated agenda. India in fact is a leader of different negotiating groups recognised in the WTO system, like G-339 and G-20,10 whose positions have become more difficult to ignore. Although its interests span over different sectors, there are some negotiations in which India managed to play a more decisive role, notably in agriculture, still today a backbone of the country’s economy and society. The history of post-independence India shows a focus more on domestic than on international markets, as reflected in such policies as import substitution, protection of infant industry and of agricultural production. After the establishment of the WTO, negotiations took place every two years, the so-called Ministerial Conferences.11 The presence of India in the first appointments, Singapore 1996 and Geneva 1998, passed unnoticed, and it was only in Seattle, in 1999, at the memorable Ministerial Conference that saw massive demonstrations in the streets against the newly-established world order, that India became more vocal. Its voice though was mainly used for protesting against developed countries (Himanshu Arora, 2007). The turning point was the Doha Development Round, launched in November 2001 with the ambitious objective to achieve major reforms of the international trading system through the introduction of lower trade barriers and revised trade rules, while at the same time improving the trading prospects of developing countries.12 From this moment onwards India’s role was not limited to protesting against the developed countries, but included a more structured approach of building a bloc of like-minded emerging economies to defend their interests in a delicate sector like

9

The group in reality comprises 44 members: Antigua and Barbuda, Barbados, Belize, Benin, Bolivia, Botswana, China, Congo, Côte d’Ivoire, Cuba, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, India, Indonesia, Jamaica, Kenya, Korea, Madagascar, Mauritius, Mongolia, Mozambique, Nicaragua, Nigeria, Pakistan, Panama, Philippines, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Senegal, Sri Lanka, Suriname, Chinese Taipei, Tanzania, Trinidad and Tobago, Turkey, Uganda, Venezuela, Zambia, Zimbabwe. According to the WTO website (https://www.wto.org/english/tratop_e/dda_e/ negotiating_groups_e.htm#GRP017) it is described as a ‘coalition of developing countries pressing for flexibility for developing countries to undertake limited market opening in agriculture’. It is also called ‘friends of special products’ in agriculture. 10 See footnote 18 below, for the list of the 23 Countries of the group. It is not to be confounded with the international forum bringing together the world’s major economies. Its members account for more than 80% of world GDP, 75% of global trade and 60% of the population of the planet. See https://www.g20.org/. 11 According to Article IV, paragraph 1, of the WTO Agreement, ‘There shall be a Ministerial Conference composed of representatives of all the Members, which shall meet at least once every two years. The Ministerial Conference shall carry out the functions of the WTO and take actions necessary to this effect. The Ministerial Conference shall have the authority to take decisions on all matters under any of the Multilateral Trade Agreements, if so requested by a Member, in accordance with the specific requirements for decision-making in this Agreement and in the relevant Multilateral Trade Agreement’. 12 For an analysis of India’s positions in the Ministerial Conferences until the run-up to the Hong Kong one, in 2005, see Brummer J (2205), India’s negotiation positions at the WTO. November, available at this webpage: http://library.fes.de/pdf-files/bueros/genf/50205.pdf.

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agriculture. India has emerged as one of the major players in the G-20 group, established just before the official starting of the 2003 Cancun Ministerial Conference. It comprises 23 WTO members13 from three different continents (Africa, Asia and America), representing more than two-thirds of the world’s rural population and almost one-third of the total agricultural exports. Their main objective in negotiations was to achieve ambitious reforms of agriculture in developed countries with some flexibility for developing countries, as a concrete application of the principle of special and differential treatment.14 It was in Bali in 2013 that India’s firm position had to be reckoned with: the Ministerial Conference15 ended with one agreement on trade facilitation and relevant amendments in the sector of agriculture, starting from a stricter regulation of public stockholding, procurement and distribution by government agencies, for food security purposes. India threatened to block the final declaration but in the end agreed on a peace clause that should protect developing countries from any WTO dispute brought forward by highly-developed countries until a permanent solution in the matter was achieved. The underlying reason for such a strong position was the need to guarantee some political margins to the domestic subsidies for the farmers in case of need. The rigidity of India in reality was not supported by the vast majority of developing countries, and it received the backing only of Cuba, Bolivia and Venezuela, three countries with a strong ideological approach to matters relating to international trade. All WTO members were given 6 months to ratify the agreement, and India was the only one strongly voicing its opposition. This was the first time that the position of India resonated so profoundly, and all major players had to recognise that without New Delhi on board, the whole system could collapse. After that, the U.S. initiated bilateral talks with India, and in the end a solution was found, which sought to address New Delhi’s concerns. India’s government was very satisfied with the outcome,16 which made it possible to continue the policy of support for minimum prices in agriculture. This is deemed as of paramount importance to address the concerns for millions of low-income farmers, as well as a guarantee in terms of food security. But moving from the domestic to the multilateral level, it is important to 13

The present WTO members, according to the WTO website, (https://www.wto.org/english/tra top_e/dda_e/negotiating_groups_e.htm#GRP017) are: Argentina, Bolivia, Brazil, Chile, China, Cuba, Ecuador, Egypt, Guatemala, India, Indonesia, Mexico, Nigeria, Pakistan, Paraguay, Peru, Philippines, South Africa, Tanzania, Thailand, Uruguay, Venezuela, and Zimbabwe. 14 In the WTO system there are sets of rules which give developing Countries special rights (like for instance longer time periods for implementing Agreements, or measures to increase trading opportunities). The logic of extending special and differential treatment to the developing countries is that these economies are at a lower level of the development phase compared to the developed countries. 15 For the outcome of the Ministerial Conference as well as the final documents adopted in Bali, see the WTO website at https://www.wto.org/english/thewto_e/minist_e/mc9_e/mc9_e.htm. 16 The statement by Nirmala Sitharaman, then Minister of State in the ministry of commerce and industry in parliament on 28 November 2014 regarding India’s stand in the WTO can be found at this website page: https://commerce.gov.in/writereaddata/trade/CIM_parliamant_stat ement_WTO_28_11_2014.pdf.

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highlight how India took the central stage, and, although apparently isolated in its positions, succeeded in having its concerns addressed in a satisfactory manner.17 The central role of India in the agricultural negotiations continued, and in 2015 during the Nairobi Ministerial Conference the decision was announced to eliminate agricultural export subsidies, by developed countries immediately, except for a handful of agriculture products of developing countries over a longer period. This had long been a relevant issue for India’s international trade policy. Albeit with difficulties, India has managed to take a leading position among developing countries, especially in the agricultural sector, but this should not be the only objective of a really global actor. India’s next step will have to be to surpass the mere juxtaposition with the developed countries, in an effort to promote a synthesis of the various positions in the international arena. This need will emerge more and more dramatically at the end of the pandemic-caused emergency, when the priorities of each state will have to be revised, and new alliances, beyond the simple dichotomy of developed vs. developing countries, could be formed in the attempt to reshape the global trade system.

3.1 India Applying the Rules Domestically How India applies domestically the rules established at the multilateral level is also a key-indicator of the country’s integration in the global system. For India’s legal framework to be in compliance with WTO rules and regulations, the leading countries should be the first to ensure a thorough implementation in their internal legal orders. For international exchanges to be able to flow in an unhindered fashion, market access is of paramount importance. Without entering into the complications and technicalities of free circulation of services, goods may find mainly two types of limitations to foreign markets: tariff and non-tariff barriers. The WTO system encompasses multilateral rules on the different barriers that can prevent merchandise from moving freely in international markets. While it is intuitive how a tariff can act as a barrier, a state can create obstacles for the access of foreign goods in various ways, for instance applying quantitative restrictions for the import of a particular

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Cfr. the same statement, paragraph 17: “we were never alone or isolated, even though not many chose to—or were in a position to—speak up in support of India’s stand. I know from my interactions with several of my counterparts over the last few months that our stand resonated widely because we were fighting for a just cause. India is grateful for their support.”.

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product,18 or introducing technical regulations,19 standards and conformity assessment procedures—all of this resulting in the free movement being more complicated or indeed impossible. How is India implementing the WTO rules concerning customs duties or tariffs, the main barrier to foreign goods?20 A customs duty, or tariff, can be defined as a financial charge, in the form of a tax, which a country levies on a product when it enters its domestic territory. The process of importation, which guarantees market access to such product, is complete only after the payment of customs duties. The WTO system does not rule out tariffs, but their reduction is one of the instruments through which obtaining the ultimate objectives of the organisation: the increase of the standard of living, the attainment of full employment, the growth of real income and effective demand, and finally the expansion of production of, and trade in, goods and services.21 If member states are free to apply customs duties on imported goods, it is recognised that this leads to a significant hindrance to the free circulation of products. The objective, as set out in article XXVIII bis of the GATT 1994, is a ‘substantial reduction of the general level of tariffs and other charges on imports and exports’, and it should be achieved through continuous negotiations. Customs duties are considered to be an instrument of economic development policy, and can basically serve two purposes (Van den Bossche, cit., p 422): • generating revenues for governments; • protecting domestic production. In a country like India, where, although estimations and data may differ, tax-payers do not exceed 2% of the population (https://timesofindia.indiatimes.com/business/ india-business/why-number-of-income-tax-payers-halved-in-just-one-year/articl eshow/74129680.cms) and where, to consolidate all indirect taxes levied under one umbrella, a comprehensive indirect tax structure was introduced by the federal government only in 2017,22 customs duties are a significant source of revenues for a wide and populous state, easier to collect and to monitor compared to different 18

Article XI, paragraph 1 of the GATT 1994 sets out a general prohibition on quantitative restrictions, both on imports and exports. 19 The TBT agreement sets out the rules for the general category of technical barriers to trade. The rules applicable to the specific category of technical barriers to trade known as sanitary and phytosanitary measures are provided in the SPS agreement. A standard is different from a technical regulation because compliance with a standard is not mandatory. 20 Although the word tariff can also refer to the list of the different products with their respective custom duties, for the purposes of this chapter we will use ‘tariffs’ and ‘customs duties’ as synonyms. 21 See the preamble to the agreement establishing the WTO. 22 The Goods and Service Tax Act was passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017. Goods and Services Tax in India carries a dual structure, thus having two components, state as well as central levy. The structure is applicable to all transactions related to goods and services. Goods and Services Tax comprises three components applicable: CGST— Central Goods and Services Tax, collected by the central government on sales conducted intra-state; SGST—State Goods and Services Tax, collected by the state government on the sale of goods and services within a particular state as well; IGST—collected by the central government on inter-state sales.

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income-based taxes. Furthermore, India is one of the countries which has understood the opportunities but also the risks of lowering customs duties, in a phase of domestic economic development in which national producers may be pushed out of the market by an excessive inflow of cheap products from more aggressive global players. To assess the way India incorporates WTO rules into its domestic legal order, it is useful to resort to the official document that the WTO prepares in this regard. Under the so-called trade policy review mechanism,23 the secretariat scrutinises on a regular basis each member state’s trade policies and practices. The latest report on India was issued by the secretariat on 16th March 2021.24 We will see what has emerged on that occasion and will understand whether India has changed its course of action compared to the previous years or has continued along the same path. Since the report is a very detailed study, we will limit our focus on India’s tariff structure. According to the report, the distribution of tariffs in India has not had experienced any significant changes from previous reviews. India makes ample use of the margins of the customs duties it can apply, and the trend is not in the direction of lowering of tariff barriers. On the contrary, we can see a general increase in customs duty protection. In 2020/2021, 67.8% of all tariff lines are between 0 and 10%, compared to 79.1% of the previous review, and symmetrically the percentage of tariff lines between 10 and 30% has increased from 12.1 to 21.3%. Even the highest rates (above 30%) have increased from 2.8 to 4%, reaching a peak of a customs duty of 150%, for certain alcoholic beverages.25 The simple average tariff which applies to all WTO members as part of the so-called most-favoured-nation treatment, which prevents countries from discriminating between like products originating from two or more WTO members, is 14.3%, (or 15.4% using another way of calculating), increasing from 13% of the previous report. Nonetheless we have to consider it separately for the different types of products. Non-agricultural products entering India are subject to an average of 11.1% (or 12.3%) customs duties in 2020/2021, up from 10.8% of 2019/2020, and 9.5% of 2014/2015, mainly as a consequence of the increase of the duties on clothing, which almost doubled from 10.8% to 19.6% and on leather, rubber, footwear and travel goods, from 12.8 to 15.4%. In agriculture, tariffs average at a significantly higher 36.5%, back at the levels of 2014/2015, after a drop to 34.8% in 2019/2020.26 Some products reach a far higher level, such as beverages, spirits and tobacco (81.1%) or coffee and tea (74.8%). Apart from high tariffs in agriculture, another feature of the Indian tariff system is to impose higher customs duties on processed products 23

See Annex 3 to the WTO Agreement, entitled ‘Trade Policy Review Mechanism.’. The report is available at this WTO website page: https://docs.wto.org/dol2fe/Pages/SS/direct doc.aspx?filename=q:/WT/TPR/S403R1.pdf&Open=True. 25 This case could be considered as an example of a third purpose of (high) customs duties, that is discouraging the import of certain products, even if there is not a similar or competing domestic industry to protect. In such instances, other considerations come into play, often of moral, religious or social nature. 26 This drop was mainly due to the reduction in duties for cereals and preparations thereof ( from 40.9 to 32.7%) and of oil seeds and fats (from 33.2 to 26.7%). Later, the duties on this latter category of products went up again, to 35.1%. 24

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than for semi-manufactured goods, in an attempt to encourage the processing of final manufactured products on Indian soil. In the Indian legislation, the standard rate is prescribed in the 1975 Customs Tariff Act but every year the Indian government can announce changes with the annual budget, at the end of February.27 The margin that the Indian government enjoys in modifying customs duties for single products depends on the difference between the applied tariff, which is actually levied on imported goods, and what is called ‘bound tariff’. According to the WTO rules, a country can bind a tariff to a higher level than the one which is actually applied, and the bound rate acts as a ceiling. Only if the country wants to overshoot that limit, it has to go through the procedures of the WTO. In other words, even if state A normally applies a customs duty of 10%, it may wish to declare a bound rate of 30%, thus allowing itself the margin to increase the tariff with simple domestic acts, without incurring the scrutiny of the WTO (in this example the increase can be two or three-folded). Such a possibility is well-known to India, which presents a significant difference between the applied and the bound rates (the so-called ‘binding overhang’). The overall average Indian bound rate is 50.8%, and, the same way as for the applied tariff, much lower for non-agricultural products (38.8%) than for agricultural products (113.1%), which can, as we have seen, go as high as 150%. One last important feature of the Indian customs duties structure is the persistence of a high number of tariff lines, roughly 30% of non-agricultural products, which are ‘non binding’, in the sense that their ceiling, in terms of a bound rate, was not established. This is possible because of flexibility in the tariff concessions, or commitment not to overshoot a fixed upper limit, is granted, in the WTO system, to developing countries, while developed countries have bound practically all their customs duties. If this is the picture emerging from the latest official review of the WTO, we have to state that the situation has not moved in the direction of lowering the burden of customs duties on foreign products (Palit & Mukherjee, 2019). In the annual U.S. report on foreign trade barriers for the year 2020 (https:// ustr.gov/sites/default/files/2020_National_Trade_Estimate_Report.pdf), data available for 2018 show a different figure of India’s average most-favoured nation applied tariff rate at 17.1%, moving up from 13% of 2015. The evolution, in these years, of the policy objective of domestic protection has been more visible for non-agricultural products (up from 9.5 to 13.6%) compared to agricultural goods (up to 38.8% from 36.4%). The increase of tariffs on non-agricultural products is a result of the implementation of the ‘Make in India’ programme, which the Indian government has designed in order to boost domestic industrial capacity. Besides a reduction in barriers to foreign investments, higher customs duties have been imposed on different products, either very labour-intensive or falling in the category of electronic and communication devices.28 This increase in tariffs was perfectly WTO-compliant because it 27

In India the fiscal year runs from April to March. This category includes such products as mobile phones, televisions, as well as associated parts and components. The same U.S. study emphasises how before 2014 certain information and communication technologies were imported duty free, including telecommunications equipment such as smartphones and related parts as well as network switches.

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remained below the bound rate. The government of India increased 52 product groups in the 2018/2019 budget, and again 68 tariff lines in the budget for 2019/2020.29 The rates applied by India (average applied rate, for non-agricultural and for agricultural products) are the highest among the world’s major economies. In 2018, according to U.S. reports on foreign trade barriers, these three values were, respectively: China: 9.8%, 8.8% and 15.6%; South Africa: 7.7%, 7.6% and 8.7%; Russia: 6.8%, 6.1% and 11.2%; Indonesia: 8.1%, 8.0% and 8.6%; Brazil: 13.4%, 13.9% and 10.1%. If we take the example of the customs duty policies of the country, we can conclude that it has always served the purposes of the economic agenda of the central government, in terms of protection of both the agricultural sector and the infant manufacturing industry. The change in government, with the launch of specific programmes of development reforms, such as ‘Make in India’, and its focus on the increase in domestic industrial production, has emphasised the use of customs duties, which has turned out to act as an important instrument: one can adjust the customs duties on machineries and semi-manufactured goods and increase those of the final merchandise in an attempt to create the conditions for local production of the same goods. The rules of the WTO, especially the margin between the bound and the applied rate, as we have explained above, allow this, and India seems to be one of the countries trying to take advantage of this possibility.

4 India Participating in the Dispute Settlement Mechanism As we have highlighted in the previous pages, one of the main features of the WTO is the establishment of a permanent and independent system of dispute resolution. Its main objective is to make sure that WTO members settle their disputes through the multilateral procedures set out in the Dispute Settlement Understanding (DSU)30 rather than through unilateral actions. The articulated mechanism tries to strike a balance between the competing needs on the one hand to provide a prompt solution and on the other to give enough time for the analysis of complex cases. The first step should be to find a solution through consultations or negotiations; when this fails adjudication is required. The jurisdiction of the WTO dispute settlement mechanism has some characteristic features, in that it is compulsory, exclusive and of a contentious nature. At first a panel of experts is established ad hoc for the resolution of a particular dispute, whose final report, once adopted, can be appealed by one of the parties. At this point, the WTO’s most important innovation is getting involved: the Appellate Body, a permanent body of 7 persons, acting in their personal capacity and chosen 29

The U.S. administration highlights how the customs duties on several agricultural products represent a significant barrier for their export to India (e.g. potatoes, citrus, almonds, apples, grapes, canned peaches, chocolate, cookies). 30 The Understanding on Rules and Procedures Governing the Settlement of Disputes, or Dispute Settlement Understanding (DSU), is attached to the WTO Agreement as Annex 2.

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because of their ‘recognized authority, with demonstrated expertise in law, international trade and the subject matter of the covered agreements’.31 They are the apex body of the dispute resolution system, insofar as their final report cannot be subjected to a further appeal. India has been an active participant in the system established by the WTO, in different positions according to the specific interests at stake. Since the beginning of the new system, India has acted as complainant in 24 cases, as respondent in 32 cases, and as third party in 168 cases (https://www.wto.org/english/tratop_e/dispu_e/dispu_ by_country_e.htm). We will try to briefly understand how the participation of India in the mechanism reflects its priorities and objectives in terms of trade policies. When a WTO member state calls another member state to respond in front of the WTO dispute resolution body it is because the latter is accused of obstructing the free and fair flow of goods or services. The countries against which India has resorted to the WTO more frequently are the USA (11 cases) and the European Union (6 cases plus 1 involving Poland before its accession to the EU). This means that in more than two-thirds of the overall cases, India contested measures put in place by Western countries, both in agriculture (rice, shrimp, products of avian origin) and in the manufacturing sector (steel and aluminium products, wool coats, shirts and blouses, bedding articles, home furnishing, polyethylene terephthalate, generic drugs, renewable energy). In the five remaining cases, India’s complaints were against other emerging economies, such as Turkey (cotton yarn and textiles), Brazil (jute bags), South Africa and Argentina (pharmaceutical products in both cases). From the content of these disputes we can recognise the interests of India in terms of international trade: once again agriculture, but also pharmaceuticals, textiles and other manufactured goods, either in the form of final products or of components. Almost symmetrically, the European Union and the U.S. have contested WTO compliance of India’s domestic measures in 11 and 8 cases, respectively, and the products that were the target of the contested measures are agricultural products, pharmaceuticals, textiles, solar cells, but also motor vehicles, and wine and spirits. While the interest into entering India’s agricultural market was shown by both developed countries (Australia, Canada, Switzerland, New Zealand, the USA and EU) and emerging countries (Brazil, Guatemala), other Asian WTO members (Japan, Bangladesh and Chinese Taipei) contested Indian measures concerning iron and steel products, batteries, cell phones, USB flash drives and the information and communication technology. In many more instances (166 cases), India decided to take part in disputes initiated by other WTO members, with a view to highlighting its interests, which could potentially be damaged by a decision, even if not directly aimed at Indian products. Without entering into the details of the various disputes, and without considering whether the different outcomes have been favourable to the Indian positions or not, what emerges is a spectrum of defensive interests which seem to be broader than the offensive ones. In other words, there are more instances in which India had to defend its positions against the attempts of other states to penetrate more deeply into its internal market than the other way round. Nonetheless, the numerous cases 31

See Article 17, paragraph 1 of the DSU.

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brought against Western developed countries show clearly that India can benefit from a rules-based international system of international exchanges, in which it is possible for every member to advance requests and complaints whenever they think that their rights are violated or jeopardised by domestic actions put in place by other states.

5 The Bilateral and Regional Dimensions India has always been active in pursuing its trade objectives, dealing directly with one or more states. This effort has resulted, over the years, in the stipulation of a number of bilateral and regional agreements.32 The risk that an expansion in bilateralism and regionalism could pose to the multilateral system of commercial exchanges was clear in the mind of the international legislators, and special provisions are included both in the GATT 199433 and in the GATS34 to regulate this issue. The need to define clear rules is a result of the consideration that a regional agreement grants more favourable trade conditions to all its members as compared to the other countries, which may well be WTO members. This clear violation of the principle of non-discrimination, in the form of the most-favoured nation, is considered WTOconsistent under certain conditions, since the members ‘recognise the desirability of increasing freedom of trade by the development, through voluntary agreements, of closer integration between countries and their economies.35 The creation of regional trade agreements may be both motivated by economic and political reasons. Countries with geographically close to each other can enjoy greater trade exchanges, and the benefits can subsequently move from a purely-regional to a more global dimension. In other cases, like the then European Communities, the underpinning idea was to create closer links between the member states, in order to avoid the reoccurrence of war. From a bilateral point of view, India has of course focussed its attention on some of its neighbouring countries, without neglecting those with which links other than sheer geography could be identified.36 However, the role of India emerges more significantly in the regional dimension, and one has to wonder how exactly to define the region in which India can claim to be a central protagonist’. If we start considering South Asia, the SAARC cannot but show all its limits. From a purely trade 32

For a list of the trade agreements to which India is a part, see the following webpage of the Ministry of Commerce and Industry: https://commerce.gov.in/international_WTO.aspx?LinkID= 32&SectorID=5&Id=32. 33 See article XXIV of the GATT 1994 and the Understanding on Article XXIV, which forms part of the GATT 1994. 34 See article V of the GATS. 35 See article XXIV, paragraph 4 of the GATT 1994. 36 Besides the obvious trade agreement with other Asian Countries, with varying degrees of scope (Afghanistan, Buthan, Sri Lanka, Nepal, Malaysia, Singapore, Thailand, Indonesia, Japan), India has either signed or entered negotiations for trade agreements with, inter alia, Australia, New Zealand, Israel, Canada, as well as the associations of Countries in the Gulf, in South America and in the southern part of Africa.

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perspective, the integration is not particularly advanced, although the Agreement on South Asian Free Trade Area (SAFTA) tries to anchor its provision in the broader WTO legal framework.37 Yet, the assessment cannot be too positive, if considered in terms of enhancement of intra-regional trade, which is still, today as it was 10 years ago, only 5% (Battacharjee, 2018), for the simple reason that the multiple tensions between its members, especially between the two countries with the biggest economies and largest populations. India has therefore tried to move eastward, with the participation in a series of initiatives and organisations, which show different levels of integration among members.38 Among these, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is a regional organisation comprising seven member countries, five from South Asia (India, Sri Lanka, Bangladesh, Nepal and Buthan) and two from Southeast Asia (Thailand and Myanmar) located in the littoral and adjacent areas of the Bay of Bengal.39 This sub-regional organisation has expanded the membership as well as its scope of activities since its inception on 6th June 1997 through the Bangkok Declaration.(https:// www.wipo.int/edocs/lexdocs/treaties/en/bimstec/trt_bimstec-annex1.pdf) For India it is essential to explore trade opportunities beyond the eastern border, as an implementation of its Act East Policy,40 given the stalemate along the western one.41 The renewed interest in BIMSTEC, at the expense of the SAARC, may be inferred from the decision of New Delhi’s government to invite its leaders to the inauguration ceremony of Prime Minister Narendra Modi’s second term. This is in contrast to what happened in 2014, at the inauguration of his first mandate, when all the leaders of the SAARC countries were invited. It can be argued that, while the west border is, in India’s eyes, ‘a big challenge that needs to be carefully managed’, the tilt towards the eastern subcontinent ‘appears full of opportunities’.42 The idea of an integrated 37

You can read the SAFTA Agreement at this webpage: https://www.saarc-sec.org/index.php/res ources/agreements-conventions/36-agreement-on-south-asian-free-trade-area-safta/file. 38 See, for instance, the BBIN (Bangladesh, Bhutan, India, Nepal) to foster subregional cooperation in South Asia, the Mekong-Ganga Cooperation (MCG), the Asian Trilateral Highway, which aims to connect via Myanmar the two cities of Moreh, in North-East India, and Mae Sot in Thailand, and the Bangladesh-China-India-Myanmar Forum for Regional Cooperation (BCIM). 39 See the organisation website, https://bimstec.org/, where it is explained that ‘unlike many other regional groupings, BIMSTEC is a sector-driven cooperative organization. Starting with six sectors -including trade, technology, energy, transport, tourism and fisheries- for sectoral cooperation in the late 1997, it expanded to embrace nine more sectors -including agriculture, public health, poverty alleviation, counter-terrorism, environment, culture, people to people contact and climate changein 2008’. 40 PM of India, at the 12th ASEAN India Summit and the 9th East Asia Summit held in Nay Pyi Taw, Myanmar, in November, 2014, formally enunciated the Act East Policy, as a development from the previous Look East Policy. 41 Xavier (2018) Bridging the Bay of Bengal, Towards a Strongest BIMSTEC, available at this webpage: https://carnegieindia.org/2018/02/22/bridging-bay-of-bengal-toward-stronger-bim stec-pub-75610, in which the author highlights the need to strengthen BIMSTEC in order to advance regional integration. 42 In this sense see Raja Mohan C (2019) Prime Minister Narendra Modi’s Eastward Tilt Remaps India’s Neighbourhood. ISAS brief, n. 665, 29th May. According to the Author, “New Delhi has invested its hopes for regionalism in BIMSTEC.”.

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area bridging South and South East Asia is nonetheless confronted with a number of challenges, e.g., the heterogeneity of its membership, in terms of both population (from 0.8 million inhabitants of Bhutan to almost 1,4 trillions of India) and economic performance (Thailand’s per capita GDP is roughly 8 times higher than Nepal’s; Palit et al., 2018). India can therefore play a fundamental role in BIMSTEC, due to the size of its economy and the size of its population (more than 2/3 of BIMSTEC’s total economy and 4/5 of its population), without appearing as using the organisation to pursue regional hegemony. This for instance by creating deeper collaboration with Thailand, reassuring the rest of BIMSTEC’s members that India is pursuing policies beneficial to all member states.43 This dual leadership could focus on the promotion of a free-trade agreement, the only instrument with the potential to really uplift the ambitions of the organisation. Its framework was adopted in 2004, but little progress has since been achieved. The fact that various members of the BIMSTEC are already part of bilateral or regional free-trade agreements can be an obstacle,44 but the new economic order which may be shaped in a post-pandemic scenario should act as an incentive to rethink global supply chains: enhanced connectivity, freer movement of goods, capital and persons are necessary and could add to the geo-strategic position and the dynamism of an area like the Bay of Bengal. India’s tilt towards East finds nonetheless its inevitable further dimension in the broader Southeast Asia region, where ASEAN has proved to be one of the most effective regional organisations outside Europe.45 The ASEAN - India Framework Agreement on Comprehensive Economic Cooperation laid a sound basis for the establishment of an ASEAN - India Free Trade Agreement. The ten countries of ASEAN constitute a market of half a billion people, with economic performances often better than the rest of the world. According to Indian official sources (http://www. mea.gov.in/aseanindia/20-years.htm), ‘India-ASEAN trade and investment relations have been growing steadily, with ASEAN being India’s fourth largest trading partner. India’s trade with ASEAN stands at US$ 81.33 billion, which is approximately 10.6% of India’s overall trade. India’s exports to ASEAN amount to 11.28% of India’s total exports’. Nonetheless, the potential of integration seems to be untapped, especially when compared to the level of trade exchanges between ASEAN and the other 5 countries having a similar FTA (Australia, New Zealand, China, South Korea and Japan).46 The result is that while ASEAN countries insist on having easier access to the Indian market for their goods,47 India has reiterated its concern on the trade 43

In this sense, see also Joyeeta Battacharjee, cit. supra, p. 4. In the sense, see also Amitendu Palit et alii, cit. supra, p. 4. 45 The Association of Southeast Asian Nations (ASEAN), https://asean.org/, comprises the ten member states of Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Viet Nam. 46 See Thi Ha (2020), “tariff liberalisation coverage of 76% is the lowest among all ASEAN-plus FTAs, compared to 94.6% with Australia-New Zealand, 92.1% with China, 89.8% with Japan, and 90.4% with South Korea”. 47 See Hoang Thi Ha, cit. supra, in whose view the FTA between India and ASEAN “has done little to boost ASEAN-India trade which increased marginally from US$68 billion (2.68% of ASEAN’s total trade) in 2014 to US$77 billion in 2019 (2.74%).”. 44

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deficit with the 10 ASEAN countries, which has increased threefold from 2013– 2014 to 2019–2020, surpassing the figure of 20 billion US dollars (https://commerce. gov.in/InnerContent.aspx?Id=74). The negotiations to review the concessions could therefore end up only in a stalemate. The reluctance of India’s reluctance to venture out more prominently into wider and more ambitious FTAs with countries it records trade deficits with, took central stage in the decision, taken in November 2019, not to join the Regional Comprehensive Economic Partnership (RCEP), one of the most ambitious FTAs, including 16 countries, the 10 ASEAN members plus the 6 countries with FTAs already in force with ASEAN (India, Australia, New Zealand, China, South Korea and Japan). It would represent, with India, 50% of the world population, 30% of global GDP and 25% of international trade, and it would mark the central role of the Indo-Pacific region in shaping the rules of how goods and services are exchanged globally. The economic reasons for India not joining the RCEP can basically be reduced to one: the fear of an uncontrollable surge of imports of cheap products from China, aggravating the already significant trade deficit of more than 50 billion US dollars, half of the total trade deficit with the 15 members of the RCEP.48 This has a series of economic and social consequences, including the level of employment (the logistics for more imports generate fewer jobs than the domestic manufacturing of the same goods), and the livelihood of vast strata of the population depending on a backward sector as agriculture. India tried to negotiate some containment measures,49 which could help its local producers gain time to fill the competitive gaps they suffer from, such as a longer period to reduce the customs duties vis-à-vis China, more stringent rules of origin, or the establishment of an auto-trigger mechanism allowing some tariff protection in case of increases in imports above a certain threshold, but in the end the negotiations collapsed. These requests, without elaborating on the specific details in this chapter, are not unusual in trade negotiations, and the WTO system includes provisions to regulate what the academic literature defines as ‘economic emergency exceptions’ (Van den Bossche, cit., pp 630–670). Such safeguard measures are devised to address surges in imports causing, or even threatening to cause, serious injury to a domestic competing industry, and are included in the rules for trade in goods,50 agriculture, and even in China’s WTO Accession Protocol.51 Besides the lack of protection for 48

According to data from the commerce department, relating to year 2018–2019, India registers a trade deficit with all of the 15 other Members of the RCEP, for a total exceeding 100 billion US dollars. 49 For an analysis of India’s position before the collapse of the negotiations see Chan Jia Hao (2017) An Analysis of India’s Participation in the RCEP Negotiations. ISAS Insights, n. 441, 21th July. 50 See art. XIX of GATT 1994, entitled ‘Emergency Action on Imports of Particular Products’: ‘If, as a result of unforeseen developments and of the effect of the obligations incurred by a [Member] under this Agreement, including tariff concessions, any product is being imported into the territory of that [Member] in such increased quantities and under such conditions as to cause or threaten serious injury to domestic producers in that territory of like or directly competitive products, the [Member] shall be free […] to suspend the obligation in whole or in part or to withdraw or modify the concession’. 51 See Protocol on the Accession of the People’s Republic of China, Sect. 16.

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its domestic production, the limited gains in terms of trade in services, a sector in which India is strong but for which liberalisation implies laxer rules on immigration, far more difficult to be accepted in the domestic political arena, did not help to address India’s concern that becoming a member of the RCEP would have resulted in more costs than benefits. It therefore should not come as a surprise that the decision to withdraw from the negotiations was welcomed by the main political parties in India (both the government party and the opposition parties) and the country’s business and industry leaders. The perception that farmers, dairy producers, small and medium enterprises, producers of steel, iron, textiles and rubber, in other words a vast percentage of the Indian economy, would have suffered from the inflow of more competitive products from other RCEP members, was strongly felt throughout the society and public opinion. The most negative reactions to India’s decision therefore came from outside, and they are centred on two main aspects: the missed advantages, both economically and politically, that joining the RCEP could have created in the long run, and the blow to the image of India as a trustworthy and reliable global actor, which is able to manage and overcome its domestic pressures in view of a higher result.52 It is certainly true that a RCEP without India, from a political point of view, risks becoming dominated by China, and from an economic point of view reduces significantly its global ambitions. Nonetheless, we have to try to consider whether the concerns expressed by India, which could not be addressed in a satisfactory way by the other negotiating partners, can justify India’s withdrawal from the RCEP. The issue of increasing trade deficits is one that India has constantly taken into consideration, even during negotiations with ASEAN. Was it really likely to expect that such concrete and strong concerns could have disappeared in a much more complicated agreement like the RCEP? If we want to point at the prospect of an immediate deterioration of the import/export ratio as a temporary step which will lead, in the medium term, to more foreign direct investments, better allocation of resources and eventually an increase in trade exchanges and global wealth, we cannot ignore the actual situation on the ground. Are all the conditions in place, such as infrastructure, connectivity, labour skills, so that the Indian producers can reasonably expect to gain fully from the rules of globalisation? Would Indian participation in the RCEP really integrate New Delhi in the present China-centred global supply chain? This is highly debatable, given the fact that India’s contribution to production chains in the AsiaPacific region is not significant in terms of neither raw materials, nor components, nor equipment/machinery.

52

See for instance Amitendu Palit (2019), “The credibility of India’s foreign policy, including celebrated outreaches like the ‘Act East’ policy, has taken a major hit”).

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6 Conclusions: India and International Trade after the Pandemic India is, as a member of G-20, one of the most important actors in the global economy, and the disruption caused by the COVID-19 pandemic may open up new possibilities for its enhanced role.53 The sudden interruption of China-centred global supply chains has clearly shown that other alternatives should be explored.54 Can India be part of these new dynamics or does the fact that it has decided to be outside both the One Belt One Road (OBOR) initiative and the RCEP agreement mean that it will be bypassed in the global ‘rebalancing’ that everybody is predicting? Being confronted with more difficulties by the flow of goods originating from China, because of the lack of connections with the new systems of roads and waterways designed by the OBOR and because of higher customs duties compared to RCEP’s member states, that is something that India has considered as an acceptable consequence of its new focus on domestic growth. It is hence not a surprise that India has never really considered adopting a free-trade agreement with China, something that the RCEP, without the adjustments requested by New Delhi, would have ended up being very similar to. But how long can India remain excluded from the main chains of productions and trade routes in the Indo-Pacific region? The need for what has been defined as ‘an Indo-Pacific trade and economic compact’55 becomes something which cannot be postponed. Leaving aside considerations of a more political or geo-strategic nature, the need for India to be more integrated in the international trade order emerges forcefully. And the focus on the East is probably not enough at this stage of domestic development of the Indian economy. But how can India rethink of itself in the new post-covid scenario? Some clear steps should be followed. First of all, India cannot play on its own. Although it would be extremely unlikely to see a sharp reduction in the protectionist measures that have characterised Indian policies since independence in 1947, more attention to what happens outside its borders should be paid. India can increase its relevance in the world by strengthening its position in a multipolar Asia.56 Secondly, the turbulent Western neighbourhood will make it difficult to increase the level of trade and economic cooperation through the SAARC, unless and until political normalisation and stability is achieved in the region.57 Thirdly, the idea of an Indo-Pacific 53

Moody’s Analytics has predicted, on Thursday 18th March, that India will record a growth of 12% in its GDP in the year 2021. 54 For instance India, Japan and Australia have proposed a’Resilient Supply Chain Initiative (RSCI) in order to create resilient supply chains in the Indo-Pacific that are not dependent on China. See Amitendu Palit (2020a, 2020b). 55 In this sense Amitendu Palit (2020a, 2020b). 56 In this sense see Jaishankar (2020) , “In such a dynamic situation, creating a stable balance in Asia is India’s foremost priority. It is only a multipolar Asia that can lead to a multipolar world. Equally important, it would put a premium on India’s value for the global system.”. 57 For a comprehensive survey of the deep cultural, historical, and strategic differences that make it likely the India-Pakistan conflict will continue see Cohen S P (2013) Shooting for a century: The India-Pakistan Conundrum. Brookings Institution Press, Washington.

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space will therefore have to be shaped moving towards the east. Revitalising a regional organisation like the BIMSTEC with its untapped potential is the starting point to gain both credibility and confidence in a new order on the Asian continent. The real challenge though will be to create a more meaningful and integrated relationship with ASEAN, as a bridge towards a fuller integration in the Indo-Pacific region.58 Fourthly, in the academic literature emphasis has been put on the need for India to improve its business environment rather than becoming part of FTAs in which levels of economic development are different and unbalanced.59 The post-COVID world will probably see a shortening in the global supply chains, a rethinking of national priorities, and more emphasis on national needs. In this new context, the economic policies that may emerge from the successful implementation of such schemes as ‘Make in India’ or ‘Self-reliant India’ (Atmanirbhar Bharat) would probably put the openness to the rest of the world in a subordinate position compared to the consolidation of its domestic industrial output.60 Lastly, this outcome cannot be taken for granted. Reinforcing, or simply not reducing the already high barriers for foreign goods with a view to gaining competitiveness in the manufacturing sector may certainly be a hindrance, at least at the beginning, to a fuller participation in the global system of trade exchanges. Nonetheless it could direct the Indian interest in foreign goods and services towards favouring the import of knowledge, capacity, technology, over cheap merchandise, for instance by slashing significantly Indian import duties on machinery. And the void left by the non-participation in the RCEP could be at least be partially filled with a renewed attention to the Western world, starting from the EU and the USA, in a perspective of a mutually-beneficial economic partnership. In other words, concentrating on itself at first in order to be ready to confront the rest of the world in a successive phase, may not necessarily mean withdrawing from the process of globalisation, but rather selecting those partners which can be of help to fulfil this ambitious design, and to engage them with more awareness than in the past. 58

See Jaishankar S, cit. supra, p 171: “ASEAN remains India’s gateway to the East”, as well as p 172: “This is […] exactly the right moment for India to expand its engagement with the group, adding dimensions like security, strengthening connectivity and doing more business. But beyond that, Indian strategic interests warrant that ASEAN’s centrality is preserved, if not strengthened. All its bilateral and regional energies must be utilized to that end”. 59 See Vinod Rai (2020) Should India Ban Imports from China? ISAS Brief, n. 793, 22 June, in which the Author claims that it is “in India’s interest to concentrate on developing domestic capability in skills, logistics, lower cost on debt, power and water, and quality and cost competitiveness if it is to achieve economic self-dependence”, and Ninan (2020) Not signing RCEP could be one of Modi’s biggest blunders, ‘atmanirbhar’ an admission of defeat. The Print, online edition, 21st November, available at https://theprint.in/opinion/not-signing-rcep-could-be-one-of-modisbiggest-blunders-atmanirbhar-an-admission-of-defeat/548907/, in which the Author, although critic of India’s decision to withdraw from the RCEP, highlights that “the problem is a broader one, of India’s competitiveness, which has to be improved so that opening up leads to more benefits than costs, to industrialisation and not its opposite”. 60 See Jaishankar S, cit. supra, p 208: “Competing against those with structural advantages has been difficult, as evidenced by the growing trade deficit. Going further down that very pathway without a course correction has obvious implications […]. A revival strategy, therefore, needs to be chalked out with the utmost deliberation.”.

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China’s Expanding Footprint in the Indian Ocean Region and the Indian Pushback Harsh V. Pant

Abstract On the 11th of July 2017, China sent military troops to Africa, who headed to the naval base in Djibouti to help set up the newly constructed facility (Xinhua. (2017). China sets up base in Djibouti. http://www.xinhuanet.com//english/201707/11/c_136435716.htm). The two vessels carrying Chinese troops departed from China’s Zhanjiang port are the Jinggangshan and Donghai Island; the former is an amphibious transport vessel, able to load helicopters, special troops and serve in protective convoys, and the latter is capable of rescue missions and assistance in ship repair. This is the first military base built abroad by China, a move possibly pushing the limits of its own foreign policy, but also signalling Beijing’s resolve to emerge as a major player in the larger Indian Ocean Region (IOR) (Kennedy & Pant, 2015). China’s expanding footprint into the IOR is now widely recognized. This chapter examines Chinese naval presence in the Indian Ocean and assesses India’s responses to Chinese expansion into the region. Beijing has undertaken a wide variety of measures to strengthen its presence in the IOR. It argues that China’s presence in the IOR will continue to grow in the coming years even though Modi government’s foreign and security policy is aimed at countering such an eventuality.

1 Introduction China is intent on emerging as a major player in the Indian Ocean Region and its expanding footprint into the IOR is now widely recognized. India too is intent on pushing back and working with other like-minded nations to secure a favourable periphery. This chapter article examines Chinese naval presence in the Indian Ocean and assesses India’s responses to Chinese expansion into the region. Beijing has undertaken a wide variety of measures to strengthen its presence in the IOR. It H. V. Pant (B) Kings’s College, London, UK e-mail: [email protected] Observer Research Foundation, New Delhi, India

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argues that China’s presence in the IOR will continue to grow in the coming years even though Modi government’s foreign and security policy is aimed at countering such an eventuality.

2 Chinese Maritime Expansion into the Indian Ocean China has made substantial efforts at trying to address the safety and security of its sea-borne energy supplies. Beijing’s oil imports from the Middle East range from oil to natural gas to power its economy. China’s naval activity in the IOR has been underway for more than a decade. The Indian Ocean conduces itself to the conduct of submarine operations due to its unique undersea topography and hydrographic features allowing for the concealment of submarines within the Littorals (Rehman, 2012). This survey identifies the most critical measures of the People Liberation Army Navy (PLAN). Its naval deployments initially started with counter-piracy operations in the 2000s, particularly in the Gulf of Aden. Starting in 2008, for the first time in its naval history, Beijing sent its warships to participate in anti-piracy operations in the Gulf of Aden. Therefore it is not surprising that China has set up a permanent naval base in Djibouti, which also hosts American, French, Japanese and Italian bases. Yet the most critical naval agreement has been with Pakistan since 2001 over the Gwadar Port Facility. As a deep-sea port, Gwadar offers the perfect site for basing Chinese nuclear submarines. It is a natural deep-sea facility and its depth has been deliberately augmented to start fresh projects and has a phenomenal capacity to sustain SSNs and SSBNs. It provides a potent deterrent against India or any other major sea power. It gives Beijing a substantial capability to deter economic warfare, a maritime blockade against its energy supplies or a limited naval war (Rehman, 2012). Karachi serves as a major logistical supply hub, apart from Salalah. Aden, Djibouti in the northwestern Indian Ocean. Pakistan’s principal port city already has facilities compatible with the PLAN’s needs such as significant repair and maintenance facilities, and spare parts supply that is common to the PLAN and Pakistan Navy’s Chinese-built frigates (Kostecka, 2010). The $55 billion China-Pakistan Economic Corridor (CPEC) which passes through Pakistan-occupied Kashmir would link China’s Muslim-dominated Xinjiang Province to the Gwadar deep-sea port in Pakistan. Despite the rhetoric, Beijing’s priority in pumping huge sums into a highly volatile Pakistani territory is not to provide economic relief for Pakistan’s struggling economy or to promote regional economic cooperation (Pant, 2017). The development may not subdue restive Muslims in either country. The challenges are huge as underscored by the related militarization. Pakistan has deployed more than 15,000 troops to protect the CPEC, and is raising a naval contingent and a new division-sized force headquartered in the port city (Philip, 2019). China will also station part of its growing naval forces at Gwadar. Concerns are already being expressed that Pakistan could become a Chinese colony with reports emerging of a ‘proxy Chinese city’ (Pauley & Shad, 2018) being built in Gwadar by Beijing under its Port-Park-City development model. For Beijing, security in the province of Balochistan is the biggest concern.

