C3S Paper No.2085
Prime Minister Narendra Modi spelled out his vision for India in his Independence Day address on August 15 at New Delhi. From this and from his speeches at various national forums, major components of the vision would appear to be:[i]
Boost India’s industrial growth by inviting investors and manufacturers from all over the world to invest to infrastructure building and to make things in India. This would unleash the entrepreneurial spirit of Indian youth to work towards manufacturing in the country and generate jobs.
To upgrade digital infrastructure as a priority to upgrade information and services to the people ‘in a timely and effective manner.’ Smart cities would be planned to towards this end.
Public services at the grass root would be improved to provide better governance, quality of education, healthcare and clean environment through empowered administration and peoples’ participation while maintaining social cohesion with gender equity.
To retain India’s strategic influence in the Asia-Pacific region and enlarge it in keeping with its growing global economic power.
The Prime Minister launched a series of foreign policy initiatives within the first 120 days in office. These included visits to Bhutan and Nepal in India’s immediate neighbourhood, attending the BRICS summit at Rio de Janeiro and visits to Japan and the U.S. In New Delhi he received a number of visiting foreign dignitaries. Notable among them were the Chinese President Xi Jinping and the Australian Prime Minister Tony Abbott.
Breaking away from India’s traditional laid back foreign policy mould, Modi’s foreign visits and interactions were well publicized and conducted with a lot of pizzazz. He was proactive, clear and assertive. Of course, his style grated the sensitivities of some of the experienced senior diplomats and bureaucrats. They found it loud and at times abrasive and his speeches unabashedly nationalistic. However, Modi managed to catch the attention of people and leaders wherever he went because he could relate to the common people and make India relevant to them. Moreover, the emerging international geo-strategic environment has made global leaders take notice of India’s new and highly visible leader as never before for their own reasons.[ii]
Both at home and abroad Modi articulated India’s desire to be treated on equal terms by big powers like the U.S., China and Japan. He assured that small countries would be treated as equals regardless of their size. There were two common threads running in all his interactions India’s readiness to build a cordial and harmonious relationship with all nations; and invitation to international business and investment to benefit from his initiatives to revamp Indian economy by building a better business environment. His objective was clearly to attract foreign investment to boost in Indian manufacturing and infrastructure industries without sacrificing India’s interests as the Make in India slogan emphasized.[iii]
His readiness to listen to the business community on restructuring the business environment and bureaucracy to make it easier to do business in India showed his primary aim was to market India as a favoured destination for foreign business and investment. It would be reasonable to expect this would apply even to countries which do not enjoy a cordial strategic equation like China and Pakistan.
Modi’s visit to Bhutan and Nepal within first few weeks in office appeared hastily planned, allowing little time for the hosts to be ready. But read along with his invitation to SAARC leaders (including Pakistan Prime Minister Nawaz Sharif) to attend his swearing-in as Prime Minister, his message was clear: India’s first priority in foreign relations would be to improve the bonding with India’s South Asian neighbours. Modi’s priority is understandable because India’s political, economic and strategic relations had suffered neglect under the earlier regime. With China making huge inroads in the neighbourhood, India’s strategic influence has become hostage to enlarging Chinese presence in South Asia.
The invitation extended to Pakistan Prime Minister and cordial meeting Modi had with him showed his readiness to resume talks with his Pakistani counterpart which had come to a halt sometime back.[iv] Of course, there was no progress beyond that presumably due to the Pakistan Prime Minister’s internal problems with the army which continues to influence foreign policy decisions of the government.[v]
Big power initiatives
Modi’s talks with Prime Minister Shinzo Abe of Japan, President Xi Jinping of China and President Barak Obama had very large strategic content. Equal weightage has been given to economic cooperation as well. They brought out the contours of Modi’s foreign policy discourse. Apart from discussing bilateral issues linked to visa restrictions, strategic initiatives and trade and commerce, he discussed multilateral issues like regional security, freedom to interact and transact, global warming and intellectual property rights. His talks with the visiting Australian Prime Minister Tony Abbot in New Delhi resulted in an agreement to import uranium from Australia for India’s civil nuclear programme. This fitted well in the overall strategic security picture he was mapping.
