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EAM's interaction at PAFI National Forum (23 October, 2020)

October 26, 2020

Dr Samir Saran: Thank you Virat for a very intense week of discussions. I think PAFI has done a great job by bringing very important voices to India and we have all gained from these past few days, and I'm sure what we are going to hear in the next 45 minutes is going to help us shape our own works, our own outlooks and certainly our world view. Dr Jaishankar, Honorable Minister, I can tell you at the outset that there is one question I will not ask about and that is on China. Over the past months, you have replied to this question in many forums, in pretty much the same vein, and since your replies have been so consistent, people love trying to find deeper meaning in those replies, sometimes perhaps complicating your own assessment. And I don't want to add to your complications by asking you again about China, but there's plenty to talk about besides the Himalayan Saga and I think Virat has given us a cue on the way forward, that's where I'm going to focus on. So with your permission, Mr Minister, I would like to take off from where Virat left and ask you the question most important question of 2020, for you as the foreign minister, what are the foreign policy learning from this year, from 2020, from the pandemic? What does it tell you about the world that we live in? And certainly what does it tell you about what we need to do to succeed in this world?

Dr S Jaishankar: Well, first of all, let me begin by saying it's a great pleasure to address the PAFI meeting, even if it is virtual and good to see you all. Thank you Ajay, thank you Virat, and Samir I can't find, think of a better person to have a conversation with on the state of the world. So, let me start with that question andby the way, thank you for showing that restraint on the subject you mentioned, because I think as you say people have started to tell me what they think I mean which they seem to think they know better than me. But anyway, put that aside. So here's the point, look, we are today more than 10 years after the 2008-2009 global financial crisis and looking back a decade after that, it's very clear that it was a very major shift in the global power distribution. Okay, and you know, it was expressed in different ways, you know, one of which was the G7 and G8 became the G20, certainly it was a big inflection point for China, in China's rise. For us too, I mean, obviously the economy took a hit, but you know, finally when you looked at it in the overall global sense, it was certainly in the distribution of power, we came out ahead. And today people would be surprised to know that at the G7 meetings before that, we actually, India and China used to be invited as a kind of a attendee, in a single session, a side session. We were not even on the main table as it were. So it tells you a decade later, how much the world has changed. Now why am I saying this? If someone looks, maybe not a decade, even five years later at 2020 and ask themselves, so what did 2020 do? Okay, I don't have the answer today, but I can tell you they will all say, I'm pretty sure of this, that it was a very big year, that it was the year the world changed, you know, a lot of forces, lot of trends which are already there went forward, new things happened, and when we look at the uncertainties which 2020 has actually increased, to my mind the two phenomenon which were unfolding, which were the multi-polarity in the world, which means really a much broader distribution or shareholding if you would, and the rebalancing, which means the weightage of players was also changing along with that, those will both clearly increase. But, what does it mean to us, at home, and in foreign policy? I think, if we are to come through the challenges of 2020, like every other country, we will obviously be focused on economic recovery, like many big countries, and certainly those who are impacted in this particular way, we would be looking at more resilient economies, more resilient supply chains and I know that's been a subject of discussions. But, I would also say for India, this is also a moment to actually, sort of increase, you know, do deep reforms, that it's not enough to recover, it's not enough to look for a more resilient world. I think if you have to make crisis into opportunity, this is a moment of change when you know, the society, the polity, should be more open and I think, is much more open to the reforms, and we have seen some big reforms in the last few weeks, agriculture is one example, labor is one example, even education is a case to point. So, I would say big inflection point, how much it would make a difference to us in the long run still not clear. It will unfold, lot of it will depend on the choices we make, you know, are we willing to bite the bullet in different areas. But again, I would argue that if you look at what the government's been doing this year, we've been sort of steady wave, you know, handle the handle the pandemic, in fact, again if you look at the response to the pandemic itself, I see two big pluses to take away is there, one is the social discipline with which the people of India approach this and I again I've said this before, I see more people wearing masks in India, then I see in most other parts of the world, and to me it's an extraordinary situation, and the second is the capability response we've seen, the PPEs, the masks, the ventilators, the testing kits, the vaccines, which await us. So, we will come out of this stronger. I have no doubt, but I would like to be ambitious in coming out of it, not just want to get back my place.

