An Enquiry into the Political Economy and Cultural Normativity that

underpins Indian Foreign Policy through the lens of Decolonisation and

Decoloniality

Introduction

The Realist framework of understanding International Relations presumes the primacy of

states, which are taken to be the primary actors, as rational agents navigating the realm of
World Affairs. The state is therefore the quanta of analysis in this analytical framework.
However, states aren’t a monolith in spatial, temporal, and structural terms. States have
varying infrastructural capacities over their expanse, exhibit dynamic evolution over time,
and have an intricate institutional framework. These have an inextricable relation with the
behaviour exhibited by a State in the International Realm. There is a significant component of
agency as well, which may predominate structural constraints in terms of determining
outcomes and decisions. Cultural and ideological factors need to be taken into account to
understand the contingency of such agency. In the case of India, most Whig narratives of
Modern Indian History posit that the advent of the postcolonial Indian State was a drastic
structural transformation from its antecedent colonial counterpart. The transition from
colonial subordination to independent sovereignty is the leitmotif of such narratives. These
gloss over the temporal expanse inherent in any radical structural transformation of a State.
The purpose of this study is to analyse the position of India in the Global Order through the
lens of decolonisation and decoloniality, with a special focus on the salience of the
continuities between the two dominant phases of its journey from the 20th century onwards:
the late colonial and the postcolonial. Such a historical approach will enable one to better
understand the determinants of India’s approach and its standing in the world.

The trajectory of the postcolonial Indian State reveals to us one of the most remarkable
successes in the decolonisation that ensued after the decline of the traditional iteration of
imperialism. In contrast to many other states which have gone through prolonged periods of
domestic strife, affecting the integrity of their institutions and the welfare of their populace,
India has admirably steered through these challenges. It must be kept in mind that the United
Nations still has a dedicated Trusteeship Council, despite there having been no further
assignment for it since 1994, after the independence of Palau. It is no wonder then, that the
major motif of Indian Foreign Policy has been the position of the Indian State amidst the
broader decolonisation process of the world. Post-independence, during the Nehruvian Era
and for long after, a policy of Non-Alignment was followed (Menon, 2021). This was based
on the fear that a structural alignment would undermine the sovereignty of our country. The
statesmen at the helm of the postcolonial Indian State aspired to secure India’s status as an
independent player in World Affairs rather than continuing as a unit in the old imperial
system. Non-alignment as a specific policy, however, was gradually revamped in favour of
“multi-alignment” as the bipolarity of the Cold War receded from its earlier status as the
major fissure. This transition temporally overlapped with the gradual opening up of the
Indian Economy. The rhetoric of decolonisation has remained a constant part of our
conceptual understanding of Global Affairs.

We live in an era of globalisation. From the early 20th century onwards, the volume of Global
GDP traded has hovered around 20 %; a sharp increase from its value towards the beginning
of the 19th century, when the ratio of world trade to output was around one-tenth of the same.
The figure in recent years has been extremely unstable, however. In the year 2020, during the
COVID-19 Pandemic, the figure fell to 20.3% from its higher value of 21.8% in 2019. There
was a recovery from the next year itself, though, to reach a new peak of 25.3 % in 2022,
while the following year saw a decrease to 22.4 % ( Ortiz-Ospina et al., 2018). These
variations aside, the fact is clear: today, a significant share of the global output is traded
between countries. This is deeply resented by several countries. Recently, JD Vance,
explicitly said that the United States cannot countenance the development of countries which
produce cheaper products in the global manufacturing chain. To him, "the idea of
globalisation was that rich countries would move further up the value chain while the poor
countries made the simpler things" (Vance, 2025) A stunning revelation because the
protectionism he is now championing was the hegemonic economic policy of the postcolonial
Indian State for precisely the inverse reason.