Former Sri Lankan diplomat Dr. Kathira Pathiyagoda analyzing India’s soft power in an article in The Diplomat found that with “some diplomatic craftsmanship, Delhi can convert its somewhat ethereal values-based soft power advantage into hard strategic and economic gains. Modi’s government seems to have recognized this and is building on Congress’ initiatives to enhance India’s public diplomacy toolkit. India’s soft power has rare characteristics when compared with the other great powers of the emerging multi-polar world: U.S., China, Russia, Japan and Europe (as a unified entity).”[vi]
He found India’s relatively neutral, non-threatening image would make “India a uniquely attractive great-power partner for countries looking to hedge against future fallout between the U.S. and China, and not wanting to antagonize either superpower. Australia has chosen a wise time to solidify ties with one of the world’s most dynamic rising powers.” Despite Dr Pathiyagoda’s positive observation Modi is likely to find the task of balancing India’s strategic relationships with the two antagonists – Japan and China – a tough foreign policy challenge. And if the U.S.-China relationship also worsens, it could get even more complicated.
Relationship building with Japan
Modi has been enjoying a close personal equation with Abe even before he became the Indian Prime Minister. He chose Japan as the first overseas destination outside India’s immediate neighbourhood. Abe appreciation of this gesture found a mention in his Joint Statement with Modi.[vii] The Joint Statement also mentioned Modi’s decision to visit Japan first as “a reflection of Japan’s importance in India’s foreign policy and economic development and her place at the heart of India’s Look East Policy.” On the other hand, though President Xi Jinping was keen to visit India for his formal meeting with Modi. However, his visit had to be postponed at India’s request and he met Modi only after the Indian Prime Minister came back from Japan. The importance Modi attached to meeting with Abe first would not be missed by China.
Modi courted Japanese business with the mantra of ‘Make in India’ and 3Ds (Democracy, Demography and Demand) that make India best place to do business. There are mixed views about the results achieved by Mr, Modi in Japan. The Economic Times’ list of ten takeaways from Mr. Modi’s Japan visit include the upgrading of Special Strategic Global partnership, which has ominous portends for China in the context of its ongoing confrontation with Japan.[viii]
The Abe-Modi Joint Statement suggestively titled “Tokyo Declaration for India-Japan Strategic and Global Partnership” said “a closer and stronger strategic partnership between India and Japan is indispensable for advancing peace, stability and prosperity in the world, in particular, in the inter-connected Asia, Pacific and Indian Ocean Regions.” The statement also underlined the “importance of the 2 plus 2 dialogue, involving Foreign and Defence Secretaries for their growing strategic partnership,” and the decision to seek ways to intensify this dialogue indicating the future course for chartering India-Japan strategic relationship.[ix] But Modi is unlikely to be swayed by Abe in entering into a multilateral strategic arrangement with Japan as it would inevitably be pitted against China with which India shares nearly 4000 km of border; moreover it would not further his agenda to leverage China’s economic muscle for India’s economic development.
The Joint Statement’s reference to the “enormous future potential for transfer and collaborative projects in defence equipment and technology” between the two countries, on cooperation in US-2 amphibian aircraft and its technology and launch of working level consultations between the two countries to promote defence equipment and technology cooperation assume importance in view of India’s decision to open up defence sector for private sector with higher foreign participation.
Such statements frequently referring to strategic relationship drew serious attention from China. Modi’s statement: “Everywhere around us, we see an 18th Century expansionist mindset: encroaching on another country, intruding in others’ waters, invading other countries and capturing territory” while addressing business leaders in Tokyo with strong connotations for China’s power assertion in South China and East China seas.
This was perhaps a little too much for Chinese media. This was reflected in the editorial of Global Times, which reflects the China’s Communist Paty(CCP)’s views, on September 2, 2014 aptly titled “Modi-Abe intimacy brings scant comfort”.[x] The editorial said: “Japanese and western public opinion view his remarks as a clear reference to China, although he did not mention China by name. This interpretation made some sense because Modi is more intimate to Tokyo emotionally. Therefore, it is perhaps a fact that he embraces some nationalist sentiments against China.” And probably this is what makes China a little less comfortable and uncertain with Modi than with his predecessor Dr Manmohan Singh.
