With countries no longer bound by ideological considerations, but by economic priorities, commerce will have to lead diplomacy said Nirmala Sitaraman, Minister of State for Commerce and Industry. Trade between nations, which leads to greater integration, lowers potential for conflict, she added.
Sitaraman was speaking at the launch of a new book titled "India and the World - Essays on Geoeconomics and Foreign Policy", by Sanjaya Baru, an economic and political analyst.
Baru, who was also media advisor to former Prime Minister Manmohan Singh, contested the notion held by many that the 21st century belongs to China, whose rise shall challenge the existing unipolar world order dominated by the US. "The 21st century will not be dominated by one country but rather by many like India, Brazil, Turkey. The challenge before India is how to manage this multi- polar world," he said. How the world shapes up is extremely critical for India as it looks to negotiate Free Trade Agreements (FTAs) in order to gain access to world markets to boost its exports.
Shedding light on the complexity in trade negotiations in a multi-polar world, Sitaraman said, "In international negotiations it is likely that groups of countries may agree with you on some issues but on others they will differ. When negotiating on trade you may have agreements, but beyond that there are issues". Shyam Saran, former foreign secretary of India, who was also a panelist at the launch, cautioned that today's economic environment had changed. The rapid rise of China he noted coincided with a positive economic environment. India too benefitted from a positive environment when global trade was soaring.
"But today the situation has changed with protectionism gaining traction across major markets and with world trade growing at a slower pace than world GDP" he said. In such a scenario, it is difficult to see how an export oriented strategy will propel growth to the extent that has been observed in the case of other Asian economies. In such a scenario, as Saran noted, one needs other drivers of growth.
