2023 has been a good year for Indian foreign policy, the year ahead will be decidedly more challenging


When the White House declared that Joe Biden won’t be able to meet India’s request to attend the Republic Day celebrations on January 26 next year due to ‘scheduling issues’, India was in a fix.

The entire episode was mishandled by the Biden administration that initially let slip the information that such an invite has been made, forcing India to wait on Biden, and the late denial after a period of prolonged suspense – peppered with scepticism over the so-called assassination plot – left New Delhi with a tricky diplomatic problem.

India needed someone who may replace Biden in strategic weight and importance for a programme pregnant with symbolism while running the risk of sending an implicit message to the invitee that she/he is a second choice.

On December 22, the ministry of external affairs declared in a public notification that French president Emmanuel Macron will visit India as the chief guest for the 75th Republic Day celebrations that also marks the 25th anniversary of the India-France strategic partnership. Prime minister Narendra Modi, incidentally, had attended the Bastille Day parade in Paris as Macron’s guest of honour on July 14 this year. The French president promptly responded by posting on X: “Thank you for your invitation, my dear friend @NarendraModi. India, on your Republic Day, I’ll be here to celebrate with you!”

Under the circumstances, to get Macron – who has been instrumental in taking bilateral ties to new heights and cementing France’s position as one of India’s key defence partners – and that too at such a short notice implied India’s strength, diplomatic clout, growing stature and a favourable geopolitical landscape.

In a difficult year grappling with the after-effects of a once-in-a-century pandemic, along with two wars that have thrown Europe and West Asia (Middle East) in turmoil, stretched America’s resources, attention and exposed the limits of its leverage, India emerged as the sole “bright spot on a dark horizon”, to quote the IMF.

Rating agencies are predicting that India will remain the world’s fastest growing major economy for at least the next three years, and reach the world’s third-largest economy milestone by 2030, if not by 2027, according to some estimates. While India’s economic growth is expected to comfortably cruise at around 6.5% in 2023-24, by 2027 it may zoom to 7% led by growth in manufacturing sector even as China’s pace dips to below five per cent during the same period.

Morgan Stanley says India’s GDP is set to double from the current $3.4 trillion to $8.5 trillion over the next decade and the country will add more than $400 billion to its GDP every year, a scale surpassed only by the US and China.

This growth is supplemented by monetary policies that have brought down the inflation, which eased to a four-month low in October and a decline in unemployment rate that fell to a six-year low of 3.2% during July 2022-June 2023, according to data released by the National Sample Survey Office.

High GDP growth, low inflation, falling unemployment, a scorching surge in stock markets and cooling down of international oil prices has injected incredible optimism in Indian psyche and its economy.

India’s situation is strikingly different from the depressing mood in Europe where the economy is struggling, and also in the US where the economy is seemingly doing great but has failed to lift the pall of gloom. A Wall Street Journal survey found that 69% of respondents said the “country is headed in the wrong direction. Biden’s approval ratings are mired around or below 40%, and approval for his handling of the economy is even lower.”

In contrast, prime minister Modi remains wildly popular, easily surpassing other global leaders by a mile and recent state elections where BJP recorded handsome victories in three bellwether states may indicate that people are ready to give him one more term.

India economy’s optimism is complemented by political stability and key policy reforms at the Centre that has allowed the government to significantly expand its kitty, and that money is being funnelled into giving India a massive and long overdue transportation and infrastructure upgrade through a sharp rise in government’s capital expenditure (capex), stressing on improving connectivity across the nation.

In a written reply in the Rajya Sabha this month, minister of state for finance Pankaj Chaudhary stated that the government’s capex has soared from Rs 4.1 lakh crore in fiscal 2021 to the budgeted Rs 10 lakh crore in FY24, further assisted by the PM Gatishakti Scheme on infrastructure and logistics.

The plan is to boost growth and initiate private sector investment. The result has been stunning.

India’s highway network has risen by more than 50% since 2014, with the pace increasing from 12 km per day to 37km per day in 2020-21. According to Economic Times, the government plans to double the travel speed to 90kmph across the country by constructing and expanding the highway network by 41000 km including 15000km of high-speed corridors by fiscal 2031-32 at a cost of nearly Rs 20 lakh crore.

The Vande Bharat Express semi high-speed trains, the first of which was flagged off in 2019, along with the newly launched non-AC Amrit Bharat trains, promise to connect every corner of India. A new Vande Bharat Express is being inaugurated almost every other day, a pointer to the fact that Railways capex has doubled under the current government. New freight corridors are coming that promise relatively higher speed for cargo to boost railway freight and push down consumption of imported fuel.

The transportation revamp is so dramatic and comprehensive that even western media, habitual critics of the Modi government, are forced to acknowledge the impact.

In an article published in May 2023, The Economist wrote, “India will spend 1.7% of its GDP on transport infrastructure this year, around twice the level in America and most European countries… Instead of endlessly butting heads with the progress-throttling bureaucracy, Mr Modi (sic) has also taken selective steps to empower it. In his first review with the roads ministry he more than doubled the amount that civil servants could spend without seeking approval from the treasury. Having run Gujarat for over 12 years, he brought to Delhi a chief minister’s penchant for getting stuck into the nitty-gritty of project delivery.”

