India’s Soft Power: A New Foreign Policy Strategy

by Patryk Kugiel

  Following the debacle during its intervention in Sri Lanka, India has not sent troops abroad unilaterally and has refrained from interfering in the internal affairs of other countries. It has largely succeeded in changing its perception in the neighborhood from a “regional bully” to a “benign regional power” and the “prospect of an Indian hegemonic threat to South Asia has receded considerably” (Basrur, 2010: p.280). Notwithstanding its military build-up, it is not seen as a threatening force beyond South Asia. Indeed, the country’s stance, in many ways, resembles the Chinese strategy of a “peaceful rise”. But India appears more successful in mitigating the fears of others. As observed in a recent report:

  India’s great advantage is that, barring certain perceptions in our immediate neighbourhood, it is not seen as a threatening power. The overseas projection of Indian power has been very limited; in its external face, India’s nationalism does not appear belligerently to any country, nor, as expansionist or threatening in any way. This has, in some respects, been a great asset to India. Its power has often been the power of its example. The world recognises that it needs India to succeed. This is an asset that we have rather taken for granted, and it behooves us now to leverage that global consensus as effectively as we can (Khilnani, et. al, 2012: p10)

  Indian Diaspora as a Strategic Asset

  It is said that, “in a globalised and interconnected world, diasporic communities have become increasingly important actors in international relations and therefore an added dimension to the soft power of a country. Depending on their economic and political influence within the centres of global power, diaspora can be a vital strategic instrument and channel of communication to further foreign policy goals and gains” (Thussu, 2013: 73). In this context, India has one of the strongest assets at hand. After China, the Indian diaspora is the second largest in the world. Recent statistics of the Indian government show that about 21.909 million Indians or people of Indian origin live in almost 200 countries around the world (MOIA, 2013). This includes members of three categories: Persons of Indian Origin (PIO), Non-Resident Indians (NRI) and Overseas Citizens of India (OCI) (MOIA, 2013: p.8).

  The first group – PIO – constitutes people who were (or whose ancestors were) born in India or countries where Indian ancestors lived and who, at present, hold another country’s citizenship or nationality. Some of the PIO are, for example, former citizens of India who recently had to renounce their Indian citizenship while going through the procedure of naturalisation. An NRI, on the other hand, is an Indian citizen who is ordinarily residing outside India and holds an Indian passport. According to the World Bank (2011), this group of emigrant Indians is estimated to be above 11 million. Finally, an OCI is a person of Indian origin who holds other country’s citizenship but qualifies for certain privileges given to Indian nationals. The OCI scheme started in 2005 and allows for a limited form of dual citizenship, which is generally prohibited in India. Holders of OCI cards get, for instance, a life-long visa to India and have numerous economic and social rights, but not political rights. In addition, there is also a lesser-known category, called Stateless Persons of Indian Origin, which includes people with no official documents to demonstrate their Indian origin. Most of this group is based in South Asia, in countries such as Sri Lanka, Nepal and Myanmar (Thussu, 2013: p.76).

  The Indian diaspora is spread unevenly across the world. There are states where ethnic Indians form a majority (e.g., Mauritius – 60 per cent, Guyana – 51 per cent), a significant minority (e.g., Fiji – 41 per cent, United Arab Emirates – 32 per cent, Qatar – 24 per cent), as well as places where they symbolically are present (Hungary, Slovenia, see Table 3.1). The largest Indian communities live in the United States – 2.245 million, Malaysia – 2.020 million and Saudi Arabia – 1.789 million. There are 28 countries with over 100,000 and 8 countries with over 1 million Indians.

  Table 3.1. Countries with the Largest Indian Communities

  The overseas Indian community is highly heterogeneous, and thus it reflects the ethnic, linguistic, religious and racial diversity of India. The community composition in a given country depends on the time of their arrival, migration patterns and many legal, economic and social circumstances. It can be said that the Indian diaspora is mainly of economic origin. As was discovered by the High Level Committee on the Indian Diaspora (Government of India) in 2002, “the majority had left because of economic reasons or in search of better employment prospects and not because of political, social or ethnic factors” (Government of India, 2002: XII).

