From the age of Kings and Kingdoms, India is known for its global trade and its richness in globalization.
But recently our External Affairs Minister S. Jaishankar rebelled against globalization and global trade. Advocating trade protection and government assistance to domestic businesses and traders. According to him, the government should plug barriers in global trade. He quotes that in the name of openness we have allowed subsidies to/on products and other advantages to foreign enterprises and traders in justification for globalization.
On remarking FTA, the minister said that the effect of past trade agreements has been to deindustrialize some sectors. ( Basically, the idea was to justify the government moving out of Regional Comprehensive Economic Partnership.)
On Nov. 15th, 15 nations signed the Regional Comprehensive Economic Partnership(RECP), the largest regional trading arrangement of the pacific-Asian countries.
Anyway, today we are reviewing Mr. Jaishankar's arguments on Trade Protectionism and Globalisation.
Looking at the situation of India in the past decades we find that the ladder to our economic growth was to some extent nailed by foreign investments but by signing out of RCEP we stand at the edge of the regional global market.
As we know about the lazy WTO policies, FTAs are the major channel of trading and industrialization. And not being a part of major FTA's like RECP India is missing on the global chain of trade and business. This gives a major opportunity to the other Asian countries which are in direct competition with India in the global market.
Now secondly our honorable Minister quoted that India has grasped economic openness with so many opportunities for global trade.
However on comparing we find that our Indian economy is quite closed in comparison to other economies of the world. As per the WTO, our most favorable trade tariff is 13.8 percent which is the highest in any major economies.
Also, according to the UN Conference on Trade and Development, India ranks in the "very restrictive" category in import rankings.
We have commenced 972 anti-dumping measures maximum in any economy.
Nextly on observing the FTAs in the past 3 decades, we find that our economy has good profit via them. Also, these are one of the major foreign investments in our country.
Moreover, a common man knows that Indian markets require global products not only to satisfy the market needs but even to give the domestic market good competition and well-required reforms. Yet our government beliefs are stable on the ideology of trade protection.
Our market has already suffered the pain of no structural reforms in the past decades and again our "swadeshi Lao videshi bhagao neeti" is provoking the same graph to pitch in the economy.
The Prime Minister's desire to make India a global investment hub ( make in India) seems to blur with their policies and plans against FTAs.
No economy wishes to invest in an economy that is closed and protected for local competition.
What're your views on the topic of protectionism and globalization?
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