FOREIGN POLICY OF INDIA FROM 1992 to

2010

SUBJECT – POLITICAL SCIENCE

SUBMITTED TO :– SUBMITTED BY:-

Dr. S. P. SINGH GAURAV ROLL NO.- 733 SEMESTER – II SESSION – 2012-17

ACKNOWLEDGEMENT

I owe loads of thanks to those great people who helped and supported me during writing of this project.

I would like to thank my mentor and teacher Dr. S. P. Singh who has been a my Guide in making of this project right from the very beginning . He has been correcting various project related documents with utmost attention and care. He has taken the pain to go through the project and make necessary corrections as and when needed. He has also guided to make of this project in a systematic and planned manner. Without his support this project would have been a distant reality.

I would also like to thank my dear friend Devagya Jha who helped me at various instance in making of this project.

I express my thanks to Vice-Chancellor of Chanakya National Law University for extending his support.

I would express my deep sense of gratitude to our Librarian for his immense support and appreciation of my work.

I would also like to thank my Institution and my faculty members without whom this project would have been a distant reality. I also express a heart-felt thanks to my family members and my well wishers.

GAURAV 2nd semester

2012-17

TABLE OF CONTENTS

1. Introduction__________________________________________________ 5

2. Historical background__________________________________________ 7

3. International relations ______________________________________________ 14

4. Conclusion___________________________________________________ 19

5. Bibliography__________________________________________________ 20

INTRODUCTIONWhat is Foreign Policy?

The hardest question for a student like me to answer is, “What is it that you actually do?”

The simple answer is that we implement the country’s foreign policy. Which invariably

invites the question, “What is foreign policy?” Perhaps the simplest definition of foreign

policy is that it is the attempt by a state to maximize its national interest in the external or

international environment. Even this simple definition suggests some of the complexity of

this attempt. The definition assumes a commonly agreed definition of the national interest

in the country. This is not always true.

Secondly, foreign policy is an ends and means problem, a problem of achieving certain

national goals with the limited means available. Unlike domestic policy, the attempt to

attain one’s goals has to be made in an environment which is largely outside of one’s own

control.

Thirdly, and again unlike domestic policy, this attempt is made in competition with other

states who are seeking the same goals for themselves, sometimes at your expense. For

instance, if any one state in the international system attains absolute security for itself,

there would be absolute insecurity for every other state in the world. So merely maximizing

one’s own interest competitively will not suffice. One needs to include some measure of

cooperation, or at least of alliance building or working together. Of the two basic goals of

the state, security and prosperity, one, security, is often presented as a zero sum game. The

other, prosperity, requires states to cooperate with each other. Both goals can therefore

pull one’s foreign policy in opposite directions. And this competition and cooperation with

other states to maximize one’s own interests takes place in a perpetually changing external

environment and while the states themselves gain and lose relative and absolute power. As

they change, states change or modify their definitions of national interest. Even the

domestic mainsprings of external policy shift. Some factors that one expects to remain

constant undergo change. History is redefined continuously by all political systems. And

immutable facts of geography are made less or more relevant by advances in technology

and ideology. This is why attempts to analyze foreign policy require the use of dynamic

concepts like the balance of power, game theory, and such like. It is in the analysis and

working of these changes that the opportunities, threats and joys of diplomacy and foreign

policy lie. My generation has been fortunate in having lived through the fastest ever period

of change in India’s history. For a diplomat, it has been an amazing transformation of India,

its place in the world, and the foreign policy that we can now aspire to practice. Let us look

at the Indian foreign policy experience.

The Beginnings

There have been diplomats and diplomacy since time immemorial. By some accounts

Hanuman was our first Ambassador to Sri Lanka and Krishna one of our first known envoys.

But foreign policy as it is now understood is a function of the modern state system. One can

therefore legitimately speak of late medieval Indian foreign policy. But just when the

modern Westphalian state system, based on the nation state, came into existence in the

eighteenth century, India was losing the attributes of sovereignty and her capacity for an

independent foreign policy. So long as India was not an independent actor on the world

stage, imperial British interests prevailed over Indian interests. When strong personalities

like Curzon tried to assert what they saw as Indian interests, as he did in 1904 by sending

Younghusband on his Tibetan expedition, London rapidly reined him in, forcing him to give

up his gains in the Chumbi valley and Tibet in order to preserve the overall British interest in

keeping China on her side against the Russians. So, while the Government of India had a

Foreign and Political Department from 1834 onwards, its primary functions were to deal

with the Indian princes, (as representative of the paramount power), and to handle British-

Indian commercial and mercantile interests in the Gulf and the immediate neighbourhood

of India. The unintended benefit from this absence of an indigenous foreign policy tradition

became apparent when the freedom movement began to think of national issues. As early

as 1927 it was possible for Jawaharlal Nehru to start describing a purely Indian view of the

world. In July 1938, when it was highly unfashionable to do so, he was speaking of both

fascism and imperialism in the same breath, refusing to choose between them, and to start

saying what India’s foreign policy would be. By January 1947, these thoughts had coalesced

in a letter to KPS Menon into a doctrine, non-alignment, which seemed best designed to

meet independent India’s needs in the bipolar world she found herself in. Nehru said:

“Our general policy is to avoid entanglement in power politics and not to join any group of

powers as against any other group. The two leading groups today are the Russian bloc and

the Anglo-American bloc. We must be friends to both and yet not join either. Both America

and Russia are extraordinarily suspicious of each other as well as of other countries. This

makes our path difficult and we may well be suspected by each of leaning towards the other.

