Thank you, Mr Trump

With the UK, EFTA deals already in the bag, EU on the way, almost every member of RCEP except China signed up, and even restrictions on China being lifted, India has changed its mind on trade

- SHEKHAR GUPTA

‘There’s one part of me that wants to say: “Thank you Donald Trump for keeping that trade deal with India somewhere in your bottom drawer if not deep freeze”.

Because if you hadn’t, the flurry of substantive economic reform, not seen since 1991, would not have come. Think of the audacity of the new labour Codes, for example.

‘An early deal, even one by July last year —the period US Commerce Secretary Howard Lutnick is referring to — between the US-UK deal (June 16) and US-Vietnam deal (July 2) would have India smugly declare victory and sit back in comfortable cruise control. This hadn't been a government showing the stomach for any risky reform yet. And the few it tried, it retreated from without a fight. Think the new land acquisition Bill, farm laws, all withdrawn and labour Codes simply put on the back burner in subsequent risk aversion.

‘There was some reform on economic governance, including the cleaning of public sector banks’ balance sheets, consolidation, and the bankruptcy regime. But this period also saw the return of the big state with its mai-baap protection. Duties (more fashionable as tariffs now) grew and a new regime of quality control orders (QCOs) came up as a humongous non-tariff protective wall. One sector of Indian industry after another lobbied and collected these.

Only a deep state with the brilliance of Indian civil services could’ve designed these. These are probably what Mr Trump kept referring to as India’s “obnoxious” non-tariff barriers. Their time is over. These are now being rolled back in the Kind of alacrity, if not panic, that seizes school kids if the teacher walked in after a loo break and caught them watching Netflix on their phones. A civil servant as powerful, experienced and trusted as former cabinet secretary Rajiv Gauba, now positioned in the NITI Aayog to drive reform, is leading this rollback project. More power to him.