Thunder From the East

THE OFFICE OF THE CHIEF economic adviser to the government of India is situated in the imposing government buildings in New Delhi left behind by the British Empire. These days, however, it feels more like a reminder of the emerging special relationship between India and the United States.

The chief adviser’s wall is decorated with a wooden board recording the names of all the previous holders of his office. In the spring of 2015, the two most recent names were Raghuram Rajan and Arvind Subramanian. Both men were distinguished Indian economists who had spent most of their careers in the US and were at least as comfortable in Washington as in Delhi. Despite their years working at leading American institutions such as the University of Chicago (Rajan) and the Institute of International Economics in Washington (Subramanian), both men had also maintained a certain intellectual distance from the optimistic, consensus view in the US about America’s enduring global power. In 2005, Rajan had delivered a prescient warning of instabilities building up in the US financial system—which was treated sceptically at the time, but gained him a reputation as a seer after the financial crisis of 2008.

Subramanian is even more of a sceptic. In 2011, he published a book arguing that China would displace the US as the world’s leading economic power. Eclipse: Living in the Shadow of China’s Economic Dominance begins with a provocative vision of a US president in 2021 applying for an emergency loan from a Chinese director of the IMF. Subramanian argued that ‘The economic dominance of China relative to the United States is more imminent… will be more broad-based, and could be as large in magnitude, in the next 20 years, as that of the United Kingdom in the halcyon days of empire.’

Eclipse had received a hostile reception in much of the United States, where its frank ‘declinism’ was distinctly unfashionable. By 2015, with the US economy recovering and China slowing markedly, some argued that predictions of America’s eclipse by China were now off the mark. But when I met Subramanian in his office in Delhi in May of that year, I found him unrepentant: ‘The broad premise and prediction of the book have been borne out in spades,’ he argued.

For many Indians, the problem with the argument of Eclipse was not what it said about the US or China, but how little it said about India. For the election of the government of Narendra Modi had led to a resurgence of bullish optimism about the future of Asia’s second would-be superpower. Modi himself had spoken of the twenty-first century as ‘India’s century’. And many in the country’s elite dared to hope that India might ‘own’ the next thirty years of international economic development— just as China had dominated the three decades that had followed its opening to the outside world in 1979.

Indian optimism is, in large part, based on demographics. The Chinese population is ageing and its supply of young workers is shrinking. In 2015, China formally abandoned its famous ‘one- child policy’, after thirty-five years, partly because of the ageing of the country’s population. But the consequences of ageing are already filtering through to the economy, as Chinese wages rise and the country begins to lose manufacturing jobs. By contrast, 65% of the Indian population was under the age of thirty in 2015, creating a healthy ‘dependency ratio’ of productive workers to old people. Demographers think that India is likely to surpass China as the world’s most populous country, with 1.4 billion people, around 2022. And some economists reckon it might be the world’s largest economy by 2050. As Shekhar Gupta, one of India’s most influential journalists put it to me, ‘Indians now tend to believe that India is on the rise and China is going down. We are the only growing power in the world.’

The Modi government was happy to stoke this optimism. Talking to Arun Jaitley, the country’s finance minister and Subramanian’s boss, I found him in optimistic mood—predicting that India would soon grow at 8-9% a year, making it the fastest- growing economy in the world, easily outpacing China. But there was an important qualification to those figures. In 1980, when China’s growth spurt began, the Indian and Chinese economies were of roughly equivalent size. By 2015, China’s economy was five times the size of that in India. That means that even if China is growing at 6-7% and India is growing at 8-9%, the gap between the two economies is actually widening rather than shrinking. Arvind Subramanian was well aware of the real state of play, predicting to me in Delhi that ‘The underlying economic power of India will not be close to China for another twenty-five to thirty years.’ Subramanian’s caution is wise. While India may one day be a genuine political and economic peer to China, that day is probably at least a generation away.

