Dynamics of India’s Changing Foreign Policy – Challenges & Prospects – III

In this Last Section we will briefly analyse how Indian foreign policy has been shaping on till date while dealing with these security and developmental challenges in the light of the concept of core national interest discussed earlier.

First, the issue of Security; it is essentially assessed in terms of ‘threat perception’ arising first from immediate neighbours – Pakistan and China and then from powers present in the neighbourhood who are in a position to affect India’s security directly or indirectly. These include Russia, USA, Japan, Iran, Saudi Arabia and to a lesser degree Indonesia due to her geographical proximity to India. Nepal, Sri Lanka and Myanmar fall in a special category because of shared physical borders or close proximity and ethnicity and languages. The Indian foreign policy initiatives in regard to her neighbours are summarized below.

China and India: ‘ Peaceful rise of China’ after the economic reform to the world second largest economy of US $12 trillion and rise of India are among the major developments in the post 9/11 world. Both have enhanced their military strength and despite the unresolved border dispute, have created structures for enhancing economic cooperation. Though Sino-Indian trade which went up to $ 75 billion in 2011 has come down to around $50 billion, it is still robust and both are members of BRICS grouping of nations and partners of China led Asian Infrastructure Investment Bank (AIIB) and Bangladesh, China, India and Myanmar (BCIM) initiative.

On Sino-Indian relations some strategic experts hold that, “India and China are competitors and not enemies”, and share interest in areas like bridging infrastructural gaps, developing Trans Asian surface connectivity, liberalising trade and IPR regimes, green energy development etc .Inclusion of Chinese RMB in the basket of IMF currencies with a weightage higher than pound sterling is to be seen in the light of these development.

However, amidst all this, the major concern or rather negative point in regard to China is its Strategic Support to Pakistan in building missile systems and supporting Pakistan’s bid to be a member of the NSG and foiling India’s effort for the same. China has consistently vetoing India’s resolution in the UN to designate Pak terror leader Masood Azhar as a terrorist and on South China Sea (SCS) dispute, Indian stand that SCS should remain a sea lane for all nations is seen by China as close to the position taken US & Japan on an overall basis India’s policy seems to be a measured one, that is, to continue cooperation in whichever field possible while pursuing joint efforts to manage borders peacefully as per the agreements in 1990’s and bringing China close to the Indian position on cross border terrorism from Pakistan as attempted during Goa BRICS summit in Oct 2016.

India and US came close during the 1962 War when India sought US and western military support but it did not last long due to strategic importance of Pakistan for USA as the facilitator of US efforts to reach China in 1974 following Sino-Soviet rift (which was also evident during 1971 Indo-Pak War) and later as a front line state during Afghan war since 1980s and till date. However, signing of the Indo-US Civil Nuclear Deal, the recent concluded Logistics Exchange Memorandum of Agreement (LEMOA), convergence of interests in South China sea, show a distinct shift in Indian policy towards US which are not only limited to economic engagement, rather these engagements have become quite comprehensive where both nation’s has shown growing concern for each other’s security interest. However, this accelerated rapprochement between US and India have been resented by China and Russia.

India’s policy towards Pakistan is largely dictated by factors like, first – Pakistan’s internal political dynamics that perpetuates religious, sectarian strife, violence and terrorism, suppression of rights of ethnic groups like those in Baluchistan, Sind and Pak occupied Kashmir and its failure to develop a ‘Modern State’. More importantly since 1978-79, Pakistan under Zia-ul-Haq adopted promotion of militancy and proxy war in Kashmir after having failed to achieve its object in 1965 war, as an active part of its foreign policy. The terror attack in Uri in September 2016 and continuing violation of LOC to facilitate infiltration of terrorists in Kashmir valley from Pakistan are manifestation of this policy. Since India has virtually no economic interaction with Pakistan, scope of improving relations in other spheres is virtually non-existent. Therefore, India’s policy is to ensure lasting diplomatic isolation of Pakistan while effectively delivering a military response to cross border terror attacks and infiltration bids. However, despite strong Indian argument to name Pakistan as ‘ The Mothership of Terrorism’, and a country that shelters not just terrorists but nurtures a mindset in the BRICS summit in Goa. The Final declaration did not mention Pakistan nor key words like ‘cross border terrorism’ or ‘State Sponsored Terrorism’ and mentioned terror groups in Middle East ( ISIS), Al Qaeda  and Jabhat –al – Nusra. This was because China took Pakistan’s side more explicitly at the BRICS Summit, for its high stakes in USD 46 billion China Pakistan Economic Corridor Project which will provide China access to The Persian Gulf through the port of Gwadar in Baluchistan. In fact CPEC has accorded Baluchistan which covers 46% of Pakistan’s geographical area and about 80% its mineral resources, enormous strategic importance. The ongoing insurgency in Baluchistan for Baloch independence and Indian advocacy for the Baloch cause,  a new feature of policy towards Pakistan has added to the tension in Indo-Pak relations.

