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Economic nationalism in motion:
Steel, auto, and software
industries in India
Anthony P. D'Costa
a
a
Asia Research Centre, Copenhagen Business School ,
Frederiksberg, Denmark
Published online: 11 Nov 2009.
To cite this article: Anthony P. D'Costa (2009) Economic nationalism in motion: Steel,
auto, and software industries in India, Review of International Political Economy, 16:4,
620-648, DOI: 10.1080/09692290802467705
To link to this article: http://dx.doi.org/10.1080/09692290802467705
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Review of International Political Economy 16:4 October 2009: 620–648
Economic nationalism in motion: Steel,
auto, and software industries in India
Anthony P. D’Costa
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Asia Research Centre, Copenhagen Business School, Frederiksberg, Denmark
ABSTRACT
With increasing economic interdependence, the scholarly treatment as well
as the practice of economic nationalism is either seen as theoretically redundant or practically impossible. Contrary to this conclusion, I argue that
economic nationalism is not inconsistent with globalization. States are not
only active participants in globalization but they continue to strategically
express nationalism in new global settings by supporting national firms and
citizens overseas. By redefining economic nationalism from protectionism
to the leveraging of national resources to secure economic benefits from the
world economy, this paper provides an alternative view of economic nationalism. This paper analyzes economic nationalism as a dynamic concept.
Empirically, it takes up three Indian industries (steel, auto, software) since
1950 to understand how nationalism was practiced and how it has changed
under globalization. The paper establishes India’s pursuit of economic nationalism under globalization through its support of Indian businesses and
citizens abroad. Though the coherence of nationalism may be weak, it can
still be expressed in looser forms of national ‘presence’ abroad.
KEYWORDS
Economic nationalism; globalization; India; industry transformation.
INTRODUCTION
With increasing economic interdependence, the scholarly treatment as well
as the practice of economic nationalism is either seen as theoretically redundant or practically impossible (Reich, 1992). The flows of goods and
services, capital, technology, and the international mobility of people are
undermining the nation-state, particularly peripheral ones, which have
inherited weak states since the colonial era. The regulatory mechanisms
generally available to states are becoming less effective due to the porosity
Review of International Political Economy
C 2009 Taylor & Francis
ISSN 0969-2290 print/ISSN 1466-4526 online http://www.informaworld.com
DOI: 10.1080/09692290802467705
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D’COSTA: ECONOMIC NATIONALISM IN MOTION
of national borders and past inward-looking models of development have
been challenged by newer forms of outward-looking competitive strategies
in the global economy. Also, IMF-imposed structural adjustment programs
in many indebted countries have coerced them to adopt market-friendly
neo-liberal policies. These developments suggest that economic nationalism today, as we have known it, is harder to justify intellectually and
practically.
Broadly this storyline is theoretically and empirically valid. Both Organization for Economic Cooperation and Development (OECD) and developing countries have adopted a wide range of deregulatory mechanisms
and consequently have reduced the state’s social policy space. But this
reading also suggests that there is a zero sum game between globalization
and economic nationalism and that economic nationalism and social development are positively related. I argue that even under globalization,
economic nationalism in subtler forms can be practiced. Furthermore,
the perception that past economic nationalism has transformed peripheral countries fundamentally is untenable. While policy space designed to
enhance national social well-being through welfare-type policies is compromised due to greater conformity with global market imperatives and
reduced state prerogative over price discrimination, states could seize new
opportunities in the global economy. Such repositioning can be theoretically argued to enhance legitimacy of states and thus create a new basis for
social well-being. For example, the Japanese, South Korean, and Taiwanese
states have intervened relentlessly to exploit strategically opportunities
available in the global economy for national development (Amsden, 1989;
Gold, 1986; Johnson, 1982). The Chinese state is similarly situated with its
economic success even as it has abdicated some of its social commitment.
But economic nationalism continues to be pursued through capital account
controls and promotion of Chinese enterprises abroad. As such, it would
be difficult to argue that China and the Chinese have not benefited from
global participation even as new social challenges continue to confront the
state.
The theoretical question is how weakening states in a neo-liberal era can
practice economic nationalism, given that states must adapt to global market pressures. It means that states cannot pursue discriminatory policies in
favor of national capital and have the same latitude in their social spending priorities. However, this question also rests on the unrealistic premise
that states are inherently competent to enact favorable social policies in the
absence of global economic pressure. The post-World War II development
experience illustrates the tremendous difficulties states have faced in transforming their societies. Also, the poor and the dispossessed in developing
countries typically find the state to be unhelpful and therefore weakening states under globalization is a non sequitur. The broad experience of
most developing countries has been the inability to translate economic
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REVIEW OF INTERNATIONAL POLITICAL ECONOMY
nationalism into meaningful social transformation. Hence, the blind faith
in state benevolence resulting from expanded social policy space due to
economic nationalism could be questioned.
My contention is that, in order to capture economic nationalism in an integrating world, the definition of economic nationalism must be modified –
from one of protecting domestic capital from foreign capital to leveraging
local resources for extracting economic benefits from the global economy.
It is beyond the scope of this paper to address whether the reduction in
policy space could be offset by the gains from economic integration. However, it does indicate that economic nationalism could take an offensive
form that promotes national capital abroad rather than protects national
capital at home. Most developing country states are incapable of making
this transition hence the loss in what little protection they enjoyed under economic nationalism becomes highly visible. Those states, endowed
with certain inherent state capacities built up from earlier experiences of
economic nationalism, are better placed to make the transition to globalization and thus have a greater ability to extract economic benefits from
the global economy (see Seers, 1983: 56). Whether the gains from participation are translated into economic and social benefits for the wider society
are contingent on both the ability and willingness of the state to commit
resources for social purposes. The ability is partly dependent on how well
it can leverage its resources to extract gains from emerging global opportunities, while the commitment in a democratic society is driven by the
domestic political imperatives of state legitimacy. Hence, distributive justice, notwithstanding its immediate erosion, can be expected to continue
to be the hallmark of national purpose.
To account for this new role of the state, economic nationalism, typically expressed in opposition to foreign capital, must be seen as a dynamic
concept. This implies that economic nationalism can be consistent with
globalization, with the caveat that its practice and subsequent outcomes
could be inconsistent with wider social benefits.1 To demonstrate economic
nationalism as a dynamic concept I analyze India, which has historically
demonstrated its penchant for conventional economic nationalism but today champions global engagements. Three industry cases from India are
used to capture the fluidity of nationalism. These industries – steel, auto,
and software – represent a continuum in which the concept of economic
nationalism is dynamically captured for India (1950–present). The steel
industry represents the classic form of economic nationalism, whereas the
software sector is a good illustration of India’s global presence. The automobile industry represents an intermediate case where the state’s orthodox
practice of nationalism was initially reinforced through state ownership
before giving way to internationalization. Today, all three sectors are globally situated and variously leveraged by the state for both economic and
political benefits.
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There are at least three methodological objections to this approach of
analyzing economic nationalism. First, individual capitals represented by
specific industries cannot equate national capital as a whole. Hence, the
promotion of one industry cannot be representative of economic nationalism in general. For example, extending this logic, the promotion and success of the Indian software industry under a liberal regime can be argued
to have come at the expense of the hardware sector, which was protected
until then. Second, the choice of sectors represent different time periods
with varying trajectories in which the policy environment was under flux,
one might say progressively becoming more liberal. Therefore, a criticism
could be that such a mix of industries is unlikely to reveal any particular
pattern. Third, in capturing economic nationalism dynamically there is an
inherent danger of definitional looseness, implying that nationalism could
be discovered under all circumstances.
These criticisms are on the mark. However, in a mixed economy if we
conceptualize the role of the state as one of orchestration of economic activities (including that under the private sector) it is self-evident that some
capital will be more influential than others. The state is interested in reproducing the structure of accumulation as a whole, not supporting each and
every fraction of capital. Propping up some capital (i.e. leading sectors)
could shape the development trajectory. Therefore, industrial restructuring, allowing some sectors such as the hardware industry to disappear
and others such as software to emerge, is fairly normal, not only under
capitalist dynamics but also from a policy interventionist point of view.2
Regarding the second and third objections, I would reiterate that the purpose of the paper is to capture economic nationalism in motion. If it can be
demonstrated that the state continues to pursue strategies resting on national resources to secure advantages from the world economy, this shows
that there is a continuity of economic nationalism even under changing
circumstances.3 There is no reason to adhere to a rigid understanding of
economic nationalism and thus fail to uncover newer forms of nationalism
when they do exist empirically. Even Friedrich List, the nineteenth-century
orthodox protectionist, was in reality interested in the international economic linkages that would spring from the domestic market. By this logic,
economic nationalism via tariffs and subsidies was expected to lead to international competitiveness (Ho, 2005). Under such a scenario the state can
be anticipated to pursue new complementary policies that have not been
part of the policy repertoire of an earlier form of economic nationalism.
For example, today the Indian state is leveraging its expatriate population
for investment, remittance income, knowledge transfer, and even to lobby
foreign governments on behalf of national capital.
The paper is divided as follows. The next section briefly theorizes the
shifting relationship between the state and economic nationalism. The section ‘The Indian state and economic nationalism in motion’ has three parts.
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The first presents the economic rationale for nationalism in India, which
is the balance of payments (BOP) concern. The second part briefly analyzes the changing policy contexts for the three sectors chosen to illustrate
past forms of nationalism in practice. The third part shows how the three
sectors today reflect a new form of nationalism in a globalizing context,
namely using national resources to secure economic and political benefits
from the world economy.
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ACCOUNTING FOR ECONOMIC NATIONALISM UNDER
GLOBALIZATION
For the purposes of this paper, the critical question is how economic nationalism can be consistent with globalization. This has been addressed by
several authors (Helleiner and Pickel, 2005; Jones, 2000; Marshall, 1996).
The basic argument is as follows: states facilitate the process of adjustment
to globalization by selective reforms and continued protection of domestic firms (Nayar, 2001). Furthermore, ‘the relationship between the nation
state and economic nationalism. . . [evolves] over time’ (Bhaduri, 2002: 39–
40). What these authors do not address is whether the global engagement
of the state based on national resources via national firms and citizens can
be construed as economic nationalism.4
At a rudimentary level economic nationalism is largely about economic
security and national well-being in a competitive capitalist world economy.
One way of assuring such security is national economic independence
from foreign influences and the eradication of economic and social backwardness (Mukherjee, 2002: 432; Seers, 1983). Many developing countries,
including India, adopted the import substitution industrialization strategy, which encouraged domestic market development in anticipation of
BOP challenges. Proponents such as Raul Prebisch saw both declining
terms of trade and lower income elasticity of typical commodity exports
as detrimental to national economic development (Seers, 1983: 52).
Recently, other kinds of economic nationalism such as ‘monetary nationalism’ and ‘technonationlism’ have emerged due to heightened global
competition (Hieronymi, 1980: 11–12; Ostry and Nelson, 1995). Technonationalism is a good example of how an orthodox version of economic
nationalism is transformed by a focus on a national innovation system but
which encourages links with global developers of technology in an open
economic system (Ostry and Nelson, 1995: 28–35; my emphasis).
Faced with industrial and technological backwardness and heavy dependence on the primary sector, structural problems of BOP imbalances
were inevitable and concerned states were acutely aware of this weakness.
Persistent trade deficits were not compensated by greater capital inflows
due to the nationalist stance on foreign participation. Furthermore, export
pessimism added to the BOP concerns (Cypher and Dietz, 2004). However,
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D’COSTA: ECONOMIC NATIONALISM IN MOTION
changes in the new international division of labor, brought about by multinational investments and an export orientation, have induced a rethinking of development policy in favor of global integration. Additionally,
the maturity of capitalist economies in selective developing countries has
also contributed to their greater global integration, which Hoogvelt (1997)
refers to as a ‘reconstituted core’. One could hypothesize that former peripheral states such as India and China are nascent members of this reconstituted core. Under these changed circumstances economic nationalism
cannot be understood in the usual way. Rather it must be seen as a dynamic
concept resulting from policies in a ‘specific historical context’ (Pickel, 2005:
8). As such economic nationalism is no longer about fending off multinationals but determining how best to collaborate with them (Dicken, 2007).
Theoretically, acquiescing to global expectations theoretically might
spell disaster for state autonomy. But this position rests on the assumption that only one kind of economic nationalism, namely, protection of
domestic businesses from foreign ones, provides space for social policy.
It does not entertain the possibility that gains from global participation
could enhance national capital and give the state additional flexibility to
utilize its national assets better and also have more resources at its disposal for distributive justice. Thus, economic nationalism must be seen
as a process of adapting to market forces or shaping them to the state’s
advantage (Bhaduri, 2002: 25). This implies that economic globalization
does not necessarily weaken the state (Nayar, 2001: 14–15).
Of course, there are costs in making adjustments. In an imperfect world
any process of adjustment will entail constraints and it is obvious that
some groups pay a higher cost of adjustment than others. However, open
political systems are likely to mobilize popular voice to reverse the erosion
in social policies and governments can be politically made to respond favorably. The benefits accruing from the global economy could compensate
for the losses incurred due to the erosion of state sovereignty.
The possible objection that global market participation results in reduced
state sovereignty is nominally correct but only as long as it does not account
for what the state does in response to this erosion of social policy space.
Consider China’s global presence. Its high export growth, and thus massive
foreign exchange reserves, gives it considerable spending flexibility in
social projects. In India the story is similar on a smaller scale. No political
party in India can completely ignore the plight of the poor, given the
populist budget passed by the current alliance led by the Congress Party
in advance of the general elections in 2009. Furthermore, for the first time
there is a ‘scramble for Africa’ by China and India to secure crucial raw
materials on national grounds. This is a reversal of the role of peripheral
states, which are leveraging their labor and capital resources akin to the
European colonizers to further their accumulation process in the global
economy.5 While there is tension between enhancing capital and trying to
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meet social objectives through intervention, a committed state could tax
and transfer resources across different constituencies.
Several interrelated factors explain global engagement. These are the
exhaustion of previous strategies, external coercion, ideological shifts, and
new global opportunities. However, one key motivation, which has been
underemphasized, is the emergence of new social forces such as the economic maturity of national business, the rise of middle classes and their
confidence in exploiting new global opportunities (D’Costa, forthcoming; Mukherjee, 2002: 415).6 For example, in Japan economic liberalization
has been led by Japan’s competitive sectors (Hall, 2005: 122). This is not
altogether different from the Indian case, where the rise of the Indian middle class has structurally influenced India’s greater engagement with the
world economy (D’Costa, 2005).7 As in the Japanese case, where external
pressure (gaiatsu) has been met through calibrated reforms to sustain a ‘national project’ (Hall, 2005: 127), I argue that the Indian government is also
pursuing economic nationalism today by tapping into new opportunities
in the world economy. This is not a result of foresight but of pragmatic
responses to changing social structure and geo-economic realignments.
With few reservations one could assert that India’s visibility in the global
economy today is much greater than it has been in the 1960s and 1970s,
the peak decades of economic nationalism. Conceptually then economic
nationalism cannot be equated with ‘statism’ per se (Helleiner, 2005: 221).
This shift from simple defensive protection of domestic business at home to
greater international visibility, albeit unwittingly, is a product of past practice of economic nationalism. It is not that different from the earlier form of
nationalism that asserted ‘the nation’s proprietarial rights’ (Burnell, 1986:
2). The property in question then had more to do with the protection of
national assets at home, while today it has to do with leveraging of national resources abroad to create a national brand name. Thus, a nation’s
people at home and abroad (expatriates), their expertise, technological capability, and capital and entrepreneurship can act as the foundation for
international visibility.
To show how economic nationalism as practiced by the Indian state has
changed I first present a simple framework modifying one form of economic nationalism with another (Figure 1). Then I examine the steel, auto,
and software sectors. As can be seen from Figure 1, economic nationalism
begins with self-reliance, pursued by regulating private capital through investment limits and output controls, state-ownership and private business
protection from foreign countries. This strategy is rooted in BOP concerns.
With the changing structure of the Indian economy and an emerging middle class neo-liberal policies, often externally driven, are internalized by
the policy-making and academic circles. Not all spheres of social policies
are abandoned by the state due to both political exegesis and new found
confidence in benefiting from the global economy.
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D’COSTA: ECONOMIC NATIONALISM IN MOTION
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Protection
Output Controls
Privatization
Liberalization
Deregulation/
Denationalization
Decoupling of Economic
Assets & Nationalism
Leveraging Global Presence
Looser Nationalism
Weakening Social Policy
Selective Controls (local content,
foreign exchange control, labor
laws, subsidies, employment
guarantees, etc.)
Leveraging Expatriates
Local Capital
Evolutionary State Role/embourgeoisment
Changing Eco Structure/Opportunities
Nationalism
Regulation of
Ownership
India global software power, tech
education, science and
technology, global entrepreneurs,
major mergers by Indian capital,
etc.
Figure 1 Changing economic nationalism.
With deregulation, privatization, and liberalization, the earlier form of
nationalism is diluted. There is a decoupling of national assets from the
national economy. However, new global opportunities, such as in the information technology (IT) industry, allow the state to capture economic
gains from its expatriate professionals. The success of the Indian IT sector
with its vast internationally mobile talent pool establishes the state’s global
presence. This can be inferred to promote the ‘India’ brand name, which
also leads to inward foreign investments and access to foreign markets, and
membership into more exclusive inter-state multilateral groups within the
UN, OECD, Association of Southeast Asian Nations (ASEAN), etc. With
such developments the meaning of economic nationalism is transposed
from the defensive, protectionist stance to one that is subtle but globally
more visible.
THE INDIAN STATE AND ECONOMIC NATIONALISM
IN MOTION
In this section an evolutionary, historically-contingent understanding of
economic nationalism in India is presented. First, one of the basic motives
for economic nationalism, a concern with the BOP position, is advanced.
Second, the changing policies around the steel, auto, and software sectors are presented to illustrate past economic policies. Finally, how the
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REVIEW OF INTERNATIONAL POLITICAL ECONOMY
changing role of the state displays a new form of economic nationalism
under contemporary globalization is discussed.
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The BOP and the dilemma of economic nationalism
Economic nationalism in the immediate post-independence period was
pursued through industrial regulation. The pre-independence ‘Statement
of Government’s Industrial Policy of 1945’, followed by post-independence
legislation in 1951 (Industries Development and Regulation Act) established the basis for state intervention in the economy. Five-year plans were
initiated with the first beginning in 1951 (Marathe, 1989). Regulated expansion of industrial capacity by the state was accepted as promoting the
national interest. Subsequently, the Industrial Policy Resolution of 1956
carved up industrial sectors specifically for the state. For example, all new
capacity in the iron and steel industry was reserved for the state.8 However, political expediency also had a hand in the 1969 nationalization of all
commercial banks and subsequent monitoring of large domestic business
houses under the Monopolies and Restrictive Trade Practices Act (MRTP)
and Foreign Exchange Regulations Act (FERA) of 1973. By regulating big
firms, the government wanted to limit foreign exchange outflows. However, all of these restrictive policies were relaxed gradually, selectively beginning in the late 1970s, aggressively in the mid-1980s only to be slowed
down, and then wholesale dispensed with since 1991 (D’Costa, 2005).
To break out of persistent BOP deficits, India adopted an import substitution industrialization program, focusing on capital and intermediate
goods (Griffin, 1991). Through infant industry protection it aimed to limit
import dependence and thus stem foreign exchange outflows. However,
the actual situation has been different. Inheriting a weak trade and foreign
exchange reserve position (see Figure 2) India’s economic nationalism did
not fundamentally alter the structure of the economy nor enhance its external macroeconomic position. What it did do was insulate the economy from
global engagement between 1950 and 1975 and maintain a slow-growing
economy, unfortunately exacerbated by exogenous crises of famines and
regional conflicts. India’s foreign exchange reserve fell from $2.2 billion in
1950–1951 to an average of $736 million during 1957–1970 (Government
of India, Ministry of Finance, 2001: S69–S70). From the mid-1970s, India’s
foreign exchange reserves gradually increased until 1990–1991, after which
they rose dramatically.
One result of the policies aimed to control foreign exchange spending
was the establishment of a basic industrial foundation and a technicaleducation infrastructure. However, India fell behind the global technology
frontier due to the autarkic and sometimes dysfunctional regulatory policies (Bhagwati, 1993). The policies designed under economic nationalism
could not tackle India’s BOP challenges because India’s export capabilities
628
D’COSTA: ECONOMIC NATIONALISM IN MOTION
140,000
Exports
Imports
Trade Balance
120,000
Foreign Exchange Reserves
100,000
60,000
40,000
20,000
00
03
20
97
20
19
91
94
19
88
19
85
19
82
19
19
76
79
19
73
70
19
19
67
19
19
61
19
64
55
58
19
19
52
19
19
49
0
19
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US $ million
80,000
-20,000
-40,000
Source: Government of India <http://indiabudget.nic.in>
Figure 2 India’s trade balance and foreign exchange reserves (1949–2005). Source:
Government of India <http://indiabudget.nic.in>.
were limited due to shoddy products in an intensely competitive global
economy and India’s special relationship with the former Soviet Union
as a captive market (Mehrotra, 1990). Barter trade with the former Soviet
Union seriously impaired India’s ability to compete internationally. India’s
exports remained in primary products and labor-intensive semi-finished
manufactures using materials such as leather, jute, textiles, carpets, precious and semi-precious stones, and metals. In 1970–1971, nearly 40% of
its exports were in such manufactured goods (D’Costa, 2005: 77). Since the
early 1990s, this share rose to roughly 70% (Government of India, Ministry
of Finance, 2008: A86).
Paradoxically, India witnessed persistent deficits in its international
financial position, the very outcome that economic nationalism was expected to avoid (Sen, 2000). Hence, the ideological anti-capitalist, antiglobalization stance behind economic nationalism was exhausted as
domestic politics, combined with the rise of the Indian bourgeoisie eroded
the practical feasibility of the more orthodox version of economic nationalism (D’Costa, 2001, 2005).
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REVIEW OF INTERNATIONAL POLITICAL ECONOMY
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The three industry cases
The steel industry at the commanding heights. The steel industry illustrates a
hard case of economic nationalism whereby state ownership was pivotal to
escape from economic backwardness (D’Costa, 1999; Gerschenkron, 1962).
Furthermore, the nationalization of bankrupt firms was also part of this
nationalist sentiment.9 Neither foreign ownership nor new private domestic players were permitted, although foreign technical collaborations were
sought. The Indian Industrial Policy Resolutions of 1948 and 1956 reserved
all new capacity in the iron and steel industry for the state and denied the
Birlas, one of the largest family-owned, highly diversified business houses,
an entry into the steel business (Krishna Moorthy, 1984: 60). Through its
five-year plans the state increased its share of the country’s steel capacity
(Table 1).
As a recipient of foreign aid India obtained financing and technology
from the UK, West Germany, and the Soviet Union. However, a steel project
with the US as a participant failed as India refused to allow US Steel to
have managerial control for 10 years. The state, with greater resources,
directly participated in large-scale, integrated mills and overcame the capital and technology barrier faced by private firms.10 Also, the government,
by virtue of a nationalized financial system since 1969, also owned 37%
of TISCO’s shares, the only private integrated steel company during the
1970s and 1980s (Krishna Moorthy, 1984: 308). After several years of disastrous performance in 1972, IISCO, a private firm, was nationalized to save
jobs. Roughly 60% of total steel output was under state-owned mills (Steel
Authority of India Limited, various issues). In the mid-1980s, the share
was even higher at 70%. In India state ownership in 1996–1997 stood at
56% (D’Costa, 1999: 84).
State ownership and regulation of the steel industry as integral to the
practice of economic nationalism at the time created a necessary infrastructural base but also led to severe financial hemorrhaging. Various construction delays and operating losses led to a precarious resource position (Steel
Authority of India Limited, 1987: 25). Between 1982 and 1984 the state steel
company SAIL racked up net losses of over Rs. 3 billion. A price hike was
the only way that SAIL could redress its financial predicament (personal
interview, Joint Plant Committee, New Delhi, July 1987), undermining the
very mechanism by which the national economy was to be nurtured. It
was only in 1992 that the steel industry was deregulated as part of the
overall process of economic liberalization.
The auto industry from curtailment to internationalization. Similar to the steel
industry, the Indian auto industry was highly regulated until the mid1980s. The difference, however, was that the steel industry was promoted
by the state whereas the auto industry, under private ownership, was
630
631
37.60
77.20
126.71
247.59
671.45
1722.10
3481.48
7980.00
52.13
60.52
67.69
63.73
59.72
56.62
51.70
45.24
0.88
4.53
5.29
4.53
3.33
2.32
1.84
1.83
1.68
7.49
7.81
7.10
5.58
4.10
3.57
4.04
–
3.0b
5.9
6.9
8.6
9.4
12.4
14.9
1.5a
3.0c
3.0
2.0
2.0
2.2
2.3
3.1d
1.5
6.0
8.9
8.9
10.6
11.6
14.7
17.9
Overall
Share of public
Share of public
Share of public sector
allocation sector outlay to sector steel outlay steel to total public
(Rs. billion) total outlay (%) to total outlay (%)
sector outlay (%)
Public sector Private sector Total
Notes: Total of six public sector integrated plants and one private sector plant; –, negligible; a two private sector plants (TISCO 1.0 mt and IISCO
0.5 mt); b three 1.0 mt public sector plants; c capacity expansion TISCO 2 mt and IISCO 1 mt; d IISCO’s capacity phased out to 0.45 mt, new
greenfield Vizag with 3.0 mt commissioned.
Source: Steel Authority of India Limited (1996).
1st (1951–56)
2nd (1956–61)
3rd (1961–66)
4th (1969–75)
5th (1975–81)
6th (1981–85)
7th (1986–90)
8th (1992–97)
Five-year
plan (FYP)
Annual rated capacity of crude
steel at the end of FYP
(million tons)
Table 1 Investment and expansion of India’s integrated public and private sector steel industry
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deliberately curtailed as autos were considered a luxury product. For the
auto industry, concern about BOP problems was also the driving force
behind protection. In 1949 the government of India banned the import
of completely built vehicles and since 1953, under the aegis of the Tariff
Commission, refused permission to Indian manufacturers to assemble imported vehicles without increasing local content. A gradual but mandatory
increase in local content, termed ‘phased manufacturing program’ (PMP)
was in force since the 1970s and was revamped in the 1980s. The new PMP
regulation stipulated a local content ratio of 90% to be attained in 5 years.
With this measure the government reduced the number of assembly firms
from twelve to five (Kathuria, 1990: 2).
