When India’s external affairs minister (EAM) emphasises the economic imperatives of trade deals, and India’s commerce minister focuses on the strategic elements of trade relationships, it may offer a clue to the secret to the country’s new energy on forging trade deals — the collaboration across ministries, the synthesis within the government, and the partial breaking down of silos.
This was a priority laid out by Prime Minister Narendra Modi back in his first speech from the ramparts of the Red Fort in 2014, and even in his poll campaign in 2013 when he advocated closer synergy between the commerce and foreign ministries.
During an interaction at Columbia University on Wednesday, responding to a question on trade and geopolitics, foreign minister S Jaishankar said, “Trade has to be done on trade merits primarily. I keep saying that to my trade minister you have to tell us you have got a great deal. I won’t press you to compromise on economic merits.”
At the same time, Jaishankar pointed out that trade pacts have to understand politics and systems for that has been a challenge. In what appeared like a reference to China, he said, “If we are opening our economy to countries that are not market economies..that can wipe out sectors of your economy, you can’t disregard politics of it. Countries have weaponised trade and finance. I have to keep the politics and nature of economies in mind.”
In an interview to HT two weeks ago during his visit to Los Angeles for the Indo-Pacific Economic Forum, commerce minister Piyush Goyal told HT that strategic relationships will govern trade.
Explaining the rationale of the Indo-Pacific Economic Forum, which does not have a market access component, he said, “Of course, free trade agreements (FTAs) will continue to have their importance and we will see lot of those in the future. But strategic partnerships and relationships are going to define engagement in the future. The fact that you are an ally, a friend, a trusted partner is going to become increasingly important to drive investments from one country into another.”
Goyal, at a separate community event in California, also spoke of how Indian diplomats are now judged on how much investment they can bring in from areas they are deputed. He also mentioned how silos are breaking down giving the example of his external affairs counterpart, calling Jaishankar “outstanding”, and citing how he had been on the phone with the foreign minister six seven times the previous evening, who then spoke to finance minister minister Nirmala Sitharaman. This was on a “matter related to Singapore” — while he didn’t disclose details about the nature of the conversation, Sitharaman, Goyal and Jaishankar participated in a meeting with their Singaporean counterparts after that disclosure.
He added, as yet another example, how, from a time when there was a complete disconnect being commerce and foreign ministries, today, foreign service officers were being judged on “three Ts” — their ability to promote trade, technology, and tourism.
Harsh Pant of the Observer Research Foundation said that there are two ways to look at this synergy. “One of the more interesting aspects of the Modi government’s approach has been an attempt to break down the silos, and look at any policy framework through a whole-of-government approach. So how can you relate trade to foreign policy, how can you relate foreign policy to developmental agenda?” Pant said to a certain extent, the silos have indeed come down. “We see a great degree of synergy between departments in how they are earmarking targets and how they look at broader questions of policy.”
The second aspect, Pant said, is that India is looking at foreign economic relations as a means to enhance Indian capacities in an operational sense. “So when Jaishankar talks about economic merits of trade deals and Goyal talks about strategic choices governing trade, both are essentially saying that the global economic architecture is sustained by the global political architecture.” Pant said this was perhaps for the first time that India was seeing a convergence across verticals, departments and silos in the pursuit of India’s strategic objectives.
It is perhaps in Jaishankar prioritising Goyal’s economic priorities and Goyal prioritising Jaishankar’s strategic priorities — with both realising how both are deeply interlinked — that reveals why India is today more open than it has been in the past, and why the vision of breaking silos may be delivering results.
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