INTERNATIONAL  INSTITUTE FOR SOCIAL AND ECONOMIC STUDIES 
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India’s Grand Strategy Needs a Second Act

31.12/2019

Published with the kind permission of the author 

Grand strategy, the historian John Lewis Gaddis said, is the aligning of “potentially unlimited aspirations with necessarily limited capabilities” across “space, time, and scale.” Having witnessed the United States (US) overreach during the Cold War, Gaddis knew the costs of failing to match ends with means all too well. In a somewhat different context, India is facing a chasm between its global aspirations and the reality of its national power. A confluence of disruptive factors has now made the business-as-usual approach simply unsustainable. A course correction if not undertaken and executed sensibly could imperil India’s rise for the next generation. 


Let us begin with the key themes that underpinned India’s post-Cold War foreign policy transformation. The end of the Cold War removed or certainly muted the role of ideology in inter­national politics. And, because that was closely followed by the disappearance of one of the superpower contenders, it also radically changed the balance of power that had prevailed since the end of World War II. It was in this unipolar moment that many of the core assumptions of India’s role in the 21st century were defined. These included a rapprochement and active engagement with the sole superpower who also held the fate of the international economy as well as numerous other institutions in its hands. This culminated in the 2005 Indo–US nuclear deal, an understanding that was more important for its geopolitics rather than alternative energy technology for Indians. A second major premise of India’s foreign policy since the 1990s has been to facilitate integration with the global economy. Even more crucial was the percolating of ideas that discouraged economic statecraft and industrial strategies during the globalisation process. In the age of an open liberal economic order, such measures were seen as passé and impediments to the free flow of capital and merchandise.

The recipe for India’s transformation seemed straightforward: India’s prosperity, security, and status would ensue naturally from this integration into the US-led order. Indeed, until the great disruptions, India’s economic growth and geopolitical status witnessed an impressive spike in the mid-2000s. Between 2003 and 2008, India’s economy grew by nearly 9% each year, with foreign exchange reserves growing by $200 billion. While that growth was imbalanced, the surpluses from India’s footprint in global trade, particularly exports of software and information technology-enabled services, along with inward capital inflows at low rates of interest provided resources for the state to conceive a range of social and development objectives. The bonhomie with the US also made other international actors take notice, particularly China who even reached an agreement with India on the basic principles that would guide a resolution of their territorial dispute. 

In short, India had made a tacit bargain. Delhi would become a pillar of the post-Cold War order by bandwagoning with Washington, even offering itself as a sentinel in the Indian Ocean region, and, in lieu, would receive some geo­political and geoeconomic benefits. While this shift in India’s foreign policy was not uncontested domestically, the balance of power and a seemingly flourishing economy made the basic policy choice difficult to dislodge.

Twin Disruptions

The end of the post-Cold War order is often traced to the 2008 global economic crisis. The intricacies of that shock were less important than the larger message it sent to the rest of the world. The US had lost control over the global economic system and globalisation could no longer be seen as a one-way bet to wealth and power. The global governance deficit became apparent too as the non-Western powers quickly realised that the US had too much on its plate at home and with too many vested interests at the helm to reconstruct a more equitable and sustainable geoeconomic arrangement for the post-crisis world. The Chinese were among the first to recognise this reality, and propelled their already tenacious state back into business, literally. China also initiated a determined effort to upgrade its industrial and manufacturing base by focusing on innovation and human capital development in both conventional and next generation technologies and industries.

Even for neo-liberalisers like India with a frail state, the writing was on the wall. The extraordinary spurt in growth rates, driven largely by international capital flows, had petered out before the turn of the decade. Within a year of the 2007–08 global crisis, India’s overall growth and international trade began its slide. In 2008, India’s exports as a share of its gross domestic product (GDP) was 24%. A decade later, the export–GDP ratio had plummeted to 11%, nearly the same figure that India had recorded in 1998 (Roach 2010). Even more instructive is the relative decline of India’s industrial capabilities, with rising imports of capital goods in the past decade—that is, machinery, equipment, and components necessary to run India’s domestic manufacturing, develop core infrastructure capacities, and fuel exports. Today, India imports over 40% of its domestic requirements in the vital capital goods sector.1 If we exclude oil from India’s overall import basket, the share of ­capital goods increases to nearly 30% (Swathysree and Pal 2019).