This cannot be helped.”

At Independence

When India became independent in 1947, our economy had not

grown for over fifty years, while population was growing at over 3% a year. The average

Indian could expect to live for 26 years, and only 14% of Indians could read. What had once

been one of the richest, most advanced and industrialized nations in the world had been

reduced by two centuries of colonialism into one of the poorest and most backward

countries, deindustrialized and stagnant. From accounting along with China for 2/3 rd of

world industrial production in 1750, by 1947 India’s share of world industrial product was

negligible. It was therefore natural and clear that the primary purpose of independent

India’s foreign policy was to enable the domestic transformation of India from a poor and

backward society into one which could offer its people their basic needs and an opportunity

to achieve their potential. And this had to be attempted in the Cold War world, divided

between two heavily armed and hostile camps, each led by a superpower, and each saying

that if you were not with them you was against them. It took courage and vision to choose,

as Nehru and the leadership did then, not to join either camp and to opt for non-alignment,

to retain the choice to judge each issue on its merits and on how it affected India’s interests

rather than those of an alliance or its leaders. Having fought so hard for our freedom, we

were not ready to abdicate our independence of judgment to others. India’s immediate

foreign policy objectives in 1947 were therefore a peaceful environment, strategic space

and autonomy, free of entanglement in Cold War conflicts or alliances, while we

concentrated on our domestic tasks of integration and nation building. Non-alignment, as

this policy came to be called was the ability to judge issues on their merits and their effect

on India’s interests or, as our first Prime Minister Nehru used to say, ‘enlightened self-

interest’. Indian nationalism has not been based on a shared language or common religion

or ethnic identity. As we sought to build a plural, democratic, secular and tolerant society of

our own, it was natural that we would look for and promote the same values abroad.

HISTORICAL BACKGROUND

1950-1971

Non-alignment as a policy was a practical and strategic choice, but

was soon put to the test by the alliances. It was denounced by John Foster Dulles as

immoral, and Stalin had strong words to say about it too. Our neighbours were rapidly

enrolled in the competing alliance systems – China by the Soviet Union and Pakistan by the

US.Our attempt was to enlarge the area of peace, of those states willing to coexist

peacefully despite ideological and other differences, enabling us to concentrate on our own

development. Hence the very early summoning of the Asian Relations Conference in New

Delhi in March 1947, our activism at the Bandung Afro-Asian conference, our reliance on the

UN, and the institutionalization of the Non-Aligned movement in the sixties. Throughout this

early period, our means were limited, our goals were primarily domestic, and our

aspirations were local. The foreign policy challenges that we faced, such as having a border

with China for the first

time in our history after China moved into Tibet, could not be addressed with any tools

other than diplomacy because of the simple fact that we had no others. Our primary focus

was domestic, and at no stage in this period did we spend more than 3% of our GDP on

defence. It was this desire to escape external distractions that accounts for some of the

tactical choices in handling issues like the India-China boundary, resulting in the short but

sharp and salutary conflict of 1962.

Our preoccupations were with the consequences of Partition and the uniquely complicated

birth of the independent Indian state. The J&K issue itself, which was with us from the birth

of the Republic of India, was one consequence of that birth. One of our first tasks was also

to compress into a few years what history takes centuries to do for most other states –

agreeing and settling boundaries with our neighbours. In a major diplomatic achievement,

we agreed all our land boundaries except those with China (and between Pakistan and our

state of J&K) within thirty years. We have also agreed all our maritime boundaries except for

those with Pakistan in Sir Creek and Bangladesh.

1971-1991

By the early seventies, the steady development of India, (which even at 3.5% p.a. was faster

than that achieved by Britain for most of her industrial revolution), had created capacities

and relative strengths that were dramatically revealed in the 1971 war. The liberation of

Bangladesh was equally liberation for India. For the first time in centuries, India had on her

own and without relying on external imperial power crafted a political outcome in our

neighborhood, despite the opposition of a superpower and a large and militarized neighbor.

That we could do so was also tribute to Mrs. Indira Gandhi’s political skills and willingness to

take risks. The diplomatic task was primarily to hold the ring internationally by winning over

public opinion for a just cause and averting actions by others which would prevent us from

assisting the birth of Bangladesh. Soon thereafter, in 1974 India tested a nuclear explosive

device, in what was described as a peaceful nuclear explosion (PNE). The world led by the

Nuclear Weapon States reacted by forming a nuclear cartel, the Nuclear Suppliers Group

(NSG), and by cutting off nuclear cooperation with India unless she agreed to forego a

nuclear weapons programme and put all her nuclear facilities under international

safeguards to guarantee that commitment. As the nuclear weapon states were not willing to

do the same themselves, we refused to do so, suffering the consequences of technology

denial regimes for our growth and development. But at that stage we lacked the relative

power or capability to do more than to suffer in silence while keeping our options open.

(This in itself was more than most other states managed).

FOREIGN POLICY OF INDIA1991-2010

The true realization of our foreign policy potential had to wait for the end of the bipolar

world in 1989 and our economic reform policies, opening up the Indian economy to the

world. Historically speaking, India has been most prosperous and stable when she has been

most connected with the rest of the world.

