The relationship between Estonia and India is focused on the economy and contacts between the two countries are growing rapidly.
On 21 August 2019, the vice president of India, M. Venkaiah Naidu, visited Estonia, becoming our most prominent visitor from India to date. Indian presidents, prime ministers and foreign ministers have never visited Estonia; however, in 1982 the then prime minister Indira Gandhi—mother-in-law of the current Indian opposition leader Sonya Gandhi and grandmother of former Congress Party president Rahul Gandhi—visited Tallinn. The number of top-level Estonian leaders who have visited India is considerably higher, but it is customary in foreign policy for representatives of smaller countries to visit the bigger ones, as a country like India has a much more varied and deeper spectrum of relationships than Estonia. However, all countries have the same number of calendar days, regardless of their size.
Calm and composed, vice president Naidu wore a traditional white kurta, which is particularly characteristic of South India, as he arrived in Estonia and other Baltic states with a clear agenda—to improve India’s profile as a great power on the international stage, especially in major international organisations such as the UN. His messages were calculated and specific. India stands for balanced development, it proceeds from the individual characteristics of each country, and it considers combating international terrorism a high priority. India’s foreign policy directly reflects its domestic policy. The logic of thought and the norms of India’s behaviour in global foreign policy are an amplification of how this country with an enormous population and land mass continues to function as a state and plans its future development. The perfect embodiment of this peaceful (non-violent) political tradition is the father of Indian independence, Mahatma Gandhi, the 150th anniversary of whose birth will be celebrated on 2 October. It is India’s wish to commemorate Gandhi by installing his sculptures and busts in capitals around the world, including Tallinn. India is ready to gift Estonia such a bust if we find a suitable place to display it. This is a demonstration of India’s so-called soft power, a reminder of the “Indian alternative” to all (foreign) policy-shapers all over the world.
Indians themselves constantly cite contemporary India’s relatively amicable domestic policy as an example to the EU, stressing that the EU wants to be harmonious despite the differences between member states, just like India. India comprises 29 states, which is comparable to the current 28 EU member states. The linguistic and cultural differences between Indian states are often greater than those between European nation-states. For instance, India has a huge diversity of languages: aside from 22 official languages, there are 122 other major languages plus a number of different alphabets. The street signs in the capital, Delhi, are in four different alphabets. India is also much more diverse than Europe when it comes to religion. In spite of all this, India appears unified on the outside.
The development of India’s peaceful policy also reflects the understanding that war (violence) is a continuation of politics by different means. India’s struggle for independence in overthrowing the British Raj and developments after becoming independent in 1947 have time and again been overshadowed by violent events. The main reason for this is India’s immense size and ethnic and religious diversity. It is not easy to achieve perfect harmony in a country whose population has grown to 1.35 billion, which is why conflicts between ethnic, religious and political groups (with the Maoists being most active of the latter to date) are sometimes the rule rather than the exception. The greatest divider in domestic policy is religion. Even though India is a secular country according to its constitution, the majority of Indians consider themselves as part of one religious group or another. Hinduism and all its numerous denominations form the largest group (more than 80%—about one billion people). India also has large Buddhist, Jain and Sikh communities. All of the four main religions originated in India. It is also home to some 200 million Muslims (about 14% of the population), which effectively makes it the second-largest Islamic community in the world after Indonesia. India’s two great neighbours—Pakistan and Bangladesh—have similarly large Muslim communities.
