The HINDU Notes – 19th June 2020

📰 India coasts to win in Security Council polls

•Neither Kenya (113 votes) nor Djibouti (78), both contesting for one seat from Africa, won a two-thirds majority.

•The two are contesting a second round. In its last bid for the UNSC seat in 2010, India had won 187 votes.

•“The strong support by almost the entire U.N. membership for India’s election demonstrates the goodwill that India enjoys in the U.N. and the confidence that the international community has reposed in India’s capability to contribute to the work of the Council,” said MEA Secretary Vikas Swarup on Thursday.

•“India will become a member of the Security Council at a critical juncture and we are confident that in the COVID, and the post-COVID world, India will continue to provide leadership and a new orientation for a reformed multilateral system,” added India’s U.N. Ambassador T.S. Tirumurti, in a video message released after the win.

•India’s term on the 15-member Council will be its eighth. Briefing the media about the win, Mr. Swarup said India would be the “voice for all those who are not represented in the Council” during its tenure. He also thanked the government of Afghanistan, which had allowed India to contest unopposed by giving up its bid for the seat in favour of India in 2013.

•“India will work with all member countries to promote global peace, security, resilience and equity,” Prime Minister Narendra Modi wrote in a tweet, thanking the members for their “overwhelming support”.

•When asked about the eight countries that did not vote for India, Mr. Swarup said India would rather focus on the vast majority that did and on its “broader canvas” on global issues. While the vote was conducted by secret ballot, Pakistan’s U.N. envoy had publicly criticised India just ahead of the vote, something Mr. Swarup described as Pakistan’s “standard norm” of “raking up bilateral issues at multilateral forums”.

•Significantly, in June 2019, both China and Pakistan had endorsed India as the Asia-Pacific grouping’s nominee.

•The victory was expected but the government had left nothing to chance in terms of an outreach including via its embassies abroad.

•Prime Minister Modi had reached out to the heads of government in more than 60 countries and at multilateral forums like SAARC (South Asian Association for Regional Cooperation) and External Affairs Minister S. Jaishankar had also lobbied other governments, The Hindu had reported.

•Earlier in June, Mr. Jaishankar gave India’s overall objective during its forthcoming UNSC tenure as an acronym ‘NORMS’ — New Orientation for a Reformed Multilateral System, making it clear that U.N. reforms, including the push for expanding the UNSC permanent membership, would be high on agenda when it assumes the UNSC seat.

📰 ‘Rs. 50,000 crore scheme for migrants’

25 public work projects will create job opportunities in 116 districts: Nirmala

•Prime Minister Narendra Modi will launch Garib Kalyan Rojgar Abhiyan on June 20 to offer immediate employment opportunities to migrant workers who have returned to their villages because of the COVID-19 lockdown, Union Finance Minister Nirmala Sitharaman said on Thursday.

•Out of an estimated 1 crore migrant workers who have returned to their villages, 67 lakh workers are expected to benefit from this scheme, a senior government official told The Hindu.

•At a press conference here, she said 116 districts across six States had been identified as those having the highest number of workers returning home after the lockdown. Public works worth Rs. 50,000 crore would be carried out in these districts to provide immediate relief to these workers.

•Mr. Modi will launch this scheme through videoconference from Telihar village in Khagaria district of Bihar, where the Assembly election is due later this year. Chief Minister Nitish Kumar and Deputy Chief Minister Sushil Kumar Modi will join the event.

•Apart from Bihar, the States that have been seen a rush of migrant workers returning are Jharkhand, Uttar Pradesh, Madhya Pradesh, Odisha and Rajasthan. The Chief Ministers of these States and the Union Ministers of the Ministries concerned will also take part at the launch of the scheme.

‘Skill sets mapped’

•“The Central and State governments have very meticulously mapped the skill sets of the migrant workers who have returned in large numbers to the 116 districts in 6 States,” Ms. Sitharaman said.