Dr Samir Saran: So maybe, just as a follow-up, we will take a part of what Virat posed to you, right at the very beginning, with respect to how can you see businesses supporting foreign policy or government initiatives more broadly and how will diplomacy reorient itself in response to this challenge, this humongous challenge the pandemic has posed? As a diplomat, how you have to be different?

Dr S Jaishankar: So look, I think as a foreign minister, as a diplomat, businesses mean different things to me. At the most fundamental level, they are employment creators, they are the people who keep the country, the livelihood of the country going. So in that sense, they are organizers, or creators of employment, who then sort of aggregate the efforts of people, and take you into the marketplace, and give you a capability to play. Today we all accept the concept of what is called comprehensive national power, that power is not, the metric of power is not military power, it need not again be just diplomatic skill, but a lot of it is your economic strengths, finance, trade, investment, connectivity, data, technology, these are the more contemporary metrics of power and businesses can make a very very big difference here. The second part of it is, I would say, the nature of relationships with countries, which is that, you know, when business goes out, or business facilitates, you know international relations coming in, they are a player in the arena. So anybody in foreign policy or diplomacy would harness the activities of business and clearly for me a much more active, vibrant, confident Indian business is a very good partner to have. And, the third I would say is branding, I mean, if you look at the branding of India, in the last 25 years, a lot of that is we get the benefits, a sense of India which sometimes business activities in foreign countries too, I mean, sometimes it can be a business branding, sometimes it can this sense of India today, as India is a tech country, or as I hope, that the sense of being a pharmacy of the world. At the end of the day, we have supplied medicines to a 150 countries during Covid. More than half of them were grants that we gave them. Now you look this was a business contribution, because somebody in India produce that. We took advantage of it, we use that to build bridges, but as a result, we have today built a branding, strengthened our branding as the pharmacy of the world. So, for me, having that as a partner is a very important part of the overall scheme of things.

Dr Samir Saran: Sir, you know there is a degree of Indian skepticism around trading relations of the past, vulnerable supply chain is the word that we hear often, weaponization of global value chains again, a term that is often used. Paradoxically, some would argue that India now needs more of trade, it needs more of these inter-linkages, it needs more deeply integrated into these value production endeavours. How do you reconcile this Indian skepticism with global value chains, and of course the need to be more present in more parts of the world? How does ‘atmanirbharta’ and our international opportunities in some sense move together?

Dr S Jaishankar: Look, I don't think that the mainstream skepticism about international trade, about some aspects of international trade, were based on the fact that international trade, per se, was somehow negative or detrimental to our interests. I think the skepticism was the manner in which negotiations were conducted, outcomes were generated, arrangements were arrived at, and what was its impact on the domestic economy. Now, the fact is, if you looked at, I will say, particularly the last about 15 years or so, what have we seen. I'm talking to an audience, which is primarily a business audience. I don't have to tell anybody out there that manufacturing in India has actually struggled to deal with, cheap imports which have come from outside. Often, you know, imports which have been encouraged by market distortion and in some cases by non-market factors. So the issue is not, it's not black and white, should you have international trade, that's good or bad. It is what is the manner of international trade, what are the terms of international trade, and if I were to sort of sum up the problem in a way, I mean and I am not blaming anybody outside India, I mean, let me be very clear. I think we made choices, we made calculations, and I think we were driven by what I would call an L1 mentality. I get the most competitive price, in a sort of bureaucratic process sense, you say well L1 is good, let me take that. And as a business sense often, people would take an L1, because it would obviously, give you a better margins, in the overall numbers, but the fact is if you conduct life as an L1 exercise, you will actually end up very often affecting your own capabilities because there is an L1 sitting outside, who is using their advantages and their system sometimes to game yours and really, you get hollowed out in different areas. So, I would actually argue we should have a V1 mentality, which is we look at value. I mean to me if I had a choice between two outcomes, one of which creates employment in India, one of which creates downstream industries in India, which creates, supports innovation in India, which actually gives me size and scale in India, I would choose that over L1. I think this, I would take this debate not as a trade, you know, do we do foreign trade, do we not do foreign trade, do we do FTA, do we not do FTA, I think it’s an L1-V1 kind of issue. And, at the end of the day if you look at people who have done well in Asia, the big manufacturing hubs, they have all built the domestic industry, most of them their MSME sectors have grown as the economy grew. They didn't take a hit because their economy grew, the purpose of doing more trade, the trade should not be at the cost of domestic economy, trade should actually expand the arena for the domestic economy. So, I think it's a question of intelligent, sensible, strategic management of our trade strategy.

