India, today, finds herself in a sundry of diplomatic paradoxes, marked by multi-alignment and diverging stands on issues such as Israel-Palestine. The inconsistencies in our foreign policy have been cleverly brushed off under the term ‘strategic autonomy’—perpetually undefined and unboxed. Of course, as the world’s most promising emerging market with a labour surplus and the fourth largest economy, India is certainly eyeing an ambitious spot in geopolitical happenings, but the road to ‘Viksit Bharat @ 2047’ is going to take more than just abstaining from UN votes and banking on our vibrant diaspora.
The need of the hour is for India to capitalize on what it does best and catapult it into the international landscape—digital connectivity. From an initial modest transaction rate of 2.65 million annually (2016) to now processing 18 billion transactions every month, the UPI success story is a stellar page from India’s book. What was once seen as a payment limited to the tech-savvy and financially literate masses, has become a means of transaction even for the street vendors and rickshaw drivers—economically integrating an otherwise scattered population.
Other digital public infrastructure (DPI) that have penetrated across the masses include the likes of DigiLocker, DigiYatra and AarogyaSetu—making the once long and cumbersome procedures now seamless and paperless. In the private domain, the rise of quick commerce and aggregator giants such as Zomato, Swiggy, and Ola-Uber have digitalized the nation. Much of this rests on India’s steady net of the services sector (contributing 54.93% to the GDP) and a vast reserve of promising human capital in the form of software engineers and computer scientists.
Just as power is conceptualized among the binaries of hard vs soft, connectivity too can be understood through the dichotomy of physical vs digital. India stands to gain immensely in this domain, considering that we live in the era of big tech, or as economists would proclaim “the fourth Industrial Revolution”. While policy ideas nudging this development are already underway, there is a need to expand and fasten them, should we wish to lead in this domain.
What we witness, instead, is a bundle of policy mis-priorities. In order to catch up with China’s expanding Belt and Road Initiative (BRI), India has launched a number of ambitious projects, ranging from the International North South Transport Corridor (INSTC) to the India- Middle East Europe Economic Corridor (IMEEC), all of which are yet to see the light of day, further entrapped into risk, owing to political instabilities and war after effects in particular regions.
India must acknowledge that the growth of BRI is driven by China’s capabilities in quality infrastructure and timely implementation and delivery of projects, both of which our country lacks within the domestic realm itself, at least in comparison to China. To imitate China on this front will lead to nothing more than stagnant initiatives, fiscal wastage, and reduced reliability as a bi/multilateral partner.
With countries such as Sri Lanka and Zambia bearing the mounting debts resulting from China’s cheque-book diplomacy, it is not realistic to expect countries from the Global South to be thrilled about agreeing to cross-border connectivity projects even if they come from a lesser belligerent nation such as India.
In order to not become the crow who stuck peacock feathers on itself from Aesop’s Fables, India must leverage its DPI beyond the fence of its territory. First and foremost, we can begin by exporting it to underserved regions such as Africa, Latin America and lesser developed pockets of Asia. This should not be hard to scale, considering that India already has UPI agreements signed with the likes of Singapore, UAE, and Sri Lanka. This would position India as a digital “enabler” rather than lender.
Secondly, when it comes to the question of multi-lateral projects, India can broker a win-win situation by proposing models such as ‘Digital Quad’—where it can benefit from the sophisticated technology of developed countries, provide an open data technological alternative to Chinese ‘Digital Silk Road’, and also generate more employment in the IT, finance and telecom sectors.
These initiatives can take the form of a multi-lateral UPI-like mechanism that allow for instant payments across countries through Memorandums of Understanding (MoUs), which would ease tourism by reducing need for foreign exchange currency, also adding a component of sustainability as a positive externality, by reducing usage of paper money.
It would also break patterns of hegemony and help the world move towards a more just and equitable multipolar world order, as the SWIFT system, which maintains the dollar stronghold, could become more open to other currencies initially at a small scale with preferred trade partners of India in this regard. Gradually, with the growth of de-dollarized instant payments, currencies of the third world would see an appreciation in their market exchange rates.
Thirdly, diplomatic DPI must present itself with a compelling narrative. In contrast to China’s BRI which is criticized for fostering debt-trap and its opaque nature in general, DPI can strengthen India’s international credentials not as a threat, but rather a vishwamitra and vishwaguru—aligning with the image it had in its infancy owing to the Non-Aligned Movement (NAM) and Gandhian-Buddhist ideals. Rather than data sovereignty, India can power the discourse on data democracy.
Before this can be set into motion, there are challenges that must be addressed and resolved. The most important one is for data representation—as the system being shared must be able to adapt to the needs and context of the country it is being launched in, else it becomes a project “by India, for India”. Next, India must focus on continuously upgrading and strengthening its cyber safety in order to prevent data breaches and earn global trust, there must not be an AIIMS or AADHAR 2.0.
There is also a need to focus on knowledge sharing and capacity building, wherein Indian developers and regulators can train and help in the adoption of these technologies to partner countries. This would also need India to have a strong financing mechanism similar to China’s EXIM Bank and Asian Infrastructure and Investment Bank (AIIB), which pours out funds for BRI.
To address this finance gap, India can join hands with the private sector—both local and global. Domestic firms such as National Payments Corporation of India (NCPI), PhonePe, and Razorpay can tie up with international counterparts like Mastercard, Google, and Amazon Web Services, to provide funds for this project. This would also result in the positive externality of increased people to people (P2P) and business to business (B2B) communication and engagement, which is nothing but an informal channel of diplomacy.
When it comes to the world of codes, data, and technology, the possibilities are endless. India must not surrender to the euphemistic looking Achilles heel that is infrastructure and physical connectivity, when it can very well utilize its Midas touch in the domain of services—transforming information technology into international technology. It is high time to hyphenate data, democracy and diplomacy.