In many ways, the period after 1991 has been the most favourable to our quest to develop

India. The post-Cold War external environment of globalizing world, without rival political

alliances, gave India the opportunity to improve relations with all the major powers. The risk

of a direct conflict between two or more major powers had also diminished due to the

interdependence created by globalization. And the strength of capital and trade flows was

directly beneficial to emerging economies like India, China and others. We saw the evolving

situation as one in which there is an opportunity for India. The consistent objective of our

foreign policy was and remains poverty eradication and rapid and inclusive economic

development. If we are to eradicate mass poverty by 2020, we need to keep growing our

economy at 8-10% each year. This requires a peaceful and supportive global environment in

general and a peaceful periphery in particular. The period since 1991 has therefore seen a

much more active Indian engagement with the neighbours, whether through repeated

attempts by successive governments to improve relations with Pakistan, or the border

related CBMs with China, or free trade agreements with neighbours starting with Sri Lanka

in 1998, or the Ganga Waters Treaty with Bangladesh.

The period since 1991 has been a period of remarkable change in the scale of our ambitions,

and in our capacity to seek to achieve them. The international situation made possible the

rapid development of our relationships with each of the major powers. Equally important

was

another necessary condition which gave India space to work in: India’s rapid economic and

social transformation. As a result of twenty five years of 6% growth and our reforms since

1991, India is today in a position to engage with the world in an unprecedented manner.

Our engagement with the global economy is growing rapidly, with trade in goods and

services now exceeding US$ 330 billion. Our needs from the world have changed, as has our

capability. India can do and consider things that we could not do or consider twenty years

ago. This is reflected in how India perceives its own future, its ties with its neighbourhood

and its approach to the larger international order. The contrast between the world’s

reaction to the 1974 and 1998 nuclear tests is instructive. And finally in 2008 we were able

not only to break out of our nuclear isolation but to rewrite the rules in our favour by

working with others to enable the NSG decision permitting international civil nuclear

cooperation with India.

Today’s World

Today, however, it seems that we may be on the cusp of another change in the nature of

the world situation. Looking at the world from India, it often seems that we are witness to

the collapse of the Westphalian state system and redistribution in the global balance of

power leading to the rise of major new powers and forces. The twin processes of the world

economic crisis and economic inter-dependence have resulted in a situation where Cold

War concepts like containment have very little relevance and where no power is insulated

from global developments. The interdependence brought about by globalization imposes

limits beyond which tensions among the major powers are unlikely to escalate. But equally,

no one power can hope to solve issues by itself, no matter how powerful it is. What seems

likely, and is in fact happening in Iraq, Afghanistan and elsewhere, is that major powers

come together to form coalitions to deal with issues where they have a convergence of

interests, despite differences on other issues or in broader approach. In other words, what

we see is the emergence of a global order marked by the preponderance of several major

powers, with minimal likelihood of direct conflict amongst these powers, but where both

cooperation and competition among them are intense. The result is a de-hyphenation of

relationships with each other, of each major power engaging with and competing with all

the others, in a situation that might perhaps be described as “general un-alignment”.

Paradoxically, some of the same forces of globalization – the evolution of technology, the

mobility of capital and so on – which have led to the decline or collapse of the Westphalian

state order are also theBsource of our greatest dangers. Our major threats today are from

non-state actors, from trans-boundary effects of the collapse of the state system, or, at

least, of its inadequacy.(Paradoxically, the doctrine of absolute sovereignty created by the

strong European states and rulers in earlier centuries is now the last defence of the weak

against the strong.)

Looking ahead, the real factors of risk that threaten systemic stability Bcome from larger,

global issues like terrorism, energy security and environmental and climate change. With

globalization and the spread of technology, threats have also globalized and now span

borders. These are issues that will impact directly on India’s ability to grow and expand our

strategic autonomy. It is also obvious that no single country can deal with these issues

alone. They require global solutions.

International Terrorism

Among these global threats, international terrorism remains a major threat to peace and

stability. We in India have directly suffered the consequences of the linkages and

relationships among terrorist organizations, support structures and funding mechanisms,

centered upon our immediate neighborhood, and transcending national borders. Any

compromise with such forces, howsoever pragmatic or opportune it might appear

momentarily, only encourages the forces responsible for terrorism. Large areas abutting

India to the west have seen the collapse of state structures and the absence of governance

or the writ of the state, with the emergence of multiple centres of power. The results, in the

form of terrorism, extremism and radicalism are felt by us all in India.

Energy Security

As for energy security, this is one issue which combines an ethical challenge to all societies

with an opportunity to provide for the energy so necessary for development. For India,

clean, convenient and affordable energy is a critical necessity if we are to improve the lives

of our people.

Today, India’s per-capita energy consumption is less than a third of the global average. (Our

per capita consumption is only 500 kg as compared to a global average of nearly 1800 kgs).

For India a rapid increase in energy use per capita is imperative to realize our national

development goals. Global warming and climate change require all societies to work

together. While the major responsibility for the accumulation of greenhouse gasses in the

atmosphere lies with the developed countries, its adverse effects are felt most severely by

developing countries like India.

When we speak of ‘shared responsibility’, it must include the international community’s

shared responsibility to ensure the right to development of the developing countries.

