NEW DELHI (TIP): “Had a telephonic conversation with Chancellor Merkel. Wished her on her birthday and congratulated her on Germany‘s win at the FIFA World Cup,” tweeted prime minister Narendra Modi. For a prime minister who people said was more interested in the economy and domestic politics, Modi appears to be enjoying himself hugely on the international stage, and judging by reports, quite good at it.
If there was any awkwardness over the fact that Merkel had stood him up at dinner last Sunday, Modi did not let it ruffle him or tie up his diplomacy. In fact, in Fortaleza and Brasilia this week, Modi played the bigger game with two important counterparts, Xi Jinping and Vladimir Putin. (He’s no slouch in the sartorial department either, whether in a pink kurta in Berlin or a casually draped scarf in Brazil).
Xi Jinping set a cat among the pigeons by inviting Modi over to Beijing for the APEC summit. The US and other western countries will find it extraordinarily hard to resist bringing India into the APEC tent after this. For India, an entry into APEC will allow Modi to integrate India more closely into the global system, make the changes in India’s tariff structures and other systems of economic governance he needs to bring India’s rates to Asean levels.
At some point, India might even make the grade to the transpacific partnership (TPP). But APEC is the gateway to TPP. Notwithstanding the critics, the BRICS Bank is the biggest challenge to the Fund/Bank sisterhood. India didnt really stand a chance about hosting the headquarters, so Modi didn’t waste precious capital on it. It was always going to be headquartered in Shanghai. This was also agreed to by the UPA government.
In any case, China as the largest BRICS economy and the deepest pockets is naturally going to dominate the Bank despite the fact that everybody has an equal share. But an Indian will head the Bank for the first six years. In all these decades, no Indian has ever headed the IMF or World Bank. And the chairmanship will be a rotational thing. That’s a big deal for India and will overshadow critics who wonder whether the new bank will fund projects in Arunachal Pradesh.
India doesn’t even go to the ADB for that. The Modi-Xi tango would not be unnoticed in Washington and important as the US Congress takes a call on increasing India’s voting power in the IMF. On a more political front, Modi has agreed to visit China and Xi will be in India in September — before Modi flies off the Washington DC to meet Barack Obama and after he makes his first trip to see Shinzo Abe. India needs all three — China, Japan and US to fulfil its developmental goals.
Modi is playing a deep political game as he opens India for business with all three. His effusiveness with Vladimir Putin incorporated more layers. Russia is indeed India’s oldest partner, as Modi informed Putin. But beyond the nuclear energy, Kudankulam and defence supplies, India signaled solidarity with Russia at a time when Putin is a bad name in the west for his Ukrainian misadventure. After Russia signed a $400 billion gas deal with China and help out the promise of weapons sales to Pakistan, India has worried that its old friend might end up in the Chinese basket.
That would have adverse implications for India in the long run. Putin can expect a fulsome welcome when he visits in December. Modi has ordered a reset of relations with the US, necessary after the last few bad years. How Washington responds to Modi will determine the strategic matrix India’s new PM is working on.