G20 summit announced India’s arrival on global stage; path ahead will need more diplomatic dexterity, relentless focus

The G20 — a summit of 20 largest economies featuring more than 80 per cent of global GDP, 75 per cent of international trade and 60 per cent of the world population — saw its agenda in Bali, Indonesia, almost getting derailed due to the deep division among member states caused by the war in Ukraine. The fact that a joint statement was finally hammered out owes in no small measure to the role played by India.

Western nations were adamant that a strong condemnation of Russia’s invasion of Ukraine be built into the outcome document while Russia was against “politicisation” of the summit, denouncing what it called the West’s “hybrid war”. Hosts Indonesia was left pleading for collaboration.

Days of wrangling leading to the Bali summit made positions even more entrenched. With Beijing coming out against explicit rebuke of Moscow, it seemed G20 would fail for the first time since its inception to issue a joint statement.

It is here that India played a crucial part. Led by suggestions from Prime Minister Narendra Modi, the Indian delegation played the mediator and managed to achieve consensus among warring camps on the wording of the draft communique. By Monday the diplomats had arrived at a negotiated settlement.

The Bali Declaration, issued at the conclusion of the summit on Wednesday, rejected the “use or threat of use of nuclear weapons” and stated: “The peaceful resolution of conflicts, efforts to address crises, as well as diplomacy and dialogue, are vital. Today’s era must not be of war.”

The final sentence echoes Modi’s remonstrations with Putin in September at Samarkand on the sidelines of the SCO summit. The deft framing may be seen both as a criticism of Russia’s actions and a general statement against the futility of war. The sense is ambiguous. India is a master at the craft.

The fact that India’s stated position on an unfolding and contentious topic was formally adopted at a global forum of the world’s most powerful leaders demonstrates that New Delhi is increasingly being seen as a serious player on the global stage. As a leading power, India is a voice of the global south, yet it is equally at ease among the great powers and enjoys a degree of acceptability among different poles in the chessboard of geopolitics.

In fact, the joint statement itself is indicative of India’s geopolitical clout and augurs well for a polarised world torn between a war in Europe and rising tensions among two superpowers. The summit in Indonesia and India’s upcoming G20 presidency may be assessed in time as epochal moments that mark the recognition of India from an opportunistic swing state to an emerging great power that is surefooted, comfortable with its rising prowess and knows how to pull its weight.

Even so, diplomatic manoeuvres, however adroit, are not enough to raise a country’s global profile unless backed by hard power. As it always does for rising powers, India’s growing clout in global politics is underwritten by its economic trajectory. India is already the world’s fifth-largest economy, the third-highest military spender after the United States and China, and by next year, will become the world’s most populous nation.

A country’s national composite power is commensurate with its population size and wealth. Given that India is poised to comfortably outperform the global economy, New Delhi’s rise as a geo-economic player of some consequence should not be surprising.

According to an assessment by economists at Morgan Stanley, as published in Financial Times, “India will be the third-largest economy by 2027, with its GDP more than doubling from the current $3.4 trillion to $8.5 trillion over the next 10 years. Incrementally, India will add more than $400 billion to its GDP every year, a scale that is only surpassed by the US and China.” It is projected that India’s “market capitalisation will rise from $3.4 trillion to $11 trillion by 2032, the third largest globally.”

In comparison, economists believe 2023 could be a catastrophic year for developed economies. According to Bloomberg, the “base case for global growth in 2023 is 2.4 per cent. A deeper energy crunch in Europe, an earlier and more painful recession in the US, or more pandemic restrictions and an uncontrolled slide in real estate in China could conspire to make even that uninspiring number unattainable.” This projection assumes a mean of 0.7 per cent growth for the US, -0.1 per cent negative growth for Europe and 5.7 per cent for China with a caveat that “things can always go worse”.

Economists at Barclays paint an even bleaker scenario. The brokerage firm warns that 2023 could be “one of the weakest in four decades with advanced economies likely heading into a recession.” That includes the US, where the projection is a longer recession in 2023 than expected, UK and Euro zone slipping into a recession from this year itself, and China scraping a 3.8 per cent growth. The firm forecasts global growth at 1.7 per cent, compared to September’s forecast of 2.2 per cent. When it comes to India, Barclays says it should be “one of the biggest contributors to world growth next year” and projects a more than 5 per cent growth year-on-year.

These estimates are echoed by the IMF, which reckons that in an atmosphere of global economic slowdown, India is the “relative bright spot”.

