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New Delhi

Admiral Prasad and Friends,

Before we look at the content and direction of our foreign policy and the challenges that we face today, I think it will be in order if we dwelt a little on the past in order to get our moorings right. India had a unique freedom struggle. It was different from any freedom struggle that the world had known before. The freedom struggle of India was not only largely non-violent but also contained a high degree of idealism. That perhaps explains why India, even after it became independent, did not nurse the kind of bitterness against former colonial rulers that we have noticed in other countries which achieved independence. The fact that we joined the Commonwealth of nations is proof of the absence of that bitterness.

The evolution of foreign policy that took place immediately after independence was informed with the same degree of idealism that permeated the freedom struggle and I make this my starting point. In fact, you will find that not only in the case of India, but all over the world there has been a conflict between idealism and realism in the formulation and implementation of all policies, especially foreign policy. So initially when India achieved its independence, this idealism formed the bedrock of her foreign policy and there was no dearth of issues for her to espouse. For example, the war against colonialism had started in India. In that war, the first victory was that of India. It was therefore natural for India to assume a leadership role against colonialism. It was also India’s destiny to lead the fight against racism, particularly the policy of apartheid which was being practiced in South Africa. The war against colonialism and the war against racism formed, some of the basic ingredients of India’s early foreign policy.

India also looked at the world and saw more and more countries achieving their freedom from colonial rule. When these newly emerging countries looked at the world, they found a world divided between the communist bloc and the non-communist bloc. It was the age of the Cold War. Under the leadership of Pandit Nehru, President Nasser and President Tito, this community of nations evolved what is known as the Non-Aligned Movement. Over a period of time, NAM not only acquired a political dimension but also strong economic content. The Group of 77 which consisted mostly of the non-aligned countries became an important instrument of negotiation and articulation of views of the developing countries in all fora where economic issues were discussed.

Immediately after the independence of India, Pt. Nehru observed and I quote "the objectives of our foreign policy are the preservation of world peace and the enlargement of human freedom”. He also described the idealism of today as the realism of tomorrow. So, these were the origins of India’s foreign policy and during the decade of 50s and 60s, you will notice that as a result of this idealism, India was among the most prominent countries which had not only achieved independence but was also working for the independence of other countries.

India has, and because of nonalignment, India had a role in international affairs which was perhaps disproportionate to our military and economic strength. What sustained that role was the idealism and morality that informed our foreign policy. It is this idealism which gave us the stature internationally.

I would like to skip the details of what ensued subsequently. A br/oad overview suggests that when Mrs. Indira Gandhi became the Prime Minister of India, she leaned more on the realist aspects of India’s foreign policy. She did not depend on idealism entirely. During her regime, a lot of things happened which clearly br/ought India onto the world map.

We had the nuclear tests in 1974. We went into space and the first satellite was launched by us in July 1980. We started to reform our economy. Clearly a change was noticeable, both in the economic content of foreign policy as well as the military and defence content. It was not that Mrs. Gandhi did not play a role internationally. We are all aware that she attended a number of important international meetings during her tenure as Prime Minister and hosted a number of important meetings in India. During her era, there was emphasis on disarmament, development and on the environment in the international field. These are three things that she br/ought into sharper focus as part of her foreign policy.

This realism was followed by subsequent regimes and the culmination of this realism was in May 1998 when India decided overtly to go for nuclear tests. India declared to the world that it was a nuclear-weapon power. In the meanwhile, in the decade of 90s a uni-polar world emerged with the collapse of the Soviet Union. The international backdrop also underwent a dramatic change. In our country, we launched ourselves on a definite path of economic reforms, liberalization and greater integration with the global economy. During this phase, globalisation became a force which no country could ignore. Today’s foreign policy is therefore more realistic based on the recognition that India’s place in the comity of nations will be determined by the economic and military strength that is there to back it up. It does not mean abandonment of idealism but clearly idealism alone cannot suffice. We live in a world where such idealism does not exist. It has become a thing of the past and every one is interested in making one’s foreign policy on realistic considerations.

