Modi’s moment in the spotlight

This is an audio transcript of the Rachman Review podcast episode: ‘Modi’s moment in the spotlight’

[MUSIC PLAYING]

Gideon Rachman
Hello and welcome to the Rachman Review. I’m Gideon Rachman, chief foreign affairs commentator, the Financial Times. This week’s podcast is about India and the country’s growing influence and power. My guest is Raja Mohan, one of India’s leading strategic thinkers who’s a senior fellow at the Asia Society in Delhi.

Over the coming months, the world will be seeing a lot of Narendra Modi. The Indian prime minister will pay a state visit to the United States in June and will dine at the White House. In September, India will be hosting the G20 summit of world leaders in Delhi. As American rivalry with China grows, the US is increasingly looking to India as a vital ally. But the western powers have also been disappointed by India’s neutral stance on the Ukraine war. So how does India see its global role?

News clip
(Crowd cheering, drums beating)

Gideon Rachman
That was Narendra Modi arriving at a rally in Sydney earlier this week. The Indian prime minister had travelled on to Australia after the G7 summit in Tokyo. Both the Japanese and the Australians are courting India in an effort to balance Chinese power in the Indo-Pacific. The Australian prime minister, Anthony Albanese, paid this fulsome tribute to the Indian prime minister at the Sydney rally.

Anthony Albanese
I say to my friend the prime minister, before the last time I saw someone on the stage here was Bruce Springsteen and he didn’t get the welcome that Prime Minister Modi has got. Prime Minister Modi is the boss. (Crowd cheering)

Gideon Rachman
That kind of endorsement will court controversy with opponents of Modi who regard the Indian prime minister as an instinctive authoritarian who’s eroding democracy. But it went down a storm with the thousands of Indian expatriates who turned up to watch Modi speak, with whom the prime minister had an obvious rapport.

Narendra Modi
Namaste, Australia.

Gideon Rachman
The surge in Indian immigration to countries like Australia, Canada, the US and Britain over recent decades is creating intense, if complicated, cultural and political ties between India and the western world. There is also a growing pride and confidence in the way that India interacts with the world, something I noticed at a recent conference on India that I went to in Stockholm and that was addressed by India’s foreign minister, Dr S Jaishankar. After the conference, I sat down with Raja Mohan, who’d also been there. I began by picking up on something that had been much discussed. India has just become the world’s most populous country, surpassing China. Has that contributed to a sense that India’s time is now?

Raja Mohan
I think the challenge of managing the population is actually a problem in that population is an asset. But I think making the best use of the demographic dividend — that, of course, is a major challenge given the post-pandemic unemployment, the whole range of the economic restructuring that’s happening in the world. I would say numbers alone doesn’t talk about India’s opportunity, but I think India’s moment is reflected in the fact that India is one of the fastest-growing major economies. It is in a sweet geopolitical position that its relationship with the west have significantly improved and its weight in the international system is on the rise. So that is what makes it India’s moment. The population is really one part of it but I won’t say it is an unmixed blessing at this point.

Gideon Rachman
Right. And as you say, India’s weight in the international system is on the rise. And India has this moment, it’s chairing the G20, the G20 summit in Delhi, I think, in September. And it’s striking to me how much the government is making of this. I’m told there are posters about the G20 all over the country. Why is this so important to India?

Raja Mohan
My sense is India has always aspired to be a major global power. But unfortunately, after the second world war, India, they don’t find a place in the UN Security Council as a permanent member. And since then, the idea how does India reconcile its ambition with a larger international role in the Nehru years, of course, Nehru’s model politic, if you will, gave it a voice. But I think then as our economy turned inward under Indira Gandhi, we became more socialist state-led economy, India’s relative weight actually declined. So it’s really in the 21st century when India began to grow at high growth rates, thanks to the economic reforms of the 1990s, that India’s relative rise has taken place. So I would say this is the first big moment when India is actually handling a major international event. The one when I was growing up, the Non-Aligned Summit of 1983, was a big shock. But then that was a show that was not going anywhere. But G20 is the premier international forum. But I think it’s important to add a note of caution. I think the great enthusiasm of Prime Minister Modi. He’s a superb politician. He’s leveraging this great international event for his own domestic ambitions in terms of projecting as a major world leader.

Gideon Rachman
There’s an election quite soon, isn’t there?

