Modi's foreign policy blend

With the economy under control – Standard and Poor has recently raised India’s credit outlook to ‘stable’ – Modi is free to indulge in international relations. 

Gauri Khandekar
8 October 2014

Narendra Modi shakes hands with Nawaz Sharif , May 2014. Amrit Kumar/Demotix. All rights reserved.In just four months in office, Indian Prime Minister Narendra Modi has radically transformed Indian foreign policy. Several successful summits with the BRICS (Brazil, Russia, China and South Africa) grouping, Japan, Nepal and Bhutan, and visits to India by leaders from China, the United Kingdom, France, Germany and Australia, among others, were topped up with a long-awaited visit by Modi to the United States.

A man once barred from entering the US, Modi was welcomed to the White House by President Barack Obama and gave an address at Madison Square Gardens in New York, heralding a new era for Indo-US relations. From being a tea-seller at Gujarat’s railway stations to becoming India’s fifteenth prime minister, Narendra Modi is assuredly a real-life Slumdog Millionaire. His charisma, his vision, his passion for Hindu culture, exceptional oratorical skills and unbelievable self-confidence have made him one of the most watched leaders in the world.

Since the beginning of his mandate, Modi has given focus and ambition to India's muffled and ill-defined foreign policy. With the economy under control – India’s stock market has risen by 30%, GDP growth is tracking nearly 6%, and Standard and Poor has recently raised India’s credit outlook to ‘stable’ – Modi is free to indulge in international relations. He has two main foreign policy goals – to consolidate India’s status as regional hegemon in South Asia and to attract the foreign direct investments (FDI) critical for India’s growth.

Modi’s first moves have been directed at increasing New Delhi’s role in the Indian sub-continent. The withdrawal of US and NATO troops from Afghanistan will leave a major regional power vacuum, which Modi’s India seeks to fill. In an unprecedented move, Modi invited all leaders from the South Asian Association for Regional Cooperation (SAARC) to his swearing-in ceremony and held bilateral talks with each of them on his first day in office. In June, Modi made his first foreign visit to neighbouring Bhutan and in August he went to Nepal. He was the first Indian Prime Minister to visit the Hindu kingdom of Nepal in 17 years, where he offered a $1 billion line of credit for infrastructure development and energy projects. India knows it must assume the status of a regional power before it can court global rank.

The hallmark of Modi’s nascent foreign policy has been his ability to make China and Japan compete for investments in India, without upsetting either partner. During his tenure as Chief Minister of Gujarat (2001-2014), Modi travelled twice to Japan and four times to China to woo investments. Modi enjoys a good personal relationship with Japanese Prime Minister Shinzo Abe, who welcomed him with a bear hug in Kyoto during Modi’s five-day trip to Japan in August-September 2014. Japan has elevated its relationship with India to a ‘special global strategic partnership’, pledged $35 billion in investments, and announced it will double its FDI within the next five years. Japan also agreed to build bullet trains and smart cities in India – both pet Modi projects. Although a much-anticipated nuclear energy agreement similar to the one reached with the United States in 2008 was not signed, military ties were significantly strengthened. Both countries agreed to establish a ‘two-plus-two’ security arrangement bringing together foreign and defence ministers, to hold regular maritime exercises, and to continue Japanese participation in Indo-US drills.

For his part, Chinese President Xi Jinping flew to Modi’s hometown of Ahmedabad in Gujarat on the occasion of Modi’s 64th birthday on September 17. Xi offered to invest $20 billion in Indian infrastructure and manufacturing sectors – a dramatic rise compared to the $400 million it has invested throughout the past decade. China will also build high-speed rail links and construct two industrial parks in India.

But India has also for long been concerned about China’s increasing influence. To counter the effects of China’s plans to establish a new ‘Maritime Silk Route’ linking Europe to China via the Indian Ocean, Modi intends to launch ‘Project Mausam’, which will stretch from East Africa to Indonesia, allowing India to gain robust control over the Indian Ocean. Along these lines, on September 15, Indian President Pranab Mukherjee purchased seven new oil and gas blocks from Vietnam in the South China Sea disputed by China.

Modi has pursued a smart foreign policy in the rest of Asia too. On September 6, Modi and Australian Prime Minister Tony Abbot signed a landmark civil nuclear energy deal. And India is preparing to host an India-Russia summit in December 2014.

Modi has also scored some progress in India’s relations with Pakistan, for long tainted by animosity and tension. Since the partition of British India in 1947 and the creation of the republics of India and Pakistan, the two South Asian countries have been involved in several wars, as well as many border skirmishes and military stand-offs, particularly over Kashmir.

The last major breakthrough in Indo-Pakistani relations was orchestrated by the previous Vajpayee-led BJP coalition (1998-2004). On his first day in office, Narendra Modi met with Pakistani Prime Minister Nawaz Sharif. Dialogue was constructive and the two partners agreed to hold foreign-secretary-level talks promptly. However, after Pakistani High Commissioner to India Abdul Basit met with Kashmiri separatists in August (a policy tolerated by previous Congress party governments in India), India called off the scheduled foreign-secretary talks a week before they were to take place.

With the west, Modi’s achievements have been mixed. Modi has a ‘sweet and sour’ relationship with the west, tainted mainly because of his ostracism by the US and European governments following the Gujarat massacre in 2002. Thus far, the European Union (EU) has remained absent from Modi’s agenda. Lack of interest, incongruent foreign policy views and inconclusive negotiations of the proposed bilateral free trade pact have ebbed the will to engage. So far, there are no plans to hold an EU-India summit in 2014, despite 10 years of the EU-India strategic partnership (signed in 2004) and the golden jubilee of relations (established in 1964).

In the US, while Modi eschewed joining any ‘American alliances’, be it in the Middle East against Islamic terrorism or in Asia against China, he has managed to revitalise US interest in India. Both sides reached an agreement to extend their defence cooperation for another 10 years and expand trade and investment especially in India’s defence sector. Modi also met with several business leaders and legislators to promote the many business opportunities his country has to offer.

Modi’s foreign policy debut as India’s Prime Minister has been tremendous. Not only has Modi’s India attracted the attention of the leaders of every major world power, but his unique blend of business acumen and uber pragmatism seems to be a powerful tonic for his country’s success. If the trend continues, Modi’s premiership could herald the arrival of global power India.

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