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'Make in India is not make for India'

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S Jaishankar
Last Updated : Jun 18 2016 | 9:47 PM IST
India's approach in aligning business and strategic goals bears some similarity to the experiences of East Asian and South-East Asian polities as they traversed their path of national development. Increasingly, our foreign policy is dominated by the quest for capital, resources, technology, capabilities and best practices. When a prime minister goes to Hannover to showcase Make in India or to San Francisco to unveil Start-Up India, clearly we are entering a different era. It is one where making it easier to do business is a key element of our strategy. Today, every embassy has a designated commercial officer. We are the first port of call not just for Indian business going out, but increasingly for foreign business coming in. There is a division in the external affairs ministry tasked to handhold foreign investors. Creating a better enabling environment for business is our daily mantra. And addressing the political and regulatory impediments is very much at the heart of our diplomatic agenda.

Underlying the endeavour to align business and strategic goals is our shifting understanding of the world itself. A period of extraordinary change began with the end of the Cold War and the economic rise of Asia. It was further underlined by the 2008 crisis that brought out the redistribution of power in the global order.

With this background, it is useful to evaluate how India's capabilities and requirements will impinge on its global strategy. Let me begin with resources, in our case the most important of them being the human one. Whether India really reaps the demographic dividend or not depends on our economic growth, the expansion of manufacturing, the success of skilling initiatives and the spread of education, literacy and health. Clearly, these are policy outcomes and not a foregone conclusion. But as prospects improve, we must assess the importance of the availability and accessibility of human resources to an ageing world. While there may be political and social repercussions, the economic logic of changing production and skills centres is hard to ignore. Global trade discussions cannot indefinitely frontload goods and investments at the cost of services and labour mobility. Then, there is the question of how we see the implications of expanding manufacturing at home. Make in India is not make for India. While we may legitimately exploit our domestic market advantages, the real game is to integrate more deeply into the global supply chain and gain better market access abroad. Indeed, striking an optimal balance between these competing factors is at the heart of our trade strategy.

Insofar as our resource dependence is concerned, probably the one most worthy of strategising is that relating to energy. Not coincidentally, it is also the domain that has seen the greatest activism in our recent diplomatic interactions. Where fossil fuel is concerned, one objective is to obtain assured upstream access in producing economies like Russia, Iran, the UAE, Qatar, Mexico or Saudi Arabia. Another is to secure greater investments in downstream areas. But with the world moving towards greener and cleaner energy, and given our own commitment to shift to 40 per cent non-fossil power generation capacity by 2030, the attention is increasingly shifting to renewables.

It is, however, nuclear energy that will constitute the core of this commitment and is, therefore, central to India's approach to climate change. In that regard, we are in a position now to build on the international cooperation openings that have been negotiated in the last decade and confirmed by the settlement of the liability issue. The path is once again open to a substantial increase in domestically produced nuclear power plants while simultaneously moving forward with foreign partners. These large anticipated investments in the nuclear energy sector can, however, only happen in a climate of predictability. In particular, it would require greater certainty of trading rules and technology access. It is our expectation that membership of the Nuclear Suppliers Group can effectively address that concern. A stronger Indian nuclear industry can help make nuclear power more competitive globally. Indeed, as our own nuclear industry expands and we go rapidly beyond the 140 nuclear-related export licences that we issued last year, it is also in the larger interest that our practices are in conformity with global ones.

If assured energy is one critical enabler to sustain and accelerate growth, then better connectivity and a modern infrastructure are the second. Considerable diplomatic energies are consequently devoted to this objective where international partnerships can make all the difference. They build on infrastructure initiatives already underway, like the Delhi-Mumbai Industrial Corridor, but also on more liberal FDI policies recently put in place for key sectors like railways, ports, roads and highways.

These infrastructure developments will certainly have geopolitical repercussions. At the minimum, they would accelerate the global economic rebalancing by helping provide the foundation for India's manufacturing ambitions. But they would also correct historical imbalances, in particular, by developing our eastern coast that was so neglected during the colonial period. In the Ministry of External Affairs, we have a particular responsibility towards the conceptualisation and execution of connectivity projects relating to our immediate neighbours. Assessing the progress that we are making, I can predict that regional connectivity will advance substantially even in the next few years. So too will our access to the extended neighbourhood.

A related issue is strengthening the ability of Indian businesses to effectively compete abroad. We cannot be impervious to the global trend of batting for your business. Whether it is facilitating credit or access, undertaking networking or advocacy, this is increasingly a legitimate expectation that business has of the government. Building a Team India culture within and beyond the officialdom is very much part of this thinking. That the external affairs ministry has today specific divisions to focus on lines of credit, training and projects abroad underline this more strategic view of business.

Of all the global challenges, none has captured the world's attention more than the threat of terrorism. Whether it is its orthodox version that this city knows only too well, or the more recent cyber manifestations, the intention remains one of dominating through disruption. National resilience and systemic hardening are obviously part of the answer. But equally important are pre-emptive and responsive policies. International cooperation in that regard has consequently come to occupy a significant place in our diplomatic agenda. While this is a subject in itself, let me just state that events have shown that a reputational downgrade is as damaging for nations as for companies.
Edited excerpts from a speech, "Aligning Business and Strategic Goals" by Foreign Secretary S Jaishankar at the Gateway of India Dialogue conference, in Mumbai, on June 13

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First Published: Jun 18 2016 | 9:47 PM IST

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