India's Foreign Policy

The article below was presented at the India Forum, organized by the Fundacion Marcelino Botin in Madrid in November 2007.

In March 2005, Secretary of State Condoleezza Rice announced that, “international institutions are going to have to start to accommodate [India] in some way.” [i]  From an Indian perspective she is years late.  But it is an objective that the developed world is only now beginning to affirm and towards which it is still only taking hesitant steps.

While local politics in India mandate an internal focus, recent Indian administrations have understood that it will require engagement with the international community to achieve their domestic objectives.  In words, India still focuses inwardly: in actions, however, India is beginning to feel its way outside its borders.  In recent years, India’s military, diplomatic and economic energies have expanded far beyond Nehru’s Non-Aligned position.  But what does that mean for India, its region, and to the United States?

What Drives India’s Foreign Policy Today?

India’s foreign policy is driven by five principal considerations, through which lie its relationships with the United States and China [1].

1. Conventional Security

As is necessary for any nation, India’s principal priority is ensuring conventional security for its country and its people.  In recent years, India has built up a strong and capable Army, Navy and Air Force: the third, forth and seventh largest in the world respectively.  India’s military is not only large, but effective, well trained and increasingly well equipped [2]; their Air Force has been known to best that of the United States in combat air exercises [3].

India’s main conventional threat is perceived to be Pakistan.  These two nations had a military stand-off in late 2001 and early 2002 following an attack on the Indian Parliament.  While India’s military is vastly larger than Pakistan’s, this numerical supremacy is somewhat mitigated by the topographic limitations of their western border which restricts the number of troops that India could deploy against Pakistan at any one time.  India also has tense relations with another of its neighbors, China.  In 1962, the two nations fought a war, lost quickly by India, a fact that has long stuck in the memories of many Indian military officers.

While India has committed to expanding and modernizing its Air Force[4], and maintaining the stature and strength of its Army, three principal reasons have motivated their desire to expand their blue water navy and build a submarine force.  First, to counter China’s expansion into the region.  Second, to ensure the continued safe flow of goods and natural resources through the Bay of Bengal and beyond, particularly the area around the Malacca Straits which is still very susceptible to piracy and through which approximately one half of the world’s oil flows [ii].  Finally, and I will talk about this later, is India’s desire for a nuclear triad, the missing leg of which today is a submarine force.  While not trying to create an offensive capability, in the words of Admiral Sureesh Mehta, the Chief of Indian Naval Staff, India is looking for, “mutual respectful partnerships that ensure the stability of the Indian Ocean.” [iii]

While India’s military is designed to protect its borders from outside influence or powers, it should be noted that they also have a strong domestic role in fighting internal militancy, particularly in its northeast region, in Jammu and Kashmir, and against the Naxelite groups in the east.  Notwithstanding these three sets of players, what is perhaps most surprising is that despite having the third largest Muslim population in the world (after Indonesia and Pakistan), excepting the attempted suicide attacks in England over the past summer, there are no known Indian al Qaida or Taliban members.  This fact could suggest that India might have something to teach concerning anti-terrorist activities. 

South Asia is an insecure region, and India is surrounded on all sides by unstable democracies, conflict-ridden countries, militant activity, authoritarian leaders or weak governments, and countries with which India has historically acrimonious relations.  In order to ensure that such negative influences do not seep into India, despite the inherent cacophony described by its diverse ethnic and religious population and inequality, India has developed a strong democracy [iv].  This has enabled all parts of India’s society (to very differing degrees) to engage in the political process, a fact that helps maintain domestic stability.  It is greatly in India’s interest to encourage others in the region to follow its example and in so doing improve the prospects of strong and continuous growth. 

Except for its engagements with Pakistan and China, India’s military has not been called upon regionally in some while.  The nation is wary of such activity since its disastrous expedition to Sri Lanka in the late 1980’s in which India became dragged into the internal conflict, and which eventually led to the assassination in 1991 of India’s former Prime Minister Rajiv Gandhi.  More conventionally, India uses its diplomatic and economic leverage and soft power to help mitigate the conflicts of its neighbors, particularly Nepal, Sri Lanka, and Bangladesh.  India, the United States and the United Kingdom together played a powerful role in persuading Nepal’s King Gyanendra to stand down in February 2005.  India continues to have influence in Sri Lanka and in Bangladesh and provide a demonstration effect for democracy to these countries.  In Afghanistan, India has built on its long-standing relationship with the Northern Alliance and Prime Minister Hamid Karzai to support stability and growth in the country, including providing over $750 million in assistance and infrastructure support.  It should be noted that India’s interest in Afghanistan is not just historical: lying as it does on Pakistan’s western border, close relations with Afghanistan (as with Iran) constitutes a significant strategic asset to India.

