Rupa Subramanya is a researcher and commentator.
On May 8, Indian Prime Minister Narendra Modi attended a virtual meeting with the leaders of the European Union which took place in Porto, Portugal.
Apart from the usual boilerplate, the main takeaway from the joint statement was a commitment “to strengthen our trade and investment relationship to realize its untapped potential”.
Specifically, the two sides agreed to resume negotiations on a bilateral trade agreement. Discussions on such an agreement took place between the EU and the former Indian government of Prime Minister Manmohan Singh and were suspended as early as 2013.
For the EU, resumption of trade talks with India follows controversy over ratification of an investment deal with China, which has come under criticism from rights groups from man and some EU governments, as well as strong opposition from the US administration of President Joe Biden. As Indian External Affairs Minister S. Jaishankar said in an interview with Politico, the EU is therefore taking a “cover bet” on India.
For India, which ended trade deals when the Modi government came to power in 2014, the resumption of talks with the EU marks a major policy shift. India is also said to be ready to start negotiations with the UK on a trade deal, and there are even suggestions that India could resume long-stalled trade talks with Canada.
All of this represents a radical change in New Delhi rhetoric. Before the current crippling second wave of the COVID-19 pandemic hit India with a ferocity that left the country completely unprepared to cope, Modi’s rhetoric had all revolved around Atmanirbhar Bharat, a Hindi term that roughly translates to “self-reliance.”
In practice, this has resulted in tariff increases for the first time since India liberalized its economy in 1991 and an attempt to emulate East Asian-style state capitalism merging big business and government. at the dominant peaks of the economy.
Modi’s bravado that India could go it alone has met its match with the second wave of COVID. Without admitting that the policy has failed, the rhetoric of Modi and his ministers now rarely mentions autonomy but invokes a Sanskrit term from Hindu scriptures, Vasudhaiva Kutumbakam, or “the world is one family”.
The implicit message is that India is interconnected with the rest of the world in a web of mutually beneficial interactions and not in a country reverting to self-sufficient autonomy.
The first major about-face demonstrating this change was the government’s decision to accept foreign aid to fight the pandemic, nearly twenty years after previous governments decided India no longer needed foreign aid. The aid consists of basic tools including oxygen, medicine and other essential medical supplies which are in short supply in India.
In the Politico interview, Jaishankar admitted that the decision to accept foreign aid was a tough sell, given the domestic policy perspective. Likewise, the resumption of trade negotiations is an implicit recognition that the goal of self-sufficiency has failed.
Modi himself had proudly highlighted the success of the Serum Institute of India (SII), the world’s largest vaccine manufacturer by volume. SII manufactured the Oxford-AstraZeneca vaccine in India under license, and some of these doses have been used by the Indian government as part of its vaccine diplomacy.
But with India now on its knees, exports have been suspended, prompting SII to repeal its contractual obligations. India will be forced to rely on vaccines imported or donated from abroad until the country’s manufacturing capacity increases in the medium to long term.
The SII has been viewed as a national champion and a pillar of autonomy by proponents of the doctrine. So when its CEO, Adar Poonawalla, decided to look to some operations in the UK, which includes a $ 300 million investment in research and development and maybe even vaccine manufacturing there, such developments are not exactly a resounding endorsement for doctrine. autonomy.
The SII saga is also a microcosm of the Modi government’s mismanagement of the business environment in India. Far from pushing SII to increase its manufacturing of COVID vaccines, the Indian government has capped what SII could charge for its vaccine doses, thereby limiting its expansion and most likely contributing to vaccine shortages in India at the present time, and most likely an impetus for SII’s attempt to partially relocate to the UK
So what about Modi’s much-vaunted autonomy? The bitter joke that goes around India is that it really refers to the fact that every Indian is now forced to be self-sufficient to cope with the second wave, including getting their own oxygen, given the abject failure of the government to prepare and manage. crisis.
If there is a glimmer of hope, it may be that Modi’s pride that India can go it alone in the world has been replaced by a realization that the future success or failure of India can go it alone. India depends on greater integration into a more, not less globalized, world economy. After all, if a country cannot ensure the health and safety of its citizens, what is the meaning of self-reliance?