The very recent uncharacteristically tough stand taken by India on the trade facilitation agreement at the WTO has surprised Europe, Australia, the US and the West, especially more so when it comes immediately after the announcement of a BRICS bank headquartered in Shangai and the 100 Billion US$ Contingent Reserve Arrangement (CRA) as alternatives to the World bank and the IMF. Other readings apart, we at NRI Achievers also see this reflecting Prime Minister Narendra Modi’s considered foreign policy goals to be in tune with his rather domestic concerns. Read on …

At the WTO negitiating tables, India has taken a tough stand that may put paid to the efforts of the world body to knit together consensus on the Trade Facilitation Agreement before clarity is achieved on the subject of subsidies to the satisfaction of emerging economies like India. And according to usually reliable sources within the government, the PM today is the prime motivating force and the mover this tough stand of Nirmala Sitaraman, India’s Minister for Commerce at the WTO. And this is perfectly in resonance with India’s thoughts on the BRICS bank as well, methinks. PM Modi did not kick up any fuss at Fortaleza during the BRICS summit over where the bank ought to be based, probably because he desired more that the initiative make a much larger point to the powers that be. To put it in the words of a top government official who was part of the delegation but does not want to be named, “In the midst of the negotiations over the headquarters, when other countries were demurring over whether or not it should be Shanghai, it was the Indian prime minister who intervened and said that the demand of the Chinese should be conceded, and the bank should be given a liftoff at this meeting itself. He said that this was the only way the rest of the world would get the message that it here a serious enterprise.” The new BRICS bank and the CRA as an alternative to the World Bank-IMF hegemony not only goes well with Modi’s constituencies back home, but it also succeeds in sending out a strong signal and an explicit message to the West and the US that whatever doubts they have had over Modi prior to the elections, and his ability to bite the bullet and take hard decisions in a statesman-like manner stand expelled.

While in Brazil, where the BRICS summit was held, the South African delegation was surprised indeed to learn that India’s Commerce Minister Sitharaman had been tasked to attend the G-20 meeting in Sydney ahead of the WTO general council in Geneva. At Sydney, Sitharaman made it clear that India’s concerns just simply couldn’t be wished away. She made a forceful intervention at the summation of the G-20 meet, asking that India’s problems with the trade facilitation pact and the valuation issues of agricultural products and public stockholding be put on record, following that up with a call to the Prime Minister apprising him of all that happened. “The very next day the PM called all concerned secretaries and firmed up India’s position for the WTO talks to be held on in Geneva a few days hence. He also called a Cabinet meeting just as the minister herself flew in to Delhi, and ratified the stance,” says the same source who refuses to be named. While some have likened this to PM Atal Bihari Vajpayee’s masterstroke of announcing India’s arrival on the world stage as a global power by testing nuclear weapons in 1998, some others feel that all this may have been influenced more by mundane and prosaic domestic compulsions. Like for instance, the Prime Minister’s promise to Indian farmers in the BJP election mainfesto, assured them that his government would take all needed steps to ensure a 50% profit margin in agriculture. Could this be one reason why India is hardening its position at the WTO ? Whatever be the motives of the PM behind what is seen as aggressive foreign and trade policy stances and moves, these signals being sent out worldwide do have the salutory effect of his upcoming visits to world capitals including Washington will be watched very, very carefully indeed.

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