Trading With Globe: The Only Path To Developed Nation Status

India celebrating its 75th year of independence is a momentous, joyous and introspective occasion. Many statesmen didn't give the nascent Indian nation-state the benefit of doubt to survive its overwhelming heterogeneity or build a democratic state structure on a highly unequal social structure. But we survived and thrived and now to prosper we need to take a hard look at the economic structures India has built or the ones that needed to be formed to acquire a greater share of Global trade. The Indian growth story needs to now surcharge its way past low per-capita income to a middle-income country and then hopefully a high-income nation having sustainable growth. This remains of utmost importance because the provision of meaningful lives to billions of people will only be fulfilled when we have a durable high economic growth whose fruits are then shared by state-led redistribution and social provisions.

For this, my suggestion will be that the Indian state must focus its full energy on tapping global trade networks. Trade since ages has played the most crucial factor for any empire or for a nation-state to establish its prowess. Although since the liberalisation in 1991, Indian inter-connectedness with the global trade networks has deepened, we still fall too short for the size of our economy. A positive trade balance with surplus exports will bring much-needed foreign capital to India. We continuously need a 100 billion dollar capital inflow for more than a decade to build our infrastructure and expand socio-economic operations to garner strength in the provision of equitable opportunities through quality education and health. Both physical and social infrastructures in our country are capital starved and hence a better trade strategy might solve some of our issues on this front. To build a favourable trade balance we need to sync ourselves with trade agreements that are well-oiled with global value chains. We have kept ourselves out of RCEP- a mega Asia-pacific trade pact that would have integrated India into some coveted regions with no trade barriers. Free flowing of our goods is a must for us to economically grow and then engineer this growth to streamline jobs domestically. India not only desires meaningful employment but also the capital earned through foreign exchanges and net exports. Capital earned then could be used to build infrastructures across the country at an unparalleled pace. Thus one cannot anyhow deny the importance of trade but then one is flabbergasted by India’s continuous hesitation in joining mega trade pacts.

RCEP was given a miss suggesting the overwhelming Chinese factor and their not-so-fair methods to practice trade. But then why did we not join the Indo-Pacific Economic Framework’s Trade Pillar? The IPEF is a strategic cocoon as much as an economic formulated one by the US to wean major economies in the region away from China and showcase better & transparent manners of a trade by the Four QUAD nations. Our persistence in finding excuses for not joining such initiatives leaves us in loss and forgone opportunities in a volatile post-covid war raging world. India’s way of securing individual FTAs is happening at a pace slower than turtles' and our failure to get any free-trade deals from the US and Europe highlights the flaw in proceeding on this bilateral engagement route. If Europe could have seen our interest through us joining IPEF we would have garnered some much-needed Capital from European reservoirs. Indian policymakers have to be bold and brave if a nation needs rapid economic growth- trade is the only panacea. China has already been very successful in its influence across regions due to its immensely competitive trading activities. China’s mammoth favourable balance of trade makes it very easy for diplomacy to convince the importance of a bilateral relationship with the Chinese. Hence India’s mantra to both increase our clout in global affairs and not be buoyed by a belligerent China is to substantively enhance our trade and be integrated with global multilateral free trade regimes. We can't afford to be isolated in the trading realm.