  The value of the diaspora as a soft power instrument lies not only in their numbers and distribution but more so in the positions, roles and prestige they acquired in their respective countries. The Indian overseas community appears to be one of the most successful in the world. Indians in developed countries, from the US and Europe to Australia, have emerged as an economically secure and politically vibrant group. For instance, such Indians form the most affluent ethnic community in the US, with a higher average household income than Caucasian Americans. They are also relatively better-educated and highly represented in prestigious positions in business, medicine, law and academia. This is manifested in the “growing presence of members of the Indian diaspora in top universities, international media, and multilateral organizations, as well as in transnational corporations” (Thussu, 2013: p.73).

  In fact, many people of Indian origin emerge as the elite in their new motherlands. Those of Indian origin are influential in American Ivy League universities and have even become Nobel Prize winners in various academic fields. It is enough to say that one can find among them the richest people in the world (e.g., Lakshmi Mittal, the fourth richest in the world, is a British-Indian steel magnate), CEOs of some of the largest multinationals (the nomination of Satya Nadella as CEO in Microsoft in 2014 is the best example), influential journalists (e.g., CNN commentator Fareed Zakaria) and Nobel Prize winners (Amartya Sen, a Nobel laureate in economics, who now lives in the UK). As prosperous entrepreneurs, doctors, scientists or artists, they present a new face of India in the world. They build an image of a more vibrant, inspirational and successful India.

  Apart from their economic and intellectual success, people of Indian origin play an increasingly active role in politics in several countries. Here, one may point out examples of Cheddi Jagan – prime minister of Guyana (1957–1961), Mahendra Pal Chaudhary – prime minister of Fiji (1999 –2000), and Anerood Jugnauth – twice prime minister and president of Mauritius (2003–2012), and Kamla Persad-Bissessar – an incumbent prime minister of Trinidad and Tobago. In America, for instance, Indo-American Rajiv Shah was nominated in 2009 as the head of US Agency for International Development (USAID), and the Obama administration appointed over two dozen Indo-Americans to senior positions in the administration, judiciary and White House (Thussu, 2013: p.84). Bobby Jindal, the US-born child of immigrants from Punjab, is the governor of Louisiana, and was one of the possible nominees of the Republican Party in the 2012 presidential election. Apart from the US, people of Indian origin serve in several parliaments, including in Canada, the UK, and Germany, where they work to strengthening cooperation with India. Also, in non-political circles, journalists, entrepreneurs and academicians exert some influence on the policy of the host country on issues significant to India.

  Economic Potential

  Undeniably, economic success has played an important role in India’s rise in the emerging world market, and it has refashioned its image for the better in attracting the attention of the business sector, media and scholars interested in international relations. During the decades of the Cold War, an impoverished, underdeveloped India grew at a sluggish pace (the Hindu rate of growth) and was not an attractive destination for the capital-oriented West. Only the liberal and pro-market reforms, initiated in 1991, by then-Finance Minister Manmohan Singh of India, triggered the process that led to a new image of India as a modern, vivacious and technology-savvy country.

  Over the last t
wo decades, India has made impressive economic progress: Its GDP grew, on an average of nearly 5 per cent a year over 1990–2012 (UNDP, 2013: 3) and, during the last decade, it has grown around 8 per cent annually, although it has slowed down a bit to 4–5 per cent in last two years. The size of the India’s economy multiplied four times between 1991 and 2011. Today it is the tenth largest economy in nominal terms and third when calculated in purchasing power parity (PPP). Although India’s per capita income is still low—around US$ 3,400 in 2012, it has dramatically reduced the proportion of people who are income-poor (the percentage of the population living on less than 2005 PPP US$ 1.25 a day)—from 49.4 per cent in 1990 to 32.7 per cent in 2010 (UNDP, 2013: p.13). The average life expectancy has risen from 58 to 68 years, and the infant mortality rate has dropped from 80 to 47 deaths per thousand births (Thussu, 2013: p.7). According to a well-known prognosis by Goldman Sachs (2003), India is set to emerge as the third largest economy in the world, surpassing Japan by 2032.

