India and the New "Asian" Balance of Power

Dr. Deepa M. Ollapally, Fellow,NIAS



For over half a century, the architecture of the balance of power in Asia has been determined to a great extent by actors outside Asia. All the way from South-West Asia (Afghanistan/Iran) to North-East Asia (North and South Korea), countries in the region looked, or were forced to look, at external powers in pursuing their own security. To that extent, the Asian countries with the exception of China, have been objects, rather than subjects in the international system.

The Indian experience typifies this. Along with key countries in Asia such as Indonesia, India tried to craft an independent non-aligned movement which would steer clear of great power or superpower politics, but ended up frustrated in the project. While non-alignment existed nominally and did have a certain symbolic significance, there can be little doubt that these countries' fates were still intertwined with a larger power struggle.

Thus, Indonesia became strongly tied to US security structures, along with a number of its South-East Asian neighbours. This was to balance the rise of Communist China and Communist South-East Asian countries, such as North Vietnam, Cambodia, Laos, seen as forming another Asian bloc. Despite Jawaharlal Nehru's desire to keep the Cold War away from India's doorstep, precisely the opposite occurred. Pakistan attempted to redress the natural balance of power in South Asia, which favoured India, by "borrowing" power from the United States. Nehru resisted responding in kind, but after the 1962 debacle with China, India relied less on non-alignment and began cultivating ties with the erstwhile Soviet Union.

Over time, India has had to learn to live with the vicissitudes inevitable in international alignments, with each state pursuing its self- interest. In 1971, India received a rude shock when Kissinger's secret diplomacy with the Chinese, facilitated in part by Pakistan, became public. India then faced the sudden realignment of its strategic neighbourhood and the bleak prospect of a China-US-Pakistan triangle. In 1980, India had a renewed challenge from the Afghanistan crisis and the Soviet intervention, followed by American recruitment of Pakistan in its anti-Soviet military build-up. This vitiated once again India's natural predominance, particularly after the break up of Pakistan which India could have enjoyed if there was no outside involvement. The greatest shock of all was the collapse of the Soviet Union by 1991, thereby undermining the central plank of the Indian security policy of the last 25 years.

Now in the post-Cold War period, there are a number of trends underway, both militarily and politically, which suggest that a more genuine Asian balance of power, created and maintained by states within Asia, could be in the making. But as in the past, it is ironically US-Russian policies which are in part contributing to this possible eventuality, which is complemented by changes within Asia itself. What seems to be emerging is an interactive process driven by three main forces, i.e., US-Russian arms sales competition; the changes occurring in global defence industrialism; and the changing political equations in the region. This article discusses these trends with particular emphasis on implications for India and its role in Asia.

The Post-Cold War US-Russian Arms Competition

With the end of the Cold War, there were expectations that the competitive arming of regional associates of the US and the erstwhile Soviet Union would cease. Global defence spending did fall sharply after the end of the Cold War, with arms spending declining in the 1990s by 50 per cent from the 1980s. Still, according to Pentagon studies on trends in global arms trade for the 1990s, it amounts to nearly $300 billion which is substantial.1 In this market, the US has been the clear winner, mostly related to the virtual collapse of the USSR in the arms market after 1989 when it went from having a 32 per cent share to a mere 8 per cent in 1994. For the same period, US share of the world's arms market jumped from 29 per cent to 47 per cent and reached a high of 70 per cent in 1996. But desperate for hard currency, Russia is making a bid to revive its arms sales and most recently, its transfers are picking up.

Prior to his election in 1991, Clinton had explicitly promised restraint on arms exports and had criticised the previous Administration for lack of restraint. But once in office, he took a very different approach and the gap between his efforts to stem nuclear proliferation and his efforts to limit the spread of conventional weaponry is striking. In 1995, the Clinton Administration issued a long awaited Presidential Directive (PDD-34) on a review of US arms exports policy from the White House. The defence industry reacted by hailing it as the most positive statement on defence trade that had been enunciated by any President thus far.2

Although defence expenditures globally have been on the decline, the Asian region has been a critical exception. In the 1990s, the Asian share of world military expenditure doubled from the previous decade. The arms imports to the region are rising faster than anywhere else in the world, and it is one of the key markets for advanced weapons systems. South-East Asia alone spent approximately $9 billion on arms purchases in 1995 which represented 22 per cent of world sales. This would make South-East Asia the third largest weapons market, only after the US and Europe, overtaking the Middle East.

