India’s place in Asia and its future in the world

Can you talk about the diplomatic strategy of India under the Modi administration, which is currently enjoying a high profile as G20 chair and de facto leader of the Global South?

The core of the Indian government’s foreign policy remains the transformation of India’s economy and society. As for the rest, our history, which is often forgotten by the rest of the world, informs many of the decisions we take today. A civilizational state with thousands of years of history, modern India is one of the most heterogeneous, multi-ethnic, multi-religious groups of people governed by one constitution. That all goes toward making India the fairly complex country that it is.

India’s greatest current geopolitical challenge is an aggressive and expansionist China. Traditionally, India has preferred to cleave the middle path, but the world is multipolar, and India can be one of the “poles.”

Why has India not joined other countries in imposing economic sanctions against Russia?

After India held its first nuclear weapons tests in 1974, it came under Western sanctions on technology for decades. During that time, the USSR, and then Russia, was helpful in the development of India’s technology sector—nuclear power, defense, etc. India has reduced its defense dependency on Russia from around 70 to 50 percent, but it’s still huge.

For the last 70 years we’ve had a continuous conflict situation with Pakistan, and a border dispute with China, which has intensified recently. Although it doesn’t take from the fact that India has been very disturbed by Russia’s actions in Ukraine, the narrative of the war is a little more complex than it is made out to be, and India has to consider its defense interests.

After war broke out, India was offered Russian crude oil at discounted prices and decided not to turn it down. The country’s energy inflation would have been economically and politically unbearable, and India’s oil purchases from Russia actually helped to stabilize global energy prices.

How does India’s border dispute with China impact economic relations?

For a long time, India and China operated on the understanding that their larger relationship could be insulated from the border dispute. Not anymore. India doesn’t allow China to be an investor in any of its critical sectors, and came to the conclusion that China was using its apps and technologies to mine critical data about India’s citizens.

During the pandemic, we realized how dependent we were on China for some pharmaceutical ingredients. So, we have been diversifying our value chains, and Japan has been a key partner in that process.

In terms of the Quad, India seems to differ from the other three countries in its thinking on cooperation. What is the Modi administration’s view of the “Free and Open Indo-Pacific”?

I think there is some misperception there. Firstly, India has never been part of any military alliances, believing them to be Cold War constructs. Secondly, we believe the Quad is the most consequential grouping for the future of the world because these are four countries that can sit together across a table and make decisions on what I call the ‘rules of the road.’

The future of international relations will be determined by technology, access to technology, and the rules that govern technology. That is the core of what the Quad is doing together, not what kind of military exercises we are going to have.

Then Japanese Prime Minister ABE Shinzo spoke of “the Confluence of the Two Seas” during his first visit to the Indian parliament in 2007, and that became the Free and Open Indo-Pacific, which India has been a believer in forever.

What are India’s economic security policy priorities and how will they affect foreign investment?

We have not been too much of a manufacturing power, historically. But in the last five years, we have changed considerably. Laws have become simpler and infrastructure is almost transformed. We have tried to position ourselves as one of the destinations for a China+1 strategy.

The government has rolled out a production-linked incentive strategy to cover 14 manufacturing sectors to which India wants to attract investment to protect its economic security. Apple, for example, is now making many of its iPhones in India. Diversifying value chains and building resilient supply chains is extremely important to India and to the Quad.

What is the outlook for India-Japan diplomatic relations?

I think that the India-Japan relationship stands for something much, much bigger than just a shared geopolitical challenge. We are two Asian powers at two different stages; Japan’s demographics are in many ways a challenge, while we have a young population, which is an advantage.

We are both technologically advanced countries. Indians have a view of Japan that is nearly 100 percent positive. I see us as civilizational cousins. I think the India-Japan relationship has still only partly fulfilled half of its potential.