Last month, European Commission President Ursula von der Leyen announced that the first official <a href="https://nepalitimes.com/here-now/reaction-to-wang-yi-s-nepal-visit-in-chinese-media">foreign visit </a>of the commission in her second term would be to India. On the same day, Marco Rubio held his first bilateral meeting as US Secretary of State with India’s minister of external affairs, Subrahmanyam Jaishankar.
Prime Minister Narendra Modi’s two-day visit to Washington last month confirmed his country’s rising international profile. The visit ended with the promise of what Modi called a US-India “mega partnership.” He has committed to double trade with the US by 2030, increase <a href="https://archive.nepalitimes.com/regular-columns/half-full/A-carbon-neutral-Nepal-is-possible-clean-Nepal,1064">oil and gas imports</a>, and expand US military sales to India.
India is now the fastest-growing major <a href="https://nepalitimes.com/opinion/comment/how-nepal-can-avert-an-economic-crunch">economy</a>, with the IMF forecasting a 6.5% increase in GDP this year. India is expected to overtake Japan and Germany to become the world’s third-largest economy by 2030.&nbsp;
Read also: <a href="https://nepalitimes.com/opinion/india-s-election-and-its-economic-future">India’s election and its economic future</a>, Raghuram G Rajan
Despite its <a href="https://nepalitimes.com/news/missing-out-on-nepal-s-tourism-potential">vast potential</a>, India has long been overlooked by the West, both <a href="https://nepalitimes.com/here-now/ukraine-crisis-hits-nepal-economy-hard">economically</a> and <a href="https://nepalitimes.com/news/the-geopolitics-of-nepal-s-politics">geopolitically</a>. But a fundamental global realignment is now underway. America’s ‘unipolar moment’ has given way to an era of great-power competition that, unlike during the Cold War, features demands by emerging and developing economies for a more <a href="https://nepalitimes.com/banner/making-nepal-accessible-to-all">inclusive </a>and representative multilateral system.&nbsp;
In this multipolar age, both the US and Europe see India, a neutral <a href="https://nepalitimes.com/editorial/no-binary-foreign-policy?fb_comment_id=3583384368393672_3586424038089705">foreign-policy </a>actor and dynamic<a href="https://archive.nepalitimes.com/news.php?id=18861"> emerging economy</a>, as vital to the future of their strategic priorities.&nbsp;
A founder of the Non-Aligned Movement, India has plenty of experience navigating precarious moments in <a href="https://archive.nepalitimes.com/news.php?id=4896">world affairs</a>. During the Cold War, it skillfully balanced its policies toward <a href="https://nepalitimes.com/here-now/america-nepal-and-the-royal-coup-qedzifz9">the US and the Soviet Union</a>.&nbsp;
When it engaged with <a href="https://nepalitimes.com/opinion/so-far-so-good/the-vagaries-of-fate">the Soviet Union</a>, from which it received considerable <a href="https://nepalitimes.com/banner/civil-military-synergy-in-disaster-management">military assistance</a>, it calibrated its approach to offset US support of Pakistan, without taking sides in the <a href="https://nepalitimes.com/opinion/the-rich-get-richer-and-more-powerful">great-power competition</a>.&nbsp;
India has since maintained this pragmatic balancing act, adapting its foreign policy to a shifting geopolitical landscape. Today, that means recognising its potential to shape global affairs, including by playing a leading role in building an efficient, realistic, and inclusive multilateralism.&nbsp;
This is reflected in Modi’s pursuit of a more assertive, internationalist foreign policy. Beyond building new partnerships and strengthening old ones, Modi has sought to increase <a href="https://nepalitimes.com/news/india-s-hindutva-politics-influencing-nepal">India’s influence </a>in traditional and emerging multilateral fora. In 2023 alone, India held the presidency of both the G20 and the Shanghai Cooperation Organisation (a Chinese creation, comprising nine Middle Eastern and Asian countries).&nbsp;
India plays a leading role in the BRICS, and is characteristically nuanced: whereas Russia and, to a significant extent, China see themselves as disruptors of the existing order, India views itself as a reformer. This enables it to maintain strategic flexibility as it advances its interests.&nbsp;
<a href="https://nepalitimes.com/news/india-china-rail-race">India’s relationship with China</a> is complicated by other factors. While the countries work together in some fora, they are also locked in protracted<a href="https://nepalitimes.com/news/india-bangladesh-border-talks-have-lessons-for-nepal"> territorial disputes</a> and a <a href="https://nepalitimes.com/news/the-race-for-shital-nibas">competition for leadership</a> in the so-called Global South.&nbsp;
India’s growing global clout, including its appeal to Western powers, stems in large part from its ability to act as a counterweight to China. It is indispensable to the Quad alliance with Australia, Japan, and the US, a grouping that is officially focused on <a href="https://nepalitimes.com/opinion/the-quad-maritime-security-and-climate-change">maritime security</a> and economic cooperation, though its members clearly seek to provide a buffer against China in the <a href="https://nepalitimes.com/editorial/between-two-oceans">Indo-Pacific region</a>. It is thanks to India that the Quad is not viewed as just another Western vehicle.&nbsp;
