Context: Climate, health, digital tech, and geo-economics will define the global conversation in the near future. India must be proactive in its foreign policy.
Signs of changes in the global economic domain
- A new global minimum tax is being worked upon. The recent G7 meeting arrived at a consensus to apply a global minimum tax of at least 15 per cent.
- The objective is not only to establish a minimum corporate tax regime but also a system where certain profits of large companies will be taxed where they are generated.
- The global minimum tax rate would apply to companies’ overseas profits.
- Carbon border levies are being unveiled to aid net zero emission goals. It means fusion of trade and climate in unprecedented ways.
- Binding dispute resolution provisions are sought to be embedded into international agreements.
- Technological decoupling is taking place, leading to new value chains being set up.
Their cumulative impact will be on India. India’s foreign policy should understand and shape them or be at the receiving end.
Evolution of India’s foreign policy:
- Right from Kautilya's Arthashastra, India's worldview has been based on the theme Vasudhaiva Kutumbakam (world is a family).
- India’s foreign policy has traditionally been a Nehruvian normative foreign policy, it often struggled to match its rhetoric with its actions.
- This led to foreign policy that was built on three key pillars:
- nonalignment in the international arena;
- preservation of autonomy in domestic affairs; and
- solidarity among developing nations, particularly those that had recently gained independence from colonial powers.
- Prefers geopolitics over geo-economics: Indian foreign policy has generally given primacy to the frictions and friendships relating to geopolitics. There is less emphasis on Geo-economics.
- Global policy initiatives by India
- The advocacy of decolonisation;
- the demand for nuclear disarmament;
- the crafting of the Non-Aligned Movement as a response to the Cold War;
- the support for United Nations (UN) peacekeeping; the quest for a permanent seat on the UN Security Council; and
- the call for the comprehensive convention on international terrorism
- Environmental initiatives: As global issues have evolved, India has, in a more direct manner, ventured to plug into development and economic activities as links to a global role.
- For example, India has espoused climate action as an issue where what India does within its borders to benefit its citizens also matters well beyond our borders. This has both economic and political benefits.
- Fighting the pandemic: During the second wave of the Covid-19 pandemic, our foreign policy apparatus was key in securing essential global supplies even as our corona warriors battled the virus across the country.
Phase of transformation in foreign policy
- By the late 1990s India was willing to place its own national interest – both economic and security – ahead of broader ideas of global justice and equity.
- A big domestic economic market gave India the space to engage the rest of the world on its own terms.
- India’s policy shift, which is ongoing today, seeks to position India among the great powers. India is now targeting a permanent seat at the United Nations Security Council, NSG membership and much more.
Challenges for India’s foreign policy
The climate crisis, health security and digital technologies are now becoming primary global concerns.
- Migration and human mobility are emerging issues. India and Africa will be the largest repositories of young populations while most other societies age.
- Concerns about anti-microbial resistance are rising as are those about cybersecurity. All these are trans-boundary issues with intrinsic foreign policy dimensions as we have to engage on them globally and what we do domestically has global repercussions.
- India-Pakistan relations: Zero tolerance to terrorism approach involves taking a firm line with Pakistan and strengthening international cooperation for countering terrorism and extremism.
- India- China relations: World is hurtling towards Chinese unipolarity; international borders are becoming irrelevant as climate change and cyber terror bypass them.
- China’s formidable Belt and Road Initiative (BRI) needs attention.
- The boundary question with China will remain important, as will our ties with other nations in South Asia. Rising geopolitical situations in Afghanistan.
- India- Russia relations: Re-defining Indo-Russia ties is needed as Moscow gets closer to Beijing.
- The impact of COVID-19 on global order: It will affect all segments of our lives, including politics, society, governance, economy, trade and development.
- Two possibilities: The emergence of a world order where China reigns supreme in a new unipolar world, or the second, where the world collectively shuns China for Coronavirus crisis and embarks on a different global chapter.
We need a holistic approach to tackle the challenges. There is a case to expand our foreign policy agenda beyond the traditional thinking of what is geopolitical.
- Taxation of global corporates, regulation of trans-boundary digital behemoths, big data management, disaster and humanitarian relief, trade issues, can benefit by being addressed through the prism of a broader approach taking into account the global dimensions.
- There will be challenges in changing from a sectoral to a broader approach that looks beyond the horizon. However we must keep in mind that, India emerged as a net beneficiary of the last wave of globalisation.
- Focus on Geo-economics inevitably impacts geopolitics. China’s Belt and Road Initiative is an example.
- Climate, health security and digital technologies are becoming aspects of geopolitical contestation of different kinds.
- India's Willingness to encompass areas, which we previously considered beyond the pale of our foreign policy posture, will be key to our ability to navigate the coming wave of global changes.
- India’s presidency of G20 in 2023 will provide opportunities to weave geo-economic themes with geopolitical interests.
- If we want to ride the next wave of global change, we need a broader global agenda and a carefully crafted game plan in place soon.
- Leveraging lopsided free trade agreements (FTAs):
- FTAs signed in the past few years have only made the balance of trade worse. There is tremendous pressure on India from other countries join RCEP.
- India must learn to leverage its vast market and human resources in the negotiations on FTAs.
- A comprehensive government approach to foreign policy:
- The ministries of external affairs, finance and commerce need to work together to identify and implement winning strategies.
- At the same time, other departments like that of industry will have to take steps to improve India’s productivity.
- Using soft power: India should work on further strengthening its own democratic credentials and opt for a people-based approach towards democracy promotion rather than a state-based approach.
- Engaging global powers: India’s need to expand spaces, pursue interests and leverage every relationship – America, Russia, China, Europe and Japan.
- Prioritizing the neighborhood:
- To tackle the border issue with China, the Peace and Tranquility Agreement of 1993 does not suffice and there is a need for a framework that takes into account the changed scenarios of the two countries.
- India-Nepal relationship can be used as a template for foreign policy in the SAARC region, which is characterised by open borders and free movement of people back and forth.
- Afghanistan approach: It is imperative to engage the Taliban, which is bound to be a dominant actor in Afghanistan in the days ahead.
The primary goal of foreign policy is to preserve, promote and protect national interests in the broadest sense of the term, and not to limit the canvas. What is needed is to mainstream the different strands of various policies that are encompassed by the coming wave of global change into an integrated foreign policy approach.