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India’s Foreign Policy

Sheshadri Chari





We are observing that period of contemporary history when the world is witnessing the tremendous significance of rising Asia in general and South East Asia and Indo–Pacific region in particular. The strategic significance of this region is underscored by the fact that it is home to almost half the world’s population, accounts for more than a fifth of its gross domestic product, almost 30% of world exports, and a third of cross-border capital flows. The region includes the world’s second, third, tenth and fifteenth largest economies, in China, Japan, India and South Korea respectively. Together, these countries hold the world’s largest foreign reserves. In other words this means they can no longer be held to economic ransom by any single power or more particularly, the US or EU or international monetary institutions. On the contrary, there is increasing realization of their emergent economic clout signified by the growing credence of institutions like BRICS and G–20 over G–8. Another facet of the Asian success story has been the rapid rise in per capita income of the people of China, Taiwan, India and South Korea, achieved much faster than both the US and UK did in the last one century. India arrived on the scene with a bang in May 2014 when a decisive visionary leader entered the Parliament of India for the first time as Prime Minister.

When Narendra Damodardas Modi became the Prime Minister of India in 2014, he was expected to don a new role, that of the magician. The economy was crumbling thanks to the policy paralysis of the earlier dispensation. The BJP as a party was itching for a revamp and replicate the 282 seat feat in all the states. Expectations ran high, but there was little doubt about Modi’s capability to meet all challenges and accomplish everything that was expected of him. The only area where people anticipated a slower kick-start was the foreign policy where a chief minister was not experienced enough to know the diplomatic nuances.

But ironically enough, Prime Minister Modi has surpassed expectations and surprised everyone. He invited all the neighbouring heads of State for his swearing-in ceremony, akin to holding his first regional conference on day one in office, thus sending strong signals of his robust foreign policy direction.



India’s neighbours occupy much of its attention in its overall foreign policy matrix. Except Bhutan, India faces security challenges from all its neighbours. Most of these are traditional in nature; however, non-traditional challenges such as environmental issues are also prominently emerging in the regional security discourse. India’s foreign policy strategy is fundamentally aimed at protecting our core national interests; safeguarding territorial integrity and sovereignty, and achieving economic prosperity. Ensuring these interests has been the principal foreign policy agenda for successive governments post-independence. The tools and approach used to achieve the desired foreign policy objectives have varied, as have its success.

Soon after Independence, Jawaharlal Nehru’s foreign policy thrust was influenced by Gandhian ideals of non-violence and non-alignment and Nehruvian socialistic ideas summed up as “Panchsheel”. This was also touted as India’s soft-power projection in the region. Unfortunately, this neither changed India’s image in its neighbourhood nor did it help to secure a permanent membership in the UNSC, which was initially offered to us but that we donated to China. No country in the world appreciated our moral principles and/or values.

Realizing that ethics and values count for little in a rapidly changing global security environment, Indira Gandhi tried a pragmatic approach towards the neighbours. The liberation of Bangladesh in 1971 through direct Indian military intervention and subsequent creation of a new nation in South Asia demonstrated India’s ability to exercise hard-power in its foreign policy options. Since then, military power has been an indispensible component of India’s foreign policy though it incurs huge drain on our overall GDP. But national security challenges continued to persist despite a strong military and show of strength, mainly due to dithering in foreign policy decisions.

The end of the Cold War, which heralded the rise of a multipolar world order, dramatically altered India’s foreign policy priorities followed by rapid economic liberalization. Inspired by Joseph Nye’s idea of ‘soft power’, India began to embrace its neighbours with soft-power skills, which involved striking a common cord with neighbours on the basis of religion, culture, ethnicity and language. This realization was reflected in the famous Gujral Doctrine, the first official Neighbourhood Policy, which set out five principles to guide India’s foreign policy towards its immediate neighbours.

