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Analysis of India's Potential in the New World Order

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Dramatic changes at the global level have initiated a process of reorientation of the power distribution and emergence of new powers in international politics. The changes initiated with the disintegration of the Union of Soviet Socialist Republic (USSR ), the unification of Europe in pursuit of an identity of its own ,a sharp decline of communism has set in a process of transition in world affairs, the sudden and consistent rise of asian countries mainly China, India & ASEAN Bloc, emergence of resurgent Russia and establishment of new economic power blocs like the G20, BRIC & RIC. The emergence of USA as the sole super power and its global war on terror have changed the security scenario for all and sundry. The existing obscurity has given rise to new opportunities, new speculations and new considerations regarding power distribution. A gradual shift from a geo-political world order to a geo-economical world order has come to stay. There is no doubt that any future order would have the considerations such as comprehensive national power to incl 'Economy' and the power it wields albeit indirectly, at the centre of any international power game.

Global shifts happen rarely and are even less often peaceful. The transfer of power from west to east will dramatically change the context of dealing with international challenges. In the early 20th century the imperial order and the aspiring states of Germany and Japan failed to adjust to each other. That led to wars which devastated the better part of the world. The coming shift in power will have a greater impact globally and will require assimilation of diverse political and cultural systems. Today's rising powers seek redress of past grievances, are proudly nationalistic and want to claim their rightful place in the comity of nations. Asian rise in economic terms will translate into greater political and military power, thus increasing the potential damage from conflicts. Former British Prime Minister Tony Blair has noted that- "In the next two decades China and India will undergo industrialisation four times the size of the United States and at five times the speed...For the first time in many centuries, power is moving East." Blair added that "In this new world, we must clear a path to partnership, not stand off against each other competing for power. The world...cannot afford a return to the 20th century struggles for hegemony."[1]

India being a part of this evolutionary and revolutionary strategic & economic process needs to apprise herself of these changes and redefine: if required, her goals and objectives to emerge as a ' reckonable force ' from the present mesh of contradictions and complexities. The term reckonable force can be redefined as a ' regional power ' when one views India's prospects vis-à-vis her size, geo-strategic location, abundant natural resources, size of economy and military capability. The Indian nation is not just a nation, but a subcontinent. Being a subcontinent not only in size, but by its population which is in excess of One Billion, sets it apart in a World with a total population of a little above Five Billion means that in every Five Human being on Earth one is an Indian. It is on record that the Indian Armed Forces is the Fourth Largest in the World. India has since the past Twenty Eight years been exerting her influence in the South Asian sub-region. Thus India has functioned for over half her period of independence as a regional power in the literal sense. It is instructive that given the New World Order in which the US is about the only Super power, it is pertinent that in order to maintain the Balance of Power, that Nations like Brazil and India with a long period of History devoid of expansionist propensity, should emerge as a Super power to enhance the balance of power in the South Asian sub-region, and the World in general.

The Indo-Pak conflict of 1971 leading to the emergence of Bangladesh, peace keeping operations in Sri Lanka, quick repression of an attempted coup in Maldives, deployment of Indian navy in Gulf of Aden and the enhanced engaegemnt and involvement of India in various international forums both on strategic & geopolitical stage provide ample evidence that India possesses many of the attributes of a regional power. The emergence as a knowledge based economy and as a Human resource powerhouse, make India a force to reckon with today and strong & vibrant economy in future. In the recent past, India enhanced role in plethora of world fora and the Indo-US Nuclear deal and subsequent ratification by Nuclear Suppliers Group & IAEA. However, in some areas like all round economic development, poverty, population explosion, literacy rates and foreign policy to some extent, India is lacking at the moment. For India to emerge as a regional power, these unfavourable areas need critical attention and reappraisal. "The Indian economy is growing at an average rate of 8 per cent a year. Most Indian and foreign observers are confident that India will sustain this tempo of growth in the near future, and will go on to become one of the world's leading economies and a global political power in 2020. A few voices draw attention to the tremendous economic, political and social challenges facing India that the country must overcome before it can lay claim to being a world power" [2].

"Indians have always known that their nation has the potential to be significant power in a way in which citizens of nations with smaller populations do not. Nehru himself , for all that he emphasized the benign nature of Indian power, was clear in his mind that India, with its vast population, 'will always make a difference in the world... Fate' , he said, 'has marked for us big things'."[3]

"Thus we need always be mindful of the developments that are occurring behind the veil of regional instability that is drawn across India's rise to power. If that veil were ever to be drawn back, the world might witness the quite sudden advent of India onto the wider Indian Ocean stage as a significant pan regional player. That is not to say that India will quickly overcome the organizational and internal political difficulties alluded to above ; it is to make the point, rather, that as far as India's Indian Ocean region is concerned, its power potential is very high when viewed in comparative terms. In this sense, it would be quite wrong to set India against the powers of the northern Pacific and to judge its power potential according to those standards."[4]

Statement of the Argument

A country's role in the international system is not a random occurrence or a result of an accident; but is basically a function of its power position in the international hierarchy. To have a 'Subject Role' in international politics is to be a part of the power structure and the inner circle that makes vital decisions about the fate and destiny of the international system and the nations within it. The 'Object Role' nations are at the receiving end of the decisions made by the subject role nations. A third in-between category is that of an independent centre of power. These nations do not have the leverage to influence the course of the international system as a whole, but do possess enough capability to have, within a given configuration of power, a considerable degree of autonomy and the capability to resist the application of unwelcome and forced decisions. While subject nations have global influence, independent centres of power are often dominant or pre-eminent in a certain region. They may, therefore may also be referred to as 'Regional Powers '. Typically a subject nation resists the emergence of a regional power; for to accommodate others to a similar role is to diminish one's own power. The tendency is to extend one's own power and exercise domination over others so as to reduce the emerging regional powers to the status of a mere object nation.[5]

India gained pre-eminence in South Asia in the aftermath of the Indo-Pak war of 1971 but more recently with the steady economic growth, growing international stature and active interaction and involvement in various world forums have made it an independent power centre (regional power) in South Asia. With the recent changes in the world politics and diffusion of power, countries with regional prominence have come to possess a great capacity for asserting themselves. In this context, India has the capability and the potential to be elevated to the status of a regional power. An analysis of various factors in the light of international power structure would facilitate the prognosis of the status India is likely to achieve by 2020 AD i.e. Regional Power.