•Workers will be employed in rural housing, rural connectivity including the Pradhan Mantri Gram Sadak Yojana, national highways, railway works, community sanitation complex, gram panchayats, anganwadis, water conservation, digging of wells, plantation and horticulture. “Within 125 days, for 116 districts, nearly 25 schemes of the government will be brought together under the Garib Kalyan Rojgar Abhiyan. We will reach saturation levels for each of those schemes within those 125 days,” Ms. Sitharaman said.

•The Finance Minister said each of the 116 districts had a minimum of 25,000 migrant workers, but the number varied from district to district.

•The scheme will see a coordination between 12 different Ministries/Departments, such as Rural Development, Panchayati Raj, Road Transport and Highways, Mines, Drinking Water and Sanitation, Environment, Railways, Petroleum and Natural Gas, New and Renewable Energy, Border Roads, Telecom and Agriculture.

•“This campaign of 125 days, which will work in a mission mode, will involve intensified and focussed implementation of 25 different types of works to provide employment to the migrant workers on the one hand and create infrastructure in the rural regions of the country on the other,” a statement from the Prime Minister’s Office (PMO) said.

📰 Excavation at Kodumanal reveals megalithic belief in afterlife

250 cairn-circles identified at village in Erode district

•The Kodumanal excavation of 10 pots and bowls, instead of the usual three or four pots, placed outside three-chambered burial cists and inside the cairn-circle, threw light on burial rituals and the concept of afterlife in megalithic culture.

•A team from the State Department of Archaeology, Chennai, led by J. Ranjith, Archaeology Officer and Project Director for the Kodumanal excavation, has identified 250 cairn-circles at the village in Erode district. Earlier excavations revealed that the site served as a trade-cum-industrial centre from 5th century BCE to 1st century BCE.

•The rectangular chambered cists, each two metres long and six metres wide, are made of stone slabs, and the entire grave is surrounded by boulders that form a circle.

•“The grave could be of a village head or the head of the community as the size of two boulders, each facing east and west, are bigger than other boulders,” said an expert coordinating the excavation. Believing that the deceased person will get a new life after death, pots and bowls filled with grains were placed outside the chambers. “This is probably the first time that 10 pots have been found near the cists during excavations in the State,” the expert added. Further digging in the burial chambers and the opening of the pots are expected to reveal more details.

•Previous excavations have revealed that multi-ethnic groups lived at the village, located about 500 metres away from the Noyyal river.

•Mr. Ranjith told The Hindu that the findings unearthed so far include an animal skull, possibly of a wolf or a dog; precious stones like beryl, carnelian, quartz, jasper, beads, gold pieces and needles; copper smelting units; the mud walls of a workshop; potteries; and Tamil Brahmi script. “We also found pieces of grooved tiles at a trench. Further excavation will reveal more,” he said.

📰 At the high table

India must adopt value-based positions at the UNSC and be the voice of the weaker nations

•India’s election to the UN Security Council as a non-permanent member is a significant diplomatic victory for the country, which has long been pushing for reforms at global institutions. The victory wasn’t unexpected as India was the only contestant for the Asia Pacific seat. But the Indian foreign policy establishment took no chances as the election would be done by secret ballot at the UN General Assembly and two-thirds of the votes were needed for victory. India secured the seat with 184 votes in the 193-strong General Assembly. Mexico, Norway and Ireland were also elected as non-permanent members. While Mexico won the Latin American seat uncontested, Norway and Ireland emerged victorious from a three-way contest for the Western Europe and Others Group seat. Canada failed to win enough votes in this group. Neither Kenya nor Djibouti, which were contesting the seat from Africa, won a two-thirds majority. They will face another vote. India sought the support of member countries by highlighting its commitment to multilateralism and reforms. Ahead of the vote, India had launched a campaign brochure which highlighted its demand for transparency in mandates for UN peacekeeping missions and push for the India-led Comprehensive Convention on International Terrorism, and called for joint efforts for UN reform and expansion of the Security Council. A “new orientation for a reformed multilateral system” (NORMS), as laid out by External Affairs Minister S. Jaishankar, would be India’s overall objective during the two-year tenure that will begin next year.