Dependency Theorists rose to popularity around the midpoint of the 20th century. The
Prebisch–Singer thesis was published in 1949 independently by Hans Singer (Singer, 1950)
and Raúl Prebisch (Prebisch, 1950). The Marxian perspective was developed by Paul A.
Baran in 1957 in his famous work “The Political Economy of Growth” (Baran, 1957). The
Indian Marxist-Nationalist Bipan Chandra spent some time in the United States after partition
but was deported back to India under the McCarthyist crusade against Communists. He
published “The Rise and Growth of economic nationalism in India: Economic Policies of
Indian National Leadership, 1880–1905”: a sympathetic account of the ideology and analysis
of the Indian Economic Nationalists between 1880 and 1905 (Chandra, 1968). He would go
on to defend the Dirigiste Regime of Economic Planning in his other works on Contemporary
History, most notably his famous textbook “India Since Independence” co-authored with his
students Aditya Mukherjee and Mridula Mukherjee (Chandra et al., 2008). Until the early
1980s, the Dirigiste Logic was the hegemonic logic of India’s economic policies. Operation
Forward changed this with greater emphasis on deregulation and liberation of the Capital
Market, amongst a range of other policies such as a focus on the efficiency of State Owned
Enterprises. The Political Economist Atul Kohli has argued, in fact, that in the manufacturing
sector “[T]he real break in growth occurred around 1980” (Kohli, 2006) Nevertheless, by the
2000s, the Liberalisation, Privatisation, and Globalisation reforms had revealed their
momentous nature.
But why did India adopt a dirigiste economic policy? It was based on a fear of markets. A
dominant strand of economic thinking linked late 19th-century famines to the increasing
commercialisation of the agricultural economy and the countryside, arguing that grains were
exported or sold elsewhere – exacerbating regions struck by famine and the consequent
shortage of grains (Roy, 2016). Instead, it felt, that the state, with the goal of welfare
maximisation, was a better coordinator of scarce economic resources. They were unaware of
the fact that dryland famines by the year 1900 were eliminated predominantly through the
effect of market integration, which prevented sudden supply shocks courtesy of exogenous
effects such as drought and/or famine from disproportionately affecting the grain availability
in a province. The framework of World Systems Theory has often been applied to understand
vast geographical areas which exhibit political and economic segmentation (Wallerstein,
2004). At this stage, India exhibited a great deal of economic segmentation which was only
gradually undone via a unification of its various markets.

The Autarky and Dirigiste were intimately linked. What the Dirigiste did to the internal
markets, the Autarky did to the Global Market. Both economic policies were predicated on a
fear of markets. The Dirigiste was an intervention into an already integrated market as a
distortion of the price mechanism, while the Autarky was an attempt at deglobalisation. The
ratio of world trade to output was 21 % in 1913; almost as high as the current proportion
(Ortiz-Ospina et al., 2018). Globalisation is an extremely old phenomenon and not
something which started post the fall of the Berlin Wall. The process of economic
decolonisation undertaken by India, as it was perceived by the leading Indian statesmen of
India then, is instructive of the potential effects of Deglobalisation. JD Vance demonstrated a
percipient analysis of the effects of Globalisation over its recent past. Latest economic
research shows that between the early nineteenth century and the First World War, the terms
of trade between the “Core” and the “Periphery” extremely improved (Williamson, 2002).
While this aggravated the divergence between the “Core” and the “Periphery”, this was due
to endogenous factors of the domestic political economy of the peripheral regions and not
intrinsic to globalisation itself. The peripheral regions saw an absolute improvement in their
economic performance, but, except in regions where endogenous growth development took
off due to industrialisation, they lost out in relative terms due to the manufacturing-sector-led
growth regime in “Core” countries. The peripheral regions saw an increase in inequality due
to globalisation, which, instead of exhibiting pro-growth policies such as industrial
investment, saw the growth of rent-seeking activities. East Asia was somewhat of an
exception, which courtesy of its trade boom, saw a growth in its industrialisation and a
concomitant shift in the political power from landlords to the urban working class and their
capitalist employers.