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Economic conditions in Balochistan remain dire with over two-thirds of its inhabitants living in poverty, and local opposition to the project is mounting by the day. The last few months have seen an upsurge in attacks perpetrated by Baloch separatists, especially those from the Baloch Liberation Army, specifically targeting Chinese assets (Chaudhury, 2019a) and nationals (Chaudhury, 2019b) stationed in the region. Such turmoil could have regional consequences. Reportedly, the People Liberation Army’s (PLA) plans of establishing its presence in the Indian Ocean via Pakistan go beyond Gwadar, inching even closer to the Strait of Hormuz in the small village of Jiwani where the Chinese forces are reportedly developing a joint naval and air facility with Pakistan (Gertz, 2018).Another one of Beijing’s successes in potentially projecting naval power in the Indian Ocean has been in turning Myanmar into a major transport hub. Sino-Myanmar relations since the 1990s have witnessed substantive evolution. Beijing’s quest to develop alternative routes for the supply of energy and oil has meant that it has converted its Yunnan province, which borders Myanmar as a gateway for greater strategic engagement with the Indian Ocean. The Chinese today have an operational transport link over the Yunnan-Yangon Irrawaddy rail/rail/river corridor. Additionally, the Chinese state-run CITIC consortium has been awarded the contract for building a deep-sea port in Kyaukphyu, overlooking the Bay of Bengal (Chau, 2019). Beijing sees its extensive transport and infrastructure investments in Myanmar as a way to mitigate its reliance on the Malacca Straits through which most of its energy transportation flows. Yet Chinese analysts have also noted that it could have a security role (Sun, 2012). Beijing’s naval footprint has expanded beyond Myanmar to other countries in the Greater Mekong Region, most notably Cambodia and Thailand. Reports have emerged that Beijing might have struck a ‘secret’ deal with Cambodia that would provide the PLA Navy access to the Ream naval base on the Gulf of Thailand (Page et al., 2019), significantly enhancing its hold over the contested waters of the South China Sea. Chinese involvement in the proposed $30 billion project of building the Kra Canal across the breadth of Thailand would also help Beijing bypass its ‘Malacca Dilemma’, while easing its reach of the Andaman Sea and the wider IOR (Swamy, 2018). China’s naval foray into the IOR has expanded to include Sri Lanka. The most prominent Chinese investment is the port town of Hambantota on the Southern tip of Sri Lanka. Yet China has not concluded a basing agreement and nor has Colombo obliged. Beijing’s construction-related investment in Hambantota stands at over a billion U.S. dollars. Hambantota could potentially serve as a major logistics supply hub in order for the PLAN to operate with greater ease in the event of conflict. With Sri Lanka Ports Authority agreeing to sell a 70% stake in the Hambantota port to China Merchants Ports Holdings, Sri Lanka finally concluded its $1.12 billion agreement with the state-run Chinese firm to operate the port in the southeast of the country in July 2017. The government gave its consent almost six months after the framework agreement was signed as the deal (VOA News, 2017) got bogged down in local protests, setting stage for China Merchants Ports Holdings to run the workings of the newly constructed port over a 99-year lease. For China, the Hambantota port has long been a strategic priority given its Maritime Silk Road

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ambitions and Beijing has been very active in trying to salvage this deal. Sri Lanka is located along the critical sea route for oil shipments travelling from the Middle East, making energy security an important reason for China to invest. It has been suggested by the Chinese firm that “with these maritime infra-structure investments, and other diverse investments such as the proposed international maritime center, Sri Lanka will be well positioned to play a strategic role in the one-belt-one-road initiative of China (Sirilal & Aneez, 2017). ‘Fears of ‘debt-traps’ à-la Hambantota have also surfaced along the Indian Ocean’s African littoral. In Tanzania, John Magafuli’s government has retained the suspension on the development of the much-awaited Bagamoyo Port, citing disagreements with its Chinese investors on the terms of the project that included a 30-year guarantee, a 99-year lease and non-interference by the Tanzanian authorities (Mishra, 2019). Similar concerns have also emerged in Kenya, where the debt-ridden country risks losing the Mombasa port to Beijing (Chaudhury, 2019c).

3 India’s Response Amidst Regional Flux Serious concerns have animated Indian strategic managers and policy-makers about the intent behind China’s development of ports and maritime cooperation in the IOR. This part of the analysis sequentially records and assesses New Delhi’s responses to China’s naval forays in the IOR. New Delhi has undertaken a set of measures, albeit more modest ones than China’s heavy infrastructural investments in port facilities among the IOR states. Yet India has stepped up maritime and defence cooperation with the IOR countries, particularly post-2011. India has struck some important agreements with littoral states. While since the mid-2000s Chinese infrastructural investments in Sri Lanka have grown significantly relative to India, Delhi has invested in Trincomalee port by upgrading it through the Indian Oil Corporation, and has sought Japanese collaboration on the joint development of a deep-sea container terminal in the Colombo Port. Sri Lanka made the initial offer of investing in Hambantota to India. New Delhi for its part turned it down at the time, because of its investments in Trincomalee and concluded that its refusal accepts the offer would not diminish Indian influence in Sri Lanka. The Modi government—across both its terms—has made significant attempts to improve India’s ties with Sri Lanka; cooperation was enhanced with the Sirisena government, and early engagement with the newly elected Gotabaya government was noteworthy. The two countries have exchanged several high-level visits over the last few years. Notably, Prime Minister Modi included Sri Lanka in the itinerary of his first overseas trip of his second term in office as he became the first foreign leader to visit Colombo to express solidarity with an aggrieving Sri Lanka in the aftermath of the Easter Sunday blasts that rocked the island nation. Even more recently, India’s Minister of External Affairs, S. Jaishankar visited Sri Lanka hours after Gotabaya Rajapaksa’s new government was elected to office, signalling a “new beginning” in bilateral ties (Srinivasan, 2019). This was followed by President Gotabaya choosing New Delhi as his destination for his maiden

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foreign trip where he vowed to take the bilateral ties to a “very high level” and work with India to retain peace in the Indian Ocean Region. Receiving the new Sri Lankan President, Prime Minister Modi re-affirmed India’s commitment to this relationship by announcing a $50 million grant for Sri Lanka’s counter-terrorism efforts, and a $400 million line of credit for its developmental activities. This camaraderie is especially striking considering India’s fallout with the Rajapaksa clan over Colombo’s tilt towards Beijing under the leadership of former President Mahinda Rajapaksa— Gotabaya’s brother, and now his Prime Minister (Malhotra, 2019). India’s attempts at reaching out to Mahinda, when he was Sri Lanka’s Leader of Opposition bear testimony to India’s resolve of ensuring it doesn’t lose further ground to China in the strategically located Indian Ocean nation. The relations enjoyed a period of respite under the Sirisena leadership when India reached out to Indian Tamils in Sri Lanka and skilfully used cultural ties to cement its engagement with the country, especially at a time when China’s imprint on the island nation had been growing. India and Sri Lanka enhanced economic cooperation in projects covering several sectors like power, infrastructure, and agriculture. This proactive outreach evidently bore fruits when days before Modi’s 2017 visit, Sri Lanka turned down China’s request to dock one of its submarines in Hambantota port so as not to upset India. This was in sharp contrast to the past, when Chinese submarines had been allowed to be docked in Sri Lankan waters despite vehement Indian protests. For Colombo, the Hambantota project has turned into a nightmare since its opening in 2010. Former Sri Lankan Ports Minister Mahinda Samarasinghe had made it clear that Sri Lanka “cannot afford to continue to pay” back the loans without better returns at the port. The Sirisena government blamed the debt on former President Mahinda Rajapaksa, whose government was keen on Beijing getting this project. The Export–Import Bank of China had provided a large chunk of more than $361 million of its construction financing. With the signing off of the final pact, the Sri Lankan government is confident that it would be able to repay the loans with $1.12 billion even as the Chinese firm is expected to invest an additional $600 million to make Hambantota port operational. There were local protests against what the local opposition viewed as a plan to take over private land for the industrial zone in which China will have a major stake as well as anger at the Chinese control of the port. Reservations were also expressed by the opposition parties, including demands that the agreement not be signed until it is debated in parliament. The Sirisena government was vocal in its desire to reduce Sri Lanka’s reliance on China, but financial pressures became too hard to ignore. With the island nation’s total debt standing at $64bn, almost 95% of all government revenues go towards debt repayment. China presented itself as a more accommodating lender of last resort. Acknowledging that the 99-year lease was a mistake, Sri Lanka’s new President Gotabaya Rajapaksa, having ridden to electoral victory on a nationalist sentiment, voiced his intention to renegotiate the deal with China (Panda, 2019). It remains to be seen whether this dispensation will be able to successfully do that. India, along with other states like the US and Japan, had also raised the issue of security with Colombo. Sri Lanka has assured India that there are no security issues over the port, which it says will only be

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used for commercial purposes. According to the Sri Lankan government, “no naval ship, including Chinese vessels, can call over at the Hambantota Port without our [Colombo’s] permission”. In fact, the Sri Lankan authorities recently allowed a port call by a Russian naval vessel, assuaging India’s fears that Beijing will have sole authority over the operations of Hambantota (Chaudhury, 2019d). The revised deal with China provides for the formation of two companies to split the operations of the port in which China will run the company in charge of business operations while Sri Lanka will have a major stake in the firm dealing with security. This is an attempt to allay Indian concerns. Sri Lanka’s case is a text-book example of the Chinese modus operandi in pursuing its strategic interests. Other countries have also faced similar dilemmas. Cambodia’s external multilateral public debt, for example, now stands at US$1.6 billion, while its bilateral public debt with China is US$3.9 billion. And 80% of this is owned by China. China has emerged as Cambodia’s largest military and economic partner, having disbursed about US$3 billion in concessional loans and grants to Cambodia since 1992. Questions are also being raised in Malaysia about the future of Chinese investments. Using its own brand of ‘debt trap diplomacy’, China has been forcing smaller states to abide by its dictate. This will have pernicious consequences for these states and is likely to bounce back on China in the years ahead. But for India, China’s growing presence around its periphery will continue to pose challenges. According to the former Maldivian President, Mohammed Nasheed (IANS, 2019), Malé had accumulated a staggering $3.4 billion in debt owed to Beijing; the dire situation developed over the years under the previous Abdullah Yameen regime that had not only allowed Chinese developers to own islands in the archipelago on an extended lease and traded away developmental projects to PRC companies at inflated prices, but also ‘negotiated’ a highly skewed free trade deal with China. Yameen presided over Malé’s tilt away from its traditional partner, Delhi, (in)famously returning the two advanced light helicopters donated by India. However, under the Ibrahim Solih government, bilateral relations sprung back on forward track, with a specific boost to their defence ties: enhanced training and capacity building of the Maldivian defence forces, setting up of a joint coastal surveillance radar system, increased intelligence sharing and coordinated patrolling (MEA, 2019), lease of Dornier aircraft to the Maldives for maritime surveillance and, plans to coordinate joint HADR response in the Indian Ocean (Peri, 2019). Additionally, India has launched several lines of credit and monetary grants to aid “people-centric” (Peri, 2019) developmental efforts in the archipelago. India has also been moving beyond bilateral engagements to configure its profile in the Indian Ocean. The first of these most consequential developments has been with its immediate Island neighbours—Sri Lanka and the Maldives. In October, 2011 for the first time India, Sri Lanka and the Maldives were at the First National Security Advisor (NSA) level Meeting in Malé to confabulate about cooperating in the IOR. Building on this development, in 2013, India concluded the ‘Trilateral Cooperation on Maritime Security Agreement’ with the Maldives and Sri Lanka. The ostensible purpose of the agreement related to concerns about maritime threats and challenges that could be overcome through cooperation. The agreement included four elements

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of cooperation: maritime domain awareness (MDA), long range identification and tracking (LRIT), merchant ship information system (MSIS) and Automatic Identification System (AIS). In March of 2014, the same triad of states met under the aegis of National Security Advisors (MEA, 2014). Two key IOR states, Seychelles and Mauritius joined the meeting as observers. Subsequent to these developments, India also expanded defence and security cooperation with Seychelles and Mauritius. For instance, in 2014, the GoI gifted the INS Tarasa, a navy vessel from the Indian Fleet to Seychelles. This donation was made in order to help the Seychelles expand its surveillance and patrolling capacity to cover the country’s Exclusive Economic Zone (EEZ), which extends over a distance of 1.3 million square kilometres. During the same year the Indian navy’s INS Sukanya made a port visit and undertook maritime surveillance activities in the vast Southern waters of Seychelles. Under the aegis of the bilateral defence and security cooperation agreement, India instituted a set of capacity building measures as part of the Indian Technical and Economic Cooperation (ITEC) programme for the Seychelles People’s Defence Forces (SPDF). New Delhi also deputed a military adviser, a maritime security adviser, a medical adviser and a naval adviser (technical) to the SPDF. These developments were accompanied by visits to the Seychelles by the then Indian Navy Chief and port visits by three ships from the Indian Western Fleet. Crucially, India has started supplying hydrographic equipment to the Seychelles since 2015 that enables detection of submarines and naval traffic within the IOR (MOD, 2017). Among these developments, cooperation in the conduct of hydrographic surveys, which is akin to military maritime surveying (CSCAP, 2002) and a long-term maritime and naval technical advisory team to be a part of the SPDF are among the most consequential. Although the two countries signed a pact that would have allowed Delhi to build naval facilities in the Seychelles’ Assumption Island, it awaits ratification by the Seychelles parliament that protested against the move. India has also undertaken maritime cooperation with Mauritius, a key Indian Ocean littoral state. The most crucial development in the India-Mauritian relationship particularly over the last three years is the establishment of a White Shipping Data Fusion Center (PIB, 2015) that enables MDA. India is working on a comparable agreement with Thailand. New Delhi has concluded a Memorandum of Understanding (MOU) that extends to 2020 on hydrography (MOD, 2017, p. 172). As part of its defence cooperation, India is supplying ten fast interceptor boats built by the Goa Shipyard Limited (MOD, 2016, p. 67). Notwithstanding the expansion of China’s commercial and political relations with Mauritius, India remains its principal security provider. New Delhi’s outreach to Mauritius also gathered momentum in May when Mauritian Prime Minister Praveen Kumar Jugnauth visited India. His visit saw the signing of four agreements between the two countries, including one whereby India offered unconditional cooperation in the key area of maritime security in the Indian Ocean region. During his visit to Mauritius in March 2015, Modi commissioned the offshore patrol vessel (OPV) Barracuda, built and financed by India, into the Mauritian coast guard. India also agreed to build infrastructure facilities in the Agalega archipelago, 1000 km north of Mauritius in a bid to enhance Port Louis’s sea and air connectivity in the region.

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“Our partnership with Mauritius is among our strongest maritime relationships in the world… We will also train and patrol the seas together”, Modi said during a visit to the island nation in 2015. India also announced a $500 million line of credit to Mauritius as an example of the strong and continuing commitment of New Delhi to the development of that country. Jugnauth also stressed the cultural ties that bind the two nations together. Mauritius is home to a large number of people of Indian origin who are descendants of indentured Indian workers brought in the nineteenth century to work in sugarcane plantations. Over the last few years, this partnership has only expanded, with lines of credit and grants being extended to allow Mauritius to procure defence equipment such as the Multi-Purpose Offshore Patrol Vessel (MPOPV) that would enhance its maritime security (PIB, 2018). India already maintains a monitoring station in Madagascar, enhancing India’s surveillance capabilities in the sea routes passing through the South-Western Indian Ocean, the Mozambique Channel, and the Cape of Good Hope. With the signing of a fundamental MoU on defence cooperation during President Kovind’s visit to the island in March 2018, the two countries appear to have set the course for moving further afield in this arena (Embassy of India, 2019). Recently, India also started taking steps towards building its defence ties with Comoros, another island nation off the eastern coast of Africa. Vice-President Venkaiah Naidu’s October 2019 visit saw India extending financial grants and credit lines for Comoros’s procurement of High Speed Interceptor Boats (ANI, 2019). In order to ensure a smooth flow of energy supplies from the Middle East, countries have been rushing to Oman to secure access to its Duqm port which overlooks the Arabian Sea, and could allow them to bypass the instability that has been defining the Strait of Hormuz. India, along with the US, the UK, and Japan have gained access to the port’s logistical support and refuelling facilities. However, China’s presence in Oman, one of its BRI nodes is indisputable. Beijing is investing 10.8 billion USD as it develops a Chinese industrial park in Duqm (Xinhua, 2019). India has also been enhancing connectivity and its defence footprint in the Bay of Bengal and the Andaman Sea under its revitalized ‘Act East’ Policy through which it has engaged bilaterally with partners in its extended neighbourhood of South East Asia. Herein, particularly noteworthy is India’s partnership with its maritime neighbour and strategic partner, Indonesia. The two countries have been cooperating in the joint development of the deep-sea Sabang Port in Indonesia’s northern most province of Aceh, in a bid to enhance connectivity in their neighbourhood (Chaudhury, 2019e). Additionally, the Sittwe Port in Myanmar which was built with Indian assistance started its operations in 2019. The port which is a part of a multi-modal sea, river, and road transit corridor not only connects Myanmar better to India’s Eastern ports, but also allows their bilateral trade to transit through India’s northeast (Chaudhury, 2019f). India has been revamping its own infrastructure and defence capabilities in the Andaman and Nicobar Islands to increase domain awareness in the subcontinental littorals where an increasing Chinese presence is suspected to be gathering information of underwater operating environment (Singh, 2019). In addition to commissioning the INS Kohassa and subsequently enhancing the operational capabilities of

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the Andaman and Nicobar Command, India plans to build facilities to hold additional troops, aircrafts, warships, and drones to enhance India’s reach in the IOR (Singh, 2019). Over the last few years, India has also signed bilateral agreements with the US, France, and Singapore that allow the Indian navy to access logistical support and refuelling facilities at their military bases in the region.

4 Conclusions Under the Modi government, India is more willing to counter Chinese’s increasingly assertive policies and territorial ambitions in the Indian Ocean region. The Modi government has been paying special attention to developing ties with India’s neighbours in the Indian Ocean region. It is starting to take up its role as a regional security provider more seriously and consequently the engagements with its maritime neighbours are getting stronger by the day. Modi has argued that the “Indian Ocean Region is at the top of our policy priorities. Our vision for Indian Ocean Region is rooted in advancing cooperation in our region; and, to use our capabilities for the benefit of all in our common maritime home… Those who live in this region have the primary responsibility for peace, stability, and prosperity in the Indian Ocean” (Roche, 2017). As China’s economic juggernaut continues to roll against the backdrop of Beijing’s the Belt and Road Initiative, it is more important than ever for India to build durable partnerships with the island nations in the region. Getting ready to challenge China’s profile by enhancing its own regional role as an economic and security actor is the need of the hour for India. At a time when China is strangling India in the north with its attempts to change territorial facts on the ground and its successful ‘salami slicing’ tactics in the South China Sea, it is imperative for India to strategically think of using the maritime sphere to break Beijing’s growing dominance in its periphery.

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Philip, S. A. (2019), Pakistan to raise new division HQ in Gwadar to protect $60 bn economic corridor to China. The Print. https://theprint.in/world/pakistan-raise-division-hq-gwadar-protect60-bn-economic-corridor-china/304585/ PIB. (2015). Chief of naval staff to visit Singapore and Thailand. Government of India PIB. (2018). President of India leads delegation-level talks, witnesses exchange of Agreements/Mous; meets top leadership of Mauritius on second day of visit. Government of India, https://pib.gov.in/newsite/PrintRelease.aspx?relid=177343 Rehman, I. (2012). Drowning stability: The perils of naval nuclearization and brinkmanship in the Indian Ocean. Naval War College Review, 65(4), 64–88. Roche, E. (2017). India woos Mauritius with $500-mn line of credit, maritime security pact. Livemint. https://www.livemint.com/Politics/KIayyTloo4jsAKpJuF6l5M/India-woos-Mau ritius-with-500mn-line-of-credit-maritime-s.html Singh, A. (2019). Andaman and Nicobar: India’s ‘strategic anchor’ holds ground. Observer Research Foundation. https://www.orfonline.org/expert-speak/andaman-and-nicobar-india-str ategic-anchor-holds-ground-47848/ Sirilal, R., & Aneez, S. (2017). Sri Lanka signs $1.1 billion China port deal amid local, foreign concerns. Reuters. Srinavasan, M. (2019). Sri Lankan President Gotabaya Rajapaksa arrives in New Delhi on two-day visit, to meet PM Modi on November 29. The Hindu. https://www.thehindu.com/news/national/ sri-lankan-president-gotabaya-rajapaksa-in-india-on-a-three-day-visit/article30107607.ece Sun, Y. (2012). China’s strategic misjudgement on Myanmar. Journal of Current Southeast Asian Affairs, 31(1), 73–96. Swamy, P. (2018), Fears rise in India as China pushes plan for canal to reshape Indian Ocean. Business Standard. https://www.business-standard.com/article/economy-policy/china-pushes-planfor-canal-to-reshape-indian-ocean-118040600034_1.html VOA News. (2017). China’s ‘Silk Road’ Push Stirs Resentment, Protest in Sri Lanka. VOA News. https://www.voanews.com/east-asia-pacific/chinas-silk-road-push-stirs-resentmentprotest-sri-lanka Xinhua. (2017). China sets up base in Djibouti. http://www.xinhuanet.com//english/2017-07/11/ c_136435716.htm Xinhua. (2019). Spotlight: China-Oman economic cooperation in full swing amid closer China-Arab ties. http://xinhuanet.com/english/2018-09/22/c_137484963.htm

India and China—Two Countries Marching the March of Folly Axel Berkofsky

Abstract India-China relations are and will continue to remain tense. And that is putting it mildly. Let us get the facts straight right away: China’s government led by Chinese dictator Xi Jinping has over recent years shown that it is willing and indeed very determined to escalate the border conflict with India, thereby risking military conflict that goes beyond the occasional bilateral border skirmishes which since 1962 are part of the countries’ bilateral ‘exchanges’ so to speak. Gone instead are the days of talk of what was in the past coined ‘Chindia’, i.e. Indian-Chinese complementarity: China providing India with ‘hardware’ and India providing China with ‘software’ as part of a bilateral burden-sharing scheme of two emerging economic superpowers. Instead, conflict is on the very top of the agenda of policymakers in both Delhi and Beijing and given the short-sightedness, stupidity and inability to opt for resultoriented dialogue instead of ordering their soldiers to kill each other with sticks in the Himalayas, it is bound to stay there. The governments and the respective political and academic elites in both Delhi and Beijing meanwhile talk a big geopolitical game on behalf of their respective governments, shrugging their shoulders about and ignoring what the Indian and Chinese people really need and want: prosperity, education, freedom of speech and religion and the resources to live a decent life being able to feed their families. Too much to ask for in semi-democratic India and authoritarian and decisively non-democratic China these days, it seems.

1 Introduction The Indian government led by the nationalist and populist Prime Minister Narendra Modi has adopted a number of policies aimed at reducing India’s dependence on trade with China while at the same time facilitating trade, defence and investment ties with Japan. India’s ‘the-enemy-of-my-enemy-is-my-friend-policies’ in a neighbourhood theatre of aggressive and expansionary policies pursued by the Chinese elephant in the room if you will. To be sure, democracy and democratic governance A. Berkofsky (B) Department of Political and Social Sciences, University of Pavia, Pavia, Italy e-mail: [email protected] © Springer Nature Switzerland AG 2023 S. Beretta et al. (eds.), India’s Foreign Policy and Economic Challenges, Global Power Shift, https://doi.org/10.1007/978-3-031-20270-4_8

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in India led by Modi have been eroding since Modi first took power in 2014. India’s (enormous) Muslim minority—195 million in 2022—in particular has over the Modi years been subject to government-induced discrimination, one of the reasons why India today has made it onto the list of countries experiencing what in the literature is referred to as ‘democratic backsliding’. Countries which are formally democracies but whose domestic policies do not meet universally acknowledged standards of democratic governance. Next to India and Mongolia in Asia, Turkey, Poland and Hungary in Europe can be cited in this context (Kugelmann, 2021). Mori’s authoritarian and anti-Muslim instincts and policies e.g. tend to get mentioned far less often in the international press than Chinese human rights violations (above all those in the Chinese province of Xinjiang), which is—from a cynical realpolitik point of view— understandable. India is formally a democracy and part of an informal alliance of democratic countries, which charged themselves with the task to deter and contain China. With the help of an (informal) US-led alliance, the Quadrilateral Security Dialogue (QUAD): the US, Japan, Australia and India. Even if the QUAD countries continue to insist that the QUAD is not directed at anybody (including China) and is a informal grouping of like-minded countries concerned with protecting and enforcing freedom of naval navigation in the Indo-Pacific, it is very clear to anybody with half a brain that the QUAD is an instrument to contain China—an instrument that would not even exist without Chinese territorial expansionism in general and Beijing building civilian and military facilities on artificially built islets close to disputed islands in the South China Sea in particular. However, India’s defence agreements with America or Japan or Australia, the Economist writes in 2021, are merely ‘notional’, pointing out that India’s armed forces do not have functional interoperability with armed forces of other countries (The Economist, 2021). The US routinely conducts so-called Freedom of Navigation Operations (FNOPs) in the Indo-Pacific including in the South China Sea, but India (like Japan too) has so far resisted the temptation of joining US naval vessels patrolling the South China Sea (The Economist, 2020a). Either way and current operational shortcomings between QUAD countries aside, (China) containment is the name of the game in the region, and Russia’s invasion of Ukraine has provided more than enough tragic evidence that dictatorships with military and territorial ambitions must be contained as they are—put bluntly—quite simply not engageable. If you do not believe me, be my guest and check the history books, which are full of non-engageable dictators who over the centuries were too busy inflicting misery on the people and filling their pockets with money and jewellery to have any time for dialogue and political good sense. Europe and the US—often at the urging of US and European multinational companies with massive business and investment interests in China—have far too often refused to acknowledge that authoritarian regimes and dictatorships are not in any way interested in political engagement that goes beyond the facilitation of bilateral business and trade ties. Unless of course there is money to be made (or lost), and this is where Russia has made it into the equation. When Russia attacked Ukraine in late February 2022, Modi’s India decided to let business rule over principle when the government abstained on a UN Security Council vote condemning Russia’s invasion. For those who believed and hoped

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that India would—in spite of energy and armament ties with Russia—position itself on the right side of the argument were at the time clearly disappointed, to say the very least. Realpolitik at its worst, combined with bad old political short-sightedness and megalomania, as historian Barbara Tuchman concluded decades ago. The world was and still is full of political leaders and self-proclaimed geniuses whose ideas and policies run counter to their countries’ and peoples’ actual interests. Political leaders are still marching what Tuchman1 calls the ‘march of folly’, and the semidemocrats in Delhi and dictators in Beijing are marching on the frontlines of that march right into confrontation and bilateral armed conflict on snow-covered mountains in the middle of nowhere. The decades-long Indian-Chinese border dispute is a prime example of how not to conduct foreign policy and although the blame for recent clashes falls largely on China and Xi Jinping’s idea that military threats and aggressions earn China the kind of global respect it allegedly deserves, India too does little (well, currently and in essence nothing) to defuse the tensions with China along the disputed border. And that is because military leaders and generals in both India and China do not—put bluntly—‘do’ reconciliation and dialogue but instead get seemingly very frequently and quickly excited when talking about the alleged necessity to respond to aggression with aggression, come what may. ‘May’ as in full-fledged military conflict between two countries which since 1962 have undertaken next to no efforts to solve a border dispute that is still accompanied by soldiers killing each other with sticks and bare hands.

2 The Gloves are Off (Since 1962) On October 20, 1962 China attacked India along the disputed Indian-Chinese border in the Himalayas. Chinese policymakers and Chinese propaganda until today— against the background of recent Indo-Chinese border clashes—claim that it was the other way round: India attacked China along the disputed border in the Himalayas, the historically distorted Chinese narrative goes. Historical facts about who attacked whom in 1962, however, are available and there for all to verify and Chinese propaganda and disinformation campaigns remain just that: propaganda and disinformation distorting facts. And this is what happened: in 1962, Chinese dictator Mao Zedong had just finished inflicting unspeakable misery onto the Chinese people through the Great Leap Forward which, as Frank Dikötter documented in great detail, claimed up to 40 million lives (Dikötter, 2010) when decided that he needed a foreign policy success in order to distract his Chinese comrades and sidekicks from the disastrous and deadly consequences of the Great Leap Forward. Attacking and defeating India along the border, Mao decided all by himself, would be such quick and decisive foreign policy success—only that it was not, which made Mao again turn to domestic policies follies, eventually resulting in the Cultural Revolution in 1966. But that is

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In her book The March of Folly published in 1984.

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another story and deadly episode of Chinese policies under Chinese dictator Mao Zedong. Back to today’s Sino-Indian border dispute folly. The border dispute’s root cause is a 3440 km (2100-mile)-long disputed border in the Himalayas. The Indian-Chinese clash in June 2020 in the Galwan Valley was fought with sticks and clubs, not guns— the first deadly clash between Indian and Chinese soldiers since the mid-1970s. While a bilateral Indian-Chinese agreement adopted in 1996 prohibits the use of guns and explosives near the disputed border, it remains yet to be seen whether future Indian-Chinese clashes will still and always be fought with sticks and bare hands. The border dispute has over the decades led to a massive militarization along the SinoIndian border, in disputed areas in particular. India and China have both stationed roughly 50,000 soldiers along the disputed border. Furthermore, both India and China have built infrastructure, airstrips, and outposts and have deployed large numbers of troops along the border, including a Tibetan paramilitary special force, trained and financed by India’s intelligence services. Bilateral negotiations on the border dispute on the other hand do not take place and when they did in the past, they did not produce any results whatsoever. Except maybe the very awkward aforementioned 1996 agreement not to use firearms when clashing along the border. This led to Chinese and Indian soldiers—arguably like primitive Neanderthal men—using their bare hands and sticks (like in 2020) to hurt and kill each other during their Neanderthal men-style clashes. Ironically—and this again underlines the absurdity of the bilateral border dispute—the agreement to kill each other ‘only’ with sticks and not with firearms is in both India and China referred to as a ‘success’ of bilateral border dispute negotiations. Speaking of which: bilateral border dispute negotiations might at some point in the future resume, but they will not—unless China miraculously turns into a democracy respecting and adopting international law and norms and India in turn decides to become a country with a focus on eradicating poverty and misery instead of satisfying the country’s military and hotheads who believe that nuclear armament is a matter of dignity and self-respect—produce any tangible and sustainable results. And let us make no mistake: the stronger China becomes militarily, the more the pressure will grow on the current and future Chinese leadership to ‘resolve’ the border dispute with military force. The sad truth is that dictatorships and semi-democracies do not—put bluntly—opt for dialogue, reconciliation, concessions and compromise unless they are financially broke (like North Korea has at times of famine and neareconomic collapse demonstrated in the past). Quite simply because unelected leaders in dictatorships (China) and elected leaders in de facto semi-democracies (India) do not not have to. In other words, they have the freedom to opt for the wrong priorities because they can and because civil society in both India and China does not have a say on how domestic and foreign policies are being conducted. Unless policymakers and dictators in both Delhi and Beijing respectively come to their senses on the dispute (which is very unlikely), China will continue to claim the Indian state of Arunachal Pradesh, while New Delhi will continue to claim the Chinese-controlled Aksai Chin as part of their respective territories. As mentioned above, currently, there are next to no negotiations on the border dispute taking place. Therefore, when scholars and policymakers in both India and China talk about the nature and quality

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of bilateral relations ‘after’ the resolution of the territorial dispute, they unfortunately reckon without one’s host: in reality, a possible resolution of the territorial dispute is nowhere in sight—in fact, the aforementioned escalation of the dispute triggered by China in June of 2020 provides tragic evidence to that end. And if I know that, political leaders in Delhi and Beijing certainly do too.

3 Fists, Sticks and Other Absurdities Both India and China are operating warplanes, helicopters and drones in airspace over disputed territories—the kind of stuff and military action Indian and Chinese generals live for. To be sure, this is what the military and militarist elites in both countries do, well, enjoy doing at the expense of a fragile peace and overall stability: dismiss de-escalation as a sign weakness, not worthy of their respective self-proclaimed ‘glorious’ armed forces. All of this is supported by propaganda and politicians—both elected (India) and unelected (China)—in their capacity as self-proclaimed defenders of peace and stability. Both of which, however, took a hit in June 2020. Back then, Indian and Chinese soldiers armies got engaged in a stand-off at three sites along their disputed border, known as the Line of Actual Control (LAC). Territorial boundaries continue to be defined in many areas by a ‘Line of Actual Control’ as opposed to an internationally recognized boundary. The stand-off began already earlier in May 2020 when China’s People’s Liberation Army (PLA) occupied 40–60 square kilometres of territory that India considers part of its territory, according to LieutenantGeneral H.S. Panag, a former head of the Indian army’s northern command. The occupied territories included areas China had not previously contested, adding yet another preoccupying quality to Chinese territorial ambitions along the border with India (The Economist, 2020b). Furthermore, India at the time also lost access to a number of important patrol points in Ladakh. According to Indian accounts at least nine patrol points. While India did not control these areas, it was also an area that China did not control either. Since June 2020 India, at least as things stand now, is no longer able to patrol these areas because China has moved its forces forward and cut off access to Indian patrolling. De-escalation policies both India and China say they are pursuing are quite clearly not working, to say the very least. According to Indian press accounts at the time, Chinese troops had crossed the disputed border with India at several points, some reportedly penetrating 3–4 kms into Indian territory on Himalayan terrain. Incursions had been reported in at least three spots: the confluence of the Galwan and Shyok rivers, the Hot Springs area and the northern bank of Pangong lake. All of which is false, according to the Chinese authorities: de facto dismissing the existence of a territorial dispute, Chinese soldiers, Beijing pointed out at the time, were merely patrolling Chinese territory. The truth is that at several strategic spots along the border in the spring of 2020 Chinese troops marched into long-established patches of no-man’s-land, setting up what

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looks like permanent structures and positions. When India sent in soldiers to challenge the Chinese intrusions, fist-fighting broke out. That left some 20 Indians and at least four Chinese soldiers dead. China has since then refused to return to the territorial status quo before the clashes, claiming (unsurprisingly but wrongly) that Chinese military was merely defending Chinese territory. This leaves it in control of territories India regarded as its own and, more importantly, in control of vantage points from which it would be possible to hit Indian infrastructure like roads. And of course Beijing could at the time not resist the temptation of marching into conspiracy territory, claiming that Washington and its fellow co-conspirators use India and its conflict with China to damage China. Although Beijing is most probably aware that such an accusation is baseless and quite frankly ridiculous, Beijing continues to accuse India of undermining and challenging Chinese rule in Tibet as part of a US-led containment strategy and conspiracy aimed at China. While India is without much doubt willing and prepared to be part of a US-led China containment strategy in the Indo-Pacific region (above all through its contributions to the QUAD elsewhere mentioned in this chapter), Tibet is not part of the equation. It is of course for Beijing, which typically cites India hosting the Dalai Lama in exile as evidence that India is supporting Tibetan independence. Typically together with the claim that the US Central Intelligence Agency (CIA) is providing financial and logistical support for Tibetan ‘separatists’. Quite simply claims without a basis in reality but nonetheless very much part of Beijing’s disinformation campaigns distributed via Twitter2 and other social media.

4 Wanting (Even) More Worryingly, some of the Chinese incursions into territories claimed by India in the Galwan River Valley in June 2020 have taken place in areas that were—at least until June 2020 —not even disputed, i.e. not claimed by China. That means that China’s PLA was in June 2020 de facto ordered to further and deliberately escalate the territorial dispute with India creating new facts on and beyond the (disputed) ground along the border. Chinese government mouthpiece newspapers like the Global Times at the time decided all by itself and on behalf of the regime in Beijing that the entire Galwan Valley is Chinese territory and that there is hence no territorial dispute with India in the first place. However, that is a lame old familiar Xi-led government approach towards territorial disputes: dismissing the existence of territorial disputes with other countries by unilaterally deciding that the territories or territorial waters in question cannot be not subject to any disputes as they are already part of Chinese territory, period. Hence, for Beijing nothing to argue and dispute about even if international law and norms have in the past on more than one occasion ruled something else. But that is apparently not a problem for China either as international law is not relevant

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Which is not accessible to ordinary Chinese citizens.

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for Beijing if it produces verdicts which refer to Chinese territorial expansionism as ‘unlawful’ and/or ‘illegal’. And there is more bad news (for Delhi). Beijing has in 2021 ordered the construction of small villages near the border areas (Rajagopalan, 2021). The scholar Rajagopalan cites a Pentagon report according to which Beijing built a large 100home civilian village inside disputed territory between China’s Tibet Autonomous Region and India’s Arunachal Pradesh state in the eastern sector of the LAC. An unambiguous message coming from Beijing is that there really is no territorial dispute with India to be addressed and resolved, at least as far as Beijing is concerned. Comparable to how Beijing addresses territorial disputes with Southeast Asian countries in the South China Sea: China is building civilian and military facilities on disputed islands (or on artificially built islands close to disputed islands), deciding unilaterally that the disputed islands are not disputed but instead part of Chinese territory (on which Beijing can build what it wants, Chinese policymakers typically added in a very determined and/or aggressive manner on numerous occasions). And there is arguably very little India can do about China erecting a village in an area that has been under Chinese military control since at least 1959. To be sure, India and China had agreed previously that any sustainable resolution of the border conflict would not disturb settled populations. By constructing new villages and populating them, however, China is creating new facts on the ground that would make any future agreements even more difficult, if not completely impossible. What is (potentially) worse is the question of whether these are purely ‘civilian’ villages or whether they are populated by Chinese civilians or instead by militias and/or armed forces. China can always claim that it is the former (which it does) even if they have a security purpose, giving it an excuse for concluding that the territory in question is no longer subject to negotiations. Not today, not tomorrow and not ever, of course as far as Beijing is concerned. The key question in India today is whether Chinese actions have sustainably changed the status quo along the border and whether India has lost more territory for good. Those in India who criticize the way the government handled the clashes with China along the border in 2020 claim it is the latter, i.e. warn that India has indeed lost territories for good.

5 Part of a (Chinese) Plan Chinese general and strategist Sun Tzu concluded 2500 years ago that attacking the enemy is not —putting it (overly) simply—a good idea. Beijing today, as it turned out, begs to differ fundamentally. But why did Beijing trigger the clashes along the border in the first place? There were several explanations circulating as to why Xi ordered the PLA to attack Indian soldiers along the border in June 2020. Beijing under Xi, it was argued, acted out of insecurity countering domestic and international criticism of Beijing’s handling of the pandemic. If true, it would be a lame old ‘classic’: dictators distracting from domestic problems by unleashing a war or armed clash (the way Mao has done so on more than one occasion from 1949 to 1976) (Fravel,

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2020). Others argue that Xi Jinping unleashed the border clashes taking advantage of the problems caused by the pandemic in India, the US and elsewhere in the West (Manning & Cronin, 2021). Maybe it was—put bluntly—a bit of both, i.e. a combination of Chinese insecurity and paranoia paired with cheap political opportunism taking advantage of the fact that the West is ‘distracted’ with the pandemic (which originated in China) and now with the war in Ukraine. Chinese aggressions along the aforementioned LAC are part of a pattern of steadily more aggressive Chinese foreign policies. There is Chinese territorial expansionism in the South China Sea, Beijing oppressing and imprisoning the Muslim population in the Chinese province of Xinjiang, Chinese interference in Hong Kong’s political and judicial affairs, increasingly regular Chinese intrusions into Taiwanese-controlled airspace and equally frequent intrusions into Japanese-controlled territorial waters in the East China Sea challenging Japanese control over the Senkaku Islands (which since 1895 are de facto part of Japanese territory but are claimed by China). China under Xi Jinping is testing the limits and is—at least so far—getting away with it. ‘Getting away’ in the sense that the US and its friends and allies in Asia—Japan, India and Australia—are not doing much (i.e. hardly anything) to stop Chinese territorial expansionism. Protests and joint declarations yes, actual joint actions keeping China from expanding its territory no. Back to China’s motives for ordering the PLA to fight India in the Himalayas. Among others it was argued that 1. Beijing triggered the clashes in 2020 as part of a policy to slowly but very surely salami-slice a way to additional territory and present India with changed facts on the (then no longer disputed) ground. 2. It was response to Indian infrastructure building along the disputed border. India has been upgrading border roads and improving infrastructure, making it easier for India to deploy military patrols. An Indian road running north to Daulat Beg Old e.g. has been recently completed. The road, which runs along the Shyok river to the west of the Chinese positions in the Galwan valley has strengthened India’s ability to move military forces across the disputed border in Ladakh. China reacted to all of this, it was argued. 3. A response to Delhi changing the status of Ladakh (separating it from Jammu & Kashmir, and centrally administering it) and 4. It was a warning towards India not to further deepen its defence relations with the US and its allies (Madan, 2020a, 2020b). If number 4, i.e. a warning towards India not to expand defence ties with the US, was part of the reason why China unleashed the border clashes with India in 2020, then this did backfire badly for China. Anybody with basic knowledge on Asian geopolitics understands that China triggering a conflict with India did not deter India from deepening its defence ties with Washington. Quite the contrary was the case: in view of a perceived and actual threat posed by China, India strengthened its defence ties with the US, and with Japan for that matter, even if it remains yet to be seen how exactly and what exactly India will sustainably contribute to US-led China containment policies in Asia. Either way, if Beijing thought that unleashing a border conflict with India would deter as opposed to further motivate Delhi to expand its defence ties with the US and its allies, Beijing found out that it had to think again. If it is accurate to conclude that Beijing miscalculated India’s reaction to Chinese aggression in June 2020, then it would not be the first time Chinese

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policymakers did that over recent years. China increasing military pressure onto Taiwan is another case in point. After Beijing ordered Chinese fighter jets to violate Taiwanese-controlled airspace over Taiwanese territory in 2020 and 2021 on (very) numerous occasions, Washington (to be sure, the Washington run by President Joe Biden and the not erratic and possibly mentally unstable Donald Trump) declared more than once in 2021 (and 2022) in no uncertain terms that Washington would defend Taiwan militarily in the case of a Chinese attack on Taiwanese territory (Liff, 2021). And things got worse, at least from China’s perspective, when Japan in 2021 joined the US declaring—alone and with Washington on at least one occasion—that Japan would make a contribution to securing peace and stability in the Taiwan Strait in the case of regional contingency. Making a ‘contribution to peace and stability in the Taiwan Strait’ is obviously an euphemism for defending Taiwan militarily (USJapan Joint Leader’s Statement, 2021). And it was obviously understood as such in Beijing, which saw itself confirmed one more time that the US and its fellow conspirators are teaming up against China.

6 All Still Good, Beijing Says After the 2020 border clashes, India’s foreign and security policy establishment has been urging the government to fundamentally reassess the country’s China policy. While the relationship is, as the China hawks among India’s policymakers and analysts conclude (unsurprisingly), beyond ‘repairable’, China’s government and its diplomats have in the meantime and since the clashes invested resources into making believe that the clashes were merely a minor hick-up within the context of an overall great bilateral relationship. Chinese ‘bad-cop-good’ diplomacy if you will, taking advantage of and indeed exploiting other countries’ necessity to have access to the Chinese market and not lose China as a lucrative trade and investment partner. “The orientation of China and India as partners, friendly cooperation and common development remain unchanged”, China’s ambassador to India said on August 18, 2020 (China-India Youth Webinar, 2020). While this sounds almost absurd, it is not necessarily surprising, for a number of reasons. Firstly, Beijing had after the border clashes and casualties it triggered seemingly chosen to seek to de-escalate the tensions although it must be assumed that India’s policymakers were unimpressed and called the bluff. Secondly, Beijing might have wanted to suggest that there is no reason for India to assume that China has become hostile towards India as Beijing was ‘only’ defending Chinese territory against Indian intrusions (which obviously did not in any way correspond with the facts but is the official Chinese position on what happened along the disputed Indian-Chinese border in June 2020). Thirdly, the reason for Beijing’s propaganda to pretend that the violent border clashes did not have a negative impact on bilateral relations can possibly also be explained by the overall unsophisticated and indeed very amateurish manner Chinese policymakers and diplomats communicate and interact with their counterparts abroad. And this is because Chinese policymakers and their senior diplomats quite clearly lack the skills and the

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international experience, which would enable them to understand that talking about ‘good’ relations in the very aftermath of violent clashes appears awkward, to say the very least. And all of this is without much doubt and in parts a result of the fact that senior Chinese policymakers and diplomats—after the near-complete interruption of China’s international interactions during the Cultural Revolution (1966–1976)—are still ‘catching-up’, so to speak. ‘Catching-up’ as in learning and practicing ‘conventional’ diplomatic exchanges and relations after decades of international isolation and violent foreign policies imposed onto the country by the equally violent Chinese dictator Mao Zedong. To be sure, that is only part of the reason why Chinese diplomats were ordered to pretend that all was still good between Beijing and Delhi after June 2020.

