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Home / Opinion / A year on, an India on the make

A year on, Narendra Modi and the National Democratic Alliance government are well into changing the perception of India. Certainly, the jury is still out on whether the government’s actions really fulfil a general level of expectation that has been running high. But even there, the debate has shifted. A year ago, the narrative was still about the risks of a divisive domestic policy—one that would have enlarged communal rifts and rested on authoritarian trends. Now, what is questioned is the actual pace of change—but that is in large part because India’s institutional set-up prevails over any government impulse, allowing for no short cuts (the “Ordinance Raj" has not materialised). In itself, the resilience of Indian institutions is good news for all.

Few would doubt today that Modi has risen above and beyond the more zealot elements in his own political support base. Increasingly, he can count on his international diplomacy for a sympathetic cultural and political perception—that is no mean feat given that the Congress has been the traditional owner of India’s image as a democracy.

It leaves the way open for Modi’s real goals of advancing Indian interests and achieving the status of a global power to be reckoned with—indeed, it is “India on the make".

These are difficult targets given that so much remains to be done for India’s domestic economy and society. The link between the two is probably symbolised by the international promotion of the Make in India motto, advanced in every trip the prime minister has undertaken abroad. This is the most risky aspect of the government’s policy.

The successful promotion of manufacturing relies less on government-induced technology transfer than on a favourable investment environment and revamped infrastructure. There is no doubt this is what the government is aiming for—but the horses won’t come until the barn is ready, and in this time lapse lies the main contradiction of the programme: India’s processes are more incremental than big bang, yet the competition within the global economy is brutal. To counter this, economic policy will have to play up the advantage of India’s potentially huge domestic market. Here, the transfer of budget resources and spending decisions to states is a strong signal. Foreign investors will have to get used to 29 states—and counting, since there is an incentive to carve out new ones. How New Delhi will be able to foster a stable tax environment and coordinate ambitious projects and developments—the railway corridors, the 100 gigawatt solar energy plan, the smart cities—will determine the outcome of Make in India.

This is the real long-term question in India’s international drive. But while Modi goes abroad to promote India, its partners look at what he brings to the party. Neighbourhood policy in the subcontinent has taken a turn towards the better, especially with Bangladesh. After earlier accepting an unfavourable international court decision, Delhi has now settled the land boundary issue with an astute political handling of West Bengal. The combined aid and strategic packages brought to Mauritius and the Seychelles are notable, as is the success in turning around relations with Sri Lanka. That leaves Pakistan as the main question mark. The presence of Pakistan Prime Minister Nawaz Sharif at Modi’s swearing-in was a diplomatic coup, as important as Barack Obama’s Republic Day appearance. The lack of follow-up is underlined by China’s extraordinary cash offer to Pakistan. China is the elephant in the room.

To his credit, Modi has both stood up to China on fundamental sovereignty issues and made a rational opening on both economic and border issues. This will be a long game, one for which India will need to be both alert and flexible. India also has major relations with Japan and Russia—is it enough to hedge or “congage" China?

This leaves the old West—the US and Europe. Unquestionably, Modi has struck a chord there. With Washington, he has overcome previous irritants and is amplifying earlier strategic cooperation. The turn to Europe is even more notable, with an economic bridge to Germany and a security axis forming with France.

It is with Americans and Europeans that the future identity of India will appear. Will Modi materialize as a consummate player of realpolitik, turning India’s underdog status with China as a strategic asset with America? Or will he make full use of India’s potential as one democracy speaking to others? Until now, the Brics (Brazil, Russia, India, China and South Africa) acronym has symbolized the need for the old West to accommodate the emerging economies. But the political existence of the Brics has always been doubtful—except when there is a need to stand up to the West and say no, as has occasionally happened in climate talks. In strategic terms, it is inexistent, save for a common allergy to international interventionism.

Modi’s carefully crafted trips and his attention to bilateral relations can be leveraged by a more active and responsible international stance for India. It has the legitimacy for this, and it is acquiring the means. But does it have the will? Traditionally, India has been more reactive than proactive to the international order. Can one man’s ambition—a quality Modi does not lack—reverse the trend? It would indeed take India’s influence beyond membership of Brics.

The writer is director of the Asia & China programme and senior policy fellow, European Council on Foreign Relations.

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