India Is Slowly Evolving Into a Market Economy
Over the decades,has seen several significant changes in the way it looks at the world. It went from the idealistic Non-Aligned Movement in the 1950s to a close relationship with the Soviet Union during the Cold War. Now, has cozied up to the United States to form the Quad, a strategic partnership to counter China that also includes Japan and Australia. also flirted with BRICS nations for a brief while to form a coalition of developing countries — Brazil, Russia, China and South Africa — which seems to be dying a quiet death.
All along,has prided itself in maintaining strategic autonomy. Modi’s megalomania made him believe that he would suddenly catapult to global power status. Unfortunately, his terms in office have left a muddled mess in its wake.
In today’s world of modern warfare and geopolitics, which includes nuclear-armed neighbors in Pakistan and China, Modi’s early years saw inane chatter about “Akhanda Bharat,” the rulingParty’s ( ) term for undivided . This idea seeks to regain ancient India’s lost glory by spreading Hinduism’s influence across South . Barring such misplaced euphoria, rode the wave of international goodwill to regularize the border with Bangladesh.
In western, the Middle East was warming up to influence. Progress was made on a deal to develop Iran’s strategic Chabahar port, which would facilitate overland access to Afghanistan. In 2017, became the first to visit Israel. has also improved its relationships with Saudi Arabia and the United Arab Emirates. Yet since the 2017 Doklam standoff on the -China border that Modi’s team handled well, Beijing has succeeded in building more infrastructure in the region than . Though it could also be considered a strategic tie. Despite US objections, the decades-old -Russia defense partnership evolved from being a technology buyer to the recipient of technology transfer and, finally, a defense research and development partner — an evolution that has continued under .
India’s perpetual see-saw with Pakistan has continued throughout Modi’s tenure. His initial outreach by inviting then- Nawaz Sharif to his inauguration in 2014 and a surprise stopover in Lahore a year later quickly fizzled out. In 2016, Pakistan-based militants carried out terrorist attacks near the town of Uri in the state of Jammu and Kashmir. In response, conducted “surgical strikes” across the Line of Control (LoC), which separates the disputed Kashmir region. In 2019, Pakistani militants attacked soldiers in Kashmir. For the first time since 1971, entered Pakistani airspace to bomb locations that claimed to be terrorist training camps.
The situation betweenand Pakistan did not change much. Tensions between the two countries persist. But was reelected in 2019 on the promise of this altered equation of swiftly and boldly following up on terrorist attacks by Pakistan-based militants.
The reality was much more nuanced. Despite downing of an fighter jet in February 2019 and capturing an pilot, who was returned a few days later, appeared to expose holes in India’s defense preparedness. Nonetheless, managed to isolate Pakistan globally and, in 2018, have it included in the gray list of the Financial Action Task Force, the global agency tracking terror financing.claims and Pakistani counterclaims, international observers concluded that the two cross-border raids by were not particularly effective. By blocking access to bombed sites, Pakistan’s side of the story seemed flimsy. However, Islamabad’s
India’s relations with the West did not improve much. In Europe, other than the Rafale warplanes agreement in 2016, the Donald Trump and could not prevent a trade war.government was unable to make progress on the stalled trade deal with the EU. To be fair, Brussels was busy rebuilding after the Great Recession and the chaos caused by Brexit. Across the Atlantic, there was optimism in the air. During his final term, US President Barack Obama reluctantly embraced . Later, the bonhomie between
However,-US defense and strategic cooperation strengthened as built on the hard work of his predecessors, Atal Bihari Vajpayee and Manmohan Singh. The rising threat of China also played its part in developing this relationship. The 2015 agreement between Obama and on nuclear liability issues was followed by a bilateral Logistics Exchange Memorandum of Agreement in 2016 and a Communications Compatibility and Security Agreement in 2018. The Quad seems to be a natural extension of this closer US- partnership, India’s Act East policy and the Asian pivot of the United States.
After a reasonably strong start, Modi’shas found itself in a muddle. India’s failures closely follow the country’s economic decline since 2017-18 and steadily rising majoritarianism. Trump’s erratic, isolationist policies and India’s widening geopolitical deficit vis-à-vis China played a role, but most of Modi’s wounds are self-inflicted.
For his narrow domestic agenda and to pass the Citizenship Amendment Act (CAA), selectively fast-tracked citizenship applications of non-Muslims from the neighboring countries of Afghanistan, Bangladesh and Pakistan. Because it excluded Muslims, even persecuted ones, from these countries, the CAA was criticized and deemed discriminatory.