To assess India's potential in the new world order so as to forecast the prospects of India emerging as a regional power in South Asia by 2020 AD.

Justification for the Study

'Ever since gaining independence in 1947, India has moved slowly but steadily towards its role as a regional power. Historically, India has been the seat of famous ancient civilisations. It invokes memories of past greatness, though episodic; and of epochs of creativity, not only in Philosophy and Literature but also in Science and Mathematics. The fact that the last several centuries saw India under alien rule only makes aspirations in the restoration of greatness all the more deeply felt'[6]. Today, with the rapid economic growth and military stature, India's influence in South Asia in particular and the world in general, is beginning to emerge and being felt by all and sundry A study of various factors that would aid India's emergence, as well as various impediments that retard this process merit analysis. India is a fast & steadily developing country and today stands among the top few industrial nations in the world and has a rapidly growing industrial & service sector. Although poverty, illiteracy and health deficiencies are some of the vexing problems, yet only few nations have larger pools of trained professionals, scientific, technological and executive talents than that in India.

India, as a nation is about over half a century old not considering her ancient and erstwhile status as one of the oldest civilisations. In this period of her independence, she has exhibited character and pedigree. She was instrumental to the creation of the Non Aligned Movement in the cold war era immediately after independence and show her aspiration of emerging as an independent power centre in world polity. She has on the issue of Nuclear Non proliferation taken a consistent stance even though this posture has met with the ire of the developed world has not deterred her. This attitude was demonstrated by her refusal to sign the CTBT and also the NPT. It is on record that it took her more than a quarter of a century to carry out a follow up nuclear test. This could be placed at the doorstep of the fact that her good neighbours China and Pakistan have continued to arm themselves with these offensive weapons. India in her nuclear policy states that she would abide with the principles of no-first strike, nuclear deterrence as the cornerstone of that policy. And to continue to advocate for a ban on nuclear weapons like the type achieved on Chemical and Biological warfare weapons and the ban on use of land mines. These stated positions have recently been understood and appreciated by the entire world polity and the Indo-US Nuclear deal and its subsequent ratification at Nuclear Supplier Group (NSG) & International Atomic Energy Asssociation (IAEA) have largely vindicated Indian stance on these issues. The engagement and involvement of India in G8, BRIC, RIC, ASEAN, IBSA in the geopolitical arena. The positions on WTO & Climate change are also a case in point for growing stature of India on world stage.

The Information Technology (IT) propels the world of technology in the present scenario. In this field, India has demonstrated outstanding abilities and progressed leaps and bounds in various facets, be it hardware or technology or software development. In the Silicon Valley of American, it is reported that 60,000 Indians operating there could collectively boast of assets worth more five hundred billion dollars. This is no mean achievement and the corresponding effect on India is the collateral development of the Asian Silicon Valley in Bangalore, Karnataka. In the field of IT, the Indian nation has arrived on the regional and the world stage. For this simple reason, her Engineers, Scientists, Doctors and Technologists are being sought across the globe. This is not to talk of the influence of Indian business houses and management gurus, in the entire world more so in the developing world, where they command an imposing stature in the fields of Textile technology and Pharmaceuticals. India's stature as an IT & Knowledge base powerhouse is a major factor in its rise at the world stage. India is a single democratic political entity, though slightly marred by mass/ public development issues and religious & regional strife's varying from state to state. In view of the existing fluidity in the Asian region following the global paradigm, shift in the power distribution and the present status of India, an attempt to foresee India's evolution as a regional power in South Asia by 2020 would be relevant.


The scope of this paper would be limited to analysing various factors governing the emergence of India as a regional power in South Asia by 2020 AD. India's performance as an independent state would be given a brief overview along with her present status in the region.


To analyse the future, it is essential to critically evaluate India's power potential as well as the impediments en-route. India has inherited a volatile, ethnic, religious and social mix that generates strong cross-currents of tension between the states of the region and added to this are the domestic under-currents of religious fundamentalism, communal tensions, demand for autonomous/ independent states and inherent problems of a multi-lingual and multi-racial society.

India's quest for the regional power status in this turbulent environment is underwritten by an increasingly open and vibrant economy and a 'Military - Industrial' complex that stretches deep into the bureaucratic structure of the nation. However, India's attention has been primarily focused more on the problems associated with nation building and its immediate neighbourhood and, than on the Indian Ocean region, let alone the world. It is ironic that while on one hand, it is the problems of the neighbourhood that have largely driven India's military build up, on the other hand it is these very problems that continue to limit its strategic reach. It is this combination of a drive for a great power status and intensifying regional and national problems that pose a number of questions about India's future. This paper endeavours to understand and answer some of these questions.

Source of the Data

The source of the data are the various books in the college library, various magazines and articles written by various people from time to time. Internet was extensively used for collection of data, various study reports and articles. Bibliography is attached at Appx A.


The colonial powers that ruled India for centuries apparently visualised her potential and attempted to undermine it through a process of gradual disintegration. Formation of Pakistan is one vivid example of such designs. After independence, the citizens of India have displayed remarkable resilience to destructive forces. Despite impediments like poverty, corruption, ailing bureaucracy and population explosion, India has made significant progress in various fields to incl Education, Manufacturing, Knowledge based industry, IT, Space Technology, Pharmaceutical Industry. Today, India ranks among fastest growing economies of the world and IT & Knowledge based industry powerhouse.