In the early 1980s, the convergence of political exegesis and social forces
such as an emerging middle class gave way to a curious partnership between the Indian state and Suzuki Motors of Japan (D’Costa, 1995). Paradoxically, while other sectors were targeted for liberalization, the auto
industry was suddenly infused with new investments from the state. The
nationalization of the privately-held Maruti completely transformed the
Indian auto industry within the next decade and a half.11 Despite the entry
of a foreign player (Suzuki Motors) economic nationalism did not disappear. There were local content rules, technology transfer requirements,
and Indian management representation until recently (D’Costa, 2005). The
auto industry was completely deregulated in 1995.
The deregulation of the auto industry was introduced incrementally. After the energy crisis of the early 1970s, the Indian government encouraged
unlimited production capacity for ‘non-luxury’ vehicles produced by companies that were not classified as MRTP and FERA companies. These were
mostly commercial vehicle and two-wheeler producers (Pinglé, 1999: 99).
The market for two-wheelers exhibited considerable growth, reflecting the
realization of pent-up consumer demand. Imports were also liberalized by
initially allowing the imports of capital equipment for replacement as long
as net foreign exchange outflow was zero. This reflected persistent BOP
concerns and implied an export commitment of some sort by the importers
of machinery. In addition to raising the amount of permissible imports, the
bureaucratic process of permits for imports was significantly simplified.
Furthermore, the liberalization of the automobile industry also targeted
the components manufacturing segment, a sizeable share of which was
previously reserved for the officially defined small-scale sector. Fostering
the small-scale sector to promote employment was seen as consistent with
economic nationalism. However, their lower productivity and poor quality
created the pressure to modernize the components industry.
In 1982, the Government of India created Maruti Udyog Limited (MUL),
a public sector company as a joint-venture with Suzuki Motors Corporation of Japan. The government owned 80% of the equity. For the first time
the state became an investor in a car project and a successful monopoly
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(D’Costa, 1995).12 The selection of Suzuki Motors as a partner, aside from
the routine technical and financial criteria, was also based on its specialization in small cars and fuel efficiency. The government of India was
concerned about its oil import bill. With the entry of MUL the structure
of the Indian car market changed perceptibly (Table 2). In 1984, 2 years
after it was established, MUL manufactured over 12,000 cars, mainly from
imported completely knocked down (CKD) kits. In 1990 MUL produced
over 50% of all passenger vehicles produced in India, a higher share if
only passenger cars are included, while India’s output of cars increased by
nearly 400%. By the next decade, India’s output more than doubled, while
MUL held on to an average of 53% of the car market in 2001 (calculated
from Automotive Components Manufacturers Association (ACMA), 2002:
10).13
The hyperglobalized software sector. There is a popular perception that the
highly globalized Indian IT industry developed without the visible hand of
the state. While it is true that the government did not get into production or
intervene in the day to day matters through regulatory policy, the origin of
the Indian IT industry can be traced to the state in the 1970s (D’Costa 2002;
Evans, 1995; Sridharan, 1996).14 The vision of the Indian government has
been to promote a viable IT industry despite the challenges of establishing
a competitive electronics industry in the 1970s. But the IT industry, until
global opportunities became available, was very much part of an import
substitution strategy. Witness the expulsion in 1977 of American company
IBM and the British company ICL from India in the late 1970s (Encarnation,
1989; Grieco, 1984). However, IBM and other IT multinationals are back
with a vengeance, using Indian skills for their global growth strategy
(D’Costa, 2004b; Rai, 2006).
With regard to economic nationalism, the Indian state has continued to
play an important role in the IT industry, notwithstanding the industry’s
globalization. The state continues to support the development of IT infrastructure and the supply of highly trained technical professionals. Both of
these serve the highly successful export model for software services, which
rests on the caliber of Indian professionals who are increasingly mobile internationally (D’Costa, 2003, 2008). Consequently, the Indian state now
finds itself in a position to leverage India’s human capital in a big way to
extract economic benefits from the world economy.15
Public funding of research institutions for industry and defense has been
an important catalyst for the growth of IT in Bangalore (Naidu, 2003).16
Through a series of interrelated investments, the government of India
unwittingly created the modern technological hub of Bangalore. For example, since 1954 Bangalore has been the headquarters for the Indian Air
Force, while the Ministry of Defense established Bharat Electronics Limited
in the city. Other technology-related public sector units were established
633
634
SMP
SAL
M&M
4874
9217
22,703
21,752
26,204
24,059
23,987
37.9
3581 27.8
37.5
6616 26.5
51.0 12,054 27.0
47.7
8729 19.1
12.0 42,737 19.5
5.0 14,169 2.9
3.5
0
0
1526
3364
448
6
–
–
–
12.0
13.7
1.0
0.0
–
–
–
–
–
–
51
924
–
–
–
–
–
0.1
0.4
–
–
2864
5501
9334
15,068
32,706
69,277
56,380
Mkt.
share
22.3
–
–
22.4
–
–
21.0
–
–
33.0
–
–
15.0 116,194 53.1
14.3 349,780 72.0
8.3 356,608 52.7
# of
units
MUL
–
–
–
–
265∗
6302
82,195
# of
units
# of
units
Mkt.
share
Others
Total
–
–
–
12,865
–
–
–
24,598
–
–
–
44,539
–
–
–
45,606
–
–
–
218,765
1.3 22,545 4.6 486,132
12.2 157,076 23.2 676,246
Mkt.
share
TELCO
Notes: *1991; see list of firms and acronyms for full name of auto firms; others include Daewoo, General Motors, PAL-Peugeot, Mercedes-Benz and
1999 onward Hyundai and Fiat; in 2001, Daewoo, Fiat, PAL-Peugeot, and PAL had stopped operations; in 2001, Hyundai and Toyota had 57.3% and
18.1% of ‘Others’ shares respectively.
Sources: Association of Indian Automobile Manufacturers (various years); Automotive Components Manufacturers Association (various years).
1955
1960
1970
1980
1990
1997
2001
PAL
# of Mkt. # of Mkt. # of Mkt. # of Mkt. # of Mkt.
units share units share units share units share units share
HM
Table 2 Changing market structure of car and utility vehicle production in India (1955–2001)
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D’COSTA: ECONOMIC NATIONALISM IN MOTION
120
100
USD billions
80
60
Information Technology Market
Software Exports
Total Exports
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40
20
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Figure 3 Globalization and expansion of India’s IT industry. Source: NASSCOM
(various years); Government of India, Ministry of Finance (various years).
such as the Indian Telephone Industries, Hindustan Aeronautics, and various R&D centers.17 The establishment of the Department of Electronics in
1970, rechristened the Department of Information Technology (DIT), has
been instrumental in providing a state-supported technical infrastructure
supporting the Indian IT industry. For example, the National Informatics
Center, Computer Maintenance Corporation (CMC), the National Center for Software Development and Computing Technology, and regional
computer centers were established.
The government itself, through DIT, became an important importer of
computer hardware through several of its public sector organizations. In
addition to establishing key public sector units in the electronics industry,
more recently the state has been responsible for building infrastructure for
the IT industry, especially for export promotion. The government provides
satellite-based communication systems, establishes standards, testing and
quality certification processes, and established the internet-based education and research network (ERNET) with UNDP.
This research infrastructure has been complemented by state-sponsored
tertiary education. There are nearly 10,000 schools (compared with less
than 1500 in 1961) that are above the degree level. Seventy percent of these
are focused on general education, while about 20% are professional and
technical schools. Of India’s 2428 degree- and diploma-granting technical
institutions, nearly half are found in the three southern states of Andhra
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Pradesh, Karnataka, and Tamil Nadu, which are home to leading software
cities of the country. Since the 1950s, a total of seven Indian Institutes of
Technology have been established. These along with Regional Engineering
Colleges (RECs) or now the National Institute of Technology (NIT), and
the private but subsidized renowned Birla Institute of Technology and
Science (BITS) are the elite technical institutions of the country. The Indian
government also established several elite Indian Institutes of Management
(IIM) in the country. These educational institutions serve the Indian exportdriven IT industry as well as multinationals. The success of India’s software
exports led to the establishment of the Indian Institute of Information
Technology (IIIT) in two key IT cities—Hyderabad and Bangalore. Behind
the two IIITs are the government of India, the Indian software industry
association (NASSCOM), state governments of Karnataka and Andhra
Pradesh, and multinational IT companies. The partnership between the
state and private foreign capital is indicative of a new kind of state activism
aimed at creating international competitiveness.
WHAT’S LEFT OF ECONOMIC NATIONALISM UNDER
GLOBALIZATION?
This brief exposition of three Indian industries over time shows that economic nationalism in India has strong roots but one which has been undergoing change. Even in the IT sector, which is highly integrated with the
global economy, many of the core foundations of the industry have been
state-led. However, as the external and internal pressures for international
economic integration have increased the Indian state is pragmatically moving in promoting, if not protecting and directly owning, national capital
and other assets in a highly competitive economy.
In the first instance the practice of economic nationalism has disappeared
if we look for conventional indicators such as state ownership, protectionist policy instruments such as tariffs, and regulation of capital in general.
Consequently, the state has also lost its political autonomy to intervene
in favor of domestic capital and vulnerable social groups through redistributive policies. The reasons are well-established. With integration the
Indian state must abide by the ‘rules’ of globalization. Under these rules
discrimination in favor of national capital is generally not permitted. More
importantly, Indian capitalists have matured and thus the classic form of
state protection has become redundant. But as nation states continue to
endure, the significance of reproducing a viable national economy does
not diminish. Consequently, the state is compelled to reinvent itself by
supporting national capital at home and abroad and not by reining it in.
This is a different reading of economic nationalism in practice as viewed
from the experiences of the steel and auto sectors. If economic nationalism
is redefined as the state leveraging national resources for economic gain at
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D’COSTA: ECONOMIC NATIONALISM IN MOTION
the global level the software sector fits nicely with this new understanding.
In practice it translates into state support for foreign market and technology access and the harnessing of, and not preventing, foreign investment
for national economic development.
This new approach of the Indian state can be seen operating selectively
for the three industrial sectors discussed earlier. For example, the Indian
steel industry today is globally recognized. While the Indian state has not
had any direct role in its contemporary global standing, the prominence of
the Indian industry abroad is noteworthy because it gives the Indian state
a new recognition in global economic matters.
Consider Mittal Steel, currently the world’s largest steel company. It was
started by an Indian who left the country in the 1970s from Calcutta, once
the bastion of the classic form of economic nationalism, and at the height
of state business regulation in India. Since then the company has grown
by leaps and bounds through purchases of state-owned mills around the
world to become the world’s largest producer of steel. Its global commercial success, while largely self-driven from abroad, has been supported
by several government leaders, including that of the UK. Its acquisition of
Arcelor in 2006, the world’s second largest steel company, was greeted with
varying nationalist sentiments. The French government appeared alarmed
over the merger, while the Indian government expressed its open support
for the merger. The Indian Prime Minister and the Commerce Minister
wrote to the EU on behalf of Mittal Steel.
While this can be seen as a simple case of influence peddling, at its core
it is an expression of the new kind of economic nationalism, which lends
support to national capital and resources abroad. The fact remains that
Mr. Mittal still retains his Indian citizenship and the Indian government is
using Mittal’s global status to its own advantage. He has announced plans
to invest more than $10 billion in steel and steel-related projects in Orissa
and Jharkhand, which will complement Korean the Pohang Iron and Steel
Company’s (POSCO) investments in another major steel project.18 The
state is expected to play an important role in infrastructure provision.
Although it is too early to predict the impact of such mega projects in the
impoverished but mineral-rich state of Orissa, such investments are likely
to have an important employment impact, an outcome consistent with the
earlier forms of economic nationalism.
Similarly, the takeover of Corus Steel by the Tata Group evoked nationalist responses on the part of the state. While the Indian state did not extend
any particular assistance, the much sought after merger was supported
by both the government and Indian citizens. Both the public and the state
saw the efforts of Tata as a national effort.19 Tata of course is an Indian
company with mostly Indian operations, hence its successful acquisition
resonated even more in India. Once again the Minister of Commerce and
Industry boasted of Tata Chairman Ratan Tata saying that the takeover ‘is
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the first step in showing that Indian industry can step outside its shores
into an international market place as a global player’ (Thillaivarothayan,
2007). On behalf of the Indian government, the Minister of Finance, Mr
Chidambaram also gloated over Indian industry’s confidence in becoming global.
The Indian auto industry presents a different kind of economic nationalism from the steel industry. Unlike the steel industry there was no state
ownership (except the failed Scooters India Limited). However, the transformation of the Indian auto industry began with state-ownership of the
joint-venture with Suzuki Motors. It was only in 1993 that the industry
was fully liberalized and until May 2007 the government held 18% of the
share of Maruti Udyog, down from 80% since inception of the company.
By selling its holdings to financial institutions the government of India
has no direct ownership stake in the company, although one of the managing directors remains a civil servant. Maruti Suzuki can claim to have
induced the development and growth of the Indian auto components industry, new flexible industry practices, and a base for compact car exports.
Today almost all multinationals are present in India. Yet, the industry has
contributed to many of the same goals that economic nationalism earlier
aimed to accomplish such as exports and foreign exchange earnings, manufacturing capabilities, and the development of a competitive components
sector and thus employment. In this instance the public sector has played
an important role in the industry’s transformation.
Thus far the auto industry has relied on the expanding domestic market,
but it is now poised to tackle the international market. The recent launching
of the Tata Nano, the world’s most inexpensive car at 2500 dollars is a
reflection of Indian manufacturing capability.20 Tata’s takeover of Daewoo
trucks in Korea and its recent acquisition of Jaguar and Land Rover from
Ford is also evidence of capitalist maturity. Nurturing and transforming
the Indian auto industry through state involvement has contributed to
India’s ability to benefit from the world economy.21
When the Indian passenger car segment was completely delicensed in
1993, Indian companies, for competitive reasons, tied up with foreign ones
(D’Costa, 2004a). This, of course, is a form of denationalization. However,
the industry has expanded at unprecedented growth rates, including exports. From August 1991 to April 2002, the auto industry garnered 5.48%
of the total foreign direct investment approved during this period (Government of India, Ministry of Commerce and Industry, 2002). Of this, 0.8%
was for the components sector, which was equivalent to 10.75% of the
transportation sector. Today, 100% foreign equity is permitted with no
local content requirement. The Indian auto industry produces nearly 1.8
million passenger vehicles (nearly 50% by Maruti Suzuki) and supports a
registered components industry worth $18 billion with exports of $3.6 billion in 2007–2008 (ACMA, 2007). Components exports have been projected
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to be $6 billion by 2009 (ACMA, 2007). In 2005–2006, India exported 13%
of its passenger car production (ACMA, various years). This is a clear sign
of India’s increased participation in the global economy and dramatic denationalization of the auto industry. But it is also an outcome of a proactive
state in the industry that employs a sizeable share of semi-skilled workers.
The software industry also shares a common initial state-led development thrust. This may appear to be less glaring relative to the other two
sectors, given that the sector is highly globalized with an aggressive exportdriven business model, multinational involvement, and considerable international mobility of Indian technical talent. However, the roots of the
industry have been very much sown by the state as part of its overall import
substitution strategy of self reliance and more recently its efforts to nurture strong partnerships with private business in high technology sectors
(Sridharan, 2004). The government of India has established the Software
Technology Parks of India (STPI) to promote exports. Since 1998 Indian
IT firms in STPI have received a 100% tax holiday until 2009 for firms exporting all of their output. To support the industry the state worked with
private and multinational partners to establish the new Indian Institute of
Information Technology as well international technology parks in major
software exporting states.
It is clear that the role of the state in extracting benefits from the world
economy is different for different sectors. Unlike the Indian steel and auto
industries, the software industry is highly globalized with a heavy reliance
on export markets. More importantly, as the volume of off-shoring has increased and the global demand for Indian professionals has expanded, the
Indian state is able to take advantage of a large pool of technical talent for
export revenues. While Indian students and professionals are serving the
global IT industry from home and abroad, Indian expatriate professionals
are also returning to India. This circular movement of talent gives India
an advantage in extracting economic and non-economic benefits from the
global economy.
To take this further, the presence of highly educated Indian professionals
overseas gives the Indian state an extended presence in the global economy. India holds a large share of the global technical talent pool (D’Costa,
2008). India’s current stock of young talent is roughly 14 million, which is
roughly one and a half times the stock of the US and double that of China
(Bound, 2007: 11). Even at the PhD level in science and engineering India is
rapidly increasing its doctoral pool. The number of Indian PhDs in the US
increased from 8383 in 1991 to 13,733 in 2003 (US National Science Board,
2006: A2–123). During 1983–2003, 30% of science and engineering doctorates earned by foreigners in the US were earned by students of Chinese
and Indian origin (US National Science Board, 2006: Figure O-32). Whether
these students remain or return, they represent India overseas economically and technologically in an influential way. Those who return home
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often establish commercial links between the domestic and export markets, thus contributing favorably to India’s BOP position and innovative
capability.
With the demand for foreign workers growing, as evident by the large
share of Indian H1B and L1 employment visas for the US, economic
nationalism is extended abroad in a big way. Between 1997 and 2006 India’s share of H1B visas increased from 39% to 48%. Interestingly, some of
the leading sponsors (or visa petitioners) in 2006 were Indian-owned firms
(www.myvisajobs.com, 2006). Thus, not only are there Indian firms in the
US but they are also engaged in bringing Indian professionals to the US under such visas. Furthermore, the government of India, under World Trade
Organization (WTO)’s Mode 1 and Mode 4 clauses, is pressing OECD governments for easier visa access for its IT professionals (Business Standard,
2008). The benefits of this transnationalization are the flows of profits, dividends, remittance income, investment capital, employment, and transfer
of commercial and technical knowledge back to India.22 Currently the IT
industry employs about 1.6 million with revenues of $64 billion. India was
the largest recipient of remittance income globally in 2007 with $27 billion
and India’s foreign exchange stood at $200 billion by 2006–2007 (Business
Standard, 2008; Reserve Bank of India, 2007; World Bank, 2008).
This reaping of economic benefits from the global economy is possible
partly due to India’s diaspora of expatriates, professionals, and students.
Far from being passive, the Indian state today is pragmatically recognizing the commercial, technological, and intellectual contributions of these
Indians and claiming a nation abroad through its émigré population of doctors, engineers, entrepreneurs, and students in certain countries (Dickinson
and Bailey, 2007). The growing visibility of successful Indians abroad has
prompted the Indian government to leverage its presence overseas for
both economic and national security purposes. The Indian government effectively lobbied non-resident Indians in the US after it refused to sign the
Comprehensive Test Ban Treaty (Narlikar, 2006: 73). Beginning with various financial incentives for non-resident Indians (NRIs), the government
of India has extended many of the benefits to its expatriate communities.
Two schemes to encourage expatriate Indians to engage themselves with
the Indian economy and society are Persons of Indian Origin (PIO) and
Overseas Citizen of India (OCI) with 15-year and life-long visas respectively. The state’s recognition of the diaspora is motivated by the desire
to ‘influence and control . . . transnational ties and connections’ (Dickinson and Bailey, 2007: 758). A special Ministry of Overseas Indian Affairs
has been created to look after the overseas interests of the Indian diaspora, which includes emigrants and migrant employees whether they are
citizens or not. In addition to awarding prominent Indians overseas for
their professional contributions, there is also an annual public national
celebration of expatriate Indians in India. These state-led activities suggest
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D’COSTA: ECONOMIC NATIONALISM IN MOTION
that economic nationalism is quite consistent with globalization, albeit in
a modified form.23 All of these activities can be seen as a form of deployment of national resources overseas for long-term economic benefits and
national prestige (Nayar, 2001: 43).
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CONCLUSION
This study began with the proposition that economic nationalism can be
practiced under globalization even if states must yield some autonomy
over social policy space. This kind of nationalism weakens the earlier
ideological link between development and social policy. Instead the state
pursues economic nationalism by concentrating its energies in supporting
national capital and resources overseas. To capture this, the conventional
definition of economic nationalism was modified from protecting domestic
capital to mobilizing national resources for economic gain from the world
economy. This understanding demands that economic nationalism be seen
as a dynamic concept, historically contingent on new social forces. In India
the rise of the Indian middle class and the maturity of businesses have been
the principal social forces behind deregulation and liberalization.
In this evolutionary process the role of the state changes fundamentally
from one of direct intervention against foreign capital to one of supporting
national accumulation at the global level. In playing this game of international competitiveness crude forms of protection are largely dismantled and instead explicit policies supporting national capital at home and
abroad are pursued. The state continues to provide economic incentives
to national business but this time in terms of penetrating global markets
rather than helping to keep foreign firms away from national markets.
Three industry cases from India were presented to capture the fluidity
of economic nationalism in practice. All three industries have been subject
to deregulation, privatization, and international integration, which have
altered the relationship between the state and capital. It is no longer as
antagonistic as it used to be. Rather they are partners in the accumulation
process at the global level. Economic nationalism is less about state ownership and absence of foreign firms and instead about global economic
engagement for national accumulation. This is not a complete break with
the past as all three sectors display state-led vestiges of nationalism. These
sectors have also produced outcomes that are not inconsistent with earlier
economic goals of growth, foreign exchange earnings, employment, and
manufacturing capabilities.
The most severe casualty is the decoupling of economic nationalism
from its social policy commitment. In some ways this is not unanticipated,
since the motives for economic nationalism in most peripheral societies
were rooted in building a viable, national capitalist system with social wellbeing as an outgrowth of capitalist development. Today it is unabashed
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promotion of national capital’s integration with global capital. In this sense
there is no coherent vision of economic nationalism today. Instead it is
expressed in looser terms of national ‘presence’ at home and abroad.
Witness the state’s position on Indian acquisitions of steel companies
around the world and its support for internationalizing the auto industry.
Similarly, the IT industry is heavily leveraged to promote India overseas as
the software capital of the world. The millions of expatriate Indians living
and working abroad, especially the highly visible professionals in industry, research, medicine, and academia are seen as India’s ‘presence’ abroad.
Such a link is perceived to benefit the national economy through family
ties, remittance income, and transfer of knowledge. Similarly, the pursuit
of Mode 4 under the WTO by several developing countries (with India
playing a leading role), which would allow the temporary movement of
service providers to OECD economies is another version of market access
and national ‘presence’ in the global economy.
The Indian state has not completely abdicated its responsibility toward
its highly politicized economically deprived citizens. For example, shelving labor market reforms, protection of small-scale retailers, and the provision of minimum employment entitlements to rural workers are indicative
of the continued relevance of political influence over the state. While the rejection of conventional economic nationalism has eroded state autonomy,
the benefits gained through global participation should not be underestimated. Few developing countries have this option of transforming economic nationalism in this manner since past state experience in the practice
of economic nationalism is critical to formulating new ways of promoting
it rather than being hostage to it. But if nationalism entails a shared history
and common destiny, winners, which number many in India today, should
compensate the losers (Reich, 1992: 304–305). Only political activism for
redistributive justice can make the state serve its national purpose while
expanding its reach overseas.
ACKNOWLEDGMENTS
An earlier version of this paper was presented at the 2006 International
Economic History Association Congress in Helsinki and subsequently was
available as a working paper of the Asia Research Institute, National
University of Singapore. I thank three anonymous referees and Janette
Rawlings for their substantial scholarly and editorial inputs. The usual
disclaimers apply.
NOTES
1 To presume that earlier practice of economic nationalism, which provided
policy space, produced equitable outcomes is debatable. But that is another
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D’COSTA: ECONOMIC NATIONALISM IN MOTION
2
3
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4
5
6
7
8
9
10
11
12
13
14
15
16
discussion. Some exceptional cases such as Singapore display how broadbased social gains are not incompatible with global interactions.
It is beyond the scope of this paper to address why the hardware sector, even
in a period of intense economic nationalism, failed to become world class. In
this context one might mention that several globally successful software companies such as HCL, TCS, and Wipro transformed themselves from moribund
national hardware companies. And today there is a confluence of economic
and political forces that makes the establishment of a large semiconductor and
other hardware manufacturing industries feasible.
It has been already suggested that past experience in economic nationalism
gives the state better capabilities in managing globalization. Nayar (2001: 261)
suggests that the adjustment process since the 1991 reforms in India was swift
precisely because of a ‘self-reliant economic base’ constructed in the past.
Japan and Japanese firms for various reasons keep a low international profile
even as they become important sources of overseas development aid (ODA)
and foreign direct investment. Their overseas nationals are less visible except
in Brazil and Peru but they are nationally Brazilian and Peruvian first in the
eyes of the Japanese.
I acknowledge that there is a danger of reducing firm objectives to state goals,
especially when we know profits earned overseas could be reinvested anywhere. However, firms are nationally embedded institutions and are not that
footloose (Dicken, 2007).
The literature on state-society interaction suggests a varying relationship from
which nationalism may be aggregated (Evans, 1995; Kohli, 2004; Poulantzas,
1973; Scokpol, 1985) or state interests independently projected (Miliband, 1983;
Sen, 1984). But that change comes from state initiatives only has been challenged by those who see non-state actors as important (Chowdhury, 1999).
In the literature India’s economic nationalism ends and globalization begins
with the 1991 economic reforms. This is factually incorrect since reforms were
initiated incrementally since the late 1970s.
Assurance was given to existing private firms, such as Tata Iron and Steel and
Indian Iron and Steel, that there would be no nationalizations of their industry.
Witness the 2008 bailouts of financial institutions by the US government, no
doubt motivated by nationalist concerns.
The entrepreneur Jamshed Tata, the founder of Tata Iron and Steel Company
(TISCO), failed to raise capital in London at the turn of the century but could
do so later in India itself (Etienne et al., 1992: 49).
Due to the death of the founder Sanjay Gandhi, son of Indian Prime Minister
Mrs. Indira Gandhi, Maruti was nationalized.
The government in the 1970s had established Scooters India Ltd. to capture the
lucrative two-wheeler market. However, it failed miserably because of industrial strife, managerial incompetence, and technological obsolescence (Nayar,
1992).
A similar picture is obtained for commercial vehicles (D’Costa, 1998: 307, 2004a,
2005: 93–98).
Computer Maintenance Corporation (CMC) was an exception. It was a major
state-owned IT firm, which took over the servicing of IBM machines after IBM
left India in 1977.
Of course what is national welfare may be hard to pin down. But increasing
growth and its distribution via employment, and locally retained value of
production can be seen as supporting national welfare.
For Bangalore’s institutional arrangements in the IT industry see D’Costa
(2008b).
