INTRODUCTION 

India is not only a country which is locating in the southern part of Asia but a country that holds an extremely good position in geopolitics in the international world. India holds 17.7% global population in itself. She is the 7th largest and 2nd biggest nation in the world in area wise and population wise respectively. She is the largest democratic nation in the world. Now, in the current era, any nation is considered powerful in terms of its economic status and GDP. India stands 5th among the greatest economic powers in the world. To make the nation economically powerful, the country is supposed to have a sort of great diplomacy of the classic level on the international platform. But before drowning in the phenomena like Economic Diplomacy we need to understand what are economics and the difference between economics and economy. Economics is about the system of production, distribution, and consumption of goods and services within a territorial boundary whereas the study of the principles and theories of economics is called economy or the study of economics is called economy. Economy or the business is that subject on which most countries are conflicting with each other and making a plans to make it more resilient. We have some examples before us which shows that if you don't have a strong or a good enough economy in your country then you will have to suffer from the various aspects you'll be helpless to do anything and if you have a good economy then you can fight or put your point on every front with a strong influence at the international level. Nowadays, money is everything. All the conspiracies in the Western world are being done to sell their products in the market of African and Asia countries so that they can earn a huge amount of money the reason behind this is that most of the countries of Europe are capitalist countries. Their economy is running on private Enterprises and if we talk about America. It is a prime example of a capitalist country. Asia and Africa are the two continents that are the major client of America and some of the European countries for procuring weapons and missiles and all the types of equipment related to warfare so it is always the effort of America to make the situation in the world in such a way that the countries keep procuring types of equipment related to warfare for it. Although Russia is a communist nation(statehood control on the economy) it is also evolving in the procurement of weapons against the competition of the USA; due to ideological changes between both of them. For doing all of these things there is one extremely important term that is called diplomacy of economics or economic diplomacy. Let's try to understand what this term tries to express. 

WHAT IS ECONOMIC DIPLOMACY? 

It is the tool of the foreign policy of any country to deal with the economic interest of the nation. 

It covers the economic policies both inside and outside the country. The term 'Diplomacy' is used because of the official representatives who are IFS officers and are called the Diplomats to handle foreign matters. It is done to influence the policy and regulatory decisions of foreign governments as well as those of international organizations. It's been now said that economic diplomacy has become the core part of foreign policy of India. S Swaminathan, the former Indian envoy to Iceland and Brazil, said on the importance of economic diplomacy in these words, "Moving from engaging merely in trade diplomacy, economic diplomacy today is looking at new dimensions of attracting investments and technology through new projects in India. For example, Skills India, Make in India, Digital India, and Smart City. For successful execution, such projects have an external element in the form of a foreign partner, FDI, or technology transfer." 

OBJECTIVES OF ECONOMIC DIPLOMACY 

There are certain objectives of the economy of a country to fulfill that some diplomacy is played by the diplomats: 

• Establish the country as a major economic power
• Securing favourable multilateral trade negotiations
• Increase the reach to foreign resources and 
• Promotion of foreign investments in the country
• Promotion of exports and businesses abroad.
• The realization of political objectives through economic actions. 

EVOLUTION OF INDIAN ECONOMIC DIPLOMACY SINCE INDEPENDENCE

When India got independence on 15th August 1947 its economic condition was extremely deplorable. As it is said that at that time not even a single item was produced and manufactured in India and most of the items were bought from foreign nations. There was not even a condition in which India could generate enough amount of cereals or grains to fill the belly of Indian citizens. There were so many problems like poverty, illiteracy, unemployment, Zamindari Abolition, Rehabilitation of refugees, maintaining cordial relations between followers of different religions, building the economy, and providing services to the people. As far as it is concerned with the Businessmen there were very few who were holding the good capacity to produce and earn money. 

To understand, the dynamics of Indian economic diplomacy we can broadly categorize Indian diplomacy in two parts one part will be delineating economic diplomacy from the mid of 20th century till its end as well as it will also incorporate the first decade of the 21st century which dealt with the model of assistance and cooperation.  

The second part starts with the 2nd decade of the 21st century and deals with the intent of India to set its own rules of the trend following its interest. 

