Narendra Modi didn’t bother to tweak policies to please any bloc. Regional stability and local economic growth topped his agenda
Ullekh NP | 28 Aug, 2014
Narendra Modi didn’t bother to tweak policies to please any bloc. Regional stability and local economic growth topped his agenda
In the final years of UPA II, American diplomats and corporations had begun to use the expression, ‘India fatigue’, to refer to former Prime Minister Manmohan Singh’s ambivalence on investment policies and AK Antony’s lacklustre stint as Defence Minister that saw modernisation of the armed forces take a backseat, much to the anguish of US defence contractors who were hoping to hit pay dirt supplying weapon systems to the world’s largest arms importer. Which was why when Narendra Modi, who had earned a reputation as a ‘doer’ while Chief Minister of Gujarat, took over as Prime Minister on 26 May this year, mandarins in Washington DC cheered; they also issued assurances that he would be given a US visa, earlier denied over the Gujarat riots of 2002. But expecting Modi to roll out a red carpet for US businesses was a mistake, at least three diplomats admit.
“The worst was the assumption that he would jump at the idea of being offered a visa,” says a US diplomat, adding that it is time to rethink ways to engage India, especially after India blocked a World Trade Organization (WTO) deal that has taken 12 years to negotiate. This July-end, New Delhi rejected a trade facilitation agreement (TFA) signed last December at Bali—envisaged to cut red tape and relax customs rules, it would have been the largest multilateral trade agreement since the GATT Uruguay Round accord in 1994. Shocked at India’s stance, US officials, globalisation buffs and the Western media vilified Modi for his adamant stance, with some of them describing it as India’s ‘WTO antics’ driven by domestic political calculations. Lisa Curtis and William T Wilson of The Heritage Foundation question Modi’s business-friendly image, asking why he, a leader ‘who was elected in an electoral landslide on a platform promising economic reform’ had to pull the plug.
The question is: was Modi wrong in insisting that the WTO alter its rules to allow countries such as India to expand food subsidies for the poor? If India had signed the TFA, it would have violated WTO obligations that demand that the value of subsidies India gives its farmers on agricultural products must be limited to 10 per cent of the total value of output of a product at market price. Columbia University Professor Arvind Panagariya argues in a column that appeared in The Times of India that Modi’s problem against it was that the WTO- mandated methodology is so flawed, India’s subsidy bill ends up violating the trade body’s guidelines. Besides, agriculture is India’s mainstay and employs more than half of the country’s workforce.
NAILING THE ISSUE
Why is the West upset then? Washington DC-based lawyer and India expert Robert Metzger believes that though Modi is committed to economic diplomacy, his paramount objective remains regional stability, and that “he has adroitly navigated the shifting landscape through an independent path that has not committed to any particular bloc at the expense of another”. Which, interestingly, is in direct contrast with UPA I’s strategy of being US-centric. Modi’s first foreign visit was to Bhutan. He also travelled to Brazil for the BRICS meet (which saw the creation of a BRICS development bank, seen as a counterweight to the World Bank), and later to Nepal; he became the first Indian Prime Minister to visit the Himalayan country in 17 years.
Adds Metzger: “I believe PM Modi has made a good start in foreign policy—though foreign policy has not been a cornerstone of his objectives or those of the BJP.” He points out that Modi’s initial emphasis was to improve relations with countries on India’s periphery. “This is quite important given the diverse security challenges that are arrayed around India. He also has shown special interest in India’s naval capabilities, which makes sense because of the importance of maritime security, both to protect against seaborne terrorism and to guard all-important shipping lanes for oil as well as other supplies.”
Michael Kugelman can’t agree with him more. The Senior Program Associate for South and Southeast Asia at the Woodrow Wilson International Center for Scholars terms Modi’s 100 days a success on the foreign policy front because he remained true to his initial intentions: to re-engage with India’s neighbours in a way that highlights the country’s desire for economic partnerships and more all-around diplomacy, while also emphasising its desire to portray itself as a strong State internationally. Modi’s External Affairs Minister Sushma Swaraj has visited Bangladesh in what has been widely described as a goodwill gesture’.
Continues Kugelman: “On the former, Modi made a series of foreign trips both regionally (to Bhutan and Nepal) and further afield meant to promote commercial cooperation (to Brazil). His decision to invite the leaders of all SAARC (South Asian Association for Regional Cooperation) states to his inauguration was a bold idea—and a big achievement. On the latter, Modi sent a strong message to Pakistan by cancelling a high- level bilateral meeting after Pakistan’s envoy to Delhi met with Kashmiri separatists.”
Harsh V Pant, professor of International Relations at King’s College London, succinctly captures Modi’s 100 days in power that he began with a diplomatic coup of sorts, getting all SAARC heads of state, including Pakistan’s Prime Minister Nawaz Sharif, to attend his swearing-in ceremony: “In his first 100 days, Modi has defied many expectations and confounded his detractors and supporters alike.”
Pant argues that while on the economic front, the Government’s position has disappointed many economists and most Western nations, on the security front, there is a new purposeful response against China with a focus on border management and defence acquisitions.
He agrees with Metzger and Kugelman in the view that Modi has succeeded in ensuring a “a refreshing focus on immediate neighbours”. He is glad that the manner in which the evacuation of Indian nurses from strife-torn Iraq was handled showed a government that is operationally well-prepared. “So the larger picture that is emerging in the first 100 days is of a government that is not as risk-averse as previous governments and will be willing to take risks should the need arise,” notes Pant.
