Dissonance between India's Identity and the Liberal Order

The deep imprint that foreign domination has left on the Indian worldview cannot be discounted even today. Moreover, Indian policymakers understand the importance of status in a hierarchical international system, reinforcing the belief that India should assume the role of a great power.Footnote ¹ This is very often coupled with the idea that given India's territory, population, growing economy, and, just as importantly, its “civilizational identity,” great-power status is India's destiny.Footnote ²

India's skepticism of the Western-dominated global order runs deep, beginning with Jawaharlal Nehru, the first prime minister and key architect of the Indian foreign policy of nonalignment. This identity-driven foreign policy survived despite it resulting in Indian security gaps (especially with China) that might have been closed by allying with the United States. As late as 2012 a quasi-official document termed “Nonalignment 2.0” was released in Delhi by an independent, high-profile group of strategic analysts, media and business leaders, and former policymakers, with support from the government's National Defense College, which sought to identify basic principles for Indian foreign policy in the twenty-first century. Not too surprisingly, the values emphasized in this widely read report were strategic autonomy and a more equitable global order, with the recommendation that Indian “actions should not be governed by ideas and goals set elsewhere.”Footnote ³

While the term nonalignment itself is no longer favored, there is little evidence that Indian leaders have given up on the fiercely independent concept it represents in their current foreign-policy formulations.Footnote ⁴ This is despite the new debates that began in the early 2000s as a more hard power–oriented Bharatiya Janata Party (BJP) came to power, breaking the decades-old hold of Nehru's Congress Party. Debate today tends to be split three ways within India's foreign-policy elite among what I have termed in previous work as the nationalists, globalists, and realists.Footnote ⁵ Historically dominant nationalists are now eclipsed by realists. Globalists form the smallest group, though it is the fastest growing among the three.

Briefly, nationalists tend to be suspicious of the outside world and emphasize self-strengthening and self-reliance as primary goals. They are highly protective of their country's sovereignty, both territorially and symbolically. They are skeptical of alliances, especially as a junior partner, seeing them in part as an affront to national pride. Some of the more isolationist nationalists are not interested in their country's international rise at all, emphasizing domestic concerns over international ones. Realists, too, see a dangerous world, but one that is manageable. Like nationalists, they believe in self-strengthening, but not as an end in itself; and they are somewhat open to forming alliances. Realists prioritize relations with great and rising powers and are pragmatically willing to make some trade-offs between protecting sovereignty and gaining offsetting international benefits though multilateral institutions. While they value hard-power capabilities as the nationalists do, realists also see the great importance of economic development as a form of national power. Globalists favor international integration and see the value of institutions and regimes to resolve security and economic conflicts. They tend to favor democratic institutions and are skeptical of military tools of statecraft.

Despite these differences in the Indian foreign-policy discourse, certain core interconnected beliefs and deeply held values bridge the divides among these groups. The idea of strategic autonomy, an aversion to strict alliances, and a strong preference for diplomatic over coercive hard-power instruments still form the center of gravity of Indian foreign-policy opinion. This blended realist/nationalist worldview sits somewhat uneasily with India's growing commitment to the globalist idea of economic integration. India's engagement with the current order reflects both these tendencies, and points to a larger dissonance between its own identity and principles of the liberal order.

To understand this dissonance, we need to briefly deal with the notion of order itself. A good working definition of international order is that put forward by Asia scholar Muthiah Alagappa as a “formal or informal arrangement that sustains rule-governed interaction among sovereign states in their pursuit of individual or collective goals.”Footnote ⁶ Thus, in any order rules play an important role. But playing by the rules does not equate to a complete acceptance of the underlying legitimacy of the rules or the authority of the historical rule-makers. India, like other rising powers, views the international order as fundamentally skewed toward Western interests that are protected by unequal and unfair power structures, both inside and outside institutional settings. These structures in turn are buttressed by principles designed to maintain Western power, ranging, for example, from strong labor standards in trade agreements to the concept of the Responsibility to Protect in so-called humanitarian interventions.

