18 February 2025 : Indian Express Editorial Analysis

1. A new era of trade

(Source – Indian Express, Section – The Editorial Page – Page No. – 12)

Strategic Significance of the Modi-Trump Meeting

• The recent meeting between Indian Prime Minister Narendra Modi and US President Donald Trump addressed critical trade and economic issues, setting ambitious targets for future bilateral engagement.
• This meeting occurred in the context of global economic uncertainty, partly due to disruptive US policies under Trump’s administration.
• India had to navigate a complex geopolitical landscape, where traditional norms of trade and governance were being redefined.
• Trump’s emphasis on “fair and reciprocal” trade indicated a shift toward a more protectionist stance, requiring India to adapt accordingly.

Mission 500 and the Path to a Mega Trade Partnership

• A key outcome of the meeting was the agreement to pursue a multi-sector Bilateral Trade Agreement (BTA) by fall 2025, aligning with the broader framework of COMPACT (Catalysing Opportunities for Military Partnership, Accelerated Commerce, and Technology).
• India and the US aim to achieve a $500 billion trade target by 2030, requiring significant structural efforts.
• Both nations have strong intra-industry trade potential, particularly in chemicals, machinery, and automobiles.
• The US is expected to strengthen its trade presence in plastics, base metals, and precision instruments, while India is poised to expand in vegetable products, processed foods, and construction materials.
• These sectoral engagements could help moderate the existing trade imbalance and enhance economic interdependence.

Bilateral Trade Agreement (BTA) vs Free Trade Agreement (FTA)

• The proposed BTA is expected to focus on reducing tariffs, easing non-tariff barriers (NTBs), and improving market access for goods and services.
• Unlike an FTA, which covers a broader spectrum of trade and economic cooperation, a BTA is more flexible and sector-specific.
• It does not mandate covering “substantially all trade” and allows for simplified Rules of Origin (RoO), making it a less complex negotiation process.
• The BTA would also function as an exception to the Most-Favoured Nation (MFN) principle, providing preferential trade arrangements tailored to the strategic interests of both countries.

Challenges to the MFN Trade Framework

• Trump’s policies have raised concerns about the potential erosion of the MFN principle, a fundamental pillar of global trade established under the General Agreement on Tariffs and Trade (GATT) in 1947.
• The WTO Integrated Database (IDB) as of January 2025 highlights that over 80% of world merchandise trade still operates under MFN terms.
• However, Trump’s trade measures have created tensions, exemplified by China’s WTO complaint against additional ad valorem tariffs imposed by the US.
• China argues that these tariffs violate US obligations under GATT’s MFN rules, signaling broader disruptions in the international trade order.

India’s Strategic Response to the Changing Global Trade Landscape

To maximize its trade potential with the US while safeguarding broader economic interests, India must adopt a three-pronged approach:

1. Enhanced Institutional Dynamism: India must respond swiftly at multiple levels. While PM Modi has demonstrated agility in trade negotiations, a more cohesive effort from the state apparatus is needed. The PMO must lead a proactive strategy that fosters innovation in trade and investment frameworks.
2. Leveraging COMPACT to Overcome NTBs: India should focus on reducing trade barriers and expanding market access by adapting to US trade instruments, such as tariff-rate quotas (TRQs), which impose differential duty rates based on import volume thresholds.
3. Building a Global Narrative on MFN and Trade Reciprocity: India, along with Global South allies, should work to preserve MFN principles while negotiating fair reciprocal trade terms. This approach would contribute to a stable, predictable, and inclusive global trade system.

Conclusion

• The Modi-Trump meeting marked a significant step in redefining Indo-US trade relations.
• While the proposed BTA presents promising opportunities, India must navigate the changing global trade architecture strategically.
• The nation’s ability to balance preferential trade deals with multilateral commitments will be crucial in ensuring long-term economic growth and stability.

2. Social justice, not just quota

(Source – Indian Express, Section- The Ideas Page- Page No. – 13)

The Dilemma of Muslim Reservation in India

• The debate over reservation for Muslims presents a paradox: while affirmative action for the community is necessary, reserving seats in jobs and education exclusively for Muslims is not the ideal solution.
• This contradiction arises from the narrow way in which social justice is currently imagined in India—primarily through quotas.
• Every disadvantaged group, from ex-servicemen to displaced persons, seeks reservation as the default remedy, highlighting the limited tools available in India’s policy framework.

The Demand for Muslim Reservation and Its Context

• The demand for Muslim reservation has gained traction since the Sachar Committee Report (SCR) in 2006, which documented the educational and economic backwardness of Muslims.
• While the SCR did not recommend reservations, it provided the first official acknowledgment of their disadvantages.
• The National Commission for Linguistic and Religious Minorities (2007) later suggested a 10% quota for Muslims within a broader 15% minority reservation.
• Though the current political climate makes the implementation of this demand unlikely, reservation remains the dominant discourse on justice for Muslims.

