The second term of the Indian government led by Prime Minister Manmohan Singh is full of contradictions. At home, it has encountered political turbulence and economic slowdown with no signs of the will to break out of a prolonged stasis. Yet, on the external front, Singh has demonstrated a rare strategic purposefulness in transforming India’s relations with its immediate neighbors, raising its profile in the Indo-Pacific, and returning to seemingly default positions in the Middle East.

C. Raja Mohan explored the dynamics of India's current political and strategic disjunction. Carnegie’s Ashley Tellis moderated.

Internal Crisis

• A Troubled Second Term: The second term of the ruling United Progressive Alliance (UPA) coalition government has been marred by internal paralysis, charges of corruption, and a general lack of dynamism, Tellis said. Prime Minister Manmohan Singh was able to achieve more in his first term – when his coalition government was saddled with cantankerous allies – than his second.
   
• Problems Facing the Indian Government: Mohan outlined several internal constraints that have made policymaking difficult, including:
  
  
  • Economic Populism: Mohan described a “strong consensus on weak reforms” that has led to a return to economic populism.
     
  • Anti-Reform Position: There is an anti-reform, anti-development position held by the predominant Congress Party, who believe that the 2009 election results came from copious government spending, Mohan said.
     
  • Economic Growth: India’s economic growth rate has come down, and may continue to slow in the future. Mohan explained that due to a shortage of available land for development projects, India has been experiencing capital flight.
     
  • Corruption: Congress has been unable to develop a strategy for dealing with the anti-corruption movement, and it is weakening internally due to internecine political struggles, Mohan added.
     
  • Security: Since the 2008 Mumbai attacks, the government has been unable to pass reforms to enhance internal security, and the larger project of Indian military modernization has not been completed either, concluded Mohan.

External Dynamism

Yet in contrast to these domestic  predicaments, Mohan argued that India’s foreign policy was booming:

• Western Front: Mohan noted that whenever the U.S.-Pakistani relationship sours, the Indo-Pakistani one benefits, as is evidenced by Pakistan’s recent decision to reciprocate and grant India “Most Favored Nation” status. Although relations with Pakistan will always be tense and transactional, Mohan said, India is prepared to take whatever positive developments it can get, regardless of Pakistan’s underlying motivations. Further west, India recently formalized a strategic partnership with Afghanistan and is improving its relations with Iran and the Arab world.
   
• Sub-Continent and Smaller Neighbors: According to Mohan, in the east, India has engaged in an ambitious agenda with Bangladesh, much of which is being effectively negotiated and implemented. It has formalized a strategic partnership with Bangladesh and the Maldives, leading to a revival of the idea that India should be a security provider in the region. There has also been a renewed focus on the island nations of the Indian Ocean.
   
• East Asia: Mohan pointed out that India has been improving its relations with nations on China’s periphery. The prospect of significant political change in Burma has opened up some space for India to operate in, and that opportunity has been vigorously pursued. More significantly, Mohan said, relations with Vietnam have improved and have had a security component added to them. India has also established close ties with Mongolia, Japan, and South Korea, and has stepped up engagement with China itself.

Explaining the Contradiction

Mohan attempted to explain the contradiction between India’s internal status and external relations by pointing to a variety of passive factors:

• Relative Autonomy: Mohan noted that foreign policy is relatively autonomous and in the hands of the Prime Minister.
   
• Critical Mass: The last twenty years of rapid economic growth have given India some leverage in its foreign policy by creating the international perception of a critical mass of influence, Mohan added.
   
• Inertia: The last twenty years of increasing foreign policy weight have an inertia which continues to drive Indian foreign policy achievements, Mohan said. Additionally, there is a lag time between the problems of domestic politics and their impact on the conduct of foreign policy.

Mohan concluded that India’s foreign policy could have been even more radically successful if Congress had been more purposeful. India’s problems are political, not economic, in nature.

Predicting the Future

In the medium term, Mohan said, the UPA coalition will not last long in its current form – either Congress will reform and inject new vigor into the party, or they will lose political control. Tellis agreed, noting that foreign policy successes are a wasting political asset outside of the urban middle class, and that it would be difficult to translate them into domestic support.

Tellis added that the current government has struggled with two issues – their desire for bureaucratic control and their unwillingness to trust the price mechanism of a free market in the allocation of resources. He concluded that “India walks straight in crooked lines” when it comes to policymaking: lots of half-steps are taken with few results until a crisis builds and a more revolutionary policy must be enacted.