The development gap between India and China is clear not just in the figures; but in the streets. China is now criss-crossed by modern motorways and a network of high-speed railways. In India, by contrast, the road network is still primitive and, in 2015, some 50% of Indians even lacked access to basic toilet facilities—a national disgrace that Modi, to his credit, has made a policy priority. Levels of basic education and literacy, which were crucial to the economic miracles in East Asia, are much lower in India than in China.

For all the swagger of the Modi era, the more cautious members of the Indian elite are well aware of their country’s weaknesses and know that, as a consequence, India’s global power is likely to lag well behind that of China for decades to come. The difference is subtly reflected in the vocabularies used by the governments in Beijing and Delhi. While President Xi Jinping talks of his desire for a ‘new type of great-power relationship’ between China and the US, Modi speaks of India as a ‘leading power’. In other words, China is already making a claim to be America’s peer; India’s ambitions are more modest—to be seen as one of a number of major international players.

The question the Modi government faces in foreign policy is how to position India as a ‘leading power’ in a fast-changing world. Should India continue to define itself, as it did during much of the Cold War, as a leader of the ‘Global South’—the poorer countries of the world that believed themselves to be disadvantaged and exploited by the industrialised nations of the North? Or should India see itself as part of the rising East—an Asian nation that is poised to correct the historic injustices and power imbalances that were imposed during the centuries of Western imperialism. The second approach would mean that India stresses its similarities to China, as two great and historic Asian cultures, oppressed by the West during the imperial era, but now seeing their power on the rebound.

The assertive image of Narendra Modi, elected prime minister in 2014, energised nationalism—both within the country and amongst non-resident Indians living overseas

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A third approach sees China not as a potential Indian ally in changing the world order, but as the country’s biggest emerging rival. Like many other Asian nations, India has reason to fear the rise of an assertive China. The border between China and India is the longest disputed frontier in the world. The two countries fought a brief border war in 1962, in which India came off worst— and they still have an outstanding territorial dispute, with China laying claim to large parts of the Indian province of Arunachal Pradesh. If the growing power of China is likely to be India’s dominant foreign-policy problem, then an entirely different foreign policy is implied. In that case, India has a strong national interest in forming alliances with Western and Asian democracies—in particular the United States and Japan.

And then, finally, there is a fourth approach. This argues that all this talk of India’s global role overlooks the fact that the country still faces an existential threat right on its border, in the form of a nuclear-armed Pakistan. India and Pakistan have fought three wars since partition in 1947—and a fourth remains a distinct possibility. For some in the Indian security establishment it is this reality—rather than dreams of a new world order or fears of an emerging rivalry with China—that should continue to dominate India’s strategic thinking.

Inevitably, all four of these strands in India’s strategic thinking will influence the approach of any government in Delhi of whatever complexion. Which of them comes to the fore will, to some extent, be a product of whatever unforeseen crises emerge in the coming years. But it is clear that the arrival of Narendra Modi in power has seen India draw closer to the US and Japan—and take a more wary attitude to China.

The legacy of India’s anti-colonial history, however, is not easily shaken off—and continues to shape the country’s instincts. For older Indians, in particular, the country’s moral authority continues to derive from its status as a spokesman for the world’s poorer nations and the victims of colonialism. During the Cold War, India formed a close relationship with the Soviet Union, and Indians of a certain age are still wont to say ‘I was taught in school that Russia is India’s closest friend.’ That pro-Russian reflex still remains in Delhi, to some extent—and means that the US cannot rely on Indian support in international crises that pit Moscow against Washington.

The emergence of globally successful hi-tech companies gave India a new glamour and self-confidence— reflected in high-profile campaigns, such as the ‘India Everywhere’ campaign in Davos in 2006

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The suspicion of Western capitalism is always likely to remain a powerful strand in Indian thinking. This, after all, was a country that was once colonised by a Western multinational—the East India Company. Traces of anti-Western and anti-capitalist thinking continue to make India a prickly partner in global trade and climate ·negotiations. While liberal economists might insist that India can reap enormous gains from globalisation, Indian policy is still often conditioned by a fear that a powerful West might impose disadvantageous deals on the ‘Global South’.