Perhaps most importantly today, India’s military has a strong peace-building role.  As of March 2007, India was the 3^rd largest provider of peacekeeping forces to the United Nations (UN).  While India is very reluctant to take action outside of UN auspices, there have been some notable exceptions in the humanitarian area.  In December 2004, India was one of the founding four nations of the Asian Tsunami Core Group formed within twenty-four hours of the catastrophe.  Despite being impacted themselves, India provided more aid and assistance than any country except the United States. 

2. Economic Growth

India’s second principal foreign policy goal is economic growth.  From its birth to 1980 India was known for its “Hindu” rate of GDP growth of approximately 3.5% per year. [v]  Following the 1991 economic reforms led by the then-Finance Minister Manmohan Singh, growth tripled, reaching 8% in 2004.  The government is forecasting up to 10% growth, second only to that of China, for the coming decade. 

Historically, India’s growth has been internally driven, stemming largely from its past socialist ideology.  Increasingly, however, India is attracting foreign investment and drawing on international resources and markets to support this growth.  Despite the steady expansion of India’s middle class (judged to be around 300,000 today), India is going to have to draw on this international engagement further if it is going to continue to lift up the 60% of its population in the rural sector and develop a modern infrastructure [5].  Despite much political intransigence from the Left Parties currently supporting the Congress-led administration, India is also opening up its own markets to foreign investment.  However, given that around 95% of India’s retail sector is composed of “mum and pop” stores [vi], effecting this change is going to be enormously sensitive politically.  A major element of the U.S.-India relationship is focused on building economic engagement and investment between the two nations.  While there are some potentially sensitive aspects to this (e.g., outsourcing), the interest from America’s private sector is fast expanding and goes beyond any government encouragement or support.

In the early 1990’s, the Indian Government launched a “Look East” policy intended to promote engagement between India and its South East Asian neighbors [vii].  The raison d’être of this policy was economic.  This policy never truly realized the hoped for benefits, in large part due to the 1997 financial crisis that interrupted economic development in the region.  Nevertheless, today India is increasingly engaging with the Association for South East Asian Nations (ASEAN) including working on a Free Trade Agreement (FTA), and continues to engage bilaterally with the members and others with trade agreements completed or in process with countries such as Thailand, Sri Lanka, Bangladesh, Korea, Singapore and Japan.  Although it appears that India is focusing most of its energies and attention on bilateral economic initiatives, it continues to support regional and even multilateral agreements such as the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), and the new South Asian Free Trade Agreement (SAFTA), and taking a very active role in the World Trade Organization (WTO) Doha negotiations. 

While India’s economic relationship with its South East Asian neighbors appears not to have been very successful thus far, one driver of India’s increasing engagement with China stems from the latter’s exceptional economic growth of over 10% since 2000.  Both India and China see their concurrent economic expansion as mutually beneficial.  The future however is less clear.  India is increasingly focusing on the manufacturing sector, traditionally China’s area of expertise; as Prime Minister Singh noted in his Independence Day speech on August 15, 2007, “ In the next decade I want to see every region of the country to similarly benefit from the growth of modern industry. We will pursue policies that will help in our country’s rapid industrialization. [viii]”  Equally, China is working to expand its services sector, India’s area of historical hegemony.  With these two trends it is increasingly likely that the two nations will compete with one another more than they have in the past. 

3. Energy Security

In order to sustain economic growth at around 10%, India must ensure energy security, its third major area of focus.  India currently imports 70% of its oil and 50% of its gas; by 2025 it is projected that India will import 80% of its energy needs [ix].  It has some of the largest resources of coal worldwide, but it is dirty coal and its use will have severe environmental implications.  India holds a similar position on energy consumption as many other developing countries; it should be permitted to expand energy consumption until its per capita levels are similar to those of the West.  However, India is also beginning to pay more attention to environmental concerns, joining the Asian Pacific Partnership on Clean Development and Climate and more recently creating a Council on Climate Change this past summer.  This issue is increasingly becoming a political one as, in a recent poll conducted in 2006, 51% of Indian’s asked considered global warming a critical threat[x].

