2016 was a year of geopolitical surprises. The international tribunal’s stinging verdict against China in the South China Seas dispute, the British vote for quitting the EU, the election of Donald Trump as President of the United States: none was anticipated. But all of them will reverberate in the months and years ahead. As world politics enters a period of lesser predictability and perhaps stability, it is imperative that New Delhi makes a clear-eyed assessment of risks and chances.

In the first half of his prime ministerial tenure, Narendra Modi invested considerable time and energy in foreign policy. This was partly because the Indian economy was hamstrung by low domestic investment – a state of affairs that continues to date despite higher inflows of Foreign Direct Investment in 2015-16 compared to the previous year.¹ And it was partly because the prime minister wanted to project India as a ‘leading power’ – one that would play a more proactive role on the global stage.² Yet, for all the energy and activism, the outcomes so far have been underwhelming.³ It is against this backdrop that we need to consider the altered strategic landscape that now stretches ahead of New Delhi. This essay does not aim to cover all aspects of foreign policy. Instead it will focus on the challenges and opportunities in India’s engagement with the great powers: the United States, China and Russia.

India’s ties with the United States have been on a steady upward curve since Prime Minister A.B. Vajpayee’s move to craft a strategic relationship in the aftermath of the 1998 nuclear tests. Still, it is fair to say that Prime Minister Modi has done more than any of his predecessors to place India in strategic proximity to the United States. During his very first visit to Washington, Modi agreed to issue a joint statement toeing the American line on Asia-Pacific security, especially in the context of an increasingly assertive China. As former National Security Advisor Shivshankar Menon notes in his recent book, while India and the United States ‘have always fought shy of saying that their partnership is to balance China, it is clear that the rise of China was one of the major spurs.’⁴ The Modi government was unwilling to be bound by the prudential considerations of the past, which it regarded as a mark of diffidence. Any lingering doubts were dispelled during President Barack Obama’s visit to India the following year when the two sides issued a separate statement on Joint Strategic Vision for the Asia-Pacific and the Indian Ocean Region.⁵

 

The prime minister also worked to assuage American concerns on an issue where they felt hard done by. This was the Indian law relating to liability for suppliers of nuclear reactors and components. All along, the American nuclear industry was opposed to the provision for channelling any liability to the supplier, as this would expose them to litigation in the event of an accident. Washington claimed that the law was especially unfair given the United States’ role in securing India the opportunity for nuclear commerce. The UPA government was unable to dilute the law owing both to domestic sensitivities and to its lack of parliamentary majority. The present government saw no difficulty in doing so – even if it meant rewriting Indian laws to give American companies protection of a kind that their own laws do not afford them. But this was the price for locking India in a strategic embrace with the United States.

Thereafter, New Delhi pressed ahead with another accord that had been on the anvil for a while: the Logistics Exchange Memorandum of Agreement. The previous governments had deemed the accord, which allows both sides access to each other’s bases for repairs and supplies, as a step too far. It would signal India’s willingness to enter into agreements that hitherto only American allies had signed. The name of the agreement was tweaked to soothe public sensitivities in India – and the text remains under wraps. While there are reports of delays in operationalizing this agreement, the two sides have gone ahead and concluded yet another accord whereby the United States designates India as a ‘Major Defence Partner’. This special moniker is meant to facilitate defence trade and technology sharing with India and raise it to a level at par with that of the United States’ closest allies.⁶

 

The urgency to conclude these agreements stemmed from the possibility of a Donald Trump presidency. The prime minister was evidently keen to leverage his avowed friendship with President Obama to lock in as many deals as possible to ensure close and continued strategic ties with the United States. At this writing, it is unclear if Trump will accord as much importance to India as both his predecessors have. Modi will surely be banking on his ability to establish a personal rapport with Trump. And there is no reason to assume that there will be a dramatic shift in Washington’s stance towards New Delhi. Nevertheless, we are entering uncharted waters.

While there is a degree of uncertainty in where Indo-US strategic relations are headed, there is greater predictability in economic ties. The Trans-Pacific Partnership (TPP), a large trading pact that excluded China and India, will now be consigned to the dustbin of history. This provides a reprieve to India inasmuch as the TPP would have created a series of non-tariff barriers for India in accessing key Asian economies. But the burial of the TPP will not be accompanied by a revival of the WTO during Trump’s tenure. Even as Trump looks to negotiate fresh bilateral deals, there is little reason to assume that India is in any position to do so.