In the past sixty years after independence, India has acquired great maturity and realism in the management of its strategic environment albeit with considerable pain and sacrifice. India's posture has been based on a realistic assessment of its capabilities. It projects a defensive, progress oriented stance rather than an expansionist or a hegemonistic stance. India has continued to follow and propagate the ideology of non-alignment and is now on the threshold of coming out of its shell to play an important role at the world stage as a Global player if not as atleast as a major regional player. The case in point of the growing stature and understanding of the Indian nation has been- 'The nuclear agreement, which followed three weeks later, calling for the separation of India's nuclear facilities into civilian and military, and bringing India's civilian facilities under international safeguards in exchange for nuclear energy cooperation, demonstrated the growing strategic convergence between the US & India. Domestic political considerations have come in the way of the Indian government operationalising the nuclear deal. That notwithstanding, the deal was widely welcomed in India because it opened the doors for India to participate in civilian nuclear commerce with members of the NSG while allowing it to retain its nuclear weapons programme despite being outside the NPT.' [7]


Contemporarily, India enjoys a leading status in South Asia. Militarily, she has displayed her potential either in a direct conflict, coercion or allaying any belligerence by its potential adversaries. Birth of Bangladesh, intervention in Sri Lanka & Maldives, Indian Naval involvement in Gulf of Aden are a few indicators that India has acquired a great measure of the regional hegemony.

'Power status takes into account an ideological or political role and above all the economic health of a nation. Regional hegemony or dominance implies the existence of local military pre-ponderance and the availability of non-military instruments of pressure, including economic coercion. Studies of strategic power in the world politics commonly assign to India the status of a middle power of some regional significance, but little more'[8]. 'A nation state such as India, by virtue of its size, resources and geographical location, finds herself a power in regional terms whether or not it seeks the label and despite the fact that all its capabilities for regional dominance are not yet fully exploited. India's current pre-eminence over its neighbours, however, is so substantial that its position has been recognised by the entire world, and implicitly so by all South Asian states as well.'[9]

'Recent years have witnessed a steady growth in India's power, based upon a strong economic performance. According to the World Bank, 'India's per capita income is now higher than China's and some reports put its rate of economic growth above China's in real terms. This increase in the underlying growth of the economy is what has underwritten India's substantial growth in conventional military power. By virtue of its military growth, India has acquired , by default, a ' Maximalist ' position that would enable it to have a strategic reach throughout the Indian Ocean. Furthermore, with the prospect of a declining role for the superpowers in the region, India's growth in military capability is likely to leave it stronger in relative as well as absolute terms. The erstwhile Soviet Union is no longer a major factor in the Indian Ocean and the ' peace dividend ' in the world politics may eventually lead to a reduced presence on the part of the United States.' [10]

'While India's emerging role is well acknowledged in the world, there are clear limitations both upon the current extent of India's power and upon the rate at which that power will accrue. With India, it has been very much the question of " WATCH THIS SPACE " .'[11]


Geo-Strategic Location.

India shares its borders with China, Pakistan, Bangladesh, Myanmar, Nepal and Bhutan. It has close proximity to Sri Lanka and the Maldives. Therefore, in South Asia, it has to directly interact with many neighbours. Strategically, India lies astride the Indian ocean, flanking the Persian Gulf and the Straits of Malacca. It lies across the routes from West Asia to South-East and East Asia and dominates the world trade routes. Therefore, the dominating position of India and its island territories would enable it to control the sea lines of communication between the Atlantic and the Pacific Oceans and consequently the world trade.

Natural Resources.

'India has abundant natural resources. Its soil varies greatly from region to region. It is alluvial in the northern plains, sandy in the western desert, black in the Deccan Plateau and coarse in the hilly terrain. Each type is suitable for a particular group of crops. There are areas where trees grow on their own. They form the source of timber, pulp, resin, lac, gum and cane. India's hydro-electric and coal reserves are massive. Oil exploration is limited but off shore potentials suggest a great amount of self reliance. India's Thorium reserves are large. It's known reserves of Iron ore, which represent 10% of the world's total and those of a wide range of other minerals suggest that India has the potential for a relatively independent economy.'[12]

Human Resources.

Human resources are of paramount importance in any economy. A human being comes not only with a mouth and a belly for consumption, but also with two hands to work. The adverse effects of unchecked population growth cannot be ignored; however, given the right direction and awakening, the population can be utilised constructively. A large young population helps to boost demand by providing an extensive and growing market for industrial products. It can lower wages, increase profits and output, encourage industrial development and open employment avenues. This is borne out by the fact that numerous MNC's are investing huge sums of money to tap the cheap Indian labour and the immense ready market.

Economic Base.

Till recently, multiple restrictions on private business co-operation and the goal of achieving economic self reliance had shackled the Indian economy by hindering unprejudiced co-operation from industrial nations. With the adoption of a liberalised economic policy, an extensive economic relation is now growing. The new economic policy lays greater emphasis on private enterprise and intensified competition for dynamic industrial progress and mordenisation. Prospects for a substantial upswing of economic growth seem to be favourable now.

India has huge reserves of important raw material and a large domestic market. It also has a large group of entrepenures and managers experienced in organising and managing industrial enterprises under difficult circumstances. Given the improved setting for entrepreneurial activities, the large number of scientists and engineers, some of them highly qualified professionals, trained overseas or with practical foreign experience, could be of immense benefit to the country[13].

The expectations of economic development are based on an economic policy that is yet in its infancy. For long term stability the creation of a congenial atmosphere for foreign investment is necessary. Our focus would have to shift from development of industrial sector to the improvement of institutional framework for long term development. Greater efforts to improve social security are needed to cushion the effects of intensified industrial competition and to open up new possibilities for the impoverished classes to take a share in the economic development.

Science and Technology.

India began to develop its capabilities in science and technology soon after independence. However, the overall programme while impressive compared to that of other poor countries is inadequate and poorly organised in relation to the country's potential and requirements[14]. Of the total research and development in the country, only 25% is used to promote innovation in industry and agriculture, while the major chunk contributes to development in areas like atomic energy, space programme and defence equipment.

The latest thrust to uplift the economy has renewed the vigour in the sphere of science and technology also. The private sector has shown great promise to measure upto the national requirements and a healthy competition with other nations can be seen specially in areas like computer software and electronics. Numerous institutions are doing some original and promising research in various fields.

