The government has already identified 7,000 projects in different sectors that would be a part of the NIP.
As part of India’s development efforts, New Delhi has been increasingly investing in connectivity projects, a case in point being the Rs 1,224 crore first ever undersea optical fibre project connecting Chennai and the Andaman and Nicobar Islands that Prime Minister Narendra Modi inaugurated last week. It is vital for India’s geo-strategic needs that this focus on infrastructure development within its borders translates to the region as it looks at expanding its outreach in the Indo-Pacific. As Indo-Pacific partners look towards strategically enhancing cross-border cooperation through “soft diplomacy”, infrastructure development has emerged as a critical avenue for strengthening political partnerships in response to the new regional and global security environment. The Asian Development Bank (ADB), in 2017 estimated that Asia’s infrastructure needs require a US$26 trillion investment (until 2030) to maintain the economic growth momentum. The situation arriving out of the coronavirus pandemic will exacerbate this figure and highlight the need for sustainable, diverse connectivity networks, particularly with the realisation of over-dependency on Chinese manufacturing and the breakdown of global supply chains.
So, how can infrastructure translate into a foreign policy tool that furthers India’s strategic goals and interests in a rapidly changing geopolitical environment? And, what steps must India’s infrastructural diplomacy take to achieve its regional objectives and rising ambitions? Since stepping into power in 2014, the Narendra Modi government has brought about a radical change in India’s foreign policy vision: “to be a leading power, rather than just a balancing power”, as Dr S. Jaishankar (then Foreign Secretary) had remarked. Modi has also made concerted diplomatic efforts to gain a more significant say in global forums and seek to play a greater leadership role in the Indo-Pacific. Through this unique brand of “Modi diplomacy”, India has focused on building deeper diplomatic, cultural, and security ties with key allies in the Indo-Pacific, such as through the Quadrilateral Security Dialogue (Quad) and “Quad Plus” narrative that is fast emerging. At the same time, India has turned inwards and begun investing in its own connectivity- focused and Indo-Pacific centred initiatives like Sagarmala, Cotton Routes, Bharatmala and the vision of Security and Growth for All in the Region (SAGAR). Subsequently, as propounded by PM Modi during his Independence Day address on 15 August 2020, the government is planning the ambitious National Infrastructure Pipeline (NIP)-announced in December 2019 to bolster investments in the infrastructure sector, to play a key role in helping the Indian economy recover from the Covid-19 pandemic.
The government has already identified 7,000 projects in different sectors that would be a part of the NIP and plans to invest Rs 110 lakh crore in the project which is being envisaged as a mix of private and public money. Also, PM Modi announced the plans of initiating comprehensive and integrated domestic infrastructure where the roads, railways, airports and ports would be complementary to each other to create a “model infrastructure”. Moreover, he stated the need for enhanced border and coastal infrastructure in India to ensure the security of the country. Furthermore, keeping with this infrastructure development plan, India has initiated several new connectivity projects in the Indo-Pacific and sought to build closer ties with the ASEAN countries. Through the Forum for India-Pacific Islands Cooperation, India has allocated to the Pacific Small Islands Developing States (PSIDS) a grant of US$12 million “towards implementation of high impact developmental project in the area of their choice” and a line of credit of about US$150 million for “undertaking solar, renewable energy and climate-related projects”.
India’s outreach is not restricted to the Indo-Pacific either. It has expanded bilateral and multilateral ties with the European Union states—infrastructure development being a common area of interest. Additionally, India’s growing engagement with the Quad partners (US, Japan and Australia) amidst China’s increasing aggression, places joint infrastructure ventures in the Indo-Pacific as a key area of cooperation. In fact, the topic was a prominent part of the agenda at the Quad consultations in Bangkok and New York last year, the first India-Japan 2+2 Ministerial Consultations in November 2019, and most recently, the India-Australia Virtual Leaders’ Summit in June 2020. Such collaborations have validated India’s efforts in the region and boosted its image as a global leader. Furthering India’s infrastructural diplomacy under the aegis of Quad will also allow New Delhi to strengthen its bilateral ties while covering a variety of connectivity sectors ranging from digital to maritime to economic. This synergy will enable India to reach the full potential of its “Global Strategic Partnership” with the US, “Comprehensive Strategic Partnership” with Australia and “Special Strategic and Global Partnership” with Japan. Notwithstanding these efforts, India’s close geographical proximity to China constrains its diplomatic outreach. Until now, India has had to maintain a balancing act: enhancing ties with strategic allies while pursuing a China Connect policy to avoid antagonizing its powerful neighbour. But the policy has seemingly not paid dividends, nor has it been equally balanced. India’s infrastructure diplomacy efforts have been further limited by its economic slowdown in the last couple of years and its pressing domestic concerns, such as the situation in Kashmir and the Citizenship Amendment Act (CAA) protests. Even though New Delhi has continually expressed its desire to expand its role in the Southeast Asian region, it has not clearly delineated the ambit of its role. The Modi government’s decision not to join the Regional Comprehensive Economic Partnership (RCEP) is a case in point.
India’s Indo-Pacific policy has also lacked a coherent vision and primarily been reactive, which has resulted in India being seen as a self-serving country rather than one pushing towards regional development. However, this could change with India’s prospective involvement in joint infrastructure initiatives through platforms like the Blue Dot Network (BDN)—the so-called alternative to China’s flagship infrastructure scheme, the Belt and Road Initiative (BRI). Although New Delhi has so far refrained from committing to the US-Japan-Australia led BDN framework, which is still at a nascent stage, it must re-evaluate the strategic advantages of such a proposition. For one, linking India’s infrastructure initiatives with the BDN can give India a much- needed multilateral impetus and signify India’s earnest interest in improving ties with the region. This, in turn, can exemplify India’s strategic standing in the Indian Ocean Region (IOR) and help New Delhi achieve its regional security ambitions. For instance, the BDN can provide a pathway for increased synergy with the Quad and the “Quad Plus” set of countries such as Vietnam, South Korea, New Zealand, Brazil and Israel. Moreover, it opens possibilities to explore cooperation in providing Indo-Pacific countries with an alternative to China’s Health Silk Road initiative post the pandemic. In other words, Asia’s stressed infrastructure post Covid-19 can provide India with a diplomatic pretext for participating in the platform without appearing blatantly anti-China. Even if India decides against joining the BDN, it must create some form of deeper engagement with the network. The BDN, which aims to bring together public, private, and civil society sectors, can help strengthen India’s infrastructure financing and attract more foreign direct investment, thereby creating employment opportunities, boosting economic growth and helping diversify the supply chain networks. However, for this, India must actively move away from its protectionist economic tendencies. According to the Property Rights Alliance’s 2019 trade barrier Index, India tops the list in restrictions on services that prevent foreign businesses from operating in the country. In the post-Covid, post-Galwan period, when India is already working towards self-reliance through its “Atmanirbhar Bharat” (Self-Reliant India), India must look towards a makeover in India’s restrictive FDI policies to reach the potential of its infrastructural connectivity and attract companies that are leaving China. Therefore, as India looks towards realising its global foreign policy ambitions in the rapidly changing geopolitical environment of the post-pandemic world, infrastructure diplomacy can emerge as an effective tool for New Delhi. Connectivity projects can not only revamp India’s slumping economy but also enhance its footprint in the Indo-Pacific as a leader through inclusive regional development.
Dr Jagannath Panda is a Research Fellow and Centre Coordinator for East Asia at the Manohar Parrikar Institute for Defence Studies and Analyses, New Delhi. Dr Panda is Series Editor for “Routledge Studies on Think Asia”.