Dr Samir Saran: So, we have a hard stop at 7:29 or 7:28, as we heard. I would request all online to start posting their questions and I try to integrate them into the conversation with honourable minister as we proceed over the next 20-25 minutes. Sir, we heard about L1 and we heard about V1, but between L and V, there is another alphabet, I want to quiz you on its called Q. Some voices suggest that Mr Minister Jaishankar is part of an exercise to build an Asian NATO, the Quad. How would you respond to that? And, you know, although I try to read up and read a little bit on foreign policy, what is the Quad? How should we, as people who are in businesses, people who are in different sectors, assess the emergence of this phenomena called Quad.

Dr S Jaishankar: By the way, you said you won't ask me questions on China, but I find that you found a way of coming around, but that's okay. Now, you know what I began by laying out was the direction the world was moving in, and the direction the world is moving in is a more multipolar world. It's you know, I use the word multipolar, what it means in plain English is there are many more countries who have the ability to influence and shape outcomes, and part of it is that you know, there's been a change, relative change in the position and power of the United States, a difference in which the West collectively perceives itself, which is less collective than it used to be, a change clearly in the importance, the power of China. I mean the rise of China is one of is the big geopolitical event of our lifetimes, you know, much more activity from Russia, and in many ways much more regional, I would say regional solutions to regional problems. I mean this is the world we are seeing. Now, what was the world before? The world before was a world which was in some ways much greater American dominance, supported by a strong Western block, support for America. Now, the world before that was a cold war world, where they were two blocks and you know, the two blocks were try and push everybody in the world to choose between them, a few of us, like India did not make that option. Now, every structure, every landscape produces its own sort of thinking and its own strategy. So, when you had a cold war and the pressure to choose, you had a phenomenon like non-alignment, okay, which is I will not choose between the two of you. I'll keep my options open. When we had American dominance and Western dominance, at that time, you had strategic autonomy, which is in key areas of nuclear, of economy, of trade, I will not be pressurized, to compromise my basic interest, I have that capability on strategic issues of being autonomous of the dominant setup. Today, multipolar world will also create its own logic. Now, if there are more players out there, then clearly the player, you know, you can't have strategic autonomy in a multipolar world, because strategic autonomy is against a dominant player. Okay, you don't have non-alignment, because there are no caps. The underlying idea is not different, the underlying idea is still an independent India, there's a consistent pattern, you know, because Independent India will express itself very differently and that is today in an example, like Quad, Quad is not the only example, where four countries have, you know, find it useful to consult on issues which are in their common interest. They are issues like, maritime security, how to respond to humanitarian assistance, disaster, relief situations, connectivity, issues like counter-terrorism, now resilient supply chains. So, these are four countries who say okay our interest converge, we have the bases to do business with each other. So, I would say it's very much in keeping with times and we will find increasingly in a multipolar world and a more fractured world, I would say, this ad hoc combinations of countries who will work together and by the way, since we have so many agendas as we become bigger, we will have areas where we will work with other countries. I mean if you look 20 years ago, this was a time when the West was very very dominant. You are three countries, who felt they had a common interest today in working together to strengthen the hand vis-à-vis the West, the three countries were Russia, India and China. So before there was a Quad, there was a triangle. So, it's not an entirely novel proposition, but I would suggest to you that a more multipolar world will create, this is future.