The second disruption was the return of major powers or what we call the great powers back into the fray. Russia was the first off the block. In a now famous speech at the 2007 Munich Security Conference, Vladimir Putin denounced the idea of a modern day Rome: 

It is world in which there is one master, one sovereign. And at the end of the day this is pernicious not only for all those within this system, but also for the sovereign itself because it destroys itself from within …the unipolar model is not only unacceptable but also impossible in today’s world.2

In the following year, Russia swiftly intervened in the Georgian war, seen by many as a reaction to provocations and diplomatic slights by the West on Russia’s periphery since the 1990s. But it was the open defiance of the US that was of importance. Unipolarity had rested not merely on a preponderance of power under a single state but the consent of other states to accept such an order. But here was a state that had defeated a US proxy and there was little that Washington could do about it. This would have been unthinkable just a few years previously, when the world watched helplessly as the US waged its largest military operation since Vietnam to topple the regime in Iraq in 2003.

In early 2002, impressed by the swift projection of US power in Afghanistan, historian Paul Kennedy (2002), not known for his hyperbole, declared, “in military terms there is only one player on the field that counts … Nothing has ever existed like this disparity of power; nothing.” Even in 2008, US strategists were confidently claiming, “challenges derived from globalisation will dominate the century” and that “great-power competition and conflict is no longer the driving force of international relations” (Friedman 2019).

Yet, it was only the beginning of resistance from the non-Western world. Regional powers were asserting themselves and felt confident enough to imagine new local status quos. China would follow suit too, although in a relatively restrained fashion given its stakes in the economic relationship with the US built up over three decades. The pattern would play out across regions—Eastern Europe, West Asia, South China Sea, and in the Korean Peninsula. The sharpest illustration of the changing military–technological balance was the proxy conflict in Syria and Russia’s success in securing an ally 2,500 kilometres from its periphery. No longer was it merely about the US will to fight. The US primacy had disappeared.

A series of international crises in the 2010s and the interlinked turmoil in the Western body politic, has chastened all but the most hard-boiled Western strategist. Few now believe a unipolar world can ever be restored or should even exist.

India at a Crossroads

Conversations on India’s foreign policy and its future international role seem unable to fully break away from the inherited convictions of the 1990s. That the US will eventually recover its global role and provide order, subdue great power competition, and lead the international economic system is a belief that still predominates the thinking of the strategic bureaucracy, foreign policy apparatus, and majority of India’s think tanks. It is true that other ideas also prevail. The belief in a plural, multipolar, multi-civilisational world order also exists in India. Occasionally, it has even received official endorsement. And, yet, such a vision of world order remains on the margins of public discourse. It does not seem to hold the attraction of the political leadership or policy elite who view it mostly as a legitimating discourse or extension of their domestic visions and contestations rather than an international order that India should strategically support and creatively benefit from.

Historically and even now, one of the missing pieces from India’s strategic debates is the lack of self-awareness about India’s real place in Western geostrategy. In the Anglo–American map of the world, India has always been a dispensable piece on the chessboard and could never quite capture the strategic imagination in the way China could for the West. One could even go so far as to claim that partition was the mani­festation of such a world view: India’s importance never exceeded much beyond its real estate, and even its unity was sacrificed in order to preserve a strategic foothold near the borderlands of Eurasia’s great powers. In contrast, the Western approach to China’s civil war was the opposite: its unity was seen as absolutely vital for a stable post-war balance of power.

As a result, the role conceived by the West for India has never acquired a substance of a real stakeholder or as a major power. Even the 2005 entente was ultimately authored by Cold Warriors in Washington for whom changing strategic priorities had elevated South Asia’s importance after North Atlantic Treaty Organization’s intervention in Afghanistan. The US–India ties were intended to complement US–Pakistan ties with Delhi being encouraged to reassure Islamabad and settle outstanding problems with its neighbour. The “China factor” was more a glue to bring two estranged and suspicious security establishments closer rather than a serious attempt at co-managing Asia’s future. The year 2005 was really about the US attempting to enlarge its sphere of influence in the subcontinent by shaping India’s rise. Or, as a former US official later reflected, “What we were trying to set up for India was a diplomatic revolution in India” (Burns et al 2015).

The second facet, or rather delusion, in India’s strategic debates has been the idea that India can play a major role in Asia as a “swing power” without a robust and dynamic geoeconomic footprint. This chasm between geopolitics and geoeconomics has been apparent for several years and came to the fore again with the recent decision to stay outside the Regional Comprehensive Economic Partnership (RCEP), an agreement that could profoundly shape Asia’s political economy and trading architecture for decades to come. India’s policymakers might have had good reasons for staying out, but most of these actually reflect a failure to transform a stagnant industrial and human capital base at home. India has become so utterly dependent on East Asian manufacturing that the RCEP countries account for 90% of India’s trade deficit in capital goods with China supplying the lion’s share (Swathysree and Pal 2019).