All the currently outstanding issues in India’s economic ties with the US are likely to aggravate in the months ahead. These include, Intellectual Property Rights, Bilateral Investment Treaty, Totalization Agreement and H1-B visas for Indian workers. Trump’s efforts to retain jobs onshore will also have a wider negative impact on the Indian service industry. Above all, his erratic style of intervention in particular sectors and companies – already on show – is likely to make our economic ties with the United States much less stable and predictable. The US-led globalization of the past twenty-five years, a system from which India benefited considerably, is now behind us.

 

If New Delhi’s ties with Washington are entering a more tentative phase those with Beijing may be poised at the edge of greater turbulence. When the Modi government took office, observers in India and China expected these politically strong and ‘decisive’ leaders to inject a dose of dynamism into bilateral ties. But these hopes have curdled. The Chinese dealt the first blow when they initiated a stand-off even while President Xi Jinping was visiting India. This was evidently intended to test the nerves of the new Indian leadership. In a bid to recover political ground, the Modi government took the ill-advised tack of demanding a clarification of the Line of Actual Control. The prime minister himself made a pitch both during President Xi’s visit and subsequently during his own visit to Beijing.

New Delhi had evidently not thought through this position. India had sought clarification of the LAC in the mid-1990s as well. The Chinese were reluctant, for they believed that a mutually agreed LAC would become the de facto border. In the event, they agreed to exchange maps showing each side’s conception of the LAC in the Ladakh sector. Once they saw the maximalist claim advanced by India, the Chinese quickly put the exercise on ice. By 2002, it was clear to Prime Minister Vajpayee that this was a nonstarter. As a consequence, during his trip to Beijing the next year, Vajpayee agreed to begin political negotiations on the boundary proper by appointing Special Representatives (SRs). Not surprisingly, when New Delhi sought to flog the dead horse of LAC clarification the Chinese politely rebuffed the suggestion. What is worse, the Modi government tarried on appointing a Special Representative and allowed the process to lose momentum.

 

In retrospect, it seems clear that the Modi government’s lurch towards the United States was at least partly driven by the surprise administered by Beijing and the subsequent inability to place relations on an even keel. It was in this context that the need was felt for greater ‘external balancing’ against China. But the manner in which New Delhi accommodated itself to Washington exacerbated the problems with Beijing. In a series of joint statements with Washington, New Delhi has called for upholding ‘freedom of navigation’ in the South China Seas. But the United States uses ‘freedom of navigation’ as a pretext to challenge China’s territorial claims in the region – even while disavowing any stance on these disputes. What’s more, New Delhi continues to espouse this position without taking into account China’s repeated avowals that it has no interest in obstructing the passage of commercial shipping through the area – as if China will cut its nose to spite its face.

The Chinese, for their part, have abandoned any semblance of balance in their dealings with India and Pakistan. China is unwilling to take on board India’s concerns about terrorism because Pakistan seems more important to it now than ever before: to secure overland access to the Indian Ocean, to roll-out the Belt and Road Initiative, to contain separatism in Xinjiang, to keep a weather-eye on western military technology. Nor is China prepared to accommodate India in wider international forums such as the Nuclear Suppliers Group.

It must be said though, that India’s handling of the drive for NSG membership reflected poorly on the government. On the basis of patently inadequate preparation, the government put the prime minister’s standing at stake by reaching out to the Chinese President. Faced with short-term failure, New Delhi also reacted by hitting out against the Chinese for being the sole reason why India was denied membership. Events since have shown this to be a mistaken reading of a more complex situation. New Delhi has done well to back off from that position and has since sought to find common ground with Beijing. But it needs to do more to restore our relations with China to an even keel. Admittedly, this is not a task for India alone. But as the weaker power it is incumbent upon us to be more agile.

 

All this acquires a measure of urgency because our traditional partner in balancing against China is no longer willing to play that role. Indians tend to be somewhat nostalgic about Russia – as Modi told President Vladimir Putin when they first met, every Indian child knows Russia as the country’s best friend. Although India’s relationship with the Soviet Union and later Russia was never quite rosy, there was a convergence of strategic interests from the late 1960s owing to common concerns about China. Even before the collapse of the Soviet Union, Mikhail Gorbachev had sought a thaw in Moscow’s ties with Beijing. From the early 1990s, it was evident that Russia was in relative decline vis-à-vis China. At a time when the Chinese economy boomed from the embrace of globalization, Russia experienced economic free-fall owing to ‘shock therapy’ and demographic decline thanks partly to vodka.