7 Non-Alignment No More? India’s contributions to the aforementioned QUAD and the country’s expanding security and defence ties with both Washington and Tokyo have made it very clear that India’s non-alignment strategy and the policies associated with such a strategy are—to put it bluntly—pretty much a thing of the past. However, there remain doubts as to how sustainable and reliable India’s contributions to US-led China containment policies will be in the future. India abstaining on a UN Security Council vote at the end of February 2022 calling Russia’s attack on Ukraine an ‘aggression’ made it very clear that Delhi remains prepared to allow to rule business over principle when deemed necessary. Russia has over decades been India’s most important provider of weapons and weapons technology and after Modi decided not to join the large majority of UN members condemning Russia’s attack on Ukraine, Russia in turn offered India to buy Russian oil and gas at discount prices. To be sure, Russia is not China and Russia does not challenge India’s territorial integrity, but the message Delhi sent towards Washington and the fellow democracies and QUAD partner countries Japan and Australia at the time was not one of being a reliable and closely aligned country—to say the very least. Instead, India’s Prime Minister Modi made it clear that he is prepared to upset his allies and has India’s credibility as defender of democratic values and norms jeopardized in return for discounts on arms and energy delivered by Russia. Analysts and pundits inside and outside India suggested at the time that India not condemning Russia’s attack onto Ukraine is what remains today of Indian non-alignment policies. To be sure, not joining the world’s liberal democracies unequivocally condemning Russia’s military attack onto Ukraine says a lot about India’s commitment—or rather lack of thereof—to protect and enforce values and norms the country as the world’s largest (on paper) democracy has (at least in theory) signed up to. Well, then again maybe not such a big surprise for an India under Prime Minister Modi, who can by no stretch of the imagination be referred to as ‘liberal democrat’ or anything like that. Either way, China—the de facto target of US containment policies pursued together with fellow QUAD members Japan, Australia and—apparently sometimes more, sometimes less—India, must have been pleased

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with India’s refusal to join the de facto rest of the world condemning Putin’s attack onto Ukraine. India at the time explaining that its economic crisis left the country de facto no choice to refuse to confront Moscow did not—to say the very least—add to the credibility of India as reliable partner. The good news—if one chooses to put a positive spin on India’s international relations faux pas—is that India does not matter nearly enough in international politics and security for the country to do sustainable damage to US-led China containment policies. In other words, if the US and/or the European Union had done the unthinkable, i.e. had like India abstained on the abovementioned UN Security Council vote, the damage this would have done to the liberal democratic world order would probably have been beyond repair. The Indian authors in this volume will most probably disagree with this author, but the fact that it was ‘only’ India which decided to de facto support Russia’s attack on Ukraine, might have left a bad taste in the mouth of the world’s liberal democracies, but that was in essence it, ‘it’ as in not being ‘dramatic’ enough to cause any real damage to the international efforts to name and shame Russia. To be sure, India’s political elites and scholars working and writing on behalf of them (in government-sponsored think tanks and research institutes) tend to (more often than not against better knowledge) overestimate India’s weight in international politics and security, typically implying that nuclear armament is the ultimate entry ticket into the club of big powers prepared to defend their interests with military and nuclear power. However, the case of India is arguably and decisively different: India has nuclear weapons and is the world’s fifth (or sixth, depending on the sources) largest economy by nominal GDP, but it still ranks 142 in terms of annual GDP per capita on a nominal basis. To be sure, a shockingly low GDP per capita—roughly $1.850 in the case of India—has over the course of history not kept countries from claiming influence and (destructive) power in international politics (ask North Korea), but there remain limits as to how an overall poor and yet underdeveloped country like India can credibly present itself as a country with global reach and influence. Consequently, India joining China in its decision not to confront Russia is negative and disappointing per se but has not done anything to diminish Western democratic determination to counter—one way or another—Russia’s aggression against Ukraine. Those in India who oppose the expansion of India’s defence ties with the US and Japan are at times concerned that the country’s ‘identity’ will inevitably change by entering into military alliances or quasi-military alliances like the QUAD. What is probably meant with ‘identity’ in this context is India’s (alleged) ‘identity’ as a non-aligned country that it was (or claimed to have been) during the Cold War. The Cold War, however, is long over and China’s regional territorial expansionism such as building military bases on artificially built islands close to disputed islands in the South China Sea is constantly creating new (territorial) facts on the ground (Huang, 2021). Facts, which countries like India—individually or jointly with other like-minded countries such as Japan and the US—are entitled and should indeed feel obliged to respond to. Those on the other hand who support the government’s response (or better: non-response) to Beijing building the aforementioned villages along the disputed border argue that India is not losing territory as the villages are being built in areas that have been under de facto Chinese control since the late 1950s.

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However, from a realpolitik point of view that is a very weak argument as it de facto acknowledges and accepts Chinese territorial claims along the disputed border with India.

8 Wrong Priorities China’s aggressive policies related to unlawful territorial claims and policies in Asia—be it in the South China and East China Seas, Beijing threatening Taiwan militarily and China’s PLA provoking military clashes with India along the disputed border—unfortunately call for bad old containment. Indian policymakers today largely agree with that conclusion and those remaining few among Indian policymakers and scholars who hoped that China is politically engageable and that India can continue to pretend being a non-aligned country, have probably changed their minds by now. The gloves are quite clearly off and as was shown above, Beijing is quite clearly in the business of expanding its influence and presence in South Asia. All of this expansion is too close for comfort for India, and China’s expanded security and military ties with Pakistan in particular will continue to remain a concern for policymakers in Delhi (and be exploited by the same policymakers and hawkish Indian scholars in order to be able to refer to Pakistan as a ‘terrorist state’ and/or ‘rogue state’). To be sure, concerns which Indian pro-defence policymakers and the military will continue to exploit to explain to the country’s population why spending enormous amounts of money on India’s nuclear weapons programme is necessary for a country threatened by China (and Pakistan for this matter). Funds that a democratic country with a lower than $2.000 GDP per capita should instead be spending on welfare, education and other ‘non-lethal’ sectors and areas of its economy. And let us make no mistake: those in India who are referring to the country’s nuclear weapons programme as ‘necessary’ and/or as a ‘matter of pride and dignity’ to further promote its development and financing are the country’s elites, which have the luxury not to have to worry about the next meal on the table and/or paycheque coming in on time. A very large part of India’s population, however, has other things than the development of the country’s nuclear weapons programme to worry about and does not have the time to write and read editorials in Indian newspapers about the necessity to deter the Pakistani ‘terror state’ with missiles and nuclear weapons; very much like in China, where the political and military elites talk to each other as opposed to the ordinary Chinese population even if the country’s propaganda machine is suggesting that the Chinese people fully support Xi Jinping’s (oppressive) domestic and (aggressive) foreign policies. In reality, nothing could be further away from the truth and like in India, (very) large parts of the Chinese population do not know anything about and are not interested in Chinese government-sponsored contractors building military bases on artificially-built islands close to disputed islands in the South China Sea and cannot explain the details of the border conflict with India. In other words, defence and security policies in India and China take place without the people, also because the ordinary people in both India and China have nothing to

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gain from their respective political elites’ calls to arms and declaring victory over real and/or imaginary enemies when fighting pointless wars.

9 Reacting The border clashes of June 2020, of course, had consequences. The low opinion the Indian public had on China3 before the clashes took a further and very profound dive after them. For what it was worth, mistrust and anger towards China resulted in calls for boycotts of Chinese products and the restriction of Chinese investments in India. All of this was (and still is) accompanied by an inner-Indian debate on excessive dependence on the Chinese market and investments of Chinese state-owned enterprises in India. Before the border clashes with China in June 2020, the Indian government adopted restrictions on investments from countries sharing a land border with the country—restrictions clearly and indeed exclusively aimed at investments from China. Furthermore, Delhi urged the Securities and Exchange Board of India to increase scrutiny of portfolio investment from China, as Tanvi Madan writes (Madan, 2020a, 2020b). And the Indian government had more up its sleeve to restrict Chinese economic activities in India. Chinese state-owned contractors, the government announced in July 2020, are to be excluded from future road construction projects. Finally, India’s Ministry of Finance announced in July 2020 new public procurement rules aimed at imposing restrictions on bidders from countries which share a land border with India. Needless to say that such restrictions were again aimed at China and China only. At the time Delhi was also considering further measures to curb and scrutinize imports, including to prevent Chinese goods from being routed through third countries. There were also reports on Indian state-owned oil companies ordered to no longer use Chinese tankers to ship crude oil or petroleum products (Aftab Ahmed, 2020). India’s telecommunications sector too became subject to increased scrutiny. Indian state-owned firms telecommunication companies e.g. BSNL and MTNL cancelled a tender issued in March 2020 to upgrade their 4G networks. The new revised tender excluded Chinese firms Huawei and ZTE from the bidding process (Chaudhary, 2020). In order to counter China’s dominance of supply chains in the Indo-Pacific region, trade ministers of India, Japan and Australia in April of 2021 launched the so-called Supply Chain Resilience Initiative (SCRI). The government’s decision to limit the economy’s exposure to Chinese investors (and therefore by default to the Chinese state), however, led to concerns among Indian start-up entrepreneurs that China might retaliate. China has been a major source of investment for Indian start-ups. It is estimated that more than half of India’s large start-ups have at least one Chinese investor (Parkin, 2020). To be sure, China could indeed retaliate economically to all of this. For example in India’s pharmaceutical and automotive sectors. Both sectors heavily depend on ingredients and components from China. So far and over the last two 3

‘China’ as in the Chinese government. Not the Chinese people.

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years, China, however, has resisted the temptation of making too big a deal out of India’s decision to shut some Chinese business and investments out of India. Not least because India is not—at least not compared to the US, Japan and the EU—an important enough trade and investment partner for Beijing to worry too much about limited access to the Indian market in times of now de facto permanent bilateral frictions.

10 Conclusions India-Chinese ties—to put it bluntly—have gone from bad to even worse over the last two years. Sustainably and for good, as the aforementioned bilateral dispute will continue not to be seriously addressed, let alone solved. As explained above, the border dispute is part of a Chinese territorial policy pattern. By claiming and occupying disputed territories while (successfully) testing the limits of its aggressive and expansionary policies, China has created new (territorial) facts on the ground along the disputed border with India, has over recent years built a number of civilian and military facilities on artificially built islands close to disputed islands in South China Sea and is challenging Japanese and Taiwanese territorial integrity on a very frequent basis. India is hence in not-so-good company of countries finding themselves on the receiving end of Chinese territorial expansionism and land-grabbing. The question remains what India’s allies—above all the US and Japan—are going to do about containing Chinese territorial expansionism in Asia in the years ahead. So far as it turns out very little and Beijing’s territorial expansionism—be it in Southeast or South Asia—goes on as good as completely undeterred. What is more, Delhi’s inability to promote and lead South Asian economic integration over the years has given China the opportunity to increase its trade and investment ties with countries India has for decades referred to as its geopolitical backyard. Increased and increasing Chinese investments in Nepal, Sri Lanka, the Maldives and Bangladesh can be cited in this context (Joshi, 2021). Neglecting economic needs of its poorer neighbours in the past now comes back to hunt India and China’s involvement in South Asian developing and poor economies is bound to grow further in the years ahead. India would probably not have opted for expanding its security and defence ties with the US and Japan the way it did if China had not challenged and indeed threatened the country’s security interests in the region and had not further deliberately escalated the aforementioned bilateral territorial dispute. The more Beijing orders its PLA soldiers to trigger armed clashes along the disputed border and the more Beijing intensifies its security and defence ties with India’s arch-enemy Pakistan, the more India’s political leaders will see themselves confirmed to have made the right and indeed only possible choice: expanding security and defence ties with the US, Japan and others. Chinese scholars today are de facto obliged to repeat and propagate what the government says and thinks on China’s international relations and policies in parrot-fashion. It is therefore no surprise that Chinese scholars conclude—obviously on behalf of the Chinese government—that India has together with the US and Japan

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chosen to militarily contain China. In fairness, such a conclusion corresponds with reality: Washington—individually and with others—is without doubt determined to contain China militarily. However, what Beijing ‘forgets’ to mention in this context is the fact that Chinese aggressive and expansionary policies in the region are a de facto invitation advanced to the country’s adversaries to contain China. In other words, without aggressive Chinese foreign and security policies, there would be no US-led China containment policies. It really is that simple even if theorists of international relations will disagree with such a simple—in their view probably simplistic—conclusion. All said and done—at least on these pages—the bilateral dispute and bilateral relations overall are as pleasant as a garlic-flavoured lolly pop, apparently the preferred kind of treat on the menu of hotheads, militarist and nationalists in both India and China. Then again, the political leaderships in both Delhi and Beijing must know that a fully-fledged military conflict over a strip of disputed territories in the Himalayas is the very definition of geopolitical insanity and they will hence continue seeking to avoid a fully-fledged military clash in the Himalayas. Hopefully, that is and in that case one can also hope that Albert Einstein was wrong when he concluded that there are no limits to human stupidity. Unfortunately, however, Albert was a genius and usually spot on when identifying and commenting on the madness and stupidity on Planet Earth.

References Aftab, Ahmed. (2020, August 3). With Eye on China, India looks to Increase Barriers on Imports from Asia. Reuters. https://www.reuters.com/article/us-india-trade-asia/with-eye-on-china-indialooks-to-increase-barriers-on-imports-from-asia-idUSKCN24Z23B Chaudhary, A. (2020, August 13). China’s Huawei, ZTE, Bloomberg. https://www.bloomberg.com/ news/articles/2020-08-13/china-s-huawei-zte-set-to-be-shut-out-of-india-s-5g-trials China-India Youth Webinar. (2020, August 18). Chinese Ministry of Foreign Affairs. https://www. mfa.gov.cn/ce/cein/eng/embassy_news/t1809145.htm Dikötter, F. (2010). Mao’s Great Famine. The History of China’s most Devastating Catastrophe. Bloomsbury. Fravel, M. T. (2020, June 26). China’s Sovereignty Obsession. Foreign Affairs. https://www.foreig naffairs.com/articles/china/2020-06-26/chinas-sovereignty-obsession Huang, K. (2021, March 24). South China Sea: China has Extended another Spratly Islands Reef, Photos Show, South China Morning Post. https://www.scmp.com/news/china/military/article/312 6656/south-china-sea-beijing-has-extended-another-spratly-islands Joshi, M. (2021, November 15). Is the India-China Conflict Intractable? Observer Research Foundation (ORF). https://www.orfonline.org/research/is-the-india-china-conflict-intractable/ Kugelmann, M. (2021, October 14). India’s Democratic Backsliding hasn’t Stopped. Foreign Policy. https://foreignpolicy.com/2021/10/14/india-democratic-backsliding-modi-bjpfarmers-protests/) Liff, Adam P. (2021, August 23). Has Japan’s Policy Toward the Taiwan Strait Changed? Brookings. https://www.brookings.edu/blog/order-from-chaos/2021/08/23/has-japans-policy-towardthe-taiwan-strait-changed/ Madan, T. (2020a, April 30). How is the Coronavirus Outbreak Affecting China’s Relations with India? ChinaFile.

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Madan, T. (2020b, September 9) Emerging Global Issues: The China-India Boundary Crisis and its Implications. Brooking. https://www.brookings.edu/testimonies/emerging-global-issues-thechina-india-boundary-crisis-and-its-implications/ Manning, R. A., & Cronin Patrick, M. (2020, May 14). Under Cover of Pandemic, China Steps Up Brinkmanship in South China Sea. Foreign Policy. https://foreignpolicy.com/2020/05/14/southchina-sea-dispute-accelerated-by-coronavirus/ Parkin, B. (2020, February 16). China Provides Record Funding for Indian Tech Start-ups. Financial Times. Rajagopalan, R. P. (2021, November 12). Did China Create New Facts on the Ground Along the LAC with India? The Diplomat. https://thediplomat.com/2021/11/did-china-create-new-facts-on-theground-along-the-lac-with-india/ The Economist. (2020a, September 10). India and China exchange the first gunshots in 45 years. https://www.economist.com/asia/2020b/09/08/india-and-china-exchange-the-first-gun shots-in-45-years The Economist (2020b, June 20) India and China have their First Deadly Clashes in 45 Years. https://www.economist.com/asia/2020c/06/18/india-and-china-have-their-first-deadly-cla shes-in-45-years The Economist. (2021, November 13). How the Game of Go Explains China’s Aggression Towards India. https://www.economist.com/asia/2021/11/11/how-the-game-of-go-explains-chi nas-aggression-towards-india US-Japan Joint Leader’s Statement. (2021, April 16). US-Japan Global Partnership for a New Era, The White House. https://www.whitehouse.gov/briefing-room/statementsreleases/2021/04/16/us-japan-joint-leaders-statement-u-s-japan-global-partnership-for-a-new-era/

Kashmir as Frontier in Narendra Modi’s Ethno-Nationalist Idea of India Emanuela Mangiarotti

Abstract The political issue of Jammu and Kashmir’s special status within the Indian Union has been a focal point of Hindu nationalist mobilization ever since the Partition of the Subcontinent in 1947. With the progressive mainstreaming of Hindutva ideology in India’s cultural, economic and socio-political life, and especially under the leadership of Indian Prime Minister Narendra Modi, Kashmir has increasingly turned into a symbolic and territorial frontier, where exceptional government measures are normalized in the name of progress, women’s rights and national integrity. In Modi’s political discourses and speeches, such values are projected as universal and become thus instrumental to suppress critical voices while projecting his government’s actions as inherently good. In that sense, Modi’s discursive and performative politics contribute to define the boundaries of today’s national collectivity and trivialize the violent actions undertaken to affirm, reclaim or defend them. Modi’s Kashmir policy is part of a broader project of ethno-nationalist state-crafting and authoritarian political leadership, aiming at excising minorities and expressions of minority identity from public life, curbing dissent and establishing a Hindu India, in antithesis to its Muslim-majority neighbouring countries.

1 Introduction Ever since its contested accession to the Indian Union, Kashmir has been key in shaping the debate on—and the actions taken to affirm—India’s national identity. For Hindu nationalism, the political issue of Kashmir has been embedded in the ideology of Hindutva, an ethno-nationalist ideology that took shape in the colonial space and that envisioned India as a Hindu nation (Hindu Rashtra). The majoritarian underpinnings of this ideological formation built on a markedly anti-minority (and especially anti-Muslim) militancy and on the moral imperative to bring the cultural, social and territorial fringes of the nation under the majority community’s rule. As a Muslimmajority borderland, with distinctive cultural and historical backgrounds, Kashmir E. Mangiarotti (B) Department of Political and Social Sciences, University of Pavia, Pavia, Italy e-mail: [email protected] © Springer Nature Switzerland AG 2023 S. Beretta et al. (eds.), India’s Foreign Policy and Economic Challenges, Global Power Shift, https://doi.org/10.1007/978-3-031-20270-4_9

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became a crucial focus of this ethno-nationalist endeavour. In fact, it could be argued that the political agenda of Hindutva largely developed around the conviction that the assimilation of Kashmir was inherent in the coming about of the Hindu Rashtra. This view consolidated over time, becoming a key concern of the Bharatiya Janata Party’s (India’s People Party—BJP) political programme and of its leaders’ discursive repertoire, since the party’s outset in the 1980s. This chapter shows how, along with the progressive mainstreaming of Hindutva’s ideology in India’s cultural, economic and socio-political life, and especially under the leadership of Narendra Modi, Kashmir has increasingly turned into a symbolic and territorial frontier, where exceptional government measures get normalized in the name of universalistic values and of the (Hindu) nation’s interest as defined in New Delhi. The chapter identifies three main recurring issues that characterize Narendra Modi’s all-embracing rhetoric about Kashmir: (1) progress; (2) women’s rights; and (3) national integrity. These themes are crucial to entice Hindu nationalist aspirations around the BJP’s current phase of ethno-nationalist state-crafting. By analyzing the Hindu nationalist discourse around Kashmir’s assimilation, with a focus on the 2019 Jammu and Kashmir Reorganization Act, the chapter flashes out the political implications of Modi’s interventions in the region, situating them within a broader Hindu nationalist design. In Modi’s India, minorities are increasingly expunged from public life, physical and virtual spaces for expressing dissent are curbed and the contours of a Hindu nation are established in opposition to India’s Muslim-majority neighbouring countries. In that sense, while the violence of India’s Kashmir policies is a phenomenon that predates Modi’s rule, the focus here is primarily on how, by normalizing the repressive actions undertaken to affirm, reclaim or defend the boundaries of Hindu India, Modi’s discursive and performative politics have signalled a decisive turn towards the implementation of Hindutva’s ethno-nationalist aspirations.

2 Hindutva’s Ethno-Nationalism Hindu nationalist ideologues have, since the beginning of the twentieth century, progressively moulded a collective imagination around a set of markers that define the Hindus as the ‘people’ of India. Articulated systematically for the first time by Vinayak Damodar Savarkar (1883–1996) in Hindutva: Who is a Hindu? (1923),1 the political ideology of Hindu nationalism branded itself in opposition to the secular aspirations of the Congress Party (Jaffrelot, 2007, 4–5), the mass organization, which was at the forefront of the independence struggle (Shani, 2021, 265). Hindutva’s ideological core builds on the idea that India is bound together by a sacred geography, a common ancestral race and shared culture, language and religion. The emphasis on ethnic and historic-cultural traits underpins a myth of common origin that defines the Hindus as a people and posits a substantial convergence between Hindu and Indian identity. Turning Hindus from a heterogeneous religious group into a recognizable 1

The text is considered the Manifesto of Hindu nationalism.

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and recognized national community is a substantial aspect of Hindutva’s ethnonationalist project. For this reason, Christophe Jaffrelot defines Hindutva as a form of “ethnic nationalism” (1996, 2007, 15). The different elements that make up Hindu ethnic nationalism have remained substantially unchanged for almost a century. They build on another distinctive feature common to other ethno-nationalist ideologies: the differentiation from—and opposition to—a threatening ‘Other’, which endangers the purity of the nation and the integrity of its physical and symbolic boundaries. For Hindutva, non-Hindu religious minorities, and Indian Muslims in particular, embody this ‘anti-national’ ‘Other’ and the danger to national wholeness (Shani, 2021; Sharma, 2015). Accordingly, Muslim-majority neighbouring countries epitomize the antithesis to the Hindu nation (Waikar, 2018, 169). These ideological foundations rely on historical accounts of a Hindu golden age lost at the hands of Muslim conquest (of the ‘sacred’ territory), Islamic ruthless oppressors (of the Hindu people) and mischievous Muslim traitors (of national unity). In turn, they feed a Hindu nationalist self-representation as a liberating force, pursuing a long term, legitimate and ultimately and allegedly ‘sacred’ struggle to (re)build the Hindu Rashtra.

3 Hindutva Goes Mainstream: Modi’s Ethno-Nationalist Discourse For the past twenty years, the various organizations that make up the Hindu nationalist front have become progressively dominant in India’s cultural, economic and socio-political life, both by seizing key positions in relevant institutions and gaining visibility in the public space (Jaffrelot, 2021). The normalization and popularization of Hindutva’s ideology have happened in conjunction with a growing electoral consensus around the BJP, especially under the leadership of Narendra Modi. As Christophe Jaffrelot has thoroughly documented in his analysis of Modi’s rise to power, since the BJP’s electoral victory in 2014, the growing dominance of Hindu nationalism in India’s public life has been paralleled by the establishment of a “de facto Hindu Rashtra” (Jaffrelot, 2021, Part II). It was however after the BJP’s sweeping electoral victory in the 2019 general elections that the large parliamentary majority enjoyed by the government coalition enabled Prime Minister Modi to introduce controversial reforms, display a more upfront authoritarian leadership style and resort to state violence to curb public dissent. As per Hindutva’s idea of India, citizenship has been increasingly predicated upon ethnic/racial descent, cultural and historical heritage, loyalty to the nation’s allegedly ‘sacred’ geography and, ultimately, religious affiliation. India has thus assumed the contours of an “ethnic democracy”, where “some citizens do not have the same rights as others simply because of their religious identity” (Jaffrelot, 2021, 155). This has been the case particularly for Muslim communities who have increasingly found themselves at the receiving end of violent domestic

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policies of assimilation, marginalization and annihilation, bearing the burden of proving their loyalty to a (Hindu) India.2 In addition to episodes of violence, lynching and blunt discrimination, Indian Muslims have been negatively affected by new laws and reforms passed by the federal government and by some states ruled by BJPled coalitions. According to Giorgio Shani (2021), Muslims are the main target of these laws precisely because of their position of ‘constitutive outside’ to the Hindu Rashtra. However, as opposed to other BJP politicians and Hindu nationalist activists, Narendra Modi’s political discourse is seldom explicitly Islamophobic (Waikar, 2018). Instead, a recurrent anti-Muslim subtext pervades his narrative about the ‘civilizing mission’ (The Wire, 2021) with which he has invested his political mandate (see Jaffrelot, 2021, Waikar, 2018). This discursive approach is coherent with Hindutva’s vision of Hinduism as the cradle of universal moral principles and unparalleled civilizational achievements (Truschke, 2020). The ensuing need to forcibly extend to other social groups the benefits Hindus already enjoy is thus predicated upon assimilation (albeit in a subordinate position) within the Hindu fold. The Indian people, Modi has decided on their behalf, should—and must—be united by a common Hindu identity, beyond existing (and un-problematized) social divisions. The mainstreaming of this narrative in India’s public debate, imputable to the populist turn3 of the BJP’s political identity under Modi (Jaffrelot, 2021; Saleem, 2021; Shani, 2021), has materialized into actual government policies. For instance, it underpinned the 2019 introduction of new laws such as the Triple Talaq Bill, the Citizenship Amendment Act and the Abrogation of Article 370 of the Indian constitution, soon after Modi won his second mandate as India’s Prime Minister. These reforms, which addressed core Hindu nationalist tropes in the name of societal progress and national unity, directly targeted Muslim personal law, citizenship rights and the constitutional provisions granting special status to Jammu and Kashmir (J&K), the only Muslimmajority (former) state of the Union. In that sense, Modi’s all-embracing leadership style denotes a drastic shift towards the forceful implementation of Hindu ethnonationalist ideas. While in terms of government action it is instrumental to legitimize contentious reforms, on a political level, Modi’s promise of development and empowerment for relegated social groups and in particular for religious minorities has a triple effect. First, it implicitly reproduces some underlying topoi of Hindutva’s political ideology, stigmatizing Indian Muslim’s structural marginalization as a product of their culture and envisaging their emancipation through mandatory assimilation 2

While Indian Muslims had already been suffering from economic marginalization and political underrepresentation, the situation has worsened during the Modi era. Christophe Jaffrelot has documented the downward turn of Muslim communities’ condition concurrent with the BJP’s increasing political dominance (Jaffrelot, 2021). 3 Modi’s political persona as a man of the people is built in opposition to a political establishment portrayed as elitist and detached from the common man’s everyday life. To convey this populist message he makes conspicuous use of social media tools as well as communication platforms through which he directly addresses his supporters (whom he usually calls “my friends”). See for example the radio programme “Maan Ki Baat” (matters for reflection) broadcasted nationally, during which the Prime Minister discusses ongoing issues of national interest or specific citizens’ initiatives that he waves as examples of national pride and commitment to the common good.

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within the allegedly ‘civilized’ Hindu nation. Second, it sanctions the use of political violence and institutionalized discrimination to suppress alleged anti-national tendencies. This also translates into the normalization of a pervasive and at times candidly outspoken intolerance on the part of BJP political leaders towards expressions of minority identity, civic activism and public dissent.4 Third, and consequently, it officially brands the Indian nation as Hindu, materializing the boundaries of India’s so-called ‘ethnic democracy’ with respect to its second-class (‘anti-national’) citizens and Muslim-majority neighbouring countries.

4 Kashmir as a Symbolic and Physical Frontier Narendra Modi’s turn towards a more authoritarian and assertive ethno-nationalist form of governance has been paralleled by a political discourse addressed to the territorial, cultural and social fringes of the nation. The concept of the frontier is in this case helpful to make sense of a discursive repertoire, which has been imbued with colonial undertones. According to Thomas Simpson (2021), British colonial power in the empire’s borderlands relied on the construction of the frontier as a ‘space of openness’ and indeterminacy, where the colonial state could “act in ways that contravened notions of what was viable or acceptable elsewhere and to ignore similar undertakings in the past that had conspicuously failed” (6). Ad hoc forms of colonial governance redefined these territories as the unruly edges of the empire. Borderlands became “spaces in which the colonial state was both dramatically present and frequently ineffective” (5), and that required a “frontier governmentality” (Hopkins, 2020), distinct from ordinary administration. Exceptional measures, which allowed for a conspicuous use of coercion and violence, became the norm. The aim of such policies was, according to Simpson, “to bind frontier inhabitants by placing them beyond the bounds of ‘normal’ government but within the realm of colonial political economy” (2021, 225). In a similar way, the moral imperative to enforce national unity, which pervades Narendra Modi’s politics, relies on a logic of governmental exception addressed at the territories and the communities that destabilize the Hindu nation’s geographical, religio-cultural and ethno-religious boundaries. For this reason, troubled borderlands become frontiers, where India’s national unity is constantly affirmed and reclaimed against disruptive forces, indeterminacy, conflict and danger. The authoritarian and assertive actions undertaken to keep these frontiers in the purview of the nation-state and within the boundaries of national imagination are thus normalized as part of Hindu India’s very own ‘civilizing mission’. Nowhere as in the case of Kashmir, has this political discourse and related policy actions been more blatantly attached

4

See for instance Sagar (2021) who documented how members affiliated to the Rashtriya Swayamsevak Sangh and the Bharatiya Janata Party fomented hate against those protesting the Citizenship (Amendment) Act of 2019 ahead of the violence that broke out in New Delhi in February 2020.

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to the enforcement of a Hindu ethno-nationalist agenda. Kashmir, the only Muslimmajority (former) state of the Union situated at the border with Pakistan, harbours a deep-seated movement for autonomy and freedom, based on a quest for recognition of distinctive identity and historical roots (Kaul, 2013). Fundamentally, Kashmir unmasks the contradictions of Hindutva’s idea of a Hindu national wholeness and is thus a site where this aspiration must be re-packaged and enforced. In that sense, Kashmir epitomizes a physical and symbolic frontier of the Hindu Rashtra.

4.1 Shyama Prasad Mookerjee and Roots of the BJP’s Kashmir Agenda Kashmir has been a focal point of Hindu nationalist mobilization ever since the partition of the subcontinent in 1947.5 The roots of this enduring involvement in the region were planted by Shyama Prasad Mookerjee, (1901–1953), a Bengali upper caste barrister and prominent Hindu nationalist politician of the time. Soon after Partition, Mookerjee joined a campaign in favour of Kashmir’s full merger with India, becoming a vocal critic of Prime Minister Jawaharlal Nehru’s stand in favour of the state’s autonomy. He championed the mobilization of the Praja Parishad (People’s Assembly)—a Jammu-based Hindu nationalist organization—in order to abolish Article 370 of the Indian constitution, which granted to J&K a special autonomous status, including a separate constitution and flag, reservations in public employment and scholarships and exclusive rights to land and property for residents.6 The latter clause was intended to prevent the acquisition of land by non-Kashmiri Indians and thus preserve demographic ratios in the only Muslim-majority state in the Union. In 1951, Mookerjee founded the Bharatiya Jana Sangh (Indian People’s Association, BJS), the forerunner of today’s Bharatiya Janata Party (Indian People’s Party—BJP),7 entwining the party’s political foundations with the troubled history of Kashmir’s accession to India. It is no coincidence that, in conjunction with the BJP’s political affirmation over the past ten years, Hindu nationalist organizations have been actively

5

See Mridu Rai (2018) for a history of Kashmir from 1947 to the onset of the armed insurgency and Duschinski et al. (2018) for different perspectives on the movement against India’s military occupation. 6 These constitutional provisions were based on the Instrument of Accession, a document that outlined the conditions under which the former Princely State of Jammu and Kashmir had acceded to India in 1947. 7 Mookerjee was backed by the Rashtriya Swayamsevak Sangh (National Volunteer Organisation, RSS), a leading Hindu nationalist organization founded in 1925 by K. B. Hedgewar (1889–1940), a follower of Savarkar. The RSS structure and ideology became key to the consolidation of the Hindu nationalist movement over the long term, mobilizing youth in towns and villages through a capillary network of local branches (shakhas).

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promoting Mookerjee’s political legacy.8 Of particular relevance is, in this sense, the 2015 BJP publication of Devesh Kandhelwal’s book Pledge for an Integrated India, a collection of Mookerjee’s correspondence, public speeches and articles concerning the integration of Jammu and Kashmir. By looking at Mookerjee’s political discourse it is possible to identify some leitmotifs that mobilized the Hindu ethno-nationalist imagination around Kashmir as the nation’s recalcitrant and endangered frontier. First, in his call for a united Bharat (the Hindi word for India), Mookerjee repeatedly questioned, both in his writings and public speeches, J&K Chief Minister Sheikh Abdullah’s and Kashmiri Muslims’ national loyalty: “the relation of Kashmir with Bharat have become a burning topic. We do not wish to say anything against Sheikh Abdullah. But he is exploiting this restraint to give bent to anti-Bharat feelings”. He also criticized Jawaharlal Nehru for failing, in his view, to prevent the seizing of a portion of Kashmir by Pakistan and to reclaim it as an integral part of the national territory: “Pandit Nehru, however, says he is prepared to go to war over Kashmir […] Full one-third of the Kashmir territory is in unlawful enemy occupation […] If Pandit Nehru is truly serious about what he says, let him serve notice on Pakistan to ‘Quit Kashmir’”.9 Second, his vision of an undivided India was predicated upon subsuming Kashmiri Muslims within (Hindu) India’s trajectory of progress and development. In a 1953 article published in the Organiser, the press organ of the RSS, he wrote that “for the sake of Kashmir’s present and future existences, for her security, for her developments and progress and for enabling India to stand proudly as a true republic, Kashmir must form an integral part of the republic of India. […] In the idea of Indian civilization, in its grandeur of arts and science, in its centuries-old tradition of tolerance lies not only an ideal of transcending the achievement of each individual state, but also a guarantee for all, including the Kashmiri Muslims”.10 Third, Mookerjee complained about the increasing marginalization of Hindu culture and the promotion of Islamic values under Sheik Abdullah. Addressing PM J. Nehru at a parliamentary debate, he said that “so far as खल ु ा [open] marriages are concerned, I am told they have some form of contractual marriages—in American languages, ‘companionate’ marriages—where you can live as a husband and wife for a short while and then separate. That is the great right which is being held out to the women of Jammu and Kashmir”.11 These extracts show how, in his speeches, Mookerjee was able to turn the issue of Kashmir’s integration into a national moral imperative, deploying a discursive repertoire that was later developed in the BJP’s political discourse and fully epitomized in Modi’s ‘civilizing mission’.12 8

Devesh Kandhelwal is a researcher at the Deendayal Research Institute, an organization promoting the spread of the philosophy of so-called ‘integrated humanism’, developed by late RSS ideologue Deendayal Upadhyaya. 9 Organiser, 7 July 1952. Quoted in Kandhelwal (2018, 136). 10 Organiser, 28 April 1953. Quoted in Kandhelwal (2018, 142–142). 11 Parliamentary debate, 26 June 1952. Quoted in Kandhelwal (2018, 42). 12 A final preoccupation voiced by Mookerjee was the situation of non-Muslim Kashmiris living in Ladakh and Jammu and, above all, of the Pandit community of the Valley. Denouncing discriminatory policies against Kashmiri minorities, Mookerjee accomplished a double effect of singling

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5 The BJP and Kashmir’s Special Status The BJP’s position with respect to Jammu and Kashmir has been consistent over the years, insisting on the state’s assimilation as a necessary condition to free Kashmiris from corruption, underdevelopment and separatist (and terrorist) movements supported by Pakistan. Since its inception, the BJP has considered Kashmir’s special status a ‘psychological barrier’13 to the state’s full identification as part of the Indian Union. Consequently, dissolving the legal provisions attached to Article 370 has been one of the party’s key electoral promises since the 1980s, including in the 2019 electoral manifesto. According to a 1995 BJP publication entitled BJP on Kashmir 14 the article “provided an effective protective cover on the misdeeds of antinational elements as well as on the masterly inactivity of the Government of India, since Nehru’s time”. In line with Mokeerjee’s approach, the BJP found the Kashmir issue a potent vehicle for asserting some key facets of Hindutva’s discursive repertoire. According to the BJP’s narrative, the Government of India was responsible for keeping alive a temporary provision which allowed for the “seeds of fundamentalism and separatism” to take root in Kashmir, fuelled by Pakistan’s unabated interference and by a “situation where this strategic border state has emerged as the principal challenge to Indian nationhood”.15 In 2019, similar considerations sustained the Modi government’s unilateral decision to scrap Article 370 and revoke Kashmir’s statehood as well as the draconian measures imposed to suppress public dissent, most of which are still in place as of today.

6 Hindu Ethno-Nationalism at the Kashmir Frontier On 5 August 2019, just two months after Modi won his second mandate as India’s head of government, the parliament passed the Jammu and Kashmir Reorganization Act. Fulfilling the BJP’s longstanding electoral promise, the bill revoked Article 370 and Section 35a of the constitution, which granted a special status to Jammu and Kashmir. In addition, the state was dismembered into two Union Territories16 : Jammu-Kashmir and Ladakh. The move was preceded by the evacuation of tourists and pilgrims, the dispatch of a massive contingent of armed forces to add to an already conspicuous military presence, the imposition of a curfew, the cutting of telephone and internet connections, a ban on the media and the preventive arrest of prominent political, cultural and civil society figures. The population lived for almost three out Kashmiri Muslims as anti-national aggressors and associating his concerns with those of an oppressed minority. 13 For instance, see the BJP’s 2009 Electoral Manifesto. 14 BJP on Kashmir, BJP Publications, New Delhi, 1995. Quoted in Jaffrelot (2007). 15 BJP 1996 Electoral Manifesto. 16 Union Territories are administrative units directly controlled by the central government in New Delhi.

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months in total isolation. Leaked accounts reported of pervasive abuse and violence against the inhabitants of the valley at the hands of the armed forces. It must be noted that, even prior to Modi’s drastic intervention, New Delhi’s Kashmir policy had been coloured with references to India’s ‘natural borders’ and based on a combination of coercive methods, political interference, electoral promises and violent repression of public dissent (Kaul, 2013). India’s response to the armed militancy in the valley had, over the years, increasingly resembled an outright occupation, with the deployment of hundreds of thousands of armed forces and the imposition of emergency laws granting special powers to security personnel and government authorities. Pervasive statesponsored violence had been justified in the name of democracy, good governance and anti-terrorism policies (Kaul, 2018, 137), as well as the region’s “geopolitical framing as an area of ‘strategic’ significance and as an arena for contesting Pakistan’s ambitions to destabilize India” (Kaul, 2013, 72). Moreover, a number of presidential orders and of Supreme Court’s judgements had progressively weakened Kashmir’s special autonomous status granted by Article 370, while the legitimacy of state’s internal politics had been tarnished by New Delhi’s unabated interference (Bhan et al., 2018). However, Modi’s Jammu and Kashmir Reorganization Act represented a new turn in India’s Kashmir policy. They substantially transformed the administrative configuration of the territory. According to Kaul (2021), the Act was “the apotheosis of what can best be described as the colonial exercise of power by India in Kashmir”. Indeed, Modi’s interventions in Kashmir have materialized through new regulations regarding residency laws, land ownership, demography and resource exploitation. They are accompanied by a full-scale militarization, pervasive violence and the denial of fundamental democratic rights. Ultimately, they have been sustained by a political discourse that, in the name of a civilizing mission, incites the national imagination to embrace the ethno-nationalist foundations of his political project.

7 Modi’s Kashmir Agenda: Progress, Women’s Rights and National Integrity The political ramifications of Modi’s idea of India are clearly evident in the discursive and performative politics that accompanied the introduction of the legal changes and the concurrent draconian measures enforced in Kashmir. Indeed, statements by the Prime Minister and other BJP politicians in this regard resonate ominously with a rhetoric of conquest and colonial exceptionalism, in the name of progress, women’s rights and national integrity. On 8 August 2019, in the first public statement three days after the passing of the Kashmir Act, Modi said that under Article 370 “more than 1.5 crore [15 million] people of Jammu & Kashmir were deprived of the benefits of laws that were enacted for the benefit of the people of India”.17 He then listed the advantages that New Delhi’s direct administration would bring to Kashmir, glossing 17

PM Narendra Modi’s address to the Nation, 8 August 2019. https://www.narendramodi.in/primeminister-narendra-modi-s-address-to-the-nation-on-8th-august-2019-545901.

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over the consequences that the blockade of communications, economic activities and what was a de facto near-complete militarization were already having on economic activities and daily life in Kashmir. For example, he affirmed that, soon after the territory was brought under the central government’s control, “the good effect of good governance and development have been observed on the ground. The schemes which earlier remained only in files, have been implemented on ground. Projects pending from decades have been speeded up”. As Nitasha Kaul (2021) has noted, the alleged ‘liberatory rationale of development’ in Kashmir (121) works through “denial of consent, paternalism, violence, enforced silencing, lack of accountability, arbitrariness, divide and rule, humiliation and a specious idea of development” (116).18 In fact, in Modi’s speech, the central government emerges as a firm but benevolent hand, in a mission to develop Kashmir for the good of the Kashmiri people. Depicting his leadership as a benign force, he also called on for what he referred to as ‘national collectivity’ to sustain his efforts as a sort of moral imperative: “the environment required for this, the need of change in administration, all is being taken care, but for this I need the support of all countrymen”. ‘The silence over the preventive suppression of all potential opposition is a constitutive part of this discursive construction of Kashmir as the nation’s recalcitrant frontier, where exceptional measures are normalized in the government’s pursuit of its ‘moral’ duty. The draconian actions taken to annihilate all possible physical and virtual spaces for expressing dissent can be understood through this trivialization of violence and authoritarianism in the name of the region and the wider nation’s interest. Deploying the Hindu nationalist’s trope of the ‘oppressed Muslim woman’ in need of saving (Gupta et al., 2020), Modi also said that “the daughters of Jammu & Kashmir were deprived of the right that our daughters had in rest of the states”.19 Here Modi was (inaccurately) referring to a law, which prescribed that Kashmiri women who married non-residents would lose their status of state subjects.20 Meanwhile, several BJP leaders issued statements—later taken up by supporters online—that unceremoniously showed that Modi’s ethno-nationalist policies in Kashmir were predicated upon the appropriation of Kashmiri women’s bodies. At a public event, a BJP MP cheerfully declared: “The [party] workers are very excited and those who are bachelors, they can get married there. There is no issue now. Earlier, there was lot [sic!] of atrocities on women. If a woman from there [Kashmir] got married to a man from Uttar Pradesh, her citizenship would be revoked. There was different citizenship for India and Kashmir. And the Muslim workers should celebrate here. Get married there. To a fair Kashmiri girl. There should be celebrations. Everyone should celebrate… Be it Hindu or Muslims. This 18

Nitasha Kaul has used the term “eco-nationalism” to qualify this “notion of coloniality as development” (Kaul, 2021, 116). 19 PM Narendra Modi’s address to the nation, 8 August 2019. https://www.narendramodi.in/primeminister-narendra-modi-s-address-to-the-nation-on-8th-august-2019-545901. 20 Such discourse passed in the national media despite the fact that a 2002 ruling by the Jammu and Kashmir High Court had already essentially rendered this clause null and void. State of Jammu & Kashmir and Others v. Dr. Susheela Sawhney and Others (2003) AIR 2003 J&K, 2003 (1) JKJ 35 (India).

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is something the entire country should be celebrating” (The Wire, 2019). These statements triggered a wave of online misogynist and racist threads among BJP supporters. Modi’s paternalistic rhetoric and the flare up of masculinist pride among BJP leaders and supporters reflected the predatory underpinnings of the Hindu nationalist discursive cliché according to which, as Nitasha Kaul has noted, “Kashmiri female bodies are projected as beautiful, fragile and vulnerable to victimization by hyper-masculine Kashmiri-Muslim patriarchy, thus calling for being ‘saved’ by not only the progressive feminist Indians but also by, rather than from, the Indian masculinist nation state” (Kaul, 2021, 115).21 In line with another theme at the heart of Hindutva ideology, Modi added that “article 370 and 35A have given nothing but secessionism, terrorism, nepotism and widespread corruption on a large scale to Jammu-Kashmir. Both these articles were used as a weapon by Pakistan to flare up the emotions of some people”. Modi here suggested that Kashmir’s special status was an expression of Pakistan’s deliberate influence on the border region, which translated into poor governance and rampant anti-India sentiments among Kashmiri Muslims. In this statement, Pakistan epitomizes both the detrimental effects of Muslim-majority rule and an alleged threat to national integrity. In this way, Modi was also able to dismiss the growing criticism against his policy in the region, attributing it to a “handful of people, who want to vitiate the atmosphere there” and applauding “the patriots of Jammu—Kashmir who are strongly opposing the nefarious designs of Pakistan in perpetuating terrorism and separatism”. This rhetoric evoked a persistent fantasy portraying Kashmir as a heavenly land lost at the hands of ‘Muslim traitors’ and spoiled by the interferences of India’s arch-enemy. To justify the stripping of J&K’s statehood which brought the territory under New Delhi’s direct rule, Modi said: “When our Jammu and Kashmir—the paradise on earth, after achieving new heights of development, attract the whole world, and when there will be greater ease of living in the lives of citizens, when they would ceaselessly get their rights, when all the tools of governance would speed up the work in favor of the masses, then I don’t think there would be any need to continue with the system under the union government”. Yet, while the ‘system under the union government’ is today still largely in effect, the label of ‘paradise on earth’ was, and continues to be, out of tune with the reality of a place devastated by decades of occupation and conflict. Similarly incongruous, in light of Kashmir’s ongoing state of enforced isolation, militarization and insecurity, is Modi’s remark about “the possibility of Jammu and Kashmir and Ladakh becoming one of the greatest tourist destinations”. The colonial rationale sustaining Modi’s interventions at the nation’s borderlands underpins this idea of a bountiful frontier to be brought under the central government’s control. Accordingly, land and women become the spoils of Modi’s mission to liberate Kashmiris from their own backwardness. In that sense, the themes of national integrity, progress and women’s 21

The online media outlet Scroll.in documented this trend, and especially what they call a ‘new sub-genre of songs’, which links getting daughters-in-law and buying land in Kashmir. Watch: a whole new sub-genre of songs emerges about getting Kashmiri bahus, buying land in Valley. Scroll.in (2019).