Overall, Modi’s visit to Japan probably achieved less than what he aimed at. But Japan’s promise to invest $ 34 billion in India spread over the next five years gave a boost to Mr. Modi’s to kick start Indian economy. It is significant that they were mostly in sectors where China would be in competition. On the other hand, the much awaited India-Japan civilian nuclear deal did not come through; the two leaders only agreed to accelerate talks on a nuclear energy pact. But Japan’s interest in building the strategic relationship and cooperating with India in defence technology and manufacture are important inputs to upgrade India’s military capability.
Reviving India-U.S. strategic partnership
Prime Minister Modi’s two days of talks with President Obama during his visit to the U.S. removed any doubts the Americans might have had about Modi’s readiness to mend relaations with the U.S. Modi and Obama agreed to deepen U.S.-India cooperation on maritime security to ensure freedom of navigation in what Reuters news agency said amounted “to a response to China’s muscle flexing in Asia.”[xi] The Modi-Obama Joint Statement said Obama and Modi agreed “to intensify cooperation in maritime security to ensure freedom of navigation and unimpeded movement of lawful shipping and commercial activity, in accordance with accepted principles of international law.”[xii] It is interesting to note the similarity in the wording of this part to the Modi-Abe Joint Statement.
The Joint Statement also noted the “decision to renew for ten more years the 2005 Framework for the U.S.-India Defense Relationship and directed their defense teams to develop plans for more ambitious programs and activities. The two leaders also agreed to reinvigorate the Political-Military Dialogue and expand its role to serve as a wider dialogue on export licensing, defense cooperation and strategic cooperation.” The reference to establish a Task Force “to expeditiously evaluate and decide on unique projects and technologies which would have a transformational impact on bilateral defence relations and enhance India’s defence industry and military capabilities” is a key indicator of the future course of Indo-U.S strategic relationship. .
There was huge expectation from President Xi Jinping’s visit to India because China was the first to reach out to Modi soon after the elections. Premier Li Keqiang was the first foreign dignitary to call up Modi to congratulate him after the election. There was adequate preparation for the meeting with Foreign Minister Wang Yi visiting India in June 2014. Both President Xi and Prime Minister Modi had expressed their desire to build harmonious and cordial relations when they met briefly on the sidelines of BRICS Summit at Rio de Janeiro on July 14.
Modi broke the tradition to receive the Chinese President in Ahmedabad instead of the national capital. Presumably the idea was to show case what has been achieved by Chinese investments in Gujarat to prime him for extending it to the rest of India. It had all the paegentry we are increasingly seeing in the Prime Minister’s initiatives to create a less formal atmosphere. It went off well with the Chinese agreeing to invest $6.8 billion in two industrial parks in Gujarat and Maharashtra. So this vetted the expectations from the Chinese when President Xi met Prime Minister Modi in formal talks in New Delhi.
Their talks in Ahmedabad and New Delhi were held in a cordial atmosphere and both sides discussed the full range of issues including political and security issues, economic relations and people to people contact. The positive take was the Chinese agreeing to invest $20 billion in next five years and President Xi agreeing to take “concrete steps to attend to Indian concerns on slowing down in trade and India’s worsening trade imbalance. He also assured Modi to improve market access and investment opportunities to Indian companies.
But the positive vibrations generated earlier were disturbed by the news of over 1000 Chinese troops intruding across the line of actual control in the Ladakh region even as the two leaders were in discussion on September 18. This was evident from the body language of the two leaders at the joint media interaction after the talks. A significant aspect of the Xi-Modi talks was that there was no joint statement.
In his statement at their joint press interaction, Modi said “we discussed how to strengthen cooperation, we have also exchanged views on outstanding differences in our relationship in a spirit of candour and friendship.”