Let's try to understand the previous as well as the new trends of Indian economic diplomacy:

• The 1950s - 1970s: Economic diplomacy focused on securing and providing Overseas development assistance (ODA) to countries in Africa and Asia. 
• The 1980s: Some reforms were launched in the economy. Opened the economy for the world in the IT sector which proliferates India in the global economy. 
• The 1990s: LPG reforms were done on the recommendation of WTO and IMF, which brought immense change in the Indian economy. Indian concretely moved towards ODA. 
• The 2010s: India started the second phase of a line of credit (LOC) for funding critical projects in partner countries, began greater diaspora engagement, and sub-national economic diplomacy, demand for reforms of WTO. 
• The 2020s: In this decade, efforts have been made to make India Atmanirbhar Bharat. That's why she is actively engaged in pursuing market access and contesting non-tariff barriers, ensuring energy security, and also leveraging medical diplomacy, enhancing ODAS. 

CURRENT TRENDS IN THE GLOBAL REGIONS 

It has always been foreign policy of India that works according to the interest of the people as well as the nation, not under the pressure of any side of the superpower of the world like America and Russia. In the present time, as per the geopolitics world, India has some satisfying relations with the different corners of the world which are briefly mentioned below: 

• Indian Ocean Region(IOR): Indian Ocean is a very important water body for India because it not only protects her from hostile countries but maximum trade done through this path. It is an important source of marine economy. 95% of India’s trade by volume and 68% of its trade by value comes via the Indian Ocean. 
• Indo-Pacific Region: This region is responsible for 62% of the world GDP and more than 50% of trade takes place through waters. Strategic competition over the next several decades will be dominated by the maritime and blue economies.
• Central Asia: These countries are rich sources of gold, uranium, gas, etc. This region is laden with Hydroelectric resources which are good to counter China. 
• Gulf Countries: India’s over 50% of oil needs are fulfilled by gulf nations. Energy and Renewables, Water Conservation, Food Security, and Digitisation are the emerging areas of cooperation.
• European Union: The European Union sees it as the strongest option before China for protecting its interest in IOR. In some other respects as well like Civil nuclear cooperation, 5G, AI, education, and climate change are the emerging areas of cooperation. 
• African Countries: African Countries are the source of rich minerals to counter a country like China. No threat to IOR. Investment chance due to the growth of middle-class strata in society. 

UNDERLYING TOOLS OF ECONOMIC DIPLOMACY AND ITS RATIONALITY 

There are certain ways through which India tries to implement economic diplomacy and some of them are as follows: 

1. Availability of finances for partner countries: Financial help to partner countries which will have two major impacts first is that it increases the credibility as a helping nation. It will increase the political influence and constituencies.  e.g. China's influence is increasing with the assistance of neighboring countries for the developmental projects of Pakistan and Nepal. 
2.  Enforcement through Multi-lateral organization: The ability to make the rules of the multilateral organizations in such a way that it forms the rules and regulations which formally is for everyone but indirectly provide leverage to it. e.g. WTO and UNSC had been established by the countries like the USA, the UK, and the erstwhile USSR which are developed countries. Thus, these functionaries are more favourable to them. 
3. Captivating foreign investment and increasing export: It assists the country to attract foreign investment in the form of the establishment of the company or establishing the manufacturing centers of the companies in the country instead of the same country getting a strong voice in geopolitics. e.g. Due to the economic reforms in China in the late 1970s helped China to become a global economic power. These reforms are included in it:
   - China is a communist nation despite that she went against the concept of State ownership and gave relaxation on some prices.
   - Liberalizing foreign trade and investment.
   - Promoted the establishment of rural enterprises and private businesses.
   - Investment in some growing Enterprises like a solar panels. 
4. Economic Sanctions: When due to some specific reasons which may be in the favour of one nation or all the nations economic restrictions are applied on any nation that is called economic sanctions. And the reasons may be counterterrorism, non-proliferation, democracy and human rights promotion, conflict resolution, etc. 

SUCCESS OF INDIA’S ECONOMIC DIPLOMACY IN PURSUANCE OF GLOBAL ASPIRATIONS

Let's see the extent of the success of Indian economic diplomacy by using above mentioned key instruments in the pursuance of its global aspirations in the following manner: 

1. Availability of finances for the partner:

Since independence India has been of helping nature towards the Global South-South Cooperation. This help can be seen in two ways, first is Multi-lateral Organisation and second is Bilateral Development Aid. 

(i) Through Multi-lateral Organisations

• India-UN Development Fund:  The fund of $150 million was established by India to assist developing nations in some critical areas such as climate resilience, financial sustainability, gender equality, renewable energy, etc
• United Nations Framework Convention on Climate Change (UNFCCC): India has played a key role in raising the point for the ‘Loss and Damage’ fund at CoP 27. The fund should be provided by the developed nations to developing nations to cope with the issue of climate change for Finance structure rebuilding and economic recovery. 
• International Solar Alliance(ISA): The main purpose of this alliance is an arrangement of solar generation, storage, and technologies for future generations for member countries’ needs by mobilizing over $ 1000 billion by 2030.