 

During these years, Russia’s own outlook was restricted to its periphery and its ties with India became all but exclusively focused on defence supplies. Still, Moscow remained an important partner because it was willing to provide India with military technology that it would not pass on to China. With the onset of the crisis in Ukraine, Russia’s orientation underwent a significant shift. Even as Moscow began to flex its muscles in Ukraine and later in the Middle East, the confrontation with the West and ensuing economic sanctions forced it to rely heavily on Beijing for economic assistance and financial flows. The Russo-Chinese entente has a clear anti-American thrust, but it has knock-on consequences for India. Think of the joint Sino-Russian maritime exercises in the South China Sea, while India undertakes similar exercises with the United States and Japan.

More worrying for India has been Russia’s newfound relationship with Pakistan. The sale of Russian helicopters to Pakistan was followed up by military exercises between the two armies. Much to India’s chagrin these exercises were conducted in the wake of a terror strike by Pakistani outfits. India’s remonstrations ensured that these exercises would not be conducted in Pakistan occupied Kashmir, but the diplomatic embarrassment was undeniable. The Russians have since insisted that they need to work with Pakistan in order to contain the threat posed by the Islamic State. But nobody seems to think that the scale of this threat warrants such a move on Russia’s part. More recently, Pakistan has acceded to Russia’s request to use the Gwadar Port. Whether this is a prelude to greater Russian participation in the China-Pakistan Economic Corridor remains to be seen. But New Delhi can no longer bank on a predictable Russian posture in dealing with China, Pakistan and Afghanistan.

 

Bilateral ties apart, New Delhi will have to demonstrate greater foresight and flexibility in moving on the chessboard of great power politics. The Russia-China entente is only one instance of the challenges that lie ahead. Equally, if not more tricky, will be developments on the US-Russia and US-China fronts. Washington’s relations with Moscow could improve under Trump’s watch. For one thing, Trump has stated several times that he could do business with Putin. The allegations about Russian meddling in US elections to help Trump are only likely to strengthen the new president’s desire to show some progress with Russia. For another, Trump’s views on NATO are more palatable from Moscow’s standpoint. Finally, Trump may take a more benign view of the Russian role in Syria and the fight against the Islamic State. If US-Russia relations do improve, then it might lessen Moscow’s dependence on China and so introduce more flexibility in the India-China-Russia triangular relationship. Conversely, some potential moves by Trump – such as reimposing sanctions on Iran – might actually drive Russia and China closer together.

Of greater consequence to India will be Trump’s policies towards China. He has already started off on a sour note. Apart from his repeated insistence on imposing tariffs on Chinese exports to the US, Trump has also criticized China’s island-building activities in the South China Sea. More importantly, he has said that the United States might not adhere to a ‘One-China Policy’ unless Beijing makes concessions on trade and other areas. If followed through, this will result in a major rupture. Even if Trump shows more restraint in office, trade and geopolitics in Asia are likely to be more volatile. The Chinese will double down on their Belt and Road Initiative and seek to integrate Asia under their own leadership. So far, New Delhi has no credible response to this policy.

 

Great power politics as it is likely to play out in the years ahead is unfamiliar terrain to New Delhi. From Independence through to the end of the Cold War, India was largely able to sit out a bipolar confrontation between the superpowers. India’s own economic insulation from the world was matched by the absence of any serious trade ties between the blocs led by the United States and the Soviet Union. During the next two and a half decades, India managed to accommodate itself to a unipolar world and globalization under American hegemony. Now India will have to operate in a multipolar order with at least three great powers and an integrated global economic order that is however racked with tensions. This is a type of great power politics not seen since 1914. Add to this the new American President’s ignorance, inexperience, parochialism and poor choice of advisors, and the conclusion is unavoidable: New Delhi can only expect the unexpected.

 

Footnotes:

1. World Investment Report 2016. United Nations Conference on Trade And Development, Geneva, 2016.

2. C. Raja Mohan, Modi’s World: Expanding India’s Sphere of Influence. HarperCollins, New Delhi, 2015.

3. For a brief but cogent assessment, see, KantiBajpai, ‘Overturned Tenets: India’s Tottering Foreign Policy in the Age of Trump’, Times of India, 3 December 2016. http://blogs.timesofindia.indiatimes.com/toi-edit-page/overturned-tenets-indias-tottering-foreign-policy-in-the-age-of-trump/

4. Shivshankar Menon, Choices: Inside the Making of India’s Foreign Policy. Penguin Random House, New Delhi, 2016, p. 82.

5. http://www.mea.gov.in/bilateral-docu-ments.htm?dtl/24728/USIndia_Joint_Strategic_Vision_for_the_ AsiaPacific_and_Indian_Ocean_Region

6. Sushant Singh, ‘India, US Finalise Major Defence Partner Agreement’, Indian Express, 9 December 2016. http://indianexpress.com/article/india/india-us-major-defence-partner-agreement-manohar-parrikar-ashton-carter-4418019/