India's Budget To Set Context For Vigorous Foreign Policy

It is an abiding irony, as Rajiv Lal of IDFC says, that a country rich in entrepreneurial talent as India is also a notoriously difficult place for doing business. In a recent interview, Nirmala Sitharaman, minister of state for commerce and industries, said the budget will ease conditions for doing business in India. The government has indicated that the budget proposals will signal a shift in focus from consumption to an investment-led growth.

Economists and trade experts say India must adopt domestic policies that would help bring in trade-promoting investment. Most international trade is now intra-firm trade, they say, and India must enter the supply chain of global corporations to make investment the engine of export promotion.

Given such a macro context, the relations between economy and foreign policy is complex but vital. The new government understands that a stronger economy alone will make it a comprehensive national power. At the same time, as former prime minister Manmohan Singh has said, India's relations with the world are increasingly shaped by development priorities, and greater integration with the world economy will benefit the country and enable people to realise their creative potential.

An "internationalist" leader like Modi understands that and hopefully would not reduce the allocation for development partnership projects abroad.