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Summary
The perception of India's investments in Africa is not overlooked and criticised in the way China has been.

India's foreign policy since its independence focused on strengthening its allies in South-East Asia. The policy has now been re-named as the Act East policy.

India has capitalised as a 'status quo state' to leverage military and multilateral trade agreements.

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Establish more cultural exchange programs with developing countries to improve soft power.

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Establish more cultural exchange programs with developing countries to improve soft power.

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https://en.unesco.org/creativity/policy-monitoring-platform/cultural-exchange-programs

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Act East policy of India - The need to strengthen its allies

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India will play host to all ten ASEAN heads of state as chief guests at the Republic Day parade in New Delhi. India has had old, civilizational ties with Southeast Asia but the present Act East policy of the Indian government follows in the footsteps of the Look East policy of the early 1990s. In this Business Standard Special, Rohan Mukherjee takes a look at the challenges India faces as China asserts itself more strongly in Asia and beyond.

In the spring of 1947, as India prepared for independence, the interim government hosted an unprecedented gathering in New Delhi: the Asian Relations Conference. Jawaharlal Nehru, soon to be India's first prime minister, delivered a welcome address to over 200 delegates from 30 Asian nations and a handful of observer countries. India, Nehru reminded his audience, was "the natural centre and focal point of the many forces at work in Asia. " The argument was both geographic and cultural: India was "the meeting point of Western and Northern and Eastern and South-East Asia," and "streams of culture" had both flowed to India and from India to the rest of Asia, influencing "vast numbers of people."

What is new about the Act East Policy is the political symbolism and diplomatic drive behind India's outreach to ASEAN countries. Modi has travelled to all but two ASEAN nations since becoming prime minister and has taken great care to consistently refer to ASEAN as the central pillar of the Act East Policy. While some might dismiss these moves as political theatre, they do not go unnoticed in ASEAN capitals or in Beijing. Previous Indian governments have noticeably lacked this level of diplomatic alacrity. For example, following the announcement of the Look East Policy and Singaporean Prime Minister Goh Chok Tong's attendance as chief guest for Republic Day in 1994, it took another 17 years for a Southeast Asian head of state (President Yudhoyono of Indonesia) to attend in the same capacity. Economic and security partnerships aside, New Delhi's political outreach to ASEAN was long overdue. It of course remains to be seen if India can deliver on the many promises it has made to ASEAN nations on trade, investment, connectivity, and security.

Nonetheless, political outreach is important given the considerable deterioration in India- China relations over the last year. As China's elbows get sharper in East Asia and its forays into South Asia more frequent, close relations with ASEAN can help India apply counter-pressure when and where required. For instance, Delhi's ongoing naval exercises, port calls, and maritime security dialogues with littoral countries in the South China Sea serve to remind Beijing of India's ability and willingness to increase the cost of Chinese unilateralism in the region. A low-level tit-for-tat strategy with regard to China-a testing of each other's waters, as it were-coupled with robust economic relations with ASEAN is undoubtedly a beneficial medium-term equilibrium for India.

This strategy, however, is not without a number of pitfalls. First, while India's opposition to the Belt and Road Initiative (BRI) and boycott of Beijing's flagship BRI forum in May 2017 may have signaled resolve to ASEAN, it makes little economic sense to exclude oneself from a massive infrastructure and connectivity enterprise in which numerous ASEAN states are implicated. Going forward, therefore, India's economic and political priorities may increasingly come into conflict.

Second, by deepening defence cooperation in the South China Sea, New Delhi risks getting embroiled in a future maritime controversy or conflict between Beijing and one or more ASEAN nations. At that point, low-level adventurism (on both sides) might very well turn out to have major consequences that India cannot deter or see through due to insufficient naval capabilities for sustained operations outside the Indian Ocean. Without this capability, India's support to ASEAN countries in a potential crisis will be nothing more than rhetorical and quickly discredited.

Fortunately for New Delhi, the above risks are contingent on the extent of India- ASEAN closeness, which at present is relatively low. The present government's focus is accordingly suited to the circumstances: invite economic engagement from all members (even at the cost of a hefty trade imbalance), engage in low-key defense cooperation, and continue to play up the civilizational ties that bind India to Southeast Asia. If the prime minister and his advisers plan to seek substantially closer ties in the future, they would do well to remember that from a Southeast Asian perspective, there is no single authoritative Ramayana but various retellings that incorporate local cultures, mores, and interests.

Rohan Mukherjee is Assistant Professor of Political Science at Yale-NUS College, Singapore

Disclaimer: Views expressed are personal. They do not reflect the view/s of Business Standard.

