Eeny, Meeny, Miney, Modi

Does India’s new prime minister actually have a foreign policy?

Narendra Modi is set to be India's next prime minister after an election won conclusively by his Bharatiya Janata Party (BJP). The combative chief minister of the western state of Gujarat, he has often been written off as a novice on foreign affairs. Commentators in India and abroad have dismissed him as having "little foreign policy experience," and consider him unlikely to change the "broad contours of Indian foreign policy" -- which have traditionally involved steady, balanced relations with several partners. Others paint him as a "hardliner," given his right-wing base, or have generously over-interpreted portions of his party's election manifesto that have implied changes to India's nuclear posture.

Yet few actually listen to what Modi himself has said about his foreign policy. He has delivered at least three speeches dedicated to international affairs and security since having been anointed his party's prime ministerial candidate in September, and discussed the subject in several interviews. But this has been largely ignored by New Delhi's cognoscenti. (For his part, Modi dismissed much of the speculation about his foreign policy as anuman, or conjecture.) 

So what has Modi actually said? He has repeatedly stated that foreign policy begins at home. National security, he said in his first speech in September as the BJP's official prime ministerial candidate, requires a "strong, patriotic government in Delhi," while instability arises from "a lack of our capacity to understand and accept the viewpoint of the other." He has described "stagnancy" as the biggest problem facing the country. "I believe a strong economy is the driver of an effective foreign policy...we have to put our own house in order so that the world is attracted to us," he said in a speech on India and the world in October. "The current dysfunction in Delhi has prevented even much-needed military modernization and [the] upgradation [sic] of India's defense infrastructure."

But far from resorting to isolationism, Modi acknowledges the realities of a globalized world. "We are not living in 18th or 19th century. We are living in the 21st century," he said in an interview, adding that commercial interests now are important shapers of India's foreign policy. On several occasions, both in prepared remarks and in off-the-cuff responses, Modi has used the Sanskrit phrase vasudaiva kutumbakam ("the world is a family"), and has stated that "India can offer a lot to the world." In particular, he has referred to India's historical ability to create "institutions and intellectual property," recalling ancient centers of learning such as Nalanda and Takshashila.

The considerations of a globalizing world -- rather than any personal animosity he may feel about the U.S. government's controversial revocation of his visa under an obscure law on religious freedom -- have informed his recent public statements, including those concerning relations with Washington. "What happened with Modi does not affect the policies of the country," he said in an April interview. He has also, rather remarkably, refrained from speaking negatively about U.S. surveillance activities, even when given the opportunity to do so recently by an interviewer. More significantly, he has criticized some of the previous Indian government's economic policies that have adversely influenced relations with Washington, and described as a "breach of trust" New Delhi's retroactive tax on Vodafone. "It's not as if people from other countries don't like India, that they don't want to invest here," he said in April. But if "the constant policy changes by the government" could be stabilized, he said, that would increase confidence.

The twin objectives of national security and deeper commercial links are reflected in Modi's recent statements on Pakistan and China, two countries with which India has longstanding territorial disputes. On Pakistan, Modi has said that it is "better to keep good relations," while adding that to hold talks with Islamabad, "the blasts and gunfire first have to stop." In 2013, he called on India, Pakistan, and Bangladesh to wage war on "poverty, illiteracy, and superstition," and urged Pakistan to "abandon its anti-India politics and become a friendly country." 

Similarly, while much has been made of Modi's willingness to do business with China, he has stressed that there should "not be any compromise on India's interest." Referencing a recent book by his colleague Arun Shourie, Modi said that "India is making a mockery of itself with its limited and timid approach" to China. And speaking in February in Arunachal Pradesh -- a state that Beijing claims -- Modi said that "China should give up its expansionist attitude and adopt a developmental mindset." Regarding both Pakistan and China, Modi has spoken highly of former Prime Minister Atal Bihari Vajpayee's ability to balance shakti and shanti (strength and peace).

Two other countries have featured prominently in Modi's actions in Gujarat, although less in his public statements since he began campaigning for prime minister. One is Japan, a rare bright spot in India's foreign relations over the past couple of years. Modi met with Japan's current prime minister, Shinzo Abe, on visits to Tokyo in 2007 -- during Abe's previous prime ministerial tenure -- and again in 2012, when Abe was in the opposition. He has spoken of trying to emulate Japan's high-speed rail network so as to bring India's enormous railway system into the 21st century, and Japanese companies are among the largest investors in Gujarat.

In addition, Modi has expressed his admiration for Israel, a state no sitting Indian prime minister has ever been to, but which he visited in 2006 for a bilateral summit on agricultural cooperation. Modi often speaks of India learning from Israeli best practices in modernizing its massive agricultural sector. He has also discussed cooperation with Israeli diplomats on areas including renewable energy, pharmaceuticals, and water use, among others. 

But Modi's views have not been restricted to trade and investment, technological cooperation, and border security. Since nuclear weapons have traditionally proved a litmus test of every Indian prime minister's national security credentials, Modi's views on this matter carry weight. In his October speech, he praised Vajpayee's decision to green light India's nuclear tests despite international pressure, but also lauded the former prime minister's commitment to a "no first use" nuclear doctrine. After rumors swirled that a BJP government might revisit that tenet, Modi reiterated in April that "‘no first use' is a very good initiative of [Vajpayee] and there is no compromise on this. We are very clear on this." Nuclear proliferation is not the only multilateral issue on which he has opined. He has proposed, for example, the creation of a G8/G20-type grouping to cooperate on solar energy technologies in order to address the "big challenge" of global warming.

