Better co-ordination

US partnership needs a greater understanding of trade-offs

United States Trade Representative Katherine Tai is in India to meet senior Indian officials and restart the US-India Trade Policy Forum after the four-year interregnum during the Donald Trump-led administration. Ms Tai has arrived in India with a packed and clear agenda, much of which has emerged following months-long consultations in Washington with key stakeholders in the US business community, influential voices on Capitol Hill, and other branches of the current administration. This agenda will include India’s digital policies — including data localisation and taxation of US-based tech multinational companies — as well as other regulatory barriers, tariffs, and recent export promotion policies from the Indian government. Problems at the World Trade Organization will also be discussed, as well as the vexed inter-linkage between environmental factors and trading relations. As a carrot, Ms Tai is also likely to mention that India could be re-admitted to the Generalised System of Preferences scheme run by the US government, which would once again allow unhampered access to the lucrative US market for Indian exporters. This would be used especially for low-margin and labour-intensive sectors.

Unfortunately, Ms Tai’s Indian interlocutors are unlikely to be as prepared as she is. The fact is that, while the bilateral relationship has shown considerable progress in the past years, the economic agenda has always been a stumbling block. In other cases — for example, in the US-China or US-European Union relationship — there is a clear give and take across sectors. For example, a planned big-ticket purchase of, say, US-made aircraft could be balanced against some concessions on the trade policy side. If “strategic partnership” is to mean anything, it is precisely this — that individual sectoral wins and losses are gauged against a broader and longer-term picture. This would certainly help India win a few rounds on the trade side, and perhaps re-invigorate the economic relationship. But it would also require more effective and focused efforts from Indian officialdom.

For one, a whole-of-government approach has to be taken to trade by the Indian bureaucracy. The United States Trade Representative, or her counterparts from other major trading partners, meet various Indian ministers and officials; each of these should ideally be briefed on the entire set of outstanding issues and possible ways forward, not just on the specifics related to their ministry or portfolio. Their case to the foreign diplomats and negotiators should be grounded in feedback from other departments and updated input from relevant stakeholders in the corporate world and Parliament. Further, there should be ongoing co-ordination during the visit so that each high Indian official does not start discussing matters with Ms Tai with a blank slate, but builds on progress already made in previous meetings during the visit.

It is true that there are considerable capacity constraints on the Indian foreign policy and commerce bureaucracy. Yet that is no excuse for insufficient co-ordination during a high-level visit that has been planned for weeks in advance. The payoff for additional effort would be considerable in terms of discovering mechanisms to advance the relationship and to ensure that trade-offs are found in various domains that leave both sides satisfied. The imbalance between security and economic co-operation in this and other such bilateral relationships can be addressed only when Indian officialdom starts working more cohesively and closely internally.