India’s Soft Power: A New Foreign Policy Strategy

by Patryk Kugiel

  In terms of geographic distribution of aid, the major beneficiaries are still India’s neighbours in South Asia—accounting for 78 per cent of MEA spending for technical and economic cooperation. The single largest recipients of Indian aid are traditionally Nepal and Bhutan and, more recently, Afghanistan and Sri Lanka. The total aid to Afghanistan since 2001 is estimated at US$ 2 billion, which is spent on diverse projects, ranging from construction of roads and transmission lines to vocational training for women and numerous scholarships for Afghan students. In the last few years, more aid was directed also to other countries in Asia and Africa. India has, for instance, given credit lines worth US$ 200 million to the New Economic Partnership for Africa’s Development (NEPAD), US$ 500 million for the Techno-Economic Approach for Africa, the India Movement (TEAM-9) group of countries in West Africa, as well as several bilateral credits to African countries.

  India channels most of its aid in three forms: grants, loans, and technical assistance. The role of first two forms has risen considerably in recent years. As India’s economic interests grew, management over loans was given to Export-Import Bank, a major body that can lend money to foreign countries. As a part of the comprehensive approach of Aid to Africa, India waived many debts owed by African countries under the World Bank’s Heavy Indebted Poor Countries (HIPC) Debt Relief Initiative. It has also decided to give phased duty-free market access to 50 Least Developed Countries (LDCs) from Africa and Asia.

  Still, the crucial part of Indian aid is technical assistance managed by the Indian Technical and Economic Cooperation (ITEC) Programme. It is based on the belief that “it was necessary to establish relations of mutual concern and inter-dependence based not only on commonly held ideals and aspirations, but also on solid economic foundations. Technical and economic cooperation was considered to be one of the essential functions of an integrated and imaginative foreign policy” (ITEC website, 2014). In 2012, ITEC provided almost 8,500 civilian training slots for foreign nationals and over 1,000 slots for military trainings.

  Proof of the growing importance of foreign aid is the emergence of new institutions. In January 2012. the government established a new structure within the MEA – the Development Partnership Administration, to effectively handle India’s aid projects through the stages of concept, launch, execution and completion. (MEA website, 2014). Although it is not yet a separate development agency, like USAID, as suggested by some, its creation clearly shows that India wants to be seen as an important international donor or “partner”, as it prefers to be called. DPA has three divisions. Currently, DPA I deals with project appraisal and lines of credit; DPA II deals with capacity-building schemes, disaster relief, and the Indian Technical and Economic Cooperation Programme; and DPA III deals with project implementation.

  Importantly, India presents its foreign assistance coherently with the moral and ideological principles of its foreign policy and, by emphasising differences with traditional Western donors; it aims at generating a more positive image among peer-developing countries. India stresses the fact that it’s “development partnership is based on the needs identified by the partner countries” (MEA website, 2014). It is argued that India’s aid is fundamentally different from traditional patterns in North-South development cooperation. The Indian model follows the South-South cooperation, which is based on the notion of mutual growth, and not on philanthropy characteristic of Northern donors. As argued by one author: “The concept of North-South flows derives its strength from the Western social commitment of altruism. In the case of South-South cooperation, the underlying principle is to support each other for win-win partnership on all sides” (Chaturvedi, 2010: p.23). Other differences include the lack of conditionalities in South-South cooperation, lower transaction costs and concentration on infrastructure and productive sectors, rather than on social sectors, as it is in the North-South model.

  Due to a different perspective, India does not want to accept the rules and standards of international development cooperation set up by the Western donors and promoted by the OECD Development Assistance Committee. India has become more assertive and active in negotiation of the new post-2015 development agenda and rules of development cooperation, known as the Busan process. These differences were clearly summarised by Foreign Secretary Ranjan Mathai at the South-South conference, in Delhi, on 15 April 2013:

  Our engagement is demand-driven and responds to the developmental priorities of our partner countries. We do not attach conditionalities, we do not prescribe policies and we do not challenge national sovereignty. We promote a mutually beneficial exchange of development experiences and resources (Mathai, 2013).

  India’s foreign aid may help to create goodwill towards the country but, at the same time, it is pragmatic and closely aligned with national objectives. As some observers put it: “India’s assistance effort is clearly enmeshed into a larger set of foreign-policy goals: ensuring secure sources of energy for an expanding economy, opening markets for India’s increasingly export-oriented industrial and service sectors, and bolstering geostrategic ties with key neighbours” (Mulen and Ganguly, 2012). Another Indian author admits, “India’s foreign assistance programme is a strategic tool to showcase India’s technical strengths and achievements and to harness and promote India’s political and economic interests in the world” (Sikri, 2009: p.239). India tries to align foreign aid with promotion of its image as an IT hub, through establishing IT centers in developing countries and initiating regional IT projects like e-Pan Africa Network. This collaborative enterprise – worth US$ 115 million and established by India and the African Union, in 2009 – aims to build the telecommunication infrastructure for tele-education and tele-medicine to connect African students with Indian universities and African doctors with Indian doctors for consultations.