Development is the best form of adaptation to climate change. What we seek is equitable

burden-sharing. We have made it clear that India will not exceed the average of per capita

GHG emissions by the industrialized countries, as we continue to pursue the growth and

development that our people need. Also, the transfer and access to clean technologies by

developing countries, as global public goods on the lines of what was done for retroviral to

fight AIDS, is essential to effectively limit future GHG emissions. The IPR regime should

include collaborative R&D and the sharing of the resulting IPRs.

The Future

I have tried to show you how great the change and flux in India’s foreign policy has been

within my own lifetime. In 1948, waving expansively at a map of the world, Nehru exclaimed

to a young Indian Foreign Service officer, “We will have forty missions around the world!”

Today we have one hundred and sixteen Embassies abroad.

If our foreign policy experience teaches us one thing it is that change is inevitable and rapid.

There is hardly an international boundary between two states that is where it was two

hundred years ago. The speed of the rise of China and India in the last quarter of the

twentieth century is proof of the rapidity of change. Since the balance of power is relative,

small shifts have exaggerated effects on the international system. India’s foreign policy

today no longer deals only with existential threats to our security or with subsistence issues.

Today our future will be determined by how effectively we adapt to change, and how we

deal with cross-cutting global issues, with questions of energy security, water, low carbon

growth, technology issues and so on. An open rule-based trading system is in our interest

now that we have sizeable equities in international trade. We have moved from statements

alone to working for and crafting desirable outcomes.

After several centuries, once again the state is not the sole or necessarily the predominant

actor in the international system. In some cases, like technology, for instance, it is

businesses and individuals who now determine the future, and it is these units that a

successful foreign

Policy must now increasingly deal with. If we are to deal with this new world and new

issues, it is essential that we begin to develop our own culture and tradition of strategic

thought. So long as India’s situation and needs are unique, it becomes essential that we

develop our own strategic culture, vocabulary and doctrine. Fortunately for us, there is no

isolationist streak in our strategic thought so far. As I have said before, India’s best periods

in history have been when we were most connected to the world. Ironically, the greater our

capabilities, the more we need the world and are integrated into it. So if anything, the joys

and challenges of Indian foreign policy will only grow with time.

Foreign Policy Evolution

During the Cold War, India’s post-independence foreign policy reflected its strong affinity

with socialist ideology. This was seen by India’s refusal to join South East Asia Treaty

Organisation (SEATO) and the Baghdad Pact, its membership in the Non-Aligned

Movement, formed in 1961; and its willingness to court the Soviet Union as a counterweight

to the West, by signing the Indo-Soviet Treaty of Friendship and Cooperation in August

1971. India also strongly advocated the Indian Ocean Zone of Peace, which was purportedly

designed to limit Cold War rivalry in the Indian Ocean. The collapse of the Soviet Union led

India to re-evaluate and realign its economic foreign policy to one that gradually embraced

capitalism. This resulted in India’s greater integration into the global economy, with a

foreign policy geared towards tangible and pragmatic interests that resulted from the

rapidly changing post-Cold War geopolitical environment. India’s foreign policy initiatives to

court the West were based not only on the need to liberalise its economy and benefit from

Western investment, but also a need to counterbalance the rise of China, especially in South

Asia.

The end of the Cold War also led to a degree of introspection among Indian foreign

policymakers and strategists, which spurred a longstanding aspiration to see India emerge

as a great power in global affairs. Such aims have also produced increasingly louder calls by

India for a seat as a permanent member of the UN Security Council. Since last year, that aim

has received Western endorsement.

Among India’s first major foreign policy initiatives in the aftermath of the Cold War was its

1992 ‘Look East’ policy, designed to enhance India’s relations with the Southeast Asian

region and Japan. As a result, India was accepted as a sectoral dialogue partner of the

Association of Southeast Asian Nations (ASEAN) in 1992, a full dialogue partner in 1996, an

ASEAN summit level partner in 2002, and, in 2005, a member of the East Asia Summit.

The implications of the 9/11 attacks against the US, have bolstered India’s utility as an

important ally to the West in combating Islamist terrorism, which also poses a threat to

India’s interests. India has thus benefited from intelligence sharing, technology transfers,

military cooperation and exercises, all of which have been highly beneficial to India’s

defence and security interests. Yet, at the same time 9/11 terrorist attacks against the US

caused problems for India by reinvigorating the US-Pakistan relationship.

As a reflection of its rising international profile, India is now an influential participant in a

number of other regional forums, such as: the Bay of Bengal Initiative for Multisectoral

Technical and Economic Cooperation (BIMSTEC), G-4, G-15, G-20, G-24, G-77, India Brazil

South Forum (IBSA), Indian Ocean Region-Association for Regional Cooperation (IOR-ARC),

Shanghai Cooperation Organisation (SCO), and the South Asian Association for Regional

Cooperation (SAARC).

More recently, in 2008, India founded two multilateral dialogue forums, namely the Indian

Ocean Naval Symposium and the India Africa Forum, which have served to further extend

and consolidate India’s influence throughout the Indian Ocean Region. Similarly, India has

significantly enhanced its profile in the region and has signed defence cooperation

agreements and a number of bilateral naval access agreements, including joint

training/military exercises, with countries on the Indian Ocean littoral.

