Keeping India at ‘Yes’

A clearer vision of India’s place as a leader has helped to move India towards climate action, argues Mihir S Sharma. Keeping it there will require the West to mobilise private capital for developing economies

By Mihir S Sharma

April 13, 2021

In 2015, Subrahmanyam Jaishankar – who was then India’s chief diplomat, but is today foreign minister – delivered a speech that contained perhaps the most important and succinct formulation of India’s foreign policy aims under Prime Minister Narendra Modi. India, he said, was transitioning from being a “balancing power” to a “leading power”.[i] If, in the past, a non-aligned India sought to maintain the balance in a multi-polar world, under Modi it would seek to shift orientation to become one of those poles. To what degree this transition is fact and what aspiration is unclear. It is perhaps a little of both; in New Delhi today, the line between aspiration and reality is not as clear as one could wish.

Yet what is certainly true is that Jaishankar’s formulation provides us with a very useful structure within which to try and understand India’s approach to geopolitics. In some sense, India’s position in the world has always led it towards an uneasy balance. Must it define itself as an emerging economy? A poorer country? A liberal democracy? A continental or a maritime power? Pro- or anti-trade? In the past, both Indian rhetoric and actual positions typically attempted to lay claim to all these identities; whatever consensus position emerged was either incoherent or just plain wrong. Partly as a consequence, the country in the past generally failed to take a leadership position in any grouping of countries with similar identities. The Jaishankar-Modi formula seeks to push back against this.

No global issue reveals the multiple forces pushing India in multiple directions, or Modi’s new approach, as much as climate change. In 2009, Indian intransigence was one of the most crucial – if not the most crucial – reason for the failure of the Copenhagen climate summit. Less than a decade later, Modi’s assent helped put the Paris Agreement over the top. In the years since, India has become something of a climate leader, particularly in terms of its ambitious rollout of renewable energy generation capacity. Getting India to “yes” – to climate agreements, closer military partnerships, and so on – was a long effort. What can be done to keep India there?

The fact remains that, even on climate change, India straddles multiple fault lines somewhat uncomfortably. On the one hand, it will be deeply affected by global warming and weirder weather; one 2020 study, published in Nature, predicted that heat stress alone would reduce Indian productivity by 30 to 40 per cent by the end of the century.[ii] On the other hand, it is dealing with a youth unemployment crisis – one oft-cited number is that a million young people join the workforce every month. There are jobs for very few of them already, and even fewer will be available if carbon-heavy growth such as that experienced by the People’s Republic of China over the past two decades is ruled out for environmental reasons. As a developing country, it feels the need to emphasise the importance of common but differentiated responsibilities for climate change. But, as a large and influential economy, it recognises that its own unilateral action on de-carbonisation will have a tangible impact beyond its borders. In other words, India might be the greatest victim of climate change, as well as the greatest victim of de-carbonisation; it is a developing country that is seeking to behave like a developed one.

What, therefore, has tipped the Indian establishment under Modi into making climate change one of the pillars of its foreign policy outreach? This is where the “leading power” aspiration comes in. Essentially, the lure of leadership in this domain was powerful enough for the ponderous battleship of Indian diplomacy to turn 180 degrees, an event which is both awe-inspiring and rare. This is one of the few domains where the Indian political establishment’s need to play a commanding role on the world stage can be satisfied. Previous Indian governments and political leaders had a substantially different political calculus: they considered that their domestic and electoral rewards would come from demonstrating steely resolve through blocking or vetoing global agreements, on climate change or trade, that only imperfectly served India’s national interest. For the current leadership, however, the payoffs are different: there are political returns to India being seen as providing strong and determined global leadership. Through this leadership, the desired political image of the prime minister himself is reflected.

It follows that for this new orientation towards climate action in foreign policy to be sustained over time it is essential that India’s action be acknowledged – indeed, be recognised as leadership. What would be disastrous, for example, is what former U.S. President Donald Trump did: single out India and China as not taking sufficient action on emissions control, as reason for America’s own back-sliding on the subject.[iii] 

Such messaging about India and China would be problematic not just because it would be untrue, or because it would reduce the political “leadership dividend” for the Indian political class. It would also be extremely poorly received in New Delhi because both policy makers and electorate would resent bracketing India with China. This is the context in which to judge how self-defeating it is, for example, to push India to better China’s “net zero” target. From the Indian point of view, India and China are not comparable in terms of climate ambition, achievements, or even programmes.

