Modi 3.0: India Gears Up For New Alliances, Old Foes, Volatile Border Issues With China

India is all set to prioritise resolving its longstanding border issues with China, as External Affairs Minister Subrahmanyam Jaishankar begins his second term. The 3,800 km border between the two nations has been a flashpoint, particularly since a deadly clash in June 2020 that resulted in the loss of 20 Indian and four Chinese soldiers.

After swearing in for a record-equalling third term on Sunday, Prime Minister Narendra Modi highlighted the government’s “neighbourhood first” policy during a grand ceremony attended by leaders from seven neighbouring countries.

However, as the new government takes charge at the Centre, India faces multiple foreign policy challenges, particularly with its neighbouring countries. Relations with China and Pakistan remain tense. Meanwhile, traditional allies like Nepal, Bangladesh and the Maldives are exploring new partnerships, having historically relied heavily on India.

Anushka Saxena, a China Studies Research Analyst at the Takshashila Institution, notes that China is increasingly seen as a viable alternative, making significant inroads through investments and military sales. Nepal under Prachanda and the Maldives under Muizzu have notably moved closer to China, posing a challenge to India's regional security interests.

Although the tension with Pakistan appears subdued at the moment, Pakistan’s deep indebtedness to China due to BRI-related loans, highlighted by Prime Minister Shahbaz Sharif's recent visit to China, indicates potential susceptibility to Chinese influence.

Security Concerns

Saxena says that India’s security strategy must address threats like cyberattacks from China and Pakistan and the issue of Pakistani drones transporting drugs across the border which requires coordinated efforts between the Ministry of External Affairs and the Ministry of Defence.

Jaishankar, in his first press interaction after taking oath, underscored that China remains India’s primary bilateral challenge. Despite 21 rounds of high-level talks, the core issue persists: India believes resolving the border dispute is crucial before normalising business relations, while China views the border as stable and prefers to continue business as usual.

Strategic Opportunities

Despite the challenges, Saxena believes that India has strategic opportunities, particularly in strengthening its partnership with the US. The rivalry with China has brought a renewed vigour to India-US relations, leading to expanded economic and defence cooperation.

In Asia, India aims to support countries like Vietnam and the Philippines, which also face territorial disputes with China. This aligns with India's broader goal of becoming a key Indo-Pacific partner, even as Chinese influence in the region continues to grow.

Navigating India-EU Cooperation

Under Modi 3.0, India is expected to continue its enthusiastic engagement with Europe. The partnership between India and the EU is guided by strategic frameworks such as the Strategic Partnership Roadmap, the Strategy for Cooperation in the Indo-Pacific and the Global Gateway Strategy. These plans aim to strengthen their relationship, promote mutual growth and tackle global challenges together.

Shairee Malhotra, Europe Fellow at the Observer Research Foundation, points out that shared concerns about Chinese assertiveness have also brought the EU and India closer. Both regions are now more willing to understand each other’s perspectives, even on contentious issues like the Russia-Ukraine war. There is significant potential for collaboration in areas like advanced technology, secure supply chains and connectivity.

Boosting Trade and the Free Trade Agreement

Malhotra notes that finalising the EU-India Free Trade Agreement could greatly enhance trade. However, challenges remain, including disputes over automobiles, agriculture, visas and the EU’s desire to include chapters on sustainability and human rights. “The recent shift towards more conservative politics in the European Parliament might increase protectionist policies, which could hinder the agreement. Additionally, anti-immigration sentiments could reduce the likelihood of a more flexible European visa policy for Indian professionals,” Malhotra added.

Challenges Of The Carbon Border Adjustment Mechanism

She also says that the EU’s Carbon Border Adjustment Mechanism (CBAM) also presents a notable challenge. This mechanism taxes imports based on their carbon emissions, part of the EU’s goal to become the world’s first climate-neutral continent by 2050. India sees CBAM as unfair and protectionist, worrying it will negatively impact its metal and other carbon-intensive exports to the EU.