Adeluge of literature has emerged in recent times to explain India’s globalization and how it resulted from a continuous process of interaction between state and non-state actors. The book under review serves as a relevant addition to such literature. It looks at the interplay of domestic and global factors that have shaped India’s trade policies and poses the central puzzle of India’s globalization in the introductory chapter which is that the rapid changes ushered in since the year 2001 comes as a surprise for the rest of the world. The critical role of wood-reformers, a term that the author uses recurrently for the coalition of actors within the global framework of trade rules and regulations, is noteworthy in this regard. Most importantly, India’s increasing negotiating capacity in such forums as G-20 has given a new strength to its position as an international player. Viewing shifts in domestic interests and economic strategies, a more regular and well-informed corporatist interaction between state and non-state actors is seen to be in place since the beginning of the new millennium.
This is in contrast with the fragmented trade regime till the 1990s. While domestic dynamics accompanied by the structural changes of the 1980s were more effective to push for reforms of the 1990s, deeper integration of the 2000s is seen to be driven more by global drivers particularly global rules and markets. How this has occurred is a central objective of study in this book. It is clear that the integration has not been an easy ball game with a package of push and pull factors posed by external actors and institutions. This is well evinced by the cases of textile and pharmaceutical sectors of India.
The theoretical framework that is aptly termed as Global-design-in-motion weaves the local and global elements in a triangular fashion. The impact of the interaction on domestic actors are enlisted as transaction costs, sovereignty and private costs, legal framing and information revelation. These costs are not mutually exclusive as one may trigger the impact of the other. For instance, the high transaction costs of international rules may produce sovereignty and even private costs. A contradiction emerges when it is argued that WTO rules are complex and technical and yet they reduce the transaction costs as theorized by Rational Choice Institutionalism. However, counter-intuitively the difficulties emerging in such negotiations are seen to strengthen the state’s negotiating power and enhance the possibilities of greater institutional reform.
The second pertinent point that emerges from the theoretical-cum-empirical discussion is that the global organizations vary in the extent to which their rules and norms limit state sovereignty to ensure compliance. As shown, India serves as a classic case of a re-formed state with enhanced negotiating capacity that is counter-intuitively a result of negotiation rigours at WTO. Many instances of India losing cases in the WTO are cited with the government getting back with better capacities to manage deals with global and local business. Moreover, India is seen to be partnering with like-minded and equally powerful nations like Brazil in international forums like the G-20 to achieve a higher order of leadership in the WTO vis-à-vis the United States and the European Community. This also in a way gives strength to other aspiring nations to pose a challenge to western hegemony in the WTO and other multilateral forums. Externalities have also provided incentives to transform structures internally by laying a definite institutional foundation to handle complexities of global negotiations. This is well illustrated by the re-ordering of the Ministry of Commerce, the nodal agency for managing trade policies, to create an administration best suited to deal with trade-related matters negotiated in the WTO. Other instances of organizational restructuring in response to WTO-generated constraints have been identified as intellectual property rights, tariffs and anti-dumping. Evidently, these instances make a strong case for India’s prowess in managing globalization. These home-grown developments reflect strong and autonomous state actions in incorporating global norms to enhance India’s scientific and economic capabilities. Contrarily, this interpretation controverts the earlier claim about state’s circumscribed autonomy amidst deeper global engagements. The contradiction is thus inherent in the argument about the state’s sovereignty costs along with its rising capacity in managing global trade to maximize its national interests.
The sectoral studies present an empirical portrayal of the state’s enhancing capacities generated by globally-negotiated norms and regulations that incur higher costs and constraints. Selection of Indian pharmaceuticals and textiles as case studies appears condign considering their comparative advantage in international trade. To begin with, pharmaceuticals posits a case of an emerging business constituency of patent supporters to take the WTO’s stringent patent norms in their stride. This illustration may also be appropriate to understand the political economy of transformation in a sector where protectionist interests have remained historically embedded and resistance was still unmanageable in the early-1990s when structural transformation was under way. An additional uncertainty suspected was the fragmentation within the industry with diverse interests, preferences and business strategies that made collective action difficult in the face of TRIPS compliance. Yet, as observed, the change happened quickly with India subscribing to TRIPS thoroughly in 2005. This is accredited to an emerging coalition of big companies, local and multinational, favouring TRIPS after realignments following the tedious compliance process since 1995. Continuous reference has been made to the attitudinal change within the top-notch management of Ranbaxy, one of the leading pharmaceutical companies in India. Ranbaxy’s storyline shows how ideas within a business community change fast in response to global market dynamics. This may be true for other big players who felt the necessity of re-adjustment to expand their global reach. In this entire episode of transformation however, the critical involvement of state institutions in directing change within society and resolving and managing collective action problems seems to be missing. Transforming internal preferences seems to be solely emerging from the re-adjustment dilemma posed by TRIPS. Secondly, the fate of smaller players that found re-adjustment difficult even after the institutionalization of patent remains a puzzle.