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17 The Department of Atomic Energy and the Electronic Corporation of India
(ECIL), located elsewhere, the civil aviation industry, and the information
broadcasting sector all sourced electronic components from BEL located in
Bangalore. Later ECIL itself served the computer needs of India.
18 There are of course social and environmental challenges with such mega
projects in impoverished mining areas. But that is partly the nature of largescale industrialization.
19 Similar attachments to nationalist sentiments have been also expressed by
the collapse of the merger between Bharti telecom and South Africa’s MTN
Group, when Mr Bharti remarked that ‘. . . Bharti’s vision of transforming itself
from a homegrown Indian company to a true Indian multinational telecom
giant, symbolizing the pride of India, would have been severely compromised’
(Timmons, 2008; author’s emphasis).
20 There have been some setbacks in the completion of the Nano factory due to a
local politically-charged dispute over farm land.
21 Of course some firms of the industry had to go as part of restructuring but
the industry as a whole has been energized. See D’Costa (2005). There are also
challenging dilemmas of oil dependency, ecological impacts, and public versus
private transportation.
22 Of course, one must be aware of the downside of relying too heavily on remittance income since immigration policies as well as economic conditions could
induce volatility in remittance income flows (D’Costa, forthcoming: 70–71;
Seers, 1983: 65–66).
23 The government of India has justified the logic of globalization when mollifying irate US white collar workers who claim job losses due to global outsourcing
of IT to India.
NOTES ON CONTRIBUTOR
Anthony P. D’Costa, formerly of the University of Washington is a Professor
of Indian Studies at the Asia Research Centre, Copenhagen Business School. He
has researched the steel, auto, and software sectors for the last two decades. He
is the author/editor of five books and is currently writing on the dynamics of
international mobility of talent, global capitalism, and nationalism.
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A New Politics of Confrontation?
Brazil and India in Multilateral Trade
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Andrew Hurrell & Amrita Narlikar
Published online: 11 Dec 2006.
To cite this article: Andrew Hurrell & Amrita Narlikar (2006) A New Politics of Confrontation?
Brazil and India in Multilateral Trade Negotiations , Global Society, 20:4, 415-433, DOI:
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A New Politics of Confrontation? Brazil and India in
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ANDREW HURRELL and AMRITA NARLIKAR
Particularly in the North – South confrontation at the Cancun Ministerial Conference in
2003, developing countries seemed to be presenting a unified stance of resistance against
the developed world. These developments were greeted with considerable surprise in the
scholarly as well as policy communities, not least because many theorists of International Relations had predicted increasing homogenisation and policy convergence
by developing countries around liberal solidarist norms. In this paper, we analyse the
apparent revitalisation of the Third World, and evaluate the policies of developing
countries at and around Cancun to assess the claims that this heralds a more activist
and less accommodating period in North/South relations. We buttress this general
analysis by probing further into the policies of two of the major players, namely
Brazil and India. We argue that recent policy changes can be explained by learning
and adaptation by developing countries within the specific institution of the World
Trade Organisation. We examine this adaptation along four planes: coalitions, insider
activism, negotiation strategies, and transnational coalitions. Domestic politics in
both our country cases play, at best, a supportive role. We also investigate the extent
to which these shifts in trade politics might be seen as broader shifts in foreign policy.
At the fifth Ministerial Conference of the World Trade Organisation (WTO) at
Cancun in September 2003, developing countries came together in several overlapping coalitions and decided to block the negotiations of the Doha Development
Agenda until their demands were met. The Ministerial ended in deadlock. But the
unified resistance of developing countries in the endgame at Cancun appeared to
represent an important landmark in the international politics of trade and even to
usher in a new politics of confrontation between the developed and developing
world. After over a decade of short-lived experiments with issue-based coalitions
and an apparent commitment to liberalisation under the auspices of the WTO,
developing countries seemed to have reversed this apparently conformist position. More generally, Cancun seemed to represent a symbol of the dissatisfaction
of the developing world with globalisation and indicated a greater willingness to
act in pursuit of its collective interests and against the developed world. In
This work forms part of a project on Emerging Powers in International Regimes, funded by the
Nuffield Foundation. Both authors thank the Foundation for its generous support, and two anonymous
referees for their comments on an earlier draft.
ISSN 1360-0826 print=ISSN 1469-798X online/06=040415–19 # 2006 University of Kent
DOI: 10.1080=13600820600929762
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416
A. Hurrell and A. Narlikar
expressing this collective dissatisfaction, the emerging powers of the developing
world—Brazil, China, India, South Africa—took the lead, and were joined by
many other developing countries. The significance of new trends in North –
South relations is reinforced by the fact that many of the developing country
coalitions that emerged at Cancun have persisted in the period leading to the
Hong Kong Ministerial in December 2005 and at the Ministerial itself. Many of
these coalitions remain active today, and have continued to vent their frustration
and disappointment over the unfulfilled promises and limited gains that the
world trading system has afforded them so far.
The trend towards more confrontational politics spearheaded by developing
countries therefore raises important issues for the WTO and for international
trade negotiations. But they can also be related to a broader set of questions
about the International Relations (IR) of the developing world and about the
character of North/South relations. With the end of the Cold War and the intensification of globalisation, many developing country governments seemed to be
abandoning the Third World orthodoxies that had shaped and inspired policy
for the previous half century. These policy reversals were perhaps most apparent
in the international political economy, when traditional bloc-type coalitions
began to fragment, and hard-line demands for a revision of dominant international economic norms began to give way to an emphasis on liberalisation
and participation. Developing countries began to restructure their domestic
economies in line with the prescriptions of the IMF and the World Bank. As
members of the GATT they took on deeper commitments in traditional areas
such as goods and began to adhere to new disciplines in the areas of services,
Trade Related Intellectual Property Rights (TRIPs), and Trade Related Investment
Measures (TRIMs). Meanwhile, non-members seemed to be falling over each
other in their attempt to acquire membership of the WTO. The GATT at the
start of the Uruguay Round in 1986 had 92 members; this membership had
increased to 128 by the end of the Uruguay Round in 1994, and 147 by 2003.
For many commentators, these shifts followed naturally from the changes that
were taking place in the economic policy of developing countries—away from
the economic models based on Import –Substituting Industralization (ISI), high
tariffs and a large role for the state, and towards market liberalism and greater
emphasis on integration in world markets. Finally, changes in development
policy appeared to be going hand in hand with a willingness to sign up to
many aspects of the liberal multilateralism of the 1990s and to join, or at least
less actively oppose, a wide range of specific regimes, including those dealing
with the environment, human rights and humanitarian intervention, and
nuclear proliferation and arms control. This apparent accommodation with the
emerging norms of a liberal solidarist international society represented a major
change, not only when set against the Third World challenge of the 1970s, but
also with the broader revolt against the Western dominance of international
society that had characterised so much of the 20th century.1
This article seeks to explain and evaluate the policies of developing countries
both at Cancun and in its aftermath, and to assess claims that this heralds a
more activist and less accommodating period in North/South relations. We
1. Hedley Bull and Adam Watson (eds.), The Expansion of International Society (Oxford: Oxford
University Press, 1985).
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A New Politics of Confrontation?
417
examine the behaviour and strategies of developing countries at the Cancun
Ministerial—the fifth Ministerial Conference of the WTO—and we buttress this
general analysis by probing further into the policies of two of the major players,
namely Brazil and India.2 We examine these events from three analytical
perspectives.
The first focuses quite narrowly on trade politics and the WTO. It highlights the
ways in which developing countries acted differently because of how they had
learnt from previous experience and from previous failures. It seeks to explain
policy change and policy development within the broad category of social learning, highlighting, in particular, the processes of adaptation that took place within
and around a specific institution and a specific set of negotiating processes. It also
stresses the importance of leadership. The leadership provided by some of the
emerging powers from developing countries is important in our explanation as
intermediary variable in facilitating and sustaining the adaptation process. Our
principal argument is to suggest that there are good reasons for viewing
Cancun and its aftermath in precisely these terms. An important corollary of
this argument is that, although it is indeed possible to discern some elements of
renewed resistance of the developing world in the WTO, the negotiating positions
and strategies of developing countries in the WTO are sharply different from the
hard-line positions of developing countries in the 1970s and their pursuit of the
New International Economic Order (NIEO). Thus, even if we can discern an
emerging politics of confrontation between North and South, a central feature
of it is that it is “new”.
A second set of arguments views trade policy from the perspective of
domestic politics. From this perspective, we should understand the evolution
of policy in the WTO in terms of different varieties of domestic factors, both
direct and indirect. We acknowledge that there have been important changes
in the impact of domestic factors. But, especially in terms of direct impact, we
argue that such factors are less important than much of the domestically
driven literature on foreign policy and policy change would suggest and that
the state has remained an effective gatekeeper in the formulation and conduct
of trade and foreign policy. We also highlight some of the salient differences
that exist between the role and character of domestic factors in the Brazilian
and Indian cases.
The third cluster of cluster of arguments sees trade policy and trade politics
as reflective of broader shifts in foreign policy. Here the source of change comes
from outside pressures in the international political system and in the global
economy and from the changing way in which those pressures are understood
within the dominant frames of foreign policy. On this account, resistance at
Cancun is part of a broader move to seek allies and to form new coalitions
in order to bargain over the rules by which globalisation is managed and to
mount a broader response to the challenges of both US hegemony and to
liberal globalisation. We argue that there is some evidence for this view at
the general level of developing countries—and certainly in terms of rhetoric.
But when we turn to the Brazilian and Indian cases, the evidence is more
2. Up to now most of the literature on the resistance to globalisation has concentrated on social
groups and the anti-globalisation movement (see, for example, David Armstrong, Theo Farrell and
Bice Maiguashca (eds.), Governance and Resistance in World Politics (Cambridge: Cambridge University
Press, 2003)), and has tended to neglect the role of major developing states.
418
A. Hurrell and A. Narlikar
ambiguous. This kind of foreign policy linkage has been a major element in the
evolution of Brazilian policy, but it is far less directly apparent in the case of
India. Moreover, even in the Brazilian case, the specific role played by
developing country coalitions represents only one aspect of a complex globalist
foreign policy.
Social Learning, Adaptation, and the Politics of Trade Diplomacy
The involvement of developing countries within the WTO can be analysed under
four headings: insider activism, bargaining coalitions, negotiation strategies and
transnational coalitions with NGOs.
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Insider Activism
The active involvement of developing countries in the preparatory process
leading up to the Cancun Ministerial of the WTO was unprecedented and very
different from the Third World – ism of the 1970s. In the earlier version, developing
countries had dismissed the GATT as the “Rich Man’s Club” and turned to the
UNCTAD to further their interests. Now, developing countries sought change
by actively playing the game of trade politics in the WTO rather than walking
away from it.
Two changes were important. The first was cognitive: the experiences of the
Uruguay Round taught developing countries some important lessons about the
costs of non-participation, and also the adequacies and inadequacies of some of
their negotiation strategies. The second was institutional: trade negotiators from
developing countries became more knowledgeable about the institutional
peculiarities of WTO diplomacy through repeated interaction, resulting in adaptation both in Geneva as well as the domestic level. Stakeholders within the
countries also became aware of the domestic implications of WTO membership,
while governments opened up at least some channels of consultation with
certain groups.
Having learnt from their previous problems of limited resources and the
difficulties of effectively negotiating the technicalities of an ever-expanding
WTO agenda, developing countries revealed considerably higher levels of
information sharing and coordination in Geneva. In bearing the costs of organising diplomatic efforts, as well as maintaining links with other initiatives, Brazil
and India played a key role. Both, along with South Africa, were major players
in negotiating the interpretation of the TRIPs and Public Health Declaration
that had been agreed upon at Doha in 2001. India, as leader of the Like Minded
Group (LMG) organised weekly meetings of the group, which were attended by
China at the expert level. The leadership of the intermediate powers helped
developing countries collectively exploit the institutional platform and normative
niches available to them under the Doha Development Agenda. Between them,
developing countries managed to attend most formal and informal meetings of
the WTO, and shared the information that they gathered among themselves.
They organised conferences dealing specifically with WTO issues in their capitals
and invited other developing countries to them. At the start of the Ministerial
Conference, many developing countries made speeches that illustrated their
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A New Politics of Confrontation?
419
awareness of the problems as well as their “sense of deep disappointment that the
development dimension envisaged under the Doha Work Program has been given
short shrift”.3
Repeated strongly worded statements are indicative of the high level of
diplomatic activism by developing countries at Cancun. Inside, in the small
group meetings and in the meetings of the Heads of Delegations (HODs),
behind closed doors, the discourse, by all accounts, was even more charged.
This active engagement represented a far cry from the Seattle Ministerial where
developing countries had been unable to attend many meetings. This time,
developing countries were able to attend small group meetings; particular
countries that were not able to attend a meeting were still able to keep tabs on
happenings by liaising with some of the other countries that had. This insider
activism on the part of the individual developing countries and collectively as a
group was unprecedented. At least some of the confidence with which developing
countries expressed their demands and bargained with the developed world can
be traced to the strength of the coalitions that lay behind them.
Bargaining Coalitions
Many of the coalitions at Cancun went back at least to the Doha Ministerial;
several reached further back to the formation of the WTO. Examples of these
included the African Group; the African, Caribbean and Pacific Group (ACP);
the group of Least Developed Countries (LDCs); the Small and Vulnerable Economies (SVE); and the LMG. All these coalitions helped developing countries share
information and coordinate their activities, and thereby play the proactive role
that they did in the preparatory process in Geneva and subsequently at
Cancun. Each one of these coalitions had varying success in placing its issues
on the Doha Development Agenda. However, once the actual negotiations
began, developing countries began to fear that few of the promises of the Doha
Development Agenda would be met and their concerns would be brushed
aside. This recognition catalysed two developments: the emergence of new
coalitions and changes in the relationships amongst them.
Four new coalitions of developing countries emerged at Cancun. The first was
the Core Group, which developed in reaction to the EU draft that had advanced
the position that negotiations on the Singapore issues should begin at Cancun.4
The group issued a joint text in July 2003 stating that “Explicit consensus on the
modalities is required for negotiations to commence not consensus on how to
classify and group the different procedural and structural aspects of the Singapore
issues”.5 The group pointed out that the African and LDC groups had
adopted similar positions. The group continued to meet at Cancun. Its letter to
Minister Pierre Pettigrew, Facilitator for the Singapore Issues at Cancun,
dated 12 September, had 29 signatories (with Bangladesh signing on behalf of all
3. “Statement by H.E. Mr Arun Jaitley, India”, WT/MIN(03)/ST/7 (10 September 2003), available:
<www.wto.org>; see also “Statement by H.E. Mr Lu Fuyuan, China”, WT/MIN(03)/ST/12
(11 September 2003), available: <www.wto.org> (accessed on 3 November 2005).
4. Bangladesh, Cuba, Egypt, India, Indonesia, Kenya, Malaysia, Nigeria, Pakistan, Venezuela,
Zambia, and Zimbabwe.
5. Comments on the EC communication (WT/GC/W/491) on the modalities for the Singapore
Issues, WT/GC/W/501 (8 July 2003), available at www.wto.org; accessed on 3 November 2005.
A. Hurrell and A. Narlikar
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420
the LDCs).6 Through conscious coordination, the African Group, the LDC group
and the ACP group, along with some members of the SVE group, took a similar
stand on the Singapore Issues on the final day of the conference. The second
coalition was on cotton. Its four members—Mali, Benin, Chad, and Burkina
Faso—proposed a complete phase-out of subsidies on cotton and financial
compensation for the LDCs until the subsidies were phased out.7
The third influential coalition at Cancun was the Alliance on Strategic Products
and Special Safeguard Mechanism (SP&SSM). At the beginning of the conference,
the coalition included 23 members. Under Indonesian and Philippine leadership,
the group proposed that developing countries be allowed to self-designate certain
strategic products that would not be subject to tariff reductions or new commitments. It also proposed a special safeguard mechanism to protect the domestic
markets of developing countries against import surges. By 13 September, this
coalition had expanded to 33 members.8
Perhaps the most influential coalition at Cancun was the G20, which was
formed to address the highly contentious issue of agriculture. When the European
Union and the United States issued a joint draft on agriculture on 13 August,
developing countries faced one of their greatest fears: the two giants colluding
and coming up with an agreement at the expense of the interests of developing
countries.9 Indeed, developing countries had learnt from hard experience that
such collusion was highly plausible. The Agreement on Agriculture in the
Uruguay Round was ultimately a product of the so-called Blair House Accord,
arrived at between the European Union and the United States, from which
developing countries had found themselves marginalised. The fear that “the EU
and the US will pull another Blair House Accord on us” brought together a
group of countries with some very divergent interests, including the Cairns
Group of agricultural exporters and others with defensive interests in agriculture,
into the G20. Minister Celso Amorim of Brazil, who was also coordinator for the
G20, explained the rationale of the group as follows:
The real dilemma that many of us had to face was whether it was sensible
to accept an agreement that would essentially consolidate the policies of
the two subsidising superpowers—with very modest gains and even
some steps backward (the new broader definition of “blue box” subsidies
to accommodate the US for instance)—and then have to wait for another
15 or 18 years to launch a new round, after having spent precious
bargaining chips.10
Led by Brazil, China and India, the G20 brought together all the biggest emerging
powers of the developing world. The group put forth an alternative proposal on
agriculture, dated 2 September, which was signed by 20 countries. They were
joined by Egypt and Kenya, and came to be referred to as the G22 at the time of
the Ministerial.
6.
7.
8.
9.
2003.
10.
Available: <http://www.ictsd.org/ministerial/cancun/documents_and_links.htm>.
“Poverty Reduction: Sectoral Initiative in Favour of Cotton”, TN/AG/GEN/4 (16 May 2003).
Bridges Daily Update (13 September 2003).
This fear was expressed to us repeatedly in interviews that we conducted in Geneva in May
Wall Street Journal (25 September 2003).
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A New Politics of Confrontation?
421
Each one of these coalitions relied on considerable research to support its
agenda. This contrasts with the laundry-list of demands that developing countries
had put up in their call for the NIEO. Even more interesting was the interaction
between the coalitions at Cancun. As a result of the differing priorities (and
sometimes directly conflicting interests) of some of these coalitions, several
dramatic rifts within the developing world could have appeared at Cancun. But
unprecedented “Alliances of Sympathy” emerged, where an effort was made to
coordinate positions with other coalitions of developing countries, and at least
resist overt opposition when proactive support was not possible.11 The G20
supported the proposals of the Alliance on SP&SSM, and the Special and
Differential Concerns of the LDCs. Through much of the conference, the ACP,
African Group, LDCs, G20, and the Alliance on SP&SSM consulted with each
other and attempted to coordinate positions. The ACP, African Group and the
LDCs similarly coordinated their positions and came to be known as the G90
on the final day of the Cancun Conference. Despite its many divergent interests
and members, here was a developing world that was displaying new forms of
collective action. Its sources lay in the adaptation by developing to their long
history of marginalization that went back to the early years of the GATT—a
history that was ridden with collapsed coalitions and disappointing outcomes,
with some long-lasting lessons.
Developing country coalitions may be classified into two analytical types:
bloc-type coalitions and issue-based alliances. Bloc-type coalitions have ideational
and identity-based factors uniting them, whereas issue-based alliances are formed
for more instrumental reasons. Further, bloc-type coalitions bring together likeminded countries and try to maintain collective positions across issues and over
time; the latter type are formed to address a specific threat and dissolve once the
issue has been resolved.12 Bloc-type coalitions dominated Third World diplomacy
across international organisations, and included the G77 in the UNCTAD, the Nonaligned Movement and the Afro-Asian Unity in the UN General Assembly, and the
Informal Group of Developing Countries in the GATT. The attempt by the United
States to bring services within the mandate of the GATT in 1982 catalysed the Informal Group into a more focused, hard-line coalition of resistance: the G10.13 The
G10 typified traditional Third World-ism. It relied on grand stands that appealed
to principles of distributive justice rather than well-researched technical detail. It
refused to engage with any other coalitions (even those involving other developing
countries) that did not agree with its position, and rejected all overtures to take on
joint, exploratory research initiatives.
Almost simultaneously with the emergence of the G10, there began a new
research initiative to explore the implications of introducing services in the
GATT under the leadership of Ambassador Felipe Jaramillo of Colombia. The
G10 initially attended some meetings under the Jaramillo initiative, but the two
groups soon parted ways. The group led by Jaramillo evolved into the Café au
Lait group. The draft proposal by the Café au Lait provided the basis for the
11. Phone interview, delegate from a leading African country, October 2003.
12. Amritha Narlikar, International Trade and Developing Countries: Bargaining Coalitions in the
GATT & WTO (London, Routledge, 2003).
13. The G10 in its hard-line version comprised Argentina, Brazil, Cuba, Egypt, India, Nigeria,
Nicaragua, Tanzania, Peru, and the former Yugoslavia. For a detailed account of coalitions in the
Uruguay Round, see Amrita Narlikar, International Trade and Developing Countries, 2003.
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A. Hurrell and A. Narlikar
Punta del Este Declaration that launched the Uruguay Round in 1986. The
successes of this coalition stood out against the major losses that were sustained
by the G10. The greatest of these losses was the inclusion of services in the GATT.
Adapting from the failures of the G10 and the successes of the Café au Lait,
developing countries began several experiments with the issue-based coalitions
from the mid-1980s, which found further vindication in the successes of the
Cairns Group. Developing countries seemed to be turning wholeheartedly to
issue-based coalitions, which combined developed and developing countries,
placed considerable emphasis on research initiatives, and adopted less hard-line
negotiating tactics.
The experience with issue-based coalitions, however, yielded very mixed
results. Most displayed short lives and minimal influence. Countries would join
multiple issue-based coalitions, producing an unsustainable mass of crosscutting loyalties and frequent defections. That developing countries had paid a
price for their knee-jerk infatuation with issue-based coalitions soon became
evident in the imbalances that underlay the Uruguay Round agreements. Developing countries recognised that they had given up their old ways, had bound
themselves to tighter and more expansive disciplines of the Uruguay Round,
and had gained very little in return.
The limited gains of issue-based coalitions led to the emergence of the “smart
coalitions” of Cancun that combine features of bloc-type and issue-based coalitions.
Memories of the failed bloc-style coalitions persist, and hence delegates are quick to
claim that their coalitions are not driven by the politics of ideology or identity;
instead, they insist that the motivation behind any coalition is interest. They
stress the importance of research and information sharing, and also show a willingness to engage cooperatively with other coalitions. But a closer inspection reveals
that these coalitions have retained some of the key features of blocs. Most are
restricted to developing countries, outlive the issue of focus, and frequently come
to operate across a range of issues even while retaining emphasis on a central issue.
Many of the Cancun coalitions continued to play a prominent role at the Hong
Kong Ministerial, with some new ones emerging along similar lines. A prominent
example was the so-called NAMA-11, comprising Argentina, Venezuela, Brazil,
China, Egypt, India, Indonesia, Namibia, Pakistan, Philippines and South
Africa. The coalition sought greater flexibility for developing country commitments on non-agricultural market access (NAMA), and also a more balanced
outcome within NAMA and between NAMA and agriculture.14
Negotiation Strategies
Negotiation analysts classify strategies across the two ends of a continuum. At
one end lies the strict distributive strategy, also known as the value-claiming
strategy. It comprises a set of tactics that are functional only for claiming
value from others and defending against such claiming, when one party’s
goals are partly in conflict with those of others. Examples of strict distributive
strategies include: high opening demands, refusing all concessions, exaggerating
14. “Market Access for Non-agricultural Products”, TN/MA/W/65 (8 November 2005), available:
<www.wto.org>; “Reclaiming Development in the Doha Development Round”, WT/COMTD/W/
145 (1 December 2005), available: <www.wto.org>.
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A New Politics of Confrontation?
423
one’s minimum needs and priorities, manipulating information to others’
disadvantage, taking others’ issues hostage, worsening their BATNA (best
alternative to a negotiated agreement), issuing threats, and imposing penalties.
At the other end of the continuum lies the integrative or value-creating strategy,
which comprises a set of tactics that are instrumental to the attainment of goals
that are not in fundamental conflict, and hence can be integrated for mutual gain
to some degree. Examples include sharing information relatively openly to
explore common problems or common threats; proposing an exchange of
concessions that might benefit more than one party; and reframing the issue
space itself to ease an impasse. Such a strategy involves “actions designed to
expand rather than split the pie”.15
The dominant strategy of most developing countries at Cancun seems to have
been a distributive one. The G20 epitomised this strategy at Cancun, just as the
LMG had done in Doha: both coalitions threatened to hold the other parties’
issues hostage, offered no negotiating gain in return, and made no attempt to
prioritise their demands or come up with fallback positions. The Core Group
offered no concessions on the Singapore Issues. In the endgame, the African
Group backed by the LDCs and ACP as the G90 also threatened to walk out if
the Singapore Issues were included. It is not surprising that the Cancun
Ministerial ended in stalemate.
The use of the strict distributive strategy in recent times bears some
resemblance to the hard-line tactics of the bloc-type coalitions that were discussed
in the previous sub-section.16 But, even here, some adaptation is discernible. First,
rather than “just say no” to the proposals of the outside party, the coalitions at
Cancun backed their own proposals with substantive research. Second, they
framed their proposals in terms of the rules of the WTO rather than through simplistic appeals to the logic of distributive justice. Rather than seek a rewriting of
existing rules, they pointed to the fact that developing countries had kept their
end of the Uruguay Round bargain whereas the developed countries had not.
The G20, for instance, presented the limited liberalisation envisaged by the
EU – US proposal in this light. Similarly, even when the LDCs made the demand
for Special and Differential (S&D) treatment, it was framed in terms of their
willingness to adhere to the Uruguay Round (and the technical support that
they needed to do so) as opposed to S&D treatment to avoid compliance with
WTO rules. The expanded research base and an appeal to a different set of
principles that fitted within the normative framework of the WTO suggest that
the discourse underlying the new politics of fragmentation is fundamentally
different from its predecessor of the 1970s.
At Hong Kong, many features of the politics of North– South confrontation
continued. Having signalled their commitment to stand firm at Cancun, the
coalitions at Hong Kong also managed to resist fragmentation. It is certainly the
case that even the powerful G20 faced a significant risk of fragmentation.