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rights intersect in Modi’s political discourse. They are instrumental to legitimize his political leadership and to connect the BJP’s Kashmir policy to his wider project of ethno-nationalist state-crafting that, as mentioned above, has unfolded through specific legislative interventions and a tolerant approach towards displays of organized physical and online violence targeting relegated social groups and, particularly, Indian Muslims.

8 Conclusion This chapter has discussed how the trajectory of Hindu nationalism’s interventions in Kashmir, culminated with the aforementioned 2019 Jammu and Kashmir Reorganization Act, was sustained by a discursive approach which constructed Kashmir as the nation’s frontier. This view normalized governmental alleged ‘exceptionalism’ as a means to address the specificity of a territorial and cultural borderland, jeopardized by India’s arch-enemy, Pakistan. The chapter then shows how the issue of Kashmir’s assimilation became instrumental to incite a Hindu nationalist imagination and to promote Hindutva’s enduring project of ethno-nationalist state-crafting, as the movement rose to prominence in India’s public life. In particular, under Modi’s leadership, the political issue of Kashmir has become a focal point for the affirmation of Hindu supremacy under the guise of a “civilizing mission”. In conclusion, I offer some reflections on how Modi’s political discourse on Kashmir fits into a broader Hindu majoritarian political agenda, the implications of which bear upon India’s self-representation as ‘the mother of all democracies’ (The Hindu, 2021). In fact, Modi’s political agenda has concrete repercussions for the fundamental rights of India’s religious minorities and other marginalized social groups and in terms of India’s positioning in the regional context. Moreover, as this chapter has attempted to show, Modi’s capacity to entice Hindu nationalist militancy and support around his political persona relies on a rhetoric of national unity, which rests on political authoritarianism, polices oppressing India’s Muslim minority, and the violent suppression of democratic spaces for dissent and contentious politics. In 2019, the Jammu and Kashmir Reorganization Act became part of a series of legal reforms that made very evident Modi’s intention to craft a consensus around an ethno-nationalist idea of India. These laws contributed to defining the contours of Indian citizenship, while also sending clear messages to Muslim-majority neighbouring countries. All along, Modi and other BJP leaders accompanied the contentious reforms with the same narrative of progress, women’s rights and national integrity. For instance, welcoming the introduction of the 2018 Triple Talaq Bill22 22

The bill was a direct step towards the reform of personal laws, another Hindu nationalist trope particularly targeting Muslim personal law and aiming at the introduction of a Uniform Civil Code. It made the practice of instant triple talaq—whereby a man can divorce his wife by uttering the word ‘talaq’ thrice—a penal offence, punishable with imprisonment up to three years. As in the case of the Section 35a concerning Kashmiri women, the Supreme Court had in 2017 already declared triple talaq void.

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with an article in a popular national newspaper, the Minister of Justice Ravi Shankar Prasad wrote that “the kind of jubilation it [the law] has caused across the country, barring conservative elements, indicates how it is a proud moment for India. Our country is transforming and the women of India feel empowered” (The Indian Express, 2019). Once again, the trope of the oppressed Muslim woman in need of saving was used to sustain a legislation aimed at strengthening the Hindu ethnonationalist state (Gupta et al., 2020). Meanwhile, in several Indian cities, Muslim women had been taking to the streets to protest against the controversial reform (The Hindu, 2018), but were dismissed together with other ‘conservative elements’ by representatives of the coalition government. In December 2019 then, the India’s parliament passed the Citizenship Amendment Act.23 The act provides preferential channels for obtaining Indian citizenship to irregular migrants belonging to persecuted Hindu, Sikh, Buddhist, Jain, Parsi and Christian religious minorities in Pakistan, Bangladesh and Afghanistan. The act, which explicitly excludes Muslims, was accompanied by waves of protests against what was perceived as a discriminatory policy on religious grounds. A large part of the demonstrations was led by women, especially in New Delhi, where the BJP had lost the legislative assembly elections previously (Chopra, 2021). The protests were met with state-sponsored violence fuelled by Modi’s and prominent BJP members’ misogynistic and anti-Muslim statements (Sagar, 2021). Modi’s Kashmir policy must thus be situated in the context of a set of government actions, which targeted Muslims through both legislation and political discourse. It is then possible to inscribe the aura of alleged ‘exceptionalism’ that surrounded the 2019 Jammu and Kashmir Reorganization Act within a wider project of state-crafting and political leadership that, coherent with Hindutva’s core agenda, has increasingly attempted to excise minorities from the national collectivity and to ignore, hinder or violently suppress expressions of public dissent by invoking the greater interest of the (Hindu) nation.

References Bhan, M., Duschinski, H., & Zia, A. (2018). “Rebels of the streets”: Violence, protest, and freedom in Kashmir. In M. Bhan, H. Duschinski, C. Mahmood & A. Zia (Eds.), Resisting Occupation in Kashmir. University of Pennsylvania Press. Chopra, D. (2021). The resistance strikes back: Women’s protest strategies against backlash in India. Gender & Development, 29(2–3), 467–491. Duschinski, H., Bhan, M., Zia, A., & Mahmood, C. (2018). Resisting Occupation in Kashmir. University of Pennsylvania Press. 23

The reform was preceded by the implementation of the National Register of Citizens (NRC) in the state of Assam. The register, which provides for the revocation of citizenship to those who cannot prove residency prior to March 1972 (the year Bangladesh declared Independence from Pakistan) was considered by many to be a way of identifying “Bangladeshi Muslims” and to particularly affect poor women who would struggle to produce the necessary documentation to prove family ties. Interior Minister Amit Shah did not hesitate to declare that a similar measure could be implemented nationwide.

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Gupta, P., Gökarıksel, B., & Smith, S. (2020). The politics of saving Muslim women in India: Gendered geolegality, security, and territorialization. Political Geography, 83 [Online]. Hopkins, B. D. (2020). Ruling the Savage Periphery Frontier Governance and the Making of the Modern State. Harvard University Press. Jaffrelot, C. (1996). The Hindu Nationalist Movement and Indian Politics: 1925 to the 1990s. Penguin Books. Jaffrelot, C. (2007). Hindu Nationalism. Princeton University Press. Jaffrelot, C. (2021). Modi’s India. Princeton University Press. Kandhelwal, D. (2018). Pledge for an integrated India. Dr. Mookerjee in throes of Jammu and Kashmir, 1951 to 1953. Prabhat Prakashan. Kaul, N. (2013). The idea of India and Kashmir. Indian monthly symposium since 1959, Seminar. 643 (pp. 72–75). Kaul, N. (2018). India’s obsession with Kashmir: Democracy, gender, (anti-)nationalism. Feminist Review, 119, 126–143. Kaul, N. (2021). Coloniality and/as development in Kashmir: Econonationalism. Feminist Review, 128, 114–131. Rai, M. (2018). Kashmir: From Princely State to Insurgency. Oxford University Press. Sagar. (2021). Delhi violence unmasked. Part One and Part Two. The Caravan. https://caravanma gazine.in Saleem Raja, M. A. (2021). Hinduism, Hindutva and Hindu populism in India: An analysis of party Manifestos of Indian rightwing parties. Religions, 12, 803. https://doi.org/10.3390/rel12100803 Schofield, V. (1996). Kashmir in Conflict: India. Bloomsbury Publishing. Simpson, T. (2021). Introduction. In the frontier in British India: Space, science, and power in the nineteenth century (pp. 1–20). Cambridge University Press. Shani, G. (2021). Towards a Hindu Rashtra: Hindutva, religion, and nationalism in India. Religion, State and Society, 49(3), 264–280. Sharma, J. (2015). Hindutva: Exploring the Idea of Hindu Nationalism. HarperCollins Publishers India. Truschke, A. (2020). Hindutva’s dangerous rewriting of history. South Asia Multidisciplinary Academic Journal, 24/25 [Online]. Waikar, P. (2018). Reading Islamophobia in Hindutva: an analysis of Narendra Modi’s political discourse. Islamophobia Studies Journal, 4(2), 161–180.

Newspapers Scroll.in. (2019). Watch: A whole new sub-genre of songs emerges about getting Kashmiri bahus, buying land in Valley, 12 August. https://scroll.in/video/933520/watch-there-is-a-whole-newsub-genre-of-songs-inspired-by-kashmir-and-the-article-370-controversy. The Indian Express. (2019). Triple Talaq Bill passage is a transformative point in India’s sociopolitical context, 7 August. https://indianexpress.com/article/opinion/columns/triple-talaq-billequality-at-last-5883887/. The Hindu. (2018). Muslim women protest anti-triple talaq Bill, 31 March. https://www.thehindu. com/news/cities/mumbai/muslim-women-protest-anti-triple-talaq-bill/article23403604.ece. The Hindu. (2021). India is the mother of all democracies, says Modi at U.N. General Assembly, 25 September. https://www.thehindu.com/news/national/prime-minister-narendra-modi-addressesthe-76th-session-of-united-nations-general-assembly-in-new-york/article36668955.ece. The Wire. (2021). Modi Is on a Civilisational Mission—Please Excuse a Few Grand Lies, 6 November. https://thewire.in/politics/modi-is-on-a-civilisational-mission-dont-mind-afew-grand-lies. The Wire. (2019). BJP Workers Excited to Marry Fair Girls From Kashmir, Says UP MLA, 7 August. https://thewire.in/women/vikram-saini-bjp-kashmir-article-370.

India’s US Policy 1991–2019: The Gradual Loss of Strategic Autonomy Michelguglielmo Torri

Abstract This chapter explores India’s US connection from 1991 up to the eve of the Covid-19 pandemic. It argues that the US connection became the mainstay of India’s foreign policy soon after and as a consequence of the demise of the USSR. The initiative in pursuing a privileged relationship with Washington was taken and eagerly pursued by New Delhi, which aimed at avoiding international isolation and supporting its new neoliberal economic policy while preserving its own strategic autonomy. Washington responded positively to New Delhi’s entreaties, but up to 2003 or 2004, it did not appear overly interested in its relationship with India. Things changed following the US invasion of Iraq, when Washington, realizing India’s newly acquired geopolitical relevance, completely changed its approach to India, proactively pursuing the project to insert it in the arc of containment around Iran and China. At the closing of the period under review, India, in exchange for an increasingly conspicuous supply of US weapon systems and military technology appeared to have de facto given up its strategic autonomy, including the pursuit of a foreign policy aimed at promoting its own economic interests. The Indian government justified this shift in policy as necessary to contain China, namely a country whose relations with India had dipped in or around 2006, as a direct consequence of the US-sponsored insertion of India into the US-built anti-China arc of containment.

1 Introduction: India’s US Foreign Policy from 1991 to the Eve of the Covid-19 Pandemic From 1971 to the demise of the USSR in 1991, the main axis of Indian foreign policy was the 20-year Indo-Soviet Treaty of Peace, Friendship and Co-operation (signed on 9 August 1971). Its continuing importance was highlighted by the fact that, when it expired in August 1991, it was renewed for a further two decades. However, the failed

M. Torri (B) University of Turin, Turin, Italy e-mail: [email protected] © Springer Nature Switzerland AG 2023 S. Beretta et al. (eds.), India’s Foreign Policy and Economic Challenges, Global Power Shift, https://doi.org/10.1007/978-3-031-20270-4_10

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Russian coup d’état on 19–21 August 1991 triggered the process that, in December of that same year, ended with the break-up of the USSR. The dissolution of the USSR made the Indo-Soviet Treaty of Peace, Friendship and Co-operation obsolete and forced the Indian government to rethink its foreign policy. By January 1992, India’s new approach to foreign relations had been formulated: the close relationship with the US would take the place of the India–USSR relationship as the mainstay of India’s foreign policy. During the 1990s, there is little doubt that the driving force in promoting the bilateral US–India connection was India. While the US was pleased with India’s change of orientation in its foreign policy, India’s international weight continued to appear limited to US policy-makers. On top of it, Washington continued to be unhappy about New Delhi’s standing concerning the nuclear question. India was one of the few countries which had refused to sign the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) and, indeed, had clandestinely equipped itself with nuclear weapons. In the 1990s, in spite of the increasingly close US–India relationship, Washington’s insistence that New Delhi signed the NPT and other international pacts limiting nuclear proliferation continued to be a source of tension between the two nations. Things spectacularly changed in the first decade of the twenty-first century, when, in 2005, the US took the initiative, promoting the deepening of the bilateral relationship. This was an objective that Washington pursued by fundamentally changing its approach to the nuclear question. Washington had hitherto hindered India’s nuclear ambitions; beginning in 2005 it started favouring them. Behind this sudden and total change of approach was Washington’s new perception of India’s growing weight at the international level and the consequent conviction of the opportunity to proactively insert it in the US-centred web of treaty and non-treaty alliances spun by Washington around and against its main Asian adversaries, in particular China and Iran. While pursuing an increasingly closer relation with Washington in the 1990s and early 2000s, New Delhi insisted on maintaining its strategic autonomy, namely the capability to act in accordance with its own national interest in the field of international relations. When Washington overturned its nuclear policy towards India, coupling it with the offer to help India to become a global power, things, however, became at the same time more promising and more difficult for New Delhi. Washington was dangling in front of New Delhi the promise of some very alluring rewards: helping the development of India’s nuclear industry; putting a stop to the international nuclear embargo on India, which had been put in place by the US itself; massively supplying India with state-of-the-art weapons and weapon systems; offering US military protection; helping India in its economic development. These perks came, however, with some very strong strings attached. Two, in particular, were very visible and potentially very hazardous: the first was the danger that the growing military ties with the US would translate into the loss of India’s strategic autonomy; the second was represented by the risk that US pressures to liberalize the Indian market would cause an acceleration of India’s ongoing neoliberal reformist process such to adversely impact on India’s society, particularly its weakest strata.

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In 2005–2008 New Delhi decided to accept Washington tempting offers. The Indian political class, nonetheless, bet on its capacity to maintain India’s own autonomy both in the strategic and economic fields. In the following years, the US–India bilateral relationship, in spite of some problems, became progressively better in the political, military and economic fields. Things, however, got complicated beginning with 2017, namely the starting year of Donald Trump’s presidency. President Trump’s myopic pursuit of his “America First” policy translated into the imposition of trade sanctions even on allied countries. It is worth stressing that, in the case of India, Trump’s objective did not substitute the previous ones. In fact, India’s insertion in the US-dominated web of alliances and the opening of the Indian market to US capital continued to be pursued by Washington. Nonetheless, the new “America First” policy conspicuously complicated the pursuit of Washington’s traditional goals and, to an extent, damaged US relations with the countries which became victims of Trump’s policy. In the case of India, there was, however, a countertendency at work, which diminished the adverse impact on bilateral relations of Trump’s “America First” policy. This countertendency was the sudden worsening of India–China relations, which resulted in the Doklam crisis of 2017. In fact, the Doklam crisis was the end product of a gradual worsening of the bilateral relation between India and China, which had been ongoing since 2006. That was without doubt also part of China’s response to the tightening of the US–India relations since 2005. It is worth stressing, however, that up to 2016, although strained, the post-2006 bilateral India–China relationship was not beyond repair (Torri, 2021). Relations worsened in 2017 when India took the initiative to confront China along the Himalayan border in Doklam. This was a territory that was subject to a dispute between Bhutan and China and not claimed by India. At that point it became evident that India was asserting its position not only as a main international player, at least in Asia, but as a major power in direct competition with China as the paramount power in Asia. Trump’s “America First” policy had conspicuously hampered the bilateral US– India connection; India’s decision to openly challenge China, however, dramatically enhanced the value of US support for India, particularly at the military level. Accordingly, in spite of Trump’s dysfunctional “America First” policy, under his presidency the US came increasingly near to fully realize an objective eagerly pursued since 2005, namely subordinating India’s foreign policy to Washington’s aims and interests. The remainder of this article is focussed on fleshing out the points made in this introduction.1

1

With the exception of the India–China relation, which is dealt in this same volume by Axel Berkofsky. For an alternative view to the one skilfully and exhaustively offered by Axel Berkofsky, see Torri (2021).

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2 The Reorientation of India’s US Foreign Policy Under Narasimha Rao As noted above, from 1971 onwards, the main axis of Indian foreign policy had been the Indo-Soviet Treaty of Peace, Friendship and Co-operation. Signed on 9 August 1971, in New Delhi, the treaty, besides a series of important agreements in the economic sphere, involved a commitment by both signatories to intervene to defend the other in case of an attack by a third country (Government of India, 1971). In this respect, the purpose of the Indo-Soviet treaty was clearly to prevent any intervention in favour of Pakistan by its most formidable ally, the People Republic of China (PRC), in the case of an Indo-Pakistani war. More in general, the treaty also sanctioned Soviet support to India in the UN Security Council, which prevented the endorsement of resolutions against India’s interests. The tensions that arose between India and the US, which peaked with the India– Pakistan war in 1971 and the explosion by India of a nuclear device in 1974, did gradually recede in the course of the 1980s, largely during the presidency of Ronald Reagan (1981–1989) (Cohen, 1988). Nonetheless, the main benchmark in Indian foreign policy continued to be the special relationship with the USSR. Proof of this is the fact that when the treaty expired, it was renewed for a further two decades on 8 August 1991 (Sharma, 2003, II: 110). It was a renewal—and also this has already been noted—that the dissolution of the USSR in December of that same year made meaningless. Immediately after the failed 19–21 August 1991 USSR coup d’état, Narasimha Rao and the diplomats running the Indian foreign ministry, in particular Foreign Secretary Jyotindra Nath Dixit, who in the foreign policy field was Rao’s alter ego, realized what was happening. Accordingly, from late November 1991, they embarked on intensive internal discussions over possible future foreign policy scenarios. In this way, a new strategy was identified, dictated by two key necessities. One was to avoid India’s isolation on the international checkerboard; the second, nicely dovetailing with it, was the upholding of India’s new neoliberal economic policy, launched in the summer of that year, which implied the improvement of relations with large industrial powers. The pursuit of both objectives entailed improving relations in particular with the US, India’s leading commercial partner, and the nation which Indian politicians felt held sway with both the World Bank and the IMF, whose loans India desperately needed. When the prime minister himself outlined this new direction in foreign policy to the Cabinet Committee on Political Affairs (January 1992), a series of crucial steps, aimed at implementing the new approach, had already been or were about to be taken. Towards mid-December 1991, aware of the weight of the pro-Israel lobby in the US, India had voted for the cancellation of the UN 1975 motion which equated Zionism with racism (which India had previously supported). In the meantime, direct negotiations had been opened between Indian diplomats and an Israeli high-ranking officer in Washington. These led to India recognizing the State of Israel, which was announced on 29 January 1992 by India’s Foreign Secretary J. N. Dixit. Finally,

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armed with the plaudits he had won by recognizing Israel, India’s Prime Minister Narasimha Rao travelled to New York, where he met with US President George W. H. Bush on 31 January 1992. The 31 January 1992 meeting—the first of a series of similar, high-level gettogethers to take place over the next few years—marked the start of a new phase of the relations between the two countries.

3 The Difficulties Hindering India’s Pro-US Foreign Policy The process of rapprochement started by Narasimha Rao was less harmonious than might have been expected. Three factors had an impact on how such rapprochement unfolded. The first factor favouring the India–US connection has already been hinted at. The launching of the new neoliberal economic policy in India, which opened the prospect for the US capital of being able to access the Indian market. This was a market that, according to estimates, not only already included 50 million consumers of durable goods but, by 2025, would expand to include 583 million people, pushing India from 12th position in the ranking of the world’s largest markets to 5th (Ablett et al., 2007). This in itself created a second factor that was destined to improve relations between the two countries: the formation of a pro-India lobby in the US. It originally consisted of US businessmen who had a vested interest in promoting their own investments in India, but it was soon strengthened by the Indian community in the US. This was a community recently formed but made up of individuals well integrated into American society, mainly well-off businessmen and professionals, representing a privileged social group, fully able to make their weight felt in US domestic policy (Sharma, 2017). If India’s increasing economic importance and the growing clout of the Indian lobby in the US played a positive role in promoting the India–US relationship, a third factor, however, worked in the opposite direction. This was India’s position on the nuclear issue. Whereas the US adhered to the NPT and aimed at preventing the proliferation of atomic weapons, India stuck firmly to a quite different position. Firstly articulated by Rajiv Gandhi (India’s Prime Minster in 1984–1989), it was based on the premise that the NPT was discriminatory. In fact, the undertaking it contained, whereby the legitimate nuclear weapon states (US, UK, France, Russia and China) were supposed to progressively dismantle their nuclear arsenals, had never been enforced. Conversely, countries such as India, which had reached the nuclear threshold after 1970 (the year when the TNP entered into force), were prevented from arming themselves with nuclear weapons. The Rao government held fast to this stand for two main reasons. The first was that being able to decide freely whether to develop a nuclear arsenal was seen by the Indian political class and public opinion as a matter of national sovereignty. The

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second was that possessing nuclear weapons (India by this stage already had them, despite denying it) was seen as an indispensable insurance against China, which had carried out its first nuclear test in 1964 (Bidwai & Vanaik, 2000; Perkovich, 1999). It is true that another aspect of Rao’s foreign policy, also consistent with the line pursued by Rajiv Gandhi, involved a desire to thaw relations with China; and some positive results were achieved in this area. But Rao and his co-workers clearly believed in the Roman maxim si vis pacem, para bellum: if you want peace, prepare for war. In this situation, Narasimha Rao, despite sticking to his decision not to make any commitment that would restrict India’s liberty in the area of nuclear weapons, still managed to give the impression that New Delhi was to some degree willing to engage in negotiations over the TNP. Rao’s objective was to gain time, allowing the ties between the two countries to strengthen. It was the right kind of strategy, which led to the solidifying of India’s friendship with the US, without giving up India’s right to build its own nuclear arsenal.2

4 The 1998 Nuclear Crisis India’s US foreign policy continued along the lines set by Narasimha Rao also during the United Front governments, in power during the short 1996–1998 legislature. In 1998, after the premature end of the legislature and a new general election, a new government came to power, supported by a coalition dominated by the rightist Bharatiya Janata Party (BJP) and headed by one of its leaders, Atal Behari Vajpayee. Once the BJP came to power, its leaders, acting in great secrecy,3 decided to carry out a series of five nuclear tests. They were conducted between 11 and 13 May 1998, less than two months after the new government took office. Soon, they were collectively indicated by the Indian press with the sobriquet of Pokhran II, in a reference to the area in the Thar Desert where they took place and where the first Indian nuclear test had been carried out in 1974. Pokhran II was decided less as a manifestation of power at the international level than to shore up the position of the majority party domestically. The BJP headed a ramshackle coalition of parties which, with a single exception, did not share its ideological bent. This prevented the BJP from implementing its key election promises, basically aimed at turning India from a secular into a Hindu state. This was a situation that would have made it impossible for the BJP to preserve its image as a strong party, able to act quickly and decisively. Pokhran II was the way out of this political stalemate, aimed at strengthening the BJP’s domestic position (Sharma, 1998). 2

In fact, by that time India’s secret programme aimed at creating a credible nuclear arsenal was already in an advanced stage. 3 So much so that even the Defence Minister, who belonged to another party, was informed only 48 h before the explosions took place. See Sharma (1998: 30).

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The decision to carry out the atomic explosions met with considerable success— albeit only a temporary one—as far as the BJP’s domestic goal was concerned. Indeed, Indian public opinion reacted enthusiastically to the nuclear tests, under the delusion that they sealed India’s role as a major world power once and for all. Only a small group of intellectuals, including well-known novelist Arundhati Roy, and two left-wing parties—the Communist Party of India (Marxist) and the Forward Block—dared to criticize the BJP’s decision. In spite of the enthusiastic reaction of the Indian parties and public opinion, the domestic gains—as had been the case also in 1974—proved to be short-lived. This, however, does not need to detain us. What is important to stress from the point of view of the subject of this article is that the transitory success on the domestic front was paid with a heavy price at the international level. Barely two weeks after Pokhran II, on 28 and 30 May 1998, Pakistan, which evidently felt directly threatened by India’s demonstration of nuclear power, replied with six nuclear tests of its own (the number being equal to the total of the Pokhran I and Pokhran II tests). For their part, the US and Japan lobbied the international community to impose a series of sanctions against India (and Pakistan), particularly in the area of the transfer of high technology. Finally, Vajpayee’s clumsy attempt to justify the May 1998 nuclear tests, in a letter to US president Bill Clinton, by referring to the danger posed by neighbouring China (The New York Times, 1998), while without effect on the US administration’s decision to impose sanctions on India, caused Beijing’s ire and interrupted the slowly but steadily improving trend which had characterized India–China relations since 1987.

5 From Unconditional Support to Bush’s “war on terror” to the Distancing from the US Interventionist Policy After the 1998 nuclear tests, a main preoccupation of the Vajpayee government’s foreign policy became the attempt to remedy the deterioration in India’s foreign relations, caused by Pokhran II. Particularly difficult and slow was the mending of relations with the US. Washington answered New Delhi’s entreaties by asking India to adhere to the Comprehensive [Nuclear] Tests Ban Treaty (CTBT), outlawing all nuclear tests, both for civilian and military purposes. Washington also asked New Delhi to formally engage in maintaining India’s nuclear capabilities at a minimum level of deterrence (Frontline, 1998). Some sanctions were cancelled on the eve of US President Bill Clinton’s visit to India in March 2000, but most of them—particularly those on high technology products—remained in place (Frontline, 1999). The situation did not change even when Clinton’s successor, George W. Bush— who had always opposed the CTBT and effectively consigned it to oblivion—took over as the new US president in January 2001. The terrorist attacks perpetrated against the US on 11 September 2001, however, drastically changed the political situation. India was one of the first nations to adhere to Washington’s “war on terror”, unconditionally siding with the US, and supporting the attack on the Taleban regime

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in Afghanistan.4 At long last, this caused the US to cancel the sanctions imposed following the 1998 nuclear experiments, and US–India relations became particularly close and cordial. Things, however, changed once again concomitantly with the attack by a US-led coalition on Iraq on 19 March 2003. In fact, although, as just noted, India had unconditionally espoused Bush’s “war on terror”, the invasion of Iraq—which bypassed the United Nations and therefore constituted a breach of international law—was seen, in India as elsewhere, as a completely different matter. Indeed, in India broad swathes of public opinion and most political forces, regardless of their bent, saw the invasion of Iraq as the effective resurgence of western colonialism in Asia.5 This perception brought Indian Prime Minister Atal Behari Vajpayee to theorize that the manner in which Iraq had been attacked and the United Nations left ineffective had created a new situation. This was characterized by the need, for each individual nation, to take responsibility in seeking to solve the issues that divided it from other nations (Frontline, 2003). Vajpayee’s stand started a lively debate that continued for several months on India’s relations with the US. This debate became even livelier because, in the same period, the US was putting pressure onto India to send a large corps of soldiers to serve in Iraq (10,000 or 17,000 men, depending on the sources). The debate managed to split all Indian political parties. The government itself was profoundly divided, and the rift between the anti-US and the pro-US factions was so deep that, judging by the public statements made at the time by various leading government representatives, India seemed to be simultaneously pursuing two separate and contradictory foreign policies. Between 22 and 27 June 2003, Vajpayee made an official visit to Beijing at the head of a delegation including around a hundred Indian businessmen. The visit, which took place in a very cordial climate, marked the culmination of the rapprochement between the two states, which had been launched immediately after Vajpayee’s 1998 aforementioned faux pas. Vajpayee’s visit resulted in a conspicuous thaw in India– China relations and the decision to shift their focus from border disputes to the promotion of economic relations. The diplomatic success achieved by Vajpayee strengthened his position in the ongoing dispute with the pro-US wing of his government. Further support had been received since the opposition parties, led by Congress Party’s President Sonia Gandhi, took a joint position against the sending of Indian troops to Iraq. On 14 July 2003, this resulted in the Indian government official decision ruling out the sending of Indian troops to Iraq.

4

India had actively supported the anti-Taleban Northern Alliance in Afghanistan well before 11 September 2001. 5 It was an impression that could not but be strengthened by the fact that the invasion force was made up by militaries of Western countries: 148,000 US soldiers, 45,000 British soldiers, plus 2000 Australian and 194 Polish troops.

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6 The US’ “Nuclear Enticing” of India (2005–2008) In 2004, the Indian general election saw the unexpected defeat of the BJP-led alliance. The new government was formed by the Congress and its allies, resulting in the formation of the United Progressive Alliance (UPA). It was headed by Manmohan Singh, formerly the finance minister in the Rao government, who had been handpicked for the post by Sonia Gandhi, by then the dominant politician in the Congress Party. The UPA-led government aimed at differentiating its political approach from that of its predecessor. Only in the area of foreign policy was there to be substantial continuity: as a result, in the second half of 2004 and the early months of 2005, Indian foreign policy appeared to proceed unchanged along the path which Vajpayee had mapped out in 2003. In the same period, however, senior US policymakers were involved in an internal debate which began straight after India’s refusal to agree to Washington’s request to send an expeditionary force to Iraq. This led to an enhanced awareness of the crucial importance which India now enjoyed at global level (e.g. Tellis, 2005), and also to the decision to try and bring it within the sphere of US strategic influence. What made this objective difficult to achieve was the nuclear issue, and India’s refusal to sign the NPT and any other international treaty intended to prevent nuclear proliferation. The result was that the Bush administration, having at long last realized that no Indian government would abandon the nuclear policy pursued up to that point, decided to change its own nuclear policy. Thus far US policy had been geared towards thwarting India’s nuclear ambitions. From 2005 onwards, it encouraged it, albeit within certain limits, to pursue such ambitions. Such a change was fraught with difficulties. To begin with, US nuclear policy versus other countries was set by law. Hence, to change the nuclear approach with India would have to be accompanied by a series of domestic legislative changes. In addition, since 1974, the year of the first Indian atomic explosion, Washington had been at the forefront of a policy to isolate India over the nuclear issue at the international level. This had been a direct consequence of the fact that, until 1974, India had been able to pursue its own nuclear programme also because of the assistance provided by the US and other countries allied to it, particularly Canada. This assistance, however, had been provided in the belief that India’s nuclear programme was purely for peaceful purposes. Therefore, and not surprisingly, the revelation, following India’s first nuclear experiment in 1974, that the Indian nuclear programme also served to construct devices for military purposes induced US President Richard Nixon to put India under a world-wide nuclear embargo. He did that by sponsoring the creation of a world association for countries with nuclear technology and/or supplies of radioactive material, the Nuclear Supplier Group (NSG), from which India was excluded (Burr, 2014). Now, some 40 years later, the US administration’s strategic objective to bring India within its own sphere of influence meant that a policy to end the NSG’s embargo on India would have to be adopted. This, however, was not easy to accomplish as the NSG had to take its decisions unanimously, and, among its members, some were opposed to admitting India into the organization.

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The US administration, in order to justify such a radical change in its existing nuclear policy towards India, had to find some kind of pretext to justify New Delhi’s acceptation as a legitimate nuclear power, without India making any substantial change to its nuclear policy. Here, with an imaginative leap that appears to have been the brainchild primarily of Ashley J. Tellis, an American citizen of Goan origin, US policymakers achieved this objective by asking India to split its nuclear industry into a military and a civilian sector. In this way, the Bush administration could claim that their new nuclear policy towards India would benefit only the civilian sector of India’s nuclear industry. This, in turn, would open the way to initiate the required domestic legislative process and convince the NSG to put an end to the nuclear embargo on India. This strategy would be presented to the US public opinion and the countries of the NSG as being intended to allow India to meet its own energy requirements. This would have the undoubted advantage, as far as the US and its allies were concerned, of releasing India from the need to import energy from so-called “rogue” states (notably Iran). The new US policy was unveiled in March 2005 by then US Secretary of State Condoleezza Rice, during her official visit to New Delhi, and launched a few months later, on 18 July, with the agreements signed in Washington by Indian Prime Minister Manmohan Singh and US President George W. Bush. It was under the terms of the 18 July 2005 agreement that India undertook to “disentangle” the civilian sector of its nuclear industry from the military sector (Government of India, 2005b). The former, representing approximately two-thirds of the industry, would be entitled to the same benefits afforded to the nuclear industries of those countries which were party to the NPT. The negotiation process—which officially began with the joint Declaration made on 18 July 2005—was finally concluded more than three years later with the signing of a bilateral agreement in Washington on 10 October 2008 (U.S. Department of State, 2008).

7 The Civil Nuclear Agreement: India’s Gains and Costs India’s Prime Minister Manmohan Singh fought hard for the nuclear agreement. As he himself made clear, he saw it as being the second decisive step on the path towards India’s modernization (the first having been the launch of the neoliberal reforms at the start of the 1990s). The agreement, according to Manmohan Singh and his supporters, would enable Indian energy production to increase fivefold over the course of a decade. Such estimates were met with the scepticism they deserved. In order for them to be realized, the number of nuclear power stations in existence (33) would have to be at least doubled within the space of ten years. This was clearly a technical impossibility. Another important point worth noting is that, in 2007, Indian nuclear energy produced only 2% of the electricity consumed in India (Carl et al., 2008), and, as stated by India’s Planning Commission itself in an official report published in

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August 2006, “even if a 20-fold increase takes place in India’s nuclear power capacity by 2031–32, the contribution of nuclear energy to India’s energy mix [will be], at best, expected to be 4.0–6.4%” (Government of India, 2006: XXII). This meant that, even if unrealistically optimistic estimates of the increase of Indian nuclear energy were accepted, any increase in nuclear-generated energy production would still fall short of the quantity required to ensure India’s independence in energy terms. Despite many doubts over its concrete advantages, the nuclear agreement was extremely popular among the majority of the Indian middle class. The reasons were two. The first was largely symbolic (but the political significance of symbolism ought never to be underestimated). In fact, the agreement was considered a form of acknowledgement of India’s status as a major power, the fast track that would enable it to be admitted to the inner circle of nations with influence, headed by the US (Agrawal, 2008). Such symbolic recognition was important for the Indian middle class, whose enthusiastic support for the US and all things American—in a major reversal of India’s world view during the Nehru era—was unmatched elsewhere in the world. There was also a second factor stoking the enthusiasm of the middle class. The agreement envisaged enhancing the existing nuclear reactors alongside the creation of new ones. Such expansion might not solve India’s energy problems, but it would ensure that vast quantities of financial resources were put into circulation, thus offering the prospect of enrichment to members of the Indian middle class.

8 The Civil Nuclear Agreement: US Military Gains The premise and a complementary part of the policy of “nuclear enticing” pursued by the George W. Bush administration, aimed at bringing India inside the US sphere of influence, had been the signing in 2005 of a US–India 10-year military cooperation agreement, the New Framework for the U.S.-India Defense Relationship (Manohar Parrikar Institute, 2005). The pact aimed at achieving three objectives. The first was encouraging India to purchase American weapons and weapon-systems—particularly the most sophisticated and, therefore, most expensive ones. The second was to promote the growing (operational) integration between the armed forces of the two countries. The third was to encourage India to cooperate with the US in peacekeeping operations around the world, but most particularly in the Indo-Pacific, by taking part in joint sea patrolling. Up to 2014, the year when the Modi government came to power, only some of the goals envisioned by the US through the 2005 military pact were reached. As detailed in the next section, the economic advantages accruing to the US from the 2005 New Framework for the US-India Defense Relationship were huge. On the contrary, the objective of convincing India to actively upholding the US order in Asia, by taking part in joint US–India sea patrolling, came to naught. More nuanced were the results concerning the promotion of the integration between the armed forces of the two countries.

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The integration between Indian and US armed forces aimed at by the US was predicated on the implementation of two different strategies. One was increasing joint US–India military exercises, the second was convincing New Delhi to adhere to three pacts: the Logistic Support Agreement (LSA), the Communication Interoperability and Security Memorandum Agreement (CISMOA), and the Basic Exchange and Cooperation Agreement for Geo-Spatial Cooperation (BECA). The LSA envisaged reciprocal logistical support, to be provided by each party by opening its bases and furnishing fuel and other kinds of logistics backing to the other’s fighter jets and naval warships, on barter or an equal value exchange basis; the CISMOA was aimed at enabling greater communications interoperability between the militaries of India and the US, by allowing India to procure transfer-specialized equipment for encrypted communications for US-origin military platforms; the third pact, BECA, would allow the sharing of geospatial intelligence, relevant for accurately hitting long distance targets. While the number of joint US–India military exercises grew spectacularly, the three pacts, in spite of their seeming advantages for India, were steadfastly opposed by India’s Defence Minister A. K. Antony. Antony forcefully argued that the USsponsored pacts would limit India’s full control of its own military, and give the US unfettered access to India’s military installations and sensitive data, including India’s encrypted systems (Rupasinghe, 2016; The Times of India, 2015a).

9 The Civil Nuclear Agreement: US Economic Gains In the years following the civil nuclear agreement, the US rapidly grew from naught to be the main arms supplier, value-wise, to India. In fact, the value of the weapons and weapon systems bought by India from the US grew to such an extent that, in 2013, New Delhi surpassed Saudi Arabia as the main buyer of American arms (Financial Times, 2014). Nonetheless, the other economic objective pursued by Washington—cornering the multi-million business of building nuclear reactors—escaped its grasp. This was the result of the passing of the Nuclear Liability Act by the Indian Parliament in 2010. Although much criticized by the opposition, as it capped the amount of liability per nuclear accident at Rs. 5 billion, the Indian Civil Nuclear Liability Act introduced “one of the most powerful and toughest nuclear liability regimes in the world second only to Austria that bans Nuclear Energy”. The Act, by allowing both the victims of a nuclear disaster and the operators themselves of the nuclear plant involved in a disaster to sue the suppliers “for tortuous and criminal liability”, effectively deterred the US nuclear companies from entering the Indian market (Tigadi, 2012). This created an opportunity for French and Russian operators, which, unlike US firms, in case of a nuclear accident could fall back on the economic help of their respective states.

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10 The Civil Nuclear Agreement: US Political Gains The political goals envisioned by Washington through its policy of “nuclear enticing” were two. The first, which had been clearly and openly articulated by Condoleezza Rice during her visit to New Delhi in 2015, was the attempt of creating a rift between India and Iran. The second objective—left unspoken because of its sensitive nature, but even more important than the first—was driving apart India and China. In the case of the India–Iran connection, the US policy was eminently successful, even if its success was conditioned and qualified by objective geopolitical factors that could not be modified by Washington. In fact, India’s foreign policy was largely conditioned by the need to import those energy supplies—oil, petroleum products and natural gas—which were indispensable to India’s rapidly growing economy. In this situation, because of technical difficulties, only sea imports from the Gulf countries, including Iran, are useful from an economic standpoint. At the beginning of the present century, the relative majority of India’s energy imports came from Saudi Arabia, closely followed by Iraq and Iran. In 2008–2009, India got 17% of its imports of crude oil from Iran and was Iran’s second-largest oil customer after China (Kutt, 2019: 101). This was a contribution too conspicuous to be simply cancelled and could not be substituted in the near future by simply augmenting the imports from friendly pro-US Arab countries. Accordingly, from 2005 onwards, India found itself engaged in a difficult balancing act, aimed at progressively satisfying Washington’s demand to isolate Iran without, however, breaking with that country in a final and traumatic way. Up to 2019, New Delhi was able to square the circle by pursuing two concurrent strategies. First, in order to meet US expectations, India implemented a gradual and slow diminution of its oil imports from Iran (Asia Times, 2011). And, second, at the same time, India put into action a very complex strategy within the International Atomic Energy Agency (IAEA), the autonomous international organization within the United Nations system, promoting the peaceful use of atomic energy. While voting in favour of US-supported motions against Iran in 2005, 2009 and 2011, calling on Tehran to stop its uranium enrichment activities, India both steadfastly opposed the imposition of sanctions on Iran and actively mediated between Tehran and the IAEA, encouraging the former to respond to clarifications requested by the latter. Up to the years of the Trump presidency, India’s Iran policy was highly successful. This is shown by the fact that, on 11 June 2012, US Secretary of State Hillary Rodham Clinton declared that India—along with a number of other nations—would be exempt from those financial sanctions adopted by the US Congress for countries having significant economic relations with Iran. Clinton justified her decision by pointing out that India (and the other nations in question) had all “significantly reduced their volume of crude oil purchases from Iran” (U.S. Department of State, 2012). On the other hand, only a few months previously, in December 2011, Akbar Ali Velayati, the foreign policy advisor to then Iranian President Mahmoud Ahmadinejad, had

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applauded India’s stand on Iran, expressed at the United Nations, as “positive” and “friendly” (The Hindu, 2011). Also in the attempt to alienate New Delhi from Beijing, the US policy of nuclear enticing of India was eminently successful. The relations between India and China, as noted above, had appeared to be entering into a new phase of improvement following Vajpayee’s visit to Beijing in the summer of 2003. In April 2005, during Chinese Premier Wen Jiabao’s visit to New Delhi, a memorandum of understanding was signed, setting guidelines aimed at resolving some of the border disputes between the two countries (Government of India, 2005a). But in 2006 the atmosphere started to change, and on 13 November, Sun Yuxi, Chinese ambassador in India, in an interview granted to a private Indian television channel, claimed the entire Indian state of Arunachal Pradesh as an integral part of the People’s Republic of China (Torri, 2021). The statement marked a sharp and radical departure from the policy pursued by Beijing up to this point on the question of border disputes with India. This policy, so far as the eastern part of the border was concerned, had been based, before and after the 1962 war, on the tacit acknowledgement that the McMahon line, i.e. the highest crest of the Himalaya, was the border between the two countries. Arunachal Pradesh, however, lay squarely south of the highest crest of Himalaya. The fact that the statement announcing the change of the Chinese border policy was made by China’s ambassador in an interview with an Indian television broadcaster, and not by the Chinese state or party leaders through official channels, can be seen as an indication that Beijing was sending a warning to New Delhi rather than formally announcing a new policy. The warning clearly was aimed at putting India on its guard over moving within the US sphere of influence. Significantly, in 2006, immediately after Ambassador Sun’s statement, President Hu Jintao’s official visit to India started off cordially, with priority being given to promoting economic relations between the two countries, which were developing rapidly at that stage. But India’s decision to continue on the route towards the nuclear agreement with the US led the Chinese authority to reiterate, with increasing clarity, the position expressed by Ambassador Sun Yuxi in 2006. Arunachal Pradesh was openly claimed as an integral part of China in June 2007 by Chinese Foreign Minister Yang Jiechi, in the course of a meeting with his Indian counterpart. Yang, breaching the guidelines contained in the framework agreement signed in April 2005, stated that the mere presence of populated areas (populated, that is, by non-Chinese inhabitants) in Arunachal Pradesh in no way invalidated the rights over this region that China had inherited from Tibet. Beijing’s new policy was unquestionably designed to pressurise India into distancing itself from the US. It was highly doubtful that this new policy would achieve its objective, and indeed it did not. What is beyond doubt, however, is that the US had been successful in its attempt to reverse the process of rapprochement, in progress up to that point, between China and India.

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11 The Cooling Down in the India–US Relationship (2009–2014) 2009, the year that saw the beginning of Barack Obama’s presidentship in the US, saw also the return to power of the Manmohan Singh-headed UPA government in India, following the general election of that year. After the successful completion of the India–US civil nuclear deal, it would have been legitimate to expect a blossoming of bilateral India-US relations. However, although the US connection remained the mainstay of India’s foreign policy and friendship with India one of the characterizing features of US policy in Asia, a growing feeling of uneasiness gradually crept into the New Delhi-Washington connection. This deterioration, which remained concealed up to the Devyani Khobragade incident (for further details see below), appears to have had two main causes. The first was the already noted increasing dissatisfaction in Washington with not reaping all the economic rewards expected from the civil nuclear deal. The fact that the difficult political and diplomatic démarche making possible the nuclear deal with India had had the unexpected result of opening up the valuable Indian market for nuclear reactors to France and Russia, while it remained de facto closed to US firms, could not but rile American decision-makers. The second cause was that, during the second UPA government (2009–2014), US entrepreneurs became increasingly dissatisfied with what they saw as the slow pace of neoliberal economic reforms in India, which resulted in continuing to keep valuable parts of the Indian economy outside the reach of foreign (mainly the US) capital. It was a dissatisfaction which was openly articulated by US President Barack Obama in an interview with PTI, the largest news agency in India, on 15 July 2012. The US President, although avoiding a confrontational style and articulating his less than flattering judgement of India’s economic policy in a highly diplomatic language, was outspoken in his criticism. Highlighting the concerns of the US business community, which he called “one of the great champions of the US–India partnership”, Obama condemned the fact that India continued to prohibit foreign investment “in too many sectors”, citing in particular the retail sector. “They [the US businessmen] —pointed out the US President—tell us it is still too hard to invest in India. In too many sectors, such as retail, India limits or prohibits the foreign investment that is necessary to create jobs in both our countries, and which is necessary for India to continue to grow”. While Obama wisely refrained from prescribing any solutions for India’s economic problems, he significantly added that “as India makes the difficult reforms that are necessary, it will continue to have a partner in the United States” (e.g., India Today, 2012). In fact, not long after Obama’s PTI interview, and contrarily to the estimates of many well-regarded US analysts, the Manmohan Singh government launched a new wave of “big bang” neoliberal reforms, which were aimed at facilitating the entering of the foreign capital in the Indian economy, including the retail sector. However, the reforms, announced on 13 and 14 September and 5 October 2012, triggered strong opposition both at the popular and parliamentary levels. In parliament, not only the

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official opposition but, more crucially, also the Trinamool Congress, namely one of the main parties supporting the UPA government, were against them. As a result, the implementation of the new “big bang” neoliberal reforms was only partial and not such to dispel the US business community’s misgivings. The feeling of uneasiness which had been creeping into the US–India relation became evident with a bang with the Devyani Khobragade incident. In December 2013, Devyani Khobragade, then India’s Deputy Consul General in New York, being suspected of visa fraud and false statements related to her domestic help, a woman of Indian nationality, was arrested by the New York police. According to her own account, she was subjected to “the indignities of repeated handcuffing, stripping, and cavity searches, swabbing,’ being afterwards held ‘with common criminals and drug addicts”. While released after a few hours, Ms. Khobragade was later indicted and eventually forced to leave the US. As it became known later, the action against her had been green-lighted by the US Department of State (Daugirdas & Mortenson, 2014; Satish, 2013). Khobragade’s treatment on the part of the New York police, which ran contrary to generally accepted diplomatic propriety, and the subsequent judicial case brought against her, caused the indignation of India’s public opinion. The American diplomatic personnel in New Delhi were subjected to a series of restrictive measures and, finally, in an absolutely unprecedented move, a New Delhi-based American diplomat was expelled.

