OPINION | India’s Inter-Regional Strategies: Mapping the Conflictual & Cooperative Trends

Has India been able to balance its national and regional priorities with the exigencies of inter-regional cooperation? Do India’s national, regional and inter-regional commitments contradict each other?

By Deepshika Shahi

Has India been able to balance its national and regional priorities with the exigencies of inter-regional cooperation? Do India’s national, regional and inter-regional commitments contradict each other?

OPINION | India’s Inter-Regional Strategies: Mapping the Conflictual & Cooperative Trends

Ambassador Arun Kumar Singh, Deputy Chief at the Indian Embassy in Washington, argues: “In the case of India, conflicts of interest between national and collective priorities are rare(…) What IBSA has been doing by way of South-South cooperation is very much a part of what India has been trying to attempt for decades”. Though this assertion appears somewhat justified in the context of India’s historical solidarity with post-colonial Latin American, African and Asian countries through the NAM (between 1950s and 1980s) and the demand for New International Economic Order (between 1970s and 1980s), currently India’s specific interactions with Latin America and Africa are faced with peculiar challenges and opportunities.

In 2011, the UN Economic Commission on Latin America and the Caribbean (ECLAC) released its first report on India and India-LAC links. The ECLAC report states that: “The region’s trade with India was negligible until the beginning of the past decade. Since then, trade with the Asian country has burgeoned”. Though India has signed a preferential trade agreement with Mercosur (Argentina, Brazil, Paraguay, Uruguay, and Venezuela),80 the Brazil-India connection remains at the centre of Indo-LAC relations. Indian companies have already invested some $1.5 billion in Brazil, and Brazilian companies $600 million in India. Brazil has what India lacks: a large and fertile land mass with abundant water that can significantly increase the production of food. While Brazil is becoming a fossil-fuel energy powerhouse after discovering enormous oil fields off its coast, India imports 70 per cent of its oil needs. On the other hand, India’s IT and IT-enabled services industry have played a major role in India’s outward expansion in Latin America. Tata Consultancy Services (TCS) has established a presence in eight of the larger Latin American countries; Wipro and Evalueserve, among others, are also there.  According to official records, Indian investments in Brazil have increased in recent years, particularly in the field of information technology, biotechnology and pharmaceuticals. The volume of bilateral trade passed $10 billion in 2011-12, a 34 per cent increase over the previous year. According to Deepak Bhojwani, a consultant on Latin America and a former Indian consul general in Sao Paulo, the balance of trade is tilted in India’s favor.

Apart from trade, India and Brazil have the ‘possibility’ to learn from each other’s poverty-alleviation projects—Bolsa Familia in Brazil and Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) in India. India can also learn from Latin American inter-state political processes. As Brazil and Argentina have successfully moved from a position of rivalry and tense relations to a gradual and balanced political and diplomatic proximity, India could draw lessons in order to consolidate peaceful relations with its neighbours, especially Pakistan and China.

Another priority area for India in the twenty-first century is Africa. During the Second India-Africa Forum Summit held at Addis Ababa in 2011, the then Indian Prime Minister, Manmohan Singh, called Africa the “new growth pole” in the world. According to Niranjan Desai, the former High Commissioner to Uganda, Africa is strategically and geopolitically significant for India. The East African seaboard, from the Horn of Africa to South Africa, falls within India’s strategic maritime “neighbourhood”. Therefore, there is a geo-strategic incentive for collaboration between India and Africa to maintain the Indian Ocean as a peaceful zone to encourage trade and enhance mutual security concerns. Besides, Africa is becoming an increasingly important source of oil, minerals and other raw materials for the growing needs of the quickly expanding Indian economy.

India’s partnership with Africa is based on skills-transfer, capacity building and trade and investment at three levels—pan-African (AU), regional (SADC, ECOWAS etc.) and bilateral (South Africa, Egypt, Nigeria, Libya, Kenya etc.). At the Pan-African level, India has promised to cooperate with Africans in the spheres of food processing, integrated textiles, weather forecasting, life and earth sciences, agriculture and rural development. At the regional level, India is helping to establish institutions such as soil, water and tissue testing laboratories, regional farm sciences centers, seed production-cum-demonstration centres and material-testing labs for infrastructure development. At the bilateral level, India and various African countries will jointly establish institutes for English-language training, information technology, entrepreneurship development and vocational training.