The Partition of British India, i.e. the creation of the independent states of Pakistan and Bangladesh (East Pakistan until 1971), is considered the country’s greatest national disaster to date. The then leaders of India, Mahatma Gandhi and Jawaharlal Nehru, tried to avoid it for a long time with no success, as a result of which ten million people were forced to leave their homes for religious reasons. There are tensions between former compatriots even today because, despite the great migration, the question of the affiliation of several regions remained unresolved. The largest and most significant of these is the state of Jammu and Kashmir (a part of Kashmir is controlled by Pakistan), whose special status granted in 1954 was revoked in August this year by the Indian president at the request of the prime minister, Narendra Modi, who had just been re-elected. For decades, this Muslim-majority state has posed a major problem for the Indian central government, mainly due to its active separatists, who also use violence to achieve their goals. Article 370 of the Indian constitution gave Jammu and Kashmir its own constitution and extensive rights of self-government, essentially leaving Delhi only the role of shaping foreign and defence policy (plus communications policy). But this extensive autonomy has not contributed to relieving tensions in the region. The resolution of the so-called Kashmir question was one of the central election promises of the BJP (Bharatiya Janata Party) led by Modi. The spring elections gave Modi a new, stronger mandate to fulfil his promises. Nevertheless, revoking Kashmir’s special status and thus essentially isolating the state from the rest of the world was a very forceful move. One of the most important points of the special status was a protective clause that prohibited anyone who was not a resident of the state from owning land there. Now, the locals expect a potential influx of Hindus to Kashmir, which they consider a great threat that could change the region’s ethnic composition: 95% of the four million residents of today’s Kashmir are Muslims. The consequences of this decision are hard to predict, but it is unlikely that everything will go smoothly, whether the problem is an increasing number of violent clashes with separatists, growing domestic terrorism in other parts of India or its effect on the economy. While in Tallinn, vice president Naidu repeatedly emphasised that this was a domestic issue and that India did not want other countries to intervene.
Modi’s decision was popular from the perspective of Indian domestic policy, but the times ahead will be more turbulent when it comes to foreign policy. The question of Jammu and Kashmir will be resolved by domestic political means, but it is directly related to India’s current greatest foreign-policy challenge: the relationship with Pakistan. The former compatriots have been to war with each other four times since their establishment as independent countries (in 1947, 1965, 1971 and 1999), the last time with both as nuclear powers. There are frequent smaller clashes. Every year, both sides have to retrieve the bodies of dead soldiers from the frontier territory in the high Himalayas. India blames Pakistan for providing support to separatists, including the direct funding of terrorism. In this context, it is worth mentioning that India has a very good relationship with Bangladesh, which is also a Muslim-majority country, if we leave aside the immigration problem that arises from Bangladesh’s overpopulation. Pakistan constitutes a big security threat to India, especially given the fact that it is a nuclear neighbour that does not balk at bloody clashes. Despite this, India’s policy on Pakistan has become considerably more assertive, because softer approaches have not produced results. The strengthening of economic ties is not an alternative, because the countries have no political will for this and are not mutually dependent. At the same time, India’s economic growth has progressed much faster, being more than ten times greater than Pakistan’s. To sum up, India sees Pakistan as a geographically localised, short- to medium-term foreign- and defence-policy issue.
The average Indian citizen may view Pakistan as the country’s biggest challenge, but discussions with India’s political elite reveal that, in the long term, India only has one true rival and potential security threat: China. The relationship between these two large and rapidly developing economies, both with populations of over a billion, is characterised by mutual distrustful respect. India’s GDP currently ranks fifth in the world at 3.1 trillion US dollars, which is considerably less than China’s 14 trillion. Nevertheless, bilateral contact remains focused on economic questions as these are politically less sensitive. The trade relationship could see a rapid increase in the coming years owing to the ever-escalating trade war between China and the US. Like Pakistan, India has many unresolved border questions with China. India, which has an extensive cultural history, understands well that China is playing the long game, and it therefore tries to keep up with its great neighbour. India is behind in both economic and military terms and the gap between the two countries is ever increasing. This is particularly painful for India, because the serious losses suffered during the month-long war between them in the autumn of 1962—which turned out to be short-lived as China declared a ceasefire and withdrew its troops from India—is still remembered decades later.
China does not have a clear impact on India, but its influence is very evident in the surrounding countries, which causes great concern to India. China’s large-scale investments in harbours, airports and other infrastructure projects in Myanmar, Sri Lanka, Pakistan, the Maldives and Nepal are a significant threat to India’s position in the Indian Ocean region, where it considers itself the key player. India is struggling to counter China’s increasing influence in Himalayan countries (Nepal and Bhutan) and sometimes uses very forceful means, such as its boycott of Nepal in 2015. Estonia’s ambition to establish diplomatic ties with Bhutan is mainly held back by the opposition of the Indian Ministry of External Affairs (MEA), because China is also among the first to expect a freer rein in Bhutan. Relations with India are extremely important to Bhutan, because the latter’s direct contribution to the kingdom’s economy and budget is very significant. Even though China has no diplomatic representation in Thimphu, its opportunities to flood the small country with “treats” are endless. Consequently, due to the looming influence of large countries, Bhutan cannot engage in long-term relations even with small countries such as Estonia. China is an important partner for Pakistan, for which it is somewhat larger and more significant than India, supplying Pakistan with weapons and investing in its infrastructure. Pakistan realises that it is under great Chinese influence and faces a serious threat of becoming indebted to it, but India remains a bigger problem, which is why Islamabad is prepared to continue to tolerate the risks arising from China.
