Best of BS Opinion: India must push through multiple headwinds

India faces multiple challenges in many areas, and how it faces them will frame the future for its citizens.

Hello, and welcome to BS Views, our daily wrap of the Business Standard opinion page. Today's edits and columns offer a path forward for India in multiple areas - military, diplomacy, trade, and climate change. How it deals with each of them will frame the future for its citizens. Read on. 

 

On Saturday, India and Pakistan reached an understanding to stop military action against each other after almost four days of an intense stand-off. While the situation is expected to stabilize, India cannot afford to let its guard down, notes our first editorial. India's fight against terror will continue, give Pakistan is unlikely to give up supporting terrorism. Also, India will face challenges as long as the Pakistan military calls the shots instead of Islamabad. However, India has economic ambitions, and terrorism and the fear of military conflict affect the business environment, so it needs to be ready at all times to foil terror attacks and respond swiftly.

 

India's new draft 'Climate Finance Taxonomy', launched with the aim of directing capital flows toward sustainable and climate-aligned activities, is a much-needed framework during these critical times, says our second editorial. India is already feeling the financial strain of climate adaptation, given that developing countries are left to bear most of the cost on their own. This is where the green taxonomy framework will help in attracting alternative funding, while making sure all stakeholders adopt ESG safeguards. However, India must also put in place robust disclosure mechanisms to prevent so-called greenwashing, or false marketing of investment as being environmentally friendly. 

 

Ajay Shah and Susan Thomas argue that how government procurement of goods and services is conducted should be a central concern of public finance, instead of being used as a tool for political patronage, pursuing industrial policy, or for protectionism. They say that protectionism in the form of blocking foreign companies weakens competition and hurts the Indian citizen. The principles guiding public procurement, they say, should be the same that we use at home: frugality and thoughtfulness in a tough, transparent, and competitive market. However, there are nascent signs of a rebalancing in the many bilateral agreements, signaling a recognition that greater competition can be beneficial. But this needs to be complemented by systemic reforms of India's domestic procurement, along with some other steps. 

 

Globalisation, which really took off in the Nineties, has always been a game of finding the bottom, writes Sunita Narain. As pollution levels in industrialised nations grew, they simply dumped their production, and pollution, on poorer ones. In this free-market world, she says, the cost of labour and environment is discounted to stay competitive, but it has everyone hooked to its benefits despite the blows to climate change. The bubble burst when Brexit happened, showing the whole global trade machinery is about jobs. Now, with Trump's protectionist rhetoric, disengagement will come at huge costs. How a new system is designed will determine the nature of future global trade. 

 

In our book review section today, Jennifer Szalai delves into 'EMPTY VESSEL: The Story of the Global Economy in One Barge' by Ian Kumekawa, an enlightening book about a most drab object - the shipping barge, which the book's author describes as “a dumb pontoon without voice, personality or drive". And yet, this metal box is often what girds global trade. Kumekawa, a historian at Harvard, highlights its many uses - as a “floatel” for oil rig workers, a barracks for British soldiers, even a jail for New York City inmates - but also uses its unglamorous beginnings to trace the journey of globalization and to give it a visceral identity.