Several Indian pharmaceutical and healthcare companies such as Ranbaxy, Cipla, and Emcure, and IT firms like TCS, HCL, NIIT and Aptech have launched operations in Africa. Indian corporate houses like Dabur and Tata Coffee have ventured into the agricultural sector in Africa, while Indian public sector companies like Bharat Heavy Electronics Limited (BHEL)—as well as private sector firms like Tata and Kalpatru Power Lines—are making inroads in power and energy sector across Africa.

Of course many of these projects may, in themselves, be beneficial for the countries involved but there should be no doubt that India’s interests are being well-served by engaging in these strategic sectors, always with an eye on its competition with China. It is no coincidence that India is also part of the land-grab in Africa, acquiring access to huge tracts of land in Cameroon, Ethiopia, Madagascar, Mozambique and Sudan for the purpose of growing food for export back to India. (See Land Chapter for discussion of land grabbing and investment.)

Abdullah Verachia, of Johannesburg-based consultancy Frontier Advisory, says that “India sees South Africa as an investment gateway into the rest of Africa”. On a visit to Mumbai in April 2011, South Africa’s deputy minister of Trade and Industry, Elizabeth Thabethe, said bilateral trade was expected to reach $15 billion by the end of that year, up from an original estimate of 10 billion dollars.88 A high-level international conference, that took place as the first concrete activity following the IBSA-ILO Declaration of Intent signed in November 2010, recognized the progress made by countries of the South in developing solutions to the challenges of poverty and decent work opportunities, in particular, India’s MGNREGA and South Africa’s Expanded Public Works Programme (EPWP).

These opportunities, however, present new challenges. It has been suggested that if the India-Latin America (and the Caribbean) ties are to develop further, the density of their mutual exchanges needs to be increased, and a few trade agreements need to be taken to the next level. This implies institutionalizing them, making them part of the regular agenda of government and the private sector. In a similar vein, India in the Emerging World Order: A status quo power or a revisionist force? The ECLAC report suggests a number of steps, including developing joint strategies for trade and investment promotion; working together on infrastructure; competitiveness and innovation; and launching a series of policy dialogues on inter-regional cooperation. However, it is crucial to ensure that the benefits of the free trade agreements and other joint ventures also become accessible to the lower reaches of their societies. It is also noteworthy that India is not alone in attempting to intensify links with Africa. India faces rivalry from other countries that are vying to develop closer links with Africa—such as China, Brazil, Malaysia, Turkey, Japan, EU and the US. The mutual rivalry between the emerging powers of the South originates from their prioritizing national interests over and above the unified interest of the South.

Of course corporate interests are behind the drive to expand commercial and trade links. Influenced by industry groups such as the Confederation of Indian Industries (a major policy setter for India along with FICCI, etc.) and private business interests, India’s new strategists have ensured that commercial interests are effectively folded into India’s foreign policy and trade and investment strategy more than ever before. However, the intervention of civil society can occasionally challenge the formation of a corporate dominated consensus on Indian foreign policy issues. It is significant to analyze the comparative importance of nationally-based transnational corporations (TNCs) and civil society actors in shaping India’s foreign policy.

About The Author:

Deepshikha Shahi is an Assistant Professor of Political Science at University of Delhi, India. She is a Research Associate with International Democracy Watch, Italy

Publication Details:

This article is an extract from a research paper titled – “India in the Emerging World Order A Status Quo Power or A Revisionist Force?” and is published under Creative Commons License. Download The Paper - LINK
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IndraStra Global: OPINION | India’s Inter-Regional Strategies: Mapping the Conflictual & Cooperative Trends
OPINION | India’s Inter-Regional Strategies: Mapping the Conflictual & Cooperative Trends
Has India been able to balance its national and regional priorities with the exigencies of inter-regional cooperation? Do India’s national, regional and inter-regional commitments contradict each other?
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