As a result, even though India, with its huge population, scarce water resources and polluted atmosphere, is one of the countries most at risk from climate change, its governments long resisted Western pressure to reduce carbon emissions. They argued that all such deals threatened to institutionalise an unjust order that permits Westerners to consume more energy per head than Indians. India’s insistence that it has a right to use fossil fuels to develop its economy—combined with the fact that by 2015, the country was already the world’s third-largest emitter of greenhouse gases—made the Modi government’s stance critical to the global climate-change talks that culminated in Paris in December 2015. Going into the Paris talks, some Western diplomats feared that Indian intransigence might actually prevent any deal emerging at all. In the event, the Indians found a middle way that preserved the principle that rich, Western nations must do considerably more to reduce greenhouse gases than poorer countries, while also committing India to move gradually towards cleaner forms of energy.

Indians have long argued that it is not just the global economic and environmental orders that discriminate against them. Viewed from Delhi, the global political order has also long seemed intrinsically unfair. Crucial post-war institutions such as the UN and the IMF were shaped before India had even achieved its independence in 1947—and have proved extremely hard to reform ever since. As a result, India has often found itself as a ‘geopolitical outsider’. While China is a permanent member of the UN Security Council, India remains excluded from the top table of international affairs. The five permanent members (the US, UK, France, Russia and China), as established in the 1940s, continue to play a crucial role in defining the international order. For example, they have veto rights over UN resolutions and so can decide whether a war is legal or illegal.

India’s suspicion of the Western-dominated global order is reflected in its voting record at the UN. While Britain and America often praise India as ‘the world’s largest democracy’ and assume that this should mean they share a common world view, in practice this is often not the case. An internal exercise by Britain’s Foreign Office in 2014 found that India had voted against the British position at the UN more often than any other large nation. Permanent membership of the UNSC is also closely associated with the possession of nuclear weapons. The Treaty on Non-Proliferation of Nuclear Weapons (NPT), signed in 1970 and renewed in 1995, recognised just the five permanent members of the Security Council as legitimate nuclear-weapons states. In protest at this ‘nuclear apartheid’, India became one of four UN members to refuse to sign the NPT. The denial of legitimacy to an Indian nuclear-weapons programme, through the NPT, threatened to formalise India’s status as a second-class power.

India had first tested nuclear weapons as early as 1962, in reaction to defeat in the border war with China. It tested them again in 1998—by which time Pakistan, India’s most dangerous adversary, had also developed a nuclear-weapons programme. The initial reaction of the five ‘legitimate’ nuclear powers was to impose sanctions on India for its violation of the nuclear non- proliferation regime. During the presidency of George W. Bush, however, the US decided to change tack—in the interests of cultivating a warmer relationship with a rising India. The US-India nuclear deal, signed during the Bush presidency, effectively recognised India as a legitimate member of the nuclear-weapons club. The breakthrough on nuclear weapons was rightly regarded in Delhi as a mark of India’s growing international status. Sanjaya Baru, head of the India office of the International Institute for Strategic Studies, argues that ‘Breaking the nuclear regime is the most important geopolitical development for India in the last twenty-five years.’

Those who hoped that the invitation to Nawaz Sharif for Modi’s swearing in would be swiftly followed by further efforts at bridge-building between India and Pakistan were swiftly disappointed

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The nuclear breakthrough had come at a time of growing Indian self-confidence connected to the country’s rapid economic emergence. The free-market reforms of the early 1990s had, at last, seen India notch up the kind of rapid economic growth previously achieved in East Asia. The emergence of globally successful hi-tech companies, such as Infosys and Wipro, gave India a new glamour and self-confidence—reflected in high-profile campaigns, such as the ‘India Everywhere’ campaign launched at the World Economic Forum in Davos in 2006. Indian companies blanketed the Swiss ski resort with advertisements and sponsored a gaudy and exuberant closing-night party, complete with Bollywood dancing, to entertain the assembled plutocrats. That same year, Foreign Affairs magazine in the US put India on its cover and proclaimed it a ‘roaring, capitalist success story’.