Today, a central theme of India’s foreign policy is to secure a permanent seat on the UN

Security Council. To this end, India is trying hard to win the confidence and support of the

developing world, as seen in March this year when it hosted a summit of the 48 least-

developed countries in the world.

India-China Relations

Since the end of the Cold War India’s relations with China, although strained, have shown

signs of improvement. For example, the India-China Expert Group was set up in 1995, to

examine ways to enhance relations; this was later followed by the Agreement on

Confidence Building Measures. Such initiatives provided the foundation for a further

strengthening of relations in 2003, when India officially recognised Tibet as part of China,

and in 2004, when China, in turn, recognised Sikkim as part of India.

In 2005, India supported the admission of China to granted observer status in SAARC; but it

has been less enthusiastic in its support for the idea of granting China a permanent seat.

Similarly, 2006 provided another fruitful undertaking, when both countries agreed to

reopen the Nathula Pass in the Himalayas, which had been closed since the 1962 border

war. Also in 2006, India and China signed a cooperative agreement to engage in joint bids

for energy projects.

In the area of trade and investment China is poised to become India’s largest trading

partner. Two-way trade surpassed US$10 billion in 2004, reached an estimated US$36

billion in 2007 and US$60 billion in 2010. Since then both countries have announced plans

to further increase bilateral trade to US$100 billion. Trade relations were further

consolidated when, at the invitation of Prime Minister Manmohan Singh, Chinese Premier

Wen Jiabao visited India in late 2010, accompanied by a delegation of 400 Chinese

businessmen. Following this visit, in April 2011, China and India agreed to recommence

defence cooperation and military exercises.

Although strategic tensions remain, India has considerable incentive to expand relations and

cooperation with China. There is an obvious benefit for India’s economic growth through

enhanced trade and investment. Strengthening and stabilising relations with China, also

offers India greater leverage in diffusing Pakistan’s influence with China. Simultaneously, it

also enables India to maintain amicable relations and to prevent complications over the

headwaters of India’s major river systems, such as the Brahmaputra and Ganges, most of

which emanate from Chinese-controlled regions in the Himalayas.

India’s relations with the West

In the aftermath of the Cold War, India’s relations with the US have drastically changed from

adversarial and mutually suspicious, to a relationship of significant and growing

cooperation. In the wake of the 9/11 attacks on the US, India’s utility as an ally grew

exponentially; both as a bulwark against Islamist terrorism and a counterweight to China.

Such an opening was eagerly exploited by India, which remains keen to acquire strategic and

economic benefits from the West.

Closer cooperation, commenced with the Next Steps in Strategic Partnership, signed by both

countries in 2004; since then more initiatives have followed. Salient examples include: the

signing of a nuclear cooperation agreement in 2005, the signing of the 123 Agreement for

peaceful nuclear cooperation in 2007, India-US Climate Dialogue, US-India Strategic

Dialogue, US-India Trade Policy Forum, US-India Economic Dialogue and CEO Forum, US-

India Energy Dialogue, Trade Policy Forum, India-US Knowledge Initiative on Agriculture, and

a Bilateral Investment Treaty. These cooperation initiatives were further strengthened by US

President Barack Obama’s visit to India in 2010, which led to relations being further

consolidated by the signing of more defence and trade agreements.

India has benefited significantly from enhanced relations with the US. The relationship has

provided much needed leverage to enhance its regional and global profile. It has also served

as a useful way for India to counterbalance China and Pakistan, assisted in strengthening its

economic growth, and improved defence cooperation, including intelligence sharing and

transfers of technology.As a result of normalising relations with the US, India has benefited

significantly from a lucrative relationship with the European Union (EU), which is presently

India’s largest trading partner. Two-way trade has expanded considerably from €28.6 billion

in 2003, to over €55 billion in 2007, and plans are afoot to substantially increase this figure

to €100 billion in the next five years. Since 2005, several joint initiatives have been

streamlined, such as the EU-India Joint Action Plan, the Trade and Investment Development

Programme and the annual EU-India Summit. As a result of such cooperation, India has

attached significant importance to its relationship with the EU, from which it derives

benefits from defence cooperation, transfers of technology, intelligence sharing, and as a

means of leveraging its strategic and economic interests throughout the world.

India-Russia relations

Since India attained independence, it has maintained amicable relations with Russia and has

moved to upgrade relations significantly in the aftermath of the Cold War. Since the turn of

the century, bilateral relations have taken on a new importance, with India and Russia both

seeking to benefit from expanded ties and cooperation in trade and investment. The two

countries have shared opportunities in mining and the oil and gas industries, technology

transfers and defence cooperation, to counterbalance pressure on India from China,

Pakistan and the US. In 2000, India and Russia signed the Declaration on Strategic

Partnership, which has since provided the benchmark for the further expansion of ties.

Following this, India obtained the Ayna Air Base in Tajikistan, which is jointly operated by

Russia and India.

Since 2004, India and Russia have signed three agreements on space cooperation, including

joint exploration of the moon. Trade has increased markedly over the last few years; from

US$3 billion in 2006-07 it has now grown to almost US$10 billion. Given that India is the

second largest market for Russian arms, the two countries have established an Inter-

Governmental Commission on Military-Technical Cooperation, co-chaired by their Defence

Ministers. In 2007, both countries announced the formation of the India-Russia Forum on

Trade and Investment. The following year, they signed an agreement to build civilian nuclear

reactors in India. The India Russia Inter-Governmental Commission on Trade, Economic,

Scientific, Technological and Cultural Cooperation was also established, to enhance relations

in all spheres. In March 2010, Russia and India signed an additional 19 agreements on

civilian nuclear energy, space and military cooperation.

