India’s Foreign Policy during the Pandemic

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Context: In this article, we look back on India's major foreign policy challenges in 2020, and what the next year holds in store. In the world of diplomacy too, COVID-19 was the biggest story, heightening tensions among some nations, most notably evident in the deteriorating U.S.-China relationship, while emerging as an opportunity for others who have offered medical assistance and are now pledging support in the distribution of vaccines. 

Relevance:

Mains: GS II –

• Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
• Effect of policies and politics of developed and developing countries on India’s interests, Indian Diaspora.

Introduction:

• The current international environment is challenging. What started as a health emergency has evolved into an economic disruption, geopolitical shock, and a social challenge of an unprecedented magnitude.
• This crisis has also brought up many opportunities for India to cement its position as a responsible and constructive member of the global community.
• How India deals with these immense challenges and utilizes the opportunities will influence our future trajectory as a nation.
• India's Foreign policy is thus an important tool that will shape the future standing of India in the international arena.

Challenges to India's Foreign Policy during Pandemic

• Border Impasse with China: 
  • The Escalation of border disputes with China to confrontation has shown that the stability in relations for over three decades is now over.
  • Indian has stood up to China and showed a strong resolve to safeguard its territorial integrity and Sovereignty.
  • Negotiations for settling the border issues despite being ready for any military conflict showed a changed attitude of India from pacifism to pragmatism.
  • India has also decided to ban several Chinese mobile applications that seemed to be under the control of the Chinese State.
  • Decoupling economic trade with the other aspects of Foreign relations may be the way ahead for India China relations.
• Cross Border Terrorism:
  • Cross Border Terrorism has always been a threat to India's National Security.
  • India has consistently been raising concerns about terrorism in various international fora to seek action against those who control, support, fund, and shelter terrorists.
  • India's efforts to isolate terrorists and their sponsors have led to increased global support.
  • The task is however far from complete and we need to ensure that the world follows an unambiguous approach to terrorism.
  • India should continue its effort to make sure that the international community finalizes a Comprehensive Convention on International Terrorism.
• Walking out of RCEP agreement:
  •  It is the world's largest free trade agreement, covering nearly a third of the global population and about 30% of its global gross domestic product. It will progressively lower tariffs and aims to counter protectionism, boost investment, and allow freer movement of goods within the region.
  • India was involved in early discussions but opted out last year over concerns related to cheap Chinese imports.
  • India pulled out of the trade agreement as negotiations failed to address its core concerns. These were threats of circumvention of rules of origin due to tariff differential, the inclusion of fair agreement to address the issues of trade deficits, and the opening of services.
  • Given the significance of the agreement for trade in the region, India can't afford to lose out on this opportunity. But, at the same time, India should assure through sustained negotiations that the terms of the agreement are fair for India.
• Non Traditional Threats to National Security:
  • India's Foreign Policy must also contend with non-traditional security challenges in the newer domains such as Space, Cyberworld, and the biological domain.

