India: More than a Market

World leaders who have recently visited India may have been here on behalf of contract-driven diplomacy, but only India can truly determine how its message is heard on the world stage

President Sarkozy with PM Singh on his recent visit to India. LIONEL BONAVENTURE / REUTERS
01 January, 2011

OVER THE LAST SIX MONTHS, some of the most powerful leaders in the world have paid official visits to India. Most of them came primarily to sign contracts, especially those from Western countries facing economic crises. Barack Obama and Nicolas Sarkozy claimed that they sold respectively 15 billion dollars and 15 billion euros worth of civil and military equipment to India. The former immediately converted his figure into jobs, declaring that these contracts represented 50,000 American jobs.

India, with an annual seven percent growth rate over the past ten years, has become one of the world’s most dynamic economies, second only to China among emerging countries. It needs to build infrastructure in transportation, communication and energy—and the West is more than happy to not only sell the needed equipment, but also to transfer the technology when India asks for it.

This contract-driven diplomacy results in new attitudes among Western visitors. First, it exacerbates competition between them. This is especially problematic for the Europeans who are supposed to be part of a ‘Union.’ The Indians will find it more and more difficult to look at the EU as a political entity if member leaders continue to come, one after another, to sell their industrial products—something they can use to bring prices down. Second, this competition for markets leads many Western visitors to indulge in a new form of Pakistan-bashing. David Cameron and Nicolas Sarkozy described India’s neighbour as a crucible of terrorism while on Indian soil, something unimaginable before.

Second, those who did not go that far—like Obama, who, instead, invited New Delhi to engage Islamabad—at least abstained from visiting Pakistan before or after India, a practice even former US President Bill Clinton observed in 2000 when he spent only five hours in Pakistan. In that sense, the de-hyphenation India was longing for is taking shape.

Third, contracts-driven diplomacy gives a very important role to business communities on both the Indian side as well as on that of visitors. US-India relations are a case in point. Not only the CEO forum—where heads of multinationals from both countries meet every six months—has become a vital link, but when Obama visited India he flew over a huge delegation of businessmen. Ron Somers, the President of the US-India Business Council even said, “Business is driving this whole thing with India now. We just need governments to bring people along.” Certainly, this link gives US-India relations some continuity in spite of the ups and downs due to alternations in power (remember Delhi’s disappointment with Obama’s election), but it also tends to overshadow political issues at a time when India does not want to be seen as just a market and is keen, therefore, to decouple economic relations from the political ones. Interestingly, during Sarkozy’s visit, no commercial contract was signed—which showed that trade negotiations had their own pace, one that the Indian government was not prepared to interfere with.

This year’s diplomatic dance-card—Obama in November; Sarkozy, Chinese Premier Wen Jiabao and Russian President Medvedev in December—suggests that India, at last, has gained the recognition of the other great powers and, even better, is one of them. While it is certainly an indication of a changing international status, this assessment needs to be qualified with a note of caution.

First, India will have to check that it is taken seriously by these visitors when the issues at stake are not only related to contracts. None of the visiting leaders—except the Chinese Premier—could help from reasserting the fact that India should become a member of the UN Security Council. Will they do all they can to make it happen? The joint statement by President Obama and Prime Minister Manmohan Singh mentioned the fact that Washington looked at India as a key partner in Asia. Until recently, to use the title of a book, the US were arming India ‘without aiming’—which meant that Washington saw no concrete role for Delhi in its global or even regional strategy. Now, in this final communiqué, one can read that:

“The two leaders have a shared vision for peace, stability and prosperity in Asia, the Indian Ocean region and the Pacific region and are committed to work together, and with others in the region, for the evolution of an open, balanced and inclusive architecture in the region. […] The two leaders agreed to deepen existing regular strategic consultations on developments in east Asia and decided to expand and intensify their strategic consultations to cover regional and global issues of mutual interests, including Central and West Asia. The two sides committed to intensify consultation, cooperation and coordination to promote a stable, democratic, prosperous, and independent Afghanistan.”

If we read between the lines it means not only that India may be part of US Afghan policy, but may also be part of Washington’s attempts at containing China, along with the countries Obama visited in November (South Korea, Japan, Indonesia) and others (like Australia and Singapore). Both perspectives are problematic. First, one may wonder whether the Americans can really risk alienating the Pakistanis vis-à-vis Afghanistan, while they are about to subcontract them the war there. Second, one may wonder whether India is prepared to help the US to balance China in Asia.

The second problem posed by the international recognition India seems to be getting today pertains to the obvious discrepancy between this new, prestigious position and the realities of the country. While India is shining for and through its brilliant elite groups, it is not in the same league as the other BRIC countries in terms of development. Its infrastructure does not compare to those of China, a country whose per capita income is more than twice that of India. The risk is that the country is under the illusion that it has arrived when it is not even half way to where it should be. Hence, the disenchantment of the CWG—the type of achievements for which India is not yet equipped for—and, more importantly, the risk of social amnesia: if 10 percent of India is doing well by international standards, mass poverty affects millions of landless peasants who may be wooed by naxalism in larger numbers if nothing is done to defuse their anger and despair.

Last but not least, if India is now recognised as a global power, what role does it want to play? As mentioned above, it is both rich and poor and close to the US but not willing to antagonise China. Therefore the part India can play is that of ‘a bridge power’ as Sunil Khilnani suggested a few years ago. India can mediate between the North and the South, between the BRIC countries and the others (those who are more developed and those less advanced). In fact, this is the repertoire that Jairam Ramesh successfully explored in Cancun, where he played a much more positive role than in Copenhagen.

There was a time—in the 1950s and 60s—when India had a message for the world (that of Nehru, spelled out in terms of non-alignment and disarmament), but no voice because of its poverty. Unitl recently, India could be heard, but had nothing to say—except standard nationalistic arguments. Today, India may have both, the voice and a message pertaining to a defence of multilateralism and sustainable development. It may be too early to rejoice, but India must realise that the world is watching her and that she may play a role that Europe, exhausted by its crises, tried to play for the last time in Copenhagen but may not play in the future. Other democratic, emerging countries—including Brazil—may join hands with her in this new scenario. Only time will tell if these are utopian views.