Political System

India's political system was initially dominated by the small urban elite comprising leaders of the nationalist movement and an elitist civil service. At the state level, elected representatives wielded impressive influence in directing benefits to their constituencies and acting as channels of complaint and pressure within the bureaucracy. The system moved rapidly to broaden its base of support by bringing the bulk of peasantry into the system and also by including small business and trading interests. The evolution of such a system from the authoritarian colonial rule was accompanied by tension and uneven progress.

India had managed to operate a complex ; constitutional, federal, parliamentary and party dominated political system with remarkable effectiveness. India's manifold diversity and communal problems often raise the spectre of disintegration; these are common to a nation - state building process that the developed countries experienced a century ago. In the Indian democratic set-up, its people have displayed a great amount of maturity in preserving their rights. Any display of authoritarianism by a democratically elected government has met with stiff opposition. A vivid example is the imposition of emergency in 1975 by Mrs Gandhi and her subsequent electoral defeat in 1977. The emergency and the general elections of 1977 were a test of democracy, equivalent in significance to a social revolution[15].

A seemingly large section of illiterate electorate is well aware of it's might and is critical of the people who represent them in higher offices. India has managed to solve or at least contain major disputes on language policy and regional autonomy. At the same time religious, caste based and even communist organisations have been brought in and operate in a largely peaceful democratic institution. India's political leaders have shown a firm resolution in making of both foreign and defence policies. The military also operates under political direction. Inherent stability is provided to the system by the presence of well established institutions like judiciary, banking and stock exchange.

Future political crisis no doubt loom large, but this can only be expected considering the country's social and economic metamorphosis. The durability and resilience of the Indian democratic system indicates that not only would it continue in the coming years but would also gain more strength and experience.

Military Capability.

Since their debacle in the 1962 Sino- Indian conflict, the Indian Armed Forces have come a long way. Today India possesses adequate defence capability to look after her interests. India is able to produce diverse military items such as small arms, field and anti-aircraft recoilless guns, howitzers, support electronic items, anti-tank, anti-aircraft and naval missiles, armoured vehicles, supersonic aircraft, helicopters, anti-submarine frigates, fast patrol boats and missile boats[16]. It has also demonstrated Intermediate Range Ballistic Missile (IRBM) technology. In space science, India is amongst the world leaders. All this has been achieved at a moderate expenditure of 3% of GNP per annum.

Nuclear Potential.

Having successfully exploded its first nuclear device on 18 May 1974; India has continued to maintain a stance of using nuclear energy for peaceful purposes alone. However, the potential of India to develop a nuclear bomb cannot be denied. India's nuclear structure is quite diversified. Beginning with the construction of Asia's (outside erstwhile USSR ) first nuclear reactor in 1956, India has acquired the following major facilities[17]:-

Half a dozen nuclear research reactors, all but one built without foreign assistance or participation.

The ability to design and construct from equipment manufactured indigenously one 500 MW nuclear power station every second year.

The competence to fabricate all sensitive nuclear instruments, fuelling assemblies, special alloys and materials, fissile plutonium and thorium from its own processes and plants.

  • Asia's first indigenously constructed variable energy cyclotron.

Numerous other nuclear activities and support facilities, isotope production, mines, medicines, seismic arrays, fissile U-223, extraction processes, fusion, uranium enrichment research and so on.

Openness and Resilience.

Except for the brief period of emergency, India has had an open society with an active press and an intellectual community. Indian political and economic affairs are subject to constant criticism. Critics find information on India more readily available than for China, Pakistan and several developing countries. In addition, there is a constant flow of constructive criticism from internal sources. Viewed and used correctly, this criticism provides important inputs for betterment. Indian resilience is a widely recognised phenomenon. Many hostile designs to covertly disintegrate India became ineffective owing to the conciliatory approach of the polity. Factional and religio - ethnic conflicts can only be expected in a country comprising of people with widely diversified religious faith. The phenomenon of sporadic flare ups is likely to continue in the coming decades too. At the same time, India would be able to absorb such irritants and continue its march forward into the 21st century.


South Asian Strategic Environment.

"The gridlock imposed by the Cold War over South Asian relationships meant that an unprecedented number of lethal weapons were introduced into the region in the 1970s and 1980s. The Cold War also contributed directly to the introduction opf technology associated with nuclear weapons and the means to deliver them.the most obvious example was the case of Pakistan. Because United States needed Pakistan as a front line state in its efforts to dislodge the Soviet Union from Afghanistan, Washington turned a blind-eye to Pakistan's nuclear activities and continued to supply it with sophisticated conventional weapons throughout the 1980s. Similarly, the close relationship that developed between China and Pakistan under the structure of the Cold War assisted the transfer of ballistic missiles, ballistic missile technology and possibly also nuclear weapons technology between the two."[18]

The strategic environment in South Asia has been remarkably conflict laden; characterised by wars or hostile relations between neighbours, especially between India and her neighbours. Despite this history of war, nations do engage each other in peaceful competition as well as in a large amount of outright co-operation. " The changes in the Indian foreign and security policy since the end of the Cold War have been rapid and radical. They have taken place as a reaction to the perceived rather far reaching changes in the global and regional security environments. The growing problem with terrorism, in terms of domestic, Kashmiri and international terrorism, manifested itself in attacks in major Indian cities, the hijacking of an Indian Airlines flight and the attack against the Indian parliament. Moreover, the exponentially growing power of China, its strategic assistance to Pakistan and the sudden disappearance of the Soviet backing to balance China's growing global and regional power resulted in a feeling of encirclement and relative isolation. India felt it had to become a 'normal' nation by placing considerations of national security above its traditional focus on liberal internationalism and the nonalignment/ third world cause. India's regional policy has been in clear contrast to its global preference of multilateralism and rejection of the ideas of balance of power and exclusive spheres of influence. In the region, India has preferred to handle unresolved issues with neighbours bilaterally and uphold regional security on the premise of its own hegemony and by keeping great powers out of the region. In terms of European security interests in South Asia, the opportunities for EU security policy are limited to soft measures aimed at promoting peace and stability in the region, and in Kashmir in particular. Hence, in order to promote a lasting peace in the region, the EU should utilize preventive diplomacy aimed at promoting a peaceful solution in Kashmir through all available venues and prepare to provide technical and financial assistance if a peace agreement is reached. Whilst the EU should actively promote the peaceful resolution of Kashmir, its own experiences show that economic interdependence can have significant positive effects in creating facilitating conditions for peace and stability. Hence, EU policies towards India and Pakistan, as well as South Asia in general, should be aimed at advocating and supporting increasing regional economic interdependence and cooperation. The EU should also nurture and further develop its strategic partnership with India, but without neglecting Pakistan."[19]

