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 has said. Mr. Subramanian was participating in a discussion on the topic, ‘Can India ever become a great power?,’ at the think tank Carnegie Endowment for International Peace in Washington DC.
“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 an ambivalence within India,” the CEA said, adding that this is a problem even in the U.S where presidential candidates are campaigning on anti-trade planks.
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 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 nonalignment, 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 argues.
Mr. Tellis argues that “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.
Mr. Subramanian and Devesh Kapur, Director of the Center for the Advanced Study of India at the University of Pennsylvania, pointed out that increasing challenges to globalisation and trade from different parts of the world could have a negative impact on India’s global ambitions.
“India joined the party when the music had begun to fade,” Dr. Kapur said. Dr Kapur said he did not share the optimism that India could emerge as a great power, due to both internal politics and external environment. “I am deeply pessimistic about India’s ability to deal with those challenges,” he said.
Dr. Kapur said the Congress had given hopes that India was poised to take off but did not deliver. The Modi government that came with a clear majority and promised to make India a leading power but has frittered away the opportunity even as divisive issues of all sorts were creating enemies within the country, he said. Referring to the multiple social cleavages in India, Dr. Kapur said: “We cannot afford to be burdened by the past. But that requires a type of political maturity India does not have at least as of now.” Dr. Kapur thinks the failure of successive governments including the current one in the field of higher education has become a serious impediment to India's rise.
Mr. Tellis argues in the paper that “the U.S holds the most important keys for India’s long-term success outside of its own domestic policies: as a host for India’s skilled labour; as source of capital, technology and expertise.”