What does realism really mean? It means placing your national interest first and foremost. In a situation where every nation is giving priority to its own self-interest, we are likely to be left behind if we did not look at our interests. This historical analysis in which I have given you a very br/oad picture shows that we have at times succeeded and at times failed. There have been occasions where we can look back and say clearly we failed to protect our national interests. Many of the problems we are facing today arise perhaps out of some of these mistakes which have been made and some of the failures which came our way in the course of conduct of foreign policy over the last five decades.

As I mentioned to you, the guiding principle of foreign policy today is realism and the pursuit of national interest. But, in this pursuit what are the issues and challenges which confront us? Clearly, uni-polarism as against multi-polarism is a real issue which every country in the world has to reckon with. We are committed to multi-polarism. India is not in favour of uni-polarity and therefore the kind of world order which we envisage and are working for is not one merely of technical equality in the United Nations but greater balance among nations of the world. It should not be one country’s will which alone prevails in all situations.

A very important fact not only for India but for the entire global community was recently when the whole discussion on how we should deal with Iraq became urgent. We are aware of the fact that there was a desire or eagerness on the part of the US to proceed unilaterally. But I recall to my mind speeches in the UNGA which was held in September where starting from the Secretary General of the UN to perhaps every other leader of the world spoke about the need to involve the United Nations. Ultimately, whatever time it might have taken (seven weeks), a resolution which could command an unanimous vote in the Security Council was passed and all the 15 members including Syria voted for this resolution. This is a triumph of multi-polarity and a triumph of the United Nations over uni-polarity. Truth of the fact is that however strong and mighty a nation may be, it ultimately has to submit to the will of the global community. Somebody or the other will stand up and say that this is not the way. There are other alternatives to look at. On our part, we supported the United Nations in the speech our Prime Minister made in the UNGA. We are happy at the outcome which recognizes the value of the United Nations as an agency which should be used for resolution of international conflicts.

The other impact of multi-polarity would be in the security area and in all the arrangements internationally which govern nuclear weapons, missiles, high technology, etc. India has been consistently of the view that you cannot have two categories of countries in the world – one, which has stolen technological lead over others and others who came in late. That has been our basic objection to the NPT and the Comprehensive Test Ban Treaty. That is our basic objection to the MTCR and to the conference that is going to be held in Netherlands in the next few days on International Code of Conduct on Missiles. We are committed entirely and whole heartedly to disarmament. But we want every country in the world to disarm. We are also supportive of making a distinction between a responsible State and an irresponsible State. There are some States which are clearly helping other countries in nuclear proliferation. India cannot be accused of that. We have developed our technology indigenously. We did not have to go and borrow. Our technology is by and large our own. But there are countries in the world who proliferate nuclear and missile technology and are guilty. The current debate on North Korea is a case in point. Our own neighbour, Pakistan’s role in this triangle of China-North Korea-Pakistan is quite clearly established. India is the only country which has committed itself to No-First Use. Our nuclear doctrine also clearly says non-use against Non-Nuclear-Weapon States. No other country to the best of my knowledge has committed to No-First Use. So as far as disarmament is concerned, we have clear views and are prepared to, not only go along but actively work for disarmament which is universal, non-discriminatory and time bound.

The other aspect of our foreign policy currently and for some time to come, is the phenomenon of regionalism. In order to establish a multi-polar world, smaller countries in the world are getting together and evolving themselves not merely into economic groups but also acquiring a political personality. The European Union is a good example of a group which started as a union or a conglomerate of countries for economic and trade matters but has now acquired a clear political dimension. While one must admit that EU has not been able to evolve a common position on all issues which are of political importance, (the recent Iraq case is proof of that) EU is gradually evolving a political personality of its own. When EU can have a convergence of views on economic, political and strategic matters which are globally important, EU will perhaps be a counter balance and force in the international global situation.

