Geopolitical challenges for next govt

When our gaze shifts from the domestic to the external after the polls, the challenges would have multiplied

An excruciatingly extended general election process, stretching from April 1 to June 1, 2024, inevitably turns the national gaze from the external world to the unfolding domestic political drama. The next government, which shall take office on June 4, will face an international landscape that would have changed since April 1. What would that world look like?

The US would have become a more diminished power. Its domestic politics has become more fragmented and more polarised than before. The US stand on the Israel-Hamas war has divided American society to a degree not seen since the Vietnam War. President Joe Biden is neither able to restrain Israel nor deny military and economic support to it. In Europe, Russia is making important gains in its war against Ukraine with the US caught in a serious dilemma — it does not want an escalation that demands direct intervention by the North Atlantic Treaty Organization (Nato), but Ukraine losing the war, or settling for an unequal peace, would deliver a grievous blow to American credibility. This is compounded by the uncertainty over whether Mr Biden would be re-elected in the November presidential election or the nightmare of a Trump presidency will return.

The US has lowered the pitch of its confrontation with China in the Indo-Pacific region. It has launched a major diplomatic effort to expand engagement with China, including through the revival of several bilateral consultative mechanisms, which had lain dormant in the past couple of years. The US’ Indo-Pacific strategy stays in place, but we can see diminished priority to the Quad, the grouping of Australia, India, Japan and the US. The Quad summit scheduled for January this year has been postponed, but no new dates have been set. After repeatedly declaring that the US would defend Taiwan if it was invaded by China, President Biden categorically stated in January this year that the US did not support Taiwan independence. This was welcomed by China.

The US is in classic overstretch, having to deal with 2 “hot” wars — one in Europe and another in West Asia — and a potential conflict in the Indo-Pacific region. Since it is the Indo-Pacific which is, relatively speaking, more peaceful, the US wants to keep it that way, even while it shores up its alliances and military deployments in a region which it considers the centre of gravity of global economic and military power. India was able to leverage US preoccupation with the Indo-Pacific and its rivalry with China to expand its own diplomatic space. This may now shrink both due to the US itself becoming a diminished power, and also due to its compulsion to play down its confrontation with China. If a Bharatiya Janata Party (BJP) government under Narendra Modi retains power, there may be a view that a Trump presidency will, on balance, be good for India. This would be wrong. A Trump presidency will only accelerate the US’ decline and its unpredictability would “trump” any gain from ideological affinity.

What is China’s perception of the changed geopolitical situation? It will be recalled at the Shangri-la Security Conference in 2019, Chinese Foreign Minister Wang Yi had dismissed the Quad as “seafoam in the Pacific or the Indian Ocean; they may get some attention, but will soon dissipate”. As the Quad went from strength to strength, the Chinese perspective changed, regarding it as more threatening, an “Asian Nato” in the making. It is a reflection of China’s diminished concern over the Quad that a prominent Chinese analyst, Zhou Bo from the Centre for International Security and Strategy at Tsinghua University, has, in a recent article, said: “Washington has enjoyed modest success in rallying allies and partners in arrangements meant to contain China, such as the Indo-Pacific security partnership known as the Quad and the military partnership between Australia, the UK and the US, known as Aukus. But these groupings do not amount to much; they look like a few tiny islands in a vast ocean.” The revival of a dimissive tone on the Quad is unmistakable.

It is assumed that as India has emerged as the world’s fifth-largest economy and is on the road to becoming the third-largest by 2030, it will be an even more substantial and influential power both in Asia and the world. This is a reasonable assumption but needs to be qualified. India has a modest presence both in the Asian and the global economy. Its refusal to join the Regional Comprehensive Economic Partnership (RCEP), which is the largest regional economic arrangement in the world, has pushed it to the margins of the regional economy. The more limited trade agreements it has concluded with other countries like Australia or the European Free Trade Association (EFTA), can hardly be useful alternatives. The ongoing trade negotiations with the UK and the European Union (EU) are not making much progress. A large macroeconomic profile matters only if it is accompanied by a greater participation in the regional and global economy.

There has been much hype about the diversion of investment away from China to India. The Apple project in India is cited as an example. This ignores the reality of most large multinational corporations unwilling to move away from a Chinese market, which is one of the world’s largest and still expanding. Even the limited diversion that is taking place is targeting countries like Vietnam and others in Southeast Asia rather than India. Instead of hoping to profit on a China diversion, it would be much better for the new government to bring about a policy and regulatory overhaul, infrastructure upgrade, and create a market-friendly rather than a business-friendly environment that makes India an attractive investment destination in its own right. A policy that uses limited resources to promote a handful of global corporate champions rather than enabling market conditions that allow an across-the-board mushrooming of business and employment is unlikely to sustain India’s growth story and its rising geopolitical profile.

When our gaze finally shifts from the domestic to the external, the challenges would have multiplied. But geopolitical shifts throw up opportunities that the new government should be alert to and exploit to India’s advantage.

The writer is a former foreign secretary and an honorary fellow, Centre for Policy Research