'THERE IS A FEELING THAT INDIA HAS ARRIVED’
Interview of External Affairs Minister Yashwant Sinha Sinha to Financial Express, 24 November 2003

Financial Express: You’ve spent enough time here in South Block to have acquired a view of the world and of the policy you need to pursue to improve India’s relations with it. Where do you see our relationships going? What are your priorities? Has the Iraq crisis been a defining moment for our foreign policy? How important is the IBSA trilateral process that you have initiated? May be we could invite you to start with a broad brush of the big picture.

External Affairs Minister: The first point we have to bear in mind is the continuity in our foreign policy. Foreign ministers change, governments change, but a special feature of our foreign policy has been its consensual nature, a national consensus. But foreign policy has also to adjust to a developing situation, its emphasis and nuances. In the 16 months I’ve been here the world has changed a great deal. There’ve been, as you say, defining moments. Iraq was a defining moment. We’ve responded to that situation and the global situation. In the meanwhile there have been efforts in the direction of more proactive economic diplomacy, as part of foreign policy. Not that it is something entirely new. Then, with our neighbours there’ve been some initiatives. With what can be called “distant lands”, like in the African continent and Latin America, we’ve been doing something.

The initiative with Brazil and South Africa?

Yes, if we look at it in totality the IBSA initiative is, I should think, a very important initiative. It has brought together three major countries of three different continents. It has clearly demonstrated in the brief period since it was created — in June this year when I signed the Brasilia Declaration — its impact. We’ve been able to put our act together.

At the WTO meeting in Cancun, for example?

In Cancun if this “core” had not been there probably others would not have coalesced into the G-20 as they did. The core is strong enough to hold together in the future. Further, trilaterally we are trying to intensify our relationship. The visit of the South African President, along with his foreign minister, the visit of the Brazilian foreign minister, the visit of the Brazilian president to South Africa, the visit of the Brazilian president in January to India, as chief guest at the Republic Day parade, all this and more will go to show that we’re now interacting much more with each other in various fields.

We are planning to set up a Trilateral Commission of the three foreign ministers, which is a very unusual body. It will meet next March in India. The foreign ministers have already met on the margins of the UN General Assembly. The three heads of government also met there. Before next March at least half a dozen ministers on the three sides will get together: ministers for defence, health, shipping, civil aviation, education, science and technology, planning.

So IBSA is cooperating at the multilateral, trilateral and bilateral levels. It has created a great deal of interest. Russia, China, the US, have all made enquiries. They want to know what is happening. We want to do something together before we deal together with the outside world. I regard this as a very important development in the 16 months that I’ve been foreign minister.

What about the other trilateral of China, India and Russia?

That’s also important. We had our meeting again in New York. The foreign minister of Russia invited us to meet separately so that it isn’t just a 1-2 hour meeting but we spend more time together. Now he’s planning a meeting in Russia. Here again we are co-ordinating our approach to global issues through a trilateral engagement. This isn’t aimed at anyone. For all three of us our relations with the US are important.

There has been a paradigm shift. India isn’t going out as a supplicant asking for investment.

We’re engaging many countries today to improve our relations. At the UN, while the media focussed on the spat with Pakistan, I had for the first time a political dialogue with the Gulf Cooperation Council. I had a meeting with the Rio group, which includes all of Latin America, and separate meetings with about 20 other foreign ministers.

I’m saying this because in all these meetings I saw there was a feeling that India has arrived. I am saying this very genuinely. I’ve been travelling quite a bit during this period, and there’s hardly been a day here when someone or the other is not visiting us. Whenever the PM is in town we have some head of state, some head of government here. If I’m in town there’s a visiting foreign minister, sometimes two. Yesterday (Friday) we had the Mauritius PM and we had former (US) President Clinton. So one ate lunch with one and dinner with the other! This is the intensity of the diplomatic activity.

The world is now recognising our economic strength: India’s strength in science and tech, in human resources and the potential of the future. This is a paradigm shift in the image of India. The other day Colette Mathur of WEF told me that the number of sponsors that they’ve got for the India Summit this year has increased — 15 or 16 compared to the 2 or 3 they used to get with great difficulty earlier. India has clearly acquired an international dimension. There’s much greater respect for India. I find when I’m talking to a foreign minister 60-70 per cent of my time is spent on discussing economic issues. 30-40 per cent may be terrorism, political issues, security issues. In fact I say jokingly, that as far as bilateral and multilateral relations of India are concerned I’m doing more economic work here than I was doing in the finance ministry (laughs).

