Around the world in 9 days: Did PM Narendra Modi betray a lack of strategic focus in his latest trip?

By Srinath Raghavan

Prime Ministers do not often describe their own visits abroad as ‘historic’. Such hyperbole is usually left to reporters and commentators. However, Narendra Modi was not wholly off-beam in his remarks in Canada. After all, his was the first bilateral prime ministerial visit to Canada in over four decades. But Modi went on to claim that “the importance of a visit is not measured by length but by objectives”. In fact, it should be measured neither by length nor by objectives, but by outcomes. By this standard, it is too soon to say whether the visit was historic or not. That it was significant is undeniable.

The prime minister’s trip to France, Germany and Canada yet again underscored the extent to which his foreign policy is yoked to his domestic policies. After almost a year in office, the government has made little headway in tackling the most pressing economic challenge: the revival of investment. To his credit, though, Modi recognises the problem and has oriented his foreign policy to help address this challenge. Hence, his hectic international travels, his continuous proclamation abroad that India is ready for business, and his efforts to woo Indian communities overseas.

The messaging during the visits was clear, consistent and focused. Modi candidly stated that his engagement with leaders of the US and Russia, China and Japan were driven by his economic plans, especially ‘Make in India’. These themes were also stressed in his meetings with business leaders and financial investors. The enthusiasm that he evoked in his interlocutors was evident.

Strategic issues did not, however, take a back seat in an economicallydriven foreign policy. In the wake of terrorist attacks in France, terrorism was naturally an area of common concern. More interesting was the decision to expand and intensify intelligence cooperation with Canada. The most important strategic outcome was, of course, the decision to purchase 36 Rafale jets in fly-away condition.

Yet this decision also shows that the Modi government lacks a sure strategic touch. The ministry of defence had erred in underestimating the life-cycle costs of the original Dassault bid for 126 aircraft. The French thereafter strung out the negotiations, insisting that they could not guarantee the planes produced by HAL in India. Instead of holding their feet to fire, the government caved in and decided to scrap the original request for proposal (RFP) and buy off the shelf.

This will have several negative consequences. There will be no technology transfer unless the government quickly concludes a followon agreement for the remaining planes. Defence minister Manohar Parrikar’s statements clearly suggest that the government has not thought through the next steps. Parrikar held out that possibility that the remainder may also be purchased from Dassault.

The benefits of going for Rafale jets despite the scrapping the RFP are unclear—not least because the price of even the 36 jets that are being purchased has not been negotiated. But if Rafale aircraft continue to be prohibitively expensive, the government may be forced to look elsewhere for the remainder. This would mean that in order to cater for the Indian Air Force’s immediate requirements, the government would be adding to its already complex inventory of fighter planes. Finally, the government has demonstrated unnecessary negotiating weakness—that too in a buyer’s market. New Delhi’s handling of the entire process may well come back to haunt it.

A similar lack of strategic focus can be discerned in the government’s approach to trade with the EU and Canada. In his discussions, the prime minister agreed to give a push for the early conclusion of free trade agreements with both the EU and Canada. These negotiations have been gridlocked over substantive differences, so a signal from the top was required. Yet the real challenge for India may lie in the Trans-Atlantic Trade and Investment Partnership (TTIP) currently being negotiated between the EU and the US, and the Trans-Pacific Partnership (TPP) involving several countries including Canada.

If concluded, these ambitious agreements will introduce a range of new standards and norms on the international trade agenda. This will have serious consequences for countries like India, which may well face a host of non-tariff barriers in the not-so-distant future. At the time of writing, the TTIP is being challenged by influential domestic lobbies in the EU, especially in Germany. The TPP, too, is facing significant hurdles. But the Barack Obama administration is determined to make a push for these agreements.

It is not clear, however, that New Delhi has registered the scale of the problem posed by the TTIP or TTP. Commerce minister Nirmala Sitharaman recently observed that the mega-trade deals being negotiated by the US were geographically defined and that India was engaged in similar regional talks of its own. This completely misses the strategic thrust of these initiatives.

Let’s not delude ourselves: the standards set in these regional agreements will soon be imported on to the multilateral trading agenda. Against this backdrop, the government’s approach to trade with the EU and Canada seems myopic. Unless New Delhi wakes up and smells the coffee soon, the prime minister’s dream of turning India into an export-driven manufacturing giant may remain just that: a dream.

The writer is Senior Fellow at Centre for Policy Research