The Israel-Palestine Conflagration Is a Cautionary Tale for India’s Global Ambitions

Claims of a “new Middle East” have been quashed as the “old Middle East” has returned with a vengeance: The devastating October 7 Hamas terrorist attacks on Israel have been followed by unprecedented Israeli attacks on Gaza and the resumption of prolonged Israel-Palestine hostilities. This has also called into question the future of diplomatic initiatives such as the Abraham Accords, which normalized relations between Israel and several Arab states, the Saudi-Iran resumption of diplomatic relations earlier this year, and efforts to facilitate a rapprochement between Saudi Arabia and Israel.

What does this mean for India? Beyond the Modi government’s unequivocal support for Israel (which is arguably more equivocal at the level of public opinion, given India’s longstanding support for the Palestinian cause) the latest hostilities in the Middle East hold lessons for India’s global ambitions. 

Recent years have seen India raise its voice on the world stage. India’s G-20 presidency strengthened the country’s credentials as the voice of the Global South. New Delhi is offering Indian solutions to global problems, ranging from climate change and sustainability to digital public infrastructure and global health. India has spearheaded new connectivity initiatives, from its rebranded “Act East” Policy in the East to the India-Middle East-Economic Corridor and I2U2 (India-Israel-UAE-U.S.) grouping in the West. 

Despite the growing polarization of the international system following the Russian invasion of Ukraine, India has been courted by all major poles of influence. It is a member of both Western-led initiatives such as the Quad and non-Western initiatives such as the BRICS and Shanghai Cooperation Organization. 

Undergirding these developments are India’s impressive achievements, ranging from its space program marking a global first to surpassing the United Kingdom in GDP and surpassing China in population. Projections hold that India will be the world’s fastest growing major economy in 2023; it is on course to surpass Germany and Japan to emerge as the world’s third-largest economy by the end of this decade. Meanwhile, the Indian government has just announced that it will submit a bid to host the 2036 Olympic games.

But the most recent developments in the Middle East show how unresolved disputes have a tendency to flare up. In this context, tensions with Pakistan (and to a lesser extent China) remain a constant thorn in India’s global ambitions. 

All it would take is another high-profile terrorist attack on India, followed by the mobilization of both countries’ militaries, to erode investor confidence. This would undermine India’s ambitions to emerge as an engine of global growth, a global manufacturing hub and a beneficiary of the push to de-risk or decouple supply chains away from China. It would also challenge the government’s credentials as the “chowkidar” or watchman/protector of India’s interests, just as Israeli Prime Minister Benjamin Netanyahu’s “Mr. Security” reputation has been tarnished by the recent Hamas attacks. As such, despite India’s success in de-hyphenating its relationship with Pakistan, the unresolved Kashmir dispute and relations with Pakistan remain a key challenge to India’s global ambitions.

Beyond the perennial faultline with Pakistan, India remains surrounded by a broader wall of instability. Three countries in the region are in the midst of IMF bailouts – Pakistan, Sri Lanka, and Bangladesh. All countries in South Asia are vulnerable to climate risk, as noted by last year’s devastating floods in Pakistan. 

South Asia also faces a year of elections with every country in the region (except Nepal) going to the polls. The outcome of these elections will redefine relations with India. This became apparent after the presidential election in Maldives, where the winner, Mohamed Muizzu, pledged to move his country away from his predecessor’s “India First” policy, alluding to deepening relations with China. 

And then there are Afghanistan and Myanmar; both near-failed states; the latter in the midst of renewed civil war and the former facing a worsening humanitarian crisis two years after the U.S. withdrawal, as evidenced by the devastating impact of October’s earthquakes in Herat Province.  

These developments are a reminder that India’s global ambitions continue to be held hostage to regional instabilities. Prior to the latest Hamas attacks, the Palestinian issue had become marginal to discourse on Israel, which was focused instead on domestic politics (notably the fall-out from Netanyahu’s controversial judicial reforms) and the country’s broader diplomatic outreach. Parallels can be seen to India, where international focus on the country has been on its rising status and stature on the world stage while there is limited discussion of instabilities in its neighborhood. 

India of course is not alone in facing such a predicament. Any part of the world with festering faultlines is vulnerable. Flashpoints in the Taiwan Strait and Korean Peninsula are prime examples. Taiwan and South Korea are both central to global supply chains for critical or emerging technologies. However, both also face longstanding and unresolved disputes that could flare up and mutate into larger conflicts. This presents a geopolitical risk premium to both economies at a time when companies have become more aware of the need to de-risk and diversify supply chains. As such, just as South Korea’s ambitions to be a “Global Pivotal State” are held hostage to the actions of North Korea, so India cannot transcend its region, despite its best efforts. 

This does not mean that India’s neighborhood is a lost cause. According to the World Bank, South Asia will be the fastest growing region in the world this year, although per capita income is one-fifth the level of the rest of the Asia-Pacific and there are wide disparities (ranging from 6.3 percent growth for India to 1.7 percent for Pakistan). This growth is fueled in no small part by South Asia’s demographic dividend, with almost 40 percent of the region’s population under the age of 18. This presents both a vast pool of labor and a growing market.

But before “naya India” (new India) can come into being, old conflicts need to be resolved. Just as India’s global economic status is tied to its ability to implement economic reforms at home, so New Delhi’s global geopolitical ambitions are intertwined with the stability of its neighborhood. The stunning return of the Israel-Palestine conflict has provided the clearest indication of this.