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There are several elements in the external environment that do favour India at the moment. In my travels over the past few months and my interactions with a wide range of world leaders I have found a renewed interest in India’s progress.”
So said Prime Minister, Manmohan Singh while addressing the Tenth CII Partnership Summit in Kolkata on January 12 this year. The statement charts out the Government’s economic diplomacy objectives . In today’s competing world there is an ever-increasing inter-dependence amongst the nations and the emphasis is more on cementing the synergies in a spirit of a healthy give-and-take to mutual benefit. The UPA Government has given an impetus to this view during the last one-year. There is a conscious effort to increase India’s integration with the world economy, particularly with the economies of Asia including the neighbouring countries.
The Prime Minister’s recent initiative to constitute the Trade and Economic Relations Committee to serve as a new institutional mechanism for evolving policies on economic relations with other countries is an ample proof of the Government’s seriousness in this direction. The Committee comprising, among others, the Union Cabinet Ministers of key economic Ministries and the Deputy Chairman of the Planning Commission as its members is headed by the Prime Minister and its primary job is to coordinate the preparatory work on the strategy on economic relations with India’s major economic partners, neighbours and regional economic groupings.
Indo-Asean Relations
A new dimension in India’s “Look East” policy was added by the first Indian ASEAN Car Rally which coincided with the 3rd India-ASEAN Summit held in Vientiane, Laos. The rally, flagged off by Prime Minister Manmohan Singh at Guwahati on November 22, 2004 streamlined India’s strengthening bonds with the ASEAN countries as the second leg of the rally was flagged off at Vientiane on November 30, 2004 by all the ASEAN leaders including our Prime Minister. The rally which was organized in coordination with the Confederation of Indian Industries and similar apex organizations of various ASEAN countries also witnessed interactions with the business leaders of these countries on the sidelines of the rally. It was a great event as it promoted re-establishment and opening of a land route from India to the ASEAN countries that would promote connectivity enhancing, side by side, opportunities for trade, investment, tourism and people-to-people links between India and ASEAN.
Bay of Bengal Initiative
Another watershed event in this direction was the First BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) Summit meeting held in Bangkok on July 31, 2004. It was attended by the President of Sri Lanka and the Prime Ministers of Bangladesh, Bhutan, India, Myanmar, Nepal and Thailand. The Summit adopted a declaration which placed special emphasis on cooperation in the sectors of trade and investment, transport and communication, tourism, energy, human resource development, agriculture, fisheries, science and technology and people-to-people contacts. The follow-up meetings of BIMSTEC Trade Negotiating Committee, BIMSTEC Task Force and the meeting of the chief executives of the railway systems of these countries have generated a positive environment for greater economic cooperation among the BIMSTEC countries.
Indo- Pak
The India visit of Pakistan’s President, Pervez Musharraf provided an opportunity for a review of the progress in India- Pakistan relations. Among other things the decisions taken by the two heads relating to cooperation between India and Pakistan in the petroleum and natural gas sector including the laying of a gas pipe line from Iran to India via Pakistan, early activation of India-Pakistan Joint Commission as also the decision to hold an early meeting of the Joint Business Council are significant steps.
India-China
Another significant visit to India was that of the Chinese Premier Wen Jiabao. The visit marked, among other things, the presentation of the report of the Indo-China Joint Study Group on Comprehensive Trade and Economic Cooperation to the two Prime Ministers. The Joint Statement signed during the visit provided a new vision for Indo-China relations and the range of agreements concluded between the two countries reflects the rapid strides in bilateral relationships between India and China.
India-US
The meeting between the Prime Minister, Dr. Manmohan Singh and the US President, George Bush on September 21, 2004, on the sidelines of the UN General Assembly session in New York resulted in a Joint Statement titled “US-India Partnership – Cooperation and Trust”. Since then we are having a number of bilateral contacts between Indian and US leaders. The present US Secretary of State, Dr. Condolezza Rice, after her Delhi visit in March this year, said that her country is ready for an energy dialogue with India in all its dimensions besides the US offer to to expand high technology trade with India.