"Those enable regional powers to influence their neighbors and to protect themselves from disagreeable outside interference (Waltz 1979: 191/192). In contrast to this, liberal institutional approaches have emphasized soft power aspects with cultural attraction, ideology, and international institutions as the main resources (Nye 1990: 167). Neo-realism and liberal-institutionalism have different understandings of the concept of power. Neo-realism emphasises the capacity of states to influence others to behave as it wants them to behave whereas the cooptive power of liberal-institutionalism aims at "getting others to want what you want" (ibid.).Concepts of hard and soft power can be regarded as two poles on a continuum of power. They also imply different ideas, interactions and institutions for foreign policy when looking at the fields of politics, security, and economy. Ideally hard power strategies focus on military intervention, coercive diplomacy, and economic sanctions in order to enforce national interests resulting in confrontational policies vis-à-vis neighbouring countries. In contrast to this soft power strategies emphasise common political values, peaceful means for conflict management, and economic co-operation in order to achieve common solutions"[20].

"With the liberalisation in India after 1991 economic co-operation got a new momentum within SAARC. Since that time all South Asian countries followed a policy of economic reforms, export promotion, and integration into the world market. In 1991 a commission was established to look into the prospects of regional economic collaboration. The results formed the basis for the SAARC Preferential Trading Arrangement (SAPTA) that was ratified in 1995 by all countries despite the ongoing tensions between India and Pakistan over Kashmir at that time. Of course, the introduction of SAPTA could not overcome the structural constraints of the regional economies, like the lack of complementarity, so that intra-regional trade remained only two to three percent. A further improvement of intra-regional trade can be expected from the SAARC Free Trade Arrangement (SAFTA) that was signed in January 2004 in Islamabad. It aims at the creation of a free trade area in South Asia from the beginning of 2006. In order to support the economic transformation of less developed economies Bhutan, Bangladesh, and Nepal will receive longer periods for the implementation of SAFTA. The efforts in promoting economic co-operation in SAARC since the 1990s underlined again India's new regional approach. It seems obvious that the idea of the Gujral doctrine was in the background and the maxim of liberal-institutional arguments that economic co-operation produce absolute gains for all players. The free trade agreement with Sri Lanka of 1998 and the negotiations for similar agreements with Nepal and Bangladesh point in the same direction. The new Indian activities underline the change of India's South Asia policy and her shift from hard power to soft power strategies."[21]

"A reassessment of changed of the changed geopolitical and geostrategic realities of South Asia, has to be undertaken by India. If it wishes to enlarge its option in the global & regional pulls and pushes it has to tread a course which enables it to safeguard its national interests without treading on controversy."[22] India relations with its neighbours will be the most important factor in emergence of India as a regional power in the near future.

India and Pakistan.

"India and Pakistan form the basic axis and centre of conflict in South Asia. Before the British empire, much of India was dominated by regional Islamic imperial systems. This rule was accompanied by conversion from Hinduism and other religions to Islam. This legacy of former Islamic dominance is recalled with mixed emotions both by Hindus and Muslims alike. Pakistan was formed as a home for the Muslims of South Asia, yet many live in secular India. Conversely a large number of Hindus remained in East Bengal ( now Bangla Desh ) after partition. In a sense, the minority communities in Pakistan and India were hostages to each other"[23]. "Indeed, one of the most important aspect of Pakistan's 'grand strategy' has been to use outside assistance in such a way as to make it quite impossible for India to impose its will in any matter whatsoever." [24]

The mutual animosity between Pakistan and India on religious, ethnic, cultural, security, diplomatic and political issues has led to mutual strategic opposition since independence that has also resulted in three wars. The on going proxy war and support of jehadi groups is again result of above facts/reasons. The present state of Pakistan is in itself a major cause of concern & challenge to India. " A short look at Indo-Pakistan relations between 1998 and 2004 that oscillated between rapprochement and war and at India's South Asia policy during the 1990s raises a couple of questions against neo-realist interpretations of India's regional hegemonic ambitions. Could India be regarded as a regional power after the nuclear tests of Pakistan in May 1998 which compensated India's conventional military superiority? Could India use its resources to influence developments in the neighbouring countries according to her own political aims?"[25]

" The Indian policy should therefore aim at complete isolation of Pakistan. The relations with Pakistan should be based on strict reciprocity. The accord in respect of inviolability of nuclear installations in the two countries should be terminated, and in matters of trade and travel there should be insistence on absolute reciprocity. The border on Punjab side should be sealed and militant camps in occupied Kashmir bombarded. The infiltration alongside the border specially in the Kutch should be stopped forcibly.

"India's South Asia policy since the 1990s shows a shift from a hard power strategy of military and diplomatic interventions to a soft power approach that emphasises inter-governmental co-operation, negotiated settlements and economic collaboration. The changes can also be seen as attempt to change India's image from a regional bully to a benign hegemon. The new political imperatives may be a first step. The far bigger challenge ahead is that the negative images and perceptions in the neighbouring countries where 'India' is still a disputed issue will also have to undergo a fundamental transformation. It remains to be seen in how far India's 'positive unilateralism'8 will create a better regional framework or in how far the growing outside interference will bring about a shift towards multilateralism in India's regional policy."[26]

"It should be the task of Indian diplomacy to persuade the western powers to use their good offices with Pakistan in agreeing to a settlement along line of actual control. This would remove one threat to India's security. It would mean loss of occupied Kashmir but this would be no more than formal recognition of existing reality. This is the only practicable, feasible, agreeable solution of the Kashmir problem and it should be pressed forward. "[27]

Strategic Perspective. The partition of Pakistan from India was carried out largely along communal and religious lines, with little regard to the future defence of the states. Pakistan is geographically elongated in the North-South direction and lacks depth. Its major cities and key lines of communication are within easy reach of the Indian border thus making it vulnerable to military threat. Mutual distrust and animosity have often checkmated any attempts made at negotiations to iron out differences and have led to an arms race in which India has developed a definite edge in terms of military capability. This has resulted in Pakistan raising the hoax of " Big Brother Syndrome " and potential dominance by an expansionist India. In 1987, both countries came to the brink of war but diplomatic dialogue was able to diffuse the tension at a point when war looked inevitable.