What kind of...

....For example, we’re trying to give assistance to developing countries. With the developed countries we’re now talking with greater equality. It’s a two-way street. That if you transfer technology, make investment, we’re also in a position to transfer technology, make investments. We can go out to a country like Germany and tell them that your tax laws are regressive or this is not right for foreign investment. You will notice that there has been a paradigm shift. India isn’t going out as a supplicant asking for investment. We’re saying that we are also in a position to make a contribution. For instance, when the PM met (British PM) Tony Blair he said there are 350 to 400 Indo-British joint ventures. Economic diplomacy flowing out of this economic strength of India was inevitable. I wouldn’t like to take credit for all this. Economic diplomacy has assumed a new dimension not because I am here but because India has evolved, because of our economic performance and liberalisation that we’ve pursued over the past decade.

Has our decision on Iraq upset our relations with the US?

Not at all. There is an understanding, perhaps even an appreciation, at the highest level in the US of our position. This issue has been an important challenge for our foreign policy. Afghanistan and Iraq stand in some contrast to each other. The international community followed one model in Afghanistan and didn’t follow that in Iraq. Only now we’re talking in terms of the Afghan model for Iraq. Everyone is complimenting us for taking a very wise decision in not committing our troops.

Today even Japan and Korea are hesitating...

...True. But (remember) the debate was fierce in our country and people thought we were being foolish in not accepting the US offer. There were naturally quite a few voices for and against. I remember telling people that all that I have to do is to produce a copy of The Indian Express and The Financial Express on the one hand and The Hindu on the other hand, to show how the media itself was divided.

When I’m talking to a foreign minister 60-70 per cent of my time is spent on discussing economic issues. 30-40 per cent may be terrorism, political issues, security issues.

But there were compelling arguments both for and against?

Yes, but in retrospect our decision was wise because things would have been very different for us had we committed our troops. I don’t think we are missing an economic opportunity in Iraq for that reason. Our companies are there, our products are there, and whenever Iraq becomes more stable more companies will be there for business. We’ve been able to maintain excellent relations with the Iraqis. To be frank, when I met representatives of the present government, they said Indian troops would be welcome. But the point remains that there are elements there which are targeting installations which in the normal course would’ve been regarded as sacrosanct: the UN, the Red Cross. Therefore one doesn’t know whether our troops wouldn’t have been targeted. Not by the Iraqis, but by these elements. I’m happy that we continue to enjoy the goodwill of the Iraqi people. When the opportunities arise we will have our fair share. So we haven’t missed out...

...Will troops still be sent if there’s a UN cover or if there’s a request from the Iraqis?

I don’t think the Iraqi governing council responded to the offer of Turkish troops for Iraq. This is the other point of view that they feel they’re capable of managing the situation...

...Is it that or they didn’t want Turkish troops?

They didn’t want Turkish troops, they didn’t want neighbouring troops, but they’ve also gone on record that they don’t want foreign troops. So, the question that you’re asking is in the realm of the unlikely.

You said 70 per cent of your time is spent on economic diplomacy. Do Indian ambassadors spend that kind of time too? Is the ministry across the Raisina Hill (the ministry of finance)...and the commerce ministry involving MEA sufficiently? Is there an impulse within government in general and the Indian Foreign Service (IFS) in particular that they should be spending 70 per cent of their time in economic areas? Your ministry seems marginalised most of the time.

No, I don’t think so. I mentioned the inevitability, the compelling logic. That compelling logic applies to all wings of the government and all our missions abroad. Even if there is lack of interest there is pressure to act. There’s pressure from here, there’s pressure from the business constituency. If you have 95 businessmen travelling with the PM to Moscow it is the (Indian diplomatic) mission which looks after things.

I can say quite safely that Indian missions are far more oriented to doing economic work than perhaps was the case in the past. There’s much more coordination between the government: I mean commerce and external affairs are closely working together. It’s not merely SAPTA and SAFTA and SAARC. We now have the ASEAN framework agreement. The PM mentioned it one year ago. In twelve months flat we’ve been able to negotiate it at par with China and Japan who were miles ahead of us.

