Really loves Modi India

India first - but what about the Indians?

The new Indian Prime Minister Narendra Modi wants to stand up for the interests of the poor by rejecting a WTO agreement. But at home he does the opposite.

By Joseph Keve, Bombay

Last Friday, official India celebrated Independence Day with the usual pomp. The new Prime Minister Narendra Modi used the anniversary of India's detachment from the British Empire in 1947 as an opportunity to defend India's resistance to the World Trade Organization (WTO): India rejects the comprehensive Trade Facilitation Agreement (TFA), “for the interests of the poor in the country to protect », even if this is not well received at the international level. Modi, who has been in office for almost three months, accused the previous government of having betrayed India's poor, as it had approved the deal at the end of 2013 during the negotiations in Bali.

At first glance, Modi's position may seem astonishing. After all, the previous government of the United Progressive Alliance was relatively protectionist, while Modi, as Chief Minister of the state of Gujarat, propagated economic globalization (combined with nepotism) as a model of success that had to be carried over to the whole country in order to promote economic development. Why should Modi suddenly throw these principles overboard? And that just before his trip to the USA, whose government is counting on a neoliberal change of course in Delhi?

In fact, not that much has happened. India supports the WTO consensus to promote free trade, for example by reducing bureaucratic obstacles and non-transparent customs regulations. At the same time, however, the country insists on maintaining its food security system, which has been tried and tested for decades. This includes a state storage and distribution system for agricultural products and subsidies for the most important staple foods for the poor. There is a broad consensus in India's politics and civil society that this system is not up for debate, as around a third of the Indian population is affected by undernourishment and malnutrition.

Since the WTO wants to severely restrict subsidies in particular, Parliament in Delhi has now, at least temporarily, stopped the ratification process of the TFA. Trade Minister Nirmala Sitharaman welcomed this: "Food security is a humanitarian necessity, especially in these times of uncertainty, and it cannot be sacrificed to mercantilist goals." As a result, several Indian business associations also announced their support for the government and parliamentary course.

Perhaps the most important encouragement for India's resistance comes from the UN. "It makes no sense to create jobs for any other country while your own people are still hungry," said the president of the International Fund for Agricultural Development (IFAD), Kanayo Nwanze. “If I had to choose between feeding my own family and creating jobs for someone else, what would I do? What would you do?"

In India, many people are now praising Narendra Modi for “showing it to the industrialized countries”. They see Modi as a great nationalist who saved the Indian system of food security, even if he turned the EU, the USA or Australia against him. Modi let the world know that his “India first” was no less important than Barack Obama's “America first”.

Indeed, what is wrong with the government supporting Indian farmers who understandably are demanding that they be compensated for the economic risks posed by global market forces? Especially when the farmers in industrialized countries receive massive support and subsidies. The EU and the USA currently subsidize their agriculture around ten times as much as India: The USA distributes around 120 billion US dollars to its 3 million farmers, while the 500 million Indian farmers receive a total of 15 billion US dollars.

While there is consensus in India to support opposition to the WTO, there are good reasons to question Modi's truthfulness. Because at the same time the government is severely restricting the Food Corporation of India's ability to act. This institution, which has existed since 1965, is supposed to implement the national food security strategy, for example by purchasing agricultural products at a minimum price. This has also just been lowered. In addition, the system should become much more efficient - for years bureaucrats and middlemen have been collecting part of the subsidies, and almost a third of the basic foodstuffs are spoiled because the distribution channels and storage conditions are catastrophic.

If Modi really wants to defend the interests of the poor, he shouldn't just celebrate it on an international level. He should start doing it at home.

Translated from the English by Markus Spörndli

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