Modi to Use Courtship by World Leaders to Aid India’s Growth

Photographer: Prakash Singh/AFP/Getty Images

Narendra Modi, India's designate prime minister addresses the media after his meeting with Pranab Mukherjee, prsident of India, at the Presidential Palace in New Delhi on May 20, 2014. Modi will need to balance his call for stronger borders with nuclear-armed neighbors Pakistan and China against a need to boost gross domestic product in Asia’s third-biggest economy from near a decade low. Close

Narendra Modi, India's designate prime minister addresses the media after his meeting... Read More

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Photographer: Prakash Singh/AFP/Getty Images

Narendra Modi, India's designate prime minister addresses the media after his meeting with Pranab Mukherjee, prsident of India, at the Presidential Palace in New Delhi on May 20, 2014. Modi will need to balance his call for stronger borders with nuclear-armed neighbors Pakistan and China against a need to boost gross domestic product in Asia’s third-biggest economy from near a decade low.

Narendra Modi, who until recently was treated as a pariah by the U.S. and U.K., suddenly finds himself the object of affection of world leaders embroiled in disputes from Ukraine to the South China Sea.

Since winning the biggest Indian electoral mandate in 30 years last week, Prime Minister-designate Modi has spoken twice on the phone with U.S. President Barack Obama, became one of three Twitter users followed by Japan Prime Minister Shinzo Abe and pledged to make relations with Russia “even stronger.” China’s state-run Global Times newspaper published an op-ed column saying he’s likely to be “India’s Nixon.”

“Modi is the man of the moment,” said Raja Menon, a security analyst at the National Maritime Foundation in New Delhi who was formerly India’s assistant chief of naval staff. “Modi is an economic animal, and he will make India’s growth the chief factor in his foreign policy.”

Modi will need to balance his call for stronger borders with nuclear-armed neighbors Pakistan and China against a need to boost gross domestic product in Asia’s third-biggest economy from near a decade low. He comes to power as Japan and Southeast Asian countries are seeking to counter the rise of China, which in turn is strengthening ties with Russia amid its standoff with the U.S. and Europe over Ukraine.

“India will try to play a balanced game,” said Rory Medcalf, Director of the International Security Program at the Lowy Institute for International Policy in Sydney and a former Australian diplomat in India. “India doesn’t want to take sides, especially in a competition between the U.S. and China.”

Invitations

China is India’s largest trade partner, with two-way trade valued at $49.5 billion in April to December 2013, according to India’s commerce ministry. The U.S. was No. 2 at $45.9 billion.

After anti-Muslim riots in 2002 in Gujarat, the state that Modi has governed since 2001, U.K. and U.S. officials refused to meet with him. The U.S. denied him a visa after human rights groups accused him of not moving to halt the carnage. Modi has repeatedly denied the accusations and a Supreme Court-appointed panel found no evidence he gave orders that prevented assistance from reaching those being attacked.

In an attempt to enhance engagement in a region with long-simmering hostilities, Modi invited the leaders of India’s neighbors, including rival Pakistan, to attend his inauguration on May 26. Sri Lankan President Mahinda Rajapaksa and Afghan President Hamid Karzai have accepted the unprecedented offer. Pakistani Prime Minister Nawaz Sharif has yet to decide whether he will attend.

Seeking Investment

“It demonstrates very clearly that Modi’s priority in foreign policy will be addressing regional issues,” said Dipankar Banerjee, founding director of the Institute of Peace and Conflict Studies in New Delhi and a retired army major general. “As of now it seems his heart is in the right place reaching out constructively.”

Modi also is likely to practice business-focused diplomacy as he seeks to attract overseas investment to improve the country’s infrastructure and kick start the economy, according to Hardeep Singh Puri, 62, India’s former United Nations envoy and a member of Modi’s Bharatiya Janata Party.

During his time as chief minister of Gujarat, Modi visited nations including Japan, South Korea and China to promote investment in the state. About 100 Japanese companies, mostly automakers, promised to invest in Gujarat by fiscal 2016, according to a May 2013 statement.

“Modi is likely to use his old ties to expand economic ties wherever possible,” D.S. Rajan, director of the Chennai Centre for China studies who also worked in India’s cabinet secretariat, said in a phone interview on May 21.

Pakistan, China

He will also face more traditional geopolitical challenges. Territorial disputes continue to strain India’s relations with Pakistan and China. The withdrawal of U.S. troops from Afghanistan later this year risks destabilizing a regional neighbor in which both India and Pakistan have strategic interests.

Gunmen today attacked India’s consulate in Herat province in Afghanistan, where deepening economic and military ties between the nations risk inflaming tensions with Pakistan. The four gunmen were shot dead and no Indian staff was harmed, according to General Samihullah Qatra, Herat’s chief of police.

Modi condemned the attack and is monitoring the situation, he said in a post on his Twitter account.

“There will come a time when jihadi forces will test Modi and try to provoke him into taking action,” said Ahmad Ishtiaq, a visiting fellow at the University of Oxford. “We’re all watching to see how he reacts to their provocation.”

To contact the reporters on this story: Andrew MacAskill in New Delhi at amacaskill@bloomberg.net; Kartikay Mehrotra in New Delhi at kmehrotra2@bloomberg.net

To contact the editors responsible for this story: Daniel Ten Kate at dtenkate@bloomberg.net Jeanette Rodrigues

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