18 June 1992 - 20 June 1992

India: The Future

Chair: Sir David Goodall GCMG

For this, the last conference of our conference year, we were fortunate in having 12 distinguished Indian participants, including some non-resident Indians (NRIs). For convenience, although the division is more than usually artificial, the topic was broken down for the working groups into the domestic political arena, the economic scene and, the most controversial, foreign policy.

The starting point of the political discussion was the unity of India, to which all legal parties in India and public opinion are committed (the Constitution bans advocacy of secession, which tends to drive even moderate advocates of devolution to extremism and may be difficult to square with free democratic expression of opinion). Despite the strains to which unity was being subjected, there was a consensus that India would survive as a single political unit and that solutions would be found. The obvious trouble spots of Kashmir and the Punjab occupied a good deal of time, in both the political and foreign affairs contexts. The Punjab was seen as the more manageable. Kashmir was clearly a critical issue, on the successful handling of which the government’s survival would depend. Nevertheless while participants recognised the sensitivity and the fact that over the years Pakistan, even if it had not created the problem, had certainly exacerbated it, there was some feeling that in the long run it was domestically demoralising and internationally unacceptable for India merely to suppress Kashmiri opposition and maintain occupation by force in the face of a largely hostile population, even if some saw signs of local “war-weariness”. The Simla Agreement provided for the issue to be handled bi-laterally, so the problem could not be treated merely as an internal one: third party good offices would not be helpful at present, though private pressure, on both parties, should not be ruled out. If independence was unacceptable, a considerable degree of autonomy, going beyond Article 370 of the Constitution, was the minimum basis for a solution: even something on the lines of the Trieste settlement (with dual sovereignty) should perhaps be considered.

Concern was expressed about the decline in the standards of the institutions such as the judiciary, the police, the civil service, and of parliament itself. Reform of the electoral system and of the system of party funding was needed (with constituencies of 2m voters, the system was unmanageable and party funding had become a scandal). Some questioned whether the “Westminster” model was appropriate, but the consensus appeared to be that a change to presidential government would not be the answer.

Secularism was discussed. India could not be a theocracy, but neither was it secular in the Western sense, rather a religious state in which all religions were treated equally.

Discussion of the political scene led naturally into the programme of economic liberalisation, or, better, reform. Since independence, the state had become increasingly centralised. The process of reducing bureaucratic controls of the economy should lead to greater de-centralisation. So far, the easy decisions only had been taken: it remained to be seen whether the politicians would be able to face the harder decisions and the social costs involved, e.g. in cutting subsidies, the bloated civil service and the state-run industries.

There was much discussion of how much popular support the programme enjoyed and whether the pressure for reform was indigenous or had come from abroad, notably the IMF. For many years, Indian economists had been discussing economic reform, but it was accepted that the payments crisis of 1991 and the IMF had forced the government to act. Nevertheless, public support was not wide-spread. The twin aims of economic reform, to raise the level of competition within the country so as to force Indian industry to improve productivity, reduce costs and achieve international standards of quality, and to open the Indian market to international trade and investment, would run into resistance due to long-standing attitudes and constraints. Protection and the policy of self-sufficiency had to be abandoned and many vested interests would be threatened. Privatisation was not seen as the answer for state-run industry, rather the opening up of that sector to private competition. Compensation and training for redundant workers were necessary. There was a risk of the creation of a divide between the East with its declining industries and the West with the new technologically- based industries. Performance in such areas as transport, communication and power must be improved. Agriculture must not be neglected. Water resources were wasted. The massive subsidies on fertilisers and electricity had to be removed but precipitate action there could produce hardship and violent resistance. For success the government would have to be ready to raise taxes, attract foreign direct investment (a contrast between Indian and Chinese attitudes and success in this area was noted) and convince the electorate that the benefits would extend beyond the 20% of the better-off upper or middle class to the 200-500m of the population (according to different estimates) living in poverty. Indeed, poverty and population growth must be the top concerns for any government of India, with important implications for domestic and foreign policies. In general, the conference supported strongly the direction of the reforms: for them to be continued, foreign support and political will were essential.

