Articles
The second term brings lots of challenges both in the economic and security domain
By Gazi Hassan and Muneeb Yousuf
A resounding election victory with the largest mandate given to Narendra Modi has once again opened the possibility of changing the outlook of India on international system. This is the first time in four decades that a government has been elected consecutively for the second time with more number of seats and a larger vote share than earlier. What does this mean for India in particular and international system in general?
Now that the elections are over, the government without much pomp and show should brace for the herculean economic and foreign policy challenges ahead.
What is happening?
The international political system is undergoing a tremendous change infested with trade wars, possible nuclear war, changing regional security and economic architecture, armed conflicts, economic and social disparity, looming peace processes and so on.
The United States under the Trump administration is challenging the very fundamentals of economic globalisation. The conflict over trade with China has fallouts for the world economy. The US banning of Huawei on alleged espionage charges, trade and tariff war with China, renewed sanctions on Iran following its withdrawal from Joint Comprehensive Plan of Action (JCPOA) last year and finally sending aircraft carrier US Abraham Lincoln strike group to the Persian Gulf to counter an alleged threat from Iran are leading to uncertainties.
China’s growing footprints are hard to ignore in the changing economic and security architecture in regions such as the Indo-Pacific, the Indian Ocean and the Gulf. Through its ambitious Belt Road Initiative (BRI) project and linking it to various other bilateral and joint projects such as the China Pakistan Economic Corridor (CPEC), China is making deep inroads into the region challenging other regional powers.
The armed conflicts in Syria where the country’s future remains bleak without any resolution in the near future and the war in Yemen, where Saudi Arabia and its coalition partners are up against Iranian-backed Houthi rebels, have pushed the Middle Eastern region into a humanitarian disaster.
The Israel-Palestine peace process is at a stalemate in terms of willingness from the part of the Israeli government to reach a possible two-state solution. The Afghan peace process remains another crucial issue that needs to be reached to end the sufferings of Afghans.
Where does India stand?
As Prime Minister Narendra Modi braces for his second term, there is a need for a strong leadership and diplomatic dexterity from the government to confront a number of challenges on foreign policy front as mentioned above. PM Modi has given a new impetus to India’s foreign policy in his first term. From his “Hug Diplomacy” to Chai pe Charcha and developing a personalised relationship with the world leaders have provided India with tangible dividends in the defence and economic sectors. As soon as it had become clear that Modi has won a historic landslide election victory, congratulatory messages started pouring in from leaders across the world. The diplomatic engagements and personal equations with the world leaders have helped him successfully sell India as a brand with a potential market and immense opportunities for investments.
The challenges arising from trade and technological conflict between the US and China have implication for India to secure its place in the global economy. In addition to that, United States’ lifting of waiver on India buying oil from Iran has led to energy security problems for India. The security and defence cooperation between India and US experienced robustness in the first term and will continue to remain strong. However, on trade front, the withdrawal of Generalized Systems of Preferences (GSP) treatment to India and negotiations on increased import duties on Indian steel and aluminum remain unresolved. It is the economic dimension that needs serious work to resolve the outstanding issues.
The clouds of war looming over the Persian Gulf need a dire attention. The ongoing accusations and counter-accusations between Iran and the US have led to security threat not only to the region but also to India’s interests. The Chabahar port developed by India for its alternate access to landlocked Afghanistan and countries of Central Asia remains central to its strategic interests.
With the US withdrawal from JCPOA last year, famously known as ‘Iran Deal’ reached in 2015, renewed sanctions were put on Iran to cripple its economy, and sending a fleet of war ships and aircraft carrier into the Persian Gulf has led to the possibility of potential conflict between the US and Iran. The onus for securing its energy needs rests solely on India and it can play the role of a mediator in diffusing the crisis.
On the other hand, the relations with the Gulf Cooperation Council (GCC) have to be strengthened as it homes India’s 8 million diaspora, a significant contributor to the Indian economy. The Saudi-Iran political dynamics needs more careful de-hyphenation. The fallout of their conflict can compromise India’s energy interests in the region.
China’s expanding footprints in India’s neighbourhood cannot be ignored. The strengthening of Sino-Pak axis in the region remains a constant threat to India’s sovereignty and territorial integrity. The Chinese navy’s forays into the Indian Ocean Region remain a matter of security concern for India and it has to come up with appropriate measures to secure and safeguard its interests in the region. BRI and CPEC will continue to challenge India’s leadership and growth in the region.
The pressure on Modi in his second term will be to restart a dialogue process with Pakistan and insist it to crack down on militant organisations and terrorist activities and stop waging proxy war against India.
The Afghan peace process involving the US, Taliban and Pakistan has led to the possible prospect for India to be left out. Modi faces stiff challenge to overcome the role of Pakistan in the peace process and to carve out a space for India in the unfolding dynamics in the peace process and regional security.
When it comes to the multilateral trade agreements that India signed during the last five years, none of the FTAs and PTAs has made any progress, whether it is with the EU, the US or most importantly Regional Comprehensive Economic Partnership (RCEP), where talks are going on for India to join it. One of the issues holding back India from joining RCEP is that there is a lot of push back from the domestic industry in sectors such as Aluminum and Copper. Other main reason for the reluctance to join RCEP is China. As India already has FTAs with all ASEAN countries, Korea and Japan, joining RCEP will see new entrants such as China, Australia and New Zealand in the grouping. Also, if India joins RECP there will be zero duty on imports from China and that has the potential to crush its indigenous industries. In addition to that, the growing trade surplus in China’s favour is yet another concern for India for not joining RCEP.
Conclusion
Modi’s first term focused on articulating a global role for India not only as one of the leading players in the international system but also as the one that can shape global rules. The second term brings lots of challenges both in the economic and security domain. It should focus first on India’s energy security which is vulnerable to the conflicts in the Middle East, second on re-positioning India in the regional security order and finally to project itself as a global player on the international front. The Modi government needs to leverage on the personalised relations it has developed with the world leaders over the last five years and the soft power to position India at 2020 Global Order. This will involve a long-term strategic thinking for strengthening its engagement with the countries in the immediate neighbourhood.
This article was published in Greater Kashmir click to read
Gazi Hassan is a Senior Research Associate at Centre for Public Policy Research Kochi, India andMuneeb Yousuf is a Doctoral Candidate at MMAJ Academy of International Studies, Jamia Millia Islamia, New Delhi.
Views expressed by the authors are personal and need not reflect or represent the views of Centre for Public Policy Research.