All of this was heady stuff. A country that had been part of the British Empire within living memory was emerging as a leading world economic and political power. The renewed sense of confidence in India created an opportunity to rethink India’s global role—casting the nation as part of the rising and assertive East, rather than a weak and exploited South. India’s membership of the BRICS group—made up of Brazil, Russia, India, China and South Africa—gave the country membership of a group of non- Western economies that had been singled out for their size and dynamism, rather than their weakness.

The assertive and dynamic image of Narendra Modi, elected prime minister in 2014, energised Indian nationalism—both within the country and amongst non-resident Indians living overseas. Modi was given an ecstatic reception when he gave a speech to US-based Indians at Madison Square Garden in New York. The ‘Hindu nationalism’ associated with Modi excited many of his supporters, who saw it as a promise to increase global respect for India’s unique culture—as well as a mark of the country’s growing power. A successful Indian space probe to Mars, in the early Modi years, was hailed as sign of national prowess.

For some of the prime minister’s critics, however, ‘Hindu nationalism’ was either absurd or sinister—or both. They pointed to claims by Modi’s more fervent supporters that ancient Indians had invented everything from aeroplanes to nuclear weapons. His left- wing critics accused the new prime minister of promoting ‘xenophobic nationalism’ and of turning a blind eye to the mass murder of Muslims in riots that took place when he was chief minister of Gujarat in 2002. Modi’s role in the Gujarat killings was sufficiently controversial for him to be refused visas to travel to the United States in the years before his election as prime minister.

Xi promised to direct $1.6 billion for the development of the Pakistani port of Gwadar on the Arabian Sea and, in return, signed a forty-year contract giving China the right to manage the port

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The election of a ‘Hindu nationalist’ as prime minister also immediately raised questions about the future of India’s relations with Pakistan— the issue that had bedevilled Indian foreign policy since partition and independence. In 2008, India had been the victim of terrorist attacks in Mumbai that killed 164 people. Despite strong evidence of links between the terrorists and the Pakistani intelligence services, India had refrained from retaliating against Pakistani targets. This restraint drew widespread international praise, given the obvious risk of a clash between two nuclear neighbours.

Nonetheless, by the time Modi won election, it was conventional wisdom in Delhi that if Pakistan ever sponsored another terror attack on the scale of Mumbai, Indian retaliation was all but inevitable. Modi’s own reputation as a Hindu hardliner only increased nervousness about the threat of war. But one of Modi’s first acts as prime minister was a gesture of reconciliation—an invitation to Nawaz Sharif, the Pakistani prime minister, to his swearing-in ceremony in Delhi. Those who hoped that this initial act would be swiftly followed by further efforts at bridge-building between India and Pakistan were swiftly disappointed. As one senior Indian diplomat told me, ‘Our policy now is essentially to ignore Pakistan, as far as possible.’

The troop incursion during Xi’s India visit helped to tilt Indian foreign policy towards the West. Just two weeks later, Modi paid his first visit as prime minister to Washington

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The ‘ignore Pakistan’ policy was not simply a reflection of Modi’s own preferences. Rather it reflected a broader strategic consensus in Delhi that India’s aspirations to be a ‘leading power’ on the world stage are dependent on breaking its ‘hyphenation’ with Pakistan. As long as the rest of the world sees India’s place in the world through the prism of the India-Pakistan dispute, then India is condemned to be little more than a regional power, boxed into South Asia. If India aspires to be a truly global player, then it cannot allow its foreign policy to be defined by rivalry with Pakistan.

This determination to prevent Pakistan defining India’s global strategy is only strengthened by the belief in Delhi that China is bolstering Pakistan, with the precise intention of keeping India pre- occupied and contained. The Pakistani nuclear programme received crucial technical assistance from China. And under Xi Jinping, the Chinese moved decisively to strengthen the economic and strategic ties between China and Pakistan.