Brazil is reported to have shown willingness to concede the Blue Box to the
United States in the July Framework negotiations. However, Argentina and
India took the lead in insisting on a negotiation over this issue within the coalition,
15. John Odell, Negotiating the World Economy (Ithaca: Cornell University Press, 2000).
16. Amrita Narlikar and John Odell, “The Strict Distributive Strategy for a Bargaining Coalition:
The Like-minded Group in the World Trade Organization”, in John Odell (ed.), Negotiating Trade: Developing Countries in the WTO and NAFTA (Cambridge: Cambridge University Press, 2006), pp. 115–144.
424
A. Hurrell and A. Narlikar
thereby helping to ensure that Brazil did not give in.17 Similarly, even though
some developing countries had expressed their opposition to the LDC package,
India continued to provide technical assistance to the LDCs and also facilitate
agreement on the package.18 The Minister for Commerce, Kamal Nath,
emphasised India’s support for the LDCs in parliamentary discussions:
India spoke not only for herself, but in the tradition established since the
time of Pandit Jawaharlal Nehru and Shrimati Indira Gandhi, we also lent
a powerful voice to the concerns of least developed countries. Through
close coordination with the LDC Group and the Africa Group, we were
instrumental in fashioning an LDC package.19
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With all parties determined to avoid deadlock, a limited face-saving deal was
struck in December 2005, and the developing country coalitions that had
emerged at Cancun succeeded in avoiding fragmentation.20
Transnational Coalitions with NGOs
The fourth feature concerns links with NGOs. The TRIPs and public health group in
the run-up to Doha demonstrated the importance of such links most visibly. Developing countries found influential allies in Northern NGOs that exercised considerable pressure on their governments to concede to the demands of the coalition
and also reinforced the legitimacy of its demands.21 Similar transnational alliances
were evident between developing countries and certain NGOs at Cancun. Some
operated as think tanks in supporting the agenda of developing countries. Others
issued statements expressing political support for the demands of the G20. The willingness of the developing world to engage with NGOs is fairly recent, still evolving,
and derives from their learning experience in the WTO.
Assessing Adaptation within the WTO
Changes in the positions of developing countries along the lines highlighted
above are best understood in terms of cognitive and institutional adaptation,
rather than a deeper-rooted process of learning. Haas suggests that adaptation
may be distinguished from “learning” in three important ways.22 First, to
17. Interview with Indian negotiator, New Delhi, 3 January 2006.
18. Interview with Indian trade negotiator, December 2005.
19. Lok Sabha Debates, available: <http://164.100.24.208/debate14/debtext.asp?slno ¼ 4288&
ser ¼ &smode¼ > (accessed 13 March 2006).
20. Whether developing countries will still be able to overcome differences among themselves in
the current negotiations remains to be seen. Potential rifts lie between the LDCs and other developing
countries, as well as issue-specific differences between countries that have a more aggressive and
liberalising interest versus those with more defensive interests in agriculture, services, and NAMA.
21. John Odell and Susan Sell, “Reframing the Issue: The Coalition on Intellectual Property and
Public Health in the WTO, 2001”, in John Odell (ed.), Negotiating Trade: Developing Countries in the
WTO and NAFTA (Cambridge: Cambridge University Press, 2006), pp. 85–144.
22. Ernst Haas, “Collective Learning: Some Theoretical Speculations”, in George W. Breslauer and
Philip Tetlock (eds.), Learning in US and Soviet Foreign Policy (Boulder: Westview, 1991), pp. 62–99. Note,
however, that the definition of “learning” is contested, with Philip Tetlock adopting a much more
expansive definition that includes adaptation within it. See Breslauer and Tetlock, Learning in US and
Soviet Foreign Policy.
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A New Politics of Confrontation?
425
qualify as learning, change in policy behaviour must be accompanied by a
fundamental rethinking of underlying concepts and values; under adaptation,
actors can change behaviour without rethinking existing values. Second,
learning must involve a redefinition of the ultimate goal; in contrast, adaptation
simply focuses on altering the means of actions rather than the ends. Finally,
under learning, the new goals that policy makers adopt along with the means
that they devise to achieve them are based on consensual knowledge driven
by epistemic communities; such a link with epistemic communities is not
necessary for adaptation to take place. On all three fronts, even though the magnitude of change in the behaviour of developing countries in the WTO is
considerable, it shows a closer affinity with adaptation rather than learning. It
is a product of trial and error within the institution rather than a conscious
rethinking of fundamental goals and values, and draws considerably on past
interactions and experiences within the WTO rather than the prescriptions of
an external epistemic community. As such, the challenge posed by the major
developing countries, with the ranks of a range of LDCs and other developing
countries behind them, is based within the broad liberal paradigm. Unlike the
confrontation of the 1960s and 1970s, the new challenge has not been
accompanied by a call to replace the WTO with an alternative organisation
(contra the attempt by developing countries in the 1960s to establish the
UNCTAD as an alternative to the GATT); it has not advanced a vision of
development alternative to the liberal one; and the change that they have
demanded is change within the regime rather than a radical restructuring.
Two types of adaptation processes may be discerned among developing
countries in the WTO, namely cognitive and institutional. At the cognitive level,
trade negotiators respond selectively to past failures and successes and modify
behaviour accordingly. Changes in coalition formation, negotiation strategies,
and links with NGOs present adaptation along such lines. But changes in the
insider activism of developing countries may be better analysed within the
broader framework of institutional adaptation. Countries respond to past successes and failures, but iterated interactions with, and within, the institution facilitated the evolution of new institutional processes in the WTO as well as the
negotiating mechanisms of particular countries. An example of a change in the
workings of the WTO as a result of developing country pressures is the relatively
improved openness of the Green Room and other small group meetings. In contrast, we also have examples of institutional adaptations by countries to improve
their effective participation within the WTO. For instance, the Trade Policy Division was formed within the Ministry of Commerce in New Delhi to facilitate
closer links between their Permanent Mission to the WTO in Geneva, the Commerce Ministry, and various stakeholders within the country. At Geneva itself,
countries have attempted to increase the numbers on their delegations to facilitate
better attendance in WTO meetings. Besides negotiating coalitions, they have also
attempted to institutionalise greater coordination and information sharing among
themselves with the help of some external organisations. Although there have been
some changes at the level of the home government, much of the adaptation has
taken place at the level of the individual negotiator, but is then institutionalised
partly through the Permanent Mission to the WTO (with feedback to and from
the national capitals) and partly through sharing and emulation that results
from the workings of coalitions and informal networks.
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A. Hurrell and A. Narlikar
While individual negotiators may accumulate the lessons of experience, the
translation of these lessons into negotiating positions often requires the initiative
of leaders. This leadership is especially important in a member-driven
organisation like the WTO that deals with some highly technical issues, and
where many developing countries suffer from the disadvantage of having
small or no delegations and are unable to keep up with the technical content
of the negotiations. Leadership is important not only in terms of sustaining
the costs of research and organisation but also for sustaining the negotiating
position. As long as the core group holds together, particularly when the core
comprises the emerging powers of Brazil, China and India as was the case
with the G20, it is highly likely that smaller members will resist bilateral
carrots and sticks from outside and the coalition will endure. If the core gives
any indication of differences within it or temptations to defect, a chain of
defections ensues.23 That developing countries recognise the importance of
leadership is clearly borne out in our interviews.24 At Cancun, Brazil, China
and India maintained a special effort to hold together.25 The risk of adhering
to the coalition’s position and being isolated in the endgame with the hard-line
position decreased for the smaller members. As a result, unlike many
developing country coalitions that had collapsed in the endgame in the past,
the G20 did not fragment on the final day of Cancun. Much of this was a
product of cumulative adaptation by delegations in Geneva and implementation
through the initiative taken by the leading developing countries. Similarly at
Hong Kong, Brazil and India took the lead in alleviating the concerns of other
developing countries that were part of the G20 as well those outside the
coalition.
Domestic-level Explanations
An alternative category of explanations focuses on domestic factors. It is certainly
plausible that in certain countries domestic discontent with WTO rules may have
fuelled governments to adopt the hard-line positions that they did in Cancun. It is
also possible that a decoupling between the systemic liberal-solidarist norm and
entrenched interests within certain states precipitated their hard-line stance.
Liberals have long been inclined to explain deviance from the expected pattern
of homogenisation in terms of the influence of blocking coalitions concerned
with the distributional consequences of liberalisation or what Solingen calls
“statist-nationalist-confessional coalitions”.26 However, we find that
domestic-level explanations are inadequate for both our cases.
An excessive reliance on domestic politics would have difficulty explaining
precisely why so many developing countries with some very different political
structures and societies have reacted in very similar ways at the international
level. Moreover, by focusing on the particular domestic voices that reflect the
23. Narlikar and Odell, op. cit.
24. Interviews with delegates from developing countries, Cancun, 9–14 September 2003.
25. Amrita Narlikar and Diana Tussie, “The G20 at the Cancun Ministerial: Developing Countries
and their Evolving Coalitions in the WTO”, The World Economy, Vol. 27, No. 7 (2004), pp. 947–966.
26. Etel Solingen, Regional Order at Century’s Dawn: Global and Domestic Influences on Grand Strategy
(Princeton: Princeton University Press, 1998); Jeffrey Friden, Debt, Development and Democracy:
Modern Political Economy and Latin America, 1965–85 (Princeton: Princeton University Press, 1991).
A New Politics of Confrontation?
427
position that governments took internationally, we risk ignoring the many other
domestic voices that may have supported the international consensus on
liberalisation. Above all, such interpretations risk ignoring the degree to which
states continue to be very powerful, and where negotiating positions and trade
policies may still be largely top down. Clearly, more empirical work is needed
on the domestic political economies of developing countries. We make an
attempt in this direction by addressing the cases of two developing countries
that played a leading role in the confrontation at Cancun, namely Brazil and India.
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Brazil
Brazil’s foreign and foreign economic policy has long been associated with a
strong and relatively autonomous state and with rather weak input from political
parties, business or other societal groups. Moreover, Brazilian foreign and foreign
economic policy for much of the period after 1985 appeared to go against expectations that democratisation and economic liberalisation would lead naturally and
easily to an increase in the pluralism of the foreign policy-making process and a
greater role for societal actors.27 Indeed, much of the literature has underlined
the limited influence of business and interest groups over economic policy in
general and trade policy in particular.28
It is certainly the case that this pattern underwent modification after 1990.
First, the increasingly complex and increasingly intrusive character of the
trade agenda and the sheer difficulty of calculating the costs and benefits of a
potential agreement means that state negotiators need information that only
business can provide.29 Second, there have certainly been particular cases
where foreign trade issues have become major domestic political issues. The
case of intellectual property and proprietary medicines provides one prominent
example. Finally, there has been greater business group mobilisation, as with the
creation of the Brazilian Entrepreneurial Coalition (CEB) in 1996 or the formation of the Permanent Forum on International Agricultural Negotiations30
and a greater willingness on the part of the government to create links with
such groups (as with the creation of a series of inter-ministerial working
groups, GICI, created in 1999).
And yet it is the limits to interest-group input and involvement that are still
most striking. In the first place, the state has remained a surprisingly effective
gatekeeper. Itamaraty (the Brazilian foreign ministry) is relatively well insulated
from direct interest-group pressure. Interest groups are mostly targeted at the
27. Miles Kahler (ed.), Liberalization and Foreign Policy (New York: Columbia University Press, 1997).
28. Jeffrey Casson, “Democracy Looks South: Mercosur and the Politics of Brazilian Trade
Strategy”, in Peter R. Kingstone and Timothy J. Power (eds.), Democratic Brazil: Actors, Institutions
and Processes (Pittsburgh: Pittsburgh University Press, 2000) pp. 204 –216; Ben Schneider, “Business
Politics and Regional Integration: The Advantages of Organization in NAFTA and Mercosur”, in
Victor Bulmer-Thomas (ed.), Regional Integration in Latin America and the Caribbean (London: ILAS,
2001); Kurt Weyland, “The Fragmentation of Business in Brazil”, in Francisco Durand and Eduardo
Silva (eds.), Organized Business, Economic Change and Democracy in Latin America (Miami: North–
South Center Press, 1998).
29. Maria Regina Soares de Lima, “Instituições Democráticas e Polı́tica Exterior”, Contexto
Internacional, Vol. 22, No. 2 (2000), pp. 265 –303.
30. Maria Izabel V. De Carvalho, “Estruturas Domésticas e Grupos de Interesse: A Formação da
Posição Brasileira para Seattle”, Contexto Internacional, Vol. 25, No. 2 (2003), pp. 363–401.
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A. Hurrell and A. Narlikar
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much more politically permeable Ministry of Foreign Trade and Development but,
whilst this ministry is heavily involved in the technical side of trade, it has far less
control over strategic policy. Business groups are consulted, but on cases and on
issues on which Itamaraty wants consultation.31 Second, where interest groups
have mobilised, there is little evidence that this has shifted government policy.
Third, congressional input is limited. The state does not have to seek authorisation
for trade policy in a way that gives congress any significant role in the objectives
and agenda of foreign trade policy (in obvious contrast to the United States). Nor,
despite the need for ratification of trade agreements, has congress ever been
especially effective at holding the executive politically accountable for the
conduct of foreign or foreign economic policy. Finally, although civil society in
Brazil is highly developed, its access points into the political system remain
limited and the pattern of co-option by the state remains, if not dominant,
extremely powerful.32
India
Similar to Brazil, India has long been seen as among the most proficient in WTO
diplomacy. Indian commitment to Third World-ist coalitions of resistance in the
WTO has continued even after it began its programme of economic liberalisation
in 1991 and despite frequent instances of complete isolation even after other
coalition members have defected.33 The unbroken proficiency and leadership of
the Indian delegation in Geneva has invited acknowledgement from many
other developing country delegations; in the words of one African country:
“India is the voice of the voiceless in the WTO”.34
The positions that Indian negotiators adopt in the WTO find support at home.
This may, at least at first glance, be explained by traditional explanations of
domestic political economy. First, the nature of Indian economic liberalisation
(underway since 1991) continues to be state driven.35 Certain business interests,
working hand in hand with the government, may have more to gain from state-led
selective liberalisation than open competition. Except for a few exceptions in
sub-sectors like informational technology and software, the licence-permit Raj
of post-independence India still pervades the mentality of many groups that
one might otherwise expect to be in favour of liberalisation. Second, deriving
partly from its colonial history and post-colonial development that was based
31. Interviews with government officials, April 2004.
32. Elisabeth Jay Frideman and Kathryn Hochstetler, “Assessing the Third Transition in Latin
American Democratization. Representational Regimes and Civil Society in Argentina and Brazil”,
Comparative Politics, Vol. 35, No. 1 (2002), pp. 21 –42.
33. For example, in the Uruguay Round, even after most of the members had defected, India
continued for a while to pursue the G10 agenda single-handedly; see Narlikar, op. cit. Similarly, at
the Doha Ministerial in 2001, the Like Minded Group fell apart in the endgame, and India stood
alone as the vanguard of resistance; see Narlikar and Odell, op. cit.
34. Phone interview with a former ambassador from a developing country, 21 October 2003.
35. Suma Athreye, “Trade Policy, Industrialization and Growth in India”, in Simon Bromley,
Maureen Mackintosh, William Brown and Marc Wuyts (eds.), Making the International: Economic Interdependence and Political Order (London: Open University, Pluto Press, 2004); Rob Jenkins, Democratic
Politics and Economic Reform in India (Cambridge: Cambridge University Press, 1999); Atul Kohli,
State-directed Development: Political Power and Industrialization in the Global Periphery (New York:
Cambridge University Press, 2004).
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A New Politics of Confrontation?
429
on models of import-substituting industrialisation, there remains “a very strong
colonial mindset” in India where the WTO is seen as an “instrument of neocolonialism”.36 Finally, accompanying a deep-rooted suspicion of the liberal
agenda is a serious lack of awareness of WTO issues. Think tanks and NGOs
dealing with WTO issues are few (notable exceptions being the Indian Institute
of Foreign Trade, the Indian Council for Research on International Economic
Relations, and the Consumer Unity and Trust Society). In the absence of sufficient
information about the concrete benefits of liberalisation, most constituencies find
it safest to support the nay-saying stance of their appointed trade negotiators in
Geneva.
A closer inspection of the actual decision-making process, however, reveals
that the domestic factors discussed in the previous paragraph provide, at best,
a supportive role; much more striking is the insularity of trade policy making
in India. The negotiating skill of the Indian delegation has traditionally been
Geneva based rather than closely connected with the capital. Admittedly, delegation members are drawn predominantly from the Ministry of Commerce
and Industry, but they have traditionally enjoyed considerable autonomy in
the actual decision making.37 Recent reforms have attempted to increase the
links between Geneva and the capital, as well as consultations with various
stakeholders including apex industry organisations, sector-specific industry
organisations, and NGOs.38 But, even now, it is the government which
decides whom to consult, when, and over what, and industry organisations
and NGOs show willingness and gratitude at being “educated” by officials.39
Particularly when compared to the trade policy networks that operate in developed countries, it remains at best an evolving but closely guarded double act
between the delegation and the Ministry of Commerce (where the latter is
responsible for several other issues besides the WTO negotiations). The Ministry
of Commerce remains considerably isolated from other central ministries or
other state-level ministries. Such disjointed decision making is further facilitated
by the federal system, wherein both the central and state-level ministries can
blame the other ministries for unpopular decisions/non-decisions. Some
parliamentary oversight exists, but only in a limited way.40
Despite the launch of the economic reform programme in 1991, not much has
changed structurally in the trade policy process. The limited domestic inputs
into the making of Indian negotiating positions mean that Indian trade negotiators
(with increasing involvement from the Ministry of Commerce) can continue to
operate with relative negotiating autonomy. It is certainly true that particular
sectors with more aggressive and proactive interests in the WTO—such as information technology and pharmaceuticals—play some role in the domestic process.
But the influence of these sectors in actual policy making represents more the
36. Interview with a member of the Indian delegation, Geneva, 20 May 2003.
37. Interviews, Geneva, May 2003 and New Delhi, April, 2004; Julius Sen, “Lessons Not Learned:
India’s Trade Policymaking Process from Uruguay to Doha”, Working Paper, Globalization and
Poverty (August 2003).
38. Interviews, New Delhi, April 2004; S. Narayan, “Trade Policy Making in India”, Paper
presented at the Workshop on Trade Policy Making in Developing Countries, International Trade
Policy Unit, London School of Economics, 25 May, available: <http://www.lse.ac.uk/collections/
internationalTradePolicyUnit/Events/May2005/IndiaPaper.doc> (accessed 12 June 2005).
39. Interviews, New Delhi, April 2004.
40. Sen, op. cit.
430
A. Hurrell and A. Narlikar
exception than the rule so far. Hence, inter-state adaptation within the international institution that we discussed in the first section of this paper may well
turn out to be the determining force in the making of Indian negotiating positions.
Trade Policy as Foreign Policy
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To what extent can this new politics of confrontation be seen as a part of
something bigger, a more generalised movement against both US hegemony
and liberal globalisation?41 We find some differences between our two cases.
The links between foreign policy and trade policy are stronger in the Brazilian
case than the Indian. But the overall pattern is that both states exhibit a tension
between the attempts to establish themselves as global powers on the one hand
and an identification with a confrontational Third World-ist collective on the
other.
Brazil
In the Brazilian case, there is significant evidence for the idea of a link between the
specific evolution of trade policy, including at and beyond Cancun, and the country’s broader foreign policy. In part this rests on a bureaucratic argument and the
degree to which the foreign ministry (Itamaraty) has been able to maintain control
over the conduct of trade policy. Itamaraty is an institution with a strong selfimage and a very powerful institutional mythology.42 It has also long been associated with a well-entrenched set of foreign policy assumptions: the intrinsic value
of national autonomy; the importance of sovereignty; the imperative of developing a more prominent international role and of securing the most favourable external conditions for economic development and for international recognition of
Brazil’s status as a significant international player; and the deep-rooted suspicion
that the United States represents an obstacle to these goals.43
Beyond institutions, the substantive policies of the Brazilian government at and
around Cancun have indeed meshed closely with the determination of the Lula
government to differentiate its own more assertively nationalist foreign policy
from that of its predecessor. Faced by the existing “hegemonic structures of
power”.44 Brazil needs to reassert national autonomy, to form coalitions with
other developing states in order to reduces its external vulnerability and to
increase its own bargaining power, and to work, however modestly, towards a
more balanced world order—“to increase, if only slightly, the degree of multipolarity in the world”, as the foreign minister put it.45 Mobilising claims for greater
representational fairness (as with membership of the Security Council) and
41. For an overview of the foreign policy options available to second-tier states see Andrew Hurrell,
“Hegemony, Liberalism and Global Order”, International Affairs, Vol. 82, No. 1 (2006), pp. 1 –19.
42. Zairo B. Cheibub, “Diplomatas e Construção Institucional: O Itamaraty em uma perspective
histórica’, Dados. Revista de Ciências Sociais, Vol. 28, No. 1 (1985).
43. Horrell, Andrew (2001). “The Foregin Policy of modern Brazil”, in Stephen Hook ed., Comparative foreign policy: Adaption Strategies of the Great and Emerging Powers Upper Saddle River: Prentice Hall: 137–154.
44. Guimarães, Samuel Pinheiro (1998).“Desafios de dilemas dos grandles paı́ses periféricos: Brasil
e India”. Revista Brasileira de Polı́tica International 41, 1: 108 –131.
45. Celso Amorim, interview Folha de São Paulo (16 May 2005).
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A New Politics of Confrontation?
431
distributional justice (as with Brazil’s promotion of a global hunger fund) is seen
as central to this task. In terms of actual policy, Brazil is placing increased emphasis on expanding relations with other major developing countries (especially
India, China and South Africa) and the re-launching of a more activist policy
towards Africa (and to a lesser extent, the Middle East). The emergence of the
G3 or IBSA (a cross-regime alliance between Brazil, India and South Africa) is a
manifestation of this strategy.46 Coalitional politics within the WTO is therefore
part of the goal of reshaping the international agenda.47
There are, however, a number of caveats. In the first place, as the conservative
critics of Lula’s foreign policy point out, the economic substance of South –South
relations is limited and Brazil’s dominant economic relationships remain with
the industrialised world and the region. Second, both the rhetoric and the
reality of Brazilian foreign policy is “globalist” and “univeralist”, that is the
country does not have a single set of foreign policy priorities and foreign
policy should not be seen only in terms of South – South relations and coalitions
with other developing countries. Thus the re-emergence of South – South ties
needs to be placed alongside the very significant emphasis placed by the Lula
government on relations with Latin America, both within Mercosur and increasingly with South America as a whole. The existence of a crucial Latin American
dimension represents an important difference between Brazilian foreign policy
today and its Third World-ist foreign policy in the 1970s when Brazil, in
general, stood apart from the region. Equally, although there are good reasons
for placing particular emphasis on the WTO, Brazil’s trade agenda includes
both negotiations with the United States over the FTAA and with Europe in
terms of the EU/Mercosur trade negotiations.
These contrasting pulls are indicative of a broader tension in Brazil’s
international insertion. On the one hand, much of the government’s
self-identification and many of its policies have indeed laid heavy emphasis on
Brazil’s ties with the South. They speak to a continued sense of vulnerability
and a perceived need to defend oneself against an increasingly intrusive world
that threatens old-established national ways of acting and thinking. But, on the
other hand, government policy reflects the sense of Brazil as an emerging
power with more in common with other actual, or would-be, powers than with
the “Global South” and willing to make whatever foreign policy choices will
secure for itself a greater voice in the councils and corridors of power.
India
In the Indian case, bureaucratic and institutional links between trade and foreign
policy are less direct than in the Brazilian case where the Itamaraty is responsible
for the conduct of trade policy as well as foreign policy. In contrast, while the
Ministry of Commerce in India is responsible for formulating trade policy, the
formulation and conduct of foreign policy lies within the turf of the Ministry of
External Affairs. Both ministries are jealous guardians of their turfs despite
46. The Brasilia Declaration was signed between Brazil, India and South Africa in June 2003; see
<www.southasiamonitor.org/diplomacy/2003/sep/26dip7.html>.
47. Celso Amorim, “The Foreign Policy of the Lula Government”, Speech, London School of
Economics, 17 March 2004.
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432
A. Hurrell and A. Narlikar
recent attempts to increase linkages between the two. Interestingly, however,
despite the minimal institutional links, the defiant strain in the substance of
Indian trade policy making is closely matched in the foreign policy of “the
India that can’t say yes”.48
India’s questioning of the liberal-solidarist consensus is evident across issue
areas. Perhaps most visibly, India detonated its nuclear device in 1998 in the
face of general opprobrium and condemnation. In response to recent proposals
on reform of the Security Council, India vehemently opposed the establishment
of a new category of permanent members without the veto on the grounds that
it could not accept discrimination of any kind within a reformed permanent membership. It pursued other new alliances aggressively. In 2000, it sought closer
relations with Putin’s Russia through a new protocol on technical and military
cooperation, and attempted to improve relations with its long-standing adversary
China through a presidential visit to Beijing in the same year. Both China and
India were at the helm of the G20 coalition, along with Brazil, in Cancun in
2003. India became a full dialogue partner of the ASEAN in 1996; the first
ASEAN – India summit was held in 2002. Its leadership of developing country
coalitions in the WTO such as the LMG, and subsequently the G20, was
matched by its leadership of IBSA or the trilateral initiative outside of the WTO.
Particularly in expressing its camaraderie with Brazil, India was outspoken; it
also signed a regional trade agreement with Mercosur in 2004 that became
operational in 2005.
Note, however, that akin to the Brazilian case, the Indian commitment to any
traditional, bloc-type Third World-ist coalition at a deeper, structural level
needs to be viewed with some scepticism for two reasons. First, it remains to be
seen how meaningful its regional cooperation endeavours with other developing
countries will turn out to be. For instance, India’s current share of Mercosur’s
global imports is less than 1%, while its exports to all of Latin America and the
Caribbean are only 1.9% of its total exports. In contrast, almost 50% of India’s
exports go to OECD countries. Second, simultaneously with its friendly initiatives
with developing countries, India has tried to keep its policy options open with the
developed world and with other major powers. Having lost its most loyal ally
with the collapse of the Soviet Union and decline of the NAM/G77 collectivism,
India has realised the importance of diversified alliances across the North –
South divide. Its rapprochement with the United States, begun in the Clinton
years, has acquired further momentum under the Bush administration, which
lifted the sanctions imposed by the United States in May 1998 to thereby allow
renewed defence cooperation.49 The Indo-US nuclear agreement of March 2006
presents a dramatic moment in India’s foreign policy, and stands in striking
contrast to its traditional Third World-ist position of non-alignment.50 India has
also signed a wide range of agreements with the European Union on areas including customs cooperation, and trade and investment development. Despite its
adherence to Third World-ist rhetoric on the one hand, it is reported to have
supported EU candidate Pascal Lamy over Uruguayan candidate Perez del
Castillo in the recent selection of the new Director General of the WTO. Despite
48. Stephen Cohen, India: Emerging Power (Washington, DC: Brookings Institution, 2001), p. 74.
49. C. Raja Mohan, Crossing the Rubicon: The Shaping of India’s New Foreign Policy (New Delhi: Viking
Books, 2003).