Raja Mohan
Yeah, exactly. But I think there is a problem. I mean, partly the G20 leadership is also a poisoned chalice at this point. In a way, multilateralism has never been in such a bad crisis. The great powers are at each other’s throats. So on the geopolitical domain, things are not in a good shape. And on the geoeconomic domain. Just as US-Russia conflict or the Russia-west conflict has complicated the geopolitical scenario, the China-US economic conflict makes it harder to produce outcomes in the economic domain. So I think despite the fact the G20 is a genuinely multilateral institution, its ability to really produce major solutions to the world’s problem is limited. So India has to manage that difficult moment.

Gideon Rachman
And in fact, it looks like talking to the Indians here, they’re not expecting to even produce a joint communiqué at the G20. India will sign up to it but Russia and China basically won’t sign a joint communiqué.

Raja Mohan
Yeah. That’s what happened at the G20 foreign ministers’ meeting some weeks ago, where 18 countries agreed on everything but two, that is, Russia and China, didn’t agree on the Ukraine formulation. So the Indians, of course, say that there was agreement on a large number of other minor issues. But the fact is the Ukraine crisis casts a dark shadow over the deliberations. If India succeeds in preventing things from going worse, that would certainly be an achievement. But my sense is we can manage this without a dust-up between the world leaders, that itself would be a reasonable outcome.

Gideon Rachman
Yeah. And I mean, you said that this is kind of India’s moment in the spotlight. And it’s not just the G20. I think Prime Minister Modi is going to Washington for a state visit.

Raja Mohan
He goes to Washington in June and then goes to Paris, July.

Gideon Rachman
Yeah. So the west is gonna be seeing a lot of Modi.

Raja Mohan
Yeah, yeah.

Gideon Rachman
Do you think that indicates what you were suggesting was India’s geopolitical sweet spot that as the west gears up for confrontation with China, India seems to be the indispensable power?

Raja Mohan
Absolutely. I think both on the geopolitical as well as on the geoeconomic domains, I think India becomes an important player, though, our relative size vis-à-vis China, I mean, is not much because today China’s GDP is five times larger than India’s.

Gideon Rachman
Although the populations are roughly the same.

Raja Mohan
Yeah. So I think somewhere we will roughly equal to 1990. And then China’s rapid economic growth took them way ahead of us when India grew well, but not as fast as China. So therefore, I think the gap has increased and that gap will remain for a while. But I think what the US and the west are trying to do is in Asia, to build a coalition with the traditional allies of the US, such as Japan, South Korea, Australia. And in India, which is not a treaty ally, to bring an Asian coalition that would produce a regional balance of power. So there India becomes important on the China question. The Russia question is a problem because India’s past legacy, but I think the Americans have managed this quite well so far. On the economic domain, as the US looks to reorder the global economic structures, limiting China’s capability to weaponise the interdependence such that emerged. India’s emerging as an important partner for developing reliable and resilient supply chains to develop safe and trusted digital infrastructure to work with the best on new clean energy supply chains. So I think the restructuring of the global economic order, India occupies a major role because India’s participation will make it important. But I think historically, if looking back the moment in 1947 when India could have worked with the west, it did not happen for a variety of reasons. Then again, in the late ’60s, I would say when Britain withdrew from east of Suez, there was another moment to work together that didn’t come to pass. I mean, in 1990s we’ve been talking about a courtship between India and the US and India and the west. But I think circumstances are not produced the courtship to really produce some serious outcomes in the region.

Gideon Rachman
Yeah, and of course I talked about why the west has changed its attitude, but it seems to me that India is actually it’s changed really fundamentally after the clash with the Chinese in the Himalayas, the killing of was it something like 20 Indian troops?

Raja Mohan
Yeah, yeah, yeah.

Gideon Rachman
Is that your perception as well that that was a real sea change in Indian thinking?

Raja Mohan
I think India was beginning to expand its relationship — economic, political and military — with the United States starting from 1991 and with Europe as well. But I think the legacy ideology of non-alignment, the strategic autonomy and the idea that non-western countries must come together, whether this with Brics or through other Asian institutions, was always a powerful appeal because that was one of the founding principles of modern India, that we Asians are brothers and we need to work together. But I think the rise of China and China’s assertiveness has cured us of this belief that somehow we Asian brothers will come together to conquer the west. So I think India is quite clear when it makes the formulation that while we are interested in a multipolar world, a multipolar Asia is equally important. That means in the past we were afraid of American hegemony. Today, the problem is to deal with the potential Chinese hegemony in Asia. So I think that fundamentally alters the priorities, the strategies of India for the world.