India does not currently have a clear plan for how to counter China. China does not yet consider India a significant threat, as it plays with bigger stakes and is focused on the US. As India’s economy grows stronger, this opposition will certainly escalate and take a more prominent place in global politics, but this is still decades away. With the absence of a strategic plan, emphasis is placed on the leaders’ personal relationship. Regular meetings between prime minister Modi and president Xi are always treated as big media events and metaphors for the good neighbourly relations between the countries. This autumn will see a summit in Tamil Nadu, but until then, the countries will try to maintain the “Wuhan Spirit” (the result of the 2018 summit in that city).
India has traditionally had good relations with Russia, dating back to India’s early years as an independent country, when it developed close ties to the Soviet Union. Although India did not officially belong to any global alliances, it was still a socialist country according to its constitution. Under the leadership of Nehru and Gandhi, the country actively developed trade with the USSR based on barter. India’s economic policy is still devised as five-year plans and, to this end, the government also has a planning committee. The country continues to maintain close ties with Russia, albeit with a touch of Asian symbolism. The closeness of the relationship between India and Russia is supposed to be reflected in the cooperation agreement that regulates it—the Special and Privileged Strategic Partnership—but the document is more form than substance. Bilateral trade amounts to less than 10 billion dollars per year (about one-tenth of that with the EU or China), the majority of which is made up of fossil fuels and mineral products such as fertilisers. The plan is to increase the volume to 30 billion dollars in both directions by 2025. This goal will be difficult to achieve. Even Indians themselves find that life was easier in the past, when the leaders would agree that 20 wagonloads of tea would be bought from India and it was then simply dispatched to China. In return, they received oil or a nice shiny cannon. The similar quid pro quo culture dominated the markets down to the individual level. This reminds me of my father’s stories of how he exchanged soap and perfume for a leather jacket when visiting India in the late 1980s.
Times have changed in both India and Russia. The only major fields in which cooperation still works well are defence and space exploration. Russia/the USSR has always been India’s biggest weapons supplier. At the same time, India is worried about Russia negotiating with the Taliban in Afghanistan and supplying weapons to Pakistan. Russian arms deliveries to India are often behind schedule, especially in terms of maintenance. The variable quality of the Russian services plays into the hands of Western suppliers, particularly France, the US and Israel, all of whom have bagged significant large-scale contracts in recent years. Although Russia may not be the most important partner for India, it is considered a relatively convenient one compared to other large countries. For instance, Russia has kept the promises it has made to India at the UN—something that the US has been criticised for not doing several times in Delhi’s corridors of power. The close relationship with Russia is driven by India’s pragmatism, as it wishes to prevent Russia from becoming too close to China. It is because of this that India’s foreign policy has not quite met Estonia’s expectations in terms of European affairs. India did not condemn Russia during the Ukraine crisis. First, India does not want to undermine the freedom it has in its borderlands, like Kashmir. Second, the rhetoric of the Indian MEA following the annexation of the Crimea and the EU sanctions against Russia was that the EU was pushing Russia into the arms of China, which is dangerous for both India and the EU.
India’s relations with the US are perhaps the most pragmatic of all and opportunities for cooperation are sought where possible. India’s attitude towards the US is somewhat distrusting, because of the shadow cast by its past behaviour. The US approach to India has not even come close to the attention China and Russia get, for instance. Trade relations are complex, because the US is terminating India’s preferential trade status under the Generalised Scheme of Preferences. Instead, bilateral relations are now focused on discussions about the future of Afghanistan. In this, India has significantly softened its position of trusting Afghanistan to find solutions itself and has started supporting the so-called international solution. Other difficult topics include Iran and combating terrorism, as well as the close ties between India’s defence industry and Russia, including its decision to purchase the S-400 missile system despite US protests. Closer relations between India and the US are very necessary for the future, but both parties must make an effort.
