STRATEGIC HEDGING: INDIA'S JOURNEY TO REGIONAL HEGEMON AND VISION FORWARD

As the Cold War ended with the Soviet Union disintegrating itself into multiple different states, India was posed with a difficult situation of having to shift itself from its traditional external commitments to a foreign policy mechanism that would sustain and adapt to a new world order. During the Cold War, India spent the majority of its time arguing for the need to pursue a non-aligned foreign policy with the primary goals of not only steering a course equidistant from the two superpowers, but also asserting the right to pursue its own national interests free of external dominance. Apart from allowing India to step back from the ideological battle between the two superpowers, it also helped play a greater role through its ostensible moral suasion strength. It often drew attention to the conditions in a recently decolonised world and strived to promote inter-continental collaboration through global disarmament, peaceful resolution of disputes, and equitable economic development. However, India never completely followed an independent foreign policy. The early architect of India’s foreign policy mechanism, former Prime Minister Jawaharlal Nehru, was a lot more inclined to the ever-growing ambitions of the Soviet Bloc than their counterparts in the West. In fact, he would often overlook the most visible shortcomings of the Soviet Union under the notion of it being a lot more sympathetic towards the conditions of Third World countries. His policy of opposing American-style capitalism as a suitable form of economic development for the less developed countries was later adopted by most of his successors, who went on to openly collaborate with the Soviet Union on multiple global issues. Their reluctance to criticise the Soviet invasion of Czechoslovakia and Afghanistan, their decision to allow Cuba to become a member of the Non-Aligned Movement (NAM), and their unwillingness to admit the Soviet militarisation of Eastern Europe drew harsh criticisms to the country’s foreign policy principles. As one of the principle exponents of the non-aligned movement, India portrayed itself as a champion of the world’s poor and dispossessed countries. Indian leaders would often call for a global foreign aid regime designed to redistribute the world’s wealth, an international trading order that favoured the needs of the developing world, and the restructuring of such global institutions to give weaker states a greater voice (Ganguly, 41). However, this never really produced much substance for India’s economic growth. Its decision to impose import substitution and isolate itself from the international trading system had severe consequences for its ambitions to grow as a major economic hub. At a time when other countries in the region, such as China, were ahead in the race to integrate themselves into the ever growing global economy, India continued to stay behind with an annual growth rate which barely exceeded 3 percent. Although its international efforts did bring political success, the results had severe consequences on the economic development of the country. Its early 1970s support for the Organisation of Petroleum Exporting Countries (OPEC) to raise oil prices in order to extract concessions from the world’s well developed countries had severe economic consequences for low oil yielding countries like itself (Malone, 90). As the world entered a new era of global diplomacy free of ideological motivations, the essay attempts to map the most important strategic choices that India had to make as it attempted to hedge into a new world order.