Modi has sought to bolster India’s Southern credentials, including by highlighting its status as the “mother of democracy”. By framing <a href="https://nepalitimes.com/news/is-democracy-too-expensive-for-nepal">democracy</a> as intrinsic to Indian civilisation, rather than a colonial legacy, he aligned India with ‘middle powers’ seeking to redefine global governance on their own terms.&nbsp;
To be sure, Modi has moved India away from the secular and pluralistic values that had flourished after <a href="https://nepalitimes.com/news/the-goal-is-empowerment-and-independence-of-women">independence</a>, in favour of assertive <a href="https://nepalitimes.com/news/unconventional-convention">Hindu nationalism</a>. So many international indices have downgraded India’s democratic status that he is now seeking to create his own.&nbsp;
Read also: <a href="https://nepalitimes.com/opinion/borderlines/demodification-of-india">Demodification of India</a>, Chandrakishore&nbsp;
Modi is the second leader of independent India (after Jawaharlal Nehru) to be elected to three consecutive terms, and remains a dominant force in <a href="https://nepalitimes.com/here-now/india-s-faith-in-politics">Indian politics</a>.&nbsp;
And at a time of <a href="https://nepalitimes.com/here-now/the-geopolitics-of-nepal-s-water-and-electricity">rapid geopolitical change</a>, he is committed to leveraging his position, and India’s profound strengths, to turn it into a global player. India has long had the potential to be an active shaper of international affairs. It has now arrived. &nbsp;&nbsp;© Project Syndicate
Ana Palacio, a former minister of foreign affairs of Spain and former senior vice president and general counsel of the World Bank Group, is a visiting lecturer at Georgetown University.

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India has arrived

Having recently overtaken its former colonial master to become the world's fifth-largest economy, India's star certainly appears to be rising. But if the country remains committed to the current government's development strategy, the economy could lose its momentum well before achieving escape velocity. There is a buzz in India today – a sense of limitless possibilities. If it maintains its current growth rate of 6-7% per year, it will soon overtake stagnant Japan and Germany to take over third place. But by 2050, India’s workforce will start shrinking, owing to demographic aging. Growth will slow. That means India has only a narrow window in which to grow rich before it grows old: with a per capita income of just $2,500, the economy must grow by 9% per year for the next quarter-century. That is an extremely difficult task, and the current election may well determine whether it remains possible at all. In pursuit of rapid growth, the Indian government intends to follow a tested road map: the same path that Japan took in the immediate postwar decades, and that China took after the death of Mao Zedong. During the first stage of the journey, labour flows out of the traditional agriculture sector as employment increases in low-skilled manufacturing – typically stitching garments or assembling components into electronic goods. This output is then exported to the developed world to capture the benefits of producing at scale. Cheap labour helps compensate for a country’s other deficiencies, such as excessive bureaucracy, unreliable power (especially electricity), or poor roads. As firms profit from exports, they invest in equipment to make workers more productive. As those workers are paid more, they can afford better schooling and health care for themselves and their children. Tax revenues also grow, providing the resources to upgrade the country’s infrastructure. The result is a virtuous cycle, because higher-skilled workers and better infrastructure enable firms to make more sophisticated, higher-value-added products. That is how China has moved from assembling components to producing world-leading electric vehicles in just four decades. Unfortunately, the same strategy is unlikely to work for India today. It is no accident that India failed to join China in shifting its economy to export-oriented manufacturing, even though the two countries were similarly poor in the late 1970s, when China started on that road. Even low-skilled factory employment requires a minimum level of education and skills. At the time, many Chinese workers met this standard, whereas most Indian workers did not. So, foreign employers found China and its cheap but capable workers more attractive. Moreover, China’s factory workers acquired skills on the job, and their education allowed them to pick up the basic accounting needed to launch their own small enterprises making products like screws and door handles. This explosion of smaller firms contributed immensely to Chinese growth. China had other advantages, too. Despite the outward perception of centralized rule by