We have, in Latin America, the Caribbean States which have formed the CARICOM. Four countries - br/azil, Argentina, Paraguay and Uruguay have formed the MERCOSUR and the rest of them are in the Andean bloc of countries. The African Union is again a recent phenomenon which seeks to br/ing together nations of the African Continent. Nearer home, we have the ASEAN which has emerged as a major group of nations in East Asia and is now evolving its relationship with the rest of the world. In our immediate neighbourhood, we have SAARC (the South Asian Association for Regional Cooperation) which unfortunately has not made the kind of progress that it should have made because of the difficulties which exist in this region.

India has evolved a policy to deal with these regional groups. A few years ago, we had our first Summit with European Union and the third summit was held recently in Copenhagen. We had our first summit with ASEAN in Cambodia recently. We are trying to forge relations with the Latin American groups and with the African groups. It will be our policy to promote a strong regional cooperative group in South Asia and to promote friendly relations with all groups of countries which have organized themselves regionally. In this effort, economic diplomacy will be our principal tool. It is our experience and the experience of other countries that a major content of foreign policy at bilateral and global level is economic arrangements. Every country is looking for some economic benefit or the other for itself. We have also given an indication of the kind of arrangement that we are looking forward to. When Prime Minister went to Cambodia for the ASEAN summit, we offered ASEAN a free trade arrangement and are working out a road map in a 10-year period which will ultimately enable us achieve that goal. In fact, within SAARC, we wanted a free trade arrangement by the end of this year itself. But, it has not been possible so far and we are a few weeks away from the end of the year. We have arrangements with EU and are trying to evolve similar arrangements with Latin America and Africa. The thrust of India’s economic diplomacy in the coming days will be to work out a road map which, within a fixed time frame, will ultimately lead us to a free-trade arrangement with all regional groups of developing countries. We will have and we should have free-trade arrangements with the Andean group of countries, MERCOSUR, CARICOM and Africa. We are working on one with ASEAN and we will look at other groupings of developing countries also. We will start with preferential trade arrangements and ultimately move to a free-trade arrangement. Trade and South-South cooperation will continue to play a very important role in our policy framework.

Here, I would like to also mention that we have now shifted from a one-way street mindset to a two-way street mindset. What I mean by this is that India is not merely looking at investments from other regions and other countries – developed or developing. We are not merely looking at import of technology and best practices from them. We are also in a position to contribute them. This was the thrust of my speech in the business summit in Copenhagen where I talked of this two-way street. There are today large number of Indians in information technology and other fields who are making investments in the European Union. There are technologies which we can transfer to other countries given our strength in knowledge industry. It is being increasingly recognised that India has excellent technology. With this respect which India commands, it should be possible for us to be of greater help for the developing world and stand shoulder-to-shoulder with the developed world.

We will continue to work for a better world order in the economic sphere. Today, the international economic order is highly skewed in favour of developed countries. This is something which has to be set right. I have some figures here which I would like to quote about the so-called North-South divide. It is difficult to pursue enlightened approaches to development in a world where overseas development assistance levels are falling, protectionism is on the rise, terms of trade are stacked in favour of the rich, debt burdens have spiralled, corporate governance needs urgent redefinition and the volatility of international capital transfers has affected productive investment flows to the South. It is depressing to note the statistics given in the Human Development Report 2002 that 2.8 billion people still live on less than US$ 2 a day and the richest 1% of the world’s people receive as much income each year as the poorest 57%. Industrial country tariffs on imports from developing countries are four times those on imports from other industrial countries. In addition, as is well known, OECD countries provide US$ 1 billion a day on domestic agricultural subsidies which is more than six times what they spend on ODA for developing countries. These figures br/ing out the enormity of the inequity which exists in the world today. When we talk of a level playing field, there is hence a great deal of force in this argument. As I said, India will continue to coordinate activities with other developing countries in order to be able to deal with this problem and create an environment which is more equitable. Economic development will continue to be a primary concern of our foreign policy. India has supported the millennium goals of the United Nations. We attended the Conference on financing of development in Monterray. Earlier this year, we also actively participated in the Conference on Sustainable Development in Johannesburg. A climate change conference also took place in Delhi recently. If you look at this flurry of international activity in totality, you will find that the world is extremely concerned with sustainable development and financing of development.

