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New highways to economic growth

08 September 2014
The Hindu

While economic diplomacy in India has been going on for two decades, Narendra Modi’s test is to ensure that the number of States that reach out to the outside world increases, and that sub-regional linkages within South Asia get strengthened through political will

Prime Minister Narendra Modi made two crucial points in the context of India’s foreign policy on August 15, during his Independence day address, and August 16, during the inauguration of two important infrastructural projects in Maharashtra.

On Independence Day, Mr. Modi spoke about the need for the South Asian Association for Regional Cooperation (SAARC) countries to fight poverty together, rather than being engaged in meaningless conflict. The next day, speaking after the function to lay the foundation stone of the Jawaharlal Nehru Port Trust special economic zone at Nhava Sheva, he highlighted the need for State governments to become more active in exports and Foreign Direct Investment (FDI). “We at the Centre have to team up with the State governments for export promotion and the States should also work hard individually to help drive exports.” The Prime Minister also made the point that States should have their own export promotion councils and be more proactive in attracting foreign investment.

Early initiatives

Mr. Modi’s statement on August 16 does not come as a surprise as when Chief Minister of Gujarat, he took the lead in reaching out to the outside world, especially to countries in Asia, like China, Japan and Singapore. During his Chief Ministership, not only did he visit these countries, but also began the “Vibrant Gujarat Summit,” an annual event to showcase Gujarat’s achievements. Diplomats from a large number of countries attended this event, which began in 2003. During the election campaign in 2014, as well, he made some interesting suggestions with regard to foreign policy. He spoke about the possibility of having representatives of State governments in other countries for promotion of trade and commercial relations, a practice followed by many countries, including the United States. A number of U.S. states have trade offices located in different parts of the world. Seventeen states have trade offices in China. In addition to this, sister city programmes have been used effectively by the U.S. ever since the programme was introduced in the 1950s.