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East by Southeast: Three challenges for India's 'Act East' policy

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Read more about East by Southeast: Three challenges for India's 'Act East' policy on Business Standard. Going forward India may find that its economic interests may collide with its political interests even as China's presence will continue to cast a long shadow on India's relations with ASEAN

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Taking advantage of Indian low cost labour

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Taking advantage of Indian low cost labour

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India’s economic success has come mainly from its services, especially software engineering. That makes India’s development path entirely different from that of other developing countries, particularly the East Asian economies. India’s development could well benefit by tapping its abundant labor, because, in comparison with East Asian development paths, which saw the economies go up the industry chain from the lowest end, India has the opportunity to complete the chain from two ends (labor-intensive manufacturing and high-end services).
https://thediplomat.com/2015/07/how-can-china-and-india-boost-economic-ties/

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The shift of alliances from Indo-Russia to Russia-Pakistan

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Traditionally, Russia has maintained cordial relations with India, with an overwhelming focus on the defense sector. Both nations signed the Treaty of Peace, Friendship and Cooperation In 1971, which specified mutual strategic cooperation. For a long period of time, Russia enjoyed the status of the largest arms exporter to India. After the establishment of U.S.-India strategic relations, however, Russia gradually started to lose lucrative defense deals to U.S. firms. Consequently, in 2014, the United States surpassed Russia and became India's biggest defense partner in terms of arms sales.

While in 2015 Russia regained its title as India's top source of arms with a series of deals, the fallout from India's warming strategic relations with Russia's ideological rival was noticeable when Moscow struck a surprising defense cooperation agreement with Islamabad. The 2014 agreement was finalized when Russian Defense Minister, Sergei Shoigu visited Pakistan. It was the first visit by a Russian defense minister to Pakistan in 45 years. The Russia-Pakistan agreement provides for the exchange of information on politico-military issues; cooperation for promoting international security; intensification of counterterrorism and arms control activities; strengthening collaboration in various military fields, including education, medicine, history, topography, hydrography, and culture; and sharing experiences in peacekeeping operations.

In August 2015, Russia agreed to sell Mi-35M attack helicopters to Pakistan. Pakistan plans to procure a total of 20 Mi-35Ms over the next years and has received four helicopters in August 2017 at a cost of $153 million. Both nations are also negotiating a deal on Su-35 and Su-37 fighter jets.

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In addition to that, both Moscow and Islamabad have enhanced military to military relations. The first ever joint military exercise, Druzhbha (a Russian word meaning "friendship"), was conducted between the two armies in September 2016. Russia also participated in the Aman-17 international naval exercise hosted by Pakistan in the Arabian Sea in February 2017.

In addition to a rising and close strategic cooperation, both Russia and Pakistan are collaborating in the energy sector as well. On October 16, 2015 Pakistan and Russia signed an agreement to build a $2 billion pipeline. The North-South gas pipeline, with a capacity of 12.4 billion cubic meters per year, would connect the liquefied natural gas (LNG) terminal in Karachi to Lahore. The agreement was signed during the first visit by a Russian energy minister to Pakistan in three decades, and marked a new beginning in commercial ties between the two countries. The 1,100 kilometer pipeline is expected to be completed by 2018.

In addition, on July 3, 2017 Russia's Gazprom International and Pakistan's Oil and Gas Development Company Limited (OGDCL) signed a Memorandum of Understanding (MoU) in Moscow. The MoU is aimed at mutual cooperation, joint ventures and use of state of the art technology that would aid exploration and development in Pakistan.

Fearing a great power aligning with its rival, India reaffirmed Russia's largest arms importer title during President Vladimir Putin's visit in December 2014. A $40 billion deal was struck to build 10 more nuclear plants in India, in addition to a $3 billion agreement to manufacture Russia's most advanced Kamov-226 helicopters in India. Moscow and New Delhi have been in talks for over a year about the purchase of five systems of S-400 missile defense systems.

The increased Russia-Pakistan cooperation should be viewed in the context of increasingly complex challenges being faced by Moscow in the evolving Afghan scenario. Russia considers Pakistan as highly important for the stabilization of Afghanistan, as it believes that "the problem of Afghanistan cannot be resolved without the constructive involvement of Pakistan and Iran." Keeping in view Russia's closeness to India and rising understanding with Pakistan, Moscow seems in a position to mediate on all outstanding issues between the two South Asian rivals. Specifically, Russia can persuade India regarding Pakistan's position in Afghanistan.
Kashif Hussain holds M.Phil Degree in International Relations from Quaid i Azam University Islamabad, He is currently serving as Research Associate at Strategic Studies Institute Islamabad (SSII).

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What Russia's Changing Role in South Asia Means for Pakistan

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Traditionally, Russia has maintained cordial relations with India, with an overwhelming focus on the defense sector. Both nations signed the Treaty of Peace, Friendship and Cooperation In 1971, which specified mutual strategic cooperation. For a long period of time, Russia enjoyed the status of the largest arms exporter to India.

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With Russia now being embraced by China and China's strengthening her ties with Pakistan and Sri Lanka, Modi must find new allies.

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With Russia now being embraced by China and China's strengthening her ties with Pakistan and Sri Lanka, Modi must find new allies.

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https://timesofindia.indiatimes.com/india/strengthen-military-look-for-new-allies-to-tackle-pakistan-china-army-chief/articleshow/58521177.cms

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India should revise and improve its Think Tanks in order to improve cultural and diplomatic soft power.

