Dallas Walton

4/10/2022

LBS 722

India Foreign Policy

Introduction

The increase in interdependence and globalization between countries worldwide has triggered the need for strong diplomatic relationships among different countries. In the current generation, a strategic and sound policy is vital for having a voice on the international platforms to ensure effective investments and trade and attaining reliable domestic progress. The foreign policy of India has developed significantly since independence. The policies applied in forming universal interactions proceeded from goal-driven to goal-oriented. After independence, the agenda of India circulated mainly around nurturing new relationships with ex-colonial and colonial countries to encourage cooperation and peace following international disputes like the cold war. Substantial conflicts with neighbors like Pakistan and China led to potential changes in India’s foreign policy, with the nation no longer being neutral in its relations.

The ties with the Soviet Union, the USA, and other nations were in relentless flux because of the allegiances developed during the Indian-Pakistan wars. This shift contributed to enhanced military preparedness and the improvement of more objective-driven foreign policies. In 1991, India developed an industrial policy that made India a mixed economy, thus transforming its trade and economic policies with other nations. This led to more employment opportunities and manufacturing in the nation andnew avenues for interaction and cooperation with various nations globally. This paper takes a keener look at the foreign policy of India and the trade progression that happened in the country after 1991.

Section One

In 1992, the Indian government launched a policy known as “Look East.” However, because of the economic circumstances and geopolitical changes, the current government renamed it “Act East” in order to represent the proactive role that the government played in increasing the integration of India into the East Asian nations and the “Association of Southeast Asian Nations (ASEAN). The main aim of this policy was to enhance infrastructural developments in the country, improve access to the gateway ports and boost technology. In terms of culture, the policy aimed at promoting tourism to famous religious and cultural sites and preserving ancient artifacts, manuscripts, and heritage sites. In terms of commerce, the policy aimed at building stronger production networks, regional value chains, and bilateral trade agreements (Chako, 360). This policy focused on the least-developed countries of “Cambodia, Lao PDR, Myanmar, and Vietnam (CLMV) .”Following strategic partnerships like the one between Japan and Russia enabled the development of new worldwide global value chains.

This policy also emphasized the implementation of projects to ensure firm regional security, integration, and defense. However, foreign policy has greatly changed since 1991.Recently, the policy embarked on an objective to improve the infrastructure of the border in order to increase the overland connectivity to the South-Eastern parts of Asia. Furthermore,the present foreign policy aims to participate and take the lead in various international governance sectors.The current government aims to increase India’s influence on the initial associations. Currently, India is a member of the East Asia Summit, the BRICS coalition, and the G20 organizations, and it aims to become the top authority among these forums. The current policy also aspires to become a permanent member of the United Nations Security Council.

The current foreign policy entails the creation of institutional leadership through the various initiatives it has undertaken. For instance, the government started the International Solar Alliance, which currently has a membership of approximately 120 nations committed to the creation of solar technology as well as championing solar power usage (Alden and Brummer, 478). The Indian government needs to progress with the evolution and engage with the current worldwide subjects, undoubtedly articulate the international policies it owns, gain a higher position at the table, and make its availability felt on a worldwide scale.

India’s foreign policy is gradually geared towards increasing its international relationships to enhance its domestic targets. The government has developed partnerships in several fields like capital or sourcing, technology, securing market access, and natural resources that have substantially boosted the domestic industries. This has impacted the domestic sector because the Foreign Direct Investments (FDI) have reflected a more significant boost than the initial fiscal year. The increase in international collaborations has mainly brought this about. Due to the objectives of India on the international platforms and its focus on enhancing its relations with the neighboring nations, it is vital to analyze how India relates with other countries, like the USA, Russia, and China.

Section Two

Trade and economic relations between the USA and India have significantly progressed since 1991. Currently, the USA is among the most significant direct investors in India. From 1991 to 2004, the FDI stock inflow rose from $10.9 million to $344.5 million and summed up to about $4.13 billion. The United States of America is the second-largest trading partner of India (Freeman, 90). They have a good trade relation history among them. For instance, in 2017, the USA imported goods worth $48.6 billion from India and exported goods worth $25.7 billion to India. Most commodities imported from India include textiles, chemicals, steel and iron products, diamonds and gems, tea, coffee, edible food products, and information technology services. Major items that India imported from America include computer hardware, fertilizers, scrap metal, aircraft, and medical commodities. The USA also has a direct investment in India of about $10 billion, making it India’s most prominent investment partner and accounting for 9% of the overall foreign investment.