the Communist Party of China, provincial and municipal bosses have wielded a great deal of power. Mayors, hoping to be promoted for generating growth, helped local firms navigate the country’s otherwise-stifling regulations, overriding a rule here and overlooking one there in the name of getting results. By contrast, Indian bureaucracy in the same period was neither decentralized nor incentivized to promote growth, so it instead became an additional burden on Indian business. Finally, autocratic China could always favour manufacturing in ways that democratic India could not. For example, the Chinese government appropriated land for commercial purposes where necessary; pressured unions to limit wage demands even as labor productivity grew; paid depositors in state-owned banks minimal returns so that the funds could be lent out cheaply to firms; and kept the exchange rate undervalued to maintain local firms’ international competitiveness. In India, attempts to do any of the above would have met fierce democratic resistance. Nonetheless, the current Indian government wants to get on board the manufacturing bus. With many others looking to diversify away from producing in China, Indian economic policymakers see an opportunity to make up for lost time. Moreover, Indian infrastructure has improved markedly. The country now boasts many world-class airports and ports, increased renewables capacity to bridge power deficits, and an excellent highway system. But other impediments remain. Over the decade that the Modi administration has been in office, India’s garment exports have grown by less than 5%, while Bangladeshi and Vietnamese garment exports have grown by over 70%, such that their exports are now multiples of India’s. Recognising these continuing impediments, the Indian government has begun offering subsidies to incentivizse production in India, as well as raising tariffs on imports (like cell phones) to enhance these manufacturers’ profits from selling into the now-protected large Indian market. While it is still early days, one should be skeptical of this strategy. Production-linked subsidies might induce manufacturers to assemble in India, but those firms still will need to import most components. Moreover, margins will be small, because Indian workers now compete with modestly paid Bangladeshi and Vietnamese workers, not with well-paid workers in industrialised countries, as in the past. With little profit for firms to reinvest, and with less tax revenue, net of the subsidy, the virtuous circles needed to move India up the value chain will be much harder to achieve. Worse, even if the Indian government were to scale up manufacturing, the world is not ready for another China-size exporting powerhouse. Given the widespread shift toward manufacturing protectionism and growing concerns about environmental sustainability, the government’s emphasis on Chinese-style manufacturing-led development seems incompatible with where the world is headed. There is another way. To drive growth, India could focus on the export of services provided by its well-educated and skilled population. Though this cohort represents a small fraction of the total population, it still numbers in the tens of millions. Such a strategy would build on India’s strengths. The country is already well known for its role in the global software industry, and now it exports many other services, too, accounting for over 5% of the world’s services exports while its goods exports account for less than 2%.  <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240522100548_e66e90e780530fb61ba64b94b710c325f0c272e10736fca0d0b3724219edba68.jpg" data-media-id="editor_0" data-image-id="20240522100548_e66e90e780530fb61ba64b94b710c325f0c272e10736fca0d0b3724219edba68" data-rendition-name="original" width="2480" height="1529" loading="lazy" alt="Indian elections Modi rally in Bihar"><figcaption>Photo: BIKAS RAUNIAR(Photo: Bikas_Rauniar)(c)BR</figcaption></figure>  Multinational firms from Goldman Sachs to Rolls-Royce are hiring talented Indian graduates into India-based global capability centres (GCCs), where engineers, architects, consultants, and lawyers create designs, contracts, and content (and software) that are embedded in manufactured goods and services sold globally. These centres already account for over 50% of all GCCs globally, employing 1.66 million Indians and generating $46 billion in annual revenues as of March 2023. Following the pandemic-induced changes in work habits, and given improvements in communications technology, Indians also have started providing a much wider range of remote services, including consulting, telemedicine, and even yoga instruction. Once a service goes virtual, it matters little whether the provider is ten miles or 10,000 miles away. An Indian consultant in Hyderabad can now make a presentation to a client in Seattle on behalf of a team whose members span almost every continent. She not only is well trained and fluent in English, she also costs one-fourth of her US counterpart. True, Indian manufacturing has also benefited from these changes, but this has happened in precisely those areas where engineering, innovation, and design matter more