In doing so, diplomatic snub and demonstrated its desire to walk into China’s open arms. Sustained diplomacy over the past year, combined with Modi’s recent trip to Bangladesh and India’s donation of COVID-19 vaccines, repaired some of the damage. While cooling down the CAA rhetoric might help, India’s weakened economy could still push Bangladesh closer to China.alienated Bangladesh, which is rapidly modernizing and leaving behind on most human development and economic indicators. Bangladesh swiftly showed its place through a
Under the Trump administration, the US held a tough stance against Pakistan over what it called “Islamabad’s failure to take action against militant groups.” Aid from Saudi Arabia also dried up due to strained relations between Riyadh and Islamabad. As a result, Pakistan is beholden to China. The China-Pakistan Economic Corridor (CPEC), which passes through Gilgit and Baltistan, a disputed region that both and Pakistan claim sovereignty over, has cemented China’s grip on Pakistan. has not approached the recent ceasefire agreement with Islamabad and the resumption of peace talks from a position of strength. Rather, it is a tacit admission by both weakened parties that peace is mutually beneficial.
Relationships with the Arab world and Israel remain strong, but signed a 25-year strategic deal with Tehran and, with its economic clout, is pulling the Kremlin into its sphere of influence. In the pre- era, as a rising economic power, managed to carve out exceptions for itself to bypass US sanctions against Iran and Russia. Throughout ‘s tenure, China has steadily widened the economic and geopolitical gap with . New Delhi’s growing weakness vis-a-vis Beijing has resulted in kowtowing to the US and losing its strategic autonomy.has lost the plot with Iran and is losing some ground with Russia. Beijing recently
Britain’s need for trade partners following its departure from the European Union might lead to a favorable -UK deal. But a free trade agreement between and the EU has not seen any significant movement under . US President Joe Biden does not seem to be in any rush to end the trade war his predecessor began with .
For all the buzz surrounding The Quad,is the junior partner that has little to offer to others in terms of economic benefits. will enhance its strategic and military cooperation with other like-minded democracies, but the other Quad countries are unlikely to intervene if there is a full-scale confrontation between and China. Unless the economy becomes efficient and tightly integrates itself with Quad countries, its usefulness to other partners will be limited to its size and strategic location.
In the Cold War, the US aligned with autocrats and religious fundamentalists, most notably in China and Pakistan, to defeat the Soviet Union. In the new brewing cold war between Washington and Beijing, Quad countries will pay lip service to building democratic institutional capacity in. However, if push comes to shove, they will partner with an authoritarian to counter China, which will serve their narrow self-interests.
Modi’s biggest started reducing New Delhi’s sphere of influence through its outreach to India’s neighbors and offers of economic and strategic partnerships. In 2019, scrapped Article 370 of the Constitution to downgrade the state of Jammu and Kashmir to a union territory status. His deputy, Amit Shah, made unrealistic claims about taking back the China-controlled Aksai Chin. In response, Xi directly occupied territory in Ladakh for almost a year.failure is India’s frayed relationship with China. His misplaced overconfidence forced him to reject conventional wisdom and embark on a charm offensive with Chinese President Xi Jinping. ignored the Doklam warning and kept expecting Xi to treat as an equal, despite the crumbling economy. Meanwhile, China had already
China’s strength and India’s decline are best captured through the different ways the countries approach bonds. China is selling its government bonds internationally at a negative interest rate despite a raging pandemic, ongoing border clashes with and a 300% debt-to-GDP ratio. bond investors are demanding higher yields even though India’s debt-to-DGP ratio is below 100%.
With a sizable military and tactical superiority, weapons purchases during the Ladakh standoff, paid dearly for and Shah’s hubris and prioritizing domestic politics over national interest.was unlikely to lose territory to China. However, through emergency
Weakened on the World Stage
Through his speeches, photo-ops with world leaders and tweets,keeps peddling lies and projecting strength to voters. While India’s financial health has deteriorated significantly, the has raised — through anonymous electoral bonds — millions in political donations that fuel Modi’s formidable propaganda machine.
The world knows thatis run by a narcissist who has built a false domestic narrative of the country’s global standing to keep winning elections. The West will keep hoping that gets its act together economically and stops destroying independent institutions so that it becomes a democratic counterweight to China. But that is a battle only voters can lead.
Aswarms up to the Quad, where does it go from here? As a new cold war brews, lessons from the past are informative. While the US used China and Pakistan to dismantle the Soviet Union, China cleverly used its leverage to strengthen its economy and authoritarian communist rule. Meanwhile, Pakistan indulged its military and majoritarian religious leadership to destroy itself from within.
With his dismantling of democratic institutions and promotion of religious bigotry,has left in doldrums. If voters want it to become a vibrant, democratic counterweight to China and a global player that does justice to its potential, will have to find a leader who understands that issues like a strong economy, independent judiciary and social stability cannot be divorced from its but are integral to it.
*[Updated: June 14, 2021]
The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.
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