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World and Us

The world order has changed; the might of Russia has declined and a Chinese pole has emerged to challenge the unipolar dominance of the US and its allies.


It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair” (A tale of two cities, 1859).

The opening lines of the Charles Dickens classic aptly describe contemporary human civilisation; while the rich denizens of the Global North enjoy unlimited prosperity, people of the Global South are battling starvation and climate change; even with computers increasing human intelligence manifold, mankind is frittering away scarce resources in needless strife.

The world order has changed; the might of Russia has declined and a Chinese pole has emerged to challenge the unipolar dominance of the US and its allies.

The new Cold War and the wave of jingoism sweeping the entire globe have disrupted global supply chains built on the Ricardian principle of comparative advantage, where each country produced only what it could, at the lowest comparative cost.

The inability or unwillingness of traditional manufacturers to export vital goods has made nations produce goods whose production cannot be justified on economic principles viz. at a humongous cost. Countries like the USA and India are trying to manufacture semiconductors, that were being built cheaply in Taiwan.

There is also a human cost; poor countries face food shortages because countries like Russia and Ukraine are unable to export food grains. The result has been rampaging global inflation and a crippling shortage of vital goods ~ both industrial and agricultural ~ leading to stymied global GDP growth and starvation in countries like Somalia and Afghanistan.

Friendly relations between nations are under stress from ‘rampaging bull’ China, which is expending much of its newly-acquired energy in browbeating its neighbours. Sharing geographical boundaries with China and its client States, some of which, like Pakistan, openly support terrorism, India is waging a lonely battle against Chinese hegemony.

Our relationship with China is fraught with contradictions: dependence on cheap Chinese imports ensures that despite a continuing military confrontation with China, it remains our biggest trading partner. Thus, for India, the challenge is threefold, military, political and economic.

Domestic compulsions further limit our foreign policy options; overt espousal of religiosity by Indian leaders has created a schism between us and our predominantly Muslim neighbourhood. We will have to fight on all fronts ~ economic, military and diplomatic ~ to salvage our prestige.

The military and economic heft of China ensures that few countries support us meaningfully, in our confrontation with China. We also face a foreign policy dilemma; our newfound friends ~ the Western Bloc ~ view us with distrust because of our non-aligned past while, our traditional ally, Russia, has moved on, because of our deep engagement with the US.

The continuance of the Sino-Russian ‘no limits’ strategic partnership, signed just before the Ukraine war (on 4 February 2022), forestalls Russian support to India, in case of a military confrontation with China. Some strategists have gone so far as to suggest that China may again embark on a misadventure in Ladakh and the Northeast.

Dubious as this hypothesis may appear, it may be best to be ready for the worst China is capable of. More so, because Indian PMs, from Nehru to Modi, have been totally remiss in divining Chinese intentions. It would be futile to bank on the support of the UN and the Big Powers; their perfidy can be gauged from their conduct vis-avis Ukraine.

To explain: Ukraine surrendered Soviet-era nuclear weapons on its territory in 1994, in exchange for undertakings from Russia, America and Britain that it would not be attacked. By seizing Crimea from Ukraine in 2014, Russia broke that promise and by non-interference in the said conflict, America and Britain also broke their promises.

The US, which we are courting assiduously, has always been an unreliable ally, failing to provide material support to us when we were attacked by Pakistan in 1965 and 1999 and by China in 1962 and 2020.

During the IndoPak war of 1971, the US actively supported Pakistan. Shorn of rhetoric, the main interest of the US Government vis-a-vis India is to sell us highly-priced, defanged military equipment and prevent us from buying arms from alternative sources.

Otherwise, also, the core of American policy is the deployment of military resources for the protection of its interests abroad and establishing the primacy of the US. Historically, the scent of oil, or rivalry with Russia had sent the US in overdrive, leading to debacles such as in Afghanistan and Iraq. China is the new US bête-noire after its emergence as a formidable military and economic power.

After the MALABAR naval exercises, we had hoped that the US would support Quad (an alliance of US, Japan, India and Australia) militarily and the Quad would evolve as a counterweight to China, in the Indo-Pacific region. However, the formation of AUKUS ~ a military alliance between the UK, US and Australia, which is Quad minus Japan and India ~ has pre-empted this possibility.

According to US Secretary of State, Antony Blinken, AUKUS is a military alliance, while the Quad was created for trade and commerce, which is perfidy at its worst, because AUKUS was formed with the immediate aim of snatching a US $60 billion submarine deal from France.

The US does little to conceal its deceitful foreign policy. American officials generally visit India and Pakistan together; while in India, they vilify Pakistan unreservedly but change their tune once they reach Islamabad.

Even PM Modi’s personal friend, President Trump, right after his historic reception in Ahmedabad, in February 2020, highlighted the “very good” US relationship with Pakistan and preached to us about the importance of unity among India’s various religions.

Despite sweet words, the Biden administration has proved no better for India. The US has threatened to levy additional tariffs of up to 25 per cent on around 40 Indian products including shrimps, basmati rice, gold and silver items in retaliation against the Equalisation Levy or Digital Services Tax, imposed by India on non-resident e-commerce operators.

We owe many of our foreign policy problems to the inflated ego of our leadership, which translates into an overweening desire to appear as everything to everyone with a marked tendency to talk down to others.

No wonder, Indian politicians see all foreign investors and businessmen as supplicants or worse still, as cash cows, ignoring the fact that business and politics are closely aligned in the West and Western Governments are committed to promote and protect their businesses abroad.

On a visit to India in January 2020, the world’s richest person, Jeff Bezos, announced a $1 billion investment in India, with a potential of creating 10,000 new jobs. Leave aside expressing gratitude, Union Commerce and Industry Minister Piyush Goyal lambasted Amazon, saying that Amazon was not doing a favour to India by its investment, and for good measure, accused Amazon of predatory pricing.

For the record, Amazon has invested more than US $6.5 billion in its Indian business, that employs more than 1 lakh professionals. Similarly, the former Law and IT Minister got into a number of ugly spats with Facebook and Twitter, that only ended with his ouster from the Union Cabinet.

Since India does not find place in the US coterie, we have to devise an alternative strategy to counter China. A neighbourhood-first policy would definitely help;  we may start by providing food and other aid to countries like Sri Lanka, Nepal and even Pakistan, which are facing economic headwinds and grave food shortages.

We can restore friendly relations with our neighbours, at no extra cost, by toning down our rhetoric and not letting domestic compulsions affect foreign relations. In fact, cultivating a working relationship with arch-enemy Pakistan, even at some cost to ourselves, would considerably lessen the threat from China.

Our earlier idealistic foreign policy was based on the principles of truth, nonviolence and Panchsheel, which we could not sustain, in face of the realpolitik practised by the other countries.

Gravitating between transactional and moral extremes, we have not been able to evolve a stable foreign policy. That said, a well thought-out, balanced foreign policy is essential for us; US President John F. Kennedy hit the nail on the head when he said: “Domestic policy can only defeat us; foreign policy can kill us.”

(The writer is a retired Principal Chief Commissioner of Income-Tax)