India’s states grow in power as new government set to take control in Delhi

A new government is about to take control in Delhi, but it's the provinces that are commanding a greater say in both domestic and foreign policy

PUBLISHED : Thursday, 15 May, 2014, 11:30pm
UPDATED : Thursday, 15 May, 2014, 11:48pm

As India today finds out who takes the reins in Delhi, China will keep its ear to the ground for more distant rumblings, and clues to deeper shifts in power.

The road to lasting peace with Asia's other giant, Beijing is beginning to realise, lies beyond Delhi, winding through the political hinterlands of Chennai, Lucknow, Calcutta or Cuttack, where regional leaders rise to unprecedented heights of power.

Local leaders are increasingly running India and China

"China is increasingly aware of the ability of regional players to influence national governance and economic development, especially in populous, federal and decentralised countries such as India," said Zhang Li, a professor at the Institute of South Asian Studies at Sichuan University.

As the ruling Congress fades and with the pretender to the throne, the Hindu nationalist Bharatiya Janata Party (BJP), yet to acquire a pan-India presence, small regional parties and powerful local leaders of the two national parties fill a political void. The hold over their respective states gives these bosses control over a chunk of parliamentary seats, and with it clout in Delhi unthinkable a decade ago.

Of India's 28 states, the Congress rules 11 and the BJP five. These two leading parties already have standing pre-election alliances, called the United Progress Alliance (UPA) and the National Democratic Alliance (NDA), respectively, with myriad state-level outfits.

According to exit polls taken during the national election, the BJP-led NDA might be able to win 272 seats with little or no additional help from other parties to claim a majority in the 543-seat parliament. But even if it does, it will try to bring in more coalition partners, especially from larger states that have more members of parliament, to ensure stability of the government and make it more broad-based. If it doesn't, and the results declared today show no clear winner, Delhi would be plunged into political uncertainty, triggering new, post-election alliances. In both cases, more state satraps would gain a greater say in all aspects of national policy, including foreign affairs.

All but four Indian states share land borders with other countries or with international waters, which should make them a natural party to the nation's foreign and security policies. But like most countries, India's constitution makes foreign policy a wholly central prerogative, and for decades it has remained so. Not any more.

"With the liberalisation of the Indian economy on the one hand and globalisation on the other, the boundaries between global, domestic and local are getting increasingly blurred. Indian federalism is also undergoing a structural transformation as a result of the changing nature of politics, leading to a decentralisation of foreign policy," said Tridivesh Singh Maini, a New Delhi-based policy analyst who specialises in the role of border states in India's diplomacy.

Not surprisingly then, for the first time, regionalisation of foreign policy has entered the realm of policy statements. The BJP election manifesto says state chief ministers should be "equal partners" in improving India's ties with neighbours and promises the government will not be limited to a team led by the prime minister "sitting in Delhi". It also talks about involving the states in promoting foreign trade.

The more Indian national party leaders look at regional parties or states strategically, so will others

A devolution of sorts of foreign policy is as much a formal admission of the compulsions of coalition politics as it is drawn from the personal experience of BJP leader Narendra Modi, widely tipped to take over from departing Congress Prime Minister Manmohan Singh.

As the BJP chief minister of the western state of Gujarat, Modi blazed a trail of subnational economic diplomacy by successfully drawing Chinese investment into his state. In 2011, he made a high-profile trip to Beijing, which reciprocated by rolling out the red carpet. Apart from a sales pitch for his state, Modi appealed for the release of 19 Indians, mostly from his state, who had been arrested in Shenzhen for allegedly smuggling diamonds from Hong Kong to the mainland. Within a month, 13 were released and the rest let off with light sentences, defusing a potential diplomatic stand-off.

But in recent years, local leaders have proved they can hinder India's foreign relations as much as they can grease it. In 2011, Mamata Banerjee, a maverick leader from the eastern state of West Bengal, pulled out of the prime minister's delegation to Bangladesh at the last minute and vetoed a river water sharing deal between the two nations.

Last year, another UPA ally, in the southern state of Tamil Nadu, withdrew its 18 lawmakers from the ruling coalition over alleged human rights violations of Tamils in Sri Lanka, reducing the government's numerical status in parliament to a minority. India's ties to the two neighbours have yet to recover.

