The growth of our domestic economy & foreign entanglements


  • In the 19th century, Germany was a rising State, embedded in the heart of Europe. In 1888, the new German Emperor Wilhelm III rejected Chancellor Otto von Bismarck’s ‘peaceful foreign policy’, seeking to work towards a war of aggression and focusing on the creation of a Germany navy that would rival that of the British. He sought a colonial role for Germany, staking its own claim to natural resources and intervening across geopolitical fault lines in Morocco and Iran.

  • The US took a different path. Insulated by two oceans, and blessed with two pliant neighbours, the US had the luxury to focus primarily on its economy in its vast resource rich hinterland. For the most part, US foreign policy sought to avoid ‘entanglements’, while maintaining its freedom of action, all encouraged by a streak of isolationism that has reemerged in the modern day.

India’s Stand/Problems:

  • Decades ago, when India made a tryst with destiny, we also sought to carve our own space in the world, seeking non-alignment, which preserved India’s freedom of action, by refusing to align with any bloc or alliance. India’s propagation of the concept helped establish a significant role in multilateral organisations and influence with developing nations.

  • Pursuing such neutrality did not limit the assistance it received from either bloc during the Cold War. India cooperated with the West on nuclear power and with the Soviet Union on dams. And yet, it maintained its strategic autonomy from either.

  • India was able to befriend geopolitical rivals like Iran and Israel, while maintaining relationships with would-be theocratic states (Saudi Arabia), revolutionary (Cuba) and independence movements (Palestine).

Problems for India:

  • India faces a deteriorating Asian security scenario, with China expanding both in Central Asia and the Indian Ocean. The rapid expansion of the ‘One Belt, One Road’ initiative will ensure an East more tightly linked to China’s economy, while South Asia increasingly develops a taste for Chinese financing.

  • Military innovations are increasingly diffused and a mobilised citizenry increasingly able to rock the diplomatic table.

  • The manufacturing-based growth model that worked for China and Southeast Asia may not work for India, as the West seeks to rebuild its own manufacturing sector. 

  • As globalisation is increasingly viewed as a zero-sum game, India’s industrial policy measures may have limited efficacy. Our key strategic interest remains in maintaining an open economic order — pursuing this requires establishing a range of bilateral free trade agreements (FTAs) with friendly and neutral powers.

What needs to be done:

  • This day and age calls for a new kind of foreign policy. 

  • Crafting a foreign policy approach for this age calls for a realistic assessment of our situation.

  • We need space and peace to revamp our developmental model. The growth of our domestic economy needs to be pursued over foreign entanglements.

  • Pursuing this will require a nonaligned foreign policy that offers maximum options with leading powers, allowing us to trade market access and strategic positioning for technology transfer, financing and diplomatic goodwill. Pursuing this policy will require us to adapt to strange and new circumstances: holding naval exercise in the Bay of Bengal with the US and Japan, and holding counter terrorism drills with members of the Shanghai Cooperation Organisation (SCO), including Russia and China.

  • India should continue to befriend the US, utilising its good offices to open up the doors of high-technology control regimes (the Wassenaar Agreement, the Nuclear Suppliers Group), all the while pushing back against policy measures to restrict market access for Indian IT and pharmaceutical firms.

  • India should pursue its permanent interests, building alliances with all.

Source:Economic Times

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