There is ambivalence in India’s trade policy and this is partly due to the disruption and dislocation that trade is causing across the world, Chief Economic Advisor Arvind Subramanian said.
“We have had lot of reforms…the barriers have come down significantly, our trade has expanded, but when it comes to trade policy, there is a kind of genuine ambivalence on how rapidly India needs to open up domestically…and to engage internationally whether it is the WTO or the TPP. There is ambivalence within India,” Mr Subramanian said here during a talk on ‘Can India ever become a great power?’ at the think tank Carnegie Endowment for International Peace.
This is a problem even in the U.S where presidential candidates are campaigning on anti-trade planks, he said.
Carnegie senior associate Ashley J Tellis’s new paper ‘India as a leading power’ argues that Prime Minister Narendra Modi’s call for India to become a leading power represents a change in how the political leadership conceives of India’s role in international politics. Mr Tellis said envisioning India as a great power would catalyse the country’s material aspiration and military ambitions. “The key question is whether India can actually achieve that. I argue that it is possible,” he said, while acknowledging the considerable uncertainties that loom.
Mr Tellis’ key argument is that Mr Modi’s vision, when fulfilled, will mark the “third epoch in Indian foreign policy.”
In the first, India survived the U.S-Soviet cold war hostility through non-alignment, which was “essentially defensive;” and in the second, starting from 1991, India pursued strategic partnerships with more than 30 countries and emerged as a ‘balancing power’ that can influence outcomes in international debates. “Modi seeks to transform India from being merely an influential entity into one whose weight and preferences are defining for international politics,” he said.
“The currently tepid domestic economic liberalisation efforts” amounts to “forfeiting the possibilities of enhanced trade-driven growth,” and blames domestic politics and fears of foreign domination for India’s modest foreign trade, he said.