Opportunities brought up by the Pandemic

• Leadership Opportunity: 
  • From the SAARC region to G-20 India has taken a lead in addressing the present crisis.
  • India’s diplomacy has played a major role in managing the crisis, be it the evacuation of distressed people or following the pandemic minute by minute, or settling immediate and complicated issues including facilitating the evacuation of stranded foreign nationals in India.
  • We have a challenging and busy multilateral and plurilateral agenda in the coming years. India joined the UN Security Council for a two-year non-permanent term on January 1^st, 2020.
  • India is set to hold the presidencies of G20, BRICS, and SCO. These are recognition of India's enhanced global standing and the opportunities for us to convey our perceptions, our expectations, and our priorities.
  • In a post-Covid world, India can also lead the nations on the path to climate change mitigation, the Coalition for Disaster Resilient Infrastructure and International Solar Alliance are very good examples of India's ability to bring together nations to work on climate change-oriented solutions. 
• Digital Governance and Technology:
  • The COVID-19 crisis has brought new needs for digital government services and more demand for existing services.
  • Developers in governments are engaged in designing new apps and services to help in the fight against COVID-19.
  • Countries like India which were already making a concerted push towards Digitisation through its programs like Digital India can stand to advantage from the changed circumstances.
  • Digital Diplomacy during the Pandemic
    • The restrictions on international travel during the ongoing Pandemic forced India and the nation of the world to explore new means to communicate and continue conducting their international relations and Summits.
    • India, like many other nations, relied on Digital technology like video conferencing to participate in the virtual global summits and meetings.
    • The Prime Minister had participated in G20 and NAM virtual Summits, the Global Vaccination Summit, and the High-Level Summit of the UN ECOSOC and convened a virtual meeting of the heads of South Asian countries.
    • India has been at the forefront of digital diplomacy during the current crisis. India has held virtual summits with Australia and the European Union.
    • India has participated at the ministerial level in BRICS, SCO, and RIC meetings.
    • The Prime Minister and the External Affairs Minister have conducted over 150 digital and virtual meetings during this period.
    • Thus India has been agile in its efforts in continuing our foreign policy operations.
• An integral part of the global supply chain:
  • One of the top priorities foreign policy is to make India, in the words of the PM. “The nerve centre of global supply chains”.
  • The Covid Crisis has highlighted how much the world depended on China for the supply of finished goods and raw materials like APIs for the Pharmaceutical Industry.
  • In the near term, the cost of supplies from China may increase, stemming from overtime and expedited freight costs, as well as from paying premiums to buy up supply and hold capacity. Companies are also working through alternative sourcing strategies.
  • Now at a time when the industries are looking for alternative supply chains, India should grab this opportunity and take steps to become an integral part of global supply chains.
• Attracting Foreign Industry and Investments: 
  • For global businesses and investors trying to hedge their risk and tap new markets, India has emerged as the top destination for foreign direct investment (FDI).
  • The larger geopolitical scenario, a liberal and welcoming FDI policy in India, sectoral schemes, and structural reforms introduced by the government at the Centre and at the state levels are the key factors for the investors to look towards India.
  • Apart from this, India also offers a large and rapidly growing consumer market. This is an ideal situation for any global business seeking newer growth avenues.
  • Due to COVID-19, border issues with India, and a global trade war, China has come under the scanner of global multinationals.
  • The world is having a second thought about its over-reliance on Chinese supply chains and the market. As these companies and investors look for alternative destinations for evading the geopolitical risks and diversify their base, India will be the top destination on their list.
  • The Indian government is playing an active role in encouraging these potential investors to persuade them to shift base here by providing an enabling environment.
  • An outcome of this effort is that India has moved 14 places to be 63rd among 190 nations in the World Bank’s Ease of Doing Business Ranking and Report for 2020.
  • NITI Aayog reported in August 2020 that the country attracted close to $22 billion in FDI in the March-July period.
  • The number indicates how the global business and investor community trusts India as a manufacturing/service base and a promising market, even in the face of a pandemic.
  • By creating a few immediate success stories, India has the opportunity to transform the landscape and attract the kind of long-term capital that the economy needs.

Main Features of India's diplomacy during the Pandemic

• Health Diplomacy: 
  • India is playing a key role in the health sector during the pandemic. It has been taking far-sighted measures that will place it in good stead in the post-pandemic world. India has demonstrated that it is a responsible member of the global community. 
  • The pandemic produced an explosion in the demand for drugs such as Hydroxychloroquine and Paracetamol produced in India.
  • India was able to supply, after ensuring adequate domestic stockpiles, large volumes of these drugs to friends and consumers across the world.
  • India provided nearly 150 countries with these drugs and safety equipment like the PPE kits and ventilators.
  • Through initiatives like Operation Sagar, Operation Sanjeevani, the deployment of medical Rapid Response Teams in several countries, the linking of health professionals and pooling of health capacities, and supply of essential medical products, India has reinforced its credentials as a provider of net health security and first responders.
• Commitment to Multilateralism:
  • India firmly believes that the path to achieving sustainable peace and prosperity is through multilateralism.
  • India, however, believes that multilateralism needs to represent the reality of the contemporary world.
  • India believes that only a reformed multilateralism with a reformed United Nations at its centre can meet the aspirations of humanity.
• Commitment to Globalisation:
  • India has always been committed to strengthening globalization.
  • The world we live in now is so deeply interconnected by trade and investment capital flows that it would be unthinkable to reverse all that.
  • India recognizes the importance of globalization that helped in the exchange of important information between countries for containing the pandemic and treating those affected. The scientists were able to move faster on the vaccine development front because science has now become largely a kind of global enterprise.
  • Globalization also becomes important when the countries are looking for economic growth particularly now with the effect of the pandemic. The fastest way to boost an economy is to have a larger market to play in. And that means actually going in the direction of more trade, and more openness.