12 Narendra Modi’s US Policy During the Obama Presidency: The Economic Dimension The 2014 general election in India brought to power a new government dominated by the BJP and headed by Narendra Modi. For quite some time, Narendra Modi, formerly the chief minister (head of government) of the Indian state of Gujarat, had been kept at arm’s length by the Western countries because of his controversial role during the anti-Muslim pogrom that bloodied Gujarat in 2002. As far as Modi’s political fortunes were concerned, nonetheless, the controversies surrounding his role during the 2002 pogrom slowed his rise inside his own party and on the national stage only temporarily. Eventually, in the early 2010s, Modi gradually emerged as the most influential BJP politician in India. During 2013, he elbowed out all other competitors within his party and became the campaign leader of the rightist, BJP-dominated New Democratic Alliance (NDA) in the 2014 general election. The election resulted in the NDA’s smashing victory, but most particularly that of the BJP, which, by itself, won the absolute majority of the Lok Sabha seats. As the undisputed architect of this victory, Narendra Modi ascended to the prime ministership surrounded by an aura of invincibility and welcomed by the expectation of large swathes of the Indian people that he, being an exceptional leader, would achieve exceptional results.

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During the electoral campaign, Narendra Modi had presented himself as the “development man”, who would get the Indian economy to flourish, exactly as he had made the economy of Gujarat flourish, through a massive injection of neoliberal reforms. This attitude could not but positively impress the US business community. Hence it comes as no surprise that Obama—who, as noted above, had already acted as the spokesperson of US business interests—was one of the first world leaders to congratulate the newly elected Indian premier. This was followed by Obama’s invitation to Narendra Modi to visit the US. Modi, a politician who, only the year before, was unable to obtain a visa to enter the US, now went on a five-day-long official visit to that same country (26–30 September 2014). He received red-carpet treatment from the US authorities and a rousing reception from the bulk of the influential, 2.8 million strong Indian-American community (The Free Press Journal, 2014).6 Modi arrived in the US after signalling his decision to modify the Nuclear Liability Act in such a way to open, at long last, the much sought-after nuclear reactors business to US capital. Once in the US, the Indian Premier met the Chief Executive Officers (CEOs) of several leading US corporations. During these meetings, Modi argued that, under his own leadership, times were rapidly changing in India: “archaic” labour laws and bureaucratic impediments to the full deployment of international capital were now on the way out. Also the promise to modify the Nuclear Liability Act was reiterated. Modi returned to the US almost exactly one year later (24–30 September 2015) and, once again, met a substantial number of CEOs. It was immediately clear, however, that, compared to the year before, the attitude of the US business community towards Modi had undergone a distinctive change. While the US CEOs’ positive appraisal of Modi’s determination to carry out the desired neoliberal reforms was still there, their assessment of his ability to do that in the near future had become negative. US business leaders had started to realize that the Indian Premier did not appear capable to remove the “host of obstacles” on the path of full integration of the Indian economy into the US-centred neoliberal world economy. In fact, in between Modi’s two first visits to the States, the attempt—sponsored by US Secretary of State John Kerry—to arrive at a bilateral US–India investment treaty had de facto failed. On 21 September 2015, just on the eve of Modi’s second visit to the US, US Secretary of Commerce Penny Pritzker had pointed out that the World Bank ranked India 186th out of 189 countries on the ease of enforcing contracts. She also criticized the fact that years could be spent in resolving a contractual dispute in India and decried the fact that contractual terms were “reinterpreted”, after a deal was closed, “too frequently” (U.S. Department of Commerce, 2015). In the following years, US–India negotiations, aimed at smoothing bilateral economic ties, went on but without reaching any tangible results. The Bilateral Investment Treaty, much desired by US multinational companies, remained up in the air 6

This was only the first of Modi’s four official visits to the US during the Obama presidency. The second, third and fourth visits were made on 26–30 September 2015, 31 March–1 April 2016 and 6–8 June 2016, respectively.

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(Rossow, 2017), while the discussion on the realization of an agreement avoiding a double taxation of income with respect to social security taxes dragged on uselessly. Notwithstanding these difficulties, in the following years, there was a notinconspicuous rise in US direct investments in India and an increase in bilateral trade (Congressional Research Service, 2017). This tightening of the US–India economic connection, however, remained well below the initial rosy expectations of both the Indian Premier and the US business community.7 The Indian government under Modi implemented a set of economic reforms, aimed at green-lighting FDI inflow into several sectors. But these reforms were not up to the expectations of the US business community. Moreover, Modi’s most important economic reforms were badly thought-out and rashly executed. Far from opening the Indian economy to the international capital, they severely damaged it (Torri, 2017). Only in one case, Modi’s effort to open the Indian market to US capital appeared to meet the US business community’s expectations. US complaints about the obstacles standing in the way of selling nuclear reactors to India have already been mentioned above. In fact, two major US corporations—General Electric (GE) and Westinghouse—had been greedily eyeing India’s nuclear reactor market without daring to take the plunge. As above noted, Modi had signalled his decision to modify the Nuclear Liability Act already on the eve of his first US visit. Nonetheless, during Modi’s maiden US visit, as far as the nuclear problem was concerned nothing concrete happened. The matter came up again for discussion when Barack Obama visited India in January 2015, apparently once again without any concrete result being reached (The White House, 2015). In the following months, nonetheless, from the news which filtered to the press, it appeared that the Indian government was now willing to accept that all damages caused by faulty nuclear equipment or operation would be taken charge by the Indian side. Eventually, it became known that, on 12th June 2015, the Indian government had created an Indian Nuclear Insurance Pool (INIP), “with a capacity of 1500 crore Rupee [15 billion], to provide insurance to cover the liability as prescribed under Civil Liability for Nuclear Damage (CLND) Act, 2010” (Business Standard, 2016; Government of India, 2019a). This meant that the Indian government had assumed the burden of paying the full statutory amount for any damage caused by the malfunctioning of nuclear reactors, shifting the onus to pay for the possible damages caused by the US suppliers from them to the Indian tax payer. This development appeared to have at long last opened the door for the US nuclear industry to enter the Indian market. Proof of this was the announcement, in the joint US–India official communique, of the “start of preparatory work on site in India for six AP 1000 reactors to be built by Westinghouse” in the southern Indian state of Andhra Pradesh. Still, according to the joint communique, “Once completed, the project would be among the largest of its kind” (The White House, 2016). 7

In fact, in some cases, US entrepreneurs did cut their connections with India. The case of commodities trading guru Jim Rogers of Rogers Holding, who exited from the Indian market to invest in Chinese shares, is emblematic. See ‘Investor Jim Rogers takes too hard a view on India’, Asia Times, 3 September 2015.

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13 Narendra Modi’s US Policy During the Obama Presidency: The Military Dimension Soon after the coming to power of the Modi government, Washington renewed its pressure on New Delhi aimed at convincing the latter to more closely align to the US anti-China military strategy. The first step in this direction was the renewal of the 2005 10-year US–India defence framework, which was signed in New Delhi at the beginning of June 2015 (Ratnayke, 2015). Although more ambitious than its predecessor in terms of the envisioned volume of weapon trade and frequency of joint military exercises (Sharma, 2015), nevertheless the new pact, by itself, was far from satisfying Washington’s expectations. As in the UPA years, Washington’s priority was inducing India to ink the LSA, CISMOA and BECA pacts. Significantly, US negotiators started to describe these pacts as «foundational» in the development of the military ties between India and the US (The Times of India, 2015b). Following US pressure, a new and more intense phase in the negotiations concerning the LSA started at the end of 2015. On 12 April of the following year, the news became public that India and the US had agreed «in principle» to a somewhat modified version of the LSA, which now took the name Logistic Exchange Memorandum of Agreement (LEMOA) (e.g., Firstpost, 2016; The Indian Express, 2016). The actual signing of LEMOA was delayed for some months, which can suggest some persisting hesitation on the part of the Indian government. Eventually, on 29 August 2016, Indian Defence Minister Manohar Parrikar and US Defense Secretary Ashton Carter at long last announced the signing of the pact (U.S. Department of Defense, 2016). A few months earlier, the joint US–India communique made public on 7 June 2016, during Narendra Modi’s fourth trip to the States, while welcoming “the finalization of the text of the Logistics Exchange Memorandum of Agreement (LEMOA)”, also announced that the US recognized India as “a Major Defense Partner” (The White House, 7 June 2016). Initially left unspecified, what exactly this new status implied for India became somewhat clearer some months later. The US Congress, then discussing the US National Defense Authorization Bill 2017, namely the US Defence budget for the year 2017, inserted an «India Amendment» into the bill. It mandated the Secretary of Defense and Secretary of State to jointly act to “recognize India’s status as a major defense partner of the United States”, and to “designate an individual within the executive branch”, who would “help to resolve remaining issues impeding US–India defense trade, security cooperation, and co-production and co-development opportunities”. More generally, the two US Secretaries were directed to act in such a way as to “facilitate the transfer [to India] of advanced technology” and “enhance defense and security cooperation with India in order to advance United States interests in the South Asia and greater Indo-Asia–Pacific regions” (House of Representatives, 2016, emphasis added).

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When the US National Defense Authorization Bill 2017 was passed on 8 December 2016, the “Indian Amendment” became operative. Although short on specifics, it highlighted the bipartisan Congressional consensus on the fact that India was seen as a precious instrument in propping up US military hegemony in the Asia–Pacific.

14 The India–US Relation During the Trump Presidency: The Problem with Trade In the US, the new president, Donald Trump, took office on 20 January 2017. Coherently with his “America first” approach, grounded in the idea that the US was “a victim of unfair trade, unremitting immigration and unrelenting demands from allies”, he ordered a review of US trade policies towards 16 countries. The review aimed at identifying “every form of trade abuse and every non-reciprocal practice that now contributes to the US trade deficit” (Sirohi, 2017). India was among the 16 countries put under the lens. Nevertheless, Modi’s first visit to the US since the beginning of Trump’s presidentship (25–26 June 2017) went off apparently very positively. The Indian Premier received a reception marked by great ceremony, as during his maiden US visit, followed by what was described as a very cordial interaction with his American host. During it, maximum emphasis was given to the “strategic convergence” between the two countries: India espoused Donald Trump’s stand on North Korea and accepted to work with the US both in Afghanistan and the Indo-Pacific region. Conversely, the US espoused India’s position on Pakistan and criticized it for allegedly giving cover to terrorist groups operating against India. Contentious issues were conveniently forgotten. Nevertheless, Trump, while praising Modi for his pro-big business policies, made clear that he expected the Indian government to do much more to open India’s economy to US investment and exports (e.g., Jayasekera, 2017). That Trump meant business as far as his America-first, neo-protectionist policy was concerned became unpleasantly clear to New Delhi following Washington’s decision, in March 2018, to impose heavy import tariffs on steel (25%) and aluminium (10%). The measure—justified as necessary to guarantee US security, by protecting the domestic production of strategic items required for “unique national defense purposes”—was not specifically aimed at India but affected also a number of other countries, such as China, the EU, Mexico, Russia and Canada. India’s reaction was to request an exemption from the aluminium and steel tariffs on the grounds that India’s exports of those items were indeed limited and, as a consequence, could not damage US strategic security. Also, New Delhi was counting on the “strategic partnership” between India and the US, as a lever to obtain better conditions than those allowed to other countries. Washington’s answer to New Delhi’s request, however, was not positive. Also, in June 2018 Trump increased bilateral tensions by specifically quoting India as one of the countries guilty of dishonest

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trade practices, accusing it of imposing 100% tariffs on certain US goods (Financial Times, 2018). Like other countries which had been targeted by US neo-protectionism, India reacted by following two counterstrategies: one was denouncing the US tariffs on steel and aluminium as protectionist before the World Trade Organisation (WTO); the other was notifying its intention to hike the tariffs on a series of US products. However, unlike other countries, India held the fire of its anti-US guns: its decision to impose retaliatory tariffs, announced in June and supposed to become effective on 4 August, continued to be rolled onward for the remainder of the year and beyond.8 New Delhi, after the initial disappointment, fell back on renewed negotiations with Washington. By April 2018, however, it became clear that the steel and aluminium tariffs were not the only problem on the table. On 12 April 2018, the Office of the US Trade Representative (USTR) announced that it was reviewing the eligibility of India (together with Indonesia and Kazakhstan) to be included in the Generalized System of Preferences (GSP). This was a preferential system of trade allowing concessional or zero-tariff imports from developing countries for a predefined set of products (Jose, 2018; Rajagopal, 2018). Two days later it became known that the US Treasury had added India to its «watch list» of countries with questionable foreign exchange policies (Outlook Web Bureau, 2018). The whole verification process had been originated by repeated complaints of US exporters, decrying their lack of access to the Indian market. The process reached its conclusion in March 2019, with the decision to remove India from the GSP programme, which went into effect on 5 June 2019. Not only this decision raised the amount of taxes to be paid by Indian companies exporting to the US but it also nullified the exemption from the 2018 tariffs on solar panels and washing machines so far enjoyed by Indian producers (Bown, 2019). Not surprisingly, at that point, India finally retaliated in kind. On 16 June 2019, the anti-US tariffs hitherto kept on hold became effective, hitting 5.5% of US exports to India. To all effects, what had begun was, to borrow Chad P. Bown’s definition, a “minitrade war” between the US and India. Although undoubtedly a “trade war”, it was “mini” because the amount of trade wealth involved was limited when compared to that involved in the simultaneous US–China trade war. It was “mini” also because, if one goes beyond Trump’s “fire and fury” declarations against India’s trade policy, it is clear that not only New Delhi, but also Washington was unwilling to go for an all-out, no-holds-barred, full-scale trade war. Significantly, in the Trump years—just like in the Obama years—bilateral US–India trade, although much limited when compared to the potentialities of the two countries involved, grew steadily (Congressional Research Service, 2017). As significantly, negotiations between the two countries,

8

The 4 August deadline was extended until 18 September, then 2 November, then 17 December, then 31 January 2019. ‘India again defers duty hike on US products till January 31’, Business Line, 18 December 2018.

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aimed in particular at the realization of the long-searched (in particular by Washington) bilateral trade agreement, appeared to be in progress. At the beginning of 2020, on the eve of Trump’s first passage to India (24–25 February), many expected a trade deal to be signed during the visit. This, however, did not happen.

15 The India–US Relation During the Trump Presidency: The Nuclear Reactors Question To make matters worse, Modi’s policy aimed to facilitate the entrance of US business in the valuable field of nuclear reactor building came to naught. Here things had reached such a promising point that, in the concluding phase of the Obama presidentship and in the first months of that of his successor, efforts were underway to mobilize the massive amount of capital necessary to back the whole enterprise. Then disaster struck: on 29 March 2017 Westinghouse filed for bankruptcy, with US$9.8 billion in liabilities. Washington immediately stepped in to reassure New Delhi that the building of the six nuclear reactors would still be carried out according to the original deadlines. Even if the promise to keep by the original deadlines was wildly overoptimistic, it is a fact that Westinghouse emerged unscathed from the bankruptcy process in August 2018. In March 2019, following talks between members of the US and Indian governments, a joint statement signalled that the original deal was on track once again. Also, in 2018, the other US giant nuclear corporation, General Electric, joined hands with the French state-owned company EDF (Électricité de France) to build six reactors for the Jaitapur nuclear power plants in Maharashtra, envisioned as the largest nuclear power plant in the world. The Westinghouse bankruptcy, the continuous delays of the major international companies when building nuclear reactors (not only in India but all over the world), and the consequent skyrocketing of their already extremely high costs eventually induced Indian decision-makers to reassess their nuclear policy. At the beginning of 2018, following a parliamentary interrogation, it became official that the Indian government had decided to cut India’s nuclear development programme by twothirds. The joint EDF-GE project in Maharashtra, although not cancelled, was reduced from six to two nuclear reactors. More doubtful appeared to be the Westinghouse’s project of building six nuclear reactors in Andhra Pradesh. At first, it appeared to be one of the victims of the new policy (Srivastava, 2018; Yurman, 2018). As already noted above, however, on 13 March 2019 a joint India–US statement indicated that the original deal was still on track (Reuters, 2019). However, at the beginning of 2020, the project was still blocked by differences between India and the US, whose solution was nowhere to be seen (The Economic Times, 2020). Still a year later, India’s Atomic Energy Minister Jitendra Singh, in a written reply in response to a query from a member of the Lower House, stated that the cost estimates

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and timelines for the construction of the Westinghouse Andhra Pradesh reactors were “yet to be worked out” (Nuclear Asia, 2021).

16 Substituting the Strategic Embrace to the Economic Connection as the Pillar of the US–India Relation The (limited) trade war between India and the US was such to invite a casual observer to think that the bilateral US–India relationship had entered a negative trend. Surprisingly enough, this was not the case: the troubles caused by the unsatisfactory development of the economic connection were more than compensated by the tightening strategic embrace between Washington and New Delhi. It is worth stressing that, as in the case of the “mini trade war”, the initiative in the strategic embrace appears to have unambiguously been taken by the Trump administration. On 15 August 2017—a few months after Modi’s first visit to Trump’s US— the White House announced that, during an Indian Independence Day (26 January) telephone conversation between Trump and Modi, the two leaders had agreed to enhance US–India military security cooperation “across the Indo-Pacific region”. The first step in this direction was to “elevate their strategic consultations” by establishing a “2+2” ministerial dialogue involving the respective foreign a defence ministers (as was already the case in the bilateral US–Japan and US–Australia strategic relations) (Jayasekera & Jones, 2017). The inaugural session of the 2+2 US–India dialogue, initially scheduled to be held in May 2018 in Washington was however, delayed. The US, before finally agreeing to it, wanted India’s assurance that New Delhi would finally sign at least the second of the “foundational” agreements aimed at fleshing out the US–India military entente.9 The Trump administration also wanted the Modi government’s commitment to conspicuously reduce India’s imports of Iranian oil and gas (Cherian, 2018). Eventually, the requested assurances were given and the first 2+2 meeting was scheduled in New Delhi on 6 September 2018. The first 2+2 Defence Dialogue meeting was preceded, on 3 August 2018, by a US federal notification granting Strategic Trade Authorization-1 (STA-1) status to India. STA-1 paved the way to US sales to India of high-technology products, particularly in the defence and civil space sectors, “by allowing US companies to export a greater range of dual-use and high technology items to India under streamlined processes” (The Indian Express, 2019). It is worth stressing that, before India, only two other Asian countries, namely Japan and South Korea, both close US allies, had been granted STA-1 status. Even more relevant was that no other country which, like India, was not part of the Nuclear Supplier group (NSG) had ever obtained that status (e.g., The Indian Express, 2018).

9

As noted above, the first, LEMOA, had been signed on 29 August 2016.

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During the ensuing 2+2 Dialogue meeting—which took place on 6 September 2018 in New Delhi—the second “foundational” pact, COMCASA (Communications Compatibility and Security Agreement, namely an India-specific version of CISMOA), was finally signed, successfully ending some ten years of negotiations. The pact, besides strengthening the US–India military connection was expected to result in a major increase in India’s purchases of US weapons and weapon systems (Jones, 2018). According to most commentators, the signing of COMCASA confirmed that in spite of the evident tensions between India and the US as a result of Trump’s mini trade war, the alliance with America continued to be the foundation of India’s foreign policy. This was an evaluation that could not but be strengthened by the announcements included in the statement that closed the New Delhi 2+2 Dialogue. The strategic importance of India’s designation as a major defence partner of the US was reaffirmed; a new joint US–India tri-services military exercise was announced as a manifestation of the «rapidly growing military-to-military ties» between the two countries; finally, the usual anti-China code expressions in favour of «freedom of navigation and overflight» were repeated (U.S. Department of State, 2018). The first 2+2 US–India foreign and defence ministers meeting was followed by a second one, held in Washington on 18 December 2019. This second round was immediately preceded and accompanied by the signing of a set of agreements which were proof of the continuing expansion and deepening of the security and defence cooperation between the two countries (Government of India, 2019b). Finally, on 27 October 2020, in concomitance with the third 2+2 security dialogue, the last Foundational Agreement, namely the Indo-US Basic Exchange and Cooperation Agreement for geo-spatial co-ordination, or BECA, was signed (Raghuvanshi, 2020). It allowed the militaries of the two countries to access an extensive assortment of geospatial data from each other. In particular, India, being able to access to the US’ «highly accurate navigation satellite networks», would acquire the capability «to strike targets thousands of kilometres away with great accuracy» (Venkataramakrishnan, 2020. See, also: Som & Nair, 2020). Once one takes into account the progresses already made during the first two 2+2 Dialogue meetings, it comes as no surprise that a well-known Indian former ambassador and analyst, while commenting the second 2+2 Dialogue meeting, argued that the two countries were “tiptoeing towards a veritable alliance in the Indo-Pacific region” (Bhadrakumar, 2019). That defence cooperation remained at the core of the US–India connection when everything else stalled, as witnessed by Trump’s maiden visit to India. During an event that, according to most commentators, was less about substance than optics, no substantial agreement was reached and the many areas of contention between the US and India continued to go unresolved. There was, however, an exception (although little noted by the media). This was the signing, “repeatedly touted” by President Trump, of a “US$3 billion deal for the AH-64E Apache helicopters and MH-60 Romeo Seahawk helicopters” (Parpiani, 2020).

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17 Conclusion Summing up, during Trump’s presidentship (20 January 2017–20 January 2021) a trend reached its apex, which had been ongoing even under his predecessor, if not before. The US increased its pressure on India, aimed at forcing it to mould its economy according to US desiderata. This pressure was counterbalanced and made acceptable by the US’s massive and snowballing transfer of weapons, weapon systems and top-notch military technology to India. Whereas the Manmohan Singhheaded Indian governments had bent under US’s pressure only gradually, never completely and always reluctantly, the Modi government caved in under Trump’s aggressively promoted “America First” policy without any substantial resistance. Hence New Delhi’s pursuit of foreign relations—both with the US and the remainder of the world—aimed at helping India’s economic development was put onto the back burner. Conversely, massive rearmament and the progressive integration of India’s and US’s militaries, including the consequent subordination of the former to the latter, became the dominant leitmotif of New Delhi’s foreign policy. This notinconsequential shift of emphasis in India’s foreign policy was squarely justified by the Modi government by highlighting the overwhelming necessity to confront a growingly aggressive China. As shown above, the anti-China trend of India’s foreign policy, which culminated under Modi, was the final—but far from necessary—outcome of the policy of “nuclear enticing” of India devised and launched by the US under George W. Bush. In fact, beginning with the late 1980s and up to the launching of the US policy of “nuclear enticing”, the Indian governments—it does not matter their political bent, and in spite of some false moves—had pursued a policy of détente with China. This had been reciprocated by Beijing and had resulted both in the enhancement of the bilateral economic relation and the improvement of the situation along the common and undefined border. Things, however, started to change quite rapidly once Beijing became convinced—in or around 2006—that New Delhi had decided to accept to be integrated with the US-sponsored anti-China arc of containment. In turn, China reaction triggered a vicious circle: Beijing, feeling threatened by New Delhi, put pressure on the latter; this resulted in New Delhi feeling threatened by Beijing, which, in turn, made a closer and ever more militarized connection with Washington increasingly important; this could not but result in enhancing the level of alarm in Beijing, causing, as a reaction, a progressively more aggressive anti-Indian strategy. And so on… This trend could have been broken, and there is no doubt that China’s rulers hoped that Modi’s rise to power could lead to an analogous situation to the one which had come into being between China and the US at the time of Nixon. Modi—like Nixon, a conservative politician—was a self-declared Hindu nationalist, but, as chief minister of Gujarat, he had significantly strengthened the economic connection between his state and China, which he had visited, being received with full honours. Hence China’s hope that Modi, as India’s premier, could play in the India–China relations a role analogous to the one played by Richard Nixon in the US–China relations. Unfortunately for China, however, the basic leitmotif of Modi’s foreign policy has

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been, since his first days as India’s premier, the promotion of India’s position as a major world power and, in particular, as a dominant power in Asia, on a par with China (Torri, 2021). In the pursuit of this objective—made unrealistic by the huge difference in economic weight between the two countries—Modi has gradually deemphasized any other goal of India’s foreign policy. Hence, for example, the caving in of the Indian government in front of the US Iran-related pressure. Hence the gradual loss of India’s ability to act independently of the wishes of the USA. In the final reckoning, the Faustian pact with the US has been leading India to a gradual but steady loss of its strategic autonomy. Ironically, this process, ongoing since 2005, reached its fulfilment during the prime ministership of Narendra Modi, namely a politician who loves to present himself—and is presented by his many spin doctors—as the strongest and most decisive Indian leader ever.

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Rajagopal, D. (2018, April 13). USTR formally launches GSP eligibility review of India. The Economic Times. Ratnayke, K. (2015, June 5). US defence secretary boosts military ties with India. World Socialist Web Site. https://www.wsws.org Reuters. (2019, March 15). U.S. and India commit to building six nuclear power plants. Rossow, R. M. (2017, November 28). U.S.-India Insight: Do not give up on the bilateral investment treaty. CSIS—Center for Strategic & International Studies. Rupasinghe, W. (2016, January 16). India in talks to open ports, bases to US military. World Socialist Web Site. https://www.wsws.org Satish, D. P. (2013, December 17). Devyani Khobragade incident: Both sides of the story. News18 India. https://www.news18.com/ Sharma, A. (2015, June 17). What’s behind the new US-India defense pact? The Conversation. Sharma, A. (2017). Indian lobbying and its influence in US decision making: Post-Cold War. Sage. Sharma, K. (1998). The Hindu bomb. Bulletin of the Atomic Scientists, 54(4), 30–33. Sharma, S. R. (2003). India-USSR relations: 1972–91, a brief survey. Discovery Publishing House. Sirohi, S. (2017, June 21). On the eve of his US visit, American Private Sector Sees Modi’s record as a ‘mixed bag’. The Wire. Som, V., & Nair, A. (2020, October 27). What BECA, key defence agreement, means for India, US: 10-point guide. NDTV. Srivastava, P. (2018, April 5). Modi government cuts nuclear power capacity addition target to one-third. Financial Express. The Economic Times. (2020, February 27). NPCIL-Westinghouse deal: Still many differences to resolve. The Free Press Journal. (2014, October 1). Narendra Modi: The million dollar US visit. The Hindu. (2011, December 25). No hitch in India-Iran pipeline project. The Indian Express. (2016, April 13). India will be seen as part of US military bloc: Congress on logistics agreement. The Indian Express. (2018, August 4). India third Asian nation to get STA-1 status from US. The Indian Express. (2019, October 19). Explained: What is US-India defence technology and trade initiative. The New York Times. (1998, May 13). Nuclear anxiety; Indian’s letter to Clinton on the nuclear testing. The Times of India. (2015a, January 24). Ahead of Barack Obama visit, US and India revive talks on controversial military pacts. The Times of India. (2015b, February 27). US pushes India to ink contentious defence pacts. The White House. (2015, January 25). Office of the Press Secretary, U.S.-India Joint Statement: —“Shared effort; progress for all”. https://obamawhitehouse. archives.gov/the-press-office/2015/01/25/us-india-joint-statement-shared-effort-progress-all The White House. (2016, June 7). Office of the Press Secretary. Joint Statement: The United States and India: Enduring global partners in the 21st century. Tigadi, R. (2012, May 16). Critical analysis of the Indian Civil Nuclear Liability Act, 2010. Social Science Research Network. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2254490 Tellis, A. J. (2005). India as a new global power. Carnegie Endowment for International Peace. Torri, M. (2017). India 2017: Still no achhe din (good days) in the offing for the economy. Asia Maior, XXVIII, 291–308. Torri, M. (2021). The road to Galwan Valley: An alternative view of India’s relations with China and the US since 2005. Rivista di Studi Politici Internazionali, 89, 351, luglio-settembre. U.S. Department of Commerce. (2015, September 21). U.S. Secretary of Commerce Penny Pritzker Addresses U.S.-India Commercial and Economic Relationship at Carnegie Endowment for International Peace.

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Framing India–Japan Ties for a Progressive Indo-Pacific Jagannath Panda

Abstract Emerging as two of the most crucial partners within the Indo-Pacific region, India and Japan are steadily finding ground for collaboration over converging strategic interests. Since 2015 under Shinzo Abe and Narendra Modi’s leadership, India–Japan relations have become increasingly action-driven, yet leaving plenty of room for collaboration in the defense and economic spheres. As Japan’s newly elected and 100th Prime Minister Fumio Kishida prepares to hold the 2022 Quad Leaders’ Summit, it is worth evaluating the trajectory and scope of India–Japan ties, especially against the backdrop of a progressing Indo-Pacific. This chapter argues that the developing collaboration between India and Japan is drawing the two nations closer together, transforming ties from a simple political relationship to a profoundly active one. With India and Japan celebrating their 70th anniversary of diplomatic ties in 2022, the ‘Special Strategic and Global Partnership’ between the two countries indicates that it has stood the test of time, promising to be a crucial carrier of their shared values of peace, prosperity, democracy, pluralism, open society, rule of law, human rights, free trade and a rules-based maritime order. This chapter analyzes the bilateral synergy between the two and what future role it must take on to contribute to a progressive Indo-Pacific region. Third-country cooperation, multilateralism and common security threats from an assertive and increasingly aggressive China are important elements shaping India–Japan cooperation. In particular, the growing threat of Chinese influence in the spheres of security and economics of the region draws the two countries closer together, as they seek to gain footing on various joint initiatives countering Chinese influence in the region. Concurrently, the two emerge as strong contenders as partners in the region for EU countries, furthering India–Japan engagement with the EU. India–Japan involvement in various regional groupings, naval exercises, as well as Quad initiatives strengthens their partnership and furthermore, could provide much needed stability in a rapidly changing regional theater.

J. Panda (B) Institute for Security and Development Policy (ISDP), Stockholm, Sweden e-mail: [email protected] © Springer Nature Switzerland AG 2023 S. Beretta et al. (eds.), India’s Foreign Policy and Economic Challenges, Global Power Shift, https://doi.org/10.1007/978-3-031-20270-4_11

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1 Introduction The ideal time to consider the structure of the Indo-Pacific is yesterday. The IndoPacific region has benefited from growing interest over the last decade, as a geographical and strategic construct in the foreign policy discourse of not just the United States, but also of its allies such as Japan, India and some Southeast Asian nations. However, there has been an absence of pioneers and leading nations to shoulder the responsibility of a unified Indo-Pacific. The analysis also shows that though there is no uniform Indo-Pacific concept to date, this geopolitical nomenclature has found its way into official documents like national security strategies, white papers published by defense ministries and in academic institutions as well. By virtue of being key Asian powers, Japan and India have returned to the global stage over the past two decades. Their bilateral equation has developed from being organic and historically dispute-free to one that focuses on building a stable, democratic and rules-based order for the Indo-Pacific region. One can witness a strong two-way flow of high-ranking officials such as defense personnel and political leaders. The most significant have been the Prime Ministerial visits with the aim of strengthening bilateral ties through joint statements and demonstrating symbolism, both for domestic and international audiences. With the COVID-19 pandemic leading to repercussions for the global economy, the time is opportune for both India and Japan to identify each other in their national recovery strategies and in further strengthening bilateral engagement, economic and otherwise. The two nations are close partners in facilitating greater integration in regional and global supply chains in the Indo-Pacific region, with their bilateral relationship being the most prudent option for recharging existing foundations and formulating new mechanisms that build the future of the region. During the post-Cold War period, the boundaries of India’s international strategy went through significant changes as the nation made progress toward attaining a bigger regional and international role for itself. One can contend that New Delhi has shown a remarkable capacity in establishing bold initiatives and leading others; from the Non-Aligned Movement (NAM) to present day ventures like the International Solar Alliance (ISA), by mobilizing not just smaller states but also major powers in tandem with India’s goals. India’s mission for a permanent seat on the U.N. Security Council, rapprochement with China and Pakistan, and ambitions of developing and deploying a ‘blue water’ naval force are general markers of significant changes in India’s international strategy. Simultaneously, India’s low-intensity ties with Japan have additionally gone through a momentous turnaround in the turn of the century, acquiring dimensions zeroed in on common security, economic and national interests. Japan’s changing view of India’s developing profile at the regional and global levels has been notably apparent since Japanese Prime Minister Mori Yoshiro visited India in August 2000. With factors both external and internal explain Tokyo’s change in stance from the late 1990s, post-India’s 1998 nuclear testing. The first such visit in over 10 years, it was a defining moment in India–Japan relations. Mori at the time laid the ground for Tokyo’s acceptance of India as a significant regional partner for the twenty-first century by proclaiming that Japan and India are global partners

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(Ministry of Foreign Affairs, 2020a). It also marked the first time that Japan used the term ‘global partnership’ in reference to a country other than the United States. Joint statements between India and Japan since Mori’s visit have highlighted the developing interests of the two sides share in building a comprehensive relationship (Ministry of Foreign Affairs, 2021). For instance, after former Indian Prime Minister Manmohan Singh’s state visit to Japan, the December 2006 joint statement focused on elevating the relationship to a ‘global and strategic partnership’ (Ministry of External Affairs, 2006) to impart stronger political, economic and strategic dimensions to the relationship shared by both nations, contributing to regional peace and stability. The visit also helped solidify the implementation of their common goals such as promoting peace and stability in Asia and beyond, recognizing Asia as the emerging leader of growth and promoting technological cooperation in harnessing the potential of their bilateral relations. In 2014, after Prime Minister Narendra Modi’s visit to Japan, ties were further elevated to a ‘Special Strategic and Global Partnership’ (Ministry of External Affairs, 2014). In 2015, after former Japanese Prime Minister Shinzo Abe’s visit to India, the two countries resolved to transform their partnership into a comprehensive, extensive and action-driven venture that will stand true to long-term political, economic and strategic goals. A joint statement titled ‘Japan and India Vision 2025 Special Strategic and Global Partnership Working Together for Peace and Prosperity of the Indo-Pacific Region and the World–a guide serving the “new era” in India-Japan ties’ was released (Ministry of External Affairs, 2015). The same has shaped the growth of the combined efforts of India and Japan to build a free, open and rules-based Indo-Pacific. While a political relationship revolves around reinforcing the political narrative between two partner nations, a ‘strategic partnership’ adds an alternate dimension to reciprocal relations (Ghosh, 2008). It was only in the mid-1990s when significant political commitments were forged between both nations. The period before the mid-1990s was tumultuous, particularly during the Cold War period, when Japan was a US ally and India had concocted a neutral technique to stay away from entanglement in bipolar US-USSR Cold War contention. The importance of this new dimension between India and Japan was clarified by then Japanese Foreign Minister Ikeda Yukihiko during his visit to India in 1997, when he stated that a ‘strategic partnership’ ought not to be interpreted just as a defense relationship but also would likewise mean working with a common political and economic reaction to maintain stability in the region. India–Japan relations have significantly progressed since. Common goals vis-a-vis geo-economic and geostrategic interests in the Indo-Pacific have brought the two countries closer together. India’s view of Japan has historically been positive, returning to Japan’s 1905 triumph over Russia, which was viewed in India as the start of an Asian resurgence (Jaishankar, 2000). While officially non-aligned, India was associating more closely with the Soviet Union than the United States (Ganguly, 2004) throughout the Cold War. The pressing factors of the Cold War, strategic and international goals all added to the difference in international strategy targets among India and Japan. However, the end of the Cold War marked the end of the political split between the two states. The primary changes

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in Asia’s security climate, further driven by China’s meteoric economic and political rise especially post the Asian economic crisis, gave India and Japan considerably more strategic commonality and mobility for cooperation. This chapter argues that the developing collaboration between India and Japan is drawing the two nations closer together, from a simple political relationship to a profoundly active one. With India–Japan set to celebrate the 70th anniversary of diplomatic ties in 2022, the ‘Special Strategic and Global Partnership’ between the two highlights that it has stood the test of time, promising to be a crucial carrier of their shared values such as peace, prosperity, democracy, pluralism, open society, rule of law, human rights, free trade and rules-based maritime order. This chapter analyzes the bilateral synergy between the two and what future role it must imbibe to create a progressive Indo-Pacific region. Third-country cooperation, multilateralism and common security threats from an assertive and indeed increasingly aggressive China are important elements shaping India–Japan cooperation.

2 Partnership for a New Era A trademark foreign policy tool of Shinzo Abe, Japan’s longest-serving Prime Minister, was the personal camaraderie and trust he built with leaders of partner nations. Indian Prime Minister Narendra Modi and Abe too developed this personal chemistry via bilateral diplomacy and state visits that promoted the evolution of India–Japan strategic ties (Banerjie, 2018). Under the close working relationship Modi and Abe built, India–Japan ties flourished in all sectors. A seasoned diplomat and Japan’s longest serving Foreign Minister, Kishida Fumio is expected to continue along the lines of Abe’s initiatives as the new Prime Minister of Japan. Kishida previously unveiled Japan’s massive USD2.32 billion infrastructure building aid to India back in 2013. Having played a huge role in the shaping of the 2015 India–Japan Indo-Pacific Vision for 2025, India will almost certainly be included within Japan’s Indo-Pacific calculus under Kishida, as he will likely carry on Abe’s Indo-Pacific legacy (Panda, 2021). Moreover, Kishida’s ambitious economic plans and reputation as a ‘consensus leader’ appears promising in continuing and shaping ties with India and its partners. Increased parity between both states is highly likely under Kishida’s leadership and can prove to be a huge boost for Prime Minister Narendra Modi’s flagship ‘Make in India’ initiative. Economically, Japan emerged as India’s third-biggest investor with total foreign direct investment (FDI) amounting to $32.058 billion in the period from 2000 to 2019 (Ministry of External Affairs, 2020a). These investments have also grown increasingly diverse over the years while India’s ‘Act East Policy’ (AEP) and Japan’s ‘Expanded Partnership for Quality Infrastructure’ (EPQI) have led to extensive collaboration in India’s northeast (Business Standard, 2018) (Tokyo in 2019 announced investments of INR13,000 crore in northeast India, furthering cooperation beyond projects like Mumbai Ahmedabad High Speed Rail) and a ‘continental connect’ (with Africa via collaborative initiatives like the Asia–Africa Growth Corridor (AAGC) (Panda, 2017).

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Within the economic sphere too, ties between India and Japan have improved immensely. Japan provided technical assistance and know-how for the construction and development of the Delhi, Bengaluru and Chennai Metro, and has also invested in the Delhi–Mumbai Industrial Corridor. Most recently, Japan’s first-ever Overseas Developmental Assistance (ODA) project loan was extended to the government for Andaman and Nicobar Islands, crucially located in the Indian Ocean (The Hindu, 2021). Over the past 15 years, Japan has invested an amount totaling up to more than $25 billion across various sectors in India (Maini & Sachdeva, 2017). While earlier Japanese investments were concentrated in the sectors of electrical equipment and automobiles, the Japanese government has tasked the Mizuho Financial Group with tapping further investment opportunities in India. It was under Prime Minister Modi’s leadership, that India initiated its formal ‘2+2’ dialogue, first with Japan, between its foreign and defense ministries in 2016 (Takenaka, 2014). Over the course of the relationship, the agenda was widened from issues of mutual importance to include issues with global implications. India’s military relationship with Japan dates back to as early as the ‘Joint Declaration on Security Cooperation’ signed in 2008 (Ministry of Foreign Affairs, 2008), which proposed regular meetings at the director general or joint secretary level, navy-to-navy and student exchanges, in order to further build the trust between both nations. Over time, these inter-military consultations have provided a unique platform for India and Japan to regularly exchange defense-related information. The two countries have entered the realm of moderate cooperation, through joint exercise and arms transfers. Largely credited to Abe, Japan and India have carried out engagement in naval exercises like Malabar (Yogendra, 2017) and JIMEX (Indian Defence Review, 2012)and participated in security dialogues like the Quadrilateral Security Dialogue (Quad) (Australia–India–Japan–US). Trilaterals like Japan–America–India (JAI) and Australia–Japan–India (AJI) have also reinforced their broader ambitions. SCRI. ASEAN centrality has figured prominently in their Indo-Pacific visions, as seen in India’s drive for inclusivity and Japan’s ‘Free and Open Indo-Pacific’ policy (FOIP) (Tamaki, 2020). Despite such growth, the relations between the two nations have not reached their true potential as a ‘global’ partnership (Panda, 2020a, 2020b). The mantel to reach this milestone was passed on to Japanese Prime Minister Suga1 and has now been taken on by Kishida, who must identify key sectors of synergy in the post-COVID order for closer cooperation and engagement with India. Furthermore, despite Abe’s attempts to promote economic multilateralism (Kono, n.d.), India’s absence from the Regional Comprehensive Economic Partnership (RCEP) limits its potential. India’s inclusion and participation are imperative for Kishida to be able to successfully lead the way for RCEP negotiations that benefit India on an equal footing, given that it is this partnership that is poised to be a landmark of the new generation multilateral trading system. This will potentially pave the way for India to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) one day and could mark the success of India–Japan economic multilateralism in the post-Abe era. This in turn would help dilute Chinese influence within the 1

And later to Suga’s successor Kishida Fumio who became Prime Minister in September 2021.

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grouping, given the RCEP’s expansion (Tominaga, 2021). Kishida must also work with India to revise their UNSC bid for permanent membership which under the ambit of G-4 (with Brazil and Germany) has been undermined repeatedly by the ‘Coffee Club’. A shift in strategies by building more bilateral synergy in the form of asymmetric alignment (Panda, 2020a) is needed on the part of both countries. India and Japan’s essential priorities merge on the issue of upgrading oceanic security. This issue figures conspicuously in the security discourse between New Delhi and Tokyo in light of the fact that the economies of the two nations are vigorously subject to maritime-based transportation especially with respect to oil from the Persian Gulf. Moreover, the ‘blue economy’ (Juneja, 2021) is a serious point of focus as fisheries and energy resources from the sea are vital to the two maritime democracies. Even though the Indian Navy is one of the most powerful in the Indian Ocean and ranks among the top five navies of the world, India lags behind significantly in other elements of maritime trade and connectivity. With a less than 1 percent share of global shipbuilding and lack of modernization in major ports, India’s maritime trade competitiveness is one aspect that has been neglected. Though India is home to a 200 million strong coastal community that depends on the sea for a livelihood, the modernization of practices and seabed exploration for minerals and other resources have not been tapped into by official agencies. Securing energy supply routes is a vital interest for both parties. India is situated between two fundamental waterways in the Indian Ocean district. It sits straddling two choke-points of worldwide oil supplies—the Strait of Malacca to its east and the Strait of Hormuz to its west. Around 33 percent of global exchange and half of the world’s oil go through these paths (Komiss & Huntzinger, 2011). The Strait of Malacca, the fundamental section between the Indian Ocean and the South China Sea, is especially imperative for Japan’s international trade. More than 60 percent of Japan’s oil payload from the Persian Gulf—and over 80 percent of China’s oil imports by sea—is shipped through the Strait of Malacca (Mauldin, 2017). India’s location in the Indian Ocean is thus of huge importance to Japan. In 2010, the Indian government released a 10-year maritime agenda with plans to strengthen the maritime sector. It initiated a multi-crore program for revitalizing India’s ports and infrastructure through the Sagarmala initiative. The initiative identified projects worth up to INR 8 lakh crore to be developed by 2020. This would have saved the country’s logistics costs and also provided employment opportunities. Had it been implemented on time, the Sagarmala project would have placed India on the forefront of maritime infrastructure development. The delay in the implementation of maritime infrastructural development projects provides an area for collaboration between India and Japan. An area where both nations have been cooperating on is security. During Prime Minister Singh’s visit to Japan in 2008, a joint declaration on security cooperation between India and Japan was signed, addressing various frameworks of security, including dialogue between coast guards (Ministry of Foreign Affairs, 2008). Since 2018, negotiations have been ongoing regarding a mutual agreement on sharing facilities of the Japanese base in Djibouti, and the Indian facilities on the Andaman and Nicobar Islands. In 2019, India and Japan held mine counter measure exercises

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between the Indian Navy and the Japanese Maritime Self-Defense Force (JMSDF), addressing explosive ordinance disposals. In 2020, the Indian coast guard signed a memorandum of understanding with Japan and six other nations for cooperation in maritime search and rescue operations (The Hindu, 2020). Currently, in addition to the search and rescue operations organized by the Indian coast guard, rescue communication check exercises are also being carried out in order to overcome the challenge of the language barrier. Furthermore, given that the goals of the Indo-Pacific cannot be achieved by a single nation, bilateral and trilateral maritime exercises effectively help fulfill mutual goals. In February 2022, India’s Milan naval exercise is scheduled to take place, involving Quad countries AUKUS (Australia, UK and US), certain ASEAN and neighboring South Asian states. Even France expressed interest in joining AUSINDEX, the India–Australia bilateral naval exercise (Peri, 2020). In 2021, India completed the 24th edition of the Malabar Naval exercise in the Philippine Sea and the Bay of Bengal, with the participation of Australia, Japan and the United States, with the objective of strengthening trilateral naval ties. The exercise also aimed to strengthen cooperation and inter-operability based on shared values and principles. India’s increased interest in performing naval exercises creates potential for further cooperation with Japan on this front. The Indian navy has assumed an important role in anti-piracy operations (Peri, 2019),especially in the Indian Ocean, where numerous Japanese boats have been the focus of assaults by privateers. In one significant episode in 1999, the Indian coast guard and navy rescued the Japanese vessel MV Alondra Rainbow, which had been captured from the South China Ocean by pirates (Richardson, 1999). The ramifications of this effective operation were enormous, showing the world and Japan that India could be a balancing power to reckon with in the weakening security climate of the Indian Ocean. This episode additionally played a catalyst in opening the security exchange between the two nations. Until India’s push toward liberalizing its economy from 1991 onward, bilateral economic ties between both nations remained lukewarm. Since then, however, economic relations have progressed to a moderate level of cooperation. Under Dr. Manmohan Singh’s government, India signed the bilateral ‘Comprehensive Economic Partnership Agreement’ (CEPA) (Ministry of Foreign Affairs, 2011),moving to provide tariff reductions for up to 90 percent of the goods traded between both nations. While there is potential for both nations to play the roles of trading partners and investors in each other’s economy, as of 2018, India’s proportion of Japan’s trade stood at 10 percent, while Japan’s share of India’s trade was at 2.1 percent (Makoto, 2020). India and Japan have been dedicated to maritime security collaboration since the inception of the bilateral security exchange. This incorporates both anti-piracy activities and security of sea lanes of communication (SLOCs). In this context, coast guard exercises between both countries’ coast guards —ongoing since 2006—require extra

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focus in light of China’s new Coast Guard Law (adopted in January 2021).2 More explicitly, strategic cooperation between Japan and India must be established to create an Indo-Pacific climate in which China’s hegemonic actions and territorial expansionism are countered, and whereby China would be constrained to acknowledge collaboration inside a regional system (Horimoto, 2020). Additionally, it should be stressed that such a system ought to be detailed in an inclusive way to stay viable and maintainable. Japan–India relations can hence arise as profitable to all Indo-Pacific nations and not just to India and Japan.