The most convincing reason for this shift from hard power to soft power approach was the growing Chinese influence in its neighbourhood. Yet, the lack of a comprehensive neighbourhood policy strategy and dearth of broad understanding of security challenges blurred India’s prospect of becoming an effective regional power. The big question now is how and when soft and hard power options works in India’s neighbourhood policy and prepare us for the Asian Century.

The next few decades of this century promises to be Asian Century, signaling the shift of economic clout from the West to the East stimulating major regional economies. The beginning of this shift started with the growing economic strength of Japan followed by dramatic performance of the economies of South Korea, Taiwan, followed by the South East Asian ‘Tigers”. The most recent manifestation of this reallocation of power of course has been the phenomenal economic and related political and military rise of China, whose consistent double digit growth over three decades has seen that country emerge as the second largest economy of the world displacing Japan.


The most significant challenge for India is regional imbalance and military asymmetry in the region. With globalization and interlinking of world economic blocs, India no longer has the luxury of keeping the foreign policy initiatives under wraps. Circumstances have forced us to constantly adjust our policy to the demands of situation without compromising on our core principles.

China is now being joined in the region by India in rapid economic rise. This is perhaps the first time in the history that there are three simultaneous growing powers in Asia; China, Japan and India. Modi’s foreign policy thinking has taken this ground reality into consideration. At a time when the only superpower, the mighty US was touting China as the Asian pivot, Modi struck a personal chord with the then US president Barak Obama and successfully placed India on par with China in the foreign policy formulations of the White House. But the real success of Modi’s balancing act came when he refused to toe the US line of choosing between US and China. Modi extended the olive branch to China by allaying Beijing’s apprehensions of New Delhi’s one-way foreign policy. The subsequent visit of Chinese President Xi Jin Ping to India sent a strong signal to the world about India’s commitment to work with China and Japan for Asia’s progress and yet secure global interest in the future of emerging Asian century.

Asian consolidation and emergence of united Asia is feasible if these three powers work in unison. The fact is that given the strong undercurrent of history and civilizational perspectives, they do lack the initiative to work in harmony. By virtue of his deft moves in foreign policy, Modi has mastered the art of balancing between Beijing and Tokyo, not getting caught in their crossfire and yet secure India’s bilateral gains and interest.

PM Modi has been quick to realize that economic engagement has made it mandatory for India to recognize the importance of networking with regional powers with global anchorage. The Indo-Pacific region has developed into an important and strategic area of great influence. Modi’s decision to work out a strategy for closer cooperation with Japan and increase its strategic presence in the area has come at an appropriate time.

The Indo-Japan relationship, necessary to strengthen the regional security environment, could go on to prove pivotal. This was emphasised by the Indo-Japan joint statement following the 2016 summit, which outlined convergence of interests on bilateral issues like nuclear cooperation, counter-terrorism and defence and industrial cooperation. India and Japan also signed a civil nuclear agreement in 2016, making India the first non-NPT signatory country to have signed such a deal with Japan. The two countries have also agreed on coordination on regional issues.


But it is in the Indo-Pacific ocean zone that one sees the geopolitics of this century being played out, and the play seems to be getting more acrimonious. China’s unilateral and exclusive claim over areas that it refers to as South China Sea has become not only a bone of contention but also a serious threat to the Asian and Indo-Pacific region.

Several member countries of various regional institutions like the ASEAN and IORA have raised this issue and voiced concern. While the Obama administration placed China at the head of its priority list, the Trump administration appears to reverse this policy and play a less active role in the region. There is an apprehension that this may work to the advantage of a more belligerent Beijing. More and more regional heads of state are looking to India to play an active role in regional forums. Realising the importance of India’s role, the Modi government energised the BRICS and invited the heads of states of BIMSTEC for an outreach meeting for greater regional cooperation. This strategic move will give India greater manoeuvring space in the region.

It is likely that in the days to come, Prime Minister Modi may gradually adopt a more proactive foreign policy approach, winning over the friendship and cooperation of allies in Asia and Africa. The Africa Summit held last year has laid a strong foundation for New Delhi to play a leading role there.