Gideon Rachman
Yeah, and it’s a bit of a shift even for Modi himself, isn’t it? Because when he came into power, he really made a play to get on with Xi Jinping, and it seemed almost like Xi went out of his way to antagonise Modi. There was this famous incident when he was in Delhi and they were all shaking hands, all very friendly, and at the same time there were Chinese troop movements up in the Himalayas.

Raja Mohan
Ah that was the first visit where Xi Jinping as the president of China. I mean, Modi took him to his home state, to Vadnagar. They went to the riverfront in the city, sat on a swing, you know, kind of looked, because Modi, as chief minister of Gujarat, did travel frequently to China because he was denied entry to the west. So he regularly travelled to China. He thought really he could pull off the bilateral deal with the Chinese. But I think the problem was not with Mr Modi’s expectations, but I think everyone misread Xi Jinping — the Americans, the Europeans, the Japanese and the Indians. What we didn’t understand a decade ago was that Xi Jinping saw China’s moment has come. China wants the great power and others must simply accommodate. So it’s not that the Chinese were being particularly nasty to India. They were confronting the US, trying to push the US out of Asia. They were pushing the Japanese. They were taking territory in South China Sea. So they thought the gap between Chinese power and all its neighbours was now so much in Beijing’s favour they could simply do what they wanted and that the US had no option but to accommodate China. So this way I think they made fundamental mistakes that the US is pushing back, US is mobilising coalitions both globally as well as regionally, and I think it has pushed India over the line to get closer to the US.

Gideon Rachman
So how real is the sense of threat in India from China? Because of course there’s outrage when Indian troops get killed and there is a border, a longstanding border dispute, there was war in 1962, but do people actually think it’s possible the Chinese could try and seize territory, more territory from India?

Raja Mohan
I think it is a long and disputed border. What Xi Jinping has done is to show that he can actually transgress and unilaterally alter the boundary disposition. So for India, I think the problem is not limited to the boundary. That China’s role in south Asia is growing at India’s expense. He’s trying to create bases and military facilities around India . . . 

Gideon Rachman
In Pakistan, Sri Lanka . . . 

Raja Mohan
 . . . Sri Lanka, in Burma and Bangladesh. So I think the whole push to become the dominant power in south Asia. And finally, the projection of naval power into the Indian Ocean, where Chinese like all great trading nations, China has built a great navy, probably growing at the fastest pace that we’ve ever seen by any nation, building a navy. And then globally actually blocking India’s aspirations at the UN, at the Nuclear Suppliers Group. So I think China is not an existential threat, but it fundamentally constrains my space. It does what it wants on the border. It limits India’s space in the region. So far, I think India has no choice but to push back. And to do that, it really needs the partnership of the US.

Gideon Rachman
Some strategic thinkers have suggested that there also a fear about control of water supplies in Syria.

Raja Mohan
Yeah, I mean, all the great rivers like the Indus, the Brahmaputra, started in Tibet. The Chinese do want to do this grand engineering of moving these rivers. They build these dams and what they’ve done, for example, in Mekong and the Mekong River. But I think in south Asia case at least, I mean, the Brahmaputra, for example, is a huge river that comes into Bengal and gets into the Bay of Bengal. There is substantive catchment even below the Himalayas. So I think they can do things on the Indus. But I would say while the design is dangerous for the longer term, in the near term at least it is not going to completely block the river at this point.

Gideon Rachman
And so, coming back to the co-operation with the US, with Australia and Japan in the quad, how deep is that? Because, you know, we’re sitting in Europe now in Sweden, which is joining Nato. Now Nato is an alliance for the actual collective security guarantee. What is the quad, as far as you understand it and explain it to us?

Raja Mohan
You know, because of India’s reservations, it is not a military organisation. You can see it has elements of security. For example, they’ve announced last year on maritime security how they will help the smaller countries of the region. So I think what India is doing is really to separate the military function that India does annual military exercises, naval exercises with the US, Japan and Australia called Malabar exercises. So it’s separating the public goods function of the quad, develop a counter capability to China on the softer side — on infrastructure, on economic assistance and those kind of areas. While on the military side, you do that separately because I think an India that is seen as joining a military alliance would create not only problems for us from China, but also from the Asean and other countries who are already very nervous about India joining the core. But my sense is the US which under the Trump administration, at least, they thought a military alliance is a good idea. But once Biden came, he sees very clearly, look, let’s build up this organisation rather than trying to make it to Nato in Asia because I think, the notion that we can use the quad as a way of doing multiple non-military things, for example, during the Covid pandemic we saw India trying to make vaccines.