This understanding is in line with Andrew Hurrell's analysis that “even as the idea of sovereign equality gained ground and as international institutions expanded so dramatically in both number and scope, hierarchy and inequality remained central to both their conception and their functioning.”Footnote ⁷ This hierarchy can be seen in the configuration of the UN Security Council, the unbalanced terms of the Nuclear Non-Proliferation Treaty, and the voting structures in the Bretton Woods organizations, all of which are deeply troubling to India. It is difficult for India and other rising powers to accept the legitimacy of the current order—not only because it is unfair in terms of rules such as voting practices but also because some of the core normative premises of the order itself are not shared. This does not mean, however, that rising powers such as India are destined to be at odds with the current order.Footnote ⁸ On close inspection, what is remarkable is the manner in which these states are finding ways to engage with the liberal order despite fundamental differences in worldviews. Indeed, it might be time to turn on its head John Ikenberry's proposition that the sheer attractiveness of the liberal order will guarantee its continued existence, and instead look at how rising powers are able to coexist with an order that presents a clear dissonance for them in normative terms. Thus, while collective identity and internalized norms are not necessarily shared between rising powers and Western powers, there are pure interest-driven reasons to cooperate in the context of the current order in some policy areas and not in others.Footnote ⁹

The Pragmatic Tilt

India's top priority since the 1991 twin crises has been to achieve developed country status; this has been a key driver of Indian pragmatism and has provided the catalyst for partial integration into the liberal order. National trepidation accompanied the gradual opening of India's economy because people feared that Indian companies could not survive international competition after decades of protection. The results, however, have been quite the opposite. Indian companies have not only weathered the competition but also gained a greater global footprint, serving to further legitimize the current global order in the eyes of Indians.

Despite this gradual shift, as late as 2008 India's stance in multilateral institutions tended to be oppositional, with the well-known India watcher Stephen Cohen pejoratively calling it the country that “can't say yes,” and other analysts describing India as “a reclusive porcupine” and “moralistic.”Footnote ¹⁰ Western frustration with India reached a peak after the Doha Development Round negotiations collapsed in 2008 due to opposition from developing countries such as Brazil, China, India, and South Africa. As these countries butted heads with the United States and European Union over agriculture, industrial tariffs, and services and trade remedies, India was often singled out for its recalcitrance.

But in the intervening decade, as India's economic interests have continued to align more closely with a liberal order, it has increasingly injected a larger dose of pragmatism into its foreign policy.Footnote ¹¹ It is adopting the idea of absolute gains in liberal economic theory more readily than before, and has for the most part set aside earlier ideas of international capitalism as a predatory system solely for Western benefit. The high economic growth rates India has enjoyed since the early 2000s, reaching 7.6 percent in 2015 and making India the fastest-growing large economy, stand in stark contrast to the pre-liberalization period's so-called Hindu growth rates of 3 to 4 percent into the 1990s. Across the Indian spectrum, nationalists, realists, and globalists all now agree on the need to maintain high growth for their own reasons, from national-power purposes to development objectives.

In a departure from the past, India's changing interests have spurred greater involvement in global economic governance. The same year that the Doha round collapsed saw the massive 2008 global financial meltdown. Triggered primarily by activity in the United States and the developed West, the crisis not only significantly undercut the legitimacy of the West's leadership but also provided space for new leaders to emerge. Former Indian National Security Adviser Shivshankar Menon identifies 2008 as “the end of the United States’ moment as the sole superpower.”Footnote ¹² Apart from a crisis of leadership, India viewed the crisis as vindicating its slower and much more selective liberalization of its economy, a path that had been repeatedly attacked by Western economists. America's freewheeling capitalist model was exposed as deeply flawed. In particular, since the crisis the G-20 grouping has taken on much greater leadership in the world economy than the G-7.Footnote ¹³ The rotating leadership of the G-20 offers an excellent chance for new actors to set the agenda of the forum. In 2016, for example, China promoted its own key priorities—such as climate change finance, development, investment in infrastructure, employment, and trade—all of which are shared priorities of India.

