For decades, India tried to influence policies abroad through moral posturing. The last few years have seen India shed this tact, and enter the realm of realpolitik—for instance, both the public and private sectors have exerted influence through targeted lobbying. We’ll now find out if India is up to the demands of such realpolitik.
How well India lobbies is a question that assumes importance after US President Barack Obama’s State of the Union address last week. In outlining the thrust of his policy for the coming year, he noted that he would target tax breaks US firms receive for generating income abroad. He had made the same point against outsourcing in May when he complained that it was becoming easier for companies “to create a job in Bangalore” than in Buffalo, New York.
Still, the US Congress passed no such legislation last year. And even if the US government takes away these tax breaks, we doubt US firms will stop coming to India; the cheaper labour here outweighs tax losses. But that shouldn’t lull India’s firms and lobbyists into complacency.
Tech companies, particularly, shouldn’t rule out a potential backlash this year. The combination of a bad economic climate in the US—unemployment still hovers around 10%—as well as a Left-leaning Democratic establishment may once again give voice to “jobs being stolen”.
That’s where private sector lobbying comes in. The National Association of Software and Service Companies, or Nasscom, is estimated to have spent $2.7 million for this in 2008, reported The Economic Times. Companies such as Wipro are even making separate individual efforts. These Indian companies are doing their best to appear good US corporate citizens, advertising centres they open or jobs they create in the US.
But is this enough? Consider what Brian McCormack, the point man in the George Bush administration for the civilian nuclear deal (apparently the high water mark of Indian lobbying), told Caravanmagazine in January: “I don’t want to call (the Indians) fractured…but they needed organization.”
Indian lobbyists made mistakes in persuading the US about an issue—aligning with India’s democracy—that it was already in sync with ideologically. Now they have to persuade an already Left-leaning government about the merits of free trade.
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