(ii) Through Bilateral Development Aid:

Since independence, India has been assisting other nations, and as soon as the economic condition of India improved, she increased her scale to help people. 

• India administered around US$8.35 billion as grants and loans under various development compacts from 2008 to 2020. 
• The concessional loans or lines of credit (LoCs), have more than doubled in the past five years from $11 billion in 2013-14 to around $30 billion in 2018-19. 
• The countries like Bangladesh, Nepal, and Myanmar are the biggest assistance recipient in Asia. Bangladesh holds US$2 billion for the procurement of rolling stock, equipment of buses and trucks, and US$2 billion for the establishment of IT/Hi-tech parks in 12 districts.
• Nepal holds US$250 million for the 132 KV Solu Corridor Transmission line and US$350 million for the Rahughat Hydroelectric project.
• Myanmar holds US$199 million for 16 irrigation projects and US$86 million for the procurement of rolling stock and equipment.
•  Africa is also not untouched from the assistance of India’s assistance in the works like sanitation/ sewerage works, Drinking water, Construction of hydropower plants and power transmission lines, Solar electrification under the International Solar Alliance, Information technology parks, Agriculture projects (Tanzania Mozambique, Swaziland, Cameroon, Niger)

2. Mobilising recourse for rulemaking:

The role of India in the last 1½ decade has become very crucial from the point of view of leadership for coalition building among like-minded developing countries to protect the shared interest on trade, climate change, and development policy. A few instances are given below: 

(i) World Trade Organisation(WTO):

There are some issues with which India doesn't have similar thoughts with WTO. Despite that India played an important role in it like

• India played a grave role at the beginning of the ‘peace clause’ on public stockholding at the Bali Ministerial Conference in 2013.
• India along with South Africa successfully secured wavering IPR provisions for COVID-19 so that the poor countries that can't procure vaccines, could get access to the vaccines as well. 

(ii) Ask for equity at UFCCC:

India played a pivotal role in climate negotiations. She has been pleading for the Principles of equity, and Common But Differentiated Responsibilities (CBDR) and respective capabilities.

• At CoP 26, India emphasized a point  "Climate Justice for Climate change" for environmental safety and saying that the idea of zero-emission till 2050 of developed nations gives a burden to the developing nations instead of holding by themselves. 
• The formula of LIFE - Lifestyle for Environmentwas also shared for making it a mass movement Environment Conscious Lifestyles.

(iii) Rectifications in UNSC:

Along with G4 nations(Germany, Japan, and Brazil) it has been the words of India that some reforms are needed in the general council in accordance to  make the organization more representative, legitimate, efficient, and transparent. Proposals also contain regarding the extension of the permanent and non-permanent membership of the UN. A way of better representation of African and Island countries. 

(iv) World Health Organisation(WTO):

During the time of Covid-19 India presented nine point reforms agenda to the UN under ‘Approach on WHO Reforms’ related to issues like funding mechanisms, criteria to declare Public Health 

The emergency of International Concern etc.

(v) Sustainable Development Goals(SDGs): 

India was elected to act on the Opening working group for drafting the agenda. It is accepted as the leader of the G77 group and reflects the shared interest of developing nations in the document which has glimpsed in the form of these provisions: 

• Formation of specific indicators and national reviews on the progress of achieving the SDGs.
• Peace and stability in the Reference of the development agenda. 

3. Captivating foreign investment and increment in export:

India left no stone unturned to increase the economy's competitiveness on a global scale. Captivating foreign direct investment (FDI) by liberalizing the economy by providing a place where investment can be done easily through Goods and Services Tax(GST), Production Linked Initiatives in various sectors, Make in India initiative, Atmanirbhar Bharat Abhiyan, etc. The Atmanirbhar Bharat campaign is an effort to help the country to achieve self-reliance. There are 5 pillars of Self-reliant India -- Economy, Infrastructure, System, Demography, and Demand.

And some possible results were visible due to this like India's merchandise exports have crossed $ 400 billion for the first time. In 2020-21, the FDI inflow was USD 81.97 which was at its highest level in India. 