INDIA’S JOURNEY OF STRAGETIC HEDGING

Entering into the 1990s, India was faced with a difficult situation. The collapse of the Soviet Union lost India an important supplier of military hardware, diplomatic protection in the United Nations Security Council (UNSC) and its most powerful economic partner. This, coupled with the loss of preferential access to Eastern Europe and Central Asian markets and a balance of payments crisis precipitated by the oil price spike due to the Gulf War, forced India to seek assistance through International Monetary Fund (IMF) loans. However, these loans also came with the conditions for India to deregulate its economic system and liberalise its markets for global competitors (Mazumdar, 169). Therefore, in response to this, former Prime Minister Narasimha Rao initiated a series of market-oriented reforms that involved the devaluation of the currency, the easing of trade and foreign investment regulations, and the liberalisation of the financial sector. With a newly liberalised Indian economy and a change in the international power structure, India is set on a mission to abandon its idealistic objectives and look for a more flexible foreign policy structure. Narasimha Rao’s visit to the US to re-engage with the “sole superpower” in 1992 became a key starting point for Indo-US cooperation that has now developed into a collaborative effort to hedge against China. Although India and the US had quite a lot of differences in the past, with Dennis Kux describing them in his book Estranged Democracies as “occasionally friendly, sometimes hostile, but more often, just estranged,” the 21st century has drawn both countries progressively closer. The factors responsible for this included the economic rise of India and its attractiveness to US multinationals as an investment destination; the expansion of Indo-US bilateral trade; outsourcing; success of the Indian diaspora in the US; President Clinton’s successful visit to India in 2000; the Indo-US civilian nuclear deal; a shared interest in maintaining international peace and security and combating international terrorism. With China’s aggressive foreign policy since 2013 and Pakistan’s drastic low rankings in the Financial Action Task Force (FATF) standards, the US partnership has become a significant point for India to strategically hedge against both its rivals. It also began to pay greater attention to the Southeast and the Far East Asian regions. India’s historic Look East Policy, which began in 1993, was a major attempt at reorienting India’s approach to Southeast and East Asian countries, which had previously been viewed only through the prism of the Cold War with minimum trade and economic interaction. The policy dramatically expanded India’s trade with such countries by utilising bilateral as well as regional organisations such as the Association of Southeast Asian Nations (ASEAN) and sub-regional institutions such as the Mekong Ganga Cooperation (MCG), Indian Ocean Rim Association (IORA), and Asia Cooperation Dialogue (ACD) in pursuing relations with these countries. However, with China aggressively asserting military and economic dominance in the region post its “peaceful rise era”, India’s move to develop the Look East to an Act East Policy could be seen as a key response to strategically hedge against its rival. India’s recognition of Vietnam’s claim in the South China Sea and the continuous military exercises such as the MILAN and SIMTEX to show its military capabilities is a key example of the Act East Policy hedging against Chinese political and military assertion in the region. While maintaining a steady presence in the East, India has also continued to look for opportunities in the West. Although it continues to maintain its traditional support for the Palestinian cause, India’s establishment of full diplomatic relations with Israel in 1992 has helped build an Indo-Israeli cooperation that has spanned diverse sectors like defence, intelligence sharing, trade, agriculture and technology. Its recently announced Look West policy calls for the need to capitalise on its soft power and strengthen its huge diaspora in the region. The recent visits by Prime Minister Narendra Modi and the number of warm responses in those countries have made the region an extended arm of India, which is crucial in its need to hedge against its rival. The Organisation of Islamic Countries (OIC) summit invitation and its support for India, even with Pakistan’s continuous effort to influence the forum, is a key example of the Look West policy’s manifestation in the region. Further, India also continues to act as an economic diversifier amidst the heavy Chinese economic presence. Saudi Arabia’s decision to invest $1.5 billion dollars in Reliance Jio from its sovereign funds, as well as the region’s ongoing public-private partnerships with Indian companies through major oil companies such as ARAMCO and ADNOC, are key examples of the region’s rejection of a Chinese monopolistic pursuit. Although India’s partnership with the US has been a key leverage for its strategic endeavours, recent ties with Japan have ushered in a new model of strategic collaboration in light of the Chinese Border Roads Initiative (BRI). Although both have continued to share strong cultural ties since the end of World War II, former Japanese Prime Minister Shinzo Abe’s speech at the Indian Parliament in 2007 has since developed into ties that have gone deeper. The speech, titled “Confluence of the Two Seas,” reintroduced an ancient Asian vision of connecting the Pacific to the Indian Ocean, which has later developed into Japan’s newly announced Free and Open Indo-Pacific vision. For a country that has already shared concerns over Chinese aggression in the East China Sea, India has evolved to become the favourite partner for Japan in the effort against China. While maintaining a strong presence through regional frameworks like the Quad, India’s necessary infrastructural skill set and Japan’s technological innovation and financial resources have continued to be major contributors to South Asian countries. Their recent successful collaborative infrastructure projects in Bangladesh and Myanmar could be interpreted as an attempt to hedge against Chinese BRI investments and provide a possible alternative source of funding for these countries. In fact, when it comes to being a reliable alternative, India has always looked to strengthen deeper ties with its neighbours in an effort to hedge against its rivals. Although India is still far behind China’s economic capacity, it has continued to extend support to debt-driven Sri Lanka and invest in infrastructural projects to strengthen cross-border trade in Bangladesh. In response to Pakistan’s uncooperative attitude and the 2016 Uri terror attacks, India has since shifted its focus from the South Asian Association for Regional Cooperation (SAARC) to the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) in an effort to isolate its rival. The institution’s 2018 summit on state-sponsored terrorism, along with poverty reduction, energy cooperation, climate change, and ease of visa, shows India’s effort to both hedge against Pakistan and work towards the development of the region. The institution, since gaining more traction on regional cooperation, stands as a bridge that would connect South Asia to the Southeast, which will provide a significant footing for India to pursue its strategic objectives.

THE WAY FORWARD?

Although India’s strategic positioning has seen much success on the Pakistan front, China’s influence will continue to challenge India’s capabilities. China’s great economic power allows it to spread its influence not just in Asia but around the world. India’s helping objectives have been set back by Iran’s exclusion of India from the Farzad-B project and traditional allied countries such as Nepal and Sri Lanka’s recent development with China. Further, China’s recent vaccine diplomacy and effective mass export to countries in the East and the West have reopened new opportunities for Chinese collaboration. Under such circumstances, India should focus on enhancing capabilities rather than immediately responding to threats. While threats may be transient and continue to assume different avatars, focusing on capabilities will offer more flexibility to divert and deploy national instruments towards dynamic threat contingencies. Pakistan's constant effort to destabilise the Kashmir region and China’s history of economic coercion make it an absolute necessity to enhance national capabilities. This will not only help match the level of engagement the Chinese have but also create the image of a reliable partner that India wishes to project. Besides using bilateral and regional tools of diplomacy, India must also use multilateral institutions such as the United Nations to hedge against Chinese influence. Although it is not a permanent member of the United Nations Security Council, India should effectively utilise US participation to contain China and to garner support on issues it deems important from other smaller states. Even if China does opt for a veto, the diplomatic cost of doing so and the absence of such powers in consensus-building forums like the General Assembly will prove effective in isolating and deterring China from acting against Indian interests. Thus, to conclude, India must re-focus and re-shape its priorities to what is necessary rather than what is preferable if it hopes to hedge against its rivals.

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About the author: As a student of international affairs, Swapneel Thakur strives to achieve perfection in every step of his career. He is often described by his peers as the most enthusiastic in uncovering the inherent complexities that exist in international politics.