than just the manufacturing process itself. Hence, Agnikul, a Chennai-based firm working to launch small satellites into space, has dispensed entirely with manufacturing supply chains by 3D printing its customised rockets in its own facility. Tilfi, which sells authentic hand-woven Banarasi silk sarees globally through its website, employs trained designers to create fresh fashions for traditional craftsmen, who in turn are encouraged to embrace innovation. It would seem to be a no-brainer that India should build on its strength: millions of high-skilled, creative, educated workers, many of whom speak English. Unfortunately, it’s running out of such workers. While India graduates 1.5 million engineers per year, only a minority attend institutions that impart the high-quality education that is in demand at a GCC or a company like Agnikul. Wheebox, a work-skill assessment company, estimates that half of all graduates are unemployable. Some of these graduates need only a little remedial education to be brought up to speed. But for many Indians, the educational deficiencies run much deeper. While nearly all Indian children start school, fewer than one-quarter can read at a second-grade level by the time they reach third grade. The further behind the stragglers fall, the less sense it makes to stay in school. Many ultimately drop out, incapable of anything but unskilled work. No wonder the share of workers in agriculture is growing in India today, contrary to the usual path for fast-growing countries. India faces a crisis of joblessness today. So, apart from expanding the creative high-skilled sector, India must create jobs that are broadly targeted at the skills people have. It also needs to improve education and skills, both in the short term and over the long term, so that Indian workers can do the jobs of the future. Sensible reforms would recognize that the solutions to both challenges are related. For example, a study shows that if a government-run daycare employs a part-time worker – perhaps a high-school-educated mother – children’s learning improves significantly. With more than one million such daycares in India today, that is potentially one million more workers set on the road to longer-term employability. Similarly, public funding for vocational and apprenticeship programs that allow students to cross the threshold of employability could convert millions into productive workers. There is no shortage of demand for health-care providers, plumbers, carpenters, and electricians. One can find these kinds of proposals in opposition party manifestos. When coupled with reforms to support businesses – especially small- and medium-size firms in labor-intensive sectors like garments, hospitality, and tourism – India could put many more people to work. But this will require carefully designed programs, funded in part by reallocating the tens of billions of dollars now being promised as subsidies to large manufacturers. In the longer run, there is no alternative to increasing the number and quality of childcare, education, and health-care institutions to capitalize on India’s greatest asset: its people. The currently low level of public spending in these areas should be seen as an opportunity, because it means that there is plenty of room to grow. India also can draw on its vast diaspora to seed some of the new higher education and research institutions it must create to expand the numbers of the highly skilled. When people have the right skills, and engage with idea-producing institutions, entrepreneurship will create jobs in the most unlikely of places. It wasn’t the government, after all, that created India’s software industry. Could growing protectionism impede this path? Not necessarily, because high-end services exports are hard to stop at the border if delivered virtually. Moreover, industrialized countries also sell such services globally (think of US management consultants and venture capitalists), which may mean that protectionism in these sectors will be less attractive. And, given their aging populations, industrialized countries have much to gain from India-provided services like telemedicine, since these will reduce the need to attract and assimilate foreign doctors and nurses. Finally, it is in the rest of the world’s interest if India eschews the Chinese path. If India grows richer faster, it will be able to buy much more from others, and if it grows primarily by producing high-value-added services, this will mitigate the impact on the climate. There is indeed a way for India to grow rich before it grows old. But it will not be easy, and it will require a change in vision at the top. That, ultimately, is what the ongoing election is about. © Project Syndicate Raghuram G Rajan, a former governor of the Reserve Bank of India and chief economist of the International Monetary Fund, is Professor of Finance at the University of Chicago Booth School of Business and the co-author (with Rohit Lamba) of Breaking the Mold: India’s Untraveled Path to Prosperity (Princeton University Press, May 2024).

India’s election and its economic future