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India should revise and improve its Think Tanks in order to improve cultural and diplomatic soft power.

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https://www.brookings.edu/opinions/can-indias-think-tanks-be-truly-effective/

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First, China-India trade is far more important to India than it is for China.
The second imbalance of concern is that India has a large and growing trade deficit with China.
India and China should thus seek ways to balance their trade, recognizing that balanced trade is crucial. The most effective way to do this would be increase India’s exports to China, making full use of its comparative advantage.
https://thediplomat.com/2015/07/how-can-china-and-india-boost-economic-ties/

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RCEP talks advance

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India's intends to leverage it's participation in BRICS or the G20 to call for a greater voice and role in existing governance structures, but doesn't yet see BRICS as cohesive coalition to do so

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India's intends to leverage it's participation in BRICS or the G20 to call for a greater voice and role in existing governance structures, but doesn't yet see BRICS as cohesive coalition to do so

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https://timesofindia.indiatimes.com/india/india-at-brics-top-10-developments/articleshow/60365734.cms

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The South Asian region is in dire need of support for its growth and development. India was not able to help her neighbours because of three reasons: One, her own financial requirements for uplifting the population was enormous. Second, her delivery mechanisms for the promises made by India’s leaders leave much to be desired. Third, there is also a suspicion in the minds of smaller countries regarding India’s intentions.

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The South Asian region is in dire need of support for its growth and development. India was not able to help her neighbours because of three reasons: One, her own financial requirements for uplifting the population was enormous. Second, her delivery mechanisms for the promises made by India’s leaders leave much to be desired. Third, there is also a suspicion in the minds of smaller countries regarding India’s intentions.

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https://www.firstpost.com/world/india-china-relations-new-delhi-needs-better-ties-with-neighbours-to-tackle-beijings-string-of-pearls-3385606.html

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Africa wants Indian companies to invest in power, infrastructure

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Africa wants Indian companies to invest in power, infrastructure

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NEW DELHI: AfDB has asked Indian companies to invest in African power, infrastructure and farming sectors as it wants strong engagement with the country in terms of doing business in Africa.

African Development Bank (AfDB) would like to accelerate engagement with Indian government in terms of doing business in Africa, AfDB President Akinwumi Adesina said during his first official visit to India.

"Rapid urbanisation and rapid growth of middle class will lead consumption demand, which is going to make Africa the place to be. The most important area for investment is power. Electricity, infrastructure and agriculture are other key areas," he told reporters on sidelines of Exim Bank (India) interactive session with a visiting African delegation.

Almost 645 million people in Africa need to have access to electricity, suggesting huge business opportunity to investors from India, Adesina said.

AfDB annual general meeting is going to be held next month in Ahmedabad where the funding agency is expected to invite business community in order to attract private sector funding.

He said AfDB is working to minimise investment risks of overseas investors to pull-in more foreign direct investment.

For African continent, India is the fifth largest in terms of foreign direct investment.

India's exports to Africa grew from $7 billion during 2005 and 2006 to about $25 billion today. While Indian imports from Africa during the same time expanded from $5 billion to $31 billion, he added.

Exim Bank MD David Rasquinha said out of its line of credit of about $2.5-3 billion every year, almost half goes for development projects in Africa.

About $2.5 billion worth project developments are under pipeline for the continent, Rasquinha said.

"We have also formed a joint venture with AfDB for project development growth that works with companies to come up with projects so that Indian companies can finance those. Africa gets around $1.2 billion line of credit from Exim Bank every year," he further said.

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Africa wants Indian companies to invest in power, infrastructure

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NEW DELHI: AfDB has asked Indian companies to invest in African power, infrastructure and farming sectors as it wants strong engagement with the country in terms of doing business in Africa. African Development Bank (AfDB) would like to accelerate engagement with Indian government in terms of doing business in Africa, AfDB President Akinwumi Adesina said during his first official visit to India.

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India providing more aid in developing countries to get more votes in IMF and UN 

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India providing more aid in developing countries to get more votes in IMF and UN 

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The needy donor: An empirical analysis of India's Aid motives
By Andreas Fuchs

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India's raising investment in Latin-America

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India's raising investment in Latin-America

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Until recently, China's $264 billion trade with Latin America has dominated the attention of the region's policymakers, analysts and media. Now, as the Asian giant's economy slows, opportunity is opening up for a new player on the region's doorstep: India.

The Indian subcontinent, whose one-billion-plus population is expected to surge past China's by 2025, has so far been a comparatively quiet presence in the Americas; its $50 billion trade with Latin America and the Caribbean (LAC) amounts to less than a quarter of its northern neighbor's. But in the past decade, Indian businesses have gradually established a presence in Latin America, betting on the region as a source for long-term gain.

