OP-ED MAY 28, 2014
ECONOMIC TIMES
SUMMARY
If India makes a comeback, it will primarily be determined by what Prime Minister Narendra Modi does at home. But his success will hinge considerably on whether India’s foreign policy can nurture the external environment that enhances India’s prosperity, safety, and place in the world.
Dear Madame Minister,
Congratulations — you've got the job, now the work begins! Only recently, India was seen abroad as a wild success. Now it looks like just a flash in the pan. Obviously, the economic downturn has produced this dismay. But that doesn't make foreign policy optional.
SENIOR ASSOCIATE
SOUTH ASIA PROGRAM
To the contrary. If India has to make a comeback, that will no doubt be determined by what Prime Minister Narendra Modi does at home. But his success will hinge considerably on whether your ministry can nurture the external environment that enhances India's prosperity, safety and place in the world. Your work is cut out for you here. So, from a friend of India in Washington, a few thoughts.
First, remember that the business of India is business. If India is to protect its interests abroad, it can do so only on strong foundations. Nations that lack material power may occasionally command attention — as India did for a while in the 1950s — but this does not endure.
I think the PM understands this clearly. Your job is to help him out. But how? A great place to start would be by emphasising commercial diplomacy. Postwar history suggests that, beyond domestic policy, high and sustained growth is owed to foreign trade. Hopefully, new economic policies will make India a more inviting place for outsiders to do business. But you must push their external components aggressively.
If Modi eventually merges the commerce ministry with your own, you will have a powerful bureaucratic instrument. But even if he does not, your ministry should work to lead India's trade negotiations. Make these a success and you will be shocked at how quickly India enjoys renewed attention.
Focus on three things here. To begin, press hard to expand South Asian economic integration. India will come out vastly ahead, becoming the tide that lifts all boats. It might even distract your neighbours from their political grievances against you! Follow that by pushing for real preferential trade agreements (PTAs). Most current Indian PTAs are worthless.
For all the years spent negotiating them, they have produced meagre returns. No surprises here because they don't compel genuine factor reallocations domestically to maximise the gains from trade. So be bold and go for real PTAs, not fakes. Finally, think seriously about US Indian trade relations. Despite the baseless talk about American decline, the United States is still the world's largest investor and its most innovative engine.
Therefore, complete the bilateral investment treaty expeditiously and start talking about a PTA.
Besides the strategic benefits, there's a big economic reason for doing so: both our countries are furiously negotiating PTAs with others, but not with each other. If this continues, we'll end up in a situation where each finally discriminates only against the other — that would be crazy and, eventually, worse for India. So think PTA or, failing which, entry into the Trans-Pacific Partnership.
Second, even if India's first business is business, it is not the only business. Prioritise managing your neighbourhood. India, unfortunately, has to cope with all its neighbours' problems, not to mention the security threats that emerge from many of them. India's relations with Bangladesh, Bhutan, Maldives, Nepal and Sri Lanka are in fine-to-reasonable shape, but you need to reassure them all about India's good intentions and its desire for constructive engagement.
Ditto for Pakistan and China — but don't be starry-eyed here. Threats from both will persist.
The Pakistan Army is still deeply suspicious of India and will continue supporting terrorist groups, while building up its nuclear forces. No prizes for guessing against whom. Yet you must work with Nawaz Sharif: he values a productive relationship with India and needs it for his success at home — which is in your interest.
China will be even trickier. Despite growing economic links, Chinese conventional and nuclear threats to India, and perhaps even territorial problems, will increase, becoming worse over time. Dealing with these challenges, just like Pakistan, will require persistent engagement and strong deterrence.
And Afghanistan after 2014 remains an open question: India has already made sterling contributions to Afghan reconstruction — now is not the time to let up.
Get the neighbourhood right, and India is freed to play on the world stage. Get it wrong, and you lose the power you could have deployed elsewhere.
Remember that whenever you are advised to do something "tough". India, surely, mustn't become a doormat, but think about how the country comes out at the end of the series, not simply the first innings. PM Modi has set a welcome precedent by inviting SAARC leaders for his swearing-in. Build on that: bears are best attracted by honey, not vinegar.
Third, forget slogans like "nonalignment" and "strategic autonomy," concentrate instead on maximising Indian power.Remember that only the powerful are truly autonomous: whatever the commentariat may say, a country does not enjoy autonomy because it screams the phrase.
If India therefore is to become powerful, it must rethink how it approaches its foreign partners. A confident India will not be afraid to collaborate with others because it fears for its independence; rather, deep engagements, especially with those who can aid its rise in power, are essential to expanding its autonomy.
Don't forget that India's biggest strategic challenge — outside its neighbourhood — lies in preserving a favourable Asian balance of power. In this connection, think about strong ties with Japan, Israel, Southeast Asia and especially the United States.
Even Russia and China, but with different caveats in each case. Most Asian powers (and yes, that includes America!) await an active India: you have a policy called "Look East"; now make it happen.
Deepen relations with those who wish you no harm, who don't threaten your territory and who will be sources of technology, capital and political support. Don't look over your shoulders as you do so. You don't have to apologise either at home or abroad for pursuing your national interests.
Nor should you fear that closer ties with Washington will constrain your choices. What constrains India's choices are its political diffidence and its material weaknesses. If its critical partnerships help to mitigate the latter, the former will correct itself.
PM Vajpayee understood this all too well. Now's the time to complete what he began. I wish you well as you start out in office.
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