IMF warns of rising inflation across the world and while retail inflation is cooling in India it is on upward curve elsewhere. Britain is suffering from its worst inflation in 41 years with annual rate touching 11.1 per cent in October on back of soaring energy prices. US is doing better, but prices are rising in Europe with Germany clocking in a rate of 11.6 per cent in the 12 months through October.

India’s macroeconomic fundamental are strong, financial sector is stable and a post-pandemic India has used its resources judiciously instead of recklessly spending away to stimulate demand. A confluence of these factors, juxtaposed with downturn in global economy, makes India the destination for multinationals and global investors. Morgan Stanley reckons “India is entering a phase where incomes will be compounding at a fast rate on a high base.”

This is where things get interesting. Let’s consider a scenario that American political scientist JJ Mearsheimer discusses in Foreign Affairs. According to professor Mearsheimer, “China now has four times as many people as the United States and is about 70 per cent as wealthy. If China’s economy continues growing at an impressive rate of around five per cent annually, it will eventually have more latent power than the US.” He predicts that with all that “latent power, Beijing could build a military that is much more powerful” than America’s.

Given the pace of China’s military advancement, this is not an unreasonable projection.

Now let’s consider the fact that India is set to overcome China in terms of population by next year, and is on course to remain the fastest-growing major economy. It is likely that India will convert all that latent power into military power (because that’s what rich and populous countries do, says Mearsheimer) and may become considerably stronger in coming decades.

Add to this the fact that while India’s GDP lags China’s by approximately 15 years, India scores on demographic dividend. While China’s population is dwindling and working-age graph is poised to become alarmingly low, India’s “working-age population is still growing, which suggests that it will have a longer growth runway”, according to economists at Morgan Stanley. It wouldn’t be wise to bet against India.

The rise of a nation depends not just on diplomatic dexterity and economic power. The external environment also plays a crucial role. Mearsheimer, a scholar of realism, reckons that China’s extraordinary rise wouldn’t have been possible if bipartisan Washington hadn’t pursued a policy of engagement and helped China grow richer and eventually become a peer competitor of the US. Mearsheimer calls it “the worst strategic blunder.”

The US is evidently trying hard to reverse that blunder. Successive administrations in Washington have identified China as America’s “pacing challenge”. Biden’s National Security Strategy calls China “the only competitor with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.”

Accordingly, the US is trying to slow down, if not contain China’s rise. The Biden administration has hit China with sweeping export controls on advanced semiconductors and chipmaking equipment to restrict Beijing’s technological advancement. The move may severely complicate China’s ability to develop fabrication capabilities and cutting-edge military applications and hamper Beijing’s aim of becoming the world’s foremost military power.

And the world’s biggest superpower has simultaneously struck a close strategic partnership with India — a fellow democracy and a dominant power in Indo-Pacific that stands up to China’s might. India has emerged as the cornerstone of America’s Indo-Pacific strategy and a key player in maintaining the balance of power in a region increasingly threatened by China’s territorial aggrandizement and promotion of ‘might is right’ rule.

For instance, just as world leaders were schmoozing in Bali for the G20 summit, Australia, India, Japan, and the United States were engaged in Malabar maritime exercises in the Philippine Sea, off the coast of Japan, focused on sharpening interoperability and tactical skills between the four navies. The maritime exercises between the four Quad nations, that never fails to make China uncomfortable, concluded on Tuesday.

In its effort to shift the global supply chain away from China — which Washington sees as a mighty authoritarian threat to the liberal international order — the US is betting on India and integrating the partnership across the full gamut of sectors including climate, connectivity, critical and emerging technologies, security, defence, counterterrorism, trade, among others.

US treasury secretary Janet Yellen, Biden’s top economic diplomat, was recently in India to promote what the US calls “friend-shoring” — reducing supply chain vulnerabilities by linking it with trusted partners and allies. During her stay in India, Yellen said: “The US is pursuing an approach called ‘friend-shoring’ to diversify away from countries that present geopolitical and security risks to our supply chain… To do so, we are proactively deepening economic integration with trusted trading partners like India.”

As it squeezes China’s ambitious semiconductor industry, the US is helping India address its semiconductor supply chain challenges to boost India’s capacity building.

The US is financing the development of a thin-film solar-cell manufacturing facility in India, seeking to cooperate in other sectors even though trade remains a significant point of friction and flagship US companies such as Apple are gradually switching manufacturing from China to India.