50. Note that the deal remains contested, and has attracted bitter opposition within India.
A New Politics of Confrontation?
433
the fact that India continued to lead the G20 at Hong Kong along with Brazil, and
repeatedly expressed its support for other developing country coalitions (such as
the LDCs), its language and negotiating position was less belligerent and uncompromising than the positions it had taken at Doha and Cancun.
Hence, even though India has strengthened its alliances with developing
countries across regions and issue areas, these alignments are not necessarily
part of a revival of traditional Third World politics and foreign policy. Rather,
these strategic alliances are perhaps better viewed in terms of an attempt by
India to improve its BATNA. The choice of alliances is determined primarily by
Realpolitik rather than an across-the-board commitment to Third World-ism.
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Conclusions
We have developed three arguments. First, the behaviour of major developing
countries at the WTO needs to be understood in terms of cognitive and
institutional adaptation by developing countries within a specific institutional
context. The “Alliances of Sympathy” visible at Cancun were not an atavistic
call for a New International Economic Order, nor were they prompted by
domestic politics. Rather, they were prompted by decades of interaction and
adaptation by the participants within the particular institution. This adaptation
has impacted on the capacity for effective insider activism, on coalitional politics,
on negotiating strategies, and on relations with NGOs. We contend that this
adaptation is non-trivial as an independent variable explaining outcomes.
Second, although indirect domestic factors are significant, we argue that the
domestic side to trade policy is less important than is often suggested.
Consultations with interest groups and NGOs in both countries are limited and
selective, and often serve as devices to legitimise the policy and negotiation
positions that the governments adopt internationally. And finally, we should be
cautious before seeing North– South confrontations in trade negotiations only,
or even principally, in terms of a broad foreign policy challenge to the developed
world or as expressing deep-rooted rejection of the hegemonic liberal order that
developed in the 1990s. Elements of such trends are clearly visible, both
amongst developing countries in general and in the cases of Brazil and India.
But both these countries have been careful to ensure that they diversify their
alliances and trade relationships with the developed countries across issue
areas, even while signalling their commitment to each other and to the notion
of a developing world in trade politics.
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Global Governance 17 (2011), 311–329
From High Ground to High Table:
The Evolution of Indian Multilateralism
Rohan Mukherjee and David M. Malone
Independent India’s multilateral strategy was designed defensively as a
means to provide the country with some leeway in an intensely competitive bipolar world. Today, India casts itself as an emerging power intent on
exerting the bilateral and multilateral influence that the country’s founding leaders had long aspired to. Obsolete frameworks such as nonalignment and developing world leadership have mostly been jettisoned in the
process. However, questions remain about India’s willingness and capacity
to take on global responsibilities to match its global aspirations. This article traces the evolution of India’s multilateral approach and examines its
multilateral stance through several prisms: the UN Security Council, the
World Trade Organization, global climate change negotiations, and some
emerging international groupings of states in which India plays a role.
Among our conclusions is that, in India’s diplomacy, much depends on domestic factors. KEYWORDS: India, multilateralism, non-alignment, United
Nations Security Council, World Trade Organization, climate change, BRIC,
IBSA, Group of 20.
THE EVOLUTION OF INDIA’S APPROACH TO MULTILATERALISM OVER RECENT
decades constitutes a silent, but as yet incomplete revolution. From idealist
moralizer to often pragmatic dealmaker, India’s transition mirrors its rise—
second only to China—from the confines of severe poverty and underdevelopment. India’s voice carries more weight today in multilateral forums largely
due to its enhanced economic power, political stability, and nuclear capability.
India spent many years after independence in 1947 struggling to achieve
the international status that it expected because of its civilizational greatness
and geopolitical uniqueness. But a lack of material resources and military capability long prevented it from securing a place under the “diplomatic sun.”1
The Cold War global confrontation between East and West offered shelter
through alliances, but threatened India’s newfound independence. During
those early years, India turned to multilateralism as a way of magnifying its influence in international affairs until it could exert influence more materially.
Today, in almost every international forum, India has explicitly engaged
with smaller groups of powerful nations to affect outcomes at the expense of
the more broad-based universalist approach that it traditionally espoused (or
claimed to). India does not extensively rely on the multilateral treaty-based
system, preferring instead bilateral relationships with major and regional pow311
312
From High Ground to High Table
ers in almost every field of international cooperation from trade to nuclear
technology.
India today has outgrown its Cold War role as a third world, non-aligned
nation to exercise influence as an emerging power through global governance
by oligarchy—be it as part of the Five Interested Parties in the World Trade
Organization (WTO); the Brazil, South Africa, India, and China (BASIC)
group at the Copenhagen climate change negotiations of 2009; or the Group
of 4 (G4) coalition of countries (Brazil, Germany, India, and Japan) demanding permanent membership in the UN Security Council. By choosing this variation on multilateralism, India is buying into a strategy developed largely by
the United States, Russia, China, and several Western European powers to comanage international economic and, to a lesser degree, security systems. However, India has so far been tentative about its willingness to assume much
responsibility within these systems. Public opinion in India may well be ready
for such a transition, but it is not yet clear that much of India’s often conservative establishment is.
First, we trace the evolution of India’s approach to multilateralism from
1947 to 1991. Then, we look at India’s performance in four substantive fields
of foreign policy or multilateral forums of significance to India: the UN Security Council; the WTO and its Doha Round negotiations culminating in 2008;
international efforts to combat climate change through the Copenhagen and
Cancun UN conferences; and some emerging international groupings of states
in which India is playing a role. In the concluding section, we lay out the challenges that India faces in its approach toward multilateralism today.
Historical Overview
Postindependence India was an enthusiastic supporter of the multilateral system, at that time comprised largely of the United Nations and its associated organizations. In September 1946, Jawaharlal Nehru professed “wholehearted
co-operation and unreserved adherence, in both spirit and letter” to the UN
Charter.2 Parts of India’s subsequently drafted constitution laid out directive
principles of state policy on international affairs that adhered noticeably to
principles of the UN Charter such as promoting peace and security, promoting
international law, and settling international disputes through arbitration.3
Kashmir: 1947–1948
New Delhi encountered a major setback at the UN on the issue of Kashmir in
the winter of 1947. Faced with the choice of unilaterally repelling a Pakistani
attack and consolidating India’s hold on the erstwhile princely state, or referring the matter for arbitration to the UN, Nehru chose the latter option. Much
to his disappointment, the Security Council failed to endorse India’s claim to
Kashmir; instead, insisting on a plebiscite of the state’s population. India real-
Rohan Mukherjee & David M. Malone
313
ized belatedly that “the Security Council was a strictly political body and that
decisions were taken by its members on the basis of their perspective of their
national interest and not on the merits of any particular case.”4
The Kashmir episode permanently colored Indian thinking on the UN.
Since then, India has been loath to allow any form of multilateral intervention
in the South Asian region.5 Pakistan’s consistent efforts to internationalize the
Kashmir issue at the UN doubtless contributed to India’s growing preference
for bilateralism over multilateralism.6 New Delhi’s aversion to any UN inclination to override state sovereignty is evident even in its approach to peacekeeping—India’s most celebrated contribution to the UN, through its generous
provision of military and civilian staff—for which it emphasizes the need for
consent of the parties involved.
The Nehru Years: 1947–1964
Despite its disappointment over Kashmir, India remained engaged with multilateral diplomacy because it believed that “the political game must be played
in such a manner that India in spite of her political weakness could establish a
politically strategic position.”7 Also, “tensely surrounded by a galaxy of big,
industrially-developed Powers to one of which interests she could easily fall a
prey, the only possible defence for India perhaps was to get vigorously involved in the affairs of the United Nations.”8
Nehru’s foreign policy of nonalignment was a rational response to the tense
post–World War II international system. He described it as “the natural consequence of an independent nation functioning according to its own rights.”9 The
policy was not simply one of neutrality. As the Indian representative at the UN,
V. K. Krishna Menon, asserted, “there can no more be positive neutrality than
there can be a vegetarian tiger.”10 For India, nonalignment was a policy that
stressed independence in international decisionmaking above all else.
India applied the nonaligned principle to its stance in the UN. It opposed the
1950 Acheson Plan, also known as the Uniting for Peace resolution, which empowered the UN General Assembly to act on security challenges at times when
the Security Council was in deadlock. When war broke out in Korea, India initially endorsed UN intervention, but declined to label China an aggressor in the
conflict or to support the crossing of UN troops into North Korea across the
thirty-eighth parallel. When the UN did intervene in Korea, India sent not troops,
but a field ambulance unit into battle. India adopted an equidistant approach at
the Indochina conference of 1954.11 But it did stake out ground as a “champion
of pacific settlement of disputes” at the UN, contributing the highest number of
troops to UN peacekeeping missions in Sinai and Congo.12
India was often criticized for not applying the nonaligned principle evenly
in its behavior at the UN: “On the one hand, . . . India intensely desired to
bring about a change in the political system of the world by supporting all
kinds of anti-colonial and anti-imperialist movements, while on the other
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From High Ground to High Table
when faced with a real situation India supported the maintenance of status quo
in the name of peace.”13 And India’s failure to condemn the Soviet invasion of
Hungary in 1956 (while decrying Western military involvement on the side of
Israel in the Suez crisis of the same year) led to perceptions in the West of Indian duplicity.
Decolonization provided India with a useful international influence multiplier. In 1947, Nehru championed the first Asian Relations conference in New
Delhi. In 1954, India pushed for special provisions in the General Agreement
on Tariffs and Trade (GATT) for developing countries looking to protect their
nascent economies from international competition.14 In 1955, India was a key
promoter of the first Afro-Asian conference in Bandung, Indonesia. In the early
1960s, India lobbied for the expansion of the Security Council and was influential in the creation of the Group of 77 (G-77) developing countries that remains active to this day on economic and social issues within the UN system.
India’s appreciation of the multilateral system suffered an important setback in 1962 when China invaded India over a border dispute dating back to
the colonial era. To Nehru’s appeal for China to be declared an aggressor in
November 1962, only forty countries responded positively, of which only
three were from the twenty-five nonaligned countries at the time.15 On the
other hand, the Western bloc afforded India, both in spirit and in kind, significant support.
A Global and Indian Hiatus: 1964–1971
Nehru’s death in 1964 led to a gradual Indian disengagement from the UN and
Non-Aligned Movement (NAM), although New Delhi remained active
enough to frustrate Pakistan’s attempts to isolate it on issues relating to their
bilateral disputes. A more pragmatic focus on bilateral relations (including
with the superpowers) took hold, qualifying the early idealism of India’s foreign policy, which had sought the moral high ground as a source of influence
and “strategic space.”16 Srinath Raghavan’s important recent work on Nehru’s
strategic thought and foreign policy in fact severely qualifies a view of Nehru
as primarily an idealist.17
Nehru’s successors, especially his daughter, Indira Gandhi, cleaved to
powerful strains of realpolitik in their domestic and international dealings.
India and Pakistan went to war in 1965, evoking a mixed response from the
nonaligned countries, with more countries supporting Pakistan than India in
part because of religious affinity. The UN did nothing more than to call for a
cease-fire to end the crisis. Not surprisingly, in the NAM, India’s engagement
became “general, rhetorical, and distant.”18
Strategic Departures: 1971–1991
India’s nadir in its engagement with the multilateral sphere came in 1971 during its military intervention in East Pakistan, which subsequently became
Rohan Mukherjee & David M. Malone
315
Bangladesh. India was roundly criticized in the UN and the NAM for interfering in what was legally a domestic matter for Pakistan. Despite making a plea
on behalf of the millions of Bengali refugees who had crossed the border during the conflict, and the security implications of this exodus for India, New
Delhi found itself almost entirely isolated in the international community.
India, which had signed a treaty of friendship with Moscow only months earlier, escaped official censure by the UN solely because of the Soviet veto in
the Security Council.
New Delhi went on in 1974 to conduct its first nuclear test, snubbing the
nonproliferation regime that India itself had championed just a decade earlier.
In defending its action, the Indian government described the test as a peaceful
nuclear explosion and, having never signed the Nuclear Nonproliferation
Treaty (NPT) on grounds that it was unfairly biased toward the established nuclear powers, claimed it could not be found in violation of it. But the test led
to a strengthening of the nuclear nonproliferation regime, as India was cast
into diplomatic purdah in the field of arms control and disarmament for the
next three decades.19
During the 1980s, New Delhi was sorely tried by the Soviet invasion of
Afghanistan (reserved on substance, but mindful of its close ties with
Moscow) and grew further estranged from the NAM. And during that decade,
India launched an ill-fated “peacekeeping” mission in Sri Lanka that was interpreted locally by many as more of a forcible military intervention, and also
air-dropped food into Tamil areas of Sri Lanka under domestic political pressure to aid the population there in its fight against the Sri Lankan government.
But by the end of the decade, growing rapprochement between the United
States and the Soviet Union began to reinvigorate the Security Council as a
forum for multilateral cooperation.20 In this spirit, at a special session of the
General Assembly in 1988, Prime Minister Rajiv Gandhi put forward an ambitious proposal for nuclear disarmament.21
Adjusting to a New World
Post–Cold War, the UN became considerably more active than it had been over
the previous two decades, marked initially by the 1992 Rio Summit on Climate Change, at which India played an important role.22 In other UN conferences, including that leading to the indefinite extension of the NPT in 1995,
and the adoption of the Comprehensive (Nuclear) Test Ban Treaty (CTBT) in
1996, New Delhi occasionally opted for a stance viewed by some as a wouldbe “spoiler.”23
Domestically, reforms accelerated India’s economic growth rate and ultimately garnered it emerging nation status. The collapse of the Soviet Union
administered the final nail in the coffin of nonalignment as a meaningful instrument. Political fragmentation within India meanwhile contributed to the
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From High Ground to High Table
emergence of divergent opinions on the country’s international role while Indian diplomacy took on distinctly economic hues.24
Third world leadership became only an intermittent and secondary goal of
Indian foreign policy. Afro-Asian solidarity had little meaning in WTO negotiations where African agricultural interests could be at odds with those of
India, as highlighted by Amartya Sen.25 Meanwhile, India increasingly
stepped up efforts, notably in Asia, to consider alternative pathways of international cooperation. In 1992, India recognized Israel, leading to a thriving relationship in military procurement. The same year, New Delhi launched its
Look East policy, which focused on improving ties with Southeast Asian nations, culminating in full partnership in 1995 and membership in the Association of Southeast Asian Nations (ASEAN) Regional Forum in 1996.
In the following years, India’s engagement with the world continued apace.
Less than a decade after a second round of nuclear tests that invited the severe,
but short-lived, ire of the United States and China, in 2007 New Delhi concluded
the “123 Agreement” with Washington, DC, which would produce an end to
over three decades of nuclear isolation. Following intense lobbying by both the
United States and India, by October 2008 the deal had been approved by the International Atomic Energy Agency (IAEA), the Nuclear Suppliers Group, and
the US Senate, achieving for President George W. Bush the main positive element of his foreign policy legacy. While a prominent author in India expressed
alarm at the “self-conscious revolt in India against multilateralism” that the USIndia deal represented, he worried more about “how much like the US we [Indians] want to become . . . unilateral, oriented towards hegemony more than
stability of the world, and besotted with its own sense of power.”26
India Rising: Reform of the UN Security Council
Identifying early on an opportunity that India’s new economic dispensation
could create for the Security Council, Prime Minister Narasimha Rao in 1992
made a case for expansion of the Council “to maintain political and moral effectiveness.”27 The United States responded tepidly in 1993 with the suggestion that Council expansion should begin with Germany and Japan only. The
US response was a pointed reminder to India that its earlier anti-Americanism
in multilateral institutions still carried a cost.
In 1991–1992, India sat as an elected member in the Security Council during one of the body’s busiest periods with Iraq’s invasion of Kuwait; Iraq’s
subsequent repression of its Kurds; the beginnings of the disintegration of Yugoslavia leading to a succession of wars in the ensuing years all featuring extensive UN involvement; and a UN humanitarian venture in Somalia. India
sought to temper enthusiasm for armed intervention (as opposed to consentbased peacekeeping), later seeming prophetic of the risks then being courted.28
In 1996, India ran again for an elected seat. It competed with Japan for the
single Asian seat available and lost massively. Indian foreign service members
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spoke privately of the debilitating effects on their campaign of Japanese
“checkbook diplomacy” in the developing world. Doubtless this factor played
a role, but New Delhi’s caustic performance at the CTBT conference earlier that
year alienated not a few of its NAM partners as well as many in the West.29
After this humiliation, the Security Council’s important role in the 1998–
1999 Kosovo crisis and the 2002–2003 Iraq saga as well as its endorsement of
US-led military action in Afghanistan in 2001 and thereafter represented further reasons why India wishes to secure its own accession to a permanent seat
in the Council. In the run-up to the 2005 UN summit, India banded with
Brazil, Germany, and Japan (together known as the G4) in order to press for
Council reform involving the creation of four new permanent seats for them
(and another two for Africa as well as four additional elected seats). In spite of
a determined push from all of the capitals involved, the effort failed. The G4
had essentially argued its case on the basis of entitlement given the weight of
the four countries in international relations, their financial share of the UN’s
bills, and their contributions to aspects of the UN’s work such as peacekeeping. But this failed to address the concern of some member states that were
more worried about the Security Council’s effectiveness than the additional legitimacy a wider composition could impart, fearing that a much larger Council could become paralyzed on key issues.
By 2006, the issue of the day was the candidacy of Indian UN Under-Secretary-General Shashi Tharoor for the position of Secretary-General, an effort
eventually torpedoed by the United States. Gradually what fervor there was in
India for a permanent seat at the Security Council largely dissipated, particularly after the Group of 20 (G-20)—in which India played an influential role—
emerged as the key leader-level forum in addressing the global financial and
economic crisis of 2008–2009. Referring to India’s campaign for a permanent
seat, former foreign secretary M. K. Rasgotra commented in 2007 that “things
of that kind will come to India unasked as its economic and other strengths
grow.”30
After a long gap, India returned to the Security Council in January 2011
as an elected member. Almost immediately, it was required to juggle contending principles within its foreign policy canon when Libyan leader Muammar
Gaddafi moved to repress the protest movement engulfing the country. India
joined all other Council members in voting for sanctions and in referring the
regime’s behavior to the International Criminal Court (of which India is not a
supporter), leaving India’s ambassador Hardeep Singh Puri to explain that,
while gravely concerned about events in Libya, India “would have preferred a
more calibrated and gradual approach.”31 Several weeks later, on 17 March
2011, Gaddafi’s repression having grown more severe, the Council decided by
ten affirmative votes that carried the day against five abstentions (including
India’s) to mandate “all necessary means” to protect civilians in Libya and also
instituted a no-fly zone. Only days earlier, Indian foreign secretary Nirupama
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From High Ground to High Table
Rao had stated that India would oppose the use of force.32 Thus, India finds itself required to make difficult choices in extreme situations, appealing to different principles it sometimes evokes. The 17 March abstentions, all from
international heavyweights (Brazil, China, Germany, India, and Russia), make
clear that India’s presence in such bodies as the Security Council is shifting the
balance of international influence away from the West, even though Western
powers carried the vote on this particular issue and day.33
From Universalism to Individualism: The WTO
A more confident India also asserted itself in the multilateral trading regime,
as it formed a loose coalition of developing countries seeking to prevent the
launch of a new post-Uruguay trading round.34 Largely a passive spectator in
the GATT/WTO regime until the late 1990s, India had spoken up at the 1999
Seattle meeting of the WTO against the inclusion of labor and environmental
standards on the WTO agenda.35 In the run-up to the Doha Round of 2001,
India challenged the efforts of developed nations to introduce competition, investment, trade facilitation, and government procurement into discussions.
India also battled hard for the interests of its pharmaceutical industry, threatened by the WTO intellectual property regime.36 India’s negotiating stance
was aided by the fact that in the run-up to Doha, it was better prepared than
other developing countries to meet many Uruguay Round commitments due to
its economic reforms that began in 1991.37
At the WTO, India was careful to continue emphasizing its developing
country credentials in order to form coalitions within the larger group of developing countries to pressure the industrialized nations for concessions.
Brazil and India formed the G-20 group of developing countries in 2003,
advocating their collective interests on a number of issues (distinct from the
G-20 group of major economies that came together to tackle the global financial crisis in 2008).
In 2004, India was included in a small high-powered group at the WTO
called the Five Interested Parties—along with the United States, the European
Union (EU), Brazil, and Australia—that superseded the traditional Quad of the
United States, the EU, Japan, and Canada. India’s inclusion was a sign, beyond
its economic significance, of the G-20’s effectiveness as a negotiating bloc. It
was also a sign of US acceptance of India as an important player in multilateral negotiations.
The major powers engaged India at the WTO largely due to its growth potential. India was also in a better position to confront Western powers there
since its trade no longer relied as much on them because it was gradually shifting toward China instead.38 Further, whereas in the past India had opposed the
inclusion of services in trade negotiations, India’s services-led growth ensured
that by 2004—when services accounted for approximately 52.0 percent of
gross domestic product, up from 28.5 percent five decades earlier39—it was an
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ardent advocate of liberalization in trade in services.40 In its postliberalization
era, India’s traditional “deep antipathy toward the global trading system”41
was gradually being replaced by the realization that some concessions were
necessary in order to promote its economic interests and that negotiations involved cutting mutually acceptable deals instead of taking the unassailable
moral high ground.
Nevertheless, the Doha Round discussions of 2007 and 2008 proved a
brass knuckles affair amid a burgeoning global food security scare (with attendant inflation of basic produce prices in most countries). India and Brazil,
speaking “for” the developing countries, confronted the United States on agriculture, an important issue in the run-up to national elections in the United
States in late 2008 and in India in early 2009. While both Washington and New
Delhi were open to successful talks, their political bottom lines collided in
Geneva in July 2008. Rather damagingly for India’s international image, in the
final reel in Geneva, India was abandoned in its hard line by Brazil which, like
many African countries, on balance, wanted an agreement even at the price of
greater compromise. Indian commerce minister Kamal Nath stood out in his
vehemence within the negotiations. “I reject everything,” he was quoted as
saying in response to a compromise proposal that others seemed to be prepared
to swallow.42 He was alone in seeming to claim credit for the talks’ failure,
with EU, US, and Chinese negotiators, who had contributed considerably to
the overall deadlock, only too willing to deflect responsibility onto him.43
India’s position was colored, above all, by domestic politics.44 India had
faced domestic opposition to its membership in GATT even back in the 1950s.45
In the 1980s an economic analyst noted, “India’s trade policy is congealed in a
mould made by the domestic political interests.”46 The connection, according to
this analyst, was simple—politicians are sustained on the votes of farmers and
the money of industrialists. As a result, Indian negotiators find it safer to stick
to the “official line of solidarity amongst the developing countries, based on an
aggregation of demands and no concessions.”47 Nath, a highly intelligent, selfconfident politician, was above all a long-time Congress stalwart with an eye
constantly to domestic political advantage, keenly aware that 70 percent of
India’s population remains rural and largely sustained by agriculture.48
In India, Nath was largely portrayed in heroic terms.49 Less was said
about how the Chinese delegation was only too happy to see Nath in the lead.
But in the Congress-led United Progressive Alliance’s second consecutive
term following the 2009 election, Nath was shifted to the road transport and
highways portfolio and replaced by the emollient Anand Sharma. India
promptly invited over thirty leading trade ministers to New Delhi for consultations, perhaps in order to allow this change of personnel and style to sink in
fully and, in the words of one commentator, to cast India as a “pro-active participant in multi-lateral talks rather than a thorn in the flesh as the global media
had suggested in 2008.”50
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From High Ground to High Table
Following the collapse of Doha Round negotiations, New Delhi redoubled its efforts to achieve bilateral and regional trade agreements. By September 2009, India had conducted ten rounds of trade negotiations with
Japan, six rounds with the EU, and three rounds with the European Free Trade
Association (EFTA).51 In August 2009, India also concluded the ASEANIndia Free Trade Agreement (AIFTA), albeit a limited one involving many
opt-out options.52
The Shape of Things to Come: Climate Change
Following the 2009 national elections and a first term in which environmental
matters received scant attention within the government, Prime Minister Manmohan Singh appointed one of India’s most talented and mediagenic younger
politicians, Jairam Ramesh, to the environment portfolio. India’s position had
long been to stick closely to the terms of the Kyoto Protocol to the UN Framework Convention on Climate Change, under which industrialized countries
committed to specific targets for emission reductions while developing countries were not required to do so under the “common but differentiated” responsibilities approach that had characterized UN discussions and agreements
on the issue since the Rio conference.
Ramesh at first yielded little. However, it soon transpired that within the
government, Ramesh was arguing in favor of flexibility in line with the reported determination of Prime Minister Singh that, at the Copenhagen conference, India should be “part of the solution to the problem.”53 Ramesh was
quoted as arguing that “India must listen more and speak less in negotiations”
because its stance is “disfavored by the developed countries, small island
states and vulnerable countries. It takes away from India’s aspirations for permanent membership of the Security Council.”54 He was soon challenged by
two of India’s long-time negotiators. Specifically, they questioned an offer articulated by Ramesh that India could reduce its carbon intensity by 20 percent
to 25 percent of 2005 levels by 2020, because New Delhi had not yet elicited
reciprocal concessions.55
Ramesh’s arguments seemed to recognize on the one hand that India
could not stand idly by as its own environment headed toward serious degradation but also, implicitly, on the other that India needed to be in a position to
offer something positive if nonbinding—including a degree of international
follow-up on its implementation of commitments at the negotiating table—if
it genuinely wanted to play, particularly in the big leagues.56 Praful Bidwai, a
noted Indian journalist and commentator, offered India a thoughtful agenda for
Copenhagen that would aim for a “strong” accord, in the national and international interest, but he was not widely echoed.57 In the event, India offered (voluntary) emissions goals that would be subject to international “consultation
and analysis,” but not scrutiny or formal review.58
The outcome of the Copenhagen talks, widely perceived as a fiasco and
criticized by India’s prime minister, actually served India’s diplomatic interests
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well in allowing it to be “part of the solution.” A last-minute truncated accord
offered by the BASIC powers and the United States, and acknowledged—however reluctantly and only by taking “note” of it—by the conference plenary, underscored that India was now an indispensable negotiating partner on key
global challenges such as climate change. Unlike its posture in Geneva at the
WTO in 2008, when China shielded itself behind an assertive India, at Copenhagen India allowed China to take the heat for frustrating officials and nongovernmental organization activists who were campaigning for an ambitious
outcome.
