India could become a ‘swing state’ in a tri-polar world

By Sourajit Aiyer

This article was originally published in Society for Policy Studies’ South Asia Monitor, India.

The United States was the sole superpower after the bipolar Cold-War ended with the Soviet Union’s demise. Then, China started flexing its geopolitical muscle using its manufacturing boom-led foreign exchange to woo developing nations. It is fast expanding its military presence in its neighbourhood.

Russia has become assertive again, and is expanding its influence in Eurasian and Middle East regions, backed by the might of its defence establishment. It is quite a coincidence that the superpowers are often the biggest producers and exporters of defence arms.

This troika may represent how the world’s polarity will shape in coming years. The US continues to be backed by key allies in Europe and Asia-Pacific, though its ties with a Sunni Muslim ally are frayed.

Russia is aligning with Shia Muslim nations, and reining together CIS nations as an Eurasian block. Its military adventures in Ukraine made the West, who placed economic sanctions to sort-of control its ambitions, sceptical.

China is a game-changer and making the US establishment most insecure. It has substantial economic partnerships with Asian and African nations, where it is building ambitious transport and energy infrastructure through engineering-cum-funding deals. This is also creating long-term consumer markets in those nations for China’s vast production output.

Its military excursions in regions like South China Sea and South Asia are causing concern amongst the incumbent powers, even as they maintain friendliness on the surface.

India’s approach

India’s Modi has rightly maintained a multi-aligned stance, and has made efforts to win partners in each group. In fact, the challenge is not how much India wants to be part of any one group. Rather, it seems to be how much they want India to be part of them, and the extent of reconciliation, co-operation (and arm-twisting) they do!

The US has been working to recognize India as a partner of equal status, despite being pro-Pakistan during the Cold War. This about-turn in the US approach to India is in contrast to how Nixon-Kissinger viewed India and shows the extent of reconciliation the US is willing to do to adapt to changing times, when its ties with Pakistan hit a low due to issues relating to Pakistan’s handling of terrorists.

The US is trying to step up its defence partnership with India, including arms exports and technology transfers, possibly as it is the only country in this region that can balance China. Given its size, India remains lucrative for US businesses, although off-shoring remains contentious. Partnering with a secular India is a good bet to combat a rise of radical Islamisation.

However, the US condemnation of India for testing a submarine missile shows a higher-hand attitude. India has to be watchful that this reconciliatory approach from the US does not cost it its own interests. Bringing India to its side can help the US break the harmony of a sizable economic bloc like the BRICS, which India cannot allow. Keeping a multi-nation approach can help India eke the best terms for partnerships.

Russia was dominant in India’s defence supplies, and its co-operation is extending to transfer of critical technologies. Even the US has hesitated on this with Korea, its close ally. The US is insisting on end-user agreements with India, but Russia is becoming agreeable to partner without such agreements.

With India keen on defence manufacturing, such technology transfers may augur well in the long term, but India needs to watch it does not compromise on the terms. Also, Russia’s exports are of latest technologies. Given the leeway it is willing to give, it can help India negotiate with other countries. Keeping a multi-nation approach can help India eke the best terms for procurements.

Modi has made efforts to create inroads with China. While India has opened doors to Chinese companies, China wants deeper access into the economy. It has been vying for the Bangladesh-China-India-Myanmar (BCIM) Corridor and extending Nepal railway link into India.

Given China’s links with Pakistan, India has been cautious not to compromise on national security in any manner. But given the slowness from India’s side, there seems to be some arm-twisting, possibly with the objective to make India agree.

Both nations know China’s influence over Pakistan is the best bet to control militancy from Pakistani soil to India, given Pakistan is disproportionately dependent on China today. This seems a pawn China is indirectly playing. While several countries and the UN branded Pakistan-based elements as terrorists, China seems to be selective. China blocked India’s appeals against Maulana Azhar and Zaki-ur-Rehman Lakhvi, citing UN provisions.

These tactics seem to suggest that if India comes on China’s side, China may use its influence over Pakistan to rein in such elements. It is also opposing India’s entry to the UN Security Council and the Nuclear Suppliers Group, despite the world agreeing.

China’s expanding assertiveness across Asia raises questions, since India forms a critical component of the continent. India fears if it agrees to China, it may compromise its internal setup to security threats from Pakistan, or a lifetime of paying Chinese debt, or a free-flow of cheap Chinese imports that can cannibalize India’s own production. Keeping a multi-nation approach can ensure India does not pay a price by disproportionately engaging with only one group.

In conclusion, this multi-aligned approach may show India as a “swing state”. But in a world seeing such polarity, India needs to create adequate supplies at best-prices for the investments, technologies and critical imports it needs.

— Sourajit Aiyer works with a leading capital markets company in Mumbai.