China’s sharp economic slowdown has raised alarm bells around the world. But it has also thrown into relief the rise of another demographic powerhouse next door.&nbsp; The Indian economy grew at an impressive <a href="https://www.reuters.com/world/india/indias-economic-growth-set-accelerate-its-fastest-year-2023-08-31/">7.8% annual rate</a> in the second quarter of 2023, and the country recently reached an important milestone by becoming the first to <a href="https://www.nytimes.com/2023/08/23/science/chandrayaan-3-india-moon-landing.html">land a spacecraft</a> on the Moon’s potentially water-rich south pole. India’s ascent, unlike China’s, has not been accompanied by an increasingly assertive foreign policy. As India’s geopolitical, economic, and cultural clout grows, so does its global footprint. China’s ‘<a href="https://www.nytimes.com/2023/08/29/opinion/china-economy-decline.html">decline</a>’, as some have begun to call the conclusion of the country’s four-decade-long economic boom, opens new opportunities for the Indian economy and other developing and emerging countries. Earlier this year, India reached another milestone when its population officially <a href="https://www.un.org/development/desa/dpad/publication/un-desa-policy-brief-no-153-india-overtakes-china-as-the-worlds-most-populous-country/">surpassed that of China</a>, which had been the world’s most populous country for <a href="https://www.nytimes.com/2023/04/19/world/asia/india-china-population.html">more than 300 years</a>. While China’s shrinking, <a href="https://www.scmp.com/economy/economic-indicators/article/3207047/china-population-2022-marks-first-population-decline-60-years">rapidly aging</a> population is likely to impede economic growth and may curtail its geopolitical ambitions, India – one of the world’s <a href="https://indbiz.gov.in/one-of-the-youngest-populations-in-the-world-indias-most-valuable-asset/">youngest</a> countries, with a <a href="https://www.worldometers.info/world-population/india-population/#:~:text=The%20population%20density%20in%20India,1%2C202%20people%20per%20mi2).&amp;text=The%20median%20age%20in%20India%20is%2028.4%20years.">median age of 28.2</a> – is poised to reap a huge demographic dividend. But the driving force behind India’s emergence as a major global power is its rapid economic growth. While India’s GDP is still smaller than China’s, the country is currently the world’s <a href="https://www.imf.org/en/Publications/WEO/Issues/2023/07/10/world-economic-outlook-update-july-2023">fastest-growing</a> major economy and is projected to account for <a href="https://t.co/SMFH21oTa0">12.9% of global growth</a> over the next five years, surpassing the United States’ 11.3% share.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231029081036_781e265ec0c9f72b3c2596697419554293b721f2c4e8c93b963d66e35f4aa3c1.jpg" data-media-id="editor_10" data-image-id="20231029081036_781e265ec0c9f72b3c2596697419554293b721f2c4e8c93b963d66e35f4aa3c1" data-rendition-name="original" width="696" height="477" loading="lazy" alt="India China graph NT"> </figure>  In addition to fueling a consumption boom, India’s youthful population is also driving innovation, as evidenced by the country’s world-class information economy and its recent moon landing, which the country managed to achieve despite a national space budget equivalent to <a href="https://www.wsj.com/world/asia/india-races-russia-to-be-first-to-land-on-moons-south-pole-ad5d9d05">roughly 6%</a> of what the US spends on space missions. Having already surpassed the United Kingdom, its former colonial ruler, India’s GDP is poised to <a href="https://www.cnbc.com/2022/12/01/india-to-leapfrog-to-third-largest-economy-by-2030.html">overtake</a> that of Japan and Germany to become the world’s third-largest economy by 2030, behind the US and China. Given its increasingly unstable neighborhood, it should come as no surprise that India has the world’s <a href="https://www.sipri.org/media/press-release/2022/world-military-expenditure-passes-2-trillion-first-time">third-largest</a> defense budget. The deepening <a href="https://asia.nikkei.com/Opinion/Pakistan-China-and-terrorism">strategic alliance</a> between China and Pakistan underscores India’s precarious position as the only country bordering two nuclear-armed <a href="https://www.project-syndicate.org/commentary/pakistan-becoming-chinese-client-state-by-brahma-chellaney-2016-05?">revisionist states</a> with expansionist ambitions. Moreover, for the past three years, India has been locked in a tense <a href="https://www.project-syndicate.org/commentary/china-cannot-win-india-himalayan-border-dispute-by-brahma-chellaney-2023-04">military standoff</a> with China along its Himalayan border. Bilateral relations, marked by <a href="https://www.washingtonpost.com/world/2022/12/12/india-china-arunachal-border/">intermittent clashes</a> in the disputed Tibet-Ladakh border region, are at their lowest point in decades. By confronting China despite the risk of a full-scale war, India has challenged Chinese power in a way no other country has done in this century. But despite leaning toward forging closer ties with the West, India remains hesitant to enter into formal military alliances with Western countries. Western powers are partly to