India has also been leveraging its position as the world's third-largest economy to push not only an economic but also a political agenda at the G-20. At the 2017 summit, Indian Prime Minister Narendra Modi successfully promoted antiterrorism measures, a cause that is a high priority domestically, but one that also has resonance on the global stage. His efforts produced the strongest G-20 document against terrorism to date. On climate change, the communiqué affirmed a key demand of India and other rising powers, noting, “We reaffirm our strong commitment to the Paris Agreement, moving swiftly towards its full implementation in accordance with the principle of common but differentiated responsibilities and respective capabilities, in light of different national circumstances.”Footnote ¹⁴ India has long pushed for the inclusion of the concept of “common but differentiated responsibilities” in such agreements so as to recognize the historical and disproportionate responsibility of Western countries as polluters.

India showed uncommon cooperation and initiative on climate change at the 2015 conference in Paris with the formation of the International Solar Alliance, to be headquartered in India. India's leadership initiative was apparently not entirely welcomed by the United States, which did not want to lose control over the critical global solar agenda.Footnote ¹⁵ For India, this was another example of America's reluctance to share power. On the other hand, India's acceptance of any international climate change agreement is essential for the agreement's legitimacy and impact given India's size and status as the world's fourth-largest carbon emitter (though far behind the top three). This fact was clearly not lost on India.

Still, it should be noted that India's greater willingness to engage with issues such as climate change is also rooted in changing domestic compulsions. There has been mounting pressure from civil society and the public to deal with disturbingly high levels of air pollution, especially in the capital city. In 2015, for example, a leading Indian newspaper ran a series of articles called “Death by Breath,” which received widespread attention, including from the minister of environment, who felt compelled to respond and promised stiffer pollution laws.Footnote ¹⁶ It is instructive that Prime Minister Modi has gone out of his way to frame India's new openness to climate change negotiations as India pursuing its own interests and having nothing to do with international pressure.Footnote ¹⁷ This reveals that Indian politicians still feel the need to demonstrate domestically that their actions support India's norm of “autonomy” rather than an international global “solidarity” norm. In the case of climate change, this is unsurprising since most of India's foreign-policy elites, with the exception of some globalists, view Western states as bearing far greater responsibility for climate change based on historical greenhouse emissions.Footnote ¹⁸

With all of the engagement described above, it is important to reemphasize that India has shown continued willingness to buck Western and U.S. opinion when it comes to safeguarding its economic autonomy. In 2016 for example, India teamed up with rising powers Brazil, China, and South Africa to challenge the Western push to tighten its Intellectual Property Regime at the World Trade Organization.Footnote ¹⁹

Selective Multilateralism and Parallel Architecture

All the while, as India and other rising powers have accepted many important elements of the global economic order, they have also begun to create pathways to overcome their deeper ideational dissatisfaction with the order's authority structures. They have done so primarily through engaging in selective multilateralism and building parallel multilateral architectures.

Selective multilateralism allows rising powers to stay in the global multilateral forums without embracing the full liberal agenda of globalization. They can refuse to concede on issues such as domestic subsidies, state intervention to regulate prices of commodities such as cooking gas and diesel, maintaining strict labor laws, and protecting domestic sectors such as the retail industry—all of which India has done, raising the ire of Western market liberals—while at the same time not rejecting the process itself. This approach is captured well by the findings of a recent comparative study of rising powers’ preferences in economic governance, which indicates that these countries share a common outlook: “a pragmatic desire for maximum policy discretion to deal with the effects of globalization.”Footnote ²⁰

Another way that India has exerted its views is through the creation of multilateral institutions parallel to those associated with the liberal order. India sees these parallel institutions as more supportive of the global liberal order than antagonistic toward it, and, just as importantly, more representative of power-sharing and more reflective of the needs of rising powers. The New Development Bank (NDB), formed by the BRICS countries, is a good example of this balance. The idea for the NDB was introduced in 2012 at the fourth BRICS summit, held in New Delhi, with the outcome document announcing it as being “for mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, to supplement the existing efforts of multilateral and regional financial institutions for global growth and development.”Footnote ²¹ Opened in 2014 with its headquarters in Shanghai and with an Indian serving as the first president, the NDB is on track to reach its target of $2.5 billion in loan commitments by the end of 2017. In just two years the NDB also managed to issue its first large “green bond,” raising RMB 3 billion in the Chinese bond market for the purpose of financing green projects in BRICS countries.Footnote ²²