By the time the Bombay Plan was framed, industrialists rose to dominate the formal political
establishment, notwithstanding the dominance of the rural gentry in the informal networks,
which was gradually dented with the advent of land reforms. While native firms dominated
Western India, Bengal and especially Calcutta were dominated by foreign firms. The Bombay
Plan represented the interests of the industrialists from Western India, who sought State
Protection and support for their ambition to spearhead a burgeoning Industrial Sector in the
Indian Economy. Tirthankar Roy has described the framers of the Bombay Plan as part of a
‘Protectionist-Xenophobic’ lobby. The Industrialisation they demanded required Foreign
Exchange, but the foreign firms of Calcutta were ignored by the Planners, who assumed that
the favourable sterling balance would endure into the future and be sufficient for
Industrialisation. The Bombay Plan omitted Commerce and Finance; and was dismissive of
trade and export relations with other countries. This was a continuation of the Logic of
Economic Nationalism, exhibited by the Indian Nationalists during 1880-1905 and beyond,
as documented by Bipan Chandra (Chandra, 1968). The conception of Economic
Decoloniality exhibited by the dominant Conceptual Realm of the Nationalists influenced the
Economic Relations developed by the postcolonial Indian State over the first few decades of
its existence. This is an exceptionally clear case of the link between domestic policy and
foreign policy. It is, therefore, extremely important to analyse the nexus between domestic
ideologies and foreign policy, rather than presume a constancy of “perceived interests” and an
equation between them and the “actual interests” of any state. Foreign policy, therefore, isn’t
exogenous with respect to domestic policies and politics but is an endogenous function of
them. This point was brilliantly made by Jagdish Bhagwati, Anne Krueger, and Bela Balassa,
in the 1970s-80s, who overturned the scholarly consensus on the ideal trade policies of
developing countries, which had become suspicious of the benefits of free trade to developing
countries in the aftermath of the Great Depression, similar to the scepticism exhibited by
Indian Economic Nationalists (Irwin, 2024). The Krueger-Bhagwati-Balassa critique of
protectionist trade policy argued that states did not pursue protectionism through the
rationalist lens of realism. Instead, the duration, form, and domain of protectionism are
endogenous to the politics, political economy, and institutions of the country. The triad
especially focused on currency overvaluation and the negative effective rates of protection for
exporters in the era of Import Substitution Industrialisation ( ISI ). This framework needs to
be further extended, especially with the rhetoric of self-sufficiency ( atmanirbharta ) and the
normative political economy it represents (Modi, 2020). A careful study of the endogenous
determinants of the trade relations nurtured by India with the world at large will help us
understand the different trade policies and bilateral agreements signed by our country in the
recent past, as well as ascertain the rationality ( or irrationality ) of these decisions.

This preliminary insight leads one to explore the potential endogeneity of foreign policy with
respect to another variable: culture. Peter Joachim Katzenstein has extensively explored this
dimension of foreign relations with great success (Katzenstein, 1998). He has especially
focused on the case of Japan and its National Security Policy to understand this linkage. He
has argued that Cultural Norms shape the national security interests and policies of state,
especially through their influence on the identity of the state. Variations or changes in the
state identity, therefore, also affect the national security interests or policies of states. These
configurations of state identities also go on to affect interstate normative structures such as
regimes or security communities. He also points out that State policies reproduce and
reconstruct cultural and institutional structure: something he calls “recursivity”.
(Katzenstein, 1996) This lexicon is extremely useful for understanding the trajectory of
postcolonial Indian Security Policy, and Foreign Policy in general. Several scholars have
argued that there was a shift in 1954 from idealism to realism in terms of the rationale
determining India’s Foreign Policy. Others would date this to Indira Gandhi’s Prime
Ministerial Tenure, while some would date it to an even later period. All these conceptual
shifts result in a set of disjointed frameworks for understanding the trajectory of Indian
Foreign Policy. Instead, the framework of Institutionalism, as argued in favour of by Peter
Katzenstein, offers a more consistent analytical framework. For instance, as mentioned earlier
in this proposal, realism tends to ignore domestic politics or only deals with cursorily insofar
as the functioning of diplomats is concerned. They tend to focus only on the international
balance of power since they take the state as the quanta of analysis. At the same time,
liberalism, such as new institutional economics, focuses on norms and rules that regulate
behaviour, such as how secure institutions promote economic growth. Identities are beyond
their purview. Therefore, identity and behavioural standards contingent on identity are
beyond the purview of the traditional variant of liberalism.

Interests and policy are therefore endogenous with respect to norms, identity, and behaviour.
This is not a framework which posits a distinction between irrational behaviours that are
abetted by cultural specificities on the one hand, and rational behaviours which conform to
the logic and calculus of realism. Instead, it argues that a more coherent framework must take
into account the causative power and inertia of collective identities, norms, and institutions,
which limit the range of choice at any given point in time. The legal regime is one such
institution. Historical narratives drawn upon by political actors are yet another source of
endurance to the otherwise transient nature of everyday politics.