  Although numerous economic and social indicators are still relatively low, India’s impressive progress has made it one of the most attractive emerging markets and investment destinations in the world. Its large population – a liability when India was poor – is now transforming into a valuable asset as people are becoming richer. According to some estimates, the size of the Indian middle class, now between 50–200 million people, will reach 600 million by 2025. The large and increasingly rich society makes a perfect consumer market for foreign companies. Not surprisingly, stocks of FDI to India soared from just US$ 1.6 billion, in 1990 to nearly US$ 202 billion, in 2011 (Thussu, 2013: p.7).

  A large pool of skilled workers has led to the emergence of a strong service sector in the country. India has become one of the leading countries for outsourcing and the IT industry. According to the UN agency for trade, UNCTAD, during the past 20 years, production of software and BPO (business process outsourcing) services in India surged from US$ 200 million, in 1991, to US$ 75 billion, in 2011, and export sales rose from US$ 110 million to nearly US$ 58 billion in the same period (Thussu, 2013: p.8). While China has managed to emerge as the “world’s factory”, India has become the world’s service hub.

  Highly successful IT companies, such as Infosys and Wipro, have largely reshaped old stereotypes of India as a poor country of mystics and elephants. Bangalore, the city where most IT companies are based, has been labelled as ‘India’s Silicon Valley’. As summarised by Tharoor (2008: p.40): “The old stereotype of Indians as snake charmers and sadhus lying on beds of nails has now been replaced by one of Indians as software gurus and computer geeks.” In fact, it seems that both the stereotypes of “IT India” and “spiritual India” coexist and can work hand in hand to enhance the country’s soft power.

  Similar progress has been made in the pharmaceutical, automobile and chemical industries. In 2014, eight of the world’s biggest corporations, in terms of revenues, on the “Fortune 500” list were Indian. Albeit it was a much worse result than other major powers (US 128 companies, China - 95, Japan – 57), India had still made a visible progress in comparison to previous years (in 2004 there were only 4 Indian companies, mostly in last hundred). From an import substitution economy, India is gaining more from active engagement in the globalisation process and trade and investments with other countries. In 2010, India’s trade to output ratio was 46.3 per cent—up from only 15.7 per cent, in 1990. India’s FDI also reached a peak of 3.6 per cent of GDP, in 2008—up from the 1990 figure of less than 0.1 per cent (UNDP, 2013: p.76).

  The Indian economy has shown strong resistance against the global economic crisis following the 2008 financial crisis, with its GDP growing almost 10 per cent in 2010; and it has done its part in helping the global economy pick up speed. As observed by the UNDP, “without the robust growth in these economies, led by China and India, the global economic recession would have been deeper” (UNDP, 2013: p.21). Moreover, India’s economic success has had a positive spillover effect on other developing countries, illustrated in the production of cheap generic drugs. As appreciated by the UNDP, “Indian firms, for example, are supplying affordable medicines, medical equipment, information and communications technology products and services to countries in Africa” (UNDP, 2013: p.3).

  In recent years, India has not only emerged as an attractive FDI destination, its business community has also gone shopping abroad. The outward stock of the FDI rose from just US$ 124 million, in 1990, to over US$ 111 billion, in 2011 (Thussu, 2013: p.7). The acquisition of the British luxury brand, Jaguar Land Rover, in 2008 by India’s Tata Group for US$ 2.6 billion, shocked many in the West—but it also apprised it ofthe newfound prowess of the Indian economy. Indian companies have made sizable investments in Africa, Latin America and Europe – for instance, the Aditya Birla Group bought over the U.S. aluminum firm Novelis, in 2007, and Columbian Chemicals, in 2011; and Mahindra and Mahindra acquired Sangyong, a Korean carmaker. Overall, Indian companies have proven themselves capable of competition with Western partners in a wide spectrum of markets.

