March of a Republic: India must find its way in an uncertain environment

As global order frays and the US turns inward, India's Republic Day optics underline a strategic pivot towards Europe and faster reforms at home

India last year celebrated 75 years of the adoption of the Constitution. It provided the nation an opportunity to come together to assess the journey thus far and discuss the challenges that lie ahead. The nature of challenges that India faces has changed over the past year, particularly in its external engagement. In fact, India is not alone, and this year’s Republic Day celebrations, in a way, reflect both the changed circumstances and the shaping of a response. European Union (EU) leaders Antonio Costa and Ursula von der Leyen will be the chief guests at today’s celebrations. India and the EU are expected to finalise the free-trade agreement (FTA) this week. 

Over the past several months, the policies and actions of the world’s biggest power, the United States (US), have challenged the very foundations of the global order. Not only has the assumption that the US will defend the post-war global order, of which it was the principal architect, been shattered, but it has also become the biggest risk to it. American President Donald Trump’s fixation with acquiring Greenland is the latest illustration in this context. Although Mr Trump dialled down the rhetoric in his Davos speech, it is now clear to European and other world leaders that the US is no longer a reliable partner, either in trade or security matters. Therefore, the possible agreement between India and the EU comes at a critical juncture, and it is fair to argue that the current global environment has increased the urgency. 

The US has also singled out India and imposed higher tariffs on the pretext of India’s import of Russian oil. Even if the India-EU FTA leaves some sensitive areas out of its scope, it will be a breakthrough for both sides. There are reports that issues like the EU’s Carbon Border Adjustment Mechanism are also likely to be addressed. However, India’s engagement goes beyond trade. Europe is also building defence capabilities, and India could be a partner in this endeavour. An India-EU summit may take engagements in this area further with mutual benefits. India has a deep interest in protecting a rule-based global order, and it should be part of arrangements that are willing to work in this direction. 

However, to be able to adjust to the new global order, which may not be as stable as the one being dismantled, India needs to improve its level of preparedness in a variety of areas. The Indian republic will have to leverage its depth and diversity. The country needs to revisit its priorities and adjust to improve economic and social outcomes. This will also boost the chances of becoming a developed country by 1947. India needs reforms in all aspects of development. This is not to suggest that things are not improving, but the pace needs to be accelerated.  India, for instance, has done extremely well in building physical and digital infrastructure over the past few years, which has improved productive capacity. The government is also working on deregulation. If done properly, it could become the single-biggest driver of growth in the coming years. Overall, there is little debate about what India wants and what it needs to do. The real issue is how it moves forward. In an unsupportive global environment, India needs to find its way quickly.