New Delhi’s policy makers are aware that de-carbonisation would mean denying to India the extractive and resource-intensive route to prosperity taken by China, which is as much richer than India than the U.S, is richer than China in turn. Attempts to claim that India should match or exceed China’s ambitions on climate change would be viewed as insulting. The Indian establishment considers that the world’s manufacturing superpower must act to make deep cuts the way any developed economy would – even if it cannot be trusted on its carbon accounting any more than it can be on its economic statistics.

A related question for New Delhi is whether the current U.S. administration and Beijing could come to a rapprochement over climate change – and the degree to which that would involve compromises made by Washington to Beijing on other issues. While India signed up to the Paris Agreement, policy makers are still angry that they were pressured into concord with a bargain drawn up by the American and Chinese presidents as an unofficial global duumvirate. Any sign that this is recurring on climate change under President Biden would be disastrous. If the notion takes hold that the West is arguing in New Delhi for an agenda that it has quietly decided on with China, and which India must sign up to, then India could well be pushed not just off its climate path but back towards a long-term distrust of Western intentions. The dangers of allowing climate to be turned consciously or unconsciously into a geopolitical wedge between India and the West should be obvious.

In other words, if you need India’s cooperation on climate – and you do – you will need India’s requirements to be central to working out the next compromise. That is realistic, given that perhaps one-third of new emissions in the coming decades will be from India under a business-as-usual scenario. That is moral, given the energy-poverty of India’s vast population. And it is pragmatic, given that the costs of creating a consensus on climate change without India would be felt in other domains, from maritime security to geo-economics.

What, therefore, would India expect out of a new climate change consensus, and would it have broader implications for global geopolitics?

New Delhi would certainly demand that any new geopolitical compromise on climate change take into account the question of financing de-carbonisation for the emerging world – and this has a geopolitical dimension which Indians are very happy to spell out. This view argues that Beijing’s investments abroad through the Belt and Road Initiative are a major source of future financed emissions. The lack of Western finance for green infrastructure through the emerging world is forcing developing countries to use Chinese finance to build new capacity – to pump out the very carbon that Beijing claims to be cutting down domestically.

In other words, New Delhi believes that its own development partnerships and diplomatic outreach to the rest of the emerging world centres climate change as an issue the way that China’s do not. Beijing’s financing of foreign emissions through the BRI, therefore, should be set against New Delhi’s focus on the International Solar Alliance and on electricity grid interconnection across the developing world through the Modi proposal of ‘One Sun, One World, One Grid’.

Private finance for adaptation, mitigation, and broader infrastructure development will thus be at the centre of geopolitics for India, the Indo-Pacific, and the broader emerging world.

The general inability of Western strategists to understand the consequences of developments in the global macro-economy is a bit of problem here. Countries like India were buffeted beyond belief last decade by the round of Western crisis stimulus and withdrawal, which has contributed to their unwillingness to enhance economic relationships with the West in this decade.

Yet, in the West, a fresh round of stimulus packages and “new green deals” are being devised with zero attention paid to the implications for developing countries’ fiscal positions, infrastructure investment and low-carbon growth. Domestic “green new deal” transitions are insular programmes, designed to soak up private capital through incentives and taxation. What will suffer as a consequence is the natural flow of return-seeking private finance to India and the rest of the emerging world.

Strategists understand that a reduction in, say, global military commitments are a sign of a dangerous inward turn, and might be willing to argue against it. They must similarly realise that the forceful redeployment of the West’s entire reserve of private capital on the West’s own internal projects is no different. It is also a sign of an inward turn, and even more dangerous in its implications. The West’s sole remaining geopolitical instrument is private capital. It must not fail to use it. On other issues – security, trade, digital regulations – India may eventually evolve towards Western views and groupings. On climate change, without finance, it will not.

Without flows of private finance to the emerging world, incentivised through the correct institutional changes in the centres of global capital, not only will the Paris goals not be met, but there will be no chance to redevelop a broader geopolitical coalition that maintains the liberal international order against the imperial threat of Beijing-centric state capitalism. This is the Indian consensus position on the geopolitics of climate change. It has the not inconsiderable merit of being, for once, absolutely correct.

Mihir S Sharma is Director of the Centre for the Economy & Growth, Observer Research Foundation, New Delhi



[ii] Koteswara Rao, K., Lakshmi Kumar, T.V., Kulkarni, A. et al. Projections of heat stress and associated work performance over India in response to global warming. Sci Rep 10, 16675 (2020).