In 1997, when an Indian Prime Minister first addressed the world’s business elite at the World Economic Forum (WEF) in Davos, the country was still a fledgling globaliser. The thrust of H.D. Deve Gowda’s speech was to reassure investors about India’s commitment to liberalise its economy. With an economy that has grown more than six times since, Prime Minister Narendra Modi pitched a far more self-assured and confident India at the WEF on Tuesday. He welcomed investors. He also laid out an Indian point of view on what he identified as the three pressing challenges for the world — climate change, terrorism and protectionism.
While dealing with these problems demands concerted transnational efforts, there is a vacuum in the leadership on global issues, especially ever since Donald Trump interpreted the mandate that made him the US president as putting “America First”. Last year, Chinese President Xi Jinping laid out his country’s credentials to take on that mantle by championing free trade and stability. That speech, it seems, was not lost on the Indian Prime Minister. By asserting that “India is a harmonising force, which does not nurture any imperialist claims,” Modi could be said to be delivering a veiled message to China. However, India’s PM was not just projecting India’s ambition or claim. On climate change, for example, India has come a long way from being a naysayer at global conclaves to being a key player in several international initiatives to check GHG emissions. It has taken the lead to forge the 121-nation International Solar Alliance — a point emphasised in Modi’s speech — even while the US under Trump has reneged on the Paris Climate Pact.
It is significant that Modi spoke of India as defender of an open global order barely a day after the Trump administration approved a slew of protectionist measures, including tariffs on imported solar-energy components. On the free trade front, however, the Modi government’s own record has been mixed. About ten days before Davos, it approved 100 per cent foreign direct investment (FDI) via the direct route in retail and construction, amending a policy that allowed foreign players a 49 per cent stake. However, in December last year, the government raised import tariffs on mobile phones and several other electronic items. India’s ranking in the Global Ease of Doing Business Index improved 30 places last year. But at 100, the country still brings up the bottom half of this ranking of 190 nations. India today attracts more than 20 times the FDI compared to what it did when Gowda spoke at Davos. But at 43.5 billion dollars in 2016-2017, India’s FDI inflows were a third of what China attracted in the same year. PM Modi has done well to position a confident India at Davos, but his government should keep these shortcomings in mind while framing future policies.