Does India’s rise as a major market power in a globalised world mean that it is no longer concerned with the ‘new international economic order’ that it once championed? Discuss. (2008, 60 Marks)
India helped write the New International Economic Order (NIEO). It signed the G-77’s founding declaration in 1964, hosted UNCTAD II in 1968 and helped shape the non-aligned economic agenda at Algiers in 1973. After the 1991 reforms it became a G20 economy, a lender to the IMF and a sought-after market. Its concern with the NIEO has not ended, but its demand has changed: from redistribution to representation.
The argument for abandonment
- Liberalisation under IMF conditionality in 1991 was exactly the individual supplication the NIEO was meant to prevent. India then joined the WTO and accepted product patents under TRIPS.
- Courting capital: India now competes for the foreign investment that the Foreign Exchange Regulation Act of 1973 once kept out.
- Bilateral trade deals replace the universal forums India once favoured: agreements with the UAE and Australia (2022), the EFTA pact in force since October 2025, the UK agreement in force since July 2026 and the EU negotiations concluded in January 2026.
- A donor in all but name: credit lines and grants reach over sixty countries.
- Exclusive clubs: the G20 and the Quad sit uneasily with the NIEO’s one-country-one-vote ethos, and India’s farm interests put it at odds with Brazil at the WTO (the sugar dispute, DS579).
The argument for continuity
- Voice in the Bretton Woods institutions: India’s 2.75% IMF quota is well below its share of world output. Having bought IMF notes since 2009, it now asks for votes rather than money.
- Policy space: India defends public stockholding and special and differential treatment, continuing GATT Part IV and the 1979 Enabling Clause. At Yaoundé (March 2026) it joined South Africa in keeping the investment-facilitation plurilateral out of the WTO rulebook.
- Technology: the line runs from the Patents Act of 1970 to Section 3(d) and the 2020 TRIPS waiver proposal with South Africa.
- Climate: common but differentiated responsibilities, the NIEO’s most successful descendant.
- Southern institutions with capital: the New Development Bank, a founding stake in the AIIB, and a 2026 BRICS chairmanship whose New Delhi Declaration demanded IMF, World Bank and WTO reform and criticised unilateral tariffs.
- Convening: three Voice of the Global South Summits and the African Union’s G20 seat (2023), won on India’s proposal.
Reading the shift
- Neo-realists expect a rising power to seek status inside the order rather than overturn it. Constructivists point to an identity India keeps reproducing, as in the G20 motto “One Earth, One Family, One Future”.
- Amrita Narlikar (International Affairs, 2006) showed that India’s hard bargaining at the WTO is strategic calculation by a rising power, not an inherited Third Worldist reflex.
- S. Jaishankar’s The India Way (2020) treats a multipolar, uncertain world as an opportunity to pursue national interest through many simultaneous engagements, not ideological camps.
- The critical charge is serious: reformed institutions would seat India but do little for the least developed states, whose interests the “Global South” label often hides.
The test of 2025–26
Washington’s 50% tariff from August 2025, cut to 18% under the February 2026 interim understanding, showed that market size does not buy immunity from unilateralism. India answered with diversification and a stronger defence of multilateral rules, not with a retreat from them.
Conclusion
Market power has changed the method, not the commitment. India has given up the half of the 1974 programme it could never enforce, mass transfers and commodity cartels, and kept the half it now can: voice, policy space and access to technology. That is a rebalanced order pursued from inside the system, and its test is whether India’s gains also widen space for the weaker South.