•Achieving this would depend on how India will conduct diplomacy in the global body, build alliances and raise issues that go beyond the interests of the big five. India has long been of the view that the structure of the UN Security Council doesn’t reflect the realities of the 21st century. It has also got increasing support from member countries for its push for reforms. But the five permanent members of the Security Council have resisted these attempts. The COVID-19 pandemic has already shaken up the global order and sharpened the rivalry between the U.S. and China. It has also opened up fresh debates on strengthening multilateralism and multilateral institutions. In this context, the challenges before India are many. The Security Council is one of the most important multilateral decision-making bodies where the contours of global geopolitics are often drawn. India should avoid the temptation of taking sides at a time when the Security Council is getting more and more polarised. To serve its interests and push for its agenda of multilateralism and reforms, India should adopt value-based positions that are not transactional, aspire for the leadership of the non-permanent members of the Council and be the voice of the weaker nations.

📰 Galwan: Postscript to a tragedy

Apart from insisting on a timely and early clarification of the LAC, India should take a long view of its South Asia policy

•The night of June 15, 2020 will go down in the annals of Indian history as one steeped in tragedy. Twenty Indian Army personnel, including the Commanding Officer of 16th Bihar Regiment, lost their lives at the hands of Chinese troops in the Galwan Valley of Ladakh. The incident represents a watershed in India’s relations with China and marks the end of a 45-year chapter which saw no armed confrontation involving loss of lives on the Line of Actual Control (LAC). The period of bilateral relations that was inaugurated with former Prime Minister Rajiv Gandhi’s visit to China in December 1988 also drew to a close in the darkness of that fateful Monday night.

•The incident has deeply shaken the nation. It had been assumed all along that there would be a de-escalation of the confrontation between Indian and Chinese troops in the area after the Corps Commander-level talks between the two sides on June 6. That things went terribly wrong is more than evident. What is the import and significance of what happened in Galwan Valley on June 15? Can it be business as usual with China after this? That would seem unlikely given the manner in which the whole calculus of relations has been disturbed by the incident.

From 1959 to 2020

•Nothing on this scale was witnessed even in the run-up to the conflict between the two countries in 1962. In October 1959, there was a face-off between Indian and Chinese troops at Kongka La. Nine Indian soldiers were killed and three soldiers were detained then, including the legendary Karam Singh, the leader of the group who recorded after his release the ill-treatment he and his colleagues had been subjected to at the hands of their captors. It was after Kongka La that the national mood turned against the Chinese in full measure in an atmosphere already complicated by the revolt in Tibet and the granting of asylum to the Dalai Lama in March 1959. There was very little room for a reasoned, negotiated settlement being reached on the boundary question between the two countries after that juncture. The rest is history. The conflict in 1962 inflicted gaping wounds on the national soul and prestige from which India took time to recover.

•Is the country at a similar juncture today? 2020 is not 1959. India and China are in a very different place in their history as nations today. They have grown immensely in strength and stature on the world stage and their relations have substance and a diversity of content in a manner absent in the 1950s. To assume that India is on a steep descent from here towards a full-blown conflict with China may therefore be an oversimplification. Both countries must stop that fall despite the terse messaging of statements issued in the two capitals after the incident. The statements are mutually accusatory, with each country disclaiming responsibility for the tragic turn of events. The mood is very sombre.

Assessing choices carefully

•Cool-headed thinking is the need of the hour. All this comes at a time when the COVID-19 crisis demands the full attention of the government, the economy needs to recover from the stagnancy of the last few months, the tensions with Pakistan persist, and a dispute over territory with Nepal in the Lipulekh/Kalapani area has been headlined. There is considerable turbulence generated by all this. Even as we mourn the loss of Indian personnel in Galwan Valley, a reincarnated battlefront with China cannot be blindly embraced, however much national pride and prestige are at stake. The implications of such a choice must be carefully assessed. The instant gratification that an eye for an eye may provide, because we have scores to settle, has its attendant complications.