The author recounts yet another complementary story of global stimulation with textiles. As a more difficult nut to crack, the textiles industry has traversed through harsher realities of politics and business fragmentation. The difficult terrain that the industry has passed through before it emerged as a collective entity post-2000 is historically traced in this book. The industry has been most vulnerable to trade union resistance evinced by the long-drawn Bombay textile mill workers strike in the past. Also, fragmentation has been far deeper than in other sectors with similar traits. With respect to these two predicaments, the transformation has been shown to be a daunting task. Second, two phases of transformation starting from the 1980s have been clearly distinguished in terms of innovations, strategies and R&D by the textile industry to expand its global outreach. To substantiate this, initiatives and efforts of individual enterprises in both big and small segments have been outlined. The illustrations given clearly corroborate the globalization thesis entailing re-orientation of the industry with better accommodation to global rules and constraints. Methodologically, the formulation can be interpreted as global stimulus being the necessary condition and internal support the sufficient one.
The textiles story seems more complex than pharmaceuticals and yet follows the same logic of global stimulus for commercial expansion. Ironically, the complexity has produced greater incentives for globalization resolving collective action problems. As observed, the re-adjustment by smaller producers in the pharmaceutical sector has been hard even after the institutionalization of product patent as against their counterparts in the textiles sector who quickly found new ways of strategizing and innovating in the face of a transformed global business order. Probably, the state’s more coordinated role towards catalysing collective action in the textile sector in anticipation of global restructuring as envisaged by the author is an answer to the comparative dilemma. In contrast, as shown, the restrictive state policies of the past not only created difficulties of consolidation but also inhibited the induction of sophisticated technologies much required in making globally competitive products. The story is taken forward to outline the incremental policy changes in the 1980s rightly termed as ‘one step forward, two steps behind’. This differs slightly from Atul Kohli’s observation about the drive towards liberalization in the mid to late-1980s as ‘two steps forward, one step behind’. It also shows that in textile industry, the interests resisting liberalization were far more entrenched than other sectors. The 1982 strike is a testimony to this.
Overall, the book provides valuable insights into the pattern of transformative business order in response to global restructuring. In the given theoretical-cum-empirical framework, the state’s guardian and educative role has been critical in institutionalizing global norms and stimulating private capital to establish an industrial order akin to the transformed global order. Although the autonomy question in the face of sovereignty costs still remains puzzling, a new political economy with deeper engagement between the global, state and local institutions is clearly envisaged. What shape this networking is going to take in future will largely depend on the modalities of globalization and the complexities of interest articulation at sectoral levels, but a more active state intervention to pursue globalization is undoubtedly foreseen for the future course of development in India. This prediction is consistent with the author’s disagreement with the ongoing claim about the state’s retreat under globalization.
Propositions embodying relevant arguments about India’s response to global rules and markets run consistently through logically-sequenced eight chapters and the language used is simple and lucid. Use of graphs and tables makes the writing illustrative and empirically well investigated. To conclude, the book serves well for a wide audience including academicians, policy makers, business professionals, students and research scholars and is especially useful for those doing research in political economy and business management.
Siddhartha Mukerji is Assistant Professor in the Department of Political Science, Babasaheb Bhimrao Ambedkar University, Lucknow.
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India Connected: How the Smartphone is Transforming the World’s Largest Democracy by Ravi Agrawal takes readers on a journey across India, through remote rural villages and massive metropolises, to highlight how one tiny device—the smartphone—is effecting staggering changes across all facets of Indian life.
Oxford University Press, 2018, pp 230, R550.00