Acting East: India in the Indo-Pacific

The following report was originally published by Brookings India on October 24, 2019. The Executive Summary is below and the full text can be downloaded here. 

Executive Summary
India’s “Act East” Policy evolved from its prior “Look East” Policy during the 2000s in response to China’s rise and assertiveness, the inadequacies of the post-Cold War security order, and India’s growing capabilities. The Act East Policy differs from the Look East Policy in three ways: it has moved beyond primarily economic objectives to encompass security and other realms, its focus has widened from Southeast and Northeast Asia to the entirety of the Indo-Pacific, and the urgency and priority of its efforts have been elevated. The objective of the Act East Policy is to preserve a favorable balance of power in the Indo-Pacific. It increasingly involves four elements: securing the Indian Ocean, integrating with Southeast Asia, deepening strategic partnerships with other balancing powers (the United States, Japan, Australia, France, Russia, and others), and managing differences with China. While considerable progress has been made in each of these areas, and India can build upon an often-overlooked history of leadership in Asia, New Delhi will need to do much more to ensure that its stated objective of a “free, open, and inclusive Indo-Pacific” is met. This will require steps to improve naval acquisitions, defense exports, overseas project implementation, air connectivity, regional trade, and investment screening.

The Indigenisation of India's Defence Industry

The following report was released by Brookings India on August 8, 2019. The full report can be downloaded here.

Executive Summary

An indigenous defence industry is a vital objective for India given its security environment and strategic objectives. India has a large and growing defence budget and a long history of defence industrial production. However, the country remains heavily reliant on defence imports, particularly for major platforms, while its own exports are extremely meagre. Although several high-level committees have been established to address the problem of defence industrial indigenisation, very few of the necessary steps have been taken. In part, this is because India faces a number of dilemmas in trying to reform its defence industry: the normal rules of market economics do not apply; ideal objectives of quality, cost, and timeframes cannot be achieved simultaneously; defence budgets remain susceptible to cuts; the nature of defence supply chains is changing; and little heed has been paid to policies to maximise technological absorption. Moreover, major stakeholders confront their own challenges: India’s powerful defence public sector faces conflicts of interest and is resistant to change; the armed services provide unrealistic qualitative requirements; the Ministry of Defence lacks specialisation; the Finance Ministry discourages long-term spending; and the political leadership lacks expertise and is reluctant to make decisions due to political perceptions. To address these diverse challenges, efforts should be made to ensure predictable long-term requirements and create a more level playing field between the public and private sectors. Further, a mechanism must be found to ensure predictable capital expenditure, in order to incentivise investment. Without such steps being taken, India will continue to struggle in its quest for defence indigenisation.

Read the full report here. 

India 2024: A Global India

The following memo appeared in a compilation, India 2024: Policy Priorities for the New Government, released by Brookings India in May 2019.

The next Indian government faces a world that looks very different from the way it did five – and certainly 10 or 20 – years ago. The global economy is facing headwinds: stagnant trade, disruptive technologies, and growing protectionism concerning agricultural and manufactured goods, key services, technology transfers, and labour mobility. U.S. President Donald Trump is rewriting the rules on trade, alliances, and multilateralism, some of which could well outlive his presidency. As its economic growth decelerates, China has become more assertive and less sensitive to the concerns of other countries, including India. This extends to the bilateral boundary dispute, the Belt and Road Initiative (including the China-Pakistan Economic Corridor and the securitisation of the Indian Ocean), economic and trade differences, and positions at various international institutions. India faces a periphery – Bhutan, Nepal, Bangladesh, Myanmar, Sri Lanka, and the Maldives – that is democratising, creating new opportunities and long-term stability but also new challenges to integration and security. Pakistan continues to pursue a revisionist agenda against India – including through the support of terrorist proxies under the nuclear umbrella – even as its economic fundamentals weaken further. Afghanistan’s future remains uncertain, and tensions remain high across the Persian Gulf and between the West and Russia. Amid this backdrop, what should be the priorities for the next Indian government until 2024?