The Security Order and Persisting Divergence

If the identity values and power structure of the economic order are not fully acceptable to rising powers such as India, there is a similar and even stronger resistance to the politico-strategic order. This is most obvious in India's opposition to the West's erosion of the sovereignty norm since the end of the cold war. American-led interventionism has not elicited support and has at best received votes of abstention at the United Nations from India, where it last held a two-year nonpermanent seat in the Security Council in 2011–2012. Nonetheless, and seemingly contradictorily, India has been among the top three contributors of troops for UN peacekeeping operations. The difference, however, is clear: India fundamentally questions the basic authority and legitimacy of the U.S.- and Western-led “coalitions of the willing” when it comes to international interventions. For example, in 2003 India was at a critical turning point in its relations with the United States as the two countries began unprecedented talks on the possibility of a civil nuclear agreement (despite India being outside the nonproliferation regime); at the same time it came under strong pressure from the White House and Pentagon to contribute troops to the U.S.-led invasion of Iraq. Despite the fact that the talks might have led to greater cooperation in the security realm between the two countries, ultimately the Indian government refused the troop request. One reason was that even the pro–United States BJP government would not countenance Indian soldiers fighting under a U.S. flag, rather than a neutral United Nations one. Only a tiny faction of realist-minded policy analysts were in favor of sending troops, arguing that India needed to do something bold to demonstrate to the United States that it could count on New Delhi as a partner. While there was indeed deep disappointment and frustration in the Pentagon, the experience left a strong impression in Washington of New Delhi's commitment to autonomy.

On the question of the international order, we find more division of opinion in India on how far to go in accepting the current strategic order than the economic order. One key issue is whether India should strive to be a traditional great power that privileges the accrual of hard military power and, relatedly, whether it should take part in conventional balance-of-power and alliance politics. The realist and “hard” nationalist camps call for India to be a traditional great power, but only a very small portion of realists favor India entering into an official strategic alliance with the United States to attain this objective. While nationalists of all stripes are deeply suspicious of the United States, even the realists see the benefits of a full embrace of the United States largely in transactional terms and as insurance against a looming China. However, with Donald Trump's “America First” polemics, Indian realists have been put on the defensive. As a result, they will likely have to compromise by increasing India's own hard-power capabilities rather than ally with the United States. Globalists want India to stay focused on economic growth, and not be diverted by a pursuit of military might, with or without the United States.

The rise of China and, more specifically, increased tension between India and China along their border and in the maritime arena are creating a new dilemma for India when it considers the current security order. India's historical and oft-repeated preference for a multipolar global order rather than a bipolar or unipolar one is now being challenged as the regional security balance is shifting. Until the mid-2000s there was unquestioned consensus in India that a multipolar world would produce a more equitable world order in which India could have a greater voice. India and China have long recognized this shared value, often declaring it at their bilateral and BRICS summits. But China's growing influence in India's own neighborhood (dramatically symbolized by the construction of Sri Lanka's Hambantota port beginning in 2008) is driving India's desire for a more multipolar Asia in which China does not have effective dominance. One open question is the extent to which India and China can insulate their strong differences in the strategic arena to maintain their common goals on some aspects of the liberal order. Evidence so far suggests they may be able to handle this juggling act for the time being, continuing, for example, their cooperation on the China-led Asian Infrastructure Investment Bank (where India is the second-largest shareholder after China) and their refusal to side with the United States in the United Nations on military/humanitarian interventions.

The Trump Effect and Implications for the Order

The conventional wisdom prior to the ascendency of Donald Trump to the U.S. presidency suggested that the challenges to the U.S.-led world order would come largely from rising powers. The idea that the greatest threat to the current order might originate from the center of the hegemonic system itself was not taken seriously in mainstream discourse. What the Trump presidency has exposed in rather short order is the brittle core of the liberal order. Trump's vociferous protectionism is doing more to hasten the decline of America's hegemonic stature than the “greedy” rising powers.

Ironically, despite the lack of a concordance between the West and rising powers on such core values as faith in the market model and received economic wisdom, or on the basic distribution of political power and influence in global institutions, it is hard to find a strong appetite among these new powers for replacing the current multilateral institutions wholesale. Instead, India's main objective at this point is to flatten the hierarchy within global institutions, such as the United Nations, World Bank, and International Monetary Fund, without destroying them. India has neither the capacity to initiate fundamental change nor the desire to take on so-called burden-sharing responsibilities, especially without reform in the authority structures of the current order.