Russia is also strategically important to India as an access corridor from Iran to the Arctic

and Eastern Europe, where India is seeking to exploit economic opportunities and extract

energy reserves through established transport and energy corridors. This led India, Russia

and Iran to sign the North-South Transport Corridor Agreement in 2002, which is designed

to reduce the time and cost of transporting goods between India, Russia and Europe.

Similarly, for nearly a decade the Central Asian region has been the epicentre of geopolitical

competition, involving all the world’s major powers. They are all seeking access to the

region’s abundant natural resources, particularly its reserves of oil, gas and uranium. The

importance of Central Asia to India is primarily due to this fact, but also because India is

seeking to compete with, and counterbalance initiatives by China and Pakistan in the region.

India has a vested interest in ensuring that radical Islamist movements, such as the Taliban,

are marginalised.

Africa and the Middle East

The Middle East is strategically important to India as a major supplier of energy. It is also a

significant export market for India, and a region that employs over 3 million Indian

expatriates. In 2007, the annual remittances by Indians employed in the Middle East, was

estimated at US$20 billion. Promoting regional stability and security, especially in the sea

lanes, has been a major Indian goal, as seen by the recently signed bilateral defence

agreements with Qatar and Oman. Reportedly, India is also interested in setting up a deep

sea gas pipeline connecting Qatar to India, via Oman.

Africa’s importance to India has grown markedly in the last decade. Two-way trade with

Africa reached US$46 billion in 2010, and there are plans to increase this further to US$70

billion by 2014. Presently, up to 2 million people make up the Indian diaspora in Africa,

which is a vestige from the British colonial era. The driving force behind India’s interest in

Africa lies primarily in energy security, food security, the search for new markets, and

strategic influence. Indian energy companies have significant operations in Nigeria, Egypt,

Sudan, and more recently, India has set up embassies in Niger and Malawi to examine

possibilities for mining uranium.

To facilitate its interests in Africa, the India-Africa Forum was set up in 2008, and in June this

year held its second summit in Ethiopia. Pledges were made to provide US$5 billion in credit

to African nations, including US$700 million for new institutions and training programmes.

As a consequence of India’s rise, South Africa and India, whose bilateral trade has increased

from US$4 billion in 2005-2006, to nearly US$12 billion in 2010, have shown serious interest

in developing strategic ties.

India-South America

India increasingly views South America’s natural resources as key to its economic growth

and trade has rapidly expanded over the last five years. Currently two-way trade between

India and South America amounts to over US$25 billion annually, and is projected to grow

even further in the years ahead.

India and Brazil have formed a bilateral Trade Monitoring Mechanism for periodic

consultations. Bilateral trade reached an unprecedented figure of US $7.7 billion in 2010.

India’s main imports from Brazil are: crude oil, copper sulphates, soya oil, wheat and other

minerals such as copper and their concentrates. Similarly, trade between India and

Argentina stood at US$2.5 billion in 2010. For instance, thirteen Indian companies have

established operations in Argentina. One Indian mining company, Indo Borax Chemicals Ltd,

acquired a Borax mine in Argentina in 2009 and is planning to acquire bigger mines. Reliance

has formed a joint venture with an Argentine oil company, Pluspetrol (the consortium

includes Westwood of Australia), and they have won a concession in Peru for oil exploration

and production.

India’s trade with Bolivia remains very low, but recently India has shown greater interest. On

18 July 2007 Jindal Steel and Power Ltd (JSPL) signed an agreement with the Bolivian

Government on the Mutun Iron Ore Project. The company has invested about US$2.1 billion

in the project, which contains the world’s largest iron ore deposits at 40 billion tonnes of

ore. Aptly, India-Chile trade has increased from US$1.8 billion in 2010. Both countries are

currently negotiating a Comprehensive Economic Partnership Agreement to further

augment cooperation. India’s imports from Chile are predominantly copper, molybdenum,

fish and almonds.

Bilateral trade between India and Columbia has grown from US$545 million in 2008 to

US$979 million in 2010. At least two Indian energy firms are currently operating in

Colombia, namely ONGC Videsh Ltd and Reliance Industries. This led India to sign an

agreement in 2008 to engage in exploration for hydrocarbons. Two-way trade between

India and Peru stands at US$410 million. The two countries are planning to start

negotiations for a Free Trade Agreement next year. Lastly, in Uruguay, India’s Zamin

Resources has commenced an iron ore mining project. The total cost of the project is over a

billion US dollars. A consortium of Indian vegetable oil companies is exploring opportunities

for investment in soya farms.

Globalization

The human society around the world,

over a period of time, has established

greater contact, but the pace has

increased rapidly since the mid

1980’s.The term globalization means

international integration. It includes an

array of social, political and economic

changes. Unimaginable progress in modes of communications, transportation and computer

technology have given the process a new lease of life.

The world is more interdependent now than ever before .Multinational companies

manufacture products across many countries and sell to consumers across the globe.