1. Prioritise Trade and Defence Indigenisation
Commerce is increasingly a strategic tool, and India’s growing market is evolving into a potent point of leverage with other actors. However, India’s trade policy has traditionally been dominated by domestic priorities. Identifying areas of Indian comparative advantage, liberalising selectively, and coordinating trade policy between ministries – including through the creation of a special trade representative’s office – are vital. On issues such as the Regional Comprehensive Economic Partnership (RCEP), India faces imminent and difficult choices. Joining RCEP will adversely affect certain sectors of the Indian economy; but not joining will also have costs, and will exclude India from the next generation of regional trade norms. Efforts must be made now in framing trade policy and prioritising certain multilateral and bilateral negotiations so as to avoid having to take such difficult decisions in the future.

Defence self-reliance remains another urgent priority. Despite India having the fifth largest defence budget and hosting a large defence industry, it remains the world’s largest defence importer while its exports are still negligible. Indigenisation of defence production will require: integrating budgetary, technological, industrial, and export factors into the military services’ qualitative requirements (QR), ensuring steady disbursal of funds by the Finance Ministry, and enhancing competition for contracts and innovation within the defence public and private sectors. Many of these policies will require top-down leadership decisions, often against staunch vested interests in the Indian bureaucracy and businesses, and despite very real constraints of time, financial resources, expertise, and political capital. But the absence of decision-making in these areas will severely constrain India’s rise as a global power.

2. Focus on the Neighbourhood and Indo-Pacific
The biggest external strategic challenge facing India concerns the manner of China’s rise and its increased assertiveness. This is impinging on a number of vital Indian interests through the militarisation of the Himalayan border region and the Indian Ocean; the deepening Chinese relationship with Pakistan; the undermining of India’s ties with the likes of Russia, Nepal, and the Maldives; non-market economic practices resulting in dumping, trade barriers, and competitive disadvantages; and India’s entry into international institutions such as the UN Security Council and Nuclear Suppliers Group. Addressing this challenge will require the next government to focus laser-like on improving relations with the neighbourhood, including devoting diplomatic attention, providing assistance, improving connectivity, and recasting regional institutions in a positive light. Furthermore, India must continue to implement an active Act East Policy in the Indo-Pacific. This will require, first, working to secure the Indian Ocean region from further militarisation. Second, India should connect politically, economically, militarily, and socially with Southeast Asia. Third, New Delhi must deepen security partnerships with balancing powers such as the United States, Japan, Australia, Russia, and France. And fourth, it should manage differences with Beijing through sustained engagement.

3. Contain Pakistan & Balance Eurasia
While policy in the near-abroad and to its east is less a question of vision and more one of implementation, a trickier balancing act will be required to India’s west and north. Much will centre on the immediate problem of Pakistan. From 1989 to 2016, India was stuck in a cycle of talks with Pakistan punctuated by disruptions caused by Pakistani military and terrorist provocations. Engagement served a useful purpose at times in mitigating international opprobrium, deflecting attempts at third-party mediation, and managing escalation. However, this experience also makes it clear that positive engagement has done little to alter Pakistani behaviour. The growing international frustration with Pakistan – whether its continued support for terrorist groups, its adverse civil-military relations, its non-proliferation record, or its involvement in Afghanistan – presents an opportunity for India to relentlessly press its advantages, within the confines presented by both countries’ nuclear weapons. Although Pakistan will continue to resist coercive behaviour, with likely support from China, the sustained isolation of Pakistan – even if unilateral and initially inadequate – is more likely to result in behavioural changes as the power disparity grows further in India’s favour than a return to the cycle of talks and disruptions.

More delicate balancing acts will have to be executed in West Asia and Eurasia. India’s partnerships with many centres of global and regional power are increasingly positive and broad, and have assumed a logic of their own. This extends to the United States, Europe, Japan, South Korea, Southeast Asia, Australia, Canada, the United Arab Emirates, Saudi Arabia, and Israel. These will remain India’s most important relationships. But as these ties improve, India will face tough balancing acts in preserving mutually-beneficial relations with Russia and Iran. Russia is more important and complicated, given India’s continued dependence on Russian military hardware, spares, and maintenance; close technological cooperation; and concerns about Russia’s relations with China. Engaging with Moscow will occasionally imperil relations with the United States and Europe, but this will require a series of clear-headed cost-benefit analyses. Iran is a more manageable issue, given leaner relations, but cooperation on connectivity and Afghanistan will remain important. To the extent that India can manage these balancing acts, it should do so.