The weapons being imported are increasing in sophistication, in part driven by US-Russian competition. The Russian entry into the Asian markets could become much more pronounced than during the Cold War, in which transfers to countries outside its allies and associates were hampered by Cold War politics. Indeed, there is some evidence that although the US and Russia have stemmed their nuclear arms race, they could become locked in a conventional arms sales race focussed particularly on South-East Asia.

A case in point is the US approval in 1997 of the sale of the Advanced Medium Range Air-to-Air Missile (AMRAAM), although Clinton Administration officials had rejected it earlier. Until then, the State Department had prevailed with the view that the sale of the highly sophisticated air-to-air missiles which allow a jet pilot to shoot down an unseen plane as far away as 48 km would introduce a new capability into the region, and trigger an arms race. It had been one of the most effective weapons for the US-led alliance in the Gulf War and was reserved only for transfers to the North Atlantic Treaty Organisation (NATO) allies.3

The US change in policy resulted from the Thai government's linkage of the sale of AMRAAMs to its purchase of US made F-18 fighter jets, a pending deal worth nearly $600 million. Thailand also suggested that it would consider the alternative of Russian MiG-29, which is capable of carrying a similar missile. Having passed a previous threshold, the US is likely to get further requests for the AMRAAMs, most probably from other South-East Asian countries

Russian military cooperation with China is fast increasing with the latter's plans to reequip its armed forces finding a strongly receptive Russian military-industrial complex facing inadequate orders. Arms trade with China accounts for nearly 40 per cent of Russia's defence exports currently, with much of the contents remaining secret. According to US experts, there are possible indications of transfers such as cruise missile warfare capabilities, exchanges of nuclear propulsion technology for submarines and Backfire bombers.4

Military Industrialism in Asia

As in arms imports, the Asian region is an exception from the point of view of defence industrialism. The so-called revolution in military affairs (RMA) is forcing out many would be contenders due to the spiralling costs of R&D and the inability to keep up with technological changes. For example, in the field of semi-conductors, each new process calls for investment of the order of $ one billion.5

Unlike the earlier faltering experiments of Brazil and South Africa for example, prospects for the growing Asian countries to develop indigenous defence industries are much stronger. In this "second wave" of regional defence industrialism, the countries in Asia are also well positioned in the existing buyer's market to gain concessions from outside defence manufacturers, especially on technology transfer and collaboration.

Many Asian defence companies have workforces with high skill levels and the aim of the companies is to match these skills with technology, quality control and management strategies from collaboration with foreign defence companies. Asian countries are already producing a range of defence equipment from micro-circuits to radars, components to complete aircraft, ammunition to tanks, petrol vessels to submarines.6 The willingness of Western companies to participate at an advanced technical level may be gleaned from what is currently being offered. For example, GEC-Marconi has invited an Asian country to collaborate on a new fighter radar, which is on the cutting edge of high technology avionics.

A number of large and smaller Asian powers are devoting substantial resources to military industrialisation. Apart from Japan and China, other countries such as Indonesia, Taiwan South Korea, Thailand, Malaysia and Singapore are enhancing their production capabilities.7 To join the big league of producers, countries will need to achieve economies of scale through the ability to export at some point. In the beginning, it could be limited to inter-regional trading success. Here, Japan's role will be crucial given that it has the region's most powerful indigenous defence industry in terms of capabilities and sophistication.

Japan is currently prohibited from exporting defence equipment even though it could offer attractive items including the FS-X and F-1 fighter jets, advanced attack and scout helicopters, submarines and missiles. Currently, costs are high without economies of scale. Due to a declining domestic market, companies such as Kawasaki, Mitsubishi, IHI and Fuji are urging the Japanese government to loosen restrictions, at least for joint ventures.8 While the call for dramatic revisions to the 30-year ban have been made in private since 1994 by industrialists, defence leaders and important members of the Diet, the ruling Liberal Democratic Party went public in April 1997.9 If this were to happen, the impact on the emerging regional defence industries could be significant. The Japanese defence industry is structured in such a way that arms makers are incorporated within large companies whose main business is civilian goods. Potentially, these factories could be converted to produce weapons.