Of the Indian companies looking anew to Latin America, the biggest is the Aditya Birla Group, which currently generates $2 billion in revenue in LAC from activities ranging from aluminium production to the manufacture of viscose yarn. Anurag Srivastava, who leads the conglomerate's Latin America operations, said the company is working to expand throughout the region, citing currency devaluations and lower asset pricing in several LAC countries as advantages. "Some companies are deterred by issues of distance, language and the relatively high costs of doing business in Latin America," Srivastava said. "We see Latin America as a strategic market and are taking a long-term approach."

Others too have entered the fray: UPL Limited, an Indian agribusiness company, receives 26 percent of its total revenue from LAC, with Brazil alone representing a bigger market for UPL than the Middle East, Africa and Asia (excluding India) combined. The Mumbai-based Glenmark Pharmaceuticals made Buenos Aires, Argentina, the hub of its oncology business, while Brazil and Mexico account for 22.8 percent and 20.5 percent, respectively, of investments in international subsidiaries for another Indian pharma company, Torrent Pharmaceuticals. More recently, in September 2015, New Delhi's Hero MotoCorp opened its first international manufacturing plant in Colombia. President Juan Manuel Santos personally inaugurated the plant, which is expected to produce 150,000 motorcycles per year.

India's engagement with Latin America is particularly evident in the energy sector. According to the Inter-American Development Bank, India accounted for 50.1 percent of LAC's energy exports to Asia in 2013, compared with 44.8 percent for China. Moreover, LAC's share of India's total oil imports increased from 4.5 percent in 2003 to 20 percent in 2014, whereas LAC accounted for just 10 percent of China's total oil imports in 2014.

However, perhaps most indicative of India's growing stake in Latin America is the country's diverse range of investments in the region. Only 18 percent of India's investments in LAC are focused on raw material extraction, compared to 57 percent for China - of particular importance as the drop in global commodity prices makes trade in natural resources less valuable. And while China's total investments in LAC account for a whopping $50 billion, eclipsing India's $20 billion, the two countries were evenly matched in the total percentage of greenfield investments in the region from Asian countries between 2003 and 2011, at 14 percent each.

Of course, not all Indian companies succeed in LAC. Jindal Steel and Power, which in 2007 announced to much fanfare a $2.1 billion investment in Bolivia's El Mutún mine, is now fighting a legal battle after canceling the contract and exiting the country. Some others looking for short-term gains have divested their stake or closed shop due primarily to a lack of preparation and a one-size-fits-all approach.

It is not difficult to envision a more robust commercial engagement between India and Latin America. Both have large and growing middle classes - macro factors that Douglas Stippoldt, an international trade specialist at HSBC, said will generate "increased opportunity for trade in both directions." Furthermore, both provide each other an opportunity to lessen dependence on traditional partners and diversify into relatively new markets. LAC companies can take advantage of the investment incentives in sectors Indians specialize in, specifically in renewable energy, mining and manufacturing. Indian investment in Latin America also promises greater employment prospects in addition to capital flows. For example, Indian IT companies, both small and large, currently employ some 25,000 people in Latin America, nearly all locals. With a little bit of initiative and enterprise, that number could multiply over the next decade.

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Seshasayee specializes in Latin American studies and India-Latin America relations and currently works with the Confederation of Indian Industry. He can be reached at harisesh@alumni.stanford.edu

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India's Rising Presence in Latin America

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Until recently, China's $264 billion trade with Latin America has dominated the attention of the region's policymakers, analysts and media.

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Amid High-Level Visits, India Strengthens Jordan, Vietnam Ties

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Back to back visits from King Abdullah of Jordan and President Tran Dai Quang of Vietnam, in this week and the next, are the latest hallmark of New Delhi's growing desire to come up with a regionally balanced foreign policy.

King Abdullah, who arrived on 27 February, is following up on Prime Minister Narendra Modi's recent visit to Palestine and Oman. To reach Ramallah, the de facto administrative capital of Palestine, Modi had to go via Amman, and Abdullah took the occasion to host him at his palace, while facilitating his transit to the Palestinian capital.

President Quang is ranked number two in the Vietnamese hierarchy, after Secretary General of the Party Nguyen Phu Trong, the third being Prime Minister Nguyen Xuan Phuc - who attended the special ASEAN summit with his fellow government heads as chief guests for the Republic Day 2018.

The India-Jordan Relationship: Rekindling Old Fires

The Modi government has shown a marked preference for building ties with Jordan. The Prime Minister had met King Abdullah for the first time on the sidelines of the UNGA in September 2015. This was followed by a visit by President Pranab Mukherjee to Jordan in October 2015, the first by an Indian head of state.

Jordan is not endowed with energy resources. The relationship is more a meeting of minds of two countries that feel threatened by Islamist radicalism. This facet of the relationship is underscored by King Abdullah's special address at the India Islamic Centre in Delhi on 'Promoting Understanding and Moderation'.

In recent years, aware of the burden Jordan faces because of refugees, India has been donating money for humanitarian assistance to the country. As a stable state in the otherwise volatile Middle East, ties with Jordan go beyond the mere calculation of oil, trade, or investment.

