270 c o n c l u s i o ninstitutions of the state and undermined the principle of secularism en-
shrined in the Indian constitution.
These in turn adversely aff ected the Indian economy. The Soviet
Union, its principal supporter during the cold war, was preoccupied with
its own survival and was not in a position to come to India’s rescue. Mikhail
Gorbachev was increasingly sucked into the po liti cal and economic mess of
the Stalinist model of state capitalism. In 1991, India had the dubious dis-
tinction of having to fl y out and mortgage two hundred tons of its gold
reserves just to pay for a two- week import of essential commodities. The
defeat of the Congress Party in the 1989 Lok Sabha elections unleashed
the phenomenon of co ali tion politics and weak and unstable governments
at the center. The Congress Party lost its hegemony in Indian politics and
was forced to share power with various regional parties, factions, and lead-
ers. Their unfamiliarity with foreign policy proved costly when India en-
dorsed the Iraqi annexation of Kuwait by closing its embassy in Kuwait
City in early August 1990. The international climate was equally chal-
lenging. The cold war was moving to a close, and the Soviet Union was
crumbling along with the Iron Curtain. The Iraqi action against Kuwait
shifted global attention from the Israeli- Palestinian confl ict to the Persian
Gulf.
In short, this period witnessed India undergoing an organic crisis.
The convergence of domestic turmoil and major shifts in international
politics remain the key to understanding the trajectory of the post– cold
war foreign policy of India.
Democracies either fi nd a way to confront grave threats or they cease to
exist. To survive, the Indian po liti cal elites adapted themselves to the new
situation and readjusted India’s overall economic and foreign- policy orien-
tation. Both great- power aspirations and co ali tion compulsions prevented
them from completely abandoning the past or capitulation. Under the
leadership of Rao, they initiated a cautious path toward integration with
the global market and reached out to the Western world, especially the
United States. Driven by economic reforms, India consciously engaged
Washington, and, discarding the ideological blinders of the cold war, the
Indian establishment began to see the United States in friendlier terms.
Those who for de cades had harped on the entry of USS Enterprise into the
Bay of Bengal during the Indo- Pakistan war of 1971 began recognizing the
usefulness of Washington in furthering India’s great- power aspirations.
Democracy and shared po liti cal values with the United States gained
prominence.