The next Indian government and foreign policy priorities

A look at the key areas of priority for the incoming government.

Once the dust settles in yet another iteration of the world’s largest democratic exercise, a new government in India will be confronted with monumental challenges in every phase of governance. It will need to move quickly to address areas that were neglected hitherto, even as it crafts a longer-term vision for engagement with the rest of the world.  Rather than predict positions and outcomes, this piece is designed to call to attention key areas of priority in the short and medium-term and prescribe courses of action to the incoming government.


The Economy

Quite simply, the single most important priority for the next government must be to return the country to the path of sustained and robust economic growth.  While this is not explicitly a priority in foreign policy, it nonetheless impinges on India’s engagement with the rest of the world, shapes global perceptions of India, and in turn, directly impacts India’s ability to influence matters of regional and global concern from climate change and nuclear non-proliferation to terrorism.  Indeed, prime minister Jawaharlal Nehru underscored the importance of the economy to India’s foreign policy pursuits in a speech to the Constituent Assembly in 1947 where he argued that “foreign policy is the outcome of economic policy, and until India properly evolved her economic policy, her foreign policy will be rather vague, rather inchoate, and will be groping.”

The new government needs a clear vision to revitalise the economy.  It must move forward with liberalisation, expedite clearances for large projects plagued by bureaucratic hurdles, attract greater foreign investment and promote investments in infrastructure.  The new government would also do well to revisit contentious tax policies that continue to hinder foreign investment in the country.

The United States 

It is in India’s interests to strengthen and expand on a multifaceted, strategic partnership with the United States.  Unfortunately, ties between India and the US – touted as “natural partners” in better days – have been allowed to deteriorate.   Truly strategic partners seldom agree with each other on all aspects of bilateral engagement.  But they do develop mechanisms to address and manage challenges and conflict.  The very public spat between India and the United States over the Devyani Khobragade affair seems to suggest that these mechanisms are not quite there and must be addressed as a matter of priority.

The truth about India’s Nuclear Liability Act – a bone of contention between India and the US – is that it is incompatible with IAEA’s Convention on Supplementary Compensation (CSC), which India took a commitment to accede to.  The US is not alone in its reservations with the liability act; Russia, France and Canada have all communicated an inability to sustain nuclear commerce with India should the liability law not be amended.  The new government, presumably unencumbered by the historical actions of the UPA, must bring India’s legislation on civilian nuclear liability into compliance with the CSC.

It must also direct its attention to address the so-called “trade war” between the US and India. In this regard, Anish Goel, a senior fellow at the New America Foundation, offers some very timely and pertinent advice to the US and India on altering their trade negotiation postures.

Concurrently, the new government must also engage the US in expanding and deepening cooperation on security-related issues.  Our mutual defence engagement – constrained in part by the reluctance of the soon-to-be-departing government – must expand, from joint research and development defence projects to bilateral and multilateral military exercises aimed at promoting interoperability.  FDI in the defence sector must be increased from the current 26 per cent to 49 per cent, thereby incentivising US and foreign manufacturers to participate in India’s defence market.  Additionally, expanding cooperation between India and the US on homeland security and on emerging threats in cyber security is vital.


In 2013, China replaced the US as India’s largest trading partner.  However, while overall bilateral trade has grown significantly this past decade, India’s ballooning trade deficit with China, now estimated at $30 billion, is concerning.  The new government must continue to push for greater access to Indian goods and services in China, particularly in IT and pharmaceuticals sectors.  As Anil Gupta and Haiyan Wang suggest, India can also take a leaf out of China’s book by requiring Chinese companies that want to remain major suppliers to Indian companies to start manufacturing in India.

On security-related issues, China’s handling of disputes with India and its other Asian neighbours is worrying.  From the UPA’s recent dealings, it should be quite clear that attempting to placate China is a self-defeating strategy.  The new Indian government must expand its diplomatic engagements with the US, Japan, Vietnam and other like-minded countries to counteract China’s aggressive posturing on bilateral disputes and its undermining of the United Nations Convention on the Laws of the Sea (UNCLOS).  As an energy-starved country, India cannot afford to be held hostage to China’s umbrage over oil exploration projects in the South China Sea, particularly when it is dismissive of India’s sensitivities over the increased Chinese naval footprint in the Indian Ocean.

The great disparity in Indian and Chinese defence spending means that India cannot hope to match China weapon-for-weapon militarily.  Instead, the new government must continue to support the expansion and maturation of India’s strategic weapons programs. Particular attention must be paid to the now wayward indigenous nuclear submarine and aircraft carrier projects.   India must also be open to opportunities to promote nuclear stability between the two neighbours.  To that end, the new government can pursue nuclear dialog and confidence building measures if the Chinese government is receptive.

The Indian Subcontinent

India’s neighbourhood has witnessed social and political upheavals in the recent past that the UPA appeared ill-prepared to deal with.  In Bangladesh, a historic opportunity to sign an agreement on the sharing of the Teesta River was missed due to opposition from the West Bengal government.  Secular and pro-India parties in Bangladesh have, in the recent past, had to endure the violence of Islamist forces and their political supporters.  The new Indian government can strengthen the hand of the Sheikh Hasina government by concluding on the water sharing and land boundary agreements already under discussion.  Privately, it must also provide material support to the Hasina government’s efforts in bringing to book functionaries of Islamist groups that continue to perpetrate crimes against civilians and Bangladesh’s minorities.

On Sri Lanka, the UPA’s dithering placed it in yet another awkward position on the US-led resolution at the UN for an international inquiry into alleged human rights abuses in the conflict against the LTTE.  Domestic compulsions aside, as Sri Lanka’s most proximal neighbour, India shouldn’t have allowed itself it be put in a position where it needed to decide on supporting, opposing or abstaining from a resolution drafted by another country.  All is not lost, however.  The new government must support Sri Lanka’s internal reconciliation efforts via the LLRC based on agreed-upon timeframes.  Failing which, India will retain the right to take the lead in drafting and supporting UN-mandated war crimes resolutions against Sri Lanka.

Ultimately, the new government must pursue a policy that encourages its smaller neighbours to participate in India’s economic growth and promote regional integration.  My colleague Nitin Pai rightly argues “India must [also] unabashedly back pro-India political parties in neighbouring countries and make it more expensive for anti-India parties to hold their positions.” Doing so will require the political willingness of the new government to assert itself in ways that the UPA shied away from.

Afghanistan-Pakistan and terrorism

It is in India’s national interests to promote a pluralistic, representative and democratic Afghanistan.  While the UPA assisted the Karzai government in building democratic and civilian institutions and provided limited assistance in training police and military personnel, the impending departure of the US and NATO forces will require India to recalibrate its approach to Afghanistan.  The new government must actively engage the US and regional powers like Iran, Russia and China in strengthening the government in Kabul.  It should also consider supplying military equipment, where feasible, to assist the Afghan National Army in its counterinsurgency operations.

The departure of the US from the region might embolden Pakistan to direct its assets of terror against India once again.  As a matter of priority, the new government must ensure that India continues to develop punitive capabilities to dissuade Pakistan from relapsing into the behaviours of old.

Lastly, an under-reported success of the UPA was the series of arrests and extraditions of key terrorist leaders from the Gulf which have significantly disrupted the activities of terrorist groups like the Indian Mujahideen.  The new government in Delhi must continue to build on these successes by quietly co-opting the Gulf monarchies in intelligence sharing and acting against individuals inimical to India who have sought refuge in their countries.

Photo: Koshy Koshy