How The G20 Summit Validated Modi's Trade-Centric Approach To Diplomacy

During the campaign for the 2014 general elections, Narendra Modi often put forward his views on international relations in simple terms.

Diplomacy, he said, meant trade and little else; the rest, meaning the din and fury of geopolitics, were needless hurdles which really ought to be done away with, especially by large, mature, and responsible nations.

A decade later, he proved what he meant at the recently-concluded G20 Summit in New Delhi: India was remarkably successful in getting all member nations to unanimously adopt a joint declaration which avoided the prickly issue of the ongoing Russia-Ukraine war, to focus instead on commerce and sustainable development.

The achievement cannot be lauded enough for a number of reasons, particularly since the week preceding the G20 Summit was filled with ominous predictions that it would be derailed by geopolitics.

That is why the summit needs to be put in perspective.

First: the top leaders of Russia and China did not attend the summit. This led to diverse commentary. Some said that their absence detracted from the summit’s worth.

Anyone expecting Russian President Vladimir Putin to be present in the same room as leaders of the West, exactly when he is embroiled in a proxy war started by them in Ukraine, is wishing for the moon.

On the contrary, his absence permitted diplomats to thrash out an excellent set of agreements ranging from trade to biofuels and digital payments.

It is the same case with China. Everyone knows that Sino-Indian relations are at a dangerous nadir. Consequently, Xi Jinping’s absence allowed the Chinese delegation to quietly get their work done, without having to tackle the distressing and distracting optics of frosty footage between Modi and him.

The strain wouldn’t have held for three days, and the chances of failing to produce a joint document would have increased.

Second, the summit’s showstopper was the announcement of a new multi-modal trade route which will run from western India to Europe via the Middle East. Its alignment is both intriguing and interesting, as a map below shows.

As expected, the India-Middle East-Europe route (IMEE) was positioned by puerile binary analysis as a thumping riposte to China’s floundering transcontinental Belt-and-Road Initiative (BRI). Again, this a flawed interpretation for multiple reasons.

One, the IMEE is only one of two major new trade routes developing from India to the West.

The second route, marked in the map above, is also a multi-modal one which runs from India through Iran to St Petersburg on the Baltic Coast of Russia.

This is the INSTC, the International North-South Transport Corridor, and was operationalised a few months ago.

Two, both the IMEE and the INSTC avoid the Suez Canal, Turkey, the Caucuses, and Central Asia.

This takes significant pressure off two vital trade chokepoints — the Suez Canal, and the Bab-el-Mandeb straits at the southern end of the Red Sea, cuts travel time, and offers new, dedicated transportation options for goods to both the Mediterranean region and Northern Europe.

Third, analysts worth their salt concur that the BRI died in 2014, after India took a firm position that the most crucial section of the BRI, which runs from Xinjiang province of China across the Khunjerab Pass, and then through Pakistan-occupied-Kashmir into the plains of west Punjab, would not be allowed to be built. What riposte then?

Also, readers must bear in mind that this announcement was made at a G20 Summit where China was in attendance, meaning that there is no way China would have allowed this if it was indeed an insult.

Four, are the benefits to India. We sometimes forget that the ports of the Persian Gulf are closer to Kandla Port in Gujarat, than Ahmedabad is to Kolkata.

Consequently, once traffic on the IMEE and the INSTC pick up, a much larger component of maritime trade would then naturally sail through a narrow belt off Baluchistan’s Makaran Coast.

Five, as these two new trade routes develop, the commercial importance of Vizhinjam port on the Kerala coast, as a major trans-shipment hub, will increase in step.

Apart from this, a beckoning new era also offers India a fabulous value-addition opportunity in merchant ship building. From ship breakers to ship makers would be the ultimate return to roots.

Six, that leaves practicalities and timelines. Using the experience of the INSTC, which was formally announced in 2002, and is still under development, we can expect the IMEE to run at capacity only in a decade.

The Suez Canal will continue to be a primary trade passage between east and west, but smart operators will show that the INSTC and the IMEE are profitable routes by optimising costs.

Now, sceptics may wrinkle their noses at the plausibility of the West, Israel, and the Middle East burying a truckload of hatchets and working in tandem to make the IMEE a success, but that is only because they refuse to accept that the Middle East is changing. Money trumps ideology like nothing else.

It is the same with Iran which is, at present, largely isolated from global commerce; but again, objective analysis of novel dynamics in the Middle East leads to a significant inference — the isolation of Iran is finally, and inexorably, drawing to a close.

Thus, a good way to put the New Delhi G20 Summit in perspective is by realising that the gradual shift of world trade from the West to Asia is pushing the development of new trade routes.

In a sense, it also shows that Narendra Modi was not only right to view international relations in trade terms a decade ago, but, that he proved his point at the G20 Summit by wresting a unanimous joint document which abjured geopolitics to focus on commerce.

In conclusion, from a historical, civilisational perspective, this essentially means that new paschima-pathas are being developed for a new Bharatavarsha, based on the ancient code of Vanijya dharma: ‘Leave us in peace to trade with you for mutual profit’.