Money, technology and raw materials have broken the International barriers. Not only

products and finances, but also ideas and cultures have breached the national boundaries.

Laws, economies and social movements have become international in nature and not only

the Globalization of the Economy but also the Globalization of Politics, Culture and Law is

the order of the day. The formation of General Agreement on Tariffs and Trade (GATT),

International Monetary Fund and the concept of free trade has boosted globalization.

Globalization in India

In early 1990s the Indian economy had witnessed dramatic policy changes. The idea behind

the new economic model known as Liberalization, Privatization and Globalization in India

(LPG), was to make the Indian economy one of the fastest growing economies in the world.

An array of reforms was initiated with regard to industrial, trade and social sector to make

the economy more competitive. The economic changes initiated have had a dramatic effect

on the overall growth of the economy. It also heralded the integration of the Indian

economy into the global economy. The Indian economy was in major crisis in 1991 when

foreign currency reserves went down to $1 billion and inflation was as high as 17%. Fiscal

deficit was also high and NRI's were not interested in investing in India. Then the following

measures were taken to liberalize and globalize the economy.

Steps Taken to Globalize Indian Economy

Some of the steps taken to liberalize and globalize our economy were:

1. Devaluation: To solve the balance of payment problem Indian currency were devaluated

by 18 to 19%.

2. Disinvestment: To make the LPG model smooth many of the public sectors were sold to

the private sector.

3. Allowing Foreign Direct Investment (FDI): FDI was allowed in a wide range of sectors

such as Insurance (26%), defense industries (26%) etc.

4. NRI Scheme: The facilities which were available to foreign investors were also given to

NRI's.

Merits and Demerits of Globalization

The Merits of Globalization are as follows:

There is an International market for companies and for consumers there is a wider

range of products to choose from.

Increase in flow of investments from developed countries to developing countries,

which can be used for economic reconstruction.

Greater and faster flow of information between countries and greater cultural

interaction has helped to overcome cultural barriers.

Technological development has resulted in reverse brain drain in developing

countries.

The Demerits of Globalization are as follows:

The outsourcing of jobs to developing countries has resulted in loss of jobs in

developed countries.

There is a greater threat of spread of communicable diseases.

There is an underlying threat of multinational corporations with immense power

ruling the globe.

For smaller developing nations at the receiving end, it could indirectly lead to a

subtle form of colonization.

Summary

India gained highly from the LPG model as its GDP increased to 9.7% in 2007-2008. In

respect of market capitalization, India ranks fourth in the world. But even after globalization,

condition of agriculture has not improved. The share of agriculture in the GDP is only 17%.

The number of landless families has increased and farmers are still committing suicide. But

seeing the positive effects of globalization, it can be said that very soon India will overcome

these hurdles too and march strongly on its path of development.

ECONOMIC LIBERALISATION IN INDIA

Economic liberalization of India means the process of opening up of the Indian

ecomony to trade and investment with the rest of the world. Till 1991 India had

a import protection policy wherein trade with the rest of the world was limited

to exports. Foriegn invetment was very difficult to come into India due to a

bureaucratic framework. After the start of the economic liberalization, India

started getting huge capital inflows and it has emerged as the 2nd fastest

growing country in the world.

2. Introduction of Liberalization in India The Pre-liberalization Era – Prior to 1991 The Post Liberalization Era -- The Present Era. Why Did it Start…….???? In 1991, India Faced a “Balance of Payments Crisis”. It had to Pledge its Gold to Foreign Countries. It was a deal with The IMF. Then PM of India, P V Narsimha Rao Knew that It was time for Some Bold Decision.

3. History of Liberalization in India-: July 1991,India has taken a series of measures to structure the economy and improve the BOP The new economic policy introduced changes in several areas. The policy have salient feature which are-:1) Liberalization (internal and external)2) Extending Privatization3) Globalization of the economyWhich are known as “LPG”. (liberalization privatization globalization)

4. Economic Liberalization in India It means the process of opening up of the Indian economy to tradeand investment with the rest of the world. It means that opening the Door for doing Business to all over theworld. Till 1991 India had a import protection policy wherein trade with therest of the world was limited to exports. Foreign investment was very difficult to come into India due to abureaucratic framework. After the start of the economic liberalization, India started gettinghuge capital inflows and it has emerged as the 2nd fastest growingcountry in the world.

5. The Policies of Liberalization Included the Following…………………………………... Opening the Gate for International Trade and Investment. Deregulation. (The removal of government controls from an industryor sector, to allow for a free and efficient marketplace). Initiation of Privatization. Tax Reforms. Inflation Controlling Measure.

6. Impact of Liberalization on Indian Economy-: Increase in Employment. Arrival of New Technology or Development of Technology. Development of Infrastructure. Identity at World Level. Increase Our Currency Value (INR). GDP Growth. Increase Consumption and Adaptation of New Lifestyle. Increment of Competition. Increment in Foreign Investor.

7. Advantages of liberalization Development of economy without capital investment. Increase the foreign investment. Increase the foreign exchange reserve. Increase in consumption and Control over price. Reduction in dependence on external commercial borrowings

8. Disadvantages of Liberalization Loss to domestic units. Increase dependence on foreign nations.

9. Privatization-: Privatization means transfer of ownership and/or management of an enterprise from the public sector to the private sector . Privatization is opening up of an industry that has been reserved for public sector to the private sector. Privatization means replacing government monopolies with the competitive pressures of the marketplace to encourage efficiency, quality and innovation in the delivery of goods and services.

