All through the cold war, India, through a non-aligned position, kept away from being drawn into a conflict that it could ill afford. But, down the line, India was dealing with difficulties on its northern borders. The defeat to China in 1962 drew it closer to the Soviet Union to keep China away. Post the collapse of the Soviet Union and the opening up of the economy in 1991, India needed to attract investments from the west. The civil nuclear deal of 2005 with the 123 agreement saw it gain confidence from the US and some recognition within the Nuclear Suppliers Group as well. It helped that the US was also wary of the rise of China in Asia.
Neither the US nor Europe has recovered from the economic crisis of 2007–08. After decades of open and global trade, this crisis has made the western nations batten down the hatches and introduce protectionist measures. China took advantage of their early entry into the manufacturing boom and capitalised on it for decades. India was late, and just when the economy is starting to pick up steam, we are into economic rough weather internationally. Our comparative advantages are yet to fully unravel. The IT services industry is running into arbitrage erosion due to other growing economies, and job loss protectionism in the western nations.
China meanwhile is gaining territory all around India, militarily. The Belt and Road Initiative of the Chinese largely tries to setup navigation routes for trade along the Indian Ocean on sea and all the way to Europe on land. China is building large port projects in Colombo, Maldives, Pakistan, Kenya etc. and have also stationed military fleet at these locations. This clearly threatens the influence of India in the region. India has been unable to counter these moves due to Chinese military and economic strength. We have been weak in our responses to China in territorial skirmishes. Both the western and eastern sector disputes with the country remain unresolved. We have in fact bent over backwards to please China before bilateral summits, while they put us on the back foot with controversial activities and statements. Most recently Air India has changed Taiwan to Chinese Taipei officially, on request from MEA, despite protests from the country. This power asymmetry is telling. Chinas defence spending is 4 times larger than ours, and the economy 5 times larger[i]. China has moved on to positioning itself as a threat to the US and we are no longer a force to reckon with in this posturing.
Meanwhile on the western front, protectionism is only getting worse. What is different under Trump, is his cozying up to Russia and aggressiveness against China. This might work in India’s favour. But this is contingent on his ability to fend of various challenges that he faces at home on his relationship with Putin. With Russia being accused of interfering in the US elections, there is tremendous animosity and opposition from congress to any deals that Trump might make with the country. The US is continuing to push for democracy and peace in the Middle East with mixed results. Its fall out with Europe and NATO is going to hamper its ability to get results in the Middle East. Peace in the region is going to take decades and it is to be seen how Trump will deal with it in the short term. The US still has the largest military presence and influence across the world. India needs to strengthen its cooperation with the US and Europe to buffer itself from extremist threats on its western front, but more importantly, gain support in the UN against arm twisting by the Chinese politically and economically. If Trump fails to get his country to support any deal with Russia, we have to expect them to retreat from Asia and leave it for dominance by China.
Ultimately, the Westphalian world order is slowly giving way to a multipolar world order dominated by Asia[ii]. Chinese hegemony in the region is ever increasing. China will continue to grow economically. But once the low hanging fruits, of economic development is exhausted, the growth will plateau. Anecdotes of ghost cities are already painting a picture of overcapacity. Russia continues to have a say in the region even if they wont be as powerful as either China or the US. India’s military and economic strength, being a fraction of the Chinese, makes it important for us to find allies in the region. Striking alliances with Russia, Vietnam, Indonesia, South Korea, Japan etc. will help India put some collective pressure on the Chinese hegemony in the region and keep it in check. India is already investing in Mongolia, strengthening economic cooperation with Japan. India needs to create more presence in global organizations like UN Security Council, APEC, ASEAN etc. or create new ones that can help cement ties with Asian allies. But Asia will be multipolar as economic power is distributed. Instead of trying to catch up with China on the traditional growth paradigm, it should redefine progress in technological and sustainable terms. This will allow it to dominate the future on different terms it can set. A blue ocean strategy, in the new world order.
[i]Economic Times, Mar 6, 2018
[ii]How India sees the World, Shyam Saran, 2017