A New Approach: Rethinking Affirmative Action

A recent report by Hilal Ahmed, Mohd Sanjeer Alam, and Nazima Parveen, published by the US-India Policy Institute and Centre for Development Policy and Practice, presents an alternative framework. The report advances the discussion in three key steps:

1. It argues for the necessity of affirmative action for Muslims.
2. It acknowledges that blanket reservation for the entire Muslim community is not a viable solution.
3. It proposes a diverse set of policies to address the specific disadvantages faced by different Muslim groups.

This approach offers a more nuanced, practical, and legally feasible pathway for uplifting Muslims while avoiding the pitfalls of exclusive religious quotas.

The Case for Affirmative Action for Muslims

• Muslims in India face multiple disadvantages—not just as a religious minority, but also in terms of education and economic opportunities.
• The SCR and subsequent studies have shown that Muslims lag behind Scheduled Castes (SCs) and Scheduled Tribes (STs) in education and are economically comparable to Other Backward Classes (OBCs).
• Despite similar income and parental education levels, upper-caste Hindus are twice as likely as Muslims to pursue higher education, attend private institutions, or enroll in professional courses.
• While the situation is improving in southern and western India, the stark inequality demands targeted policy interventions.

Why Blanket Muslim Reservation is Problematic

The idea of exclusive Muslim reservation faces three major challenges:

1. Legal-constitutional barriers:
   1. The Indian Constitution does not allow reservations based purely on religion.
   1. Courts have repeatedly rejected the classification of an entire religious group as a “socially and educationally backward class.”
2. Sociological complexity:
   1. Muslims are not a homogeneous community; they are divided into various biradaris (sub-castes) with differing socio-economic conditions.
   1. Treating all Muslims as a single backward group overlooks these internal disparities.
3. Political backlash:
   1. Any proposal for Muslim-specific reservations could trigger nationwide counter-mobilization, worsening communal tensions.
   1. Given the current political climate, such a demand is unlikely to succeed and may harm Muslim interests in the long run.

Alternative Policy Solutions: A Religion-Agnostic Approach

The report proposes a multi-pronged strategy that moves beyond quotas and focuses on targeted development policies that do not exclusively benefit Muslims but still address their disadvantages effectively.

1. Reforming the OBC Quota System:
   1. Instead of a separate quota for Muslims, backward Muslim communities should be fully integrated into the OBC reservation lists.
   1. Currently, only half of the Muslim population qualifies for OBC benefits, while studies suggest over 75% of Muslims meet the criteria for inclusion.
   1. States like Andhra Pradesh, Telangana, and West Bengal have already expanded OBC classification for Muslims; northern states need to follow suit.
2. Reclassifying OBCs into Two Categories:
   1. The existing OBC category should be split into “extremely backward” and “backward” groups, ensuring that the most disadvantaged Muslim communities receive adequate representation.
   1. However, the report warns against separate Muslim OBC sub-quotas, as seen in Kerala and Karnataka, which could be counterproductive.
3. SC Status for Dalit Muslims and Christians:
   1. The report advocates lifting the ban on Dalit Muslims and Christians from being classified as SCs, allowing them to access the same benefits as Hindu Dalits.
   1. This would correct a historical anomaly where “untouchable” Muslims and Christians are denied SC status solely due to their religion.
4. Anti-Discrimination Measures:
   1. Institutional discrimination based on religion must be addressed through a comprehensive anti-discrimination law.
   1. The creation of an Equal Opportunity Commission could ensure fair treatment in education, employment, and public services.

Beyond Reservation: Broader Developmental Strategies

The report recommends shifting focus from reservation in government jobs and education to holistic economic and social development through targeted policies:

1. Spatial Approach:
   1. Public investment in Muslim-concentrated areas (Minority Concentration Districts, Blocks, and Localities) to improve schools, healthcare, and infrastructure.
   1. Existing programs need better implementation to prevent benefits from being diverted to non-Muslim residents in these areas.
2. Sectoral Approach:
   1. Government support for Muslim-dominated industries like weaving, brass work, carpet making, and the meat industry.
   1. Special incentives for education and training in sectors where Muslims have a comparative advantage.
3. Engaging the Private Sector:
   1. Instead of enforcing quotas, corporate diversity requirements could be introduced for firms receiving government contracts or subsidies.
4. Encouraging Civil Society Participation:
   1. NGOs, self-help groups, and community charities can play a key role in educational and economic upliftment of Muslim communities.

Conclusion:

• While the current political environment may not be conducive to implementing these policies, it is crucial to have a well-researched framework ready for future use.
• The religion-agnostic affirmative action approach outlined in the report presents a legally viable, politically feasible, and socially just alternative to blanket Muslim reservation.
• By focusing on backward classes within Muslims, targeted economic upliftment, and anti-discrimination measures, India can ensure inclusive development without fueling communal divisions.