Finally, the overhauling of country’s road and railway network is going hand in hand with installation of an incredible digital public infrastructure that covers nearly 1.3 billion Indians with a unique digital identity, along with banking system and mobile network for faster, leakage-free, and seamless delivery of public goods, health services and financial inclusion.

India’s instant payment system, UPI, has transformed the financial system with nearly 10 billion transactions taking place on the platform every month, amounting to more than 45% of the global real time payments, and is dragging a primarily cash-based economy into a digital one at the speed of light.

As Samir Saran writes in ORF, “India is also one of the world’s most advanced digital societies. It has consolidated its position as a global tech-enabled services hub; its world-class model of digital public infrastructure (DPI) is being adopted and adapted by advanced and developing countries alike; and it is the highest-ranked country internationally in terms of AI skill penetration and talent concentration.”

What I have laid down so far are the building blocks of making India a great power. Struggling with poverty, illiteracy, a semi-feudal system under the garb of democracy and harebrained policies in the first few decades of its post-colonial existence, India still has a long way to go. It is now in a hurry to make up for lost time.

But it is getting there faster than many had imagined. Take, for instance, the adoption of New Delhi Leaders’ Declaration by the G20 nations against all odds, a significant win for India’s presidency. To achieve a near-impossible consensus in a world polarized down the middle is a good enough signal of India’s growing economic, military and diplomatic heft.

India has flattered to deceive in the past. Yet this time, a bevy of positive trends is aligning in favour of the world’s most populous nation and the fastest-growing major economy in terms of demographic dividend, internal reforms, political stability and a stiff geopolitical tailwind. Wary of an increasingly unpredictable China suffering from a slowing economy and miserable outlook, the West is increasingly betting on India as the global growth engine.

The current Indian leadership is bent on making the most of this opportunity through a prolific diplomatic effort. It is also staying true to a firmly autonomous policy outlook underwritten by pragmatism and self-interest to maximize India’s geopolitical space and options, and as a hedge against volatility. With the war in Ukraine and a cascade of sanctions against Russia with whom India’s energy ties have seen a quantum leap, the jugglery has been tricky but crucial objectives have been met.

While the prime minister visited 11 countries this year, including a formal state visit to the US in June, external affairs minister S Jaishankar clocked up thousands of airmiles while visiting 33 nations as part of India’s firm diplomatic push, according to data presented in Lok Sabha.

Taken together, India’s goal has been to harness the power of its economy, take strides towards self-reliance (aatmanirbhar) in defence manufacturing and channelize its diplomatic activism in aiming for leadership of the global south while acting as the bridge between the countries left behind in the wake of globalization and the richer West, thereby punching above its weight.

The other area of focus has been to double down on a mutually profitable strategic partnership with the US and use the strengthening ties both in terms of internal and external balancing against China, its primary adversary, and present itself as a democratic bulwark and a net security provider in the Indo-Pacific.

As Aparna Pande of Hudson Institute writes in GIS, “At a time when the U.S. seeks to deny high-end technology to its competitor, China, Washington appears willing to share the crown jewels of its civilian and military technology with a non-security ally, India. The U.S. would like to convince countries around the world that there is an alternative to China, and that is India.”

As 2023 ends, it is evident that India’s foreign policy has brought handsome dividends. Some may say India has benefitted from geopolitical realities. The year ahead might be trickier. With general elections around the corner, the first few months are likely to be spent navel-gazing in domestic political theatre.

Bigger challenges may arise in later half of the year with the introduction of variables in the form of Donald Trump for a likely second stint at Oval Office, an unpredictable twist in the Ukraine-Russia stalemate and steady worsening of the West Asian conflict that may trigger a larger regional conflagration.

We have seen how Indian interests have already been affected by the ongoing Red Sea crisis that has hit rice trade and the inflation pain point may go up again if the global shipping lanes remain choked.

The second-order effects of the West Asian crisis are also evident in the dramatic drone attacks on a commercial ship, MV Chem Pluto, off India’s west coast in the Arabian Sea. With the initial needle of suspicion pointing towards Iran, India has pressed “five frontline guided missile destroyers along with logistics tanker, Boeing P 8 I anti-submarine warfare aircraft and long endurance Sea Guardian drone to keep the sea lanes of communication between Bab el-Mandeb to Indian coast safe for merchant shipping and missile attack by Iranian proxies,” according to a report in Hindustan Times.

Currently, India lacks the kind of naval assets needed to meet its maritime security challenges and the rising traditional and non-traditional threats. Faced with the searing pace of China’s naval expansion, which boasts of the largest Navy in the world in terms of commissioned warships, India is falling woefully short.

As former naval officer Abhijit Singh writes in ORF, “the pace of (India’s) naval ship construction is struggling to keep pace with strategic needs. The IN’s capital budget is small, with a pace of construction much slower than China’s. Although India is building more warships than in the past, the asymmetry with the People’s Liberation Army Navy (PLAN) is still stark. In contrast to China, which builds almost 14 warships a year, India constructs just four.”

The task ahead for India is demanding. In 2024, as conflicts widen in two separate theatres, China continues to throw its weight around and a distracted America grapples with its domestic woes, Indian diplomatic efforts must be complemented with more shouldering of responsibilities, meeting challenges and protecting growing interests. That will also require better allocation of resources. A rising India’s needs cannot be met with earnest activism alone. India is riding a wave of incredible optimism but the window of opportunity won’t remain open for too long.

Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views.

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