Japan's potential nuclear weapon capability is considerable and needs to be taken into account. Indeed, Japan's commitment to a "plutonium economy" based on its concerns for energy security has resulted in Japan possessing already more than 5 tons of separated plutonium, with a potential of 80 to 85 tons by 2010 through reprocessing.10 The possession of 10 kg of plutonium or more is usually cited as concern for proliferation. High level Japanese officials have maintained since the 1960s that Japan's scientific and industrial level is fully up to producing nuclear weapons should it become necessary.

China, with the third largest defence industry in the world, is now destined for a greater global strategic presence, in large part due to its growing economy and trade surpluses. It is capable of producing a full range of conventional weapons including tanks, artillery, aircraft, missiles, surface ships and submarines. But China still suffers from a variety of deficiencies including lack of technology upgrading and bureaucratic hindrances. For example, China has yet to develop a fighter jet despite assistance from Russia, Israel and the West. It has no aircraft carrier nor mid-air refuelling tanker aircraft, important for projecting power away from the home territory. Since 1985, China has undertaken a programme to upgrade its technological sophistication in the military and despite the lack of transparency in Chinese defence spending, according to its own figures, it has gone up by 125 percent since 1991.11

The lesson from the Gulf War on the critical use of high technology weaponry has not been lost on the Chinese. A 1997 Pentagon publication details the Chinese intention to shift from a low technology, personnel intensive war to high technology warfare. According to the report, the Chinese seek to acquire or develop advanced intelligence,surveillance and reconnaissance capabilities, highly accurate and stealthy ballistic and cruise missiles, enhanced command and control mechanisms, unmanned aerial vehicles, improved precision strike capabilities, and the ability to deny sea control, and rapid deployment forces. While China may never achieve some of its high technology warfare ambitions, others may be mastered in five to ten years.12

India's Status

After nearly a decade of low spending, India's defence expenditures could be set for higher levels, related in large part to the liberalisation experiment begun in 1991 and economic growth, particularly since 1994. In 1995, a ten-year self-reliance initiative was started to increase the indigenous content of defence equipment from 30 per cent (currently) to 70 per cent by the year 2005.

Russia's exports to India which had dropped in the early 1990s are now reaching significant levels. Apart from the agreement in 1996 to purchase 40 Su-30, India is now ready to purchase six Il-78 air-to-air refuelling jets.13 India had long been searching for aerial refuelling capabilities for its Su-30, MiG-29 and Mirage fighters. The Indian Air Force reportedly aims to double the operating distance of its aircraft. The military cooperation programme between the two countries is to be extended for another decade, through 2010.

During the 1980s (1980-1987), India managed to build up its military capability, leaving it in a fairly good position, particularly the Air Force which emerged with one of the most modern fleets in the developing world—Mirage 2000s, MiGs, and Jaguar aircraft. But the greatest growth was of the Navy, which acquired 12 submarines during this time. There were also a number of new initiatives started by defence planners who subscribed to the need to resuscitate a strong domestic arms industry in high technology weapons.14 Two key projects were the light combat aircraft (LCA) and the revived advanced light helicopter (ALH). The integrated guided missile programme launched in 1983 under which India's Prithvi and Agni missiles were developed, have given it key capabilities.

Indeed, when viewed against a number of Asian countries, the strategic position of India compares favourably.15 Apart from China and Japan, South Korea is one of the few Asian countries which has considerable military capabilities. Vietnam's capabilities are not insignificant, especially in tanks and fighter aircraft, but inadequate in Navy hardware. Despite its size, Indonesia is far behind, and its lack of airpower is telling. Malaysia, Singapore and Thailand could change their current status if defence purchases continue as planned. India is the only other military power of import in terms of its depth and breadth of strategic capability in the region.

