23 July 2015

India’s strategic importance is growing with the country’s economy

Within five years India will probably have the world’s sixth largest economy and the fourth largest defence budget covering an increased nuclear capability and a modernised oceangoing navy.

The FOI Memo “Indiens växande ekonomiska och strategiska betydelse” [India’s growing economic and strategic importance] reports the International Monetary Fund’s assessment that in the next few years India will become the world’s fastest growing economy, due to factors such as the improved business climate, the rising level of education, tax reforms and a reduction in corruption. It foresees further development that by 2020 will make India the world’s sixth largest economy – and by 2025 the third largest after China and the United States.

Improvements in India’s economy provide headroom for increased spending on defence which in turn results in extensive investment in a modern oceangoing navy capable, for example, of counterbalancing the Chinese presence in the Indian Ocean. It also means that India will soon possess, in common with the United Sates, Russia and China, a nuclear triad consisting of strategic bombers, intercontinental missiles and strategic submarines.

At the same time, the report stresses that India’s non-alignment could well lead to closer relations with many countries, for example the United States, the EU and Russia, and quite possibly with the Arab states and Israel. Such developments would give India generous room for manoeuvre in global politics.

“India’s close relations with Moscow have deepened over the last decade. For example, India has not condemned Russia’s actions in Crimea and Ukraine. At the same time we see a shift in India’s defence industry relations with more equipment being purchased from the United States and less from Russia,” says the report’s author Samuel Bergenwall who has recently returned home after six months as a guest researcher at the Indian research institute IDSA, the Institute for Defence Studies and Analyses.

The Memo notes that India’s new role as an emergent economic great power has meant that the country’s historic focus on South Asia has now expanded to embrace an area stretching from East Africa and the Gulf region in the west to East Asia in the east, and from Central Asia in the north to the Indian Ocean archipelago in the south. Meanwhile, however, relations with neighbouring Pakistan, and indeed with China, still remain somewhat strained.

“India’s relations with Pakistan tend to fluctuate. But most Indian security experts do not see Pakistan as the greatest problem. They are more concerned about China’s actions and the Chinese support for Pakistan. At the same time, however, trade between India and China has never been greater than it is today,” says Samuel Bergenwall.

These developments mean that the government in New Delhi now sees the country as a clear aspirant for a permanent seat on the UN’s Security Council and in other multilateral forums.

A stronger India also affects Sweden.

“Both as a bigger market for Swedish products but also because India now has a much stronger voice in matters of climate change, international law and free trade questions,” concludes Samuel Bergenwall.