India Attempts to Woo Vietnam

President Tran's visit over the coming weekend comes in the wake of the recent trip by Prime Minister Phuc. In 2016, Prime Minister Modi had visited Vietnam, and the two countries had worked out agreements for cooperation in a number of areas including IT, Space, and information sharing on shipping.

So far, India's economic ties with Vietnam have been somewhat spotty. Vietnam's major trading partner remains China. India-Vietnam trade was around $ 7.6 billion in 2017 - a tenth of the Vietnam-China trade.

Vietnam's trading and investment links with China, Japan and South Korea offer opportunities for Indian companies as well.

Last year, Vietnam hosted the APEC Leaders' summit and welcomed several heads of state, including Xi Jinping and Donald Trump. When he visited Washington in May, Vietnamese Prime Minister Phuc became the first South-east Asian leader to be received by Trump.

China's Relationship Status With Vietnam: It's Complicated

Strained ties between China and Vietnam, over their maritime boundary, were aggravated last year by tensions over a Spanish company exploring for oil in Vanguard Bank, an area claimed by China.

This led to the suspension of border defence exchanges between the two countries and a veiled threat of use of force by China, leading Vietnam to back off. A meeting between their foreign ministers in August was also cancelled.

As China's neighbour, with both land and maritime borders, as a country that has fought a brief war with China, and also as one of its major trading partners, Vietnam's relations with China are complex. The two countries have resolved their land border dispute and have settled their maritime boundary in the Gulf of Tonkin area.

Vietnam follows a policy of "cooperation and struggle" with China. As part of this, its Defence Minister visited Washington in August. It was later announced that an American aircraft carrier would visit Cam Ranh Bay in 2018. China holds exercises in the Gulf of Tonkin and the Paracel islands over Vietnamese protests, yet the number of Chinese tourists in Vietnam, and their bilateral trade are at a record high.

Vietnam maintains close political ties with China, and the two communist parties interact at various levels. Early last year, the Secretary General of Vietnamese Communist Party, Trong, met Xi Jinping in Beijing. Their joint statement called for the two countries to "manage their maritime differences," and avoid complicating the issues.

Forward Movement in India-Vietnam Ties Likely

Given this background, we are likely to see a modest forward movement in India-Vietnam ties. Besides the Line of Credit, which is being used to purchase Indian-made patrol vessels, India provides training and support for Russian-origin military equipment, like Kilo-class submarines, and Sukhoi fighters.

After the Indian acquisition of the Israeli Spyder short-range quick reaction missile, the Vietnamese are also evaluating the system.

India's imperatives in the East and West are not the same. But, both are important. In the East, it has important economic goals.

As far as the West is concerned, it depends on the region for the bulk of its energy supplies and is now seeing this as an important source of trade and inward investment, and of course, remittances. But with the rise of China, both also carry heavy geopolitical obligations and commitments.

Balancing all of it is the major challenge for the country.

(The writer is a Distinguished Fellow, Observer Research Foundation, New Delhi. This is an opinion piece and the views expressed above are the author's own. (Hey there, lady! What makes you laugh? Do you laugh at sexism, patriarchy, and misogyny? Do 'sanskaari' stereotypes crack you up? This Women's Day, join The Quint's Ab Laugh Naari campaign. Pick up that beer, say cheers, and send us photographs or videos of you laughing out loud at buriladki@thequint.com.) The Quint neither endorses nor is responsible for the same.)

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Amid High-Level Visits, India Strengthens Jordan, Vietnam Ties

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Back to back visits from King Abdullah of Jordan and President Tran Dai Quang of Vietnam, in this week and the next, are the latest hallmark of New Delhi's growing desire to come up with a regionally balanced foreign policy.

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India Investment in Africa
India’s share of announced greenfield projects grew from 3.3% in 2003-08 to 6.1% in 2009-15

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"India's sustained effort is making an impact on Africa... India's share of announced greenfield projects grew from 3.3% in 2003-08 to 6.1% in 2009-15. In the same period, the investment from China decreased from 4.9% to 3.3%," said finance minister Arun Jaitley at the 52nd annual general meeting of the African Development Bank (AfDB) at Gandhinagar. Jaitley's statement suggests that India has become a dominant economic partner of Africa in comparison to China. A detailed look at FDI and trade related statistics does not support such a view.

According to the latest World Investment Report published by the United Nations Conference on Trade and Development (UNCTAD), China's total FDI in Africa is much more than India's. Both India and China were minuscule players in terms of FDI in Africa, and India was ahead of China till 2009. However, China has surged much ahead of India between 2009 and 2014, latest figure for which data is available.

To be sure, headline figures on Indian FDI in Africa might have a spurious element because of the role of Mauritius, which has been known to be a round-tripping destination for bringing back money as FDI into India. Centre for Monitoring Indian Economy's database shows that outward FDI from India to Mauritius between 2008-09 and 2016-17 was accounted for 17% of total outbound FDI from India. Mauritius also accounted for 31% of FDI inflows into India during this period. It would be interesting to see whether this number declines after India has signed a double tax avoidance agreement with Mauritius in May 2016.