blame. US President <a href="https://www.project-syndicate.org/columnist/joseph-biden-jr">Joe Biden</a>’s reluctance to comment on the Sino-Indian military standoff, let alone openly support India, has sent a clear signal that India is responsible for its own defense. Given that the country’s future growth hinges on its ability to defend itself against external threats, India will likely step up its efforts to modernize its conventional armed forces and enhance its nuclear deterrence. The escalating geopolitical rivalry between China and India could also impede efforts to unite the Global South and transform the BRICS group into a credible alternative to the G20 and G7. The BRICS countries (Brazil, Russia, India, China, and South Africa) recently agreed to expand the group by adding <a href="https://www.thepresidency.gov.za/content/xv-brics-summit-johannesburg-ii-declaration-24-august-2023">six new members</a>: Saudi Arabia, the United Arab Emirates, Egypt, Ethiopia, Argentina, and Iran. Given the 11 members’ divergent interests, BRICS+ will likely find it even harder to reach consensus on any major issue.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231029081040_43ee34df0da045fc9466deb8642e67e778412c7494d5aa1275da28fc08e002e9.jpg" data-media-id="editor_20" data-image-id="20231029081040_43ee34df0da045fc9466deb8642e67e778412c7494d5aa1275da28fc08e002e9" data-rendition-name="original" width="599" height="402" loading="lazy" alt="India China NT 2"> </figure>  Meanwhile, China’s economic slump could prompt President Xi Jinping to double down on his expansionist agenda. Biden recently <a href="https://www.nytimes.com/2023/08/11/us/politics/biden-china-criticism-economy.html">characterized</a> the stagnating Chinese economy as a “ticking time bomb,” warning that, “When bad folks have problems, they do bad things.” China’s controversial <a href="https://twitter.com/globaltimesnews/status/1696104724691570945">new national map</a>, which depicts vast areas of India, Malaysia, the Philippines, Vietnam, Taiwan, and Bhutan (and even a bit of Russia) as Chinese territory, underscores the threat posed by China’s increasingly aggressive behavior. In addition to these external threats, India’s future will be shaped by its response to domestic economic challenges. Prime Minister Narendra Modi has made <a href="https://www.nytimes.com/2014/10/12/world/asia/in-india-government-tracks-its-own.html">great strides</a> in modernizing the notoriously outdated Indian bureaucracy and promoting e-government to reduce red tape and attract foreign direct investment. His government has invested heavily in upgrading and expanding the country’s infrastructure, implemented regulatory reforms, and sought to boost domestic manufacturing through Modi’s <a href="https://mea.gov.in/Images/attach/Make_in_India_Initiative.pdf">“Make in India” initiative</a>. But to transform itself into a global manufacturing hub, India must invest in human capital, particularly in <a href="https://www.imf.org/en/News/Articles/2015/09/28/04/53/sp012202">education and training</a>. Moreover, India’s size and diversity also pose enormous challenges. India may be the first developing economy that, from the beginning, has pursued modernization and prosperity through a democratic system. But as one of the world’s most culturally diverse countries, its seemingly never-ending election cycle has often fueled division and polarization. But, despite its <a href="https://www.washingtonpost.com/world/asia_pacific/divided-families-and-tense-silences-us-style-polarization-arrives-in-india/2019/05/18/734bfdc6-5bb3-11e9-98d4-844088d135f2_story.html">US-style polarized politics</a>, India’s democratic framework has served as a pillar of stability. By fostering open expression and dialogue, the Indian political system has empowered grassroots communities and individuals, enabling members of historically marginalized classes and castes to rise to the highest levels of policymaking. Whether India can maintain its current upward trajectory will depend on its ability to maintain political stability, rapid economic growth, domestic and external security, and a forward-looking foreign policy. Success would enhance India’s <a href="https://www.project-syndicate.org/commentary/india-us-china-balance-of-power-without-formal-alliance-by-joseph-s-nye-2023-06">global standing</a> and help advance <a href="https://www.wsj.com/articles/can-india-emerge-as-a-rival-to-china-manufacturing-population-it-investment-trade-youth-regulatory-reform-11673895652?mod=opinion_featst_pos2">US interests</a> in the Indo-Pacific, the world’s new geopolitical fulcrum and home to its fastest-growing economies.&nbsp; © Project Syndicate Brahma Chellaney is Professor of Strategic Studies at the Center for Policy Research, New Delhi and Fellow at the Robert Bosch Academy in Berlin. His book <a href="https://press.georgetown.edu/Book/Water">Water: Asia’s New Battleground</a> (Georgetown University Press, 2011) for which he won the 2012 <a href="https://asiasociety.org/media/press-releases/brahma-chellaney%E2%80%99s-water-asia%E2%80%99s-new-battleground-wins-2012-asia-society-bernard">Asia Society Bernard Schwartz Book Award</a>.