In April 2015, President Xi paid a state visit to Pakistan— the first Chinese leader to visit the country in nine years. This was more than just a courtesy call. Xi signed infrastructure contracts worth $46 billion —dwarfing the $7.5 billion in development aid that the US had directed towards Pakistan during the Obama years, despite that country’s significance in the ‘war on terror’. The projects that China was promising to finance in Pakistan had a direct strategic pay-off for Beijing—and posed an indirect strategic threat to India and the US. In particular, Xi promised to direct $1.6 billion towards the development of the Pakistani port of Gwadar on the Arabian Sea and, in return, signed a forty-year contract giving China the right to manage the port. The potential strategic significance of this deal was enormous. The port at Gwadar had the potential to be the answer to China’s Malacca Strait dilemma. Gwadar is not far from the Strait of Hormuz, which guards the entrance to the Persian Gulf, through which 20% of the world’s oil passes. Traditionally, for that oil to reach China it then had to sail around India and through the Strait of Malacca, before entering the South China Sea. However, the development of Gwadar port offered the possibility that Middle Eastern and Iranian oil could take a much shorter sea journey to Pakistan. From Gwadar, the oil could then be transported overland, across a 3,000-kilometre land route into western China. Much of the rest of the billions that China proposed to invest in Pakistani infrastructure would be directed to creating the road, rail and pipeline links to make those shipments possible.

The defeat of a pro-Chinese government in the 2015 polls in Sri Lanka was greeted with delight in Delhi—and two months later Modi became the first Indian PM to pay a bilateral visit to Sri Lanka since 1987

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Gwadar is also potentially useful for the expanding Chinese navy. As one Pakistani newspaper noted, the port deal would give China ‘the possibility of building a naval base on the Arabian Sea’. That possibility did not escape the attention of strategists in Washington and Delhi—particularly given the fact that on the same trip, President Xi agreed to sell Pakistan eight advanced Chinese-made submarines. Viewed from Delhi, it looked as if Pakistan, their old adversary, was now locked in the embrace of China. The worst- case scenario for India is that the country might one day face a two-front war against two nuclear-armed nations.

For the Indians, China’s inroads into Pakistan looked like part of an alarming pattern through which China seemed to be deliberately encircling India by forming ever-closer ties to the country’s neighbours. China had also invested heavily in building ports in Sri Lanka—just off the southern coast of India. In 2014, alarm bells were set off in Delhi when two Chinese submarines docked at Colombo, Sri Lanka’s main port and a major trans-shipment port for exports arriving in India. China had also invested heavily in economic, political and military ties with Myanmar—a large country lying between India and China that was only just emerging from decades of political isolation. Bangladesh, another of India’s neighbours, also received Chinese investment into port development at Chittagong.

China’s infrastructure investment in India’s neighbours seemed to fit a geopolitical theory known as the ‘string of pearls’. The phrase referred to China’s alleged ambition to develop a string of port facilities stretching from the Chinese port of Hainan across the Indian Ocean to the Middle East and Africa. From Beijing’s point of view, such a strategy made sense as a way of securing the sea lanes that were crucial to China’s ability to export manufactured goods and import energy resources. In the long term, the string of pearls might offer an insurance policy against a potential US naval blockade of China. But viewed from Delhi, the string of pearls looked unpleasantly like an effort to contain India. As Shyam Saran, the former Indian foreign minister [secretary], put it to me: ‘From Pakistan to the Maldives to Sri Lanka to Burma, we can already see the space around us constricting… If we don’t narrow the gap between us and China, we’ll be boxed into the subcontinent as China dominates our periphery.’

India’s efforts to break out of this Chinese box were a feature of Narendra Modi’s first year in office. The new prime minister hurled himself into regional diplomacy as part of an effort to build up long-neglected relations with India’s closest neighbours. An agreement to end a long-standing border dispute between India and Bangladesh was seen as an important breakthrough. The defeat of a pro-Chinese government in elections in Sri Lanka in January 2015 was greeted with delight in Delhi—and two months later Modi became the first Indian prime minister to pay a bilateral visit to Sri Lanka since 1987.