At the same time, it is highly erroneous to label all of Independent India’s political moves in
the Nehruvian Era as being idealistic in nature. Idealism in itself has many connotations in
different contexts. The simplest meaning is an adherence to one’s ideals and values. Those
ideals and values could also be a commitment to martialism, as in the case of the Polis of
Sparta in Ancient Greece. Yet, idealism is generally understood as an adherence to liberal
values in the modern world. In the case of India, the ideal of Ahimsa is often taken to be the
dominant algorithm of political behaviour, due to the influence of Gandhian values in the
Independence Struggle and beyond. A few cases are often cited to substantiate the salience of
idealism in the Nehruvian Era. For instance, the decision of Nehru to refer the issue of
Kashmir to the United Nations has been defended by MK Rasgotra, since the article under
which he referred the dispute to the UN, article 35 ( Chapter VI ), did not oblige us to adhere
to the recommendations made by the Security Council – they would only be
recommendations and not a binding resolution (Rasgotra, 2019). Nehru’s rationale for taking
the Kashmir problem to the United Nations was clear; by raising the issue before Pakistan,
we had the upper hand, instead of being on the defensive. Numerous records testify to how
Nehru had no intent to conduct a plebiscite in reality, while his frustration with the chicanery
of the United States of America and Great Britain as they supported Pakistan has been
copiously documented in his selected works (Noorani, 2013). Clearly, the case of Kashmir
and how it was handled by Independent India does not adhere to Idealism.
There is yet another more glaring deviation from Idealism in the Indian context, and it is to be
found in the Annexation of Goa: “Operation Vijay”. The departure of the Portuguese seemed
natural after the British and the French left India. Yet, the Portuguese maintained that their
“colonies” in India were an integral part of the “metropolis” since they were founded long
before India became Independent. This legal argument is very interesting, yet was
unacceptable to the Indians. The satyagraha of 1955 was violently suppressed by the
Portuguese, killing 20 Indians. This resulted in the imposition of an economic blockade,
under the impression that the Portuguese would gradually decide to leave under international
pressure, which turned out to be negligible. Nehru ended up deciding to free Goa by force,
and the Western media described the entire episode as a case in point of Indian Hypocrisy.
Kennedy told B.K. Nehru that Nehru’s rhetoric of non-violence would fall flat when set
against the backdrop of the Liberation of Goa, but ended up coming to India’s assistance in
the 1962 war with China, though Kennedy’s assistance wasn’t based on any Idealism: it was a
way to keep China in check (Davar, 2017).

There is another issue that has emerged in the literature: the link between identity and policy.
The clearest example in the subcontinent of this is the case of Pakistan. Pakistan has been
identified as “Muslim Zion” by an eminent scholar, similar to how the state of Israel
constructed its national identity (Devji, 2013). In 1987, Zia-ul-Haq, president of Pakistan,
justified his introduction of nizam-e-Mustafa ( rule by the prophet ), a plank of his broader
trend of the Islamisation of Pakistan, with the following quote: "If an Egyptian stops being a
Muslim he is still an Egyptian. If a Turk stops being a Muslim he is still a Turk. But if a
Pakistani stops being a Muslim he becomes an Indian" (Menon, 2021). The veracity of the
story aside, this demonstrates the link between Cultural Norms and the identity of the State,
and how the identity of the State determines national security interests or policies of states.
The security of the Indian Subcontinent must be understood in terms of the identities of the
different states that exist in it. Colonialism has fragmented the political cartography of the
subcontinent and framed the collective identities of the nations corresponding to those states
in conflictual terms. The political elites of the states have further accentuated these conflicts
by institutionalising them, as in the case of Pakistan. Such identities drive otherwise irrational
behaviour, such as Pakistan’s attempt to foster disturbances in Kashmir: behaviour which
wouldn’t make sense if Pakistan was a state seeking peace and stability. The pathological
identitarianism which constitutes the norms and institutions of Pakistan cannot be understood
in realist terms: one must seek cultural explanations. Culture here isn’t something essential to
the people of Pakistan, or any other nation for that matter, but is created through political
mechanisms and actors. Political relations create a perception of the specific historical
contexts within which the polity and society exist and interact with each other. This is
extended to the realm of international relations. Therefore, particular aspects of culture, such
as social and legal norms, which can be empirically tested, can shed light on how political
decisions are made. This is crucial for understanding how “culture” determines outcomes. In
the subcontinent, one can trace these identities and cultural manifestations to colonialism and
the “modernity” it implanted. The postcolonial Indian state has aimed to transcend these by
decolonising its identity and institutions, and it is worthwhile to use this framework to
understand its foreign policy in greater depth.
Definition, Rationale and Scope of the study

