BS@50: How India thrived in adversarial environment in the past 50 years

India at 77 stands as a country that has held its own, showing a remarkable capacity to manage an essentially adversarial external environment

Business Standard celebrates the 50th anniversary of its birth just as India marks the 77th anniversary of its independence. The newspaper was born in tumultuous times. Soon after its first edition appeared on March 27, 1975, the country was subjected to the dark days of the Emergency, which marked a major setback to its democratic dispensation. Fortunately, the political nightmare was short-lived with the then Prime Minister, Indira Gandhi, holding fresh elections in 1977. She and her party, the Indian National Congress, had to face a humiliating electoral defeat. Democracy emerged stronger from this reverse. Since then India has undergone significant political, economic and social changes. The winds of change in India have occurred in a shifting geopolitical landscape and have often been triggered by these shifts. There is a complex interplay of domestic and external dynamics, which has oriented the country in different, sometimes unexpected, directions.

A geopolitical constant throughout the post-Second World War period, right up to 1990, was the Cold War and the overarching East-West ideological and military confrontation. India’s non-alignment was driven by its determination to maintain its strategic autonomy in a polarised world. This has not changed, although its manifestations may be different.

The 1970s were upended by the unexpected entente between the US and China, marked by the historic visit of US President Richard Nixon to Beijing in 1971. India was confronted with a hostile alliance among the US, China and Pakistan. This heightened security challenge to the country persisted right up to 1989, when the brutal armed suppression of protesting students in Beijing’s Tiananmen Square ended the western honeymoon with China. This did not mean that the western economic and commercial interest in a rapidly growing China diminished in any way. Far from it, the US sponsored China’s entry into the World Trade Organisation in 2001, which further turbocharged China’s GDP growth. Much more dramatic and consequential was the collapse of the Soviet Union and the end of the Cold War in 1990. The US emerged as a hyper-power and the world became unipolar.

For India, the end of the Cold War held both peril and promise.

The peril came from several causes.

One, the Gulf War of 1990 raised oil prices significantly and worsened India’s trade balance. Foreign exchange reserves were barely enough to finance three weeks’ imports. The country was on the brink of default on its international obligations.

Two, the collapse of the Soviet Union, and subsequently of the Warsaw Pact, led to the dissolution of the preferential trade and payment arrangements the country had relied upon since 1953. This worsened the economic situation.

Three, the Indo-Soviet strategic partnership had served as a security anchor for India at least since 1960. It evaporated virtually overnight, heightening India’s sense of vulnerability.

And  four, as the uncontested superpower, the US capacity to damage India’s interests was much greater.

And yet, within just a few years, the Indian economy had stabilised and was on the threshold of an era of accelerated growth. India’s external relations adjusted remarkably well to the changed geopolitical situation, reaching out to the US and the West, and inaugurating a Look East policy of partnership with the dynamic economies of East and South-East Asia. It took advantage of the fact that the West was no longer looking at India through the prism of the Cold War. China was also emerging as a latent rival to the US, which provided an opportunity to project India as a reliable countervailing power. The success of this adjustment strategy is evident from the fact that in 1998, less than a decade after facing an existential crisis, an Indian leader was confident enough to conduct a series of nuclear weapon tests and declare India as a nuclear weapon state. After a temporary hiatus, India’s relations with all major powers were not only restored but also poised for further development, especially with the US. In just two years after the tests, President Bill Clinton was on an official visit to India in 2000.

India maintained its friendly relations with a much-diminished Russia, and the India-Russia defence relations played an important role in helping Russia in its painful economic transition to a market economy. In the negotiations leading up to the Indo-US civil nuclear agreement in 2008, Russia and the US worked together on behalf of India in enabling the multilateral counterpart to the deal. In the current confrontation between the US and Russia, it is difficult to imagine such a deal seeing the light of day.

India also took the initiative to make India-China relations more manageable. Rajiv Gandhi’s landmark visit to China in 1988 inaugurated a four-decade policy of resisting China when Indian interests were threatened, but working cooperatively in the several areas in which the two sides had convergent interests. However, the current tensions arising out of the violent clashes on the eastern Ladakh border have brought this overall benign phase to a pause. There are signs that the two countries may be moving towards a new equilibrium as the asymmetry of power between them begins to shrink. While India is likely to sustain a relatively higher growth rate over the next two to three decades, China has already entered a phase of secular decline as all mature economies do.

What this brief history of India’s external relations underscores is that democratic India has shown a remarkable capacity to manage an essentially adversarial external environment and shape it to serve its interests. Each political dispensation, irrespective of its ideological persuasion, has built upon the assets put in place by its predecessors. India’s IT prowess and its more recent digital success should give credit to the promotion of science and technology, and computerisation initiated by Rajiv Gandhi, an untested and politically challenged leader. It is the economic reforms and liberalisation, which Prime Minister PV Narasimha Rao had the political courage to undertake, that underlie our current economic success. Atal Bihari Vajpayee took a major risk in going ahead with the nuclear tests and laid the basis for the Indo-US nuclear deal. Each turned peril into promise. We may once again be entering an era of unpredictable geopolitical change with fluid inter-state relations. The Ukraine War festers on and West Asia on our flank may erupt into a wider war any moment. But we have the accumulated experience of successful crisis management in the past and greater agency in line with our expanding economic and security capabilities. The dream of a Viksit Bharat will be realised through the patient accumulation of contributions of several generations of outstanding Indians.

Shyam Saran is a former Foreign Secretary