To what extent can India mould the new world order in the background of the declining US and rising China?

Guiding Businesses

To what extent can India mould the new world order in the background of the declining US and rising China?

After the II world war, an interconnected and systematised global order was created. This world order remained intact to a large extent regardless of a few hiccups in the last 65 years. However, with political scientists predicting the rise of a more closed world and economists writing off globalisation, a shift from the old world order is inevitable. The recent pandemic acts as a catalyst to this. Countries are turning inwards and becoming authoritarian.

For example, United States has been showing hostility towards multilateral trade, it withdrew from the Trans-Pacific Partnership (TPP), a 12-nation trade deal, which was meant to increase United States’ influence over Asia-Pacific, while countering China’s growth. Even India refused to join the TPP, but the same will not have an adverse impact. In fact, Abhijit Das, head of the Centre for WTO studies have said that the TPP model might not be in the interest of India. According to him, provisions of TPP if applied will expose farmers to the risk of being knocked out of the market, while domestic industry may not be able to face import competition. Recently on May 29, the Trump administration declared that it would revoke Hong Kong’s special trade status under the US laws. This will limit the entry of certain Chinese graduate students and researchers, Chinese firms would be closely examined and would be delisted if they did not comply with US laws. Also on May 26, the US formally announced its decision to leave the WHO. However, this “America first” approach didn’t work as the US had to turn to China, India and South Korea for medical supplies.

The Chinese, on the other hand, are growing more aggressive to be the world power. The Chinese perspective is guided by three significant principles: GDP-ism (stating that the most important logic is economic development), China-centrism (China is the cultural, political or economic centre of world) and China exceptionalism (China follows its own wisdom and doesn’t believe in learning from others).

Opportunity for a New World Order

With growing tensions between US and China and the two countries choosing distinct paths to recover from the pandemic, India can very well see this as an opportunity to unfold a new world order. Environment, healthcare, technology and democratic liberalism will be the foundations for the new world order. India can assume a significant job in building a world dependent on “human-centric development cooperation”. The Prime Minister’s address to the nation on May 12 also had the underlying message about making India Global and turning crisis into opportunity.

For this, first, India should seize the opportunity to re-wire the global supply chains. As the world is blaming China for the pandemic, global companies are looking at shifting manufacturing from China to India and using India as a manufacturing export base. Half a month back, a bill was introduced in the US Senate to permanently end US reliance on Chinese produced pharma in two years. A few European countries too issued a mandate to partner companies to decrease reliance on China to under 10% in the next two years.

However, major reforms are needed to become a serious investment destination. The opportunity does not come up without any competition. A 2016 CRISIL study pointed out that in the last decade, Vietnam and Bangladesh took up low-end manufacturing from China, while India lost its market share in global exports. The competition should be seen from the point of view of creating more job opportunities by expanding industries. The government and Indian companies could join hands to guarantee that the individuals that lose their jobs are available to MNCs hoping to move base into India and thus provide Indian companies and labour, immediate relief.

Moreover, an empowered joint industry-government task force should be established to help build awareness about India as a sourcing destination. An Indian sourcing portal like Alibaba can be launched too. All this can be backed by some incentives given to exporters like credit support, subsidies and ensuring smoother and faster clearances.

India emerges as a World Leader

The role of the majority of regulatory bodies, including the United Nations and the WHO, has been inadequate. These bodies failed to guide the world on how to combat the virus effectively. This has led people to realise that the old framework in which authority in terms of global affairs is vested in just a couple, should change. There is no reason why India, the largest democracy with 1/6th of the total populace, not get its new place in the new world order. No nation should discredit a legitimate decision of the majority by practising its veto power.

Has G7 become defunct?

India has emerged as a powerful leader amidst the pandemic by demonstrating the world the value of ethics, sharing, honesty and most importantly integrity. The country, led by Prime Minister Narendra Modi, has guided different nations including the regional forums like SAARC on dealing with the pandemic. India even requested a gathering of G-20, which the nations like USA, UK, Germany and Saudi Arabia promptly accepted. Even Jim O’Neill, the former chairman of Goldman Sachs Asset Management who first coined the term BRIC, says that it’s “time up” for the G7 group of nations and that another G7 ought to be formed and the old G7 junked. According to him, the new G7 should comprise of the US, the EU, Japan and the four BRIC countries, Brazil, Russia, India and China. The new G7 would account for 75% of global GDP. Interestingly, on 2 June, US President Donald Trump invited India to join an expanded G7.

Recently, during the Non-Aligned Movement(NAM) Summit via video conferencing, Modi emphasised on the fact as to how we need a new framework of globalisation based on fairness, equality and humanity. International establishments that are increasingly illustrative of the present world with a focus on human welfare and not just economic growth can achieve the objective.

Despite our own needs, India shared medical supplies including the drug hydroxychloroquine (HCQ) with over 123 partner countries, including 59 members of NAM. This earned India the reverence and regard of the whole world. Even at the video conference among the 20 greatest economies of the world - G20, there was an impressive deal of spotlight on India. India was applauded for exceptionally managing the pandemic with a populace of over 1 billion, second, to only China’s. All this additionally resounds India’s developing position in the new world order. This was because in the initial weeks of April, India could curb the infection, but, after the lockdown was eased on 8 June 2020, India saw a surge in the infections. The nation surpassed UK to become the fourth-worst affected country. India needs to increase the number of tests whilst improving its healthcare infrastructure to again gain the trust of the citizens and ultimately the world.