As mentioned in the Introduction, the purpose of this study is to investigate the endogeneity
of Indian foreign policy through the lens of decolonisation and decoloniality. This study will
focus on the political economy and cultural normativity of decolonisation. The traditional
definition of Decolonisation limits it merely to political independence. However, in this
study, a holistic definition of Decolonisation, stretching across Economic, Cultural, and
Psychological facets, will be undertaken. Decolonisation is processual, while decoloniality is
a normative worldview. The rationale of the study is as follows: Decolonisation and
decoloniality have been studied in several disciplines of the Social Sciences in a disparate
manner. International Relations is among the most eurocentric disciplines though, owing to
the hegemony of the Global North in international institutions. Incorporating decolonisation
and decoloniality in the analysis will be a valuable contribution to International Relations,
enriching the institutionalist framework, which as such is dominated by the ideals of
Eurocentric liberalism. The literature review points out the impact of colonialism in
structuring the political economy of India in the colonial phase, and how decoloniality
restructured the international political economy of India, institutionalising a dirigiste autarky.
It also points out the role of colonialism in creating identitarian fractures which cause a
deviation from realist rationality on the part of Pakistan, courtesy of the collective identity it
has adopted over the years. An enquiry into other facets of colonialism and its corollary in the
forms of decolonisation and coloniality will enable one to study and uncover various
domestic factors, structural as well as cultural, on which the Indian foreign policy is
contingent. It will enable us to enhance the profundity of our ongoing decolonisation and will
also explicate some of the ambiguities in the trajectory of Indian Foreign Policy over the
years.

Research Question and Hypothesis

The major questions being asked here are:

What linkages may be drawn between the disposition of the Indian State towards the world at
large, and the structural imperatives and ideological narratives of decolonisation? Was the
Independence of India a major point of inflexion in the process of structural and ideological
decolonisation with respect to Foreign Policy? Or was this process more drawn out?

As a major ancillary query, the international political economy of the Indian State will also be
investigated closely. Until 1991, the Indian State was a Dirigiste Regime. 1991 is similarly a
formal point in discontinuity with other structural alignments, such as India’s relations with
Israel. What factors link such seemingly disjointed issues?

The initial hypothesis which may be formulated based on the literature review is that
decolonisation must be understood in processual terms rather than a sudden structural
paradigm shift at the point in time when a formal transfer of power took place. The trajectory
of our political economy and the continuation of colonialist fractures demonstrates the
enduring impact of colonialism. The consequently protracted nature of this process requires
careful and intricate analysis to unearth temporal specificities across the history of our
foreign policy, rather than an unwieldy division of the history of our international relations
into simplistic and monolithic blocs which render all transformations as instantaneous or
sudden processes, datable to a particular point in time, rather than a range in time.

Methodology

The methodology in this study will be mostly qualitative since it is difficult to quantify
institutions and cultural norms. Data will mostly be utilised to reinforce qualitative
judgments. Cross-country regressions as harnessed by James A. Robinson, and Simon
Johnson will be a useful quantitative tool though it will be difficult to come up with apposite
parameters while running these regressions. Assistance from quantitative social scientists will
be required in this respect. Media reports, personal papers of statesmen, electoral data
pertaining to domestic politics, economic data, agreements formulated by the Indian state,
and documents of the United Nations, among others, will be some of the major sources
harnessed in this study. They will provide a fine blend between the domestic and the
international, and the institutional and the cultural.

Tentative Chapterisation

The 1st chapter will be an exposition on the dichotomous paradigms of explanations

generally resorted to: realism and idealism. Their pitfalls need to be expounded upon,
especially by highlighting the inconsistencies and selective applicability of either of them in
the South Asian context.

The 2nd chapter will go on to discuss the institutionalist paradigm, similar to the framework
championed by Peter Joachim Katzenstein, and how it is a holistic and apposite paradigm for
understanding Indian Foreign Policy.

The 3rd chapter will be an exposition on decolonisation and decoloniality in institutional and
cultural terms. The fundamentality of structures which originated during colonialism to South
Asian states needs to be highlighted, to contextualise the limits of the rhetoric of
decolonisation.

The subsequent chapters will analyse the trajectory of Indian Foreign Policy since
Independence based on the methods discussed in the aforementioned chapters. The following
structure may be followed:​
​
Chapter 4 – The Nehruvian Era
Chapter 5 – From Indira to Liberalisation
Chapter 6 – The Foreign Policy of the Coalition Era
Chapter 7 – The 2014 General Elections: A Watershed Moment
Chapter 8 – Indian Foreign Policy in the Age of Multilateralism
Chapter 9 – The Prospects of Transcending Eurocentrism

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Press Edition​

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Submitted By:
Soham Agarwal
Roll No. : 23232724175
4th Semester (2nd year)
Dept of Political Science North Campus (University of Delhi)