China’s continuous dominance in the Indo-Pacific region is creating problems for other continental nations 

Geostrategic Rivalry in the Indo-Pacific

• Maritime Importance of the Indo-Pacific: The region’s maritime space, spanning from the west coast of the Americas to the east coast of Africa, is of prime strategic significance. This vast area, approximately 8000×8000 km, is home to around 36 countries and accounts for two-thirds of the global economy.
• Geostrategic Competition in the Indo-Pacific: The Indo-Pacific is increasingly becoming a zone of rivalry, driven by the rise of China. Countries in the region face pressure to choose sides, with some aligning with China, others countering its influence, and many hedging their bets.
  • Competing impulses of rivalry dominate the region as each actor seeks to maximize its strategic position.
• Changing Security Dynamics:  Recurring skirmishes in the Western Pacific and aggressive actions aimed at Taiwan highlight the growing tensions. China’s assertiveness in the high Himalayas adds to the region’s volatile security environment. 
  • The escalating risks of conflict underscore the rapidly changing geopolitical landscape of the Indo-Pacific.

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Competing Notions in the Indo-Pacific

• Dominant Perspectives: The Indo-Pacific as a single geostrategic space where like-minded nations, led by the US, collaborate to counter China’s rise through alliances like QUAD and AUKUS. 
  • Skepticism about the Indo-Pacific as a unified security construct due to lack of trust and differing strategic orientations of the Indian and Pacific Oceans.
• Distinct Strategic Orientations: The Western Pacific is marked by military competition, while the Indian Ocean remains relatively pacific. The Pacific Ocean has a well-defined strategic identity, whereas the Indian Ocean Region (IOR) lacks a cohesive identity.
• Maritime vs. Land Dimensions: The prevailing view emphasizes the maritime domain, sidelining the relevance of land in security considerations. Land remains critical as governments, populations, and conflicts are primarily based on and driven by land. 
  • (For ex: Russia attacked Ukraine through land and Israel -Hamas conflict also took place through land) 
  • The key question is how the land factor influences maritime strategies and shapes a State’s security policies.

 Land-Maritime Security Nexus

• Influence of Land problems on Maritime Security: The debate on Indo-Pacific security must consider how land contexts shape maritime policies, as social dynamics on land often give rise to maritime challenges like piracy, illicit fishing, and smuggling. 
  • Incidents like the Nord Stream attack highlight how land conflicts can spill over into the maritime domain.
• Strategic Orientation: The strategic orientation of states is influenced by their geographic characteristics, with landlocked and peninsular states focusing more on land security, while coastal states balance both land and maritime priorities. 
  • Countries on the Arabian Peninsula will focus on coastal security 
  • Countries like India, Thailand, Vietnam, and South Korea prioritize land forces due to contested land borders.
• Maritime Priorities of Island nations: Island nations such as Malaysia, Indonesia, Philippines, Australia, and Japan focus on securing territorial waters, internal waterways, ports, and coastal defense, giving maritime security precedence. 
  • Taiwan, due to its proximity to China, adopts a coastal and air defense posture over traditional maritime security strategies.
• Role of Land Forces: Land-based military components offer greater scope and scale for large-scale operations to counter adversaries like China. 
  • Land forces play a crucial role in consolidating gains made by naval and air forces, and are vital for deterring and defending vital national interests. 
• Dominance of Land forces: Land armies constitute about 68% of military forces in the Indo-Pacific, with countries like India (85% of the Armed forces are deployed in the Himalayas),  Indonesia (75%), and the Philippines (70%) committing a significant portion of their forces to land defense. 
  • A reduction in land forces could weaken a state’s overall security, as demonstrated by India’s need to maintain strength in the Himalayas while also securing its maritime interests.

Way Forward for India 

• Balancing Land and Sea Priorities: India’s maritime security strategy must balance competing land and sea interests, especially with China’s aggressive posture along both land borders and in the Indian Ocean.
• Budgeting Dilemmas: India currently allocates 14-17% of its defense budget to the navy, highlighting the challenge of prioritizing naval strength, particularly in the Indian Ocean Region (IOR), without neglecting land defense.
• Defining India’s Oceanic Interests: India must assess whether its maritime interests are more focused on the Gulf region or extend to the Malacca Strait and the Pacific, to better tailor its maritime security agenda.
• Shifting from Continental to Maritime Strategy: A shift from India’s traditional continental outlook to a more maritime-focused strategy will require significant policy changes, likely contingent on resolving border issues with China.
• Managing Vulnerabilities: India must balance its naval capabilities and vulnerabilities in the crowded and contested Western Pacific, avoiding over-extension and ensuring focused maritime security priorities.

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Conclusion

Relying on extra-regional partners may be tempting, but it’s not prudent given India’s limited military capacities. Focusing on consolidating influence in the Indian Ocean Region makes more sense.

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Niti Aayog’s performance in these 10 years has been underwhelming, stymied by a combination of contextual and structural factors.

Global Context – A Changing World

Key Shifts

• Decline of neoliberalism: Events like the 2008 global financial crisis exposed the vulnerabilities of deregulated financial systems. These crises undermined trust in neoliberal policies, emphasizing the need for stronger state intervention.

