Narendra Modi undertook 18 foreign visits in his first year as prime minister. His energetic foreign policy and busy diplomatic calendar have been met with both hype and scepticism. Neelam Deo, director at Gateway House, comments on the highlights of Modi’s foreign policy over the past one year.
Statement:
“Prime Minister Narendra Modi’s foreign policy over the past year has been both purposive and energetic, contributing to the enlarging of India’s strategic autonomy. His approach was designed to attract foreign investments which are needed to finance economic growth and generate employment to fulfil the election promises made by the BJP. Infrastructure and manufacturing, in particular, are in need of significant investment for which neither the government nor the Indian private sector have the wherewithal. Modi actively promoted Make in India in Germany, the U.S., South Korea and Japan. Defence and insurance are some key sectors for which foreign direct investment (FDI) caps have been raised.
In the last year, increased interaction with countries in South Asia has significantly improved relations with neighbours like Myanmar, Bangladesh, Sri Lanka and Nepal. While on one hand, this is geopolitically significant, it has also improved prospects for access to clean energy – gas and hydro. However, relations with Pakistan remain unstable.
He has had intense interactions with the P5 countries—visits and reciprocal visits with Presidents Barack Obama and Xi Jinping, a visit to France and Germany, and hosting President Vladimir Putin in New Delhi—aiming to attract investment, technology for defense indigenisation, nuclear energy, skilling programmes and outreach to the Indian diaspora in the countries he visited.
Modi’s external outreach has been bolstered by key domestic reforms to create a more conducive investment climate, mainly: reducing corporate taxes from 30% to 25% over the next four years, addressing corruption by auctioning scarce resources and expanding e-governance for SMEs.
Foreign policy has been the most visible and vibrant dimension of his term as prime minister, so far. However, to consolidate the rebranding of India, further economic reforms will be required in his second year, particularly the introduction of a unified Goods and Services Tax and a new bankruptcy code.”
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Reetika Joshi
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