COVID-19 Hits Pause on India’s Rise as an Emerging Power

In ordinary circumstances, the visit of an Indian foreign minister to the United States under a new White House would have been a notable event. India has been a key U.S. ally for several years. More recently, the rise of China has brought about the resurrection of the Quad, and India, by sheer virtue of size, location, and demographics, is key to the Quad’s future.

Yet, when Indian Minister of External Affairs S. Jaishankar went to Washington in late May, there was very little fanfare or focus on these key factors. Jaishankar’s visit was markedly low-profile. Far from establishing India as a key U.S. ally, a large part of the Indian minister’s agenda related to India’s out-of-control pandemic crisis, and negotiations centered around how many vaccines the U.S. could ship to India and how quickly.

Politics did not help. With a crisis engulfing Israel and Palestine once more, U.S. Secretary of State Antony Blinken left for the Middle East shortly after his Indian counterpart touched down in Washington.

Meanwhile, Jaishankar carried his own political baggage. For much of the last two years, New Delhi has picked tiffs with many key political figures in the U.S. – some now part of the Biden administration – over Prime Minister Narendra Modi’s Hindu nationalist political agenda at home, including the controversial Citizenship Amendment Act (CAA), shutdowns in Kashmir, and crackdowns on minorities. Extensive meetings with Democratic Party leaders would have certainly brought these issues to center stage, and Jaishankar was probably better served by letting India’s vaccination problems occupy the bulk of the agenda instead.

Jaishankar’s visit to the United States was an unmistakable reflection of how COVID-19 has changed India’s reality. Not too long ago, New Delhi was trying to make up for these political controversies by marketing itself as the world’s biggest pharmacy and vaccine supplier – the panacea for all ills during the pandemic. But as a devastating second wave of COVID-19 took hold, India had to suspend its vaccine exports. As a result of inexplicably delayed orders by the government, India was struggling to vaccinate its own people. In May, India ended up vaccinating almost 30 percent fewer people than in the previous month.

Meanwhile, the Indian economy has been left utterly ruined by the pandemic’s persistence. Over the 2020-21 fiscal year, India’s economy contracted by a crippling 7.3 percent – its worst performance in over four decades and among the worst performances globally for the pandemic year. According to former World Bank Chief Economist Kaushik Basu, India ranked 142nd among 194 nations for economic growth over the past year. Bangladesh is now richer than India, per capita.

More worryingly, economists are not confident about a swift recovery any time soon, owing to serious structural damage in the economy. Consumer confidence is abysmally low, since many families have lost their savings to massive hospital bills and many others have lost their primary earners. According to the Center for Monitoring the Indian Economy (CMIE), since the last week of March, consumer sentiment has collapsed by 15 percent, as 97 percent of Indian households suffered a loss in real income. Another survey found that one in six Indians has lost someone to the virus.

Investment is also risky, given the persistence of intermittent lockdowns and uncertainty over when they might be reimposed. This means that India’s unemployment situation seems to be worsening, as more businesses leave the field. According to the CMIE, while 10 million jobs were lost between January and April, a further 15.3 million were lost in May alone.

Even India’s fabled youth dividend is now at risk of being lost. In February this year, before the second wave made headlines, a report by the Center for Science and Environment found that over 250 million children had been forced out of school in India owing to school closures and lack of internet access to attend online classes. But even those still in school are likely to suffer, given the inferior quality of learning through online classes. As Raghuram Rajan, former governor of the Reserve Bank of India, recently put it, “What we will see when we come back is lots of kids who were in third grade, who have forgotten what they learned till then and now are effectively in first grade.”

Without the promise of its economy, India will struggle to project power – and that has consequences for the broader region. Already, China has started filling India’s absence. As India’s vaccine export program came to a screeching halt, China began exercising a monopoly of its own, as several countries became dependent on Beijing for doses. According to Bridge Consulting, China has delivered nearly 270 million doses around the world so far; India had exported about 66 million before it suspended the program in mid-April.

In Afghanistan, China has begun positioning itself as a mediator between Pakistan, the Afghan government, the Taliban and various other factions. While India has shown that it intends to act more proactively in Afghanistan as U.S. troops withdraw, its preoccupation with the pandemic back home is almost certain to curtail its foreign policy efforts. With widespread economic devastation at home, India’s ability to compete with Chinese investment projects across South Asia will be even more limited than usual.

The pandemic’s challenge to India’s national power seems far from over. With vaccines still scarce and the virus mutating, a third wave appears likely – and India will have to learn its lessons fast in order to meet the challenge successfully.

Much of India’s current predicament can be traced back to poor anticipation and planning from the government, which believed prematurely that the virus had been vanquished. Hence, the government failed to chart out India’s vaccination needs. A third wave will require more transparency for faith to be restored in the government and to reduce the uncertainty plaguing India’s economy. Will the political leadership change course?