We have now the FTA framework agreement with Thailand. We have comprehensive economic cooperation agreements being negotiated with Singapore, with Sri Lanka. Now Mauritius. We’re in the process of appointing such a group with China. We have a framework agreement with Mercosur. We have signed a memorandum of understanding with the ANDEAN community, COMESA, SADEC (Southern African Development Community) . We are negotiating one with ECOAS (Economic Community of West African States), with SACU (Southern African Customs Union). There’s a Caricom delegation coming here led by the Jamaican foreign minister. We are going to sign an MoU with them. We are doing all this because every country is now part of some regional grouping or the other. and you need to establish some kind of institutional dialogue. The dialogue as we’ve noticed in the European Union (EU) will not remain purely economic. It will also become political.

So with the EU now when we have the summit (in end-November) we shall discuss political issues, we discuss economics also. That’s the case with all these bodies we are interacting with now.

India is in a position to commit resources. India can commit $200 million for The New Partnership for Africa’s Development (NEPAD) in Africa, apart from what we do bilaterally. India can give $100 million to Mauritius, another $100 million to Sri Lanka. We’ve committed $170 million in cash to Afghanistan. We’ve remitted loans. We’ve forgiven debts to some developing countries. This is being done because this is how the world expects India to behave. We go to them and say we are giving you $5 million and we won’t ask for it (back). They come to us (and say) can you consider this. They expect this from India and that’s what India is doing.

I went to Mauritius 3-4 months ago. They said we have this UN conference coming up. What can you do to help us with the convention centre? I said we’ll build it for you. And we are doing it. $12 million or whatever is going to be spent.

In recent days there’s been some attention given to our engagement with Central Asia... a very important strategic area. When I went to Tajikistan, Kyrgyzstan I was the first Indian foreign minister to visit these countries. Then I went to Uzbekistan. PM went to Tajikistan. Defence minister went. Our engagement with the Central Asian Republics is much more than ever. So, things are happening. Things are happening because India is regarded as a happening place. And therefore people are interested.

The picture you’ve painted, one of a multipolar world, the trilaterals, the special relationships...how important is the US? We were in a unipolar world a decade back. Much of our foreign policy was based on that....when your government first came into power, (there was) the Strobe Talbott-Jaswant Singh dialogue: the US was the central element of our foreign policy. So when we are moving....

(interjects)...Without, without detracting from the focus on the US. One is not at all, not in any way, at the cost of the other.

The Iraq decision (not to send troops) don’t you think...

(interjects): There is, there is understanding at the topmost level in the US for the Indian decision. I’m aware that with certain elements there’s some doubt or some misunderstanding. But we have interacted at the highest level and we have a feeling that there’s no misunderstanding. The Indian position is clearly understood. Not only understood, but even appreciated. The relationship has progressed extremely well. In no manner has our engagement with the rest of the world or our policy in Iraq impacted on our relationship. We’re interested in continuing to build on this and we feel there has been equal response.

Then our relationship with Russia has become much more dynamic than it was after the break up of the Soviet Union.

(With) China, there is a clear shift.

Would you define this as a clear shift after the PM went there?

Absolutely. After the visit there’s been a paradigm shift with China. So, none of the major powers have been...

...You haven’t mentioned Japan. The Japanese have a feeling that we’ve not engaged them seriously. But we also have a feeling that they’re not serious about India. You’ve had some experience in dealing with Japan even in your earlier stint as the FM.

I would tend to agree with you that the kind of interest that Japanese business should’ve taken in India hasn’t happened. The kind of response that we see elsewhere we haven’t noticed in the case of Japan. At the political level the Japanese foreign minister was here and we had a very good meeting. It was after nearly a decade or something that a Japanese foreign minister had come. I’ll make the other point. After the nuclear tests one country which took it most to heart was Japan. It took us much longer to engage Japan once again. But PM (Yoshiro) Mori came. Our PM travelled to Japan. Our foreign minister went to Japan. I haven’t been to Japan as finance minister or foreign minister, but I hope to respond soon...

...You went as FM in 1990.

Right. So, I hope to respond to their invitation. In the meanwhile, you know, Japan has had its own share of economic problems. Then they had elections. Things have (now) settled down. I think we’ll pick up the pieces once again. India doesn’t underestimate the importance of Japan either in Asia or worldwide. We’re aware that they have the capability to make large investments. We certainly want to achieve higher levels of political understanding with Japan. Things have changed. But I wouldn’t be able to confirm that we’ve reached the pinnacle of the relationship.

Economic diplomacy has assumed a new dimension not because I am here but because India has evolved.