Meanwhile, India, like China, is investing in naval power—both to protect itself from being throttled by China’s string of pearls and to develop leverage over Beijing, by creating a potential threat to Chinese trade routes. A second Indian aircraft carrier is due to come into service in 2017-18 and a third will be launched around a decade later. India’s determination to build up its own naval power is also a hedge against the possibility that—despite the Obama administration’s ‘pivot’ to Asia—American power in Asia may decline. Shivshankar Menon, who served as India’s National Security Adviser between 2010 and 2014, sees the chaos in the Middle East as a harbinger of the decline of the ‘traditional Western-dominated world order’. His conclusion is that ‘We can no longer assume that others will guarantee the safety of the sea lanes that carry our foreign trade.’

An emerging India was indeed being courted on all sides. Perhaps the most ardent suitor of them all was Japanese Prime Minister Shinzo Abe

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Yet Menon, a tall courtly man who has also served as India’s ambassador to Beijing, is not resigned to the idea that China and India will be antagonists. He knows that all this jockeying for regional advantage with China does not—and cannot— mean that the Indian government is resigned to a straightforwardly adversarial relationship with the government of China. China is, after all, India’s largest trading partner—although the huge trade surplus in favour of China is a source of discontent in Delhi. The two countries also need to co-operate on regional issues and international issues—from Afghanistan to climate change to the management of water resources. Any Chinese move to dam the rivers of Tibet would potentially pose a mortal threat to India’s water supplies. Like many of China’s neighbours, the Indians are also interested in the possibility of Chinese investment in local infrastructure -as part of China’s ‘one belt, one road’ strategy.

When Xi Jinping visited India in September 2014—the first such visit by a Chinese leader in nine years—the Indians did their best to make him welcome. Rather than starting the visit in Delhi, the Chinese leader was invited to Gujarat, Modi’s home state. The two leaders visited Gandhi’s ashram and exchanged warm words about mutual economic co-operation, with Xi arguing that there was a natural fit between the world’s factory (China) and its back office (India). Yet, even as the Chinese leader shook hands in Ahmedabad and Delhi, Chinese troops were crossing into the disputed territory of Arunachal Pradesh. The incident left the Indians confused and concerned. Could this troop incursion by China have been the initiative of a local commander, pursued without Xi’s knowledge? Or had the order been a deliberate message from the Chinese president himself? Reflecting on the incident some months later, one of India’s most senior diplomats concluded: ‘The Chinese troops stayed for three weeks. This was not an accident.’ The message from Beijing could only be interpreted one way—as a threat.

The troop incursion during Xi’s visit helped to tilt Indian foreign policy towards the West. Those in Delhi who argued that India must now seek to pursue closer ties with the United States soon had their opportunity. Just two weeks after Xi’s visit to India, Modi paid his first visit as prime minister to Washington. For a man who had been banned from the US for some years, he received a strikingly warm welcome—with Obama taking the time to give the Indian prime minister a personal tour of the Martin Luther King Memorial. Four months later, the seal was put on the emerging special relationship between Delhi and Washington when Obama visited India—becoming the first US president ever to be guest of honour at India’s Republic Day celebrations. Modi seemed intoxicated by his new closeness to the US president— hugging him on the tarmac and referring repeatedly to him as ‘Barack’ in a joint press conference.

Beyond the ceremony, there was real substance. The two nations issued a joint statement that was designed to get the attention of Beijing. It began grandly: ‘As leaders of the world’s two largest democracies… we have agreed on a Joint Strategic Vision for the region.’ But the most eye-catching sentence came further down: ‘We affirm the importance of safeguarding maritime security and ensuring freedom of navigation… especially in the South China Sea.’ With that statement, the US and India had essentially joined forces to resist China’s burgeoning maritime ambitions.

