Abstract
India’s rise as a global economic powerhouse is a much discussed and debated issue, both in policy and academic arena. Since the early 1990s, India has emerged as a major economic power and today it is the world’s seventh-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP). It is poised to become a $ 5-trillion economy in the next 5 years and aspires to become a US$ 10-trillion economy in the next 8 years thereafter. India is the fastest-growing major economy in the world today. It has been a remarkable journey for a nation which was about to go bankrupt in 1990. But what is even more remarkable is how the political economy of India’s global economic rise has evolved. Most analyses of this have only given partial accounts of this journey.
Aseema Sinha, in her book Globalizing India: How Global Rules and Markets are Shaping India’s Rise to Power, analyses the effects of domestic and international politics ‘in jointly shaping’ economic reforms in India. According to her, global trade and international trade agreements have changed India’s domestic institutions. From being one of the most restrictive economies in the world, India has become a relatively open and integrated economy. While some barriers remain, the trade in goods as a percentage of GDP rose from 15.7 per cent in 1991 to 42 per cent in 2013. To view India’s changing place in the world of trade, the book lays stress on the interaction between domestic and international forces. It makes a strong case to treat these affairs separately or in a disconnected manner.
This book also recasts the conventional narrative about India’s global interaction. While traditionally, it has been suggested that internal growth unleashed in the 1980s and 1990s induced external integration, the author argues that such internal growth was necessary but not sufficient to explain India launching itself into the world economy. According to her, a nuanced account of transformation in India would appreciate the catalytic effect of global markets and trade rules and how they shape and change Indian preferences and interests. The author also notes that this interaction between India and global forces is reciprocal, dynamic and strategic.
Further, the author explores the commonly held view that global trade interdependence undermines the Westphalian sovereignty. According to her, while multilateral trade institutions like the World Trade Organisation alter the nature of domestic markets, such developments also help in building new state capacities. This argument is in consonance with the reregulation literature, which maintains that free markets require more rules and other non-market mechanisms. Moreover, the author delves into the new developmental state idea and highlights the significance of public–private models and thus greater interaction between private and state actors in shaping economic policy. In this regard, detailed attention has been given in the book to the development of the pharmaceutical, textile and garment sectors. According to the author, while in the earlier era, the state’s task was to protect its borders and autonomy, today an additional goal has come to the fore. Governments now compete economically in an open world for better deals and freer export markets, seeking global integration along with independent capacity building.
The author also focusses on the role of woodwork reformers (a borrowed concept from the women’s movement in the United States) in building consensus within the domestic political economy as far as greater global integration is concerned. In addition, the author acknowledges the role of four distinct movements, which unfolded with external integration. First, she talks about the creation of enhanced state capacity to negotiate trade deals and laws at the global level. Second, the discussion includes the disruptions caused to vested interests and coalitions. Third, it talks about the new winners and budding reformers emerging from the economy. This includes, revamped business associations and reorganised sectors. Finally, it includes the discussion on new losers who were unable to mobilise the polity, although being able to delay trade liberalisation to some extent.
Further, looking into the non-market mechanisms that build on the narrative of globalisation, the author talks about three such mechanisms. They include public information revealed by state and international organisations, learning abilities of states and firms to manage global challenges in an interdependent as well as a competitive context and lastly, economic threats that originate outside the national boundaries of the states. Together these three nudge the Indian capital to become global. The Global Design-in-Motion framework theorised in detail in Chapter 2 explains the causal mechanisms as India globalises. To construct a globally active agenda and strategy, developing tradecraft becomes important. In Chapter 3, the author focusses on statecraft and trade. This chapter highlights the role of Indian negotiators in tough arenas such as food security and Agreement on Agriculture. The entire analysis can be summed up in the following words, ‘a country may seek greater global interaction but on its own terms, using protectionist and liberal trade measures selectively and strategically’. Chapter 4 encounters the debate of international patent regimes and the availability, affordability and accessibility of medicine(s). While bypassing of pharmaceutical patents and producing generic versions made Indian firms profit, the threat of trade sanctions from the United States remained. India in this case has seen itself performing the balancing act between compliance with agreements like TRIPS and domestic policy autonomy.
Calling India a puzzling country, the theme that runs through the breadth of the book is to empirically understand about the transition from the insular protectionism of the1980s and 1990s of the Indian economy to the strategic use of liberal and protectionist measures, today. Three central points underscored by the author include sudden and dramatic changes made in the Indian economy with respect to globalisation post 1999, facilitation of deeper integration than expected between economic institutions and markets by the state, and lastly, while globalisation may have increased the power of business, the realisation exists that it needs to work with the state and not autonomously.
This is a compelling study which brings together an impressive array of evidence to examine the manner in which international rules and institutions not only shape the process of globalisation but also fundamentally alter the relationship between the Indian state and society. Empirically, this book provides interesting new insights into the rise of India as a new global economic actor. Theoretically, it advances the study of how global forces impact domestic politics and structures, a much neglected strand of the international relations. It is a must read for those who want to understand the political economy of India’s rise one of the most significant economic powers of our times.