Market force: How India is using its economic clout in the diplomatic arena

For India, this changing diplomatic style comes with its own set of risks. If not handled well, New Delhi's credibility as a serious global player might be on the line

There is no doubt that Indian diplomacy has been evolving rapidly in the last few years. In some ways, this is how it should be. After all, to be effective diplomacy has to respond to real-time pulls and pressures and respond accordingly. But in recent months, Indian diplomacy has been showing a new edge, a new readiness to openly engage with those who sabotage India’s vital interests. This has been most categorical when it comes to India’s decision to abrogate Article 370 in Jammu and Kashmir, thereby changing the region’s constitutional status and fundamentally altering the status quo. As was to be expected, the decision continues to have global reverberations.

Most nations around the world have been sympathetic to Indian concerns and have agreed with New Delhi that Kashmir is India's internal matter. But some have pointedly taken Pakistan’s side. China remains the big problem, arguing that India has unilaterally changed its domestic law and administrative divisions to challenge its sovereignty and interests. Some other nations, too, have joined the Pakistani bandwagon.

Last month, at the United Nations General Assembly (UNGA), Turkish President Recip Tayyip Erdogan criticised India's move to abrogate Article 370 and in a strong show of support for Pakistani viewpoint said that Kashmiris were “virtually under blockade with 8 million people, unfortunately, unable to step outside” and therefore it is imperative to solve the problem through “dialogue on the basis of justice, equity, and not through collision.” Erdogan also said the stability and prosperity of South Asia cannot be separated from the Kashmir issue.

Diplomatic offensive for Kashmir

The response of India’s Ministry of External Affairs was robust, calling “upon the Turkey government to get a proper understanding of the situation on the ground before they make any further statements on this issue” as this “is a matter which is completely internal to India.” And immediately on the sidelines of the UNGA, Prime Minister Narendra Modi chose to meet the heads of states of Ankara’s rivals—Greece, Cyprus and Armenia—in a message whose import would not have been lost on Erdogan.

India not only cancelled a proposed visit by Prime Minister Narendra Modi to Ankara, but in a first, it also banned Turkish firm Anadolu Shipyard from doing defence-related business in India. Hindustan Shipyard Limited had chosen Anadolu Shipyard as its technology partner for the Indian Navy’s $2-billion fleet support ships program, but Turkish-Pakistani relations made it imperative for New Delhi to show its reluctance to engage Ankara on such a key project. This was followed by a rare public rebuke to Turkey for its military operations in Syria when New Delhi criticised Turkey's unilateral military offensive in northeast Syria, saying it can undermine stability in the region and the fight against terrorism. It called upon Ankara to exercise restraint and respect the sovereignty and territorial integrity of Syria.

Illustration by Binay Sinha

India’s response to Malaysia’s support for Pakistan on Kashmir has also been strong, though relatively modest so far when compared to Turkey. New Delhi’s annoyance with Kuala Lumpur was related to Malaysian Prime Minister Mahathir Mohamad’s tweet at the UNGA that Jammu and Kashmir had been “invaded and occupied,” though he added that “there may be reasons for this action but it is still wrong.” In addition to tensions around Kashmir, friction between India and Malaysia has been brewing over the radical Islamist preacher Zakir Naik, whom New Delhi wants extradited from Malaysia. New Delhi refrained from targeting Malaysia directly, but India’s top vegetable oil trade body asked its members to stop buying Malaysian palm oil. India is the world’s biggest importer of edible oils and it indicated that it might be willing to look for alternative suppliers. It was after almost a month-long suspension that Indian refiners started buying Malaysian palm oil.

Changing diplomatic style

These actions underscore a new readiness in New Delhi to raise the costs for those who want to scuttle Indian interests. For India’s friends as well as adversaries, it carries a firm message that Indian red lines should be respected if a beneficial bilateral partnership is to be forged with a leading global economy. This is a significant change for a nation that has so far been content with signing “strategic partnership” agreements with so many countries that the term has been left bereft of any meaning. Most of these ties are neither strategic nor can they be termed as real partnerships.

But for India, too, this changing diplomatic style comes with its own set of risks. If not handled well, New Delhi’s credibility as a serious global player might be on the line. Critics would also point out the case of China where India has tried to walk a middle path by seeking to engage Beijing as well as making its displeasure clear in multiple ways. But that’s a faux argument in many ways. After all, China too deals with the US and countries like India differently. The realities of power will always shape a nation’s diplomatic outreach to other nations. Yet even in the case of China, it is clear that India has over the years sought to increase the costs of Beijing’s behaviour.

This newfound attempt at using its economic levers of power more explicitly than before opens up a new terrain for Indian diplomacy which many traditionalists may not be very comfortable with. But with India’s economic rise, it is another way to protect and enhance Indian interests. And New Delhi should not be shy of using that. This is especially true in an era when economic statecraft is once again in the driving seat.

The views expressed in this article are personal. Prof. Harsh V Pant is the Director, Studies and Head, Strategic Studies Programme, at the Observer Research Foundation, New Delhi