The rise of the Indian superpower

India used to be a leading member of the Non-Aligned Movement. Until 1991, its foreign policy was marked by a refusal to enter into military agreements with major powers. The collapse of India’s closest ally, the Soviet Union, forced Delhi to change its position and seek a rapprochement with the US through the 1990s and the early 2000s. Key concessions included the lease of military bases and support for the Star Wars missile defence system. This cooperation led to the 2006 US-India Civil Nuclear Agreement.

The fall of the Soviet Union provided the external catalyst for change, but internal economic factors played their part. India realised that it could only assert itself on the world stage if it had the resources to back it up as a world power. The failure of India’s quasi-socialist economy had become apparent even before the USSR collapsed, and was reinforced by the fall of the Berlin Wall. A capitalist consensus grew out of the failure of state planning and the limitations of autarky. The example of China was seen as one to be emulated; this led to a less idealistic, more realistic approach to foreign policy. Moralism and idealism were shed in favour of pragmatism and realpolitik, what foreign policy analyst and journalist C. Raja Mohan called a shift from the power of argument, to the argument of power. This has manifested itself in a more ambitious foreign policy, such as seeking a permanent seat on the UN Security Council.

India and China are the world’s largest neighbours. They make up nearly 40 per cent of the world’s population. India is China’s largest trade partner. However, China’s GDP is four times India’s; Beijing spends over three times as much on defence as Delhi. China and India are not equals.

There is the potential for rivalry between democratic India and authoritarian China, but the main source of tension is the 4,000km of disputed border, known as the “line of actual control”, between the two countries. The fiftieth anniversary of the Sino-Indian War, fought over this still undefined and porous frontier, will be in 2012. Agreement over demarcation remains a long way off: management rather than resolution is the pragmatic policy.

Also, India’s continued support for the Dalai Lama’s government in exile angers China, and has the potential to embarrass it internationally.

Another point of contention is inevitably Pakistan. Beijing has fostered closer ties with Islamabad. This has meant that India leans naturally more towards Washington to counterbalance this new alignment. India fears China plans to encircle the sub-continent, China sees India as operating a policy of containment.

China and India view each other with suspicion and mistrust, but more dialogue would lead to better understanding of the trade benefits of good relations. Equally, while Chinese investment in India is minuscule, it could still be a force for good. More investment would lead to closer ties and mutually beneficial economic payoffs for both nations. Doubts on both sides could be overcome by building upon the existing trade relationship.

India is extremely diverse. There are differences of language, religion, race, food and culture, but the nation exists. However, despite economic success, there is a growing sense of middle class disenfranchisement in the political realm. Politics is becoming a family business, with nine out of ten MPs in India under 40 in inherited seats, and this nepotism will lead to a backlash. Nonetheless, the tradition of democracy is strong, with voter turnout, even in areas where the Maoist insurrection is strong, regularly over 80 per cent.

Economically, India is both rich and poor. However, there is no debate in India; economic liberalism is the way forward. The communist party was recently voted out of power after more than 30 years in West Bengal. Even so, doing business in India varies greatly from state to state and the pace of change in India is fast. For example, Bihar was a corrupt and ungovernable territory as recently as 2005, but has been transformed into a state governed by the rule of law.

The Mumbai terror attacks were met with a muted response from Delhi despite evidence linking them to Pakistan. More recently, India has withdrawn from debates arising from the Arab Spring, abstaining on the UN Security Council resolution over Libya and holding back on support for the revolution in Cairo. There is a tendency to step back.

At the moment, India is not a military power of substance. Its foreign policy objectives are to get as rich as possible, as fast as possible. This means concentrating on the economy and developing its power along the Chinese model. Possible stumbling blocks are endemic corruption and market access that doesn’t conform to World Trade Organisation rules.

A leader from every one of the five permanent members of the UN Security Council has visited India in the past 12 months. David Cameron’s trade delegation to India in July 2010 was described by Downing Street as the largest in recent memory.

However, Washington signed the US-India Civil Nuclear Agreement in 2006, but the US has had little tangible in return. US companies have not won large contracts in the nuclear sector and US bidders were noticeably absent on India’s shortlist to supply the $10bn fighter plane defence contract. The frontrunner is the Eurofighter.

India wants to think globally, but it is forced to engage in the tense atmosphere of the Afghanistan-Pakistan region. India didn’t go after the terrorists of the Mumbai attacks, partly because Pakistan has a large military – and nuclear weapons. This leaves only so much room for India to manoeuvre, before the danger of escalation is too great. India’s international ambitions may be growing, but there are strong limitations on its ability to be assertive. For now, despite its own growing strength, India will take the blows rather than react – the risks are too great.

Edward Shawcross works for Chartwell Partners, the specialist speaker bureau, which organised this meeting.


Patrick French: Writer and historian

Rahul Roy-Chaudhury: Senior fellow for South Asia at the IISS

Jo Johnson MP: MP for Orpington and deputy chairman of the Indo-UK All Party Parliamentary Group

Gideon Rachman: Chief foreign affairs commentator, Financial Times