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Indian Foreign Policy in the 21st Century: Challenges and Opportunities

Hudson Institute

Thank you for asking me to speak to you on the challenges and opportunities that face India’s foreign policy today. It is an honour to speak to such a distinguished group. 

In my remarks today I will try to describe the particular purposes and goals which motivate and guide our foreign policy, the outcomes that we seek to achieve and how we have gone about doing that. 

The foremost task of India’s foreign policy is to enable the domestic transformation of India. And by this we mean making possible the transformation of India’s economy and society while promoting our values of pluralism, democracy and secularism. This requires us to work for a supportive external environment that is peaceful, thus enabling us to concentrate on our growth and development.  At the broadest level, our foreign policy seeks security and support from the international community as we build and transform our society and economy. In the sixty years since its inception, our foreign policy has evolved. It has adjusted to meet new challenges and unprecedented crisis situations, as well as risen to meet the needs of intensified economic engagement with the world an engagement that is designed to meet the needs of an increased inflow of capital, technology, ideas and innovation for our development and our re-emergence as one of the world’s leading economies.

The extraordinary changes of the last two decades are fundamentally transforming India’s economy and society. The consistent high economic growth in this period has not only helped empower a large number of our citizens but has also led to increased engagement of India with the outside world. As a new report (Non-Alignment 2.0) points out if we can maintain high growth rates, leverage that growth to enhance the capabilities of our citizens, and maintain robust democratic traditions and institutions, there are few limits to India’s global role and influence. Our economic growth requires deepened economic engagement with the outside world at all levels: trade, labour, technology and ideas. And India now has an increasing range of interests, which are anchored in different parts of the world and which stem from a wide range of factors: for instance, the need to secure energy and other vital natural resources; the imperative of maintaining open shipping lanes; the imperative of seeking investments and trade opportunities overseas; the need to secure trade access, and so on.

At the same time,  the global situation is undergoing a tremendous evolution. Spurred by advances in technology and global communications we have witnessed emergence of new opportunities, enhanced productivity and higher living standards across the world. People across remote corners of our planet can be in touch with each other  in real time, thanks to the rapid and dramatic developments in internet technologies. Developments in distant places, which once took time to impact other parts of the world, are now known almost instantaneously. Technology is empowering people and one example of that change is how events relating to the Arab Spring were triggered last year. 

The very same processes of globalization and technological revolution that have brought with them so many benefits have also exposed our collective vulnerability. The benefits of globalization have been uneven and new challenges have been thrown up like growing inequity and inequality across and within nations, volatility in the financial market and environmental deterioration; and groups of radicals, extremists, hackers, pirates and terrorists have sought to utilize new technologies to gain asymmetrical advantage. The new global order is as yet not fully formed.  Politically as well, we are entering a period of transition from dominance of a single power to a more balanced distribution of power in the international system, short of pure multi-polarity. New groupings are emerging, and we are witnessing the rise of a new global power in China. Challenges in our immediate neighborhood, particularly in Pakistan and Afghanistan also test the international system’s ability to adjust to these changes.

Our strategic goals are basically to enable the domestic transformation of India by accelerated growth and a strategic autonomy that safeguards the national interest at all times in this overall global context. These goals will not change for a long time.  But this does not mean that India is going to be insular or inward looking. On the contrary, our engagement with the world has accelerated and grown exponentially over the last few years.  We have benefitted from our integration into the global economy since the 1990s. And this engagement is only bound to grow as India actively pursues its interests in the world and remains ready to contribute within her capacity. We want to maintain an open global order at many different levels. Our vision of a secular, pluralistic and tolerant society within the country, embracing a multiplicity and diversity of opinions and outlook, is sought to be articulated in our dealings with the world.

Against this background let me briefly elaborate some of the main priority areas of focus for our foreign policy. 

In terms of geography, India’s foreign policy has always regarded the concept of neighborhood as one of widening concentric circles, around a central axis of historical and cultural commonalties. From this point of view, it has always given due priority to the development of relations with the countries of Asia. An article of steadfast faith in our foreign policy, has been to ensure a peaceful, secure and stable neighbourhood, so as to safeguard peace, security and development within our own borders, and it is with this perspective that India is developing a mutually beneficial relationship with all her neighbours. In South Asia, India has been driven by the vision of encouraging regional integration to bring about peace and prosperity for the more than one and a half billion people living in this region. As part of this vision, this geography of hope, we have been implementing a policy of asymmetric engagement in providing greater market access to our neighbours, which enables regional integration in a mutually beneficial manner. We understand very well, that we cannot be insulated from our neighbourhood; our growth and prosperity has a beneficial impact on the rest of the region, and increasingly, we will have to build closer connectivities in trade, communications and other networks of interaction between ourselves and our neighbours. 