All this can be pursued and will become a reality only if we live in a world which is peaceful and not in a world which is full of conflicts. Conflict, as is well known, has acquired a new dimension because non-State actors have got into the act of creating new trans-national conflicts which did not exist before. I am referring to international terrorism. It is easier to deal with State actors and negotiate with them. It is very difficult to deal with shadowy figures who are always in the background. The kind of terror we have faced recently tells its own tale. We in India have been at the receiving end of cross-border terrorism for almost two decades. Earlier when we spoke about terrorism, the world was not prepared to take as much notice of it as it should have. But, the entire outlook underwent a sea-change after 9/11. Today, we have an international coalition against terrorism, arrangements in place to freeze terrorist financing, Security Council Resolution 1373, etc. However, we in India feel the world is not following uniform standards when it comes to dealing with terrorism. When terrorism happens in one’s own country, it is the worst form of terrorism. If it happens somewhere else, people are not concerned. Then is also debate about the root causes of terrorism and talk of the need to tackle these root causes. I am not of that school of thought. If you start looking at root causes, then you will have to deal with poverty, discrimination, disparity, religious intolerance, territorial disputes, etc. Any number of issues can be described as root causes. I don’t know how long the world will take to solve all these issues and make the world a decent place to live. As long as the world is not a decent place to live in, then according to this theory, root causes of terrorism will exist and so will terrorism. In effect, this is tantamount to terrorism or tolerating terrorism. Terrorism has to be dealt with as it is. br/itish Foreign Secretary, Jack Straw made an interesting statement the other day about the mistakes which br/itain made as a colonial power and how that is responsible for many of the world’s ills. Jack Straw is given to expressing opinions frankly and I quote him "There must be no hiding place for terrorism or terrorists, no hiding places for their money and no semantic hiding places either. The distinction some claim between terrorists and freedom fighters is false and dangerous. The victims enjoy no such distinction. There must be no such distinction either in international law”.

Now the world has veered around to the formulation that terrorism in all its forms and all its manifestations is bad and cannot be tolerated. But, there is still a disconnect between the kind of instruments that we are prepared to use for dealing with terrorism and terrorists. As I said, in this part of the world, we have a certain amount of disappointment with the international community because of the soft attitude they have adopted towards our neighbour which is exporting terrorism into India. As long as this continues, one will be compelled to say that the world has not yet arrived at a single standard. There is still a double standard in dealing with terrorism. Ladies and Gentlemen, India is determined to deal with these terrorists. We have dealt with this in Punjab and got the better of it. We will deal with it not only in Jammu and Kashmir but elsewhere in the country also. I have no doubt in my mind that we shall win this war also.

In recent years, the nuclear tests which India carried out in May 1998 was a watershed. The world did not look at it kindly and we were subjected to economic sanctions. We explained our point of view and our security concerns. I am glad to say that ultimately we have been able to convince the world that India had no malafide intentions in carrying out these nuclear tests. It was not that we were waiting to join a certain exclusive club. It was concern about our national security which prompted us to do it. We are clear in our mind that we will not compromise on our nuclear programme. We will also not compromise on our missile programme. We will do whatever it takes to protect India and to defend India. The government will do everything needed to ensure the security and safety of our people. India has emerged today as a key global player. This change which has come about within four-and-a-half years from the nuclear tests is remarkable in itself and calls for a much deeper study of Indian diplomacy during this period. In fact, the extent to which we are a global player is evident from the figures of incoming visits since January of this year. We will have had around 41 visits at summit level and at Foreign Ministers level during just this one year, not to talk of outgoing visits abr/oad that we have made. To mention a few, Prime Minister of India attended the summits with ASEAN and with EU. He attended the SAARC Summit Meeting in Kathmandu in January. He visited Singapore and Cambodia. He attended the CICA Summit in Almaty. He had a summit meeting with President Bush on the margins of the UNGA as well as many other dignitaries including the Japanese Prime Minister. The Chinese Prime Minister visited India. The UK Prime Minister has been here twice. The Russian President is going to visit us in the next couple of weeks. The Japanese Prime Minister came here a few years back and our Prime Minister returned that visit early this year. I have not included in the above visits at the Foreign Minister level where people are interested in finding out what India’s position is with regard to various international issues. Moreover, India is a legitimate aspirant for a permanent seat in the Security Council of the UN and there are by now a number of countries which have publicly pledged their support. As and when this issue is seriously taken up by the United Nations, I am sure, India’s aspirations will be fulfilled.