•Strong political direction, mature deliberation and coherence are keys to handling the situation. The Army can make tactical adjustments and manoeuvres to deter the Chinese, but a comprehensive China strategy and its determination should devolve on those tasked with national security policy in the highest echelons of the Government of India under the direction of the Prime Minister. The responsibility of effective strategic communication too rests there. A clearer enunciation of the circumstances surrounding Chinese transgressions in Sikkim and Ladakh in the last few months would have been helpful in guiding the scattershot public debate. Were there early warning signs of the seriousness of the situation that could have been defused at the military, diplomatic and political levels so that the disaster could have been averted? We must draw the right conclusions that can help us in the future. The Opposition must not play politics on this issue.

Turning to the future

•It is to the future we must turn. It is India that should take the initiative to insist on a timely and early clarification of the LAC. Pockets of difference of alignment as perceived by each side have to be clearly identified and these areas demilitarised by both sides through joint agreement pending a settlement of the boundary. At the same time, India must stand resolute and firm in the defence of territory in all four sectors of the border. Contacts between the two militaries — joint exercises and exchanges of visits of senior Commanders — should be scaled down for the foreseeable future. A border settlement is not envisaged in the short or medium term.

•Bilateral relations in other areas will be under considerable strain and soft landings cannot be expected. No leadership-level contact between the top leaders of the two countries can be envisaged in the near term and there is no need for any haste on that front. Diplomatic channels must continue to be open and should not be fettered in any way because their smooth operability is vital in the current situation. Indian businesses in China and Chinese business operations in India can expect the going to be tougher than before. The scenario on trade and investments could encounter similar obstacles. In any case, in areas that impinge on national security, as in the cyber field and in telecommunications, and in technologies that enable spying and surveillance (5G, for instance), stringent controls, exclusions and clampdowns can be expected in the treatment and the entry of Chinese companies in India.

Taking the long view

•But beyond all this is the outside world. India’s leverage and balancing power within the Indo-Pacific and the world beyond stems from its strong democratic credentials, the dynamism of its economy, its leading role in multilateral institutions, and the strategic advantage of its maritime geography — an asset possessed by few other nations, and which must be deployed much more effectively to counterbalance the Chinese ingress into this oceanic space that surrounds us. The events in Galwan Valley should be a wake-up call to many of India’s Asian friends and partners enabling a high-resolution envisioning of Chinese aggressiveness. This is also an opportunity for India to align its interests much more strongly and unequivocally with the U.S. as a principal strategic partner and infuse more energy into its relations with Japan, Australia, and the ASEAN. The time has also come for India to reconsider its stand on joining the Regional Comprehensive Economic Partnership. If India is to disengage from economic involvement with China, and build the capacities and capabilities it needs in manufacturing, and in supply chains networks closer home, it cannot be a prisoner of the short term. It is time to boldly take the long view in this area as also on its South Asia policy. Good neighbourhood relations are crucial for national stability and well-being.

📰 Mediation in the age of COVID-19

Online mediation has a host of advantages, but also bears some cautioning

•We live in strange times. Old certainties have given way to new uncertainties. Down the ages, Lady Justice, sword in one hand and eyes blindfolded, has been pretty much like the Rock of Gibraltar, ensuring stability, but also being resistant to change. One bug, christened COVID-19, comes along and the Lady is reeling. At the heart of the adversarial system is advocacy performed in open setting, in full gaze of clients and fellow lawyers, and that has dictated modes of thought and approach and behaviour, all integral to the system. Justice must not only seem to be done, but judges must also be seen while they are engaged in the task of doing it. But presence in numbers necessitates proximity, and now proximity spells danger. Deprived of their natural setting of the courtroom, judges and lawyers have fallen back to talk of virtual courts, so that the bare essential is achieved — the judge being able to hear the particular lawyer. All other features of the courtroom are eschewed, and thus an essentially public setting is converted to a closed door one. It is, and will remain, unsatisfactory.