India’s quiet rise

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Galaxy A series

Know your Ministers

‘One early morning, we heard the ambassador’s wife cry out, “Ram, Ram, Ram!” A disaster has befallen Nepal!” She had heard on the radio that a fire had consumed Singha Durbar." This is not about the arson attack on 9 September 2025, but the one on 8 July, 1973. It started in the South Wing of the then single-largest building in all of Nepal. It took two days to bring the blaze under control, requiring the use of explosives to demolish one wing to protect the imposing western facade. As Bhekh Bahadur Thapa recalls in the English translation of his memoir A Life in Public Service: Nepal from Autocracy to Democracy, he was then on leave from the Nepal government serving with the IDRC in Ottawa.&nbsp; He had already served as Nepal’s Finance Secretary at age 25, went on to be Finance Minister and Governor of Nepal Rastra Bank. He was already younger than some of the GenZ ministers in Nepal’s present RSP government. Thapa, now 89, was at the launch of the book in February which was attended by former diplomats and bureaucrats. After speeches by panelists, there was a question from the audience about how Thapa had managed to be the diplomat he was, managing Nepal’s international relations on the world stage.&nbsp; Writer and journalist Akhilesh Upadhyay, who was moderating the panel, responded by going into the section of the book where we see Thapa as an ambassador to the US, playing tennis with White House officials, cultivating a network of contacts to project the identity and welfare of Nepal, and making it possible for a state visit by King Birendra to Ronald Reagan’s America. The book is full of anecdotes that suggest Thapa was a clever and strategic diplomat, always calm and unruffled, easily making friends in high places with his maturity and engaging sense of humour. Thapa’s memoir is heavy on details about Nepal’s administrative history during the years he was active in public service, serving as minister and ambassador under three kings: Mahendra, Birendra and Gyanendra, and alongside five prime ministers.&nbsp; Aside from an insider look on how certain treaties, development deals and research projects in Nepal came into fruition, Thapa goes into great detail about his personal and professional relationships with the kings, ministers, ambassadors, foreign leaders and politicians.&nbsp; As a reader, one is struck by the level of detail around the events that unfolded in Nepal over the years during Thapa’s tenure. Was Thapa recording a journal over the years of the events and the conversations that transpired, or were they committed to his phenomenal memory? Either way, the reader gets a glimpse of Nepal’s recent history from the early days of the Panchayat, through the People’s Movement and the democracy period, the Maoist insurgency, Royal Palace massacre of 2001, and Gyanendra’s coup of 2005.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2026041204048_125dc8ae300a1e33124f394abe724d42727f83e067b0201d2008b58d60c459a4.jpg" data-media-id="editor_0" data-image-id="2026041204048_125dc8ae300a1e33124f394abe724d42727f83e067b0201d2008b58d60c459a4" data-rendition-name="original" width="1584" height="1000" loading="lazy" alt="How to win friends and influence nations NT"> </figure>  Not enough is said about the political parties of the time whose presence led to the way Nepal’s multiparty democracy came to be shaped. The book keeps its focus on the administration and the key figures around it, mostly those in the Panchayat era. Towards the second half of the book, we do start to hear about political parties, but not in great depth. Another figure whose presence in the book is conspicuously less prominent is that of his wife, Rita Thapa — the person who seems to have rescued him every time financial quandary or family care became a challenge. Yet, we do not see her as a full person. Perhaps because of the personal tragedies in his life, the children are also barely mentioned.&nbsp; The book is therefore less personal and more technical. Throughout, we learn about Thapa’s thinking as he navigated the world of diplomacy to win him the trust of those who mattered. There are tips here for a new generation of Nepali officials and diplomats about how much commitment and focus is needed to be good at one’s job and serve the national interest. This book adds to tomes that have been written on Nepal’s fragile relationship with India. ‘India has always wished for Nepal to remain dependent on it,’ writes Thapa, who served as Nepal’s ambassador to India and later in the Eminent Persons Group &nbsp;on Indo-Nepal relations that has been allowed to languish. The book has several insights into the Indo-Nepal trysts with diplomacy and agency.&nbsp; China’s role is also recorded, viewed through conversations during a visit to Beijing, but all that was before Nepal’s neighbour to the north emerged as a world economic and military power. The book also has such sudden instances of quirkiness and humour. For instance, we see a young Thapa in America explaining to a government official why he would like to return to Nepal instead of settling down in the US. “Because, Nepal is beautiful,” he said. The text is immaculate and does not read much like a translation, credit for which clearly goes to the team that put the edition together: translator Prawin Adhikari, &nbsp;Anagha Neelakanthan and Bhekh Thapa’s daughter, Manjushree. As Nepal enters a new era of governance and diplomacy, A Life in Public Service: Nepal from Autocracy to Democracy should be essential reading for students of political science, economics and foreign affairs who can gain a fresh perspective on the country’s trajectory.&nbsp; There are dozens of forgotten state secrets recorded in the book, but the reader must also remember this is a story told from one person’s perspective and there may be others.&nbsp; So, what really made Thapa the diplomat he was? I met him in 2004 at the Kantipur TV studio when he was serving as king Gyanendra’s foreign minister. He was there for a studio interview, and I was just done with my English newscast.&nbsp; He surprised me at the door: “Pratibha! I’ve been reading your articles in The Kathmandu Post. You must keep writing.” I thanked him, glad to have been noticed for my work by a stranger. That was perhaps one of the things that set Thapa apart — he excelled at staying close to those in power, while also noticing those who were not.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260412040412_213e706136a038ec9f5e2b8c6d7f7c1e9ceed9479e22fe2884872ad7bd20955f.jpg" data-media-id="editor_1" data-image-id="20260412040412_213e706136a038ec9f5e2b8c6d7f7c1e9ceed9479e22fe2884872ad7bd20955f" data-rendition-name="original" width="1136" height="702" loading="lazy" alt="Book details"> </figure>

How to win friends and influence nations

Prime Minister Balendra Shah on Wednesday broke tradition and met with 17 foreign envoys collectively, a move that was a notable departure from how his predecessors operated.&nbsp;
Shah had already set himself apart by talking less, listening more, and delegating to trusted friends. But by meeting all ambassadors at one go in the presence of the Foreign Ministry, he signalled a paradigm shift in how he wants Nepal to be seen: no longer just balancing India and China, but as a country confident about its <a href="https://nepalitimes.com/opinion/guest-editorial/tripolar-contestation-over-nepal">strategic importance and place in the world</a>.
