CITYZEN. From being Bangalored to being Trumped

Infosys was among the first Indian companies to respond to President Donald Trump’s measures to retain jobs in the US. It announced that it would be creating 10,000 new jobs in the US, even as it was, along with other software companies, laying off workers in India.

There was a time when losing a job in the US that was transferred to India was known as “being Bangalored’. Today, jobs in Bangalore are being ‘Trumped’.

The instinctive reaction to this change has been to fall back on nationalism. The White House celebrated Infosys’ decision as a sign of the success of Trump’s efforts to bring jobs back. Even as the Indian reaction has been more muted, there is bound to be a need felt sooner or later to address any reversal of outsourcing.

This is primarily a national challenge. As deglobalisation makes inroads into the world economy India is bound to be affected. The problem may not be as universal as was expected just a few months ago. The new French president has an outward looking strategy that looks to Europe and beyond. It is possible that the current pro-Europe dispensation in Germany will also continue.

And there are tendencies among some countries in Asia to seek relatively more open communication and investment paths.

The obvious response to one part of the world deglobalising while the other is not would be to realign our global connections with the parts of the world that are globalising. But this requires a nimbleness in global trade negotiations that India does not quite have. Its attitude to globalisation has been oddly ambiguous, even schizophrenic.

Its position in WTO negotiations have been staunchly anti-globalisation while its domestic policies after 1991 have been focussed on lowering trade and investment barriers. This contradiction has meant that even while India struggles to achieve consistent high growth in exports, its domestic market is being eroded by imports.

India has tried to brush this contradiction under the carpet by focusing on bilateral negotiations even at the cost of being isolated in global trade negotiations. This isolation may not have meant much in the earlier global regime where the US was leading the movement away from global trade bodies in favour of new trade blocs.

But Trump’s deglobalisation has abandoned TPP, raising the possibility of the WTO regaining at least a part of its earlier role. Far from seeing this as an opportunity, India’s approach to the world trade body remains negative. It continues to refuse to allow investment to be discussed in the WTO though it is very dependent on FDI and FII.

What is more, India remains suspicious of newer efforts at multinational economic integration even when it occurs in our neighbourhood. China’s ‘One Belt One Road’ initiative may have had elements that India needed to oppose, particularly territorial issues with regard to PoK. But the Indian boycott suggested a rejection of the initiative itself rather than any single element. There is then very little chance of India finding new opportunities to make up for what it might lose in Trump’s more localised vision of the American economy.

A major part of the price for India’s intransigence will be paid by our cities. The jobs that are being moved out are primarily in our cities. The loss of these jobs also means a decline in the investment around them in, say, building a new information technology park. This would bring with it a secondary loss of jobs. The outflow of Indian capital can also be accompanied by a decline in investment opportunities for smaller local capital in, say, basic construction.

The way out is to offset the outflow of capital due to deglobalisation in some parts of the world by attracting investment from the parts that are globalising. We can hope that the Government will finally see the contradiction between its attitude to the domestic market and its approach to global trade processes; the contradiction between rejecting OBOR even as it allows a surge of Chinese products in our domestic market.

Till such time, there may be an extra burden on our cities to attract foreign investment on their own. This would require a focus on aspects of urbanisation that have largely been brushed aside so far. The challenge in building urban infrastructure cannot be seen to be predominantly one of creating new glamorous projects.

The more routine problems such as avoiding flooding during rains cannot be considered only after the event. The challenge is daunting but it should not be impossible for an Indian city to gain an investment-attracting reputation of the kind Shanghai has.

The writer is a professor at the School of Social Science, National Institute of Advanced Studies, Bengaluru