One important strength apart from IT and knowledge industry which India has acquired over the last decade or so, is the emergence of the Indian diaspora and the political influence they enjoy in various countries, be it the EU, the US or elsewhere. Here, I am not just talking of countries like those in Caribbean, Fiji, Mauritius, South Africa or East Africa, where people of Indian origin have been present since the end of 19th century. I refer also to the new diaspora of Indian professionals who migrated in the 20th Century and continue to do so today. The diaspora has helped India in several ways. One, in terms of local clout. For example, I met the New Zealand Foreign Minister in Seoul where I had gone to attend the Community of Democracies. I was surprised when he told me that he had several thousand Gujaratis in his constituency and that they are an important political force. Similarly, we meet US Congressmen and Senators, br/itish Members of Parliament and others who tell us how the local community plays a very important role in the politics of their countries. It is the view of the Government that the Indian diaspora should not feel abandoned or lose its contacts with the mother country. We are looking at them and they at us. We are going to organize in coming January a major event called Diaspora Day where we have invited PIOs from all over the world to come to New Delhi. We have decided to honour the achievers amongst them. This is a way of letting them know that we value them and recognize them.

Secondly, the Indian diaspora has an important economic role to play in the development of India. For example, in 1998, when economic sanctions were imposed and the East Asian crisis was underway, our foreign exchange reserves were on the decline. I was Finance Minister at that time and we devised what is known as the Resurgent India Bonds. We went with these Bonds to the diaspora. The alternative was to go to IMF. But clearly you cannot have nuclear tests and still go to IMF for assistance. Their doors were closed. We, therefore, went to the diaspora and I remember I was told we may get a million or at the most two million dollars. The State Bank of India which issued these Bonds kept them open for only ten working days and collected US$ 4.2 billion. That was the contribution that the diaspora made. Subsequently in 1999, when international oil prices were going up, we again went with the Millennium Bonds. This time we got over US$ 5 billion. The US$ 65 billion foreign exchange reserves that we see today has risen from US$ 1 billion in 1991 when also I was Finance Minister. This contribution of the PIOs and NRIs cannot be overlooked. They supported us when our reserves were under pressure. So, relations with the diaspora are important role for both political and economical reasons. This is an aspect of our foreign policy we propose to continue to emphasise in future.

India faces many challenges. We have made mistakes in the past. It will be our endeavour to learn from those mistakes so that we do not repeat them in future. The conduct of foreign policy is closely linked to economic and military strength. We will build our economic and military strength. We will not be deterred by the challenges we face.

An issue I was asked to touch upon, in the course of this talk was the role of the military establishment in the formulation of foreign policy. We in India have built systems which enable our Armed Forces to contribute to the formulation of foreign policy. We have the Cabinet Committee on Security which deals with major issues of both internal and external security as well as foreign policy. Consultations take place between military and the civilian authorities regularly and views of the armed services are fully taken on board. There cannot be a foreign policy without military content. We realize that. Therefore, within the overall framework of our Constitution and civilian control, the armed forces will continue to make contribution to the evolution and formulation of India’s foreign policy.

Finally, today’s topic is vast. It is not possible to do justice to all aspects of foreign policy in the limited time available. If I have left out something, I can cover it during the course of the Q&A.

Thank you.