Nehru’s Policy of non-alignment, Third World unity and unstinted support for anti-imperialist struggle of oppressed people produced a distinct tilt towards USSR and Socialism which the west often considered opportunistic. However, it drew India closer to Russia after Khrushchev took over in 1954 and steadily developed into a durable defence and trade partnership facilitated by ‘rupee trade’ which was to the advantage of the Russians as it saved USD. Geopolitics dictates that, India – Russia Friendship would be a balancing factor in central Asia and Middle East and with Russian support access to energy rich Central Asian Republics could be easier as Russia still holds influence in the region; and Russia’s interest in the restoration of stable Afghanistan converges with India’s interest in the region freed from the pernicious influence of Taliban.

Russia has stood by India on the “ Core” Kashmir Issue and the Oct 2016 Indo-Russian deal of USD 5 billion on S-400 defence missile strengthened the relationship. However, the recent Russian sale of Attack helicopters to Pakistan and the First ever joint Russia-Pak military exercise in Sept 2016, and the growing collaboration between Russia and China in forums like Shanghai Cooperation Council must be notes as indications of a new alignment in Asia with a clear object of countering US dominance in the Pacific. We must note that the Sino-Soviet rift in early 1970s helped US to consolidate her hold in Asia-Pacific. On the same logic convergence of China and Russia interests and Pakistan being Chinas ‘All Weather Friend‘ will not be to the advantage of India. Hence, the renewed focus of Indian Policy on long term defence cooperation with Russia which historically was the only Super Power with whom India had a Strategic defence relationship viz The Indo- Soviet Treaty in 1971.

India – Japan bilateral relations were upgraded to a ‘ Global and Strategic partnership in 2006 and further raised to ‘ Special Strategic and Global partnership’ in 2014 under PM Modi, that included a memorandum on defence cooperation and in areas like New and Renewable Energy. ‘Act East Policy’ of India is basically an attempt to integrate India’s economy and its north-eastern region into the ASEAN system which has emerged in 2015 as ASEAN Economic Community, by entering into free trade agreements which have been met with reasonable success. India became a member of ASEAN Regional Forum(ARF) and East Asia Summit in 2002 to take forward its engagement with the region.

India- Iran relationships are on the threshold of a major improvement after signing of nuclear deal between Iran and US and other western powers and gradual withdrawal of western sanctions against Iran. India’s investment in building Chabahar Port in Iran is a strategic move to bypass Pakistan to reach Afghanistan to gain access to central Asia and its huge energy resources and market, apart from continuing her role in bringing about stability and economic progress in Afghanistan. India is presently importing about 70% of its oil from West Asian Countries, 22% from African Countries and with huge presence of Indian work force in West Asia and settlers in Africa, make these two regions vital not only for meeting India’s energy needs but also source of NRI investment and remittances. India is already the fifth largest energy consumer and is likely to attain third position soon. The fact that India’s domestic oil output is declining, brings out the importance of the Gulf Region which holds 60% of the total world oil reserves and 34 % of proven natural gas in our Foreign policy frame work as critical for Energy security in particular.

India’s management of relations in her neighbourhood shows a distinct preference for economic and technological cooperation alliances evident from the groupings like The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC),The Bangladesh, Bhutan, India, Nepal (BBIN) initiative and The Mekong–Ganga Cooperation (MGC) and bilateral agreements on specific issues like India-Nepal Power Trade Agreement (2014), and Trade coastal shipping and Inland Water transit and trade agreements with Bangladesh for mutual benefit. In the same manner India has built engagement with Myanmar in infrastructure building and Oil exploration to initiate economic integration. The Kaladan Multi-modal transport Project is one such joint Indo-Myanmar joint effort that will link India’s land locked North- East region to Sittwe port in Myanmar.