A new kid on the block

•There is, however, another tool in the dispute resolution armoury, which is resistant to COVID-19, and perhaps could even thrive on it. That is mediation, which is the polar opposite of the court process. It tries to achieve consensus between parties to come to an amicable agreement, rather than the win-lose verdict of the adversarial system. At its core is confidential discussion between mediator and parties, and between mediator and individual parties. It focuses on uncovering interests, and eliciting suggestions from the parties themselves for practical solutions to end the dispute. As much as the essential attribute of the formal justice system is the open courtroom hearing, mediation’s essence is closed door communication with its guarantee of confidentiality. And, important in the present context, it has an inherent flexibility and adaptability.

•As a process, structured mediation is a new kid on the block, with an existence of barely two to three decades in India, and just a few more worldwide. Conventional litigation and arbitration are vintage, spanning hundreds of years and generations of judges and lawyers. Mediation, however, is an idea whose time has come and is rapidly gaining ground. Legislation has given it the legal structure and safeguards, and provided the assurance that the courts will implement mediation agreements. India’s judges have been enthusiastic embracers of this process. Lawyers, steeped in adversarial ways, have surprisingly warmed up to a system which is its antithesis.

Convenient and cost-effective

•Online mediation will enable the mediator and the parties to assemble together, each on their computer screens perhaps hundreds of miles away. Discussion can be guided, giving parties and lawyers the opportunity to put forth their views. When separate meetings are required, the mediator can, at the click of a button, move the other party and its lawyer to another virtual room. The great advantage of online mediation is that it is convenient, cost-effective and an efficient use of time. Parties do not have to bear costs, do not have to travel, do not have to wait long hours, and do not have to undergo adjournments and multiple visits to the mediation centre. Much can be done by using this medium to get faster results.

•What will be missing in this process is the immediacy, directness and complete contact that is possible only in face-to-face meetings. On the other hand, it may also be that in an online process, we are giving the participant a little cocoon of safety, when we create this grainy barrier of two screens and an intermediate world of Internet and WiFi. It will certainly be of benefit in cases where emotions run high and face-to-face confrontation may increase the conflict. That happens often in matrimonial cases, and in family business disputes, where tempers and emotions arising from frayed domestic situations and settings can edge out sensible business logic. Similarly, where parties are located in different countries, we would have done away with difficulties of distance when we adopt this mode. As the new rash of webinars shows, it is easy to get people from different locations on to one platform.

•Online mediation has a host of advantages, but also bears some cautioning. Confidentiality can be compromised since hearings could be recorded; service providers have to be vigilant, and rules will have to penalise participants for breach. Technical glitches have to be minimised, and Internet services must gear up for providing screen clarity and uninterrupted feed. But above all, there is the apprehension that online communication will exclude the underprivileged, those who cannot afford access to Internet or do not have the capacity or assistance to use it. Such exclusion will be tantamount to denial of access to justice. If the State and its Courts are going to allow and encourage online mediation to resolve disputes, weaker parties must be assisted and enabled to avail of this facility.

•As we meander in the dark to find out what the new normal is going to consist of, we may well discover that a good part of the world of dispute resolution has been flipped, and that COVID-19 is the harbinger of change taking online consensual resolution to a higher level. Perhaps, this cloud too has a silver lining.

📰 Can India decouple itself from Chinese manufacturing?