3 Evolving Third-Country Cooperation and Continental Connect Ambitions Trilateral partnerships are a ubiquitous solution to the lack of effectiveness in implementation posed by larger multilateral frameworks, enhancing the speed of decisionmaking and sometimes, project implementation. The first approach toward trilateral cooperation was established with a track 1.5 dialogue, during Dr. Manmohan Singh’s tenure. It was jointly organized by the Center for Strategic and International Studies, in collaboration with the Confederation of Indian Industry and the Japan Institute of International Affairs (JIIA). This guided the establishment of a formal grouping, leading to the first official trilateral dialogue between the United States, Japan and India, at a bureaucratic level in December 2011 (Ministry of Foreign Affairs, 2015). Under Prime Minister Modi’s leadership, the trilateral partnership has advanced further. With a more organized approach taken to trilateral dialogues, this grouping has highlighted its commitment to a Free and Open Indo-Pacific, within a rules-based international order, including unhindered trade and holding dialogues on counter-proliferation and counter-terrorism. With the adoption of the India–Japan Acquisition and Cross-Servicing Agreement (ACSA), Indian Foreign Minister S. Jaishankar stated that the two countries are taking a more active interest in thirdcountry cooperation (such as Sri Lanka, Bangladesh and Myanmar) (Mint, 2020). In the post-COVID era, the establishment of the Supply Chain Resilience Initiative (SCRI) between India–Australia–Japan is a major tool to further third-country cooperation, making use of platforms like ‘Quad Plus’ and the Japan–Australia–US-driven ‘Blue Dot Network (BDN)’. At the G-7 Summit at Corbis Bay, the United Kingdom in June 2021, leaders of the G-7 countries have committed to alternative infrastructure development. Anointed ‘Build Back Better World (B3W)’, the initiative focuses on promoting transparency and inclusion. As outlined in a White House fact sheet, this global infrastructure project, led by the democratic leaders of the world, aims to narrow the $40 trillion infrastructure development gap faced by the developing world (The White House, 2

A law that authorizes China’s coast guard to shoot at foreign vessels which intrude into territorial waters China claims as part of its territory (in the South China unlawfully, as the Permanent Court of Arbitration (PCA) ruled in 2016).

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2021). The initiative will primarily focus on climate change, health security, gender equality and technology. One can also consider that initiative as a reinvigorated effort at advancing the BDN with additional support in terms of governance and finance flowing in from other democratic nations as well. Although the BDN, supported by the United States, Japan and Australia, aims to support private investors in addressing the global need for infrastructure, primarily in the developing world, there are practical questions that the network has yet to address more clearly. Leaders and governments of the developing world will need to be assured about the incentives for recipient nations having to wait longer to receive the infrastructure support at a potentially higher cost, and challenges of certification. Most importantly, the nations need to be convinced as to why the BDN is a better alternative to China’s behemoth infrastructure initiative, the Belt and Road Initiative (BRI). Even if the B3W initiative is successful in convincing developing nations in supporting their growing infrastructure needs, further challenges lie ahead. Firstly, the B3W initiative would need to be matching the speed at which China has been developing and engaging economies in the region. As pointed out by Choi Shing Kwok, director of the ISEAS—Yusof Ishak Institute, Southeast Asian nations may be open to engaging with B3W eventually—against the background of and motivated by their fear of overdependence on China (Aravindan & Christina, 2021). However, it is imperative for the recipient nations to shake off their past reluctance to commit to further development, given the challenges faced by Sri Lanka in the Hambantota Port Project (Maramudali, 2020), or by Indonesia in the Jakarta–Bandung high-speed rail project (Guild, 2020). Being a secure bilateral relationship, third-country cooperation has not succeeded much in India–Japan ties. For instance, ‘Eurasian diplomacy’, coined by former Japanese Prime Minister Ryutaro Hashimoto, was one failure of Abe’s time in office which limited deeper synergy between Japan’s ‘Central Asia plus Japan’ policy (Ministry of Foreign Affairs (2020b) and India’s ‘Connect Central Asia’ policy (Ministry of External Affairs, 2012). Cooperation between the European Union (EU), India and Japan in the IndoPacific has the potential to emerge as one of the defining developmental partnerships of the region (Okano-Heijmans, 2018). Cooperation trends have undergone major changes in recent years; developmental partnerships are no longer solely based on a north–south divisive structure. Rather, symbiotic links that promote mutual interests, national security and economic gain have emerged as major patterns especially in the Indo-Pacific. Asia–Europe cooperation is not a new creation; rather, the Asia–Europe Meeting (ASEM) established in 1996 (Ministry of External Affairs, n.d.) has aimed to promote cooperation, dialogue and collaboration between the two continents for the long term. With the EU and its member states yet to take a concrete stance on the IndoPacific, leaders of Japan and India have their work cut out for themselves. The two must engage countries not just in a trilateral framework, but are advised not to present their Indo-Pacific policies as policies aimed at countering and/or deterring China, but instead as a credible and powerful group of democratic countries. The EU and its member states could be engaged with leaders in the region in further developing the Indo-Pacific narrative and shaping strategic debates around the grouping in the

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region. While Europe may have limited military capacities in the region, collaboration in focus on non-traditional security challenges such as good governance, climate change and trade can help narrow the disconnect between both parts of the world (Wacker & Heiduk, 2020). An inter-continental connection between Europe and Asia must be nurtured in the emerging international order. For India, Japan and the EU, the creation of such a partnership must be built on common liberal values as the basis for developmental cooperation. The partnership can combine national strategic ambitions—both commercial and security interests—amidst the EU’s rising focus on the Indo-Pacific. Lack of substantial progress post the conclusion of recent EUChinese institutional exchanges and encounters, ongoing disputes over negotiations on a comprehensive EU–China bilateral investment agreement and increasingly tense relations between China and EU member states like France and Germany point to increasingly overall tense EU–China ties in the years ahead. China’s human rights violations in Xinjiang and Tibet, restricting political and judicial autonomy of Hong Kong, the bullying of Taiwan, China’s constant breach of international norms and its increasingly assertive and indeed aggressive maritime behavior have resulted in deteriorating EU–China relations. While Japan is undertaking efforts to move manufacturing and production out of China to limit its economic dependency on Beijing, the EU–Japan Economic Partnership Agreement (EPA) has removed almost all trade barriers between Brussels and Tokyo (European Commission, 2021). This provides scope for immense growth and integration. Similarly, India and the EU have decided to resume trade talks after a hiatus of eight years, marking a major entry for both into the other’s market (Mohan, 2021). Diversification of supply chains post-pandemic is an important common goal of the EU, India and Japan; here, collaboration within the framework of SCRI with EU and the economies of India and Australia can create a mutually beneficial trading environment. Collaboration with Taiwan in this endeavor must also be considered. Being external gateways into China, they can provide immense economic and political clout to the SCRI. Furthermore, the integration of Nordic countries—Sweden, Iceland, Denmark, Norway and Finland—into the SCRI will enable the creation of green, sustainable and energy efficient new-world supply chains. The integration of Taiwan with high-tech supply networks, India’s manufacturing abilities, Japan’s skilled labor force, Australia’s maritime economic prowess and the EU’s integrated and expansive economic network have the potential to make SCRI the pivotal supply chain-driven economic initiative of the decade. Furthermore, the membership of the Nordic states in the Arctic Council can provide a strong platform to India, Japan and the EU in contesting China’s growing increasingly aggressive policies in the Arctic circle. Japan’s Expanded Partnership for Quality Infrastructure (EPQI) and India’s Strategic Partnership with the EU (Ministry of External Affairs, 2020b) must look to actively engage with the EU’s infrastructure connectivity initiatives such as the Connecting Europe Facility (CEF). Connectivity spans roads, railways, jobs, fiscal mobility, digital connects, energy and more; with common liberal ideals, there is immense potential for strong collaboration that allows for EU-driven entry into the continent while giving CEF a more global outlook, especially via SCRI. In the

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EU’s Recovery and Resilience Facility (RRF)—created for Europe’s post-pandemic recovery—5G infrastructure has been identified as a key area of investment. Collaboration on this front with Japan’s cross-vendor approach and India’s growing focus on 5G infrastructure building could be initiated. The time for EU’s—and more importantly that of EU states—open integration with globalized, new supply chains and connectivity frameworks is now. Via Japan and states like India, this can be envisioned more clearly. Trilateral participation with India and Japan may add to the EU’s set goal of recalibrating relations with Africa. India and Japan are major players in Asia that share democratic and liberal rule values with the EU. Besides, they have exhibited complementarities in ‘historical ties, presence, competitive edge and funds’ (Panda & Okani-Heijmans, 2020) that can be utilized more efficiently. Here, the EU can profit from solid advances that India and Japan have effectively taken toward this path. China’s rapidly increasing economic presence in the African continent has perplexed many strategic calculations and choices for major actors in the world. This prompts the question of whether Africa, once identified as a strategic partner, needs a more collaborative and value-oriented partnership. The cooperative proposition of India and Japan to reach Africa under the ‘Platform’ for Japan–India Business Cooperation in Asia–Africa Region (hereon, ‘Platform’) is attractive strategically, leveraging the strengths of each partner. Yet, from its inception as AAGC to becoming the ‘Platform’, the venture has not performed as expected. EU involvement can be the catalyst needed to improve its performance. Similarly, with Africa reeling from the economic impact of the COVID-19 pandemic, its dependency on China-centric supply chains has emerged as a major problem. Inducing even half of the 53 African countries into the SCRI can strengthen it, creating chains across the western Indian Ocean. India and Japan’s third-country cooperation has expanded to Sri Lanka, Bangladesh and Myanmar (Mint, 2020) beginning in 2018 with the creation of an USD 250 million LNG terminal in Sri Lanka (Hindu Business Line, 2018). With Bangladesh and Myanmar being important littoral countries where China’s involvement is increasing significantly—and with Sri Lanka being a major Asian maritime democracy engaged in China’s BRI—focus on these three countries has increased. In 2019, the net inflow of FDI to Bangladesh from India and Japan was $115.9 million and $72.3 million, respectively (Bangladesh Bank, 2019). The two nations have shown interest in financing infrastructure projects in Bangladesh, for example, the Chilahati–Haldibari rail interface, the Dhaka–Siliguri rail connect and the Araihazar Economic Zone. Japan’s Marubeni Corp. India’s Larsen and Toubro worked together in building the 400-MW Bibiyana-III Gas Based Combined Cycle Power Plant in Bangladesh in 2016. In 2018, they began with their first joint attempt to assemble a rail framework in a third country and won the agreement for developing Bangladesh’s first mass rapid travel framework (New Indian Express, 2018). Meanwhile, India has numerous connectivity projects in Myanmar: the India–Myanmar– Thailand Trilateral Highway, the Kaladan Multi-Modal Transit Transport Project (KMMTTP) which is a modern passageway connecting India’s upper east locales to Myanmar, the Mandalay transport administration and the Mekong–India Economic Corridor. Japan’s interests in the nation have grown consistently, with the November

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2020 signing of low-interest loans for infrastructure building being valued at $ 414 million (Harris, 2020). As far back as 2017, Japan already had 39 organizations working in the Thilawa Special Economic Zone in businesses like automobile, land, inns and the travel industry (JICA, 2017). By bridging their mutual activity in Myanmar into a joint venture, the India–Japan bilateral can achieve much success in Myanmar.

4 The Japan–India Bilateral Relationship in a Multilateral Perspective One of the defining features of Indo-Pacific diplomacy is the vital role of emerging trilateral and multilateral collaboration between governments. Initiated by former Japanese Prime Minister Abe in 2007, the India–Japan–US–Australia Quadrilateral Security Dialogue (Quad) was formed at the helm of the successful humanitarian collaboration after the 2004 Indian Ocean Tsunami. Revived in 2017, this renewal is undoubtedly a response to China’s aggressive stance on territorial and maritime disputes in the East and South China Seas. India and Japan have been facing Chinese military standoffs; in Doklam and Ladakh and around the Japanesecontrolled Senkaku Islands in the East China Sea over the recent years, making this grouping’s revival all the more important. The Quad is possibly one of the most crucial vectors forging both the path of containing China, its growing clout in the region through the BRI and for sustaining Indo-Pacific security and economic structures. The politicization of the Quad has become evident with the successful organization of the Quad Leaders’ Summit (QLS) (Ministry of External Affairs, 2021),while the unofficial grouping of ‘Quad Plus’ shows the potential to evolve into a more institutionalized framework. During its revival, all member-nations downplayed the importance of a military prospect and questioned its relevance. With the members of the Quad nations limiting their commitments, especially toward military and securityrelated challenges, the question of containing China, and the most appropriate way to address it will remain unanswered. While military cooperation is still in its early days, addressing it within the grouping has to become a priority in order to be able to contain Chinese territorial expansionism effectively and sustainably. For Japan, its future as a leader in the Indo-Pacific revolves around FOIP as a regional order, the Quad as the political (potentially military) factor and at present, RCEP and CPTPP as economic determinants. Meanwhile, India has its diplomatic focus divided into regional, global and local divisions. Globally, it cooperates with China practicing power-partner parity to promote the creation of a multipolar, inclusive Asia while endeavoring for its own major-power status (Panda, 2016). Regionally, it wishes to create a larger presence for itself in all Indo-Pacific dimensions by focusing on solidifying quadrilateral and trilateral ties with Japan, Australia, the United States, South Korea and more. Here, it espouses inclusivity, not demonstrating a strong anti-China stance despite ties taking a turn for the worse post the

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Galwan valley incident (BBC, 2020). Locally, bilateral ties with South and East Asian countries take precedence under AEP, more specifically focused on countering China. Either way, both India and Japan’s Indo-Pacific outlooks ultimately present coping with China’s rise as a key factor, with the Quad becoming an increasingly powerful common denominator. Avenues for using the Quad further—in areas apart from militarization which both India and Japan will not be keen on—are many. For instance, US–Australia–Japan-led BDN not only compliments Japan’s EPQI strategy but also builds Japan’s G20 leadership for the promotion of quality infrastructure investment through consensus building. India could be potentially included here, thereby including all Quad powers. Apart from building on bilateral synergy with the United States and Australia, India’s inclusion in BDN will expedite the aforementioned ‘Platform’ it shares with Japan. The evolving India–Japan–France trilateral is also emerging as a crucial venture, marking the first formal entry of a major European power into the Indo-Pacific dynamic (The Hindu, 2021). The emergence of the AUKUS trilateral, with little to no consultation of the grouping’s Western allies, has further pushed France toward working in closer cooperation with key powers India and Japan. By blindsiding France, AUKUS has enabled a host of opportunities for France to consider India and Japan as reliable partners in the IndoPacific, helping deepen their engagement with the EU (Swanström, Panda, 2021). France therein emerges as another important partner for India and Japan’s Africa and Europe connectivity ambitions, while France’s maritime prowess in the Indian Ocean can prove to be a crucial boost to their naval capabilities. Furthermore, given that the basic tenets that the Quad is based on are disaster policy coordination and governance, implementation of the policies by the four Quad countries regarding the COVID-19 pandemic has included Vietnam, South Korea and New Zealand in forming an unofficial ‘Quad Plus’. Not only will this ensure that the focus is on addressing the socio-economic and health consequences of the pandemic, but also that India and not China would provide the opportunity to further engage and elevate interaction with a higher level of cooperation with the member-nations.

5 Conclusions In the past, Japan has taken a low-key approach to India, and has been reluctant to engage with India in a comprehensive and consistent manner. Japan’s view of India has altered considerably across sectors—diplomatic and economic ones—since the 1998 nuclear testing. However, with China’s unparalleled rise over recent years, it is imperative for both Japan and India to revisit their politico-strategic and economic orientation toward each other. When examining the Indo-Pacific security environment and dynamics, Japan–India relations are vital. Their relations have seen a moderate amount of success in the early part of the twenty-first century. Apart from solidifying their bilateral relations to adapt to the ascent of China, both nations have also worked toward military, financial and diplomatic participation, at first in Asia and further extended to the Indo-Pacific region. Nonetheless, there remains immense room for

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growth as the true potential of the India–Japan partnership in its ‘global’ grandeur is yet to be reached. In line with commitment to the aforementioned economic multilateralism and to improve Eurasian connectivity, India and Japan can incentivize working with Russia, which is looking for partners for its Eurasian Economic Union (EEU) (Economic Russian International Affairs Council, 2018; Times, 2018) This trilateral cooperation also opens up the potential for India, Japan and Russia to explore opportunities in the Arctic, in recognizing the nature of regional development, across the Russian Far East. Russia views both the Indo-Pacific and Quad groupings as anti-China groupings and is hence averse to joining either. However, an area to start from would be investing in Russia’s Far East, leading up to the Arctic region. Nevertheless, this will have to be done in close consideration of the existing challenges of operationalizing infrastructure and financial support (Basu, 2021). Japan’s potential inclusion in the ‘Five Eyes’ grouping3 could further intelligence sharing networks with India in coordination with the United States—a partner of India and an ally of Japan. While Edward Snowden’s 2013 leaks point to the fact that the ‘Five Eyes’ had been maintaining second and third tiers of intelligence sharing with other countries, bringing Japan to the forefront of the discussion would help the ‘Five Eyes’ grouping focus more on the rising threat China poses, and potential communication of information from North Korea too. The Japanese ambassador to Australia, Yamagami Shingo, in an interview with an Australian media house highlighted his hope for the idea of Japan joining the grouping in the near future (Citowicki, 2021). By gradually easing Japan into the grouping, and addressing the challenges of expanded membership, Japan could then focus on potentially including India to the network, strengthening ‘Five Eye’s’ collaboration with the Asian subcontinent. With leaders of both Japan and India extending their support to the ASEAN outlook on Indo-Pacific on further sub-regional cooperation, it is imperative for this grouping to identify areas of collaboration such as maritime connectivity and sustainable development. Concurrently, vis-à-vis ASEAN, both India and Japan have begun furthering ties with countries like Vietnam and the Philippines. A case for multilateral, or third-party cooperation-driven focus on the two China seas for Tokyo and New Delhi should be considered. The defense partnership has not grown at par with the broader India–Japan maturation of ties. This should be accentuated, especially in defense manufacturing, as New Delhi accelerates its ‘Make in India’ policy and Tokyo moves away from the Armed Exports ban (Three principles on Arms Exports),4 India has started exploring joint projects in the regions of the Bay of Bengal and the Mekong Delta, through its participation in the Mekong–Ganga cooperation, BIMSTEC and, most recently, the Ayeyawadi-Chao Phraya-Mekong Economic Cooperation Strategy in the capacity of a development partner. Simultaneously, Japan has been developing 3

The Five Eyes is an intelligence alliance consisting of the US, UK, Australia, Canada and New Zealand. 4 For decades, Japan observed a total ban on the export of arms or defense-related equipment that would ‘clearly impede the maintenance of international peace and security’. These restrictions were lifted in 2014, with the adoption of the Three Principles on Transfer of Defense Equipment and Technology.

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the Vientiane Vision 2.0, for strengthening defense cooperation between Japan and ASEAN to strengthen maritime security and address non-traditional security threats (Hui & Hussain, 2020). Although there have been scattered efforts by both nations of integrating different parts of the world to strengthen the Indo-Pacific narrative, it is imperative that collective action is taken to drive the narrative of a strong bilateral relationship, leading to the formation of stronger regional institutions through the Indo-Pacific. The Japan–India relationship needs to also explore opportunities in the West apart from strengthening ties with the United States. Emphasis should be laid upon the plethora of opportunities to collaborate in a data-driven economy. Collaboration between Japan–India–Canada, e.g. can help in scaling firms, and in driving cuttingedge technologies in the industries of machine learning and artificial intelligence. With connectivity not just in the region, but a global network becoming an increasingly important priority, countries can use technology as a vehicle to strengthen the concept of the Indo-Pacific. With the COVID-19 pandemic causing insurmountable damage to human life and the economies globally, the approaches of the nations in tackling the pandemic have been different. Both countries have missed the target of mitigating the consequences in the short term. Therefore a potential area of cooperation is charting out long-term plans. The pandemic provides policymakers with the opportunity of redesigning strategies on health diplomacy and climate change, to name a few, in strengthening the economy and the resilience of our societies. A shift to a more inward-looking policy will help in addressing the gaps in our society and in strengthening the resilience of both nations from disruptions to global supply chains. Over the last several years, the international rules-based system has been undergoing a drastic transition, that has led to a weakening US-led liberal order being challenged by competing for regional visions. A strengthened inclusive regional partnership between India and Japan will prepare the Asian subcontinent for any challenge thrown at it, with strong leadership. A successful Japan–India partnership will act as a stable center of gravity in intra-Asian relations.

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Mint. (2020, September 18). India, Japan looking at working in third countries: Jaishankar. https://www.livemint.com/news/india/india-japan-looking-at-working-in-third-cou ntries-jaishankar-11600445194173.html Mohan, G. (2021, May 07). India-EU to resume trade talks after 8 years, TRIPS waiver for Covid vaccines, rights issue to be discussed. India Today. https://www.indiatoday.in/india/story/indiaeu-trade-talks-trips-waiver-covid-vaccines-human-rights-issue-1799775-2021-05-07 New Indian Express. (2018, November 04). India, Japan collaborate to counter China’s sway. https://www.newindianexpress.com/thesundaystandard/2018/nov/04/india-japan-collaborateto-counter-chinas-sway-1893929.html Okano-Heijmans, M. (2018). Reimagining Europe’s partnerships with India and Japan: A new trilateral? Clingendael Institute. www.jstor.org/stable/resrep17356 Panda, J. (2016). Narendra Modi’s China policy: Between pragmatism and power parity, Journal of Asian Public Policy, 9(2), 185–197. https://doi.org/10.1080/17516234.2016.1165334 Panda, J. (2017, August 18). Asia-Africa Growth Corridor (AAGC): An India–Japan arch in the making? Institute For Security and Development Policy. https://isdp.eu/publication/asia-africagrowth-corridor-aagc-india-japan/ Panda, J. (2020a, June 10). India, Japan must shift strategies to get U.N. Security Council Seat. https://japan-forward.com/asias-next-page-india-japan-must-shift-strategies-toget-u-n-security-council-seat/ Panda, J. (2020b, September 03). Future of the post-Abe India–Japan partnership. https://asiatimes. com/2020b/09/future-of-the-post-abe-india-japan-partnership/ Panda, J. (2021, December 31). [Asia’s Next Page] Kishida’s Foreign Policy Manifesto in 2022 and Beyond. https://japan-forward.com/asias-next-page-kishidas-foreign-policy-manifesto-in-2022and-beyond/ Panda, J., & Okani-Heijmans, M. (2020, April 3). Forging an EU-India-Japan Trilateral in Africa. https://www.clingendael.org/publication/forging-eu-india-japan-trilateral-africa Peri, D. (2019, June 02). Indian Navy steps up anti-piracy patrol, The Hindu. https://www.the hindu.com/news/national/indian-navy-deploys-p-8i-from-oman-on-anti-piracy-patrols-in-gulfof-aden/article27406710.ece Peri, D. (2020, November 25). India discussing more trilateral naval exercises, The Hindu. https:// www.thehindu.com/news/national/india-discussing-more-trilateral-naval-exercises/article33177 983.ece Richardson, M. (1999, November 23). Challenging Marauders’ Spread, Navy Recovers a Hijacked Ship: India and China Set Sights on Piracy, International Herald Tribune. https://www.nytimes. com/1999/11/23/news/challenging-marauders-spread-navy-recovers-a-hijacked-ship-india-and. html Russian International Affairs Council. (2018). Russia–Japan cooperation in Eurasia. https://russia ncouncil.ru/papers/Russia-Japan-Eurasia-WP43-en.pdf Takenaka, K. (2014, September 1). Japan and India vow to boost defence ties during summit, Reuters. http://in.reuters.com/article/japan-india-investment-modi-idINKBN0GW15520140901 Tamaki, N. (2020). Japan’s quest for a rules-based international order: The Japan–US alliance and the decline of US liberal hegemony. Contemporary Politics, 26(4), 384–401. https://doi.org/10. 1080/13569775.2020.1777041 The Hindu. (2020, December 30). Coast Guard signs pact with Asian countries for cooperation in maritime search, rescue. https://www.thehindu.com/news/cities/Mangalore/coast-guard-signspact-with-asian-countries-for-cooperation-in-maritime-search-rescue/article33450146.ece The Hindu. (2021, April 02). India, France and Australia to hold trilateral talks. https://www.the hindu.com/news/national/india-france-and-australia-to-hold-trilateral-talks/article34228271.ece The White House. (2021, June 16). FACT SHEET: President Biden and G7 Leaders Launch Build Back Better World (B3W) Partnership. https://www.whitehouse.gov/briefing-room/statementsreleases/2021/06/12/fact-sheet-president-biden-and-g7-leaders-launch-build-back-better-worldb3w-partnership/

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Tominaga, T. (2021, December 31). RCEP’s benefits come with challenge of keeping China in check. The Japan Times. https://www.japantimes.co.jp/news/2021/12/31/business/economy-bus iness/rcep-benefits-china-challenge/ Wacker, G., & Heiduk, F. (2020, July 1). From Asia-Pacific to Indo-Pacific: Significance, implementation and challenges. https://www.swp-berlin.org/en/publication/from-asia-pacific-to-indopacific/#hd-d24373e2826 Yogendra, K. (2017, August 8). Malabar exercises and Maritime Security, Ministry of External Affairs. https://mea.gov.in/distinguished-lectures-detail.htm?691

Dr. Jagannath Panda is a Research Fellow and Centre Coordinator for East Asia at the Manohar Parrikar Institute for Defence Studies and Analyses, New Delhi. Dr. Panda is the Series Editor for ‘Routledge Studies on Think Asia’.

India and the Gulf: The Indo-Pacific Strategy Goes West Francesco Mazzucotelli

Abstract India and the Gulf Cooperation Council member states are moving toward a diversification of their relations, with a particular focus on security and defense cooperation. While ostensibly focused on radical insurgent groups, local stabilization (Yemen, Afghanistan), and containment (Iran, Pakistan), this convergence between India and the Gulf countries seems to be particularly connected to the geopolitics of seaports, maritime infrastructures, and port competition in the Western Indian Ocean. This development should be read against the background of Indian Prime Minister Narendra Modi’s propension for an Indo–Pacific strategic concept and its application to the Western Indian Ocean region in the framework of regional competition with China.

1 Introduction Prior to 2011, Duqm used to be a lackluster fishing village on Oman’s sparsely inhabited coast of the Indian Ocean, roughly halfway between the capital Muscat and Salalah, the country’s second-largest city. The creation of a Special Economic Zone Authority prompted the formation of a new city, largely revolving around a deepwater port, extensive dry dock areas, and transit-oriented industrial areas with huge fiscal and bureaucratic exemptions. Covering a land area of 1,745 square kilometers and with a coastline stretching 70 km along the Arabian Sea, Duqm is marketing itself as the perfect junction between South Asia, Africa, the Persian Gulf, and Europe (SEZAD, 2015). Dubbed as “Oman’s new center for trade and industry,” Duqm relies on its easy accessibility, its proximity to Oman’s oil and mineral fields, and above all on its location outside the choke point of the Strait of Hormuz (Port Duqm, 2016). The new port is therefore advertised as a convenient alternative to the inner Gulf ports such as Jebel Ali, near Dubai, or Hamad Port, near Doha, offering state-ofthe-art equipment to reroute goods to and from the GCC member states through rail and highway networks, rather than navigating through the Strait of Hormuz. F. Mazzucotelli (B) Department of Political and Social Sciences, University of Pavia, Pavia, Italy e-mail: [email protected] © Springer Nature Switzerland AG 2023 S. Beretta et al. (eds.), India’s Foreign Policy and Economic Challenges, Global Power Shift, https://doi.org/10.1007/978-3-031-20270-4_12

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Even though part of the masterplan remains yet to be completed by the time of this writing (2020), the project has already gathered intense attention. In May 2019, the USA signed a strategic deal with Oman providing US military with access to the facilities in Duqm. This also to further increase US military presence in the region in case of further confrontation with Iran (Stewart, 2019). At the same time, Oman seems to count on China for the most ambitious project in its history: the China– Oman Industrial Park. Oman Wanfang, a subsidiary of a private company based in the Muslim-minority Ningxia Hui Autonomous Region (Liu & Yang, 2018), plays a crucial role in construction works and in funneling investments from China. The company enjoys full political and financial support from the Chinese government as the Duqm project is seen as a pivotal stop along China’s Belt and Road Initiative (BRI), the grand project of a seamless corridor between China, the Eurasian continent, and Africa (TRT World, 2017). India too secured access to the port of Duqm for military use and logistical support, in order to counter Chinese influence and expand instead India’s footprint in the Western Indian Ocean region. The deal also has a military component, including the deployment of Indian submarines and patrol aircraft; and an economic component, with significant investments linked to the Gujaratbased Adani conglomerate (Roy, 2018). Furthermore, the United Kingdom (UK) also signed a joint defense agreement with Oman in February 2019, and established a naval permanent outpost in Duqm (The Maritime Executive, 2019). Such a conglomeration of conflicting interests in the Omani port of Duqm might seem implausible at first sight. However, the case of Oman is hardly unique. Recent developments in the Iranian ports on the northern shores of the Persian Gulf show competing strategies at play in the geography of maritime infrastructure. At the end of December 2019, India and Iran agreed to fast-track the development of the Chabahar port, which was already the object of a previous agreement in 2016 before it was negatively affected by US sanctions imposed on Iran. India sees Chabahar as a gateway to Afghanistan through the railroad that connects the port with Zahedan, entirely bypassing Pakistan. Chabahar is also seen as a central junction for the International North–South Transport Corridor (INSTC), the multi-mode system of shipping lanes, railways, and highways that was devised by the 2016 Ashgabat Agreement as a way to increase trade connectivity between Russia and India (Khan, 2020). India’s heavy involvement in Chabahar, which was at odds with the seemingly very good relationship between India’s Prime Minister Narendra Modi and then US President Donald Trump, also comes as a response to China’s central role in and financial contributions to the development of the Pakistani port of Gwadar, in the Makran coastal area of Balochistan. The latter is the terminus of the China–Pakistan Economic Corridor (CPEC), another comprehensive network of roads, railways, and pipelines meant to connect the Arabian Sea with the western parts of Mainland China (Hussain & Jamali, 2019). At the same time, while signing a deal with India on Chabahar in its regional competition with Gwadar, Iran also struck a deal with China in March 2018, in order to boost its Bushehr port and connect it through a train line to Shiraz and the central regions of the country (The Straits Times, 2018). However, there is apparent inconsistency at play. In fact, the seemingly contradictory policies of the actors in the Gulf area must be seen in the context of the regional

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confrontation between India and China, and their respective strategies in the Western Indian Ocean region. This chapter examines how the Indo–Pacific strategic doctrine under the government led by Narendra Modi is translated into India’s actual foreign policy in the Gulf region, mainly as a response to China’s BRI.

2 Historical Background India and the Arabian Peninsula had trade connections and political relations long before the discovery of oil and gas, and the development of energy sector in the Persian Gulf. During the nineteenth century, a Pax Britannica in the region was established through a series of maritime defense treaties between the United Kingdom and the Gulf shaykhdoms. These arrangements were controlled by the British governments of Bombay and India, and overseen by the India Office after 1858. Until India’s independence in 1947, the British government of Bombay nominated a Political Resident in the Persian Gulf, who oversaw relations with the local rulers in Kuwait, Manama, Doha, Abu Dhabi, Dubai, Sharjah, and Muscat through a network of subordinate political agents. British representatives enforced the terms of the agreements and protect British interests and trade routes in the region. The government of Bombay also maintained a Persian Gulf squadron that patrolled the seas and was ready to grant protection to the local tribal leaders who had signed the Trucial agreement (Onley, 2004). The terms of the Maritime Truce and other later agreements between the British governments of Bombay and India, on the one hand, and the Gulf rulers, on the other, placed the latter under exclusive treaty relations and the partial suzerainty of the British Crown. In exchange for military protection against the Ottomans and Qajar Persia, local rulers ceded control of their external affairs to the British government of India and were positioned formally and informally within the British Indian Empire (Onley, 2009). The string of semi-autonomous tribal monarchies in the Gulf acted as a buffer and as a lifeline in order to protect British India and its connections with Europe (Heard-Bey, 1982). India’s independence in 1947 and British withdrawal from the Gulf shaykhdoms between 1968 and 1971 did not diminish the strategic connection between the Indian subcontinent and the Persian Gulf. However, the British disengagement east of Suez led to an expanded military presence of the USA in the wider Indian Ocean region. The creation of Diego Garcia’s naval and air base in 1977 was meant to shield oil and gas fields in the Gulf, protect shipping lanes across the ocean, and prevent the Soviet Union from filling the vacuum left by the British handover in the region (Sand, 2009). A period of relative frigidity in Indian–Gulf relations in the 1970s and 1980s was interrupted in the mid-1990s by an increasingly proactive stance on the Indian side, initially triggered by economic interaction (Ulrichsen, 2010). The relevance of Indian workforce in the Gulf labor markets was already pronounced in the 1970s (Plascov, 1982). Over the decades, significant friction has occurred around the sponsorship system for migrant workers known as kaf¯ala, which is reputed to allow widespread abuse (Longva, 1999). Relations between India and the

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Gulf have therefore been framed in terms of an exchange between capital (provided by the Gulf countries) and labor (provided by India), largely impacted by the nature of the legal status of the Indian workforce and the role of remittances from the Gulf in India’s economy. In the 1990s, in the wake of India’s post-liberalization economy, the growth of the Indian workforce in the Gulf, the nature of bilateral import and export structures, and trade in the oil and gas sector led to a very high level of economic interaction between India and the GCC (Azhar, 2003). One of the significant effects of this trend was the formation of a middle class of Muslim Indian entrepreneurs, mostly Malayali and Tamil, with a history of migration and trade in the Gulf. This diasporic bourgeoisie, which coupled global neoliberal business practices with Gulfinfluenced Muslim modernity, became a driving force in the development of southern states such as Kerala, Karnataka, and Tamil Nadu (Osella & Osella, 2009). Protection of the diaspora, both in the sense of assessing the plight of unskilled or poorly protected workers and providing security for the business environment, has become a pillar of India’s foreign relations with the Gulf countries (Pethiyagoda, 2017). As of 2016, around 8.5 million overseas Indians lived in the Gulf Cooperation Council member states, making up 9% of the population in Saudi Arabia, and between 18 and 30% in the other GCC countries. The economic relationship between India and the Gulf countries, predicated upon the relevance of Indian migrant workers in the area, bilateral trade, and India’s dependency on the Gulf for its energy demand, concurred with India’s understanding of the Gulf as part of what is referred to as its ‘extended neighborhood’ and ‘natural economic hinterland’ (Pradhan, 2014). With the GCC supplying more than half of India’s oil and gas needs, in particular through the Abu Dhabi National Oil Company, and Dubai-based logistics giant DP World heavily investing in the terminal and port concessions, projects of closer cooperation, either in the form of a free trade agreement or the creation of ‘a GCC–India economic bloc,’ have been advanced by economists and policymakers (Al-Ghwell, 2018). With Manmohan Singh as India’s Prime Minister, economic relations between India and the GCC member states were between 2006 and 2010 strengthened by agreements on defense cooperation, maritime security, and data sharing between India, Qatar, Oman, and Saudi Arabia (Ulrichsen, 2010). This diversification of bilateral relations adding security and defense cooperation was predicated upon mutual concerns on “counter-terrorism, money laundering, cyber security, organized crime, human trafficking and anti-piracy.” In particular, naval cooperation has been improved since 2008 (Roy-Chaudhury, 2018). The rapid pace of India’s strong economic engagement with the GCC countries, however, has not been matched by a full political and military partnership (Pradhan, 2014).

3 India’s New Mental Maps of the Western Indian Ocean Sagar is the Hindi term for ‘ocean’ and also the acronym of ‘Security and Growth for All in the Region,’ a strategic plan of economic and strategic cooperation, capacity building, coastal surveillance, and exchange of information among littoral states

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in the Indian Ocean basin. This plan was first devised by India’s Prime Minister Narendra Modi in March 2015 and embodied the attempt to demonstrate the connection between maritime connectivity, maritime security, and economic development. The model envisaged by Modi expanded the forms of regional cooperation in place since 1997 and foresaw a possible extension toward ASEAN member states and Australia connecting South and Southeast Asia. The objective of this policy was expressed in a speech delivered by Modi in Singapore in June 2018 (Keynote Address, 2018). In that speech, Modi deploys a language that is punctuated with religiously flavored terms taken from Vedanta philosophical doctrines, and at the same time glorifies the neoliberal principles of global commerce, open seas, and the rule of law. The text also includes the humanitarian term of ‘goodwill missions, disaster relief operations, and emergency aid.’ However, the focus was placed on partnership-building and deepening India’s engagement in the Indian Ocean region. According to Modi, the ocean “shaped much of India’s history” and “holds the key to [its] future,” as it carries 90% of its trade and energy sources. Only a “free, open, inclusive region” based on “rules-based order,” he argued, can suit India’s needs. Yet, the speech is not only interesting for its insistence on a strong, multipolar world order, but also for the clear articulation of the Indo–Pacific as a ‘natural region,’ the two major oceans being connected “in both the geographic and civilizational sense” by the littoral countries of Southeast Asia. Modi argues that the Indo–Pacific region should not be seen as “a club of limited members” or as a strategy “directed against any country,” but his speech is peppered with allusions to China, praise of the USA, and a clear emphasis on the overhaul of the strategic relationship with Japan. The Prime Minister’s keynote address of 2018 expands some of the concepts that were originally proposed in 2007 by Gurpreet Khurana, who was the first proponent of the union of the Indian Ocean and the West Pacific Ocean regions into a “singular regional construct.”1 According to Khurana, this conceptualization reflects the rise of India in a new so-called ‘mental map’ of the world defined by the enhanced military power and assertiveness of China, and the US ambition to maintain its status as the ‘resident power’ in the Pacific (Khurana, 2017). The coinage of the new term, for the lack of more suitable alternative options, highlights two points: firstly, that developments in the Indian Ocean (in particular because of its role as a conduit of hydrocarbon supplies) are seen as vital to the prosperity of littoral countries in Northeast Asia, in Japan in particular; secondly, that India needs to adopt a more proactive approach and has to be recognized as a major player in the balance of power at the continental level. According to minister Subrahmanyan Jaishankar,2 there is an “incontrovertible geographic logic” of inter-connectedness to the Indo–Pacific concept, which he 1

Captain (Dr.) Gurpreet S Khurana is the former executive director of India’s National Maritime Foundation, and still holds an important appointment in the Indian Navy. 2 Dr. Subrahmanyan Jaishankar was appointed Minister of External Affairs of the Government of India on May 30, 2019. He previously served as India’s longest-serving ambassador to the People’s Republic of China (2009–2013), as ambassador to the USA (2013–2015), and as Foreign Secretary of India (2015–2018). In addition to being one of India’s leading diplomats, he is the son of Krishnaswamy Jaishankar, a key figure in India’s nuclear deterrent doctrine.

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describes as “not tomorrow’s forecast, but yesterday’s reality” (Valedictory Address, 2019). This logic appears to be based on the economic and cultural links between Eastern Africa, the Arabian Peninsula and the Persian Gulf, the Indian subcontinent, Southeast Asia, and Australia. In his view, these connections, established since hundreds of years, permit meaningful cooperation initiatives, even without a full identity of views on plenty of local, regional, and international issues. Jaishankar concedes that no consensus has been reached yet on a shared definition of the Indo– Pacific concept but maintains the necessity to engage with it in both theoretical and practical terms. While the USA and Japan can have a different understanding of the strategic relation between the Indian and the Pacific Oceans, the littoral states of the Western Indian Ocean should come up with their own version of the concept, based on their mutual relations and national interests. The importance and the rationale of India’s engagement with the Indo–Pacific concept and its application in the Western Indian Ocean region are outlined in a lecture delivered by Jaishankar on November 14, 2019 (Goenka Lecture, 2019). The entire speech is a plea for a change of pace and perspective in regional relations. Jaishankar argues in favor of going beyond “orthodox politics” and “obsessing about consistency” in an ever-changing international environment, defined by the rise of China, the salience of Africa, and the volatility of the Middle East. The minister adamantly states that an analysis of world politics and regional relations in the Indian Ocean basin must start from an accurate understanding of the existing global contradictions, and in particular of the competition for global power between China and the USA. A large part of the lecture appears to be addressed to India’s diplomatic milieus, with scathing criticism of ‘the entrenched’ and their allegedly ‘frozen narratives’ and ‘dogmas.’ Disparaging remarks about the “overemphasis on diplomacy” or “obsession with words” are functional to Jaishankar’s apology for discontinuous politics: India needs to reposition itself in a landscape of changing alignments and fragile assumptions. In his audit of India’s foreign policy, largely based on the shifts in the international system, Jaishankar praises the steady relationship with the USA, Russia, Japan, and France, but calls for the necessity of a rapid response and a comprehensive engagement with regional actors. China, on the other hand, appears as the most defining factor of change in India’s foreign policy. All the different phases in post-independence history are seen as dependent on either the conflict with China or the perceived existential threat posed by the quasi-alliance between China and Pakistan. Even in the language of an experienced diplomat, Jaishankar clarifies that he sees China as the main competitor of India in the regional arena and a potential challenge for Indian interests. The narrative that emerges from official documents and analyses is twofold: on the one hand, India enjoys a position of historical dominance in the Indian Ocean and can play a role of stabilizing force and security provider in the whole region; on the other hand, China is challenging that position through it assertiveness and growing presence (Todi, 2019). The notion of ‘String of Pearls’ refers precisely to the idea that China is expanding its power in the Indian Ocean through a system of military and commercial maritime facilities that connect the South China Sea with the Persian Gulf and the Red Sea

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(Lintner, 2019). The combination of China’s economic capabilities, seamless diplomatic efforts, the edification of dual-use infrastructure, and the expansion of its military forces prompts Indian perceptions of encirclement and impending threats to national security (Dutta, 2017). However, it has been argued that China’s expansion in the region does not challenge India’s strategic advantage nor its vital interests, and that Chinese efforts to increase the protection of strategically vulnerable chokepoints, such as the Strait of Malacca, does not amount to a security dilemma, or a cause of further perceived insecurity for India (Brewster, 2014). Nevertheless, several Indian strategists, in particular in the Navy, perceive Chinese intentions of a new Maritime Silk Road as increasing the likelihood of instability, with the potential of activating hitherto dormant disputes in the maritime realm (Khurana, 2017). Since both ocean regions are connected, Chinese naval development in the Pacific Ocean and the South China Sea is seen as likely to affect the Indian Ocean and challenge India’s ambitions to be the dominant power in the Indian Ocean. That is why, according to this view, India should step up its network of partnerships and establish a containment strategy in order to curb Chinese influence in the region.

