The conclusion of the free trade agreement with the Association of Southeast Asian Nations is a feather in Kamal Nath’s cap. When he became commerce minister, he adopted a one-point agenda for himself — a plan to make as many free trade agreements as possible. He looked forward to a day when 60 per cent of India’s foreign trade would be covered by FTAs. As commerce minister, he has travelled ceaselessly for five years. He tried to ignite a new round of trade talks under the aegis of the World Trade Organization without avail. He failed because industrial countries did not accept the precondition that India should not be asked to make any concessions on agriculture; some people suspected that he sabotaged the WTO negotiations because he was so intent on using India’s trade barriers as bargaining chips in negotiating FTAs. Undaunted, he started off negotiations for free trade agreements with a number of countries. He talked FTAs with any minister he met from any country — Pakistan, Israel, South Africa, Russia, Canada, Australia, Japan are just a few of the countries that received his offers. So the Indo-Asean FTA is a fruit borne by the ever-growing tree of his initiatives.

From a protectionist point of view, Mr Nath has also defended India’s interests ably. The agreement applies only to products traded between India and Asean. There are at least as many items that are not traded. They will experience no reduction of barriers. Even of the traded items, roughly a fifth will continue to be subjected to import duties. Mr Nath faced sustained pressure from the backward sections of Indian industry, and was extremely sensitive to their interests. So he persuaded Asean that India should not have to cut duties at all on 489 items, and only partially on 606 items. It also agreed to prohibitory duties that will effectively keep out Asean’s tea, coffee and pepper, and the government of India will continue to earn enormous revenue from import duty on palm oil.

After such a triumph, no one will be tempted to ask what happened to India’s dream of the Nineties. There was a time when India cut its import duties without asking for anything from anyone; and in 2002, it abolished all quantitative restrictions on imports. At that time, the government believed that eliminating duties made imports cheaper for our consumers and raised their standard of living, and made them cheaper for industrialists and brought down their costs. Duty-free imports are good for the country, and keeping duties high in the hope of using them to negotiate FTAs only hurts ourselves. That was Manmohan Singh’s belief; it was so powerful that even the National Democratic Alliance government, which did not understand economics, continued to reduce duties. The prime minister has never expressed himself on FTAs, but they can clearly not be concluded without his blessings. He would seem to have changed his stripes.