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• Rise of de-globalization and populism:Disillusionment with globalization and free trade has led to the emergence of populist movements, which advocate for protectionist and nationalist policies.
• Rapid technological advancements and climate crisis

India’s Economic Reality

• Challenges
  • Stalled structural transformation: The economy remains disproportionately reliant on agriculture, employing a large share of the workforce despite its declining contribution to GDP.
    • The manufacturing sector has not grown sufficiently to absorb surplus labor from agriculture, limiting industrialization.
    • The service sector, while a growth driver, has been unable to generate adequate low-skilled jobs.
  • Persistent unemployment
  • Regional disparities: Economic development is uneven, with significant gaps between states and regions. There is an increasing gap between the income of the states 
  • Informal sector reliance: A significant portion of the workforce operates in the informal economy, contributing to job insecurity and lack of social safety nets.

Impact

• Policymaking becomes increasingly complex in this turbulent scenario.

Formation and Vision of NITI Aayog

• Establishment: Established in January 2015, replacing the Planning Commission.In the cabinet resolution, it was stated that NITI Aayog would serve as a directional and policy-driving force, guiding the nation’s development agenda by driving transformative initiatives for inclusive growth.
• Mandate: Strategic policy direction and shared vision for national development, strengthened cooperative federalism. 
  • A shared vision is crucial in a diverse country like India, where states have varying developmental priorities and levels of industrialization. 
  • For instance, states like Bihar have a relatively low industrial base compared to more industrialized regions, necessitating a unified approach to address disparities and promote balanced growth.
• Focus areas: Policy advice, innovation, and addressing state-level priorities.

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Key Challenges in NITI Aayog’s Performance

• Political Context
  • Suppression of independent research: Traditionally, academicians, civil society groups, and researchers have played a pivotal role in shaping economic planning in India. 
    • Landmark initiatives like MGNREGA and RTI emerged from active lobbying and contributions by these groups. 
    • However, in recent years, NITI Aayog has increasingly sidelined technical experts and civil society organizations in policymaking processes, limiting the diversity of perspectives.
  • Over-reliance on private consultants:NITI Aayog increasingly relies on private management firms for consultancy, often at the expense of independent research. 
    • This trend has led to concerns about the suppression of data and findings that may portray the central government in an unfavorable light, undermining transparency and accountability in policy formulation.
• Structural Limitations
  • Lack of budgetary powers: Unlike the erstwhile Planning Commission, which had budgetary authority and approved state plans, NITI Aayog lacks such powers.
    • This limitation hampers its ability to engage in meaningful dialogue with states, as it cannot directly influence resource allocation or funding decisions.
  • Non-binding recommendations:The recommendations made by NITI Aayog are advisory in nature and lack binding authority, limiting their enforceability and impact on policy implementation.
• Centre-State Coordination
  • Absence of clear mechanisms for dialogue and cooperation: Previously, line ministries such as the Ministry of Agriculture or Ministry of Food had a well-defined mandate to coordinate with states, facilitating robust center-state collaboration. 
    • However, their roles have been significantly narrowed in recent years, resulting in reduced engagement with states and limited avenues for effective dialogue and cooperation.
• Inter-State Disparities
• • Fiscal Devolution Formula: Richer states question the formula favoring poorer states. The fiscal devolution formula, which allocates central resources to states, has faced criticism from richer states. 
    • Southern states, in particular, have expressed concerns that their higher contributions to the national economy disproportionately fund poorer states like Bihar and Jharkhand, leading to perceptions of inequity in resource distribution.
    • There is an increased trust deficit between the centre and state due to this. 
  • Impact: Growing regional inequalities and strain on federal relations.
  • Case Example: Vijay Kelkar’s 2019 critique on fiscal imbalances
• Industrial Policy Vacuum: When liberalization, privatization, and globalization (LPG) were introduced in 1991, it was argued that India should forgo a formal industrial policy, allowing markets to operate freely. 
  • However, this approach has become outdated as countries like China have successfully leveraged well-defined industrial policies to drive economic growth and innovation. 
  • India now needs a coherent industrial strategy to remain competitive and foster sustainable development.
• Sporadic Initiatives:  India’s PLI lacks coherence.
• Vision Document Limitations: India@75 and Three-Year Action Agenda lacked significant policy impact. The preparation of these documents lacked public consultation, excluding the voices of stakeholders such as citizens, civil society, and subject matter experts, which are essential for inclusive and transparent policymaking.

Future Requirements for NITI Aayog

• Financial Autonomy: NITI Aayog needs greater financial autonomy. If NITI Aayog is vested with financial powers to allocate funds to states, it would enhance its credibility and strengthen its role as a central institution for fostering cooperative federalism and driving effective policymaking.
• Research Capacity:  Strengthened research capacity and implementation powers.
• Coordination Mechanisms: Improved coordination mechanisms with states 
• Independent Research: Support for independent research and data quality enhancement 

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Conclusion

To strengthen its role in India’s evolving economic landscape, NITI Aayog must be empowered with financial autonomy, enhanced research capabilities, and robust coordination mechanisms with states.

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