When Prime Minister Abbott visits India in early September he should follow a simple rule: don’t talk about regional power politics, focus instead on India’s plans for economic development. A recent article suggested that India and Australia might collaborate as middle powers (along with other interested states) to contain China. For a couple of reasons, that’s a bad idea. First, as ASPI’s Peter Jennings has pointed out, India walks alone in its foreign policy—it’s not ready to get entangled in anti-Chinese coalitions. The idea of a ‘tsunami coalition’ of the United States, Japan, India, and Australia has been around for a while. But the Indians have always backed away from entering a coalition that would serve the purpose of containing China. Second, the Chinese President, Xi Jinping, is visiting India later in September and India’s Prime Minister, Narendra Modi, is keen on getting Chinese assistance in kick-starting his ambitious development plan for India. Talk of anti-Chinese coalitions won’t go down well in either New Delhi or Beijing.

But when the talk shifts to economic development, Abbott has a lot to offer India apart from uranium. While Modi has a majority in the union parliament, he doesn’t have control over a sufficient number of state governments to successfully implement his most ambitious economic plans. The Indian parliament, however, can easily move legislation on aviation, railways, defense, infrastructure, energy, insurance, banking, healthcare, education, and tourism. Modi has already increased the amount of foreign investment in defence, the railways, insurance, and aviation. More of the sectors listed above will be opened up to foreign investment and Australia is competitive in many of those areas. Read more

The growing India-chatter within foreign policy circles has recently intensified after the election of the most ‘Indian’ of Indian Prime Ministers in decades. Many have speculated whether Modi’s cultural-nationalist past will define his foreign policy. The new PM had previously criticised Congress’ approach as ‘weak’. And his new External Affairs Minister, Sushma Swaraj, had made hawkish comments on Pakistan. But, in terms of actual policy, Modi is likely to continue the centrist drift we saw during the election.

India’s foreign policy has long been determined by a triple bottom line—interests, values and public opinion. All three are relatively impervious to changes of government. Each BJP policy will adhere to at least one of those drivers, and the degree of change from previous policy will be determined by how the government interprets each driver and how readily changes can be pushed through a strong-willed foreign service. Read more

Narendra Modi has come to power because the Indian electorate, particularly the 50% of Indians who are under 25, wants a leadership committed to rapid economic growth. For him to deliver on that promise he’ll have to bring about structural reforms to the Indian economy and look for external investors to put money into some of his most ambitious projects—which range from bullet trains to high-tech cities. Those investments will most likely come from Asian countries that have built strong Foreign Direct Investment (FDI) linkages with India. Further, given that Western nations, particularly the United States, shunned Modi until recently, in the short to medium term he’ll focus his foreign policy efforts on Asia.

Modi’s development agenda is unlikely, in the near term, to be funded by Western nations disenchanted with New Delhi’s glacial decision-making process, its excessive red-tape, and high levels of corruption. He will, therefore, go to Japan, China, and South Korea to seek FDI because those countries are comfortable with the Indian business environment and, in the case of Japan and South Korea, have already invested billions in the country.

Despite making the pre-election nationalist pitch of telling China that India wouldn’t cede territory to it, Modi is viewed as a pragmatist in Beijing and as someone Chinese industry and investors can do business with. The Chinese have long eyed investing in India’s telecommunications industry and infrastructure development and have offered to build a bullet-train network for India. Japan, similarly, has invested $4 billion in helping to develop the Delhi-Mumbai industrial corridor. Tokyo would like to expand its investments in India because not only would it provide economic rewards but it would strengthen the India-Japan strategic relationship which some observers believe can be used to restrain potentially aggressive Chinese moves in Asia. Read more

Many thanks for Tanya Ogilvie-White’s insightful and somewhat wistful commentary on nuclear proliferation in an increasingly complex security arrangement in Asia. She points out the dangers confronting the international security system generally, and nuclear-insecurity in particular, as transitional volatility at the systemic level begins to erode confidence in the post-Cold War equilibrium, and she does so with the right combination of urgency and anxiety. I commend her analysis, but I wish to make a couple of observations on the difficulties facing future leaders of the nuclear nonproliferation regime, emanating from the regime’s own history.

Firstly, let me recognise the broad success of nonproliferation efforts. Other than the initial P-5 nuclear states, only a handful of countries, ie Israel, India, Pakistan and North Korea, are known to possess nuclear weapons, and only Iran is believed to be pursuing the capability to produce some, Tehran’s persistent protestations to the contrary notwithstanding. Many other states, despite suffering from grave insecurity of various origins and possessing the technical and financial wherewithal to address these by fashioning a nuclear deterrent, have elected not to, or have been persuaded to desist. This success of the NPT regime is commendable. Those who believe in the risks inherent in proliferation should support and strengthen the regime in their collective interest. Read more