This paper contends that the evolution of India’s foreign policy as analysed in the preceding sections reflects its resilience, resolute defence of its core strategic objects in Jammu and Kashmir and Sino-Indian border region and increasing role of ‘ geo-economics’ in foreign policy, formulation and approaches to other nations and well within the framework of geo-politics and geo-strategy. It is useful at this stage to look at the definition of Geo-Economics as it has caused major changes in foreign policy While geo-strategy refers to long term management of geo-political interest, geo-economics is the economic consequences of trends of geo-politics and national power and the relationship between economic policies and changes in national power and geo-politics. Relentless efforts of major powers to gain control over energy sources all over the world and in the Middle East in particular is an example of geo-economics shaping the geo-politics and conflicts. This is founded on two lessons drawn from post World War II developments; the First is that ‘geography is economic destiny’ of nations and Second is that geology meaning the location of sources of energy and strategic minerals or in its possible transport route determines the geo-strategic importance of a country. Economic strength which is the outcome of all these forces backed up by technology and investment has thus become the ‘currency of power’. This makes geo-economics a critical factor in foreign policy making.  This is all but natural as a developing country like India with over 120 crore population has to give priority to economic interest and hence the continuing search for energy, technology, investment and development assistance from new sources. This is evident from Indian participation in China led Asian Infrastructure Investment bank (AIIB), BRICS bank and the New Development bank and these institutions are viewed as “geo-economic alliances”.

From this perspective following changes are discernible in India’s foreign policy since 2014:

  • A greater emphasis on enhancing economic and technological capability by expanded domestic effort and attracting foreign investment and technology in ‘ Sunrise ‘ sectors like solar and renewable energy while putting equal emphasis on ‘ human capability enhancement’.

  • Shift from non-alignment to what may be called dynamic non-alignment which allows development of strong strategic ties with powers – Super or great or Regional depending on ‘ the National interest’ and also economic relationship with potential and even actual adversaries. This is based on an appreciation that larger the trade and economic ties the lesser are the chances of an armed conflict because trade creates “ constituencies” for peace on both sides. This is geo-economics in practice and seen as a peace building effort.

  • A greater concern for mutually beneficial engagement with neighbours through economic and technological cooperation with the object of building a South Asian Free Trade Area (SAFTA) and to participate in development projects to raise the confidence level. India’s role in hydropower development in Bhutan is an example of such efforts.

  • A strong initiative to integrate Indian economy into ASEAN through Act East Policy.

  • ‘Zero tolerance’ of terror and an equally strong position on border with Pakistan and assertion of the right to strike across the border to destroy “ terror launch pads” by covert military action.

  • A stronger emphasis on multilateral engagement both at the regional and International levels. The BIMSTEC stand on terror on the side lines of Goa BRICS Summit in Oct 2016 shows the potential of such bodies for united action on matters of common security interest.

  • Emphasis on NRI participation in India’s development.

  • Diversification of sources of procurement of defence equipments and technology.

  • A serious effort to secure membership of The United Nations Security Council (UNSC).

  • The motto ‘ Make in India’ is a strategy to turn India into a manufacturing hub for attracting foreign capital will be an important policy objective.

Each of these objects and measures has its own distinct challenges as for example economic partnership work only when trade is eased up and restrictions reduced quickly. According to observers in South East Asia, India’s failure to do so might have cost her membership of US led Trans pacific Trade partnership and Asia-Pacific Economic Cooperation. Such challenges in every policy have to be examined and adequately met including security related issue.

Foreign policy and diplomacy demands patience, long term planning and faith in step by step approach to reach the National Goal. It is apt to conclude this discussion by recalling What Dr Henry Kissinger said about diplomacy, “Successful Diplomacy is generally more about managing problems than solving them outright and……..The task of a Statesman is to construct a “balance of fear among great powers as part of the maintenance of an orderly international system – that while not necessarily just or fair was accepted by all the principal players as legitimate”.


This Concludes the Series on: Dynamics of India’s Changing Foreign Policy – Challenges & Prospects.