Although India is not the biggest investor in Africa, it is not an insignificant player by any means. Statistics cited in the African Economic Outlook 2017 show that India is ranked second (after China) in terms of trade share with Africa. Here too, there is a wide gap in actual value of trade, with China's total trade with Africa being more than 2.6 times its trade with India in 2015. Interestingly, both India and China were almost at par in terms of total value of trade with Africa in 2000.

An earlier Plainfacts column which had looked at the trading pattern of India and China with Africa had found that increasing trade of the two major Asian economies has been accompanied with import of raw materials from Africa and export of finished products to the continent. The column also argued that just the fact that this pattern was also observed during the colonial period, did not necessarily mean that Indian and Chinese capital in Africa was unleashing colonial exploitation like earlier times. The column also argued that while Chinese FDI has been accused of bringing in a lot of Chinese labour, which means that a large amount of earnings are repatriated, India's relatively small presence might have saved it from a greater scrutiny.

With increasing economic engagement, the fate of India-Africa ties would depend on not just quantitative factors such as trade and investment, but also a strategy that convinces the African people that economically engaging with India would be mutually beneficial.

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How does Indian investment in Africa compare with China's?

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"India's sustained effort is making an impact on Africa... India's share of announced greenfield projects grew from 3.3% in 2003-08 to 6.1% in 2009-15. In the same period, the investment from China decreased from 4.9% to 3.3%," said finance minister Arun Jaitley at the 52nd annual general meeting of the African Development Bank (AfDB) at Gandhinagar.

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India's five foreign policy goals

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Several commentators have been left disappointed by Modi's - and India's - handling of international relations in the past two years. The record shows otherwise writes Dhruva Jaishankar
Two years ago today, Narendra Modi took the oath of office as India's 14 th prime minister. Among his first decisions as head of government - in fact, it was set in motion even before the formal start of his tenure - was an unconventional act of diplomacy: inviting eight foreign leaders of neighbouring countries to attend his inauguration. While many commentators claimed before his election that Modi would be a nationalist hardliner, a foreign affairs novice, or simply more of the same on external affairs, the prime minister instead proved more active and ( perhaps less surprisingly) more pragmatic than many had expected. In two years, Modi has displayed an instinctive understanding of power in the conduct of world affairs, and he has also benefited from being less politically hamstrung than his predecessor Manmohan Singh, with whose worldview he in fact shares much in common.

A highlight of Modi's first year was his outreach to the United States. In September 2014, Washington rolled out the red carpet for a leader it had once publicly shunned, and Modi reciprocated by inviting Barack Obama to India's Republic Day celebrations, a first for a U.S. president. But beyond normalising and enhancing relations with the US, Modi's international priorities were quickly made evident. Within his first year, he embarked upon state visits to India's immediate neighbourhood, three crucial Indian Ocean island countries, important Asia-Pacific powers (China, Japan, and Australia), and eventually Western Europe.

Modi's second year followed in much the same fashion, with a ground-breaking visit to Bangladesh, a swing through Central Asia, a long overdue visit to Afghanistan, and a renewed focus on the Middle East or West Asia. It also included a surprise stopover in Pakistan, a trip no Indian prime minister had managed since 2004. In addition, Modi has in his first two years played host in India to most of the world's top leaders, including those of the United States, China, Russia, France, Japan, and Germany. He also hosted a landmark India-Africa Forum Summit last November that involved 41 heads of state and government.

Despite this flurry of activity, several commentators have been left disappointed by Modi's - and India's - handling of international relations. My Brookings India colleague W.P.S. Sidhu has pointed to a lack of strategic vision, and describes Modi's various foreign policy initiatives - such as Neighbourhood First and Act East - as "vacuous." While commending the prime minister's sound instincts, initiative, and energy, former foreign secretary Shyam Saran has lamented the lack of an overall national security strategy and criticised the priority granted showmanship over substance. Meanwhile, Rajesh Rajagopalan of Jawaharlal Nehru University has expressed disappointment with the lack of new ideas and synergy and his colleague Happymon Jacob has faulted New Delhi's bullying and poor imagination for bad relations with its neighbours.

Much of this criticism is perplexing. Ambiguity and deniability have value in foreign affairs. As a consequence, neither this Indian government nor any of its predecessors have ever explicitly spelled out their strategic intentions in a single document, although there are plenty of public statements that offer a good indication of the government's outlook. These public articulations, combined with the nature, outcomes, and timings of Modi's diplomatic activities, offer a clear picture of India's priorities and strategic objectives. They are essentially five-fold:

Prioritizing an integrated neighbourhood; "Neighbourhood First."

Leveraging international partnerships to promote India's domestic development.

Ensuring a stable and multipolar balance of power in the Indo-Pacific; "Act East."

Dissuading Pakistan from supporting terrorism.

Advancing Indian representation and leadership on matters of global governance.