In an effort to ensure access to energy resources, India will continue to focus on the Middle East region (which supplies two-thirds of their oil), and particularly on Iran.  Iran currently provides 10% of India’s oil (its fourth largest provider after Saudi Arabia, Nigeria and Kuwait) [xi] and, albeit unlikely, if the proposed pipeline from Iran through Pakistan to India becomes a reality, the three nations will be tied more intimately together, something that has both positive and negative consequences.[6]  In addition to the Gulf, India, like China, is expanding its search for energy resources beyond its immediate neighborhood into Africa and Latin America.  Where India has competed with China for bids, India was most often the loser (with many arguing that China has paid above premium for the win).  However, it should be noted that on a number of occasions India and China have proposed joint bids to producing countries that have often been successful.

Over half of all global oil shipments go through the Malacca Straits annually.  As a region very susceptible to piracy, it behooves local nations to work together to ensure the security and protection of these natural resources as they traverse the Straits.  Given India’s sizable and capable Navy, it has a major role to play in helping to ensure this security, both for its own needs and in so doing ensure broader energy security (and stable prices).  While there are some concerns from others in the neighborhood regarding India’s more assertive maritime forces (not least Indonesia), the regional powers will need to find appropriate mechanisms to work together in this area.

Today India only gets 3% of its electricity generation from nuclear power (compared to 30% in Japan and 78% in France) [xii]; it wants to expand its nuclear energy production by 9% a year through to 2050 [xiii].  This current low level of production was one of the driving factors behind the July 2005 civilian nuclear agreement between India and the United States.  While progress in this agreement has been unsteady recently, as soon as it is complete, ensuring a good supply of fissile material to India to power its civilian reactors and new technologies to ensure their safety and efficiency is going to be a principal objective of India’s government.

4. Nuclear Capability and Nonproliferation

As mentioned earlier, India has two nuclear weapons powers on its borders – China and Pakistan – and one would-be nuclear weapons power in its immediate locale – Iran.  Its relations with these first two powers are unstable; India has fought wars with both in recent decades and tensions rise and fall over border disagreements.  In this context, India continues to attend to its own nuclear resources, and is very sensitive to intimation of control by any other power. [7] 

According to the then-BJP-led Government, India’s 1998 nuclear tests were conducted to respond to what was perceived as the principal nuclear threat coming from China. [8]  While at least overtly that attitude has changed, India will continue to build its capabilities in this area until it achieves a “credible minimum deterrent” that is capable of countering not just China’s nuclear weapons but also Pakistan’s.  This drives its desire to build a nuclear triad of land-based, air-based and, the as yet missing, sea-based, capabilities.  However, beyond needing all three foundations, it is not clear that India has calculated what constitutes a minimum deterrent.  At the same time, India steadfastly maintains a “no first use” policy; this is despite Pakistan’s contrary statements that it would use such weapons if it felt a sufficient conventional threat [9].  It is indeed Pakistan that presents the greatest near-term threat of an exchange of nuclear weapons, as we saw in 2002.  Fortunately, the Composite Dialogue between these two countries has not only lowered the tensions since that time, but also resulted in significant agreements that go some way to mitigating the chance of a mistaken nuclear attack. [10]

In addition to India’s concerns regarding a direct nuclear threat, it is also extremely sensitive to the possibility of proliferation of nuclear weapons or technologies given the region’s history in this area.  China proliferated to Pakistan over many decades and more recently Pakistan, through the AQ Khan network, has disseminated technology and materials to a number of still undefined number of countries including Iran, North Korea and Libya.  Thus, despite long being a target of the nonproliferation regimes, India has vowed to conform to the terms even outside the system.   When the U.S.-India civil nuclear agreement is complete, requiring a consensus vote of the Nuclear Suppliers Group, India will be able to take a more active role in promoting nuclear nonproliferation goals. 

Despite India’s nuclear weapons status today, it is likely that they will continue to promote the long held goal of a nuclear weapons free world.  Meanwhile, they remain extremely concerned regarding the addition of any new nuclear powers (contrary to the claim that they were merely supporting U.S. interests) as is clear from their two UNSC votes against Iran’s nuclear program in recent years.   

5. Prestige Security

The final priority of New Delhi’s government is for India to take its “rightful” place on the global stage.  In so doing they recognize the importance of building their strategic stature and leadership.  With 1.1 billion people, India has the second largest population in the world, and one of the youngest with over 50% under the age of 25.  Their economy, by purchasing power parity, is 4^th in the world after the U.S., China and Japan. [xiv]  Unlike America’s, India’s soft power has remained strong, and their military, economic and diplomatic reach is increasingly significant.  India is a multi-ethnic and multi-religious democracy accommodating a Hindu majority with, as stated earlier, the third largest Muslim population in the world.  They are very eager to take up the role on the global stage that these characteristics support.  While already a leader of the developing world, India wants its status recognized in the developed world.

