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Abhishek Singh asked: Is the Indian foreign policy being increasingly shaped by the neoliberal outlook?

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  • Ashok Kumar Behuria replies: The term 'neoliberalism' has an economic refrain. It advocates a free market, laissez-faire economy. In international relations, neoliberal institutionalism has a slightly modified tenor that lays emphasis on economic interdependence which has been a marked feature of international politics in the post-Cold War period. Such interdependence leads to inter-connectedness and linkage that ensures peace and reduces the probability of conflict between states. The concept of geo-economics that seems to guide foreign policy behaviour of states today is also regarded as a derivative of this approach whereby a great deal of emphasis is laid on trade and commerce, unencumbered by restrictions (tariffs) and narrow nationalist protectionist considerations, which would ensure global peace and prosperity, occasioned by the interlocking of interests that lead to what some writers have termed as 'complex interdependence'.

    A neoliberal foreign policy warrants cooperation in the economic sector irrespective of political and ideological differences among states. In recent decades, India has shown its inclination for neoliberalism as far as its foreign economic policy is concerned. There is an underlying optimism that such interaction would create a web of interdependence that would engender greater mutual understanding and harmony. 

    At the 2018 World Economic Forum in Davos, Indian Prime Minister Narendra Modi spoke eloquently in favour of free trade and slammed protectionism. In its relations with the outer world, India has emphasised free trade agreements (FTAs) and expressed its desire to toe a neoliberal line. India is in the process of signing FTAs with many countries, often privileging trade and commerce over political considerations. India has either negotiated or signed FTAs with more than 35 countries and consultations are on with many other counties.      

    Neoliberal foreign policy has been the trend the world over in the days of globalisation and hyper-communication. However, despite the advent of neoliberalism, most countries including India do resort to soft-protectionism in the name of cushioning the domestic economy or in their dealings with states perceived as hostile. Even powerful countries like the United States have also demonstrated their selective aversion to free trade. The smaller neighbours of India continue to talk about non-tariff and para-tariff barriers being raised by India to disallow commodities from the neighbourhood in the name of protecting domestic producers.   

    Thus, while India's foreign policy may be taking an inevitable neoliberal turn, its pace and progress will continue to be delimited by realist considerations that define its national interest. 

    Posted on 21 February 2022

    Views expressed are of the expert and do not necessarily reflect the views of the Manohar Parrikar IDSA or the Government of India.