Today they’re pooling a range of information to support the smaller countries to better manage the exclusive economic zones from illegal fishing. So it’s really soft stuff but I think if we can keep building this up, at some point, I would say it will acquire security features. But at this point, it suits India and it seems to suit the United States as well, that build up a relationship rather than trying to force India into a formal military alliance. Because you heard our minister’s suggestion per se at the beginning of this conference that US is not offering an alliance. And India’s too big to fit into that kind of a frame. So this is different, but my sense is given India’s size, this is a better way to go rather than simply put India in a slot within an alliance, because a defeated Europe and a defeated Asia are different reasons at this point to accept the US-dominated alliance system. Here what we’re seeing is really the negotiation of terms of engagement, which has a clear objective, which is to balance China but not as a traditional alliance.

Gideon Rachman
And how much has the Ukraine war and India’s refusal essentially to take sides to condemn Russia at the UN, the fact it continues to buy Russian oil — how much has that complicated this attempt to get close to the west?

Raja Mohan
It has not really complicated. And I think, well, a lot of people, particularly those central European friends, are very upset. The US clearly sees that there is a Russia problem does not mean the China problem has disappeared. So when you think of the China challenge, India becomes very critical. So I think what the US is doing is cut a lot of slack for India. As long as you don’t buy oil at a high price, below the price cap, that seems to be fine so far unless they completely ban energy engagement with Russia. So I think the US does not see this as a deal breaker, that India’s reluctance to condemn Russian invasion. Second, I think the US is offering India, look, we know you are dependent on Russia for weapons. Is there a way we can help you diversify away from Russia? There I think, I would say that India now is going to be compelled to produce more weapons at home or turn to the west.

Gideon Rachman
How much do you think the fact that India gets 80 per cent of its weapons is, if you like 80 per cent of the explanation for why they are (inaudible) with Russia?

Raja Mohan
Yeah, it’s probably little less now 70 per cent or so, but the total inventory of having bought weapons for 60 years. The inventory is large. So we’re buying very few new weapons from Russia. But since I am locked in a conflict with China, my tanks, my aircraft still need Russian space, Russian equipment. So I think, the dependence is pretty significant. And in a warlike situation with China, it becomes even more important. But my sense is, if this understanding that western capital can come and produce weapons in India, then I think we’re a bit out of time. We can change the situation, but it can’t be done overnight.

Gideon Rachman
Being cynical, it’s a huge opportunity for the US arms industry, for European arms industries.

Raja Mohan
Absolutely. And I hope India is smart enough to create the conditions for that investment. We have seen one day, Airbus is joining hands with Tata’s to produce the C-295 transport aircraft. So those are the kind of deals we need to do a lot more, which will increase India’s capability . . . 

Gideon Rachman
But US weaponry is very expensive.

Raja Mohan
Not actually. US weapons are cheaper than European weapons because the size of the European market is small, and they don’t produce in the numbers, for example, Rafale versus F-16. I mean, F-16, there are probably more than a thousand aircraft flying around the world. So the scale of production is so large, so the weapons are cheap. And then you can do a government-to-government deal with them. So the Europeans are the more expensive ones. But we’ve been preferring to go to the Europeans, French, for example, because they’re still worried about the Americans might cut it off someday or . . . 

Gideon Rachman
And that actually is an interesting question because as you alluded, I mean, Modi was not allowed to even travel to the United States for many years because of the allegations about his role in the Gujarat pogrom or whatever you wanna call it. Is the question of human rights in India still a complicating factor? Because I think only yesterday, for example, the state department produced reports pretty critical of religious freedom in India. I just talked to someone in Washington about it and said, how did the Indians take it, and he said, they hate it. You know, they pushed back very, very hard. How do you see that complicating the relationship?

Raja Mohan
Look, I think you know, the US, the multiple single-issue groups which have reasonable agency to make these judgments. But I think the US is still a strategic actor, that it is not going to farm out its larger strategy to the single-issue groups. We’ve seen, if you look at last 70 years outside of Europe, the US had to make constant balancing of multiple interests. So the relationship with China for the last 40 years.

Gideon Rachman
Or the Saudi Arabia . ..

