Indian Council of World Affairs

It is a privilege to participate in the flagship programme of the Hungarian Diplomatic Academy. I would like to thank the President of the Academy Dr. Orsolya Pacsay Tomassich for inviting me to speak today. As a retired diplomat  and now the Director General of the Indian Council of World Affairs, an autonomous think tank declared as an Institute of National importance by the Parliament of India, my views would be from the perspective of  experiences  of a diplomat  and now an analyst.

My talk is structured  in three segments

1. A perspective on global developments
2. Mega trends
3. India’s Foreign Policy approaches

As diplomats soon to be taking charge as Heads of Missions you will be dealing with multiple issues and at a time when global geo-politics and geo economics are in a flux.

I began my career as a  diplomat  in the mid-1980 when technology, as compared to current levels, was still at a dwarf stage – it was a  world of only fax machines, VCRs and computers just entering work spaces. Global politics was, of course, complex. Cold war was dominant, but it was beginning to weaken-  the withdrawal of Soviet Union from Afghanistan, the fall of Berlin Wall  were historical events. Thereafter, with the collapse of the Soviet Union, it was a new phase in geo-politics. The world  technically entered the Post-Cold War period and a unipolar world with the United States as the dominant power.

The 1990s was a period for globalization, marked by economic liberalization, technological advancements, and increased cross-border flows of trade, investment, and information. These developments set the stage for shaping an interconnected world.  There were  efforts to work collectively on several issues.  In 1992, at the Rio Summit on Sustainable Development, Agenda 21 was agreed upon and the UN Framework Convention on Climate Change  was signed. And then there were other UN special conferences – like the World Summit for Social Development, and World Conference on Women, etc. The creation of WTO on 1 January 1995 marked the biggest reform of international trade since the end of the Second World War.

We entered the 21^st century faced with the Y2K challenge which was threatening to disrupt the functioning of a technologically dependent world, as there were fears, whether the algorithm  coding could seamlessly transit from 1999 to 2000. The  global effort undertaken by governments, businesses, and technology professionals to identify and fix the Y2K bug, also known as the “Millennium Bug”, succeeded.  A technological hump was overcome and  the 21^st century was smoothly ushered in technologically speaking.

Within a year of that achievement, on September 11, 2001, a series of coordinated terrorist attacks, carried out by the terrorist group al-Qaeda in the US, shook the world –hijacked aircrafts were used to hit targets.  In response, the global fight against terrorism was launched with Operation Enduring Freedom led by the US and supported by a coalition of Allies. NATO too participated in Afghanistan as ISAF- International Security Assistance Force. India, of course,  had been fighting, often single-handedly, cross-border terrorism since the mid-1980s when there were terrorist strikes   in our cities – Mumbai,  Delhi, on our Parliament and  attacks against our security forces. Terrorism, till date remains a threat to the security and safety of nations. The fight against it must continue as today, terrorist groups have multiplied and the areas in which they operate have broadened in Asia, Middle East, Africa and Europe.   

The  first decade of  this century,  saw the "Global Financial Crisis," of  2008 that originated in the United States and had significant repercussions worldwide. It was one of the most severe financial downturns since the Great Depression of the 1930s. It exposed the vulnerabilities in the global financial system and led to a re-evaluation of financial practices, along with efforts to strengthen regulations to prevent similar crises in the future. It was under the shadow of the 2008 international financial and banking crisis that the first G20 Summit was held. Today, with the global economy again in a difficult spot, the role of G-20 becomes even more critical for economic stability. India, as the current  Chair of  G-20, is focussing on Inclusive & Resilient Growth, Green Development and Climate Finance; Accelerated progress on SDGs; Technological Transformation & Digital Public Infrastructure; Multilateral Institutions for the 21st century; and Women-led development. Developing countries have been the hardest hit by the volatility, uncertainty and instability in the global economy and, India in its G-20 priorities will focus on the issues of the Global South - This brings me to two major destabilising events of our times – COVID-19 and the Ukraine conflict.

The twin impact of these two crises has been devastating. The immediate effect of the coronavirus pandemic was a sudden and an abrupt disruption of trade, business, travel, supply chains and manufacturing. To enable the health care systems  to meet the huge and unexpected requirements to combat the pandemic, there was an enormous diversion of financial resources by every country to its health sector. The conflict in Ukraine came as a compounding setback to economies causing food, fertiliser and energy insecurity with raised fears of inflation, public debt and recession. The shock generated by  these events will shape the future  global architecture, to a large extent.