"Because West Bengal and Tamil Nadu will continue to be governed by non-Congress and non-BJP governments for the time being and perhaps well into the future, Delhi's foreign policy with the immediate east and south will necessarily have to defer, in part, to Calcutta and Chennai [capitals of West Bengal and Tamil Nadu] on neighbourhood policy," said Sourabh Gupta, a senior research associate at Washington-based business consultancy Samuels International who covers China-India relations.

The rise of the provinces is not a uniquely Indian phenomenon. As goods and services flow ever more freely across national borders, local governments in large countries the world over are finding out that their quest for resources can be optimised if unshackled from national bureaucracies. In 2012, Brazil's Sao Paulo, Latin America's wealthiest state, decreed its own plan for conducting international relations. Last year, both Britain and the United States signed agreements with Sao Paulo establishing direct, formal bilateral relations.

If Gujarat were a separate country, points out Brookings Institution managing director William Antholis in his recent book Inside Out India and China: Local Politics Go Global, it would be the 23rd largest in the world, slightly smaller than France. Its exports, at US$61 billion in 2011, would put it in the top 50.

"That kind of population and that level of global orientation of economic output automatically make local units global players. This is why both China and India have been decentralising their economies. Only, the decentralisation is purely economic in one-party China while in multi-party India, it's both political and economic," Antholis told the Post, drawing a parallel between Gujarat and Guangdong and between Modi and Wang Yang , the reformist vice-premier and former Guangdong party chief. "Local leaders are increasingly running India and China. It makes enormous sense for anybody engaging these countries to engage the local leaders."

In India's case, some states - like Gujarat - have done a stellar job of managing their economies in stark contrast to the rest of the country. Voters, in turn, have rewarded these local leaders by repeatedly returning them to power, creating a mutually reinforcing spiral of political power and economic clout.

That heft makes India's state leaders particularly important for China, which has been struggling to pry open this difficult market. Bitter Indian memories of a lost war in 1962 and the resultant security fears hobble Chinese investments, from telecom to infrastructure. Operating in such a climate of suspicion, it pays for Chinese businesses to have powerful state governments in their corner because most of the standard obstacles are put up by centrally controlled agencies such as those relating to security.

"I remember the ordeal of a Chinese bamboo flooring company that was trying to set up a factory in the northeastern state of Tripura. The central authorities simply refused to issue the visas for key Chinese engineers needed for the project," said Subir Bhaumik, a senior fellow at Indian think tank Centre for Studies in International Relations and Development. "Finally the chief minister intervened and wangled the visas. This happens all the time in border states."

Strong regional allies, especially border states, are also crucial to China's ambitious cross-border infrastructure investment initiatives. Beijing, for example, is keen to develop a Bangladesh-China-India-Myanmar (BCIM) economic corridor by reactivating an ancient trade route that runs from Kunming in Yunnan to Calcutta.

The BCIM corridor would shorten travel time, cut transport costs, provide landlocked Yunnan province access to the Bay of Bengal, open up India's vast market to China's backward western regions and help create new production bases along the way. But Delhi's fear of the security implications of allowing China direct access to its border states means BCIM is yet to gather steam. Strong lobbying by states that stand to gain from the corridor, such as West Bengal and Manipur, would go a long way in overcoming central resistance and help China push its agenda.

In 2012, then US secretary of state Hillary Clinton visited West Bengal to meet chief minister Mamata Banerjee before going on to New Delhi. The previous year, she flew to Tamil Nadu to meet up with its chief minister, J. Jayalalithaa, another powerful state leader. While the US, for which India is an important element of its "Asia pivot", displays a pattern of engagement that recognises the primacy of influential states, the Chinese have been slow to practise such courtship.

But according to Jabin Jacob, assistant director of the Institute of Chinese Studies in New Delhi, China's interaction with Indian subnational actors may be short on pomp, but not on substance.

"The Chinese are far less demonstrative and when engaging regional players in India, they prefer to do it through their own regions. Yunnan, for example, sends frequent delegations to West Bengal, mainly related to the BCIM initiative. Their priority is economic returns, not cultivating top-level political leaders. At least not yet," said Jacob.

"China doesn't yet engage regional leaders in order to achieve political outcomes. But it's just a matter of time, I guess. The more Indian national party leaders look at regional parties or states strategically, so will others."