Kashmir Issue. The Kashmir issue is one of the major irritants in Indo-Pak relations. Pakistan has resorted to subversive and terrorist activities in Kashmir and has involved India in a Low Intensity Conflict. The sole aim for Pakistan seems to be that of keeping India involved militarily in Kashmir without declaring an all out war.

Neither side is really prepared for a prolonged conflict, nor is any side likely to attack heavily populated areas or cities. What emerges then is an inconclusive stalemate between two states with deep historical antagonism and yet with much to gain from co-operation[28] . The proxy war being fuelled in Kashmir and the so called moral sp which is otherwise a full-fledged patronage remain an ever present source of confrontation and contention. "India as a regional power in South Asia also has a vested strategic stake in Pakistan's political stability and therefore the restoration of democracy in Pakistan is a strategic imperative for India. India's foreign policy should start reflecting this vital requirement in declaratory terms. India as a regional power cannot be seen to be getting away with escapist statements that the unrest in Pakistan is an internal affair of Pakistan and that India would deal with any Government that is in power in Islamabad"[29].

"The issue of Kashmir is greatly complicated by the way it is caught up in the domestic politics of both sides. In Pakistan, the religious parties have for a number of years exercised balance of power. The elites who govern Pakistan would have great difficulty if it were perceived by hte general populace that they were unable to protect Islamic credentials of the nation, which is the very basis on which Pakistan claims its existence. Similarly in the case of India, loss of Kashmir would gravely damage the prospects of survival of any government, given the fraught and narrowly fought elections upon which Indian democracy depends. It is these internal difiiculties that make the Kashmir dispute such an intractable one, and that in turn make a lasting rapprochement between India and Pakistan so difficult to achieve.'[30]

In terms of its relations with Pakistan, the minimum test of India's emergence as a great power would seem to be constituted by the following :-

  • To maintain its military superiority and domination over Pakistan, and simultaneously develop and enhance the Indian technology and resource base.
  • Diplomatically engage external powers to deter or prevent from building up Pakistan's military machine to a point where it could attack India with confidence.
  • To engage Pakistan and put the genuine fears and concerns to rest , thus reducing Pakistan's motivation and reasons for opposing India.

ndia has to use its diplomatic acumen with it (Pakistan) to ensure that Loc is accepted as an international border. India has to project its Kashmir policy as a national policy and not that of BJP or Congress, when it is power. A national consensus is a must. [31]

India and China

The Peoples Republic of China represents a direct threat to Indian dominance of South Asia by virtue of its position in the Himalayas, its growing potential, and also an indirect threat by its support to regional states, especially Pakistan. There has been a tacit alliance between Pakistan and China directed against India since 1960s. China's interests in the South Asian sub continent are no longer limited and conflicting with Indian interest. With the disintegration of the erstwhile USSR, China does not have to deal with a super power in its close proximity any more. It seeks to protect its own flank in Tibet from Southern probes. India is a channel through which Chinese territorial integrity can be harmed via a threat to its lines of communication through Tibet to Sinkiang by support of a Tibetan Liberation Movement.

The Economies - Impacts of Competition and Integration

"Coming almost ten years ahead of India, China's early initiation of economic reform has given it a signifi cant economic advantage allowing it to ride the crest of the wave and gain from the benefi ts this has delivered in terms of alleviating poverty and investing in the infrastructure necessary to sustain future growth. In turn, India has been playing a game of catch-up. That said, it remains the second largest growing economy in the world and there is no indication that its growth is going to stop anytime soon. In their 2003 report on the rising economies, Goldman Sachs forecast the future importance of both countries in terms of their impact on the world economy. The report also highlighted that India was unlikely to reach China's future status as the world's largest economy. However, their comparative size, geographic proximity and successive rise in economic and political power will ensure that competition will be a key feature of their future relationship.

For example, China's growth has come as a result of its manufacturing strength. In its service provision industry India on the other hand is reaping the rewards of its early investment in the intellectual capital associated with the Information Technology (IT) industry16 and the benefi ts that come with a large, well educated and significant English-speaking population. This gives it a signifi cant advantage over China at a time when industry elsewhere looks to outsourcing services as a means of gaining cost advantage. This also coincides at a time where India is rapidly gaining ground in its manufacturing industry and continues to proceed with its market reforms. As such India will increasingly be a source of competition to China, but this a natural feature of a globalised economy and should not necessarily be feared.

As the two economies have emerged from diff erent bases they have largely competed in different market sectors but that will change as both countries venture into other areas of expertise and look to learn from each other. It has been noted that 'Indian companies look with envy at China's manufacturing prowess, while Chinese IT companies want to learn from India's success in the services sector'.17 As a result there is likely to be greater engagement between India and China over the coming decade in order to merge interests to achieve mutually benefi cial outcomes.