Let me now come to, what I see as  four Mega trends being witnessed today, which   may need to be taken into account by countries and diplomats in the formulation of their foreign policies.

First - Multipolar world, Multilateralism and Regionalism:  International relations are built on narratives. There are those who are flagging the possibilities of Cold-War 2.0 or a global confrontation that could be World-War III.  There are others who see the world in a stage of transformation where the post-World-War II order will be challenged and a new order will emerge. While nothing is beyond the realm of possibility,  and as diplomats you would need to deal with the world as it shapes, I  would subscribe to the view  that global power structure is shifting towards multipolarity, with multiple centres of economic and political influence. The post-Cold war unipolar moment seems to have passed emerging powers like India, Brazil, and Indonesia, are gaining prominence.  These powers are asserting their presence and are pursuing partnerships that align with their geopolitical, economic, and security interests. As new powers rise in the new emerging world order, there will be re-assessment by countries of their foreign policy strategies, priorities and partnerships and resultantly, there will be realignments with new alliances, partnerships, groupings and divisions.

Take the example of China. With its economic clout, global foot print and its aggressive policies, China  is positioning itself as the  challenger to the supremacy of United States. This contestation is being played out in different geographical areas in Taiwan, South China Sea,  East China Sea, South Pacific Island nations; contestation for influence in different parts of the world – Asia , Africa and I would also say Latin America.  In  the technological space  the rivalry  ranges from security platforms to push-back against use of telecom equipment, and on-going Chip War.  

India, as the world’s largest democracy,  the fifth largest economy and one of the fastest growing major economies, an innovative society with the world’s third largest start-up ecosystem and an IT leader-with an impressive public digital infrastructure is in a leading pole position as a regional and as a global player. It  is today influencing global narratives on many issues like connectivity and maritime security, resilient and reliable supply chains, data and cyber-security and terrorism. It is taking positions for example, on issues like the concerns of Global South, as I mentioned earlier. It  is a voice that has weight. It is a country that will readily meet  any threat to its security or its  interests. In April-May 2020, China made an attempt to unilaterally change status quo along the border in violation of bilateral agreements and  this  has cast a shadow on the bilateral relations. India has made it clear to the Chinese side that peace and tranquility in border areas is essential for the two countries to have normal ties, and that the state of the border will determine the future of the bilateral ties which must be based on mutual trust, mutual concern and mutual sensitivity. 

Now, a  multi-polar world will necessitate a revamped global governance structure. UN bodies in particular UN Security Council,  and  Bretton Woods Institutions continue to reflect a bygone era. Their decision-making structures remain frozen in time. These institutions need to reform to cope with  emerging challenges. The delay in  undertaking the  reforms of global institutions is resulting in a trend towards forging regional arrangements. Regional blocs and agreements, such as RCEP and CPTPP, African Continent Free Trade Agreement have gained prominence as countries seek to deepen economic ties within their geographic proximity, outside of the WTO framework. Even as the regional trends continue, there are stresses within the regional blocs.  I will give two examples.

The EU expansion after the Cold War brought many countries of Central and East Europe into the European fold. This has lent both vigour and diversity to the European project but the expansion means more voices, concerns and priorities. Europe today faces major challenges such as energy insecurity, inflation, economic revival and migration. By raising the issue of its EU membership in exchange for ratifying Sweden’s NATO membership at the just concluded NATO summit, Ankara has raised fresh challenges for the EU. This has brought focus back to the question over Turkey’s accession to EU, negotiations for which are frozen currently. NATO’s expansion has been a major grievance raised by Russia on several occasions. Months before launching the attack on Ukraine in February 2022, Moscow had sought security guarantees from NATO and non-inclusion of Ukraine in it.  How Europe and NATO deal with these issues will determine the future of European regional architecture.

Looking at the other regional blocks for example ASEAN, several countries like India emphasise the centrality of ASEAN in any regional architect in the Indo-Pacific. However, questions remain about its unity and ability to collectively take positions. We have seen this in ASEAN negotiations with China on the  Code of Conduct in South China Sea- long delays and often differing  positions  taken by ASEAN Member States.  On Myanmar, ASEAN was entrusted to take a lead in finding a solution but progress so far has been rather limited. My point is that  regionalism is important but yet these groupings too will be subjected to pressures of accommodating varying national interests.  This will be the challenge.