Touching upon the border intrusion he said India’s “serious concern over repeated incidents along the border” were raised in the discussions. “We agreed that peace and tranquility in the border region constitutes an essential foundation for mutual trust and confidence and for realizing the full potential of our relationship. This is an important understanding, which should be strictly observed. While our border related agreements and confidence building measures have worked well, I also suggested that clarification of Line of Actual Control would greatly contribute to our efforts to maintain peace and tranquility and requested President Xi to resume the stalled process of clarifying the LAC. We should also seek an early settlement of the boundary question.” This is an unmistakable declaration of what the two countries have to resolve if China wants durable friendly relations with India.[xiii] President Xi had no worthwhile reply to explain the intrusion and his assurance on troops withdrawal came into effect only after a few days.
It must have come as a disappointment for President Xi that he could not carry Modi on joining the 21st Century Maritime Silk Road, for which he has already bagged the support of Maldives and Sri Lanka. China has invested a lot of resources to create strategic assets for the project. Without Indian participation it would not be very profitable in economic terms. Even for the Bangladesh-India-China-Myanmar (BICM) Economic Corridor vigorously promoted by China, Modi expressed only conditional support. He said India would consider the project when “peaceful, stable and cooperative environment” is created in the region.[xiv]
Prime Minister Modi’s foreign policy initiatives show increasing role of multi-lateral influences impinging upon bilateral relations with not only neighbouring countries but with big powers as well. China is challenging Abe’s desire to give Japan a greater strategic role in Asia-Pacific with increasing assertiveness bordering on belligerence in South China and East China seas.
Prime Minister Modi’s foreign policy forays have set the stage for triggering big power participation in realising his vision of India emerging as a strong economic power. While a lot of promises have been generated both in India and in Japan, the U.S. and China substantive progress can be expected if only India takes the follow up actions expeditiously. Investments promised by Japan (nearly $34 billion) and China ($20 billion + $ 6.8 billion in Gujarat) over the next five years are no small amounts. With the U.S. also holding out promises, Modi’s achievements in such a short time are substantial. And with Japanese investment declining rapidly in China (and doubling in ASEAN countries) it would be logical to expect Japan to enter India in a big way.
But these economic initiatives can achieve productive results if only industry and business friendly structural frame is evolved with suitable amendments to existing labour and land acquisition enactments. There is greater need for coordination and cooperation between ministries to produce results with the same urgency Modi has been showing in his initiatives.
On the strategic front, the Indian Prime Minister is facing bigger challenges. The Modi-Abe personal equation while benefiting India economically, comes with Abe’s desire to rope in India in a strategic alliance against China. In the words of Stephen Harner, “Abe has been tireless in pursuing throughout the Asian region his “Proactive Contributor to Peace” anti-China coalition building strategy. Much more than the Philippines or Vietnam, recruiting India into a coalition would be strategically game-changing.”[xv]
China’s strategic space in South Asia is poised to increase when the 21st Century Maritime Silk route and the Silk Road Economic Belt (to the West) become fully operational. “A belt and a road” as President Xi Jinping sees is perceived as “the path to mutual benefit and win-win cooperation.” This would enable China not only to productively use the land and maritime infrastructure assets it had been creating in Pakistan, Bangladesh, Myanmar, Maldives and Sri Lanka but also increase its strategic access to South Asia and Indian Ocean Region (IOR). This has serious strategic connotations for India. This is more so in Indian Ocean security where India had been a reckonable naval power. As the PLA Navy modernizes, it is increasingly venturing into IOR increasing its threat potential.
Although China is poised to further eat into India’s strategic space and influence, it wants India to join the Maritime Silk Road and the BCIM eastern economic corridor. It would open up the vast Indian markets for Chinese business. India’s presence would remove the stigma of Chinese expansionism and improve its international image.
Despite the lack of progress in resolving the contentious issues between the two countries, both Xi and Modi are keen build a friendly relationship that would benefit the economies of both the big powers of the region. While this is an attractive proposition for India, China will have to go the extra mile to speed up the border talks, remove the lopsided trade balance in favour of China and remove trading restrictions on Indian products and investment.