4 A Great Game of Go According to Erickson (2016), Chinese authoritative documents and white papers on military doctrine reveal a consistent, incremental strategy meant to uphold national interests and territorial claims. This strategy appears to be built through concentric layers of outward radiation based on proximity to the homeland territory. According to this view, the biggest concern is to prevent a “strong adversary” from reaching a clear combat superiority in waters closer to the homeland. Official texts released after 2013 suggest a major shift in the definition of strategic space, in particular for naval operations and capacity building. In these documents, the Chinese navy is not only meant to patrol the disputed South China Sea islands, with all their related claims, but is part of a more comprehensive strategy. The Chinese concept of Two Oceans Region (liˇang yáng dìq¯u), loosely defined as the ‘arc-shaped strategic zone that covers the Western Pacific Ocean and Northern Indian Ocean,’ can be understood as the Chinese theoretical counterpart to the Indo–Pacific doctrine as devised in Indian strategic circles. Erickson argues that the northern and western parts of the Indian Ocean are considered by Chinese naval strategists as a crucial area for China’s security and future development, in particular for the protection of its vital sea lines of communication. In this framework, China’s economic lifeline depends on the preservation of supply lines and freedom of navigation. The People’s Liberation Army (PLA) must therefore acquire and exert the capability to enforce an active protection of national interests, including in what is referred to as in China as the far seas (yuˇanhˇai). According to Sun and Payette (2017), the Chinese Two Oceans strategy aims at gaining control of maritime shipping routes and projecting Chinese geopolitical power, but the purely military side of the doctrine is dwarfed by the state’s economic

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needs and its quest for economic security. On the one hand, there are several factors that limit China’s projection in the Indian Ocean, including growing suspicion and even outright hostility toward its perceived militarism that might foster regional hostility. On the other hand, the Two Oceans strategy appears mostly related to the protection of China’s sea lines of communication and should be read as instrumental to the implementation of the maritime section of Beijing’s Belt and Road Initiative. This is also the opinion of the Chinese scholar Zhu Li, who sees a cognitive dissonance between China’s economic projects and India’s inclination to read Chinese intentions in highly securitized terms. You Ji argues that China’s maritime strategy is not intended to challenge India’s interests in the Indian Ocean, but rejects the idea that the latter is some sort of domain reserved for India only. There is however, in his view, a decisive element of power balance in the Chinese doctrine on the Indian Ocean. Two scenarios appear to elicit the attention of Chinese strategists: one where India takes advantage of maritime conflicts in Southeast Asia in order to strengthen its positions along the disputed Himalayan mountain borders; the other, where India provides support to the USA by indirectly weakening China’s maritime lines of supply in the Indian Ocean (Brewster, 2018). The volume edited by Khurana and Ghosal Singh (2016) shows a wide assortment of analytical assessments on this topic. These contributions typically reflect the political and strategic perspectives of their authors, with divergent evaluations of what is factually happening on the ground (or at sea) and what further lingers in the realm of narratives and storytelling. There are three factors that however emerge as particularly compelling in the power game between India and China in the area. The first factor is India’s attempt of realizing its own ‘String of Pearls’ strategy through the consolidation of its relations with some countries that are strategically located at the point of entry of the Indian Ocean, namely the island country of Mauritius, the Seychelles, Singapore, Madagascar, and Oman. Most of these relations are defined by strong cultural and historical ties. (Brewster, 2010). The second factor is India’s attempt to contain Pakistan in the Western Indian Ocean and the Persian Gulf. Here India appears to be highly concerned by the growing partnership between China and Pakistan, while the latter needs the former in order to counter India’s influence. Pakistan also tries to benefit from being one of China’s major windows to the Persian Gulf and the Middle East via the China–Pakistan Economic Corridor, which can be, on the one hand, an opportunity to boost regional trade and investments and, on the other hand, reignite territorial disputes and sovereignty issues in the contested Kashmir region.3 US and Indian anxieties about China’s maritime infrastructure development in the Indian Ocean, replete with the accusation of predatory behavior and unfair debt repayment mechanisms (Moramudali, 2020),4 are particularly high at the intersection of the US Central and Indo–Pacific competing commands. For India, unsettling the connection between China and Pakistan is also a way to consolidate the 3

The CPEC crosses through Pakistan-administered Gilgit–Baltistan territory, which is claimed by India in the frame of the wider Kashmir territorial dispute. 4 US and Indian concerns are particularly focused on the ports of Hambantota in Sri Lanka, Chittagong in Bangladesh, and Kyaupkyu in Burma, in addition to Gwadar and Djibouti.

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role of the Chabahar corridor as a safe connection and market access route between India and Central Eurasia (Hussain & Jamali, 2019). The third factor at play is the nature of the relationship between China and Iran in the context of the former Trump administration’s policy of ‘maximum pressure’ against Iran. Increased economic, financial, and trading sanctions on Iran have been imposed, ostensibly in order to gain leverage ahead of the ongoing negotiations on Iran’s nuclear program. In fact, the calculation is that the deterioration of living conditions would cause widespread protests in the country and weaken, if not causing the collapse of, the current government. Even if it has been argued that the relations between China and Iran are not so ‘special’ after all, not least as the nature of their partnership agreement is not radically different from arrangements with other parties (Calabrese, 2020), some analysts claimed that the assassination of Iranian general Qassem Soleimani in January 2020 became a test case for Chinese intentions and involvement with Iran (Lee, 2020). The assassination took place only a few days after the completion of a joint Chinese– Russian–Iranian naval drill in the Gulf of Oman (Brennan, 2019), and sparked a measured, yet firm, response from China’s Foreign Minister Wang Yi. China does not appear to favor Iran over its regional rivals, Saudi Arabia and the United Arab Emirates, instead founding its policy on the preservation of stability and the principle of non-interference (Fulton, 2020). At least in principle and on the diplomatic record.

5 Saudi Visions and the Role of India To Saudi Arabia and the United Arab Emirates, the prospect of a strengthened liaison between China and Iran is not a matter to be taken lightly. Both countries feel threatened by Iran’s regional policies and influence and have been actively involved in the civil wars of Syria and Yemen, which have widely been interpreted as Iran–Saudi Arabia proxy conflicts. Perceptions of Iran as an existential threat, the geopolitics of megaports (Ardemagni, 2018) and economic ties drive Saudi Arabia and the United Arab Emirates to court a close relationship with India, to the point of being largely oblivious to Modi’s cabinet policies that have been accused of adopting discriminatory policies and laws against India’s Muslim minority such as the Citizenship Amendment Act and the proposed National Population Register (Taneja, 2020). Issues of domestic politics never really called into question the rapprochement that began after the 2003 diplomatic initiative of then-President of India APJ Abdul Kalam in the UAE and the following talks on energy needs. The Delhi Declaration of 2006, signed by then-Prime Minister Manmohan Singh and King Abdulaziz of Saudi Arabia, and the Riyadh Declaration of 2010 marked a transition from the emphasis on migrant workers and remittances as main bilateral concerns to energy security and defense cooperation. This new trend meant a recalibration of the influence of Saudi Arabia and the United Arab Emirates on Pakistan, predicated upon Saudi support for Pakistan’s clerical institutions, religious schools, and the military apparatus. The force of Realpolitik seemingly explains why, despite leading a Hindutva-based nationalist party with a marked Islamophobic discourse, Modi’s

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cabinets managed to limit the impact of Pakistan on policy-making in the Gulf Cooperation Council and the Organization of Islamic Countries, which India was again invited to in March 2019 after a fifty-year hiatus (Khatu, 2019). Here the relevance of the aforementioned 2019 Goenka Lecture becomes obvious: foreign policy must not be held hostage by domestic issues and history, allowing India to behave as a swing state in a world order that is still in a state of flux, in order to retain some balancing potential vis-à-vis China (Subramaniam, 2019). Not even the revival of the India–Pakistan Kashmir dispute has changed so far the course of the relations between India and the countries in the Gulf region. The foreign ministers of Saudi Arabia and the United Arab Emirates paid a symbolic visit to Pakistan in early September 2019, after India’s government repealed article 370 of the Constitution and stripped Indian-administered Kashmir of its autonomy, demoting it to the status of a Union Territory directly ruled by the central government. Saudi and UAE diplomats refrained from using strong wording, let alone condemning India’s lockdown in the Vale of Srinagar. Kuwait, Bahrain, Qatar, and Oman did not even issue a statement (Kuchay, 2019). The silence of Gulf diplomats on Kashmir Muslims can be attributed to different reasons. On the one hand, India has a deeply rooted relationship with the GCC countries involving shared security and strategic interests and India’s potential as trade partner and venue for present and future investments. On the other hand, Pakistan’s refusal to provide support to the Saudi-led intervention in Yemen’s civil war was received negatively in some Gulf capital cities. The war in Yemen cannot be separated from the wider strategic confrontation for the control of sea lines of communication in the Western Indian Ocean (Ardemagni, 2018), and the containment of Iran’s sphere of influence in the Middle East. Pakistan’s reluctance to be dragged onto the battlefields of Yemen ran counter to the assumption that it would have ‘naturally’ provided manpower and military means to help the Saudiled coalition succeed. Pakistan also maintained a neutral position during the 2017 standoff between Qatar, UAE, and Saudi Arabia, and was therefore perceived by some Saudi circles as leaning too much towards Iran’s side (Kuchay, 2019). The relationship between Saudi Arabia and India is influenced by the changed relations between Saudi Arabia and Pakistan, even though the latter is still playing a role as a discreet mediator for de-escalation and diplomacy between Riyadh and Tehran (Toossi, 2019). The general situation in the Gulf region remains volatile. In Oman, the death of Sultan Qaboos in January 2020 left several questions unanswered, even if the transition process tried to project an image of continuity, while neighboring countries tried to grasp the succession as an occasion for reducing Oman’s foreign policy influence in the region (Sheline, 2020). On the other hand, the United Arab Emirates failed to achieve the status of major military and political actor they had aspired to become. Being afraid of passing as a sponsor of transnational terrorism, the UAE scaled down their support to factions involved in the Syrian civil war, and in June 2019 ostensibly withdrew from the war in Yemen, even as they continue to back the Southern Transitional Council and the Security Belt Forces, therefore preserving a privileged position in the port of Aden and in the strategically located island of Socotra (Hassan, 2019). Saudi Arabia adopted a strategic plan called Saudi Vision 2030, and is trying to pursue the diversification of its economy while adopting

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a realist approach toward international relations. In this context, India tries to expand its footprint in the Western Indian Ocean as part of its wider Indo–Pacific doctrine. Prime Minister Modi in particular tried to forge close bonds with ambitious crown princes in Riyadh and Abu Dhabi, overcome reciprocal reluctance to expand security partnerships, and challenge security apparatuses that had been associated with Pakistan in the past (Pant, 2019).

6 Conclusions The rapprochement between India and the Gulf countries apparently defies a binary logic, given the fundamentally divergent views on some domestic and transnational issues, such as Islamist proselytism, the Kashmir dispute, or the status of India’s Muslim population. Realpolitik prevails on consistency (or the obsession for consistency, as India’s Foreign Minister Jaishankar would say). Pragmatism and rapid responses in a volatile and ever-changing international environment explain how India and the Gulf countries strengthened their cooperation in multiple domains, and yet avoided to burn bridges with other countries that are at odds with their counterpart: no Gulf country is in the position to jeopardize their relationships with China while India needs to maintain a sound working relation with Iran. For the Gulf countries, the driver of their relations with India is oil, both in the sense of energy market security and projects for diversification. It remains yet to be seen what happens in the wake of the March 2020 oil price war between Saudi Arabia and Russia, and the impact of Covid-19 pandemic (Slav, 2020). For India, the strategic vision for the Western Indian Ocean revolves around a ‘Mahanian logic’ that might be “very passé” as Daulet Singh puts it (Daulet Singh, 2013) in the current geopolitical context. Finally, it remains to be seen whether China is reckless enough to be dragged into a peripheral escalation or a maritime escalation when its core interests, vital supplies, and export routes can be secured outside the Western Indian Ocean.

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References Al-Ghwell, H. (2018). India and the Gulf states are a perfect match. Arab News, December 22. Ardemagni, E. (2018). Gulf Powers: Maritime Rivalry in the Western Indian Ocean. ISPI Analysis. 321. Azhar, M. (2003). Economic co-operation between India and the United Arab Emirates in the 1990s. Middle Eastern Studies, 39(3), 127–143. https://doi.org/10.1080/0026320042000265710 Brennan, D. (2019). Iran warns U.S. its middle east dominance is over after naval drills with Russia, China. Newsweek, December 30. Brewster, D. (2010). An Indian sphere of influence in the Indian Ocean? Security Challenges, 6(3), 1–20. Brewster, D. (2014). Beyond the ‘String of Pearls’: Is there really a Sino-Indian security dilemma in the Indian Ocean? Journal of the Indian Ocean Region, 10(2), 133–149. https://doi.org/10. 1080/19480881.2014.922350 Brewster, D. (Ed.). (2018). India and China at sea: Competition for naval dominance in the Indian Ocean. Oxford University Press. Calabrese, J. 2020. China–Iran relations: The not-so-special “Special Relationship”. China Brief : 20:5, March 16. Daulet Singh, Z. 2013. China deterrence cannot come from the Navy. The Hindu, August 7. Delhi Declaration, Signed by King Abdullah bin Abdulaziz Al Saud of the Kingdom of Saudi Arabia and Prime Minister Dr. Manmohan Singh of India. (2006, January 27). 2006. Ministry of External Affairs: Government of India. https://mea.gov.in/bilateral-documents.htm?dtl/5969/ Delhi+Declaration+Signed+by+King+Abdullah+bin+Abdulaziz+Al+Saud+of+the+Kingdom+ of+Saudi+Arabia+and+Prime+Minister+Dr+Manmohan+Singh+of+India Dutta, P. (2017). Can China really encircle India with its String of Pearls? The great game of Asia. India Today, June 15. Erickson, A. (2016). China’s blueprint for sea power. China Brief : 16:11, July 6. External Affairs Minister’s speech at the 4th Ramnath Goenka Lecture, 2019. (2019). Ministry of External Affairs: Government of India. https://www.mea.gov.in/Speeches-Statements.htm?dtl/ 32038/External_Affairs_Ministers_speech_at_the_4th_Ramnath_Goenka_Lecture_2019 Fulton, J. (2020). China’s Response to the Soleimani Killing. Atlantic Council, January 6. Hassan, H. (2019). The Emiratis bit off more than they could chew. Foreign Policy, September 9. Heard-Bey, F. (1982). From Trucial States to United Arab Emirates. Longman. Hussain, M., & Jamali, A. B. (2019). Geo-political dynamics of the China–Pakistan economic corridor: A new great game in South Asia. Chinese Political Science Review, 4, 303–326. https:// doi.org/10.1007/s41111-019-00128-y Khan, M. (2020). India, Iran pledge to speed up Chabahar Port development. Inside Over, January 2. Khatu, J. (2019). India at the OIC: Has ‘History Been Made’? The Diplomat, March 5. Khurana, G., & Ghosal Singh, A. (Eds.). (2016) India and China: Constructing a peaceful order in the Indo-Pacific. National Maritime Foundation. Khurana, G. (2017). The Indo-Pacific concept: Retrospect and prospect. National Maritime Foundation, February 2. Kuchay, B. (2019). Why have Saudi Arabia, UAE failed to condemn India over Kashmir? Al Jazeera, September 12. Lee, A. (2020). The real target of the US assassination of Iranian military leader Qassem Soleimani – China. South China Morning Post, January 8. Lintner, B. (2019). The costliest pearl: China’s struggle for India’s ocean. Oxford University Press. Liu, X., & Yang, Y. (2018). Spotlight: China, Oman establish industrial park to boost bilateral cooperation. Xinhua Net, December 19. Longva, A. N. (1999). Keeping migrant workers in check: The Kafala System in the Gulf. Middle East Report, 211, 20–22. https://doi.org/10.2307/3013330 Moramudali, U. (2020). The Hambantota Port Deal: Myths and realities. The Diplomat, January 1.

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Onley, J. (2004). The politics of protection in the Gulf: The Arab rulers and the British resident in the nineteenth century. New Arabian Studies, 6, 30–92. Onley, J. (2009). The Raj reconsidered: British India’s informal empire and spheres of influence in Asia and Africa. Asian Affairs, 40(1), 44–62. https://doi.org/10.1080/03068370802658666 Osella, F., & Osella, C. (2009). Muslim entrepreneurs in public life between India and the Gulf: Making good and doing good. Journal of the Royal Anthropological Institute, 15(s1), S201–S221. https://doi.org/10.1111/j.1467-9655.2009.01550.x Pant, H. V. (2019). The reality behind India-Saudi Arabia’s growing ties. The Economic Times, November 3. Pethiyagoda, K. (2017). Supporting Indian Workers in the Gulf: What Delhi can go. Brookings Doha Center Policy Briefing. Plascov, A. (1982). Security in the Persian Gulf 3: Modernization, Political Development and Stability. Gower. Port Duqm. (2016). Port of Duqm Official. https://www.youtube.com/watch?v=0QDPotEsH-s Pradhan, P. K. (2014). India’s Relationship with the Gulf Cooperation Council: Need to look beyond business. IDSA Monograph, 37. Prime Minister’s Keynote Address at Shangri La Dialogue. (2018, June 1). 2018. Ministry of External Affairs: Government of India. https://www.mea.gov.in/Speeches-Statements.htm?dtl/ 29943/Prime+Ministers+Keynote+Address+at+Shangri+La+Dialogue+June+01+2018 Riyadh Declaration: A New Era of Strategic Partnership. (2010, March 01). 2010. Ministry of External Affairs: Government of India. https://mea.gov.in/bilateral-documents.htm?dtl/3700/Riy adh+Declaration+A+New+Era+of+Strategic+Partnership Roy, S. (2018). India gets access to strategic Oman port Duqm for military use, Chabahar-Gwadar in sight. The Indian Express, February 13. Roy-Chaudhury, R. (2018). India and the Gulf region: Building strategic partnership. India Global Business, August 23. Sand, P. (2009). United States and Britain in Diego Garcia: The future of a controversial base. Palgrave Macmillan US. https://doi.org/10.1057/9780230622968 Sheline, A. (2020). Oman’s smooth transition doesn’t mean its neighbors won’t stir up trouble. Foreign Policy, January 23. Slav, I. (2020). Saudi Arabia’s Oil Stock Gambit. Oilprice.com, April 17. Stewart, P. (2019). With an eye on Iran, U.S. clinches strategic port deal with Oman. Reuters, March 24. Subramaniam, A. (2019). The one speech that explains India’s new strategic thinking. The Diplomat, December 5. Sun, T. (Guorui), & Payette, A. (2017). China’s two ocean strategy: Controlling waterways and the new silk route. Asia Focus, 31. Taneja, K. (2020). Why Saudi Arabia and the UAE Aren’t Bothered by India’s Citizenship Amendment Act. The Diplomat, January 16. The Maritime Executive. (2019). UK Secures Naval Base in Oman. The Maritime Executive, February 21. The Special Economic Zone Authority at Duqm (SEZAD). (2015). Duqm Special Economic Zone Authority Documentary Film. https://www.youtube.com/watch?v=0YndpzU9Do8 The Straits Times. (2018). Iran signs deal with China to connect key port to rail network. The Straits Times, March 7. Todi, S. (2019). India Gets Serious About the Indo–Pacific. The Diplomat, December 18. Toossi, S. (2019). Iran is winning the battle for the Middle East’s Future. Foreign Policy, October 24. TRT World. (2017). Money talks: Oman counts on China to build Duqm. https://www.youtube. com/watch?v=__JtRuN46DI Ulrichsen, K. C. (2010). The GCC states and the shifting balance of global power. CIRS Occasional Paper 6.https://doi.org/10.2139/ssrn.2825920

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Valedictory Address by External Affairs Minister at 11th Delhi Dialogue. (2019, December 14). 2019. Ministry of External Affairs: Government of India. https://www.mea.gov.in/Speeches-Sta tements.htm?dtl/32212/Valedictory_Address_by_External_Affairs_Minister_at_11th_Delhi_D ialogue_December_14_2019

A ‘Nodal Centre’: Competing Interests in India’s Relations with ASEAN After Covid-19 Giulia Sciorati

Abstract In November 2020, India’s Prime Minister Narendra Modi reiterated what had been the key message in India-ASEAN relations for the last thirty years: namely, ASEAN continued to be at the ‘centre’ of New Delhi’s Eastern foreign policy vector. Modi’s statement came at a critical juncture for their relations, as the effects of the Covid-19 pandemic forced ASEAN to reconsider its approach to regional powers— and especially China—to the detriment of India. In this light, the chapter presents a study on the prospects of current India-ASEAN relations, adopting an interest-based approach to unpack bilateral relations. This chapter investigates the history and institutional framework that regulate India-ASEAN relations, as well as the evolution of their two chief cooperative interests—that is, trade and economic exchanges and nontraditional security cooperation. The chapter concludes that China and newfound regional multilateral frameworks of economic cooperation pose the most severe threats to the future prosperity of India’s engagement with Southeast Asia. The analysis also indicates that what is referred to as ‘Buddhist diplomacy’ and maritime security cooperation, especially in the South China Sea (SCS), remain Delhi’s major trump cards for fostering relations with ASEAN in the short term.

1 Introduction India and the Association of Southeast Asian Nations (ASEAN) share a long history that is rooted in Delhi’s relations with Southeast Asia. On the one hand, under Modi’s premiership, India has stressed its willingness to adopt a more practical approach to its relations with ASEAN by transforming its trademark ‘Look East Policy’ (LEP) into an ‘Act East Policy’ (AEP), which the country is still in the process of developing. On the other hand, Delhi is facing growing competition as the most active regional power in the sub-region: through China’s ‘Belt and Road Initiative’ (BRI) and a Covid-19-driven ‘health diplomacy’, China has been attempting to increase its status and power in Southeast Asia. While India and ASEAN still share common interests G. Sciorati (B) Department of Humanities, University of Trento, Trento, Italy e-mail: [email protected] © Springer Nature Switzerland AG 2023 S. Beretta et al. (eds.), India’s Foreign Policy and Economic Challenges, Global Power Shift, https://doi.org/10.1007/978-3-031-20270-4_13

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in the security domain, China successfully advanced its role as a major economic power in the sub-region, having been ASEAN’s biggest trade partner throughout 2019 (Datawheel, 2021). With the pandemic forcing countries all over the world to prioritise responses to the health and economic crises, ASEAN has aligned with other regional countries to conclude the eight-year-long negotiations that ultimately culminated in the establishment of the ‘Regional Comprehensive Economic Partnership’ (RCEP), a multilateral free trade agreement involving countries that collectively account for one-third of global GDP.1 However, India chose not to be part of the agreement, thus jeopardising the once shared economic and trade interests with ASEAN, which now run the risk of being put aside by Southeast Asia in favour of RCEP. As a consequence, Delhi is now asked to face both economic and political challenges in its relations with ASEAN at a particularly problematic internal juncture for the country’s government, which is struggling to address recurring Covid-19 outbreaks, a lagging economy, and maintain its regional influence in Southeast and South Asia, which constitute India’s traditional sphere of influence that is currently challenged by China and its expanding economic, political, and military ties with South Asian countries in general and Pakistan in particular. Moreover, the Sino-Indian rivalry seems to have reached a breaking point, as exemplified by the summer 2020 violent border clashes in the Himalayan region of Ladakh.2 In the following sections, the chapter will first trace the history of India’s policy approaches towards Southeast Asia and contextualise them within the country’s regional and global standing/position. The institutional framework of India–ASEAN relations, moreover, will be presented before discussing the recent changes in their shared interests which have occurred following regional political and economic developments. In the subsequent sections, particular attention will be devoted to India’s Buddhist diplomacy as a viable tool for Delhi’s short-term re-engagement with Southeast Asia. The chapter concludes by presenting the Sino-Indian competition over ASEAN and highlighting Delhi’s strengths. Conclusions summarise the main findings of this chapter and present a few policy implications.

2 From ‘Look East’ to ‘Act East Policy’: India’s Evolving Relations with ASEAN From the outset, the recent history of India–ASEAN relations has hit some bumps along the way. During the Cold War, the two sides struggled to find a point of convergence: on the one hand, India was sceptical of the creation of sub-regional multilateral organisations, which Delhi believed would not support its interests. On the other hand, Southeast Asia was wary of India’s growing exchanges with the Soviet Union (Bhattacharya, 1979). After all, although the two sides had established common non-alignment goals, India and ASEAN also seemed to side with opposite 1 2

On the RCEP see The Economist (2020). To expand on the Sino-Indian border clashes in Ladakh see Pant (2020).

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camps, with Southeast Asia edging closer to the US and India shifting towards the Soviet Union. Relations began to change under India’s Prime Minister P.V. Narasimha Rao (1991–1996), who came to be considered the promoter of India’s economic reforms. In the face of a looming economic crisis, Rao opened up the country’s internal market to foreign investors, privatised a substantial share of India’s vast public sector, and, above all, started to diversify the country’s trade regime (Gordon, 1997). Rao’s economic goals also dictated India’s approach to ASEAN and, more generally, to Southeast Asia as a whole. Having moved beyond Cold War-inspired bipolar calculations, India concluded that sub-regions were vital for its strategic national interests. As a consequence, in 1992, India became ASEAN’s ‘sectoral dialogue partner’—a role that granted Delhi a seat at the table for joint discussions in selected domains, including trade, investments, and tourism. Yet, this role proved to be short-lived as, only three years later, India became ASEAN’s full dialogue partner (ASEAN, 2020); gaining access to auxiliary ASEAN-led dialogue frameworks—such as the ‘ASEAN Regional Forum’ (ARF) and the ‘ASEAN Post Ministerial Conference’ (PMC)—which, in turn, deepened India’s commitment to East and Southeast Asia. Still, Rao’s enduring legacy to India–ASEAN relations remains the appearance of India’s aforementioned LEP in the country’s foreign policy strategy.3 Scholars identify the LEP’s first phase as spanning from 1991 to 2004, thus coinciding with the turbulent period in Indian politics between Rao and Atal Bihari Vajpayee’s governments (Haokip, 2011; Yong & Mun, 2009).4 Drawing from India’s newfound realpolitik approach, the LEP was striving to position the country’s national economy in the global economic system by copying and acquiring the support of Southeast Asian nations, many of which had already shown the ability to stimulate rapid economic development (Haokip, 2011). However, under Vajpayee’s full term as Prime Minister (1999–2004), Rao’s LEP vision was advanced, entering what can be identified as an intermediate stage between the policy’s first and the second phases.5 Indeed, India made security matters part of the rationale behind its relationship with ASEAN. On the one hand, counterterrorism measures entered Delhi’s calculations. After all, 9/11 and US President George W. Bush’s launch of the ‘Global War on Terror’ (GWOT) made India’s security dynamics more pressing given its geographical proximity to potentially unstable Islamic countries which ran the risk of radicalisation.6 On the other hand, India feared that Islamic countries in Southeast Asia—and, above all, Indonesia—could follow a similar pattern. Counterterrorism cooperation, as a result, rose to the top of Delhi’s agenda, with the LEP starting to contemplate 3

Among others see Amitav Acharya (2015) on LEP. To expand on the challenges to India’s internal politics around these years see Yadav (1999). 5 Criticism was raised on picturing the LEP as being composed of phases. Chietigj Bajpaee argues that no complete separation can be identified in-between phases. Nonetheless, as argued in the following paragraphs, critical moments can be singled out in the evolution of the policy, mainly pointing to the expansion of India’s sectors of interests, that bookend moments in LEP’s development. To expand on this issue see Bajpaee (2017). 6 On the impact of the GWOT on India’s foreign policy, see Pant and Lidarev (2018). 4

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regional power dynamics (Yong & Mun, 2009). At this stage, global terrorism was strengthening the link between India’s Muslim neighbour, Pakistan, and Islamic countries in Southeast Asia to the detriment of Delhi’s penetration in the sub-region. At the same time, the establishment of the ASEAN+3 framework—a platform of dialogue including ASEAN member states, China, Japan, and South Korea—was seen as an additional obstacle for India, especially because the ASEAN+3 platform had been proposed by China, a neighbour India looked at with growing suspicion.7 India–ASEAN relations evolved towards a critical turning point under India’s first Sikh Prime Minister, Manmohan Singh (2004–2014), who kicked off the LEP’s second phase. Under Singh, the policy underwent two major reforms: first, the eastern vector of India’s foreign policy ceased to be limited to a single sub-region—Southeast Asia—and began contemplating other actors in East Asia (China and Japan) and the Pacific Ocean (above all, Australia) (Haokip, 2011). It is worth noting that, despite India’s re-conceptualisation of the eastern vector, ASEAN continued to remain at the centre of the LEP. As stressed by India’s then External Affairs Minister Shri Yashwant Sinha (2003), for instance, ‘phase-II is characterised by an expanded definition of ‘East’ extending from Australia to China and East Asia with ASEAN as its core’. Moreover, India’s traditional economic goals were further expanded through proposals to forge new institutional links with the whole of Southeast Asia, especially stressing the benefits of potential free trade agreements. Security interests also grew and counterterrorism started to go hand in hand with sea lines’ protection objectives. In this phase, not only was India a proponent of maintaining sea lines open in its neighbourhood—which Delhi, at this point, believed to include East Africa and the Gulf region—but the country also looked at the Asia–Pacific region, which was deemed crucial for the correct functioning of trade routes crossing the Indian Ocean (Kipgen, 2020). As such, India embraced an embryonic form of an ‘Indo-Pacific concept’ later introduced and promoted by above all Japan.8 The rapid evolution of the LEP eventually led to a dramatic shift in India–ASEAN relations. In 2015, under current Prime Minister Narendra Modi’s first mandate, Delhi transformed the LEP into the AEP (IPCS, 2020). The AEP should not be considered as the complete abolition of the LEP, but rather as a complementary strategy that aims to put into practice LEP’s goals (Barua, 2020). As a result, in the last six years, the AEP has targeted specific countries in Southeast Asia in both the economic and security realms. Relations with Vietnam, Indonesia and Myanmar gained traction, thus facilitating ASEAN’s acceptance and engagement with the AEP. For example, under the policy, India and Vietnam stepped up bilateral relations and established a ‘Comprehensive Strategic Partnership’ in 2016. Two years later, Indonesia followed suit. Conversely, India’s relations with Myanmar remained primarily focused on infrastructural projects in an attempt to counterbalance China’s growing national presence (IPCS, 2020). In fact, India maintains a strong interest in Myanmar: as the two countries share a 1,500-kms-long border, Naypyidaw’s political stability is crucial for Delhi (Atmakuri and Izzuddin, 2020). Furthermore, under the banner 7 8

To expand on China’s role in launching the ASEAN+3 platform, see Cheow (2005). See Hemmings (2020).

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of the AEP, India committed to ASEAN’s Indo-Pacific vision, setting up policies devoted to developing its north-eastern states (e.g., Arunachal Pradesh and Assam) to strengthen transport and communication routes to Southeast Asia (IPCS, 2020). In conclusion, after being halted by a bipolar Cold War world order, India–ASEAN relations rapidly developed. India’s approach to ASEAN, in particular, gradually expanded from an economic-oriented to an economic- and security-oriented agenda. The LEP and the AEP shaped Delhi’s efforts to engage ASEAN and Southeast Asia: today, the two policies complement each other and make up India’s comprehensive engagement strategy. Above all, the LEP–AEP framework shows India’s opening to the Indo-Pacific concept, which currently determines cooperative and conflictual behaviours in the region.

3 Studying the Anatomy of Current India–ASEAN Relations While India’s relations with ASEAN have been characterised by openly discussing strategies, the understanding of the institutional framework that the two sides gradually established has remained somewhat limited to policymakers in both India and ASEAN countries. Yet, the tools that are employed to maintain India–ASEAN relations show a willingness to deepen their bilateral cooperation: an instance that, in turn, contradicts the assumption that India’s foreign policy has become the domain of Hindu nationalism.9 Several dimensions make up the structure of India–ASEAN relations and target specific sectors: above all, they span from diplomatic organs to people-to-people exchanges and trade, economic, and innovation partnerships, especially in the environmental and agricultural sectors. The ‘ASEAN-India Dialogue Relations’ (AIDR) remains the most comprehensive framework supporting India’s relations with ASEAN and its related regional and sub-regional groupings. The AIDR, in fact, operates on bilateral, regional, and subregional levels. With regard to bilateral relations, the ‘ASEAN-India Summit’ (AIS) has proven to be the major annual event for the advancement of relations between the two blocs (ASEAN, 2020). It is interesting to note that, throughout the years, the summit has developed a symbolic link to India’s core national holidays. Indeed, the first AIS was held in November 2002 and took place during India’s Diwali festival.10 The participation of then Prime Minister Vajpayee at the time of the festival was crucial, as it was interpreted by ASEAN representatives as a clear sign of the growing importance assigned to the organisation by India’s foreign policymakers. Similarly, the ‘ASEAN-India Commemorative Summit’ held in January 2018 in New Delhi in conjunction with India’s 69th Republic Day celebrations, was a turning point for AIDR-driven bilateral relations, as India and ASEAN signed the ‘Delhi Declaration’, a groundbreaking agreement that aimed to advance counterterrorism 9

See Wojczewski (2020). To expand on the significance of Diwali in Indian modern culture, see McKeever (2020).

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cooperation.11 Moreover, under the AIDR framework India gained access to other ASEAN-led regional and sub-regional fora, such as the above-mentioned ARF, the ‘East Asia Summit’, the ‘Mekong-Ganga Cooperation’, and the ‘Bengal Initiative for Multisectoral Technical and Economic Cooperation’ (ASEAN, 2020). When examining the diplomatic dimension of India–ASEAN relations, it is also worth mentioning the accreditation of India’s Ambassador to ASEAN as well as the establishment of a separate diplomatic mission to the organisation. While the ambassador is mainly tasked with liaising with the ASEAN Secretariat (TOI, 2021), the mission’s mandate is to transform the India–ASEAN relationship into a functioning, strategic partnership. As a consequence, the mission is mainly in charge of handling security cooperation, especially in the maritime domain, which the ASEAN–India Commemorative Summit delegations singled out as a crucial area of cooperation for the entire strategic partnership (MEA, 2021). ASEAN member states include six India-backed claimants in the South China Sea dispute with China; in particular, the Indian navy is believed to be instrumental in counterbalancing China’s expansion in the area (Brewster, 2013). Nonetheless, as previously illustrated, the economic dimension of India–ASEAN relations remained the main cornerstone of their bilateral diplomatic history. Shortly after the launch of the AIS, for instance, ASEAN and India laid the groundwork for the creation of the ‘ASEAN-India Free Trade Area’ (AIFTA), which was adopted in 2010 after seven years of negotiations. Before the RCEP was finalised in November 2020, the AIFTA had been among the largest regional FTAs, accounting for two billion people and an annual combined GDP of about US$ 5.5 trillion (ASEAN, 2015a, 2015b). While the AIFTA was only made possible by the ‘ASEAN-India Trade in Goods Agreement’, which was signed in 2009, India and ASEAN only concluded the ‘ASEAN-India Trade in Services and Investment Agreement’ in 2015 after five years of negotiations. Moreover, since 2011, the ‘ASEAN-India Business Summit’ has spurred the development of relations between India and ASEAN member states in the private sector, with the ultimate aim of expanding business-to-business cooperation (ASEAN, 2020). People-to-people exchanges are at the core of the current phase of India–ASEAN relations. Four sectors, in particular, have been chosen as outlets for this form of cooperation: education, culture and heritage, media, and think tanks. The ‘ASEANIndia Students Exchange Programmes’ and the ‘Special Course for ASEAN Diplomats’ remain the reference points for cooperation in the education sector (ASEAN, 2020). The programmes, however, do not offer study-abroad scholarships as other traditional education exchange programmes do: rather, they mainly organise short working trips for students from ASEAN countries to India to ‘create greater culture and economic understanding between the two dynamic regions of Asia and India’ (MEA, 2018), thus mobilising the two main vectors to advance bilateral cooperation across civil society: cultural and business relations. Furthermore, topics like common cultural roots and joint heritage conservation efforts have been annually emphasised at the ‘International Conference on ASEAN-India Cultural and Civilizational Links’, which exploits the historical diffusion of Buddhism and Indian culture in Southeast 11

On the ‘Delhi Declaration’ see e.g. Siyech (2018).

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Asia to deepen bilateral ties. The framing of ASEAN–India relations as a product of a common history and culture was also made possible by the development of cooperation agreements between media organisations, epitomised above all by the ‘ASEAN-India Media Exchange Programme’, whose modus operandi resembles that of student exchange programmes, sponsoring short trips to India for ASEAN-based journalists (Nguyen Xuan, 2020). Lastly, people-to-people cooperation relies extensively on exchanges between think tanks. The ‘ASEAN-India Network of ThinkTanks’, which was established in 2012, has promoted several activities to promote coordination in the realm of policymaking, especially in sectors like economic development, trade, and green technologies (MEA, 2020). During the 2012 ASEAN–India Commemorative Summit, in particular, the ‘ASEAN-India Centre’ at the ‘Research and Information System for Developing Countries’ was launched as a research centre devoted to the promotion of track II diplomacy (AIC, 2021). Over the last twenty years the institutionalised framework of cooperation between India and ASEAN has rapidly evolved, now including rich assortments of tools and vectors that mainly respond to the interests in both India and ASEAN countries. Diplomatic cooperation, in particular, has gradually become more intense and meaningful, currently combining a diversified dialogue framework and two autonomous Indian diplomatic representation bureaus. Furthermore, economic and trade cooperation increasingly relies on tools that target the public and private sectors alike with business-to-business exchanges taking centre stage. Indeed, nowadays, people-topeople cooperation lies at the core of India–ASEAN relations as several bottom-up initiatives were promoted to foster collaboration in the education, culture, media, and think tanks fields. In light of India’s recent nationalistic foreign policies and ASEAN’s economic integration with East Asia and the Pacific through the RCEP, civil society cooperation is bound to become even more prominent for the flourishing of India–ASEAN relations.

4 India and ASEAN’s Changing Mutual Interests While India and ASEAN have made a habit of relying on common trade and security interests to foster their relations, the Covid-19 pandemic has shuffled the cards, forcing the two sides to rediscuss mutual interests. Indeed, ASEAN is increasingly looking at other regional actors (like China and Australia) as viable partners to jumpstart the economies of its member states and confront the global economic recession. For its part, India is striving to promote common cooperative frameworks with ASEAN around the non-traditional security domain to open up new room for opportunities in the relations with the sub-region. Joint approaches in the counterterrorism and climate security realms remain the most promising areas of engagement.

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4.1 The RCEP Challenge to India–ASEAN Trade Relations Economic cooperation has remained the pillar of India–ASEAN relations throughout the years. Since finalising agreements on trade in goods and services and launching the AIFTA, India’s trade relations with Southeast Asia rapidly deepened at a bilateral level, too. As noted by Pralok Gupta (2020), although India’s trade in goods with ASEAN member states flourished thanks to the 2009 agreement, trade in services is still lagging, with Delhi’s exports concentrated in specific sectors and partners. Moreover, as shown in Table 1, India currently faces a substantial trade deficit with several ASEAN countries, especially large economies like Indonesia, Singapore, Thailand, and Vietnam (Datawheel, 2021). Despite a negative trade balance, India’s trade in goods with Southeast Asian markets remains crucial for the country, as it accounts for eleven per cent of Delhi’s annual trade (Gupta, 2020). Still, once the RCEP will become fully operational, India runs the risk of seeing its trade volume with ASEAN countries further decrease. Indeed, as a wide-ranging FTA between ASEAN countries, China, Japan, South Korea, Australia, and New Zealand, the RCEP has the potential to compete with AIFTA.12 Until November 2019, India had taken part in RCEP negotiations as the agreement appeared to align with Delhi’s national economic interests.13 There are several reasons for India’s decision to ultimately opt out of the RCEP. From a political standpoint, by moving India away from the agreement, Prime Minister Modi signalled his willingness to prioritise a Western-centred trade policy with the US and the EU at its centre. However, as a by-product, India now risks economic and political isolation from the rest of the Indo-Pacific region. Conversely, drafting FTAs with Western countries will be difficult for Delhi as the US and the EU have higher regulatory standards than Asian countries (including India) when it comes to trade agreements (Gupta and Ganguly, 2020). Indian domestic politics has also played a role in the country’s decision to abandon RCEP’s negotiations. First of all, the ruling ‘Bharatiya Janata Party’ and the main opposition parties found common ground in opposing the free-market economics upon which the RCEP is based (Gupta and Ganguly, 2020). Secondly, Modi has stressed the need to achieve what he calls ‘economic self-reliance’ since first coming into power in 2014.14 To this end, the public was presented with several justifications for the country’s stance towards the RCEP: above all, India’s negative balance with several RCEP signatories was presented as a major challenge against economic prosperity (Gupta and Ganguly, 2020). Delhi’s past experiences with FTAs, moreover, were identified as responsible for the decline of India’s manufacturing power as well as its de-industrialisation in crucial sectors like electronics (Kurmanath, 2019). The narrative that eventually gained the most traction with India’s civil society made a case against the lack of safeguards in previous FTAs, which had resulted in the 12

Supra note 1. Above all, India’s penetration into regional markets. 14 To expand on Modi’s conceptualisation of India’s economic ‘self-reliance’ see A. Panda (2020a, 2020b). 13

27.1

–16.5

Exports

Balance

Brunei

0.08

0.6

Cambodia

0.2

0.06

Indonesia 4.7

13.6

Laos 0.04

0.09

Malaysia 0.06

0.09

Myanmar 1

0.7

Source Author’s elaboration of data from the ‘Observatory of Economic Complexity’ (2021)

43.6

Imports

ASEAN

Table 1 India’s Trade in Goods with ASEAN in 2019 (billion US$) Philippines 1.8

0.5

Singapore 9.5

14

Thailand 4.4

7

Vietnam 5.4

7

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internal market being flooded by cheap Chinese goods at the expense of India’s small and medium-sized enterprises (Panda, 2020b). Conversely, from an economic standpoint, Modi was well aware that dismantling tariff barriers, as joining the RCEP requires, would have damaged India’s least globally competitive enterprises. Additionally, the agreement, did not include concessions for the transnational movement of service-sector professionals, which is India’s major service-related export. As Delhi still lacks a common national regulatory framework for e-commerce, India was in the uncomfortable position to open up in this domain as per the RCEP’s requirements (Gupta and Ganguly, 2020). Lastly, the farming lobby heavily affected the country’s decision-makers: competition with regional actors would have put India’s agriculture at risk, especially the dairy sector which would have inevitably suffered at the hand of advanced export-oriented economies in the Pacific region (Mukherjee, 2019). These considerations notwithstanding, India’s current situation undoubtedly risks isolating the country from regional trade partners and ties. Indeed, the RCEP was bound to include more of India’s enterprises in regional value chains and attract a vast array of foreign investments. The agreement could have helped India counter the post-Covid-19 recession by increasing its export volume to Southeast Asia and, subsequently, raising internal productivity and jobs (Bhutani, 2021). Domestic consumption could have also benefited from the RCEP as Indian consumers would have had access to cheap and high-quality products. As noted by Surupa Gupta and Sumit Ganguly (2020), entering the agreement would have secured India’s future development. Overall, both economic and political considerations influenced India’s decision not to participate in the RCEP. Such an approach marks a detachment from previous policies, as Delhi’s economic integration with Southeast Asia was traditionally prioritised. Although India is now increasingly looking at Western partners to expand trade and investment ties, the country’s security concerns (especially non-traditional security challenges) continue to be overwhelmingly in Asia.