Then there’s renewed interest in South Korea. Their foreign minister will be here in the third week of December. The Korean president had a meeting with the PM in Bali.

The other country is Australia. If I could shift from Japan to Canada and Australia, both had responded very adversely to the (nuclear) tests. But look at the comprehensive engagement we have now: the Canadian PM and the Canadian foreign minister coming here within a gap of 15 days from each other. Both went back extremely gung-ho. I went to Australia, I travelled to various cities. The PM made his personal plane available to me. So, there’s clearly a new swing in our relationship.

So, while we are continuing with the focus with respect to US, Russia, and many other countries, without detracting from the engagement we have expanded the engagement with other countries also.

What about Pakistan?

Like I said for the others, the compelling logic of an economic engagement is going to drive this as well. It’s inevitable. India and Pakistan cannot continue to stultify trade between them and continue to trade through Colombo, Singapore, Dubai or whatever. Direct trade will have to come. From meetings with Pakistani CEOs, the way the Pakistanis are participating in the (India International) Trade Fair, it appears that the realisation is dawning among the Pakistani business class. It may not have dawned upon the Pakistani rulers. The fear that India will overwhelm Pakistan has been misplaced. If China hasn’t been able to overwhelm Pakistan there’s no way India would be able to. I see economic engagement progressing further. We’d like it to happen in a bilateral framework. But at the moment it’s happening under the aegis of SAARC.

One criticism is that we’re not doing enough to promote trade within the region. We have tariff barriers. Then there are non-tariff barriers that, for example, Bangladesh has been complaining about. Do we need to do more?

We do. Our tariffs are still high. That’s why we are saying that we should have these preferential free trade arrangements (FTAs). Sri Lanka is an example we quote. Trade has increased. Balance has narrowed in favour of Sri Lanka. These are the arguments we gave to Bangladesh and these are the arguments we used to persuade them to start negotiating an FTA. As for non-tariff barriers, I told Bangladesh that let’s put together everything. There are non-tariff barriers on both sides. I’ve also said that India is ready to enter into negotiations for a South Asian (Economic) Union. That’s much beyond trade in goods. It could include trade in services, investment, technology. It could include everything.

Do you have a timetable?

We’ll certainly say this in the SAARC summit. We could enter into a framework arrangement. The arrangement, as in the case of other countries, can establish a time frame. We’re not looking for symmetrical arrangement, We’ll be prepared to look at an asymmetrical arrangement where both in terms of time and the depth of the tariff cuts there could be asymmetry.

Would there be support for this within the government?

I won’t have spoken about it if there was no support.

Do you feel frustrated that economic initiatives that you might like to take you can’t take because of some elements in government or outside?

I don’t think there’s any difference in approach within the government. I can say that quite confidently. The only difficulty is that there are interests here within this country — which might be interests of an industry, which might be interests of an industrial house or one manufacturing unit — which say something big shouldn’t happen because their particular unit is going to be affected. This is unacceptable. You win some, you lose some. This is how you make progress. Our units will have to learn to adjust.

The Budget exercise has started. How far will this message from your ministry be drilled into the end result?

The finance ministry has been committed to lower tariffs since I was FM and even before. Repeatedly Manmohan Singh, (P) Chidambaram, Jaswant Singh, and I now...we’ve all talked of reducing the tariffs and bringing them down to ASEAN levels. That’s one movement or trend. The other trend is in respect to a particular country or a group of countries. There you have a separate PTA. We have a PTA with Afghanistan, for instance. We quickly negotiated it when I was in Kandahar. The fruit traders said India is our market and we must have a PTA. We talked to the commerce ministry. Negotiations were held. And in two rounds or so we were able to conclude negotiations.

So, this will have to be a two-track approach.

Can we wait till there’s consensus down to the last manufacturing unit about the inevitability of lower tariffs?

No. We’ll have to take into account their point of view. But ultimately we’ll take a view which is in national interest.

In terms of what all this has meant to your ministry: what are the organisational changes that have been required?

We have to ensure that the mindset of Indian diplomacy remains conducive. We need to provide, perhaps, better training so that they are sensitive to economic diplomacy from the very beginning. We’ll have to have better monitoring and supervision so that all this is implemented and cases of neglect are taken care of and wherever we feel there is a weak link we are able to tackle that weak link.

Don’t you find resistance?

No, by and large the IFS not only realise this they are fully in agreement with this.

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