India now has the potential to be a major exporter of products such as the ALH helicopter and the LCA, although both have come under criticism for cost overruns and delays.16 India is billing the LCA as the most cost-effective answer to the developing world's future military aviation needs. It is estimated that Asian and African countries will need to replace as many as 8,000 fighters in the next 20 years. The Indian Air Force which is the fourth largest in the world, has also begun modernisation of its MiG 21s and is encouraging other countries using Russian made aircraft to turn to India to upgrade their fleets. This is very important because currently, two-thirds of the world's fighters are of Soviet origin and many are badly in need of refurbishing.17 All the countries stepping up arms purchases are focussing on acquiring fighter aircraft.

India's nuclear position continues to remain ambiguous even after a prolonged national debate in 1996 during the negotiations on the Comprehensive Test Ban Treaty (CTBT).18 The unprecedented entry-into-force clause attached to the draft treaty which pushed India into a corner, however, resulted in India beginning to articulate a doctrine which openly gives greater attention to national security than the more normative and ideological rationales of the past. This shift in doctrine, whatever its origins, has no doubt brought a modicum of greater credibility to the so-called Indian nuclear option. But there is a growing chorus of opinion from both proponents as well as sceptics of the Indian nuclear option that a resolution of the question one way or the other cannot be held off much longer.

The New Politics of Asia

The defence picture needs to be placed in the context of changing politics in Asia, which will ultimately determine the course of military relations. A close look shows that there is a strong positive correlation between wealth and defence spending in the region.19 For example, the countries in South-East Asia experiencing the biggest economic growth had higher rates of defence increases. So Singapore and Malaysia had higher rates than the Philippines and Indonesia which had slower GNP growth. Basically, these states can simply afford more. Even in the case of China, if spending is adjusted for inflation, the picture looks somewhat different.20 India's defence growth in the early 1980s was also closely linked to a better financial position which then had to be reined in due to economics.

The South-East Asian currency crisis which came to a head in the fall of 1997 has already had the effect of slowing down planned arms purchases, especially in Thailand and Malayasia, the two hardest hit countries. Analysts expect greater austerity through 2000, but unwilling to shelve plans for defence modernisation, military officials are raising the possibility of pooling their procurement funds across countries and experimenting with sharing of training assets. With the Association of South-East Asian Nations (ASEAN) countries facing similar requirements, cooperative purchases of standard ammunition, artillery rounds and upgrade of F-5 fighter planes could be made in the future, particularly among Thailand, Malaysia and Indonesia.21 South-East Asian officials are, however, quick to emphasise that any evolving military cooperation should not be viewed as developing a de facto military alliance through the back door.

Moreover, many of the countries in the region are spending on force modernisation, rather than against any country as such. Also, they are attempting to gain the capabilities once provided by outside powers, whose commitment cannot be counted upon in the post-Cold War period. As such, even though some are calling it an "arms race" in Asia, it cannot be seen as an arms race in the classical sense. Even in the case of India and Pakistan which comes closest to an arms race (along with North and South Korea), there have been a series of confidence building measures at work for over a decade, even in the nuclear arena.22

In part, these countries are building up and consolidating a sense of status and identity commensurate with their economic standing. In the case of China and India, there has been a continual attempt to match their historical perspective regarding their position in the world with capability. Historically speaking, these trends are hardly surprising.

Conflict Management

The most promising developments in the region relate to the emerging mechanisms at both the governmental and non-governmental level for conflict resolution and integration, broadly speaking, which have deepened in the 1990s. Attitudes on trade, investment and economic cooperation across Asia are fusing in important ways and there seems to be a sense that since Asia is projected to be the most economically attractive region of the world into the next century, instabilities should be kept to a minimum. This is true not just for the smaller ASEAN states but for China and India which are steadily increasing their stakes in the global economy.