4.2 (Still) A Common Agenda on Counterterrorism and Climate Security Although India and ASEAN’s trade interests started to diverge after the launch of the RCEP, the two sides continue to pursue a common security agenda. Non-traditional security has become particularly prominent in recent years, with counterterrorism and climate security in particular coming under the spotlight. As mentioned in the second section, joint counterterrorism efforts entered India–ASEAN relations about twenty years ago alongside the two sides’ contributions to Bush’s ‘global war on terror’ (GWOT) (Yong & Mun, 2009). Global counterterrorism cooperation notwithstanding, ASEAN had encountered several difficulties in putting forward a viable agenda for counterterrorism, as prospective common policies had to devote special

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attention to the impact on Southeast Asian Muslim communities. Indeed, Muslimmajority countries like Indonesia, Malaysia, and the Philippines pose a challenge to a multilateral practice of counterterrorism that is shared by ASEAN member states and third parties as these Muslim countries often express concerns about the compatibility of counterterrorism policies with Islam (Arabinda Acharya, 2006). The stakes are extremely high for ASEAN since a counterterrorism strategy that is perceived as anti-Islam would risk yielding the opposite result and favour the radicalisation of Southeast Asian Muslim communities.15 Moreover, in the early 2000s ASEAN was still coming to terms with the promotion of a shift from understanding terrorism as a domestic issue to treating the problem as a shared regional challenge (Sundararaman, 2004). Before the GWOT, counterterrorist activities had been the exclusive domain of the state and ASEAN had maintained its trademark ‘non-interference approach’ in the internal affairs of member states when it came to terrorism. The GWOT and, more importantly, the 2002 Bali bombings16 marked a conceptual change such that ASEAN managed to establish a framework of dialogue whereby terrorism was deemed a regional threat (Arabinda Acharya, 2006). Partly due to the way ASEAN operates and partly because counterterrorism remains ascribed to the sovereignty of national governments, ASEAN’s cooperation with India on counterterrorism never made real and tangible progress, despite remaining at the top of the official bilateral agenda. During the 2003 ASEAN–India Summit in Indonesia the two sides finalised a counterterrorism document that set the scene for further bilateral cooperation, while in 2009 under the ARF framework the two sides adopted the ‘Work Plan on Counterterrorism and Transnational Crime’.17 However, since then India and ASEAN have been unable to translate commitments to cooperation into actual cooperation on the ground: at the core of India–ASEAN counterterrorism efforts have remained trust-building activities rather than commonly held operations like information sharing or joint counterterrorism exercises. Nevertheless, in the last couple of years, India has managed to engage Southeast Asian countries on a bilateral basis, mainly thanks to the commitments taken under the ASEAN framework. These cooperative agreements aim to put the 2009 Work Plan into practice and present a valid instrument to jumpstart India–ASEAN multilateral cooperation in the short run. While counterterrorism has gained centrality in India– ASEAN relations, climate security cooperation has recently emerged and has developed more rapidly. Indeed, India and ASEAN have a common interest in reducing the effects of climate change: several studies have concluded that the Indo-Pacific region is bound to suffer the most from surge-induced floods in coastal areas shortly (Hanson et al., 2011). As a consequence, back in 2007, India and ASEAN established a ‘Green Fund’ aimed at drafting common adaptation and mitigation policies on climate change. The Fund was complemented by expert meetings and workshops to advance the strategies employed to counter climate change and climateinduced disasters. Under this framework, India and ASEAN completed two projects, 15

On the prospective impact of Covid-19 on terrorism in Asia see Sciorati (2021). For a backgrounder on the Bali bombings see BBC (2012). 17 See ASEAN (2003). 16

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accounting for the sole third-party initiatives registered in Southeast Asia to date. The first aimed at enhancing the resilience of local communities in the region and managed to establish a virtual network of partner institutions that exchange information on best practices, while the second addressed the complex issue of capacity-building in the comprehensive India–ASEAN region (ASEAN, 2015a, 2015b). Unlike counterterrorism policies, climate security has responded better to regional coordination activities, as the impending risks posed by climate change require coordinated action at the regional and global levels. Therefore, ASEAN’s role as coordinator of Southeast Asian efforts has remained unchallenged, while ASEAN member states have accepted that cooperation with third parties such as India is fundamental in order to meet climate goals. As the link between terrorism and climate-induced disasters has recently become more evident, especially in Asia, successful cooperation in the domain of regional climate security could potentially inspire spill-overs in counterterrorism cooperation, too. The April 2021 Easter bombings in Makassar, Indonesia are a case in point.18 The attacks are, in fact, representative of a latent terrorist trend that the pandemic may potentially accelerate: as India and Indonesia are currently most at risk from the terrorism-climate nexus,19 broader, practical cooperation between India and ASEAN could be beneficial to the region as a whole. Still, the two sides have shown that non-traditional security is bound to remain at the forefront of the common security agenda.

5 Buddhist Diplomacy: India’s Trump Card Although sharing a non-traditional security agenda allowed India to build stronger ties with ASEAN member states, one of the most successful tools the country has been employing to further its projection in the sub-region is Buddhist diplomacy—i.e., the exploitation of a common Buddhist heritage to achieve foreign policy objectives (Kishwar, 2018). India holds a particularly favourable position to employ Buddhist diplomacy in Southeast Asia. After all, the country’s numerous religious sites are often pointed out to corroborate Delhi’s claim as the birthplace of Buddhism. The country can also rely on the construction of its image as the ‘protector’ of persecuted Buddhist groups, reinforced by the presence of the Dalai Lama and Tibet’s exiled parliament in its territory.20 Lastly, given the variety of Buddhist strands in India, Delhi has been able to claim connections with several East and Southeast Asian Buddhist communities and, through these linkages, push the AEP (Raymond, 2020). To be sure, Buddhist diplomacy is not a modern invention, but rather a practice from the past that Prime Minister Modi, in particular, has chosen to adopt to support India’s efforts in establishing ties with Southeast Asia. Indeed, historians agree to 18

For a discussion on the bombings in Makassar see Fitriani and Naradichiantama (2021). See Sciorati (2021). 20 On the role of India in the Tibet–China dispute see Hoffmann (2006). 19

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link the launch of India’s Buddhist diplomacy to Emperor Ashoka’s practice of dharmavijaya—i.e., ‘conquest through Dharma’.21 Modi’s Buddhist diplomacy has so far been extremely successful. On the one hand, India has relied on the vast diffusion of Buddhism in Asia, which today includes about ninety-seven per cent of the world’s Buddhist population. In Myanmar and Thailand, in particular, Buddhism has contributed to forming an extremely religion-oriented national identity (Raymond, 2020). For instance, Thai Buddhist monks enjoy a special social status, which permeates everyday life.22 On the other hand, Buddhism is rooted in the concept of peaceful coexistence, which ASEAN also maintains at the core of its foreign relations (Kishwar, 2018). Buddhism, therefore, remains a formidable tool in India’s public diplomacy toolbox, which is bound to gain primacy, especially as Covid19 has had a particularly severe impact on India’s tourism and a shared Buddhist heritage could thus become a key driver for the relaunch of the tourism sector. As a diplomatic tool, Buddhism has become the trademark of Modi’s diplomatic strategy. Not only is common Buddhist heritage a traditional narrative in the Prime Minister’s political discourse, but Modi has also made a habit of reserving an entire day to pay a visit to foreign Buddhist heritage sites when conducting official engagements around Asia (Kishwar, 2018). In addition, Delhi recently exhumed new historical approaches to Buddhist diplomacy by setting up large international Buddhist gatherings. During the Cold War, then Prime Minister Jawaharlal Nehru was the first to launch these types of events, exemplified by the well-known 1952 ‘International Buddhist Conference’ (Kishwar, 2018). Following Nehru’s example, Modi promoted the organisation of the 2011 ‘Global Buddhist Congregation’, the first conference of its kind held in India in over fifty years. Four years later, the Prime Minister travelled to Japan to make the opening remarks at the ‘Hindu-Buddhist Initiative on Conflict Avoidance’, which marked a crucial moment for India’s Buddhist diplomacy in Asia as it presented a common basis between Hinduism and Buddhism, thus solving the two doctrines’ traditionally conflictual relationship and starting a dialogue with Hindu and Buddhist foreign stakeholders. India’s Buddhist diplomacy agenda became evident in 2016 when the ‘5th International Buddhist Conclave’ in Varanasi, India included business meetings between international and domestic tour operators from several ASEAN countries (Raymond, 2020). ASEAN has proven to be instrumental in India’s promotion of Buddhist tourism, especially in light of the Memorandum of Understanding on tourism cooperation signed by the two sides and the two annual working group meetings for the development of the tourist sector that India and ASEAN hold. Despite hosting several Buddhist heritage sites, India hosts few annual Buddhist tourists, while Myanmar and Thailand remain prime destinations (Bhonsale, 2019). Thanks to ASEAN’s mediation, however, India has stepped into tourism cooperation with BIMSTEC countries: the initiative is indeed very receptive to a Buddhist-oriented coordinated tourist strategy as it includes four Buddhist majority countries—i.e., Bhutan, Myanmar, Sri Lanka, and Thailand. 21 22

To expand on the dharmavijaya see Rattini (2019). Background interview conducted by the author (Thai anonymous expert, 2019).

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Conclusively, although India and ASEAN relations recently experienced slowdowns in traditional cooperative sectors such as trade and economic exchanges because of the RCEP, the two sides can still rely on a stable alignment when it comes to cooperation in non-traditional security issues such as terrorism and climate change. Although cooperation in these domains evolved along institutional and bilateral lines, India is still looking for ways to increase its international projection and facilitate the development of a wider multilateral cooperative agenda. In recent years, India has thus turned to its Buddhist heritage as a tool to raise its standing with Southeast Asia. Through the combination of high-level diplomacy (primarily via the mediation of Prime Minister Modi) and religious tourism, India was successful in using Buddhism to advance its foreign policy agenda to the detriment of China’s, whose regional projection remains at the core of India’s foreign policy concerns.

6 Sino-Indian Rivalry in Southeast Asia As argued in this chapter’s previous sections, after preliminary mutual distrust driven by Cold War calculations, India and Southeast Asia have developed an extensive framework of cooperation that spans from the economic to the security sectors and that operates through several tools, above all trade, people-to-people exchanges, and public diplomacy. While cooperation between the two sides recently gaining momentum, China’s strategic interests in Southeast Asia have become a challenge to India’s political and economic interests in and interactions with Southeast Asia. Since 2013, through the BRI, China has been tightening economic ties with Southeast Asian countries at the expense of other regional powers that were attempting to expand in the sub-region, namely India and the US. Although Delhi and Washington have joined forces with Tokyo and Canberra under the banner of the ‘Quadrilateral Security Dialogue’ (Quad)—a multilateral institutional framework set to counterbalance China’s presence and influence in South and Southeast Asia23 —over the last seventeen years, the BRI has allowed the flow of no less than $US 192 billion in Chinese investments and construction projects in the sub-region (AEI, 2021). Moreover, as highlighted in section three, the RCEP weakens the Quad’s efforts: on the one hand, the agreement opens new cooperative channels for China in Southeast Asia; on the other hand, Australia and Japan, two Quad members, have also entered the RCEP. Despite China’s BRI-enabled growing economic penetration across Asia, India and Southeast Asia maintain a strong connection in the maritime security realms, with both sides striving to preserve the openness of sea lines in the Indo-Pacific region (Egberink & Putten, 2010). China’s operations in the SCS, in particular, have facilitated the development of a convergence of interests between India and ASEAN member states. The SCS disputes with China remain at the centre of Southeast Asia’s security concerns. On top of its wealth of underwater energy resources like 23

On the Quad, see Vanak, Souders, and del Mazo (2021).

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oil and gas, the 3.5 million-square kilometre area is located at the crossroads of some of the world’s busiest shipping routes. The SCS is also extremely rich in fish and, as a consequence, it supports fisheries around the region. China claims control and indeed sovereignty over in essence the entire SCS, grounding its demands in history. Indeed, China contends that as its sovereignty had not been challenged by neighbouring countries in the past, Beijing has a right to consider the SCS its de facto exclusive domain (Moss & Page, 1999). Even during the 2020 spring global lockdowns, China continued to expand in the area, establishing new administrative divisions on contended islets and reefs (Parameswaran, 2020). Brunei, Indonesia, Malaysia, and the Philippines, four ASEAN member states, are all contenders in the SCS dispute, thus putting ASEAN on the frontline. Although India is not directly involved in territorial disputes in the SCS, Delhi managed to use the issue to its advantage. Indeed, by projecting an image of a responsible naval power vis-à-vis China, India started to engage bilaterally with several Southeast Asian countries, engaging partners in different operations such as joint exercises, port calls, military training, and coordinated patrols (Amitav Acharya, 2017). At the multilateral level, the Indian navy has also been able to advance its position. India was among the founding members of the 2012 ‘Expanded ASEAN Maritime Security Forum’ and it stepped up humanitarian assistance and disaster relief operations following the 2004 Indian Ocean tsunami and the 2008 Myanmar cyclone (Jha, 2015). Maritime security and China-Southeast Asia competition in the SCS are two crucial sectors for India to build stronger relations with ASEAN and counterbalance China’s unilateral and unlawful territorial expansionism in the South China Sea. Although China undoubtedly will remain the main trade and investment partner of many countries in Southeast Asia, ASEAN member states have already raised concerns about the sustainability of Beijing’s financing, while bilateral relations with China have become more tense in several countries. For instance, during the 2018 Malaysian elections, BRI infrastructural projects were suspended after discussions and controversies related to relations with China became an electoral campaign issue (Han, 2018). Therefore, India can still compete with Chinese expansion and consolidate its position in Southeast Asia by leveraging on the growing areas of friction between Beijing and ASEAN member states, especially as they are mostly linked to the maritime domain, in which Delhi has developed an extremely positive record. India could—in coordination with the US and Australia—become a driving force in the Quad as a maritime security provider in Southeast Asia.

7 Conclusions The Covid-19 pandemic has placed the traditional areas of cooperation between India and ASEAN under discussion. Indeed, both sides reacted differently to the health and economic crises as a result of the pandemic: ASEAN, in particular, has prioritised trade relaunch and export market diversification to support economic recovery around

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the region. Such a strategy has simultaneously created a distance between India and ASEAN’s traditional common areas of interest while facilitating rapprochement between Southeast Asia and China. For its part, despite presenting a competing narrative that pictured the country’s pharmaceutical sector as the regional go-to in terms of vaccine components, Delhi has chosen not to step up economic cooperation with the rest of East and Southeast Asia and the Pacific region, opting out of the RCEP. However, as argued in section four, Southeast Asia’s participation in the Chinacharged RCEP poses a threat to the future development of India–ASEAN relations. The Sino-Indian competition in Southeast Asia risks being further exacerbated by India’s inability to compete in full with China because of national economic isolation and a Quad weakened by Japan and Australia’s participation in the RCEP. In conclusion, cooperation in counterterrorism and climate security will undoubtedly remain a common priority for India and ASEAN, especially in light of the UN Sustainable Development Goals commitments taken on by both sides, Delhi can still engage with ASEAN by leveraging on those common areas of interest in which China is less competitive. First, India’s Buddhist diplomacy has already proven to be extremely successful in ASEAN’s Buddhist-majority countries (i.e., Myanmar and Thailand). As mentioned above, proposing joint activities targeting Buddhist tourism could then be particularly beneficial for India–ASEAN relations after the pandemic, while also representing a viable way to foster tourism, which remains one of the worst-hit economic sectors. In this domain, India can still propose to assume a leading role. Second, territorial disputes in the SCS remain the most serious area of contention between China and several ASEAN member states. ASEAN repeatedly demonstrated the importance the organisation gives to maritime security and the support it reserves for the maintenance of open sea lines in the South China Sea. China’s assertiveness and territorial expansionism in the SCS have therefore been met by ASEAN member states with growing concerns. By building a positive reputation throughout the years, also thanks to participating in the Quad, the Indian navy can now become a viable asset to Delhi’s post-pandemic relations with ASEAN. Although India and ASEAN enjoy a growing comprehensive framework of institutional cooperation, India should devote resources to strengthening bilateral relations with ASEAN member states, especially in the security domain. Delhi has been successful in stepping up capacity and trust-building cooperation at the bilateral level, while under the ASEAN umbrella relations have mostly stagnated at the dialogue level. By first focusing on developing cooperation at the bilateral level, India will then be able to approach ASEAN member states in multilateral fora with greater political capital at its disposal and increase its chances of advancing institutional cooperation in practical terms.

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India’s Responses to the Belt and Road Initiative: A Case Study of Indo-Pakistani Relations Filippo Boni

Abstract India’s relations with Pakistan have been fraught with tensions ever since the partition of the Indian sub-continent in 1947. The two countries have fought three wars, and there have been countless clashes along the Line of Control. Since 2013, an additional element of strain has entered the bilateral ties between the two countries: the China–Pakistan Economic Corridor (CPEC). The latter is the “flagship project” of China’s Belt and Road Initiative, and it has been vocally opposed by India ever since it was first announced in 2013. Drawing on interview data, triangulated with a host or other primary and secondary sources, this chapter outlines India’s concerns around the CPEC and analyses India’s responses to the economic corridor against the backdrop of the wider trajectory of India’s foreign policy. In particular, the chapter dissects the Modi government’s responses to CPEC, with a focus on the development of the port of Chabahar in Iran, and on India’s relations with Gulf Cooperation Council countries. The conclusions provide an evaluation of these policies in the context of Indo-Pakistani relations. Keywords India–Pakistan relations · India and Belt and Road Initiative · India and CPEC · Chabahar and Gwadar

1 Introduction “Connectivity with the neighbouring countries is India’s priority. We welcome the connectivity projects which are sustainable and efficient and which respect territorial integrity and sovereignty of the countries” (The Hindu, 2018). With these words pronounced as part of his address at the Shanghai Cooperation Organisation’s (SCO) summit in the Chinese city of Qingdao in June 2018, Prime Minister Narendra Modi reaffirmed India’s objections to China’s Belt and Road Initiative (BRI), as well as its plans for regional connectivity in South Asia and beyond. The not so veiled critical message was directed at the China–Pakistan Economic Corridor (CPEC), the F. Boni (B) Department of Politics and International Studies, The Open University, Milton Keynes, UK e-mail: [email protected] © Springer Nature Switzerland AG 2023 S. Beretta et al. (eds.), India’s Foreign Policy and Economic Challenges, Global Power Shift, https://doi.org/10.1007/978-3-031-20270-4_14

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“flagship project” of the Belt and Road Initiative and one of the key elements of strains in an already tense bilateral relationship between India and Pakistan. The ties between the two South Asian neighbours have been characterised by mistrust and conflict ever since the partition of the Indian sub-continent in 1947. During the last 73 years, the two countries have engaged in three full-scale wars (1947–1948, 1965 and 1971), one “half-war” in Kargil (1999) and almost daily skirmishes along the Line of Control (LoC). Every potential breakthrough—Indian Prime Minister Atal Bihari Vajpayee’s visit to Lahore in 1998, Modi’s surprise meeting in the same city with Nawaz Sharif on 25 December 2015, only to name a few—has been met by significant setbacks in the immediate aftermath. Between 2016 and 2019, in particular, the most notable incidents were the ones in Pathankot on 2 January 2016, in Uri on 18 September 2016 and in Pulwama on 14 February 2019, which brought the two countries with nuclear warheads to the brink of war yet again. But another key development in the last few years, alongside the dynamics pertaining to the contested territory of Jammu and Kashmir, has been the exponential growth of China’s interests in South Asia. The latter represents one of the key hubs for the BRI since it includes two, out of the total six, economic and transportation corridors outlined in the document “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st Century Maritime Silk Road”, jointly produced by China’s National Development and Reform Commission, the Ministry of Foreign Affairs and the Ministry of Commerce (National Development and Reform Commission et al., 2015). The two South Asian initiatives, CPEC and the Bangladesh China India Myanmar corridor (BCIM), epitomise the political and economic implications as well as attitudes towards the BRI that emerged in South Asia. Pakistan was one of the first countries to join the BRI and the CPEC is perhaps the most important of the investment corridors for China’s infrastructure financing through the BRI. With at least $25 billion in total investment thus far, the CPEC encompasses the full spectrum of infrastructure projects, including roads, ports, power plants, and fiber optic cables (Adeney & Boni, 2021). The BCIM instead has stalled following India’s opposition to the initiative and New Delhi’s reservations regarding Beijing’s extending footprint in the region. Overall, the BRI has become part of the Indo-Pakistani rivalry in the Indian sub-continent, and it is therefore important to investigate this further, in order to understand the evolution of India–Pakistan relations in the past few years. In doing so, this chapter argues that India has deployed a two-fold strategy towards the CPEC: on the one hand, as a way to balance a growing Sino-Pakistani partnership in the Arabian Sea, Modi has tried to boost India’s relations with Iran, particularly between 2016 and 2018. Such an attempt, while continuing along a path traced by previous governments, has been mostly reactive to the development of CPEC and Gwadar, and it has encountered a number of stumbling blocks, deriving from Iran’s close ties with China as well as from the US sanctions, which undermined India’s efforts to increase its sway in the region. On the other hand, Modi has been very proactive in pursuing closer ties with the Gulf countries as a way to drive a wedge between Pakistan and some of its main supporters on the oil-rich Arabian Peninsula. While economic considerations were certainly one of the drivers behind the Bharatiya Janata Party (BJP) government’s engagement with the Gulf, and the United Arab

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Emirates (UAE) and Saudi Arabia in particular, wider geopolitical considerations aimed at weakening the links between Pakistan and the Gulf have also been at play. Since Modi came to power in 2014, there has been a vibrant academic debate around the question of how new Indian foreign policy under Modi’s Prime Ministership was, including, or indeed above all, India’s policies towards Pakistan. On the one hand, there have been proponents of what can be labelled as the “continuity argument”, according to which India’s foreign policy has largely been in line with that of the previous governments (Basrur, 2017; Hall, 2019; Gupta et al., 2019; Rajagopalan, 2020). According to Ian Hall, “Modi’s government did less to change the direction of Indian foreign policy, its foundational assumptions and key practices, than might be suggested by all the drama and noise it generated” (Hall, 2019: 17). This is also echoed by Rajesh Basrur, who noted how “foreign policy under Modi picks up from where his predecessors left off and is characterized by essential continuity” (Basrur, 2017: 9). On the other hand, scholars have been suggesting that, contrary to the widely shared view that there has been no so-called “Modi-fication” of India’s foreign policy since the BJP came to power in 2014, Modi has in fact changed India’s outlook on a number of issues, including relations with the US (Chellaney, 2014; Raja Mohan, 2015). Finally, there are those who argue that notwithstanding an overall continuity, there have been some gradual changes in one particular area, namely that of building coalitions with regional and global partners to advance India’s economic and strategic interests (Bajpai, 2017). As Sumit Ganguly lucidly stated, while the fact that Modi has ended his country’s “formal commitment to nonalignment does constitute a significant departure from the past”, he also notes how “the vast majority of the initiatives that the Modi administration has undertaken constitute a deepening and broadening of policies that it had inherited” (2017: 140–141). With regard to Modi’s Pakistan policy more specifically, the vast majority of analyses have focused on the responses that the Indian government has provided to the Pathankot, Uri and Balakot attacks, thereby highlighting how Modi has been assertive in his bilateral responses to Pakistan while simultaneously seeking to build a coalition of states opposing Pakistan’s Kashmir policy (Bajpai, 2017; Gupta et al., 2019). Less attention—a gap that this chapter fills—has been devoted to analysing India’s responses to CPEC, often treated as part of the wider BRI issue or within the framework of Sino-Indian relations. Focusing on CPEC to understand the evolution of Indo-Pakistani relations over recent years is an ideal springboard to understand both India–Pakistan relations, as well as wider trends in Indian foreign policy, for a number of reasons: first, the centrality of CPEC in India’s strategic calculus cannot be emphasised enough. A survey of India’s strategic community conducted in December 2018 found that 73 per cent of respondents identified CPEC as a major security challenge for India (Jaishankar, 2019). Ever since it was officially launched during Chinese President Xi Jinping’s visit to Pakistan in 2015, India has been very vocal in raising its concerns regarding the CPEC. Second, India’s objections and concerns regarding the China–Pakistan Economic Corridor are three-fold, and span across economic and security motivations that are representative of wider trends in the relationship. To start with, according to policymakers in New Delhi, CPEC passes through GilgitBaltistan, which is part of the wider Kashmir issue. This was the main reason why

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India did not join the BRI summits in 2017 and 2019 and it has boycotted the initiative ever since. In 2017, then Indian Foreign Secretary Subrahmanyam Jaishankar, very clearly stated that, in New Delhi’s views, “CPEC violates Indian sovereignty because it runs through Pakistan-occupied Kashmir (PoK)” (Indian Express, 2017). India perceives the economic corridor going through Pakistan as impinging on its sovereignty and territorial integrity. As Jabin T. Jacob noted, “the most commonly held opinion in India is that China has not tried to strike a balance between India’s and Pakistan’s interests” and that the long-standing military partnership between the two countries creates suspicion within India about China’s motives behind the BRI (Jacob, 2017: 82). In addition to this, New Delhi has long-feared that the port of Gwadar, the starting point of CPEC in the Pakistani province of Baluchistan with immediate access to the Arabian Sea, could be developed as a Chinese naval base, thereby enabling Beijing to gain a military footprint close to India’s territorial waters as well as to the Strait of Hormuz, which is crucial for India’s shipping lanes. Finally, India is concerned that China’s support for Pakistan may embolden it to be adopt an increasingly confrontational approach (LSE South Asia Summit, 2018). Drawing on interview data, triangulated with a host or other primary and secondary sources, the chapter proceeds by first analysing India’s interests in the port of Chahbahar and the development of ties with Iran, before moving on to assess New Delhi’s “Act West” policy, articulated around building strong ties with Gulf countries.

2 India’s Interests in Chabahar: Balancing Gwadar, Accessing Afghanistan One of the key areas in which the response to CPEC has been articulated revolves around India’s involvement in the development of the port of Chabahar, in the Iranian region of Sistan-Baluchistan, bordering both Pakistan and Afghanistan. While the Indian interest in the port well predates the advent of Modi—it was in the 1990s that Indian firms were first involved in developing the port—it was only since China’s inroads in South Asia, and Pakistan in particular, that India found a renewed interest in Chabahar. New Delhi’s calculations around the port can be ascribed to three main factors: balancing the China-operated port of Gwadar, from which Chabahar is distant only 72 kms; securing vital shipping lanes across the Strait of Hormuz; bypassing Pakistan to get access to Afghanistan and Central Asia (Boni, 2021). As an analyst at the Islamabad Institute of International Studies aptly remarked, “the geo-strategic importance of both these ports is their most significant feature” since both Chabahar and Gwadar “are located at the crossroads of energy-trading route” and they could also be outposts for “surveillance on activities in the Arabian Gulf and the Indian Ocean” (Khetran, 2018). China’s expanding presence in India’s periphery and immediate neighbourhood represents a major strategic concern for India. The CPEC epitomises the SinoPakistani entente which, notwithstanding a gradual expansion into the economic

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domain in recent years, still has a security orientation at its core (Boni, 2019a). The starting point of the Pakistani corridor is the port of Gwadar, situated in Pakistan’s Balochistan province, on a hammer-head-shaped peninsula on the Arabian Sea. The Gwadar port project, very much like Chabahar, long predates the BRI, and it has been in the making since early 2000.1 However, since the control of the port was handed over to China in 2013, Gwadar came again under the spotlight for its potential use as a naval base for the People’s Liberation Army Navy (PLA-N), a claim denied both by Pakistan and China. In an interview conducted with a former commander of the Pakistan Navy, the retired officer argued that “Gwadar is definitely a commercial port. For the time being we don’t see any activity related to military use or construction of such facilities”, adding that “Pakistan also has other ports on its coastline which can be used for military purposes” (Interview with the author, July 2018). However, India sees the development of Gwadar as another “pearl” in the “string” that China is building to encircle India.2 Overall, China’s presence in Gwadar, and the development of the port, raise serious concerns in New Delhi as the possibility of a Chinese military presence in Pakistan and in close proximity to the Strait of Hormuz, holds the maximum strategic relevance for India. To counterbalance China’s presence in Gwadar, there has been a progressive escalation of India’s interests in Chabahar since Modi came to power in 2014. To mark some discontinuity with the previous United Progressive Alliance (UPA) government, Modi was the first Indian Prime Minister to visit Iran after a hiatus of 15 years. During his official visit on 22 and 23 May 2016, the two countries signed a deal for India to develop the port of Chabahar, as well as a trilateral transit agreement with Afghanistan, enabling Indian exports to reach Afghanistan via Iran (Hindustan Times, 2016).3 Although later that month the Iranian Ambassador to Pakistan Medhi Honerdoost left a door open to China and Pakistan, by welcoming any Chabaharrelated investments coming from “Pakistan, our brotherly neighbours and China, a great partner of the Iranians and a good friend of Pakistan”,4 India’s involvement in Iran was largely interpreted as a successful move on Modi’s side, to boost relations with Iran and expand India’s regional influence (Haider, 2016; Joshi, 2016). 1

For a discussion of the evolution of the port of Gwadar see Boni, Filippo (2016) “Civil-military relations in Pakistan: a case study of Sino-Pakistani relations and the port of Gwadar”, Commonwealth and Comparative Politics, 54(4): 498–517. 2 In addition to Gwadar, China has also invested in the ports of Hambantota in Sri Lanka, Kyaukpyu in Myanmar and Chittagong in Bangladesh, as well as establishing its first overseas military base in Djibouti. For an assessment of China’s investment in ports, see: Jordan Calinoff & David Gordon (2020) Port Investments in the Belt and Road Initiative: Is Beijing Grabbing Strategic Assets?, Survival, 62:4, 59–80, https://doi.org/10.1080/00396338.2020.1792134. 3 The joint statement issued after the visit, including the details of the MoUs signed, is available at: Ministry of External Affairs, “India—Iran Joint Statement—“Civilisational Connect, Contemporary Context” during the visit of Prime Minister to Iran”, 23 May 2016, https://www.mea.gov.in/bil ateral-documents.htm?dtl/26843/India__Iran_Joint_Statement_quot_Civilisational_Connect_Con temporary_Contextquot_during_the_visit_of_Prime_Minister_to_Iran. 4 The Chinese firm Shanghai Zhenhua Heavy Industries Co. Ltd. (ZPMC) won the auction for supplying cranes to India Ports Global Private Limited (IPGPL), which is developing the Chabahar project (Pant, 2018).

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The strategic competition between India and Pakistan in the Iranian and Pakistani Baluchistan region, where the ports of Chabahar and Gwadar are located, came to the fore on 3 March 2016 when Kulbhushan Jadhav, a retired Indian Navy officer, was captured in Pakistan’s Balochistan. A few days later, Pakistan claimed that Jadhav was a spy, a claim India has denied. His arrest, Islamabad maintained at the time, was the ultimate proof of India’s efforts to destabilise Balochistan. According to the Pakistani Senator Mushahid Hussain Syed, “there are forces who do not want this cooperation [with China] to move forward, they try to sabotage it. They do it in Baluchistan, they do it in other parts. Those forces are regional forces and they have proxies within Pakistan, because the people of Pakistan want the close friendship with China, but those which are inimical to that they are using local proxies” (Interview with the author, Islamabad, February 2015). Further proof, in Pakistan’s view, of India’s meddling in Balochistan came when Prime Minister Modi, during the independence day speech in August 2016, made an unprecedented move by making a direct reference to Balochistan. In his words: “I want to greet and express my thanks to some people. In the last few days, people of Balochistan, Gilgit, Pakistanoccupied Kashmir have thanked me, have expressed gratitude, and expressed good wishes for me” (Haidar, 2016). Similarly, the then Indian Ambassador and Permanent representative to the UN, Ajit Kumar, echoed the Prime Minister’s words at the UN Human Rights Council in September 2016, by accusing Pakistan of being the country that “has systematically abused and violated the human rights of its own citizens, including in Balochistan” (Ministry of External Affairs, 2016). These remarks were evidence of the importance that Balochistan has in India’s strategic calculus, and their relevance can also be noted by some of the responses to these statements that came from Beijing. One of the most prominent ones was from Hu Shisheng, Director of the South Asia Program at the China Institutes of Contemporary International Relations (CICIR), who noted how Chinese scholars were “deeply disturbed by these remarks”, adding that if India was going to become a factor disrupting the development of CPEC, “China and Pakistan could have no other way but take united steps” (Times of India, 2016). As the Sino-Pakistani partnership was strengthening as a result of the CPEC investment, the BJP government continued its efforts to develop the port of Chabahar, taking advantage of the window provided by the suspended US sanctions on Iran. To this end, in December 2018, state-owned India Ports Global Limited (IPGL) was formally handed over control of operations at Chabahar. However, little progress was made both at the port and on the railway connecting the maritime hub with Afghanistan. Although the US administration under Donald Trump has given India the “Afghanistan reconstruction” exception under Section 1244(f) of Iran Freedom and Counter-Proliferation Act (IFCA), in July 2020 Iran reportedly started working on the Chabahar-Zahedan railway project (the first stretch of the railway line connecting Chabahar to Afghanistan) and India has not contributed to this project because of the lack of clarity on whether the railway project will attract US sanctions or not, and also because Iran mentioned India’s non-performance on contracts as a reason to exclude New Delhi (Katzman, 2020; Roy, 2020). Other important setbacks in India’s Iran policy came in 2020. First, in January, the Gwadar port

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officially started taking cargo under the Afghanistan–Pakistan Transit Trade Agreement (APTTA), marking a first in sea trade between the two countries. Since April 2020, Afghanistan was granted permission for the transit trade of sugar and wheat, while trucks carrying fully sealed consignments will only be allowed to go to the neighbouring country (Hanif, 2020). This was an important development as one of the rationales behind developing Chabahar was to remove the monopoly of Afghan trade from the port of Karachi. By providing an additional port, Gwadar aims to gain an advantage over Chabahar in terms of trade relations with Afghanistan. When asked about competition between the two ports, a former Pakistani Navy official noted that “Chabahar competes with Gwadar for access to Central Asia but Gwadar has an edge when it comes to access to China which Chabahar can’t compete” (Interview with the author, July 2018). China has clearly put its weight behind using the port of Gwadar, and it has encouraged also Afghanistan to do so, despite fraught relations between Islamabad and Kabul over the past few years (Aamir, 2020). Another major development occurred in July 2020, when the New York Times reported about a draft economic and security agreement between Iran and China (Fassihi & Myers, 2020). One of the primary concerns for Indian policymakers has been the potential military and security component of the renewed ties between Beijing and Teheran. As reported by the New York Times, the draft agreement calls for “joint training and exercises, joint research and weapons development and intelligence sharing”. This, coupled with the above mentioned fears about the development of Gwadar as a potential naval base for China’s navy, and with the uncertainty deriving from US sanctions imposed onto Iran, are factors that have significantly affected the Indo-Iranian partnership over Chabahar. As India’s position in, and relations with, Iran weakens, the proposed Sino-Iranian deal is likely to strengthen Pakistan’s position in the regional strive for influence with New Delhi. One of the key areas in which Pakistan is likely to gain an advantage is vis-à-vis militancy in Balochistan for which, as we have seen in the previous part of this chapter, Islamabad sees New Delhi as playing a key role in harbouring militants operating across the shared border between Pakistan and Iran. Despite an increased cooperation between Pakistan and China in recent years aimed at protecting CPEC projects (Boni, 2019b), an attack on the Chinese consulate in Karachi in November 2019, and one on the Pakistan Stock Exchange (PSX), which in 2016 sold 40 per cent of strategic shares to a Chinese consortium, demonstrate how the security situation still remains a concern. With China’s greater role in Iran, and the latter’s potential inclusion in CPEC, is likely to increase the ability to track and monitor militant activity across the porous border between the two countries (Jamal, 2020). In evaluating India’s response to CPEC through the development of the port of Chabahar, this section of the chapter has foregrounded two key aspects: first, India has adopted a reactive approach to the development of CPEC and the port of Gwadar. As Darshana Baruah rightly noted, “India often has found itself caught up in responding to the latest developments” and it has often taken a “reactionary approach to Beijing’s connectivity projects in the region” (2018: 15). Second, the analysis presented here has emphasised the main structural challenges that India has been facing while engaging the Pakistani port of Gwadar through the development of

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Chabahar, namely Iran’s close ties with China and US sanctions which significantly undermined India’s efforts to increase its sway in Iran.

3 India’s “Act West”: Cutting Pakistan’s Ties with the Gulf If we extend the picture of India’s engagement with Iran to the countries on the Arabian Peninsula, we find evidence of both continuities with the engagement started under Modi’s predecessors, as well as incremental changes that Modi has tried to bring about since he took office in 2014. Against such backdrop, there is clearly a Pakistan angle in the motivations behind India’s growing engagement with the Gulf, as the ensuing parts of this section will document in greater detail. The speech at the 2015 Raisina Dialogue by then Indian foreign secretary Jaishankar provided a blueprint to understand continuity and change in this policy. In his words, “the western [policy] is relatively more recent conceptually, even if India has had a historical presence in the Gulf” and he also hinted at a more proactive role that India was willing to play: “the point, however, that I wish to emphasise is that we are no longer content to be passive recipients of outcomes” (Ministry of External Affairs, 2015a). The foundations of the policy of engagement with the Gulf were laid under the UPA regimes (2004–2009 and 2009–2014) that undertook a policy of maintaining close ties with a number of countries that were at loggerheads with each other, most notably Iran and Saudi Arabia. While Modi has essentially continued on the path taken by previous governments, he “has energetically sought to bolster” ties with a number of countries on the Arabian Peninsula (Ganguly, 2017: 139–140). To this end, Modi has visited the Gulf Cooperation Council (GCC) countries nine times between 2014 and 2020, including three visits (2016, 2018, 2019) to the UAE. This is in stark contrast with his predecessor Manmohan Singh (2004–2014) who made only three visits in ten years to GCC countries, and who had never been to the UAE as Indian Prime Minister. Economic and energy ties were important drivers behind Modi’s engagement with the Gulf. The UAE and Saudi Arabia are India’s third and fourth largest trading partners, and Saudi Arabia is the second exporter of crude oil to India. In addition, according to official figures from the Ministry of External Affairs, there are 8.5 million non-resident Indians working in the Gulf, who in 2018 sent a total of $78.6 billion to India (Ministry of External Affairs, 2018; World Bank, 2019). At the same time, Modi’s boost to India’s relations with the Gulf stood for an attempt to put Pakistan under pressure on a number of fronts, including with some of its stronger supporters in the GCC. This came at a critical juncture in Pakistan’s political and economic history, on which the Indian government tried to capitalise. The 2018 elections saw the emergence of a new government in Pakistan, with cricketerturned-politician Imran Khan becoming the Prime Minister. The importance of GCC countries for Pakistan at this critical juncture was not only demonstrated by the fact that Imran Khan made his maiden foreign visits to Saudi Arabia (18–19 September 2018) and to the UAE (19 September), but also by the fact that within the first four months of beginning his term as Pakistani Prime Minister, Imran Khan visited Saudi

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Arabia and the UAE twice and China once. High on the agenda of those official visits was Pakistan’s dire financial situation, as the new leadership in Islamabad was trying to avert a balance of payments crisis stemming from a large current account deficit. Eventually, the UAE agreed to a $US 3 billion loan package and Pakistan secured the same amount from Saudi Arabia, with the latter also providing a similar sum every year in oil supplies on deferred payment for three years (Reuters, 2019). CPEC was at the centre of debates under the new government, with particular reference to the terms of the deals that had been negotiated by the Pakistan Muslim League-Nawaz (PML-N) government with their Chinese counterparts over previous years. It is against such backdrop that Modi and his government have tried to put Pakistan under increasing pressure on multiple fronts. As part of what Kanti Bajpai has termed the “Act West” policy (Bajpai, 2017: 77), the most visible manifestation of India’s desire to limit Pakistan’s influence in the region, and to drive a wedge between Islamabad and its supporters on the Arabian Peninsula, with the UAE and Saudi Arabia at the top of the list, can be found in the joint statements issued at the end of Modi’s visits. Almost invariably, the official texts included a reference to terrorism and it is also possible to notice a progressive escalation in the content of these statements, thereby providing evidence of India’s growing partnership with these countries. In the first one, issued at the end of Modi’s visit to the UAE between 16 and 17 August 2015, the two sides “denounce and oppose terrorism in all forms and manifestations, wherever committed and by whomever” and they called “on all states to reject and abandon the use of terrorism against other countries, dismantle terrorism infrastructures where they exist, and bring perpetrators of terrorism to justice” (Ministry of External Affairs, 2015b). In a similar fashion, according to the statement published at the end of Modi’s visit to Riyadh on 2 and 3 April 2016, both countries “called on all states to reject the use of terrorism against other countries; dismantle terrorism infrastructures where they happen to exist and to cut off any kind of support and financing to the terrorists operating and perpetrating terrorism from their territories against other states; and bring perpetrators of acts of terrorism to justice” (Ministry of External Affairs, 2016). The statement during Modi’s February 2018 visit to the UAE goes one step further and specifically mentions “the responsibility of all states to control the activities of the so-called ‘non-state actors’, and to cut all support to terrorists operating and perpetrating terrorism from their territories against other states” (Consulate General of India, Dubai, 2018). As part of this effort to isolate Pakistan from some of its lending life lines, the Indian government was also hoping to capitalise on a temporary misalignment between Pakistan and Saudi Arabia vis-à-vis the civil war in Yemen.5 Point 8 of the resolution adopted by the joint session of the Pakistani parliament, held from 6 to 10 April 2015, stated that the legislative body desired “that Pakistan should maintain 5

For an analysis of Pakistan-Saudi Arabia ties, see: Karim, Umer, “Pakistan’s Military Steps In To Manage Tense Ties With Saudi Arabia”, The Arab Gulf States Institute in Washington, 1 September 2020, https://agsiw.org/pakistans-military-steps-in-to-manage-tense-ties-with-saudiarabia/, accessed: 2 September 2020.

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neutrality in the Yemen conflict so as to be able to play a proactive diplomatic role to end the crisis” (Dawn, 2016), thereby refusing the request from Saudi Arabia to send Pakistani troops to quell the Houthi rebels in Yemen. But the implications of India’s intensifying relationship with the Gulf, and Saudi Arabia in particular, can be seen most clearly in Pakistan’s failed attempts to convince Riyadh to take a clear position on the Indian government’s decision in August 2019 to unilaterally revoke Article 370 of India’s constitution, which guaranteed autonomy to what Pakistan considers Indian-occupied Kashmir. Until the autumn of 2020, Saudi Arabia has not shown any particular interest in calling a meeting dedicated to Kashmir of the Riyadhled Organisation of Islamic Countries (OIC), something that Pakistan has instead strongly advocated. While both Saudi Arabia and the UAE consider the revocation of Article 370 in Jammu and Kashmir India’s internal affair (Ashraf, 2020), Pakistan has voiced its frustration over the OIC’s lack of unity on the matter. Not only Prime Minister Imran Khan in February 2020 said when referring to the Article 370 issue that “we can’t even come together as a whole on the OIC meeting on Kashmir” (Syed, 2020), but in one of the most notable developments in the recent history of the Saudi-Pakistani relationship, Islamabad’s Foreign Minister, Shah Mehmood Qureshi, appeared on a talk show on a Pakistani news channel in August 2020, and stated that “a meeting of the Council of Foreign Ministers is our expectation. If you cannot convene it, then I’ll be compelled to ask Prime Minister Imran Khan to call a meeting of the Islamic countries that are ready to stand with us on the issue of Kashmir and support the oppressed Kashmiris” (Dawn, 2020). As a result of these remarks and of the strains emerging in the relationship between the two countries, Pakistan was asked to repay $1bn of the loan it secured from Saudi Arabia in January 2020, in what was seen as a partial withdrawal of the financial support that Saudi Arabia extended to Pakistan, soon after Imran Khan took office (Rana, 2020). As Nicolas Blarel noted, “Modi and his government have perceived a potential deterioration in Pakistan’s ties with the Gulf states as a window of opportunity to reinforce India’s security cooperation with partners in the region, including in the area of counterterrorism” (Gupta et al., 2019: 28). At the same time, and a point that chimes with what was noted earlier in this chapter about the reactive nature of India’s policy vis-à-vis both China and Pakistan, some analysts noted how such a desire to boost India’s economic and security ties with GCC countries was the result of a growing realisation among Indian leaders that China’s inroads in South Asia, coupled with Pakistan’s engagement with Iran, needed to be met with speedier action (Madan, 2016).

4 Conclusions As a way to evaluate the responses of the Modi government to the development of CPEC, we can identify areas where India has been partly successful, as well as others in which, for a number of reasons, New Delhi’s responses have fallen short of the goals it set. With regard to the former, India’s engagement with the Gulf was driven

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both by economic and political reasons, including the aim of strengthening its ties with GCC countries, while simultaneously weakening Pakistan’s links with the oilrich Arabian Peninsula. The fact that the OIC did not convene a foreign minister’s meeting to discuss the aforementioned revocation of Article 370 on Kashmir, and the ensuing diplomatic spat between two countries like Pakistan and Saudi Arabia that have always enjoyed very close ties, demonstrates how the “Act West” policy can be regarded, from an Indian standpoint, as a positive development in increasing India’s regional influence and, at the same time, isolating Pakistan from some of its closest allies. Where the Modi government has instead found more difficulty in asserting and advancing its interests has been in its engagement with Iran, and in particular in relation to developing the port of Chabahar. A number of structural factors, including a close Sino-Iranian partnership and the US sanctions on Iran, coupled with a policy that has mostly been reactive to the developments taking place with CPEC and Gwadar, have meant that India’s strategy to boost its position vis-àvis Afghanistan and Central Asia through Chabahar has met some stumbling blocks that will be difficult to overcome in the coming years. What the analysis presented in this chapter has also shown is that China’s role in India’s ambitions for regional influence, as well as in New Delhi’s attempts to weaken Islamabad’s international interactions, is a crucial one, and it has increasingly become so from 2013 onwards. The latest developments in Saudi Arabia– India–Pakistan triangular relations are a case in point. While the growing SaudiIndian partnership has meant that Riyadh has partly withdrawn its financial support for Pakistan following a diplomatic spat between the two countries, China has immediately stepped in to provide Pakistan with $1 billion, the same amount that Pakistan had at the time repaid to Saudi Arabia. In a similar fashion, China’s close trade partnership with Iran has proved to be an obstacle to fully tap the potential of India’s investment in Chabahar, especially following the announcement of a potential military and commercial deal between Beijing and Tehran. China’s importance in the wider Indo-Pakistani relationship came to the fore also during the 2019 crisis between the two countries, following a terrorist attack which killed forty Indian paramilitaries in Kashmir. For the first time since the Indo-Pakistani 1971 war, Indian aircrafts struck within Pakistan’s territory and Islamabad, in retaliation, shot down an Indian jet. At the height of tensions, when the two countries were on the brink of war, Indian and Pakistani foreign ministers reached out to China seeking its support in mediating between New Delhi and Islamabad. China urged both sides to diffuse tensions, and the Pakistani move to return the fighter of the Indian jet downed, was the way out of a conflict, which risked turning into a wider war between the two countries. This final episode represents a potent reminder that an Indo-Pakistani conflict is still a real concrete possibility and that it will continue to be very interesting to follow China’s role in the sub-continent.

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