Survey of India’s Strategic Community

The following report, released by Brookings India in March 2019, can be downloaded here.

Like every major country, India has a strategic community: a relatively small group of professionals who, in different ways, direct or influence India’s foreign and security policy. This strategic community includes career diplomats, bureaucrats, military commanders, and intelligence officers, as well as political leaders from the ruling party/coalition and

the opposition. Additionally, reporters and commentators in the media, scholars at universities and think tanks, and members of the business community also play a role in shaping perceptions and influencing outcomes.

While general attitudes and areas of broad consensus can be discerned in a variety of ways, no systematic survey of India’s strategic community has been accomplished.

In an attempt to fill this gap, a survey of India’s strategic community was fielded in December 2018. Email invitations to participate in a 20-question survey were sent to 290 members of India’s strategic community from 14 December, 2018 onwards. Of those who received the email invitation to answer the SurveyMonkey questionnaire, 127 (44%) responded by 25 December, 2018. The survey was anonymous but linked to individual email addresses to ensure its integrity. The average time spent on the survey was seven minutes. Respondents were required to answer all 20 questions to successfully submit their responses.

The survey reveals some distinct trends concerning India’s biggest domestic and foreign challenges, its major global and regional partners, institutional and policy priorities, and variations across sectors and age profiles. Here are some highlights from the survey:

71% of respondents believe that economic issues constitute India’s biggest domestic challenge. These include, specifically, (1) inequality and lack of opportunity and (2) insufficient skills, education, and employment. Addressing these deficiencies, including through sourcing external investment and financing, research collaborations, and the import of technology, are considered high policy priorities by India’s strategic community.

54% see China’s assertiveness as the most significant external challenge India faces. There are particular concerns about the China-Pakistan Economic Corridor and Chinese investment in the Indian Ocean. Only 2% believe that India should collaborate more with China in the event of greater U.S.-China competition. However, Chinese global dominance is not seen as assured and the strategic community considers the odds of a limited conflict between India and China unlikely.

75% perceive the United States to be India’s most important partner on global issues. Additionally, a large minority of respondents (43%) are in favour of closer collaboration with the United States in the event of greater U.S.-China competition. However, trade disputes and U.S.-Pakistan relations are believed to be constraining the India-U.S. partnership.

74% believe the Indo-Pacific is the dominant framework for India’s extended neighbourhood. The Indian Ocean, South Asia, and Southeast Asia are the regions of chief importance for Indian interests and the East Asia Summit is considered by the largest number of respondents to be a very important institution for Indian interests. Regional connectivity with South and Southeast Asia and maritime investments are considered among the top foreign policy priorities for India.

Views are varied concerning engagement with Pakistan and partnerships in West Asia. There are competing clusters of opinions concerning engagement with Pakistan’s military, civilian government, and civil society. Opinion is also divided as to whether Israel, the United Arab Emirates, Iran, or Saudi Arabia is India’s most important regional partner in West Asia.

Certain historically dominant institutions, regions, and issues are now low priorities. These include: the South Asian Association for Regional Cooperation (SAARC), Non-Aligned Movement (NAM), and the Commonwealth; developments in Europe, Africa, and Latin America; and nuclear and missile modernisation, foreign aid, and cultural diplomacy.

Those who believe that India’s most important global partnership is with Russia reflect divergent views on a number of other issues. While only a minority (12%), they are more likely to advocate remaining equidistant between the United States and China in the event of greater competition, believe Iran is India’s most important partner in West Asia, and prioritise the Shanghai Cooperation Organisation and BRICS in India’s institutional engagements.

Minor differences are discernible between the attitudes of decision-makers and influencers. Current and former members of the military, civil services, and political parties exhibit slightly greater wariness about engaging Pakistan than academics, think tank experts, and members of the media. They also deem military interventionism in India’s neighbourhood as more likely and place a marginally higher priority on defence industrialisation and the import of technology over incoming economic investment.