In 2005, India’s Prime Minister Manmohan Singh and USA’s president George Bush created a trade policy forum in that representatives ran from the two nations. The main objective of this program was to enhance the investment flow and bilateral trade between the two countries. In 2010, president Obama and Prime Minister Singh also had various meetings and signed several defense and trade agreements between the two countries. In October 2020, the two countries documented a signed military agreement concerning the sharing of subtle satellite information. In December 2020, the president of the USA-India Business Council clearly stated that the ties between the USA and India would continue growing stronger in 2021 because the administration of Biden will lay more emphasis on the trade deals to build a successful economic relationship.

China and India’s economic relations have been established through the Business Council and the Joint Economic Group. China is the second-largest trading partner of India. In 2012, China stated that the “Sino-Indian ties” were the most vital “bilateral partnership of the Century.” In the same year, the premier of China, Wen Jiabao, and the prime minister of India, Manmohan Singh, came up intending to increase the bilateral trade between the two nations to approximately $100 billion by 2015. The bilateral trade between India and Chinatouched approximately $62.9 billion between 2017 and 2018, and the trade deficit widened to $62.9 billion in favor of China. By 2017, the bilateral trade volume between China and India was $84.5 billion. A point to note was that this figure did not consist of Hong Kong, which consisted of a bilateral trade volume of $34 billion.

In 2014, India’s total export to China totaled $16.4 billion, which was 0.8% of the total imports and 4.2% of exports from India (Wojczewski, 400). The major goods exported from India included precious metals, gems, cotton, copper, coins, slag, ash, ores, salt, cement, stone, sulfur, machines, pumps, and engines.The goods that China exported to India contributed to 2.3% of the general exports and approximately 12.7% of the total exports in India. The major goods exported from China included machines, pumps, engines, electronic equipment, fertilizers, organic chemicals, steel and iron, plastics, precious metals, gems, ships, coins, boats, and technical and medical equipment. This trade relationship continued to grow, and up to date, there is still a good relationship between these two countries.

The bilateral trade between Russia and India solely concentrated on the important value chain sectors. These sectors included the most diversified segments like electronics, machinery, chemicals, aerospace, commercial shipping, automobile, fertilizers, precious stones, pharmaceuticals, industrial metals, coal, apparel, petroleum products, coffee, and high-end products. In 2002, the bilateral trade was $1.5 billion, and it had risen by seven times in 2012 to $11 billion. However, the two governments have a “bilateral trade target of $39 billion by 2025.” The bodies that conduct trade in these two nations include “the Indo-Russian Forum on Trade and Investment, IRIGC, the India-Russia Trade, the India-Russia Trade Business Council, the India-Russia Chamber of Commerce, and the India-Russia CEO’s Council.” The two governments came up with an economic strategy that entails several economic constituents to raise bilateral trade in the future (Sharma and Mehta, 300). Among these included the coming up of an FTA between the EEU and India. The EEU was a bilateral treaty that insisted on protecting and promoting investments. The long-term supplier contracts in vital sectors like gas, rough diamonds, and oil. Companies like Gazprom, Rosneft, Alrosa, and Essar will act as long-term suppliers. The relationship between India and Russia continued enhancing as time went by.In 2022, following the aftermath of the Russia-Ukraine Invasion, the Western countries imposed various economic sanctions on Russia that forced Russia to develop alternative payment systems because most Russian banks distanced themselves from Visa, MasterCard, and SWIFT.This is evidence enough that Russia has intentions of continuing its trade relationships.

Power indeed is the critical factor in a country’s balancing behavior. In international politics, the traditional power concept, particularly in the realist school, is described as the ability to obtain the desired results and is mainly linked with controlling a few resources. The main argument of “the realist is that” the state’s security is preserved and attained through power maximization and its elements that include; large territorial size, geographical boundaries, and a strong technological base. All these elements champion the formation of strong military ability. The desire to have authority over other states rises as the power of the state’s capabilities increases. After the cold war, a new form of soft power has been the main point of discussion. Soft power can be described as getting whatever you want through attraction instead of payments or coercion (Teater, 143). It comes about due to the policies, political ideas, and culture that makes it attractive. A successful soft power majorly depends on the state’s reputation in the international community and the information flow within the state. Due to this, India decided to come up with a way of enhancing global correlation with different states. It wanted to be on top of other nations in terms of authority and to do this. It needed to have a good relationship with other international nations like the USA, China, and Russia. This would enable them to penetrate the power matrix easily and gain soft power.