  However, by exposing the principle of mutual benefit and “win-win partnership”, India justifies realising national interests in development cooperation. It openly says that development cooperation is not an altruistic aim but one that should bring mutual benefits and create strong and long term partnership. Possibly, the major difference with the Western approach is less hypocrisy in India’s policy.

  Despite this foreign aid program expansion, India’s role in development cooperation is still less visible and recognized by the outside world. A joint secretary in the MEA complained, in an article in 2011, “Our concessional lines of credit provide billions of dollars for development projects in Africa and elsewhere but little is known about them in the public domain”. (Suri, 2011: p.298). He asserted, “From a public diplomacy perspective, there is a pressing need for us to start speaking about all the positive work that India does through its development partnerships in Africa, South East Asia, Latin America and the Caribbean, and indeed in our own neighbourhood.” This was echoed by certain sections of the Indian media. Opinion in the The Hindu, in 2012, gives several examples of the need to better publicise India’s activity in this domain:

  India was the first to help Bangladesh after the 1997 cyclone that claimed 150,000 lives, but so poor was the projection of its aid that western and U.N aid captured the world headlines. India’s contribution to the post-tsunami rescue in Sri Lanka and Indonesia got a little more notice, but only a little. […] In Sierra Leone in 1999, an undermanned Indian contingent of troops did the initial peacekeeping under constraints imposed for reasons of political correctness that no army commander would, or should, have accepted. But all it received were jeers, while the credit for subjugating the rebels went to a British contingent dispatched in May 2000 that made its own rules of combat (Jha, 2012).

  One specific area of foreign assistance is support for democratic institutions and processes in other countries. India is sometimes criticised for its passive approach in promotion of democracy abroad. There are some expectations in the West, that India, as the world’s largest democracy, should do more to support democratic transformations in other countries. Reluctance to engage actively in the Western notion
of democracy promotion is sometimes understood as a proof that India is a “defensive soft power” (Wagner, 2010). For many, India’s engagement with the military Junta in Myanmar, or dictatorial state in Iran, undermines the credibility of its own democracy and is highly disappointing. This leads to a certain misunderstanding of India’s position on this issue.

  First of all, here it is important to recall that “soft power” is, indeed, a relational concept. What can appear as an opportunistic relationship with dictators for some in the West, is proof of India’s principled policy of non-intervention in other countries’ internal affairs. Even if Raja Mohan (2011) is right that this policy is driven by very pragmatic concerns and not ideological differences with the West, it is seen differently by people from democratic and authoritarian countries.

  Secondly, there are important ideological and strategic differences between India and Western countries when it comes to democracy promotion (Kugiel, 2012). It is not that India refuses to support democratic governments abroad; it expresses such support differently. Even though more democratic countries in its region would better-serve India’s security and economic interests, it is rather reluctant in directly influencing neighbouring countries’ political situations. As explained lucidly by the former Indian diplomat: “India does not use democracy as an ideological stick with which to beat its neighbours. It is not in the business of exporting democracy and has been perfectly willing to deal with all kinds of regimes in its neighbourhood and around the world” (Sikri, 2009: p.34).

  Instead of exporting its “model” of democracy or trying to change the system in other countries, India prefers a more passive approach of showing the “example” of functioning democracy. As said observed by Dr. Manmohan Singh, the former Indian Prime Minister, “India has a responsibility to show that democracy works” (Singh, 2006). There are many examples, indeed, when India supports democracy abroad, although it has never been a crucial area for Indian foreign policy. For instance, India trains officials and diplomats of other developing countries through various country-based sources and sends its own experts on deputation to other countries to share their expertise in different aspects the functioning of the Indian system. In recent years, the Election Commission of India gained a special position in this area, and now engages other electoral bodies in different states to share its expertise in organisation of fair and just elections. It even established a special department to organize training and seminars on electoral process questions. Construction of the building of the new Afghan Parliament is another contribution to democracy in Afghanistan. In 2006, it played a positive role in Nepal’s transition to democracy.

  Still, the Indian approach to democracy differs from the Western approach. Most importantly, India is willing to support democratic institutions and mechanisms in other countries only when it is asked for help by the other governments and in the form agreed by both sides. As underlined by Indian Prime Minister Manmohan Singh in his speech in the UN Democratic Fund in 2005: “India has been sharing its rich experience, institutional capabilities and training infrastructure with nations that share our values and beliefs and request our assistance” (Singh, 2005, emphasis added). Stressing the “request for assistance”, Singh has clearly differentiated India’s position with that of the West, which is often seen as imposing its values on other countries. If soft power is about “soft use of power”, then it is right to conclude that the Indian approach to the question of democracy is more accurate for generating soft power.

