Decoding Narendra Modi’s Foreign Policy: Assessing the First Year in Office; Projecting for the Years to Come
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SPS Brief (Authored by Amit Dasgupta)
The Society for Policy Studies (SPS) is an independent think tank focused on public policy, international relations and human development and their strategic, security, economic and social impact on India and the larger South Asian region. It helps foster dialogue among opinion leaders and provides a non-partisan forum to engage with critical issues, affecting India and South Asia. Authored by Amit Dasgupta, a former Indian diplomat, who presently heads the Mumbai campus of the SP Jain School of Global Management.
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Decoding Narendra Modi’s Foreign Policy - SPS Brief (Authored by Amit Dasgupta)
(SPS)
© Society for Policy Studies (SPS)
First published 2015
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Decoding Narendra Modi's Foreign Policy
Assessing the First Year in Office; Projecting for the Years to Come
Xiaomi, the world’s fifth largest smart phone maker, announced it intends to become ‘an Indian company’ and is looking to investing in India so as to establish a R&D centre and local manufacturing capabilities. The International Monetary Fund (IMF) and other international credit ratings agencies also see a resurgence of the Indian economy since Prime Minister Narendra Modi took over. The collapse in oil prices has also come as an unexpected bonanza for the government with consequent economic gains.
Everyone, however, does not share this positive sentiment. Many foreign investors, as well as sections of Indian business, are sceptical about Prime Minister Modi’s 'achievements' and say that the Modi government has, so far, ‘done nothing but talk’. Indian business and industry is also unhappy that no clear roadmap on economic reforms has been outlined and that the flip-flops on personal and corporate taxes and other issues are only sending confusing signals. In key ministries and public-sector undertakings, or PSUs, senior level posts continue to lie vacant and it is said that in key government offices and nodal ministries files are stacking up for lack of clearance.
While economists rarely agree with each other, there appears to be consensus that without tangible evidence of economic reforms, many of which will require tough political will, the Indian economy is not likely to surge to double digit growth. A huge mandate in the Lok Sabha, or the House of the People in the Indian Parliament, the government realizes, is not enough to get these decisions through. The opposition will stall, including those bills that it had itself mooted, such as the uniform goods and services tax (GST) bill, touted as the government’s single-biggest reform measure. On the land acquisition policy for industry, there continues to be serious and legitimate apprehensions among the public. Suicides by farmers and rural poverty further demonstrate the fragility of the agricultural sector.
Even Modi’s flagship ‘Make in India’ project is being viewed with scepticism by foreign investors as an oblique way of denying market access and continuing protection of domestic industry. Indeed, Indian business and industry has, for the past 60 years, cried foul at the very thought of international competition and lobbied for hanging on to the government’s apron strings. On ease of business, India continues to be an investor’s nightmare, despite the Prime Minister’s personal assurances and commitment that this would