Section Three

Russia and India’s relations began years ago during the cold war when they had a solid strategic, diplomatic, military, and economic relationship. After the Soviet Union was dissolved, Russia developed a strong correlation with India that ended in both countries having a common special relationship. India and Russia described this relationship as a “special and privileged strategic partnership.” The “Indo-Russian strategic partnership” is built on five main components:defense, politics, cooperation, space, and anti-terrorism. These components are vital in enhancing the economy of the two states and the bilateral trade between them. These components also have to be integrated to ensure that both countries hit $30 billion of bilateral trade by 2025 (Kumar, 250). In order to make this happen, the two states needed to come up with a free trade agreement that they needed to adhere to. The India-Russia Intergovernmental Commission is the primary body that carries out affairs at the government level between Russia and India. The countries are also members of other international organizations like BRICS, SCO, UN, and G20. Russia has aired out that it completely supports India in attaining a permanent position at the UN Security Council. Other than that, Russia has also shown great interest in becoming a member of “SAARC with observer status,” whose founder member was Egypt. Russian Defense Industry’s second-largest market in India. In 2017, more than 68% of military hardware imports to India originated from Russia; thus, Russia became the main supplier of defense machinery.

The relations between Japan and India have always been strong since the cold war period. India has influenced Japantoward Buddhism. The relationsbetween these two nations have been strong in India’s independence, despite Japan initially imposing sanctions on the Indian nation after the nuclear tests in 1998. However, the sanctions were later removed in 2001. Some Japanese companies such as Honda, Toyota, and Sony have their manufacturing branches all over India. With the growth of the economy of India, India stands being the main market for Japanese companies. The largest motor vehicle company, Suzuki, has its largest manufacturer in India, showing how they had good relations. In 2008, India signed an agreement with Japan that granted India a low loan interest of about $4.5 billion to construct a speed train between Mumbai and Delhi (Sridharan, 60). According to history, this was the largest overseas project that Japan financed, and it reflected the rising economic partnership between the two nations. Japan and India documented “a security cooperation agreement” where both nations will conduct military exercises and supervise the Indian Ocean. All these show how India had a good relationship with Japan.

However, India faced several issues while adjusting its foreign policy and reforms despite all these. The first issue was overpopulation in the country. India is one of the most highly populated countries in the world. This is a major problem for the country as the government spends a lot of money trying to help its people instead of focusing on its development. The second issue is that the country has poor sanitation and a water system that causes illnesses to the citizens. There is also an increased illiteracy level among the populated adults. All these hinder the foreign policy of India.

Section Four

Several economic policies have played a great role in influencing India’s foreign policy. The agreement between Japan and India enabled the prosperity of many Japanese companies in India. It led to the construction of the speed train, which eased the locomotion in the country.They also had a security cooperation agreement that enhanced these two nations’ military relations and security. China and India also had various partnerships and agreements that allowed trade progression between the two nations. China imported various goods from India, and India also imported goods from China, allowing the citizens of the two counties to interact freely, thus enhancing foreign policy. The meetings with different presidents of the USA since the post-cold war era enabled the formation of various agreements and partnership strategies (Khanna). These agreements eased the progression of trade between these two countries. India also had good relations with Russia, having several strategies and agreements that made it possible to easily conduct the exchange of goods between these two states. The relationship between Russia and India enabled the formation of a strong military basis in India and trained military men. This enhanced security across India and made it possible for international trade to grow larger. Also, the fact that a few nations like Japan wanted India to get a position on the United Nations Security Council made it possible for India’s foreign policy to prosper. These played a great role in making India own a high position among the superpowers and even made India yearn for more power.

Conclusion

Having attained this almost-perfect foreign policy, India should improve it and make foreign policy better. The country should focus on creating more policies in the country that favor international policies. For instance, it should develop laws that allow business people to carry out trade freely within the neighboring countries. Also, the country should focus on enhancing more talks and communication with other countries beyond the neighboring countries and the superpowers. It should also develop more agreements and negotiations with other countries that will see India increase its foreign policy with the countries. Lastly, India should develop rules and guidelines that guide how they relate with other nations.

Works Cited

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Wojczewski, Thorsten. “Populism, Hindu nationalism, and foreign policy in India: the politics of representing “the people.” International Studies Review 22.3 (2020): 396-422.