“Foundations of power in the modern world are built in the sinews of the economy and not through military muscle. The age of geoeconomics is upon us…and this will necessarily have geopolitical consequences.”1.
India needs to build geoeconomic ties with countries with whom it shares geopolitical interests. We buy fuel and weapons from countries that are not amongst our top trading partners. Many of India’s relations are not well-rounded. Indo-Russian interests hover around military purchases. Indo-Iranian exchange is centered on gas imports. “The absence of a broader, deeper more balanced economic engagement” with these countries leads to India being on the backfoot. A taste of this can be found in Russian negotiating tactics on arms and aircraft purchases. In 2005 The Iranians unilaterally repudiated a $21billion deal after India voted to refer Iran’s nuclear programme to the UNSC. 2
To address this:
1. India needs to diversify supply.
2. Buy arms and energy from our trading partners- US and Europe.
3. Broaden economic engagement with our energy and arms suppliers.
1. Sanjaya Baru, “The Age of Geoeconomics”, Business Standard, 8/8/2011.
2. Nitin Pai, “Time to broaden strategic ties”, Business Standard, 8/8/2011.