From reopening Chinese investments in India to re-engaging with Pakistan to reshaping its position on climate change, India is slowly turning its foreign policy ship around in the hope of finding more welcome harbours in a post-pandemic world.
Several of these measures are being taken with one eye on the new Joe Biden administration in the White House, but many are a response to the felt need that India must open up if it has to get its post-Covid economy back on track.
With the US struggling to gain control over the coronavirus and Europe continuing to stagnate, New Delhi realises the only country in the world with spare change is the one with whom it has been eyeball-to-eyeball for the last several months on the icy heights of Ladakh.
An India-China thaw
While the economy has been showing green shoots, the Narendra Modi government is keenly aware that it needs FDI to shore up the bottom line. Sanjeev Sanyal, principal economic adviser, told journalists last week that if someone wants to set up a button factory in India, it doesn’t matter if that somebody is an American, Indonesian or Chinese. “Except for strategically sensitive sectors,” he added, “we have sped up clearances from China and we plan to clear them quite fast.”
One of those sensitive sectors, a second official who spoke on condition of anonymity, is Chinese entry into India’s 5G network. The government is not going to restore Chinese apps like TikTok that were banned last year, in the near future.
So India is planning to soon clear 45 investment proposals worth millions of dollars, including from auto companies like Great Wall Motors and SAIC Motor Corp, which were put on hold when the large-scale Chinese intrusion across the Line of Actual Control came to light last May.
The announcement to reopen the doors to Chinese investment came soon after troop disengagement began in the Pangong Tso region of Ladakh in mid-February, giving rise to speculation that the gradual return to economic normalcy is part of the elongated step-by-step restoration of peace and tranquillity on the LAC.
Meaning, as China withdraws troops and armour and India does likewise, New Delhi is encouraging Beijing to undertake the next phase of withdrawal by partially opening up its economy.
This also means that India has given in to the Chinese demand that the border troubles be segregated from the rest of the India-China relationship – notwithstanding demurrals by External Affairs Minister S. Jaishankar to his Chinese counterpart Wang Yi last week that it cannot be business as usual.
Climate change push
There are two reasons for this shift in strategy. The first is that China is bouncing back from the coronavirus pandemic like no other country and is expected to overtake the US to become the world’s biggest economic power by 2028.
But the second is that the Biden administration is likely to cut its own deals with the Chinese on a variety of issues – from climate change to trade. Certainly, India doesn’t want to be caught napping by its most important foreign partner when it shifts gears.
Climate change is a key case in point. Biden’s special envoy on climate John Kerry has made it clear that the world must ramp up its efforts to mitigate the effects of climate change. In February, former UK minister and COP26 president Alok Sharma met PM Modi to discuss what India can do further.
Anticipating the shift, Chinese President Xi Jinping announced last September that China will hit peak emissions by 2030 and will be carbon neutral by 2060.
Speculation is now rife that when Modi travels to Glasgow for the 26th United Nations Climate Change Conference of the Parties (COP26), he will match China or go one up by announcing India’s further commitment to cut emissions and declare carbon neutrality by 2050.
A Pakistan hotline
Discussions on the matter are still ongoing, as officials worry about the West unwilling to pay up for the transition as promised, but Modi’s intention to rejoin the post-pandemic world as a key player is amply clear. Vaccine Maitri, the government’s diplomatic initiative to donate Covid-19 vaccines to the world, has been widely lauded, including by The New York Times.
As for Pakistan, the no-talks-until-cross-border-terrorism-ends policy has clearly outlived its utility. Modi had made a bid to solve the India-Pakistan issue in December 2015 when he went to Lahore to attend Nawaz Sharif’s grand-daughter’s wedding, but didn’t reckon the double talk of the Pakistani establishment, which undermined its own government by masterminding the Pathankot attack exactly one week later.
This time around, none other than Pakistan Army chief Gen. Qamar Javed Bajwa is leading the charge. The economy, notwithstanding its Chinese patron next door, is reeling. Pakistan is awash with terrorism and guns and even Bajwa realises that the country he controls is shrinking within.
As Mushahid Hussain, head of Pakistan Senate foreign affairs committee, said in an interview, “there’s no point having peace in Kabul without peace in Delhi”. The Americans, who need to exit from Afghanistan sooner than later, would have sooner than later indicated to Islamabad and Delhi to put their heads together. PM Modi has pre-empted them by doing just that.
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