The benefi t that is already becoming evident is the rise in bilateral trade and investment. With this growing at just under 50% a year for the last fi ve years, China will soon overtake the US as India's largest trading partner.18 Whilst relatively modest at present, recent targets set by Be? ing and Delhi provide a clear expression of the desire to make this a key element of engagement that contributes to the sustained development of both countries. This can be seen in the comments of Yu Ping, of the China Council for the Promotion of International Trade who highlighted the future potential for trade when he noted to Indian industry leaders that 'now we [China] are sett ing a new target of 100 billion dollars that should be achieved by 2015.' With this degree of economic engagement there is likely to be a greater preference for dialogue over confrontation and this can but help in providing a more stable security environment."[32]

Both India and China apparently realise the futility of a conflict. In this age of inter-dependence; co-operation rather than conflict is the most acceptable course of action. The critical issue for both China and India is economic development and thus it was mutually decided by both to ensure the conflict does not affect their mutually linked economic & development related progress. Both nations have recently opened their markets to foreign investment and progressing leaps and bounds with competition amongst themselves as the fastest growing economies in the world with growth of 10 & 7 % respectively for the past decade. The two countries have reached such levels of development that they are now the two fastest growing economies of the world and they are largest trading partners and mutually interdependent. The state today is that the both are cooperating with each other to achieve their rightful place in world polity, however in years these interests are bound to clash and the competition will take over present day cooperation, considering the present state of the process of nation building, a military conflict is not envisaged between India and China.

India and Bangla Desh

" Despite the role it played in securing the independence of Bangladesh, India's support has not been manifested in a compliant and supportive state. India's relations with Bangladesh are prickly at best, with the issue of sharing of water resources and rising Islamist fundamentalism being a constant source of aggravation. Concerned about the suspected influence of the Pakistani ISI in supporting fundamentalist Islamic groups, New Delhi is unsatisfied with Dhaka's lack of effort to bring these groups under control. Fearful of the influence they may have on their own Muslim population and their potential to open another front of insurgent operating bases, New Delhi has been putting significant but unsuccessful pressure on Dhaka. As one commentator noted 'The emergence of Bangladesh as the new hub of pro-bin Laden jihadi terrorism has serious implications not only for India's North- East, but also for law and order and communal and religious harmony in the rest of India.' Whilst it is unlikely to manifest itself in open large-scale hostilities between the two countries, periodic border skirmishes have occurred. As a result, India is constructing a fence along the entire border. It should also be noted that China is also playing a balancing game in Bangladesh - 'Chinese Premier Wen Jiabao's recent off er to provide Dhaka with nuclear reactor technology has led to speculation as to whether Beijing would replicate in Bangladesh the sort of military, nuclear and missile collaboration it has with Pakistan. Such a level of engagement would be very de-stabilising for India and, in the longer term, would be a strategic mistake to the detriment of Bangladesh by virtue of the adverse international attention such an action would be likely to receive.

The ongoing issues related to trade, water, illegal immigration and insurgent sanctuaries to and from Bangladesh all have serious implications for India. Resolving these issues will be extremely difficult not least because 'strong distrust between the two sides is patent, with India viewing the current Bangladeshi government as strongly influenced by Islamic fundamentalists and therefore hostile to Indian interests.' There appears to be little that can be done to improve these relations in the near future. India's rise will provide it more leverage but the fundamentalist threat to India is very real and as such it will have to work hard to get Bangladesh to act to constrain the activities of these groups. Given Bangladesh's poor economic condition, this is not the time for it to be going down a path that promotes instability. Whilst it has recently seen gradual economic improvement, there also needs to be the solid realisation within that country of the benefits that could come with improved relations with its large neighbour." [33]

Bangla Desh has been switching from authoritarian rule to democracy & vice versa. Poverty, acute under development, inherent weakness in economy and internal political strife are problems that Bangla Desh has to address. India is not likely to adopt an aggressive posture towards a substantially weak country like Bangla Desh. However, the suspicious attitude and big brother syndrome being propagated by Pakistan have always cast a shadow on improvement in relations between both countries. The growing religious fundamentalism, harbouring of anti India groups and an overpowering military setup are most significant irritants enroute.

India and Nepal

The land locked erstwhile kingdom of Nepal is sandwiched between India and China. Even though it was never occupied by the British, it was rarely in a position to assert its complete independence. After 1947 Nepal emerged from its seclusion and became active in regional politics[34].

" As a larger state, Nepal's position of subservience is less pronounced. In 1987, the then Panchayat government purchased a limited number of anti-aircraft guns from China, apparently in response to Indian violations of Nepalese airspace by aircraft on reconnaissance over Tibet. Since India's main advantage against China is its superiority in the air, the influx of the Chinese anti-aircraft defences into Nepal was interpreted as provocative move by India, which saw China as attempting to build up a long term relationship with Nepal and thus breaching Nehru's dictum cited above. Nepal further aggravated the situation by imposing work permits on Indians employed in Nepal in contravention of the 1950 treaty."[35]

" In order to place pressure on Nepal, India refused to renew the trade and transit treaty and confined border trade to only two points of access. This move placed a stranglehold on the land-locked country. The economic damage that eventuated helped to provoke a political crisis in Nepal. The Palace, which had hitherto manipulated through a form of controlled democracy relying on local level elections, was forced to introduce full democratic elections, and the pro-Indian Nepali Congress party was elected."[36]

" The India- Nepal crisis had wider ramifications. After the initial transfer of arms, China backed away from further provocation of India and refused any firther sales, Beijing presumably had other agendas that did not involve military confrontation with India at that time. The international community, however, strongly supported Nepal's position. India was widely seen to be adopting 'bullying' tactics against its small land-locked neighbour, a country popular with tourists. ...... India had asserted its predominance, but at a price."[37]

"With a Hindu monarchy at its centre, Nepal has generally been able to count on India's support. That said, following the brutal murder of the royal family and the succession of King Gyanendra to the throne, India misplayed its hand by initially giving support to the new king. As a result there was a misreading of the feelings of the Nepalese people and this also provided an opening for the ongoing Maoist insurgency to make further headway in the country, oft en at great cost to the Nepalese people. The Maoist threat represents perhaps the greatest challenge faced by Nepal and in Indian -Nepali relations. India's eastern and north-eastern states are already plagued by internal insurgencies and there is growing evidence of a Nepali Maoist link with the Naxalite groups. The border region between India and Nepal is porous and Maoist elements remain in control in some areas. As such, there is genuine concern that Maoist groups on both sides will attempt to establish 'a "red corridor" of Maoist -controlled territory stretching from Nepal through Bihar to Andhra Pradesh. These states are some of the least developed in all of India; high levels of poverty and unemployment, low literacy, an entrenched caste system, and an increasing gap between rich and poor, making the area ripe for rebellion.