THE BIG RISK
The Prime Minister has incurred the displeasure of so-called peaceniks and left liberals for ‘derailing’ India-Pakistan talks. New Delhi suspended a proposed round of foreign secretary- level talks—which would have been the first of their kind in 18 months—after the Pakistani High Commissioner in Delhi invited a Kashmiri separatist leader to tea in mid-August.
Kugelman thinks that Modi was actually reacting to domestic developments in Pakistan. “Anti-government protests in Islamabad had weakened the civilian government and consequently given the Pakistani military an opportunity to seize the foreign policy portfolio from Nawaz Sharif. The military does not share the civilians’ enthusiasm for rapprochement with New Delhi. This suggests to me that Modi felt there was no reason to have the high-level meeting with Pakistan because Pakistan’s government would be in no position to have substantive discussions with India, given that the Pakistani military is now likely in control of India policy once again,” he avers.
He adds that when the situation stabilises in Pakistan, the military may well relax its grip on foreign policy and give the government more leeway—and this could in turn make Modi more willing for high-level talks. “I definitely do not think that Modi’s decision to cancel talks this month suggests that they can’t be started again soon,” he says.
Pant calls it a calculated risk. He feels that the Modi Government decided to take a gamble by resetting the terms of engagement with Pakistan. “It is a move that was probably long overdue, but it is not clear what India’s options are should this gamble fail. Given Pakistan’s internal turmoil, this perhaps doesn’t matter in the short-term, but India needs a long- term policy that focuses on primarily managing the national security risks emanating from Pakistan.” He, however, expresses hope that New Delhi will focus on this issue now. “It would do great damage to Modi if his government is forced to talk to Pakistan once again, as in the past, under global pressure in case of an Indo-Pak crisis,” Pant explains.
For his part, strategy analyst and writer Brahma Chellaney says that while challenges abound for Modi, the Prime Minister is pursuing a dynamic and assertive foreign policy with a two-fold focus: regain India’s clout in its strategic backyard by reaching out to smaller neighbours that have traditionally been in India’s sphere of influence; and push for closer engagement with the world’s big powers. “By standing up to US and Western pressure at the WTO talks in Geneva, he demonstrated an unflinching resolve to uphold national interest,” he declares.
Metzger says that India faces new strategic choices, given that the world has seen tremendous changes and alliance shifts in the 100 days since Modi assumed office. “We have seen many changes that have altered alliances and displaced assumptions about relationships among countries. India may have difficulty trying to grow trade with China while also bolstering defence capabilities in order to respond to China’s growing military might. It will find it difficult to remain so closely aligned with Russia during a period where there is worldwide aversion to Russia’s aggressive moves in Ukraine. India may wish to build a security relationship with Japan, but must do so without provoking a regional arms race,” he suggests.
True, Modi faces different challenges in countries like the US, Pakistan, China, Myanmar, Afghanistan, Sri Lanka and Nepal. Says Kugelman: “These challenges are all of a different nature. With Pakistan, China, and even the US, issues of mistrust and latent hostility often constrain the pursuit of cool- headed diplomacy. In Afghanistan, by contrast, Modi finds a receptive ally that may want more from India than India can give: Kabul may seek a security blanket (in the form of greater bilateral security cooperation) that Modi, concerned about provoking Pakistan, is not willing, at least not yet, to provide.” His sense is that the rays of hope are numerous now, but they may not extend beyond the short term. “With China and Pakistan,” he adds, “Modi is keen to get things right with these rivals right away, and he will likely come bearing ample carrots—in the form of deeper economic ties. I fear, though, that in the months ahead, he could be tested—through Chinese provocations into contested territory and through terror attacks in India traced back to Pakistani soil.”
If and when these incidents occur, Kugelman notes, Modi will not be nearly as restrained as his predecessor, suggesting that the carrots may be withdrawn and replaced by an array of sticks. “Tensions could well rise.”
Pant says that among all these countries, there are certainly signs that there is a new dynamism in bilateral ties. According to him, India’s neighbours, barring Pakistan, are certainly looking at New Delhi with a new sense of expectation. “Delhi now has to operationalise those aspirations that have been articulated. It is the implementation phase that has always been a problem. India should focus on completing the projects in its neighbourhood that are in the pipeline,” urges the King’s College professor.
He notes that Afghanistan will be a critical challenge for Modi as Western forces start departing later this year. “India will have to articulate its own role more cogently. It has immense goodwill that it can leverage. But that would mean stepping up its security role. Can the Modi Government go beyond what the previous Government has done on the security front? This will be critical as the Modi Government has made the immediate neighbourhood its priority,” he says.
Most experts, including Pant, agree that with regard to China, the challenge for Modi is to enhance economic and trade ties while building deterrent military might. “The Xi [Jinping] regime is turning out to be more militaristic than previously assumed. The Modi Government will have to hold firm on critical issues and the first test will be [Chinese president] Xi’s visit to India next month,” he argues.
Pant concedes that “some urgent ameliorative measures” are required to put India’s ties with the US on track. He expects Modi’s visit to the US in September to set the tone for this.
For this to happen, says Metzger, the US should work towards earning India’s trust. “Apart from the appointment of a new ambassador—long overdue—the Obama administration needs to take positive measures to demonstrate to India that the US is a reliable partner in defence and other forms of trade,” he points out. Most importantly, he adds, the US needs to articulate a vision for the India-US relationship that is more than “transactional” or opportunistic.
Which means neither Modi nor Obama should let ‘WTO antics’ overshadow their talks in September.