Shift towards a Multipolar World

As indicated by IMF’s most recent global projection, the post-coronavirus world economy is expected to dive into the worst recession since the great depression. The USA will have (-5.9%) negative development and Europe (-7.5%) negative development. The total estimated loss to the global GDP over 2020 and 2021 is over $9 trillion, which is more than the combined economy of Japan and Germany. India is among a couple of countries, which will have a positive GDP growth rate, estimated at 1.9 percent. It is the highest among G20 countries with China closely following at 1.6 percent. This will lead a path towards a state of “multipolarity” with India being one of the poles.

The period after the Soviet Union collapsed was a “unipolar” period - a time when the United States was, and behaved like, the most powerful country in the world. Even before the pandemic, states were moving towards multipolarity, however, the crisis has accelerated the shift. The US-China relationship, which has always served as a pillar of the global economy will falter and the world will become more competitive with increased protectionism. Even the SAARC model will distort the current unipolar system with India working closely with its neighbouring states. India has always been an advocate of devolution of power away from the traditional powerhouses such as USA, Russia and China. With the SAARC countries working together and emerging as a strong regional bloc, it can influence other power players in regional blocs such as BRICS and ASEAN to follow in its footsteps. Not just India, but other countries will emerge soon. For example, a stronger and centralised EU will emerge, Russia will become a buffer zone between China and Europe and Turkey will look to turn into a predominant power in the Mediterranean.

Furthermore, to work towards a multi-polar order, India’s way forward is either through participation in, or formation of, multilateral groupings. India’s commitment to multilateral associations has expanded since the finish of the Cold War. India is related with a few discussions, for example, the Association of Southeast Asian Nations (ASEAN), the East Asia Summit (EAS), the BRICS Summit, the Shanghai Co-activity Organisation, the G-20 Summit, the Mekong-Ganga Co-activity, the International Solar Alliance and so forth. India has additionally be related to forums such as the Commonwealth and the NAM for over 50 years.

India – a deserving candidate for a permanent seat at UNSC

India’s growing admiration and respect in the world and its commitment towards multilateral forums can help it gain a permanent seat in the United Nations Security Council (UNSC) as well. Currently, the West, which is home just to 12% of the total populace, comprises 60% of the permanent membership in the UNSC. The UNSC is one of the most powerful body on matters of world harmony and security, including taking action against ill-behaving nations. As a significant racial and cultural group, a world civilisation, a supporter of world’s developments, and a significant 21st-century economy, India’s wisdom and its autonomous voice will provide a much-needed parity in world politics. Hence, it should have a permanent seat in the UNSC.

Even Estonia, which entered UNSC as a non-permanent member for 2 years and was among nations to block the Chinese endeavours on Kashmir, supports India. Estonia’s Foreign Minister, Urmas Reinsalu recently called for UN reforms and expressed that India merits a permanent seat on the UNSC. Barring China, the other 4 permanent members have also been in support of India getting a permanent seat at the UNSC. Backing for India has been expanding with several nations pushing that the current UNSC does not represent the geo-political realities of the 21st century.

China has been the main country hindering India’s entrance by utilising its veto power. It has even used his veto power to block WTO resolutions to benefit itself. In the event that India is given a similar access, it could be a game-changer in terms of the shift in balance of power in world politics. India would be the ideal counter to check Chinese impact and force in the area. Germany, Brazil and South Africa are not reasonable alternatives at present and hence, India should get a permanent seat in a short period. With no other country willing to contest the Asia seat even China was forced to propose India as a temporary member of the UNSC seat for two years, starting in 2021. India is sure to win the position and thereby take its first step in pushing efforts to reform the Security Council and seeking a permanent membership. If India gets included in the UNSC, it will reinforce India’s stature as a “moralistic force” for the developing states and help in making UNSC more democratic.

In addition to the above stated, India needs to work towards specific goals in order to change the world order. Some of them are:

  1. India should turn into a significant industrial and technology power. Development of indigenous technologies should assume as significant a job as technology transfers from other nations. Foreign organisations must be urged to take an interest in India’s development but partnering with Indian-owned companies and innovation must be the primary criteria for who gets invited and boosted by the Indian system.
  2. Indians should keep a large portion of the advantages deriving from India’s development. Foreign fundings should be used for the development of infrastructure, while domestic funds should be utilised for the development of high-growth tech industry.
  3. The Indian rupee must be one of the world’s top four reserve currencies. This won’t just represent India’s economic significance to the world, but also bring about real economic benefits. It will likewise shield India from antagonistic activities from other countries like the imposition of sanctions.

A new world order is inevitably looming on the horizon, so the only question remaining is when and will India seize this opportunity and make the best out of this crisis.

 

 

About the author :  Tisha Chhaparia is an undergraduate student pursuing BBA LLB(Hons) at Symbiosis Law School, Pune. She enjoy's solving real-life problems and interested in corporate law. She wants to someday create a measurable impact on the legal system and believe's “Every day is a second chance” and that one can always start afresh. In her free time, she love's to read thrillers or bake."

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