Amid worries of taxes and price rise, few people would have noticed that the latest Budget has proposed to establish a new public sector (project development) company which will channelise Indian private corporate investment to East Asian countries of Cambodia, Myanmar, Laos and Vietnam (CMLV). Prime Minister Narendra Modi may be stymied on the domestic front, but proposal of this new PSU indicates that he has started laying foundations for achieving his global ambitions. The liaison of foreign policy and private corporations via a government company suggests that the Modi government wishes to evolve a public private partnership (PPP) model in the field of international relations. This new face in diplomacy has become more significant in the light of the prime minister’s recent visit to the island nations of the Indian Ocean.
The Modi government is refreshing India’s diplomatic strategies through the lessons drawn from PM’s global expeditions. In spite of an overwhelming connect with the Indian Diaspora, Modi has not wasted time to comprehend the limits of emotional outreach, in engagements with smaller nations on the globe. The relationship with tiny countries cannot be imbued with the same grandeur as it can be with the superpowers. Ties with junior nations stand on the solid ground of economic dealings and India has to develop a credible and sustainable template for the same. Modi’s initial dialogue with Seychelles, Mauritius and Sri Lanka has come up with special importance for this strategy.
Due to the dominance of Atlantic and Pacific regions, Indian Ocean is not only almost out of the discourse but has become a museum of inert diplomatic experiments over the last 25 years. SAARC countries, home to nearly 1.5 billion people, have not been able to create even a reasonably dynamic structure for dialogue after more than two dozen summits since 1985. It took BIMSTEC-AC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation – established in 1997 under Thailand’s leadership) 17 years to establish a secretariat and the Mekong-Ganga Cooperation, formed in 2000, has not moved beyond a few occasional statements. The Indian Rim Association (formed in 1995), the most ambitious grouping, that includes Australia, India, South Africa and Iran, among 20 others, has also failed to take off.
As the Indian prime minister takes new initiatives in the Indian Ocean region, he cannot deny carrying the baggage of failures in the past. These frustrations do not go into the account of India just because it is the biggest country in the Indian Ocean, but also for the reason that Indian diplomacy does not have a clear blueprint for a relationship with the smaller countries of the Indian Ocean zone and elsewhere as well. Indian diplomacy has not moved beyond scholarships to students, tourism and extending a line of credit to smaller countries while Chinese diplomacy raced ahead, riding piggyback on direct financial investments. With its burgeoning foreign exchange reserves and gigantic government companies, China has influenced the economic interests of many smaller countries in the Indian Ocean region, Africa, and Europe in a decisive fashion.
Modi is looking towards private companies to ensure success of his diplomatic design as India neither has enough firepower in its foreign exchange coffers to invest heavily abroad nor can the Government play an active role in business beyond facilitation. The announcement of a company to promote investment in East Asia was made just before the PM’s Indian Ocean tour and is a firm indicator that the Indian government is willing to take a pillion ride with private companies in its global mission, similar to the way China befriends smaller countries via its massive government corporations.
It is not at all a coincidence that a team of captains of Indian industry had reached Colombo ahead of Modi’s arrival in the city. It was the largest gathering of Indian companies in a small country in the recent past. Modi’s Indian Ocean visit has sufficiently signified that the new found connect of private investment with diplomacy will not be limited to South Asia. He will experiment with the same in the Indian Ocean and a similar effort could be made during his proposed visit to Africa as well.
India’s private companies and the Indian Diaspora are emerging as foundations of Modi’s global outreach. The challenge here is that India’s private companies are not large, credible and powerful enough for taking risks at a global scale. On the other hand, India Diaspora is not wealthy enough to invest in India like the overseas Chinese do in China, nevertheless it is well placed to amplify India’s story to the globe. The prime minister must have realised by now that his global ambitions will need the support of good governance and strong growth at the domestic front, without which neither private companies nor NRIs-PIOs will be sufficiently motivated to act. Modi has been addressing India from foreign platforms since he came to the helm. He will have to address the globe from the Indian podium now, with a firm story of India’s revival under his leadership.
(First published in dailyo.in)