For all the complexities of Indian politics, Prime Minister Narendra Modi’s path on economic policy (domestic and foreign) seemed to be clearly cut out. His ‘Achche din aane waale hein’ (good days are coming) campaign, which had won him a resounding election victory in 2014 for his first term, suggested that Modi’s primary goal was growth and development for his country and people, and hence also an agenda of economic reform. In response to the election results, the stock market had surged excitedly (Kumar 2014; Riley 2014) under the expectation that the new administration would pursue an aggressive agenda for economic reform domestically and match this by a foreign economic policy that would be enthusiastically pro-trade. This, in turn, would translate into India taking on a more proactive role in the World Trade Organization and perhaps also signing new regional and bilateral trade agreements. A closer analysis, however, reveals quite the opposite.

Focusing specifically on India’s negotiations in the context of the WTO, I show in this paper that India has continued to hold on to its prior policies and negotiation positions under Modi’s premiership and adopted even more hard-line positions in some cases. Interestingly though, the same policy priorities and negotiation behaviour patterns that had ill-served India in the past may no longer be a liability. This is only in part a credit to the Modi administration per se. Rather, it is mainly due to the rise of the phenomenon of weaponized interdependence (Farrell and Newman 2019). As recent years have begun to demonstrate and contra the assumptions that had underpinned the post-war multilateral order, globalization is not always a benign force for prosperity and peace; the very ties that were supposed to bind nations into a liberal peace can sometimes be exploited for security purposes, i.e. ‘weaponized’. The fact that global trade is now conducted via closely integrated value chains allows unprecedented power to a few countries that control network hubs of production and increases the vulnerabilities of other players. 

The security threats posed by this deep economic integration legitimize—sometimes even necessitate—the securitization of foreign economic policy, and more specifically, trade politics. Taken in this changing context, India’s historic and oft-reviled market scepticism looks far from being an outlier; indeed, it may even appear to be a foresighted response to new challenges.

My paper proceeds in five sections. In the first section, I briefly outline the main economic achievements of the Modi regime in the last six years and also point to the limitations. While the successes are not to be scoffed at, they are usually within the realm of domestic economic policy; when it comes to foreign economic policy, the record is less impressive (plus there is much that still remains to be done also on the domestic economic front). In the second section, I suggest that an overlooked but important explanation for the differential performance lies in the field of narratives. 

I offer a brief theoretical overview of the concept and posit that the most significant changes occurred in areas where the government constructed new and winning narratives. In the third section, I focus on Modi’s foreign economic policy within the context of the World Trade Organization (WTO) and compare it to previous eras. The reason for my choosing to concentrate on this particular aspect of India’s foreign economic policy derives from India’s long-standing commitment to multilateralism over the decades and also India’s growing voice within the WTO. Additionally, trade liberalization is seen as one of the less controversial areas of economic reform (in contrast to opening of financial markets or aid policies) for governments that wish to prioritize growth and development. The multilateral trade regime plus the nature of the issue together offer a context where we would expect to see the most obvious and immediate signs of trade liberalization and proactive agenda-setting. As such, it is an ‘easy’ test-case; if India’s negotiation priorities and positions remain unchanged even in this relatively amenable setting and in a less controversial policy field, we would have grounds to argue that not much is likely to change in India’s foreign economic policy in other less conducive (e.g. bilateral) settings. 

I show that India’s trade policy priorities, negotiation positions, and narratives today show some important continuities, not only in relation to the years immediately preceding the Modi years, but also with the previous decades. In the fourth section, I offer an explanation for the persistence of India’s old trade narrative and indeed its hardening in some instances. I argue that a major factor lies in the international and regional context—typified by the phenomenon of ‘weaponized interdependence’—that legitimizes old narratives of protectionism and strengthens them further. In the fifth section, I offer some conclusions.

Major economic trends under Modi’s leadership