India: Rising Power in a Disruptive World

India: Rising Power in a Disruptive World

India: Rising Power in a Disruptive World Rajesh Basrur S. Rajaratnam School of International Studies Nanyang Technological University Singapore Disruption Power transition and tensions US hegemony in decline

Rise of China Economic integration and blowback Higher walls trade immigration Environmental crisis Climate change

Can India Manage Disruption? Indias contradictions Emerging economy / Poverty worlds largest democracy / political violence, corruption Rising power / hemmed in by nuclear adversaries In short a living contradiction The First Disruption: Postcolonial Realities

The mixed legacy of British rule Foundations of a modern economy Modern infrastructure (railways, banks) But: weak education system Poverty: 1943 Bengal famine -3 million died Cold War

A new domination? Indias Response: Steering Clear of Power The Quest for Autonomy Economics Focus on autarky: global capitalism at arms length Politics Nonalignment: global power blocs at arms length

The Experience: Mixed Economics Industrial base, but stagnation Politics Third World leadership, but military failure (1962) Second (Double) Disruption: 1991

End of Cold War (and USSR) Loss of chief military supplier Loss of primary strategic supporter against China Irrelevance of NAM Balance of payments crisis IMF and structural adjustment Market loans: the humiliation of gold airlift

Indias Response: Embracing Power Integration with the global economy (= growth) FDI, trade Close links with major powers: multiple strategic partnerships (= autonomy) United States Japan Russia

the Quad (?) Nuclear weapons (= security, autonomy) The Experience: Mixed Economics: Emerging economy, but still weak caution on FTAs Politics: Strong Bilateral Linkages: US, Japan Seats at multiple tables

G-20, BRICS, ASEAN group, SCO, IORA Intractable tensions under the nuclear overhang Pakistan: crises (1999, 2001-02, 2008) China: smaller but growing crises (2017) Third Disruption? Trump: Unipolar exit and the flailing state

China, Europe: Neomercantilism and trade war Russia: the price of Ukraine sanctions: Countering Americas Adversaries through Sanctions Act (CAATSA) Iran: nuclear threat and sanctions India under Pressure Trade war: rising US tariffs steel, aluminium

Pressure at WTO: price support for wheat & rice; non-tariff barriers on solar panels Russia: sanctions threat - S-400 antimissile system Iran: sanctions threat - oil, Chabahar Indias Response-I Concede Reducing oil imports from Iran July 2018: orders cut by 12% over May

Stand firm On tariffs, subsidies (balanced trade-offs) On Russian S-400s (not negotiable) On Iran: Chabahar port (Afghan connection) Retaliate Tariffs on US goods: shrimps, apples, etc Indias Response-II

Offer carrots Arms from US (550% rise, 2013-17) NSAMS-II missile defence system ($1 Billion) Apache attack helicopters ($930 million) Re-orient Warm up to China Chinese carrots: rice imports; water data Reduce duties with APTA: over 3,000 items

Overall Pattern Major shifts in response to major disruptions 1950s: rejection of power 1990s: embracing power Limited shifts in response to limited disruptions + bargaining power 1970s limited embrace of power in

response to limited threat (isolation): IndoSoviet Treaty (1971) Smiling Buddha (1974) Future: Changing Threat Levels? Threat more concessions The hope: US policies unsustainable (?) Disruption will subside What Will India Be Like?

Not very different Cautious globalizer Steady move toward liberalization Diverse strategic partnerships Strategic Autonomy Relatively low military profile No propensity for military intervention

Continuing shift toward costly responsibility on environmental stabilization Thank You

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