Wednesday, 10 August 2011

Combining Geoeconomic and Geopolitical interests

“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.


  1. I could very well understand Geoeconomic interests, broadly speaking more and more diversified trade for a nation .. but I am not very much clear about "Geopolitical interests" .. can u explain with some examples ?? .. Does buying arms or importing oil these things constitute Geopolitical interests .. I am confused !!!

  2. 'Geopolitics' is a method of political analysis which emphasises the role of geography in international relations. Coined in 1899, it was believed that geographical aspects determined the power-potential of a nation. The aspects of geography taken into account are- territory, population, strategic location and natural resource endowments.

    To understand geopolitical basis of international relations (IR) it is interesting to trace some of India’s foreign relations: The strategic relations that India developed in the post-independence era was shaped by cold war politics. Some analysts argue that post-independence, India’s driving interest was to be free of imperialism. At this time the USSR and USA were engaged in a global competition for influence and dominance. Indians believed that the US with its superior naval capability harboured hopes of becoming the dominant maritime power, and had set its sights on the Indian Ocean. India did not wish to replace the British with the Americans, and its only recourse was a strong relationship with the USSR. The reason India felt that the USSR could not dominate them and impose a satellite-status on them was, because of the absence of any land route to India and absence of a strong Soviet navy. Therefore India strove forth in building its relationship with the USSR as a counter to USA.
    In 1992, the collapse of the Soviet Union changed the strategic environment of India. Further, in 2001, American and Indian interests converged (both were victims of terrorism emanating from the same place-AfPak). Thus both are happy to pressurize Pakistan to act more decisively against terrorists on its soil.1

    Using this info to answer your question, I feel that what is being implied in ‘combining geopolitical and geoeconomic interests’, is that India has developed relations with some countries for geopolitical reasons. These geopolitical interests have to be maintained for strategic reasons. However what is needed is, to strengthen these geopolitical relations by increasing and intensifying the geo-economic relations. It must be noted that in this era, it is geoeconomics that imparts strength to IR.

    Both the Russian and Iranian example, fall into the arena of geopolitics. Russia- because of explanation above, and arms purchases conveys geopolitical support. Iran because natural gas is a natural resource, and Iran has second biggest reserves in the world- thus India has to maintain relationship with it for its own energy security.

    I think the author of the article, Nitin Pai, mainly wants to convey that relations should be multi-faceted, and not limited to one area (military purchases, gas etc), else they are held to ransom as was indicated in the Russia and Iranian example.


  3. I really appreciate ur efforts .. thanx !

  4. :) Your questions helped me clarify my concepts too. Often one uses technical terms without fully understanding them- i was corrected in this respect.
    Welcome all future queries. & good luck for prep.

  5. Also, geopolitics is combined in geo-economics through the TAPI pipeline: US-India combining in Afghanistan to counter Iran; This strengthens US foothold in S.Asia, giving it ties with Pakistan and India; while keeping a check on Russia and China in Afghan ambitions.

    And again, geopolitics and geoeconomics are crucial for India in Persian gulf thru which it imports oil-that's why Indian Navy is patrolling the high seas and capturing Somali pirates there.

    Your blog is useful, and I like the way you research and present so many topics! Keep it up

  6. TAPI is an excellent contemporary example, as are all the others- thanks.

  7. Flag follows trade:
    Business is taking Indian's international relations in new directions. The quantum of FDI in India has grown (US$37700mill in 2009-10; US$27000mill in 2010-11); as also have Indian investments abroad (Acquisition of Tata Steel of British Corus Steel).
    Business has strengthened political relations in the following cases:
    - US: In 2002 a Track2 dialogue with US was started, where CII convened a group of Indian businessmen and diplomats-very succesful.
    - Japan: the success of the US initiative, led GOI to ask CII to start a similar dialogue with Japan.
    - Chile: India's bilateral trade quadrupled in 3 years from 2005-08. This prompted a visit by President Patil.
    Thus increasingly business is being looked upon as a strategic partner in the foreign policy establishment. Such integration has prompted a merger of ministries of foreign affairs and trade in Australia. India has taken a step in this direction by setting up the 'Trade and Economic Relations Committee' comprising the PM, finance, foreign and commerce ministers- who collectively run the 'economic diplomacy' of the country.

    Ref:"When the flag follows trade", The Times of India, 3rd May 2011.

  8. Geo-politics as per my knowledge is using geological and geographical factors change political scenario i.e power equations in a country.

    For e.g.: France having access to water has gained much more in terms to power was compared to Switzerland, a land-locked nation.

    But the theory is often criticized for its simplicity; un-considering technological progress.