The discussion of India’s foreign policy took place in the shadow of the collapse of the Soviet Union, on which India had depended in so many ways, notably for armaments. And yet, the republics of the former Soviet Union, including Russia, were scarcely mentioned. The conference noted what were seen by some as major errors of policy vis-a-vis Afghanistan and Iraq. It welcomed Indian efforts to improve relations with its neighbours in the sub-continent, with Pakistan a special case, through a more pragmatic give-and-take style; and the stabilisation of the border issue with China, though without any abandonment of Chinese demands or Indian rejection.

The conference also welcomed Indian attempts since the collapse of the Soviet Union to improve relations with the West, especially the US, to which discussions like those of the weekend could contribute. But much of the debate centred on the nature of Indian aspirations in the international field, the resistance to what Indians saw as the exploitation of the UN and its instruments by the West, especially the US, what one participant called “the juggernaut of the new world order á I’Américaine”, a hankering after a role for the Non-Aligned Movement despite the loss of its raison d’être, the demand for equal representation of the developing countries, with the danger that India might come to be perceived as the leader in a “North-South” confrontation replacing the Cold War, and for non-discrimination in all areas of international intercourse. From these attitudes sprang Indian objections to some of the drafts in the Uruguay Round, to IMF, World Bank and IFC conditionality, to the Non-Proliferation Treaty, the aspiration to a permanent seat on the Security Council and so on. To the question whether India aspired to major power status on a global or regional level, (and how was that to be defined, by military power or economic strength?) there was no clear answer. The sense of insecurity was questioned. Clearly the dominant power in the region, by any standard, why did India devote so much to defence (3.1% of GDP, not including nuclear expenditure, admittedly a reduction from previous levels) with the ambition apparently to build a blue water navy? Even in relation to Pakistan, and taking account of the large land-mass, long border and assorted overseas interests, Western participants tended to find India’s security concerns exaggerated. In the nuclear field, the conference accepted that abandonment of the nuclear option was not realistic in the foreseeable future, given the Chinese and Pakistani positions; but acceptance of a non-discriminatory freeze on deployment of delivery systems and on the production of fissile material, a ban on testing, and perhaps, though more of psychological value, a no-first-use declaration were all measures which should be considered (and perhaps a condition on membership of the Security Council, should that come on the agenda). In any case India’s policy of nuclear ambiguity had out-lived its usefulness.

Even taking account of the dormant border question, relations with China in the short term appeared to be good, the main potential irritant being China’s handling of Tibet. India was critical of China’s human rights record, but found itself aligned with China in objecting, on principle, to international interference in what it saw as an internal affair, a position which did not go uncriticised. In the long-term, China and India could well find themselves rivals in Asia and, with the border issue unresolved, relations could become tense. Relations with Japan were not discussed at length, though Japanese interest in investment was noted.

There was a brief discussion of the role of non-resident Indians (NRIs) of whom some 15m are spread through the world, many wealthy and in positions of influence, both through their connections in India and on the policies of their countries of residence. They could be and were important sources of investment and of reform and innovation in such fields as health and education.

A short account can do little justice to a wide-ranging and often philosophical debate: the mainsprings of Indian attitudes in international affairs (a legacy of the colonial experience, a feeling that India was under-valued in the world, the simple pursuit of justice?); the threat of Islam, though not monolithic, and of Pakistan, to the cohesion of India as a secular state, in the sense described, and as the natural heir to the whole sub-continent; the nature of national power and the benefits (or disadvantages) of major power status. India, it was said, was a tiger in an open cage which refused to come out. Across the field participants were cautiously optimistic; but India was what it was, and the tiger would emerge in its own time.

This Note reflects the Director's personal impressions of the conference. No participant is in any way committed to its content or expression.