Dr Samir Saran: In the last few weeks, you would have done a foreign ministers meeting of BRICS, of RIC, you would have done a foreign minister meeting of Quad, and you would have done a foreign minister meeting of BRICS.

Dr S Jaishankar: and SCO, the Sanghai and IBSA, that's another triangle. That's India, Brazil, South Africa, which is a democratic. I also did a few others, I have done SAARC, etc, but the plurilaterals, you might say kind of voluntary, non-structured kind of meetings, it would be RIC, it would be IBSA, it would be Quad, those are the kinds of meetings.

Dr Samir Saran: Sir, but just extending this conversation, you talked about the emergence of plurilateralism and these new flexible arrangements, like Quad, the fact is that we are also seeing emergence of a new geography. When I was born, I had an ocean called the Indian Ocean that was our ocean. Now, we are living in a world which has the Indo-Pacific, and this seems to be gaining currency, the political geography is now beginning to dominate the natural geography. Which lends the question, that will India have to rethink some of its own internal arrangements, which regions are more important to engage with the Indo-Pacific, is the Mumbai Marine Lines as Central to India's Indo-Pacific future, which are the new trading hubs that we will need to invest in, if we need to capture this in emergence, are we thinking about those new Dimensions that we will have to invest into?

Dr S Jaishankar: You know Samir, from the time when you were born and you looked at your ocean, there are now many more ships sailing in that ocean. But, I think probably when your grandfather was born, maybe when your father was born, actually even that ocean was a little different. I mean I have referred to it in my book, which was think of it, the British, in fact, not just the British, the Portuguese with a base in Goa went all the way to Macau and Japan. Okay, the British with India as their sort of fortress, again went all the way up and all the way sort of beyond. So the fact was between the Pacific Ocean and the Indian Ocean, there wasn't a hard divide, even conceptually. The hard divide happened after the second world war when the United States in particular established it's very strong dominance on East Asia, you had the second world war and the importance of Japan, the America-China relationship, the Korean War, the Vietnam War, all of which actually kind of created a military strategic divided between the Indian Ocean and Pacific Ocean. We started thinking of it very differently. Now when you move into a multipolar world, and I am sorry if I keep coming back to that, what today people find is it's not like you have so many forces, you have something out there in Indian Ocean which is different from something other than Pacific, you find that you need to deploy your assets across and it's not just an American problem, you know, look at it from our point of view and I'll come to the state's part of it. The bulk of our trade till 25 years ago used to go westward of India. Okay now after 25 years since 1992, more than half of our trade goes eastward of India. Okay, now if it goes eastward of India, you know, you can't stay with the same theoretical construct or strategic construct which you had before. If your key partners today are in the Pacific, clearly and your interest therefore are more and more in that direction, and as I said, the capabilities of all the players are changing, then the Indo-Pacific comes into being. My argument is Indo-Pacific is actually not a bold concept which is going to drive reality. It is an explanation for a reality which has already happened in the last 10-15 years. Now, what does it do to India? I mean, it's very interesting if you look at Indian history, and I know this is a very very sweeping statement to make, India's moments of greatness when eastern India was very prosperous, very vibrant, when in many ways, it was a sort of like the center of the overall Indian civilization space, and if you look at the colonial period they were the people most impacted by colonial rule. I mean, if you look at the pillaging of India, which was that period of colonial rule, the bulk of the pillaging actually happened in eastern India. Now, what Indo-Pacific and Act East and other forces which are going to pull us eastward will do, is you know, it will make sense today to build ports on the eastern seaboard. And again, I would argue, look at the last 15 years that is already happening. You know, it will make sense today for us to start thinking of our geographical advantages there. Northeast, I think that has changed today, I mean, the whole outlook in the Northeast is fundamentally different in the last few years. And even you know, if you look at our relationship with Bangladesh and with Myanmar, the more we actually connect with our immediate eastern neighbors, you know, you're actually opening up a much broader avenue of economic interaction. So, I would hope that the Marine Lines and Mumbai remain important, but I suspect that you're going to get a lot of new sort of trade lines as it were, in many eastern Indian cities.