Many at home in India perceived the results as positive rather than negative on the global climate conference and its limited outcome.59All in all, in
contrast to its positions at the WTO in 2008, India demonstrated agility in the
run-up to the Copenhagen conference and dexterity during the meeting, allowing it to emerge as one of the forgers of a compromise. Not surprisingly, it
also adopted a flexible negotiating stance at the follow-up UN conference in
Cancun in December 2010.60
New Diplomacy: New Forums
The emergence of the G-20 at the leader level and India’s inclusion represent
a politically significant graduation for the country rather than an introduction
to serious consultations on global financial issues. After all, India had long
been involved in such consultations at the International Monetary Fund and at
the Bank for International Settlements in Basel, cutting an impressive figure in
many instances. India’s “finance diplomacy” has been one of its strongest contributions to international relations writ large. The G-20’s emergence at the
leader level while Manmohan Singh was India’s prime minister was a happy
coincidence, as group insiders report that, given his extensive background in
economic issues, he has consistently been one of the two or three voices most
keenly anticipated and listened to around the table.61
India’s desire to be a “canny negotiator” that effectively walks the NorthSouth line could shape the country’s engagement with the multilateral system
in years to come.62 However, as Nitin Desai argues, this approach may work
less well in an era in which India is increasingly seen internationally as advancing its own interests rather than seeking to champion (more than rhetorically) those of a highly differentiated developing world as a whole.63
India’s tightrope walk is increasingly evident. It consistently voted with
Washington against Iran’s nuclear program at the IAEA while continuing to
maintain friendly bilateral relations with Iran and defend its own nuclear program. It promotes the notion of Brazil, India, Russia, and China (BRIC) as a
coalition of emerging economies championing developing nation causes, but
is careful not to antagonize Washington by endorsing an alternative international currency to the dollar, something for which China and Russia have expressed support.64 It has joined Brazil in criticizing China’s exchange rate
policies, making clear that BRIC solidarity is selective.65
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From High Ground to High Table
It is increasingly clear that New Delhi will walk the North-South line
largely to its own benefit, employing development rhetoric to both rally poorer
nations and pressure richer ones, yielding at times to pressure from both sides,
but very much keeping its national interests to the forefront in crafting its ultimate bottom line and exploiting its multiple international identities including
its status as an emerging power.
While India seems willing to play its part in international summits and negotiations, New Delhi prioritizes bilateral ties, regional forums, small caucus
groups within wider institutions, and new forums of particular relevance to
India’s interests. The US relationship has already paid rich dividends in terms
of nuclear technology, trade, agriculture, science and technology, military cooperation, and a host of other areas. Buoyed by these successes, New Delhi
has established strategic partnerships (of varying depth) with a host of powers,
including the EU, Russia, Japan, Israel, Brazil, South Africa, and China.
In 2003 India, Brazil, and South Africa combined to form IBSA, a forum
for credible South-South cooperation along both political and economic lines
explicitly presented as a partnership of the leading democracies of their continents. Initially launched at the leader level in September 2006, this “dialogue”
forum has so far focused mainly on trade while the three countries also emphasize the multiethnic nature of their societies. The forum has served as an
arena of strategic cooperation between the three emerging powers. One analyst describes it as “both a strategic alliance for the pursuit of common interests of developing countries in global institutions but also as a platform for bi-,
trilateral and interregional South-South cooperation.”66 While the economic
content of IBSA is private sector led, in keeping with the market economies of
the three countries involved, Prime Minister Singh has invested himself enthusiastically in this new forum. IBSA is for India a first-of-its-kind partnership based partly on political values. However, shared democratic values also
underpinned the US-India rapprochement, and India has participated in several
broader international gatherings of a democratic nature and repeatedly upheld
the democratic character and content of the commonwealth.67
One alarm bell triggered by IBSA and other such bodies is whether, rather
than representing global outreach, such groupings represent, as Rajiv Kumar
suggests, a “flight from the region” where India’s own subregional organization, the South Asian Association for Regional Cooperation (SAARC), is embarrassingly marking time.68 All recognize that SAARC’s effectiveness as a
regional forum is in part undermined by tensions between Pakistan and India,
but India’s own leadership of the region within which it is, to a degree, a hegemon, has been hesitant, with little credible follow-up between summits and
ministerial meetings. India has instead actively pursued regional relationships
with ASEAN and the Shanghai Cooperation Organization (SCO), not least because of China’s deep involvement in both organizations and the regions that
their memberships cover. Because it does not include India among its full
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members, the SCO may actually be of greater concern to India at present, focused as it is on Central Asia, with which North India has long historical and
cultural ties, and which enjoys significant natural resource reserves.69
A reservation over much of the “variable architecture” available to India in
its diplomacy today—as described by Shankar Acharya—is that most of the
bodies mentioned above are not yet mature, have no secretariats, and constitute
mainly highly informal institutions that are likely to prove of transitional rather
than longer-lasting value.70 This does not mean that they are irrelevant. On the
contrary, they offer India opportunities for different types of engagement with
an international system that is increasingly variegated in terms of the power and
influence of individual countries or groups of countries, especially as US global
hegemony continues to wane. India will need to remain nimble in assessing
what groupings it should join and where it should invest its effort at a time of
significant fluidity in plurilateral, regional, and multilateral arrangements.71
The Challenges of Domestic Politics
When asked what India does best internationally, a noted denizen of India’s
Ministry of External Affairs, and a keen bilateralist at that, replied without a
moment’s hesitation “multilateral diplomacy.”72 But in that sphere New
Delhi’s posture has often been described as “defensive” and “obstructionist”
by Indian and non-Indian observers alike, along with recognition that Indian
negotiators are rarely less than “impressive” and often “brilliant.”73
Although reactions to some of India’s actions and positions over time no
doubt overstate the tilt against multilateralism in Indian foreign policy, they do
raise two important questions that are relevant today as India emerges as a premier global interlocutor. First, what kind of power does India aspire to be, and
how will it engage with others in years to come? Second, is the Indian foreign
policy establishment attuned to engaging with the multilateral system, not just
on India’s own terms but also on terms that will appeal to others and contribute
to positive outcomes?
In 2004 Manmohan Singh outlined India’s global philosophy, which he
described as “cooperative pluralism.”74 Nonetheless there exists a gap between prime ministerial and other Indian aspirations for a more genuinely multilateral management of international relations on the one hand, and India’s
negotiating position and style in a variety of forums and issue by issue on the
other. This gap is emphasized by a commentator on India’s earlier often obdurate climate change diplomacy: “How did a country likely to be on the frontline of climate impacts—with a vast proportion of the world’s poor and a
reasonably good record of energy-related environmental policy and performance—reach this diplomatic cul de sac?”75 The story is the same in trade—
India holds up its economic liberalization as a major achievement in
facilitating the free flow of goods and services across borders, yet gets saddled
with the blame for obstructing the Doha Round. Similarly on nuclear technol-
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From High Ground to High Table
ogy, India trumpets its record in nonproliferation and nuclear safety, yet is excluded for three decades from multilateral access to nuclear technology and is
consistently chided for refusing to sign on to the NPT and CTBT.
Domestic politics play a key role in determining India’s positions on hotbutton international issues. And domestic politics in India have largely been
geared toward constraining the positions of its negotiators and representatives,
or influencing them unduly toward being intransigent and holding dogmatic
positions on key issues for fear they may be seen as insufficiently sensitive to
parochial national interests. Despite India’s new membership in the multilateral power elite, the domestic chorus on multilateral challenges too often remains a resounding no. Negotiators are not equipped or mandated to pull
domestic constituents along, at a time when India’s domestic politics are getting more complex by the day. The climate change issue provides a case in
point. India’s representatives are routinely castigated by domestic politicians
for the slightest hint of a conciliatory stance. In October 2009, Ramesh outlined the steps that India had taken to share the responsibility of arriving at an
agreement.76 However, “on cue, he was torn apart by sections of the domestic
constituency, as he has been before, for making such utterances.”77
While other countries are not immune to the push and pull of domestic
politics, India’s disadvantage is that it has not yet developed a habit of conciliating domestic pressures with a results-oriented stance in some multilateral
institutions. Indian experts point to a wariness of multimotive gains and a tendency by Indian negotiators to default to zero-sum calculations.78 Likewise,
the organization of Indian arguments around “principles,” as Kumar points
out, largely precludes compromise; whereas advancement of its “interests”
might more greatly favor “give and take” in order to achieve overall positive
outcomes.79
New Delhi’s growing drive to join the major powers in managing the multilateral system creates a degree of unpredictability concerning how India’s
positions are likely to evolve during international negotiations. An Indian interlocutor comments that “Indian leaders may yet recognize the difference between perching themselves on a high chair at the high table where they must
cooperate with those that really run the show, and sitting at the head of the developing nations’ table where they can hold sway and appear to matter.”80
Given that the future of the international system is likely to be determined to
a significant degree by Sino-US understandings and disagreements, India will
likely continue to straddle as many multilateral divides as possible to keep its
options open while its weight in international relations grows.
Conclusion
Jaswant Singh, former foreign minister of India, comments that “multilaterally, many Indian voices have been very conscious of years of colonial ‘subjecthood.’ The result has been excessive Indian touchiness at times.
Rohan Mukherjee & David M. Malone
325
Underlying Indian positions in some international economic negotiations has
been a fear of foreign economic looting rooted in our history.”81
India’s attachment to multilateralism is marked by a simple truth—postindependence, it was the next best option, second to wielding the actual power
that it perceived itself to deserve in international affairs. Over the years, India
has been constrained to remain mostly a (selective) rule taker in the multilateral system while believing it should have been a rule maker. This has led to a
number of apparent contradictions and inconsistencies in its policy, not least
with respect to its strong attachment to sovereignty and the nonuse of force, its
feeble promotion of its own attractive values of democracy, and its internal
struggle for the attainment of human rights.
India does take its international legal obligations very seriously if, as do
other countries, occasionally in the breach. However, pooled or shared sovereignty is, in the words of one Western envoy in New Delhi, “not India’s
thing.”82 For many Indian practitioners and analysts, multilateralism is at best
a defense against the unilateralism of others, just as arguments for multipolarity have been largely articulated with reference to a unipolar order centered on
Washington, DC, that perhaps reminds too many Indians of the colonial dispensation to which they were once subjected.
As India takes on further responsibilities, like it currently is doing in the
Security Council, New Delhi’s decisions may surprise some Indians by their
pragmatism and also some of the country’s international partners on occasions
when it harks back to some of its earlier principles. India has not yet thought
through the extent to which it is able and willing to take on extensive and potentially expensive economic burden-sharing obligations. The voluntary, nonbinding route in defining its commitments is more attractive for now but, as its
economy and weight grow further, it will not find it easy to stick to this path.
Balancing domestic politics with a desire for international status—both
economic and political—will be India’s challenge in the future. Notes
Rohan Mukherjee is a doctoral candidate in politics at Princeton University. He frequently publishes on Indian foreign policy. David M. Malone, a former Canadian high
commissioner to India, is president of Canada’s International Development Research
Centre.
1. Jawaharlal Nehru quoted in T. Ramakrishna Reddy, India’s Policy in the United
Nations (Cranbury, NJ: Associated University Presses, 1968), p. 30.
2. Indian Annual Register: July–December 1946 (Calcutta: N. N. Mitra, 1947),
pp. 252–253, cited in the Indian Council of World Affairs, India and the United Nations
(New York: Manhattan, 1957), p. 28.
3. Dhiraj R. Chamling, India and the United Nations (New Delhi: Associated
Publishing House, 1978), p. 9.
4. Chinmaya R. Gharekhan, “India and the United Nations,” in Atish Sinha and
Madhup Mohta, eds., Indian Foreign Policy: Challenges and Opportunities (New
Delhi: Academic Foundation, 2007), p. 200.
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From High Ground to High Table
5. See C. Raja Mohan, “India and the New World Order,” Seminar 529 (September
2003), www.india-seminar.com/2003/529/529%20c.%20raja%20mohan.htm.
6. See Muchkund Dubey, “Reform of the UN System and India,” in Atish Sinha
and Madhup Mohta, eds., Indian Foreign Policy: Challenges and Opportunities (New
Delhi: Academic Foundation, 2007), p. 186.
7. Werner Levi, “Necrology on Indian Neutralism,” Eastern World 17, no. 2
(1963): 10, cited in T. Ramakrishna Reddy, India’s Policy in the United Nations
(Cranbury, NJ: Associated University Presses, 1968), p. 26.
8. Chamling, India and the United Nations, p. 116.
9. Asian Recorder 3 (1957): 1531, cited in Priyankar Upadhyaya, Nonaligned
States and India’s International Conflicts (New Delhi: South Asian Publishers, 1990),
p. 7.
10. UN General Assembly, fifteenth session, part 1, Official Records, vol. 1, 906th
plenary meeting, agenda item 9 (17 October 1960) (New York, 1961), p. 751, cited in
Reddy, India’s Policy in the United Nations, p. 34.
11. A. Appadorai and M. S. Rajan, India’s Foreign Policy and Relations (New
Delhi: South Asian Publishers, 1985), p. 488. India’s subsequent participation in the
International Control Commission monitoring adherence to the conference agreement
was thought by Western countries to be mostly partial to communist actors in Indochina
battling Western influence and troops.
12. Charles P. Schleicher and J. S. Bains, The Administration of Indian Foreign
Policy Through the United Nations (New York: Oceana, 1969), p. 108.
13. Chamling, India and the United Nations, p. 155.
14. Indian Council, India and the United Nations, pp. 185–188.
15. Upadhyaya, Nonaligned States, p. 55.
16. Siddharth Varadarajan, national editor of The Hindu, interviewed by David
Malone, New Delhi, February 2010.
17. Srinath Raghavan, War and Peace in Modern India: A Strategic History of the
Nehru Years (London: Palgrave Macmillan, 2009).
18. A. K. Damodaran, Beyond Autonomy: India’s Foreign Policy (New Delhi:
Somaiya Publications, 2000), pp. 169, 175.
19. See Ian Anthony, Christer Ahlstrom, and Vitaly Fedchenko, Reforming Nuclear
Export Controls: The Future of the Nuclear Suppliers Group, SIPRI Research Report
No. 22 (Oxford: Oxford University Press, 2007), pp. 41–56.
20. See David M. Malone, ed., The UN Security Council: From the Cold War to the
21st Century (Boulder: Lynne Rienner, 2004), particularly, pp. 4–13, 617–649, and the
chapter by Peter Wallensteen and Patrick Johansson, “Security Council Decisions in
Perspective,” pp. 17–33.
21. See J. N. Dixit, India’s Foreign Policy, 1947–2003 (New Delhi: Picus Books,
2003), p. 203.
22. Eric Voeten, “Why No UN Security Council Reform?” in Dimitris Bourantonis
et al., eds., Multilateralism and Security Institutions (London: Routledge, 2008), p.
292.
23. Amitav Mallik, Technology and Security in the 21st Century: A Demand-Side
Perspective, SIPRI Research Report No. 20 (Oxford: Oxford University Press, 2004),
p. 74.
24. See C. Raja Mohan, Crossing the Rubicon: The Shaping of India’s New
Foreign Policy (New York: Palgrave Macmillan, 2004), for a fuller exposition of these
ideas. See also, for example, Sitaram Yechury, “Back to Basics,” Seminar 560 (April
2006), www.india-seminar.com/2006/560/560%20sitaram%20yechury.htm; Dipankar
Sengupta, Debashis Chakraborty, and Pritam Banerjee, eds., Beyond the Transition
Phase of WTO (New Delhi: Academic Foundation, 2006), p. 21.
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327
25. See Amartya Sen’s comments in P. S. Suryanarayana, “China, India Will
Continue to Grow, Says Amartya Sen,” The Hindu, 19 February 2009, www.hindu.com
/2009/02/19/stories/2009021955072100.htm.
26. Pratap Bhanu Mehta, “Five Balancing Acts,” Seminar 560 (April 2006),
www.india-seminar.com/2006/560/560%20pratap%20bhanu%20mehta.htm.
27. Tad Daley, “Can the UN Stretch to Fit Its Future?” Bulletin of the Atomic
Scientists 48, no. 3 (April 1992): 41.
28. See Chinmaya R. Gharekhan, The Horseshoe Table (New Delhi: Longman,
2006), p. 3.
29. This was confirmed in extensive interviews of UN delegates by David Malone,
New York, December 2006, after that election to the UN Security Council.
30. Maharajakrishna Rasgotra, “Foreign Policy Must Meet 21st Century Needs,” Observer Research Foundation Analysis, 24 August 2007, www.orfonline.org/cms/sites
/orfonline/modules/analysis/AnalysisDetail.html?cmaid=10325&mmacmaid=10326.
31. “India Hopeful Peace Will Soon Return to Libya,” NetIndian, 27 February
2011, http://netindian.in/.../india-hopeful-peace-will-return-libya-soon-envoy-un.
32. Sandeep Dikshit, “India Opposed to ‘No-Fly Zone,’ Use of Force Against Libya,”
The Hindu, 3 March 2011, www.thehindu.com/news/national/article1507230.ece.
33. See Harvey Morris, “BRICs Hold Back,” Financial Times (London edition),
Section: Libya Uprising, 19 March 2011, p. 3.
34. Paul Blustein, Misadventures of the Most Favored Nations: Clashing Egos,
Inflated Ambitions, and the Great Shambles of the World Trade System (New York:
Public Affairs, 2009), pp. 67, 96.
35. Dipankar Sengupta, Debashis Chakraborty, and Pritam Banerjee, Beyond the
Transition Phase of WTO: An Indian Perspective on Emerging Issues (New Delhi:
Academic Foundation, 2006), p. 29.
36. See Aaditya Mattoo and Arvind Subramaniam, “India and the Multilateral
Trading System Post-Doha: Defensive or Proactive?” in Aaditya Mattoo and Robert M.
Stern, eds., India and the WTO (Washington, DC: World Bank, 2003), p. 328.
37. Bibek Debroy, “India’s Economic Liberalisation and the WTO,” in Suparna
Karmakar, Rajiv Kumar, and Bibek Debroy, eds., India's Liberalisation Experience:
Hostage to the WTO? (New Delhi: Sage; Indian Council for Research on International
Economic Relations, 2007), pp. 40–41.
38. Debashis Chakraborty and Amir Ullah Khan, The WTO Deadlocked:
Understanding the Dynamics of International Trade (New Delhi: Sage, 2008), p. 2.
39. See Rohan Mukherjee, “India’s Development Priorities: Issues and Challenges
Along the Path to 2015,” Centre for Policy Research, New Delhi, March 2006, p. 5,
www.webarchive.org.uk/wayback/archive/20070209064031/http://www.asia2015conf
erence.org/pdfs/CPS-round.pdf. See also Government of India, Economic Survey of
India, 2008–09, Table A6: Gross Domestic Product at Factor Cost by Industry of Origin
(in current prices), July 2009, http://indiabudget.nic.in/es2008-09/chapt2009/tab13b
.pdf. Services include trade, hotels, transport, communication, finance, insurance, real
estate, business services, public administration, and defense services.
40. Chakraborty and Khan, The WTO Deadlocked, p. 5.
41. Blustein, Misadventures of the Most Favored Nations, p. 111.
42. Ibid., p. 267.
43. Anthony Faiola and Rama Lakshmi, “Trade Talks Crumble in Feud over Farm
Aid,” Washington Post, 30 July 2008, p. A01.
44. Confidential interviews with David Malone, New Delhi, 2 February 2011.
45. Indian Council, India and the United Nations, pp. 185–186.
46. Ashok Desai, “India and the Uruguay Round,” Economic and Political Weekly
23, no. 45/47 (Special Number, November 1988), p. 2383.
328
From High Ground to High Table
47. Ibid.
48. Blustein, Misadventures, pp. 112, 186. See also G. Chandrashekhar, “Can Indian
Agriculture Become Globally Competitive?” The Hindu Business Line, 10 September
2002, www.thehindubusinessline.com/2002/09/10/stories/2002091000051000.htm.
49. One leading Indian economist noted during a confidential interview that, if
India’s agricultural sector is such a “mess,” then surely successive governments rather
than the WTO have a great deal to do with this. In spite of enthusiasm over Nath’s
theatrics in the short term, his performance was later assessed more critically even by
Indian nationalists as “too abrasive.” Confidential interviews with David Malone, New
Delhi, January and February 2010.
50. Rituparna Bhuyan, “WTO Meet: Taking the Doha Round Forward,” Indian
Express, 4 September 2009, www.indianexpress.com/news/wto-meet-taking-the-doha
-round-forward/512639.
51. Patralekha Chatterjee, “Unhealthy Effects of FTAs,” Asian Age, 14 September
2009, http://patralekhachatterjee.wordpress.com.
52. Data are not yet available to determine whether trade with India’s new bilateral
and regional trading partners has increased as a result of these agreements.
53. See text of a conversation between Prime Minister Manmohan Singh and
Council on Foreign Relations president Richard Haas, 22 November 2009, www.cfr
.org/publication/20840/conversation_with_prime_minister_dr_manmohan_singh.html.
54. Nitin Sethi, “Jairam for Major Shift at Climate Talks,” Times of India, 19
October 2009, http://articles.timesofindia.indiatimes.com/2009-10-19/india/28079441
_1_greenhouse-gas-emission-reduction-climate-negotiations-change-negotiations.
55. Aarti Dhar, “Jairam Irons Out Differences With Negotiators,” The Hindu, 7
December 2009, www.thehindu.com/news/national/article61104.ece.
56. For an analysis of India’s negotiating quandary going into the Copenhagen
conference, see Dhruva Jaishankar, “Taking the Heat: Where India Stands on Climate
Change,” Pragati, December 2009, pp. 3–5.
57. Praful Bidwai, An India That Can Say Yes: A Climate-Responsible
Development Agenda for Copenhagen and Beyond (New Delhi: Heinrich Boll
Foundation, 2009).
58. Evan A. Feigenbaum, “India’s Rise, America’s Interest,” Foreign Affairs 89, no.
2 (March/April 2010): 90.
59. For editorial responses from two prominent Indian newspapers, see “Silver
Linings,” Indian Express, 21 December 2010, www.indianexpress.com/news/silverlinings/556927; “Far from Inspiring,” The Hindu, 21 December 2009, www.thehindu
.com/opinion/editorial/article67768.ece.
60. See T. Jayaraman, “Taking Stock of Cancun,” The Hindu, 13 December 2010,
www.thehindu.com/opinion/lead/article948372.ece.
61. Confidential interviews conducted by David Malone with Central Bank governors
and senior country officials (Sherpas) of several non-Indian G-20 members, 2009 and 2010.
62. David Michel, “Introduction,” in David Michel and Amit Pandya, eds., Indian
Climate Policy: Choices and Challenges (Washington, DC: Henry L. Stimson Center,
2009), p. 1.
63. Confidential interviews with David Malone, New Delhi, 2 February 2011.
64 “India Reluctant to Join De-Dollarization Chorus at BRIC,” Economic Times, 15
June 2009, http://articles.economictimes.indiatimes.com/2009-06-15/news/27648497_1
_bric-summit-treasury-bonds-sdrs. India also does not hold as much in US Treasuries as
China and Russia do, and this might add to its reluctance to join their chorus.
65. Geoff Dyer, “Brazil and India Add to Pressure on China,” Financial Times, 21
April 2010, www.ft.com/intl/cms/s/0/1d692fd2-4d1c-11df-baf3-00144feab49a.html#
axzz1NVKEEeFP.
Rohan Mukherjee & David M. Malone
329
66. Daniel Flemes, “Emerging Middle Powers’ Soft Balancing Strategy: State and
Perspectives of the IBSA Dialogue Forum,” Working Paper No. 57 (Hamburg: German
Institute of Global and Area Studies, August 2007), p. 6.
67. S. D. Muni in an interesting volume, India’s Foreign Policy: The Democracy
Dimension (New Delhi: Foundation Books, 2009), p. 35, cites Prime Minister
Manmohan Singh on his discussions with President George W. Bush in Washington,
DC, on 19 July 2005, during which he invoked shared democracy, endorsed a Global
Democracy Initiative, and spoke of India’s decision to contribute $10 million to the UN
Democracy Fund.
68. Confidential interviews with David Malone, New Delhi, 2 February 2011.
69. An original perspective on India and Central Asia is offered by Emilian
Kavalski, India and Central Asia: The Mythmaking and International Relations of a
Rising Power (London: I. B. Tauris, 2010). One need not agree with most of his
premises or conclusions to find the read stimulating; in particular, pp. 195–211.
70. Shankar Acharya, former chief economic advisor of the government of India,
interviewed by David Malone, New Delhi, February 2010.
71. The authors are grateful to Anwarul Hoda for sparking these thoughts during an
interview with David Malone, New Delhi, February 2010.
72. Confidential interview conducted by David Malone with one of India’s leading
foreign policy practitioners, May 2008.
73. On trade, see Mattoo and Subramaniam, “India and the Multilateral Trading
System,” p. 327; Sengupta et al., Beyond the Transition, p. 24; Blustein, Misadventures,
p. 111. On climate change, see Prem Shankar Jha, “Indian Public Perceptions of the
International Climate Negotiations,” in David Michel and Amit Pandya, eds., Indian
Climate Policy: Choices and Challenges (Washington, DC: Henry L. Stimson Center,
2009), p. 30. See also “Silver Linings,” Indian Express, 21 December 2009,
www.indianexpress.com/news/silver-linings/556927; Saubhik Chakrabarti, “The USVersus-US Debate,” Indian Express, 21 December 2009, www.indianexpress.com
/news/the-usversusus-debate/556936.
74. Manmohan Singh, “India and the World: A Blueprint for Partnership and
Growth,” speech at the Hindustan Times Leadership Initiative Conference, 5 November
2004, http://pmindia.nic.in/lspeech.asp?id=42.
75. Navroz K. Dubash, “Climate Politics in India: How Can the Industrialized
World Bridge the Trust Deficit?” in David Michel and Amit Pandya, eds., Indian
Climate Policy: Choices and Challenges (Washington, DC: Henry L. Stimson Center,
2009), p. 49, emphasis in original.