India faces challenges linked to infrastructure and skill sets; and its policies are unpredictable

•The border clashes with China and the COVID-19 pandemic have reignited questions about India’s dependence on Chinese manufacturing. India’s imports from China in 2019-2020 reached $65 billion, out of $81 billion two-way trade. Is the pandemic, as Union Minister Nitin Gadkari said last month, a “blessing in disguise” for Indian manufacturing? Will companies be able to move deeply integrated supply chains out of China? In a discussion moderated by Ananth Krishnan , Biswajit Dhar and Amitendu Palit discuss the options and the challenges ahead in India’s efforts to boost manufacturing. Edited excerpts:

It has been more than five years since India launched the Make in India initiative. If we look at India’s dependencies on China as one barometer, how would you assess where we are now?

•Biswajit Dhar (BD):I think that the Make in India initiative was a good opportunity for us to get our manufacturing sector back on track. I don’t think that we have taken advantage of what we had planned. In the past five years, what we have seen is that the dependency on China has actually gone up.

•Amitendu Palit (AP):What we are seeing is for a variety of reasons, India’s dependence on imports is getting to be localised, in the sense that there is not a wide diversification of countries from which India is sourcing. For example, if you look at critical medical supplies which India has been importing for frontline healthcare workers in the COVID-19 battle, most of these come from China. Aside from China, there are probably three or four countries on which India’s dependence is increasing. China is by and large widespread across different concentrations. To that extent, it’s going to be a difficult choice for India to get out of this dependence.

What are some of the concentrations?

•AP:First, regarding capital goods, Indian manufacturing is dependent on supplies from China. This includes a wide variety of machineries, including electrical machinery, semiconductor-driven machinery etc. We import fertilizers from China. Limited value consumer goods have flooded the market. Where the criticality actually comes in is when there are a number of imports which are not really a matter of choice but which are essential. For example, if you look at humidifiers, which are being utilised in the COVID-19 battle, China is again the main source. For medical masks, China is the main source. Even for something like liquid soap, which is very much highly required across the country today, China again happens to be the main source of the supplies. We need to look at the whole situation very clearly and probably prioritise in terms of what are the areas where India can relatively more easily move back away from the dependency it has on China, and what are the areas where it will take much longer.

The conventional wisdom is we should aim to replicate what China did in the 1990s. But how different is the global environment from 30 years ago when China was opening up?

•BD:Global value chains today are looking quite different. What the data suggests is global value chains are in fact becoming more local. Countries are depending more on their own economies rather than on global markets. This is an impact of the great recession of 2008. I don’t think that the strategy that China followed, which was a global market-driven industrialisation strategy, an export-driven strategy, is going to be a reality anymore. Policymakers keep making these statements, that we are going to become more open and we are going to be relying more on the global markets. Unfortunately, that possibility has now passed.

•AP:If one looks at why China is so central to a very large number of global and regional supply chains, there are two elements to it. The first is the fact that China does offer the capacity to businesses to develop the supply chains by considerable lengths within itself. This is not just because of the geography that it has, but also because of the fairly wide broad-basing that it has developed over different sectors, and by and large in most products. China’s biggest value comes as a final stage assembler. China has also become a major consumer for final products. So when we look at value chains today, let’s say in a post COVID-19 situation, the emphasis on the part of businesses is to make these chains shorter, more resilient, more durable, and locate them closer to the final demand markets. Now, this is where I think we often overlook the importance of China. China continues to remain a major source of the final demand market. As a result of which, shifting physically supply chains out of the Chinese geography and its connected arms — I refer to Hong Kong and Taiwan — is going to be pretty difficult because the geography offers a tremendous amount of what in economics we call agglomeration advantages.

We have seen companies moving out, although mainly to South-East Asia. Even assuming there is limited relocation that we can absorb, what should be our policy priorities?