These are the yardsticks against which the international activities of this government - or, for that matter, any Indian government - should be measured. In each case, it is important to assess the progress made, the setbacks experienced, and the long-term or structural challenges that will continue to confront India.
1. Neighbourhood First: Improving connectivity, mitigating nationalism
The approach called 'Neighbourhood First' - a phrase adopted by the Indian government - is meant to indicate four things. The first is New Delhi's willingness to give political and diplomatic priority to its immediate neighbours and the Indian Ocean island states. The second is to provide neighbours with support, as needed, in the form of resources, equipment, and training. The third, and perhaps most important, is greater connectivity and integration, so as to improve the free flow of goods, people, energy, capital, and information. The fourth is to promote a model of India-led regionalism with which its neighbours are comfortable.

The newfound diplomatic priority on the region is evident in Modi's visits to all of India's neighbours - barring The Maldives - as well as regular leadership meetings in India and on the sidelines of multilateral summits. India has also become more forthcoming in providing support and in capacity building, whether concluding its biggest ever defence saleto Mauritius, or in providing humanitarian assistance to Nepal or Sri Lanka. With Bangladesh, the completion of the Land Boundary Agreement, improvements in energy connectivity, and steps taken towards accessing the port of Chittagong have all been crucial developments that help to set a positive tone for a region long defined by cross-border suspicion and animosity. India's focus on connectivity is also gradually extending outward, whether to Chabahar in Iran or Kaladan in Myanmar. Although India will continue investing in the South Asian Association for Regional Cooperation (SAARC) as an institutional vehicle, it has also expressed a willingness to develop issue-specific groupings that are not held hostage to consensus: a "SAARC minus X" approach. Two examples of this are the Bangladesh-Bhutan-India-Nepal (BBIN) grouping - meant to advance motor vehicle movement, water power management, and inter-grid connectivity - and the common SAARC Satellite, which India has decided to proceed with despite Pakistan's objections.

These concerted efforts have so far had mixed results. Bangladesh and Bhutan have clearly been positive stories for India. Ties with Sri Lanka have proved a mixed bag, despite the electoral loss of former president Mahinda Rajapaksa, who had testy relations with New Delhi. However, President Maithripala Sirisena remains well-disposed and personally invested in better relations with India. The Maldives has proved more difficult. India has continuing concerns about the fate of former president Mohamed Nasheed, although several defence agreements were concluded during the visit to India of the incumbent Abdulla Yameen.

With respect to all of its neighbours, including Nepal, India has taken concrete steps over the past two years to promote goodwill and deepen economic and social connectivity. But nationalist sentiments in all these countries - often directed against India as the region's predominant power - will continue to present a challenge. Anti-Indian sentiments will also, paradoxically, drag India further into these countries' domestic politics, suggesting that undulating highs and lows in its neighbourhood relationships will now be the norm. Furthermore, for all of India's neighbours, China is now prepared to step in to provide financial, military, infrastructural, and even political assistance, and act as a potential alternative to India. This new development is something India will have to carefully monitor and appropriately respond to - as it has in recent years - particularly if Indian security interests are seriously compromised. As the status quo power in its neighbourhood, India will have to constantly play defence in its own backyard.
2. Bridging diplomacy and development 3. Acting East as China rises
When Modi rhetorically replaced two decades of India's 'Look East' policy with 'Act East,' the purpose was to show greater intent in realising what had long been an aspiration for India: to become an integral part of Asia. The greater urgency implicit in the shift in terminology is largely an outgrowth of Indian concerns regarding China's rise and the upsetting of Asia's delicate balance of power. In addition to the development of military and dual use Chinese infrastructure in India's neighbourhood and the Indian Ocean, India's concerns are three-fold: the risk of Chinese assertiveness on the disputed border, the possibility of Chinese primacy in the Indo-Pacific region, and an uneven economic playing field.

Finally, bilateral economic relations with China offer a contradictory picture. On the one hand, India seeks to be a beneficiary of China's attempts at rebalancing its economy, and has become a destination for Chinese investment. The last two years saw a significant jump in Chinese foreign direct investment (FDI), from Rs. 767 crores in 2013-2014 to Rs. 3,066 crores a year later. In fact, those two years alone have accounted for over 70% of Chinese FDI ever into India. But China's old economic habits are proving hard to kick. Barriers to entry for Indian software companies remain, even as China's high tech sector comes into its own. And India shares continuing international concerns about China's dumping of goods.

To date, India's Act East policy has added greater urgency to its earlier aspirations. Certain aspects, such as institutional participation have been more successful over the years, and others such as bilateral and 'minilateral' security cooperation have seen discrete recent improvements. India's primary challenges will lie in preserving the military balance on the disputed border with China, and integrating itself into the region's commercial networks. This will require placing a greater priority on improving border infrastructure, on overland connectivity to Southeast Asia via Bangladesh and India's Northeast, on port and shipping infrastructure at home, and on developing an understanding of the implications of TPP for India. Only then can India really come into its own as an Asian power.
4. Pakistan: Engagement and isolation
Pakistan's relative importance for India has waned significantly over the past two years. The development of nuclear weapons by both countries has ensured an uneasy peace, while Pakistan - despite Indian entreaties - has refused to open up economically. Terrorism by entities based in Pakistan, and supported by the country's military and intelligence agencies, continues to be directed at India, although certain measures have helped reduced the number of infiltrations and severity of attacks. Nonetheless, Pakistan remains a political hot button issue, and India-Pakistan relations still dominate media coverage and political discourse.