The alternative to Modi’s foreign policy line in Asia was the likelihood of major Asian actors being pitted against one another and also other regional States jostling for strategic space, influence and resources.

From this point of view, it would be interesting to study the long-term effects of the Prime Minister’s policies and the conduct of Asia’s larger economies to determine whether they cooperate, compete and/or leverage power and relationships to shape their strategic space within the dynamics of politics and economics in countries of Asia and South East Asia.

India has been late in securing its strategic space in Asia and Africa while China moved very fast almost a decade ago. Modi’s priority therefore, was to reframe India’s two-and-half decade old Look East policy and put in place an administrative mechanism to make it functional.

Unlike China, India shares similar culture, language, ethnicity, history, religion and heritage with its neighbours and South East Asian countries. A regional approach will provide the most feasible solution and it needs to be evolved based on mutual consensus among these countries through regular dialogues and proper institutional frameworks. Such approach can be applied in foreign policy strategy with less focus on military might and more emphasis on developmental efforts.

Modi’s foreign policy template therefore, had to recognize that as an emerging regional benign economic power beginning from the reform era in the nineties and a vibrant democratic country in Asia, India is poised to aspire for political leadership to preserve peace and stability in the region. Modi very rightly began to prepare a road map to transform this aspiration into reality.

This aspiration however, will take time to fructify due to India’s complex and frosty and at times not so harmonious relationship with one of its immediate neighbours, Pakistan.


Pakistan today is a picture perfect of chaos and confusion, offering little solace to India as events in Pakistan have a tendency to spill over. At any given time, there are three power centers in Pakistan; the ISI controlled army, the Arabised and radicalized clergy and the woefully divided political forces. The irony is that civil society in Pakistan has practically no role to play. India therefore, has to deal with not just a failed state but a rogue state and a nuclear one at that.

India needs to insulate her internal security apparatus from the terror machine of Pakistan and at the same time prepare for a regional peace arrangement after the badly bruised US finally quits Afghanistan. The region cannot be left to the mercy of Taliban, ‘good’ and/or ‘bad’, and the ISI. India has to take a lead in stabilizing Afghanistan and keep the area sanitized enough to avoid violence and internecine warfare. More importantly, the ongoing genocide of Baloch population and targeted killing of Baloch and Sindhi leadership as well as the inhuman crass mass executions of opponents poses a grave challenge to the civilized world.

By mentioning Balochistan in his Independence Day speech the Prime Minister has not only voiced India’s concerns at the human rights violations, but drawn world attention to the volatile situation in Pakistan. The political will shown by Modi has been noticed by the US, but New Delhi will have to take concrete steps like recognizing the Balochistan and Sindh governments in exile and be more pro-active in dealing with Pakistan.


SAARC, the South Asian Association for Regional Cooperation, continues to be an instrument for fostering better relations in South Asia. Despite its sluggish growth in the past, it has made progress in the last two years. There is an overall agreement on a South Asia Preferential Trade Arrangement (SAPTA) among six of the seven SAARC countries, the only exception being Pakistan. Even Pakistan subscribes in principle, though not in practice, to the substantial tariff reductions in relation to a large number of items the other six countries have introduced. The same is the situation about the move from preferential trade arrangements to a South Asian Free Trade Agreement (SAFTA).

Given the geographical configuration of the SAARC area, arrangements for sectoral cooperation in different parts of the subcontinent are also being evolved. For instance, in the east, there can be economic cooperation among India, Bangladesh, Bhutan and Nepal; and in the south among Maldives, Sri Lanka and India. Pakistan objects to this “sub-regional” pattern and even claims that this runs counter to the SAARC spirit. Others believe, however, that sectoral schemes are sound, and that there is no intention to “isolate” Pakistan. Late Indian PM Gujral, whose doctrine was criticized by the Pakistani media, had declared that schemes for cooperation between Pakistan and the western Indian states of Punjab and Rajasthan would be most welcome.