Meanwhile, the geopolitics of Delhi’s Indo–Pacific policy—to craft a political arrangement or a “Quad” with the US and its frontline allies in East Asia—is proceeding merrily along as a distinct feature of India’s grand strategy. But on the ground it amounts to India sliding into the role of a rentier state, not dissimilar to Pakistan’s role during the first Cold War. India would just be plugging into a broader coalition of states, without possessing much leverage in either the process or the purpose behind such combinations. Without the economic factor, India cannot really forge a deeper connection with Asia. And, if you do not have a deeper connection with Asia, you cannot shape China’s rise, nor can you shape how China’s neighbours will behave towards its rise and everything else that goes with it. Indian strategists and policymakers are struggling to resolve this dilemma whose answer lies not in the foreign office but in the political economy of a multitude of institutions, industries and sectors of the Indian economy.

This leads us to the central theme about India’s grand strategy. What is the purpose of the Indian state and what should Indians seek from the international environment in the foreseeable future? In retrospect, India’s geopolitical identity and strategic culture was forged during the tumultuous encounter with the colonial power. At one level, Indians chose strategic independence and a determination to be a future great power because they vowed never again to be in a position of subservience to another state. The British Raj had isolated India from its neighbourhood and severed its traditional geoeconomic connections with the larger Asian continent. The central economic aim of course was to maintain exclusive access to India’s market and extract its wealth to the metropolis.

At another level, Indians also acquired the language of power and the geopolitics of the British Raj. It was an inheritance with a double-edged sword. It provided India with some of the intellectual tools of regional statecraft. But, the imperial power had pursued its geostrategies with different ends in mind: to use Indian territory and boots to wage a great power struggle against rivals in the Eurasian heartland and to emasculate or keep other regional polities in check. India was converted into “the trunk of a systematic corpus of imperial defence whose limbs stretched from Hong Kong to the Middle East, from East Africa to the northern passes of Burma” (Hodson 1993: 3). The expansive geo­political images that animate contemporary Indian discourse echo the historical role played during the colonial era. If back then it was the “great game” of pushing the Russian empire away from the subcontinent and encroaching on Qing China’s south-western periphery, today Western geopolitical impulses are not that different. Indeed, at a deeper level the 2005 nuclear deal was a “long-term geopolitical bet” by the US on India’s potential to “shape the future of the Eurasian landmass in a positive direction” (Burns et al 2015).This was a role that India rejected during the first Cold War and it cannot even fathom leaning against a resurgent and technologically powerful Eurasia in a multi­polar world.

Need for Reframing

Conceiving of a new grand strategy must inevitably begin by rejecting the geo­political concepts, the aggrandising im­pulses, and the prejudices that were inherited from the British Raj. It would also mean India acquiring, or reacquiring, a developmental identity and purpose for its international role. Despite being pulled in a variety of ideological directions during the first Cold War, India sought, albeit fleetingly and not always successfully, to craft a progressive economic and developmental vision that could underpin a great power identity, the latter being something that will remain an integral part of India’s DNA. However, the sinews of power cannot be borrowed or derived simply by clever manipulations in international politics. Geopolitics cannot be played while the domestic political economy is in a structural crisis. Something has to give. The choice before India is not dissimilar to the one made by Chinese leaders on the eve of their reform and opening up four decades ago. Geopolitics must be confined to a limited sphere for core security requirements, and, for the most part, subsumed to the over­riding purpose of India’s domestic transformation and a prudent open-door policy to the major centres of wealth and technology. 

The Indian elite needs to think searchingly on some hard questions and reframe its strategic priorities. It must begin by reversing the over-securitisation of India’s foreign policy. The good news is that the global balance of power and a resurgent Asia provides several options should India’s leaders decide to change course.  

Notes 

1 National Capital Goods Policy 2016, Ministry of Heavy Industries and Public Enterprises, Government of India, https://dhi.nic.in/writereaddata/Content/NationalCapitalGoodsPolicy2016.pdf.

2 Speech by President of the Russian Federation at the Munich Conference on Security Policy, 10 February 2007, http://en.kremlin.ru/events/president/transcripts/24034. 

References

Burns, R Nicholas, Shyam Saran, Philip D Zelikow and Stephen E Biegun (2015): “July 18, 2005: Looking Backward, Looking Forward,” Carnegie Endowment for International Peace, 13 July, http://carnegieendowment.org/2015/07/13/july-18-2005-looking-backward-looking-forward/idhf.

Friedman, Uri (2019) : “The New Concept Everyone in Washington Is Talking About,” Atlantic, 6 August.

Hodson, H V (1993): The Great Divide: Britain-India-Pakistan, Oxford University Press 

Kennedy, Paul (2002): “The Eagle Has Landed,” Financial Times, 31 January.

Roach, Stephen (2010): “2008 Crisis a Wake-up Call for India,” Economic Times, 2 June.

Swathysree, S S and Parthapratim Pal (2019): “Capital Goods Need a Policy Overhaul,” Businessline, 22 April. 

Source: EPW