76. Sindhu Manjesh, “Talking Past Each Other,” Times of India, 25 November
2009, http://articles.timesofindia.indiatimes.com/2009-11-25/edit-page/28088676_1
_climate-change-copenhagen-world-economy.
77. Ibid.
78. Conversations with David Malone, New Delhi, February 2010.
79. Conversation with David Malone, New Delhi, February 2010.
80. Confidential correspondence with David Malone, January 2010.
81. Jaswant Singh, former foreign minister of India, interviewed by David Malone,
30 January 2010.
82. Confidential interview with David Malone, New Delhi, February 2010.
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India rising:
responsible to whom?
AMRITA NARLIKAR
Among the three rising powers with remarkable growth trajectories, India is
distinguished from Brazil and China by at least three positive factors as a potential negotiating partner for the West. The first is that its political system is broadly
similar to that of many developed countries, and it is often lauded as the world’s
largest democracy (population-wise). One does not have to buy wholeheartedly
into the ‘democratic peace’ hypothesis to acknowledge that democracy is a key
element in ‘like-mindedness’. This affinity of political system had a good deal to
do with the US embrace of India, under the George W. Bush administration, as
a strategic partner. The second, reinforcing the like-mindedness associated with
democracy, is the advantage of the English language. Admittedly, low literacy
levels mean that this advantage does not permeate all echelons of society. But
at least among India’s ruling elite, we see a great familiarity with not just the
English language but also English culture, in contrast to the other rising powers.
The third—a point emphasized by many economists—is a demographic advantage. Not only does India’s population match China’s in sheer numbers, with all
the market potential that this entails, it trumps China’s ageing population in its
productivity potential.
Focusing on these three advantages, plus the intrinsic advantage of actual
and potential growth that is associated with the B(R)IC phenomenon,1 several
analyses anticipate the following: (a) India would be a relatively ‘easy’ negotiating
partner for the established powers, in terms of both initial affinities and scope for
socialization; and (b) the pay-offs of engaging with India are likely to be high,
that is, the benefits would easily outweigh the costs. A good proportion of both
scholarship and policy seems to be driven by these assumptions. Others have, on
the other hand, pointed to the bottlenecks in India’s development and its record
in international negotiation, and tell a much more cautionary tale. The resulting
debate is exciting but polarized, with one side focusing on the opportunities and
the other side focusing on the challenges. This article argues that the evidence
provides strong support for the cautionary side of the debate, and that this
automatically renders the potential gains from engaging with India less straightforward. However, the article also emphasizes the important nuances and varia1
The acronym coined to represent the group of rising powers comprising Brazil, Russia, India and China, later
expanded to BRICS to include South Africa.
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tions to be gleaned from investigating how India negotiates with different parties:
these patterns of differentiation in India’s negotiations are useful for highlighting
ways in which outsiders might be able to trigger more cooperative behaviour
from India. The article proposes some policy recommendations along these lines.
The policy recommendations also highlight ways in which India might be able to
present its own behaviour in a more positive light to the outside world, and also
ways in which it may be able to serve its self-interest through change.
The article proceeds in four parts. First, I present a brief summary of the debate
on rising India’s potential as a negotiating partner. In the second section, I investigate the specifics of India’s negotiating behaviour with the five sets of actors
identified in the Introduction to this special issue of International Affairs: established
powers, other rising powers, smaller players, non-state actors and international
organizations. I conduct this analysis using the negotiation variables outlined in
the Introduction, namely negotiation strategy, coalitions and framing. In the third
section, I analyse the patterns of differentiation that emerge from this analysis.
One important implication is that certain types of interests and parties are likely
to face more hurdles than others when bargaining with India, limiting the potential benefits that might be expected to derive from assumed like-­mindedness or
economic growth. The fourth section discusses policy ­recommendations arising,
both for outside parties seeking to bargain more effectively with India and also for
a rising India that seeks to establish its place in the world.
A rising India negotiates: the debate
Scholars are broadly in agreement on India’s negotiating behaviour through the
second half of the twentieth century, when the country was a tough, inflexible
and often prickly negotiator. The paragraph below by Stephen Cohen captures
this nicely:
Western diplomats were for many years put off by India’s flexible nonalignment, which
for a time was a pretext for a close relationship with the Soviet Union. They were also
irritated by the style of Indian diplomats. While professional and competent, they seemed
compelled to lecture their British or American counterparts on the evils of the cold war,
the moral superiority of India’s policies, or the greatness of its civilization … As for
Beijing, the 1987 question of one Chinese official, asked half in jest, half seriously, ‘Why
are the Indians so inscrutable?’ reflected his puzzlement with what is seen as an unrealistic
combination of arrogance and poverty. Only Moscow seems to have gotten along well
with New Delhi.2
But when analysts address themselves to India’s negotiations as a rising power, the
zone of academic agreement rapidly disappears. Some scholars of a rationalist
bent argue that as India rises, its growing integration in the world economy will
lead to a convergence of its interests with other players: greater stakes in the
system will also produce a sense of ownership and willingness to invest in it.
An implicit assumption usually underpinning this view is an economic one: the
2
Stephen Cohen, India: emerging power (Washington DC: Brookings, 2001), p. 66.
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India rising
Indian economy, despite short-term ups and downs, has strong foundations.3 The
self-interest of India’s liberalizing coalitions within this growing and liberalizing
economy will drive foreign policy and negotiating behaviour in an increasingly
cooperative direction. Constructivists point to a different driver—socialization—
that is likely to produce greater norm convergence: as India acquires positions
of greater prominence in international institutions, it will come to value the
norms that underpin the system and emerge as their upholder and even potential
enforcer. Both mechanisms lead to the same end: a rising India that is a more
flexible, pragmatic and cooperative negotiating partner. C. Raja Mohan is a strong
proponent of this optimistic view and portrays this transition in India’s negotiation practice as well under way:
If a single image captured India’s national strategic style, it was that of a porcupine—
vegetarian, slow-footed and prickly. The famous defensiveness of the porcupine became
the hallmark of India’s approach to the world … India’s engagement with the world since
the early 1990s posits a fundamental change in course and a reconstitution of its core
premises. Whether it was the de-emphasis of non-alignment or the new embrace of the
US, or the attempts to rethink regionalism in the subcontinent and its environs, a radically
different foreign policy orientation emerged by the turn of the millennium.4
Mohan recognizes that India is constrained ‘by an unresolved tension between the
inertia of its policy positions framed during the early years of building the postcolonial state and the logic of its emerging major power status’.5 But his overall
assessment, as expressed in a subsequent article, is still sanguine: ‘Change might be
on the way as India begins to adapt, even if incrementally, to its increased weight
in the international system and the responsibilities that come with it.’6
Three results follow if one accepts the argument put forward by Mohan. First,
in the divergent pulls of autonomy and responsibility, India is showing a ‘nuanced’
shift towards the latter. Second, India is moving towards ‘selective coalitions’ that
lead it away from its allies in the Third World. And third, as it has had to adapt
to the ‘logic of major power status, India has been compelled to discard some of
its past baggage about equity and justice in the construction of global regimes’,
switching from champion of global equity to champion of global order. But there
is an alternative view, which represents the polar opposite to the one espoused
by Mohan, and is perhaps best captured by Stephen Cohen’s description of the
country as ‘the India that can’t say yes’.7
Even in an account that is largely sympathetic towards India, David Malone
makes the following observation, which suggests the persistence of at least strong
remnants of India’s ‘prickly’ diplomatic style even as its power rises:
3
An example can be found in Pratap Bhanu Mehta, ‘How India stumbled’, Foreign Affairs 91: 4, 2012, pp. 64–75.
Analysing the recent slowing down of the Indian economy, Mehta points to real economic strengths and
argues that ‘just as in 2009, India is still fully capable of entering the ranks of world economic heavyweights.
The problem, however, is that its politics are getting in the way.’
4
C. Raja Mohan, Crossing the Rubicon: the shaping of India’s foreign policy (Delhi: Viking, 2003), pp. 261–4.
5
Mohan, Crossing the Rubicon, p. 139.
6
C. Raja Mohan, ‘Rising India: partner in shaping the global commons?’, Washington Quarterly 33: 3, 2010, p.
138.
7
Cohen, India: emerging power.
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A noted denizen of India’s Ministry of External Affairs, a keen bilateralist at that, when
asked what India does best internationally replied without a moment’s hesitation ‘multilateral diplomacy’. And yet queries about Indian performance at the UN and elsewhere in the
multilateral sphere hardly validate that judgement: ‘arrogant’, ‘moralistic’, and ‘confrontational’ are terms more invoked by developing and industrialized counterparts, despite
recognition that Indian negotiators are rarely less than ‘impressive’ and often ‘brilliant’.8
Malone’s observation will not come as a surprise to those who recognize that rising
India maintains a serious preoccupation with autonomy. It remains cautious on
the agenda of democracy promotion, and strongly committed to the principle
of sovereignty.9 The rhetoric of its commitment to Third World unity may
have become more muted, but the occasions when it has abandoned developing
country allies are few and far between.10 And, contrary to the claim made by
Mohan, empirical examples of India’s willingness to take on the responsibilities
of upholding global order are rare.11 Cases of continued Indian recalcitrance in
international negotiations abound, across institutions and issue areas. George
Perkovich’s analysis provides several examples to support the view that India’s
rising power has not reformed its bargaining behaviour, and concludes: ‘India’s
long position as a moralistic and contrarian loner in the international community
has not excited others about working with India at the apex of the UN system.’12
While the view that a rising India is likely to be a more cooperative negotiator
relies on the success story of India’s growth, the view of its persistent toughness
points to alternative economic data. India’s slowing growth rates since 2009 are
arguably only in part a reflection of the adverse international financial climate,
and in fact derive more from deep-rooted and fundamental domestic problems.
Corruption levels continue to soar, with India scoring a sorry ranking of 94th
in the global corruption index of 2012 (lower than Brazil and China at 69 and 80
respectively, but higher than Russia at 133).13 On the ‘ease of doing business’ scale
it stands 132nd, and does especially badly on some indicators, such as enforcing
contracts (182nd of 183 countries!).14 The electricity blackouts in July 2012 attracted
considerable media attention, especially as the nation’s capital was affected; in fact,
several hours of power cuts on a daily basis and water shortages are commonplace in the lives of the overwhelming majority of even urbanized Indians.
Thus infrastructure weaknesses act as a grave deterrent to India’s exploiting its
growth potential; but cultural constraints are perhaps just as serious. Jim O’Neill
observes: ‘Among Indian elites, I often find a resentment of Western practices,
8
9
David Malone, Does the elephant dance? (Oxford: Oxford University Press, 2011), p. 270.
Gareth Price, For the global good: India’s developing international role, Chatham House Report (London: Royal
Institute of International Affairs, Chatham House, 2011).
10
Amrita Narlikar, ‘Peculiar chauvinism or strategic calculation: explaining the negotiation strategy of a rising
India’, International Affairs 82: 1, Jan. 2006, pp. 59–76.
11
Xenia Dormandy, ‘Is India, or will it be, a responsible stakeholder?’, Washington Quarterly 30: 3, 2007, pp.
117–30; Amrita Narlikar, ‘Is India a responsible great power?’, Third World Quarterly 32: 9, 2011, pp. 1607–21.
12
George Perkovich, ‘Is India a major power?’, Washington Quarterly 27: 1, 2003, pp. 129–44.
13
http://www.transparency.org/cpi2012/results, accessed 25 March 2013.
14
World Bank, Doing business 2012: doing business in a more transparent world (Washington DC: IFC and World Bank,
2012), http://www.doingbusiness.org/reports/global-reports/doing-business-2012/, accessed 19 March 2013.
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d­ evelopment among them.’15 O’Neill’s observation is supported by other studies,
all of which point to the persistence of a strong sentiment against liberalization, as
well as against essential second-generation reforms, emanating from both elite and
popular levels.16 If this reading of the Indian economy is correct, it has several vital
implications. Most immediately, for our purposes, it suggests that development
bottlenecks at home will prevent any easy transition of India into an accommodating power whose interests are aligned with existing major players; further, if
the cultural constraints are indeed as deep-rooted as several scholars suggest, then
norm convergence and socialization also become less likely.
Between these two extremes, where does the reality of Indian negotiation lie?
The next section offers an empirical analysis of India’s negotiating behaviour by
investigating similarities and variations in how it negotiates with different parties.
How India negotiates depends on whom it is negotiating with
With the aim of adjudicating between the two sides of the debate presented in the
preceding section, we now investigate a rising India’s negotiating behaviour with
the five sets of actors identified in the Introduction to this special issue: established powers, rising powers, smaller players, non-state actors and international
organizations.
India and the established powers
Understanding how India negotiates with the established powers is important
because it provides us with a useful indication of the extent to which its rise represents a challenge to the system or might be easily accommodated.
Post-independence India and the established powers of the West did not have an
easy relationship. India’s explicit leadership of the Non-Aligned Movement, along
with periods of great closeness to the Soviet Union, were frustrating irritants to
the United States and its western allies in the context of the Cold War. Far from
bandwagoning with other democracies that were also Great Powers, India’s record
in the Cold War era was predominantly one of balancing against them. In this
section, rather than reviewing India’s relations with a broad sweep of established
powers, I focus particularly on its relationship with the United States.17
Bilateral relations between the US and India were chequered with frustrations
and misunderstandings. Indeed, India and the US were—perhaps at best—what
15
Jim
16
O’Neill, The growth map: economic opportunity in the BRICs and beyond (London: Penguin, 2011).
Andrew Hurrell and Amrita Narlikar, ‘A new politics of confrontation: Brazil and India in multilateral trade
negotiations’, Global Society 20: 4, 2006, pp. 415–33; Shishir Priyadarshi, ‘Decision-making processes in India:
the case of the agricultural negotiations’, in Peter Gallagher, Patrick Low and Andrew Stoler, eds, Managing
the challenges of WTO participation: 45 case studies (Cambridge: Cambridge University Press, 2006).
17
The reason for this, besides limitations of space that preclude an analysis of India’s relations with all the
established powers, concerns the high power asymmetry in the years after 1945 between the US, as the new
hegemon, and the newly independent India, greatly weakened by the ravages of partition. This is when we
might have expected to see the greatest occurrence of bandwagoning. The US–India relationship in the early
years thus provides a hard test case of India’s ability to stand up to the West. Further, as improvement in
US–Indian relations is frequently cited by scholars such as Raja Mohan as evidence to support their argument
that a rising India is also a reforming India, Indo-US relations deserve our special attention.
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Stephen Cohen has described as ‘distanced powers’, the distance deriving at least in
part from US support for Pakistan in the Cold War. But toxic regional issues were
not the only cause of difficulty. Raymond Cohen has pointed to fundamental
differences between Indian and American negotiating cultures. For instance, he
writes: ‘Indian pride, I was told by diplomats, had long hobbled ties with the
United States. Time and again Indian officials and leaders had taken umbrage at real
or imagined insults to their national dignity.’18 Strobe Talbott, while offering us a
few rare examples of improved relations between the US and India (for instance,
Jacqueline Kennedy’s visit), admits that ‘moments of warmth in the US–Indian
relationship were exceptions to the general chill’.19 But the last decade has brought
about some important changes.
Rising India faces a much more amiable negotiating partner in the United
States, in part owing to reforms within India and its increasing economic power,
in part owing to a changed international context since 9/11 that has altered some
of the strategic calculations for the US. Has India responded to these changes?
Some scholars point to the Indo-US nuclear deal as clear evidence that India has
come of age, displaying a mature and pragmatic diplomacy and finally acquiring
due recognition from the US and other Great Powers. Recall, for instance, that
the Nuclear Suppliers Group (NSG) was created in the immediate aftermath of
the Pokhran I nuclear test of 1974, placing severe constraints on the export of
nuclear technology to states with ambitions of weaponization. What a transformation we see in the status of India—which has still signed neither the Nuclear
Non-­Proliferation Treaty (NPT) nor the Comprehensive Nuclear Test Ban Treaty
(CTBT)—today, with the India-specific safeguards agreement cleared by the International Atomic Energy Agency, and the NSG having even agreed the India-specific
waiver that allows the transfer of non-weapon nuclear technology to India. These
­developments, moreover, have resulted in good measure from the legitimacy that
India has acquired from its Civil Nuclear Agreement (the 123 Agreement) with
the US, as well as American lobbying efforts in the relevant forums as a followon from the agreement. Several scholars see these changes not only as evidence
that India has come of age and won the recognition that is due to it, but also
as proof of the maturing of India’s diplomacy and its willingness to cautiously
embrace new responsibilities. After all, the India that was wont to complain of
the ‘nuclear apartheid’ represented by the established regime, and fought for the
rights of non-nuclear weapon states, would have found it very difficult to enter
into a special relationship with the US as rising India has done. Nevertheless,
four caveats are in order; and these present the story of the new-found Indo-US
cooperation in a different light.
First, even when faced with extreme pressures from the US after the Pokhran
II tests of 1998, India stood firm in its refusal to sign the NPT or formally accept
bilaterally or multilaterally agreed limits on the development or deployment
18
Raymond Cohen, Negotiating across cultures: international communication in an interdependent world, revised edn
(Washington DC: United States Institute of Peace, 2004), p. 47.
19
Strobe Talbott, Engaging India: diplomacy, democracy and the bomb (Washington DC: Brookings, 2004), p. 11.
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of its nuclear arsenal. Talbott sums up what was effectively a strict distributive
strategy on India’s part in the following terms: ‘By weathering the storm of US
­disapproval—by outlasting and outtalking the Americans in the marathon of
diplomacy spurred by the test, in short, by not compromising—the Indians would
prove their resolve and resilience, thereby giving a boost to their national selfesteem and self-confidence.’20
Second, the process of getting the deal approved in the Indian parliament was
a fraught one. Writing about the process in 2006, Stephen Cohen noted: ‘It seems
that opposition is stronger, and deeper, on the Indian side, even though New
Delhi has more to gain than the United States. It is curious that some elements of
India’s small but feisty strategic community cannot accept “yes” for an answer.’21
The deal was ultimately approved by the Indian parliament, but only after much
horse-trading and a no confidence vote that the government survived with considerable difficulty (and a narrow majority: 275 in favour, 256 against). Politicians of
different political persuasions found common ground in their suspicion of the
US (and the West more generally) and their opposition to the deal, and carried a
substantial body of popular opinion with them.
Third, it could be argued that India’s signing up to the bilateral deal with the
US was not a sign of an improving tendency towards conciliatory diplomacy at
all, nor an example of India’s willingness to assume greater international responsibility and leadership. India’s successful attempts at agenda-setting, which have
resulted in the creation of a host of India-specific exceptions, waivers and anomalies, are in fact quite disruptive to the regime. I will return to this point below.
Finally, no matter how enthusiastically India and the US declare each other to
be ‘natural allies’ or ‘strategic partners’, the bilateral deal is not an alliance. Nor
is it seen within India as an initial step towards building an alliance with the US
or other established powers. A rising India may be less free with the moralizing
language of non-alignment than it was during the Cold War era; but its actions
suggest little evidence of bandwagoning with the established powers.
India and other rising powers
The rhetoric of cooperation among the four original BRIC countries, with the
more recent addition of South Africa, is strong. It is evidenced in the annual
summits of the BRICS, as well as the cooperative efforts of these countries in
other forums. For example, the BRICS came up with their first joint statement
at the WTO’s ministerial conference in Geneva in December 2011. The statement
went beyond (albeit not far beyond) the platitudinous and empty promise that
all the established and rising powers seem to make in various forums (including
the G20) as regards their completion of the Doha Round and fighting protectionism, and instead offered insights into the possible beginnings of the BRICS
20
Talbott,
21
Engaging India, p. 5.
Stephen Cohen, ‘A deal too far?’ (Washington DC: Brookings, Feb. 2006), www.brookings.edu/views/
papers/cohens/20060228.pdf, accessed 19 March 2013.
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vision of global order. For example, the BRICS used the statement to signal their
commitment to the pursuit of the ‘single undertaking’22 (in contrast to the plurilateral approaches that some developed countries, particularly the US, have been
floating), and stated:
We will remain fully engaged in negotiations with a view to concluding the single undertaking within the shortest possible timeframe. We emphasise that negotiations on any
component of the DDA [Doha Development Agenda] must be based on the mandates
multilaterally agreed since the launching of the Round in 2001 and on the delicate balance
of trade-offs achieved over the last 10 years, which are also reflected in the draft modalities
texts of December 2008.23
Another example of an attempt by the BRICS to offer innovative ideas is to be
found in the declaration of the fourth BRICS summit, which took place in Delhi
in March 2012. The declaration announced the creation of a working group of the
finance ministers of the BRICS countries to explore the ‘possibility of setting up
a new Development Bank for mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, to supplement the existing efforts of multilateral and regional
financial institutions for global growth and development’.24
Again, however, several caveats are in order. First, the cooperation among the
BRICS countries is somewhat artificial. Jim O’Neill—the inventor of the BRICs
acronym—has reiterated: ‘I never suggested that they should operate alone as
a political club, and other than highlighting the limitations of the current G7
etc., the purpose of such a club—especially now South Africa is included—is a
bit limited.’25 On the other hand, various cooperative combinations predate the
hype that has come to surround the BRICS. For instance, in 2003 Brazil, China
and India led the formation of the G20 coalition on agricultural negotiations at
the Cancún ministerial meeting of the WTO. This coalition, despite the fact that
it brings together strange bedfellows, is a serious one and survives to the present
day.26 In the same year, Brazil, South Africa and South Africa launched their
cooperative initiative through IBSA, which emphasized their shared democratic
credentials.27 The BASIC group (Brazil, South Africa, India and China) came
together in the climate change talks in Copenhagen in 2009. In fact, we can go
further back in certain institutions—for instance, the GATT—to find evidence of
22
The ‘single undertaking’ means that countries cannot pick and choose the agreements that they will sign on
to, and that the negotiations must take place as a package where ‘nothing is agreed until everything is agreed’.
23
WTO, ‘Ministerial declaration: BRICS trade ministers’, WT/MIN (11) 18, 16 Dec. 2011.
24
Delhi Declaration, fourth BRICS summit, 29 March 2012, http://mea.gov.in/bilateral-documents.htm?dtl/
19158/Fourth+BRICS+Summit++Delhi+Declaration, accessed 23 March 2013. The latest BRICS summit
reiterated this commitment, but fell short of launching the initiative or presenting details of structure and
functioning (including the contributions of capital by different countries). See Statement by BRICS Leaders
on the Establishment of the BRICS-Led Development Bank, Durban, South Africa, 27 March 2013, http://
www.brics.utoronto.ca/docs/130327-brics-bank.html, accessed 9 April 2013.
25
Jim O’Neill, ‘Some BRICs built but more needed’, Viewpoints, 27 Nov. 2011.
26
On the politics of the G20 coalition, see Amrita Narlikar and Pieter van Houten, ‘Know the enemy: the South
in trade negotiations’, in Amrita Narlikar, ed., Deadlocks in multilateral negotiations (Cambridge: Cambridge
University Press, 2010).
27
http://www.ibsa-trilateral.org/, accessed 19 March 2013.
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similar cooperative endeavours. Brazil and India, for example, were the leading
members of the coalition of the G10 in the Uruguay Round of trade negotiations.
One cannot but wonder, then, whether BRICS summitry represents old wine
in new bottles, especially as the emphasis that the BRICS continue to place on
development concerns is reminiscent of old Third Worldist coalitions that some
of these countries led at different points in the past.
Second, not all the BRICS are equally committed to each other; nor is this
commitment consistent across issue areas. Both Brazil and India have aspirations
to permanent membership of the UN Security Council, but also know that their
candidature has not received the support of Russia and China, which are already
members of the P5. Similarly, the BRICS have thus far been unable to coordinate
on headships of international organizations. The relationship between India and
China is undoubtedly the most difficult in the BRICS group, marked as it is by a
history of one major war and persistent border disputes. India also competes with
all the other BRICS in the scramble for resources in Africa.
What this cooperative–competitive interaction translates into is, in effect, a
mixed strategy for India that varies with its interlocutor. Interestingly, though,
overall the mix is perhaps closer to the distributive end of the spectrum, with
few examples of integrative bargaining that go beyond ‘cheap talk’. For example,
despite its long history of cooperation with Brazil in the GATT and the WTO,
the July 2008 Doha negotiations resulted in the use of strictly distributive strategies by India against Brazil when the latter supported concessions to accept the
deal that was on offer.
In terms of coalition behaviour, as already indicated, we do see a tendency on
the part of these countries to ally with each other, although the actual memberships of such coalitions vary according to issue area. Almost all such collective
initiatives have represented a form of balancing against the established powers. And
despite the variation in the composition of partnerships according to issue areas,
the appeal to development concerns and sometimes even the inclusion of other
developing countries suggest at least some remnants of a bloc-type mentality.
This is reflected strongly in certain areas, for instance trade and climate change,
where different permutations of the BRICS countries, as leaders of coalitions,
have advanced the cause of development and developing countries. Interestingly,
Brazil, China, India and South Africa not only espouse the cause of developing
countries, but are also vociferous in their assertions that they themselves belong
to this group.
India and smaller players
The story of India’s negotiating behaviour with smaller players, such as the least
developed countries (LDCs), shows some differences from its bargaining with the
established and rising powers, and also a fair degree of consistency over time.
Here, the use of integrative moves is higher, and there is greater willingness
to share the burdens of international responsibility. Hence for instance, India
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acquired a reputation of serving as ‘the voice of the voiceless’ in the WTO:28
a responsibility it exercised by leading coalitions involving some of the poorest
­developing countries, and supporting their demands even when they did not
directly benefit India or its middle-income allies. It could be argued that such
leadership was driven by India’s need to secure access to small-group consultations in the WTO via the route of representation. Interestingly, though, India has
continued to play this role, emphasizing the concerns of the LDCs in many of its
joint and individual statements, ensuring their demands are included in coalition
agendas, sharing research and reporting back to these countries after small-group
consultations in which India (and Brazil and China) are included but from which
smaller countries are excluded. It has continued to do this, moreover, well after
its place at the high table of international trade negotiations was firmly established
by dint of its sheer market size and potential.
