Abstract
For all the complexities of India’s politics, Prime Minister Narendra Modi seemed to have his economic path cut out for him. His ‘Achche din aane waale hein’ (good days are coming) campaign, which had won him a resounding election victory in 2014 for his first term, suggested that Modi’s primary goal was growth and development for his country and people, and hence also an agenda of economic reform. Focusing specifically on India’s negotiations in the context of the WTO, I show in this paper that India has continued to hold on to its former trade policy priorities and negotiation positions and adopted even more hard-line positions in some cases. Interestingly though, the same policy priorities and negotiation patterns that had ill-served India in the past may now no longer be a liability. This is only in part a credit to the Modi administration per se. Rather, it is mainly due to the rise of the phenomenon of “weaponized interdependence”, which in turn legitimizes—sometimes even necessitates—the securitization of foreign economic policy, and more specifically, trade politics. Taken in this changing context and as other countries also adopt a more market-cautionary approach, India’s historic and oft-reviled trade scepticism and reluctance to integrate in global value chains may yet allow it to have the last rhetorical laugh.
Highlights
For all the complexities of Indian politics, Prime Minister Narendra Modi’s path on economic policy seemed to be clearly cut out
Instead of continuing to allow self-selection, the USA proposed a new set of criteria whereby countries could avail themselves of Special and Differential Treatment (SDT): OECD members or those acceding to become members, G20 members, those ranked as high-income by the World Bank, and those with more than 0.5% of global merchandize trade would no longer qualify (WTO, Communication from the US 2019b)
I have argued that while the Modi government has some important successes to its credit, in certain aspects of its domestic economic policy, its agenda for the reform of foreign economic policy has been more cautious and is more closely aligned with India’s past
Summary
For all the complexities of Indian politics, Prime Minister Narendra Modi’s path on economic policy (domestic and foreign) seemed to be clearly cut out. The narrative that India uses is a trade-sceptic and defensive one, which prioritises a reform of the international rules (rather than harnessing them, in their existing form, to the country’s advantage) Often, this narrative is framed in terms of powerlessness and victimhood, which sometimes— especially to external observers and its negotiating counterparts—sits at odds with India’s self-perception as a rising power and the status accorded to it in the WTO. The use of a distributive strategy, collective action through coalitions of developing countries, and a trade-defensive narrative emphasizing poverty and powerlessness can be found in other key negotiation areas that form a part of the. Within the context of the WTO, the pre-Modi years saw India exhibit the same three phenomena: the use of a defensive trade narrative, its manifestation in a strict distributive negotiation strategy, as well as collective action via coalitions global south. As several countries besides India express similar concerns (e.g. in relation to food security, health security, security of communications and infrastructure sectors), India’s previous resistance to the old form of globalization begins to look almost pioneering
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