The second  mega trend is a de-accelerated or  a revised globalisation. The century began with globalization in full force. Global capital flowed into markets where it found opportunities, and manufacturing supply chains were integrated across geographies. It almost became the norm for consumer products across several categories that the raw material would be sourced from one country or continent, processed in another, constituent parts made in a third, assembled in a fourth, and sold world over. While globalization went ahead unhindered for one section of the world, another larger segment was almost untouched by its benefits and was in fact disadvantaged by the fallouts of globalization. 

Now there is a re-evaluation of global supply chains, and increased scrutiny of foreign investments and technology transfer. There is discomfort with relying on a single country  or economic over-concentration in it. There is a process of de-risking and de-coupling underway in an era of competitive geopolitics. A number of global companies are making choices which are through a geopolitical lens. After COVID, there is a search in the world for more reliable supply chains, more resilient supply chains, more dependable supply chains. There are  questions and fears in the minds of investors about the sudden imposition of sanctions and freezing of their assets in other countries. These doubts are arising  due to the  unprecedented economic sanctions imposed by western nations on Russia.  The weaponization of the international payments systems is pushing countries to use national currencies to settle payments. Brazil will use yuan for its trade with China, Saudi Arabia will use yuan for settlement of its oil payments with China.  India has signed up with 18 countries  for use of Indian rupees in bilateral trade. Are we moving towards de-dollarization of the global economy? What are the implications of this?

The third mega trend is regarding security issues and new emerging technologies. Traditional threats whether warfare or operations by terrorists will get more sophisticated and lethal  with the advancement of technology and weapon systems.  Today there is misuse of social media platforms for information warfare cyber-attacks on critical infrastructure, dark web continues to be used by terrorists, criminals for all illegal activities.  Yet there is no clarity about  how and who will set up governance structures  for  these  and other emerging technologies like Artificial Intelligence, quantum computing, space.  These are still open questions.  Even where there are agreed rules , there has been over a gradual dilution and dismantling. Take  the international arms control architecture, painstakingly built over decades in the 20^th century is today challenged. A related development is the increase in global defence expenditure, which signals a world moving more in the direction of greater weaponization. Even if it is argued that this may lead to deterrence, it cannot be denied that we will need strong guardrails for avoiding conflicts due to miscalculation or mis-communication. Building avenues of dialogues will be more required in the future than ever before. So, diplomats would need to skilled  in that.

The fourth mega trend which will shape geo-politics is climate change and migration.  It may be questioned why these have been clubbed together. The adverse impacts of climate change are evident.  Global commitments that were made  for  climate mitigation and adaption  have not been fulfilled  but countries are understanding the huge risks and damage that climate change will bring.  India has shown leadership in putting out initiatives like LiFE – life style for environment at the individual levels, global initiatives like International Solar Alliance while committing to attain the goal of net zero emissions by 2070. There is emphasis on  circular economies that is zero waste economies- and new greener sources of energy like green hydrogen. Even with all these actions we will still need to deal with issues like rising temperatures and the melting of glaciers which could open the Arctic shipping route. But the rising sea levels will increase the vulnerabilities of island countries – what if a SIDS country sinks – where does its population re-locate?   

Europe has been dealing with migration which have largely been either economic migrants or those moving from conflict zones.  The question is how to deal with climate migrants?

We also need to understand migration from another perspective which is of demographic changes. It is undeniable that there are aging population in several countries including in Europe and there is a need to look at planned migration.  In this context, India with its demographic dividends and skilled human resources has been concluding migration and mobility partnership agreements with countries including those in Europe.  Hence approach to migration would need such  new pathways to deal to  have regular planned migration.

These being the mega trends, I would like to focus on India’s approaches to global developments and its core interests.

Firstly, India conducts its foreign policy on certain fundamental principles. The first being respect for sovereignty and territorial integrity of States; non-interference in internal affairs i.e. UN Charter, commitment to peace and solidarity with the Global South.

Secondly, India has and will pursue an independent foreign policy of strategic autonomy based on its own interests and values. Both its domestic and external priorities are based on its national interest, without being constrained in any manner by any other Nation State. Others do not and cannot have a veto on India’s choices and decisions. While India has stayed away from alliance structures, it has a web of mutually beneficial relationships and partnerships, across the world on the basis of mutual trust and co-operation. 

