The “New India” Vision and the Building of a Closer China-india Partnership

Prime Minister Modi’s “New India” vision, which has blossomed into a great-power strategy for India’s rise, will not only bring about changes in India and in India’s relationship with the outside world, but also reshape China-india relations. Building a closer China-india developmental partnership is conducive to mutual enhancement of the two countries’ development and complementarity of their respective advantages.

The “New India” vision, the administrative goal proposed by Indian Prime Minister Narendra Modi in his first term of office, has blossomed into a great-power strategy for India’s rise. Implementation of the strategy will not only bring about changes in India and in India’s relationship with the outside world, but also influence, indeed reshape, China-india relations.

New India: From Administrative Goal to Great-power Strategy

In May 2014, following the election victory of the Bharatiya Janata Party (BJP) after a lapse of ten years, Modi put forward the “New India” vision, declaring his intention of building a country that is “poverty-free, corruption-free, clean, terrorism-free, and communalism-free.” The vision was subsequently subject to detailed planning with concrete implementation measures proposed. With the BJP’S overwhelming victory in May 2019 general election and Modi winning his second term of office, the “New India” vision has advanced at an accelerated pace.1 Over the five years, “New India” has been transformed from a slogan of the Modi government into a strategy and an action plan outlining India’s rise as a major power, and

containing the following characteristics.

First, a magnificent economic growth target is outlined.2 For Modi, the “New India” vision is a strategic plan that propels India’s national rise and rejuvenation. India will become the country with the biggest population in the world by 2030, and is expected to be the world’s third-largest economy. It took 70 years for India’s economy to grow to US$2 trillion, but only one year to grow to a further $3 trillion, with the estimate of an additional $2-trillion expansion of the Indian economy over the next five years within reach. In his address to the nation on India’s Independence Day in 2019, Modi unveiled the economic growth target in his second term of office, which foresees a $5-trillion economy by 2024.3 Previously, Modi also indicated that India’s economic size could well surpass $10 trillion before 2030 should its growth rate be maintained. By that time, India’s per capita GDP would then be around the current level of average income in countries such as Argentina or Chile.

Second, a Modi-style development concept is promoted. To win more popular participation and support, Modi has vowed to create a “New India” that lives up to Mahatma Gandhi’s dreams, “which is clean and environmentally-friendly, where every individual is fit and healthy, where every mother, every child is nourished, where every citizen feels safe.” The “New India” that Modi pledged to build would be “free from discrimination, and possess harmony,” following the ideals of Sabka Saath, Sabka Vikas, Sabka Vishwas (everyone’s support, everyone’s development and everyone’s trust).4 To achieve this, Modi has announced a number of social welfare plans, such as “Modicare,” which aims to provide 500 million people under poverty with quality medical care and offers up to 500,000 rupees in support to qualified families, and “Pradhan Mantri Ujjwala Yojana (PMUY),” which

targets Indian families below the poverty line and aims at reducing the burden on women of impoverished households by replacing unclean fuel with liquefied petroleum gas (LPG). Launched in May 2016, PMUY has now benefited 72 million people.

Third, development of the manufacturing sector is strongly encouraged. Modi’s “Make in India” initiative, as the flagship project of his “New India” vision, aims to build India into a new global manufacturing center. To this end, Modi has established more than 400 special zones after taking office, and launched plans such as “Digital India,” “Skill India” and “Startup India,” vowing to increase the share of the manufacturing sector in the country’s GDP to over 25% and creating an additional 100 million jobs.5 Modi has also promised to increase government investment, accelerate the process of reforms, promote infrastructure construction, and attract more foreign capital, hoping investors at home and abroad will take full advantage of India’s tremendous demographic dividend to boost manufacturing development.