The strategic understanding between India and the US was underpinned by an economic and cultural convergence. As the cheering crowds that had gathered to see Modi at Madison Square Garden underlined, there is now a substantial Indian diaspora population living in the US. By 2015, there were estimated to be 3.3 million people of Indian origin living in the US, over half of whom had arrived since 2000. Indian expatriates are particularly visible and successful in Silicon Valley and on Wall Street. Sundar Pichai, who was named as the new CEO of Google in 2015, was born in Chennai in southern India and only moved to the US as a graduate student. Vikram Pandit, another Indian-born businessman, served as CEO of Citigroup from 2007-12. Deloitte, the largest accounting firm in the world, which is based in New York, appointed Punit Renjen, another expatriate Indian, as the firm’s global CEO in 2015. The network of personal and business ties between India and the US is growing steadily thicker. Business- minded Indians based in the US are amongst Modi’s strongest supporters. They are also a natural constituency from which to build a ‘special relationship’ between India and the US.

Obama’s commitment to that special relationship built upon the efforts of his predecessor, George W. Bush. In the early Obama years, as the new president had courted China, Delhi had felt rebuffed and anxious. But as the relationship between China and America had soured, so Obama had returned to the courtship of India—as the only country large enough to balance a rising China within Asia. As the Obama administration committed itself to its pivot towards Asia, it became obvious that India had a central role to play in that strategy. Leon Panetta, Obama’s Defense Secretary in his first administration, argued that India was indeed the ‘lynchpin of the rebalance’. India’s strategic and defence relationship has got steadily closer throughout the Obama years. By 2013, the US had also displaced Russia as the largest arms supplier to India. By 2014, India was doing more joint military exercises with the US than with any other nation.

An emerging India was indeed being courted on all sides. Xi had become the first Chinese leader to visit India in almost a decade. Obama had become the first US president to pay two state visits to India. Perhaps the most ardent suitor of them all was Shinzo Abe, the prime minister of Japan—who let it be known that he followed only three people on Twitter, one of whom was Narendra Modi. Abe had also wisely invested early in his personal relationship with the new Indian prime minister, visiting him twice when Modi was chief minister of Gujarat. Returning the favour, Modi paid his first foreign visit outside mainland Asia to Japan, praying with the Japanese leader in a Buddhist temple in Kyoto. In a speech in Tokyo, Modi seemed to endorse Japan’s fears of a rising China, saying: ‘Everywhere around us, we see an eighteenth-century expansionist mindset, encroaching in other countries, intruding in others’ waters, invading other countries and capturing territory’. He did not name China, but there was no mistaking whom he was referring to.

The emerging strategic logic was clear. As China rose, so India, Japan and the United States were drawing perceptibly closer together. It was not quite the policy of ‘containment’ that China feared, but it was clearly a conscious effort to balance the power of a more assertive China on the global stage. By 2015, however, India also increasingly mattered in its own right, not simply as part of a strategic balancing act with China. Eclipse author Arvind Subramanian is certainly right to dismiss the idea that India will catch up with China in the next twenty years; but look ahead a little further, to 2050, and it is possible to envisage a world in which India could be both the world’s most populous country and its largest economy. While the last years of the twentieth century and the beginning of the twenty-first century had been shaped by the emergence of the Pacific Rim as the new core of the global economy, by the mid-twenty-first century, the rise of the Indian Ocean Rim—linking India with a fast-growing African continent—could well be the next centre of global economic dynamism. It is with this thought in mind that the futurologist Hans Rosling likes to recommend that investors buy beach front properties in Somalia.

The idea that India might one day be at the fulcrum of global economic development underlines the point that the story of Easternisation is about much more than China—and indeed about much more than Asia. The shift in economic and political power from west to east is reshaping the whole world.

(Excerpted from Easternisation: War and Peace in the Asian Century; by Gideon Rachman; The Bodley Head, Rs 699, 280 pages)

About The Author

Gideon Rachman

Gideon Rachman is chief foreign affairs commentator of the London Financial Times