India looks upon SAARC and the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC) not as competitive but as complementary organizations. Indeed, these two are seen as part of a chain that extends to the Association of South-East Asian Nations (ASEAN) in the east. As is well-known, India is a full dialogue partner of ASEAN and a member of the security-related ASEAN Regional Forum (ARF). The support for Indian membership of APEC, the Asia-Pacific Economic Cooperation entity, is growing.


As a three-time Chief Minister and a keen observer of international affairs, Modi’s view on foreign policy has been honed by past experience which suggests that the use of hard power vis-à-vis neighbours is counter-productive in the long-term. Yet, the concept of soft power needs to be refined within the larger South Asian regional context. Modi is aware that while embarking upon any regional leadership role, India has to bear in mind the need for political stability and economic prosperity of for its national security and progress.

India’s strength lies in her size and continuity of the policy of being a ‘benign and non-interventionist power’. But such an approach alone will not serve its purpose anymore. If the US can intervene in Iraq and Afghanistan without sharing any border with them, India cannot be expected to remain unconcerned with the events in the immediate periphery nor can we afford to see our neighbours through an American prism. While the region needs to be out of bounds to foreign powers, the collapse of the Soviet Union and the emergence of China as an economic power have introduced a new dynamism in our foreign policy conduct.

Developing effective mechanisms in the near term for regional cooperation on non-traditional security issues may yield rich dividends in the long term and allow India to move towards resolving some of the region’s long-standing chronic security problems. There is an urgent need for an in-depth and comprehensive study that will examine opportunities for cooperation on shared non-traditional security concerns as potential building blocks toward developing a viable regional India centric security architecture.

The foreign policy perspective of a country is the sum total of events and experiences of the past and the geo-political realities of today. While neighbourhood remains an important element in foreign policy formulations, the global strategic discourse has changed to building multi lateral and intra-region and inter-region strategic architecture. India’s priority should be; (a) ensure regional security, stability and peace, (b) strengthen the economic structure through a robust ‘Make in India’ initiative and outreach in  the region, (c) fine tune regional organizations to interlink the region, (d) keep India’s strategic importance relevant and (e) catapult a strong India to the centre stage of global affairs.

[The author is the Secretary General of Forum for Integrated National Security (FINS) and Foreign Policy, Strategy and Security analyst. Editor in Chief News@Hinduworld]

Chari Talks

North East votes for development

Sheshadri Chari



 The BJP’s spectacular victory in the recently held elections in three states of North East reiterates the faith people have in its development agenda. The victory also underlines the need for BJP to take the electoral victory seriously and develop North East so as to be the gateway to South East Asia.
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Chari Talks

India-Iran come closer

Sheshadri Chari



Iranian President Hassan Rouhani’s three day India visit reiterates New Delhi’s commitment to assist Afghan peace process and build the Chabahar port as an alternative approach route to the energy rich Eurasia. The two oldest civilisations have come closer to chart a new course, create new history and probably a new geography too.
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Chari Talks

Budget focus on rural economy and agriculture

Sheshadri Chari



Agriculture and rural sector have been the backbone of any economy in the world and more so especially in India. The revival and dominance of the Chinese economy started with the strengthening of the farmers. Even developed economies of the world give special and protectionist treatment to agriculture. Reviving and strengthening the agriculture sector and rural economy have suddenly become very important for the present government given the fact that elections are increasingly being influenced by the rural voters more than the urban voters. Even from sheer economic prosperity point of view, Indian economy depends on a robust rural and agricultural growth more than probably the industrial production and service sector. Little wonder, that the Finance Minister has more than once emphasized that agriculture will be the prime area of focus.