Fourth, the “New India” vision strives for building an effective and strong government. First, Modi has proposed “cooperative federalism” to streamline central-local relations and reduce the institutional barriers for advancing “New India.” A symbolic event in this regard is the establishment of the National Institution for Transforming India (NITI), replacing the Planning Commission, which played a major role in India’s macro-economic policy-making process since national independence. This measure has provided Modi with an important platform to coordinate the development plans of the central and state governments.6 Second, Modi has worked to strengthen the consciousness of “one nation.” By promoting “one nation, one tax, one election, one constitution,” Modi aims to consolidate the federal government’s dominant position through

tax, electoral and legal reforms.7 Third, Modi has leveraged the power of BJP to advance domestic political and social transformation.8 Since taking office, Modi has made historic progress in implementing the BJP’S three core agendas, namely revoking the special status to Jammu and Kashmir granted under Article 370 of the Indian constitution, rebuilding a grand temple for the Hindu warrior god Ram on a plot of land in Ayodhya, and pushing for a uniform civil code for all citizens. The first two promises have been fulfilled. In addition, Modi has proposed rewriting the narrative of India’s history, accelerating an amendment to the Indian citizenship law, and passing legislation against violent terrorist activities. By giving priority to the interests and political appeals of Hindu religious groups, Modi hopes to win support from the BJP’S conservative forces for his policy objectives and especially his major reforms.9

Fifth, the “New India” vision puts national interests first in the country’s diplomacy as a major power. In May 2015, less than a year after taking office, Modi explicitly set forth the goal to build India into a leading global major power. Guided by this strategic objective, India has further broken through the shackles of non-alignment in its foreign policy concept and is actively promoting all-round majorpower diplomacy.10 Meanwhile, India has shifted its diplomatic focus in order to turn the favorable external environment into a positive factor for domestic development, hoping to facilitate its overall rise through proactive economic diplomacy. To optimize its diplomatic profile, while actively maneuvering its way among great powers, India has concentrated on maintaining and strengthening its dominant position

in South Asia, expediting engagement in East Asia, Southeast Asia, the Middle East and Africa, and seeking new breakthroughs in multilateral diplomacy. First, in South Asia, India has advanced the building of subregional and cross-regional cooperation mechanisms that it leads, while sticking to isolating and countering Pakistan, and guarding against any external forces that may pose a challenge to its regional dominance. Second, with the “Act East” policy, India has actively deepened relations with ASEAN and Southeast Asian countries, and expanded interactions with Japan, Australia and South Korea. Third, India has put forward its own version of the Indo-pacific vision, and made great efforts to play a leading role in Indo-pacific maritime affairs and security cooperation. By demonstrating strategic autonomy in Indopacific great-power competition, India is seeking for more substantial economic benefits. Fourth, India has accelerated its westward advance into the Middle East and the Gulf region, increasing its presence by active engagement in regional affairs. In recent years, Modi has paid frequent visits to major regional powers such as Saudi Arabia, the United Arab Emirates and Israel, and continued its energy cooperation with Iran despite US sanctions, in an effort to safeguard its energy and economic security interests.11 Fifth, India has been playing an active role in global governance reform. Whether in climate change, disaster prevention and relief, humanitarian assistance, or other global and regional challenges, India has become actively involved and is seeking to create new multilateral cooperation mechanisms. For example, the International Solar Alliance, established by India in partnership with France, has been endorsed by more than 120 countries worldwide, which greatly enhances the influence and voice of India on the issue of climate change.

Achievements and Challenges of the “New India” Vision

Since its independence in 1947, it has been the aspiration of the whole Indian nation and the political ambition of the Indian leadership to build the country into a proactive major power with global status and influence.12 For the first time, Modi’s “New India” vision turned the strategic goal of India’s rise into specific and clear objectives, with a program of action and the means of implementation clearly formulated. Over the five years since the proposal of “New India,” the overall effect has been significant, especially in projects aimed at the well-being of society and people’s livelihood.