This status stems in part from the strategic strength they convey militarily, economically and diplomatically.  Given South Asia’s instability, there is much scope for India to focus these assets on helping to alleviate the conflicts in its neighborhood mentioned earlier such as those in Nepal, Sri Lanka and Bangladesh.  While India has been burned in the past from participating in some of these long-standing disputes, it is well aware of the impact that regional stability will have on its own internal growth and foreign investment; the government therefore continues to work actively to support the resolution of these disagreements.  Notably, I have failed to mention Pakistan as a neighbor with whom India engages supportively; given their antagonistic history this is for now not possible.  India instead makes much effort to be passive with regards to Pakistan’s conflicts as we saw concerning the recent political upheavals to which India’s only comment has been merely an expression of desire for stability.

In this activity, in many circumstances, India comes up against China’s similar desire for regional leadership and seniority.  China’s expansion and active diplomacy through their “string of pearls” policy antagonizes the Indian elite and supports concerns of becoming encircled by China and its allies.  The creation of the East Asia Summit (EAS) as originally conceived by the Chinese and Malaysians was to exclude India (and Australia and New Zealand).  China’s close engagement with the Burmese junta is thus also seen as a threat to India, and explains India’s continued engagement with that government despite its human rights record. [11] 

India is working not just in the bilateral sphere, but as we saw economically, it hedges its bets by engaging in regional and, as appropriate, ad hoc groups such as the December 2004 Asian Tsunami Core Response Group and more recently the “quadrilateral” (Japan, the U.S., Australia and India).  India has an impressive array of memberships of regional organizations and continues to drive for more including a formal association with the Associated of Southeast Asian Nations (ASEAN) and joining the Asia-Pacific Economic Cooperation (APEC) group.

India also thinks globally, whether through UN peacekeeping or in its bid to become a permanent member of the UN Security Council.  While thus far the goal of a permanent seat has been unsuccessful, it has resulted in a number of indirect benefits both in terms of building a much closer bilateral relationship with Japan, and in raising its profile as a serious contender following UN reform.  Meanwhile, India continues to lead the G77 and the Non-Aligned Movement and in this capacity negotiates on behalf of the developing nations in the UN General Assembly and WTO Doha talks. 

While these five factors – conventional security, economics, energy, nuclear security and nonproliferation, and prestige security – make up the core of India’s foreign policy interests, it is its relationships with two nations – China and the U.S. – that run through each of these objectives.  It is thus unsurprising that both these relationships are particularly politically sensitive and complex.

China

India’s relationship with China has improved immeasurably since the 1962 war.  In particular, over the past six or so years both nations have worked hard to ensure that their border conflicts do not spill over into their broader relationship, and that other bilateral interests are not held hostage to these disagreements. [12]  Like the United States, China has worked hard in recent years to improve its relationship with India while continuing to sustain its long-term relationship with Pakistan. 

Despite these efforts, however, the inherent relationship between China and India is one of tension, whether in the economic, energy, nuclear, strategic or security realm.  Without the continued careful attention by both parties to mitigate them, these pressures are likely to increase as both India and China take leadership roles in Asia. [13]  As was already mentioned, China was stymied by India joining the East Asia Summit at the request of some of the smaller members who did not want China to overwhelm the group.  China’s “string of pearls” policy that focuses on areas of strategic importance to India, such as Burma and Pakistan, will ensure that India will remain wary of China and try to build out its avenues of leverage within the region.  Pressure is also likely to rise as both nations expand economically, increasingly competing for foreign investment, and supremacy in the services and manufacturing industries.  Given these inherent pressures and yet the importance to both countries of a stable and secure environment in which to grow, the two nations will continue to maintain a dual policy of “hedging and engaging” one another (similar to that of the U.S. with China) in order to walk the narrow path between remaining friendly but protecting against the eventuality that the other does not.

It should be noted that one significant benefit of the uncertain India – China relationship has been the swiftly improving India – Japan dialogue.  As has become apparent in the past two years, these two democratic nations have many interests, relationships (not least with the United States) and concerns (such as the growth of China) in common.  These mutual insights have contributed in the past two years to a growing dialogue between the governments and track II groups that will surely lead to a closer engagement in the future.  As with India’s relationship with the U.S. however, this too will carefully avoid any intimation of anti-Chinese intentions. 

