Do you agree with the view that the Indian Foreign Policy is increasingly being shaped by the Neoliberal outlook? Elaborate.

Do you agree with the view that the Indian Foreign Policy is increasingly being shaped by the Neoliberal outlook? Elaborate. (2018, 10 Marks)

Kanti Bajpai (“Indian Strategic Culture”, 2002) identifies a neoliberal school beside the Nehruvian and hyperrealist ones: open markets generate growth, a strong economy is the base of military and diplomatic power, and trade yields mutual absolute gains even when partners gain unequally. As a determinant, this outlook has grown steadily since 1991; whether it governs policy is less certain.

Evidence that the outlook is shaping policy

  • The 1991 hinge: the balance-of-payments crisis made capital, markets and technology diplomatic objectives. Manmohan Singh told India’s ambassadors (November 2013) that foreign policy must create a global environment conducive to India’s well-being, its relations increasingly shaped by our developmental priorities.
  • The scholarly reading: C. Raja Mohan (Crossing the Rubicon, 2003) saw the post-1991 turn as a move from Third World solidarity to national interest, with economic engagement at its centre; Sanjaya Baru (Strategic Consequences of India’s Economic Performance, 2006) argued that India’s global standing rests on sustained growth.
  • Economy-centred forums: the G20 presidency (2023); the BRICS New Delhi Declaration (September 2026) on local-currency settlement and IMF, World Bank and WTO reform.
  • Connectivity: the International North–South Transport Corridor westward; Act East land and sea links to ASEAN.
  • Partners chosen for capital and technology: the 15th India–Japan summit (August 2025) set a ¥10 trillion private-investment target with an Economic Security Initiative.
  • The FTA wave: EFTA’s TEPA (in force October 2025), the UK CETA (in force July 2026), the EU agreement concluded in January 2026.

Why the label overstates the case

  • Protection persists: India left RCEP in 2019, S. Jaishankar warning against globalization without a cost-benefit analysis; agriculture and dairy stayed shielded in the February 2026 US understanding that cut India’s tariff to 18%.
  • Relative gains matter: Joseph M. Grieco’s realist objection to Robert O. Keohane’s neoliberal institutionalism fits India’s China policy. With a deficit of about $112 billion (2025–26), New Delhi screens Chinese investment.
  • Coercion, not interdependence: US tariffs of 50% (2025) and the Sanctioning Russia and Iran Act (September 2026) turned trade into leverage.
  • Hyperrealist reflexes: Operation Sindoor (May 2025) follows Bajpai’s hyperrealist school.
  • Nehruvian purpose: strategic autonomy and the Voice of the Global South summits keep a solidarity agenda alive.

Conclusion

I agree in part. Economic interest is now the strongest single determinant of Indian behaviour. But the outlook is economic nationalism through open-economy instruments, not doctrinal neoliberalism: the market serves national capability and is set aside when it threatens a protected constituency or a security interest.