India’s willingness to provide certain ‘club goods’ is most clearly illustrated in
its role in Africa.29 India’s trade and investment in Africa are not limited to the
resource- and energy-rich north and west of the continent but are also on the rise
in eastern Africa. It has granted preferential treatment to LDCs (33 of which are
in Africa, and 14 of these in East Africa). Indian officials are at pains to emphasize
the long-standing continuities in India’s African engagement, highlighting for
instance the Indian Technical and Economic Cooperation (ITEC) programme that
goes back to 1964. They are also keen to avoid comparisons with China: one Indian
official stated that ‘while we also have energy considerations etc., our model is
different. The Indian way is the softer way.’30 Very importantly, Harry Broadman
writes of Chinese firms in Africa as ‘creating business entities that are vertically
integrated, buying supplies from China rather than local markets, and selling in
Africa mostly to government entities. They rarely facilitate the integration of their
workers into the African socioeconomic fabric.’ By contrast, he continues, Indian
firms in Africa ‘are less vertically integrated, prefer to procure supplies locally or
from international markets (rather than Indian suppliers), engage in far more sales
to private African entities, and encourage the local integration of their workers’.31
India’s continued initiative and leadership on behalf of smaller developing
countries is a close relative of its role in the Third World in the past. Speaking
particularly of India’s increased activism in Africa, and the extent to which this
represents a change in India’s policy, one interviewee stated to the author: ‘We
simply didn’t have enough resources to do this in the 1960s. Now we can.’32 The
strategy is predominantly integrative, typified by India’s willingness to make
concessions and allow free-riding, especially to the LDCs. Bloc-type coalitions
28
Narlikar,
29
‘Peculiar chauvinism or strategic calculation’.
Harry Broadman, Africa’s Silk Road: China and India’s new economic frontier (Washington DC: World Bank,
2007); Amrita Narlikar, ‘India’s rise to power: where does East Africa fit in?’, Review of African Political Economy
37: 126, 2010, pp. 141–56; Ian Taylor, ‘India’s rise in Africa’, International Affairs 88: 4, July 2012, pp. 779–98.
30
Cited in Narlikar, ‘India’s rise to power’.
31
Harry Broadman, ‘China and India go to Africa: new deals in the developing world’, Foreign Affairs 87: 2, 2008,
pp. 95–109.
32
Cited in Narlikar, ‘India’s rise to power’.
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involving India (and other rising powers) with LDCs and African economies
continue to thrive in issue areas such as international trade. Sometimes, involvement in such coalitions comes at the cost of India’s ability to make concessions
(for example, it cannot make concessions on an issue such as special and differential treatment, even if major gains are to be had elsewhere, for fear of losing its
LDC allies). And yet India willingly bears these costs. Even though India does
not explicitly rely on the language of Third Worldism to justify its engagement
with LDCs, a strong moralistic framing of global distributive justice permeates
the demands for ‘policy space’ and ‘development’. India may have a reputation
of ‘getting to no’ with the established powers, but it seems to be enthusiastic in
‘getting to yes’ as far as poorer and weaker countries are concerned.
India’s engagement with non-state actors
The argument that a rising India is a reformed (or at least reforming) India might
seem to suggest that India’s new-found pragmatism would extend to non-state
actors. Interestingly, however, the ‘ease of doing business’ index provides a
dramatic illustration of just how difficult a negotiating partner India is for multinational companies (MNCs) seeking to invest in the country. Jim O’Neill points
out that of the BRIC countries, India attracts the least foreign investment, in
part because of its ‘mystifying bureaucracy’. The retail sector offers one example
of the difficulties that foreign companies have encountered in securing access to
Indian markets. O’Neill writes: ‘If India were ever to allow Tesco or Walmart
into the country, it would undoubtedly improve productivity in retail and reduce
agricultural waste. But the politicians worry about the effect on Indian society, so
they revert to protectionism and block foreign companies.’33 The resulting Indian
negotiation strategy towards investors is largely distributive, not least because the
Best Alternative to Negotiated Agreement (BATNA), limited foreign investment,
enjoys popular support.34
India’s negotiations with external NGOs have perhaps been more successful. A
good example of successful engagement with civil society was the TRIPS (TradeRelated Aspects of Intellectual Property Rights) and public health coalition, of
which India was a part along with other developing countries. Effectively, India
has been successful in harnessing the support of NGOs for certain types of causes,
such as development. In these and other development-oriented efforts, it has been
assisted by certain domestic NGOs too, such as CUTS (Consumer Unity and Trust
Society). But it is important to bear in mind that such engagement with NGOs
is largely state-driven and strategic, rather than bottom-up or straightforwardly
oriented towards increasing inclusiveness and participation. As in several of its
33
O’Neill,
34
The growth map, p. 75.
India’s coalition government was finally able to secure a parliamentary vote in December 2012 to allow foreign
investment of up to 51% in the retail sector, but in the face of much public outcry and demonstrations, and
after at least two years in gridlock. It remains to be seen to what extent foreign investors will actually be able
to make use of this recent market opening, especially as it is still up to state governments to decide whether
they will implement the legislation or not.
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counterparts in Asia, the state in India remains a powerful gatekeeper, allowing
selective and strategic access to private actors.
India in international organizations and other mechanisms of global
governance
India’s behaviour in international organizations is especially interesting and
important, given that the country has a long history of activism in such institutional forums. In the days of the Cold War, India’s position was one of Third
Worldist solidarity and revisionism. Recall, for example, its role in UNCTAD in
advancing the call for a ‘new international economic order’, or indeed its role in
promoting the cause of development in the GATT. Today, although the Third
Worldist rhetoric is diminished, we still do not see India embracing international
regimes (old or new) as an upholder of the system.
The WTO is a particularly important case in point. In contrast to the IMF and
the World Bank, with their systems of weighted voting that are still a long way
from reflecting the changing balance of power, the WTO is a consensus-based
organization. The WTO has, moreover, modified its norms of participation to
ensure that the rising powers, India among them, are included at the heart of
the negotiations and of the organization via all small-group consensus-building
meetings. It is thus the one organization where we might expect to see greater
loyalty from India to accompany the country’s growing voice. Interestingly,
however, even in this ‘easy’ test case, we do not find much evidence of growing
socialization from India. In 2003, at the Cancún ministerial, India had the dubious
distinction of being dubbed one of the ‘can’t do’ countries; in 2008, Alan Beattie
of the Financial Times named India’s chief negotiator ‘Dr No’. India’s negotiation
strategy continues to be highly distributive even in a forum that is largely conducive to its participation and has served its interests well. Despite repeated calls
that India, along with other rising powers, take on greater responsibility in the
provision of the public good of free trade, India has continued to argue for special
considerations for developing countries.35
In the IMF, India’s position suggests even greater scepticism towards the regime
and reluctance to take on any new responsibilities (understandably so, given that
the IMF’s governance structure is considerably less B(R)IC-friendly than the
WTO’s). India’s response to European hopes that the BRIC countries might be
willing to contribute actively to recovery from the financial crisis and attempts
to increase IMF activity to this end has been decidedly lukewarm. Speaking at
the IMF’s International Monetary and Financial Committee in April 2012, India’s
finance minister at the time, Pranab Mukherjee, stated:
35
While India has undoubtedly contributed to the occurrence of deadlocks in the Doha Development Agenda
negotiations, it is far from being solely responsible for this. The EU, US and several other parties have been
just as much to blame as India for deadlock in certain stages of the negotiation. For an analysis of the various
causes of the deadlocks at different stages of the negotiation, see Amrita Narlikar, ed., Deadlocks in multilateral
negotiations: causes and solutions (Cambridge: Cambridge University Press, 2010).
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We feel that EU efforts should continue to play the primary role for its members as and
when the situation so demands. We feel that IMF assistance should only underpin the EU’s
efforts and play a catalytic role in order to provide confidence to investors … We would
also stress that any financial contributions made should be voluntary and not in any way
linked with future voice or governance reform.36
India’s agenda for reform of the IMF, moreover, remains strong. Hence, while
insisting on the voluntary nature of additional resources that countries (including
India) might give and delinking these contributions from quota revisions, it has
joined the BRICS group in insisting on the understanding that its new contributions (e.g. India’s contribution of US$10 billion in June 2012) ‘are being made in
anticipation that all the reforms agreed upon in 2010 will be fully implemented in
a timely manner, including a comprehensive reform of voting power and reform
of quota shares’.37 India, moreover, is involved in the BRICS initiative to cultivate
new BATNAs—a classic distributive tactic—to the existing regime. The Delhi
Declaration of March 2012 discusses the possibility not only of a development
bank (a potential, if still far from concrete, challenge to other multilateral lending
institutions) but also of other mechanisms, such as an agreement for extending
credit facilities in local currencies under the BRICS Interbank Cooperation
Mechanism (which, in effect, could result in a decreasing reliance of the BRICS
on the dollar).
A similar pattern in India’s behaviour can be seen in other multilateral institutions. Xenia Dormandy, for instance, observes: ‘Aside from its role in the tsunami
response group and in UN peacekeeping operations, the government has been less
than enthusiastic about burden-sharing mechanisms … Leading pundits in India
agree, expressing no great need for India to take on wider responsibilities, considering the costs they involve and the possibility of being perceived as a US pawn.’38
The one regime in respect of which India’s negotiation behaviour might be seen
to represent an exception to the norm is that of nuclear non-proliferation. With
its impeccable record of non-proliferation to other states, India emerges here as
a regime upholder, in contrast to some of the other officially recognized nuclear
weapon states (NWS). Further, as Indian officials have repeatedly argued, India
did not violate any of its international obligations by conducting the 1998 tests
because it was never a signatory to the NPT. It also chose to bind its own hands
voluntarily, for instance via a no first use commitment. One could thus use this
argument to suggest that India takes its international responsibilities seriously in
the regime, and further that its willingness to accept constraints (such as inspection
of its civilian facilities) under the 123 Agreement suggests increasingly integrative
behaviour. But an alternative interpretation is at least as plausible. To agree to
voluntary no first use after having conducted nuclear tests, which violate at least
36
Statement by Pranab Mukherjee, Minister of Finance for India, on behalf of Bangladesh, Bhutan, India and
Sri Lanka, International Monetary Fund, International Financial and Monetary Committee, 21 April 2012,
www.imf.org/External/spring/2012/imfc/statement/eng/ind.pdf, accessed 19 March 2013.
37
‘Media note on the informal meeting of the BRICS leaders ahead of G20 summit in Los Cabos’, 18 June 2012,
http://www.brics.utoronto.ca/docs/120618-loscabos-note.html, accessed 19 March 2013.
38
Dormandy, ‘Is India, or will it be, a responsible stakeholder?’, p. 126.
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the spirit of the regime if not the letter, suggests a low threshold for responsibility. In fact, it could be argued that India’s agenda-setting efforts have actually
been quite disruptive to the regime: the exceptions created specifically for India,
which accord it the status and recognition of a de facto NWS, effectively blur the
distinction between the NWS and non-NWS that is fundamental to the regime.
India may have signed the deal with the US, but it remains to be seen exactly how
the distinction between civilian and military facilities, for inspection purposes,
will play out. The deal, as already mentioned earlier, is far from a full-blown
alliance, and carefully circumscribed commitments on inspections and technology
purchases may be a very small price to pay for the overwhelming gain of India’s
having acquired the legitimacy of a NWS without signing up to the NPT. In
terms of coalition patterns and negotiation strategies, then, nothing fundamental
has changed for India in the non-proliferation regime either.
Responsible to whom then, and why?
The previous section suggests that there are important continuities between
the post-independence India and the rising India in terms of all three variables
(strategy, coalitions and framing). India’s dominant strategy does still seem to be
distributive; its coalition pattern still reveals a reluctance to bandwagon and even
some continuity with bloc-type coalitions; and its moralistic style of framing its
negotiating positions has not disappeared, though it may at times be somewhat
tempered by a more pragmatic discourse. These dominant negotiating trends have
deep cultural roots, but they are undoubtedly reinforced by some of the bottlenecks in India’s development status and pattern. One illustration of this follows,
and is useful because it captures the dominant trend on all three variables.
In the July 2008 WTO talks, mentioned above, India bore a great deal of the
blame for causing the deadlock. The immediate issue over which that deadlock
occurred was agriculture, with India leading the charge of developing countries
that sought greater flexibilities via the special safeguard mechanism and also
demanded a lowering of agricultural subsidies by the United States. Kamal Nath,
India’s Minister for Commerce, justified his country’s refusal to make concessions
on agriculture in the following terms:
For us, agriculture involves the livelihoods of the poorest farmers who number in the
hundreds of millions. We cannot have a development Round without an outcome which
provides full comfort to livelihood and food security concerns in developing countries
… The poor of the world will not forgive us if we compromise on these concerns. These
concerns are too vital to be the subject of trade-offs.39
And indeed, India’s refusal to make any trade-offs involving agriculture contributed significantly to the July 2008 deadlock. While certain characteristics of
India’s negotiating culture constituted an important influence on its adopting this
position, just as important were domestic concerns with development. Agricul39
Statement of Shri Kamal Nath, Indian Minister of Commerce and Industry, at WTO TNC meeting, 23 July
2008, http://www.wto.org/english/tratop_e/dda_e/meet08_stat_ind_21jul_e.doc, accessed 19 March 2013.
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ture is not India’s most productive sector, and its contribution to GDP has declined
from 18.1 per cent in 2006/2007 to 16.6 per cent in 2009/2010. By tying its own
hands in this low-productivity sector, the Indian government could have taken
on vital reform in this area. But it was extremely reluctant to do so, given the
large proportion of its population employed in this sector (until as recently as
2010/2011, 52 per cent of India’s total workforce was employed in agriculture).40
India’s relatively weak manufacturing sector, along with low levels of literacy,
high levels of corruption and inadequate welfare mechanisms, are all deterrents
to facilitating a smooth transition for the millions of small farmers whose lives
would indeed be jeopardized were India to face a sudden surge in imports. Add
to these issues the Indian government’s commitment to food security and price
stability, and India’s adoption of a strict distributive strategy on agricultural trade
liberalization becomes more understandable. So also do other distributive moves,
including the willingness to accept only voluntary constraints, rather than binding
commitments, on emissions to mitigate climate change.
A similar story can be told about India’s continued commitment to coalitions
that show balancing behaviour and an affinity for blocs, rather than bandwagoning and pragmatic issue-based alliances, and also in the framing of its demands.
While India, in aggregate, has flourished under the opportunities offered to it by
globalization, poor distributive mechanisms within the country have resulted in
increasing inequality.41 India may be among the fastest-growing economies of
the past decade, but across multiple indicators it remains a developing country.
Like-mindedness with the West in terms of democracy and language may, at a
later stage, acquire greater prominence in the national discourse. But when the
livelihoods of so many of its people are still precarious (25 per cent of the population live below the poverty line), it is not surprising that India has continued with
the old habit of throwing in its lot with other developing countries. A persistent
wariness of joining bandwagons—whether through formal alliances or informal
ententes—is consistent with this pattern.
These development constraints also affect India’s choice of framing strategies. We certainly see some greater pragmatism: for instance, even in the area
of trade, where India’s leadership of coalitions of developing countries is strong,
the language is not of the new international economic order but focuses on fairly
specific issues (e.g. in the G33 on the special safeguard mechanism in agriculture).
But it would be premature to suggest that a language of pragmatism has replaced
the language of morality, fairness and ethics. Once again, turning to Minister
Kamal Nath in July 2008, we find a useful and dramatic example that is at least
partly reminiscent of India post-independence and indeed as a leader of the G77
in UNCTAD:
40
Trade Policy Review, India,
41
WT/TPR/S/249, 2011.
See e.g. Dipak Mazumdar, ‘Decreasing poverty and increasing inequality in India’, in Tackling inequality in Brazil,
China, India and South Africa: the role of labour market and social policies (Paris: OECD, 2010), http://www.oecdilibrary.org/social-issues-migration-health/tackling-inequalities-in-brazil-china-india-and-south-africa-2010/
decreasing-poverty-and-increasing-inequality-in-india_9789264088368-6-en, accessed 19 March 2013.
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All manner of objections are being raised to our right to safeguard livelihood concerns of
hundreds of millions. Are we expected to stand by, see a surge in imports and do nothing? Do
we give developed countries the unfettered right to continue subsidizing and then dumping
those subsidies on us jeopardizing lives of billions? The position of developed counties [sic]
is utterly self-righteous: they have enjoyed their SSG [(current) special safeguard] (and want
to continue it) but our SSM [special safeguard mechanism] must be subject to all sorts of
shackles and restraints. This self-righteousness will not do. If it means no deal, so be it.42
Powerful domestic pressures are thus at work, and they could perhaps dictate
India’s reliance on distributive negotiation strategies, balancing coalitions and
moralistic framing. Were this the case, India would be unlikely to assume international responsibilities until and unless these domestic concerns changed. But,
as I have argued above, this is not the case. India’s negotiating behaviour varies,
depending on whom it is bargaining with. This in turn suggests that India is
perhaps not reluctant to be a responsible power per se, but that it sees itself as
owing its responsibility to different constituencies.
In accordance with the analysis presented above, the distributive negotiation
strategy remains the dominant one in its bargaining with the established powers.
The dominance of the state—at least partly a function of post-colonial statebuilding—translates into a distributive approach to dealing with MNCs and
NGOs. Even in international organizations that have proved responsive to India’s
rise and have modified their decision-making processes accordingly, integrative
moves are surprisingly few. India shows a greater willingness to adopt a mixed
distributive strategy with other rising powers and an integrative strategy with
smaller powers.
India’s coalition alignments and framing tactics map out quite closely and
con­­­­sistently with its negotiation strategy. A tendency to balance against established powers is accompanied by the creation and strengthening of coalitions with
other developing countries, both rising powers and smaller developing countries,
including LDCs. The coalitions it leads are ‘issue-based’ in that we see a variation
across different regimes (in contrast, for instance, to the Non-Aligned Movement
or G77), with, for example, the BASIC coalition on climate change, or the G20
and the G33 in the WTO. Interestingly, these coalitions usually comprise developing countries (rather than a mix of developed and developing) and show the
greater ideational coherence and longevity that usually characterize bloc-type
coalitions rather than issue-based ones.
We see some change in framing tactics on different fronts, including coalition
rationalization. In trade negotiations, for example, Indian negotiators seldom
offer ideational loyalty or Third Worldism as a motivating force, and instead
justify their positions in the language of shared interests. But even here, pragmatism is not the only justification. For example, when explaining and elaborating
on India’s Africa policy, Indian negotiators have readily used phrases like ‘the
principle of co-development’, ‘partnership’, ‘South–South cooperation’ and
42
Statement of Shri Kamal Nath at WTO TNC meeting, 23 July 2008. Note particularly that the objection
suggests a replay of a North–South dimension to the debate by referring to the ‘self-righteousness’ of the
‘developed countries’ rather than identifying specific and individual interests.
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‘common purpose’.43 When dealing with the established powers and international organizations (for instance in the WTO, when asked to make concessions
by the developed countries), the use of moralistic justification and appeal to ideas
of justice and fairness increase.
These variations offer us a useful insight into how a rising India approaches
the touchy question of international responsibility. In so far as responsibility
involves a willingness to share the burden of the provision of global public goods,
we see considerable reluctance, manifested in the persistent use of the distributive strategy as the dominant one, particularly towards the established powers,
private actors and international organizations. Hence also India’s reluctance to
make concessions in trade negotiations or accept binding commitments in climate
change negotiations—and indeed its persistent refusal to sign the NPT and other
treaties on nuclear non-proliferation. But we see a readiness to provide club goods
for smaller groups of countries, especially when they involve smaller developing
countries. We see this in its willingness to allow free-riding by smaller members
in coalitions and to promote their demands. This behaviour fits with that of postindependence India, but a rising India has a greater ability to do this effectively
alongside a well-established willingness to do so.
Whether rising India’s motivations for its willingness to assume club-level
responsibilities are different from those of post-independence India needs further
study. But one might anticipate a mix of the logics of ‘appropriateness’ and
‘consequences’ driving this behaviour. Considerations of appropriateness derive
at least partly from India’s own experiences in the first half-century of its independence, when it would take up causes (such as the new international economic
order) as a leader of the marginalized many. Considerations of consequences may
involve several factors. A willingness to use integrative strategies and build coalitions with other developing countries legitimizes India’s claims to a position of
importance in many international negotiations. To the extent that India’s rise still
poses a challenge to the established powers (and certain norms and rules that they
uphold), strengthening the hand of smaller allies makes more sense for India than
­bandwagoning with the developed world. Further, given the complexity and
seriousness of its domestic problems, it would be much harder for Indian negotiators to justify the country’s contributions to the provision of public goods (e.g. via
funds for resolving the European debt crisis and thereby facilitating international
financial stability) than similar contributions to club goods for smaller countries
(e.g. aid to LDCs, large proportions of whose populations are even worse off than
India’s poorest).
Policy recommendations
On the basis of the analysis set out above, how might India best be engaged with?
And are there any lessons to be learnt for Indian negotiators as they attempt to
fulfil the Great Power aspirations of their country?
43
Author’s interviews, New Delhi, Sept. 2008.
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Policy recommendations for India’s negotiation partners
The analysis conducted in this article reveals that India is a tougher negotiating
partner for some parties than for others. The established powers, private actors
and international organizations have thus far seen India play hardball; other rising
powers have seen a mix of behaviours; only the smaller players, such as the LDCs,
need to seek no major modification in India’s negotiating behaviour.
From the perspective of the established powers and private actors, and especially
international organizations, engagement so far has not resulted in a significant
change in India’s behaviour. Despite having secured de facto legitimacy as a
nuclear weapon state, it is still not a signatory to the NPT; despite the involvement of the US in facilitating its nuclear legitimacy, the Indo-US relationship
is nowhere near special enough to merit the status of an alliance; despite being
courted by MNCs and despite its own need for greater foreign direct investment,
Indian bureaucracy has not made it any easier for private actors to do business in
the country; despite having acquired a seat at the high table of WTO negotiations,
it remains reluctant to make the concessions necessary to ensure the provision of
the public good of free trade. In other words, bending over backwards to bring
India into the centre of international power politics has not yet transformed it into
a conformist, pro-West negotiating partner, and there is little reason to believe
that it will do so in the future. Two policy prescriptions result from this insight.
First, perhaps where the established powers, private actors and international
organizations have gone wrong is to assume that greater engagement produces
greater buy-in equally from all the rising powers. A more effective strategy might
be to frame seats at major negotiating tables in terms of a bargaining game. This
would apply not just to India but also to other rising powers. Market size would
be a necessary but not sufficient condition for gaining entry into the major governance forums or indeed attracting FDI or deepening bilateral relations. Rather,
states would have to signal their intentions and commitment to share the burden
of international responsibility through, for instance, signing up to major treaties
that underpin particular regimes or by accepting a greater share of the responsibilities than the majority of players would be expected to take on. Note that the
rising powers—perhaps predictably—have resisted any preliminary attempts to
link responsibility and reform (for instance in the IMF).
In those areas where such resistance is especially high and no compromise is
possible, a second strategy might help (not only in respect of India, but with the
other BRICS as well). This might be to push India to suggest alternative ways
in which responsibility might be conceptualized. This seems like a reasonable
proposal on the following grounds. India may have resisted taking on certain
international responsibilities because it does not buy into the values that those
responsibilities represent. To require it to accept values antithetical to its own in
order to acquire Great Power status would not violate the most basic standards of
international accountability. But instead of nay-saying, India could be encouraged to articulate more clearly which alternative public goods it might be willing
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to provide. Such a strategy would be useful not only for those who have borne
the brunt of India’s distributive bargaining stick, but also for other rising powers
negotiating with each other. Innovative solutions might result, with the rising
powers finding common ground on certain values. In so far as neither India nor
the other rising powers have fully identified their own visions of global order,
engagement along these lines at this stage would be especially important in facilitating the generation of ideas.
Policy recommendations for India negotiating as a rising power
There is much that India could do both to protect its own interests and to improve
its claims to Great Power status.
First, there is no escaping the fact that Indian negotiators find their hands tied,
albeit to varying degrees depending on the issue area and negotiating partner,
by domestic constraints. If it is to embrace its international responsibilities more
effectively, India must recognize that it owes considerable responsibility to its own
people. For example, it would be easier for India to take on more responsibilities in the WTO via agricultural liberalization if it were to improve literacy and
education levels, facilitate infrastructure investment, reform land and agricultural
subsidies, ensure growth in the manufacturing sector and reduce levels of corruption, all of which would provide the small subsistence farmers in India with viable
and more fruitful alternative ways of earning their livelihoods. A more developed
India with a more equitable growth pattern is likely to enjoy more ability to make
concessions and take on new responsibilities. But India does not need to wait for
the nirvana of development to negotiate effectively, as suggested by the policy
recommendations below.
The fact that rising India continues to provide certain club goods to other
developing countries, echoing the leadership shown by post-independence India,
deserves more scholarly and public attention. For Indian negotiators who are
accused of failing to take on responsibilities commensurate with India’s rising
power, a less defensive strategy than that currently followed would be to point
to the alternative types of responsibility that it has taken on historically and
continues to assume.44 But at some point, if India is to make the transition from
a rising power to a Great Power, it will have to go beyond its commitment to
44
For an example of India’s defensiveness on the issue of international responsibility, see Shyam Saran, ‘The
evolving role of emerging economies in global governance: an Indian perspective’, 7 June 2012, www.ficci.
com/EmergingEconomiesPaper-shyam-saran.pdf, accessed 23 March 2013. Saran writes: ‘The activism of
India or other emerging countries on certain regional and international issues may not always be aligned
with that of the Western countries. This does not make such activism irresponsible, just as lack of enthusiasm
for Western actions on certain issues, which India from its standpoint may consider injudicious, also cannot be
criticised as irresponsible conduct … The same argument can be made about the global financial and trading
systems, which have been put in place and are dominated by the industrialized economies of the West … If
the emerging countries have been able to achieve rapid growth in their economies, they have been able to do
so despite the constraints imposed on them by the global economic and financial systems rather than because
of them. The sub-text here is that since the existing regimes have enabled the emerging economies to develop,
they should acquiesce in the rules and regulations set by the Western countries rather than seek to modify or
alter them. This is not a valid assumption. There may be rules that emerging economies may find acceptable.
There may be others they may want to see modified so as to reflect their interests.’
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the provision of club goods and accept some responsibilities for the provision of
public goods.
The third strategy thus available to India would be to signal clearly which
public goods it would be willing to provide, moving beyond the discourse of
rejecting those proposed by others. As argued above, India has not yet fully developed these ideas (nor, indeed, have the other rising powers). Explicit internal
debates on this would be important steps towards identifying and articulating
India’s vision of global order, and then seeking agreement on this in cooperation
with other external players.
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