4. Economic Sanctions:

India complies with the restrictions imposed by the UN but along with that, rarely imposed unilateral (autonomously) restrictions on the countries such as the Apartheid regime of South Africa, no more trade relations from 1989 to 1999 for discrimination with Indian workers. Lately, India snatched the entitlement of Most Favoured Nations(MFN) in 2019 against the terrorist assault in Kashmir. Banned 100 Chinese apps in 2021 against its expansionist policies in the Indian territory. At the same time, India rejected the unilateral restrictions of other countries to uphold its strategic autonomy. For instance: 

• Despite the pressure of G7 nations to stop trading oil from Russia, due to the ongoing war between Russia and Ukraine, India kept doing that for the cheap sale of oil. 
• India purchased the S-400 missile system from Russia despite the reluctance of the USA. 
• Despite the reluctance of the USA, India maintained its relationship with Iran at Charbahar port because of its strategic importance to give humanitarian support to Afghanistan. 

CHALLENGES IN PURSUANCE OF ECONOMIC DIPLOMACY OF INDIA 

1. Lack of concrete support at multilateral Platforms: India is not able to gather enough support from the countries to tackle the issue of public stockholding of grains and the second point is that there is a demand for India to review the moratorium of WTO on custom duties on electric transmissions. As per the report of 'The UN Conference on Trade and Development report', a loss of around 10 billion dollars per annum globally and 95% of its loss is undertaken by developing countries. 
2. No synchronization between different aspects: India is not actively participating in any developmental goals such as food security, health security, green energy, and education for all. There is no clear synchronization for developmental goals and thus the ineffective impact is visible. 
3. Aid confined to Asiatic nations: Most of the assistance which is provided by India is for its neighboring countries and owing to that African nations are neglected. But there are some reasons for it likes to curb the Chinese domination in the Indian Ocean Region and the scarcity of resources. 
4. Compartmentalized Bureaucratic Structure: It has been seen a gap in coordination and communication between various ministries and departments. There is a lack of adequate engagement between the government and businesses, and capacity constraints persist. This influences the integration of economic and strategic goals. 
5. Low position in Global Value Chain: Currently, there is a declining share of India in GVC. Although the overall export growth has increased constant fall in merchandise growth is seen. India is near to being called the 'Factory of Asia' but less in GVC as compared to other nations like Bangladesh and Vietnam etc. 

Some factors are responsible for the low GVC performance of India in the following manner:

• Stagnant growth and financial hindrances in the manufacturing sector.
• The cost of logistics in India is triple of China and double of Bangladesh. 
• Lower ability to attract foreign direct investment (FDI). 
• Falling export competitiveness in labor-intensive sectors like textiles and clothing, gems and jewelry, and leather and leather products. 

5. Unsatisfying execution of development project:

Execution of the plan is the major work after making the plan and which is not good in LOCs, and project record completion. 

6. Tussle with Chinese dominance:

There are some underlying concerns about India's competition against China in the South Asian region like its economic dominance, border frictions, and countering China’s presence in the Indo-Pacific to safeguard energy and resource corridors. Experts have deemed that it is not possible to secede from China in terms of economic dependency because India imports a large number of products. So India tries to find a balancing situation between relations with China. 

7. Lately landed Problematic Issues:

• Weakening of Multi-lateral institutions: Developed nations like the USA and the UK are drawing back their support by showing their unwillingness to Multi-lateral organizations like WTO. e.g. The Appellate body of the WTO has now become non-functional due to the obstacle of appointment of new members to it by the US.
• Protectionism: The consequences of globalization are now under the reach of question, which has thoroughly allowed the free movement of people, goods, services, and capital, and brought the world closer. As this has started the debate of decoupling, economic sovereignty, self-reliance, preference for bilateral agreements to multilateral rules, and also anti-immigration sentiment. 
• Humanitarian Crisis: The impact of Covid-19 is so rigorous that it has devastated the economy of almost all the major or minor countries of the world. And sustainable development goals have reached the same point from where they started way back of few decades with collateral damage to education, health, and nutrition. 
• Emerging technologies: The Fourth Industrial Revolution is a golden opportunity for India to reshape the economy of India with thus assistance of glorious economic diplomacy. 

RECTIFICATION IN ECONOMIC DIPLOMACY TO ACHIEVE NATIONAL AND GLOBAL ASPIRATIONS 

As you all know that after the impact of Covid-19 on the economy of most countries of the world. It is a challenge before all countries to tackle all those challenges which have been created by the impact of covid-19. And as far as it is concerned with India, it needs to have some changes in its economic diplomacy so that it can achieve objectives which is essential for the growth of the nation and its people. At the international level, the expressions of India from the world are really big and there is no doubt in it that in the subsequent decades, India is going to be the global star by surpassing all the ahead in greater economies of the world. Let's have some alternative solutions in the economy:

1. Promotion of 'Brand India':

India is supposed to make Indian brands quite popular in the world so that its demand can increase and its supply can be done rigorously. There may be some possible ways to do that: 

• Low-cost renewable energy opportunities to secure energy safely and a step towards zero emission. 
• Services as a 'global public good'
• Human resource is the most essential part of the success of any organization for leading a Fourth Industrial Revolution
• Vaccines and cheap medicines and easy availability. 
• India's Soft Power, diversity, and democracy may be a nice factor in this direction to show the world. 
• Sustainable development solutions can disclose the reality of the world. 