These changes in the Asia-Pacific environment would require critical examination to calibrate India’s strategic relations and formal interactions with Japan, the U.S. and China. It would help India to structure its stand on both bilateral and multilateral issues that affect its national interests with the three big powers as well as with India’s neighbours.
India knows its strategic relations with Japan will always be conditioned by Japan’s umbilical relations with the U.S. In case of any India-China confrontation, this could act as rider on Japan’s support for India (unless of course in the unlikely scenario of Japanese state also facing a Chinese threat at the same time). This limits the scope for India-Japan strategic relations to flourish.
Lastly, as the Global Times observed it was South Asia “where New Delhi has to make its presence felt. However, China is a neighbour it can’t move away from. Sino-Indian ties can in no way be counterbalanced by the Japan-India friendship….Both as new emerging countries and members of BRICS, China and India have plenty of interests in common. Geopolitical competition is not the most important thing for the two countries, at least at present (emphasis added).”[xvi] This is perhaps the best common sense argument for shaking hands with China while keeping the powder dry.
[Col R Hariharan, a retired MI specialist on South Asia, is associated with the Chennai Centre for China Studies and the South Asia Analysis Group. E-mail: email@example.com Blog: http://col.hariharan.info ]
Written on October 15, 2014
Courtesy: World Focus, December 2014 issue firstname.lastname@example.org
[i] PM’s address to the nation on 15th August –Narendra Modi, Aug 15, 2014 www.narendramodi.in
[ii] Michael Schumann, September 18, 2014 “Why the world’s powerful leaders really love India?” http://time.com/3396865/china-india-japan-narendra-modi-xi-jinping-shinzo-abe-trade-economics-asia/
[iii] ‘PM Modi launches ambitious Make in India project’ September 25, 2014 http://indiatoday.intoday.in/gallery/pm-modi-launches-ambitious-make-in-india-project/1/12900.html
[v] Ankit Panda, ‘India-Pakistan talks cancellation; what went wrong?’ August 10, 2014 http://thediplomat.com/2014/08/india-pakistan-talks-cancellation-what-went-wrong/
[vi] Kadira Pathiyagoda, September 17, 2014, ‘India’s Soft Power Advantage’ http://thediplomat.com/2014/09/indias-soft-power-advantage/
[vii] Tokyo Declaration for India-Japan Strategic and Global Partnership, September 1, 2014 http://www.mea.gov.in/bilateral-documents.htm?dtl/23965/Tokyo+Declaration+for+India++Japan+Special+Strategic+and+Global+Partnership
[viii] ‘PM Modi’s visit to Japan: 10 takeaways’ September 2, 2014 http://articles.economictimes.indiatimes.com/2014-09-02/news/53479892_1_india-and-japan-bullet-trains-pm-narendra-modi/2
[ix] Stephen Harrier, “A Japan-India Anti-China Alliance? No. This is about Economics” http://www.forbes.com/sites/stephenharner/2014/09/03/a-japan-india-anti-china-alliance-no-this-is-about-economics/ “Under the “2+2” format, the annual agenda inevitably focuses on security and defense issues, with the agenda and policy proposals emanating almost entirely from defense and security agencies. Diplomacy and foreign affairs agencies are left playing largely public relations roles.”
[xi] ‘Obama, Modi work to deepen improving U.S. –India ties’ October 1, 2014 Washington, http://in.reuters.com/article/2014/10/01/modi-obama-meeting-usa-india-idINKCN0HP1I320141001
[xii] U.S.-India Joint Statement, September 30, 2014 http://www.whitehouse.gov/the-press-office/2014/09/30/us-india-joint-statement
[xiv] Dr Srikanth Kondapalli, “Five big takeaways from Xi Jinping’s visit to India” http://articles.economictimes.indiatimes.com/2014-09-19/news/54109239_1_prime-minister-narendra-modi-president-xi-jinping-maritime-silk-road
[xv] Stephen Harner ibid
[xvi] Global Times September 1, 2014, Modi knows China relations more important in long run,