If there is no give from the Western states on certain critical areas where India seeks to leverage its comparative advantage in the current order, there is a chance that disillusionment will set in. For example, given India's strong and growing service sector, it has been pushing to include services in future free-trade agreements with the West. A case in point is the India-EU Broad-Based Trade and Investment Agreement, which is critical for India since the EU as a group is its largest trading partner. An agreement that includes services would allow Indian professionals such as software engineers to temporarily live and work in EU countries, a policy that EU member states are resisting. The latest round of negotiations in 2017 ended without even fixing a date for the next meeting. India also wants more liberal immigration policies, not just the continuing opening up of markets. But policies on services and movement of labor are currently going in the reverse direction in the West, reinforcing the idea that the principles of the liberal order are exercised at the will of the hegemonic group.

Of course, it is not only a question of whether the rising powers are willing to replace multilateral institutions but also whether they are able to present a united front in doing so. Indeed, an emerging trend is the apparent fracturing taking place among rising powers themselves, the deteriorating relations between India and China being the most obvious. India's ballooning trade deficit with China seems to have added one more point of friction. In short, the likelihood of a cohesive reaction by rising powers to the hegemon's caprice is less sure than a decade ago. It will be difficult for India to challenge the Western order while at odds with the other rising powers. As a result, the hegemon may be able to play one rising power off the other and maintain greater bargaining power for its preferred positions.

Evolving Global Governance

Given the foregoing, global governance as we know it is likely to undergo changes, though not necessarily leading to greater conflict or irreparable destabilization. There are a number of possible outcomes, none of them mutually exclusive.

First, the United States might continue to decrease its leadership role in multilateral institutions. President Trump seems to place much more faith in bilateral, one-on-one leadership relationships. With its overwhelming power compared to any other single state, the United States is in a stronger position in any given bilateral relationship than in a multilateral setting. Moreover, the United States could use its unilateral leverage to engage in a classic “divide and conquer” strategy, doling out preferential treatment to some and not to others. While this could be highly unsettling to the international order, the probability of power-sharing within existing institutions would likely go up. Economic slowdown and stagnation along with aging populations limits the liberal centers of power in Europe and Japan from taking on the U.S. role, leaving the space for new powers to step up.

A second possible outcome is a change in the agenda of multilateral institutions to reflect the priorities of rising powers, including limits on free trade and a tolerance for greater state control in the economic realm. This may be welcome to some Western states, whose domestic constituencies also seek greater protection from economic globalization. Of course, in reality the liberal West has always been selective on free trade, particularly when it comes to agricultural subsidies and domestic content laws.

A third possible outcome, and the one most threatening to the current liberal order, would be the creation of new norms that reflect a more fundamental change. Here the only feasible candidate for this type of norm creation is not India but China, especially under Xi Jinping's massive One Belt, One Road (OBOR) initiative. The OBOR seeks to create an unprecedented integrated global economic network that places a China flush with funds at the center and in an excellent position to distribute its “largesse,” including to the weakening economies of the West.Footnote ²³ So far, China is implementing the OBOR on a bilateral basis, creating dependencies through high levels of debt, with extremely low levels of transparency and little regard for such values as human rights and democracy in host countries. These practices and norms would co-exist with and even challenge the basis of the current liberal order. At minimum, multiple and competing norms and rules would lead to a more complex and uncertain global environment.

One potential casualty in such a scenario is the very idea of liberal democracy. At the 2012 BRICS summit held in New Delhi there were differences between India and China on whether to add any reference to “values” in the joint statement, and some commentary suggested that the divergent value systems between the democratic and authoritarian members of BRICS would undermine the group's future influence. China's nationalist Global Times editorial took issue with the criticism and argued that “the mission of the BRICS is not directly related to values.” Pointing to the summit's host country, the paper noted that “India's identity as an emerging country far overwhelms its identity as a democratic country. The latter is a label the Western media like to use to balance China.”Footnote ²⁴ Whatever the merits of the charge, there is no escaping the reality that international orders are always susceptible to the basic, domestically driven values and identity of the chief architect. The chaos being unleashed by the current hegemon may be the best evidence of this yet.