Relations with various important Countries and Regional Organisations

• Neighbourhood:  
  • India's Neighbourhood First policy underlines the renewed primacy we attach to the neighbouring countries to comprehensively upgrade and strengthen our relationships.
  • Ties with our neighbours received the greatest attention as reflected in frequent high-level exchanges, significant improvements in connectivity, economic integration, and people-to-people contact, and a special focus on neighbouring countries in India's developmental partnership program.
  • India has shown continued commitment to working in South Asia, even during the pandemic, and in the sub-regional BIMSTEC frameworks inter alia through continuous high-level engagement and through economic and connectivity initiatives.
  • In the context of the pandemic, the recent meeting of the heads of the South Asian Association of Regional Cooperation (SAARC) has sent out a positive signal across the region.
  • Taking initiative, India’s Prime Minister held a video conference with the member states to create a dedicated fund to fight the pandemic. India pledged to contribute a sum of $10 million (USD) to start and has provided necessary masks and sanitisers to neighbouring countries.
  • It is well known that the work of SAARC has been repeatedly stalled by India-Pakistan political disturbances, to the extent that it led to the cancellation of the SAARC summit in 2019.
  • However, given the transnational nature of coronavirus and the demand for immediate collaborative action, the India-Pakistan tension gave way to “disaster diplomacy,” which has facilitated a resurgence of relationship-building among the South Asian members.
  • The World Bank predicts that the pandemic will hit hard the South Asian region and is likely to wipe out the gains that the region made in poverty alleviation and result in increasing inequality. The growth of the region is predicted to be within 1.8 to 2.8% in 2020, which was earlier predicted to be around 6.3%.
  • Thus the region which is already least integrated will have a low capacity to cope in comparison to other regions with a high degree of cohesion. Therefore, in order to cope with such a situation, South Asia needs to collaborate.
  • The situation calls for joint efforts, and, thus provides an opportunity for cooperation because there are gains from regionalism. Regionalism should have answers to the disaster by way of a collaborative effort.
  • India, being the most prominent player in the region, needs to take the lead on the joint effort
  • Once the nations come together, they can upgrade the institutional mechanism within SAARC, which can work well beyond the crisis phase and in a different dimension, whether it be economics, political, health, or education. Thus, disaster diplomacy can give way to a greater possibility of cooperation within the region.
• Southeast Asia (ASEAN): 
  • Look East has been upgraded to Act East under which the ties with ASEAN countries are being strengthened through road, maritime, and air connectivity with a special focus on connecting our northeastern states with these countries.
  • We have a growing dialogue with the ASEAN through multiple channels and rapidly growing multi-sectoral linkages with ASEAN members.
  • We remain actively engaged in other formats such as the East Asia Summit and ASEAN Defence Ministers' Meeting Plus.
  • Prime Minister Narendra Modi co-chaired the 17th ASEAN-India Summit along with his Vietnamese counterpart Nguyen Xuan Phuc on November 12, 2020.
  • Prime Minister Narendra Modi announced $1 million aid to ASEAN Covid-19 Response Fund at the 17th ASEAN-India Summit held virtually.
  • The PM affirmed India's resolve to work with the block in the research and production of vaccines at reasonable prices.
  • The Mekong-Ganga cooperation and the projects within this framework will further strengthen the ties between India and ASEAN.
  • India highly values ASEAN’s stance on Indo-Pacific cooperation and stands ready to cooperate with the bloc to foster the implementation of priorities in the -Pacific region.
  • The ASEAN members and India should explore ways to increase the trade between them despite India's exit from the 15-nation Regional Comprehensive Economic Partnership (RCEP) agreement.
  • The Prime Minister of India had called for an early review of the ASEAN-India Trade in Goods Agreement (AITIGA). 
• West Asia: 
  • In the last five years, Think West- India's outreach to the Gulf and the West Asian countries has become an increasingly important pillar of India's foreign policy.
  • For India and its foreign policy, the West Asia/Gulf region holds significant importance for strategic, economic, and even domestic political agendas, ranging from migration to energy security.
  • The pandemic has initiated a reverse migration of Indian blue-collar workers as projects in oil-rich States stall, and infrastructure development halts amidst a contracting global economy that some say may be worse than the Great Depression of the 1930s.
