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BW Businessworld

Clash Of Hindutva And Trade Policy

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With India’s exports shrinking for the third straight month, the commerce ministry rushed the publication of its long-delayed five-yearly foreign trade policy. The ministry tried to make up for its tardiness by presenting a rather ambitious plan: to double exports to $900 billion by 2020. It expressed pride that for the first time, India’s foreign trade strategy would be aligned with other government economic programmes like Make in India, Digital India and Skills India. What it has not factored in, is the Hindutva agenda, which threatens to put a spoke in the wheel of development. 
The BJP-led state governments’ imposition of ban on cow slaughter in Maharashtra and others runs smack into the commerce ministry’s plan to create jobs and increase exports by promoting trade in leather goods. This clash of economic policy with religiosity provides yet another example of the ruling BJP’s penchant for culture war, threatening to undo Narendra Modi’s development plan.
The trade policy was unveiled days after the ban on cow slaughter and beef import introduced in Maharashtra began to spread to other BJP-ruled states. Placing the imprimatur of the central government on that trend, home minister Rajnath Singh declared that “cow slaughter cannot be allowed in this country. We will use all our might to ban it”. Another BJP stalwart even demanded the humble cow be renamed as “Rashtra Mata” — mother of the nation. A misplaced religious sentiment (Hindus have been consuming beef for centuries) has now been raised to the level of state policy — negating the brave rhetoric of progress for all Indians.
It is thus ironic that the newly unveiled foreign trade policy singles out leather export as an area deserving special support. The leather sector already employs 2.5 million workers and the rising value of Indian leather and footwear exports — which had been growing until late last year at a healthy clip — has the potential to employ more people. It called for additional focus on leather garment manufacturing and exports, especially for important destinations as the US. While entirely laudable, what the ministry neglected to note is that pliable cow hide, rather than harder buffalo leather, is needed to manufacture quality garments and footwear. By shutting down abattoirs for cows and bulls, the government is threatening to stunt growth in of one of its self-identified promising areas. India does not lack skilled workers in leather goods, but growth has been blocked by a shortage of raw material. Last year, industry officials said that in order to meet the export target of $14 billion by 2016-17, the sector would have to double its production of 2 billion square feet of leather.  Instead, thanks to the ban, the industry will face a reduced supply (Maharashtra alone supplied over 15 per cent of cow hide) and meeting its existing commitments may require it to import semi-processed cow hide from Africa at more than double the price. Not a recipe for success in any business.
India’s chaotic policy-making offers a remarkable contrast with China’s sure-footed planning. As the world’s number one exporter, China accounts for 11.74 per cent of the world’s merchandise trade (compared with India’s 1.66 per cent), and has launched new initiatives to boost trade in order to support its slowing economy. Prime Minister Li Keqiang said the government would adopt policies “to allow our industries to charge out into the world unfettered and rise up through facing competition on the global stage”. 
While India, lacking infrastructure, technology and skilled workers, struggles to grow its manufacturing industry, the Chinese government at different levels is proactively planning for the coming labour shortage. Recently Guangdong province announced plans to offer sops to 2,000 manufacturers intending to install robots on their production lines. Though seen as a random coincidence, the divergent concerns of the two nations over cows and robots, perhaps, explains their different growth trajectories.
The author is editor-in-chief of YaleGlobal Online, published by  the MacMillan Center, Yale University
(This story was published in BW | Businessworld Issue Dated 04-05-2015)