Chairman: Sir David Goodall GCMG
Retired from HM Diplomatic Service as High Commissioner to India (1987-91)


HE Mr David Evans
Australian High Commissioner to India

Dr Amin Saikal
Reader in Political Science, The Australian National University (ANU), specialising in politics in the Middle East, the Soviet Union and Eastern Europe

Dr Robert Bradnock
Lecturer in Geography of South Asia, School of Oriental and African Studies, University of London

Mr Christopher Haviland
Regional Director, (Asia/Australasia), Barclays Bank pic, London

Mr Vijay Joshi
Economist; Fellow, Merton College, Oxford

Mr Neville Maxwell
Senior Research Fellow, International Development Centre (directing Contemporary South Asia Programme) and Director, Journalists’ Fellowship Programme, Queen Elizabeth House, Oxford

Professor Bhikhu Parekh
Professor of Political Theory, University of Hull

Mr Joe Rogaly
Associate Editor, The Financial Times

Mr Julian Stretch
Regional Operations Manager, Rank Xerox Lt

Dr David Taylor
Lecturer, Department of Political Studies (South Asia), School of Oriental and African Studies; University of London

Mr Martin J Williams
Head, South Asia Department, Foreign and Commonwealth Office

The Hon J Hugh Faulkner PC
Executive Director, Business Council for Sustainable Development, Geneva (preparing business perspective for UNCED Conference, Rio de Janeiro 1992)

Mrs Nalini Stewart
Journalist; Director, Lester B Pearson College, Victoria

Dr Violette Graff
Research Fellow, Fondation Nationale des Sciences Politiques and Centre d’Etudes pour l’Inde et l’Asie du Sud (EHESS), Paris; author; specialist in communal and minority problems.

Dr Dieter Braun
Staff member, Institute for International Studies, Ebenhausen (1969-1990)

Dr Peter Christian Hauswedell
Head, Planning Staff, responsible for Western Europe, EC, Security Policies, NATO, WEU and South Asia, Ministry of Foreign Affairs, Bonn

Mr Gautam Adhikari
Associate Editor and Foreign Correspondent, The Times of India

Professor Pranab Bardhan
Professor of Economics, University of California at Berkeley

Mr Muchkund Dubey
Retired as Foreign Secretary of India (1991)

Mr Ashwani Kumar
Former Additional Solicitor General of India

Mr Swraj Paul
Chairman: Caparo Group Ltd; Caparo Industries pic; Caparo Inc. USA; Armstrong Equipment Ltd; CREMSA, Spain; Barton Tubes, Canada; United Merchant Bar; Bull Moose Tube Co, USA; Bock Industries Inc. USA; Founder Chairman, Indo-British Association

Mr Krishna V Rajan
Deputy High Commissioner of India to United Kingdom

HE Dr L M Singhvi
High Commissioner of India to United Kingdom (1991); jurist; author; human rights activist; actively associated with several social, literary and cultural organisations in India

Mr Atal Bihari Vajpayee MP
Member of Parliament and President, Bhartiya Janata Party 

Mr William J Barnds
President, Japan Economic Institute of America (1985-90)

Professor Francine R Frankel
Professor, Political Science Department, University of Pennsylvania

Mr Peter W Galbraith
Professional Staff Member, Committee on Foreign Relations, US Senate, Washington DC

Mr Selig S Harrison
Co-Chairman, Carnegie Endowment Study Group on Indo-American Relations

Professor Atul Kohli
Professor of Politics and International Affairs, Woodrow Wilson School of Public and International Affairs, Princeton University

Professor James G Manor
Institute of Development Studies at the University of Sussex

The Hon Thomas R Pickering
United States Ambassador designate to Indi

Dr George Rosen
Professor of Economics, University of Illinois at Chicago (UIC)

Mr Howard B Schaffer
Research Associate and adjunct professor, Institute for the Study of Diplomacy, Georgetown University