There are some clear differences in attitudes across age cohorts. Those born before 1960 attribute greater importance to the United Nations and do not prioritise an expansion of India’s diplomatic capacity. Those born between 1960 and 1979 generally place a greater priority on the partnership with the United States and on trade issues. Finally, those born after 1980 are more comfortable with the concept of the Indo-Pacific and are less likely to believe that sectarianism and identity politics constitute India’s major domestic challenge.

Strategic elites hold similar views to the Indian public except on Pakistan (and to a lesser extent on China). A comparison with a similar survey of Indian public opinion conducted in March 2017 suggests India’s strategic community shares similar views on international partnerships with the United States, including in the context of U.S.-China competition. However, the public appears to be more critical of Pakistan and slightly less concerned about China than elites, although different methodologies and timings make exact comparisons difficult.

If State Elections Were General

The following blog post was originally published by the Brookings Institution on 13 December 2018.

On December 11, the results of five Indian state elections – in Rajasthan, Madhya Pradesh, Chhattisgarh, Telangana, and Mizoram – were announced. These will be the last state elections before the 2019 Indian general election, about which speculation will now begin in earnest. Predicting national elections is a notoriously difficult exercise; the last three defied many expectations. Given that media commentators project every state election as a trendsetter for national politics, a simple exercise to start thinking about next year’s outcome involves transposing the results of every state election over the past five years onto a national election map. Basically, this means taking the number of seats a party won in the last election in each state, dividing it by the total number of seats in the state legislature, and multiplying that number by the Lok Sabha seats representing that state.

Crunch the numbers in this manner, and it brings up the following results: the BJP drops some 103 seats and its allies another 7, giving the BJP a total of 179 and its National Democratic Alliance (NDA) coalition about 207 seats. (For context, no winning party won more seats than that in five general elections between 1996 and 2009.) The Congress would certainly gain in this calculation – particularly in Gujarat, Rajasthan, Madhya Pradesh – but would make only about 107 seats total. Along with its allies, the Congress-led United Progressive Alliance (UPA) would have 163 seats. This would represent a big increase from 2014, but is still over 40 short of their competitors. Other regional parties, led by the All India Trinamool Congress, All India Anna Dravida Munnetra Kazhagam, Biju Janata Dal, Telugu Desam Party, and Telangana Rashtra Samiti would be among the largest contributors to 172 seats for third parties and independents.

Now, the caveats. These numbers offer a useful starting point, but should definitely not be interpreted as a prediction, for at least four reasons. The first is that Indian voters have historically distinguished between state-level and national-level issues when they voted, and parties will campaign on very different concerns and personalities. A particularly good example of this was the fact that the 2008 Uttar Pradesh elections – won convincingly by the Bahujan Samaj Party (BSP) – was followed shortly thereafter by a strong showing by the Congress in that state in the 2009 general election. A second reason is that enough time has elapsed from several state elections, notably in Bihar, Delhi, Maharashtra, and Uttar Pradesh, to suggest that they could have little bearing on the next general election.

The third reason is that both pre-poll and post-poll alliances will alter calculations, sometimes significantly. How the likes of the BSP, TDP, and others position themselves will make a meaningful difference, as would campaign strategies between allies. Finally, state election results disproportionately favour state parties and smaller political movements, who are more likely to be crowded out in a general election when fewer and larger seats are at stake. Nonetheless, despite these important considerations, a simple transposition of recent state election results on a national electoral map provides a basic starting point for anticipating what is in play in the run up to the 2019 elections.

India-U.S. Relations in Transition

A collection of short memoranda on India-U.S. relations was published by Brookings India on June 3, 2016. An excerpt from the introduction is below, and the full text can be downloaded here. 

This collection of short memoranda on India-U.S. relations has been written by experts from Brookings India and its affiliate, the Brookings Institution in Washington DC. The memos each represent the personal views of the authors and not the institutions themselves. They are meant to provide different, and sometimes differing, perspectives on how to make progress on some of the top issues on the India-U.S. agenda.

In the Introduction, Dhruva Jaishankar looks at the highs and lows in relations since 1998 and the considerable progress made...[Read more]