In FDI Move On China, Modi Again Underscores Economic Nationalism

BY itself Saturday's move of Modi government to route all Foreign Direct Investment (FDI) from neighbours sharing land border with India through a layer of bureaucracy on Raisina Hill does t change much for China. It can still pick up stakes in Indian corporations on stock exchanges or through hot money channel of Foreign Portfolio Investments (FPI). At least till Securities and Exchange Board of India (SEBI) comes up with fresh guidelines.

tweak, however, should be seen as part of a series of maneuvers of Prime Minister Narendra Modi to use ecomic nationalism in aide of his larger diplomatic and domestic policy objectives. India h recently raised tariff on Palm Oil imports from Malaysia, after South East Asian nation played truant and sought to attack Article-370 move in an open support of Pakistan. move sure hurt, for Malaysia did a quick about turn and things fell in place. Apart from a similar decision on Turkey, New Delhi also took an unusually tough position on Istanbul's forays into Syria.

Speaking at Motera stium in Ahmedab on February 24, United States President Donald Trump h called Modi a tough negotiator. You can imagine scale of compliment coming as it did from man who wrote 'Art Of Deal.' Earlier also Trump h taken a swipe at Modi's tre policies by calling India a tariff king. All that still did t stop Modi government from holding up even a limited tre deal till it ticked all boxes on India's concerns. American push on e-commerce that could be detrimental to small retailers in India has come to a naught. It is a measure of clarity that Amazon chief Jeff Bezos was declined an appointment by Prime Minister and his top team, including Finance and Commerce Ministers, despite impending Trump visit.

In vember 2019, India h decided to pull out of Regional Comprehensive Ecomic Partnership (RCEP) after more than a dece's negotiations, again taking a strong view of unhelpful provisions that almost gave a backdoor Free Tre Area (FTA) to China. fact that this came in immediate aftermath of Mahabalipuram Summit between Modi and Xi Jinping, it was strongest mess yet that Modi could look China in eye.

Wuhan spirit and Chennai connect twithstanding, dragon has t tangoed well with India on tre. Using its ecomic muscle and manufacturing prowess as a natural moat against a level playing field, China has me sure that all attempts to balance import bill have come to a naught. In summer of 2018, I met an Indian businessman outside Wanda Realm hotel - where Modi and Xi were summiting - complaining Chinese stonewalled imports of Indian rice using n-tariff, quasi-judicial measures. India has h to respond in kind. I have personally witnessed frustrations of Indian side at games Chinese mandarins have played in denying greater imports of Indian pharma and IT services for example. In bilateral and multilaterals from Beijing to Ahmedab, from Wuhan to Chennai, from Astana to Bishkek, from New Delhi to New York, it has been a struggle to get concessions that can be truly called a move forward on India-China tre.

collapse of markets around world provides a nation with deep pockets like China to do some bottom fishing and acquire strategic stakes. chief spreer of COVID pandemic, might end up as biggest ecomic beneficiary of crisis. For that very reason perhaps, India is t alone in building se protective walls in se uncertain COVID times. On March 17, Spain decided that all FDI would need prior government approval. Australia took an almost similar decision on March 27. And Germany and Italy followed on April 8 by bringing in legislative and executive amendments aimed at making ir respective FDI rules more stringent. By joining se nations, Modi government has ded to global alarm at possible predatory moves taking vant of situation. I wrote in my last piece on how as a Black Swan event, one of many impacts of COVID would be to fasten end of globalism as a philosophy. Well, we are alrey watching it pan out.