•BD:We need to ask why is it that there has always been a huge gulf between FDI inflows into China and into India, and why is it that we have been attracting so little despite being one of the most open economies, and despite being a country which offers very attractive terms to foreign investors. The Make in India strategy talked about FDI in manufacturing, but if you look at the data and see which sectors have been preferred by the foreign investors, you’ll see it’s the service sectors. And many of these sectors are those where India does not need any investment, for instance IT services. I think the reason is clear, and that is there are skill set problems in India. Foreign investors get into the sectors where there are acknowledged skills, for instance in IT. But we don’t have similar skill sets in manufacturing. The second issue is infrastructure. It’s not just about having a good policy, but you need to have the infrastructure in place so that the foreign investor can make profits. There is a view that since the wage rates are low, investment is going to come here. That’s not true. We all know that it’s actually productivity-linked wages that matter, and productivity in India is pretty awful. We can talk about offering land, but I don’t think that land is an issue because from 2005, after we announced our special economic zones policy, the government of India has gone and acquired land all over the place. There is also the red tape. It’s not enough to say that we are going up the ease of doing business rankings. We know what the situation is on the ground.

We often hear industries calling for labour reforms, and complaints that in India labour unions are too powerful and it should be easier to hire and fire workers. Is that the issue, or is it a skills issue?

•BD:It is actually easy for industries to hire and fire. If one lesson COVID-19 has taught everyone, it is that there’s virtually no labour laws in this country. Labour was retrenched at the drop of a hat. The reverse migration we are seeing is because of this problem. This is a false kind of a narrative that has been parroted time and time again, that we need more flexibility.

•AP:If you look at the kind of FDI that India has been getting over the last three to four years, and the big ticket FDI, whether it is Walmart’s acquisition of a large stake in Flipkart, or that of Facebook in Reliance Jio, all of these are essentially intending to acquire existing assets. None of these are in the nature of building a boat from scratch in terms of the typical greenfield investment, which is capable of creating substantial jobs.

One thing India can probably offer that other countries in South-East Asia cannot to the same degree, is the market. Can we leverage that better?

•BD:The unfortunate reality is we have not cared to harness the dominant domestic market adequately. And this is linked to our overall strategy of increasing the manufacturing sector, allowing the sector to absorb more labour, especially from agriculture, and so easing the burden of agriculture, and then having a more resilient manufacturing sector, and reducing the dependence on countries like China. What we are finding is that since none of these things have actually fallen in place, we find that the unemployment rate has actually gone up. And the direct implication of this increase in unemployment rate is that the domestic market has shrunk. And we’ve been seeing that growth was tapering off even before COVID-19. At the end of the day, if you have to create your own market, you got to have enough demand on the ground.

Is there a contradiction between India aspiring to become a lynchpin in global supply chains and being wary about trading agreements?

•AP:Even if we go by what India’s stated objective is, that is reduce dependency on China and work towards relocation of supply chains with like-minded partners, countries like Japan, Korea, Vietnam, those are all members of RCEP [Regional Comprehensive Economic Partnership], which is going to be concluded without India. And they’re all going to work on the same rules of origin, which this agreement is going to give them. What I am trying to reconcile, and I am unfortunately failing to, are these contradictory sets of objectives, with India looking to position itself as a hub and working to relocate supply chains along with a group of countries, but with countries which are part of a completely different sub-regional understanding. The question India needs to answer upfront is, is it going to stay engaged with the trade agreements or not? There could be two elements to this — reduce dependency on China, and reduce dependency on the rest of the world. Just reducing dependency on China has one set of implications, but reducing dependency on the rest of the world is an approach that will drive you up the road of economic nationalism.

•BD:I think we are going to go more towards the road of economic nationalism. There have been very clear signals in the last few years. India has gone more protectionist, and the average tariffs have actually gone up. There have been statements made by the major Ministers saying that we need to promote domestic goods, we need to shun imported goods, and even products made by foreign companies. That is very, very disturbing. If for everything, we start talking about indigenisation, that means we are trying to go down the path of import substitution. In this day and age, you can’t really do that. There are practical problems, because in order to go down that path, you have to garner huge resources which India doesn’t have. One thing which is very important for any country today is that policies must be predictable and transparent. Unfortunately, we seem to have neither.