United States

Unlike India’s interactions with China, their relations with the United States have undergone in the past five years a “transformation”, reaching a level today of primacy for both nations.  Notwithstanding its non-aligned status, from its independence until the end of the Cold War, India tilted towards the Soviet Union when the United States engaged more actively with Pakistan.  But in the early 1990’s such divisions began to fade and India’s foreign policy became more self-determining.  In 2000, then-President Bill Clinton led a five-day path-breaking visit to India that transformed Indian views of the U.S. and launched our new relationship.  Former U.S. Ambassador Robert Blackwill picked up the baton when he headed out to Delhi to be Ambassador to India for the Bush Administration in 2001. 

What these moves illuminated were the possibilities between the two countries.  As became apparent during Ambassador Blackwill’s tenure, there were huge opportunities that could be realized by a closer bilateral relationship although much work would be needed to make this possible.  Above all there was a realization by the leadership in both countries that India and America have very similar strategic interests, and in the words of then Prime Minister Vajpayee, are “natural allies.”

What makes us natural allies or, in U.S. words, strategic partners?  America’s principal challenges today lie in such areas as terrorism, extremism, proliferation of Weapons of Mass Destruction (WMD), economic growth, energy, environment, narcotics, Iraq, Iran, Afghanistan, North Korea and potentially China.  As should be clear, these are very similar to the principal foreign policy challenges facing India today.  In many cases, these are issues that cannot be resolved unilaterally but that are going to require long-term engagement and cooperation not just by the U.S. and India but many of our other allies.  We will need to work together to address these mutual challenges.

In countering terrorism, India has for far longer than America been subjected to a terrorist threat against its nation and, as stated earlier, has engaged its Muslim population in a manner that has not resulted in extremism or militancy despite the potential provocation on its borders.  In the area of WMD and proliferation, given India’s location it is arguably much more susceptible to these threats than is the United States, whether from Pakistan, China, Iran or even North Korea. 

Similarly, India and the United States are necessary partners in dealing with the dual challenges of energy security and environmental degradation.  As India’s energy consumption increases, the two countries will need to work closely to ensure that environmental costs don’t similarly grow and that investment is made on the most advanced equipment.  Given India’s underdeveloped infrastructure there are great opportunities to help India grow taking advantage of new technologies and achieving greater efficiencies that could have significant impacts on worldwide levels of energy consumption and climate disruption.  Finally, India’s role in ensuring the security of the flow of goods, particularly oil, through the Malacca Straits is vital for all nations. [14] 

With regards to the broader Asia region, the overlap of India and America’s interests allows the United States to have a more local reach and impact than might otherwise be the case.  India is highly motivated to build a strong relationship with the government in Afghanistan and ensuring its success; again their long-term interests in this might even surpass those of America.  Equally, the path that China chooses will have a significant impact both on India and the United States and as such, as with many other countries in the region, working together the two nations are likely to have a more powerful effect than independently.[15] 

Finally, it should be also noted that as great democracies, India and the United States have similar world visions and interests in promoting this form of government, albeit through the auspices of the UN.  India provides a very effective demonstration effect for other nations in the region and beyond without many of the sensitivities that the United States brings to the table. 

Notwithstanding these areas of commonality between the United States and India, it is certainly not the case that the two nations see all things alike.  India’s relationship with Iran, their reticence in exporting democracy, and their resistance to taking a more forceful approach with the Burmese junta are all examples where India’s strongest strategic interests and those of the United States are not identical.  Further, given India’s colonial past and their strong history of non-alignment, Indians are extremely wary of appearing to be tied or beholden to America.  While anti-Americanism is waning in India it is still a powerful political lever as the Left Parties have made clear during the recent debate surrounding the civil nuclear deal.  Therefore, where the two nations interests overlap we are likely to see them working together, but the United States should certainly not assume that India will hold a similar position or apply leverage on issues that are of import to the United States alone.  And, trying to apply quid pro quo’s to U.S. actions are only likely to backfire.

Conclusion

Given India’s five principal strategic interests, as it finds its position in the world and lives up to the potential that its character and natural assets imply, it could become a powerful force for transformation.  In the short to medium term, India’s potential for becoming an agent of change is significant in a number of key areas.  Given India’s impressive military and soft-power capabilities, as India builds confidence and finds its voice, I anticipate that it will become more active in helping to create a regional security regime and in pushing stability outwards.  With the completion of the civil nuclear deal, India will have the freedom to take action in promoting nonproliferation objectives out of which until now it has been locked.  In the broad area of counter-terrorism, whether through interdiction, intelligence sharing, military training or teaching about multi-ethnic and religious engagement, India has enormous resources and experience from which to draw.  And finally, and perhaps most importantly for India, in the areas of health, education and agriculture, India has huge gaps to fill.  As the government finds ways to address these problems and disparities, India will have a role to play in teaching and educating others.