Introduction

India’s foreign policy has undergone significant changes since the Bharatiya Janata Party (BJP) came to power in 2014. Under the leadership of Prime Minister Narendra Modi, India has pursued a more assertive and proactive foreign policy, aiming to enhance its global standing and economic growth. In this blog, we will explore the effects of India’s new foreign policy on its GDP since 2014.

1. Economic Diplomacy

One of the key features of India’s new foreign policy has been its focus on economic diplomacy. The government has actively engaged with countries around the world to promote trade and investment. Initiatives like “Make in India” and “Digital India” have been launched to attract foreign investors and boost domestic manufacturing and digital sectors. As a result, India has seen an increase in foreign direct investment (FDI) inflows.

2. Bilateral and Multilateral Trade Agreements

India has been proactive in negotiating bilateral and multilateral trade agreements. The signing of trade deals, such as the Comprehensive Economic Cooperation Agreement (CECA) with ASEAN, and the Regional Comprehensive Economic Partnership (RCEP), have expanded India’s trade horizons. These agreements have opened up new markets for Indian goods and services, contributing to GDP growth.

3. Stronger Ties with Major Economies

India has strengthened its ties with major economies like the United States, Japan, and European Union nations. Strategic partnerships with these countries have not only boosted trade but also encouraged technology transfer and investment in India. The “2+2” dialogue with the U.S. and the “Make in India for the World” initiative have exemplified this approach.

4. Act East Policy

India’s “Act East” policy has focused on strengthening ties with East and Southeast Asian countries. By enhancing economic cooperation with countries like Japan, South Korea, Vietnam, and Singapore, India has tapped into new markets and supply chains. This has positively impacted various sectors, including manufacturing and technology.

5. Infrastructure Development

Foreign policy has also played a role in infrastructure development. The “Connect Central Asia” policy aims to develop transport and energy links with Central Asian countries, facilitating trade and energy security. Investments in infrastructure have not only improved connectivity within India but also created economic opportunities.

6. Challenges and Concerns

While India’s new foreign policy has brought about several positive changes, there are also challenges and concerns. Trade imbalances, issues related to intellectual property rights, and geopolitical tensions with neighboring countries have posed challenges. Moreover, India’s foreign policy needs to strike a balance between economic interests and national security.

Conclusion

India’s new foreign policy, marked by proactive engagement and economic diplomacy, has had a significant impact on the country’s GDP since 2014. Increased FDI, trade agreements, and stronger ties with major economies have all contributed to economic growth. However, challenges and concerns remain, and it is essential for India to navigate its foreign policy in a way that maximizes economic benefits while addressing security concerns. The coming years will be crucial in determining the long-term effects of India’s evolving foreign policy on its GDP and overall development.