Dr Samir Saran: Great. So, you know, since we've gone East already, let me ask you about Japan. How significant is the stepping down of Prime Minister Abe for health reasons, bilateral between India and Japan? And, is Indian partnership, we hear about America far more often, because we read English newspapers and English media, but is partnership with India a strong strategic partnership in the true sense, a Japanese consensus? You know the country quite intimately, is there a consensus in Japan on the Abe formula for India? And, do you think that we are beginning to touch the levels of partnership with Japan that perhaps you would desire?

Dr S Jaishankar: Well, I would say the short answer to your question is there a broad consensus in Japan about the direction in which Prime Minister Abe took it. I mean would the policy outlive Prime Minister Abe, that's a question you're asking me. My sense is yes. I think what he did during his tenure, and I think he was remarkable in this respect, was the kind of attention and you know the persistence with which he sort of pushed this relationship. My own senses, it has today very very strong foundation and I would say in all fairness because it was reciprocated in equal measure on the Indian side, especially by Prime Minister Modi. It's today, you know, I don’t have worries about the relationship. Okay. Still, I mean he was an extraordinary figure and no question, you know, we will miss him like so many others. But, what does the Japan relationship mean to us? Look, number one, if you look at the history of Asia, modern history of Asia, Japan has been the pioneer of modernization. It was it was with the Meiji restoration, it was the growth of the industrial Japan, in fact, it was Japan's defeat of Russia in 1905, which in many ways, you know, Indian nationalists took as a kind of a sign of, you know, Asia's ability to revive itself. And Japan is not only been a pioneer, Japan in many ways has also been something of a model. It has built its own capacities and it has also had a very very energetic presence in the world trading system. When you ask me the earlier question, which is, is Atmanirbhar Bharat in contradiction with, you know, global value chains and international economy, look at Japan. Japan's had an atmanirbhar Japan for a 150 years. Okay. So, I would in fact look at Japan and say there are aspects of the them, I mean clearly they are very unique, and that way we are unique too. There are aspects of the model, which has learnings for India and how to build your manufacturing, how to strategize, how to engage in the global value chain, and actually bring your capability today, and you know, because I didn't address that in the earlier question, I mean to me atmanirbhar Bharat means building the capacity to have a stronger hand when you go out in the world. Okay. Now there is a third element which is, if you look at who are our partners who can today directly drive the post Covid recovery, the recovery, resilience, reform bit, which I have spoken about. I think Japan would be to me one of the country's right up there, and they are a country with a record, I mean if you look, think back at what difference the Maruti Suzuki introduction made, not to the auto industry, to the entire lifestyle of our Indian generation, look today at how much of a difference the Delhi Metro makes, I mean if the Metro comes to a halt, Delhi today comes to halt, and not just Delhi, what was seen, you know, I was in the Embassy when the Metro agreement was signed. At that time, you know, you have to convince people that look this is going to be relevant, this is going to be important. Today, every big Indian city would like a Metro. So, we have the the bullet train project. I think when the bullet train comes, I mean those of anybody who's traveled in the bullet train in Japan, or in China, or in Europe will realize, I mean, what a profound transformation that brings, I mean, the bullet train is not about traveling, the sort of ripple impact of it is so enormous, it's bigger than the project itself. So I think today the Japan relationship is very different, it's got enormous potential. I would like to see us having a high ambition.

Dr Samir Saran: Sir, I am going to move into the rapid fire round now, in the old television format. I have been bombarded by six or seven questions. I'm going to give you 30 seconds to 45 seconds for every question. Very interesting ones and I'm going to combine some of them. There are two questions which add up to, is the Indian democracy ahead of the government in global relations? How government can used its bubbling mood of the street for scaling its ambitions and the second part of this question is how can the corporate sector in India assist the government in building stronger foreign policy maneuvers in this changing world?

