Effective economic ‪#‎diplomacy‬

The new National Democratic Alliance (‪#‎NDA‬) government has stepped up the intensity of India's summit-level interactions with major powers, neighbouring countries and the non-resident Indian (NRI) diaspora since May 2014. Refreshingly, in addition to political and strategic ties, these external engagements have focused more overtly than in the past on raising trade and investment levels. Economic diplomacy has become a tired expression and any reference to it usually elicits a yawn. It has become de rigueur for governments to repeat too often to their diplomats that trade and investment along with technology transfer are crucial elements and even drivers of foreign policy. This article explores how India could use its relationships with the rest of the world to push employment-generating growth and acquire appropriate technology.

In today's world with instant low-cost written, pictorial and voice communications, publicly available information is adequate to quickly put together an accurate picture of political and strategic developments. In such an environment, traditional diplomatic despatches from embassies are often redundant. There could be exceptions during armed conflicts or if relationships are tense, but such situations are not the norm.

Diplomats are expected to further the economic interests of their home countries with the time freed up by not having to, for example, analyse host country political developments in excessive detail. Technological content constitutes an ever higher proportion of the value added in the total volume of traded goods or services. Hence, protection of intellectual property rights and availability of skilled human resources take higher priority than in the past. It follows that diplomats need to follow innovations in technology more closely.

Indian embassies in the larger countries have economic-commercial wings. These wings spend most of their time in engaging with our industry associations, such as Confederation of Indian Industry and Federation of Indian Chambers of Commerce and Industry, and with the visits of delegations from the ministry of commerce and industry or of finance. Annual work-programme targets are drawn up by our missions in consultation with the commerce ministry. These targets are more in the nature of the number of meetings, seminars, and trade and investment promotion exhibitions to be held annually. All this can be useful, but specifically targeted interaction with individual Indian and foreign companies is needed. For example, auto components is an important Indian export item and our commercial wing representatives need to be aware of what is happening in this sub-sector. This would not be possible without practical experience, which would happen only if government allows deputation between the government and the private sector more freely. There is no a priori reason to assume that if officers were to go on deputation, say, to Bharat Forge or Mahindra & Mahindra, they would on return to government push what benefits those companies to the detriment of public interest.

In India, the commerce ministry is responsible for trade and foreign direct investment. The ministry of external affairs is staffed by foreign-service officers and the commerce ministry by administrative-service officers. At the working level, there are often instances of lack of communication or inter-service rivalries to protect turf. This could be overcome in specific cases by better coordination at the ministerial level, but may not percolate downwards systemically. The Indian government uses Cabinet committees for resolving inter-ministerial differences. All things considered, for faster decision-making and better follow-up action, the external affairs and the commerce ministries need to be merged. Brazil and Australia, two G20 countries, have one minister who is responsible for both foreign affairs and trade. Their stated intention is to take advantage of the synergies between the functioning of their foreign offices and trade ministries. It is about time that India follows this Brazilian and Australian example.

Indian missions abroad are our official eyes and ears, and personnel who have opted to specialise in economic-commercial work should also report on significant technological trends. For instance, there is considerable speculation about what 3D printing has in store for the manufacturing sector. Currently, a 3D printer that costs about $1,500 can print out screw-drivers and hammers. It would be useful if our missions in developed countries were to interact with government agencies, engineering colleges and private sector firms on innovations in manufacturing.

Going back to the first half of the 1990s, after the breakdown of the Soviet Union, the United States and China were quick to offer highly trained Soviet scientists and engineers well-paid employment in their countries. Clearly, the compensation levels were much higher than what was available in the chaotic post-break-up Soviet Union. It was opportune for India with its long-standing relationships with Soviet-era defence and research establishments to have offered somewhat lower salaries than the United States and China yet attractive opportunities to ex-Soviet specialists. It seems we did think on these lines, but could not resolve what grade these experts would be equivalent to within our scientific establishments. It may be that a sense of insecurity among some of our senior scientist-engineers was the deal-breaker.

The Indian diaspora in developed countries includes highly trained scientists, engineers and management specialists. However, we tend to offer executive and advisory positions only to those who have distinguished themselves in the social sciences. We need to use our missions abroad to also identify those who have excelled in the physical sciences and technical disciplines, and are prepared to teach in India. Many of them have completed their child-rearing responsibilities once they are past 50 years of age and are receptive to spending a few months each year in India.

In select large missions, there are representatives from the Defence Research and Development Organisation and the department of atomic energy (the Indian Space Research Organisation tends to work more on its own) who are in touch with their counterparts. However, cutting-edge technology and applications are areas with which at least some of our foreign-service or administrative-service officers should be familiar. Going forward, for work involving transfer of technology or cyber security officers from technical streams in their university days could be identified early on in their careers. This should be easier than in the past since the proportion of those with a science or a technical background among those who join the civil services has increased sharply in recent years.

To sum up, promotion of foreign trade and investment, and facilitation of scientific-technological tie-ups cannot be left to the individual initiative of officers posted in our missions abroad. We need a systematic approach to the selection of officers and their training for corresponding responsibilities. This would make our diplomacy effective, and not just economic.