ASEAN and the Asia-Pacific Economic Cooperation (APEC) groups are the most visible, but there other forces at work. For example, in the case of China, its trade with South Korea is almost ten times that of its trade with North Korea. China is also Taiwan's fastest growing export market and cross-border trade with Vietnam is flourishing.23 India is a dialogue partner of ASEAN and has sought membership in it and APEC. These and other newly formed institutions may be best characterised as "functional" groupings requiring some changes in India's worldview. The Indian Ocean Rim intitiative formalised in March 1997 in Mauritius formed in large part with India's leadership, in fact suggests this new type of diplomacy is at work in India. The latest of these groups is BISTEC, an economic cooperation unit comprising Thailand, Sri Lanka, Bangladesh and Myanmar, which has received India's backing.24

The creation of the Asian Regional Forum (ARF) by ASEAN in 1993 shows that the region wants to take a more active role in determining the security situation as well. The inclusion of China and most recently India in 1996 as dialogue partners, suggests that a sense of realism has arrived regarding the need to deal with the bigger military powers of the area. The fact that India was inducted just at the time that Indian and ASEAN differences on the CTBT were at their height, suggests that, at the very least, South-East Asian countries can have a working relationship, agreeing to disagree with India, or at the most, that they actually welcome an Indian presence with implicit nuclear capability to serve as one more form of check on China. Important South-East Asian commentaries suggest the latter. As a recent Asiaweek editorial on South Asian-East Asian relations put it, "A stable and increasingly prosperous subcontinent plainly serves East Asia's interests—and not just as a vast new market for goods and services. Such a scenario also helps ensure that vital oil supplies from West Asia can transit smoothly through the Indian Ocean on their way east. And a more connected India would better—and perhaps more productively—balance the influence of China and Japan in Asia" (emphasis added).25 India is already an associate member of the Council for Security Cooperation in the Asia-Pacific.

China will continue to be the main concern of most countries in the region in the forseeable future. But while China has territorial disputes with a number of countries in the region, including Russia, Japan, India, Malaysia and Vietnam, it is attempting to diplomatically minimise potential discord by deepening normalisation of relations. India and Russia are good examples of improving relations without necessarily resolving the more fundamental competing territorial claims immediately and such an approach seems to be the preferred Chinese model. This bilateral approach historically favoured by China, tends to be shared by India, and to a lesser extent by Japan, as opposed to a multilateral one.

An important new feature of the political relations in this region is the significant amount of track two and even track three (people-to- people) diplomacy at work, not just by ASEAN members, but by South Asians as well. These dialogues in South Asia, many of which did not exist even five years ago, have nonetheless produced several accomplishments and seem to be developing their own momentum.26

Overall, however, significant arms control or arms reduction cannot be expected in Asia since most of the countries are committed to force modernisation. The arms transfer policies of the US and Russia which will continue given the existing incentives for weapons producers will only fuel this objective. No overarching security agreements are likely to be produced either. What then seems to be emerging in the region is a form of realpolitik balancing behaviour mitigated by multiplying dialogues as a modus vivendi. Such an approach could gain defence insurance and goodwill at the same time.

Implications for India

Changes of historic proportion are currently underway in Asia.The economic tigers of ASEAN are gaining claws; a geo-economic Japan could be turning more geo-strategic; a politico-military China is catching up in economics as well as economic statecraft; and Korean unification is a foregone conclusion which could change Korea's historical position as a "shrimp" between two whales. As the firepower in Asia rises in current fashion, the US will also be less able to flash its own military power in the region. This will complement the likelihood of a lower US profile on account of domestic political compulsions, as well as obstacles it will inevitably run up against in the form of regional heavyweights.

The limits to exercising dominance by the US is broadly hinted at by the April 1997 "Joint Russian-Chinese Declaration about a Multipolar World and the Formation of a New International Order," which was an obvious criticism of perceived continued American hegemony.27 The message is that the US will have to be prepared to trim its own sails in order to accomodate the aspirations of important powers in the Asia-Pacific. Even America's closest ally in the region, South Korea, is considering a long range missile programme despite US opposition. South Korea's intention would be to serve as a balance between China and Japan in the future.28 All this suggests that the future strategic landscape will be given shape by forces within Asia, in a critical break with post-War history.

The black and white politics of the past is being replaced by more nuanced cross-cutting issue-based politics in Asia. This structural shift will perforce make it more difficult for Cold War politics to recur. The formulation of issue-based coalitional foreign policy by India as argued by some experts thus makes sense.29 The recent ASEAN decision to resist American pressure and include Myanmar into its fold not only suggests a strong assertion of sovereignty by the South-East Asian states vis-a-vis the US, but it also demonstrates the potential value of cross- cutting linkages for India. For example, Myanmar inside ASEAN would become much more enmeshed into regional stability structures and outside of Chinese influence, a welcome development for Indian security policy.

