India at the Global High Table

Howard & Teresita Schaffer

India has started to come out of its shell to play a larger diplomatic and military role in Asia, just as China has begun flexing its muscles. The once-inward and fiercely non-aligned nation is now growing ever closer to the US and Japan as it reacts to the aggressive rise of China. Ultimately India sees itself as "one of the poles in a multipolar world." Teresita Schaffer and Howard Schaffer, former U.S. ambassadors to countries in South Asia, spoke about India's potential rise at a Los Angeles World Affairs Council Global Café breakfast on Wednesday, May 4th. They also said the high expectations for India's economy were wrong and that there is "Indian nervousness" about China.

"A lot of people have been disappointed that some of the things they hoped Prime Minister Narendra Modi would do have been slow in coming or haven't come yet," said Teresita. On India's economy, she explained that while the hope was for Modi to be a "pro-business guy" who would be a free trader and a free marketer, the reality is he is actually a "pro-Indian trader - there is no reason to assume he is a free trader who is ready to open up their markets to foreign trade." Additionally, his Bharatiya Janata Party (BJP) party are Hindu nationalists who draw on a large base of small traders who are "not very adventurous" when it comes to foreign trade. "Some of the changes that Modi wanted to make have fallen afoul of opinion within his own party." Modi's ability to lead reform has also been hampered by him not having full control of Parliament. While he won a "thumping victory" in the lower house, he does not have the majority in the upper house. And on top of all that, said Howard, there is the deeply-ingrained pace of change in India. "Things in India often move fairly slowly."

An area where Modi has made big strides is in Foreign Policy, according to the Schaffers. Modi has been "expanding relations with the world's largest powers, including the United States which has been India's most important outside relationship for the last 20 years," said Teresita. As outlined in the Schaffer's new book India at the Global High Table, India was focused on two main themes with regards to foreign policy until 1990: the "quest and preservation to maintain dominance" in the immediate region and "non-alignment." It wasn't until after 1990, that a third theme was added to India's foreign policy and that was "building up the economy," paving the way for India's rise on the global stage.

India's role in the world is developing. "India still sees itself as a leader in the world but it's concept of what that means has shifted," said Teresita. It used to mean to "lead by moral voice" and "as a leader of the poor countries." Now India sees itself as being one of the elite - "one of the poles in a multipolar world," she said. India's ambitions have gone beyond being the leader of the poor countries and has outgrown the role of the "shop steward of the developing world."

India's role has changed within the Asia region. "Asia is a tremendously important set of relationships for India," said Teresita. China is now India's biggest trade partner for goods. And yet as the Chinese have tried to freeze India out of a role in South East Asia, Japan and India now have a security dialogue and some joint naval exercises - and at the same time India is also "Linking West" by working more closely with the United States.

LAWAC Global Café breakfast discussion with Teresita & Howard Schaffer

China's recent aggressive stance around its fringes have caused great "nervousness" in India, said Howard. This was exemplified in Delhi's disquiet about a recent decision between China and Pakistan to build a road from western China down through parts of Kashmir that are controlled by Pakistan but claimed by India. The project, estimated at $46 billion, paves the way for China to have strategic access to an Indian Ocean port. India has also watched with concern the moves by China to enhance their presence in Nepal, Bangladesh, Sri Lanka and Pakistan. India knows that they cannot exclude the Chinese, but at the same time they have been exerting a counter-influence on a number of their neighbors to balance the Chinese.

On where India will be in 15 years, Teresita said the biggest single factor will be what happens with India's economy. The result of that, she says, will be partly due to government policy and the series of decisions made on moving industrial services and agriculture ahead. Independent from the government, India's future also lies with productivity in the private sector. Teresita stressed that India's economy is more tied to the global economy than ever. She talked about the auto industry as an example saying that Ford has operations in India that exports as many cars to third countries as they sell domestically. Ford is also designing cars for the local Indian population - cars with really good air conditioning, better shock resistance, and big back seats for the growing number of passengers with drivers. These cars also have a market in Mexico. "While everyone moans and groans about India not inserting itself into the global supply chain," said Teresita, "They have found unexpected ways in."