2. Flexibilities in policy-making:

The competition has increased in the world at the level where India needs to bring some improvement and improvisation in its policies to tackle some awkward situations to retain its interest.  e.g. India has to bear high tariff rates like countries like the UK but at the same time, the countries who are competing with India and are almost working at the same level have to bear zero tariffs. As a consequence of this, the export of India suffers great challenges in the market. 

The above-mentioned situation can be handled by establishing factories in countries that have  FTAs in these lucrative markets. Thus, when it comes to export promotion, “Make In India”  should also incorporate “Make With India”.

3. Change aid programme:

India has a great population that's why it is lacking resources to aid the partner nations. So it should look for some other ways to help: 

• A helping strategy should be made and identify a few areas like health security, climate change adaptation, gender equality, etc where it can provide close cooperation. 
• • Establish International Development Cooperation Agency for deeper and more effective engagement and address the rapidly-evolving competitive development financing landscape.
• • Uphold the private sector investments to complement the sovereign development fund and to provide greater flexibility and bandwidth.
•  There should be a great collaboration between the government and third parties such as NGOs, Civil Society, Indian Diaspora to implement development projects in partner countries at low costs. For example, Pratham and Barefoot College are playing a significant role in Africa.

 4. Emerging opportunities: 

• Health diplomacy: WHO established a Global Center for Traditional Medicine in Gujarat India to make a coalition of like-minded constituents for negotiations at the WHO. However, the outcomes of global health strategies are tied to the national context. Therefore to show better performance of India at the global level, India needs to perform well. 
• Domain experts for the digital sector: Tech expert Nandan Nilekani was made the Chairman of the Unique Identification Authority of India(UIDAI) for the implementation of Aadhaar successfully. The same model should also be used at multilateral institutions on issues like cybersecurity, data privacy, etc.
• Minilateral organizations: India should also be taking participation in multilateral organizations to create a good impact such as the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and the Mekong–Ganga Cooperation (MGC) to build support at multilateral platforms like WTO and UNSC. 
• Emphasize the Blue Economy: There should be a dedicated Ministry, which will be covering the components of a blue economy, including security, maritime budgetary allocation, naval acquisitions, maritime trade, energy needs, etc. under a single body resulting in improved policy-making and execution.

5. The GVC Export Ladder: 

Effective implementation of the National Master Plan (NMP) under PM Gati Shakti for Multi-modal Connectivity and National Infrastructure Pipeline (NIP) is needed as they would: 

• Provide ease of doing business. 
• Bring improvement related to trade logistics and address infrastructural challenges.
• Last-mile connectivity to enlarge GVC linkages.

6. Domestic Reforms: 

Without bringing reforms in the internal economy of the country, a cannot think about to progress in the external reforms. How India chooses to engage with the world will primarily depend on:

• India needs to build a new narrative around its strengths and offerings, 
• It is supposed to build new aspects of growth and productivity (like its pharmaceuticals, automotive, and telecom sectors), 
• It needs to improve the ability to engage at granular and macro levels.

7. Long-term Economic Diplomacy: 

India has good relations with its partner nations and to bring increment to provide strength, India must figure out a long-term economic diplomacy policy that aims to: 

• Settle down relations with neighboring countries. Respond to China’s bellicosity in the Indo-Pacific.
• Promote linkages on the Eurasian continent.
• Proliferate cooperation with major or rising economies.
• Defend and develop Indian strategic interests in both ways, land, and water.

CONCLUSION:

When India got independence at that time the economic condition was extremely deplorable and India was not having even the ability to fully stomach citizens. All around resources were scarce despite the well-planned administration of the then government of Pandit Nehru handled the situation in such a manner that his government followed a policy, which was neither entirely towards capitalism nor towards socialism or communism. His government followed a mixed policy where there was a place for both public and private enterprises. During that time India's economic diplomacy was largely based on international cooperation, solidarity with existing associations at the international level, and partnerships but now the country should be looking for a balance between competitive cooperation, those aspirations which are achievable, regional and global level. To do that India needs to implement extremely good economic policies in India itself because that will provide a chance for businessmen and businesswomen to grow rapidly all over the world and establish "India as a brand."

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References:

• www.visionias.com
• Orfonline.org