Politically, the “New India” vision has brought massive benefits for Modi and the BJP. In particular, India’s ordinary citizens are willing to support Modi and the BJP due to their expectation of specific development achievements as they have already enjoyed. As India’s Foreign Minister Subrahmanyam Jaishankar publicly revealed, the BJP and Modi’s reelection victory in May 2019 should be attributed to the “New India” vision and the timely implementation of social welfare projects such as affordable housing, clean toilets, micro-finance, and household fuel gas.13

Economically, a series of major reforms have been made to realize the “New India” vision, which not only stimulates India’s economic growth potential but also boosts confidence for investors at home and abroad. Since 2014, India’s economy has witnessed an average growth rate of more than 7%, which surpasses other emerging market economies in the same period. India’s business environment is also constantly improving. According to relevant reports, India is one of the ten major economies that have experienced the most remarkable progress in terms of business environment. In 2018, India ranked 63rd globally in this regard, up from

merely 142nd in 2013.14

Internationally, the “New India” vision has consolidated India’s geostrategic position. The decisiveness of Modi’s strong government over the past five years has not only attracted attention from the Western strategic studies community, but has also been well recognized by global business circles. As economic and trade frictions between China and the United States have intensified since 2018, a variety of interest groups in India, while closely following the negotiation process between the two countries, have begun discussing how they can reap benefits from the situation. The Indian business community has proposed that the government and enterprises should actively get prepared for industrial and investment transfer.15

With the advance of Modi’s “New India” vision, however, India is also witnessing mounting difficulties and challenges, which have become increasingly prominent after Modi was re-elected.

First is the slowing economic growth rate. Since the first half of 2019, various international organizations and transnational bodies have revised their forecasts downward for India’s economic growth rate. International ratings agency Moody’s Investors Service has downgraded India’s economic outlook to negative from stable, with a forecast of 5.6% for the country’s actual growth rate in 2019, which is significantly lower than 7.4% in 2018.16 The Indian government’s research institute has also come to the conclusion that there has been an economic slowdown, with more focus on the extent of the slowdown. According to the latest forecast by the OECD, India’s GDP growth rate from 2020 to 2024 would be 6.6%, compared to 7.4%

from 2013 to 2017. The sluggish growth of the Indian economy is mostly attributed to the combined influence of structural and cyclical factors, and is to some extent also affected by the external environment. Besides the economic slowdown, problems like environmental deterioration, which concern India’s sustainable development, are becoming more and more serious. Since the winter of 2019 began, air pollution in New Delhi’s neighborhood has reached an unbearable level. What is more worrisome for investors at home and abroad, the Modi government seems unable to come up with an effective response to the country’s economic slowdown. The existing stimulus measures have failed to have an effect, and the marginal benefits of relevant policies are diminishing. The deceleration of India’s reform process results in the overall flagging confidence of the domestic business community.17

Second is the rising religious nationalism in the country. The chronic sectarian and ethnic contradictions and conflicts in India have been a breeding ground for extreme nationalism, religious fanaticism and separatism. For a long time, successive governments in India of different partisan views have insisted on secularism and adopted a policy of “unity in diversity,” which has to some extent maintained social harmony and domestic stability. However, a number of social policies carried out by the Modi government to advance economic reform are highly controversial. For example, the attempt to promote a new law against “forced religious conversion” in the Indian parliament has aroused concern from the country’s social elite, who worry about the emergence of new sectarian conflicts.18 Even today, sectarian relations and social policy are still sensitive issues in domestic politics.19 While recently the Modi government has taken the opportunity of the 150th anniversary of Mahatma Gandhi’s birth

to advocate his spirit of mutual respect and caring among different ethnic and sectarian groups, the effect of this remains to be seen.20 In addition, due to religious, historical, cultural as well as geopolitical reasons, sectarian conflicts within India usually spill over the border to affect the country’s relations with its neighbors. In fact, religious factors have been highly visible in recent years in the continuous strained relationship between India and Pakistan .