10. Globalization-: It Means that opening up of the economy for foreign direct investment by liberalizing the rules and regulations and by creating favourable socio-economicand political climate for global business. Opening and planning to expand business throughout the world. Buying and selling goods and services from/to any countries in the world

DEMOCRATISATION OF INDIA’S FOREIGN POLICY

On March 21, 2012 India voted in favour of a resolution at the UN Human Rights Council calling for Sri Lanka to conduct an independent and credible investigation into alleged war

crimes. The UN believes that as many as 40,000 people may have been killed in the final stages of a bloody, 26-year civil war, which ended in 2009 with the defeat of the LTTE (Liberation Tigers of the Tamil Eelam, more commonly known as the Tamil Tigers). A report released by the UN in 2011issued a damning indictment of the Sri Lankan government’s actions during the conflict and called on Colombo to “issue a public, formal acknowledgment of its role in and responsibility for extensive civilian casualties in the final stages of the war.”India’s vote against Sri Lanka comes days after the Dravida Munnetra Kazhagam (DMK) party withdrew from a coalition led by the ruling United Progressive Alliance government. Although it is historically rare for foreign policy issues to dominate the domestic political discourse in India, this convention has increasingly been challenged in recent years. Though foreign policy was long the preserve of the prime minister’s office and to a lesser degree the External Affairs Ministry, it is becoming decentralized, as seen in India’s vote against Sri Lanka.There is a public perception that foreign policy is elitist, which stems from the belief that issues pertaining to foreign powers are too remote to matter in the day-to-day lives of ordinary people. For much of India’s history, that may well have been the case.

The policies of Jawaharlal Nehru, India’s first prime minister and one of the main proponents of the principle of non-alignment – a doctrine that defined Indian foreign policy during much of the Cold War – went unquestioned for decades. However, the end of the Cold War and collapse of the Soviet Union forced India to question many of the ideals underpinning Nehru’s non-alignment philosophy, as New Delhi was forced to confront a multi-polar world.Yet, despite the contours of a globalizing world, Indian foreign policy making remained largely confined to New Delhi. The executive’s authority on foreign matters remained a constant during the 1990s and well into the new millennium. This might explain the astonishing level of consensus seen in Indian foreign policy throughout that time, irrespective of the stance of the ruling party or coalition at a given time, particularly since 1991.

India’s relationship with Israel is a case in point. Every Indian government since 1992, irrespective of its political creed, has engaged with both Washington and Tel Aviv. Foreign policy has consistently been one of the few areas where strong political consensus has cut across party lines.However, the era when governments could make crucial foreign policy decisions without public debate may well be over. For one, along with the rise of India’s international profile is the growing influence of an increasingly educated and influential middle class with a global perspective. Then there is the ever-growing Indian diaspora – most notably in the U.S., UK, Canada and the Persian Gulf – which sends billions of dollars in foreign remittances to India.

Electoral vote-banks or not, these two groups are becoming constituencies that no Indian government can ignore.India’s fragmented politics and the era of coalition governments has also ensured the decentralization of foreign policy making. Politicians must increasingly sell foreign policy to the masses. The Congress Party, heading the UPA government, had to cloak a landmark civil nuclear cooperation agreement signed between India and the U.S. in 2008 as a roti, kapda, makan (bread, clothes and housing) issue – which would help provide electricity to powerless Indian villages. For his part, Omar Abdullah, now the chief minister of Jammu and Kashmir, delivered a stirring speech in 2008 to the Indian parliament, seeking to dispel the notion that the India-U.S. nuclear deal was directed against Muslims.“I see no reason why I, as a Muslim, have to fear a deal between India and the United States of America,”Abdullah said. “This is a deal between two countries. It is a deal between, we hope, two countries that in the future will be two equals.”There was more to come. Addressing the speaker of the Lok Sabha, India’s lower house of parliament during a no-confidence motion against the UPA government, Abdullah added, “Sir, the enemies of Indian Muslims are not the Americans, and the enemies of the Indian Muslims are not ‘deals’ like this. The enemies of Indian Muslims are the same enemies that all the poor people of India face – poverty and hunger, unemployment, lack of development and the absence of a voice.”For the poor, those enemies are unlikely to be vanquished any time soon. But a more open policymaking process seems at least a step in the right direction.

CONCLUSION

In conclusion, it is clear that India’s modern foreign policy has evolved to meet the variety of

challenges and aspirations that continue to dominate its national agenda. For instance, this

is exemplified by the growing requirement to secure the energy reserves needed to fuel its

economic growth, while food and water scarcity is also having an impact. This can be seen in

Africa and to a smaller extent in Southeast Asia and South America, where Indian companies

are acquiring arable land to engage in agriculture and food production. Furthermore, to

achieve its great power aspirations India is also seeking to encourage countries throughout

the world to support its bid for a permanent seat on the UN Security Council, by using soft

power to enhance its relations with countries throughout the world. India is also heavily

active in bilateral and multilateral forums of regional and global significance. This would

suggest that India’s foreign policy has been designed to provide it with greater options and

flexibility, both nationally to deal with internal challenges and internationally to enhance its

regional and global influence.

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