India’s relationship with the EU is tightly focused on economic links, given the potential of this field. The EU is India’s largest trade partner. In 2018, the trade turnover was 92 billion euros, which is 12.9% of India’s total foreign trade (followed by China with 10.9% and the US with 10.1%). The EU wants to boost this further with a free trade agreement, but negotiations have been essentially frozen for years, mainly down to India, since differences over certain goods (the car industry, pharmacy and agriculture) have remained irreconcilable. The investment protection agreement is the only area in which some progress can be detected. The short explanation is that India does not consider the EU a significant partner, mainly because it is seen as having too fragmented a foreign policy, making its position weak. India prefers bilateral relationships, especially with big member states such as France and Germany, with whom relations have been developed quite successfully.
Pragmatism is also the keyword in India’s relationships with other bigger partners. For instance, it maintains a good relationship with Iran, which is very important to India in economic terms as the latter is entirely dependent on the import of fossil fuels. The large Central Asian suppliers remain behind the politically impenetrable borders of Pakistan and China. The only way they can access the Indian Ocean is via Iran, with whom India is expanding the strategically important Chabahar Port. Another important member of this transit corridor is Afghanistan, with whom India has generally had good relations. At the same time, India’s relationship with Iran has become strained due to US policy towards Tehran and it cannot continue to import oil from Iran under the same exceptional terms.
Indian foreign policy respects the principle of non-interference (per the Non-Aligned Movement (NAM) established in 1956 by Nehru, the Yugoslav dictator Josip Broz Tito and Egypt’s Gamal Adbel Nasser), which is why it wants to focus on multilateral formats, especially the UN. Becoming a permanent member of the Security Council is one of India’s foreign-policy priorities and probably its main objective. This status would not only increase India’s foreign-policy significance in the world, but also serve a more practical purpose, because the UN’s current rules of behaviour are often a thorn in India’s side. The repeated failure to get Masood Azhari (the leader of the Jaish-e Mohammad network) onto the UN’s list of terrorists, which has been vetoed by China four times, is a perfect example of this. On the one hand, this is driven by China’s wish to help its partner Pakistan, but on the other it serves as an example for India of how members take unfair advantage of the UN’s complicated procedures. Another great source of irritation is China’s success in blocking India from becoming a member of the Nuclear Suppliers Group (NSG). India has chosen to change all of this via a UN reform. The decision in 2015 by the UN General Assembly to declare 21 June the International Day of Yoga may have been considered a small victory by some, but it was an important one for Narendra Modi. This is another example of India’s soft power in the world, which Modi seeks to extend by all means necessary.
In 2022, India will take over the chairmanship of the G20. It is an active member of the BRICS association of emerging economies. Multilateralism and multipolar relationships are a cornerstone of Indian foreign policy. India wishes to have a say in all larger formats as an equal partner. It is fundamentally against being classified as a country that requires development aid. It is the only country where hundreds of millions of people lack the opportunity to use a toilet on a daily basis (solving this problem was among the promises made by Modi’s first government and several million outhouses were indeed built), but it does not wish to accept development aid. This is purely a matter of honour. India’s status as a great power is also to be confirmed by the nation’s space programme, which is considered extremely important at the central government level. The Indian spacecraft Chandrayaan-2 was scheduled to land in the Moon’s south polar region on 6 September, a very important milestone for the country. [Contact was lost just before touchdown and the lander’s fate remains unknown at the time of this article’s publication.—Ed.] On 27 March, two weeks before the Indian general elections, Modi announced with great pride that India had shot down one of its own orbiting satellites as part of a successful test of new missile technology, despite the fact that this was a breach of international rules and created a large amount of dangerous space debris. India had shown the world its ability to operate far beyond its borders.
