The penny-pinching syndrome refuses to vanish from Indian horizons. This has been evident as India attempts negotiating a free trade agreement with the Association of South-East Asian Nations (Asean).
As the East Asia summit proceeds in Singapore, the need for India to engage with Asia is more pressing than ever. China, Japan and South Korea are all vying for more economic and political space in the continent. While the West, with its mature economies, stagnates, all the action is concentrated in Asia. If these countries gain, India will miss an opportunity.
While these countries pursue bigger dreams, we continue to nit-pick. A number of Asean countries want India to cut import duties on palm oil, pepper, tea and coffee in the 20-40% range. India has much less to offer; it promises cuts to 50-60% level broadly for these commodities by 2018. Asean countries want action now.
Managing the political fallout of these changes is one thing, the opportunities they present domestically and internationally are another matter. Why cannot India move into speciality tea and coffee markets? Like rice and wheat, it insists on remaining in the low value end of the spectrum. These are domestic issues that can be sorted out, but the world will not wait long for us.
Internationally, the opportunities for trade and export will expand greatly if a free trade agreement with Asean materializes. But trade is the least of it; if we have to continue powering our growth, our political engagement with the world has to remain in step with trade.
India of 2007 is not the India of Bandung in 1955 when the non-aligned movement dream took off. At that time, India’s international role was disproportionate to its strength, economic and political. That quest for big power status understandably failed. India never really recovered. From the shrunken horizons after the Nehru years, it turned inwards. Even after 1991, when trade and profit became respectable again, foreign policy did not regain its former compass.
This has to change. For two reasons. One, given the current uncertainties around American effort and will to involve itself with the world, such political engagements have to be local. India, South Africa, Brazil and Japan, among other nations, have to take a larger part of this role. Two, the rise of authoritarian capitalist states. China and Russia in their present state fall in that category.
Here, the importance of India cannot but be emphasized in strong terms. The world realizes that but India does not. Writing in the July-August issue of Foreign Affairs, the historian of war and civilization, Azar Gat, underscored the importance of democratic India in the age of American decline. This stems from the authoritarian nature of China and Russia and the importance of India in balancing China and as a model that India represents for other developing countries. Action on this front is more important in Asia than anywhere else. Most countries in the continent have had economic freedom, but are scared of the turmoil that accompanies noisy democracy. India’s experience is heartening in this respect.
For India, meeting the Chinese challenge in Asia is important. Unless we engage with Asia politically, economically and culturally, China will steal a march over us. If these markets are important for us, then getting a foothold in them requires a strategy that is more than mere price-cutting and cheap goods.
Political engagement with Asia is also necessary if India is ever to gain a bigger voice in the UN security council and other fora. Even in case of the nuclear deal, Asian countries have been lukewarm so far. There are many other issues on which cooperation would make things easy.
(What should be the nature of our engagement with Asean? Write to us at email@example.com)