  Another element of India’s new image is its achievements in technology and science. India is now a member of the elitist club of countries with indigenous nuclear programmes and space rocket launch capability. It runs an ambitious programme of peaceful atomic energy, and has also developed strategic capabilities, manifested by its nuclear weapons test in 1998. The Indian Space Research Organisation (ISRO), one of the biggest government space agencies in the world, placed its first satellite (Rohini) in orbit in 1980—put there by an Indian launch vehicle. The ISRO offers a commercial programme for launching satellites and, in 2008, successfully sent its first mission—Chandrayan -1, to the moon. It plans to land on the moon by 2016 and is preparing for a manned mission to by 2020. On 5 November 2013, ISRO launched its Mars Orbiter Mission (MOM), Mangalyaan, which entered the orbit of Mars successfully in 2014. This was not only the first Asian nation to enter the orbit of Mars (after USSR, USA and EU), but also the least-expensive Mars mission to date and first nation to have in so doing succeeded, in its first attempt. The country’s Indian Institutes of Technology are held in high regard; India is also a leader in biotechnology, nanotechnology and IT industries, and it plans to increase funding for research and development in the coming years to emerge as a strong high-tech leader.

  From India’s transition from a state-controlled socialist economy to a market-oriented system emerged a unique model, one which stresses the importance of “sustainable and inclusive” growth. This growth is based on domestic consumption and services that compel observers to talk about the people-centric “Mumbai consensus” as opposed to the pro-market “Washington consensus” and state-centric, export-driven and manufacture-based “Beijing consensus”. As was observed by an Indian economist, that from as early as 2006, the uniqueness of India’s “consumption-driven model” meant that: “rather than adopting the classic Asian strategy – exporting labour-intensive, low-priced manufactured goods to the West – India has relied on its domestic market more than exports, consumption more than investment, services more than industry, and high-tech more than low-skilled manufacturing. The consumption-driven model is also more people-friendly than other development strategies.” (Das, 2006: p.6). As another Indian author claims, “as a poor and diverse developing country that has made impressive strides in all fields after its independence, India offers an alternative model of governance and development to the one being advocated by the West as so-called ‘universal’ one. Without India’s support and leadership, there is little hope of bringing about a new world order that gives due importance to the imperatives of social justice and inclusive growth” (Sikri, 2009: p.235).

  Conclusion

  This overview of India’s major soft power assets shows its substantial potential in this area. If Nye (2004: p.17) claims that much of the US soft power “has been produced by Hollywood, Harvard, Microsoft and Michel Jordan,” then it can be said that India’s soft powers comes from Bollywood, Bangalor
e, Infosys and Shah Rukh Khan. With a rich and increasingly popular culture, functioning democratic system and many positive records in foreign policy, India seems well equipped to shape opinions and preferences of others in a desired way. Its recent economic success and an increasingly influential diaspora supplementing India’s power of attraction make the country more appealing to the outside world than ever before.

  It seems, moreover, that these assets will only grow in the future, owing to a young and aspirational population as well as good economic prospects. India may be, in fact, one of the few countries that can offer an alternative cultural, political and economic model to the West. When seen in congruence with the rise of China and crisis of the neoliberal model of capitalism in the West, India’s influence has the ability to expand. As observed by Thussy (2014: p.10): “The combined economic and cultural impact of China and India, aided by their extensive global diasporas, may create a different form of globalization, one with an Asian accent and flavor.” To a large extent, India’s global image will depend on how it will continue to manage to combine the tradition of an old civilisation with modernity and globalisation. Its history suggests it will be able to resist the influence of Americanisation and assimilate the best elements into a novel and more attractive power. As correctly observed by Indian experts: