Indian economic reforms that started some 10-15 years ago would have been incomprehensible without grasping the uneasy security situation of the country. The next steps of the Indian government also won't be completely intelligible without taking into account this motivation. Here by security we don't mean only protecting the national borders of the country, although this is one of the major elements. Protecting the good standing of the nation in a continent that undergoes revolutionary changes, keeping the relative position is also a matter at stake.

When the Indian government decided to open gradually the economy to foreign competition, investments and other forms of penetration, the material well-being of the nation was only one of the reasons, although perhaps not the chief one. Far more important in the eyes of the authorities was the relative lost of positions within a region where the national security is a top priority for any country and government. To discard this reason and to put all the credit on the invisible hand of world modernization will be quite naïve. If the internal well-being was the prime motivation for the Indian authorities, they perhaps would have decided or at least tried to open the economy 40 years earlier.

What really happened at the beginning of 1990's had at least two causes that affected the political choices in New Delhi. First, the Soviet Union collapsed and ceased to be a major player in the global affairs, taking to its tomb the sphere of influence it has established in the development world. Second, China has already shown its new economic policy bringing fruits. The balance of power in Asia began tilting in favor of China at the precise moment when India needed the Soviet counterweight so badly. To be honest, the Chinese growing international standing wasn't intended mainly to intimidate India. Some 15 years earlier Beijing started reforms to balance what it saw as growing influence of Japan and as a possible second edition of the Japanese imperialism. What in retrospect seemed like a domino effect of modernization in Asia in fact were just concerns about the national security of the two most heavily populated nations in the world. What Gen. McArthur did 50 years ago by allowing reindustrialization of Japan could become the single most important event in the modernization process around the world, by forcing China in late 1970's and India in early 1990's to modernize just in order to keep pace with the frontrunners.

India as we know it today was born out of security concerns, dividing the former British possessions between Hindus and Muslims; Muslims fearing for their rights, Hindus fearing an international plot against their national unity. India turned toward more liberal kind of modernization also out of security concerns, fearing the Chinese dominance in Asia. The security concerns will hunt New Delhi on every step of its long road toward complete modernization. It just can't fully develop without solving territorial and other problems that go back in time.

Imagine a country like India, which has almost all of its land borders shut down permanently or temporarily because of the border tensions. A country where even the citizens can't freely go and settle and sometimes need special permits? What kind of international trade except by sea you'll be supposed to develop? Can we really imagine that the population of India, now more than a billion with a prospect to rise with another 400 million will 2050, will cluster itself in the narrow seacoast strips of Indian ocean because it will be only there that international companies will go to make money? This will be as impossible as it sounds impossible. The alternative options will be to make peace with the neighbors and to develop the border trade. But to do this India has to solve its security and other adjacent problems.

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