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the more prominent supporters of continued economic liberalization (primarily trade in goods and services, and possibly finance as well). India needs to start taking a more active role in bilateral and multilateral forums to ensure that the world economic order remains open. One step in this direction that may be feasible is the establishment of multiple bilateral FTAs, especially with the countries that currently contribute the greatest amount to global growth (Brazil,China, South Africa, Turkey, Indonesia and Nigeria).
    To a certain extent, there is a trade-off between pursuing openness through multilateral institutions and pursuing them through bilateral ones. In many ways bilateral agreements are a ‘second’ best. But they are easier to pursue than complex multilateral agreements. Yet India will need to ensure that its preference for bilateral agreements is not simply because it prefers the easy way out. Multilateral agreements remain an important goal, and will require greater domestic consensus-building.
    One strategic reason to maintain a greater emphasis on multilateral forums centres on China. It is very important that China remains tethered to a fair multilateral system, and a rule-bound international order. In that context, India’s own commitments to multilateralism can help to promote a rule-bound system. India’s opting out, or placing less importance on successful multilateral negotiations (even if the short-term costs seem high), may have effects on the whole system. So on a range of issues—currency, trade, finance—India needs to consider its options in the light of these changing realities and imperatives.
    Besides trade openness, India will have to push for greater mobility of people. It should possibly take a lead in innovative totalization agreements and tax treaties thatallow movement of labour and human capital. India has a possible advantage in services. India also needs to resist non-trade-related protectionism. A likely backdoor form of protectionism on the part of the developed economies is going to be a push for environmental standards and labour-related regulations. While India should commit to and enforce such environmental regimes and labour standards as are best for its population, it will have to build coalitions against arbitrary restrictions that amount to trade protection in disguise.
    India should also formulate policy in relation to cutting-edge areas like natural resource export protectionism. The recent controversy over rare earth materials is just a reminder that natural resource protectionism may become a tool in international negotiations. Further, India needs to take a more proactive role in international regimes to control illicit finance. Illicit flows of funds and money laundering have economic and security consequences. It is in India’s interest to ensure that there is global coordination on bank transparency, money laundering and tax havens.
    On questions of the mobility of goods, services, capital and labour, at present India’s restrictions greatly exceed those seen in the median G-20 nations. Hence, the domestic liberalization process continues to be importantand must be pursued, since India gains from unilateral liberalization, and also because India will not be taken seriously in the global debate on an open global order until it achieves above-median openness by the standards of G-20 nations. Notions of reciprocity should not be allowed to interfere with the more purely domestic agenda of removal of trade barriers. At the same time, India’s effective participation in global negotiations on an open world order will require bargaining chips. India will have to make difficult choices about what it is willing to put on the negotiating agenda.
    Meeting this set of strategic imperatives rests on domestic political skills and judgements. Ideally all international norms of openness rest on reciprocity. India needs to preserve openness globally—and so it should be