In short, even as India moves up the power ladder, the world’s top superpower is actively facilitating its rise. India has hit a sweet geopolitical spot. This window won’t last forever, but till it does, it presents India with a tremendous opportunity to leverage its partnerships through multi-aligned and issue-based engagements. It also calls for non-doctrinaire policymaking that shuns status-quoism and has a degree of appetite for risk-taking.

As the high priest of India’s foreign policy, S Jaishankar, says, this means “great realism” in foreign policy. At the 4th Ramnath Goenka Lecture in 2019, the external affairs minister laid out what could be termed as India’s grand strategy.

“India needs to follow an approach of working with multiple partners on different agendas. Obviously, they would each have their importance and priority. But Sabka Saath, Sabka Vikas, Sabka Vishwas is today as relevant in foreign policy. It is the nations who have an optimal mix of capabilities, relationships and positioning who can aspire to occupy the multiple poles of the emerging international order. And it is the confidence of being able to forge ahead in this looser architecture that can inspire us to emerge as a leading power in the future.”

As the G20 summit showed, India has the capability to act as a bridge between rival poles while pursuing an ultra-realist foreign policy. It allows India to maximise options and expand policy space, engage with multiple players without allowing one to veto India’s relationship with another. This, as strategic commentator C Raja Mohan points out in Indian Express, had not always been the case. He gives the credit to Modi government.

“Under previous governments, Delhi was often tempted to limit its relationship with the US and Europe for fear of offending the sensitivities of Moscow and Beijing. This was done either in the name of ideology or the fear that there will be unpleasant consequences in relations with Russia and China. The Modi government has broken out of that defensive and deferential mindset. Putting national interests above political correctness has given much strategic dividend for Delhi.”

India’s position on buying energy from Russia or voting against Moscow at the UN while staying within the orbit of America’s close strategic partnership offers a recent case in point. Despite being under considerable Western pressure from the start, India never balked. The US and its allies in Europe weren’t happy but they eventually came around to accepting India’s stance.

Washington, that had dispatched then deputy national security adviser Daleep Singh to India in April to warn New Delhi of “consequences” over buying of Russian oil, changed its tune a few days later. Standing beside EAM Jaishankar at a presser post 2+2 dialogue in Washington, US secretary of state Antony Blinken said, “India has to make its own decisions about how it approaches this challenge”, while admitting that “India’s relationship with Russia has developed over decades at a time when the US was not able to be a partner to India.”

Answering a leading question from media on how the US can dissuade India from making energy purchases from Russia and whether Washington is considering slapping CAATSA sanctions on India, Blinken added instead that “today we are able and willing to be a partner of choice with India across virtually every realm – commerce, technology, education, and security.”

A month later in Japan for the Quad leaders’ in-person summit, Biden, seated beside Modi, praised India’s vaccination efforts and said, “I am committed to make the US-India partnership among the closest we have on earth.”

Jaishankar’s visit to Moscow for his fifth meeting this year with Russian counterpart Sergei Lavrov overlapped with Yellen’s arrival in India for talks, among other things, on price-capping Russian oil. From a 2 per cent market share pre-Ukraine war, Russia has become India’s top oil supplier, surpassing Iraq and Saudi Arabia. On being asked about further purchases, Jaishankar said that “the India-Russia relationship has worked to our advantage… and I would like to keep that going.” In New Delhi, Yellen said the US is happy for India to India to buy as much Russian oil as it wants outside the capping mechanism.

If the US has taken a lenient view of India’s energy purchases from Russia — that obviously interferes with western sanctions aimed at punishing Putin — that isn’t due to strategic altruism. It is borne more out of a hard-headed calculation that a partner crucial to its Indo-Pacific strategy — should not be alienated over a crisis in the European theatre. Alignment of larger and more pressing interests between two strategic partners has trumped inevitable divergences.

India, similarly, has taken great care in not letting its ties with Russia spoil its partnership with the US and key European allies. As Raja Mohan writes, “India’s new diplomacy is not about doing whatever you like or saying what you please. It is about a careful judgement of the shifting global correlation of forces and the skill to adapt to the dynamic international environment.”

So far, India has played its cards right and worked great power rivalries to its advantage. It is, however, a high risk-reward manouvre and calls for relentless focus and dexterity. If, as Jaishankar says, India manages to juggle several balls in the air at the same time without dropping any, the path to India’s rise as a credible geopolitical player and a great power would be facilitated.

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Sreemoy Talukdar