India has been trying to regain its former pre-eminent position of influence and had offered assistance to Nepal to address the military threat posed by the Maoists. However, there has been a growing awareness of India's inability to deal with the complexity of Nepal's situation and that a stronger hand was required. In response to February 2005's power seizure by King Gyanendra, New Delhi noted that this was 'a serious setback for the cause of democracy'. Other commentators have suggested a hard line be taken as 'both morality and realpolitik would dictate that India not treat King Gyanendra's unconstitutional regime with any kindness.'110 Whilst the US believes that India has a considerable role to play in ensuring the restoration of democracy in Kathmandu it remains to be seen how hard a line the Indian's will take.

It is unclear whether Nepal is over the worst but recent moves indicate that India has learnt from its past mistakes and that it will continue to adjust its approach. In an economic sense, Nepal cannot ignore India's rise and it remains in its interest to leverage its national assets, such as its potential for hydro electric power, to improve the condition of its own people. The ongoing Maoist insurgency has the most potential to disturb the equilibrium and India is likely to continue to pressure Nepal in this respect." [38]

Nepal's relations with India are oriented towards trade and transit. The border between China and Nepal is such that commerce is severely restricted due topographical factors. Therefore, Nepal traditionally trades with India. Any disruption in the flow of trade, severely effects normal life in Nepal. Healthy relations between the two are highlighted by the fact that India has permitted a transit agreement with Bangla Desh that permits limited use of Chittagong and Chalna as ports from Bangla Desh to Nepal[39]. The Maoist struggle and demise of monarchy have changed the political setup and hierarchy. The ever increasing influence of China and opening of trade routes between China & Nepal are major cause of concern for India.

India and Bhutan

" Bhutan is another Himalayan Kingdom that escaped direct British rule before India became independent. It has strong cultural and religious ties with Tibet. Both India and Bhutan faced with a common threat of China, recognised each other's need. Bhutanese rulers envisaged a better chance of survival as an independent nation by aligning with India. They also concluded that by not undermining India's security and by not seeking to assert their independence, they would gradually be able to expand their relations with the outside world"[40].

"India's relations with Bhutan are good and the prospects for the future look even bett er. With India's demand for energy rising exponentially and with Bhutan's significant potential for hydro-electric power generation it would appear that the two countries interests are neatly synchronised. Hydro-electricity already accounts for 45% of the Bhutanese Government's revenue and this will continue to rise as Indian industry invests in power generation and supporting infrastructure.96 Such investment is critical for Bhutan in achieving its goal of becoming self-reliant economically.

As the kingdom heads towards democratic elections, India has also been supportive in educating Bhutanese election workers on the processes required. This support has been appreciated by the Bhutanese Government and perhaps demonstrates the type of role India would like to play elsewhere in the region in terms of promoting stability and fostering economic growth on the back of its own economic rise."[41]

The advent of democracy in Bhutan and peaceful transfer of power to democratic govt and India's role in the whole process has brought the two nations together and closer. The Indian involvement in development process in Bhutan and its active engagement have instilled confidence in the smaller nation. The relations in the past decades have been favourable towards Bhutan and no major changes are envisaged in the relationship. This is also the only neighbour with whom the relations have never seen any strain or distrust among the two countries, however the new regime and its outlook would be better known on stabilisation of the new form of govt in Bhutan.

India and Sri Lanka

After independence, Sri Lanka maintained close ties with the West. Later its attention shifted to the East, including several close ties with Pakistan, China and Israel, this led to a cautious stance of Indian diplomacy. The year 1987 opened a new chapter in Indo-Sri Lanka relations when an accord was signed for solving the ethnic issue of Tamil-Sinhalese groups. Colombo was also obliged not to give any bases or special privileges to any foreign power or agency including the Voice of America and implied the withdrawal of the Israeli intelligence group, Mossad[42]. India sent its Peace Keeping Forces to restore normalcy in Sri Lanka. To what extent it assisted in resolving the issue, remains a debatable point. The recent engagement of Sri Lanka by China and economic & development assistance has awakened Indian diplomacy and consequent active engagement. The rout of LTTE and the end of strife in Sri Lanka was possible with material support from India and Sri Lanka's acknowledgement of Indian assistance is a case in point and India's pre dominance in the region was well projected. The ongoing crisis of internally displaced Tamils and their rehabilitation is a major irritant and cause of concern for India in particular and world at large.

India and Maldives

'"Since India came to the aid of the Maldives following a coup att empt in 1988 and relations between the two countries have largely been cordial.98 There is some evidence to suggest that Wahhabist elements have been trying to establish a foothold within the local Sunni population. This would be a significant development and is one that India is keen to avoid. As such, India has been willing to turn a blind-eye to the country's imperfect democracy and has 'reasons to be gratified over [President] Gayoom's success in keeping Wahhabist and other extremist influence away from the Maldives.' With tourism as its key industry, the Maldives can only benefi t from the growth in India's middle class and the disposable income that comes with them. India will remain interested in maintaining stability and will continue to promote democratic reform. That said, if the cost of doing so risks the wider acceptance of radical lements within the Maldives, then it is unlikely that New Delhi would push too hard. "[43]

Another country that helped in boosting India's regional predominance is Maldives. It is located in the Indian Ocean with Sri Lanka and India as its closest neighbours. A majority of its people are of Sinhalese or Tamil origin. The Indian assistance in averting an attempted coup which was and its task force averted the coup attempt. The fact that Maldives sought Indian assistance and that India successfully met its objective, reinforces India's pre-eminence in South Asia.

India and Myanmar (Burma)

" Despite its many failings as a nation-state, Burma is reaping the rewards that come with the competing attention of the world's two emerging great powers. China has long had a strategic interest in Burma and in some respects India made it easier for China to gain a foothold of influence. As one commentator has argued 'by adopting a very inflexible position towards the r

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