  • India has repatriated more than 100,000 of its citizens from around 60 countries, a majority of whom are expected to be from West Asia.
  • The oil price crash, triggered by expectations of oversupply following a dispute on output caps between Saudi Arabia and Russia, exacerbated by the crash in demand due to COVID-19, will carry massive costs to the West Asian economies, and, by association, to foreign workers employed there.
  •  India is well-placed to attract a significant amount of capital from West Asia and reports of investment by UAE’s Mubadala and Saudi Arabia’s Public Investment Fund (PIF) are a case in point. 
  • The recent economic reforms announced by the Finance Minister bring much-needed clarity to industrial and agricultural policy. A strong, positive message to West Asian investors from India is the need of the hour.
  • The Union Government should work with the government of Maharashtra to expedite land acquisition for the $50 billion mega-refinery projects. Saudi Aramco and the Abu Dhabi National Oil Company have committed to investing $25 billion in the project.
  • Fast-tracking the resolution of endless litigation that has bedevilled the sale of a major stake of Mumbai airport by GVK to a consortium that includes the UAE sovereign fund, Abu Dhabi Investment Authority (ADIA) will also send out a positive signal to the markets.
  • Arguably, more than the loss of trade revenue and remittances, the return of semi-skilled and skilled workers alike into an economy already struggling with jobs may become a point of worry.
  • To mitigate the same, the government has tried to soften the blow by launching the Skilled Workers Arrival Database for Employment Support (SWADES) which attempts to capture the skills profile of returning workers and house them in a central portal that can be accessed by Indian and foreign companies. However, much more needs to be done with regard to reverse-migration and the economics attached to it, as globally, bilateral and multilateral trade-diplomacy is set to witness a tectonic shift towards the unknown.
• The USA:
  • India-U.S. ties were elevated to a “comprehensive global strategic partnership” during President Donald Trump’s visit to India in 2020.
  • The Covid-19 pandemic had fostered a stronger friendship between India and the USA.
  • India had exported Hydroxychloroquine
  • The US supplied India with ventilators to help bridge the shortage of life-saving devices in the country. 
  • The two countries are also collaborating on developing a vaccine for the virus.
  • The two countries held the U.S.-India 2+2 framework just days before the presidential elections on November 3, reflecting the maturity in the bilateral ties.
  • India and the U.S. signed the Basic Exchange and Cooperation Agreement for Geo-Spatial Cooperation (BECA), with which the two countries have inked all four foundational agreements to bolster defence ties.
  • The two countries also concluded the Strategic Energy Partnership, and India-U.S. CEO Forum also conducted its meetings all aimed at enhancing the bilateral trade relationship.
  • India and the US have reiterated their common vision of a peaceful and secure Indo-pacific region.
  • Beyond the vaccines, ventilators, and drugs, India and the US need as much help and support as possible in neutralizing the threat posed by China.
• The Europen Union: 
  • The India EU summit held in July 2020 put both partners back in discussions on ways to deepen ties. It may lead to a hugely beneficial free trade agreement.
  • The India-EU partnership can play an important role in economic reconstruction, and in building human-centric globalization.
  • India is seeking improved market access for its IT professionals in the Eurozone, removal of non-tariff barriers for goods, and for the EU to recognize India as a data secure country for easy flow of sensitive data. 
  • EU wants India to lower tariffs on wines and spirits, dairy products, and automobiles, further liberalize FDI in multi-brand retail and insurance and open up accountancy and legal services for foreign players.
  • Another bone of contention is the EU’s demand for India to strengthen its intellectual property right (IPR) regime to protect the interests of foreign firms. This may have a critical and potentially adverse impact on India’s pharmaceutical and generic drug industry.
  • The need for both entities is to reduce dependence on China. Both India and the EU share debilitating trade deficits with China–nearly $ 50 bn for India and $ 187 bn for the EU.
  • The High-Level Dialogue will aim at fostering progress on the trade and investment agreements, addressing trade irritants and improving conditions for traders and investors on both sides as well as discuss supply chain linkages. The EU and India agreed to keep the global trading system open. Their cooperation should address today’s challenges effectively, including post-COVID-19 economic recovery efforts with the objectives of a sustainable, socially just, and resource-efficient economy
• China:
