OPINION Vol.1, No.1 June 2013 - National Defence University

The “pro-business” reforms of Mr Rajiv’s era were followed by what were known as the “promarket”
reforms spearheaded by Mr Manmohan Singh in 1991. Under these reforms, licence raj system
was abolished; government allowed foreign direct investment (FDI) and opened up numerous state
monopolies to private sector especially in telecommunications and air transport while the banking and
financial systems were liberalized.
However, reforms fell short of being far-reaching, as the ‘Inspector Raj’ system and the labour law
remained untouched, but India finally opened up to an already globalized world. At the turn of the
millennium, ‘liberalization, privatization and globalization related economic reforms’ surged the growth
rate, touching the 8 percent mark for the first time in the financial year 2003-04 and the tempo was
maintained in the following years. Given the high economic growth, the Indian media increasingly spread
euphoria and the government was prompted to raise the growth target until World Economic Recession
struck in 2008. Slogans of ‘SHINING INDIA’ and ‘INCREDIBLE INDIA” were coined in the same
period and projected to make the world believe what was far from reality.
In Oct 2012, second wave of reforms was approved by the Indian Cabinet, further facilitating FDI
(51 percent in multi-brand retail, allowed foreign airlines to buy 49 percent stakes in Indian carriers, and
raised the FDI cap in broadcasting services from 49 percent to 75 percent) 8 . The wave has injected some
hopes in maintaining the desired growth rates. However, at the same time, it has also stirred the political
undercurrents in the Congress led coalition (United Progressive Alliance) and the opposition.
India’s Strategic Culture
Indian strategic thought process and Foreign Policy has been influenced by the Kautilya’s
Arthashastra 9 . Mandala theory of foreign policy given by Kautalia, outlines cardinal principles 10 which are
evident in the practice of Indian foreign policy:-
Ambition to increase power and territory should never be allowed to die down.
Always be wary of your neighbouring states. Consider them to be your enemies.
Establish friendly ties with neighbours of your neighbours.
Friendship with other states should always be to acquire benefits from such ties.
Greater powers should be cultivated, equal or weaker powers could be defeated through judicious
alliances.
Weaker powers could be attacked, patronized or ignored.
Always be prepared for war using various stratagems and be ruthless in war.
Resort to propaganda, sabotage and psychological warfare against other states.
Infiltrate your agents to act as fifth columnists and all this should be done clandestinely.
Employ bribery and other means leading to economic strangulation of the adversary states.
Buy traitors in neighbouring states at all costs.
Peace should be invoked only when you feel that you are about to be defeated or that your interests
will be served better by resorting to peace. Strike as soon as you are in a stronger position or your
adversary is in disarray even if you have a treaty of peace with him.
Indian Emerging Strategic Orientation
Presently, India is at a pivotal moment in its history. The extraordinary changes of the last two
decades are fundamentally transforming Indian economy and society. The foundations of Indian success
will, therefore, depend on its strategic and developmental orientation. Indian core objectives at strategic
plane encompass 11 :-
Retain maximum strategic autonomy to pursue her developmental goals.
Deepening economic engagement with the outside world at all levels: trade, labour, technology
and innovation. Correspondingly, an increasing range of Indian strategic interests entail, attracting
maximum FDI through projection of soft power, securing energy and other vital natural resources,
protecting the rights of Indian labour, maintaining and protect sea lines of communication,
OPINION Vol.1 No.1 34 June 2013