Third is the widening gap between the need to accelerate openingup and the pressure to protect disadvantaged populations. India’s political system requires parties and their leaders to participate in elections to win a mandate from voters on a regular basis, which poses a complicated challenge for the government and its leader to promote economic reform and handle domestic politics at the same time. This constitutes a main reason for the slow progress of the country’s economic reform and the long-time absence of major breakthroughs. After taking office, Modi has forcefully advanced drastic measures including banknote demonetization and tax reform, which boosts the confidence of investors at home and abroad. They expect the Indian Prime Minister to take a further step and resolve land, labor, and other intractable issues that hinder the country’s economic development. However, India’s negotiation stance on regional and bilateral free trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) casts doubt upon the sustainability of Modi’s reform. In early November 2019, India failed to conclude textbased negotiations of the RCEP together with the other 15 countries. According to Modi, the decision to opt out of the trade deal was made because “neither the Talisman of Gandhiji nor my own conscience permits me to join RCEP.” Foreign Minister Jaishankar also asserted that “no agreement at this time was better than a bad agreement.” BJP President and Minister of Home Affairs Amit Shah even wrote an article, in which

he indicated that Modi’s action has safeguarded India’s national interests and “kept India first,” demonstrating the country’s resolution to resist any external pressure. He claimed that the Indian government has begun to reevaluate the free trade agreement with ASEAN and is working on getting into trade relations with Japan, the US and EU countries.21

India’s withdrawal from RCEP negotiations is the result of its failure to deepen structural reform, which demonstrates in a negative way that the country’s relevant reform measures are so lagging behind that an immediate response has become a must. Sanjay Baru, who was an advisor to Modi’s predecessor Manmohan Singh, criticized the Modi government’s position on the RCEP, saying that India’s withdrawal is not worth celebrating, let alone a diplomatic victory. There is also expert opinion which says the Modi government should take the opportunity to advance its development strategic plans, including those for special economic zones, as soon as possible to enhance India’s competitiveness in a fundamental way.22

It has been nearly 30 years since India launched economic reform in 1991. Despite major progress, some outstanding structural problems have been accumulated in the process. In the context of accelerated economic globalization and regional integration, these issues have become rather complicated with a lack of domestic consensus to address them. However, if left unresolved for long, the issues may eventually hinder the reform process itself. Modi’s “New India” vision is an effort to promote domestic consensus and make some breakthroughs on these issues, which ultimately is conducive to the fulfillment of the vison itself. The strong reaction of the international community to India’s withdrawal from RCEP negotiations and the relevant domestic debate of the same is to some extent a reflection of the controversy over Modi’s reform process and even India’s development

model. Some Western scholars have begun to doubt whether India is truly able to face up to and address the constraining factors in its domestic political system.23 Admittedly, the international community should show full understanding for India’s national conditions. However, it is not beneficial to India’s own reform and development if the country stubbornly sticks to its position when participating in regional integration and the evolving global governance system, insisting on “India first” or even “India superiority,” politicizing economic and trade issues, or laying the blame on negotiation partners when difficulties arise, counting on other countries to make concessions.

Building a Closer China-india Developmental Partnership

There are commonalities between the objectives of Modi’s “New India” vision and China’s “two centennial goals.” Only four months after Modi put forward “New India,” Chinese and Indian leaders agreed to build a closer developmental partnership between the two countries.24 The strategic planning at the top level, made in view of the realistic needs of the bilateral relationship, reflects the unity of strategic and pragmatic dimensions and that of long-term and intermediate considerations in China-india relations, which is conducive to the mutual enhancement of the two countries’ development and the complementarity of their respective advantages.

Despite twists and turns, China-india relations over the past five years have eventually returned to the right track with a steady and positive trend. In April 2018 and October 2019, Chinese President Xi Jinping had informal meetings with Modi in China’s Wuhan and India’s Chennai

respectively. The “Wuhan Spirit” and the “Chennai Connect,” as the toplevel design and strategic guidance for future development of China-india relations, have synergized the Chinese Dream and the “New India” vision. For their interactions in the next stage, the two sides should hold fast to their strategic vision for common development, resolutely advance the strategic objective of building a closer developmental partnership, actively participate in and support each other’s development based on principles of mutual respect, equality and reciprocity, enrich the content of cooperation while enhancing its effectiveness, and improve the stability, maturity and sense of gain in bilateral relations.