  It must be added here, that India’s position on the question of democracy is also very practical and linked to India’s strategic interests. According to S.D. Muni (2009), India extends support to democracy when it has its important national interests, like in Nepal in 2006, or in Afghanistan after 2001. It can also pragmatically use democracy in foreign policy when dealing with democratic countries and referring to shared values. At the same time, it is worth mentioning here, conditional engagement does not stop India from having a close partnership with countries with which it does not share the same political affinity.

  Leveraging Diaspora in Foreign Policy

  The Indian government has, for long time, remained indifferent to the potential of its diaspora. It discovered its utility only by the end of the 20th century and developed special mechanisms, initiatives and institutions to employ this asset for the pursuit of national objectives. Today, the Indian government recognizes that “these ‘Global Indians’ can serve as bridges by providing access to markets, sources of investment, expertise, knowledge and technology; they can shape, by their informed participation, the discourse on migration and development, and help articulate the need for policy coherence in the countries of destination and origin” (MOIA, 2013: p.34). In the last 15 years, it has created several mechanisms and instruments to reach out to its diaspora and use its potential.

  By the end of 1999, the government started offering special schemes for Indians not residing in India and created the category of Persons of Indian Origin (PIO). These people, who had Indian roots but now hold citizenship of other states, were allowed to apply for PIO cards, which provides certain privileges, especially regarding issuing of Indian visas. In April 2000, the Ministry of External Affairs set up a special Non-Resident Indian/Person of Indian Origin Division in response to long standing demand of overseas Indians for a separate ministry or division to serve as a single focal point or contact point on NRI/PIO matters (MEA, 2001: p.135). In August 2000, the government formed the High Level Committee on Indian Diaspora to do a comprehensive study of “characteristics, aspirations, attitudes, requirements, strengths and weaknesses of Indian Diaspora and their expectations from India” (Government of India, 2002: p.7). It has analysed the situation of overseas Indians in most of the countries and drew some lessons from other states’ policies to their respective diasporas (including Jewish, Polish, Lebanese, Italian, Filipino, Japanese, Chinese and Irish). In the end, it presented a detailed report in which several reforms to strengthen India’s relations with the Indian diaspora and improve its usefulness for the country were suggested. The document, released officially in January 2002, formed a base for further reforms in relationship between India and its diaspora, paving the way for a number of new initiatives.

  Since 2002, the government has eased the conditions and lowered the fees for issuing PIO Cards, which entail several privileges available to Indian citizens (no visa requirement to travel to India, right to buy immovable properties in India, etc.) but give no political rights (including voting rights). In 2006, the government introduced the “Overseas Citizenship of India (OCI)” scheme, which replaced the PIO Card scheme.

  In May 2004, an independent Ministry of Non-Resident Indians Affairs was established to oversee all issues concerning relations with Indian nationals settled abroad. The ministry was renamed as the Ministry of Overseas Indian Affairs (MOIA), in September 2004, with a mission to “connect the Indian diaspora community with its motherland.” The Ministry focuses on developing networks with and amongst overseas Indians with the intent of building partnership with the diaspora. Besides dealing with all matters relating to overseas Indians, the ministry is engaged in several initiatives for the promotion of trade and investment, emigration, education, culture, health, and science and technology (MOIA website, 2014). It runs several programmes and schemes directed to groups of overseas Indians serving different needs. Among other events, it organises the annual conference of Overseas Indians (Pravasi Bharatiya Divas, PBD), confers the highest national award on Overseas Indians (Pravasi Bharatiya Samman Award, PBSA), organises short courses and studies in India for overseas Indian youth (“Study India Programme”, “Know India Programme”)and also facilitates study visits for those PIOs interested in their Indian origins (“Tracing the Roots” scheme). It also deals with many problems of Indian emigrants in foreign countries and looks after their interests in relations with hosting authorities. In recent years, India signed Social Protection Agreements with other
countries (including Canada, Hungary and the Czech Republic) to regulate the status of Indian migrant workers. The MOIA is also responsible for issuance and management of the Overseas Indian Card scheme.

  The most important event in forging lasting links and connecting with the Indian diaspora is the annually held Day of Overseas Indians, or Pravasi Bharatiya Divas (PBD). This convention of Overseas Indians has been held since 2003, with attendance from the highest representatives of the Indian state (including the president, prime minister, and minister of external affairs) and serves as a platform for discussing key issues concerning members of the global Indian diaspora and their links with India. PBD is celebrated on 9th January, each year, to commemorate Mahatma Gandhi, “the greatest Pravasi” who, on that day, in 1915, returned to India from South Africa to lead India’s freedom struggle.

  The Indian government uses this opportunity to encourage its diaspora to contribute to the internal transformation of India into a highly developed country and a major power. It seeks to transform the old pattern of “brain drain” into “brain exchange” with the reverse use of the potential of overseas Indians. At PDB in January 2014, Minister of Industry Anand Sharma encouraged the NRI community to invest in India, and he announced that the government had relaxed foreign direct

  Tab 3.1. Remittances and FDI inflow to India, 2002-2012