Adjusting to the Indian political tsunami: Tim Groser discusses the possible implications of Narendra Modi's accession to power for trade negotiations, including the prospective India-New Zealand free trade agreement.

• Author: Groser, Tim
• Position: Report

The implications of the political tsunami in India that brought Narendra Modi to power in the second largest country in the world by population are profound. In the field of trade the question to be answered is: what implications will this have on historical Indian negotiating positions? Traditionally, India has adopted a highly conservative approach to trade negotiations. But that approach will not allow India to increase its connectivity to the global economy. The change of government in New Delhi will hopefully open the way for greater Indian participation in multilateral trade deals and for the prospective India-New Zealand free trade agreement.

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Around the world, friends of India, strategists, business groups and others are all starting to ask a rather important question. With the landslide victory of the BJP over Congress, we have seen a shift in the political tectonic plates. What implications will this have, if any, for India's approach to international economic negotiations? No doubt, even that is too confining; as minister of climate change issues I am also wondering about that matter in terms of the international climate change negotiations. But here I wear my trade hat.

No-one inside India should doubt this. In the last few months since the Indian election, I have had very private and informal discussions on exactly this topic with ministers and senior officials of some of the most important countries in the world. We are all in full listening mode. Depending on what answers we receive from New Delhi--and no-one is expecting clarity soon--New Zealand and countries far more important than us in international affairs will maintain or re-calibrate their own agendas and negotiating positions.

It is hardly surprising that this strategic question is central to many people's thinking. India is the second largest country in the world by population. What happens in India affects everyone - not just the around 1.2 billion people who live there. And across the vast Indian diaspora, including here in New Zealand where there is a vibrant community of New Zealanders of Indian ethnic heritage, this will be more important still.

On a personal note, I have enjoyed extremely close professional links with many Indian senior officials over many years - people like K.M. Chandrasekhar, former Cabinet secretary, past Indian World Trade Organisation ambassadors, a variety of other senior Indian negotiators--not to mention a warm relationship with former Commerce Minister Kamal Nath and his successor, Anand Sharma. I am obviously hoping to develop an equally good relationship with the new BJP ministers.

The central question, of course, is how is Prime Minister Modi's government going to interpret India's real long-term interests? Second, what implications might this have for historical Indian negotiating positions? I will come back to this.

Political tsunami

The election was a political tsunami. The tech-savvy young Indian professionals of the BJP who used the full power of the social media--including the famous hologram--to power Narendra Modi into office perhaps sensed what was possible in terms of the magnitude of the victoiy and the corresponding loss of the Congress Party. But no-one else did. For the first time in 30 years, the prime minister's party has a majority in Parliament's lower house.

It is not my purpose to explain why--this has been done by numerous political commentators far better informed than me about Indian politics. Nor will I comment on the obvious problems the new prime minister faces. Most of them are finally rooted in the vast diversity of the country and the massive gaps between millions in rural villages without electricity and the brilliant young Indian professionals who used the digital universe to power Modi to office.

But one thing is clear: Prime Minister Modi has a clear-cut mandate for change. That is rare. The prime minister and his inner circle will be asking themselves the most important question: where and how can we use that political capital?

He and...