  • The October 2019 Mamallapuram informal summit between Chinese President Xi Jinping and Indian Prime Minister Narendra Modi suggested the historically tense China-India relationship was warming considerably. 
  • However, 2020 has been a markedly difficult year for the relations between the two countries.
  • The ongoing Himalayan border conflict has plunged bilateral ties into crisis, and India has taken steps to limit Chinese investment into India and banned hundreds of Chinese mobile applications.
  • China's aggressive behaviour and intrusion into the Indian territory in the north have fueled India’s existing strategic and economic concerns.
  • These include overdependence on China for industrial inputs — India’s pharmaceutical sector, for instance, sources a majority of its Advanced Pharmaceutical Ingredients(APIs) from China. Because of this crisis, the desire to boost domestic production or diversify India’s options will likely intensify.
  • Another concern is Chinese entities taking advantage of the crisis for various objectives:
    • the acquisition of vulnerable Indian companies,
    • increasing its influence in India’s neighbourhood, and
    • portraying its system and global and regional leadership role as more effective than others (including the U.S. and India).
  • The Government of India has announced restrictions on foreign direct investment from countries that share a land boundary with India — a move clearly directed against China.
  • India has also been proactive in its neighbourhood with diplomatic outreach, economic aid, technical assistance, and the provision of medical supplies.
  •  India's ability to respond to the competition for influence and over political systems will depend on how India ultimately fares in this crisis, in health, economic, and social terms.
  • India is engaging with other countries in the Indo-Pacific, bilaterally and through a Quad-plus mechanism to balance China's influence in the Indo-Pacific and in international organizations like the WHO, etc.
• Russia:
  • India's relationship with Russia has not only deepened in traditional areas of cooperation like defence, space, nuclear, science, and technology, etc. but has expanded into non-traditional and new areas of cooperation like energy, investments, and cooperation between states.
  • 2020 marked the 20th year of the India-Russia Strategic Partnership and the 10th year of Special and Strategic Partnership. 
  • India and Russia have gone through several ups and downs in their decades-old bilateral relationship. The two appear at present to be going through a tricky phase.
  • The two-decade-old India-Russia annual summit was cancelled for the first time.
  • Russia had also been critical of the Quad mechanism.
• Africa:
  • Our engagement with Africa, both in political and economic terms has intensified.
  • There have been 34 outgoing visits to African countries at the level of the President, the Vice President, and the PM.
  • Over 2/3rd of India's lines of credit in the past decade have been offered to African countries.
  • The Covid-19 pandemic may create opportunities to deepen India’s engagement with Africa
  • During this Pandemic, India has already despatched medical assistance to 25 African countries.
  • The Ministry of External Affairs has already extended the e-ITEC course on “COVID-19 Pandemic: Prevention and Management Guidelines for Healthcare Professionals” to healthcare workers in Africa.
  • The Aarogya Setu App and the E-Gram Swaraj App for rural areas for mapping COVID-19 are technological achievements that could be shared with Africa.
  • Since the movement of African students to India for higher education has been disrupted, India may expand the e-VidyaBharti (tele-education) project to establish an India-Africa Virtual University.
  • Agriculture and food security can also be a fulcrum for deepening ties. With the locust scourge devastating the Horn of Africa and the pandemic worsening the food crisis, India could ramp up its collaboration in this sector.
  • India could also create a new fund for Africa and adapt its grant-in-aid assistance to reflect the current priorities. This could include support for new investment projects by Indian entrepreneurs especially in the pharmaceutical and healthcare sectors in Africa.
  • Both India and Japan share a common interest in forging a partnership for Africa’s development. The COVID-19 crisis has nudged many countries to engage in new formats. It is time for the Quad Plus, in which the US, India, Japan, and Australia have recently engaged other countries such as the ROK, Vietnam, New Zealand, Israel, and Brazil, to exchange views and propose cooperation with select African countries abutting the Indian Ocean.

Conclusion:

• The Pandemic is leaving a lasting imprint on all domains, including the way India engages with the world.
• In this fast-evolving environment, India has shown the necessary agility and adaptability to effectively respond to emerging challenges, while also cementing its credentials as a responsible and constructive member of the global community.