Raja Mohan
Yeah, Saudi Arabia, Pakistan. I’m not worried about that the US is suddenly going to turn on India, I mean, I think because the stakes, only China question are so high. And India is a very, very important partner. So I think they will allow groups to say, we do have a good size. There might be protests when Mr Modi goes there, but I think the larger convergence will remain there. I mean, that is deeply structural convergence that is taking place and the US knows how to manage this.

Gideon Rachman
What about the Indian reaction? Because I’ve certainly noticed here in the UK, there’s protests outside the Indian High Commission, sparks a big reaction in India. And so, Modi also has his domestic politics to add.

Raja Mohan
So that’s always been in India, you know, the foreign criticism like, we go back to Indira Gandhi’s days. The foreign hand was a bit heavy. As a new nation trying to build, there is this bristling at any foreign criticism. So that I think, as long as that is within certain bands of tolerance for the US, that the situation in India is not as terrible as in many other countries. And for India, what the US says is not so offensive that it needs to take drastic action. So there will be strong reaction by the foreign office spokesman and that kind of stuff, but I think the stakes for each other are so high, so that’s one. Second, I would say, the US, Biden administration, which came with the formulation democracies versus autocracies, is beginning to adjust a lot. It has to deal with Philippines. It has to deal with Thailand. It has to deal with India. It has deal with Saudi Arabia. This simplistic notion with which they began in 2021, it’s very different after in 2022, after the Ukraine invasion. They need friends. This idea that they can simply tick off everybody because of some concern, those days are gone. So my sense of the strategic discipline demanded by the contestation with China. I will also temper some of the things the Americans are going to do. And for India, the US is the largest trading partner today. Our trade last year is $190bn, including goods and services. In US, we have 5mn Indians out there. And technology, US is the number one partner. On defence it’s a growing partner. So India is not gonna simply squander this relationship. While Modi and his supporters will be upset. So there will be argumentation, but the rest of the story will move on.

Gideon Rachman
And in fact, that people-to-people thing is very important, isn’t it? I mean, this is 5mn Indians in the United States.

Raja Mohan
Just minority, Indians are the most successful minority unlike in UK. They do so well because they’re all professionals. Today, they’re getting into the politics, they’re into the media.

Gideon Rachman
Yeah, I mean you can see Microsoft, Google, etc . . . 

Raja Mohan
Yup.

Gideon Rachman
And then in the UK, obviously, you have a prime minister of Indian origin. And now a big surge in Indian immigration into Canada and Australia.

Raja Mohan
Yeah. Canadians are looking for people. So I would certainly, one of the interesting stories is that the Indian diaspora has done the best in the English-speaking world. So there’s a level of comfort, there’s a level of familiarity. So if you see where is Indian migration concentrated in US, UK, Canada, Australia, New Zealand. The Gulf is a different story. The Gulf is really temporary.

Gideon Rachman
They’re given opportunities to rise.

Raja Mohan
Yup, yup. So labour exports, but they’re not going to settle there. But the English-speaking world has really been welcoming to India. In the deepening intimacy we’ll also create problems, because when you have so many of them, they’re also divided, like you see in UK, internal arguments within the Indians themselves, with sometimes affect it. But overall I would say it’s become a really — the term that we use in the India-UK context is a living bridge. The people-to-people connection does really play a very, very critical factor. We don’t have such relationship with China, with Russia, with anybody else. It’s only with the English-speaking world.

Gideon Rachman
So just to conclude, I mean, it’s now kind of accepted that China is going to be — unless something amazing happens — that it’ll be one of the superpowers of the 21st century; arguably, already is. How far and how realistic do you think India’s aspirations are to be, you know, one of the great powers of this century?

Raja Mohan
I think we have some distance to go, because they said we are in a sweet spot. But we need to convert the sweet spot and do more accelerated economic growth and build stronger partnerships with the rest of the world. It’s also important, I think, to see that while we have, our credit numbers are very high. We’re still at 2,400, 2,300 per capita. And so we should never forget that the developmental challenge internally remains the primary goal that how do we lift up our people into prosperity. But the size gives us external opportunities because already it’s the fifth-largest economy at just $3.5tn, and soon be the third-largest economy. So the size gives us the capacity to engage the rest of the world. But that must be leveraged and done to bring greater prosperity to our own people. But I think we have a chance to be.

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And nobody gave us a chance in 1947. But today I think, and there is a chance a rising India can actually lift its own people into a high level of prosperity.

Gideon Rachman
That was Raja Mohan of the Asia Society ending this edition of the Rachman Review. Thanks for listening. Please join me again next week.