India-Russia
Russia has been a trusted ally of India. The varied aspects of bilateral relationship were reviewed intensively during a series of visits by Russian leaders to India between October - December, 2004 followed by the visits by the Petroleum Minister, Shri Mani Shanker Aiyer and the Foreign Secretary, Shri Shyam Saran. New banking links have been established. IT and energy have been identified as areas of focus. India is actively pursuing the possibility of investing in another oil field in Russia. Steps are also being taken to facilitate business travel and tourism both ways between Russia and India. Moreover, the possibility of trilateral cooperation in the economic field between Russia, China and India is also being discussed and explored.
The meeting between Dr. Manmohan Singh and the Russian President Vladimir Putin on May 9, 2005 in Moscow, on the sidelines of the festivities of the sixtieth anniversary of the Nazi defeat, was quite fruitful as the two sides decided to set up a study group to examine the feasibility of a comprehensive economic cooperation agreement.
India-EU
The European Union, which comprises 25 European countries, has also sought a strategic partnership with India. A meeting, held in New Delhi in February this year, identified specific points in the Joint Action Plan for such a strategic partnership. Our ongoing dialogue with the EU already encompasses a wide canvas of economic activities. To further deepen our relationship, India proposes to expand this process and enhance our engagement in areas like services, industrial modernization, research and technological development, energy, maritime transport and air services. Besides the traditional areas, we also need to look at doing business with each other through joint collaborations in frontier areas of technology such as biotechnology, nanotechnology, space, IT and genome research for mutually beneficial partnerships. It is India’s desire to move increasingly towards partnership in cutting-edge technologies, in a manner that synergies India’s strengths with the EU’s capabilities.
Besides, some of the important trade agreements signed during the last one year include a free trade agreement with Thailand and preferential trade agreement with Chile. A framework for free trade agreement with BIMSTEC is also being pursued.
ITEC & SCAAP
The Indian Technical and Economic Cooperation (ITEC) and the Special Commonwealth Assistance for Africa Plan (SCAAP) also deserves mention. These two programmes together cover 156 developing countries in Asia, Africa, Eastern Europe, Central Asia, the Gulf and the island countries of the Pacific and Caribbean regions. They provide opportunities for sharing with these countries Indian know-how and technological expertise on various aspects of development.
Thus the economic diplomacy initiatives of India confine not only to greater economic and developmental cooperation at the international level but are also aimed at India playing an active role in furthering the economic interests of other developing countries. This is done not only bilaterally but also at various international organizations and multi-lateral, regional and sub-regional groupings.
Challenges
Today India is one of the most dynamic and fastest growing economies of the world. It constitutes not only a vast and growing market, but also a competitive source of technologies and knowledge-based services. Countries across the globe are beginning to see India as an indispensable economic partner and seeking mutually rewarding economic and commercial links with our emerging economy. The growing recognition of India as a dependable partner is reflected in India’s emergence as a compulsory destination in the itineraries of the world leaders.
However, talking about regional groupings we have to recognize, though sadly, that with regard to our own SAARC we have yet to go a long way. Currently, intra-regional trade accounts for only 5 per cent of SAARC’s total foreign trade and this needs to be improved. As observed by India’s Foreign Secretary Shri Shyam Saran, ‘the political lines dividing South Asia have also severed the transport and communication linkages among member countries.’ Unless we are ready to restore these cross-border linkages and transportation arteries throughout our region, the SAARC Agreement on Free Trade Area (SAFTA) may not materialise to its true potential. Shri Shyam Saran adds further, `as the largest country in the region and its strongest economy, India has a greater responsibility…. Therefore, the challenge for our diplomacy lies in convincing our neighbours that India is an opportunity not a threat, that far from being besieged by India, they have a vast, productive hinterland that would give their economies far greater opportunities for growth than if they were to rely on their domestic markets alone.”
*Director, PIB, New Delhi
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