Modi slips up as domestic priorities delay important ASEAN deal

By Rajeev Sharma Source:Global Times Published: 2014-9-2 19:43:01

The India-ASEAN Free Trade Agreement (FTA) in services and investments was as ready as a bride for her wedding. But unfortunately the document could not be inked on August 26, as the designated Indian Minister of State for Commerce and Industry Nirmala Sitharaman could not travel to Myanmar. As a result, the signing of the agreement had to be canceled at the last minute.

This was one faux pas the new Indian government led by Prime Minister Narendra Modi could have done without.

The reason for the absence of the minister was that Modi directed her to remain in New Delhi for launch of his favorite public welfare project, the People's Money scheme which the prime minister had announced from the ramparts of the Red Fort during his maiden Independence Day speech on August 15.

Back then, the scheme was to be implemented by Sitharaman, who apart from being the minister of state for commerce and industry is also the junior minister in the crucial finance ministry.

As such, she had been flagged by the government as responsibilities for the project.

The opposition parties, particularly the Congress, have lampooned the Modi government for being a carbon copy of the previous Congress-led UPA government and implementing the UPA government's schemes under new names. Some, however, believe that this is a Modi original.

The victim of Modi's "India first, foreign policy later" strategy was that a crucial pact had to be delayed. The Modi government sent the wrong message to the international community, particularly to ASEAN with which India has an annual trade of about $80 billion.

Modi's decision of holding back Sitharaman at home and making her skip such an important international diplomatic event is all the more baffling, as his own External Affairs Minister Sushma Swaraj, who was in Nay Pyi Taw earlier this month, had stressed India's "Act East" policy.

The ASEAN-India FTA in services and investments would have spurred economic engagement between India and ASEAN, to which major international powers like the US, the EU, Japan, Russia, South Korea and Canada have been flocking.

The Indian government approved of the pact in December. Incidentally, India and ASEAN had signed another crucial pact on goods trade in August 2009 which had come into force in 2010.

The India-ASEAN agreement in services and investments is important, as its signing and eventual implementation will lead to much more free movement of Indian professionals in Southeast Asia. It will also give a signal that India is ready for serious negotiations on a Regional Comprehensive Economic Partnership, the proposed ambitious regional FTA comprising of ASEAN and its six FTA partners.

The delayed agreement will be signed later this year. But it has to be seen whether this pact is signed by November when Modi is scheduled to travel to Myanmar for attending the next ASEAN summit. The question here is about Modi's sense of diplomatic priorities. Ministerial meetings in multilateral groupings like ASEAN are like quarter-finals and semi-finals with the summit being the finals. Modi as captain of Team India should be playing the final in November in Myanmar, but he chose to skip the semi-final when he kept Sitharaman

This is surprisingly bad diplomacy from Modi, the man who took to foreign affairs like a duck to water and unleashed a never-before initiative from the minute he took over as the prime minster.

Hopefully it was just a slip through inexperience, rather than a signal that priorities will always lie at home.

The author is a New Delhi-based independent journalist and a strategic analyst. bhootnath004@yahoo.com. Follow him on Twitter at @Kishkindha

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