The fourteenth Finance Commission recommended that there should be an increase in the states’ share of the total central tax collection. Accepting this recommendation as a step towards cooperative federalism and considering the fact that more than half the state governments are ruled by the BJP or their allies, the centre readily increased the state share. But correspondingly many central schemes were also withdrawn or their outlays curtailed. The states began allocating the central tax component to urban schemes like roads and water supply and other urban requirements. This considerably reduced allocation to rural and agricultural schemes. Rural economy, already witnessing a setback as a result of demonetisation and introduction of GST, was left cash-starved. As a result of this, the farm sector abandoned all new inputs in the sowing season. Naturally,  the agricultural production saw a drastic fall and consequential lower growth in the wholesale price of agro products. The anti-inflationary measures, much to the benefit of the urban population, kept the wholesale price lower but came as a dampener to the farmers.

Many of these factors have forced the farmers to take back very little from the mandis. The rural expenditure by the states was about fifteen percent in 2005-2006 and rose to thirty-six percent in 2014-2015 but came down drastically to an all-time low of about eleven percent in 2016-2017. The Finance Minister in his budget speech has recognised this fall in rural expenditure and promised to allocate more for the farm sector. Many of the reports prepared and released by the agriculture ministry highlighted the alarming figures pertaining to widening gap between agricultural production and income levels.

Realising the urgency of the situation and needs of the farmers, Finance Minister Arun Jaitley has provided increased institutional credit target for agriculture for the financial year 2018-19 amounting to Rs 11 lakh crore from Rs 10 lakh crore. This will allow the government to step up the efforts to ease availability of funds to the farmers and for the agriculture sector in general. The recent events have highlighted the discontent among farmers who have to increasingly depend on secondary sources such as local money lenders for small loans and accommodation money, highly detrimental for them as well as the rural economy.

The Finance Minister has reiterated the government’s resolve to treat agriculture sector as an enterprise. This means the farmers’ income has to go up in proportion to their land holding, crop pattern, and investments such as input cost etc. In a way, agriculture should be treated as an industry and subject to all the factors of production, sales, and consumption.

Keeping in view the importance that agriculture has assumed, the finance minister has carefully crafted this budget with maximum emphasis on rural and agriculture sector.

The proposal to implement MSP for all crops is a very encouraging one, especially for the farmers as most of them, depend on multi-crop farming. Besides, the MSP has been increased to 1.5 times of the production cost. This will immensely benefit the small and marginal farmers who account for almost 86%. But there are two issues here. One is that the system of determining the cost of production is a very cumbersome one and is usually decided by a set of people who are directly concerned with agriculture. Again they take a very long time, sometimes as much as six to eight months to decide the cost of production and the MSP based on it. Another factor is the multiplicity of produce. In these circumstances, by the time the MSP is decided and implemented, the market has changed and the demand-supply position would have altered.

The budget also proposes to upgrade Grameen Agricultural Markets and APMCs that are the lifeline of the agriculture. There are also incentives for Women Self help Groups to undertake organic farming. All over the world organic products have a good market. But this will also require tweaking of the pesticides and other inputs that go into organic farming.

The Budget has also allocated 2000 crores for building rural infrastructure mainly to assist in agriculture. This is no doubt a welcome step but the amount is woefully small compared to the requirement. Anything less than two lakh crores for rural infrastructure should be considered insufficient if one has to do a sincere and sustainable job.

The provision of ten lakh crores as a credit to farmers with 60 days interest waiver and an increase of NABARD fund to 40,000 crores is also a welcome step. The idea of setting up smaller Krishi Vigyam Kendra for soil testing and extending other advisory services to farmers will be seen as a very constructive step if they are implemented with all sincerity and monitored properly.

The proposal to set up dedicated micro irrigation fund under the supervision of NABARD with an initial corpus of 5000 crores is also a very encouraging step. This again will help in identifying and bringing non–irrigated land into the fold of arable land.

The first Budget after the announcement of GST has come as a huge relief to farmers and is expected to give a fillip to the rural economy and the agriculture sector which has witnessed many stressful years.

About the author:

The author is member of the National Executive Committee of the BJP and an expert commentator on economic and strategic issues

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