First, China and India should actively exchange their experience in national governance in order to enrich their closer developmental partnership. The difference between the two countries in terms of historical and cultural backgrounds as well as political systems determines their disparate development paths. However, neither development model is superior to the other, and the discrepancy should not undermine normal dialogues and communication between the two countries. With similar national conditions and development interests, there is sufficient need for China and India to communicate and exchange ideas in this regard. The two sides should take full advantage of the various dialogue mechanisms and deepen their exchanges with regard to their experience of governance, while exploring opportunities for participating in each other’s new round of reform and development. At the same time, the relevant authorities of the two countries should actively promote communication and cooperation in agriculture and rural affairs, poverty alleviation and poverty reduction, basic health care, and other social development issues, in order to expand the scope of bilateral connections.

Second, China and India should take the opportunity to explore a bilateral manufacturing partnership to deepen their pragmatic cooperation and enhance the effectiveness of their cooperation. Governments of the two sides should step up policy guidance and assistance for investment and business operations of their respective enterprises, especially small and

medium-sized ones, in the other’s country. By helping relevant companies understand local regulations and policies, indiscriminate investment can be reduced and risk management enhanced. The two countries should also give full play to the newly established high-level economic and trade dialogue mechanism, continue their negotiations on bilateral trade arrangements, and show an active attitude towards the other’s concerns. Based on the principles of equality and mutual benefits, they can collectively work to resolve issues in bilateral trade and investment, and address each other’s concerns with regard to market access in a reciprocal manner. In addition, they should accelerate energy cooperation to effectively respond to climate change and achieve sustainable development.

Third, under the “China-india plus” model, the two countries should together play a leading role in the reform of global economic governance. They should strengthen coordination and cooperation in international and multilateral mechanisms, explore the possibility of a China-india development cooperation fund, and encourage enterprises of both sides to expand third-party markets through mutual equity participation and financing. Under the “China-india plus” model, the two countries can jointly formulate infrastructure project standards and principles that suit the local conditions of relevant countries and regions, and advance high-quality infrastructure construction and regional connectivity. In particular, third-party cooperation can be accelerated in South Asia, Africa and the Indian Ocean region, with the focus on connectivity projects and ecological conservation. Moreover, China and India should fully mobilize mechanisms such as the Shanghai Cooperation Organization, the Russia-india-china grouping and BRICS, to advance partnerships in the era of a new industrial revolution. At the same time, the two countries should work together to establish and lead new mechanisms and enrich bilateral scientific and technological cooperation, particularly stepping up cooperation in areas such as artificial intelligence, to actively handle opportunities and challenges in the new phase of the industrial revolution. As India is to host the G20 summit in 2022, the two nations can deepen

coordination on the issue of global economic governance reform, and enhance the collective voice of developing countries. Last but not least, China and India can cooperate on the issue of WTO reform, with the aim of safeguarding multilateralism and building an open world economic system.

Fourth, China and India should continue their security dialogue to improve strategic mutual trust while managing disputes and contradictions. To make the bilateral communication in the security field more effective, the two sides should conduct in-depth exchange of their respective views on development and security. The content of such dialogues on military and security affairs should also be enriched to enhance mutual trust and mutual understanding. While resolutely implementing the strategic consensus of the two countries’ leaders, the tranquility and stability of the border area should be guaranteed in order to create the proper conditions for final settlement of border disputes in a just and rational manner.

Fifth, cultural and people-to-people exchanges create the basis in public opinion for amicable bilateral relations. China and India should jointly promote the dialogue of Asian civilizations, and turn the pride of Chinese and Indian peoples in their respective development achievements into pride in the rise of Asia as a whole. The governments of the two countries should continue to support and encourage the universities and research institutes of both sides to conduct basic studies in each other’s national conditions, in particular in the social, cultural, religious, political and local dimensions, as well as in the history of civilizational mutual learning. Additionally, in-depth dialogue between the two countries’ media outlets is necessary to help them comprehensively and objectively understand the significance of China-india common development, thus cultivating a favorable opinion for harmonious co-existence of the two sides, who will be playing a leading role in the sustainable development of Asia and of the vast number of developing countries.