Leverages for India in a Post COVID-19 World
The COVID-19, the global pandemic has perhaps been the biggest disruptor of routine life since the second world war with global economies and common lives coming to a near halt as the world fights the greatest collective challenge, the world has seen in a long time. Apart from the lives of the global masses, the pandemic also seems to be unsettling the established world order. The magnitude of COVID-19 and its reach across the world will most likely lead to an economic and political re-orientation of the existing international system. The crisis, however unfortunate, provides significant opportunities to some states in the global order. India, in particular, is well placed to capitalise on the developing situation to emerge stronger than before. While the existing world order is not going to disappear into thin air instantly, it is bound to witness a considerable change as countries move to leverage their comparative advantage over others.
The biggest change would most certainly be in the economic sphere as companies, guided by their respective states, are already moving to diversify the global supply chain. This is mainly due to the growing trust deficit across the world vis-a-vis China, uncertainties regarding US-China trade war and companies deciding to reduce their dependence on China. However, the rationale behind this shift is not purely economic but also political. Many states, led by the US, see this as a chance to counter China’s revisionist approach to the current rules-based international system.
India with its huge labour, improvements made in infrastructure and ease of doing business, growing entrepreneurial set-up, existing industrial and technological base with a large market is going to be a top contender for this global economic diversification exercise. To its advantage, unlike China, India is also seen as a vibrant democracy with strong participation and support at various multilateral organisations wielding significant soft power around the world and with a record for strong advocacy for a rules-based international system. In response to the changing economic atmosphere, many states in India have started to move quickly to usher in labour and land reforms which have often been cited as some of the most fundamental shortcomings of the current Indian economic structure. The central government has also come out with a stimulus-reform package aimed at supporting the economy and attracting new investments. All these factors make India a promising country for future economic and strategic partnerships.
Apart from the arising economic opportunities, the geopolitical space presents enough room to make immense advances, India could benefit from the deepening US-China struggle for power. While the current growing sentiments across the world against China have undoubtedly disturbed its plans to displace the US as the global hegemon, China will continue to make sustained efforts towards achieving that objective leading to a greater tussle for power and dominance across the globe. With the right and timely investments in improving infrastructure, reducing bureaucratic barriers, ensuring stable policy environment, ensuring necessary fiscal and tax-break measures to attract investments, and promoting the domestic defence industry with increased private sector participation and reducing dependence on foreign players for key technologies, India could create a space for itself as a formidable swing power with the ultimate objective of becoming one of the three pillars of a possible tri-polar world order, along with the US and China. Such measures would help India in securing necessary leverage and help in its engagements with the US and China to bargain for best possible outcomes on both economic and strategic fronts.
In a parallel approach, sustained efforts should be made to increase multilateral engagement at all levels. This would include reviving and providing a boost to existing sub-regional and regional organisations like South Asian Association for Regional Cooperation (SAARC), Bangladesh-Bhutan-India-Nepal (BBIN) Initiative, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) to maximise economic and political gains while securing its cementing its position as a regional and global leader. India should actively look to drive reformative processes at various international multilateral organisations, an opportunity that exists today as India chairs the executive board of the World Health Organisation (WHO). The prime objective of these initiatives should be to provide the world with a trustworthy alternative to China, which in turn would lead to long-term gains for India.
Global crises of this enormity often lead to the rise of new powers and permanent changes to the existing current set-up. Seldom is the global order disrupted in such a radical way, opening up opportunities for powers with a comparative advantage over others. Today, India holds the potential to be that power. The COVID-19 crisis is a test for the country’s leadership for its ability to show the resolve necessary to take tough and pragmatic decisions to secure a path to achieve its long term objectives. However, to maximise gains of the opportunities present, India will have to move in a swift manner to out-manoeuvre other capable powers vying for similar benefits.