At the same time, instability and centrifugal forces such as those arising from religious extremism and terrorism in our neighbourhood can and do threaten our own security and development. In India we have and will take appropriate domestic measures to strengthen our security, but the global nature of the threat requires that global efforts to tackle the problem be intensified. In our region for example we are focussed on helping build Afghan institutions and capacities in order to deal with such threats. We have been engaged in developmental assistance efforts in Afghanistan at considerable human and economic cost. Our total assistance totaling over US $2 billion has been guided by the priorities of the Afghan government and people. Additionally we are supplementing our efforts with joint projects with the US in areas such as in capacity building, agriculture and women’s empowerment in Afghanistan. We have also been fully supportive of US efforts to fight terrorism in Afghanistan and to bring stability there. In this regard we are keenly watching recent developments. Too much is at stake both for Afghanistan, and for our region in what happens in that country.

China, as another immediate neighbour, is a key priority of India’s foreign policy. We have attempted to establish a strategic and cooperative partnership with China. It has emerged as the largest trading partner of India, and our engagement is now multi-faceted. The maintenance of peace and tranquillity on our borders with China, and the quest for a peaceful, negotiated settlement of the outstanding boundary question, are areas of crucial importance in our bilateral relationship. Naturally, as between any two large countries, there are areas of convergence as well as fields of divergence between our nations. We will maintain dialogue with China with the objective of minimizing such differences or bridging them.


Looking beyond this immediate neighborhood, we have also been expanding our circles of engagement, starting with South-east Asia, the Indian Ocean region, West Asia, Central Asia, Africa, and the world’s major powers.

I have often said that South East Asia begins with North East India. Myanmar is our land bridge to the countries of the ASEAN. Today, winds of change are blowing through Myanmar. We have welcomed these developments and are working with people and government of Myanmar to help build their capacities. Through our ‘Look East’ Policy, we have tried to reconnect and reach out in the civilizational space we share with our near neighbours in Southeast Asia since the early 1990s.  We are building on our strong bilateral ties, expanding our roles in regional organizations and working to build comprehensive economic partnerships.  India and ASEAN have put in place one of the largest free trade agreements on goods. We hope that the early conclusion of a similar Free Trade Agreement in Services and Investments between India and the ASEAN will significantly broaden and deepen this process. This year marks the 20th anniversary of commencement of our dialogue partnership with ASEAN. And, we are adding content to our economic relations with the region, through growing strategic and security engagement. 

We firmly believe that our success, and indeed that of the larger international community, depends on our ability to forge an inclusive architecture of economic integration and security cooperation for the Asia-Pacific or the Indo-Pacific as it is increasingly being termed,  to create a basis for a stable and prosperous Asia. An issue that has gained prominence in the recent times is that of maritime security. Ensuring the security of sea lines of communication is vital for the continued economic well being of the region. India sits astride crucial sea lanes of communication across the Indian Ocean, through which almost 60,000 ships carry merchandise and energy from the Gulf to East Asia every year. The security of these lanes is increasingly challenged by the rising incidence of piracy as well as such other threats as trafficking in arms, drugs and human beings and linkages with transnational criminal gangs. India has contributed its naval capabilities to help safeguard these vital sea lanes. For instance we are cooperating with naval forces of other countries including that of the US, in the Gulf of Aden and off the coast of Somalia, to counter piracy and ensure safety and security of commercial shipping. In this regard, we welcome the fact that issues such as terrorism, prevention and response to natural disasters, piracy, protecting sea lanes of communication and drug trafficking are also being discussed at the East Asia Summit. These are the challenges that cut across national boundaries and require cooperative responses.

In our extended neighbourhood to our west, we enjoy traditionally close political, economic and cultural linkages with the countries of the West Asia.  These countries are among our largest trading partners. Our trade with Gulf Cooperation Council (GCC) countries amounted to 130 billion US Dollars last year. Secondly, close to 50 per cent of our crude oil requirements are met by the region. Thirdly, the region hosts more than six million Indians who contribute to the economies of the region and remit significant foreign exchange back into their households in India. Accordingly, we have a vital stake in the peace and stability of the region, and continued progress and prosperity, of the countries in this region. As a democracy, committed to the secular ideals of our founding fathers, our hope is that the secular, democratic spirit that we saw blooming at the outset of the Arab Spring last year, does not dissipate, to be overcome by extreme ideologies.

I would like to say a few words about Iran in this regard. We have consistently said that Iran must cooperate with the IAEA to resolve all the outstanding issues about its nuclear program that continue to raise doubts in the minds of the international community. We acknowledge that Iran has the right to utilize the benefits of nuclear energy for peaceful purposes. But, this right has to be exercised in conformity with international obligations that Iran has voluntarily undertaken as a non-nuclear weapon state party to NPT. We have maintained that Iran must comply with its obligations, fully and transparently. But, we also hope that these issues are resolved peacefully. The need of the hour is diplomatic drive and creativity to address the situation. In this regard, we feel that it is a positive development that P5+1 and Iran have agreed to have another round of talks in the near future. It is our hope that all the sides will utilize this opportunity to engage in a constructive and serious manner to find a way forward. This task will not be easy but we do believe that if the parties demonstrate a seriousness of purpose then gradually the issues can be resolved. 

We do not see our relationship with Iran as either being inconsistent with our non-proliferation objectives, or in contradiction with the relationships that we have with our friends in West Asia or with the United States. As a near neighbor, and our only surface access to Central Asia and Afghanistan, engagement with Iran is of relevance and meaning to us. And, even though we do have imports of oil from Iran, the share of such imports continue to decline and is currently under 10% of our overall imports.   I would like to emphasise that India, as a responsible member of the international community, takes its obligations most seriously. We have scrupulously adhered to the multilateral sanctions against Iran as mandated by the United Nations, and remains fully engaged with the United States Administration and Congress on this issue. 

Looking beyond Asia, we have tried to build mutually beneficial ties with all the major powers, foremost among which is the United States. Our relationship with the United States is in fact built on our shared values and converging interests. It is based on our fundamental belief that we have mutually beneficial stakes in each other’s success. We have in the last decade, set up a comprehensive architecture of engagement based on broad political support in each of our countries, strong people to people linkages, and a growing habits of cooperation. Over the past ten years, the two governments have put in place a very robust agenda of cooperation for our partnership that is, to quote Prime Minister Dr. Manmohan Singh, founded on both “principles and pragmatism”. In the months ahead, as we plan for the third meeting of the Strategic Dialogue in Washington later this summer, it would be our joint endeavor to build on this foundation, consolidate on the work that has already been done and to implement the initiatives that have been agreed upon to qualitatively improve the relationship.

The overseas Indian communities have been natural partners in India’s growth and development. And we remain committed to deepening our engagement with the overseas Indians in order to accelerate the pace of economic and social change in India. We are fortunate to have an Indian American community in this country whose capability and contribution instills great confidence. We take immense pride in the contributions of the three million strong Indian-Americans, whose vigor and drive have added new vitality in our relationship. Their ability to serve their adopted home in this country and make such sterling contributions to its society and economy is what, in my view, makes the Indian Americans such an important component of India’s growing engagement with the United States.

Outside the bilateral relationships with various countries and groups, there are global issues, which constitute yet another set of challenges that we need to successfully tackle to achieve the outcomes that we desire. These would include ensuring energy security and sustainable development, food security and dealing with issues vital to peace and security such as terrorism and proliferation of weapons of mass destruction.  Indeed in India, we attach importance to our strategic partnership with the US both for advancing global peace, stability and progress as well as in the pursuit of India’s national development goals.

The interlinked issue of energy security and climate change can pose the biggest hurdle in our quest to achieve our social and economic transformation. In addressing our energy requirements, we do not intend to follow the business as usual approach or the conspicuous consumption pattern that may exist in some developed countries.  At present our own greenhouse gas emissions are only about 4% of the global level of emissions, even with 17% of global population. We have also set out ambitious goals for increasing the share of solar energy, wind energy, nuclear energy and clean coal technology in our energy mix on the one hand and on the other to improve overall energy efficiency. We have committed to keep the per capita emissions below the average of those in the developed countries and to reduce the emissions intensity of India’s GDP by 20 to 25% by 2020 as compared to 2005. We are also working with the international community to meet this challenge. With the US for example, we have established a Joint Center for Clean Energy Research, which will encourage development of new technologies which are affordable and reliable. India believes that we need to address this common challenge through a collective response, based on equity and fairness, historical responsibilities, resources and capacity.  

Ensuring food security is another challenge that we share with the global community. While India is self-sufficient, but we do need to improve our productivity further and improve the incomes of our rural population. India has launched a National Agricultural Innovation Project to contribute to the sustainable transformation of Indian agricultural sector. And increasingly we are using technology to find innovative solutions. Satellite technology is being used for better crop productivity, efficient development of irrigation and drinking water projects; IT and cell-phones are being used to connect farmers to markets directly.  Here again we are partnering with the US to seek mutually beneficial solutions. Our efforts now span across borders as we assist countries in our region to strengthen food security. In Afghanistan we are on the one hand providing wheat, and on the other hand through our development cooperation with the Afghan people, we are developing their capacities to market their agricultural produce. In Africa, India has committed to establish an India-Africa Institute of Agriculture and Rural Development and an India-Africa Food Processing Cluster. We are also working with the US in three African countries in this area.

Terrorism continues to pose a threat to international peace and stability. India having been a victim of terrorism for many decades, has worked with the international community to strengthen the international framework to deal with this threat. In the UN for instance we have taken the initiative to pilot the Comprehensive Convention on International Terrorism or the CCIT, with the objective of providing a comprehensive legal framework to combat terrorism. Given the global nature of the threat we are working with our international partners including the US to tackle the problem.  This threat is compounded today given the possibility of intersection between terrorism and the proliferation of weapons of mass destruction. We have been affected by clandestine nuclear proliferation in our neighbourhood. Today, India is constructively engaged in international efforts to enhance nuclear security. In the long term such threats can be met by universal and non-discriminatory disarmament – a cause that India has championed for many years.

I have tried to reflect on broad trends and critical issues that we face today and would need to successfully manage. As we do so, India is proud to fulfill her legitimate role as a responsible member of the international community and on the global stage. 

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