Dr S Jaishankar: Rapid response, I think it matters a lot that our, you know, we are well regarded today as a democracy, as a democracy built under most challenging conditions. I think people trust us. In a world, in a post-Covid world, where you know, trust and resiliency, dependability are going to be very important, I think a strong democracy at home is going to be definitely an asset for foreign policy. Rapid response on corporate sector, absolutely, corporate sector will contribute directly to our capabilities. It will help, you know, it can change employment, it can create demands, it can create capabilities. As I said, it can enhance our reputation abroad and it can actually facilitate the flow of Indian talent to the global economy because it's in our interest to make world not only a marketplace, but a workplace.

Dr Samir Saran: Sir, we have left out a very important continent and I'll probably give you a minute for this answer. In the 1.5 years that you've been a minister, you have invested more in EU and Europe, then perhaps any of your predecessors. It's an old continent. It's divided, right I mean east and west, north and south. They can't agree on immigration, they can't agree on data economy, they can't agree on China. Why are you so enamored by them and certainly in that sense your special agreement with Denmark, on the green agreement with the EU, on green with Denmark and this whole climate agenda? What is your assessment of what that relationship offers and is India ready to be a green champion alongside the EU, Denmark and other partners within the grouping in the days ahead?

Dr S Jaishankar: Well, I am enamored of anybody who can be of use to me. Okay. Apart from which I like them. Now, they can be of use to me because if you look today at the challenges of India and I spoke not just of recovering to where we are, you know, look ahead. I would like to see a green India, I would like to see a digital India. I would like to see us, you know a much more innovative skilled India. Now, if you look today where our resources, where our markets, where is technology, where our best practices, I would suggest to you many of these roads that may not lead to Rome, but they lead to Europe as a whole, of which Rome is apart. So, the point is that there is a lot that we can gain and the second is look Europe had after 2008 gone into a fortress, you know, Europe mentality. They had kind of put their economic interests so directly ahead of the strategic one that they have pulled back. I think it was important to get them to understand that you can't really sort of separate the two, that you know, and you would see and I'm not suggesting it is my activity, but you will see there is a revival of European interest in Asia. I mean, Germany has just announced its Indo-Pacific strategy, France has announced its Indo-Pacific strategic, EU has announced its India strategy. So, you know, I would like to think that all the efforts put in have not been wasted, that I've certainly got their attention, and you know, even a country like Denmark since you mention it, look at the green capabilities of Denmark. A lot of our issues today, recycling issues, circular economy issues, pollution issues, you know, there are technologies and proven capabilities out there.

Dr Samir Saran: Sir, we have two minutes and we have two questions for you. Both are very simple. The first of course is, there is the smart money on the US elections, what are your predictions and how will the outcome change the politics of Asia and indeed the world? And second, of course, in two years it turns 75. Every country, every community need stories, narratives that define them. What is the storyline that you are working towards as we move to 75? So the US elections and the Indian story @ 75.

Dr S Jaishankar: Well, the first one is easy, I don't know about the smart money is, but I think the smart thinking is to keep our own counsel. On where India is @75. Look you yourself brought up democracy. I think India @ 75 needs to send out that message of, we build democracy under the most challenging conditions. We today have shown, we built development, also under equally challenging conditions, not just development, that we built, we are moving towards a much more human centric view of economic progress. I think we also need to send out a message, to the rise of India is not, you know, India will never have an US versus the world mentality, that the rise of India is good for the world. We will contribute for the world, that there will be issues where we will share, we will be generous, and I think you know, the pandemic was very good opportunity. And, most of all I think my message at India @ 75 would be if we can show them our creativity, our talent, our energy, our dynamism, I think that's the quality, it's the energy of India, the buzz about India which attracts the world and I'm very very confident we'll be able to do it.

Dr Samir Saran: Creativity, energy and buzz and that is in some sense the cue to hand it back to Ishteyaque because all of those three virtues belong in the corporate sector in abundance. So,Ishteyaque over to you, to make that happen.

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