As in any democratic process, statements made during what Modi has described as the "fever" of an election campaign may not translate directly into policy. Despite an impressive mandate, he will have to work with an established bureaucracy and political partners in India and abroad. But India's next leader certainly has spelled out how he wants to project himself as a global leader. With his overwhelming electoral victory, the world would do well to take notice. 

Photo by Kevin Frayer/Getty Images


China Has Russia Over a Barrel

When Putin arrives in Shanghai to try and ink a new multibillion-dollar energy deal, it'll be the Chinese -- not the Russians -- who will be laughing all the way to the bank.

Chinese officials are notoriously tough negotiators, especially when they know you're in a pinch. Just ask Gazprom, Russia's natural gas giant, which is on the brink of capitulating to Beijing on a massive energy project, 10 years in the offing. Gazprom and China National Petroleum Corp., one of China's oil giants, are gearing up to sign a 30-year multibillion-dollar deal to send natural gas from Russia to China through a colossal new pipeline network.

A week before Russian President Vladimir Putin was set to meet his Chinese counterpart, Xi Jinping, in Shanghai on May 20-21, Russia's deputy energy minister described the deal as "98 percent ready." However, a Chinese deputy foreign minister was far cagier, noting in mid-May: "We are still exchanging views with Moscow, and we will try our best to ensure that this contract can be signed and witnessed by the two presidents."

On the surface, this seems the kind of win-win outcome that Chinese diplomats regularly tout as the solution to nearly every international problem. Russia sits on the world's largest natural gas reserves, much of it buried in the Siberian hinterland north of its border with China. As the world's largest energy consumer, China is an obvious partner for Russia's economy, in which natural resources make up 70 percent of exports and over 50 percent of government revenue.

But energy trade between Russia and China is surprisingly limited, with only 9 percent of China's oil imports and 1 percent of its gas imports coming from Russia. China is eager to increase and diversify its energy supplies away from overreliance on expensive  and volatile sources in Africa and the Middle East that have to pass through precarious sea lanes in the Strait of Hormuz and the South and East China seas. (Beijing really does worry about all the talk among U.S. strategists on how to blockade China's energy supplies in the event of armed conflict.)

Yet China has been unwilling to pay the premium prices that Russia has traditionally charged in Europe. Now, with Russia's worsening economy and an increasingly competitive Asian energy market, Beijing holds most of the cards -- and time is not on Moscow's side. Gazprom has little choice but to make what Chinese industry experts are calling a "big concession" on price. Although outlines of the deal are sketchy and may remain secret even after it is signed, China will reportedly help finance the related infrastructure, which could cost as much as $80 billion. This is reportedly in exchange for a price of $10-11 per cubic foot of gas: a rate below what Gazprom has long considered its break-even point of at least $12 per cubic foot. So it's still a win-win -- but a much bigger win for Beijing.

Why is Russia more eager to close a deal than China? It's tempting to credit the Ukrainian crisis and the subsequent warming of geopolitical ties between Beijing and Moscow. After all, isn't this all about Russia finally breaking with Europe and pursuing its fortunes in the East?

Hardly. The real precipitating factor is Russia's economic free-fall, whose roots run far deeper than the protests in Kiev. According to the International Monetary Fund, Russia's anemic economy is teetering on recession, projected to achieve only 0.2 percent growth this year, as the country confronts a corrosive mix of rampant corruption, stagnant growth, high inflation, and a shrinking population.

To dig out of this hole, Russia will need Chinese customers to supplement European consumption. If Putin manages to sign this deal, it will send 38 billion cubic meters of natural gas to China annually -- less than a quarter of what Russia currently sells to Europe, but still a shot in the arm for Russian export earnings. It could also provide an additional boost for the Russian treasury by igniting broader development of untapped energy resources in Russia's Far East. Furthermore, the proposed pipeline would be on a different grid from Russia's gas infrastructure for Europe -- in other words, Russia will not divert Europe-bound gas to China.

That's not to say there aren't clear benefits for China in doing the deal. Gas imports from Russia would support China's goal of moving away from carbon-intensive fossil fuels like coal and petroleum that are substantially responsible for the orange haze that often blankets the skies above China's megacities. On a bad day, breathing the air in Beijing is equivalent to smoking 21 cigarettes. And beyond the immediate environmental and health concerns, pollution is fast becoming a political issue that threatens the legitimacy of the Chinese Community Party. Gas imports provide a potentially promising path to resolve these economic and political headaches -- and there's substantial room to grow, as gas currently accounts for only about 5 percent of China's energy needs. Domestic production won't do the trick either: Major efforts to crack the shale gas code in China could eventually diversify gas supply, but serious water, infrastructure, regulatory, and financing challenges make that a long way off.

The major difference is that unlike Moscow, Beijing has options. With the shale gas revolution in full swing, the Asia-Pacific region is fast becoming a buyers' market, as new producers from all over the world scramble to get in on the action. Gazprom will have to move quickly to lock in the infrastructure and financing commitments necessary for the Siberian pipeline project. Otherwise it risks being beaten to the Asian market by alternative suppliers in Central and Southeast Asia (which already have pipeline infrastructure to China) or by suppliers from North America, Australia, and East Africa that are working furiously to build gas liquefaction and export facilities that can deliver (literally) boatloads of gas to Asia. China is increasingly prepared to be on the receiving end of this boom, with nine existing import terminals and another five on the way. Seaborne cargoes from the United States could start arriving as early as 2015. If Russia doesn't bend far enough on price, China could look elsewhere to meet its needs.

Even if Putin succeeds in signing up the Chinese to purchase Russian gas, there will be few reasons to pop the champagne in Moscow. This deal isn't an escape hatch for a country whose relations in the West are quickly souring. Instead, it's a virtual necessity in Russia's desperate attempt to shore up its wobbly economy.

Photo by SERGEI ILNITSKY/AFP/Getty Images