None of the last few Indian governments have been under any illusions about Pakistan. Terrorism emanating against India by entities based in Pakistan and supported by elements of the state remains a top priority; one need only look at every recent statement made by India with Pakistan to see the prominence given to that issue. But India's options are also limited. For all the talk about retaliating against Pakistan, particularly militarily, such steps risk an escalation to the nuclear level. Containing Pakistan is not a possibility either. India's economy is not yet large enough, it is limited by geography, and Pakistan continues to find support in the Gulf, the United States, and China. Any suggestion of India's responding " in the same coin" is also unnecessary; Pakistan is doing a perfectly good job destabilizing itself. Nor can Pakistan be ignored. Indian passiveness is exactly what Pakistan wants, for it would invite third-party intervention, something a rising sovereign India would naturally resent.

After several attempts at setting the terms of engagement over the past two years, India has had to settle upon a two-track policy. The first is to continue keeping lines of engagement open, as long as terrorism tops the agenda and that dialogue is strictly bilateral in nature. This has resulted in a peculiar ping-pong. Inviting Nawaz Sharif to Delhi in 2014 resulted in Pakistan trying to involve the Hurriyat, a coalition of Kashmiri separatists, and Pakistani shelling along the Line of Control with India. The 2015 Ufa Declaration was heavily criticized in Pakistan and led to Islamabad calling off the national security advisor talks under rather farcical circumstances. Modi's Lahore stopover in December 2015 was followed soon after by the Pathankot attack. And the response to India allowing Pakistani investigators access to the Pathankot site was Pakistan producing an alleged Indian spy, whom India insists is an innocent former Navy officer kidnapped from Iran. The pattern is clear: India has repeatedly tried to renew talks in good faith, only for elements in Pakistan to make brazen attempts at sabotaging the process. While frustrating, the process has created considerable diplomatic space for India - much as Atal Bihari Vajpayee's Lahore trip enabled a bolder response to Pakistan's 1999 Kargil incursion. More importantly, India's constant willingness to engage has kept the United States and others from interjecting themselves in the region.

Modi's efforts with Pakistan have not yet borne results. A stalemate continues. The only difference now is that India's Pakistan policy has assumed a certain consistency and that it is playing the chessboard with white, rather than black, pieces, seizing control of the momentum and initiative. The process of both engaging and isolating Pakistan despite repeated provocations will be long, frustrating, and politically unpopular at home. But as long as domestic pressures can be navigated, India's continuing bilateral engagement with Pakistan, its efforts at internationally isolating it, and its offering a viable alternative model of South Asian engagement remain the only real prospect for resolving the Pakistan problem on India's terms.
5. India as a leading power: Raising ambitions Polarized perspectives
A broad overview of the Indian government's foreign policy, particularly over the past year, ought to clearly show not just a strategic vision, but progress along every one of India's major objectives. It also reveals some of the frustrations and structural limitations that confront the Indian government, and are likely to confront it for many years going forward. They include the twin spectres of nationalism and Chinese inroads in India's neighbourhood, insufficient commercial integration with Southeast and East Asia, gaps between diplomatic efforts and agents of domestic implementation, political resistance to engagement with Pakistan, and relative inexperience with leading on matters of global governance. India clearly has to do a much better job remaining vigilant in its own neighbourhood, managing or proactively addressing the domestic political fallout of its Pakistan policy, and better coordinating external outcomes with internal development, all the while raising its ambitions and improving its ability to follow through.

What ultimately matters in any assessment, however, is the broad direction or orientation of India's international relations, and its implementation. This is often at odds with public discourse, which often views developments in isolation and sees facts being used to fit preconceptions. For the television media in particular, Pakistan bashing has become a full-time preoccupation. Of equal concern is the unnecessary polarisation of much of the foreign policy discourse. Politics ought to end at the water's edge. Unfortunately, the last decade has witnessed more fractious and self-serving discourse on many areas in which there has in fact been remarkable continuity and consensus. The changing media environment is in part responsible for this, as is the behaviour of the opposition parties - both past and present. Evaluating India's advancement of its international interests will require a clearer assessment of its objectives, the progress made, and India's continuing limitations. That challenge will be all the more difficult in a fast-evolving and unpredictable world.
This article first appeared in The Wire on May 26, 2016. Like other products of the Brookings Institution India Center, this is intended to contribute to discussion and stimulate debate on important issues. The views are those of the author.

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India's Five Foreign Policy Goals: Great Strides, Steep Challenges

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Several commentators have been left disappointed by Modi's - and India's - handling of international relations in the past two years. The record shows otherwise writes Dhruva Jaishankar Two years ago today, Narendra Modi took the oath of office as India's 14 th prime minister.