With Modi in charge, emboldened India to deal with allies, foes from position of strength

NEW DELHI – If Prime Minister-elect Narendra Modi can revive a faltering economy, as his people clearly believe he can, India may finally be able to deal with overseas allies, foes and rivals from a position of strength.

Elections are won and lost on domestic issues, and the 2014 ballot, in which Modi and his Bharatiya Janata Party (BJP) won a resounding victory in results Friday, was no exception. But the Hindu nationalist’s focus on reviving a flagging economy will also feed through into foreign policy issues ranging from regional security to trade.

“If the country looks strong, then even its companions will change, neighbors will change and the atmosphere will change,” Modi, 63, said in a recent TV interview.

Dating back to the Cold War, India has tended to avoid close alliances. Its ability to project power rests largely with its nuclear deterrent. And, despite a population of 1.2 billion, the diplomatic corps is barely larger than Singapore’s.

Balancing China’s great-power ambitions, and keeping the United States interested in the region after American troops pull out of Afghanistan, will require India to raise its game, or risk leaving its land borders and sea lanes vulnerable, experts say.

But, given their history of mutual suspicion and war, Pakistan remains the challenge most likely to dominate Modi’s foreign policy agenda, at least in the short term.

“It is not possible to have discussions amid bomb blasts and gunshots,” Modi said in the same Times Now TV interview.

Modi in fact vowed continuity in India’s dealings with Islamabad over disputed Kashmir, the Muslim-majority region which Pakistan also claims as its own. The neighbors have fought three wars over Kashmir, the third, in 1999, a smaller conflict that was undeclared. In addition, India has never fully quelled a separatist insurgency in the part of the region it controls, which has claimed tens of thousands of lives.

Pakistani Prime Minister Nawaz Sharif quickly extended an invitation for Modi to visit, supporting his agenda of economic revival.

“In order to resolve disputes, you need better relations and more dialogue, and improving economic ties is the best way to get there,” Sartaj Aziz, Sharif’s adviser on national security and foreign affairs, told Reuters.

But Islamabad’s intelligence and security establishment views Modi as an adversary and expects him to take a tough line. “Modi has always rallied against Pakistan,” said a top Pakistani defense official. “He’s openly suggesting cross-border covert ops against Pakistan. Under him, there will be much, much more muscular Indian diplomacy.”

Modi may make Japan the first country he visits, with negotiations under way between his BJP and government officials in Tokyo, senior sources in the party said Saturday. They confirmed that Japan has sent a “fresh invitation” to the BJP for Modi to visit Tokyo following his election victory.

“We are in direct touch with the Japanese government, and working in the direction of finalizing Modi’s visit to Japan after he becomes the prime minister,” with Japan having first requested a visit from Modi around five months ago, the sources said.Modi attaches special significance to Japan, welcoming investment by Japanese companies in the western state of Gujarat during his 12-year stint as chief minister.

He has visited Japan at least twice, in 2007 and 2012, and has met Prime Minister Shinzo Abe — a world leader whom he admires.

The two countries have yet to conclude a proposed nuclear power agreement, and talks are ongoing on Japan supplying its U.S.-2 amphibious planes to India’s military for search and rescue purposes as well as exporting shinkansen high-speed rail technology.

The BJP’s 2014 election manifesto, thought to have been drafted at Modi’s direction, specifically mentions implementing the high-speed train network.

Foreign agenda

Modi’s compelling victory, in which the BJP claimed India’s strongest mandate in 30 years, will assure him greater control over India’s trade and security agenda.

“The challenge for India is no longer about the world impinging on its choices, but to use its economic and political weight to shape the external environment to its benefit,” journalist and commentator C. Raja Mohan wrote recently for the Carnegie Endowment for International Peace.

Possibly sensing the strength of the political tailwind sweeping Modi toward power, Washington sent a coded message of warmth as voting ended on Monday, calling India’s election an “inspiring example” of democracy.

Washington denied Modi a visa in 2005 over sectarian riots in Gujarat three years earlier, when he had just become chief minister of the state, in which more than 1,000 people, most of them Muslims, were killed. Modi has denied any wrongdoing and an inquiry ordered by India’s Supreme Court found no case to answer.

U.S. diplomats say he will now be welcome to visit. But instead of rolling out the red carpet, a first meeting is likely to come on the fringes of the United Nations General Assembly in New York later in the autumn.

Washington wants to quintuple trade with India to half a trillion dollars, but India’s $11 billion bilateral surplus has created friction in areas like pharmaceuticals that will have to be addressed once Modi forms a government.

But analysts believe he could bring a new assertiveness to the table.

“The question is not how the U.S. would deal with a Modi victory — the question is rather how Modi would want to deal with the U.S.,” said David Sloan, Asia director of the Eurasia Group political risk consultancy.

British Prime Minister David Cameron had no hesitation in calling to congratulate the prime minister-elect and has already invited him to visit — an invitation Modi accepted.

Getting involved in trade initiatives like the U.S.-backed Trans-Pacific Partnership or wrapping up a long-delayed free trade deal with the European Union will be vital to delivering on Modi’s promise to create millions of new jobs every year.

Relations with China

India runs a trade deficit of nearly $40 billion with China, which, thanks to its embrace of export-led growth, now has an economy four times larger. Modi wants follow a similar path of job-intensive growth, but for the time being will be able to do little to narrow China’s 3-to-1 lead in defense spending.

Analysts and diplomats said Modi will have an opportunity to revive a dormant process to delineate the long Indo-Chinese border. In return he might want to tie progress there to greater access to the Chinese market and stem the type of outward infrastructure investments that has helped Beijing to acquire friends and influence in India’s backyard.