From India's perspective, while it did not get pride of place at the global table in the post-World War II period despite efforts by able statespersons like Nehru, it has to guard against the same happening at the regional table in the post-Cold War era. Geography or demography will not guarantee a place. Just as others in the region are attempting to redress their recent "imbalanced" development whether in terms of the military or economy, India needs to back its military capability with economic strength absent in previous decades. In the meantime, it would do well to become more competent in economic statecraft, a new tool for Indian diplomacy which would have to be used not as a blunt instrument reminicent of India's past shrill ideology, but in a more nuanced and pragmatic fashion.



1. Strategic Digest, vol. 25, no.5, May 1995, p.672.

2. Lora Lumpe, "Clinton's Conventional Arms Export Policy," Arms Control Today, vol. 25, no. 4, May 1995, p. 9.

3. Economic Times, January 24, 1997.

4. Defense News, April 28-May 4, 1997, p.4.

5. K. Kasturirangan, "Globalisation and Technology Sharing," in Nuclear Cooperation: Challenges and Prospects, (Bangalore 1997), p. 59.

6. Stewart Walters, "Will Asian Defence Industries Join the Big League?" Asian Defence Journal, November 1995.

7. Times of India, January 13, 1997.

8. Walters, n. 6, p.48.

9. Defense News, May 5-11, 1997, p. 34.

10. Kumao Kaneko, "Japan Needs No Umbrella," The Bulletin of Atomic Scientists, March/April 1996, p. 47.

11. Swaran Singh, "China's Arms Acquisitions," Strategic Analysis, vol. 19, no. 12, March 1997, p. 1772.

12. Defense News, May 19-25, 1997, p. 1.

13. Defense News, December 1-7, 1997, p. 12.

14. Amit Gupta, "Determining India's Force Structure and Military Doctrine," Asian Survey, vol. 35, no. 5, May 1995, pp. 448-541.

15. For good comparative data on a number of key indicators, see Robin Ajello, "Planes, Subs and Destroyers," Asiaweek, August 1, 1997, pp. 40-41.

16. See, for example, Manoj Joshi, "Way Off Target," India Today, November 24, 1997, pp. 62-65.

17. Sandy Gordon, "South Asia After the Cold War," Asian Survey, vol. 35, no. 10, October 1995, p. 882.

18. International and Strategic Studies Unit, India's Options on the Comprehensive Test Ban Treaty, NIAS Report, March 1996.

19. Desmond Ball, "Arms and Influence," International Security, Winter 1993-94, p. 82.

20. Don Flamm, "Impact of China's Military Modernization in the Pacific Region," Asian Defense Journal, February 1997, p. 17.

21. Defense News, October 27-November 2, 1997, p.1.

22. See for example, C. Raja Mohan and Peter Lavoy, "Avoiding Nuclear War," in M. Krepon and A. Sevak eds., Crisis Prevention, Confidence Building and Reconciliation in South Asia (New Delhi: Manohar, 1996).

23. Gary Klintworth, "Asia-Pacific: More Security, Less Uncertainty, New Opportunities," The Pacific Review, vol. 5, no. 3, 1992, p. 226.

24. C. Raja Mohan, "The Emerging East," The Hindu, December 11, 1997.

25. Editorial, "Look East," Asiaweek, August 8, 1997, p. 13.

26. N. C. Behera, P.Evans and G. Rizvi, Beyond Boundaries: A Report on the State of Non-Official Dialogues on Peace, Security and Cooperation in South Asia, (University of Toronto, Joint Centre for Asia Pacific Studies, 1997).

27. Defense News, April 28-May 4, 1997, p. 4.

28. Wall Street Journal, November 13, 1997, p. 1.

29. See, for a good example, S.D. Muni, "The Emerging Cold War in Asia," Strategic Analysis, vol. 19, no. 12, March 1997, who recommends such a policy option for India.