The shortage of people in India’s foreign service is a major hindrance to expanding the country’s reach. Fewer than 1,000 diplomats work for the Indian MEA, staffing 163 missions abroad in addition to filling positions in Delhi. This is comparable to the foreign services of, for example, New Zealand or Singapore, while China has 7,500 diplomats and the US nearly 14,000. By comparison, Estonia has around 300. India recruits only up to 15 new diplomats per year, due to the strict recruitment system designed to maintain high quality. It is clearly difficult to be a great power in the foreign-policy arena with such a small number of people. In his new government, Modi promoted former Foreign Secretary [a civil service position equivalent to permanent secretary—Ed.] Subrahmanyam Jaishankar to be Minister of External Affairs. As he is a capable diplomat (more precisely, a career diplomat), one can expect that India’s foreign policy will become more systematic and coordinated and will perhaps also receive more resources, which is crucial for a country with global ambitions. At the moment, one might jokingly say that the Indian MEA is one of the most efficient in the world, as it must do so much with so little. The human factor is also the main reason that Estonia’s wish for an Indian embassy in Tallinn has not yet been fulfilled. Naturally, it is also important to constantly hold India’s attention. For instance, India is planning to open 18 new embassies in Africa by 2021. Vice president Naidu’s visit to Estonia was therefore undoubtedly noteworthy.
On the basis of the above, India’s foreign policy could be seen as a policy of small steps. It is difficult to outline a big plan, but this is hard even for more capable countries in a rapidly changing world. After all, India’s big problems are actually domestic, despite global complexities. The lack of a big plan and making progress by taking small steps is also a big domestic challenge. This is best illustrated by the spring election programme of Modi and the BJP. The campaign was mainly focused on national security (Kashmir and Pakistan), education and the protection of the rights of farmers and women. It also included grants for small shop owners, ensuring the well-being of the families of servicemen and police officers (including study grants for their children), the resolution of the water crisis, boosting the efficiency of the fishing sector and making banking services available to everyone. These issues affect hundreds of millions of people. At the same time, India requires major reforms, which will have a negative impact many people, at least in the short term. For instance, there is an urgent need to conduct a land reform and consolidate agriculture and retail, i.e. sectors that employ a huge number of people. These people, who will potentially lose their jobs, cannot move on to larger companies, because the latter are afraid of hiring due to India’s strict labour market laws, which essentially make it impossible to dismiss employees in crisis conditions. This also significantly limits India’s opportunities in the international economy. As China becomes a more expensive option, investors are looking for new, cheaper places for large-scale production. India would be perfect in every way, but entrepreneurs are put off by its bureaucracy and rigid labour market.
One of the greatest economic success stories from the previous election period was the establishment of the national goods and services tax (GST). Before this, different states had different tax regimes: essentially, one had to pay customs duties whenever one crossed a state line. India’s economic space consisted of 29 separate economic units. Essentially, India is now creating a single market similar to that of the EU, which has managed to do this very successfully. India’s latest budget, which is supposed to set the direction of economic policy, is however moving in the opposite direction and several taxes are being increased. The country requires funds for additional investment, but this should be achieved by changing the tax culture rather than by raising taxes. Only 47 million people—3.6% of the population—pay tax. These reforms are necessary and require decisive action by the government.
Where does little Estonia fit into all this? The focus is on economic ties and these are growing fast. Exports have increased to 90 million euros, which is still small, but comparable to our trade with Japan. Estonia has attracted its first Indian investments. Some 200 Indians study at Estonian universities. The number of Indian tourists is also growing and was just under 20,000 last year. A substantial number of our e-residents originate from India and they have established over 400 companies in Estonia. India is a large country and, in order to establish closer ties, we need more personal contact because we do not stand out to India on paper. Estonia opened an embassy in India as late as 2013. In India, and Asia in general, success and productive contacts are above all based on good personal relationships, be they in politics, education or business. It is unbelievable how many experienced Estonian exporters have made the mistake of hoping to achieve success in India by communicating via e-mail. E-mails have no effect in India; you need face-to-face meetings and a busy visit schedule, which will result in closer ties with a focus on business in the case of Estonia. This is why the Estonian prime minister and other ministers need to visit India regularly, together with business delegations where possible. These small steps fit into India’s broader philosophy—and they suit Estonia too, because we may not be strong enough to take bigger ones.