In just two weeks, the <a href="https://nepalitimes.com/news/rsp-dos-and-don-ts">RSP has sprung into action </a>on multiple fronts to implement its ambitious 100-point, 100-days action plan. It has taken short-term measures to mitigate the impact of the Gulf war, as well as medium- and long- term measures to streamline the bureaucracy. A few high-profile figures have been made examples of to drive the message home.
Earlier this week, the government recalled six politically appointed ambassadors, the most notable being long-serving Shankar Sharma from New Delhi. The Kathmandu District Court issued arrest warrants against former prime minister Sher Bahadur Deuba and his former foreign minister wife Arzu Rana on charges of money laundering and corruption.
Each ministry has been trying to clean up the accumulated rot from the past three decades: regulatory overhaul of microfinance, education, health and service delivery.&nbsp;
These actions widely disseminated campaign-style on YouTube and TikTok have made most Nepalis hopeful that the party they installed in power means business.
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BACKLASH
But such attempts to overhaul a long-entrenched political culture were bound to face backlash. In their impatience and enthusiasm to get things done, some of Prime Minister Shah’s ministers have over-reached.
It was common knowledge that government-paid advertising in the mainstream press was kickback-driven, but the PMO’s directive that official notices be published or broadcast only on state-run media has been denounced — especially as the media industry struggles to stay afloat.
More serious are some recent appointments by ministers of relatives and figures closely associated with the RSP to key positions. This has rankled because this party built its political plank on ending nepotism and graft.&nbsp;
News that Home Minister Sudan Gurung allegedly had not paid rent on leased land, which illegally encroached on the lake in Pokhara did not help. &nbsp;
Prime Minister Shah himself has come under scrutiny for appointing a kitchen cabinet full of male buddies from his time as Kathmandu mayor. To douse criticism he brought in as adviser investigative journalist Deepa Dahal, who has exposed corruption in high places of the previous coalitions.&nbsp;
Shah’s appointment of another political adviser Asim Shah to the head Constitution Amendment Task Force, is also seen as problematic. He is a filmmaker and former lawmaker, but does not have a background in constitutional law.&nbsp;
Even more controversial is the Cabinet’s decision to appoint RSP Chair Rabi Lamichhane’s legal counsel, Narayan Kandel, as Attorney General. Kandel used to be a UK permanent resident, and does not have as much experience practicing law in Nepal.&nbsp;
Kandel’s appointment drew flak and raised eyebrows, and with the pending legal cases against Lamichhane this appointment represents a flagrant conflict of interest.
Health Minister Nisha Mehta was also accused of favouritism after reappointing Junu Shrestha, wife of Labour Minister Dipak Kumar Shah, as member of the Health Insurance Board which had earlier suspended her. The Labour Minister’s rambling rant at the Board’s meeting on Tuesday has not helped the RSP’s image.&nbsp;
(UPDATE: On Thursday, Prime Minister Shah sacked the Labour Minister after the RSP found him in breach of the party's code of conduct and discipline. He served 14 days in the Cabinet, one of the shortest tenures for a minister in Nepal )
It is hard to know what <a href="https://nepalitimes.com/news/ball-in-balen-s-court">Balendra Shah is thinking</a>, and how Rabi Lamichhane is going to justify some of these moves. After all, making politics, governance, and bureaucracy a meritocracy has been the core tenet of the RSP, and it risks alienating its mainly youth base if these missteps persist.
But at least for now, most RSP supporters seem to be giving the party the benefit of doubt.