Thirdly, India is civilizational State and its civilizational ethos of Vasudhaiva Kutumbakam -    whole world is one family – permeates its thinking.  Thus, in its engagement with the outside world, India willingly shares, even during crisis, its  knowledge and its  resources with others nations for the good of humanity. During Covid 19, India gave vaccines to almost 100 countries. It has shared Yoga with the world as also its system of traditional medicines of Ayurveda.

India’s civilizational influence is evident in South East Asia and beyond   where there are ancient Hindu and Buddhist temples and, in the Gulf, where till not very long ago, Indian rupee was the currency use. These linkages gives India an advantage as its engages with its proximate regions.

So, how does all this translate into India’s foreign policy choices. India’s first priority is its immediate periphery.  Though located in a difficult neighbourhood with a complex security environment, India through its Neighbourhood First Policy has built close relations with most of its neighbours, on the basis of non-reciprocity and goodwill. India has a proven record of being the first responder and even as a net security provider in its immediate neighbourhood. Sri Lanka in its economic distress witnessed India support of a US $ 4 billion package.

The next set of priorities is its policies in its three extended neighborhoods.  India’s Act East policy in Southeast Asia and East Asia, its Extended Neighbourhood concept in Central Asia and its Think West in the Gulf. With countries located in these three regions, on the basis of its historical and cultural connections, India has   built   wide-ranging relations. Going beyond, India has deep relations with the European Union and several of its members countries, including Hungary,  as well as strategic ties with both the US and Russia. The partnership with Africa has been put on a visibly higher footing. India is increasing its footprint in the Latin American region with several Ministerial and official visits in the last few years.

India is also increasingly engaging in group formats with ASEAN, Central Asia, BIMSTEC, Africa, EU, Nordic countries, CELAC, Pacific Islands, Caribbean countries There is  a perceptible widening of India’s partnerships through arrangements like Quad, IPEF and 12U2 which have taken shape recently adding to the scope and possibilities of collaboration with member countries globally.

Another aspect that determines, India’s foreign policy choices is that being a sub-continent, with a long coastline it has extensive maritime interests.  India has defined its maritime interests in the Indo-Pacific space from the East Coast of Africa to the West shores of the Americas.  The vision in the Indo-Pacific region enunciated by Prime Minister Modi is one of Security and Growth for All. This requires adherence to international law, including UNCLOS to ensure freedom of navigation and unimpeded flow of lawful commerce along the sea lanes of communications. A safe, stable and secure maritime domain and a rule-based order is critical for nations, like India, which are dependent on these oceans for their trade flows and economic growth.

India has made achievements in several fields. Let me mention, the growth of its IT sector and digital platforms. India has built the world’s most extensive digital public information infrastructure. Over 1.3 billion Indians have a unique digital identity. Unified Payments Interface (UPI) has transformed the financial payment landscape in India and India is now fostering cross-border interoperability of payments. Presently, India’s Fintech markets is amongst the fastest growing in the world, estimated to grow to $150 Billion by 2025. Digital India Stack is the global benchmark for most countries and provides a competitive advantage for growing businesses. India is willing to share its expertise with partner nations. India, at the same time, seeks technology partnerships with a host of countries to build its capacities in this and other fields. As we speak, India is preparing to launch its third Mission to the Moon named Chandrayaan 3.  Space is another sector in which India has made exceptional progress.

Coming to Europe there is one point, I would like to mention, which is of often forgotten  is the contribution of India even prior to its own Independence to Europe’s freedom. Nearly one million Indian soldiers in the First World War and two million in the Second   World War  helped secure peace in Europe at critical moments. India’s c contribution to European and global security  made at that time needs to be  seen, in the current context,  as a desire  of India to see a stable Europe.

I point this out to emphasize that India has special ties with Europe and that India seeks to grow this partnership. India has advocated that the conflict in Ukraine must end. This is not an era of war and diplomacy is the way out.   The recent statement of your PM - PM Orban urging peace over weapons in Ukraine is important, in this context. 

Let me end by recognizing that diplomats today have to navigate a very complex environment and deal with several challenges as they   secure their own countries interests. It will mean constantly making choices about strategies and partnerships. I am confident that Hungarian diplomats will choose India as their trusted and reliable partner country.  

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